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EXHIBIT 2.2
ASSET PURCHASE AND SALE AGREEMENT
THIS ASSET PURCHASE AND SALE AGREEMENT (the "Agreement") is made
as of September 28, 1995, by and between FIRST NATIONWIDE BANK, A FEDERAL
SAVINGS BANK (the "Seller") and NORTH FORK BANK (the "Purchaser").
R E C I T A L S
WHEREAS, Seller desires to sell and Purchaser desires to acquire
and operate the branch offices described in Exhibit A, which is attached hereto
and incorporated by this reference (the "Branch Offices") and the business
conducted at the Branch Offices;
WHEREAS, Seller desires to assign to Purchaser and Purchaser
desires to assume from Seller certain liabilities relating to the Branch Offices
and the business conducted at the Branch Offices, including certain obligations
and liabilities relating to the deposits of the Branch Offices and certain other
obligations of Seller;
NOW, THEREFORE, in consideration of the foregoing recitals and
the following terms, covenants, and conditions, the parties agree as follows:
ARTICLE I
DEFINITIONS
1.1 "ACH Accounts" is defined in the definition of "Deposits".
1.2 "ACH Items" is defined in the definition of "Deposits".
1.3 "Additional Contract" is defined in Section 5.13.
1.4 "Affiliates" is defined in Section 12.1.
1.5 "Assumed Liabilities" is defined in Section 2.4.
1.6 "Assets" is defined in Section 2.1.
1.7 "ATM" is defined in Section 2.1(a).
1.8 "Book Value Schedule" is defined in Section 2.6(a).
1.9 "Branch Account" is defined in Section 5.8.
1.10 "Branch Account Report" is defined in Section 5.8.
1.11 "Business Day" means any day (other than a Saturday or Sunday)
on which banking institutions shall generally be open for the
transaction of business in the State of New York.
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1.12 "Business Retirement Plan", "BRP", "Xxxxx Account" or "Xxxxx"
means an account created by a trust for the benefit of employees (some or all of
whom are owner-employees) that complies with the provisions of Section 401 of
the Code.
1.13 "Cash" is defined in Section 2.1(a).
1.14 "Closing" is defined in Section 8.1(b).
1.15 "Closing Date" is defined in Section 8.1(a).
1.16 Space Reserved.
1.17 "Code" is defined in Section 2.9.
1.18 "Collection Accounts" is defined in the definition of
"Deposits".
1.19 "Comparable Position" is defined in Section 6.1(b).
1.20 "Confidential Information" is defined in Section 5.2.
1.21 "Contracts" is defined in Section 2.1(f).
1.22 "Covenant Not To Compete" is defined in Section 5.10.
1.23 The term "Deposits" shall mean all deposits (as defined in
Section 31(l) of the Federal Deposit Insurance Act ("FDIA") as amended, 12
U.S.C. Section 1813(l)), including without limitation the aggregate balances of
all savings accounts (including certificates of deposit) domiciled at each
Branch Office as of the close of business on the Closing Date, including
accounts accessible by negotiable orders of withdrawal ("NOW") or other demand
instruments; all deposit accounts maintained by a customer for the stated
purpose of the accumulation of funds to be drawn upon at retirement ("Retirement
Accounts"); all deposit accounts domiciled at each Branch Office through which
Seller accepts payments or deposits for credit or deposit to another account
domiciled at such Branch Office (the "Collection Accounts"); all deposit
accounts subject to arrangements between the owner of the account and a third
party which directly makes automated clearing house debits and credits,
including, but not limited to, social security payments, Federal recurring
payments, and other payments debited and/or credited on a regularly scheduled
basis to or from such accounts (such payments being hereinafter referred to as
the "ACH Items" and such accounts being hereinafter referred to as the "ACH
Accounts"); and all other accounts and deposits, together with interest, if any,
that is accrued but unposted as of the close of business on the Closing Date
provided that notwithstanding anything to the contrary contained in this
Agreement, Seller shall not assign, and Purchaser shall not assume, any Deposits
subject to or involved in any form of litigation, any Deposits as to which
assets
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of Seller have been pledged as security for amounts in excess of the FDIC
insured limits, or any "Escheatable Deposits."
1.24 "Deposit Obligations" is defined in Section 2.3.
1.25 "Deposit Premium" is defined in Section 2.6(b).
1.26 "Designated Employees" is defined in Section 6.1(g).
1.27 "Disagreement" is defined in Section 2.7(b).
1.28 "Employees" means all persons employed by Seller at any Branch
Office and those employees of FNIC set forth on Schedule 3.15(e) excluding (i)
any person who indicates that he or she is not interested in seeking employment
with Purchaser and (ii) any person who is on leave or disability and does not
return to work within 6 months after the initial date of leave or disability.
1.29 "Encumbrances" is defined in Section 3.5.
1.30 "Environmental Laws" means all applicable federal, state and
local laws and regulations and rules relating to pollution, discharge or release
of Hazardous Substances into the environment or workplace.
1.31 Intentionally Deleted.
1.32 "Escheatable Deposits" means Deposits held as of the close of
business on the Closing Date at any Branch Office which, in the absence of any
claim by the depositor thereof, will become subject to escheat, in the calendar
year in which the Closing occurs, to the State of New York pursuant to
applicable escheat and unclaimed property laws.
1.33 "Estimation Date" is defined in Section 2.6(a).
1.34 "Estimated Cash" is defined in Section 2.6(a).
1.35 "Estimated Deposits" is defined in Section 2.6(a).
1.36 "Estimated Loan Payment" is defined in Section 2.6(a).
1.37 "Estimated Pro-Rata Adjustment" is defined in Section
2.6(a).
1.38 "Estimated Transfer Amount" is defined in Section 2.6(b).
1.39 "Excluded Assets" is defined in Section 2.2(a).
1.40 "Excluded Liabilities" is defined in Section 2.2(b).
1.41 "Fee Properties" is defined in Section 2.1(c).
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1.42 "FDIA" is defined in the definition of "Deposits".
1.43 "FDIC" means Federal Deposit Insurance Corporation.
1.44 "Final Settlement Date" is defined in Section 2.8.
1.45 "Final Transfer Amount" is defined in Section 2.8.
1.46 "FIRPTA Affidavit" is defined in Section 7.1(d).
1.47 "GAAP" is defined in Section 3.11(a).
1.48 "Government Entity" is defined in Section 3.3(a).
1.49 "Hazardous Substances" means the definition of pollutants,
contaminants and hazardous substances set forth in the Federal Comprehensive
Environmental Response Compensation and Liability Act and similar New York state
law.
1.50 "Indemnitee" is defined in Section 12.3(a).
1.51 "Indemnifying Party" is defined in Section 12.3(a).
1.52 "Interest Period" is defined in Section 2.8.
1.53 "XXX" means individual retirement account.
1.54 "IRS" means Internal Revenue Service.
1.55 "Xxxxx Account" or "Xxxxx" has the same meaning as
"Business Retirement Plan" or "BRP".
1.56 "Leased Properties" is defined in Section 2.1(c).
1.57 "Leasehold Improvements" is defined in Section 2.1(g).
1.58 "Leases" is defined in Section 2.1(c).
1.59 Space Reserved.
1.60 "Loans" is defined in Section 2.1(b). As used in this Agreement,
the term "Loans" shall also include (i) any and all liens and other security or
other interests in various items of property and assets of the borrowers
("Borrower" or "Borrowers") and other obligors ("Obligor" or "Obligors") under
the Loans held as collateral for the indebtedness covered by the Loans (the
"Collateral") as provided for in any mortgages, deeds of trust, security
agreements or other agreements, documents, or instruments granting liens or
other encumbrances which may have been executed by the various Borrowers and
Obligors in favor of the Seller and relating to the Loans ("Security
Instruments") and (ii) promissory notes, guarantees, subordination agreements
and similar agreements,
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documents or instruments relating to the Loans and executed by Borrowers or
Obligors.
1.61 "Losses" is defined in Section 12.1.
1.62 "Material Adverse Effect" means a material adverse effect on the
Assets or on the business or operations conducted by Seller at the Branch
Offices.
1.63 "material part" is defined in Section 2.11(d).
1.64 "Material Violation" means a violation which, individually or in
the aggregate with all other such violations, would have a Material Adverse
Effect or constitute or give rise to a default under, result in the termination
of or a right of termination or cancellation under, accelerate the performance
required by, or result in the creation of any lien, pledge, security interest,
charge or other encumbrance upon any of the Assets or any of the assets of
Seller relating to the Branch Offices under any material Seller Agreement.
1.65 "Names" is defined in Section 5.12.
1.66 "NOW" is defined in the definition of "Deposits".
1.67 "Notice of Disagreement" is defined in Section 2.7(b).
1.68 "Other Liabilities" is defined in Section 2.4.
1.69 "Permits" is defined in Section 3.4(c).
1.70 "Personal Property" is defined in Section 2.1(d).
1.71 "Post-Closing Schedule" is defined in Section 2.7(a).
1.72 "properties" is defined in Section 3.9.
1.73 "Pro-Rata Adjustment" is defined in Section 2.5.
1.74 "Purchaser" means North Fork Bank.
1.75 "Purchaser Agreement" is defined in Section 4.2(b).
1.76 "Purchaser's Account" is defined in Section 2.6(b).
1.77 "Purchaser's Indemnified Parties" is defined in Section
12.1.
1.78 "Real Properties" is defined in Section 3.14.
1.79 "Records" means all records and original documents in
Seller's possession which pertain to and are utilized by Seller to
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administer, reflect, monitor, evidence or record information respecting the
business or conduct of any of the Branch Offices and all such records and
original documents respecting (i) the Contracts, (ii) the Assets, (iii) the
Deposits, (iv) the Leases and (v) the Employees (except confidential employee
records for which consents to release such records to Purchaser shall not have
been obtained from the relevant employee), including all such records maintained
on electronic or magnetic media in the electronic data base system of Seller or
to comply with any applicable federal or state law or governmental regulation to
which the Deposits are subject, including but not limited to Federal Reserve
Board Regulation E (12 C.F.R. Section 205), Federal Reserve Board Regulation CC
(12 C.F.R. Section 229) and the escheat and unclaimed property laws of the State
of New York.
1.80 "Requisite Regulatory Approvals" is defined in Section 9.1.
1.81 "Retirement Accounts" is defined in the definition of
"Deposits".
1.82 "Returned Items" is defined in Exhibit B.
1.83 "Review Period" is defined in Section 2.7(b).
1.84 "Safe Deposit Box Assets" is defined in Section 2.1(h).
1.85 "Seller" means First Nationwide Bank, A Federal Savings
Bank.
1.86 "Seller Agreement" is defined in Section 3.2(b)(iii).
1.87 "Seller's Account" is defined in Section 2.8.
1.88 "Seller's Indemnified Parties" is defined in Section 12.2.
1.89 "SAIF" means Savings Association Insurance Fund.
1.90 "Taxes" means all taxes, charges, fees, levies or other like
assessments, including, without limitation, income, gross receipts, excise, real
and personal and intangible property, sales, use, transfer, transfer gain,
withholding, license, payroll, recording, ad valorem and franchise taxes imposed
by the United States, or any state, local or foreign government or subdivision
or agency thereof; and such term shall include any interest, penalties or
additions to tax attributable to such assessments.
1.91 "Tax Return" shall mean any report, return or other information
required to be supplied to a taxing authority in connection with Taxes.
1.92 "Taxpayer Information" is defined in Exhibit B.
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1.93 "Termination Date" is defined in Section 13.1(b).
1.94 "TIN" means taxpayer identification number.
1.95 "Third Party" is defined in Section 12.3(a).
1.96 "Third Party Claim" is defined in Section 12.3(a).
1.97 "Transfer Taxes" is defined in Section 7.1(b).
ARTICLE II
TRANSFER OF ASSETS AND ASSUMPTION OF LIABILITIES
2.1 Purchase and Sale of Assets.
On the Closing Date, subject to the terms and conditions set
forth in this Agreement, Seller shall sell, transfer, assign, convey and deliver
to Purchaser, and Purchaser shall purchase and acquire from Seller, all of
Seller's right, title and interest in and to the following assets (collectively,
the "Assets") relating to the Branch Offices as of the close of business on the
Closing Date:
(a) Cash on Hand. All xxxxx cash, vault cash, teller cash,
automated teller machine ("ATM") cash and any other cash at or held for the
account of the Branch Offices (the "Cash").
(b) Loans. All savings account loans secured by an interest in
Deposits and loans made by the Branch Offices in connection with automatic loan
reserves (i.e., overdraft protection), together with all interest thereon that
shall accrue but not be received by Seller on or prior to the Closing Date (the
"Loans"). At least ten Business Days prior to the Closing Date, Seller shall
provide Purchaser with Schedule 2.1(b) which sets forth all Loans as of the most
recent practicable date.
(c) Real Property. (i) All real property described on Schedule
2.1(c)(i) including the buildings, improvements and structures thereon and the
appurtenances belonging thereto (the "Fee Properties") and (ii) all leasehold
interests in real property identified on Schedule 2.1(c)(ii) (the "Leased
Properties") and all of Seller's rights with respect to the occupancy of the
Leased Properties (the "Leases").
(d) Personal Property. The personal property set forth on
Schedule 2.1(d)-1, which is located at the Branch Offices on the Closing Date
and owned by Seller (including without limitation furniture, fixtures and
equipment) but excluding the property set forth on Schedule 2.1(d)-2 ("Personal
Property").
(e) Records. All segregated Records, provided that if the
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Purchaser reasonably determines that unsegregated Records are necessary to
administer a Branch Office Seller shall use reasonable efforts to make available
to Purchaser the Records or portions thereof that are necessary to administer
the Branch Office.
(f) Contracts. The contract rights, licenses, permits, approvals,
authorizations and franchises set forth on Schedule 2.1(f), together with any
additional contract rights added to such Schedule pursuant to Section 5.13
hereof (the "Contracts").
