PURCHASE AND ASSUMPTION AGREEMENT MODIFIED WHOLE BANK ALL DEPOSITS AMONG FEDERAL DEPOSIT INSURANCE CORPORATION, RECEIVER OF IRWIN UNION BANK AND TRUST COMPANY, COLUMBUS, INDIANA, FEDERAL DEPOSIT INSURANCE CORPORATION, AND FIRST FINANCIAL BANK,...
Exhibit
2.1
MODIFIED
WHOLE BANK
ALL
DEPOSITS
AMONG
FEDERAL
DEPOSIT INSURANCE CORPORATION,
RECEIVER
OF XXXXX UNION BANK AND TRUST COMPANY,
COLUMBUS,
INDIANA,
FEDERAL
DEPOSIT INSURANCE CORPORATION,
AND
FIRST
FINANCIAL BANK, NATIONAL ASSOCIATION
HAMILTON,
OHIO
DATED
AS OF
SEPTEMBER
18, 2009
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WHOLE
BANK
ALL
DEPOSITS
THIS AGREEMENT, made and
entered into as of the 18th day of
SEPTEMBER, 2009, by and among the FEDERAL DEPOSIT INSURANCE
CORPORATION, RECEIVER of XXXXX UNION BANK AND TRUST COMPANY, COLUMBUS, INDIANA
(the "Receiver"), FIRST
FINANCIAL BANK, organized under the laws of the United States of America,
and having its principal place of business in HAMILTON, OHIO (the "Assuming
Bank"), and the FEDERAL DEPOSIT
INSURANCE CORPORATION, organized under the laws of the United States of
America and having its principal office in Washington, D.C., acting in its
corporate capacity (the "Corporation").
WITNESSETH:
WHEREAS, on Bank Closing, the
Chartering Authority closed XXXXX UNION BANK AND TRUST
COMPANY (the "Failed Bank") pursuant to applicable law and the
Corporation was appointed Receiver thereof; and
WHEREAS, the Assuming Bank
desires to purchase certain assets and assume certain deposit and other
liabilities of the Failed Bank on the terms and conditions set forth in this
Agreement; and
WHEREAS, pursuant to 12 U.S.C.
Section 1823(c)(2)(A), the Corporation may provide assistance to the Assuming
Bank to facilitate the transactions contemplated by this Agreement, which
assistance may include indemnification pursuant to Article XII; and
WHEREAS, the Board of
Directors of the Corporation (the "Board") has determined to provide assistance
to the Assuming Bank on the terms and subject to the conditions set forth in
this Agreement; and
WHEREAS, the Board has
determined pursuant to 12 U.S.C. Section 1823(c)(4)(A) that such assistance is
necessary to meet the obligation of the Corporation to provide insurance
coverage for the insured deposits in the Failed Bank.
NOW THEREFORE, in
consideration of the mutual promises herein set forth and other valuable
consideration, the parties hereto agree as follows:
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DEFINITIONS
Capitalized
terms used in this Agreement shall have the meanings set forth in this Article
I, or elsewhere in this Agreement. As used herein, words imparting the singular
include the plural and vice versa.
"Accounting
Records" means
the general ledger and subsidiary ledgers and supporting schedules which support
the general ledger balances.
"Acquired
Subsidiaries"
means Subsidiaries of the Failed Bank acquired pursuant to Section
3.1.
"Affiliate" of any Person means any
director, officer, or employee of that Person and any other Person (i) who is
directly or indirectly controlling, or controlled by, or under direct or
indirect common control with, such Person, or (ii) who is an affiliate of such
Person as the term "affiliate" is defined in Section 2 of the Bank Holding
Company Act of 1956, as amended, 12 U.S.C. Section 1841.
"Agreement" means this Purchase and
Assumption Agreement by and among the Assuming Bank, the Corporation and the
Receiver, as amended or otherwise modified from time to time.
"Assets" means all assets of the
Failed Bank purchased pursuant to Section 3.1. Assets owned by Subsidiaries of
the Failed Bank are not "Assets" within the meaning of this
definition.
"Assumed
Deposits" means
Deposits.
"Bank
Closing" means
the close of business of the Failed Bank on the date on which the Chartering
Authority closed such institution.
“Bank
Premises” means
the banking houses, drive-in banking facilities, and teller facilities (staffed
or automated) together with appurtenant parking, storage and service facilities
and structures connecting remote facilities to banking houses, and land on which
the foregoing are located, that are owned or leased by the Failed Bank and that
have formerly been utilized, are currently utilized, or are intended to be
utilized in the future by the Failed Bank as shown on the Accounting Record of
the Failed Bank as of Bank Closing.
