Exhibit 28(g)
AGREEMENT
THIS AGREEMENT is made and entered into this 27th day of
September, 1994, by and between REPUBLIC BANK, a Michigan-chartered state bank
("Seller"), and CB NORTH, a Michigan-chartered state bank ("Purchaser").
Purchaser desires to acquire and assume from Seller, and Seller is willing to
sell and transfer to Purchaser, the following branch office buildings and
properties (hereinafter "Premises"), the deposit accounts, applicable loan
portfolio and branch banking business conducted therefrom (excluding for all
purposes from this Agreement, however, Seller's Traverse City and Petoskey
loan production offices and operations) and certain items of equipment and
furniture located therein. The branch offices which are the subject of this
Agreement (the "Branch Offices") are as follows:
1. 305 E. Cayuga, Bellaire, Michigan 49615
2. 2530 Main Street, Central Lake, Michigan 49622
3. 880 Munson, Traverse City, Michigan 49684
In consideration of the premises and the mutual covenants and undertakings set
forth hereinafter, the parties agree as follows:
I. PURCHASE AND SALE
1.1 Property to Be Transferred. Subject to the terms and
conditions of this Agreement, effective at the close of business on the
Closing Date (as defined hereinafter), Seller shall sell, transfer, convey and
assign to Purchaser the following properties:
(a) The Premises more particularly described in Exhibit A
hereto, together with all easements, improvements thereon
and all appurtenances thereto;
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(b) All of Seller's right, title and interest in and to that
certain lease dated March 21, 1988, by and between Seller,
as tenant, and Anthony Vozza d/b/a Scarpa, as landlord (the
"Traverse City Lease"), with respect to the Premises
located in Traverse City, Michigan;
(c) All of Seller's right, title and interest in and to the
applicable loan portfolio carried as assets on the regular
books and records of the Branch Offices as of the Closing
Date excluding only (i) the existing SBA loans for Account
Names Willow Creek, Drayton Plain Vet Clinic, Inc.,
Batter-Up, Inc. and William Rzadkowolski, Account Numbers
7036101, 7037302, 7043401 and 7042702, respectively, and
(ii) such loans as to which Purchaser notifies Seller in
writing not later than ten (10) business days prior to the
Closing Date that Purchaser has elected not to acquire
(such loans, other than those described in (i) and (ii)
above being referred to as the "Loan Portfolio"), including
all notes, mortgages (and any escrow accounts established
thereunder), security agreements, assignments, financing
statements, insurance policies and other instruments,
documents, contract rights, claim and books and records
pertaining to the Loan Portfolio;
(d) All of Seller's right, title and interest in and to the
office equipment, furniture, office records, maintenance
contracts, if any, relating to the Premises and the
personal property located on the Premises, and other items
of personal property relating to the Premises, including
all leased equipment, all of which is described in Exhibit
B attached hereto, all of which is and, subject to Section
3.6 and Section 5.7 hereof, will be at the Closing Date
located on Premises; excepting, however, all teller station
terminals and any other assets specifically described on
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Exhibit B-1 which are specifically excluded from the sale
and transfer contemplated by this Agreement ("Excluded
Equipment");
(e) All cash and currency issued by the United States of
America held in the vaults at the Premises as of the
Closing Date;
(f) All of Seller's right, title and interest in and to the
time deposits, savings accounts, certificates of deposit,
money market checking accounts ("MMCA's"), money market
deposit accounts ("MMDA's"), checking ("NOW") accounts, all
other forms of N0W or demand accounts, including economy
checking accounts ("ECA's"), regular business checking
accounts ("RBCA") and low volume business checking account
("LBCA"), all individual retirement accounts ("IRA's"),
Keogh plans and self employed Pension Plans ("SEPs"), if
any, as of the Closing Date and which are associated with
the Branch Offices (hereinafter "Core Deposits"), all loans
secured by any of such Core Deposits being transferred to
Purchaser in whole or in part, all overdraft loans or lines
of credit associated with any Core Deposit accounts being
transferred to Purchaser (collectively "Deposit Related
Loans"), if any, all land contract accounts being serviced
by Seller for which the land contract payments are
deposited into a deposit account being transferred to
Purchaser according to the books and records of Seller at
the Closing Date, and, subject to Section 3.6 and Section
5.7 hereof, all of Seller's rights and interests under: (i)
assignable service and maintenance contracts in effect with
respect to the Premises and with respect to the personal
property located on the Premises; (ii) all assignable
personal property leases pertaining to the Premises; and
(iii) all assignable leases and subleases pertaining to the
Premises;
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(g) A sum of money equal to: (i) the aggregate of the Core
Deposits assumed by Purchaser pursuant to Section 1.2,
reduced by the aggregate principal amount plus accrued but
unpaid interest, on all Deposit Related Loans, if any, plus
(ii) the amount of accrued but unpaid interest on such Core
Deposit liabilities as of the Closing Date, plus (iii) the
amount of prepaid land contract servicing fees, if
applicable, calculated on a pro rata basis to the Closing
Date, minus (iv) the amount of currency in the vault in the
Premises as of the Closing Date, and minus (v) the sum of
the aggregate book value principal amount of the Loan
Portfolio as of the Closing Date, plus accrued but unpaid
interest, late charges and other sums due and owing thereon
through the Closing Date.
All of the foregoing items described in paragraphs (a), (b), (c), (d), (e),
(f) and (g) of this Section 1.1 are sometimes hereafter referred to as the
"Branch Office Properties."
1.2 Purchase Price. In full consideration for the sale,
transfer and assignment of the Branch Office Properties, Purchaser agrees to
pay to Seller a sum of money (the "Purchase Price") equal to (i) $1,190,000
less the Seller's net book value determined in accordance with generally
accepted accounting principles consistently applied of the Excluded Equipment
as of the end of the month immediately preceding the Closing Date, such amount
representing the agreed upon value as of the Closing Date of the Premises and
furniture, fixtures and equipment located therein, plus (ii) a Deposit Premium
(as hereinafter defined). The "Deposit Premium" shall equal eight percent (8%)
of the total Core Deposits (excluding for this purpose only certificates of
deposit issued and outstanding as of the Closing Date in amounts of $100,000
or more) transferred to Purchaser at the time of Closing (as defined herein).
