UNITED STATES
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): August 25, 2000
CENTURY BANCSHARES, INC.
(Exact name of registrant as specified in its charter)
Delaware 0-16234 52-1489098
(State or other jurisdiction) (Commission File Number) (IRS Employer Identi-
of incorporation) Identification No.)
1275 Pennsylvania Avenue, N.W. 20004
Washington, D.C. (Zip code)
Registrant's telephone number, including area code: (202) 496-4100
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Item 5. Other Events.
On August 25, 2000, Century Bancshares, Inc. (the "Company") completed
its previously announced purchase of certain assets and assumption of certain
deposits and other liabilities of the branch of Resource Bank located at 1498
North Point Village Center, Reston, Virginia (the "Reston Branch"). As part of
the transaction, the Company's wholly-owned subsidiary, Century National Bank
(the "Bank"), assumed approximately $52 million in deposits of the Reston Branch
from Resource Bank and obligations under the Reston Branch's lease and acquired
approximately $3.4 million in mortgage loans from the Reston Branch's portfolio.
The assumption of the deposits and other liabilities by the Bank was
made pursuant to a Purchase and Assumption Agreement by and between the Bank and
Resource Bank dated May 22, 2000, as amended by that certain Amendment No. 1 to
Purchase and Assumption Agreement by and between Resource Bank and the Bank (the
"Reston Agreement"). In consideration of the assumption of the deposits and
other liabilities, Resource Bank made a cash transfer to the Bank on the closing
date of approximately $43.9 million, representing the total amount of the
liabilities assumed, including interest posted or accrued thereon, less an
amount equal to the sum on the closing date of (i) the face value of vault cash
at the Reston Branch, (ii) $1,000,000 for the leasehold interest and leasehold
improvements and certain personal property located at the Reston Branch, (iii)
the unpaid principal balance and accrued interest thereon of certain overdraft
protection loans and certain other loans, (iv) certain proration items, and (v)
an amount, not to exceed $4,000,000, equal to 7.2% of the balance of the
deposits assumed as of the closing date, excluding deposits of the Reston Branch
and its directors, officers, employees, affiliates, principal shareholders or
their families or related interests and certain other types of deposits.
In connection with the transaction, Resource Bank has agreed, for a
period of two years after the closing, that neither it nor any of its
subsidiaries, affiliates, successors or assigns will enter into any agreement to
acquire, lease, purchase, own, operate or use any building, office or other
facility or premises within a three mile radius of the Reston Branch location
for the purpose of accepting deposits or cashing checks provided, however, that
Resource Bank shall be permitted to operate facilities in Herndon, Virginia at
698 Elden Street, 625 Elden Street and 500 Grove Street. In addition, Resource
Bank has agreed that neither it nor its subsidiaries or affiliates (including
the directors, officers,
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employees or principal shareholders), successors or assigns will, for a period
of two years after closing, solicit deposits, loans or other business from
customers whose deposits are assumed or whose loans are acquired pursuant to the
Reston Agreement provided, however, that Resource Bank or any of its
subsidiaries, affiliates, successors or assigns shall not be prohibited from
engaging in general media advertising by means of publications of general
circulation in the Washington, D.C. metropolitan market or broadcast stations
serving such market.
In connection with the transaction, the Bank assumed the lease for the
Restom Branch's location at 1498 North Point Village Center, Reston, Virginia.
The Reston Branch is located in Fairfax County, Virginia. The Reston Branch
premises consist of approximately 2600 square feet, which are under lease
through 2013, with the option to renew the lease for two successive terms of 5
years each.
Item 7. Financial Statements and Exhibits.
(c) Exhibits. The following materials are filed as exhibits to this
Current Report on Form 8-K:
Exhibit
Number Identification of Exhibit
2.1 Purchase and Assumption Agreement by and
between Resource Bank and Century National
Bank dated May 22, 2000
2.2 Amendment No.1 to Purchase and Assumption Agreement by and between
Resource Bank and Century National Bank
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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.
CENTURY BANCSHARES, INC.
(Registrant)
By: /s/ Joseph S. Bracewell
-------------------
Joseph S. Bracewell
President and Chief Executive Officer
Dated: September 7, 2000
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INDEX TO EXHIBITS
Exhibit
Number Identification of Exhibit
2.1 Purchase and Assumption Agreement by and between Resource Bank and
Century National Bank dated May 22, 2000
2.2 Amendment No. 1 to Purchase and Assumption Agreement by and between
Resource Bank and Century National Bank
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Exhibit 2.1
PURCHASE AND ASSUMPTION AGREEMENT
By and between
Resource Bank
and
Century National Bank
May 22, 2000
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Table of Contents
Recitals 1
SECTION 1
Purchase and Assumption 1
1.01 Purchase and Sale of Assets 1
1.02 Assumption of Liabilities 2
1.03 Closing Date Adjustments to Assets and Liabilities 3
1.04 Consideration for Purchase and Assumption 3
1.05 Pro Rata Adjustment and Reimbursement 4
1.06 Closing 4
1.07 Seller's Actions at Closing 5
1.08 Purchaser's Actions at Closing 6
1.09 Certain Pre-Closing Transitional Matters 6
1.10 Certain Post-Closing Transitional Matters 7
1.11 Non-solicitation of Business 9
1.12 Covenant Not to Compete 9
1.13 Indemnification 9
1.14 Survival of Covenants 10
SECTION 2
Representations and Warranties of Seller 10
2.01 Corporate Organization and Related Matters 10
2.02 Execution of Agreement; Enforceability 10
2.03 Title to and Condition of Assets 10
2.04 Actions, Suits and Proceedings 11
2.05 Agreements with Governmental Authorities 11
2.06 No Brokers or Agents 11
2.07 Taxes 11
2.08 IRA Account Documentation 11
2.09 Labor Relations 12
2.10 Environmental 12
2.11 Deposits 13
2.12 Branch Lease 14
2.13 Loans 14
2.14 Personal Property 15
2.15 FIRPTA 15
2.16 Books and Records 16
2.17 Absence of Certain Change and Events 16
2.18 Closing Date 17
2.19 Representations Not Misleading 17
2.20 Survival of Representations and Warranties 17
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SECTION 3
Representations and Warranties of Purchaser 17
3.01 Corporate Organization and Related Matters 17
3.02 Execution of Agreement; Enforceability 17
3.03 Actions, Suits and Proceedings 18
3.04 Agreements with Governmental Authorities 18
3.05 No Brokers or Agents 18
3.06 Closing Date 18
3.07 Representations Not Misleading 18
3.08 Survival of Representations and Warranties 18
SECTION 4
Conduct of Business Pending Closing Date 18
4.01 Ordinary Course of Business 18
4.02 Preservation of Business 19
4.03 Indebtedness and Collateral Obligations 19
4.04 Certain Actions 19
SECTION 5
Covenants 19
5.01 No Offers or Negotiations 19
5.02 Access to Books and Records 19
5.03 Confidentiality 20
5.04 Applications, Consents and Approvals 20
5.05 Reports to Purchaser 21
5.06 Operational and Data Processing Conversion Matters 21
5.07 Further Assurances 21
5.08 Allocation of Purchase Price 21
5.09 Insurance 21
SECTION 6
Conditions to Obligations of Purchaser 22
6.01 Representations and Warranties True 22
6.02 Obligations Performed by Seller 22
6.03 No Adverse Litigation 22
6.04 Compliance Certificate 22
6.05 Certain Regulatory Approvals 22
6.06 Capital 22
6.07 Deposits 23
6.08 Lease Agreement 23
SECTION 7
Conditions to Obligations of Seller 23
7.01 Representations and Warranties True 23
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7.02 Obligations Performed by Purchaser 23
7.03 No Adverse Litigation 23
7.04 Compliance Certificate 23
7.05 Regulatory and Other Approvals 24
7.06 Lease Agreement 24
SECTION 8
Termination 24
8.01 Methods of Termination 24
8.02 Procedure Upon Termination 25
SECTION 9
Miscellaneous Provisions 25
9.01 Entire Agreement 25
9.02 Employees 26
9.03 Consents 26
9.04 Waiver 27
9.05 Captions and Headings 27
9.06 Governing Law 27
9.07 Notices 27
9.08 Assignment 27
9.09 Expenses 27
9.10 Terminology 28
9.11 Counterparts 28
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PURCHASE AND ASSUMPTION AGREEMENT
THIS PURCHASE AND ASSUMPTION AGREEMENT ("Agreement"), dated this 22nd
day of May, 2000, is by and between Resource Bank, a Virginia state chartered
commercial bank ("Seller"), and Century National Bank, a national bank
("Purchaser").
Recitals
A. Seller is the owner of certain assets and, as an insured
institution, has certain deposit and other liabilities at its branch office
located at 1498 North Point Village Center, Reston, Virginia (the "Branch").
B. Seller desires to sell, convey and transfer certain of such assets
and liabilities to Purchaser, and Purchaser desires to purchase and acquire such
assets from Seller, and to assume from Seller, certain liabilities in connection
therewith.
C. As a result of the transaction contemplated hereby, Purchaser will
commence the operation of branch banking facilities at the location of the
Branch and Seller will terminate the operation of its branch office and
relinquish all rights to any leasehold, real estate and certain personal
property interests at such location.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, Purchaser and Seller agree as follows:
SECTION 1
Purchase and Assumption
1.01 Purchase and Sale of Assets. At the Closing (as hereinafter
defined), upon the terms and subject to the conditions of this Agreement and
subject to adjustment as provided herein, Purchaser shall purchase, acquire and
accept, and Seller shall sell, transfer, convey, assign and deliver to Purchaser
good and marketable title, free and clear of all liabilities, obligations,
liens, claims, charges, security interests and encumbrances of any character
(other than liabilities, obligations, liens, claims, charges, security interests
and encumbrances permitted hereunder), to the following assets (collectively,
the "Assets"):
(a) All of Seller's right, title and interest in and to the leasehold
interest and leasehold improvements relating to the Branch and described in
Exhibit 1.01(a) hereto and incorporated herein by reference (the "Real Estate
Interests");
(b) All of Seller's right, title and interest in and to the personal
property at the Branch, including without limitation, all furniture, office
equipment, vault, machinery, fixtures and other items (but excluding the
Seller's name and/or logo owned by Seller and non-compatible computer
equipment), described in Exhibit 1.01(b) hereto and incorporated herein by
reference (the "Personal Property");
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(c) All of Seller's right, title and interest in and to the loans set
forth on Exhibit 1.01(c) hereto and incorporated herein by reference, together
with any and all related liens, mortgages, deeds of trust, instruments,
documentation, security, guarantees and other rights and interests related to
or pledged with respect to such loans (the "Loans"), including all balances
relating to the Loans for which an escrow or other similar account is maintain-
ed under the terms of such Loans, subject to adjustment as provided in
Section 1.09(d).
