<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended Commission File
December 31, 1997 No. 0-27652
REPUBLIC BANCSHARES, INC.
(Exact Name of Registrant As Specified In Its Charter)
FLORIDA 59-3347653
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
111 2nd Avenue N.E., St. Petersburg, FL 33701
(Address of Principal Office) (Zip Code)
(813) 823-7300
(Registrant's Telephone Number, Including Area Code)
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Title of each Class
-------------------
Common Stock, par value $2.00
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
------ ------
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K. /x/
As of March 13, 1998, there were 7,047,812 shares of the Registrant's Common
Stock, par value $2.00 per share, issued and outstanding. Accordingly, the
aggregate market value of the voting stock held by non-affiliates of the
Registrant was $72,093,352.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Company's Proxy Statement for the 1998 Annual Meeting of
Stockholders are incorporated by reference into Parts I, II, III, and IV of
this report.
<PAGE> 2
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<PAGE> 3
EXPLANATORY NOTE
The undersigned Registrant hereby files this Amendment No. 1 to correct the
aggregate market value of voting stock held by non-affiliates of the
Registrant as set forth on the front cover, and to amend Item 6 - Selected
Consolidated Financial Data and Item 14 - Exhibits, Financial Statement
Schedules, and Reports on Form 8-K, of its Annual Report on Form 10-K for the
fiscal year ended March 31, 1998, pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934.
[Balance of page intentionally left blank]
<PAGE> 4
ITEM 6. SELECTED CONSOLIDATED FINANCIAL DATA
The following selected consolidated operating data, per share data, balance
sheet data and selected financial ratios as of and for each of the years ended
December 31, 1994, 1995, 1996, and 1997, the seven-month period ended December
31, 1993, and the five-month period ended May 31, 1993 were derived from the
audited consolidated financial statements. The FFO Merger, completed on
September 19, 1997, was accounted for as a corporate reorganization in which
the majority stockholders' interest in FFO was combined at historical cost in a
manner similar to a pooling of interests while the minority interest in FFO was
combined using purchase accounting rules. This accounting treatment required
that all prior period financial information be restated as if the FFO Merger
had been completed in those previous years. The Company's financial information
will differ, in some cases substantially, from financial information presented
prior to completion of the FFO Merger. Financial data at and for the period
ended May 31, 1993, is not restated to reflect the FFO merger as the change in
control did not occur until May 28, 1993. Comparison of financial results
presented herein to financial information in the Company's previously-issued
financial reports may be misleading. In light of the significant mark-to-market
adjustments and other adjusting entries to its financial statements that were
made following the change in control, management believes that the usefulness
of comparisons between (i) the financial statements and the financial data
derived therefrom as of the dates and for the periods prior to June 1, 1993,
and (ii) the financial statements and the financial data derived therefrom as
of the dates and for the periods since June 1, 1993, may be limited. In
addition, subsequent to consummation of the initial public offering and the
Purchase and Assumption in December 1993, the Company has operated in a
significantly different manner from that which it had previously operated.
Accordingly, the financial results for periods prior to the Purchase and
Assumption differ significantly from periods since then. The following
information should be read in conjunction with "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and the consolidated
financial statements, related notes and other financial information presented
elsewhere.
<PAGE> 5
SELECTED CONSOLIDATED FINANCIAL AND OTHER DATA
- TABLE 1
($ IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
Years Ended December 31,
--------------------------------------------------------------------
OPERATING DATA: 1997 1996 1995 1994
=============== ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Interest income ............................ $ 108,457 $ 88,944 $ 77,593 $ 53,997
Interest expense ........................... 54,923 44,949 40,112 24,423
----------- ----------- ----------- -----------
Net interest income ........................ 53,534 43,995 37,481 29,574
Loan loss provision ........................ 2,628 2,582 2,162 172
----------- ----------- ----------- -----------
Net interest income after .................. 50,906 41,413 35,319 29,402
loan loss provision
Other noninterest income ................... 25,031 6,745 5,353 5,099
Gain on sale of ORE held for investment .... - 1,207 - -
General and administrative ................. 57,484 36,829 30,963 23,678
("G&A") expenses
Merger expenses ............................ 1,144 - - -
SAIF special assessment .................... - 4,005 - -
Provision for losses on ORE ................ 530 111 - -
Other noninterest expense .................. 273 (490) 902 4,216
Amort. of goodwill & premium 464 491 450 1,269
----------- ----------- ----------- -----------
on deposits .............................
Net income before income taxes, negative
goodwill accretion & minority interest .. 16,042 8,419 8,357 5,338
Accretion of negative goodwill ............. - - 1,578 2,705
----------- ----------- ----------- -----------
Net income before income taxes 16,042 8,419 9,935 8,043
& minority interest ....................
Income tax (expense) benefit ............... (6,096) (3,035) (2,516) (702)
Minority interest in income from (701) - - -
subsidiary trust ........................
Minority interest in FFO Financial, Inc. ... (674) (505) (503) (131)
----------- ----------- ----------- -----------
Net income ................................. $ 8,571 $ 4,879 $ 6,916 $ 7,210
=========== =========== =========== ===========
Earnings per share - diluted ............... $ 1.21 $ 0.74 $ 1.10 $ 1.28
=========== =========== =========== ===========
Weighted average shares 7,301,499 6,626,604 6,261,368 5,632,437
=========== =========== =========== ===========
outstanding - diluted ...................
Earnings per share - basic ................. $ 1.40 $ 0.83 $ 1.26 $ 1.48
=========== =========== =========== ===========
Weighted average shares 6,128,014 5,857,174 5,491,250 4,868,211
=========== =========== =========== ===========
outstanding - basic .....................
BALANCE SHEET DATA:
====================
Total assets ............................... $ 1,552,405 $ 1,224,357 $ 1,103,480 $ 879,873
Investment & mortgage backed securities .... 108,593 161,357 155,345 101,028
Loans held for sale ........................ 151,404 46,593 27,476 7,930
Loans held in portfolio, 1,149,731 920,782 831,033 680,604
net of unearned income ..................
Allowance for loan losses .................. 20,776 18,747 20,048 15,272
Goodwill & premium on deposits ............. 4,855 527 1,017 820
Deposits ................................... 1,361,312 1,114,907 992,041 794,717
Stockholders' equity ....................... 95,531 68,178 63,833 47,618
Book value per share (dollars) ............. 12.27 10.32 9.65 8.16
SELECTED FINANCIAL RATIOS:
==========================
Return on average assets ................... 0.63% 0.43% 0.68% 0.90%
Return on average equity ................... 11.44 7.41 12.62 16.73
Equity to assets ........................... 6.15 5.57 5.78 5.41
Equity to assets minority interest 8.01 5.57 5.78 5.41
in preferred subsidiary .................
Net interest spread ........................ 3.71 3.63 3.65 3.87
Net interest margin ........................ 4.18 4.02 3.95 4.06
G & A expense to average assets ............ 4.26 3.21 3.06 2.95
G & A efficiency ratio ..................... 73.17 72.58 72.29 68.29
Loan/deposit ratio ......................... 84.46 82.59 83.77 85.64
Nonperforming loans to loans ............... 2.36 2.12 2.18 2.44
Nonperforming assets to total assets ....... 2.20 2.27 2.78 3.96
Loan loss allowance to loans ............... 1.81 2.04 2.40 2.24
Loan loss allowance to nonperforming loans:
Originated portfolio ...................... 93.66 73.15 106.51 177.30
March 1995 purchase ....................... 373.91 488.78 647.83 N/A
Crossland portfolio ....................... 421.88 126.12 41.77 23.73
Other purchased portfolios ................ 22.28 89.80 41.84 82.99
Total portfolio loans ..................... 76.51 96.03 110.73 91.98
OTHER DATA (AT PERIOD-END):
===========================
Number of branches ........................ 45 43 43 31
Number of full time equivalent employees .. 1,045 795 573 451
</TABLE>
3
<PAGE> 6
SELECTED CONSOLIDATED FINANCIAL AND OTHER DATA
- TABLE 2
($ IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
Seven Months Ended Five Months Ended
December 31, 1993 May 31, 1993
------------------ -----------------
<S> <C> <C>
OPERATING DATA:
===============
Interest income ....................................... $ 11,885 $ 4,848
Interest expense ...................................... 5,120 1,970
----------- -----------
Net interest income ................................... 6,765 2,878
Loan loss provision ................................... 3,222 379
----------- -----------
Net interest income after loan loss provision ......... 3,543 2,499
Other noninterest income .............................. - 743
General and administrative (G&A) expenses ............. 6,481 2,699
Provision for losses on ORE ........................... - 1,214
Other noninterest expense ............................. 331 443
----------- -----------
Net income before income taxes, negative (1,592) (1,114)
goodwill accretion & minority interest ..............
Accretion of negative goodwill ........................ 1,578 -
----------- -----------
Net income before income taxes (14) (1,114)
& minority interest .................................
Income tax (expense) benefit .......................... 2,844 -
Minority interest in FFO .............................. (197) -
----------- -----------
Net income ......................................... $ 2,633 $ (1,114)
=========== ===========
Earnings(loss) per share-diluted ...................... $ 1.01 $ (1.00)
=========== ===========
Weighted average shares outstanding-diluted ........... 2,594,923 1,117,192
=========== ===========
Earnings(loss) per share-basic ........................ $ 1.10 $ (1.11)
=========== ===========
Weighted average shares outstanding-basic ............. 2,398,066 1,002,794
=========== ===========
BALANCE SHEET DATA:
===================
Total assets .......................................... $ 780,711 $ 168,741
Investment and mortgage backed securities ............. 74,042 27,433
Loans held for sale ................................... 11,346 -
Loans held in portfolio, net of unearned income ....... 479,600 111,292
Allowance for loan losses ............................. 15,872 1,866
Deposits .............................................. 705,584 153,660
Negative goodwill ..................................... 4,283 5,861
Stockholders' equity .................................. 34,003 8,058
Book value per share (dollars) ........................ 6.11 N/A
SELECTED FINANCIAL RATIOS:
==========================
Return on average assets .............................. 0.97% (1.61)%
Return on average equity .............................. 36.97 (21.75)
Equity to assets ...................................... 4.36 4.78
Net interest spread ................................... 3.88 4.21
Net interest margin ................................... 4.30 4.66
G&A expense to average assets ......................... 2.38 6.28
G&A efficiency ratio .................................. 76.77 74.54
Loan/deposit ratio .................................... 67.97 72.43
Nonperforming loans to loans .......................... 4.03 2.27
Nonperforming assets to total assets .................. 5.66 5.89
Loan loss allowance to loans .......................... 3.31 1.68
Loan loss allowance to nonperforming loans:
Originated portfolio .................................. 129.06 73.03
CrossLand portfolio ................................... 39.88 N/A
Total portfolio loans ................................. 82.20 73.03
OTHER DATA (AT PERIOD-END):
===========================
Number of branches .................................... 29 7
Number of full time equivalent employees .............. 373 96
</TABLE>
4
<PAGE> 7
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) The following documents are filed as part of this report at pages 49
through 81.
1. Financial Statements
Financial Statements of Republic Bancshares, Inc.
Report of Independent Certified Public Accountants
Consolidated Balance Sheets at December 31, 1997 and 1996
Consolidated Statements Of Operations, Stockholders' Equity
and Cash Flows for:
Years Ended December 31, 1997, 1996, and 1995
Notes to Consolidated Financial Statements
2. Financial Statement Schedules
All required schedules are included in the financial
statements or related notes.
(b) No report on Form 8-K has been filed during fiscal year ending December
31, 1997. (c) Exhibits:
3.1 Amended and Restated Articles of Incorporation of the Company
(incorporated by reference from Exhibit 3.1 of the Company's
Registration Statement on Form S-4, File No. 33-80895, dated
December 28, 1995).
3.2 By-laws of the Company (incorporated by reference from Exhibit
3.2 of the Company's Registration Statement on Form S-4, File
No. 33-80895, dated December 28, 1995).
10.1 Purchase and Assumption Agreement relating to the Florida
Branches, between NationsBank Corporation and the Company,
dated December 15, 1997.
10.2 Purchase and Assumption Agreement relating to the Georgia
Branch, between NationsBank Corporation and the Company,
dated December 15, 1997.
21.0 List of Subsidiaries
23.1 Consent of Arthur Andersen LLP.
27.0 Financial Data Schedule.+ (for SEC use only)
- ----------------------
+ Previously Filed
5
<PAGE> 8
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Stockholders and the Board of Directors of Republic Bancshares, Inc.:
We have audited the accompanying consolidated balance sheets of
Republic Bancshares, Inc. (a Florida corporation) and subsidiaries as of
December 31, 1997 and 1996, and the related consolidated statements of
operations, stockholders' equity and cash flows for each of the three years in
the period ended December 31, 1997. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We did not audit the financial statements of F.F.O. Financial Group,
Inc., a company acquired during 1997 in a transaction accounted for as a
corporate reorganization, as discussed in Note 1. Such statements are included
in the consolidated financial statements of Republic Bancshares, Inc. and
reflect total assets and total revenues of 27% and 25%, respectively, of the
related consolidated totals. These statements were audited by other auditors
whose report has been furnished to us and our opinion, insofar as it relates to
amounts included for F.F.O. Financial Group, Inc., is based solely upon the
report of the other auditors.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits and the report of the other auditors provide a
reasonable basis for our opinion.
In our opinion, based on our audit and the report of the other
auditors, the financial statements referred to above present fairly, in all
material respects, the financial position of Republic Bancshares, Inc. and
subsidiaries as of December 31, 1997 and 1996, and the results of their
operations and their cash flows for each of the three years in the period ended
December 31, 1997, in conformity with generally accepted accounting principles.
Tampa, Florida
March 13, 1998
6
<PAGE> 9
REPUBLIC BANCSHARES, INC. & SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS -DECEMBER 31, 1997 AND 1996
($ in thousands, except par values)
<TABLE>
<CAPTION>
December 31,
--------------------------
1997 1996
---------- -----------
<S> <C> <C>
ASSETS
------
Cash and due from banks ........................................................ $ 45,998 $ 34,109
Interest bearing deposits in banks ............................................. 671 11,783
Federal funds sold ............................................................. 33,000 8,000
Investment securities:
Available for sale ............................................................. 16,080 74,397
Trading ..................................................................... - 4,032
Mortgage-backed securities:
Held to maturity ........................................................... - 15,343
Available for sale .......................................................... 55,467 62,037
Trading ..................................................................... 37,046 5,548
FHLB stock ..................................................................... 8,148 7,209
Loans held for sale ............................................................ 151,404 46,593
Loans, net of allowance for loan losses ........................................ 1,128,955 902,035
Premises and equipment, net .................................................... 33,303 25,039
Other real estate owned acquired through foreclosure, net ...................... 6,997 8,162
Accrued interest receivable .................................................... 9,611 7,160
Goodwill and premium on deposits ............................................... 4,855 527
Other assets ................................................................... 20,870 12,383
---------- -----------
Total assets ............................................................. $1,552,405 $ 1,224,357
========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Liabilities:
Deposits-
Noninterest-bearing checking ............................................. $ 93,843 $ 64,363
Interest checking ........................................................ 137,240 87,639
Money market ............................................................. 30,389 32,665
Savings .................................................................. 291,604 303,932
Time deposits ............................................................ 808,236 626,308
---------- -----------
Total deposits ....................................................... 1,361,312 1,114,907
Securities sold under agreements to repurchase ................................. 19,654 15,372
FHLB advances .................................................................. 35,000 7,000
Subordinated debt .............................................................. - 6,000
Other liabilities .............................................................. 12,158 6,479
---------- -----------
Total liabilities .................................................... 1,428,124 1,149,758
---------- -----------
Company-obligated mandatorily redeemable capital ............................... 28,750 -
---------- -----------
securities of subsidiary trust holding soley junior
subordinated debentures of the Company
Minority interest in F.F.O. Financial Group, Inc. .............................. - 6,421
---------- -----------
Stockholders' equity:
Perpetual preferred convertible stock ($20.00 par, 100,000 shares authorized,
75,000 shares issued and outstanding:
Liquidation preference $6,600 at December 31, 1997 and 1996 ................. 1,500 1,500
Common stock ($2.00 par, 20,000,000 shares authorized, 7,035,886 and ........... 14,072 11,708
5,854,414 shares issued and outstanding at December 31, 1997 and
1996, respectively)
Capital surplus ................................................................ 50,322 34,225
Retained earnings .............................................................. 29,155 20,847
Net unrealized gain (losses) on available-for-sale securities, ................. 482 (102)
---------- -----------
net of tax effect
Total stockholders' equity .................................................. 95,531 68,178
---------- -----------
Total liabilities and stockholders' equity .................................. $1,552,405 $ 1,224,357
========== ===========
</TABLE>
The accompanying notes are an integral part of these consolidated
balance sheets.
7
<PAGE> 10
REPUBLIC BANCSHARES, INC. & SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
($ IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
FOR THE YEARS ENDED DECEMBER 31
--------------------------------------------
1997 1996 1995
--------------------------------------------
<S> <C> <C> <C>
INTEREST INCOME:
Interest and fees on loans ................................. $ 97,810 $ 78,955 $ 67,746
Interest on investment securities ..................... 2,155 2,097 3,171
Interest on mortgage-backed securities ................ 5,252 5,375 2,869
Interest on trading securities ........................ 59 - -
Interest on federal funds sold ........................ 2,447 1,714 3,117
Interest on other investments ......................... 734 803 690
----------- ----------- -----------
Total interest income ................................... 108,457 88,944 77,593
----------- ----------- -----------
INTEREST EXPENSE:
Interest on deposits .................................. 52,311 44,136 39,822
Interest on FHLB advances ............................. 1,169 365 163
Interest on subordinated debt ......................... 392 5 -
Interest on other borrowings .......................... 1,051 443 127
----------- ----------- -----------
Total interest expense ...................... 54,923 44,949 40,112
----------- ----------- -----------
Net interest income ......................... 53,534 43,995 37,481
PROVISION FOR LOAN LOSSES .................................. 2,628 2,582 2,162
----------- ----------- -----------
Net interest income after provision for possible
loan losses ............................................. 50,906 41,413 35,319
----------- ----------- -----------
NONINTEREST INCOME:
Income from mortgage banking activities ............... 15,159 852 -
Gain on sale of loans ................................. 1,491 144 210
Service charges and fees on deposits .................. 3,358 2,847 2,644
Loan fee income ....................................... 1,394 1,327 1,019
Gain on sale of ORE -- held for investment ............ - 1,207 -
Gain on sale of securities, net ....................... 1,308 261 322
Other operating income ................................ 2,321 1,314 1,138
----------- ----------- -----------
Total noninterest income .................... 25,031 7,952 5,353
NONINTEREST EXPENSES:
Salaries and employee benefits ............................. 27,253 18,505 15,294
Net occupancy expense ...................................... 8,118 6,381 5,025
Data processing fees ....................................... 2,605 2,119 1,716
FDIC and state assessments .............................. 824 1,606 2,212
Other operating expense .................................... 18,684 8,218 6,716
----------- ----------- -----------
Total general and administrative expenses .................. 57,484 36,829 30,963
Merger expenses ............................................ 1,144 - -
SAIF special assessment .................................... - 4,005 -
Provisions for losses on ORE ............................... 530 111 240
ORE expense, net of ORE income ............................. 273 (490) 662
Amortization of goodwill & premium on deposits ............. 464 491 450
----------- ----------- -----------
Total noninterest expenses ................................. 59,895 40,946 32,315
----------- ----------- -----------
Income before negative goodwill accretion, income taxes .... 16,042 8,419 8,357
and minority interest
Negative goodwill accretion ................................ - - 1,578
Income tax provision ....................................... (6,096) (3,035) (2,516)
Minority interest in income from subsidiary trust .......... (701) - -
Minority interest in F.F.O ................................. (674) (505) (503)
----------- ----------- -----------
NET INCOME ................................................. $ 8,571 $ 4,879 $ 6,916
=========== =========== ===========
PER SHARE DATA:
Net income per common and common equivalent share-diluted .. $ 1.21 $ 74 $ 1.10
=========== =========== ===========
Weighted average common and common equivalent shares
outstanding - diluted ...................................... 7,301,499 6,626,604 6,261,368
=========== =========== ===========
Net income per common share-basic .......................... $ 1.40 $ .83 $ 1.26
=========== =========== ===========
Weighted average common shares outstanding-basic ........... 6,128,014 5,857,174 5,491,250
=========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these consolidated statements.
8
<PAGE> 11
REPUBLIC BANCSHARES, INC. & SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
FOR THE YEARS ENDED DECEMBER 31, 1995, 1996 AND 1997
($ IN THOUSANDS)
<TABLE>
<CAPTION>
NET
UNREALIZED
PERPETUAL PREFERRED GAINS
Convertible Stock (LOSSES)
------------------- COMMON STOCK ON AVAILABLE
SHARES SHARES CAPITAL RETAINED FOR SALE
ISSUED AMOUNT ISSUED AMOUNT SURPLUS EARNINGS SECURITIES TOTAL
------ ------ ------ ------ ------- -------- ---------- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
BALANCE, DECEMBER 31, 1994 75,000 $ 1,500 5,082,782 $ 10,166 $ 26,843 $ 9,577 $(549) $ 47,537
Net income -- -- -- -- -- 6,918 -- 6,918
Net unrealized gains on
available-for-sale securities,
net of tax effect -- -- -- -- -- -- 651 651
Issuance of common stock -- -- 800,000 1,600 7,537 -- -- 9,137
Exercise of stock options -- -- 3,170 6 23 -- -- 29
Dividends on preferred stock (263) (263)
Net change in minority interest -- -- (23,200) (47) (129) -- -- (176)
---------- ------- ---------- -------- -------- -------- ------- --------
BALANCE, DECEMBER 31, 1995 75,000 1,500 5,862,752 11,725 34,274 16,232 102 63,833
Net income -- -- -- -- -- 4,879 -- 4,879
Net unrealized loss on
available-for-sale securities,
net of tax effect -- -- -- -- -- -- (204) (204)
Dividends on preferred stock -- -- -- -- -- (264) -- (264)
Net change in minority interest -- -- (8,338) (17) (49) -- -- (66)
---------- ------- ---------- -------- -------- -------- ------- --------
BALANCE, DECEMBER 31, 1996 75,000 1,500 5,854,414 11,708 34,225 20,847 (102) 68,178
Net income -- -- -- -- -- 8,571 -- 8,571
Net unrealized gains on
available-for-sale securities,
net of tax effect -- -- -- -- -- -- 584 584
Exercise of stock options -- -- 21,300 43 197 -- -- 240
Net change in minority interest -- -- (2,537) (5) (487) -- -- (492)
Issuance of common stock in
merger transaction -- -- 826,709 1,654 11,211 -- -- 12,865
Conversion of subordinated
debentures -- -- 336,000 672 5,176 -- -- 5,848
Dividends on preferred stock -- -- -- -- -- (263) -- (263)
---------- ------- ---------- -------- -------- -------- ------- --------
BALANCE, DECEMBER 31, 1997 75,000 $ 1,500 7,035,886 $ 14,072 $ 50,322 $ 29,155 $ 482 $ 95,531
========== ======= ========== ======== ======== ======== ======= ========
</TABLE>
The accompanying notes are an integral part of these consolidated statements
9
<PAGE> 12
REPUBLIC BANCSHARES, INC. & SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
($ IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
FOR THE YEARS ENDED DECEMBER 31
1997 1996 1995
-----------------------------------------
INTEREST INCOME:
<S> <C> <C> <C>
Interest and fees on loans ................................ $ 97,810 $ 78,955 $ 67,746
Interest on investment securities .................... 2,155 2,097 3,171
Interest on mortgage-backed securities ............... 5,252 5,375 2,869
Interest on trading securities ....................... 59 -- --
Interest on federal funds sold ....................... 2,447 1,714 3,117
Interest on other investments ........................ 734 803 690
----------- ----------- -----------
Total interest income .................................. 108,457 88,944 77,593
----------- ----------- -----------
INTEREST EXPENSE:
Interest on deposits ................................. 52,311 44,136 39,822
Interest on FHLB advances ............................ 1,169 365 163
Interest on subordinated debt ........................ 392 5 --
Interest on other borrowings ......................... 1,051 443 127
----------- ----------- -----------
Total interest expense ..................... 54,923 44,949 40,112
----------- ----------- -----------
Net interest income ........................ 53,534 43,995 37,481
PROVISION FOR LOAN LOSSES ................................. 2,628 2,582 2,162
----------- ----------- -----------
Net interest income after provision for possible ......... 50,906 41,413 35,319
----------- ----------- -----------
loan losses
NONINTEREST INCOME:
Income from mortgage banking activities .............. 15,159 852 --
Gain on sale of loans ................................ 1,491 144 210
Service charges and fees on deposits ................. 3,358 2,847 2,644
Loan fee income ...................................... 1,394 1,327 1,019
Gain on sale of ORE -- held for investment ........... -- 1,207 --
Gain on sale of securities, net ...................... 1,308 261 322
Other operating income ............................... 2,321 1,314 1,138
----------- ----------- -----------
Total noninterest income ................... 25,031 7,952 5,353
NONINTEREST EXPENSES:
Salaries and employee benefits ............................ 27,253 18,505 15,294
Net occupancy expense ..................................... 8,118 6,381 5,025
Data processing fees ...................................... 2,605 2,119 1,716
FDIC and state assessments ............................. 824 1,606 2,212
Other operating expense .................................. 18,684 8,218 6,716
----------- ----------- -----------
Total general and administrative expenses ................. 57,484 36,829 30,963
Merger expenses .......................................... 1,144 -- --
SAIF special assessment .................................. -- 4,005 --
Provisions for losses on ORE ............................. 530 111 240
ORE expense, net of ORE income ........................... 273 (490) 662
Amortization of goodwill & premium on deposits ............ 464 491 450
----------- ----------- -----------
Total noninterest expenses ................................ 59,895 40,946 32,315
----------- ----------- -----------
Income before negative goodwill accretion, income taxes ... 16,042 8,419 8,357
and minority interest
Negative goodwill accretion ............................... -- -- 1,578
Income tax provision ...................................... (6,096) (3,035) (2,516)
Minority interest in income from subsidiary trust ......... (701) -- --
Minority interest in F.F.O ................................ (674) (505) (503)
----------- ----------- -----------
NET INCOME ................................................ $ 8,571 $ 4,879 $ 6,916
=========== =========== ===========
PER SHARE DATA:
Net income per common and common equivalent share-diluted.. $ 1.21 $ 74 $ 1.10
=========== =========== ===========
Weighted average common and common equivalent shares ...... 7,301,499 6,626,604 6.261,368
outstanding - diluted ..................................... =========== =========== ===========
Net income per common share-basic ......................... $ 1.40 $ .83 $ 1.26
=========== =========== ===========
Weighted average common shares outstanding-basic ......... 6,128,014 5,857,174 5,491,250
=========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these consolidated statements.
8
<PAGE> 13
REPUBLIC BANCSHARES, INC. & SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
FOR THE YEARS ENDED DECEMBER 31, 1995, 1996 AND 1997
($ IN THOUSANDS)
<TABLE>
<CAPTION>
NET
UNREALIZED
Perpetual Preferred GAINS
Convertible Stock (LOSSES)
------------------- Common Stock ON AVAILABLE
SHARES SHARES CAPITAL RETAINED FOR SALE
Issued Amount Issued Amount Surplus Earnings Securities Total
------ ------ ------ ------ ------- -------- ---------- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
BALANCE, DECEMBER 31, 1994 75,000 $ 1,500 5,082,782 $ 10,166 $ 26,843 $ 9,577 $(549) $ 47,537
Net income -- -- -- -- -- 6,918 -- 6,918
Net unrealized gains on
available-for-sale securities,
net of tax effect -- -- -- -- -- -- 651 651
Issuance of common stock -- -- 800,000 1,600 7,537 -- -- 9,137
Exercise of stock options -- -- 3,170 6 23 -- -- 29
Dividends on preferred stock (263) (263)
Net change in minority interest -- -- (23,200) (47) (129) -- -- (176)
---------- ------- ---------- -------- -------- -------- ------- --------
BALANCE, DECEMBER 31, 1995 75,000 1,500 5,862,752 11,725 34,274 16,232 102 63,833
Net income -- -- -- -- -- 4,879 -- 4,879
Net unrealized loss on
available-for-sale securities,
net of tax effect -- -- -- -- -- -- (204) (204)
Dividends on preferred stock -- -- -- -- -- (264) -- (264)
Net change in minority interest -- -- (8,338) (17) (49) -- -- (66)
---------- ------- ---------- -------- -------- -------- ------- --------
BALANCE, DECEMBER 31, 1996 75,000 1,500 5,854,414 11,708 34,225 20,847 (102) 68,178
Net income -- -- -- -- -- 8,571 -- 8,571
Net unrealized gains on
available-for-sale securities,
net of tax effect -- -- -- -- -- -- 584 584
Exercise of stock -- -- 21,300 43 197 -- -- 240
options
Net change in minority -- -- (2,537) (5) (487) -- -- (492)
interest
Issuance of common stock in
merger transaction -- -- 826,709 1,654 11,211 -- -- 12,865
Conversion of subordinated
debentures -- -- 336,000 672 5,176 -- -- 5,848
Dividends on preferred stock -- -- -- -- -- (263) -- (263)
---------- ------- ---------- -------- -------- -------- ------- --------
BALANCE, DECEMBER 31, 1997 75,000 $ 1,500 7,035,886 $ 14,072 $ 50,322 $ 29,155 $ 482 $ 95,531
========== ======= ========== ======== ======== ======== ======= ========
</TABLE>
The accompanying notes are an integral part of these consolidated statements
9
<PAGE> 14
REPUBLIC BANCSHARES, INC. & SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
($ in thousands)
<TABLE>
<CAPTION>
FOR THE YEARS ENDED
DECEMBER 31,
-----------------------------------
1997 1996 1995
---- ---- ----
<S> <C> <C> <C>
OPERATING ACTIVITIES:
Net income .................................................... $ 8,571 $ 4,879 $ 6,916
Reconciliation of net income to net cash (used in)
provided by operating activities:
Provision for loan and ORE losses ............................. 3,235 2,693 2,402
Depreciation and amortization, net ............................ 5,297 (1,165) 592
Amortization of premium (accretion) of fair value, net ........ 918 712 (1,111)
Gain on sale of loans ......................................... (16,500) (996) (210)
Gain on sale of investment securities ......................... (724) (457) (93)
Gain on sale of other real estate owned ....................... (27) (1,810) (39)
Capitalization of mortgage servicing .......................... (6,826) (1,741) --
Loss (gain) on disposal of premises and equipment ............. 14 (2) --
Net decrease (increase) in deferred tax benefit ............... (3,768) (755) (12)
Net (increase) decrease in other assets ....................... (4,339) 1,803 (4,027)
Net increase (decrease) in other liabilities .................. 4,554 (1,248) 1,800
--------- --------- ---------
Net cash (used in) provided by operating activities ........... (11,430) 1,919 6,218
--------- --------- ---------
INVESTING ACTIVITIES:
Proceeds from excess of deposit liabilities assumed on assets
acquired, net of cash acquired ............................. 7,223 -- --
Proceeds from sales and maturities of:
Investment securities held to maturity ..................... -- 7,000 36,526
Investment securities available for sale ...................... 126,544 109,218 11,727
Mortgage-backed securities held to maturity ................... -- 15,455 --
Mortgage-backed securities available for sale ................. 50,627 6,393 9,732
Mortgage-backed securities in trading portfolio .............. 2,764 13,496 --
Purchase of investment securities available for sale .......... (66,771) (156,036) (68,187)
Purchase of mortgage backed securities in trading portfolio ... (4,468) (20,105) (16,106)
Principal repayment on mortgage backed securities ............. 9,809 25,606 3,073
Purchase of FHLB stock ........................................ (131) (1,155) (2,248)
Net increase in loans ......................................... (324,605) (118,650) (203,262)
Purchase of premises and equipment ............................ (9,993) (2,379) (6,783)
Proceeds from sale of other real estate owned ................. 4,739 10,271 10,623
Investments in other real estate owned (net) .................. 2,276 101 315
--------- --------- ---------
Net cash used in investing activities ......................... (201,986) (110,785) (224,590)
--------- --------- ---------
FINANCING ACTIVITIES:
Net increase in deposits ...................................... 177,540 122,866 197,316
Net increase in repurchase agreements ......................... 4,282 12,301 991
Proceeds from issuance of subordinated debt ................... -- 6,000 --
Net change of minority interest in FFO ........................ 645 -- --
Proceeds from issuance of common stock ........................ 240 -- 9,166
Proceeds from issuance of minority interest in trust subsidiary 28,750 -- --
Proceeds from FHLB advances ................................... 28,000 (23,000) 8,600
Dividends on perpetual preferred stock ........................ (264) (264) (263)
--------- --------- ---------
Net cash provided by financing activities ..................... 239,193 117,903 215,810
--------- --------- ---------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS ........................................... 25,777 9,037 (2,562)
CASH AND CASH EQUIVALENTS, beginning of year .................. 53,892 44,855 47,417
--------- --------- ---------
CASH AND CASH EQUIVALENTS, end of year ........................ $ 79,669 $ 53,892 $ 44,855
========= ========= =========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during the year for interest ................... $ 47,342 $ 45,080 $ 39,376
Cash paid during the year for income taxes ............... 5,674 4,010 2,066
Noncash transactions:
Conversion of subordinated debt .......................... 5,888 -- --
Stock issued for minority interest in FFO ................ 5,307 -- --
</TABLE>
The accompanying notes are an integral part of these consolidated statements
10
<PAGE> 15
REPUBLIC BANCSHARES, INC. & SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1997
1. BUSINESS:
BASIS OF PRESENTATION AND ORGANIZATION
The consolidated financial statements of Republic Bancshares, Inc. (the Company)
include the accounts of the Company, RBI Capital Trust I, Republic Insurance
Agency, Inc., and Republic Bank (the "Bank") and the Bank's wholly-owned
subsidiaries, RBREO, Inc., Tampa Bay Equities, Inc., and VQH Development, Inc.
restated for the acquisition of FFO Financial Group, Inc. as discussed below.
All significant intercompany accounts and transactions have been eliminated. On
November 21, 1995, the Bank's Board of Directors approved for shareholder
consideration an Amended and Restated Plan of Share Exchange and Reorganization
(the "Reorganization") under which the Bank became a wholly-owned subsidiary of
Company. On the effective date and time of the Reorganization, all holders of
shares of the Bank's Common and Preferred Stock -- at the November 30, 1995,
record date -- received one share of Company Common Stock for each share of the
Bank's Common Stock held and one share of Company Preferred Stock for each share
of the Bank's Preferred Stock held. Holders of outstanding options to purchase
or acquire the Bank's Common Stock received options to purchase an equal number
of shares of Company Common Stock. All necessary governmental and shareholder
approvals for the Reorganization were received. The Company's primary source of
income is from its banking subsidiary which operates 46 branches throughout west
central Florida. The Bank's primary source of revenue is derived from net
interest income on loans and investments and income from mortgage banking
activities.
NEGATIVE GOODWILL
On May 28, 1993 (the "Purchase Date"), 99 percent of the Company's outstanding
common stock was acquired for $4,450,000 (the "Purchase Price"). Also, on May
28, 1993, 583,334 additional shares of common stock were issued for $3,500,000.
The acquisition was accounted for by the purchase method of accounting. Assets
and liabilities were adjusted based upon their fair value as of the Purchase
Date. The excess of the adjusted net book value over the Purchase Price was
recorded as a reduction of the non current assets, to the extent available. The
remaining difference was recorded as excess of fair value over purchase price
("negative goodwill").
The negative goodwill was accreted into income on a straight-line basis over 26
months beginning May 28, 1993, and ending July 31, 1995, which was based on the
estimated life of the loans, investments and deposits acquired. The premiums on
loans and investment securities and the discount on demand and other time
deposits were amortized into income on a straight-line basis over periods based
on the estimated life of the related loans, securities or deposits ranging from
12 to 30 months.
BUSINESS COMBINATIONS
Firstate Financial, F.A.
On April 18, 1997, the Company acquired Firstate Financial, F.A. ("Firstate"), a
thrift institution headquartered in Orlando, Florida, for a cash purchase of
$5.5 million. At April 18, 1997, Firstate had total assets of $71.1 million,
total deposits of $67.9 million and operated a branch in each of Orange and
Seminole counties. The acquisition was accounted for using the purchase
accounting rules which do not require prior period restatement. The amount of
goodwill recorded was $130,000. Accordingly, the consolidated results of
operations only reflect activity subsequent to the acquisition data.
F.F.O. Financial Group, Inc.
On September 19, 1997, F.F.O. Financial Group, Inc. ("FFO"), St. Cloud, Florida,
the parent company for First Federal Savings and Loan Association of Osceola
County ("First Federal"), was merged into the Company in a stock transaction
(the "FFO Merger"). William R. Hough, one of the Company's controlling
stockholders, also owned a majority interest in FFO.
11
<PAGE> 16
The FFO Merger was accounted for as a corporate reorganization in which the
controlling stockholder's interest in FFO was combined at historical cost in a
manner similar to a pooling of interests while the minority interest in FFO was
combined using purchase accounting rules. The excess of the purchase price of
the minority interest over the market value was first assigned to individual
assets and liabilities with the remaining $4.5 million considered unidentifiable
goodwill, which will be amortized over 10 years. The Company issued 1,668,370
shares of common stock to the controlling interest and 826,709 shares of common
stock to the minority interest.
The pooling of interests method of accounting, which is used to account for the
controlling interest in the FFO merger, requires the restatement of financial
results for all prior periods presented. The Company's previously reported
components of consolidated income and the amounts reflected in the accompanying
consolidated statements of operations for the two years ended December 31, 1996
and 1995, are as follows (in thousands):
<TABLE>
<CAPTION>
Years Ended December 31,
----------------------------
Net Interest Income: 1996 1995
------------ -------------
<S> <C> <C>
As previously reported:
Republic Bancshares, Inc.................................... $ 34,021 $ 27,862
F.F.O. Financial Group, Inc................................. 9,974 9,619
------------- -------------
Combined as restated........................................ $ 43,995 $ 37,481
============= =============
Net Income:
As previously reported:
Republic Bancshares, Inc.................................... $ 3,784 $ 5,777
F.F.O. Financial Group, Inc................................. 1,600 1,646
Minority interest decrease.................................. (505) (503)
------------- --------------
Combined as restated........................................ $ 4,879 $ 6,916
============= ==============
</TABLE>
RBI Capital Trust I ("RBI Capital")
RBI Capital is a wholly-owned subsidiary of the Company which was formed on May
29, 1997, to issue Cumulative Trust Preferred Securities (the "Preferred
Security or Securities") to the public. The Preferred Securities, issued through
an underwritten public offering on July 28, 1997, were sold at their $10 par
value. RBI Capital issued 2,875,000 shares of the Preferred Securities bearing a
dividend rate of 9.10% for net proceeds of $27.4 million, after deducting
underwriting commissions and other costs. RBI Capital invested the proceeds in
junior subordinated debt of the Company which also has an interest rate of
9.10%. The Company used the proceeds from the junior subordinated debt to
increase the equity capital of the Bank. Interest on the junior subordinated
debentures and distributions on the Preferred Securities are payable quarterly
in arrears, with the first payment having been paid on September 30, 1997.