(g) Leasehold Improvements. All leasehold improvements
(to the extent not otherwise included as Personal Property)
located at the Branch Offices on the Closing Date (the "Leasehold
Improvements").
(h) Safe Deposit Box Assets. All assets related to the safe
deposit box business located at the Branch Offices as of the close of business
on the Closing Date (the "Safe Deposit Box Assets").
(i) Intangibles. The Covenant Not to Compete and the core deposit
intangibles associated with the assumption of Deposits pursuant to Section 2.3
hereto.
2.2 Excluded Assets and Liabilities.
(a) It is understood and agreed that Purchaser is not acquiring
from Seller, and Seller shall retain ownership of all right, title and interest
in and to, any property or asset which is not being transferred pursuant to
Section 2.1 hereof (including but not limited to (i) the existing or any
currently anticipated future name of Seller or derivation thereof and (ii) any
logos, service marks, trademarks, advertising material, slogans, or similar
items used on or prior to the Closing Date by Seller in connection with its
business) and the assets and liabilities set forth on Schedule 2.2
(collectively, the "Excluded Assets").
(b) Except as expressly set forth in this Agreement, Purchaser
shall not assume or be liable for any of the debts, obligations or liabilities
of Seller of any kind or nature whatsoever (whether or not accrued or fixed,
absolute or contingent, known or unknown), and Seller shall remain and be solely
and exclusively liable with regard to such debts, liabilities and obligations
(collectively, the "Excluded Liabilities").
2.3 Assignment and Assumption of Deposits.
Subject to the terms and conditions set forth in this Agreement,
on the Closing Date, Seller shall assign to Purchaser, and Purchaser shall (a)
accept and assume from Seller and (b) pay, perform and discharge all obligations
with respect to and be solely
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liable for all Deposits domiciled at the Branch Offices (the "Deposit
Obligations"). At least ten Business Days prior to the Closing Date, Seller
shall provide Purchaser with Schedule 2.3 which sets forth a list of all the
Deposits as of the most recent practicable date.
2.4 Assignment and Assumption of Other Liabilities.
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Subject to the terms and conditions set forth in this Agreement,
on the Closing Date, Seller shall assign to Purchaser, and Purchaser shall (a)
accept and assume from Seller and (b) pay, perform and discharge all obligations
with respect to and be solely liable for, the liabilities and obligations that
arise under the Leases and the Contracts, which liabilities and obligations
become due and payable after the Closing Date (the "Other Liabilities"). The
Deposit Obligations and the Other Liabilities shall collectively be referred to
as the "Assumed Liabilities".
2.5 Adjustment for Income, Expenses, Pre-Payments and Fees.
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(a) All items of income, operating expenses, pre-payments and
fees relating to the Assets and Assumed Liabilities, whether accrued or prepaid
on or prior to the Closing Date (including without limitation, wages, salaries,
rents, equipment charges, safe deposit fees, utility payments, personal property
taxes, non delinquent real property taxes and assessments relating to the Branch
Offices or the Fee Properties, any fees paid or payable to Seller with respect
to the Loans or the XXX and Xxxxx Accounts, and any FDIC/SAIF fees, premiums or
assessments), shall be pro-rated between the parties as of the close of business
on the Closing Date. Seller shall be responsible for (or entitled to receive, as
the case may be) all such items which are allocable to the period on or prior to
the Closing Date, and Purchaser shall be responsible for (or entitled to
receive, as the case may be) all such items which are allocable to the period
subsequent to the Closing Date. Notwithstanding the foregoing, any special or
extraordinary FDIC/SAIF fees, premiums or assessments relating to the Deposits
levied after the execution of this Agreement shall be paid by Purchaser; and
payment of such fees, premiums or assessments will be made as part of the
Estimated Transfer Amount under Section 2.6 (if levied prior to the Closing),
the Final Transfer Amount under Section 2.8 (if levied after the Closing but
prior to the Final Settlement) or within 10 Business Days of presentment for
payment (if levied after the Final Settlement is made). The aggregate net amount
of such proration adjustments shall be referred to herein as the "Pro-Rata
Adjustment". The Pro-Rata Adjustment shall be included as part of the
calculation of the Estimated Transfer Amount and the Final Transfer Amount as
provided for in this Agreement.
(b) The Pro-Rata Adjustment shall include the dollar amount of
all security deposits which Seller has paid to lessors
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under the Leases, as indicated in the estoppel certificates or assignments to be
signed by such lessors.
(c) To the extent that any of the items of income, fees or
expenses described in paragraph (a) of this section are not discovered prior to
the preparation of the Post-Closing Schedule, the parties shall cooperate with
one another so that Purchaser or Seller, as the case may be, pays any such fee
or expense, or receives any such income, depending upon whether such fee,
expense or income relates to the period before, on or after the Closing Date.
(d) All prorations made pursuant to this section shall be based
upon the ratio of the number of days on or prior to the Closing Date related to
such item compared to the total number of days related to such item.
2.6 Estimated Transfer Payment.
(a) Five (5) Business Days prior to the Closing, Seller shall
deliver to Purchaser a schedule estimating the following, in each case as of the
close of business on the last day of the month preceding the month in which the
Closing Date shall occur (the "Estimation Date"): (i) the aggregate balance of
the Deposits (the "Estimated Deposits"), (ii) the aggregate book value, net of
specific loan loss reserves, of the Loans, plus (to the extent not reflected in
such book value) all interest thereon that shall accrue but not be received by
Seller on or prior to the Estimation Date (such book value, as so adjusted, the
"Estimated Loan Payment"), (iii) the aggregate amount of the Cash (the
"Estimated Cash") and (iv) the Pro-Rata Adjustment (the "Estimated Pro-Rata
Adjustment"). At the Closing, Seller shall deliver to Purchaser a true and
complete schedule (the "Book Value Schedule") setting forth the aggregate book
value, net of accumulated depreciation, as of the Closing Date, of the Personal
Property located at the Branch Offices, the Leasehold Improvements and the Fee
Properties.
(b) In connection with the sale by Seller to Purchaser of the
Assets and the assumption by Purchaser of the Deposits as provided for herein,
at the Closing, Seller shall transfer to Purchaser in immediately available
funds, by wire transfer to an account designated in writing by Purchaser to
Seller at least two days prior to the Closing Date ("Purchaser's Account"), an
amount (the "Estimated Transfer Amount") equal to the Estimated Deposits minus
the sum of (i) the amount set forth on Schedule 2.6 (b)(i) (the "Deposit
Premium"), (ii) the Estimated Loan Payment, (iii) the Estimated Cash, (iv) the
aggregate book value (net of accumulated depreciation) as of the Closing Date of
the Personal Property located at the Branch Offices, the Leasehold Improvements
and the Fee Properties and (v) the Estimated Pro-Rata Adjustment.
(c) In order to illustrate the parties' intent with
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respect to the amount payable by Seller pursuant to Section 2.6(b) of this
Agreement, within 15 Business Days of the date of this Agreement Seller shall
deliver to Purchaser Schedule 2.6(c) calculating the amount that would have been
payable by Seller pursuant to such Section 2.6(b) if the Closing Date were
August 31, 1995.
2.7 Post-Closing Schedule.
(a) Within ten (10) Business Days after the Closing Date, Seller
shall deliver to Purchaser a schedule (the "Post-Closing Schedule") setting
forth the actual amount of (i) the aggregate balance of the Deposits as of the
close of business on the Closing Date, (ii) the aggregate book value, net of
specific loan loss reserves, as of the Closing Date of the Loans, plus (to the
extent not reflected in such book value) all interest thereon that shall accrue
but not be received by Seller on or prior to the Closing Date, (iii) the
aggregate amount of the Cash as of the close of business on the Closing Date,
(iv) the Deposit Premium and (v) the Pro-Rata Adjustment. Purchaser shall
cooperate with Seller in the preparation of the Post-Closing Schedule. Purchaser
shall provide Seller and its independent accountants with reasonable access to
the books, records, facilities and personnel of the Branch Offices in a manner
which does not unduly disrupt or interfere with the operation of the Branch
Offices so that Seller and its independent accountants may prepare the
Post-Closing Schedule.
(b) Within thirty (30) calendar days after delivery of the
Post-Closing Schedule to Purchaser (the "Review Period"), Purchaser may dispute
all or any portion of the Post-Closing Schedule by giving written notice (a
"Notice of Disagreement") to Seller setting forth in reasonable detail the basis
for such dispute (hereinafter called a "Disagreement"). The failure by Purchaser
to deliver a Notice of Disagreement during the Review Period shall constitute an
irrevocable acceptance by Purchaser of the Post-Closing Schedule in the form
delivered by Seller. If Purchaser delivers a Notice of Disagreement during the
Review Period, the parties shall promptly commence good faith negotiations with
a view to resolving such Disagreement. If Seller shall not dispute all or any
portion of the Notice of Disagreement by giving written notice to Purchaser
setting forth in reasonable detail the basis for such dispute within 10 Business
Days following the delivery of the Notice of Disagreement, Seller shall be
deemed to have irrevocably accepted the Post-Closing Schedule as modified by the
Notice of Disagreement.
(c) If Seller disputes all or any portion of the Notice of
Disagreement within the 10 Business Days following the delivery of the Notice of
Disagreement and the parties are not able to resolve any Disagreement within 30
calendar days after the delivery by Seller of its dispute of the Notice of
Disagreement, such Disagreement shall be referred to a nationally recognized
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accounting firm for determination of the disputed amounts in accordance with
this Agreement. If Purchaser and Seller do not promptly agree on the selection
of a nationally recognized accounting firm, their respective independent public
accountants shall immediately select such accounting firm. The determination of
such firm shall be final and binding upon the parties and the amount so
determined shall be used to complete the final Post-Closing Schedule. Such firm
shall render its determination as soon as practicable after referral of the
Disagreement. The fees and expenses of such firm shall be paid one-half by
Purchaser and one-half by Seller. The parties shall cooperate with each other
and such firm with respect to the resolution of any Disagreement, such
cooperation to include reasonable access to books, records, facilities and
personnel.
2.8 Final Settlement.
On the Business Day immediately following the day on which the
Post-Closing Schedule is finally determined pursuant to the terms of Section 2.7
of this Agreement (the "Final Settlement Date"), the Estimated Transfer Amount
shall be recalculated using the amounts reflected in the final Post-Closing
Schedule (the "Final Transfer Amount"). If the Final Transfer Amount exceeds the
Estimated Transfer Amount, Seller shall pay the difference to Purchaser by wire
transfer in immediately available funds to Purchaser's Account. If the Estimated
Transfer Amount exceeds the Final Transfer Amount, Purchaser shall refund the
difference to Seller by wire transfer in immediately available funds to an
account designated in writing by Seller ("Seller's Account"). Any payment
pursuant to this section shall include interest on such amount for the number of
days from (but not including) the Closing Date to, but excluding, the Final
Settlement Date (the "Interest Period") calculated at the Federal Funds Rate as
published in the "Money Rates" section of The Wall Street Journal as of the
Closing Date.
2.9 Allocation of Purchase Price.
The consideration paid by Purchaser to Seller pursuant to this
Agreement shall be allocated among the Assets, including any intangible assets,
as set forth on Schedule 2.9. The allocation of the purchase price will be
bargained and negotiated for, and each party agrees to report the transactions
contemplated hereby for federal income tax and all other tax purposes
(including, without limitation, for purposes of Section 1060 of the Internal
Revenue Code of 1986, as amended (the "Code")) in a manner consistent with the
allocation set forth on Schedule 2.9 determined pursuant to this Section 2.9 and
in accordance with all applicable rules and regulations, and to take no position
inconsistent with such allocation in any administrative or judicial examination
or other proceeding or otherwise. Each of Purchaser and Seller shall timely file
the appropriate forms in accordance with the requirements of
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Section 1060 of the Code and this section.
2.10 Limited Warranty; Nonrecourse; Conveyance
(a) EXCEPT AS OTHERWISE SPECIFICALLY PROVIDED IN THIS AGREEMENT,
THE CONVEYANCE OF ALL ASSETS, INCLUDING PERSONAL PROPERTY INTERESTS, PURCHASED
BY PURCHASER UNDER THIS AGREEMENT AND UNDER ANY CONVEYANCING DOCUMENT EXECUTED
IN CONNECTION HEREWITH SHALL BE MADE, AS NECESSARY, BY SELLER'S SPECIAL WARRANTY
DEED WITH COVENANTS AGAINST GRANTOR'S ACTS, ASSIGNMENT OR XXXX OF SALE, IN "AS
IS" AND "WHERE IS" CONDITION, WITHOUT RECOURSE AND, WITHOUT ANY WARRANTIES
WHATSOEVER WITH RESPECT TO SUCH ACQUIRED ASSETS, EXPRESS OR IMPLIED, WITH
RESPECT TO TITLE, ENVIRONMENTAL CONDITION, ENFORCEABILITY, COLLECTABILITY,
DOCUMENTATION OR FREEDOM FROM LIENS OR ENCUMBRANCES (IN WHOLE OR IN PART),
CONDITION OF PROPERTY OR ANY OTHER MATTER.
(b) On and after the Closing Date, Seller shall execute and
deliver to Purchaser such further instruments and documents of conveyance (in
form and substance satisfactory to Seller and Purchaser) as shall be reasonably
necessary to vest in Purchaser the full legal or equitable title of Seller in
and to the Assets.
(c) On and after the Closing Date, Purchaser shall execute,
acknowledge and deliver all such acknowledgements and other instruments as shall
be reasonably necessary to effectively relieve and discharge Seller from any of
the Assumed Liabilities.