(d) All of Seller's right, title and interest in and to the overdraft
protection loans relating to Deposits as defined below ("Overdraft Protection
Loans") described in Exhibit 1.01(d) hereto and incorporated herein by
reference;
(e) All cash on hand at the Branch as of the close of business on the
Closing Day (as defined below) including vault cash, petty cash, ATM cash, if
any, and tellers' cash ("Vault Cash");
(f) All right, title and interest of Seller in and to the safe deposit
business at the Branch as of the close of business on the Closing Day; and
(g) All original records and documents related to the Assets
transferred or Liabilities assumed (as defined below) by Purchaser including,
but not limited to, the deposit accounts maintained by Seller at the Branch.
The Assets shall not include any assets, tangible or intangible, of Seller not
specifically identified herein or in the Exhibits hereto.
1.02 Assumption of Liabilities. At the Closing, upon the terms and
subject to the conditions of this Agreement and subject to adjustment as
provided herein, Seller shall assign and Purchaser shall assume the liabilities
and obligations of Seller to be discharged, performed, satisfied or paid after
the Closing Date with respect to the following (collectively, the"Liabilities"):
(a) The deposit accounts held at the Branch, whether represented by
collected or uncollected funds, together with all accrued and unpaid interest
thereon as of the close of business on the Closing Date, including the fiduciary
obligations of Seller for individual retirement accounts ("IRAs") which are
funded by assumed deposit accounts, which deposit accounts are identified by
account number, category, balance, interest rate and, if applicable, due date,
in Exhibit 1.02(a) hereto and incorporated herein by reference (the "Deposits");
such Deposits exclude deposit accounts that cannot be assumed by Purchaser
because of legal impediments and those deposit accounts which are security for
or associated with equity lines of credit or deposit overdraft and collateral
loans not acquired by Purchaser;
(b) The real estate lease pertaining to the Branch, described in
Exhibit 1.02(b) hereto and incorporated herein by reference (the "Lease");
(c) The unfunded commitments or lines of credit relating to the
Overdraft Protection Loans; and
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(d) The safe deposit business at the Branch.
The Liabilities shall not include any liabilities of Seller of any kind or
description not specifically identified herein or in the Exhibits hereto.
1.03 Closing Date Adjustments to Assets and Liabilities. At and as of
the Closing Date, Seller shall update all Exhibits provided for in Sections 1.01
and 1.02 (including in Exhibit 1.02(a) the names and addresses of customers for
accounts included in the Deposits) and shall deliver such updated Exhibits to
Purchaser.
1.04 Consideration for Purchase and Assumption. In consideration for
the sale of the Assets by Seller and the assumption by Purchaser of the
Liabilities, Seller shall make available and transfer to Purchaser, in the
manner specified in Section 1.06 hereof, funds equal to the sum of the aggregate
balance of all of the Deposits (as set forth on the balance sheet of Seller at
the close of business on Closing Date prepared in accordance with generally
accepted accounting principles applied on a basis consistent with prior periods)
including interest posted or accrued to such accounts as of the close of
business on the Closing Date, less an amount equal to the sum of:
(a) The face value of the Vault Cash;
(b) The sum of $1,000,000 for the Real Estate Interests and the
Personal Property;
(c) The unpaid principal balance and accrued interest thereon of
the Overdraft Protection Loans and the Loans determined as of the close of
business of the Branch on the Closing Date;
(d) The Purchaser's share of the pro rata adjustment of items
required pursuant to Section 1.05; and
(e) An amount equal to 7.2% of the Deposits on the Closing Date,
provided that such amount shall not exceed $4,000,000 ("Premium").
In the event that the sum of items (a) through (e) above should be in
excess of the aggregate amount to be transferred by Seller pursuant to the first
paragraph of this Section 1.04, the full amount of such excess shall constitute
an amount due from Purchaser to Seller and shall be paid to Seller at the
Closing in the manner specified in Section 1.06 hereof.
In calculating the amount of the Premium in Section 1.04(e) of the
Agreement, the following amounts shall be excluded from the Deposits: (i) the
balance of certificates of deposit, if any, required to reduce the amount of
total Deposits to comply with Section 6.07(a) and/or the certificate of deposit
percentage to comply with Section 6.07(b), and (ii) the balance of accounts held
by Seller or any of its directors, officers, employees, affiliates, principal
shareholders or their families or related interests. With respect to the
foregoing accounts, Seller shall be exempt from the provisions of Section
2.17(f) of the Agreement and therefore be permitted (but not required) to
transfer such accounts to another one of Seller's branches prior to Closing.
Any such transfer shall not be deemed (a) to effect a material adverse change
pursuant to Section 2.17(a); (b) to be a change in any method of management or
operation of the Branch pursuant to Section 2.17(d); or to be a transaction
other than in the ordinary course of business pursuant to Sections 2.17(h) or
4.01. Exhibit 1.02(a) to this Agreement contains a separate listing of the
accounts described in (ii) above as of the date of this Agreement, which list
shall be updated as provided by this Agreement.
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1.05 Pro Rata Adjustment and Reimbursement. Unless otherwise provided
herein, it is the intention of the parties that Seller will operate the Branch
for its own account until the close of business on Closing Date and that
Purchaser shall operate the Branch, hold the Assets and assume the Liabilities
for its own account after the close of business on the Closing Date. Thus,
except as otherwise specifically provided herein, items of proration and other
adjustments shall be prorated as of close of business of the Branch on the
Closing Date and settled between Seller and Purchaser on the Closing Date
whether or not such adjustment would normally be made as of such time. Items of
proration and adjustment will be handled at Closing as an adjustment to the
amount of funds to be delivered by Seller to Purchaser, or Purchaser to Seller,
as appropriate, unless otherwise agreed.
For purposes of this Agreement, items of proration and other
adjustments shall consist of: (i) rental payments under the Lease; (ii) sales
and use taxes and personal and real property taxes and assessments; (iii) FDIC
deposit insurance assessments; (iv) safe deposit rental payments; and (v) other
prepaid expenses and items and accrued and unpaid liabilities, if any, as of the
close of business on the Closing Date.
1.06 Closing.
(a) The consummation and closing ("Closing") of the transactions
contemplated by this Agreement shall take place as of the close of business of
the Branch on the Friday next following the receipt of all necessary regulatory,
corporate and other approvals, the expiration of any mandatory waiting periods
and the satisfaction or waiver of all other conditions set forth in Sections 6
and 7, or on such other date as shall be mutually agreed to by the parties
hereto. The date on which the Closing takes place is referred to herein as the
"Closing Date". The Closing shall take place at Resource Bank, 500 Grove St.,
Suite 300, Herndon, Virginia 20170, as of the close of business of the Branch,
on the Closing Date, or at such other place and time as shall be mutually
agreed to by the parties hereto. Notwithstanding the foregoing, it is the
intention of the parties as of the date hereof that the Closing become effective
on the Closing Date by means of an exchange of documents without the physical
meeting of the parties as set forth above.
(b) Subject to the adjustment procedures set forth in this Section
1.06, the transfer of the funds, if any, due to Purchaser or to Seller, as the
case may be, as set forth pursuant to the terms of Section 1.04 hereof, shall be
made on the Closing Date in immediately available United States Federal Funds.
At least two business days prior to the Closing, Seller and Purchaser shall
provide written notice to one another indicating the account and bank to which
such funds shall be wire transferred. In order to facilitate the Closing, the
parties agree: (i) that the amount of funds transferred on the Closing Date,
pursuant to Section 1.04 hereof, shall be computed based upon (a) the aggregate
book value of the Assets and the Liabilities as of the close of business on the
day immediately preceding the Closing Date and (b) the estimated amount of the
Premium; and (ii) that within ten (10) business days after the Closing, the
parties shall make appropriate post-closing adjustments, consistent with the
provisions of Section 1.04 hereof, based upon actual Deposits, Loans, Overdraft
Protection Loans and cash transactions which took place on the Closing Date or
which took place prior to the Closing Date but which were not reflected as of
the close of business on the day immediately preceding the Closing Date. Such
adjustment amount shall bear interest computed from the Closing Date to the
settlement date based on the rate prevailing on the settlement date for Federal
Funds sold to First Union National Bank.
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(c) The payments to be made pursuant to Section 1.04 shall be as set
forth and calculated in accordance with the settlement statement prepared in
connection with the Closing, substantially in the form attached hereto as
Exhibit 1.06(c).
1.07 Seller's Actions at Closing. On the Closing Date, the Seller
shall:
(a) deliver to Purchaser such of the Assets as are capable of physical
delivery, including, without limitation, all records, documents and files of
Seller relating to the Assets and Liabilities and keys and combinations to the
Branch premises, except as otherwise provided elsewhere in this Agreement;
(b) execute, acknowledge and deliver to Purchaser all such
endorsements, assignments, bills of sale and other instruments of conveyance,
assignment and transfer as shall reasonably be necessary or advisable to
consummate the sale, assignment and transfer of the Assets to Purchaser as
provided herein; provided that all of the documents and instruments to be
delivered by Seller hereunder shall be in form and substance reasonably
satisfactory to counsel for Purchaser;
(c) assign, transfer and deliver to Purchaser each of the following
records pertaining to the Deposits on the Closing Date: signature cards, orders
and contracts between Seller and depositors and records of similar character;
canceled checks and/or negotiable orders of withdrawal, if any; and all other
miscellaneous records, statements and materials maintained by Seller at the
Branch relative to any deposit, provided, however, with respect to the records,
statements, other data and materials not maintained at the Branch, Seller shall
provide Purchaser with reasonable access to such records as provided in this
Agreement;
(d) assign, transfer and deliver to Purchaser all records in possession
of Seller pertaining to the Deposits necessary for Purchaser to comply with all
of the requirements of federal and state law and regulations;
(e) transfer and deliver the contents of the safe deposit boxes
maintained at the Branch as the same exist as of the close of business on the
Closing Date, along with keys, documents and other records pertaining thereto
and to the unrented boxes;
(f) make available and transfer to Purchaser on the Closing Date any
funds required to be paid to Purchaser pursuant to the terms of this Agreement;
and
(g) execute, acknowledge and deliver to Purchaser all certificates and
other documents required to be delivered to Purchaser by Seller at the Closing
pursuant to the terms of this Agreement.
