TERMINATION AGREEMENT
BY AND AMONG
FEDERAL DEPOSIT INSURANCE CORPORATION,
AS MANAGER OF THE FSLIC RESOLUTION FUND,
GUARANTY FEDERAL BANK, F.S.B.
DALLAS, TEXAS,
GUARANTY HOLDINGS INC. I,
AND
TEMPLE-INLAND INC.
DATED AS OF OCTOBER 31, 1995
TABLE OF CONTENTS
page
RECITALS 1
AGREEMENT 2
ARTICLE 1 CLOSING 2
ARTICLE 2 TERMINATION AMOUNT AND CERTAIN OTHER MATTERS . . . . . . 3
Section 2.1 Payment of Termination Amount . . . . . . . . . . . . . . 3
Section 2.2 GFB Tax Agreement . . . . . . . . . . . . . . . . . . . . 3
Section 2.3 Disputes . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 2.4 Termination of Assistance Agreement . . . . . . . . . . . 4
Section 2.5 Agreement Relating to Subsidiaries . . . . . . . . . . . 4
ARTICLE 3 TRANSFER OF ASSETS . . . . . . . . . . . . . . . . . . . 5
Section 3.1 Transferred Assets . . . . . . . . . . . . . . . . . . . 5
(a) Transferred Loans . . . . . . . . . . . . . . 5
(b) Mortgages . . . . . . . . . . . . . . . . . . 5
(c) Environmental Indemnitees . . . . . . . . . . 6
(d) Transferred REO . . . . . . . . . . . . . . . 6
(e) Furniture, Fixtures, and Equipment . . . . . . 6
(f) Assigned Contracts . . . . . . . . . . . . . . 7
(g) Transferred Subsidiaries . . . . . . . . . . . 7
(h) Books and Records . . . . . . . . . . . . . . 7
(i) Software . . . . . . . . . . . . . . . . . . . 8
(j) Intellectual Property . . . . . . . . . . . . 8
(k) Licenses . . . . . . . . . . . . . . . . . . . 8
(l) Receivables . . . . . . . . . . . . . . . . . 9
(m) Other Covered Assets . . . . . . . . . . . . . 9
Section 3.2 Assumed Liabilities . . . . . . . . . . . . . . . . . . . 11
Section 3.3 Guaranty's Cooperation with Respect to
Transfer of Transferred Assets . . . . . . . . . . 11
Section 3.4 Transferred Claims . . . . . . . . . . . . . . . . . 14
Section 3.5 Transfer of Litigation . . . . . . . . . . . . . . . . . 15
Section 3.6 Certain Assets to be Retained . . . . . . . . . . . . . . 16
Section 3.7 Town and Country Related Assets . . . . . . . . . . . . . 17
Section 3.8 As Is, Where Is . . . . . . . . . . . . . . . . . . . . . 19
Section 3.9 Filing and Recording . . . . . . . . . . . . . . . . . . 20
Section 3.10 Privilege . . . . . . . . . . . . . . . . . . . . . 21
ARTICLE 4 POST-CLOSING ADJUSTMENTS . . . . . . . . . . . . . . . . 21
Section 4.1 Final SRA Report . . . . . . . . . . . . . . . . . . . . 21
Section 4.2 Post-Closing Expenses and Receipts . . . . . . . . . . . 27
ARTICLE 5 POST-CLOSING AUDIT . . . . . . . . . . . . . . . . . . . 30
Section 5.1 Generally . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 5.2 Post-Closing Audit Payment . . . . . . . . . . . . . . . 31
Section 5.3 Post-Closing Audit Procedures . . . . . . . . . . . . . . 31
ARTICLE 6 DISPUTE RESOLUTION . . . . . . . . . . . . . . . . . . . 33
Section 6.1 Dispute Resolution Procedures . . . . . . . . . . . . . . 33
Section 6.2 Arbitration of Disputed Items . . . . . . . . . . . . . . 34
Section 6.3 Fees and Expenses of Arbiters . . . . . . . . . . . . . . 37
Section 6.4 Other Remedies . . . . . . . . . . . . . . . . . . . . . 38
ARTICLE 7 CONDITIONS PRECEDENT TO CLOSING . . . . . . . . . . . . . 38
Section 7.1 Conditions to Obligations of the
FDIC Manager . . . . . . . . . . . . . . . . . . . 38
(a) Certified Resolutions . . . . . . . . . . . . 38
(b) Incumbency Certificate . . . . . . . . . . . . 39
(c) Legal Opinions . . . . . . . . . . . . . . . . 39
(d) Proceedings . . . . . . . . . . . . . . . . . 39
(e) Consents and Approvals . . . . . . . . . . 40
(f) Accuracy of Representations and
Warranties; Performance . . . . . . . . . . . . . . . . . 40
(g) Financial Condition . . . . . . . . . . . . . 40
(h) Certificates . . . . . . . . . . . . . . . . . 41
Section 7.2 Conditions to Obligations of Guaranty
and the Acquirers . . . . . . . . . . . . . . . . 41
(a) Accuracy of Representations and
Warranties; Performance . . . . . . . . . . . . . . . . . 41
(b) Delivery of Certain Documents . . . . . . . . 41
(c) Legal Opinion . . . . . . . . . . . . . . . . 42
(d) Proceedings . . . . . . . . . . . . . . . . . 42
Section 7.3 Conditions to Obligations of the
FDIC Manager and of Guaranty and the
Acquirers . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
(a) Closing Date . . . . . . . . . . . . . . . . . 42
(b) No Litigation . . . . . . . . . . . . . . . . 42
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(c) Consents and Approvals . . . . . . . . . . . . 43
(d) No Change in Law . . . . . . . . . . . . . . . 43
ARTICLE 8 REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . 44
Section 8.1 Representations and Warranties of
Guaranty . . . . . . . . . . . . . . . . . . . . . 44
(a) Corporate Existence . . . . . . . . . . . . . 45
(b) Due Authorization . . . . . . . . . . . . . . 45
(c) Binding Agreement . . . . . . . . . . . . . . 45
(d) Compliance with Law . . . . . . . . . . . . . 45
(e) Compliance with Obligations . . . . . . . . . 46
(f) Approvals and Consents . . . . . . . . . . . . 46
(g) Litigation . . . . . . . . . . . . . . . . . . 46
(h) Financial Statements . . . . . . . . . . . . . 48
(i) Title and Related Matters . . . . . . . . . . 48
(j) Permits and Licenses . . . . . . . . . . . . . 50
(k) No Other Arrangements . . . . . . . . . . . . 51
(l) No Leases, etc. . . . . . . . . . . . . . . . 51
(m) No Violations of Law . . . . . . . . . . . . . 51
(n) Environmental Matters . . . . . . . . . . . . 51
(o) Capital Compliance . . . . . . . . . . . . . . 53
(p) Accuracy of Information . . . . . . . . . . . 53
(q) Covered Assets . . . . . . . . . . . . . . . . 53
Section 8.2 Representations and Warranties of the
Acquirers . . . . . . . . . . . . . . . . . . . . . 53
(a) Corporate Existence . . . . . . . . . . . . . 54
(b) Due Authorization . . . . . . . . . . . . . . 54
(c) Binding Agreement . . . . . . . . . . . . . . 54
(d) Compliance with Law . . . . . . . . . . . . . 55
(e) Compliance with Obligations . . . . . . . . . 55
(f) Approvals and Consents . . . . . . . . . . . . 55
(g) Litigation . . . . . . . . . . . . . . . . . 55
(h) Accuracy of Information . . . . . . . . . . . 56
Section 8.3 Representations and Warranties of the FDIC
Manager . . . . . . . . . . . . . . . . . . . . . . 56
(a) Power and Authorization . . . . . . . . . . . 56
(b) Binding Agreement . . . . . . . . . . . . . . 57
ARTICLE 9 COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . 57
Section 9.1 Guaranty Cooperation Regarding Transferred
Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Section 9.2 Further Assurances . . . . . . . . . . . . . . . . . . . 58
Section 9.3 Costs and Expenses . . . . . . . . . . . . . . . . . . . 59
Section 9.4 FDIC's OIG Matters . . . . . . . . . . . . . . . . . . . 59
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(a) Maintenance of Records . . . . . . . . . . . . 59
(b) OIG Access to Books and Records . . . . . . . 61
(c) OIG Audits and Examinations . . . . . . . . . 61
(d) Reimbursement of Guaranty's
Expenses . . . . . . . . . . . . . . . . . . 62
(e) Other Rights . . . . . . . . . . . . . . . . . 62
ARTICLE 10 RELEASE . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
Section 10.1 Release by the FDIC Manager . . . . . . . . . . . . 62
Section 10.2 Release by Guaranty and the Acquirers . . . . . . . 64
Section 10.3 Accord and Satisfaction . . . . . . . . . . . . . . 66
Section 10.4 Rights to Enforce . . . . . . . . . . . . . . . . . 66
ARTICLE 11 INDEMNIFICATIONS . . . . . . . . . . . . . . . . . . . . . . . 66
Section 11.1 Indemnification by the FDIC Manager . . . . . . . . 66
Section 11.2 Indemnification by Guaranty . . . . . . . . . . . . 71
Section 11.3 Indemnification by Temple-Inland . . . . . . . . . 73
ARTICLE 12 MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . 75
Section 12.1 Amendments . . . . . . . . . . . . . . . . . . . . 75
Section 12.2 Notices . . . . . . . . . . . . . . . . . . . . . . 75
Section 12.3 Waiver . . . . . . . . . . . . . . . . . . . . . . 77
Section 12.4 Governing Law . . . . . . . . . . . . . . . . . . . 77
Section 12.5 Severability . . . . . . . . . . . . . . . . . . . 78
Section 12.6 Successors and Assigns . . . . . . . . . . . . . . 78
Section 12.7 Headings; Article and Section References . . . . 79
Section 12.8 Exhibits . . . . . . . . . . . . . . . . . . . . . 79
Section 12.9 Entire Agreement . . . . . . . . . . . . . . . . . 79
Section 12.10 Third-Party Beneficiaries . . . . . . . . . . . . . . 79
Section 12.11 Execution in Counterparts . . . . . . . . . . . . . . 80
Section 12.12 Computation of Time . . . . . . . . . . . . . . . . . 80
Section 12.13 Continuing Cooperation . . . . . . . . . . . . . . . . 80
EXHIBITS
2.2 GFB Tax Agreement
2.3(a) Resolved Disputes
2.3(b) Outstanding Disputes
2.5 Subsidiaries Agreement
3.1(a) Transferred Loans
3.1(b) Mortgages and Other Collateral
3.1(d) Transferred REO
3.1(e) Personal Property
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3.1(f) Certain Agreements Related to Transferred REO
(Assigned Contracts)
3.1(g) Transferred Subsidiaries
3.1(j) Intellectual Property
3.1(k) Licenses
3.1(m) Certain Covered Assets Not Retained by Guaranty
3.1(n) Forms of Deeds and Assignments of Leases and
Landlord Consents and Related Assignments
(Transfer Documents)
3.1(o) Form of Xxxx of Sale
3.1(p) Form of Endorsement (Transferred Loans)
3.1(q) Form of Record (Mortgage Assignment)
3.4 Transferred Claims
3.5(a) Transferred Cases
3.6 Retained Assets
3.7-1 Town and Country Escrow Agreement
3.7-2 Town and Country Environmental Indemnity Agreement
3.7-3 Town and Country Release and Indemnity Agreement
3.7-4 Town and Country ESA
4.1 Exceptions and Disputes Regarding Final SRA Report
7.1(c)(i) Form of Legal Opinion for Guaranty
7.1(c)(ii) Form of Legal Opinion for the Acquirers
7.1(f) Form of Certificate of Representations and
Warranties and Performance of Guaranty and
the Acquirers
7.1(h) Form of Certificate for FDIC Manager of
Confirmation of Exemption from Taxes
7.2(c) Form of Legal Opinion for the FDIC
8.1(g) Exceptions to Litigation Matters
8.1(i) Exceptions to Title and Related Matter
8.1(j) Exceptions to Permits and Licenses
8.1(k) Exceptions to Agreements Regarding Sale of
Transferred Assets
8.1(l) Exceptions to Arrangements Affecting Transferred REO
8.1(m) Exceptions to No Violations of Law
8.1(n) Exceptions to Environmental Matters
9.4(a) Certain Retention Periods
12.2 FDIC List of Additional Addresses
ADDENDUM TO EXHIBITS
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TERMINATION AGREEMENT
This TERMINATION AGREEMENT (this "Agreement"), dated as of
October 31, 1995, is entered into by and among the Federal Deposit Insurance
Corporation (the "FDIC") as Manager of the FSLIC Resolution Fund (the "FRF")
(the FDIC as Manager of the FRF is herein called the "FDIC Manager"), Guaranty
Federal Bank, F.S.B., Dallas, Texas ("Guaranty"), Guaranty Holdings Inc. I
("Guaranty Holdings I"), a savings and loan holding company incorporated under
the laws of the State of Delaware of which Guaranty is a wholly-owned
subsidiary, and Temple-Inland Inc. ("Temple-Inland"), a corporation
incorporated under the laws of the State of Delaware (Guaranty Holdings I and
Temple-Inland collectively, the "Acquirers").
RECITALS
The FRF is the transferee of the assets and liabilities of the Federal
Savings and Loan Insurance Corporation (the "FSLIC"). The FDIC Manager,
Guaranty, and the Acquirers desire to provide for (i) the early termination of
that certain Assistance Agreement dated September 30, 1988 by and among the
FSLIC, Guaranty, the Acquirers, Guaranty Holdings Inc. II, formerly a savings
and loan holding company incorporated under the laws of the State of Nevada,
which subsequently was liquidated into Guaranty Holdings I, Xxxxx Best Company
("Xxxxx Best"), a Texas limited partnership, and Xxxxxxxx Xxxx Ventures #3,
Ltd. ("Xxxxxxxx Xxxx"), a Texas limited partnership (Temple-Inland
subsequently became the successor-in-interest to Xxxxx Best and Xxxxxxxx Xxxx)
(the "Assistance Agreement"), (ii) the settlement of certain disputes under
the Assistance Agreement, (iii) the execution of the GFB Tax Agreement (as
defined in and provided pursuant to Sections 2.1 and 2.2 hereof), and (iv)
certain other matters.
Capitalized terms not otherwise defined herein shall have the meanings
given such terms in the Assistance Agreement.
