PURCHASE AND ASSUMPTION AGREEMENT
between
CFX BANK
and
FIRST ESSEX BANK, FSB
dated as of Xxxxx 00, 0000
XXXXXXXX AND ASSUMPTION AGREEMENT
ARTICLE I
DEFINED TERMS .........................................................1
Section 1.1. Defined Terms ...........................................1
ARTICLE II
TRANSFER OF ASSETS AND LIABILITIES ....................................3
Section 2.1. Transferred Assets ......................................3
Section 2.2. Purchase Price ..........................................4
Section 2.3 Deposit Liabilities .....................................6
Section 2.4. Loans Transferred .......................................8
Section 2.5. Safe Deposit Business ..................................11
Section 2.6. Employee Matters .......................................11
Section 2.7. Records and Data Processing, etc. ......................12
Section 2.8. Security ...............................................13
Section 2.9. Taxes and Fees Proration of Certain Expenses ...........13
Section 2.10. Real Property ..........................................13
ARTICLE III
CLOSING AND EFFECTIVE TIME ...........................................16
Section 3.1. Effective Time .........................................16
Section 3.2. Closing ................................................16
Section 3.3. Post-Closing Adjustments ...............................18
ARTICLE IV
INDEMNIFICATION ......................................................20
Section 4.1. Seller's Indemnification of Purchaser ..................20
Section 4.2. Purchaser's Indemnification of Seller ..................20
Section 4.3. Claims for Indemnity ...................................21
Section 4.4. Limitations on Indemnification .........................21
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF SELLER .............................22
Section 5.1. Corporate Organization .................................22
Section 5.2. Authority ..............................................22
Section 5.3. Non-Contravention ......................................22
Section 5.4. Compliance with Law ....................................22
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Section 5.5. Legal Proceedings ......................................23
Section 5.6. No Brokers .............................................23
Section 5.7. Personal Property ......................................23
Section 5.8. Real Property and the Leased Branch Offices ............23
Section 5.9. Employees ..............................................24
Section 5.10. Assumed Contracts ......................................24
Section 5.11. Loans ..................................................24
Section 5.12. Environmental Matters ..................................25
Section 5.13. Limitation of Representations and Warranties ...........25
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF PURCHASER ..........................25
Section 6.1. Corporate Organization .................................26
Section 6.2. Authority ..............................................26
Section 6.3. Non-Contravention ......................................26
Section 6.4. Legal Proceedings ......................................26
Section 6.5. No Brokers .............................................26
Section 6.6. Regulatory Matters .....................................26
Section 6.7. Financing Available ....................................27
ARTICLE VII
OBLIGATIONS OF PARTIES PRIOR TO AND AFTER EFFECTIVE TIME .............27
Section 7.1. Access to Branch Offices ...............................27
Section 7.2. Regulatory Approvals ...................................27
Section 7.3. Conduct of Business; Maintenance of Properties .........28
Section 7.4. No Solicitation ........................................28
Section 7.5. Branch Office Operations ...............................29
Section 7.6. Corporate and Other Consents ...........................31
Section 7.7 Condemnation or Casualty ...............................32
Section 7.8. Data Processing Services ..............................32
Section 7.9. Public Announcements ...................................32
Section 7.10. Tax Reporting .........................................32
Section 7.11. Actions With Respect to XXX and Xxxxx Plan
Deposit Liabilities .....................................33
ARTICLE VIII
CONDITIONS TO PURCHASER'S OBLIGATIONS ................................33
Section 8.1. Representations and Warranties True ....................34
Section 8.2. Obligations Performed .................................34
Section 8.3. Regulatory Approvals ..................................34
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ARTICLE IX
CONDITIONS TO SELLER'S OBLIGATIONS ...................................34
Section 9.1. Representations and Warranties True ....................34
Section 9.2. Obligations Performed ..................................35
Section 9.3. Regulatory Approvals ...................................35
Section 9.4. Consummation of the Parent Merger ......................35
ARTICLE X
TERMINATION 35
Section 10.1. Methods of Termination .................................35
Section 10.2. Procedure Upon Termination .............................36
Section 10.3. Payment of Expenses ....................................37
Section 10.4. Liquidated Damages .....................................37
ARTICLE XI
MISCELLANEOUS PROVISIONS .............................................37
Section 11.1. Completion of the Parent Merger .......................37
Section 11.2. Expenses ..............................................37
Section 11.3. Amendment and Modification ............................38
Section 11.4. Waiver or Extension ...................................38
Section 11.5. Successors and Assigns ................................38
Section 11.6. Confidentiality .......................................38
Section 11.7. Addresses for Notices, Etc. ...........................39
Section 11.8. Counterparts ..........................................40
Section 11.9. Headings ..............................................40
Section 11.10. Governing Law ........................................40
Section 11.11. Sole Agreement ........................................40
Section 11.12. Parties in Interest ..................................40
Section 11.13. Specific Performance ................................41
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PURCHASE AND ASSUMPTION AGREEMENT
Purchase and Assumption Agreement (the "Agreement"), dated as of March 28,
1998, between CFX Bank ("Seller"), a wholly-owned subsidiary of CFX Corporation
("CFX"), and First Essex Bank, FSB ("Purchaser"), a wholly-owned subsidiary of
First Essex Bancorp, Inc. ("FEBI").
W I T N E S S E T H:
WHEREAS, Peoples Heritage Financial Group, Inc. and CFX have entered
into an Agreement and Plan of Merger, dated as of October 27, 1997 (the "Parent
Merger Agreement"), which sets forth the terms and conditions pursuant to which
CFX will merge with and into PHFG (the "Parent Merger"); and
WHEREAS, Seller, in order to meet regulatory requirements dictated by
the Parent Merger, desires to sell certain assets of, and transfer certain
liabilities assigned to, certain branch offices of Seller; and
WHEREAS, Purchaser wishes to purchase such assets and assume such
liabilities upon the terms and conditions set forth herein;
NOW THEREFORE, in consideration of the premises and mutual agreements
hereinafter set forth, Seller and Purchaser agree as follows:
ARTICLE I
DEFINED TERMS
Section 1.1. Defined Terms.
The following terms shall have the meanings ascribed to them for all
purposes of this Agreement.
"BNH" has the meaning set forth in Section 11.5(b).
"Branch Offices" means the branch offices of Seller listed on Exhibit
1.1 hereto.
"Closing" and "Closing Date" have the meanings set forth in Section 3.1.
"Code" has the meaning set forth in Section 2.2(e).
"Coin and Currency" has the meaning set forth in Section 2.1(a)(6).
"Deposit Liabilities" has the meaning set forth in Section 2.3(a).
"Effective Time" has the meaning set forth in Section 3.1.
"Employees" shall have the meaning set forth in Section 2.6.
"Equipment Leases" has the meaning set forth in Section 2.1(a)(3).
"Excluded Assets" has the meaning set forth in Section 2.1(b).
"Excluded Deposit Liabilities" has the meaning set forth in Section 2.3.
"Excluded XXX/Xxxxx Deposit Liabilities" has the meaning set forth in
Section 7.11.
"FDIA" has the meaning set forth in Section 5.1.
"Initial Closing Statement" has the meaning set forth in Section 2.2(c).
"XXX" has the meaning set forth in Section 2.3.
"Landlord Consents" has the meaning set forth in Section 3.2(b)(4).
"Loans" has the meaning set forth in Section 2.4.
"Net Book Value" has the meaning set forth in Section 2.2(d).
"Parent Merger" has the meaning set forth in the first recital to this
Agreement.
"Personal Property" has the meaning set forth in Section 2.1(a)(2).
"Post-Closing Balance Sheet" and "Post-Closing Balance Sheet Delivery
Date" have the meanings set forth in Section 3.3(a).
"Pre-Closing Balance Sheet" and "Pre-Closing Balance Sheet Date" have
the meanings set forth in Section 2.2(c).
"Purchase Price" has the meaning set forth in Section 2.2(a).
"Real Property" has the meaning set forth in Section 2.1(a)(1).
"Real Property Leases" has the meaning set forth in Section 2.1(a)(3).
"Regulatory Approvals" has the meaning set forth in Section 8.3.
"Safe Deposit Contracts" has the meaning set forth in Section 2.1(a)(4).
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"Tenant Leases" has the meaning set forth in Section 2.1(a)(3).
"Title Defects" has the meaning set forth in Section 2.10(a)(ii).
"Transferred Assets" has the meaning set forth in Section 2.1(a).
ARTICLE II
TRANSFER OF ASSETS AND LIABILITIES
Section 2.1. Transferred Assets.
(a) As of the Effective Time and upon the terms and conditions set forth
herein, Seller will sell, assign, transfer, convey and deliver to Purchaser, and
Purchaser will purchase from Seller, the following assets at the Branch Offices,
except as otherwise excluded from sale pursuant to the provisions of subsection
(b) below (collectively, the "Transferred Assets"):
(1) subject to Section 2.10 hereof, all of Seller's transferable
right, title and interest in and to all real estate and improvements
thereon at the Branch Offices, but not including any leasehold estates
covered by subsection (3) below, together with all rights and
appurtenances pertaining thereto (as listed on Exhibit 2.1(a)(1), the
"Real Property");
(2) the furniture, fixtures, leasehold improvements, equipment
and other tangible personal property located on or affixed to the Real
Property or located at leased Branch Office locations (as listed on
Exhibit 2.1(a)(2), and subject to adjustment as a result of changes in
the ordinary course of business of the Branch Offices, the "Personal
Property");
(3) all assignable leases affecting the Branch Offices, including
(i) all leases of real property and space in Real Property where Seller
is the lessee (as listed on Exhibit 2.1(a)(3)(i), the "Real Property
Leases"), (ii) any leases of real property and space in Real Property
where Seller is a lessor (as listed on Exhibit 2.1(a)(3)(ii), the
"Tenant Leases") and (iii) all leases for equipment located at the
Branch Offices (as listed on Exhibit 2.1(a)(3)(iii), and subject to
adjustment as a result of changes in the ordinary course of business of
the Branch Offices, the "Equipment Leases");
(4) all safe deposit contracts and leases for the safe deposit
boxes located at the Branch Offices as of the Effective Time (as listed
on Exhibit 2.1(a)(4), and subject to adjustment as a result of changes
in the ordinary course of business of the Branch Offices, the "Safe
Deposit Contracts");
(5) all Loans transferred pursuant to Section 2.4; and
(6) all coins and currency located at the Branch Offices as of
the Effective Time (the "Coins and Currency").
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(b) Excluded from the assets, properties and rights being transferred,
conveyed and assigned to Purchaser under this Agreement are (i) the proprietary
merchandising equipment and other assets listed on Exhibit 2.1(b) hereto, (ii)
Seller's rights in and to its name and the names of financial institutions
acquired by Seller and any of Seller's or its acquired financial institutions'
corporate logos, trademarks, trade names, signs, paper stock, forms and other
supplies containing any such logos, trademarks or trade names, (iii) residential
mortgage servicing rights for 1-4 family residential mortgages loans at the
Branch Offices, (iv) any regulatory licenses or any other nonassignable licenses
and permits, (v) trust, brokerage, mutual fund and similar relationships and
(vi) any proprietary Seller software (collectively, the "Excluded Assets").