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"Book
Value" means,
with respect to any Asset and any Liability Assumed, the dollar amount thereof
stated on the Accounting Records of the Failed Bank. The Book Value of any item
shall be determined as of Bank Closing after adjustments made by the Receiver
for differences in accounts, suspense items, unposted debits and credits, and
other similar adjustments or corrections and for setoffs, whether voluntary or
involuntary. The Book Value of a Subsidiary of the Failed Bank acquired by the
Assuming Bank shall be determined from the investment in subsidiary and related
accounts on the "bank only" (unconsolidated) balance sheet of the Failed Bank
based on the equity method of accounting. Without limiting the generality of the
foregoing, (i) the Book Value of a Liability Assumed shall include all accrued
and unpaid interest thereon as of Bank Closing, and (ii) the Book Value of a
Loan shall reflect adjustments for earned interest, or unearned interest (as it
relates to the "rule of 78s" or add-on-interest loans, as applicable), if any,
as of Bank Closing, adjustments for the portion of earned or unearned
loan-related credit life and/or disability insurance premiums, if any,
attributable to the Failed Bank as of Bank Closing, and adjustments for Failed
Bank Advances, if any, in each case as determined for financial reporting
purposes. The Book Value of an Asset shall not include any adjustment for loan
premiums, discounts or any related deferred income, fees or expenses, or general
or specific reserves on the Accounting Records of the Failed Bank.
"Business
Day" means a day
other than a Saturday, Sunday, Federal legal holiday or legal holiday under the
laws of the State where the Failed Bank is located, or a day on which the
principal office of the Corporation is closed.
"Chartering
Authority" means
(i) with respect to a national bank, the Office of the Comptroller of the
Currency, (ii) with respect to a Federal savings association or savings bank,
the Office of Thrift Supervision, (iii) with respect to a bank or savings
institution chartered by a State, the agency of such State charged with primary
responsibility for regulating and/or closing banks or savings institutions, as
the case may be, (iv) the Corporation in accordance with 12 U.S.C. Section
1821(c), with regard to self appointment, or (v) the appropriate Federal banking
agency in accordance with 12 U.S.C. 1821(c)(9).
"Commitment" means the unfunded portion
of a line of credit or other commitment reflected on the books and records of
the Failed Bank to make an extension of credit (or additional advances with
respect to a Loan) that was legally binding on the Failed Bank as of Bank
Closing, other than extensions of credit pursuant to the credit card business
and overdraft protection plans of the Failed Bank, if any.
"Credit
Documents" mean
the agreements, instruments, certificates or other documents at any time
evidencing or otherwise relating to, governing or executed in connection with or
as security for, a Loan, including without limitation notes, bonds, loan
agreements, letter of credit applications, lease financing contracts, banker's
acceptances, drafts, interest protection agreements, currency exchange
agreements, repurchase agreements, reverse repurchase agreements, guarantees,
deeds of trust, mortgages, assignments, security agreements, pledges,
subordination or priority agreements, lien priority agreements, undertakings,
security instruments, certificates, documents, legal opinions, participation
agreements and intercreditor agreements, and all amendments, modifications,
renewals, extensions, rearrangements, and substitutions with respect to any of
the foregoing.
"Credit
File" means all
Credit Documents and all other credit, collateral, or insurance documents in the
possession or custody of the Assuming Bank, or any of its Subsidiaries or
Affiliates, relating to an Asset or a Loan included in a Put Notice, or copies
of any thereof.
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"Data
Processing Lease"
means any lease or licensing agreement, binding on the Failed Bank as of Bank
Closing, the subject of which is data processing equipment or computer hardware
or software used in connection with data processing activities. A lease or
licensing agreement for computer software used in connection with data
processing activities shall constitute a Data Processing Lease regardless of
whether such lease or licensing agreement also covers data processing
equipment.
"Deposit" means a deposit as defined
in 12 U.S.C. Section 1813(l), including without limitation, outstanding
cashier's checks and other official checks and all uncollected items included in
the depositors' balances and credited on the books and records of the Failed
Bank; provided,
that the term
"Deposit" shall not include all or any portion of those deposit balances which,
in the discretion of the Receiver or the Corporation, (i) may be required to
satisfy it for any liquidated or contingent liability of any depositor arising
from an unauthorized or unlawful transaction, or (ii) may be needed to provide
payment of any liability of any depositor to the Failed Bank or the Receiver,
including the liability of any depositor as a director or officer of the Failed
Bank, whether or not the amount of the liability is or can be determined as of
Bank Closing.
"Equity
Adjustment" means
the dollar amount resulting by subtracting the Book Value, as of Bank Closing,
of all Liabilities Assumed under this Agreement by the Assuming Bank from the
purchase price, as determined in accordance with this Agreement, as of Bank
Closing, of all Assets acquired under this Agreement by the Assuming Bank, which
may be a positive or a negative number.
"Failed
Bank Advances"
means the total sums paid by the Failed Bank to (i) protect its lien position,
(ii) pay ad valorem taxes and hazard insurance, and (iii) pay credit life
insurance, accident and health insurance, and vendor's single interest
insurance.