2.11 Risk of Loss; Repairs.
(a) If, on or before the Closing Date, any of the Leased
Properties or Fee Properties is damaged in material part by fire or other cause,
Seller shall promptly notify Purchaser thereof in writing. In such event,
Purchaser may elect to:
(i) In the case of the Fee Property or Leased
Property, allow as a reduction in the consideration payable by
Purchaser to Seller an amount equal to the estimated cost of
restoration (to the extent of the damaged property interest owned
by Seller) as determined by an independent construction
contracting firm satisfactory to both Seller and Purchaser; or
(ii) (A) In the case of the Fee Property, assign at
Closing to Purchaser, without recourse to Seller, the insurance
proceeds for the casualty and the right to collect same, without
any reduction in the consideration payable by Purchaser to Seller
or (B) in the case of a Leased Property, assign at Closing to
Purchaser, without recourse to Seller, the insurance proceeds for
the casualty and the right to collect same (but only to the
extent that Seller, pursuant to the terms of the applicable
lease, is
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entitled to such insurance proceeds payable in connection with
such fire or other cause), without any reduction in the
consideration payable by Purchaser to Seller
(b) If, on or before the Closing Date, any condemnation or
eminent domain proceedings are initiated which could result in the taking of any
part of any Fee Property or Leased Property, Seller shall promptly notify
Purchaser of the initiation of any such proceedings. Upon receipt of such
notice, if a material part of the premises is to be taken, Purchaser may elect
to:
(i) (A) In the case of the Fee Property, consummate
the purchase of the Fee Property and receive a reduction in the
consideration payable by Purchaser to Seller in an amount equal
to the book value of the Fee Property at such time giving effect
to such taking, in which case Seller shall receive and retain any
award made in connection with such condemnation or eminent domain
proceedings or (B) in the case of a Leased Property, consummate
the purchase of the real property leasehold interest in such
Leased Property and receive a reduction in the consideration
payable by Purchaser to Seller in an amount equal to the current
book value of the real property leasehold interest in such Leased
Property giving effect to such taking, in which case Seller shall
receive any award made in connection with such condemnation or
eminent domain proceedings which is payable to Seller pursuant to
the applicable lease; or
(ii) (A) In the case of the Fee Property,
consummate the purchase of the Fee Property without any reduction
in the consideration payable by Purchaser to Seller, in which
event Seller shall assign to Purchaser, without recourse to
Seller, all of Seller's right, title and interest in and to any
award made in connection with such condemnation or eminent domain
proceedings or (B) in the case of a Leased Property, consummate
the purchase of the real property leasehold interest in such
Leased Property, without any reduction in the consideration
payable by Purchaser to Seller, in which event Seller shall
assign to Purchaser, without recourse to Seller, all of Seller's
right, title and interest in and to any award made in connection
with such condemnation or eminent domain proceedings as provided
in the applicable lease.
(c) Purchaser shall have ten (10) Business Days from the date of
receipt of Seller's written notice within which to make such election, and a
failure to make an election shall be deemed an election to consummate this
transaction pursuant to subsection 2.11(a)(i) or 2.11(b)(i) above, as
applicable.
(d) A "material part" shall be deemed to mean (i) any
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taking or damage which would leave remaining a balance of such Fee Property or
Leased Property which, due either to the area so taken or damaged or the
location of the part so taken or damaged in relation to the part not so taken or
damaged, would not permit it to be used effectively for its intended purpose
and, under economic conditions, zoning laws or building regulations then
existing or prevailing, would not readily accommodate a new or reconstructed
building or buildings of a type not materially different from the building or
buildings existing on the date of such taking or damage or (ii) any damage or
taking that would require Purchaser to incur costs or expenses exceeding fifty
thousand dollars ($50,000) to repair the branch or to compensate for such
taking.
(e) If any Fee Property or Leased Property requires any capital
improvements between the date of this Agreement and the Closing Date, Seller
shall give Purchaser notice of the proposed improvements and the cost thereof.
If Purchaser does not object to such proposal within five (5) Business Days,
Seller shall have the right to make such capital improvements and the
consideration payable by Purchaser to Seller shall be increased by the cost of
such capital improvements (only to the extent that the cost of such improvements
have not been reflected in the book value of the Asset so improved).
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller hereby represents and warrants to Purchaser as follows:
3.1 Corporate Organization and Powers.
(a) Seller is a federally chartered savings bank, duly organized,
validly existing and in good standing under the laws of the United States of
America.
(b) Seller has the corporate power and authority to own, lease or
operate the Assets and to carry on the business of the Branch Offices as
presently conducted and is duly qualified and in good standing to do business in
each jurisdiction in which the nature of its business or the ownership or
leasing of its properties makes such qualification necessary, except where the
failure to be so qualified would not, individually or in the aggregate with all
other such failures, have a Material Adverse Effect.
(c) Seller's deposits are, subject to applicable monetary limits
established by law, insured by the SAIF of the FDIC, and all premiums and
assessments required in connection therewith have been paid when due by Seller.
3.2 Corporate Authority; No Violation.
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(a) Seller has the corporate power and authority to execute and
deliver this Agreement and any documents, agreements or instruments to be
executed by Seller pursuant to this Agreement, and to consummate the
transactions contemplated hereby and thereby. The execution and delivery of this
Agreement and any documents, agreements or instruments to be executed by Seller
pursuant to this Agreement, and the consummation of the transactions
contemplated hereby and thereby, have been duly authorized by all necessary
corporate action on the part of Seller, and no further corporate authorization
on the part of Seller is necessary to approve this Agreement or to consummate
the transactions contemplated hereby. This Agreement has been duly executed and
delivered by Seller. Assuming the due authorization, execution and delivery of
this Agreement and of other documents, agreements and Instruments to be
delivered by Seller to Purchaser pursuant to this Agreement by Purchaser, and
except as enforcement may be limited by general principles of equity, whether
applied in a court of law or a court of equity, and by bankruptcy, insolvency
and similar laws affecting creditors' rights and remedies generally, (i) this
Agreement constitutes a legal, valid and binding obligation of Seller,
enforceable against Seller in accordance with its terms and (ii) the other
documents, agreements and instruments to be delivered by Seller to Purchaser
pursuant to this Agreement, when executed and delivered, will be duly executed
and delivered by Seller and will constitute legal, valid and binding obligations
of Seller.
(b) The execution and delivery by Seller of this
Agreement or any document, agreement or instrument to be executed by Seller
pursuant to this Agreement, the consummation by Seller of the transactions
contemplated hereby or thereby, and compliance by Seller with the terms or
provisions hereof or thereof, shall not result:
(i) in a violation of any provision of the Charter
or Bylaws of Seller,
(ii) in a Material Violation of any statute, code,
ordinance, rule, regulation, judgment, order, writ, decree or
injunction applicable to Seller or any of its properties or
assets (including, without limitation, the Assets), or
(iii) in a Material Violation of any note, bond,
mortgage, indenture, deed of trust, license, lease, agreement, or
other instrument or obligation to which Seller is a party or by
which Seller or any of the Assets may be bound or affected (a
"Seller Agreement").
3.3 Consents and Approvals.
(a) Except as set forth on Schedule 3.3, Seller is not required
to obtain any consent, approval, order, authorization, registration, declaration
from, or to make any filing with, any
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court, administrative agency or commission, or governmental authority or
instrumentality, domestic or foreign (each a "Governmental Entity") or any other
third party in connection with (a) Seller's execution and delivery of this
Agreement or any document, agreement or instrument to be executed pursuant to
this Agreement or (b) the consummation by Seller of the transactions
contemplated hereby or thereby (including without limitation the transfer of the
Assets to Purchaser).
(b) As of the date of this Agreement, Seller knows of no reason,
specifically relating to its business or operations, why all of the Requisite
Regulatory Approvals shall not be obtained.
3.4 Compliance With Law.
(a) Except as set forth on Schedule 3.4, with respect to the
Assets and the business of the Seller related to the Branch Offices, Seller is
in compliance in all material respects with the provisions of all applicable
federal, state and local statutes, regulations and ordinances.
(b) Except as set forth on Schedule 3.4, and except for regularly
scheduled examinations, audits and full and limited scope reviews conducted by
Governmental Entities under applicable laws relating to federal savings banks
and their holding companies, no investigation or review by any Governmental
Entity concerning any possible conflicts or violations by Seller is pending or
threatened to the knowledge of Seller.
(c) Seller has all licenses, franchises, permits, certificates of
public convenience, orders and other authorizations ("Permits") of all federal,
state and local governments and governmental authorities necessary for the
lawful conduct of the business being conducted at each of the Branch Offices,
all such Permits are valid and in good standing, and all such Permits are not
subject to any suspension, modification or revocation or proceedings related
thereto except where the failure to have such Permits, or the invalidity
thereof, would not, individually or in the aggregate, have a Material Adverse
Effect.
3.5 Title to Assets.
As of the Closing Date, Seller or one of its subsidiaries will
have, and will deliver to Purchaser at the Closing, good, valid, and marketable
title and with respect to the Fee Properties and will assign a valid leasehold
interest in, all of the Leased Properties, free and clear of all mortgages,
claims, pledges, charges, liens, encumbrances, easements, limitations,
restrictions, commitments and security interests (collectively, the
"Encumbrances") except for Encumbrances:
(a) securing any Assumed Liability;
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(b) listed on Schedule 3.5 or disclosed in any title
reports, opinions or insurance binders listed on Schedule 3.5;
(c) incurred in connection with the acquisition of property and
securing the purchase price therefor, in either case only if such liability
relating thereto is an Assumed Liability;
(d) for Taxes or assessments, special or otherwise, either
payable in installments or not due and payable or being contested in good faith
and subject to escrow, reserves, or other appropriate protection for Purchaser;
(e) easements, rights of way, restrictions, covenants of record,
claims and covenants not shown of record, and other similar charges and
encumbrances which, if the rights granted under such instruments were exercised,
would not individually, or in the aggregate, impair or interfere with the
present and continued use operation, value or marketability of the affected
property;
(f) rights of parties in possession, matters which would be shown
on an accurate survey, and any other defect or exception to title, which in any
case does not materially impair the present and continued use, operation, value
or marketability of the Asset to which it relates; and
(g) with respect to each Fee Property, any other title exceptions
affecting the Fee Property which do not impair or interfere with the present and
continued use, operation, value or marketability of the Fee Property. Seller
shall cooperate with Purchaser to remove those encumbrances on the Fee Property
which the title company may agree to delete as exceptions to the title thereto,
but the title company's failure to delete any such encumbrance shall not
constitute a breach of this representation.
3.6 Contracts and Leases.
(a) Seller is not a party to or bound by any agreements or
arrangements for the purchase or sale of any of the Assets, or for the grant of
any preferential right to purchase any of the Assets, other than in the ordinary
course of business.
(b) Schedule 3.6(b) sets forth each Contract for
transactions:
(i) with an aggregate value of five thousand
dollars ($5,000) or more during the past three (3) months or
twenty-five thousand dollars ($25,000) or more during the past 12
months;
(ii) with a remaining term of more than one (1)
year, or
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(iii) that has or may have a material effect on the
Assets or on the business or operations conducted by Seller at
the Branch Offices.
Each of the foregoing contracts, whether or not set forth on
Schedule 3.6(b), is referred to herein as a Contract.
(c) Upon the Closing, each of the Contracts set forth
on Schedule 3.6(b) and Leases:
(i) will constitute the legal, valid and binding
obligation of Seller, and to the knowledge of Seller, each
of the other parties thereto,
(ii) will be enforceable in accordance with its
terms, and
(iii) will not be subject to any material defaults
or existing acts, events or conditions which, with notice or
lapse of time, or both, will result in a material default under
any of such Contracts or Leases.
Seller has made available to Purchaser true and correct copies of
each Contract set forth on Schedule 2.1(f), and all attachments, amendments and
addenda thereto, excluding those Contacts added pursuant to Section 5.13.
(d) Seller has delivered to Purchaser true, complete and correct
copies of the Leases, together with all amendments, modifications, and other
changes. The Leases are also listed on Schedule 2.1(c)(ii).
(e) All sums due and owing by Seller pursuant to the Leases,
through the Closing Date, have been or will be paid prior to the Closing Date.
(f) Except as set forth on Schedule 3.6(f), Seller has not
subleased any of its interests in any Leased Property.
(g) Seller has not received any notice of (i) non-compliance with
any restriction encumbering any Leased Property, or (ii) any zoning violations
adversely affecting the value or use of any Leased Property.
3.7 Assignment of Assumed Liabilities.
As of the Closing Date, each of the Assumed Liabilities will be
properly assigned to Purchaser, and to the best of Seller's knowledge, there are
no material defaults under any of such Assumed Liabilities.
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3.8 Litigation.
Schedule 3.8 sets forth each action, suit, proceeding, inquiry or
investigation, at law or in equity, before any court, arbitrator, mediator or
any governmental body, agency or official, pending, or, to Seller's knowledge,
threatened, against Seller relating to any of the Assets, Assumed Liabilities,
or the business or operation of the Branch Offices.
Except as set forth on Schedule 3.8, there is no action, suit,
proceeding, at law or in equity, before any court or arbitrator or any
governmental body, agency or official, pending, or, to Seller's knowledge,
threatened against Seller, wherein an unfavorable decision, ruling or finding
would adversely affect (a) the validity or enforceability of this Agreement or
any document necessary to consummate the transactions contemplated herein, (b)
the consummation of the transactions contemplated hereby, (c) any approval,
consent or permission required to be obtained by Seller hereunder, (d) the
ability of Seller to perform its obligations under this Agreement, (e) the use,
development, operation or maintenance of the Fee Properties or the Leased
Properties as branch banking facilities or (f) the business, assets, liabilities
or operations of any of the Branch Offices. Except as set forth on Schedule 3.8,
no attachments, execution proceedings, assignments for the benefit of creditors,
insolvency, bankruptcy, reorganization or other proceedings relating to the
Assets or the Branch Offices are pending, or, to Seller's knowledge, threatened.
