Exhibit 2.1
PURCHASE AND ASSUMPTION AGREEMENT
between
ARROW FINANCIAL CORPORATION,
ARROW VERMONT CORPORATION,
GREEN MOUNTAIN BANK
and
ALBANK, FSB
dated as of February 26, 1996
TABLE OF CONTENTS
1. DEFINITIONS.
2. TERMS OF PURCHASE.
(a) Purchase and Sales of Assets
(b) Transfer of Assets
(c) Proration
(d) Items in Transit
(e) Books and Records
(f) Sales Taxes
(g) Contracts
(h) No Purchase of Trust Business; Trust Transfer
Transactions
(i) Actions Against Former Affiliates
(j) OREO
3. CONVEYANCE OF ASSETS
(a) Real Property Assets
(b) Personal Property and Safe Deposit Boxes
(c) Cash on Hand
(d) Account Loans
(e) Overdraft Lines of Credit
(f) Other Loans
(g) Servicing Business
(h) Late Fee Receivable
4. LIABILITIES.
(a) Assumption of Liabilities
(b) Non-Assumption of Liabilities
5. CONSIDERATION AND SETTLEMENT
6. APPROVALS
7. AGREEMENTS OF THE COMPANY
(a) Access to Records and Information
(b) Further Assurances
(c) Consents
(d) Notice
(e) Non-Competition Agreement
(f) Conduct of Business Prior to Closing
(g) Items in the Company's Possession
(h) Electronic Funds Transfer Transactions
(i) Insurance
(j) Compliance with Law/Maintenance of Property
(k) Tapes and Trial Balances and Loan Data
(l) Communications with Customers
(m) Training of Employees
(n) Environmental Audit
8. AGREEMENTS OF ALBANK.
(a) Performance of Liabilities
(b) Further Assurances
(c) Compliance with Law
(d) Change of Name, Notice
(e) Conversion of Draft Accounts
(f) Electronic Funds Transfer Transactions
(g) Obligations to Reimburse the Company
(h) Obligation with Respect to Certain Troubled
Debt Restructures
(i) Non-Competition Agreement
9. AGREEMENTS OF THE COMPANY AND ALBANK WITH
RESPECT TO EMPLOYEES.
(a) Employee Obligations
(b) Employee Procedures
(c) Employee Benefits
10. COMPUTER SERVICES
11. THE CLOSING.
12. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
(a) Corporate Organization, Powers and Authority;
Records
(b) No Violation
(c) Consents and Approvals
(d) Title to Real and Personal Property;
Encumbrances; and Leases
(e) Loan Portfolio
(f) Absence of Certain Changes or Events
(g) Legal Proceedings
(h) Taxes and Tax Returns
(i) Officers and Employees
(j) Other Statements and Reports
(k) Agreements with Regulatory Agencies
(l) Environmental Matters
(m) Insurance
(n) Transactions with Certain Persons
(o) Disclosure
(p) Brokers or Finders
(q) No Foreign Person
(r) Reaffirmance of Representations and Warranties
13. REPRESENTATIONS AND WARRANTIES OF ALBANK
(a) Corporate Organization; Powers and Authority
(b) No Violation
(c) Consents and Approvals
(d) Legal Proceedings
(e) Agreements with Regulatory Agencies
(f) Disclosure
(g) Brokers or Finders
14. OTHER PROVISIONS
(a) Returned Items
(b) Holds
(c) Notices to Depositors
(d) ATM Cards
(e) Reimbursements
(f) Withholding
(g) Taxpayer Information
(h) Allocation of Purchase Price
(i) Public Disclosure; Confidentiality
(j) Advice of Changes
(k) References to Servicing Purchase Agreement
15. AGREEMENTS WITH RESPECT TO REAL PROPERTY
(a) Title
(b) Loss or Damage
(c) Environmental Assessment
(d) Price Abatement/Termination
16. CONDITIONS TO OBLIGATIONS OF ALBANK.
(a) Performance
(b) Representations and Warranties
(c) Authorization
(d) Absence of Litigation
(e) No Material Adverse Change
(f) Systems Conversion Complete
(g) Documents
17. CONDITIONS TO OBLIGATIONS OF THE COMPANY
(a) Performance
(b) Representations and Warranties
(c) Authorization
d) Absence of Litigation
(e) Documents
18. CONDITIONS TO OBLIGATIONS OF BOTH PARTIES.
(a) Approval of Regulatory Authorities
(b) Closing under Servicing Purchase Agreement
19. TERMINATION.
20. EFFECT ON THIRD PARTIES.
21. SURVIVAL OF REPRESENTATIONS, INDEMNIFICATION
AGREEMENTS AND CERTAIN OTHER MATTERS
(a) Survival
(b) Indemnification by ALBANK
(c) Indemnification by the Company
(d) Procedures
(e) Settlement
(f) Limitations
22. MISCELLANEOUS.
(a) Expenses
(b) Notices
(c) Successors and Assigns
(d) Counterparts
(e) Governing Law
(f) Captions
(g) Entire Agreement; Modifications; Waivers
EXHIBITS
A ALLL Amount Calculation
B Assumption Agreement
C Xxxx of Sale
D Land Descriptions
E Sale and Assignment Agreement
F Servicing Purchase Agreement
G Certification of Nonforeign Status
H Assignment and Assumption of Lease
I Estoppel Certificate
SCHEDULES
1.1 Account Loans
1.2 Commercial Loans
1.3 Commercial Mortgage Loans
1.4 Consumer Loans
1.5 Contracts
1.6 Deposit Liabilities
1.7 Fee Branches
1.8 Leased Branches
1.9 Leases
1.10 OREO
1.11 Overdraft Lines of Credit
1.12 Personal Property
1.13 Residential Mortgage Loans
2(b) Actual Owners of Assets
3(b) Encumbrances
7(f)(vii).1 Commitments to invest in fixed
assets or leasehold improvements
7(f)(vii).2 Items contained in GMB's 1996
capital expenditure budget
7(i) Insurance Policies
8(h) TDR Loans
12(a)(iv) Exceptions to representations and
warranties regarding corporate power and authority
to execute Agreement
12(c) Exceptions to representations and
warranties regarding consents and approvals
12(d)(i) Exceptions to representations and
warranties regarding title to Real Property and
Personal Property
12(d)(ii) Exceptions to representations and
warranties regarding notice of zoning and
environmental violations
12(e)(i) Exceptions to representations and
warranties regarding validity and legality of
Loans
12(e)(ii) Exceptions to representations and
warranties regarding mortgage documentation
12(e)(iii) Exceptions to representations and
warranties regarding mortgages and security
interests in properties securing Loans
12(e)(iv) Exceptions to representations and
warranties regarding Loans' compliance with
applicable policies and laws
12(e)(v) Exceptions to representations and
warranties regarding delinquent loans
12(e)(vi) Loan Commitments
12(f) Exceptions to representations and
warranties regarding material changes or events
12(g) Exceptions to representations and
warranties regarding legal proceedings
12(h) Exceptions to representations and
warranties regarding filing of tax returns
12(i) Employees
12(j).1 Exceptions to representations and
warranties regarding timely filing of regulatory
reports and statements
12(j).2 Exceptions to representations and
warranties regarding regulatory violations
12(k) Exceptions to representations and
warranties regarding agreements with regulatory
agencies
12(l) Exceptions to representations and
warranties regarding environmental matters
12(n) Loans to Interested Persons
PURCHASE AND ASSUMPTION AGREEMENT
THIS PURCHASE AND ASSUMPTION AGREEMENT, dated
as of February 26, 1996 (this "Agreement"),
between Arrow Financial Corporation ("AFC"), a New
York business corporation having its principal
office at 000 Xxxx Xxxxxx, Xxxxx Xxxxx, Xxx Xxxx,
Arrow Vermont Corporation ("AVC"), a Vermont
business corporation having its principal office
at 00 Xxxx Xxxxxx, Xxxxxxx, Xxxxxxx, and Green
Mountain Bank ("GMB"), a Vermont-chartered banking
corporation with its principal office at 00 Xxxx
Xxxxxx, Xxxxxxx, Xxxxxxx (sometimes collectively
referred to as the "Company"), and ALBANK, FSB, a
federally-chartered stock savings bank ("ALBANK"),
having its principal office at 00 Xxxxx Xxxxx
Xxxxxx, Xxxxxx, Xxx Xxxx,
W I T N E S S E T H :
THAT WHEREAS, AFC is a bank holding company
which owns all of the capital stock of AVC, which
in turn owns all of the capital stock of GMB, a
Vermont banking corporation conducting business in
the State of Vermont; and
WHEREAS, ALBANK is a federal savings bank
conducting business in the states of New York,
Massachusetts and Vermont; and
WHEREAS, the deposit accounts of GMB are
insured by the Bank Insurance Fund ("BIF") of the
Federal Deposit Insurance Corporation (the
"FDIC"), the deposit accounts of ALBANK are
insured by the Savings Association Insurance Fund
("SAIF") of the FDIC (except for certain accounts
insured by the BIF) and the acquisition of deposit
accounts by ALBANK is subject to the approval of
the Office of Thrift Supervision ("OTS"); and
WHEREAS, GMB operates six branch offices
located at (i) 00 Xxxx Xxxxxx, Xxxxxxx, Xxxxxxx
(the "Proctor Branch"), (ii) Main Street,
Poultney, Vermont (the "Poultney Branch"), (iii) 7
Merchants Row, Middlebury, Vermont (the
"Middlebury Branch"), (iv) 00 Xxxx Xxxxxx,
Xxxxxxx, Xxxxxxx (the "Rutland Branch"), (v) Xxxxx
00, Xxxxxxx Xxxxxxxx, Xxxxxxx (the "Bondville
Branch"), and (vi) Route 149 at Bullfrog Hollow,
West Pawlet, Vermont (the "Pawlet Branch")
(individually, a "Branch," and collectively, the
"Branches"); and
WHEREAS, ALBANK desires to acquire the
Branches and to continue their operation as branch
offices of ALBANK (except for the Rutland Branch,
which ALBANK will not operate as a branch office
and as to which ALBANK will acquire only certain
assets and liabilities), and in connection
therewith ALBANK desires to acquire certain assets
and assume certain liabilities of the Company, as
hereinafter provided, and the Company desires to
transfer to ALBANK such assets and liabilities,
all in accordance with the terms and conditions
hereinafter set forth;
NOW, THEREFORE, for good and valuable
consideration, the receipt and sufficiency of
which are hereby acknowledged by the parties, the
parties hereto agree as follows:
1. DEFINITIONS.
As used herein, the following terms shall
have the following meanings:
"Account Loans" shall mean loans allocated to
the Branches which are secured by Deposits as
shown on the books and records of the Company and
which are fully secured as to principal, accrued
interest and late charges, if any. Account Loans
as of the date of Schedule 1.1 hereto are listed
on Schedule 1.1 hereto (and are to be updated (y)
as set forth in Section 7(k)(ii) and (z) as of the
Pre-closing Close of Business).
The phrase "allocated to the Branches" as to
an Asset means an Asset originated in or
administered by any of the Branches or shown on
the books and records of the Company as allocated
to any of the Branches, and as to a Deposit means
a Deposit assigned by the Company to any of the
Branches in accordance with its usual and
customary practices and procedures.
"Additional OREO" shall mean any property
that ALBANK agrees to purchase pursuant to Section
2(j).
"ALLL" shall mean the allowance for loan and
lease losses.
"ALLL Amount" shall have the meaning set
forth in Exhibit A hereto.
"Assets" shall have the meaning set forth in
Section 2(a).
"Assignments" shall have the meaning set
forth in Section 16(g)(ii)(2).
"Assumed Custodial Deposit" shall mean any
Deposit held in a Transferable Custodial Account
at Closing and any Deposit held in a
Nontransferable Custodial Account that is assumed
by ALBANK at Closing in accordance with Section
4(a)(ii).
"Assumption Agreement" shall mean an
agreement for the assumption of the Liabilities,
substantially in the form of Exhibit B to this
Agreement.
"ATM" shall mean automated teller machine.
"Auto Loan Pricing Exception" shall mean any
auto dealer pricing irregularity, whether
identified before or after the Closing Date,
associated with any indirect automobile loan
included in the Loans made by the Company under a
program with auto dealerships, of the sort
identified in a recent regulatory examination of
the Bank.
"Banking Customer" shall have the meaning set
forth in Section 7(e).
"Xxxx of Sale" shall mean a xxxx of sale with
respect to the Personal Property, substantially in
the form of Exhibit C to this Agreement.
"Business Day" shall mean any day other than
(i) a Saturday or Sunday or (ii) a day on which
banking and savings and loan institutions in the
states of Vermont and New York are authorized or
obligated by law or executive order to be closed.
"Cash on Hand" shall mean all of the cash at
the Branches, including, without limitation, xxxxx
cash, vault cash, letter cash and ATM cash.
"Closing" shall have the meaning set forth in
Section 11.
"Closing Date" shall mean the date on which
the Closing takes place as set forth in Section
11.
"Code" shall mean the Internal Revenue Code
of 1986, as amended.
"Commercial Loans" shall mean secured and
unsecured loans (other than Commercial Mortgage
Loans and Account Loans) allocated to the Branches
made for commercial or industrial purposes.
Commercial Loans as of the date of Schedule 1.2
hereto are listed on Schedule 1.2 hereto (and are
to be updated (y) as set forth in Section 7(k)(ii)
and (z) as of the Pre-closing Close of Business).
"Commercial Mortgage Loans" shall mean loans
allocated to the Branches which are (i) secured by
a Mortgage encumbering real property improved with
five or more residential units or (ii) secured by
a Mortgage encumbering real property improved with
structures for business or commercial use, or
(iii) for the construction of either of the types
of property referred to in subclauses (i) and (ii)
above. Commercial Mortgage Loans as of the date
of Schedule 1.3 hereto are listed on Schedule 1.3
hereto (and are to be updated (y) as set forth in
Section 7(k)(ii) and (z) as of the Pre-closing
Close of Business).
"Consumer Loans" shall mean secured and
unsecured loans allocated to the Branches made for
personal, family or household purposes, including
automobile and boat loans but not including
Account Loans. Consumer Loans as of the date of
Schedule 1.4 hereto are listed on Schedule 1.4
hereto (and are to be updated (y) as set forth in
Section 7(k)(ii) and (z) as of the Pre-closing
Close of Business)
"Contract" shall mean any agreement,
contract, lease (including the Premises Leases) or
other instrument made by or with respect to the
operation of any of the Branches (including an
agreement or contract with any customer regarding
any Safe Deposit Box at any of the Branches and
excluding any agreement, contract, lease or
instrument related to GMB's Trust Business)
included on Schedule 1.5 hereto (which schedule is
to be updated as of the Pre-closing Close of
Business).
"Contract Liabilities" shall mean the
liabilities of the Company under any of the
Contracts expressly assumed by ALBANK pursuant to
the terms hereof.
"Custodial Account" shall mean any XXX or
Xxxxx Plan Account.
"Custodial Deposit" shall mean any Deposit
held in a Custodial Account.
"Deposit" or "Deposits" shall mean
liabilities of GMB allocated to any of the
Branches which are defined as deposits pursuant to
Section 3(1) of the Federal Deposit Insurance Act,
as amended, 12 U.S.C. Sections 1813(1) et seq.,
including any collected and uncollected deposits
associated therewith, and any agreement relating
thereto entered into by GMB's customer in the
ordinary course in connection with making or
maintaining such deposit.
"Deposit Items" shall mean, for any date or
time, checks, drafts, withdrawal orders and items
of any kind which are deposited and credited to an
account at any of the Branches by GMB or GMB's
customers.
"Deposit Liabilities" for any date or
time shall mean those Deposits (which includes
collected and uncollected Deposits), plus accrued
but uncredited interest thereon, allocated to the
Branches or as shown on the books and records of
GMB with respect to the Branches as of the close
of business on such date or as of such time,
including but not limited to Custodial Deposits,
exclusive of (i) Deposits owed by GMB as trustee
in connection with its Trust Business, (ii)
Deposits that, as of the close of business on such
date or as of such time, have been designated
Excluded Custodial Deposits under Section
4(a)(ii), (iii) Deposits subject to remittance to
the State of Vermont pursuant to the laws of
abandoned property or escheat or similar laws as
of the close of business on such date or as of
such time, (iv) overdrawn Deposits as of the close
of business on such date or as of such time (other
than Deposits that may be overdrawn due to an
existing agreement between GMB and its customer
providing for overdraft protection), (v) Deposits
subject to legal restrictions which in the
Company's judgment prevent their transfer or in
ALBANK's judgment prevent their assumption,
including Deposits the transfer of which would
require the approval of a court which has not been
obtained and Deposits the assumption of which
would constitute a prohibited transaction under
Section 406 of the Employee Retirement Income
Security Act of 1974 or Section 4975 of the Code
for which no exemption is available, and (vi)
Deposits with respect to which the Company is a
party to litigation. Deposit Liabilities as of
the date of Schedule 1.6 hereto are listed on
Schedule 1.6 hereto and are to be updated as of
(y) the dates contemplated by Section 7(k)(i) and
(z) as of the Pre-closing Close of Business.
Schedule 1.6 indicates which Deposit Liabilities
are Nontransferable Custodial Accounts, specifying
which are XXX and which are Xxxxx Plan Accounts.
"Deposit Measuring Period" shall have
the meaning set forth in Section 5(a)(i)(F).
"Designated Employees" shall mean the
Employees designated by ALBANK as Employees to
whom it intends to offer employment, in accordance
with Section 9(b).
"Employee Agreement" shall have the
meaning provided in Section 7(f)(xiii).
"Employee Plan" shall have the meaning
provided in Section 7(f)(xiii).
"Employees" shall mean all employees of
GMB, excluding any such employees whose services
are predominately rendered in connection with the
Trust Business.
"Encumbrances" shall mean all mortgages,
claims, charges, liens, encumbrances, easements,
restrictions, options, pledges, calls,
commitments, security interests, conditional sales
agreements, title retention agreements, leases and
other restrictions of any kind and nature.
"Environment" shall have the meaning set
forth in Section 12(1)(vii).
"Environmental Laws" shall mean all
federal, state, county and local laws, regulations
or requirements relating to the Environment or any
Hazardous Material or Oil, all as may be amended
from time to time.
"Excluded Custodial Deposits" shall have
the meaning set forth in Section 4(a)(ii).
"Fee Branches" shall mean those
Purchased Branches listed on Schedule 1.7.
"Hazardous Material" shall have the
meaning set forth in Section 12(1)(vii).
"Improvements" shall mean the buildings,
structures and other improvements situated upon
the Land, which improvements, for purposes of this
Agreement, shall be deemed to exclude the Personal
Property and any signage of the Company.
"Intended Use" shall mean, with respect
to the Branches, the conduct of ALBANK's business
as a savings bank in the manner that ALBANK
currently conducts such business at its branch
offices in New York State, Massachusetts and
Vermont, and with respect to the OREO, in the case
of the OREO known as Sequoia, sale as a
development property, in the case of the OREO
known as Rivermill, operation prior to sale or
sale as a mixed use commercial property, and in
the case of Additional OREO, operation and sale as
determined by ALBANK.
"XXX" shall mean any Individual
Retirement Account all of the assets of which are
held in the form of Deposits at GMB.
"IRS" shall mean the Internal Revenue
Service.
"Xxxxx Plan Account" shall mean any
Xxxxx plan, all the assets of which are held in
the form of Deposits at GMB.
"Land" shall mean the parcels of land
described in Exhibit D annexed hereto and made
part hereof, including all easements, rights,
privileges, and appurtenances that in any way
belong or appertain to said parcels, and all the
estate, right, title and interest, if any, of the
Company in and to any land lying in the bed of any
street, road or avenue, open or proposed, in front
of or adjoining any of said parcels, to the center
line thereof, and all right, title and interest of
the Company in and to any award made or to be made
in lieu thereof and in and to any unpaid award for
damage to any portion of the Land by reason of
change of grade of any street.
"Landlords" shall mean the landlords of the
Company under the Leases.
"Late Fee Receivable" shall mean the amount
on GMB's books as of the Pre-closing Close of
Business representing accrued but uncollected fees
charged by GMB to borrowers in respect of late
payments on Loans.
"Leased Branches" means those Purchased
Branches listed as Leased Branches on Schedule
1.8.
"Leases" shall mean the leases under which
the Company is the tenant with respect to the
Leased Branches, copies of which are annexed to
Schedule 1.9.
"Liabilities" shall mean the Deposit
Liabilities and the Contract Liabilities.
"Licensed Lender" shall mean a corporation
duly organized and licensed under Title 8, Chapter
73, Sections 2201 et seq. of the Vermont Statutes
Annotated, which AFC presently intends to
establish as a wholly-owned subsidiary of itself,
AVC or GMB solely to work out loans or other real
estate owned received from GMB on or prior to the
Closing Date.
"Loans" shall mean the Account Loans, the
Overdraft Lines of Credit and the Other Loans.
"Material Adverse Effect" shall have the
meaning set forth in Section 12(a)(iii).
"Mortgage" shall mean a mortgage, deed of
trust or other security instrument creating a lien
upon real property and any other property
described therein, together with any assignment,
reinstatement, extension, endorsement or
modification thereof.
"Nontransferable Custodial Account" shall
mean any Nontransferable XXX or Nontransferable
Xxxxx Plan Account.
"Nontransferable XXX" or "Nontransferable
Xxxxx Plan Account" for any date or time shall
mean any XXX or Xxxxx Plan Account, respectively,
which, as of the close of business on such date or
as of such time, is not a Transferable XXX or
Transferable Xxxxx Plan Account, in light of all
laws, rules, regulations, documentation and
customer agreements or directions then applicable
to such account.
"Oil" shall have the meaning set forth in
Section 12(l)(vii).
"OREO" shall mean the properties known as
"Rivermill" (valued for purposes of this Agreement
at $800,000) and "Sequoia" (valued for purposes of
this Agreement at $130,000) and more particularly
described on Schedule 1.10, together with any
Additional OREO described on Schedule 1.10, which
shall be revised each time that Additional OREO is
added on or prior to the Pre-closing Close of
Business.
"Other Loans" shall mean Commercial Mortgage
Loans, Residential Mortgage Loans, Consumer Loans,
Commercial Loans and TDR Loans.
"Overdraft Lines of Credit" shall mean the
principal amount, accrued interest and late
charges, if any, with respect to all overdraft
lines of credit allocated to the Branches and
which are not sixty (60) days or more delinquent
in the payment of principal or interest (as
determined from the date that any such payment was
actually due and without respect to any grace
period relating to the assessment of late fees).
Overdraft Lines of Credit as of the date of
Schedule 1.11 hereto are listed on Schedule 1.11
hereto (and are to be updated (y) as set forth in
Section 7(k)(ii) and (z) as of the Pre-closing
Close of Business).
"Payment Items" shall mean, for any date or
time, checks, drafts, withdrawal orders and other
similar items drawn on an account at any of the
Branches.
"Permitted Encumbrances" shall have the
meaning set forth in Section 3(b).
"Permitted Exceptions" shall have the meaning
set forth in Section 3(a).