AGREEMENT
In consideration of the mutual promises and covenants contained herein,
and of other good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, and, notwithstanding anything to the contrary
under the terms of the Assistance Agreement or any related agreement, the
parties hereby agree as follows:
ARTICLE 1
CLOSING
The consummation of the transactions contemplated by this Agreement,
subject to the satisfaction or waiver of the conditions precedent set forth in
Article 7 hereof, shall take place effective as of October 31, 1995 (the
"Closing Date"), at a closing (the "Closing") to be held at the offices of
Xxxxx XxXxxxxxx & Oaks Xxxxxxxx in Dallas, Texas at 10:00 a.m. Central
Standard Time on October 31, 1995, or such earlier or later date, or in such
other place or manner, as the parties hereto may agree in writing. All
deliveries of documents under this Agreement, other than any certificates or
other documents required to be presented pursuant to Article 7 hereof, shall
be made in Dallas, Texas at the office of Guaranty where such items are
located.
ARTICLE 2
TERMINATION AMOUNT AND CERTAIN OTHER MATTERS
Subject to the satisfaction or waiver in writing of the conditions
precedent set forth in Article 7 hereof:
Section 2.1 Payment of Termination Amount. The FDIC Manager shall pay
or cause to be paid to Guaranty, within three (3) business days following the
Closing Date, by wire transfer in immediately available funds, $79,963,803
(the "Termination Amount"), which is an amount equal to (i) the Book Value of
each Transferred Asset (as defined in Section 3.1 hereof) as of August 31,
1995, minus (ii) an amount equal to the Tax Benefits Amount as defined in the
GFB Tax Agreement attached hereto as Exhibit 2.2 (the "GFB Tax Agreement"). A
certificate executed by the parties contemporaneously with the execution of
this Agreement contains the dollar amount for each component of the
Termination Amount.
Section 2.2 GFB Tax Agreement. On the Closing Date, Guaranty and the
FDIC Manager will execute and deliver, each to the other, the GFB Tax
Agreement.
Section 2.3 Disputes.
(a) The parties hereby agree that Exhibit 2.3(a) attached hereto sets
forth issues that have previously been disputed but as to which the parties
now agree that all payments due between them have been encompassed in the
Termination Amount.
(b) The parties hereby agree that Exhibit 2.3(b) attached hereto
contains a description of the disputes that remain unresolved as of the
Closing Date (the "Outstanding Disputes") among the parties hereto.
Section 2.4 Termination of Assistance Agreement. The parties hereto
agree that, except as otherwise provided for herein, upon the occurrence of
the Closing, the Assistance Agreement (including any and all provisions
therein which explicitly survive the termination or expiration of the
Assistance Agreement) and all rights and obligations of the parties thereto
not previously fulfilled shall terminate effective as of the Closing Date.
Section 2.5 Agreement Relating to Subsidiaries. The parties hereto
agree that the Agreement Relating to Liquidation and Dissolution of
Subsidiaries dated December 20, 1994 (the "Subsidiaries Agreement"), by and
among the FDIC Manager, Guaranty, and the Acquirers, attached hereto as
Exhibit 2.5, shall survive the Closing Date.
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ARTICLE 3
TRANSFER OF ASSETS
Section 3.1 Transferred Assets. At the Closing, Guaranty shall
transfer, assign, and convey to the FDIC Manager, without recourse,
representation or warranty, express or implied (except as set forth in this
Agreement or in the documents (the "Transfer Documents") executed by Guaranty
as of the date thereof effecting such transfer, assignment, and conveyance)
and to the fullest extent permitted by law or applicable contract provision,
all of Guaranty's right, title, and interest in and to the following assets,
properties, and rights (the "Transferred Assets"), all of which Transferred
Assets are either (i) Covered Assets under the Assistance Agreement or (ii)
assets, the purchase price or other cost of which has been reimbursed (or
credited) to Guaranty as an allowable expense under the Assistance Agreement:
(a) Transferred Loans. The mortgage and non-mortgage
loans (including participation interests) listed on Exhibit 3.1(a)
attached hereto (the "Transferred Loans");
(b) Mortgages. All mortgages, deeds of trust, and
other collateral interests securing the Transferred Loans (collectively,
the "Mortgages"), including but not limited to all assignments of leases
and rents, all assignments of office, hotel, parking and other
management agreements, all assignments of contracts for construction and
architectural work, and all security interests in owned and leased
personal property of any of the borrowers under the Transferred Loans,
including but not limited to the Mortgages and other collateral listed
on Exhibit 3.1(b) attached hereto;
(c) Environmental Indemnities. All transferable environmental
and other indemnities given to or held by Guaranty in connection with
any of the Transferred Loans, together with all transferable puts,
options, and rights of Guaranty to either sell loans or portions thereof
to third parties, or acquire any real or personal property securing any
of the Transferred Loans;
(d) Transferred REO. The real property listed on
Exhibit 3.1(d) attached hereto (the "Transferred REO"), together with
(i) the improvements and fixtures located on the Transferred REO, (ii)
the personal property used exclusively and associated with the operation
of the Transferred REO, (iii) all appurtenances, rights, easements,
rights-of-way, tenements, and hereditaments incident to the ownership
and operation of the Transferred REO, and (iv) any environmental and
other indemnity rights under insurance policies, or rights of
contribution against other persons given to or held by Guaranty in
connection with any of the Transferred REO;
(e) Furniture, Fixtures, and Equipment. All
machinery, equipment, vehicles, furniture, tools, spare parts, supplies,
materials, and other similar personal property owned or leased by
Guaranty located at the site of the Transferred Assets and pertaining to
the Transferred REO, including, without limitation, the items described
in Exhibit 3.1(e) attached hereto;
(f) Assigned Contracts. All transferable agreements
related to the operation, ownership, sale, leasing, maintenance or
development of the Transferred REO (which are described in Exhibit
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3.1(f) attached hereto), including, without limitation, (i) lease
agreements entered into with third party tenants, (ii) agreements for
the purchase or sale of goods, materials, supplies, tenant lists, media
services, machinery, capital assets or services, (iii) joint venture or
partnership agreements with any person, (iv) insurance policies, and (v)
any other agreements related to the operation, ownership, sale, leasing,
maintenance or development of the Transferred REO (collectively,
"Assigned Contracts") to the extent the cost of acquiring such Assigned
Contracts has been reimbursed (or credited) to Guaranty as an allowable
expense under the Assistance Agreement;
(g) Transferred Subsidiaries. Original stock
certificates (if available) relating to those subsidiaries transferred
to the FDIC Manager listed on Exhibit 3.1(g) attached hereto (the
"Transferred Subsidiaries"), which shall be the only subsidiaries
transferred to the FDIC Manager;
(h) Books and Records. Originals or, when such originals are not
in Guaranty's possession, copies of all Books and Records (as defined in
Section 9.4(a)(iv) hereof) relating exclusively to the Transferred REO
and the Transferred Loans reasonably deemed necessary by the FDIC
Manager and to the extent any such Books and Records vest any transfer
rights and interests with Guaranty, then such transfer rights and
interests shall be assigned to the FDIC Manager;
(i) Software. All transferable computer systems,
software and related documentation used exclusively in the operation of
the Transferred REO and the servicing of the Transferred Loans;
(j) Intellectual Property. All United States
trademarks, service marks, trademark and service xxxx applications,
trade names, trade rights, whether or not registered, and assignable
licenses and permits (collectively, "Intellectual Property"), in each
case used exclusively in the operation of the Transferred REO,
including, without limitation, those listed on Exhibit 3.1(j) attached
hereto, but not including those listed on Exhibit 3.1(j) attached hereto
which are specifically referenced therein as excluded from the
Intellectual Property;
(k) Licenses. All transferable permits, certificates of
occupancy, licenses, approvals, and authorizations issued to Guaranty or
any of its subsidiaries by Federal, state or local governments or
governmental authorities which are necessary or appropriate to comply
with applicable laws and regulations relating to any of the Transferred
Assets, including, without limitation, those items listed on Exhibit
3.1(k) attached hereto (collectively, "Licenses");
(l) Receivables. All loans or other receivables
charged off the books and records of the Acquired Associations prior to
the Effective Date where Guaranty is legally entitled to receive payment
for its account, including, but not limited to, payments that would
otherwise have been credited to the FDIC Manager under Section 3(b)(1)
of the Assistance Agreement; and
(m) Other Covered Assets. All other Covered Assets not retained
pursuant to Section 3.6 hereof, including those items listed on Exhibit
3.1(m) attached hereto, and including deficiencies, judgments, charge-
offs and any other assets representing potential recoveries relating to
a Covered Asset.
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The transfer, assignment, and conveyance of the foregoing assets to be
conveyed shall be effected by means of the Transfer Documents. The Transfer
Documents shall consist of the following: (i) deeds and assignments of
leases, in recordable form, with respect to the Transferred REO, and landlord
consents, to the extent obtained, and assignments related thereto, all
substantially in the form of Exhibit 3.1(n) attached hereto; (ii) a duly
executed xxxx of sale, substantially in the form of Exhibit 3.1(o) attached
hereto; (iii) with respect to the Transferred Loans, the original note (if
available), or, when such original is not in Guaranty's possession, a copy of
the original note (if available), endorsed by Guaranty without recourse in the
form of Exhibit 3.1(p) attached hereto; (iv) with respect to the Mortgages,
the original Mortgage, or, when such original is not in Guaranty's possession,
a copy of the original Mortgage (if available), as recorded with evidence of
recording indicated therein and an original Mortgage assignment, without
recourse, in recordable form to the FDIC Manager in substantially the form of
Exhibit 3.1(q) attached hereto; (v) instruments of assignment and licenses
with respect to Intellectual Property and Licenses; (vi) with respect to
Assigned Contracts, assignment and assumption agreements under which all of
Guaranty's rights are transferred to the FDIC Manager, together with the
originals of such Assigned Contracts, or, when such originals are not in
Guaranty's possession, copies of such Assigned Contracts (if available); and
(vii) with respect to the Transferred Subsidiaries, the original stock
certificates (if available); provided, however, that in the event Guaranty
does not deliver originals or copies of any of the Transfer Documents as
specified in this paragraph which were in existence (and received by Guaranty)
on or created subsequent to September 30, 1988, Guaranty shall pay all fees
and expenses incurred by the FDIC Manager as a result of Guaranty's failure to
provide such documentation and shall indemnify and hold harmless the FDIC
Indemnitees (as defined in Section 11.2(a) hereof) from all claims as a result
of Guaranty's failure to provide such documentation, including but not limited
to claims against the FDIC Manager challenging the FDIC Manager's ownership or
status in connection with any Transferred Assets where Guaranty has not
delivered to the FDIC Manager Transfer Documents which were in existence (and
received by Guaranty) on or created subsequent to September 30, 1988.
The FDIC Manager and Guaranty acknowledge and agree that effective as of
the Closing Date, such Transferred Assets will cease to be Covered Assets
under the Assistance Agreement and will be owned by the FDIC Manager free and
clear of any right, claim, equity, or other adverse interest of Guaranty.
Section 3.2 Assumed Liabilities. The FDIC Manager assumes liability
for all costs, expenses, demands, and claims of any kind or nature relating to
the ownership, maintenance, or operation of the Transferred Assets accruing
from and after the Closing Date.
Section 3.3 Guaranty's Cooperation with Respect to Transfer of
Transferred Assets.
(a) On and after the Closing Date, (i) Guaranty will execute and
deliver all instruments as are reasonably necessary to complete the
assignments or transfers of its right, title and interest in the Transferred
Assets, in a form reasonably satisfactory to the FDIC Manager and Guaranty;
provided, however, that such instruments shall not include any terms
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inconsistent with this Agreement or the Transfer Documents or impose or
purport to impose on the FDIC Manager, Guaranty or any of its affiliates any
liability or other obligation not expressly set forth in this Agreement or the
Transfer Documents; and (ii) Guaranty will transfer and deliver to the FDIC
Manager all Books and Records relating exclusively to the Transferred Assets,
and deemed reasonably necessary by the FDIC Manager to effectively take
ownership and control of the Transferred Assets within fifteen (15) business
days after receipt by Guaranty of a written request from the FDIC manager
specifying the documents to be transferred and delivered. Nothing contained
herein shall obligate the FDIC Manager to acquire any Transferred Asset that
is not a Covered Asset under the Assistance Agreement. Guaranty's obligations
under this Section 3.3(a) shall terminate on September 30, 1998.
(b) Guaranty shall timely file all information returns (including but
not limited to forms required to be filed pursuant to the Internal Revenue
Code of 1986, as amended (the "Code"), such as Section 6049 (Form 1099-INT and
1099-OID), Section 6050H (Form 1098), Section 6050J (Form 1099-A), Section
6041 (Form 1099-MISC), Section 6050P (Form 1099-C), Section 6047 (Form 1099-
R), Section 6045 (Form 1099-S and Form 1099-B), Section 6042 (Form 1099-DIV)
and Section 6044 (Form 1099-PATR)) required to be filed related to taxable
year 1994 with respect to the Transferred Assets and taxable year 1995 with
respect to the Transferred Assets but only to the extent Guaranty held the
Transferred Assets in taxable year 1995, and Guaranty is responsible for
reporting for events or transactions occurring during such period pursuant to
the relevant provisions of the Code.
(c) Notwithstanding anything to the contrary contained herein, Guaranty
shall retain such work papers and tax records as may be reasonably necessary
or appropriate for Guaranty's or an Acquirer's continued use and access in
connection with any subsidiaries which are or have been encompassed within the
consolidated federal income tax return of an Acquirer at any time from and
after September 30, 1988 through and including the Closing Date. Guaranty
shall maintain such work papers and records in accordance with Section 9.4(a)
hereof.
(d) The FDIC Manager shall cause any documents or records delivered to
it by Guaranty to be made reasonably available to Guaranty from and after such
delivery through September 30, 1998, or so long thereafter as any issues
remain unresolved as between Guaranty and the FDIC Manager under and pursuant
to this Agreement. Upon request by Guaranty to review any such documents
during such period, the FDIC Manager shall cause the custodian thereof to make
the documents available to Guaranty or its agents for inspection and/or
copying within a reasonable time following any such request. Guaranty shall
reimburse the FDIC Manager for the amount of all costs and expenses reasonably
incurred by the FDIC Manager in connection with the retrieval, copying, and/or
production of any part of such documents at Guaranty's direction or at the
direction of any agent or attorney thereof on or after the completion of the
Post Closing Audit.
