PURCHASE AND ASSUMPTION AGREEMENT WHOLE BANK
WHOLE
BANK
ALL
DEPOSITS
AMONG
FEDERAL
DEPOSIT INSURANCE CORPORATION,
RECEIVER OF TEAMBANK,
N.A.
PAOLA,
KANSAS
FEDERAL
DEPOSIT INSURANCE CORPORATION
and
GREAT SOUTHERN
BANK
DATED
AS OF
MARCH
20, 2009
Module 1 –
Whole Bank w/ Loss Share – P&A
Version 1.02
March
16, 0000
|
XxxxXxxx,
X.X.
Xxxxx,
Xxxxxx
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TABLE
OF CONTENTS
ARTICLE
I
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DEFINITIONS
|
2
|
|||
ARTICLE
II
|
ASSUMPTION
OF LIABILITIES
|
8
|
|||
2.1
|
Liabilities
Assumed by Assuming Bank
|
8
|
|||
2.2
|
Interest
on Deposit Liabilities
|
10
|
|||
2.3
|
Unclaimed
Deposits
|
10
|
|||
2.4
|
Employee
Plans
|
10
|
|||
ARTICLE
III
|
PURCHASE
OF ASSETS
|
11
|
|||
3.1
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Assets
Purchased by Assuming Bank
|
11
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|||
3.2
|
Asset
Purchase Price
|
11
|
|||
3.3
|
Manner
of Conveyance; Limited Warranty;
Nonrecourse; Etc.
|
11
|
|||
3.4
|
Puts
of Assets to the Receiver
|
12
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|||
3.5
|
Assets
Not Purchased by Assuming Bank
|
13
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|||
3.6
|
Assets
Essential to Receiver
|
14
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|||
ARTICLE
IV
|
ASSUMPTION
OF CERTAIN DUTIES AND OBLIGATIONS
|
15
|
|||
4.1
|
Continuation
of Banking Business
|
15
|
|||
4.2
|
Agreement
with Respect to Credit Card Business
|
15
|
|||
4.3
|
Agreement
with Respect to Safe Deposit Business
|
16
|
|||
4.4
|
Agreement
with Respect to Safekeeping Business
|
16
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|||
4.5
|
Omitted
|
16
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|||
4.6
|
Agreement
with Respect to Bank Premises
|
16
|
|||
4.7
|
Agreement
with Respect to Leased Data
Processing
Equipment
|
16
|
|||
4.8
|
Agreement
with Respect to Certain
Existing
Agreements
|
||||
4.9
|
Informational
Tax Reporting
|
20
|
|||
4.10
|
Insurance
|
20
|
|||
4.11
|
Office
Space for Receiver and Corporation
|
21
|
|||
4.12
|
Agreement
with Respect to Continuation of Group
Health Plan Coverage for Former
Employees
|
21
|
|||
4.13
|
Agreement
with Respect to Interim Asset Servicing
|
22
|
|||
4.14
|
Reserved
|
||||
4.15
|
Agreement
with Respect to Loss Sharing
|
22
|
|||
4.16
|
Agreement
with Respect to Colorado National Bank
|
22
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Module 1 –
Whole Bank w/ Loss Share – P&A
Version 1.02
March
16, 2009
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ii
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TeamBank,
N.A.
Paola,
Kansas
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ARTICLE
V
|
DUTIES
WITH RESPECT TO DEPOSITORS OF THE FAILED BANK
|
22
|
|||
5.1
|
Payment
of Checks, Drafts and Orders
|
23
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|||
5.2
|
Certain
Agreements Related to Deposits
|
23
|
|||
5.3
|
Notice
to Depositors
|
23
|
|||
ARTICLE
VI
|
RECORDS
|
23
|
|||
6.1
|
Transfer
of Records
|
23
|
|||
6.2
|
Delivery
of Assigned Records
|
24
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|||
6.3
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Preservation
of Records
|
24
|
|||
6.4
|
Access
to Records; Copies
|
24
|
|||
ARTICLE
VII
|
FIRST
LOSS TRANCHE
|
26
|
|||
ARTICLE
VIII
|
ADJUSTMENTS
|
25
|
|||
8.1
|
Pro
Forma Statement
|
25
|
|||
8.2
|
Correction
of Errors and Omissions; Other Liabilities
|
||||
8.3
|
Payments
|
26
|
|||
8.4
|
Interest
|
26
|
|||
8.5
|
Subsequent
Adjustments
|
26
|
|||
ARTICLE
IX
|
CONTINUING
COOPERATION
|
27
|
|||
9.1
|
General
Matters
|
27
|
|||
9.2
|
Additional
Title Documents
|
27
|
|||
9.3
|
Claims
and Suits
|
27
|
|||
9.4
|
Payment
of Deposits
|
27
|
|||
9.5
|
Withheld
Payments
|
28
|
|||
9.6
|
Proceedings
with Respect to Certain Assets and Liabilities
|
28
|
|||
9.7
|
Information
|
29
|
|||
ARTICLE
X
|
CONDITION
PRECEDENT
|
29
|
|||
ARTICLE
XI
|
REPRESENTATIONS
AND WARRANTIES OF THE ASSUMING BANK
|
29
|
|||
ARTICLE
XII
|
INDEMNIFICATION
|
30
|
|||
12.1
|
Indemnification
of Indemnitees
|
30
|
|||
12.2
|
Conditions
Precedent to Indemnification
|
33
|
|||
12.3
|
No
Additional Warranty
|
34
|
|||
12.4
|
Indemnification
of Corporation and Receiver
|
34
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Module 1 –
Whole Bank w/ Loss Share – P&A
Version 1.02
March
16, 2009
|
iii
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TeamBank,
N.A.
Paola,
Kansas
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12.5
|
Obligations
Supplemental
|
34
|
|||||
12.6
|
Criminal
Claims
|
35
|
|||||
12.7
|
Limited
Guaranty of the Corporation
|
35
|
|||||
12.8
|
Subrogation
|
35
|
|||||
ARTICLE
XIII
|
MISCELLANEOUS
|
35
|
|||||
13.1
|
Entire
Agreement
|
35
|
|||||
13.2
|
Headings
|
35
|
|||||
13.3
|
Counterparts
|
36
|
|||||
13.4
|
Governing
Law
|
36
|
|||||
13.5
|
Successors
|
36
|
|||||
13.6
|
Modification;
Assignment
|
36
|
|||||
13.7
|
Notice
|
36
|
|||||
13.8
|
Manner
of Payment
|
37
|
|||||
13.9
|
Costs,
Fees and Expenses
|
37
|
|||||
13.10
|
Waiver
|
37
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|||||
13.11
|
Severability
|
37
|
|||||
13.12
|
Term
of Agreement
|
38
|
|||||
13.13
|
Survival
of Covenants, Etc.
|
38
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|||||
SCHEDULES
|
|||||||
2.1
|
Certain
Liabilities Assumed
|
40
|
|||||
2.1(a)
|
Excluded
Deposit Liability Accounts
|
41
|
|||||
3.1
|
Certain
Assets Purchased
|
42
|
|||||
3.2
|
Purchase
Price of Assets or Assets
|
44
|
|||||
4.15A
|
Single
Family Loss Share Loans
|
50
|
|||||
4.15B
|
Non-Single
Family Loss Share Loans
|
51
|
|||||
7
|
Calculation
of Deposit Premium
|
46
|
|||||
EXHIBITS
|
|||||||
4.13
|
Interim
Asset Servicing Arrangement
|
48 | |||||
4.15A
|
Single
Family Share-Loss Agreement
|
52
|
|||||
4.15B
|
Non-Single
Family Loss Share Agreement
|
82
|
Module 1 –
Whole Bank w/ Loss Share – P&A
Version 1.02
March
16, 2009
|
iv
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TeamBank,
N.A.
Paola,
Kansas
|
WHOLE
BANK
ALL DEPOSITS
THIS AGREEMENT, made and entered into as of the 20th
day of March, 2009, by and among the FEDERAL DEPOSIT INSURANCE CORPORATION,
RECEIVER of TEAMBANK,
N.A., PAOLA, KANSAS (the
"Receiver"), GREAT SOUTHERN
BANK, organized under the laws of the United States of America, and
having its principal place of business in SPRINGFIELD, MISSOURI (the
"Assuming Bank"), and the FEDERAL DEPOSIT INSURANCE CORPORATION,
organized under the laws of the United States of America and having its
principal office in Washington, D.C., acting in its corporate capacity (the
"Corporation").
WHEREAS, on
Bank Closing, the Chartering Authority closed TEAMBANK,
N.A.
(the "Failed Bank") pursuant to applicable law and the Corporation
was appointed Receiver thereof; and
WHEREAS, the
Assuming Bank desires to purchase certain assets and assume certain deposit and
other liabilities of the Failed Bank on the terms and conditions set forth in
this Agreement; and
WHEREAS,
pursuant to 12 U.S.C. Section 1823(c)(2)(A), the Corporation may provide
assistance to the Assuming Bank to facilitate the transactions contemplated by
this Agreement, which assistance may include indemnification pursuant to Article
XII; and
WHEREAS, the
Board of Directors of the Corporation (the "Board") has determined to provide
assistance to the Assuming Bank on the terms and subject to the conditions set
forth in this Agreement; and
WHEREAS, the
Board has determined pursuant to 12 U.S.C. Section 1823(c)(4)(A) that such
assistance is necessary to meet the obligation of the Corporation to provide
insurance coverage for the insured deposits in the Failed Bank.
NOW THEREFORE,
in consideration of the mutual promises herein set forth and other
valuable consideration, the parties hereto agree as follows:
Module 1 –
Whole Bank w/ Loss Share – P&A
Version 1.02
March
16, 2009
|
1
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TeamBank,
N.A.
Paola,
Kansas
|
ARTICLE
I
DEFINITIONS
Capitalized
terms used in this Agreement shall have the meanings set forth in this Article
I, or elsewhere in this Agreement. As used herein, words imparting the singular
include the plural and vice versa.
"Accounting
Records" means the general ledger
and subsidiary ledgers and supporting schedules which support the general ledger
balances.
"Acquired
Subsidiaries" means Subsidiaries of
the Failed Bank acquired pursuant to Section 3.1.
"Adversely
Classified" means, with respect to
any Loan or security, a Loan or security which, as of the date of the most
recent pertinent data made available to the Assuming Bank as part of the
Information Package, has been designated in the most recent report of
examination as "Substandard," "Doubtful" or "Loss" by the Failed Bank's
appropriate Federal or State Chartering Authority or regulator.
"Affiliate" of any Person means any
director, officer, or employee of that Person and any other Person (i) who is
directly or indirectly controlling, or controlled by, or under direct or
indirect common control with, such Person, or (ii) who is an affiliate of such
Person as the term "affiliate" is defined in Section 2 of the Bank Holding
Company Act of 1956, as amended, 12 U.S.C. Section 1841.
"Agreement" means this Purchase and
Assumption Agreement by and among the Assuming Bank, the Corporation and the
Receiver, as amended or otherwise modified from time to time.
"Assets"
means all assets of the Failed Bank purchased pursuant to Section 3.1. Assets
owned by Subsidiaries of the Failed Bank are not "Assets" within the meaning of
this definition.
"Assumed
Deposits" means
Deposits.
"Bank
Closing" means the close of
business of the Failed Bank on the date on which the Chartering Authority closed
such institution.
"Bank
Premises" means the banking
houses, drive-in banking facilities, and teller facilities (staffed or
automated) together with appurtenant parking, storage and service facilities and
structures connecting remote facilities to banking houses, and land on which the
foregoing are located, that are owned or leased by the Failed Bank and that are
occupied by the Failed Bank as of Bank Closing.
Module 1 –
Whole Bank w/ Loss Share – P&A
Version 1.02
March
16, 2009
|
2
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TeamBank,
N.A.
Paola,
Kansas
|
"Book
Value" means, with respect to
any Asset and any Liability Assumed, the dollar amount thereof stated on the
Accounting Records of the Failed Bank. The Book Value of any item shall be
determined as of Bank Closing after adjustments made by the Receiver for
differences in accounts, suspense items, unposted debits and credits, and other
similar adjustments or corrections and for setoffs, whether voluntary or
involuntary: The Book Value of a Subsidiary of the Failed Bank acquired by the
Assuming Bank shall be determined from the investment in subsidiary and related
accounts on the "bank only" (unconsolidated) balance sheet of the Failed Bank
based on the equity method of accounting. Without limiting the generality of the
foregoing, (i) the Book Value of a Liability Assumed shall include all accrued
and unpaid interest thereon as of Bank Closing, and (ii) the Book Value of a
Loan shall reflect adjustments for earned interest, or unearned interest (as it
relates to the "rule of 78s" or add-on-interest loans, as applicable), if any,
as of Bank Closing, adjustments for the portion of earned or unearned
loan-related credit life and/or disability insurance premiums, if any,
attributable to the Failed Bank as of Bank Closing, and adjustments for Failed
Bank Advances, if any, in each case as determined for financial reporting
purposes. The Book Value of an Asset shall not include any adjustment for loan
premiums, discounts or any related deferred income or fees, or general or
specific reserves on the Accounting Records of the Failed Bank.
"Business
Day"
means a day other than a Saturday, Sunday, Federal legal holiday or legal
holiday under the laws of the State where the Failed Bank is located, or a day
on which the principal office of the Corporation is closed.
"Chartering
Authority" means (i) with respect
to a national bank, the Office of the Comptroller of the Currency, (ii) with
respect to a Federal savings association or savings bank, the Office of Thrift
Supervision, (iii) with respect to a bank or savings institution chartered by a
State, the agency of such State charged with primary responsibility for
regulating and/or closing banks or savings institutions, as the case may be,
(iv) the Corporation in accordance with 12 U.S.C. Section 1821(c), with regard
to self appointment, or (v) the appropriate Federal banking agency in accordance
with 12 U.S.C. 1821 (c)(9).
"Commitment" means the unfunded
portion of a line of credit or other commitment reflected on the books and
records of the Failed Bank to make an extension of credit (or additional
advances with respect to a Loan) that was legally binding on the Failed Bank as
of Bank Closing, other than extensions of credit pursuant to the credit card
business and overdraft protection plans of the Failed Bank, if any.
"Credit
Documents" mean the agreements,
instruments, certificates or other documents at any time evidencing or otherwise
relating to, governing or executed in connection with or as security for, a
Loan, including without limitation notes, bonds, loan agreements, letter of
credit applications, lease financing contracts, banker's acceptances, drafts,
interest protection agreements, currency exchange agreements, repurchase
agreements, reverse repurchase agreements, guarantees, deeds of trust,
mortgages, assignments, security agreements, pledges, subordination or priority
agreements, lien priority agreements, undertakings, security instruments,
certificates, documents, legal opinions, participation agreements and
intercreditor agreements, and all amendments, modifications, renewals,
extensions, rearrangements, and substitutions with respect to any of the
foregoing.
Module 1 –
Whole Bank w/ Loss Share – P&A
Version 1.02
March
16, 2009
|
3
|
TeamBank,
N.A.
Paola,
Kansas
|
"Credit
File" means
all Credit Documents and all other credit, collateral, or insurance documents in
the possession or custody of the Assuming Bank, or any of its Subsidiaries or
Affiliates, relating to an Asset or a Loan included in a Put Notice, or copies
of any thereof.
"Data
Processing Lease" means any lease or
licensing agreement, binding on the Failed Bank as of Bank Closing, the subject
of which is data processing equipment or computer hardware or software used in
connection with data processing activities. A lease or licensing agreement for
computer software used in connection with data processing activities shall
constitute a Data Processing Lease regardless of whether such lease or licensing
agreement also covers data processing equipment.
"Deposit" means a deposit as
defined in 12 U.S.C. Section 1813(1), including without limitation, outstanding
cashier's checks and other official checks and all uncollected items included in
the depositors' balances and credited on the books and records of the Failed
Bank; provided,
that the term "Deposit" shall not include all or any portion of those deposit
balances which, in the discretion of the Receiver or the Corporation, (i) may be
required to satisfy it for any liquidated or contingent liability of any
depositor arising from an unauthorized or unlawful transaction, or (ii) may be
needed to provide payment of any liability of any depositor to the Failed Bank
or the Receiver, including the liability of any depositor as a director or
officer of the Failed Bank, whether or not the amount of the liability is or can
be determined as of Bank Closing.
"Equity
Adjustment" means the dollar amount
resulting by subtracting the Book Value, as of Bank Closing, of all Liabilities
Assumed under this Agreement by the Assuming Bank from the Book Value, as of
Bank Closing, of all Assets acquired under this Agreement by the Assuming Bank,
which may be a positive or a negative number.
"Failed
Bank Advances" means the total sums
paid by the Failed Bank to (i) protect its lien position, (ii) pay ad valorem
taxes and hazard insurance, and (iii) pay credit life insurance, accident and
health insurance, and vendor's single interest insurance.
"Fair
Market Value" means (i)(a) "Market
Value" as defined in the regulation prescribing the standards for real estate
appraisals used in federally related transactions, 12 C.F.R. § 323.2(g), and
accordingly shall mean the most probable price which a property should bring in a
competitive and open market under all conditions requisite to a fair sale, the
buyer and seller each acting prudently and knowledgeably, and assuming the price
is not affected by undue stimulus. Implicit in this definition is the
consummation of a sale as of a specified date and the passing of title from
seller to buyer under conditions whereby:
(1) Buyer and
seller are typically motivated;
(2) Both
parties are well informed or well advised, and acting in what they consider
their own best interests;
(3) A
reasonable time is allowed for exposure in the open market;
(4) Payment
is made in terms of cash in U.S. dollars or in terms of financial
arrangements
Module 1 –
Whole Bank w/ Loss Share – P&A
Version 1.02
March
16, 2009
|
4
|
TeamBank,
N.A.
Paola,
Kansas
|
comparable
thereto; and
(5) The
price represents the normal consideration for the property sold unaffected by
special or creative financing or sales concessions granted by anyone associated
with the sale;
as
determined as of Bank Closing by an appraiser chosen by the Assuming Bank from a
list of acceptable appraisers provided by the Receiver; any costs and fees
associated with such determination shall be shared equally by the Receiver and
the Assuming Bank, and (b) which, with respect to Bank Premises (to the extent,
if any, that Bank Premises are purchased utilizing this valuation method), shall
be determined not later than sixty (60) days after Bank Closing by an appraiser
selected by the Receiver and the Assuming Bank within seven (7) days after Bank
Closing; or (ii) with respect to property other than Bank Premises purchased
utilizing this valuation method, the price therefore as established by the
Receiver and agreed to by the Assuming Bank, or in the absence of such
agreement, as determined in accordance with clause (i)(a) above.
"First
Loss Tranche" means the dollar amount
of liability that the Assuming Bank will incur prior to the commencement of loss
sharing, which is the sum of (i) the Assuming Bank's asset premium (discount)
bid, as reflected on the Assuming Bank's bid form, plus (ii) the Assuming Bank's
Deposit premium bid, as reflected on the Assuming Bank's bid form, plus (iii)
the Equity Adjustment. The First Loss Tranche may be a positive or negative
number.
"Fixtures"
means those leasehold improvements, additions, alterations and installations
constituting all or a part of Bank Premises and which were acquired, added,
built, installed or purchased at the expense of the Failed Bank, regardless of
the holder of legal title thereto as of Bank Closing.
"Furniture
and Equipment" means the furniture and
equipment, other than motor vehicles, leased or owned by the Failed Bank and
reflected on the books of the Failed Bank as of Bank Closing, including without
limitation automated teller machines, carpeting, furniture, office machinery
(including personal computers), shelving, office supplies, telephone,
surveillance and security systems. Motor vehicles shall be considered other
assets and pass at Book Value.
"Indemnitees" means, except as
provided in paragraph (k) of Section 12.1, (i) the Assuming Bank, (ii) the
Subsidiaries and Affiliates of the Assuming Bank other than any Subsidiaries
or Affiliates of the Failed Bank that are or become Subsidiaries or Affiliates
of the Assuming Bank, and (iii) the directors, officers, employees and agents of
the Assuming Bank and its Subsidiaries and Affiliates who are not also present
or former directors, officers, employees or agents of the Failed Bank or of any
Subsidiary or Affiliate of the Failed Bank.
"Information
Package" means the most recent
compilation of financial and other data with respect to the Failed Bank,
including any amendments or supplements thereto, provided to the Assuming Bank
by the Corporation on the web site used by the Corporation to market the Failed
Bank to potential acquirers.
Module 1 –
Whole Bank w/ Loss Share – P&A
Version 1.02
March
16, 2009
|
5
|
TeamBank,
N.A.
Paola,
Kansas
|
"Legal
Balance" means the amount of
indebtedness legally owed by an Obligor with respect to a Loan, including
principal and accrued and unpaid interest, late fees, attorneys' fees and
expenses, taxes, insurance premiums, and similar charges, if any.
"Liabilities
Assumed" has
the meaning provided in Section 2.1.
"Lien" means any mortgage,
lien, pledge, charge, assignment for security purposes, security interest, or
encumbrance of any kind with respect to an Asset, including any conditional sale
agreement or capital lease or other title retention agreement relating to such
Asset.
"Loans" means all of the
following owed to or held by the Failed Bank as of Bank Closing:
(i) loans
(including loans which have been charged off the Accounting Records of the
Failed Bank in whole or in part prior to the date of the most recent pertinent
data made available to the Assuming Bank as part of the Information Package),
participation agreements, interests in participations, overdrafts of customers
(including but not limited to overdrafts made pursuant to an overdraft
protection plan or similar extensions of credit in connection with a deposit
account), revolving commercial lines of credit, home equity lines of credit,
Commitments, United States and/or State-guaranteed student loans, and lease
financing contracts;
(ii) all
Liens, rights (including rights of set-off), remedies, powers, privileges,
demands, claims, priorities, equities and benefits owned or held by, or accruing
or to accrue to or for the benefit of, the holder of the obligations or
instruments referred to in clause (i) above, including but not limited to those
arising under or based upon Credit Documents, casualty insurance policies and
binders, standby letters of credit, mortgagee title insurance policies and
binders, payment bonds and performance bonds at any time and from time to time
existing with respect to any of the obligations or instruments referred to in
clause (i) above; and
(iii) all
amendments, modifications, renewals, extensions, refinancings, and refundings of
or for any of the foregoing.
"Obligor" means each Person liable
for the full or partial payment or performance of any Loan, whether such Person
is obligated directly, indirectly, primarily, secondarily, jointly, or
severally.
"Other
Real Estate" means all interests in
real estate (other than Bank Premises and Fixtures) and loans on "in substance
foreclosure" status as of Bank Closing as recorded on the Accounting Records of
the Failed Bank, including but not limited to mineral rights, leasehold rights,
condominium and cooperative interests, air rights and development rights that
are owned by the Failed Bank.
Module 1 –
Whole Bank w/ Loss Share – P&A
Version 1.02
March
16, 2009
|
6
|
TeamBank,
N.A.
Paola,
Kansas
|
"Person" means any individual,
corporation, partnership, joint venture, association, joint-stock company,
trust, unincorporated organization, or government or any agency or political
subdivision thereof, excluding the Corporation.
"Primary
Indemnitor" means any Person (other
than the Assuming Bank or any of its Affiliates) who is obligated to indemnify
or insure, or otherwise make payments (including payments on account of claims
made against) to or on behalf of any Person in connection with the claims
covered under Article XII, including without limitation any insurer issuing any
directors and officers liability policy or any Person issuing a financial
institution bond or banker's blanket bond.
"Proforma" means producing a
balance sheet that reflects a reasonably accurate financial statement of the
Failed bank through the date of closing. The Proforma financial statements serve
as a basis for the opening entries of both the Assuming Bank and the
Receiver.
"Put
Date" has
the meaning provided in Section 3.4.
"Put
Notice" has
the meaning provided in Section 3.4.
"Qualified
Financial Contract" means a qualified
financial contract as defined in 12 U.S.C. Section 1821(e)(8)(D).
"Record" means any document,
microfiche, microfilm and computer records (including but not limited to
magnetic tape, disc storage, card forms and printed copy) of the Failed Bank
generated or maintained by the Failed Bank that is owned by or in the possession
of the Receiver at Bank Closing.
"Related
Liability" with respect to any
Asset means any liability existing and reflected on the Accounting Records of
the Failed Bank as of Bank Closing for (i) indebtedness secured by mortgages,
deeds of trust, chattel mortgages, security interests or other liens on or
affecting such Asset, (ii) ad valorem taxes applicable to such Asset, and (iii)
any other obligation determined by the Receiver to be directly related to such
Asset.
"Related
Liability Amount" with respect to any
Related Liability on the books of the Assuming Bank, means the amount of such
Related Liability as stated on the Accounting Records of the Assuming Bank (as
maintained in accordance with generally accepted accounting principles) as of
the date as of which the Related Liability Amount is being determined. With
respect to a liability that relates to more than one asset, the amount of such
Related Liability shall be allocated among such assets for the purpose of
determining the Related Liability Amount with respect to any one of such assets.
Such allocation shall be made by specific allocation, where determinable, and
otherwise shall be pro rata based upon the dollar amount of such assets stated
on the Accounting Records of the entity that owns such asset.
"Repurchase
Price" means, with respect to
any Loan the Book Value, adjusted to reflect changes to Book Value after Bank
Closing, plus (ii) any advances and interest on such Loan after Bank Closing,
minus (iii) the total of amounts received by the Assuming Bank for
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such
Loan, regardless of how applied, after Bank Closing, plus (iv) advances made by
Assuming Bank, plus (v) total disbursements of principal made by Receiver that
are not included in the Book Value.
"Safe
Deposit Boxes" means the safe deposit
boxes of the Failed Bank, if any, including the removable safe deposit boxes and
safe deposit stacks in the Failed Bank's vault(s), . all rights and benefits
under rental agreements with respect to such safe deposit boxes, and all keys
and combinations thereto.
"Settlement
Date" means
the first Business Day immediately prior to the day which is one hundred eighty
(180) days after Bank Closing, or such other date prior thereto as may be agreed
upon by the Receiver and the Assuming Bank. The Receiver, in its discretion, may
extend the Settlement Date.
"Settlement
Interest Rate" means, for the first
calendar quarter or portion thereof during which interest accrues, the rate
determined by the Receiver to be equal to the equivalent coupon issue yield on
twenty-six (26)-week United States Treasury Bills in effect as of Bank Closing
as published in The
Wall Street Journal; provided, that if no
such equivalent coupon issue yield is available as of Bank Closing, the
equivalent coupon issue yield for such Treasury Bills most recently published in
The Wall Street
Journal prior to Bank Closing shall be used. Thereafter, the rate shall
be adjusted to the rate determined by the Receiver to be equal to the equivalent
coupon issue yield on such Treasury Bills in effect as of the first day of each
succeeding calendar quarter during which interest accrues as published in The Wall Street Journal.
"Subsidiary" has the meaning set
forth in Section 3(w)(4) of the Federal Deposit Insurance Act, 12 U.S.C. Section
1813(w)(4), as amended.
ARTICLE
II
ASSUMPTION
OF LIABILITIES
2.1 Liabilities
Assumed by
Assuming
Bank. The Assuming Bank
expressly assumes at Book Value (subject to adjustment pursuant to Article VIII)
and agrees to pay, perform, and discharge all of the following liabilities of
the Failed Bank as of Bank Closing, except as otherwise provided in this
Agreement (such liabilities referred to as "Liabilities Assumed"):
(a) Assumed
Deposits, except those Deposits specifically listed on Schedule 2.1(a); provided, that as to any
Deposits of public money which are Assumed Deposits, the Assuming Bank agrees to
properly secure such Deposits with such of the Assets as appropriate which,
prior to Bank Closing, were pledged as security therefor by the Failed Bank, or
with assets of the Assuming Bank, if such securing Assets, if any, are
insufficient to properly secure such Deposits;
(b) liabilities
for indebtedness secured by mortgages, deeds of trust, chattel mortgages,
security interests or other liens on or affecting any Assets, if
any;
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provided, that the
assumption of any liability pursuant to this paragraph shall be limited to the
market value of the Assets securing such liability as determined by the
Receiver;
(c) borrowings
from Federal Reserve Banks and Federal Home Loan Banks, if any, provided, that the
assumption of any liability pursuant to this paragraph shall be limited to the
market value of the assets securing such liability as determined by the
Receiver; and overdrafts, debit balances, service charges, reclamations, and
adjustments to accounts with the Federal Reserve Banks as reflected on the books
and records of any such Federal Reserve Bank within ninety (90) days after Bank
Closing, if any;
(d) ad
valorem taxes applicable to any Asset, if any; provided, that the
assumption of any ad valorem taxes pursuant to this paragraph shall be limited
to an amount equal to the market value of the Asset to which such taxes apply as
determined by the Receiver;
(e) liabilities,
if any, for federal funds purchased, repurchase agreements and overdrafts in
accounts maintained with other depository institutions (including any accrued
and unpaid interest thereon computed to and including Bank Closing); provided, that the
assumption of any liability pursuant to this paragraph shall be limited to the
market value of the Assets securing such liability as determined by the
Receiver;
(f) United
States Treasury tax and loan note option accounts, if any;
(g) liabilities
for any acceptance or commercial letter of credit (other than "standby letters
of credit" as defined in 12 C.F.R: Section 337.2(a)); provided, that the
assumption of any liability pursuant to this paragraph shall be limited to the
market value of the Assets securing such liability as determined by the
Receiver;
(h) duties
and obligations assumed pursuant to this Agreement including without limitation
those relating to the Failed Bank's credit card business, overdraft protection
plans, safe deposit business, or safekeeping business, if any;
(i) liabilities,
if any, for Commitments;
(j) liabilities,
if any, for amounts owed to any Subsidiary of the Failed Bank acquired under
Section 3.1;
(k) liabilities,
if any, with respect to Qualified Financial Contracts;
(l) duties
and obligations under any contract pursuant to which the Failed Bank provides
mortgage servicing for others, or mortgage servicing is provided to the Failed
Bank by others; and
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(m) all
asset-related offensive litigation liabilities and all asset-related defensive
litigation liabilities, but only to the extent such liabilities relate to assets
subject to a loss share agreement, and provided that all other defensive
litigation and any class actions with respect to credit card business are
retained by the Receiver.
