EXHIBIT 2.14
PURCHASE AND ASSUMPTION AGREEMENT
---------------------------------
by and between
THE CITIZENS NATIONAL BANK IN WAXAHACHIE
Waxahachie, Texas
and
SURETY BANK, N.A.
Hurst, Texas
Dated as of
April 13, 1999
TABLE OF CONTENTS
SECTION 1. SALE AND PURCHASE OF CERTAIN ASSETS AND ASSUMPTION AND TRANSFER OF
CERTAIN LIABILITIES.......................................................1
1.1 Sale of Assets..................................................1
1.2 Assets to be Retained by Seller.................................2
1.3 Assumption of Liabilities of Seller.............................3
1.4 Liabilities to be Retained by Seller............................3
1.5 Purchase Premium................................................4
1.6 Valuation of Assets and Liabilities.............................4
1.7 Delivery of Schedules...........................................4
1.8 The Closing, the Closing Date and the Effective Time............4
1.9 Preliminary Balance Sheet and Final Balance Sheet...............4
1.10 Adjustments.....................................................5
1.11 Deliveries by Seller at the Closing.............................5
1.12 Deliveries by Buyer at the Closing..............................7
1.13 Closing Costs and Recording.....................................7
1.14 Further Assurances..............................................7
1.15 Personnel.......................................................7
SECTION 2. REAL ESTATE PROVISIONS..............................................9
2.1 Commitment for Title Insurance and Survey.......................9
2.2 Objections and Remedies.........................................9
2.3 Title Insurance Policy.........................................10
2.4 Environmental Investigation....................................10
2.5 Destruction or Damage Prior to Closing.........................11
SECTION 3. REPRESENTATIONS AND WARRANTIES OF SELLER...........................12
3.1 Organization and Standing......................................12
3.2 Execution and Delivery.........................................12
3.3 Compliance with Laws, Permits and Instruments..................12
3.4 Litigation.....................................................13
3.5 Consents.......................................................13
3.6 Title to Assets................................................13
3.7 Real Property..................................................13
3.8 Financial Statements...........................................13
3.9 Absence of Certain Changes or Events...........................13
3.10 Contracts......................................................14
3.11 No Adverse Change..............................................14
3.12 Evidences of Indebtedness......................................14
3.13 Books and Records..............................................14
3.14 Regulatory Compliance..........................................14
3.15 Brokerage Fees.................................................15
3.16 Employee Matters...............................................15
3.17 Representations Not Misleading.................................15
SECTION 4. REPRESENTATIONS AND WARRANTIES OF BUYER............................15
4.1 Organization and Standing......................................15
4.2 Execution and Delivery.........................................15
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4.3 Compliance with Laws, Permits and Instruments..................15
4.4 Litigation.....................................................16
4.5 Consents.......................................................16
4.6 Brokerage Fees.................................................16
4.7 Disclosure.....................................................16
SECTION 5. COVENANTS OF SELLER................................................16
5.1 Best Efforts...................................................16
5.2 Information for Governmental Applications......................16
5.3 Required Acts of Seller........................................16
5.5 Prohibited Acts of Seller......................................17
5.6 Access; Pre-Closing Investigation..............................18
5.7 Additional Financial Statements................................18
5.8 Untrue Representations.........................................18
5.9 Notice of Adverse Changes, Litigation and Claims...............18
5.10 No Disclosure or Negotiation with Others.......................19
5.11 Notices to Customers...........................................19
SECTION 6. COVENANTS OF BUYER.................................................19
6.1 Best Efforts...................................................19
6.2 Regulatory Approvals...........................................19
6.3 Notice of Adverse Changes, Litigation and Claims...............19
6.4 Change of Name, Notice to Customers............................19
6.5 Use of Name....................................................20
SECTION 7. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF BUYER...................20
7.1 Compliance with Representations, Warranties and Agreements.....20
7.2 Necessary Corporate Actions....................................20
7.3 Governmental Approvals.........................................20
7.4 No Litigation..................................................21
7.5 No Material Adverse Change.....................................21
SECTION 8. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF SELLER..................21
8.1 Compliance with Representations, Warranties and Agreements.....21
8.2 Governmental and Other Approvals...............................21
8.3 No Litigation..................................................21
SECTION 9.
SURVIVAL OF REPRESENTATIONS, WARRANTIES,
AGREEMENT AND OBLIGATIONS; INDEMNIFICATION...............................22
9.1 Survival 22
9.2 Indemnification by Seller..... 22
9.3 Indemnification by Buyer...... 23
9.4 Limit on Indemnities.......... 23
SECTION 10. OPERATIONAL AGREEMENTS............................................23
10.1 Replacement of Customer Check Stock............................23
10.2 Payment of Checks, Drafts, and Orders..........................23
10.3 Uncollected Items..............................................24
10.4 Data Processing and Utilities..................................24
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10.5 Compliance with Garnishments and Similar Orders................25
10.6 Direct Deposit Arrangements....................................25
10.7 Direct Debit Arrangements......................................26
10.8 XXX Deposits...................................................26
10.9 Xxxxx Accounts.................................................26
10.10 Final Statements...............................................26
10.11 XXX Deposits and Xxxxx Accounts................................26
10.12 Interest Reporting and Withholding.............................27
10.13 Loans..........................................................27
10.14 Other Items....................................................28
10.15 Safe Deposit Box and Safekeeping Business......................28
10.16 Noncompetition Agreement.......................................28
10.17 Books and Records..............................................29
10.18 Taxes..........................................................29
10.19 Clearing Items.................................................29
SECTION 11. TERMINATION AND ABANDONMENT.......................................29
11.1 Right of Termination...........................................29
11.2 Notice of Termination..........................................30
11.3 Effect of Termination..........................................30
SECTION 12. MISCELLANEOUS.....................................................30
12.1 Entire Agreement...............................................30
12.2 Multiple Counterparts..........................................30
12.3 Amendment......................................................31
12.4 Notices........................................................31
12.5 Binding Effect.................................................31
12.6 Governing Law..................................................32
12.7 Attorneys' Fees and Costs......................................32
12.8 Severability...................................................32
12.9 Assignability..................................................32
12.10 Rules of Construction..........................................32
12.11 Expenses.......................................................32
12.12 Waiver.........................................................32
12.13 Specific Performance...........................................33
12.14 Public Disclosure..............................................33
12.15 Confidential Information.......................................33
12.16 Arbitration....................................................33
12.17 Seller's Knowledge.............................................33
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PURCHASE AND ASSUMPTION AGREEMENT
---------------------------------
THIS PURCHASE AND ASSUMPTION AGREEMENT (this "Agreement") is made and
entered into as of the 13th day of April, 1999, by and between The Citizens
National Bank in Waxahachie, a national banking association having its principal
place of business in Waxahachie, Texas ("Buyer"), and Surety Bank, N.A., a
national banking association having its principal place of business in Hurst,
Texas ("Seller").
RECITALS:
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WHEREAS, Seller desires to sell and transfer to Buyer, and Buyer desires to
purchase assets from Seller associated with the branches of Seller located at
000 X. Xxxxx Xxxxxx, Xxxxxxxxxx, Xxxxx (the "Midlothian Branch"), and 000 X.
Xxx, Xxxxxxxxxx, Xxxxx (the "Waxahachie Branch") (collectively, the "Branches"),
and to assume certain liabilities of Seller associated with the Branches as
hereinafter described on the terms and subject to the conditions set forth
herein;
NOW, THEREFORE, for and in consideration of the foregoing and of the mutual
representations, warranties, covenants and agreements contained herein, and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, and subject to the conditions herein set forth, the parties
hereto, intending to be legally bound hereby, do undertake, promise, covenant
and agree with each other as follows:
SECTION 1.
SALE AND PURCHASE OF CERTAIN ASSETS
------------------------------------
AND ASSUMPTION AND TRANSFER OF CERTAIN LIABILITIES
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1.1 Sale of Assets. On the terms and subject to the conditions contained
in this Agreement, at the Closing (as defined in Section 1.8) Buyer shall
purchase from Seller and Seller shall sell, convey, assign, transfer and deliver
to Buyer all of the rights, title, and interests of Seller in and to the
following assets of the Branches as a going concern, free and clear of all
liens, security interests, pledges, encumbrances, adverse claims and demands of
every kind, character and description whatsoever, except as otherwise provided
in this Agreement (all of which are collectively referred to herein as the
"Assets"):
A. All cash and other amounts due from banks, including cash items
in the process of collection (the "Cash on Hand");
B. All Loans (as defined in Section 1.1H) (except for any such loans
or any portions thereof that are repaid on or prior to the Effective Time),
plus accrued but unpaid interest on such loans through the Effective Time;
C. All rights, title and interest in the real property on which the
Branches are located, as described on Schedule 1.1(C), and all improvements
to such property, purchased, installed or constructed by or on behalf of
Seller and used in connection with the operation or maintenance of the
Branches, including, without limitation, buildings, structures, parking
facilities and drive-in teller facilities (the "Real Property");
D. All furniture, fixtures, leasehold improvements, equipment and
other tangible personal property located on or affixed to the Real Property
or used in connection with the operations of the Branches;
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E. All Prepaid Expenses (as defined in Section 1.9);
F. All safe deposit contracts and leases for the safe deposit boxes
located at the Branches as of the Effective Time (the "Safe Deposit
Contracts"); and
G. All books, records (including computer records), files and
documentation relating to the Assets and the Liabilities (the "Records"),
including, but not limited to:
(i) Signature cards, orders and contracts between Seller and
its depositors, including records related to XXX Deposits, and records
of similar character;
(ii) Records of deposit balances carried with other financial
institutions;
(iii) Loan and collateral records and credit files on all Loans;
(iv) Available tax records pertaining to the Real Property;
(v) Deeds, mortgages, abstracts, surveys, appraisals and other
instruments or records of title pertaining to real estate or real
estate mortgages; and
(vi) Card forms and printed copy of master applications, file
layouts, documentation of the files transferred, and a description of
the data in such files, as well as any other documentation to
facilitate the orderly operation and conversion to Buyer's system of
Seller's data processing operations.
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.
H. "Loans" shall refer to the outstanding obligations, as of the
Closing Date, associated with loans, and loan participations on the books
of the Branches as of the date of this Agreement (including unfunded or
partially funded loan commitments, lines of credit, and letters of credit
for which Buyer shall be responsible for providing the credit thereunder
from and after the Closing Date (the "Commitments"), and overdrafts less
than 30 days old as of the Closing Date. "Loans" shall also include loans,
Commitments, and loan participations associated with the Branches approved
by Seller (with Buyer's input pursuant to Section 5.4K) after the date of
this Agreement. Buyer shall succeed to all rights, title, benefits and
interests in and to the Assets as of the Effective Time, and shall be
entitled to receive all benefits therefrom.
1.2 Assets to be Retained by Seller. Seller shall retain all assets not
expressly purchased by Buyer pursuant to Section 1.1, including, but not limited
to all investment securities owned by Seller; all securities purchased by Seller
subject to repurchase agreements; all other real estate owned by Seller and
properties carried as in substance foreclosures that are associated with the
Branches (if any); all assets and records associated with the investment or
brokerage business of Seller or its affiliates, whether conducted at the
Branches or any other location of Seller; all intangible assets, including
goodwill and mortgage servicing rights, of Seller; all rights to the name
"Surety Bank, N.A." and any of Seller's corporate logos, trademarks, trade
names, signs, paper stock, monetary instruments (including, but not limited to,
traveler's checks and cashier's checks), forms and other supplies containing any
such logos, trademarks or tradenames; and all trust assets and trust accounts
(collectively, the "Excluded Assets"). Seller shall coordinate with Buyer to
remove the Excluded Assets from the Branches on or prior to the Effective Time.
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Seller shall remove the Excluded Assets at its own cost and will be responsible
for making any repairs necessitated by Seller's removal of the Excluded Assets.
1.3 Assumption of Liabilities of Seller. At the Closing, subject to the
conditions contained herein, Seller shall transfer and assign to Buyer, and
Buyer shall assume, pay for, perform and discharge from and after the Effective
Time, as and when due and payable, the following liabilities of Seller
attributable to the Branches and reflected on the general ledger of Seller (all
of which are collectively referred to herein as the "Liabilities"):
A. All deposits as of the Effective Time (the "Deposits"), including
accrued and unpaid interest on any interest-bearing deposits through the
Effective Time ( "Accrued Interest"), together with all duties and
obligations of Seller associated therewith, including, but not limited to,
the agreements with customers associated with such deposits (the "Deposit
Agreements"; the holders of record of the Deposits are hereinafter referred
to as the "Depositors"), but the Deposits shall not include the deposits of
the Branches listed on Schedule 1.3A nor shall the Deposits include deposit
overdrafts present on the books of the Branches 30 days or more as of the
Closing Date unless Buyer agrees otherwise; furthermore, the Deposits shall
not exceed $58,000,000;
B. All accrued real estate taxes on the Real Property attributable
to the portion of the year during which Buyer owns such banking facility;
C. All liabilities, duties and obligations under the Safe Deposit
Contracts;
D. All duties and obligations of Seller under the loan documents
related to the Loans;
E. All contracts listed on Schedule 1.3E; and
F. All accrued expenses associated with the Branches as contemplated
by Section 1.9.