Section 3.4 Transferred Claims. On the Closing Date, Guaranty shall
transfer, assign, and convey to the FDIC Manager, without recourse,
representation or warranty, express or implied (except as set forth in this
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Agreement or the Transfer Documents) and to the fullest extent permitted by
law or applicable contract provision, all of Guaranty's right, title, and
interest in and to any Acquired Association Claim or Related Claim with
respect to the Transferred Assets, including but not limited to those Acquired
Association Claims and Related Claims being identified in Exhibit 3.4 attached
hereto (the "Transferred Claims"). On and after the Closing Date, (a)
Guaranty will execute and deliver all instruments reasonably necessary to
complete the assignments or transfers of its right, title and interest in the
Transferred Claims in a form reasonably satisfactory to the FDIC Manager and
Guaranty; provided, however, that such instruments shall not include any terms
inconsistent with this Agreement or the Transfer Documents or impose or
purport to impose on the FDIC Manager, Guaranty or any of its affiliates any
liability or other obligation not expressly set forth in this Agreement or the
Transfer Documents, and (b) Guaranty will deliver to the FDIC Manager all
Books and Records relating exclusively to the Transferred Claims within ten
(10) business days after receipt by Guaranty of a written request from the
FDIC Manager specifying the documents to be transferred and delivered, and
deemed reasonably necessary by the FDIC Manager to effectively prosecute such
Transferred Claims.
Section 3.5 Transfer of Litigation.
(a) Effective upon the Closing Date, the FDIC Manager shall assume the
responsibility for managing and conducting all proceedings relating to the
litigation cases (the "Transferred Cases") listed on Exhibit 3.5(a) attached
hereto. Immediately following the Closing, Guaranty will advise its outside
counsel in writing of the FDIC's assumption of the responsibility for managing
the Transferred Cases and direct its outside counsel to prepare those
documents reasonably necessary to substitute the FDIC Manager for Guaranty or
any affiliate of Guaranty to the extent requested to do so in particular cases
by the FDIC Manager and designate new counsel of record for the Transferred
Cases. The FDIC Manager shall provide Guaranty with a copy of any pleadings
and correspondence directly related to such Transferred Cases which the FDIC
Manager receives in connection with such cases and direct its counsel to
consult with Guaranty regarding the progress of the Transferred Cases and the
likelihood of success with respect thereto.
(b) Effective upon the Closing Date, the FDIC Manager shall pay all
legal fees and expenses (including expenses related to the preparation of
documents reasonably necessary to substitute counsel as provided in Section
3.5(a) hereof) incurred in connection with the Transferred Cases on or after
the Closing Date and shall indemnify and hold harmless the Guaranty
Indemnitees (as defined in Section 11.1(a) hereof) from all claims for such
legal fees and expenses.
Section 3.6 Certain Assets to be Retained.
(a) The FDIC Manager and Guaranty acknowledge and agree that there are
certain Covered Assets which will be retained by Guaranty following the
Closing (the "Retained Assets") which are described in Exhibit 3.6 attached
hereto, and that effective as of the Closing Date, except for indemnification
for Claims for Environmental Liabilities as described in Section 7(a)(3) of
the Assistance Agreement, such Retained Assets will cease to be Covered Assets
under the Assistance Agreement and will be owned by Guaranty free and clear of
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any right, claim, equity, or other adverse interest of the FDIC Manager;
provided, however, that for purposes of making calculations with respect to
such Retained Assets in the Final SRA Report (as defined in Section 4.1(b)
hereof), the retention by Guaranty of the Retained Assets shall be treated as
a Liquidation of Covered Assets under the Assistance Agreement, as of the
Closing Date.
(b) If the Book Value as of the Closing Date of a Retained Asset is
less than the Book Value of the Retained Asset as of August 31, 1995, then an
amount equal to the difference between the Book Value as of the Closing Date
of the Retained Asset and the Book Value as of August 31, 1995 of the Retained
Asset shall be credited to Special Reserve Account I for purposes of the Final
SRA Report Payment (as defined in Section 4.1(c) hereof). If the Book Value
as of the Closing Date of a Retained Asset is greater than the Book Value of
the Retained Asset as of August 31, 1995, then an amount equal to the
difference between the Book Value as of the Closing Date of the Retained Asset
and the Book Value as of August 31, 1995 of the Retained Asset shall be
debited to Special Reserve Account I for purposes of the Final SRA Report
Payment. In no event will adjustments duplicate items that would already be a
part of such Final SRA Report Payment. For example (and not by way of
limitation), any reduction in the Book Value resulting from a principal
reduction and considered in the calculation of capital loss pursuant to
Section 4.1(b)(ii) hereof may not otherwise be credited to Special Reserve
Account I pursuant to this Section 3.6.
Section 3.7 Town and Country Related Assets.
(a) With the approval of the FDIC Manager and in accordance with
relevant provisions of the Assistance Agreement and the Specific Request for
Approval relating to the sale of Town and Country Village Shopping Center
("Town and Country"), Guaranty has entered into that certain Escrow Agreement
dated as of September 13, 1995 (the "Town and Country Escrow Agreement"), with
Texas Commerce Bank National Association and W.B. Holding Corp., attached
hereto as Exhibit 3.7-1, Environmental Indemnity Agreement dated as of
September 13, 1995, with W.B. Holding Corp., attached hereto as Exhibit 3.7-2,
and Release and Indemnity Agreement dated as of September 13, 1995, with Town
and Country Partnership, attached hereto as Exhibit 3.7-3 (collectively, the
"Town and Country Agreements"). In addition, Guaranty is a named third-party
beneficiary pursuant to a certain Environmental Services Agreement dated as of
September 13, 1995 (the "Town and Country ESA") entered into by Xxxxxxxx &
Xxxxxx, Inc. and W.B. Holding Corp., attached hereto as Exhibit 3.7-4. In
connection with the Town and Country Agreements, Guaranty may receive certain
funds in the future. Notwithstanding anything to the contrary contained
herein, Guaranty shall retain rights under or pursuant to the Town and Country
Agreements including the right to receive any funds under or pursuant to the
Town and Country Escrow Agreement from and after the date of this Agreement;
provided, however, that within thirty (30) days after receipt thereof by
Guaranty, Guaranty shall account to the FDIC Manager for the funds received
and shall deliver all of such funds to the FDIC Manager less the sum of (i)
any and all reasonable costs and expenses of recovering such funds pursuant to
the Town and Country Agreements (including reasonable attorneys fees and
expenses) or incurred in connection with the Town and Country ESA and (ii)
after deduction of the costs and expenses referred to above from the gross
amount received, the amount of twenty-five percent (25%) of the net amount
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distributable which amount will be retained by Guaranty as compensation for
Guaranty's recovery of such funds. Nothing contained herein shall be deemed
to affect in any way (i) Guaranty's right with regard to indemnification as
contained in Section 11.1 hereof (specifically including Section 11.1(f)
hereof) related to Town and Country or the matters referred to in the Town and
Country Agreements, or (ii) Guaranty's rights and obligations related to the
monitoring and collection of amounts due under and pursuant to the Town and
Country Agreements. The parties hereto acknowledge and agree that the
provisions of Section 11.1 hereof (including specifically Section 11.1(f)
hereof) are intended to apply to, among other things, any Claims against
Guaranty in connection with Town and Country and the matters referred to in,
and which are the subject of, the Town and Country Agreements as set forth in
this Section 3.7.
(b) In connection with the delivery to the FDIC Manager of the funds
described in Section 3.7(a) hereof, Guaranty shall cause to be made semi-
annual reports to the FDIC Manager regarding the status of the return of such
funds until such funds are delivered to the FDIC Manager.
Section 3.8 As Is, Where Is. The FDIC Manager hereby acknowledges and
agrees that the FDIC Manager is purchasing the Transferred Assets on an "As
Is", "Where Is," and "With all Faults" basis without representations,
warranties and covenants, express or implied of any kind or nature (other than
the representations and warranties set forth in Section 8.1 hereof or the
Transfer Documents). The FDIC Manager further acknowledges and agrees that
Guaranty has acquired the Transferred Assets through transfer by the former
FSLIC, as receiver for various closed savings and loan associations, or after
the date of such receivership, and, therefore, has owned the Transferred
Assets only since the date of transfer and is not in a position to make any
specific representations or warranties, express or implied, as to the
Transferred Assets before that date (other than the representations and
warranties set forth in Section 8.1 hereof or the Transfer Documents);
provided, however, that nothing contained in this Section 3.8 shall limit the
warranties set forth in the instruments to be delivered from Guaranty to the
FDIC Manager at Closing pursuant to Section 3.1 hereof. Guaranty has not
warranted, and does not hereby warrant, that the Transferred Assets now or
hereafter will meet or comply with the requirements of any health, safety, or
environmental statute, code or regulation of the United States, State of Texas
(or other state where such asset is located), the cities or counties where the
Transferred Assets are located, or any other authority or jurisdiction.
Notwithstanding anything to the contrary contained herein, this Section 3.8
shall survive the Closing. This Section 3.8 is not intended to and shall not
release Guaranty for any liability to the FDIC Manager as a result of a breach
of the representations contained in Sections 8.1(i) through (n) hereof.
Section 3.9 Filing and Recording. The FDIC Manager shall (a) determine
which of the instruments transferring or assigning Transferred Assets shall be
recorded or filed, (b) transmit the instrument for recording and (c) pay all
costs and expenses incurred in connection therewith, including, but not
limited to, transfer fees, transfer taxes, mortgage fees, recording fees, and
filing fees.
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Section 3.10 Privilege. The FDIC Manager acknowledges that Guaranty
has the right to assert that attorney work product, attorney client
communication and other documents in Guaranty's possession are privileged,
thus not subject to production upon request of third parties. This privilege
may be waived or otherwise compromised as a result of the transfer of
Transferred Assets, Transferred Claims, and Transferred Cases to the FDIC
Manager. The FDIC Manager agrees that the waiver or compromise of the
privilege as a result of this transaction does not, in any way, affect the
release and/or indemnification rights or obligations pursuant to this
Agreement.
ARTICLE 4
POST-CLOSING ADJUSTMENTS
Section 4.1 Final SRA Report.
(a) The parties hereto acknowledge and agree that the Transferred
Assets will be transferred, assigned, and conveyed to the FDIC Manager in
accordance with Article 3 hereof at the Book Value of each Transferred Asset
as of August 31, 1995, and
that, except for the FDIC Manager's purchase payment for such Transferred
Assets at Book Value (which payment is encompassed in the Termination Amount),
such transfer, assignment and conveyance shall be deemed a "purchase" and a
Liquidation of Covered Assets as provided for in Section 19(a) of the
Assistance Agreement for purposes of calculation of any payments in the Final
SRA Report (as defined in Section 4.1(b) hereof). If the Book Value as of the
Closing Date of a Transferred Asset is less than the Book Value of the
Transferred Asset as of August 31, 1995, then an amount equal to the
difference between the Book Value as of the Closing Date of the Transferred
Asset and the Book Value as of August 31, 1995 of the Transferred Asset shall
be credited to Special Reserve Account I for purposes of the Final SRA Report
Payment (as defined in Section 4.1(c) hereof). If the Book Value as of the
Closing Date of a Transferred Asset is greater than the Book Value of the
Transferred Asset as of August 31, 1995, then an amount equal to the
difference between the Book Value as of the Closing Date of the Transferred
Asset and the Book Value as of August 31, 1995 of the Transferred Asset shall
be debited to Special Reserve Account I for purposes of the Final SRA Report
Payment. In no event will adjustments duplicate items that would already be a
part of such Final SRA Report Payment.
(b) Guaranty shall deliver to the FDIC Manager a report with respect to
the period commencing on July 1, 1995, and ending on the Closing Date (the
"Final SRA Report") no later than ninety (90) days after the Closing Date.
The Final SRA Report shall contain (i) the items required to be included in a
Quarterly Report under Section 16 of the Assistance Agreement and be in the
format (with supporting documentation) in accordance with the policies and
procedures of the FDIC Manager with respect to previous Quarterly Reports,
with all calculations of the Guaranteed Yield Amount based on the Book Values
of the Retained Assets and Transferred Assets accrued through and including
the Closing Date, (ii) the capital loss on the Retained Assets, which shall be
based upon the difference between the "bid price" (as set forth in a letter
from Guaranty to the FDIC Manager dated July 6, 1995, and amended in a
memorandum from Guaranty to the FDIC Manager dated October 13, 1995) and the
Book Values of the Retained Assets as of August 31, 1995, and which "bid
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price" and Book Values will be reduced dollar for dollar for principal
reductions on the Retained Assets from and after August 31, 1995 through and
including the Closing Date, but not below a purchase price of zero dollars on
any particular Retained Asset, (iii) the "shared gains" on the Retained Assets
and the Transferred Assets, as specified in the last sentence of this Section
4.1(b), (iv) the adjustments to the Book Values of the Retained Assets and the
Transferred Assets that are made in accordance with Section 3.6(b) or 4.1(a)
hereof; and (v) all payments or other proceeds received, and all costs or
expenses paid, by Guaranty after the Closing Date but prior to the filing of
the Final SRA Report relating to the Transferred Assets, Retained Assets,
Transferred Claims or Transferred Cases for periods on or prior to the Closing
Date; provided, however, that the Final SRA Report shall not duplicate any
debits or credits previously submitted in any SRA report unless such debit or
credit (A) was subsequently approved by the FDIC Manager, (B) had been denied
by the FDIC Manager because of a budget variance or lack of supporting
documentation and it is being resubmitted with additional supporting
documentation and is identified as such by Guaranty, or (C) is related to a
matter set forth in Exhibit 2.3(b) attached hereto. The Final SRA Report may
include items related to the FDIC's OIG (as defined in Section 5.1 hereof)
audit for the period April 1, 1994, through and including the Closing Date.
For purposes of this Section 4.1(b) and Section 4.1(b) of that certain
Termination Agreement dated as of October 31, 1995 by and among the FDIC
Manager, Guaranty, and the Acquirers in connection with that certain
Assistance Agreement dated August 18, 1988 by and among the former FSLIC,
American Federal Bank, F.S.B., and LSST Financial Services Corporation (the
"AFB Assistance Agreement"), and in lieu of calculation of amounts pursuant to
Sections 3(a)(1), 3(b)(2), and 3(b)(3) of the Assistance Agreement, the
"shared gains" shall be equal to $9,000,000. Guaranty shall be permitted to
debit the Special Reserve Account in the Final SRA Report in the amount of
$9,000,000, in full satisfaction of the FDIC Manager's obligations to pay
"shared gains" on the Retained Assets and the Transferred Assets under the
Assistance Agreement and those assets constituting Retained Assets and
Transferred Assets under the AFB Assistance Agreement.