"Personal Property" shall mean all of the
furniture, furnishings, equipment, leasehold
improvements, trade fixtures and other tangible
personal property, owned or (to the extent of its
lessee's interest) leased by the Company (except
the Improvements) at the Purchased Branches. The
Personal Property as of the date hereof is listed
on Schedule 1.12 hereto (which list is to be
updated as of the Pre-closing Close of Business).
"Pre-closing Close of Business" shall mean
the close of business on the Business Day
immediately preceding the Closing Date.
"Premises Leases" shall mean the leases under
which the Company is the landlord, copies of which
are annexed to Schedule 1.5.
"Prepaid Expenses" shall have the meaning set
forth in Section 2(a)(vii).
"Proration Charges" shall have the meaning
set forth in Section 2(c).
"Purchased Branches" shall mean all the
Branches except for the Rutland Branch.
"Real Property" shall mean the Land and
Improvements and the OREO but shall exclude those
parcels of land upon which is situated GMB's
office at 00 Xxxx Xxxxxx, Xxxxxxx, Xxxxxxx, and
all buildings, structures and other improvements
on such excluded parcels.
"Real Property Assets" shall mean all of the
Company's right, title and interest in and to the
Real Property and in and to the estates of the
Company as tenant under the Leases.
"Residential Mortgage Loans" shall mean loans
allocated to the Branches secured by a Mortgage
encumbering real property improved with
residential units for one to four families, and
loans to construct such units, and home equity
lines of credit. Residential Mortgage Loans as of
the date of Schedule 1.13 hereto are listed on
Schedule 1.13 hereto (and are to be updated (y) as
set forth in Section 7(k)(ii) and (z) as of the
pre-Closing Close of Business).
"Safe Deposit Boxes" shall mean all safe
deposit boxes located at each of the Branches.
"Sale and Assignment Agreement" shall mean an
agreement for the sale and assignment of the
Account Loans, the Overdraft Lines of Credit and
the Other Loans, substantially in the form of
Exhibit E to this Agreement.
"Servicing Purchase Agreement" shall mean an
agreement between AFC, AVC and GMB and ALBANK of
even date herewith, providing for the sale,
transfer and conveyance of the Servicing Business,
attached as Exhibit F to this Agreement.
"Servicing Business" shall have the meaning
set forth in the Servicing Purchase Agreement.
"Small Loans" shall have the meaning set
forth in Section 12(e)(vii).
"Systems Conversion" shall have the meaning
set forth in Section 10.
"Taxes" shall have the meaning set forth in
Section 12(h).
"TDR Loans" shall have the meaning set forth
in Section 8(h).
"TIN" shall mean Taxpayer Identification
Number.
"Title Company" shall have the meaning set
forth in Section 15(a).
"Title Objections" shall have the meaning set
forth in Section 15(a).
"Transferable Custodial Account" shall mean
any Transferable XXX or Transferable Xxxxx Plan
Account.
"Transferable XXX" or a "Transferable Xxxxx
Plan Account" for any date or time shall mean any
XXX or Xxxxx Plan Account with respect to which,
as of the close of business on such date or as of
such time, GMB may resign as trustee or custodian
and appoint ALBANK as successor trustee or
custodian, without the consent, approval or other
action of any other party (other than ALBANK's
acceptance of such appointment), including the
grantor of the XXX or named fiduciary of the Xxxxx
Plan or any court, in light of all laws, rules,
regulations, documentation, and customer
agreements or directions then applicable to such
account, and shall also mean any XXX or Xxxxx Plan
Account as to which the grantor of the XXX or
named fiduciary of the Xxxxx Plan has instructed
GMB to name ALBANK as successor trustee or
custodian.
"Trust Business" shall mean all trust
accounts of GMB and all tangible and intangible
assets, liabilities and obligations of the Company
used in, or made by or with respect to, the
operations of GMB in its trust business, but
excluding any Custodial Accounts that are in trust
form, any assets, liabilities or obligations used
therein or made with respect thereto, and any
Assumed Custodial Deposits held in trust accounts.
"Trust Customer" shall mean as of a specified
date, those persons, including partnerships,
trusts, estates, corporations and individuals,
having trust accounts, trust relationships or
other trust-related customer business with GMB
that constitutes part of the Trust Business.
"Trust Transfer Transaction" shall have the
meaning set forth in Section 2(h).
"Violation Notice" shall have the meaning set
forth in Section 12(d)(ii).
2. TERMS OF PURCHASE.
(a) Purchase and Sales of Assets. At the
Closing, subject to the terms and conditions set
forth herein, the Company shall sell, convey,
assign, transfer and deliver to ALBANK, and ALBANK
shall purchase from the Company, all of the
Company's right, title and interest as of the
Pre-closing Close of Business in and to the
following assets (collectively, the "Assets"):
(i) the Real Property Assets, subject
to Section 2(j) with respect to OREO;
(ii) the Personal Property and the Safe
Deposit Boxes;
(iii) the Cash on Hand;
(iv) the Loans;
(v) the Servicing Business, unless the
Servicing Purchase Agreement has been terminated,
as provided for therein;
(vi) all rights to the Late Fee
Receivable;
(vii) all prepaid expenses of the
Branches determined in accordance with generally
accepted accounting principles as of the
Pre-closing Close of Business (the "Prepaid
Expenses");
(viii) all rights to and under each
of the Contracts to be assigned to ALBANK, subject
to Section 2(g); and
(ix) all records and original documents
pertaining to the Real Property Assets, the
Personal Property, the Cash on Hand, the Loans,
the Servicing Business, the Prepaid Expenses, the
Late Fee Receivable and the Contracts.
(b) Transfer of Assets. The transfer of the
Assets hereunder to ALBANK shall be by appropriate
deeds, bills of sale or assignments substantially
in the forms annexed hereto as exhibits and, to
the extent the transfer of particular Assets is
not covered by such forms, in forms acceptable to
both ALBANK and the Company, together with such
additional documents and instruments as shall be
reasonably necessary to consummate such transfer.
Schedule 2(b) to this Agreement identifies the
actual owner or owners (whether GMB, AVC and/or
AFC) of each of the Assets as of the date hereof.
The Company shall not take any action, or permit
any omission, to affect, as between GMB, AVC or
AFC, the ownership of any such Assets prior to the
Closing without the prior written consent of
ALBANK, such consent not to be unreasonably
withheld.
(c) Proration. Except as otherwise
specifically provided in this Agreement, it is the
intention of the parties hereto that the Company
shall operate for its own account the business
being transferred pursuant to this Agreement until
the Pre-closing Close of Business, and that ALBANK
shall operate for its own account the business
being transferred pursuant to this Agreement
effective on and after the Closing Date. Thus,
except as otherwise specifically provided in this
Agreement or the Servicing Purchase Agreement,
items of income and expense, including, but not
limited to, payments of rent, taxes, utilities and
other amounts required to be paid by the tenant
under the Leases, all personal property taxes
applicable to the Personal Property to be
transferred hereunder, employee compensation,
insurance premiums related to the Branches or the
Assets (provided, however, that such insurance is
to continue in effect for the benefit of ALBANK on
and after the Closing Date), FDIC insurance
premiums related to the Deposit Liabilities, and
fee income, shall be prorated as of the
Pre-closing Close of Business on the basis of
30-day months and a 360-day year (or with respect
to FDIC insurance premiums, real estate taxes and
water and sewer rents and charges as hereinafter
provided) ("Proration Charges"). To the extent
that the Company may have prepaid any of the
Proration Charges as of the Pre-closing Close of
Business or if the amount thereof is then a known
sum certain, such as security deposits made by the
Company with respect to any Lease or other
transferred assets or assumed liabilities, all of
which shall be held on and after the Closing Date
for the benefit of ALBANK, then the amount of such
Prepaid Expenses shall be used in calculating the
payments pursuant to Section 5. To the extent
that the amount of any of the Proration Charges is
not known as of the Pre-closing Close of Business,
then the parties shall pay to the appropriate
payee (including, if applicable, the other party)
their respective pro rata share of the same after
the Closing Date within ten (10) days after
written demand therefor. Prorations of FDIC
premiums for periods subsequent to the Closing
Date shall be determined on the basis of a
fraction, the numerator of which is the amount of
the Deposit Liabilities assumed by ALBANK
hereunder and the denominator of which is the
amount of Deposits at the Branches used in
calculating FDIC insurance premiums; provided,
however, that such fraction shall not be greater
than one (1.0). Real estate taxes, water and
sewer charges, and fuel charges shall be
appropriately apportioned as follows: (i) current
real estate taxes and water and sewer rents and
charges, if any, on the basis of the fiscal year
for which assessed, and (ii) water meter charges,
if applicable, as hereinafter provided. If, with
respect to one or more of the Branches, (x) the
Closing shall occur before the tax rate for the
Real Property is fixed, the apportionment of real
estate taxes for said Branch(es) shall be upon the
basis of the tax rate for the next preceding year
applied to the latest assessed valuation and (y)
there is a water meter on the Real Property, the
Company shall furnish a reading to a date not more
than thirty (30) days prior to the Closing Date,
and the unfixed meter charge based thereon for the
intervening time shall be apportioned on the basis
of such last reading. The Company will use its
best efforts to obtain final bills as of the
Pre-closing Close of Business for all Proration
Charges. The Company shall be entitled to any Tax
refund received by ALBANK after the Closing Date
with respect to Taxes paid by the Company for
periods ending prior to the Closing Date.
(d) Items in Transit. ALBANK shall obtain
the benefit of all items relating to or
originating from the Branches which are in transit
as of the Pre-closing Close of Business and are
handled in accordance with the Company's usual and
customary practices and procedures.
(e) Books and Records. The Company shall
deliver to ALBANK: (i) all records and original
documents located at the Branches or in
centralized servicing areas pertaining to the
Branches, Assets or Liabilities acquired from the
Company pursuant to this Agreement and the
Servicing Purchase Agreement; and (ii) an account
history of all accounts related to Deposit
Liabilities, Account Loans and Overdraft Lines of
Credit for a period including at least the year in
which the Closing Date occurs and the calendar
year prior to the Closing Date, or such lesser
period for which the Company customarily retains
such records. Such records and documents shall
include all existing signature cards, legal files,
pending files, all Deposit agreements, Account
Loan agreements, Overdraft Line of Credit
agreements and computer records. Subject to the
provisions of Section 14(i), the records and
documents acquired by ALBANK hereunder shall be
open for inspection by the Company, its authorized
representatives and regulators, and the Company
may, at its own expense, make such copies of and
excerpts from such books and records as it may
deem desirable. ALBANK agrees to maintain all
books and records relating to the Branches for the
period required by law, unless the Company shall,
applicable law permitting, agree upon a shorter
period. ALBANK shall give the Company notice
before ALBANK destroys or otherwise disposes of
any such books and records, and, subject to the
provisions of Section 14(i), the Company shall
have the opportunity to have any such books and
records as are scheduled for destruction by ALBANK
delivered to the Company, at the Company's
expense, if requested by the Company following
such notice.
(f) Sales Taxes. All sales taxes on
Personal Property which are payable or arise as a
result of this Agreement or the consummation of
the purchase and sale contemplated by this
Agreement shall be paid or paid for by ALBANK
whether such taxes are imposed, under applicable
law, upon ALBANK or the Company.
(g) Contracts. ALBANK may elect to be
assigned the rights of the Company, and to assume
the liabilities of the Company, under any Contract
that it elects to continue by giving written
notice to the Company of such Contracts at least
10 Business Days prior to the Closing Date. Upon
receipt of such notice, the Company will
immediately advise ALBANK whether any breaches,
defaults, claims or similar occurrences have
occurred or are pending or, to the knowledge of
the Company, threatened with respect to any such
Contract, and ALBANK may notify the Company within
two Business Days of receiving such advice whether
it elects to be assigned the rights and to assume
the liabilities of the Company under such
Contract.
(h) No Purchase of Trust Business; Trust
Transfer Transactions. ALBANK is not purchasing,
and no provision of this Agreement shall be
construed to convey or transfer, GMB's Trust
Business. Nothing in this Agreement shall
preclude the Company from negotiating and entering
into an agreement or agreements with one or more
parties unaffiliated with the Company or ALBANK
(any such party, a "Counterparty") involving the
transfer by the Company to the Counterparty of any
of the Trust Business or the assets or liabilities
of the Company related thereto (specifically
excluding any Custodial Accounts and Assumed
Custodial Deposits) or any business combination
transaction accomplishing the equivalent of any
such transfer (any such transaction, a "Trust
Transfer Transaction"), provided, however, that
(i) the Company shall not enter into an agreement
for or consummate any such Trust Transfer
Transaction if doing so would (A) materially
impair the ability of the parties to this
Agreement to consummate the transactions provided
for herein under the terms and conditions provided
for herein, or (B) subject to the provisions of
Section 11, materially affect the timing of such
consummation or materially decrease the likelihood
that the transactions provided for herein will be
completed; (ii) on and after consummation of any
such Trust Transfer Transaction, all the
obligations, covenants, agreements,
representations, warranties and indemnifications
incurred or given by the Company and its
affiliates in and under this Agreement shall
continue to be the obligations, covenants,
agreements, representations, warranties and
indemnifications of AFC and its continuing
subsidiaries and affiliates, regardless of whether
the Counterparty in such Trust Transfer
Transaction succeeds, as a matter of law or
contract, to any of the foregoing upon
consummation of such transaction; (iii) on and
after consummation of any such Trust Transfer
Transaction, all the rights obtained by ALBANK and
its affiliates in and under this Agreement as
against the Company and its affiliates shall
continue to be rights possessed by ALBANK and its
affiliates as against AFC and its continuing
subsidiaries and affiliates, regardless of whether
such rights also may then be asserted by ALBANK
and its affiliates, as a matter of law or
contract, against the Counterparty in such Trust
Transfer Transaction; (iv) the Company shall
include in the definitive agreement for any Trust
Transfer Transaction (the "Trust Transfer
Agreement") a provision under which each
Counterparty thereto (A) agrees, from the
execution of such Trust Transfer Agreement until
the date that is three years after consummation of
the Trust Transfer Transaction, not to use to its
own advantage, and to ensure that none of its
affiliates uses to its advantage, any non-public
information relating to the Company, specifically
including GMB, obtained by such Counterparty
directly or indirectly from the Company or its
current or former employees that does not
reasonably relate to the Trust Business being
acquired by such Counterparty in the Trust
Transfer Transaction ("Counterparty Restricted
Information"), whether such Counterparty
Restricted Information may have been or may be
obtained by the Counterparty, its affiliates,
representatives, or agents or employees of any of
the foregoing (collectively, the "Counterparty
Group") in the course of negotiations or
investigations leading to execution of the Trust
Transfer Agreement or consummation of the Trust
Transfer Transaction or may be obtained by any of
the Counterparty Group after such consummation
from former employees of the Company, which
provisions shall specifically reference, without
limiting the generality of the foregoing, that
information related to deposit and lending
operations of GMB is Counterparty Restricted
Information, and shall further specifically
reference as a prohibited usage of Counterparty
Restricted Information thereunder, any
solicitation by such Counterparty or its
affiliates of any Individual Retirement Account or
Xxxxx Plan business from those customers of GMB
whose IRAs and Xxxxx Plan Accounts are not being
transferred to the Counterparty thereunder, to the
extent that such customers may have been or may be
specifically identified by the Counterparty or its
affiliates as a result of information obtained by
any one or more of the Counterparty Group from the
Company or its employees in the course of
negotiations or investigations leading to
execution of the Trust Transfer Agreement or
consummation of the Trust Transfer Transaction or
after consummation thereof from former employees
of the Company, and (B) agrees to return to the
Company, destroy or not make use of all of such
Counterparty Restricted Information taking the
form of documents, books, records or tapes and to
destroy any electronic records in its possession
containing such Counterparty Restricted
Information; (v) from the date hereof until three
years after the Closing Date hereunder, the
Company will not disclose or make available to any
Counterparty in any Trust Transfer Transaction
(except for any required disclosure under
regulatory applications) any of the nonpublic
information directly or indirectly related to any
of the Assets or Liabilities being acquired or
assumed by ALBANK hereunder, except for any such
information (non-customer specific, in any event)
which is also directly related to the Trust
Business being acquired by the Counterparty or
Counterparties under the Trust Transfer Agreement
and is necessary to be disclosed to the
Counterparty or Counterparties thereunder,
provided that the Company will in no event
disclose during such period to any Counterparty in
any Trust Transfer Transaction or any person
proposed to be a Counterparty in any such
transaction the identity of those XXX or Xxxxx
Plan Account customers whose Custodial Deposits
are being transferred to ALBANK hereunder; and
(vi) the Company shall fully indemnify ALBANK as
provided in Section 21(c)(iv) with respect to any
and all claims or charges by such Counterparty (or
any other third party) against ALBANK with respect
to GMB's operation of the Trust Business prior to
the consummation of any Trust Transfer
Transaction.
(i) Actions Against Former Affiliates. If,
after the date hereof, the Company elects to
pursue any claim or action, in law or equity, or
becomes a named party to any action by or in the
right of the Company, against or with respect to
any of the directors or officers, past or present,
of GMB or AVC or the predecessor companies of
either, relating to any loans to, or other
transactions involving, such persons or their
affiliates but not involving the Loans or other
Assets subject to this Agreement, the Company
shall be entitled to any and all proceeds of any
such claim or action. If, after the Effective
Date, ALBANK or its successors or affiliates
nevertheless shall receive any proceeds of any
such claim or action, ALBANK shall assure that
such proceeds are delivered and given over
immediately to the Company. ALBANK agrees that,
if the Company, in its sole discretion, shall
request that ALBANK, before or after the Closing
Date, provide the Company with copies of documents
in its possession that would assist the Company in
the prosecution of any such claim or the retention
by the Company of any such right, title or
interest in and to any such future proceeds,
ALBANK shall as soon as is practicable, and at the
expense of the Company, provide the Company with
copies of such documents, provided, however, that
ALBANK receives satisfactory indemnification from
the Company with respect to any claims, costs,
actions or legal proceedings brought against or
incurred by ALBANK or any of its affiliates as a
result of the production of documents by ALBANK or
the doing of any other act or thing or the
execution and delivery of any document or
instrument by ALBANK in order to assist and
cooperate with the Company.
(j) OREO. In the event that prior to the
Closing Date, the Company acquires real property
as other real estate owned as a result of
foreclosure or acceptance of deed in lieu of
foreclosure (each such property, "New OREO"), the
Company shall provide ALBANK with all
documentation regarding the related Loan, such
foreclosure and such New OREO. Thereafter, the
parties shall endeavor in good faith to agree on a
purchase price for the New OREO. If the parties
agree, the New OREO shall become Additional OREO
and the purchase price therefor shall be added to
the OREO Amount, as provided in Section
5(a)(i)(I). If the parties are unable to agree on
a purchase price therefor, ALBANK shall not be
required to purchase such New OREO.
3. CONVEYANCE OF ASSETS.
(a) Real Property Assets. At the Closing,
subject to the terms and conditions set forth
herein, the Company shall convey, assign and
transfer to ALBANK all of the Company's right,
title and interest in and to the Real Property
Assets, subject to (i) the Leases and the Premises
Leases; (ii) the title exceptions, other than
Title Objections, contained in the commitment(s)
issued by the Title Company; (iii) any state of
facts shown on current accurate surveys or survey
inspections of the Real Property obtained in
accordance with Section 15(a), provided that none
of said facts interferes with the Intended Use of
any portion of the Real Property and provided
further that none of said facts constitutes a
Title Objection; (iv) laws, ordinances and
governmental regulations governing the occupancy
or use of the Real Property, provided that none of
the foregoing interferes with the Intended Use of
any portion of the Real Property; and (v) real
estate taxes and water and sewer rents and charges
not yet due and payable, provided that the same
are apportioned at the Closing as provided in
Section 2(c) (collectively the "Permitted
Exceptions").
(b) Personal Property and Safe Deposit
Boxes. At the Closing, subject to the terms and
conditions set forth herein, the Company shall
convey, assign and transfer to ALBANK all of the
Company's right, title and interest in and to the
Personal Property and Safe Deposit Boxes as of the
Pre-closing Close of Business, free and clear of
all Encumbrances other than the Encumbrances
existing on the date hereof listed on Schedule
3(b) and immaterial Encumbrances incurred
subsequent to the date hereof and prior to the
Pre-closing Close of Business in the ordinary
course of the Company's business (collectively,
the "Permitted Encumbrances"). The Company shall
cause the Xxxx of Sale to be delivered to ALBANK
on the Closing Date to effect such conveyance,
assignment and transfer, which shall contain a
brief description of the items being transferred.
(c) Cash on Hand. At the Closing, subject
to the terms and conditions set forth herein, the
Company shall deliver to ALBANK all Cash on Hand,
as of the Pre-closing Close of Business.
(d) Account Loans. At the Closing, subject
to the terms and conditions set forth herein, the
Company shall convey, assign and transfer to
ALBANK all of GMB's right, title and interest in
and to the Account Loans as of the Pre-closing
Close of Business, free and clear of all
Encumbrances. The Company shall cause the Sale
and Assignment Agreement to be delivered to ALBANK
to effect such conveyance, assignment and
transfer, which shall specify the Account Loans
being transferred. At the Closing, the Company
shall also deliver to ALBANK the original executed
promissory notes or other evidences of
indebtedness relating to the Account Loans, duly
endorsed or otherwise assigned in favor of ALBANK,
together with any ancillary agreements between GMB
and the borrowers relating to such Account Loans
and any passbooks held by GMB as collateral for
such Account Loans.
(e) Overdraft Lines of Credit. At the
Closing, subject to the terms and conditions set
forth herein, the Company shall convey, assign and
transfer to ALBANK all of GMB's right, title and
interest in and to the Overdraft Lines of Credit
as of the Pre-closing Close of Business, free and
clear of all Encumbrances. The Company shall
cause the Sale and Assignment Agreement to be
delivered to ALBANK to effect such conveyance,
assignment and transfer, which shall specify the
Overdraft Lines of Credit being transferred. At
the Closing, the Company shall deliver to ALBANK
the original executed documentation relating to
the Overdraft Lines of Credit being transferred,
duly endorsed or otherwise assigned in favor of
ALBANK or, if such originals are unavailable,
copies thereof duly endorsed or otherwise assigned
in favor of ALBANK.
(f) Other Loans. At the Closing, subject to
the terms and conditions set forth herein, the
Company shall convey, assign and transfer to
ALBANK all of GMB's right, title and interest in
and to the Other Loans as of the Pre-closing Close
of Business, free and clear of all Encumbrances.
The Company shall cause the Sale and Assignment
Agreement to be delivered to ALBANK to effect such
conveyance, assignment and transfer, which shall
specify the Other Loans being transferred. At the
Closing, the Company shall also deliver to ALBANK
the original executed promissory notes, mortgage
notes or other evidences of indebtedness relating
to the Other Loans; the Mortgages, duly endorsed
or otherwise assigned in favor of ALBANK; mortgage
assignments; consolidation, extension, written
assurance or substitution agreements; security
agreements; UCC financing statements; guarantees,
assignments of leases, rents and profits; and any
other ancillary agreements between GMB and the
borrowers relating to such Other Loans.