3.9 Environmental.
Seller represents and warrants concerning the Fee Properties, the
Leased Properties and all other property contained therein which shall be
transferred pursuant hereto (for purposes of this Section 3.9, "properties")
that, except as set forth on Schedule 3.9 and breaches of this representation
that, individually or in the aggregate, would not have a Material Adverse Effect
on the Assets or the Assumed Liabilities:
(a) Except as otherwise provided herein or as disclosed in any
environmental studies, reports, investigations or other documents (all of which
are listed on Schedule 3.9), such properties are and have been in substantial
compliance with all Environmental Laws,
(b) there has been no storage, disposal, arrangement for
disposal, presence or release of Hazardous Substances, from, in, upon or below
any such properties,
(c) Seller has not engaged in any activity that involves or
involved the generation, use, manufacture, treatment, transportation, storage in
tanks or otherwise, or disposal of Hazardous Substances on or from any property,
and has no actual
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knowledge that any other person has engaged in any such activity,
(d) Seller has not received any written communication from any
person or entity that alleges a violation of Environmental Laws concerning, or
that Seller may be responsible for any Loss (as defined in this Agreement) under
Environmental Laws with respect to, any of the properties,
(e) Seller has not received any written notice of any claim,
action, demand, or investigation from any person or entity alleging or
describing potential Loss under Environmental Laws arising out of or based on or
resulting from (a) the presence, release or threatened release of any Hazardous
Substance from, in, upon or below any of the properties or (b) the violation or
alleged violation of any Environmental Laws concerning any of the properties,
and
(f) Seller is not aware of any past or present actions,
conditions or occurrences which could reasonably be expected to form the basis
of any Loss to Seller under Environmental Laws concerning, relating to or
incidental to the ownership or operation of any of the properties.
(g) Seller has made available to Purchaser copies of all
environmental studies, reports, investigations and other documents relating to
the properties of which Seller has possession.
3.10 Finders or Brokers.
Except as disclosed on Schedule 3.10, Seller has not paid or
agreed to pay any fee or commission to any agent, broker, finder or other person
for or on account of services rendered as a broker or finder in connection with
this Agreement or the transactions covered and contemplated hereby.
3.11 Financial Information.
(a) The books of account of the Branch Offices fairly and
accurately reflect the respective Assets and Assumed Liabilities of the Branch
Offices, in accordance with generally accepted accounting principles ("GAAP") or
regulatory accounting principles, whichever is applicable.
(b) The books of account of the Branch Offices (i) are maintained
by Seller substantially in accordance with applicable legal and accounting
requirements and (ii) reflect only actual transactions.
(c) The Book Value Schedule shall accurately reflect the book
value of the Assets referred to therein as of its date, recorded at their
historical cost and depreciated in accordance
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with Seller's historical accounting policies, all in accordance with GAAP.
(d) The Post-Closing Schedule, to the extent it relates to Loans,
shall accurately reflect the book value of the Loans referred to therein as of
the Closing Date in accordance with generally accepted accounting practices.
(e) Schedule 2.6(c) will be accurate, when delivered in
accordance with the provisions of this Agreement, in all material respects.
3.12 Taxes.
To the best of Seller's knowledge,
(a) All Taxes which are due or payable by Seller relating to the
Assets (except those Taxes which are Purchaser's responsibility under a
different covenant of this Agreement) have been paid in full or properly accrued
and adequately provided for by reserves shown in the books and records of
Seller, or will be so paid or accrued and provided for in the books and records
of the Seller.
(b) All Tax Returns required to be filed with respect to the
Assets have been filed with the appropriate federal, state or local taxing
authority and each such Tax Return is true, complete and correct in all material
respects.
(c) All Taxes shown to be due on such Tax Returns, and all Taxes
arising from or attributable to the Assets required to be withheld by or with
respect to the Seller have been paid or, if applicable, withheld and paid to the
appropriate taxing authority, other than those Taxes the failure of which to be
paid would not result in a lien on the Assets or become a liability of
Purchaser.
(d) No notice of deficiency or assessment of Taxes has been
received from any taxing authority with respect to the Assets.
(e) There are no ongoing audits or examinations of any of the Tax
Returns relating to or attributable to the Assets, other than with respect to
Taxes that would not result in a lien on the Assets or become a liability of
Purchaser.
(f) No consents or waivers to extend the statutory period of
limitations applicable to the assessment of any Taxes with respect to the Assets
has been granted, other than with respect to Taxes that would not result in a
lien on the Assets or become a liability of Purchaser.
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3.13 Loans.
Except as set forth on Schedule 3.13, (a) each evidence of
indebtedness representing a Loan has been duly and validly executed and
delivered by the Borrower(s) and other Obligors(s) thereunder, (b) each Loan
constitutes a genuine, valid and legally binding obligation of such Borrower(s)
and other Obligor(s), enforceable against such Borrower(s) and other Obligor(s)
in accordance with its terms, except as enforceability may be limited by general
principles of equity, whether applied in a court of law or a court of equity,
and bankruptcy, insolvency and similar laws affecting creditors rights and
remedies generally and (c) Seller has duly performed in all material respects
all of its obligations thereunder. There are no material claims, counterclaims,
set-off rights or other rights with respect to any Loan which could impair the
collectability of such Loan or the foreclosure on the Collateral related
thereto. Schedule 3.13 contains a true, complete and correct list of all Loans
made in connection with overdraft protection which (x) are more than 30 days
past due or (y) have been classified or criticized by any federal or state
regulator of Seller or by Seller.
3.14 State of the Property.
(a) Schedule 3.14 contains a list, that is complete and accurate
in all material respects, which sets forth as of a recent date identified on
said schedule (i) the address of each Fee Property and Leased Property and (ii)
the Leases with respect to the Leased Properties and all material amendments
thereto;
(b) The improvements and building systems are in good operating
condition and repair, subject to ordinary wear and tear and routine maintenance
needs; and
(c) The present use, operation and physical condition of the Fee
Properties and the Leased Properties are in material compliance with all
applicable laws.
3.15 Employees.
(a) There are no claims (statutory or otherwise), demands,
proceedings or other actions pending or, to Seller's actual knowledge,
threatened against Seller by (a) any of its present or former employees at the
Branch Offices or (b) any person who sought to become employed by Seller at the
Branch Offices.
(b) None of the Employees is a member of any labor union
or is otherwise subject to collective bargaining.
(c) For purposes of Section 2.4 hereof, the term "Contracts" does
not include any employment, severance, termination or similar agreement.
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(d) Seller's 401(k) plan is a qualified plan for purposes
of Section 401(a) of the Code.
(e) Schedule 3.15(e) sets forth a true and complete list of all
Employees as of the date set forth therein.
3.16 Deposit Insurance.
The Deposits are insured by SAIF up to the maximum extent
permitted by law, and Seller has filed and will file all reports and paid all
fees, premiums and assessments required under the Federal Deposit Insurance Act,
as amended.
3.17 Currency Transaction Reports.
Seller has filed all Currency Transaction Reports with respect to
all transactions required to be reported under the Bank Secrecy Act and
regulations adopted pursuant thereto.
3.18 Insurance.
(a) With respect to the Assets and the operations of the Branch
Offices, Seller currently maintains insurance (the "Insurance") as set forth on
Schedule 3.18. All premiums due on the Insurance have been paid by Seller.
Seller has not received, and has no knowledge of, any notice or request from any
insurance company or board of fire underwriters requesting the performance of
any work or alteration with respect to the Assets. Seller has received no notice
from any insurance company, nor is Seller aware, of any defects or inadequacies
in the Assets which, if not corrected, would result in the termination or
limitation of the Insurance or any increase in the cost of the Insurance.
(b) The Insurance is sufficient to replace (less any deductible
amount) the Branch Offices or any of the Assets which are damaged, destroyed or
lost prior to the Closing Date.
(c) The Insurance will be "occurrence" insurance, meaning that
Seller or such lessors, as the case may be, will have the enforceable right to
submit and pursue claims and receive proceeds under such insurance after the
Closing Date with respect to events occurring prior to the Closing Date
(d) Seller's rights under the Insurance can be assigned to
Purchaser without the consent of any person.
3.19 Condemnation; Special Assessments.
Except as set forth on Schedule 3.19 hereto, there are no
pending, or to the best of Seller's knowledge, contemplated,
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condemnation or similar proceedings or special assessments which would affect
any Fee Property or Leased Property or any part thereof in any way whatsoever.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser hereby represents and warrants to Seller as follows:
4.1. Corporate Organization and Powers.
(a) Purchaser is a New York chartered stock commercial bank, duly
organized, validly existing and in good standing under the laws of the State of
New York.
(b) Purchaser has the corporate power and authority to own, lease
or operate its properties and to carry on its business as presently conducted
and is duly qualified and in good standing to do business in each jurisdiction
in which the nature of its business or the ownership or leasing of its
properties makes such qualification necessary, except where the failure to be so
qualified would not, individually or in the aggregate with all other such
failures, have a material adverse effect on Purchaser's ability to consummate
the transactions contemplated hereby and perform its obligations hereunder.
(c) Purchaser's deposits are, subject to applicable monetary
limits established by law, insured by the SAIF and the Bank Insurance Fund of
the FDIC, and all premiums and assessments required in connection therewith have
been paid when due by Purchaser.
4.2 Corporate Authority; No Violation.
(a) Purchaser has the corporate power and authority to execute
and deliver this Agreement and any documents, agreements or instruments to be
executed by Purchaser pursuant to this Agreement, and to consummate the
transactions contemplated hereby and thereby. The execution and delivery of this
Agreement and any documents, agreements or instruments to be executed by
Purchaser pursuant to this Agreement, and the consummation of the transactions
con templated hereby and thereby, have been duly authorized by all necessary
corporate action on the part of Purchaser, and no further corporate
authorization on the part of Purchaser is necessary to approve this Agreement or
to consummate the transactions contemplated hereby. This Agreement has been duly
executed and delivered by Purchaser. Assuming the due authorization, execution
and delivery of this Agreement and of the other documents, agreements and
instruments to be delivered by Purchaser to Seller pursuant to this Agreement by
Seller, and except as enforcement may be limited by general principles of
equity, whether applied in a
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court of law or a court of equity, and by bankruptcy, insolvency and similar
laws affecting creditors' rights and remedies generally, (i) this Agreement
constitutes a legal, valid and binding obligation of Purchaser, enforceable
against Purchaser in accordance with its terms and (ii) the other documents,
agreements and instruments to be delivered by Purchaser to Seller pursuant to
this Agreement, when executed and delivered, will be duly executed and delivered
by Purchaser and will constitute legal, valid and binding obligations of
Purchaser.
(b) The execution and delivery by Purchaser of this Agreement or
any document, agreement or instrument to be executed by Purchaser pursuant to
this Agreement, the consummation by Purchaser of the transactions contemplated
hereby or thereby, and compliance by Purchaser with the terms or provisions
hereof or thereof, shall not result:
(i) in a violation of any provision of the
Charter or Bylaws of Purchaser,
(ii) in a violation of any statute, code,
ordinance, rule, regulation, judgment, order, writ, decree or
injunction applicable to Purchaser or any of its properties or
assets (including, without limitation, the Assets), except for
those violations which would not have, individually or in the
aggregate, a material adverse effect on Purchaser's ability to
consummate the transactions contemplated hereby and performance
obligation hereunder, or
(iii) in a violation of any note, bond, mortgage,
indenture, deed of trust, license, lease, agreement, or other
instrument or obligation to which Purchaser is a party or by
which Purchaser or any of the Assets may be bound or affected (a
"Purchaser Agreement"), except for those violations which would
not have, individually or in the aggregate, a material adverse
effect on Purchaser's ability to consummate the transactions
contemplated hereby and performance obligation hereunder.
4.3 Consents and Approvals.
(a) Except for the filing of applications and notices, as
applicable, with the FDIC, Office of Thrift Supervision ("OTS") and the New York
Banking Department, and the approval of, or the expiration of waiting periods
relating to such applications and notices, as the case may be, Purchaser is not
required to obtain any consent, approval, order, authorization, registration,
declaration from, or to make any filing with, any Governmental Entity or any
other third party in connection with (a) Purchaser's execution and delivery of
this Agreement or any document, agreement or instrument to be executed pursuant
to this Agreement or (b) the
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consummation by Purchaser of the transactions contemplated hereby or thereby.
(b) As of the date of this Agreement, Purchaser knows of no
reason, specifically relating to its business or operations, why all of the
Requisite Regulatory Approvals shall not be obtained.
4.4 Litigation.
There is no action, suit, proceeding, at law or in equity, before
any court or arbitrator, or any governmental body, agency or official pending,
or, to Seller's knowledge, threatened against Seller, wherein an unfavorable
decision, ruling or finding would adversely affect (a) the validity or
enforceability of this Agreement or any document necessary to consummate the
transactions contemplated herein, (b) the consummation of the transactions
contemplated hereby, (c) any approval, consent or permission required to be
obtained by Purchaser hereunder, (d) the ability of Purchaser to perform its
obligations under this Agreement or, (e) the business, assets, liabilities or
operations of any of the Branch Offices.
4.5 Finders or Brokers.
Purchaser has not paid or agreed to pay any fee or commission to
any agent, broker, finder or other person for or on account of services rendered
as a broker or finder in connection with this Agreement or the transactions
covered and contemplated hereby.
4.6 Estimates, Projections and Other Predictions.
It is understood that any cost estimates, projections or other
predictions contained or referred to in any Exhibit or Schedule hereto or which
otherwise have been provided to Purchaser are not and shall not be deemed to be
representations or warranties of Seller. Purchaser acknowledges that there are
uncertainties inherent in attempting to make such estimates, projections and
other predictions, that Purchaser is familiar with such uncertainties, that
Purchaser is taking full responsibility for making its own evaluation of the
adequacy and accuracy of all estimates, projections and other predictions so
furnished to it, and that Purchaser shall have no claim against anyone with
respect thereto.