Distribution on the Preferred Securities are cumulative and based upon the
liquidation value of $10 per Preferred Security. The Company has the right, at
any time, so long as no event of default has occurred and is continuing, to
defer payments of interest on the Junior Subordinated Debentures, which will
require deferral of distribution on the preferred securities, for a period not
exceeding 20 consecutive quarters, provided, that such deferral may not extend
beyond the stated maturity of the Junior Subordinated Debentures. If payments
are deferred, the Company will not be permitted to declare cash dividends. The
Preferred Securities are subject to mandatory redemption, in whole or in part,
upon repayment of the Junior Subordinated Debentures at maturity or their
earlier redemption. The Company has the right to redeem the Junior Subordinated
Debentures in whole (but not in part) within 180 days following certain events
whether occurring before or after June 30, 2002. The exercise of such right is
subject to the Company having received regulatory approval to do so if then
required under applicable capital guidelines or regulatory policies. In addition
to the above right, the Company has the right, at any time, to shorten the
maturity of the Junior Subordinated Debentures to a date not earlier than June
30, 2002. Exercise of this right is also subject to the Company having received
regulatory approval to do so if then required under applicable capital
guidelines or regulatory policies.
The Company has reported its obligation, with respect to the holders of the
Preferred Securities, as a separate line item on its audited consolidated
balance sheet under the caption "Company-obligated mandatorily redeemable
capital securities of subsidiary trust holding solely junior subordinated
debentures of the Company". The related dividend expense, net of the tax
benefit, is reported as a separate line item on the statement of operations
under the caption "minority interest in income from subsidiary trust."
12
<PAGE> 17
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
ESTIMATES, APPRAISALS AND EVALUATIONS
The financial statements include, in conformity with generally accepted
accounting principles, estimates, appraisals and evaluations of loans, other
real estate owned and other assets and liabilities, and disclosure of contingent
assets and liabilities. Changes in such estimates, appraisals and evaluations
might be required because of rapidly changing economic conditions, changing
economic prospects of borrowers and other factors. Actual results may differ
from those estimates.
INVESTMENT SECURITIES
Securities that the Company has both the positive intent and ability to hold to
maturity are classified as Held to Maturity and are carried at historical cost,
adjusted for amortization of premiums and accretion of discounts. Securities
Available for Sale, which are those securities that may be sold prior to
maturity as part of asset/liability management or in response to other factors,
are carried at fair value with any valuation adjustment reported in a separate
component of stockholders' equity, net of tax effect.
Investments identified as trading securities, include mortgage backed securities
resulting from the securitization of residential and High LTV loans, the
resulting residual interest in cash flows from those securitizations, where
applicable, and the excess spread on mortgage servicing rights. Trading
securities are carried at market value with any unrealized gains or losses
included in the statement of operations under "Gain on sale of securities, net."
Interest and dividends on investment securities and amortization of premiums and
accretion of discounts are reported in interest on investment securities. Gains
(losses) realized on sales of investment securities are generally determined on
the specific identification method and are reported as a component of other
noninterest income.
LOANS
Interest on commercial and real estate loans and substantially all installment
loans is recognized monthly on the loan balance outstanding. The Company's
policy is to discontinue accruing interest on loans 90 days or more delinquent
and restructured loans that have not yet demonstrated a sufficient payment
history, which, in the opinion of management, may be doubtful as to the
collection of interest or principal. These loans are designated as "non-accrual"
and any accrued but unpaid interest previously recorded is reversed against
current period interest revenue.
Loan origination and commitment fees net of certain costs are deferred, and the
amount is amortized as an adjustment to the related loan's yield, generally over
the contractual life of the loan. Unearned discounts and premiums on loans
purchased are deferred and amortized as an adjustment to interest income on a
basis that approximates level rates of return over the terms of the loan.
HEDGING CONTRACTS AND LOANS HELD FOR SALE
The Company manages its interest rate market risk on the loans held for sale and
its estimated future commitments to originate and close mortgage loans for
borrowers at fixed prices ("Locked Loans") through hedging techniques which
include listed options and fixed price forward delivery commitments ("Forward
Commitments") to sell mortgage-backed securities or specific whole loans to
investors on a mandatory or best efforts basis. The Company records the
inventory of loans held for sale at the lower of cost or market on an aggregate
basis after considering any market value changes in the loans held for sale,
Locked Loans, and Forward Commitments.
MORTGAGE SERVICING RIGHTS
On July 1, 1995, SFAS No. 122, "Accounting for Mortgage Servicing Rights, an
amendment of FASB Statement No. 65," was adopted. SFAS No. 122 permits an
allocation of a portion of the cost of loan origination to the rights to service
mortgage loans. Approximately $5.5 million, $1.9 million, and $117,000 was
capitalized relating to mortgage servicing rights ("MSRs") during 1997, 1996 and
1995, respectively. Also included in the balance of mortgage servicing rights is
approximately $225,000 of rights acquired through the Firstate acquisition. As
of December 31, 1997, 1996 and 1995, the unamortized portion of these MSRs were
13
<PAGE> 18
$7.1 million, $2.0 million, and $113,000, respectively. For purposes of
measuring impairment, MSRs are stratified based on the loan type, interest rate
and maturity of the underlying loans.
ACCOUNTING FOR TRANSFERS AND SERVICING OF FINANCIAL ASSETS AND EXTINGUISHMENT OF
LIABILITIES
The FASB has issued SFAS No. 125, "Accounting for Transfers and
Servicing of Financial Assets and Extinguishment of Liabilities," which was
effective for the Company's fiscal year beginning January 1, 1997. SFAS 125
provides standards for distinguishing transfers of financial assets that are
sales from transfers that are secured borrowings. In addition to providing
further guidance related to the recording of mortgage servicing rights, SFAS 125
required that the Company classify loans held for sale which are securitized and
retained in the Company's portfolio, residual interest retained and excess
spread interest only strip receivable as trading assets. As a result, the
Company is required to carry these assets at their current market value as of
the balance sheet date with the resulting valuation adjustment recorded in the
statement of operations.
The Company uses an automated portfolio analysis system to value its mortgage
servicing rights at the individual loan level. The model uses current market
assumptions to determine default probabilities and prepayment speed assumptions
based upon current factors to include interest rate, age, loan type, geography
and demographic factors. The automated foreclosure probabilities also take into
consideration the regional, demographic and behavorial characteristics. These
factors are applied to each loan based on its own individual characteristics.
The following table shows the amount of servicing assets which were capitalized
and amortized, and the fair value of those assets as of December 31, for the
periods indicated (dollars in thousands):
<TABLE>
<CAPTION>
1997 1996 1995
------- ------- -----
<S> <C> <C> <C>
Balance, beginning of year $ 1,968 $ 113 $ --
Rights acquired through Firstate acquisition 225 -- --
Capitalized servicing assets 5,504 1,923 117
Amortization (572) (68) (4)
------- ------- -----
Balance, end of year $ 7,125 $ 1,968 $ 113
======= ======= =====
Fair Value of assets $ 7,505 $ 2,289 $ 113
======= ======= =====
</TABLE>
During December, 1997, the Company completed a securitization of $60 million of
High LTV home equity loans. The assets were sold to Republic Bank Home Loan
Owner Trust 1997-1 and the trust then issued $57.6 million of asset backed notes
and certificates. As part of that transaction the Company recorded $5.7 million
of residual interest on these securities. The calculation used to determine the
value of the residual interest assumed a 14% discount rate, a default rate of
2.25%, and a prepayment rate ranging from 12% through 15%.
ALLOWANCE FOR LOAN LOSSES
The allowance for loan losses provides for risks of losses inherent in the
credit extension process. Losses and recoveries are either charged or credited
to the allowance. The Company's allowance is an amount that management believes
will be adequate to absorb possible losses on existing loans that may become
uncollectible, based on evaluations of the collectibility of loans and prior
loan loss experience. The evaluations take into consideration such factors as
changes in the nature and volume of the loan portfolio, overall portfolio
quality, review of specific problem loans, and current economic conditions that
may affect the borrower's ability to pay. The evaluations are periodically
reviewed and adjustments are recorded in the period in which changes become
known.
ACCOUNTING FOR IMPAIRMENT OF LOANS
The Company's measurement of impaired loans includes those loans which are
nonperforming and have been placed on non-accrual status and those loans which
are performing according to all contractual terms of the loan agreement but may
have substantive indication of potential credit weakness. As of December 31,
1997, $22.8 million of loans were considered impaired by the Company.
Approximately $16.0 million of these loans required valuation allowances,
totaling $2.8 million, which are included within the overall allowance for loan
losses at December 31, 1997. Residential mortgages and consumer loans and leases
outside the scope of
14
<PAGE> 19
SFAS 114 are collectively evaluated for impairment.
As of December 31, 1996, $19.2 million of loans were considered impaired by the
Company. Approximately $16.9 million of these loans required valuation
allowances, totaling $2.9 million, which were included within the overall
allowance for loan losses at December 31, 1996.
PREMISES AND EQUIPMENT
Premises and equipment are stated at cost, less accumulated depreciation and
amortization. Depreciation and amortization are computed using the straight-line
method over the estimated useful lives of the related assets, except for
leasehold improvements for which the lesser of the estimated useful life of the
asset or the term of the lease is used. The useful lives used in computing
depreciation and amortization are as follows:
<TABLE>
<CAPTION>
YEARS
-----
<S> <C>
Buildings and improvements 39
Furniture and equipment 7
Leasehold improvements 5 - 15
</TABLE>
Gains and losses on routine dispositions are reflected in current operations.
Maintenance, repairs and minor improvements are charged to operating expenses,
and major replacements and improvements are capitalized.
OTHER REAL ESTATE
Other real estate owned ("ORE") represents property acquired through foreclosure
proceedings held for sale and real estate held for investment. ORE is net of a
valuation allowance established to reduce cost to fair value. Losses are charged
to the valuation allowance and recoveries are credited to the allowance.
Declines in market value and gains and losses on disposal are reflected in
current operations in ORE expense. Recoverable costs relating to the development
and improvement of ORE are capitalized whereas routine holding costs are charged
to expense. The sales of these properties are dependent upon various market
conditions. Management is of the opinion that such sales will result in net
proceeds at least equal to present carrying values.
ACCOUNTING FOR IMPAIRMENT OF LONG-LIVED ASSETS
The FASB issued SFAS No. 121, "Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to be Disposed of," which was effective for the
Company's fiscal year beginning January 1, 1996. SFAS No. 121 requires that
long-lived assets and certain identifiable intangibles to be held and used be
reviewed for impairment whenever events or changes in circumstances indicate the
carrying amount of an asset may not be recoverable. If the sum of the expected
future cash flows from the use of the asset and its eventual disposition is less
than the carrying amount of the asset, an impairment loss is recognized. SFAS
No. 121 also requires that certain assets to be disposed of be measured at the
lower of carrying amount or the net realizable value. The impact of adopting
SFAS No. 121 upon the results of operations of the Company was not material.
EARNINGS PER SHARE
In February 1997, the FASB issued SFAS No. 128, "Earnings Per Share," SFAS No.
128 simplifies the method for computing and presenting earnings per share
("EPS") previously required by APB Opinion No. 15, "Earnings Per Share", and
makes them comparable to international EPS standards. SFAS No. 128 is effective
for periods ending after December 15, 1997, and requires restatement of all
prior period EPS data and has been implemented by the Company. It replaces the
presentation of primary EPS with a presentation of basic EPS. It also requires
dual presentation of basic and diluted EPS on the face of the income statement
for all entities with complex capital structures and requires a reconciliation
of the numerator and denominator of the basic EPS computation to the numerator
and denominator of the diluted EPS computation.
15
<PAGE> 20
REPORTING COMPREHENSIVE INCOME
In June 1997, the FASB issued SFAS No. 130, "Reporting Comprehensive Income,"
SFAS No. 130 establishes standards for reporting and display of comprehensive
income. A specific reporting format is not required, provided the financial
statements show the amount of total comprehensive income for the period. Those
items which are not included in net income are required to be shown in the
financial statements with appropriate footnote disclosure and the aggregate
balance of such items must be shown separately from retained earnings and
additional paid-in-capital in the equity section of the balance sheet. SFAS No.
130 is effective for fiscal years beginning after December 15, 1997.
Reclassification of financial statements for earlier periods is required. SFAS
No. 130 will have no material effect on the Company's financial statements.
DISCLOSURES ABOUT BUSINESS SEGMENTS
In June 1997, the FASB adopted SFAS No. 131, "Disclosures About Segments of an
Enterprise and Related Information." SFAS No. 131 establishes standards for the
way the Company reports information about operating segments in annual financial
statements and requires reporting of selected information about operating
segments in interim financial reports. SFAS No. 131 is effective for periods
beginning after December 15, 1997. Management has implemented SFAS No. 131 in
the year ended December 31, 1997, and believes its commercial banking and
mortgage banking activities constitute operating segments which require
additional disclosure about their respective assets, revenues, profit or loss
and other operating data.
DISCLOSURES ABOUT PENSIONS AND OTHER POST-RETIREMENT BENEFITS
In February 1998, the FASB issued SFAS No. 132 "Employers' Disclosure about
Pensions and Other Retirement Benefits," (SFAS No. 132). SFAS No. 132 revises
the disclosure requirements for employees' pensions and other post-retirement
benefit plans. SFAS No. 132 is effective for fiscal years beginning after
December 15, 1997, earlier application is encouraged. Management has implemented
SFAS No. 132 in the year ended December 31, 1997.
INCOME TAXES
The Company follows the liability method which establishes deferred tax assets
and liabilities for the temporary differences between the financial reporting
bases and the tax bases of the Company's assets and liabilities at enacted tax
rates expected to be in effect when such amounts are realized or settled. Net
deferred tax assets, whose realization is dependent on taxable earnings of
future years, are recognized when a more-likely-than-not criterion is met, that
is, unless a greater than 50% probability exists that the tax benefits will not
actually be realized sometime in the future.
Effective April 1, 1995, federal regulations restricted the amount of deferred
tax assets that can be used to meet regulatory capital requirements to an amount
that the institution expects to realize within one year, or 10% of Tier 1
capital, whichever is less.
The Company and its subsidiaries file consolidated tax returns with the federal
and state taxing authorities. A tax sharing agreement exists between the Company
and its subsidiaries whereby taxes for the subsidiaries are computed as if the
subsidiaries were separate entities. Amounts to be paid or credited with respect
to current taxes are paid to or received from the Company.
PREMIUM ON DEPOSITS
A premium on deposits is recorded for the difference between cash received and
the carrying value of deposits acquired in purchase transactions. This premium
is being amortized on a straight-line basis over three to four years.
Approximately $202,000 and $527,000 was included in other assets in the
accompanying financial statements, as of December 31, 1997, and 1996.
STOCK-BASED COMPENSATION PLANS
The Company accounts for its stock-based compensation plans under Accounting
Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees".
Effective in 1996, the Company adopted the disclosure option of SFAS No. 123,
"Accounting for Stock-Based Compensation" (SFAS No. 123), which requires that
companies not electing to account for stock-based compensation as prescribed by
the statement, disclose the pro forma effects on earnings and earnings per share
as if SFAS No. 123 had been adopted. Additionally, certain other disclosures are
required with respect to stock compensation and the assumptions used are to
determine the pro forma effects of SFAS No. 123.
16
<PAGE> 21
CASH EQUIVALENTS
For purposes of preparing the Consolidated Statements of Cash Flows, cash
equivalents are defined to include cash and due from banks, interest-bearing
deposits in banks, and federal funds sold.
RECLASSIFICATIONS
Certain reclassifications have been made to prior period financial statements to
conform with the 1997 financial statement presentation.
3. INVESTMENT SECURITIES:
The Company's investment securities consisted primarily of U.S. Treasury Bills,
Notes, and Agencies. The investment securities of the Company at December 31,
1997 and 1996, are summarized as follows (in thousands):
<TABLE>
<CAPTION>
Amortized Unrealized Unrealized Market
Cost Gains Losses Value
---- ----- ------ -----
<S> <C> <C> <C> <C>
AT DECEMBER 31, 1997:
Available-for-sale securities:
U.S. Government Treasuries ................ $10,512 $ 9 $ -- $10,521
U.S. Agencies ............................. 4,000 14 -- 4,014
Revenue bond ............................. 1,545 -- -- 1,545
------- -------- ----------- -------
Total U.S. Treasuries & Federal Agency Notes $16,057 $ 23 $ -- $16,080
======= ======== =========== =======
AT DECEMBER 31, 1996:
Available-for-sale securities:
U.S. Government Treasuries ................ $72,905 $ -- $ (53) $72,852
Revenue Bond .............................. 1,545 -- -- 1,545
------- -------- ----------- -------
Total available for sale ................ 74,450 -- (53) 74,397
Trading securities:
U.S. Agencies ............................. 4,000 32 -- 4,032
------- -------- ----------- -------
Total U.S. Treasuries & Federal Agency Notes $78,450 $ 32 $ (53) $78,429
======= ======== =========== =======
</TABLE>
<TABLE>
<CAPTION>
1997 1996
---- ----
<S> <C> <C>
BOOK VALUE AT DECEMBER 31:
Available-for-sale securities: $ 16,080 $ 74,397
Trading Securities .............................. -- 4,032
--------- ---------
Total U.S. Treasuries & Federal Agency Notes..... $ 16,080 $ 78,429
========= =========
</TABLE>
The amortized cost and estimated market value of investment securities at
December 31, 1997, by contractual maturity are shown below (in thousands):
<TABLE>
<CAPTION>
Available-for-Sale
--------------------------------
Estimated Weighted
Amortized Market Average
Cost Value Yield
--------- --------- --------
<S> <C> <C> <C>
Due in 1 year or less .............. $10,512 $10,521 5.68%
Due after 1 year through 5 years ... 1,545 1,545 8.60
Due after 5 years .................. 4,000 4,014 7.45
------- -------
Total .............................. $16,057 $16,080 6.40%
======= =======
</TABLE>
Proceeds from sales of U.S. Treasury and Federal Agency Notes during the years
ended 1997, 1996 and 1995, were $55,092,000, $7,545,000, and $2,972,000,
respectively. Gross losses of $7,109, $0, and $27,891 were realized for the
years ended December 31, 1997, 1996 and 1995. Gross gains of $193,218, $45,404,
and $0,
17
<PAGE> 22
The trading asset category at December 31, 1997, included $2.1 million in excess
spread on mortgage servicing rights, $8.7 million of securities purchased from
the Company's securitization of High LTV Loans in December 1997 and the $8.2
million residual interest in cash flows from that securitization. The Company
has recorded these assets at what it believes to be their fair market value,
however, there is no ready market for residuals in cash flows from
securitization of High Loan-to-Value Loans.
At December 31, 1997, all MBS securities available for sale were scheduled to
reprice in one year or less. The amortized cost and estimated market value of
the MBS portfolio at December 31, 1997, by contractual maturity are shown below
(in thousands). Actual maturities may differ from contractual maturities as a
result of prepayments of the underlying mortgages:
<TABLE>
<CAPTION>
Amortized Estimated Weighted
Cost Market Average
---- Value Yield
--------- --------
<S> <C> <C> <C>
Due 5 - 10 years..................................... $ 716 $ 724 7.39%
Due after 10 years................................... 90,570 91,789 6.86%
------------ ---------
Total................................................ $ 91,286 $ 92,513 6.87%
============ =========
</TABLE>
Proceeds from sales of MBS securities during the years ended December 31, 1997,
1996 and 1995 were $59,111,000, $47,750,000 and $17,487,000, respectively. Gross
gains of $359,511, $495,837 and $130,038 and gross losses of $1,890, $85,845 and
$9,000, respectively, were realized on these sales. Mortgage backed securities
with a par value of $29.3 million and a market value of $30.0 million were
pledged to secure repurchase agreements at December 31, 1997.
5. LOANS AND LOANS HELD FOR SALE:
Loans and loans held for sale at December 31, 1997 and 1996, are summarized as
follows (in thousands):
<TABLE>
<CAPTION>
1997 1996
---- ----
<S> <C> <C>
Real estate mortgage loans:
One-to-four family residential .......................................... $ 644,235 $ 494,955
Multi-family residential ................................................ 86,835 90,745
Commercial real estate .................................................. 265,153 224,715
Construction/land development ........................................... 50,203 42,206
Home equity loans ....................................................... 44,389 23,622
Commercial loans ........................................................ 36,515 37,626
Consumer loans .......................................................... 26,072 21,845
Other loans ............................................................. 442 1,294
----------- ---------
Total gross portfolio loans ............................................. 1,154,031 937,008
Less-allowance for loan losses .......................................... (20,776) (18,747)
Less-undisbursed loans in process ....................................... -- (10,824)
Less-premiums and unearned discounts on loans purchased ................. (3,273) (4,731)
Less-unamortized loan fees .............................................. (1,027) (671)
----------- ---------
Total loans held for portfolio .......................................... 1,128,955 902,035
Residential loans held for sale ......................................... 151,404 46,593
----------- ---------
Total loans ............................................................. $ 1,280,359 $ 948,628
=========== =========
</TABLE>
Mortgage loans serviced for others as of December 31, 1997 and 1996, were
$370,106,000 and $224,311,000, respectively. Loans on which interest was not
being accrued totaled approximately $26,959,000, $19,409,000, and $16,229,000 at
December 31, 1997, 1996 and 1995, respectively. Had interest been accrued on
these loans at their originally contracted rates, interest income would have
been increased by approximately $2,138,000, $1,661,000, and $1,729,000 in the
years ended December 31, 1997, 1996 and 1995, respectively. Loans past due 90
days or more and still accruing interest at December 31, 1997 and 1996, totaled
approximately $196,000
19
<PAGE> 23
and $113,000, respectively. The Company restructured loans totaling $0 and
$2,516,000 during 1997 and 1996, respectively.
6. ALLOWANCE FOR LOAN LOSSES:
Changes in the allowance for loan losses were as follows (in thousands):
<TABLE>
<CAPTION>
For the Years Ended December 31,
----------------------------------
1997 1996 1995
---- ---- ----
<S> <C> <C> <C>
BALANCE, beginning of year ............. $ 18,747 $ 20,048 $ 15,272
Provision for possible loan losses ....... 2,628 2,582 2,162
Allowance from Firstate acquisition ...... 132 -- --
Discount on purchased loans allocated
to (from) allowance for loan losses ...... 39 (1,732) 7,658
Loans charged off ........................ (1,003) (2,448) (5,536)
Recoveries of loans charged off .......... 223 297 492
-------- -------- --------
BALANCE, end of year ................... $ 20,776 $ 18,747 $ 20,048
======== ======== ========
</TABLE>
While management believes that the allowance for loan losses is adequate at
December 31, 1997, based on currently available information, future additions to
the allowance may be necessary due to changes in economic conditions,
deterioration of creditworthiness of the borrower, the value of underlying
collateral or other factors. Additionally, the Florida Department of Banking and
Finance, the FDIC, and the Federal Reserve, as an integral part of their regular
examination process, periodically review the allowance for loan losses. These
agencies may require additions to the allowance based on their judgments about
information available to them at the time of examination.
The portion of the allowance for loan losses which arose due to the allocation
of discounts on purchased loans may only be used to absorb losses on the related
acquired loans. As of December 31, 1997 and 1996, approximately $6,197,000 and
$7,150,000 of the allowance had arisen through an allocation of discounts on
purchased loans.
7. PREMISES AND EQUIPMENT:
Premises and equipment at December 31, 1997 and 1996, included (in thousands):
<TABLE>
<CAPTION>
1997 1996
-------- --------
<S> <C> <C>
Land ............................................. $ 7,202 $ 6,249
Buildings and improvements ....................... 19,354 14,370
Furniture and equipment .......................... 16,008 12,634
Leasehold improvements ........................... 2,279 1,051
Construction in progress ......................... 1,137 268
-------- --------
Total premises and equipment ..................... 45,980 34,572
Less-accumulated depreciation and amortization ... (12,677) (9,533)
-------- --------
Premises and equipment, net ...................... $ 33,303 $ 25,039
======== ========
</TABLE>
20
<PAGE> 24
<TABLE>
<CAPTION>
BOOK VALUE AT DECEMBER 31: 1997 1996
-------- --------
<S> <C> <C>
Held to maturity securities.......................... $ -- $ 15,343
Available for sale securities........................ 55,467 62,037
Trading securities................................... 37,046 5,548
Total MBS....................................... $ 92,513 $ 82,928
======== ========
</TABLE>
<PAGE> 25
were realized during the years ended December 31, 1997, 1996 and 1995,
respectively. U.S. Treasuries and Federal Agency Notes with a par value of
$10,500,000 and $19,000,000 at December 31, 1997 and 1996, respectively, were
pledged to secure public deposits and for other purposes. Net unrealized holding
gains on trading securities of $764,000, $26,000, and $101,000 were included in
income during 1997, 1996, and 1995, respectively.
4. MORTGAGE-BACKED SECURITIES:
Mortgage-backed securities ("MBS"), sometimes referred to as pass-through
certificates, represent an interest in a pool of loans. The securities are
issued by three government agencies or corporations: (i) the Government National
Mortgage Association ("GNMA"), (ii) the Federal Home Loan Mortgage Corporation
("FHLMC") and (iii) the Federal National Mortgage Association ("FNMA"). During
1997 and 1996 the Company securitized loans with a carrying value of $17,923,000
and $6,282,000, respectively. MBS securities held to maturity are recorded at
amortized cost, while securities available-for-sale and trading are recorded at
estimated market value. Mortgage-backed securities are summarized as follows (in
thousands):
<TABLE>
<CAPTION>
AMORTIZED UNREALIZED UNREALIZED MARKET
GAINS GAINS LOSSES VALUE
------- ------- -------- --------
<S> <C> <C> <C> <C>
At December 31, 1997:
- ---------------------
Available for sale securities:
GNMA securities ............................ $41,395 $ 648 $ -- $ 42,043
FHLMC securities ........................... 5,963 -- (9) 5,954
FNMA securities ............................ 6,644 104 (2) 6,746
Other MBS securities ....................... 716 8 -- 724
------- -------- -------- --------
Total MBS available for sale .......... $54,718 $ 760 $ (11) $ 55,467
======= ======== ======== ========
Trading securities:
GNMA securities ............................ $16,346 $ 478 $ -- $ 16,824
FNMA Title 1 securities .................... 1,200 -- -- 1,200
Republic Bank Owner Trust 1997-1 M2 ........ 4,350 -- -- 4,350
Republic Bank Owner Trust 1997-1 B ......... 4,350 -- -- 4,350
Republic Bank Owner Trust 1997-1-
Overcollateralization ...................... 2,400 -- -- 2,400
Residual interest .......................... 5,845 -- -- 5,845
Excess spread interest only strip receivable 2,077 -- -- 2,077
------- -------- -------- --------
Total MBS trading securities ............... $36,568 $ 478 $ -- $ 37,046
======= ======== ======== ========
AT DECEMBER 31, 1996:
Available for sale securities:
Mortgage-backed securities ................. $61,560 $ 108 $ (219) $ 61,449
Collateralized mortgage backed
obligations ................................ -- -- -- --
Excess spread interest only strip receivable 588 -- -- 588
------- -------- -------- --------
Total MBS available for sale ............... $62,148 $ 108 $ (219) $ 62,037
======= ======== ======== ========
Trading Securities:
Mortgage-backed securities ................. $ -- $ -- $ -- $ --
Collateralized mortgage backed
obligations ................................ 5,554 -- (6) 5,548
Excess spread interest only strip receivable -- -- -- --
------- -------- -------- --------
Total MBS trading securities ............... $ 5,554 $ -- $ (6) $ 5,548
======= ======== ======== ========
Held to maturity securities:
Mortgage-backed securities ................. $15,343 $ 218 $ (47) $ 15,514
Collateralized mortgage backed
obligations ................................ -- -- -- --
Excess spread interest only strip receivable -- -- -- --
------- -------- -------- --------
Total MBS securities held to maturity ...... $15,343 $ 218 $ (47) $ 15,514
======= ======== ======== ========
</TABLE>
<TABLE>
<CAPTION>
1997 1996
-------- --------
<S> <C> <C>
BOOK VALUE AT DECEMBER 31:
Held to maturity securities.......................... $ -- $ 15,343
Available for sale securities........................ 55,467 62,037
Trading securities................................... 37,046 5,548
-------- --------
Total MBS....................................... $ 92,513 $ 82,928
======== ========
</TABLE>
18
<PAGE> 26
8. OTHER REAL ESTATE (ORE):
State banking regulations require the Company to dispose of all ORE acquired
through foreclosure within five years of acquisition, with a possibility for
additional extensions, each of up to five years. Failure to receive additional
extensions could result in losses on ORE. There were three ORE properties
totaling approximately $3,451,000 at December 31, 1997, which were required to
be disposed of by year end. The Company has been granted an extension on these
properties by the State of Florida. The largest piece of these properties is a
tract of land carried at $2.6 million acquired through foreclosure in 1988 that
has partially been developed as a shopping center site. The FDIC has also
granted an extension of the holding period on this property. The Bank currently
has a firm commitment to sell a substantial portion of the second largest
property, with a book value of approximately $597,000, for an amount in excess
of the current book value. While the current appraisal on this property
indicates that the market value of the tract exceeds its book value, a sale to a
party other than an end-user could result in proceeds below the current book
value.
During 1995, the former headquarter building was vacated and that space was
leased to a third party. Since that building was no longer used for banking
purposes, approximately $2,498,000 was transferred from premises and equipment
to ORE held for investment. During 1996, this building was sold and a gain of
$1,207,000 was recorded.
Loans converted to ORE through foreclosure proceedings totaled $6,471,000, and
$7,249,000, for the years ended December 31, 1997 and 1996, respectively. Sales
of ORE that were financed by the Company totaled $113,000 and $6,572,000 for the
years ended December 31, 1997 and 1996, respectively.
Changes in the valuation allowance for ORE were as follows (in thousands):
<TABLE>
<CAPTION>
For the Years Ended December 31,
--------------------------------
1997 1996 1995
---- ---- ----
<S> <C> <C> <C>
BALANCE, beginning of year .................... $ 2,672 $ 2,090 $ 4,043
Provision ..................................... 530 111 240
Charge-offs, net .............................. 77 471 (2,193)
------- ------- -------
BALANCE, end of year .......................... $ 3,279 $ 2,672 $ 2,090
======= ======= =======
</TABLE>
9. INCOME TAXES:
Income taxes are comprised of the following (in thousands):
<TABLE>
<CAPTION>
For the Years Ended December 31,
--------------------------------
1997 1996 1995
---- ---- ----
<S> <C> <C> <C>
Current provision ............................. $ 7,991 $ 3,728 $ 2,528
Deferred benefit .............................. (1,895) (693) (12)
------- ------- -------
$ 6,096 $ 3,035 $ 2,516
</TABLE>
At December 31, 1997, the Company had approximately $7,061,000 of remaining
federal and $8,784,000 of state net operating loss carryforwards. These
carryforwards expire in the years 2005 through 2012.
Following the change of ownership in 1993, and the two acquisitions in 1997,
recognition of net operating loss carryforwards are limited to approximately
$571,000 each year under the rules of IRC Section 382. If the full amount of the
limitation is not used in any years, the amount not used increases the allowable
limit in the subsequent year.
21
<PAGE> 27
Deferred tax assets and liabilities were comprised of the following at December
31, 1997 and 1996 (in thousands):
<TABLE>
<CAPTION>
1997 1996
---- ----
<S> <C> <C>
Gross deferred tax assets:
Tax bases over financial bases for loans ................... $ 6,091 $ 3,643
(loan loss allowance and discounts)
Financial amortization of premium over tax amortization .... 701 646
Interest on non-accrual loans .............................. 522 452
Tax bases over financial bases for ORE ..................... 1,516 1,346
Net operating losses and tax credit carryforward ........... 2,717 2,039
Mark-to-market-loans held for sale ......................... 1,268 232
Other ...................................................... 457 149
-------- --------
Gross deferred tax asset ................................ 13,272 8,507
Gross deferred tax liabilities .......................... (3,315) (2,318)
-------- --------
Net deferred tax asset .................................. $ 9,957 $ 6,189
======== ========
</TABLE>
There were no valuation allowances against the deferred tax asset as management
has determined that it is more likely than not that all of the deferred tax
asset recorded will be realized. The net deferred tax asset increased during
1997 and 1996 by approximately $352,000 and $63,000, respectively, relating to
the unrealized gain on available for sale securities which is recorded directly
to stockholders' equity.
Through the merger of FFO, the Company acquired an unrecognized deferred tax
liability of approximately $2,700,000 related to base year reserves calculated
under the thrift bad debt percentage method. If during any taxable year, the
Company ceases to be a bank, these reserves shall be taken into account ratably
over the six taxable year period beginning with such taxable year.
The Company's effective tax rate varies from the statutory rate of 34%. The
reasons for this difference are as follows (in thousands):
<TABLE>
<CAPTION>
For the Years Ended December 31,
--------------------------------
1997 1996 1995
---- ---- ----
<S> <C> <C> <C>
Computed "expected" tax provision ............. $ 5,454 $ 2,862 $3,37
Increase (reduction) of taxes: ................ (20) (22) (27)
Tax-exempt interest income
Valuation allowance ........................... -- -- (355)
Goodwill amortization ......................... 122 -- --
Amortization of excess of fair ................ -- -- (536)
value over purchase price
State taxes ................................... 578 304 298
Other ......................................... (38) (109) (241)
------- ------- -------
Total ......................................... $ 6,096 $ 3,035 $ 2,516
======= ======= =======
</TABLE>
10. OTHER BORROWINGS:
At December 31, 1997, the Company was required by its collateral agreement with
the FHLB to maintain qualifying first mortgage loans in an amount equal to at
least 100% of the FHLB advances outstanding as collateral. The FHLB advances at
December 31, 1997 and 1996, were collateralized by such loans and securities
totaling $35.0 million and $32.2 million, respectively. In addition, all of the
Company's FHLB stock is pledged as collateral for such advances.
22
<PAGE> 28
Maturities and average interest rates of advances from the FHLB as of December
31, 1997 and 1996, were as follows (in thousands):
<TABLE>
<CAPTION>
Maturities in
Year Ending Weighted Balance at
December 31, Average Rate December 31,
------------ ------------ ----------------------
1997 1996
----------------------
<S> <C> <C> <C>
1997 6.95% $ - $7,000
1998 6.50 35,000 -
------- ------
TOTAL $35,000 $7,000
------- ------
</TABLE>
On December 27, 1996, the Company issued $6,000,000 in convertible subordinated
debentures at a fixed interest rate of 6.00%, interest payable semi-annually,
with a maturity of December 1, 2011. The Company had the right to redeem the
debentures beginning in 2001 at 106% of face value, with the premium declining
1% per year thereafter and without any premium if the price of the Company's
common stock equals or exceeds 130% of the conversion price for not less than 20
consecutive trading days. During 1997, the Company's common stock exceeded 130%
of the conversion price of $17.85714 for more than 20 consecutive days. As a
result, the Company notified the trustee of its intention to redeem the
debentures as of December 1, 1997. All of the holders converted their debentures
prior to this date into a total of 336,000 shares of common stock.
11. OFF-BALANCE-SHEET RISK, COMMITMENTS AND CONTINGENCIES:
CONCENTRATION OF CREDIT RISK
The Company's core customer loan origination base is located along the west
coast and in central Florida. The majority of the Company's purchased loan
portfolio is concentrated in the states of Florida, California, Texas, and in
the northeastern United States. At December 31, 1997 and 1996, approximately 95%
and 94%, respectively, of the Company's loan portfolio was secured by real
estate. Mortgage loans secured by 1-4 family properties comprised approximately
56% and 53%, respectively, of total mortgage loans at December 31, 1997 and
1996.
OFF-BALANCE-SHEET ITEMS
The Company enters into financial instruments with off-balance-sheet risk in the
normal course of business to meet the financing needs of its customers and to
limit exposure to changes in the value of loans held for sale. These financial
instruments include commitments to extend credit, commercial and standby letters
of credit, and forward contracts for the delivery of loans. These instruments
involve, to varying degrees, elements of credit and interest-rate risk that are
not recognized in the accompanying consolidated balance sheets.
The Company's exposure to credit loss in the event of nonperformance by the
other party to the financial instruments discussed above is represented by the
contractual amount of those instruments. The Company uses the same credit
policies in making commitments and conditional obligations as it does for
on-balance-sheet instruments.
A summary of financial instruments with off-balance-sheet risk at December 31,
1997, is as follows (in thousands):
<TABLE>
<CAPTION>
Contractual
Amount
-----------
<S> <C>
Commitments to extend credit............................ $ 76,698
Unfunded lines of credit................................ 156,013
Commercial and standby letters of credit................ 12,168
--------
Total.............................................. $244,879
========
</TABLE>
Commitments to extend credit are agreements to lend to a customer as long as
there is no violation of any condition established in the agreement. Commitments
generally have fixed expiration dates or other termination clauses and may
require payment of a fee. Since many of the commitments are expected to expire
without being drawn upon, the total commitment amounts do not necessarily
represent future cash requirements. The
23
<PAGE> 29
Company evaluates each customer's creditworthiness on a case-by-case basis. The
amount of collateral obtained if deemed necessary upon extension of credit is
based on management's credit evaluation of the counter party. Collateral held
varies but may include premises and equipment, inventory and accounts
receivable. Unfunded lines of credit represent the undisbursed portion of lines
of credit which have been extended to customers.
Commercial and standby letters of credit are conditional commitments issued by
the Company to guarantee the performance of a customer to a third party which
typically do not extend beyond one year. The credit risk involved in issuing
letters of credit is essentially the same as that involved in extending loan
facilities to customers. The Company typically holds certificates of deposit as
collateral supporting those commitments, depending on the strength of the
borrower. Outstanding unsecured standby letters of credit at December 31, 1997,
totaled approximately $3,269,000.
At December 31, 1997, in connection with managing the interest rate market risk
on its loans held for sale of $151,404,000 and locked loans (without
consideration for any fallout) of $56,097,000, the Company had outstanding
$32,040,000 (estimated fair value of $31,910,000) of Forward Commitments which
expire over the next two months, the period when the loans are expected to be
sold and locked loans are expected to close.
The Company reduces its risk of nonperformance under the hedging contracts by
entering into those contracts with reputable security dealers and investors and
evaluating their financial condition. However, there is a risk that certain of
the locked loans do not close or are renegotiated in a declining interest rate
market and close at lower prices. The Company reduces this risk by collecting
nonrefundable commitment fees on certain of the locked loans and enters into
forward commitments to deliver loans to investors primarily on a best efforts
basis.
COMMITMENTS
The Company has entered into a number of noncancelable operating leases
primarily for branch banking locations. At December 31, 1997, minimum rental
commitments based on the remaining noncancelable lease terms were as follows (in
thousands):
<TABLE>
<S> <C>
1998................................................. $ 3,077
1999................................................. 2,895
2000................................................. 2,403
2001................................................. 2,197
2002................................................. 1,891
Thereafter........................................... -
------
Gross operating lease commitments............... 12,463
Less-sublease rentals................................ (1,60)
Net operating lease commitments................. $10,843
=======
</TABLE>
Total rent expense for the years ended December 31, 1997, 1996 and 1995, was
$2,546,000, $2,031,000, and $1,372,000, respectively. Total rental income from
subleases for the years ended December 31, 1997, 1996 and 1995, was $582,000,
$1,031,000, and $1,190,000, respectively.
During 1994 a capital lease obligation of approximately $981,000 was incurred
related to the leasing of data processing equipment with an implicit rate of
7.49%. Minimum lease payments under this capital lease are approximately
$214,000 in 1998 and $107,000 in 1999. In addition, the Company is obligated to
make processing payments in relation to its computer facilities of approximately
$1,545,000 in 1998, $1,653,000 in 1999, $1,759,000 in 2000, and $293,000 in
2001.
CONTINGENCIES
The Company is subject to various other legal proceedings and claims which arise
in the normal course of business. In the opinion of management, the amount of
liability with respect to these other proceedings would not have a material
effect on the financial statements.
24
<PAGE> 30
12. EMPLOYEE BENEFIT PLANS:
On January 1, 1987, a retirement plan was adopted, covering substantially all
employees, which includes a 401(k) arrangement. The Company's contributions were
$437,200, $186,900, and $107,200 in the years ended December 31, 1997, 1996 and
1995, respectively.