The Seller and the Purchaser agree that they will prepare and file their
federal and any state or
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local income tax returns, including any and all notices, and other filings
required pursuant to Section 1060 of the Internal Revenue Code of 1986, as
amended, including IRS Form 8594, based on the resulting Purchase Price of the
Branch Office Properties described in this Section 1.2.
Purchaser also agrees to assume the specified deposit
liabilities of Seller arising as of the Closing on account of savings, NOWS,
MMCAs, MMDAs, ECAs, RBCAs, LBCAs, certificates of deposit, IRA's and SEP's,
Seller's obligations to pay all accrued but unpaid interest thereon and
Seller's obligations under all other agreements relating to such deposit
accounts, the Deposit Related Loans, if any, the Loan Portfolio (subject,
however, to Purchaser's rights pursuant to Section 8.7 hereof) and maintenance
and service contracts and other leases and agreements assumed by Purchaser, in
each case as the same shall exist at the Closing.
1.3 Prorated Items Adjustment. All real and personal property
taxes and special assessments (other than any special assessments payable in
installments over time extending beyond the Closing Date) which have become a
lien on the Premises or on any personal property located on the Premises as of
the Closing shall be paid by Seller. Current real and personal property taxes
and any special assessments payable in installments for the year in which the
Closing occurs, if any, shall be prorated and adjusted at the Closing on a due
date basis as if paid in arrears. Water and other utility bills and safe
deposit box rental fees will be prorated and adjusted as of the Closing.
Seller shall be reimbursed by Purchaser for the portion, prorated as of the
Closing Date, of the deposit insurance premiums paid by Seller to the FDIC
with respect to the Core Deposits for the second semi-annual assessment period
in 1994 if the Closing occurs in calendar year 1994 or for the first
semi-annual assessment period in 1995 if the Closing occurs in calendar year
1995. For purposes of calculating this reimbursement, an assessment rate shall
be used which is the annual risk based assessment rate applicable to the
Purchaser under the Bank Insurance Fund ("BIF"). Seller shall also be
reimbursed for any unused portion of the security deposit under the Traverse
City Lease.
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II. CLOSING
2.1 Closing. The closing (herein "Closing") shall take place as
of the close of business on either the first, second or third Saturday
following approval of the Commissioner of the Financial Institutions Bureau of
the State of Michigan (the "FIB") or the expiration of thirty (30) days
following the date of approval of the Federal Deposit Insurance Corporation
("FDIC"), whichever occurs later. The selection of the precise date of Closing
and the location of Closing shall be a date and location mutually agreeable to
Purchaser and Seller (herein "Closing Date").
2.2 Deliveries by Seller. Seller shall deliver to Purchaser the
following:
(a) At the Closing, Seller shall deliver to Purchaser: (i) the
information described on Exhibit C hereto with respect to
the Core Deposit accounts and Loan Portfolio transferred to
Purchaser, which shall be prepared in a manner consistent
with Exhibit C hereto and shall be complete and accurate in
all material respects as of the close of business on the
day preceding the Closing Date, and shall be certified as
such by the Chief Financial or Accounting Officer of
Seller, as well as the computer files from which such
information was generated; (ii) corporate warranty deeds in
the form set forth in Exhibit D, conveying good and
marketable title to the Premises situated in Bellaire,
Michigan and Central Lake, Michigan, subject only to
existing building and use restrictions and easements of
record and other imperfections of title reasonably
acceptable to the Purchaser, real estate transfer valuation
affidavits with respect to such Premises executed by Seller
in the form prescribed by the Register of Deeds in the
county in which each such Premises is located for
determining the amount of the transfer tax payable with
respect to
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the conveyance of such Premises to Purchaser hereunder
(which transfer tax shall be payable by Seller), and the
affidavit referred to in Section 3.13 hereof; (iii) an
assignment of the Traverse City Lease, in form and
substance acceptable to Purchaser, along with the
landlord's consent and estoppel affidavit described in
Section 5.11 hereof; (iv) a bill of sale conveying
marketable title to the tangible personal property
described in Exhibit B, in the form as set forth in Exhibit
E; (v) a general assignment of contract rights transferring
to Purchaser all of Seller's rights and privileges under
the Core Deposit account contracts, safe deposit box rental
agreements and Deposit Related Loan agreements, if any, the
Loan Portfolio, all personal property leases, service
contracts and other agreements to be assumed by Purchaser,
in the form as set forth in Exhibit F, along with copies of
all such contracts, agreements and leases; (vi) original
promissory notes and other negotiable instruments endorsed
to Purchaser's order, assignments of mortgages, UCC
financing statements and other security instruments with
respect to the Loan Portfolio, and any escrow accounts
established thereunder; (vii) a certificate of Seller's
Secretary attesting to the approval of this Agreement by
its Board of Directors, with copies attached thereto of the
resolutions adopted by its Board of Directors; (viii) the
title insurance commitments required by Section 5.3, along
with irrevocable instructions to the title insurance
company to issue and deliver the title insurance policies
to Purchaser in accordance therewith; and (ix) such other
documents as Purchaser may reasonably request to more
effectively transfer the Branch Office Properties to
Purchaser. Seller shall deliver possession of the Branch
Office Properties to Purchaser at the close of business on
the Closing Date.
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(b) By ten o'clock in the morning, Detroit time, on the first
business day for both Seller and Purchaser following the
Closing Date, Seller shall deliver to Purchaser (i) a sum
of money, in immediately available funds, equal to the
aggregate balance of all Core Deposits liabilities
(including accrued but unpaid interest) transferred to
Purchaser, reduced by the aggregate principal and net
accrued but unpaid interest amounts on all Deposit Related
Loans, if any, computed as of the close of business on the
day preceding the Closing Date relating to the deposit
account liabilities transferred to Purchaser; and (ii) a
sum of money, in immediately available funds, which
represents interest on the sum described in Section
2.2(b)(i) at the Federal Funds Rate for "this week" as last
reported prior to the Closing Date by the Board of
Governors of the Federal Reserve System ("Federal Reserve
Board") in the Federal Reserve Statistical Release H-15,
Selected Interest Rates (the "Federal Funds Rate") for the
period beginning with, and including, the Closing Date to,
but not including, the date of payment hereunder, MINUS (A)
a sum of money equal to the currency in the vaults at
the Premises at the close of business on the Closing Date,
(B) a sum of money equal to the aggregate principal
balance, and accrued but unpaid interest, late charges and
other sums due and owing as of the Closing Date, in respect
of the Loan Portfolio, and (C) a sum of money equal to
interest on the sum described in Section 2.2(b)(ii)(B)
above at the Federal Funds Rate for the period beginning
with, and including, the Closing Date to, but not
including, the date of payment hereunder.