Seller shall coordinate with Purchaser to remove the Excluded Assets from the
Branch Offices on or prior to the Effective Time. Seller shall remove the
Excluded Assets at its own cost and using its reasonable efforts to attempt to
minimize any damage as a result of such removal. Apart from making any repairs
necessitated by Seller's negligence in removing the Excluded Assets, Seller
shall be under no obligation to restore the premises to their original
condition, which shall be the responsibility of Purchaser.
(c) Except for data provided pursuant to Sections 2.3, 2.4, 2.5 and 2.6,
all internal reports and data relating to, containing or derived from the
operating results of Seller and its affiliates or any subsidiary or division or
line of business thereof (in each case including financial institutions acquired
by Seller and their affiliates), whether contained in books, records or other
paper format, accessed through the computer and data processing systems of
Seller and its affiliates, or otherwise in the possession of Seller, shall
remain solely the property of Seller, and nothing contained in this Agreement
shall be construed as transferring to or vesting in Purchaser any right or
interest in or to such data and information. Purchaser acknowledges that Seller
shall be entitled to take all such steps prior to or following the Effective
Time as shall be necessary in Seller's sole discretion to effect the foregoing,
including taking such actions as are necessary to ensure that all access to such
information at the offices of Seller shall be terminated as of the Closing.
Purchaser shall promptly return to Seller any such information or data described
herein which remains at any Branch Office transferred following the Effective
Time.
Section 2.2. Purchase Price.
(a) As consideration for the purchase of the Branch Offices, Purchaser
shall pay Seller a purchase price equal to the sum of the following (the
"Purchase Price"):
(1) The Net Book Value of the Personal Property and the
Real Property on the Closing Date;
(2) A premium for the Deposit Liabilities equal to 10% of the
average aggregate daily balance of the Deposit Liabilities for the
period commencing on the 15th day prior to the Closing Date and ending
on the Closing Date.
(3) The Net Book Value of the Loans on the Closing Date; and
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(4) The face amount of the Coins and Currency.
(b) In addition, Purchaser shall assume, as of the Effective Time, all
of the duties, obligations and liabilities of Seller relating to the Deposit
Liabilities and to any of the following accruing or arising on or after the
Effective Time: the Real Property, the Real Property Leases, the Tenant Leases,
the Equipment Leases and the Safe Deposit Contracts.
(c) Seller shall (i) prepare a balance sheet (the "Pre-Closing Balance
Sheet") in accordance with generally accepted accounting principles consistently
applied as of a date not earlier than 30 calendar days prior to the Effective
Time anticipated by the parties (the "Pre-Closing Balance Sheet Date") and a
related initial closing statement (the "Initial Closing Statement") reflecting
the assets to be sold and assigned hereunder and the liabilities to be
transferred and assumed hereunder and (ii) update the appropriate Exhibits to
this Agreement to reflect changes in the ordinary course of business of the
Branch Offices between the date hereof and the Pre-Closing Balance Sheet Date.
Seller agrees to pay to Purchaser at the Closing, in immediately available
funds, the excess, if any, of the amount of Deposit Liabilities assumed by
Purchaser pursuant to subsection (b) above, as reflected on the Pre-Closing
Balance Sheet, over the estimated aggregate Purchase Price computed in
accordance with subsection (a) above, as reflected on the Initial Closing
Statement. Purchaser agrees to pay Seller at the Closing, in immediately
available funds, the excess, if any, of the aggregate Purchase Price computed in
accordance with subsection (a) above, as reflected on the Initial Closing
Statement, over the amount of Deposit Liabilities assumed by Purchaser pursuant
to subsection (b) above, as reflected on the Pre-Closing Balance Sheet. Amounts
paid at Closing shall be subject to subsequent adjustment based on the
Post-Closing Balance Sheet and the Final Closing Statement.
(d) With respect to Personal Property and Real Property, Net Book Value
is the value that the asset is carried on Seller's general ledger. With regard
to Loans, Net Book Value is the aggregate principal amount of the Loans, plus
accrued and unpaid interest and late charges thereon, but such value shall not
include any loan loss reserves or general reserve.
(e) (1) Seller and Purchaser agree to allocate the final Purchase Price
in accordance with Section 1060 of the Internal Revenue Code of 1986, as amended
(the "Code"). Within 30 days after the Closing Date, Purchaser shall provide to
Seller Purchaser's proposed allocation of the purchase price as finally
determined and paid by Purchaser hereunder. Within 30 days after the receipt of
such allocation, Seller shall propose to Purchaser any changes to such
allocation or otherwise shall be deemed to have agreed with such allocation.
(2) Seller and Purchaser shall reduce such allocation to writing,
including jointly and properly executing completed Internal Revenue Service Form
8594, and any other forms or statements required by the Code, Treasury
Regulations or the Internal Revenue Service, together with any and all
attachments required to be filed therewith. Seller and Purchaser shall file
timely any such forms and statements with the Internal Revenue Service.
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(3) To the extent consistent with applicable law, Seller and Purchaser
shall not file any tax return or other documents or otherwise take any position
with respect to taxes which is inconsistent with such allocation of the final
purchase price, provided, however, that neither Seller nor Purchaser shall be
obligated to litigate any challenge to such allocation of the final purchase
price by a governmental authority.
(4) Seller and Purchaser shall promptly inform one another of any
challenge by any governmental authority to any allocation made pursuant to this
subsection and agree to consult with and keep one another informed with respect
to the state of, and any discussion, proposal or submission with respect to,
such challenge.
Section 2.3 Deposit Liabilities.
(a) "Deposit Liabilities" shall mean all deposit liabilities of Seller
that Purchaser may legally assume, which shall consist of (i) all savings
accounts, (ii) all certificates of deposit, (iii) all negotiable order of
withdrawal accounts, (iv) all demand deposit accounts, (v) all money market
deposit accounts, (vi) all individual retirement accounts ("IRAs"), Xxxxx Plan
accounts and trust deposit accounts that Purchaser may legally assume and (vii)
all other deposit or savings accounts allocated on the records of Seller to the
Branch Offices according to their respective terms as of the close of business
on the Closing Date (including Deposit Liabilities with respect to the deposit
accounts listed on Exhibit 2.3(a) which remain such as of the Closing Date), in
each case together with interest accrued thereon but unpaid as of the Closing
Date, provided that Deposit Liabilities shall not include the Excluded Deposit
Liabilities. For purposes of this Agreement, "Excluded Deposit Liabilities"
shall mean (i) Deposit Liabilities with respect to accounts which are booked by
Seller at any Branch Office and are held by Seller under or pursuant to any
judgment, decree or order of any court, (ii) the Excluded XXX/Xxxxx Deposit
Liabilities and trust deposit accounts which by their terms are not subject to
assignment (it being understood that all other types of XXX, Xxxxx Plan and
trust Deposit Liabilities are intended to be transferred), (iii) Deposit
Liabilities associated with or securing Loans which are excluded in accordance
with Section 2.4(b) and (iv) except to the extent that they specifically relate
to a Loan, dealer reserve accounts which automobile, recreational vehicle and
recreational boating dealerships maintain with Seller in connection with
Seller's indirect consumer lending activities.
(b) Purchaser shall not assume or be bound by any liabilities or
obligations of Seller of any kind or nature, known or unknown, contingent or
otherwise, other than the liabilities and obligations specifically assumed by
Purchaser under Section 2.2(b) or as otherwise provided in this Agreement.
(c) Seller and Purchaser agree that Seller is not guaranteeing to
Purchaser any minimum amount of Deposit Liabilities as of the Closing Date or
that any deposit customers whose Deposit Liabilities are assumed by Purchaser
will continue to be customers of Purchaser after the Effective Time.
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(d) Purchaser agrees to pay in accordance with law and customary banking
practices all properly drawn and presented checks, drafts and withdrawal orders
presented to Purchaser by mail, over the counter or through the check clearing
system of the banking industry, by depositors of the accounts assumed, whether
drawn on the checks, withdrawal or draft forms provided by Seller or by
Purchaser, and in all other respects to discharge, in the usual course of the
banking business, the duties and obligations of Seller with respect to the
balances due and owing to the depositors whose accounts are assumed by
Purchaser.
(e) If, after the Effective Time, any depositor, instead of accepting
the obligation of Purchaser to pay the Deposit Liabilities assumed, shall demand
payment from Seller for all or any part of any such assumed Deposit Liabilities,
Seller shall not be liable or responsible for making any such payment, provided,
that if Seller shall pay the same, Purchaser agrees to reimburse Seller for any
such payments, and Seller shall not be deemed to have made any representations
or warranties to Purchaser with respect to any such checks, drafts or withdrawal
orders and any such representations or warranties implied by law are hereby
expressly disclaimed. Seller and Purchaser shall make arrangements to provide
for the daily settlement with immediately available funds by Purchaser of
checks, drafts, withdrawal orders, returns and other items presented to and paid
by Seller within 30 calendar days after the Effective Time and drawn on or
chargeable to accounts that have been assumed by Purchaser.
(f) Purchaser agrees, at its cost and expense, (1) to assign new account
numbers to depositors of assumed Deposit Liabilities, (2) to notify such
depositors, on or before the Effective Time, in a form and on a date mutually
acceptable to Seller and Purchaser and in accordance with the requirements of
applicable laws and regulations, of Purchaser's assumption of the Deposit
Liabilities, (3) to furnish such depositors with checks on the forms of
Purchaser and with instructions to utilize Purchaser's checks and to destroy
unused check, draft and withdrawal order forms of Seller (if Purchaser so
elects, Purchaser may offer to buy from such depositors their unused Seller's
check, draft and withdrawal order forms), (4) to reissue all ATM and debit cards
(with new PIN numbers) associated with the depositors of assumed Deposit
Liabilities and (5) to replace all line of credit checks with checks on the
forms of Purchaser, with instructions to utilize Purchaser's checks and to
destroy the unused checks. At its expense, Seller will prepare and deliver to
Purchaser two sets of its normal customer mailing labels relating to the Deposit
Liabilities. In addition, subsequent to regulatory approval, Seller will notify
its affected customers by letter of the pending assignment of Seller's Deposit
Liabilities to Purchaser, which notice shall be at Seller's cost and expense and
shall be in a form mutually agreeable to Seller and Purchaser.
(g) Purchaser agrees to pay promptly to Seller an amount equivalent to
the amount of any checks, drafts or withdrawal orders credited to any assumed
Deposit Liabilities as of the Effective Time that are returned to Seller after
the Effective Time.
(h) As of the Effective Time, Purchaser will assume and discharge
Seller's duties and obligations in accordance with the terms and conditions and
laws, rules and regulations that apply to the Deposit Liabilities assumed under
this Agreement.
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(i) As of the Effective Time, Purchaser will maintain and safeguard in
accordance with applicable law and sound banking practices all account
documents, deposit contracts, signature cards, deposit slips, canceled items and
other records related to the Deposit Liabilities assumed under this Agreement,
subject to Seller's right of access to such records as provided in this
Agreement.
(j) Seller will render a final statement to each depositor of an account
assumed under this Agreement as to transactions occurring through the Effective
Time and will comply with all laws, rules and regulations regarding tax
reporting of transactions of such accounts through the Effective Time. Seller
will be entitled to impose normal fees and service charges on a per-item basis,
but Seller will not impose periodic fees or blanket charges in connection with
such final statements. Purchaser will comply with all laws, rules and
regulations regarding tax reporting of transactions of such accounts after the
Effective Time.
