EXHIBIT 10.1
BRANCH PURCHASE AND DEPOSIT ASSUMPTION AGREEMENT
THIS BRANCH PURCHASE AND DEPOSIT ASSUMPTION AGREEMENT (the "Agreement") is
entered into as of the 11th day of April, 1996, between Essex Savings Bank,
F.S.B., a federally-chartered stock savings bank (the "Seller"), and Centura
Bank, a North Carolina bank (the "Purchaser").
WHEREAS, the Seller wishes to sell and the Purchaser wishes to purchase the
deposits and certain assets of the branch offices operated by the Seller in
Greensboro, Raleigh and Wilmington, North Carolina (the "Branches").
NOW, THEREFORE, in consideration of the foregoing, of the mutual
agreements, covenants, representations, warranties and conditions contained
herein, and of other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Seller and the Purchaser agree
as follows:
ARTICLE 1.
TRANSFER OF ASSETS AND ASSUMPTION OF LIABILITIES
1.01 Effective Date. Except as otherwise provided herein, the closing date
(hereinafter referred to as the "Effective Date") shall be: (i) the last
business day of the month next ending at least ten (10) calendar days following
the date on which all regulatory approvals for this transaction, required by law
and this Agreement, have been obtained and all waiting periods required by
statute have expired so that this sale may be legally consummated in accordance
with the terms of this Agreement; or (ii) such other date thereafter as may be
mutually agreed to by the parties, which agreement shall not be unreasonably
withheld.
1.02 Transfer of Assets and Consideration Therefor.
(a) Subject to the terms and conditions of this Agreement, the Seller will
sell, assign, transfer, convey and deliver to the Purchaser, and the Purchaser
will purchase from Seller, on the Effective Date:
(i) all of the Seller's right, title and interest in and to certain
deposit related loans of the Branches (the "Deposit Loans"),
consisting of loans secured by deposit instruments, including but
not limited to, savings accounts and certificates, on the books
of the Branches as of the close of business on the Effective
Date; and
(ii) all of the Seller's right, title and interest in and to the net
amount of proration items, as described in Section 1.09, paid by
the Seller on or
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prior to the Effective Date but relating to periods after the
Effective Date, and cash and cash equivalents on hand in the
Branches.
The purchase price for the Deposit Loans shall be equal to the unpaid principal
balance of the Deposit Loans, plus accrued and unpaid interest, as of the close
of business on the Effective Date. On the Effective Date, the purchase price
for the Deposit Loans shall be calculated based on the unpaid principal balance
of the Deposit Loans, plus accrued and unpaid interest, as of 12:01 a.m. of the
first day of the month in which the Effective Date occurs (the "Measurement
Date"). The purchase price for the Deposit Loans shall be paid by offsetting
the purchase price against the deposit liabilities assumed pursuant to Section
1.02(b).
(b) On the Effective Date, subject to the terms and conditions of this
Agreement, and in consideration for the aforesaid sale, assignment, transfer,
conveyance and delivery the Purchaser will assume and agree to pay, perform and
discharge all deposit liabilities of the Seller, including accrued interest, now
existing or hereafter arising and existing as of the close of business on the
Effective Date, attributed on the records of the Seller to the Branches (the
"Assumed Deposits").
1.03 Payment of Premium. On the Effective Date, subject to the terms and
conditions of this Agreement, the Purchaser also shall pay to the Seller a
premium (the "Premium") for the Assumed Deposits in the amount of one percent
(1%) of the aggregate balance of the Assumed Deposits.
1.04 Purchase of Loans. All Deposit Loans (and any notes, other evidences of
indebtedness or security instruments associated therewith) transferred to the
Purchaser on the Effective Date pursuant to Section 1.02 shall be transferred
without recourse except as provided in this Agreement and without any
representations or warranties as to the collectability of any such Deposit Loans
or the creditworthiness of any such obligors.
1.05 Obligations of the Seller on the Effective Date. On the Effective Date,
the Seller will:
(a) execute, acknowledge (if appropriate) and deliver to the Purchaser a
Bill of Sale in the form attached as Exhibit A hereto;
(b) deliver to the Purchaser cash or immediately available funds equal to
the Assumed Deposits, measured as of 12:01 a.m. on the Measurement Date, less
the sum of:
(i) the unpaid principal balance or par value, respectively, plus
accrued and unpaid interest, of the Deposit Loans to be purchased
by the Purchaser pursuant to Section 1.02(a)(i), measured as of
12:01 a.m. on the Measurement Date,
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(ii) to the extent not accounted for in the calculation of the Assumed
Deposits, all amounts owed by deposit customers as a result of
writing a check or similar instrument and creating an overdraft
on an account,
(iii) the net amount of proration items, as described in Section 1.09,
paid by the Seller on or prior to the Effective Date but relating
to periods after the Effective Date,
(iv) cash and cash equivalents on hand in the Branches, and
(v) the Premium, based on the amount of Assumed Deposits as of 12:01
a.m. on the Measurement Date.