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Seller agrees that it will preserve and safely keep, for so long as may
be required under applicable law, all of the files and records not transferred
to Purchaser which relate to the Assets and Liabilities, for the mutual benefit
of itself and Purchaser, and that it will, upon the request of Purchaser and in
a timely manner, consult and review such files and records and provide Purchaser
with such information relating to pre-Closing transactions and activity relating
to the Assets and Liabilities as Purchaser may reasonably require. For purposes
of this Section 1.07, where possible, physical delivery may be accomplished by
the transfer of control over the Branch from Seller to Purchaser at the Closing.
1.08 Purchaser's Actions at Closing. On the Closing Date, the
Purchaser shall:
(a) pay to Seller any funds required to be paid to Seller pursuant to
the terms of this Agreement; and
(b) execute, acknowledge and deliver to Seller all certificates and
other documents required to be delivered to Seller by Purchaser at the Closing
pursuant to the terms of this Agreement.
1.09 Certain Pre-Closing Transitional Matters.
(a) Seller shall provide such records and other information as shall be
necessary to enable Purchaser to send, subsequent to the receipt of all required
regulatory approvals and approximately 10 days prior to the Closing Date, at
Purchaser's cost and expense, to each depositor or other holder of a Liability,
a letter prepared by Purchaser and reasonably acceptable to Seller, notifying
each such depositor or holder of the prospective assignment of the Liability
pursuant to this Agreement and providing information about Purchaser and its
banking services. Seller shall cooperate with Purchaser to enable Purchaser, at
Purchaser's expense, prior to the Closing, to reissue checks and other similar
documents and instruments to depositors whose Liabilities are to be assumed by
Purchaser hereunder.
(b) Prior to the Closing Date, Purchaser shall designate a successor
trustee or custodian, which may be Purchaser, as to any IRA constituting a
Liability and for which Seller acts as trustee or custodian. Seller will
transfer the trusteeship or custodianship of all such IRAs to such successor
trustee or custodian on the Closing Date. Seller shall be responsible for all
federal, state and local income tax reporting for such accounts for the period
ending on the Closing Date, and the successor trustee or custodian shall be
responsible for such reporting thereafter.
(c) In order to assist Purchaser with the conversion of Seller's data
concerning Branch operations to Purchaser's systems, Seller shall, at its cost
and expense, within 10 days of the date of this Agreement, provide to Purchaser
a master file original and record file layout tape or tapes concerning the
Deposits and Loans and a master file print and all product specifications to
include all detail account coding in hard copy. The foregoing shall include
information on Deposits, Loans, safe deposit boxes and ATM cards. Such tape(s)
and other information shall be as of a recent date mutually agreeable to
Purchaser and Seller and shall be updated by Seller and delivered to Purchaser
at and as of the Closing Date.
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1.10 Certain Post-Closing Transitional Matters.
(a) Seller and Purchaser agree that each party shall be solely
responsible for providing to the Internal Revenue Service and to each depositor,
other holder of a Liability or customer, to the extent required by law, Forms
1098, 1099 INT, 1099R and 5498 and other applicable reporting forms with respect
to each of the Liabilities and Assets for the period during which Seller or
Purchaser, as applicable, administers such Liabilities and Assets during 2000.
(b) Within ten (10) business days following the Closing Date, Seller
shall prepare and mail closing statements for each Deposit for which there has
been any activity between the last statement prior to Closing and the close of
business on the Closing Date, for the period from the date of the last statement
to and including the Closing Date, and provide Purchaser with a copy.
(c) Purchaser agrees to pay in accordance with law and customary
banking practices all properly drawn and presented checks, drafts and withdrawal
orders presented to Purchaser by mail, over the counter or through the check
clearing system of the banking industry, by depositors relating to the Deposits,
whether drawn on checks, withdrawal or draft forms provided by Purchaser or
Seller, and in all other respects to discharge, in the usual course of the
banking business, the duties and obligations of Seller with respect to the
balances due and owing to the depositors with respect to whom Purchaser has
assumed the Deposits. Purchaser's obligation hereunder to honor checks, drafts
and withdrawal orders on forms provided by Seller and carrying its imprint shall
not apply to any such check, draft or withdrawal order presented to Purchaser
more than 120 days following the Closing Date.
(d) Holds that have been placed on particular Liabilities by Seller or
on individual checks, draws or other instruments shall be continued by Purchaser
under the same terms. Seller shall deliver to Purchaser a list or tape of any
such holds at the Closing.
(e) Seller will promptly and fully recompense Purchaser for:
(i) items returned to Purchaser or Seller on account of fraud,
negligence, errors or improper banking practices or procedures, which
are drawn on or chargeable to Deposits assumed by Purchaser hereunder
and for which the transaction date on the item was on or prior to the
Closing Date; and
(ii) items returned to Purchaser or Seller for "uncollected
funds" which are drawn on or chargeable to Deposits assumed by
Purchaser hereunder, for which the transaction date of such returned
item is on or prior to the Closing Date, but only to the extent that
Seller has paid or honored items withdrawn on "uncollected funds" on or
prior to the Closing Date.
Notwithstanding the foregoing, Seller shall not be charged for any item unless
Purchaser has sustained a loss with respect to such item, after normal
collection efforts (normal collection efforts, however, shall not require
Purchaser to institute a lawsuit or any other legal action). At time of payment
by Seller to Purchaser pursuant to this Section 1.10(e), Purchaser shall assign
to Seller any rights Purchaser may have to prosecute a claim against a third
party relating to the items.
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(f) Purchaser and Seller will instruct the office of the Federal
Reserve Bank ("FRB") in Baltimore, Maryland to deliver all processed and paid
checks or draws drawn on assumed Deposits to Purchaser immediately following the
Closing Date. For a period of 120 days following the Closing Date, Seller
agrees to act as Purchaser's limited correspondent with respect to the FRB cash
letter to process and pay checks or draws drawn on assumed Deposits which are
delivered to Seller, on forms provided by Seller, on any such Deposits assumed
by Purchaser hereunder. Seller agrees in this regard that it shall:
(i) Maintain a mechanism to receive such items on a daily basis;
and
(ii) Shall prepare for shipping all physical items received by
it in its FRB cash letter or otherwise received by it by 9 a.m. of any
business day, for pickup by Purchaser by 1:00 p.m. on the same business
day, or otherwise delivered to Purchaser by such means as agreed to by
the parties. Purchaser and Seller agree that any courier or telephone
costs associated with paragraph (ii) shall be borne by Purchaser.
Seller further agrees that it shall notify Purchaser of any information
received regarding the settlement and clearance of any foreign checks,
savings bonds, or coupons deposited with it on or prior to the Closing
Date.
(g) From and after the Closing Date, Seller shall continue to accept
and immediately forward to Purchaser all automated clearinghouse ("ACH") entries
and corresponding funds for a period of 120 days. Seller also agrees to include
the originator identification number and tracer number.
(h) Seller agrees to notify Purchaser of the return to it of any items
with respect to assumed Deposits deposited in or cashed at any of the Seller's
offices on or prior to the Closing Date and shall expeditiously forward any such
items to Purchaser.
(i) During the processing period set out in Section 1.10(f) hereof,
Purchaser agrees to honor and pay all properly payable drafts, checks or
negotiable orders of withdrawal delivered to it by Seller pursuant to Section
1.10(f) hereof.
(j) In settlement of transactions described in Sections 1.10(e), (f),
(g) and (h) Purchaser and Seller agree that Seller shall provide Purchaser by
facsimile with a daily net settlement figure together with a detailed trans-
action listing for all such transactions then pending by 1:00 p.m. Virginia
time of each business day; the parties agree that the party obligated to remit
any funds thereunder shall do so by wire transfer before 3:00 p.m. Virginia time
of such day. Any such settlement shall be provisional pending receipt by the
respective parties of the physical items relating to such settlement; the
parties shall adjust the next daily settlement to reflect any adjustments
resulting from its receipt of the physical items.
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(k) In case of any dispute with or inquiry by an account holder whose
Deposit is assumed under this Agreement, which dispute or inquiry relates to the
servicing of such Deposit by Seller prior to the date for which a Deposit
history has been provided to Purchaser, Seller will provide Purchaser with the
appropriate information regarding the Deposit and copies of pertinent documents
or instruments to the extent available with respect to such dispute or inquiry
so as to permit Purchaser to respond to the account holder within a period of
time and in a manner which would comply with standard banking practices and
customs.
(l) As soon as practicable following the Closing Date, Purchaser will
substitute its name and logo for the name and logo of the Seller on all signs
located at the Branch and shall be entitled to remove all signs which carry the
name and logo of the Seller which Seller has not removed. If Purchaser removes
any of such signs of Seller, such signs will be returned to Seller.
1.11 Non-Solicitation of Business. In consideration of the purchase of
Assets and assumption of Liabilities by Purchaser, neither Seller nor its
subsidiaries, affiliates (including the directors, officers, employees or
principal shareholders), successors or assigns will, for a period of two years
after the Closing Date, solicit, on behalf of itself or others, deposits, loans
or other business from customers whose Deposits are assumed or Loans or Over-
draft Protection Loans acquired by Purchaser hereunder; provided, however, that
nothing contained in this Section 1.11 shall prohibit Seller or any of its
subsidiaries, affiliates, successors or assigns from engaging in general media
advertising by means of publications of general circulation in the Washington,
D.C. Metropolitan market or broadcast stations serving such market.
1.12 Covenant Not to Compete. From and after the Closing, and for a
period of two years following the Closing Date, Seller and its subsidiaries,
affiliates, successors or assigns shall not, and shall not enter into any
agreement to, acquire, lease, purchase, own, operate or use any building, office
or other facility or premises located in Reston, Virginia, and/or within a three
mile radius of the Branch location for the purpose of accepting deposits or
cashing checks provided, however, that Seller shall be permitted to operate
facilities in Herndon, Virginia at 698 Elden Street (existing branch), 625 Elden
Street (planned branch relocation site) and 500 Grove Street (administrative
offices).
1.13 Indemnification.
(a) Seller agrees to and does hereby indemnify, defend and hold
Purchaser harmless from any loss, demand, obligation, cost, expense or liability
(including reasonable attorney's fees and expenses) (i) arising out of any
actions, suits or other proceedings commenced prior to, or on or after, the
Closing Date which relate to the operations at the Branch on or prior to the
Closing Date, or which arise out of any wrongful act, omission or negligence of
Seller relating to the operations of the Branch, the Assets or Liabilities on or
prior to the Closing Date; or (ii) arising out of any breach by Seller of its
representations, warranties, covenants or agreements contained herein or in any
instrument, document or certificate delivered to Purchaser pursuant hereto.