Schedule
2.1 attached hereto and incorporated herein sets forth certain categories of
Liabilities Assumed and the aggregate Book Value of the Liabilities Assumed in
such categories. Such schedule is based upon the best information available to
the Receiver and may be adjusted as provided in Article VIII.
2.2 Interest
on Deposit Liabilities. The Assuming Bank agrees
that, from and after Bank Closing, it will accrue and pay interest on Deposit
liabilities assumed pursuant to Section 2.1 at a rate(s) it shall determine;
provided, that
for non-transaction Deposit liabilities such rate(s) shall not be less than the
lowest rate offered by the Assuming Bank to its depositors for non-transaction
deposit accounts. The Assuming Bank shall permit each depositor to withdraw,
without penalty for early withdrawal, all or any portion of such depositor's
Deposit, whether or not the Assuming Bank elects to pay interest in accordance
with any deposit agreement formerly existing between the Failed Bank and such
depositor; and further provided, that if
such Deposit has been pledged to secure an obligation of the depositor or other
party, any withdrawal thereof shall be subject to the terms of the agreement
governing such pledge. The Assuming Bank shall give notice to such depositors as
provided in Section 5.3 of the rate(s) of interest which it has determined to
pay and of such withdrawal rights.
2.3 Unclaimed
Deposits. If, within eighteen (18)
months after Bank Closing, any depositor of the Failed Bank does not claim or
arrange to continue such depositor's Deposit assumed pursuant to Section 2.1 at
the Assuming Bank, the Assuming Bank shall, within fifteen (15) Business Days
after the end of such eighteen (18)-month period, (i) refund to the Corporation
the full amount of each such Deposit (without reduction for service charges),
(ii) provide to the Corporation a schedule of all such refunded Deposits in such
form as may be prescribed by the Corporation, and (iii) assign, transfer, convey
and deliver to the Receiver all right, title and interest of the Assuming Bank
in and to Records previously transferred to the Assuming Bank and other records
generated or maintained by the Assuming Bank pertaining to such Deposits. During
such eighteen (18)-month period, at the request of the Corporation, the Assuming
Bank promptly shall provide to the Corporation schedules of unclaimed deposits
in such form as may be prescribed by the Corporation.
2.4 Employee
Plans. Except as provided in
Section 4.12, the Assuming Bank shall have no liabilities, obligations or
responsibilities under the Failed Bank's health care, bonus, vacation, pension,
profit sharing, deferred compensation, 401 K or stock purchase plans or similar
plans, if any, unless the Receiver and the Assuming Bank agree otherwise
subsequent to the date of this Agreement.
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ARTICLE
III
PURCHASE
OF ASSETS
3.1 Assets
Purchased by Assuming Bank. With the exception of
certain assets expressly excluded in Sections 3.5 and 3.6, the Assuming Bank
hereby purchases from the Receiver, and the Receiver hereby sells, assigns,
transfers, conveys, and delivers to the Assuming Bank, all right, title, and
interest of the Receiver in and to all of the assets (real, personal and mixed,
wherever located and however acquired) including all subsidiaries, joint
ventures, partnerships, and any and all other business combinations or
arrangements, whether active, inactive, dissolved or terminated, of the Failed
Bank whether or not reflected on the books of the Failed Bank as of Bank
Closing. Schedules 3.1 and 3.1a attached hereto and incorporated herein. sets
forth certain categories of Assets purchased hereunder. Such schedule is based
upon the best information available to the Receiver and may be adjusted as
provided in Article VIII. Assets are purchased hereunder by the Assuming Bank
subject to all liabilities for indebtedness collateralized by Liens affecting
such Assets to the extent provided in Section 2.1. The subsidiaries, joint
ventures, partnerships, and any and all other business combinations or
arrangements, whether active, inactive, dissolved or terminated being purchased
by the Assuming Bank includes, but is not limited to, the entities listed on
Schedule 3.1a. Notwithstanding Section 4.8, the Assuming Bank specifically
purchases all mortgage servicing rights and obligations of the Failed
Bank.
3.2 Asset Purchase
Price.
(a) All
Assets and assets of the Failed Bank subject to an option to purchase by the
Assuming Bank shall be purchased for the amount, or the amount resulting from
the method specified for determining the amount, as specified on Schedule 3.2,
except as otherwise may be provided herein. Any Asset, asset of the Failed Bank
subject to an option to purchase or other asset purchased for which no purchase
price is specified on Schedule 3.2 or otherwise herein shall be purchased at its
Book Value. Loans or other assets charged off the Accounting Records of the
Failed Bank prior to the date of the most recent pertinent data made available
to the Assuming Bank as part of the Information Package shall be purchased at a
price of zero.
(b) Reserved.
(c) Qualified
Financial Contracts shall be purchased at market value determined in accordance
with the terms of Exhibit 3.2(c). Any costs associated with such valuation shall
be shared equally by the Receiver and the Assuming Bank.
3.3 Manner of Conveyance;
Limited Warranty; Nonrecourse; Etc. THE CONVEYANCE OF ALL ASSETS,
INCLUDING REAL AND PERSONAL PROPERTY INTERESTS, PURCHASED BY THE ASSUMING BANK
UNDER THIS AGREEMENT SHALL BE MADE, AS NECESSARY, BY RECEIVER'S DEED OR
RECEIVER'S XXXX OF SALE, "AS IS", "WHERE IS", WITHOUT RECOURSE AND, EXCEPT AS
OTHERWISE SPECIFICALLY PROVIDED IN THIS AGREEMENT, WITHOUT ANY
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WARRANTIES
WHATSOEVER WITH RESPECT TO SUCH ASSETS, EXPRESS OR IMPLIED, WITH RESPECT TO
TITLE, ENFORCEABILITY, COLLECTIBILITY, DOCUMENTATION OR FREEDOM FROM LIENS OR
ENCUMBRANCES (IN WHOLE OR IN PART), OR ANY OTHER MATTERS.
3.4 Puts of Assets to the
Receiver.
(a) Puts
Prior to the Settlement Date.
(i) During
the period from Bank Closing to and including the Business Day immediately
preceding the Settlement Date, the Assuming Bank shall be entitled to require
the Receiver to purchase any Asset which the Assuming Bank can establish is
evidenced by forged or stolen instruments as of Bank Closing; provided, that, the
Assuming Bank shall not have the right to require the Receiver to purchase any
such Asset with respect to which the Assuming Bank has taken any action referred
to in Section 3.4(a)(ii) with respect to such Asset.
(ii) At the
end of the thirty (30)-day period following Bank Closing and at that time only,
in accordance with this Section 3.4, the Assuming Bank shall be entitled to
require the Receiver to purchase any remaining overdraft transferred to the
Assuming Bank pursuant to 3.1 which both was made after the "as of" the date of
the most recent pertinent data made available to the Assuming Bank as part of
the Information Package and was not made pursuant to an overdraft protection
plan or similar extension of credit.
The
Assuming Bank shall transfer all such Assets to the Receiver without recourse,
and shall indemnify the Receiver against any and all claims of any Person
claiming by, through or under the Assuming Bank with respect to any such Asset,
as provided in Section 12.4.
(b) Notices
to the Receiver. In the event that the
Assuming Bank elects to require the Receiver to purchase one or more Assets, the
Assuming Bank shall deliver to the Receiver a notice (a "Put Notice") which
shall include:
(i)
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a
list of all Assets that the Assuming Bank requires the Receiver to
purchase;
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(ii)
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a
list of all Related Liabilities with respect to the Assets identified
pursuant to (i) above; and
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(iii)
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a
statement of the estimated Repurchase Price of each Asset identified
pursuant to (i) above as of the applicable Put
Date.
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Such
notice shall be in the form prescribed by the Receiver or such other form to
which the Receiver shall consent. As provided in Section 9.6, the Assuming Bank
shall deliver to the Receiver such documents, Credit Files and such additional
information relating to the subject matter of the Put Notice as the Receiver may
request and shall provide to the Receiver full access to all other relevant
books and records.
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(c) Purchase
by Receiver. The Receiver shall
purchase Assets that are specified in the Put Notice and shall assume Related
Liabilities with respect to such Assets, and the transfer of such Assets and
Related Liabilities shall be effective as of a date determined by the Receiver
which date shall not be later than thirty (30) days after receipt by the
Receiver of the Put Notice (the "Put Date").
(d) Purchase
Price and Payment Date. Each Asset purchased by
the Receiver pursuant to this Section 3.4 shall be purchased at a price equal to
the Repurchase Price of such Asset less the Related Liability Amount applicable
to such Asset, in each case determined as of the applicable Put Date. If the
difference between such Repurchase Price and such Related Liability Amount is
positive, then the Receiver shall pay to the Assuming Bank the amount of such
difference; if the difference between such amounts is negative, then the
Assuming Bank shall pay to the Receiver the amount of such difference. The
Assuming Bank or the Receiver, as the case may be, shall pay the purchase price
determined pursuant to this Section 3.4(d) not later than the twentieth (20th)
Business Day following the applicable Put Date, together with interest on such
amount at the Settlement Interest Rate for the period from and including such
Put Date to and including the day preceding the date upon which payment is
made.
(e) Servicing. The Assuming Bank shall
administer and manage any Asset subject to purchase by the Receiver in
accordance with usual and prudent banking standards and business practices until
such time as such Asset is purchased by the Receiver.
(f) Reversals. In the event that the
Receiver purchases an Asset (and assumes the Related Liability) that it is not
required to purchase pursuant to this Section 3.4, the Assuming Bank shall
repurchase such Asset (and assume such Related Liability) from the Receiver at a
price computed so as to achieve the same economic result as would apply if the
Receiver had never purchased such Asset pursuant to this Section
3.4.
3.5 Assets
Not Purchased by Assuming Bank. The Assuming Bank does
not purchase, acquire or assume, or (except as otherwise expressly provided in
this Agreement) obtain an option to purchase, acquire or assume under this
Agreement:
(a) any
financial institution bonds, banker's blanket bonds, or public liability, fire,
or extended coverage insurance policy or any other insurance policy of the
Failed Bank, or premium refund, unearned premium derived from cancellation, or
any proceeds payable with respect to any of the foregoing;
(b) any
interest, right, action, claim, or judgment against (i) any officer, director,
employee, accountant, attorney, or any other Person employed or retained by the
Failed Bank or any Subsidiary of the Failed Bank on or prior to Bank Closing
arising out of any actor omission of such Person in such capacity, (ii) any
underwriter of financial institution bonds, banker's blanket bonds or any other
insurance policy of the Failed Bank, (iii) any shareholder or holding company of
the Failed Bank, or (iv) any other Person whose action or inaction may be
related to any loss (exclusive of any loss resulting from such Person's failure
to pay on a Loan made by the Failed Bank) incurred by the Failed Bank; provided, that for
the purposes hereof, the acts, omissions or other events giving rise to any such
claim shall have occurred on or before Bank
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Closing,
regardless of when any such claim is discovered and regardless of whether any
such claim is made with respect to a financial institution bond, banker's
blanket bond, or any other insurance policy of the Failed Bank in force as of
Bank Closing;
(c) prepaid
regulatory assessments of the Failed Bank, if any;
(d) legal or
equitable interests in tax receivables of the Failed Bank, if any, including any
claims arising as a result of the Failed Bank having entered into any agreement
or otherwise being joined with another Person with respect to the filing of tax
returns or the payment of taxes;
(e) amounts
reflected on the Accounting Records of the Failed Bank as of Bank Closing as a
general or specific loss reserve or contingency account, if any;
(f) leased or
owned Bank Premises and leased or owned Furniture and Equipment and Fixtures and
data processing equipment (including hardware and software) located on leased or
owned Bank Premises, if any; provided, that the
Assuming Bank does obtain an option under Section 4.6, Section 4.7 or Section
4.8, as the case may be, with respect thereto;
(g) owned
Bank Premises which the Receiver, in its discretion, determines may contain
environmentally hazardous substances;
(h) any
"goodwill," as such term is defined in the instructions to the report of
condition prepared by banks examined by the Corporation in accordance with 12
C.F.R. Section 304.4, and other intangibles;
(i) any
criminal restitution or forfeiture orders issued in favor of the Failed
Bank;
(j) the
Failed Bank's wholly owned subsidiary TeamBank, NA Asset
Corporation;
(k) assets
essential to the Receiver in accordance with Section 3.6; and
(l) any trust
business or department of the Failed Bank.
(a) The
Receiver may refuse to sell to the Assuming Bank, or the Assuming Bank agrees,
at the request of the Receiver set forth in a written notice to the Assuming
Bank, to assign, transfer, convey, and deliver to the Receiver all of the
Assuming Bank's right, title and interest in and to, any Asset or asset
essential to the Receiver as determined by the Receiver in its discretion
(together with all Credit Documents evidencing or pertaining thereto), which
may include any Asset or asset that the Receiver determines to
be:
(i)
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made
to an officer, director, or other Person engaging in the affairs of the
Failed
Bank, its Subsidiaries or Affiliates or any related entities of any of
the
foregoing;
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(ii)
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the
subject of any investigation relating to any claim with respect to any
item described in Section 3.5(a) or (b), or the subject of, or potentially
the subject of, any legal
proceedings;
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(iii)
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made
to a Person who is an Obligor on a loan owned by the Receiver or the
Corporation in its corporate capacity or its capacity as receiver of any
institution;
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(iv)
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secured
by collateral which also secures any asset owned by the Receiver;
or
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(v)
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related
to any asset of the Failed Bank not purchased by the Assuming Bank under
this Article Ili or any liability of the Failed Bank not assumed by the
Assuming Bank under Article II.
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(b) Each
such Asset or asset purchased by the Receiver shall be purchased at a price
equal to the Repurchase Price thereof less the Related Liability Amount with
respect to any Related Liabilities related to such Asset or asset, in each case
determined as of the date of the notice provided by the Receiver pursuant to
Section 3.6(a). The Receiver shall pay the Assuming Bank not later than the
twentieth (20th) Business Day following receipt of related Credit Documents and
Credit Files together with interest on such amount at the Settlement Interest
Rate for the period from and including the date of receipt of such documents to
and including the day preceding the day on which payment is made. The Assuming
Bank agrees to administer and manage each such Asset or asset in accordance with
usual and prudent banking standards and business practices until each such Asset
or asset is purchased by the Receiver. All transfers with respect to Asset or
assets under this Section 3.6 shall be made as provided in Section 9.6. The
Assuming Bank shall transfer all such Asset or assets and Related Liabilities to
the Receiver without recourse, and shall indemnify the Receiver against any and
all claims of any Person claiming by, through or under the Assuming Bank with
respect to any such Asset or asset, as provided in Section 12.4.
ARTICLE
IV
The
Assuming Bank agrees with the Receiver and the Corporation as
follows:
4.1 Continuation
of Banking Business. The Assuming Bank agrees
to provide full service banking in the trade area of the Failed Bank commencing
on the first banking business day after Bank Closing and to maintain such
presence until it has received all necessary regulatory approvals to cease
providing such banking services in the trade area. At the option of the Assuming
Bank, such banking services may be provided at any or all of the Bank Premises,
or at other premises within such trade area.
4.2 Agreement
with Respect to Credit Card Business. The Assuming Bank agrees
to honor and perform, from and after Bank Closing, all duties and obligations
with respect to the
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Bank's credit card business, and/or processing related to credit cards, if any,
and assumes all outstanding extensions of credit with respect
thereto.
4.3 Agreement
with Respect to Safe Deposit Business. The Assuming Bank
assumes and agrees to discharge, from and after Bank Closing, in the usual
course of conducting a banking business, the duties and obligations of the
Failed Bank with respect to all Safe Deposit Boxes, if any, of the Failed Bank
and to maintain all of the necessary facilities for the use of such boxes by the
renters thereof during the period for which such boxes have been rented and the
rent therefor paid to the Failed Bank, subject to the provisions of the rental
agreements between the Failed Bank and the respective renters of such boxes;
provided, that
the Assuming Bank may relocate the Safe Deposit Boxes of the Failed Bank to any
office of the Assuming Bank located in the trade area of the Failed Bank. Fees
related to the safe deposit business earned prior to the Bank Closing Date shall
be for the benefit of the Receiver and fees earned after the Bank Closing Date
shall be for the benefit of the Assuming Bank.
4.4 Agreement
with Respect to Safekeeping Business. The Receiver transfers,
conveys and delivers to the Assuming Bank and the Assuming Bank accepts all
securities and other items, if any, held by the Failed Bank in safekeeping for
its customers as of Bank Closing. The Assuming Bank assumes and agrees to honor
and discharge, from and after Bank Closing, the duties and obligations of the
Failed Bank with respect to such securities and items held in safekeeping. The
Assuming Bank shall be entitled to all rights and benefits heretofore accrued or
hereafter accruing with respect thereto.- The Assuming Bank shall provide to the
Receiver written verification of all assets held by the Failed Bank for
safekeeping within sixty (60) days after Bank Closing. Fees related to the
safekeeping business earned prior to the Bank Closing Date shall be for the
benefit of the Receiver and fees earned after the Bank Closing Date shall be for
the benefit of the Assuming Bank.
4.5 Omitted.
4.6 Agreement with Respect to
Bank Premises.
(a) Option to
Purchase. Subject to Section 3.5,
the Receiver hereby grants to the Assuming Bank an exclusive option for the
period of ninety (90) days commencing the day after Bank Closing to purchase any
or all owned Bank Premises, including all Furniture, Fixtures and Equipment
located on the Bank Premises. The Assuming Bank shall give written notice to the
Receiver within the option period of its election to purchase or not to purchase
any of the owned Bank Premises. Any purchase of such premises shall be effective
as of the date of Bank Closing and such purchase shall be consummated as soon as
practicable thereafter, and in no event later than the Settlement
Date.
(b) Option to
Lease. The
Receiver hereby grants to the Assuming Bank an exclusive option for the period
of ninety (90) days commencing the day after Bank Closing to cause the Receiver
to assign to the Assuming Bank any or all leases for leased Bank Premises, if
any, which have been continuously occupied by the Assuming Bank from Bank
Closing to the date it elects to accept an assignment of the leases with respect
thereto to the extent such leases can be assigned; provided, that the
exercise of this option with respect to any lease must be as to all
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premises
or other property subject to the lease. If an assignment cannot be made of any
such leases, the Receiver may, in its discretion, enter into subleases with the
Assuming Bank containing the same terms and conditions provided under such
existing leases for such leased Bank Premises or other property. The Assuming
Bank shall give notice to the Receiver within the option period of its election
to accept or not to accept an assignment of any or all leases (or enter into
subleases or new leases in lieu thereof). The Assuming Bank agrees to assume all
leases assigned (or enter into subleases or new leases in lieu thereof) pursuant
to this Section 4.6.
(c) Facilitation. The Receiver agrees to
facilitate the assumption, assignment or sublease of leases or the negotiation
of new leases by the Assuming Bank; provided, that
neither the Receiver nor the Corporation shall be obligated to engage in
litigation, make payments to the Assuming Bank or to any third party in
connection with facilitating any such assumption, assignment, sublease or
negotiation or commit to any other obligations to third parties.
(d) Occupancy. The Assuming Bank shall
give the Receiver fifteen (15) days' prior written notice of its intention to
vacate prior to vacating any leased Bank Premises with respect to which the
Assuming Bank has not exercised the option provided in Section 4.6(b). Any such
notice shall be deemed to terminate the Assuming Bank's option with respect to
such leased Bank Premises.
(e) Occupancy
Costs.
(i) The
Assuming Bank agrees to pay to the Receiver, or to appropriate third parties at
the direction of the Receiver, during and for the period of any occupancy by it
of (x) owned Bank Premises the market rental value, as determined by the
appraiser selected in accordance with the definition of Fair Market Value, and
all operating costs, and (y) leased Bank Premises, all operating costs with
respect thereto and to comply with all relevant terms of applicable leases
entered into by the Failed Bank, including without limitation the timely payment
of all rent. Operating costs include, without limitation all taxes, fees,
charges, utilities, insurance and assessments, to the extent not included in the
rental value or rent. If the Assuming Bank elects to purchase any owned Bank
Premises in accordance with Section 4.6(a), the amount of any rent paid (and
taxes paid to the Receiver which have not been paid to the taxing authority and
for which the Assuming Bank assumes liability) by the Assuming Bank with respect
thereto shall be applied as an offset against the purchase price
thereof.
(ii) The
Assuming Bank agrees during the period of occupancy by it of owned or leased
Bank Premises, to pay to the Receiver rent for the use of all owned or leased
Furniture and Equipment and all owned or leased Fixtures located on such Bank
Premises for the period of such occupancy. Rent for such property owned by the
Failed Bank shall be the market rental value thereof, as determined by the
Receiver within sixty (60) days after Bank Closing. Rent for such leased
property shall be an amount equal to any and all rent and other amounts which
the Receiver incurs or accrues as an obligation or is obligated to pay for such
period of occupancy pursuant to all leases and contracts with respect to such
property. If the Assuming Bank purchases any owned Furniture and Equipment or
owned Fixtures in accordance with Section
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4.6(f) or
4.6(h), the amount of any rents paid by the Assuming Bank with respect thereto
shall be applied as an offset against the purchase price thereof.
(f) Certain
Requirements as to Furniture, Equipment and Fixtures. If the Assuming Bank
purchases owned Bank Premises or accepts an assignment of the lease (or enters
into a sublease or a new lease in lieu thereof) for leased Bank Premises as
provided in Section 4.6(a) or 4.6(b), or if the Assuming Bank does not exercise
such option but within twelve (12) months following Bank Closing obtains the
right to occupy such premises (whether by assignment, lease, sublease, purchase
or otherwise), other than in accordance with Section 4.6(a) or (b), the Assuming
Bank shall (i) effective as of the date of Bank Closing, purchase from the
Receiver all Furniture and Equipment and Fixtures owned by the Failed Bank at
Fair Market Value and located thereon as of Bank Closing, (ii) accept an
assignment or a sublease of the leases or negotiate new leases for all Furniture
and Equipment and Fixtures leased by the Failed Bank and located thereon, and
(iii) if applicable, accept an assignment or a sublease of any ground lease or
negotiate a new ground lease with respect to any land on which such Bank
Premises are Iocated; provided, that the
Receiver shall not have disposed of such Furniture and Equipment and Fixtures or
repudiated the leases specified in clause (ii) or (iii).
(i) If the
Assuming Bank elects not to purchase any owned Bank Premises, the notice of such
election in accordance with Section 4.6(a) shall specify the date upon which the
Assuming Bank's occupancy of such premises shall terminate, which date shall not
be later than ninety (90) days after the date of the Assuming Bank's notice not
to exercise such option. The Assuming Bank promptly shall relinquish and release
to the Receiver such premises and the Furniture and Equipment and Fixtures
located thereon in the same condition as at Bank Closing, normal wear and tear
excepted. By occupying any such premises after the expiration of such ninety
(90)-day period, the Assuming Bank shall, at the Receiver's option, (x) be
deemed to have agreed to purchase such Bank Premises, and to assume all leases,
obligations and liabilities with respect to leased Furniture and Equipment and
leased Fixtures located thereon and any ground lease with respect to the land on
which such premises are located, and (y) be required to purchase all Furniture
and Equipment and Fixtures owned by the Failed Bank and located on such premises
as of Bank Closing.
(ii) if the
Assuming Bank elects not to accept an assignment of the lease or sublease any
leased Bank Premises, the notice of such election in accordance with Section
4.6(b) shall specify the date upon which the Assuming Bank's occupancy of such
leased Bank Premises shall terminate, which date shall not be later than the
date which is one hundred eighty (180) days after Bank Closing. Upon vacating
such premises, the Assuming Bank shall relinquish and release to the Receiver
such premises and the Fixtures and the Furniture and Equipment located thereon
in the same condition as at Bank Closing, normal wear and tear excepted. By
failing to provide notice of its intention to vacate such premises prior to the
expiration of the option period specified in Section 4.6(b), or by occupying
such premises after the one hundred eighty (180)-day period specified above in
this paragraph (ii), the Assuming Bank shall, at the Receiver's option, (x) be
deemed to have assumed all leases, obligations and liabilities with respect to
such premises (including any ground lease with respect to the land on which
premises are located),
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and
leased Furniture and Equipment and leased Fixtures located thereon in accordance
with this Section 4.6 (unless the Receiver previously repudiated any such
lease), and (y) be required to purchase all Furniture and Equipment and Fixtures
owned by the Failed Bank at Fair Market Value and located on such premises as of
Bank Closing.
(h) Furniture
and Equipment and Certain Other Equipment. The Receiver hereby
grants to the Assuming Bank an option to purchase all Furniture and Equipment or
any telecommunications, data processing equipment (including hardware and
software) and check processing and similar operating equipment owned by the
Failed Bank at Fair Market Value and located at any leased Bank Premises that
the Assuming Bank elects to vacate or which it could have, but did not occupy,
pursuant to this Section 4.6; provided, that, the
Assuming Bank shall give the Receiver notice of its election to purchase such
property at the time it gives notice of its intention to vacate such Bank
Premises or within ten (l0) days after Bank Closing for Bank Premises it could
have, but did not, occupy.
(a) The
Receiver hereby grants to the Assuming Bank an exclusive option for the period
of ninety (90) days commencing the day after Bank Closing to accept an
assignment from the Receiver of any or all Data Processing Leases to the extent
that such Data Processing Leases can be assigned.
(b) The
Assuming Bank shall (i) give written notice to the Receiver within the option
period specified in Section 4.7(a) of its intent to accept or decline an
assignment or sublease of any or all Data Processing Leases and promptly accept
an assignment or sublease of such Data Processing Leases, and (ii) give written
notice to the appropriate lessor(s) that it has accepted an assignment or
sublease of any such Data Processing Leases.
(c) The
Receiver agrees to facilitate the assignment or sublease of Data Processing
Leases or the negotiation of new leases or license agreements by the Assuming
Bank; provided,
that neither the Receiver nor the Corporation shall be obligated to engage in
litigation or make payments to the Assuming Bank or to any third party in
connection with facilitating any such assumption, assignment, sublease or
negotiation.
(d) The
Assuming Bank agrees, during its period of use of any property subject to a Data
Processing Lease, to pay to the Receiver or to appropriate third parties at the
direction of the Receiver all operating costs with respect thereto and to comply
with all relevant terms of the applicable Data Processing Leases entered into by
the Failed Bank, including without limitation the timely payment of all rent,
taxes, fees, charges, utilities, insurance and assessments.
(e) The
Assuming Bank shall, not later than fifty (50) days after giving the notice
provided in Section 4.7(b), (i) relinquish and release to the Receiver all
property subject to the relevant Data Processing Lease, in the same condition as
at Bank Closing, normal wear and tear excepted, or (ii) accept an assignment or
a sublease thereof or negotiate a new lease or license agreement under this
Section 4.7.
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(a) Subject
to the provisions of Section 4.8(b), with respect to agreements existing as of
Bank Closing which provide for the rendering of services by or to the Failed
Bank, within ninety (90) days after Bank Closing, the Assuming Bank shall give
the Receiver written notice specifying whether it elects to assume or not to
assume each such agreement. Except as may be otherwise provided in this Article
IV, the Assuming Bank agrees to comply with the terms of each such agreement for
a period commencing on the day after Bank Closing and ending on: (i) in the case
of an agreement that provides for the rendering of services by the Failed Bank,
the date which is ninety (90) days after Bank Closing, and (ii) in the case of
an agreement that provides for the rendering of services to the Failed Bank, the
date which is thirty (30) days after the Assuming Bank has given notice to the
Receiver of its election not to assume such agreement; provided, that the
Receiver can reasonably make such service agreements available to the Assuming
Bank. The Assuming Bank shall be deemed by the Receiver to have assumed
agreements for which no notification is timely given. The Receiver agrees to
assign, transfer, convey, and deliver to the Assuming Bank all right, title and
interest of the Receiver, if any, in and to agreements the Assuming Bank assumes
hereunder. In the event the Assuming Bank elects not to accept an assignment of
any lease (or sublease) or negotiate a new lease for leased Bank Premises under
Section 4.6 and does not otherwise occupy such premises, the provisions of this
Section 4.8(a) shall not apply to service agreements related to such premises.
