SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
December 4, 1998
CAPITAL CITY BANK GROUP, INC.
(Exact name of registrant as specified in its charter)
Florida 0-13358 59-2273542
(State of Incorporation) (Commission File Number) (IRS Employer
Identification No.)
217 North Monroe Street, Tallahassee, Florida 32301
(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code: (850) 671-0300
(Former Name or Former Address, if Changed Since Last Report)
CAPITAL CITY BANK GROUP, INC.
FORM 8-K
CURRENT REPORT
Item 2. Acquisition or Disposition of Assets
Capital City Bank Group, Inc. (the "Company") is a bank holding
company that owns all of the issued and outstanding stock of Capital City
Bank, a Florida chartered commercial bank ("CCB"). On December 4, 1998,
CCB completed an acquisition of eight (8) branch offices (the "Branches")
from First Union National Bank ("First Union"). The Branches are located
in Chipley, Sunny Hills, Port St. Joe, Keystone Heights, Starke (two
offices) and Palatka (two offices), Florida.
At the closing, the Company assumed deposits and other liabilities
totaling approximately $220 million, and purchased real property,
furniture and equipment and other assets relating to the Branches. After
giving effect to a deposit premium on the deposits assumed totaling
approximately $18.2 million, First Union paid approximately $197.8 million
in cash to the Company as consideration for the net deposit liabilities
assumed by the Company.
Following the acquisition of the Branches, the Company will
operate each of the Branches as a branch of CCB.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(a) Financial Statements of Business Acquired.
Not applicable. Since the acquisition described above was not the
acquisition of a business, separate entity or subsidiary of First
Union, no historical financial statements are required or included
herein.
(b) Pro Forma Financial Information.
Not applicable. Since the acquisition described above was not the
acquisition of a business, separate entity or subsidiary of First
Union, no pro forma financial statements are required or included
herein.
(c) Exhibits.
2.1 Purchase and Assumption Agreement, dated as of August 26,
1998, by and between Capital City Bank and First Union
National Bank.
2.2 Addendum to Purchase and Assumption Agreement, dated as of
December 3, 1998, by and between Capital City Bank and
First Union National Bank.
2.3 Second Addendum to Purchase and Assumption Agreement, dated
as of December 4, 1998, by and between Capital City Bank
and First Union National Bank.
99.1 Copy of the Company's Press Release issued December 7, 1998.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned hereunto duly authorized.
CAPITAL CITY BANK GROUP, INC.
Date: December 18, 1998
By: /s/ J. Kimbrough Davis
J. Kimbrough Davis
Executive Vice President
and Chief Financial Officer
CAPITAL CITY BANK GROUP, INC.
Current Report on Form 8-K
Exhibit Index
Exhibit No. Description
2.1 Purchase and Assumption Agreement, dated as of August 26,
1998, by and between Capital City Bank and First Union
National Bank.
2.2 Addendum to Purchase and Assumption Agreement, dated as of
December 3, 1998, by and between Capital City Bank and
First Union National Bank.
2.3 Second Addendum to Purchase and Assumption Agreement, dated
as of December 4, 1998, by and between Capital City Bank
and First Union National Bank.
99.1 Copy of the Company's Press Release issued December 7, 1998.
PURCHASE AND ASSUMPTION AGREEMENT
This Agreement, dated as of August 26, 1998, is by and between,
Capital City Bank, a bank organized under the laws of the State of Florida
having its principal place of business in Tallahassee, Florida ("Buyer"),
and First Union National Bank, a national banking association having its
principal place of business in Charlotte, North Carolina ("Seller").
I. DEFINITIONS
1.1 Certain Defined Terms.
Some of the capitalized terms appearing in this Agreement
are defined below. The definition of a term expressed in the singular
also applies to that term as used in the plural and vice versa.
"Affiliate" means a Person that directly or indirectly,
through one or more intermediaries, controls, is controlled by, or is
under common control with, a specified Person, except in those cases where
the controlling Person exercises control solely in a fiduciary capacity.
"Amount of Premium" has the meaning set forth in Section 3.1 of this Agreement.
"Assets" has the meaning set forth in Section 2.1 of this Agreement.
"Benefit Plan" means any pension, profit-sharing, or other
employee benefit, fringe benefit, severance or welfare plan maintained by
or with respect to which contributions are made by, Seller or any of its
Affiliates with respect to Seller's employees at the Branches.
"Branches" means those branch offices of Seller listed on
Schedule 1.1 to this Agreement.
"Business Day" means any Monday, Tuesday, Wednesday,
Thursday or Friday on which Seller is open for business.
"Closing" means the purchase of the Assets by Buyer and the
assumption of the Liabilities by Buyer on the Closing Date.
"Closing Date" has the meaning set forth in Section 9.1 of this Agreement.
"Closing Documents" refers to the documents to be executed
and delivered by Buyer and/or Seller, as applicable, on the Closing Date
certain of which shall be substantially in the form attached as Exhibit A
to this Agreement.
"Closing Statement" means the document to be delivered to
Buyer pursuant to Section 3.2 in the form of Exhibit B to this Agreement.
"Deposit Accounts" means the deposit accounts at the
Branches, the balances of which are included in the Deposits or would be
so included if the Deposit Account had a positive balance.
"Deposits" means all deposits (as defined in 12 U.S.C.
Section 1813(l)) which are booked at the Branches as of the Close of
Business on the Closing Date, including in each case accrued but unpaid
interest and both collected and uncollected funds, but excluding (i)
deposits held in accounts for which Seller acts as fiduciary (other than
deposits held by Retirement Plans), (ii) deposits constituting official
checks, travelers checks, money orders or certified checks, (iii)
purchased deposits, or (iv) deposits held in CAP Accounts.
"Equipment Leases" means those operating and financial
leases and conditional sales contracts covering Fixed Assets which Seller
may assign to Buyer without restriction or with the lessor's written
consent, with respect to the Branches being acquired hereunder.
"ERISA" means the Employee Retirement Income Security Act
of 1974, as amended.
"ERISA Affiliate" means any entity that is considered one
employer with Seller under Section 4001 of ERISA or Section 414 of the
Internal Revenue Code of 1986, as amended.
"Federal Funds Rate" means, for any day, the rate per annum
(expressed on a basis of calculation of actual days in a year) equal to
the "near closing bid" federal funds rate published in The Wall Street
Journal on the Business Day following the Closing Date.
"Fixed Assets" means all fixtures (including signage
poles), leasehold improvements, furnishings (excluding artwork owned by
Seller), vaults, safe deposit boxes, equipment (including, for example,
all ATM machines, but excluding any computer, telecommunications or teller
equipment), supplies (other than forms and other supplies which bear
Seller's name or logo), and other personal property, which are owned or
(to the extent of Seller's interest as lessee) leased by Seller, which are
located at the Branches on the Closing Date and which are in good working
order, including all warranties and guaranties (manufacturer's or
otherwise) as to Fixed Assets which are in force and effect as of the
Closing Date and which are not expressly non-assignable by their own
terms.
"Governmental Entity" means any government or any agency,
bureau, board, commission, court, department, official, political
subdivision, tribunal or other instrumentality of any government having
authority in the United States, whether federal, state or local.
"Hazardous Material" means any substance presently, or
until the Closing Date, listed, defined, designated or classified as
hazardous, toxic, radioactive or dangerous or otherwise regulated, under
any applicable state or federal law relating to the protection,
preservation or restoration of the environment, including, but not limited
to, the following federal environmental laws: the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, the
Superfund Amendment and Reauthorization Act, the Water Pollution Control
Act of 1972, the Clean Air Act, the Clean Water Act, the Resource
Conservation and Recovery Act of 1976, the Solid Waste Disposal Act, the
Toxic Substances Control Act and the Insecticide, Fungicide and
Rodenticide Act, each as amended, and as may be amended from the date
hereof until the Closing Date.
"Instant Cash Reserve Lines of Credit" means those consumer
lines of credit made available to customers of the Branches as a
protection against overdrafts on the Deposit Accounts.
"Instant Cash Reserve Loans" means those loans outstanding
on the Closing Date pursuant to Instant Cash Reserve Lines of Credit.
"Leased Branches" means all premises of the Branches which
are leased under the Real Property Leases.
"Liabilities" has the meaning set forth in Section 2.2 of this Agreement.
"Mediator" means a firm of certified public accountants
mutually agreeable to Seller and Buyer.
"Overdrafts" means those overdrafts of the book balance of
any Deposit Accounts.
"Person" means an association, a corporation, an
individual, a partnership, a trust or any other entity or organization,
including a Governmental Entity.
"Real Property" means the land (including the improvements
thereon) owned by Seller on which any Branches are located.
"Real Property Leases" means the lease agreements pursuant
to which any Branches are leased by Seller.
"Retirement Plans" means those non-discretionary individual
retirement accounts and qualified retirement plan accounts relating to the
Deposits for which Seller acts as custodian or trustee.
"Training Expenses" means the overtime and out-of-pocket
expenses (meals and mileage) incurred by Seller, and documented according
to Seller's customary practices for such expenses, as a result of Buyer's
training schedule prior to Closing.
"Welfare Benefit Plans" means those Benefit Plans which are
"welfare benefit plans" as defined by ERISA.
II. PURCHASE OF ASSETS AND ASSUMPTION OF LIABILITIES
2.1 Purchase of Assets.
Subject to the terms and conditions of this Agreement, Seller
agrees to sell, assign and transfer possession of and all right, title and
interest of Seller in and to the following assets to Buyer (the "Assets")
and Buyer agrees to purchase the same from Seller, as of the close of
business on the Closing Date:
(a) the Real Property;
(b) the Fixed Assets;
(c) cash on hand in the Branches;
(d) the Instant Cash Reserve Loans;
(e) the Overdrafts; and
(f) Seller's rights under the Instant Cash Reserve Lines
of Credit and any safe deposit box rental agreements relating to
safe deposit boxes located at the Branches, and at the discretion
of Buyer, all rights of Seller under any service or similar
contract in effect as of the Closing Date listed on Schedule 2.1(f)
relating to the operations of the Branches to the extent that such
contracts are assignable.
2.2 Assumption of Liabilities.
Buyer agrees to assume, pay, perform and discharge the
following liabilities of Seller (the "Liabilities") as of the close of
business on the Closing Date for the period after the Closing Date.
Except as set forth below, Buyer shall not assume any other liabilities of
Seller:
(a) the Deposits and all terms and agreements relating to
the Deposit Accounts;
(b) Seller's duties and responsibilities relating to the
Deposits with respect to: (i) the abandoned property laws of any
state, (ii) any legal process which is served on Seller on or
before the Closing Date, and which Seller delivers to Buyer as soon
as practicable, with respect to claims against or for the Deposits
except to the extent the claim is against Seller over and above the
amount of the Deposits; or (iii) any other applicable law;
(c) Seller's duties and responsibilities with respect to
the Real Property Leases and the Equipment Leases;
(d) Seller's duties and responsibilities with respect to
the Instant Cash Reserve Lines of Credit;
(e) Seller's duties and responsibilities with respect to
the safe deposit boxes located at the Branches;
(f) Seller's duties and responsibilities with respect to
the Retirement Plans; and
(g) all of Seller's post-Closing obligations due under
any service or similar contract, in effect at the Closing, relating
to the operation of the Branches, to the extent that such contracts
are included in Section 2.1(f) of this Agreement.