2.3 Deliveries by Purchaser. Purchaser shall deliver to Seller
the following:
(a) At the Closing, Purchaser shall deliver to Seller: (i) an
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instrument of assumption substantially in the form attached
hereto as Exhibit G, pursuant to which Purchaser assumes
and agrees to perform all of Seller's liabilities and
obligations relating to the Core Deposit and Deposit
Related Loans, if any, transferred to Purchaser by Seller,
the Loan Portfolio, subject to the rights of Purchaser
pursuant to Section 8.7 hereof, the servicing agreements
for land contracts being transferred to Purchaser, if any,
and the assignable contracts, leases and subleases to be
assumed by Purchaser in accordance with Section 5.7 hereof;
and (ii) a certificate of Purchaser's Cashier or Secretary
attesting to the approval of this Agreement by the
Purchaser's Board of Directors, with copies attached
thereto of the resolutions adopted by Purchaser's Board of
Directors.
(b) By ten o'clock in the morning, Detroit time, on the first
business day for both Seller and Purchaser following the
Closing Date, Purchaser shall deliver to Seller: (i) a sum
of money, in immediately available funds, equal to the
Purchase Price; and (ii) a sum of money, in immediately
available funds, which represents interest on the Purchase
Price at the Federal Funds Rate for the period beginning
with, and including, the Closing Date to, but not
including, the date of payment hereunder.
2.4 Net Payment. Notwithstanding any other provisions of this
Section 2 to the contrary, Purchaser and Seller agree that at the time of
Closing, they will calculate the net payment due pursuant to Section 2.2 and
Section 2.3 and the party owing funds to the other will remit said net payment
in the manner set forth in Section 2 of this Agreement.
2.5 Post Closing Settlement. On the first or second day
following the
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Closing Date, Seller shall deliver to Purchaser a complete and accurate list
of the information described on Exhibit C with respect to all deposit accounts
and loan balances included in the Branch Office Properties as of the close of
business on the Closing Date, certified by the Chief Financial or Accounting
Officer of Seller. Within ten (10) business days after the Closing, at a time
and place to be agreed upon, the parties shall make an appropriate transfer of
funds to reflect any change in total deposits and loan balances from the close
of business on the day preceding the Closing through the close of business on
the Closing Date, plus any amount required to reflect NOW, MMCA, MMDA, ECA,
RBCA, LBCA, certificate of deposit, IRA and SEP transactions, if any, that
settle after the Closing Date as required by Section 8.3. If Seller's
certified list of Core Deposit accounts and Loan Portfolio shall be
unacceptable to Purchaser, a mutually acceptable nationally recognized
certified public accounting firm shall conduct an audit of such accounts and
loans within 30 days after the Closing and shall certify the results thereof
to the Purchaser and Seller and such certified report shall be conclusive and
binding on both parties hereto, and the cost of such audit shall be borne
equally by both parties
III. REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Purchaser as follows:
3.1 Organization, etc. Seller is a state bank duly organized,
validly existing and in good standing under the laws of the State of Michigan,
and has the full corporate power to enter into this Agreement and to carry out
its obligations hereunder. Seller further represents and warrants that
Seller's Board of Directors has approved this Agreement and that this
Agreement constitutes a legal, valid and binding obligation of Seller.
3.2 No Violation, etc. Neither the execution and delivery of
this Agreement nor the performance by Seller of its obligations hereunder
constitutes or will constitute a violation of or default under Seller's
charter or bylaws or any law,
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rule, ordinance, regulation, court order, agreement, indenture or
understanding to which Seller is a party or by which Seller or its properties
is bound or affected.
3.3 Taxes. Seller has duly and timely filed all returns and
reports with federal, state and local taxing authorities relating to the
payment of interest, earnings or dividends on the Core Deposits to be
transferred to Purchaser hereunder, and has duly and timely paid all taxes,
levies and assessments on such accounts and any other of the Branch Office
Properties, including but not limited to any applicable intangibles taxes,
personal property taxes, real property taxes, sales and use taxes and excise
taxes. To the best of its knowledge and to the best of its ability, Seller has
obtained, to the extent required by law, all federal tax identification
numbers related to the Core Deposits.
3.4 Environmental. Seller has no actual knowledge of any
hazardous substances, hazardous waste, pollutant or contaminant, including but
not limited to asbestos, PCB's or urea formaldehyde, having been generated,
released into, stored or deposited over, upon or below the Premises or into
any water systems on or below the surface of the Premises by Seller, or, to
its actual knowledge, from any source whatsoever. As used in this Agreement,
the terms "hazardous substances," "hazardous waste", "pollutant" and
"contaminant" mean any substance, waste, pollutant or contaminant included
within such terms under any applicable Federal, or state statute or
regulation. To best of Seller's knowledge, no demand, claim, notice, suit in
equity, administrative action, investigation or inquiry, whether brought on by
any governmental authority, private person or entity or otherwise, arising
under, relating to or in connection with any environmental laws is pending or
threatened against Seller in respect of the Premises or any past or present
operation of Seller therein.
3.5 Real Property. Except as disclosed on Exhibit I hereto, the
improvements and appurtenances to the Premises and their present use by Seller
do not, and the use of the same by Purchaser (including specifically all
drive-up teller windows), to the best of Seller's knowledge, will not violate
any provision of any
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presently applicable law, zoning ordinance, fire regulation, or restrictive
covenant; except that Seller makes no representations or warranties with
respect to compliance of the Premises with any state or federal law, rule or
regulation pertaining to accessibility of the Premises to individuals with
handicaps or disabilities, including, but not limited to, the Americans with
Disabilities Act and the regulations adopted in connection therewith. Seller
owns the Premises situated in Bellaire, Michigan and Central Lake, Michigan in
fee simple free and clear from all liens and encumbrances whatsoever, subject
only to current taxes which are a lien thereon but not yet due and payable and
other exceptions permitted under this Agreement or otherwise acceptable to
Purchaser. Upon delivery by Seller of the corporate warranty deeds to the
Premises located in Bellaire, Michigan and Central Lake, Michigan at the
Closing, Purchaser will acquire good, valid and marketable fee simple title to
such Premises. Seller is the tenant under the Traverse City Lease which is in
full force and effect in the form previously delivered to Purchaser, and there
are no defaults in any material respect currently existing thereunder. Except
as disclosed in Section 3.12 hereof, no party is in possession of all or any
portion of the Premises, whether as lessee or tenant at sufferance, other than
Seller.