(c) assign, transfer and deliver to the Purchaser such of the records
pertaining to the Assumed Deposits and the Deposit Loans and any other records
reasonably requested by the Purchaser as exist and are in the Seller's
possession or control, as detailed in Section 1.07(g).
The Purchaser agrees that it will preserve and safely keep, for as long as may
be required by applicable law, all of the signature cards, orders, contracts,
forms, taxpayer identification number certifications, and records hereinabove
referred to for the joint benefit of itself and the Seller, and that it will
permit the Seller and its representatives to inspect, and make extracts from or
copies of, any such records, at any reasonable time, and at the expense of the
Seller, as shall be reasonably necessary to the Seller for purposes of its
records. The Seller agrees that it will preserve and safely keep, for as long
as may be required by applicable law, all of the files,books of accounts and
records as exist and are in Seller's possession pertaining to the past history
of the accounts transferred hereunder, including deposit slips, cancelled checks
or withdrawal orders, for the joint benefit of itself and the Purchaser, and
that it will permit the Purchaser and its representatives to inspect, and make
extracts from or copies of, any such files,books of accounts or records, at any
reasonable time and at the expense of the Purchaser, as shall be reasonably
necessary to the Purchaser for purposes of its records.
1.06 Assumption Agreement. To evidence the assumption by the Purchaser of the
liabilities and obligations of the Seller assumed pursuant to this Agreement,
the Purchaser and the Seller will execute, acknowledge and deliver, on the
Effective Date, an assumption agreement in the form attached hereto as EXHIBIT
B. The Seller acknowledges that the Purchaser does not assume and shall have no
liability for any debts, liabilities or obligations of the Seller of any kind
whatsoever except as specifically set forth in this Agreement and the assumption
agreement.
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1.07 Certain Transitional Matters. From and after the Effective Date:
(a) On or before the Effective Date, the Seller and the Purchaser shall
cooperate and take all actions as are necessary to arrange for the direct
routing to the Purchaser through the check clearing system of the banking
industry, effective immediately following the Effective Date, all checks,
drafts and withdrawal orders on forms provided by the Seller and carrying its
imprint (including name and transit routing number) drawn against amounts
transferred to the Purchaser. Such items will be presented to the Seller's item
processor ("BISYS") with other items drawn on the Seller's transit routing
number. Upon presentation to BISYS the following process will be employed:
(i) A copy of the report noting all checks, drafts, withdrawal orders
and ACH items presented for payment will be sent via facsimile to
the Purchaser.
(ii) A copy of the report noting ACH and other credit items, with all
pertinent information, will be sent via facsimile to the
Purchaser.
(iii) Based on the total debits and total credits reported, the
Purchaser will take those steps necessary to make wire transfer
payment for the net amount due to the Seller at an account to be
provided by the Seller.
(iv) The items presented for payment and/or credit will be
consolidated into a cash letter. Said cash letter will be
available for pick up by the Purchaser at BISYS by 4 p.m. the day
following the day of presentment or at a mutually agreed upon
location and time.
All checks, drafts and withdrawal orders drawn against balances transferred will
be consolidated into a cash letter by BISYS for pick up by the Purchaser as
specified in Section 1.07(a)(iv) above.
Within ten days after the Effective Date, checks, drafts and
withdrawal orders with the Purchaser's transit routing number should be provided
to the holders of all transferred accounts with checks, drafts or withdrawal
orders carrying the Seller's transit routing number. After ninety (90) days, or
such other period as may be mutually agreed upon by the Seller and the
Purchaser, all checks, drafts, and withdrawal orders on forms provided by the
Seller and carrying its imprint will be returned to the payee unpaid and will
not be available for pick up by the Purchaser.
All items clearing through Automated Clearing House ("ACH") will be
processed and settled by Federal Reserve Bank ("FRB") through the Seller's
transit routing number. After presentment of the ACH item, all items settling
against accounts transferred to
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the Purchaser will be provided to the Purchaser on a daily ACH clearing report
to allow posting of the item to the transferred account. Immediately after the
effective date, the Purchaser shall use its reasonable best efforts to provide
notification of changes to the FRB to request the change of the transit routing
number to the Purchaser's number on all ACH items settling to a transferred
account. After ninety (90) days, or such other period as may be mutually agreed
upon by the Seller and the Purchaser, the ACH item will be returned to the
originator and the daily ACH report will not be available to the Purchaser.
The Purchaser agrees to pay the Seller for all checks, drafts and
withdrawal orders drawn against funds transferred to the Purchaser and ACH debit
items presented to the Seller drawn against transferred accounts less ACH credit
items payable to transferred accounts each day by wire transfer. If ACH credit
items exceed debit items, the Seller agrees to make payment to the Purchaser
each day via wire transfer.