"Fair
Market Value"
means (i)(a) “Market Value” as defined in the regulation prescribing the
standards for real estate appraisals used in federally related transactions, 12
C.F.R. § 323.2(g), and accordingly shall mean the most probable price which a
property should bring in a competitive and open market under all conditions
requisite to a fair sale, the buyer and seller each acting prudently and
knowledgeably, and assuming the price is not affected by undue stimulus.
Implicit in this definition is the consummation of a sale as of a specified date
and the passing of title from seller to buyer under conditions
whereby:
(1) Buyer
and seller are typically motivated;
(2) Both
parties are well informed or well advised, and acting in what they consider
their own best interests;
(3) A
reasonable time is allowed for exposure in the open market;
(4)
Payment is made in terms of cash in U.S. dollars or in terms of financial
arrangements comparable thereto; and
(5) The
price represents the normal consideration for the property sold unaffected by
special or creative financing or sales concessions granted by anyone associated
with the sale;
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as
determined as of Bank Closing by an appraiser chosen by the Assuming Bank from a
list of acceptable appraisers provided by the Receiver; any costs and fees
associated with such determination shall be shared equally by the Receiver and
the Assuming Bank, and (b) which, with respect to Bank Premises (to the extent,
if any, that Bank Premises are purchased utilizing this valuation method), shall
be determined not later than sixty (60) days after Bank Closing by an appraiser
selected by the Receiver and the Assuming Bank within seven (7) days after Bank
Closing; or (ii) with respect to property other than Bank Premises purchased
utilizing this valuation method, the price therefore as established by the
Receiver and agreed to by the Assuming Bank, or in the absence of such
agreement, as determined in accordance with clause (i)(a) above.
"First
Loss Tranche" means the dollar amount of liability that the Assuming Bank
will incur prior to the commencement of loss sharing, which is the sum of (i)
the Assuming Bank’s asset premium (discount) bid, as reflected on the Assuming
Bank’s bid form, plus (ii) the Assuming Bank’s Deposit premium bid, as reflected
on the Assuming Bank’s bid form, plus (iii) the Equity Adjustment. The First
Loss Tranche may be a positive or negative number.
"Fixtures"
means those leasehold improvements, additions, alterations and installations
constituting all or a part of Bank Premises and which were acquired, added,
built, installed or purchased at the expense of the Failed Bank, regardless of
the holder of legal title thereto as of Bank Closing.
"Furniture
and Equipment"
means the furniture and equipment, other than motor vehicles, leased or owned by
the Failed Bank and reflected on the books of the Failed Bank as of Bank
Closing, including without limitation automated teller machines, carpeting,
furniture, office machinery (including personal computers), shelving, office
supplies, telephone, surveillance, security systems and artwork. Motor vehicles
shall be considered other assets and pass at Book Value.
"Indemnitees" means, except as provided in
paragraph (k) of Section 12.1, (i) the Assuming Bank, (ii) the Subsidiaries and
Affiliates of the Assuming Bank, including any Subsidiaries or Affiliates of the
Failed Bank that are or become Subsidiaries or Affiliates of the Assuming Bank,
and (iii) the directors, officers, employees and agents of the Assuming Bank and
its Subsidiaries and Affiliates who are not also present or former directors,
officers, employees or agents of the Failed Bank or of any Subsidiary or
Affiliate of the Failed Bank.
"Information
Package" means
the most recent compilation of financial and other data with respect to the
Failed Bank, including any amendments or supplements thereto, provided to the
Assuming Bank by the Corporation on the web site used by the Corporation to
market the Failed Bank to potential acquirers.
"Legal
Balance" means
the amount of indebtedness legally owed by an Obligor with respect to a Loan,
including principal and accrued and unpaid interest, late fees, attorneys' fees
and expenses, taxes, insurance premiums, and similar charges, if
any.
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"Liabilities
Assumed" has the
meaning provided in Section 2.1.
"Lien" means any mortgage, lien,
pledge, charge, assignment for security purposes, security interest, or
encumbrance of any kind with respect to an Asset, including any conditional sale
agreement or capital lease or other title retention agreement relating to such
Asset.
"Loans" means all of the following
owed to or held by the Failed Bank as of Bank Closing:
(i) loans
(including loans which have been charged off the Accounting Records of the
Failed Bank in whole or in part prior to March 31, 2009), participation
agreements, interests in participations, overdrafts of customers (including but
not limited to overdrafts made pursuant to an overdraft protection plan or
similar extensions of credit in connection with a deposit account), revolving
commercial lines of credit, home equity lines of credit, Commitments, United
States and/or State-guaranteed student loans, and lease financing
contracts;
(ii) all
Liens, rights (including rights of set-off), remedies, powers, privileges,
demands, claims, priorities, equities and benefits owned or held by, or accruing
or to accrue to or for the benefit of, the holder of the obligations or
instruments referred to in clause (i) above, including but not limited to those
arising under or based upon Credit Documents, casualty insurance policies and
binders, standby letters of credit, mortgagee title insurance policies and
binders, payment bonds and performance bonds at any time and from time to time
existing with respect to any of the obligations or instruments referred to in
clause (i) above; and
(iii) all
amendments, modifications, renewals, extensions, refinancings, and refundings of
or for any of the foregoing.