3.6 Personal Property. All of the tangible personal property
described on Exhibit B under the category "Assets Owned" is validly and
indefeasibly owned by Seller free and clear of all liens and encumbrances. Any
personal property located on the Premises in which Seller has a leasehold
interest may be removed from the Premises by the Closing Date without breach
or violation of any applicable lease agreement or any material damage or
alterations to the Premises; provided, however, Seller shall not remove any
such personal property from the Premises unless Purchaser has given Seller
written notice pursuant to Section 5.7 hereof that Purchaser does not want to
assume the applicable lease agreement, in which case such personal property
shall be removed from the Premises, at Seller's expense, on or before the
Closing Date.
3.7 Litigation; Compliance with Law. There are no claims,
demands, actions, suits or proceedings pending or, to Seller's knowledge,
threatened against
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or affecting Seller by any customer, depositor, supplier or employee of Seller
or by any other person on account of any business or related activities
conducted by Seller or its employees or agents at the Premises, and Seller
does not know of any basis in fact for any such claim, demand, action, suit or
proceeding.
3.8 Outstanding Accounts and Contracts As of August 31, 1994,
the aggregate of all Core Deposit liabilities relating to accounts maintained
at the Branch Offices was approximately $49,029,000. Seller has previously
furnished to Purchaser: (a) a complete and accurate list of all types of
accounts offered at the Branch Offices and all outstanding loans secured by
any such accounts; (b) copies of all forms of deposit account contracts,
passbooks, certificates of deposit and other evidences of ownership relating
to such accounts; (c) copies of all powers of attorney, IRS W-9 forms, joint
control agreements and other agreements, orders or instructions relating to
the rights of existing depositors at the Branch Offices; and (d) copies of all
direct deposit agreements with the Social Security Administration or any other
person or party relating to the accounts at the Branch Offices. All such lists
and copies were true, accurate and complete in all material respects.
3.9 Loan Portfolio. All of the loans in the Loan Portfolio
will include all related servicing rights with respect to such loans.
3.10 No Adverse Change in Financial Condition. Since July 31,
1994, there has been no material adverse change in the financial condition,
assets, liabilities or business of Seller. Since such date no event has
occurred or, to Seller's knowledge, is likely to occur that would have a
material adverse effect on the financial condition, assets, liabilities or
business of Seller.
3.11 Disclosure. To the best of its knowledge, Seller has
disclosed to Purchaser all facts material to the Branch Office Properties. No
representation or warranty by Seller contained in this Agreement and no
statement contained in any certificate, schedule, list or other writing
furnished to Purchaser pursuant hereto
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contains any untrue statement of a material fact or omits to state a material
fact necessary in order to make the statements contained herein or therein not
misleading.
3.12 Bellaire Tenancy. Seller has leased a portion of the
Premises situated in Bellaire, Michigan (the "Tenant Premises") to Derman &
Turkelson, a Michigan co-partnership ("Tenant"), in accordance with the terms
of a certain lease dated April 6, 1987 (the "Tenant Lease"), which lease
expired on March 31, 1990. Notwithstanding the expiration of the Tenant Lease,
a true and complete copy of which has previously been provided to Purchaser,
Tenant continues to occupy the Tenant Premises on a month-to-month basis in
accordance with the terms of the Tenant Lease. Seller and Tenant have not
entered into any agreements or understandings, and Seller has not made any
representations to Tenant, regarding Tenant's continued occupancy of the
Tenant Premises on terms other than as set forth in the Tenant Lease. Tenant
is current in the payment of rent for its continued occupancy of the Tenant
Premises through the month of September, 1994.
3.13 Contracts. There are no service or maintenance contracts
with respect to the Premises or any personal property located thereon, any
personal property leases pertaining to the Premises, or any leases or
subleases relating to all or any portion of the Premises, other than the
Traverse City Lease and the Tenant Lease.
3.14 FIRPTA. Seller is not a "foreign person" as defined in
Section 1445(f)(3) of the Internal Revenue Code of 1986 and regulations
promulgated thereunder, and Seller will furnish to the Purchaser, at Closing,
an affidavit to this effect.
IV. REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser represents and warrants to Seller as follows:
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4.1 Organization, etc. Purchaser is a state bank duly
organized, validly existing and in good standing under the laws of the State
of Michigan, and has the full corporate power to enter into this Agreement and
to carry out its obligations hereunder (subject to receipt of the approvals of
the FIB and the FDIC). Purchaser further represents and warrants that
Purchaser's Board of Directors has approved this Agreement and that upon
receipt of approvals from the FIB and the FDIC, this Agreement will constitute
a legal, valid and binding obligation of Purchaser.
4.2 No Violation, etc. Neither the execution and delivery of
this Agreement nor the performance by Purchaser of its obligations hereunder
constitutes or will constitute a violation of or default under Purchaser's
charter or bylaws or any law, rule, ordinance, regulation, court order,
agreement, indenture or understanding to which Purchaser is a party or by
which Purchaser or its properties is bound or affected.
V. CONDITIONS TO OBLIGATIONS OF PURCHASER
Each and every obligation of Purchaser hereunder is subject to
the satisfaction of the following conditions, or their waiver in writing by
Purchaser, at or prior to the Closing Date:
5.1 Truth and Accuracy. The representations and warranties of
Seller contained in this Agreement shall have been true and correct in all
material respects when made and shall continue to be true and correct in all
material respect through the Closing Date as though made on such date.
5.2 Approval by Regulators. The written approvals of the FIB
and the FDIC to the transactions contemplated hereby shall have been received
and all requisite waiting periods shall have expired.