(g) Servicing Business. At the Closing,
subject to the terms and conditions set forth
herein and in the Servicing Purchase Agreement,
the Company shall convey, assign and transfer to
ALBANK all of GMB's right, title and interest in
and to the Servicing Business as provided in the
Servicing Purchase Agreement, unless the Servicing
Purchase Agreement has been terminated, as
provided for therein.
(h) Late Fee Receivable. At the Closing,
the Company shall convey, assign and transfer to
ALBANK all of the Company's right, title and
interest in and to the Late Fee Receivable.
4. LIABILITIES.
(a) Assumption of Liabilities. At the
Closing, subject to the terms and conditions set
forth herein, ALBANK shall assume and undertake to
pay, perform, fulfill and discharge, as of the
Pre-closing Close of Business, the Liabilities as
shown on the books and records of the Company as
of the Pre-closing Close of Business, in
accordance with the terms of such Liabilities in
effect at such time, and none other. The
assumption of Liabilities shall be by the
Assumption Agreement and such other documents as
shall reasonably be deemed necessary by the
Company and ALBANK to effect such assumption.
(i) On the Closing Date, the Company
shall deliver to ALBANK the signature cards,
orders and contracts between the Company and the
depositors at each of the Branches in respect of
the Deposit Liabilities as of 12:01 a.m. on the
Business Day immediately prior to the Closing Date
and other records of a similar character in the
Company's possession at such time, all deposit
slips, canceled checks, withdrawal orders and
statements in the Company's possession
representing or reflecting charges to said
depositors, and all books of account, records and
microfilm, and the forms of rules and regulations
applicable to the Branches.
(ii) As of the Pre-closing Close of
Business, GMB shall resign as trustee or
custodian, as applicable, under the Transferable
Custodial Accounts and appoint ALBANK as successor
trustee or custodian, as applicable, thereunder,
and ALBANK agrees to accept each such appointment
and to assume all fiduciary obligations with
respect thereto as of the Pre-closing Close of
Business. The Deposits held in such accounts as
of the Pre-closing Close of Business shall be
included in the Deposit Liabilities hereunder as
"Assumed Custodial Deposits." The Deposits in the
Nontransferable Custodial Accounts as of the
Pre-closing Close of Business also shall be
included in the Deposit Liabilities hereunder as
"Assumed Custodial Deposits" unless (A) ALBANK, by
written notice delivered to the Company at least
thirty (30) days prior to the anticipated Closing
Date, shall have elected for "good cause" as
identified by ALBANK to the Company to have some
or all such Deposits excluded from the Deposit
Liabilities, in which event such deposits shall be
excluded from the Deposit Liabilities hereunder,
or (B) the grantor of any Nontransferable XXX or
the named fiduciary of any Nontransferable Xxxxx
Plan Account shall have given express instructions
to GMB for the naming of a successor trustee or
custodian, as applicable, on or prior to the
Pre-closing Close of Business and such named
successor trustee or custodian is not ALBANK (any
deposits excluded under (A) and (B), "Excluded
Custodial Deposits"). The "good cause" identified
by ALBANK under clause (A) of the foregoing
sentence shall not include any earlier
determination by GMB that it is unable to resign
as trustee or custodian and/or appoint ALBANK as
successor trustee or custodian with respect to any
Nontransferable Custodial Accounts. On and after
the Closing Date, GMB shall continue to serve as
trustee or custodian, as applicable, of each
Nontransferable XXX and Nontransferable Xxxxx Plan
Account, whether the Deposits held therein as of
the Pre-closing Close of Business are Assumed
Custodial Deposits or Excluded Custodial Deposits,
unless on or prior to the Pre-closing Close of
Business the grantor of any Nontransferable XXX or
the named fiduciary of any Nontransferable Xxxxx
Plan shall have given GMB express instructions
naming ALBANK as the successor trustee or
custodian, as applicable, in which event GMB shall
comply with such instructions and such XXX or
Xxxxx Plan Account will become a Transferable
Custodial Account. With respect to any
Nontransferable Custodial Account that is an
Assumed Custodial Deposit for which GMB continues
to serve as trustee or custodian on and after the
Closing Date, GMB shall (i) use its best efforts
to obtain, and cooperate with ALBANK's efforts to
obtain, the documentation or customer agreements
or directions necessary to permit GMB to resign as
trustee or custodian and appoint ALBANK as
successor trustee or custodian; (ii) perform its
duties as trustee or custodian in a prudent and
diligent manner consistent with its past
practices; and (iii) promptly provide ALBANK with
copies of any correspondence or other
documentation relating to GMB's trusteeship or
custodianship of such accounts to which ALBANK
should have access as depository. The Company
shall deliver to the grantor of each XXX and the
named fiduciary of each Xxxxx Plan Account such
notice of the foregoing as is required by the
documentation governing each such account and
applicable law and regulation or is otherwise
deemed prudent by GMB as trustee or custodian of
such account, after consultation with ALBANK.
(iii) On the Closing Date, the
Company shall deliver to ALBANK copies of the
Contracts (annexed to Schedule 1.5 attached
hereto, as updated) to be assumed by ALBANK,
subject to Section 2(g).
(b) Non-Assumption of Liabilities. ALBANK
shall not assume or be bound by any duties,
responsibilities, obligations or liabilities of
the Company of any kind or nature, known, unknown,
contingent or otherwise, other than those
obligations and liabilities expressly assumed by
it pursuant to Section 4(a) or Section 2(f) or
under the Servicing Purchase Agreement or those
matters specifically indemnified against by it
pursuant to Section 21(b). Without limiting the
generality of the foregoing, it is understood that
ALBANK does not assume, undertake or accept any
duties, responsibilities, obligations or
liabilities of the Company:
(i) to employees or former employees of
the Company or any of their beneficiaries, heirs
or assignees, including (A) any pension, accrued
vacation or other liabilities, (B) any liabilities
arising from the termination, pursuant to Section
9(b)(iv), by the Company of Employees (or any
liabilities from termination by the Company of any
employees of the Trust Business) and (C) any
liabilities arising by virtue of any collective
bargaining relationship or agreement or pursuant
to the National Labor Relations Act or any other
labor relations law;
(ii) to the Pension Benefit Guaranty
Corporation or any similar organization, whether
arising out of the employment by the Company of
any employees or former employees, out of the
transactions contemplated by this Agreement or
otherwise;
(iii) with respect to (A) any
income, profits, franchise or similar tax; (B) any
claims arising out of actions taken by the Company
with respect to the Deposits or Account Loans,
Overdraft Lines of Credit, Other Loans or
Servicing Business; (C) any claims for personal
injury, property damage or consequential damages
relating to the condition or operation of the Real
Property or Personal Property, or otherwise, (D)
any losses or liabilities due to or arising from
forgery or from any fraud, defalcation or any
other improper act or omission on the part of the
Company, (E) any liability or obligation of the
Company arising out of any threatened or pending
litigation or (F) the Company's operation of the
Trust Business; or
(iv) under any statute, rule or
regulation, including, but not limited to,
antitrust, bank secrecy, civil rights, health,
safety, labor, discrimination and environmental
laws, rules and regulations.
5. CONSIDERATION AND SETTLEMENT.
(a) As consideration for the assumption by
ALBANK of the Liabilities pursuant to Section 4(a)
and for the purchase by ALBANK of the Assets
pursuant to Section 2(a), the Company and ALBANK
shall make payments to each other, in accordance
with the procedures set forth in Section 5(b), as
follows:
(i) ALBANK shall pay to AVC or GMB, as
AVC may designate:
(A) an amount (the "Account Loan
Amount") equal to the book value as of the
Pre-closing Close of Business of the Account Loans
which are being transferred to ALBANK hereunder,
as carried under generally accepted accounting
principles on the books and records of the Company
maintained for financial accounting purposes;
(B) an amount (the "Overdraft
Lines of Credit Amount") equal to the book value
as of the Pre-closing Close of Business of the
Overdraft Lines of Credit which are being
transferred to ALBANK hereunder, as carried under
generally accepted accounting principles on the
books and records of the Company maintained for
financial accounting purposes;
(C) an amount (the "Other Loan
Amount") equal to the book value as of the
Pre-closing Close of Business of the Other Loans
which are being transferred to ALBANK hereunder,
as carried under generally accepted accounting
principles on the books and records of the Company
maintained for financial accounting purposes,
reduced by the ALLL Amount;
(D) an amount (the "Personal
Property Amount") equal to the net book value as
of the Pre-closing Close of Business of the
Personal Property and Safe Deposit Boxes which are
being transferred to ALBANK hereunder, as carried
under generally accepted accounting principles on
the books and records of the Company maintained
for financial accounting purposes;
(E) an amount (the "Real Property
Amount") equal to the net book value as of the
Pre-closing Close of Business of the Real Property
Assets that are being transferred hereunder, as
carried under generally accepted accounting
principles on the books and records of the Company
maintained for financial accounting purposes;
(F) an amount (the "Premium
Amount") equal to seven and one-half percent
(7-1/2%) of the average daily amount of the
Deposit Liabilities measured at the close of
business of each Business Day during a period (the
"Deposit Measuring Period") commencing ten (10)
Business Days prior to the Closing Date and ending
ten (10) Business Days after the Closing Date (or
commencing and ending as set forth in Section
7(d)), less two and one-half percent (2-1/2%) of
the average daily amount of Nontransferable
Custodial Accounts that are Assumed Custodial
Deposits measured at the close of business of each
Business Day during the Deposit Measuring Period;
(G) an amount (the "Prepaid
Expense Amount") equal to the book value as of the
Pre-closing Close of Business of the Prepaid
Expenses, as carried under generally accepted
accounting principles on the books and records of
the Company maintained for financial reporting
purposes;
(H) an amount (the "Cash on Hand
Amount") equal to the Cash on Hand as of the
Pre-closing Close of Business;
(I) an amount (the "OREO Amount")
equal to (i) $930,000 ($800,000 for Rivermill and
$130,000 for Sequoia) for the OREO and (ii) the
purchase price agreed on pursuant to Section 2(j)
for any Additional OREO;
(J) an amount (the "Servicing
Business Amount") equal to $25,000 for the
Servicing Business (if the Servicing Purchase
Agreement has not been terminated, as provided for
therein); and
(K) an amount (the "Late Fee
Amount") equal to the lesser of $25,000 or
thirty-two percent (32%) of the Late Fee
Receivable as of the Pre-closing Close of
Business, as certified to ALBANK on the Closing
Date.
(ii) The Company shall pay to ALBANK an
amount (the "Deposit Liabilities Amount") equal to
the Deposit Liabilities as of the Pre-closing
Close of Business.
(b) The Company and ALBANK shall make
payments of the amounts set forth in Section 5(a)
as follows:
(i) On or before the Closing Date,
ALBANK and the Company shall agree in writing upon
estimates of the Account Loan Amount, the
Overdraft Lines of Credit Amount, the Other Loan
Amount, the Personal Property Amount, the Real
Property Amount, the Prepaid Expense Amount, the
Cash on Hand Amount and the Deposit Liabilities
Amount in each case as of 12:01 a.m. on the
Business Day immediately prior to the Closing
Date, and a good faith estimate of the Premium
Amount. All calculations made for purposes of
this Section 5(b) shall be made on the assumption
(which is consistent with ALBANK's practice) that
interest on the Deposit Liabilities assumed by
ALBANK pursuant to Section 4(a) begins to accrue
on the day of deposit and does not accrue on the
day of withdrawal.
(ii) On the Closing Date, ALBANK shall
transfer to an account of AVC or GMB, as AVC may
designate, in accordance with wire transfer
instructions provided to ALBANK an amount (the
"Estimated Amount") equal to the sum of the
Account Loan Amount, the Overdraft Lines of Credit
Amount, the Other Loan Amount, the Personal
Property Amount, the Real Property Amount, the
Premium Amount, the Prepaid Expense Amount and the
Cash on Hand Amount, in each case as estimated by
ALBANK and the Company pursuant to Section 5(b)(i)
above, the OREO Amount as set forth in Section
5(a)(i)(I) above, the Servicing Business Amount as
set forth in Section 5(a)(i)(J) above and the Late
Fee Amount as set forth in Section 5(a)(i)(K)
above, less the Deposit Liabilities Amount
estimated by ALBANK and the Company pursuant to
Section 5(b)(i) above, provided, however, that if
the Estimated Amount as calculated in accordance
with the preceding clauses of this Section
5(b)(ii) shall be a negative number, AVC or GMB
shall transfer to an account of ALBANK, in
accordance with wire transfer instructions
provided by ALBANK, an amount equal to the
Estimated Amount multiplied by negative one
(-1.0).
(iii) Within ten (10) Business Days
after the Deposit Measuring Period has ended, AFC
shall deliver to ALBANK a written report
certified, to his best knowledge and belief, by
its chief financial officer which shall set forth
the Company's calculation of the actual amounts of
the Deposit Liabilities Amount, the Account Loan
Amount, the Overdraft Lines of Credit Amount, the
Other Loan Amount, the Personal Property Amount,
the Real Property Amount, the Premium Amount, the
Proration Charges, the Prepaid Expense Amount and
the Cash on Hand Amount, in each case as of the
Pre-closing Close of Business, except the Premium
Amount, which shall be calculated for the Deposit
Measuring Period. Within seven (7) Business Days
after the Deposit Measuring Period has ended,
ALBANK shall deliver to AFC a written report
certified, to his best knowledge and belief, by
its chief financial officer which shall set forth
ALBANK's calculation of the actual amount of the
Deposit Liabilities during the post-Closing part
of the Deposit Measuring Period.
(iv) Each of ALBANK and the Company may
examine, and shall have a period of ten (10)
Business Days (the "Review Period") after receipt
of the reports delivered by the other party
pursuant to Section 5(b)(iii) above in which to
examine, such report or have such report examined
by ALBANK's or the Company's respective
independent certified public accountants, make
inquiries of such other party or have such
accountants make inquiries of such other party
concerning the information set forth therein and
examine the work papers upon which such other
party's calculation of the amounts set forth in
such report is based or have such work papers
examined by such accountants, and ALBANK and the
Company agree to cooperate with each other and the
respective independent certified public
accountants in such efforts.
(v) In the event that ALBANK and the
Company have reached agreement at the end of the
Review Period on the sum of the actual amounts as
of the Pre-closing Close of Business of the
Account Loan Amount, the Overdraft Lines of Credit
Amount, the Other Loan Amount, the Personal
Property Amount, the Real Property Amount, the
Premium Amount, the Proration Charges, the Prepaid
Expense Amount, the Cash on Hand Amount, the
Servicing Business Amount, the Late Fee Amount and
the OREO Amount less the actual amount as of the
Pre-closing Close of Business of the Deposit
Liabilities Amount (the "Actual Amount"), ALBANK
shall transfer to AVC or GMB, as AVC may
designate, by wire transfer the amount by which
the Actual Amount exceeds the Estimated Amount,
together with interest thereon at the Overnight
(uncollateralized) Federal Funds Rate from the
Closing Date to the date of payment, or, if the
Estimated Amount is greater than the Actual
Amount, AVC or GMB shall transfer to ALBANK's
Federal Reserve account in New York City by wire
transfer the amount by which the Estimated Amount
exceeds the Actual Amount, together with interest
thereon at the Overnight (uncollateralized)
Federal Funds Rate from the Closing Date to the
date of payment in either case, without regard to
whether the Actual Amount is a positive or
negative number.
(vi) In the event that ALBANK and the
Company are unable to reach agreement on the
Actual Amount by the end of the Review Period, the
calculation of the Actual Amount shall be
submitted to a nationally recognized accounting
firm mutually selected by ALBANK and the Company
(the "Accountants"), and the calculation by the
Accountants of the Actual Amount shall be
conclusive and binding upon ALBANK and the Company
for purposes of this Section 5; the Company and
ALBANK agree to cooperate with the Accountants and
to make available to the Accountants all
information reasonably necessary to permit the
Accountants to calculate the Actual Amount and to
share equally the cost incurred by having the
Accountants make such calculation; within two
Business Days following receipt by ALBANK and the
Company of the written report by the Accountants
of their calculation of the Actual Amount, ALBANK
shall transfer to AVC or GMB, as AVC may
designate, by wire transfer the amount by which
the Actual Amount as calculated by the Accountants
exceeds the Estimated Amount, together with
interest thereon at the Overnight
(uncollateralized) Federal Funds Rate from the
Closing Date to the date of payment, or, if the
Estimated Amount is greater than the Actual
Amount, AVC or GMB shall transfer to ALBANK'S
Federal Reserve account in New York City by wire
transfer the amount by which the Estimated Amount
exceeds the Actual Amount, together with interest
thereon at the Overnight (uncollateralized)
Federal Funds Rate from the Closing Date to the
date of payment in either case, without regard to
whether the Actual Amount is a positive or a
negative number.
(vii) As soon as practicable after
the date that is 360 days after the Closing Date,
ALBANK shall calculate the amount of
Nontransferable Custodial Accounts that are
Assumed Custodial Deposits that have been renewed
under the terms of the agreements governing such
Deposits at any time after the date that all
regulatory approvals for the transactions
contemplated herein have been obtained (the
"Renewed Account Amount"). Promptly thereafter,
ALBANK shall remit to AVC or GMB, as AVC may
designate, an amount (the "Premium Adjustment
Amount") equal to seven and one-half percent
(7-1/2%) of the Renewed Account Amount minus five
percent (5%) of the average daily amount of
Nontransferable Custodial Accounts that are
Assumed Custodial Deposits measured at the close
of business of each Business Day during the
Deposit Measuring Period, provided, however, that
if the Premium Adjustment Amount as calculated in
accordance with this Section 5(b)(vii) is a
negative number, neither party shall have any
obligation to remit additional funds to the other
party pursuant to this Section 5(b)(vii).
6. APPROVALS.
Each of the Company and ALBANK will use
their or its best efforts to obtain all regulatory
and other approvals necessary for such party to
consummate the transactions contemplated by this
Agreement. Each party also shall be responsible
for preparing the financial information required
for the applications and other regulatory reports
necessary to obtain any governmental approval of
the contemplated transactions and shall prepare
any other application or regulatory report which
may be separately necessary for such party to
prepare in order to obtain any governmental
approval. Each party will cooperate with the
other in providing all necessary information for
the applications and other regulatory reports.
Each party will permit the other to review any
applications before submitting them to the
regulatory authorities excluding any confidential
parts or portions of such applications. Promptly
following the filing of any application or report
related to the transactions contemplated hereby
with the appropriate regulatory agency, each party
will provide the other with a copy of such
application or report (excluding any confidential
portions thereof). Each of the Company and ALBANK
agrees to use their or its best efforts to submit
the applications to appropriate regulatory
agencies as soon after the date hereof as is
practicable. Each of the Company and ALBANK will
bear its own costs and fees associated with the
preparation and filing of such applications. The
covenants in this Section 6 with respect to
regulatory applications and reports shall apply
equally to any required amendments or supplements
to any such application or report.
7. AGREEMENTS OF THE COMPANY.
(a) Access to Records and Information.
Between the date of this Agreement and the Closing
Date, the Company shall afford to ALBANK and its
authorized agents and representatives, upon
reasonable prior notice, reasonable access during
normal business hours to each of the Branches and
to records and other information within the
Company's possession relating to the Branches, the
Assets to be purchased and the Liabilities to be
assumed by ALBANK pursuant to the terms of this
Agreement, including, specifically, for the
purpose of due diligence on Loans and other
Assets. The Company shall cause its personnel to
provide assistance to ALBANK's authorized agents
and representatives in their investigation of
matters relating to the Branches, the Assets and
the Liabilities and in ALBANK's preparations for
the consummation of the transactions contemplated
by this Agreement, and to afford such agents and
representatives full access to each of the
Branches during non-business hours (whether on
weekends, holidays or otherwise) as may reasonably
be requested by ALBANK prior to the Closing Date,
including, specifically, for the purpose of due
diligence on Loans and other Assets; provided,
however, that ALBANK's investigation and
preparations shall be conducted in a manner which
does not unreasonably interfere with the Company's
normal operations and customer and employee
relations. Notwithstanding anything to the
contrary in this Section 7(a), the Company need
not incur any material out-of-pocket costs or
expenses in connection with this undertaking.
(b) Further Assurances. The Company agrees
to use its best efforts to take, or cause to be
taken, all reasonable action and to do, or cause
to be done, all things necessary, proper or
advisable under applicable laws and regulations,
to satisfy the conditions to Closing contained
herein and to consummate and make effective the
transactions contemplated by this Agreement,
subject to the satisfaction of the conditions to
the obligations of the Company set forth in
Sections 17 and 18. On and after the Closing
Date, the Company shall (i) give such further
assurances to ALBANK and shall execute,
acknowledge and deliver all such bills of sale,
deeds, acknowledgments and other instruments and
take such further actions as may be necessary and
appropriate to vest effectively in ALBANK full
legal and equitable title in and to the Assets,
and (ii) use reasonable efforts to assist ALBANK
in the orderly transition of the operations of the
Branches, Liabilities and Assets being acquired or
assumed by ALBANK.
(c) Consents. The Company will use
reasonable efforts, to the extent permitted by the
relevant Contracts and applicable law, to obtain
on substantially the same terms and conditions as
exist on the date hereof all non-governmental
consents necessary to consummate the transactions
contemplated hereunder or which if not obtained
could constitute a material breach or default
under any provision hereof or under any material
Contract to be assigned to ALBANK hereunder. If
the Company is not able to obtain a required
consent under any material Contract, the Company
will cooperate with ALBANK to obtain for ALBANK
the benefits under such Contract, including
enforcement of any and all rights of the Company
against the other party or parties thereto.
Between the date hereof and the Closing Date, the
Company shall advise ALBANK of its efforts to
obtain all necessary third party consents on no
less frequent than a monthly basis.
(d) Notice. Not later than thirty (30) days
prior to the Closing Date, the Company at its own
expense shall notify all persons who are
depositors of the Branches (including persons
having Assumed Custodial Deposits) of the proposed
transfer of their deposit accounts to ALBANK,
which notice shall specify certain penalty-free
withdrawal rights as provided in Title 8, Chapter
55, Section 1011 of the Vermont Statutes
Annotated, provided that (i) the Company and
ALBANK shall agree on the timing and text of such
notice prior to its release; and (ii) if ALBANK
and the Company agree that the notice should be
sent fewer than thirty (30) days prior to the
Closing Date, the pre-Closing portion of the
Deposit Measuring Period shall be decreased, and
the post-Closing portion of the Deposit Measuring
Period shall be extended, by the same number of
days by which the 30-day notice period is
decreased, and provided further that the Company
shall give the notice required by Section 14(c)(i)
promptly after the Closing Date.
