EXHIBIT 2.1
Purchase and Assumption Agreement dated March 31,
2000 by and between Mid State Bank and Carolina First Bank.
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PURCHASE AND ASSUMPTION AGREEMENT
BY AND BETWEEN
CAROLINA FIRST BANK
AND
MID STATE BANK
March 31, 2000
THIS AGREEMENT IS SUBJECT TO BINDING ARBITRATION.
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This PURCHASE AND ASSUMPTION AGREEMENT (this "Agreement") dated as of
March 31, 2000, by and between Carolina First Bank, a South Carolina banking
corporation headquartered in Greenville, South Carolina ("Seller") and Mid State
Bank, a South Carolina banking corporation headquartered in Newberry, South
Carolina ("Purchaser"):
Preamble
WHEREAS Purchaser and Seller operate banking operations;
WHEREAS Seller wishes, upon the terms and conditions set forth herein,
to sell certain assets and to transfer certain deposit and other liabilities
associated with its operations to Purchaser;
WHEREAS Purchaser wishes to buy such assets and assume such liabilities
upon the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the premises and agreements set
forth herein, and other good and valuable consideration, the receipt of which is
hereby acknowledged, the parties agree as follows:
Article 1
Definitions
Section 1.1 Definitions. As used in this Agreement, the following terms
have the definitions indicated.
"Accrued Interest Payable" means interest on Deposits which is accrued
but has neither been posted to a deposit account nor paid as of the Closing
Date.
"Accrued Interest Receivable" means interest on loans which is accrued
but unpaid as of the Closing Date.
"Adjustment Payment Date" shall have the meaning set forth in Section
4.3.
"Agreement" shall mean this Agreement, including all schedules and
exhibits attached hereto.
"Assets" shall have the meaning set forth in Section 2.1.
"Assumed Liabilities" shall have the meaning set forth in Section 2.3.
"Branch" or "Branch Office" means Seller's branch office located at 000
Xxxx Xxxxxx in Prosperity, South Carolina.
"Branch Deposit" means a Deposit, including Accrued Interest Payable
thereon, which has been opened at or assigned to the Branch Office, other than
Excluded Deposits.
"Branch Loan" means (i) any loan fully secured by any Branch Deposit,
and (ii) any checking line of credit or overdraft checking balance linked to any
Branch Deposit (but not any loan that is not covered by clauses (i) or (ii) of
this definition), in all cases, together with any Accrued Interest Receivable
thereon, the related Servicing Rights and all such loan documentation as may be
possessed by Seller with respect to such Branch Loans.
"Branch Premises" means the Real Property, and the improvements on the
Real Property.
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"Branch Property" means all furniture, fixtures and equipment, and
other tangible personal property owned by Seller and located in the Branch
Office (except for Excluded Assets), including, without limitation, the Branch
Property described in Schedule 2.1(b) hereto.
"Brokered Deposit" means a deposit, obtained, directly or indirectly,
by or through any deposit broker as defined in Section 29(f) of the Federal
Deposit Insurance Act, 12 U.S.C. '1831(f) and the corresponding federal
regulations, without regard to whether or not the depository institution in
which such funds are deposited is not well capitalized for purposes of that
section.
"Business Day" means any Monday, Tuesday, Wednesday, Thursday, or
Friday that is not a Federal or State holiday generally recognized by banks in
the State of South Carolina.
"Cash Items" means all cash items, suspense items and items in process
of collection, that are related to the Branch Deposits and Branch Loans and (i)
which, on the Closing Date, have not been outstanding and uncollected for a
period in excess of 30 days, or (ii) which otherwise are acceptable to
Purchaser.
"Closing" and "Closing Date" shall have the meanings assigned to them
in Section 4.1 of the Agreement.
"Closing Payment" shall have the meaning set forth in Section 3.2.
"Demand Deposits" means individual, partnership, corporate and any
other negotiable deposits, including, without limitation, NOW accounts.
"Deposit" shall have the meaning set forth in Section 3(1) of the
Federal Deposit Insurance Act, 12 U.S.C. '1813(l), including, without
limitation, individual retirement accounts ("XXX") and cash management accounts.
"Depository Institution" means any bank or savings association as those
terms are defined in Section 3(c) of the Federal Deposit Insurance Act, 12
U.S.C. '1813(c), and any credit union.
"Effective Time" means the 12:01 a.m. on the Closing Date.
"Employees" means the employees assigned to the Branch Office from the
date of the Agreement through Closing.
"Equipment Leases" shall have the meaning set forth in Section 2.1(g).
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Excluded Assets" shall have the meaning set forth in Section 2.2.
"Excluded Deposits" means (i) Brokered Deposits, (ii) deposits which
are the subject of attachment, garnishment or other legal process, (iii) such
other Deposits as are described on Schedule 2.4(a) hereto, and (iv) related
Accrued Interest Payable on such Excluded Deposits.
"FDIC" means the Federal Deposit Insurance Corporation.
"Federal Funds Rate" shall be the weighted daily mean of the high and
low rates quoted for Federal Funds in the Money Rates Column of The Wall Street
Journal, or if not reported for such day, the average of such quotations for the
last previous day for which such quotations were reported, for the period
between the Closing Date and the Adjustment Payment Date.
"Final Closing Statement" shall have the meaning set forth in Section
4.3.
"GAAP" means generally accepted accounting principles, applied on a
consistent basis.
"Jumbo Deposit" means a certificate of deposit with a balance of one
hundred thousand dollars ($100,000) or more.
"Net Book Value" means the value of an asset on the books of Seller as
of the Closing Date determined in accordance with GAAP, but without regard to
any general allowance for credit losses.
"Obligors" shall have the meaning set forth in Section 6.10(b).
"Post-Closing Delivery Date" shall have the meaning set forth in
Section 4.3.
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"Purchase Value" means the value determined pursuant to Section 3.1.
"Preliminary Closing Statement" shall have the meaning set forth in
Section 4.2.
"Purchase Price" shall have the meaning set forth in Section 3.1.
"Real Property" means the real property and all rights appurtenant
thereto on which the Branch is located.
"Safe Deposit Leases" means all safe deposit contracts and leases
listed on Schedule 2.1(f) for the safe deposit boxes located at the Branch
Office (as such Schedule may be amended by Seller as of the Effective Time),
together with Seller's keys to, and Seller's records related to, such contracts
and leases.
"Servicing Rights" means the rights to service loans including, without
limitation, any rights to receive compensation with respect to such servicing.
Article 2
Transfer of Assets and Liabilities
Section 2.1 Sale of Assets. Subject to the terms and conditions set
forth herein, on the Closing Date, Purchaser shall purchase from Seller and
Seller shall sell, assign, convey and transfer to Purchaser all of its right,
title and interest in the following assets associated with Seller and not
otherwise excluded from transfer pursuant to the provisions of Section 2.2 below
(collectively, the "Assets"):
(a) [reserved]
(b) the Branch Property and the Branch Premises;
(c) all currency and coins on hand at the close of business on the
Closing Date;
(d) the Cash Items;
(e) the Branch Loans;
(f) the Safe Deposit Leases; and
(g) all equipment leases listed on Schedule 2.1(g) for equipment
or other Branch Property located at the Branch Office (the
"Equipment Leases").
Section 2.2 Assets Excluded from Sale. The following assets, among
others, (collectively, the "Excluded Assets") shall not be transferred pursuant
hereto:
(a) all Seller's loans or other extensions of credit other than
the Branch Loans;
(b) all Seller signs;
(c) any intellectual property of Seller, including, without
limitation, all rights in the name "Carolina First Bank",
"Carolina First Corporation" or any combination or derivation
thereof, corporate logos, trademarks, trade names, service
marks and service names, and any other similar intellectual
property, together with any paper stock, forms and other
supplies containing such names or intellectual property; and
(d) any other assets which Purchaser deems unnecessary or
incompatible with Purchaser's operation (e.g., teller
equipment, computer equipment, computer software, and
automated teller machines), which is identified in reasonable
detail on Schedule 2.2(d) and any other assets listed on
Schedule 2.2(d) (as such Schedule may be amended by mutual
agreement as of the Effective Time).