(k) Prior to the Closing Date, Purchaser, at its expense, will notify
all Automated Clearing House ("ACH") originators of the transfers and
assumptions made pursuant to this Agreement, provided, however, that Seller may,
at its option, notify all such originators (on behalf of Purchaser) also at the
expense of Purchaser. For a period of 60 calendar days beginning on the
Effective Time, Seller will honor all ACH items related to accounts assumed
under this Agreement which are mistakenly routed or presented to Seller. Seller
will make no charge to Purchaser for honoring such items. Seller will make
available to Purchaser at Seller's operations center receiving items from the
Automated Clearing House tapes containing such ACH data. Items mistakenly routed
or presented after the 60-day period will be returned to the presenting party.
Seller and Purchaser shall make arrangements to provide for the daily settlement
with immediately available funds by Purchaser of any ACH items honored by
Seller, and Seller shall be held harmless and indemnified by Purchaser for
acting in accordance with this arrangement to accept ACH items.
(l) As of the Effective Time, Seller shall transfer and assign all
files, documents and records related to the Deposit Liabilities to Purchaser,
including such information held in electronic form, and Purchaser will be
responsible for maintaining and safeguarding all such materials in accordance
with applicable law and sound banking practices.
(m) In case of any dispute with or inquiry by any customer whose Deposit
Liability account is subject to this Agreement, 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
provided to Purchaser, information regarding the Deposit Liability account and
copies of pertinent documents or instruments with respect to such dispute or
inquiry so as to permit Purchaser to respond to the Deposit Liability account
holder within a period of time and in a manner which would comply with standard
banking practices and customs.
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Section 2.4. Loans Transferred.
(a) Seller will transfer to Purchaser as of the Effective Time, subject
to the terms and conditions of this Agreement, all of Seller's right, title and
interest (including accrued but unpaid interest and late charges and collateral
relating thereto) in (i) loans secured by deposit accounts, including but not
limited to savings accounts and certificates of deposit, and unsecured loans
created by writing a check or similar instrument and resulting in an overdraft
where there is no established line of credit, in each case allocated on the
records of Seller to the Branch Offices (as listed on Exhibit 2.4(a)(i), and
subject to adjustment as a result of changes in the ordinary course of business
of the Branch Offices, the "Deposit Related Loans"), and (ii) certain
non-deposit related loans allocated on the records of Seller to the Branch
Offices (as listed on Exhibit 2.4(a)(ii), and subject to adjustment as a result
of changes in the ordinary course of business of the Branch Offices, the "Other
Loans"), provided, however, that the Deposit Related Loans and the Other Loans
(collectively, the "Loans") shall not include any loans described in subsection
(b) below. The Loans (as well as any lien or security interest related thereto)
shall be transferred by means of a blanket (collective) assignment and not
individually (except as may be otherwise required by law).
(b) Notwithstanding the provisions of subsection (a) above, the Loans
shall not include:
(1) nonaccruals (which term shall include loans in which the
collateral securing the same has been repossessed or in which
collection efforts have been instituted or foreclosure
proceedings have been filed);
(2) loans 90 calendar days or more past due or otherwise in
default;
(3) loans upon which insurance has been force-placed;
(4) loans in connection with which the borrower has filed a
petition for relief under the United States Bankruptcy Code
prior to the Effective Time; or
(5) loans which are excluded based on the mutual agreement of the
parties.
(c) Seller and Purchaser agree that Purchaser will become the
beneficiary of credit life insurance written on direct consumer installment
loans and coverage will continue to be the obligation of the current insurer
after the Effective Time and for the duration of such insurance as provided
under the terms of the policy or certificate. If Purchaser becomes the
beneficiary of credit life insurance written on direct consumer installment
loans, Seller and Purchaser agree to cooperate in good faith to develop a
mutually satisfactory method by which the current insurer will make rebate
payments to and satisfy claims of the holders of such certificates of insurance
after the Effective Time. After the Effective Time, Seller will promptly deliver
to Purchaser the proceeds of any credit life insurance relating to Loans
inadvertently received by it. The parties' obligations in this section are
subject to any restrictions contained in existing insurance contracts as well as
applicable laws and regulations.
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(d) In connection with the transfer of any Loans requiring notice to the
borrower and the servicer, Purchaser and Seller will comply with all notice and
reporting requirements of the loan documents or of any law or regulation.
(e) All Loans will be transferred without recourse and without any
warranties or representations as to their collectibility or the creditworthiness
of any of the obligors of the Loans.
(f) Purchaser will at its expense issue new coupon books or other forms
of payment identification for payment of Loans for which Seller provides coupon
books, with instructions to utilize Purchaser coupons or forms and to destroy
coupons furnished by Seller.
(g) For a period of 60 calendar days after the Effective Time, Seller
will forward to Purchaser Loan payments received by Seller. Purchaser shall
reimburse Seller for checks returned on payments forwarded to Purchaser.
(h) As of the Effective Time, Seller shall transfer and assign all
files, documents and records related to the Loans to Purchaser, including such
information held in electronic form, and Purchaser will be responsible for
maintaining and safeguarding all such materials in accordance with applicable
law and sound banking practices.
(i) If the balance due on any Loan purchased pursuant to this Section
2.4 has been reduced by Seller as a result of a payment by check received prior
to the Effective Time, which item is returned after the Effective Time, the
asset value represented by the Loan transferred shall be correspondingly
increased and an amount in cash equal to such increase shall be paid by
Purchaser to Seller promptly upon demand.
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Section 2.5. Safe Deposit Business.
(a) As of the Effective Time, Purchaser will assume and discharge
Seller's obligations with respect to the safe deposit box business at the Branch
Offices in accordance with the terms and conditions of contracts or rental
agreements related to such business, and Purchaser will maintain all facilities
necessary for the use of such safe deposit boxes by persons entitled to use
them.
(b) As of the Effective Time, Seller shall transfer and assign the
records related to such safe deposit box business to Purchaser, and Purchaser
shall maintain and safeguard all such records and be responsible for granting
access to and protecting the contents of safe deposit boxes at the Branch
Offices.
Section 2.6. Employee Matters.
(a) Purchaser will offer employment to all employees actively employed
by Seller at the Branch Offices as of the Effective Time (as listed on Exhibit
2.6(a), and subject to adjustment as a result of changes in the ordinary course
of business of the Branch Offices, the "Employees"), provided that nothing
contained herein shall obligate Purchaser to continue to employ Employee for any
specific period of time after the Effective Time.
(i) The base salary for each Employee hired by Purchaser shall
not be less than the base salary provided by Seller immediately prior to
the Effective Time, subject to changes due to employment classification.
(ii) Each Employee who immediately becomes an employee of
Purchaser shall be eligible to participate in (i) the retirement plans
and programs available to employees of Purchaser and (ii) the group
hospitalization, medical, dental, life, disability and other welfare
benefit plans and programs available to employees of Purchaser, subject
in each case to the terms of such plans and programs. Except as
otherwise provided by the terms of Purchaser's defined benefit pension
plan, service with Seller and financial institutions acquired by Seller
shall be deemed to be service with Purchaser for the purpose of
determining eligibility to participate in and vesting (but not benefit
accrual) under such plans and programs, as well as for purposes of
Purchaser's vacation and sick leave policies. Purchaser shall provide
Employees with full credit for copayment, deductible amounts and
out-of-pocket maximums under any employee benefit plan and program of
Purchaser paid by the Employees prior to the Effective Time and shall
not apply any pre-existing condition, waiting period or other similar
limitations to the Employees, except to the extent that any of the same
is applicable to employees of the Purchaser.
(iii) Each Employee who immediately becomes an employee of
Purchaser and is terminated by Purchaser subsequent to the Effective
Time shall be entitled to severance benefits from Purchaser in
accordance with the employee severance plan adopted by PHFG in
connection with the Parent Merger or the severance plan formerly
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maintained by Community Bankshares, Inc. in the case of Employees
formerly employed by such entity, copies of which are included in
Exhibit 2.6(a)(iii). An Employee's service with Seller and financial
institutions acquired by Seller shall be deemed to be service with
Purchaser for purposes of determining the amount of such severance
benefits.
(b) After the execution of this Agreement, Seller will continue its
normal employment practices in staffing the Branch Offices; however, Seller
makes no representations or warranties about whether any of the Employees who
become employees of Purchaser will remain employed at the Branch Offices after
the Effective Time. Seller will use its reasonable best efforts to:
(i) maintain the Employees as employees of Seller at the
Branch Offices until the Effective Time;
(ii) refrain from dissuading any Employee from accepting an offer
of employment with Purchaser; and
(iii) refrain from recruiting Employees for alternate positions
with Seller, provided that, notwithstanding the foregoing, Seller may
transfer or reassign an Employee who applies for any available position
with Seller or an affiliate of Seller which is publicly advertised or of
which Seller provides notice to its employees with qualifications
similar to those of such Employee.
(c) Seller shall affirmatively advise the Employees that their current
positions with Seller will terminate as of the Effective Time. Any Employee
whose employment shall be terminated for any reason prior to the Effective Time
shall be dealt with by Seller in its sole and absolute discretion. Any Employee
who, for any reason, elects not to accept an offer of employment from Purchaser
shall be deemed to be part of Seller's pool of unassigned employees and may,
after the Effective Time, be assigned to any openings in Sellers' banking
system. Seller agrees that, for a period of 12 months after the Closing, it will
not solicit for employment any Employee who remains employed by Purchaser.
(d) After the execution of this Agreement and subject to any legal
restrictions, Seller shall permit Purchaser, at reasonable times and upon
reasonable notice, to examine and inspect Seller's records relating to Employees
and to meet with Employees for training and other purposes which are consistent
with the purposes of this Agreement.
Section 2.7. Records and Data Processing, etc.
(a) As of the Effective Time, Purchaser shall become responsible for
maintaining the files, documents and records referred to in this Agreement.
Purchaser will preserve and safekeep them as required by applicable law and
sound banking practice for the joint benefit of Seller and Purchaser. After the
Effective Time, Purchaser will permit Seller and its representatives, for
reasonable cause, at reasonable times and upon reasonable notice, to examine,
inspect, copy and reproduce any such files, documents or records, and to have
similar access to such records and Seller's former employees, as may be
reasonably necessary for purposes of preparation of required records and reports
(including regulatory and tax reports and returns) and as may be required in
connection with any third party litigation.
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(b) As of the Effective Time, Seller will permit Purchaser and its
representatives, for reasonable cause, at reasonable times and upon reasonable
notice, to examine, inspect, copy and reproduce files, documents or records
retained by Seller regarding the assets and liabilities transferred under this
Agreement as Purchaser deems reasonably necessary.
(c) For a period of 90 days after the Effective Time, the party
providing copies of records shall do so without charge; thereafter it may charge
its customary rate for such copies.
(d) It is understood that certain of Seller's records, including
certificates of deposit, may be available only in electronic form or in the form
of photocopies, film copies or other nonoriginal and non-paper media.
(e) To the extent not prepared or completed at the time of the execution
of this Agreement, Seller will work with Purchaser to prepare mutually
satisfactory Schedules of the Transferred Assets and the Deposit Liabilities.