(b) After the Effective Date, the Purchaser agrees to pay in accordance
with law, up to the collected amount on deposit to the extent of the amount
transferred to the Purchaser on the Effective Date (and any other funds
available by reason of any agreement between the depositor and the Purchaser),
all properly drawn and presented checks, drafts and withdrawal orders presented
to the Purchaser by mail, over its counters or through the check clearing system
of the banking industry, by depositors of the accounts assumed, whether drawn on
the checks, withdrawal or draft forms provided by the Seller, or by the
Purchaser.
(c) If any of such depositors, instead of accepting the obligation of the
Purchaser to pay the Assumed Deposits, shall demand payment from the Seller for
all or any part of the Assumed Deposits, the Seller shall not be liable or
responsible for making such payment. Instead, the Seller may, at its
discretion, assume custody of the check or other item presented for payment on
an account which has been transferred with the Branches, and shall immediately
forward such items to the Purchaser in the manner provided in subsection (a)
above. The Seller shall not, at any time, be liable or responsible for making
payment on such items by reason of its obtaining custody of them for transmittal
to the Purchaser.
(d) The Purchaser agrees, no later than noon of the second business day
after demand by the Seller, to pay the Seller an amount equivalent to the amount
of any uncollected item included in a depositor's balance as of the close of
business on the Effective Date which is returned on or within thirty (30) days
after the Effective Date as uncollected within the time contemplated by
applicable clearinghouse rules and applicable federal regulations and that is
not charged directly to the depositor's account with the Purchaser. Provided
the Purchaser has not honored checks written on uncollected funds, the extent to
which the Purchaser shall be required to make such payment for an item shall be
limited to the amount on deposit with the Purchaser at the time the Seller makes
the demand aforesaid. Uncollected funds will be defined by the Seller's
availability schedules pursuant to Regulation CC.
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(e) If the balance due on any Deposit Loan has been reduced by the Seller
as the result of a payment by check received on or prior to the Effective Date,
which item is returned within thirty (30) days after the Effective Date as
uncollected within the time contemplated by applicable clearinghouse rules, the
asset value represented by the Deposit Loan shall be correspondingly increased
and an amount in cash equal to such increase shall be paid by the Purchaser to
the Seller after the Effective Date upon demand.
(f) Not later than the last business day of the month following the month
in which the Effective Date occurs (the "Settlement Date"), the Seller and the
Purchaser shall reconcile the amount of cash or immediately available funds paid
by the Seller to the Purchaser on the Effective Date pursuant to Section 1.05(b)
by recalculating the amount payable pursuant to Section 1.05(b) by substituting
measurements of Deposit Loans and Assumed Deposits, plus accrued interest, as of
the close of business on the Effective Date for the measurements as of the
Measurement Date that were utilized on the Effective Date, and by making such
adjustments to the amounts of proration items utilized for the purposes of
Section 1.05(b)(iii) as shall be necessary to reflect bills and invoices
received after the Effective Date. On the Settlement Date, the Seller shall
make an additional payment to the Purchaser, or the Purchaser shall refund to
the Seller, as the case may be, in cash or immediately available funds, the
amount necessary (i) to adjust the amount originally paid by the Seller on the
Effective Date to the amount that would have been paid if measurements as of the
close of business on the Effective Date had been utilized on the Effective Date,
(ii) to reflect such adjustment to the proration items, and (iii) to pay to the
Purchaser any payments on any of the Deposit Loans received by the Seller after
the Effective Date.
(g) The Seller will provide the following records pertaining to the
Assumed Deposits as are contained in the BISYS system at no charge to the
Purchaser:
- At least thirty (30) days prior to the Effective Date, a printed
copy of all information contained in the customer information
file (customer name, tax I.D., address(es), account
relationships, etc.) and all customer financial data reasonably
required by the Purchaser and an unlabeled, standard display
format (EBCIDIC) and a comma delineated or other word processing
format, fixed record length, machine readable tape copy with
blocks not exceeding 5,000 bytes.
- On or immediately preceding the business day next following the
Effective Date, a printed copy of information contained in the
customer information file (customer name, tax I.D., address(es),
account relationships, etc.) and all customer financial data
reasonably required by the Purchaser as of the close of business
on the Effective Date and an unlabeled, standard display format
(EBCIDIC), fixed record length, machine readable tape copy with
blocks not exceeding 5,000 bytes.
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The Seller will also provide reasonable assistance to the Purchaser
prior to and for a period of forty-five (45) days after the Effective Date in
the deconversion of the deposit records relating to the Branches from the BISYS
system presently used by the Seller, and will assist the Purchaser, at
Purchaser's request and expense, in extending the contract of the Seller with
BISYS for the Purchaser's account and in providing any special deconversion
assistance to the Purchaser; provided that unless the Purchaser has requested
such an extension, any termination or similar fee and all reasonable expenses
incurred by the Seller associated with such deconversion shall be borne by the
Seller. In the event such an extension is requested, all expenses incurred must
be approved by the Purchaser and billed directly to the Purchaser by BISYS.
