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EXHIBIT 2.1
PURCHASE AND ASSUMPTION AGREEMENT
BY AND BETWEEN
AMERICAN BANK
AND
BALTIMORE COUNTY SAVINGS BANK, F.S.B.
DATED AS OF
JANUARY 12, 2010
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TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS..........................................................................................1
Section 1.1. Defined Terms.............................................................1
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Section 1.2. Accounting Terms..........................................................9
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ARTICLE II
PURCHASE AND SALE OF PURCHASED ASSETS AND ASSIGNMENT
AND ASSUMPTION OF ASSUMED LIABILITIES.........................................................10
Section 2.1. Purchase and Sale of Assets; No Other Assets Purchased...................10
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Section 2.2. Excluded Assets...........................................................5
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Section 2.3 Assumed Liabilities.......................................................6
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Section 2.4 Excluded Liabilities......................................................7
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ARTICLE III
PURCHASE PRICE; PRORATIONS;ALLOCATION OF PURCHASE PRICE;
ADJUSTMENT OF PAYMENT AMOUNT.............................................15
Section 3.1. Purchase Price...........................................................15
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Section 3.2. Prorations...............................................................16
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Section 3.3. Allocation of Purchase Price..............................................8
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Section 3.4 Adjustment of Payment Amount..............................................9
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ARTICLE IV
TAXES ..............................................................................................10
Section 4.1. Sales, Transfer and Use Taxes............................................10
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ARTICLE V
CLOSING.............................................................................................11
Section 5.1. Closing Date.............................................................21
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Section 5.2. Seller's Deliveries......................................................24
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Section 5.3. Purchaser's Deliveries...................................................26
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ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF SELLER............................................................27
Section 6.1. Organization.............................................................27
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Section 6.2. Authority................................................................28
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Section 6.3 Non-Contravention........................................................13
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Section 6.4. Compliance with Law......................................................29
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Section 6.5. Legal Proceedings........................................................29
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Section 6.6. Condition and Title to Purchased Assets..................................30
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Section 6.7. No Broker................................................................31
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Section 6.8. Deposit Liabilities......................................................31
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Section 6.9. Assumed Liabilities......................................................14
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Section 6.10. Regulatory Matters.......................................................14
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Section 6.11. Accuracy of Books and Records............................................15
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Section 6.12 Environmental Matters....................................................15
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Section 6.13 Employee Matters.........................................................15
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ARTICLE VII
REPRESENTATIONS AND WARRANTIES OF PURCHASER.........................................................35
Section 7.1. Organization.............................................................16
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Section 7.2. Authority................................................................36
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Section 7.3. Non-Contravention........................................................36
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Section 7.4. Legal Proceedings........................................................37
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Section 7.5. Regulatory Matters.......................................................37
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Section 7.6. Capital Available........................................................17
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Section 7.7 No Broker................................................................40
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ARTICLE VIII
COVENANTS OF SELLER.................................................................................41
Section 8.1. Conduct of the Seller's Business.........................................41
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Section 8.2. Regulatory Approvals.....................................................43
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Section 8.3. Transfer of Data.........................................................19
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Section 8.4. Forms....................................................................44
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Section 8.5 Interest Information.....................................................45
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Section 8.6 Non-Solicitation.........................................................45
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Section 8.7 Further Assurances.......................................................20
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ARTICLE IX
COVENANTS OF PURCHASER..............................................................................47
Section 9.1. Regulatory Approvals and Standards.......................................47
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Section 9.2. Solicitation of Accounts.................................................48
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Section 9.3. Recording of Instruments of Assignment...................................49
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Section 9.4. Other Transactions.......................................................49
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Section 9.5 Further Assurances.......................................................21
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ARTICLE X
ACCESS; EMPLOYEE AND CUSTOMER COMMUNICATIONS........................................................50
Section 10.1. Access by Purchaser......................................................50
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Section 10.2. Communications with Customers............................................22
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Section 10.3 Inspection of Real Property..............................................22
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Section 10.4 Real Property, Title and Surveys.........................................22
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ARTICLE XI
TRANSITIONAL MATTERS................................................................................56
Section 11.1. Payment of Deposit Liabilities...........................................56
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Section 11.2. Notice and Delivery of Purchaser's Check Forms...........................59
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Section 11.3. Uncollected Checks Returned to Seller....................................59
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Section 11.4. New ATM/Debit Cards......................................................59
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Section 11.5. Deactivation of ATM and ATM/Debit Cards..................................59
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Section 11.6. Actions With Respect to XXX Deposit Liabilities..........................59
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Section 11.7. Bulk Transfer Laws.......................................................59
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Section 11.8 Processing of Electronic Items...........................................59
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Section 11.9 Account Statements.......................................................28
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Section 11.10 Loan Payments............................................................28
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Section 11.11 Assumption of Risks......................................................28
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ARTICLE XII
CONDITIONS TO CLOSING...............................................................................59
Section 12.1. Conditions to Obligations of Seller......................................59
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Section 12.2. Conditions to Obligations of Purchaser...................................59
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ARTICLE XIII
DATA PROCESSING.....................................................................................59
Section 13.1. Conversion...............................................................59
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ARTICLE XIV
INDEMNIFICATION.....................................................................................33
Section 14.1. Seller Indemnification...................................................59
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Section 14.2. Purchaser Indemnification................................................59
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Section 14.3. Indemnification Procedure................................................34
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Section 14.4. Limitation on Liability..................................................59
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Section 14.5. General..................................................................59
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Section 14.6. Survival.................................................................59
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ARTICLE XV
EMPLOYEES...........................................................................................36
Section 15.1. Hiring of Employees......................................................36
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Section 15.2 Salaries, Bonuses, etc...................................................36
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Section 15.3 Hirings..................................................................37
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Section 15.4 Solicitation of Employees................................................37
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Section 15.5 Retention Bonus Pool.....................................................37
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Section 15.6 COBRA Notifications......................................................37
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ARTICLE XVI
POST-CLOSING MATTERS ...............................................................................37
Section 16.1 Further Assurances.......................................................37
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Section 16.2. Access to and Retention of Books and Records.............................59
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Section 16.3. Deposit Histories........................................................38
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ARTICLE XVII
MISCELLANEOUS.......................................................................................59
Section 17.1. Expenses.................................................................39
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Section 17.2. Trade Names and Trademarks...............................................59
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Section 17.3. Termination: Extension of Closing Date..................................59
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Section 17.4. Modification and Waiver..................................................59
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Section 17.5. Binding Effect: Assignment...............................................59
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Section 17.6. Confidentiality..........................................................59
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Section 17.7. Entire Agreement; Governing Law..........................................59
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Section 17.8. Consent to Jurisdiction; Waiver of Jury Trial............................59
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Section 17.9. Waiver of Certain Damages................................................59
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Section 17.10. Severability.............................................................59
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Section 17.11. Counterparts.............................................................59
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Section 17.12. Notices..................................................................59
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Section 17.13. Interpretation...........................................................59
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Section 17.14. Specific Performance.....................................................59
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Section 17.15. No Third Party Beneficiaries.............................................59
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Schedules
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2.1(b) Fixed Assets
2.1(d) Assumed Contracts
2.1(f) Assumed Leases
2.1(g) Real Property
2.2 Excluded Assets
2.3(a) Deposit Liabilities
6.10(a) Regulatory Approvals
6.12 Environmental Matters
6.13 List of Seller's Employees at Branches
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Exhibits
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A Preliminary Closing Statement
B Final Closing Statement
C Form of Assignment and Assumption Agreement
D Form of Xxxx of Sale
E Map of Prohibited Area
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PURCHASE AND ASSUMPTION AGREEMENT
This PURCHASE AND ASSUMPTION AGREEMENT (this "Agreement") dated as of
January ___, 2010 by and between Baltimore County Savings Bank, F.S.B., a
federal savings bank with its principal office in Baltimore, Maryland
("Seller"), and American Bank, a federal savings bank with its principal office
in Greenbelt, Maryland ("Purchaser").
WHEREAS, Purchaser desires to acquire certain assets and assume certain
Deposit Liabilities of Seller and Seller desires to transfer to Purchaser such
assets and Deposit Liabilities of Seller as described below in accordance with
the terms and provisions of this Agreement.
NOW, THEREFORE, in consideration the premises and the mutual promises
and covenants contained herein, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, and intending to
be legally bound hereby subject to the terms and conditions set forth herein,
Seller and Purchaser agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. DEFINED TERMS.
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As used in this Agreement, the following terms shall have the following
meanings:
"Account" shall have the meaning specified in Section 13.1(a).
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"Account Histories" shall have the meaning specified in Section
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13.1(c).
"Accrued Interest" shall mean, as of any date, the interest, dividends,
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fees, costs and other charges that have been accrued on but not paid, credited,
or charged to the Deposit Liabilities.
"Adjusted Payment Amount" shall have the meaning specified in Section
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3.4(a).
"Affiliate" shall mean, with respect to any Person, any other Person
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that directly or indirectly through one or more intermediaries, controls, is
controlled by, or is under common control with, such Person, or a director,
officer, partner, joint venturer or member of such Person and any successors of
such Person.
"Assignment and Assumption Agreement" shall have the meaning specified
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in Section 5.2(a).
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"Assumed Contracts" shall have the meaning specified in Section 2.1.
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"Assumed Liabilities" shall have the meaning specified in Section 2.3.
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"Branches" shall mean the branch offices of Seller located at 6335
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Xxxxxxxxx Xxxxxxxx Xxxx, Xxxxxxxxxxx, XX 00000 ("Catonsville"); 0000 Xxxxxxxxx
Xxxxxxxx Xxxx, Xxxxxxxx Xxxx, XX 00000 ("Ellicott City"); 0000 Xxxxxxx Xxxx,
Xxxxxxxxx, XX 00000 ("Xxxxxxxx"); and 0000 Xxxxxxxx Xxxxxxxxx, Xxxxxx Xxxxx, XX
00000 ("Xxxxxx Xxxxx").
"Business Day" shall mean any day that the Federal Reserve Bank of New
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York is open.
"Closing" shall have the meaning specified in Section 5.1(a).
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"Closing Date" shall have the meaning specified in Section 5.1(a).
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"Code" shall mean the Internal Revenue Code of 1986, as amended, and
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the regulations promulgated thereunder.
"Confidentiality Agreement" shall mean that certain letter agreement
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between Purchaser and Seller dated as of March 10 2009.
"Customers" shall mean, individually and collectively, the Persons
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named as the owners of the accounts relating to the Deposit Liabilities.
"Customer Notices" shall have the meaning specified in Section 10.2.
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"Damages" shall have the meaning specified in Section 14.1.
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"Deposit Liabilities" shall mean all of Seller's obligations and
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liabilities relating to (a) the deposit accounts listed on Schedule 2.3 hereto,
and (b) deposit accounts which are opened at the Branches between the close of
business of Seller on the Business Day set forth on Schedule 2.3 and the close
of business on the Closing Date, including, without limitation, all passbook
accounts, all statement savings accounts, checking, Money Market and NOW
accounts, and savings and certificate XXX accounts and corporate sweep accounts,
together with Accrued Interest thereon, all as exist at the close of business on
the Closing Date, but excluding any deposit account excluded as Deposit
Liabilities under Section 2.4 and any claim or other liability relating to the
origination of any such deposit account or the administration of any such
deposit account prior to the close of business on the Closing Date.
"Draft Closing Statement" shall mean a draft closing statement as of
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the close of business of the fifth Business Day immediately preceding the
Closing Date setting forth the Cash Payment Amount (including all estimated
adjustments and prorations thereto).
"Electronic Records" shall have the meaning specified in Section 8.3.
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"Estimated Closing Payment" shall mean the estimate of the Purchase
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Price set forth on the preliminary closing statement under Section 3.4.
"Excluded XXX Deposits" shall have the meaning specified in Section
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11.6(a).
"FDIA" shall mean the Federal Deposit Insurance Act, as amended (12
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U.S.C. xx.xx. 1811 et seq.).
"FDIC" shall mean the Federal Deposit Insurance Corporation.
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"Federal Funds Rate" shall mean, for the period involved, the average
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of the interest rates for each day of the period set forth in H.15(519) opposite
the caption "Federal Funds (Effective)." H.15(519) means the weekly statistical
release designated as such, or any successor publication, published by the Board
of Governors of the Federal Reserve System.
"Final" shall mean, as applied to any governmental order or action,
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that such order or action has not been stayed, vacated or otherwise rendered
ineffective and either (a) the time period for taking an appeal therefrom shall
have passed without an appeal therefrom having been taken, or (b) if any such
appeal shall have been dismissed or resolved, all applicable periods for further
appeal of such order or action shall have passed.
"Final Approval Date" shall mean, with respect to the transactions
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contemplated hereby, the date upon which the last of the following has occurred:
(a) all Regulatory Approvals have been obtained; (b) all applicable regulatory
notices which are required to be published or given prior to consummation of the
transactions contemplated hereby have been published or given; (c) the filing of
all applicable regulatory reports; and (d) the expiration of all applicable
regulatory comment and waiting periods.
"Final Settlement Date" shall have the meaning specified in Section
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3.4(c).
"GAAP" shall have the meaning specified in Section 1.2.
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"Indemnified Party" shall have the meaning specified in Section 14.3.
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"Indemnitor" shall have the meaning specified in Section 14.3.
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"XXX" shall mean an individual retirement account as specified in
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Section 408 and 408A of the Code.
"XXX Deposit Liability" shall mean a Deposit Liability in an account
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which is an XXX.
"IRS" shall mean the Internal Revenue Service of the United States.
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"Items" shall mean transfers of funds by wire or through the Automated
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Clearing House, checks, drafts, negotiable orders of withdrawal and items of a
like kind which are drawn on or deposited and credited to the Deposit
Liabilities.
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"Knowledge" shall mean, with respect to Seller, the actual knowledge as
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of the date hereof, without further investigation, of any of Seller's executive
officers, and with respect to Purchaser, the actual knowledge as of the date
hereof, without further investigation, of any of Purchaser's executive officers.