Buyer shall succeed to all obligations and liabilities of Seller to the extent
included in the Liabilities as of the Effective Time, and shall be liable from
then and thereafter to pay, discharge and perform all of the Liabilities as if
Buyer had itself incurred such obligations and liabilities, and Buyer shall
succeed to all rights, offsets and defenses of Seller in connection therewith.
For purposes of this Agreement, the term "deposit" shall include, but not be
limited to, all uncollected items included in the depositors' balances and
credited on the books of Seller, and shall have the meaning identical to that
defined in section 3(1) of the Federal Deposit Insurance Act, 12 U.S.C. (S)
1813(1).
1.4 Liabilities to be Retained by Seller. Seller shall retain all
liabilities or obligations not expressly assumed by Buyer pursuant to Section
1.3, including, but not limited to:
A. All real estate taxes on other real estate and properties carried
as in substance foreclosures of Seller, all sales and use, social security
and unemployment taxes withheld or collected from employees or customers
and all accounts payable and operating expenses, whether or not accrued,
for products or services incurred prior to the Effective Time including,
but not limited to, salaries, attorneys' fees and telephone, utility,
advertising and public relations expenses;
B. All liabilities for overdrafts in accounts maintained by Seller
with other financial institutions, including accrued but unpaid interest
thereon through the Effective Time; and
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C. All real estate taxes on the Real Property attributable to the
portion of the year Seller owns such facility.
D. Liabilities or obligations with respect to any litigation, suits,
claims, demands or governmental proceedings arising, commenced or resulting
from the operations of the Branches prior to the Effective Time.
E. Seller's cashier checks, letters of credit, money orders,
interest checks and expense checks issued prior to closing, consignments of
U.S. Government "E" and "EE" bonds and any and all traveler's checks.
1.5 Purchase Premium. Buyer agrees to pay to Seller a premium (the
"Purchase Premium") equal to $6,000,000. Such amount shall be adjusted by mutual
agreement as of the close of business as of the end of the month immediately
prior to the Closing Date based upon the amount of Assets and Liabilities on the
books of the Branches as of such date. At the Closing, Seller shall transfer to
Buyer cash in an amount equal to the value of the Liabilities as determined
pursuant to Section 1.6, and at the Closing, Buyer shall transfer to Seller cash
in an amount equal to the sum of (a) the value of the Assets determined pursuant
to Section 1.6, plus (b) the Purchase Premium. In lieu of a direct payment of
funds from Buyer to Seller in accordance with the preceding sentence, the
parties agree that such amount shall be treated as an offset to the amounts to
be paid from Seller to Buyer pursuant to the preceding sentence.
1.6 Valuation of Assets and Liabilities. For purposes of calculating the
value of the Assets to be purchased and the Liabilities to be assumed by Buyer
from Seller, all such assets and liabilities shall be valued at their net book
value as shown on the books and records of Seller as of the Closing Date (as
defined in Section 1.8) (the "Net Book Value"); provided, however, that (i) book
value of any asset or liability not recorded in accordance with generally
accepted accounting principles shall be adjusted to conform with generally
accepted accounting principles and (ii) all Loans shall be valued at principal,
excluding accrued but unpaid interest.
1.7 Delivery of Schedules. Schedules provided for in this Agreement shall
be delivered to Buyer and Seller respectively no later than April 21, 1999. Each
party shall have two (2) business days to notify the other party whether the
information contained in the Schedules is acceptable to such party or constitute
a "material adverse change" as contemplated herein.
1.8 The Closing, the Closing Date and the Effective Time. The sale and
purchase of the Assets and the assumption of the Liabilities pursuant to this
Agreement (the "Closing") shall occur on a date mutually determined by Buyer and
Seller no later than 7 days after receipt of all required regulatory approvals
and expiration of all required waiting periods. The Closing shall be held at the
offices of Seller at 000 X. 0xx Xx., Xxxxxxxxxx, Xxxxx, at 10:00 a.m., unless
another place and time is mutually agreed upon by Buyer and Seller. The date of
the Closing is referred to herein as the "Closing Date." Buyer and Seller shall
use their best efforts to cause the Closing Date to occur on or before June 30,
1999. The effective time (the "Effective Time") shall be 2:00 p.m. (or such
later or earlier time as which deposits are posted by Buyer as of the next
business day), local time, on the Closing Date. Buyer and Seller specifically
agree that time is of the essence for all purposes with respect to this
Agreement and the transactions contemplated hereby.
1.9 Preliminary Balance Sheet and Final Balance Sheet. On the Closing
Date, Seller shall present Buyer with a list of the balances of the Assets and
the Liabilities as of a date 3 business days prior to the Closing Date,
certified by the Chief Executive Officer or Chief Financial Officer of Seller to
be true
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and correct as of the date reflected thereon (the "Preliminary Balance Sheet"),
and the parties will calculate all amounts pursuant to Sections 1.5 and 1.6 in
accordance with the amounts reflected on the Preliminary Balance Sheet. Within 3
days following the Closing Date, and when all the data with respect to the
Branches up to and including the Effective Time is available, Seller shall
present Buyer with a list of the balances of the Assets and the Liabilities as
of the Effective Time, certified by the Chief Executive Officer or Chief
Financial Officer of Seller to be true and correct as of the date reflected
thereon (the "Final Balance Sheet"). Additionally, Seller shall deliver to Buyer
a list of loans purchased, individually identified by account number, which list
shall be appended to the Xxxx of Sale. Subject to Buyer's rights of
indemnification pursuant to Section 11, the Final Balance Sheet shall become
final and binding on Buyer and Seller 10 business days after its delivery to
Buyer, unless Buyer gives written notice to Seller of its disagreement with
respect to any item included in such statement, including, without limitation,
any differences in application of method for calculating accrued interest
receivable. Seller and Buyer shall use reasonable efforts to resolve the
disagreement during the 10 day period following receipt by Seller of the notice.
If the disagreement is not resolved during such 10-day period, the parties agree
to follow the procedures set forth in Section 12.16 to resolve such dispute, and
such Final Balance Sheet shall be modified by any such resolution, whereupon the
Final Balance Sheet shall become final and binding. When the Final Balance Sheet
becomes final and binding, an appropriate adjusting settlement payment from
Seller to Buyer or from Buyer to Seller, as the case may be, will be made
together with accrued interest calculated at the federal funds rate in effect on
the Closing Date for the number of days elapsed between the Closing Date and the
date of such adjusting settlement payment.
1.10 Adjustments. All operating expenses and fees accrued or prepaid on or
prior to the Effective Time, including, without limitation, wages, salaries,
deposit insurance premiums, utility payments, telephone charges, prepaid rents,
property taxes, other ordinary operating expenses of the Branches and other
expenses related to the Assets or Liabilities, shall be prorated between the
parties as of the Effective Time. All real property taxes with respect to the
Real Property shall be prorated based upon the tax rate in effect as of the
Closing Date of the appropriate taxing authority. All amounts prepaid on Safe
Deposit Contracts shall be prorated through the Effective Time, and all deposits
paid thereon shall be paid to Buyer. Notwithstanding Seller's normal practices
and procedures, to the extent that Seller has paid expenses that are expenses
allocable to Buyer pursuant to this Section 1.9, such expenses shall appear as
"Prepaid Expenses" on the Preliminary Balance Sheet, or, if not allocable as of
the date the Preliminary Balance Sheet is calculated (the "Preliminary Balance
Sheet Date"), on the Final Balance Sheet. Notwithstanding Seller's normal
practices and procedures, to the extent that expenses have been incurred but not
paid by Seller on or prior to the Effective Time, they shall appear as an
"Accrued Expense" on the Preliminary Balance Sheet or, if not incurred by the
Preliminary Balance Sheet Date, on the Final Balance Sheet.
1.11 Deliveries by Seller at the Closing. At the Closing, Seller shall
execute, acknowledge and deliver to Buyer in recordable form as appropriate, and
with third party consents and releases of liens and security interests when
required, certificates and other instruments of sale, conveyance, transfer and
assignment relating to all of the Assets, and containing warranties consistent
with the representations and warranties contained in this Agreement, including
without limitation, the following (all of such actions constituting conditions
precedent to Buyer's obligations to close hereunder):
A. A general warranty xxxx of sale covering the Personal Property;
B. A special warranty deed conveying good and indefeasible fee
simple title to the Real Property, subject only to ad valorem taxes for the
year in which the Closing occurs and the Permitted Exceptions;
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C. Documents properly endorsed for transfer reflecting the
assignment of all notes, guaranties, security agreements and any other
agreements to inure to the benefit of Buyer with respect to the Loans, and
possession of any escrow deposits relating to the Loans;
D. All collateral security of any nature whatsoever held by Seller
as collateral for any of the Assets;
E. All of the Records;
F. The Preliminary Balance Sheet.
G. The Cash on Hand and such of the other Assets that are capable of
physical delivery;
H. A certificate duly executed by an authorized officer of Seller,
dated as of the Closing Date, pursuant to which such officer shall certify
that all of the representations and warranties of Seller as set forth in
this Agreement are true and correct as of the Closing Date and that there
have been no material adverse changes in the condition of the Assets as of
the Closing Date;
I. A certificate duly executed by the Cashier or Secretary of Seller
pursuant to which such officer shall certify (i) the due adoption by the
Board of Directors of Seller of corporate resolutions attached to such
certificate authorizing the transaction and the execution and delivery of
this Agreement and the other agreements and documents contemplated hereby
and the taking of all actions contemplated hereby and thereby; and (ii) the
incumbency and true signatures of those officers of Seller duly authorized
to act on its behalf in connection with the transaction contemplated by
this Agreement and to execute and deliver this Agreement and other
agreements and documents contemplated hereby and the taking of all actions
contemplated hereby and thereby on behalf of Seller;
J. All documents, contracts, certificates, instruments, keys and
records necessary or appropriate to transfer the safe deposit and
safekeeping businesses, if any, of the Branches to Buyer;
K. Possession of the Assets and access to and keys to the Branches
and all security devices located at the Branches, together with security
codes for access to the Branches and combinations to all locking devices of
Seller located at the Branches;
L. A list, certified by an authorized officer of Seller, setting
forth all garnishments, similar court orders, tax liens and orders of any
governmental entity in effect with respect to the Deposits;
M. Payment to Buyer as may be required pursuant to Section 1.5 in
immediately available funds (such payment to be made at a time no later
than 12:00 Noon, Waxahachie, Texas time, on the Closing Date);
N. A Power of Attorney in a form to be mutually agreed upon by Buyer
and Seller;
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O. Such other documents as may be reasonably required by the Title
Company in connection with the issuance of the Title Policy; and
P. All other documents, certificates and instruments of conveyance,
transfer and assignment as are reasonably requested by Buyer or Buyer's
counsel. All instruments, agreements and certificates described in this
Section 1.10 shall be in form and substance reasonably satisfactory to
Buyer's legal counsel.
1.12 Deliveries by Buyer at the Closing. At the Closing, Buyer shall
execute, acknowledge and deliver to Seller, in recordable form as appropriate,
such documents and certificates necessary to carry out the terms and provisions
of this Agreement, including without limitation the following (all of such
actions constituting conditions precedent to Seller's obligations to close
hereunder):
A. An assignment and assumption agreement by which Buyer assumes the
Liabilities;
B. A certificate duly executed by an authorized officer of Buyer,
dated as of the Closing Date, pursuant to which such officer shall certify
that all of the representations and warranties of Buyer as set forth in
this Agreement are true and correct as of the Closing Date;
C. A certificate duly executed by the Cashier or Assistant Cashier
of Buyer pursuant to which such officer shall certify (i) the due adoption
by the Board of Directors of Buyer of corporate resolutions attached to
such certificate authorizing the execution and delivery of this Agreement
and the other agreements and documents contemplated hereby and the taking
of all actions contemplated hereby and thereby on behalf of Buyer, and (ii)
the incumbency and true signatures of those officers of Buyer duly
authorized to act on its behalf, in connection with the transaction and
this Agreement and to execute and deliver the Agreement on behalf of Buyer;
and
D. Such other documents, certificates and instruments as are
reasonably requested by Seller and Seller's counsel. All instruments,
agreements and certificates described in this Section 1.11 shall be in form
and substance reasonably satisfactory to Seller's legal counsel.