(h) On or before the Effective Date, the Seller will cancel all automatic
teller machine (ATM) cards issued by it to customers of the Branches. At least
thirty (30) days prior to the Effective Date, the Seller will furnish to the
Purchaser a printed copy of the Seller's complete ATM cardholder information,
including PIN numbers (to the extent such information is available to the
Seller).
(i) The Seller will return to the Federal Reserve Bank all incoming wires
received after the Effective Date relating to accounts assumed by the Purchaser.
(j) The Seller will render a final statement as of the Effective Date to
each depositor of an account assumed under this Agreement.
1.08 Indemnification.
(a) The Seller shall indemnify, hold harmless and defend the Purchaser
from and against all claims, losses, liabilities, demands and obligations,
including reasonable legal fees and expenses, real estate, sales and use, social
security and unemployment taxes, all accounts payable and operating expenses
including salaries and utility charges, which the Purchaser may receive, suffer
or incur relating to matters that arise from ownership and operation of the
Branches on or before the Effective Date. The Seller agrees further to defend,
indemnify and hold harmless the Purchaser against all claims, losses,
liabilities (including reasonable legal fees) and obligations resulting from any
material breach of this Agreement, or from any breach of any representation or
warranty made by the Seller in the Agreement or in any certificate delivered to
the Purchaser hereunder. The Purchaser will give the Seller written notice of a
threatened or pending claim within thirty (30) calendar days (except in the case
where the Purchaser's first notice is its receipt of the complaint, in which
case such time for giving Notice shall be fifteen (15) calendar days) of its
learning about such claim, together with a statement of facts known to it
regarding such claim. The Seller will then have forty-five (45) calendar days
from the date it received such notice to investigate the claim and determine
whether it will elect to assume the defense of the matter involving such claim.
If it does so elect, the Seller will be given the Purchaser's full cooperation
and assistance in maintaining
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said defense. The Seller shall not be liable for any amounts in settlement of a
claim or action as described above if such settlement is effected without the
Seller's written consent, which consent shall not be unreasonably withheld. It
is understood that the obligations of the Seller under this paragraph shall
survive the Effective Date.
(b) The Purchaser shall indemnify, hold harmless and defend the Seller
from and against all claims, losses, liabilities, demands and obligations,
including reasonable legal fees and expenses, sales and use, social security and
unemployment taxes, all accounts payable and operating expenses including
salaries and utility charges, which the Seller may receive, suffer or incur
relating to matters that arise from the Assumed Deposits or the Deposit Loans
after the Effective Date. The Purchaser agrees further to defend, indemnify,
and hold harmless the Seller from and against all claims, losses, liabilities
(including reasonable legal fees) and obligations resulting from any material
breach of this Agreement, or from any breach of any representation or warranty
made by the Purchaser in this Agreement or in any certificate delivered to the
Seller hereunder. The Seller will give the Purchaser written notice of a claim
within thirty (30) calendar days (except in the case where the Seller's first
notice is its receipt of a complaint, in which such time for giving notice shall
be fifteen (15) calendar days) of its learning about such claim, together with a
statement of facts known to it regarding such claim. The Purchaser will then
have forty-five (45) calendar days from the date it receives such notice to
investigate the claim to determine whether it will elect to assume the defense
of the matter involving such claim. If it does so elect, the Purchaser will be
given the Seller's full cooperation and assistance in maintaining such defense.
The Purchaser shall not be liable for any amounts in settlement of a claim or
action as described above if such settlement is effected without the Purchaser's
written consent, which consent shall not be unreasonably withheld. It is
understood that the obligations of the Purchaser under this paragraph shall
survive the Effective Date.
1.09 Prorata Adjustment of Expenses. All deposit insurance premiums and
similar expenses relating to the Assumed Deposits shall be prorated between the
parties as of the close of business on the Effective Date.
1.10 Essex Property. The Seller shall be entitled to retain all of the
furniture, fixtures and equipment used in the operation of the Branches,
including but not limited to (a) all signage displaying the "Essex" name and/or
trademarks or service marks utilized by the Seller in the conduct of its
business, and (b) all software and dedicated lines associated with Seller's
internal data processing and internal communications systems.
ARTICLE 2.
REPRESENTATIONS AND WARRANTIES OF THE SELLER
The Seller hereby represents and warrants to the Purchaser as follows:
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2.01 Corporate Organization and Powers. The Seller is a federally chartered
capital stock savings bank duly organized, validly existing and in good standing
under the laws of the United States of America and the rules and regulations of
the Office of Thrift Supervision ("OTS"). The Seller has the corporate power
and authority to own its properties, to effect this transaction and carry on its
business as presently conducted. The Seller's deposits are, subject only to
monetary limits established by law and regulation, insured by the Savings
Association Insurance Fund ("SAIF").