"Laws" shall have the meaning set forth in Section 6.4.
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"Person" shall mean any individual, partnership, joint venture,
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corporation, trust, limited liability company, unincorporated organization,
government or other entity.
"Provisional Settlement Date" shall have the meaning specified in
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Section 3.4(b).
"Purchased Assets" shall have the meaning specified in Section 2.1.
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"Purchase Price" shall have the meaning specified in Section 3.4.
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"Purchaser" shall have the meaning specified in the Preamble.
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"Regulatory Approvals" shall have the meaning specified in Section
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6.10(a).
"Returned Item" shall have the meaning given in Section 13.1(g).
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"Safe Deposit Boxes" means the safe deposit boxes of the Seller
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including the removable safe deposit boxes and safe deposit stacks in the
Seller's vault at the Branches, all rights and benefits (other than fees due and
collected prior to the Closing Date) under rental agreements with respect to
such safe deposit boxes, and all keys and combinations thereto.
"Settlement Date" shall have the meaning specified in Section 3.4(b).
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"Transfer Date" shall mean the first Business Day following the Closing
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Date.
SECTION 1.2. ACCOUNTING TERMS.
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All accounting terms not otherwise defined herein shall have the
respective meanings assigned to them in accordance with generally accepted
accounting principles as in effect from time to time in the United States of
America ("GAAP").
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ARTICLE II
PURCHASE AND SALE OF PURCHASED ASSETS AND ASSIGNMENT AND
ASSUMPTION OF ASSUMED LIABILITIES
SECTION 2.1. PURCHASE AND SALE OF ASSETS.
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The Seller agrees, subject to the other terms and conditions of this
Agreement, to sell, transfer, convey, assign and deliver to Purchaser, and
Purchaser agrees to purchase, accept and receive from Seller, on the Closing
Date, the following assets, properties and rights free and clear of all
encumbrances, except such encumbrances that arise under applicable law
(collectively, the "Purchased Assets"):
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(a) all overdrafts associated with all Deposit Liabilities assumed by
Purchaser under Section 2.3 hereof;
(b) all of Seller's right, title and interest in and to all personal
property, furniture, fixtures, leasehold improvements and
equipment located at the Branches and owned by Seller, as listed
on Schedule 2.1(b) hereto, together with any manufacturer's
warranties and maintenance or service agreements thereon which
are in effect on the Closing Date and are assignable to Purchaser
("Fixed Assets");
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(c) all cash on hand ("Cash on Hand") maintained at the Branches as
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of the close of business on the Closing Date;
(d) Seller's rights under, or created by, the contracts relating to
the operation or maintenance of the Branches that are assignable
by Seller to Purchaser, which contracts are identified on
Schedule 2.1(d) hereto (the "Assumed Contracts");
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(e) The Safe Deposit Boxes;
(f) all of Seller's rights as lessee under the Leases on the
Catonsville, Ellicott City and Xxxxxx Xxxxx Branches, which
leases are identified on Schedule 2.1(f) hereto (the "Assumed
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Leases"); and
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(g) all of Seller's right, title and interest in and to the real
property on which the Xxxxxxxx Branch is located and the
buildings and improvements situated thereon, the legal
descriptions of which are set forth on Schedule 2.1(g) hereto
(the "Real Property").
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SECTION 2.2. EXCLUDED ASSETS.
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All assets, properties and rights of Seller not expressly included in
the Purchased Assets are excluded from the transactions contemplated by this
Agreement, including, without limitation, the following items:
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(a) all trademarks, copyrights, third party software licenses,
medallion program stamps, signs, logos, proprietary information,
stationery, forms, labels, shipping materials, brochures,
advertising and marketing materials and similar property of
Seller and its Affiliates;
(b) all assets, properties and rights of Seller and its Affiliates
used, relating to, located at or attributed to all operations,
branches and facilities of Seller and its Affiliates other than
the Branches or the Purchased Assets; and
(c) all other assets listed on Schedule 2.2(c) hereto.
SECTION 2.3. ASSUMED LIABILITIES.
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Subject to the terms and conditions of this Agreement, on the Closing
Date Purchaser shall assume, and thereafter honor and fully and timely, pay,
perform and discharge when due, the following liabilities of Seller and shall
perform all liabilities, duties, responsibilities, and obligations of Seller
under the following, to the extent that such liabilities, duties,
responsibilities and obligations arise or accrue after the close of business on
the Closing Date (collectively, the "Assumed Liabilities"):
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(a) the Deposit Liabilities -
(i) All of Seller's duties and responsibilities relating to
the Deposit Liabilities, including without limitation,
with respect to (x) the abandoned property laws of any
state or (y) any other applicable law;
(ii) Any of Seller's accrued and unpaid expenses related to
the Deposit Liabilities to the extent a proration or
adjustment is made with respect thereto pursuant to
Section 3.2; and
(iii) Any and all other liabilities and obligations relating
to or arising out of the Purchased Assets or Assumed
Deposit Liabilities to be performed after the Closing,
and as set forth in Schedule 2.3(a), but only to the
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extent that such liabilities or obligations arise or
accrue after the close of business on the Closing Date;
(b) the Assumed Leases on the Branches;
(c) the Assumed Contracts;
(d) the Real Property; and
(e) the operation of the Branches in the ordinary course of
business, including, without limitation, the payment of salary,
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compensation and employee benefits earned by employees of the
Seller employed at the Branches after the Closing Date.
SECTION 2.4. EXCLUDED LIABILITIES.
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All liabilities and obligations of Seller not expressly included in the
Assumed Liabilities are excluded from the transactions contemplated in the
Agreement, including, without limitation, the following items:
(a) all liabilities associated with cashier's checks or other
official bank checks and traveler's checks issued by Seller;
(b) all liabilities associated with accounts of Seller's employees,
officers and directors, other than accounts of those employees of
the Seller employed at the Branches;
(c) certificate of deposit accounts and XXX certificate accounts that
(a) are subject to any order, agreement or encumbrance that in
any way restricts the payment of funds representing such account
on the order of the depositor, or (b) are "brokered deposits" (as
that term is defined in 12 C.F.R. Sections 337.6(a)(2)); and
(d) all liabilities and obligations of Seller relating to the
Branches that are not expressly included in the Assumed
Liabilities.
ARTICLE III
PURCHASE PRICE; PRORATIONS;
ALLOCATION OF PURCHASE PRICE;
ADJUSTMENT OF ESTIMATED PAYMENT AMOUNT
SECTION 3.1. PURCHASE PRICE.
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In consideration of the assumption by Purchaser of the Assumed
Liabilities, Seller shall transfer the Assets to Purchaser and shall pay
Purchaser, by wire transfer of immediately available funds on the Closing Date,
an amount equal to the Deposit Liabilities, determined in accordance with
Section 2.3(a) hereof reduced by the sum of:
(a) the book value (net of accumulated depreciation) of the Fixed
Assets as shown on the books and records of Seller on the Closing
Date prorated for depreciation/amortization through the month in
which the Closing Date occurs;
(b) the current book value of the Real Property, as carried on the
books and records of Seller, on the Closing Date;
(c) the face amount of Cash on Hand maintained at the Branches on the
Closing Date; and
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(d) the lesser of 2% of the Deposit Liabilities or $1,350,000.
The amount determined by such payment formula is herein referred to as
the "Cash Payment Amount" and shall be further adjusted on the Closing Date in
accordance with Section 3.2 hereof. The Purchase Price shall be determined in
accordance with Section 3.4. The payment formula referred to above is for the
sole purpose of determining the amount of cash transferable by the Seller to the
Purchaser at the Closing Date and shall not constitute an allocation of the
Purchase Price to any particular asset being transferred or liability being
assumed pursuant hereto.
SECTION 3.2. PRORATIONS.
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It is the intention of the parties hereto that Seller shall operate the
Branches and maintain the Deposit Liabilities for its own account until the
close of business on the Closing Date and that Purchaser shall operate the
Branches and maintain the Deposit Liabilities for its own account from and after
the close of business on the Closing Date. Thus, except as otherwise
specifically provided in this Agreement, items of expense directly attributable
to the operation of the Branches (which shall not include any general overhead
expenses of Seller) shall be prorated as of the close of business on the Closing
Date, whether or not such adjustment would normally be made as of such time,
including, without limitation, (i) telephone, electric, gas, water, and other
utility services (to the extent it is not possible to transfer such services
into the name of Purchaser as of the Closing Date), (ii) taxes associated with
the Real Property and the Fixed Assets, (iii) assessments (including, without
limitation, assessments attributable to prepaid FICO assessments and prepaid
FDIC deposit inurance assessments through the Closing Date, provided that
Purchaser's portion of the prepaid assessments shall be based on the lower of
the assessment rate charged Seller for the relevant period or the assessment
rate charged Purchaser for the relevant period), (iv) payments due on Leases and
Assumed Contracts, and (v) similar expenses related to the Assets transferred
hereunder, except that any penalties or excess charges resulting solely from
Seller's inaction shall be borne entirely by Seller. To the extent any such item
has been prepaid by Seller for a period extending beyond the Closing Date, there
shall be a proportionate adjustment in favor of Seller for the current period.
Seller and Purchaser shall file all necessary notices and documentation with the
FDIC pursuant to 12 C.F.R 327.12(f) to facilitate the transfer of the prepaid
deposit insurance assessment attributable to the Deposits Liabilities to the
Purchaser.
SECTION 3.3. ALLOCATION OF PURCHASE PRICE.
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The purchase price for the assets being purchased and the Deposit
Liabilities being assumed by Purchaser pursuant to this Agreement shall be
allocated on an allocation schedule to be agreed upon by Purchaser and Seller
within thirty (30) days after the Closing Date. This allocation is intended to
comply with the allocation method required by Section 1060 of the Internal
Revenue Code of 1986, as amended. Purchaser and Seller shall cooperate to comply
with all substantive and procedural requirements of Section 1060 and any
regulations thereunder, and the allocation shall be adjusted if and to the
extent necessary to comply with the requirements of Section 1060. The parties
shall: (i) each report the federal, state and local and other tax consequences
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of the purchase and assumption contemplated hereby (including the filing of
Internal Revenue Service Form 8594) in a manner consistent with such allocation
schedule; and (ii) take no position in any tax filing, return, proceeding, audit
or otherwise which is inconsistent with such allocation.
SECTION 3.4. METHOD OF PAYMENT AND ADJUSTMENT OF PAYMENT.
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Because the parties acknowledge that certain amounts to be paid may not
be finally determinable until after the Closing Date, the Closing Payment will
be paid as follows:
(a) Not less than two (2) Business Days prior to the Closing Date,
Seller shall deliver to Purchaser a proposed preliminary closing
statement in substantially the same form as Exhibit A as of a
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date not more than five (5) Business Days prior to the Closing
Date. The parties shall agree upon the preliminary closing
statement prior to the Closing Date. On the Closing Date, Seller
will transfer to Purchaser, by wire transfer of immediately
available funds, the estimated Closing Payment as reflected on
the preliminary closing statement (the "Estimated Closing
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Payment").
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(b) Not later than ten (10) Business Days following the Closing Date
(the "Provisional Settlement Date"), Seller and Purchaser shall
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determine the actual Closing Payment and execute a final closing
statement in substantially the same form as Exhibit B. Based on
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such determination, Seller shall pay to Purchaser, or Purchaser
shall pay to Seller, as appropriate, in immediately available
funds, by wire transfer effected in accordance with the written
instructions of the party entitled to receive payment, an amount
equal to the difference between the Estimated Closing Payment and
the actual Closing Payment plus interest on such difference for
the number of days elapsed from but excluding the Closing Date to
and including the Provisional Settlement Date, at the daily
Federal Funds Rate for each day within that period.
(c) Purchaser and Seller agree to recalculate and adjust by
appropriate payment in immediately available funds, by wire
transfer effected in accordance with the written instructions of
the party entitled to receive such payment, thirty (30) Business
Days after the Closing Date (the "Final Settlement Date"), the
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Closing Payment if the parties shall determine that the amount
previously paid to Purchaser as the Closing Payment should be
adjusted. Any payment made based on an adjustment of the Closing
Payment by either party to the other shall include interest on
the amount of the adjustment for the number of days elapsed from
but excluding the Closing Date to and including the Final
Settlement Date at the Federal Funds Rate on the Closing Date.
Any payment by Purchaser to Seller or Seller to Purchaser
pursuant to this Section 3.4(c) shall be treated, for all
purposes, as an adjustment to the Purchase Price.
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ARTICLE IV
TAXES
SECTION 4.1. SALES, TRANSFER AND USE TAXES.
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Except as otherwise provided in this Agreement, any sales, use,
transfer, filing, recordation or similar taxes (collectively, "Taxes") which are
payable or arise as a result of this Agreement or the consummation of the
transactions contemplated hereby, shall be split equally between the Purchaser
and Seller and shall be paid on the Closing Date. Purchaser shall indemnify and
hold harmless Seller from and against such taxes, including those arising upon
subsequent audit by any taxing authority, including interest and penalties with
respect to any taxes that were paid by the Purchaser. If such Taxes are treated
as a proration pursuant to Section 3.2, Seller agrees to remit such Taxes to the
proper authority on or before the date the same shall become due, accompanied by
such tax returns as may be required to be filed with such payment. Purchaser and
Seller will cooperate in the preparation of any filings or returns.
ARTICLE V
CLOSING
SECTION 5.1. CLOSING DATE.