1.13 Closing Costs and Recording. Seller and Buyer shall each pay one-half
of any documentary, stamp or other transfer taxes, recording fees and escrow
fees relating to the sale of the Real Property. Except as otherwise specified in
this Agreement, Buyer shall be responsible for filing or recording any
instruments or documents evidencing, or otherwise notifying persons who are not
parties to this Agreement regarding, the consummation of the transactions
contemplated by this Agreement.
1.14 Further Assurances. From time to time following the Closing, at the
request of any party hereto and without further consideration, the other party
hereto shall execute and deliver to such requesting party such instruments and
documents and take such other action (but without incurring any material
financial obligation) as such requesting party may reasonably request in order
to consummate more fully and effectively the transactions contemplated hereby.
1.15 Personnel. The parties shall follow the following procedure in
dealing with employees of the Branches regarding employment after the Closing:
A. With respect to all employees of Seller affiliated with the
Branches ("Employees"), as soon as reasonably practicable, but no later
than 10 days after the date hereof, Seller shall notify each Employee that
Seller and Buyer have entered into an agreement with
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respect to the Buyer's acquisition of the Branches. Seller shall also
furnish to Buyer within such time period a schedule containing the name of
each Employee, such Employee's salary and benefits, and a synopsis of each
Employee's tenure with Seller and any other information reasonably
requested by Buyer with respect to such Employee, upon receipt by Seller of
each such Employee's consent to such delivery.
B. Within 20 days of receipt of information referred to in Section
A. above, Buyer shall (i) interview each of the Employees, (ii) deliver to
Seller a confidential list (the "Employment List") setting forth the
Employees to whom Buyer intends to offer employment beginning at the
Closing, the position to be offered to each such Employee and such
Employee's anticipated compensation and employee benefits (which Employment
List may not be changed prior to the Closing except upon mutual agreement
of Buyer and Seller, except that the terms of the Employment List shall not
be applicable with respect to the employment of any Employee who does not
accept employment with Buyer in accordance with the terms of this Section
1.14), and (iii) at a date to be mutually agreed upon by Seller and Buyer,
offer to each such Employee a position with Buyer on the terms reflected in
the Employment List with respect to such Employee. Each Employee will have
5 business days to accept or reject the offer made by Buyer to such
Employee. Each Employee who accepts the offer of employment made by Buyer
is hereinafter referred to as a "Designated Employee." If an Employee (i)
is not offered employment by Buyer or (ii) rejects Buyer's offer of
Employment with such five-day period, Seller may, at its option, approach
such Employee to discuss opportunities for such Employee to transfer to
other positions with Seller or its affiliates after the Closing. Seller
shall pay any and all costs (including without limitation, severance pay
and accrued vacation pay) associated with any transfer or termination of
any Employee of Seller other than the Designated Employees.
C. Buyer and Seller shall coordinate all communications of
employment offers to, or plans to terminate, any Employee; provided,
however, this paragraph shall not be construed to require Buyer and Seller
to act jointly at any time.
D. On the Closing Date, Buyer shall employ each of the Designated
Employees at the positions and with the compensation and benefits set forth
in the Employment List. Buyer shall not employ any Employees of Seller
prior to the Closing Date. Buyer shall not be obligated to make any
contribution to any plan or program on behalf of any of such employees, or
to otherwise provide any compensation or benefits to any of such employees,
with respect to any period prior to the Closing. It is further provided
that in no way shall Buyer be liable for any claims of any Designated
Employees or other employees of the Branches that any of them may have
against Seller.
E. Seller shall retain all liabilities and obligations (including,
without limitation, the liability and obligation for all wages, salary,
vacation pay and unemployment, medical, dental, vision, health, disability
and retirement benefits), for any claims incurred by any Employee prior to
the Effective Time. Buyer shall not at any time assume any liability for
the benefits of any Employee under any of Seller's plans. Seller shall be
responsible for providing any Employee whose "qualifying event," within the
meaning of section 4980B(f) of the Internal Revenue Code of 1986, as
amended (the "Code"), occurs on or prior to the Effective Time (and such
Employee's "qualified beneficiaries" within the meaning of section 4980B(f)
of the Code) with the continuation of group health coverage required by
section 4980B(f) of the Code under the terms of the health plan maintained
by Seller.
8
F. Nothing in this Section is intended, nor shall it be construed,
to confer any rights or benefits upon any person other than Buyer and
Seller.
G. Prior to the Closing Date, Seller shall reasonably cooperate with
Buyer, at Buyer's expense and at no expense to Seller, in making Employees
available to Buyer, its employees and representatives at reasonable times
for such training as Buyer deems advisable such times to be other than
during lobby hours; provided, however, Buyer shall conduct such training
program (some of which training may be conducted off-site from the
Branches) in a manner that does not materially interfere with or prevent
the performance of the normal duties and activities of such Employees or
the operation of the Branch at which such Employees are employed. Buyer
shall not be liable for the acts or omissions of Seller's agents or
employees.
H. Nothing in this Section is intended, nor shall it be construed,
to obligate Buyer to hire any current Employees of Seller.
I. Seller shall use its reasonable best efforts to maintain its
Employees as employees of the Seller at the Branches until the Closing
Date.
SECTION 2.
REAL ESTATE PROVISIONS
----------------------
2.1 Commitment for Title Insurance and Survey. Within 30 business days
from the date of this Agreement, Seller shall, at its expense, deliver to Buyer
and Buyer's counsel (a) a title commitment (including all documents, instruments
or agreements evidencing or creating the exceptions referenced in such
commitment) (the "Commitment") issued by Xxxxx County Abstract & Title,
Waxahachie, Texas (the "Title Company") covering the Real Property and (b) a
land title survey of the Real Property, prepared and certified as to all matters
shown thereon by a surveyor licensed by the State of Texas (the "Survey"), which
Survey shall include a notation stating whether or not any portion of the Real
Property is located in a 100-year flood plain, flood-prone area of special flood
hazard and shall show the specific location of any portions of the Real Property
that may be located in any such flood areas. The Commitment shall reflect that
Buyer has good and indefeasible title to the Real Estate, subject only to (1)
any shortages in area, (2) taxes for 1999 and subsequent years and subsequent
assessments for prior years due to a change in land usage or ownership, (3)
existing building and zoning ordinances, (4) utility easements, reservations or
other exceptions accepted or deemed waived by Buyer.
2.2 Objections and Remedies. If the Commitment contains any exceptions
other than those described in Section 2.1, Buyer may object to such exceptions
by providing written notice of such objection on or before the close of business
on the fifth business day after delivery of the Commitment and the Survey to
Buyer. All objections raised by Buyer are referred to herein as the
"Objections". Within 30 days after receipt of the Objections, Seller shall
either (i) remedy or remove all Objections, or (ii) notify Buyer that Seller has
elected not to remedy or remove some or all of the Objections. In the event
Seller gives the notice set forth in the preceding clause (ii) of this Section
2.3, or in the event Seller fails to remedy or remove all Objections within said
30-day period, Buyer may (as its sole remedy) on or before close of business on
the fifth business day after such 30-day period (or, if applicable, on or before
close of business on the fifth business day after receipt of Seller's notice),
terminate this Agreement in its entirety by giving Seller written notice,
whereon this Agreement shall terminate and have no further force and effect
except as set forth in Section 11.3 hereof. If Buyer fails to terminate within
such 5-business day period, Buyer shall be deemed to have waived its Objections.
9
2.3 Title Insurance Policy. At the Closing, Seller shall, at its expense,
cause the Title Company to issue a Texas Owner's Policy of Title Insurance,
covering the Real Estate in the amount equal to its Net Book Value as of the
Closing Date. Such policy shall guarantee Buyer's title to the Real Property to
be good and indefeasible subject only to the exceptions set forth in Section 2.1
(the "Permitted Exceptions").
2.4 Environmental Investigation
A. Buyer and its consultants, agents and representatives, shall have
the right to the same extent that Seller has such right, but not the
obligation or responsibility, to inspect the Properties, including, without
limitation, conducting asbestos surveys and sampling, environmental
assessments and investigation, and other environmental surveys and analyses
including soil and ground sampling ("Environmental Inspections") at any
time on or prior to 20 days after the date hereof. Any Environmental
Inspection conducted by Buyer shall be at the expense of Buyer. Buyer
shall notify Seller prior to any physical inspections of the Properties,
and Seller may place reasonable restrictions on the time of such
inspections. If, as a result of any such Environmental Inspection, further
investigation ("Secondary Investigation") including, without limitation,
test borings, soil, water and other sampling is deemed desirable by Buyer,
Buyer shall (i) notify Seller of any Property for which it intends to
conduct such a Secondary Investigation and the reasons for such Secondary
Investigation, and (ii) commence such Secondary Investigation, on or prior
to 40 days after the date hereof. Any Secondary Investigation conducted by
Buyer shall be at the expense of Buyer. Buyer shall give reasonable notice
to Seller of such Secondary Investigations, and Seller may place reasonable
time and place restrictions on such Secondary Investigations.
B. Seller agrees to indemnify and hold harmless Buyer for any claims
for damage to property, or injury or death to persons, made as a result of
any Environmental Inspection or Secondary Investigation conducted by Buyer
or its agents, which damage or injury is attributable to the negligent
actions or negligent omissions of Seller or its agents. Buyer agrees to
indemnify and hold harmless Seller for any claims for damage to property,
or injury or death to persons, attributable to the negligent actions or
omissions of Buyer or its agents in performing any Environmental Inspection
or Secondary Investigation. Buyer shall not have any liability or
responsibility of any nature whatsoever for the results, conclusions or
other findings related to any Environmental Inspection, Secondary
Investigation or other environmental survey. If this Agreement is
terminated, then except as otherwise required by law, reports to any
governmental authority of the results of any Environmental Inspection,
Secondary Investigation or other environmental survey shall be made by
Seller and not by Buyer. Buyer shall make no such report prior to the
Closing unless required to do so by law, and in such case will give Seller
reasonable notice of Buyer's intentions.
C. Buyer shall have the right to terminate this Agreement if (i) the
results of such Environmental Inspection, Secondary Investigation or other
environmental survey are disapproved by Buyer because the environmental
inspection, Secondary Investigation or other environmental survey
identifies violations or potential violations of Environmental Laws; (ii)
Seller has refused to allow Buyer to conduct an Environmental Inspection or
Secondary Investigation in a manner that Buyer reasonably considers
necessary; (iii) the Environmental Inspection, Secondary Investigation or
other environmental survey identifies any past or present event, condition
or circumstance that would or potentially would require remedial or cleanup
action or result in a material adverse change in the Assets or the business
of such Branch; (iv) the presence of any underground or above ground
storage tank in, on or under any Property that is not shown to be in
compliance with all Environmental Laws applicable to the tank either now or
at a future time certain, or that has had
10
a release of petroleum or some other Hazardous Material that has not been
cleaned up to the satisfaction of the relevant governmental authority or
any other party with a legal right to compel cleanup. Promptly upon receipt
of all reports associated with the Environmental Inspections and any
Secondary Investigation, Buyer shall notify Seller in writing if Buyer
intends to terminate this Agreement pursuant to this Section 2.5. Seller
shall have the opportunity to correct any objected to violations or
conditions to Buyer's reasonable satisfaction for a period of 10 days after
such notice. If Seller fails to demonstrate its satisfactory correction of
the violations or conditions to Buyer, Buyer may terminate this Agreement
at any time after such 10-day period.
D. Seller agrees to make available to Buyer and its consultants,
agents and representatives all documents and other material relating to
environmental conditions of the Property including, without limitation, the
results of other environmental inspections and surveys. Seller also agrees
that all engineers and consultants who prepared or furnished such reports
may discuss such reports and information with Buyer and shall be entitled
to certify the same in favor of Buyer and its consultants, agents and
representatives and make all other data available to Buyer and its
consultants, agents and representatives.
E. The term "Environmental Laws" means the common law and all
federal, state, local and foreign laws or regulations, codes, orders,
decrees, judgments or injunctions issued, promulgated, approved or entered
thereunder, now or hereafter in effect, relating to pollution or protection
of public or employee health or safety or the environment, including,
without limitation, laws relating to (i) emissions, discharges, releases or
threatened releases of Hazardous Materials, into the environment
(including, without limitation, ambient air, indoor air, surface water,
ground water, land surface or subsurface strata), (ii) the manufacture,
processing, distribution, use, generation, treatment, storage, disposal,
transport or handling of Hazardous Materials, and (iii) underground and
above ground storage tanks, and related piping, and emissions, discharges,
releases or threatened releases therefrom.
F. The term "Property" or "Properties" consists of: (i) all real
property owned or leased by Seller relating to the Branches, including but
not limited to the Real Property.
G. The term "Hazardous Material" means any pollutant, contaminant,
chemical, or toxic or hazardous substance, constituent, material or waste,
or any other chemical, substances, constituent or waste including, without
limitation, petroleum, including crude oil or any fraction thereof, or any
petroleum product.