Seller shall coordinate with Purchaser to remove the Excluded Assets from the
Branch Office on or prior to the Effective Time. Seller shall remove the
Excluded Assets at its own cost and shall repair any damage caused by such
removal.
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Section 2.3 Assumption of Liabilities. Subject to the terms and
conditions set forth herein, on the Closing Date, Seller shall assign and
transfer to Purchaser, and Purchaser shall assume from Seller the following
liabilities (collectively, the "Assumed Liabilities"):
(a) the Branch Deposits and all obligations of Seller to provide
services incidental to the Branch Deposits; provided, however,
that Purchaser shall assume such obligations which are not
customarily undertaken by depository institutions in the State
of South Carolina in connection with Deposits only to the
extent such obligations are disclosed by Seller on Schedule
2.3(a) hereto (and agreed to by Purchaser) and provided,
further that Purchaser shall not assume such obligations to
the extent that such assumption is prohibited by applicable
law or by regulatory authorities;
(b) the Equipment Leases;
(c) any other liabilities set forth on Schedule 2.3(c).
Section 2.4 Liabilities Not Assumed. Except for the liabilities
specifically set forth in Section 2.3 of this Agreement or otherwise expressly
assumed herein, Purchaser is not assuming any other liabilities or obligations
of Seller, whether or not the same is in any way involved, either directly or
indirectly, with the operation by Seller of its business or to which Seller may
have become a party or liable by reason of its business. Liabilities not assumed
include, but are not limited to, the following:
(a) Excluded Deposits;
(b) Seller's cashier checks, money orders, interest checks and
expense checks issued prior to Closing, consignments of U.S.
Government E and XX xxxxx and any and all traveler's checks;
(c) liabilities or obligations with respect to any litigation,
suits, claims, demands or governmental proceedings arising,
commenced or made known to Seller prior to Closing;
(d) liabilities of Seller for or under any data processing
contracts;
(e) liabilities related to the safe deposit boxes at the Branch
Office of which Seller has actual knowledge at the Closing
Date or that can reasonably be determined to have arisen prior
to the Effective Time; and
(f) all other liabilities or obligations related to or arising
from Seller's operation of the Branch Office or Seller's
business prior to the Effective Time (except the Assumed
Liabilities).
Section 2.5 Procedures regarding Deposits Assumed. Purchaser and Seller
agree to the following with respect to the Deposits assumed:
(a) If, after the Closing Date, any such depositor, instead of
accepting the obligation of Purchaser to pay Deposit
liabilities assumed, shall demand payment from Seller for all
or any part of any such assumed Deposit Liabilities, Seller
shall not be liable or responsible for making such payment;
provided, that if Seller pays the same in accordance with
sound banking practices, Purchaser agrees to reimburse Seller
for any such payments to the extent that such depositor has
funds on deposit with Purchaser. Seller and Purchaser shall
make appropriate arrangements to provide for the daily
settlement with immediately available funds by Purchaser of
checks, drafts, withdrawal orders, returns and other items
presented to and paid by Seller within 120 days after the
Closing Date and drawn on or chargeable to accounts that have
been assumed by Purchaser. In order to reduce the continuing
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charges to Seller through the check clearing system of the
banking industry that will result from check, draft or
withdrawal order forms of Seller being used after the Closing
Date by the depositors whose accounts are assumed, Purchaser
agrees, at its cost and expense, and without charge to such
depositors, to notify such depositors, on or before the
Closing Date, in a form and on a date mutually acceptable to
Seller and Purchaser, of Purchaser's assumption of Deposit
liabilities and to furnish each depositor of an assumed Demand
Deposit account with checks on the forms of Purchaser and with
instructions to utilize Purchaser's checks and to destroy
unused check, draft and withdrawal order forms of Seller. In
addition, subsequent to regulatory approval, Seller will
notify the affected customers by letter of the pending
assignment of Seller's deposit accounts to Purchaser, which
notice shall be in a form mutually agreeable to Seller and
Purchaser.
(b) Purchaser agrees to pay promptly to Seller an amount
equivalent to the amount of any checks, drafts or withdrawal
orders credited to an assumed account as of the Closing Date
that are returned to Seller after the Closing Date.
(c) Seller agrees to provide to Purchaser after the Closing Date
such information as Purchaser may reasonably request to enable
it to conduct a core deposit intangibles analysis of the
Deposit liabilities.
(d) Seller will render a final statement to each depositor of an
account assumed under this Agreement as to transactions
occurring through the Effective Time and will comply with all
laws, rules and regulations regarding tax reporting of
transactions of such accounts through the Effective Time.
Seller will be entitled to impose normal (bank-wide) fees,
including but not limited to, normal quarter-end charges on
savings accounts, or if the Closing does not occur at the end
of a quarter, a prorata portion of the normal quarter-end
charges on savings accounts, and service charges on a per-item
basis, but Seller will not impose periodic fees or blanket
charges in connection with such final statements.
(e) As of the Effective Time, Purchaser, at its expense, will
notify all Automated Clearing House ("ACH") originators of the
transfers and assumptions made pursuant to the Agreement. For
a period of 120 days beginning on the Effective Time, Seller
will honor all ACH items related to accounts assumed under
this Agreement which are mistakenly routed or presented to
Seller. Seller will make no charge to Purchaser for honoring
such items. Items mistakenly routed or presented after the
120-day period should be returned to the presenting party.
(f) After the Closing Date, Purchaser agrees to use its best
efforts to collect from Purchaser's customers amounts equal to
any Visa or MasterCard charge backs under the MasterCard and
Visa Merchant Agreements between Seller and its customers or
amounts equal to any deposit items returned to Seller after
the Closing Date by its Federal Reserve Bank which were
honored by Seller prior to the Closing Date and remit such
amounts so collected to Seller. Purchaser agrees to
immediately freeze and remit to Seller any funds up to the
amount of the charged back or returned item that had been
previously credited by Seller if such funds are available at
the time of notification by Seller to Purchaser of the charged
back or returned item. Notwithstanding the foregoing,
Purchaser shall have no duty to remit funds for any item or
charge that has been improperly returned or charged to Seller.
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Section 2.6 Interest Adjustment. Purchaser and Seller agree to make
such adjustment to interest paid on the Branch Deposits as may be necessary to
reconcile the differences in their respective methods of calculation of interest
to insure that depositors are paid the full amount of interest due to them.
Section 2.7 Safe Deposit Business. On and after the Effective Time,
Purchaser will assume and discharge Seller's obligations with respect to the
safe deposit box business at the Branch Office in accordance with the terms and
conditions of contracts or rental agreements related to such business which are
assigned to Purchaser, and Purchaser will maintain all facilities necessary for
the use of such safe deposit boxes by persons entitled to use them. On and after
the Effective Time, Purchaser shall maintain and safeguard the records related
to such safe deposit box business transferred hereunder, and Purchaser shall be
responsible for granting access to and protecting the contents of safe deposit
boxes at the Branch Office. Safe deposit box rental payment (not including late
payment fees) applicable for periods both prior to and after the Effective Time
and collected by Seller on or before the Effective Time shall be prorated as of
the Effective Time.
Section 2.8 Branch Loans Transferred. (a) In connection with the
transfer of any loans requiring notice to the borrower, Seller agrees to comply
with all notice and reporting requirements of the loan documents or of any law
or regulation.
(b) All Branch Loans or other indebtedness transferred under this
Agreement will be transferred without recourse and without any warranties or
representations as to their collectibility or the creditworthiness of any of the
Obligors of such Branch Loans.
(c) On and after the Closing Date, Purchaser will be responsible for
maintaining and safeguarding all Branch Loan files, documents and records (which
have been transferred to Purchaser by Seller) in accordance with applicable law
and sound banking practices.
Article 3
Purchase Price
Section 3.1 Purchase Price. As consideration for the purchase of the
Assets and the assumption of liabilities hereunder, Purchaser shall pay to
Seller, in the form and subject to the conditions set forth below, an aggregate
purchase price calculated as follows (the "Purchase Price"):
(a) One Hundred Percent (100%) of the Net Book Value of the Branch
Property and Branch Premises as shown on the most recent
financial statements of Seller immediately prior to the
Closing Date; plus
(b) One Hundred Percent (100%) of the face value of all currency
and coins on hand at the Branch Office on the Closing Date;
plus
(c) One Hundred Percent (100%) of the face value of all Cash
Items; plus
(d) One Hundred Percent (100%) of the Net Book Value of the Branch
Loans; minus
(e) Ninetyseven Percent (97.0%) of the total amount of the Branch
Deposits on deposit in Seller on the Closing Date excluding
Jumbo Deposits; minus
(f) One hundred Percent (100.00%) of the total amount of the
Branch Deposits which are Jumbo Deposits.