"Obligor" means each Person liable for
the full or partial payment or performance of any Loan, whether such Person is
obligated directly, indirectly, primarily, secondarily, jointly, or
severally.
"Other
Real Estate"
means all interests in real estate (other than Bank Premises and Fixtures),
including but not limited to mineral rights, leasehold rights, condominium and
cooperative interests, air rights and development rights that are owned by the
Failed Bank.
"Person" means any individual,
corporation, partnership, joint venture, association, joint-stock company,
trust, unincorporated organization, or government or any agency or political
subdivision thereof, excluding the Corporation.
"Primary
Indemnitor" means
any Person (other than the Assuming Bank or any of its Affiliates) who is
obligated to indemnify or insure, or otherwise make payments (including payments
on account of claims made against) to or on behalf of any Person in connection
with the claims covered under Article XII, including without limitation any
insurer issuing any directors and officers liability policy or any Person
issuing a financial institution bond or banker's blanket bond.
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“Proforma” means producing a balance
sheet that reflects a reasonably accurate financial statement of the Failed bank
through the date of closing. The Proforma financial statements serve as a basis
for the opening entries of both the Assuming Bank and the Receiver.
"Put
Date" has the
meaning provided in Section 3.4.
"Put
Notice" has the
meaning provided in Section 3.4.
"Qualified
Financial Contract" means a qualified financial
contract as defined in 12 U.S.C. Section 1821(e)(8)(D).
"Record" means any document,
microfiche, microfilm and computer records (including but not limited to
magnetic tape, disc storage, card forms and printed copy) of the Failed Bank
generated or maintained by the Failed Bank that is owned by or in the possession
of the Receiver at Bank Closing.
"Related
Liability" with
respect to any Asset means any liability existing and reflected on the
Accounting Records of the Failed Bank as of Bank Closing for (i) indebtedness
secured by mortgages, deeds of trust, chattel mortgages, security interests or
other liens on or affecting such Asset, (ii) ad valorem taxes applicable to such
Asset, and (iii) any other obligation determined by the Receiver to be directly
related to such Asset.
"Related
Liability Amount"
with respect to any Related Liability on the books of the Assuming Bank, means
the amount of such Related Liability as stated on the Accounting Records of the
Assuming Bank (as maintained in accordance with generally accepted accounting
principles) as of the date as of which the Related Liability Amount is being
determined. With respect to a liability that relates to more than one asset, the
amount of such Related Liability shall be allocated among such assets for the
purpose of determining the Related Liability Amount with respect to any one of
such assets. Such allocation shall be made by specific allocation, where
determinable, and otherwise shall be pro rata based upon the dollar amount of
such assets stated on the Accounting Records of the entity that owns such
asset.
"Repurchase
Price" means,
with respect to any Loan the Book Value, adjusted to reflect changes to Book
Value after Bank Closing, plus (i) any advances and interest on such Loan after
Bank Closing, minus (ii) the total of amounts received by the Assuming Bank for
such Loan, regardless of how applied, after Bank Closing, plus (iii) advances
made by Assuming Bank, plus (iv) total disbursements of principal made by
Receiver that are not included in the Book Value.
"Safe
Deposit Boxes"
means the safe deposit boxes of the Failed Bank, if any, including the removable
safe deposit boxes and safe deposit stacks in the Failed Bank's vault(s), all
rights and benefits under rental agreements with respect to such safe deposit
boxes, and all keys and combinations thereto.
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"Settlement
Date" means the
first Business Day immediately prior to the day which is one hundred eighty
(180) days after Bank Closing, or such other date prior thereto as may be agreed
upon by the Receiver and the Assuming Bank. The Receiver, in its discretion, may
extend the Settlement Date.
"Settlement
Interest Rate"
means, for the first calendar quarter or portion thereof during which
interest accrues, the rate determined by the Receiver to be equal to the
equivalent coupon issue yield on twenty-six (26)-week United States Treasury
Bills in effect as of Bank Closing as published in The Wall Street Journal; provided, that if no such
equivalent coupon issue yield is available as of Bank Closing, the equivalent
coupon issue yield for such Treasury Bills most recently published in The Wall Street Journal prior to Bank
Closing shall be used. Thereafter, the rate shall be adjusted to the rate
determined by the Receiver to be equal to the equivalent coupon issue yield on
such Treasury Bills in effect as of the first day of each succeeding calendar
quarter during which interest accrues as published in The Wall Street Journal.
"Subsidiary" has the meaning set forth in
Section 3(w)(4) of the Federal Deposit Insurance Act, 12 U.S.C. Section
1813(w)(4), as amended.