(b) Purchaser agrees to and does hereby indemnify, defend and hold
Seller harmless from any loss, demand, obligation, cost, expense or liability
(including reasonable attorney's fees and expenses) (i) arising out of any
actions, suits or other proceedings which relate to the operations at the Branch
subsequent to the Closing Date, or which arise out of any wrongful act, omission
or negligence of Purchaser relating to the operations of the Branch, the Assets
or Liabilities subsequent to the Closing Date; or (ii) arising out of any breach
by Purchaser of its representations, warranties, covenants or agreements
contained herein or in any instrument, document or certificate delivered to
Seller pursuant hereto.
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1.14 Survival of Covenants. The obligations and covenants of the
parties under this Section shall survive the Closing.
SECTION 2
Representations and Warranties of Seller
Except as specified in the Schedule of Exceptions accompanying this
Agreement, Seller represents and warrants to Purchaser as follows:
2.01 Corporate Organization and Related Matters. Seller is a state
chartered commercial bank duly organized, validly existing and in good standing
under the laws of the Commonwealth of Virginia, with the corporate power and
authority to transact business in the Commonwealth of Virginia and to engage in
the banking business and all other businesses in which it engages and to own the
Assets and hold the Deposits. Seller has the requisite corporate power and
authority to enter into this Agreement and to consummate the transactions
contemplated hereby. Neither the execution and delivery of this Agreement nor
the consummation of the transactions contemplated hereby violate, conflict with
or constitute a breach of any provision of the charter of Seller or its Bylaws
or (subject to any consent required to be obtained pursuant to this Agreement)
any agreement or instrument to which it is a party or by which its assets are
bound, or any law, rule or regulation or any order or decree applicable by its
terms specifically to Seller or its assets.
2.02 Execution of Agreement; Enforceability. The execution and
delivery of this Agreement and each of the documents and instruments
contemplated hereby, and the transactions contemplated hereby, have been duly
authorized by all necessary corporate action on the part of Seller. This
Agreement constitutes, and such documents and instruments will constitute,
legal, valid and binding obligations of Seller, enforceable in accordance with
their respective terms, subject to bankruptcy, insolvency, reorganization,
moratorium, receivership, conservatorship and similar laws relating to the
rights and remedies of creditors, as well as to general principles of equity.
2.03 Title to and Condition of Assets. Seller is the owner of the
Assets and has good and marketable title thereto, free and clear of any
mortgage, pledge, lien, security interest, conditional sales agreement,
encumbrance or charge of any kind or description, other than liens for current
taxes not yet due and payable and such encumbrances and imperfections in title,
if any, which are not substantial in character or amount or which otherwise do
not materially impair the use and enjoyment of such Assets. No notice of any
violation of zoning laws, building or fire codes or other statutes, ordinances
or regulations relating to the use or operation of the Real Estate Interests has
been received by Seller and Seller has not undertaken any construction or
improvements on the Real Estate Interests which could result in the imposition
of any mechanics, materialmen or other similar liens on the Real Estate
Interests. There are no condemnation proceedings pending or, to the knowledge
of Seller, threatened against the Real Estate Interests or any part thereof.
Neither the Real Estate Interests nor any other real estate owned or leased to
be conveyed or transferred to Purchaser hereunder, nor any real estate which is
pledged or stands as collateral security for any of the Loans is the subject of
any action, suit or proceeding pending or, to the knowledge of Seller,
threatened, under environmental, hazardous waste disposal or other similar
federal or state laws, rules or regulations, and none of the Real Estate
Interests or other real estate owned or leased which is to be conveyed or leased
to Purchaser hereunder or which is pledged or stands as collateral security for
any of the Loans has been used in any manner which would violate any such laws,
rules or regulations.
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2.04 Actions, Suits and Proceedings. There are no actions, suits or
proceedings pending or, to the knowledge of Seller, threatened against or
affecting Seller or the Assets or Liabilities, and no basis therefor, which, if
decided adversely to Seller would have a material adverse effect on the Assets
or Liabilities or which would have the effect of enjoining or impairing the
ability of Seller effectively to consummate the transactions contemplated by
this Agreement.
2.05 Agreements with Governmental Authorities. Other than as
previously disclosed in writing to Purchaser in the Schedule of Exceptions,
Seller is not a party to any agreement, understanding, consent decree or other
arrangement with any federal or state regulatory or other agency charged with
supervising any portion of the banking industry. Seller has not received notice
from any federal or state governmental agency indicating that it would oppose or
not grant or issue its consent or approval, if required, with respect to the
transaction contemplated by this Agreement.
2.06 No Brokers or Agents. Seller has not retained or otherwise
engaged any broker, finder or other person or agent or agreed to pay any fee or
commission to any agent, broker or other person for or on account of this
Agreement or the transactions contemplated hereby.
2.07 Taxes. With respect to all interest bearing accounts assigned to
Purchaser, the records of Seller transferred to Purchaser contain or will
contain all information and documents (including without limitation properly
completed Forms W-9) necessary to comply with all information reporting and tax
withholding requirements under federal and state laws, rules and regulations,
and such records identify with specificity all accounts subject to backup with-
holding under the Internal Revenue Code.
All federal, state and local payroll, withholding, property, sales,
use and transfer taxes, if any, which are due and payable by Seller relating to
the operation of the Branch on or prior to the Closing Date shall be paid in
full as of the Closing Date or Seller shall have made appropriate provision for
such payment in accordance with ordinary business practices. Any claims for
refunds of taxes which have been paid by Seller shall remain the property of
Seller.
2.08 IRA Account Documentation. The form of Individual Retirement
Custodial Account Agreement for IRAs, and the related Individual Retirement
Account Disclosure Statement attached hereto as Exhibit 2.08, constitute the
form of the documents establishing the trustee or custodial arrangement in
connection with all IRAs maintained at the Branch.
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2.09 Labor Relations. No employee at the Branch is represented, for
purposes of collective bargaining, by a labor organization of any type. Seller
is unaware of any efforts during the past three years to unionize or organize
any employees at the Branch and no claim related to employees at the Branch
under the Fair Labor Standards Act, National Labor Relations Act, Civil Rights
of 1964, Walsh-Healy Act, Davis Bacon Act, Civil Rights of Act of 1866, Age
Discrimination in Employment Act, Equal Pay Act of 1963, Executive Order No.
11246, Federal Unemployment Tax Act, Vietnam Era Veterans Readjustment Act,
Occupational Safety and Health Act, Americans with Disabilities Act, Family
Medical Leave Act, or any other federal, state or local employment related law,
order, ordinance or regulation, no unfair labor practice, discrimination or
wage-and-hour claim is pending or, to the best of Seller's knowledge, threatened
against or with respect to Seller.
2.10 Environmental. (i) The Branch is in material compliance with
all applicable Environmental Laws (as defined in this Section) and has obtained
and is in compliance with all permits, licenses and other authorizations
(individually a "Permit", and collectively "Permits") required under any
Environmental Law. To the knowledge of Seller, there is no past or present
event, condition or circumstance relating to compliance with Environmental Laws
that could (1) materially interfere with the conduct of the business of the
Branch in the manner now conducted, (2) constitute a violation of any Environ-
mental Law or (3) which could have a material adverse effect upon the Branch,
the Assets (as hereinafter defined for purposes of this Section 2.10) or the
Liabilities; (ii) Seller does not currently lease, operate, own or exercise
managerial functions at, nor has it formerly leased, operated, owned or exer-
cised managerial functions at, any facility or real property in connection with
its operation of the Branch that is subject to any actual, or to the knowledge
of Seller, threatened proceeding under any Environmental Law; (iii) there are no
proceedings pending or, to the knowledge of Seller, threatened against Seller
with respect to the Branch or the Assets under any Environmental Law or relating
to the release, threatened release, management, treatment, storage or disposal
of, or exposure to Hazardous Substances, and Seller has not received any notice
(whether from any regulatory body or private person) of any claim under or
violation of, or potential or threatened violation of, any Environmental Law;
(iv) there are no actions or proceedings pending or, to the knowledge of Seller,
threatened under any Environmental Law involving the release or threat of
release of any Hazardous Substances (as defined in this Section) at or on any
property constituting the Branch or the Assets; (v) there is no Controlled
Property for which Seller is or was required to obtain or have any Permit under
an Environmental Law to construct, demolish, renovate, occupy, operate or use
such Controlled Property or any portion of it; (vi) Seller has not generated any
Hazardous Substances at the Branch for which it was required under an Environ-
mental Law to execute any waste disposal manifest or receipt, nor has Seller
disposed, treated or arranged for the disposal of any Hazardous Substances;
(vii) there has been no release of Hazardous Substances in, under or on any
Controlled Property, or to the knowledge of Seller on any Collateral Property,
in violation of any Environmental Laws or which would require remediation or any
report or notification to any governmental or regulatory authority; (viii) there
are no underground or above ground storage tanks on or under any Controlled
Property, or to the knowledge of Seller on any Collateral Property, which are
not in compliance with Environmental Laws, including but not limited to any
requirements to upgrade, replace or close tanks that do not meet EPA's technical
standards for protection against spills, overfills and corrosion, and any
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Controlled Property, or to the knowledge of Seller on any Collateral Property,
previously containing such tanks has been remediated in compliance with all
Environmental Laws; (ix) there is no asbestos containing material or poly-
chlorinated biphenyls on any Controlled Property (as defined below) or, to the
knowledge of Seller, any Collateral Property (as defined below); and (x) Seller
is in material compliance with the directives of any governmental authority with
jurisdiction over Seller, that directs financial institutions to implement
programs to reduce the potential for financial institutions to incur liability
under, or to assess the compliance of borrowers or Collateral Property with,
Environmental Laws.
For purposes of this Section 2.10, Property means (1) the premises
associated with the Branch and any property (whether real or personal) forming
part of the Assets other than any property held as security for a loan, which is
expressly excluded from the definition of Assets for purposes of this Section
2.10 ("Controlled Property") and (2) property now held as security for a Loan or
currently proposed as security for a Loan ("Collateral Property").
"Hazardous Substances" means any pollutant, contaminant, petroleum or
petroleum product, dangerous or toxic substance, hazardous or extremely
hazardous substance or chemical, solid or hazardous waste, special,
liquid, industrial or other waste, hazardous material, or other
material, substance or agent (whether in solid, liquid or gaseous form)
that is regulated as of the date hereof in connection with the
protection of the Environment or that is alleged by third parties or
found to pose a threat to the safety or health of humans.