13. FAIR VALUE OF FINANCIAL INSTRUMENTS:
Generally, the Company's practice and intent is to hold its financial
instruments to maturity, unless otherwise designated. Where available, quoted
market prices are used to determine fair value. However, many of the Company's
financial instruments lack quoted market prices. Although the Company has
incorporated what it considers to be appropriate estimation methodologies for
those financial instruments which lack quoted market prices, a significant
number of assumptions must be used in determining such estimated fair values.
Such assumptions include subjective assessments of current market conditions,
perceived risks associated with these financial instruments and other factors.
Different assumptions might be considered by the user of the financial
statements to be more appropriate, and the use of alternative assumptions or
estimation methodologies could have a significant effect on the resulting
estimated fair values. The estimated fair values presented neither include nor
give effect to the values associated with the Company's business, existing
customer relationships, and branch banking network, among other things.
The following estimates of the fair value of certain financial instruments held
by the Company include only instruments that could reasonably be evaluated. The
investment and mortgage backed securities portfolio was evaluated using market
quotes, where available, or fair market value calculations as of December 31,
1997 and 1996. The fair value of the loan portfolio was evaluated using market
quotes for similar financial instruments, where available. Otherwise, discounted
cash flows at current market, after adjusting for credit deterioration and an
average prepayment assumption, were used based upon current rates the Company
would use in extending credit with similar characteristics. These rates may not
necessarily be the same as those which might be used by other financial
institutions for similar loans. Cash and due from banks and federal funds sold
were valued at cost. The fair values disclosed for checking accounts, savings
accounts, securities sold under agreements to repurchase, and certain money
market accounts are, by definition, equal to the amount payable on demand at the
reporting date, i.e., their carrying amounts. Fair values for time deposits are
estimated using a discounted cash flow calculation that applies current interest
rates to aggregated expected maturities. Standby letters of credit and
commitments to extend credit were valued at book value as the majority of these
instruments are based on variable rates. The value of the Company's mortgage
servicing rights was determined using the net discounted cash flows from
servicing.
These evaluations may incorporate specific value to the Company in accordance
with its asset/liability strategies, interest rate projections and business
plans at a specific point in time and therefore, should not necessarily be
viewed as liquidation value. They should also not be used in determining overall
value of the Company due to undisclosed and intangible aspects such as business
and franchise value, and due to changes to assumptions of interest rates and
expected cash flows which might need to be made to reflect expectations of
returns to be earned on instruments with higher credit risks.
The table below illustrates the estimated fair value of the Company's financial
instruments as of December 31 using the assumptions described above (in
thousands):
<TABLE>
<CAPTION>
1997 1996
---- ----
<S> <C> <C>
Cash and due from banks.................................................... $ 45,998 $ 34,109
========== ==========
Interest bearing deposits in banks......................................... 671 11,783
========== ==========
Federal funds sold......................................................... 33,000 8,000
========== ==========
Investment and mortgage backed securities.................................. 108,593 161,304
========== ==========
Loans and loans held for sale (net of allowance for loan losses)........... 1,306,678 991,635
========== ==========
Mortgage servicing rights.................................................. 269 1,690
========== ==========
Deposits................................................................... 1,365,824 1,119,888
========== ==========
Securities sold under agreements to repurchase............................. 19,654 15,372
========= ==========
FHLB stock................................................................. 35,000 7,000
========== ==========
Subordinated debt.......................................................... - 6,000
========== ==========
Standby letters of credit.................................................. 12,168 7,415
========== ==========
Commitments to extend credit and unfunded lines of credit.................. 232,711 121,420
========== ==========
</TABLE>
25
<PAGE> 31
14. STOCKHOLDERS' EQUITY:
PERPETUAL PREFERRED CONVERTIBLE STOCK
The Company has 75,000 outstanding shares of perpetual preferred convertible
stock. The preferred stock has a liquidation preference of $88 per share and
carries a noncumulative dividend of $3.52 per year, payable quarterly. Dividends
on the preferred stock must be paid before any dividends on common stock can be
paid. Beginning December 16, 1994, and thereafter, the preferred stock can be
converted by the holders into 10 shares of common stock for each share of
preferred stock. The holders of the preferred stock vote with the holders of the
common stock and are entitled to 10 votes per share of preferred stock.
DIVIDENDS
Florida Statutes limit the amount of dividends the Bank can pay in any given
year to that year's net income plus retained net income from the two preceding
years. Additionally, the Bank and the Company cannot pay dividends which would
cause either to be undercapitalized as defined by federal regulations.
1993 NON-QUALIFIED STOCK OPTION PLAN
On May 28, 1993, the Company adopted a non-qualified stock option plan (the
Option Plan) which reserved 80,000 shares of common stock for future issuance
under the Option Plan to eligible employees of the Company. As of December 31,
1997, 60,000 options were granted under the Option Plan and 30,000 were
outstanding. The per share exercise price of each stock option is determined by
the Board of Directors at the date of grant. The plan terminates in 2003 or at
the discretion of the Board of Directors.
1995 INCENTIVE STOCK OPTION PLAN
On April 29, 1994, the shareholders approved a qualified incentive stock option
plan to certain key employees. In connection with the Company's holding company
reorganization and share exchange in which all of the Company's stockholders
became stockholders of the Company, the Company adopted the Republic Bancshares,
Inc. 1995 Stock Option Plan (the "Plan") as a replacement for the Company's 1994
Stock Option Plan. The Plan was approved by the stockholders of the Bank at the
Bank's Special Meeting held on February 27, 1996. On April 23, 1996, the
shareholders approved certain amendments to the Plan (the "Amendment"). Under
the Amendment, the total number of shares that may be purchased pursuant to the
plan cannot exceed 525,000 over the life of the plan and provides that the
maximum number of options granted to any one individual in any fiscal year under
the plan cannot exceed 62,000. There is no limitation on the annual aggregate
number of options to be granted in any fiscal year. Each option granted under
the plan will be exercisable by the grantee during a term, not to exceed 10
years, fixed by the compensation committee of the Board of Directors ("the
Committee"). However, no more than 20% of the shares subject to such options
shall vest annually beginning at date of grant. However, in the event of a
change in control, or termination of employment without cause, all options
granted become exercisable immediately. Options under the plan, which have been
granted to the employees of the Flagship/Capital mortgage banking division of
the Company, vest at the rate of 20% at the end of each 12-month period over
five years, contingent upon that division meeting specified net income
performance goals as set by the Board of Directors. If the performance goal for
each year is not met, then the options that would have become exercisable at the
end of the 12-month period shall expire and be null and void. In addition,
options granted to employees of this division shall not vest and become
exercisable if there is a change in control or a termination of employment
without cause, until the performance goal for at least one year has been met.
Upon the grant of an option to a key employee, the Committee will fix the number
of shares of common stock that the grantee may purchase upon exercise of the
option, and the price at which the shares may be purchased. The exercise price
for all options shall not be less than the fair market value. During 1997, 1996
and 1995, options to purchase 80,500, 270,900 and 59,700 shares, respectively,
under the incentive stock option plan were granted. Of the options previously
granted, 59,380 shares have expired, thereby making these options available for
future grants. As of December 31, 1997, 408,750 options remained outstanding
under this plan, with 116,250 available to be granted at a future time.
26
<PAGE> 32
1997 STOCK APPRECIATION RIGHTS PLAN
On October 21, 1997, the Board of Directors of the Company approved a Stock
Appreciation Rights Plan (the "SAR Plan"). Under the SAR Plan, certain key
employees have been granted the right to receive cash equal to the excess of the
fair market value of a share of the Company's common stock at the time of
exercise, over the fair market value of a share of the Company's common stock at
date of grant, times the number of rights exercised. As of December 31, 1997,
40,250 SAR's had been granted at the then current market value of $26.675. No
more than 20% of the shares may vest annually by beginning at date of grant. The
term of an SAR may vary, but shall not be less than one year nor more than 10
years from the date of grant.
The Company records compensation expense equal to the appreciation of the fair
market value of the stock times the number of outstanding stock appreciation
rights. As of December 31, 1997, there had been no appreciation of the Company's
common stock over the fair market value at date of grant. Therefore, no
compensation expense had been recorded.
AGGREGATE STOCK OPTION ACTIVITY
The Company adopted SFAS No. 123 for disclosure purposes in 1996. For SFAS No.
123 purposes, the fair value of each option grant has been estimated as of the
date of grant using the Black-Scholes option pricing model with the following
assumptions (weighted averages) for 1997, 1996 and 1995: risk-free interest rate
of 5.35%, 6.50% and 6.03%, respectively, expected life of seven years, dividend
rate of zero percent, and expected volatility of 30.9% for 1997 and 25% for 1996
and 1995. The approximate fair value of the stock options granted in 1997, 1996,
and 1995 is $959,000, $1,583,000 and $347,000, respectively, which would be
amortized as compensation expense over the vesting period of the options.
Options vest equally over five years. Had compensation cost been determined
consistent with SFAS No. 123, utilizing the assumptions detailed above, the
Company's net income and earnings per share as reported would have been the
following pro forma amounts (in thousands except share data):
<TABLE>
<CAPTION>
1997 1996 1995
---- ---- ----
<S> <C> <C> <C>
Net Income........................................ $8,571 $4,879 $6,916
As reported
Pro Forma...................................... 8,210 4,683 6,873
Earnings per share-diluted
As reported.................................... 1.21 .74 1.10
Pro forma...................................... 1.16 .71 1.10
Earnings per share-basic
As reported.................................... 1.40 .83 1.26
Pro forma...................................... 1.34 .80 1.25
</TABLE>
27
<PAGE> 33
Because the SFAS No. 123 method of accounting has not been applied to options
granted prior to January 1, 1995, the resulting pro forma compensation cost may
not be representative of that expected in future years. A summary of the status
of the Company's stock option plans at December 31, 1997, 1996 and 1995, and for
the years then ended is presented in the table below:
<TABLE>
<CAPTION>
1997 1996 1995
---- ---- ----
Wtd Avg Wtd Avg Wtd Avg
Shares Ex Price Shares Ex Price Shares Ex Price
------ -------- ------ -------- ------ --------
<S> <C> <C> <C> <C> <C> <C>
Fixed Options
Outstanding - beg. of year............... 196,470 $11.87 131,810 $11.00 81,500 $ 8.75
Granted.................................. 82,999 25.94 70,900 13.63 59,700 14.00
Exercised................................ (21,300) 11.80 - - (3,170) 9.58
Forfeited/Expired........................ (6,920) 13.04 (6,240) 13.42 (6,220) 11.06
------- ------- -------
Outstanding - end of year................ 251,249 16.38 196,470 11.87 131,810 11.00
======= ======= =======
Exercisable - end of year................ 118,979 12.52 92,530 10.29 45,112 9.07
Wtd. avg. fair value 11.91 5.84 5.81
of options granted....................
Performance Options
Outstanding - beg. of year............... 200,000 $13.63 200,000 $13.63 - -
Granted.................................. - - - - - -
Exercised................................ - - - - - -
Forfeited/Expired........................ (40,000) 13.63 - - - -
------- ------- -------
Outstanding - end of year................ 160,000 13.63 200,000 13.63 - -
======= ======= =======
Exercisable - end of year................ - - - - - -
Wtd. avg. fair value of options granted.. - 5.84 -
</TABLE>
<TABLE>
<CAPTION>
Options Outstanding Options Exercisable
- -----------------------------------------------------------------------------------------------------------------
Number Weighted-Average Number
Range of Outstanding Remaining Weighted-Average Exercisable Weighted-Average
Exercise Price at 12/31/97 Contractual Life Exercise Price at 12/31/97 Exercise Price
- -------------- ---------------- ---------------- ----------------- ----------- --------------
<S> <C> <C> <C> <C> <C>
$ 2.13 2,499 1.00 years $ 2.13 2,499 $ 2.13
5.40-10.50 61,610 5.89 years 8.02 54,040 7.67
13.63-14.00 266,640 8.19 years 13.69 46,340 13.83
26.68 80,500 9.79 years 26.68 16,100 26.68
</TABLE>
28
<PAGE> 34
15. EARNINGS PER SHARE:
NET INCOME PER COMMON AND COMMON EQUIVALENT SHARE
Diluted earnings per common and common equivalent share has been computed by
dividing net income by the weighted average common and common equivalent shares
outstanding during the periods. The weighted average common and common
equivalent shares outstanding has been adjusted to include the number of shares
that would have been outstanding if the stock options granted had been
exercised, at the average market price for period, with the proceeds being used
to buy shares from the market (i.e., the treasury stock method) and the
perpetual preferred stock and the convertible subordinated debentures had been
converted to common stock at the earlier of the beginning of the year or the
issue date (i.e., the if-converted method). Basic earnings per common share was
computed by dividing net income by the weighted average number of shares of
common stock outstanding during the year. The table below reconciles the
calculation of diluted and basic earnings per share (dollars in thousands,
except share data):
<TABLE>
<CAPTION>
1997
---------------------------------------
Weighted Earnings
Net Shares Per
Income Outstanding Share
------ ----------- -----
<S> <C> <C> <C>
Net Income..................................... $ 8,571 6,128,014
Basic earnings per share....................... $ 1.40
Options exercised during the
period - incremental effect
prior to exercise.......................... - 5,198
Options outstanding at end of
period..................................... - 117,835
Convertible perpetual preferred
stock...................................... - 750,000
Convertible subordinated debentures
- incremental effect prior to
conversion.................................. 245 300,452
---------- ----------- ---------
Diluted earnings per share..................... $ 8,816 7,301,499 $ 1.21
========== =========== =========
</TABLE>
<TABLE>
<CAPTION>
1996
---------------------------------------
Weighted Earnings
Net Shares Per
Income Outstanding Share
------ ----------- -----
<S> <C> <C> <C>
Net Income..................................... $ 4,879 5,857,174
Basic earnings per share....................... $ 0.83
Options exercised during the
period - incremental effect
prior to exercise.......................... - -
Options outstanding at end
of period................................... - 19,430
Convertible perpetual preferred
stock....................................... - 750,000
Convertible subordinated
debentures - incremental effect
prior to conversion......................... - - -
---------- ----------- ---------
Diluted earnings per share..................... $ 4,879 6,626,604 $ 0.74
========== =========== =========
</TABLE>
29
<PAGE> 35
<TABLE>
<CAPTION>
1995
---------------------------------------
Weighted Earnings
Net Shares Per
Income Outstanding Share
------ ----------- -----
<S> <C> <C> <C>
Net income....................................... $ 6,916 5,491,250
Basic earnings per share......................... $ 1.26
Options exercised during the
period - incremental effect
prior to exercise............................. - 388
Options outstanding at end
of period.................................... - 19,730
Convertible prepetual preferred
stock......................................... - 750,000
Convertible subordinated
debentures - incremental effect
prior to conversion.......................... - - -
---------- ------------ ---------
Diluted earnings per share....................... $ 6,916 6,261,368 $ 1.10
========== ============ =========
</TABLE>
In 1997, the Company adopted SFAS No. 128, "Earnings per Share," effective
December 15, 1997. As a result, the Company's reported earnings per share for
1996 and 1995 were restated. The effect of this accounting change on previously
reported earnings per share ("EPS") data was as follows:
<TABLE>
<CAPTION>
1996 1995
---- ----
<S> <C> <C>
Primary EPS as Reported................................ $ .074 $ 1.10
Effect of SFAS No. 128................................. 0.09 0.16
---------- --------
Basic EPS as restated.................................. $ 0.83 $ 1.26
========== ========
Fully diluted EPS as Reported.......................... $ 0.74 $ 1.10
Effect of SFAS No. 128................................. - -
---------- --------
Diluted EPS as restated................................ $ 0.74 $ 1.10
========== ========
</TABLE>
30
<PAGE> 36
16. REGULATORY CAPITAL REQUIREMENTS
The Company and the Bank are required to comply with the capital adequacy
standards established by the Federal Reserve (for the Company) and the FDIC (for
the Bank). There are three basic measures of capital adequacy for banks that
have been promulgated by the Federal Reserve; two risk-based measures and a
leverage measure. All applicable capital standards must be satisfied for a bank
holding company to be considered in compliance.
The minimum guidelines for the ratio ("Risk-Based Capital Ratio") of total
capital ("Total Capital") to risk-weighted assets (including certain
off-balance-sheet items, such as standby letters of credit) is 8.0%. At least
half of Total Capital (i.e., 4.0% of risk-weighted assets) must comprise common
stock, minority interests in the equity accounts of consolidated subsidiaries,
noncumulative perpetual preferred stock, and a limited amount of cumulative
perpetual preferred stock, less goodwill and certain other intangible assets
("Tier 1 Capital"). The remainder may consist of subordinated debt, other
preferred stock, and a limited amount of loan loss reserves ("Tier 2 Capital").
In addition, the Federal Reserve has established minimum leverage ratio
guidelines for bank holding companies. These guidelines provide for a minimum
ratio (the "Leverage Ratio") of Tier 1 Capital to average assets, less goodwill
and certain other intangible assets, of 3.0% for banks that meet certain
specified criteria, including having the highest regulatory rating. All other
bank holding companies generally are required to maintain a Leverage Ratio of at
least 3.0%, plus an additional cushion of 100 to 200 basis points. The
guidelines also provide that bank holding companies experiencing internal growth
or making acquisitions will be expected to maintain strong capital positions
substantially above the minimum supervisory levels without significant reliance
on intangible assets. Furthermore, the Federal Reserve has indicated that it
will consider a "tangible Tier I Capital leverage ratio" (deducting all
intangibles) and other indicators of capital strength in evaluating proposals
for expansion or new activities. The Bank had previously undertaken in writing
to the FDIC to achieve a Leverage Ratio of at least 5.50% by September 30, 1995,
which it did, and will consider raising additional capital or reducing internal
growth should the ratio fall below that level in the future. The Company's
leverage ratio requirement remains at 5.00%. Other than the foregoing
commitment, the Bank has not been advised by the FDIC of any specific minimum
capital ratio requirement applicable to it.
Failure to meet capital guidelines could subject a bank or a bank holding
company to a variety of enforcement remedies, including issuance of a capital
directive, the termination of deposit insurance by the FDIC, a prohibition on
the taking of brokered deposits, and certain other restrictions on its business.
Substantial additional restrictions can be imposed upon FDIC-insured depository
institutions that fail to meet applicable capital requirements under the federal
prompt corrective action regulations.
As of December 31, 1997 and 1996, the Company and the Bank were considered "well
capitalized" under the federal banking agencies for prompt corrective action
regulations. Regulatory capital ratios for 1996 have not been restated to
include FFO, as the accounting methodology for a pooling of interest does not
apply under regulatory guidelines. The table which follows sets forth the
amounts of capital and capital ratios of the Company and the Bank as of December
31, 1997 and 1996, and the applicable regulatory minimums (in thousands):
31
<PAGE> 37
<TABLE>
<CAPTION>
COMPANY BANK
----------------------- ------------------------
AMOUNT RATION AMOUNT RATIO
------ ------ ------ -----
<S> <C> <C> <C> <C>
As of December 31, 1997:
RISK-BASED CAPITAL:
Tier 1 Capital
Actual............................................................ $ 101,350 10.05% $ 103,162 10.25%
Minimum required to be "Adequately Capitalized"................... 40,329 4.00 40,265 4.00
Excess over minimum to be "Adequately Capitalized"................ 61,021 6.05 62,897 6.25
To be "Well Capitalized".......................................... 60,494 6.00 60,398 6.00
Excess over "Well Capitalized" requirements....................... 40,856 4.05 42,764 4.25
Total Capital
Actual............................................................ 117,603 11.66 115,983 11.52
Minimum required to be "Adequately Capitalized"................... 80,658 8.00 80,530 8.00
Excess over minimum to be "Adequately Capitalized"................ 36,945 3.66 35,453 3.52
To be "Well Capitalized".......................................... 100,823 10.00 100,663 10.00
Excess over "Well Capitalized" requirements....................... 16,780 1.66 15,320 1.52
TIER 1 CAPITAL TO TOTAL ASSETS (LEVERAGE):
Actual............................................................ 101,350 6.94 103,162 7.07
Minimum required to be "Adequately Capitalized"................... 58,456 4.00 58,392 4.00
Excess over minimum to be "Adequately Capitalized"................ 42,894 2.94 44,770 3.07
To be "Well Capitalized".......................................... 73,070 5.00 72,990 5.00
Excess over "Well Capitalized" requirements....................... 28,280 1.94 30,172 2.07
As of December 31, 1996:
RISK-BASED CAPITAL:
Tier 1 Capital
Actual............................................................ $ 51,325 8.82% $ 57,113 9.82%
Minimum required to be "Adequately Capitalized"................... 23,268 4.00 23,260 4.00
Excess over minimum to be "Adequately Capitalized"................ 28,057 4.82 33,853 5.82
To be "Well Capitalized".......................................... 34,902 6.00 34,890 6.00
Excess over "Well Capitalized" requirements....................... 16,423 2.82 22,223 3.82
Total Capital
Actual............................................................ 64,630 11.11 64,418 11.08
Minimum required to be "Adequately Capitalized"................... 46,536 8.00 46,519 8.00
Excess over minimum to be "Adequately Capitalized"................ 18,094 3.11 17,899 3.08
To be "Well Capitalized".......................................... 58,170 10.00 58,149 10.00
Excess over "Well Capitalized" requirements....................... 6,460 1.11 6,269 1.08
TIER 1 CAPITAL TO TOTAL ASSETS (LEVERAGE):
Actual............................................................ 51,325 5.90 57,113 6.57
Minimum required to be "Adequately Capitalized"................... 34,807 4.00 34,798 4.00
Excess over minimum to be "Adequately Capitalized"................ 16,518 1.90 22,315 2.57
To be "Well Capitalized".......................................... 43,509 5.00 47,848 5.50
Excess over "Well Capitalized" requirements....................... 7,816 0.90 9,265 1.07
</TABLE>
32
<PAGE> 38
17. RELATED PARTY TRANSACTIONS
William R. Hough, a director and one of the two controlling shareholders, is
President and the controlling shareholder of William R. Hough & Co. ("WRHC"), an
NASD-member investment banking firm. As part of the normal course of business
the Company solicits competitive bids for the sales of mortgage securities from
approved broker/dealers, including William R. Hough & Company. During 1997, the
Company placed $115,410,000 of forward sales on mortgage backed securities
through William R. Hough & Company. Additionally, the Company periodically
purchased securities under agreement to repurchase at a rate based on the
prevailing federal funds rate plus 1/8 of 1% per an agreement entered into on
August 15, 1995.
In addition, WRH Mortgage, Inc., a related interest of William R. Hough, acted
as the Company's agent in the purchase of two loan pools from the Resolution
Trust Corporation on May 23, 1995, and was paid due diligence fees totaling
$39,997.
In June 1995, in connection with a rights offering of the Company Common Stock
conducted by the Company, William R. Hough & Co. participated as a soliciting
dealer, and as such was entitled to receive solicitation fees in an amount equal
to approximately $11,900. William R. Hough & Co. also participated in the
selling group for the public offering of the Company Common Stock that took
place in conjunction with the rights offering. In connection with the public
offering, William R. Hough & Co. received approximately $18,000 in discounts and
other fees.
In July 1996, William R. Hough & Co. began offering sales of insurance and
mutual fund products and investment advisory services on the premises of the
Company. The Company was paid a monthly fee of $300 for each banking office
participating in the program plus a fee of 15% of the gross commissions earned
from sales of non-insurance products. On January 1, 1997, this agreement was
terminated and replaced with a new agreement where the Company will be paid 50%
of the net profits earned from sales of investment products on the Company's
premises.
In December 1996, the Company offered $6,000,000 of convertible subordinated
debentures through a private placement on a "best efforts" basis exclusively
through William R. Hough & Co. as "Sales Agent" for the Company. The sales agent
agreement provided for the payment to William R. Hough & Co. of a fee of 1.50%
for each $1,000 principal amount of debentures sold to directors of the Company
or their spouses and 3% for each $1,000 of debentures sold to all others. The
total amount of fees paid to William R. Hough & Company for the sale of the
debentures was $162,000. In addition, the Company agreed to indemnify the sales
agent against and contribute toward certain liabilities, including liabilities
under the Securities Act, and to reimburse William R. Hough & Co. for certain
expenses and legal fees related to the sale of the debentures of approximately
$51,000.
During the years ended December 31, 1996 and 1995, FFO purchased approximately
$53.3 million, and $69.5 million of securities through WRHC, respectively.
During the years ended December 31, 1996 and 1995, FFO sold approximately $46.0
million and $19.7 million of securities through WRHC, respectively. In
connection with such transactions, FFO paid WRHC an aggregate of $118,000 and
$92,000, in commissions during the years ended December 31, 1996 and 1995,
respectively.
In July 1997, in connection with an offering of trust preferred securities,
William R. Hough & Company participated as co-manager, and as such was entitled
to receive one-half of an underwriting fee of 3.75% of the dollar amount of
preferred stock issued in an amount equal to approximately $539,063. In
addition, the Company agreed to reimburse William R. Hough & Company for certain
expenses and legal fees not to exceed $65,000.
In December 1997, the Company completed a securitization of $60 million of high
loan-to-value home equity loans. William R. Hough & Company participated as
co-underwriters and was paid one-half of an amount equal to 1.5% of the
principal amount of senior securities; 1.5% of the principal amount of
subordinated securities; and 2.5% of the gross proceeds from the sale of
interest only securities totaling $450,000. The Company also reimbursed William
R. Hough & Company for reasonable out-of-pocket expenses. Certain directors and
executive officers of the Company and Bank, members of their immediate families,
and entities with which such persons are associated are customers of the Bank.
As such, they had transactions in the ordinary course of business with the Bank
during 1997. All loans and commitments to lend included in those transactions
were made in the ordinary course of business, upon substantially the same terms,
including interest rates and collateral, as those prevailing at the time for
comparable transactions with other persons and, in the
33
<PAGE> 39
opinion of management, have not involved more than the normal risk of
collectibility or presented other unfavorable features.
18. BANK HOLDING COMPANY FINANCIAL STATEMENTS:
Condensed financial statements of the Company (Republic Bancshares, Inc.) at
December 31 are presented below. Amounts shown as investment in the wholly-owned
subsidiaries and equity in earnings of subsidiaries are eliminated in
consolidation.
REPUBLIC BANCSHARES, INC.
PARENT-ONLY CONDENSED BALANCE SHEETS
(IN THOUSANDS)
<TABLE>
<CAPTION>
AS OF DECEMBER 31,
--------------------
1997 1996
---- ----
<S> <C> <C>
ASSETS
Cash ............................................. $ -- $ --
Investment in wholly-owned subsidiaries .......... 124,307 80,391
Prepaid issuance costs-subordinated debt ......... -- 212
-------- --------
Total ........................................ $124,307 $ 80,603
======== ========
LIABILITIES
Subordinated debt ................................ $ -- $ 6,000
Junior subordinated debt to subsidiary ........... 28,750 --
Intercompany payable to subsidiary ............... 26 --
Accrued interest on subordinated debt ............ -- 4
-------- --------
Total liabilities ............................ -- 4
Minority interest ................................ -- 6,421
STOCKHOLDERS' EQUITY
Perpetual preferred convertible stock ............ 1,500 1,500
Common stock ..................................... 14,072 11,708
Capital surplus .................................. 50,322 34,225
Retained earnings ................................ 29,155 20,847
Unrealized gains (losses) on available-
for sale securities............................. 482 (102)
Total stockholders' equity ....................... 95,531 68,178
-------- --------
Total .......................................... $124,307 $ 80,603
======== ========
</TABLE>
REPUBLIC BANCSHARES, INC.
PARENT-ONLY CONDENSED STATEMENTS OF OPERATIONS
(IN THOUSANDS)
<TABLE>
<CAPTION>
1997 1996
-------- --------
<S> <C> <C>
INCOME
Dividends from bank ................................. $ 828 $ 264
Interest expense on subordinated debt ............... (392) (5)
Interest on borrowings from subsidiary .............. (1,090) --
Equity in undistributed net income
of subsidiary...................................... 9,225 4,620
-------- --------
Net income ..................................... $ 8,571 $ 4,879
======== ========
</TABLE>
34
<PAGE> 40
Republic Bancshares, Inc.
Parent-Only CONDENSED CASH FLOW STATEMENTS
(IN THOUSANDS)
<TABLE>
<CAPTION>
FOR THE YEARS ENDED DECEMBER 31,
--------------------------------
1997 1996
---- ----
<S> <C> <C>
OPERATING ACTIVITIES:
Net income ............................................... $ 8,571 $ 4,879
Adjustments to reconcile net income to net cash
(Used in) provided by operating activities:
Equity in undistributed net income of subsidiary ......... (9,225) (4,620)
Net decrease (increase) in other assets .................. 212 --
Net increase (decrease) in other liabilities ............. 22 5
-------- --------
Net cash (used in) provided by operating activities: ..... (420) 264
-------- --------
Investment Activities:
Equity investment in banking subsidiary .................. (33,322) (56,648)
Equity investment in trust subsidiary .................... (889) --
Equity investment in insurance subsidiary ................ (10) --
-------- --------
Net cash used in investing activities: ................... (34,221) (56,648)
-------- --------
FINANCING ACTIVITIES:
Issuance of stock in merger .............................. 12,374 50,860
Decrease in minority interest ............................ (6,421) --
Increase in retained earnings from merger ................ 1 --
Conversion/Issuance of subordinated debt ................. (152) 5,788
Proceeds from exercise of stock options .................. 240 --
Proceeds of borrowings from subsidiary ................... 28,750 --
Dividend payments on perpetual preferred stock ........... (264) (264)
-------- --------
Net cash provided by financing activities ................ 34,528 56,384
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS............................................ -- --
-------- --------
Cash balance beginning ................................... -- --
-------- --------
Cash balance ending ...................................... -- --
======== ========
</TABLE>
35
<PAGE> 41
19. BUSINESS SEGMENTS
The Company's operations are divided into two business segments; commercial
banking and mortgage banking. Commercial banking activities include the
Company's lending for portfolio purposes, deposit gathering through the retail
branch network, investment and liquidity management. Mortgage banking
activities, which began in 1996, operate through a separate division of the
Bank, include originating and purchasing mortgage loans for sale as well as
selling those loans. The Company provides support for its mortgage banking
division in areas such as secondary marketing, data processing and financial
management. All funding for the mortgage banking division is provided through
the Bank. The following are business segment results of operation for the years
ended December 31, 1997 and 1996. The Company has elected to report its business
segments without allocation of income taxes and minority interests.
REPUBLIC BANCSHARES, INC.
BUSINESS SEGMENT DATA
YEARS ENDED DECEMBER 31, 1997 AND 1996
($ IN THOUSANDS)
<TABLE>
<CAPTION>
1997 1996
------------------------------------ ----------------------------------
Commercial Mortgage Company Commercial Mortgage Company
Banking Banking Total Banking Banking Total
---------- -------- ------- ---------- -------- -------
<S> <C> <C> <C> <C> <C> <C>
TOTAL ASSETS (AT YEAR-END)........... $1,401,001 $151,404 $1,552,405 $1,177,764 $46,593 $1,224,357
OPERATING DATA:
Interest income...................... 99,327 9,130 108,457 87,473 1,471 88,944
Interest expense..................... 55,772 4,151 54,923 43,986 963 44,949
---------- -------- ---------- ---------- -------- ---------
Net interest income.................. 48,555 4,979 53,534 43,487 508 43,995
Provision for loan losses............ 2,628 - 2,628 2,582 - 2,582
---------- -------- ---------- ---------- ------- ----------
Net interest income after
provision for loan losses........ 45,927 4,979 50,906 40,905 508 41,413
Other noninterest income............. 9,728 15,303 25,031 5,671 1,074 6,745
Gain on sale of ORE held
for investment................... - - - 1,207 - 1,207
General and administrative
(G & A) expenses................. 40,002 17,482 57,484 34,773 2,056 36,829
Merger expenses...................... 1,144 - 1,144 - - -
SAIF special assessment.............. - - - 4,005 - 4,005
Provision for losses on ORE.......... 530 - 530 111 - 111
ORE expense, net of ORE income....... 273 - 273 (490) - (490)
Amort. of goodwill & prem. 464 - 464 491 - 491
---------- -------- ---------- ---------- ------- ----------
on deposits......................
Income before income taxes &
minority interest................ $ 13,242 $ 2,800 16,042 $ 8,893 $ (474) 8,419
========== ======== ========== ========
Income tax provision................. (6,096) (3,035)
Minority interest in income from
subsidiary trust................. (701) -
Minority interest in F.F.O........... (674) (505)
---------- ----------
Net income........................... $ 8,571 $ 4,879
========== ==========
</TABLE>
36
<PAGE> 42
20. PROPOSED MERGERS AND ACQUISITIONS (UNAUDITED):
NATIONSBANK AND BARNETT BRANCHES
In December 1997, the Company entered into two purchase and assumption
agreements with NationsBank Corporation ("NationsBank"), to acquire three
branches of NationsBank's subsidiary bank, NationsBank, N.A. ("NationsBank
Subsidiary"), and five branches of Barnett Bank, N.A. ("Barnett Subsidiary"), a
wholly-owned subsidiary of Barnett Banks, Inc. ("BBI"), including the loans and
other assets recorded at those branches, and to assume the deposits and other
liabilities assigned to such branches for a purchase price of approximately
$37.5 million, based on the most recent data available (the "NationsBank
Subsidiary Acquisition"). The first purchase and assumption agreement (the
"Florida Agreement") is for three NationsBank Subsidiary and four Barnett
Subsidiary branches located throughout Florida (the "Florida Branches"),
consisting of three in Monroe County (Key West, Marathon and Plantation Key),
two in Marion County (Ocala and Silver Springs), one in Columbia County (Lake
City) and one in Suwannee County (Live Oak). The second purchase and assumption
agreement (the "Georgia Agreement" and with the Florida Agreement, collectively,
the "NationsBank Subsidiary Agreements") is for a Barnett Subsidiary branch
located in Glynn County, Georgia (the "Georgia Branch" and with the "Florida
Branches," collectively, the "NationsBank Subsidiary Branches"). At August 31,
1997, the Florida Branches had deposit liabilities of $225.5 million and loans
of $163.9 million, and the Georgia Branch had deposit liabilities of $24.2
million and loans of $19.4 million. The NationsBank Subsidiary Acquisition will
be accounted for using purchase accounting rules.
BANKERS SAVINGS BANK
In February 1998, the Company and Bankers Savings Bank, Inc. ("BSB"), Coral
Gables, Florida, entered into a definitive agreement (the "BSB Agreement") for
the merger of BSB into the Bank stock by the Company (the "BSB Acquisition") at
an exchange ratio of 0.54 of a share of the Company's Common Stock for each
share of BSB's Common Stock, subject to certain changes in the price of the
Company's Common Stock and a final valuation of BSB's headquarters building. BSB
has two branches in Dade County and, as of December 31, 1997, had total assets
of $67.1 million, total loans of $47.4 million and total deposits of $56.0
million. It is anticipated that the BSB Acquisition will be accounted for as a
pooling of interests. The BSB Acquisition may be terminated by either BSB or the
Company if it is not consummated by November 1, 1998.
DIME SAVINGS BANK
In March 1998, the Company entered into an agreement with Dime Savings Bank,
F.S.B. (the "DSB Agreement" and "DSB", respectively), to acquire a DSB branch in
Deerfield Beach, Florida (Broward County) and to assume the deposits and other
liabilities of approximately $192.5 million, assume the leasehold on the branch
property and purchase the personal property and equipment of the branch for
$100,000. The transaction will be accounted for using purchase accounting rules
and must be consummated within 30 days of receiving regulatory approval.
37
<PAGE> 43
SIGNATURES
Pursuant to the requirements of Section 13 of the Securities Exchange Act of
1934, the Company has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
REPUBLIC BANCSHARES, INC.
By:/s/ John W. Sapanski
--------------------------------------
John W. Sapanski
Chairman and Chief Executive Officer
Date: April 9, 1998
---------------------------
38
<PAGE> 44
INDEX TO EXHIBITS
3.1 Amended and Restated Articles of Incorporation of the Company
(incorporated by reference from Exhibit 3.1 of the Company's
Registration Statement on Form S-4, File No. 33-80895, dated
December 28, 1995).
3.2 By-laws of the Company (incorporated by reference from Exhibit
3.2 of the Company's Registration Statement on Form S-4, File
No. 33-80895, dated December 28, 1995).
10.1 Purchase and Assumption Agreement relating to the Florida
Branches, between NationsBank Corporation and the Company,
dated December 15, 1997.
10.2 Purchase and Assumption Agreement relating to the Georgia
Branch, between NationsBank Corporation and the Company,
dated December 15, 1997.