2.5 Destruction or Damage Prior to Closing. In the event of damage to or
destruction of all or any portion of the Real Property by fire or other casualty
prior to the Effective Time, Seller will promptly notify Buyer of the nature and
extent of such damage or destruction, the amount estimated to be necessary to
repair or restore the Real Property, the amount, if any, of Seller's insurance
proceeds that are available to make such repairs or restoration and the
estimated period of time it will take to make such repairs and restoration. The
rights and obligations of the parties by reason of such damage or destruction
shall be as follows:
A. If the estimated time for completion of the repairs to the Real
Property is three months or less, then Buyer, at Buyer's option, may (i)
take title to the Real Property subject to such damage or destruction with
Seller assigning to Buyer all Seller's rights to proceeds of insurance
carried by Seller and payable as a result of such damage or destruction, or
(ii) request that Seller cause the repairs to be made, in which case Seller
shall cause the repairs to be made and the Closing Date shall be extended
until the repairs are completed.
11
B. If the estimated time for completion of the repairs to the Real
Property is more than three months, then Buyer, at Buyer's option, may (i)
take title to the Real Property subject to such damage or destruction with
Seller assigning to Buyer all Seller's rights to proceeds of insurance
carried by Seller and payable as a result of such damage or destruction,
(ii) subject to (c) below, request in writing (the "Buyer's Repair
Request") that Seller cause the repairs to be made, in which case Seller
shall cause the repairs to be made and the Closing Date shall be extended
until the repairs are completed, or (iii) terminate this Agreement by
giving written notice to such effect to Seller not later than 10 days after
receipt of written notice from Seller notifying Buyer of the estimated time
needed for repair, whereupon this Agreement shall terminate and have no
further force or effect except as set forth in Section 11.3.
C. In the event Buyer requests that Seller repair the Real Property
pursuant to (b)(ii) above, Seller, shall have the option to terminate this
Agreement by giving notice to such effect to Buyer not later than 10 days
after receipt of Buyer's Repair Request, whereupon this Agreement shall
terminate and have no further force or effect except as set forth in
Section 11.3.
SECTION 3.
REPRESENTATIONS AND WARRANTIES OF SELLER
----------------------------------------
Seller represents and warrants to Buyer as follows:
3.1 Organization and Standing. Seller is a national banking association
duly organized, validly existing and in good standing under the laws of the
United States, and has full power and authority (including all licenses,
franchises, permits and other governmental authorizations as are legally
required) to own, operate and/or lease its properties and to carry on the
business and activities now conducted by it. Seller is an insured financial
institution as defined in the Federal Deposit Insurance Act, and all of the
Deposits are insured by the Bank Insurance Fund. Seller has all requisite
corporate power to enter into this Agreement with Buyer, to carry out its
obligations under this Agreement and to consummate the transactions contemplated
hereby.
3.2 Execution and Delivery. Seller has taken all corporate and
shareholder action, if any, necessary to authorize the execution, delivery and
(provided the required regulatory approvals are obtained) performance of this
Agreement and the other agreements and documents contemplated hereby to which it
is a party. This Agreement has been, and the other agreements and documents
contemplated hereby have been or at Closing will be, duly executed by Seller
constituting the valid and binding obligation of Seller, enforceable in
accordance with their respective terms and conditions, except as enforceability
may be limited by bankruptcy, insolvency, reorganization or similar laws and
judicial decisions affecting the rights of creditors generally and by general
principles of equity (whether applied in a proceeding at law or in equity).
3.3 Compliance with Laws, Permits and Instruments. To the knowledge of
Seller, the Branches have been operated in all material respects in accordance
with applicable laws, rules and regulations. The execution, delivery and
(provided the required regulatory and shareholder approvals are obtained)
performance of this Agreement and the consummation of the transactions
contemplated hereby will not conflict with, or result, by itself or with the
giving of notice or the passage of time, in any violation of or default under,
any provision of the Articles of Association or Bylaws of Seller or any material
mortgage, indenture, lease, agreement or other instrument or any permit,
concession, grant, franchise, license, contract, authorization, judgment, order,
decree, writ, injunction, statute, law, ordinance, rule or regulation applicable
to Seller or its properties.
12
3.4 Litigation. There are no actions, claims, suits, investigations or
proceedings pending or, to Seller's knowledge, threatened (or any basis therefor
known by Seller) affecting the Assets or Liabilities at law or in equity, or by
or before any governmental department, commission, board, bureau, agency or
instrumentality, that involve any claim not fully covered by insurance. No
legal action, suit or proceeding or judicial, administrative or governmental
investigation is pending or, to the knowledge of Seller, threatened against
Seller that questions or might question the validity of this Agreement or any
actions taken or to be taken by Seller pursuant hereto or seeks to enjoin or
otherwise restrain the transactions contemplated hereby.
3.5 Consents. Other than governmental approvals contemplated by Section
7.3, no approval, consent, authorization or action of, filing with, any
governmental body or other third party is required on the part of Seller in
connection with (a) the execution, delivery or performance by Seller of this
Agreement and the other agreements and documents contemplated hereby or (b) the
consummation by Seller of the transactions contemplated hereby.
3.6 Title to Assets. Except for Permitted Exceptions, Seller has good
and marketable title, free and clear of all security interests, mortgages,
encumbrances, pledges, trust agreements, liens or other adverse claims to any of
the Assets. No person or entity other than Seller has any right, title or
interest in and to any of the Assets. Upon payment by Buyer of the amounts
contemplated by this Agreement, Buyer will acquire good and indefeasible title
to the Assets, free and clear of any lien, charge, encumbrance, option or
adverse claim, other than Permitted Exceptions.
3.7 Real Property. Schedule 1.1(C) contains an accurate and complete
description of the Real Property. Seller has received no notice of, or is not
otherwise aware of, any proposed condemnation or eminent domain proceeding with
respect to the Real Property or any portion thereof. Except as specifically set
forth herein or disclosed to Buyer in writing within 30 business days after the
execution of this Agreement, Seller has not entered into any agreement regarding
the Real Property, and the Real Property is not subject to any claim, demand,
suit, proceeding or litigation of any kind, pending or outstanding, or to the
knowledge of Seller, threatened or likely to be made or instituted, that would
in any way be binding upon Buyer or its successors or assigns or materially
affect or limit Buyer's or its successors' or assigns' use and enjoyment of the
Real Property or that would materially limit or restrict Buyer's right or
ability to enter into this Agreement and consummate the sale and purchase
contemplated hereby. To Seller's best knowledge and belief, the Real Property
and collateral underlying the Loans are free from contamination with Hazardous
Materials.
3.8 Financial Statements. Seller has provided Buyer with daily statements
and trial balances that fairly present, in all material aspects, the financial
condition of the Branches in accordance with generally accepted accounting
principles, including a list of overdrafts, past due Loans, new and renewed
Loans and new and closed accounts, with respect to the Assets and Liabilities of
the Branches as of March 31, 1999 (the "Financial Statements");
3.9 Absence of Certain Changes or Events. Since March 31, 1999, with
respect to its Branches, Seller has conducted its business only in the ordinary
course and has not, other than in the ordinary course of business and consistent
with past practices and safe and sound banking practices:
A. Incurred any obligation or liability, absolute, accrued,
contingent or otherwise, whether due or to become due;
13
B. Mortgaged, pledged or subjected to lien, charge, security
interest or any other encumbrance or restriction any of the Assets;
C. Sold, transferred, leased to others or otherwise disposed of any
of the Assets;
D. Terminated, canceled or surrendered, or received any notice of or
threat of termination or cancellation of any contract, lease or other
agreement or suffered any damage, destruction or loss (whether or not
covered by insurance) which, in any case or in the aggregate, has had a
materially adverse affect on the Assets;
E. Suffered any change, event or condition that, in any case or in
the aggregate, has had or may have a materially adverse effect on the
Assets or the Liabilities; or
F. Entered into any agreement or made any commitment to take any of
the types of action described in subsections A. through E. above.
3.10 Contracts. There are no agreements, contracts or commitments
affecting the Assets to which Seller is a party and that require consent by any
other person or entity in connection with the consummation of the transactions
contemplated hereby either to prevent a breach or to continue the effectiveness
thereof.
3.11 No Adverse Change. To the knowledge of Seller, and except as
disclosed in the representations and warranties made hereunder, there has been
no material adverse change nor any event or condition that has had, nor has a
reasonable possibility of having in the future, a material adverse change,
financial or otherwise, in the Assets or Liabilities since March 31, 1999. No
material liabilities affecting the Branches have been incurred since March 31,
1999, other than those arising from normal transactions in the ordinary course
of business that have been or will be disclosed to Buyer in writing prior to the
Closing Date.
3.12 Evidences of Indebtedness. To the knowledge of Seller, all evidences
of indebtedness and leases reflected as Assets of Seller associated with the
Branches are legal, valid and binding obligations of the respective obligors
thereof enforceable in accordance with their respective terms (except as limited
by applicable bankruptcy, insolvency, reorganization and similar laws affecting
creditors generally and the availability of injunctive relief, specific
performance, and other equitable remedies) and are not subject to any defenses,
offsets or counterclaims that may be asserted against Seller or the present
holder thereof. Anything herein to the contrary notwithstanding, Seller does not
guarantee collectibility of any of the Loans.
3.13 Books and Records. To the knowledge of Seller, the books and records
of the Branches of Seller have been kept accurately in the ordinary course of
business, the transactions entered therein represent bona fide transactions and
the revenues, expenses, assets and liabilities of Seller have been properly
recorded in such books and records.
3.14 Regulatory Compliance. To the knowledge of Seller, and except as
disclosed in writing to Buyer, all reports, records and other documents or
information involving any of the Assets or the Liabilities or the operation of
the Branches that are required to be filed by Seller with any regulatory
authority including, without limitation, the OCC, the Federal Deposit Insurance
Corporation and the Internal Revenue Service have been duly and timely filed and
all information and data contained in such reports, records or other documents
is true, accurate and correct.
14
3.15 Brokerage Fees. Seller has not paid or agreed to pay any fee or
commission to any agent, broker, finder or other person for or as a result of
services rendered as a broker or finder in connection with this Agreement or the
transactions covered and contemplated hereby. All negotiations relating to this
Agreement have been conducted by Seller directly and without the intervention of
any person in such manner as to give rise to any valid claim against Seller for
any brokerage commission or like payment.
3.16 Employee Matters. Schedule 3.16 lists the names of all Employees as
of the date specified thereon and states for each such individual his or her
position, dates of employment with Seller, years of service and present
compensation.
3.17 Representations Not Misleading. No representation or warranty by
Seller contained in this Agreement, and no statement made by Seller contained in
any other agreement or document contemplated hereby, contains or will contain
any untrue statement of material fact or omits or will omit to state any
material fact necessary to make the statements herein or therein, in light of
the circumstances under which it was or will be made, not misleading.
SECTION 4.
REPRESENTATIONS AND WARRANTIES OF BUYER
---------------------------------------
Buyer represents and warrants to Seller as follows:
4.1 Organization and Standing. Buyer is a national banking association
duly organized, validly existing and in good standing under the laws of the
United States and has full power and authority (including all licenses,
franchises, permits and other governmental authorizations that are legally
required) to own, operate and lease its properties and to carry on the business
and activities now conducted by it. Buyer has all requisite corporate power to
enter into this Agreement and carry out its obligations under this Agreement and
to consummate the transactions contemplated hereby.
4.2 Execution and Delivery. Buyer has taken all corporate action
necessary to authorize the execution, delivery and (provided the required
regulatory approvals are obtained) performance of this Agreement and the other
agreements and documents contemplated hereby to which it is a party. This
Agreement has been, and the other agreements and documents contemplated hereby
have been or at Closing will be, duly executed by Buyer, and each constitutes
the legal, valid and binding obligation of Buyer, enforceable in accordance with
their respective terms and conditions, except as enforceability may be limited
by bankruptcy, insolvency, reorganization or similar laws and judicial decisions
affecting the rights of creditors generally and by general principles of equity
(whether applied in a proceeding at law or in equity).
4.3 Compliance with Laws, Permits and Instruments. The execution,
delivery and (provided the required regulatory and shareholder approvals are
obtained) performance of this Agreement and the consummation of the transactions
contemplated hereby will not conflict with, or result, by itself or with the
giving of notice or the passage of time, in any violation of or default under,
any provision of the Articles of Association or Bylaws of Buyer or any material
mortgage, indenture, lease, agreement or other instrument or any permit,
concession, grant, franchise, license, contract, authorization, judgment, order,
decree, statute, law, ordinance, rule or regulation applicable to Buyer or its
properties. No consent, approval, order or authorization of, or registration,
declaration or filing with, any governmental authority or other third party is
required in connection with the execution and delivery of this Agreement by
Buyer or the consummation by Buyer of the transactions contemplated hereby,
except for filings required in order to obtain the required regulatory
approvals, as described in Section 7.3.