The Assuming Bank agrees, during the period it has the use or benefit of any
such agreement, promptly to pay to the Receiver or to appropriate third parties
at the direction of the Receiver all operating costs with respect thereto and to
comply with all relevant terms of such agreement.
(b) The
provisions of Section 4.8(a) regarding the Assuming Bank's election to assume or
not assume certain agreements shall not apply to (i) agreements pursuant to
which the Failed Bank provides mortgage servicing for others or mortgage
servicing is provided to the Failed Bank by others, (ii) agreements that are
subject to Sections 4.1 through 4.7 and any insurance policy or bond referred to
in Section 3.5(a) or other agreement specified in Section 3.5, and (iii)
consulting, management or employment agreements, if any, between the Failed Bank
and its employees or other Persons. Except as otherwise expressly set forth
elsewhere in this Agreement, the Assuming Bank does not assume any liabilities
or acquire any rights under any of the agreements described in this Section
4.8(b).
4.9 Informational
Tax Reporting. The Assuming Bank agrees
to perform all obligations of the Failed Bank with respect to Federal and State
income tax informational reporting related to (i) the Assets and the Liabilities
Assumed, (ii) deposit accounts that were closed and loans that were paid off or
collateral obtained with respect thereto prior to Bank Closing, (iii)
miscellaneous payments made to vendors of the Failed Bank, and (iv) any other
asset or liability of the Failed Bank, including, without limitation, loans not
purchased and Deposits not assumed by the Assuming Bank, as may be required by
the Receiver.
4.10 Insurance. The Assuming Bank agrees
to obtain insurance coverage effective from and after Bank Closing, including
public liability, fire and extended coverage insurance acceptable to the
Receiver with respect to owned or leased Bank Premises that it occupies, and all
owned or leased Furniture and Equipment and Fixtures and leased data processing
equipment
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(including
hardware and software) located thereon, in the event such insurance coverage is
not already in force and effect with respect to the Assuming Bank as the insured
as of Bank Closing. All such insurance shall, where appropriate (as determined
by the Receiver), name the Receiver as an additional insured.
4.11 Office
Space for Receiver and Corporation. For the period
commencing on the day following Bank Closing and ending on the one hundred
eightieth (180th) day thereafter, the Assuming Bank agrees to provide to the
Receiver and the Corporation, without charge, adequate and suitable office space
(including parking facilities and vault space), furniture, equipment (including
photocopying and telecopying machines), email accounts, network access and
technology resources (such as shared drive) and utilities (including local
telephone service and fax machines) at the Bank Premises occupied by the
Assuming Bank for their use in the discharge of their respective functions with
respect to the Failed Bank. In the event the Receiver and the Corporation
determine that the space provided is inadequate or unsuitable, the Receiver and
the Corporation may relocate to other quarters having adequate and suitable
space and the costs of relocation and any rental and utility costs for the
balance of the period of occupancy by the Receiver and the Corporation shall be
borne by the Assuming Bank. Additionally, the Assuming Bank agrees to pay such
bills and invoices on behalf of the Receiver and Corporation as the Receiver or
Corporation may direct for the period beginning on the date of Bank Closing and
ending on Settlement Date. Assuming Bank shall submit it requests for
reimbursement of such expenditures pursuant to Article VIII of this
Agreement.
4.12 Agreement with Respect to
Continuation of Group Health Plan Coverage for Former Employees of the
Failed Bank.
(a) The
Assuming Bank agrees to assist the Receiver, as provided in this Section 4.12,
in offering individuals who were employees or former employees of the Failed
Bank, or any of its Subsidiaries, and who, immediately prior to Bank Closing,
were receiving, or were eligible to receive, health insurance coverage or health
insurance continuation coverage from the Failed Bank ("Eligible Individuals"),
the opportunity to obtain health insurance coverage in the Corporation's FIA
Continuation Coverage Plan which provides for health insurance continuation
coverage to such Eligible Individuals who are qualified beneficiaries of the
Failed Bank as defined in Section 607 of the Employee Retirement Income Security
Act of 1974, as amended (respectively, "qualified beneficiaries" and "ERISA").
The Assuming Bank shall consult with the Receiver and not later than five (5)
Business Days after Bank Closing shall provide written notice to the Receiver of
the number (if available), identity (if available) and addresses (if available)
of the Eligible individuals who are qualified beneficiaries of the Failed Bank
and for whom a "qualifying event" (as defined in Section 603 of ERISA) has
occurred and with respect to whom the Failed Bank's obligations under Part 6 of
Subtitle B of Title I of ERISA have not been satisfied in full, and such other
information as the Receiver may reasonably require. The Receiver shall cooperate
with the Assuming Bank in order to permit it to prepare such notice and shall
provide to the Assuming Bank such data in its possession as may be reasonably
required for purposes of preparing such notice.
(b) The
Assuming Bank shall take such further action to assist the Receiver in offering
the Eligible Individuals who are qualified beneficiaries of the Failed Bank
the
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opportunity
to obtain health insurance coverage in the Corporation's FIA Continuation
Coverage Plan as the Receiver may direct. All expenses incurred and paid by the
Assuming Bank (i) in connection with the obligations of the Assuming Bank under
this Section 4.12, and (ii) in providing health insurance continuation coverage
to any Eligible Individuals who are hired by the Assuming Bank and such
employees' qualified beneficiaries shall be borne by the Assuming
Bank.
(c) This
Section 4.12 is for the sole and exclusive benefit of the parties to this
Agreement, and for the benefit of no other Person (including any former employee
of the Failed Bank or any Subsidiary thereof or qualified beneficiary of such
former employee). Nothing in this Section 4.12 is intended by the parties, or
shall be construed, to give any Person (including any former employee of the
Failed Bank or any Subsidiary thereof or qualified beneficiary of such former
employee) other than the Corporation, the Receiver and the Assuming Bank any
legal or equitable right, remedy or claim under or with respect to the
provisions of this Section.
4.13 Agreement
with Respect to Interim Asset Servicing. At any time after Bank
Closing, the Receiver may establish on its books an asset pool(s) and may
transfer to such asset pool(s) (by means of accounting entries on the books of
the Receiver) all or any assets and liabilities of the Failed Bank which are not
acquired by the Assuming Bank, including, without limitation, wholly unfunded
Commitments and assets and liabilities which may be acquired, funded or
originated by the Receiver subsequent to Bank Closing. The Receiver may remove
assets (and liabilities) from or add assets (and liabilities) to such pool(s) at
any time in its discretion. At the option of the Receiver, the Assuming Bank
agrees to service, administer, and collect such pool assets in accordance with
and for the term set forth in Exhibit 4.13 "Interim Asset Servicing
Arrangement".
4.15 Agreement
with Respect to Loss Sharing. The Assuming Bank shall
be entitled to require reimbursement from the Receiver for loss sharing on
certain loans in accordance with the Single Family Shared-Loss Agreement
attached hereto as Exhibit 4.15A and the Non-SF Shared-Loss Agreement attached
hereto as Exhibit 4.15B, collectively, the "Shared-Loss Agreements." The Loans
that shall be subject to the Shared-Loss Agreements are identified on the
Schedule of Loans 4.15A and 4.15B attached hereto.
4.16 Agreement
with Respect to Colorado National Bank. The Assuming Bank shall
continue to provide operational support to the acquirer of Colorado National
Bank, including support for core banking applications as well as other
applications, as may be required to support infrastructure in the normal course
of business until a transition of these systems can be accomplished, but in any
event, not more than 180 days from Bank Closing.
ARTICLE V
DUTIES
WITH RESPECT TO DEPOSITORS OF THE FAILED BANK
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5.1 Payment
of Checks, Drafts and Orders. Subject to Section 9.5,
the Assuming Bank agrees to pay all properly drawn checks, drafts and withdrawal
orders of depositors of the Failed Bank presented for payment, whether drawn on
the check or draft forms provided by the Failed Bank or by the Assuming Bank, to
the extent that the Deposit balances to the credit of the respective makers or
drawers assumed by the Assuming Bank under this Agreement are sufficient to
permit the payment thereof, and in all other respects to discharge, in the usual
course of conducting a banking business, the duties and obligations of the
Failed Bank with respect to the Deposit balances due and owing to the depositors
of the Failed Bank assumed by the Assuming Bank under this
Agreement.
5.2 Certain
Agreements Related to Deposits. Subject to Section 2.2,
the Assuming Bank agrees to honor the terms and conditions of any written escrow
or mortgage servicing agreement or other similar agreement relating to a Deposit
liability assumed by the Assuming Bank pursuant to this Agreement.
(a) Within
seven (7)days after Bank Closing, the Assuming Bank shall give (i) notice to
depositors of the Failed Bank of its assumption of the Deposit liabilities of
the Failed Bank, and (ii) any notice required under Section 2.2, by mailing to
each such depositor a notice with respect to such assumption and by advertising
in a newspaper of general circulation in the county or counties in which the
Failed Bank was located. The Assuming Bank agrees that it will obtain prior
approval of all such notices and advertisements from counsel for the Receiver
and that such notices and advertisements shall not be mailed or published until
such approval is received.
(b) The
Assuming Bank shall give notice by mail to depositors of the Failed Bank
concerning the procedures to claim their deposits, which notice shall be
provided to the Assuming Bank by the Receiver or the Corporation. Such notice
shall be included with the notice to depositors to be mailed by the Assuming
Bank pursuant to Section 5.3(a).
(c) If the
Assuming Bank proposes to charge fees different from those charged by the Failed
Bank before it establishes new deposit account relationships with the depositors
of the Failed Bank, the Assuming Bank shall give notice by mail of such changed
fees to such depositors.
ARTICLE
VI
6.1 Transfer of
Records.
(a) In
accordance with Section 3.1, the Receiver assigns, transfers, conveys and
delivers to the Assuming Bank the following Records pertaining to the Deposit
liabilities of the Failed Bank assumed by the Assuming Bank under this
Agreement, except as provided in Section 6.4:
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(i)
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signature
cards, orders, contracts between the Failed Bank and its depositors and
Records of similar character;
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(ii)
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passbooks
of depositors held by the Failed Bank, deposit slips, cancelled checks and
withdrawal orders representing charges to accounts of
depositors;
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and the
following Records pertaining to the Assets:
(iii)
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records
of deposit balances carried with other banks, bankers or trust
companies;
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(iv)
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Loan
and collateral records and Credit Files and other
documents;
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(v)
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deeds,
mortgages, abstracts, surveys, and other instruments or records of title
pertaining to real estate or real estate
mortgages;
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(vi)
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signature
cards, agreements and records pertaining to Safe Deposit Boxes, if any;
and
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(vii)
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records
pertaining to the credit card business, trust business or safekeeping
business of the Failed Bank, if
any.
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(b) The
Receiver, at its option, may assign and transfer to the Assuming Bank by a
single blanket assignment or otherwise, as soon as practicable after Bank
Closing, any other Records not assigned and transferred to the Assuming Bank as
provided in this Agreement, including but not limited to loan disbursement
checks, general ledger tickets, official bank checks, proof transactions
(including proof tapes) and paid out loan files.
6.2 Delivery
of Assigned Records. The Receiver shall
deliver to the Assuming Bank all Records described in (i) Section 6.1(a) as soon
as practicable on or after the date of this Agreement, and (ii) Section 6.1(b)
as soon as practicable after making any assignment described
therein.
6.3 Preservation
of Records. The Assuming Bank agrees
that it will preserve and maintain for the joint benefit of the Receiver, the
Corporation and the Assuming Bank, all Records of which it has custody for such
period as either the Receiver or the Corporation in its discretion may require,
until directed otherwise, in writing, by the
Receiver or Corporation. The Assuming Bank shall have the primary responsibility
to respond to subpoenas, discovery requests, and other similar official
inquiries with respect to the Records of which it has custody.
6.4 Access to
Records; Copies. The Assuming Bank agrees
to permit the Receiver and the Corporation access to all Records of which the
Assuming Bank has custody, and to use, inspect, make extracts from or request
copies of any such Records in the manner and to the extent requested, and to
duplicate, in the discretion of the Receiver or the Corporation, any Record in
the form of microfilm or microfiche pertaining to Deposit account
relationships;
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provided, that in the
event that the Failed Bank maintained one or more duplicate copies of such
microfilm or microfiche Records, the Assuming Bank hereby assigns, transfers,
and conveys to the Corporation one such duplicate copy of each such Record
without cost to the Corporation, and agrees to deliver to the Corporation all
Records assigned and transferred to the Corporation under this Article VI as
soon as practicable on or after the date of this Agreement. The party requesting
a copy of any Record shall bear the cost (based on standard accepted industry
charges to the extent applicable, as determined by the Receiver) for providing
such duplicate Records. A copy of each Record requested shall be provided as
soon as practicable by the party having custody thereof.
ARTICLE
VII
The
Assuming Bank has submitted to the Receiver a negative asset discount bid of
($100,000,000) and a Deposit premium bid of 1%. The Deposit premium bid will be
applied to the total of all Assumed Deposits except for brokered, CDARS, and any
market place or similar subscription services Deposits. The First Loss Tranche
shall be determined by adding (i) the asset discount bid, (ii) the Deposit
premium bid, and (iii) the Equity Adjustment. If the First Loss Tranche is a
positive number, then this is the Losses on Single Family Shared-Loss Loans and
Net Charge-offs on Shared Loss Assets that the Assuming Bank will incur before
loss-sharing commences under Exhibits 4.15A and 4.15B. If the First Loss Tranche
is a negative number, the Corporation shall pay such amount by wire transfer to
the Assuming Bank by the end of the first business day following Bank Closing
and loss sharing shall commence immediately.
ARTICLE
VIII
8.1 Pro Forma
Statement. The Receiver, as soon as
practicable after Bank Closing, in accordance with the best information then
available, shall provide to the Assuming Bank a pro forma statement reflecting
any adjustments of such liabilities and assets as may be necessary. Such pro
forma statement shall take into account, to the extent possible, (i) liabilities
and assets of a nature similar to those contemplated by Section 2.1 or Section
3.1, respectively, which at Bank Closing were carried in the Failed Bank's
suspense accounts, (ii) accruals as of Bank Closing for all income related to
the assets and business of the Failed Bank acquired by the Assuming Bank
hereunder, whether or not such accruals were reflected on the Accounting Records
of the Failed Bank in the normal course of its operations, and (iii) adjustments
to determine the Book Value of any investment in an Acquired Subsidiary and
related accounts on the "bank only" (unconsolidated) balance sheet of the Failed
Bank based on the equity method of accounting, whether or not the Failed Bank
used the equity method of accounting for investments in subsidiaries, except
that the resulting amount cannot be less than the Acquired Subsidiary's recorded
equity as of Bank Closing as reflected on the Accounting Records of
the
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Acquired
Subsidiary. Any Loan purchased by the Assuming Bank pursuant to Section 3.I
which the Failed Bank charged off during the period following the date of the
most recent pertinent data made available to the Assuming Bank as part of the
Information Package to Bank Closing shall be deemed not to be charged off for
the purposes of the pro forma statement, and the purchase price shall be
determined pursuant to Section 3.2.
8.2 Correction of Errors and
Omissions; Other Liabilities.
(a) In the
event any bookkeeping omissions or errors are discovered in preparing any pro
forma statement or in completing the transfers and assumptions contemplated
hereby, the parties hereto agree to correct such errors and omissions, it being
understood that, as far as practicable, all adjustments will be made consistent
with the judgments, methods, policies or accounting principles utilized by the
Failed Bank in preparing and maintaining Accounting Records, except that
adjustments made pursuant to this Section 8.2(a) are not intended to bring the
Accounting Records of the Failed Bank into accordance with generally accepted
accounting principles.
(b) If the
Receiver discovers at any time subsequent to the date of this Agreement that any
claim exists against the Failed Bank which is of such a nature that it would
have been included in the liabilities assumed under Article II had the existence
of such claim or the facts giving rise thereto been known as of Bank Closing,
the Receiver may, in its discretion, at any time, require that such claim be
assumed by the Assuming Bank in a manner consistent with the intent of this
Agreement: The Receiver will make appropriate adjustments to the pro forma
statement provided by the Receiver to the Assuming Bank pursuant to Section 8.1
as may be necessary.
8.3 Payments. The Receiver agrees to
cause to be paid to the Assuming Bank, or the Assuming Bank agrees to pay to the
Receiver, as the case may be, on the Settlement Date, a payment in an amount
which reflects net adjustments (including any costs, expenses and fees
associated with determinations of value as provided in this Agreement) made
pursuant to Section 8.1 or Section 8.2, plus interest as provided in Section
8.4. The Receiver and the Assuming Bank agree to effect on the Settlement Date
any further transfer of assets to or assumption of liabilities or claims by the
Assuming Bank as may be necessary in accordance with Section 8.1 or Section
8.2.
8.4 Interest. Any amounts paid under
Section 8.3 or Section 8.5, shall bear interest for the period from and
including the day following Bank Closing to and including the day preceding the
payment at the Settlement Interest Rate.
8.5 Subsequent
Adjustments. In the event that the
Assuming Bank or the Receiver discovers any errors or omissions as contemplated
by Section 8.2 or any error with respect to the payment made under Section 8.3
after the Settlement Date, the Assuming Bank and the Receiver agree to promptly
correct any such errors or omissions, make any payments and effect any transfers
or assumptions as may be necessary to reflect any such correction plus interest
as provided in Section 8.4.
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ARTICLE
IX
9.1 General
Matters. The
parties hereto agree that they will, in good faith and with their best efforts,
cooperate with each other to carry out the transactions contemplated by this
Agreement and to effect the purposes hereof.
9.2 Additional
Title Documents. The Receiver, the
Corporation and the Assuming Bank each agree, at any time, and from time to
time, upon the request of any party hereto, to execute and deliver such
additional instruments and documents of conveyance as shall be reasonably
necessary to vest in the appropriate party its full legal or equitable title in
and to the property transferred pursuant to this Agreement or to be transferred
in accordance herewith. The Assuming Bank shall prepare such instruments and
documents of conveyance (in form and substance satisfactory to the Receiver) as
shall be necessary to vest title to the Assets in the Assuming Bank. The
Assuming Bank shall be responsible for recording such instruments and documents
of conveyance at its own expense.
9.3 Claims and
Suits.
(a) The
Receiver shall have the right, in its discretion, to (i) defend or settle any
claim or suit against the Assuming Bank with respect to which the Receiver has
indemnified the Assuming Bank in the same manner and to the same extent as
provided in Article XII, and (ii) defend or settle any claim or suit against the
Assuming Bank with respect to any Liability Assumed, which claim or suit may
result in a loss to the Receiver arising out of or related to this Agreement, or
which existed against the Failed Bank on or before Bank Closing. The exercise by
the Receiver of any rights under this Section 9.3(a) shall not release the
Assuming Bank with respect to any of its obligations under this
Agreement.
(b) In the
event any action at law or in equity shall be instituted by any Person against
the Receiver and the Corporation as codefendants with respect to any asset of
the Failed Bank retained or acquired pursuant to this Agreement by the Receiver,
the Receiver agrees, at the request of the Corporation, to join with the
Corporation in a petition to remove the action to the United States District
Court for the proper district. The Receiver agrees to institute, with or without
joinder of the Corporation as coplaintiff, any action with respect to any such
retained or acquired asset or any matter connected therewith whenever notice
requiring such action shall be given by the Corporation to the
Receiver.
9.4 Payment
of Deposits. In the event any
depositor does not accept the obligation of the Assuming Bank to pay any Deposit
liability of the Failed Bank assumed by the Assuming Bank pursuant to this
Agreement and asserts a claim against the Receiver for all or any portion of any
such Deposit liability, the Assuming Bank agrees on demand to provide to the
Receiver funds sufficient to pay such claim in an amount not in excess of the
Deposit liability reflected on the books of the Assuming Bank at the time such
claim is made. Upon payment by the Assuming Bank to the Receiver of such amount,
the Assuming Bank shall be discharged from any further
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obligation
under this Agreement to pay to any such depositor the amount of such Deposit
liability paid to the Receiver.
9.5 Withheld
Payments. At
any time, the Receiver or the Corporation may, in its discretion, determine that
all or any portion of any deposit balance assumed by the Assuming Bank pursuant
to this Agreement does not constitute a "Deposit" (or otherwise, in its
discretion, determine that it is the best interest of the Receiver or
Corporation to withhold all or any portion of any deposit), and may direct the
Assuming Bank to withhold payment of all or any portion of any such deposit
balance. Upon such direction, the Assuming Bank agrees to hold such deposit and
not to make any payment of such deposit balance to or on behalf of the
depositor, or to itself, whether by way of transfer, set-off, or otherwise. The
Assuming Bank agrees to maintain the "withheld payment" status of any such
deposit balance until directed in writing by the Receiver or the Corporation as
to its disposition. At the direction of the Receiver or the Corporation, the
Assuming Bank shall return all or any portion of such deposit balance to the
Receiver or the Corporation, as appropriate, and thereupon the Assuming Bank
shall be discharged from any further liability to such depositor with respect to
such returned deposit balance. If such deposit balance has been paid to the
depositor prior to a demand for return by the Corporation or the Receiver, and
payment of such deposit balance had not been previously withheld pursuant to
this Section, the Assuming Bank shall not be obligated to return such deposit
balance to the Receiver or the Corporation. The Assuming Bank shall be obligated
to reimburse the Corporation or the Receiver, as the case may be, for the amount
of any deposit balance or portion thereof paid by the Assuming Bank in
contravention of any previous direction to withhold payment of such deposit
balance or return such deposit balance the payment of which was withheld
pursuant to this Section.
(a) In
connection with any investigation, proceeding or other matter with respect to
any asset or liability of the Failed Bank retained by the Receiver, or any asset
of the Failed Bank acquired by the Receiver pursuant to this Agreement, the
Assuming Bank shall cooperate to the extent reasonably required by the
Receiver.
(b) In
addition to its obligations under Section 6.4, the Assuming Bank shall provide
representatives of the Receiver access at reasonable times and locations without
other limitation or qualification to (i) its directors, officers, employees and
agents and those of the Subsidiaries acquired by the Assuming Bank, and (ii) its
books and records, the books and records of such Subsidiaries and all Credit
Files, and copies thereof. Copies of books, records and Credit Files shall be
provided by the Assuming Bank as requested by the Receiver and the costs of
duplication thereof shall be borne by the Receiver.
(c) Not later
than ten (10) days after the Put Notice pursuant to Section 3.4 or the date of
the notice of transfer of any Loan by the Assuming Bank to the Receiver pursuant
to Section 3.6, the Assuming Bank shall deliver to the Receiver such documents
with respect to such Loan as the Receiver may request, including without
limitation the following: (i) all related Credit Documents (other than
certificates, notices and other ancillary documents), (ii) a certificate setting
forth the principal amount on the date of the transfer and the amount of
interest, fees and
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other charges then accrued and unpaid thereon, and any restrictions on transfer to which any such Loan is subject, and (iii) all Credit Files, and all documents, microfiche, microfilm and computer records (including but not limited to magnetic tape, disc storage, card forms and printed copy) maintained by, owned by, or in the possession of the Assuming Bank or any Affiliate of the Assuming Bank relating to the transferred Loan.
9.7 Information. The Assuming Bank
promptly shall provide to the Corporation such other information, including
financial statements and computations, relating to the performance of the
provisions of this Agreement as the Corporation or the Receiver may request from
time to time, and, at the request of the Receiver, make available employees of
the Failed Bank employed or retained by the Assuming Bank to assist in
preparation of the pro forma statement pursuant to Section 8.1.
ARTICLE
X
The
obligations of the parties to this Agreement are subject to the Receiver and the
Corporation having received at or before Bank Closing evidence reasonably
satisfactory to each of any necessary approval, waiver, or other action by any
governmental authority, the board of directors of the Assuming Bank, or other
third party, with respect to this Agreement and the transactions contemplated
hereby, the closing of the Failed Bank and the appointment of the Receiver, the
chartering of the Assuming Bank, and any agreements, documents, matters or
proceedings contemplated hereby or thereby.
ARTICLE
XI
The
Assuming Bank represents and warrants to the Corporation and the Receiver as
follows:
(a) Corporate
Existence and Authority. The Assuming Bank (i) is
duly organized, validly existing and in good standing under the laws of its
Chartering Authority and has full power and authority to own and operate its
properties and to conduct its business as now conducted by it, and (ii) has full
power and authority to execute and deliver this Agreement and to perform its
obligations hereunder. The Assuming Bank has taken all necessary corporate
action to authorize the execution, delivery and performance of this Agreement
and the performance of the transactions contemplated hereby.
(b) Third
Party Consents. No governmental
authority or other third party consents (including but not limited to approvals,
licenses, registrations or declarations) are required in connection with the
execution, delivery or performance by the Assuming Bank of this Agreement, other
than such consents as have been duly obtained and are in
full force and effect.
(c) Execution
and Enforceability. This Agreement has been
duly executed and delivered by the Assuming Bank and when this Agreement has
been duly authorized, executed
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and
delivered by the Corporation and the Receiver, this Agreement will constitute
the legal, valid and binding obligation of the Assuming Bank, enforceable in
accordance with its terms.
(i) Neither
the Assuming Bank nor any of its Subsidiaries is in violation of any statute,
regulation, order, decision, judgment or decree of, or any restriction imposed
by, the United States of America, any State, municipality or other political
subdivision or any agency of any of the foregoing, or any court or other
tribunal having jurisdiction over the Assuming Bank or any of its Subsidiaries
or any assets of any such Person, or any foreign government or agency thereof
having such jurisdiction, with respect to the conduct of the business of the
Assuming Bank or of any of its Subsidiaries, or the ownership of the properties
of the Assuming Bank or any of its Subsidiaries, which, either individually or
in the aggregate with all other such violations, would materially and adversely
affect the business, operations or condition (financial or otherwise) of the
Assuming Bank or the ability of the Assuming Bank to perform, satisfy or observe
any obligation or condition under this Agreement.
(ii) Neither
the execution and delivery nor the performance by the Assuming Bank of this
Agreement will result in any violation by the Assuming Bank of, or be in
conflict with, any provision of any applicable law or regulation, or any order,
writ or decree of any court or governmental authority.
e) Representations
Remain True. The Assuming Bank
represents and warrants that it has executed and delivered to the Corporation a
Purchaser Eligibility Certification and Confidentiality Agreement and that all
information provided and representations made by or on behalf of the Assuming
Bank in connection with this Agreement and the transactions contemplated hereby,
including, but not limited to, the Purchaser Eligibility Certification and
Confidentiality Agreement (which are affirmed and ratified hereby) are and
remain true and correct in all material respects and do not fail to state any
fact required to make the information contained therein not
misleading.