21.0 List of Subsidiaries
23.1 Consent of Arthur Andersen LLP.
27.0 Financial Data Schedule (for SEC use only).+
- --------------------
+ Previously Filed
39
<PAGE> 1
Exhibit 10.1
PURCHASE AND ASSUMPTION AGREEMENT
BETWEEN
NATIONSBANK CORPORATION
AND
REPUBLIC BANK
<PAGE> 2
PURCHASE AND ASSUMPTION AGREEMENT
<TABLE>
<S> <C>
ARTICLE I - THE ASSETS ..................................................................................................1
Section 1.1. Banking Facilities ...............................................................................1
ARTICLE II - TRANSFER OF ASSETS AND LIABILITIES .........................................................................1
Section 2.1. Transferred Assets ...............................................................................1
Section 2.2. Purchase Price....................................................................................3
Section 2.3. Deposit Liabilities ..............................................................................5
Section 2.4. Loans Transferred ................................................................................7
Section 2.5. Safe Deposit Business ............................................................................9
Section 2.6. Employee Matters ................................................................................10
Section 2.7. Records and Data Processing .....................................................................10
Section 2.8. Security ........................................................................................11
Section 2.9. Taxes and Fees; Proration of Certain Expenses ...................................................11
Section 2.10. Real Property ...................................................................................12
ARTICLE III - CLOSING AND EFFECTIVE TIME ...............................................................................13
Section 3.1. Effective Time ..................................................................................13
Section 3.2. Closing .........................................................................................13
Section 3.3. Post Closing Adjustments ........................................................................16
ARTICLE IV - INDEMNIFICATION ...........................................................................................16
Section 4.1. Seller's Indemnification of Purchaser ...........................................................16
Section 4.2. Purchaser's Indemnification of Seller ...........................................................17
Section 4.3. Claims for Indemnity ............................................................................17
Section 4.4. Limitations on Indemnification ..................................................................17
ARTICLE V - REPRESENTATIONS AND WARRANTIES OF SELLER ...................................................................18
Section 5.1 Corporate Organization ..........................................................................18
Section 5.2 No Violation ....................................................................................18
Section 5.3 Corporate Authority .............................................................................18
Section 5.4 Enforceable Agreement............................................................................18
Section 5.5 No Brokers.......................................................................................18
Section 5.6 Personal Property................................................................................19
Section 5.7 Real Property ...................................................................................19
Section 5.8 Condition of Property ...........................................................................19
Section 5.9 Limitation of Representations and Warranties ....................................................19
</TABLE>
i
<PAGE> 3
<TABLE>
<S> <C>
ARTICLE VI - REPRESENTATIONS AND WARRANTIES OF PURCHASER ..............................................................19
Section 6.1. Corporate Organization................................................................................20
Section 6.2. No Violation..........................................................................................20
Section 6.3. Corporate Authority...................................................................................20
Section 6.4. Enforceable Agreement ................................................................................20
Section 6.5. No Brokers ...........................................................................................20
ARTICLE VII - OBLIGATIONS OF PARTIES PRIOR TO AND AFTER EFFECTIVE TIME ...............................................20
Section 7.1. Full Access...........................................................................................20
Section 7.2. Delivery of Magnetic Media Records ...................................................................21
Section 7.3. Application for Approval............................................................................. 21
Section 7.4. Conduct of Business; Maintenance of Properties........................................................21
Section 7.5. No Solicitation by Seller.............................................................................22
Section 7.6. No Solicitation by Purchaser..........................................................................22
Section 7.7. Further Actions ......................................................................................23
Section 7.8. Fees and Expenses.....................................................................................23
Section 7.9. Breaches with Third Parties...........................................................................23
Section 7.10 Insurance ............................................................................................23
Section 7.11. Public Announcements..................................................................................23
Section 7.12. Tax Reporting.........................................................................................23
Section 7.13. REIT Participations...................................................................................24
ARTICLE VIII - CONDITIONS TO PURCHASER'S OBLIGATIONS ...................................................................24
Section 8.1. Representations and Warranties True...................................................................24
Section 8.2. Obligations Performed.................................................................................24
Section 8.3. No Adverse Litigation.................................................................................24
Section 8.4. Regulatory Approval...................................................................................24
ARTICLE IX - CONDITIONS TO SELLER'S OBLIGATIONS ......................................................................25
Section 9.1. Representations and Warranties True ..................................................................25
Section 9.2. Obligations Performed ................................................................................25
Section 9.3. No Adverse Litigation ................................................................................25
Section 9.4. Regulatory Approval ..................................................................................25
Section 9.5. Barnett Closing ......................................................................................25
ARTICLE X - TERMINATION ................................................................................................26
Section 10.1. Methods of Termination ...............................................................................26
Section 10.2. Procedure Upon Termination............................................................................26
Section 10.3 Payment of Expenses...................................................................................27
</TABLE>
ii
<PAGE> 4
<TABLE>
<S> <C>
ARTICLE XI- MISCELLANEOUS PROVISIONS ...........................................................................27
Section 11.1. Completion of Barnett Transaction. .............................................................27
Section 11.2. Amendment and Modification .....................................................................27
Section 11.3. Waiver or Extension ............................................................................27
Section 11.4. Assignment. ....................................................................................28
Section 11.5. Confidentiality.................................................................................28
Section 11.6. Addresses for Notices, Etc. ....................................................................28
Section 11.7. Counterparts....................................................................................29
Section 11.8. Headings. ......................................................................................29
Section 11.9. Governing Law ..................................................................................29
Section 11.10. Sole Agreement..................................................................................29
Section 11.11. Severability. ..................................................................................29
Section 11.12. Parties In Interest ............................................................................29
</TABLE>
iii
<PAGE> 5
PURCHASE AND ASSUMPTION AGREEMENT
THIS PURCHASE AND ASSUMPTION AGREEMENT (this "Agreement") is entered into as of
December 15, 1997 by and between NATIONSBANK CORPORATION, a bank holding company
having its principal office in Charlotte, North Carolina (the "Seller"), and
REPUBLIC BANK, a Florida state banking corporation, having its principal offices
in St. Petersburg, Florida (the "Purchaser"):
WITNESSETH:
WHEREAS, NationsBank Corporation ("NationsBank") has entered into an Agreement
and Plan of Merger with Barnett Banks, Inc. ("Barnett") for the purpose of
acquiring Barnett and its subsidiaries (the "Barnett Transaction"); and
WHEREAS, NationsBank and Barnett through the actions of Seller and certain of
their banking subsidiaries wish to divest themselves of certain assets, deposits
and other liabilities in order to meet a portion of the regulatory requirements
dictated by the Barnett Transaction; and
WHEREAS, the Purchaser wishes to purchase such assets and assume such
liabilities upon the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the premises and mutual agreements
hereinafter set forth, Seller and Purchaser agree as follows:
ARTICLE I
THE ASSETS
Section 1.1. Banking Facilities.
Purchaser shall purchase from Seller the assets of, and assume the liabilities
assigned to, those branch banking offices identified on Exhibit 1.1 (b) attached
hereto (the "Banking Facilities").
ARTICLE II
TRANSFER OF ASSETS AND LIABILITIES
Section 2.1. Transferred Assets.
(a) As of the Effective Time (as defined in Section 3.1 below) and upon the
terms and conditions set forth herein, Seller will sell, assign,
transfer, convey and deliver to Purchaser, and Purchaser will purchase
from Seller, the following assets at the Banking Facilities except as
otherwise excluded from sale pursuant to the provisions of Subsection
2.1(b) below (the "Transferred Assets"):
<PAGE> 6
(1) subject to Section 2.10 hereof, all of Seller's transferable
right, title and interest in and to all real estate and
improvements thereon at the Banking Facilities, but not
including any leasehold estates covered by sub-section (3)
below, together with all rights and appurtenances pertaining
thereto (the "Real Property");
(2) the furniture, fixtures, leasehold improvements, equipment and
other tangible personal property located on or affixed to the
Real Property or located at leased Banking Facilities
locations, including any of such items on order at the Closing
but not including any of such items subject to the terms of
any Equipment Leases (the "Personal Property");
(3) all assignable leases affecting the Banking Facilities,
including all leases of real property (the "Real Property
Leases"), and all leases for equipment (the "Equipment
Leases"), and any assignable, stand-alone software licenses
and leases (the "Software Licenses");
(4) all safe deposit contracts and leases for the safe deposit
boxes located at the Banking Facilities as of the Effective
Time (the "Safe Deposit Contracts");
(5) all Loans transferred pursuant to Section 2.4; and
(6) all coins and currency located at the Banking Facilities as of
the Effective Time (the "Coins and Currency").
(b) Excluded from the assets, properties and rights being transferred,
conveyed and assigned to Purchaser under this Agreement are (1) the
assets listed on Exhibit 2.l(b) hereto, (2) Seller's rights in and to
the names "NationsBank" and "Barnett" and any of their predecessor
banks' names and any of NationsBank's or Seller's predecessors'
corporate logos, trademarks, trade names, signs, paper stock, forms and
other supplies containing any such logos, trademarks or trade names,
(3) residential mortgage servicing rights for 1-4 family residential
mortgage loans at the Banking Facilities if Seller is a Barnett
subsidiary, (4) licenses and permits, (5) trust, brokerage, mutual fund
and similar relationships and (6) proprietary NationsBank or Barnett
software (the "Excluded Assets"). Seller shall coordinate with
Purchaser to remove the Excluded Assets from the Banking Facilities on
or prior to the Effective Time. Seller shall remove the Excluded Assets
at its own cost and, apart from making any repairs necessitated by
Seller's negligence in removing the Excluded Assets, Seller shall be
under no obligation to restore the premises to their original
condition, which shall be the responsibility of Purchaser.
(c) Notwithstanding anything to the contrary contained in this Agreement,
all RMMS (as defined below) data and information and any copies or
extracts thereof or other data or analyses derived therefrom, and all
internal reports and data relating to, containing or derived from the
operating results of Barnett and its affiliates or any subsidiary or
division or line of business thereof, whether contained in books,
records or other paper format, accessed through the computer and data
processing systems of Barnett and its affiliates, or otherwise in the
possession of Barnett or the Seller, shall remain solely the property
of Seller, and nothing
2
<PAGE> 7
contained in this Agreement shall be construed as transferring to or
vesting in the Purchaser or any of Purchaser's affiliates any right or
interest in or to such data and information or to grant to the
Purchaser any ongoing rights to the use of the RMMS or data derived
therefrom. Purchaser acknowledges that Seller shall be entitled to take
all such steps prior to or following the Closing as shall be necessary
in Seller's sole discretion to effect the foregoing, including taking
such actions as are necessary to ensure that all access to such
information at the offices of the Seller shall be terminated as of the
Closing. Purchaser shall promptly return to Seller any such information
or data described herein, which remains at any facilities transferred
hereunder following the Closing.
For purposes of this Agreement, the term "RMMS" means the Retail Market
Management System, a proprietary strategic and marketing system of Barnett which
combines customer transaction, balance and demographic data with a proprietary
analytic methodology to produce specific customer and market management tools.
These management tools include but are not limited to market potential models,
customer profitability analysis, market segmentation analysis and customer
activity analysis.
Section 2.2. Purchase Price.
(a) As consideration for the purchase of the Banking Facilities, Purchaser
shall pay a purchase price equal to the sum of the following:
(1) The Net Book Value (as defined in Section 2.2(d) hereof) of
the Personal Property and the real estate and improvements
(including leasehold improvements) at the Banking Facilities
on the Closing Date plus $5,460,000;
(2) A premium for the Deposit Liabilities (as defined in Section
2.3(a) hereof) and franchise value assigned to the Banking
Facilities equal to 12.13% of the Deposit Liabilities;
(3) The Net Book Value (as defined in Section 2.2(d) hereof) of
the Loans as set forth in Section 2.4 hereof on the Closing
Date plus a premium for the Loans equal to 2.81% of the Net
Book Value of the Loans; and
(4) The face amount of the Coins and Currency.
(b) In addition, Purchaser shall assume, as of the Effective Time, all of
the duties, obligations and liabilities of Seller relating to the Real
Property, the Real Property Leases, the Equipment Leases, the Software
Licenses, the Safe Deposit Contracts, the Deposit Liabilities
(including all accrued interest relating thereto) and all other
assignable operating contracts of the Banking Facilities.
(c) Seller shall prepare a balance sheet (the "Pre-Closing Balance Sheet")
in accordance with generally accepted accounting principles
consistently applied as of a date not earlier than 30 calendar days
prior to the Effective Time anticipated by the parties (the
"Pre-Closing Balance
3
<PAGE> 8
Sheet Date") reflecting the assets to be sold and assigned hereunder
and the liabilities to be transferred and assumed hereunder all based
on the book value of such assets and liabilities; Seller agrees to pay
to Purchaser at the Closing (as defined in Section 3.1 hereof), in
immediately available funds, the excess amount, if any, of the amount
of Deposit Liabilities assumed by Purchaser pursuant to subsection (b)
above as reflected by the Pre-Closing Balance Sheet over the aggregate
purchase price computed in accordance with subsection (a) above, as
reflected by the Pre-Closing Balance Sheet. Purchaser agrees to pay
Seller at the Closing, in immediately available funds, the excess, if
any, of the aggregate purchase price computed in accordance with
subsection (a) above, as reflected by the Pre-Closing Balance Sheet
over the amount of Deposit Liabilities assumed by Purchaser pursuant to
subsection (b) above as reflected by the Pre-Closing Balance Sheet.
Amounts paid at Closing shall be subject to subsequent adjustment based
on the Post-Closing Balance Sheet (as defined in Section 3.3 hereof).
(d) With regard to Personal Property and Real Property, Net Book Value is
the value that the asset is carried on Seller's general ledger. With
regard to Loans, Net Book Value is the aggregate principal amount of
the Loans, plus accrued and unpaid interest and late charges thereon,
but such value shall not include any loan loss reserves or general
reserve.
(e) (1) Seller and Purchaser agree to allocate the purchase price in
accordance with Section 1060 of the Internal Revenue Code (the "Code").
Within 120 days after the Closing Date, Purchaser shall provide to
Seller Purchaser's proposed allocation of the purchase price as finally
determined and paid by Purchaser hereunder. Within 30 days after the
receipt of such allocation, Seller shall propose to Purchaser any
changes to such allocation or otherwise shall be deemed to have agreed
with such allocation.
(2) Seller and Purchaser shall reduce such allocation to writing,
including jointly and properly executing completed Internal Revenue
Service Form 8594, and any other forms or statements required by the
Code, Treasury Regulations or the Internal Revenue Service, together
with any and all attachments required to be filed therewith. Seller and
Purchaser shall file timely any such forms and statements with the
Internal Revenue Service.
(3) To the extent consistent with applicable law, Seller and Purchaser
shall not file any tax return or other documents or otherwise take any
position with respect to taxes which is inconsistent with such
allocation of the final purchase price, provided, however, that neither
Seller nor Purchaser shall be obligated to litigate any challenge to
such allocation of the final purchase price by a governmental
authority.
(4) Seller and Purchaser shall promptly inform one another of any
challenge by any governmental authority to any allocation made pursuant
to this subsection and agree to consult with and keep one another
informed with respect to the state of, and any discussion, proposal or
submission with respect to, such challenge.
4
<PAGE> 9
Section 2.3. Deposit Liabilities.
(a) "Deposit Liabilities" shall mean all of Seller's duties, obligations
and liabilities relating to the deposit accounts assigned to the
Banking Facilities as of the Effective Time (including accrued but
unpaid or uncredited interest thereon).
(b) Except for those liabilities and obligations specifically assumed by
Purchaser under 2.2(b) above, Purchaser are not assuming any other
liabilities or obligations. Liabilities not assumed include, but are
not limited to, the following:
(1) Seller's cashier checks, letters of credit, money orders,
traveler's checks, interest checks and expense checks issued
prior to closing, consignments of U.S. Government "E" and
"EE" bonds and any cash items paid by Seller and not cleared
prior to the Effective Time.
(2) Liabilities or obligations with respect to any litigation,
suits, claims, demands or governmental proceedings arising,
commenced or made known to Seller prior to Closing and related
to the Banking Facilities.
(3) Deposit accounts associated with or securing lines of credit
where the line of credit is excluded in accordance with
Section 2.4(b).
(4) Deposit accounts with Seller's group banking program, if any.
(5) Self-directed individual retirement accounts, if any, as well
as those individual retirement accounts which, by their terms,
are not subject to assignment, it being understood that all
other types of IRA Deposit Liabilities are intended to be
transferred.
(6) Any and all obligations arising under any service agreements
entered into between Seller or Barnett and their subsidiaries.
(7) Deposit accounts associated with qualified retirement plans
where Seller is the trustee of such plan or the sponsor of a
prototype plan used by such plan.
(c) Seller does not represent or warrant that any deposit customers whose
accounts are assumed by Purchaser will become or continue to be
customers of Purchaser after the Effective Time.
(d) Purchaser agrees to pay in accordance with law and customary banking
practices all properly drawn and presented checks, drafts and
withdrawal orders presented to Purchaser by mail, over the counter or
through the check clearing system of the banking industry, by
depositors of the accounts assumed, whether drawn on the checks,
withdrawal or draft forms provided by Seller or by Purchaser, and in
all other respects to discharge, in the usual course of the banking
business, the duties and obligations of Seller with respect to the
balances due and owing to the depositors whose accounts are assumed by
Purchaser.
5
<PAGE> 10
(e) If, after the Effective Time, any depositor, instead of accepting the
obligation of Purchaser to pay the 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 any such payment; provided, that if Seller shall pay the same,
Purchaser agrees to reimburse Seller for any such payments, and Seller
shall not be deemed to have made any representations or warranties to
Purchaser with respect to any such checks, drafts or withdrawal orders
and any such representations or warranties implied by law are hereby
expressly disclaimed. Seller and Purchaser shall make arrangements to
provide for the daily settlement with immediately available funds by
Purchaser of checks, drafts, withdrawal orders, returns and other items
presented to and paid by Seller within 90 calendar days after the
Effective Time and drawn on or chargeable to accounts that have been
assumed by Purchaser; provided, however, that Seller shall be held
harmless and indemnified by Purchaser for acting in accordance with
such arrangements.
(f) Purchaser agrees, at its cost and expense, (1) to assign new account
numbers to depositors of assumed Deposit Liabilities, (2) to notify
such depositors, on or before the Effective Time, in a form and on a
date mutually acceptable to Seller and Purchaser, of Purchaser
assumption of Deposit Liabilities, (3) to furnish such depositors with
checks on the forms of Purchaser and with instructions to utilize
Purchaser's checks and to destroy unused check, draft and withdrawal
order forms of Seller (If Purchaser so elect, Purchaser may offer to
buy from such depositors their unused Seller's check, draft and
withdrawal order forms.), (4) to reissue all ATM and debit cards (with
new PIN numbers) associated with the depositors of assumed Deposit
Liabilities, (5) to replace all line of credit checks with checks on
the forms of Purchaser with instructions to utilize Purchaser's checks
and to destroy the unused checks and (6) to disable and to notify
customers of its disabling of all credit card overdraft protection. In
addition, subsequent to regulatory approval, Seller will notify its
affected customers by letter of the pending assignment of Seller's
Deposit Liabilities to Purchaser, which notice shall be at Seller's
cost and expense and shall be in a form mutually agreeable to Seller
and Purchaser.
(g) Purchaser agrees to pay promptly to Seller an amount equivalent to the
amount of any checks, drafts or withdrawal orders credited to any
assumed Deposit Liabilities as of the Effective Time that are returned
to Seller after the Effective Time.
(h) As of the Effective Time, Purchaser will assume and pay the Deposit
Liabilities and assume and discharge all of Seller's duties and
obligations in accordance with the terms and conditions and laws, rules
and regulations that apply to the certificates, accounts and other
Deposit Liabilities assumed under this Agreement.
(i) As of the Effective Time, Purchaser will maintain and safeguard in
accordance with applicable law and sound banking practices all account
documents, deposit contracts, signature cards, deposit slips, canceled
items and other records related to the Deposit Liabilities assumed
under this Agreement, subject to Seller's right of access to such
records as provided in this Agreement.
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(j) 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. Purchaser will comply
with all laws, rules and regulations regarding tax reporting of
transactions of such accounts after the Effective Time.
(k) Prior to the Closing Date, Purchaser, at its expense, will notify all
Automated Clearing House ("ACH") originators of the transfers and
assumptions made pursuant to the Agreement; provided, however, that
Seller may, at its option, notify all such originators (on behalf of
Purchaser) also at the expense of Purchaser. For a period of 90
calendar days beginning on the Effective Time, Seller will honor all
ACH items related to accounts assumed under this Agreement which are
mistakenly routed or presented to Seller. Seller will make no charge to
Purchaser for honoring such items, and will electronically transmit
such ACH data to Purchaser. If Purchaser cannot receive an electronic
transmission, Seller will make available to Purchaser at Seller's
operations center receiving items from the Automated Clearing House
tapes containing such ACH data. Items mistakenly routed or presented
after the 90-day period will be returned to the presenting party.
Seller and Purchaser shall make arrangements to provide for the daily
settlement with immediately available funds by Purchaser of any ACH
items honored by Seller, and Seller shall be held harmless and
indemnified by Purchaser for acting in accordance with this arrangement
to accept ACH items.
(l) Following the Effective Time, Purchaser agrees to use its best efforts
to collect from Purchaser 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 Effective Time which were
honored by Seller prior to the Effective Time 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 resumed or charged to Seller. Solely for the purposes of
this Section 2.3(i), all references to Seller shall be deemed to
include Seller and its assignees.
Section 2.4. Loans Transferred.
(a) Seller will transfer to Purchaser as of the Effective Time, subject to
the terms and conditions of this Agreement, all of Seller's right,
title and interest in (including collateral relating thereto) loans
maintained, serviced and listed as loans assigned to the Banking
Facilities (collectively, the "Loans"); provided, however, the Loans
shall not include any loans described in subsection (b) below. Such
Loans (as well as any lien or security interest related
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thereto) shall be transferred by means of a blanket (collective)
assignment and not individually (except as may be otherwise required by
law). Purchaser shall inform Seller not less than 45 calendar days
prior to the proposed Closing of any case in which filing information
relating to any collateral for the Loans will be required for
preparation of any assignments of liens.
(b) Notwithstanding the provisions of subsection (a) above, the Loans shall
not include:
(1) nonaccruals (which term shall include loans in which the
collateral securing same has been repossessed or in which
collection efforts have been instituted or claim and delivery
or foreclosure proceedings have been filed);
(2) loans 90 calendar days or more past due;
(3) loans upon which insurance has been force-placed;
(4) credit card loans;
(5) loans in connection with which the borrower has filed a
petition for relief under the United States Bankruptcy Code
prior to the Effective Time;
(6) loans identified by Purchaser in writing within 45 calendar
days or more prior to the Effective Time as not being
purchased because of failure to meet generally applicable
credit standards of Purchaser. In the case of loans made
within 45 calendar days of Closing, Purchaser shall have the
right to review and put back those loans for failure to meet
the credit standards of Purchaser for up to 30 days; or
(7) mortgage servicing rights for 1-4 family residential mortgage
loans if Seller is a Barnett subsidiary.
(c) Seller and Purchaser agree that Purchaser will become the beneficiary
of credit life insurance written on direct consumer installment loans
and coverage will continue to be the obligation of the current insurer
after the Effective Time and for the duration of such insurance as
provided under the terms of the policy or certificate. If Purchaser
become the beneficiary of credit life insurance written on direct
consumer installment loans, Seller and Purchaser agree to cooperate in
good faith to develop a mutually satisfactory method by which the
current insurer will make rebate payments to and satisfy claims of the
holders of such certificates of insurance after the Effective Time. The
parties obligations in this section are subject to any restrictions
contained in existing insurance contracts as well as applicable laws
and regulations.
(d) In connection with the transfer of any loans requiring notice to the
borrower and the servicer, Purchaser and Seller will comply with all
notice and reporting requirements of the loan documents or of any law
or regulation.
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(e) All Loans will be transferred without recourse and without any
warranties or representations as to their collectibility or the
creditworthiness of any of the obligers of such Loans.
(f) Purchaser will at its expense issue new coupon books or other forms of
payment identification for payment of Loans for which Seller provide
coupon books with instructions to utilize Purchaser coupons or forms
and to destroy coupons furnished by Seller.
(g) For a period of 90 calendar days after the Effective Time, Seller will
forward to Purchaser loan payments received by Seller. Purchaser shall
reimburse Seller upon demand for checks returned on payments forwarded
to Purchaser; however, to the extent possible, Seller will deduct the
amount of such returned checks from payments received and shall settle
with Purchaser by an official check.
(h) As of the Effective Time, Seller shall transfer and assign all files,
documents and records related to the Loans to Purchaser, including such
information held in electronic form, and Purchaser will be responsible
for maintaining and safeguarding all such materials in accordance with
applicable law and sound banking practices.
(i) If the balance due on any Loan purchased pursuant to this Section 2.4
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 Effective
Time, the asset value represented by the Loan transferred shall be
correspondingly increased and an amount in cash equal to such increase
shall be paid by Purchaser to Seller promptly upon demand.
(j) Seller shall grant to Purchaser as of the Effective Time a limited
power of attorney, in substantially the form attached hereto as Exhibit
2.4(j)(the "Power of Attorney").
Section 2.5. Safe Deposit Business.
(a) As of the Effective Time, Purchaser will assume and discharge Seller's
obligations with respect to the safe deposit box business at the
Banking Facilities in accordance with the terms and conditions of
contracts or rental agreements related to such business, and Purchaser
will maintain all facilities necessary for the use of such safe deposit
boxes by persons entitled to use them.
(b) As of the Effective Time, Seller shall transfer and assign the records
related to such safe deposit box business to Purchaser, and Purchaser
shall maintain and safeguard all such records and be responsible for
granting access to and protecting the contents of safe deposit boxes at
the Banking Facilities.
(c) Safe deposit box rental payments and late payment fees collected by
Seller before the Effective Time shall not be prorated.
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Section 2.6. Employee Matters.
(a) Subject to Section 11.12 hereof, Purchaser shall offer employment to
all employees employed by Seller at the Banking Facilities as of the
Effective Time (the "Employees"), in their then current functional
positions at each facility with remuneration not less than current
levels (subject to normal salary increases) and benefits generally
equivalent to current levels. Except for Purchaser's defined benefit
pension plan, Employees who become employees of Purchaser shall receive
full credit for their prior service with Seller under Purchaser's
benefit plans and policies, including its vacation and sick leave
policies. As of the Effective Time, the Employees who become employees
of Purchaser and their dependents, if any, previously covered under
Seller's health insurance plan shall be covered under Purchaser's
health insurance plan without being subject to any pre-existing
condition limitations or exclusions except those excluded under
Seller's health insurance plan. Employees who become employees of
Purchaser shall not be required to satisfy the deductible and employee
payments required by Purchaser's comprehensive medical and/or dental
plans for the calendar year of the Effective Time to the extent of
amounts previously credited during such calendar year under comparable
plans maintained by Seller. Employees who become employees of Purchaser
shall receive full credit for their prior service with Seller for
purposes of determining their participation, eligibility and vesting
rights under Purchaser's defined benefit pension plan; benefits under
Purchaser's defined benefit pension plan shall accrue from the first
day of service with Purchaser and shall be based on the number of years
of service with Purchaser.
(b) Seller makes no representations or warranties about whether any of the
Employees who become employees of Purchaser will remain employed at the
Banking Facilities after the Effective Time. Seller will use its best
efforts to maintain the Employees as employees of Seller at the Banking
Facilities until the Effective Time. Any Employee whose employment
shall be terminated for any reason prior to the Effective Time or who
shall elect not to be an employee of Purchaser shall be dealt with by
Seller in its sole and absolute discretion. Seller agrees that, for a
period of 12 months after the Effective Time, it will not solicit for
employment any Employee who remains employed by Purchaser.
(c) Purchaser agrees that for a period of 12 months after the Effective
Time, no Employee will be terminated by Purchaser without paying to
such Employee a severance benefit no less than the applicable severance
benefit set forth in Exhibit 2.6(c).
Section 2.7. Records and Data Processing.
(a) As of the Effective Time, Purchaser shall become responsible for
maintaining the files, documents and records referred to in this
Agreement. Purchaser will preserve and safekeep them as required by
applicable law and sound banking practice for the joint benefit of
Seller and Purchaser. After the Effective Time, Purchaser will permit
Seller and its representatives, for reasonable cause, at reasonable
times and upon reasonable notice, to examine, inspect, copy and
reproduce any such files, documents or records as Seller deem
reasonably necessary and to have similar access to such records and
Seller's former employees for purposes of
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preparation of records and reports (including regulatory and tax
reports and returns) and as required in connection with third party
litigation.
(b) As of the Effective Time, Seller will permit Purchaser and its
representatives, for reasonable cause, at reasonable times and upon
reasonable notice, to examine, inspect, copy and reproduce files,
documents or records retained by Seller regarding the assets and
liabilities transferred under this Agreement (to the extent that such
information is readily available from Seller's records without
incurring any significant expense) as Purchaser deem reasonably
necessary.
(c) For a period of 90 days after the Effective Time, the party providing
copies of records shall do so without charge; thereafter it may charge
its customary rate for such copies.
(d) It is understood that certain of Seller's records, including
certificates of deposit, may be available only in electronic form or in
the form of photocopies, film copies or other non-original and
non-paper media.
Section 2.8. Security.
As of the Effective Time, Purchaser shall be solely responsible for the security
of and insurance on all persons and property located in or about the Banking
Facilities.
Section 2.9. Taxes and Fees; Proration of Certain Expenses.
Purchaser shall be responsible for the payment of all fees and taxes related to
this transaction; except that Purchaser shall not be responsible for, or have
any liability with respect to, taxes on any income to Seller arising out of this
transaction. Purchaser shall not be responsible for any income tax liability of
Seller arising from the business or operations of the Banking Facilities before
the Effective Time, and Seller shall not be responsible for any tax liabilities
of Purchaser arising from the business or operations of the Banking Facilities
after the Effective Time. Utility payments, telephone charges, real property
taxes, personal property taxes, rent, salaries, deposit insurance premiums or
assessments, maintenance items, other ordinary operating expenses of the Banking
Facilities and other expenses related to the liabilities assumed or assets
purchased hereunder shall be prorated between the parties as of the Effective
Time. To the extent any such item has been prepaid by Seller for a period
extending beyond the Effective Time, there shall be a proportionate monetary
adjustment in favor of Seller. The Purchaser shall be responsible for the
payment of any non-delinquent assessments. Real estate taxes shall be pro-rated
at the Closing based upon the maximum allowable discount and other applicable
exemptions, and there shall be no reproration of real estate taxes.
Seller and Purchaser shall each be responsible for its own costs with respect to
the preparation and filing of any tax returns, as well as the preparation,
review and analysis of the allocation statements and any forms or statements
prepared in connection with the final allocation of the purchase price.
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Section 2.10. Real Property.
(a) Title Matters.
(i) Seller agrees to deliver to Purchaser as soon as reasonably
possible upon Purchaser's request copies of all title
information in possession of Seller, including, but not
limited to, title insurance policies, attorneys' opinions on
title, surveys, covenants, deeds and easements relating to the
Real Property. Such delivery shall constitute no warranty by
Seller as to the accuracy or completeness thereof or that
Purchaser is entitled to rely thereon.
(ii) Purchaser agrees to notify Seller, in writing within 45
calendar days after the date of this Agreement of any
mortgages, pledges, material liens, encumbrances,
reservations, tenancies, encroachments, overlaps or other
title exceptions, survey objections, or zoning or similar land
use violations (excluding legal but nonconforming uses)
related to the Real Property to which Purchaser reasonably
objects (the "Title Defects"). If Purchaser does not notify
Seller of Title Defects within the 45 day period, Purchaser
shall be deemed to have waived its rights under this Section
2.10. Purchaser agrees that Title Defects shall not include
real property taxes not yet due and payable or easements,
restrictions, tenancies, survey matters or other title
matters, and rights of way which do not materially interfere
with the use of the Real Property as such facilities are
currently utilized. Seller shall make a good faith effort to
correct any such Title Defect to Purchaser's reasonable
satisfaction at least 10 calendar days prior to Closing;
provided, however, that Seller shall not be obligated to bring
any lawsuit or make any payments of money (except to pay liens
that Seller does not dispute in good faith) to cure a Title
Defect. If Seller is unable or unwilling to cure any such
Title Defects to Purchaser's reasonable satisfaction,
Purchaser shall have the option either to terminate this
Agreement (upon written notice to Seller) with respect to the
Banking Facilities, at which the Real Property having such
Title Defects is located or to receive title in its then
existing condition. Upon termination of this Agreement with
respect to a particular tract of property pursuant to this
Section 2.10, no party shall have any further liability to the
other party under this Agreement with respect to such parcel
of Real Property (or the other Assets or Deposit Liabilities
associated with that facility) and the purchase price shall be
adjusted accordingly.
(b) Environmental Matters.
Purchaser shall have the right to conduct such investigation of
environmental matters with respect to the Real Property as it may
reasonably require and shall report the results of any such
investigation, together with its objections to any material violation
of applicable environmental law which impacts the use of a particular
tract of Real Property as such facilities are currently utilized, to
Seller no later than 45 calendar days after the date of this Agreement;
provided, however, that without the prior written consent of Seller and
execution of a satisfactory property access agreement, Purchaser shall
not conduct subsurface testing, any ground water monitoring or install
any test well or undertake any other investigation which requires a
permit or license from, or the reporting of the investigation or the
results thereof to, a local or state environmental regulatory
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authority or the United States Environmental Protection Agency. If
Purchaser objects to any material violation of applicable environmental
law which impacts the Real Property or its use as a banking facility,
Seller shall have the right, but not the obligation, to cure any such
material violation of law which is discovered by Purchaser's
investigation. If Seller either refuses to give such written consent or
refuses to cure any material violation of applicable environmental law
relating to the Real Property or the use thereof as a banking center,
Purchaser shall have the option either to purchase the Real Property in
its then existing condition or to terminate this Agreement (upon
written notice of Seller) with respect to the Banking Facilities at
which such parcel of Real Property affected by such refusal is located
in which event neither party shall have any further liability to the
other under this Agreement with respect to such Banking Facilities (or
the other Assets or Deposit Liabilities associated with that facility)
and the purchase price shall be adjusted accordingly.
(c) Termination by Seller.
If Purchase elects not to purchase Banking Facilities pursuant to this
Section 2.10, Seller may elect to terminate this Agreement in its
entirety within 10 calendar days after its receipt of Purchaser's
election not to purchase a Banking Facility.
ARTICLE III
CLOSING AND EFFECTIVE TIME
Section 3.1. Effective Time.
The purchase of assets and assumption of liabilities provided for in this
Agreement shall occur at a closing (the "Closing") to be held at the offices of
Seller in Charlotte, North Carolina at 10:00 a.m. local time on a date
designated by Seller within 31 calendar days following the closing of the
Barnett Transaction and the date of all approvals by regulatory agencies and
after all statutory waiting periods have expired, or at such other place, time
or date on which the parties shall mutually agree. The effective time (the
"Effective Time") shall be 2:00 p.m., local time, on the day on which the
Closing occurs (the "Closing Date").
Section 3.2. Closing.
(a) All actions taken and documents delivered at the Closing shall be
deemed to have been taken and executed simultaneously, and no action
shall be deemed taken nor any document delivered until all have been
taken and delivered.
(b) At the Closing, subject to all the terms and conditions of this
Agreement, Seller shall deliver to Purchaser or, in the case of
subsections (b), (6), (7), (8) and (10), make reasonably available to
Purchaser:
(1) Special warranty deeds executed by the appropriate Seller
transferring Seller's interest in and to each parcel of Real
Property to Purchaser in substantially the form attached
hereto as Exhibit 3.2(b)(1);
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(2) A Bill of Sale, in substantially the form attached hereto as
Exhibit 3.2(b)(2) (the "Bill of Sale"), transferring to
Purchaser all of Seller's interest in the Personal Property
and in the Loans;
(3) An Assignment and Assumption Agreement, in substantially the
form attached hereto as Exhibit 3.2(b)(3) (the "Assignment and
Assumption Agreement"), assigning Seller's interest in the
Equipment Leases, the Safe Deposit Contracts and the Deposit
Liabilities;
(4) An Assignment and Assumption of Lease, in substantially the
form attached hereto as Exhibit 3.2(b)(4) (the "Assignment and
Assumption of Lease"), assigning Seller's interest in the Real
Property Leases;
(5) Consents from third persons that are required to effect the
assignments set forth in the Assignment and Assumption
Agreement, and in the Assignment and Assumption of Leases;
(6) Seller's keys to the safe deposit boxes and Seller's records
related to the safe deposit box business at the Banking
Facilities;
(7) Seller's files and records related to the Loans;
(8) Seller's records related to the Deposit Liabilities assumed by
Purchaser;
(9) Immediately available funds in the net amount shown as owing
to Purchaser by Seller on the Closing Statement, if any;
(10) The Coins and Currency;
(11) Such of the other assets to be purchased as shall be capable
of physical delivery;
(12) A certificate of a proper officer of each Seller, dated as of
the date of Closing, certifying to the fulfillment of all
conditions which are the obligation of that Seller and that
all of the representations and warranties of such Seller set
forth in this Agreement remain true and correct in all
material respects as of Effective Time;
(13) Copies of (A) the articles of incorporation and bylaws of
Seller and (B) a resolution of the Board of Directors of
Seller, or the Executive Committee of Seller, approving the
sales contemplated herein;
(14) Such certificates and other documents as Purchaser and its
counsel may reasonably require to evidence the receipt by
Seller of all necessary regulatory authorizations and
approvals for the consummation of the transactions provided
for in this Agreement;
(15) A Closing Statement using amounts shown on the Pre-Closing
Balance Sheet, substantially in the form attached hereto as
Exhibit 3.2(b)(15) (the "Closing Statement");
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(16) An affidavit of Seller certifying that Seller is not a
"foreign person" as defined in the federal Foreign Investment
in Real Property Tax Act of 1980;
(17) The Power of Attorney; and
(18) An assignment of the REIT participations by the REIT as an
additional Seller.
It is understood that the items listed in subsections (b)(6)
and (b)(10) shall be transferred after the Banking Facilities
have closed for business on the Closing Date and that the
records listed in subsections (b)(7) and (b)(8) will be
transferred as soon as possible after the Closing, but in no
event more than 30 days after the Closing.
(c) At the Closing, subject to all the terms and conditions of this
Agreement, Purchaser shall deliver to Seller:
(1) The Assignment and Assumption Agreement;
(2) The Assignment and Assumption of Lease;
(3) A certificate and receipt acknowledging the delivery and
receipt of possession of the Assets and records referred to in
this Agreement;
(4) Immediately available funds in the net amount shown as owing
by Purchaser on the Closing Statement, if any;
(5) A certificate of a proper officer of Purchaser, dated as of
the Date of Closing, 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 as of the Effective Time;
(6) Copies of (A) the charter and bylaws of the Purchaser and (B)
a resolution of the Board of Directors, or the Executive
Committee, of Purchaser approving the purchases contemplated
herein; and
(7) Such certificates and other documents as Seller and its
counsel may reasonably require to evidence the receipt of
Purchaser of all necessary regulatory authorizations and
approvals for the consummation of the transactions provided
for in this Agreement.
(d) All instruments, agreements and certificates described in this Section
3.2 shall be in form and substance reasonably satisfactory to the
parties' respective legal counsel.
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Section 3.3. Post Closing Adjustments.
(a) Not later than 60 business days after the Effective Time (the
"Post-Closing Balance Sheet Delivery Date"), Seller shall deliver to
Purchaser a balance sheet dated as of the Effective Time and prepared
in accordance with generally accepted accounting principles
consistently applied reflecting the assets sold and assigned and the
liabilities transferred and assumed hereunder (the "Post-Closing
Balance Sheet") together with a copy of Seller's calculation of the
adjusted purchase price and amounts payable thereunder. Additionally,
Seller shall deliver to Purchaser a list of Loans purchased,
individually identified by account number. Seller shall afford
Purchaser and its accountants and attorneys the opportunity to review
all work papers and documentation used by Seller in preparing the
Post-Closing Balance Sheet. Within 15 business days following the
Post-Closing Balance Sheet Delivery Date (the "Adjustment Payment
Date"), Seller and Purchaser shall meet at the offices of Seller in
Charlotte, North Carolina, or such other location as may be mutually
agreed, to effect the transfer of any funds as may be necessary to
reflect changes in such assets and liabilities between the Pre-Closing
Balance Sheet and the Post-Closing Balance Sheet and resulting changes
in the purchase price, together with interest thereon computed from the
Effective Time to the Adjustment Payment Date at the applicable Federal
Funds Rate (as hereinafter defined).
(b) In the event that a dispute arises as to the appropriate amounts to be
paid to either party on the Adjustment Payment Date, each party shall
pay to the other on such Adjustment Payment Date all amounts other than
those as to which a dispute exists. Any disputed amounts retained by a
party which are later found to be due to the other party shall be paid
to such other party promptly upon resolution with interest thereon from
the Effective Time to the date paid at the applicable Federal Funds
Rate.
(c) The Federal Funds Rate shall be the mean of the high and low rates
quoted for Federal Funds in the Money Rates Column of The Wall Street
Journal adjusted as such mean may increase or decrease during the
period between the Effective Time and the date paid.
ARTICLE IV
INDEMNIFICATION
Section 4.1. Seller's Indemnification of Purchaser.
Seller shall indemnify, hold harmless and defend Purchaser from and against any
breach by Seller of any representation or warranty contained herein and all
claims, losses, liabilities, demands and obligations, including reasonable
attorneys' fees and expenses, arising out of any actions, suits or proceedings
commenced prior to the Effective Time (other than proceedings to prevent or
limit the consummation of this transaction) relating to Seller's operations at
the Banking Facilities; and, except as otherwise provided in this Agreement,
Seller shall further indemnify, hold harmless and defend Purchaser from and
against all claims, losses, liabilities, demands and obligations, including
reasonable attorneys' fees and expenses, real estate taxes, intangibles and
franchise taxes, sales and use taxes, social security and unemployment taxes,
all accounts payable and operating expenses (including salaries, rents and
utility charges) incurred by Seller prior to the Effective Time and which are
claimed or demanded on or after the Effective Time, or which
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arise out of any actions, suits or proceedings commenced on or after the
effective time and which relate to Seller's operations at the Banking Facilities
prior to the Effective Time.
Section 4.2. Purchaser's Indemnification of Seller.