(c) If the Final SRA Report indicates a net SRA credit, then no later
than sixty (60) days after submission of the Final SRA Report, Guaranty shall
pay the amount of such balance by a check if under $25,000, or by wire
transfer in immediately available funds if $25,000 or greater, payable to the
FDIC Manager. If the Final SRA Report indicates a net SRA debit, then no
later than sixty (60) days after submission of the Final SRA Report, the FDIC
Manager shall pay or cause to be paid to Guaranty, by wire transfer in
immediately available funds, an amount equal to (i) the amount of such net SRA
debit, less (ii) any Final SRA Report Disputed Items (as defined below) not
previously taken into account by withholding payment therefor. The payment
made by Guaranty, or, as the case may be, by the FDIC Manager pursuant to this
Section 4.1(c) shall be referred to herein as the "Final SRA Report Payment."
For purposes of this Section 4.1, "Final SRA Report Disputed Items" shall mean
(A) the full amount of each exception or dispute which is specifically
referenced on Exhibit 2.3(b) attached hereto, and (B) the full amount of each
other exception or dispute noted by the FDIC Manager with respect to the Final
SRA Report.
(d) Within sixty (60) days after submission of the Final SRA Report,
the FDIC Manager shall deliver to Guaranty the Final SRA Report Disputed Items
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Schedule (as defined below). If the FDIC Manager has not delivered the Final
SRA Report Disputed Items Schedule to Guaranty within such sixty (60)-day
period, then the FDIC Manager shall be deemed for all purposes hereunder to
have waived all rights hereunder (other than rights under Section 4.2 hereof)
to challenge the Final SRA Report or the Final SRA Report Payment. The "Final
SRA Report Disputed Items Schedule" shall include a reasonably detailed
description of each of the Final SRA Report Disputed Items, together with such
other information and supporting documentation as may reasonably be required
in order for Guaranty to evaluate the position taken by the FDIC Manager with
respect to each of the Final SRA Report Disputed Items.
(e) If there are any Final SRA Report Disputed Items, then the FDIC
Manager and Guaranty shall attempt to resolve such items within thirty (30)
days after Guaranty's receipt of the Final SRA Report Disputed Items Schedule
(the date on which such thirty (30)-day period expires, or on which any
extension of such period as the parties hereto may mutually agree to in
writing expires, herein called the "Final SRA Report Resolution Deadline
Date"). If the FDIC Manager and Guaranty resolve all such Final SRA Report
Disputed Items to their mutual satisfaction by the Final SRA Report Resolution
Deadline Date, then within ten (10) days following such resolution, the FDIC
Manager shall pay to Guaranty, by wire transfer in immediately available
funds, such amount, if any, as may be due to Guaranty pursuant to such
resolution (the "Final SRA Report Disputed Items Payment"), together with
interest at the rate equal to the thirteen (13)-week Treasury Xxxx rate, as
most recently published in The Wall Street Journal (the "Interest Rate") on
such Final SRA Report Disputed Items Payment from the date which is thirty
(30) days after receipt of the Final SRA Report to the date the Final SRA
Report Disputed Items Payment is made.
(f) If the FDIC Manager and Guaranty fail to resolve any outstanding
Final SRA Report Disputed Items by the Final SRA Report Resolution Deadline
Date, then either party may submit specific unresolved Final SRA Report
Disputed Items to arbitration pursuant to Article 6 hereof.
Section 4.2 Post-Closing Expenses and Receipts.
(a) If Guaranty receives any bills for any cost or expense incurred
relating to the Transferred Assets, Retained Assets, any Covered Assets which
are sold or otherwise liquidated by Guaranty prior to the Closing Date,
Transferred Claims or the Transferred Cases for periods on or prior to the
Closing Date, which would have been a reimbursable item under the Assistance
Agreement had it not been terminated but was not included as a reimbursable
item in either the Final SRA Report or in any previous Quarterly Report filed
pursuant to the Assistance Agreement, then such bills, costs, or expenses
shall be paid by Guaranty. Guaranty shall submit monthly statements to the
FDIC Manager within fifteen (15) days after the end of each previous month
regarding such payments (except that with respect to any monthly statements
that Guaranty is required to submit to the FDIC Manager under this Section
4.2(a) that have been submitted by Guaranty prior to the filing of the Final
SRA Report, Guaranty shall submit such statements as part of the Final SRA
Report), and the FDIC Manager shall, within thirty (30) days following receipt
of each monthly statement (in a format, with supporting documentation,
acceptable to the FDIC Manager), reimburse Guaranty for the amount of such
payment; provided, however, that Guaranty has not otherwise been reimbursed
and such expenses have not been paid pursuant to Section 4.1 hereof.
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Notwithstanding the foregoing, all bills for such costs and expenses must be
submitted on or prior to one hundred eighty (180) days after the Closing Date,
and Guaranty shall not be entitled to reimbursement for any bills submitted
after such date.
(b) If the FDIC Manager receives any bills or otherwise incurs any
cost or expense with respect to the Transferred Assets for periods on or prior
to the Closing Date (and such cost or expense, or amount reflected in such
xxxx, would not have been reimbursable or creditable to Guaranty pursuant to
the Assistance Agreement), such bills shall be forwarded to Guaranty for
payment at the address provided in Section 12.2 hereof. All such bills shall
be resolved by Guaranty within thirty (30) days after receipt. The bills and
costs and expenses incurred described in Section 4.2(a) hereof and this
Section 4.2(b) are collectively, the "Post Closing Expense Items".
(c) If Guaranty and the FDIC Manager cannot agree upon who is
responsible for any Post Closing Expense Items within thirty (30) days after
an invoice is received, then either party may submit any such Post Closing
Expense Items to arbitration pursuant to the provisions of Article 6 hereof.
(d) Guaranty shall notify all appropriate parties in writing as of the
Closing Date that the FDIC Manager has assumed responsibility for all costs
and expenses relating to the Transferred Assets, Transferred Claims or
Transferred Cases to the extent described in this Section 4.2. Such
notification shall be prepared by Guaranty and shall be in form and substance
reasonably satisfactory to the FDIC Manager and its counsel.
(e) (i) For a period of one hundred twenty (120) days following the
Closing Date, Guaranty shall act as the collecting agent on behalf of the FDIC
Manager on the terms provided in this Section 4.2(e)(i). If, during such one
hundred twenty (120)-day period, Guaranty receives any payment or other
proceeds related to any Transferred Asset, Transferred Claim or Transferred
Case after the Closing Date, it shall (A) deliver to the FDIC Manager, c/o
Federal Deposit Insurance Corporation, Division of Depositor and Asset
Services, 0000 Xxxxxxxx Xxxxx, Xxxxx 0000-X, Xxxxxx, Xxxxx 00000, Attn:
Conversions Specialist, a report with respect to all such payments or other
proceeds applied by Guaranty on each Transferred Asset, Transferred Claim or
Transferred Case on a weekly basis, and each such report shall be certified as
true, complete, and accurate by the Chief Financial Officer of Guaranty, and
(B) pay to the FDIC Manager, on the fifth business day following the last day
of each month during the 120-day period following the Closing Date, an amount
equal to all payments and other proceeds received and applied by Guaranty with
respect to the Transferred Assets, Transferred Claims or Transferred Cases
during such month.
(ii) If, following the 120-day period referred to in Section
4.2(e)(ii) hereof, Guaranty receives any payment or other proceeds with
respect to any Transferred Asset, Transferred Claim or Transferred Case after
the Closing Date, it shall pay such amount over to the FDIC Manager within
thirty (30) days after receipt of such payment or proceeds.
(f) If the FDIC Manager receives any payment or other proceeds with
respect to the Retained Assets, it shall pay such amount over to Guaranty
within thirty (30) days after receipt.
(g) The payments or other proceeds described in Section 4.2(e) or
4.2(f) hereof are collectively, the "Post-Closing Receipt Items". If Guaranty
and the FDIC Manager cannot agree upon who is entitled to any Post-Closing
Receipt Items within thirty (30) days after such payment or other proceeds is
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received, then either party may submit any such Post-Closing Receipt Items to
arbitration pursuant to the provisions of Article 6 hereof.
ARTICLE 5
POST-CLOSING AUDIT
Section 5.1 Generally. The FDIC Manager will use its best efforts to
ensure that within one (1) year following the Closing Date, the Office of the
Inspector General (the "OIG") shall commence an audit (the "Post-Closing
Audit") of (i) all amounts credited or debited to the Special Reserve Accounts
from April 1, 1994, through and including the Closing Date, including the
Final SRA Report, and (ii) all payments by the FDIC Manager or its predecessor
to Guaranty pursuant to the Assistance Agreement and this Agreement from April
1, 1994, through and including the Closing Date. The Post-Closing Audit may
result in a Post-Closing Audit Payment (as defined in Section 5.2 hereof) in
accordance with Sections 5.2 and 5.3 hereof.
Section 5.2 Post-Closing Audit Payment. For purposes of this
Agreement, "Post-Closing Audit Payment" shall mean the amount, if any, which
shall be paid by either the FDIC Manager to Guaranty, or by Guaranty to the
FDIC Manager, resulting from the Post-Closing Audit and determined in
accordance with the following calculations: (i) the FDIC Manager shall pay to
Guaranty the amount, if any, by which (A) any net adjustment in Guaranty's
favor determined pursuant to this Article 5, exceeds (B) any net adjustment in
the FDIC Manager's favor determined pursuant to this Article 5, together with
interest on such excess at the Interest Rate from and including the Closing
Date to but excluding the date of such payment; or (ii) Guaranty shall pay to
the FDIC Manager the amount, if any, by which (A) any net adjustment in the
FDIC Manager's favor determined pursuant to this Article 5, exceeds (B) any
net adjustment in Guaranty's favor determined pursuant to this Article 5,
together with interest on such excess at the Interest Rate from and including
the Closing Date to but excluding the date of such payment.
Section 5.3 Post-Closing Audit Procedures. The parties hereto agree
that the Post-Closing Audit, and any adjustments as a result thereof, shall be
conducted and determined in accordance with the following procedures:
(a) Until completion of the Post-Closing Audit, Guaranty shall cause to
be made available to the FDIC Manager or its designee, all Books and Records
relating to any and all matters within the scope of the Post-Closing Audit, at
such reasonable times as Guaranty and the FDIC Manager shall agree and at the
offices of Guaranty where such Books and Records are located.
(b) Within sixty (60) days after the FDIC Manager
delivers a copy of the final audit report (the "Final Audit Report") resulting
from the Post-Closing Audit to Guaranty, Guaranty shall provide to the FDIC
Manager a written description of any items in such report with which Guaranty
disagrees (the "Guaranty Disputed Items"). If Guaranty fails to provide a
written description of any particular Guaranty Disputed Item within such sixty
(60)-day period, Guaranty forever waives its right to dispute such item
arising from the Post-Closing Audit. If there are no Guaranty Disputed Items,
then within thirty (30) days following the sixtieth (60th) day after delivery
by the FDIC Manager of the Final Audit Report resulting from the Post-Closing
Audit to Guaranty, the Post-Closing Audit Payment shall be made.
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(c) If there are any Guaranty Disputed Items, then the
FDIC Manager and Guaranty shall attempt to resolve such items within thirty
(30) days following the receipt by the FDIC Manager of the written description
of the Guaranty Disputed Items (the date on which such thirty (30)-day period
expires, or any extension of such period as the parties hereto may mutually
agree to in writing, herein called the "Post-Closing Audit Resolution Deadline
Date"). If the FDIC Manager and Guaranty resolve all such items to their
mutual satisfaction by the Post-Closing Audit Resolution Deadline Date, then
within thirty (30) days following such resolution, the Post-Closing Audit
Payment shall be made.
(d) If the FDIC Manager and Guaranty fail to resolve any outstanding
Guaranty Disputed Items by the Post-Closing Audit Resolution Deadline Date,
then Guaranty may notify the FDIC Manager of Guaranty's intent to submit
specific items of unresolved Guaranty Disputed Items to arbitration pursuant
to the provisions of Article 6 hereof. Failure to notify the FDIC Manager of
Guaranty's intent to submit any unresolved Guaranty Disputed Item to
arbitration (together with Guaranty's determination of the appropriate amount
of such Guaranty Disputed Item) within ten (10) business days following the
Post-Closing Audit Resolution Deadline Date shall be deemed an acceptance of
such non-submitted Guaranty Disputed Item by Guaranty, as well as a waiver of
Guaranty's right to dispute such non-submitted Guaranty Disputed Item(s).
ARTICLE 6
DISPUTE RESOLUTION
Section 6.1 Dispute Resolution Procedures. In the
event that any dispute arises between or among any of the parties hereto
relating to any Final SRA Report Disputed Items, Post-Closing Expense Items,
Post-Closing Receipt Items, Guaranty Disputed Items, items that are
reimbursable pursuant to the Assistance Agreement or any disputes regarding an
obligation to indemnify pursuant to Article 11 hereof (collectively, a
"Dispute Item"), then the FDIC Manager and Guaranty shall attempt to resolve
each Dispute Item within thirty (30) days following the receipt by the other
party of written notice of the Dispute Item (the date on which such thirty
(30) day-period expires, or on which any extension of such period as the
parties hereto may mutually agree to in writing expires, herein called the
"Dispute Resolution Deadline Date"). If the FDIC Manager and Guaranty resolve
any such Dispute Item to their mutual satisfaction by the Dispute Resolution
Deadline Date, then within ten (10) days following such resolution, the
agreement reached by the parties thereto shall be documented and each party
shall comply with the agreement.
Section 6.2 Arbitration of Dispute Items.
(a) If the FDIC Manager and Guaranty fail to resolve any outstanding
Dispute Items by the Dispute Resolution Deadline Date, then either party may
submit each specific unresolved Dispute Item to arbitration pursuant to the
provisions of this Section 6.2(a). Failure to submit any unresolved Dispute
Item to arbitration within thirty (30) days following the Dispute Resolution
Deadline Date shall be deemed a waiver of both parties' right to dispute such
non-submitted Dispute Item. The parties intend that to the maximum extent
possible, but otherwise consistent with the provisions of this Agreement,
arbitration shall be the sole dispute resolution process regarding any Dispute
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Item that is not resolved by the Dispute Resolution Deadline Date for such
Dispute Item. Either party shall submit a matter for arbitration by
delivering a notice to the other party in writing setting forth:
(i) A description of each Dispute Item submitted for
arbitration;
(ii) A statement of the moving party's position with
respect to each Dispute Item submitted for arbitration;
(iii) The value sought by the movant, or other relief
requested regarding each Dispute Item submitted for arbitration; and
(iv) The name and address of the arbiter selected by the moving
party (the "Movant Arbiter").