ARTICLE
XII
12.1 Indemnification
of Indemnitees. From and after Bank
Closing and subject to the limitations set forth in this Section and Section
12.6 and compliance by the Indemnitees with Section 1 2.2, the Receiver agrees
to indemnify and hold harmless the Indemnitees against any and all costs,
losses, liabilities, expenses (including attorneys' fees) incurred prior to the
assumption of defense by the Receiver pursuant to paragraph (d) of Section 12.2,
judgments, fines and amounts paid in settlement actually and reasonably incurred
in connection with claims against any Indemnitee based on liabilities of the
Failed Bank that are not assumed by the Assuming Bank pursuant to this Agreement
or subsequent to the execution hereof by the Assuming Bank or any Subsidiary or
Affiliate of the Assuming Bank for which indemnification is provided hereunder
in (a) of this Section 12.1, subject to certain exclusions as provided in (b) of
this Section 12.1:
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(a)
(1)
claims based on the rights of any shareholder or former shareholder as such of
(x) the Failed Bank, or (y) any Subsidiary or Affiliate of the Failed
Bank;
(2) claims
based on the rights of any creditor as such of the Failed Bank, or any creditor
as such of any director, officer, employee or agent of the Failed Bank, with
respect to any indebtedness or other obligation of the Failed Bank arising prior
to Bank Closing;
(3) claims
based on the rights of any present or former director, officer, employee or
agent as such of the Failed Bank or of any Subsidiary or Affiliate of the Failed
Bank;
(4) claims
based on any action or inaction prior to Bank Closing of the Failed Bank, its
directors, officers, employees or agents as such, or any Subsidiary or Affiliate
of the Failed Bank, or the directors, officers, employees or agents as such of
such Subsidiary or Affiliate;
(5) claims
based on any malfeasance, misfeasance or nonfeasance of the Failed Bank, its
directors, officers, employees or agents with respect to the trust business of
the Failed Bank, if any;
(6) claims
based on any failure or alleged failure (not in violation of law) by the
Assuming Bank to continue to perform any service or activity previously
performed by the Failed Bank which the Assuming Bank is not required to perform
pursuant to this Agreement or which arise under any contract to which the Failed
Bank was a party which the Assuming Bank elected not to assume in accordance
with this Agreement and which neither the Assuming Bank nor any Subsidiary or
Affiliate of the Assuming Bank has assumed subsequent to the execution
hereof;
(7) claims
arising from any action or inaction of any Indemnitee, including for purposes of
this Section 12.1(a)(7) the former officers or employees of the Failed Bank or
of any Subsidiary or Affiliate of the Failed Bank that is taken upon the
specific written direction of the Corporation or the Receiver, other than any action or
inaction taken in a manner constituting bad faith, gross negligence or willful
misconduct; and
(8) claims
based on the rights of any depositor of the Failed Bank whose deposit has been
accorded "withheld payment" status and/or returned to the Receiver or
Corporation in accordance with Section 9.5 and/or has become an "unclaimed
deposit" or has been returned to the Corporation or the Receiver in accordance
with Section 2.3;
(b) provided, that, with
respect to this Agreement, except for paragraphs (7) and (8) of Section 12.1(a),
no indemnification will be provided under this Agreement for any:
(1)
judgment or fine against, or any amount paid in settlement (without the written
approval of the Receiver) by, any Indemnitee in connection with any action that
seeks damages
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against
any Indemnitee (a "counterclaim") arising with respect to any Asset and based on
any action or inaction of either the Failed Bank, its directors, officers,
employees or agents as such prior to Bank Closing, unless any such judgment,
fine or amount paid in settlement exceeds the greater of (i) the Repurchase
Price of such Asset, or (ii) the monetary recovery sought on such Asset by the
Assuming Bank in the cause of action from which the counterclaim arises; and in
such event the Receiver will provide indemnification only in the amount of such
excess; and no indemnification will be provided for any costs or expenses other
than any costs or expenses (including attorneys' fees) which, in the
determination of the Receiver, have been actually and reasonably incurred by
such Indemnitee in connection with the defense of any such counterclaim; and it
is expressly agreed that the Receiver reserves the right to intervene, in its
discretion, on its behalf and/or on behalf of the Receiver, in the defense of
any such counterclaim;
(2) claims
with respect to any liability or obligation of the Failed Bank that is expressly
assumed by the Assuming Bank pursuant to this Agreement or subsequent to the
execution hereof by the Assuming Bank or any Subsidiary or Affiliate of the
Assuming Bank;
(3) claims
with respect to any liability of the Failed Bank to any present or former
employee as such of the Failed Bank or of any Subsidiary or Affiliate of the
Failed Bank, which liability is expressly assumed by the Assuming Bank pursuant
to this Agreement or subsequent to the execution hereof by the Assuming Bank or
any Subsidiary or Affiliate of the Assuming Bank;
(4) claims
based on the failure of any Indemnitee to seek recovery of damages from the
Receiver for any claims based upon any action or inaction of the Failed Bank,
its directors, officers, employees or agents as fiduciary, agent or custodian
prior to Bank Closing;
(5) claims
based on any violation or alleged violation by any Indemnitee of the antitrust,
branching, banking or bank holding company or securities laws of the United
States of America or any State thereof;
(6) claims
based on the rights of any present or former creditor, customer, or supplier as
such of the Assuming Bank or any Subsidiary or Affiliate of the Assuming
Bank;
(7) claims
based on the rights of any present or former shareholder as such of the Assuming
Bank or any Subsidiary or Affiliate of the Assuming Bank regardless of whether
any such present or former shareholder is also a present or former shareholder
of the Failed Bank;
(8) claims,
if the Receiver determines that the effect of providing such indemnification
would be to (i) expand or alter the provisions of any warranty or disclaimer
thereof provided in Section 3.3 or any other provision of this Agreement, or
(ii) create any warranty not expressly provided under this
Agreement;
(9) claims
which could have been enforced against any Indemnitee had the Assuming Bank not
entered into this Agreement;
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(10)
claims based on any liability for taxes or fees assessed with respect to the
consummation of the transactions contemplated by this Agreement, including
without limitation any subsequent transfer of any Assets or Liabilities Assumed
to any Subsidiary or Affiliate of the Assuming Bank;
(11)
except as expressly provided in this Article XII, claims based on any action or
inaction of any Indemnitee, and nothing in this Agreement shall be construed to
provide indemnification for (i) the Failed Bank, (ii) any Subsidiary or
Affiliate of the Failed Bank, or (iii) any present or former director, officer,
employee or agent of the Failed Bank or its Subsidiaries or Affiliates; provided, that the
Receiver, in its discretion, may provide indemnification hereunder for any
present or former director, officer, employee or agent of the Failed Bank or its
Subsidiaries or Affiliates who is also or becomes a director, officer, employee
or agent of the Assuming Bank or its Subsidiaries or Affiliates;
(12) claims or
actions which constitute a breach by the Assuming Bank of the representations
and warranties contained in Article XI;
(13) claims
arising out of or relating to the condition of or generated by an Asset arising
from or relating to the presence, storage or release of any hazardous or toxic
substance, or any pollutant or contaminant, or condition of such Asset which
violate any applicable Federal, State or local law or regulation concerning
environmental protection; and
(14) claims
based on, related to or arising from any asset, including a loan, acquired or
liability assumed by the Assuming Bank, other than pursuant to this
Agreement.
12.2 Conditions
Precedent to Indemnification. It shall be a condition
precedent to the obligation of the Receiver to indemnify any Person pursuant to
this Article XII that such Person shall, with respect to any claim made or
threatened against such Person for which such Person is or may be entitled to
indemnification hereunder:
(a) give
written notice to the Regional Counsel (Litigation Branch) of the Corporation in
the manner and at the address provided in Section 13.7 of such claim as soon as
practicable after such claim is made or threatened; provided, that notice
must be given on or before the date which is six (6) years from the date of this
Agreement;
(b) provide
to the Receiver such information and cooperation with respect to such claim as
the Receiver may reasonably require;
(c) cooperate
and take all steps, as the Receiver may reasonably require, to preserve and
protect any defense to such claim;
(d) in the
event suit is brought with respect to such claim, upon reasonable prior notice,
afford to the Receiver the right, which the Receiver may exercise in its sole
discretion, to conduct the investigation, control the defense and effect
settlement of such claim, including without limitation the right to designate
counsel and to control all negotiations, litigation, arbitration, settlements,
compromises and appeals of any such claim, all of which shall be at
the
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expense
of the Receiver; provided, that the
Receiver shall have notified the Person claiming indemnification in writing that
such claim is a claim with respect to which the Person claiming indemnification
is entitled to indemnification under this Article XII;
(e) not incur
any costs or expenses in connection with any response or suit with respect to
such claim, unless such costs or expenses were incurred upon the written
direction of the Receiver; provided, that the
Receiver shall not be obligated to reimburse the amount of any such costs or
expenses unless such costs or expenses were incurred upon the written direction
of the Receiver;
(f) not
release or settle such claim or make any payment or admission with respect
thereto, unless the Receiver consents in writing thereto, which consent shall
not be unreasonably withheld; provided, that the
Receiver shall not be obligated to reimburse the amount of any such settlement
or payment unless such settlement or payment was effected upon the written
direction of the Receiver; and
(g) take
reasonable action as the Receiver may request in writing as necessary to
preserve, protect or enforce the rights of the indemnified Person against any
Primary Indemnitor.
12.3 No
Additional Warranty. Nothing in this Article
XII shall be construed or deemed to (i) expand or otherwise alter any warranty
or disclaimer thereof provided under Section 3.3 or any other provision of this
Agreement with respect to, among other matters, the title, value,
collectibility, genuineness, enforceability or condition of any (x) Asset, or
(y) asset of the Failed Bank purchased by the Assuming Bank subsequent to the
execution of this Agreement by the Assuming Bank or any Subsidiary or Affiliate
of the Assuming Bank, or (ii) create any warranty not expressly provided under
this Agreement with respect thereto.
12.4 Indemnification
of Receiver and Corporation. From and after Bank
Closing, the Assuming Bank agrees to indemnify and hold harmless the Corporation
and the Receiver and their respective directors, officers, employees and agents
from and against any and all costs, losses, liabilities, expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred in connection with any of the following:
(a) claims
based on any and all liabilities or obligations of the Failed Bank assumed by
the Assuming Bank pursuant to this Agreement or subsequent to the execution
hereof by the Assuming Bank or any Subsidiary or Affiliate of the Assuming Bank,
whether or not any such liabilities subsequently are sold and/or transferred,
other than any claim based upon any action or inaction of any Indemnitee as
provided in paragraph (7) or (8) of Section 12.1(a); and
(b) claims
based on any act or omission of any Indemnitee (including but not limited to
claims of any Person claiming any right or title by or through the Assuming Bank
with respect to Assets transferred to the Receiver pursuant to Section 3.4 or
3.6), other than any action or inaction of any Indemnitee as provided in
paragraph (7) or (8) of Section 12.1(a).
12.5 Obligations
Supplemental. The obligations of the
Receiver, and the Corporation as guarantor in accordance with Section 12.7, to
provide indemnification under this Article XII
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are to
supplement any amount payable by any Primary Indemnitor to the Person
indemnified under this Article XII. Consistent with that intent, the Receiver
agrees only to make payments pursuant to such indemnification to the extent not
payable by a Primary Indemnitor. if the aggregate amount of payments by the
Receiver, or the Corporation as guarantor in accordance with Section 12.7, and
all Primary Indemnitors with respect to any item of indemnification under this
Article XII exceeds the amount payable with respect to such item, such Person
being indemnified shall notify the Receiver thereof and, upon the request of the
Receiver, shall promptly pay to the Receiver, or the Corporation as appropriate,
the amount of the Receiver's (or Corporation's) payments to the extent of such
excess.
12.6 Criminal
Claims. Notwithstanding any
provision of this Article XII to the contrary, in the event that any Person
being indemnified under this Article XII shall become involved in any criminal
action, suit or proceeding, whether judicial, administrative or investigative,
the Receiver shall have no obligation hereunder to indemnify such Person for
liability with respect to any criminal act or to the extent any costs or
expenses are attributable to the defense against the allegation of any criminal
act, unless (i) the Person is successful on the merits or otherwise in the
defense against any such action, suit or proceeding, or (ii) such action, suit
or proceeding is terminated without the imposition of liability on such
Person.
12.7 Limited
Guaranty of the Corporation. The Corporation hereby
guarantees performance of the Receiver's obligation to indemnify the Assuming
Bank as set forth in this Article XII. It is a condition to the Corporation's
obligation hereunder that the Assuming Bank shall comply in all respects with
the applicable provisions of this Article XII. The Corporation shall be liable
hereunder only for such amounts, if any, as the Receiver is obligated to pay
under the terms of this Article XII but shall fail to pay. Except as otherwise
provided above in this Section 12.7, nothing in this Article XII is intended or
shall be construed to create any liability or obligation on the part of the
Corporation, the United States of America or any department or agency thereof
under or with respect to this Article XII, or any provision hereof, it being the
intention of the parties hereto that the obligations undertaken by the Receiver
under this Article XII are the sole and exclusive responsibility of the Receiver
and no other Person or entity.
12.8 Subrogation. Upon payment by the
Receiver, or the Corporation as guarantor in accordance with Section 12.7, to
any lndemnitee for any claims indemnified by the Receiver under this Article
XII, the Receiver, or the Corporation as appropriate, shall become subrogated to
all rights of the lndemnitee against any other Person to the extent of such
payment.
ARTICLE
XIII
13.1 Entire
Agreement. This Agreement embodies
the entire agreement of the parties hereto in relation to the subject matter
herein and supersedes all prior understandings or `agreements, oral or written,
between the parties.
13.2 Headings. The headings and
subheadings of the Table of Contents, Articles and Sections contained in this
Agreement, except the terms identified for definition in Article I
and
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elsewhere
in this Agreement, are inserted for convenience only and shall not affect the
meaning or interpretation of this Agreement or any provision
hereof.
13.3 Counterparts. This Agreement may be
executed in any number of counterparts and by the duly authorized representative
of a different party hereto on separate counterparts, each of which when so
executed shall be deemed to be an original and all of which when taken together
shall constitute one and the same Agreement.
13.4 GOVERNING
LAW. THIS
AGREEMENT AND THE RIGHTS AND OBLIGATIONS HEREUNDER SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE FEDERAL LAW OF THE UNITED STATES OF AMERICA,
AND IN THE ABSENCE OF CONTROLLING FEDERAL LAW, IN ACCORDANCE WITH THE LAWS OF
THE STATE IN WHICH THE MAIN OFFICE OF THE FAILED BANK IS LOCATED.
13.5 Successors. All terms and conditions
of this Agreement shall be binding on the successors and assigns of the
Receiver, the Corporation and the Assuming Bank. Except as otherwise
specifically provided in this Agreement, nothing expressed or referred to in
this Agreement is intended or shall be construed to give any Person other than
the Receiver, the Corporation and the Assuming Bank any legal or equitable
right, remedy or claim under or with respect to this Agreement or any provisions
contained herein, it being the intention of the parties hereto that this
Agreement, the obligations and statements of responsibilities hereunder, and all
other conditions and provisions hereof are for the sole and exclusive benefit of
the Receiver, the .Corporation and the Assuming Bank and for the benefit of no
other Person.
13.6 Modification;
Assignment. No amendment or other
modification, rescission, release, or assignment of any part of this Agreement
shall be effective except pursuant to a written agreement subscribed by the duly
authorized representatives of the parties hereto.
13.7 Notice. Any notice, request,
demand, consent, approval or other communication to any party hereto shall be
effective when received and shall be given in writing, and
delivered in person against receipt therefore, or sent by certified mail,
postage prepaid, courier service, telex, facsimile transmission or email to such
party (with copies as indicated below) at its address set forth below or at such
other address as it
shall hereafter furnish in writing to the other parties. All such notices
and other communications shall be deemed given on the date received by the
addressee.
Great
Southern Bank
0000 X.
Xxxxxxxxxxx
Xxxxxxxxxxx,
XX 00000
Attention: Xxxxxx
Xxxxxx
Receiver and
Corporation
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Federal
Deposit Insurance Corporation,
Receiver
of TeamBank, NA.
0000
Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxx,
Xxxxx 00000
Attention:
Settlement Manager
with copy
to: Regional Counsel (Litigation Branch)
and with respect to notice under
Article XII:
Federal
Deposit Insurance Corporation
Receiver
of TeamBank, N.A.
0000
Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxx,
Xxxxx 00000
Attention:
Regional Counsel (Litigation Branch)
13.8 Manner of
Payment. All
payments due under this Agreement shall be in lawful money of the United States
of America in immediately available funds as each party hereto may specify to
the other parties; provided, that in the
event the Receiver or the Corporation is obligated to make any payment hereunder
in the amount of $25,000.00 or less, such payment may be made by
check.
13.9 Costs,
Fees and Expenses. Except as otherwise
specifically provided herein, each party hereto agrees to pay all costs, fees
and expenses which it has incurred in connection with or incidental to the
matters contained in this Agreement, including without limitation any fees and
disbursements to its accountants and counsel; provided, that the
Assuming Bank shall pay all fees, costs and expenses (other than attorneys' fees
incurred by the Receiver) incurred in connection with the transfer to it of any
Assets or Liabilities Assumed hereunder or in accordance herewith.
13.10 Waiver. Each of the Receiver,
the Corporation and the Assuming Bank may waive its respective rights, powers or
privileges under this Agreement; provided, that such
waiver shall be in writing; and further provided, that no
failure or delay on the part of the Receiver, the Corporation or the Assuming
Bank to exercise any right, power or privilege under this Agreement shall
operate as a waiver thereof, nor will any single or partial exercise of any
right, power or privilege under this Agreement preclude any other or further
exercise thereof or the exercise of any other right, power or privilege by the
Receiver, the Corporation, or the Assuming Bank under this Agreement, nor will
any such waiver operate or be construed as a future waiver of such right, power
or privilege under this Agreement.
13.11 Severability. If any provision of this
Agreement is declared invalid or unenforceable, then, to the extent possible,
all of the remaining provisions of this Agreement shall remain in full force and
effect and shall be binding upon the parties hereto.
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13.12 Term of
Agreement. This Agreement shall
continue in full force and effect until the sixth (6th) anniversary of Bank
Closing; provided, that the
provisions of Section 6.3 and 6.4 shall survive the expiration of the term of
this Agreement. Provided, however, the receivership of the Failed Bank may be
terminated prior to the expiration of the term of this Agreement; in such event,
the guaranty of the Corporation, as provided in and in accordance with the
provisions of Section 12.7 shall be in effect for the remainder of the term.
Expiration of the term of this Agreement shall not affect any claim or liability
of any party with respect to any (i) amount which is owing at the time of such
expiration, regardless of when such amount becomes payable, and (ii) breach of
this Agreement occurring prior to such expiration, regardless of when such
breach is discovered.
13.13 Survival
of Covenants, Etc. The covenants,
representations, and warranties in this Agreement shall survive the execution of
this Agreement and the consummation of the transactions contemplated
hereunder.
[Signature
Page Follows]
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IN WITNESS WHEREOF, the
parties hereto have caused this Agreement to be executed by their duly
authorized representatives as of the date first above written.
FEDERAL
DEPOSIT INSURANCE CORPORATION,
RECEIVER
OF TEAMBANK, N.A.
PAOLA,
KANSAS
|
||
BY: /s/ Xxxxxx X.
Xxxxxx
|
||
NAME: Xxxxxx
X. Xxxxxx
|
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TITLE: Receiver
in Charge
|
||
Attest:
|
||
/s/ Xxx X. Xxxxxx
|
||
FEDERAL
DEPOSIT INSURANCE CORPORATION
|
||
BY: /s/ Xxxxxx X.
Xxxxxx
|
||
NAME: Xxxxxx
X. Xxxxxx
|
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TITLE: Senior
Strategic Operations Specialist
|
||
Attest:
|
||
/s/ Xxx X. Xxxxxx
|
||
GREAT
SOUTHERN BANK
|
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BY: /s/Xxxxxx X.
Xxxxxx
|
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NAME: Xxxxxx
X. Xxxxxx
|
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TITLE: President
|
||
Attest:
|
||
/s/ Xxxxx X.
Xxxxx
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SCHEDULE
2.1 - Certain Liabilities Assumed by the Assuming Bank
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SCHEDULE
2.1(a) - Excluded Deposit Liability Accounts
The
Failed Bank has deposits associated with the Depository Organization (DO) Cede
& Co as Nominee for DTC. The deposit liability accounts associated with Cede
& Co., as nominee for the Depository Trust Company, and/or the Depository
Trust Company, do not pass to the Assuming Bank and are excluded from the
transaction, including, but not limited to, the following accounts:
Account
Number:
Account
Number:
This
schedule will be updated post closing with data as of Bank Closing
date.
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SCHEDULE
3.1 - Certain Assets Purchased
SEE
ATTACHED LIST
THE
LIST(S) ATTACHED TO THIS SCHEDULE (OR SUBSCHEDULE(S)) AND THE INFORMATION
THEREIN, IS AS OF THE DATE OF THE MOST RECENT PERTINENT DATA MADE AVAILABLE TO
THE ASSUMING BANK AS PART OF THE INFORMATION PACKAGE. IT WILL BE ADJUSTED TO
REFLECT THE COMPOSITION AND BOOK VALUE OF THE LOANS AND ASSETS AS OF THE DATE OF
BANK CLOSING. THE LIST(S) MAY NOT INCLUDE ALL LOANS AND ASSETS (E.G., CHARGED
OFF LOANS). THE LIST(S) MAY BE REPLACED WITH A MORE ACCURATE LIST POST
CLOSING.
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SCHEDULE
3.1a - Subsidiary and Other Business
Combination Entities Acquired
SEE
ATTACHED LIST
THE
LIST(S) ATTACHED TO THIS SCHEDULE (OR SUBSCHEDULE(S)) AND THE INFORMATION
THEREIN, IS AS OF BANK CLOSING.
Name TIN Active/Inactive/Dissolved/Terminated
THIS
SCHEDULE IS TO BE REMOVED IF SCHEDULE IS NOT COMPLETED]
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SCHEDULE 3.2 - Purchase Price of Assets or
assets
(a)
|
cash
and receivables from depository institutions, including cash items in the
process of collection, plus interest thereon:
|
Book
Value
|
(b)
|
securities
(exclusive of the capital stock of Acquired Subsidiaries), plus interest
thereon:
|
Book
Value
|
(c)
|
federal
funds sold and repurchase agreements, if any, including interest
thereon:
|
Book
Value
|
(d)
|
Loans:
|
Book
Value
|
(e)
|
credit
card business, if any, including all outstanding extensions of credit and
offensive litigation, but excluding any class action lawsuits related to
the credit card business:
|
Book
Value
|
(f)
|
Safe
Deposit Boxes and related business, and safekeeping business, if
any:
|
Book
Value
|
(g)
|
Records
and other documents:
|
Book
Value
|
(h)
|
capital
stock of any Acquired Subsidiaries:
|
Book
Value
|
(i)
|
amounts
owed to the Failed Bank by any Acquired Subsidiary:
|
Book
Value
|
(j)
|
assets
securing Deposits of public money, to the extent not otherwise purchased
hereunder:
|
Book
Value
|
(k)
|
Overdrafts
of customers:
|
Book
Value
|
(l)
|
rights,
if any, with respect to Qualified Financial Contracts:
|
Book
Value
|
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(m)
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rights
of the Failed Bank to provide mortgage servicing for others and to have
mortgage servicing provided to the Failed Bank by others and related
contracts.
|
Book
Value
|
assets
subject to an option to purchase:
(a)
|
Bank
Premises:
|
Fair
Market Value
|
(b)
|
Furniture
and Equipment:
|
Fair
Market Value
|
(c)
|
Fixtures:
|
Fair
Market Value
|
(d)
|
Other
Equipment:
|
Fair
Market Value
|
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SCHEDULE
7 -Accounts Excluded from Calculation of Deposit Franchise Bid
Premium
The
accounts identified below will pass to the Assuming Bank (unless otherwise
noted). When calculating the premium to be paid on Assumed Deposits in a P&A
transaction, the FDIC will exclude the following categories of deposit
accounts:
Category
|
Description
|
Amount
|
I
|
Non-
DO Brokered Deposits
|
$__,___,___.__
|
II
|
CDARS
|
$__,___,___.__
|
III
|
Market
Place Deposits
|
$___,___,___.__
|
Total
deposits excluded from Calculation of premium
|
$___,___,___.__
|
Category
Description
I Brokered Deposits
Brokered
deposit accounts are accounts for which the "depositor of record" is an agent,
nominee, or custodian who deposits funds for a principal or principals to whom
"pass-through" deposit insurance coverage may be extended. The FDIC separates
brokered deposit accounts into 2 categories: 1) Depository Organization (DO)
Brokered Deposits and 2) Non-Depository Organization (Non-DO) Brokered Deposits.
This distinction is made by the FDIC to facilitate our role as Receiver and
Insurer. These terms will not appear on other "brokered deposit" reports
generated by the institution.
Non-DO
Brokered Deposits pass to the Assuming Bank, but are excluded from Assumed
Deposits when the deposit premium is calculated. Please see the attached
"Schedule 7 Non-DO Broker Deposit Detail Report" for a listing of these
accounts. This list will be updated post closing with balances as of Bank
Closing date.
If this
institution had any DO Brokered Deposits (Cede & Co as Nominee for DTC),
they are excluded from Assumed Deposits in the P&A transaction. A list of
these accounts is provided on "Schedule 2.1 DO Brokered Deposit Detail
Report".
II
CDARS
CDARS
deposits pass to the Assuming Bank, but are excluded from Assumed Deposits when
the deposit premium is calculated.
_______________did
not participate in the CDARS program as of the date of the deposit download. If
CDARS deposits are taken between the date of the deposit download and the Bank
Closing Date, they will be identified post closing and made part of Schedule 7
to the P&A Agreement.
"Market
Place Deposits" is a description given to deposits that may have been solicited
via a money desk, internet subscription service (for example, Qwickrate), or
similar programs.
____________
does have Qwickrate deposits as identified above. The Qwickrate deposits are
reported as time deposits in the Call Report.
_______________ uses "Branch 4" on their system to identify both brokered
and
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Qwickrate
deposits. Please see the attached Schedule 7 - Qwickrate Deposit Detail Report
for a listing of these accounts as of _______ __, 200_. This list will be
updated post closing with balances as of Bank Closing date.
This
schedule provides account categories and balances as of the date of the deposit
download, or as indicated. The deposit franchise bid premium will be calculated
using account categories and balances as of Bank Closing Date that are reflected
in the general ledger or subsystem as described above. The final numbers for
Schedule 7 will be provided post closing.
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EXHIBIT
4.13
(a) With
respect to each asset (or liability) designated from time to time by the
Receiver to be serviced by the Assuming Bank pursuant to this Arrangement (such
being designated as "Pool Assets"), during the term of this Arrangement, the
Assuming Bank shall:
(i) Promptly
apply payments received with respect to any Pool Assets;
(ii) Reverse
and return insufficient funds checks;
(iii) Pay (A)
participation payments to participants in Loans, as and when received; and (B)
tax and insurance bills on Pool Assets as they come due, out of escrow funds
maintained for purposes;
(iv) Maintain
accurate records reflecting (A) the payment history of Pool Assets, with updated
information received concerning changes in the address or identity of the
obligors and (B) usage of data processing equipment and employee services with
respect to servicing duties;
(v) Send
billing statements to obligors on Pool Assets to the extent that such statements
were sent by the Failed Bank;
(vi) Send
notices to obligors who are in default on Loans (in the same manner as the
Failed Bank);
(vii) Send to
the Receiver, Attn: Managing Liquidator, at the address provided in Section 13.7
of the Agreement, via overnight delivery: (A) on a
weekly basis, weekly reports for the Pool Assets, including, without limitation,
reports reflecting collections and the trial balances, transaction journals and
loan histories for Pool Assets having activity, together with copies of (l)
checks received, (2) insufficient funds checks returned, (3) checks for payment
to participants or for taxes and insurance, (4) pay-off requests, (5) notices to
defaulted obligors, and (6) data processing and employee logs and (B) any other
reports, copies or information as may be periodically or from time to time
requested;
(viii) Remit on
a weekly basis to the Receiver, Attn: Division of Finance, Cashier Unit,
Operations, at the address in (vii), via wire transfer to the
account designated by the Receiver, all payments received on Pool Assets managed
by the Assuming Bank or at such time and place and in
such manner as may be directed by the Receiver;
(ix) prepare
and timely file all information reports with appropriate tax authorities, and,
if required by the Receiver, prepare and file tax returns and pay taxes due on
or before the due date, relating to the Pool Assets; and
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(x)
provide and furnish such other services, operations or functions as may be
required with regard to Pool Assets, including, without limitation, as may be
required with regard to any business, enterprise or agreement which is a Pool
Asset, all as may be required by the Receiver.
Notwithstanding
anything to the contrary in this Section, the Assuming Bank shall not be
required to initiate litigation or other collection proceedings against any
obligor or any collateral with respect to any defaulted Loan. The Assuming Bank
shall promptly notify the Receiver, at the address provided above in
subparagraph (a)(vii), of any claims or legal actions regarding any Pool
Asset.
(b) The
Receiver agrees to reimburse the Assuming Bank for actual, reasonable and
necessary expenses incurred in connection with the performance of duties
pursuant to this Arrangement, including expenses of photocopying, postage and
express mail, and data processing and employee services (based upon the number
of hours spent performing servicing duties).
(c) The
Assuming Bank shall provide the services described herein for an initial period
of ninety (90) days after Bank Closing. At the option of the Receiver,
exercisable by notice given not later than ten (10) days prior to the end of
such initial period or a renewal period, the Assuming Bank shall continue to
provide such services for such renewal period(s) as designated by the Receiver,
up to the Settlement Date.
(d) At any
time during the term of this Arrangement, the Receiver may, upon written notice
to the Assuming Bank, remove one or more Pool Assets from the Pool, at which
time the Assuming Bank's responsibility with respect thereto shall
terminate.
(e) At the
expiration of this Agreement or upon the termination of the Assuming Bank's
responsibility with respect to any Pool Asset pursuant to paragraph (d) hereof,
the Assuming Bank shall:
(i) deliver
to the Receiver (or its designee) all of the Credit Documents and Pool Records
relating to the Pool Assets; and
(ii) cooperate
with the Receiver to facilitate the orderly transition of managing the Pool
Assets to the Receiver (or its designee).
(f) At the
request of the Receiver, the Assuming Bank shall perform such transitional
services with regard to the Pool Assets as the Receiver may request.