2.3 Transfer of Records.
(a) At the Closing, Seller also shall transfer to Buyer
possession and all right, title and interest of Seller in and to
all books and records relating to the Assets and the Liabilities
which are maintained at the Branches.
(b) All books and records relating to the Assets and
the Liabilities held by either Seller or Buyer after the Closing
Date shall be maintained in accordance with (and for the period
provided in) that party's standard recordkeeping policies and
procedures. Throughout such period, the party holding such books
and records shall comply with the reasonable request of the other
party to provide copies of specified documents, at the expense of
the requesting party. The requesting party shall give reasonable
written notice of any such request.
2.4 Tax Matters.
(a) Notwithstanding Section 2.5, Buyer and Seller shall
both pay one-half (1/2) of any sales and use taxes and any interest
and penalties thereon which are payable or arise as a result of
this Agreement or the consummation of any of the transactions
contemplated by this Agreement.
(b) Notwithstanding Section 2.5, Seller shall pay to
Buyer or the relevant taxing jurisdiction (as appropriate under the
circumstances), or reimburse Buyer if Buyer shall have paid, any
real property documentary stamp taxes arising out of the transfer
of the Real Property, the Leased Branches, the Real Property Leases
and the Fixed Assets.
(c) Notwithstanding Section 2.5, Buyer shall pay to
Seller or the relevant taxing jurisdiction (as appropriate under
the circumstances), or reimburse Seller if Seller shall have paid,
any real property recording costs arising out of the transfer of
the Real Property, the Leased Branches, the Real Property Leases
and the Fixed Assets.
2.5 Proration of Certain Expenses.
Subject to the provisions of Section 2.4, all rentals, real
estate taxes (including ad valorem taxes relating to the Real Property),
personal property taxes (tangible or intangible), and utility, water and
sewer charges and assessments, as well as semiannual assessments paid to
the Bank Insurance Fund or the Savings Association Insurance Fund with
respect to the Deposits, shall be prorated between Buyer and Seller as of
the close of business on the Closing Date.
2.6 Back Office Conversion.
Seller and Buyer shall cooperate with each other and shall
use their reasonable best efforts (consistent with their internal
day-to-day operations) in order to cause the timely transfer of
information concerning the Assets and the Liabilities which is maintained
on Seller's data processing systems so that Buyer can incorporate such
information into Buyer's data processing systems no later than the opening
of business on the Business Day following the Closing Date.
2.7 Processing of Certain Items After Closing.
A draft of the written practices and procedures under which
Buyer and Seller shall handle all items (including, for example, automated
clearing house and electronic funds transfer items) relating to the Assets
and the Liabilities, which are presented or returned following the Closing
Date, and any claims relating to such items are attached to this Agreement
as Exhibit D, including certain other matters relating to consummation of
the transactions contemplated hereby (the "Working Agreement"), the terms
of which shall be incorporated herein and made a part of this Agreement.
As promptly as practicable following the execution of this Agreement, the
parties agree to finalize the Working Agreement.
2.8 Information Returns.
Buyer shall file all required information returns with the
Internal Revenue Service with respect to interest paid on the Deposits
after the Closing Date, interest received on the Instant Cash Reserve
Loans after the Closing Date, and any other information returns required
with respect to the Assets and the Liabilities for the periods beginning
after the Closing Date. Seller will file all required information returns
with the Internal Revenue Service and any information returns required by
state or local tax authorities with respect to interest paid on the
Deposits on or before the Closing Date, interest received on the Instant
Cash Reserve Loans on or before the Closing Date, and any other
information returns required with respect to the Assets and the
Liabilities for periods ending on or before the Closing Date.
2.9 Retransfer of Overdrafts and Instant Cash Reserve Loans.
During the period beginning on the Closing Date and ending
on the 60th day thereafter, Buyer shall be entitled upon written notice to
Seller to retransfer any Overdrafts or Instant Cash Reserve Loans
(referred to in this section as "Loan(s)") that are in default or cannot
be collected where such default or inability to collect arises within 30
days after the Closing Date. Buyer agrees that if Buyer cannot collect an
Instant Cash Reserve Loan, at any time within five years from the Closing
Date, because the documentation for such Loan is incomplete, then Buyer
shall first attempt to have the customer reexecute any required
documentation before Buyer shall attempt to retransfer such Loan to
Seller. The price at which the Buyer shall retransfer such Loans to Seller
shall be equal to the unpaid principal balance of the Loans, plus accrued
interest thereon for such obligations, on the date of retransfer. Buyer
shall service all Loans put back in accordance with normal and prudent
banking standards and practices until such Loans are repurchased by
Seller.
III. CONSIDERATION
3.1 Calculation.
In consideration of Buyer's purchase of the Assets and its
assumption of the Liabilities, Seller agrees to pay to Buyer an amount
equal to the Deposits, plus accrued interest thereon, less an amount (the
"Offset Amount") equal to the sum of the following, in each case
calculated as of the close of business on the Closing Date:
(a) net book value, as determined in accordance with
generally accepted accounting principles ("GAAP") consistently
applied, of the Fixed Assets;
(b) net book value, as determined in accordance with
GAAP consistently applied, of the Real Property;
(c) the principal amount of the Instant Cash Reserve
Loans, plus accrued interest thereon;
(d) the amount of cash on hand at the Branches;
(e) the principal amount of the Overdrafts;
(f) the net amount (which may be a negative amount) of
taxes payable by Buyer and Seller under Section 2.4 (i.e., the
amount payable by Buyer less the amount payable by Seller);
(g) the net amount (which may be a negative amount) of
any adjustments under Section 2.5 (i.e., the amount payable by
Buyer less the amount payable by Seller);
(h) an amount equal to 4 percent with respect to the
Chipley, Sunny Hills and Port St. Joe Branches, and 10.19 percent
with respect to the Starke, Keystone Heights, Palatka Mall and
Palatka Main Branches, of the average of the monthly Deposit
average for the calendar month preceding the month during which the
Closing Date occurs (the "Amount of Premium"); and
(i) the Training Expenses.
3.2 Settlement.
(a) Not later than the Saturday following the Closing
Date, Seller shall deliver to Buyer the Closing Statement prepared
in accordance with Seller's customary practices and procedures used
in preparing financial statements, substantially in the form of
Exhibit B to this Agreement, which shall be completed as of the
close of business on the Closing Date and be the basis of the
payment to be made to Buyer's account on the Monday following the
Closing Date (the "Settlement Payment"). Buyer shall receive
interest at the Federal Funds Rate on the amount of the Settlement
Payment for the period from the Closing Date until the Monday
following the Closing Date when the Settlement Payment is made.
(b) The parties shall cooperate in the preparation of
the Adjusted Closing Statement within 30 days after the Closing
Date which shall be prepared in accordance with Seller's customary
practices and procedures used in preparing financial statements,
substantially in the form of Exhibit C to this Agreement, which
shall be completed as of the close of business on the Closing Date.
On the Business Day after Buyer and Seller agree to the Adjusted
Closing Statement, or Buyer and Seller receive notice of any
determination of the Adjusted Closing Statement under subsection
(c) (the "Adjusted Settlement Date"), Seller shall pay to Buyer (or
Buyer shall pay to Seller, as the case may be) an amount (the
"Adjustment Payment") equal to the amount due stated on the
Adjusted Closing Statement, plus interest from the day after the
Closing Date until the calendar day before the Adjustment Payment
is made at a rate per annum (calculated daily based on a 360-day
year) equal to the Federal Funds Rate.
(c) If the parties are unable to agree on the Adjusted
Closing Statement within 30 days after the Closing Date, either
party may submit the matter to the Mediator, which shall determine
all disputed portions of the Adjusted Closing Statement in
accordance with the terms and conditions of this Agreement within
30 days after the submission. The parties shall each pay half of
the fees and expenses of the Mediator, except that the Mediator may
assess the full amount of its fees and expenses against either
party if it determines that party negotiated the Adjusted Closing
Statement in bad faith. The Adjusted Closing Statement, as agreed
upon by the parties and/or determined under this subsection, shall
be final and binding upon the parties.
(d) The Settlement Payment and the Adjustment Payment
shall each be made by wire transfer of immediately available funds
to the account of the party receiving the payment, which account
shall be identified by the party receiving the funds to the other
party not less than two Business Days prior to such payment.
IV. SELLER'S REPRESENTATIONS AND WARRANTIES
Seller makes the following representations and warranties to Buyer.
4.1 Power and Authority.
(a) Seller has the corporate power and authority to
enter into and perform this Agreement. The execution and delivery
of this Agreement has been duly authorized by all necessary
corporate action by Seller. Upon execution and delivery by both
parties, this Agreement will constitute a valid and binding
obligation of Seller, enforceable in accordance with its terms,
except as enforcement may be limited by federal and state
regulators or by bankruptcy, insolvency, reorganization, moratorium
or other laws of general applicability relating to or affecting
creditors' rights, or the limiting effect of rules of law governing
specific performance, equitable relief and other equitable remedies
or the waiver of rights or remedies.
(b) The performance of this Agreement by Seller will not
violate any provision of the Articles of Association or Bylaws of
Seller.
(c) The performance of this Agreement by Seller will not
violate any applicable law, rule, regulation, or order or any
contract or instrument by which Seller is bound, except for such
violations which alone, or taken in the aggregate, would not
reasonably be expected to have a material adverse effect on the
financial condition, business or operations of the Branches, taken
as a whole, or the consummation of the transactions contemplated by
this Agreement (a "Seller Material Adverse Effect").
4.2 Litigation and Regulatory Proceedings.
There are no actions, complaints, petitions, suits or other
proceedings, or any decree, injunction, judgment, order or ruling,
entered, promulgated or pending or (to Seller's knowledge) threatened
against Seller or any of the Assets or the Liabilities, which alone, or
taken in the aggregate, reasonably would be expected to have a Seller
Material Adverse Effect. No governmental agency has notified Seller that
it would oppose or not approve or consent to the transactions contemplated
by this Agreement and Seller knows of no reason for any such opposition,
disapproval or nonconsent.
4.3 Consents and Approvals.
Except for required regulatory approvals, no consents,
approvals, filings or registrations with any third party or any public
body, agency or authority are required in connection with Seller's
consummation of the transactions contemplated by this Agreement, other
than any required lessor consents to the assignment of the Real Property
Leases and the Equipment Leases and as may be required as a result of any
facts or circumstances relating solely to Buyer.
4.4 Real Property.
(a) Schedule 4.4 contains a list of all the Real Property.
(b) Seller will convey good and marketable title, such
as is insurable by any reputable title insurance company, to the
Real Property, free and clear of all encumbrances, except for
easements and restrictions of record, applicable zoning laws,
building restrictions and all other laws of duly constituted public
authorities, grants of public rights of way, standard exceptions in
the title insurance policy, the rights of landlords under any
ground leases relating to the Real Property, the rights of any
tenants, and liens for taxes and assessments not delinquent.
(c) Seller shall maintain in effect from the date of
this Agreement until the Closing Date, all property, liability,
fire and casualty insurance in effect as of the date hereof with
regard to the Branches, including the structures, leasehold
improvements and Fixed Assets relating to the Branches. In the
event of fire or some other casualty at a Branch which renders the
Branch unfit to conduct the business of banking, Buyer shall have
the right to terminate the Agreement with respect to such Branch.