ARTICLE V
COVENANTS OF THE PARTIES
5.1 Business Obligations.
Except as set forth on Schedule 5.1, as otherwise provided
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in this Agreement, or as required by applicable law, between the date of this
Agreement and the Closing Date:
Seller shall:
(a) conduct the business of the Branch Offices and
the operations of Seller relating thereto in the ordinary course
of business, consistent with Seller's past practice and
applicable law, and consistent with prudent banking practice,
(b) maintain its books and records in accordance
with GAAP, and
(c) use its reasonable efforts to preserve, for
itself and Purchaser, its present business organization and the
goodwill of its customers and others with whom business
relationships exist.
(d) Except as may be required (x) to obtain the
Requisite Regulatory Approvals, (y) otherwise by a Governmental
Entity, or (z) to accomplish the transactions contemplated
hereby, with respect to the Branch Offices, the Deposits and the
Loans, Seller shall not, without the prior written consent of
Purchaser:
(i) Cause any Branch Office to engage
or participate in any material transaction or incur
or sustain any material obligation except in the
ordinary course of business;
(ii) Change its interest rate or fee
pricing policies, or materially alter the mix of
rate, terms and account types, in each case, as in
effect as of date of this Agreement, with respect
to Deposits at the Branch Offices other than in the
ordinary course of business and consistent with the
markets in which the Branch Offices operate and
promptly disclosed to Purchaser;
(iii) Cause the Branch Offices to
transfer to or receive from Seller's or any third
party's other operations or branches which are not
Branch Offices any (x) Loans or (y) Personal
Property, other than in the ordinary course of
business;
(vi) Cause the Branch Offices to
transfer to or receive from Seller's or any third
party's other operations or branches any Deposits,
except upon the unsolicited request of a depositor
in the ordinary course of business, or if such
deposit is pledged as security for a loan which is
not a
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Loan;
(v) Transfer, assign, encumber, or
otherwise dispose of or enter into any contract,
agreement, or understanding to transfer, assign,
encumber, or otherwise dispose of the Assets except
in the ordinary course of business or as
contemplated by this Agreement;
(vi) Increase the salary,
remuneration, or compensation of persons employed
at the Branch Offices other than normal increases
in accordance with Seller's customary policies as
in existence on the date hereof, or pay any
uncommitted bonus to any such employee other than
regular bonuses granted based on historical
practice of Seller;
(vii) Amend, terminate or modify any
of the terms of any Lease or Contract, or waive any
of the provisions thereof except in the ordinary
course of business;
(viii) Amend or modify the terms of
any Loan in any manner materially adverse to Seller
or Purchaser;
(ix) Open, close or relocate any
Branch Office, or transfer any employee to or from
a Branch Office (other than to or from another
Branch Office);
(x) Agree to do any of the foregoing.
5.2 Access.
(a) Between the date of this Agreement and the Closing Date,
Seller shall provide Purchaser and its authorized representatives access, upon
reasonable notice and during normal business hours, to copies of Seller's
confidential, proprietary and non-public information ("Confidential
Information") except the Confidential Information that Seller is by law not
permitted to disclose, including without limitation Seller's books, records,
contracts, documents, Loan files, and other information of or relating to the
Branch Offices.
(b) Purchaser's investigations shall be conducted in a manner
which does not unreasonably interfere with Seller's normal operations,
customers, and employee relations. Seller shall, and shall cause its employees
to, cooperate with and assist Purchaser to perform said investigations. No
investigation conducted by the Purchaser pursuant to this Agreement shall affect
any of Seller's representations, warranties, covenants or agreements made in
this
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Agreement.
(c) All of Seller's Confidential Information shall be treated as
and remain the sole property of Seller. If the transactions contemplated by this
Agreement do not occur, Purchaser and its representatives shall return to
Seller, or destroy, all of Seller's Confidential Information, and all documents,
notes, summaries and other materials that contain, refer to, or are derived from
such Confidential Information; Purchaser shall certify to the return or
destruction of such Confidential Information.
(d) Purchaser shall keep confidential and not disclose any of
Seller's Confidential Information. Purchaser shall not directly or indirectly
use Seller's Confidential Information for any purpose other than the
consummation of this Agreement.
(e) Purchaser's obligations to keep confidential and to not
disclose Seller's Confidential Information shall continue for five years from
the date of the transactions contemplated by this Agreement are consummated or
abandoned and shall not apply to any information which was (i) in Purchaser's
possession prior to its disclosure by Seller or (ii) generally known to the
public, or (iii) rightfully disclosed to Purchaser by a third party not bound by
an obligation of confidentiality. It is further agreed that, if in the absence
of a protective order or the receipt of a waiver hereunder Purchaser is
nonetheless, in the opinion of its counsel, compelled to disclose information
concerning Seller to any tribunal or Governmental Entity or else stand liable
for contempt or suffer other censure or penalty, Purchaser may disclose such
information to such tribunal or governmental body or agency without liability
hereunder.
(f) Upon receipt of all of the Requisite Regulatory Approvals
other than the expiration of any statutory waiting period relating thereto, and
upon notice to Seller of a proposed Closing Date, Purchaser may communicate
with, and deliver information, brochures, bulletins, press releases, and other
communications to, depositors, Loan borrowers and other customers of the Branch
Offices concerning (i) the transactions contemplated by this Agreement and (ii)
the business and operations of Purchaser. The communications described
hereinabove must be made with Seller's prior written consent (which consent
shall not be unreasonably withheld) and shall be made at Purchaser's sole cost
and expense. Seller, if so requested by Purchaser, shall on behalf and at the
sole cost and expense of Purchaser, furnish such information and communications
to depositors, Loan borrowers, and other customers of the Branch Offices in a
commercially reasonable manner.
(g) Except as may be required in connection with the obtaining of
the Requisite Regulatory Approvals or as required by applicable law, Purchaser
shall not disclose to any person, including to employees of the Branch Offices,
the possible closing
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of any of the Branch Offices prior to the Closing Date.
5.3 Legal and Regulatory Matters.
With respect to the making of filings to any Governmental Entity
or third party:
(a) Seller and Purchaser shall cooperate with each other and use
their best efforts to promptly prepare and file all necessary documentation; to
effect all applications, notices, petitions and filings; and to promptly obtain
all permits, consents, approvals, waivers and authorizations of all third
parties and Governmental Entities which are necessary or advisable to consummate
the transactions contemplated by this Agreement.
(b) Within 30 days after the execution of this Agreement, Seller
and Purchaser shall each file with the appropriate Governmental Entities all the
applications for the Requisite Regulatory Approvals, consents, permits and
authorizations which such party is required to obtain in connection with the
consummation of the transactions contemplated by this Agreement.
(c) Subject to the applicable laws relating to the exchange of
information, Seller and Purchaser shall consult with each other and exchange
information in order to obtain all the permits, consents, approvals and
authorizations that are necessary or advisable to consummate the transactions
contemplated by this Agreement from all third parties and Governmental Entities.
(d) Seller and Purchaser will keep the other party apprised of
the status of all applications and filings.
(e) Except for any confidential portions thereof, the party
responsible for making a filing shall promptly (i) provide a copy of the filing,
and any supplement, amendment or item of additional information in connection
with the filing, to the other party and (ii) deliver to the other party a copy
of each material notice, order, opinion and other item of correspondence
received by it from any Governmental Entity in respect of any such filing whose
consent or approval is required for consummation of the transactions
contemplated by this Agreement.
(f) Purchaser and Seller shall promptly advise each other of any
communication received from a Governmental Entity which causes such party to
believe that there is a reasonable likelihood that a Requisite Regulatory
Approval will not be obtained or that the receipt of such approval will be
materially delayed.
5.4 Payment of Liabilities.
From and after the Closing Date, Purchaser shall pay all properly
drawn checks, drafts and non-negotiable withdrawal orders
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timely presented to it (including without limitation those presented by mail,
over the counter, or through clearings) by depositors whose deposits or accounts
on which such items are drawn are Deposits. Payment of said items shall be made
without regard to whether the items are drawn on the check or draft forms
provided by Seller or by Purchaser. Further, Purchaser shall, in all other
respects, discharge, in the usual course of the banking business, the duties and
obligations of Seller with respect to the balances due and owing to the
depositors whose accounts are assumed by Purchaser. The obligations set forth in
this section shall be in addition to the Purchaser's obligations under Sections
2.3 and 2.4.
5.5 Interest Reporting.
From January 1 of the current calendar year through the Closing
Date, Seller shall report all interest credited to, interest withheld from, and
early withdrawal penalties charged to the Deposits. After the Closing Date and
through the end of the calendar year in which the Closing occurs, Purchaser
shall report all interest credited to, interest withheld from, and early
withdrawal penalties charged to the Deposits. Said reports shall be made to the
holders of the Deposits and to the applicable federal and state regulatory
agencies.
5.6 Transfer Fees.
(a) Except as set forth in Section 2.5, Seller and Purchaser
shall equally bear all fees incurred in connection with the obtaining of third
party consents for transfer of the Assets from Seller to Purchaser and the
assumption by Purchaser of the liabilities of Seller specified herein.
(b) Notwithstanding the foregoing, if any lessor requires an
increase in the amounts payable under any of the Leases as a condition to its
consent to the assumption of such Lease by Purchaser, Purchaser shall be solely
responsible for the payment of all such increases after the Closing. Seller
shall not negotiate or agree to any such increase without the consent of
Purchaser, which consent shall not be unreasonably withheld.
5.7 Reports.
(a) Subsequent to the Closing Date, Purchaser shall make all the
reports that are required to be made in the ordinary course of business to any
Governmental Entity or otherwise with respect to the Branch Offices, including
without limitation, federal, state and local income tax reporting of Retirement
Accounts, 1099 information returns and other required tax forms, and cash
transaction reports. Notwithstanding the foregoing, Purchaser's obligations with
respect to said reports shall only apply to the extent that any such reports
relate to matters occurring after the Closing Date.
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(b) Seller shall have the obligation to make all such reports
with respect to matters occurring on or prior to the Closing Date.
(c) All reports shall be made to the holders of accounts and to
the applicable federal, state and local regulatory agencies.
5.8 Branch Account Report.
As soon as practicable after the date of this Agreement, Seller
shall furnish Purchaser with a report of the Deposits as of the date of such
report (the "Branch Account Report") in form reasonably acceptable to Purchaser.
To the extent such information is maintained by Seller on its computer systems,
the Branch Account Report shall enumerate for each account constituting a
Deposit ("Branch Account"): (a) the address and taxpayer identification number
of the owner of the Branch Account, (b) the type of account, (c) the date the
Branch Account was opened, (d) the current interest rate paid on the Branch
Account, if any, (e) the balance of the Branch Account, and (f) the term and
maturity of any Branch Account that is a certificate of deposit or similar time
deposit. By 11:00 A.M. on the Tuesday preceding the Closing, Seller should
provide Purchaser with a Branch Account Report for the Friday preceding the
Closing.
5.9 General Notices to Depositors and Safe Deposit Box Owners.
---------------------------------------------------------
(a) Within five (5) business days following the receipt of all
Requisite Regulatory Approvals, Seller shall provide Purchaser with an
intermediate customer list of the accounts that are to be assumed by Purchaser
pursuant to this Agreement. The customer list shall contain information that is
accurate as of the month-end prior to the giving of the notice referred to in
Section 5.9(b) of this Agreement.
(b) Within five (5) Business Days following the receipt of all of
the Requisite Regulatory Approvals (other than the expiration of all statutory
waiting periods relating thereto), Seller shall notify the holders of the
Deposits that are to be assumed under this Agreement that, subject to
satisfaction of the conditions to closing contained herein, Purchaser will
assume the liability for the Deposits. Such notifications shall include notice
that Purchaser shall not continue services to depositors provided by Seller but
not routinely offered by Purchaser, as specified by Purchaser prior to the
giving of such notification. The notifications shall be based on the list
referred to in Section 5.9(a) of this Agreement and a listing maintained at the
Branch Offices of the new accounts opened since the date of such list. Seller
shall provide Purchaser with the documentation of such lists up to the date of
Seller's mailing. Prior to the Closing, Purchaser shall send notifications to
the appropriate holders setting out the details of its administration of the
assumed
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accounts. Each party shall obtain approval of its notification letter(s) from
the other party, and said approval shall not be unreasonably withheld. Each
party shall bear the cost of its own mailing.
(c) Within five (5) Business Days following the receipt of all of
the Requisite Regulatory Approvals (other than the expiration of all statutory
waiting periods relating thereto), Seller shall provide a notice to the owners
of each of the safe deposit boxes at the Branch Offices stating that Seller
shall assign to Purchaser the safe deposit agreements between Seller and each of
such parties on the Closing Date. The notice shall be made by a letter that is
mutually acceptable to Purchaser and Seller. Seller and Purchaser shall
cooperate with one another in order to transfer the Safe Deposit Box Assets from
Seller to Purchaser. As soon as practicable after the date of this Agreement,
Seller shall deliver copies of all safe deposit box lease forms currently used
in connection with the Safe Deposit Box business of the Seller.
(d) At least thirty (30) days before the Closing Date, Seller
shall prominently and continuously display a sign in each Branch Office stating
that the Branch Office will be closed on the Saturday following the Closing Date
and will not reopen until the following Monday (unless such Monday is a bank
holiday, in which case the sign will indicate that the Branch Office will reopen
the following Tuesday). The contents and form of the sign shall be subject to
Purchaser's prior approval, which shall not be unreasonably withheld. At a
mutually agreeable time on the Closing Date, Seller shall provide Purchaser and
their agents access to each Branch Office in order for Purchaser to take such
steps as are necessary to enable Purchaser to reopen such Branch Office on the
date described above as a functioning branch office of Purchaser.
5.10 Covenant Not to Compete.
(a) For a period of two (2) years following the Closing Date,
Seller shall not, and shall not allow any of its Affiliates to, directly or
indirectly solicit any deposit business of the Branch Offices, or establish or
maintain a branch office or other physical facility for the purpose of accepting
deposits within the Borough of Queens or the counties of Nassau or Suffolk (the
"Region").