Purchaser shall indemnify, hold harmless and defend Seller from and against any
breach by Purchaser of any representation or warranty contained herein and all
claims, losses, liabilities, demands and obligations, including reasonable
attorneys' fees and expenses, real estate taxes, intangibles and franchise
taxes, sales and use taxes, social security and unemployment taxes, all accounts
payable and operating expenses (including salaries, rents and utility charges),
which Seller may receive, suffer or incur in connection with operations and
transactions occurring after the Effective Time and which involve the Banking
Facilities, the Transferred Assets or the liabilities assumed pursuant to this
Agreement.
Section 4.3. Claims for Indemnity.
(a) A claim for indemnity under Sections 4.1 or 4.2 of this Agreement may
be made by the claiming party at any time prior to 12 months after the
Effective Time by the giving of written notice thereof to the other
party. Such written notice shall set forth in reasonable detail the
basis upon which such claim for indemnity is made. In the event that
any such claim is made within such prescribed 12 month period, the
indemnity relating to such claim shall survive until such claim is
resolved. Claims not made within such 12 month period shall cease and
no indemnity shall be made therefor.
(b) In the event that any person or entity not a party to this Agreement
shall make any demand or claim or file or threaten to file any lawsuit,
which demand, claim or lawsuit may result in any liability, damage or
loss to one party hereto of the kind for which such party is entitled
to indemnification pursuant to Section 4.1 or 4.2 hereof, then, after
written notice is provided by the indemnified party to the indemnifying
party of such demand, claim or lawsuit, the indemnifying party shall
have the option, at its cost and expense, to retain counsel for the
indemnified party to defend any such demand, claim or lawsuit. In the
event that the indemnifying party shall fail to respond within five
calendar days alter receipt of such notice of any such demand, claim or
lawsuit, then the indemnified party shall retain counsel and conduct
the defense of such demand, claim or lawsuit as it may in its
discretion deem proper, at the cost and expense of the indemnifying
party. In effecting the settlement of any such demand, claim or
lawsuit, an indemnified party shall act in good faith, shall consult
with the indemnifying party and shall enter into only such settlement
as the indemnifying party shall approve (the indemnifying party's
approval will be implied if it does not respond within ten calendar
days of its receipt of the notice of such settlement offer).
Section 4.4. Limitations on Indemnification.
Notwithstanding anything to the contrary contained in this Article III, no
indemnification shall be required to be made by either party until the aggregate
amount of all such claims by a party exceeds $50,000. Once such aggregate amount
exceeds $50,000, such party shall thereupon be entitled to indemnification for
all amounts in excess of such $50,000. IN ADDITION, THE PARTIES SHALL HAVE NO
OBLIGATIONS UNDER THIS ARTICLE IV FOR ANY CONSEQUENTIAL LIABILITY, DAMAGE
17
<PAGE> 22
OR LOSS THE INDEMNIFIED PARTY MAY SUFFER AS THE RESULT OF ANY DEMAND, CLAIM OR
LAWSUIT.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller hereby represents and warrants to Purchaser as follows, which
representations and warranties shall survive the Effective Time for a period of
12 months except as otherwise specifically herein provided:
Section 5.1. Corporate Organization.
Seller is a bank holding company duly organized, validly existing and in good
standing under the laws of the State of North Carolina. Seller has the corporate
power and authority to carry on its business as currently conducted and to
effect the transactions contemplated herein.
Section 5.2. No Violation.
The Banking Facilities have been operated in all material respects in accordance
with applicable laws, rules and regulations. Neither the execution and delivery
of this Agreement, nor the consummation of the transactions contemplated herein,
will violate or conflict with (a) Seller charter or bylaws; (b) any material
provision of any material agreement or any other material restriction of any
kind to which Seller is a party or by which Seller is bound; (c) any material
statute, law, decree, regulation or order of any governmental authority; or (d)
any material provision which will result in a default under, or which cause the
acceleration of the maturity of, any material obligation or loan to which Seller
is a party.
Section 5.3. Corporate Authority.
Prior to Closing, the consummation of the transactions contemplated herein will
have been duly authorized by the Board of Directors or the Executive Committee
of Seller. No further corporate authorization is necessary for Seller to
consummate the transactions contemplated hereunder.
Section 5.4. Enforceable Agreement.
This Agreement has been duly executed and delivered by Seller and is the legal,
valid and binding agreement of Seller, enforceable in accordance with its terms.
Section 5.5. No Brokers.
All negotiations relative to this Agreement and the transactions contemplated
hereby have been carried on by Seller and Purchaser, and there has been no
participation or intervention by any other person, firm or corporation employed
or engaged by or on behalf of Seller in such a manner as to give rise to any
valid claim against Seller or Purchaser for a brokerage commission, finder's fee
or like commission.
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<PAGE> 23
Section 5.6. Personal Property.
Seller owns, and will convey to Purchaser at the Closing, all of Seller's right,
title and interest to all of the Personal Property free and clear of any
mortgages, liens, security interests or pledges, except as may otherwise be set
forth in this Agreement.
Section 5.7. Real Property.
Seller make the following additional representations regarding the Real
Property:
(a) Except as specifically set forth herein or disclosed to Purchaser
within 30 days after the date of this Agreement, Seller has no
knowledge of any condemnation proceedings pending against the Real
Property.
(b) Except as specifically set forth herein or disclosed to Purchaser in
writing within 30 days after the date 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, lien, proceeding or
litigation of any kind, pending or outstanding, which would materially
affect or limit Purchaser or its successors' or assigns' use and
enjoyment of the Real Property or which would materially limit or
restrict Seller's right or ability to enter into this Agreement and
consummate the sale and purchase contemplated hereby.
(c) Purchaser's sole remedy for a breach of the representations and
warranties in this Section 5.7 shall be to elect not to purchase a
particular Banking Facility, as provided in Section 2.10.
Section 5.8. Condition of Property.
Except as may be otherwise specifically set forth in this Agreement, the Real
Property and Personal Property to be purchased by Purchaser hereunder are sold
as is, where is, with no warranties or representations whatsoever, except as may
be expressly represented or warranted in this Agreement.
Section 5.9. Limitation of Representations and Warranties.
Except as may be expressly represented or warranted in this Agreement, the
Seller is making no other representations or warranties whatsoever with regard
to any asset being transferred to Purchaser or any liability or obligation being
assumed by Purchaser or as to any other matter or thing
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser hereby represents and warrants to the Seller as follows, which
representations and warranties shall survive the Effective Time for a period of
12 months except as otherwise specifically herein provided:
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<PAGE> 24
Section 6.1. Corporate Organization.
Purchaser is a state banking corporation, duly organized, validly existing and
in good standing under the laws of State of Florida. Purchaser has the corporate
power and authority to carry on the business being acquired, to assume the
liabilities being transferred, and to effect the transactions contemplated
herein.
Section 6.2. No Violation.
Neither the execution and delivery of this Agreement, nor the consummation of
the transactions contemplated herein, will violate or conflict with (a) the
charter or bylaws of Purchaser; (b) any material provision of any material
agreement or any other material restriction of any kind to which Purchaser is a
party or by which Purchaser is bound; (c) any material statute, law, decree,
regulation or order of any governmental authority; or (d) any material provision
which will result in a default under, or cause the acceleration of the maturity
of, any material obligation or loan to which Purchaser is a party.
Section 6.3. Corporate Authority.
The consummation of the transactions contemplated herein have been duly
authorized by the Board of Directors (or Executive Committee) of the Purchaser.
No further corporate authorization on the part of Purchaser is necessary to
consummate the transactions contemplated hereunder.
Section 6.4. Enforceable Agreement.
This Agreement has been duly executed and delivered by Purchaser and is the
legal, valid and binding agreement of Purchaser enforceable in accordance with
its terms.
Section 6.5. No Brokers.
As negotiations relative to this Agreement and the transactions contemplated
hereby have been carried on by Seller and Purchaser, and there has been no
participation or intervention by any other person, firm or corporation employed
or engaged by or on behalf of Purchaser in such a manner as to give rise to any
valid claim against Seller or Purchaser for a brokerage commission, finder's fee
or like commission.
ARTICLE VII
OBLIGATIONS OF PARTIES PRIOR TO AND AFTER EFFECTIVE TIME
Section 7.1. Full Access.
Seller shall afford to the officers and authorized representatives of
Purchaser, upon prior notice and subject to Seller's normal security
requirements, access to the properties, books and records pertaining to the
Banking Facilities in order that Purchaser may have full opportunity to make
reasonable investigations and to engage in operational planning, at reasonable
times without interfering with the normal business and operations of the
Banking Facilities, or the affairs of Seller relating to the Banking
Facilities. The officers of Seller shall furnish Purchaser with one standard
set of such additional financial and operating data and other information as to
its business and properties at the Banking Facilities, or where otherwise
located,
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<PAGE> 25
as Purchaser may, from time to time, reasonably request and as shall be
available, including, without limitation, information required for inclusion in
all governmental applications necessary to effect this transaction. Any
additional copies of such information shall be produced and provided at
Purchaser's expense. Nothing in this Section 7.1 shall require Seller to breach
any obligation of confidentiality or to reveal any proprietary information,
trade secrets or marketing or strategic plans. Records, including credit
information relating to the Loans, will be made available for review by
Purchaser no later than 30 calendar days after the execution of this Agreement.
It is understood that certain of Seller's records may be available only in the
form of photocopies, film copies or other non-original and non-paper media.
Section 7.2. Delivery of Magnetic Media Records.
Seller shall prepare or cause to be prepared at its expense and make available
to Purchaser at Seller's data processing center or other reasonably convenient
location magnetic media records in Seller field format not later than 60
calendar days after the execution of this Agreement and further shall make
available to Purchaser such records updated as of the Closing Date, which
records shall contain the information related to the items described in
Subsections 3.2(b)(6), (b)(7) and (b)(8) above. Such updated records shall be
made available at such time after Closing as agreed to by the parties. At its
option, Seller may provide such reports in paper format instead of magnetic
media format.
Section 7.3. Application for Approval.
Within 30 calendar days following the execution of this Agreement, Purchaser
shall prepare and file applications required by law with the appropriate
regulatory authorities for approval to purchase and assume the aforesaid assets
and liabilities, to establish branches at the locations of the Banking
Facilities, and to effect in all other respects the transactions contemplated
herein. Purchaser agrees to process such applications in a diligent manner and
on a priority basis and to provide Seller promptly with a copy of such
applications as filed (except for any confidential portions thereof) and all
material notices, orders, opinions, correspondence and other documents with
respect thereto, and to use its best efforts to obtain all necessary regulatory
approvals. On the date hereof, Purchaser knows of no reason why such
applications should not receive all such approvals. Purchaser shall promptly
notify Seller upon receipt by Purchaser of notification that any application
provided for hereunder has been accepted or denied. Seller shall provide such
assistance and information to Purchaser as shall be reasonably necessary for
Purchaser to comply with the requirements of the applicable regulatory
authorities.
Section 7.4. Conduct of Business; Maintenance of Properties.
From the date hereof until the Effective Time, Seller covenants that it will:
(a) Carry on, or cause to be carried on, the business of the Banking
Facilities substantially in the same manner as on the date hereof, use
all reasonable efforts to preserve intact its current business
organization and preserve its business relationships with depositors,
customers and others having business relationships with it and whose
accounts will be retained at the Banking Facilities; provided, however,
that Seller need not, in its sole discretion, advertise or promote new
or substantially new customer services in the principal market area of
the Banking Facilities;
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<PAGE> 26
(b) Cooperate with and assist Purchaser in assuring the orderly transition
of the business of the Banking Facilities to Purchaser from Seller; and
(c) Maintain the Real Property and the Personal Property in its current
condition, ordinary wear and tear excepted.
Section 7.5. No Solicitation by Seller.
For a period of 12 months after the Effective Time, Seller will not specifically
target and solicit customers assigned to the Banking Facilities utilizing any
customer or mailing list which consists primarily of such customers; provided,
however, these restrictions shall not restrict general mass mailings,
telemarketing calls, statement stuffers and other similar communications
directed to all the current customers of Seller or Seller's affiliates, or to
the public or newspaper, radio or television advertisements of a general nature
or otherwise prevent Seller from taking such actions as may be required to
comply with any applicable federal or state laws, rules or regulations. In
addition, these restrictions shall not restrict (a) the solicitation of (i)
customers whose accounts are normally established or maintained in offices other
than the Banking Facilities, (ii) any credit or debit card customer of Seller
with regard to such card products, or (iii) any customer which has an agreement
for merchant services with Seller or Seller's affiliates, including its venture
partners (including Unified Merchant Services) for merchant services; (b) the
ability of Seller to install, operate and serve customers' needs through
automated teller machines at any location; or (c) the solicitation of customers
whose accounts are excluded by either Purchaser or Seller from the transactions
contemplated by this Agreement.
Section 7.6. No Solicitation by Purchaser.
Purchaser shall not solicit any customer which, at the date hereof, (i) has a
credit card account with Seller for credit card products or (ii) has an
agreement with Seller or Seller's venture partner, Unified Merchant Services,
for the processing of customer's credit and debit card transactions and other
similar merchant services (said customers herein referred to as "Merchants")
during the term of any such agreements, including any renewal term thereunder,
or otherwise interfere in any way with Seller or Seller's venture partner,
Unified Merchant Services, relationship with any such Merchant. Notwithstanding
the foregoing, Purchaser may at times, or from time to time may solicit such
Merchants in Purchaser market area as part of Purchaser general direct marketing
program, or by general solicitations such as newspaper, radio and television
advertisements, as long as the Merchants as a group are not targeted for
solicitation. Purchaser shall be in compliance with the restrictions contained
above provided that (i) before mailing or telephoning, Purchaser uses its record
of Merchants to eliminate those Merchants from any mailing or telephone
solicitation list of potential customers that comes into Purchaser control and
from any mailing or telephone solicitation list that is screened by a credit
bureau at Purchaser direction, directly or indirectly, and (ii) Purchaser does
not otherwise intentionally direct any mailing or telephone solicitation or such
Merchants or any substantial portion thereof.
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<PAGE> 27
Section 7.7. Further Actions.
The parties hereto shall execute and deliver such instruments and take such
other actions as the other party may reasonably require in order to carry out
the intent of this Agreement.
Section 7.8. Fees and Expenses.
Purchaser shall be responsible for the costs of all title examinations, title
insurance fees, surveys, environmental investigation costs, its own attorneys'
and accountants' fees and expenses, software license and transfer fees,
recording costs, transfer fees, sales and use and other transfer taxes,
documentary stamps, and similar charges assessed upon deeds and assignments of
leases, regulatory applications and other expenses arising in connection
therewith as well as all costs and expenses associated with the transfer or
perfection of any security interests or liens securing Loans transferred
hereunder. Seller shall be responsible for its own attorneys' and accountants'
fees and expenses related to this transaction.
Section 7.9. Breaches with Third Parties.
If the assignment of any material claim, contract, license, lease, commitment,
sales order or purchase order (or any material claim or right or any benefit
arising thereunder) without the consent of a third party would constitute a
breach thereof or materially affect the rights of Purchaser or Seller
thereunder, then such assignment is hereby made subject to such consent or
approval being obtained.
Section 7.10. Insurance.
As of the Effective Time, Seller will discontinue its insurance coverage
maintained in connection with the Banking Facilities and the activities
conducted thereon. Purchaser shall be responsible for all insurance protection
for the Banking Facilities' premises and the activities conducted thereon
immediately following the Effective Time. Pending the Closing, risk of loss
shall be the responsibility of Seller.
Section 7.11. Public Announcements.
Seller and Purchaser agree that, from the date hereof, neither shall make any
public announcement or public comment, regarding this Agreement or the
transactions contemplated herein without first consulting with the other party
hereto and reaching an agreement upon the substance and timing of such
announcement or comment. Further, Seller and Purchaser acknowledge the
sensitivity of this transaction to the Employees and no announcements or
communications with the public or the Employees shall be made without the prior
approval of Seller until the Effective Time.
Section 7.12. Tax Reporting.
Seller shall comply with all tax reporting obligations in connection with
transferred assets and liabilities on or before the Effective Time, and
Purchaser shall comply with all tax reporting obligations with respect to the
transferred assets and liabilities after the Effective Time.
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Section 7.13. REIT Participations.
Barnett and its banking subsidiaries have previously contributed a 100%
participation interest in certain 1-4 family residential Loans (the "REIT
Loans") to Barnett Real Estate Management, Inc. (the "REIT"). The Seller
undertakes to cause the REIT to sell any such participations and to include the
participations in the Loans transferred hereunder. To the extent that
participations are sold, Seller and the REIT will furnish Purchaser with
instructions on that portion of the purchase price to be paid to the REIT for
such participations.
ARTICLE VIII
CONDITIONS TO PURCHASER'S OBLIGATIONS
The obligation of Purchaser to complete the transactions contemplated in this
Agreement are conditioned upon fulfillment, on or before the Closing, of each of
the following conditions:
Section 8.1. Representations and Warranties True.
The representations and warranties made by Seller in this Agreement shall be
true in all material respects on and as of the Effective Time as though such
representations and warranties were made at and as of such time, except for any
changes permitted by the terms hereof or consented to by Purchaser.
Section 8.2. Obligations Performed.
Seller shall (a) deliver or make available to Purchaser those items required by
Section 3.2 hereof, and (b) perform and comply in all material respects with all
obligations and agreements required by this Agreement to be performed or
complied with by it prior to or on the Effective Time.
Section 8.3. No Adverse Litigation.
As of the Effective Time, no action, suit or proceeding shall be pending or
threatened against Seller which is reasonably likely to (a) materially and
adversely affect the business, properties and assets of the Banking Facilities,
or (b) materially and adversely affect the transactions contemplated herein.
Section 8.4. Regulatory Approval.
(a) Purchaser shall have received all necessary regulatory approvals of the
transactions provided in this Agreement, all notice and waiting periods
required by law to pass shall have passed, no proceeding to enjoin,
restrain, prohibit or invalidate such transactions shall have been
instituted or threatened, and any conditions of any regulatory approval
shall have been met.
(b) Such approvals shall not have imposed any condition which is materially
disadvantageous or burdensome to Purchaser.
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ARTICLE IX
CONDITIONS TO SELLER'S OBLIGATIONS
The obligation of Seller to complete the transactions contemplated in this
Agreement are conditioned upon fulfillment, on or before the Closing, of each of
the following conditions:
Section 9.1. Representations and Warranties True.
The representations and warranties made by Purchaser in this Agreement shall be
true in all material respects at and as of the Effective Time 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 9.2. Obligations Performed.
Purchaser shall (a) deliver to Seller those items required by Section 3.2
hereof, and (b) perform and comply in all material respects with all obligations
and agreements required by this Agreement to be performed or complied with by it
prior to or on the Effective Time.
Section 9.3. No Adverse Litigation.
As of the Effective Time, no action, suit or proceeding shall be pending or
threatened against Purchaser or Seller which might materially and adversely
affect the transactions contemplated hereunder.
Section 9.4. Regulatory Approval.
(a) Seller shall have received from the appropriate regulatory authorities
approval of the transactions contemplated herein, waiting periods
required by law to pass shall have passed, no proceeding to enjoin,
restrain, prohibit or invalidate such transactions shall have been
instituted or threatened, and any conditions of any regulatory approval
shall have been met.
(b) Such approvals or Purchaser's corresponding regulatory approvals shall
not have imposed any condition which is materially disadvantageous or
burdensome to Seller and neither such regulatory approvals nor the
provisions of this Agreement will have required any action by Seller
which would result in the loss of, or modification to, regulatory
approval of the Barnett Transaction.
Section 9.5. Barnett Closing.
The Barnett Transaction shall have closed without the imposition of regulatory
conditions which would adversely impact the ability of the Seller to close this
agreement.
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ARTICLE X
TERMINATION
Section 10.1. Methods of Termination.
This Agreement may be terminated in any of the following ways:
(a) by either Seller or Purchaser in writing five calendar days in advance
of such termination, if the Closing has not occurred by May 31, 1998;
(b) at any time on or prior to the Effective Time by the mutual consent in
writing of Seller and Purchaser;
(c) by Purchaser in writing if the conditions set forth in Article VIII of
this Agreement shall not have been met by Seller or waived in writing
by Purchaser within 31 calendar days following the date of all
approvals by regulatory agencies and after all statutory waiting
periods have expired;
(d) by Seller in writing if the conditions set forth in Article IX of this
Agreement shall not have been met by Purchaser or waived in writing by
Seller within 31 calendar days following the date of all approvals by
regulatory agencies and after all statutory waiting periods have
expired;
(e) anytime prior to the Effective Time, by Seller or Purchaser in writing
if the other shall have been in breach of any representation and
warranty in any material respect (as if such representation and
warranty had been made on and as of the date hereof and on the date of
the notice of breach referred to below), or in breach of any covenant,
undertaking or obligation contained herein, and such breach has not
been cured by the earlier of 30 calendar days after the giving of
notice to the breaching party of such breach or the Effective Time;
provided, however, that there shall be no cure period in connection
with any breach of Section 7.3 hereof, so long as such breach by
Purchaser was not caused by any action or inaction of Seller, and
Seller may terminate this Agreement immediately if regulatory
applications are not filed within 30 calendar days after the date of
this Agreement as provided in that Section;
(f) by Seller in writing at any time after any applicable regulatory
authority has denied approval of any application of Purchaser for
approval of the transactions contemplated herein; or
(g) by either Seller or Purchaser, in writing five calendar days in advance
of such termination, if the Barnett Transaction is terminated prior to
completion.
Section 10.2. Procedure Upon Termination.
In the event of termination pursuant to Section 10.1 hereof, and except as
otherwise stated therein, written notice thereof shall be given to the other
party, and this Agreement shall terminate immediately upon receipt of such
notice unless an extension is consented to by the party having the right to
terminate.
If this Agreement is terminated as provided herein,
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(a) each party will return all documents, work papers and other materials
of the other party, including photocopies or other duplications
thereof, relating to this transaction, whether obtained before or after
the execution hereof, to the party furnishing the same;
(b) all information received by either party hereto with respect to the
business of the other party (other than information which is a matter
of public knowledge or which has heretofore been published in any
publication for public distribution or filed as public information with
any governmental authority) shall not at any time be used for any
business purpose by such party or disclosed by such party to third
persons; and
(c) each party will pay its own expenses.
Section 10.3. Payment of Expenses.
Should the transactions contemplated herein not be consummated because of a
party's breach of this Agreement, in addition to such damages as may be
recoverable in law or equity, the other party shall be entitled to recover from
the breaching party upon demand, itemization and documentation, its reasonable
outside legal, accounting, consulting and other out-of-pocket expenses.
ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.1. Completion of Barnett Transaction.
Seller and Purchaser acknowledge that the completion of the transactions
contemplated by this Agreement are contingent and dependent upon the completion
and closing of the Barnett Transaction. In the event that this Agreement is
terminated as provided for in Section 10.1(g), upon such termination neither
party shall be obligated in any way to the other.
Section 11.2. Amendment and Modification.
The parties hereto, by mutual consent, may amend, modify and supplement this
Agreement in such manner as may be agreed upon by them in writing.
Section 11.3. Waiver or Extension.
Except with respect to required approvals of the applicable governmental
authorities, either party, by written instrument signed by a duly authorized
officer, may extend the time for the performance of any of the obligations or
other acts of the other party and may waive (a) any inaccuracies in the
representations and warranties contained herein or in any document delivered
pursuant hereto or (b) compliance with any of the undertakings, obligations,
covenants or other acts contained herein.
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Section 11.4. Assignment.
This Agreement and all of the provisions hereof shall be binding upon, and shall
inure to the benefit of, the parties hereto and their permitted assigns, but
neither this Agreement nor any of the rights, interests or obligations hereunder
shall be assigned by either of the parties hereto without the prior written
consent of the other.
Section 11.5. Confidentiality.
Seller and Purchaser agree that any confidentiality agreements between Seller
and Purchaser shall survive the execution hereof and the consummation of the
transactions contemplated herein.
Section 11.6. Addresses for Notices, Etc.
All notices, requests, demands, consents and other communications provided for
hereunder and under the related documents shall be in writing and mailed (by
registered or certified mail, return receipt requested), telegraphed, telexed,
telecopied or personally delivered (with receipt thereof acknowledged) to the
applicable party at the address indicated below:
If to Seller: NationsBank Corporation
Attn.: Frank L. Gentry
100 North Tryon Street
NC1-007-33-02
Charlotte, NC 28255
Fax: (704) 386-6416
with a copy to: NationsBank Corporation
Attn: General Counsel
100 North Tryon Street
NC1-007-20-01
Charlotte, NC 28255
Fax Number: (704) 386-2400
If to Purchaser: Republic Bank
Attn: John W. Sapanski, Chairman, CEO and
President
111 Second Avenue, N.E.
St. Petersburg, Florida 33701
Fax: (813) 824-8860
with a copy to: Republic Bank
Attn: Chris Hunter, General Counsel
111 Second Avenue, N.E.
St. Petersburg, Florida 33701
Fax: (813) 824-8860
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or, as to each party, at such other address as shall be designated by such party
in a written notice to the other party complying as to delivery with the terms
of this Section.
Section 11.7. Counterparts.
This Agreement may be executed simultaneously in two or more counterparts, each
of which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
Section 11.8. Headings.
The headings of the Sections and Articles of this Agreement are inserted for
convenience only and shall not constitute a part thereof.
Section 11.9. Governing Law.
This Agreement shall be governed by, and construed in accordance with, the laws
of the state of North Carolina.
Section 11.10. Sole Agreement.
Except for the Confidentiality Agreement, this Agreement and the exhibits and
attachments hereto represent the sole agreement between the parties hereto
respecting the transactions contemplated hereby and all prior or contemporaneous
written or oral proposals, agreements in principle, representations, warranties
and understandings between the parties with respect to such matters are
superseded hereby and merged herein.
Section 11.11. Severability.
If any provision of this Agreement is invalid or unenforceable, the balance
of this Agreement shall remain in effect.
Section 11.12. Parties In Interest.
Nothing in this Agreement, express or implied, expressly including, without
limiting the generality of the foregoing in any way, the provisions of Section
2.6(a) hereof, is intended or shall be construed to confer upon or give to any
person (other than the parties hereto, their successors and permitted assigns)
any rights or remedies under or by reason of this Agreement, or any term,
provision, condition, undertaking, warranty, representation, indemnity, covenant
or agreement contained herein.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their duly authorized officers as of the date first written above.
NATIONSBANK CORPORATION
By:/s/ Charles P. Welch
-------------------------------
Name: Charles P. Welch
-----------------------------
Title: Senior Vice President
-----------------------------
REPUBLIC BANK
By:/s/ John W. Sapanski
-------------------------------
Name: John W. Sapanski
-----------------------------
Title: CEO
-----------------------------
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PURCHASE AND ASSUMPTION AGREEMENT
BETWEEN
NATIONSBANK CORPORATION
AND
REPUBLIC BANK
EXHIBIT LIST
<TABLE>
<CAPTION>
Exhibit No. Description
----------- -----------
<S> <C>
1.l(b) List of Banking Facilities
2.1(b) List of Excluded Assets
2.4(j) Form of Power of Attorney
2.6(c) Severance Benefits
3.2(b)(1) Form of Special Warranty Deed
3.2(b)(2) Form of Bill of Sale
3.2(b)(3) Form of Assignment and Assumption Agreement
3.2(b)(4) Form of Assignment and Assumption of Lease
3.2(b)(15) Form of Closing Statement
</TABLE>
31
<PAGE> 36
EXHIBIT 1.1 (b)
PURCHASE AND ASSUMPTION AGREEMENT
BETWEEN
NATIONSBANK CORPORATION
AND
REPUBLIC BANK
LIST OF BANKING FACILITIES
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------
MARKET BRANCH NAME ADDRESS
- --------------------------------------------------------------------------------------------------------
<S> <C> <C>
Lake City Lake City 100 N. 1st Street
Live Oak Live Oak 535 S. Ohio Avenue
Plantation Key Plantation Key 90184 Overseas Highway
Marathon Marathon 6090 Overseas Highway
Key West Key West - Main 1010 Kennedy Drive
Silver Springs Silver Springs 5431 E. Silver Springs Blvd.
Ocala Forest 15825 N.E. Highway 40
- --------------------------------------------------------------------------------------------------------
</TABLE>
32
<PAGE> 37
EXHIBIT 2.1(b)
PURCHASE AND ASSUMPTION AGREEMENT
BETWEEN
NATIONSBANK CORPORATION
AND
REPUBLIC BANK
All fixtures, equipment and other items of personal property related to
Barnett's Merchandising Fixture Systems and located at the Banking Facilities,
including those items listed or depicted on the attached schedule.
33
<PAGE> 38
BARNETT MERCHANDISING FIXTURE SYSTEM
CORE FIXTURES:
01A Entry/Exit Display:
Promotional floor display for placement at Bank entrance/exit. 6'6" x 20"
01B Entry/Ideas Center:
Promotional floor display with a brochure rack on one side and a poster on the
opposite side. For placement at entry/exit. 6'6" x 20"
02 Ideas Center
A. Floorstanding brochure rack. 6'6" x 20"
B. 1 panel wall brochure rack. 39" x 32.5"
C. 2 panel wall brochure rack. 39" x 65"
03 Behind Teller Display
A. Wall hanging display which is placed directly behind teller windows.
24" x 6'
B. One sided display hung from ceiling and placed directly behind teller
windows. 24" x 6'
C. Two sided display hung from ceiling and placed directly behind teller
windows. 24" x 6'
04 Teller Fixture Display
A. Brochure pocket and promotional sign holder for placement directly on face
of teller counter. 11" x 20"
B. Brochure pocket and promotional sign holder with an overhanging bottom lip
for placement directly on face of teller counter. 11" x 20"
C. Brochure pocket and promotional sign holder for flexible placement on top
of teller counter. 11" x 20"
06 Door Sign
A promotional or holiday sign holder for all public entrances. 11" x 13"
07 Regulatory Sign
Displays all required regulatory disclosures. 36 x 24.5"
08 Drive Up Banner Stand
Upright banner holders that are placed at the top of the drive thru lanes.
8'6" x 20"
09 Drive Up Topper
Signholder that is placed either flat on the pneumatic tube or is clamped on
top of the unit. 11" x 11"
<PAGE> 39
[PICTURE]
01A Entry/Exit Display
[PICTURE]
01B Entry/Ideas Center
[PICTURE]
02: Ideas Center
A. Floor Standing
[PICTURE]
02: Ideas Center
B. 1 Panel
C. 2 Panel
[PICTURE]
03: Behind Teller Display
A. Wall
B. Ceiling (One Sided)
C. Ceiling (Two Sided)
[PICTURE]
04: Teller Fixture
A. Flat
B. Lip
C. Base
[PICTURE]
06: Door Sign
[PICTURE]
07: Regulatory Sign
[PICTURE]
08: Drive Up
Banner Stand
[PICTURE]
09: Drive Up Topper
A. Flat
B. Base
C. Clamp
<PAGE> 40
The following items are also located in each banking center and are considered
proprietary:
acrylic poster stand with pockets
storage box for merchandising campaigns
tool kit
cleaning kit
merchandising handbook
graphics
from past campaigns
regulatory posters
holiday signs
semi-permanent graphics (in fixtures)
brochures
<PAGE> 41
EXHIBIT 2.4(i)
PURCHASE AND ASSUMPTION AGREEMENT
BETWEEN
NATIONSBANK CORPORATION
and
REPUBLIC BANK
POWER OF ATTORNEY
THIS POWER OF ATTORNEY is dated this ______ day of ___________ 199_,
by ________________________, a ____________________ ("SELLER"), to be effective
as of __p.m., on ____, 199_.
WITNESSETH:
WHEREAS, Seller and ______________ ("Purchaser") have entered into a
Purchase and Assumption Agreement dated as of ______________, 199_ (the
"Agreement"), which provides for the sale by Seller to Purchaser of certain
personal property; and
WHEREAS, in a Bill of Sale to Purchaser dated ____________, 199_ (the
"Bill of Sale"), Seller has agreed, from time to time, at the request of
Purchaser to execute, acknowledge and deliver to Purchaser any and all
instruments, documents, endorsements, assignments, information, materials and
other papers that may be reasonably required to (i) transfer to Purchaser's
certain Assets (as defined in the Bill of Sale) being acquired by Purchaser
pursuant to the Agreement, including loans and the collateral therefor to the
extent of Seller interest in such collateral and files and records relating to
such loans, (ii) enable Purchaser to bill, collect, service and administer the
loans transferred thereby and (iii) give full force and effect to the intent and
purpose of the Bill of Sale.
NOW, THEREFORE, for good and valuable consideration, receipt of which
is hereby acknowledged, Seller hereby irrevocably appoints and authorizes the
President or any Vice President, or the Secretary or any Assistant Secretary, of
Purchaser as its attorney-in-fact [solely for the purpose of endorsing and
recording, pursuant to the Bill of Sale, certificates of title for vehicles and
similar documents,] provided, such power of attorney is not intended to and does
not convey to Purchaser any right to endorse or record any documents of title
relating to collateral other than collateral transferred pursuant to the Bill of
Sale as described in the preceding paragraph.
34
<PAGE> 42
IN WITNESS WHEREOF, Seller has caused this Power of Attorney to be duly
executed by its duly authorized officer as of the day and year first above
written.
WITNESSES:
---------------------------------------
By:
- ---------------------------------- ------------------------------------
Its:
-----------------------------------
STATE OF )
---------------------- )
)
COUNTY OF )
---------------------
Before me, the undersigned Notary Public, in and for the State and
County aforesaid, duly commissioned, qualified and acting, personally appeared
__________________, with whom I am personally acquainted (or proved to me on the
basis of satisfactory evidence), and who, upon oath, acknowledged him/herself to
be _______________ of _____________, a _________________, and s/he, as such
officer, being authorized so to do, executed the foregoing instrument for the
purposes therein contained by signing the name of the association by him/herself
as such officer.
WITNESS my hand and official seal of office at ___________________,
County, ______________________________, this the _______day of _______________,
199_.
--------------------------------------
Notary Public
My commission expires:
- ----------------------------------
35
<PAGE> 43
EXHIBIT 2.6(c)
PURCHASE AND ASSUMPTION AGREEMENT
BETWEEN
NATIONSBANK CORPORATION
AND
REPUBLIC BANK
SEVERANCE BENEFITS
SEVERANCE PAY. Each Employee who has a [Qualified Termination] will be eligible
to receive Severance Pay in an amount equal to his Base Pay multiplied by his
whole and partial Years of Service (calculated to the nearest one-tenth year and
with a minimum of 2.0 years), with the product multiplied by his salary grade
factor as listed in the following chart:
<TABLE>
<CAPTION>
SALARY GRADE FACTOR
<S> <C>
1-7 1.0
8 1.25
9 1.3
10 1.4
11 1.5
12-15 1.7
16+ 2.0+
</TABLE>
MINIMUM CREDIT FOR YEARS OF SERVICE. In calculating Severance Pay, the Employers
will grant credit for 2.0 Years of Service to each Employee whose actual Years
of Service are less than 2.0.
MAXIMUM SEVERANCE PAY. No Employee will be eligible for Severance Pay under this
Plan in an amount that exceeds twice the sum of (a) his annual Base Pay in
effect on his Termination Date, plus (b) all other cash compensation and the
value of all his Employer-provided benefits for the 12-month period preceding
his Termination Date.
36
<PAGE> 44
EXHIBIT 3.2(b)(1)
Tax ID Number:_______________
Prepared by:
Tia L. Cottey, Esquire
NationsBank, N.A.
100 North Tryon Street
Charlotte, NC 28255-0065
SPECIAL WARRANTY DEED
_____________,a ______________, successor to ("Grantor") whose address
is _______________________ , for and in consideration of the sum of TEN AND
NO/100 DOLLARS ($10.00) paid to Grantor and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, has
GRANTED, SOLD and CONVEYED and does hereby GRANT, SELL and CONVEY unto,
_______________ a Florida __________________ ("Grantee"), whose address is
_____________________, in fee simple, that certain land located in
___________________County, Florida, being more particularly described in Exhibit
A, attached hereto and incorporated herein by reference, together with all
improvements, if any, located on such land (such land and improvements being
collectively referred to as the "Property").
This conveyance is made and accepted subject to all matters (the
"Permitted Exceptions") set forth in Exhibit B, attached hereto and incorporated
herein by reference.
TO HAVE AND TO HOLD the Property, together with all and singular the
rights and appurtenances pertaining thereto, including all of Grantor's right,
title and interest in and to adjacent streets, alleys and rights-of-way, subject
to the Permitted Exceptions, unto Grantee and Grantee's heirs, successors and
assigns forever. And Grantor hereby covenants with Grantee that, except as above
noted, that at the time of the delivery of this Special Warranty Deed the
Property was free from all encumbrances made by it and that Grantor will warrant
and defend the same against the lawful claims and demands of all persons
claiming by, through or under Grantor, but against none other.
BY ACCEPTANCE OF THIS DEED, GRANTEE ACKNOWLEDGES THAT GRANTOR HAS NOT
MADE, DOES NOT MAKE AND SPECIFICALLY NEGATES AND DISCLAIMS ANY REPRESENTATIONS,
WARRANTIES, PROMISES, COVENANTS, AGREEMENTS OR GUARANTIES OF ANY KIND OR
CHARACTER WHATSOEVER, WHETHER EXPRESS OR IMPLIED, ORAL OR WRITTEN, PAST, PRESENT
OR FUTURE, OF, AS TO, CONCERNING OR WITH RESPECT TO (A) THE VALUE, NATURE,
QUALITY OR CONDITION OF THE PROPERTY, INCLUDING, WITHOUT LIMITATION, THE WATER,
SOIL AND GEOLOGY, (B) THE INCOME TO BE DERIVED FROM THE PROPERTY, (C) THE
SUITABILITY OF THE PROPERTY FOR ANY AND ALL ACTIVITIES AND USES WHICH GRANTEE
MAY CONDUCT THEREON, (D) THE COMPLIANCE OF OR BY THE PROPERTY OR ITS OPERATION
WITH ANY LAWS, RULES, ORDINANCES OR REGULATIONS OF ANY APPLICABLE
37
<PAGE> 45
GOVERNMENTAL AUTHORITY OR BODY, (E) THE HABITABILITY MERCHANTABILITY,
MARKETABILITY, PROFITABILITY OR FITNESS FOR A PARTICULAR PURPOSE OF THE
PROPERTY, (F) THE MANNER OR QUALITY OF THE CONSTRUCTION OR MATERIALS, IF ANY,
INCORPORATED INTO THE PROPERTY, (G) THE MANNER, QUALITY, STATE OF REPAIR OR LACK
OF REPAIR OF THE PROPERTY, OR (H) ANY OTHER MATTER OR WITH RESPECT TO THE
PROPERTY, AND SPECIFICALLY, THAT GRANTOR HAS NOT MADE, DOES NOT MAKE AND
SPECIFICALLY DISCLAIMS ANY REPRESENTATIONS REGARDING COMPLIANCE WITH ANY
ENVIRONMENTAL PROTECTION, POLLUTION OR LAND USE, ZONING AND DEVELOPMENT OF
REGIONAL IMPACT LAWS, RULES, REGULATIONS, ORDERS OR REQUIREMENTS, INCLUDING THE
DISPOSAL OR EXISTENCE IN OR ON THE PROPERTY, OF ANY HAZARDOUS MATERIALS, WASTES
OR SUBSTANCES DEFINED IN ANY FEDERAL, STATE OR LOCAL LAWS OR ANY OTHER SPECIALLY
REGULATED MATERIALS INCLUDING, BUT NOT LIMITED TO, ASBESTOS, PETROLEUM PRODUCTS,
POLYCHLORINATED BIPHENYL, OR RADON GAS. GRANTEE FURTHER ACKNOWLEDGES THAT TO THE
MAXIMUM EXTENT PERMITTED BY LAW, THE SALE OF THE PROPERTY IS MADE ON AN "AS IS"
CONDITION AND BASIS WITH ALL FAULTS. THE FOREGOING CLAUSE SUPERSEDES ANY
REPRESENTATIONS AND WARRANTIES CONCERNING THE PROPERTY CONTAINED IN THE PURCHASE
AND ASSUMPTION AGREEMENT DATED, _____________, 199__, ENTERED INTO BY OR FOR THE
BENEFIT OF GRANTOR OR GRANTEE.