Transitional services may include, without limitation, assisting in any due
diligence process deemed necessary by the Receiver and providing to the Receiver
or its designee(s) (x) information and data regarding the Pool Assets,
including, without limitation, system reports and data downloads sufficient to
transfer the Pool Assets to another system or systems, and (y) access to
employees of the Assuming Bank involved in the management of, or otherwise
familiar with, the Pool Assets.
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SCHEDULE
4.15A
LOANS
SUBJECT TO LOSS SHARING UNDER THE
SINGLE
FAMILY SHARED-LOSS AGREEMENT:
"All SFR
(or non-SFR) Loans and Commitments of the Failed Bank and SFR Loans and
Commitments (or non-SFR) of the acquired subsidiary"
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SCHEDULE
4.15B
LOANS
SUBJECT TO LOSS SHARING UNDER THE NON-SINGLE FAMILY SHARED-LOSS
AGREEMENT
"All SFR
(or non-SFR) Loans and Commitments of the Failed Bank and SFR Loans and
Commitments (or non-SFR) of the acquired subsidiary"
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EXHIBIT
4.15A
SINGLE
FAMILY SHARED-LOSS AGREEMENT
This
agreement for the reimbursement of loss sharing on certain single family
residential mortgage loans (the "Single Family Shared-Loss Agreement") shall
apply when the Assuming Bank purchases Single Family Shared-Loss Loans as that
term is defined herein. The terms hereof shall modify and supplement, as
necessary, the terms of the Purchase and Assumption Agreement to which this
Single Family Shared-Loss Agreement is attached as Exhibit 4.15A and
incorporated therein. To the extent any inconsistencies may arise between the
terms of the Purchase and Assumption Agreement and this Single Family
Shared-Loss Agreement with respect to the subject matter of this Single Family
Shared-Loss Agreement, the terms of this Single Family Shared-Loss Agreement
shall control. References in this Single Family Shared-Loss Agreement to a
particular Section shall be deemed to refer to a Section in this Single Family
Shared-Loss Agreement, unless the context indicates that it is intended to be a
reference to a Section of the Purchase and Assumption Agreement.
The
capitalized terms used in this Single Family Shared-Loss Agreement that are not
defined in this Single Family Shared-Loss Agreement are defined in the Purchase
and Assumption Agreement In addition to the terms defined above, defined below
are certain additional terms relating to loss-sharing, as used in this Single
Family Shared-Loss Agreement.
"Accounting
Records" means the subsidiary
system of record on which the loan history and balance of each Single Family
Shared-Loss Loan is maintained; individual loan files containing either an
original or copies of documents that are customary and reasonable with respect
to loan servicing, including management and disposition of Other Real Estate;
the records documenting alternatives considered with respect to loans in default
or for which a default is reasonably foreseeable; records of loss calculations
and supporting documentation with respect to line items on the loss
calculations; and, monthly delinquency reports and other performance reports
customarily utilized by the Assuming Bank in management of loan
portfolios.
"Accrued
Interest" means, with respect to
Single Family Shared-Loss Loans, ( the amount of earned and unpaid interest at
the note rate specified in the applicable loan documents, limited to 90
days.
"Commencement
Date " means the
first calendar day following the Bank Closing
Date.
"Cumulative
Loss Amount" means the sum of the
Monthly Loss Amounts less the sum of all Recovery Amounts.
"Cumulative
Shared-Loss Amount" means the excess, if
any, of the Cumulative Loss Amount over the First Loss Tranche.
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"Customary
Servicing Procedures "
means procedures (including collection procedures) that the Assuming Bank
customarily employs and exercises in servicing and administering mortgage loans
for its own accounts and the servicing procedures established by FNMA or FHLMC,
which are in accordance with accepted mortgage servicing practices of prudent
lending institutions.
"Final
Shared-Loss Month" means the calendar month
in which the tenth anniversary of the Commencement Date occurs.
"Final
Shared-Loss Recovery Month" means the calendar month
in which the tenth anniversary of the Commencement Date occurs.
"Foreclosure
Loss" means
the loss realized when the Assuming Bank has completed the foreclosure on a
Single Family Shared-Loss Loan and realized final recovery on the collateral
through liquidation and recovery of all insurance proceeds. Each Foreclosure
Loss shall be calculated in accordance with the form and methodology specified
in Exhibit 2a.
"Loss" means a Foreclosure
Loss, Restructuring Loss, Short Sale Loss, or Portfolio Loss.
"Loss
Amount" means the dollar amount
of loss incurred and reported on the Monthly Certificate for a Single Family
Shared-Loss Loan.
"Monthly
Certificate" has the meaning provided
in Section 2.1(b) of this Single Family Shared-Loss Agreement.
"Monthly
Loss Amount" means the sum of all
Foreclosure Losses, Restructuring Losses, Short Sale Losses and Portfolio Losses
realized by the Assuming Bank for any Shared Loss Month.
"Monthly
Shared-Loss Amount" means the change in the
Cumulative Shared-Loss Amount from the beginning of each month to the end of
each month.
"Portfolio
Loss" means
the loss realized on a portfolio sale of Single Family Shared-Loss Loans in
accordance with the terms of Article IV.
"Recovery
Amount" means, with respect to
any period prior to the Termination Date, the amount of collected funds received
by the Assuming Bank that (i) are applicable against a Foreclosure Loss which
has previously been paid to the Assuming Bank by the Receiver or (ii) gains
realized from a Section 4.1 sale of Single Family Shared-Loss Loans for which
the Assuming Bank has previously received a Restructuring Loss payment from the
Receiver.
"Restructuring
Loss" means
the loss on a modified or restructured loan measured by the difference between
(a) the principal, Accrued Interest, tax and insurance
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advances
and third parry fees due on a loan prior to the modification or restructuring,
and (b) the net present value of estimated cash flows on the modified or
restructured loan, discounted at the Then-Current Interest Rate. Each
Restructuring Loss shall be calculated in accordance with the form and
methodology attached as Exhibit 2b and Exhibit 5.
"Restructured
Loan" means a Single Family Shared-Loss Loan for which the Assuming Bank
has received a Restructuring Loss payment from the Receiver.
"Servicing
Officer" has
the meaning provided in Section 2.1(b) of this Single Family Shared-Loss
Agreement.
"Shared
Loss Payment Trigger" means when the sum of
the Cumulative Loss Amount under this Single Family Shared-Loss Agreement and
the cumulative Net Charge-Offs under the Non-SF Shared-Loss Agreement, exceeds
the First Loss Tranche.
"Single
Family Shared-Loss
Loans" means
the single family one-to-four residential mortgage loans identified on Schedule
4.15A of the Purchase and Assumption Agreement.
"Shared-Loss
Month" means
each calendar month between the Commencement Date and the last day of the month
in which the tenth anniversary of the Commencement Date occurs, provided that,
the first Shared-Loss Month shall begin on the Commencement Date and end on the
last day of that month.
"Short-Sale
Loss " means the
loss resulting from the Assuming Bank's agreement with the mortgagor to accept a
payoff in an amount less than the balance due on the loan, further provided,
that each Short-Sale Loss shall be calculated in accordance with the form and
methodology specified in Exhibit 2c.
"Stated
Threshold" means total losses under
the shared loss agreements in the amount of $115,000,000.
"Termination
Date" means
the last day of the Final Shared-Loss Recovery Month.
"Then-Current
Interest Rate" means the most recently
published Xxxxxxx Mac survey rate for 30-year fixed-rate loans.
(a) Loss
Mitigation and Consideration of Alternatives. For each Single Family
Shared-Loss Loan in default or for which a default is reasonably foreseeable,
the
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Assuming
Bank shall undertake reasonable and customary loss mitigation efforts, in
accordance with Exhibit 5, FDIC Mortgage Loan Modification Program. The Assuming
Bank shall document its consideration of foreclosure, loan restructuring, and
short-sale (if short-sale is a viable option) alternatives and shall select the
alternative resulting in the least Loss. Assuming Bank shall retain its
calculations of the estimated loss under each alternative, such calculations to
be provided to the Receiver upon request.
Not later
than fifteen (15) days after the end of each Shared-Loss Month, beginning with
the month in which the Commencement Date occurs and ending in the month in which
the tenth anniversary of the Commencement Date occurs, the Assuming Bank shall
deliver to the Receiver a certificate, signed by an officer of the Assuming Bank
involved in, or responsible for, the administration and servicing of the Single
Family Shared-Loss Loans whose name appears on a list of servicing officers
furnished by the Assuming Bank to the Receiver, (a "Servicing Officer") setting
forth in such form and detail as the Receiver may reasonably specify (a "Monthly
Certificate"):
(A) a
schedule substantially in the form of Exhibit 1 listing:
(i) each
Single Family Shared-Loss Loan for which a Loss Amount (calculated in accordance
with the applicable Exhibit) is being claimed, the related Loss Amount for each
Single Family Shared-Loss Loan, and the total Monthly Loss Amount for all Single
Family Shared-Loss Loans;
(ii) each
Single Family Shared-Loss Loan for which a Recovery Amount was received, the
Recovery Amount for each Single Family Shared-Loss Loan, and the total Recovery
Amount for all Single Family Shared-Loss Loans;
(iii) the total
Monthly Loss Amount for all Single Family Shared-Loss Loans minus the total
monthly Recovery Amount for all Single Family Shared-Loss Loans;
(iv) the
Cumulative Shared-Loss Amount as of the beginning and end of the
month;
(v) the
Monthly Shared Loss Amount;
(vi) the
result obtained in (v) times 80%, or times 95% if the Stated Threshold has been
reached, which in either case is the amount to be paid under Section 2.1(d) of
this Single Family Shared-Loss Agreement by the Receiver to the Assuming Bank if
the amount is a positive number, or by the Assuming Bank to the Receiver if the
amount is a negative number;
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(B)
|
for
each of the Single Family Shared-Loss Loans for which a Loss is claimed
for that Shared-Loss Month, a schedule showing the calculation of the Loss
Amount using the form and methodology shown in Exhibit 2a, Exhibit 2b, or
Exhibit 2c, as applicable.
|
(C)
|
For
each of the Restructured Loans where a gain or loss is realized in a sale
under Section 4.1 or 4.2, a schedule showing the calculation using the
form and methodology shown in Exhibit
2d.
|
(D)
|
a
portfolio performance and summary schedule substantially in the form shown
in Exhibit 3.
|
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(c) Monthly
Data Download. Not later than fifteen
(15) days after the end of each month, beginning with the month in which the
Commencement Date occurs and ending with the Final Shared-Loss Recovery Month,
Assuming Bank shall provide Receiver:
(i)
|
the
servicing file in machine-readable format including but not limited to the
following fields for each outstanding Single Family Shared-Loss Loan, as
applicable:
|
(A) Loan
number
(B) FICO
score
(C) Origination
date
(D) Original
principal amount
(E) Maturity
date
(F) Paid-to
date
(G) Last
payment date
(H) Loan
status (bankruptcy, in foreclosure, etc.)
(I)
Delinquency counters
(J) Current
principal balance
(K) Current
escrow account balance
(L) Current
Appraisal/BPO value
(M) Current
Appraisal/BPO date
(N) Interest
rate
(0)
Monthly principal and interest payment amount
(P) Monthly
escrow payment for taxes and insurance
(Q) Interest
rate type (fixed or adjustable)
(R) If
adjustable: index, margin, next interest rate reset date
(S) Payment/Interest
rate cap and/or floor
(T) Underwriting
type (Full doc, Alt Doc, No Doc)
(U) Lien type (1st,
2nd)
(V) Amortization
type (amortizing or I/O)
(W) Property
address, including city, state, zip code
(X) A code
indicating whether the Mortgaged Property is owner-occupied
(Y) Property
type (single-family detached, condominium, duplex, etc.)
(ii)
|
An
Excel file for ORE held as a result of foreclosure on a Single Family
Shared-Loss Loan listing:
|
(A) Foreclosure
date
(B) Unpaid
loan principal balance
(C) Appraised
value or BPO value, as applicable
(D) Projected
liquidation date
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(i) Losses
Under the Stated Threshold. After the Shared Loss
Payment Trigger is reached, not later than fifteen (15) days after the date on
which the Receiver receives the Monthly Certificate, the Receiver shall pay to
the Assuming Bank, in immediately available funds, an amount equal to eighty
percent (80%) of the Monthly Shared-Loss Amount reported on the Monthly
Certificate. If the total Monthly Shared-Loss Amount reported on the Monthly
Certificate is a negative number, the Assuming Bank shall pay to the Receiver in
immediately available funds eighty percent (80%) of that amount.
(ii) Losses in
Excess of the Stated Threshold. In the event that the
Stated Threshold has been met the loss/recovery sharing percentages shall change
from 80/20 to 95/5 and thereafter the Receiver shall pay to the Assuming Bank,
in immediately available funds, an amount equal to ninety-five percent (95%) of
the Monthly Shared-Loss Amount reported on the Monthly Certificate. If the
Monthly Shared-Loss Amount reported on the Monthly Certificate is a negative
number, the Assuming Bank shall pay to the Receiver in immediately available
funds ninety-five percent (95%) of that amount.
(e) Limitations
on
Shared-Loss Payment. The Receiver shall not
be required to make any payments pursuant to Section 2.1 (d) with respect to any
Foreclosure Loss, Restructuring Loss, Short Sale Loss or Portfolio Loss that the
Receiver determines, based upon the criteria set forth in this Single Family
Shared-Loss Agreement (including the analysis and documentation requirements of
Section 2.1(a)) or Customary Servicing Procedures, should not have been effected
by the Assuming Bank. In the event that the Receiver does not make any payment
with respect to Losses claimed pursuant to Section 2.1(d), the Receiver and
Assuming Bank shall make the necessary adjustments to the Monthly Shared-Loss
Amount for that Monthly Certificate and the payment pursuant to Section 2.1(d)
above shall be adjusted accordingly.
(f) Payments
by Wire-Transfer. All payments under this
Single Family Shared-Loss Agreement shall be made by wire-transfer in accordance
with the wire-transfer instructions on Exhibit 4.
(a) Within
ninety (90) days after the end of each calendar year during which the Receiver
makes any payment to the Assuming Bank under this Single Family Shared-Loss
Agreement, the Assuming Bank shall deliver to the Receiver a report signed by
its independent public accountants stating that they have reviewed the terms of
this Single Family Shared-Loss Agreement and that, in the course of their annual
audit of the Assuming Bank's books and records,
nothing has come to their attention suggesting that any computations required to
be made by the Assuming Bank during such calendar year pursuant to this Article
II were not made by the Assuming Bank in accordance herewith. In the event that
the Assuming Bank cannot comply with the preceding sentence, it shall promptly
submit to the Receiver corrected computations together with a report signed by
its independent public accountants stating that,
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after
giving effect to such corrected computations, nothing has come to their
attention suggesting that any computations required to be made by the Assuming
Bank during such year pursuant to this Article II were not made by the
Assuming Bank in accordance herewith. In such event, the Assuming Bank and the
Receiver shall make all such accounting adjustments and payments as may be
necessary to give effect to each correction reflected in such corrected
computations, retroactive to the date on which the corresponding incorrect
computation was made.
(b) The
Receiver or the FDIC in its corporate capacity ("Corporation") may perform an
audit or audits to determine the Assuming Bank's compliance with the provisions
of this Single Family Shared-Loss Agreement, including this Article II, by
providing not less than ten (10) Business Days' prior written notice. Assuming
Bank shall provide access to pertinent records and proximate working space in
Assuming Bank's facilities. The scope and duration of any such audit shall be
within the sole discretion of the Receiver or the Corporation. The Receiver or
the Corporation, as the case may be, shall bear the expense of any such audit.
In the event that any corrections are necessary as a result of such an audit or
audits, the Assuming Bank and the Receiver shall make such accounting
adjustments and payments as may be necessary to give retroactive effect to such
corrections.
2.3 Withholdings. Notwithstanding any
other provision in this Article II, the Receiver, upon the direction of the
Director (or designee) of the Federal Deposit Insurance Corporation's Division
of Resolutions and Receiverships, may withhold payment for any amounts included
in a Monthly Certificate delivered pursuant to Section 2.1, if there is a
reasonable basis for denying the eligibility of an item for which reimbursement
or payment is sought under such Section. In such event, the Receiver shall
provide a written notice to the Assuming Bank detailing the grounds for
withholding such payment. At such time as the Assuming Bank demonstrates to the
satisfaction of the Receiver, in its reasonable judgment, that the grounds for
such withholding of payment, or portion of payment, no longer exist or have been
cured, then the Receiver shall pay the Assuming Bank the amount withheld which
the Receiver determines is eligible for payment, within fifteen (15) Business
Days.
2.4 Books and
Records. The
Assuming Bank shall at all times keep books and records sufficient to ensure and
document compliance with the terms of this Single Family Shared-Loss Agreement,
including but not limited to (a) documentation of alternatives considered with
respect to defaulted loans or loans for which default is reasonably foreseeable,
(b) documentation showing the calculation of loss for claims submitted to the
Receiver, (c) retention of documents that support each line item on the loss
claim forms, and (d) documentation with respect to the Recovery Amount on loans
for which the Receiver has made a loss-share payment
2.5 Information. The Assuming Bank shall
promptly provide to the Receiver such other information, including but not
limited to, financial statements, computations, and bank policies and
procedures, relating to the performance of the provisions of this Single Family
Shared-Loss Agreement, as the Receiver may reasonably request from time to
time.
2.6 Tax Ruling. The Assuming Bank shall
not at any time, without the Receiver's prior written consent, seek a private
letter ruling or other determination from the Internal
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Revenue Service or otherwise seek to qualify for any special tax treatment or benefits associated with any payments made by the Receiver pursuant to this Single Family Shared-Loss Agreement.
2.7 Sale of
Single Family Shared-Loss Loans. The Receiver shall be
relieved of its obligations with respect to a Single Family Shared-Loss Loan
upon payment of a Foreclosure Loss amount or a Short Sale Loss amount with
respect to such Single Family Shared-Loss Loan or upon the sale of a Single
Family Shared-Loss Loan by Assuming Bank to an unaffiliated person or entity.
The Assuming Bank shall provide the Receiver with timely notice of any such
sale. Notwithstanding the foregoing, a sale of the Single Family Shared-Loss
Loan, for purposes of this Section 2.7, shall not be deemed to have occurred as
the result of (i) any change in the ownership or control of Assuming Bank, (ii)
a merger by Assuming Bank with or into any other entity, or (iii) a sale by
Assuming Bank of all or substantially all of its assets.
ARTICLE
III - RULES REGARDING THE ADMINISTRATION OF SINGLE FAMILY
SHARED-LOSS
LOANS
3.1 Agreement
with Respect to Administration. The Assuming Bank shall
(and shall cause any of its Affiliates to which the Assuming Bank transfers any
Single Family Shared-Loss Loans to) manage, administer, and collect the Single
Family Shared-Loss Loans while owned by the Assuming Bank or any Affiliate
thereof during the term of this Single Family Shared-Loss Agreement in
accordance with the rules set forth in this Article III. The Assuming Bank shall
be responsible to the Receiver in the performance of its duties hereunder and
shall provide to the Receiver such reports as the Receiver reasonably deems
advisable, including but not limited to the reports required by Sections 2.1,
2.2 and 3.3 hereof, and shall permit the Receiver to monitor the Assuming Bank's
performance of its duties hereunder.
3.2 Duties of
the Assuming Bank. (a) In performance of
its duties under this Article III , the Assuming Bank shall:
(i) manage
and administer each Single Family Shared-Loss Loan in accordance with Assuming
Bank's usual and prudent business and banking practices and Customary Servicing
Procedures;
(ii) exercise
its best business judgment in managing, administering and collecting amounts
owed on the Single Family Shared-Loss Loans;
(iii) use
commercially reasonable efforts to maximize Recoveries with respect to Losses on
Single Family Shared-Loss Loans without regard to the effect of maximizing
collections on assets held by the Assuming Bank or any of its Affiliates that
are not Single Family Shared-Loss Loans;
(iv) retain
sufficient staff to perform its duties hereunder; and
(v) comply
with the terms of Exhibit 5 attached hereto, the FDIC Loan Modification Program,
for any Single Family Shared-Loss Loans meeting the requirements set
forth
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therein.
The Assuming Bank may propose exceptions to Exhibit 5 for a group of Loans with
similar characteristics, with the objectives of (1) minimizing the loss to the
Assuming Bank and the FDIC and (2) maximizing the opportunity for qualified
homeowners to remain in their homes with affordable mortgage
payments.
(b) Any
transaction with or between any Affiliate of the Assuming Bank with respect to
any Single Family Shared-Loss Loan including, without limitation, the execution
of any contract pursuant to which any Affiliate of the Assuming Bank will
manage, administer or collect any of the Single Family Shared-Loss Loans shall
be subject to the prior written approval of the Receiver.
3.3 Shared-Loss
Asset Records and Reports. The Assuming Bank shall
establish and maintain such records as may be appropriate to account for the
Single Family Shared-Loss Loans in such form and detail as the Receiver may
reasonably require, and to enable the Assuming Bank to prepare and deliver to
the Receiver such reports as the Receiver may from time to time request
regarding the Single Family Shared-Loss Loans and the Monthly Certificates
required by Section 2.1 of this Single Family Shared-Loss
Agreement.
3.4 Related
Loans.
(a) Assuming
Bank shall use its best efforts to determine which loans are "Related Loans", as
hereinafter defined. The Assuming Bank shall not manage, administer.or collect
any "Related Loan" in any manner that would have the effect of increasing the
amount of any collections with respect to the Related Loan to the detriment of
the Single Family Shared-Loss Loan to which such loan is related. A "Related
Loan" means any loan or extension of credit held by the Assuming Bank at any
time on or prior to the end of the Final Shared-Loss Month that is made to an
Obligor of a Single Family Shared-Loss Loan.
(b) The
Assuming Bank shall prepare and deliver to the Receiver with the Monthly
Certificates for the calendar months ending June 30 and December 31, a schedule
of all Related Loans on the Accounting Records of the Assuming Bank as of the
end of each such semi-annual period.
3.5 Legal
Action; Utilization of Special Receivership Powers. The Assuming Bank shall
notify the Receiver in writing (such notice to be given in accordance with
Article V below and to include all relevant details) prior to utilizing in any
legal action any special legal power or right which the Assuming Bank derives as
a result of having acquired an asset from the Receiver, and the Assuming Bank
shall not utilize any such power unless the Receiver shall have consented in
writing to the proposed usage. The Receiver shall have the right to direct such
proposed usage by the Assuming Bank and the Assuming Bank shall comply in all
respects with such direction. Upon request of the Receiver, the Assuming Bank
will advise the Receiver as to the status of any such legal action. The Assuming
Bank shall immediately notify the Receiver of any judgment in litigation
involving any of the aforesaid special powers or rights.
ARTICLE
IV - PORTFOLIO SALE
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4.1 Assuming
Bank Portfolio Sale of Remaining Single Family Shared-Loss Loans. The Assuming Bank shall
have the right with the concurrence of the Receiver to liquidate for cash
consideration, all or a portion of Single Family Shared-Loss Loans held by the
Assuming Bank at any time prior to the Termination Date ("Portfolio Sale"). If
the Assuming Bank exercises its option under this Section 4.1, it must give
thirty (30) days notice in writing to the Receiver setting forth the details and
schedule for the Portfolio Sale which shall be conducted by means of sealed bid
sales to third parties, not including any of the Assuming Bank's affiliates,
contractors, or any affiliates of the Assuming Bank's contractors. Sales of
Restructured Loans shall be sold in a separate pool from Single Family
Shared-Loss Loans not restructured. The Receiver's review of the Assuming Bank's
proposed Portfolio Sale will be considered in a timely fashion and approval will
not be unreasonably withheld, delayed or conditioned.
4.2 Assuming
Bank's Liquidation of Remaining Single Family Shared-Loss Loans. In the event that the
Assuming Bank does not conduct a Portfolio Sale pursuant to Section 4.1 the
Receiver shall have the right, exercisable in its sole and absolute discretion,
to require the Assuming Bank to liquidate for cash consideration, any Single
Family Shared-Loss Loans held by the Assuming Bank at any time after the date
that is six months prior to the Termination Date. If the Receiver exercises its
option under this Section 4.2, it must give notice in writing to the Assuming
Bank, setting forth the time period within which the Assuming Bank shall be
required to liquidate the Single Family Shared-Loss Loans. The Assuming Bank
will comply with the Receiver's notice and must liquidate the Single Family
Shared-Loss Loans as soon as reasonably practicable by means of sealed bid sales
to third parties, not including any of the Assuming Bank's affiliates,
contractors, or any affiliates of the Assuming Bank's contractors. The selection
of any financial advisor or other third party broker or sales agent retained for
the liquidation of the remaining Single Family Shared-Loss Loans pursuant to
this Section shall be subject to the prior approval of the Receiver, such
approval not to be unreasonably withheld, delayed or conditioned.
4.3 Calculation
of Sale Gain or Loss. For Single Family
Shared-Loss Loans that are not Restructured Loans gain or loss on the sales
under Section 4.1 or Section 4.2 will be calculated as the sale price received
by the Assuming Bank less the unpaid principal balance of the remaining Single
Family Shared-Loss Loans. For any Restructured Loan included in the sale gain or
loss on sale will be calculated as (a) the sale price received by the Assuming
Bank less (b) the net present value of estimated cash flows on the Restructured
Loan that was used in the calculation of the related Restructuring Loss plus (c)
Loan principal payments collected by the Assuming Bank from the date the Loan
was restructured to the date of sale. (See Exhibit 2d for example
calculation).
All
notices, demands and other communications hereunder shall be in writing and
shall be delivered by hand, or overnight courier, receipt requested, addressed
to the parties as follows:
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|
If
to Receiver, to:
|
Federal
Deposit Insurance Corporation
as
Receiver for TeamBank, N.A.
Division of Resolutions and Receiverships
000 00xx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Attention: Xxxxx Malami, Manager, Capital
Markets
|
with
a copy to: |
Federal
Deposit Insurance Corporation
as
Receiver for TeamBank, N.A.
Room E7056
0000 Xxxxxxx Xxxxx, Xxxxxxxxx, XX 2226
Attn: Special Issues
Unit |
With
respect to a notice under Section 3.5 of this Single Family Shared-Loss
Agreement, copies of such notice shall be sent to:
Federal
Deposit Insurance Corporation
Legal
Division
0000
Xxxxx Xx.
Xxxxxx,
Xxxxx 00000
Attention:
Regional Counsel
If to
Assuming Bank, to:
Great
Southern Bank
0000 X.
Xxxxxxxxxxx
Xxxxxxxxxxx,
XX 00000
Attention:
Xxxxxx Xxxxxx
with a
copy to:
Silver,
Xxxxxxxx & Taff, L.L.P.
0000 X
Xxxxxx, X.X., Xxxxx 000
Xxxxxxxxxx,
X.X. 00000
Such
Persons and addresses may be changed from time to time by notice given pursuant
to the provisions of this Article V. Any notice, demand or other communication
delivered pursuant to the provisions of this Article IV shall be deemed to have
been given on the date actually received.
ARTICLE VI -- MISCELLANEOUS
6.1 Expenses. Except as otherwise
expressly provided herein, all costs and expenses incurred by a party hereto in
connection with this Single Family Shared-Loss Agreement shall be borne by such
party whether or not the transactions contemplated herein shall be
consummated.
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6.2 Successors and
Assigns; Specific Performance. All terms and provisions of this Single
Family Shared-Loss Agreement shall be binding
upon and shall inure to the benefit of the parties hereto only; provided, however, that, Receiver may assign or otherwise
transfer this Single Family Shared-Loss Agreement (in whole or in part) to the
Federal Deposit Insurance Corporation in its corporate capacity without the
consent of Assuming Bank. Notwithstanding anything to the contrary contained in
this Single Family Shared-Loss Agreement, except as is expressly permitted in
this Section 6.2, Assuming Bank may not assign or otherwise transfer this Single
Family Shared-Loss Agreement (in whole or in part) without the prior written
consent of the Receiver, which consent may be granted or withheld by the
Receiver in its sole discretion, and any attempted assignment or transfer in
violation of this provision shall be void ab
initio.
6.3 Governing
Law.
This Single Family Shared-Loss Agreement shall be construed in accordance with
federal law, or, if there is no applicable federal law, the laws of the State of
New York, without regard to any rule of conflict of law that would result in the
application of the substantive law of any jurisdiction other than the State of
New York.
6.4 WAIVER OF
JURY TRIAL. EACH PARTY HERETO HEREBY
IRREVOCABLY AND UNCONDITIONALLY WAIVES ALL RIGHT TO TRIAL BY JURY IN OR TO HAVE
A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, ACTION, PROCEEDING OR COUNTERCLAIM,
WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE, ARISING OUT OF OR RELATING TO
OR IN CONNECTION WITH THIS SINGLE FAMILY SHARED-LOSS AGREEMENT OR ANY OF THE
TRANSACTIONS CONTEMPLATED HEREBY.
6.5 Captions. All captions and
headings contained in this Single Family Shared-Loss Agreement are for
convenience of reference only and do not form a part of, and shall not affect
the meaning or interpretation of, this Single Family Shared-Loss
Agreement.