In the event Buyer elects not to terminate, Seller shall, as soon
as practicable, provide a mobile banking unit to continue the
Branch's business and shall proceed to repair (or rebuild) such
Branch to a condition comparable to the state of the Branch prior
to the casualty.
(d) To the knowledge of Seller, Seller has not received
any written notice of violation, citations, summonses, subpoenas,
compliance orders, directives, suits, other legal process
(including materialman's or construction liens), or other written
notice of potential liability under applicable environmental,
zoning, building, fire and other applicable laws and regulations
relating to the Branches.
(e) To the knowledge of Seller, Seller has received no
written notice of a condemnation proceeding relating to the
Branches.
(f) Except as disclosed on Schedule 4.4(f), there are no
outstanding agreements, options or commitments of any nature
obligating Seller to transfer the Real Property or the Leased
Branches to any other party.
(g) To the knowledge of Seller, Seller has received no
written notice of any existing or pending special assessments
affecting the Real Property, which may be assessed by any
governmental authority, water or sewer authority, drainage district
or any other special taxing district.
4.5 Fixed Assets.
Seller has good and marketable title to the Fixed Assets,
free and clear of all encumbrances, claims, charges, security interests,
or liens, if any, which do not materially detract from the value of or
interfere with the use of the Fixed Assets.
4.6 Ownership of Instant Cash Reserve Loans.
Seller has full power and authority to hold each Instant
Cash Reserve Loan, and has good title to the Instant Cash Reserve Loans
free and clear of all liens, encumbrances, actions, suits, arbitrations,
claims, governmental or other examinations or investigations, hearings,
inquiries or administrative or other proceedings pending with respect to
or affecting the Instant Cash Reserve Loans. Seller is authorized to sell
and assign the Instant Cash Reserve Loans to Buyer and, upon such
assignment, Buyer will have the rights of Seller with respect to the
Instant Cash Reserve Loans in accordance with the terms and conditions
thereof. The applicable documents are genuine and have been duly executed
by the borrower, and the Instant Cash Reserve Loans are valid and comply
with all applicable laws and regulations.
4.7 Validity of and Compliance with Real Property Leases.
The Real Property Leases are valid and existing leases
under which Seller, as lessee, is entitled to possession of the leased
premises. To Seller's knowledge, no event has occurred and is continuing,
which constitutes a default under any of the Real Property Leases.
Subject to Seller obtaining any necessary landlord consents, the
assignment of such leases will transfer to Buyer all of Seller's rights
under the Real Property Leases.
4.8 Compliance with Certain Laws.
The Deposit Accounts and the Instant Cash Reserve Loans
were opened, extended or made, and have been maintained, in accordance
with all applicable federal, state and local laws, regulations, rules and
orders, and the Branches have been operated in compliance with Seller's
policies and procedures and all applicable federal and state and local
laws, regulations, rules and orders, except for such instances of
noncompliance which do not have, and are not reasonably likely to have, a
Seller Material Adverse Effect.
4.9 FDIC Insurance.
The Deposits are insured by the Federal Deposit Insurance
Corporation through the Bank Insurance Fund and the Savings Association
Insurance Fund to the extent permitted by law, and all premiums and
assessments required to be paid in connection therewith have been paid
when due by Seller.
4.10 Organization.
Seller is a national banking association duly organized,
validly existing and in good standing under the laws of the United States.
4.11 Tenants.
Except for the tenants listed on Schedule 4.11, there are
no tenants on the Real Property.
4.12 Untrue Statements.
No representation or warranty by Seller in this Agreement
or any exhibit hereto, and/or any statement, schedule, list or officer's
certificate furnished or to be furnished to Buyer pursuant hereto or in
connection with the transactions contemplated hereby contains or will
contain, as of the date of delivery thereof or as amended or supplemented
at the Closing Date, or the Adjusted Settlement Date, respectively, any
untrue statement of material fact, or omits or will omit to state any
material fact, necessary to make the statements contained herein or
therein not misleading.
V. BUYER'S REPRESENTATIONS AND WARRANTIES
Buyer makes the following representations and warranties to Seller.
5.1 Power and Authority.
(a) Buyer has the corporate power and authority to enter
into and perform this Agreement. The execution and delivery of
this Agreement has been duly authorized by all necessary corporate
action by Buyer. Upon execution and delivery by both parties, this
Agreement will constitute a valid and binding obligation of Buyer,
except as enforcement may be limited by federal and state
regulators or by bankruptcy, insolvency, reorganization, moratorium
or other laws of general applicability relating to or affecting
creditors' rights, or the limiting effect of rules of law governing
specific performance, equitable relief and other equitable remedies
or the waiver of rights or remedies.
(b) The performance of this Agreement by Buyer will not
violate any provision of the Articles of Association, Bylaws or
similar governing documents of Buyer.
(c) The performance of this Agreement by Buyer will not
violate any applicable law, rule, regulation, or order or any
contract or instrument by which Buyer is bound except for such
violations which alone, or taken in the aggregate, would not
reasonably be expected to have a material adverse effect on the
consummation of the transactions contemplated by this Agreement (a
"Buyer Material Adverse Effect").
5.2 Litigation and Regulatory Proceedings.
There are no actions, complaints, petitions, suits or other
proceedings, or any decree, injunction, judgment, order or ruling,
entered, promulgated or pending or (to Buyer's knowledge) threatened
against Buyer or any of its properties or assets which alone, or taken in
the aggregate, reasonably would be expected to have a Buyer Material
Adverse Effect. No governmental agency has notified Buyer that it would
oppose or not approve or consent to the transactions contemplated by this
Agreement, and Buyer knows of no reason for any such opposition,
disapproval or nonconsent.
5.3 Consents and Approvals.
Except for required regulatory approvals, no consents,
approvals, filings or registrations with any third party or any public
body, agency or authority are required in connection with Buyer's
consummation of the transactions contemplated by this Agreement other than
what may be required as a result of any facts or circumstances relating
solely to Seller.
VI. ADDITIONAL AGREEMENTS OF SELLER
6.1 Access to Seller's Premises, Records and Personnel.
(a) Upon execution of this Agreement, Seller shall give
Buyer and its representatives such access to the Branches as Buyer
may reasonably request, provided that Buyer does not unreasonably
interfere with the Branches' business operations. Seller shall not
be required to provide access to or to disclose information where
such access or disclosure might violate or prejudice the rights of
any customer or employee or would be contrary to law, rule,
regulation or any legal or regulatory order or process or any
fiduciary duty or binding agreement entered into prior to the date
of this Agreement.
(b) Anything contained in this Agreement to the contrary
notwithstanding, Seller shall not be required to disclose, or to
cause the disclosure to Buyer or its representatives (or provide
access to any offices, properties, books or records of Seller, that
could result in the disclosure to such Persons or others), of any
tax returns and/or any work papers relating thereto or any other
confidential information relating to income or franchise taxes or
other taxes of Seller, or trade secrets, patent or trademark
applications, or product research and development belonging to or
performed by or for Seller, nor shall Seller be required to permit
or to cause others to permit Buyer or its representatives to copy
or remove from the offices or properties of Seller any documents,
drawings or other materials that might reveal any such confidential
information; provided, however, Buyer shall have access to tax
returns to the extent that liability for the taxes at issue could
be imposed on Buyer.
(c) At Buyer's request, Seller shall authorize and
permit certain of its officers and members of management to engage
in discussions with Buyer for the purposes of discussing the
Branches' business and negotiating and concluding management
employment contracts, employee benefit plans, and new incentive
plans and Buyer shall maintain the confidentiality of any
information furnished by such officers or members of management of
Seller pursuant to such discussions with Buyer, except to the
extent that disclosure is required by applicable law or court
process.
6.2 Matters Relating to Branch Closing.
In the event that Buyer intends to close any of the
Branches on the Closing Date or before ninety (90) days thereafter, Buyer
and Seller agree to the following:
(a) Subject to subsection (b), Seller and Buyer shall
prepare Branch closing notices to Seller's customers, to be mailed
by Seller at Buyer's request and expense, at such time as shall be
mutually agreed upon between Buyer and Seller. Seller and Buyer
also shall prepare another notice to Seller's customers, to be
mailed by Seller at Buyer's request and expense, of Buyer's
impending acquisition of the Branches within ten Business Days
following Seller's receipt of notice that Buyer has obtained any
and all required regulatory approvals for the transactions
contemplated by this Agreement or such earlier date as Seller and
Buyer may mutually agree upon. After Seller mails this notice,
Buyer shall be permitted to provide to Seller material to be sent,
at Buyer's expense, to the depositors, borrowers and other
customers of the Branches concerning the proposed acquisition and
Buyer's products. Each party's communication shall be subject to
the approval of the other party, which approval shall not be
unreasonably withheld.
(b) Unless Buyer shall certify in writing at the time
that (x) Buyer is not aware of the occurrence of any event or
condition, which, if not corrected, would be reasonably expected to
result in the failure of any condition to Closing under Sections
9.3 or 9.4; (y) Buyer has no reason to believe that any regulatory
approval required under Section 9.3(a) will not be forthcoming, and
(z) no challenge has been threatened or filed and is pending with
respect to any such regulatory approval:
(i) Buyer shall not take any action with respect
to any of the Branches which would require that notices be
posted or provided to customers or regulators, as required
by 12 U.S.C. Section 1831r-1, on or prior to the Closing
Date; and
(ii) Seller shall not be required to participate
in the closing of any Branch or in any notice to customers
relating to such a closing.
6.3 Regulatory Approvals.
Seller agrees to use its reasonable best efforts to obtain
promptly any regulatory approval on which its consummation of the
transactions contemplated by this Agreement is conditioned. Seller also
agrees to cooperate with Buyer and take no action which would adversely
affect or delay Buyer's ability to obtain any regulatory approval which
Buyer must obtain before the Closing. Seller shall notify Buyer promptly
of any significant development with respect to any application it files
under this Section. Seller also shall provide Buyer with a copy of any
regulatory approval it receives under this Section, promptly after
Seller's receipt of the same.
6.4 Conduct of Business.
Except as provided in this Agreement or as may otherwise be
agreed upon by Buyer, Seller will continue to carry on the business at the
Branches and maintain the Branches and Fixed Assets in customary repair
until the Closing in the ordinary course of business, consistent with
prudent business practices, including but not limited to, the following:
(a) Seller shall not, without the written consent of
Buyer, pay above market rates on the Deposits, including
participation in any promotions or marketing campaigns offered
generally throughout the Panhandle and North Region of Florida;
(b) Seller shall not specifically encourage or solicit
any Branch customer maintaining a Deposit account at the Branches
in any manner to transfer such account to another branch of Seller
or to any other financial institution (other than Buyer);
(c) Seller shall not terminate the operation of any
Branch, unless those operations cease due to events beyond Seller's
control;
(d) other than in the ordinary course of business,
Seller shall not purchase or dispose of any Assets with an
aggregate value in excess of $1,000 without the prior consent of
Buyer, unless otherwise provided for herein;
(e) Seller shall not, without the prior consent of
Buyer, make any commitments for Branch expenditures of a capital
nature with respect to the Branches;
(f) Seller shall not dispose of any part of the Branches
without the consent of Buyer; and
(g) Seller shall not take any action which would
materially affect Buyer's rights hereunder or the Assets or
Liabilities, except as provided herein.
Seller will notify Buyer of any event of which Seller
obtains knowledge which would make any of Seller's representations under
Article IV of this Agreement false in any material respect.