(b) The non-moving party shall, within fifteen (15) days following
receipt of a notice pursuant to Section 6.2(a) hereof, deliver a notice to the
moving party setting forth:
(i) The name and address of the arbiter selected by
the non-moving party (the "Respondent Arbiter");
(ii) A statement of the position of the respondent with respect
to each Dispute Item; and
(iii) The value sought by the respondent or other relief, if any,
the respondent deems is due the movant with respect to each Dispute
Item.
(c) The Movant Arbiter and Respondent Arbiter shall select a third
arbiter from a list furnished by the American Arbitration Association (the
"AAA"). In accordance with the rules of the AAA, the three arbiters shall
constitute the arbitration panel for resolution of each Dispute Item. The
concurrence of any two arbiters shall be deemed to be the decision of the
arbiters for all purposes hereunder. The arbitration shall proceed on such
time schedule and in accordance with the Rules of Commercial Arbitration of
the AAA then in effect, as modified by this Section 6.2, and judgment upon the
award rendered by the arbiters may be entered by any court having jurisdiction
thereof. The arbitration proceedings shall take place at such location as the
parties thereto may mutually agree.
(d) The FDIC Manager and Guaranty shall facilitate the resolution of
each outstanding Dispute Item by making available in a prompt and timely
manner to one another and to the arbiters for examination and copying, as
appropriate, all documents, books, and records under their respective control
that are reasonably relevant to the issues involved and that would be
discoverable under the Federal Rules of Civil Procedure.
(e) The arbiters designated pursuant to Sections 6.2(a), 6.2(b), and
6.2(c) hereof shall select, with respect to each Dispute Item submitted to
arbitration pursuant to this Section 6.2, either (i) the position and relief
submitted by Guaranty with respect to each Dispute Item, or (ii) the position
and relief submitted by the FDIC Manager with respect to each Dispute Item, in
either case as set forth in its respective notice pursuant to Section 6.2(a)
or 6.2(b) hereof. The arbiters shall have no authority to select a value for
each Dispute Item other than the determination set forth in clauses (i) and
(ii) of this Section 6.2(e). Subject to the provisions of the Administrative
Dispute Resolution Act of 1990 (the "ADR Act"), the written decision of the
arbiters designated pursuant hereto shall be final and binding on the parties
thereto, except in the case of fraud, and shall be delivered to the parties
thereto by the arbiters within fifteen (15) days after conclusion of the
arbitration hearing. Any payment due or action to be taken pursuant to the
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decision made by the arbiters shall be paid or made within thirty (30) days
after receipt of the written decision of the arbiters pursuant to this Section
6.2.
(f) To the extent that the ADR Act (or any subsequent legislation
applicable to or affecting this Agreement) allows the FDIC Manager to vacate
or otherwise affect any decision or award of the arbiters hereunder, or
otherwise gives the FDIC Manager or any person or entity having responsibility
or control over the FDIC Manager to modify the procedures contained herein or
affect the finality of any award made pursuant hereto, Guaranty shall have the
same rights, subject to the requirements commensurate with those applicable to
the FDIC Manager in connection with any such vacation, modification or other
action affecting an arbitral award. Any amounts payable pursuant to an award
made pursuant to this Section 6.2 shall bear interest at the Interest Rate
from and after the date specified in Section 6.2(e) hereof, without regard to
any extension of the finality of such award, until the date paid.
Section 6.3 Fees and Expenses of Arbiters. The aggregate fees and
expenses of the arbiters shall be allocated by the arbiters among each Dispute
Item against the party who is not the prevailing party with respect to a
particular Dispute Item, in connection with the payment provided for in
Section 6.2(e) hereof.
Section 6.4 Other Remedies. Except with respect to a Dispute Item that
(a) must be resolved or (b) the parties agree in writing to resolve pursuant
to the arbitration procedures contained in Section 6.2 hereof and is not
vacated, (i) each party shall have such other remedies as may be available
through mediation, arbitration, or in a court of law or equity, provided,
however, that each party shall attempt to resolve each such issue within
thirty (30) days following the receipt by the other party of written notice of
the issue; and (ii) in any proceeding brought to enforce any provision of this
Agreement or to resolve any disputes arising hereunder or in connection
herewith, the prevailing party shall be entitled to all costs of such action
(including but not limited to attorneys' fees and expenses).
ARTICLE 7
CONDITIONS PRECEDENT TO CLOSING
Section 7.1 Conditions to Obligations of the FDIC Manager. The
obligations of the FDIC Manager under this Agreement shall be subject to the
waiver in writing or fulfillment, on or prior to the Closing, of each of the
following conditions precedent:
(a) Certified Resolutions. The FDIC Manager shall have received
certificates from each of Guaranty and the Acquirers, signed by its corporate
secretary or assistant corporate secretary and dated as of the Closing,
certifying that: (i) its board of directors has duly adopted resolutions,
copies of which shall be attached to such certificate, (A) approving the terms
of this Agreement and authorizing the consummation of the transactions
contemplated by this Agreement, and (B) authorizing an officer of the company
to execute and deliver this Agreement and all necessary ancillary documents;
(ii) all of such resolutions are in full force and effect; and (iii) none of
such resolutions has been amended or modified.
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(b) Incumbency Certificate. The FDIC Manager shall have received
certificates from each of Guaranty and the Acquirers, signed by its corporate
secretary or assistant corporate secretary and dated as of the Closing,
certifying as to each person executing this Agreement on behalf of such party,
that (i) such person is an officer of such party holding the office or offices
specified therein, and (ii) the signature of each such person set forth on
such certificate is his or her genuine signature.
(c) Legal Opinions. The FDIC Manager shall have received from each of
Guaranty and the Acquirers signed opinions addressed to the FDIC Manager dated
as of the Closing and substantially in the form of Exhibits 7.1(c)(i) and (ii)
attached hereto, with such changes as the FDIC Manager, or its counsel may
approve.
(d) Proceedings. All corporate and other proceedings taken in
connection with the transactions contemplated by this Agreement, and all
documents incident thereto, shall be satisfactory in form and substance to the
FDIC Manager and its counsel and their consent thereto shall not be
unreasonably withheld, and the FDIC Manager shall have received such
counterpart originals or certified or other copies of such documents as it may
reasonably request.
(e) Consents and Approvals. The FDIC Manager shall have received
reasonably satisfactory evidence that any and all governmental approvals or
other third-party consents have been given which may be required in connection
with the execution, delivery, and performance of this Agreement by Guaranty
and the Acquirers.
(f) Accuracy of Representations and Warranties; Performance. The
representations and warranties of each of Guaranty and the Acquirers contained
in this Agreement shall be true and correct in all material respects on and as
of the Closing with the same effect as if made on and as of the Closing, and
Guaranty and the Acquirers shall have performed or complied with all material
covenants, agreements, and conditions herein that they are required to perform
or comply with on or prior to the Closing. The FDIC Manager shall have
received a certificate from each of Guaranty and the Acquirers executed by an
executive officer thereof dated as of the Closing, certifying to the foregoing
in the form of Exhibit 7.1(f) attached hereto.
(g) Financial Condition. There shall have occurred no material adverse
change in the financial condition of Guaranty after giving effect to the
transactions contemplated by this Agreement.
(h) Certificates. The FDIC Manager shall have received (i) an executed
certificate from Guaranty or counsel to Guaranty with respect to the non-
applicability to the matters contemplated in this Agreement of the Texas
Limited Sales, Excise and Use Tax (Chapter 151 of the Texas Tax Code) subject
to the execution and delivery by the FDIC Manager of a certificate in the form
of Exhibit 7.1(h) attached hereto, and (ii) an executed Certificate of Non-
Foreign Status from Guaranty with respect to Section 1445 of the Code.
Section 7.2 Conditions to Obligations of Guaranty and the Acquirers.
The obligations of Guaranty and the Acquirers under this Agreement shall be
subject to the waiver in writing or fulfillment, on or prior to the Closing,
of each of the following conditions precedent:
(a) Accuracy of Representations and Warranties; Performance. The
representations and warranties of the FDIC Manager contained in this Agreement
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shall be true and correct in all material respects on and as of the Closing
with the same effect as if made on and as of the Closing, and the FDIC Manager
shall have performed or complied with all material covenants, agreements, and
conditions herein that it is required to perform or comply with on or prior to
the Closing.
(b) Delivery of Certain Documents. The FDIC Manager shall deliver to
Guaranty and the Acquirers copies of a Resolution of the FDIC's Board of
Directors, and subsequent delegations of authority, demonstrating the
authority of the FDIC Manager to enter into the transactions contemplated by
this Agreement.
(c) Legal Opinion. Guaranty and the Acquirers shall have received from
the FDIC a signed opinion addressed to each of Guaranty and the Acquirers from
the Senior Counsel (Resolutions) to the FDIC dated as of the Closing and
substantially in the form of Exhibit 7.2(c) attached hereto.
(d) Proceedings. All proceedings taken in connection with the
transactions contemplated by this Agreement, and all documents incident
thereto, shall be reasonably satisfactory in form and substance to Guaranty
and the Acquirers and their respective counsel and their consent thereto shall
not be unreasonably withheld, and Guaranty and the Acquirers shall have
received such counterpart originals or certified or other copies of such
documents as they may reasonably request.
Section 7.3 Conditions to Obligations of the FDIC Manager and Guaranty
and the Acquirers. The obligations of the FDIC Manager and Guaranty and the
Acquirers under this Agreement shall be subject to the waiver in writing or
fulfillment, on or prior to the Closing, of each of the following conditions
precedent:
(a) Closing. The occurrence of the Closing on or prior to October 31,
1995, or such later date as mutually agreed to by the parties hereto.
(b) No Litigation. No litigation, claim, investigation, or other
proceeding shall be pending or threatened by or before any court, tribunal,
agency, regulatory authority, arbitration panel, or otherwise, which
challenges this Agreement or any of the transactions contemplated hereby,
seeks an injunction against or the payment of damages in respect of the
consummation of or compliance with any of the terms hereof, questions the
legal authority of any of the parties to this Agreement with respect to the
transactions contemplated herein, or which otherwise, in the opinion of
Guaranty, of any Acquirer, or of the FDIC Manager, makes consummation of the
transactions contemplated herein inadvisable.
(c) Consents and Approvals. No governmental approvals or other third
party consents that may be required to consummate the transaction contemplated
herein or to comply with the terms of this Agreement shall impose, or be
subject to or conditioned upon, the compliance by Guaranty or any Acquirer
with any material obligation or condition other than those explicitly set
forth in this Agreement, or otherwise contain any terms or provisions which,
in the opinion of Guaranty or any Acquirer, are unduly burdensome or
impractical, or which, in the opinion of Guaranty, or any Acquirer, or the
FDIC Manager, would adversely affect the benefits to such party anticipated
from this Agreement.
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(d) No Change in Law. Between the date hereof and the Closing, there
shall not have occurred any material change in applicable law, regulation, or
interpretation of any law or regulation (collectively, a "Change in Law"), nor
shall there be pending any material proposed or prospective Change in Law,
including without limitation any Change in Law, which may, or if adopted or
implemented which may, in the opinion of Guaranty or any Acquirer, materially
alter the anticipated legal effect of this Agreement or any related agreement,
or alter, diminish, or impair the anticipated economic benefits of this
Agreement or any related agreement to Guaranty or any Acquirer, or impose any
material duties, obligations, or other burdens or costs on Guaranty or any
Acquirer related to this Agreement or any related agreement or the
transactions set forth herein other than those contemplated hereby or thereby
on the date Guaranty and the Acquirers execute this Agreement.
ARTICLE 8
REPRESENTATIONS AND WARRANTIES
Section 8.1 Representations and Warranties of Guaranty. To induce the
FDIC Manager to enter into this Agreement and to consummate the transactions
contemplated hereby, Guaranty makes the following representations and
warranties to the FDIC Manager as of the date hereof. The FDIC Manager's
causes of action for a breach of the following representations and warranties
shall survive the Closing; provided, however, that, except for the
representations and warranties set forth in Section 8.1(n) hereof, any such
cause of action for a breach of any of the representations and warranties set
forth in Sections 8.1(g)(ii) through (q) hereof shall survive the Closing up
to September 30, 1998, and shall thereupon terminate.
(a) Corporate Existence. Guaranty is a Federally chartered stock
savings bank duly organized, validly existing, and in good standing under the
laws of the United States of America, with all requisite power and authority
to (i) own and operate its properties and conduct its business as currently
conducted by it, and (ii) engage in the activities and transactions described
in and contemplated by this Agreement.
(b) Due Authorization. Guaranty has full power and authority to
execute, deliver, and perform this Agreement, and has taken all necessary
action to authorize the execution, delivery, and performance of this Agreement
in accordance with its terms.
(c) Binding Agreement. This Agreement has been duly authorized,
executed, and delivered by Guaranty and, when duly authorized, executed, and
delivered by the FDIC Manager, this Agreement shall constitute a legal, valid,
and binding obligation of Guaranty, enforceable against it in accordance with
its terms except as such enforceability may be limited by (i) bankruptcy,
insolvency, reorganization or other similar laws affecting the enforcement of
creditors' rights generally, and (ii) general equitable principles (regardless
of whether the issue of enforceability is considered in a proceeding in equity
or at law).
(d) Compliance with Law. The execution, delivery, and
performance by Guaranty of this Agreement will not violate or conflict with
any provision of any applicable law or regulation, or any order, writ,
judgment, or decree of any court or governmental authority to which it is
otherwise subject to an extent which would be materially adverse to the
interests of any party hereunder.
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(e) Compliance with Obligations. The execution, delivery, and
performance of this Agreement does not and will not (i) be a violation or
breach of, or a default under, Guaranty's bylaws or charter, or (ii) result in
a violation or breach of, or a default under, any material contract, lease, or
other instrument to which it is a party (or which is binding on it or its
assets), which violation, breach, or default, either individually or in the
aggregate with all such other violations, breaches, and defaults, is material
to the financial condition of Guaranty or its ability to observe or perform
the terms of this Agreement.
(f) Approvals and Consents. All governmental approvals (including any
such approvals from the Office of Thrift Supervision) and other third party
consents that are required in connection with the execution, delivery, or
performance of this Agreement or the transactions contemplated by this
Agreement on the part of Guaranty, if any, have been obtained.
(g) Litigation.