It is expressly understood that such Purchase Price is determined for
purposes of calculating amounts due from the Purchaser to the Seller or from the
Seller to the Purchaser and,
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except as may otherwise be stated explicitly by the parties, does not represent
any agreement between the parties as to the determination of values of Assets
for accounting or tax purposes.
Section 3.2 Payment of the Purchase Price. If the results of the above
calculations are positive, that amount shall be paid by Purchaser to Seller, but
if the results of the above calculation are negative, that amount shall be paid
by Seller to Purchaser (in either case, the "Closing Payment"). The components
of the Purchase Price shall be set forth on the Preliminary Closing Statement.
All sums shall be paid in cash at Closing, by way of wire transfer of funds.
Amounts paid at Closing shall be subject to subsequent adjustment based on the
Final Closing Statement.
Article 4
The Closing
Section 4.1 The Closing. The closing of the transactions contemplated
here (the "Closing") shall take place on a date (the "Closing Date") as soon as
reasonably practicable after receipt of all regulatory approvals and consents
required in connection herewith and the expiration of all waiting periods
required by law or regulation in connection with such approvals and consents, at
the offices of Wyche, Burgess, Xxxxxxx & Xxxxxx, P.A. or at such other place and
time as the parties hereto may mutually agree; provided, however, that in the
event that Closing has not occurred by September 30, 2000, either party hereto
shall have the right to terminate this Agreement.
Section 4.2 Preliminary Closing Statement. Seller shall prepare a
closing statement (the "Preliminary Closing Statement") in accordance with GAAP
as of a date not earlier than 45 days prior to the Closing Date reflecting the
calculation of the Purchase Price, including the assets to be sold and assigned
hereunder and the liabilities to be transferred and assumed hereunder; provided,
however, that the Preliminary Closing Statement shall reflect actual balances as
of a date not more than 7 days prior to the Closing Date for coins and currency
and deposits.
Section 4.3 Post-Closing Adjustments. (a) Not later than 10 calendar
days after the Closing Date (the "Post-Closing Delivery Date"), Seller shall
deliver to Purchaser a final closing statement dated as of the Closing Date and
prepared in accordance with GAAP reflecting the Assets sold and assigned and the
liabilities transferred and assumed hereunder as of the Closing Date (the "Final
Closing Statement"). Seller shall afford Purchaser and its accountants and
attorneys the opportunity to review all work papers and documentation used by
Seller in preparing the Final Closing Statement. Within 10 calendar days
following the Post-Closing Delivery Date (the actual date being "Adjustment
Payment Date"), Seller and Purchaser shall effect the transfer of any funds as
may be necessary to reflect changes in such assets and liabilities between the
Preliminary Closing Statement and the Final Closing Statement together with
interest thereon computed from the Closing Date to the Adjustment Payment Date
at the applicable Federal Funds Rate. Adjustments shall be made for all items
which would adjust the amount of assets transferred and liabilities assumed,
including but not limited to, not-sufficient-funds checks, mis-postings and
accounting errors. Without limiting the foregoing, if the balance due on any
Branch Loan purchased has been reduced by Seller as a result of a payment by
check received prior to the Effective Time, which item is returned after the
Closing Date, the asset value represented by the Branch Loan transferred shall
be correspondingly increased and an
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amount in cash equal to such increase shall be paid by Purchaser to Seller
promptly upon demand.
(b) In the event that a dispute arises as to the appropriate amounts to
be paid to either party on the Adjustment Payment Date, each party shall pay to
the other on such Adjustment Payment Date all amounts other than those as to
which a dispute exists. Any disputed amounts retained by a party which are later
found to be due to the other party shall be paid to such other party promptly
upon resolution with interest thereon from the Adjustment Payment Date to the
date paid at the applicable Federal Funds Rate. The parties agree to arbitrate
any disputes arising under this subsection (b). Arbitration shall be by single
arbitrator experienced in the matters at issue and selected by the Purchaser and
the Seller and in accordance with the Commercial Arbitration Rules of the
American Arbitration Association. In the event the parties cannot agree on an
arbitrator, each party shall select an arbitrator and the two arbitrators shall
select a third. The arbitration shall be held in such place in Greenville, South
Carolina as may be specified by the arbitrator(s), and shall be conducted in
accordance with the Commercial Arbitration Rules existing at the date thereof of
the American Arbitration Association to the extent not inconsistent with this
Agreement. The decision of the arbitrator(s) shall be final and binding as to
any matters submitted, and any judgment thereon promptly shall be satisfied;
provided, however, that if necessary, such decision and satisfaction may be
enforced by either Purchaser or Seller in any court of record having
jurisdiction over the subject matter or over any of the parties of this
Agreement. All costs and expenses incurred in connection with any such
arbitration proceeding shall be borne by the party against which the decision is
rendered, or, if no decision is rendered, or if the decision is a compromise,
equally by Purchaser as one party and Seller, as the other party.
Section 4.4 Closing Deliveries of Seller at Closing. At the Closing,
the following shall be delivered by Seller to Purchaser:
(a) Deeds with respect to the Real Property of the same type
pursuant to which Seller acquired the Real Property ("Deeds");
(b) A Xxxx of Sale, in substantially the form attached hereto as
Exhibit B (the "Xxxx of Sale").
(c) An assignment and assumption agreement, in substantially the
form attached hereto as Exhibit C (the "Assignment and
Assumption Agreement");
(d) Consents from third persons that are required to effect the
assignment set forth in the Assignment and Assumption
Agreement, including, but not limited to, the lessors under
the Equipment Leases (to the extent required);
(e) A certificate of a proper officer of Seller, dated the Closing
Date, certifying to the fulfillment of all conditions which
are the obligation of Seller and that all of the
representations and warranties of Seller set forth in this
Agreement remain true and correct in all material respects on
the Closing Date;
(f) Certified copies of (A) the Articles of Incorporation and
Bylaws of Seller and (B) a resolution of the Board of
Directors of Seller, approving the transactions contemplated
hereby;
(g) An opinion of counsel reasonably acceptable to Purchaser's
counsel covering matters typically included in transactions of
this type, including opinions to the effect that (A) Seller is
duly organized, validly existing and in good standing under
the laws of South Carolina, (B) this Agreement, the Deeds, the
Xxxx of Sale and the Assignment and Assumption Agreement have
been duly authorized, executed and delivered by Seller and are
the legal, valid and binding agreements
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of Seller enforceable against Seller in accordance with their
terms, except as enforcement may be limited by bankruptcy,
fraudulent conveyance, insolvency or similar laws or equitable
principles affecting the enforcement of creditors' rights
generally or depository institutions the accounts of which are
insured by the FDIC and except as enforcement is subject to
general principles of equity, whether applied in a proceeding
in equity or at law, and (C) all proceedings or consents
required by law or regulation to be taken or obtained by
Seller in connection with the transactions provided for by
this Agreement have been duly and validly taken or obtained;
(h) Such incumbency and other certificates and other documents as
Purchaser and its counsel may reasonably require to evidence
the receipt by Seller of all necessary corporate and
regulatory authorizations and approvals for the consummation
of the transactions provided for in this Agreement;
(i) The Preliminary Closing Statement;
(j) All Assets capable of physical delivery;
(k) A letter addressed to Purchaser from a reputable heating and
air conditioning service company stating that an inspection
was made of the heating and air conditioning system of each
Branch Office within 20 days of Closing and that at such
inspection the systems were in good working condition; and
(l) A letter addressed to Purchaser from a reputable pest control
company stating that an inspection was made of each Branch
Office within 20 days of the Closing and that at the time of
such inspection there was no termite or other insect
infestation, no decay fungi or fungi damaged wood, no
excessive moisture conditions and no mold or sap stain fungi.