15
4.4 Litigation. No legal action, suit or proceeding or judicial,
administrative or governmental investigation is pending or, to the knowledge of
Buyer, threatened against Buyer that questions or might question the validity of
this Agreement or any actions taken or to be taken by Buyer pursuant hereto or
seeks to enjoin or otherwise restrain the transactions contemplated hereby.
4.5 Consents. Other than the approvals described in Section 7.3, no
approval, consent, authorization or action of, filing with, any governmental
body or other third party is required on the part of Buyer in connection with
(a) the execution, delivery or performance by Buyer of this Agreement and the
other agreements and documents contemplated hereby or (b) the consummation by
Buyer of the transactions contemplated hereby.
4.6 Brokerage Fees. Buyer has not paid or agreed to pay any fee or
commission to any agent, broker, finder or other person for or as a result of
services rendered as a broker or finder in connection with this Agreement or the
transactions covered and contemplated hereby. All negotiations relating to this
Agreement have been conducted by Buyer directly and without the intervention of
any person in such manner as to give rise to any valid claim against Buyer for
any brokerage commission or like payment.
4.7 Disclosure. No representation or warranty by Buyer contained in this
Agreement, and no statement made by Buyer contained in any other agreement or
document contemplated hereby, contains or will contain any untrue statement of
material fact or omits or will omit to state any material fact necessary to make
the statements herein or therein, in light of the circumstances under which it
was or will be made, not misleading.
SECTION 5.
COVENANTS OF SELLER
-------------------
5.1 Best Efforts. Seller agrees to use its best efforts to cause the
consummation of the transactions contemplated hereby in accordance with the
terms and conditions of this Agreement.
5.2 Information for Governmental Applications. Seller shall promptly, but
in no event later than 10 business days after receipt of a request by Buyer,
furnish Buyer with all information concerning Seller required for inclusion in
any application or statement to be made by Buyer to or filed by Buyer with any
governmental body in connection with the transactions contemplated by this
Agreement, or in connection with any unrelated transactions during the pendency
of this Agreement, and Seller represents and warrants that all information so
furnished for such statements and applications shall be true and correct in all
material respects and shall not omit any material fact required to be stated
therein or necessary to make the statements made, in light of the circumstances
under which they were made, not misleading. Seller shall otherwise cooperate
with Buyer in obtaining all governmental and regulatory consents, approvals,
licenses, waivers and the like required to be fulfilled or obtained for the
completion of the transactions contemplated by this Agreement.
5.3 Required Acts of Seller. Prior to the Closing, Seller shall, unless
otherwise permitted in writing by Buyer, and as such acts relate to the
Branches:
A. Operate the Branches in the ordinary course of business;
B. Use all reasonable efforts to preserve its business organization
intact and to retain its present customers, depositors, suppliers, officers
and employees;
16
C. Act in a manner that will preserve or attempt to preserve its
goodwill;
D. Perform all of its obligations under contracts, leases and
documents relating to or affecting its assets, properties and business
associated with the Branches, except such obligations as Seller may in good
faith reasonably dispute;
E. Maintain all Real Property and Personal Property in its current
operating condition and repair, ordinary wear and tear excepted;
F. Maintain in full force and effect all insurance policies now in
effect or renewals thereof and give all notices and present all claims
under all insurance policies in due and timely fashion;
G. Timely file all reports required to be filed with governmental
authorities and observe and conform to all applicable laws, rules,
regulations, ordinances, codes, orders, licenses and permits;
H. Timely file all tax returns required to be filed by it and
promptly pay all taxes, assessments, governmental charges, duties,
penalties, interest and fines that become due and payable;
I. Withhold from each payment made to each of its employees the
amount of all taxes (including, but not limited to, Federal income taxes,
FICA taxes and state and local income and wage taxes) required to be
withheld therefrom and pay the same to the proper tax receiving officers;
J. Continue to follow and implement policies, procedures and
practices regarding the identification, monitoring, classification and
treatment of all assets in substantially the same manner as it has in the
past; and
K. Cooperate with and assist Buyer in assuring the orderly
transition of the business of the Branches to Buyer from Seller, including
permission by Seller to meet regularly with Seller's Chief Lending Officer,
Xx. Xxxxx Xxxxx, and to receive reports from Xx. Xxxxx regarding any
matters related to the assets or liabilities of the Branches to be acquired
by Buyer. If the Acquisition is finally disapproved by any appropriate
regulatory authority, the Buyer's representatives will no longer be
entitled to receive such reports.
5.5 Prohibited Acts of Seller. Prior to the Closing, Seller shall
not, without the prior written consent of Buyer:
A. Introduce any new material method of management or operation of
the Branches:
B. Take any action that may result in a material adverse change in
the business of the Branches or the Assets;
C. Take or fail to take any action that would cause or permit the
representations made in Section 3 to be inaccurate at the time of the
Closing or preclude Seller from making such representations and warranties
at the time of the Closing;
17
D. Default with respect to any provision of any insurance policy now
or hereafter in effect relating to the Branches;
E. Enter into any transaction affecting any Asset or Liability other
than in the ordinary course of business;
F. Make, or incur any obligation to make, any capital expenditures
or enter into any contracts to make such expenditures with respect to the
Branches, in either case in an aggregate amount not to exceed $10,000,
provided that Seller can make any emergency repairs required to restore the
Branches to a safe operating condition;
G. Make any material modifications, including, but not limited to,
any changes in collateral, repayment terms or interest rates, to the Assets
or Liabilities as a whole;
H. Sell, transfer, mortgage, encumber or otherwise dispose of any of
the Assets except for the disposition of Assets (other than the Real
Property) in the ordinary course of business; or
I. Cause the transfer from the Branches to Seller's other operations
of any deposits of the type included in the Liabilities, provided, however,
that Seller may transfer deposits to Seller's other branches or offices
upon the unsolicited request of the depositors; or
L. Pay more than prevailing market rates on deposits.
5.6 Access; Pre-Closing Investigation. Seller shall afford the officers
and authorized representatives of Buyer full access to the properties, books and
records of Seller pertaining to the Assets and Liabilities and employees of the
Branches in order that Buyer may have full opportunity to make such reasonable
investigation as it shall desire to make of the Assets and Liabilities,
including, without limitation, access sufficient to verify the value of the
Assets and the Liabilities and the satisfaction of the conditions precedent to
Buyer's obligations described in Section 7. Seller agrees at any time, and from
time to time, to furnish to Buyer as soon as practicable, any additional
information pertaining to the Assets and Liabilities that Buyer may reasonably
request.
5.7 Additional Financial Statements. Seller shall furnish Buyer with
Financial Statements as of each month end until the Closing Date for the
Branches.
5.8 Untrue Representations. Seller shall promptly notify Buyer in writing
if Seller becomes aware of any fact or condition that makes untrue, or shows to
have been untrue, in any material respect, any schedule or any other information
furnished to Buyer or any representation or warranty made in or pursuant to this
Agreement or that results in Seller's failure to comply with any covenant,
condition or agreement contained in this Agreement.
5.9 Notice of Adverse Changes, Litigation and Claims. Seller shall
promptly notify Buyer in writing if Seller becomes aware of (i) any fact or
condition that makes untrue, or shows to have been untrue, in any material
respect, any schedule or any other information furnished to Buyer or any
representation or warranty made in or pursuant to this Agreement or that results
in Seller's failure to comply with any covenant, condition or agreement
contained in this Agreement, (ii) any litigation, or any claim, controversy or
contingent liability that might become the subject of litigation, against Seller
or affecting the Branches, if such litigation or potential litigation might, in
the event of an unfavorable
18
outcome, have a material adverse effect on the business, results of operations
or condition, financial or otherwise, of the Branches, (iii) any change that has
occurred or has been threatened (or any development has occurred or been
threatened involving a prospective change) in the business, financial condition,
operations or prospects of Seller that is or may reasonably be expected to have
a material adverse effect on the Assets or the Liabilities.
5.10 No Disclosure or Negotiation with Others. Seller shall prevent the
disclosure of any of the terms or conditions hereof to any other person except
for disclosure required by appropriate regulatory authorities, and as long as
this Agreement shall remain effective, Seller shall not, directly or indirectly,
nor shall it authorize any of its officers, directors, employees,
representatives or agents to, directly or indirectly, encourage, solicit or
initiate discussions or negotiations with, or discuss or negotiate with, or
provide any non-public information to, any corporation, partnership, person or
other entity or group (other than Buyer or an affiliate or an associate of Buyer
or an officer, partner, employee or other authorized representative of Buyer or
such affiliate or associate) concerning any merger, tender offer or other
takeover offer, sale of substantial assets, sale of shares of capital stock or
similar transaction involving the Assets or the Liabilities.
5.11 Notices to Customers. Prior to the Closing Date, Seller agrees to
mail or cause to be mailed, to each of the Depositors, each holder of a safe
deposit box domiciled at the Branches and to such other customers as may be
required by applicable law, such notice of contemplated transfer of the Assets,
the Liabilities or the operations of the Branches as may be required of Seller
as a condition of approval by any regulatory authority, or as otherwise may be
required by applicable law. Each such notice shall be in a form acceptable to
each party hereto, such approval not to be unreasonably withheld. Seller will
cooperate with Buyer in preparation and mailing of such notices.
SECTION 6.
COVENANTS OF BUYER
------------------
6.1 Best Efforts. Buyer agrees to use its best efforts to cause the
consummation of the transactions contemplated hereby in accordance with the
terms and conditions of this Agreement.
6.2 Regulatory Approvals. Buyer shall promptly, but in no event later
than 10 days after the date of this Agreement, unless delayed by Seller, file or
cause to be filed applications for all regulatory approvals required to be
obtained by Buyer in connection with the transactions contemplated hereby.
Buyer shall promptly respond to comments and requests for information received
from regulatory authorities. Buyer shall use its best efforts to obtain such
regulatory approvals at the earliest practicable time.
6.3 Notice of Adverse Changes, Litigation and Claims. Buyer shall
promptly notify Seller in writing if Buyer becomes aware of (i) any fact or
condition that makes untrue, or shows to have been untrue, in any material
respect, any schedule or any other information furnished to Buyer or any
representation or warranty made in or pursuant to this Agreement or that results
in Buyer's failure to comply with any covenant, condition or agreement contained
in this Agreement, or (ii) any litigation against Buyer if such litigation might
prevent consummation of the transactions contemplated by this Agreement.
6.4 Change of Name, Notice to Customers.
A. Prior to the Closing Date, Buyer agrees to mail or cause to be
mailed, to each of the Depositors, each holder of a safe deposit box
domiciled at the Branches and to such other
19
customers as may be required by applicable law, such notice of contemplated
transfer of the Assets, the Liabilities or the operations of the Branches
as may be required as a condition of approval by any regulatory authority,
or as otherwise may be required by applicable law. Each such notice shall
be in a form acceptable to each party hereto, such approval not to be
unreasonably withheld.
B. After the Closing Date, Buyer shall, (i) as soon as practicable,
change the name on all documents and facilities relating to the Branches
from Seller's name to Buyer's name, and all signs and other trademarks or
logos identifying Seller as the owner and operator of the Branches shall be
returned to Seller; (ii) starting promptly after the Closing Date, mail
written notice by first class mail to all customers of the Branches as of
the Closing Date, all Depositors and all borrowers with respect to the
Loans, of the consummation of the transactions contemplated by this
Agreement, the form and substance of such notice being mutually
satisfactory to Buyer and Seller; and (iii) to the extent required by law,
give the notices required to be given by it pursuant to section 6 of the
Federal Real Estate Settlement Procedures Act, as amended.
6.5 Use of Name. It is understood that Seller is not transferring to
Buyer any right, title or interest in or to, or any right of license to use,
Seller's name in connection with the Branches or otherwise. No agency
relationship exists between the parties hereto. At no time, whether before or
after Closing Date, shall Buyer transact any business in the name of Seller or
use any forms, checks or receipts with Seller's name or any trademark or service
xxxx utilized by Seller thereon or in any way hold itself out as the actual or
apparent agent of Seller.
SECTION 7.
CONDITIONS PRECEDENT TO THE OBLIGATIONS OF BUYER
------------------------------------------------
All obligations of Buyer under this Agreement are subject to the
fulfillment, prior to or at the Closing, of each of the following conditions,
any or all of which may be waived in whole or in part in writing by Buyer:
7.1 Compliance with Representations, Warranties and Agreements. The
representations and warranties made by Seller in this Agreement or in any
schedule delivered to Buyer pursuant hereto shall have been true and correct
when made and shall be true and correct as of the Closing with the same force
and effect as if such representations and warranties were made at and as of the
Closing, except with respect to those representations and warranties
specifically made as of an earlier date (in which case such representations and
warranties shall be true as of such earlier date). Seller shall have performed
or complied with all agreements, terms, covenants and conditions required by
this Agreement to be performed or complied with by Seller prior to or at the
Closing except as specifically provided to the contrary in this Agreement.