(e) Non-Competition Agreement. For the
period commencing on the Closing Date and ending
on the third anniversary of the Closing Date, the
Company will not (i) solicit Deposits or other
banking business (exclusive of Trust Business but
including Individual Retirement Account or Xxxxx
Plan business) from residents of the State of
Vermont or from persons who were Deposit or Loan
customers (including customers who had Custodial
Accounts) of any of the Branches as of the
Pre-closing Close of Business (collectively,
"Banking Customers"); (ii) purchase or open a new
branch (or ATM) for the purpose of gathering
insured Deposits or originating loans in the State
of Vermont; or (iii) solicit, either directly or
through third parties such as mortgage brokers,
loans secured by real property located in the
State of Vermont, provided, however, that nothing
in this Section 7(e) shall (x) prohibit the
Company from engaging in mass media advertising or
solicitation involving radio or television
communications receivable in the State of Vermont
if such communications are not structured so as to
be primarily receivable in the State of Vermont
and are not targeted primarily at customers
residing therein, (y) prevent either of AFC's New
York-located subsidiary banks after the Closing
Date (I) from soliciting loan or deposit business
from persons or entities residing or located in
the State of Vermont (other than Banking
Customers) that were loan or deposit customers of
such bank prior to the date hereof or were
solicited by such bank regarding such products
prior to the date hereof or (II) from providing
loan or deposit products to persons or entities
residing or located in the State of Vermont (other
than Banking Customers) if such banks are
initially approached by such persons or entities
regarding such products, or (z) prevent the
Licensed Lender from engaging in appropriate and
ordinary course of business workout activities
with respect to any other real estate owned or
loans acquired by such Licensed Lender from GMB on
or prior to the Closing Date. After the Closing,
the Company shall not use or permit any successor
to use the name "Green Mountain Bank," "First Twin
State Bank," "Xxxxxxx Bank," "United Vermont
Bancorporation," or any name of a predecessor bank
or predecessor bank holding company to any of the
foregoing or any similar name in the State of
Vermont and shall discontinue the use of the name
"Green Mountain Bank" in all other respects,
provided, however, that if the Company shall have
entered into any Trust Transfer Transaction but
shall not have consummated the same as of the
Closing Date, the Company may continue to use any
of the foregoing names in connection with the
Trust Business until such consummation, unless
such consummation fails to occur within ninety
(90) days after the Closing Date, after which
period the Company shall immediately cease the use
of any of the foregoing names; and provided,
further, that nothing in this Agreement or this
Section 7(e) shall preclude or prohibit the
Company from using any of the foregoing names in
connection with the winding up of the affairs of
GMB or AVC and the filing of all documents and the
making of any and all publication notices or legal
announcements as may be required under law or
agreement in connection with such winding up.
Nothing in this Section 7(e) shall prevent the
Company from forwarding to all depositors at the
Branches a notice of the transactions contemplated
by this Agreement in accordance with the terms of
Sections 7(d) and 14(c)(i) and from publishing or
forwarding to all such depositors such other
communications as may be required by law,
regulation or any regulatory authority. The text
of any such other communication, other than
routine account statements or similar routine
account mailings, shall be approved in advance by
ALBANK, which approval shall not be unreasonably
withheld.
(f) Conduct of Business Prior to Closing.
Except as required by law, regulation or any
regulatory authority, or as provided herein,
between the date hereof and the Closing Date, the
Company shall conduct the business of each of the
Branches only in the ordinary course and
substantially in the same manner as heretofore
conducted, provided that nothing in this Section
7(f) shall preclude the Company from negotiating
and consummating a Trust Transfer Transaction, as
described in Section 2(h). Specifically and
without limiting the general prohibition in the
foregoing sentence, the Company shall not, without
the prior written consent of ALBANK, which consent
shall not be unreasonably withheld:
(i) cause the Branches to engage or
participate in any material transaction or incur
or sustain any material obligation except in the
ordinary course of business;
(ii) cause the Branches to receive from
or to transfer to the Company's other operations
or branches any Assets or records related to the
Branches or Assets, except upon the unsolicited
request of a depositor in the ordinary course of
business;
(iii) cause the Branches to transfer
to the Company's other operations or branches any
Deposits or records related thereto, except upon
the unsolicited request of a depositor in the
ordinary course of business and any Deposits of
the Company's employees;
(iv) undertake any actions which are
inconsistent with a program to use all reasonable
efforts to maintain good relations with Employees,
unless such actions are required or permitted
under this Agreement;
(v) make, renegotiate, renew, increase,
extend or purchase any loan, lease (credit
equivalent) or other extension of credit, or make
any commitment in respect of any of the foregoing,
except, in the case of GMB, loans, leases and
other extensions of credit (A) in an amount not
exceeding $203,150, in the case of loans which are
for the sole purpose of acquiring or refinancing
one- to four-family owner-occupied residences
(provided, however that GMB may not make,
renegotiate, renew, increase, extend or purchase
any loan that is underwritten based on either no
or limited verification of income or otherwise
without full documentation customary for such a
loan), and (B) in the case of commercial mortgage
loans or commercial and industrial loans: (x) in
an amount not exceeding $300,000, with no
additional approval required, provided that each
such loan is made in accordance with GMB's
established lending policies and procedures as in
effect on the date hereof, and (y) in an amount
exceeding $300,000, with the ratification of
ALBANK, which shall be deemed given if, within ten
(10) business days after the day that (i) ALBANK
receives from GMB a request in writing,
accompanied by a written summary of the proposed
loan, that ALBANK provide such ratification, (ii)
GMB makes available for ALBANK at GMB's offices a
financial analysis of the proposed loan and
borrower prepared by GMB and (iii) GMB extends to
ALBANK a full opportunity to examine the credit
files of GMB with respect to such proposed loan,
ALBANK shall not have responded in writing to such
request (it being understood that, in determining
whether any such loan (a "New Loan") complies with
the maximum dollar amounts set out in this clause
(B), the amount of all then outstanding loans,
leases and other extensions of credit to a single
obligor (within the meaning of Title 8, Chapter
57, Section 1206 of the Vermont Statutes
Annotated) then on the books of GMB shall be
aggregated with the amount of such New Loan (such
sum the "Aggregate Credit Outstanding Amount"));
provided however, that the approval procedure
specified in subclause (B)(y) shall not be
required for (I) a New Loan in an amount less than
$300,000, notwithstanding that the New Loan would
result in an Aggregate Credit Outstanding Amount
of greater than $300,000, if (a) the customer
requires the New Loan to satisfy an immediate and
time-sensitive credit need; and (b) no existing
loan, lease or other extension of credit to the
GMB customer is delinquent in payment of principal
or interest or in default with respect to any
other provision; or (II) a New Loan in an amount
of $100,000 or less, notwithstanding that the New
Loan would result in an Aggregate Credit
Outstanding Amount greater than $300,000, if the
New Loan is rated 1, 2 or 3 under GMB's credit
scoring policy; provided, further that (x)
subclauses (I) and (II) of the preceding proviso
shall apply with respect to only one New Loan per
GMB customer; (y) each such New Loan shall comply
in all respects with GMB's lending policies and
procedures, and each and every representation and
warranty contained in Sections 12(e)(i), (iv) and
(v) shall be true with respect to each New Loan;
and (z) GMB shall provide notice in writing to
ALBANK of any New Loan within two (2) business
days after transferring funds in accordance
therewith;
(vi) increase or agree to increase the
salary, remuneration or compensation of any
Employee other than in accordance with GMB's
customary policies and/or bank-wide changes;
provided, however, the Company may, at its option
(and without in any way assuming an obligation to
do so), (A) make payments to or for Employees in
lieu of or as partial compensation for savings,
incentive or other employee benefits and (B) pay
incentive compensation to Employees for purposes
of retaining their service through the Closing
Date;
(vii) invest in any fixed assets or
leasehold improvements related to the Purchased
Branches, except for commitments made on or before
the date of this Agreement as set forth in
Schedule 7(f)(vii).1, items contained in the 1996
GMB capital expenditure budget on the date hereof
as set forth in Schedule 7(f)(vii).2, replacements
of furniture, furnishings and equipment, and
normal maintenance and refurbishing purchased or
made in the ordinary course of the business of the
Purchased Branches;
(viii) create or suffer to exist any
material Encumbrance on any of the Assets, or
otherwise enter into any material transaction or
make any material commitment relating to any of
the Assets;
(ix) transfer, assign or otherwise
dispose of, or enter into any contract, agreement,
or understanding to transfer, assign or otherwise
dispose of, any of the Assets;
(x) enter into any commitment,
agreement, understanding, or other arrangement to
relocate, terminate the operations of or dispose
of any of the Branches or ATM's relating to the
Branches other than pursuant to the terms of this
Agreement;
(xi) enter into any new line of business
outside of the business of banking affecting the
Branches, or, in any Branch, enter into any new
line of banking business, including but not
limited to the Trust Business or any fiduciary
activities, not previously engaged in at such
Branch;
(xii) change its accounting methods,
policies, or procedures in effect as of December
1, 1995, except as required or permitted (in the
sense that required changes may be adopted in
advance) by changes in generally accepted
accounting procedures;
(xiii) except as provided under
Section 9(b) of this Agreement, enter into, modify
or renew any individual employment, severance or
other benefit agreement with any Employee (an
"Employee Agreement"), terminate the employment of
any Employee, or establish, adopt, enter into or
amend any health or welfare, collective
bargaining, bonus, profit sharing, thrift,
compensation, stock option, restricted stock,
pension, retirement, deferred compensation,
employment, termination, severance or other
benefit plan, agreement, trust fund, policy or
arrangement covering any two or more Employees (an
"Employee Plan");
(xiv) undertake, enter into or
renew, amend or terminate, or give notice of a
proposed renewal, amendment or termination of any
commitment with respect to (a) any Lease; (b) any
other lease, contract or agreement involving the
Branches other than in the ordinary course of
business consistent with past practice; and (c)
regardless of whether consistent with past
practice, any other lease, contract, agreement or
commitment involving the Branches extending beyond
the Closing Date, provided that ALBANK will not
withhold its consent to any lease, contract,
agreement or commitment relating to the Real
Property of the Rutland Branch if such cannot
reasonably be expected to have an adverse effect
on the Assets or Liabilities, the ability of the
parties to consummate the transactions provided
for herein or the timing of such consummation;
(xv) commit any act or omission which
constitutes a material breach or default by GMB
under any regulatory agreement or under any
material contract or material license to which GMB
is a party or by which it is bound which affects
the Branches or operations thereof;
(xvi) waive any material right,
whether in equity or at law, that it has with
respect to any Loan, provided that this clause
(xvi) shall not prevent the Company from agreeing
in its reasonable judgment to alter the terms of
any Loan it is renegotiating if the outstanding
amount of such Loan is below the relevant
threshold amounts set forth in clause (v) above;
(xvii) take any action that is
intended or may reasonably be expected to result
in any of the Company's representations and
warranties set forth in this Agreement being or
becoming untrue;
(xviii) make any investment or
commitment to invest in real estate or in any real
estate development project affecting the Purchased
Branches;
(xix) make less stringent than as in
effect on the date of this Agreement GMB's
operational policies, activities or practices
(including practices with respect to customer
service charges, credit underwriting policies or
standards and policies or practices with respect
to lending, charge-off or classification of loans,
reserves and provisions for loan losses, the
placement of loans in non-accrual status, and
liability management); or
(xx) solicit or accept Deposits at a
rate of interest that exceeds the average
effective yields on insured deposits of comparable
maturity in GMB's normal market area or, in any
case, at a rate of interest inconsistent with
GMB's rate-setting practices within the last year,
or make any payment in respect of Deposits other
than in accordance with the terms of the
applicable deposit agreements.
(g) Items in the Company's Possession. The
Company will cooperate with ALBANK and take all
reasonable steps requested by ALBANK to ensure
that from and after the Closing Date each Payment
Item and Deposit Item which is coded for
presentment to the Company or to any bank for the
account of the Company is available for delivery
to ALBANK or its messenger in a timely fashion
consistent with the terms of this Agreement and
any applicable clearing house rule or agreement.
ALBANK shall reimburse the Company for all
reasonable expenses incurred from and after the
Closing Date by the Company pursuant to the
Company's efforts to ensure that such items are so
delivered within such time period.
(h) Electronic Funds Transfer Transactions.
The Company shall promptly remit to ALBANK
electronic funds transfer deposits made after the
Closing with respect to accounts allocated to the
Branches which are Deposit Liabilities assumed by
ALBANK at the Closing. Upon the expiration of
ninety (90) days after the Closing, the Company
may, at its option, cease honoring electronic
funds transfer deposits with respect to Deposit
Liabilities assumed by ALBANK.
(i) Insurance. Schedule 7(i) sets forth all
of the policies relating to insurance maintained
by the Company with respect to the Branches,
including, without limitation, the Real Property,
the Personal Property, the Loans and the Servicing
Business (or any comparable policies entered into
as a replacement therefor). Until the Closing,
the Company shall maintain in full force and
effect all current insurance policies set forth on
Schedule 7(i).
(j) Compliance with Law/Maintenance of
Property. The Company shall comply with all
applicable laws, regulations and rulings affecting
or applicable to the Branches or this Agreement
and the consummation of the transactions
contemplated hereby, and shall maintain the
Personal Property and the Fee Branches, and to the
extent tenant is required to do so under any
applicable Lease, the Leased Branches, and any
shrubbery or landscaping appurtenant to the
Branches, in the condition existing on the date
hereof, reasonable wear and tear excepted, and in
any case consistent with standards of management
and care that the Company would exercise were it
to continue to operate the Branches for its own
account.
(k) Tapes and Trial Balances and Loan Data.
(i) Within ten (10) days of the date
hereof, the Company shall provide ALBANK with a
trial balance tape with corresponding paper trial
balance with respect to each of the Deposit
Liabilities which ALBANK will be assuming. In
addition, the Company shall provide ALBANK with a
trial balance tape with respect to each of the
Deposit Liabilities which ALBANK will be assuming
(A) on a weekly basis, commencing with the week
ending four weeks prior to the anticipated Closing
Date; and (B) as of the close of business on each
Business Day during a period commencing ten (10)
Business Days prior to the anticipated Closing
Date and ending on the Closing Date.
(ii) Within ten (10) days of the date
hereof, the Company shall provide ALBANK with
outstanding balances for the Loans set forth on
Schedules 1.1, 1.2, 1.3, 1.4, 1.11, 1.13 and 8(h)
and shall update such schedules on a weekly basis
commencing with the week ending four weeks prior
to the anticipated Closing Date.
(l) Communications with Customers. After
receipt of all required regulatory approvals, the
Company shall permit ALBANK to communicate with,
and to deliver information, brochures, bulletins,
press releases and other communications reasonably
acceptable to the Company to, depositors,
borrowers and other customers of the Branches
concerning the business and operations of ALBANK
and the transactions contemplated by this
Agreement.
(m) Training of Employees. On and after
delivery by ALBANK of the initial list of
Designated Employees under Section 9(b), the
Company shall permit ALBANK, at the request of
ALBANK and upon reasonable notice, to train any
and all Designated Employees at reasonable times
and for reasonable periods of time, shall excuse
such Designated Employees from their duties during
such periods of time for purposes of training, and
shall be responsible for paying, and shall
continue to pay, the salaries and benefits of such
Designated Employees for such periods.
(n) Environmental Audit. The Company shall,
if reasonably requested by ALBANK, conduct an
environmental audit prior to foreclosure on any
real property securing any Loan if the Company has
knowledge that Hazardous Material was or is
present, manufactured, generated, used, recycled,
reclaimed, released, stored, treated or disposed
of at, in or from such property, and provide the
results of such audit to, and consult with, ALBANK
regarding the significance of such audit prior to
foreclosure on any such property.
8. AGREEMENTS OF ALBANK.
(a) Performance of Liabilities. From and
after the Closing Date, and subject to the
Company's compliance with Sections 7(g) and (h) in
the case of items referred to in Sections 7(g) and
(h), ALBANK shall pay, to the extent of sufficient
available funds on deposit, all properly drawn
Payment Items timely presented to it by mail, over
its counters or through clearings by depositors
whose deposits or accounts on which such Payment
Items are drawn are Deposit Liabilities, whether
drawn on GMB's forms (for ninety (90) days after
the Closing Date) or on those provided by ALBANK.
ALBANK shall fully perform, pay and discharge all
of the Contract Liabilities subject to Section
4(a). ALBANK shall, in all other respects,
discharge, in the usual course of the banking
business, the duties and obligations of the
Company with respect to balances due and owing to
the depositors whose Deposits are assumed by
ALBANK. From and after the Closing Date, ALBANK
agrees to issue all monthly statements to
depositors as may be required by applicable
deposit contracts. From and after the Closing
Date, ALBANK agrees to file all required
information returns including Forms 1099 with the
Internal Revenue Service with respect to Deposits
assumed by ALBANK under this Agreement; provided
that, with respect to the year in which the
Closing Date occurs, the Company shall file all
such required returns with respect to such
Deposits for the period prior to the Closing Date,
and ALBANK shall file such returns only with
respect to the period beginning with the Closing
Date. From and after the Closing Date, ALBANK
agrees to perform all obligations, including
fiduciary obligations, incurred by it as a matter
of law or agreement as successor trustee or
successor custodian to GMB with respect to all
Transferable Custodial Accounts that are Assumed
Custodial Deposits.
(b) Further Assurances. ALBANK agrees to
use its best efforts to take, or cause to be
taken, all reasonable action and to do, or cause
to be done, all things necessary, proper or
advisable under applicable laws and regulations,
to satisfy the conditions to Closing contained
herein and to consummate and make effective the
transactions contemplated by this Agreement,
subject to the satisfaction of the conditions to
the obligations of ALBANK set forth in Sections 16
and 18. On and after the Closing Date, ALBANK
shall give such further assurances to the Company
and shall execute, acknowledge and deliver all
such acknowledgments and other instruments and
take such further actions as may be necessary and
appropriate effectively to relieve and discharge
the Company from any obligations remaining under
the Liabilities assumed by ALBANK.
(c) Compliance with Law. ALBANK shall
comply with all applicable laws, regulations and
rulings in connection with this Agreement and the
consummation of the transactions contemplated
hereby.
(d) Change of Name, Notice. From and after
the Closing Date, ALBANK, at its own expense,
shall promptly change the name on all documents
and facilities relating to the Branches to
ALBANK's name. ALBANK, at its own expense, shall,
within ninety (90) days after the Closing Date,
notify all persons who are customers and
depositors of any of the Branches of such change,
which notification shall comply with applicable
OTS regulations. Nothing in this Section 8(d)
shall require ALBANK to undertake to rewrite
outstanding loans or other documents assumed by or
assigned to ALBANK on the Closing Date except in
the ordinary course of business. For the period
commencing on the Closing Date and ending on
January 15, 0000, XXXXXX shall not use, and ALBANK
shall use reasonable efforts to ensure that any
successor shall not use during such period, the
name "Green Mountain Bank," "Xxxxxxx Bank," "First
Twinstate Bank," "United Vermont Bancorporation,"
or any name of a predecessor bank or predecessor
bank holding company to any of the foregoing or
any similar name, in the State of Vermont.
(e) Conversion of Draft Accounts. Promptly
following the Closing, but in no event later than
thirty (30) days thereafter, ALBANK shall mail to
each depositor in respect of a checking account,
NOW account, money market account or other account
which permits deposits to be transferred to third
parties by means of drafts drawn on such account
(collectively, "Draft Accounts") which are part of
the Deposit Liabilities assumed by ALBANK (i) a
letter notifying such depositor of the transfer of
his or her Draft Account hereunder and requesting
that such depositor cease writing drafts on GMB's
forms against such Draft Account immediately upon
receipt of such letter, and (ii) drafts of ALBANK
in respect of such Draft Accounts, together with
all other information and documents required by
applicable law and regulation. For a period of
ninety (90) days following the Closing Date, the
Company shall honor Payment Items drawn on Draft
Accounts which are part of the Deposit Liabilities
and, on a daily or less frequent basis determined
by the Company, ALBANK shall reimburse the Company
in immediately available funds for the amount of
such Payment Items. Upon the expiration of such
ninety (90) day period, the Company may, at its
option, cease honoring its Payment Items drawn
against such Draft Accounts.
(f) Electronic Funds Transfer Transactions.
Promptly after the Closing, ALBANK shall obtain
all consents necessary to enable electronic funds
transfer deposits with respect to the Deposit
Liabilities to be made directly to ALBANK.
(g) Obligations to Reimburse the Company.
Subject to the provisions of Sections 14(a) and
(e) hereof, ALBANK shall promptly reimburse the
Company in cash or other immediately available
funds as to (i) any Payment Items which are paid
or discharged by the Company after the Closing
Date, (ii) any Deposit Items which are returned to
the Company after the Closing Date, and (iii)
charges, fees and expenses reasonably incurred by
the Company after the Closing Date in connection
with any Payment Items or Deposit Items referred
to in clauses (i) and (ii) of this Section 8(g).
(h) Obligation with Respect to Certain
Troubled Debt Restructures. With respect to any
troubled debt restructured loan listed on Schedule
8(h) hereto (each a "TDR Loan"), ALBANK agrees to
remit to AVC or its designee 75% of any amount in
excess of the book value of such TDR Loan on GMB's
books as of the Pre-closing Close of Business
which ALBANK collects from the related borrower in
connection with amounts owed by such borrower as
evidenced on the related loan documentation and
summarized on Schedule 8(h). ALBANK will conduct
its servicing of TDR Loans and its dealing with
the related borrowers in substantially the same
way it conducts such activities with respect to
any other such loan it owns, and will have no
obligation to act otherwise, subject to the
repurchase right extended by it to the Company
pursuant to the following sentence. If (i) the
borrower on any TDR Loan is in default thereunder
or (ii) ALBANK proposes to restructure any TDR
Loan, ALBANK, (y) before (in the case of (i)
above) initiating any action in the nature of
foreclosure with respect to such loan (including
any acceleration of the borrower's repayment
obligations thereunder), but at or shortly before
the time it normally would initiate any such
action, or (z) before (in the case of (ii) above)
effecting any such restructure, shall advise the
Company of any such proposed action or
restructure, whereupon the Company will have the
option, exercisable by notice to ALBANK within ten
(10) days of the Company's receipt of such advice
from ALBANK, to repurchase such TDR Loan from
ALBANK for an amount equal to the value of the
loan on the books of ALBANK immediately after the
Closing Date less any principal payments received
between the Closing Date and the date of
repurchase less a proportional amount of the
specific ALLL allocation assigned to such loan on
Schedule A-1 to Exhibit A hereto as of the
Pre-closing Close of Business. It is understood
that any amount paid by ALBANK to the Company
under this Section 8(h) will be net of ALBANK's
third party expenses with respect to the TDR
Loans.
(i) Restricted Information. For the period
commencing on the Closing Date and ending on the
third anniversary of the Closing Date, (i) ALBANK
shall not use to its own advantage, and shall
ensure that none of its affiliates shall use to
its advantage, any non-public information relating
to the Company obtained by ALBANK directly or
indirectly from the Company or its current or
former employees that does not reasonably relate
to the Assets being acquired or the Liabilities
being assumed by ALBANK under this Agreement
("Restricted Information"), whether such
Restricted Information may have been or may be
obtained by ALBANK, its affiliates,
representatives, or agents or employees of any of
the foregoing (collectively, the "ALBANK Group")
in the course of negotiations or investigations
leading to execution of this Agreement or
consummation of the transactions provided for
herein or may be obtained by any of the ALBANK
Group after such consummation from former
employees of the Company, and (ii) ALBANK will not
solicit any trust business from Trust Customers of
GMB as of the date hereof and as of the Closing
Date whose trust accounts are not being
transferred to ALBANK hereunder; provided,
however, that such agreement not to solicit shall
apply if and only if, and only to the extent that,
such customers may have been or may be
specifically identified by ALBANK or its
affiliates as Trust Customers as a result of
information obtained by any one or more of the
ALBANK Group from the Company or its employees in
the course of negotiations or investigations
leading to execution of this Agreement or
consummation of the transactions provided for
herein or after consummation hereof from former
employees of the Company. From the date hereof
until three years after the Closing Date, the
Company shall use best efforts to ensure that no
list identifying persons as Trust Customers is
made available to ALBANK. Nothing in this Section
8(i) shall prevent ALBANK from, without
limitation, (i) acting as trustee or custodian
under Custodial Accounts transferred to ALBANK
hereunder, (ii) providing fiduciary services in
connection with its securities and insurance
subsidiaries, or (iii) soliciting trust business
from Banking Customers or any other persons unless
such persons have been specifically identified by
ALBANK or its affiliates as Trust Customers as a
result of information obtained in the manner
described in the last clause of the second
preceding sentence.