Section 4.5 Documents of Purchaser to be Delivered at Closing. At
Closing, the following documents shall be delivered by Purchaser to Seller:
(a) [reserved];
(b) The Assignment and Assumption Agreement;
(c) A certificate and receipt acknowledging the delivery and
receipt of possession of the property and records referred to
in this Agreement.
(d) A certificate of proper officers of Purchaser, dated the
Closing Date, certifying to the fulfillment of all conditions
which are the obligation of Purchaser and that all of the
representations and warranties of Purchaser set forth in this
Agreement remain true and correct in all material respects on
the Closing Date;
(e) Certified copies of (A) the Articles of Incorporation and
Bylaws of Purchaser and (B) a resolution of the Board of
Directors of Purchaser, approving the transactions
contemplated hereby;
(f) An opinion of counsel reasonably acceptable to Seller's
counsel covering matters typically included in transactions of
this type, including opinions to the effect that (A) Purchaser
is duly organized, validly existing and in good standing under
the laws of South Carolina, (B) this Agreement, and the
Assignment and Assumption Agreement have been duly authorized,
executed and delivered by Purchaser and are the legal, valid
and binding agreements of Purchaser enforceable against
Purchaser in accordance with their terms, except as
enforcement may be limited by bankruptcy, fraudulent
conveyance, insolvency or similar laws or equitable principles
affecting the enforcement of creditors' rights generally or
depository institutions the accounts of which are insured by
the FDIC and except as
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enforcement is subject to general principles of equity,
whether applied in a proceeding in equity or at law, and (C)
all proceedings or consents required by law or regulation to
be taken or obtained by Purchaser in connection with the
transactions provided for by this Agreement have been duly and
validly taken or obtained;
(g) Such certificates and other documents as Purchaser and its
counsel may reasonably require to evidence the receipt by
Purchaser of all necessary corporate and regulatory
authorizations and approvals for the consummation of the
transactions provided for in this Agreement; and
(h) The Preliminary Closing Statement.
Section 4.6 Magnetic Media Records. Seller agrees to prepare at its
expense and deliver to Purchaser magnetic media records in a format consistent
with BISYS file not later than 10 days prior to the Closing Date, and further
shall deliver to Purchaser such records updated on the Closing Date, which
records shall contain the information related to the Branch Loans and Deposits
assumed above.
Article 5
Representations and Warranties of Purchaser
Purchaser warrants and represents to Seller as set forth below, which
representations and warranties shall survive the Closing Date for a period equal
to the greater of 12 months from Closing or 90 days after the next succeeding
fiscal year end of Purchaser following the Closing (the "Warranty Period").
Section 5.1 Corporate Organization. Purchaser is a corporation duly
organized, validly existing and in good standing under the laws of the State of
South Carolina.
Section 5.2 Enforceable Agreement. This Agreement has been duly and
validly authorized, executed and delivered by Purchaser and is a valid, binding,
and enforceable obligation of Purchaser.
Section 5.3 No Violation. The consummation of the transactions
contemplated by this Agreement will not result in the breach of any term or
provision of Purchaser's charter or bylaws, nor result in the breach of any term
or provision of, nor conflict with, nor constitute a default under, nor result
in, the acceleration of any obligation under any agreement or other instrument
to which Purchaser or its property is subject, nor result in the violation of
any law, rule, regulation, order, judgment or decree to which the Purchaser is
subject. There is no action, suit or proceeding pending against the Purchaser,
or to its knowledge threatened, before any court or arbitrator or any
governmental body, agency or official which could materially and adversely
affect the ability of Purchaser to perform its obligations under this Agreement
or which in any manner questions the validity of this Agreement.
Section 5.4 Broker or Finder. Purchaser has not employed any broker or
finder in connection with this transaction.
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Section 5.5 Necessary Consents. Except for any necessary filings with,
and approvals and authorizations of the applicable bank regulatory authorities,
or except as expressly contemplated herein, no consent, approval, authorization,
registration, or filing with any governmental authority or private third party,
is required on the part of Purchaser in connection with the execution and
delivery of this Agreement or the consummation by Purchaser of the transactions
contemplated hereby (except such consents, approvals authorizations
registrations or filings as shall have been made or obtained on or before
Closing).
Section 5.6 Information for Regulatory Applications. The information
furnished or to be furnished by the Purchaser to Seller for the purpose of
enabling Seller to complete and file applications with any regulatory body is or
will be true and complete in all material respects as of the date so furnished.
Article 6
Representations and Warranties of Seller
Seller warrants and represents to Purchaser as follows, which
representations and warranties shall survive the Closing Date for the duration
of the Warranty Period:
Section 6.1 Corporate Organization. Seller is a South Carolina
corporation duly organized, validly existing, and in good standing under the
laws of the South Carolina and has the corporate power and is duly qualified to
carry on its business where and as now conducted and to own the Branch Property
and operate the Branch Office.
Section 6.2 Enforceable Agreement. This Agreement has been duly and
validly authorized, executed and delivered by Seller and is a valid, binding,
and enforceable obligation of Seller.
Section 6.3 No Violation. The consummation of the transactions
contemplated by this Agreement will not result in the breach of any term or
provision of Seller's charter or its bylaws, nor result in the breach of any
term or provision of, nor conflict with, nor constitute a default under, nor
result in, the acceleration of any obligation under any agreement or other
instrument to which Seller or any of its property is subject, nor result in the
violation of any law, rule, regulation, order, judgment or decree to which
Seller is subject.
Section 6.4 Broker or Finder. Seller has not employed any broker or
finder in connection with this transaction.
Section 6.5 Marketable Title. The Assets, when transferred, shall be
sold, assigned, transferred, and conveyed free and clear of (i) all liens,
encumbrances, security interests or charges of any kind except as specifically
provided otherwise herein, and (ii) all liabilities and obligations of Seller,
except as provided herein.
Section 6.6 Branch Premises and Branch Property. The following
representations are made with respect to the Branch Premises and the Branch
Property.
(a) Seller has not utilized, discharged, dispersed, released,
stored, generated, disposed of, or allowed to escape on the
Branch Premises, any pollutants or other toxic
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or hazardous substances except for cleaning supplies used in
reasonable amounts and for their ordinary purpose. Seller has
not installed, used, incorporated into, or disposed of any
asbestos or asbestos-containing materials in or on the Branch
Premises. Seller has not used or disposed of any
polychlorinated biphenyls on or in the Branch Premises or the
Branch Property in any form. To the best of Seller's
knowledge, no underground storage tanks are located on the
Branch Premises or were located on the Branch Premises and
were subsequently removed or filled. To the best of Seller's
knowledge, no investigation, administrative order, consent
order and agreement, litigation, or settlement with respect to
any hazardous or toxic substances is proposed, threatened,
anticipated or in existence with respect to the Branch
Premises. Seller has no knowledge of information concerning
(i) pollutants or other toxic or hazardous substances which
may be on the Branch Premises as a result of any acts, or
failures to act by third parties, or (ii) any condition of the
Branch Premises or Branch Property which may reasonably be
expected to result in environmental liability to Purchaser.
(b) Except as expressly provided herein, no other representations
are made with respect to the Branch Premises or the Branch
Property and Purchaser agrees that such Branch Premises and
Branch Property are being acquired "as is."
(c) Seller does hereby grant to Purchaser, its agents, engineers,
surveyors, appraisers, auditors and other representatives the
right to enter upon the Branch Office to inspect, examine and
survey, obtain engineering inspections, appraise and otherwise
do that which, in the reasonable opinion of Purchaser is
necessary to determine the boundaries, acreage and condition
of the Branch Office and Branch Property, to determine the
suitability of the Branch Office and Branch Property for the
uses intended by Purchaser, its topographical conditions, the
presence or absence of subsurface water and rock, and to make
all necessary tests to determine the physical condition of the
Branch Office and Branch Property. Purchaser agrees to
indemnify and hold Seller harmless from and against all
losses, damages, costs and expenses incurred by Seller arising
out of Purchaser's performance of such surveys, studies and
tests. Seller agrees to cooperate fully with Purchaser and
Purchaser's agents and representatives in the conduct and
performance of the various surveys, reviews, investigations,
audits, inspections and other examinations contemplated
herein. If Purchaser objects to the condition of the Branch
Office or any other portion thereof, Purchaser shall give
Seller written notice of the items of repair or replacement
necessary to place such portion of the Branch Office
(including but not limited to electric system, plumbing, and
roof) in good repair and in structurally sound operating
conditions ("Repair Items"). In the event that such Repair
Items will cost $25,000 or less to repair, Seller shall repair
such Repair Items on or before Closing. In the event that such
Repair Items will cost more than $25,000 to repair, Seller
shall not have the obligation to repair such Repair Items, and
in the event that Seller elects not to repair, Purchaser may
terminate this Agreement (although, in the event that such
Repair Items exceed $25,000, Purchaser may require Seller to
pay the $25,000 and proceed to Closing).