5.3 Title Commitment. Seller shall have furnished to
Purchaser not
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later that twenty-five (25) days prior to the Closing Date, at Seller's
expense, one or more commitments for title insurance, issued by a title
insurance company reasonably acceptable to Purchaser and bearing a date
subsequent to the date of this Agreement, in which said title insurance
company agrees to issue and deliver, without cost to Purchaser, one or more
policies of title insurance with standard exceptions insuring Purchaser for
the amount of the Purchase Price of the Premises against any loss or damage
incurred by Purchaser's failure to acquire from Seller fee simple marketable
title to the Premises situated in Bellaire, Michigan and Central Lake,
Michigan, subject to building and use restrictions and easements of record and
other exceptions reasonably acceptable to Purchaser, and a leasehold interest
in the Premises located in Traverse City, Michigan pursuant to the Traverse
City Lease. Purchaser shall have a period of ten (10) days following delivery
to it of such commitment or commitments issued by the title insurance company
under this Section 5.3 within which to notify Seller of any exceptions in such
title insurance commitments which do not meet the provisions of this Section
5.3. Any portion of such title insurance commitments as to which notice is not
given shall be deemed to be satisfactory to Purchaser. In the event such
notification is given to Seller, Seller shall have sixty (60) days from the
date of Purchaser's notice of defects in which to cure such defects.
5.4 No Adverse Change. There shall not have been any material
disposition of any of the Premises or personal property set forth on Exhibit
B, or material damage or destruction to the Premises and personal property set
forth in Exhibit B from fire, lightning, smoke, storms, explosion, vandalism
or similar events, nor shall there have been any material adverse change in
the financial condition of Seller or the business of Seller as conducted at
the Branch Offices, including any material adverse change in the offered terms
governing any Core Deposit accounts that is not in the ordinary course of
business consistent with past practices, or any material change in the
aggregate amounts of and relative composition of the Core Deposit accounts or
the Loan Portfolio from that prevailing as of the most recent date that
information was provided by Seller to Purchaser immediately prior to execution
of
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this Agreement.
5.5 Environmental. Acceptance by Purchaser of an environmental
assessment performed by an environmental consultant selected by Purchaser and
approved by Seller, at Purchaser's expense, which states to Purchaser's sole
satisfaction that no present indication exists that hazardous or toxic
materials, wastes or substances have been used, generated, stored, released,
discharged, disposed of or are present on, under or about the Premises or on
any adjoining land to any material extent and that the Premises are free from
and contain no hazardous or toxic substances, asbestos, wastes, chemicals or
liquids to any material extent as such terms are described or defined in the
following statues and rules:
Federal Clean Air Act
Federal Clean Water Act
Federal Resource Conservation and Recovery Act
Comprehensive Environmental Response, Compensation
and Liability Act
Purchaser shall have until 11:59 p.m. on October 10, 1994 to satisfy, waive,
remove this condition or notify Seller in writing as to any objections it has
regarding the environmental condition of the Premises and that Purchaser is
terminating the Agreement. Failure of Purchaser to give Seller the notice
required herein shall be deemed a waiver of this condition by Purchaser.
5.6 Intentionally Omitted.
5.7 Intentionally Omitted.
5.8 Seller Performance. Seller shall have performed all of its
obligations hereunder, except those obligations which by their terms are to be
performed at or after the Closing, and as to such obligations Seller shall be
ready, willing and able to perform the same.
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5.9 No Litigation. No action, suit or proceeding against
Seller or Purchaser prevents, or is pending and seeks to prevent, the
consummation of the transactions contemplated hereby.
5.10 Other. Purchaser shall have received from Seller all
lists, schedules and copies referred to in Section 3.8 not previously
delivered by Seller prior to the execution of this Agreement, and such
certificates of Seller's officers as Purchaser reasonably deems necessary to
evidence the continued truth and accuracy in all material respects of Seller's
representations and warranties as of the Closing Date and Seller's compliance
in all material respects with all other agreements and covenants by Seller
contained herein.
5.11 Landlord Consent and Estoppel Affidavit. Seller shall have
obtained a written consent, in form and substance acceptable to Purchaser
(which form Purchaser shall cause to be prepared and circulated within seven
(7) days after the date of this Agreement), from the landlord under the
Traverse City Lease to the assignment of the Traverse City Lease from Seller
to Purchaser, and an estoppel affidavit from such landlord, in form and
substance acceptable to Purchaser, attesting to the continuing existence of
the Traverse City Lease and the non-existence of any defaults thereunder,
among other things.
5.12 Tenant Estoppel. Seller shall have obtained an estoppel
affidavit from the Tenant, in substantially the form of Exhibit H, pursuant to
which Tenant shall have agreed to attorn to Purchaser as landlord under the
terms of the Tenant Lease upon consummation of the transactions contemplated
hereby, and acknowledging the continued occupancy of the Tenant Premises by
Tenant on a month-to-month basis in accordance with the terms of the Tenant
Lease, that such continued occupancy may be terminated upon thirty (30) days
written notice to Tenant, and that there are no defaults under the terms of
the Tenant Lease, among other things.
VI. CONDITIONS TO OBLIGATIONS OF SELLER
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Each and every obligation of Seller hereunder is subject to the
satisfaction of the following conditions, or their waiver in writing by
Seller, at or prior to the Closing Date:
6.1 Approvals by Regulators. The written approvals of the FIB
and the FDIC to the applications submitted by Purchaser for the transactions
contemplated hereby shall have been received by the Purchaser and all
requisite waiting periods shall have expired.
6.2 Purchaser Performance. Purchaser shall have performed all
of its obligations hereunder, except those obligations which by their terms
are to be performed at or after the Closing, and as to such obligations
Purchaser shall be ready, willing and able to perform the same.
6.3 No Litigation. No action, suit or proceeding against
Seller or Purchaser prevents, or is pending and seeks to prevent, the
consummation of the transactions contemplated hereby.
6.4 Other. Seller shall have been provided with a written
statement from Purchaser indicating that each of the conditions set forth in
Section 5 hereof have been satisfied or waived and that, subject to
Purchaser's rights pursuant to Section 8.7 hereof, Purchaser accepts the
Premises and the Branch Office Properties "as is" in their present condition.
VI. CONDUCT PRIOR TO CLOSING
During the period of time from the date of execution of this
Agreement to the date of Closing the parties agree to take the following
action:
7.1 Applications to Regulators. Promptly after execution of
this Agreement, Purchaser shall prepare and submit applications to the FIB and
the FDIC and
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any other required regulatory agency for permission to establish branch
offices at the Premises. To the extent necessary, Seller shall join in such
applications and furnish to Purchaser all necessary financial information,
certificates and other documents as shall be necessary or desirable in
connection with the filing of such applications.