ASSUMPTION
OF LIABILITIES
2.1 Liabilities
Assumed by Assuming Bank. The Assuming Bank expressly
assumes at Book Value (subject to adjustment pursuant to Article VIII) and
agrees to pay, perform, and discharge all of the following liabilities of the
Failed Bank as of Bank Closing, except as otherwise provided in this Agreement
(such liabilities referred to as "Liabilities Assumed"):
(a) Assumed
Deposits, except those Deposits specifically listed on Schedule 2.1(a); provided, that as to any
Deposits of public money which are Assumed Deposits, the Assuming Bank agrees to
properly secure such Deposits with such of the Assets as appropriate which,
prior to Bank Closing, were pledged as security therefor by the Failed Bank, or
with assets of the Assuming Bank, if such securing Assets, if any, are
insufficient to properly secure such Deposits;
(b) liabilities
for indebtedness secured by mortgages, deeds of trust, chattel mortgages,
security interests or other liens on or affecting any Assets, if any; provided, that the assumption
of any liability pursuant to this paragraph shall be limited to the market value
of the Assets securing such liability as determined by the
Receiver;
(c) borrowings
from Federal Reserve Banks and Federal Home Loan Banks, if any, provided, that the assumption
of any liability pursuant to this paragraph shall be limited to the market value
of the assets securing such liability as determined by the Receiver; and
overdrafts, debit balances, service charges, reclamations, and adjustments to
accounts with the Federal Reserve Banks as reflected on the books and records of
any such Federal Reserve Bank within ninety (90) days after Bank Closing, if
any;
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(d) ad
valorem taxes applicable to any Asset, if any; provided, that the assumption
of any ad valorem taxes pursuant to this paragraph shall be limited to an amount
equal to the market value of the Asset to which such taxes apply as determined
by the Receiver;
(e) liabilities,
if any, for federal funds purchased, repurchase agreements and overdrafts in
accounts maintained with other depository institutions (including any accrued
and unpaid interest thereon computed to and including Bank Closing); provided, that the assumption
of any liability pursuant to this paragraph shall be limited to the market value
of the Assets securing such liability as determined by the
Receiver;
(f) United
States Treasury tax and loan note option accounts, if any;
(g) liabilities
for any acceptance or commercial letter of credit (other than "standby letters
of credit" as defined in 12 C.F.R. Section 337.2(a)); provided, that the assumption
of any liability pursuant to this paragraph shall be limited to the market value
of the Assets securing such liability as determined by the
Receiver;
(h) duties
and obligations assumed pursuant to this Agreement including without limitation
those relating to the Failed Bank's credit card business, overdraft protection
plans, safe deposit business, safekeeping business or trust business, if
any;
(i) liabilities,
if any, for Commitments;
(j) liabilities,
if any, for amounts owed to any Subsidiary of the Failed Bank acquired under
Section 3.1;
(k) liabilities,
if any, with respect to Qualified Financial Contracts;
(l) duties
and obligations under any contract pursuant to which the Failed Bank
provides mortgage servicing for others, or mortgage servicing is provided to the
Failed Bank by others; and
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(m)
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all
asset-related offensive litigation liabilities and all asset-related
defensive litigation liabilities, but only to the extent such liabilities
relate to assets subject to a loss share agreement, and provided that all
other defensive litigation and any class actions with respect to credit
card business are retained by the
Receiver.
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Schedule
2.1 attached hereto and incorporated herein sets forth certain categories of
Liabilities Assumed and the aggregate Book Value of the Liabilities Assumed in
such categories. Such schedule is based upon the best information available to
the Receiver and may be adjusted as provided in Article VIII.
2.2 Interest
on Deposit Liabilities. The Assuming Bank agrees
that, from and after Bank Closing, it will accrue and pay interest on Deposit
liabilities assumed pursuant to Section 2.1 at a rate(s) it shall determine;
provided, that for
non-transaction Deposit liabilities such rate(s) shall not be less than the
lowest rate offered by the Assuming Bank to its depositors for non-transaction
deposit accounts. The Assuming Bank shall permit each depositor to withdraw,
without penalty for early withdrawal, all or any portion of such depositor's
Deposit, whether or not the Assuming Bank elects to pay interest in accordance
with any deposit agreement formerly existing between the Failed Bank and such
depositor; and further provided, that if such Deposit
has been pledged to secure an obligation of the depositor or other party, any
withdrawal thereof shall be subject to the terms of the agreement governing such
pledge. The Assuming Bank shall give notice to such depositors as provided in
Section 5.3 of the rate(s) of interest which it has determined to pay and of
such withdrawal rights.
2.3 Unclaimed
Deposits. Fifteen
(15) months following the Bank Closing Date, the Assuming Bank will provide the
Receiver a listing of all deposit accounts, including the type of account, not
claimed by the depositor. The Receiver will review the list and authorize the
Assuming Bank to act on behalf of the Receiver to send a “Final Legal Notice” to
the owner(s) of the unclaimed deposits reminding them of the need to claim or
arrange to continue their account(s) with the Assuming Bank. The Assuming Bank
will send the “Final Legal Notice” to the depositors within thirty (30) days
following notification of the Receiver’s authorization. The Assuming Bank will
prepare an Affidavit of Mailing and will forward the Affidavit of Mailing to the
Receiver after mailing out the “Final Legal Notice” to the owner(s) of unclaimed
deposit accounts.