2.02 No Violation. Neither the execution and delivery of this Agreement, nor
the consummation of this sale or the Seller's performance hereunder, will
violate or conflict with: (i) the Charter or Bylaws of the Seller; (ii) any
provision of any agreement or any other restriction of any kind to which the
Seller is a party or by which the Seller is bound; or (iii) any statute, law,
decree, regulation or order of any governmental authority, once the governmental
consents referred to in this Agreement are obtained; or will result in a default
under, or cause the acceleration of the maturity of, any obligation or loan to
which the Seller is a party.
2.03 Corporate Authority. The execution and delivery of this Agreement, the
consummation of this sale and the Seller's performance hereunder, have been duly
authorized by the Board of Directors of the Seller. No further corporate
authorization on the part of the Seller is necessary to consummate the
transaction.
2.04 No Litigation. There is no action, suit, proceeding, inquiry or
investigation, at law or in equity, or before any court, public board or body
pending, or to the knowledge of the Seller threatened, against the Seller,
wherein an unfavorable decision, ruling or finding would materially and
adversely affect the Branches, the assets or liabilities being transferred or
assumed pursuant to this Agreement, the transactions contemplated by this
Agreement, or adversely affect the validity or enforceability of this Agreement
or any document necessary to consummate the transactions contemplated herein or
any approval, consent or permission required to be obtained by the Seller
hereunder.
2.05 Deposit Loans. The outstanding principal and interest balances of each
Deposit Loan does not exceed the balance of the deposit account with which it is
associated.
2.06 Compliance with Laws. The Seller's operation of the Branches is in
compliance in all material respects with all applicable laws, statutes and
governmental regulations that relate to the Seller or its operation of the
Branches.
2.07 Employment Contracts. The Seller has no employment contracts with any
employees who are employed by Seller in connection with the Branches. Except as
provided in Section 5.04 below, no liability or obligation to any of Seller's
employees will be transferred to the Purchaser pursuant to this Agreement or the
transactions contemplated hereunder.
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2.08 Finders or Brokers. The Seller has not in any manner whatsoever paid or
agreed to pay any fee or commission to any agent, broker, finder or other person
for or on account of services rendered as a broker or finder in connection with
this Agreement or the transactions covered and contemplated hereby. All
negotiations relating to this Agreement have been conducted by the Seller
directly and without the intervention of any person in such manner as to give
rise to any valid claim against any party hereto for any brokerage commission or
finder's fee or other like payment.
2.09 Limitation of Warranties. Except as may be expressly represented or
warranted in this Agreement by the Seller, the Seller makes no representations
or warranties whatsoever with regard to any assets being transferred to the
Purchaser, or liability or obligation being assumed by the Purchaser.
ARTICLE 3.
REPRESENTATIONS AND WARRANTIES OF PURCHASER
The Purchaser hereby represents and warrants to the Seller the following:
3.01 Corporate Organization. The Purchaser is a financial institution duly
organized, validly existing and in good standing under the laws of the
jurisdiction under which it was established. The Purchaser has the corporate
power and authority to own or lease its properties, to effect the transactions
contemplated hereby and to carry on its business as presently being conducted.
The Purchaser's deposits are insured, subject only to monetary limits
established by law or regulation, by the Bank Insurance Fund.
3.02 No Violation. Neither the execution and delivery of this Agreement, nor
the consummation of this sale or the Purchaser's performance hereunder, will
violate or conflict with: (i) the Articles of Incorporation or the Bylaws of the
Purchaser; (ii) any provision of any agreement or any other restriction of any
kind to which the Purchaser is a party to or by which the Purchaser is bound; or
(iii) any statute, law, decree, regulation or order of any governmental
authority, once the governmental consents referred to in this Agreement are
obtained, or will result in a default under, or cause the acceleration of the
maturity of, any obligation or loan to which the Purchaser is a party.
3.03 Corporate Authority. The execution and delivery of this Agreement, and
the consummation of this sale and the Purchaser's performance hereunder, have
been duly authorized by the Purchaser. No further corporate authorization on
the part of the Purchaser is necessary to consummate this transaction.
3.04 No Litigation. There is no action, suit, proceeding, inquiry or
investigation, at law or in equity, or before any court, public board or body
pending, or to the knowledge of the Purchaser threatened, against the Purchaser,
wherein an unfavorable decision, ruling or
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finding would materially and adversely affect the Branches, the assets or
liabilities being transferred or assumed pursuant to this Agreement, the
transactions contemplated by this Agreement, or adversely affect the validity or
enforceability of this Agreement or any document necessary to consummate the
transactions contemplated herein or any approval, consent or permission required
to be obtained by the Purchaser hereunder.