7.2 Intentionally Omitted.
7.3 No Material Change in 0perations. So long as this Agreement
shall remain in effect prior to the Closing Date, Seller shall carry on its
banking business at the Branch Offices in substantially the same manner as
conducted on the date of this Agreement and shall refrain from introducing any
new or unusual methods of operation or accounting. Seller shall not purchase
or commit to purchase any additional furnishings or equipment to be placed on
the Premises without first obtaining Purchaser's written approval for such
action. Additionally, Seller shall not sell any material Branch Office
Property, enter into any material contracts, including leases, concerning the
Premises or pledge or encumber the Premises or Branch Office Property without
first obtaining Purchaser's written approval. Seller shall pay or credit all
regular payments relating to deposit accounts maintained at the Branch Offices
in accordance with its customary practices. During the pendency of this
Agreement, Seller shall grant no pay raises to employees working at the
Premises if said raises would be outside the ordinary course of Seller's
business, unless and until said raises have been approved in writing by
Purchaser.
7.4 Maintenance of Properties. Seller shall maintain the
Premises and all tangible personal property located thereon in accordance with
its customary practices and shall keep the same fully insured under existing
policies of insurance.
7.5 No Breach. Seller shall refrain from doing any act or
omitting to do any act which will cause a material breach of any contract or
commitment relating to its business conducted at the Branch Offices or the
properties included in the Branch Office Properties.
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7.6 Access to Records and Premises. Within fifteen (15) days
after the date of this Agreement, Seller shall, to the extent it has such
information available, provide Purchaser with the information specified on
Exhibit C attached hereto, and Seller agrees to provide updates of such
information as required by Section 2.2. Following execution of this Agreement,
Seller agrees to provide Purchaser, or its representatives, with access during
normal business hours to the Premises to permit Purchaser to install telephone
data communication lines and to examine the Premises in order to facilitate
transference of the business conducted thereon, provided that Purchaser shall
not disrupt Seller's operations in carrying out such activities, Seller also
agrees to make available for inspection by Purchaser the books and records
pertaining to the business of Seller as conducted at the Branch Offices, and
Seller agrees not to destroy any such books and records without giving
Purchaser reasonable prior notice of its intent to do so and an opportunity to
review the same and make copies thereof. Seller further agrees that in the
event Purchaser finds any deficiencies in Seller's books and records
pertaining to the Premises or any of the other Branch Office Properties,
Seller shall, upon request by Purchaser, use its best efforts to cure such
deficiencies as soon as reasonably practicable after receipt of such request
from Purchaser. In the event the sale and transfer as contemplated by this
Agreement is not consummated for any reason within the time periods set forth
in this Agreement, then Purchaser shall, within five (5) business days of
receipt of demand from Seller, return to Seller all originals and copies of
account and customer information, books, records, computer tapes and data
provided to Purchaser pursuant to this Agreement and further agrees to
promptly remove all personal property and communications lines installed by
Purchaser upon receipt of Seller's request therefor.
7.7 No Announcements. Purchaser and Seller shall each refrain
from making any public announcement or any announcement to Seller's customers
(including depositors) of the transactions contemplated by this Agreement
without the prior written approval thereof of the other party unless such an
announcement is required by the Securities and Exchange Commission or some
other regulatory body governing the
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affairs of either the Purchaser or Seller. Additionally, the parties agree to
jointly prepare and issue a press release announcing this transaction on a
mutually agreeable date and Purchaser agrees not to commence the publication
of public notices required in connection with the regulatory approvals
anticipated by Sections 5.2 and 6.1 hereof until the satisfaction or waiver of
the contingency set forth in Section 5.5 hereof.
7.8 Notice to Depositors and Customers. Purchaser, at its sole
cost and expense, shall prepare and send a notice, promptly following the
Closing, to the depositors whose accounts it is acquiring and to the loan
customers, which notice shall comply with all requirements of regulatory
authorities.
7.9 No Other Agreements. Seller agrees that so long as this
Agreement is pending, it will not solicit any offers or enter into any
agreements or understandings with any other party relating to the disposition
of the Branch Office Properties or Premises without the prior written consent
of the Purchaser.
7.10 Surveys. Within ten (10) days after the date of this
Agreement, Seller shall deliver to Purchaser any existing surveys of the
Premises situated in Bellaire, Michigan and Central Lake, Michigan which
Seller has in its possession.
7.11 Best Efforts. Each party to this Agreement shall use its
best efforts to render its representations and warranties hereunder true and
correct, to perform its covenants and obligations hereunder, to obtain as soon
as possible all government and other third-party consents required to be
obtained by it, and to take such action as may be necessary to close the
transactions contemplated herein on or before December 31, 1994.
7.12 No-Shop Clause From the day hereof until the later of the
Closing or June 30, 1995, the Seller, its affiliates, and their respective
officers, directors, employees and other agents shall immediately cease any
existing discussions or negotiations with any person or entity conducted with
respect to any proposal for a
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merger or other business combination or sale of any assets inconsistent with
the transactions anticipated hereby (a"Sale Proposal") and will not directly
or indirectly take any action to facilitate, initiate, or encourage any offer
or indication of interest from any person or entity with respect to any Sale
Proposal, propose, authorize, recommend or enter into any agreement with
respect to any Sale Proposal, or disclose any non-public information relating
to the Branch Office Properties or afford access to any such properties or the
books and records relating thereto to any person or entity who might be
considering making, or who has made, an offer with respect to a Sale Proposal.
VIII. ACTION SUBSEQUENT TO CLOSING
8.1 Assistance After Closing. With respect to any alarm and
surveillance or other equipment not purchased by Purchaser hereunder, Seller
agrees to keep in service and make available to Purchaser any such equipment
at the Premises for a period of up to fifteen (15) business days after the
Closing, and Purchaser agrees to reimburse Seller for a pro rata portion of
the costs for such systems for the time of actual use thereof by Purchaser.
8.2 Removal of Property. If Purchaser shall request, Seller
agrees to remove from the Premises any tangible personal property located
thereon not sold to Purchaser as a part of the Branch Office Properties prior
to the Tuesday following the Closing.