"Environmental Laws" shall mean any federal, state, or local law
(including common law), rule, regulation, order, ordinance, writ,
judgment, injunction, decree, or determination having the force of law
(including, without limitation, the Clean Air Act, the Toxic Substance
Control Act, the Clean Water Act, the Comprehensive Environmental
Response, Compensation and Liability Act, and the Resource Conservation
and Recovery Act, all as amended, or their state counterparts or
analogues) as of the date hereof relating to (i) pollution,
contamination or destruction of, or loss of or injury to, or any
adverse effect upon, the air, drinking water supply, surface water,
ground water, land or other natural resource (collectively, the
"Environment"); (ii) the protection, cleanup or restoration of, or
removal, remediation or mitigation of conditions affecting, the
Environment; (iii) the release, discharge, emission, generation,
handling, transportation, use, processing, treatment, storage, disposal
or other management of, or exposure to, any Hazardous Substance; (iv)
the regulation of the manufacture, processing, distribution or use of
chemical substances for commercial purposes; (v) noise, electromagnetic
forces, non-ionizing radiation or radioactive materials, by-products or
waste; (vi) the protection of the safety or health of humans,
including, but not limited to, exposure to Hazardous Substances.
2.11 Deposits. Attached hereto as Exhibit 1.02(a) is a true and
accurate schedule of all Deposits (including IRAs), and related information,
which are domiciled at the Branch, prepared as of a date within 10 days prior to
the date of this Agreement (which Exhibit shall be updated at and as of the
Closing Date and, as updated, shall be true and accurate as of such date). The
Deposits are insured by the Federal Deposit Insurance Corporation ("FDIC") Bank
Insurance Fund to applicable legal limits. The Deposits were solicited and
currently exist in material compliance with all applicable requirements of
federal, state and local laws and regulations promulgated thereunder (for
purposes of this clause, a Deposit would not be in material compliance if the
noncompliance subjects the depository institution to any penalty or liability).
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2.12 Branch Lease.
(a) The Lease is valid, binding and enforceable in accordance with
its terms subject as to enforcement to bankruptcy, insolvency, reorganization,
moratorium, laws governing fraudulent conveyance or equitable subordination
principles and other laws of general applicability relating to or affecting
creditors' rights generally and to general principles of equity. Neither Seller
nor, to Seller's knowledge, the lessor under the Lease is in default under, and
no event has occurred which, with notice of the lapse of time or both would
constitute a default under the Lease. Seller has not previously been given
notice of any event of default, or event or condition which, with the giving of
notice or the lapse of time, or both, would constitute a default under the
Lease. Seller has delivered a true and correct copy of the Lease to Purchaser.
The Lease is the only agreement between the Seller and the landlord thereunder
relating to the Real Estate Interest. The Lease represents the entire agreement
between the landlord thereunder and the Seller with respect to the Branch. All
payments of rent or other monies required to be paid by Seller pursuant to the
Lease have been paid. The terms of the Lease permit Seller to use the premises
subject to the Lease as an office of a bank.
(b) Seller is not entitled to, and has made no agreements with the
landlord under the Lease, or landlord's agents, employees or representatives,
concerning free rent, partial rent, rebates of rent payments, credit, offset or
reduction of rent, or other type of rental concession including, without
limitation, Lease support payments or Lease buyouts, except as previously dis-
closed to Purchaser in writing.
2.13 Loans. Attached hereto as Exhibits 1.01(c) and 1.01(d) are true
and accurate schedules of all Loans and Overdraft Protection Loans, respect-
ively, including accrued and unpaid interest thereon, computed as of a date
within 10 days prior to the date of this Agreement (which exhibits shall be up-
dated at and as of the Closing Date and, as updated, shall be true and accurate
as of such date).
(a) Each Loan and Overdraft Protection Loan included in the Assets
was made or acquired by Seller in the ordinary course of business at the time
such Loan or Overdraft Protection Loan was made or acquired.
(b) None of the Loans or Overdraft Protection Loans included in the
Assets is presently serviced by third parties, and there are no obligations,
agreements or understandings whatsoever that could result in any such Loan or
Overdraft Protection Loan becoming subject to any such third party servicing.
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(c) There are no misrepresentations of material facts made by
officers or employees of Seller in the credit files relating to the Loans and
Overdraft Protection Loans, provided that the term "facts" shall not include
judgments or opinions of such officers or employees which were in good faith or
information which is reflective of information supplied by the borrower.
(d) With respect to each Loan and each Overdraft Protection Loan
originated by Seller and being transferred to Purchaser and to the knowledge of
Seller with respect to each loan purchased by Seller and being transferred to
Purchaser:
(i) Such Loan or Overdraft Protection Loan was solicited, originated
and currently exists in material compliance with all applicable
requirements of federal, state and local laws and regulations
promulgated thereunder (for purposes of this clause (i), a Loan
or Overdraft Protection Loan would not be in material compliance
if the noncompliance adversely affects the value or collect-
ibility of the Loan or Overdraft Protection Loan or subjects the
lender to any penalty or liability);
(ii) Each note, agreement or other instrument evidencing a Loan or
Overdraft Protection Loan and any related security agreement or
instrument (including, without limitation, any guaranty or
similar instrument) constitutes a valid, legal and binding
obligation of the obligor thereunder, enforceable in accordance
with its terms, subject as to enforcement to bankruptcy, in-
solvency, reorganization, moratorium, laws governing fraudulent
conveyance or equitable subordination principles and other laws
of general applicability relating to or affecting creditors'
rights generally and to general principles of equity; and all
actions necessary to perfect any related security interest have
been duly taken;
(iii)There has been no material modification to or material waiver of
the terms of the applicable loan documents except as evidenced
in documents executed by the parties and included in such loan
documents; and
(iv) To Seller's knowledge (as defined in Section 9.10 hereof), there
is no valid claim or valid defense to the enforcement of such
Loans and Overdraft Protection Loans, and Seller has not taken
or failed to take any action that would entitle any obligor or
other party to assert successfully any claim against Seller or
Purchaser (including without limitation any right not to repay
any such obligation or any part thereof).
2.14 Personal Property. Exhibit 1.01(b) is a true and accurate
schedule of the categories of Personal Property owned by Seller at the Branch,
as of May 5, 2000, and describing any security interest therein or lien thereon.
Seller represents that the Personal Property is in good condition and repair,
ordinary wear and tear excepted.
2.15 FIRPTA. Seller is not a foreign person within the meaning of
the Internal Revenue Code Section 1445.
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2.16 Books and Records. The books and records of Seller relating to
the Branch, the Liabilities and the Assets are complete and correct in all
material respects and have been maintained in accordance with good business
practice. Such records have been prepared, to the extent applicable, in
accordance with generally accepted accounting principles consistently applied
throughout the periods involved. The records fairly present the financial
position of the Branch as of the date thereof, and the results of operations for
the Branch for the periods referred to therein. Seller does not have any
liabilities (absolute or contingent) which are material to the Branch, the
Assets or the Liabilities that are not reflected or provided for in the records.
2.17 Absence of Certain Changes and Events. Since May 5, 2000,
Seller has not:
(a) suffered any material adverse change with respect to the Assets
or the Liabilities;
(b) except in the ordinary course of business and consistent with
prudent banking practices, (A) sold, transferred, leased, pledged, mortgaged, or
otherwise encumbered or (except for this Agreement) agreed to sell, transfer,
lease, pledge, mortgage or otherwise encumber, any of the Assets or rights with
respect thereto, or (B) canceled, waived, compromised or agreed to cancel, waive
or compromise any debts, claims or rights with respect to the Assets or the
Liabilities;
(c) made or permitted any amendment, termination or lapse of any
contract, lease, agreement, license or permit, if such amendment, termination or
lapse (individually or in the aggregate) would reasonably be expected to have a
material adverse effect on the Assets or the Liabilities;
(d) made any change in any method of management or operation of the
Branch not in the ordinary course of business or any accounting change;
(e) granted any general increase in the compensation of its officers
or employees of the Branch (including any increase pursuant to any bonus,
pension, profit sharing or other plan or commitment), except for normal periodic
increases made pursuant to established compensation policies of Seller applied
on a basis consistent with that of the prior year, other than increases and
payments necessary, in Seller's reasonable discretion, to maintain and preserve
the operation of the Branch, all of which increases that relate to employees
with respect to the Branch shall be promptly disclosed in writing to Purchaser
by Seller;
(f) caused the Branch to transfer to Seller's other operations any
deposits other than deposits securing loans made by Seller which are not Loans,
except in the ordinary course of business at the unsolicited request of deposit-
ors, or caused any of Seller's other operations to transfer to the Branch any
deposits, except in the ordinary course of business at the unsolicited request
of depositors;
(g) made any change to its customary policies for setting rates on
deposits offered at the Branch, including any increase in interest rates paid
unless (and only to the extent that) there has been a general increase in market
interest rates as reflected by an increase in the market yield of U.S. Treasury
securities of comparable maturity; or
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(h) entered into any other transaction or conducted its affairs, in
either case related to the Assets or the Liabilities, other than in the ordinary
course of business and consistent with prudent banking practices except as
contemplated by this Agreement.
2.18 Closing Date. Each representation, warranty, covenant and
agreement of Seller set forth in this Agreement shall be deemed to be made on
and as of the date hereof and as of the Closing Date.
2.19 Representations Not Misleading. No representation or warranty
by the Seller contained in this Agreement, nor in any statement, exhibit or
schedule furnished to the Purchaser by the Seller under and pursuant to, or in
anticipation of or in connection with, this Agreement contains or will contain
on the Closing Date any untrue statement of a material fact or omits or will
omit to state a material fact necessary to make the statements contained herein
or therein, in light of the circumstances under which it was or will be made,
not misleading.
2.20 Survival of Representations and Warranties. The representations
and warranties of Seller hereunder shall survive the Closing for a period of two
years.
SECTION 3
Representations and Warranties of Purchaser
Purchaser hereby represents and warrants to Seller as follows:
3.01 Corporate Organization and Related Matters. Purchaser is a
nationally chartered commercial bank duly organized, validly existing and in
good standing under the laws of the United States, with the corporate power and
authority to exercise commercial banking powers and to engage in all other
businesses in which it engages and to acquire the Assets and assume the Liabil-
ities subject to regulatory approval. Purchaser has the requisite corporate
power and authority to enter into this Agreement and to consummate the trans-
actions contemplated hereby. Neither the execution and delivery of this
Agreement nor the consummation of the transactions contemplated hereby violate,
conflict with or constitute a breach of any provision of the articles of
association or bylaws of Purchaser or any agreement or instrument to which it is
a party or by which its assets are bound, or (subject to any consent required to
be obtained hereunder) any law, rule or regulation or any order or decree
applicable by its terms specifically to Purchaser or its assets.