Section 2.8. Security.
As of the Effective Time, Purchaser shall be solely responsible for the
security of and insurance on all persons and property located in or about the
Branch Offices.
Section 2.9. Taxes and Fees Proration of Certain Expenses.
Purchaser shall not be responsible for, or have any liability with
respect to, taxes on any income to Seller arising out of this transaction.
Purchaser shall not be responsible for any income tax liability of Seller
arising from the business or operations of the Branch Offices before the
Effective Time, and Seller shall not be responsible for any tax liabilities of
Purchaser arising from the business or operations of the Branch Offices after
the Effective Time. Utility payments, telephone charges, real property taxes,
personal property taxes, rent, salaries, deposit insurance premiums or
assessments, maintenance items, other ordinary operating expenses of the Branch
Offices and other expenses related to the liabilities assumed or assets
purchased hereunder shall be prorated between the parties as of the Effective
Time. To the extent any such item has been prepaid by Seller for a period
extending beyond the Effective Time, there shall be a proportionate monetary
adjustment in favor of Seller. Purchaser shall be responsible for the payment of
any non-delinquent assessments. Seller and Purchaser shall each be responsible
for their own costs with respect to the preparation and filing of any tax
returns, as well as the preparation, review and analysis of the allocation
statements and any forms or statements prepared in connection with the
allocation of the final Purchase Price.
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Section 2.10. Real Property.
(a) Title Matters.
(i) Seller agrees to deliver to Purchaser as soon as reasonably
possible upon Purchaser's request copies of all title information in
possession of Seller, including, but not limited to, title insurance
policies, attorneys' opinions on title, surveys, covenants, deeds and
easements relating to the Real Property and the leased Branch Office
locations. Such delivery shall constitute no warranty by Seller as to
the accuracy or completeness thereof or that Purchaser is entitled to
rely thereon.
(ii) Purchaser agrees to notify Seller, in writing within 30
calendar days after the date of this Agreement, of any mortgages,
pledges, material liens, encumbrances, reservations, tenancies,
encroachments, overlaps or other title exceptions, survey objections, or
zoning or similar land use violations (excluding legal but
non-conforming uses) or material engineering or structural problems
related to the Real Property to which Purchaser reasonably objects (the
"Title Defects"). If Purchaser does not notify Seller of Title Defects
within such time period, Purchaser shall be deemed to have waived its
rights under this Section 2.10. Purchaser agrees that Title Defects
shall not include real property taxes not yet due and payable or
easements, restrictions, tenancies, survey matters or other title
matters and rights of way which do not materially interfere with the use
of the Real Property as such facilities are currently utilized.
Following receipt of any such notice from Purchaser, Seller shall make a
good faith effort to correct any such Title Defect to Purchaser's
reasonable satisfaction, provided, however, that Seller shall not be
obligated to bring any lawsuit or make any payments of money (except to
pay liens that Seller does not dispute in good faith) to cure a Title
Defect. If Seller is unable or unwilling to cure any such Title Defects
to Purchaser's reasonable satisfaction, Purchaser shall have the option
to receive title in the then-existing condition or to enter into the
lease of such Branch Office described in Section 2.10(a)(iv).
(iii) Purchaser shall have the right to update its evaluation of
Title Defects up to 10 business days prior to Closing for any changes
which may have arisen between the date of Purchaser's original
evaluation and the Closing Date. If such update indicates that any Title
Defects have been placed of record since the date of Purchaser's
original title search, and Purchaser reasonably objects thereto in
writing, then Seller shall make a good faith effort to cure any such
Title Defect to Purchaser's reasonable satisfaction, provided that
Seller shall not be obligated to bring any lawsuit or make any payments
of money (except to pay liens that Seller does not dispute in good
faith) to cure a Title Defect. If Seller is unable or unwilling to cure
any such Title Defect, Purchaser shall have the option to receive title
in the then-existing condition or to enter into the lease of such Branch
Office described in Section 2.10(a)(iv).
(iv) In the event Purchaser notifies Seller of an unacceptable
Title Defect and does not desire to purchase the applicable Branch
Office, Seller shall lease such Branch Office to Purchaser at existing
market rates for a term of 10 years. The parties agree that if they
cannot agree upon a rent to be payable for any such Branch Office to be
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leased to Purchaser under this provision, the "market rate" shall be
determined by an appraisal to be conducted by an appraiser acceptable to
both parties, with the cost of such appraisal to be shared equally by
both parties. The right to elect a lease (in lieu of purchase) of a
Branch Office under this Section 2.10(a)(iv) will continue until 10
business days prior to Closing, at which time such right will lapse.
(b) Environmental Matters.
(i) Seller agrees to deliver to Purchaser as soon as reasonably
possible upon Purchaser's request copies of all environmental studies,
reports and audits in Seller's possession related to the Branch Offices.
(ii) Purchaser shall have the right, but not the obligation, at
its sole cost and expense, to cause such investigations and tests to be
made as it deems necessary to determine whether there has been any soil,
surface water, groundwater, or building space contamination on or under
the Real Property. Seller shall provide reasonable assistance to
Purchaser and/or its agents or contractors in their evaluation and
testing of the Real Property and Seller shall provide Purchaser and/or
its agents or contractors access to pertinent records and documents.
Seller authorizes Purchaser and/or its agents or contractors to contact
governmental agencies regarding the environmental status of the Real
Property. Purchaser shall report the results of any such investigations
or tests to Seller no later than 30 days after the date of this
Agreement, provided, however, that without the prior written consent of
Seller, which consent will not be unreasonably withheld, and execution
of a satisfactory property access agreement, Purchaser shall not conduct
subsurface testing, any ground water monitoring or install any test well
or undertake any other investigation which requires a permit or license
from, or the reporting of the investigation or the results thereof to, a
state or local environmental regulatory authority or the United States
Environmental Protection Agency. If Purchaser objects to any material
adverse environmental condition which impacts a piece of Real Estate,
Seller shall have the right, but not the obligation, to cure any such
material adverse environmental condition which is discovered by
Purchaser's investigation. If at the end of the 30-day period Seller is
unable or unwilling to cure such problem, Purchaser shall have the
option to accept the premises in the then-existing condition or to enter
into the lease of such Branch Office described in Section 2.10(b)(iii).
(iii) In the event Purchaser notifies Seller of a material
adverse environmental condition relating to a piece of Real Estate and
does not desire to purchase the applicable Branch Office, Seller shall
lease such Branch Office to Purchaser at existing market rates for a
term of 10 years. The parties agree that if they cannot agree upon a
rent to be payable for any such Branch Office to be leased to Purchaser
under this provision, the "market rate" shall be determined by an
appraisal to be conducted by an appraiser acceptable to both parties,
with the cost of such appraisal to be shared equally by both parties.
The right to elect a lease (in lieu of purchase) of a Branch Office
under this Section 2.10(b)(iii) will continue until 10 business days
prior to Closing, at which time such right will lapse.
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ARTICLE III
CLOSING AND EFFECTIVE TIME
Section 3.1. Effective Time.
The purchase of assets and assumption of liabilities provided for in
this Agreement shall occur at a closing (the "Closing") to be held at the
executive offices of BNH in Manchester, New Hampshire at 10:00 a.m., local time,
or at such other time and place as the parties shall mutually agree, on a date
to be mutually agreed upon between the parties, which date shall be after the
closing of the Parent Merger and after the receipt of all Regulatory Approvals,
provided that the Closing shall occur on or before June 30, 1998, unless
reasonably extended by Seller after reasonable notice to Purchaser to a date
which is not later than 180 days after consummation of the Parent Merger. The
effective time of the transactions contemplated by this Agreement (the
"Effective Time") shall be 5:00 p.m., local time, on the day on which the
Closing occurs (the "Closing Date").
Section 3.2. Closing.
(a) All actions taken and documents delivered at the Closing shall be
deemed to have been taken and executed simultaneously, and no action shall be
deemed taken nor any document delivered until all have been taken and delivered.
(b) At the Closing, subject to all the terms and conditions of this
Agreement, Seller shall execute and deliver to Purchaser or, in the case of
subsections (b) (5), (6), (7) and (8), make reasonably available to Purchaser:
(1) quitclaim deeds for the Real Property in the form of Exhibit
3.2(b)(1), pursuant to which the Real Property shall be transferred to
Purchaser with quitclaim covenants (the "Quitclaim Deed");
(2) a Xxxx of Sale, in substantially the form attached hereto as
Exhibit 3.2(b)(2) (the "Xxxx of Sale"), transferring to Purchaser all of
Seller's interest in the Personal Property and in the Loans;
(3) an Assignment and Assumption Agreement, in substantially the
form attached hereto as Exhibit 3.2(b)(3) (the "Assignment and
Assumption Agreement"), assigning Seller's interest in the Real Property
Leases, the Equipment Leases, the Tenant Leases, the Safe Deposit
Contracts and the Deposit Liabilities;
(4) subject to Section 7.6(b), landlord consents, in
substantially the form attached hereto as Exhibit 3.2(b)(4) (the
"Landlord Consents"), that are required to effect the assignment of the
Real Estate Leases set forth in the Assignment and Assumption Agreement;
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(5) Seller's keys to the safe deposit boxes and Seller's records
related to the safe deposit box business at the Branch Offices;
(6) Seller's files and records related to the Loans;
(7) Seller's records related to the Deposit Liabilities
assumed by Purchaser;
(8) the Coins and Currency;
(9) immediately available funds in the net amount shown as owing
to Purchaser by Seller on the Initial Closing Statement, if any;
(10) such of the other Transferred Assets to be purchased as
shall be capable of physical delivery;
(11) a certificate of a proper officer of Seller, dated as of the
Closing Date, in the form of Exhibit 3.2(b)(11), certifying to the
fulfillment of the conditions to the obligation of Purchaser contained
in Sections 8.1 and 8.2;
(12) copies of (i) the articles of incorporation and bylaws of
Seller and (ii) a resolution of the Board of Directors of Seller
approving the Agreement and the transactions contemplated hereby;
(13) the Initial Closing Statement;
(14) lease agreements for any Branch Offices to be leased to the
Purchaser under the provisions of Section 2.10;
(15) Seller's resignation as trustee or custodian, as applicable,
with respect to each XXX or Xxxxx Plan account included in the Deposit
Liabilities and designation of Purchaser as successor trustee or
custodian with respect thereto, as contemplated by Section 7.11; and
(16) such certificates and other documents as Purchaser and its
counsel may reasonably require (i) to evidence receipt by Seller of all
necessary regulatory authorizations and approvals for the consummation
by Seller of the transactions provided for in this Agreement and (ii) to
effect the transactions provided for in this Agreement.
It is understood that the items listed in subsections (b)(5) and (b)(8)
shall be transferred after the Branch Offices have closed for business on the
Closing Date.