6.5 Covenant of Seller Not to Solicit.
Seller hereby agrees that from the date of this Agreement
and for a period of one year after the Closing Date,
Seller and its Affiliates shall not specifically target and solicit the
customers of the Branches; provided, however, that nothing in this section
shall: (i) restrict general mass mailings, telemarketing calls, statement
stuffers, advertisements or other similar communications whether in print,
on radio or television, or by other means that are directed to the general
public or to a group of customers who may include customers of the
Branches, provided that such group is defined by criteria other than
solely as customers of the Branches, or (ii) otherwise prevent Seller or
its Affiliates from taking such actions as may be required to comply with
any applicable federal or state laws, rules or regulations or from
servicing or communicating with the then-current customers of Seller or
its Affiliates. Seller shall flag the names of the customers of the
Branches on its Master Customer Information File ("MCIF") system for a
period of one year so that any customer lists drawn from the MCIF shall
exclude the names of such customers.
6.6 Covenant of Seller not to Compete.
Seller hereby agrees not to open a de novo full-service
branch facility (excluding any ATMs) within the county in which each
Branch is located, except, however, with respect to the Keystone Branch,
within the Keystone city limits (the "Noncompete Area") for a period of
one year from the Closing Date; provided, however, that Seller, or its
Affiliates, shall be expressly permitted to acquire a financial
institution notwithstanding the fact that the financial institution to be
acquired has a branch or other facility in the Noncompete Area so long as
a substantial part of the business and assets of such institution are
located outside of the Noncompete Area.
6.7 Solicitation of Loan Customers.
By no later than the Closing Date, Seller shall provide
Buyer with the names of the customers whose Deposit accounts are pledged
as collateral for a loan with Seller for purposes of allowing Buyer to
solicit such loan business away from Seller.
VII. ADDITIONAL AGREEMENTS OF BUYER
7.1 Regulatory Approvals.
Buyer agrees to use its reasonable best efforts to obtain
promptly any regulatory approval on which its consummation of the
transactions contemplated by this Agreement is conditioned. Buyer also
agrees to cooperate with Seller in obtaining any regulatory approval which
Seller must obtain before the Closing. Buyer shall notify Seller promptly
of any significant development with respect to any application it files
under this Section. Buyer also shall provide Seller with a copy
of any regulatory approval it receives under this Section, promptly after
Buyer's receipt of the same.
7.2 Change of Name, Etc.
Immediately after the Closing, Buyer will (a) change the
name and logo on all documents and facilities relating to the Assets and
the Liabilities to Buyer's name and logo, (b) notify all persons whose
Instant Cash Reserve Loans or Deposits are transferred under this
Agreement of the consummation of the transactions contemplated by this
Agreement, and (c) provide all appropriate notices to the Federal Deposit
Insurance Corporation and any other regulatory authorities required as a
result of the consummation of such transactions. Buyer agrees not to use
any forms or other documents bearing Seller's name or logo after the
Closing without the prior written consent of Seller, and, if such consent
is given, Buyer agrees that all such forms or other documents to which
such consent relates will be stamped or otherwise marked in such a way
that identifies Buyer as the party using the form or other document. As
soon as practicable and, in any event, within seven calendar days after
the Closing Date, Buyer will issue new checks reflecting its transit and
routing number to customers of the Branches with check writing privileges.
Buyer shall use its best efforts to encourage these customers to begin
using such checks and cease using checks bearing Seller's name.
7.3 Real Property.
(a) Except as expressly set forth herein, Buyer hereby
acknowledges and agrees that: (i) Buyer is expressly purchasing the
Real Property in its existing condition "AS IS, WHERE IS, AND WITH
ALL FAULTS" with respect to any facts, circumstances, conditions
and defects; (ii) Seller has no obligation to repair or correct any
such facts, circumstances, conditions or defects or to compensate
Buyer for same; (iii) Seller has specifically bargained for the
assumption by Buyer of all responsibility to inspect and
investigate the Real Property and of all risk of adverse
conditions; and (iv) Buyer has or will have prior to the Closing
undertaken all such physical inspections and examinations of the
Real Property, and the title thereto, as Buyer deems necessary or
appropriate as to the condition of the Real Property. Except as
expressly set forth herein, Buyer acknowledges that Seller has made
no representations or warranties and shall have no liability to
Buyer (and Buyer hereby waives any right to recourse against
Seller) with respect to the conditions of the soil, the existence
or nonexistence of hazardous substances, any past use of the Real
Property, the economic feasibility of the Real Property, or the
Real Property's compliance or noncompliance with all laws, rules or
regulations affecting the Real Property.
(b) Buyer may, at Buyer's option, within forty-five (45)
days from the date of this Agreement, undertake such physical
inspections and examinations of the Real Property and the Leased
Real Property, and the legal title thereto, including such
inspections of the buildings thereon, as Buyer deems necessary or
appropriate. The cost of any such inspections and examinations
shall be responsibility of Buyer.
(i) If Buyer shall discover a Material Defect,
as defined herein, as a result of Buyer's inspections and
examinations, Buyer shall give Seller written notice as
soon as possible describing the facts or conditions
constituting such Material Defect and the measures which
Buyer reasonably believes are necessary to correct such
Material Defect. Seller shall notify Buyer within five (5)
business days after receipt of such written notice whether
Seller elects to cure such Material Defect or terminate the
Agreement with respect to such Branch, unless Buyer elects
to waive such Material Defect. If Seller elects to cure,
then Seller shall have thirty (30) days from the date of
the receipt of Buyer's notice, or such later time, which
shall not be later than the Closing Date, as shall be
mutually agreeable to the parties, in which to cure such
Material Defect to Buyer's reasonable satisfaction and
Seller's reasonable cure shall be a condition to Buyer's
obligation to purchase the Assets and assume the
Liabilities with respect to such Branch under this
Agreement. If Seller does not elect to cure a Material
Defect, Buyer may terminate this Agreement with respect to
the affected Branch(es). "Material Defect" shall mean the
existence of (x) a lien, encumbrance, survey, land use or
other title defect on the legal title to the Real Property,
except as previously disclosed in writing to Buyer by
Seller, (y) any presence, discharge, disposal, release,
threatened release or emission of any Hazardous Material in
the ground or the structure of the Branch or the existence
of any underground storage tank for which the Buyer has
been advised in writing by its legal counsel that Buyer
could become responsible for the assessment, removal or
remediation of such discharge, disposal, release,
threatened release, emission, the existence of such tank or
for other corrective action, (z) with respect to the
buildings, material deficiencies in the plumbing,
electrical, HVAC, drive thru air transport system, roof,
walls, or foundations. Provided, however, that in addition
to satisfying the criteria described in the preceding
sentence, the cost to cure such condition shall be more
than $10,000 individually, or more than $25,000 in the
aggregate (per Branch), based on a reasonable good faith
estimate from a reliable third party.
(ii) In addition, written notice of a condemnation
proceeding, which would materially detract from the ability
of a Branch to conduct the business of banking consistent
with its past practices, shall constitute a Material
Defect.
(iii) With regard to the Leased Branches, Buyer and
Seller understand that conducting the inspections and
affecting the cure of a Material Defect, if any, may
require the action or the consent of the lessor. In the
event that the lessor elects not to undertake such action
or give such consent relating to the cure of a Material
Defect, then Buyer may terminate the Agreement with respect
to such Branch.
(c) In connection with Buyer's inspections and
examinations of the Real Property and the Leased Branches, Seller
shall, to the extent of Seller's access, within fifteen (15) days
of the date of this Agreement, provide Buyer with copies of all
assessments (including Phase I and Phase II reports), audits,
correspondence, notices, letters, determinations, plans and other
documents relating to the discharge, or the potential discharge,
remediation or cleanup of a Hazardous Material on Real Property or
the Leased Branches; provided, however, that such copies shall be
provided for informational purposes only and Seller makes no
representations or warranties with respect to the contents thereof.
(d) No information or the contents of any environmental
audits, nor the results of any investigation of the Real Property
conducted pursuant to this section, including, but not limited to,
the contents of the report issued in connection therewith, shall be
disclosed by Buyer or its agents, consultants or employees to any
third party without Seller's prior written approval, unless and
until Buyer is legally compelled to make such disclosure under
applicable laws or until Buyer completes its purchase of the Real
Property pursuant to this Agreement. Notwithstanding the
foregoing, Buyer may disclose such matters to its directors,
executive officers, legal counsel and such employees or agents who
are reasonably required to receive such disclosure (such parties
being referred to as "Buyer" for purposes of this section), the
specific identities of whom shall be supplied to Seller prior to
any permitted disclosure to such party by Buyer. If this Agreement
is terminated for any reason, Buyer shall immediately deliver
and/or return to Seller any and all documents, plans and other
items furnished to Buyer pursuant to this section.
(e) Seller is entitled to a final, original copy of
Buyer's Phase I Environmental Assessment Report prepared pursuant
to this section provided that Seller first pays for one-half of all
costs related to its preparation.
VIII. SELLER'S EMPLOYEES
8.1 Transferred Employees.
(a) Without the prior consent of Buyer, Seller shall
make no changes in the personnel employed at the Branches other
than terminations for cause or replacement of departed personnel.
(b) Buyer will offer to employ all of Seller's employees
who are employed at the Branches on the Closing Date. From and
after the Closing Date, Buyer shall provide the employees of Seller
who are offered employment with Buyer, and who accept such
employment with a salary or hourly wage comparable to that earned
by them at the time of the Closing. (Such employees who become
employees of Buyer after the Closing shall be referred to as
"Transferred Employees.")
(c) Seller is responsible for the filing of Forms W-2
with the Internal Revenue Service and any required filing with
state tax authorities, with respect to wages and benefits paid to
each Transferred Employee for periods ending on or prior to the
Closing Date.
(d) Without the prior consent of Buyer, Seller shall not
materially increase the wages, salary, bonuses, or other
compensation of the Branch employees; provided, however, that (i)
increases in compensation in the ordinary course of business
consistent with Seller's past practices shall be permitted, and
(ii) the Branch employees shall be permitted to participate in
special promotions or incentives, which are temporary in nature and
which shall be disclosed to Buyer in advance on a confidential
basis, offered in the region where the Branches are located.
(e) For a period of one year following the Closing Date,
Seller shall not specifically target and solicit the Transferred
Employees for employment with Seller; provided, however, that (i)
Transferred Employees may voluntarily seek employment with Seller,
and (ii) Transferred Employees who are terminated involuntarily by
the Buyer shall be permitted to seek employment with Seller.
8.2 Employee Benefits.
(a) (i) Following the Closing, Buyer shall
not have any liability or obligation under any Benefit
Plans or any other program or arrangement of Seller or an
ERISA Affiliate thereof under which any current or former
employee of Seller or any of its Affiliates has any right
to any benefits;
(ii) Upon the Closing, the participation of
Transferred Employees in the Benefit Plans shall cease in
accordance with the terms of such plans; and
(iii)With respect to the Transferred Employees,
Seller shall be responsible for any welfare benefits or
claims which, by reason of events which take place on or
prior to the Closing Date, become payable under the terms
of any Welfare Benefit Plan. With respect to Transferred
Employees, Buyer shall be responsible for any welfare
benefits or claims which become payable by reason of events
that take place after the Closing Date.