3.02 Execution of Agreement; Enforceability. The execution and
delivery of this Agreement and each of the documents and instruments
contemplated hereby, and the transactions contemplated hereby, have been duly
authorized by all necessary corporate action on the part of Purchaser. This
Agreement constitutes, and such documents and instruments will constitute,
legal, valid and binding obligations of Purchaser, enforceable in accordance
with their respective terms, subject to bankruptcy, insolvency, reorganization,
moratorium and similar laws relating to the rights and remedies of creditors, as
well as to general principles of equity.
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3.03 Actions, Suits and Proceedings. There are no actions, suits or
proceedings pending or, to the knowledge of Purchaser, threatened against or
affecting Purchaser, and to the knowledge of Purchaser, no basis therefor, which
if decided adversely to Purchaser would have a material adverse effect on the
ability or authority of Purchaser to consummate the transactions contemplated by
this Agreement.
3.04 Agreements with Governmental Authorities. Purchaser is not a
party to any agreement, understanding, consent decree or other arrangement with
any federal or state regulatory or other agency charged with supervising any
portion of the banking industry which would prohibit, or otherwise have a
material adverse effect on Purchaser's authority or ability to consummate, the
transactions contemplated by this Agreement. Purchaser has not received notice
from any federal or state governmental agency indicating that it would oppose or
not grant or issue its consent or approval, if required, with respect to the
transaction contemplated by this Agreement.
3.05 No Brokers or Agents. Purchaser has not retained or otherwise
engaged any broker, finder or other person or agent or agreed to pay any fee or
commission to any agent, broker or other person for or on account of this
Agreement or the transactions contemplated hereby, other than Scott & String-
fellow, Inc., which will receive a fee paid by Purchaser at Closing.
3.06 Closing Date. Each representation, warranty, covenant and
agreement of Purchaser set forth in this Agreement shall be deemed to be made on
and as of the date hereof and as of the Closing Date.
3.07 Representations Not Misleading. No representation or warranty by
the Purchaser contained in this Agreement, nor in any statement, exhibit or
schedule furnished to the Seller by the Purchaser under and pursuant to, or in
anticipation of or in connection with, this Agreement contains or will contain
on the Closing Date any untrue statement of a material fact or omits or will
omit to state a material fact necessary to make the statements contained herein
or therein, in light of the circumstances under which it was or will be made,
not misleading.
3.08 Survival of Representations and Warranties. The representations
and warranties of Purchaser hereunder shall survive the Closing for a period of
two years.
SECTION 4
Conduct of Business Pending Closing Date
Until the earlier of the Closing or the termination of the Agreement in
accordance with its terms, the following provisions shall apply:
4.01 Ordinary Course of Business. Seller shall carry on its business
in a manner consistent with past practices and shall not, with respect to its
business and operations at the Branch or in connection with the Assets or
Liabilities, engage in any activities or transactions outside the ordinary
course of business, except with the consent of Purchaser or in connection with
the transactions contemplated hereby.
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4.02 Preservation of Business. Seller shall exercise all reasonable
efforts to preserve its business operations as conducted in its Branch, to
preserve for Purchaser the good will of its customers and others doing business
with Seller whose deposits constitute portions of the Liabilities, and to
exercise reasonable efforts to cooperate with and assist Purchaser in assuring
the orderly transition of such business from Seller to Purchaser.
4.03 Indebtedness and Collateral Obligations. Seller shall not incur
any indebtedness secured by any of the Assets or otherwise encumber any of the
Assets, and Seller shall not enter into or assume any material contract or
obligation affecting the Assets and Liabilities without first obtaining
Purchaser's written consent.
4.04 Certain Actions. Seller shall not take any action or omit to
take any action which would make any representation or warranty contained in
Section 2 hereof untrue in any material respect. Purchaser shall not take any
action or omit to take any action which would make any representation or
warranty contained in Section 3 hereof untrue in any material respect.
SECTION 5
Covenants
5.01 No Offers or Negotiations. Neither Seller nor its respective
subsidiaries and affiliates will, directly or indirectly, through any officer,
director, stockholder, agent or other person, negotiate, solicit, initiate or
encourage submission of proposals or offers from any other persons (including
without limitation any of its or their officers, directors, employees or
significant stockholders) relating to any acquisition or purchase of any portion
of the Assets or Liabilities, or any equity interest in Seller or any business
interest in Seller or any subsidiary which would impair or otherwise interfere
with the consummation of the transactions contemplated hereby. Seller shall
promptly cease and cause to be terminated any current negotiations conducted
with any parties other than Purchaser with respect to the acquisition or
purchase of any portion of the Assets or Liabilities, or any equity interest in
Seller or any business interest in Seller or any subsidiary which would impair
or otherwise interfere with the consummation of the transactions contemplated
hereby, and shall request the immediate return of any and all information
supplied to any such party in connection therewith. Any consent heretofore
granted by Seller or its affiliates to permit persons to make any such proposal
(other than consents given to Purchaser) shall immediately be withdrawn and no
further consents, waivers or amendments shall be granted by Seller.
5.02 Access to Books and Records. Seller shall furnish Purchaser
with such additional financial and other data and information regarding the
Assets and Liabilities as Purchaser reasonably may request from time to time,
including without limitation any information required for inclusion in all
governmental applications necessary to effect the transactions contemplated
hereby. Upon reasonable notice, Seller shall permit officers and authorized
representatives of Purchaser access to inspect the Branch during normal business
hours or at such other time mutually agreed by both parties and permit Purchaser
to make or cause to be made such reasonable investigation of information and
materials relating to the financial condition of the Branch, including, if any,
general and subsidiary ledgers, deposit records and any other information
concerning the business, property and legal questions concerning the Branch as
Purchaser reasonably deems necessary or advisable.
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5.03 Confidentiality. Purchaser will, and will cause its officers,
directors, employees and agents to, hold in strictest confidence and not
disclose to any other person or entity without the prior written consent of
Seller, all information received by Purchaser from or with respect to Seller in
connection with this Agreement and the transaction contemplated hereby, except
such information as may otherwise be publicly available or except such in-
formation as may be required to be disclosed by applicable law in connection
with governmental applications or otherwise. Likewise, the Seller will, and will
cause its officers, directors, employees and agents to, hold information
concerning the Purchaser in strict confidence. These confidentiality obligations
shall survive the termination of this Agreement. Notwithstanding the foregoing,
Purchaser and Seller agree that they will jointly prepare and issue a press
release announcing that Purchaser will be acquiring the Assets and assuming the
Deposits pursuant to this Agreement, which press release shall be mutually
agreeable to the Purchaser and Seller.
5.04 Applications, Consents and Approvals.
(a) Purchaser shall prepare and file all applications, as required by
law, with the appropriate federal and state banking regulatory authorities for
approval to purchase the Assets and to assume the Liabilities of and to
establish a branch at the location of the Branch of Seller not later than twenty
one (21) days following the execution of this Agreement and to effect in all
other respects the transaction contemplated hereby.
(b) Seller shall use its best efforts (i) to assist Purchaser in
preparing and filing all applications as required by law, to the appropriate
federal and state regulatory authorities; and (ii) to obtain any further
consents or authorizations to consummate in all other respects the transactions
contemplated hereby.
(c) Purchaser and Seller shall comply with the normal and usual
requirements imposed by regulatory authorities applicable to effectuate
transactions such as the transaction contemplated hereby, shall use their
respective good faith efforts to obtain any required permission of such
regulatory authorities and to provide to each other any additional assistance
that would expedite preparations for the sale of the Assets and the assumption
of Liabilities to Purchaser. Purchaser shall make draft copies of its
applications and filings available to Seller and its counsel on request
(excluding confidential Purchaser information), shall process all applications
in a diligent manner and on a priority basis, and shall provide Seller with
copies of all materials filed with regulatory authorities or other third parties
in connection with the transactions contemplated hereby (excluding confidential
Purchaser information). Purchaser and Seller shall promptly notify each other of
the scheduling of any meeting with federal or state regulatory authorities
concerning the subject matter hereof and shall use their best efforts to permit
representatives of the other or their respective counsel to attend any such
meetings.
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(d) Seller will use its best efforts to obtain promptly and diligently
all consents and approvals of third parties to the transactions contemplated
hereby, including, but not limited to the consent of the landlord under the
Lease to the assignment of the Lease to Purchaser.
5.05 Reports to Purchaser. Until the earliest to occur of the Closing
Date or the termination of this Agreement, Seller shall provide to Purchaser a
monthly Branch deposit summary involving the Deposits and such other reports and
information as Purchaser reasonably may request from time to time concerning the
Assets and Liabilities and the business and operations of Seller at its Branch,
provided that Seller shall not be required to take any action which would be
unduly disruptive of its business and activities. Notwithstanding the foregoing,
Seller shall promptly notify Purchaser of any material adverse change in the
condition of the Assets or Liabilities.
5.06 Operational and Data Processing Conversion Matters. Seller shall
cooperate with Purchaser's reasonable requests in order to accommodate any and
all requirements for Purchaser to convert the operations of the Branch from a
branch of Seller to a branch of Purchaser, including without limitation any
requirements for the conversion of data processing to Purchaser's systems.
Seller covenants that it will assist Purchaser with Purchaser's reasonable
requests following the Closing in the event that Purchaser is unable to complete
its requirements prior thereto. Except as otherwise provided herein, all costs
and expenses of the data processing and other similar conversions to Purchaser's
systems shall be borne by Purchaser.
5.07 Further Assurances. Seller agrees to provide such bills of sale,
acknowledgments and other instruments of conveyance and transfer as in the
reasonable judgment of Purchaser shall be necessary and appropriate to vest in
Purchaser the legal and equitable title to the Assets, free and clear of all
liens and encumbrances. Purchaser shall be responsible for the cost of all title
examinations, titling fees and surveys relating to the Real Estate Interests.
5.08 Allocation of Purchase Price. The purchase price of the Assets
and Liabilities hereunder shall be allocated on an allocation schedule to be
agreed to by Purchaser and Seller prior to the Closing. Within 60 days of the
Closing, Seller shall prepare an IRS Form 8594 reflecting the allocation of the
purchase price as agreed to by Seller and Purchaser and shall submit such Form
8594 to Purchaser for review. Purchaser shall inform Seller in writing of any
disagreements with the amounts allocated on Form 8594 within 15 days after
receipt. The amounts shown on Form 8594 shall become final should Purchaser fail
to inform Seller within 15 days. Purchaser and Seller agree that they will not
take, nor will they permit any affiliated person to take, for income tax report-
ing purposes a position inconsistent with such allocation.