(c) At the Closing subject to all the terms and conditions of this
Agreement, Purchaser shall execute and deliver to Seller:
(1) the Assignment and Assumption Agreement;
17
(2) a certificate and receipt acknowledging the delivery and
receipt of possession of the Transferred Assets;
(3) immediately available funds in the net amount shown as owing
to Seller by Purchaser on the Initial Closing Statement, if any;
(4) a certificate of a proper officer of Purchaser, dated as of
the Closing Date, in the form of Exhibit 3.2(c)(4), certifying to the
fulfillment of the conditions to the obligation of Seller contained in
Sections 9.1 and 9.2;
(5) copies of (i) the articles of incorporation and bylaws of
Purchaser and (ii) a resolution of the Board of Directors of Purchaser
approving the Agreement and the transactions contemplated hereby;
(6) purchaser's acceptance of its appointment as successor
trustee or custodian, as applicable, of the XXX and Xxxxx Plan accounts included
in the Deposit Liabilities and assumption of the fiduciary obligations of the
trustee or custodian with respect thereto, as contemplated by Section 7.11;
(7) the Initial Closing Statement; and
(8) such certificates and other documents as Seller and its
counsel may reasonably require (i) to evidence the receipt by Purchaser of all
necessary regulatory authorizations and approvals for the consummation by
Purchaser of the transactions provided for in this Agreement and (ii) to effect
the transactions provided for in this Agreement.
(d) All instruments, agreements and certificates described in this
Section 3.2 shall be in form and substance reasonably satisfactory to the
parties' respective legal counsel.
Section 3.3. Post-Closing Adjustments.
(a) Not later than 20 business days after the Effective Time (the
"Post-Closing Balance Sheet Delivery Date"), Seller shall deliver to Purchaser a
balance sheet dated as of the Effective Time and prepared in accordance with
generally accepted accounting principles consistently applied reflecting the
assets sold and assigned and the liabilities transferred and assumed hereunder
(the "Post-Closing Balance Sheet") together with a copy of Seller's calculation
of the adjusted Purchase Price and amounts payable thereunder, as reflected in a
final closing statement (the "Final Closing Statement"). Seller shall afford
Purchaser and its accountants and attorneys the opportunity to review all work
papers and documentation used by Seller in preparing the Post-Closing Balance
Sheet and the Final Closing Statement. Within 10 business days following the
Post-Closing Balance Sheet Delivery Date, Seller and Purchaser shall meet at the
executive offices of BNH in Manchester, New Hampshire at 10:00 a.m., local time,
or at such other time and place as the parties shall mutually agree, to effect
the transfer of any funds as may be necessary to reflect changes in such assets
and liabilities between the Pre-Closing Balance Sheet and the Post-Closing
Balance Sheet and resulting changes in the Purchase Price, as reflected in the
Final Closing Statement, together with interest thereon computed from the
Effective Time to the Post-Closing Balance Sheet Delivery Date at the applicable
Federal Funds Rate (as hereinafter defined).
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(b) In the event that a dispute arises as to the appropriate amounts to
be paid to either party on the Post-Closing Balance Sheet Delivery Date, each
party shall pay to the other on such Post-Closing Balance Sheet Delivery Date
all amounts other than those as to which a dispute exists. Any disputed amounts
retained by a party which are later found to be due to the other party shall be
paid to such other party promptly upon resolution with interest thereon from the
Effective Time to the date paid at the applicable Federal Funds Rate.
(c) The "Federal Funds Rate" shall be the mean of the high and low rates
quoted for Federal Funds in the Money Rates Column of The Wall Street Journal
adjusted as such mean may increase or decrease during the period between the
Effective Time and the date paid.
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ARTICLE IV
INDEMNIFICATION
Section 4.1. Seller's Indemnification of Purchaser.
(a) Subject to any limitations in Sections 4.1(b) and 5.8(e) or
otherwise contained in this Agreement, Seller shall indemnify, hold harmless and
defend Purchaser from and against (i) any breach by Seller of any representation
or warranty contained herein, (ii) claims or liabilities relating to any Title
Defect or environmental contamination existing prior to the Effective Time in
any Branch Office leased to the Purchaser under the provisions of Section
2.10(a)(iv) or Section 2.10(b)(iii) and (iii) all claims, losses, liabilities,
demands and obligations, including reasonable attorneys' fees and expenses,
arising out of any actions, suits or proceedings commenced prior to the
Effective Time (other than proceedings to prevent or limit the consummation of
this transaction) relating to Seller's operations at the Branch Offices; and,
except as otherwise provided in this Agreement, Seller shall further indemnify,
hold harmless and defend Purchaser from and against all claims, losses,
liabilities, demands and obligations, including reasonable attorneys' fees and
expenses, real estate taxes, intangibles and franchise taxes, sales and use
taxes, social security and unemployment taxes, all accounts payable and
operating expenses (including salaries, rents and utility charges) incurred by
Seller prior to the Effective Time and which are claimed or demanded on or after
the Effective Time, or which arise out of any actions, suits or proceedings
commenced on or after the Effective Time, in connection with operations or
transactions occurring prior to the Effective Time and which involve the Branch
Offices, the Transferred Assets, the liabilities retained by Seller pursuant to
this Agreement or the Employees.
(b) Purchaser's sole remedy for a breach of the representations and
warranties contained in Section 5.11 shall be to require Seller to purchase any
Loans which materially breach such representation and warranty at a price equal
to the unpaid principal amount of the Loan plus accrued interest thereon as of
the date of repurchase by Seller (a "Purchase Right"). The Purchase Right can be
exercised only for a period ending on the earlier of 30 days after discovery of
such breach or one year after the Closing Date. Alternatively, the parties may
agree to extend the exercise period with respect to a particular Loan or group
of Loans and permit Purchaser to continue its customary processing and
collection efforts with respect to such Loans.
Section 4.2. Purchaser's Indemnification of Seller.
Purchaser shall indemnify, hold harmless and defend Seller from and
against any breach by Purchaser of any representation or warranty contained
herein and all claims, losses, liabilities, demands and obligations, including
reasonable attorneys' fees and expenses, real estate taxes, intangibles and
franchise taxes, sales and use taxes, social security and unemployment taxes,
all accounts payable and operating expenses (including salaries, rents and
utility charges), which Seller may receive, suffer or incur in connection with
operations and transactions occurring after the Effective Time and which involve
the Branch Offices, the Transferred Assets, the liabilities assumed pursuant to
this Agreement or the Employees.
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Section 4.3. Claims for Indemnity.
(a) A claim for indemnity under Sections 4.1 or 4.2 of this Agreement
may be made by the claiming party at any time prior to (i) two years after the
Effective Time in case of a claim under Section 4.1(a)(ii) and (ii) one year
after the Effective Time for all other items by the giving of written notice
thereof to the other party, provided that there shall be no limitation on the
time when Seller may submit a claim for indemnification relating to the Real
Property Leases and on Purchaser's obligation to indemnify Seller for any such
claim pursuant to Section 4.2. In the event that any such claim is made within
the prescribed period, the indemnity relating to such claim shall survive until
such claim is resolved. Claims not made within such period shall cease and no
indemnity shall be made therefor.
(b) Promptly after receipt by either party of notice of the assertion of
any claim or the commencement of any action, suit or proceeding with respect to
which a claim for indemnification will be made under this Agreement, such party
(the "Indemnified Party") shall give written notice thereof to the other party
(the "Indemnitor") and 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, it shall have been
materially prejudiced 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
that there may be defenses available to the Indemnified Party which are
different from or in addition to those available to the Indemnitor. 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
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
4.1, 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.
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Section 4.4. Limitations on Indemnification.
Notwithstanding anything to the contrary contained in this Article IV,
no indemnification shall be required to be made by either party until the
aggregate amount of all such claims by a party exceeds $100,000, provided that
this limitation shall not be applicable to indemnification obligations of the
parties hereto relating to the Real Property Leases. Once such aggregate amount
exceeds $100,000, such party shall thereupon be entitled to indemnification for
all amounts in excess of such $100,000. In addition, the parties shall have no
obligation under this Articles IV for any consequential liability, damage or
loss the indemnified party may suffer as the result of any demand, claim or
lawsuit.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller hereby represents and warrants to Purchaser as follows:
Section 5.1. Corporate Organization.
Seller is an "insured depository institution," as defined in Section
3(c)(2) of the Federal Deposit Insurance Act, as amended (the "FDIA"), duly
organized, validly existing and in good standing under the laws of the State of
New Hampshire.
Section 5.2. Authority.
Seller has the power and authority to enter into and perform this
Agreement. This Agreement and the execution, delivery and performance hereof
have been, or prior to the Closing will be, duly authorized and approved by the
Board of Directors of Seller, and this Agreement constitutes a valid and binding
obligation of Seller, enforceable against Seller in accordance with its terms,
except as enforcement may be limited by federal and state regulators of Seller
or 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 5.3. Non-Contravention.
The execution and delivery of this Agreement by Seller do not and,
subject to the receipt of all required approvals and consents, the consummation
of the transactions contemplated by this Agreement will not constitute (i) a
breach or violation of or default under any law, rule, regulation, judgment,
order, governmental permit or license, agreement, indenture or instrument of
Seller or to which Seller is subject, which breach, violation or default would
have a material and adverse effect on Seller or the business or properties of
the Branch Offices, or (ii) a breach or violation of or a default under the
articles of incorporation or bylaws of Seller or any material contract or other
instrument to which Seller is a party or by which Seller is bound.
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Section 5.4. Compliance with Law.
The business and operations of the Branch Offices have been and are
being conducted in accordance with all applicable laws, rules and regulations of
all authorities, the penalty or liability for the violation of which, if imposed
or asserted, could have a material adverse effect on the business, operations,
revenues, financial condition, property or business properties of the Branch
Offices.
Section 5.5. Legal Proceedings.
There are no actions, suits or proceedings, whether civil, criminal or
administrative, pending or, to Seller's knowledge, threatened against or
affecting Seller which would be reasonably likely to have a material adverse
effect on the Branch Offices, Transferred Assets, Deposit Liabilities or
consummation of the transactions contemplated hereby.
Section 5.6. No Brokers.
All negotiations relative to this Agreement and the transactions
contemplated hereby have been carried on by Seller and Purchaser, and there has
been no participation or intervention by any other person, firm or corporation
employee or engaged by or on behalf of Seller in such a manner as to give rise
to any valid claim against Seller or Purchaser for a brokerage commission,
finder's fee or like commission.
Section 5.7. Personal Property.
Seller owns, and will convey to Purchaser at the Closing, all of
Seller's right, title and interest to all of the Personal Property free and
clear of any mortgages, liens, security interests or pledges.
Section 5.8. Real Property and the Leased Branch Offices.
(a) Seller has no knowledge of any condemnation proceedings pending or
threatened against the Real Property and the leased Branch Office locations.
(b) To Seller's knowledge the Real Property and the leased Branch Office
locations are not subject to any claim, demand, suit, proceeding or litigation
of any kind, pending or outstanding, which would materially affect or limit
Purchaser's use and enjoyment of the Real Property and the leased Branch Office
locations or which would materially affect or restrict Seller's right or ability
to enter into this Agreement and consummate the transactions contemplated
hereby.
(c) To Seller's knowledge, (i) no fact or condition exists which would
result in the permanent termination or material impairment of access to the Real
Property and the leased Branch Office locations from adjoining public streets or
highways or in the permanent discontinuance of necessary utilities services to
the Real Property and the leased Branch Office locations and (ii) all
sanitation, plumbing, refuse disposal and similar facilities servicing the
Branch Offices are in material compliance with applicable governmental
regulations.
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(d) To Seller's knowledge, there are no unpaid assessments in connection
with the Real Property and the leased Branch Office locations.