If,
within eighteen (18) months after Bank Closing, any depositor of the Failed Bank
does not claim or arrange to continue such depositor’s Deposit assumed pursuant
to Section 2.1 at the Assuming Bank, the Assuming Bank shall, within fifteen
(15) Business Days after the end of such eighteen (18) month period, (i) refund
to the Receiver the full amount of each such deposit (without reduction for
service charges), (ii) provide to the Receiver a schedule of all such refunded
Deposits in such form as may be prescribed by the Receiver, and (iii) assign,
transfer, convey, and deliver to the Receiver, all right, title, and interest of
the Assuming Bank in and to the Records previously transferred to the Assuming
Bank and other records generated or maintained by the Assuming Bank pertaining
to such Deposits. During such eighteen (18) month period, at the request of the
Receiver, the Assuming Bank promptly shall provide to the Receiver schedules of
unclaimed deposits in such form as may be prescribed by the
Receiver.
2.4 Employee
Plans. Except as
provided in Section 4.12, the Assuming Bank shall have no liabilities,
obligations or responsibilities under the Failed Bank's health care, bonus,
vacation, pension, profit sharing, deferred compensation, 401K or stock purchase
plans or similar plans, if any, unless the Receiver and the Assuming Bank agree
otherwise subsequent to the date of this Agreement.
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PURCHASE
OF ASSETS
3.1 Assets
Purchased by Assuming Bank. With the exception of certain assets
expressly excluded in Sections 3.5 and 3.6, the Assuming Bank hereby purchases
from the Receiver, and the Receiver hereby sells, assigns, transfers, conveys,
and delivers to the Assuming Bank, all right, title, and interest of the
Receiver in and to all of the assets (real, personal and mixed, wherever located
and however acquired) including all subsidiaries, joint ventures, partnerships,
and any and all other business combinations or arrangements, whether active,
inactive, dissolved or terminated, of the Failed Bank whether or not reflected
on the books of the Failed Bank as of Bank Closing. Schedules 3.1 and 3.1a
attached hereto and incorporated herein sets forth certain categories of Assets
purchased hereunder. Such schedule is based upon the best information available
to the Receiver and may be adjusted as provided in Article VIII. Assets are
purchased hereunder by the Assuming Bank subject to all liabilities for
indebtedness collateralized by Liens affecting such Assets to the extent
provided in Section 2.1. The subsidiaries, joint ventures, partnerships, and any
and all other business combinations or arrangements, whether active, inactive,
dissolved or terminated being purchased by the Assuming Bank includes, but is
not limited to, the entities listed on Schedule 3.1a. Notwithstanding Section
4.8, the Assuming Bank specifically purchases all mortgage servicing rights and
obligations of the Failed Bank.
3.2 Asset
Purchase Price.
(a) All
Assets and assets of the Failed Bank subject to an option to purchase by the
Assuming Bank shall be purchased for the amount, or the amount resulting from
the method specified for determining the amount, as specified on Schedule 3.2,
except as otherwise may be provided herein. Any Asset, asset of the Failed Bank
subject to an option to purchase or other asset purchased for which no purchase
price is specified on Schedule 3.2 or otherwise herein shall be purchased at its
Book Value. Loans or other assets charged off the Accounting Records of the
Failed Bank prior to March 31, 2009 shall be purchased at a price of
zero.
(b) The
purchase price for securities (other than the capital stock of any Acquired
Subsidiary) purchased under Section 3.1 by the Assuming Bank shall be the market
value thereof as of Bank Closing, which market value shall be (i) the market
price for each such security quoted at the close of the trading day effective on
Bank Closing as published electronically by Bloomberg, L.P., or alternatively,
at the discretion of the Receiver, IDC/Financial Times (FT) Interactive Data;
(ii) provided,
that if such
market price is not available for any such security, the Assuming Bank will
submit a bid for each such security within three days of notification/bid
request by the Receiver (unless a different time period is agreed to by the
Assuming Bank and the Receiver) and the Receiver, in its sole discretion will
accept or reject each such bid; and (iii) further provided in the absence of an
acceptable bid from the Assuming Bank, each such security shall not pass to the
Assuming Bank and shall be deemed to be an excluded asset
hereunder.
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(c) Qualified
Financial Contracts shall be purchased at market value determined in accordance
with the terms of Exhibit 3.2(c). Any costs associated with such valuation shall
be shared equally by the Receiver and the Assuming Bank.