Ad valorem taxes for the present year having been prorated, Grantee
hereby assumes payment thereof, and subsequent assessments for that and prior
years due to change in land usage, ownership, or both.
38
<PAGE> 46
EXECUTED on the date set forth in the acknowledgment attached hereto to
be effective as of the _____________ day of ____________________,1997.
WITNESSES:
----------------------------------------
a
---------------------------------------
By:
- ---------------------------------- -------------------------------------
Name: Name:
----------------------------- -----------------------------------
Title:
----------------------------------
- ----------------------------------
Name: (CORPORATE SEAL)
-----------------------------
STATE OF FLORIDA
COUNTY OF HILLSBOROUGH
The foregoing instrument was acknowledged before me on
____________________________, 1997, by ________________, as _____________ of
______________________, a ___________________, on behalf of the
____________________. He/She is personally known to me or has produced
________________________ as identification.
----------------------------------------
Name:
-----------------------------------
(SEAL) NOTARY PUBLIC, State of Florida
Serial Number (if any)
------------------
My Commission Expires:
------------------
39
<PAGE> 47
EXHIBIT A TO SPECIAL WARRANTY DEED
40
<PAGE> 48
EXHIBIT B TO SPECIAL WARRANTY DEED
PERMITTED EXCEPTIONS
TO DEED
1. Visible and apparent easements and all underground easements, if any, the
existence of which may arise by unrecorded grant or by use.
2. Any and all unrecorded leases, if any, and rights of parties therein.
3. Taxes and assessments for the year of closing and subsequent years.
4. All valid and enforceable covenants, restrictions, reservations, easements
and other matters as shown on the public record.
5. All matters which would be disclosed by an accurate survey of the Property.
6. Governmental rights of police power or eminent domain unless notice of the
exercise of such rights appears in the public records as of the date
hereof; and the consequences of any law, ordinance or governmental
regulation including, but not limited to, building and zoning ordinances.
7. Defects, liens, encumbrances, adverse claims or other matters (1) not known
to the Grantor and not shown by the public records but known to the Grantee
as of the date hereof and not disclosed in writing by the Grantee to the
Grantor prior to the date hereof; (2) resulting in no loss or damage to the
Grantee; or (3) attaching or creating subsequent to the date hereof.
41
<PAGE> 49
EXHIBIT 3.2(b)(2)
PURCHASE AND ASSUMPTION AGREEMENT
BETWEEN
NATIONSBANK CORPORATION
AND
REPUBLIC BANK
BILL OF SALE
THIS BILL OF SALE is dated this __________ day of _____________, 199__,
by _______________________, a ___________________________________ ("Seller").
WITNESSETH:
WHEREAS, Seller and _______________________, a_______________________
______________________________________("Purchaser"), have entered into a
Purchase and Assumption Agreement dated as of ________________________________,
199_ (the "Agreement"), which provides for the sale by Seller to Purchaser of
certain personal property and loans related to Seller offices identified on the
list attached hereto (the "Banking Facilities"), all as set forth in the
Agreement. Capitalized terms used, but not defined, herein shall have the
meanings defined in the Agreement;
NOW, THEREFORE, Seller, for good and valuable consideration, receipt of
which is hereby acknowledged, does hereby grant, bargain, sell, assign, set
over, convey and transfer to Purchaser all of its right, title and interest in
and to the following assets (the "Assets"):
(a) All furniture, fixtures, equipment and other tangible personal
property located in the Banking Facilities, except for those items
listed in Exhibit 2.1 (b) of the Agreement;
(b) All of the loans maintained, serviced and listed in Seller general
ledger as loans of the Banking Facilities (except for those loans
described in Section 2.4(b) of the Agreement) (the "Loans"); and
(c) All of Seller files and records related to the Loans and the
Equipment Leases, Deposit Liabilities and other liabilities (as
such terms are defined or described in the Agreement).
[Seller, for itself and its successors and assigns, does hereby
covenant and agree to and with Purchaser and its successors and assigns that it
(i) owns the Assets free and clear of any mortgages, liens, security interests
or pledges, and (ii) shall, from time to time, at the request of Purchaser,
execute, acknowledge and deliver to Purchaser any and all further instruments,
documents, endorsements,
42
<PAGE> 50
assignments, information, materials and other papers that may be reasonably
required to transfer the Assets to Purchaser, to enable Purchaser to bill,
collect, service and administer the Loans and to give full force and effect to
the full intent and purposes of this Bill of Sale.]
IN WITNESS WHEREOF, Seller has caused this Bill of Sale to be duly
executed by its duly authorized officer as of the day and year first above
written.
----------------------------------------
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
43
<PAGE> 51
EXHIBIT 3.2(b)(3)
PURCHASE AND ASSUMPTION AGREEMENT
BETWEEN
NATIONSBANK CORPORATION
AND
REPUBLIC BANK
ASSIGNMENT AND ASSUMPTION AGREEMENT
THIS ASSIGNMENT AND ASSUMPTION AGREEMENT is entered into this ____ day
of _____________ 199__, by and between, ____________________________________, a
_____________________ ("Seller"), and ________________________________, a
____________________________ ("Purchaser").
WITNESSETH:
WHEREAS, Seller and Purchaser have entered into a Purchase and
Assumption Agreement dated as of ___________________, 199__ (the "Agreement"),
which provides for the assignment by Seller of all of its rights and interests
in and to certain leases, contracts, deposit accounts and other liabilities
related to Seller offices identified on the list attached hereto (the "Banking
Facilities"), and the assumption by Purchaser of all of Seller liabilities and
obligations thereunder, all as set forth in the Agreement;
NOW, THEREFORE, in consideration of the foregoing, and for other good
and valuable consideration, receipt of which is hereby acknowledged by Seller
and Purchaser, Seller hereby assigns, transfers and sets over to Purchaser all
of Seller's rights and interest to, and Purchaser hereby assumes all of Seller's
liabilities and obligations in connection with, the following assets (the
"Assets");
(a) All equipment leases for equipment located at the Banking
Facilities (the "Equipment Leases");
(b) All deposit accounts located at the Banking Facilities, except for
those deposit accounts and liabilities described in Section 2.3(b)
of the Agreement (the "Deposit Liabilities"); and
(c) Safe Deposit Contracts.
This Assignment and Assumption Agreement shall be binding upon, and
shall inure to the benefit of, Seller, Purchaser, and each of their successors
and assigns and shall be subject to the terms and conditions of the Agreement.
In the event of a conflict between any of the terms and provisions hereof and
the Agreement, the Agreement shall be deemed to control.
44
<PAGE> 52
This Assignment and Assumption Agreement, and the rights and
obligations of the parties hereunder, shall be governed by and construed in
accordance with the laws of the State of ___________________.
IN WITNESS WHEREOF, the parties hereto have caused this Assignment and
Assumption Agreement to be executed by their duly authorized officers, all as of
the day and year first above written.
----------------------------------------
By:
-------------------------------------
Title:
----------------------------------
----------------------------------------
By:
-------------------------------------
Title:
----------------------------------
45
<PAGE> 53
EXHIBIT 3.2(b)(4)
Prepared By/Return To
Tia L. Cottey Esq.
NationsBank Corporation
100 N. Tryon Street, 20th Floor
Legal Department
Charlotte, North Carolina 28255
ASSIGNMENT AND ASSUMPTION OF LEASE
(WITH LANDLORD CONSENT)
The parties to this Agreement and Assumption of Lease (the "Assignment")
are ____________, a ("Assignor"), and __________, a ___________________________
("Assignee").
WHEREAS, under the terms of the Lease attached hereto as Exhibit "A"
(the "Lease"), Assignor is the tenant of certain real property and improvements
situated in County, Florida, and having a street address of
_______________________, Florida (the "Leased Premises"); and
WHEREAS, Assignor has agreed to assign all of its right, title and
interest in and to the Lease to Assignee, and Assignee has agreed to assume and
perform Assignor's liabilities and obligations arising under the Lease on and
after the date hereof, all in accordance with this Assignment.
NOW THEREFORE, in consideration of the foregoing and the agreements and
covenants herein set forth, the sum of TEN AND NO/100 DOLLARS ($10.00), and
other good and valuable consideration paid by Assignee to Assignor, the receipt
and sufficiency of which are hereby acknowledged, effective as of ____________,
1997 (the "Effective Date"), Assignor does hereby ASSIGN, TRANSFER, SET OVER and
DELIVER unto Assignee WITHOUT RECOURSE, REPRESENTATION OR WARRANTY all of
Assignor's right, title and interest under the Lease as tenant or lessee in and
to the Lease and all of the rights, benefits and privileges of the tenant or
lessee thereunder, but subject to all terms, conditions, reservations and
limitations set forth in the Lease.
By accepting this Assignment and by its execution hereof, Assignee
hereby assumes and agrees to perform all of the terms, covenants and conditions
of the Lease on the part of the tenant or lessee therein required to be
performed from and after the Effective Date, including, but not limited to, the
obligation to pay, in accordance with the terms of the Lease, rent and all other
monetary obligations. On or before the Effective Date, Assignee shall reimburse
Assignor for any and all security deposits paid by Assignor under the Lease.
Assignee hereby agrees to indemnify and hold harmless Assignor from and
against any and all loss, cost or expense (including, without limitation,
reasonable attorney's fees) resulting by reason of Assignee's failure to perform
any of the obligations of tenant or lessee under the Lease after the Effective
Date. Assignee hereby releases, acquits, and forever discharges Assignor and its
employees, agents, officers,
46
<PAGE> 54
subsidiaries, affiliates, successors and assigns, from any and all actions,
causes of actions, claims, demands, costs, losses, and expenses of any kind
whatsoever, both known and unknown, arising out of any matter, happening or
thing relating to the Lease.
Assignee hereby acknowledges that the Leased Premises shall be
delivered by Assignor and accepted by Assignee in "AS IS" condition without
representation or warranty as to the condition of the Leased Premises or their
suitability for any particular use.
EXCEPT AS EXPRESSLY SET FORTH HEREIN, ASSIGNOR DISCLAIMS, AND ASSIGNEE
ACKNOWLEDGES AND ACCEPTS THAT ASSIGNOR HAS DISCLAIMED, TO THE MAXIMUM EXTENT
PERMITTED BY LAW, ANY AND ALL REPRESENTATIONS, WARRANTIES, OR GUARANTIES OF ANY
KIND, ORAL OR WRITTEN, WHETHER EXPRESS OR IMPLIED, CONCERNING THE LEASED
PREMISES INCLUDING, BUT NOT LIMITED TO: (I) THE VALUE, CONDITION,
MERCHANTABILITY, MARKETABILITY, PROFITABILITY, SUITABILITY, OR FITNESS FOR A
PARTICULAR USE OR PURPOSE OF THE LEASED PREMISES; (II) THE MANNER OR QUALITY OF
THE CONSTRUCTION OF MATERIALS, IF ANY, INCORPORATED INTO THE LEASED PREMISES; OR
(III) THE MANNER, QUALITY, STATE OF REPAIR, OR LACK OF REPAIR OF THE LEASED
PREMISES. ASSIGNOR IS NOT LIABLE OR BOUND IN ANY MANNER BY ANY VERBAL OR WRITTEN
STATEMENTS, REPRESENTATIONS, OR INFORMATION PERTAINING TO THE LEASE OR THE
LEASED PREMISES, FURNISHED BY ANY REAL ESTATE BROKER OR FINDER OR OTHER PERSON
UNLESS THE SAME ARE SPECIFICALLY SET FORTH HEREIN. ASSIGNEE SHALL TAKE THE
LEASED PREMISES SUBJECT TO ALL LIENS, ENCUMBRANCES AND OTHER MATTERS OF RECORD
ENCUMBERING THE LEASED PREMISES AS OF THE EFFECTIVE DATE HEREOF. THE FOREGOING
CLAUSE SUPERSEDES ANY REPRESENTATIONS AND WARRANTIES CONCERNING THE LEASED
PREMISES CONTAINED IN THE PURCHASE AND ASSUMPTION AGREEMENT DATED ____________,
199__, ENTERED INTO BY OR FOR THE BENEFIT OF ASSIGNOR OR ASSIGNEE.
All of the covenants, terms and conditions set forth herein shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective heirs, executors, administrators, personal representatives,
successors and assigns.
Assignee shall pay all documentary stamp taxes, if any, due in
connection with this Assignment and shall indemnify and hold Assignor harmless
from and against the claims of the Florida Department of Revenue for the payment
of documentary stamp taxes in connection with this Assignment or the Lease
47
<PAGE> 55
WITNESSES: , a
-----------------------------------
---------------------------------------
By:
- ---------------------------------- ------------------------------------
Name: Name:
----------------------------- ----------------------------------
Title:
---------------------------------
By:
- ---------------------------------- ------------------------------------
Name: Name:
----------------------------- ----------------------------------
Title:
---------------------------------
"ASSIGNOR"
AGREED TO AND ACCEPTED BY ASSIGNEE:
, a
-----------------------------------
---------------------------------------
By:
- ---------------------------------- ------------------------------------
Name: Name:
----------------------------- ----------------------------------
Title:
---------------------------------
By:
- ---------------------------------- ------------------------------------
Name: Name:
----------------------------- ----------------------------------
Title:
---------------------------------
Address of Assignee:
---------------------------------------
---------------------------------------
"ASSIGNEE"
49
<PAGE> 56
STATE OF
-------------------------------
COUNTY OF
------------------------------
The foregoing instrument was acknowledged before me on ______________,
1997, by _____________ as ______________ of __________________, a
_________________ on behalf of the ___________________. He/She is personally
known to me or has produced ___________________ as identification.
----------------------------------------
Name:
-----------------------------------
NOTARY PUBLIC, State of
-----------------
(SEAL) Serial Number (if any)
------------------
My Commission Expires:
------------------
STATE OF FLORIDA
COUNTY OF HILLSBOROUGH
The foregoing instrument was acknowledged before me on
_____________________________________, 1997, by _______________________________
as____________________ of __________________________, a _______________________,
on behalf of the ___________________________. He/She is personally known to me
or has produced __________________________as identification.
----------------------------------------
Name:
-----------------------------------
NOTARY PUBLIC, State of
-----------------
(SEAL) Serial Number (if any)
------------------
My Commission Expires:
------------------
[LANDLORD CONSENT CONTINUED ON NEXT PAGE]
50
<PAGE> 57
CONSENT AND RELEASE BY LANDLORD
In consideration of ten dollars ($10.00) and other valuable
consideration, the receipt and sufficiency _______________________ of which is
hereby acknowledged, ________________________________________________
("Landlord"), does hereby acknowledge, approve and consent to the foregoing
Assignment, and, effective as of _________________, 1997, Landlord and its
successors and assigns hereby release, acquit, satisfy and forever discharge
Assignor and its employees, agents, officers, subsidiaries, affiliates,
successors and assigns, from any and all actions, causes of action, claims,
demands, rights, damages, costs, losses, expenses, occurrences, and liability of
any kind whatsoever, both known and unknown, arising out of any matter,
happening or thing, from the beginning of time and relating to the Lease.
Landlord acknowledges and agrees that Assignor is released from all liability
under the Lease, effective as of ________, 1997.
Landlord represents and warrants that it has full authority to execute
this Assignment without the joinder or consent of any party (or if such consent
is required, that Landlord has secured same), including, but not limited to, any
lenders holding mortgages encumbering the Leased Premises, and that Landlord has
not assigned any of its rights, title or interest in the Lease to any other
party, which representations and warranties shall survive the execution of this
Assignment and the release of Assignor under this Lease. Landlord agrees to
indemnify and hold Assignor harmless from and against any claims, losses,
demands, liabilities, damages and expenses of any kind or nature, including,
without limitation, attorneys fees and costs, incurred or arising by reason of a
breach or violation of any of the agreements, obligations, covenants, or
representations and warranties of Landlord contained herein.
---------------------------------------
---------------------------------------
---------------------------------------
By:
- ---------------------------------- ------------------------------------
Printed Name:
--------------------- ---------------------------------------
Name:
- ---------------------------------- ----------------------------------
Printed Name: Title:
--------------------- ---------------------------------
"LANDLORD"
51
<PAGE> 58
STATE OF FLORIDA
COUNTY OF ______________________
The foregoing instrument was acknowledged before me this ______day of
_____________, 1997 by ___________________________, as ________________________,
a _____________________, on behalf of the __________________________. He/She is
personally known to me or has produced ___________________ as identification.
My Commission Expires:
---------------------------------------
- ---------------------------------- NOTARY PUBLIC
(SEAL) ---------------------------------------
(Type or Print Name)
52
<PAGE> 59
EXHIBIT "A" TO ASSIGNMENT AND ASSUMPTION AGREEMENT
LEASE AGREEMENT
53
<PAGE> 60
EXHIBIT 3.2(b)(15)
PURCHASE AND ASSUMPTION AGREEMENT
BETWEEN
NATIONSBANK CORPORATION
AND
REPUBLIC BANK
CLOSING STATEMENT
(PRE-CLOSING BALANCE SHEET AS OF _________________________)
CASH DUE PURCHASER FOR:
Deposit liabilities (including accrued interest)
------------------------
[Pro rata real property taxes]
------------------------
Total Cash due Purchaser
------------------------
CASH DUE SELLER FOR:
------------------------
Net Book Value of Real and Personal Property
------------------------
Premium for Real and Personal Property
------------------------
Other
------------------------
Premium for Deposit Liabilities
------------------------
Net Book Value of Loans (including accrued interest)
------------------------
Premiums for Loans
------------------------
Coins and currency
------------------------
Pro rata FDIC insurance
------------------------
Other prorated items
------------------------
Total Cash due Seller
------------------------
Net cash due (Purchaser)(Seller)
------------------------
54
<PAGE> 61
Seller hereby approves the Closing Statement and acknowledges receipt of the
total cash due Seller. Purchaser hereby approves the Closing Statement,
acknowledges receipt of the net cash due Purchaser and assumes liability for
payment of all taxes and other items as provided for in the Purchase and
Assumption Agreement between Seller and Purchaser dated as of _____________,
199_ (the "Agreement"). Seller and Purchaser agree to make subsequent
adjustments to the extent necessary in accordance with Section 3.3 of the
Agreement.
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By:
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Name:
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Title:
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Date:
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By:
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Name:
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Title:
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Date:
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55
<PAGE> 1
Exhibit 10.2
PURCHASE AND ASSUMPTION AGREEMENT
BETWEEN
NATIONSBANK CORPORATION
AND
REPUBLIC BANCSHARES, INC.
<PAGE> 2
PURCHASE AND ASSUMPTION AGREEMENT
<TABLE>
<S> <C>
ARTICLE I
THE ASSETS ............................................................ 1
Section 1.1. Banking Facilities................................... 1
ARTICLE II
TRANSFER OF ASSETS AND LIABILITIES 1
Section 2.1. Transferred Assets................................... 1
Section 2.2. Purchase Price....................................... 3
Section 2.3. Deposit Liabilities.................................. 5
Section 2.4. Loans Transferred.................................... 7
Section 2.5. Safe Deposit Business................................ 9
Section 2.6. Employee Matters..................................... 10
Section 2.7. Records and Data Processing.......................... 10
Section 2.8. Security............................................. 11
Section 2.9. Taxes and Fees; Proration of Certain Expenses........ 11
Section 2.10. Real Property........................................ 12
ARTICLE III
CLOSING AND EFFECTIVE TIME............................................. 13
Section 3.1. Effective Time....................................... 13
Section 3.2. Closing.............................................. 13
Section 3.3. Post Closing Adjustments............................. 16
ARTICLE IV
INDEMNIFICATION........................................................ 16
Section 4.1. Seller's Indemnification of Purchaser................ 16
Section 4.2. Purchaser's Indemnification of Seller................ 17
Section 4.3. Claims for Indemnity................................. 17
Section 4.4. Limitations on Indemnification....................... 17
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF SELLER............................... 18
Section 5.1. Corporate Organization............................... 18
Section 5.2. No Violation......................................... 18
Section 5.3. Corporate Authority.................................. 18
Section 5.4. Enforceable Agreement................................ 18
Section 5.5. No Brokers........................................... 18
Section 5.6. Personal Property.................................... 19
Section 5.7. Real Property........................................ 19
Section 5.8. Condition of Property................................ 19
Section 5.9. Limitation of Representations and Warranties......... 19
</TABLE>
i
<PAGE> 3
<TABLE>
<S> <C>
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF PURCHASER............................ 19
Section 6.1. Corporate Organization............................... 20
Section 6.2. No Violation......................................... 20
Section 6.3. Corporate Authority.................................. 20
Section 6.4. Enforceable Agreement................................ 20
Section 6.5. No Brokers........................................... 20
ARTICLE VII
OBLIGATIONS OF PARTIES PRIOR TO AND AFTER EFFECTIVE TIME............... 20
Section 7.1. Full Access.......................................... 20
Section 7.2. Delivery of Magnetic Media Records................... 21
Section 7.3. Formation of Subsidiary; Application for Approval.... 21
Section 7.4. Conduct of Business; Maintenance of Properties....... 21
Section 7.5. No Solicitation by Seller............................ 22
Section 7.6. No Solicitation by Purchaser......................... 22
Section 7.7. Further Actions...................................... 23
Section 7.8. Fees and Expenses.................................... 23
Section 7.9. Breaches with Third Parties.......................... 23
Section 7.10. Insurance............................................ 23
Section 7.11. Public Announcements................................. 23
Section 7.12. Tax Reporting........................................ 24
Section 7.13. REIT Participations.................................. 24
ARTICLE VIII
CONDITIONS TO PURCHASER'S OBLIGATIONS.................................. 24
Section 8.1. Representations and Warranties True.................. 24
Section 8.2. Obligations Performed................................ 24
Section 8.3. No Adverse Litigation................................ 24
Section 8.4. Regulatory Approval.................................. 24
ARTICLE IX
CONDITIONS TO SELLER'S OBLIGATIONS..................................... 25
Section 9.1. Representations and Warranties True.................. 25
Section 9.2. Obligations Performed................................ 25
Section 9.3. No Adverse Litigation................................ 25
Section 9.4. Regulatory Approval.................................. 25
Section 9.5. Barnett Closing...................................... 25
ARTICLE X
TERMINATION............................................................ 26
Section 10.1. Methods of Termination............................... 26
Section 10.2. Procedure Upon Termination........................... 26
Section 10.3. Payment of Expenses.................................. 27
</TABLE>
ii
<PAGE> 4
<TABLE>
<S> <C>
ARTICLE XI
MISCELLANEOUS PROVISIONS............................................... 27
Section 11.1. Completion of Barnett Transaction.................... 27
Section 11.2. Amendment and Modification........................... 27
Section 11.3. Waiver or Extension.................................. 27
Section 11.4. Assignment........................................... 28
Section 11.5. Confidentiality...................................... 28
Section 11.6. Addresses for Notices, Etc. ......................... 28
Section 11.7. Counterparts......................................... 29
Section 11.8. Headings............................................. 29
Section 11.9. Governing Law........................................ 29
Section 11.10. Sole Agreement....................................... 29
Section 11.11. Severability......................................... 29
Section 11.12. Parties In Interest.................................. 29
</TABLE>
iii
<PAGE> 5
PURCHASE AND ASSUMPTION AGREEMENT
THIS PURCHASE AND ASSUMPTION AGREEMENT (this "Agreement") is entered into as of
December 15, 1997 by and between NATIONSBANK CORPORATION, a bank holding company
having its principal office in Charlotte, North Carolina (the "Seller"), and
REPUBLIC BANCSHARES, INC., a bank holding company, having its principal offices
in St. Petersburg, Florida (the "Purchaser"):
WITNESSETH:
WHEREAS, NationsBank Corporation ("NationsBank") has entered into an Agreement
and Plan of Merger with Barnett Banks, Inc. ("Barnett") for the purpose of
acquiring Barnett and its subsidiaries (the "Barnett Transaction"); and
WHEREAS, NationsBank and Barnett through the actions of Seller and certain of
their banking subsidiaries wish to divest themselves of certain assets, deposits
and other liabilities located in Brunswick, Georgia in order to meet a portion
of the regulatory requirements dictated by the Barnett Transaction, and
WHEREAS, the Purchaser wishes to purchase such assets and assume such
liabilities upon the terms and conditions set forth herein,
NOW, THEREFORE, in consideration of the premises and mutual agreements
hereinafter set forth, Seller and Purchaser agree as follows:
ARTICLE I
THE ASSETS
Section 1.1. Banking Facilities.
Purchaser shall form a federal savings bank subsidiary or other insured
depository institution subsidiary or branch office (the "Subsidiary") and take
those actions appropriate to cause the Subsidiary to purchase from Seller the
assets of, and assume the liabilities assigned to, the branch banking offices
identified on Exhibit 1.1(b) attached hereto (the "Banking Facilities").
ARTICLE II
TRANSFER OF ASSETS AND LIABILITIES
Section 2.1. Transferred Assets.
(a) As of the Effective Time (as defined in Section 3.1 below) and upon the
terms and conditions set forth herein, Seller will sell, assign,
transfer, convey and deliver to Purchaser, and Purchaser will purchase
from Seller, the following assets at the Banking Facilities except as
<PAGE> 6
otherwise excluded from sale pursuant to the provisions of Subsection
2.1(b) below (the "Transferred Assets"):
(1) subject to Section 2.10 hereof, all of Seller's transferable
right, title and interest in and to all real estate and
improvements thereon at the Banking Facilities, but not
including any leasehold estates covered by sub-section (3)
below, together with all rights and appurtenances pertaining
thereto (the "Real Property");
(2) the furniture, fixtures, leasehold improvements, equipment and
other tangible personal property located on or affixed to the
Real Property or located at leased Banking Facilities
locations, including any of such items on order at the Closing
but not including any of such items subject to the terms of
any Equipment Leases (the "Personal Property");
(3) all assignable leases affecting the Banking Facilities,
including all leases of real property (the "Real Property
Leases"), and all leases for equipment (the "Equipment
Leases"), and any assignable, stand-alone software licenses
and leases (the "Software Licenses");
(4) all safe deposit contracts and leases for the safe deposit
boxes located at the Banking Facilities as of the Effective
Time (the "Safe Deposit Contracts");
(5) all Loans transferred pursuant to Section 2.4; and
(6) all coins and currency located at the Banking Facilities as of
the Effective Time (the "Coins and Currency").
(b) Excluded from the assets, properties and rights being transferred,
conveyed and assigned to Purchaser under this Agreement are (1) the
assets listed on Exhibit 2.1(b) hereto, (2) Seller's rights in and to
the names "NationsBank" and "Barnett" and any of their predecessor
banks' names and any of NationsBank's or Seller's predecessors'
corporate logos, trademarks, trade names, signs, paper stock, forms and
other supplies containing any such logos, trademarks or trade names,
(3) residential mortgage servicing rights for 1-4 family residential
mortgage loans at the Banking Facilities if Seller is a Barnett
subsidiary, (4) licenses and permits, (5) trust, brokerage, mutual fund
and similar relationships and (6) proprietary NationsBank or Barnett
software (the "Excluded Assets"). Seller shall coordinate with
Purchaser to remove the Excluded Assets from the Banking Facilities on
or prior to the Effective Time. Seller shall remove the Excluded Assets
at its own cost and, apart from making any repairs necessitated by
Seller's negligence in removing the Excluded Assets, Seller shall be
under no obligation to restore the premises to their original
condition, which shall be the responsibility of Purchaser.
(c) Notwithstanding anything to the contrary contained in this Agreement,
all RMMS (as defined below) data and information and any copies or
extracts thereof or other data or analyses derived therefrom, and all
internal reports and data relating to, containing or derived from the
operating results of Barnett and its affiliates or any subsidiary or
division or line of business
2
<PAGE> 7
thereof, whether contained in books, records or other paper format,
accessed through the computer and data processing systems of Barnett
and its affiliates, or otherwise in the possession of Barnett or the
Seller, shall remain solely the property of Seller, and nothing
contained in this Agreement shall be construed as transferring to or
vesting in the Purchaser or any of Purchaser's affiliates any right or
interest in or to such data and information or to grant to the
Purchaser any ongoing rights to the use of the RMMS or data derived
therefrom. Purchaser acknowledges that Seller shall be entitled to take
all such steps prior to or following the Closing as shall be necessary
in Seller's sole discretion to effect the foregoing, including taking
such actions as are necessary to ensure that all access to such
information at the offices of the Seller shall be terminated as of the
Closing. Purchaser shall promptly return to Seller any such information
or data described herein, which remains at any facilities transferred
hereunder following the Closing.
For purposes of this Agreement, the term "RMMS" means the Retail Market
Management System, a proprietary strategic and marketing system of Barnett which
combines customer transaction, balance and demographic data with a proprietary
analytic methodology to produce specific customer and market management tools.
These management tools include but are not limited to market potential models,
customer profitability analysis, market segmentation analysis and customer
activity analysis.
Section 2.2. Purchase Price.
(a) As consideration for the purchase of the Banking Facilities, Purchaser
shall pay a purchase price equal to the sum of the following:
(1) The Net Book Value (as defined in Section 2.2(d) hereof) of
the Personal Property and the real estate and improvements
(including leasehold improvements) at the Banking Facilities
on the Closing Date;
(2) A premium for the Deposit Liabilities (as defined in Section
2.3(a) hereof) and franchise value assigned to the Banking
Facilities equal to 1% of the Deposit Liabilities,
(3) The Net Book Value (as defined in Section 2.2(d) hereof) of
the Loans as set forth in Section 2.4 hereof on the Closing
Date; and
(4) The face amount of the Coins and Currency.
(b) In addition, Purchaser shall assume, as of the Effective Time, all of
the duties, obligations and liabilities of Seller relating to the Real
Property, the Real Property Leases, the Equipment Leases, the Software
Licenses, the Safe Deposit Contracts, the Deposit Liabilities
(including all accrued interest relating thereto) and all other
assignable operating contracts of the Banking Facilities.
3
<PAGE> 8
(c) Seller shall prepare a balance sheet (the "Pre-Closing Balance Sheet")
in accordance with generally accepted accounting principles
consistently applied as of a date not earlier than 30 calendar days
prior to the Effective Time anticipated by the parties (the
"Pre-Closing Balance Sheet Date") reflecting the assets to be sold and
assigned hereunder and the liabilities to be transferred and assumed
hereunder all based on the book value of such assets and liabilities;
Seller agrees to pay to Purchaser at the Closing (as defined in Section
3.1 hereof), in immediately available funds, the excess amount, if any,
of the amount of Deposit Liabilities assumed by Purchaser pursuant to
subsection (b) above as reflected by the Pre-Closing Balance Sheet over
the aggregate purchase price computed in accordance with subsection (a)
above, as reflected by the Pre-Closing Balance Sheet. Purchaser agrees
to pay Seller at the Closing, in immediately available funds, the
excess, if any, of the aggregate purchase price computed in accordance
with subsection (a) above, as reflected by the Pre-Closing Balance
Sheet over the amount of Deposit Liabilities assumed by Purchaser
pursuant to subsection (b) above as reflected by the Pre-Closing
Balance Sheet. Amounts paid at Closing shall be subject to subsequent
adjustment based on the Post-Closing Balance Sheet (as defined in
Section 3.3 hereof).
(d) With regard to Personal Property and Real Property, Net Book Value is
the value that the asset is carried on Seller's general ledger. With
regard to Loans, Net Book Value is the aggregate principal amount of
the Loans, plus accrued and unpaid interest and late charges thereon,
but such value shall not include any loan loss reserves or general
reserve.
(e) (1) Seller and Purchaser agree to allocate the purchase price in
accordance with Section 1060 of the Internal Revenue Code (the "Code").
Within 120 days after the Closing Date, Purchaser shall provide to
Seller Purchaser's proposed allocation of the purchase price as finally
determined and paid by Purchaser hereunder. Within 30 days after the
receipt of such allocation, Seller shall propose to Purchaser any
changes to such allocation or otherwise shall be deemed to have agreed
with such allocation.
(2) Seller and Purchaser shall reduce such allocation to writing,
including jointly and properly executing completed Internal Revenue
Service Form 8594, and any other forms or statements required by the
Code, Treasury Regulations or the Internal Revenue Service, together
with any and all attachments required to be filed therewith. Seller and
Purchaser shall file timely any such forms and statements with the
Internal Revenue Service.
(3) To the extent consistent with applicable law, Seller and Purchaser
shall not file any tax return or other documents or otherwise take any
position with respect to taxes which is inconsistent with such
allocation of the final purchase price, provided; however, that neither
Seller nor Purchaser shall be obligated to litigate any challenge to
such allocation of the final purchase price by a governmental
authority.
(4) Seller and Purchaser shall promptly inform one another of any
challenge by any governmental authority to any allocation made pursuant
to this subsection and agree to consult with and keep one another
informed with respect to the state of, and any discussion, proposal or
submission with respect to, such challenge.
4
<PAGE> 9
Section 2.3. Deposit Liabilities.
(a) "Deposit Liabilities" shall mean all of Seller's duties, obligations
and liabilities relating to the deposit accounts assigned to the
Banking Facilities as of the Effective Time (including accrued but
unpaid or uncredited interest thereon).
(b) Except for those liabilities and obligations specifically assumed by
Purchaser under 2.2(b) above, Purchaser are not assuming any other
liabilities or obligations. Liabilities not assumed include, but are
not limited to, the following:
(1) Seller's cashier checks, letters of credit, money orders,
traveler's checks, interest checks and expense checks issued
prior to closing, consignments of U.S. Government "E" and "EE"
bonds and any cash items paid by Seller and not cleared prior
to the Effective Time.
(2) Liabilities or obligations with respect to any litigation,
suits, claims, demands or governmental proceedings arising,
commenced or made known to Seller prior to Closing and related
to the Banking Facilities.
(3) Deposit accounts associated with or securing lines of credit
where the line of credit is excluded in accordance with
Section 2.4(b).
(4) Deposit accounts with Seller's group banking program, if any.
(5) Self-directed individual retirement accounts, if any, as well
as those individual retirement accounts which, by their terms,
are not subject to assignment, it being understood that all
other types of IRA Deposit Liabilities are intended to be
transferred.
(6) Any and all obligations arising under any service agreements
entered into between Seller or Barnett and their subsidiaries.
(7) Deposit accounts associated with qualified retirement plans
where Seller is the trustee of such plan or the sponsor of a
prototype plan used by such plan.
(c) Seller does not represent or warrant that any deposit customers whose
accounts are assumed by Purchaser will become or continue to be
customers of Purchaser after the Effective Time.
(d) Purchaser agrees to pay in accordance with law and customary banking
practices all properly drawn and presented checks, drafts and
withdrawal orders presented to Purchaser by mail, over the counter or
through the check clearing system of the banking industry, by
depositors of the accounts assumed, whether drawn on the checks,
withdrawal or draft forms provided by Seller or by Purchaser, and in
all other respects to discharge, in the usual course of the banking
business, the duties and obligations of Seller with respect to the
balances due and owing to the depositors whose accounts are assumed by
Purchaser.
5
<PAGE> 10
(e) If, after the Effective Time, any depositor, instead of accepting the
obligation of Purchaser to pay the 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 any such payment; provided, that if Seller shall pay the same,
Purchaser agrees to reimburse Seller for any such payments, and Seller
shall not be deemed to have made any representations or warranties to
Purchaser with respect to any such checks, drafts or withdrawal orders
and any such representations or warranties implied by law are hereby
expressly disclaimed. Seller and Purchaser shall make arrangements to
provide for the daily settlement with immediately available funds by
Purchaser of checks, drafts, withdrawal orders, returns and other items
presented to and paid by Seller within 90 calendar days after the
Effective Time and drawn on or chargeable to accounts that have been
assumed by Purchaser; provided, however, that Seller shall be held
harmless and indemnified by Purchaser for acting in accordance with
such arrangements.
(f) Purchaser agrees, at its cost and expense, (1) to assign new account
numbers to depositors of assumed Deposit Liabilities, (2) to notify
such depositors, on or before the Effective Time, in a form and on a
date mutually acceptable to Seller and Purchaser, of Purchaser
assumption of Deposit Liabilities, (3) to furnish such depositors with
checks on the forms of Purchaser and with instructions to utilize
Purchaser's checks and to destroy unused check, draft and withdrawal
order forms of Seller (If Purchaser so elect, Purchaser may offer to
buy from such depositors their unused Seller's check draft and
withdrawal order forms.), (4) to reissue all ATM and debit cards (with
new PIN numbers) associated with the depositors of assumed Deposit
Liabilities, (5) to replace all line of credit checks with checks on
the forms of Purchaser with instructions to utilize Purchaser's checks
and to destroy the unused checks and (6) to disable and to notify
customers of its disabling of all credit card overdraft protection. In
addition, subsequent to regulatory approval, Seller will notify its
affected customers by letter of the pending assignment of Seller's
Deposit Liabilities to Purchaser, which notice shall be at Seller's
cost and expense and shall be in a form mutually agreeable to Seller
and Purchaser.
(g) Purchaser agrees to pay promptly to Seller an amount equivalent to the
amount of any checks, drafts or withdrawal orders credited to any
assumed Deposit Liabilities as of the Effective Time that are returned
to Seller after the Effective Time.
(h) As of the Effective Time, Purchaser will assume and pay the Deposit
Liabilities and assume and discharge all of Seller's duties and
obligations in accordance with the terms and conditions and laws, rules
and regulations that apply to the certificates, accounts and other
Deposit Liabilities assumed under this Agreement.
(i) As of the Effective Time, Purchaser will maintain and safeguard in
accordance with applicable law and sound banking practices all account
documents, deposit contracts, signature cards, deposit slips, canceled
items and other records related to the Deposit Liabilities assumed
under this Agreement, subject to Seller's right of access to such
records as provided in this Agreement.
6
<PAGE> 11
(j) 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. Purchaser will comply with
all laws, rules and regulations regarding tax reporting of transactions
of such accounts after the Effective Time.
(k) Prior to the Closing Date, Purchaser, at its expense, will notify all
Automated Clearing House ("ACH") originators of the transfers and
assumptions made pursuant to the Agreement; provided, however, that
Seller may, at its option, notify all such originators (on behalf of
Purchaser) also at the expense of Purchaser. For a period of 90
calendar days beginning on the Effective Time, Seller will honor all
ACH items related to accounts assumed under this Agreement which are
mistakenly routed or presented to Seller. Seller will make no charge to
Purchaser for honoring such items, and will electronically transmit
such ACH data to Purchaser. If Purchaser cannot receive an electronic
transmission, Seller will make available to Purchaser at Seller's
operations center receiving items from the Automated Clearing House
tapes containing such ACH data. Items mistakenly routed or presented
after the 90-day period will be resumed to the presenting party. Seller
and Purchaser shall make arrangements to provide for the daily
settlement with immediately available funds by Purchaser of any ACH
items honored by Seller, and Seller shall be held harmless and
indemnified by Purchaser for acting in accordance with this arrangement
to accept ACH items.
(l) Following the Effective Time, Purchaser agrees to use its best efforts
to collect from Purchaser 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 Effective Time which were
honored by Seller prior to the Effective Time 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. Solely for the purposes of
this Section 2.3(i), all references to Seller shall be deemed to
include Seller and its assignees.
Section 2.4. Loans Transferred.