(i) Except as set forth in Exhibit 8.1(g) attached hereto, there
is no legal action, suit, governmental investigation or proceeding pending (in
which Guaranty is a party) or, to Guaranty's actual knowledge, threatened
against or affecting Guaranty (whether or not Guaranty is a party) or any of
its subsidiaries or their assets which questions the validity of this
Agreement, or any of the transactions contemplated hereby, or which would be
reasonably expected, either individually or in the aggregate with all such
other actions, suits, investigations or proceedings, to materially and
adversely affect the financial condition of Guaranty, or its subsidiaries or
Guaranty's ability to perform, satisfy, or observe any obligation or condition
under this Agreement.
(ii) To Guaranty's actual knowledge, except as set
forth in Exhibit 8.1(g) attached hereto, there is no pending action,
suit, governmental investigation or proceeding which could have a
material adverse effect on the value of any of the Transferred Assets,
and Guaranty has no actual knowledge that any such action may result in
any such effect and that is probable of assertion.
(iii) To Guaranty's actual knowledge, except as set
forth in Exhibit 8.1(g) attached hereto, no claim asserted to date in
any of the Transferred Cases involves an allegation of fraud or willful
misconduct on the part of Guaranty, its directors, officers, employees,
agents, or affiliated parties; provided, however, that this
representation does not apply to (A) allegations relating to any act or
failure to act by Guaranty taken in accordance with the written
concurrence or direction of the FDIC Manager or its predecessors in
interest, or (B) allegations that are without substantial basis in fact.
(h) Financial Statements. Guaranty has supplied the RTC or the FDIC
Manager with true and complete copies of its (i) audited consolidated
statements of financial condition and consolidated statements of income,
changes to shareholders' equity and statements of cash flow for the years
ended December 31, 1990, December 31, 1991, December 31, 1992 and December 31,
1993, and related notes thereto, together with the related opinion of an
independent certified public accounting firm that such financial statements
fairly present the consolidated financial position of Guaranty as of the
respective dates thereof, and (ii) consolidated results of operations and
changes in cash flow of Guaranty for the periods ended on December 31, 1990,
December 31, 1991, December 31, 1992 and December 31, 1993, which have been
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prepared in accordance with generally accepted accounting principles
consistently applied throughout the periods, except as indicated therein or in
the notes thereto.
(i) Title and Related Matters. Except as set forth in Exhibit 8.1(i)
attached hereto, and except with respect to any defects, encumbrances and/or
exceptions to the title received by Guaranty on the Effective Date or which
have been created in connection with the ownership and/or operation of an
asset and approved by the FDIC Manager as in accordance with the terms of the
Assistance Agreement, or which have arisen as a result of the acquisition of a
Covered Asset by deed-in-lieu of foreclosure or foreclosure, Guaranty, to the
best of its knowledge, (i) holds good and indefeasible title to the
Transferred REO (provided, however, that it has not acquired an owner's policy
of title insurance on all Transferred REO), with all rights under applicable
state laws to maintain ownership and the use of such property as it is being
used on the date hereof, (ii) owns good title to the Mortgages which encumber
the properties, and (iii) owns good title to all of the Transferred Assets not
constituting Transferred REO or Mortgages. To its actual knowledge, Guaranty
has not taken any actions in violation of the terms of the Assistance
Agreement (nor failed to take any actions) with respect to the Transferred
Assets which has resulted or will result in any material adverse title claims,
liens, mortgages, charges, security interests, pledges, options, encumbrances
and other restrictions or limitations of any nature whatsoever affecting the
Transferred Assets, except (A) as disclosed in Exhibit 8.1(i) attached hereto,
(B) for liens for taxes not yet due and payable or which are being contested
in good faith, and (C) for easements, restrictions and encumbrances of record,
which do not, either individually or in the aggregate, materially detract from
the value, or substantially interfere with the use, of any of the Transferred
Assets; provided, however, that no representation is made with respect to any
action (or failure to act) (x) taken (or omitted) with the written concurrence
or at the written direction of the FDIC Manager or any of its predecessors in
interest, or in accordance with a written notice with respect to subsidiary
business plans delivered by Guaranty to the FDIC Manager or its predecessors
in interests with respect to which no written objection was delivered to
Guaranty, or (y) that does not constitute gross negligence, fraud, or
intentional or willful misconduct demonstrating a greater disregard of a duty
of care than gross negligence. There is no, and Guaranty has received no
notice, oral or written, of any, condemnation, expropriation, eminent domain
or similar proceeding pending or threatened against any of the Transferred
Assets, except as set forth in Exhibit 8.1(i) attached hereto, and Guaranty
has made no commitments to, and has received no notice, oral or written, from
any public authority or other entity with respect to the taking or use of any
of the Transferred Assets, whether temporarily or permanently, for easements,
rights-of-way, or other public or quasi-public purposes. Except as set forth
in Exhibit 8.1(i) attached hereto, the physical condition of the Transferred
Assets has not been materially adversely affected by any action of, or failure
to act by, Guaranty between the Effective Date and the Closing except to the
extent such actions or failures to act were explicitly directed or approved in
writing by the FDIC Manager or its predecessor in accordance with the terms of
the Assistance Agreement, normal wear and tear excepted.
(j) Permits and Licenses. Except as set forth in Exhibit 8.1(j)
attached hereto, Guaranty possesses all Licenses, all of which are freely
assignable to the FDIC Manager or its designee.
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(k) No Other Arrangements. Except as set forth in Exhibit 8.1(k)
attached hereto, and except as may be entered into between the date hereof and
the Closing in accordance with the terms of the Assistance Agreement, Guaranty
has not entered into any other agreement for the sale of any Transferred
Assets.
(l) No Leases, etc. Except as provided in Exhibit 8.1(l) attached
hereto, and except as may be entered into between the date hereof and the
Closing in accordance with the terms of the Assistance Agreement, Guaranty has
entered into no oral or written leases, licenses, permits, franchises,
concessions, or employment, collective bargaining or occupancy agreements
affecting the Transferred REO.
(m) No Violations of Law. Except as set forth in Exhibit 8.1(m)
attached hereto, Guaranty has not received any written notice, and Guaranty
has no actual knowledge, of existing violations of any requirements of law
that materially adversely affect the Transferred Assets.
(n) Environmental Matters. Except as set forth in Exhibit 8.1(n)
attached hereto, (i) Guaranty has no actual knowledge of any written studies
or reports regarding the presence of hazardous substances (as defined by the
Environmental Protection Agency pursuant to the Comprehensive Environmental
Response, Compensation, and Liability Act ("CERCLA"), as amended, 42 U.S.C.
Section 9601 et seq.) on the Transferred REO (or the property to which the
Mortgages relate), (ii) subject to incidental and non-consequential
exceptions, Guaranty has no actual knowledge of the discharge or existence on
the Transferred REO (or the property to which the Mortgages relate) of any
hazardous substances, (iii) Guaranty has not received and has no actual
knowledge of any prior owner of the Transferred REO (or the property to which
the Mortgages relate) having received any notice of any kind relating to or in
connection with the violation of any environmental statute including but not
limited to the Resource Conservation and Recovery Act ("RCRA"), as amended, 42
U.S.C. Section 6901 et seq., and CERCLA, and all regulations adopted pursuant
to RCRA and CERCLA, (iv) Guaranty has not caused any hazardous substances to
be generated, treated, transported, stored, used, installed or disposed of
(such term specifically not including continued migration of hazardous
substances) in or on the Transferred REO (or the property to which the
Mortgages relate), except for (A) such actions taken in accordance with
applicable law; (B) incidental and non-consequential exceptions; or (C) the
management of hazardous substances at or from Covered Assets in connection
with (x) testing for environmental contamination; (y) remediation of
environmental contamination; or (z) on-site or off-site treatment, storage or
disposal of environmental contamination, (v) Guaranty has to the best of its
knowledge used reasonable efforts to protect the Transferred REO against
willful or wanton misconduct or grossly negligent acts or omissions of third
parties that might have resulted in the material release of hazardous
substances on the Transferred REO and/or any adjoining property, (vi) Guaranty
has, when it has had actual knowledge of a violation, materially complied with
applicable state and federal notification, disclosure, and reporting
requirements during the period of time that it has held title to the
Transferred REO, and (vii) Guaranty has no actual knowledge of any pending or
expected administrative actions for penalties or cleanup requirements relating
to environmental issues; provided, however, that no representation under this
Section 8.1(n) is made with respect to matters existing on or prior to the
Effective Date.
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(o) Capital Compliance. After giving effect to the transactions
contemplated by this Agreement, Guaranty will be in compliance with the
minimum regulatory capital requirements of the OTS currently applicable to
Guaranty.
(p) Accuracy of Information. No representation or warranty made by
Guaranty in this Agreement contains any untrue statement of a material fact or
omits to state a material fact necessary to make the statements contained in
this Agreement not misleading under the circumstance made or at the time
furnished.
(q) Covered Assets. Each of the Transferred Assets has been properly
accounted for on the books and records of Guaranty as a Covered Asset within
the meaning of the Assistance Agreement.
Section 8.2 Representations and Warranties of the Acquirers. To induce
the FDIC Manager to enter into this Agreement and to consummate the
transactions contemplated hereby, each Acquirer, severally with respect to
itself only, makes the following representations and warranties to the FDIC
Manager as of the date hereof, each of which shall survive the consummation of
the transactions contemplated herein:
(a) Existence. Each Acquirer is duly organized, validly existing, and
in good standing under the laws of its jurisdiction of organization, with all
requisite power and authority to (i) own and operate its properties and
conduct its business as currently conducted by it, and (ii) engage in the
transactions described in and contemplated by this Agreement.
(b) Due Authorization. Each Acquirer has full power and authority to
execute, deliver, and perform this Agreement, and has taken all necessary
action to authorize the execution, delivery, and performance of this Agreement
in accordance with its terms.
(c) Binding Agreement. This Agreement has been duly authorized,
executed, and delivered by each Acquirer and, when duly authorized, executed,
and delivered by the FDIC Manager, this Agreement shall constitute a legal,
valid, and binding obligation of each Acquirer, enforceable against each
Acquirer in accordance with its terms except as such enforceability may be
limited by (i) bankruptcy, insolvency, reorganization, conservatorship,
receivership, or other similar laws affecting the enforcement of creditors'
rights generally, and (ii) general equitable principles (regardless of whether
the issue of enforceability is considered in a proceeding in equity or at
law).
(d) Compliance with Law. The execution, delivery, and performance by
each Acquirer of this Agreement will not violate or conflict with any
provision of any applicable law or regulation, or any order, writ, judgment,
or decree of any court or governmental authority to which it is otherwise
subject, in each case to an extent which would be materially adverse to the
interests of any party hereunder.
(e) Compliance with Obligations. The execution, delivery, and
performance by each Acquirer of this Agreement does not and will not (i)
violate or conflict with any provision of the organizational documents of such
Acquirer, or (ii) result in a violation, or breach of, or default under any
material contract, lease, or other instrument to which such Acquirer is a
party (or which is binding on it or any of its assets).
(f) Approvals and Consents. All governmental approvals and other third
party consents that are required in connection with the execution, delivery,
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or performance of this Agreement or the transactions contemplated by this
Agreement by each Acquirer, if any, have been obtained.
(g) Litigation. There is no legal action, suit, investigation, or
proceeding pending (in which each Acquirer is a party) or, to each Acquirer's
actual knowledge, threatened against or affecting such Acquirer (whether or
not such Acquirer is a party thereto) or any of its subsidiaries or their
assets which questions the validity of this Agreement, or any of the
transactions contemplated hereby, or which would be reasonably expected,
either individually or in the aggregate with all such other actions, suits,
investigations, or proceedings, to materially and adversely affect the
financial condition of an Acquirer or its ability to perform, satisfy, or
observe any obligation or condition under this Agreement.
(h) Accuracy of Information. No representation or warranty made by
each Acquirer in this Agreement contains any untrue statement of a material
fact or omits to state a material fact necessary to make the statements
contained in this Agreement not misleading under the circumstance made or at
the time furnished.
Section 8.3 Representations and Warranties of the FDIC Manager. To
induce Guaranty and the Acquirers to enter into this Agreement and to
consummate the transactions contemplated hereby, the FDIC Manager hereby makes
the following representations and warranties, all of which shall survive the
execution and delivery of this Agreement and the consummation of such
transactions:
(a) Power and Authorization. The execution, delivery, and performance
of this Agreement (i) are within the legal power and authority of the FDIC
Manager, and (ii) have been duly authorized by all necessary action on the
part of the FDIC Manager. The FDIC Manager is the sole successor to all
rights, duties, and obligations of the FSLIC under the Assistance Agreement.
The FDIC as receiver of the Acquired Associations is the sole successor to all
rights, duties, and obligations of the FSLIC as receiver of the Acquired
Associations under the Acquisition Agreements. The FDIC Manager has the sole
statutory authority to execute, deliver, and perform this Agreement and no
joinder of any other person or party that is an agency or instrumentality of
the federal government of the United States is necessary in order to fully
effect the transactions contemplated by this Agreement.
(b) Binding Agreement. This Agreement has been duly authorized,
executed, and delivered by the FDIC Manager, and upon the due authorization,
execution, and delivery of this Agreement by Guaranty and the Acquirers, this
Agreement shall be a legal, valid, and binding obligation of the FDIC Manager,
enforceable against it in accordance with its terms except as such
enforceability may be limited by (i) bankruptcy, insolvency, reorganization or
other similar laws affecting the enforcement of creditors' rights generally,
and (ii) general equitable principles (regardless of whether the issue of
enforceability is considered in a proceeding in equity or at law).
ARTICLE 9
COVENANTS
Section 9.1 Guaranty Cooperation Regarding Transferred Assets. At the
request of the FDIC Manager and upon reasonable written notice, Guaranty shall
make its then current employees available to testify in any litigation
- 25 -
concerning the Transferred Assets to the extent the FDIC Manager or its
counsel reasonably considers such testimony to be appropriate. The FDIC
Manager shall (a) indemnify and hold harmless Guaranty and any such employee
that testifies at the FDIC Manager's request for amounts actually incurred and
paid by Guaranty or such employee, including Costs (as defined in Section
11.1(a) hereof), and (b) pay to Guaranty or such employee any out-of-pocket
expenses incurred by Guaranty or any such employee in connection with
providing such testimony, and the FDIC Manager shall reimburse Guaranty or
such employee for such costs within thirty (30) days after receipt of an
invoice from Guaranty or such employee. Notwithstanding this Section 9.1, the
FDIC Manager shall not indemnify or hold harmless Guaranty or any such
employee for any Costs arising out of (i) any matter that represents a breach
of the representations and warranties contained in Section 8.1 or 8.2 hereof,
(ii) any action or failure to act on the part of Guaranty or any such employee
that is inconsistent with the management standard set forth in Section 17(a)
of the Assistance Agreement, or (iii) any action or failure to act on the part
of Guaranty or any such employee that constitutes gross negligence, or wanton
or willful criminal misconduct.