7.2 Necessary Corporate Actions. Seller shall have taken any and all
requisite corporate actions and other steps and secured any other corporate
approvals, including any requisite shareholders approval, necessary to authorize
and consummate this Agreement and the transactions contemplated hereby.
7.3 Governmental Approvals. Buyer shall have received approvals,
acquiescences or consents, all on terms and conditions acceptable to Buyer in
its sole discretion, from all necessary governmental agencies and authorities to
the transactions contemplated by this Agreement, including, but not limited to
the approval of the OCC and expiration of applicable waiting periods, for Buyer
to acquire the Assets and assume the Liabilities and to establish branches of
Buyer at each location of the Branches.
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Such approvals and the transactions contemplated hereby shall not have been
contested or threatened to be contested by any Federal or state governmental
authority or by any other third party by formal proceedings.
7.4 No Litigation. No action shall have been taken, and no statute,
rule, regulation or order shall have been promulgated, enacted, entered,
enforced or deemed applicable to the acquisition by any Federal, state or
foreign government or governmental authority or by any court, domestic or
foreign, including the entry of a preliminary or permanent injunction, that
would (a) make this Agreement or the transactions contemplated hereby illegal,
invalid or unenforceable (b) require the divestiture of a material portion of
the Assets or the Liabilities once acquired by Buyer, (c) impose material limits
in the ability of Buyer to consummate the Agreement or the transactions
contemplated hereby, (d) otherwise materially and adversely affect the Assets,
the Liabilities or the Branches or (e) if the Agreement or the transactions
contemplated hereby are consummated, subject Buyer or any officer, director or
employee of Buyer to criminal penalties or to civil liabilities. No action or
proceeding before any court or governmental authority, domestic or foreign, by
any government or governmental authority or by any other person, domestic or
foreign, shall be threatened, instituted or pending that would reasonably be
expected to result in any of the consequences referred to in clauses (a) through
(e) above.
7.5 No Material Adverse Change. Buyer shall have determined in good faith
that there has been no material adverse change in the business, properties,
operations or financial condition of any of the Branches or any of the Assets or
Liabilities in the aggregate since the date of this Agreement.
SECTION 8.
CONDITIONS PRECEDENT TO THE OBLIGATIONS OF SELLER
-------------------------------------------------
All obligations of Seller under this Agreement are subject to the
fulfillment, prior to or at the Closing, of each of the following conditions,
any or all of which may be waived in whole or in part by Seller.
8.1 Compliance with Representations, Warranties and Agreements. The
representations and warranties made by Buyer in this Agreement shall have been
true and correct when made and shall be true and correct as of the Closing with
the same force and effect as if such representations and warranties were made at
and as of the Closing, except with respect to those representations and
warranties specifically made as of an earlier date (in which case such
representations and warranties shall be true as of such earlier date). Buyer
shall have performed or complied in all material respects with all agreements,
terms, covenants and conditions required by this Agreement to be performed or
complied with by Buyer prior to or at the Closing.
8.2 Governmental and Other Approvals. Buyer shall have received
approvals, acquiescences or consents to the transactions contemplated by this
Agreement from all necessary governmental agencies and authorities for the
transactions contemplated hereby, and Seller and Buyer shall have received
satisfactory evidence that such approvals have been obtained and that any
necessary waiting periods have passed or Buyer shall have notified Seller in
writing that such approvals, acquiescences or consents are reasonably expected
to be obtained in due course.
8.3 No Litigation. No action shall have been taken, and no statute,
rule, regulation or order shall have been promulgated, enacted, entered,
enforced or deemed applicable to the acquisition by any Federal, state or
foreign government or governmental authority or by any court, domestic or
foreign, including the entry of a preliminary or permanent injunction, that
would (a) make the Agreement or the transactions contemplated hereby illegal,
invalid or unenforceable or (b) if the Agreement or the
21
transactions contemplated hereby is consummated, subject any officer, director
or employee of Seller to criminal or civil liability. No action or proceeding
before any court or governmental authority, domestic or foreign, by any
government or governmental authority or by any other person, domestic or
foreign, shall be threatened, instituted or pending that would reasonably be
expected to result in any of the consequences referred to in clauses (a) or (b)
above.
SECTION 9.
SURVIVAL OF REPRESENTATIONS, WARRANTIES, AGREEMENT AND OBLIGATIONS;
-------------------------------------------------------------------
INDEMNIFICATION.
---------------
9.1 Survival. The representations, warranties, obligations, covenants,
indemnities and agreements of Seller and Buyer contained in this Agreement shall
survive the Closing for nine months and shall continue thereafter. Such
representations, warranties, obligations, covenants, indemnities and agreements
shall not be affected by, and shall remain in full force and effect
notwithstanding, any investigation at any time made by or on behalf of any party
hereto or any information any party may have with respect thereto.
9.2 Indemnification by Seller. Seller agrees, effective as of the
Closing, to pay, and to indemnify, save, defend and hold harmless Buyer and each
of its officers, directors, shareholders and representatives (collectively,
"Insiders"), from and against, and shall reimburse Buyer and its Insiders with
respect to, any and all damages, liabilities, losses, obligations, actions,
suits, disbursements, claims, deficiencies, penalties, interest, expenses,
fines, assessments, charges and costs (including, without limitation, reasonable
attorneys' and expert witness' fees, costs of investigation and court costs) of
every kind (collectively, "Losses"), imposed on, incurred by or asserted against
Buyer or its Insiders (or any of them) in any way relating to or arising from or
out of:
A. A breach, deficiency, inaccuracy or inadequacy of or in any
statement, representation or warranty of Seller contained in this
Agreement, or any schedule, certificate or other document delivered
pursuant hereto or as part of the transactions contemplated hereby;
B. Ownership or operation of each of the Branches or their
respective businesses and properties prior to the Effective Time;
C. Liabilities of Seller that are not expressly assumed by Buyer;
D. A breach of any covenant of Seller or the failure of Seller to
perform any agreement, covenant or obligation of Seller contained in this
Agreement or in any other agreement or document executed pursuant to this
Agreement,
E. Any taxes, including interest and penalties, required to be paid
by Seller or its successor, which relate to Seller's business or assets at
or prior to the Effective Time;
F. The termination of employment by Seller prior to the Effective
Time of any individual who is an officer or employee of Seller; and
G. All refunds or repayments made by Seller following the Effective
Time of credit life or single interest insurance premiums on policies that
were issued in connection with loans made by Seller prior to the Effective
Time and purchased by Buyer.
22
Any claim for indemnification shall be applicable to each representation
independently, irrespective of whether such claim is consistent with any other
representation contained in this Agreement.
9.3 Indemnification by Buyer. Buyer hereby agrees, effective as of the
Closing, to pay, and to indemnify, save and hold harmless Seller from and
against, and shall reimburse Seller with respect to, any and all Losses imposed
on, incurred by or asserted against Seller in any way relating to or arising
from or out of:
A. A breach, deficiency, inaccuracy or inadequacy of or in any
statement, representation or warranty of Buyer contained in this Agreement,
or any schedule, certificate or other document delivered pursuant hereto or
as part of the transactions contemplated hereby;
B. Ownership or operation of each of the Branches or their
respective businesses and properties after the Effective Time;
C. Liabilities of Seller that are expressly assumed by Buyer;
D. A breach of any covenant of Buyer or the failure of Buyer to
perform any agreement, covenant or obligation of Buyer contained in this
Agreement or in any other agreement or document executed pursuant to this
Agreement,
Any claim for indemnification shall be applicable to each representation
independently, irrespective of whether such claim is consistent with any other
representation contained in this Agreement.
9.4 Limit on Indemnities. Notwithstanding any other provision hereof, the
rights of any party to be indemnified shall be subject to the following
limitations:
A. The indemnifying party shall pay claims hereunder when a claim
against the indemnified party has been established by a final judgment in
litigation or by settlement consented to in writing by Seller and Buyer;
and
B. The indemnifying party shall not be liable for any claim covered
by the indemnities under Sections 9.2 or 9.3 unless the indemnifying party
has been notified of such claim prior to the third anniversary of the
Closing Date.
SECTION 10.
OPERATIONAL AGREEMENTS
----------------------
10.1 Replacement of Customer Check Stock. Upon customer request, Buyer
shall forward to each Depositor new checks on Buyer's check stock, which checks
the Depositor may draw upon Buyer for the purpose of effecting transactions with
respect to such Deposits. The parties will use reasonable efforts to develop
procedures (i) that will cause checks drawn on Seller's form of check stock
against Deposits that are received after the Effective Time to be cleared
through Buyer's then current clearing procedures and (ii) to provide for the
orderly conversion of ATM and debit cards.
10.2 Payment of Checks, Drafts, and Orders. After the Effective Time,
Buyer agrees (i) to pay in accordance with applicable law, the Deposit
Agreements and customary banking practice all checks, drafts and withdrawal
orders properly drawn by Depositors and properly presented to Buyer by mail,
over its counters or through the check clearing system of the banking industry,
whether drawn on the checks, withdrawal or draft forms provided by Seller or by
Buyer, and (ii) in all other respects to discharge, in
23
accordance with applicable law, the Depository Agreements and customary banking
practice in the usual course of its banking business, all duties and obligations
of Seller with respect to the balances due and owing to the Depositors. If any
of the Depositors shall demand payment from Seller for all or any part of any
Deposit, Seller shall not be liable or responsible for making such payment.
10.3 Uncollected Items. If an item included in the Deposits at the
Effective Time is returned to Seller after the Effective Time as uncollected (an
"Uncollected Item") within the first six months after the Closing Date, then:
A. Within one business day after receipt, Seller will fax to Buyer a
list reflecting the amount of such Uncollected Item, the date of deposit
and depositor's account number (if available) and Seller will forward a
consolidated collection request with the original Uncollected Item (a
"Collection Advice"), to Buyer.
B. Upon receipt of a Collection Advice, Buyer may place holds on the
respective customers' Deposits in an amount not less than the amount of the
Uncollected Item and may take any actions appropriate to ensure that such
Deposits are not withdrawn in accordance with normal procedures of Buyer.
C. Within 2 business days after receipt of such Collection Advice
and original Uncollected Item, Buyer will debit the available Deposits
and/or overdraw the depositor's account (except in such cases when Seller's
negligence is the basis of a defense by the customer to Buyer's right to
debit such accounts or overdraw such account) and return the paid
collection request to Seller. Uncollected Items that overdraw an account
balance shall be held by Buyer unless requested by Seller during the
collection process. Buyer will release Uncollected Items to depositors
only upon receipt of sufficient good funds to cover any deficient balances.
D. A list reflecting name, address, phone number and number of
accounts overdrawn $1,500 or more, resulting from Uncollected Items
forwarded by Seller being charged to the customer's account, shall be sent
to Seller on the date such item is charged back.
E. Unless Buyer consents otherwise, Seller will be responsible for
collecting overdrawn balances of Uncollected Items for thirty days and
older as of the Closing Date. Buyer will cooperate with Seller with
respect to providing information or records that may be needed to pursue
resolution of amounts due to Seller. Buyer will be responsible for
reasonable collection efforts on overdrawn balances of Uncollected Items
for less than 30 days as of the Closing Date.
F. After a period of 60 days from the date an account is charged for
an Uncollected Item and becomes overdrawn, Buyer will submit a collection
request to Seller for any remaining balances that could not be collected.
The original Uncollected Items received shall be returned with the
collection letter.
10.4 Data Processing and Utilities.
A. Following the receipt of all required regulatory approvals,
Seller shall assist Buyer in the transfer of all utilities relating to the
Branches, including the existing phone number for the Branches, into the
name of Buyer.
24
B. From the date hereof through the Closing Date, Seller shall
cooperate and work with Buyer to complete the tasks required to facilitate
the conversion of the data processing operations of the Branches.