------------
(a) Upon the terms and subject to the conditions of this Agreement,
the purchase and sale of the Purchased Assets and the assumption
of the Assumed Liabilities contemplated by this Agreement shall
take place at a closing (the "Closing") to be held at the offices
-------
of Xxxxxxxxxx Xxxxxxxx, LLP 000 00xx Xxxxxx, XX, Xxxxx 000,
Xxxxxxxxxx, X.X. at 10:00 a.m. (which Closing shall be effective
as of the close of business on the Closing Date) on a date
mutually determined by the parties in writing not to exceed
fifteen (15) days following receipt of the last required
Regulatory Approval and expiration of all applicable waiting
periods, provided all conditions to the obligations of the
parties set forth in Article XII hereof have been satisfied or
waived (other than obligations to be performed at the Closing) or
at such other place or at such other time or on such other date
as Seller and Purchaser may mutually agree in writing ("Closing
-------
Date").
----
(b) It is anticipated that the conversion of Seller's account
information as to the Deposit Liabilities onto Purchaser's data
processing system will occur following the Closing Date. Seller
and Purchaser shall each use their commercially reasonable
efforts to take such actions, and Seller and Purchaser shall
cooperate with each other to ensure that such input or conversion
is completed.
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SECTION 5.2. SELLER'S DELIVERIES.
-------------------
On or before the Closing Date, Seller shall deliver to Purchaser, duly
executed and acknowledged where required:
(a) An assignment and assumption agreement with respect to the
Assumed Liabilities in substantially the form of Exhibit C hereto
---------
(the "Assignment and Assumption Agreement"), executed in
-----------------------------------
counterparts by Seller;
(b) A Xxxx of Sale, in substantially the form attached hereto as
Exhibit D (the "Xxxx of Sale"), transferring to Purchaser all of
---------
Seller's interest in the Purchased Assets;
(c) A deed transferring title to the Real Property to Purchaser;
(d) Consents from third persons that are required to effect the
assignments set forth in the Assignment and Assumption Agreement;
(e) The estimated closing statement setting forth the Estimated
Closing Payment;
(f) Subject to Section 11.6 hereof, the resignation of Seller as
trustee or custodian, as applicable, with respect to each XXX
deposit account included in the Deposit Liabilities and the
designation of Purchaser as successor trustee or custodian with
respect thereto;
(g) Physical possession of all Purchased Assets as are capable of
physical delivery;
(h) Possession of all files for the Deposit Liabilities in custody
of Seller relating thereto, including signature cards for the
Deposit Liabilities, and at least sufficient to allow Purchaser
to comply with its obligations under Section 13 hereof;
(i) A certificate of the Secretary of Seller certifying to the
resolutions adopted by the Board of Directors of Seller approving
and authorizing the transactions contemplated hereby;
(j) A certificate of the Chief Executive Officer and Chief Financial
Officer of Seller as to the accuracy in all material respects of
the representations and warranties of the Seller herein as of
such Closing Date and as to the performance in all material
respects by the Seller all its obligations hereunder to be
performed at or prior to such Closing Date;
(k) The written consent or the approval of the Office of Thrift
Supervision to the transaction; and
(l) Such other documents as are necessary to effect the transactions
contemplated hereby as Purchaser shall reasonably request.
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SECTION 5.3. PURCHASER'S DELIVERIES.
----------------------
On or before the Closing Date, Purchaser shall deliver to Seller:
(a) The Assignment and Assumption Agreement, executed in counterparts
by Purchaser;
(b) Subject to Section 11.6 hereof, Purchaser's acceptance of its
appointment as of the close of business on the Closing Date as
successor trustee or custodian, as applicable, of the XXX deposit
accounts included in the Deposit Liabilities and its assumption
of the fiduciary obligations of the trustee or custodian with
respect thereto;
(c) A certificate of the Secretary of Purchaser certifying to the
resolutions adopted by the Board of Directors of Purchaser
approving and authorizing the transactions contemplated hereby;
(d) A certificate of the Chief Executive Officer and Chief Financial
Officer of Purchaser as to the accuracy in all material respects
of the representations and warranties of the Purchaser herein as
of such Closing Date and as to the performance in all material
respects by the Purchaser all its obligations hereunder to be
performed at or prior to such Closing Date;
(e) The written consent or the approval of the Office of Thrift
Supervision to the transaction; and
(f) Such other documents as are necessary to effect the transactions
contemplated hereby as Seller shall reasonably request.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Purchaser as follows:
SECTION 6.1. ORGANIZATION.
-------------
Seller is a federal savings bank duly organized, and validly existing
under the laws of the United States of America with full power and authority to
carry on its business as now being conducted and to accept and maintain the
Deposit Liabilities and to transfer the Purchased Assets and Assumed Liabilities
to Purchaser.
SECTION 6.2. AUTHORITY.
---------
Seller has the power and authority to enter into and perform this
Agreement and any instruments or other documents executed pursuant hereto. This
Agreement and any other documents or instruments executed pursuant hereto, and
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the execution, delivery and performance hereof and thereof have been duly
authorized and approved by all necessary corporate action on the part of Seller,
and this Agreement and the instruments and documents executed pursuant hereto
constitute, or when executed will constitute, the valid and binding obligations
of Seller, enforceable against Seller in accordance with their terms, except as
enforcement may be limited by receivership, conservatorship and supervisory
powers of bank regulatory agencies generally as well as by bankruptcy,
insolvency, reorganization, moratorium or other laws of general applicability
relating to or affecting creditors' rights, or the limiting effect of rules of
law governing specific performance, equitable relief and other equitable
remedies or the waiver of rights or remedies.
SECTION 6.3. NON-CONTRAVENTION.
-----------------
The execution and delivery of this Agreement and the instruments and
documents executed pursuant hereto by Seller do not and, subject to the receipt
of all Regulatory Approvals and consents, the consummation of the transactions
contemplated by this Agreement will not constitute (a) a material breach or
violation of or default under any law, rule, regulation, judgment, order,
governmental permit or license of Seller or to which Seller is subject, or (b) a
breach or violation of or a default under the organization certificate or bylaws
of Seller or, to the Knowledge of Seller, any material contract to which Seller
is a party or by which it is bound, which breach, violation or default would be
likely to prevent or materially delay Seller from being able to perform its
obligations under this Agreement in all material respects.
SECTION 6.4. COMPLIANCE WITH LAW.
-------------------
Seller's business with respect to the Branches, Purchased Assets and
Assumed Liabilities is currently being conducted in accordance with all
applicable material federal, state, and local laws, ordinances, statutes and
codes, rules and regulations, orders, permits and judgments (collectively, the
"Laws") of all governmental and regulatory authorities. Seller has all licenses,
franchises, permits and other governmental authorizations that are legally
required to conduct is business at the Branches.
SECTION 6.5. LEGAL PROCEEDINGS.
-----------------
There are no actions, suits, or proceedings, whether civil, criminal or
administrative, pending or, to the Knowledge of Seller threatened, as of the
date of this Agreement against or affecting Seller which: (i) could reasonably
be deemed to have the effect of preventing or materially delaying Seller from
performing its obligations under this Agreement in all material respects; or
(ii) taken alone or in the aggregate could materially adversely affect any of
the Purchased Assets or Assumed Liability.
SECTION 6.6. CONDITION OF AND TITLE TO PURCHASED ASSETS.
------------------------------------------
The Fixed Assets and Real Property to be purchased by Purchaser
hereunder are sold AS IS, WHERE IS, with no warranties or representations
whatsoever, except as expressly represented or warranted in this Agreement.
Seller is the lawful owner of each of the Purchased Assets and has the right to
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sell, convey, transfer, assign and deliver to Purchaser all of the Purchased
Assets, free and clear of all liens, claims and encumbrances, except as they may
have been affected by transactions in the ordinary course of Purchaser's
business and which would not materially detract from their value or interfere
with their use as they are currently used, and except for (a) liens for taxes,
assessments or other governmental charges not yet delinquent or being contested
in good faith by appropriate proceedings; and (b) such minor imperfections of
title and minor easements, defects, exceptions and encumbrances, if any, as do
not materially detract from the value of, or materially interfere with the
current use of such property, and which imperfections of title, minor easements,
defects, exceptions and encumbrances do not render such title unmarketable. As
to the Real Property, Seller is the owner of a fee simple interest in the Real
Property and has good and marketable title to the Real Property free and clear
of any encumbrances.
SECTION 6.7. NO BROKER.
---------
No broker or finder, or other party or agent performing similar
functions, has been retained by Seller or its Affiliates or is entitled to be
paid based on any arrangements, agreements or understandings made by Seller or
its Affiliates in connection with the transactions contemplated hereby, and no
brokerage fee or other commission has been agreed to be paid by Seller or its
Affiliates on account of such transactions.
SECTION 6.8. DEPOSIT LIABILITIES.
-------------------
All of the Deposit Liabilities were originated and maintained and are
in material compliance with the documents governing the relevant type of deposit
account and with all applicable federal and state laws, rules, regulations,
orders, judgments, injunctions, decrees and awards. None of the Deposit
Liabilities are brokered deposits. Seller has properly accrued interest on the
Deposit Liabilities and the records respecting the Deposit Liabilities
accurately reflect such interest accrued. Seller has delivered to Purchaser a
true and correct copy of the current account forms for each of the types of
Deposit Liabilities offered by Seller out of the Branches.
SECTION 6.9. ASSUMED LIABILITIES.
-------------------
The Deposit Liabilities to be assumed by the Purchaser are insured by
the FDIC through the Deposit Insurance Fund to the extent permitted by law, and
all premiums and assessments required to be paid as of the date hereof in
connection therewith have been paid by Seller.
SECTION 6.10. REGULATORY MATTERS.
------------------
(a) The execution, delivery and performance of this Agreement and the
other agreements to be entered into in connection herewith by
Seller do not and will not require any consent, approval,
authorization or other order of, action by, filing or
registration with or notification to any governmental authority
except as set forth on Schedule 6.10(a) hereto.
----------------
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(b) There are no pending, or to the Knowledge of Seller, threatened
disputes or controversies between Seller and any federal, state
or local governmental authority that would reasonably be expected
to prevent or materially delay Seller from being able to perform
its respective obligations under this Agreement, or would
reasonably be expected to impair the validity or consummation of
this Agreement or the transactions contemplated hereby. Seller
has not received any indication from any governmental authority
that such governmental authority would oppose or refuse to grant
or issue its consent or approval, if required, with respect to
the transactions contemplated hereby. As of the date hereof,
Seller has no reason to believe that it will not be able to
obtain the consent, of any, or approval required by Section 5.2
of this Agreement.
SECTION 6.11. ACCURACY OF BOOKS AND RECORDS.
-----------------------------
To the knowledge of Seller, the books and records relating to the
Branches, the Purchased Assets and the Assumed Liabilities are true and accurate
in all respects and have been maintained in accordance with GAAP.
SECTION 6.12. ENVIRONMENTAL MATTERS.
---------------------
Except as set forth in Schedule 6.12, there is no legal,
administrative, arbitral or other proceeding, claim, action, cause of action or
governmental investigation pending or, to the Knowledge of Seller, threatened
which seeks to impose on Seller or ay predecessor of Seller in connection with
the Branches any liability arising under any Environmental Laws (as hereinafter
defined), nor is there, to the Knowledge of the Seller, any basis for any of the
foregoing. Seller is not subject to any agreement, order, judgment, decree or
memorandum by or with any court, governmental authority, regulatory agency or
third party imposing any such liability with respect to the Branches. To the
Knowledge of Seller, there are no environmental conditions such as above ground
or under ground storage tanks, discharges or emissions or releases of Hazardous
Materials (as hereinafter defined), which constitute a violation of any
Environmental Laws present at, on, under, or above the Branches. As used herein
the term "Environmental Laws" means any laws (including, without limitation, the
------------------
Comprehensive Environmental Response, Compensation and Liability Act), including
any plans, other criteria, or guidelines promulgated pursuant to such laws, nor
or hereafter in effect relating to the generation, production, installation,
use, storage, treatment, transportation, release, threatened release, or
disposal of Hazardous Materials. As used herein, the term "Hazardous Materials"
-------------------
means any wastes, substances, radiation, or materials (whether solids, liquids
or gases): (i) which are hazardous, toxic, infectious, explosive, radioactive,
carcinogenic, or mutagenic; and (ii) which are defined as "pollutants,"
"contaminants," "hazardous materials," "hazardous wastes," "hazardous
substances," "toxic substances," "radioactive materials," "solid wastes," or
other similar designations in, or otherwise subject to regulations under, any
Environmental Laws.
SECTION 6.13. EMPLOYEE MATTERS.
----------------
The names, positions, dates of hire and current salary levels of the
current personnel and the Branches are set forth in Schedule 6.13. There are no
employment contracts between Seller and any of the employees of the Branches.
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Seller is not a party to any contract or arrangement with any union relating to
the business conducted at the Branches, and Seller is not aware of any pending
organizational efforts at the Branches. To the best of Seller's Knowledge, there
has been no indication to Seller that a union organizational effort or labor
disturbance is likely at the Branches prior to the Closing Date.
SECTION 6.14. NO OTHER NEGOTIATIONS.
---------------------
As of the date of this Agreement, Seller is not in any discussions or
negotiations, or otherwise communicating in any way with any person (other than
Purchaser), regarding the purchase, assumption or sale of any deposit
liabilities.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser represents and warrants to Seller as follows:
SECTION 7.1. ORGANIZATION.
------------
Purchaser is a federal savings bank duly organized and validly existing
under the laws of the United States of America with full power and authority to
conduct a banking business as now conducted by it and to acquire the Purchased
Assets and assume the Assumed Liabilities.
SECTION 7.2. AUTHORITY.
---------
Purchaser has the power and authority to enter into and perform this
Agreement and any instruments or other documents executed pursuant hereto. This
Agreement and any other documents or instruments executed pursuant hereto, and
the execution, delivery and performance hereof and thereof have been duly
authorized and approved by all necessary corporate action on the part of
Purchaser, and this Agreement and the instruments and documents executed
pursuant hereto constitute, or when executed will constitute, the valid and
binding obligations of Purchaser, enforceable against Purchaser in accordance
with their terms, except as enforcement may be limited by receivership,
conservatorship and supervisory powers of bank regulatory agencies generally as
well as by bankruptcy, insolvency, reorganization, moratorium or other laws of
general applicability relating to or affecting creditors' rights, or the
limiting effect of rules of law governing specific performance, equitable relief
and other equitable remedies or the waiver of rights or remedies.