(b) (i) For the six-month period following
the Closing Date, Buyer shall grant severance pay and
benefits to the Transferred Employees that are at least
equal to such pay and benefits available under Seller's
severance policy as in effect on the Closing Date;
provided, however, that Buyer shall not pay severance pay
or benefits to any Transferred Employee who is terminated
for cause during such six-month period;
(ii) From and after the Closing Date,
Buyer shall provide the Transferred Employees with the
employee benefits, if any, provided to employees of Buyer
and its Affiliates, subject to the terms of Buyer's benefit
plans;
(iii)Buyer will grant for purposes of vacation
benefits, severance pay and all welfare benefit plans (as
defined in ERISA) past service credit to all Transferred
Employees for periods of time credited to such Transferred
Employees under the Welfare Benefit Plans. To the extent
that any Transferred Employee has satisfied in whole or in
part any annual deductible under a Welfare Benefit Plan, or
has paid any out-of-pocket expenses pursuant to any Welfare
Benefit Plan co-insurance provision, such amount shall be
counted toward the satisfaction of any applicable
deductible or out-of-pocket expense maximum, respectively,
under the benefit plans and programs provided to
Transferred Employees by Buyer, and such plans and programs
shall be applied without regard to any limitations relating
to preexisting conditions or required physical examinations
that would not otherwise apply under the respective Welfare
Benefit Plans to the extent that such Transferred Employees
are covered by the Welfare Benefit Plans on the Closing
Date;
(iv) Buyer shall take whatever action is
necessary, including amendment of its defined contribution
pension plan, to grant to each Transferred Employee past
service credit for all purposes (including any waiting
period) under Buyer's defined contribution pension plan for
all periods of service credited to each such Transferred
Employee under the Seller's defined contribution pension
plan. Within 45 days after the Closing Date, Seller shall
provide to Buyer such information as Buyer reasonably
requires to establish the service for the Transferred
Employees credited under the Seller's defined contribution
pension plan;
(v) If applicable, Buyer agrees to permit and
shall modify its existing defined 401-K plan to the extent
necessary to permit a trustee-to-trustee transfer from
Seller's 401(k) plan of the vested account balances of
participants in that plan who become employees of Buyer.
Seller will cause the vested account balances of
participants in Seller's 401(k) plan who become employees
of Buyer to be transferred to Buyer's 401(k) plan in a
trustee-to-trustee transfer; and
(vi) Buyer shall take whatever action is
necessary, including amendment of its defined benefit
pension plan, to grant to each Transferred Employee past
service credit for service which has been granted under
Seller's defined benefit pension plan, for all purposes,
other than benefit accrual, under Buyer's defined benefit
pension plan.
8.3 Training.
Seller shall permit Buyer to train the Transferred
Employees before Closing with regard to Buyer's operations, policies and
procedures at Buyer's sole cost and expense. To the extent reasonable,
this training shall take place outside of business hours and may, if
agreed to by Buyer and Seller, take place at the Branches.
IX. CLOSING AND CONDITIONS TO CLOSING
9.1 Time and Place of Closing.
The Closing shall be on a date mutually agreed upon by the
parties (the "Closing Date") which shall be on a Friday and shall be no
more than 30 days after the last regulatory approval necessary for the
Closing has been obtained (without regard to any statutory waiting periods
following such approval). The Closing shall take place at Seller's
offices located at One First Union Center, Charlotte, North Carolina, at
10:00 a.m. on the Closing Date, or at a time and place otherwise
determined by mutual agreement of the parties.
9.2 Exchange of Closing Documents.
The parties shall exchange drafts of all documents to be
delivered at the Closing (other than the Closing Statement) at least ten
Business Days prior to the Closing Date.
9.3 Buyer's Conditions to Closing.
Buyer's obligations to purchase the Assets and assume the
Liabilities is contingent upon and subject to the fulfillment of the
following conditions in all material respects:
(a) the parties obtaining all regulatory approvals which
are required in order for them to proceed with the transactions
contemplated by this Agreement and the expiration of any required
waiting period without the commencement of adverse proceedings by
any governmental authority with jurisdiction over the transactions
contemplated by this Agreement (No required regulatory approval
shall be conditioned or restricted (including, without limitation,
any requirement for Buyer to raise additional capital) in a manner
which would so materially adversely affect the economic or business
benefits of the transactions contemplated by this Agreement that,
had such condition or requirement been known, such party would not,
in its reasonable judgment, have entered into this Agreement.);
(b) each representation and warranty of Seller in this
Agreement being true and correct in all material respects (but
without duplication of any standard of materiality set forth in any
such representation or warranty) as of the Closing Date and all
covenants and conditions of Seller to be performed or met by Seller
on or before the Closing Date having been performed or met in all
material respects (but without duplication of any standard of
materiality set forth in any such representation or warranty);
(c) Seller's delivery to Buyer of the following
documents in form and substance reasonably satisfactory to Buyer:
(i) special warranty deeds conveying the Real
Property;
(ii) bills of sale, assignments and other
instruments of transfer sufficient to convey to Buyer all
of Seller's right, title, and interest in and to the
remaining Assets;
(iii)a certificate executed by an appropriate
officer of Seller attesting, to the officer's best
knowledge, to Seller's compliance with the conditions set
forth in Section 9.3(b);
(iv) estoppel certificates executed by the
lessors of the Leased Branches;
(v) sublease agreements with respect to the
Leased Branches where the lease is not assigned to Buyer;
(vi) FIRPTA Affidavit complying with the
requirements of Section 1445 of the Internal Revenue Code
of 1986, as amended; and
(d) Buyer's agreement to receive the Closing Statement
and the Settlement Payment as provided in Section 3.2;
(e) Such other documents necessary to effect the
transactions contemplated hereby as Buyer shall reasonably request;
and
(f) Possession of the Branches and the Fixed Assets.
9.4 Seller's Conditions to Closing.
Seller's obligation to sell the Assets and transfer the
Liabilities to Buyer is contingent upon and subject to the fulfillment of
the following conditions in all material respects:
(a) the parties obtaining all regulatory approvals which
are required in order for them to proceed with the transactions
contemplated by this Agreement and the expiration of any required
waiting period without the commencement of adverse proceedings by
any governmental authority with jurisdiction over the transactions
contemplated by this Agreement (No required regulatory approval
shall be conditioned or restricted in a manner which would so
materially adversely affect the economic or business benefits of
the transactions contemplated by this Agreement that, had such
condition or requirement been known, such party would not, in its
reasonable judgment, have entered into this Agreement.);
(b) each representation and warranty of Buyer in this
Agreement being true and correct in all material respects (but
without duplication of any standard of materiality set forth in any
such representation or warranty) as of the Closing Date and all
covenants and conditions of Buyer to be performed or met by Buyer
on or before the Closing Date having been performed or met in all
material respects (but without duplication of any standard of
materiality set forth in any such representation or warranty);
(c) Buyer's delivery to Seller of the following
documents in form and substance reasonably satisfactory to Seller:
(i) one or more executed assumptions of the Real
Property Leases;
(ii) one or more executed instruments assuming
the remaining Liabilities; and
(iii)a certificate executed by an appropriate
officer of Buyer attesting, to the officer's best
knowledge, to Buyer's compliance with the conditions set
forth in Section 9.4(b); and
(d) Such other documents necessary to effect the transactions
contemplated hereby as Seller shall reasonably request.
9.5 Survival of Representations and Warranties.
Unless provided otherwise in this Agreement, Buyer's and
Seller's representations and warranties under this Agreement or contained
in any certificate or instrument delivered by either party at the Closing
shall survive for a period of two years following the Closing Date.
X. TERMINATION
10.1 Termination by Either Party.
Either party may terminate this Agreement upon written
notice to the other if:
(a) as a result of any breach of any representation,
warranty or covenant, the party terminating this Agreement has
given the other party written notice of such breach and such breach
is not cured within 30 days thereafter;
(b) the Closing does not occur on or before December 31,
1998, unless the parties mutually agree in writing to extend such
date; or
(c) the other party so agrees in writing.
The termination of this Agreement under subsection (a)
shall not absolve the breaching party from any liability to the other
party arising out of its breach of this Agreement.
XI. MISCELLANEOUS
11.1 Continuing Cooperation.
(a) On and after the Closing Date, Seller agrees to
execute, acknowledge and deliver such documents and instruments as
Buyer may reasonably request to vest in Buyer the full legal and
equitable title to the Assets and Liabilities.
(b) On and after the Closing Date, Buyer shall execute,
acknowledge and deliver such documents and instruments as Seller
may reasonably request to relieve and discharge Seller from its
obligations with respect to the Liabilities.
(c) Seller and Buyer shall cooperate with each other in
connection with any examination conducted by any tax authority
subsequent to the Closing Date by promptly providing upon request
information relating to the tax liability of any business operated
by Seller or Buyer with respect to the Branches and promptly
informing the other of the institution of, any material
developments concerning, and the outcome of, the same.
(d) Except as provided in Section 7.2, no interest in or
right to use First Union National Bank's logo or the name "First
Union" or any other similar word, name, symbol or device in which
Seller has any interest by itself or in combination with any other
word, name, symbol or device, or any similar variation of any of
the foregoing (collectively, the "Retained Names and Marks") is
being transferred to Buyer pursuant to the transactions
contemplated hereby. Unless permitted pursuant to Section 7.2,
Buyer shall not after the Closing Date in any way knowingly use any
materials or property, whether or not in existence on the Closing
Date, that bear any Retained Name or Mark. Buyer agrees that
Seller shall have no responsibility for claims by third parties
arising out of, or relating to, the use by the Buyer of any
Retained Name or Mark after the Closing Date, and Buyer agrees to
indemnify and hold harmless Seller from any and all claims (and all
expenses, including reasonable attorneys' fees and disbursements
incurred in connection with any such claim) that may arise out of
the use thereof by Buyer.
11.2 Merger and Amendment.
This Agreement sets out the complete agreement of the
parties with respect to the matters discussed in this Agreement, and it
supersedes all prior agreements between the parties, whether written or
oral, which apply to these matters. No provision of this Agreement may be
changed or waived except as expressly stated in a document executed by
both parties.
11.3 Dispute Resolution.
(a) Neither Seller nor Buyer shall assert any claim
arising out of or relating to this Agreement (except with respect
to claims to be handled under the Working Agreement or submitted to
the Mediator under Section 3.2(c)), unless:
(i) except for claims arising under or in
respect of Sections 2.4, 2.5 or 11.1(d), the amount in
dispute with respect to any claim exceeds $5,000.00;
(ii) except for claims arising in respect of
Sections 2.4, 2.5 or 11.1(d), the aggregate amount of all
claims by Buyer or Seller (as the case may be) which
satisfy the preceding clause exceeds $25,000.00, in which
case a claim may be asserted only to the extent that such
threshold has been exceeded;
(iii)except for claims arising under Sections 2.4,
2.5, or 11.1(d), the aggregate amount of all claims by
Buyer or Seller (as the case may be) shall not exceed the
Amount of Premium; and
(iv) except for claims arising under Sections
2.4, 2.5 or 11.1(d), the notification required by Section
11.3(b) (if any) is given on or before the second
anniversary of the Closing Date.