6.6 Entire
Agreement; Amendments. This Single Family
Shared-Loss Agreement, including the Exhibits and any other documents delivered
pursuant hereto, embody the entire agreement of the parties with respect to the
subject matter hereof, and supersede all prior representations, warranties,
offers, acceptances, agreements and understandings, written or oral, relating to
the subject matter herein. This Single Family Shared-Loss Agreement may be.
amended or modified or any provision thereof waived only by a written instrument
signed by both parties or their respective duly authorized agents.
6.7 Severability. Whenever possible, each
provision of this Single Family Shared-Loss Agreement shall be interpreted in
such manner as to be effective and valid under applicable law, but if any
provision of this Single Family Shared-Loss Agreement is held to be prohibited
by or invalid, illegal or unenforceable under applicable law, such provision
shall be construed and enforced as if it had been more narrowly drawn so as not
to be prohibited, invalid, illegal or unenforceable, and the validity, legality
and enforceability of the remainder of such provision and the remaining
provisions of this Single Family Shared-Loss Agreement shall not in any way be
affected or impaired thereby.
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6.8 No Third
Party Beneficiary. This Single Family
Shared-Loss Agreement and the Exhibits hereto are for the sole and exclusive
benefit of the parties hereto and their respective permitted successors and
permitted assigns and there shall be no other third party beneficiaries, and
nothing in this Single Family Shared-Loss Agreement or the Exhibits shall be
construed to grant to any other Person any right, remedy or Claim under or in
respect of this Single Family Shared-Loss Agreement or any provision
hereof.
6.9 Counterparts. This Single Family
Shared-Loss Agreement may be executed separately by Receiver and Assuming Bank
in any number of counterparts, each of which when executed and delivered shall
be an original, but such counterparts shall together constitute one and the same
instrument.
6.10 Consent. Except as otherwise
provided herein, when the consent of a party is required herein, such consent
shall not be unreasonably withheld or delayed.
6.11 Rights
Cumulative. Except as otherwise
expressly provided herein, the rights of each of the parties under this Single
Family Shared-Loss Agreement are cumulative, may be exercised as often as any
party considers appropriate and are in addition to each such party's rights
under the Purchase and Sale Agreement and any of the related agreements or under
law. Except as otherwise expressly provided herein, any failure to exercise or
any delay in exercising any of such rights, or any partial or defective exercise
of such rights, shall not operate as a waiver or variation of that or any other
such right.
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Exhibit
1
Monthly
Certificate
SEE
FOLLOWING PAGE
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
Balance,
end of month
|
XX
|
XX
|
XX
|
G
|
|
Shared
Loss Amount
|
XX
|
G -
F
|
|||
Times
Loss Share percentage
|
80%
|
||||
Amount
due from (to) FDIC as Receiver
|
XX
|
||||
Pursuant
to Section 2.1 of the Single Family Shared-Loss Agreement, the undersigned
hereby certifies
the
information on this Certificate is true, complete and
correct.
|
|||||
OFFICER
SIGNATURE
|
|||||
OFFICER
NAME: TITLE
|
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Exhibit
2a
Calculation
of Foreclosure Loss
Shared-Loss
Month:
|
[input
month]
|
|
||
Loan
no.:
|
[input
loan no.]
|
|||
Interest
paid-to date
|
||||
Foreclosure
date
|
||||
Liquidation
date
|
||||
Note
Interest rate
|
||||
Foreclosure
Loss calculation
|
||||
Loan
Principal balance after last paid installment
|
xx
|
|||
Accrued
interest, limited to 90 days
|
xx
|
(1)
|
||
Attorney's
fees
|
xx
|
(2)
|
||
Foreclosure
costs, including title search, filing fees,
advertising,
etc.
|
xx
|
(3)
|
||
Property
protection costs, maint. and repairs
|
xx
|
(3)
|
||
Tax
and insurance advances
|
xx
|
(3)
|
|
|
Other
Advances
|
|
|||
Appraisal/Broker's
Price Opinion fees
|
xx
|
(3)
|
||
Inspections
|
xx
|
(3)
|
||
Other
|
xx
|
|||
Gross
balance recoverable by Assuming Bank
|
xx
|
xx
|
(A)
|
|
Cash
Recoveries:
|
||||
Net
liquidation proceeds (from HUD-1 settl stmt)
|
xx
|
|||
Insurance
proceeds
|
xx
|
_
|
||
T
& I escrow account balance, if positive
|
xx
|
|||
Other
credits, if any (itemize)
|
xx
|
|||
Total
Cash Recovery
|
xx
|
xx
|
(B)
|
|
Loss
Amount
|
xx
|
(A)
-
(B)
|
||
Times
80% (Receiver Loss Share percentage)
|
x
|
80%
|
||
Amount
due Assuming Bank for Receiver Loss Share
Amount
|
xx
|
|||
(1)
Accrued interest is limited to 90 days and is calculated (a) at the note
interest rate that would have
|
||||
been
in effect if the loan was performing, (b) on the principal balance after
application of the last
|
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payment
made by the borrower.
|
||||
(2) Reasonable
and customary third-party attorney's fees and expenses incurred by
Assuming Bank in
|
||||
connection
with any enforcement procedures or otherwise with respect to such Mortgage
Loan.
|
||||
(3) Assuming
Bank's reasonable and customary out-of-pocket costs paid to either a
third-party or an
|
||||
affiliate
(if affiliate is pre-approved by the FDIC) for foreclosure, property
protection and maintenance
|
||||
costs,
repairs, assessments, taxes, insurance and similar items, to the extent
not paid from
|
||||
funds
in borrower escrow account. Allowable costs are limited to
amounts per Xxxxxxx Mac or
|
||||
Xxxxxx
Mae guidelines, where applicable.
|
||||
DO
NOT INCLUDE late fees, prepayment penalties, or any similar lender fees or
charges by the
|
||||
Assuming
Bank to the loan account, any allocation of Assuming Bank's servicing
costs, or any allocations of
|
||||
Assuming
Bank's G&A or other operating costs.
|
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2b
Calculation
of Loss For Restructured Loans
Concept
and Definition - Restructured Loss
|
||||
For
purposes of loss sharing, losses on restructured loans are calculated as
the difference between
|
||||
(a)
the principal, accrued interest and advances due on the loan prior to
restructuring, and
|
||||
(b)
the Net Present Value (NPV) of estimated cash flows on the restructured
loan, discounted at
|
||||
the
most recently published Xxxxxxx Mac survey rate on 30-year fixed-rate
loans at the restructure date.
|
||||
|
||||
The
NPV calculations must assume loan prepayment in full at the end of ten
years (120 months).
|
||||
Form for Calculation -
Restructuring Loss
|
||||
Shared-Loss
Month:
|
[input
month]
|
|||
Loan
no.:
|
[input
loan no.]
|
|||
Loan
before Restructuring
|
||||
Original
loan amount
|
||||
Current
unpaid principal balance
|
||||
Remaining
term
|
||||
Interest
rate
|
_
|
|||
Interest
Paid-To Date
|
||||
Monthly
payment - P&I
|
||||
Monthly
payment - T&I
|
||||
Total
monthly payment
|
||||
Loan
type (fixed-rate, ARM, I/O, Option ARM, etc.)
|
||||
Terms of
Modified/Restructured
Loan
|
||||
Closing
date on modified/restructured loan
|
||||
New
Principal balance
|
||||
Remaining
term
|
||||
Interest
rate
|
||||
Monthly
payment - P&I
|
||||
Monthly
payment - T&I
|
||||
Total
monthly payment
|
||||
Loan
type (Fixed-rate, ARM, I/O, Option ARM, negative
|
||||
amortization
features, etc.)
|
||||
Lien
type (1st, 2nd)
|
||||
if
adjustable:
|
||||
Initial
interest rate
|
||||
Term
- initial interest rate
|
||||
Initial
payment amount
|
Module 1 –
Whole Bank w/ Loss Share – P&A
Version 1.02
March
16, 2009
|
71
|
TeamBank,
N.A.
Paola,
Kansas
|
Term
- initial payment amount
|
||||
Negative
amortization?
|
[Yes/No]
|
|||
_ Rate
reset frequency after first adjustment
|
||||
Next
reset date
|
||||
Index
|
||||
Margin
|
||||
Cap
per adjustment
|
||||
Lifetime
Cap
|
||||
Floor
|
||||
Restructuring
Loss Calculation
|
||||
Loan
Principal balance before restructuring
|
xx
|
|||
Accrued
interest, limited to 90 days
|
xx
|
(1)
|
||
Tax
and insurance advances
|
xx
|
|||
3rd
party fees due
|
xx
|
|||
Total
loan balance due before restructuring
|
XX
|
XX
|
(A)
|
|
Assumptions
for NPV Calculation, Restructured Loan:
|
||||
Discount
rate for projected cash flows
|
xx%
|
(2)
|
||
Loan
prepayment in full
|
120
months
|
|||
NPV
of projected cash
flows (3)
|
XX
|
XX
|
(B)
|
|
Loss
Amount
|
XX
|
(A)
- (B)
|
||
Times
80% (Receiver Loss Share percentage)
|
80%
|
|||
Amount
due Assuming Bank for Receiver Loss Share
Amount
|
XX
|
|||
(1)
Accrued interest is limited to 90 days and is calculated (a) at the note
interest rate that would have
|
||||
been
in effect if the loan was performing, (b) on the principal balance after
application of
the last payment
made by the borrower.
|
|
|||
|
||||
(2)
The discount rate to be used is the most recently published Xxxxxxx Mac
Survey Rate on 30-year fixed-rate
loans
at the loan restructuring date.
|
||||
|
||||
(3)
If the new loan is an adjustable-rate loan, interest rate resets and
related cash flows should be projected
|
||||
based
on the index rate in effect at the date of the loan restructuring. If the
restructured loan otherwise
|
||||
provides
for specified changes in monthly P&I payments over the term of the
loan, those changes should
|
||||
be
reflected in projected cash flows. Assuming Bank must retain supporting
schedule of projected cash flows
|
||||
by
month as required by Section 2.1 of the Single Family Shared-Loss
Agreement and provide to the FDIC if
requested
for
sample audit.
|
||||
|
Module 1 –
Whole Bank w/ Loss Share – P&A
Version 1.02
March
16, 2009
|
72
|
TeamBank,
N.A.
Paola,
Kansas
|
Exhibit
2c
Calculation
of Loss For Short Sale Loans
Shared-Loss
Month:
|
[input
month]
|
|||
Loan
no.:
|
[input
loan no.]
|
|||
Interest
paid-to date
|
||||
Short
Payoff Date
|
||||
Note
Interest rate
|
||||
Short-Sale Loss calculation
|
||||
Loan
Principal balance
|
xx
|
|||
Accrued
interest, limited to 90 days
|
xx
|
(1)
|
||
Attorney's
fees
|
xx
|
(2)
|
||
Tax
and insurance advances
|
xx
|
|||
3rd
party fees due
|
xx
|
|||
Gross
balance recoverable by Assuming Bank
|
xx
|
XX
|
(A)
|
|
Amount
accepted in Short-Sale
|
XX
|
XX
|
(B)
|
|
Loss
Amount
|
XX
|
(A)
- (B)
|
||
Times
80% (Receiver Loss Share percentage)
|
x
|
80%
|
||
Amount
due Assuming Bank for Receiver Loss Share
Amount
|
XX
|
|||
(1) Accrued interest is limited
to 90 days and is calculated (a) at the note interest rate that would
have
|
||||
been
in effect if the loan was performing, (b) on the principal balance after
application of the last
|
||||
payment made by the
borrower.
|
||||
(2)
Reasonable and customary third-party attorney's fees and expenses incurred
by Assuming Bank in
connection
with
any enforcement procedures or otherwise with respect to negotiation and
acceptance
of Short-Sale payoff.
|
||||
|
||||
DO
NOT INCLUDE late fees, prepayment penalties, or any similar lender fees or
charges by the
|
||||
Assuming
Bank to the loan account, any allocation of Assuming Bank's servicing
costs, or any allocations of
|
||||
Assuming
Bank's G&A or other operating
costs.
|
Module 1 –
Whole Bank w/ Loss Share – P&A
Version 1.02
March
16, 2009
|
73
|
TeamBank,
N.A.
Paola,
Kansas
|
Exhibit
2d
Shared-Loss
Month:
|
[input
month]
|
||
Loan
no.:
|
[input
loan no.]
|
||
The
calculation of recovery on a loan for which a Restructuring Loss has been
paid will only
|
|||
apply
if the loan is sold.
|
|||
EXAMPLE CALCULATION
|
|||
Restructuring Loss
Information
|
|||
Loan
principal balance before restructuring
|
$ 200,000
|
A
|
|
NPV,
restructured loan
|
165,000
|
B
|
|
Loss
on restructured loan
|
$ 35,000
|
A
- B
|
|
Times
FDIC loss share %
|
80%
|
||
Loss
share payment to purchaser
|
$ 28,000
|
C
|
|
Calculation - Recovery amount due to
Receiver
|
|||
Loan
sales price
|
$ 190,000
|
||
NPV
of restructured loan at mod date
|
165,000
|
||
Gain
- step 1
|
25,000
|
D
|
|
PLUS
|
|||
Loan
UPB after restructuring
|
(1)
|
200,000
|
|
Loan
UPB at liquidation date
|
192,000
|
||
Gain
- step 2 (principal collections after restructuring)
|
8,000
|
E
|
|
Recovery
amount
|
33,000
|
D
+ E
|
|
Times
FDIC loss share %
|
80%
|
||
Recovery
due to FDIC
|
$ 26,400
|
F
|
|
Net
loss share paid to purchaser (C - F)
|
$ 1,600
|
||
Proof Calculation
|
(2)
|
||
Loan
principal balance
|
$ 200,000
|
G
|
|
Principal
collections on loan
|
8,000
|
||
Sales
price for loan
|
190,000
|
||
Total
collections on loan
|
198,000
|
H
|
|
Net
loss on loan
|
$ 2,000
|
G
- H
|
|
Times
FDIC loss share %
|
80%
|
||
Loss
share payment to purchaser
|
$ 1,600
|
||
Module 1 –
Whole Bank w/ Loss Share – P&A
Version 1.02
March
16, 2009
|
74
|
TeamBank,
N.A.
Paola,
Kansas
|
|
|
(1)
This example assumes that the FDIC loan modification program as shown in
Exhibit 5 is applied
|
|||
and
the loan restructuring does not result in a reduction in the loan
principal balance due from
the
|
|||
borrower.
|
|||
(2) This proof calculation is provided to illustrate the concept and the
Assuming Bank is not required
to
|
|||
provide this with its Recovery
calculations.
|
Module 1 –
Whole Bank w/ Loss Share – P&A
Version 1.02
March
16, 2009
|
75
|
TeamBank,
N.A.
Paola,
Kansas
|
Exhibit
3
Portfolio
Performance and Summary Schedule
.SHARED-LOSS
LOANS
|
|
|||
PORTFOLIO
PERFORMANCE AND SUMMARY SCHEDULE
|
||||
MONTH
ENDED:
|
[input
report month]
|
|||
POOL
SUMMARY
|
||||
#
|
$
|
|||
Loans
at Sale Date
|
xx
|
xx
|
||
Loans
as of this month-end
|
xx
|
xx
|
||
STATED
THRESHOLD TRACKING
|
#
|
$
|
||
Stated
Threshold amount
|
A
|
|||
Cumulative
loss payments, prior month
|
||||
Loss
payment for current month
|
||||
Cumulative
loss payment, this month
|
||||
Cumulative
Non-SF Net Charge-Offs
|
||||
B
|
||||
Remaining
to Stated Threshold
|
A -
B
|
|||
Percent
of Total
|
||||
PORTFOLIO
PERFORMANCE
|
||||
STATUS
|
#
|
$
|
#
|
|
Current
|
||||
30
- 59 days past due
|
||||
60
- 89 days past due
|
_
|
|||
90
- 119 days past due
|
||||
120
and over days past due
|
||||
In
foreclosure
|
||||
ORE
|
||||
Total
|
||||
Memo
Item:
|
||||
Loans
in process of restructuring - total
|
||||
Loans
in bankruptcy
|
||||
Loans
in process of restructuring bv
|
||||
delinquency
status
|
||||
Current
|
||||
30
- 59 days past due
|
Module 1 –
Whole Bank w/ Loss Share – P&A
Version 1.02
March
16, 2009
|
76
|
TeamBank,
N.A.
Paola,
Kansas
|
60
- 89 days past due
|
||||
90
- 119 days past due
|
||||
120
and over days past due
|
||||
In
foreclosure
|
||||
Total
|
||||
List
of Loans Paid Off During Month
|
||||
Principal
|
||||
Loan #
|
Balance
|
|||
List
of Loans Sold During Month
|
||||
Principal
|
Sales
|
|||
Loan
#
|
Balance
|
Price
|
||
Module 1 –
Whole Bank w/ Loss Share – P&A
Version 1.02
March
16, 2009
|
77
|
TeamBank,
N.A.
Paola,
Kansas
|
Exhibit
4
Wire
Transfer Instructions
PURCHASER WIRING
INSTRUCTIONS
BANK
RECEIVING WIRE
|
||||||||||
9
DIGIT ABA ROUTING NUMBER
|
||||||||||
ACCOUNT
NUMBER
|
||||||||||
NAME
OF ACCOUNT
|
||||||||||
ATTENTION
TO WHOM
|
||||||||||
PURPOSE
OF WIRE
|
||||||||||
FDIC
RECEIVER WIRING INSTRUCTIONS
|
|||||||||||
BANK
RECEIVING WIRE
|
|||||||||||
SHORT
NAME
|
|||||||||||
ADDRESS
OF BANK RECEIVING WIRE
|
|||||||||||
9
DIGIT ABA ROUTING NUMBER
|
|||||||||||
ACCOUNT
NUMBER
|
|||||||||||
NAME
OF ACCOUNT
|
|||||||||||
ATTENTION
TO WHOM
|
|||||||||||
PURPOSE
OF WIRE
|
|||||||||||
Module 1 –
Whole Bank w/ Loss Share – P&A
Version 1.02
March
16, 2009
|
78
|
TeamBank,
N.A.
Paola,
Kansas
|
EXHIBIT
5
FDIC MORTGAGE LOAN
MODIFICATION PROGRAM
Objective
The
objective of this FDIC Mortgage Loan Modification Program ("Program") is to
modify the terms of certain residential mortgage loans so as to improve
affordability, increase the probability of performance, allow borrowers to
remain in their homes and increase the value of the loans to the FDIC and
assignees. The Program provides for the modification of Qualifying Loans (as
defined below) by reducing the borrower's monthly housing debt to income ratio
("DTI Ratio") to no more than 31% at the time of the modification and
eliminating adjustable interest rate and negative amortization
features.
In order
for a mortgage loan to be a Qualifying Loan it must meet all of the following
criteria, which must be confirmed by the lender:
· The
collateral securing the mortgage loan is owner-occupied; and
· The
mortgagor has a first priority lien on the collateral; and
· Either
the borrower is at least 60 days delinquent or a default is reasonably
foreseeable.
Modification
Process
The
lender shall undertake a review of its mortgage loan portfolio to identify
Qualifying Loans. For each Qualifying Loan, the lender shall determine the net
present value of the modified loan and, if it will exceed the net present value
of the foreclosed collateral upon disposition, then the Qualifying Loan shall be
modified so as to reduce the borrower's monthly DTI Ratio to no more than 31% at
the time of the modification. To achieve this, the lender shall use a
combination of interest rate reduction, term extension and principal
forbearance, as necessary.
The
borrower's monthly DTI Ratio shall be a percentage calculated by dividing the
borrower's monthly income by the borrower's monthly housing payment (including
principal, interest, taxes and insurance). For these purposes, (1) the
borrower's monthly income shall be the amount of the borrower's (along with any
co-borrowers') documented and verified gross monthly income, and (2) the
borrower's monthly housing payment shall be the amount required to pay monthly
principal and interest plus one-twelfth of the then current annual amount
required to pay real property taxes and homeowner's insurance with respect to
the collateral.
In order
to calculate the monthly principal payment, the lender shall capitalize to the
outstanding principal balance of the Qualifying Loan the amount of all
delinquent interest, delinquent taxes,
Module 1 –
Whole Bank w/ Loss Share – P&A
Version 1.02
March
16, 2009
|
79
|
TeamBank,
N.A.
Paola,
Kansas
|
past due
insurance premiums, third party fees and (without duplication) escrow advances
(such amount, the "Capitalized Balance").
In order
to achieve the goal of reducing the DTI Ratio to 31%, the lender shall take the
following steps in the following order of priority with respect to each
Qualifying Loan:
1.
|
Reduce
the interest rate to the then current Xxxxxxx Mac Survey Rate for 30-year
fixed rate mortgage loans, and adjust the term to 30
years.
|
2.
|
If
the DTI Ratio is still in excess of 31%, reduce the interest rate further,
but no lower than 3%, until the DTI ratio of 31% is
achieved.
|
3.
|
If
the DTI Ratio is still in excess of 31% after adjusting the interest rate
to 3%, extend the remaining term of the loan by 10
years.
|
4.
|
If
the DTI Ratio is still in excess of 31%, calculate a new monthly payment
(the "Adjusted Payment Amount") that will result in the borrower's monthly
DTI Ratio not exceeding 31%. After calculating the Adjusted Payment
Amount, the lender shall bifurcate the Capitalized Balance into two
portions - the amortizing portion and the non-amortizing portion. The
amortizing portion of the Capitalized Balance shall be the mortgage amount
that will fully amortize over a 40-year term at an annual interest rate of
3% and monthly payments equal to the Adjusted Payment Amount. The
non-amortizing portion of the Capitalized Balance shall be the difference
between the Capitalized Balance and the amortizing portion of the
Capitalized Balance. The lender shall forbear on collecting the
non-amortizing portion of the Capitalized Balance, and such amount shall
be due and payable only upon the earlier of (i) maturity of the modified
loan, (ii) a sale of the property or (iii) a pay-off or refinancing of the
loan. No interest shall be charged on the non-amortizing portion of the
Capitalized Balance, but repayment shall be secured by a first lien on the
collateral.
|
At the
end of the five (5) year period, the interest rate on the modified loan shall
adjust to the Xxxxxxx Mac Survey Rate as of the date of the loan modification,
but subject to an annual adjustment cap of one percent (1%) per year. At that
time, the monthly amount due by the borrower will also adjust to amortize fully
the remaining Capitalized Balance (or, in any case in which the Capitalized
Balance was bifurcated, the amortizing portion thereof) over the remaining term
of the modified loan.
In
connection with the modification of any Qualifying Loan, the following
additional requirements shall apply.
1.
|
The
lender shall not charge (and no borrower shall be required to pay) any
modification, refinance or other similar fees or points in connection with
the modification, nor shall any such fees, costs or charges be
capitalized.
|
Module 1 –
Whole Bank w/ Loss Share – P&A
Version 1.02
March
16, 2009
|
80
|
TeamBank,
N.A.
Paola,
Kansas
|
2.
|
Unpaid
late fees and prepayment penalties otherwise chargeable to the borrower
shall be waived.
|
3.
|
Modified
loans shall not include any prepayment
penalties.
|
4.
|
The
lender shall establish an escrow account for the payment of future taxes
and insurance premiums.
|
In cases
where the lender holds a junior lien mortgage loan that is collateralized by the
same property that collateralizes a Qualifying Loan that is modified as
described above, the junior lien mortgage loan shall also be modified to enhance
overall affordability to the borrower. At a minimum, the lender shall reduce the
interest rate on the junior lien mortgage loan to no more than 2% per annum.
Further modifications may be made at the lender's discretion as needed to
support affordability and performance of the modified first lien Qualifying
Loan.
Module 1 –
Whole Bank w/ Loss Share – P&A
Version 1.02
March
16, 2009
|
81
|
TeamBank,
N.A.
Paola,
Kansas
|
EXHIBIT
4.15B
NON-SINGLE
FAMILY SHARED-LOSS AGREEMENT
This
agreement for reimbursement of loss sharing expenses on certain loans (the
"Non-SF Shared-Loss Agreement") shall apply when the Assuming Bank purchases
Shared-Loss Assets as that term is defined herein. The terms hereof shall modify
and supplement, as necessary, the terms of the Purchase and Assumption Agreement
to which this Non-SF Shared-Loss Agreement is attached as Exhibit 4.15B and
incorporated therein. To the extent any inconsistencies may arise between the
terms of the Purchase and Assumption Agreement and this Non-SF Shared-Loss
Agreement with respect to the subject matter of this Non-SF Shared-Loss
Agreement, the terms of this Non-SF Shared-Loss Agreement shall control.
References in this Non-SF Shared-Loss Agreement to a particular Section shall be
deemed to refer to a Section in this Non-SF Shared-Loss Agreement unless the
context indicates that a Section of the Purchase and Assumption Agreement is
intended.
Capitalized
terms used in this Non-SF Shared-Loss Agreement that are not defined in this
Non-SF Shared-Loss Agreement are defined in the Agreement In addition to the
terms defined above, defined below are certain additional terms relating to
loss-sharing, as used in this Non-SF Shared-Loss Agreement.
"AAA"
means the American Arbitration Association as provided in Section 2.1(f)(iii) of
this Non-SF Shared-Loss Agreement.
"Accrued
Interest" means, with respect to
any Shared-Loss Loan, Permitted Advance or Shared-Loss Loan Commitment Advance
at any time, the amount of earned and unpaid interest, taxes, credit life and/or
disability insurance premiums (if any) payable by the Obligor accrued on or with
respect to such Shared-Loss Loan, Permitted Advance or Shared-Loss Loan
Commitment Advance, all as reflected on the Accounting Records of the Failed
Bank or the Assuming Bank (as applicable); provided, that
Accrued Interest shall not include any amount that accrues on or with respect to
any Shared-Loss Loan, Permitted Advance or Shared-Loss Loan Commitment Advance
after that Asset has been placed on non-accrual or non-performing status by
either the Failed Bank or the Assuming Bank (as applicable).
"Additional
ORE" means
Shared-Loss Loans that become Other Real Estate after Bank Closing
Date.
"Applicable
Anniversary of the Commencement Date" means the fifth (5th)
anniversary of the Commencement Date.
"Calendar
Quarter" means a quarterly period
(a) for the first such period, beginning on the Commencement Date and ending on
the last calendar day of either March, June, September or December, whichever is
the first to occur after the Commencement Date, and (b) for quarterly periods
thereafter, beginning on the first calendar day of the calendar
month
Module 1 –
Whole Bank w/ Loss Share – P&A
Version 1.02
March
16, 2009
|
82
|
TeamBank,
N.A.
Paola,
Kansas
|
immediately
after the month that ended the prior period and ending on the last calendar day
of each successive three-calendar-month period thereafter (i.e., each March,
June, September and December, starting in the applicable order depending on the
ending date of first such period) of any year.
"Capitalized
Expenditures" means those expenditures
that (i) would be capitalized under generally accepted accounting principles,
and (ii) are incurred with respect to Other Real Estate, Additional ORE or
Subsidiary ORE. Capitalized Expenditures shall not include expenses related to
environmental conditions including, but not limited to, remediation, storage or
disposal of any hazardous or toxic substances or any pollutant or
contaminant.
"Charge-Offs" means, with respect to
any Shared-Loss Assets for any period, an amount equal to the aggregate amount
of loans or portions of loans classified as "Loss" under the Examination
Criteria, including reversals or charge-offs of Accrued Interest and charge-offs
of the principal amount of such assets net of unearned interest (including
write-downs associated with Other Real Estate, Additional ORE, Subsidiary ORE or
loan modification(s)) effected by the Assuming Bank during such period in
accordance with the Examination Criteria and reflected on the Accounting Records
of the Assuming Bank; provided, that: (i)
the aggregate amount of Accrued Interest (including any reversals thereof) for
the period after Bank Closing that shall be included in determining the amount
of Charge-Offs for any Shared-Loss Loan shall not exceed ninety (90) days'
Accrued Interest; (ii) no Charge-Off shall be taken with respect to any
anticipated expenditure by the Assuming Bank until such expenditure is actually
incurred; (iii) any
financial statement adjustments made in connection with the purchase of any
Assets pursuant to this Purchase and Assumption Agreement or any future
purchase, merger, consolidation or other acquisition of the Assuming Bank shall
not constitute "Charge-Offs"; and (iv) losses
incurred on the sale or other disposition of Shared-Loss Assets to any Person
(other than the sale or other disposition of Other Real Estate, Additional ORE
or Subsidiary ORE to a Person other than an Affiliate of the Assuming Bank which
is conducted in a commercially reasonable and prudent manner) shall not
constitute Charge-Offs.
"Commencement
Date" means
the first calendar day following Bank Closing.
"Consumer
Loans" means
Loans to individuals for household, family and other personal expenditures
(including United States and/or State-guaranteed student loans and extensions of
credit pursuant to a credit card plan or debit card plan).