SECTION 7.3. NON-CONTRAVENTION.
-----------------
The execution and delivery of this Agreement and the instruments and
documents executed pursuant hereto by Purchaser do not and, subject to the
receipt of all Regulatory Approvals and consents, the consummation of the
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transactions contemplated by this Agreement will not constitute (a) a material
breach or violation of or default under any law, rule, regulation, judgment,
order, governmental permit or license of Purchaser or to which Purchaser is
subject, or (b) a breach or violation of or a default under the organization
certificate or bylaws of Purchaser or, to the Knowledge of Purchaser, any
material contract to which Purchaser is a party or by which it is bound, which
breach, violation or default would be likely to prevent or materially delay
Purchaser from being able to perform its obligations under this Agreement in all
material respects.
SECTION 7.4. LEGAL PROCEEDINGS.
-----------------
There are no actions, suits, or proceedings, whether civil, criminal or
administrative, pending or, to the Knowledge of Purchaser threatened as of the
date of this Agreement against or affecting Purchaser which could reasonably be
deemed to have the effect of preventing or materially delaying Purchaser from
performing its obligations under this Agreement in all material respects.
SECTION 7.5. REGULATORY MATTERS.
------------------
(a) The execution, delivery and performance of this Agreement and the
other agreements to be entered into in connection herewith by
Purchaser do not and will not require any Regulatory Approvals
except as set forth on Schedule 6.10(a) hereto.
----------------
(b) There are no pending, or to the Knowledge of Purchaser,
threatened disputes or controversies between Purchaser and any
federal, state or local governmental authority that would
reasonably be expected to prevent or materially delay Purchaser
from being able to perform its respective obligations under this
Agreement, or would reasonably be expected to impair the validity
or consummation of this Agreement or the transactions
contemplated hereby. Purchaser has not received any indication
from any governmental authority that such governmental authority
would oppose or refuse to grant or issue its consent or approval,
if required, with respect to the transactions contemplated
hereby. Purchaser believes that it can satisfy all capital and
other regulatory requirements necessary to obtain all Regulatory
Approvals.
(c) The deposits of Purchaser are insured by the FDIC through the
Deposit Insurance Fund to the extent permitted by law, and all
premiums and assessments required to be paid as of the date
hereof in connection therewith have been paid by Purchaser.
(d) Purchaser is in compliance with all applicable regulatory capital
standards as of the date hereof and has no reason to believe that
it will be unable to obtain the required regulatory approvals for
the transactions contemplated herein.
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SECTION 7.6. CAPITAL AVAILABLE.
-----------------
Purchaser has sufficient capital to support the acquisition of the
Purchased Assets and the assumption of the Assumed Liabilities and to perform
Purchaser's other obligations hereunder and under any of the other documents
executed in connection herewith and Purchaser's ability to purchase the
Purchased Assets and to assume the Assumed Liabilities and to perform
Purchaser's other obligations hereunder is not contingent on raising any equity
capital, obtaining specific financing thereof, or obtaining the consent of any
lender.
SECTION 7.7. NO BROKER.
---------
No broker or finder, or other party or agent performing similar
functions, has been retained by Purchaser or its Affiliates or is entitled to be
paid based on any arrangements, agreements or understandings made by Purchaser
or its Affiliates in connection with the transactions contemplated hereby, and
no brokerage fee or other commission has been agreed to be paid by Purchaser or
its Affiliates on account of such transactions.
SECTION 7.8. NO OTHER NEGOTIATIONS.
---------------------
As of the date of this Agreement, Purchaser is not in any discussions
or negotiations, or otherwise communicating in any way with any person (other
than Seller), regarding the purchase, assumption or sale of any deposit
liabilities.
ARTICLE VIII
COVENANTS OF SELLER
Seller covenants and agrees with Purchaser as follows:
SECTION 8.1. CONDUCT OF THE SELLER'S BUSINESS.
--------------------------------
(a) From the date hereof through the Closing Date, Seller shall (i)
conduct its business with respect to the Branches and the Deposit
Liabilities in the usual, regular and ordinary course consistent
with Law and past practice, (ii) use commercially reasonable
efforts to maintain and preserve intact its relationships
generally with its Customers and (iii) take all commercially
reasonable actions to maintain the Branches and property in the
condition it existed in at the date of this Agreement, normal
wear and tear excepted; provided, however, that Seller shall be
under no obligation to advertise or promote new or substantially
new customer services in the principal market area of, or for the
benefit of, the Branches; provided, further, that Seller shall
pay interest on the Deposit Liabilities at rates which are
determined in the ordinary course of business consistent with
Seller's past practices.
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(b) Except as may be required by regulatory authorities, Seller shall
not, without the prior consent of Purchaser: (i) transfer to
Seller's other branches any Deposit Liabilities at the Branches
(or transfer deposits to the Branches from any other of Seller's
branches) except upon the unsolicited request of a depositor in
the ordinary course of business; (ii) transfer, assign, encumber
or otherwise dispose of or enter into any contract, agreement or
understanding, or negotiate with any party with respect to
entering into a contract, agreement or understanding, to
transfer, assign, encumber or otherwise dispose of any or all of
the Deposit Liabilities except in the ordinary course of business
or pursuant to this Agreement; (iii) offer to pay or pay on any
Deposit Liabilities at the Branches any rate that would deviate
materially from Seller's historical pricing practices and which
is higher than that generally offered by Seller on similar
products at other offices of Seller; or (iv) reduce fees on
deposit accounts at the Branch below fees charged on similar
deposit products at other offices of Seller.
(c) Between the date hereof and the Closing Date, Seller shall
promptly advise Purchaser in writing of any fact that, if
existing or known as of the date hereof, would have made any of
the representations contained herein inaccurate or untrue in any
material respect.
SECTION 8.2. REGULATORY APPROVALS AND CONSENTS.
---------------------------------
Seller shall use its commercially reasonable efforts to assist
Purchaser in obtaining the Regulatory Approvals. Seller shall provide Purchaser
or the appropriate governmental authorities with all information reasonably
required to be submitted by Seller in connection with the Regulatory Approvals.
Seller shall use its commercially reasonable best efforts to obtain from third
parties the consents required by Section 5.2(d) herein.
SECTION 8.3. TRANSFER OF DATA.
----------------
Seller acknowledges that Purchaser will utilize electronic records to
convert all of the account data regarding the Deposit Liabilities. Seller will
use its commercially reasonable efforts to provide Purchaser with a file that
contains electronic records in a format that may be utilized in an automated
process that opens the accounts on the Purchaser's system (the "Electronic
Records"). From the date hereof through the Closing Date, Seller shall cooperate
and work with Purchaser to complete the tasks required to facilitate the
conversion of the Deposit Liabilities. Such tasks include, but are not limited
to, providing Purchaser with updated reports and other items as are necessary to
complete the conversion process and related testing procedures. Seller shall
provide at Purchaser's expense (i) a written report to Purchaser, in a format
reasonably acceptable to Purchaser, detailing account data regarding the Deposit
Liabilities on the Closing Date; and (ii) within thirty (30) calendar days from
the date hereof, Seller shall provide Purchaser with initial reports and related
documentation of the Deposit Liabilities in a format reasonably acceptable to
Purchaser. Seller agrees to reasonably cooperate in resolving any
conversion-related issues arising from the conversion of the Deposit Liabilities
for a period of ninety (120) calendar days following the date that the
conversion is completed.
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SECTION 8.4. FORMS.
-----
No later than the date of this Agreement, Seller will have provided
Purchaser with copies of the forms of signature cards, deposit account forms,
Regulation E disclosures, Truth-in-Savings disclosures, deposit account
agreements, and XXX trust agreements and beneficiary designations, as well as
the forms of any other instruments or agreements presently in use at the Branch
in connection with the Deposit Liabilities. In addition, Seller shall provide
Purchaser with copies of its policies relating to each account type, including
but not limited to Bank Secrecy Act policies and Customer Identification
Policies. For purposes of this paragraph, all referenced documents shall be the
forms used by Seller as of the date of this Agreement for new customers.
Completed and executed forms of such documents for each respective depositor
maintaining an account included within the Deposit Liabilities shall be provided
to Purchaser on the Closing Date.
SECTION 8.5. INTEREST INFORMATION.
---------------------
Seller hereby covenants and agrees that within thirty (30) days of the
Closing Date, it will provide Purchaser with a report of all interest credited
to, interest withheld from, and early withdrawal penalties charged to the
Deposit Liabilities from the first day of the calendar year of closing through
the Closing Date. Such report will be provided in a form reasonably acceptable
to Purchaser that will enable Purchaser to issue the reports required to be
furnished to depositors under Section 13.1 of this Agreement.
SECTION 8.6. NON-SOLICITATION.
----------------
(a) For a period of two(2) years following the Closing Date, Seller
shall not solicit by direct mail or telephone the deposits of any
person who on the Closing Date had a deposit account with Seller
solely at the Branches; provided, however, that the foregoing
shall not limit the right of Seller to advertise or solicit for
banking business from the public generally.
(b) For a period of two (2) years commencing as of the Closing Date,
neither Seller nor any Affiliate shall establish a de novo branch
office or purchase or acquire a branch office from another
depository institution or financial institution for the purpose
of accepting or soliciting any deposits within the area covered
by Baltimore County, Baltimore City and Xxxxxx County which is
west of the black line (from Baltimore to Hampstead) set forth on
Exhibit E, except in the case of the Xxxxxxxx Branch in Baltimore
City where the radius will be one and one-half (1 1/2 ) miles
surrounding the Xxxxxxxx Branch (the "Protected Area"). Nothing
--------------
in this Section 8.6(b), however, shall prevent the acquisition of
Seller by a depository institution or financial institution (or
its holding company) having a branch facility then operating
under its separate name within the Protected Area, or the
acquisition by Seller of a depository institution or financial
institution (or its holding company) having a branch facility
then operating under its separate name within the Protected Area.
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SECTION 8.7. FURTHER ASSURANCES.
------------------
On and after the Closing Date, Seller shall give such further
assistance to Purchaser and, upon Purchaser's request, shall execute,
acknowledge and deliver all such acknowledgments and other instruments and take
such further action as may be necessary and appropriate to effectively transfer
the Branches, the Purchased Assets and the Deposit Liabilities to Purchaser.
ARTICLE IX
COVENANTS OF PURCHASER
Purchaser covenants and agrees with Seller as follows:
SECTION 9.1. REGULATORY APPROVALS.
--------------------
Purchaser will use its commercially reasonable efforts to obtain as
expeditiously as possible the Regulatory Approvals and will use its commercially
reasonable efforts to file within thirty (30) calendar days, after the execution
of this Agreement all necessary applications of Purchaser to obtain the
Regulatory Approvals. Purchaser will use its best efforts to supply to Seller,
at least five (5) Business Days prior to filing, copies of all proposed
regulatory applications and filings (other than confidential portions thereof)
and will use reasonable efforts to reflect any comments of Seller in such
filings. As of the Closing Date, Purchaser will satisfy any and all of the
standards and requirements reasonably within its control imposed as a condition
to obtaining or necessary to comply with the Regulatory Approvals. Purchaser
shall pay any fees charged by any governmental authorities to which it must
apply to obtain any of the Regulatory Approvals. Purchaser shall take no action
which would adversely affect or delay the ability of any other party hereto to
obtain any Regulatory Approval or to perform its covenants and agreements under
this Agreement. Purchaser shall notify Seller promptly (and in no event later
than one Business Day following notice) of any significant development with
respect to any application or notice Purchaser files with any governmental
authority in connection with the transactions contemplated by this Agreement.
Between the date hereof and the Closing Date, Seller shall promptly
advise Purchaser in writing of any fact that, if existing or known as of the
date hereof, would have made any of the representations contained herein
inaccurate or untrue in any material respect.
SECTION 9.2. SOLICITATION OF ACCOUNTS.
------------------------
Prior to the Closing Date, neither Purchaser nor any of its Affiliates
shall solicit Customers through advertising specifically referencing or targeted
to such Customers nor transact their respective businesses in such a way which
is reasonably likely to (a) induce such Customers to close Deposit Liability
accounts and open deposit accounts directly with Purchaser or any of its
Affiliates, or (b) result in the transfer of all or a portion of an existing
Liability from Seller.
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SECTION 9.3. RECORDING OF INSTRUMENTS OF ASSIGNMENT.
--------------------------------------
No later than six months following the Closing Date, Purchaser shall
have recorded all other instruments required, necessary or reasonably desirable
to evidence the acquisition, assignment and assumption of the Purchased Assets
and the Assumed Liabilities.
SECTION 9.4. OTHER TRANSACTIONS.
------------------
From the date of this Agreement until the earlier of the Closing Date
or the date of termination of this Agreement, Purchaser covenants and agrees
that it shall not take any action which would materially adversely affect or
delay the consummation of the transactions contemplated by this Agreement.
SECTION 9.5. FURTHER ASSURANCES.
------------------
On and after the Closing Date, Purchaser shall give such further
assurances to Seller and upon Seller's request shall execute, acknowledge and
deliver all such acknowledgments and other instruments and take such further
action as may be necessary and appropriate to effectively relieve and discharge
Seller from any obligations remaining with respect to the Branches, Purchased
Assets and Deposit Liabilities assumed by Purchaser.
ARTICLE X
ACCESS; AND CUSTOMER COMMUNICATIONS
SECTION 10.1. ACCESS BY PURCHASER.
-------------------
Upon execution of this Agreement, Seller shall provide Purchaser and
its representatives, accountants and counsel reasonable access during normal
business hours and upon reasonable notice to Seller to the depository records
and all other documents and other information concerning the Purchased Assets
and the Assumed Liabilities as Purchaser may reasonably request. Notwithstanding
the foregoing, in no event shall Seller be required to provide (a) any
information which Seller, in its sole discretion deems proprietary, including
without limitation, Seller's "credit scoring" system, branch or credit
practices, policies or procedures, or staffing models, (b) any information,
which is protected by attorney-client privilege, or (c) its or any of its
Affiliates' tax returns.