(b) The parties shall attempt in good faith to resolve
any dispute arising out of or relating to this Agreement promptly
by negotiations, as provided in this subsection (b). Either party
may give the other party written notice of any dispute not resolved
in the normal course of business. Executives of both parties at
comparable levels at least one step above the personnel who have
previously been involved in the dispute shall meet at a mutually
acceptable time and place within ten days after delivery of such
notice, and thereafter as often as they reasonably deem necessary,
to exchange relevant information and to attempt to resolve the
dispute. If the matter has not been resolved by these persons
within 30 days of the disputing party's notice, or if the parties
fail to meet within ten days, the dispute shall be referred to more
senior executives of both parties who have authority to settle the
dispute and who shall likewise meet to attempt to resolve the
dispute. All negotiations under this subsection (b) are
confidential and shall be treated as compromise and settlement
negotiations for purposes of the Federal Rules of Evidence,
applicable state rules of evidence, and common law. The procedures
set forth above will be followed in advance of litigation of any
dispute between the parties; nevertheless, either party may seek a
preliminary injunction or other provisional judicial relief if in
its judgment such an action is necessary to avoid irreparable
damage or to preserve the status quo. Despite any such action, the
parties will continue to participate in good faith in the
procedures set forth in this subsection (b).
(c) Neither party shall have any liability for lost
profits or punitive damages with respect to any claim arising out
of or relating to this Agreement. The sole recourse and remedy of
a party hereto for breach of this Agreement by the other party
hereto shall be against such other party and its assets, and no
officer, director, employee, stockholder or affiliate of any party
shall be liable at law or in equity for the breach by such party of
any of its obligations under this Agreement.
11.4 Indemnification.
After the Closing Date, and unless otherwise provided in
the Agreement:
(a) Buyer shall indemnify and hold Seller harmless from
and against all claims, lawsuits, costs (including reasonable
counsel fees) and liabilities which arise out of or relate to
transactions or operations at the Branches after the Closing Date,
and from any loss or damage resulting from any breach by Buyer of
any representation, warranty or covenant of Buyer contained in this
Agreement.
(b) Seller shall indemnify and hold Buyer harmless from
and against all claims, lawsuits, costs (including reasonable
counsel fees) and liabilities which arise out of or relate to
transactions or operations at the Branches on or before the Closing
Date, and from any loss or damage resulting from any breach by
Seller of any representation, warranty or covenant of Seller
contained in this Agreement.
(c) Promptly after receipt by either party of notice of
the assertion of any claim or the commencement of any action, suit
or proceeding with respect to this Agreement, such party
("Indemnified Party") shall give written notice thereof to the
other party ("Indemnitor") and will thereafter keep the Indemnitor
reasonably informed with respect thereto, provided that failure of
the Indemnified Party to give the Indemnitor prompt notice as
provided herein shall not relieve the Indemnitor of its obligations
hereunder except to the extent, if any, it shall have been
prejudiced thereby. In case any such action suit or proceeding is
brought against an Indemnified Party, the Indemnitor shall be
entitled to participate in (and, in its discretion, to assume) the
defense thereof with counsel reasonably satisfactory to the
Indemnified Party, provided, however, that the Indemnified Party
shall be entitled to participate in any such action, suit or
proceeding with counsel of its own choice at the expense of the
Indemnitor if, in the good faith written opinion of the Indemnified
Party's counsel, representation by the Indemnitor's counsel may
present a conflict of interest or that there may be defenses
available to the Indemnified Party which are different from or in
addition to those available to the Indemnitor. The Indemnitor will
not settle any claim, action, suit or proceeding which would give
rise to the Indemnitor's liability under its indemnity unless such
settlement includes as an unconditional term thereof the giving by
the claimant or plaintiff of a release of the Indemnified Party, in
form and substance reasonably satisfactory to the Indemnified Party
and its counsel, from all liability with respect to such claim,
action, suit or proceeding. If the Indemnitor assumes the defense
of any claim, action, suit or proceeding as provided in this
Section, the Indemnified Party shall be permitted to join in the
defense thereof with counsel of its own selection and at its own
expense (except as otherwise provided above). If the Indemnitor
shall not assume the defense of any claim, action, suit or
proceeding, the Indemnified Party may defend against such claim,
action, suit or proceeding in such manner as it may deem
appropriate, provided that an Indemnified Party shall not settle
any claim, action, suit or proceeding which would give rise to the
Indemnitor's liability under its indemnity without the prior
written consent of the Indemnitor, which consent shall not be
unreasonably withheld or delayed.
(d) Any claims for indemnification brought under this
Section shall be subject to the provisions of Section 11.3.
11.5 Counterparts.
This Agreement may be executed in any number of
counterparts, each of which will constitute an original, but all of which
taken together shall constitute one and the same instrument.
11.6 Exhibits and Schedules.
All exhibits and schedules referred to in this Agreement
shall constitute a part of this Agreement.
11.7 Assignment.
This Agreement is not assignable by either party without
the written consent of the other party, which shall not be unreasonably
withheld.
11.8 Headings.
The headings contained in this Agreement are inserted for
convenience only and shall not affect the meaning of this Agreement or any
of its provisions.
11.9 Notices.
Any notice under this Agreement shall be made in writing
and shall be deemed given when delivered in person, when delivered by
first class mail postage prepaid (in which case the notice shall be deemed
given on the third Business Day following the date on which the notice is
postmarked), or when delivered by facsimile transmission, which
transmission also shall be sent by first class mail, postage prepaid
before the second Business Day following the transmission (in which case
the notice shall be deemed given on the day transmitted if transmitted
before or during normal business hours or, otherwise, on the next
succeeding Business Day) to the parties at the respective addresses set
forth below or at such other addresses as each party shall inform the
other in writing.
If to Seller to: Sid Newberg
Senior Vice President
First Union National Bank
214 N. Hogan Street
3rd Floor
Jacksonville, Florida 32202
with a copy to: Keith D. Lembo, Esq.
Senior Vice President
and Deputy General Counsel
First Union Corporation
One First Union Center, Leg-0630,
31st Floor
Charlotte, North Carolina 28288-0603
If to Buyer to: J. Kimbrough Davis
Senior Vice President
Capital City Bank
217 North Monroe Street
Tallahassee, Florida 32301-7690
with a copy to: Michael V. Mitrione, Esq.
Gunster, Yoakley
Phillips Point
Suite 500 East
777 S. Flagler Drive
West Palm Beach, Florida 33401-6194
11.10 Expenses.
Unless specifically stated to the contrary in this
Agreement, each party will assume and pay for the expenses it incurs with
respect to the purchase and sale of the Assets and assumption of the
Liabilities under this Agreement; provided, however, that Buyer shall pay
all fees and expenses associated with the regulatory application process.
11.11 Public Announcements.
Each party shall consult with the other before making any
announcement or other public communication with respect to the
transactions contemplated by this Agreement and shall furnish a copy of
the text to the other party of the announcement or other communication.
11.12 Governing Law; Jurisdiction.
This Agreement and the legal relations between the parties
shall be governed by and construed in accordance with the laws of the
State of Florida applicable to contracts made and to be performed entirely
within the State of Florida.
11.13 No Third Party Beneficiaries.
The parties intend that this Agreement shall not benefit or
create any right or cause of action in or on behalf of any Person other
than Seller and Buyer.
11.14 Brokers and Finders.
(a) Buyer hereby represents and warrants to Seller that
it has not employed or agreed to retain any broker or finder in connection
with the transactions contemplated by this Agreement, and Buyer agrees to
indemnify Seller against any claim arising out of any such employment of
ar agreement to retain any such broker or finder by Buyer.
(b) Seller hereby represents and warrants to Buyer that
it has not employed or agreed to retain any broker or finder in connection
with the transactions contemplated by this Agreement, and Seller agrees to
indemnify Buyer against any claim arising out of any such employment of or
agreement to retain any such broker or finder by Seller.
11.15 Enforcement Costs.
If any civil action, arbitration or other legal proceeding
is brought for the enforcement of this Agreement, or because of an alleged
dispute, breach, default or misrepresentation in connection with any
provision of this Agreement, the successful or prevailing party shall be
entitled to recover reasonable attorneys' fees, court costs and all
expenses even if not taxable as court costs (including, without
limitation, all such fees, taxes, costs and expenses incident to
arbitration, appellate, bankruptcy and post-judgment proceedings),
incurred in that civil action, arbitration or legal proceeding, in
addition to any other relief to which such party or parties may be
entitled. Attorneys' fees shall include, without limitation, paralegal
fees, investigative fees, administrative costs, sales and use taxes and
all other charges billed by the attorney to the prevailing party.
11.16 Specific Performance.
Each of the parties acknowledges that the parties will be
irreparably damaged (and damages at law would be an inadequate remedy) if
this Agreement is not performed in accordance with its specific terms.
Therefore, in the event of a breach or threatened breach by any party of
any provision of this Agreement, then the other parties shall be entitled,
in addition to all other rights or remedies, to an injunction restraining
such breach, without being required to show any actual damage or to post
an injunction bond, and/or to a decree for specific performance of the
provisions of this Agreement.
IN WITNESS WHEREOF, each of the parties to this Agreement has
caused this Agreement to be executed by a duly authorized officer as of
the date written on page one of this Agreement.
CAPITAL CITY BANK
By: /s/ William G. Smith, Jr.
Its: Chairman
FIRST UNION NATIONAL BANK
By:/s/ Sid Newberg
Its: Senior Vice President
EXHIBIT A
CLOSING DOCUMENTS
EXHIBIT B
FORM OF CLOSING STATEMENT
Amount of Liabilities Settlement Amount
Principal Amount of Deposits ___________________________
Accrued Interest ___________________________
(Less) Value of Assets
and Amount of Premium
Real Property* (_________________________)
Fixed Assets* (_________________________)
Cash on Hand (_________________________)
Instant Cash Reserve Loans* (_________________________)
Overdrafts* (_________________________)
Amount of Premium* (_________________________)
(Less) Plus Taxes* (_________________________)
(Less) Plus Prorated Tax and
Expense Items* (_________________________)
Payment Amount ___________________________
*See Attached Schedules for Calculations
EXHIBIT C
FORM OF ADJUSTED CLOSING STATEMENT
Settlement Adjusted
Amount of Liabilities Amount Amount
Principal Amount of Deposits ___________ ___________
Accrued Interest ___________ ___________
___________ ___________
(Less) Value of Assets
and Amount of Premium
Real Property* (__________) (__________)
Fixed Assets* (__________) (__________)
Cash on Hand (__________) (__________)
Instant Cash Reserve Loans* (__________) (__________)
Overdrafts* (__________) (__________)
Amount of Premium* (__________) (__________)
(Less) Plus Taxes* (__________) (__________)
(Less) Plus Prorated Tax and
Expense Items* (__________) (__________)
Adjustment Payment __________ __________
Settlement Payment Amount ----- __________
Increase (Decrease) from
Settlement Payment Amount ----- __________
Payment of Training Expenses ----- __________
Total Increase (Decrease)
and Reimbursement ----- __________
Interest ----- __________
Amount Due from Seller (Buyer)
(Total Adjustment Payment) ----- __________
*See Attached Schedules for Calculations
EXHIBIT D
WORKING AGREEMENT
FIRST UNION NATIONAL BANK (FUNB)
(Seller)
and
CAPITAL CITY BANK (CCB)
(Buyer)
Acceptance: (Purchaser)
/s/ Mitchell R. Englert Date: 11/9/98
First Union National Bank
/s/ Sid Newberg Date: 11/5/98
GENERAL
Resolution
Date
1. The target date and time for the Closing is Friday at 4:00 p.m. on
December 4, 1998.