5.09 Insurance. After the close of business on the Closing Date,
Seller will discontinue its insurance coverage maintained in connection with the
Branch and the activities conducted therein. Purchaser shall be responsible for
all insurance protection for the Branch premises and the activities conducted
therein immediately following the close of business on the Closing Date. Pending
the Closing, risk of loss shall be the responsibility of Seller.
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SECTION 6
Conditions to Obligations of Purchaser
The obligations of Purchaser to complete the transaction provided for in this
Agreement are subject to and conditioned upon the fulfillment, on or before the
Closing Date, of each of the following conditions, unless waived by Purchaser to
the extent permitted by law:
6.01 Representations and Warranties True. The representations and
warranties of the Seller shall be true and correct in all material respects when
made and shall be true and correct in all material respects at and as of the
Closing Date as though such representations and warranties were made at and as
of such time, except for any changes permitted by the terms hereof or consented
to by Purchaser.
6.02 Obligations Performed by Seller. Seller shall have performed and
complied in all material respects with all obligations and agreements required
by this Agreement to be performed or complied with by it prior to or at the
Closing Date.
6.03 No Adverse Litigation. As of the Closing Date, no action, suit
or proceeding shall be pending or threatened against Seller or Purchaser, or the
Assets and Liabilities, which reasonably could be expected to (a) materially and
adversely affect the business and operations of Seller at its Branch or the
Assets and Liabilities, or (b) materially and adversely affect the transactions
contemplated by this Agreement.
6.04 Compliance Certificate. Seller shall have delivered to Purchaser
a certificate of an authorized officer, dated the Closing Date, certifying to
the fulfillment of each of the foregoing conditions.
6.05 Certain Regulatory Approvals. Purchaser and Seller shall have
received from the appropriate federal and state regulatory authorities all
approvals necessary for the consummation of the transactions contemplated hereby
and for Purchaser to operate a branch office at the location of Seller's Branch,
such approvals shall be in full force and effect and all waiting periods imposed
by law or regulation shall have expired, unless such approval imposes any
condition or requirement which in the judgment of Purchaser would adversely
impact the economic or business benefits of the transactions contemplated by the
Agreement or otherwise would in the judgment of the Purchaser be so burdensome
as to render inadvisable the consummation of the transactions contemplated by
the Agreement.
6.06 Capital. On a pro forma basis giving effect to the consummation
of the purchase and assumption transactions provided for in this Agreement, the
Purchaser will be "well-capitalized" as defined for bank regulatory purposes and
in compliance with all capital requirements, standards and ratios required by
each state or federal bank or holding company regulator with jurisdiction over
the Purchaser, its holding company and affiliates.
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6.07 Deposits.
(a) The total Deposits to be assumed by Purchaser shall be $56,000,000,
plus or minus 2%;
(b) Certificates of deposit shall constitute no more than 60% of the
Deposits;
(c) At Closing, Seller shall fully disclose and identify, through
transfer of appropriate records or otherwise, all Deposit accounts on which
holds have been placed which contain uncollected balances, and stop payment
orders, and the amounts thereof.
6.08 Lease Agreement. The consent of the landlord under the Lease to
the assignment by Seller of the Lease to Purchaser shall have been obtained
without the imposition of conditions Purchaser deems unduly burdensome or
unreasonable. Such consent shall be in form and substance satisfactory to
Purchaser in the exercise of its sole discretion, and shall include landlord's
representation and warranty to Purchaser that the Lease is a valid and binding
obligation of landlord.
SECTION 7
Conditions to Obligations of Seller
The obligations of Seller to complete the transaction provided for in
this Agreement are subject to and conditioned upon the fulfillment, on or before
the Closing Date, of each of the following conditions, unless waived by Seller
to the extent permitted by law:
7.01 Representations and Warranties True. The representations and
warranties of the Purchaser shall be true and correct in all material respects
when made and shall be true and correct in all material respects at and as of
the Closing Date as though such representations and warranties were made at and
as of such time, except for any changes permitted by the terms hereof or
consented to by Seller.
7.02 Obligations Performed by Purchaser. Purchaser shall have
performed and complied in all material respects with all obligations and
agreements required by this Agreement to be performed or complied with by it
prior to or at the Closing Date.
7.03 No Adverse Litigation. As of the Closing Date, no action, suit
or proceeding shall be pending or threatened against Seller or Purchaser, or the
Assets and Liabilities, which reasonably could be expected to (a) materially and
adversely affect the business and operations of Seller at its Branch or the
Assets and Liabilities, or (b) materially and adversely affect the transaction
contemplated by this Agreement.
7.04 Compliance Certificate. Purchaser shall have delivered to Seller
a certificate of an authorized officer, dated the Closing Date, certifying to
the fulfillment of each of the foregoing conditions.
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7.05 Regulatory and Other Approvals. Purchaser and Seller shall
have received all governmental approvals (which shall be unconditional except
for such standard conditions as are customarily imposed on such transactions)
necessary for the consummation of the transactions contemplated hereby, and all
waiting periods imposed by law or regulation shall have expired.
7.06 Lease Agreement The consent of the landlord under the Lease to
the assignment by Seller of the Lease to Purchaser shall have been obtained in
form and substance satisfactory to Purchaser in the exercise of its sole
discretion.
SECTION 8
Termination
8.01 Methods of Termination. This Agreement may be terminated in any
of the following ways:
(a) at any time on or before the Closing Date by the mutual consent in
writing of Seller and Purchaser;
(b) on the Closing Date by Purchaser if the conditions set forth in
Section 6 of this Agreement shall not have been met by Seller or waived in
writing by Purchaser, provided, however, that Purchaser will not have the right
to terminate this Agreement under this Section 8.01(b) if the failure of Seller
to satisfy a condition set forth in Section 6 results primarily as a result of
the Purchaser's breach of any representation, warranty or covenant of Purchaser
set forth in this Agreement;
(c) on the Closing Date by Seller if the conditions set forth in
Section 7 of this Agreement shall not have been met by Purchaser or waived in
writing by Seller, provided, however, that Seller will not have the right to
terminate this Agreement under this Section 8.01(c) if the failure of Purchaser
to satisfy a condition set forth in Section 7 results primarily as a result of
the Seller's breach of any representation, warranty or covenant of Seller set
forth in this Agreement;
(d) at any time on or before the Closing Date by Purchaser if Seller
shall have been in breach of any representation or warranty in any material
respect (as if such representation or warranty had been made on and as of the
date hereof and on the date of the notice of breach referred to below), or in
breach of any covenant, undertaking or obligation contained herein, and such
breach has not been cured by the earlier of thirty days after the giving of
notice to the breaching party or the Closing Date;
(e) at any time on or before the Closing Date by Seller if Purchaser
shall have been in breach of any representation or warranty in any material
respect (as if such representation or warranty had been made on and as of the
date hereof and on the date of the notice of breach referred to below), or in
breach of any covenant, undertaking or obligation contained herein, and such
breach has not been cured by the earlier of thirty days after the giving of
notice to the breaching party or the Closing Date;
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(f) by Seller or Purchaser in writing at any time after any of the
regulatory authorities has denied, by final, non-appealable order, any
application by Purchaser for approval of the transactions contemplated hereby;
(g) by Purchaser in writing at any time after 60 days from the date
hereof, if by that date the landlord on the Lease shall not have consented in
writing to the assignment to, and assumption by, Purchaser of the Lease under
the current terms and conditions applicable to Seller;
(h) by Purchaser or Seller in writing if the transactions contemplated
hereby are not consummated on or before September 1, 2000, provided that if
consummation of the transaction is postponed beyond this date solely due to
failure to receive regulatory approvals, Purchaser or Seller may extend this
date to November 1, 2000 by notice to the other;
8.02 Procedure Upon Termination. In the event of termination
pursuant to Section 8.01 hereof, written notice shall forthwith be given to the
other parties, and this Agreement shall terminate upon receipt of such notice
immediately unless an extension is consented to by the party having the right to
terminate. If this Agreement is terminated as provided herein, each party will
return all documents, work papers and other materials of the other parties
relating to this transaction, whether obtained before or after the execution of
this Agreement, to the parties furnishing the same, and all information received
by any party hereto with respect to the business of another party (other than
information which is a matter of public knowledge or which has heretofore been
or is hereafter published in any publication for public distribution or filed as
public information with any governmental authority) shall not at any time be
used for any business purpose by such party or disclosed by such party to third
persons. Nothing herein shall be deemed to limit or prejudice in any way any
remedy which any party may have against another party for a breach of this
Agreement.
SECTION 9
Miscellaneous Provisions
9.01 Entire Agreement. This Agreement, the documents and instruments
to be executed hereunder and the exhibits and schedules hereto constitute the
entire Agreement among the parties hereto, and supersedes all prior agreements
and understandings, both written and oral, among the parties with respect to the
subject matter hereof. No supplement, amendment, alteration or modification of
this Agreement shall be binding unless executed in writing by the parties
hereto. Because of the confidential nature of the information contained in
certain schedules and exhibits hereto, it is agreed and understood that the
schedules and exhibits shall not be filed as a part of any public filings,
except as specifically required by law, rule or regulation, and that Purchaser
and Seller shall (subject to the valid orders of any court or governmental body
and except as may be required in order to obtain legal or equitable relief for a
breach hereof) maintain the information contained in such exhibits and schedules
as confidential.
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9.02 Employees.
(a) Purchaser may, but shall be under no obligation to, extend offers
of employment as of the Closing Date to Seller's employees at the Branch. Seller
hereby agrees to transfer to Purchaser, promptly upon receiving a written
consent from such employees, a copy of each such employee's most recent
performance review and to permit Purchaser to review and make notes from each
such employee's entire personnel and employment file.
(b) Such employees of Seller who accept offers of employment by
Purchaser ("Retained Employees") shall be employed upon terms and conditions of
employment determined solely by Purchaser's policies, procedures and programs;
provided, however, that for purposes of Purchaser's various employee benefit
plans following the Closing Date, time of service with the Seller will be
credited to Retained Employees for purposes of determining and calculating their
eligibility for and vesting to the greatest extent permitted under Purchaser's
plans and all preexisting conditions of Retained Employees will be waived by
Purchaser to the greatest extent permitted under Purchaser's plans. Each
Retained Employee shall be permitted, to the extent permitted by law and the
provisions of Purchaser's plan, to participate in Purchaser's 401(k) plan and to
transfer to Purchaser's plan, amounts due to them under Seller's plan.