3.3 Manner of
Conveyance; Limited Warranty; Nonrecourse; Etc. THE CONVEYANCE OF ALL ASSETS,
INCLUDING REAL AND PERSONAL PROPERTY INTERESTS, PURCHASED BY THE ASSUMING BANK
UNDER THIS AGREEMENT SHALL BE MADE, AS NECESSARY, BY RECEIVER'S DEED OR
RECEIVER'S XXXX OF SALE, "AS IS", "WHERE IS", WITHOUT RECOURSE AND, EXCEPT AS
OTHERWISE SPECIFICALLY PROVIDED IN THIS AGREEMENT, WITHOUT ANY WARRANTIES
WHATSOEVER WITH RESPECT TO SUCH ASSETS, EXPRESS OR IMPLIED, WITH RESPECT TO
TITLE, ENFORCEABILITY, COLLECTIBILITY, DOCUMENTATION OR FREEDOM FROM LIENS OR
ENCUMBRANCES (IN WHOLE OR IN PART), OR ANY OTHER MATTERS.
3.4 Puts of
Assets to the Receiver.
(a) Puts
Prior to the Settlement Date.
(i)
During the period from Bank Closing to and including the Business Day
immediately preceding the Settlement Date, the Assuming Bank shall be entitled
to require the Receiver to purchase any Asset which the Assuming Bank can
establish is evidenced by forged or stolen instruments as of Bank Closing; provided, that, the Assuming
Bank shall not have the right to require the Receiver to purchase any such Asset
with respect to which the Assuming Bank has taken any action referred to in
Section 3.4(a)(ii) with respect to such Asset.
(ii) At
the end of the thirty (30)-day period following Bank Closing and at that time
only, in accordance with this Section 3.4, the Assuming Bank shall be entitled
to require the Receiver to purchase any remaining overdraft transferred to the
Assuming Bank pursuant to 3.1 which both was made after March 31, 2009 and was
not made pursuant to an overdraft protection plan or similar extension of
credit.
The
Assuming Bank shall transfer all such Assets to the Receiver without recourse,
and shall indemnify the Receiver against any and all claims of any Person
claiming by, through or under the Assuming Bank with respect to any such Asset,
as provided in Section 12.4.
(b) Notices
to the Receiver. In the event that the Assuming Bank elects to require
the Receiver to purchase one or more Assets, the Assuming Bank shall deliver to
the Receiver a notice (a "Put Notice") which shall include:
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a
list of all Assets that the Assuming Bank requires the Receiver to
purchase;
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(ii)
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a
list of all Related Liabilities with respect to the Assets identified
pursuant to (i) above; and
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(iii)
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a
statement of the estimated Repurchase Price of each Asset identified
pursuant to (i) above as of the applicable Put
Date.
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Such
notice shall be in the form prescribed by the Receiver or such other form to
which the Receiver shall consent. As provided in Section 9.6, the Assuming Bank
shall deliver to the Receiver such documents, Credit Files and such additional
information relating to the subject matter of the Put Notice as the Receiver may
request and shall provide to the Receiver full access to all other relevant
books and records.
(c) Purchase
by Receiver. The Receiver shall purchase Assets that are specified in the
Put Notice and shall assume Related Liabilities with respect to such Assets, and
the transfer of such Assets and Related Liabilities shall be effective as of a
date determined by the Receiver which date shall not be later than thirty (30)
days after receipt by the Receiver of the Put Notice (the "Put
Date").
(d) Purchase
Price and Payment Date. Each Asset purchased by the Receiver pursuant to
this Section 3.4 shall be purchased at a price equal to the Repurchase Price of
such Asset less the Related Liability Amount applicable to such Asset, in each
case determined as of the applicable Put Date. If the difference between such
Repurchase Price and such Related Liability Amount is positive, then the
Receiver shall pay to the Assuming Bank the amount of such difference; if the
difference between such amounts is negative, then the Assuming Bank shall pay to
the Receiver the amount of such difference. The Assuming Bank or the Receiver,
as the case may be, shall pay the purchase price determined pursuant to this
Section 3.4(d) not later than the twentieth (20th) Business Day following the
applicable Put Date, together with interest on such amount at the Settlement
Interest Rate for the period from and including such Put Date to and including
the day preceding the date upon which payment is made.
(e) Servicing. The Assuming Bank shall
administer and manage any Asset subject to purchase by the Receiver in
accordance with usual and prudent banking standards and business practices until
such time as such Asset is purchased by the Receiver.
(f) Reversals.
In the event that the Receiver purchases an Asset (and assumes the Related
Liability) that it is not required to purchase pursuant to this Section 3.4, the
Assuming Bank shall repurchase such Asset (and assume such Related Liability)
from the Receiver at a price computed so as to achieve the same economic result
as would apply if the Receiver had never purchased such Asset pursuant to this
Section 3.4.