2. The Branches will close at 4:00 p.m. on the Closing Date and
not reopen until the following Business Day.
3. Deposit interest will be accrued through the Sunday
following the Closing Date.
4. Accounting for the Assets and Liabilities will be as of
12:01 a.m., on the Saturday following the Closing Date.
5. All post-Closing ACH and paper debits and credits
received by Seller will be forwarded to Buyer for a
period of 90 days following the Closing Date, then
evaluated monthly. These items will be returned to the
originator on or before 90 days after the Closing Date.
Any extension request for processing of ACH or
Servicenter items after 90 days must be received in
writing and agreed to by the Seller no later than two
weeks prior to the 90-day deadline.
6. File layouts and two sets of test files will be provided
to Buyer by Seller for each application not less than 30 days
prior to the Closing Date.
7. Seller will forward wire transfer items to Buyer for a
period of 30 days after the Closing Date. After
expiration of this period, items will be returned to the
originators.
8. The transfer of personnel file contents will be
determined by Seller's Personnel Division.
9. There will be dual (Seller and Buyer) physical inventory
of the Fixed Assets to verify the Fixed Assets to be sold
not less than 30 days prior to the Closing Date.
10. Buyer and Seller agree to jointly review and approve all
customer communication to be sent prior to
the Closing Date providing at least two to three days
lead time.
11. Seller will provide Buyer with information for any
material changes being made to any product or services
prior to the Closing Date affecting the Assets or
Liabilities.
FINANCIAL SETTLEMENT
Resolution
Date
ONE-TIME:
1. Buyer will pay property taxes and prorate to Seller as of
the Closing Date.
2. Teller working cash, vault cash and ATM cash where applicable,
will be included in the Assets to be sold.
3. Seller will create an Instant Cash Reserve (ICR) list
for accounts which have advances on the system on the
Saturday following the Closing Date.
4.Consumer loans made during the two weeks prior to the
Closing Date will not be booked to Seller's system but
will be delivered to the Buyer to be booked on Buyer's system,
provided regulatory has been received. Special settlement may
be required for these loans.
N/A 5. Commercial loans made during the _______ prior to the
Closing Date, will not be booked to Seller's system but
will be held to be booked on Buyer's system. Special
settlement will be required for these loans.
ONGOING:
1. Seller will establish a single day settlement with Buyer
for all post-Closing monetary transaction activity to
Liability accounts. This settlement will be via a
separate wire until activity slows.
2. Loan payments received by Seller after Closing Date
will be sent settled through settlement account.
BRANCHES
Resolution
Date
1. Generally, training by Buyer will be conducted during
non-banking hours with time to be recorded by affected
employees and billed to Buyer. Out-of-pocket expenses
(meals, mileage) will be paid directly by Buyer. Seller
will not unreasonably deny Buyer the opportunity for
training during banking hours when such training will not
interfere with Seller's ability to conduct its business.
Training times and schedule will be coordinated with
Cindy Boatright, Operations Coordinator before contact with branch
personnel.
2. Buyer will have Seller's cooperation in installing any
needed training terminals prior to the Closing Date.
(Provided the Branch facilities have sufficient excess
space.)
3. New telephone numbers cannot be activated until the first business day
following the Closing Date. Telephone numbers will be
transferred to Buyer.
4. Seller's consignment items will be removed on the
Closing Date, with bulk supplies inventoried and removed as early
as practicable prior to Closing Date. Buyer's consignment items
and supplies can be delivered up to one week prior to the Closing Date.
(Provided there is joint agreement on space to accommodate the
shipment.)
5. Buyer will work with Seller to accommodate removal of
branch automation (PCs), terminals and telecommunication
equipment not purchased, with said equipment to be
removed following 4:00 p.m. on the Closing Date.
6. Seller's telecommunication lines will be switched on
Friday evening or Saturday following the Closing
dependent on local phone service availability.
7. Buyer may have a total of 1 or more individuals in the Branches
on the Closing Date to observe the close-out and sign for
any transferred items (e.g., cash, keys).
8. Seller will remove all cash items from the Branches on
the Closing Date, except those that are to be picked up
by customers. "Pick-up" cash items will be included in
the Assets to be sold and treated as cash. Buyer's
representative will be available to review any such items
the prior Wednesday through the Closing Date. Cash items
are defined as any item for which the customer is to
provide cash funds to replace.
BRANCHES (Continued)
Resolution
Date
9. Any ATMs will be included in the Assets to be sold. A list of
those specific ATMs will be provided to the Buyer.
N/A 10.Buyer will assume Seller's Post Office boxes. After the
Closing, Seller's mail will be forwarded by Buyer to a
location designated by Seller.
11.There will be joint notification of the Closing by
Seller and Buyer to all vendors (e.g., water,
electricity, business licences, etc.).
N/A 12.Non-negotiable collateral will be reviewed by Buyer at
Seller's central location in Roanoke, not in each Branch.
N/A 13.Negotiable collateral will be reviewed at the Branches.
14. Branch signage will not change until after the Closing.
Buyer may "bag" the branch signs after 4:00 p.m. on the closing day if
a permanent sign cannot be installed on the closing day.
DDA/SAVINGS
Resolution
Date
1. DDA/savings accounts with a zero balance and accounts
closed in the last month prior to Closing will be
included in the Liabilities.
2. Dormant accounts will be included in the Liabilities.
Buyer will be responsible for escheat processing unless
Seller has already completed the process for the current year.
3. Seller will report actual interest withholding amounts
and interest paid by Seller through the Closing Date for
1099 purposes for both active and closed accounts.
4. Seller will limit check reorders and new account check
quantities prior to the Closing Date. (See CHECK ORDERS)
5. Buyer will be responsible for W-9/W-8 mailings following the
Closing Date. Seller has satisfied the mailing requirements
for 1998.
6. Service charges:
a. Seller will not service charge a maintenance or activity fee
on Closing Date cut-off statements for commercial and personal DDA
and savings accounts.
b. Statement savings accounts will not be charged for normal service
charges for the month in which the Closing Date occurs if the
Closing Date is other than month-end.
7. The last Instant Cash Reserve (ICR) statement prior to
the Closing Date will be a statement of account only,
with no payment billing. Buyer will ensure that there
are at least 25 days between customer billings.
8. Buyer will mail new checks to customers within 7 days
after the Closing Date.
9. Seller will provide all DDA and savings signature cards
in its possession at its Jacksonville, Florida,
Servicenter on the Monday following the Closing Date.
(Missing signature cards will be indicated on reports
provided to Buyer.) (Special cut-off statements and
special instructions for accounts will be provided.)
DDA/SAVINGS (Continued)
Resolution
Date
10.Seller will provide all resolutions (corporate, check
cashing) to Buyer. A list indicating any missing
resolutions will also be provided. Resolutions and list
will be available as soon after the Closing Date as
practicable.
11.Seller will retain all draft authorizations; Buyer will
be provided copies or assistance upon request.
12.A paper report will list all stop pay and hold
information; for balancing purposes, a dollar and number
total will accompany the report. ACH stop pays will be
on a paper report and included in the "Stop/Hold" file.
13.Special cut-off statements will be dropped by the Seller
on all active divested accounts after posting on the
Closing Date. Seller will mail statements with
appropriate items enclosed to the customer within five
Business Days of the Closing.
14.Accounts will be paid (credited) interest through
last normal interest cycle date.
15.Buyer will not receive a fiche of the last special cut-
off statement for personal or commercial accounts.
Seller will continue to handle inquiries about their
last special cut-off and prior statements.
16.To set up Buyer's related (linked) accounts for no-
charge checking, Seller will provide linkage information
via a report which will include transfers.
17.No audit confirmations will be placed in the final
special cut-off statements. A statement stuffer and/or
statement message will be jointly agreed to and will be
used to notify the customers that the account is being
sold.
18.Accounts with special overdraft limits will be
identified on the master file per file documentation.
19.Buyer agrees to honor collateral holds for loans not
included in the Assets.
CHECK ORDERS
Resolution
Date
1. Thirty days prior to the Closing Date, Seller will limit
new personal check orders and reorders for Branch
customers to a trial 50. Commercial check orders will be limited by
Customer Service Representative's discretion. Beginning Monday prior
to the Closing Date, no new orders or reorders will be
forwarded to Seller's printer; these will be held in the
Branches. Seller will notify its vendor of the sold
Branches.
2. Buyer will develop a customer check reorder information
tape from Seller's tapes to order replacement checks
from Buyer's printer.
CERTIFICATES OF DEPOSIT AND
INDIVIDUAL RETIREMENT ACCOUNTS (IRA)
Resolution
Date
1. Redeemed (closed) CDs will not be included in the Liabilities.
2. Dormant accounts will be included in the Liabilities.
Buyer will be responsible for escheat process provided
Seller has not already completed for the current year.
3. Seller will report actual interest withholding amounts
and interest paid by Seller through the Closing Date for
1099 purposes.
4. Buyer will be responsible for W-9/W-8 mailings after the
Closing Date. Seller has satisfied the mailing requirement for 1998.
5. Interest accrual and payment:
a. Interest will be accrued and paid through
Sunday, December 6, 1998.
b. Advance interest payments (checks or credits) will
have been created and outstanding through December 10, 1998
for CDs and December 4, 1998 for IRAs. Payments will be
reflected in the Final Settlement Statement.
6. Maturity notices:
a. Maturity notices will be mailed by Seller for CDs
that mature through January 5, 1999.
b. Maturity notices will be mailed by Seller for IRAs
that mature through January 5, 1999.
c. No inserts or special messages will be placed in
notices mailed by Seller.
7. Interest payment/transfers of CDs' interest into
accounts retained by Seller will no longer occur after
the Closing Date. Seller's customers will be advised
that their transfers are being converted into regular
interest checks as part of the standard Branch closing
process. Seller will provide a list of affected
accounts to Buyer.
CERTIFICATES OF DEPOSIT AND
INDIVIDUAL RETIREMENT ACCOUNTS (IRA) (Continued)
Resolution
Date
8. Seller will provide a file copy of physical CD
documentation in its possession on the Friday after the
Closing Date. Pledge and/or assignment information will be
attached to the CD copies if applicable.
9. The appropriate Individual Retirement Account
documentation will be transferred to Buyer.
10.Self-directed IRAs/QRPs will not be included in the Liabilities.
11.IRA 1099Rs due for 1998 will be the responsibility of
Seller for activity through closing date.
12.IRA 5498 reporting for 1998 will be the responsibility
of Seller for activity through closing date.
13.Buyer agrees to honor holds on CDs that are collateral
for loans not included in the Assets.
INSTANT CASH RESERVE
Resolution
Date
1. Loans over 30 days past due at the time of customer
notification of the sale will not be included in the Assets.
2. First Advance, First Choice, MasterCard and Visa
accounts and any consumer leases will not be included in
the Assets.
3. Instant Cash Reserve (ICR) accounts linked to a sold
Deposit Account will be included in the Assets. ICR
accounts not linked to a sold Deposit Account will not
be included in the Assets.
4. Buyer will be assigned "first beneficiary" of credit
insurance policies following the Closing Date. Buyer
assumes the income and liability of Seller's insurance
program following the Closing Date.
5. A blanket endorsement/assignment of notes included in
the Assets is satisfactory with the understanding that
any note will be endorsed separately where there is
legitimate reason for the same.
N/A 6. Buyer will report to the customer the amount of interest
paid by the customer during the year on each loan
included in the Assets.