(c) Seller agrees that it shall render Purchaser every assistance in
soliciting certain of its Branch employees to accept employment with Purchaser,
including but not limited to permitting Purchaser to immediately contact and
solicit such employees. Purchaser acknowledges that Seller has made no
assurances to Purchaser with respect to such employees' accepting positions with
Purchaser and incurs no liability to Purchaser in rendering the assistance
referred to herein.
(d) Purchaser shall have no liability to any of Seller's current
employees for any accrued wages, sick leave, vacation time, pension obligations
or any other employee benefits. Purchaser will have no liability and will not
assume obligations under any "employee benefit plan" (as such term is defined in
the Employee Retirement Security Act of 1974, as amended) of Seller or any other
obligations (including, without limitation, severance obligations) of Seller to
the employees of the Branch. Seller will be responsible for fulfilling, and
resolving any disputes concerning, its liabilities or obligations (including,
without limitation, severance obligations) to the employees at the Branch under
any such employee benefit plan or otherwise. All wages and salaries, workers'
compensation payments, vacation pay and social security and unemployment taxes
of Branch employees shall be paid by Seller for the period to and including the
Closing Date. The obligation of Seller pursuant to this Section shall survive
the Closing.
9.03 Consents. Whenever the consent of a party is required under
this Agreement, such consent shall not be unreasonably withheld.
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9.04 Waiver. No waiver of any provision shall be deemed or shall
constitute a waiver of any other provision hereof nor shall such waiver
constitute a continuing waiver unless otherwise expressly provided.
9.05 Captions and Headings. The captions and headings contained
herein are for convenience of reference only and shall not be considered a part
of or affect the construction or interpretation of this Agreement.
9.06 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the Commonwealth of Virginia and, to
the extent applicable, federal law.
9.07 Notices. Any notice or communication required by this Agreement
shall be given in writing by certified mail, return receipt requested, postage
prepaid, or by hand delivery, as follows:
If to Seller to: With a copy to:
James M. Miller, President T. Richard Litton, Jr., Esq.
Northern Virginia Division Kaufman & Canoles
Resource Bank 1 Commercial Place, Suite 2000
500 Grove St., Suite 300 Norfolk, VA 223510
Herndon, VA 20170
If to Purchaser, to: With a copy to:
Joseph S. Bracewell, President Waverly Vest, Esquire
Century National Bank Bracewell & Patterson, L.L.P.
1275 Pennsylvania Avenue, NW 711 Louisiana, Suite 2900
Washington, DC 20004 Houston, TX 77002-2781
Such notice shall be deemed to have been given on the date of such mailing or
hand delivery, provided that notices of changes of address shall be effective
only upon actual receipt.
9.08 Assignment. This Agreement and all of the provisions thereof
shall be binding upon, and shall inure to the benefit of, the parties hereto and
their respective successors and assigns, provided that neither this Agreement
nor any of the rights or obligations hereunder shall be assigned prior to the
Closing Date by any party hereto without the prior written consent of the other
parties.
9.09 Expenses. Except as otherwise specifically provided herein,
each party hereto shall bear and pay all costs and expenses incurred by it or on
its behalf in connection with this Agreement and the transactions contemplated
hereunder. Notwithstanding the foregoing, if either party files any regulatory
application in connection with this transaction for which an application fee is
required, such party shall be solely liable for payment of such fee, except as
the other party may expressly agree in writing.
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9.10 Terminology. For purposes of this Agreement, "knowledge" of a
particular fact or other matter means information actually known to a party's
officers, directors, employees or agents or such information that a prudent
person could be expected to discover after due inquiry appropriate under the
circumstance.
9.11 Counterparts. This Agreement may be executed simultaneously in
multiple counterparts, each of which shall be deemed to be an original but all
of which together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their duly authorized officers as of the date first written
above.
RESOURCE BANK
By: /s/ James M. Miller
-------------------
James M. Miller, President
Northern Virginia Division
CENTURY NATIONAL BANK
By: /s/ Joseph S. Bracewell
-----------------------
Joseph S. Bracewell, President
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Exhibit 2.2
AMENDMENT NO. 1 TO PURCHASE AND ASSUMPTION AGREEMENT
BY AND BETWEEN
RESOURCE BANK AND CENTURY NATIONAL BANK
This AMENDMENT NO. 1 (the "Amendment") to the Purchase and Assumption
Agreement dated as of May 22, 2000 (the "Agreement"), by and between RESOURCE
BANK ("Seller") and CENTURY NATIONAL BANK ("Purchaser) is dated as of August 25,
2000.
The Agreement provides for the acquisition of certain assets and
assumption of certain liabilities of the Seller by the Purchaser. Section 9.01
of the Agreement provides that the Agreement may be amended by the parties
thereto by a written instrument signed by Purchaser and Seller. The parties wish
to amend the Agreement to revise certain terms set forth in the Agreement. All
capitalized terms used in this Amendment without definition are used as defined
in the Agreement. Accordingly, in consideration of the premises and the mutual
covenants and agreements herein contained, the parties hereto agree as follows:
A. IRA Accounts
1. As the notice period ("notice period") for a change in custodian
required to be given to IRA account holders pursuant to Seller's Individual
Retirement Custodial Account agreements will not expire until after the planned
August 25, 2000 Closing under the Agreement, the parties agree that,
notwithstanding anything to the contrary in the Agreement:
(a) the Deposits relating to the IRAs at the Branch will be
transferred to and assumed by Purchaser at Closing in accordance with the terms
of the Agreement;
(b) the full amount of the Premium in respect of the Deposits
relating to such IRAs shall be paid by Purchaser on the Closing Date in
accordance with the provisions of the Agreement, subject to adjustment in
accordance with the provisions of Section 1.06(b);
(c) except to the extent that any IRA account holder agrees in
writing to the earlier appointment of Purchaser as successor custodian for such
account holder's IRA, Seller shall remain custodian of the IRAs at the Branch
until the expiration of the notice period, at which time Purchaser shall become
the successor custodian for such IRAs in accordance with the Agreement and the
terms of the Individual Retirement Custodial Account agreement and Seller's tax
reporting obligations pursuant to the Agreement shall continue until transfer of
the custodianship is effective;
(d) if, during the notice period, any IRA account holder
appoints a successor custodian for such account holder's account other than
Purchaser, Purchaser shall, not later than the next business day following
notice by Seller to Purchaser, transfer the full amount of the deposit balance
in such account (including all interest or other income earned on account funds
between the Closing Date and date of retransfer, and subject to adjustment for
any permitted increases or reductions in the account balance) to Seller, or to
the extent agreed upon by Seller and Purchaser, to the successor custodian
appointed by the account holder, and Seller shall pay to Purchaser the amount of
<PAGE>
Premium paid by Purchaser as of the Closing Date for the Deposits relating to
such account(as such Premium may have been adjusted in accordance with Section
1.06(b)), together with interest on such amount from the Closing Date to the
date of payment, computed in accordance with Section 1.06(b). Seller shall pay
such amounts relating to all such accounts to Purchaser in a single payment,
delivered not later than five (5)days following the expiration of the notice
period.
2. Seller agrees to and does hereby indemnify, defend and hold
Purchaser harmless from any loss, demand, obligation, cost, expense or liability
(including reasonable attorney's fees and expenses) arising out of any actions,
suits or other proceedings involving the transfer of the IRAs, custodianship
arrangements or related deposit accounts in accordance with the terms of this
Amendment. The obligations of Seller pursuant hereto shall survive the Closing.
B. Lease Assignment
1. The Seller will assign its interest under the Lease to Purchaser at
the Closing pursuant to the Agreement. With respect to such Lease assignment,
the parties agree that, notwithstanding anything to the contrary in the Lease
assignment or Agreement:
(a) the "Administrative Fee" of $5,000 provided for in Section
8 of the Assignment, Assumption and First Amendment to the Lease dated as of
August 25, 2000 among Purchaser, Seller and Landlord (as defined therein) (the
"Assignment") will be paid by Purchaser, provided that Seller shall reimburse
Purchaser for 50% of such fee, with such reimbursement to be properly reflected
on the settlement statement referred to in Section 1.06(c) of the Agreement;
(b) the completion of the items on the "Punch List" referred
to in Section 10 of the Assignment shall be the sole responsibility and
obligation of the Seller and Seller shall complete such items in a timely manner
consistent with the terms of the Assignment, provided that the Purchaser agrees
to reimburse the Seller in an amount equal to 50% of the cost to complete such
items on the Punch List, up to a maximum of $2,500, with such reimbursement to
be properly reflected on the settlement statement referred to in Section 1.06(c)
of the Agreement.
C. ATM Cards
1. The parties agree that Section 1.10 of the Agreement is hereby
amended to add a new subsection at the end of such section to read as follows:
"(m) Seller agrees to allow holders of assumed Deposits to
continue to utilize their ATM cards issued by Seller to access such
Deposits through the close of business on September 8, 2000. Purchaser
and Seller shall settle such transactions on a daily basis in
accordance with the procedures provided in Section 1.10(j) hereof. At
Purchaser's direction to Seller, Seller shall immediately cancel or
disable the ATM cards of the individual customers identified by
Purchaser in order to prohibit access to the customer's account(s) by
use of such cards."
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2. Purchaser agrees to and does hereby indemnify, defend and hold
Seller harmless from any loss, demand, obligation, cost, expense or liability
(including reasonable attorney's fees and expenses) arising out of any actions,
suits or other proceedings involving the use of ATM cards as provided in the
above paragraph. The obligations of Purchaser pursuant hereto shall survive the
Closing.
D. Miscellaneous
1. The parties agree that Section 1.01(c) of the Agreement is hereby
amended to delete the phrase "subject to adjustment as provided in Section
1.09(d)" at the end of such section and that Section 2.13(b) of the Agreement is
hereby amended to delete the phrase "Loans or" in the first and third lines of
such Section 2.13(b).
2. As amended hereby, the Agreement is in all respects ratified,
confirmed and approved and shall remain in full force and effect.
3. This Amendment may be executed in multiple counterparts, each of
which shall be deemed an original and all of which shall be deemed to constitute
one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed as of the date first above written.
CENTURY NATIONAL BANK
By: /s/ Joseph S. Bracewell
-------------------
Joseph S. Bracewell, President
RESOURCE BANK
By: /s/ James M. Miller
---------------
James M. Miller, President
Northern Virginia Division
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