C. Within 15 days of the date of this Agreement, and as reasonably
requested by Buyer, Seller shall provide Buyer with initial computer data
on media acceptable to Buyer ("test tapes") to be used by Buyer solely to
assist in the conversion of the data processing operations of the Branches
to the data processing system of Buyer. Seller shall use best efforts to
provide any computer programming or changes in existing file layouts
related to any of the Assets or Liabilities that Buyer may reasonably
request. In addition, Seller shall deliver to Buyer final computer data on
media acceptable to Buyer ("final tapes") and deconversion reports as of
the Closing Date by not later than 10:00 a.m. local time on the day
immediately following the Closing Date. Such test tapes and final tapes
shall be in a format currently used by Seller, and Seller will reasonably
cooperate with Buyer in Buyer's conversion of such format to one which is
reasonably acceptable to Buyer. Such test tapes and final tapes shall
include master applications, specifications, file layouts, documentation of
the files transferred, and a description of the data in such files. Such
test tapes and final tapes shall contain such data that Buyer may
reasonably request, including, but not limited to, customer name, address,
account number, taxpayer identification number, deposit type, account
opening date, average collected balance, current balance, branch code,
interest method and frequency, maturity date, last rollover date, term, and
next interest payment due date. Seller warrants and represents that the
information based upon which such test tapes are created, and final tapes
shall be true and correct in all material respects as of the time given.
D. Seller agrees to reasonably cooperate in resolving any
conversion-related issues arising from the conversion of the accounts for a
period of 90 days following the date that the conversion is completed. If
Buyer requests, Seller shall reformat or data scrub the conversion tapes
and Buyer shall reimburse Seller for any costs and expenses incurred
by Seller in such reformatting or data scrubbing.
E. During the period following receipt of all necessary regulatory
approvals for the transaction until Closing Date, on a date and time
mutually agreeable to Buyer and Seller, Seller shall cooperate with and
permit Buyer, at Buyer's option and expense and at no expense to Seller, to
make provision for the installation of teller equipment in the Branches;
provided, however, that Buyer shall arrange for the installation of such
equipment at such times and in a manner that does not significantly
interfere with the normal business activities and operation of Seller or
the Branches.
10.5 Compliance with Garnishments and Similar Orders. After the Effective
Time, Buyer will comply in all material respects with any and all garnishments,
similar court orders, tax liens and order of any governmental entity in effect
with respect to the Deposits, and Buyer will not pay any Deposits in violation
of such garnishments, orders or tax liens or otherwise take any actions not
permitted pursuant thereto or pursuant to applicable law.
10.6 Direct Deposit Arrangements . Seller will use reasonable efforts to
transfer to Buyer on the Closing Date all of those automated clearing house and
Fed wire direct deposit arrangements that are tied by agreement or other
standing arrangement to the Deposits. For a period of 120 days, (the "Direct
Deposit Cut-off Date"), Seller will, no later than the next business day
following the date of receipt thereof, remit and transfer by electronic
transmission to Buyer all direct deposits intended for the Deposits. After the
Direct Deposit Cut-off Date, Seller may discontinue accepting and forwarding
automated-clearing-
25
house and Fed-wire entries and funds and return such direct deposits to the
originators marked "Account Closed".
10.7 Direct Debit Arrangements. With respect to all Deposits that have
arrangements providing for direct debit of such accounts by third parties
("Direct Debit Accounts"), for a period of 120 days after the Closing Date,
Seller will forward to Buyer all direct debits on Direct Debit Accounts on the
business day following the date of receipt thereof, and will give Buyer a daily
accounting of such debits to Buyer's clearing account. Thereafter, Seller may
discontinue forwarding such entries and return them to the originators marked
"Account Closed".
10.8 XXX Deposits. With respect to Deposits that are individual retirement
accounts created by a trust for the exclusive benefit of an individual or his or
her beneficiaries in accordance with the provisions of section 408 of the Code
("XXX Deposits"), effective as of the Closing Date, Seller will resign as
custodian and Seller will appoint Buyer as successor custodian of all such XXX
Deposits, including but not limited to, sending to the depositors thereof
appropriate notices, and filing any appropriate applications with applicable
regulatory authorities. At the Effective Time, Buyer will accept appointment as
custodian with respect to such XXX Deposits and will perform all of the duties
so transferred and comply with the terms of Seller's agreement with the
depositor of the XXX Deposits affected thereby.
10.9 Xxxxx Accounts. With respect to Deposits that are Xxxxx Accounts
created by a trust for the benefit of employees and that comply with the
provisions of section 401 of the Code ("Xxxxx Accounts"), Seller will use
reasonable efforts and cooperate with Buyer to invite depositors thereof to
direct a transfer of each such depositor's Xxxxx Account and the related Deposit
to Buyer, as custodian thereof, and to adopt Buyer's form of Xxxxx master plan
as a successor to Seller's Xxxxx master plan. Buyer will assume no Deposits
that are Xxxxx Accounts unless Buyer has received the documents necessary for
such assumption or transfer at or before the Closing. With respect to any
depositors who do not transfer such Xxxxx Accounts to Buyer's form of Xxxxx
master plan, Seller will use reasonable efforts in order to enable Buyer to
retain such Xxxxx Accounts at the Branches.
10.10 Final Statements. 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; provided, however, that Seller shall not be obligated to render
a final statement on any account not ordinarily receiving periodic statements in
the ordinary course of Seller's business. Seller will be entitled to impose
normal fees and service charges on a per-item basis, but Seller will not impose
periodic fees or blanket charges in connection with such final statements.
Seller shall provide magnetic records of final customer statements to Buyer.
10.11 XXX Deposits and Xxxxx Accounts. Seller will deliver to Buyer on
the Closing Date all of the documents in Seller's possession governing each XXX
Deposit and Xxxxx Account that is included in the Deposits. Seller will prepare
and file all reports to government authorities required to be filed for the
period ending on the Closing Date and all prior periods (except for filing IRS
Form 1099's for the calendar year in which the Closing occurs, for which filings
Buyer will be responsible pursuant to Section 10.12 A. and B.). Buyer will be
responsible for all such reporting for periods commencing on the day after the
Closing.
26
10.12 Interest Reporting and Withholding.
A. For the period from January 1 of the year in which the Closing
occurs through the Closing Date, Seller will provide all information
necessary for Buyer to report to applicable taxing authorities and owners
of Deposits, all interest credited to, withheld from and any early
withdrawal penalties imposed upon the Deposits during such period
(collectively, the "Reported Amounts"). With respect to all periods
beginning on or after January 1 of the year in which the Closing occurs,
Buyer will report all Reported Amounts to applicable taxing authorities and
owners of Deposits.
B. With respect to any Accounts for which amounts are required by
any governmental agency to be withheld (the "Withholding Accounts"), Seller
will: (i) for the period from January 1, of the year in which the Closing
occurs through the Closing Date, report all Reported Amounts incurred
during such period on the Withholding Accounts to applicable taxing
authorities and to the owners of the Withholding Accounts; and (ii)
withhold any amounts required by any governmental agencies to be withheld
from the Withholding Accounts on or before the Closing Date in accordance
with applicable law or appropriate notice from any governmental agency and
remit such amounts to the appropriate agency on or prior to the applicable
due date; and Buyer will: (i) for the period from the day after the Closing
Date to the end of the calendar year (and all periods thereafter), report
all Reported Amounts incurred during such period on the Withholding
Accounts to applicable taxing authorities and to the owners of the
Withholding Accounts; and (ii) withhold any amounts required by any
governmental agencies to be withheld from the Withholding Accounts after
the Closing Date in accordance with applicable law or appropriate notice
from any governmental agency and remit such amounts to the appropriate
agency on or prior to the applicable due date.
C. Buyer shall report to applicable authorities and the borrowers of
the Loans all interest paid on such loans for the year in which such loans
are acquired by Buyer.
10.13 Loans. In connection with the transfer of the Loans, Seller and
Buyer agree as follows:
A. The parties will cooperate and use their best efforts to cause
Buyer to become the beneficiary of credit life, accident and health,
vendor's single interest premium or similar insurance purchased by or on
behalf of such customer on the Loans. For the duration of such insurance,
Seller and Buyer agree to cooperate in good faith to develop a mutually
satisfactory method by which the issuer of such insurance will make rebate
payments to and satisfy claims of the holders of such certificates of
insurance after the Effective Time.
B. Each of Buyer and Seller will use their best efforts to comply
with all notice and reporting requirements of the loan documents or of any
law or regulation with respect to the transfer of such loans.
C. Within 30 days after the Closing Date, Buyer may, at its expense,
issue new coupon books, if applicable, or similar payment notices for
payment of the Loans with instructions to use Buyer's coupons or statements
and to destroy unused coupons furnished by Seller.
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D. For a period of 60 days after the Closing Date, within 3 business
days after receipt by Seller of any check or money order made payable to
Seller representing payment on a Loan, Seller shall issue and forward a
cashier's check made payable to Buyer or wire transfer to the benefit of
Buyer in the amount of such item, and forward the item for collection. If
the item is returned unpaid, however, Seller shall promptly notify Buyer of
such item's return and shall forward the original of such item to Buyer.
Within 3 business days after receipt of such returned item, Buyer shall
issue and forward a cashier's check or wire transfer to Seller in the
amount of such item, and Buyer shall be responsible for any further efforts
to collect such item.
E. If the balance due on any Loan has been reduced by Seller as a
result of a payment by check received prior to the Closing Date, which item
is returned after the Closing Date, the asset value representing the Loan
transferred shall be correspondingly increased and an amount in cash equal
to such increase shall be paid by Buyer to Seller promptly upon demand.
F. The parties hereby agree that Seller makes no representations or
warranties as to whether the Loans are collectible.
10.14 Other Items. Following the Effective Time, Seller agrees to
deliver immediately, but in no event later than three (3) business days after
receipt by Seller, to Buyer any collected funds accepted by Seller for credit to
any account included in the Deposits, (iii) any refunds or reimbursements of
prepaid expenses included in the acquired Assets which are accepted by Seller
and (iv) any written notices or correspondence received by Seller relating to
the Deposits or the Loans.
10.15 Safe Deposit Box and Safekeeping Business. From and after the
Closing, Buyer agrees to assume and discharge, in the usual course of the
banking business, the duties and obligations of Seller with respect to all safe
deposit boxes located in the Branches, and to maintain all necessary facilities
for the use of such boxes by the renters thereof during the period for which
such persons have paid rent therefor in advance to Seller, subject to the
provisions of the rental agreements between Seller and the respective renters of
such boxes. From and after the Closing, Buyer shall assume, honor, and
discharge the duties and obligations of Seller with respect to all safekeeping
items obtained from Seller and shall be entitled to any right or benefit
heretofore accrued or hereafter accruing therefrom. At the Closing, Seller
shall provide Buyer with a true and correct list of all safe deposit rental
agreements and contracts with respect to the Branches in effect as of the
Closing Date, together with the rentals or other amounts paid on such agreements
and contracts and the expiration dates of such contracts.
10.16 Noncompetition Agreement. For and in consideration of the purchase
by Buyer of the Assets and the assumption of the Liabilities, the payment of the
Purchase Premium and the other agreements and covenants contained in this
Agreement, Seller agrees as follows:
A. From the date hereof and for a period of three years following
the Closing Date, Seller and the officers, directors and employees of
Seller (for so long as they are employed by Seller) will not (i) establish,
own or operate a branch or other office within Xxxxx County, Texas, (ii)
other than banking services offered to the public generally via the
Internet, and insurance premium finance marketing efforts in place with
insurance agencies, solicit the banking business of any current customers
of the Branches whose banking business or any part thereof is transferred
to Buyer pursuant to the terms of this Agreement, or (iii) recruit, hire,
assist others in recruiting or hiring, discuss employment with, or refer to
others concerning employment, any person who is, or within the preceding 12
months was, a Designated Employee or an employee of Buyer.
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B. If any court of competent jurisdiction should determine that any
term or terms of this covenant are too broad in terms of time, geographic
area, lines of commerce or otherwise, such court shall modify and revise
any such term or terms so that they comply with applicable law. Seller
hereby acknowledges and agrees that Buyer will be irreparably damaged if
the provisions of this Section 10.16 are not specifically enforced.
Accordingly, Buyer shall be entitled to an injunction restraining any
violation of this Section 10.16 by Seller (without any bond or other
security being required), or any other appropriate decree of specific
performance. Such remedies shall not be exclusive and shall be in addition
to any other remedy that Buyer may have at law or in equity.
10.17 Books and Records. Buyer shall allow Seller and its authorized
agents and representatives to inspect any of the Records for any proper purpose
during regular business hours after the Closing Date upon reasonable notice to
Buyer (which notice shall specify the purpose of such inspection), and Seller
may, at its own expense, make such copies of and excerpts from such books and
records as it may deem desirable; provided, however, that all information,
including copies of books and records, obtained by Seller from Buyer pursuant to
this Section 10.17 shall be and remain confidential information known to Seller
or otherwise contained in Seller's books and records. Buyer shall maintain all
material books and records relating to the Assets, the Liabilities and the
business of the Branches for a period that is not less than the greater of (i)
the period required by applicable law, rule or regulation or (ii) three (3)
years from the Closing Date.