9. AGREEMENTS OF THE COMPANY AND ALBANK WITH
RESPECT TO EMPLOYEES.
(a) Employee Obligations.
(i) ALBANK shall have no obligation
under this Agreement to, or arising from
employment by the Company of, the Employees or any
employees employed by the Company in connection
with the Trust Business. After the Closing Date,
the Company may continue to employ or subsequently
employ Employees who do not accept employment with
ALBANK. All Employees will have their earned
compensation paid in full by the Company through
the Pre-closing Close of Business, including any
amounts due for accrued but unused vacation and
other leave, and accrued but unpaid commissions or
bonuses.
(ii) ALBANK may at its sole discretion
offer employment to any Employee in good standing
as of the Closing Date. Salaries, benefits and
continued employment of any such Employee hired by
ALBANK after the Closing Date shall be within
ALBANK's discretion and nothing contained herein
is to be construed as an employment contract for
any such Employee.
(b) Employee Procedures.
(i) With respect to all Employees, as
soon as reasonably practicable after the date
hereof, and with the prior consent of the Chief
Executive Officer, President or Director of Human
Resources of GMB (which consent shall not
unreasonably be withheld) ALBANK shall be given
access to such Employees for the purpose of
conducting interviews. Promptly after such
interviews, ALBANK will provide to the Company a
confidential list designating those Employees to
whom ALBANK intends to offer employment at the
Closing Date (the "Designated Employees") and the
position to be offered to each. Thereafter,
ALBANK may supplement or amend such list of
Designated Employees from time to time. After its
receipt of the initial list, the Company may, at
its option, approach any or all Employees other
than the Designated Employees to discuss
opportunities for such employees to transfer to
other positions with the Company or an affiliate
as of the Closing Date.
(ii) Notwithstanding anything herein to
the contrary, ALBANK shall have no obligation to
offer employment to any of the Employees (other
than the Designated Employees) who are employed by
the Company on the Closing Date.
(iii) ALBANK and the Company shall
coordinate all communications of employment offers
by ALBANK to the Designated Employees.
(iv) Immediately prior to the Closing
Date, the Company shall terminate all Employees
other than any such Employees the Company intends
to employ elsewhere, and ALBANK shall offer
employment to each of the Designated Employees.
The Company shall be responsible for any severance
payments due to Employees that the Company
terminates pursuant to the foregoing sentence.
During the period extending from the date hereof
until the date that ALBANK delivers to the Company
its initial list of Designated Employees in
accordance with Section 9(b)(i), the Company will
not terminate any Employee other than for cause,
and during the period extending from the date of
delivery of such initial list until the Closing
Date, the Company will not terminate any
Designated Employee with or without cause unless
ALBANK shall have consented to such termination;
provided, however, that the foregoing clause shall
not prohibit the Company from placing any Employee
on paid or unpaid suspension or leave of absence
under appropriate circumstances. ALBANK's offers
of employment to Designated Employees shall be on
an "at-will" basis, and ALBANK shall have no
obligation to continue employment of any
Designated Employee and may at its option
terminate employment at any time.
(v) Except with the prior written
consent of ALBANK, the Company shall not actively
solicit any of the Transferred Employees (as
defined in Section 9(c) below) as prospective
employees of the Company for a period of one (1)
year after the Closing Date.
(c) Employee Benefits.
(i) All Employees who are offered
employment by ALBANK and who accept such
employment ("Transferred Employees") will:
(A) On and as of the Closing Date,
be immediately eligible to participate in employee
health, life, and other welfare benefit programs
enjoyed by ALBANK's employees of current service
and age in comparable positions; provided,
however, that ALBANK will have no liability for
any claims made under the Company's long-term
disability, worker's compensation, health, life
and benefit programs on or before the Closing
Date;
(B) On and as of the Closing Date,
be credited for past years of service with the
Company or its affiliates for the determination of
vacation and leave benefits under ALBANK's
policies;
(C) On the first of the month
following one year after the Closing Date, and
upon reaching age 21 (or upon any earlier date
pursuant to the terms of relevant plan documents),
be eligible to participate in ALBANK's Incentive
Savings and Employee Stock Ownership Plans;
(D) If a Transferred Employee
meets the eligibility requirements of The
Retirement Plan of Albany Savings Bank, F.S.B. in
RSI Retirement Trust ("ALBANK's Pension Plan")
(age 21 and one year of service) on the Closing
Date, such employee will be eligible to enroll in
ALBANK's Pension Plan on the first available
enrollment date; provided that prior years of
service at the Company will be counted for pension
eligibility purposes only; and provided further
that credited service with ALBANK for purposes of
vesting and benefit accrual under ALBANK's Pension
Plan will be calculated commencing on the Closing
Date. If a Transferred Employee does not meet the
eligibility requirements of ALBANK's Pension Plan
on the Closing Date, the employee shall be
required to do so before being enrolled in such
plan. Such employees' years of service with the
Company shall be carried forward (for pension
eligibility purposes only), and, except as
otherwise provided pursuant to the terms of
ALBANK's Pension Plan, their credited service with
ALBANK for purposes of vesting and benefit accrual
under ALBANK's Pension Plan shall commence upon
their enrollment into ALBANK's Pension Plan.
Transferred Employees in both categories shall be
required to accrue five years of service at ALBANK
(not counting years of service with the Company)
in order to collect a vested or pension benefit
from ALBANK's Pension Plan.
(ii) ALBANK shall in a timely fashion
take such action, if any, as is necessary,
including the adoption of appropriate amendments
to its employee benefits plans and the obtaining
of appropriate approvals for such amendments, to
effectuate the terms of the above provisions.
(iii) With respect to Transferred
Employees, and except as otherwise provided
herein, ALBANK shall be responsible for: (A)
salaries, wages and other remuneration relating to
services performed from and after the Closing
Date; and (B) all other employment costs incurred
as a result of events occurring from and after the
Closing Date.
(iv) Notwithstanding anything herein to
the contrary, to the extent required by the
Consolidated Omnibus Budget Reconciliation Act of
1985, as amended, any employee of the Company
terminated by the Company as a result of this
transaction shall be entitled to receive the
required notices and subsequent coverage, if
elected, from the Company.
10. COMPUTER SERVICES.
From and after the date hereof, the
Company shall meet with ALBANK on a regular basis
to discuss and plan for the conversion of GMB data
processing and related electronic informational
systems to those used by ALBANK (the "Systems
Conversion"). Each of ALBANK and the Company
shall use its and their best efforts to complete
the Systems Conversion as of the Closing Date.
Each party shall be responsible for its own costs
and expenses associated with the Systems
Conversion.
11. THE CLOSING.
The consummation of the transactions
provided for herein (the "Closing") shall take
place as of 12:01 A.M. on a date (the "Closing
Date") to be determined by agreement of the
Company and ALBANK, provided that, unless the
parties agree otherwise in writing, such date
shall be not more than ten (10) days after the
first date (the "Satisfaction Date") on which all
required regulatory approvals of the transactions
contemplated hereby have been received and all
applicable waiting periods with respect thereto
have expired, and provided further that the
Closing Date shall be a Business Day.
Notwithstanding the foregoing sentence, if, as of
the Satisfaction Date, the Company shall have
entered into but not consummated a definitive
agreement or agreements for one or more Trust
Transfer Transactions pursuant to which all or
substantially all the Trust Business is to be
acquired and/or assumed by one or more
Counterparties, and if, as of the Satisfaction
Date, it appears reasonably likely that the
Company will be able to consummate such Trust
Transfer Transaction or transactions within thirty
(30) days of the Satisfaction Date, then, at the
request of the Company, the Closing Date hereunder
shall be postponed to a date not more than thirty
(30) days after the Satisfaction Date, in order
that the Closing hereunder may occur at or about
the same time as the consummation of such Trust
Transfer Transaction or transactions. The Closing
will be effected on the basis of the state of
facts relating to the Assets and the Liabilities
existing as of the Pre-closing Close of Business.
Prior to the Closing, there shall be a pre-closing
meeting. The Closing and pre-closing meeting
shall take place at the offices of Cleary,
Gottlieb, Xxxxx & Xxxxxxxx located at Xxx Xxxxxxx
Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, provided that the
Closing and pre-closing meeting may take place at
such other place as the parties may agree.
12. REPRESENTATIONS AND WARRANTIES OF THE
COMPANY.
Each of AFC, AVC and GMB hereby
represents and warrants to ALBANK as of the date
of this Agreement and as of the Closing Date as
follows:
(a) Corporate Organization, Powers and
Authority; Records.
(i) AFC is a business corporation, duly
organized, validly existing and in good standing
under the laws of the State of New York. AVC is a
business corporation, duly organized, validly
existing and in good standing under the laws of
the State of Vermont. GMB is a banking
corporation, duly organized, validly existing and
in good standing under the laws of the State of
Vermont. Each of AFC, AVC and GMB has the
corporate power and authority to own its
properties, to effect this transaction and carry
on its business as currently conducted.
(ii) The deposit accounts of GMB are
insured by the FDIC through the BIF, to the
fullest extent permitted by law, and all premiums
and assessments required in connection therewith
have been paid by GMB.
(iii) GMB has the corporate power
and authority to own or lease all of its
properties and assets and to carry on its business
as it is now being conducted and is duly licensed
or qualified to do business in each jurisdiction
in which the nature of the business conducted by
it or the character or the location of the
properties and assets owned or leased by it makes
such licensing or qualification necessary, except
where the failure to be so licensed or qualified,
either individually or in the aggregate, would not
have a Material Adverse Effect on GMB. As used in
this Agreement, the term "Material Adverse Effect"
when used for any party hereto means any change or
effect that is or, in the reasonable judgment of
the parties hereto, would be, materially adverse
to the business, operations, properties, assets,
liabilities, result of operations or financial
condition of such party and its subsidiaries taken
as a whole, and, for GMB, of the Branches,
individually or taken as a whole, exclusive in any
such case, of the Trust Business.
(iv) Except as set forth on Schedule
12(a)(iv) hereto, (i) each of AFC, AVC and GMB has
full corporate power and authority to execute and
deliver this Agreement and the Servicing Purchase
Agreement and to consummate the transactions
contemplated hereby and thereby; (ii) the
execution and delivery of this Agreement and the
Servicing Purchase Agreement and the consummation
of the transactions contemplated hereby and
thereby have been duly and validly approved by the
Board of Directors of each of AFC, AVC and GMB and
the shareholders of AVC and GMB; (iii) no other
corporate proceedings on the part of AFC, AVC and
GMB are necessary to approve this Agreement and
the Servicing Purchase Agreement and to consummate
the transactions contemplated hereby and thereby;
and (iv) each of this Agreement and the Servicing
Purchase Agreement has been duly and validly
executed and delivered by AFC, AVC and GMB and
constitutes a valid and binding obligation of AFC,
AVC and GMB, enforceable against AFC, AVC and GMB
in accordance with its terms, subject to
applicable bankruptcy, insolvency, and similar
laws affecting creditors' rights generally and the
rights of creditors of insured depository
institutions, and subject to general principles of
equity, whether applied in a court of law or a
court of equity.
(v) With respect to account records
reflecting GMB's fixed assets, furniture, fixtures
and equipment, the books and records of GMB have
been, and are being, maintained in accordance with
applicable legal and accounting requirements,
reflect only actual transactions and reflect all
of its assets, liabilities and accruals and all of
its items of income and expense in accordance with
generally accepted accounting principles
consistently applied. All accounting ledgers and
other books and records of GMB are located at the
principal office of GMB in Rutland, Vermont, or
the principal office of AFC in Glens Falls, New
York, and are true, complete and correct in all
material respects, and present fairly the
financial condition, results of operations and
changes in financial position of GMB as of the
date and for the period indicated.
(b) No Violation. Neither the execution and
delivery of this Agreement or the Servicing
Purchase Agreement by AFC, AVC and GMB, nor the
consummation by AFC, AVC and GMB of the
transactions contemplated hereby and thereby, nor
compliance by AFC, AVC and GMB with any of the
terms or provisions hereof and thereof, will (i)
violate, conflict with or result in a breach of
any provision of the Charter, Articles of
Incorporation or Bylaws of AFC, AVC or GMB, or
(ii) assuming that the consents and approvals
referred to in Section 12(c) are duly obtained,
(A) violate any statute, code, ordinance, rule,
regulation, judgment, order, writ, decree or
injunction applicable to AFC, AVC or GMB, or any
of its properties or assets, or (B) violate,
conflict with, result in a breach of any
provisions of or the loss of any benefit under,
constitute a default (or an event, which, with
notice or lapse of time, or both, would constitute
a default) under, result in the termination of or
a right of termination or cancellation under,
accelerate the performance required by, or result
in the creation of any lien, pledge, security
interest, charge or other encumbrance upon any of
the respective properties or assets of AFC, AVC or
GMB under, any of the terms, conditions or
provisions of any note, bond, mortgage, indenture,
deed of trust, license, lease, agreement or other
instrument or obligation to which AFC, AVC or GMB
is a party, or by which they or any of their
respective properties or assets may be bound or
affected, except (in the case of this subclause
(b)(ii)(B)) for such violations, conflicts,
breaches or defaults which, either individually or
in the aggregate, would not have a Material
Adverse Effect on AFC, AVC or GMB.
(c) Consents and Approvals. Except as set
forth on Schedule 12(c) hereto and except for the
filing of applications and notices with, and the
obtaining of consents and approvals of, as
applicable, federal and state bank regulatory
authorities, and the consent or approval of the
lessors to the Company's assignment of the Leases
to ALBANK, as appropriate, none of AFC, AVC and
GMB is required to obtain the consent or approval
of, or give notice to, any third party in
connection with the execution and delivery by AFC,
AVC and GMB of this Agreement or the Servicing
Purchase Agreement and the consummation of the
transactions contemplated hereby and thereby.
(d) Title to Real and Personal Property;
Encumbrances; and Leases.
(i) Except as set forth on Schedule
12(d)(i) hereto, the Company has good and
marketable fee title to all the Real Property and
all Personal Property owned by it which is being
purchased by ALBANK hereunder and owns such
property free and clear of any and all
Encumbrances, except Permitted Encumbrances and
Permitted Exceptions.
(ii) Except as set forth on Schedule
12(d)(ii) hereto, none of AFC, AVC or GMB has
received any notice of violation of any applicable
zoning or environmental regulation, ordinance or
other law, order, regulation or requirement
relating to (A) the operations conducted from or
at the Branches or (B) the Real Property (a
"Violation") and the Company's has no knowledge of
any such Violation of a material nature. The
Company shall give ALBANK notice of any such
Violation that it receives prior to Closing (a
"Violation Notice"), and the provisions of Section
15(d) shall apply thereto. Except as set forth on
Schedule 12(d)(ii) hereto, all buildings and
structures constituting the Purchased Branches or
the OREO conform in all material respects with all
applicable ordinances, codes and regulations, or
are not required to conform due to grandfathering
clauses contained in such ordinances, codes or
regulations, and all permits, licenses, approvals
and other authorizations, required by any
governmental authority or third party have been
obtained and are in full force and effect. The
Company has the right under all applicable laws
and Leases to use all of the Real Property Assets
for the use for which they are currently being
used, and there is no condemnation proceeding
pending or, to the knowledge of the Company,
threatened, which would preclude or impair the use
of the Purchased Branches as currently being used
in the conduct of the banking business of GMB or
the use of the OREO properties in the manner in
which each is currently being used. For purposes
of this Agreement, "to the knowledge of the
Company" or words of substantially identical
import shall mean any fact, condition or
circumstance actually known by an officer of the
Company in the reasonable exercise of such
officer's duties.
(iii) Annexed to Schedule 1.9 are
true and complete copies of all of the Leases, and
GMB is the tenant with respect to each such Lease.
Each of the Leases and each of the Premises Leases
is valid and binding on GMB and, to the Company's
knowledge, valid and binding on and enforceable
against all other respective parties to the Leases
and the Premises Leases in accordance with their
respective terms (subject to bankruptcy,
insolvency, reorganization, moratorium and similar
laws affecting the rights and remedies of
creditors generally and general principles of
equity). There are not, under the Leases or the
Premises Leases, any existing breaches, defaults,
events of default by GMB, or events which with
notice and/or lapse of time would constitute a
breach, default or event of default by GMB, nor
has the Company received notice of, or made a
claim with respect to, any breach or default by
any other party to the Leases or the Premises
Leases. GMB enjoys quiet and peaceful possession
of all such leased properties occupied by it as
lessee. All rent on the Leases and the Premises
Leases has been paid through the current month.
(iv) The Real Property and Personal
Property which are being purchased by ALBANK
hereunder are in such maintenance, repair and
operating condition, ordinary wear and tear
excepted, as is consistent with customary prior
business practice at the Branches, are adequate
for the purposes for which they are now being or
are anticipated to be used, and are free from any
material defects.
(e) Loan Portfolio.
(i) Except as set forth on Schedule
12(e)(i) hereto, to the knowledge of the Company,
(a) each of the Loans was validly and legally made
and constitutes a valid and binding agreement of
the borrower enforceable in accordance with its
terms (A) subject to bankruptcy, insolvency,
reorganization, moratorium and similar laws
affecting the rights and remedies of creditors
generally, (B) subject to general principles of
equity, and (C) provided that certain remedies,
waivers and other provisions of the loan documents
may not be enforceable, but such unenforceability
will not render the loan documents invalid as a
whole or preclude the judicial enforcement of the
obligation of the borrower to repay the principal
thereon as provided in the note, the foreclosure
of any mortgage or the enforcement of any security
agreement; (b) any mortgage or security agreement
relating to each Loan is properly secured and
recorded or perfected and represents a valid
mortgage or security interest on properties
described therein; and (c) no amount owed under
any Loan is subject to any meritorious defenses
which may be asserted against GMB. GMB has not
entered into any agreement which, to the Company's
knowledge, will result in a future waiver or
negation of any material rights or remedies
currently available against the borrower or
guarantor, if any, on any such Loan. No claim,
counterclaim, set-off right or other similar right
has been asserted, and no grounds for any
meritorious claim, counterclaim, set-off right or
other similar right exists, with respect to any
Loan which could impair the collectibility
thereof. For purposes of this Section 12(e), a
claim, counterclaim, set-off right or other
similar right or defense is "meritorious" if it
survives a motion for summary judgment.
(ii) Except as set forth on Schedule
12(e)(ii) hereto, each mortgage securing a Loan
has been and is evidenced by documentation of the
types customarily employed by GMB, which are
consistent in all material respects with federal
and state banking practices and prudent banking
standards, and complete copies thereof have been
maintained by GMB in accordance with such
standards and practices. GMB has duly performed
in all material respects all of its obligations
under such documentation to the extent that such
obligations to perform have accrued.
(iii) Except as set forth on
Schedule 12(e)(iii) hereto, GMB owns and holds the
entire mortgage or security interest in any
properties securing any of the Loans free and
clear of all prior liens, claims, equities,
options, security interests, charges, encumbrances
or restrictions of any kind or nature, and no
person other than the borrowers has any prior
mortgage or security interest therein. With
respect to any Small Business Administration
("SBA")-guaranteed loan in GMB's portfolio, the
SBA guarantee is in full force and effect and the
Company has not received any notice of any matter
pending or threatened which would adversely affect
such guarantee and, to the knowledge of the
Company, there are no facts or circumstances which
would provide a basis for any such matter in the
future.
(iv) Except as disclosed on Schedule
12(e)(iv) hereto, to the Company's knowledge, all
of the Loans currently held by GMB were solicited,
originated and exist in material compliance with
all applicable loan policies and procedures of GMB
and comply in all material respects with all
applicable federal and state laws, rules and
regulations, including, but not limited to,
applicable usury statutes, the Truth in Lending
Act, the Equal Credit Opportunity Act, the Real
Estate Settlement Procedures Act, the Flood
Disaster Protection Act, and other applicable
consumer protection statutes and the regulations
thereunder. Schedule 12(e)(iv) separately lists
all Loans identified to date as involving Auto
Loan Pricing Exceptions.
(v) Except as set forth on Schedule
12(e)(v) hereto, GMB is not a party to any written
or oral loan agreement, note or borrowing
arrangement with respect to a Loan under the terms
of which the obligor is over 30 days delinquent in
payment of principal or interest or in default of
any other provision.
(vi) Schedule 12(e)(vi) hereto sets
forth all loan commitments (including
participation commitments) of GMB outstanding as
of the date of this Agreement (to be updated as of
the Pre-closing Close of Business), identifying
each commitment by loan type.
(vii) With respect to Loans having
an aggregate outstanding principal amount of less
than $10,000 or, in the case of credit lines or
commitments to lend, having authorized credit of
less than $10,000, in each case as of the date
hereof (the "Small Loans"), only a material breach
of any representation or warranty made by the
Company in this Section 12(e) shall be deemed to
be a breach of such representation or warranty for
purposes of Section 14(j), Section 16(b) or
Section 21 hereof.
(viii) As of the date hereof the Late
Fee Receivable has been, and as of the Pre-closing
Close of Business the Late Fee Receivable will
have been, booked in accordance with GMB's normal
operating procedures as in effect during the two
fiscal quarters preceding the date hereof.
(f) Absence of Certain Changes or Events.
Except as may be set forth on Schedule 12(f)
hereto:
(i) to the knowledge of the Company,
since June 30, 1995 there has been no occurrence
and no condition has arisen having a Material
Adverse Effect on GMB;
(ii) since January 1, 1992, GMB has
carried on its business only in the ordinary
course, in compliance in all material respects
with applicable law and consistent with prior and
prudent banking and business practice;
(iii) GMB has not entered into any
agreement, contract, commitment or transaction
relating to or affecting the Branches, except for
those in the ordinary course of business (none of
which, individually or in the aggregate, has, or
could reasonably be expected to have, a Material
Adverse Effect on the operation of the Branches);
(iv) GMB has not suffered any strike,
work stoppage, slowdown, or other labor
disturbance at the Branches;
(v) since June 30, 1995 there has not
been any change in any of the accounting methods
or practices or the loan policies, procedures or
practices of GMB at the Branches or any change in
the value at which assets at the Branches are
carried on the consolidated or unconsolidated
balance sheets of GMB and the Company other than
changes that are reflected in their respective
profit and loss statements;
(vi) since June 30, 1995, GMB has not
received any notice or indication of the intention
of any person or entity to terminate any material
agreement with GMB affecting the Branches or any
notice or indication from any material depositor,
customer or supplier of GMB of any intention to
cease doing business with, materially change the
price or other terms on which business is
transacted with or materially reduce the business
transacted with GMB at the Branches; and
(vii) since June 30, 1995, all
suspense accounts of GMB with respect to the
Branches have been reconciled not less often than
monthly, and no differences over $500 exist.