(a) Seller will transfer to Purchaser as of the Effective Time, subject to
the terms and conditions of this Agreement, all of Seller's right,
title and interest in (including collateral relating thereto) loans
maintained, serviced and listed as loans assigned to the Banking
Facilities (collectively, the "Loans"); provided, however, the Loans
shall not include any loans described in subsection (b) below. Such
Loans (as well as any lien or security interest related
7
<PAGE> 12
thereto) shall be transferred by means of a blanket (collective)
assignment and not individually (except as may be otherwise required by
law). Purchaser shall inform Seller not less than 45 calendar days
prior to the proposed Closing of any case in which filing information
relating to any collateral for the Loans will be required for
preparation of any assignments of liens.
(b) Notwithstanding the provisions of subsection (a) above, the Loans shall
not include:
(1) nonaccruals (which term shall include loans in which the
collateral securing same has been repossessed or in which
collection efforts have been instituted or claim and delivery
or foreclosure proceedings have been filed);
(2) loans 90 calendar days or more past due;
(3) loans upon which insurance has been force-placed;
(4) credit card loans;
(5) loans in connection with which the borrower has filed a
petition for relief under the United States Bankruptcy Code
prior to the Effective Time;
(6) loans identified by Purchaser in writing within 45 calendar
days or more prior to the Effective Time as not being
purchased because of failure to meet generally applicable
credit standards of Purchaser. In the case of loans made
within 45 calendar days of Closing, Purchaser shall have the
right to review and put back those loans for failure to meet
the credit standards of Purchaser for up to 30 days; or
(7) mortgage servicing rights for 1-4 family residential mortgage
loans if Seller is a Barnett subsidiary.
(c) Seller and Purchaser agree that Purchaser will become the beneficiary
of credit life insurance written on direct consumer installment loans
and coverage will continue to be the obligation of the current insurer
after the Effective Time and for the duration of such insurance as
provided under the terms of the policy or certificate. If Purchaser
become the beneficiary of credit life insurance written on direct
consumer installment loans, Seller and Purchaser agree to cooperate in
good faith to develop a mutually satisfactory method by which the
current insurer will make rebate payments to and satisfy claims of the
holders of such certificates of insurance after the Effective Time. The
parties obligations in this section are subject to any restrictions
contained in existing insurance contracts as well as applicable laws
and regulations.
(d) In connection with the transfer of any loans requiring notice to the
borrower and the servicer, Purchaser and Seller will comply with all
notice and reporting requirements of the loan documents or of any law
or regulation.
8
<PAGE> 13
(e) All Loans will be transferred without recourse and without any
warranties or representations as to their collectibility or the
creditworthiness of any of the obligors of such Loans.
(f) Purchaser will at its expense issue new coupon books or other forms of
payment identification for payment of Loans for which Seller provide
coupon books with instructions to utilize Purchaser coupons or forms
and to destroy coupons furnished by Seller.
(g) For a period of 90 calendar days after the Effective Time, Seller will
forward to Purchaser loan payments received by Seller. Purchaser shall
reimburse Seller upon demand for checks returned on payments forwarded
to Purchaser; however, to the extent possible, Seller will deduct the
amount of such resumed checks from payments received and shall settle
with Purchaser by an official check.
(b) As of the Effective Time, Seller shall transfer and assign all files,
documents and records related to the Loans to Purchaser, including such
information held in electronic form, and Purchaser will be responsible
for maintaining and safeguarding all such materials in accordance with
applicable law and sound banking practices.
(i) If the balance due on any Loan purchased pursuant to this Section 2.4
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 Effective
Time, the asset value represented by the Loan transferred shall be
correspondingly increased and an amount in cash equal to such increase
shall be paid by Purchaser to Seller promptly upon demand.
(j) Seller shall grant to Purchaser as of the Effective Time a limited
power of attorney, in substantially the form attached hereto as Exhibit
2.4(j) (the "Power of Attorney").
Section 2.5. Safe Deposit Business.
(a) As of the Effective Time, Purchaser will assume and discharge Seller's
obligations with respect to the safe deposit box business at the
Banking Facilities in accordance with the terms and conditions of
contracts or rental agreements related to such business, and Purchaser
will maintain all facilities necessary for the use of such safe deposit
boxes by persons entitled to use them.
(b) As of the Effective Time, Seller shall transfer and assign the records
related to such safe deposit box business to Purchaser, and Purchaser
shall maintain and safeguard all such records and be responsible for
granting access to and protecting the contents of safe deposit boxes at
the Banking Facilities.
(c) Safe deposit box rental payments and late payment fees collected by
Seller before the Effective Time shall not be prorated.
9
<PAGE> 14
Section 2.6 Employee Matters.
(a) Subject to Section 11.12 hereof, Purchaser shall offer employment to
all employees employed by Seller at the Banking Facilities as of the
Effective Time (the "Employees"), in their then current functional
positions at each facility with remuneration not less than current
levels (subject to normal salary increases) and benefits generally
equivalent to current levels. Except for Purchaser's defined benefit
pension plan, Employees who become employees of Purchaser shall receive
full credit for their prior service with Seller under Purchaser's
benefit plans and policies, including its vacation and sick leave
policies. As of the Effective Time, the Employees who become employees
of Purchaser and their dependents, if any, previously covered under
Seller's health insurance plan shall be covered under Purchaser's
health insurance plan without being subject to any pre-existing
condition limitations or exclusions except those excluded under
Seller's health insurance plan. Employees who become employees of
Purchaser shall not be required to satisfy the deductible and employee
payments required by Purchaser's comprehensive medical and/or dental
plans for the calendar year of the Effective Time to the extent of
amounts previously credited during such calendar year under comparable
plans maintained by Seller. Employees who become employees of Purchaser
shall receive full credit for their prior service with Seller for
purposes of determining their participation, eligibility and vesting
rights under Purchaser's defined benefit pension plan; benefits under
Purchaser's defined benefit pension plan shall accrue from the first
day of service with Purchaser and shall be based on the number of years
of service with Purchaser.
(b) Seller makes no representations or warranties about whether any of the
Employees who become employees of Purchaser will remain employed at the
Banking Facilities after the Effective Time. Seller will use its best
efforts to maintain the Employees as employees of Seller at the Banking
Facilities until the Effective Time. Any Employee whose employment
shall be terminated for any reason prior to the Effective Time or who
shall elect not to be an employee of Purchaser shall be dealt with by
Seller in its sole and absolute discretion. Seller agrees that, for a
period of 12 months after the Effective Time, it will not solicit for
employment any Employee who remains employed by Purchaser.
(c) Purchaser agrees that for a period of 12 months after the Effective
Time, no Employee will be terminated by Purchaser without paying to
such Employee a severance benefit no less than the applicable severance
benefit set forth in Exhibit 2.6(c).
Section 2.7. Records and Data Processing.
(a) As of the Effective Time, Purchaser shall become responsible for
maintaining the files, documents and records referred to in this
Agreement. Purchaser will preserve and safekeep them as required by
applicable law and sound banking practice for the joint benefit of
Seller and Purchaser. After the Effective Time, Purchaser will permit
Seller and its representatives, for reasonable cause, at reasonable
times and upon reasonable notice, to examine, inspect, copy and
reproduce any such files, documents or records as Seller deem
reasonably necessary and to have similar access to such records and
Seller's former employees for purposes of
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preparation of records and reports (including regulatory and tax
reports and returns) and as required in connection with third party
litigation.
(b) As of the Effective Time, Seller will permit Purchaser and its
representatives, for reasonable cause, at reasonable times and upon
reasonable notice, to examine, inspect, copy and reproduce files,
documents or records retained by Seller regarding the assets and
liabilities transferred under this Agreement (to the extent that such
information is readily available from Seller's records without
incurring any significant expense) as Purchaser deem reasonably
necessary.
(c) For a period of 90 days after the Effective Time, the party providing
copies of records shall do so without charge; thereafter it may charge
its customary rate for such copies.
(d) It is understood that certain of Seller's records, including
certificates of deposit, may be available only in electronic form or in
the form of photocopies, film copies or other non-original and
non-paper media.
Section 2.8. Security.
As of the Effective Time, Purchaser shall be solely responsible for the security
of and insurance on all persons and property located in or about the Banking
Facilities.
Section 2.9. Taxes and Fees; Proration of Certain Expenses.
Purchaser shall be responsible for the payment of all fees and taxes related to
this transaction; except that Purchaser shall not be responsible for, or have
any liability with respect to, taxes on any income to Seller arising out of this
transaction. Purchaser shall not be responsible for any income tax liability of
Seller arising from the business or operations of the Banking Facilities before
the Effective Time, and Seller shall not be responsible for any tax liabilities
of Purchaser arising from the business or operations of the Banking Facilities
after the Effective Time. Utility payments, telephone charges, real property
taxes, personal property taxes, rent, salaries, deposit insurance premiums or
assessments, maintenance items, other ordinary operating expenses of the Banking
Facilities and other expenses related to the liabilities assumed or assets
purchased hereunder shall be prorated between the parties as of the Effective
Time. To the extent any such item has been prepaid by Seller for a period
extending beyond the Effective Time, there shall be a proportionate monetary
adjustment in favor of Seller. The Purchaser shall be responsible for the
payment of any non-delinquent assessments. Real estate taxes shall be pro-rated
at the Closing based upon the maximum allowable discount and other applicable
exemptions, and there shall be no reproration of real estate taxes.
Seller and Purchaser shall each be responsible for its own costs with respect to
the preparation and filing of any tax returns, as well as the preparation,
review and analysis of the allocation statements and any forms or statements
prepared in connection with the final allocation of the purchase price.
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Section 2.10. Real Property.
(a) Title Matters.
(i) Seller agrees to deliver to Purchaser as soon as reasonably
possible upon Purchaser's request copies of all title
information in possession of Seller, including, but not
limited to, title insurance policies, attorneys' opinions on
title, surveys, covenants, deeds and easements relating to the
Real Property. Such delivery shall constitute no warranty by
Seller as to the accuracy or completeness thereof or that
Purchaser is entitled to rely thereon.
(ii) Purchaser agrees to notify Seller, in writing within 45
calendar days after the date of this Agreement of any
mortgages, pledges, material liens, encumbrances,
reservations, tenancies, encroachments, overlaps or other
title exceptions, survey objections, or zoning or similar land
use violations (excluding legal but nonconforming uses)
related to the Real Property to which Purchaser reasonably
objects (the "Title Defects"). If Purchaser does not notify
Seller of Title Defects within the 45 day period, Purchaser
shall be deemed to have waived its rights under this Section
2.10. Purchaser agrees that Title Defects shall not include
real property taxes not yet due and payable or easements,
restrictions, tenancies, survey matters or other title
matters, and rights of way which do not materially interfere
with the use of the Real Property as such facilities are
currently utilized. Seller shall make a good faith effort to
correct any such Title Defect to Purchaser's reasonable
satisfaction at least 10 calendar days prior to Closing;
provided, however, that Seller shall not be obligated to bring
any lawsuit or make any payments of money (except to pay liens
that Seller does not dispute in good faith) to cure a Title
Defect. If Seller is unable or unwilling to cure any such
Title Defects to Purchaser's reasonable satisfaction,
Purchaser shall have the option either to terminate this
Agreement (upon written notice to Seller) with respect to the
Banking Facilities, at which the Real Property having such
Title Defects is located or to receive title in its then
existing condition. Upon termination of this Agreement with
respect to a particular tract of property pursuant to this
Section 2.10, no party shall have any further liability to the
other party under this Agreement with respect to such parcel
of Real Property (or the other Assets or Deposit Liabilities
associated with that facility) and the purchase price shall be
adjusted accordingly.
(b) Environmental Matters.
Purchaser shall have the right to conduct such investigation of
environmental matters with respect to the Real Property as it may
reasonably require and shall report the results of any such
investigation, together with its objections to any material violation
of applicable environmental law which impacts the use of a particular
tract of Real Property as such facilities are currently utilized, to
Seller no later than 45 calendar days after the date of this Agreement;
provided, however, that without the prior written consent of Seller and
execution of a satisfactory property access agreement, Purchaser shall
not conduct subsurface testing, any ground water monitoring or install
any test well or undertake any other investigation which requires a
permit or license from, or the reporting of the investigation or the
results thereof to, a local or state environmental regulatory
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authority or the United States Environmental Protection Agency. If
Purchaser objects to any material violation of applicable environmental
law which impacts the Real Property or its use as a banking facility,
Seller shall have the right, but not the obligation, to cure any such
material violation of law which is discovered by Purchaser's
investigation. If Seller either refuses to give such written consent or
refuses to cure any material violation of applicable environmental law
relating to the Real Property or the use thereof as a banking center,
Purchaser shall have the option either to purchase the Real Property in
its then existing condition or to terminate this Agreement (upon
written notice of Seller) with respect to the Banking Facilities at
which such parcel of Real Property affected by such refusal is located
in which event neither party shall have any further liability to the
other under this Agreement with respect to such Banking Facilities (or
the other Assets or Deposit Liabilities associated with that facility)
and the purchase price shall be adjusted accordingly.
(c) Termination by Seller.
If Purchaser elects not to purchase Banking Facilities pursuant to this
Section 2.10, Seller may elect to terminate this Agreement in its
entirety within 10 calendar days after its receipt of Purchaser's
election not to purchase a Banking Facility.
ARTICLE III
CLOSING AND ELECTIVE TIME
Section 3.1. Effective Time.
The purchase of assets and assumption of liabilities provided for in
this Agreement shall occur at a closing (the "Closing") to be held at
the offices of Seller in Charlotte, North Carolina at 10:00 a.m. local
time on a date designated by Seller within 31 calendar days following
the closing of the Barnett Transaction and the date of all approvals by
regulatory agencies and after all statutory waiting periods have
expired, or at such other place, time or date on which the parties
shall mutually agree. The effective time (the "Effective Time") shall
be 2:00 p.m., local time, on the day on which the Closing occurs (the
"Closing Date").
Section 3.2. Closing.
(a) All actions taken and documents delivered at the Closing shall be
deemed to have been taken and executed simultaneously, and no action
shall be deemed taken nor any document delivered until all have been
taken and delivered.
(b) At the Closing, subject to all the terms and conditions of this
Agreement, Seller shall deliver to Purchaser or, in the case of
subsections (b), (6), (7), (8) and (10), make reasonably available to
Purchaser:
(1) Special warrant deeds executed by the appropriate Seller
transferring Seller's interest in and to each parcel of Real
Property to Purchaser in substantially the form attached
hereto as Exhibit 3.2(b)(1);
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(2) A Bill of Sale, in substantially the form attached hereto as
Exhibit 3.2(b)(2) (the "Bill of Sale"), transferring to
Purchaser all of Seller's interest in the Personal Property
and in the Loans;
(3) An Assignment and Assumption Agreement, in substantially the
form attached hereto as Exhibit 3.2(b)(3) (the "Assignment and
Assumption Agreement"), assigning Seller's interest in the
Equipment Leases, the Safe Deposit Contracts and the Deposit
Liabilities;
(4) An Assignment and Assumption of Lease, in substantially the
form attached hereto as Exhibit 3.2(b)(4) (the "Assignment and
Assumption of Lease"), assigning Seller's interest in the Real
Property Leases;
(5) Consents from third persons that are required to effect the
assignments set forth in the Assignment and Assumption
Agreement, and in the Assignment and Assumption of Leases;
(6) Seller's keys to the safe deposit boxes and Seller's records
related to the safe deposit box business at the Banking
Facilities;
(7) Seller's files and records related to the Loans;
(8) Seller's records related to the Deposit Liabilities assumed by
Purchaser;
(9) Immediately available funds in the net amount shown as owing
to Purchaser by Seller on the Closing Statement, if any;
(10) The Coins and Currency;
(11) Such of the other assets to be purchased as shall be capable
of physical delivery;
(12) A certificate of a proper officer of each Seller, dated as of
the date of Closing, certifying to the fulfillment of all
conditions which are the obligation of that Seller and that
all of the representations and warranties of such Seller set
forth in this Agreement remain true and correct in all
material respects as of Effective Time;
(13) Copies of (A) the articles of association and bylaws of Seller
and (B) a resolution of the Board of Directors of Seller, or
the Executive Committee of Seller, approving the sales
contemplated herein,
(14) Such certificates and other documents as Purchaser and its
counsel may reasonably require to evidence the receipt by
Seller of all necessary regulatory authorizations and
approvals for the consummation of the transactions provided
for in this Agreement;
(15) A Closing Statement using amounts shown on the Pre-Closing
Balance Sheet, substantially in the form attached hereto as
Exhibit 3.2(b)(15) (the "Closing Statement");
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(16) An affidavit of Seller certifying Seller is not a "foreign
person" as defined in the federal Foreign Investment in Real
Property Tax Act of 1980;
(17) The Power of Attorney; and
(18) An assignment of the REIT participations by the REIT as an
additional Seller.
It is understood that the items listed in subsections (b)(6)
and (b)(10) shall be transferred after the Banking Facilities
have closed for business on the Closing Date and that the
records listed in subsections (b)(7) and (b)(8) will be
transferred as soon as possible after the Closing, but in no
event more than 30 days after the Closing.
(c) At the Closing, subject to all the terms and conditions of this
Agreement, Purchaser shall deliver to Seller:
(1) The Assignment and Assumption Agreement;
(2) The Assignment and Assumption of Lease;
(3) A certificate and receipt acknowledging the delivery and
receipt of possession of the Assets and records referred to in
this Agreement,
(4) Immediately available funds in the net amount shown as owing
by Purchaser on the Closing Statement, if any,
(5) A certificate of a proper officer of Purchaser, dated as of
the Date of Closing, 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 as of the Effective Time;
(6) Copies of (A) the charter and bylaws of the Purchaser and (B)
a resolution of the Board of Directors, or the Executive
Committee, of Purchaser approving the purchases contemplated
herein; and
(7) Such certificates and other documents as Seller and its
counsel may reasonably require to evidence the receipt of
Purchaser of all necessary regulatory authorizations and
approvals for the consummation of the transactions provided
for in this Agreement.
(d) All instruments, agreements and certificates described in this Section
3.2 shall be in form and substance reasonably satisfactory to the
parties' respective legal counsel.
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Section 3.3. Post Closing Adjustments.
(a) Not later than 60 business days after the Effective Time (the
"Post-Closing Balance Sheet Delivery Date"), Seller shall deliver to
Purchaser a balance sheet dated as of the Effective Time and prepared
in accordance with generally accepted accounting principles
consistently applied reflecting the assets sold and assigned and the
liabilities transferred and assumed hereunder (the "Post-Closing
Balance Sheet") together with a copy of Seller's calculation of the
adjusted purchase price and amounts payable thereunder. Additionally,
Seller shall deliver to Purchaser a list of Loans purchased,
individually identified by account number. Seller shall afford
Purchaser and its accountants and attorneys the opportunity to review
all work papers and documentation used by Seller in preparing the
Post-Closing Balance Sheet. Within 15 business days following the
Post-Closing Balance Sheet Delivery Date (the "Adjustment Payment
Date"), Seller and Purchaser shall meet at the offices of Seller in
Charlotte, North Carolina, or such other location as may be mutually
agreed, to effect the transfer of any funds as may be necessary to
reflect changes in such assets and liabilities between the Pre-Closing
Balance Sheet and the Post-Closing Balance Sheet and resulting changes
in the purchase price, together with interest thereon computed from the
Effective Time to the Adjustment Payment Date at the applicable Federal
Funds Rate (as hereinafter defined).
(b) In the event that a dispute arises as to the appropriate amounts to be
paid to either party on the Adjustment Payment Date, each party shall
pay to the other on such Adjustment Payment Date all amounts other than
those as to which a dispute exists. Any disputed amounts retained by a
party which are later found to be due to the other party shall be paid
to such other party promptly upon resolution with interest thereon from
the Effective Time to the date paid at the applicable Federal Funds
Rate.
(c) The Federal Funds Rate shall be the mean of the high and low rates
quoted for Federal Funds in the Money Rates Column of The Wall Street
Journal adjusted as such mean may increase or decrease during the
period between the Effective Time and the date paid.
ARTICLE IV
INDEMNIFICATION
Section 4.1. Seller's Indemnification of Purchaser.
Seller shall indemnify, hold harmless and defend Purchaser from and against any
breach by Seller of any representation or warranty contained herein and all
claims, losses, liabilities, demands and obligations, including reasonable
attorneys' fees and expenses, arising out of any actions, suits or proceedings
commenced prior to the Effective Time (other than proceedings to prevent or
limit the consummation of this transaction) relating to Seller's operations at
the Banking Facilities; and, except as otherwise provided in this Agreement,
Seller shall further indemnify, hold harmless and defend Purchaser from and
against all claims, losses, liabilities, demands and obligations, including
reasonable attorneys' fees and expenses, real estate taxes, intangibles and
franchise taxes, sales and use taxes, social security and unemployment taxes,
all accounts payable and operating expenses (including salaries, rents and
utility charges) incurred by Seller prior to the Effective Time and which are
claimed or demanded on or after the Effective Time, or which
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arise out of any actions, suits or proceedings commenced on or after the
Effective Time and which relate to Seller's operations at the Banking Facilities
prior to the Effective Time.
Section 4.2. Purchaser's Indemnification of Seller.
Purchaser shall indemnify, hold harmless and defend Seller from and against any
breach by Purchaser of any representation or warranty contained herein and all
claims, losses, liabilities, demands and obligations, including reasonable
attorneys' fees and expenses, real estate taxes, intangibles and franchise
taxes, sales and use taxes, social security and unemployment taxes, all accounts
payable and operating expenses (including salaries, rents and utility charges),
which Seller may receive, suffer or incur in connection with operations and
transactions occurring after the Effective Time and which involve the Banking
Facilities, the Transferred Assets or the liabilities assumed pursuant to this
Agreement.
Section 4.3. Claims for Indemnity.
(a) A claim for indemnity under Sections 4.1 or 4.2 of this Agreement may
be made by the claiming party at any time prior to 12 months after the
Effective Time by the giving of written notice thereof to the other
party. Such written notice shall set forth in reasonable detail the
basis upon which such claim for indemnity is made. In the event that
any such claim is made within such prescribed 12 month period, the
indemnity relating to such claim shall survive until such claim is
resolved. Claims not made within such 12 month period shall cease and
no indemnity shall be made therefor.
(b) In the event that any person or entity not a party to this Agreement
shall make any demand or claim or file or threaten to file any lawsuit,
which demand, claim or lawsuit may result in any liability, damage or
loss to one party hereto of the kind for which such party is entitled
to indemnification pursuant to Section 4.1 or 4.2 hereof, then, after
written notice is provided by the indemnified party to the indemnifying
party of such demand, claim or lawsuit, the indemnifying party shall
have the option, at its cost and expense, to retain counsel for the
indemnified party to defend any such demand, claim or lawsuit. In the
event that the indemnifying party shall fail to respond within five
calendar days after receipt of such notice of any such demand, claim or
lawsuit, then the indemnified party shall retain counsel and conduct
the defense of such demand, claim or lawsuit as it may in its
discretion deem proper, at the cost and expense of the indemnifying
party. In effecting the settlement of any such demand, claim or
lawsuit, an indemnified party shall act in good faith, shall consult
with the indemnifying party and shall enter into only such settlement
as the indemnifying party shall approve (the indemnifying party's
approval will be implied if it does not respond within ten calendar
days of its receipt of the notice of such settlement offer).
Section 4.4. Limitations on Indemnification.
Notwithstanding anything to the contrary contained in this Article III, no
indemnification shall be required to be made by either party until the aggregate
amount of all such claims by a party exceeds $50,000. Once such aggregate amount
exceeds $50,000, such party shall thereupon be entitled to indemnification for
all amounts in excess of such $50,000. IN ADDITION, THE PARTIES SHALL HAVE NO
OBLIGATIONS UNDER THIS ARTICLE IV FOR ANY CONSEQUENTIAL LIABILITY, DAMAGE
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OR LOSS THE INDEMNIFIED PARTY MAY SUFFER AS THE RESULT OF ANY DEMAND, CLAIM OR
LAWSUIT.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller hereby represents and warrants to Purchaser as follows, which
representations and warranties shall survive the Effective Time for a period of
12 months except as otherwise specifically herein provided:
Section 5.1. Corporate Organization.
Seller is a bank holding company duly organized, validly existing and in good
standing under the laws of the State of North Carolina. Seller has the corporate
power and authority to carry on its business as currently conducted and to
effect the transactions contemplated herein.
Section 5.2. No Violation.
The Banking Facilities have been operated in all material respects in accordance
with applicable laws, rules and regulations. Neither the execution and delivery
of this Agreement, nor the consummation of the transactions contemplated herein,
will violate or conflict with (a) Seller charter or bylaws; (b) any material
provision of any material agreement or any other material restriction of any
kind to which Seller is a party or by which Seller is bound; (c) any material
statute, law, decree, regulation or order of any governmental authority; or (d)
any material provision which will result in a default under, or which cause the
acceleration of the maturity of, any material obligation or loan to which Seller
is a party.
Section 5.3. Corporate Authority.
Prior to Closing, the consummation of the transactions contemplated herein will
have been duly authorized by the Board of Directors or the Executive Committee
of Seller. No further corporate authorization is necessary for Seller to
consummate the transactions contemplated hereunder.
Section 5.4. Enforceable Agreement.
This Agreement has been duly executed and delivered by Seller and is the legal,
valid and binding agreement of Seller, enforceable in accordance with its terms.
Section 5.5. No Brokers.
All negotiations relative to this Agreement and the transactions contemplated
hereby have been carried on by Seller and Purchaser, and there has been no
participation or intervention by any other person, firm or corporation employed
or engaged by or on behalf of Seller in such a manner as to give rise to any
valid claim against Seller or Purchaser for a brokerage commission, finder's fee
or like commission.
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Section 5.6. Personal Property.
Seller owns, and will convey to Purchaser at the Closing, all of Seller's right,
title and interest to all of the Personal Property free and clear of any
mortgages, liens, security interests or pledges, except as may otherwise be set
forth in this Agreement.
Section 5.7. Real Property.
Seller make the following additional representations regarding the Real
Property:
(a) Except as specifically set forth herein or disclosed to Purchaser
within 30 days after the date of this Agreement, Seller has no
knowledge of any condemnation proceedings pending against the Real
Property.
(b) Except as specifically set forth herein or disclosed to Purchaser in
writing within 30 days after the date 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, lien, proceeding or
litigation of any kind, pending or outstanding, which would materially
affect or limit Purchaser or its successors' or assigns' use and
enjoyment of the Real Property or which would materially limit or
restrict Seller's right or ability to enter into this Agreement and
consummate the sale and purchase contemplated hereby.
(c) Purchaser's sole remedy for a breach of the representations and
warranties in this Section 5.7 shall be to elect not to purchase a
particular Banking Facility, as provided in Section 2.10.
Section 5.8. Condition of Property.
Except as may be otherwise specifically set forth in this Agreement, the Real
Property and Personal Property to be purchased by Purchaser hereunder are sold
as is, where is, with no warranties or representations whatsoever, except as may
be expressly represented or warranted in this Agreement.
Section 5.9. Limitation of Representations and Warranties.
Except as may be expressly represented or warranted in this Agreement, the
Seller is making no other representations or warranties whatsoever with regard
to any asset being transferred to Purchaser or any liability or obligation being
assumed by Purchaser or as to any other matter or thing.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser hereby represents and warrants to the Seller as follows, which
representations and warranties shall survive the Effective Time for a period of
12 months except as otherwise specifically herein provided:
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Section 6.1. Corporate Organization.
Purchaser is a state banking corporation, duly organized, validly existing and
in good standing under the laws of the state of its incorporation. Purchaser has
the corporate power and authority to carry on the business being acquired, to
assume the liabilities being transferred, and to effect the transactions
contemplated herein.
Section 6.2. No Violation.
Neither the execution and delivery of this Agreement, nor the consummation of
the transactions contemplated herein, will violate or conflict with (a) the
charter or bylaws of Purchaser; (b) any material provision of any material
agreement or any other material restriction of any kind to which Purchaser is a
party or by which Purchaser is bound; (c) any material statute, law, decree,
regulation or order of any governmental authority; or (d) any material provision
which will result in a default under, or cause the acceleration of the maturity
of, any material obligation or loan to which Purchaser is a party.
Section 6.3. Corporate Authority.
The consummation of the transactions contemplated herein have been duly
authorized by the Board of Directors (or Executive Committee) of the Purchaser.
No further corporate authorization on the part of Purchaser is necessary to
consummate the transactions contemplated hereunder.
Section 6.4. Enforceable Agreement.
This Agreement has been duly executed and delivered by Purchaser and is the
legal, valid and binding agreement of Purchaser enforceable in accordance with
its terms.
Section 6.5. No Brokers.
All negotiations relative to this Agreement and the transactions contemplated
hereby have been carried on by Seller and Purchaser, and there has been no
participation or intervention by any other person, firm or corporation employed
or engaged by or on behalf of Purchaser in such a manner as to give rise to any
valid claim against Seller or Purchaser for a brokerage commission, finder's fee
or like commission.
ARTICLE VII
OBLIGATIONS OF PARTIES PRIOR TO AND AFTER EFFECTIVE TIME
Section 7.1. Full Access.
Seller shall afford to the officers and authorized representatives of Purchaser,
upon prior notice and subject to Seller's normal security requirements, access
to the properties, books and records pertaining to the Banking Facilities in
order that Purchaser may have full opportunity to make reasonable investigations
and to engage in operational planning, at reasonable times without interfering
with the normal business and operations of the Banking Facilities, or the
affairs of Seller relating to the Banking Facilities. The officers of Seller
shall furnish Purchaser with one standard set of such additional financial and
operating data and
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other information as to its business and properties at the Banking Facilities,
or where otherwise located, as Purchaser may, from time to time, reasonably
request and as shall be available, including, without limitation, information
required for inclusion in all governmental applications necessary to effect this
transaction. Any additional copies of such information shall be produced and
provided at Purchaser's expense. Nothing in this Section 7.1 shall require
Seller to breach any obligation of confidentiality or to reveal any proprietary
information, trade secrets or marketing or strategic plans. Records, including
credit information relating to the Loans, will be made available for review by
Purchaser no later than 30 calendar days after the execution of this Agreement.
It is understood that certain of Seller's records may be available only in the
form of photocopies, film copies or other non-original and non-paper media.
Section 7.2. Delivery of Magnetic Media Records.
Seller shall prepare or cause to be prepared at its expense and make available
to Purchaser at Seller's data processing center or other reasonably convenient
location magnetic media records in Seller field format not later than 60
calendar days after the execution of this Agreement and further shall make
available to Purchaser such records updated as of the Closing Date, which
records shall contain the information related to the items described in
Subsections 3.2(b)(6), (b)(7) and (b)(8) above. Such updated records shall be
made available at such time after Closing as agreed to by the parties. At its
option, Seller may provide such reports in paper format instead of magnetic
media format.
Section 7.3. Formation of Subsidiary; Application for Approval.
(a) Within 30 calendar days following the execution of this Agreement, Purchaser
shall prepare and file applications required by law with the appropriate
regulatory authorities for approval, and otherwise take all actions appropriate,
to (i) form and operate the Subsidiary, (ii) purchase and assume the aforesaid
assets and liabilities through the Subsidiary and establish a branch at the
location of the Banking Facilities, and (iii) effect in all other respects the
transactions contemplated herein. Purchaser agrees to process such applications
in a diligent manner and on a priority basis and to provide Seller promptly with
a copy of such applications as filed (except for any confidential portions
thereof) and all material notices, orders, opinions, correspondence and other
documents with respect thereto, and to use its best efforts to obtain all
necessary regulatory approvals. On the date hereof, Purchaser knows of no reason
why such applications should not receive all such approvals. Purchaser shall
promptly notify Seller upon receipt by Purchaser of notification that any
application provided for hereunder has been accepted or denied. Seller shall
provide such assistance and information to Purchaser as shall be reasonably
necessary for Purchaser to comply with the requirements of the applicable
regulatory authorities.
(b) With the prior consent of Seller, Purchaser may alter the form of its method
to purchase and assume the assets and liabilities described herein so long as
such action does not affect the regulatory approvals received by Seller in
connection with the Barnett Transaction.
Section 7.4. Conduct of Business; Maintenance of Properties.
From the date hereof until the Effective Time, Seller covenants that it will:
(a) Carry on, or cause to be carried on, the business of the Banking
Facilities substantially in the same
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<PAGE> 26
manner as on the date hereof, use all reasonable efforts to preserve
intact its current business organization and preserve its business
relationships with depositors, customers and others having business
relationships with it and whose accounts will be retained at the
Banking Facilities; provided, however, that Seller need not, in its
sole discretion, advertise or promote new or substantially new customer
services in the principal market area of the Banking Facilities;
(b) Cooperate with and assist Purchaser in assuring the orderly transition
of the business of the Banking Facilities to Purchaser from Seller; and
(c) Maintain the Real Property and the Personal Property in its current
condition, ordinary wear and tear excepted.
Section 7.5. No Solicitation by Seller.
For a period of 12 months after the Effective Time, Seller will not specifically
target and solicit customers assigned to the Banking Facilities utilizing any
customer or mailing list which consists primarily of such customers; provided,
however, these restrictions shall not restrict general mass mailings,
telemarketing calls, statement stuffers and other similar communications
directed to all the current customers of Seller or Seller's affiliates, or to
the public or newspaper, radio or television advertisements of a general nature
or otherwise prevent Seller from taking such actions as may be required to
comply with any applicable federal or state laws, rules or regulations. In
addition, these restrictions shall not restrict (a) the solicitation of (i)
customers whose accounts are normally established or maintained in offices other
than the Banking Facilities, (ii) any credit or debit card customer of Seller
with regard to such card products, or (iii) any customer which has an agreement
for merchant services with Seller or Seller's affiliates, including its venture
partners (including Unified Merchant Services) for merchant services; (b) the
ability of Seller to install, operate and serve customers' needs through
automated teller machines at any location; or (c) the solicitation of customers
whose accounts are excluded by either Purchaser or Seller from the transactions
contemplated by this Agreement.
Section 7.6. No Solicitation by Purchaser.
Purchaser shall not solicit any customer which, at the date hereof, (i) has a
credit card account with Seller for credit card products or (ii) has an
agreement with Seller or Seller's venture partner, Unified Merchant Services,
for the processing of customer's credit and debit card transactions and other
similar merchant services (said customers herein referred to as "Merchants")
during the term of any such agreements, including any renewal term thereunder,
or otherwise interfere in any way with Seller or Seller's venture partner,
Unified Merchant Services, relationship with any such Merchant. Notwithstanding
the foregoing, Purchaser may at times, or from time to time may solicit such
Merchants in Purchaser market area as part of Purchaser general direct marketing
program, or by general solicitations such as newspaper, radio and television
advertisements, as long as the Merchants as a group are not targeted for
solicitation. Purchaser shall be in compliance with the restrictions contained
above provided that (i) before mailing or telephoning, Purchaser uses its record
of Merchants to eliminate those Merchants from any mailing or telephone
solicitation list of potential customers that comes into Purchaser control and
from any mailing or telephone solicitation list that is screened by a credit
bureau at Purchaser direction, directly or indirectly, and (ii)
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<PAGE> 27
Purchaser does not otherwise intentionally direct any mailing or telephone
solicitation or such Merchants or any substantial portion thereof.
Section 7.7. Further Actions.
The parties hereto shall execute and deliver such instruments and take such
other actions as the other party may reasonably require in order to carry out
the intent of this Agreement.
Section 7.8. Fees and Expenses.
Purchaser shall be responsible for the costs of all title examinations, title
insurance fees, surveys, environmental investigation costs, its own attorneys'
and accountants' fees and expenses, software license and transfer fees,
recording costs, transfer fees, sales and use and other transfer taxes,
documentary stamps, and similar charges assessed upon deeds and assignments of
leases, regulatory applications and other expenses arising in connection
therewith as well as all costs and expenses associated with the transfer or
perfection of any security interests or liens securing Loans transferred
hereunder. Seller shall be responsible for its own attorneys' and accountants'
fees and expenses related to this transaction.
Section 7.9. Breaches with Third Parties.
If the assignment of any material claim, contract, license, lease, commitment,
sales order or purchase order (or any material claim or right or any benefit
arising thereunder) without the consent of a third party would constitute a
breach thereof or materially affect the rights of Purchaser or Seller
thereunder, then such assignment is hereby made subject to such consent or
approval being obtained.
Section 7.10. Insurance.
As of the Effective Time, Seller will discontinue its insurance coverage
maintained in connection with the Banking Facilities and the activities
conducted thereon. Purchaser shall be responsible for all insurance protection
for the Banking Facilities' premises and the activities conducted thereon
immediately following the Effective Time. Pending the Closing, risk of loss
shall be the responsibility of Seller.
Section 7.11. Public Announcements.
Seller and Purchaser agree that, from the date hereof neither shall make any
public announcement or public comment, regarding this Agreement or the
transactions contemplated herein without first consulting with the other party
hereto and reaching an agreement upon the substance and timing of such
announcement or comment. Further, Seller and Purchaser acknowledge the
sensitivity of this transaction to the Employees and no announcements or
communications with the public or the Employees shall be made without the prior
approval of Seller until the Effective Time.
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<PAGE> 28
Section 7.12. Tax Reporting.
Seller shall comply with all tax reporting obligations in connection with
transferred assets and liabilities on or before the Effective Time, and
Purchaser shall comply with all tax reporting obligations with respect to the
transferred assets and liabilities after the Effective Time.
Section 7.13. REIT Participations.
Barnett and its banking subsidiaries have previously contributed a 100%
participation interest in certain 1-4 family residential Loans (the "REIT
Loans") to Barnett Real Estate Management, Inc. (the "REIT"). The Seller
undertakes to cause the REIT to sell any such participations and to include the
participations in the Loans transferred hereunder. To the extent that
participations are sold, Seller and the REIT will furnish Purchaser with
instructions on that portion of the purchase price to be paid to the REIT for
such participations.
ARTICLE VIII
CONDITIONS TO PURCHASER'S OBLIGATIONS
The obligation of Purchaser to complete the transactions contemplated in this
Agreement are conditioned upon fulfillment, on or before the Closing, of each of
the following conditions:
Section 8.1. Representations and Warranties True.
The representations and warranties made by Seller in this Agreement shall be
true in all material respects on and as of the Effective Time as though such
representations and warranties were made at and as of such time, except for any
changes permitted by the terms hereof or consented to by Purchaser.
Section 8.2. Obligations Performed.
Seller shall (a) deliver or make available to Purchaser those items required by
Section 3.2 hereof, and (b) perform and comply in all material respects with all
obligations and agreements required by this Agreement to be performed or
complied with by it prior to or on the Effective Time.
Section 8.3. No Adverse Litigation.
As of the Effective Time, no action, suit or proceeding shall be pending or
threatened against Seller which is reasonably likely to (a) materially and
adversely affect the business, properties and assets of the Banking Facilities,
or (b) materially and adversely affect the transactions contemplated herein.
Section 8.4. Regulatory Approval.
(a) Purchaser shall have received all necessary regulatory approvals of the
transactions provided in this Agreement, all notice and waiting periods
required by law to pass shall have passed, no proceeding to enjoin,
restrain, prohibit or invalidate such transactions shall have been
instituted or threatened, and any conditions of any regulatory approval
shall have been met.
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<PAGE> 29
(b) Such approvals, including those received in connection with the
formation and operation of the Subsidiary, shall not have imposed any
condition which is materially disadvantageous or burdensome to
Purchaser.
ARTICLE IX
CONDITIONS TO SELLER'S OBLIGATIONS
The obligation of Seller to complete the transactions contemplated in this
Agreement are conditioned upon fulfillment, on or before the Closing, of each of
the following conditions:
Section 9.1. Representations and Warranties True.
The representations and warranties made by Purchaser in this Agreement shall be
true in all material respects at and as of the Effective Time 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 9.2. Obligations Performed.
Purchaser shall (a) deliver to Seller those items required by Section 3.2
hereof, and (b) perform and comply in all material respects with all obligations
and agreements required by this Agreement to be performed of complied with by it
prior to or on the Effective Time.