3.05 Finders or Brokers. The Purchaser has not in any manner whatsoever paid
or agreed to pay any fee or commission to any agent, broker, finder or other
person for or on account of services rendered as a broker or finder in
connection with this Agreement or the transactions covered and contemplated
hereby. All negotiations relating to this Agreement have been conducted by the
Purchaser directly and without the intervention of any person in such manner as
to give rise to any valid claim against any party hereto for any brokerage
commission or finder's fee or other like payment.
ARTICLE 4.
CONDUCT OF BUSINESS PENDING THE EFFECTIVE DATE
Pending the Effective Date, and except as otherwise consented to by the
Purchaser or provided for by this Agreement, the Seller will carry on its
business at the Branches and maintain its deposit rates at the Branches in a
manner consistent with its past practice. The Seller further agrees to use
reasonable efforts to preserve for the Purchaser the goodwill of its customers
and others having relations with the business normally conducted at the
Branches, and to cooperate with and assist the Purchaser in assuring the orderly
transition of such business from the Seller to the Purchaser. Nothing in this
paragraph shall be construed as requiring the Seller to engage in any activities
or efforts outside of the ordinary course of business as presently conducted.
ARTICLE 5.
OBLIGATIONS OF THE PARTIES PRIOR TO AND AFTER EFFECTIVE DATE
5.01 Full Access. The Seller shall afford to the officers, employees and
authorized representatives of the Purchaser access to the properties, books and
records pertaining to the Branches, upon reasonable notice by the Purchaser to
the Seller and at reasonable times, in order that the Purchaser may have full
opportunity to make such investigations as it shall desire, of the affairs of
the Seller relating to the Branches. The officers of the Seller will furnish
the Purchaser with such additional financial and operating data and other
information as to its business at the Branches as the Purchaser shall from time
to time reasonably request and as shall be available, including, without
limitation, information required for inclusion in all governmental
applications necessary to effect the transactions contemplated by this
Agreement. Nothing in this Section 5.01 shall be deemed to require the Seller
to breach any obligation of confidentiality.
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5.02 Regulatory Applications. Each party shall prepare and file, with the
cooperation of the other, as soon as practicable, but no event later than 30
days following the date of this Agreement, such applications, as required by
law, to the appropriate Federal and/or State regulatory authorities for approval
for the Seller and the Purchaser, respectively, to effect the transactions
contemplated by this Agreement, and the parties hereto shall, if required by
applicable statute or regulation, publish appropriate notice of the sale. The
parties agree to use their good faith reasonable efforts to obtain such
approval in a diligent manner and on a priority basis. Each party shall pay its
own regulatory application fees, publication costs, if any, and legal expenses.
5.03 Further Assurances. Both parties hereby agree to execute and deliver such
instruments and take such other actions as the other party may reasonably
require in order to carry out the intent of this Agreement, and the Seller
agrees to give such bills of sale, acknowledgments and other instruments of
conveyance and transfer as, in the reasonable judgment of the Purchaser, shall
be necessary and appropriate to vest in the Purchaser legal and equitable title
to the assets of the Seller being sold hereunder, free and clear of all liens
and encumbrances. The Seller also agrees to provide the Purchaser with all
information necessary to enable the Purchaser to comply with all tax reporting
obligations for 1996 related to the Assumed Deposits (including Individual
Retirement Accounts) and Deposit Loans.
5.04 Retention of Employees. The Purchaser agrees that it will offer
employment to any or all employees of the Seller at the Branches who are still
so employed by the Seller as of the close of business on the Effective Date, on
terms and conditions comparable to those provided either by the Seller to such
employees or by the Purchaser to similar employees. Each employee will have the
right to carry over to its employment by the Purchaser all accrued but unused
vacation time and sick leave. A schedule of each employee's accrued but unused
vacation time and sick leave as of March 31, 1996 is attached as EXHIBIT C.
Each employee has the option of accepting the offer of employment by the
Purchaser, and the Seller will use reasonable efforts to encourage the employees
to accept the Purchaser's offer. Employment by the Purchaser will commence as of
the close of business on the Effective Date, and the Seller will terminate the
employment of each employee (and their participation in employee benefit plans
of the Seller) as of the close of business on the Effective Date. The Purchaser
agrees that if any employee accepting employment with the Purchaser is
discharged by the Purchaser within three (3) months of the Effective Date, such
employee will receive severance benefits in accordance with the terms and
conditions applicable to the Purchaser's own employees in like circumstances.
5.05 Confidentiality. From and after the Effective Date, the Seller will keep
confidential and will not furnish to any other person the names of the deposit
and other customers of the Branches other than as may be required under
applicable law or in connection with the defense of any claim. Further, for a
period of twelve months following the Effective Date, the Seller will not
specifically target and solicit customers whose accounts have been assumed by
the
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Purchaser. This restriction shall not apply to solicitations conducted in the
ordinary course of business by the Seller's mortgage origination affiliate.
5.06 Best Efforts. The Purchaser and the Seller each agree to use their
reasonable best efforts to ensure the occurrence of the Effective Date not later
than July 31, 1996.