(g) Legal Proceedings.
(i) Except as set forth on Schedule
12(g) hereto, the Company is not a party to any,
and there are no pending or, to the Company's
knowledge, threatened, legal, administrative,
arbitral or other proceedings, claims, actions or
governmental or regulatory investigations of any
nature against or affecting AVC or GMB or
challenging the validity or propriety of this
Agreement or the Servicing Purchase Agreement or
the transactions contemplated hereby and thereby,
and there is no reasonable basis for any such
proceeding, claim, action or governmental or
regulatory investigation. There is no injunction,
order, judgment, decree, or regulatory restriction
imposed upon the Company or the assets of the
Company which, either individually or in the
aggregate, has had, or could reasonably be
expected to have, a Material Adverse Effect on AVC
or GMB or to affect in a materially adverse manner
the ability of any of AFC, AVC or GMB to fulfill
its obligations under this Agreement or the
Servicing Purchase Agreement. To the knowledge of
the Company, there are no facts, circumstances or
conditions affecting the Branches which would
indicate or suggest the possibility of any
unrecognized future loss caused by defalcation,
embezzlement or other employee malfeasance or by
payments made or accepted in violation of any law
or regulation.
(ii) With respect to the lawsuits listed
on Schedule 12(g) on the date hereof, ALBANK shall
have the option, to be exercised, if at all, prior
to the Closing, to remove the related Loan from
the relevant Loan Schedule.
(h) Taxes and Tax Returns. Except as set
forth on Schedule 12(h) hereto, each of AFC, AVC
and GMB has, to the best of its knowledge, duly
filed in correct form all federal, state, county
and local information returns and tax returns
required to be filed by it on or prior to the date
hereof (all such returns being accurate and
complete) and has duly paid or made provisions for
the payment of all Taxes (as hereafter defined)
and other governmental charges which have been
incurred or are due or claimed to be due from it
by federal, state, county or local taxing
authorities on or prior to the date hereof
(including without limitation, if and to the
extent applicable, those due in respect of its
properties, income, business, capital stock,
deposits, franchises, licenses, sales and
payrolls, and any business profits, business
enterprise or other tax), other than Taxes or
other charges that are not yet delinquent or are
being contested in good faith and have not been
finally determined or that are not, individually
or in the aggregate, material in amount, provided,
however, that the Company agrees to pay and
indemnify ALBANK with respect to any Taxes
referred to in this Section 12(h) for which ALBANK
receives any tax xxxx regardless of whether the
amount is material or otherwise.
As used in this Section 12(h), the term
"Taxes" means all federal, state, county, local
and foreign income, excise, gross receipts, ad
valorem, profits, gains, property, sales,
transfer, use, payroll, employment, severance,
withholding, duties, intangibles, franchise and
other taxes, charges, levies or like assessments,
together with all penalties and additions to tax
and interest thereon.
(i) Officers and Employees. Schedule 12(i)
hereto sets forth a true, complete and correct
list of the name and address of each Employee, the
position of each such Employee, the current salary
or wage of each such Employee and a description of
each Employee Plan or Employee Agreement which
affects each such Employee.
(j) Other Statements and Reports. Except as
set forth on Schedule 12(j).1 hereto, AVC and GMB
have timely filed all material reports,
registrations and statements, together with any
amendments required to be made with respect
thereto, that they were required to file since
January 1, 1995 with (i) the Board of Governors of
the Federal Reserve System (the "Federal Reserve
Board"), (ii) the FDIC, (iii) the Vermont
Department of Banking, Insurance and Securities
and any other state banking commissions or any
other state regulatory authority (each a "State
Regulator") and (iv) any self-regulatory
organization or other regulatory agency and all
other material reports and statements required to
be filed by them since January 1, 1995, including
without limitation, any report or statement
required to be filed pursuant to the laws, rules
or regulations of the United States, the Federal
Reserve Board, the FDIC, any State Regulator or
any self-regulatory organization, and have paid
all fees and assessments due and payable in
connection therewith. Except as set forth on
Schedule 12(j).2 hereto, there is no material
unresolved violation, criticism or exception by
any regulatory agency with respect to any report
or statement relating to any examination of GMB.
(k) Agreements with Regulatory Agencies.
Except as set forth on Schedule 12(k) hereto, GMB
is not now subject to any cease-and-desist or
other order issued by, and is not now a party to
any written agreement, consent agreement or
memorandum of understanding with, and is not now a
party to any commitment letter or similar
understanding to, and is not now subject to any
order or directive by, and is not now a recipient
of any extraordinary supervisory letter from, and
is not now subject to any board resolution adopted
at the request of, any regulatory agency that
restricts the conduct of its business or that in
any manner relates to its management or its
business, nor has GMB been advised by any
regulatory agency that it is considering issuing
or requesting any such regulatory agreement.
(l) Environmental Matters. Except as set
forth on Schedule 12(l) hereto:
(i) To the knowledge of the Company,
the Purchased Branches, the OREO and the Loan
Properties (as hereinafter defined) are, and have
been, in material compliance with all applicable
environmental laws and with all rules,
regulations, standards and requirements of the
United States Environmental Protection Agency (the
"EPA") and of state and local agencies with
jurisdiction over pollution or protection of the
environment.
(ii) There is no suit, claim, action or
proceeding pending or, to the knowledge of the
Company, threatened, before any governmental
entity or other forum in which the Company has
been or, with respect to threatened proceedings,
may be, named as a defendant (A) for alleged
noncompliance (including by any predecessor), with
any environmental law, rule, regulation, standard
or requirement or (B) relating to the release into
or presence in the Environment (as hereinafter
defined) of any Hazardous Materials (as
hereinafter defined) or Oil (as hereinafter
defined) at any Purchased Branch or OREO.
(iii) There is no suit, claim,
action or proceeding pending or, to the knowledge
of the Company, threatened, before any
governmental entity or other forum in which the
Company has been or, with respect to threatened
proceedings, may be, named as a defendant (A) for
alleged noncompliance (including by any
predecessor) with any environmental law, rule,
regulation, standard or requirement or (B)
relating to the release into or presence in the
Environment of any Hazardous Material or Oil
whether or not occurring at any Loan Property.
(iv) To the knowledge of the Company,
there are no facts or circumstances which would
provide a reasonable basis for any suit, claim,
action or proceeding as described in Sections
12(l)(ii) and 12(l)(iii).
(v) To the knowledge of the Company,
during the period of GMB's ownership or operation
of the Purchased Branches and the OREO, there has
been no release of Hazardous Material or Oil in,
on, under or affecting such property. To the
knowledge of the Company, during the period of
GMB's holding of a security interest in a Loan
Property, there has been no release of Hazardous
Material or Oil in, on, under or affecting such
Loan Property. To the knowledge of the Company,
prior to the period of GMB's ownership or
operation of the Purchased Branches or the OREO or
GMB's holding of a security interest in a Loan
Property, there was no release of Hazardous
Material or Oil in, on, under or affecting the
Purchased Branches, the OREO or Loan Property.
During the period of GMB's ownership or operation
of the Purchased Branches or the OREO or GMB's
holding of a security interest in a Loan Property,
there has not been any presence of Hazardous
Material or Oil discovered in, on, under or
affecting the Purchased Branches or the OREO or,
to the knowledge of the Company, such Loan
Property, and, to the knowledge of the Company,
prior to the period of GMB's ownership or
operation of the Purchased Branches or the OREO or
GMB's holding of a security interest in a Loan
Property, there was not any presence of Hazardous
Material or Oil discovered in, on, under or
affecting the Purchased Branches or the OREO or
such Loan Property.
(vi) GMB does not participate in the
management of a Loan Property within the meaning
of 40 C.F.R. Section 300.1100(c).
(vii) The following definitions
apply for purposes of this Agreement: (A) "Loan
Property" means any property securing a loan
subject to this transaction, or, where required by
the context, GMB is deemed to be the owner or
operator of such property; (B) "Hazardous
Material" means any pollutant, contaminant, or
hazardous material as defined in or pursuant to
the Comprehensive Environmental Response,
Compensation, and Liability Act, the Resource
Conservation and Recovery Act of 1976, or any
other federal, state, county or local
environmental law, regulation, or requirement, all
as may be amended from time to time, except for
those types and quantities of such substances that
typically are present in office or residential
environments; (C) "Oil" means any insoluble or
partially soluble oil of any kind or origin or in
any form, as defined in or pursuant to any
federal, state, or local environmental law,
regulation, or requirement, all as may be amended
from time to time; and (D) "Environment" means any
soil, surface waters, groundwaters, stream
sediments, surface or subsurface strats, and
ambient air, and any other environmental medium.
(m) Insurance. All of the policies relating
to insurance maintained by the Company with
respect to the Branches, including, without
limitation, the Real Property, the Personal
Property, the Loans and the Servicing Business (or
any comparable policies entered into as a
replacement therefor) set forth on Schedule 7(i)
are in full force and effect and the Company has
not received any notice of cancellation with
respect thereto.
(n) Transactions with Certain Persons. None
of the Loans to be acquired in this transaction
was extended to any officer, director or
greater-than-5% stockholder of the Company or any
affiliates (as defined in Rule 144(a)(1) under the
Securities Act of 1933) of any such officer,
director or stockholder (individually, an
"Interested Person"), other than loans made in the
ordinary course of business on terms substantially
the same as those prevailing at the time for
comparable transactions with other, unaffiliated
persons, and which did not and do not involve any
unusual risk (including of non-collectibility) or
other features unfavorable to GMB. Schedule 12(n)
hereto contains a full description of any
outstanding Loan or Loans by GMB to an Interested
Person which, either individually or in the
aggregate, have current outstanding balances of
$10,000 or more (including in the outstanding
balance all amounts which GMB is obligated to
advance but not including loans secured by cash
collateral).
(o) Disclosure. All material facts relating
to the business, operations, properties, assets,
liabilities, results of operations and financial
condition of GMB affecting the Branches have been
disclosed to ALBANK in this Agreement and the
Servicing Purchase Agreement and the Schedules and
Exhibits furnished hereto and thereto. No
representation or warranty contained in this
Agreement or the Servicing Purchase Agreement, and
no statement contained in any certificate, list or
other writing furnished to ALBANK pursuant to the
provisions hereof or thereof, to the knowledge of
the Company, contains any untrue statement of a
material fact or omits to state a material fact
necessary in order to make the statements herein
or therein, in light of the circumstances in which
they are made, not misleading. No information
material to the Agreement or the Servicing
Purchase Agreement and which is necessary to make
the representations and warranties contained
herein and therein not misleading, to the
knowledge of the Company, has been withheld from,
or has not been delivered in writing to, ALBANK.
The information furnished or to be furnished by
the Company to ALBANK pursuant to Section 6 to
complete and file regulatory applications and for
the purpose of obtaining regulatory approvals is
or will be true and complete as of the date so
furnished.
(p) Brokers or Finders. Except for Bank
Analysis Center, Inc., the Company has not
employed or agreed to retain any broker or finder
in connection with the transactions contemplated
by this Agreement and the Servicing Purchase
Agreement, and the Company agrees to indemnify
ALBANK against any claim arising out of such
employment of or agreement to retain any such
broker or finder by the Company.
(q) No Foreign Person. The Company
represents and warrants to ALBANK that each of
AFC, AVC and GMB is not a "foreign person," as
defined in Section 1445(f)(3) of the Code and is a
"United States person," as defined in Section
7701(a)(30) of the Code. In confirmation of the
foregoing, the Company shall deliver to ALBANK at
the Closing a Certification of Nonforeign Status
substantially in the form of Exhibit G.
(r) Reaffirmance of Representations and
Warranties. The Company repeats and reaffirms,
as if set forth herein, each and every
representation and warranty with respect to the
Servicing Business made by the Company in the
Servicing Purchase Agreement.
13. REPRESENTATIONS AND WARRANTIES OF ALBANK.
ALBANK hereby represents and warrants to
each of AFC, AVC and GMB as of the date of this
Agreement and as of the Closing Date as follows:
(a) Corporate Organization; Powers and
Authority.
(i) ALBANK is a federal savings bank,
duly organized, validly existing and in good
standing under the laws of the United States of
America. ALBANK has the corporate power and
authority to own its properties, to effect this
transaction and to carry on its business as
currently conducted.
(ii) The deposit accounts of ALBANK are
insured by the FDIC, to the fullest extent
permitted by law, and all premiums and assessments
required in connection therewith have been paid by
ALBANK.
(iii) ALBANK has the corporate power
and authority to own or lease all of its
properties and assets and to carry on its business
as it is now being conducted and is duly licensed
or qualified to do business in each jurisdiction
in which the nature of the business conducted by
it or the character or the location of the
properties and assets owned or leased by it makes
such licensing or qualification necessary, except
where the failure to be so licensed or qualified,
either individually or in the aggregate, would not
have a Material Adverse Effect on ALBANK.
(iv) ALBANK has full corporate power and
authority to execute and deliver this Agreement
and the Servicing Purchase Agreement and to
consummate the transactions contemplated hereby
and thereby. The execution and delivery of this
Agreement and the Servicing Purchase Agreement and
the consummation of the transactions contemplated
hereby and thereby have been duly and validly
approved by the Board of Directors of ALBANK and
ALBANK Financial Corporation. No other corporate
proceedings are necessary to approve this
Agreement and the Servicing Purchase Agreement and
to consummate the transactions contemplated hereby
and thereby. Each of this Agreement and the
Servicing Purchase Agreement has been duly and
validly executed and delivered by ALBANK and
constitutes a valid and binding obligation of
ALBANK, enforceable against ALBANK in accordance
with its terms, subject to applicable bankruptcy,
insolvency, and similar laws affecting creditors'
rights generally and the rights of creditors of
insured depository institutions, and subject to
general principles of equity, whether applied in a
court of law or a court of equity.
(b) No Violation. Neither the execution and
delivery of this Agreement or the Servicing
Purchase Agreement by ALBANK, nor the consummation
by ALBANK of the transactions contemplated hereby
and thereby, nor compliance by ALBANK with any of
the terms or provisions hereof and thereof, will
(i) violate, conflict with or result in a breach
of any provision of the Charter or Bylaws of
ALBANK, or (ii) assuming that the consents and
approvals referred to in Section 13(c) are duly
obtained (A) violate any statute, code, ordinance,
rule, regulation, judgment, order, writ, decree or
injunction applicable to ALBANK, or any of its
properties or assets, or (B) violate, conflict
with, result in a breach of any provisions of or
the loss of any benefit under, constitute a
default (or an event, which, with notice or lapse
of time, or both, would constitute a default)
under, result in the termination of or a right of
termination or cancellation under, accelerate the
performance required by, or result in the creation
of any lien, pledge, security interest, charge or
other encumbrance upon any of the properties or
assets of ALBANK under, any of the terms,
conditions or provisions of any note, bond,
mortgage, indenture, deed of trust, license,
lease, agreement or other instrument or obligation
to which ALBANK is a party, or by which it or any
of its properties or assets may be bound or
affected, except (in the case of this clause
(b)(ii)(B)) for such violations, conflicts,
breaches or defaults which, either individually or
in the aggregate, would not have a Material
Adverse Effect on ALBANK.
(c) Consents and Approvals. Except for the
filing of applications and notices with, and the
consents and approvals of, as applicable, federal
and state bank regulatory authorities, including
the OTS and, if necessary, the Vermont Department
of Banking, Insurance and Securities, ALBANK is
not required to obtain the consent or approval of,
or give notice to, any third party in connection
with the execution and delivery by ALBANK of this
Agreement or the Servicing Purchase Agreement and
the consummation of the transactions contemplated
hereby and thereby.
(d) Legal Proceedings. ALBANK is not a
party to any, and there are no pending or, to
ALBANK's knowledge, threatened, legal,
administrative, arbitral or other proceedings,
claims, actions or governmental or regulatory
investigations of any nature against or affecting
ALBANK challenging the validity or propriety of
this Agreement or the Servicing Purchase Agreement
or the transactions contemplated hereby or
thereby, and there is no reasonable basis for any
such proceeding, claim, action or governmental or
regulatory investigation against ALBANK. There is
no injunction, order, judgment, decree, or
regulatory restriction imposed upon ALBANK or the
assets of ALBANK which, either individually or in
the aggregate, materially adversely affects, or
could reasonably be expected to materially
adversely affect the ability of ALBANK to fulfill
its obligations under this Agreement or the
Servicing Purchase Agreement. For purposes of
this Agreement, "to ALBANK's knowledge" or words
of substantially identical import shall mean any
fact, condition or circumstance actually known by
an officer of ALBANK in the reasonable exercise of
such officer's duties.
(e) Agreements with Regulatory Agencies.
ALBANK is not subject to any cease-and-desist or
other order issued by, nor is it a party to any
written agreement, consent agreement or memorandum
of understanding with, nor is it a party to any
commitment letter or similar understanding to, nor
subject to any order or directive by, nor a
recipient of any extraordinary supervisory letter
from, nor has it adopted any board resolution at
the request of any regulatory agency that
restricts the conduct of its business or that in
any manner relates to its management or its
business, such that the ability of ALBANK to
fulfill its obligations under this Agreement or
the Servicing Purchase Agreement could be
materially adversely affected, nor has ALBANK been
advised by any regulatory agency that it is
considering issuing or requesting any such
regulatory agreement.
(f) Disclosure. All facts which could
materially adversely affect the ability of ALBANK
to consummate the transaction provided for herein
have been disclosed to the Company. No
information material to the Agreement or the
Servicing Purchase Agreement and which is
necessary to make the representations and
warranties contained herein and therein not
misleading, to the knowledge of ALBANK, has been
withheld from, or has not been delivered in
writing to, the Company. Any information
furnished or to be furnished by ALBANK to the
Company pursuant to Section 6 to complete and file
any regulatory applications and for the purpose of
obtaining regulatory approvals is or will be true
and complete as of the date so furnished.
(g) Brokers or Finders. Except for
Northeast Capital & Advisory, Inc., ALBANK hereby
represents and warrants to the Company that it has
not employed or agreed to retain any broker or
finder in connection with the transactions
contemplated by this Agreement and the Servicing
Purchase Agreement, and ALBANK agrees to indemnify
the Company against any claim arising out of any
such employment of or agreement to retain any such
broker or finder by ALBANK.
14. OTHER PROVISIONS.
(a) Returned Items. Any items, other than
those issued by a federal, state or local
government or related entity, that were credited
for deposit to an account at the Branches prior to
the Closing Date and are returned unpaid within
ninety (90) days and any checks issued by a
federal, state or local government or any related
entity that were credited for deposit to an
account at the Branches prior to the Closing Date
and are returned unpaid within one year after the
Closing Date ("Returned Items"), will be handled
in the following manner:
(i) If ALBANK's bank account is charged
for the Returned Item, ALBANK will attempt to
obtain reimbursement from the account to which or
from the party to whom the Returned Item was
credited. If there are sufficient funds in the
account to which such Returned Item was credited
or any other accounts on deposit at the Branches
or at any other branch office of ALBANK standing
in the name of the party liable for such item,
ALBANK will, to the extent legally permissible,
debit any or all of such accounts an amount equal
in the aggregate to the Returned Item. If those
accounts do not contain funds sufficient to
reimburse ALBANK fully (for reasons other than
ALBANK's breach of Section 14(b) of this
Agreement), or ALBANK is otherwise unable to debit
such accounts, the Company will, upon notice from
ALBANK, immediately report to ALBANK the amount of
the Returned Item and ALBANK will assign the Item
to the Company for collection;
(ii) If the Company's bank account is
charged for the Returned Item and if there are
sufficient funds in the account to which such
Returned Item was credited or any other accounts
on deposit at the Branches or at any other branch
office of ALBANK standing in the name of the party
liable for such item, ALBANK will, to the extent
legally permissible, debit any or all of such
accounts an amount equal in the aggregate to such
Returned Item and shall repay that amount to the
Company. If there are not sufficient funds in the
accounts (for reasons other than ALBANK's breach
of Section 14(b) of this Agreement), ALBANK shall
have no obligation to repay the Company unless and
until ALBANK obtains reimbursement from the party
liable for such Returned Item.
(b) Holds. Holds that have been placed by
the Company on particular accounts or on
individual checks, drafts or other instruments
before the Closing Date will be continued by
ALBANK under the same terms after the Closing
Date. All such holds will be reflected on the
trial balance tape delivered to ALBANK on the
Closing Date.
(c) Notices to Depositors.
(i) Promptly after the Closing Date,
the Company, at its own expense, will mail to all
holders of Deposit Liabilities transferred
pursuant to this Agreement who have statement
accounts closing statements advising them that:
(A) their balance (indicated on the statement) has
been transferred to ALBANK as of the Closing Date,
and (B) they should check the balances indicated
and address any questions to ALBANK for
resolution, provided that ALBANK shall have given
its prior consent to the text of such release,
such consent not to be unreasonably withheld.
(ii) ALBANK, with the Company's prior
written consent (which shall not be unreasonably
withheld), may, at its own expense, following
receipt of all required regulatory approvals for
the transactions contemplated herein, communicate
with, and deliver information, brochures,
bulletins, press releases and other communications
to, depositors and borrowers of the Branches
concerning the transactions contemplated by this
Agreement and concerning the business and
operations of ALBANK. The Company, if so
requested by ALBANK, shall on behalf of ALBANK,
and at ALBANK's expense, furnish such information
and communications to depositors and borrowers in
as reasonable a manner as practicable.
(d) ATM Cards. The Company will provide
ALBANK with a list of ATM card holders no later
than forty-five (45) days prior to the Closing
Date.
(e) Reimbursements. For a period of one
hundred and eighty (180) days after the Closing
Date the Company will promptly reimburse ALBANK
for (i) any amount ALBANK refunds to customers of
the Branches in interest adjustments after the
Closing Date arising out of errors occurring prior
to the Closing Date, and (ii) any amount which
ALBANK is required to refund to customers of the
Branches after the Closing Date as a result of the
cancellation of services formerly provided by the
Company, in accordance with a schedule of service
charges, for which such customers had prepaid the
Company prior to the Closing Date, provided ALBANK
does not offer those services as of the Closing
Date.
(f) Withholding.
(i) The Company shall deliver to ALBANK
(A) prior to the Closing Date a list of all "B"
(TIN certifications do not match) and "C"
(underreporting/IRS imposed withholding) notices
from the IRS imposing withholding restrictions and
(B) for a period of one hundred twenty (120) days
after the Closing Date, all notices received by
the Company from the IRS releasing withholding
restrictions on Deposit Liabilities transferred to
ALBANK pursuant to this Agreement.
(ii) Any amounts required by any
governmental agency to be withheld from any of the
Deposit Liabilities (the "Withholding
Obligations") will be handled in the following
manner:
(A) Any Withholding Obligations
required to be remitted to the appropriate
governmental agency prior to the Closing Date will
be withheld and remitted by the Company, and any
other sums withheld by the Company pursuant to
Withholding Obligations prior to the Closing Date
also shall be remitted by the Company to the
appropriate governmental agency on or prior to the
time they are due.