SECTION 10.2. COMMUNICATIONS WITH CUSTOMERS.
-----------------------------
(a) Following the Final Approval Date, Purchaser shall send
statements to the Customers announcing the transactions
contemplated hereby (such statements being herein called
"Customer Notices"). The form and content of each Customer Notice
----------------
shall be subject to the approval of both parties and the cost of
printing and mailing the Customer Notices shall be borne solely
by Purchaser. Following the Final Approval Date, Purchaser shall
also be entitled to provide solely at its own expense such other
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notices or communications to Customers relating to the
transactions contemplated hereby as may be required by law;
provided that the text of any such notice or communication and
the timing of such notice or communication which is provided
prior to the Closing shall be approved in advance by Seller,
which approval shall not unreasonably be withheld or delayed. The
cost of any notices required to be published or given to
customers by Seller shall be borne solely by Seller.
(b) Except as specifically provided herein, in no event will
Purchaser or its Affiliates contact any Customers prior to the
Final Approval Date without the prior written consent of Seller
which may be granted or withheld in its sole discretion; provided
that Purchaser may contact Customers in connection with (i)
advertising, solicitations or marketing campaigns not primarily
directed to or targeted at Customers, (ii) lending, deposit, safe
deposit, trust or other financial services relationships of
Purchaser with Customers through branch offices of Purchaser
existing as of the date hereof, (iii) unsolicited inquiries by
Customers to Purchaser with respect to banking or other financial
services provided by Purchaser, and (iv) notices or
communications relating to the transactions contemplated hereby
in accordance with the provisions hereof.
SECTION 10.3. INSPECTION OF REAL PROPERTY.
---------------------------
Seller shall permit Purchaser to inspect and review, solely at
Purchaser's expense, the physical condition of the Real Property. Purchaser may
obtain at Purchaser's expense, a Phase I or Phase II environmental assessment.
Purchaser shall promptly give to Seller a copy of any environmental report
resulting from the assessment. Further, Purchaser shall give Seller written
notice within thirty (30) days after the date of this Agreement of any
environmental condition(s) that Purchaser reasonably deems unacceptable. Seller
may either elect to cure such condition(s) to the reasonable satisfaction of
Purchaser or notify Purchaser in writing with fifteen (15) days after receipt of
Purchaser's timely notice of Seller's election not to cure the same. If Seller
elects not to cure, Purchaser may elect to terminate this Agreement by providing
written notice of termination to Seller within three (3) business days of the
receipt of Seller's notice. Purchaser's failure to deliver any notice required
hereby on a timely basis shall constitute a waiver of any objections Purchaser
may have had with respect to the condition of the Real Property. Purchaser shall
provide reasonable notice and coordinate all inspections with Seller and shall
indemnify and hold Seller harmless from any and all liability arising out of
Purchaser's inspection or testing of the Real Property including but not limited
to personal injury, death, loss, or consequential damage of any kind arising
from Purchaser or Purchaser's agent's presence on the Real Property. In the
event Purchaser wishes to conduct any test or studies on the Real Property it
shall provide Seller with proof of insurance against such liability as described
in this paragraph in an amount acceptable to Seller and naming Seller as an
additional loss payee on such policy. Purchaser shall further cause any physical
damage to the Real Property caused by such inspections to be fully repaired and
the Real Property left in the same condition as prior to the inspections.
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SECTION 10.4. REAL PROPERTY, TITLE AND SURVEYS.
--------------------------------
(a) At least thirty (30) calendar days prior to the Closing Date,
Seller shall deliver to Purchaser a copy of the deed which it
shall deliver on the Closing Date which shall be a general
warranty deed. Seller will convey good and marketable title to
the Real Property to Purchaser, subject to Permitted Exceptions
(as hereinafter defined).
(b) Not more than thirty (30) calendar days after the date hereof,
Purchaser shall deliver to Seller, at Purchaser's expense , a
Commitment from an ALTA Owner's Form B Title Insurance Policy
(the "Title Policy") issued by a title insurer reasonably
------------
approved by Purchaser (the "Title Insurer"), with respect to the
-------------
Real Property and designating Purchaser as the proposed insured
(the "Title Commitment"). The Title Commitment shall be subject
----------------
only to Permitted Exceptions. For purposes of the Title
Commitment, "Permitted Exceptions" shall mean any exceptions
--------------------
shown on the Title Commitment to which Purchaser does not object
in writing within ten (10) Business Days of its receipt of the
Title Commitment. If the Title Commitment delivered pursuant to
this Section 10.4 discloses title exceptions other than Permitted
Exceptions, Seller shall have thirty (30) calendar days from the
date of receipt of notice thereof (and the parties shall postpone
the Closing Date, if necessary to enable Seller to undertake such
activities) to have such exceptions cleared, or to have the Title
Insurer commit to insure against loss or damage that may be
occasioned by such exceptions by an endorsement in form and
substance satisfactory to Purchaser. If the exceptions are not
removed or endorsements over the exceptions are not obtained,
Purchaser, upon notice to Seller within fifteen (15) calendar
days after the expiration of the 30-day cure period, may elect
(i) to terminate this Agreement in which case this Agreement
shall be null and void and the parties shall be under no
obligation to each other; or (ii) Purchaser may elect to take
title notwithstanding the exception and such exception shall be
deemed a Permitted Exception.
(c) Not more than thirty (30) calendar days after the date hereof,
Purchaser shall deliver to Seller, at Purchaser's expense, a
current survey of the Real Property (the "Survey"), which current
------
survey (i) shall include easements, if any, that are for the
benefit of all or any portion of the Real Property; (ii) shall be
dated on or after the date hereof; (iii) shall be prepared and
certified to Purchaser, the Title Insurer and such other persons
as Purchaser shall reasonably request by a registered Maryland
land surveyor as having been prepared in accordance with the
current Minimum Standard Detail Requirements for ALTA/ACSM Land
Surveys as adopted by the American Land Title Association and
American Congress on Surveying and Mapping for Class A-Urban
Surveys; and (iv) shall confirm that the Real Property is in a
Zone C-Area of Minimal Flood Hazard according to the Flood
Insurance Rate Maps prepared by the Federal Emergency Management
Agency.
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ARTICLE XI
TRANSITIONAL MATTERS
SECTION 11.1. PAYMENT OF DEPOSIT LIABILITIES.
------------------------------
(a) From and after the Closing Date, Purchaser shall (i) pay all
properly drawn and presented checks, negotiable orders of
withdrawal, drafts, debits and other withdrawal orders presented
to Purchaser by Deposit Liability account customers, whether
drawn on checks, negotiable orders of withdrawal, drafts, or
other withdrawal order forms provided by Seller or by Purchaser
and (ii) in all other respects discharge, in the usual course of
the banking business, all of the duties and obligations of Seller
with respect to the balances due and owing to the Customers who
have Deposit Liability accounts. If any Customer who has a
Deposit Liability account draws checks, drafts, or negotiable
orders of withdrawal against the Deposit Liabilities which are
presented or delivered to Seller not later than sixty (60)
calendar days after the Closing Date, Seller shall use its
commercially reasonable efforts to batch all such checks, drafts,
negotiable orders of withdrawal, or other withdrawal order forms
and to deliver the same to Purchaser at Purchaser's sole
reasonable expense. Purchaser acknowledges that any delay,
failure, or inability on its part to comply with the obligations
imposed upon it as a depository institution under applicable
federal or state law, with regard to such checks, drafts,
negotiable orders of withdrawal or other withdrawal orders shall
not result in any liability or obligation of Seller and shall not
affect any of the rights of Seller under this Agreement. Seller
shall not be deemed to have made any representations or
warranties to Purchaser with respect to any such checks, drafts,
negotiable orders of withdrawal or other withdrawal orders and
any such representations or warranties implied by law are hereby
disclaimed and are the responsibility of Purchaser, except that
Seller shall be chargeable with the warranties and
representations implied by law with respect to any such check,
draft, negotiable orders of withdrawal order, or other withdrawal
order, which is paid by Seller over the counter.
(b) Purchaser hereby acknowledges that if, after the Closing Date,
any Customer who has a Deposit Liability account, instead of
accepting the obligation of Purchaser to pay the Deposit
Liabilities (including Accrued Interest thereon) shall demand
payment from Seller for all or any part of any such Deposit
Liabilities (including Accrued Interest thereon), Seller shall
not be liable or responsible for making such payment.
(c) It is Seller's intent to act in a commercially reasonable manner
to ensure that all Deposit Liability transactions will be
referred to Purchaser; provided however that, if, after the
Closing Date, Seller honors and pays any Deposit Liabilities
which are presented to Seller for payment, or pays any check,
draft, negotiable order of withdrawal or other withdrawal order,
Purchaser shall upon demand by Seller reimburse Seller for such
payment; provided, however, that Seller shall reimburse Purchaser
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for any payments made by Purchaser to Seller under this Section
11.1(c) as a result of Seller honoring and paying a fraudulent
check, draft, negotiable order of withdrawal or other withdrawal
order. Any payment made under this Section 11.1 shall be made
within three (3) Business Days after demand by Seller, by wire
transfer of immediately available funds to an account designated
by Seller.
(d) Seller will deliver to Purchaser at Closing a schedule of holds
and stop-payments placed on particular Deposit Liability accounts
or individual checks at the Branches and the terms of such holds.
Except as otherwise required by applicable law, Purchaser will
continue such holds and stop-payments under the same terms Seller
shows on the schedule of holds and stop-payments.
SECTION 11.2. NOTICE AND DELIVERY OF PURCHASER'S CHECK FORMS.
----------------------------------------------
Following the Final Approval Date, but not less than five (5) days
prior to the Closing Date, Purchaser shall, at its sole cost and expense, notify
all Customers who have a Liability account, in a form reasonably acceptable to
Seller, of Purchaser's assumption of the Deposit Liabilities (which shall
include a notification to those Liability account Customers whose accounts are
then covered by any type of overdraft protection offered by Seller, that from
and after the Closing Date all such overdraft protection from Seller shall
terminate) and furnish each such Customer with checks, deposit tickets, or other
similar instruments using the forms of Purchaser, which shall be appropriately
encoded with Purchaser's routing number and with accurate account numbers, and
with instructions to the Customer to utilize such checks, deposit tickets, or
other similar instruments on Purchaser's forms on and after the Closing Date and
thereafter to destroy any unused checks on Seller's forms. Such notice and such
delivery of checks by Purchaser shall be by first class U.S. mail. Within thirty
(30) calendar days after the execution of the Agreement, Seller will provide
Purchaser all necessary information for Purchaser to supply such checks, deposit
tickets or other similar instruments.
SECTION 11.3. UNCOLLECTED CHECKS RETURNED TO SELLER.
-------------------------------------
From and after the Closing Date, Purchaser shall promptly pay to Seller
an amount equivalent to the amount of any checks, negotiable orders of
withdrawal, drafts, or any other withdrawal orders (net of the applicable
deposit premium paid by Purchaser with respect to the Deposit Liabilities
represented by any such instrument) credited as of the close of business on the
Closing Date to any Deposit Liability accounts which are returned uncollected to
Seller after the Closing Date and which shall include an amount equivalent to
holds placed upon such Deposit Liability accounts for Items cashed by Seller
(net of the applicable deposit premium paid by Purchaser with respect to the
Deposit Liabilities represented by any such instrument), as of the close of
business on the Closing Date which Items are subsequently dishonored; provided,
however, that if Seller shall have failed to make or properly reflect in the
information provided to Purchaser any provisional credit or hold on any such
Liability accounts in respect of uncollected funds represented by any such item,
Purchaser's obligations under this Section 11.3 in respect of such Item shall be
limited to the amount of collected funds in such Liability accounts.
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SECTION 11.4. NEW ATM/DEBIT CARDS.
-------------------
Purchaser shall, following the Final Approval Date, but no later than
three (3) days prior to the Closing Date, furnish ATM/Debit cards to Customers
who have Liability accounts and Seller ATM/Debit cards to replace Seller's
ATM/Debit cards. Purchaser shall, no later than three (3) days prior to the
Transfer Date, notify affected Customers to destroy Seller's ATM/Debit cards as
of the Transfer Date and shall notify such Customers of Purchaser's withdrawal
limits immediately following the Closing by form of notice reasonably acceptable
to Seller.
SECTION 11.5. DEACTIVATION OF ATM AND ATM/DEBIT CARDS.
---------------------------------------
On the Transfer Date, Seller shall deactivate all ATM/Debit cards
issued with respect to all Deposit Liability accounts and shall electronically
block access of those cards to the Deposit Liability accounts, and shall
deactivate the ATM as promptly as possible following the Closing, but in no
event later than 8:00 a.m. on the day after the Closing Date. Point of sale
transactions shall be settled between Purchaser and Seller for a period of
forty-five (45) days after the Closing Date.
SECTION 11.6. ACTIONS WITH RESPECT TO XXX DEPOSIT LIABILITIES.