"Environmental
Assessment" means an assessment of
the presence, storage or release of any hazardous or toxic substance, pollutant
or contaminant with respect to the collateral securing a Shared-Loss Loan that
has been fully or partially charged off.
"Examination
Criteria" means the loan classification criteria customarily employed by,
or any applicable regulations of, the Assuming Bank's Chartering
Authority.
"Failed
Bank Charge-Offs/Write-Downs" means, with respect to
any Asset, an amount equal to the aggregate amount of reversals or charge-offs
of Accrued Interest and charge-
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offs and write-downs of principal effected by the Failed Bank with respect to that Asset as reflected on the Accounting Records of the Failed Bank.
"FDIC
Party" has
the meaning provided in Section 2.1(f)(ii) of this Non-SF Shared-Loss
Agreement.
"Home
Equity Loans" means Loans that
constitute the funded portions of lines of credit secured by mortgages on one-
to four-family residences or stock of cooperative housing
associations.
"Net
Charge-Offs" means, with respect to
any period, an amount equal to the aggregate amount of Charge-Offs for such
period less the amount of Recoveries for such period.
"Neutral
Member" has
the meaning provided in Section 2.1(f)(ii) of this Non-SF Shared-Loss
Agreement.
"Non-Shared-Loss
Loan Commitment" means any Commitment
other than a Shared-Loss
Loan Commitment.
"Notice
of Dispute" has the meaning provided
in Section 2.1(f)(iii) of this Non-SF Shared-Loss Agreement.
"ORE
Subsidiary" means any Subsidiary of
the Assuming Bank that engages solely in holding, servicing, managing or
liquidating interests of a type described in clause (A) of the definition of
"Other Real Estate," which interests have arisen from the collection or
settlement of a Shared-Loss Loan.
"Other
Real Estate" means all of the
following (including any of the following fully or partially charged off the
books and records of the Failed Bank or the Assuming Bank) that (i) are owned by
the Failed Bank as of Bank Closing and are purchased pursuant to the Agreement
or (ii) have arisen subsequent to Bank Closing from the collection or settlement
by the Assuming Bank of a Shared-Loss Loan:
(A) all
interests in real estate (other than Bank Premises and Fixtures), including but
not limited to mineral rights, leasehold rights, condominium and cooperative
interests, air rights and development rights; and
(B) all other
assets (whether real or personal property) acquired by foreclosure or in full or
partial satisfaction of judgments or indebtedness.
"Permitted
Advance" means an advance of
funds by the Assuming Bank with respect to a Shared-Loss Loan, or the making of
a legally binding commitment by the Assuming Bank to advance funds with respect
to a Shared-Loss Loan, that (i) in the case of such an advance, is actually
made, and, in the case of such a commitment, is made and all of the proceeds
thereof actually advanced, within one (1) year after the Commencement Date, (ii)
does not cause the sum of (A) the book value of such Shared-Loss Loan as
reflected on the Accounting Records
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of the
Assuming Bank after any such advance has been made by the Assuming Bank plus (B) the unfunded
amount of any such commitment made by the Assuming Bank related thereto, to
exceed 110% of the Book Value of such Shared-Loss Loan, (iii) is not made with
respect to a Shared-Loss Loan with respect to which (A) there exists a related
Shared-Loss Loan Commitment or (B) the Assuming Bank has taken a Charge-Off and
(iv) is made in good faith, is supported at the time it is made by documentation
in the Credit Files and conforms to and is in accordance with the applicable
requirements set forth in Article III of this Non-SF Shared-Loss Agreement
and with the then effective written internal credit policy guidelines of the
Assuming Bank; provided, that the
limitations in subparagraphs (i), (ii) and (iii) of this definition shall not
apply to any such action (other than to an advance or commitment related to the
remediation, storage or final disposal of any hazardous or toxic substance,
pollutant or contaminant) that is taken to preserve or secure the value of the
collateral for such Shared-Loss Loan.
"Permitted
Amendment" means, with respect to
any Shared-Loss Loan Commitment or Shared-Loss Loan, any amendment,
modification, renewal or extension thereof, or any waiver of any term, right, or
remedy thereunder, made by the Assuming Bank in good faith and otherwise in
accordance with the applicable requirements set forth in Article III of this
Non-SF Shared-Loss Agreement and the then effective written internal credit
policy guidelines of the Assuming Bank; provided,
that:
(i) with
respect to a Shared-Loss Loan Commitment or a Shared-Loss Loan that is not a
revolving line of credit, no such amendment, modification, renewal, extension,
or waiver, except as allowed under the definition of Permitted Advance, shall
operate to increase the amount of principal (A) then remaining available to be
advanced by the Assuming Bank under the Shared-Loss Loan Commitment or (B) then
outstanding under the Shared-Loss Loan;
(ii) with
respect to a Shared-Loss Loan Commitment or a Shared-Loss Loan that is a
revolving line of credit, no such amendment, modification, renewal, extension,
or waiver, except as allowed under the definition of Permitted Advance, shall
operate to increase the maximum amount of principal authorized as of Bank
Closing to be outstanding at any one time under the underlying revolving line of
credit relationship with the debtor (regardless of the extent to which such
revolving line of credit may have been funded as of Bank Closing or may
subsequently have been funded and/or repaid); and
(iii) no such
amendment, modification, renewal, extension or waiver shall extend the term of
such Shared-Loss Loan Commitment or Shared-Loss Loan beyond the end of the final
Shared-Loss Quarter unless the term of such Shared-Loss Loan Commitment or
Shared-Loss Loan as existed on Bank Closing was beyond the end of the final
Shared-Loss Quarter, in which event no such amendment, modification, renewal,
extension or waiver shall extend such term beyond the term as existed as of Bank
Closing.
"Quarterly
Certificate" has the meaning provided in Section 2.1(a)(i) of this Non-SF
Shared-Loss Agreement.
"Recoveries" (I)(A) In addition to any sums to be
applied as Recoveries pursuant to subparagraph (II) below, "Recoveries" means,
with respect to any period, the sum of (without
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duplication):
(i) the
amount of collections during such period by the Assuming Bank on Charge-Offs of
Shared-Loss Assets effected by the Assuming Bank prior to the end of the final
Shared-Loss Quarter; plus
(ii) the
amount of collections during such period by the Assuming Bank on Failed Bank
Charge-Offs/Write-Downs; plus
(iii) the
amount of gain on any sale or other disposition during such period by the
Assuming Bank of Shared Loss Loans, Other Real Estate, Additional ORE or
Subsidiary ORE (provided, that the
amount of any such gain included in Recoveries shall not exceed the aggregate
amount of the related Failed Bank Charge-Offs/Write-Downs and Charge-Offs taken
and any related Reimbursable Expenses and Recovery Expenses); plus
(iv) the
amount of collections during such period by the Assuming Bank of any
Reimbursable Expenses or Recovery Expenses; plus
(v) the
amount of any fee or other consideration received by the Assuming Bank during or
prior to such period in connection with any amendment, modification, renewal,
extension, refinance, restructure, commitment or other similar action taken by
the Assuming Bank with respect to an Asset with respect to which there exists a
Failed Bank Charge-Off/Write-Down or a Shared-Loss Loan as to which a Charge-Off
has been effected by the Assuming Bank during or prior to such period (provided, that the
amount of any such fee or other consideration included in Recoveries shall not
exceed the aggregate amount of the related Failed Bank Charge-Offs/Write-Downs
and Charge-Offs taken and any related Reimbursable Expenses and Recovery
Expenses).
(I)(B)
For the purpose of determining the amounts to be applied as Recoveries pursuant
to subparagraph (I)(A) above, the Assuming Bank shall apply amounts received on
the Assets that are not otherwise applied to reduce the book value of principal
of a Shared-Loss Loan (or, in the case of Other Real Estate, Additional ORE,
Subsidiary ORE and Capitalized Expenditures, that are not otherwise applied to
reduce the book value thereof) in the following order: first to Charge-Offs and
Failed Bank Charge-Offs/Write Downs; then to Reimbursable Expenses and Recovery
Expenses; then to interest income; and then to other expenses incurred by the
Assuming Bank.
(II) If
there occurs an amendment, modification, renewal, extension, refinance,
restructure, commitment, sale or other similar action with respect to a
Shared-Loss Loan as to which there exists a Failed Bank Charge-Off/Write Down or
as to which a Charge-Off has been effected by the Assuming Bank during or prior
to such period, and if, as a result of such occurrence, the Assuming Bank
recognizes any interest income for financial accounting purposes on that
Shared-Loss Loan, then "Recoveries"
shall also include the portion of the total amount of any such interest income
recognized by the Assuming Bank which is derived by multiplying:
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(A) the total
amount of any such interest income recognized by the Assuming Bank during such
period with respect to that Shared-Loss Loan as described above, by
(B) a
fraction, the numerator of which is
the aggregate principal amount (excluding reversals or charge-offs of Accrued
Interest) of all such Failed Bank Charge-Offs/Write-Downs and Charge-Offs
effected by the Assuming Bank with respect to that Shared-Loss Loan plus the
principal amount of that Shared-Loss Loan that has not yet been charged-off but
has been placed on nonaccrual status, all of which occurred at any time prior to
or during the period in which the interest income referred to in subparagraph
(II)(A) immediately above was recognized, and the denominator of which
is the total amount of principal indebtedness (including all such prior Failed
Bank Charge-Offs/Write-Downs and Charge-Offs as described above) due from the
Obligor on that Shared-Loss Loan as of the end of such period;
provided, however, that the
amount of any interest income included as Recoveries for a particular
Shared-Loss Loan shall not exceed the aggregate amount of (a) Failed Bank
Charge-Offs/Write-Downs, (b) Charge-Offs effected by the Assuming Bank during or
prior to the period in which the amount of Recoveries is being determined, plus
(c) any Reimbursable Expenses and Recovery Expenses paid to the Assuming Bank
pursuant to this Non-SF Shared-Loss Agreement during or prior to the period in
which the amount of Recoveries is being determined, all with respect to that
particular Shared-Loss Loan; and, provided, further, that any
collections on any such Shared-Loss Loan that are not applied to reduce book
value of principal or recognized as interest income shall be applied pursuant to
subparagraph (I) above.
(III)
Notwithstanding subparagraphs (I) and (II) above, the term "Recoveries" shall
not include: (a) any amounts paid to the Assuming Bank by the Receiver pursuant
to Section 2.1 of this Non-SF Shared-Loss Agreement, (b) amounts received with
respect to Charge-Offs effected by the Assuming Bank after the final Shared-Loss
Quarter, (c) after the final Shared-Loss Quarter, income received by the
Assuming Bank from the operation of, and any gains recognized by the Assuming
Bank on the disposition of, Other Real Estate, Additional ORE or Subsidiary ORE
(such income and gains being hereinafter together referred to as "ORE Income"),
except to the
extent that aggregate ORE Income exceeds the aggregate expenses paid to third
parties by the Assuming Bank after the final Shared-Loss Quarter to manage,
operate and maintain Other Real Estate, Additional ORE or Subsidiary ORE (such
expenses being hereinafter referred to as "ORE Expenses"). In determining the
extent aggregate ORE Income exceeds aggregate ORE Expenses for any Recovery
Quarter as set forth immediately above in subparagraph (c), the Assuming Bank
will subtract (i) ORE Expenses paid to third parties during such Recovery
Quarter (provided, that, in the case of the final Recovery Quarter only, the
Assuming Bank will subtract ORE Expenses paid to third parties from the
beginning of the final Recovery Quarter up to the date the Assuming Bank is
required to deliver the final Quarterly Certificate pursuant to this Non-SF
Shared-Loss Agreement) from (ii) ORE Income
received during such Recovery Quarter, to calculate net ORE income ("Net ORE
Income") for that Recovery Quarter. If the amount of Net ORE Income so
calculated for a Recovery Quarter is positive, such amount shall be reported as
Recoveries on the Quarterly Certificate for such Recovery Quarter. If the amount
of Net ORE Income so calculated for a Recovery Quarter is negative ("Net ORE
Loss Carryforward"), such amount shall be added to any ORE Expenses paid to
third parties in the next succeeding
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Recovery
Quarter, which sum shall then be subtracted from ORE Income for that next
succeeding Recovery Quarter, for the purpose of determining the amount of Net
ORE Income (or, if applicable, Net ORE Loss Carryforward) for that next
succeeding Recovery Quarter. If, as of the end of the final Recovery Quarter, a
Net ORE Loss Carryforward exists, then the amount of the Net ORE Loss
Carryforward that does not exceed the aggregate amount of Net ORE Income
reported as Recoveries on Quarterly Certificates for all Recovery Quarters
may be included as a Recovery Expense on the Quarterly Certificate for the final
Recovery Quarter.
"Recovery
Amount" has
the meaning provided in Section 2.1(b)(ii) of this Non-SF Shared-Loss
Agreement.
"Recovery
Expenses" means, for any Recovery
Quarter, the amount of actual, reasonable and necessary out-of-pocket expenses
(other than Capitalized Expenditures) paid to third parties (other than
Affiliates of the Assuming Bank) by the Assuming Bank, as limited by Sections
3.2(c) and (d) of Article III to this Non-SF Shared-Loss Agreement, to recover
amounts owed with respect to (i) any Shared-Loss Asset as to which a Charge-Off
was effected prior to the end of the final Shared-Loss Quarter (provided that
such amounts were incurred no earlier than the date the first Charge-Off on such
Shared-Loss Asset was reflected on the Accounting Records of the Assuming Bank),
and (ii) Failed Bank Charge-Offs/Write-Downs (including, in each case, expenses
related to an Environmental Assessment but excluding (A) any other expenses
related to such environmental conditions including, but not limited to, the
remediation, storage or final disposal of any such hazardous or toxic substance,
or any such pollutant or contaminant and (B) expenses related to any lender
liability claims or actions, including but not limited to, such claims or
actions arising from environmental conditions); provided, that, so
long as income with respect to a Shared-Loss Loan is being pro-rated pursuant to
the arithmetical formula in subsection (II) of the definition of "Recoveries",
the term "Recovery Expenses" shall not include that portion of any such expenses
paid during such Recovery Quarter to recover any amounts owed on that
Shared-Loss Loan that is derived by:
subtracting (1) the
product derived by multiplying:
(A) the total
amount of any such expenses paid by the Assuming Bank during such Recovery
Quarter with respect to that Shared-Loss Loan, by
(B) a
fraction, the numerator of which is
the aggregate principal amount (excluding reversals or charge-offs of Accrued
Interest) of all such Failed Bank Charge-Offs/Write-Downs and Charge-Offs
effected by the Assuming Bank with respect to that Shared-Loss Loan plus the
principal amount of that Shared-Loss Loan that has not yet been charged-off but
has been placed on nonaccrual status, all of which occurred at any time prior to
or during the period in which the interest income referred to in subparagraph
(II)(A) of the definition of "Recoveries" was recognized, and the denominator of which
is the total amount of principal indebtedness (including all such prior Failed
Bank Charge-Offs/Write-Downs and Charge-Offs as described above) due from the
Obligor on that Shared-Loss Loan as of the end of such period;
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from (2) the total
amount of any such expenses paid during that Recovery Quarter with respect to
that Shared-Loss Loan.
"Recovery
Quarter" has
the meaning provided in Section 2.1 (a)(ii) of this Non-SF Shared-Loss
Agreement.
"Reimbursable
Expenses" means, for any
Shared-Loss Quarter, the amount of actual, reasonable and necessary
out-of-pocket expenses (other than Capitalized Expenditures) paid to third
parties (other than Affiliates of the Assuming Bank) by the Assuming Bank, as
limited by Sections 3.2(c) and (d) of Article III of this Non-SF
Shared-Loss Agreement, to:
(i)
recover amounts owed with respect to any Shared-Loss Asset as to which a
Charge-Off has been effected prior to the end of the final Shared-Loss Quarter
(provided that such amounts were incurred no earlier than the date the first
Charge-Off on such Shared-Loss Asset was reflected on the Accounting Records of
the Assuming Bank) and recover amounts owed with respect to Failed Bank
Charge-Offs/Write-Downs (including, in each case, expenses related to an
Environmental Assessment but excluding (A) any other expenses related to such
environmental conditions including, but not limited to, the remediation, storage
or final disposal of any such hazardous or toxic substance, or any such
pollutant or contaminant and (B) expenses related to any lender liability claims
or actions, including but not limited to, such claims or actions arising from
environmental conditions); provided, that, so
long as income with respect to a Shared-Loss Loan is being pro-rated pursuant to
the arithmetical formula in subsection (II) of the definition of "Recoveries",
the term "Reimbursable Expenses" shall not include that portion of any such
expenses paid during such Shared-Loss Quarter to recover any amounts owed on
that Shared-Loss Loan that is derived by:
subtracting (1) the
product derived by multiplying:
(A) the total
amount of any such expenses paid by the Assuming Bank during such Shared-Loss
Quarter with respect to that Shared-Loss Loan,
(B) a
fraction, the numerator of which is
the aggregate principal amount (excluding reversals or charge-offs of Accrued
Interest) of all such Failed Bank Charge-Offs/Write-Downs and Charge-Offs
effected by the Assuming Bank with respect to that Shared-Loss Loan plus the
principal amount of that Shared-Loss Loan that has not yet been charged-off but
has been placed on nonaccrual status, all of which occurred at any time prior to
or during the period in which the interest income referred to in subparagraph
(II)(A) of the definition of "Recoveries" was recognized, and the denominator of which
is the total amount of principal indebtedness (including all such prior Failed
Bank Charge-Offs/Write-Downs and Charge-Offs as described above) due from the
Obligor on that Shared-Loss Loan as of the end of such period;
from (2) the total
amount of any such expenses paid during that Shared-Loss Quarter with respect to
that Shared-Loss Loan; and
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(ii)
manage, operate or maintain Other Real Estate, Additional ORE or Subsidiary ORE
less the amount of any income received by the Assuming Bank during such
Shared-Loss Quarter with respect to such Other Real Estate, Additional ORE or
Subsidiary ORE (which resulting amount under this clause (ii) may be
negative).
"Residential
Mortgage Loans" means Loans, excluding
advances made pursuant to Home Equity Loans, that are secured by mortgages on
one- to four-family residences or stock of cooperative housing
associations.
"Review
Board" has
the meaning provided in Section 2.1(f)(i) of this Non-SF Shared-Loss
Agreement.
"Shared-Loss
Amount" has
the meaning provided in Section 2.1(b)(i) of this Non-SF Shared-Loss
Agreement.
"Shared-Loss
Asset Repurchase Price" means, with respect to
any Shared-Loss Asset, which shall be determined by the Receiver, the principal
amount thereof due from an Obligor (including, subject to the limitations
discussed below, the amount of any Accrued Interest) stated on the Accounting
Records of the Assuming Bank, as of the date as of which the Shared-Loss Asset
Repurchase Price is being determined (regardless, in the case of a Shared-Loss
Loan, of the Legal Balance thereof); provided, that (i) in
the case of a Shared-Loss Loan there shall be excluded from such amount the
amount of any Accrued Interest accrued on or with respect to such Shared-Loss
Loan prior to the ninety (90)-day period ending on the day prior to the purchase
date determined pursuant to Sections 2.1(e)(i) or 2.1(e)(iii) of this Non-SF
Shared-Loss Agreement, except to the extent such Accrued Interest was included
in the Book Value of such Shared-Loss Loan, and (ii) any collections on a
Shared-Loss Loan received by the Assuming Bank after the purchase date
applicable to such Shared-Loss Loan shall be applied (without duplication) to
reduce the Shared-Loss Asset Repurchase Price of such Shared-Loss Loan on a
dollar-for-dollar basis. For purposes of determining the amount of unpaid
interest which accrued during a given period with respect to a variable-rate
Shared-Loss Loan, all collections of interest shall be deemed to be applied to
unpaid interest in the chronological order in which such interest
accrued.
"Shared-Loss
Assets" means Shared-Loss Loans,
Other Real Estate purchased by the Assuming Bank, Additional ORE, Subsidiary ORE
and Capitalized Expenditures.
"Shared-Loss
Loan Commitment" means:
(i) any
Commitment to make a further extension of credit or to make a further advance
with respect to an existing Shared-Loss Loan; and
(ii) any
Shared-Loss Loan Commitment (described in subparagraph (i) immediately
preceding) with respect to which the Assuming Bank has made a Permitted
Amendment.
"Shared-Loss
Loan Commitment Advance" means an advance
pursuant to a Shared-Loss Loan Commitment with respect to which the Assuming
Bank has not made a
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Permitted
Advance.
"Shared-Loss
Loans" means:
(i)(A)
Loans purchased by the Assuming Bank pursuant to the Agreement set forth on
Exhibit 4.15(b) (B) New Shared-Loss Loans purchased by the Assuming Bank
pursuant to the Agreement, (C) Permitted Advances and (D) Shared-Loss Loan
Commitment Advances, if any; provided, that
Shared-Loss Loans shall not include Loans, New Shared-Loss Loans, Permitted
Advances and Shared-Loss Loan Commitment Advances with respect to which an
Acquired Subsidiary, or a constituent Subsidiary thereof, is an Obligor;
and
(ii) any
Shared-Loss Loans (described in subparagraph (i) immediately preceding) with
respect to which the Assuming Bank has made a Permitted Amendment.
"Shared-Loss
Payment Trigger" means when the sum of
the Cumulative Loss Amount under the Single Family Shared-Loss Agreement and the
cumulative Net Charge-Offs under this Non-SF Shared-Loss Agreement, exceeds the
First Loss Tranche.
"Shared-Loss
Quarter" has
the meaning provided in Section 2.1(a)(i) of this Non-SF Shared-Loss
Agreement.
"Stated
Threshold" means total tosses under
the shared loss agreements in the amount of $115,000,000.
"Subsidiary
ORE" means
all assets owned by ORE Subsidiaries that would constitute Additional ORE if
such assets were on the books of the Assuming Bank.
"Termination
Date" means
the eighth (8th) anniversary of the Commencement Date.
ARTICLE II -- SHARED-LOSS
ARRANGEMENT
(a) Quarterly
Certificates. (i) Not later than
thirty (30) days after the end of each Calendar Quarter from and including the
initial Calendar Quarter to and including the Calendar Quarter in which the
Applicable Anniversary of the Commencement Date falls (each of such Calendar
Quarters being referred to herein as a "Shared-Loss Quarter"), the Assuming Bank
shall deliver to the Receiver a certificate, signed by the AssumingBank's chief
executive officer and its chief financial officer, setting forth in such form
and detail as the Receiver may specify (a "Quarterly Certificate"):
(A) the
amount of Charge-Offs, the amount of Recoveries and the amount of Net
Charge-Offs (which amount may be negative) during such Shared-
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Loss
Quarter with respect to the Shared-Loss Assets (and for Recoveries, with respect
to the Assets for which a charge-off was effected by the Failed Bank prior to
Bank Closing); and
(B) the
aggregate amount of Reimbursable Expenses (which amount may be negative) during
such Shared-Loss Quarter.
(ii) Not
later than thirty (30) days after the end of each Calendar Quarter from and
including the first Calendar Quarter following the final Shared-Loss Quarter to
and including the Calendar Quarter in which the Termination Date falls (each of
such Calendar Quarters being referred to herein as a "Recovery Quarter"), the
Assuming Bank shall deliver to the Receiver a Quarterly Certificate setting
forth, in such form and detail as the Receiver may specify, the amount of
Recoveries and Recovery Expenses during such Recovery Quarter. On the Quarterly
Certificate for the first Recovery Quarter
only, the Assuming Bank may report as a separate item, in such form and
detail as the Receiver may specify, the aggregate amount of any Reimbursable
Expenses that: (a) were incurred prior to or during the final Shared-Loss
Quarter, and (b) had not been included in any Quarterly Certificate for any
Shared-Loss Quarter because they had not been actually paid by the Assuming Bank
(in accordance with the terms of this Non-SF Shared-Loss Agreement) during any
Shared-Loss Quarter and (c) were actually paid by the Assuming Bank (in
accordance with the terms of this Non-SF Shared-Loss Agreement) during the first
Recovery Quarter.
(i) For
purposes of this Section 2.1(b), the Assuming Bank shall record the Shared-Loss
Assets on its Accounting Records at Book Value. If the amount of all Net
Charge-Offs during any Shared-Loss Quarter plus Reimbursable
Expenses during such Shared-Loss Quarter (the "Shared-Loss Amount") is positive,
then, except as provided in Sections 2.1(c) and (e) below, and subject to the
provisions of Section 2.1(b)(vi) below, not later than fifteen (15) days after
the date on which the Receiver receives the Quarterly Certificate with respect
to such Shared-Loss Quarter, the Receiver shall pay to the Assuming Bank an
amount equal to eighty percent (80%) of the Shared-Loss Amount for such
Shared-Loss Quarter. If the Shared-Loss Amount during any Shared-Loss Quarter is
negative, the Assuming Bank shall pay to the Receiver an amount equal to eighty
percent (80%) of the Shared-Loss Amount for such Shared-Loss Quarter, which
payment shall be delivered to the Receiver together with the Quarterly
Certificate for such Shared-Loss Quarter.
(ii) If the
amount of gross Recoveries during any Recovery Quarter less Recovery Expenses
during such Recovery Quarter (the "Recovery Amount") is positive, then,
simultaneously with its delivery of the Quarterly Certificate with respect to
such Recovery Quarter, the Assuming Bank shall pay to the Receiver an amount
equal to eighty percent (80%) of the Recovery Amount for such Recovery Quarter.
If the Recovery Amount is negative, then such negative amount shall be
subtracted from the amount of gross Recoveries during the next succeeding
Recovery Quarter in determining the Recovery Amount in such next succeeding
Recovery Quarter; provided, that this
Section 2.1(b)(ii) shall operate successively in the event that the Recovery
Amount (after giving effect to this Section 2.1(b)(ii)) in such next
succeeding
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Recovery
Quarter is negative. The Assuming Bank shall specify, in the Quarterly
Certificate for the final Recovery Quarter, the aggregate amount for all Recovery Quarters
only, as of the end of, and including, the final Recovery Quarter of (A)
Recoveries ("Aggregate Recovery Period Recoveries"), (B) Recovery Expenses
("Aggregate Recovery Expenses"), and (C) only those Recovery
Expenses that have
been actually "offset" against Aggregate Recovery Period Recoveries
(including those so "offset" in that final Recovery Quarter) ("Aggregate Offset
Recovery Expenses"); as used in this sentence, the term "offset" means the
amount that has been applied to reduce gross Recoveries in any Recovery Quarter
pursuant to the methodology set forth in this Section 2.1(b)(ii). If, at the end
of the final Recovery Quarter the amount of Aggregate Recovery Expenses exceeds
the amount of Aggregate Recovery Period Recoveries, the Receiver shall have no
obligation to pay to the Assuming Bank all or any portion of such excess.
Subsequent to the Assuming Bank's calculation of the Recovery Amount (if any)
for the final Recovery Quarter, the Assuming Bank shall also show on the
Quarterly Certificate for the final Recovery Quarter the results of the
following three mathematical calculations: (i) Aggregate Recovery Period
Recoveries minus Aggregate
Offset Recovery Expenses; (ii) Aggregate Recovery Expenses minus Aggregate
Offset Recovery Expenses; and (iii) the lesser of the two
amounts calculated in (i) and (ii) immediately above ("Additional Recovery
Expenses") multiplied by 80%
(the amount so calculated in (iii) being defined as the "Additional Recovery
Expense Amount"). If
the Additional Recovery Expense Amount is greater than zero, then the
Assuming Bank may request in the Quarterly Certificate for the final Recovery
Quarter that the Receiver reimburse the Assuming Bank the amount of the
Additional Recovery Expense Amount and the Receiver shall pay to the Assuming
Bank the Additional Recovery Expense Amount within fifteen (15) days after the
date on which the Receiver receives that Quarterly Certificate. On the Quarterly
Certificate for the final Recovery Quarter
only, the Assuming Bank may include, in addition to any Recovery Expenses
for.that
Recovery Quarter that were paid by the Assuming Bank in that Recovery Quarter,
those Recovery Expenses that: (a) were incurred prior to or during the final
Recovery Quarter, and (b) had not been included in any Quarterly Certificate for
any Recovery Quarter because they had not been actually paid by the Assuming
Bank (in accordance with the terms of this Non-SF Shared-Loss Agreement) during
any Recovery Quarter, and (c) were actually paid by the Assuming Bank (in
accordance with the terms of this Non-SF Shared-Loss Agreement) prior to the
date the Assuming Bank is required to deliver that final Quarterly Certificate
to the Receiver under the terms of Section 2.1(a)(ii).