(B) Any Withholding Obligations
required to be remitted to the appropriate
governmental agency on or after the Closing Date
with respect to Withholding Obligations on or
after the Closing Date and not withheld by the
Company as set forth in Section 14(f)(ii)(A) will
be remitted by ALBANK.
(C) Any penalties described on "B"
notices from the IRS or any similar penalties that
relate to Deposit Liabilities opened by the
Company prior to the Closing Date will be paid by
the Company promptly upon receipt of the notice.
(g) Taxpayer Information. The Company shall
deliver to ALBANK within three (3) Business Days
after the Closing Date (i) all TIN certifications
(or record of appropriate exemption) for all
holders of Deposit Liabilities acquired by ALBANK
pursuant to this Agreement in the Company's
possession; and (ii) all other information in the
Company's possession or reasonably available to
the Company required by applicable law to be
provided to the IRS with respect to the Assets and
Deposit Liabilities transferred pursuant to this
Agreement and the holders thereof, except for such
information which the Company will report on
pursuant to this Agreement. The Company believes
that it has obtained and has in its possession a
TIN certification (or record of appropriate
exemption) for all Deposit Liabilities as of the
date hereof, and agrees to obtain prior to the
Closing Date such a TIN certification (or record
of appropriate exemption) for all Deposit
Liabilities that will be assumed by ALBANK.
Promptly after the Closing Date, the Company shall
furnish ALBANK with a list of any holder as to
which the Company did not obtain a TIN
certification.
(h) Allocation of Purchase Price. The
purchase price will be allocated among the assets
acquired in the manner prescribed by Section 1060
of the Code. ALBANK and the Company will complete
IRS Form 8594 in a manner consistent with such
allocation and the parties will agree to said
allocation. If necessary, ALBANK will select an
independent consulting or accounting firm to
perform a review and analysis of the transactions
described in this Agreement, the Deposit
Liabilities assumed by ALBANK hereunder, other
tangible and intangible assets and liabilities,
and the consideration paid therefor. This review
and analysis shall be based upon records,
accounting data and other information provided by
ALBANK and the Company and shall utilize
industry-standard methodologies. The cost of this
analysis will be the sole responsibility of
ALBANK.
(i) Public Disclosure; Confidentiality.
Prior to the Closing Date, neither ALBANK nor the
Company will issue any press release or make any
public disclosure, including public announcements
or question and answer sessions with
representatives of the media or investment
analysts, about the transactions contemplated
hereby, except after consulting with and obtaining
the approval of the other party, which approval
shall not be unreasonably withheld. Each party
agrees to forward copies of any and all proposed
public disclosures, whether written or oral, to
the other party for review. Before and after the
Closing Date, each of ALBANK and the Company will
hold all non-public information relating to the
other party received by it from the other party,
directly or through agents or representatives,
under this Agreement or in the course of any
discussions or negotiations leading to this
Agreement in confidence in the same manner as it
would protect non-public information regarding
itself, unless and until such information shall
otherwise have become publicly known or public
disclosure of such information is required by law,
regulation, or judicial or administrative process,
provided, however, that any non-public information
relating to the Assets being acquired and
Liabilities being assumed by ALBANK hereunder
shall be deemed the proprietary information of
ALBANK on and after the Closing Date and from and
after such date ALBANK shall be permitted to treat
such information as it chooses in its sole
discretion and the Company shall treat such
information as non-public information subject to
the confidentiality requirements of this Section
14(i).
(j) Advice of Changes. Prior to the Closing
Date, each party will promptly advise the other of
(i) any change or the occurrence or non-occurrence
of any event having a Material Adverse Effect (in
the case of AFC, AVC or GMB) or materially
adversely affecting the ability of such party to
consummate the transactions provided for herein or
which would be reasonably likely to cause any
representation or warranty contained in this
Agreement to be untrue or inaccurate in any
material respect (in the case of each party
hereto) and (ii) any material failure of such
party to comply with or satisfy any covenant,
condition or agreement to be complied with or
satisfied by it under this Agreement prior to the
Closing Date, if such failure is not or cannot be
cured within thirty (30) days of discovery. From
time to time prior to the Closing Date, each party
will promptly supplement or amend any schedule
delivered in connection with the execution of this
Agreement to reflect any matter which, if
existing, occurring or known at the date of this
Agreement, would have been required to be set
forth or described in such schedule or which is
necessary to correct any information in such
schedule which has been rendered inaccurate
thereby. Neither the delivery of any such notice
nor any supplement or amendment to such schedule
shall limit or otherwise affect the remedies
available hereunder to the party receiving such
notice, supplement or amendment nor have any
effect for the purposes of determining
satisfaction of the conditions set forth in this
Agreement, provided, however, that in the event of
any such notice by the Company relating to its
representations and warranties in Section 12(e) or
in Section 12(1) (in the latter case, as such
relate to Loan Properties only) or any such
supplement or amendment by the Company to a
Schedule referred to in Section 12(e) or Schedule
12(l) (in the latter case, as such relates to the
Loan Properties only), (i) if the notice,
supplement or amendment discloses a breach of any
such representation or warranty relating to any
Loan other than a Small Loan, the sole right and
remedy of ALBANK for such misrepresentation or
breach shall be to remove from the relevant Loan
Schedule such Loan, and (ii) if the notice,
supplement or amendment discloses a breach of any
such representation or warranty relating to Small
Loans, ALBANK and the Company shall in good faith
negotiate an upward adjustment to the ALLL Amount;
and provided, further, that if the party receiving
any such notice, supplement or amendment elects to
proceed with the Closing, despite the failure of
the party giving such notice, supplement or
amendment to cure, remedy or correct any failure
of a condition or agreement or any breach of a
representation or warranty within the appropriate
time period, then, except as otherwise set forth
in Section 21(c)(v) with respect to the Company's
indemnification relating to the Auto Loan Pricing
Exceptions, the receiving party shall be deemed to
have waived, as of the Closing Date, any claim
that such party may otherwise have had against the
other party for any damages, satisfaction,
compensation, specific performance or other
remedy, at law or in equity, arising out of or
relating to any such failure or breach. If,
between the date hereof and the Closing, ALBANK
becomes aware of and brings to the Company's
attention a matter which, if discovered by the
Company, would, pursuant to this Section 14(j), be
required to be set forth in a notice to ALBANK or
a supplement or amendment to one of the Company's
schedules, then such matter shall be deemed to
have been the subject of such a notice, supplement
or amendment by the Company for purposes of this
Section 14(j).
(k) References to Servicing Purchase
Agreement. Whenever the words "the transactions
contemplated by this Agreement" or "the
transactions provided for in this Agreement" or
words of similar import are used, such words shall
include the purchase and sale of the Servicing
Business pursuant to the Servicing Purchase
Agreement, and whenever the words "the business of
GMB" or "the business of the Company" or words of
similar import are used, such words shall include
the Servicing Business, whether or not in either
case the Servicing Purchase Agreement or the
Servicing Business is specifically referred to,
unless and until the Servicing Purchase Agreement
may be terminated.
15. AGREEMENTS WITH RESPECT TO REAL PROPERTY.
(a) Title.
(i) ALBANK shall, promptly after the
execution of this Agreement, cause title to the
Real Property to be examined by ALBANK's title
insurer (the "Title Company"), and shall cause a
copy of the report of the Title Company to be
delivered to the Company promptly after receipt
thereof. In addition, the Company shall deliver
to ALBANK, within forty-five (45) days after the
date hereof, a survey of reasonably recent date in
respect of each of the Fee Branches and OREO
property locations. Not later than fifteen (15)
days after ALBANK receives the report of the Title
Company, ALBANK shall give notice to the Company
specifying which exceptions to title must be
removed in order for the Company to be able to
deliver title to the Real Property Assets in
accordance with the terms of this Agreement. Any
defect or Encumbrance not mentioned in such notice
shall be deemed waived by ALBANK, except defects
or Encumbrances which arise subsequent to the
issuance of such title report and prior to the
Closing and as to which ALBANK has not agreed to
accept title pursuant to the terms of this
Agreement. ALBANK shall give notice to the
Company of such additional exceptions within ten
(10) days after receipt of notice thereof from the
Title Company. All defects or Encumbrances
affecting title to the Real Property Assets other
than the Permitted Exceptions and which are
contained in such notice(s) are hereinafter
referred to as "Title Objections." Nothing
contained in this Section 15(a), including
ALBANK's acceptance of the report of the Title
Company described above, shall in any manner limit
or be deemed to waive any of the representations
and warranties of the Company or ALBANK's closing
conditions contained elsewhere in this Agreement.
(ii) Except as provided in this Section
15(a)(ii) and Section 15(a)(iii) below, the
Company shall have no obligation either to (A)
bring any action or proceeding or (B) incur any
expense or liability to remedy any Title
Objection; except that, subject to the provisions
of Section 15(d), the Company shall cause to be
removed of record at or prior to the Closing Title
Objections which can be removed by payment of a
liquidated sum ("Liquidated Title Objections").
If the Company shall be unable to deliver title
free of Title Objections other than Liquidated
Title Objections, the Company shall so notify
ALBANK and ALBANK shall have the right either (A)
to accept such title as the Company is able to
convey without reduction of the Real Property
Amount or (B) to terminate this Agreement solely
with respect to the portion of the Real Property
Assets affected by such Title Objections, in which
case the provisions of Section 15(d)(iii) shall
apply. In the event that the Company is unable to
deliver title free of Liquidated Title Objections,
the provisions of Section 15(d) shall apply.
(iii) The Company shall have the
right (but, except as provided in Section
15(a)(ii), not the obligation) to seek to remedy
any Title Objections. If the Company fails to
remedy such Title Objections prior to the Closing
Date, the provisions of the preceding Section
15(a)(ii) shall be applicable and the Company
shall promptly notify ALBANK of such failure to
remedy.
(iv) If, on the Closing Date, any Title
Objections exist, the Company may use any portion
of the Real Property Amount to cause removal or
discharge of same, provided that the Company
shall, at the Closing either (A) deliver to ALBANK
such instrument(s) (duly executed, acknowledged
and in proper form for record) as the Title
Company shall require in order to effect such
removal or discharge, together with moneys
sufficient to pay the cost of recording or filing
such instrument(s), or (B) deposit with the Title
Company in escrow sufficient moneys, acceptable to
and required by the Title Company, to ensure the
removal or discharge of all Title Objections and
the issuance in ALBANK's favor of policies of
title insurance in respect of all of the Real
Property Assets free of Title Objections.
(b) Loss or Damage. In the event of any
loss or damage to the Improvements or Leased
Branches by casualty or otherwise, this Agreement
shall continue in full force and effect, except as
provided below. The Company shall, promptly upon
the occurrence of such loss or damage, notify
ALBANK thereof and seek to prevent further
physical deterioration of the Improvements or
Leased Branches and to keep the Branch or Branches
in question open for business to the extent
practicable. In the event of any material loss or
damage to the Improvements or Leased Branches,
ALBANK shall have the right to (i) terminate this
Agreement solely with respect to the portion of
the Real Property Assets affected by such damage
or loss, in which event the provisions of Section
15(d)(iii) shall apply, or (ii) acquire the Real
Property Assets in accordance with the terms of
this Agreement, with an abatement of the Real
Property Amount in an amount equal to the amount
of any deductible under the Company's casualty
insurance policy(ies) affecting the Branch(es) in
question, in which event the Company shall (x)
deliver to ALBANK at the Closing all insurance
proceeds which the Company has received on account
of such loss or damage, (y) assign to ALBANK all
of the Company's right, title and interest in, to
and under all insurance policies applicable to
such loss or damage, and (z) deliver to ALBANK
after the Closing any insurance proceeds which the
Company receives after the Closing on account of
such loss or damage. Notwithstanding the
foregoing, in respect of the Leased Branches, if
as a result of such loss or damage the Company
shall have the right to terminate the applicable
Lease, the Company shall so notify ALBANK and
shall, upon ALBANK's written request, exercise
such right to terminate, in which case this
Agreement shall terminate with respect to the
affected Leased Branch and the provisions of
Section 15(d)(iii) shall apply. The Company shall
cooperate with ALBANK after the Closing in order
that ALBANK shall be able to collect upon
applicable insurance. Promptly after the
execution of this Agreement, the Company shall
cause ALBANK to be added as a loss payee to the
Company's casualty insurance policy(ies) with
respect to the Branches and any loss thereunder
shall be settled jointly between ALBANK and the
Company to the extent that ALBANK has not
terminated this Agreement with respect to such
Real Property Asset.
(c) Environmental Assessment. ALBANK shall
have thirty (30) days from the date hereof (the
"Inspection Period") to obtain and deliver to the
Company, at ALBANK's sole cost and expense, an
environmental assessment (the "Environmental
Assessment") performed by an expert selected by
ALBANK to determine the existence of any Hazardous
Materials or Oil in, on or under the Purchased
Branches or the OREO. In the event that the
Environmental Assessment discloses conditions
which constitute violations of Environmental Laws,
the provisions of Section 15(d) shall apply. The
Company hereby grants ALBANK and its agents and
representatives the right to enter the Purchased
Branches and OREO during the Inspection Period
during normal business hours and upon reasonable
notice to the Company to make such inspections and
analyses as are necessary for the performance of
the Environmental Assessment. In performing the
Environmental Assessment, ALBANK shall not
unreasonably interfere with the Company's normal
operations and customer and employee relations.
ALBANK acknowledges that all reports and other
documents obtained through such investigations
will remain the property of the Company prior to
the Closing Date and will not be disseminated by
ALBANK to any other individual or entity prior to
the Closing Date. In the event the transactions
contemplated hereby do not close, ALBANK will
return to the Company any documents delivered by
the Company to ALBANK under this Section 15(c)
together with (at no cost to the Company) copies
of all reports, studies, analyses and other
written work product resulting from ALBANK's (or
its agents' or contractors') investigations of the
Branches under this Section 15(c). Further, in
the event the transaction contemplated hereby does
not close, ALBANK shall, at its sole cost, restore
the Purchased Branches to their condition
immediately prior to any testing or other
activities undertaken by ALBANK.
(d) Price Abatement/Termination.
(i) In the event that (A) ALBANK gives
notice to the Company of one or more Liquidated
Title Objections which the Company is required to
cure pursuant to Section 15(a)(ii) (each a "Title
Condition"), (B) the Company receives one or more
Violation Notices other than with respect to
Environmental Violations (each a "Violations
Condition") or (C) ALBANK delivers to the Company
a copy of the Environmental Assessment, together
with a notice specifying wherein the Environmental
Assessment discloses one or more conditions which
constitute an Environmental Violation (each, an
"Environmental Condition" and, together with any
Title Condition and Violations Condition,
collectively, "Abatement Conditions"), the Company
and ALBANK shall negotiate in good faith to agree
upon the estimated cost of curing such Abatement
Conditions (the "Cost of Cure"). If the Company
and ALBANK cannot agree upon the Cost of Cure
within ten (10) days after notice of an Abatement
Condition (the "Abatement Condition Date"), the
Company and ALBANK shall each obtain a
documentation of the Cost of Cure from an expert
selected by such party, which determination shall
be rendered in writing and delivered to the other
party as soon as possible after the Abatement
Condition Date. If the Company's expert's
determination of the Cost of Cure and ALBANK's
expert's determination of the Cost of Cure do not
agree, then each of the Company and ALBANK shall
instruct its expert to attempt to agree with the
other party's expert upon a determination of the
Cost of Cure within ten (10) days after such
instruction, which agreed-upon determination shall
be binding on the parties hereto. If ALBANK's
expert and the Company's expert are unable to so
agree, ALBANK's expert and the Company's expert
shall select a third expert to determine the Cost
of Cure within ten (10) days after such selection,
and the determination of the Cost of Cure
promulgated by such expert shall be binding upon
the parties hereto.
(ii) If the Aggregate Cost of Cure for
all Abatement Conditions (the "Aggregate Cost of
Cure"), as determined in accordance with Section
15(d)(i) above, is less than or equal to $500,000,
this Agreement shall remain in full force and
effect and the Company, at the Company's election,
shall either (A) cause any or all such Abatement
Conditions to be cured or (B) deliver the Real
Property Assets to ALBANK subject to such
Abatement Condition(s), with an abatement of the
Real Property Amount in an amount equal to the
Cost of Cure, less such portion of such Cost of
Cure allocable to Abatement Condition(s) cured by
the Company prior to the Closing. If the
Aggregate Cost of Cure exceeds $500,000, the
Company, at the Company's election, shall either
(i) cause any or all of such Abatement
Condition(s) to be cured or (ii) deliver the Real
Property Assets to ALBANK, subject to any or all
of such Abatement Condition(s), with an abatement
of the Real Property Amount in an amount equal to
$500,000, less such portion of the Cost of Cure
allocable to Abatement Condition(s) cured by the
Company prior to the Closing, provided, however,
that if the Aggregate Cost of Cure exceeds
$500,000 and the Company elects not to cure the
Abatement Condition(s), ALBANK shall have the
right to terminate this Agreement and, upon such
termination, neither the Company nor ALBANK shall
have any further rights, liability or obligations
hereunder.
(iii) In the event that ALBANK,
pursuant to Sections 15(a)(ii), 15(b) or
16(g)(ii)(9) exercises its right to terminate this
Agreement with respect to a portion of the Real
Property Assets (the "Excluded Property"), the
terms of this Agreement relating thereto
(including without limitation the provisions
hereof providing for the purchase of Personal
Property related to the Excluded Property) also
shall be terminated and this Agreement shall
remain in full force and effect with respect to
the Real Property Assets other than the Excluded
Property; provided, however, that in the event
that the Excluded Property includes any two (2) of
the Purchased Branches, ALBANK may elect to
terminate this Agreement and, upon such
termination, neither the Company nor ALBANK shall
have any further rights, liability or obligations
hereunder. In such event, and unless this
Agreement is terminated in its entirety pursuant
to the immediately preceding sentence, at the
Closing, the Company shall not transfer to ALBANK
any of the Company's right, title or interest in
or to the Excluded Property and the Real Property
Amount, or the OREO Amount, as appropriate, shall
be reduced by the amount applicable to the
Excluded Property.
16. CONDITIONS TO OBLIGATIONS OF ALBANK.
The obligations of ALBANK hereunder are
subject to the satisfaction or waiver, on or
before the Closing Date, of the following
conditions; provided, however, that any waiver by
ALBANK of any one or more of the following
conditions shall not constitute a waiver of any
other condition nor shall such waiver, unless
specifically so provided, constitute a continuing
waiver:
(a) Performance. Each of the acts and
undertakings of the Company to be performed at or
before the Closing pursuant to this Agreement
shall have been duly performed in all material
respects.
(b) Representations and Warranties. The
representations and warranties of the Company
contained in Section 12 shall be true and complete
in all material respects as of the Closing Date
with the same effect as though made as of the
Closing Date. All Schedules hereto shall, to the
extent necessary, be updated and corrected (i)
within ten days of the date hereof as of the date
hereof and (ii) on the Closing Date as of the
Pre-Closing Close of Business.
(c) Authorization. This Agreement and the
Servicing Purchase Agreement and the transactions
contemplated hereby and thereby shall have been
duly authorized by all necessary corporate action
on the part of the Company.
(d) Absence of Litigation. No action, suit
or proceeding shall have been instituted or, to
the knowledge of the Company, threatened, on or
before the Closing Date in which one or more
governmental or non-governmental third parties
seeks to restrain or prohibit the transactions
contemplated hereby or which ALBANK determines in
good faith, based upon the advice of counsel, is
reasonably likely to have a Material Adverse
Effect on GMB or to result in imposition upon
ALBANK of a substantial monetary liability,
penalty, fine, assessment or charge as a result of
the parties' consummation of the transactions
provided for herein, including ALBANK's
acquisition and subsequent ownership of the Assets
and assumption of the Liabilities.
(e) No Material Adverse Change. No material
adverse change shall have occurred affecting the
Assets, Liabilities or any of the Branches or the
ability to conduct banking operations at any of
the Purchased Branches.
(f) Systems Conversion Complete. ALBANK
shall be satisfied that the Systems Conversion
shall be completed as of the opening of business
on the first Business Day after the Closing Date.
(g) Documents. The form and substance of
all documents to be delivered to ALBANK hereunder
that are not in the form of exhibits hereto or to
the Servicing Purchase Agreement shall have been
approved by ALBANK and its counsel, such approval
not to be unreasonably withheld. ALBANK shall
have received the following documents from the
Company, duly executed, and where appropriate
acknowledged, by AFC or AFC's counsel, as the case
may be:
(i) the documents and instruments
contemplated by the Servicing Purchase Agreement,
if the Servicing Purchase Agreement has not been
terminated, as provided for therein;
(ii) with respect to the Real Property,
the following documents:
(1) In respect of each of the Fee
Branches and OREO a limited warranty deed with
covenant against grantor's acts, duly executed,
acknowledged and in proper form for recording,
pursuant to which the Company shall convey to
ALBANK title to the applicable Fee Branch and OREO
in accordance with the provisions of this
Agreement;
(2) In respect of each of the
Leased Branches, (a) Assignment and Assumption of
Lease in the form of Exhibit H annexed hereto and
made a part hereof, duly executed, acknowledged
and in proper form for record, pursuant to which
the Company shall transfer to ALBANK all of the
Company's right, title and interest in, to and
under the applicable Lease (collectively, the
"Assignments") and (b) Estoppel Certificates
referred to in Section 16(g)(ii)(9);
(3) Certification of Nonforeign
Status referred to in Section 12(q);
(4) Such instruments and moneys,
if any, as shall be required to be delivered to
ALBANK pursuant to any other provisions of this
Agreement;
(5) All written warranties or
guaranties in the Company's possession with
respect to the Improvements as well as any plans
and specifications and licenses and permits in the
Company's possession with respect to the Purchased
Branches;
(6) The Company's duplicate
original of each of the Leases;
(7) Originals or photocopies of
certificates of occupancy in respect of all of the
Improvements as constituted on the Closing Date,
provided, however, that to the extent new or
amended certificates are deemed to be necessary by
ALBANK, the Company will use its best efforts to
assist ALBANK in obtaining such new or amended
certificates; provided further that the obtaining
of any such new or amended certificates shall not
be a condition precedent to ALBANK's obligations
under this Agreement;
(8) Policies of title insurance
issued by the Title Company insuring ALBANK, free
of Title Objections, as fee owner of the Real
Property and of the Improvements;
(9) An Estoppel Certificate from
each Landlord in substantially the form of Exhibit
I annexed hereto and made a part hereof (modified
and expanded, as necessary, to evidence Landlord's
consent to the assumption by ALBANK of the Xxxxxxx
Branch Lease under the particular circumstances of
such Lease), duly executed and acknowledged by
such Landlord; provided, however, that if the
condition set forth in this subparagraph (9) has
not been materially satisfied, ALBANK shall have
the right to terminate this Agreement solely with
respect to the portion of the Real Property Assets
affected, in which case the provisions of Section
15(d)(iii) shall apply;
(10) all security deposits and
advance payments of rent under the Premises
Leases; and
(11) the certificate contemplated
by Section 5(a)(i)(K); and
(iii) the Xxxx of Sale, with an inventory of
the Personal Property as of the Pre-closing Close
of Business;
(iv) a certificate of AFC's chief financial
officer stating the amount of Cash on Hand as of
the Pre-closing Close of Business;
(v) the Sale and Assignment Agreement;
(vi) such other bills of sale, assignments, and
other instruments and documents as counsel for
ALBANK may reasonably require as necessary for
transferring, assigning and conveying to ALBANK
good, marketable and insurable title to the Assets
to be transferred to ALBANK pursuant to this
Agreement, all in form and substance reasonably
satisfactory to counsel for ALBANK;
(vii) the charter and by-laws of GMB certified
by the secretary of GMB;
(viii) resolutions of the board of directors of
each of AFC, AVC and GMB certified by the
secretary of each respective entity, authorizing
the execution and delivery of this Agreement and
the Servicing Purchase Agreement and the other
documents and instruments contemplated hereby and
thereby, and the consummation of the transactions
contemplated hereby and thereby;
(ix) a certificate signed by an executive officer
of each of AFC, AVC and GMB stating that the
conditions set forth in subsections (a), (d) and
(e) of this Section 16 have been fulfilled;
(x) an opinion, dated the Closing Date, of
counsel to AFC, in a form acceptable to ALBANK and
customary for transactions of this type and an
opinion of Vermont counsel to AFC, dated the
Closing Date, in a form acceptable to ALBANK and
customary for transactions of this type;
(xi) the following documents and instruments:
(1) the books and records of the
Company referred to in the first sentence of
Section 2(e);
(2) the original executed
promissory notes or other evidences of
indebtedness relating to the Loans as of the
Pre-closing Close of Business, duly endorsed in
favor of ALBANK, together with the other documents
referred to in Sections 3(d), (e) and (f);
(3) the signature cards, orders,
contracts, deposit slips, canceled checks,
withdrawal orders and statements in the Company's
possession referred to in Section 4(a)(i);
(4) originals, if available, or
copies of the Contracts listed on Schedule 1.5 to
be assumed by ALBANK; and
(5) such other documents and
instruments as ALBANK may reasonably request.