Section 6.7 Legal Action. There is no action, suit, proceeding or
investigation pending, nor to the knowledge of Seller, threatened against Seller
before any court, arbitrator or administrative or governmental body which may
result in any materially adverse change in the
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Assets or Branch Deposits or which could materially and adversely affect the
ability of Seller to perform its obligations under this Agreement or which in
any manner questions the validity of this Agreement. Seller is not subject to
any injunction, order or decree of any court or administrative agency (directed
only at Seller) which relates to or affects the Branch Office.
Section 6.8 Accuracy of Records. As of the Closing Date, all records
related to the Branch Deposits and the Assets, which will be transferred to
Purchaser by Seller hereunder are true and correct in all material respects,
including genuineness of signatures.
Section 6.9 Information for Regulatory Applications. The information
furnished or to be furnished by Seller to Purchaser for the purpose of enabling
Purchaser to complete and file applications with any regulatory body is or will
be true and complete in all material respects as of the date so furnished.
Section 6.10 Branch Loans. The following representations are made with
respect to the Branch Loans:
(a) None of the Branch Loans were made or administered in
violation of any law, regulation or ordinance, including
without limitation, the South Carolina Consumer Protection
Code, the Federal Truth-in-Lending Act and all regulations
promulgated thereunder, and all applicable consumer credit or
usury laws of any applicable jurisdiction, such that its
enforceability or the benefits inuring to the Purchaser
thereunder would be impaired in any material respect.
(b) Each of the Loans (i) is a valid and binding obligation of
each obligor, maker, co-maker, guarantor, endorser or debtor
(such persons hereinafter collectively referred to as
"Obligors") thereof or thereunder and is evidenced by valid
and binding promissory notes and, as the case may be,
instruments of security executed by the respective Obligors,
each of whom at the time of such execution had capacity to
contract and each of whose signatures on such instruments is
such person's true signature, (ii) is enforceable in
accordance with its terms (except for applicable bankruptcy or
similar laws affecting the enforcement of creditors rights
generally), and no Obligor with respect to any of the Loans
has or will have any right of defense, setoff or counterclaim
against Seller, and (iii) is free from any events of default
thereunder by Seller which impair collectibility.
Section 6.11 Compliance with Laws. Seller is in material compliance
with all laws, ordinances, and regulations that govern such Seller's ownership
and present use of the Assets, Branch Premises, Branch Office and Branch
Property, the violation of which would have a material adverse effect on the
Assets, the Branch Premises, Branch Office, or Branch Property. To Seller's
actual knowledge, all of the Assets, Branch Office, Branch Premises, and Branch
Property sold hereunder, materially comply with applicable environmental,
zoning, health, OSHA, consumer products, and fire safety regulations.
Section 6.12 Necessary Consents. Except for any necessary filings with,
and approvals and authorizations of the applicable bank regulatory authorities,
or except as expressly contemplated herein, no consent, approval, authorization,
registration, or filing with any governmental authority or private third party,
is required on the part of Purchaser in connection with the execution and
delivery of this Agreement or the consummation by Purchaser of the
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transactions contemplated hereby (except such consents, approvals authorizations
registrations or filings as shall have been made or obtained on or before
Closing).
Section 6.13 Worker's Compensation. There are no worker compensation or
similar claims or actions pending or, to Seller's knowledge threatened, and
Seller does not know of acts which would make such claims timely, by employees
of Seller currently employed at the Branch Office.
Section 6.14 Payables. Except for specific liabilities expressly
assumed hereunder, Seller will pay all accounts payable, taxes, assessments, and
charges respecting the Assets or the Branch Office incurred prior to the
Effective Time within a reasonable amount of time following Closing, except for
any such accounts payable, taxes, assessments or charges which are being
reasonably contested in good faith.
Section 6.15 Zoning. To the best of the knowledge of Seller's officer
executing this Agreement, the Branch Premises is in compliance with applicable
zoning laws and ordinances and such officer is not aware that the status of such
zoning is in question or subject to change by the appropriate governmental
authorities.
Section 6.16 Disclosure. To the best of Seller's knowledge, all
information and data furnished by Seller to Purchaser with respect to the
Assets, Branch Office, Branch Premises, and Branch Property is materially true,
correct, and complete, and not materially misleading.
Article 7
Covenants of the Parties
Section 7.1 Access. Seller shall afford to the officers and authorized
representatives of the Purchaser, upon prior notice, access to the properties,
books, and records pertaining to the Branch Office in order that Purchaser may
have full opportunity to make reasonable investigations, at reasonable times
without interfering with Seller's normal business and operations, of the affairs
of the Seller which relate to the Branch Office and the condition of each Branch
Office. The officers of Seller shall furnish Purchaser with such additional
financial and operating data and other information as to its business and
properties as Purchaser may, from time to time, reasonably request and as shall
be available, including, without limitation, information required for inclusion
in all governmental applications and filings necessary to effect this
transaction. In the event an audit is required by any governmental agency on the
Branch Office and/or Seller's operations conducted thereat, Seller shall timely
cooperate and assist Purchaser, at Purchaser's expense, with all reasonable
requests for information and documentation submitted to Seller by Purchaser or
Purchaser's accountants. Nothing in this paragraph shall be deemed to require
Seller to breach any obligation of confidentiality or to reveal any proprietary
information, trade secrets or marketing or strategic plans. Without limiting the
foregoing, as of the date hereof, Seller will provide Purchaser with access to
Seller's environmental records and such rights of investigation as are possessed
by Seller with respect to the Branch Premises for purposes of conducting
environmental investigations. The cost of any such investigation shall be borne
entirely by Purchaser.
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Section 7.2 Fees and Expenses. Purchaser shall be responsible for the
payment of all regulatory fees related to this transaction. Purchaser shall not
be responsible for any income tax liability of Seller arising from the business
or operations of Seller on or before the Closing Date, and Seller shall not be
responsible for any tax liabilities of Purchaser arising from the business or
operations of the Branch Office after the Closing Date. Utility payments,
telephone charges, real property taxes, personal property taxes, rent, salaries,
deposit insurance premiums, other ordinary operating expenses of Seller and
other standard expenses related to the liabilities assumed or assets purchased
hereunder shall be prorated between the parties as of the Closing Date.
Purchaser shall be responsible for the costs of all title examinations, title
insurance fees, surveys, its own attorneys' and accountants' fees and expenses,
recording costs, transfer fees, and other expenses arising in connection
therewith. Seller shall be responsible for its own attorneys' and accountants'
fees and expenses related to this transaction and documentary stamps and deed
recording fees relating to the Real Property. Any items which are required to be
prorated hereunder which cannot be prorated, because of a lack of sufficient
information, by the Closing Date shall be prorated as soon as the requisite
information is available. The post closing adjustments necessitated by any such
proration shall be effected on the Adjustment Payment Date.
Section 7.3 Regulatory Approvals. Each party shall use its respective
best efforts to obtain all necessary regulatory approvals. Within 30 days
following the execution of this Agreement, Purchaser shall prepare and file
applications required by law with the appropriate regulatory authorities for
approval to consummate the transactions contemplated herein. Purchaser agrees to
proceed with the preparation of such applications in a diligent manner and to
provide Seller with a copy of all such applications filed (except for any
confidential portions thereof).