Section 9.2 Further Assurances. Each of the parties hereto shall
promptly and duly cause to be taken, executed, acknowledged or delivered all
such further acts, conveyances, documents and assurances as any party hereto
may from time to time reasonably request in writing in order to more
effectively carry out the intent and purposes of this Agreement and the
transactions contemplated hereby; provided, however, that (i) no request shall
include any terms inconsistent with this Agreement or the Transfer Documents
and shall not impose or purport to impose on the FDIC Manager, Guaranty, the
Acquirers or any of their affiliates any liabilities or obligations other than
those expressly set forth in this Agreement or the Transfer Documents, and
(ii) that the costs associated with the preparation, execution, or filing of
any such document shall be borne by the party requesting the same.
Section 9.3 Costs and Expenses. Except to the extent otherwise
specifically provided herein, each party hereto agrees to pay all costs and
expenses incurred by it in connection with or incidental to the preparation
and consummation of this Agreement, including any fees and disbursements of
attorneys, accountants, and investment banking consultants.
Section 9.4 FDIC's OIG Matters.
(a) Maintenance of Records. Guaranty and the Acquirers shall maintain
the Books and Records (as defined in this Section 9.4(a)) relating to the
Transferred Assets, Transferred Cases, Transferred Claims and Retained Assets
which are not delivered to the FDIC Manager under the terms and provisions of
this Agreement on the following terms and conditions:
(i) All Books and Records shall be maintained in accordance with
the guidelines set forth by the Southern Vital Records Center, Inc. and
published in its "Guide to Information Retention for Financial Institutions"
(the "Guide") in effect from time to time, including the period for retention
of such records (the "Retention Period") except for those Books and Records
relating to the Transferred Assets and the Retained Assets, which shall be
maintained for the longer of the Retention Period or September 30, 1998.
Attached hereto as Exhibit 9.4(a) are summary sheets of retention periods from
- 26 -
the Guide for "Administration," "Loans" and "Other Services" which encompass
substantially all of the services relating to the Books and Records retained
by Guaranty and which retention periods will be followed, as applicable.
(ii) Guaranty shall furnish to the FDIC Manager such files (or
documents from such files) in its possession, or copies thereof, as requested
by the FDIC in writing, within a reasonable period of time after so requested.
The FDIC Manager shall provide Guaranty a written acknowledgment of receipt of
the files or documents delivered upon such delivery.
(iii) Notwithstanding anything to the contrary contained herein,
it is understood and agreed that Guaranty will destroy all Books and Records
where the Retention Period has expired.
(iv) As used in this Agreement, the term "Books and Records"
shall mean all books, records, documents, files, blueprints, specifications,
tenant lists, certified rent rolls, legal files, litigation (both asset and
non-asset) information, bankruptcy information, credit information,
information on potential environmental liabilities, consulting reports, third
party property management contracts, participation information and subsidiary
information, correspondence documents, loan trial balances (magnetic tape and
hard copy, if available and to the extent Guaranty has system capacity to
provide such information in such format), loan histories, tax records, and
insurance policies in the possession or control of Guaranty or any of its
affiliates, subsidiaries, agents or counsel relating to any and all matters
subject to the Assistance Agreement, this Agreement, the GFB Tax Agreement,
the Subsidiaries Agreement or all such Agreements.
(b) OIG Access to Books and Records. Guaranty and the Acquirers shall
cause to be made available to the FDIC's OIG, at such reasonable times and
places as the FDIC's OIG may specify, all Books and Records.
(c) OIG Audits and Examinations. The FDIC Manager may audit or examine
Guaranty, the Acquirers or any of their respective affiliates or subsidiaries
with respect to transactions affecting the implementation of the Assistance
Agreement, this Agreement, the GFB Tax Agreement, the Subsidiaries Agreement
or all such Agreements at any reasonable time or times chosen by the FDIC's
OIG. Such audits shall be conducted by the FDIC's OIG at its own expense but,
if requested by the FDIC's OIG, with the assistance of Guaranty's or the
Acquirers' respective directors, officers and employees, whose salaries and
expenses shall be paid by Guaranty or the Acquirers without reimbursement from
the FDIC.
(d) Reimbursement of Guaranty's Expenses. The FDIC Manager shall
reimburse Guaranty for the amount of all costs and expenses reasonably
incurred by Guaranty (if any), on or after the completion of the Post-Closing
Audit, in connection with the retrieval, copying, and/or production of any
part of the Books and Records pursuant to this Agreement to the FDIC Manager
or the FDIC's OIG, or at either of their direction to any agent or attorney
thereof.
(e) Other Rights. Nothing in this Agreement shall be construed to
prevent or impair the audit and investigative authority of the FDIC's OIG
pursuant to the Inspector General Act of 1978, as amended.
ARTICLE 10
RELEASE
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Section 10.1 Release by the FDIC Manager. The FDIC Manager for the
FDIC in its capacity as Manager of the FRF, and as successor to the FSLIC,
hereby releases, indemnifies, holds harmless, acquits, and forever discharges,
effective as of the Closing, Guaranty and each of the Acquirers, and their
respective subsidiaries, officers, directors, and affiliates (and the
respective successors, assigns, employees, agents, and representatives of all
the foregoing) (collectively, the "Guaranty Released Persons") from and
against any and all actions and causes of action, suits, disputes, debts,
accounts, promises, warranties, damages, claims, proceedings, demands, and
liabilities of every kind and character, direct and indirect, known and
unknown, in law or in equity, that the FDIC Manager now has, has had at any
time heretofore, or hereafter may have against the Guaranty Released Persons
by reason of any act or omission whatsoever by any Guaranty Released Person in
connection with the negotiation, administration, execution, or performance by
any Guaranty Released Person of the Assistance Agreement or any other
agreements related thereto; provided, however, that the release provided in
this Section 10.1 (i) shall not release Guaranty or any of the Acquirers from
its obligations under this Agreement which survives the Closing; (ii) is not
intended to and shall not prevent any assertion of a claim with respect to any
breach of this Agreement or any ancillary agreements or instruments executed
and delivered by the parties or any of them in connection with the Closing or
thereafter; (iii) shall not limit the right of the FDIC Manager to bring any
claim based on fraud, willful misrepresentation of a material fact, willful
failure to disclose a material fact, or willful misconduct; and (iv) shall not
limit the rights of the FDIC Manager under this Agreement; provided, however,
that, except with respect to any claims against the Guaranty Released Persons
that the FDIC Manager may have pursuant to Section 8.1(n) hereof, any such
action shall be brought no later than September 30, 1998 and if such action is
not filed by such date, then such right to bring an action shall be deemed
waived.
Section 10.2 Release by Guaranty and the Acquirers.
(a) Guaranty and the Acquirers each hereby release, indemnify, hold
harmless, acquit, and forever discharge each of the FDIC Manager and the FRF
(and the respective successors, assigns, employees, agents, and
representatives of each of the foregoing) (collectively, the "FDIC Released
Persons") from and against any and all actions and causes of action, suits,
disputes, debts, accounts, promises, warranties, damages, claims, proceedings,
demands, and liabilities, of every kind and character, direct and indirect,
known and unknown, in law or in equity, that such Guaranty Released Persons
now have, have had at any time heretofore, or hereafter may have against the
FDIC Released Persons by reason of any act or omission whatsoever by any FDIC
Released Persons in connection with the negotiation, administration,
execution, or performance by any of the FDIC Released Persons of the
Assistance Agreement, or any other agreements related thereto; provided,
however, that the release provided in this Section 10.2(a) (i) shall not
release the FDIC Manager from its obligations under this Agreement or any
agreement or provision of any agreement which by the terms of this Agreement
survives the Closing; (ii) is not intended to and shall not prevent any
assertion of a claim with respect to any breach of this Agreement or any
ancillary agreements or instruments executed and delivered by the parties or
any of them in connection with the Closing or thereafter; (iii) shall not
- 28 -
limit the right of Guaranty to bring any claim based on fraud, willful
misrepresentation of a material fact, willful failure to disclose a material
fact, or willful misconduct; and (iv) shall not limit the rights of Guaranty
under this Agreement; provided, however, that except with respect to any
claims against the FDIC Released Persons that Guaranty may have pursuant to
Section 11.1(a)(vi) hereof, any such action shall be brought no later than
September 30, 1998 and if such action is not filed by such date, then such
right to bring an action shall be deemed waived.
(b) In addition to the release provided in Section 10.2(a) hereof,
Guaranty and the Acquirers each hereby indemnify and hold harmless each of the
FDIC Released Persons from and against any and all actions and causes of
action, suits, disputes, debts, accounts, promises, warranties, damages,
claims, proceedings, demands, and liabilities, of every kind and character,
direct and indirect, known and unknown, in law or in equity, that Xxxxx Best,
Xxxxxxxx Xxxx, and their respective subsidiaries, officers, directors, and
affiliates (and the respective successors, assigns, employees, agents, and
representatives of all the foregoing (except to the extent permitted pursuant
to Section 10.1 hereof)) now have, have had at any time heretofore, or
hereafter may have against the FDIC Released Persons by reason of any act or
omission whatsoever by any FDIC Released Persons in connection with the
negotiation, administration, execution, or performance by any of the FDIC
Released Persons of the Assistance Agreement, this Agreement, the Subsidiaries
Agreement or any other agreements related thereto.
Section 10.3 Accord and Satisfaction. Except as otherwise specifically
provided herein, including without limitation Section 10.1 hereof, performance
by each party of its respective obligations under this Agreement shall effect
a complete accord and satisfaction of any and all obligations and liabilities
of such party under the Assistance Agreement and the Acquisition Agreement(s)
and, thenceforth, such party shall be fully discharged from any obligation or
liability of any kind in connection therewith, including, without limitation,
any and all actions, causes of action, suits, debts, sums of money, bonds,
covenants, agreements, promises, damages, judgments, claims, and demands
whatsoever, known or unknown, suspected or unsuspected, at law or in equity.
Section 10.4 Rights to Enforce. Notwithstanding the foregoing
provisions of this Article 10, Guaranty, the Acquirers, and the FDIC Manager
shall retain their respective rights to enforce this Agreement.
ARTICLE 11
INDEMNIFICATIONS
Section 11.1 Indemnification by the FDIC Manager.
(a) The FDIC Manager shall indemnify and hold harmless Guaranty
(including by way of indemnification of its officers, directors, and
affiliated persons) (collectively, the "Guaranty Indemnitees") for amounts
actually incurred and paid by the Guaranty Indemnitees in connection with the
defense, prosecution, satisfaction, settlement, or compromise, including the
reasonable costs and expenses of litigation (including reasonable attorneys'
and accountants' fees, travel expenses, judgments, court costs, and related
litigation expenses, and such other actual and reasonable costs as may be
actually incurred and paid by the Guaranty Indemnitees in connection with the
- 29 -
defense, prosecution, satisfaction, settlement, or compromise) (all of such
amounts, costs, and expenses herein called "Costs") of (i) any Claims that are
asserted against any of the Guaranty Indemnitees relating to the Transferred
Assets or Transferred Claims arising out of, contributed to by, or based upon
any liability, action, or failure to act, of the FDIC Manager for which the
FDIC Manager would have been required to provide indemnification under the
Assistance Agreement had such agreement not been terminated, (ii) any Claims
that are asserted against any of the Guaranty Indemnitees arising out of,
contributed to by, or based upon any liability, action, or failure to act, of
the FDIC Manager with respect to any of the Transferred Assets occurring after
the Closing Date, (iii) any Claims against any of the Guaranty Indemnitees
relating to the Transferred Cases arising out of, contributed to by, or based
upon any liability, action, or failure to act, of any Guaranty Indemnitees for
which the FDIC Manager would have been required to provide indemnification
under the Assistance Agreement had such agreement not been terminated, (iv)
any Claims against any of the Guaranty Indemnitees for Unassumed Liabilities
and Claims as described in Section 7(a)(1) of the Assistance Agreement, (v)
any Claims against any of the Guaranty Indemnitees for Challenges to the
Transaction as described in Section 7(a)(2) of the Assistance Agreement, and
(vi) any Claims against any of the Guaranty Indemnitees for Environmental
Liabilities as described in Section 7(a)(3) of the Assistance Agreement.
(b) Any Guaranty Indemnitee shall provide the FDIC Manager with written
notice of any Claim which may give rise to an indemnification hereunder and
(i) cooperate with the FDIC Manager in connection with the defense of such
Claims, (ii) notify and provide the FDIC Manager with any summons, complaint,
or other notice of lawsuit and any other documents directly related to such
Claims which the Guaranty Indemnitee receives in connection with such Claims,
and (iii) provide appropriate documentation of the Costs for which the
Guaranty Indemnitee requests indemnification. Failure by a Guaranty
Indemnitee to comply with the foregoing clauses (i), (ii), and (iii) shall not
limit or otherwise affect any obligation of the FDIC Manager under this
Section 11.1 except in the event the FDIC Manager is materially adversely
affected by such failure, and then only to the extent of the adverse affect.
The FDIC Manager is deemed to have notice of any Claim made in any Transferred
Case. The FDIC Manager may participate, at its own expense, in the defense of
such Claims. The FDIC Manager may assume the defense of such Claims provided
that the FDIC Manager indemnifies and holds harmless the Guaranty Indemnitees
for any losses, costs, or expenses incurred by the Guaranty Indemnitees with
respect to such assumed defenses (including any Costs) in connection with the
FDIC Manager's defense, satisfaction, settlement, or compromise of such
defense. It is understood and agreed that, in the event the FDIC Manager
assumes the defense of one or more Claims, the Guaranty Indemnitees may retain
separate counsel at their expense, and participate in the defense of such
Claims. The party defending the Claim, whether it be the Guaranty Indemnitees
or the FDIC Manager, shall assert Guaranty's available statutory and common
law defenses to any environmental Claims covered hereunder. The settlement or
compromise of any Claims against the Guaranty Indemnitees for which the FDIC
Manager is obligated to indemnify such Guaranty Indemnitees pursuant to the
provisions of this Section 11.1 is subject to the prior written approval of
the FDIC Manager.