(e) Until the Closing, Purchaser's sole remedy for a breach of the
representations and warranties in this Section 5.7 shall be as provided in
Section 2.10(a).
Section 5.9. Employees.
No Employee located in any of the Branch Offices is a party to any
collective bargaining, employment, severance, termination, or change of control
agreement or represented by a labor organization of any type other than Seller's
established terms of employment and severance policies. Seller is unaware of any
efforts during the past three years to unionize or organize the employees of any
of the Branch Offices.
Section 5.10. Assumed Contracts.
Each third party contract to be assumed by Purchaser pursuant to this
Agreement is valid and subsisting in full force and effect and Seller has
performed in all material respects all obligations required to be performed
thereunder, and no condition exists which constitutes, or with notice or lapse
of time, or both, would constitute, a material default.
Section 5.11. Loans.
(a) Each Loan was made in the ordinary course of business, has been
properly executed by the parties thereto, represents the valid, and binding
obligation of the obligor, enforceable by the holder thereof in accordance with
its terms, is free from any material defenses, contains customary enforcement
provisions such that the rights and remedies of the holder thereof are adequate
for enforcement of the Loans, and, unless approved by Seller and documented in
its files, no material provision of a Loan has been waived.
(b) Each Loan (such term to include, for purposes of this paragraph, the
principal documents relating in any way to such Loans, including notes,
mortgages, security instruments and guarantees) complies in all material
respects with all requirements of applicable Federal, state and local laws and
regulations.
(c) Each Loan that is secured by collateral is secured by a perfected
mortgage or security interest in the collateral in favor of Seller as mortgagee
or secured party. No collateral has been released from the interest granted to
Seller, unless approved by Seller and documented in its files.
(d) No selection procedures believed to be adverse to Purchaser have
been utilized by Seller in selecting the Loans.
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(e) Purchaser's sole remedy for a breach of the representations and
warranties in this Section 5.11 shall be as provided in Section 4.1(b).
Section 5.12. Environmental Matters.
To Seller's knowledge, as of the date of this Agreement, (i) each Branch
Office is, in all material respects, in compliance with all applicable Federal,
state, local, or municipal statutes, ordinance, laws, and regulations and all
orders, rulings, or other decisions of any court, administrative agency or any
other governmental authority relating to the protection of the environment, (ii)
no Branch Office contains any asbestos material; and (iii) none of the Branch
Offices has in the past contained or presently contains any underground storage
tanks.
Section 5.13. Limitation of Representations and Warranties.
Except as may be expressly represented or warranted in this Agreement,
Seller makes no representation or warranty whatsoever with regard to any asset
being transferred to Seller or any liability or obligation being assumed by
Purchaser or as to any other matter or thing. Without limiting the foregoing,
except as may be otherwise specifically set forth in this Agreement, the Real
Property and the leased Branch Office locations and the Personal Property to be
purchased by Purchaser hereunder are sold as is, where is and with all faults,
with no warranties or representations whatsoever, except as may be expressly
represented or warranted in this Agreement.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser hereby represents and warrants to Seller as follows:
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Section 6.1. Corporate Organization.
Purchaser is an "insured depository institution," as defined in Section
3(c)(2) of the FDIA, duly organized, validly existing and in good standing under
the laws of the United States.
Section 6.2. Authority.
Purchaser has the power and authority to enter into and perform this
Agreement. This Agreement and the execution, delivery and performance hereof
have been duly authorized and approved by the Board of Directors of Purchaser,
and this Agreement constitutes a valid and binding obligation of Purchaser,
enforceable against Purchaser in accordance with its terms, except as
enforcement may be limited by federal and state regulators of Purchaser or 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 by Purchaser do not and,
subject to the receipt of all required approvals and consents, the consummation
of the transactions contemplated by this Agreement will not constitute (i) a
breach or violation of or default under any law, rule, regulation, judgment,
order, governmental permit or license, agreement, indenture or instrument of
Purchaser or to which Purchaser is subject, which breach, violation or default
would have a material and adverse effect on Purchaser, or (ii) a breach or
violation of or a default under the articles of incorporation or bylaws of
Purchaser or any material contract or other instrument to which Purchaser is a
party or by which Purchaser is bound.
Section 6.4. Legal Proceedings.
There are no actions, suits or proceedings, whether civil, criminal or
administrative, pending or, to Purchaser's knowledge, threatened against or
affecting Purchaser which would be reasonably likely to have a material adverse
effect on Purchaser or consummation of the transactions contemplated hereby.
Section 6.5. No Brokers.
All negotiations relative to this Agreement and the transactions
contemplated hereby have been carried on by Seller and Purchaser, and there has
been no participation or intervention by any other person, firm or corporation
employed or engaged by or on behalf of Purchaser in such a manner as to give
rise to any valid claim against Seller or Purchaser for a brokerage commission,
finder's fee or like commission.
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Section 6.6. Regulatory Matters.
To Purchaser's knowledge:
(a) As of the date hereof, without giving effect to the transactions
contemplated hereby, and following the consummation of the transactions
contemplated hereby, on a pro forma basis Purchaser will (i) remain "well
capitalized," as defined in Section 38(b)(1)(A) of the FDIA and the regulations
of the applicable federal banking agency thereunder, and (ii) meet all capital
requirements, standards and ratios required by each federal or state bank
regulator with jurisdiction over Purchaser;
(b) As of the date hereof, Purchaser has no reason to believe that it
will be required to divest any deposit liabilities, branches, loans or any
business or line of business as a condition to the receipt of any Regulatory
Approval;
(c) Purchaser and each other subsidiary of FEBI which is an "insured
depository institution," as defined in Section 3(c)(2) of the FDIA, was rated
"Satisfactory" or "Outstanding" following its most recent Community Reinvestment
Act examination by the regulatory agency responsible for its supervision; and
(d) As of the date hereof, Purchaser is not aware of any reason
relating to Purchaser or any affiliate of Purchaser why any Regulatory Approval
shall not be obtained.
Section 6.7. Financing Available.
Purchaser's ability to consummate the transactions contemplated hereby
is not contingent on raising any equity capital, obtaining specific financing
therefor, consent of any lender or any other matter, other than the receipt of
any required Regulatory Approval.
ARTICLE VII
OBLIGATIONS OF PARTIES PRIOR TO AND AFTER EFFECTIVE TIME
Section 7.1. Access to Branch Offices.
Seller shall afford to Purchaser and its authorized representatives,
upon prior notice and subject to Seller's normal security requirements, access
to the properties, books and records pertaining to the Branch Offices, including
but not limited to all books and records relating to the Deposit Liabilities,
the Loans, the Real Property, and the Personal Property and copies of the Real
Estate Leases, the Tenant Leases and the Equipment Leases in order that
Purchaser may have full opportunity to make reasonable investigations and to
engage in operational planning, at reasonable times without interfering with the
normal business and operations of the Branch Offices or the affairs of Seller
relating to the Branch Offices.
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Section 7.2. Regulatory Approvals.
(a) Purchaser will use its best efforts to obtain as
expeditiously as possible the Regulatory Approvals and will prepare and file
within 16 calendar days after the execution of this Agreement all necessary
applications of Purchaser for the Regulatory Approvals. As of the Closing Date,
Purchaser will satisfy each 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
regulatory authorities to which it must apply for any of the Regulatory
Approvals. Purchaser shall take no action which would adversely affect or delay
the ability of any party hereto to obtain any Regulatory Approval or to perform
its covenants and agreements under this Agreement.
(b) Seller shall use its reasonable best efforts to assist Purchaser in
obtaining the Regulatory Approvals. Seller shall provide Purchaser or the
appropriate regulatory authorities all information reasonably required to be
submitted by Purchaser in connection with the Regulatory Approvals.
Section 7.3. Conduct of Business; Maintenance of Properties.
From the date hereof until the Effective Time, Seller shall:
(a) carry on, or cause to be carried on, the business of the Branch
Offices substantially in the same manner as on the date hereof, use all
reasonable efforts to preserve intact its current business organization and
preserve its business relationships with depositors, customers and others having
business relationships with it and whose accounts will be retained at the Branch
Offices, provided, however, that Seller need not, in its sole discretion,
advertise or promote new or substantially new customer services in the principal
market area of the Branch Offices;
(b) cooperate with and assist Purchaser in ensuring the orderly
transition of the business of the Branch Offices to Purchaser from Seller; and
(c) maintain the Real Property, the leased Branch Office locations and
the Personal Property in their current condition, ordinary wear and tear
excepted.
Section 7.4. No Solicitation.
(a) After the execution of this Agreement, Seller will take reasonable
steps to avoid causing Branch Office customers to transfer all or part of their
Deposit or Loan business from the Branch Offices and for a period of one year
after the Closing Date Seller will use its reasonable best efforts to avoid
specifically targeting and soliciting customers assigned to the Branch Offices
utilizing any customer or mailing list which consists primarily of such
customers, provided, however, that these restrictions shall not restrict general
mass mailings, telemarketing calls, statement stuffers and other similar
communications directed to all the current customers of Seller or Seller's
affiliates, or to the public, or newspaper, radio or television advertisements
of a general nature, or otherwise prevent Seller from taking such actions as may
be required to comply with any applicable federal or state laws, rules or
regulations. In addition, these restrictions shall not
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restrict (i) the solicitation of customers whose accounts are normally
established or maintained in offices other than the Branch Offices; (ii) the
ability of Seller to install, operate and serve customers' needs through
automated teller machines at any location; or (iii) the solicitation of
customers whose accounts are excluded by either Purchaser or Seller from the
transactions contemplated by this Agreement. The obligations of the parties
hereunder shall survive the closing for a period of one year. In order to
facilitate Seller's compliance with the restrictions in this Section 7.4,
Purchaser will give prompt notice to Seller of any mailing or other form of
marketing that it determines is not consistent with such restrictions.
(b) Prior to the Closing Date, Purchaser shall not attempt directly to
solicit holders of Deposit Liabilities and/or the primary obligors under the
Loans (collectively, the "Branch Customers") through advertising specifically
referencing or targeted to such Branch Customers nor transact its business in a
way which would specifically induce such Branch Customers to close Deposit
Liability accounts and open accounts directly with Purchaser or which would
otherwise result in the transfer of all or a portion of an existing Deposit
Liability from Seller. Notwithstanding the foregoing sentence, Purchaser and its
affiliates shall be permitted to (i) engage in advertising, solicitations or
marketing campaigns not primarily directed to or targeted at the Branch
Customers, (ii) engage in lending, deposit, safe deposit, trust or other
financial services relationships existing as of the date hereof with the Branch
Customers through other branch offices of Purchaser, (iii) respond to
unsolicited inquiries by the Branch Customers with respect to banking or other
financial services and (iv) provide notices or communications relating to the
transactions contemplated hereby in accordance with the provisions hereof.
Section 7.5. Branch Office Operations.