8.3 Post-Closing Settlement. For a period of ninety (90) days
following Closing, Seller shall consult with Purchaser upon presentment of any
checks, drafts, incoming ACH debits and credits, credit card debits and
adjustments, ATM transactions on sold accounts (only for ten (10) days) and
other negotiable instruments drawn on any of the deposit accounts transferred
to Purchaser hereunder, and if assured by Purchaser that sufficient funds are
available to honor such
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instruments, Seller shall pay such instruments. Upon presentment of such
instruments following such consultation with and assurance by Purchaser and
payment by Seller, Purchaser agrees to purchase such checks and instruments
from Seller for the face amount thereof. If any customer of Seller whose
deposit account is transferred to Purchaser hereunder has, prior to the
Closing Date, presented or deposited a negotiable instrument drawn on another
financial institution for collection and payment, and such instrument
subsequently is dishonored by the drawee institution, Purchaser agrees to
purchase such negotiable instrument from Seller for the face amount thereof
provided that at the time of transfer of such deposit account to Purchaser
there existed a proper hold on sufficient credit in the account against which
to charge such dishonored instrument.
8.4 Indemnification.
(a) Seller shall indemnify, defend and hold Purchaser, its
directors, officers, employees and agents harmless from and
against all demands, damages, liabilities, costs and
expenses (including, without limitation, interest,
penalties and attorneys' fees) asserted against, imposed on
or incurred by such indemnified party by reason of or
resulting from (a) any material breach of the
representations, warranties or covenants of Seller herein;
and (b) any other material liability or obligation of or
claim against Seller or Purchaser arising out of any
occurrence, event or state of facts relating to any of the
properties transferred to Purchaser hereunder existing or
having taken place prior to the Closing, including, without
limitation, any material liability or obligation for any
tax, penalty or interest arising from or with respect to
any of the Branch Office Properties, or operations of the
business conducted therewith, which is incurred or is
attributable to any period on or prior to the Closing Date,
other than those liabilities, obligations and claims
specifically
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assumed by Purchaser hereunder. Purchaser will give Seller
notice of any such claims, and Seller will undertake the
defense thereof at its own cost by representatives of its
own choosing. Further, Purchaser shall have the option of
participating in said defense at its own expense.
(b) Purchaser shall indemnify, defend and hold Seller, its
directors, officers, employees and agents harmless from and
against all demands, damages, liabilities, costs and
expenses (including, without limitation, interest,
penalties and attorneys' fees) asserted against, imposed on
or incurred by such indemnified party by reason of or
resulting from any material breach of the representations,
warranties or covenants of Purchaser herein. Seller will
give Purchaser notice of any such claims, and Purchaser
will undertake the defense thereof at its own cost by
representatives of its own choosing reasonably acceptable
to Seller. Further, Seller shall have the option of
participating in said defense at its own expense.
8.5 Tax Reports. Seller agrees to file with appropriate
federal, state, and local taxing authorities and to send to all Core Deposit
account customers and loan customers, including but not limited to Deposit
Related Loan customers, if any, all required reports pertaining to the
interest paid to or by them with respect to their accounts from the beginning
of the calendar year in which the Closing occurs to (but not including) the
Closing Date. Purchaser agrees to file with appropriate federal, state, and
local taxing authorities and to send to all Core Deposit account customers and
loan customers, including but not limited to Deposited Related Loan customers,
if any, all required reports pertaining to the interest paid to or by them
with respect to their accounts from and including the Closing Date to the last
day of the calendar year in which the Closing occurs.
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8.6 Account Transfers. Following the Closing, Purchaser agrees,
for all Core Deposit accounts acquired hereunder, to honor all existing
arrangements with the Automated Clearing House Association ("ACHA") for
incoming transactions to and from accounts with other financial institutions
and third parties (including Seller) and to honor any arrangements for
transfers by Seller from one account of a depositor to another account at the
Branch Offices, but Purchaser shall not be required to honor any other type of
account transfer arrangement offered by Seller to the depositors whose
accounts are transferred hereunder.
8.7 Put Rights Regarding Loan Portfolio. Notwithstanding
anything in this Agreement to the contrary, for a period of ninety (90) days
following the Closing Date, Purchaser shall have an option, exercisable in its
sole discretion and upon written notice to Seller, to cause Seller to
repurchase any or all loans in the Loan Portfolio (the "Purchased Loans") from
Purchaser, at the price paid at Closing by Purchaser for such Purchased Loans,
adjusted for all payments, accruals and advances received, booked or made, as
the case may be, in accordance with the written agreements relating to such
Purchased Loans from the Closing Date to the date of such repurchase by
Seller. In the event that Purchaser exercises its rights under this Section
8.7, Seller shall repurchase such Purchased Loans described in such written
notice within fifteen (15) days following receipt of such written notice, and
Purchaser shall deliver to Seller such instruments of conveyance as may
reasonably be necessary to effectuate such repurchase, including but not
limited to a general assignment of rights with respect to such Purchased
Loans, original promissory notes and other negotiable instruments duly
endorsed to Seller's order and assignments in recordable form of mortgages,
UCC financing statements and other security instruments relating to such
Purchased Loans, and such other documents as Seller may reasonably request.
8.8 Further Assurances. Each party hereto agrees to execute and
deliver such other documents as the other party hereto may reasonably deem
necessary or desirable to effectuate the transactions contemplated by this
Agreement.
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8.9 Covenant Not To Compete. Seller hereby covenants and agrees
that for a period of two years commencing on the Closing Date none of Seller,
Seller's affiliates, and their respective officers, directors, employees and
other agents will establish a deposit gathering branch office or otherwise,
directly and knowingly, solicit deposits from any of the owners of any of the
Core Deposits or loans to the borrowers, guarantors or other obligors under
any loans included in the Loan Portfolio within a radius of five miles of any
of the Branch Offices (the "Territory"). Not withstanding anything to the
contrary express or implied herein, this Covenant Not to Compete shall neither
prohibit nor apply to (i) any automated teller machines owned or operated by
Seller now located in the Territory and any automated teller machines owned
and operated by third parties which participated in an ATM network in which
Seller also participates, (ii) any deposit gathering branch offices of third
parties now or hereafter established in the Territory that are subsequently
acquired by Seller or its affiliates as a result of a merger or acquisition
involving any such third party or Seller or its affiliates, (iii) general
advertisements or solicitations, or (iv) deposit accounts associated with any
extensions of credit to a depositor which were not solicited in contravention
of this Section 8.9.