-----------------------------------------------
(a) On or before the Closing Date, except as otherwise provided in
this Section 11.6(a), Seller shall (i) resign as of the close of
business on the Closing Date as the trustee or custodian, as
applicable, of each XXX that holds any Deposit Liability of which
it is the trustee or custodian, (ii) to the extent permitted by
the documentation governing each such XXX and applicable law,
appoint Purchaser as successor trustee or custodian, as
applicable, of each such XXX, and Purchaser hereby accepts each
such trusteeship or custodianship under the terms and conditions
of Purchaser's plan documents for its XXX, and assumes all
fiduciary and custodial obligations with respect thereto as of
the close of business on the Closing Date, and (iii) deliver to
the XXX grantor or named fiduciary of each such XXX such notice
of the foregoing as is required by the documentation governing
each such XXX or applicable law. Purchaser shall be solely
responsible for delivering its XXX documents to the applicable
XXX grantor or named fiduciary, including but not limited to a
beneficiary designation form to be completed by the applicable
XXX grantor; provided, however, that in the event that an XXX
grantor dies before such time as Purchaser receives a properly
completed beneficiary designation form, Seller shall deliver to
Purchaser such information as may exist in Seller's files
regarding any beneficiary designation it may have regarding such
decedent. If, pursuant to the terms of the documentation
governing any such XXX or applicable law, (X) Seller is not
permitted to appoint Purchaser as successor trustee or custodian,
or the XXX grantor or named fiduciary objects in writing to such
designation, or is entitled to, and does, in fact, name a
successor trustee or custodian other than Purchaser, or (Y) such
XXX includes assets which are not Deposit Liabilities and are not
being transferred to Purchaser or the assumption of such Deposit
Liabilities included in such XXX would result in a loss of
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qualification of such XXX under the Code or applicable IRS
regulations, Seller shall not take the actions specified in the
first sentence of this Section 11.6(a) and all Deposit
Liabilities of Seller held under such XXX shall be excluded from
the Deposit Liabilities (such excluded Deposit Liabilities being
herein called the "Excluded XXX Deposits"). Upon appointment as a
---------------------
successor custodian for such XXX Deposit Liabilities or as a
successor trustee for such IRAs, Purchaser shall perform the
services and carry out the duties and obligations required of it
under the applicable plans, the Code and applicable Federal and
state laws and regulations.
(b) To the extent the Deposit Liabilities include certain IRAs that
are required to make certain periodic distributions to the XXX
account owner (or beneficiary) either at the account owner's or
participant's request or because the account owner or participant
has attained age 70-1/2, effective as of the Transfer Date,
Purchaser agrees to continue to make such periodic distributions
in accordance with the reasonable distribution instructions
forwarded by Seller to Purchaser. Purchaser hereby assumes the
obligation to pay each minimum distribution required by federal
law by December 31 of the calendar year in which the Closing
occurs and, in consideration thereof, Seller agrees not to
withhold the amount of such distributions from the aggregate
amount of the Deposit Liabilities.
(c) Prior to the Closing Date, Seller shall provide to Purchaser
copies of all plan documents and beneficiary designation forms in
Seller's possession with respect to the IRAs included in the
Deposit Liabilities.
SECTION 11.7. BULK TRANSFER LAWS.
------------------
Seller and Purchaser hereby waive compliance with any applicable bulk
transfer laws.
SECTION 11.8. PROCESSING OF ELECTRONIC ITEMS.
------------------------------
Seller will provide Purchaser, at least twenty (20) Business Days prior
to Closing Date, the list of Automated Clearing House ("ACH") entries for
electronic transfer accounts domiciled at the Branches. Purchaser shall continue
such ACH arrangements and such recurring debit arrangements as are originated
and administered by third parties and for which Purchaser need act only as
processor. Purchaser shall have no obligation to continue any such arrangements
that were originated and administered by Seller and Seller shall terminate such
arrangements on or prior to the Closing Date. Within five (5) days after the
Closing Date, Purchaser shall notify ACH originators with respect to Deposit
Liabilities to change the routing numbers and account numbers from those of
Seller to those of Purchaser. Seller will continue to accept and forward to
Purchaser ACH entries and corresponding funds and notifications of changes to
ACH originators for sixty (60) calendar days following Closing. Seller agrees
that any daily magnetic tapes or electronic transmissions provided to an agent
for processing designated by Purchaser shall include a record of all such
recurring ACH transfers received by Seller on the previous Business Day. After
the sixty (60) day period, Seller may discontinue accepting and forwarding ACH
entries and funds and return them to the originators marked "Account Closed."
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SECTION 11.9. ACCOUNT STATEMENTS.
------------------
Within thirty (30) calendar days after the Closing Date, Seller, at its
own expense, shall mail to each holder of a Deposit Liability a final account
statement as of the close of business on the Closing Date.
SECTION 11.10 LOAN PAYMENTS.
-------------
Purchaser will designate an area in each of the Branches designated
"Loan Payment for BCSB" and Purchaser will notify Seller on a daily basis via
email and/or telephone and forward on a weekly basis any loan payments received
by Purchaser at the Branches to Seller via regular mail; provided, however, that
failure of Purchaser to timely provide such notifications and deliveries shall
not constitute a breach of this Agreement by the Purchaser.
SECTION 11.11. ASSUMPTION OF RISKS.
-------------------
(a) On and after the Closing Date, Seller shall discontinue all
casualty, liability and other insurance coverage maintained with
respect to the Branches and the Purchased Assets. Purchaser shall
be solely responsible for all casualty losses and liability
claims relating to the Branches arising on and after the Closing
Date.
(b) On and after the Closing Date, Seller shall discontinue providing
any security for persons and property at the Branches. Purchaser
shall be solely responsible for all liabilities arising out of
injury or damage to persons and property on or at the Branches
and after the Closing Date.
(c) On and after the Closing Date, Purchaser shall maintain adequate
insurance with respect to the losses described in (a) and (b)
above and otherwise with respect to the operation of the
Branches.
ARTICLE XII
CONDITIONS TO CLOSING
SECTION 12.1. CONDITIONS TO OBLIGATIONS OF SELLER.
-----------------------------------
The obligations of Seller under this Agreement are subject to the
satisfaction (or, if applicable, waiver in the sole discretion of Seller, except
as to the condition described in Section 12.1(c) and Section 12.1(d)) on or
before the Closing Date, of each of the following conditions:
(a) All of the covenants and other agreements required by this
Agreement to be complied with and performed by Purchaser on or
before the Closing Date shall have been duly complied with and
performed in all material respects;
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(b) The representations and warranties made by Purchaser herein or in
any certificate or other document delivered pursuant to the
provisions hereof or in connection with the transactions
contemplated hereby shall be true and correct in all material
respects on and as of the Closing Date, with the same force and
effect as though such representations and warranties had been
made on the Closing Date, disregarding for these purposes any
qualification or exception for, or reference to, materiality in
any such representation or warranty;
(c) All Regulatory Approvals shall have been obtained and shall be
Final;
(d) No court or governmental or regulatory authority of competent
jurisdiction shall have enacted, issued, promulgated, enforced or
entered any statute, rule, regulation, judgment, decree,
injunction or other order (whether temporary, preliminary or
permanent) which is in effect to enjoin, or which prohibits,
consummation of the transactions contemplated hereby;
(e) Seller shall have received the items to be delivered by Purchaser
pursuant to Section 5.3; and
(f) Seller shall have obtained all consents required under Section
5.2(d) herein.
SECTION 12.2. CONDITIONS TO OBLIGATIONS OF PURCHASER.
--------------------------------------
The obligations of Purchaser under this Agreement are subject to the
satisfaction (or, if applicable, waiver in the sole discretion of Purchaser,
except as to the condition described in Section 12.2(c) and Section 12.2(d)) on
or before the Closing Date, of each of the following conditions:
(a) All of the covenants and agreements required by this Agreement to
be complied with and performed by Seller on or before the Closing
Date shall have been duly complied with and performed in all
material respects;
(b) The representations and warranties made by Seller herein or in
any certificate or other document delivered pursuant to the
provisions hereof or in connection with the transactions
contemplated hereby shall be true and correct in all material
respects on and as of the Closing Date, with the same force and
effect as though such representations and warranties had been
made on the Closing Date, disregarding for these purposes any
qualification or exception for, or reference to, materiality in
any such representation or warranty;
(c) The Regulatory Approvals shall have been obtained and shall be
Final;
(d) No court or governmental or regulatory authority of competent
jurisdiction shall have enacted, issued, promulgated, enforced or
entered any statute, rule, regulation, judgment decree,
injunction or other order (whether temporary, preliminary or
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permanent) which is in effect to enjoin, or which prohibits,
consummation of the transactions contemplated hereby; and
(e) Purchaser shall have received the items to be delivered by Seller
pursuant to Section 5.2.
ARTICLE XIII
DATA PROCESSING
SECTION 13.1. CONVERSION.
----------
Seller and Purchaser shall, before and after the Closing Date,
cooperate in good faith to ensure the orderly and efficient transfer and
conversion of the Purchased Assets and Assumed Liabilities as provided herein to
Purchaser's ownership and operation. The provisions of this Article shall apply
unless other provisions to accomplish the same results are agreed to by the
parties in order to reduce costs, increase efficiency or expedite operations.
(a) Electronic Records. Upon Purchaser's written request, Seller
------------------
will provide Purchaser with copies of the Electronic Records of
each Deposit Liability (each, an "Account").
(b) Statement of Accounts. Seller shall, at its sole expense,
---------------------
prepare and distribute all statements regarding the Accounts as
of the Closing Date. Seller shall be responsible for all accrued
interest and accrued fees on such Accounts as of the Closing Date
and shall prorate fees and charges on such Accounts as of the
Closing Date.
(c) Account Histories; Checks. Within ten (10) business days after
-------------------------
the Closing Date, Seller shall provide Purchaser with a copy of
all account histories at Seller's expense. For the purpose of
this Agreement, the term "Account Histories" means a copy of the
all statements in Seller's possession for the Deposit Liabilities
through the last statement that Seller cuts on the Closing Date
and a commercially reasonable complete history of IRA's.
(d) Payment Items. Purchaser shall establish a correspondent account
-------------
with Seller prior to the Closing. Then, for a period of
forty-five (45) days after the Closing Date, Seller shall forward
to Purchaser all items presented to Seller for payment against
the Accounts ("Payment Items") on the next business day after
such Payment Items are received. Seller will deduct payment for
these items from Purchaser's correspondent account held by
Seller. Seller shall notify Purchaser by noon each day of the
items presented to Seller for payment against the Accounts and
Purchaser shall wire funds sufficient to cover the items
presented to the Purchaser each day to the Purchaser
correspondent account held by Seller. Purchaser shall issue
Payment Items bearing Purchaser's routing transit and account
number to Account customers within ten (10) business days
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following the Closing Date. These items shall replace items
issued with Seller's identification on them. Seller shall have no
obligation to pay such Payment Items and Seller shall use its
commercially reasonable efforts not to return any Payment Item.
(e) Magnetic Tape. In the event Purchaser is unable to utilize the
-------------
Electronic Records to automate the account opening process on the
Purchaser's system, and upon Purchaser's written request, Seller
shall provide Purchaser with a magnetic tape of all Account
information. Seller will bear all costs associated with the
creation of the tape.
(f) Deposit Interest Reporting and Withholding. With respect to the
------------------------------------------
Deposit Liabilities assumed by Purchaser pursuant to this
Agreement, Purchaser shall be responsible for reporting to the
customer and to the IRS (and any state or local taxing authority
as required by law) all interest paid during the calendar year in
which the closing occurs. In order to assist Purchaser, Seller
will provide Purchaser at Settlement with a schedule identifying
each account that is a Deposit Liability and the interest accrued
on that account to the Closing Date. Any amounts required by any
governmental agencies to be withheld from any of the Accounts
through the Closing Date will be withheld by Seller in accordance
with applicable law or appropriate notice from any governmental
agency and will be remitted by Seller to the appropriate agency
on or prior to the applicable due date. Any such withholding
required to be made subsequent to the Closing Date shall be
withheld by Purchaser in accordance with applicable law or the
appropriate notice from any governmental agency and will be
remitted by Purchaser to the appropriate agency on or prior to
the applicable due date. Promptly after the Closing Date, but in
no event later than the date such amounts are required to be
remitted to the applicable governmental agency, Seller will pay
to Purchaser that portion of any sums theretofore withheld by
Seller from any of the Accounts which are or may be required to
be remitted by Purchaser pursuant to the foregoing and shall
directly remit to the applicable governmental agency that portion
of any such sums which are required to be remitted by Seller.
Seller shall be responsible for delivering to payees all IRS
notices received by Seller that are required to be delivered with
respect to the Accounts, and Purchaser shall be responsible for
delivery to payees all such notices received by Purchaser that
are required to be delivered with respect to the Accounts. Seller
shall deliver to Purchaser, on or before the Closing Date, a list
of all "B" notices (TINs do not match) and "C" notices
(underreporting/IRS imposed withholding) issued by the IRS
imposing withholding restrictions, relating to the Accounts.
Seller shall continue to provide Purchaser with notice of such
IRS notices it receives regarding Account customers for a period
of one hundred and twenty (120) days from the Closing Date. All
notices received by Seller from the IRS releasing withholding
restrictions on accounts will be forwarded promptly to Purchaser.
Seller agrees to indemnify Purchaser in an amount equal to any
penalty and interest imposed upon Purchaser by the IRS or state
taxing authority or properly self-assessed by Purchaser on IRS
Form 8210 or corresponding state form which Purchaser is
thereafter required to, and does, pay to the IRS or state taxing
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authority, where such penalty and interest arises out of actions
taken or omitted to be taken by Purchaser in reliance upon
information provided by Seller under this subsection (f), and
such penalty and interest does not result from an act or omission
of Purchaser not made in reliance upon such information.
(g) Returned Items. Any item credited for deposit to an Account on
--------------
or prior to the Closing Date and returned unpaid within sixty
(60) days after the Closing Date (each a "Returned Item") will be
handled as provided in this subsection (g). If Seller's bank
account is charged for the Returned Item and if there are
sufficient funds in the Account to which such Returned Item was
credited or any other Accounts on deposit at the Branch or
accounts at any other branch office of Purchaser standing in the
name of the party liable for such Returned Item, upon proper
identification of such party, Seller shall immediately notify
Purchaser and Purchaser will debit any or all such accounts in an
amount equal in the aggregate, net of any premium associated with
such Returned Item paid by Purchaser pursuant to Section 3.1, to
the Returned Item and shall repay that amount to Seller. Any
Returned Item returned unpaid after the 60-day period will be the
responsibility of the Purchaser, except that for "a period of
time" after the Closing Date, checks drawn on the United States
Treasury, checks issued by state governments and municipalities,
and checks returned for endorsement irregularities will be the
responsibility of Seller. "A period of time" as used in the
preceding sentence shall be the time period designated under
applicable state or federal law with respect to checks drawn on
the United States Treasury, checks issued by state governments
and municipalities, and checks returned for endorsement
irregularities, as the case may be.