Notwithstanding the foregoing, between the date of this Agreement and
the Effective Time, and except as may be otherwise required by a governmental or
regulatory authority, Seller shall not, without the prior written consent of
Purchaser, which consent shall not be unreasonably withheld:
(a) cause any Branch Office to engage or participate in any material
transaction or incur or sustain any obligation which is material to its
business, condition or operation;
(b) cause any Branch Office to transfer to Seller's other operations any
Loans or any material amount of other Transferred Assets, except for (i)
supplies, if any, which have unique function in Seller's business and ordinarily
would not be useful to Purchaser, (ii) cash and other normal intrabank transfers
which may be transferred in the ordinary course of business in accordance with
normal banking practices and (iii) signs, or those parts thereof, bearing the
name and/or logo of Seller or financial institutions acquired by Seller;
(c) except in the ordinary course of business at the unsolicited request
of depositors (i) cause the Branch Offices to transfer to Seller's other
operations any Deposit Liabilities or (ii) cause any of Seller's other
operations to transfer to the Branch Offices any Deposit Liabilities;
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(d) invest in any fixed assets on behalf of any Branch Office and in
replacements of furniture, furnishings and equipment except for normal
maintenance and refurbishings purchased or made in the ordinary course of
business;
(e) enter into or amend any continuing contract (other than Deposit
Liabilities and Loans) relating to the Branch Offices, which cannot be
terminated without cause and without payment of any amounts as a penalty, bonus,
premium or other compensation for termination, or which is not made in the
ordinary course of business;
(f) undertake any actions which are inconsistent with a program to use
all reasonable efforts to maintain good relations with customers of the Branch
Offices and with Employees, unless such actions are required or permitted by
this Agreement;
(g) hire into a Branch Office (other than to replace a departing
Employee and/or to bring the number of Employees at the Branch Offices to normal
staffing levels), increase the compensation of any Employee, or promote any of
the Employees, except where any such action is pursuant to and consistent with
Seller's customary procedures and policies;
(h) make any material change to its customary policies for setting rates
on deposits offered at the Branch Offices;
(i) amend or modify any of its promotional, deposit account, or Loan
practices at the Branch Offices, other than amendments or modifications in the
ordinary course of business in accordance with amendments or modifications
undertaken at Seller's branches other than the Branch Offices;
(j) enter into any employment, severance, termination, or change in
control contract or understanding with any Employee;
(k) reduce the service charges on any deposit product or fee-based
product (e.g. safe deposit boxes, money orders, cashier's checks), unless such
reduction is implemented generally in Seller's other branches;
(l) lease or sublease any space in any of the Branch Offices; or
(m) undertake any actions which would result in a Title Defect or fail
to take any action to remove or cure a Title Defect caused by Seller after the
date hereof.
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Section 7.6. Corporate and Other Consents.
(a) Seller shall use its reasonable best efforts to secure all
necessary corporate and other non-regulatory consents, except those involving
Purchaser, and Purchaser shall use its reasonable best efforts to secure all
necessary corporate and other non-regulatory consents, except those involving
Seller.
(b) (i) Seller shall use its reasonable best efforts (which shall not
require Seller to pay any money or other consideration to any person or
to initiate any claim or proceeding against any person) to cause every
landlord under a Real Property Lease, the consent of which is required
under the terms of such Real Property Lease to the assignment of such
Real Property Lease to Purchaser, to execute in favor of Purchaser a
Landlord Consent.
(ii) Purchaser shall provide such financial and other information
as shall be reasonably requested by landlords under the Real Property
Leases in connection with obtaining the Landlord Consents.
Notwithstanding anything to the contrary contained herein, Purchaser
agrees that the form of Landlord Consent with respect to a Real Property
Lease may be modified at the request of a landlord to incorporate any
and all conditions, terms and agreements such landlord may reasonably
require with respect to such landlord's required consent to the
assignment of such Real Property Lease to Purchaser, provided that such
conditions, terms and agreements do not constitute a material
modification or alteration of the terms, covenants and conditions of
such Real Property Lease or otherwise impose any burden on Seller or
Purchaser not otherwise contemplated by such Real Property Lease.
(iii) Notwithstanding anything to the contrary contained in this
Agrement, Seller's failure to obtain a Landlord Consent from a landlord
under a Real Property Lease after using its reasonable best efforts to
obtain the same shall not entitle Purchaser to terminate this Agreement
and Purchaser shall remain obligated to perform all of its obligations
hereunder with respect to the applicable Branch Office, including
without limitation the assumption of the Deposit Liabilities relating
thereto and the payment of the full Purchase Price without any reduction
or adjustment, but excluding only its obligation to assume such Real
Property Lease.
(iv) If Seller shall be unable to deliver a Landlord Consent with
respect to a Real Property Lease, Seller shall (a) make available to
Purchaser the space necessary for the operations of the applicable
Branch Office for a cost equal to the rent and other amounts payable
under such Real Property Lease and (b) indemnify and hold harmless
Purchaser against any cost and expense (including reasonable attorneys'
fees) relating to any claim, proceeding or action which may be commenced
by the applicable landlord, but in no event shall Purchaser be
indemnified for its actual or consequential damages or nonlitigation
costs or expenses relating to or arising from its eviction from such
space or relocation of such Branch Office. If Seller is unable to
deliver a Landlord Consent with respect to a Real Property Lease,
Purchaser shall be free to seek alternative space and shall not incur
any liability to the landlord or to Seller if it vacates the applicable
leased Branch Office. Any indemnification obligation of Seller pursuant
to this Section 7.6(b)(iv) shall be in addition to the obligations of
Seller pursuant to Section 4.1 of this Agreement.
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Section 7.7 Condemnation or Casualty.
Notwithstanding anything to the contrary contained in this Agreement, in
the event that a Branch Office suffers a casualty loss or condemnation or
similar proceedings begin, Purchaser shall remain obligated to complete the
transactions contemplated hereby without abatement of the Purchase Price,
provided, however:
(a) in the event of a condemnation, Seller shall assign to Purchaser its
damage claim and/or pay Purchaser the amount of any payments it receives from
the condemning authority;
(b) purchaser may elect not to assume any Real Property Lease with
respect to an affected Branch Office; and
(c) to protect against a casualty loss, Purchaser shall assume the risk
of loss from and after the date of this Agreement and shall insure the
improvements at the Branch Offices and the Personal Property for their full
insurable value.
Section 7.8. Data Processing Services.
Each party hereto agrees to provide to the other data processing and
transfer services as shall be reasonably necessary for the conversion and
transfer of information concerning the Deposit Liabilities and the Loans into
Purchaser's data processing system. As soon as practicable after execution of
this Agreement, each party hereto shall provide to the other computer file
instructions which maintain information on the deposit and loan accounts,
together with operational procedures necessary to implement the transfer of the
information to Purchaser. Seller and Purchaser shall each designate an
individual to serve as liaison from the date hereto through the Closing Date
concerning operational matters. Seller shall continue to provide post-closing
assistance to Purchaser as may be reasonably necessary.
Section 7.9. Public Announcements.
Seller and Purchaser agree that, from the date hereof, neither shall
make any public announcement or public comment regarding this Agreement or the
transactions contemplated hereby without first consulting with the other party
hereto and reaching an agreement upon the substance and timing of such
announcement or comment. Further, Seller and Purchaser acknowledge the
sensitivity of this transaction to the Employees and agree that prior to the
Effective Time no announcements or communications with the Employees shall be
made without the prior approval of Seller.
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Section 7.10. Tax Reporting.
Seller shall comply with all tax reporting obligations in connection
with transferred assets and liabilities on or before the Effective Time, and
Purchaser shall comply with all tax reporting obligations with respect to the
transferred assets and liabilities after the Effective Time.
Section 7.11. Actions With Respect to XXX and Xxxxx Plan Deposit Liabilities.
Seller shall (i) resign as of the close of business on the Closing Date
as the trustee or custodian, as applicable, of each XXX Deposit Liability and
Xxxxx Plan Deposit Liability of which it is the trustee or custodian, (ii) to
the extent permitted by the documentation governing each such XXX or Xxxxx Plan
and applicable law, appoint Purchaser as successor trustee or custodian, as
applicable, of each such XXX or Xxxxx Plan, and Purchaser agrees to accept each
such trusteeship or custodianship and assume all fiduciary obligations with
respect thereto as of the close of business on the Closing Date, and (iii)
deliver to the XXX grantor or Xxxxx Plan named fiduciary of each such XXX or
Xxxxx Plan such notice of the foregoing as is required by the documentation
governing each such XXX or Xxxxx Plan or applicable law. If, pursuant to the
terms of the documentation governing any such XXX or Xxxxx Plan or applicable
law, (i) Seller is not permitted to name Purchaser as successor trustee or
custodian or the XXX grantor or Xxxxx Plan named fiduciary objects in writing to
such assignment, or is entitled to, and does, in fact, name a successor trustee
or custodian other than Purchaser, or (ii) such XXX or Xxxxx Plan includes
assets, which are not Deposit Liabilities of Seller and are not being
transferred to Purchaser, and the assumption of the deposit liabilities of
Seller included in such XXX or Xxxxx Plan would result in a loss of
qualification of such XXX or Xxxxx Plan under the Code or applicable
regulations, all Deposits Liabilities of Seller held under such XXX or Xxxxx
Plan shall be excluded from the Deposit Liabilities (such excluded Deposit
Liabilities being herein called the "Excluded XXX/Xxxxx Deposit Liabilities").
ARTICLE VIII
CONDITIONS TO PURCHASER'S OBLIGATIONS
The obligation of Purchaser to complete the transactions contemplated in
this Agreement are conditioned upon fulfillment, on or before the Closing, of
each of the following conditions.
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Section 8.1. Representations and Warranties True.
The representations and warranties made by Seller in this Agreement
shall be true and correct in all material respects on and as of the Closing Date
as though such representations and warranties were made on and as of the Closing
Date, except for any representation and warranty which specifically relates to
an earlier date and any changes permitted by the terms hereof or consented to by
Purchaser.
Section 8.2. Obligations Performed.
Seller shall (i) deliver or make available to Purchaser those items
required by Section 3.2 hereof and (ii) perform and comply in all material
respects with all obligations and agreements required by this Agreement to be
performed or complied with by it prior to or on the Effective Time.
Section 8.3. Regulatory Approvals.
The approval or consent of all governmental or regulatory agencies
whose approval or consent is required for the consummation of the transactions
contemplated hereby by Purchaser and Seller shall have been obtained by
Purchaser and Seller, respectively, and all necessary conditions, including any
additional governmental approvals, permissions or consents, if any, including
the giving of all legally required notices and the expiration of all legally
required waiting or protest periods, of or relating to such approvals and
consents shall have been met (all of such approvals and consents being herein
collectively called the "Regulatory Approvals"), and such Regulatory Approvals
shall include no condition or requirement that, individually or in the
aggregate, would (i) result in a material adverse effect on Purchaser or (ii)
reduce the benefits to Purchaser of the transactions contemplated by the
Agreement in so material a manner that it would not have entered into this
Agreement had such condition or requirement been known as of the date hereof.
ARTICLE IX
CONDITIONS TO SELLER'S OBLIGATIONS
The obligation of Seller to complete the transactions contemplated in
this Agreement are conditioned upon fulfillment, on or before the Closing, of
each of the following conditions.
Section 9.1. Representations and Warranties True.
The representations and warranties made by Purchaser in this Agreement
shall be true and correct in all material respects on and as of the Closing Date
as though such representations and warranties were made on and as of the Closing
Date, except for any representation and warranty which specifically relates to
an earlier date and any changes permitted by the terms hereof or consented to by
Seller.