(iii) Concurrently
with the delivery date of the Quarterly Certificate for the final Recovery
Quarter as provided in Section 2.1(a)(ii), the Assuming Bank shall deliver to
the Receiver a certificate, signed by the Assuming Bank's chief executive
officer and its chief financial officer, setting forth in such form and detail
(including supporting schedules) as the Receiver may specify, the amount of any
excess of (A) the aggregate amount of Net Charge-Offs for all Shared-Loss
Quarters plus all Reimbursable Expenses and Aggregate Offset Recovery Expenses
plus Additional Recovery Expenses minus the aggregate amount of gross Recoveries
for all Recovery Quarters, over (B) the Stated
Threshold. Not later than forty-five (45) days after the date on which the
Receiver receives such certificate, the Receiver shall pay to the Assuming Bank
an amount equal to fifteen percent (15%) of such excess.
(iv) With
respect to each Shared-Loss Quarter and Recovery Quarter, collections by the
Assuming Bank on any charge-off effected by the Failed Bank prior to
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Closing
on an Asset other than a Shared-Loss Asset shall be reported as Recoveries under
this Section 2.1 only to the extent such collections exceed the Book Value of
such Asset, if any. For any Shared-Loss Quarter or Recovery Quarter in which
collections by the Assuming Bank on such Asset are applied to both Book Value
and to a charge-off effected by the Failed Bank prior to Bank Closing, the
amount of expenditures incurred by the Assuming Bank attributable to the
collection of any such Asset, that shall be considered a Reimbursable Expense or
a Recovery Expense under this Section 2.1 will be limited to a proportion of
such expenditures which is equal to the proportion derived by dividing (A) the
amount of collections on such Asset applied to a charge-off effected by the
Failed Bank prior to Bank Closing, y (B) the total collections on such
Assets.
(v) If the
Assuming Bank has duly specified an amount of Reimbursable Expenses on the
Quarterly Certificate for the first Recovery Quarter as described above in the
last sentence of Section 2.1(a)(ii), then, not later than fifteen (15) days
after the date on which the Receiver receives that Quarterly Certificate, the
Receiver shall pay to the Assuming Bank an amount equal to eighty percent (80%)
of the amount of such Reimbursable Expenses.
(vi) Receiver
has no obligation to make payment for any Shared Loss Quarters until the
Shared-Loss Payment Trigger is reached.
(c) Limitation
on Shared-Loss Payment. The Receiver shall not
be required to make any payments pursuant to this Section 2.1 with respect to
any Charge-Off of a Shared-Loss Asset that the Receiver or the Corporation
determines, based upon the Examination Criteria, should not have been effected
by the Assuming Bank. In the event that the Receiver does not make any payments
with respect to any Charge-Off of a Shared-Loss Asset pursuant to this
Section 2.1 or determines that a payment was improperly made, the Assuming Bank
and the Receiver shall make such accounting adjustments and payments as may be
necessary to give retroactive effect to such corrections.
(d) Sale of,
or Additional Advances or Amendments with Respect to Shared-Loss
Loans. No
Shared-Loss Loan shall be treated as a Shared-Loss Asset pursuant to this
Section 2.1 (i) after the Assuming Bank makes any additional advance, commitment
or increase in the amount of a commitment with respect to such Shared-Loss Loan
that does not constitute a Permitted Advance or a Shared-Loss Loan Commitment
Advance, (iii) after the Assuming Bank makes any amendment, modification,
renewal or extension to such Shared-Loss Loan that does not constitute a
Permitted Amendment, or (iv) after the Assuming Bank has managed, administered
or collected any "Related Loan" (as such term is defined in Section 3.4 of
Article III of this Exhibit) in any manner which would have the effect of
increasing the amount of any collections with respect to the Related Loan to the
detriment of such Shared-Loss Asset to which such loan is related; provided, that any
such Shared-Loss Loan that has been the subject of Charge-Offs prior to the
taking of any action described in clause (i), (ii), or (iii) of this Section
2.1(d) by the Assuming Bank shall be treated as a Shared-Loss Asset pursuant to
this Section 2.1 solely for the purpose of treatment of Recoveries on such
Charge-Offs until such time as the amount of Recoveries with respect to such
Shared-Loss Asset equals such Charge-Offs.
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(i) In the
event that the Assuming Bank determines that there is a substantial likelihood
that continued efforts to collect a Shared-Loss Asset or an Asset for which a
charge-off was effected by the Failed Bank with, in either case, a Legal Balance
of $500,000 or more on the Accounting Records of the Assuming Bank will result
in an expenditure of funds by the Assuming Bank to a third party for a specified
purpose (the expenditure of which, in its best judgment, will maximize
collections), which do not constitute Reimbursable Expenses or Recovery
Expenses, and such expenses will exceed ten percent (10%) of the then book value
thereof as reflected on the Accounting Records of the Assuming Bank, the
Assuming Bank shall (i) promptly so notify the Receiver and (ii) request that
such expenditure be treated as a Reimbursable Expense or Recovery Expense for
purposes of this Section 2.1. (Where the Assuming Bank determines that there is
a substantial likelihood that the previously mentioned situation exists with
respect to continued efforts to collect a Shared-Loss Asset or an Asset for
which a charge-off was effected by the Failed Bank with, in either case, a Legal
Balance of less than $500,000 on the Accounting Records of the Assuming Bank,
the Assuming Bank may so notify the Receiver and request that such expenditure
be treated as a Reimbursable Expense or Recovery Expense.) Within thirty (30)
days after its receipt of such a notice, the Receiver will advise the Assuming
Bank of its consent or denial that such expenditures shall be treated as a
Reimbursable Expense or Recovery Expense, as the case may be. Notwithstanding
the failure of the Receiver to give its consent with respect to such
expenditures, the Assuming Bank shall continue to administer such Shared-Loss
Asset in accordance with Section 2.2, except that the Assuming Bank shall not be
required to make such expenditures. At any time after its receipt of such a
notice and on or prior to the Termination Date the Receiver shall have the right
to purchase such Shared-Loss Asset or Asset as provided in Section 2.1(e)(iii),
notwithstanding any consent by the Receiver with respect to such
expenditure.
(ii) During
the period prior to the Termination Date, the Assuming Bank shall notify the
Receiver within fifteen (15) days after any of the following becomes fully or
partially charged-off:
(A) a
Shared-Loss Loan having a Legal Balance (or, in the case of more than one (1)
Shared-Loss Loan made to the same Obligor, a combined Legal Balance) of $500,000
or more in circumstances in which the legal claim against the relevant Obligor
survives; or
(B) a
Shared-Loss Loan to a director, an "executive officer" as defined in 12
C.F.R., 215.2(d),
a "principal shareholder" as defined in 12 C.F.R., 215.2(1),
or an Affiliate of the Assuming Bank.
(iii) If the
Receiver determines in its sole discretion that the Assuming Bank is not
diligently pursuing collection efforts with respect to any Shared-Loss Asset
which has been fully or partially charged-off or written-down (including any
Shared-Loss Asset which is identified or required to be identified in a notice
pursuant to Section 2.1(e)(ii)) or any Asset for which there exists a Failed
Bank Charge-Off/Write-Down, the Receiver may at its option, exercisable at any
time on or prior to the Termination Date, require the Assuming Bank
to
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assign,
transfer and convey such Shared-Loss Asset or Asset to and for the sole benefit
of the Receiver for a price equal to the Repurchase Price thereof less the
Related Liability Amount with respect to any Related Liabilities related to such
Shared-Loss Asset or Asset.
(iv) Not later
than ten (10) days after the date upon which the Assuming Bank receives notice
of the Receiver's intention to purchase or require the assignment of any
Shared-Loss Asset or Asset pursuant to Section 2.1(e)(i) or (iii), the Assuming
Bank shall transfer to the Receiver such Shared-Loss Asset or Asset and any
Credit Files relating thereto and shall take all such other actions as may be
necessary and appropriate to adequately effect the transfer of such Shared-Loss
Asset or Asset from the Assuming Bank to the Receiver. Not later than fifteen
(15) days after the date upon which the Receiver receives such Shared-Loss Asset
or Asset and any Credit Files relating thereto, the Receiver shall pay to the
Assuming Bank an amount equal to the Repurchase Price of such Shared-Loss Asset
or Asset less the Related Liability Amount.
(v) The
Receiver shall assume all Related Liabilities with respect to any Shared-Loss
Asset or Asset set forth in the notice described in Section 2.1
(e)(iv).
(i) (A) Any
dispute as to whether a Charge-Off of a Shared-Loss Asset was made in accordance
with Examination Criteria shall be resolved by the Assuming Bank's Chartering
Authority. (B) With respect to any other dispute arising
under the terms of this this Non-SF Shared-Loss Agreement, at the. discretion of
the Corporation, to be exercised in each instance of such other dispute, and
with the subsequent written consent of the Assuming Bank, such other dispute
shall be resolved by determination of a review board (a "Review Board")
established pursuant to Section 2.1(f). Any Review Board under this Section
2.1(f) shall follow the provisions of the Federal Arbitration Act and shall
follow the provisions of the Administrative Dispute Resolution Act of 1996
("ADRA"), as amended. (C) Any determination by the Assuming Bank's Chartering
Authority or by a Review Board shall be conclusive and binding on the parties
hereto and not subject to further dispute, and judgment may be entered on said
determination in accordance with applicable arbitration law in any court having
jurisdiction thereof.
(ii) A Review
Board shall consist of three (3) members, each of whom shall have such expertise
as the Corporation and the Assuming Bank agree is relevant. As appropriate, the
receiver or the Corporation (the "FDIC Party") will select one member, one
member will be selected by the Assuming Bank and the third member (the "Neutral
Member") will be selected by the other two members. The member of the Review
Board selected by a party may be removed at any time by such party upon two (2)
days' written notice to the other party of the selection of a replacement
member. The Neutral Member may be removed by unanimous action of the members
appointed by the FDIC Party and the Assuming Bank after two (2) days' prior
written notice to the FDIC Party and the Assuming Bank of the selection of a
replacement Neutral Member. In addition, if a Neutral Member fails for any
reason to serve or continue to serve on the Review Board, the other remaining
members shall so notify the parties to the dispute and the Neutral Member in
writing that such Neutral Member will be replaced, and the Neutral Member shall
thereafter be replaced by the unanimous action of the other remaining members
within
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twenty
(20) business days of that notification.
(iii) No
dispute may be submitted to a Review Board by any of the parties to this Non-SF
Shared-Loss Agreement unless such party has provided to the other party a
written notice of dispute ("Notice of Dispute"). During the forty-five (45)-day
period following the providing of a Notice of Dispute, the parties to the
dispute will make every effort in good faith to resolve the dispute by mutual
agreement. As part of these good faith efforts, the parties should consider the
use of less formal dispute resolution techniques, as judged appropriate by each
party in its sole discretion. Such techniques may include, but are not limited
to, mediation, settlement conference, and early neutral evaluation. If the
parties have not agreed to a resolution of the dispute by the end of such
forty-five (45)-day period, then, subject to the discretion of the Corporation
and the written consent of the Assuming Bank as set forth in Section
2.1(f)(i)(B) above, on the first day following the end of such period, the FDIC
Party and the Assuming Bank shall notify each other of its selection of its
member of the Review Board and such members shall be instructed to promptly
select the Neutral Member of the Review Board. If the members appointed by the
FDIC Party and the Assuming Bank are unable to promptly agree upon the initial
selection of the Neutral Member, or a timely replacement Neutral Member as set
forth in Section 2.1(f)(ii) above, the two appointed members shall apply to the
American Arbitration Association ("AAA"), and such Neutral Member shall be
appointed in accordance with the Commercial Arbitration Rules of the
AAA.
(iv) The
resolution of a dispute pursuant to this Section 2.1(f) shall be governed by the
Commercial Arbitration Rules of the AAA to the extent that such rules are not
inconsistent with this Section 2.1(f). The Review Board may modify the
procedures set forth in such rules from time to time with the prior approval of
the FDIC Party and the Assuming Bank.
(v) Within
fifteen (15) days after the last to occur of the final written submissions of
both parties, the presentation of witnesses, if any, and oral presentations, if
any, the Review Board shall adopt the position of one of the parties and shall
present to the parties a written award regarding the dispute. The determination
of any two (2) members of a Review Board will constitute the determination of
such Review Board.
(vi) The FDIC
Party and the Assuming Bank will each pay the fees and expenses of the member of
the Review Board selected by it. The FDIC Party and Assuming Bank will share
equally the fees and expenses of the Neutral Member. No such fees or expenses
incurred by the Assuming Bank shall be subject to reimbursement by the FDIC
Party under this Non-SF Shared-Loss Agreement or otherwise.
(vii) Each
party will bear all costs and expenses incurred by it in connection with the
submission of any dispute to a Review Board. No such costs or expenses incurred
by the Assuming Bank shall be subject to reimbursement by the FDIC Party under
this Non-SF Shared-Loss Agreement or otherwise. The Review Board shall have no
authority to award costs or expenses incurred by either party to these
proceedings.
(viii) Any
dispute resolution proceeding held pursuant to this Section 2.1(f) shall not be
public. In addition, each party and each member of any Review Board shall
strictly
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maintain
the confidentiality of all issues, disputes, arguments, positions and
interpretations of any such proceeding, as well as all information, attachments,
enclosures, exhibits, summaries, compilations, studies, analyses, notes,
documents, statements, schedules and other similar items associated therewith.
Pursuant to ADRA, dispute resolution communications may not be disclosed either
by the parties or by any member of the Review board unless:
(1) all
parties to the dispute resolution proceeding agree in writing;
(2) the
communication has already been made public;
(3) the
communication is required by statute to be made public; or
(4) a court
determines that such testimony or disclosure is necessary to prevent a manifest
injustice, help establish a violation of the law or prevent harm to the public
health or safety, or of sufficient magnitude in the particular case to outweigh
the integrity of dispute resolution proceedings in general by reducing the
confidence of parties in future cases that their communications will remain
confidential.
(ix) Any
dispute resolution proceeding pursuant to this Section 2.1(f) (whether as a
matter of good faith negotiations, by resort to a Review Board, or otherwise) is
a compromise negotiation for purposes of the Federal Rules of Evidence and state
rules of evidence. The parties agree that all proceedings, including any
statement made or document prepared by any party, attorney or other participants
are privileged and shall not be disclosed in any subsequent proceeding or
document or construed for any purpose as an admission against interest. Any
document submitted and any statements made during any dispute resolution
proceeding are for settlement purposes only. The parties further agree not to
subpoena any of the members of the Review Board or any. documents submitted to
the Review Board. In no event-will the Neutral Member voluntarily testify on
behalf of any party.
(x) No
decision, interpretation, determination, analysis, statement, award or other
pronouncement of any Review Board shall constitute precedent as regards any
subsequent proceeding (whether or not such proceeding involves dispute
resolution under this Non-SF Shared-Loss Agreement) nor shall any Review Board
be bound to follow any decision, interpretation, determination, analysis,
statement, award or other pronouncement rendered by any previous Review Board or
any other previous dispute resolution panel which may have convened in
connection with a transaction involving other failed financial institutions or
Federal assistance transactions.
(xi) The
parties may extend any period of time in this Section 2.1(f) by mutual
agreement. Notwithstanding anything above to the contrary, no dispute shall be
submitted to a Review Board until each member of the Review Board, and any
substitute member, if applicable, agrees to be bound by the provisions of this
Section 2.1(f) as applicable to members of a Review Board. Prior to the
commencement of the Review Board proceedings, or, in the case of a substitute
Neutral Member, prior to the re-commencement of such proceedings subsequent to
that substitution, the Neutral Member shall provide a written oath of
impartiality.
2.2 Administration
of Shared-Loss Assets. The Assuming Bank shall
at all times prior to the Termination Date comply with the Rules Regarding the
Administration of Shared-
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Loss Assets as set forth in Article III of this Exhibit.
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(a) Within
ninety (90) days after the end of each calendar year from and including the
calendar year during which Bank Closing falls to and including the calendar year
during which the Termination Date falls, the Assuming Bank shall deliver to the
Corporation and to the Receiver a report signed by its independent public
accountants stating that they have reviewed the terms of this Non-SF Shared-Loss
Agreement and that, in the course of their annual audit of the Assuming Bank's
books and records, nothing has come to their attention suggesting that any
computations required to be made by the Assuming Bank during such calendar year
by this Article II were not made by the Assuming Bank in accordance herewith. In
the event that the Assuming Bank cannot comply with the preceding sentence, it
shall promptly submit to the Receiver corrected computations together with a
report signed by its independent public accountants stating that, after giving
effect to such corrected computations, nothing has come to their attention
suggesting that any computations required to be made by the Assuming Bank during
such year by this Article II were not made by the Assuming Bank in
accordance herewith. In such event, the Assuming Bank and the Receiver shall
make all such accounting adjustments and payments as may be necessary to give
effect to each correction reflected in such corrected computations, retroactive
to the date on which the corresponding incorrect computation was
made.
(b) The
Assuming Bank shall perform on a semi-annual basis an internal audit of its
compliance with the provisions of this Article II and shall provide the Receiver
and the Corporation with copies of the internal audit reports and access to
internal audit workpapers related to such internal audit.
(c) The
Receiver or the Corporation may perform an audit to determine the Assuming
Bank's compliance with the provisions of this Non-SF Shared-Loss Agreement, -
including this Article II, at any time. The scope and duration of any such audit
shall be within the sole discretion of the Receiver or the Corporation, as the
case may be. The Receiver or the Corporation, as the case may be, shall bear the
expense of any such audit. In the event that any corrections are necessary as a
result of such an audit, the Assuming Bank and the Receiver shall make such
accounting adjustments and payments as may be necessary to give retroactive
effect to such corrections.
2.4 Withholdings. Notwithstanding any
other provision in this Article II, the Receiver, upon the direction of the
Director (or designee) of the Corporation's Division of Resolutions and
Receiverships, may withhold payment for any amounts included in a Quarterly
Certificate delivered pursuant to Section 2.1, if, in its sole judgment, there
is a reasonable basis for denying the eligibility of an item for which
reimbursement or payment is sought under such Section. In such event, the
Receiver shall provide a written notice to the Assuming Bank detailing the
grounds for withholding such payment. At such time as the Assuming Bank
demonstrates to the satisfaction of the Receiver that the grounds for such
withholding of payment, or portion of payment, no longer exist or have been
cured, then the Receiver shall pay the Assuming Bank the amount withheld which
the Receiver determines is eligible for payment,
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within
fifteen (15) Business Days. In the event the Receiver or the Assuming Bank
elects to submit the issue of the eligibility of the item for reimbursement or
payment for determination under the dispute resolution procedures of Section
2.1(f), then (i) if the dispute is settled by the mutual agreement of the
parties in accordance with Section 2.1(f)(iii), the Receiver shall pay the
amount withheld (to the extent so agreed) within fifteen (15) Business Days from
the date upon which the dispute is determined by the parties to be resolved by
mutual agreement, and (ii) if the dispute is resolved by the determination of a
Review Board, the Receiver shall pay the amount withheld (to the extent so
determined) within fifteen (15) Business Days from the date upon which the
Receiver is notified of the determination by the Review Board of its obligation
to make such payment. Any payment by the Receiver pursuant to this Section 2.4
shall be made together with interest on the amount thereof from the date the
payment was agreed or determined otherwise to be due, at the interest rate per
annum determined by the Receiver to be equal to the coupon equivalent of the
three (3)-month U.S. Treasury Xxxx Rate in effect as of the first Business Day
of each Calendar Quarter during which such interest accrues as reported in the
Federal Reserve Board's Statistical Release for Selected Interest Rates H.15
opposite the caption "Auction Average - 3-Month" or, if not so reported for such
day, for the next preceding Business Day for which such rate was so
reported.
2.5 Books and
Records. The
Assuming Bank shall at all times keep books and records which fairly present all
dealings and transactions carried out in connection with its business and
affairs. Except as otherwise provided for in the Purchase and Assumption
Agreement or this Non-SF Shared-Loss Agreement, all financial books and records
shall be kept in accordance with generally accepted accounting principles,
consistently applied for the periods involved and in a manner such that
information necessary to determine compliance with any requirement of the
Purchase and Assumption Agreement or this Non-SF Shared-Loss Agreement will be
readily obtainable, and in a manner such that the purposes of the Purchase and
Assumption Agreement or this Non-SF Shared-Loss Agreement may be effectively
accomplished. Without the prior written approval of the Corporation, the
Assuming Bank shall not make any change in its accounting principles affecting
the Shared-Loss Assets except as required by a change in generally accepted
accounting principles. The Assuming Bank shall notify the Corporation of any
change in its accounting principles affecting the Shared-Loss Assets which it
believes are required by a change in generally accepted accounting
principles.
2.6 Information. The Assuming Bank shall
promptly provide to the Corporation such other information, including financial
statements and computations, relating to the performance of the provisions
of the Agreement or otherwise relating to its business and affairs or this
Exhibit, as the Corporation or the Receiver may request from time to
time.
2.7 Tax
Ruling. The
Assuming Bank shall not at any time, without the Corporation's prior written
consent, seek a private letter ruling or other determination from the Internal
Revenue Service or otherwise seek to qualify for any special tax treatment or
benefits associated with any payments made by the Corporation pursuant to the
Agreement or this Exhibit.
ARTICLE
III - RULES REGARDING THE ADMINISTRATION OF SHARED-LOSS ASSETS
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3.1 Agreement
with Respect to Administration. The Assuming Bank shall
(and shall cause any of its Affiliates to which the Assuming Bank transfers any
Shared-Loss Assets to) manage, administer, and collect the Shared-Loss Assets
while owned by the Assuming Bank or any Affiliate thereof during the term of the
Agreement in accordance with the rules set forth in this Article III ("Rules").
The Assuming Bank shall be responsible to the Receiver and the Corporation in
the performance of its duties hereunder and shall provide to the Receiver and
the Corporation such reports as the Receiver or the Corporation deems advisable,
including but not limited to the reports required by Section 3.3 hereof, and
shall permit the Receiver and the Corporation at all times to monitor the
Assuming Bank's performance of its duties hereunder.
3.2 Duties of
the Assuming Bank. (a) In performance of
its duties under these Rules, the Assuming Bank shall:
(i) manage,
administer, collect and effect Charge-Offs and Recoveries with respect to each
Shared-Loss Asset in a manner consistent with (A) usual and prudent business and
banking practices; (B) the Assuming Bank's practices and procedures including,
without limitation, the then-effective written internal credit policy guidelines
of the Assuming Bank, with respect to the management, administration and
collection of and taking of charge-offs and write-downs with respect to loans,
other real estate and repossessed collateral that do not constitute Shared-Loss
Assets;
(ii) exercise
its best business judgment in managing, administering, collecting and effecting
Charge-Offs with respect to Shared-Loss Assets;
(iii) use its
best efforts to maximize collections with respect to Shared-Loss Assets and, if
applicable for a particular Shared-Loss Asset, without regard to the effect of
maximizing collections on assets held by the Assuming Bank or any of its
Affiliates that are not Shared-Loss Assets;
(iv) adopt and
implement accounting, reporting, record-keeping and similar systems with respect
to the Shared-Loss Assets, as provided in Section 3.3 hereof;
(v) retain
sufficient staff to perform its duties hereunder;
(vi) provide
written notification in accordance with Article IV of this Exhibit immediately
after the execution of any contract pursuant to which any third party (other
than an Affiliate of the Assuming Bank) will manage, administer or collect any
of the Shared-Loss Assets, together with a copy of that contract.
(b) Any
transaction with or between any Affiliate of the Assuming Bank with respect to
any Shared-Loss Asset including, without limitation, the execution of any
contract pursuant to which any Affiliate of the Assuming Bank will manage,
administer or collect any of the Shared-Loss Assets, or any other action
involving self-dealing, shall be subject to the prior written approval of the
Receiver or the Corporation.
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(c) The
following categories of expenses shall not be deemed to be Reimbursable Expenses
or Recovery Expenses:
(i) Federal,
State, or local income taxes and expenses related thereto;
(ii) salaries
or other compensation and related benefits of Assuming Bank employees and the
employees of its Affiliates including, without limitation, any bonus, commission
or severance arrangements, training, payroll taxes, dues, or travel- or
relocation-related expenses;
(iii) the cost
of space occupied by the Assuming Bank, any Affiliate thereof and their staff,
the rental of and maintenance of furniture and equipment, and expenses for data
processing including the purchase or enhancement of data processing
systems;
(iv) except as
otherwise provided herein, fees for accounting and other independent
professional consultants (other than consultants retained to assess the
presence, storage or release of any hazardous or toxic substance, or any
pollutant or contaminant with respect to the collateral securing a Shared-Loss
Loan that has been fully or partially charged-off); provided, that for
purposes of this Section 3.2(c)(iv), fees of attorneys and appraisers engaged as
necessary to assist in collections with respect to Shared-Loss Assets shall not
be deemed to be fees of other independent consultants;
(v) allocated
portions of any other overhead or general and administrative expense other than
any fees relating to specific assets, such as appraisal fees or environmental
audit fees, for services of a type the Assuming Bank does not normally perform
internally;
(vi) any
expense not incurred in good faith and with the same degree of care that the
Assuming Bank normally would exercise in the collection of troubled assets in
which it alone had an interest; and
(vii) any
expense incurred for a product, service or activity that is of an extravagant
nature or design.
(d) The
Assuming Bank shall not contract with third parties to provide services the cost
of which would be a Reimbursable Expense or Recovery Expense if the Assuming
Bank would have provided such services itself if the relevant Shared-Loss Assets
were not subject to the loss-sharing provisions of Section 2.1 of this
Commercial Loss-Share Agreement.
3.3 Shared-Loss
Asset Records and Reports. The Assuming Bank shall
establish and maintain records on a separate general ledger, and on such
subsidiary ledgers as may be appropriate to account for the Shared-Loss Assets,
in such form and detail as the Receiver or the Corporation may require, to
enable the Assuming Bank to prepare and deliver to the Receiver or the
Corporation such reports as the Receiver or the Corporation may from time to
time request regarding the Shared-Loss Assets and the Quarterly Certificates
required by Section 2.1 of this Exhibit.
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3.4 Related
Loans.
(a) The
Assuming Bank shall not manage; administer or collect any "Related Loan" in any
manner which would have the effect of increasing the amount of any collections
with respect to the Related Loan to the detriment of the Shared-Loss Asset to
which such loan is related. A "Related Loan" means any loan or extension of
credit held by the Assuming Bank at any time on or prior to the end of the final
Recovery Quarter that is: (i) made to the same Obligor with respect to a Loan
that is a Shared-Loss Asset or with respect to a Loan from which Other Real
Estate, Additional ORE or Subsidiary ORE derived, or (ii) attributable to the
same primary Obligor with respect to any Loan described in clause (i) under the
rules of the Assuming Bank's Chartering Authority concerning the legal lending
limits of financial institutions organized under its jurisdiction as in effect
on the Commencement Date, as applied to the Assuming Bank.
(b) The
Assuming Bank shall prepare and deliver to the Receiver with the Quarterly
Certificates for the Calendar Quarters ending June 30 and December 31 for
all Shared-Loss Quarters and Recovery Quarters, a schedule of all Related Loans
which are commercial loans or commercial real estate loans with Legal Balances
of $500,000 or more on the Accounting Records of the Assuming Bank as of the end
of each such semi-annual period, and all other commercial loans or commercial
real estate loans attributable to the same Obligor on such loans of $500,000 or
more.
3.5 Legal
Action; Utilization of Special Receivership Powers. The Assuming Bank shall
notify the Receiver in writing (such notice to be given in accordance with
Article IV below and to include all relevant details) prior to utilizing in any
legal action any special legal power or right which the Assuming Bank
derives as a result of having acquired an asset from the Receiver, and the
Assuming Bank shall not utilize any such power unless the Receiver shall have
consented in writing to the proposed usage. The Receiver shall have the right to
direct such proposed usage by the Assuming Bank and the Assuming Bank shall
comply in all respects with such direction. Upon request of the Receiver, the
Assuming Bank will advise the Receiver as to the status of any such legal
action. The Assuming Bank shall immediately notify the Receiver of any judgment
in litigation involving any of the aforesaid special powers or
rights.
RECEIVER
As a
supplement to the notice provisions contained in Section 13.7 of the Agreement,
any notice, request, demand, consent, approval, or other communication (a
"Notice") given to the Corporation and/or the Receiver in the loss-sharing
context shall be given as follows:
4.1 With
respect to a Notice under Sections 2 and Sections 3.2, 3.3, and 3.4 of this
Exhibit:
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Federal
Deposit Insurance Corporation
Division
of Resolutions and Receiverships
000 00xx
Xxxxxx, X.X.
Xxxxxxxxxx,
X.X. 00000
Attention:
Assistant Director, Franchise and Asset Marketing
4.2 With
respect to a Notice under Section 3.5 of this Exhibit:
Federal
Deposit Insurance Corporation
Legal
Division
0000
Xxxxx Xxxxxx
Xxxxxx,
Xxxxx 00000
Attention:
Regional Counsel
with a
copy to:
Federal
Deposit Insurance Corporation
Legal
Division
000 00xx
Xxxxxx, X.X.
Xxxxxxxxxx,
X.X. 00000
Attention:
Senior Counsel (Special Issues Group)
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