(h) XXX Reporting. Unless applicable law requires Seller to perform
-------------
such reporting responsibility (in which case Seller will perform
these tasks), Purchaser shall prepare and file all required
annual reports for all activity under the XXX accounts
transferred to Purchaser, including but not limited to IRS Form
W-2P, IRS Form 1099R, IRS Form 5498, and state tax forms for the
portion of the year of the Closing Date, to and including the
Closing Date. Purchaser shall prepare and file such reports,
where applicable, for the balance of the calendar year of the
Closing Date and thereafter. It is further agreed that Purchaser
and Seller will each report their portion of withholding for the
XXX accounts to the appropriate state and federal agencies.
(i) Cooperation on Certain Tax Matters. After the Closing Date,
----------------------------------
Seller and Purchaser shall each use commercially reasonable
efforts to (a) assist (and cause their respective affiliates to
assist) the other party in preparing any tax returns that such
other party is responsible for preparing and filing in accordance
with this Agreement; (b) cooperate fully in preparing any audits
of or disputes with taxing authorities regarding any tax returns
with respect to the Deposit Liabilities or payments in respect
thereof; (c) make available to the other and to any taxing
authority as reasonably requested all relevant information,
records, and documents relating to taxes with respect to the
Deposit Liabilities or payments in respect thereof; (d) provide
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timely written notice to the other of any pending proposed tax
audits or assessments with respect to the Deposit Liabilities or
payments in respect thereto for taxable periods for which the
other may have liability under this Agreement; and (e) furnish
the other with copies of all relevant correspondence received
from any taxing authority in connections with any tax audit or
information request with respect to any taxable period referred
to in clause (d) above. Notwithstanding any other provision of
this Agreement, the party requesting assistance or cooperation
shall pay the other party's out-of-pocket expenses in complying
with such request to the extent that such expenses are
attributable to fees and other costs of unaffiliated third party
service providers.
ARTICLE XIV
INDEMNIFICATION
SECTION 14.1. SELLER INDEMNIFICATION.
----------------------
Seller shall indemnify, hold harmless and defend Purchaser, its
Affiliates, and their respective successors, permitted assigns, directors,
shareholders, officers, agents and employees from and against all claims,
losses, liabilities, demands and obligations of any nature whatsoever (including
reasonable legal fees and expenses) (collectively, "Damages") which Purchaser or
-------
any of its Affiliates or their respective successors, permitted assigns,
directors, shareholders, officers, agents or employees shall receive, suffer or
incur, arising out of or resulting from:
(a) The breach of any representation or warranty made by Seller in
this Agreement;
(b) The breach of any covenant or other agreement made by Seller in
this Agreement;
(c) Any liability of Seller not assumed by Buyer pursuant to Section
2.3; or
(d) Any actions taken or omitted to be taken by Seller prior to the
Closing Date and relating to the Purchased Assets and the Assumed
Liabilities, and any suits or proceedings commenced in connection
therewith (other than proceedings to prevent or limit the
consummation of the transactions contemplated by this Agreement).
SECTION 14.2. PURCHASER INDEMNIFICATION.
-------------------------
Purchaser shall indemnify, hold harmless and defend Seller, its
Affiliates and their respective successors, permitted assigns, directors,
shareholders, officers, agents and employees from and against all Damages which
Seller or any of its Affiliates or their respective successors, permitted
assigns, directors, shareholders, officers, agents or employees shall receive,
suffer or incur, arising out of or resulting from:
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(a) Any actions taken or omitted to be taken by Purchaser on or after
the Closing Date and relating to the Purchased Assets and the
Assumed Liabilities, and any suits or proceedings commenced in
connection therewith (other than proceedings to prevent or limit
the consummation of the transactions contemplated by this
Agreement);
(b) The breach of any representation or warranty made by Purchaser in
this Agreement; or
(c) The breach of any covenant or other agreement made by Purchaser
in this Agreement.
SECTION 14.3. INDEMNIFICATION PROCEDURE.
-------------------------
If a party entitled to indemnification hereunder ("Indemnified Party")
is aware that a claim, demand or other circumstance exists that has given or may
reasonably be expected to give rise to a right of indemnification under this
Article XIV (whether or not the amount of the claim is then quantifiable), such
Indemnified Party shall promptly give written notice thereof to the other party
("Indemnitor"), and the Indemnified Party will thereafter keep the Indemnitor
----------
reasonably informed with respect thereto, provided that failure of the
Indemnified Party to give the Indemnitor prompt notice as provided herein shall
not relieve the Indemnitor of its obligations hereunder except to the extent, if
any, that the Indemnitor's rights shall have been prejudiced or the Indemnitor's
liability shall have been materially increased thereby. In case any such action,
suit or proceeding is brought against an Indemnified Party, the Indemnitor shall
be entitled to participate in (and, in its discretion, to assume) the defense
thereof with counsel reasonably satisfactory to the Indemnified Party; provided,
however, that the Indemnified Party shall be entitled to participate in any such
action, suit or proceeding with counsel of its own choice at the expense of the
Indemnitor if, in the good faith judgment of the Indemnified Party's counsel,
representation by the Indemnitor's counsel may present a conflict of interest or
there may be defenses available to the Indemnified Party which are different
from or in addition to those available to the Indemnitor. In no event shall
Indemnitor be liable for the fees and expenses of more than one counsel,
separate from its own counsel, for all Indemnified Parties in connection with
any one action or separate but similar or related actions in the same
jurisdiction arising out of the same allegations or circumstances. The
Indemnitor will not settle any claim, action, suit or proceeding which would
give rise to the Indemnitor's liability under its indemnity unless such
settlement includes as an unconditional term thereof the giving by the claimant
or plaintiff of a release of the Indemnified Party, in form and substance
reasonably satisfactory to the Indemnified Party and its counsel, from all
liability with respect to such claim, action, suit or proceeding. If the
Indemnitor assumes the defense of any claim, action, suit or proceeding as
provided in this Section 14.3, the Indemnified Party shall be permitted to join
in the defense thereof with counsel of its own selection and at its own expense.
If the Indemnitor shall not assume the defense of any claim, action, suit or
proceeding, the Indemnified Party may defend against such claim, action, suit or
proceeding in such manner as it may deem appropriate, provided that an
Indemnified Party shall not settle any claim, action, suit or proceeding which
would give rise to the Indemnitor's liability under its indemnity without the
prior written consent of the Indemnitor, which consent shall not be unreasonably
withheld or delayed.
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SECTION 14.4. LIMITATION ON LIABILITY.
-----------------------
Notwithstanding anything to the contrary contained in this Article XIV,
no party shall be entitled to indemnification for any breach of any
representation or warranty pursuant to Section 14.1 or Section 14.2 unless and
until its aggregate Damages shall be in excess of $50,000, at which time such
party shall be entitled to indemnification for any amount of its Damages to the
extent such Damages exceed such amount. In no event shall the Damages payable by
Seller in the aggregate or by Purchaser in the aggregate exceed the Purchase
Price, which solely for purposes of this Section 14.4 is defined to mean the sum
of the items set forth in Section 3.1 (a) through (d), and in no event shall any
party be entitled to any incidental, consequential, special, exemplary or
punitive Damages except to the extent that the Indemnified Party becomes liable
to any third party for incidental, consequential, special, exemplary or punitive
damages.
SECTION 14.5. GENERAL.
-------
(a) Each Indemnified Party shall be obligated in connection with any
claim for indemnification under this Article XIV to use all
commercially reasonable efforts to obtain any insurance proceeds
available to such Indemnified Party with regard to the applicable
claims. The amount which any Indemnitor is or may be required to
pay to any Indemnified Party pursuant to this Article XIV shall
be reduced (retroactively, if necessary) by any insurance
proceeds or other amounts actually recovered (net of any direct
relevant collections costs) by or on behalf of such Indemnified
Party in reduction of the related Damages. If an Indemnified
Party shall have received the payment required by this Agreement
from the Indemnitor in respect of Damages and shall subsequently
receive insurance proceeds or other amounts in respect of such
Damages, then such Indemnified Party shall promptly repay to the
Indemnitor a sum equal to the amount of such insurance proceeds
or other amounts actually received (net of any direct relevant
collection costs).
(b) In addition to the requirements of paragraph (a) above, each
Indemnified Party shall be obligated in connection with any claim
for indemnification under this Article XIV to use all
commercially reasonable efforts to mitigate Damages upon and
after becoming aware of any event which could reasonably be
expected to give rise to such Damages.
(c) Subject to the rights of existing insurers of an Indemnified
Party, an Indemnitor shall be subrogated to any right of action
which the Indemnified Party may have against any other Person
with respect to any matter giving rise to a claim for
indemnification from such Indemnitor hereunder.
(d) Except for the parties' rights to specific performance and
injunctive relief as described in Section 17.14, the
indemnification provided in this Article XIV shall be the
exclusive post-Closing Date remedy available to any Indemnified
Party with respect to any breach of any representation, warranty,
covenant or agreement made by Purchaser or Seller in this
Agreement. The parties hereto further acknowledge that no
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indemnity shall be payable for any Damages with respect to any
breach of representations or warranties in this Agreement if
prior to Closing such party receives a written notice from the
other party disclosing such breach or breaches.
(e) All indemnification payments under this Article XIV shall be
deemed adjustments to the Purchase Price as defined in Section
3.1 of Article III.
SECTION 14.6. SURVIVAL.
--------
All representations, warranties and covenants contained in or made
pursuant to this Agreement shall survive the execution and delivery of the
Agreement and shall continue in full force and effect for a period of two(2)
year after the Closing Date and thereafter shall terminate, except as to any
claim for which written notice shall have been given prior to such date;
provided, however, that all covenants or agreements which by their terms are to
be performed after the second( 2nd) anniversary of the Closing Date shall
survive until fully discharged.
ARTICLE XV
EMPLOYEES
SECTION 15.1. HIRING OF EMPLOYEES.
-------------------
(a) Subject to due diligence, review of staffing needs and successful
completion of Purchaser's new employee process, Purchaser will
determine those Branch personnel to whom an offer employment will
be made. Employees who receive and accept such offers of
employment are referred to as ("New Employees"). Purchaser agrees
-------------
to notify Seller at least fourteen (14) days prior to the Closing
Date of any Branch personnel whom Purchaser will not employ after
the Closing Date and such information shall be kept confidential
by the Seller. (b) All New Employees shall be provided with the
same health and other benefits that Purchaser provides to its
employees. Such New Employees shall be credited with prior years
of service with Seller for purposes of eligibility and vesting
under Purchaser's benefit plans. All New Employees shall be
eligible to be enrolled in Purchaser's medical, dental, life
insurance and disability insurance programs available to other
employees of Purchaser without such New Employees incurring any
uninsured waiting periods or pre-existing conditions or
exclusions for such New Employees and their dependents. Prior to
the Closing Date, Purchaser shall provide Seller with copies of
the summary plan descriptions of all employee benefit plans of
Purchaser.
SECTION 15.2. SALARIES, BONUSES, ETC.
----------------------
(a) Seller shall remain liable for and shall pay within thirty (30)
days after the Closing Date any salaries, wages, bonuses or
commissions earned or accrued prior to the Closing Date.
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Purchaser shall be liable for any salaries, wages, bonuses or
commissions earned or accrued on and after the Closing Date.
(b) Seller shall pay to all personnel of the Branches all amounts due
them under Seller's pension plan and any other retirement plan at
the earliest terminated employee distribution date under the
terms of such plans as of the Closing Date.
SECTION 15.3. HIRINGS.
-------
During the period of time from the date of this Agreement through the
Closing Date, Seller shall not increase the number of employees or the level of
employee compensation and benefits of the employees of the Branches.
SECTION 15.4. SOLICITATION OF EMPLOYEES.
-------------------------
For two (2) years after the Closing Date, Seller shall not solicit any
of the New Employees hired by Purchaser for employment at another banking office
of Seller; provided, however, that this Section 15.4 shall not prohibit the
solicitation by Seller of any employees who do not become New Employees of
Purchaser or New Employees whose employment is terminated by Purchaser.
SECTION 15.5. RETENTION BONUS POOL.
--------------------
Purchaser will agree to the establishment of a retention bonus pool for
applicable employees of Seller at the Branches in an amount not to exceed
$20,000. The retention pool would be distributed to key employees of the
Branches, as determined by Purchaser.
SECTION 15.6 COBRA NOTIFICATIONS.
-------------------
To the extent required by law, Seller will provide all required
notification under the Consolidated Omnibus Budget Reconciliation Act of 1985
("COBRA") to all former employees of Seller at the Branch after the Closing Date
and to all other persons who became "qualified beneficiaries" under COBRA with
respect to any group health plans maintained by Seller for its employees, and
Seller will have provided any required COBRA coverage to all such former
employees and other qualified beneficiaries of Seller who elect COBRA coverage
within the time period specified by COBRA and the regulations promulgated
thereunder.
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ARTICLE XVI
POST-CLOSING MATTERS
SECTION 16.1. FURTHER ASSURANCES.