17. CONDITIONS TO OBLIGATIONS OF THE COMPANY.
The obligations of the Company hereunder
are subject to the satisfaction or waiver on or
before the Closing Date of the following
conditions; provided, however, that any waiver by
the Company of any one or more of the following
conditions shall not constitute a waiver of any
other condition nor shall such waiver, unless
specifically so provided, constitute a continuing
waiver:
(a) Performance. Each of the acts and
undertakings of ALBANK to be performed at or
before the Closing pursuant to this Agreement
shall have been duly performed in all material
respects.
(b) Representations and Warranties. The
representations and warranties of ALBANK contained
in Section 13 shall be true and complete in all
material respects as of the Closing Date with the
same effect as though made as of the Closing Date.
(c) Authorization. This Agreement and the
Servicing Purchase Agreement and the transactions
contemplated hereby and thereby shall have been
duly authorized by all necessary corporate action
on the part of ALBANK.
(d) Absence of Litigation. No action, suit
or proceeding shall have been instituted or, to
the knowledge of ALBANK, threatened on or before
the Closing Date in which one or more governmental
or non-governmental third parties seeks to
restrain or prohibit the transactions contemplated
hereby or which the Company determines in good
faith, based upon the advice of counsel, is
reasonably likely to materially adversely affect
the ability of ALBANK to consummate the
transactions contemplated hereby or to result in
imposition on the Company of a substantial
monetary liability, fine, assessment or charge as
a result of the parties' consummation of the
transactions provided for herein.
(e) Documents. The form and substance of
all documents to be delivered to the Company
hereunder that are not in the form of exhibits
hereto or to the Servicing Purchase Agreement
shall have been approved by the Company and its
counsel, such approval not to be unreasonably
withheld. The Company shall have received the
following documents from ALBANK, duly executed,
and where appropriate acknowledged, by ALBANK or
ALBANK's counsel, as the case may be:
(i) the Assumption Agreement;
(ii) the Assignments pursuant to which
ALBANK shall assume all of the Company's
obligations as tenant under the Leases;
(iii) the federal charter and
by-laws of ALBANK certified by the secretary of
ALBANK;
(iv) resolutions of ALBANK's board of
directors, certified by ALBANK's secretary,
authorizing the execution and delivery of this
Agreement and the Servicing Purchase Agreement,
and the other documents and instruments
contemplated hereby and thereby, and the
consummation of the transactions contemplated
hereby and thereby;
(v) such check(s) as may be required by
the Title Company in payment of Vermont State real
estate transfer tax payable with respect to the
transactions contemplated by this Agreement;
(vi) a certificate signed by an
executive officer of ALBANK stating that the
conditions set forth in subsections (a), (b) and
(d) of this Section 17 have been fulfilled;
(vii) an opinion, dated the Closing
Date, of counsel to ALBANK, in a form acceptable
to the Company and customary for transactions of
this type; and
(viii) such other documents and
instruments as the Company may reasonably request.
18. CONDITIONS TO OBLIGATIONS OF BOTH PARTIES.
The obligations of both parties to this
Agreement are subject to fulfillment at or prior
to the Closing of each of the following
conditions, which may not be waived:
(a) Approval of Regulatory Authorities. All
necessary approvals, authorizations and consents
of all federal and state regulatory authorities
required to consummate the transactions
contemplated hereby shall have been obtained and
shall remain in full force and effect and all
statutory waiting periods in respect thereof shall
have expired or been terminated; provided,
however, that the condition set forth in this
Section 18(a) to ALBANK's obligation to effect the
transactions contemplated hereby shall not be met
if any such approval, authorization or consent is,
in the reasonable judgment of ALBANK, subject to
any condition or requirement that ALBANK deems to
be materially adverse or materially burdensome or
to substantially deprive ALBANK of the benefits
which it anticipates to receive in the
transaction. ALBANK agrees that the proviso of
the foregoing sentence will not apply to an order
by the Department of Justice or OTS as a result of
a competitive analysis under the Bank Merger Act
requiring ALBANK to divest branches or deposits in
order to be permitted to consummate the
transactions contemplated hereby, provided,
however, that, for purposes of calculating the
Estimated Amount and Final Amount under Section 5,
the parties hereto will proceed as though no such
divestiture had occurred or was to occur. Any
amounts received from any third party in
connection with the divestiture to such third
party before the Closing Date of any assets and/or
liabilities of the Branches that would otherwise
have been Assets or Liabilities transferred to
ALBANK hereunder shall be receivable by (and if
paid to the Company, immediately payable by it to)
ALBANK, and for purposes of calculating the
Estimated Amount and Final Amount, the quantity
and type of such divested assets and liabilities
will be considered the type of Assets and
Liabilities subject to this Agreement at Closing
hereunder. No order, injunction or decree issued
by any court or agency of competent jurisdiction
or other legal restraint or prohibition preventing
the consummation of the transactions contemplated
by this Agreement shall be in effect and no
proceeding initiated by any regulatory authority
seeking an injunction shall be pending. No
statute, rule, regulation, order, injunction or
decree shall have been enacted, entered,
promulgated or enforced by any regulatory
authority which prohibits, restricts or makes
illegal consummation of the transactions
contemplated by this Agreement (or that, in the
reasonable judgment of ALBANK, would substantially
deprive ALBANK of the benefits which it
anticipates to receive in the transactions).
(b) Closing under Servicing Purchase
Agreement. If ALBANK has not terminated the
Servicing Purchase Agreement pursuant to its
terms, the Closing under the Servicing Purchase
Agreement shall have occurred simultaneously with
the Closing hereunder.
19. TERMINATION.
(a) This Agreement shall terminate and be of
no further force or effect, and neither party will
have any obligation whatsoever to the other
hereunder, upon the occurrence of any of the
following:
(i) the expiration of thirty (30) days
after the OTS or any other governmental agency has
denied or finally refused to grant the approvals
or consents required to be obtained pursuant to
this Agreement, unless within said thirty (30)-day
period the parties agree in writing to subject or
resubmit an application to, or appeal the decision
of, the regulatory authority which denied or
finally refused to grant approval thereof;
(ii) mutual agreement of the parties
hereto;
(iii) written notice of termination
hereof given by ALBANK to AFC or by AFC to ALBANK,
if the Closing shall not have taken place by a
date that is nine months from the date hereof
other than by reason of a matter solely within the
control of the party asserting such termination;
(iv) written notice by ALBANK or AFC
given to the other party after entry of a
restraining order or injunction restraining or
prohibiting the sale or purchase of the Assets and
the lapse of any period within which such order or
injunction may be appealed; or
(v) written notice by ALBANK of
termination pursuant to Section 15(d)(iii).
(b) If prior to the Closing there shall have
been a material failure of condition, a material
breach of any representation or warranty contained
herein or a material default in the timely
performance of any of its agreements or
obligations contained herein by any party (the
"breaching party"), then any other party may give
the breaching party written notice thereof.
Subject to the provisions set forth elsewhere in
this Agreement specifically limiting the remedies
available to a party under certain circumstances,
including, without limitation, Sections 14(j),
15(a)(ii), 15(b) and 15(d), if such failure,
breach or default is not cured by the breaching
party within thirty (30) Business Days after the
date the breaching party receives such notice,
then, without prejudice to any other rights or
remedies which it may have, the party giving such
notice may, prior to the Closing, forthwith
terminate this Agreement by a second written
notice to the breaching party, provided that no
party may terminate this Agreement with respect to
a failure, breach or default related solely to the
Servicing Purchase Agreement or Servicing
Business. Notwithstanding anything to the
contrary herein contained, no party hereto shall
have the right to terminate this Agreement on
account of its own breach or any immaterial breach
by another party hereto.
20. EFFECT ON THIRD PARTIES.
Nothing in this Agreement, whether
express or implied, is intended to confer any
rights or remedies under or by reason of this
Agreement on any persons other than the parties
hereto and their respective successors and
assigns, nor is anything in this Agreement
intended to relieve or discharge the obligation or
liability of any third persons to any party to
this Agreement, nor shall any provision give any
third persons any right of subrogation or action
over or against any party to this Agreement. Each
party hereto intends that this Agreement shall not
benefit or create any right or cause of action in
or on behalf of any person other than the parties
hereto.
21. SURVIVAL OF REPRESENTATIONS, INDEMNIFICATION
AGREEMENTS AND CERTAIN OTHER MATTERS.
(a) Survival. All representations and
warranties contained in or made pursuant to this
Agreement (including in or pursuant to any exhibit
hereto or any agreement, certificate, document or
statement delivered pursuant hereto or thereto)
shall survive the Closing hereunder and under the
Servicing Purchase Agreement for the period set
forth in Section 21(f)(i), provided that those
certain representations and warranties contained
in the Servicing Purchase Agreement, whether or
not reaffirmed and repeated herein, shall not
survive such Closing, and provided further that
any representation or warranty contained herein,
to the extent it refers or relates, expressly or
by implication, to the Servicing Purchase
Agreement or the Servicing Business shall not be
deemed, solely with respect to the purchase and
sale of the Servicing Business pursuant to the
Servicing Purchase Agreement or to the Servicing
Business, to survive the Closing hereunder and
under the Servicing Purchase Agreement or to
survive termination of the Servicing Purchase
Agreement.
(b) Indemnification by ALBANK. ALBANK
hereby agrees to indemnify and hold harmless AFC,
AVC and GMB and their directors, officers,
employees and affiliates from, and to reimburse
AFC, AVC and GMB and their directors, officers,
employees and affiliates for, any loss, fee, cost,
expense, damage, liability or claim (including,
without limitation, any and all fees, costs and
expenses whatsoever reasonably incurred by the
foregoing and their counsel in investigating,
preparing for, defending against, or providing
evidence, producing documents or taking any other
action in respect of any threatened or asserted
claim) arising out of, based upon or resulting
from (i) ALBANK's breach of or failure to perform
any of its covenants or agreements contained in or
made pursuant to this Agreement or the Servicing
Purchase Agreement; (ii) the control or operation
by ALBANK of any of the Branches after the Closing
Date; or (iii) any inaccuracy in or any breach of
any representation or warranty of ALBANK contained
in or made pursuant to this Agreement or the
Servicing Purchase Agreement.
(c) Indemnification by the Company. AFC,
AVC and GMB jointly and severally agree to
indemnify and hold harmless ALBANK and its
directors, officers, employees and affiliates
from, and to reimburse ALBANK and its directors,
officers, employees and affiliates for, any loss,
fee, cost, expense, damage, liability or claim
(including, without limitation, any and all fees,
costs and expenses whatsoever reasonably incurred
by the foregoing and their counsel in
investigating, preparing for, defending against,
or providing evidence, producing documents or
taking any other action in respect of any
threatened or asserted claim) arising out of,
based upon, or resulting from (i) AFC's, AVC's or
GMB's breach of or failure to perform any of its
or their covenants or agreements contained in or
made pursuant to this Agreement or the Servicing
Purchase Agreement; (ii) the control or operation
by AFC, AVC or GMB of any of the Branches or the
OREO prior to the Closing Date; (iii) any
inaccuracy in or any breach of any representation
or warranty of the Company contained in or made
pursuant to this Agreement or the Servicing
Purchase Agreement; (iv) the control or operation
by GMB of the Trust Business prior to the
consummation of any Trust Transfer Transaction; or
(v) the Auto Loan Pricing Exceptions.
(d) Procedures. A party seeking
indemnification pursuant to this Section 21 (an
"Indemnified Party") shall give prompt notice to
the party from whom such indemnification is sought
(the "Indemnifying Party") of the assertion of any
claim, or the commencement of any action or
proceedings, in respect of which indemnity may be
sought hereunder. The Indemnified Party shall
assist the Indemnifying Party in the defense of
any such action or proceeding. The Indemnifying
Party shall have the right to, and shall at the
request of the Indemnifying Party, assume the
defense of any such action or proceeding at its
own expense. In any such action or proceeding,
the Indemnified Party shall have the right to
retain its own counsel, but the fees and expenses
of such counsel shall be at its own expense
unless:
(i) the Indemnifying Party and the
Indemnified Party shall have mutually agreed to
the retention of such counsel; or
(ii) the named parties to any such suit,
action or proceeding (including any impleaded
parties) include both the Indemnifying Party and
the Indemnified Party and, in the reasonable
judgment of the Indemnified Party, representation
of both parties by the same counsel would be
inappropriate due to actual or potential differing
interests between them.
(e) Settlement. The Indemnified Party shall
not be liable under this Section 21 for any
settlement effected without its consent of any
claim, litigation or proceeding in respect of
which indemnity may be sought hereunder, provided,
however, that the Indemnified Party shall not
unreasonably withhold its consent to any such
proposed settlement. An Indemnified Party shall,
subject to its reasonable business needs, use
reasonable efforts to minimize the indemnification
sought from the Indemnifying Party hereunder, and
to avoid furthering the consequences of the error,
omission, misrepresentation or other breach of the
Indemnifying Party. Notwithstanding the
foregoing, no investigation by an Indemnified
Party at or prior to the Closing Date shall
relieve an Indemnifying Party of any liability
hereunder, unless the Indemnified Party seeks
indemnity in respect of a representation or
warranty which it actually had reason to believe
to be incorrect as a result of its investigation
prior to the Closing Date and the Indemnified
Party failed to bring such belief to the attention
of the Indemnifying Party prior to the Closing
Date.
(f) Limitations. The obligation of the
parties to indemnify other parties pursuant to
this Section 21 shall survive the Closing;
provided, however, the time within which ALBANK or
the Company may make a claim against the other
thereunder (a "Claim") and the amount for which
such indemnification shall be made shall be
subject to the limitations set forth below in
Sections 21(f)(i) and 21(f)(ii).
(i) In the event a Claim is made
pursuant to Section 21(b)(i) or Section 21(c)(i)
relating to breach of or failure to perform
covenants or agreements, such Claim shall be made
on or before a date that is 13 months after the
later of (A) the date that the breaching party is
required to perform under such covenant or
agreement, (B) the date that such covenant or
agreement by its terms expires, or (C) the Closing
Date, or be thereafter barred, except for a Claim
with respect to Section 14(i), which shall be made
by a date that is three years after the Closing
Date, or be thereafter barred. In the event that
a Claim is made pursuant to Section 21(b)(ii) or
Section 21(c)(ii), such Claim shall be made on or
before a date that is three years after the
Closing Date, or be thereafter barred. In the
event a Claim is made pursuant to Section
21(b)(iii) or Section 21(c)(iii), such Claim shall
be made on or before a date that is 13 months
after the Closing Date, or be thereafter barred,
except that any such Claim regarding any alleged
inaccuracy in or breach of any representation or
warranty contained in the Servicing Purchase
Agreement or any representation or warranty
contained herein that refers or relates to the
Servicing Purchase Agreement or the Servicing
Business shall be made on or before the Closing
Date, or be thereafter barred. A Claim may be
made pursuant to Sections 21(c)(iv) or 21(c)(v) at
any time after the Closing.
(ii) (A) No indemnification shall be
made to ALBANK under Section 21(c)(iii) with
respect to Claims arising under this Agreement
until the aggregate amount of all such Claims
arising with respect to this Agreement shall
exceed Five Thousand Dollars ($5,000.00), in which
event ALBANK shall be indemnified and held
harmless for the aggregate amount of such
indemnifiable losses and expenses in excess of
such Five Thousand Dollars ($5,000.00) and then
only for individual items of such losses and
expenses which exceed One Hundred Dollars
($100.00) or related losses and expenses involving
a lesser amount individually but in the aggregate
involving an amount in excess of One Hundred
Dollars ($100.00).
(B) No indemnification shall be
made to AFC under Section 21(b)(iii) with respect
to Claims arising under this Agreement until the
aggregate amount of all such Claims arising with
respect to this Agreement shall exceed Five
Thousand Dollars ($5,000.00), in which event AFC
shall be indemnified and held harmless for the
aggregate amount of such indemnifiable losses and
expenses in excess of such Five Thousand Dollars
($5,000.00) and then only for individual items of
such losses and expenses which exceed One Hundred
Dollars ($100.00) or related losses and expenses
involving a lesser amount individually but in the
aggregate involving an amount in excess of One
Hundred Dollars ($100.00).
22. MISCELLANEOUS.
(a) Expenses. Except as is otherwise
specifically provided in this Agreement or the
Servicing Purchase Agreement, whether the Closing
takes place or whether this Agreement is
terminated, each party shall pay its own costs and
expenses in connection with this Agreement and the
transactions contemplated hereby, including, but
not limited to, all regulatory fees, attorneys'
fees and accounting fees.
(b) Notices. All notices, demands and other
communications hereunder shall be in writing and
shall be deemed to have been duly given if
delivered in person (provided a receipt evidencing
such delivery is obtained) or by United States
mail, certified or registered, with return receipt
requested, as follows:
(i) if to the Company, to:
Arrow Financial Corporation
000 Xxxx Xxxxxx
Xxxxx Xxxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X.
Xxxxxxxx, Chairman
with a copy to:
Xxxxxx X. Xxxxxxx, Esq.
Gallop, Xxxxxxx & Xxxxxx, X.X.
000 Xxxxx Xxxxxx, 0000
Xx. Xxxxx, Xxxxxxxx 00000
(ii) if to ALBANK, to:
ALBANK, a Federal Savings Bank
00 Xxxxx Xxxxx Xxxxxx
Xxxxxx, Xxx Xxxx 00000-0000
Attention: Xxxxxxx X.
Xxxxxxxxxx
Chairman, President
and Chief Executive Officer
with a copy to:
ALBANK, a Federal Savings Bank
00 Xxxxx Xxxxx Xxxxxx
Xxxxxx, Xxx Xxxx 00000-0000
Attention: Xxxxxxx X. Xxxxx,
Esq.
Senior Vice
President and General Counsel
and
Xxxxxx X. Xxxxxxxxxxx, Esq.
Cleary, Gottlieb, Xxxxx & Xxxxxxxx
Xxx Xxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
The persons or addresses to which mailings or
deliveries shall be made may be changed from time
to time by notice given pursuant to the provisions
of this Section 22(b). Any notice, demand or
other communications given pursuant to the
provisions of this Section 22(b) shall be deemed
to have been given on the date actually received.
(c) Successors and Assigns. All terms and
provisions of this Agreement shall be binding upon
and shall inure to the benefit of the parties
hereto and their respective transferees,
successors and assigns; provided, however, that
this Agreement and all rights, privileges, duties
and obligations of the parties hereto may not be
assigned or delegated by either party hereto
without the prior written consent of the other
party.
(d) Counterparts. This Agreement may be
executed in one or more counterparts, all of which
taken together shall constitute one instrument.
(e) Governing Law. This Agreement is made
and entered into in the State of New York, and to
the extent that federal law does not control, the
laws of that state shall govern the validity and
interpretation hereof and the performance of the
parties hereto of their respective duties and
obligations hereunder.
(f) Captions. The captions contained in
this Agreement are for convenience of reference
only, do not form a part of this Agreement and are
not to be deemed full or accurate descriptions of
the contents of any paragraph or subparagraph.
(g) Entire Agreement; Modifications;
Waivers. This Agreement and the exhibits and
schedules hereto and the Servicing Purchase
Agreement and the exhibits and schedules thereto
constitute the entire agreement between the
parties hereto pertaining to the subject matter
hereof and supersede all prior and contemporaneous
agreements, understandings, negotiations and
discussions of the parties in connection therewith
not referred to herein. No supplement or
modification, and no termination, except as
permitted by Section 19 of this Agreement, shall
be binding unless executed in writing by both
parties, and no waiver of any provision of, breach
of or default under this Agreement shall be
considered binding unless executed in writing by
the party granting such waiver. No waiver of any
provision of this Agreement shall be deemed or
shall constitute a waiver of any other provision
hereof nor shall any such waiver constitute a
continuing waiver.
(h) Survival. All obligations of the
parties that by their terms are to be performed
after, or otherwise survive, the consummation of
the transactions contemplated herein shall survive
the Closing.
IN WITNESS WHEREOF, the parties hereto have
duly executed and delivered this Agreement as of
the day and year first above written.
ARROW FINANCIAL
CORPORATION
ATTEST: By /s/ Xxxxxxx X. Xxxxxxxx
Name: Xxxxxxx X. Xxxxxxxx
Title: Chairman &
President
___________________________________
Name: Xxxx X. XxxXxxxxxx
Title: Senior Vice President/Credit Administration
ARROW VERMONT
CORPORATION
ATTEST: By /s/ Xxxxxxx X. Xxxxxxxx
Name: Xxxxxxx X. Xxxxxxxx
Title: Chairman &
President
___________________________________
Name: Xxxx X. XxxXxxxxxx
Title: Senior Vice President/Credit Administration
GREEN MOUNTAIN
BANK
ATTEST: By /s/ Xxxx X. Xxxxxx
Name: Xxxx X. Xxxxxx
Title: Treasurer
___________________________________
Name: Xxxx X. XxxXxxxxxx
Title: Senior Vice President/Credit Administration
ALBANK, FSB
ATTEST: By /s/ Xxxxxxx X. Xxxxxxxxxx
Name: Xxxxxxx X.Xxxxxxxxxx
Title: Chairman, President
and Chief Executive Officer
___________________________________
Name: Xxxxxxx X. Xxxxx
Title: Senior Vice President