5.07 SAIF Assessment. The Seller and the Purchaser acknowledge that the United
States Congress is presently considering a number of measures designed to
recapitalize the SAIF, including the imposition of a one-time special assessment
on institutions the deposits of which are insured by the SAIF (a "Special
Assessment"). The Seller agrees that it will remain liable for, and will
indemnify the Purchaser for the payment of, any Special Assessment or portion
of any Special Assessment that is based upon the deposits of the Branches at any
time prior to or as of the Effective Date, regardless of the date when such
Special Assessment is imposed. However, the Seller shall not be liable for the
amount of any Special Assessment to the extent that it is based upon deposit
balances in excess of the Assumed Deposits.
ARTICLE 6.
CONDITIONS TO PURCHASER'S OBLIGATIONS
Each and every obligation of the Purchaser under the Agreement to be performed
on or before the Effective Date shall be subject to the satisfaction, on or
before the Effective Date, of the following conditions:
(a) The representations and warranties made by the Seller in this
Agreement shall be true in all material respects at and as of the Effective 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 the
Purchaser.
(b) The 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 on the Effective Date.
(c) From the date of this Agreement through the close of business on the
Effective Date, there shall have been no material adverse change, not cured, in
the business or material conditions (financial or otherwise) affecting the
Branches or the assets to be acquired by the Purchaser, except for any changes
permitted or contemplated by the terms hereof, or consented to by the Purchaser.
(d) As of the close of business on the Effective Date, no action, suit or
proceeding shall be pending or threatened: (i) against the Seller which might
materially and adversely affect the business of the Branches or the other assets
to be acquired by the Purchaser; or (ii) against either party pertaining to this
transaction.
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(e) The Seller shall have made delivery to the Purchaser of the items
described in Sections 1.05(a) and 1.05(c).
(f) The Seller shall have delivered to the Purchaser all appropriate tax
affidavits, IRS "B" and "C" notices regarding taxpayer identification numbers
and withholding, and schedules listing the deposit customers of the Branches and
the Deposit Loans, each as of the Measurement Date or such later date on or
prior to the Effective Date as is practicable under the circumstances.
(g) The Purchaser shall have received from the appropriate regulatory
authorities unconditional approval to effect the transactions contemplated by
this Agreement.
ARTICLE 7.
CONDITIONS TO THE SELLER'S OBLIGATIONS
Each and every obligation of the Seller under this Agreement to be performed on
or before the Effective Date shall be subject to the satisfaction, on or before
the Effective Date, of the following conditions:
(a) The representations and warranties made by the Purchaser in this
Agreement shall be true in all material respects at and as of the Effective 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 the
Seller.
(b) The 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 on the Effective Date.
(c) The Seller shall have received from the appropriate regulatory
authorities unconditional approval to effect the transactions contemplated by
this Agreement.
ARTICLE 8.
CONDITIONS TO THE SELLER'S AND THE PURCHASER'S OBLIGATIONS
Each and every obligation of the parties under this Agreement to be performed on
or before the Effective Date shall be subject to the satisfaction, on or before
the Effective Date, of the following conditions: approval by the appropriate
regulatory authorities shall have been obtained; the consent of the appropriate
regulatory authorities to the assumption by the Purchaser of the Assumed
Deposits shall have been obtained; and termination of branch operations
conducted by the Seller at the Branches' locations and the Seller's consummation
of this sale shall not have been objected to by the appropriate regulatory
authority.
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ARTICLE 9.
TERMINATION
9.01 Methods of Termination. This Agreement may be terminated at any time, but
not later than the Effective Date:
(a) By mutual agreement of the Purchaser and the Seller; or
(b) By the Purchaser if any of the conditions provided for in Article 6 of
this Agreement shall not have been met or waived in writing by the Purchaser at
the earlier of the time established for the Effective Date or September 30,
1996; or
(c) By the Seller if any of the conditions provided for in Article 7 of
this Agreement shall not have been met or waived in writing by the Seller at
the earlier of the time established for the Effective Date or September 30,
1996; or
(d) By either party if any of the conditions provided for in Article 8
shall not have been met at the earlier of the time established for the Effective
Date or September 30, 1996.
9.02 Procedure Upon Termination. In the event of termination pursuant to
Section 9.01 hereof, written notice thereof shall be given to the other party,
and this Agreement shall terminate immediately upon receipt of such notice,
unless an extension is consented to by the party or parties having the right to
terminate. If this Agreement is terminated as provided herein:
(a) Each party will redeliver all documents, work papers and other
materials of the other party relating to this transaction, whether so obtained
before or after the execution hereof, to the party furnishing the same; and
(b) All information received by either party hereto with respect to the
business of the other party (other than information which is a matter of public
knowledge or which has heretofore been 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 business advantage by
such party or disclosed by such party to third persons to the detriment of the
party furnishing such information or if otherwise prohibited by state or federal
law.