------------------
From and after the Closing Date:
(a) Except as specifically provided otherwise herein, Seller shall
reasonably assist Purchaser in the orderly transition of the
Purchased Assets and Assumed Liabilities and shall give such
further assurances to Purchaser and shall execute, acknowledge
and deliver all such acknowledgments and other instruments and
take such further action as may be necessary and appropriate to
effectively vest in Purchaser title in the Purchased Assets in
the manner contemplated hereby; provided that Seller need not
incur any out-of-pocket costs or expenses in connection with its
agreements in this Section 16.1 unless such costs or expenses are
reimbursed by Purchaser; and
(b) Except as specifically provided otherwise herein, Purchaser shall
give such further assurances to Seller and shall execute,
acknowledge and deliver all such acknowledgments and other
instruments and take such further action as may be necessary and
appropriate to effectively relieve and discharge Seller from any
obligations remaining with respect to the Assumed Liabilities;
provided that Purchaser need not incur any out-of-pocket costs or
expenses in connection with its agreements in this Section 16.1
unless such costs or expenses are reimbursed by Seller.
SECTION 16.2. ACCESS TO AND RETENTION OF BOOKS AND RECORDS.
--------------------------------------------
For a period of six (6) years from the Closing Date and to the extent
permitted by law, each party shall have commercially reasonable access to any
books and records of the other party relating to the Purchased Assets and the
Assumed Liabilities, and the requesting party, at its own expense, may make
copies and extracts when such copies and extracts are required by regulatory
authorities, for litigation purposes, or for tax or accounting purposes;
provided that in the event that as of the end of such period, any tax year of
Seller is under examination by any taxing authority, such books and records
shall be maintained by Purchaser until a final determination of the tax
liability of Seller for that year has been made. If such copies or extracts
require use of a party's equipment or facilities, the user shall reimburse the
other party for all costs incurred, including without limitation employee
expenses.
SECTION 16.3. DEPOSIT HISTORIES.
-----------------
In case of any dispute with or inquiry by any Customer whose account is
included in the Assumed Liabilities, which dispute or inquiry relates to the
servicing of such account by Seller prior to the date for which a deposit
history has been provided to Purchaser, Seller will provide Purchaser, where
available and to the extent reasonably requested by Purchaser and not already
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provided to Purchaser, information regarding such account and copies of
pertinent documents or instruments with respect to such dispute or inquiry so as
to permit Purchaser to respond to such Customer within a period of time and in a
manner which would comply with standard banking practices and customs and all
applicable Laws.
ARTICLE XVII
MISCELLANEOUS
SECTION 17.1. EXPENSES.
--------
(a) Except as otherwise provided herein, Seller and Purchaser shall
each pay all of their own out-of-pocket expenses in connection
with this Agreement, including investment banking, appraisal,
accounting, consulting, professional and legal fees, if any,
whether or not the transactions contemplated by this Agreement
are consummated.
(b) Purchaser shall pay all costs and expenses relating to the
recording of assignments of financing statements, notes, security
agreements or other instruments applicable to or arising in
connection with the transfer, assignment or assumption of the
Purchased Assets and Assumed Liabilities.
SECTION 17.2. TRADE NAMES AND TRADEMARKS.
--------------------------
(a) The Purchaser acknowledges and agrees that notwithstanding
anything to the contrary contained herein, it has, and following
the Closing shall have, no interest in or to the names "Baltimore
County Savings Bank", "Baltimore County Savings Bank FSB", or any
trade name, trademark or service xxxx, logo or corporate name of
Seller, or any of its Affiliates or predecessors. After the
Closing Date, neither Purchaser nor any of its Affiliates shall
use any of the trade names, trademarks, service marks, logos or
corporate names of Seller or any of its Affiliates or
predecessors.
(b) From and after the Closing, Purchaser agrees not to use any forms
or other documents bearing any name or logo of Seller, or the
name or logo of any Affiliate or predecessor of Seller, without
the prior written consent of Seller, which consent may be denied
or given in Seller's sole discretion. If such consent is given,
Purchaser hereby agrees that all forms or other documents to
which such consent relates will be stamped or otherwise marked in
such a way that identifies Purchaser as the party using the form
or document.
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SECTION 17.3. TERMINATION: EXTENSION OF CLOSING DATE.
----------------------------------------
This Agreement shall terminate and shall be of no further force or
effect as between the parties hereto, except as to the liability for actual
direct damages due to a willful breach of any material representation, warranty
or covenant occurring or arising prior to the date of termination, upon the
occurrence of any of the following:
(a) Upon mutual agreement of the parties;
(b) Upon written notice by either Purchaser or Seller to the other
parties immediately upon receipt by Purchaser or Seller of notice
from any governmental authority that Purchaser or Seller, as the
case may be, has been denied any Regulatory Approval by Final
order;
(c) Upon written notice by either Purchaser or Seller to the other
parties, if the Closing has not occurred on or before June 30,
2010; or
(d) By either the Purchaser or Seller (provided that the terminating
party is not then in material breach of any representation,
warranty, covenant or other agreement contained herein) if there
shall have been a material breach of any of the representations,
warranties, covenants or other agreements set forth in this
Agreement on the part of the other party, which breach is not
cured within thirty (30) days following written notice to the
party committing such breach, or which breach, by its nature,
cannot be cured prior to the Closing.
SECTION 17.4. MODIFICATION AND WAIVER.
-----------------------
No modification of any provision of this Agreement shall be binding
unless in writing and executed by the party or parties sought to be bound
thereby. Performance of or compliance with any covenant given herein or
satisfaction of any condition to the obligations of either party hereunder may
be waived by the parties to whom such covenant is given or whom such condition
is intended to benefit, except as otherwise provided in this Agreement or to the
extent any such condition is required by law; provided, that, any such waiver
must be in writing.
SECTION 17.5. BINDING EFFECT: ASSIGNMENT.
--------------------------
This Agreement shall be binding upon and shall inure to the benefit of
the parties hereto and their respective successors and permitted assigns;
provided, however, that neither this Agreement nor any rights, privileges,
duties or obligations of the parties hereto may be assigned without the prior
written consent of the other parties hereto.
SECTION 17.6. CONFIDENTIALITY.
---------------
(a) From and after the date hereof, the parties hereto and their
Affiliates shall keep confidential the terms of this Agreement
and the negotiations relating hereto and all documents and
information obtained by a party from another party in connection
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with the transactions contemplated hereby, except (i) to the
extent this Agreement and such negotiations need to be disclosed
to obtain a Regulatory Approval, (ii) for disclosures made in
accordance with the terms of this Agreement, and (iii) to the
extent required by applicable law or by any applicable national
securities exchange. This section shall survive any termination
of this Agreement.
(b) Except as otherwise required by Law, including the rules of any
self regulatory organization (as defined in the Securities
Exchange Act of 1934, as amended), the parties hereto shall each
furnish to the other the text of all notices and communications,
written or oral, proposed to be sent by the furnishing party
regarding the transactions contemplated hereby. Except as
otherwise required by Law of the National Association of
Securities Dealers, Inc. or any national stock exchange, the
furnishing party shall not send or transmit such notices or
communications or otherwise make them public unless and until the
consent of the other parties is received, which consent shall not
be unreasonably withheld or delayed. This section shall survive
any termination of this Agreement.
(c) Purchaser and Seller shall issue mutually agreed upon press
releases on the date of this Agreement and on the Closing Date or
the first (1st) Business Day thereafter.
SECTION 17.7. ENTIRE AGREEMENT; GOVERNING LAW.
-------------------------------
This Agreement, together with the exhibits and schedules attached
hereto and made a part hereof, contains the entire agreement between the parties
hereto with respect to the transactions covered and contemplated hereunder, and
supersedes all prior agreements or understandings between the parties hereto
relating to the subject matter hereof, provided that the terms of the
Confidentiality Agreement, to the extent not inconsistent with the terms hereof,
shall continue to apply. This Agreement shall be governed by and construed in
accordance with the laws of the State of Maryland (without reference to
conflicts or choice of law provisions).
SECTION 17.8. CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL.
---------------------------------------------
(a) Each party hereto, to the extent it may lawfully do so, hereby
submits to the jurisdiction of the courts of the State of
Maryland and the United States District Court for the District of
Maryland, as well as to the jurisdiction of all courts from which
an appeal may be taken or other review sought from the aforesaid
courts, for the purpose of any suit, action or other proceeding
arising out of such party's obligations under or with respect to
this agreement or any of the agreements, instruments or documents
contemplated hereby (other than the confidentiality agreement),
and expressly waives any and all objections it may have as to
venue in any of such courts.
(b) Each party hereto hereby waives trial by jury in any action,
proceeding or counterclaim arising out of or in any way concerned
with this agreement or any of the agreements, instruments or
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documents contemplated hereby. No party hereto, nor any Purchaser
or successor of a party hereto shall seek a jury trial in any
lawsuit, proceeding, counterclaim or any other litigation
procedure based upon, or arising out of, this agreement or any of
the agreements, instruments or documents contemplated hereby. No
party will seek to consolidate any such action, in which a jury
trial has been waived, with any other action in which a jury
trial cannot be or has not been waived. The provisions of this
have been fully discussed by the parties hereto, and the
provisions shall be subject to no exceptions. No party has in
anyway agreed with or represented to any other party that the
provisions of this section will not be fully enforced in all
instances.
SECTION 17.9. WAIVER OF CERTAIN DAMAGES.
-------------------------
Each of the parties hereto to the fullest extent permitted by law
irrevocably waives any rights that they may have to punitive, special,
incidental, exemplary or consequential damages in respect of any litigation
based upon, or arising out of, this agreement or any related agreement or any
course of conduct, course of dealing, statements or actions of any of them
relating thereto.
SECTION 17.10. SEVERABILITY.
------------
In the event that any provision of this Agreement shall be held
invalid, illegal, or unenforceable in any respect, the validity, legality, and
enforceability of the remaining provisions contained in this Agreement shall not
in any way be affected or impaired thereby, and this Agreement shall otherwise
remain in full force and effect.
SECTION 17.11. COUNTERPARTS.
------------
This Agreement may be executed in one or more counterparts, all of
which shall be considered one and the same agreement and shall become effective
when one or more counterparts have been signed by each of the parties hereto.
SECTION 17.12. NOTICES.
-------
All notices, consents, requests, instructions, approvals, waivers,
stipulations and other communications provided for herein to be given by one
party hereto to the other party shall be deemed validly given, made or served,
if in writing and delivered personally or sent by certified mail, return receipt
requested, nationally recognized overnight delivery service, or facsimile
transmission as follows:
(a) If to Seller:
Baltimore County Savings Bank
0000 X. Xxxxx Xxxx
Xxxxxxxxx, XX 00000
Attention: Xxxxxx Xxxxxxxx
Facsimile number: (000) 000-0000
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with a copy (which shall not constitute notice) to:
Xxxxxxxxxx Xxxxxxxx LLP
000 00xx Xxxxxx, XX, Xxxxx 000
Xxxxxxxxxx, X.X. 00000
Attention: Xxxx Xxxxxxxxx., Esq.
Facsimile number: (000) 000-0000
(b) If to Purchaser:
American Bank
0000 Xxxxxxxxx Xx., Xxxxx 000
Xxxxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxx
Facsimile number: (000) 000-0000
with a copy (which shall not constitute notice) to:
Xxxxxxxxxx Xxxxxxxx LLP
000 00xx Xxxxxx, XX, Xxxxx 000
Xxxxxxxxxx, XX 00000
Attention: Xxxxxxxxx X. Xxxxxxx, Esq.
Facsimile number: (000) 000-0000
Notice by certified mail shall be deemed to be received three (3)
Business Days after mailing of the same. Either party may change the persons or
addresses to whom or to which notices may be sent by written notice to the
others.
SECTION 17.13. INTERPRETATION.
--------------
Article titles, headings to sections and any table of contents are
inserted for convenience of reference only and are not intended to be a part of
or to affect the meaning or interpretation hereof. The Schedules and Exhibits
referred to herein shall be construed with and as an integral part of this
Agreement to the same extent as if they were set forth verbatim herein. As used
herein, "include", "includes" and "including" are deemed to be followed by
"without limitation" whether or not they are in fact followed by such words or
words of like import; "writing", "written" and comparable terms refer to
printing, typing, lithography and other means of reproducing words in a visible
form; references to a person are also to its successors and assigns; except as
the context may otherwise require, "`hereof", "herein", "hereunder" and
comparable terms refer to the entirety hereof and not to any particular article,
section or other subdivision hereof or attachment hereto; references to any
gender include the other, except as the context may otherwise require, the
singular includes the plural and vice versa; references to any agreement or
other document are to such agreement or document as amended and supplemented
from time to time; references to "Article", "Section" or another subdivision or
to an "Exhibit" or "Schedule" are to an article, section or subdivision hereof
or an "Exhibit" or "Schedule". The parties acknowledge that each party and its
counsel have reviewed and revised this Agreement and that the normal rule of
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construction to the effect that any ambiguities are to be resolved against the
drafting party shall not be employed in the interpretation, construction and
enforcement of this Agreement or any amendment, schedule or exhibit hereto.
SECTION 17.14. SPECIFIC PERFORMANCE.
--------------------
The parties hereto acknowledge that monetary damages could not
adequately compensate either party hereto in the event of a breach of this
Agreement by the other, that the non-breaching party would suffer irreparable
harm in the event of such breach and that the non-breaching party shall have, in
addition to any other rights or remedies it may have at law or in equity,
specific performance and injunctive relief as a remedy for the enforcement
hereof.
SECTION 17.15. NO THIRD PARTY BENEFICIARIES.
----------------------------
The parties hereto intend that this Agreement shall not benefit or
create any right or cause of action in or on behalf of any person other than the
parties hereto. No future or present employee or customer of either of the
parties nor their affiliates, successors or assigns or other person shall be
treated as a third party beneficiary in or under this Agreement.
[SIGNATURES APPEAR ON FOLLOWING PAGE]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed, by their duly authorized representatives, as of the day and year first
above written.
AMERICAN BANK
By: /s/ Xxxxx X. Xxxxx
------------------------------------------
Name: Xxxxx X. Xxxxx
Title: President and Chief Executive Officer
BALTIMORE COUNTY SAVINGS BANK
By: /s/ Xxxxxx Xxxxxxxx
------------------------------------------
Name: Xxxxxx Xxxxxxxx
Title: President and Chief Executive Officer
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