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Section 9.2. Obligations Performed.
Purchaser shall (i) deliver to Seller those items required by Section
3.2 hereof and (ii) perform and comply in all material respects with all
obligations and agreements required by this Agreement to be performed or
complied with by it prior to or on the Effective Time.
Section 9.3. Regulatory Approvals.
The Regulatory Approvals shall have been obtained, and such Regulatory
Approvals shall include no condition or requirement that, individually or in the
aggregate, would (i) result in a material adverse effect on Seller or (ii)
reduce the benefits to Seller of the transactions contemplated by the Agreement
in so material a manner that it would not have entered into this Agreement had
such condition or requirement been known as of the date hereof.
Section 9.4. Consummation of the Parent Merger.
The Parent Merger shall have been consummated in accordance with the
terms of the Parent Merger Agreement.
ARTICLE X
TERMINATION
Section 10.1. Methods of Termination.
This Agreement may be terminated in any of the following ways:
(a) by Seller if the Closing has not occurred on or before June 30, 1998
(provided that Seller is not then in material breach of any representation,
warranty, covenant or other agreement contained herein), unless reasonably
extended by Seller after reasonable notice to Purchaser to a date which is not
later than 180 days after consummation of the Parent Merger;
(b) at any time on or prior to the Effective Time by the mutual consent
in writing of Purchaser and Seller;
(c) by Purchaser in writing if the conditions set forth in Article VIII
of this Agreement shall not have been met by Seller or waived in writing by
Purchaser prior to the date fixed for Closing (provided that Purchaser is not
then in material breach of any representation, warranty, covenant or other
agreement contained herein);
(d) by Seller in writing if the conditions set forth in Article IX of
this Agreement shall not have been met by Purchaser or waived in writing by
Seller prior to the date fixed for Closing (provided that Seller is not then in
material breach of any representation, warranty, covenant or other agreement
contained herein);
35
(e) any time prior to the Effective Time, by Seller or Purchaser in
writing if the other shall have been in breach of any representation and
warranty in any material respect (as if such representation and warranty had
been made on and as of the date hereof and on the date of the notice of breach
referred to below), or in breach of any covenant, undertaking or obligation
contained herein, and such breach has not been cured by the earlier of 15
calendar days after the giving of notice to the breaching party of such breach
or the Effective Time, provided, however, that there shall be no cure period in
connection with any breach of Section 7.2 hereof, so long as such breach by
Purchaser was not caused by any action or inaction of Seller, and Seller may
terminate this Agreement immediately if regulatory applications are not filed
within 16 calendar days after the date of this Agreement as provided in that
section;
(f) by Seller in writing at any time after any applicable regulatory
authority has denied approval of any application of Purchaser for a Regulatory
Approval; or
(g) by either Purchaser or Seller in writing if the Parent Merger
Agreement is terminated in accordance with its terms.
Section 10.2. Procedure Upon Termination.
In the event of termination pursuant to Section 10.1 hereof, and except
as otherwise stated therein, written notice thereof shall be given to the other
party, and this Agreement shall terminate immediately upon receipt of such
notice unless an extension is consented to by the party having the right to
terminate. If this Agreement is terminated as provided herein,
(a) each party will return all documents, work papers and other
materials of the other party, including photocopies or other duplications
thereof, relating to this transaction, whether obtained before or after the
execution hereof, to the party furnishing the same;
(b) all information received by either party hereto with respect to the
business of the other party (other than information which is a matter of public
knowledge or which has heretofore been published in any publication for public
distribution or filed as public information with any governmental authority)
shall not at any time be used for any business purpose by such party or
disclosed by such party to third persons; and
(c) each party will pay its own expenses.
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Section 10.3. Payment of Expenses.
Should the transactions contemplated herein not be consummated because
of a party's intentional or grossly negligent breach of this Agreement, in
addition to such damages as may be recoverable in law or equity and as otherwise
provided herein, the other party shall be entitled to recover from the breaching
party upon demand, itemization and documentation, its reasonable outside legal,
accounting, consulting and other out-of-pocket expenses.
Section 10.4. Liquidated Damages.
It is understood and agreed that if the Closing does not occur on or
before the date specified in Section 10.1(a) (as may be extended in the sole
discretion of Seller pursuant to such section, the "Termination Date") actual
damages will be sustained due to the necessity of converting and merging data
relating to the Branch Offices to be sold hereunder, and that such damages will
be uncertain and difficult to ascertain. It is thus agreed and understood by
Purchaser and Seller that should the Closing fail to occur on or before the
Termination Date for any reason whatsoever other than (i) a failure of Seller to
materially comply with its representations, warranties, covenants or other
agreements contained herein and (ii) a failure of Purchaser to obtain a
Regulatory Approval (provided that such failure is not due to Purchaser's breach
of a covenant or other agreement contained herein), then Purchaser shall pay to
Seller, upon demand, the sum of $100,000 per day as liquidated damages for each
day after July 6, 1998 that the Closing does not occur, up to a maximum of 20
calendar days. Purchaser and Seller agree that said sum would be reasonable and
just compensation for the delay and not be punitive. Nothing contained in this
Section 10.4 shall preclude Seller from also exercising its rights under Article
X of this Agreement at any time after June 30, 1998.
ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.1. Completion of the Parent Merger.
Seller and Purchaser acknowledge that the completion of the transactions
contemplated by this Agreement are contingent and dependent upon consummation of
the Parent Merger. In the event that this Agreement is terminated as provided in
Section 10.1(g), upon such termination neither party shall be obligated in any
way to the other.
Section 11.2. Expenses.
Except as otherwise provided herein, Seller and Purchaser each shall pay
all of their own out-of-pocket expenses in connection with this Agreement,
including appraisal, accounting, consulting, professional and legal fees, if
any, whether or not the transactions contemplated by this Agreement are
consummated. Purchaser shall pay all (a) recording, filing or other fees, costs
and expenses (including fees, costs and expenses for (i) preparation of title
certificates or searches,
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surveys, inspections, environmental audits or other investigations, (ii) filing
of any forms (including without limitation tax forms) with governmental
instrumentalities in connection with the transfer of the Real Property or the
Personal Property and (iii) recording instruments or documents evidencing any
transfers of interests in Real Property), and (b) costs and expenses relating to
the preparation, execution and recording of assignments of mortgages, financing
statements, notes, security agreements or other instruments applicable to or
arising in connection with the transfer, assignment or assumption of the Loans
(and mortgages, financing statements, notes, security agreements and other
instruments relating thereto), the Real Property, the Real Property Leases or
the Personal Property.
Section 11.3. Amendment and Modification.
The parties hereto, by mutual consent, may amend, modify and supplement
this Agreement in such manner as may be agreed upon by them in writing.
Section 11.4. Waiver or Extension.
Except with respect to the Regulatory Approvals, either party, by
written instrument signed by a duly authorized officer, may extend the time for
the performance of any of the obligations or other acts of the other party and
may waive (a) any inaccuracies in the representations and warranties contained
herein or in any document delivered pursuant hereto or (b) compliance with any
of the undertakings, obligations, covenants or other acts contained herein.
Section 11.5. Successors and Assigns.
(a) This Agreement and all of the provisions hereof shall be binding
upon, and shall inure to the benefit of, the parties hereto and their permitted
assigns, but neither this Agreement nor any of the rights, interests or
obligations here under shall be assigned by either of the parties hereto without
the prior written consent of the other.
(b) This Agreement and all of the provisions hereof shall be binding
upon Bank of New Hampshire ("BNH"), a wholly-owned subsidiary of PHFG, upon
consummation of the merger of Seller with and into BNH (the "Bank Merger")
pursuant to an Agreement and Plan of Merger, dated as of December 15, 1997,
between Seller and BNH. It is understood and agreed by the parties hereto that
PHFG currently intends to cause consummation of the Bank Merger substantially
concurrently with consummation of the Parent Merger but that it is not obligated
to do so. In the event of consummation of the Bank Merger, BNH, in its capacity
as successor to CFX Bank, shall be deemed to be the Seller for all purposes of
this Agreement.
Section 11.6. Confidentiality.
Seller and Purchaser agree that the Confidentiality Agreement, dated as
of March 6, 1998, between Seller and Purchaser shall survive the execution
hereof and the consummation of the transactions contemplated hereby.
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Section 11.7. Addresses for Notices, Etc.
All notices, consents, waivers and other communications under this
Agreement must be in writing and will be deemed to have been duly given when (a)
delivered by hand (with written confirmation of receipt), (b) deposited in the
United States Mail by registered or certified mail, return receipt requested,
(c) sent by telecopier (with electronic confirmation of receipt), provided that
a copy is mailed by registered or certified mail, return receipt requested, or
(d) when received by the addressee, if sent by a nationally recognized overnight
delivery service (receipt requested), in each case to the appropriate addresses
and telecopier numbers set forth below (or to such other addresses and
telecopier numbers as a party may designate by notice to the other parties):
If to Seller:
Peoples Heritage Financial Group, Inc.
X.X. Xxx 0000
Xxx Xxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxx 00000-0000
Attn: Xxxxx X. Xxxxxxxx
Executive Vice President, General Counsel and Secretary
Fax: 000-000-0000
With a copy to:
Elias, Matz, Xxxxxxx & Xxxxxxx L.L.P.
000 00xx Xxxxxx, X.X.
Xxxxxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxxx, Esq.
Fax: 000-000-0000
If to Purchaser:
First Essex Bank, FSB
00 Xxxx Xxxxxx
X.X. Xxx 0000
Xxxxxxx, Xxxxxxxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxx
President and Chief Executive Officer
Fax: 000-000-0000
With a copy to:
Xxxxx, Xxxx & Xxxxx, LLP
Xxx Xxxx Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000-0000
Attn: Xxxxx X. Xxxxxx, Esq.
Fax: 000-000-0000
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Section 11.8. Counterparts.
This Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
Section 11.9. Headings.
The headings of the Sections and Articles of this Agreement are inserted
for convenience only and shall not constitute a part thereof or affect in any
way the meaning or interpretation of this Agreement.
Section 11.10. Governing Law.
This Agreement shall be governed by, and construed in accordance with,
the laws of the State of New Hampshire.
Section 11.11. Sole Agreement.
Except for the confidentiality agreement between Seller and Purchaser,
this Agreement and the exhibits and attachments hereto represent the entire
agreement between the parties hereto respecting the transactions contemplated
hereby and all prior or contemporaneous written or oral proposals, agreements in
principle, representations, warranties and understandings between the parties
with respect to such matters are superseded hereby and merged herein.
Section 11.12. Parties in Interest.
Nothing in this Agreement, express or implied, is intended or shall be
construed to confer upon or give to any person (other than the parties hereto,
their successors and permitted assigns) any rights or remedies under or by
reason of this Agreement, or any term, provision, condition, undertaking,
warranty, representation, indemnity, covenant or agreement contained herein.
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Section 11.13. 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.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their duly authorized officers as of the date first written
above.
FIRST ESSEX BANK, FSB
By: /s/ Xxxxxxx X. Xxxxxx
----------------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: President and Chief Executive Officer
CFX BANK
By: /s/ Xxxxx X. Xxxxxx
-----------------------------------------------
Name Xxxxx X. Xxxxxx
Title: Vice Chairman
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