(b) For two years following the Closing Date, Seller shall not,
and shall not allow any of its Affiliates to, (i) directly contact any customer
of the Branch Offices as of the Closing Date for the purpose of soliciting any
deposit or (ii) conduct general solicitations specifically targeted to such
customers.
(c) For two years following the Closing Date, Seller shall not,
and shall not allow any of its Affiliates to, solicit loans to any of the
Deposit customers of the Branch Offices, unless
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such customer is currently a secured real estate borrower.
(d) Notwithstanding the foregoing, Seller and its Affiliates may
(i) acquire any thrift or depositary institution, or the assets and/or
liabilities thereof, which conducts business in the Region (provided the
deposits of such thrift's or depository institution's retail branches located in
the Region do not exceed twenty-five percent of the total deposits of the thrift
or depository institution being acquired), (ii) conduct general solicitations
and mailings that are not specifically targeted to such customers (including
without limitation solicitations related to the mortgage banking and loan
origination business), and (iii) conduct solicitations and mailings to people
who are depositors at another branch of Seller that is not covered by this
Agreement (regardless of whether they are also customers of a Branch Office).
(e) The obligations of Seller created by this Section 5.10 are
referred to herein as the "Covenant Not To Compete".
5.11 Insurance.
Following execution of this Agreement until the Closing Date,
Seller shall maintain in full force and effect all of the Insurance listed in
Schedule 3.18.
5.12 Use of Names, Trademarks and Service Marks.
------------------------------------------
(a) Except for the trademarks set forth in Schedule 5.12, no
interest in or right to use any logo, name, trademark or service xxxx presently
or previously used by Seller is being conveyed pursuant to this Agreement.
(b) Purchaser agrees that from and after the Closing Date neither
it nor any of its affiliates (including the Branch Offices) will use the name
"First Nationwide Bank", "First Nationwide", or any similar name indicating
affiliation after the Closing with Seller or any of its affiliates, in
connection with any business or activity engaged in by Purchaser or any of its
affiliates, except that (x) for a period of three months after the Closing,
Purchaser may, with the prior consent of Seller (which consent shall not be
unreasonably withheld), refer to the Branch Offices and Assets in correspondence
with existing customers of Seller as "formerly known as First Nationwide Bank, A
Federal Savings Bank" or a similar designation and (y) Purchaser or its
Affiliates or advisers may make "tombstone" advertisements announcing
consummation of the transactions contemplated hereby.
(c) Promptly after the Closing Date, Purchaser shall commence the
removal of the trade names, names, service marks, logos, insignia, slogans,
emblems, symbols, designs, and other identifying characteristics ("Names"),
except the Names set forth on Schedule 5.12, from all premises, equipment,
signs, interior
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decor items, fixtures and furnishings, and from all printed materials and
related business literature associated with the Branch Offices and the Personal
Property acquired. The costs associated with such removal shall be at the sole
expense of the Purchaser and shall be completed not later than 30 days after the
Closing Date.
5.13 Additional Contracts.
(a) From the date of this Agreement until and through the Closing
Date, the parties shall take the following actions for any contract or group of
related contracts which are related to the operations of the Branch Offices or
the other operations that are the subject of this Agreement, and which are (i)
not related to the ordinary course of business of the Branch Offices or (ii)
expected to result in payments of more than $50,000 in any year or $25,000 in
the case of contracts which are not cancelable on 60 days or less notice without
cost or penalty (an "Additional Contract").
(b) Prior to entering into an Additional Contract, Seller shall
provide written notice to Purchaser of its intention to enter into the
Additional Contract and shall afford Purchaser reasonable access to the
documents relating thereto.
(c) By 12:00 p.m. of the tenth Business Date following notice by
Seller, Purchaser shall state to Seller its decision as to whether or not to
accept such Additional Contract. The failure by Purchaser to respond prior to
12:00 p.m. on such tenth Business Day shall be deemed an acceptance of such
Additional Contract.
(d) Any Additional Contracts accepted or deemed accepted by
Purchaser under this section, and any contract entered into by Seller subsequent
to the date hereof for which Seller is not required to notify Purchaser pursuant
to the terms of this section, shall be added to Schedule 2.1(a)(vi) and become
part of the Contracts to be assumed by Purchaser.
5.14 Updating Schedules.
On the Closing Date, Seller shall deliver to Purchaser updated
versions of all Schedules hereto with the latest information available to Seller
as of two (2) Business Days prior to the Closing Date. Within five (5) calendar
days after the Closing Date, Seller shall deliver to Purchaser final versions of
all Schedules covering all transactions through the close of business on the
Closing Date. No updating of schedules pursuant to this Section shall affect any
of Seller's representations, warranties, covenants or agreements in this
Agreement.
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5.15 General Conversion Matters.
Seller and Purchaser agree to terms, covenants and conditions
related to the conversion of the Branch Offices set forth in Exhibit B.
5.16 Intentionally Deleted.
5.17 Assistance Clause.
At the request of Purchaser, Seller shall execute and deliver
such instruments and take such action as may be reasonably necessary in order to
carry out the transactions contemplated by this Agreement. Without limiting the
generality of the foregoing, on and after the Closing Date, Seller shall use
reasonable efforts to assist Purchaser in the orderly transfer of the Assets and
Deposits.
5.18 Other Information.
From the date of this Agreement until the Closing Date, within 15
days following the end of each calendar month, Seller shall use reasonable
efforts to deliver to Purchaser those reports set forth on Schedule 5.18, or, in
the event such information is not reasonably available, such information as
shall be mutually agreed upon by Seller and Purchaser for each of the Branch
Offices.
5.19 Title to Assets.
At least three (3) business days prior to the Closing, Seller
shall deliver (i) for recordation on the Closing Date, executed and acknowledged
special warranty deeds with covenants against grantor's acts, and (ii)
assignments in form acceptable to Seller and Purchaser, by which Seller will
convey to Purchaser all of its right, title and interest, respectively, to each
of the Fee Properties and the Leased Properties.
ARTICLE VI
EMPLOYEE MATTERS
6.1 Employee Matters.
(a) As of the Closing Date, except for those Employees set forth
on Schedule 6.1, Purchaser shall offer to employ all of the Employees. Seller
shall pay, discharge and be responsible for (i) all salary, wages and claims
arising out of or relating to the employment of the Employees on or before the
Closing Date and (ii) any employee benefits (including, but not limited to,
accrued vacation, annual or long-term incentive program, 401(k) plan,
non-qualified deferred compensation plan and group health coverage continuation
pursuant to the Code) arising under Seller's employee
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benefit plans and employee programs on or prior to the close of business on the
Closing Date, including benefits with respect to claims incurred on or prior to
the close of business on the Closing Date but reported after the Closing Date.
After the Closing Date, Purchaser shall pay, discharge and be responsible for
all salary, wages, claims and benefits arising out of or relating to the
employment of the Employees by Purchaser after the Closing Date.
(b) Except as otherwise provided herein, for a period of twelve
(12) months following the Closing Date (or for such shorter period as Purchaser
shall employ an Employee), Purchaser shall pay each Employee a base salary and
benefits that is generally equivalent to but not less than, on an aggregate
dollar value basis, ninety-five (95) percent of the dollar value of the base
salary and reasonably quantifiable benefits (excluding retention plans) received
by such Employee from Seller immediately prior to the Closing Date (a
"Comparable Position"). In addition, Purchaser shall cause all Employees as of
the Closing Date to be eligible to participate, as of the next "entry date"
under any such plan that so limits the commencement of participation therein,
(i) in any holiday, sick leave, vacation pay, leave of absence or similar policy
of Purchaser in which similarly situated employees of Purchaser are generally
eligible to participate without duplication of benefits and (ii) in the
"employee welfare benefit plans" and "employee pension plans" (as defined in
Section 3 (1) and Section 3 (2) of ERISA, respectively) of Purchaser in which
similarly situated employees of Purchaser are generally eligible to participate.
Notwithstanding the foregoing, all Employees and their dependents shall be
covered immediately after the Closing (and shall not be excluded from coverage
on account of any pre-existing condition or actively-at-work requirement) under
any such plan that is a group health plan of Purchaser subject to Part 6 of
Title I of ERISA and under basic company-provided life or disability coverage.
For purposes of any seniority or length of service requirements, waiting
periods, vesting periods or differential benefits based on length of service in
any such plan or policy of Purchaser for which an Employee may be eligible after
the Closing, Purchaser shall ensure that service by such Employee with Seller
shall be deemed to have been service with Purchaser for all purposes under any
such plan or policy to the extent such service is credited by Seller under its
similar plans; provided that Purchaser shall not be required to treat an
Employee's service with Seller as service with Purchaser for purposes of
determining benefit accrual under any defined benefit plan maintained by
Purchaser.
(c) With respect to any Employee who declines employment with
Purchaser and who was not offered a Comparable Position with Purchaser or who is
terminated by Purchaser other than for "cause" within twelve (12) months
following the Closing Date, Purchaser shall provide to such Employee the
compensation and other benefits described on Schedule 6.1 hereof, provided,
however,
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that with respect to the Employees set forth on Schedule 6.1, Seller shall
promptly reimburse Purchaser for all costs incurred by Purchaser pursuant to
this section. In the event a right to reimbursement arises hereunder, Purchaser
shall promptly submit to Seller a claim for reimbursement setting forth the
Employee involved, the effective date of termination of employment of such
Employee, and the aggregate amount of the costs incurred by Purchaser for which
the Purchaser seeks reimbursement. Within five (5) calendar days of Seller's
receipt of such claim, Seller shall remit to Purchaser, in immediately available
funds, the amount of such claim.
(d) Except with the prior written consent of Purchaser, Seller
shall not for a period of one (1) year after the Closing Date solicit any
Employee to again become an employee of Seller or any of its affiliates. Seller
shall inform Purchaser of any Employee who resigns prior to the Closing Date,
within five (5) days of such resignation.
(e) If the transactions contemplated by this Agreement are not
consummated for any reason, Purchaser shall not solicit for hire any Employee
for a period of one (1) year from the date hereof.
(f) For each Employee, Seller shall use its reasonable efforts to
deliver to Purchaser copies of Seller's general employee benefit information,
staff lists that include title and hire date, all records relating to
withholding and payment of income and unemployment taxes (federal, state and
local) and FICA taxes (including, without limitation, Forms W-4, Forms I-9,
Employee's Withholding Allowance Certificate) with respect to wages paid by
Seller during the 1995 calendar year, and other employee records (including,
without limitation, performance reviews, pre-employment investigation and
background checks). Seller shall provide Purchaser with such information no
later than 30 days after the execution of this Agreement.
(g) Prior to the Closing Date, Purchaser shall interview all
Employees set forth on Schedule 6.1 who are interested in seeking employment
with Purchaser and deliver to Seller a confidential list setting forth those
Employees to which Purchaser intends to offer employment on the Closing Date
(the "Designated Employees") and the position to be offered to each Employee.
Notwithstanding anything herein to the contrary, Purchaser shall have no
obligation to offer employment to any of such Employees. Notwithstanding the
exception contained in this section, Purchaser's obligations with respect to
Employees contained in this section shall apply to each of the Designated
Employees who accepts employment with Purchaser as if such Designated Employees
were not set forth on Schedule 6.1.
(h) As soon as practicable following the Closing Date,
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Purchaser and Seller shall cooperate to transfer from Seller's 401(k) plan, as
applicable to Purchaser's 401(k) plan, the assets and liabilities in Seller's
401(k) plan attributable to the Employees.
(i) Seller shall promptly reimburse Purchaser for all costs
incurred by Purchaser with respect to any person on leave or disability on the
Closing Date who does not return to work within the six-month period after the
initial date of leave or disability.
6.2 Notice of Closing.
Except as necessary in order to obtain the Requisite Regulatory
Approvals or as required by law, prior to the Closing Date Purchaser shall not
give any notice or notification of the closing of any of the Branch Offices, or
that any Employees are not to be offered employment by Purchaser, or be
responsible for any such notice or notification or the communication of any such
information to any person.
ARTICLE VII
CERTAIN TAX MATTERS
7.1 Certain Tax Matters.
(a) Except as otherwise provided in this section hereof (relating
to Transfer Taxes), Seller shall be responsible for the payment of all Taxes
relating to the Assets for all taxable periods that end prior to the close of
business on the Closing Date. Responsibility for Taxes relating to the Assets
for all taxable periods which include (but do not end on) the Closing Date shall
be allocated between Purchaser and Seller in accordance with the method of
Section 164(d) of the Code, as amended. The party which has the primary
obligation to do so under applicable law shall file any Tax Return that is
required to be filed in respect of Taxes described in this section, and that
party shall pay the Taxes shown on such Tax Return and notify the other party in
writing of the other party's share of Taxes for which it is responsible, if any,
of the Taxes shown on such Tax Return and how such Taxes and share were
calculated, which the other party shall reimburse by wire transfer of
immediately available funds no later than ten days after receipt of such notice.
(b) Purchaser and Seller shall each pay one-half of all transfer,
recording, sales, use (including all bulk sales taxes) and other similar taxes
and fees (collectively, the "Transfer Taxes") arising out of or in connection
with the transactions effected pursuant to this Agreement. The party which has
the primary obligation to do so under applicable law shall file any Tax Return
that is required to be filed in respect of Taxes described
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in this section, and that party shall pay the Taxes shown on such Tax Return and
notify the other party in writing of the other party's share of Taxes for which
it is responsible, if any, of the Taxes shown on such Tax Return and how such
Taxes and share were calculated, which the other party shall reimburse by wire
transfer of immediately available funds no later than ten days after receipt of
such notice.
(c) Seller and the Purchaser shall provide each other
with such assistance as reasonably may be requested by either of them in
connection with (i) the preparation of any Tax Return, or (ii) any audit or
other examination by any taxing authority, or any judicial or administrative
proceedings relating to liability for Taxes. The party requesting assistance
hereunder shall reimburse the other party for reasonable out-of-pocket expenses
incurred in providing such assistance, provided, however, that no independent
contractors, such as accountants or attorneys, shall be consulted without the
written consent of the party requesting assistance, which consent shall not be
unreasonably withheld.