Section 7.4 Conduct of Business Pending Closing. From the date hereof
to Closing, Seller covenants and agrees to the following:
(a) Seller shall conduct its business only in the ordinary course;
maintain a pricing structure of deposit liabilities consistent
with local market conditions and good business practice, and
not increase interest rates paid on deposit liabilities above
those generally offered in the Branch Office's markets; use
its best efforts to preserve its business operation as
conducted, and to preserve for the Purchaser the good will of
its customers; exercise reasonable efforts to cooperate with
and assist Purchaser in assuring the orderly transition of
such business from the Seller to Purchaser; provided, however,
that nothing in this paragraph shall be construed as requiring
Seller to engage in activities or efforts outside the ordinary
course of business as presently conducted;
(b) Except as disclosed in Schedule 7.4(b), Seller shall not enter
into any contracts on behalf of or affecting the Assets or the
Branch Office in excess of $5,000 without prior consent of
Purchaser.
(c) Seller shall maintain (i) insurance sufficient to replace the
Assets in the event of their destruction, and (ii) all other
insurance policies in existence on the date hereof at their
current levels.
(d) Seller shall maintain the Branch Premises and Branch Property
in its current condition and in a manner conducive to normal
business operations, ordinary wear and tear excepted.
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Section 7.5 Removal of Signs. Seller agrees to repair any damage caused
by the removal of the signs which are not being transferred to Purchaser
hereunder.
Section 7.6 Transfer of Records. Seller shall assign, transfer and
deliver to Purchaser such of the following records pertaining to the Deposits as
exist and are available in whatever form or medium is maintained by Seller: (A)
signature cards, orders and contracts between the Seller and depositors, and
records of similar character, (B) deposit slips and canceled checks or
withdrawal orders representing charges to depositors, and (C) records of account
maintained at the Branch Office. Seller shall retain all books and records of
account relating to the Branch Deposits which are not ordinarily maintained at
the Branch Office, shall maintain such books and records of account for as long
as may be required by applicable law for the joint benefit of itself and the
Purchaser, and will permit the Purchaser or its representatives, at any
reasonable time and at the Purchaser's expense, to inspect, make extracts from
or copies of, any such files, books of account, or records as Purchaser shall
deem reasonably necessary.
Section 7.7 Maintenance of Records by Purchaser. On and after the
Closing Date, Purchaser shall become responsible for maintaining the files,
documents and records delivered to Purchaser pursuant to this Agreement.
Purchaser will preserve and safekeep them as required by applicable law and
sound banking practice for the joint benefit of Seller and Purchaser. After the
Closing Date, Purchaser will permit Seller and its representatives, for
reasonable cause (and for no other purpose, it being acknowledged that
competitive reasons shall not be reasonable), at reasonable times and upon
reasonable notice and at Seller's expense, to examine, inspect, copy and
reproduce any such files, documents or records as Seller deems reasonably
necessary.
Section 7.8 Fiduciary Relationships. Purchaser agrees to assume all of
the fiduciary relationships of Seller arising out of any XXX deposits assumed by
Purchaser pursuant to Section 2.4 hereof, to the same extent as if Purchaser had
originally acquired, incurred or entered into such fiduciary relationships.
Notwithstanding anything in this Agreement to the contrary, however, Purchaser
will not assume or be responsible for any act or failure to act of Seller in
connection with such XXX deposits prior to the Closing Date.
Section 7.9 Performance of Liabilities. Purchaser agrees to honor, to
the extent that such depositor has funds on deposit with Purchaser, all properly
payable checks, drafts, and non-negotiable withdrawal orders on forms previously
provided by Seller with respect to the Branch Deposits to the same extent as if
the checks, drafts, or orders were drawn on forms provided by Purchaser with
respect to similar deposits or accounts for a period of 120 days following the
Closing Date, and shall hold Seller harmless with respect to any wrongful
dishonor by Purchaser thereof within such period. Purchaser agrees to honor all
previously authorized ACH transfers with respect to the Branch Deposits to the
same extent as if the ACH transfer were made with respect to similar deposits or
accounts at Purchaser for a period of ninety (90) calendar days following the
Closing Date, and shall hold Seller harmless with respect to any wrongful
dishonor by Purchaser thereof within such period.
Section 7.10 Further Assurances of Purchaser. On and after the Closing
Date, Purchaser shall give such further assurances to Seller and upon Seller's
request shall execute, acknowledge and deliver all such acknowledgments and
other instruments and take such further action as may be necessary and
appropriate to effectively relieve and discharge Seller from any obligations
remaining under the Branch Deposits; provided, however, that Purchaser need not
17
incur any material costs or expenses in connection with the undertakings
contained in this sentence unless Seller agrees to bear such costs or expenses.
In particular, and without limiting the foregoing:
(a) Purchaser will remit to Seller promptly after receipt by
Purchaser after the Closing Date at any of its offices all
amounts intended for deposit to accounts at Seller which were
not transferred to Purchaser pursuant to the Agreement; and
(b) With respect to checks or drafts drawn against accounts of
Seller which were not transferred to Purchaser pursuant to
this Agreement, Purchaser will cooperate with Seller and take
all reasonable steps requested by Seller to ensure that, on
and after the Closing Date, each such item which is coded for
presentment to Purchaser or to any bank for the account of
Purchaser is delivered to Seller in a timely manner and in
accordance with applicable law and clearing house rules or
agreement.
Section 7.11 Further Assurances of Seller. On and after the Closing
Date, Seller shall (i) give such further assistance to Purchaser and shall
execute, acknowledge and deliver all such bills of sale, deeds, acknowledgments
and other instruments and take such further action as may be necessary and
appropriate effectively to vest in Purchaser full, legal and equitable title to
the Assets, and (ii) use its best efforts to assist Purchaser in the orderly
transition of the liabilities being acquired by Purchaser; provided, however,
that Seller need not incur any material costs or expenses in connection with the
undertakings contained in this sentence unless such costs or expenses are paid
by Purchaser. In particular, and without limiting the foregoing:
(a) Seller will remit to Purchaser promptly after receipt by
Seller after the Closing Date at any of its other offices all
amounts intended for deposit to the accounts which are part of
the Branch Deposits or otherwise relating to the Branch
Deposits; and
(b) With respect to checks or drafts drawn against accounts which
are Branch Deposits, Seller will cooperate with Purchaser and
take all reasonable steps requested by Purchaser to ensure
that, on and after the Closing Date, each such item which is
coded for presentment to Seller or to any bank for the account
of Seller is delivered to Purchaser in a timely manner and in
accordance with applicable law and clearing house rules or
agreement; and
(c) After Closing, Seller shall assist Purchaser for a period of
30 days in any research reasonably requested by Purchaser with
respect to Branch Loans and Branch Deposits.
Section 7.12 Interest Reporting. Seller shall report from January 1,
2000 through the Closing Date all interest credited to, interest withheld from,
and early withdrawal penalties charged to the Branch Deposits which are assumed
by Purchaser under this Agreement. Purchaser shall report from the day after the
Closing Date through the end of the calendar year all interest credited to,
interest withheld from, and early withdrawal penalties charged to the Branch
Deposits assumed by Purchaser. Said reports shall be made to the holders of
these accounts and to the applicable Federal and State regulatory agencies.
Section 7.13 Training Sessions. All training sessions and other staff
meetings and other staff communications shall be coordinated with a designated
Seller representative prior to any such sessions, meetings or communications.
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Section 7.14 Noncompetition of Seller. For a period of two years
following the Closing Date, Seller agrees not to establish branch locations
within 5 miles of the Branch Office (the "Designated Area"). Notwithstanding the
foregoing, the acquisition of a financial institution or of substantially all of
the branch locations of a financial institution headquartered outside of the
Designated Area, which has banking locations in the Designated Area shall not
constitute a violation of this Section.
Article 8
Conditions to Seller's Obligations
The obligation of Seller to complete the transactions contemplated in
this Agreement are conditioned upon fulfillment (or waiver by Seller), on or
before the Closing Date, of each of the following conditions:
Section 8.1 Representations and Warranties True. The representations
and warranties made by Purchaser in this Agreement shall be true in all material
respects at and as of the Closing Date as though such representations and
warranties were made at and as of such time, except for any changes permitted by
the terms hereof or consented to by Seller.