10.18 Taxes. Buyer shall be responsible for the payment of all taxes
arising as a result of the purchase of the Assets; except that Buyer shall not
be responsible for, or have any liability with respect to, taxes on any income
to Seller arising out of this transaction. Seller shall cooperate with Buyer in
Buyer's efforts to minimize all taxes payable by Buyer, if any, as a result of
the transactions contemplated by this Agreement.
10.19 Clearing Items. During the 120-day period following the Closing
Date, if it is not possible to clear checks and other items drawn on a Deposit
account through Buyer's then current clearing procedures, Seller will make
provisional settlement to the presenting institution and will forward such
checks and other items on such Deposit to Buyer, no later than the next business
day after receipt thereof, and Buyer will reimburse Seller for such provisional
settlement. Upon the expiration of such 120-day period, Seller shall cease
forwarding checks and other debits against the Deposit accounts and return them
to the originators marked "Account Closed". Upon timely presentation to Buyer,
Buyer will assume all responsibility for such items (except for such items that
have not been handled by Seller in accordance with applicable law or regulation,
or with ordinary care), including but not limited to determining whether to
honor or dishonor such items and giving any required notification for the return
of items.
SECTION 11.
TERMINATION AND ABANDONMENT
---------------------------
11.1 Right of Termination. This Agreement and the transactions
contemplated hereby may be terminated and abandoned at any time prior to or at
the Closing as follows, and in no other manner:
A. By the mutual consent of Seller and Buyer;
B. By either Buyer or Seller, if the Closing has not occurred by
September 30, 1999, or such other date as Seller and Buyer shall agree in
writing, unless the failure to so consummate by such time is due to a
breach of this Agreement by the party seeking to terminate;
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C. By Buyer if Buyer reasonably determines that regulatory approval
as set forth in Section 7.3 cannot be reasonably and economically obtained
on terms and conditions satisfactory to Buyer in its sole discretion.
D. By Seller or Buyer in the event regulatory approval is denied.
E. By Buyer if there shall be any actual or threatened litigation to
restrain or invalidate the sale of the Assets to, or the assumption of the
Liabilities by, Buyer that, in the good faith judgment of Buyer makes it
inadvisable to proceed with such transaction;
F. By Buyer if there shall have been any material adverse change in
the condition, business, operations, affairs, prospects, properties or
assets of Seller that are the subject of this Agreement;
G. By Buyer if any material representation or warranty made herein
by Seller is untrue in any material respect, or Seller shall have defaulted
in any material respect in the performance of any material obligation under
this Agreement;
H. By Buyer pursuant to the termination provisions provided in
Section 2.3, Section 2.5 or Section 2.6.
I. By Seller if any material representation or warranty made herein
by Buyer is untrue in any material respect, or Buyer shall have defaulted
in any material respect in the performance of any material obligation under
this Agreement, including any default under Section 6.2.
11.2 Notice of Termination. The power of termination provided for by
Section 11.1 may be exercised only by a notice given in writing, as provided in
Section 12.4.
11.3 Effect of Termination. Without limiting any other relief to which
either party hereto may be entitled, in the event of the termination and
abandonment of this Agreement pursuant to the provisions of Section 11.1, no
party to this Agreement shall have any further liability or obligation in
respect of this Agreement, except for (a) liability of a party for expenses
pursuant to Section 12.11, and (b) the provisions of Section 12.15 shall remain
applicable.
SECTION 12.
MISCELLANEOUS
-------------
12.1 Entire Agreement. This Agreement and the other agreements, documents
and instruments executed and delivered by the parties to each other at the
Closing constitute the full understanding of the parties, a complete allocation
of risks between them and a complete and exclusive statement of the terms and
conditions of their agreement relating to the subject matter hereof and
supersede any and all prior agreements, whether written or oral, that may exist
between the parties with respect thereto.
12.2 Multiple Counterparts. For the convenience of the parties hereto,
this Agreement may be executed in multiple counterparts, each of which shall be
deemed an original, and all counterparts hereof so executed by the parties
hereto, whether or not such counterpart shall bear the execution of each of the
parties hereto, shall be deemed to be, and shall be construed as, one and the
same Agreement. a telecopy or facsimile transmission of a signed counterpart of
this Agreement shall be sufficient to bind the party or parties whose
signature(s) appear thereon.
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12.3 Amendment. This Agreement may be amended, modified or supplemented
only by a written instrument signed by each party hereto.
12.4 Notices. Any and all notices and other communications required or
permitted to be given under this Agreement by any party hereto to the other
party may be delivered personally or by overnight courier service or sent by
mail, telex or facsimile transmission, at the respective addresses or
transmission numbers set forth below and shall be effective upon the earlier of
actual receipt or (a) in the case of mail, upon the earlier of actual receipt or
3 business days after deposit in the United States Postal Service, first class
certified or registered mail, postage prepaid, return receipt requested; and (b)
in the case of overnight courier service, one business day after delivery to
such courier service. The parties may change their respective addresses and
transmission numbers by written notice to all other parties, sent as provided in
this Section 12.4. All communications must be in writing and addressed as
follows:
If to Seller: Surety Bank, N.A.
0000 Xxxxxxxx Xxxx Xx., Xxxxx 000
Xxxxx, Xxxxx 00000
Attn: C. Xxxx Xxxx
Chairman
Telecopy: (000) 000-0000
With a Copy to: Ms. Xxxxxxxx Xxxxxxx
Xxxxx & Xxxxxxx, L.L.P.
000 Xxxx Xxxxxxx Xxxxxx, #000
Xxxx Xxxxx, Xxxxx 00000-0000
Telecopy: (000) 000-0000
If to Buyer: The Citizens National Bank in Waxahachie
000 X. Xxx Xx., P.O. Box 717
Waxahachie, Texas
Attn: Xxxx Xxxxxxxxx
President
Telecopy: (000) 000-0000
With a Copy to: Xxxxxxx X. Xxxxx, Esq.
Jenkens & Xxxxxxxxx,
a Professional Corporation
0000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Telecopy: (000) 000-0000
12.5 Binding Effect. All of the terms, covenants, representations,
warranties and conditions of this Agreement shall be binding upon, and inure to
the benefit of and be enforceable by, the parties hereto and their respective
successors, representatives and permitted assigns. Nothing expressed or referred
to herein is intended or shall be construed to give any person other than the
parties hereto any legal or equitable right, remedy or claim under or in respect
of this Agreement, or any provision herein contained, it being the intention of
the parties hereto that this Agreement, the assumption of obligations and
statements of responsibilities hereunder, and all other conditions and
provisions hereof are for the sole benefit of the parties to this Agreement and
for the benefit of no other person. Nothing in this Agreement shall act to
relieve or discharge the obligation or liability of any third party to any party
to this Agreement,
31
nor shall any provision give any third party any right of subrogation or action
over or against any party to this Agreement.
12.6 Governing Law. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH
AND GOVERNED BY THE LAWS OF THE STATE OF TEXAS. VENUE FOR ANY CAUSE OF ACTION
ARISING FROM THIS AGREEMENT SHALL LIE IN XXXXX COUNTY, TEXAS.
12.7 Attorneys' Fees and Costs. In the event attorneys' fees or other
costs are incurred to secure performance of any of the obligations herein
provided for, or to establish damages for the breach thereof, or to obtain any
other appropriate relief, whether by way of prosecution or defense, the
prevailing party shall be entitled to recover reasonable attorneys' fees and
costs incurred therein.
12.8 Severability. In the event that any provision of this Agreement is
held to be illegal, invalid or unenforceable under present or future laws, then
(a) such provision shall be fully severable and this Agreement shall be
construed and enforced as if such illegal, invalid or unenforceable provision
were not a part hereof; (b) the remaining provisions of this Agreement shall
remain in full force and effect and shall not be affected by such illegal,
invalid or unenforceable provision or by its severance from this Agreement; and
(c) there shall be added automatically as a part of this Agreement a provision
as similar in terms to such illegal, invalid or unenforceable provision as may
be possible and still be legal, valid and enforceable.
12.9 Assignability. No party to this Agreement shall assign this
Agreement, by operation of law or otherwise, in whole or in part, without the
prior written consent of the other parties. Any assignment made or attempted in
violation of this Section 12.9 shall be void and of no effect.
12.10 Rules of Construction. All sections referred to herein are sections
of this Agreement and all exhibits and schedules referred to herein are exhibits
and schedules, respectively, attached to this Agreement. Descriptive headings as
to the contents of particular sections are for convenience only and shall not
control or affect the meaning, construction or interpretation of any provision
of this Agreement. The exhibits and schedules to this Agreement (and any
appendices thereto) referred to in this Agreement and attached hereto are and
shall be incorporated herein and made a part hereof for all purposes as though
set forth herein verbatim. Each use herein of the masculine, neuter or feminine
gender shall be deemed to include the other genders. Each use herein of the
plural shall include the singular and vice versa, in each case as the context
requires or as it is otherwise appropriate. The word "or" is used in the
inclusive sense.
12.11 Expenses. Seller shall pay all of its expenses and costs (including,
without limitation, all attorneys' fees and expenses and application fees), and
Buyer shall pay all of its expenses and costs (including, without limitation,
all attorneys' fees and expenses and application fees), in connection with this
Agreement and the consummation of the transactions contemplated hereby.
12.12 Waiver. Any of the terms or conditions of this Agreement may be
waived at any time by the party that is entitled to the benefit thereof. Such
action shall be evidenced by a signed written notice given in the manner
provided in Section 12.4. No party to this Agreement shall by any act (except by
a written instrument given pursuant to Section 12.4) be deemed to have waived
any right or remedy hereunder or to have acquiesced in any breach of any of the
terms and conditions hereof. No failure to exercise, nor any delay in exercising
any right, power or privilege hereunder by any party hereto shall operate as a
waiver thereof. No single or partial exercise of any right, power or privilege
hereunder shall preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. A waiver of any party of any right or
remedy on any one occasion shall not be construed as a bar to any right
32
or remedy that such party would otherwise have on any future occasion or to any
right or remedy that any other party may have hereunder.
12.13 Specific Performance. Each of the parties hereto acknowledges that
the other parties would be irreparably damaged and would not have an adequate
remedy at law for money damages in the event that any of the covenants contained
in this Agreement were not performed in accordance with its terms or otherwise
were materially breached. Each of the parties hereto therefore agrees that,
without the necessity of proving actual damages or posting bond or other
security, the other party shall be entitled to temporary and/or permanent
injunction or injunctions to prevent breaches of such performance and to
specific enforcement of such covenants in addition to any other remedy to which
they may be entitled, at law or in equity.
12.14 Public Disclosure. Seller and Buyer will consult with each other
regarding the content of any press release or other public disclosure concerning
this transaction and obtain the prior written approval of the other party
hereto; provided, however, that notwithstanding anything else contained in this
Section 12.14, Seller and Buyer shall be permitted to make any public disclosure
or governmental filings as its counsel may deem necessary to maintain compliance
with or to prevent violations of applicable Federal or state laws or
regulations.
12.15 Confidential Information. Except as may be required by applicable
securities laws or as may be necessary to obtain the regulatory approvals as
described in Section 7.3, Seller and Buyer will treat as confidential any
information related to the transactions described herein obtained from any other
party. Seller and Buyer will use such information, and not disclose it to
others, except their employees, advisors, directors and agents, expressly for
the purposes of evaluating the potential of consummating the transactions
proposed herein. The term "information" does not include any information that
(a) at the time of disclosure or thereafter is generally available to and known
by the public, (b) was available on a nonconfidential basis from a source other
than Seller or Buyer or (c) was independently acquired or developed without
violating any laws or obligations under this Agreement.
12.16 Arbitration. Buyer and Seller shall agree, by amendment to this
Agreement, on provisions whereby any controversy or claim between Buyer and
Seller arising out of or relating to this Agreement or any agreements or
instruments relating hereto or delivered in connection herewith, including, but
not limited to, a claim based on or arising from an alleged tort, will, at the
request of any party, shall be determined by arbitration.
12.17 Seller's Knowledge. '"Seller's Knowledge" or other similar phrases
means information that is known to any Executive Officer or Loan Review Officer
of the Seller, or to the Branch Manager or Branch President of the applicable
Branch, without (except for Section 3.12) independent investigation.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers and their corporate seals to be
hereunto affixed as of the date first above written.
Buyer:
THE CITIZENS NATIONAL BANK IN WAXAHACHIE
[S E A L]
By: /s/ Xxxx Xxxxxxxxx
------------------------------------------------
Xxxx Xxxxxxxxx, President
33
ATTEST:
/s/ Xxxxxxx X. Xxxxxxxxx
------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: Vice President
Seller:
SURETY BANK, N.A.
[S E A L]
By: /s/ C/ Xxxx Xxxx
------------------------------------------------
C. Xxxx Xxxx, Chairman
ATTEST:
/s/ X. X. Xxxxxx
------------------------------
Name: X. X. Xxxxxx
Title: Secretary
34