(d) Seller shall deliver to the Purchaser at the
Closing a true, correct and complete affidavit which meets the requirements of
Treasury Regulation Section 1.1445-2(b)(2) and which attests to Seller's
non-foreign status (the "FIRPTA Affidavit"). If Purchaser receives the FIRPTA
Affidavit at the Closing, Purchaser shall not withhold any of the consideration
paid to Seller under this agreement pursuant to Section 1445 of the Code (and
regulations thereunder).
ARTICLE VIII
OBLIGATIONS OF PARTIES ON THE CLOSING DATE
8.1 Closing Date/Closing.
(a) Except as otherwise hereinafter provided, the closing date
(the "Closing Date") shall be the second Friday upon which all conditions set
forth in this Agreement are satisfied or waived or such other date as may be
mutually agreeable to the parties hereto; provided, however, that unless
otherwise mutually agreed by the parties, the Closing Date shall not be prior to
January 1, 1996.
(b) The delivery of the instruments of assignment and transfer to
be delivered by Seller and payment by Seller of the amount set forth under this
Agreement, delivery of the instruments of assumption to be delivered by
Purchaser, and the other transactions herein contemplated to take place
concurrently with such deliveries, assumptions, and payments (the "Closing"),
shall take place on the Closing Date, at 1:00 P.M. Eastern Time, at the offices
of Seller, 000 Xxxx Xxxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx (or at such other time and
place as are agreed to by the parties), and
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all such deliveries, assumptions, and payments shall be effective as of the
close of business on the Closing Date.
(c) At the Closing, any funds to be paid on the Closing Date
shall be paid by wire transfer of immediately available funds on the Closing
Date as early as possible and, in any event, before 3:00 p.m. Eastern Standard
Time on the Closing Date, and, no effect shall be given to any assignment or
assumption by Seller or Purchaser contained in this Agreement until Seller's
wire transfer of funds is actually received on the Closing Date.
(d) Any deliveries, assignments, or transfers required under this
Agreement, other than the foregoing, shall be made at the time and date
specified in this Agreement (and where no time is specified, on or before the
close of business on the date specified) and in the manner and place specified
in this Agreement (or, where not specified, in the manner and place as may be
reasonably requested in writing by the party that is to receive such delivery,
assignment or transfer).
(e) The payment of the Final Transfer Amount, to the extent based
on any of the items to be reflected on the Post-Closing Schedule, shall be
determined as of the close of business on the Closing Date.
8.2 Obligations of Seller on the Closing Date.
-----------------------------------------
On the Closing Date, Seller shall:
(a) deliver to Purchaser the Records referred to in
Section 2.1(e), to the extent that any such Records are not located
at the Branch Offices; and
(b) execute, acknowledge and deliver to Purchaser (i) a
Xxxx of Sale substantially similar in form and substance to Exhibit C attached
hereto and made a part hereof, (ii) with respect to the Fee Properties, special
warranty deeds with covenants against grantor's acts and (iii) all such
endorsements, assignments, bills of sale, and other instruments of conveyance,
assignment and transfer as shall be reasonably necessary or advisable to
consummate the sale and transfer to Purchaser of the assets to be sold
hereunder.
8.3 Obligations of Purchaser on the Closing Date. On the Closing Date, Purchaser
shall execute, acknowledge and deliver to Seller an Instrument of Assumption of
Assumed Liabilities substantially similar in form and substance to Exhibit D
attached hereto and made a part hereof, and all such other instruments as shall
be reasonably necessary or advisable to consummate the sale and transfer of
assets to Purchaser and the assumption of Assumed Liabilities by Purchaser.
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ARTICLE IX
CONDITIONS TO EACH PARTY'S OBLIGATIONS
The obligations of the parties under this Agreement are to the
satisfaction, on or before the Closing Date, of the following conditions:
9.1 Approval of Governmental Authorities.
All regulatory approvals required to consummate the transactions
contemplated hereby shall have been obtained and remain in full force and
effect, and all applicable statutory waiting periods relating thereto shall have
expired (all such approvals and the expiration of all such waiting periods being
referred to herein as the "Requisite Regulatory Approvals").
9.2 No Injunctions or Restraints.
There shall be no order, injunction or decree issued by a court
or agency of competent jurisdiction or other legal restraint or prohibition (an
"Injunction") preventing the consummation of the transactions contemplated by
this Agreement in effect.
9.3 Illegality.
There shall be no statute, rule, regulation, order, injunction or
decree enacted, entered, promulgated or enforced by any Governmental Entity
which prohibits, restricts or makes illegal consummation of the transactions
contemplated by this Agreement.
ARTICLE X
CONDITIONS TO PURCHASER'S OBLIGATIONS
The obligations of Purchaser under this Agreement are subject to
the satisfaction or waiver, on or before the Closing Date, of the following
conditions:
10.1 Representations and Warranties True; Obligations Performed.
----------------------------------------------------------
(a) The representations and warranties made by Seller in this
Agreement shall be true and correct as of the date of this Agreement and (except
to the extent such representations and warranties speak as of an earlier date)
as of the Closing Date at and as though such representations and warranties were
made as of the Closing Date. The condition contained in this Section 10.1(a)
shall be deemed to have been satisfied even if such representations or
warranties are not true and correct unless the failure of any of the
representations or warranties to be so true and correct, individually or in the
aggregate, would have a Material Adverse Effect, and, nothing contained in this
section 10.1(a) shall be deemed to preclude, or otherwise limit, the right of
Purchaser to
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be indemnified for any breach of a representation or warranty by Seller in
accordance with the provisions of Article XII hereof.
(b) Seller shall have performed and complied in all material
respects with all obligations, covenants and agreements required by this
Agreement to be performed or complied with by it on or prior to the Closing
Date.
(c) Seller shall have delivered to Purchaser a certificate of an
executive officer of Seller, dated the Closing Date, certifying to the
fulfillment of the foregoing conditions.
10.2 Opinion of Counsel.
Purchaser shall have received an opinion of counsel for Seller,
dated the Closing Date, with respect to the matters set forth on Exhibit E
attached hereto.
10.3 No Pending Governmental Actions.
There shall be no pending proceeding, initiated by any
Governmental Entity, seeking an Injunction.
10.4 Consents.
All of the consents contemplated by Schedule 3.3 (other than
those contemplated by Section 9.1) shall have been obtained by Seller, except
for such third party consents the failure of which to obtain would not have a
Material Adverse Effect.
10.5 No Material Adverse Change.
Nothing shall have occurred or failed to occur subsequent to June
30, 1995, which shall have caused or shall reasonably be expected to cause a
material adverse change in the assets, liabilities, business, financial
condition or results of operations of the Branch Offices taken as a whole.
ARTICLE XI
CONDITIONS TO SELLER'S OBLIGATIONS
The obligations of Seller under this Agreement to be performed at
the Closing shall be subject to the satisfaction or waiver, on or before the
Closing Date, of the following conditions:
11.1 Representations and Warranties True; Obligations Performed.
------------------------------------ ---------------------
(a) The representations and warranties made by Purchaser in this
Agreement shall be true and correct as of the date of this Agreement and (except
to the extent such representations and
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warranties speak as of an earlier date) as of the Closing Date as though such
representations and warranties were made at and as of such date. Notwithstanding
the foregoing, the conditions contained in this Section 11.1(a) shall be deemed
to have been satisfied even if such representations or warranties are not true
and correct unless the failure of any of the representations or warranties to be
so true and correct, individually or in the aggregate, would have a material
adverse effect on Purchaser's ability to consummate the transactions
contemplated herein, and, nothing contained in this section 11.1(a) shall be
deemed to preclude, or otherwise limit, the right of Seller to be indemnified
for any breach of a representation or warranty by Purchaser in accordance with
the provisions of Article XII hereof).
(b) Purchaser shall have performed and complied in all material
respects with all obligations and agreements required by this Agreement to be
performed or complied with by it prior to or at the Closing Date.
(c) Purchaser shall have delivered to Seller a certificate of an
executive officer of Purchaser, dated the Closing Date, certifying to the
fulfillment of the foregoing conditions.
11.2 Opinion of Counsel.
Seller shall have received an opinion of counsel for Purchaser,
dated the Closing Date, with respect to the matters set forth on Exhibit F
attached hereto.
11.3 No Governmental Actions.
There shall be no pending proceeding, initiated by any
Governmental Entity, seeking an Injunction.
11.4 Consents.
All of the consents contemplated by Section 4.3 (other than those
contemplated by Section 9.1) shall have been obtained by Purchaser, except for
such third party consents the failure of which to obtain would not have a
material adverse effect on Purchaser's ability to consummate the transactions
contemplated herein.
ARTICLE XII
INDEMNIFICATION
12.1 Seller to Indemnify.
Seller agrees to indemnify, hold harmless and defend Purchaser,
and Purchaser's directors, officers, subsidiaries, successors and assigns, and
"Affiliates", as such term is defined
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in Rule 12b-2 under the Securities Exchange Act of 1934, as amended
(collectively, the "Purchaser's Indemnified Parties"), on an after tax basis,
from and against any and all claims, losses, liabilities, costs and expenses,
including legal fees and expenses, damages, expenditures, proceedings,
judgments, awards, demands and obligations to third parties ("Losses") of any
kind whatsoever which may at any time be incurred by, imposed upon, or asserted
or awarded against Purchaser's Indemnified Parties that (it being agreed that
solely for purposes of establishing whether any matter is indemnifiable pursuant
to this clause (a), the accuracy of the representations and warranties made by
Seller in this Agreement shall be determined without giving effect to any
qualifications concerning knowledge contained in the representations and
warranties set forth in Section 3.9, and any qualifications concerning Material
Adverse Effect contained in the representations set forth in Section 3.9, and
such representations and warranties shall be tested as if such qualifications
were not included therein);
(a) arise out of or result from the breach or inaccuracy of any
representation or warranty made by Seller in this Agreement (which shall include
the Exhibits and Schedules attached hereto) or any certificate delivered to
Purchaser hereunder,
(b) arise out of or result from any breach or failure to
comply with any covenant made by Seller in this Agreement,
(c) arise out of or result from or are based upon (i) any
Excluded Asset and any asset other than the Assets or (ii) any Excluded
Liability,
(d) is a claim, liability, obligation or penalty related to the
Deposits transferred pursuant to this Agreement arising out of or relating to
Seller's preparation or submission (or failure to prepare or submit) of the
information, returns or reports required by applicable laws with respect to
periods prior to the Closing Date, except, to the extent that such claim,
liability or obligation is caused by Purchaser's negligence,
(e) is a claim, liability, obligation, Tax, contract or
commitment arising out of or relating to any of the Assets, the Branch Offices,
or Seller or its business or operations, except to the extent specifically
assumed by Purchaser hereunder,
(f) is a claim or liability asserted by any former employee of
Seller relating to any condition which existed in the Branch Offices during the
time that Seller operated such Branch Offices and Seller employed such employee,
or
(g) is a claim or liability arising out of Seller's failure to
properly record accrued interest on the Deposits prior to the Closing Date.
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12.2 Purchaser to Indemnify.
Purchaser agrees to indemnify, hold harmless and defend Seller,
and Seller's directors, officers, subsidiaries, successors and assigns, and
Affiliates (collectively, the "Seller's Indemnified Parties"), on an after tax
basis, from and against any and all Losses of any kind whatsoever which may at
any time be incurred by, imposed upon, or asserted or awarded against the
Seller's Indemnified Parties that:
(a) arise out of or result from the breach or inaccuracy of any
representation or warranty made by Purchaser in this Agreement (which shall
include the Exhibits and Schedules attached hereto) or any certificate delivered
to Seller hereunder,
(b) arise out of or result from any breach or failure to
comply with any covenant made by Purchaser in this Agreement,
(c) is sustained or incurred by the Seller's Indemnified Parties
by reason of any failure of the Purchaser to pay, perform or otherwise discharge
the Assumed Liabilities,
(d) is based upon any action taken or omitted to be taken by
Purchaser subsequent to the Closing Date or (except to the extent specifically
otherwise provided herein) results from or arises in connection with any
transaction or event occurring subsequent to the Closing Date unless such Loss
arises out of or results from the failure of Seller to deliver on the Closing
Date to the Purchaser all applicable Records relating to such Loss which are
requested in writing on or prior to the Closing Date, or
(e) is for any exit or entrance fees payable to the FDIC as a
result of the consummation of the transactions contemplated hereby.
12.3 Procedure for Indemnification.
(a) If a party entitled to be indemnified under this Agreement
(an "Indemnitee") receives notice of the assertion by an unaffiliated third
party (a "Third Party") of any claim or potential liability or of the
commencement by any such person of any action or proceeding (a "Third Party
Claim") with respect to which another party hereto (an "Indemnifying Party") is
obligated to provide indemnification, the Indemnitee shall give the Indemnifying
Party prompt notice thereof after becoming aware of such Third Party Claim. Such
notice shall describe the Third Party Claim in reasonable detail and shall
indicate the amount (estimated if necessary) of the Loss that has been or may be
sustained by the Indemnitee. Such notice shall be a condition precedent to any
liability of the Indemnifying Party for any Third Party Claim under the
provisions for indemnification contained in this Agreement; provided, however,
that the failure of the Indemnitee to give
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prompt notice to the Indemnifying Party of such Third Party Claim shall
adversely affect the Indemnitee's rights to indemnification hereunder solely to
the extent that such failure prejudices the Indemnifying Party in the defense of
such Third Party Claim.