IX. MISCELLANEOUS
9.1 Survival of Representations. The representations and
warranties of Seller and Purchaser herein shall survive the Closing for a
period of one (1) year. All statements contained herein or in any certificate,
schedule, list or other document delivered pursuant hereto shall be deemed
representations and warranties within the meaning of this Section.
9.2 No Commissions. Except for the fee to be paid by Purchaser
to W.Y. Campbell & Company, each of the parties hereto represents and warrants
to the other that there are no claims for brokerage commissions or finder's
fees in connection with the transactions contemplated by this Agreement. Each
party will indemnify the other and hold it harmless from and against any and
all claims or
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liabilities for brokerage commissions or finder's fees incurred by reason of
any action taken by it.
9.3 Termination of Agreement. Notwithstanding any other
provision contained herein, this Agreement may be terminated (i) by either
party upon written notice to the other and without liability for breach hereof
by the terminating party if the Closing has not occurred by March 31, 1995 for
any reason other than a breach of this Agreement by the terminating party,
(ii) by the non-breaching party in the case of a material breach of the
representations, warranties or agreements set forth herein (excluding Section
7.11, the violation of which will not constitute a material breach of this
Agreement) or in case any of the conditions precedent to the terminating
party's obligation to proceed has not been satisfied or waived by March 31,
1995, or (iii) if the Closing has not occurred by December 31, 1994 either
party may terminate this Agreement provided such party is not in material
breach of any representation warranty or covenant contained in this Agreement,
such party pays the other party $20,000.00 in full and complete satisfaction
of all obligations and liabilities whereunder, and such party provides the
other party written notice of its election to terminate this Agreement prior
to 5:00 p.m., Eastern Standard Time, on January 3, 1995.
9.4 Expenses. Seller agrees that all fees and expenses incurred
by it in connection with this Agreement shall be borne by it, and Purchaser
agrees that all fees and expenses incurred by it in connection with this
Agreement shall be borne by it.
9.5 Parties in Interest. This Agreement and the schedules and
other writings referred to herein or delivered pursuant hereto which form a
part hereof contain the entire understanding of the parties with respect to
its subject matter. There are no restrictions, promises, warranties, covenants
or undertakings other than expressly set forth herein or therein. This
Agreement supersedes all prior agreements and understandings between the
parties with respect to its subject matter. This
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Agreement may be amended only by a written instrument duly executed by the
parties and may not be assigned by Purchaser without the express written
consent of the Seller. Any condition to a party's obligations hereunder may be
waived in writing by such party.
9.6 Employees. Purchaser shall have no obligation to employ any
person now employed by Seller. Purchaser will review the qualifications and
may interview some or all of Seller's employees working at the Premises, and
may offer employment positions on an at will basis to all, some or none of the
employees now employed by Seller at salary and wage levels and benefits
determined solely by Purchaser. Each individual employee may accept or reject
Purchaser's employment offer. Purchaser assumes no liability for any accrued
or vested employee benefits of any of Seller's employees.
9.7 Headings. The section and paragraph headings contained in
this Agreement are for reference purposes only and shall not affect in any way
the meaning or interpretation of this Agreement.
9.8 Notices. All notices, claims, certificates, requests,
demands and other communications hereunder shall be in writing and will be
deemed to have been duly given if delivered or mailed (registered or certified
mail, postage prepaid, return receipt requested or Federal Express or other
overnight delivery service which guarantees next day delivery and requires
acknowledgement of receipt):
If to Purchaser: Brian D. Bell, Chairman, President
and Chief Executive Officer
CB Financial Corporation
One Jackson Square
Jackson, Michigan 49201
With a copy to: Richard M. Bolton, Esq.
Dickinson, Wright, Noon, Van Dusen
& Freeman
500 Woodward Avenue, Suite 4000
Detroit, Michigan 48226-3598
If to Seller: Dana M. Cluckey
Executive Vice President
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Republic Bancorp, Inc.
1070 East Main Street
Owosso, Michigan 48867
With a copy to: George E. Parker III, Esq.
Miller, Canfield, Paddock and
Stone, P.L.C.
150 W. Jefferson, Suite 250
Detroit, Michigan 48226-4415
9.9 Confidentiality. For purposes of this Agreement, any and
all financial information, schedules, agreements, books, records, accounts,
reports, customer lists, customer information, electronic data bases, loan
files, instruments, papers, documents, or other information relating to the
Branch Office Properties shall be deemed to be "Confidential Information".
(a) While this Agreement is in effect and at all times
thereafter unless and until this transaction is
consummated, Purchaser shall treat as strictly
confidential, and shall not divulge to any other person
(natural or corporate) the Confidential Information which
it may come to know as a direct result of a disclosure by
Seller or which may come into its possession directly as a
result of and during the course of investigation pursuant
to this Agreement. Purchaser shall be permitted to disclose
such Confidential Information to its directors, officers,
employees, attorneys, accountants, and financial advisers
who have a need for such information in connection with
this transaction.
(b) The provisions of this Section shall not preclude Purchaser
from using or disclosing at any time Confidential
Information which is (i) readily ascertainable from public
information or trade sources; (ii) reasonably required to
be included in a report filed with any governmental agency;
(iii) reasonably required to be included in any filing or
application required by any regulatory agency; (iv)
received from a third party not under any obligation to
keep such information confidential; (v) required by law or
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regulation to be disclosed; (vi) known by it before the
commencement of discussions among the parties to this
Agreement; or (vii) subsequently developed by it
independent of its disclosure pursuant to or in connection
with this Agreement.
9.10 Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original but all of which
shall constitute one and the same Agreement.
9.11 Governing Law. Except insofar as this Agreement is
subject to federal banking law, this Agreement shall be governed by and
construed in accordance with the laws of the State of Michigan.
IN WITNESS WHEREOF the parties have caused this Agreement to be
executed on their behalf by duly authorized officers as of the date first
above written.
REPUBLIC BANK
By: /s/ Barry J. Eckhold
------------------------------------
Barry J. Eckhold
President and Chief Executive
Officer
CB NORTH
By: /s/ Francis B. Flanders
------------------------------------
Its: Chairman, President and C.E.O.
-------------------------------
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