7. Interest accruals will be through the Closing Date.
N/A 8. 1098 reporting requirements for the year will be the
responsibility of Buyer.
DIVESTITURE DAY
Resolution
Date
1. Buyer will pick up and sign for tapes, deliverable
reports and documentation at Seller's site in Charlotte.
All data will be available by noon on the Saturday
following the Closing Date. (Request that Buyer's
representative report into the control center by 9:00 a.m.)
2. Seller will provide back-up tapes in case the original
tapes cannot be read.
3. Buyer will have individuals on site in the Branches (or
available by phone) on the Closing Date and the Saturday
following the Closing Date to assist in making
pay/return decisions on NSF items.
4. Seller shall indemnify and hold Buyer harmless from and
against all claims, lawsuits, costs (including reasonable
counsel fees) and liabilities which arise out of or relate to
erros or ommissions in the magnetic tape provided to Buyer
with respect to the Deposits.
POST DIVESTITURE PROCESSING
Resolution
Date
1. Seller will make items available to Buyer per Business Day:
a. Cash letters will be available to be picked up at
Seller's Jacksonville, Florida Servicenter.
b. Seller will provide a daily file transmission, at no
charge, for all ACH transactions.
c. Seller will make ICR payments available to Buyer one
time per day. Settlement will be through the settlement account.
2. Buyer and Seller will each establish a single sold
accounts inquiry desk to handle requests and speed
research. The communication link will be between
Buyer's and Seller's desks only. All questions and
requests for account research will flow between these
inquiry desks. Buyer will contact the Branches if their
assistance is required. After the Closing Date, the divested
branches will place their inquiries through Buyer's inquiry desk.
3. Buyer will pay Seller for all research and photocopies
necessary to satisfy historical reconstruction and/or
third party account inquiries at Seller's then current
rate unless such research is directly related to Seller's error.
4. Seller will forward adjustments to Buyer with
description (including account number and customer name
if available). Adjustments will settle through the
settlement account.
POST DIVESTITURE PROCESSING
(Continued)
Resolution
Date
5. Interest adjustments required on accounts after the
Closing Date due to Seller's error prior to the Closing
Date will be handled by Seller. The customer will be
sent a check and a corrected 1099 if applicable.
6. Items in process of collection at the time of Closing
will be identified to Buyer and the dollar entries will
pass through the settlement account. Returned items received
after the Closing Date will be passed to the Buyer through the
settlement account. If any such returned items follow proper
procedure, that loss can be passed back to the Seller through
the settlement account. Seller will then reserve the right to
follow usual collection efforts against the customer.
7. Government reclamation notices on accounts will be
complied with, to the extent that funds are available in
the account at the time the notice is received. In the
event that funds are not available to cover all or part
of the reclamation activity prior to the Closing Date,
Buyer will comply with the reclamation to the extent
funds are available (on a FIFO basis) and then return
the reclamation to the government agency with notice
that the account was owned by Seller at the time covered
by the period for which funds are not remitted.
8. Funds transfers received for accounts during the grace
period will be posted to Buyer's single correspondent
DDA (the settlement account) with Seller. Buyer will be
advised by phone.
RETURN MAIL
Resolution
Date
1. Seller will send all return mail from the divested Branches'
customer communication to Buyer's designee. No
attempt will be made to remail this communication. These accounts will
still be included in the Liabilities.
2. Returned special cutoff statements (DDA and savings)
will be kept by Seller. Buyer may request copies/information as needed.
3. If any CD maturity notices are returned to Seller, its
account services area will contact Buyer's designee who
will secure proper addresses and complete notifications.
4. Seller will keep returned interest checks and notify the
Buyer's designee.
5. Seller will keep 1099s as per current procedure. No
effort will be made to locate customers.
6. Seller will keep returned NSF and OD notices. Seller
will also keep returned ICR notices.
7. Chargebacks (with checks attached), proof corrections,
deposit adjustments, and all miscellaneous adjustments
will be sent to Buyer's designee.
SCHEDULE 1.1
BRANCHES
County
Washington #322 Chipley
1242 Jackson Avenue
Chipley, Florida 32428
Washington #9183 Sunny Hills Specialty Branch
1770 Sunny Hills Boulevard, Suite B
Sunny Hills, Florida 32428
Gulf #175 Port St. Joe
504 Monument Avenue
Port St. Joe, Florida 32456
Bradford #327 Starke
105 North Jefferson Street
Starke, Florida 32091
Bradford #326 Bradford Square Remote
841 South Walnut
Starke, Florida 32091
Clay #177 Keystone Heights
405 Lawrence Boulevard South
Keystone Heights, Florida 32656
Putnam #350 Palatka Main
200 Reid Street
Palatka, Florida 32177
Putnam #355 Palatka Mall
400 Highway 19 North
Palatka, Florida 32077
ADDENDUM
This Addendum, dated as of December 3, 1998, is to the Purchase and
Assumption Agreement, dated as of August 26, 1998, (the "Agreement") by
and between Capital City Bank, a Florida-chartered bank ("Buyer"), and
First Union National Bank, a national banking association ("Seller").
WHEREAS, the parties desire to amend the Agreement as provided
herein;
NOW, THEREFORE, in consideration of the mutual covenants set forth
herein, and for other good and valuable consideration, the receipt and
adequacy of which is hereby acknowledged, the parties agree as follows:
1. All terms capitalized in this Addendum shall have the
meanings attributed to them in the Agreement, unless otherwise
specifically provided in this Addendum.
2. With respect to the following Material Defects to the
Branches, Buyer and Seller agree:
(a) Chipley - Seller shall install a canopy to cover the
end kiosk ATM in a manner that will fully validate
the warranty on the ATM machine. Such canopy shall
be of substantially the same quality as canopies
typically used by Seller;
(b) Port St. Joe - Seller shall credit Buyer the amount
of $12,000 reflecting the estimated cost to repair
and repaint the walls that have the lime from
plaster pushing the paint off the walls;
(c) Starke Drive-Thru - Seller shall credit Buyer the
amount of $9,500 reflecting the estimated cost to
replace and reflash the roof; and
(d) Chipley, Port St. Joe and Starke Main - Seller shall
credit Buyer the amounts of $2,585, $2,970 and
$12,125, respectively, reflecting the estimated
costs to remove all materials containing exposed
asbestos (as more specifically referred to in that
certain Memorandum, dated November 4, 1998, from
Heidi E. Davis to Michael Mitrione and Kim Davis, a
copy of which Memorandum has been provided to
Seller), and replace those materials with materials
of comparable quality.
3. As a result of Interplan Practice, Ltd. having identified
certain modifications that may be necessary to the Palatka Mall and
Palatka Main branches (all as more specifically set forth in two letters,
both dated March 1, 1998, from Interplan to First Union National Bank of
Florida), the Settlement Payment payable to Buyer pursuant to the
Agreement shall be increased by $27,390 plus a cost allowance for
necessary expenses to bring the elevators at the Palatka Main branch into
compliance with applicable regulations. The cost allowance for the
Palatka Main branch elevators shall be treated as a post closing
adjustment on the Adjusted Closing Statement, unless a letter
certifying elevators are in compliance is provided to Buyer prior to
post closing adjustment. Except as provided above,
Buyer shall be solely responsible hereafter for remediating such
potentially non-conforming aspects of these branches.
4. Notwithstanding anything to the contrary contained in the
Agreement, the parties agree to reduce the Amount of Premium by $155,910
reflecting the exclusion of the public funds identified by Buyer that are
in the form of certificates of deposit from the calculation of the Amount
of Premium.
5. Notwithstanding anything to the contrary contained in the
Agreement, the parties agree to reduce the Amount of Premium by $848,640,
reflecting the exclusion of the potential out-of-market accounts from the
calculation of the Amount of Premium.
6. As amended hereby, the Agreement shall remain in full force
and effect in accordance with its terms.
IN WITNESS WHEREOF, each of the parties has caused this Addendum to
be executed by a duly authorized officer as of the date written at the
beginning of this Addendum.
CAPITAL CITY BANK
BY: /s/ J. Kimbrough Davis
Its: Executive Vice President and Chief Financial Officer
FIRST UNION NATIONAL BANK
BY: /s/ Sid Newberg
Its: Senior Vice President
SECOND ADDENDUM
TO
PURCHASE AND ASSUMPTION AGREEMENT
This Second Addendum, dated as of December 4, 1998, by and between
Capital City Bank, a commercial bank organized under the laws of Florida
having its principal office in Tallahassee, Florida ("Buyer"), and First
Union National Bank, a national banking association having its principal
office in Charlotte, North Carolina ("Seller") (the "Addendum").
Buyer and Seller hereby amend that certain Purchase and Assumption
Agreement dated as of August 26, 1998 by and between Buyer and Seller (the
"Agreement") providing for the purchase by Buyer of certain Branches of
Seller (as defined in the Agreement) as follows:
1. Employee Benefits.
Section 8.2(b)(v) of the Agreement is hereby amended so that
Section 8.2(b)(v) shall read in its entirety as follows:
"(v) With respect to Buyer's defined contribution (401(k)) pension
plan:
(A) Buyer understands and agrees that Seller shall
disclose to the Transferred Employees that Buyer will not
permit a trustee-to-trustee transfer of the assets of such
employees held in Seller's defined contribution pension
benefit plan;
(B) For as long as any of the Transferred Employees
are employed by Buyer, Buyer agrees to (i) provide Seller
with such information (including documentation) concerning
the employment of any Transferred Employee which Seller
reasonably believes to be required in connection with a
proposed distribution of assets from such employee's 401(k)
account with Seller, and (ii) assist Seller in providing
information to the Transferred Employees as required by
ERISA; and
(C) With respect to any Transferred Employees who
have loans from their 401(k) accounts, Buyer agrees to
withhold from the pay of the Transferred Employees the
amount of loan repayments due to Seller and to transmit the
same to Seller as soon as practicable and in a manner
reasonably requested by Seller."
2. Defined Terms.
All capitalized terms not otherwise defined herein shall have the
same meanings ascribed to them in the Agreement.
IN WITNESS WHEREOF, each of the parties to this Amendment has
caused this Amendment to be executed by a duly authorized officer as of
the date written on page one of this Amendment.
CAPITAL CITY BANK
By:
Its:
FIRST UNION NATIONAL BANK
By: /s/ Sid Newberg
Its: Senior Vice President
CAPITAL CITY BANK COMPLETES
FIRST UNION NATIONAL BANK PURCHASE
TALLAHASSEE, FL - Capital City Bank Group, Inc, completed its purchase
of eight First Union National Bank offices located in Chipley, Sunny Hills,
Port St. Joe, Keystone Heights, Starke (two offices) and Palatka (two offices).
The $220 million dollar deposit acquisition enhances Capital City Bank's
growing franchise, now in excess of $1.2 billion.
William G. Smith, Jr., Capital City Bank Group Chief Executive Officer, said,
"We are excited about the opportunity to introduce our style of community
banking with local decision makers to the area. We welcome the clients
to Capital City and look forward to serving their many financial needs."
Capital City Bank Group, Inc., is a financial services company providing
traditional deposit and credit services to consumers, businesses and
municipalities. The Company operates 44 banking offices, 42 ATMs and
9 Bank 'N Shop locations in 17 counties in north and north central Florida.
The Bank Group'd stock is traded on the NASDAQ market under the symbol CCBG.