(c) Notwithstanding Section 11.1(a) hereof, the FDIC Manager shall not
indemnify a Guaranty Indemnitee for any Costs arising (i) out of any matter
- 30 -
that represents a breach of the representations and warranties contained in
Section 8.1 or 8.2 hereof, or (ii) out of any action or failure to act on the
part of any of the Guaranty Indemnitees that is inconsistent with the
management standard set forth in Section 17(a) of the Assistance Agreement.
(d) The indemnification by the FDIC Manager in this Section 11.1 shall
not be transferable except as set forth in Section 12.6 hereof.
(e) The indemnity provided in this Section 11.1 shall expire at 11:59
p.m. Eastern Daylight Time on September 30, 1998 for Costs incurred after
September 30, 1998, except to the extent such Costs are related to Claims that
are in litigation on such date, in which event the indemnity shall continue
for all Costs incurred and paid until such litigation is finally resolved;
provided, however, that the indemnification for Claims described in clause
(vi) of Section 11.1(a) hereof shall not expire.
(f) Subject to the requirements of this Section 11.1, including but not
limited to Section 11.1(c) hereof, the FDIC Manager and the Guaranty
Indemnitees acknowledge and agree that "Environmental Liabilities" and
"Claims" as described in clause (vi) of Section 11.1(a) hereof shall include
but not be limited to (i) any administrative actions for penalties or cleanup
requirements with respect to any Covered Asset, (ii) any migration of any
substances to, from, or on any Covered Asset occurring subsequent to September
30, 1988, which migration relates to conditions existing on or before
September 30, 1988, except where any Guaranty Indemnitee knew of such
migration and, in light of such knowledge, the failure of any such Guaranty
Indemnitee to reasonably prevent such migration was inconsistent with the
management standard set forth in Section 17(a) of the Assistance Agreement,
(iii) any contamination from any storage tanks with respect to a Covered
Asset, (iv) any cost recovery or contribution claims brought under or pursuant
to CERCLA with respect to any Covered Asset, and (v) any Claims based on or
stated to have resulted from acts or omissions of Guaranty or any third party
with respect to any Covered Asset from and after September 30, 1988 so long as
such acts or omissions of Guaranty itself or in connection with any such third
party were not inconsistent with the management standard set forth in Section
17(a) of the Assistance Agreement.
Section 11.2 Indemnification by Guaranty.
(a) Guaranty shall indemnify and hold harmless the FDIC Manager and the
FRF (including by way of indemnification of their officers, directors, and
affiliated persons (the "FDIC Indemnitees") for amounts actually incurred and
paid by the FDIC Indemnitees in connection with the defense, prosecution,
satisfaction, settlement, or compromise, including the reasonable costs and
expenses of litigation (including reasonable attorneys' and accountants' fees,
travel expenses, judgments, court costs and related litigation expenses, and
such other costs as may be incurred and paid by the FDIC Indemnitees in
connection with the defense, prosecution, satisfaction, settlement, or
compromise), of any Claims relating to the Retained Assets, Transferred
Assets, or Transferred Claims arising out of or based upon any liability or
action of, or failure to act by, Guaranty or any of Guaranty's affiliates,
officers, or directors occurring during the period commencing the Effective
Date, through and including the Closing Date (or, in the case of any Claims
relating to the Retained Assets, through and including September 30, 1998)
that are asserted against the FDIC Indemnitees or asserted against the FDIC
Indemnitees arising out of or based upon any breach of the representations and
- 31 -
warranties of Guaranty and/or any of the Acquirers set forth in Section 8.1 or
8.2 hereof.
(b) The FDIC Indemnitees shall provide Guaranty with notice of any
Claim which may give rise to an indemnification hereunder and (i) cooperate
with Guaranty in connection with the defense of such Claims, (ii) notify and
provide Guaranty with any summons, complaint, or other notice of lawsuit and
any other documents directly related to such Claims which the FDIC Indemnitees
receive in connection with such Claims, and (iii) provide appropriate
documentation of the expenses for which the FDIC Indemnitees request
indemnification. Failure by an FDIC Indemnitee to comply with the foregoing
clauses (i), (ii), and (iii) shall not limit or otherwise affect any
obligation of Guaranty under this Section 11.2 except in the event Guaranty is
materially adversely affected by such failure, and then only to the extent of
the adverse affect. Guaranty may participate, at its own expense, in the
defense of such Claims. Guaranty may assume the defense of such Claims
provided that Guaranty indemnifies and holds harmless the FDIC Indemnitees for
any losses, costs, or expenses incurred by the FDIC Indemnitees with respect
to such assumed defenses (including any reasonable costs and expenses of
litigation, as specified in the first sentence of Section 11.2(a) hereof) in
connection with Guaranty's defense, satisfaction, settlement, or compromise of
such defense. It is understood and agreed that, in the event Guaranty assumes
the defense of one or more Claims, the FDIC may retain separate counsel at its
own expense, and participate in the defense of such Claims. The party
defending the Claim, whether it be the FDIC Indemnitees or Guaranty, shall
assert Guaranty's available statutory and common law defenses to any
environmental Claims covered hereunder. The settlement or compromise of any
Claims against the FDIC Indemnitees for which Guaranty is obligated to
indemnify such FDIC Indemnitees pursuant to the provisions of this Section
11.2 is subject to the prior written approval of Guaranty.
Section 11.3 Indemnification by Temple-Inland.
(a) Temple-Inland shall indemnify and hold harmless the FDIC Manager,
the FRF, and each Subsidiary (as such term is defined on Exhibit 3.1(g)
attached hereto) from and after the date on which the stock of each such
Subsidiary is transferred to the FDIC Manager (the "Transfer Date") against
(i) all federal or state income taxes (A) imposed on such Subsidiary with
respect to any taxable period or portion thereof that ends on or before the
Transfer Date and (B) imposed on Temple-Inland or any member of an affiliated
group (other than such Subsidiary) with which Temple-Inland files a
consolidated or combined income tax return with respect to any taxable period
and (ii) all state franchise taxes imposed on such Subsidiary, or a wholly-
owned subsidiary of such Subsidiary, with respect to any taxable period that
ends on or includes the Transfer Date.
(b) The FDIC Manager and/or the Subsidiary (the "Tax Indemnitee") shall
provide Temple-Inland with notice of any claim which may give rise to an
indemnification hereunder and (i) cooperate with Temple-Inland in connection
with the defense of such claims, (ii) notify and provide Temple-Inland with
any summons, complaint, or other notice of lawsuit and any other documents
directly related to such claims which the Tax Indemnitee receives in
connection with such claims, and (iii) provide appropriate documentation of
the expenses for which the Tax Indemnitee requests indemnification. Failure
by a Tax Indemnitee to comply with the foregoing clauses (i), (ii), and (iii)
- 32 -
shall not limit or otherwise affect any obligation of Temple-Inland under this
Section 11.3 except in the event Temple-Inland is materially adversely
affected by such failure, and then only to the extent of the adverse affect.
Temple-Inland may participate, at its own expense, in the defense of such
claims. Temple-Inland may assume the defense of such claims provided that
Temple-Inland indemnifies and holds harmless the Tax Indemnitee for any
losses, costs, or expenses incurred by the Tax Indemnitee with respect to such
assumed defenses (including any reasonable costs and expenses of litigation)
in connection with Temple-Inland's defense, satisfaction, settlement, or
compromise of such defense. It is understood and agreed that, in the event
Temple-Inland assumes the defense of one or more claims, a Tax Indemnitee may
retain separate counsel at its own expense, and participate in the defense of
such claims. The settlement or compromise of any claims against a Tax
Indemnitee for which Temple-Inland is obligated to indemnify such Tax
Indemnitee pursuant to the provisions of this Section 11.3 is subject to the
prior written approval of Temple-Inland.
ARTICLE 12
MISCELLANEOUS
Section 12.1 Amendments. No amendment, modification, or waiver of any
provision of this Agreement, nor any consent to any departure therefrom by any
party, shall in any event be effective unless the same shall be embodied in a
writing signed by all parties hereto, and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
it is given.
Section 12.2 Notices. Any notice, request, claim, demand, consent,
approval, or other communication to any party hereto shall be deemed effective
when received and shall be given in writing, and delivered in person against
receipt therefor, or sent by certified mail, postage prepaid or by facsimile
transmission (with a hard copy mailed at the same time), to such party at its
address set forth below (with copies as indicated below) (or at such address
as set forth on the FDIC List of Additional Addresses attached hereto as
Exhibit 12.2) or at such other address as such party shall hereafter furnish
in writing to the other parties hereto.
(a) If to Guaranty:
Guaranty Federal Bank, F.S.B.
0000 X. Xxxxx Xxxxxxxxxx
Xxxxxx, Xxxxx 00000
Attention: President
Facsimile No.: (000) 000-0000
With a copy to:
Guaranty Federal Bank, F.S.B.
0000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxx 00000
Attention: General Counsel
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Facsimile No.: (000) 000-0000
and
Temple-Inland Inc.
000 Xxxxx Xxxxxx Xxxxx
Xxxxxx, Xxxxx 00000
Attention: General Counsel
Facsimile No.: (000) 000-0000 or (000) 000-0000
(b) If to the FDIC Manager:
Federal Deposit Insurance Corporation
Division of Resolutions
Assisted Acquisitions (FRF)
000 00xx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Attention: Assistant Director (FRF)
Facsimile No.: (000) 000-0000
With a copy to:
Federal Deposit Insurance Corporation
Legal Division
000 00xx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Attention: Assistant General Counsel
(Resolutions)
Facsimile No.: (000) 000-0000
Notices received before 5:00 p.m. local time on a business day shall be
effective the date received. Notices received after 5:00 p.m. local time on a
business day shall be deemed received on the next business day.
Section 12.3 Waiver. Except as otherwise set forth in this Agreement,
no failure or delay on the part of any party to this Agreement in exercising
any right, privilege, power, or remedy under this Agreement, and no course of
dealing among the parties hereto, shall operate as a waiver of such right,
privilege, power, or remedy, nor shall any single or partial exercise of any
right, privilege, power, or remedy under this Agreement preclude any other or
further exercise of such right, privilege, power, or remedy. The rights,
privileges, powers, and remedies available to the parties hereto are
cumulative and not exclusive of any other rights, privileges, powers, or
remedies provided by statute, at law, in equity, or otherwise. No notice to
or demand on any party shall in any case entitle such party to any other or
further notice or demand in any similar or other circumstances or constitute a
waiver of the right of the party giving such notice or making such demand to
take any other or further action in any circumstances without notice or
demand.
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Section 12.4 Governing Law. To the extent federal law does not
control, this Agreement and the rights and obligations hereunder shall be
governed by and construed in accordance with the laws of the State of Texas.
Any legal action or proceedings with respect to this Agreement shall be
brought in the federal courts of the United States of America located in the
District of Columbia or in the Northern District of Texas, except as set forth
in Article 6 hereof, and each party hereto submits to the exclusive
jurisdiction of such courts and hereby waives any objections on the grounds of
venue, forum non conveniens, or any similar grounds.
Section 12.5 Severability. Whenever possible, each provision of this
Agreement shall be interpreted in such a manner as to be effective and valid
under all applicable laws. However, in the event that any provision of this
Agreement shall be held to be prohibited or invalid under any applicable law,
or declared unenforceable, then all of the remaining provisions of this
Agreement shall, to the fullest extent possible, remain in full force and
effect and shall be binding on the parties hereto; provided, however, that
this Section 12.5 shall be of no force or effect if the exclusion of such
provision or portion thereof shall render the remaining provisions of this
Agreement incapable of observance or shall cause this Agreement as a whole to
fail of its essential purpose.
Section 12.6 Successors and Assigns. This Agreement shall be binding
upon and shall inure to the benefit of the parties hereto and, except as
otherwise provided in this Agreement, their respective successors and assigns;
provided, however, that except for a successor to Guaranty, any Acquirer or
the FDIC Manager by merger, consolidation, liquidation, succession, or change
of control, this Agreement may not be assigned to any person or entity nor may
any rights or obligations under this Agreement be transferred or delegated to
or vested in any other person or entity without the prior written consent of
the FDIC Manager, Guaranty, and the Acquirers.
Section 12.7 Headings. The headings contained in this Agreement are
for convenience only and shall not affect the construction of any provision of
this Agreement.
Section 12.8 Exhibits. All Exhibits (including the Addendum to the
Exhibits dated October 31, 1995) attached hereto are an integral part of and
are hereby incorporated into this Agreement.
Section 12.9 Entire Agreement. This Agreement and the Exhibits
attached hereto (including the Addendum to the Exhibits dated October 31,
1995) embody the entire agreement among the parties hereto relating to the
subject matters herein, and supersedes all prior agreements and understandings
among the parties hereto, oral or written, relating to such matters. The
parties hereto acknowledge that the rights and obligations provided for in
this Agreement are independent of, and have no bearing on, the rights and
obligations provided for in that certain Termination Agreement dated as of
October 31, 1995 by and among the FDIC Manager, Guaranty, and the Acquirers
pertaining to the AFB Assistance Agreement.
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Section 12.10 Third-Party Beneficiaries. Except as expressly provided
in this Agreement, no provision of this Agreement is intended to nor shall it
benefit any person other than the parties hereto.
Section 12.11 Execution in Counterparts. This Agreement may be
executed in separate counterparts, each of which when executed and delivered
shall be deemed to be an original, and all of which taken together shall
constitute one and the same Agreement.
Section 12.12 Computation of Time. Should the operative date for a
party's response or action under any particular provision of this Agreement
occur on a Saturday or Sunday or a Federal holiday, then the first business
day following such day shall be the operative date for purposes of such
provision.
Section 12.13 Continuing Cooperation. The FDIC Manager, Guaranty, and
the Acquirers each agree that in order to more effectively carry out the
intent and purposes of this Agreement and the transactions contemplated
hereby, as set forth in the Recitals and the further terms and provisions
hereof, the parties hereto will cooperate in implementing such intent,
purposes and transactions which are to be accomplished and/or performed from
and after the Closing. Each party will use its good faith best efforts to
cooperate with one another to carry out the intent and purposes hereof and
perform each act required to be performed from and after the Closing within
the time periods provided herein or, in the event no time period is provided
for a particular act or response, in a timely manner.
SIGNATURE PAGE FOLLOWS
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by themselves or their respective officers, as the case may be,
as of the day and year first above written.
GUARANTY FEDERAL BANK, F.S.B.
By:
Name:
Title:
GUARANTY HOLDINGS INC. I
By:
Name:
Title:
TEMPLE-INLAND INC.
By:
Name:
Title:
FEDERAL DEPOSIT INSURANCE
CORPORATION, AS MANAGER OF THE
FSLIC RESOLUTION FUND
By:
Name:
Title:
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