(c) Nothing contained in this Article shall be deemed to excuse either
party for a breach of any of its obligations or agreements undertaken or made in
this Agreement.
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9.03 Payment of Expenses. If this Agreement is terminated as provided herein:
(a) then if this Agreement has been terminated because of the Purchaser's
failure to perform and comply in all material respects with its obligations
under this Agreement, then the Purchaser shall be liable for the reasonable
expenses of the Seller incurred in connection with the transactions contemplated
by this Agreement.
(b) then if this Agreement has been terminated because of the Seller's
failure to perform and comply in all material respects with its obligations
under this Agreement, then the Seller shall be liable for the reasonable
expenses of the Purchaser incurred in connection with the transactions
contemplated by this Agreement.
ARTICLE 10.
MISCELLANEOUS PROVISIONS
10.01 Amendment and Modification. The parties hereto, by mutual consent of
their respective duly authorized officers, may amend, modify and supplement
this Agreement in such manner as may be agreed upon by them in writing.
10.02 Assignment. This Agreement and all of the provisions hereof shall be
binding upon, and inure to the benefit of, the parties hereto and their
respective successors and permitted assigns, but neither this Agreement nor any
of the rights, interests or obligations hereunder shall be assigned, prior to
the Effective Date, by either of the parties hereto without the prior written
consent of the other.
10.03 Counterparts. This Agreement may be executed simultaneously in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
10.04 Headings. The headings of the Sections and Articles of this Agreement
are inserted for convenience only and shall not constitute a part hereof.
10.05 Survival of Representations and Warranties. The respective
representations and warranties of the parties hereto contained herein shall
survive for a period of eighteen (18) months after the Effective Date, unless
stated otherwise herein.
10.06 Payment of Expenses. Each party herein shall pay for its own expenses
incurred in connection with the transactions contemplated by this Agreement
except as stated otherwise herein. Except as otherwise provided herein, any
expenses, fees and costs necessary for any approvals of the appropriate Federal
and/or State regulatory authorities or for any notice to depositors of the
assumption of deposit liabilities provided for in this Agreement shall be paid
by the parties responsible for obtaining such approval or giving such notices.
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10.07 Governing Law. This Agreement shall be deemed to have been made and
executed in the State of North Carolina, and shall be governed by the laws of
the State of North Carolina.
10.08 Customer Notices. The Seller shall permit the Purchaser access to names
and addresses of depositors, including Individual Retirement Account ("IRA")
customers, of the Branches at least 30 days prior to the Effective Date for
purposes of preparing for publication and direct mailings. In addition, the
Seller will give all legally required notices to its customers at the Branches.
With respect to the transfer of any IRA accounts at the Branches, the Seller
shall comply with all laws and regulations relating to the prior notification of
the transfer of IRA accounts.
10.09 Addresses for Notice, etc. All notices, requests, demands and other
communications provided for hereunder and under the related documents shall be
in writing (including telegraphic and facsimile communications) and mailed (by
registered or certified mail) or telegraphed or delivered in person or by
facsimile to the applicable party at the addresses indicated below.
If to the Seller: Mr. Gene D. Ross
Chief Executive Officer
Essex Savings Bank, F.S.B.
200 Golden Oak Court
Suite 200
Virginia Beach, VA 23452
With a copy to: James J. Wheaton, Esq.
Willcox & Savage, P.C.
1800 NationsBank Center
Norfolk, VA 23510
If to the Purchaser: Mr. Frank Pattillo
Senior Executive Vice President and
Chief Financial Officer
Centura Banks, Inc.
134 North Church Street
Rocky Mount, NC 27804
With a copy to: John B. Fleming, Jr.
Assistant General Counsel
Centura Bank
P.O. Box 1220
Rocky Mount, NC 27802
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or, as to each party, at such other address as shall be designated by such party
in a written notice to each other party complying as to delivery with the terms
of this Section.
10.10 No Third Party Beneficiaries. It is the intention of the parties that
nothing in this Agreement shall be deemed to create any right with respect to
any person or entity not a party to this Agreement.
10.11 Confidentiality. The Seller and the Purchaser agree that they will not,
without the consent of the other, issue any press releases or make any public
disclosure regarding the transactions contemplated by this Agreement, except as
otherwise required by law. The Seller and the Purchaser agree that the terms of
this Agreement are confidential, and shall not be disclosed to any other party,
except as otherwise required by law or with the consent of the other. The
Seller and the Purchaser acknowledge that it is contemplated that the Purchaser
will issue a press release, subject to the Seller's review and consent, in
connection with the execution of this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their duly authorized officers and their corporate seals to be
affixed as of the date first written above.
ESSEX SAVINGS BANK, F.S.B.
By: /S/ GENE D. ROSS
-----------------------
Gene D. Ross
Chief Executive Officer
CENTURA BANK, a North Carolina bank
By: /S/ MICHAEL R. HILTON
----------------------
Michael R. Hilton
Controller
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