(b) The Indemnifying Party may elect to compromise or defend, at
such Indemnifying Party's own expense and by such Indemnifying Party's own
counsel, any Third Party Claim. If the Indemnifying Party elects to compromise
or defend such Third Party Claim, it shall, within 30 days after receiving
notice of the Third Party Claim, notify the Indemnitee of its intent to do so,
and the Indemnitee shall cooperate, at the expense of the Indemnifying Party, in
the compromise of, or defense against, such Third Party Claim. If the
Indemnifying Party elects not to compromise or defend against the Third Party
Claim, or fails to notify the Indemnitee of its election as herein provided, or
otherwise abandons the defense of such Third Party Claim, (i) the Indemnitee may
pay (without prejudice of any of its rights as against the Indemnifying Party),
compromise or defend such Third Party Claim and (ii) the costs and expenses of
the Indemnitee incurred in connection therewith shall be indemnifiable by the
Indemnifying Party pursuant to the terms of this Agreement.
(c) In addition, in connection with any Third Party Claim in
which the Indemnitee shall reasonably conclude, based upon an opinion of its
counsel, that (i) there is a conflict of interest between the Indemnifying Party
and the Indemnitee in the conduct of the defense of such Third Party Claim or
(ii) there are specific defenses available to the Indemnitee which are different
from or additional to those available to the Indemnifying Party and which could
be materially adverse to the Indemnifying Party, then the Indemnitee shall have
the right to retain separate counsel in connection with such Third Party Claim.
In such an event, the Indemnifying Party shall pay the reasonable fees and
disbursements of counsel to each of the Indemnifying Party and the Indemnitee.
(d) Notwithstanding the foregoing, neither the Indemnifying Party
nor the Indemnitee may settle or compromise any claim (unless the sole relief
payable to a Third Party in respect of such Third Party Claim is monetary
damages that are paid in full by the party settling or compromising such claim)
over the objection of the other, provided, however, that consent to settlement
or compromise shall not be unreasonably withheld.
(e) In any event, except as otherwise provided herein, the
Indemnitee and the Indemnifying Party may each participate, at its own expense,
in the defense of such Third Party Claim.
(f) If the Indemnifying Party chooses to defend any claim, the
Indemnitee shall make available to the Indemnifying Party any personnel or any
books, records or other documents within its control that are reasonably
necessary or appropriate for such
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defense, subject to the receipt of appropriate confidentiality agreements.
(g) Notwithstanding anything to the contrary stated hereinabove
in this section, in the event prompt action is required with respect to the
defense of a Third Party Claim, the Indemnitee shall, subject to the terms and
conditions of this Article, have the right to assume the defense of such Third
Party Claim; provided, however, that in the event that the Indemnifying Party
subsequently elects to assume the defense of such Third Party Claim, then the
provisions set forth hereinabove shall be applicable and the Indemnifying Party
shall, subject to the terms and conditions of this Article, reimburse the
Indemnitee for any costs and expenses incurred by the Indemnitee prior to the
date the Indemnifying Party assumes control of such Third Party Claim.
(h) Notwithstanding the foregoing, if an offer of settlement or
compromise is received by or communicated to the Indemnifying Party with respect
to a Third Party Claim and the Indemnifying Party notifies the Indemnitee in
writing of the Indemnifying Party's willingness to settle or compromise such
Third Party Claim on the basis set forth in such notice and the Indemnitee
declines to accept such settlement or compromise, the Indemnitee may continue to
contest such Third Party Claim, free of any participation by the Indemnifying
Party, at the Indemnitee's sole expense. The obligation of the Indemnifying
Party to the Indemnitee with respect to such Third Party Claim shall be equal to
the lesser of (i) the amount of the offer of settlement or compromise which the
Indemnitee declined to accept plus the costs and expenses of the Indemnitee
prior to the date the Indemnifying Party notifies the Indemnitee of the
Indemnifying Party's willingness to settle or compromise such Third Party Claim
or (ii) the amount the Indemnitee is obligated to pay as a result of the
Indemnitee's continuing to contest such Third Party Claim including costs and
expenses with respect thereto; and the Indemnifying Party shall be entitled to
recover (by set-off or otherwise) from the Indemnitee any additional expenses
incurred by the Indemnifying Party as a result of the Indemnitee's decision to
continue to contest such Third Party Claim.
(i) Any claim on account of a Loss which does not involve a Third
Party Claim shall be asserted by a written notice given by the party claiming
indemnity to the party from which indemnity is claimed. The recipient of such
notice shall have a period of 30 days within which to respond thereto. If such
recipient does not respond within such 30-day period, such recipient shall be
deemed to have accepted responsibility to make payment, subject to the
provisions hereof, and shall have no further right to contest the validity of
such claim. If the recipient does respond within such 30-day period and rejects
such claim in whole or in part, the party claiming indemnity shall be free to
pursue such remedies as may be available to such party by
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applicable law.
(j) If the amount of any Loss shall, at any time subsequent to
payment of indemnification pursuant to this Agreement, be reduced by receipt of
insurance proceeds by the Indemnitee in respect of such Loss, the amount of such
reduction less any expenses incurred in connection therewith shall promptly be
repaid by the Indemnitee to the Indemnifying Party.
(k) Notwithstanding anything to the contrary contained in this
Agreement, no claim shall be made against Seller for indemnification under
Section 12.1(a) with respect to any Loss which any of Purchaser's Indemnified
Parties may suffer, incur or sustain unless the aggregate of all such Losses
described in Section l2.l(a) shall exceed $750,000, and Seller shall only be
required to pay or be liable for any such Losses described in Section l2.l(a) to
the extent that their aggregate amount exceeds $750,000, and then only with
respect to Losses incurred in excess of such amount, provided, however, that the
$750,000 limitation contained in this Section 12.3(k) shall not apply to, and
Purchaser's Indemnified Parties shall be entitled to dollar-for-dollar recovery
with respect to, Losses suffered, incurred or sustained which arise out of,
result from or are attributable to breaches of the representations contained in
Sections 3.5 and 3.12 hereof.
12.4 Production of Witnesses.
Following the Closing, each party shall use its best efforts to
make available to the other party, upon written request, its employees and
agents as witnesses to the extent that any such person may be reasonably
required in connection with any legal, administrative or other proceedings in
which the requesting party may from time to time be involved.
12.5 Survival.
No rights to indemnification with respect to breaches of the
representations and warranties of the parties contained in this Agreement shall
be asserted by any party unless notice thereof is given on or before the date
such representation or warranty no longer survives as provided in this Section
l2.5 (it being understood that such written notice may be delivered prior to the
incurrence or suffering of a Loss by an Indemnitee if the facts or occurrence
giving rise to such Loss occurred prior to the second anniversary described
above and the anticipated Loss is described with reasonable certainty in such
notice, in which case the party giving such notice shall be entitled to
indemnification in accordance with the provisions hereof notwithstanding that
such Loss may occur after the expiration of the applicable survival period). The
representations and warranties of Seller, on the one hand, and of Purchaser, on
the other hand, contained in this
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Agreement or in any certificate or instrument delivered pursuant to this
Agreement shall survive the Closing Date and shall expire on the second
anniversary of the Closing Date.
ARTICLE XIII
TERMINATION
13.1 Methods of Termination.
This Agreement may be terminated and the transactions
contemplated hereby may be abandoned at any time prior to the Closing:
(a) by mutual written consent of Seller and Purchaser;
(b) by either Seller or Purchaser, upon written notice
to the other, if the transactions contemplated by this Agreement are not
consummated on or before March 31, 1996 (the "Termination Date"), unless the
failure of such occurrence is due to the failure of the party seeking to
terminate this Agreement to perform or to observe the agreements set forth
herein at or before the Closing;
(c) by either Seller or Purchaser, upon written notice
to the other, if there is a material breach of an obligation of the other party
hereunder and such breach is not remedied within 30 days after receipt by such
breaching party of notice in writing from the non-breaching party, specifying
the nature of such breach and requesting that it be remedied;
(d) by either Seller or Purchaser, upon written notice
to the other, if any court or governmental authority of competent jurisdiction
issues a final unappealable order prohibiting consummation of any material
transaction contemplated hereby; or
(e) by either Seller or Purchaser, upon written notice
to the other, following the expiration of thirty (30) days after any
Governmental Entity shall have denied or refused to grant the approvals or
consents required to be obtained pursuant to this Agreement, unless within said
thirty (30) day period Purchaser and Seller agree to submit or resubmit an
application to, or appeal the decision of, the regulatory authority which denied
or refused to grant approval thereof.
13.2 Effect of Termination.
In the event of the termination and abandonment of this Agreement
pursuant to Section 13.1 hereof, this Agreement shall become void and have no
effect, without any liability on the part of any party to this Agreement or its
Affiliates, directors, officers or stockholders, other than the provisions of
this Section
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13.2, Section 14.4 and the confidentiality provisions of Section 5.2(e).
Notwithstanding the foregoing sentence, a termination of this Agreement shall
not defeat or impair the right of any party to pursue such relief as may
otherwise be available to it on account of any willful breach of this Agreement
or any of the representations, warranties, covenants or agreements contained in
this Agreement.
ARTICLE XIV
GENERAL PROVISIONS
14.1 Entire Agreement; Modification; Waiver.
This Agreement, including all Exhibits and Schedules hereto,
constitutes the entire agreement of the parties pertaining to the subject matter
contained herein and this Agreement supersedes all prior or contemporaneous
agreements, representations and understandings of the parties. No supplement,
modification or amendment to, or waiver of this Agreement shall be binding
unless executed in writing by Seller and Purchaser. No waiver of any provision
of this Agreement shall be deemed or shall constitute a waiver of any other
provision, whether or not similar, nor shall any waiver constitute a continuing
waiver.
14.2 Counterparts.
This Agreement may be executed in two or more counterparts, each
of which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
14.3 Headings.
The headings of the Sections, Articles, Exhibits and Schedules of
this Agreement are inserted for convenience only and shall not constitute a part
of this Agreement.
14.4 Payment of Expenses.
Except as otherwise provided in this Agreement, whether or not
the transactions contemplated hereby are consummated, all costs and expenses
incurred in connection with this Agreement and the transactions contemplated
hereby shall be paid by the party incurring such costs and expenses.
14.5 Governing Law.
This Agreement shall be governed by and construed in accordance
with the laws of the State of New York without giving effect to the principles
of conflict of laws thereof.
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14.6 Addresses of Notice, Etc.
All notices, requests, demands and other communications provided
for under this Agreement and under the related documents shall be in writing
(including telegraphic communication) and mailed (by registered or certified
mail, return receipt requested, or by Federal Express or other similar express
overnight delivery service), or telegraphed, or delivered to the applicable
party at the addresses indicated below.
If to Purchaser:
North Fork Bank
000 Xxxxx Xxxxxx Xxxx
Xxxxxxxx, Xxx Xxxx 00000
Attn: Xxxxxx X. Xxxxx, Executive Vice President and
Chief Financial Officer
With a copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx X. Xxxxxxxxxx, Esq.
If to Seller:
First Nationwide Bank, A Federal Savings Bank
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxx Xxxx, President
With a copy to:
First Nationwide Bank, A Federal Savings Bank
000 Xxxxxxxx Xx., Xxx. 0000
Xxxxxx, XX 00000
Attention: Xxxxxxxx X. Xxxxxxxx, General Counsel
or, to each party, at such other address that party designates in a written
notice to the other party in accordance with this section. All such notices,
requests, demands or other communications shall be deemed delivered (i) if sent
by messenger, upon personal delivery to the party to whom the notice is
directed, (ii) if sent by telecopier, upon electronic or telephonic confirmation
of receipt from the receiving telecopier machine, (iii) if sent by reputable
overnight courier, one (1) day after delivery to such courier, or (iv) if sent
by mail, three (3) days following deposit in the United States mail, postage
prepaid, certified mail, return receipt requested.
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14.7 Publicity.
Except as may be required by law or by the rules or regulations
of any Governmental Entity or securities exchange prior to the Closing Date,
neither party shall, directly or indirectly, make or cause to be made any public
announcement or disclosure, or issue any notice, relating to any of the
transactions contemplated by this Agreement, without the prior written consent
of the other party, which consent shall not be unreasonably withheld. Both
parties will limit the distribution of information relative to this transaction
to those persons who must be aware of the Agreement for the performance of their
duties.
14.8 Severability.
If any paragraph, section, sentence, clause, phrase, word or
covenant contained in this Agreement shall become illegal, null or void, or
against public policy, for any reason, or shall be held by any court of
competent jurisdiction to be illegal, null or void, or against public policy,
the remaining paragraphs, sections, sentences, clauses, phrases, words and
covenants contained in this Agreement shall not be affected.
14.9 Enforcement of the Agreement.
The parties agree that irreparable damage would occur in the
event that any of the provisions of this Agreement were not performed in
accordance with their specific terms or were otherwise breached. It is
accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions hereof in any court of the United States or any state
having jurisdiction, this being in addition to any other remedy to which they
are entitled at law or in equity.
14.10 Binding Nature; Assignment.
This Agreement shall be binding upon and inure to the benefit of
the parties hereto and their permitted successors and assigns. Neither party
shall assign or otherwise transfer any rights or obligations under this
Agreement without the express written consent of the other party; provided,
however, that either party may assign its rights or obligations under this
Agreement to any Affiliate of such party; provided, further, that no such
assignment shall relieve the assigning party of its obligations hereunder.
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14.11 No Third Party Rights.
This Agreement is not intended, nor shall it be construed, to
create any express or implied third party beneficiary rights in any person,
including present or former employees of Seller, the Employees, or any
beneficiaries or dependents thereof.
IN WITNESS WHEREOF, the parties have executed this Agreement as
of _________________, 1995.
SELLER:
FIRST NATIONWIDE BANK,
A FEDERAL SAVINGS BANK
By: /s/ Xxx Xxxx
---------------------------------
Name: Xxx Xxxx
---------------------------------
Title:
---------------------------------
PURCHASER:
NORTH FORK BANK
By: /s/ Xxxxxx X. Xxxxx
---------------------------------
Name: Xxxxxx X. Xxxxx
---------------------------------
Title: EVP & CFO
---------------------------------
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