Section 9.3. No Adverse Litigation.
As of the Effective Time, no action, suit or proceeding shall be pending or
threatened against Purchaser or Seller which might materially and adversely
affect the transactions contemplated hereunder.
Section 9.4. Regulatory Approval.
(a) Seller shall have received from the appropriate regulatory authorities
approval of the transactions contemplated herein, waiting periods
required by law to pass shall have passed, no proceeding to enjoin,
restrain, prohibit or invalidate such transactions shall have been
instituted or threatened, and any conditions of any regulatory approval
shall have been met.
(b) Such approvals or Purchaser's corresponding regulatory approvals shall
not have imposed any condition which is materially disadvantageous or
burdensome to Seller and neither such regulatory approvals nor the
provisions of this Agreement will have required any action by Seller
which would result in the loss of, or modification to, regulatory
approval of the Barnett Transaction.
Section 9.5. Barnett Closing.
The Barnett Transaction shall have closed without the imposition of regulatory
conditions which would adversely impact the ability of the Seller to close this
agreement.
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<PAGE> 30
ARTICLE X
TERMINATION
Section 10.1. Methods of Termination.
This Agreement may be terminated in any of the following ways:
(a) by either Seller or Purchaser in writing five calendar days in advance
of such termination, if the Closing has not occurred by May 31, 1998;
(b) at any time on or prior to the Effective Time by the mutual consent in
writing of Seller and Purchaser;
(c) by Purchaser in writing if the conditions set forth in Article VIII of
this Agreement shall not have been met by Seller or waived in writing
by Purchaser within 31 calendar days following the date of all
approvals by regulatory agencies and after all statutory waiting
periods have expired;
(d) by Seller in writing if the conditions set forth in Article IX of this
Agreement shall not have been met by Purchaser or waived in writing by
Seller within 31 calendar days following the date of all approvals by
regulatory agencies and after all statutory waiting periods have
expired;
(e) any time prior to the Effective Time, by Seller or Purchaser in writing
if the other shall have been in breach of any representation and
warranty in any material respect (as if such representation and
warranty had been made on and as of the date hereof and on the date of
the notice of breach referred to below), or in breach of any covenant,
undertaking or obligation contained herein, and such breach has not
been cured by the earlier of 30 calendar days after the giving of
notice to the breaching party of such breach or the Effective Time;
provided, however, that there shall be no cure period in connection
with any breach of Section 7.3 hereof, so long as such breach by
Purchaser was not caused by any action or inaction of Seller, and
Seller may terminate this Agreement immediately if regulatory
applications are not filed within 30 calendar days after the date of
this Agreement as provided in that Section;
(f) by Seller in writing at any time after any applicable regulatory
authority has denied approval of any application of Purchaser for
approval of the transactions contemplated herein; or
(g) by either Seller or Purchaser, in writing five calendar days in advance
of such termination, if the Barnett Transaction is terminated prior to
completion.
Section 10.2. Procedure Upon Termination.
In the event of termination pursuant to Section 10.1 hereof, and except as
otherwise stated therein, written notice thereof shall be given to the other
party, and this Agreement shall terminate immediately upon receipt of such
notice unless an extension is consented to by the party having the right to
terminate.
If this Agreement is terminated as provided herein,
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<PAGE> 31
(a) each party will return all documents, work papers and other materials
of the other party, including photocopies or other duplications
thereof, relating to this transaction, whether obtained before or after
the execution hereof, to the party furnishing the same;
(b) all information received by either party hereto with respect to the
business of the other party (other than information which is a matter
of public knowledge or which has heretofore been published in any
publication for public distribution or filed as public information with
any governmental authority) shall not at any time be used for any
business purpose by such party or disclosed by such party to third
persons; and
(c) each party will pay its own expenses.
Section 10.3. Payment of Expenses.
Should the transactions contemplated herein not be consummated because of a
party's breach of this Agreement, in addition to such damages as may be
recoverable in law or equity, the other party shall be entitled to recover from
the breaching party upon demand, itemization and documentation, its reasonable
outside legal, accounting, consulting and other out-of-pocket expenses.
ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.1. Completion of Barnett Transaction.
Seller and Purchaser acknowledge that the completion of the transactions
contemplated by this Agreement are contingent and dependent upon the completion
and closing of the Barnett Transaction. In the event that this Agreement is
terminated as provided for in Section 10.1(g), upon such termination neither
party shall be obligated in any way to the other.
Section 11.2. Amendment and Modification.
The parties hereto, by mutual consent, may amend, modify and supplement this
Agreement in such manner as may be agreed upon by them in writing.
Section 11.3. Waiver or Extension.
Except with respect to required approvals of the applicable governmental
authorities, either party, by written instrument signed by a duly authorized
officer, may extend the time for the performance of any of the obligations or
other acts of the other party and may waive (a) any inaccuracies in the
representations and warranties contained herein or in any document delivered
pursuant hereto or (b) compliance with any of the undertakings, obligations,
covenants or other acts contained herein.
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<PAGE> 32
Section 11.4. Assignment.
This Agreement and all of the provisions hereof shall be binding upon, and shall
inure to the benefit of, the parties hereto and their permitted assigns; but
except for Purchaser's assignment of this Agreement to the Subsidiary, neither
this Agreement nor any of the rights, interests or obligations hereunder shall
be assigned by either of the parties hereto without the prior written consent of
the other.
Section 11.5. Confidentiality.
Seller and Purchaser agree that any confidentiality agreements between Seller
and Purchaser shall survive the execution hereof and the consummation of the
transactions contemplated herein.
Section 11.6. Addresses for Notices, Etc.
All notices, requests, demands, consents and other communications provided for
hereunder and under the related documents shall be in writing and mailed (by
registered or certified mail, return receipt requested), telegraphed, telexed,
telecopied or personally delivered (with receipt thereof acknowledged) to the
applicable party at the address indicated below:
If to Seller: NationsBank Corporation
Attn.: Frank L.Gentry
100 North Tryon Street
NC1-007-33-02
Charlotte, NC 28255
Fax: (704) 386-6416
with a copy to: NationsBank Corporation
Attn: General Counsel
100 North Tryon Street
NC1-007-20-01
Charlotte, NC 28255
Fax Number: (704) 386-2400
If to Purchaser: Republic Bancshares, Inc.
Attn: John W. Sapanski, Chairman, CEO and President
111 Second Avenue, N.E.
St. Petersburg, Florida 33701
Fax: (813) 824-8860
with a copy to: Republic Bancshares, Inc.
Attn: Chris Hunter, General Counsel
111 Second Avenue, N.E.
St. Petersburg, Florida 33701
Fax: (813) 824-8860
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<PAGE> 33
or, as to each party, at such other address as shall be designated by such party
in a written notice to the other party complying as to delivery with the terms
of this Section.
Section 11.7. Counterparts.
This Agreement may be executed simultaneously in two or more counterparts, each
of which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
Section 11.8. Headings.
The headings of the Sections and Articles of this Agreement are inserted for
convenience only and shall not constitute a part thereof.
Section 11.9. Governing Law.
This Agreement shall be governed by, and construed in accordance with, the laws
of the state of North Carolina.
Section 11.10. Sole Agreement.
Except for the Confidentiality Agreement, this Agreement and the exhibits and
attachments hereto represent the sole agreement between the parties hereto
respecting the transactions contemplated hereby and all prior or contemporaneous
written or oral proposals, agreements in principle, representations, warranties
and understandings between the parties with respect to such matters are
superseded hereby and merged herein.
Section 11.11. Severability.
If any provision of this Agreement is invalid or unenforceable, the balance of
this Agreement shall remain in effect.
Section 11.12. Parties In Interest.
Nothing in this Agreement, express or implied, expressly including, without
limiting the generality of the foregoing in any way, the provisions of Section
2.6(a) hereof, is intended or shall be construed to confer upon or give to any
person (other than the parties hereto, their successors and permitted assigns)
any rights or remedies under or by reason of this Agreement, or any term,
provision, condition, undertaking, warranty, representation, indemnity, covenant
or agreement contained herein.
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<PAGE> 34
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their duly authorized officers as of the date first written above.
NATIONSBANK CORPORATION
By:/s/ Charles P. Welch
-------------------------
Name: Charles P. Welch
-----------------------
Title: Senior Vice President
----------------------
REPUBLIC BANCSHARES, INC.
By:/s/ John W. Sapanski
------------------------
Name: John W. Sapanski
----------------------
Title: CEO
---------------------
30
<PAGE> 35
PURCHASE AND ASSUMPTION AGREEMENT
BETWEEN
NATIONSBANK CORPORATION
AND
REPUBLIC BANCSHARES, INC.
EXHIBIT LIST
<TABLE>
<CAPTION>
Exhibit No. Description
----------- -----------
<S> <C>
1.l(b) List of Banking Facilities
2.1(b) List of Excluded Assets
2.4(j) Form of Power of Attorney
2.6(c) Severance Benefits
3.2(b)(1) Form of Special Warranty Deed
3.2(b)(2) Form of Bill of Sale
3.2(b)(3) Form of Assignment and
Assumption Agreement
3.2(b)(4) Form of Assignment and Assumption of Lease
3.2(b)(15) Form of Closing Statement
</TABLE>
31
<PAGE> 36
EXHIBIT 1.1(b)
PURCHASE AND ASSUMPTION AGREEMENT
BETWEEN
NATIONSBANK CORPORATION
AND
REPUBLIC BANCSHARES, INC.
LIST OF BANKING FACILITIES
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
MARKET BRANCH NAME ADDRESS
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<S> <C> <C>
Brunswick Cypress Mill Road 3420 Cypress Mill Road
Brunswick, Georgia
- -------------------------------------------------------------------------------
</TABLE>
32
<PAGE> 37
EXHIBIT 2.1(b)
PURCHASE AND ASSUMPTION AGREEMENT
BETWEEN
NATIONSBANK CORPORATION
AND
REPUBLIC BANCSHARES, INC.
All fixtures, equipment and other items of personal property related to
Barnett's Merchandising Fixture Systems and located at the Banking Facilities,
including those items listed or depicted on the attached schedule.
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<PAGE> 38
BARNETT MERCHANDISING FIXTURE SYSTEM
CORE FIXTURES:
01A Entry/Exit Display:
Promotional floor display for placement at bank entrance/exit. 6'6" x 20"
01B Entry/Ideas Center:
Promotional floor display with a brochure rack on one side and a poster on the
opposite side. For placement at entry/exit. 6'6" x 20"
02 Ideas Center
A. Floorstanding brochure rack. 6'6" x 20"
B. 1 panel wall brochure rack. 39" x 32.5"
C. 2 panel wall brochure rack. 39" x 65"
03 Behind Teller Display
A. Wall hanging display which is placed directly behind teller windows. 24" x 6'
B. One sided display hung from ceiling and placed directly behind teller
windows. 24" x 6'
C. Two sided display hung from ceiling and placed directly behind teller
windows. 24" x 6'
04 Teller Fixture Display
A. Brochure pocket and promotional sign holder for placement directly on face of
teller counter. 11" x 20"
B. Brochure pocket and promotional sign holder with an overhanding bottom lip
for placement directly on face of teller counter. 11" x 20"
C. Brochure pocket and promotional sign holder for flexible placement on top of
teller counter. 11" x 20"
06 Door Sign
A promotional or holiday sign holder for all public entrances. 11" x 13"
07 Regulatory Sign
Displays all required regulatory disclosures. 36 x 24.5"
08 Drive Up Banner Stand
Upright banner holders that are placed at the top of the drive thru lanes. 8'6"
x20"
09 Drive Up Topper
Signholder that is placed either flat on the pneumatic tube or is clamped on top
of the unit. 11" x 11"
<PAGE> 39
[CORE FIXTURES PICTURES]
<PAGE> 40
The following items are also located in each banking center and are considered
proprietary:
acrylic poster stand with pockets
storage box for merchandising campaigns
tool kit
cleaning kit
merchandising handbook
graphics
from past campaigns
regulatory posters
holiday signs
semi-permanent graphics (in fixtures)
brochures
<PAGE> 41
EXHIBIT 2.4(j)
PURCHASE AND ASSUMPTION AGREEMENT
BETWEEN
NATIONSBANK CORPORATION
AND
REPUBLIC BANCSHARES, INC.
POWER OF ATTORNEY
THIS POWER OF ATTORNEY is dated this _________ day of _________199_, by
_____________________, a _____________________("Seller"), to be effective as of
__________ p.m., on __________, 199_.
W I T N E S S E T H:
WHEREAS, Seller and ________________________ ("Purchaser") have entered
into a Purchase and Assumption Agreement dated as of _____________, 199_ (the
"Agreement"), which provides for the sale by Seller to Purchaser of certain
personal property; and
WHEREAS, in a Bill of Sale to Purchaser dated __________, 199_ (the
"Bill of Sale"), Seller has agreed, from time to time, at the request of
Purchaser to execute, acknowledge and deliver to Purchaser any and all
instruments, documents, endorsements, assignments, information, materials and
other papers that may be reasonably required to (i) transfer to Purchaser's
certain Assets (as defined in the Bill of Sale) being acquired by Purchaser
pursuant to the Agreement, including loans and the collateral therefor to the
extent of Seller interest in such collateral and files and records relating to
such loans, (ii) enable Purchaser to bill, collect, service and administer the
loans transferred thereby and (iii) give full force and effect to the intent and
purpose of the Bill of Sale.
NOW, THEREFORE, for good and valuable consideration, receipt of which
is hereby acknowledged, Seller hereby irrevocably appoints and authorizes the
President or any Vice President, or the Secretary or any Assistant Secretary, of
Purchaser as its attorney-in-fact [solely for the purpose of endorsing and
recording, pursuant to the Bill of Sale, certificates of title for vehicles and
similar documents,] provided, such power of attorney is not intended to and does
not convey to Purchaser any right to endorse or record any documents of title
relating to collateral other than collateral transferred pursuant to the Bill
of Sale as described in the preceding paragraph.
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<PAGE> 42
IN WITNESS WHEREOF, Seller has caused this Power of Attorney to be
duly executed by its duly authorized officer as of the day and year first above
written.
WITNESSES ______________________________
______________________________ By:__________________________
Its:_________________________
STATE OF _____________________)
)
COUNTY OF_____________________)
Before me, the undersigned Notary Public, in and for the State and
County aforesaid, duly commissioned, qualified and acting, personally appeared
______________________, with whom I am personally acquainted (or proved to me
on the basis of satisfactory evidence), and who, upon oath, acknowledged
him/herself to be _____________________ of __________________, a _____________,
and s/he, as such officer, being authorized so to do, executed the foregoing
instrument for the purposes therein contained by signing the name of the
association by him/herself as such officer.
WITNESS my hand and official seal of office at ____________________,
County, ____________, this the ________ day of __________________, 199__.
_____________________________
Notary Public
My commission expires:
______________________
35
<PAGE> 43
EXHIBIT 2.6(c)
PURCHASE AND ASSUMPTION AGREEMENT
BETWEEN
NATIONSBANK CORPORATION
AND
REPUBLIC BANCSHARES, INC.
SEVERANCE BENEFITS
SEVERANCE PAY. Each Employee who has a [Qualified Termination] will be eligible
to receive Severance Pay in an amount equal to his Base Pay multiplied by his
whole and partial Years of Service (calculated to the nearest one-tenth year and
with a minimum of 2.0 years), with the product multiplied by his salary grade
factor as listed in the following chart:
SALARY GRADE FACTOR
1-7 1.0
8 1.25
9 1.3
10 1.4
11 1.5
12-15 1.7
16+ 2.0+
MINIMUM CREDIT FOR YEARS OF SERVICE. In calculating Severance Pay, the Employers
will grant credit for 2.0 Years of Service to each Employee whose actual Years
of Service are less than 2.0.
MAXIMUM SEVERANCE PAY. No Employee will be eligible for Severance Pay under this
Plan in an amount that exceeds twice the sum of (a) his annual Base Pay in
effect on his Termination Date, plus (b) all other cash compensation and the
value of all his Employer-provided benefits for the 12-month period preceding
his Termination Date.
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<PAGE> 44
EXHIBIT 3.2(b)(1)
Tax ID Number:__________
Prepared by:
Tia L. Cottey, Esquire
NationsBank, N.A.
100 North Tryon Street
Charlotte, NC 28255-0065
SPECIAL WARRANTY DEED
___________,a _____________, successor to _____________ ("Grantor")
whose address is ___________________, for and in consideration of the sum of
TEN AND NO/100 DOLLARS ($10.00) paid to Grantor and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, has
GRANTED, SOLD and CONVEYED and does hereby GRANT, SELL and CONVEY unto, ______,
a Georgia _______________ ("Grantee"), whose address is ________________, in
fee simple, that certain land located in ____ County, Georgia, being more
particularly described in Exhibit A, attached hereto and incorporated herein by
reference, together with all improvements, if any, located on such land (such
land and improvements being collectively referred to as the "Property").
This conveyance is made and accepted subject to all matters (the
"Permitted Exceptions") set forth in Exhibit B, attached hereto and incorporated
herein by reference.
TO HAVE AND TO HOLD the Property, together with all and singular the
rights and appurtenances pertaining thereto, including all of Grantor's right,
title and interest in and to adjacent streets, alleys and rights-of-way, subject
to the Permitted Exceptions, unto Grantee and Grantee's heirs, successors and
assigns forever. And Grantor hereby covenants with Grantee that, except as above
noted, that at the time of the delivery of this Special Warranty Deed the
Property was free from all encumbrances made by it and that Grantor will warrant
and defend the same against the lawful claims and demands of all persons
claiming by, through or under Grantor, but against none other.
BY ACCEPTANCE OF THIS DEED, GRANTEE ACKNOWLEDGES THAT GRANTOR HAS NOT
MADE, DOES NOT MAKE AND SPECIFICALLY NEGATES AND DISCLAIMS ANY REPRESENTATIONS,
WARRANTIES, PROMISES, COVENANTS, AGREEMENTS OR GUARANTIES OF ANY KIND OR
CHARACTER WHATSOEVER, WHETHER EXPRESS OR IMPLIED, ORAL OR WRITTEN, PAST, PRESENT
OR FUTURE, OF, AS TO, CONCERNING OR WITH RESPECT TO (A) THE VALUE, NATURE,
QUALITY OR CONDITION OF THE PROPERTY, INCLUDING, WITHOUT LIMITATION, THE WATER,
SOIL AND GEOLOGY, (B) THE INCOME TO BE DERIVED FROM THE PROPERTY, (C) THE
SUITABILITY OF THE PROPERTY FOR ANY AND ALL ACTIVITIES AND USES WHICH GRANTEE
MAY CONDUCT THEREON, (D) THE COMPLIANCE OF OR BY THE PROPERTY OR ITS OPERATION
WITH
37
<PAGE> 45
ANY LAWS, RULES, ORDINANCES OR REGULATIONS OF ANY APPLICABLE GOVERNMENTAL
AUTHORITY OR BODY, (E) THE HABITABILITY MERCHANTABILITY, MARKETABILITY,
PROFITABILITY OR FITNESS FOR A PARTICULAR PURPOSE OF THE PROPERTY, (F) THE
MANNER OR QUALITY OF THE CONSTRUCTION OR MATERIALS, IF ANY, INCORPORATED INTO
THE PROPERTY, (G) THE MANNER, QUALITY, STATE OF REPAIR OR LACK OF REPAIR OF THE
PROPERTY, OR (H) ANY OTHER MATTER WITH RESPECT TO THE PROPERTY, AND
SPECIFICALLY, THAT GRANTOR HAS NOT MADE, DOES NOT MAKE AND SPECIFICALLY
DISCLAIMS ANY REPRESENTATIONS REGARDING COMPLIANCE WITH ANY ENVIRONMENTAL
PROTECTION, POLLUTION OR LAND USE, ZONING AND DEVELOPMENT OF REGIONAL IMPACT
LAWS, RULES, REGULATIONS, ORDERS OR REQUIREMENTS, INCLUDING THE DISPOSAL OR
EXISTENCE IN OR ON THE PROPERTY, OF ANY HAZARDOUS MATERIALS, WASTES OR
SUBSTANCES DEFINED IN ANY FEDERAL, STATE OR LOCAL LAWS OR ANY OTHER SPECIALLY
REGULATED MATERIALS INCLUDING, BUT NOT LIMITED TO, ASBESTOS, PETROLEUM PRODUCTS,
POLYCHLORINATED BIPHENYL, OR RADON GAS. GRANTEE FURTHER ACKNOWLEDGES THAT TO THE
MAXIMUM EXTENT PERMITTED BY LAW, THE SALE OF THE PROPERTY IS MADE ON AN "AS IS"
CONDITION AND BASIS WITH ALL FAULTS. THE FOREGOING CLAUSE SUPERSEDES ANY
REPRESENTATIONS AND WARRANTIES CONCERNING THE PROPERTY CONTAINED IN THE PURCHASE
AND ASSUMPTION AGREEMENT DATED, _________, 199_, ENTERED INTO BY OR FOR THE
BENEFIT OF GRANTOR OR GRANTEE.
Ad valorem taxes for the present year having been prorated, Grantee
hereby assumes payment thereof, and subsequent assessments for that and prior
years due to change in land usage, ownership, or both.
38
<PAGE> 46
EXECUTED on the date set forth in the acknowledgment attached hereto to be
effective as of the ____ day of ________________________, 1997.
WITNESSES: _____________________________________________
a
____________________________________________
_____________________________ By:__________________________________________
Name:________________________ Name:________________________________________
Title:_______________________________________
_____________________________
Name:________________________
(Corporate Seal)
STATE OF __________________
COUNTY OF _________________
The foregoing instrument was acknowledged before me on __________, 1997, by
_________________________________, as ______________ of _______________________,
a ______________________, on behalf of the ________________________. He/She is
personally known to me or has produced ______________________ as identification.
_____________________________________________
Name:________________________________________
NOTARY PUBLIC, STATE OF______________________
(SEAL)
Serial Number (if any)_______________________
My Commission Expires:_______________________
39
<PAGE> 47
EXHIBIT A TO SPECIAL WARRANTY DEED
40
<PAGE> 48
EXHIBIT B TO SPECIAL WARRANTY DEED
PERMITTED EXCEPTIONS
TO DEED
1. Visible and apparent easements and all underground easements, if any,
the existence of which may arise by unrecorded grant or by use.
2. Any and all unrecorded leases, if any, and rights of parties therein.
3. Taxes and assessments for the year of closing and subsequent years.
4. All valid and enforceable covenants, restrictions, reservations,
easements and other matters as shown on the public record.
5. All matters which would be disclosed by an accurate survey of the
Property.
6. Governmental rights of police power or eminent domain unless notice of
the exercise of such rights appears in the public records as of the
date hereof; and the consequences of any law, ordinance or governmental
regulation including, but not limited to, building and zoning
ordinances.
7. Defects, liens, encumbrances, adverse claims or other matters (1) not
known to the Grantor and not shown by the public records but known to
the Grantee as of the date hereof and not disclosed in writing by the
Grantee to the Grantor prior to the date hereof; (2) resulting in no
loss or damage to the Grantee; or (3) attaching or creating subsequent
to the date hereof.
41
<PAGE> 49
EXHIBIT 3.2(b)(2)
PURCHASE AND ASSUMPTION AGREEMENT
BETWEEN
NATIONSBANK CORPORATION
AND
REPUBLIC BANCSHARES, INC.
BILL OF SALE
THIS BILL OF SALE is dated this ___ day of ____________, 199_, by
__________________, a _______________("Seller").
WITNESSETH:
WHEREAS, Seller and _______________, a ________________________
("Purchaser"), have entered into a Purchase and Assumption Agreement dated as of
___________________ , 199_ (the "Agreement"), which provides for the sale by
Seller to Purchaser of certain personal property and loans related to Seller's
Cypress Mill Road offices in Brunswick, Georgia (the "Banking Facilities"), all
as set forth in the Agreement. Capitalized terms used, but not defined, herein
shall have the meanings defined in the Agreement;
NOW, THEREFORE, Seller, for good and valuable consideration, receipt of
which is hereby acknowledged, does hereby grant, bargain, sell, assign, set
over, convey and transfer to Purchaser all of its right, title and interest in
and to the following assets (the "Assets"):
(a) All furniture, fixtures, equipment and other tangible personal
property located in the Banking Facilities, except for those
items listed in Exhibit 2.l(b) of the Agreement;
(b) All of the loans maintained, serviced and listed in Seller
general ledger as loans of the Banking Facilities (except for
those loans described in Section 2.4(b) of the Agreement) (the
"Loans"); and
(c) All of Seller's files and records related to the Loans and the
Equipment Leases, Deposit Liabilities and other liabilities
(as such terms are defined or described in the Agreement).
[Seller, for itself and its successors and assigns, does hereby
covenant and agree to and with Purchaser and its successors and assigns that it
(i) owns the Assets free and clear of any mortgages, liens, security interests
or pledges, and (ii) shall, from time to time, at the request of Purchaser,
execute,
42
<PAGE> 50
acknowledge and deliver to Purchaser any and all further instruments, documents,
endorsements, assignments, information, materials and other papers that may be
reasonably required to transfer the Assets to Purchaser, to enable Purchaser to
bill, collect, service and administer the Loans and to give full force and
effect to the full intent and purposes of this Bill of Sale.]
IN WITNESS WHEREOF, Seller has caused this Bill of Sale to be duly
executed by its duly authorized officer as of the day and year first above
written.
------------------------------------
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
43
<PAGE> 51
EXHIBIT 3.2(b)(3)
PURCHASE AND ASSUMPTION AGREEMENT
BETWEEN
NATIONSBANK CORPORATION
AND
REPUBLIC BANCSHARES, INC.
ASSIGNMENT AND ASSUMPTION AGREEMENT
THIS ASSIGNMENT AND ASSUMPTION AGREEMENT is entered into this ___ day
of ___________, 199_, by and between, _________________________, a
___________________ ("Seller"), and ___________________, a
___________________ ("Purchaser").
WITNESSETH:
WHEREAS, Seller and Purchaser have entered into a Purchase and
Assumption Agreement dated as of _____________, 199_ (the "Agreement"), which
provides for the assignment by Seller of all of its rights and interests in and
to certain leases, contracts, deposit accounts and other liabilities related to
Seller's Cypress Mill Road offices in Brunswick, Georgia (the "Banking
Facilities"), and the assumption by Purchaser of all of Seller liabilities and
obligations thereunder, all as set forth in the Agreement;
NOW, THEREFORE, in consideration of the foregoing, and for other good
and valuable consideration, receipt of which is hereby acknowledged by Seller
and Purchaser, Seller hereby assigns, transfers and sets over to Purchaser all
of Seller's rights and interest to, and Purchaser hereby assumes all of Seller's
liabilities and obligations in connection with, the following assets (the
"Assets");
(a) All equipment leases for equipment located at the Banking
Facilities (the "Equipment Leases");
(b) All deposit accounts located at the Banking Facilities, except
for those deposit accounts and liabilities described in
Section 2.3(b) of the Agreement (the "Deposit Liabilities");
and
(c) Safe Deposit Contracts.
This Assignment and Assumption Agreement shall be binding upon, and
shall inure to the benefit of, Seller, Purchaser, and each of their successors
and assigns and shall be subject to the terms and conditions of the Agreement.
In the event of a conflict between any of the terms and provisions hereof and
the Agreement, the Agreement shall be deemed to control.
44
<PAGE> 52
This Assignment and Assumption Agreement, and the rights and
obligations of the parties hereunder, shall be governed by and construed in
accordance with the laws of the State of _______________.
IN WITNESS WHEREOF, the parties hereto have caused this Assignment and
Assumption Agreement to be executed by their duly authorized officers, all as of
the day and year first above written.
------------------------------------
By:
---------------------------------
Title:
------------------------------
------------------------------------
By:
---------------------------------
Title:
------------------------------
45
<PAGE> 53
EXHIBIT 3.2(b)(4)
Prepared By/Return To
Tia L. Cottey Esq.
NationsBank Corporation
100 N. Tryon Street, 20th Floor
Legal Department
Charlotte, North Carolina 28255
ASSIGNMENT AND ASSUMPTION OF LEASE
(WITH LANDLORD CONSENT)
The parties to this Assignment and Assumption of Lease (the
"Assignment") are _____________ , a ______________ ("Assignor"), and
______________, a _____________________________ ("Assignee").
WHEREAS, under the terms of the Lease attached hereto as Exhibit "A"
(the "Lease"), Assignor is the tenant of certain real property and improvements
situated in __________, and having a street address of _______________________,
(the "Leased Premises"); and
WHEREAS, Assignor has agreed to assign all of its right, title and
interest in and to the Lease to Assignee, and Assignee has agreed to assume and
perform Assignor's liabilities and obligations arising under the Lease on and
after the date hereof, all in accordance with this Assignment.
NOW THEREFORE, in consideration of the foregoing and the agreements and
covenants herein set forth, the sum of TEN AND NO/100 DOLLARS ($10.00), and
other good and valuable consideration paid by Assignee to Assignor, the receipt
and sufficiency of which are hereby acknowledged, effective as of _____________,
1997 (the "Effective Date"), Assignor does hereby ASSIGN, TRANSFER, SET OVER and
DELIVER unto Assignee WITHOUT RECOURSE, REPRESENTATION OR WARRANTY all of
Assignor's right, title and interest under the Lease as tenant or lessee in and
to the Lease and all of the rights, benefits and privileges of the tenant or
lessee thereunder, but subject to all terms, conditions, reservations and
limitations set forth in the Lease.
By accepting this Assignment and by its execution hereof, Assignee
hereby assumes and agrees to perform all of the terms, covenants and conditions
of the Lease on the part of the tenant or lessee therein required to be
performed from and after the Effective Date, including, but not limited to, the
obligation to pay, in accordance with the terms of the Lease, rent and all other
monetary obligations. On or before the Effective Date, Assignee shall reimburse
Assignor for any and all security deposits paid by Assignor under the Lease.
Assignee hereby agrees to indemnify and hold homeless Assignor from and
against any and all loss, cost or expense (including, without limitation,
reasonable attorney's fees) resulting by reason of Assignee's failure to perform
any of the obligations of tenant or lessee under the Lease after the Effective
Date. Assignee hereby releases, acquits, and forever discharges Assignor and its
employees, agents, officers,
46
<PAGE> 54
subsidiaries, affiliates, successors and assigns, from any and all actions,
causes of actions, claims, demands, costs, losses, and expenses of any kind
whatsoever, both known and unknown, arising out of any matter, happening or
thing relating to the Lease.
Assignee hereby acknowledges that the Leased Premises shall be
delivered by Assignor and accepted by Assignee in "AS IS" condition without
representation or warranty as to the condition of the Leased Premises or their
suitability for any particular use.
EXCEPT AS EXPRESSLY SET FORTH HEREIN, ASSIGNOR DISCLAIMS, AND ASSIGNEE
ACKNOWLEDGES AND ACCEPTS THAT ASSIGNOR HAS DISCLAIMED, TO TEE MAXIMUM EXTENT
PERMITTED BY LAW, ANY AND ALL REPRESENTATIONS, WARRANTIES, OR GUARANTIES OF ANY
KIND, ORAL OR WRITTEN, WHETHER EXPRESS OR IMPLIED, CONCERNING THE LEASED
PREMISES INCLUDING, BUT NOT LIMITED TO: (I) THE VALUE, CONDITION,
MERCHANTABILITY, MARKETABILITY, PROFITABILITY, SUITABILITY, OR FITNESS FOR A
PARTICULAR USE OR PURPOSE OF THE LEASED PREMISES; (II) THE MANNER OR QUALITY OF
THE CONSTRUCTION OF MATERIALS, IF ANY, INCORPORATED INTO THE LEASED PREMISES; OR
(III) THE MANNER, QUALITY, STATE OF REPAIR, OR LACK OF REPAIR OF THE LEASED
PREMISES. ASSIGNOR IS NOT LIABLE OR BOUND IN ANY MANNER BY ANY VERBAL OR WRITTEN
STATEMENTS, REPRESENTATIONS, OR INFORMATION PERTAINING TO THE LEASE OR THE
LEASED PREMISES, FURNISHED BY ANY REAL ESTATE BROKER OR FINDER OR OTHER PERSON
UNLESS THE SAME ARE SPECIFICALLY SET FORTH HEREIN. ASSIGNEE SHALL TAKE THE
LEASED PREMISES SUBJECT TO ALL LIENS, ENCUMBRANCES AND OTHER MATTERS OF RECORD
ENCUMBERING THE LEASED PREMISES AS OF THE EFFECTIVE DATE HEREOF. THE FOREGOING
CLAUSE SUPERSEDES ANY REPRESENTATIONS AND WARRANTIES CONCERNING THE LEASED
PREMISES CONTAINED IN THE PURCHASE AND ASSUMPTION AGREEMENT DATED __________,
199_, ENTERED INTO BY OR FOR THE BENEFIT OF ASSIGNOR OR ASSIGNEE.
All of the covenants, terms and conditions set forth herein shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective heirs, executors, administrators, personal representatives,
successors and assigns.
Assignee shall pay all documentary stamp taxes, if any, due in
connection with this Assignment and shall indemnity and hold Assignor harmless
from and against the claims of the Florida Department of Revenue for the payment
of documentary stamp taxes in connection with this Assignment or the Lease.
47
<PAGE> 55
Assignor and Assignee warrant to each other that neither of them has
consulted or negotiated with any broker with regard to this Assignment. Assignor
and Assignee hereby indemnify and hold each other harmless against any loss,
claim, expense, or liability with respect to commission or brokerage fees
claimed on account of this Assignment due to any action of the indemnifying
party.
[SIGNATURES ON FOLLOWING PAGE]
48
<PAGE> 56
WITNESSES: __________________________________________, a
__________________________________________
_____________________________ By:_______________________________________
Name:________________________ Name:_____________________________________
Title:____________________________________
_____________________________ By:_______________________________________
Name:________________________ Name:_____________________________________
Title:____________________________________
"ASSIGNOR"
AGREED TO AND ACCEPTED BY ASSIGNEE:
__________________________________________, a
__________________________________________
_____________________________ By:_______________________________________
Name:________________________ Name:_____________________________________
Title:____________________________________
_____________________________ By:_______________________________________
Name:________________________ Name:_____________________________________
Title:____________________________________
Address of Assignee:
__________________________________________
__________________________________________
"ASSIGNEE"
49
<PAGE> 57
STATE OF ___________________________
COUNTY OF __________________________
The foregoing instrument was acknowledged before me on ____________,
1997, by ____________ as ____________ of _____________, a ____________ on
behalf of the _______. He/She is personally known to me or has produced
_____________ as identification.
_______________________________________
Name:__________________________________
NOTARY PUBLIC, State of________________
(SEAL) Serial Number (if any)_________________
My Commission Expires:_________________
STATE OF FLORIDA
COUNTY OF HILLSBOROUGH
The foregoing instrument was acknowledged before me on ______________,
1997, by _______________________________________________________________________
as ______________ of ______________________, a _________________________, on
behalf of the ________________. He/She is personally known to me or has
produced _____________________________ as identification.
_______________________________________
Name:__________________________________
NOTARY PUBLIC, State of________________
(SEAL) Serial Number (if any)_________________
My Commission Expires:_________________
[LANDLORD CONSENT CONTINUED ON NEXT PAGE]
50
<PAGE> 58
CONSENT AND RELEASE BY LANDLORD
In consideration of ten dollars ($10.00) and other valuable
consideration, the receipt and sufficiency _______________ of which is hereby
acknowledged, _________________________________________ (Landlord"), does
hereby acknowledge, approve and consent to the foregoing Assignment, and,
effective as of __________, 1997, Landlord and its successors and assigns
hereby release, acquit, satisfy and forever discharge Assignor and its
employees, agents, officers, subsidiaries, affiliates, successors and assigns,
from any and all actions, causes of action, claims, demands, rights, damages,
costs, losses, expenses, occurrences, and liability of any kind whatsoever,
both known and unknown, arising out of any matter, happening or thing, from the
beginning of time and relating to the Lease. Landlord acknowledges and agrees
that Assignor is released from all liability under the Lease, effective as of
____________ __, 1997.
Landlord represents and warrants that it has full authority to
execute this Assignment without the joinder or consent of any party (or if such
consent is required, that Landlord has secured same), including, but not
limited to, any lenders holding mortgages encumbering the Leased Premises, and
that Landlord has not assigned any of its rights, title or interest in the
Lease to any other party, which representations and warranties shall survive
the execution of this Assignment and the release of Assignor under this Lease.
Landlord agrees to indemnify and hold Assignor harmless from and against any
claims, losses, demands, liabilities, damages and expenses of any kind or
nature, including, without limitation, attorneys fees and costs, incurred or
arising by reason of a breach or violation of any of the agreements,
obligations, covenants, or representations and warranties of Landlord contained
herein.
______________________________
______________________________
______________________________
________________________________ By:___________________________
Printed Name:___________________ ______________________________
________________________________
Name:_________________________
Printed Name:___________________
Title:________________________
"LANDLORD"
51
<PAGE> 59
STATE OF FLORIDA
COUNTY OF __________________
The foregoing instrument was acknowledged before me this ___ day of
____________, 1997 by ___ ______________________, as ______________________, a
__________________, on behalf of the ________________________________________.
He/She is personally known to me or has produced _____________________ as
identification.
My Commission Expires
_______________________ _____________________________
NOTARY PUBLIC
(SEAL) _____________________________
(Type or Print Name)
52
<PAGE> 60
EXHIBIT "A" TO ASSIGNMENT AND ASSUMPTION AGREEMENT
LEASE AGREEMENT
53
<PAGE> 61
EXHIBIT 3.2(b)(15)
PURCHASE AND ASSUMPTION AGREEMENT
BETWEEN
NATIONSBANK CORPORATION
AND
REPUBLIC BANCSHARES, INC.
CLOSING STATEMENT
(PRE-CLOSING BALANCE SHEET AS OF _________________)
CASH DUE PURCHASER FOR:
Deposit liabilities (including accrued interest) __________
[Pro rata real property taxes] __________
Total Cash due Purchaser
==========
CASH DUE SELLER FOR:
Net Book Value of Real and Personal Property __________
Other __________
Premium for Deposit Liabilities __________
Net Book Value of Loans (including accrued interest) __________
Coins and currency __________
Pro rata FDIC insurance __________
Other prorated items __________
Total Cash due Seller
==========
Net cash due (Purchaser)(Seller) __________
54
<PAGE> 62
Seller hereby approves the Closing Statement and acknowledges receipt of the
total cash due Seller. Purchaser hereby approves the Closing Statement,
acknowledges receipt of the net cash due Purchaser and assumes liability for
payment of all taxes and other items as provided for in the Purchase and
Assumption Agreement between Seller and Purchaser dated as of _________, 19__
(the "Agreement"). Seller and Purchaser agree to make subsequent adjustments
to the extent necessary in accordance with Section 3.3 of the Agreement.
______________________________________
By:___________________________________
Name:_________________________________
Title:________________________________
Date:_________________________________
______________________________________
By:___________________________________
Name:_________________________________
Title:________________________________
Date:_________________________________
55
<PAGE> 1
EXHIBIT 21.0
LIST OF SUBSIDIARIES
Republic SPC1 Corporation
VQH Development, Inc.
RBREO, Inc.
Tampa Bay Equities, Inc.
Firststate Service Corporation
Republic Insurance Agency, Inc.
Gulf American Financial Corporation
Gulf American S.B.L., Inc.
<PAGE> 1
CONSENT TO USE OF REPORT OF
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
As independent certified public accountants, we hereby consent to the
incorporation of our report included in this Form 10-K/A into Republic
Bancshares, Inc.'s previously filed Registration Statement File No. 333-32151.
/s/ Arthur Andersen LLP
Tampa, Florida,
April 9, 1998