Section 8.2 Obligations Performed. Purchaser shall (a) deliver to
Seller those items required by Section 4.5 hereof and (b) perform and comply in
all material respects with all obligations and agreements required by this
Agreement to be performed or complied with by it prior to or on the Closing
Date.
Section 8.3 Regulatory Approval. The parties hereto shall have received
from the appropriate regulatory authorities approval of the transactions
contemplated herein and approval for Purchaser to operate the Branch Office, and
all notice and waiting periods required by law to pass shall have passed and no
proceeding to enjoin, restrain, prohibit or invalidate such transactions shall
have been instituted or threatened, and any conditions of any regulatory
approval shall have been met.
Section 8.4 No Adverse Litigation. On the Closing Date, no action, suit
or proceeding shall be pending or threatened against Purchaser which is
reasonably likely to materially and adversely affect the transaction
contemplated herein.
Article 9
Conditions to Purchaser's Obligations
The obligation of Purchaser to complete the transactions contemplated
in this Agreement are conditioned upon fulfillment (or waiver by Purchaser), on
or before the Closing Date, of each of the following conditions:
Section 9.1 Representations and Warranties True. The representations
and warranties made by Seller in this Agreement shall be true in all material
respects at and as of the Closing Date as though such representations and
warranties were made at and as of such time, except for any changes permitted by
the terms hereof or consented to by Purchaser.
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Section 9.2 Obligations Performed. Seller shall (a) deliver to
Purchaser those items required by Section 4.4 hereof and (b) perform and comply
in all material respects with all obligations and agreements required by this
Agreement to be performed or complied with by it prior to or on the Closing
Date.
Section 9.3 No Adverse Litigation or Change. On the Closing Date, no
action, suit or proceeding shall be pending or threatened against Seller which
is reasonably likely to (a) materially and adversely affect the Assets or the
Branch Deposits or (b) materially and adversely affect the transactions
contemplated herein. There shall have been no material adverse change in the
Assets, Branch Deposits or the operations of the Branch Office.
Section 9.4 Regulatory Approval. The parties hereto shall have received
from the appropriate regulatory authorities approval of the transactions
contemplated herein, and all notice and waiting periods required by law to pass
shall have passed and no proceeding to enjoin, restrain, prohibit or invalidate
such transactions shall have been instituted or threatened, and any conditions
of any regulatory approval shall have been met.
Article 10
Indemnification
Section 10.1 Indemnification of Purchaser. Seller agrees to indemnify
and hold Purchaser harmless from and against any claim, loss, liability, damage
or expense that Purchaser sustains or becomes subject to as a result of (a) the
operation by Seller of the Branch Office prior to the Effective Time (except for
the Assumed Liabilities), (b) the breach or nonfulfillment by Seller of any
warranty, representation or covenant of Seller set forth herein, and (c) any
claim against, or liability or obligation of, Seller which (i) is asserted
against or sustained by Purchaser, its agents or employees and (ii) has not been
expressly assumed by Purchaser pursuant to this Agreement. Any such
indemnification shall include any costs, including reasonable attorneys' fees
incurred by Purchaser, whether or not suit is brought, subject to Section 10.3.
Further, subject to Section 10.3, in the event Seller breaches any warranty or
representation made in this Agreement or fails to perform any requirement or
obligation undertaken in this Agreement, Seller agrees to pay all costs,
including attorneys' fees (including at the appellate level), incurred by
Purchaser in the enforcement hereof, whether or not suit is brought. Any such
demands or claims arising out of breach of warranties, covenants, or indemnities
must be made prior to the expiration of the Warranty Period.
Section 10.2 Indemnification of Seller. Purchaser agrees to indemnify
and hold Seller harmless from and against any claim, loss, liability, damage or
expense that Seller sustains or becomes subject to as a result of (a) the
operation by Purchaser of the Branch Office from and after the Effective Time,
(b) as a result of the breach or nonfulfillment by Purchaser of any warranty,
representation or covenant of such parties set forth herein, and (c) any claim
against, or liability or obligation of, Seller which (i) is asserted against or
sustained by Seller, its agents or employees and (ii) has been assumed by
Purchaser pursuant to this Agreement. Any such indemnification shall include any
costs, including attorneys' fees incurred by Seller, whether or not suit is
brought, subject to Section 10.3. Further, subject to Section 10.3, in the event
Purchaser breaches any warranty or representation made in this Agreement or
fails to perform
20
any requirement or obligation undertaken in this Agreement, Purchaser agrees to
pay all costs, including reasonable attorneys' fees (including at the appellate
level), incurred by Seller in the enforcement hereof, whether or not suit is
brought. Any such demands or claims arising out of breach of warranties,
covenants, or indemnities must be made prior to the expiration of the Warranty
Period.
Section 10.3 Defense and Settlement. A party seeking indemnification
pursuant to this Article 10 (an "indemnified party") shall give prompt notice to
the party from whom such indemnification is sought (the "indemnifying party") of
the assertion of any claim, or the commencement of any action or proceeding, in
respect of which indemnity may be sought hereunder. The indemnified party shall
assist the indemnifying party in the defense of any such action or proceeding.
The indemnifying party shall have the right to, and shall at the request of the
indemnified party, assume the defense of any such action or proceeding at its
own expense. In any such action or proceeding, the indemnified party shall have
the right to retain its own counsel, but the fees and expenses of such counsel
shall be at its own expense unless:
(a) The indemnifying party and the indemnified party shall have
mutually agreed to the retention of such counsel; or
(b) The named parties to any such suit, action or proceeding
(including any impleaded parties) include both the
indemnifying party and the indemnified party and, in the
reasonable judgment of the indemnified party, representation
of both parties by the same counsel would be inappropriate due
to actual or potential differing interests between them.
An indemnifying party shall not be liable under this Section 10.3 for
any settlement effected without its consent of any claim, litigation or
proceeding in respect of which indemnity may be sought hereunder. The
indemnifying party may settle any claim without the consent of the indemnified
party, but only if the sole relief awarded is monetary damages that are paid in
full by the indemnifying party. An indemnified party shall, subject to its
reasonable business needs, use reasonable efforts to minimize the
indemnification sought from the indemnifying party hereunder. Notwithstanding
the foregoing, no investigation by an indemnified party at or prior to the
Closing shall relieve an indemnifying party of any liability hereunder, unless
the indemnified party seeks indemnity in respect of a representation or warranty
which it actually had reason to believe to be incorrect as a result of its
investigation prior to the Closing and the indemnified party intentionally
failed to bring such belief to the attention of the indemnifying party prior to
the Closing.
Section 10.4 Limitations on Indemnification. Notwithstanding anything
to the contrary contained in this Article 10, no indemnification shall be
required to be made by either party until the aggregate amount of all such
claims by a party, exceeds an aggregate of $50,000. Once such aggregate amounts
exceed $50,000, such party (or parties, in the case of a party's affiliate)
shall thereupon be entitled to indemnification for all amounts, including the
initial $50,000. In addition, the parties shall have no obligation under this
Article 10 for any consequential liability, damage or loss the indemnified party
may suffer as the result of any demand, claim or lawsuit.
Article 11
Personnel
21
Section 11.1 Responsibilities of Purchaser. Purchaser will offer to
hire on an "at will" basis all the Employees who are actively performing their
job duties on the Closing Date (and Seller will make all such employees
available for hire by Purchaser, without restriction). All personnel hired by
Purchaser will be given credit for the same number of years of service for
benefit purposes as Seller now gives in accordance with Purchaser's employee
benefit plans. Schedule 11.1 attached hereto and updated to the Closing Date
sets forth a true, correct and complete list showing all such employees, their
respective dates of hire and salary levels. Purchaser shall be liable for any
salaries, wages, bonuses, or commissions earned or accrued by all such Branch
personnel on and after the Closing Date.
Section 11.2 Benefit Plans. Prior to Closing, each of Seller and
Purchaser shall have provided to the other copies of the summary plan
descriptions of all employee benefit plans. Except as set forth on Schedule
11.2, Seller has no pension benefit, welfare benefit or other compensation plan
of any sort (including any employment contract) with respect to its employees.
Seller shall pay to all employees listed on Schedule 11.1 all amounts due them
under Seller's pension plan, under the terms of such plan as of the Closing
Date.
Section 11.3 Representations with Respect to Employees. Seller
represents and warrants to Purchaser that Seller is not a party to any employee
contracts or compensation arrangements with respect to its employees, and Seller
will indemnify Purchaser with respect to any and all liabilities arising under
any such contract or arrangement. During the period of time from the date hereof
through the Closing Date, Seller agrees not to increase the number of employees,
employee compensation or employee benefits, other than employee compensation
increases which would have otherwise occurred in the ordinary course of
business. Seller's employees are not represented by a labor union nor are they
parties to a collective bargaining agreement. No request for such representation
is pending.
Article 12
Miscellaneous
Section 12.1 Notices. All notices, requests, demands and other
communications hereunder shall be in writing and shall be duly addressed as
follows:
(a) If to Seller, to: Carolina First Bank
000 X. Xxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attn: Xxxxxxx X. Hummers III
with a copy to: Wyche, Burgess, Xxxxxxx & Xxxxxx, P.A.
Xxxx Xxxxxx Xxx 000
Xxxxxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxxxx, Xx
(b) If to Purchaser, to: Mid State Bank
c/o Community Capital Corporation
000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
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Attn: Xxxxxxx X. Xxxxxxx
with a copy to: Nexsen, Pruet, Xxxxxx & Xxxxxxx
X.X. Xxxxxx 0000
Xxxxxxxx, Xxxxx Xxxxxxxx 00000
Attn: Xxxxxx Xxxxxx III
Any such notice sent by registered or certified mail, return receipt
requested, or by overnight courier, such as Federal Express, shall be deemed to
have been duly given and received forty-eight (48) hours after the same is so
addressed and mailed with postage prepaid. Notice sent by any other manner shall
be effective only upon actual receipt thereof.
Section 12.2 Conditions for Termination. In addition to the provisions
for termination as provided elsewhere in this Agreement, this Agreement shall
terminate and be of no further force or effect as between the parties, except as
to liability for breach of any duty or obligation arising prior to the date of
termination, upon the occurrence of any of the following:
(a) The expiration of thirty (30) calendar days after any
governmental agency shall have denied or refused to grant the
approvals or consents required to be obtained pursuant to this
Agreement, unless within said thirty (30) day period Purchaser
and Seller agree to submit or resubmit an application to, or
appeal the decision of, the regulatory authority which denied
or refused to grant approval thereof;
(b) The expiration of thirty (30) Business Days from the date that
either party has given notice to the other party of such other
party's material breach of any covenant or failure to fulfill
any condition to such party's performance under this
Agreement; provided, however, that no such termination shall
take effect if within said thirty (30) day period the party so
notified shall have fully and completely corrected the grounds
for termination as specified in such notice;
(c) Upon the failure to consummate the transaction on or before
September 30, 2000, unless such date is extended in writing
agreed to by both parties; and
(d) Upon mutual consent of the parties to terminate.
Notwithstanding anything to the contrary contained in this Agreement,
no party hereto shall have the right to terminate this Agreement on account of
its own breach, a breach by its affiliate, or any immaterial breach by another
party.
Section 12.3 Effect of Termination. No termination of this Agreement
pursuant to this Article 12 or for any reason or in any manner shall release, or
be construed to release, either party hereto from liability or damage to the
other party arising out of, in connection with, or otherwise relating to,
directly or indirectly, such party's breach, default or failure in performance
of any material covenants, agreements, duties or obligations arising hereunder.
Section 12.4 Rights Upon Default. The parties hereto each acknowledge
that the rights of the other to consummate the transactions contemplated by this
Agreement are special, unique and of extraordinary character, and that, in the
event that any party violates or fails or refuses to perform any covenant or
agreement made in this Agreement, then the other party may be without adequate
remedy at law. The parties each agree, therefore, that in the event that any of
them violates or fails or refuses to perform any covenant or agreement made in
this Agreement, any other party may, in addition to any remedies at law for
damages or other relief, institute and
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prosecute an action in any court of competent jurisdiction to enforce specific
performance of such covenant or agreement or seek any other equitable relief.
Section 12.5 Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the undersigned parties and their respective
successors and permitted assigns (and to or for the benefit of no other person
or entity whatsoever). Except for such assignments as may be necessary to effect
the transactions through wholly-owned subsidiaries of the parties hereto and for
the transfer of any or all of Purchaser's rights hereunder to its parent
corporation, no assignment of this Agreement shall be made by the parties prior
to the Closing without the prior written consent of all parties.
Section 12.6 Governing Law. Except as required by federal law, this
Agreement shall be controlled, construed and enforced in accordance with the
laws of South Carolina.
Section 12.7 Announcements. The parties agree that the terms and
conditions of the transactions contemplated in this Agreement are to remain
confidential, except and only to the extent that applicable law requires
disclosure (and then notice of such disclosure shall be given to the other). Any
announcement or notice to third parties or to the public concerning the
transactions contemplated by this Agreement shall be jointly planned and
coordinated between the parties hereto.
Section 12.8 Confidentiality. The parties agree that all information
provided to the other parties hereunder (other than information which is a
matter of public knowledge or which has heretofore been published in any
publication for public distribution or filed as public information with any
governmental authority) is confidential and shall be used by the other parties
only for the purposes hereof. Should this Agreement be terminated for any
reason, each party shall return all such information, including all copies, to
the other party or parties.
Section 12.9 Integration. This Agreement and other agreements,
documents, and instruments to be delivered pursuant hereto supersedes all prior
negotiations, agreements and understandings between the parties and shall
constitute the entire agreement of the parties with respect to the subject
matter hereof, and may not be altered or amended except in a writing signed by
the parties.
Section 12.10 Waiver. The failure of any party at any time or times to
require performance of any provision hereof shall in no manner affect the right
to enforce the same; and no waiver by a party of any provision (or breach of a
provision) hereof, whether by conduct or otherwise, in any one or more instances
shall be denied or construed either as a further or continuing waiver of any
such provision or breach or as a waiver of any other provision or breach hereof.
Section 12.11 Headings. The headings of the Sections and Articles of
this Agreement are inserted for convenience only and shall not constitute a part
hereof.
Section 12.12 Expenses. Except as otherwise provided in this Agreement,
all legal, accounting and other costs and expenses incurred in connection with
the execution, delivery and performance of this Agreement and the transactions
contemplated hereby shall be borne and paid
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by the party incurring such costs and expenses, and neither party shall be
obligated for any cost or expense incurred by the other party.
Section 12.13 Severability. In the event that any court of competent
jurisdiction shall determine that any provision of this Agreement is invalid,
such determination shall not affect the validity of the other provisions of this
Agreement, which shall remain in full force and effect and which shall be
construed as to be valid under applicable law.
Section 12.14 Time of the Essence. Due to the sensitive nature of this
transaction, it understood and agreed that time is of the essence of this
Agreement.
End of Page
The next page is the Signature Page
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Signature Page
IN WITNESS WHEREOF, the parties have duly executed this Purchase and
Assumption Agreement as of the day first above written.
Attest: CAROLINA FIRST BANK
/s/ Xxxxxxx X. Hummers III By: /s/ Xxxx X. Xxxxxxx, Xx.
-------------------------- ------------------------
(Secretary) Xxxx X. Xxxxxxx, Xx.
Attest: MID STATE BANK
/s/ Xxxxxx X. Xxxxxxxx By: /s/ Xxxxxxx X. Xxxxxxxx
---------------------- -----------------------
(Secretary) Xxxxxxx X. Xxxxxxxx
Its: President
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List of Exhibits
Exhibit A - Assignment and Assumption of Lease Agreement
Exhibit B - Xxxx of Sale
Exhibit C - Assignment and Assumption Agreement
Schedule 2.1(b) - Branch Property
Schedule 2.1(e) - Branch Loans
Schedule 2.1(f) - Safe Deposit Leases
Schedule 2.1(g) - Equipment Leases
Schedule 2.1(h) - Repurchase Agreements
Schedule 2.2(d) - Excluded Assets
Schedule 2.3(a) - Additional Obligations Related to Branch Deposits
Schedule 2.3(c) - Additional Liabilities
Schedule 2.4(a) - Excluded Deposits
Schedule 7.4(b) - Contracts
Schedule 11.1 - Employees
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