3.5 Assets
Not Purchased by Assuming Bank. The Assuming Bank does not purchase,
acquire or assume, or (except as otherwise expressly provided in this Agreement)
obtain an option to purchase, acquire or assume under this
Agreement:
(a) any
financial institution bonds, banker's blanket bonds, or public liability, fire,
or extended coverage insurance policy or any other insurance policy of the
Failed Bank, or premium refund, unearned premium derived from cancellation, or
any proceeds payable with respect to any of the foregoing;
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(b) any
interest, right, action, claim, or judgment against (i) any officer, director,
employee, accountant, attorney, or any other Person employed or retained by the
Failed Bank or any Subsidiary of the Failed Bank on or prior to Bank Closing
arising out of any act or omission of such Person in such capacity, (ii) any
underwriter of financial institution bonds, banker's blanket bonds or any other
insurance policy of the Failed Bank, (iii) any shareholder or holding company of
the Failed Bank, or (iv) any other Person whose action or inaction may be
related to any loss (exclusive of any loss resulting from such Person's failure
to pay on a Loan made by the Failed Bank) incurred by the Failed Bank; provided, that for the purposes
hereof, the acts, omissions or other events giving rise to any such claim shall
have occurred on or before Bank Closing, regardless of when any such claim is
discovered and regardless of whether any such claim is made with respect to a
financial institution bond, banker's blanket bond, or any other insurance policy
of the Failed Bank in force as of Bank Closing;
(c) prepaid
regulatory assessments of the Failed Bank, if any;
(d) legal
or equitable interests in tax receivables of the Failed Bank, if any, including
any claims arising as a result of the Failed Bank having entered into any
agreement or otherwise being joined with another Person with respect to the
filing of tax returns or the payment of taxes;
(e) amounts
reflected on the Accounting Records of the Failed Bank as of Bank Closing as a
general or specific loss reserve or contingency account, if any;
(f) leased
or owned Bank Premises and leased or owned Furniture and Equipment and Fixtures
and data processing equipment (including hardware and software) located on
leased or owned Bank Premises, if any; provided, that the Assuming
Bank does obtain an option under Section 4.6, Section 4.7 or Section 4.8, as the
case may be, with respect thereto;
(g) owned
Bank Premises which the Receiver, in its discretion, determines may contain
environmentally hazardous substances;
(h) any
"goodwill," as such term is defined in the instructions to the report of
condition prepared by banks examined by the Corporation in accordance with 12
C.F.R. Section 304.4, and other intangibles;
(i) any
criminal restitution or forfeiture orders issued in favor of the Failed
Bank;
(j) reserved;
(k) assets
essential to the Receiver in accordance with Section 3.6; and
(l) all
private label asset-backed securities, including, but not limited to, those
listed on the attached Schedule 3.5(l);
(m) Nonperforming
loans;
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(n) acquisition,
development, and construction loans;
(o) Performing
commercial development land and residential land loans; and
(p) Other
Real Estate.
3.6 Retention
or Repurchase of Assets Essential to Receiver.
(a) The
Receiver may refuse to sell to the Assuming Bank, or the Assuming Bank agrees,
at the request of the Receiver set forth in a written notice to the Assuming
Bank, to assign, transfer, convey, and deliver to the Receiver all of the
Assuming Bank's right, title and interest in and to, any Asset or asset
essential to the Receiver as determined by the Receiver in its discretion
(together with all Credit Documents evidencing or pertaining thereto), which may
include any Asset or asset that the Receiver determines to be:
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made
to an officer, director, or other Person engaging in the affairs of the
Failed Bank, its Subsidiaries or Affiliates or any related entities of any
of the foregoing;
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(ii)
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the
subject of any investigation relating to any claim with respect to any
item described in Section 3.5(a) or (b), or the subject of, or potentially
the subject of, any legal
proceedings;
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(iii)
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made
to a Person who is an Obligor on a loan owned by the Receiver or the
Corporation in its corporate capacity or its capacity as receiver of any
institution;
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(iv)
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secured
by collateral which also secures any asset owned by the Receiver;
or
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(v)
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related
to any asset of the Failed Bank not purchased by the Assuming Bank under
this Article III or any liability of the Failed Bank not assumed by the
Assuming Bank under Article II.
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(b) Each
such Asset or asset purchased by the Receiver shall be purchased at a price
equal to the Repurchase Price thereof less the Related Liability Amount with
respect to any Related Liabilities related to such Asset or asset, in each case
determined as of the date of the notice provided by the Receiver pursuant to
Section 3.6(a). The Receiver shall pay the Assuming Bank not later than the
twentieth (20th) Business Day following receipt of related Credit Documents and
Credit Files together with interest on such amount at the Settlement Interest
Rate for the period from and including the date of receipt of such documents to
and including the day preceding the day on which payment is made. The Assuming
Bank agrees to administer and manage each such Asset or asset in accordance with
usual and prudent banking standards and business practices until each such Asset
or asset is purchased by the Receiver. All transfers with respect to Asset or
assets under this Section 3.6 shall be made as provided in Section 9.6. The
Assuming Bank shall transfer all such Asset or assets and Related Liabilities to
the Receiver without recourse, and shall indemnify the Receiver against any and
all claims of any Person claiming by, through or under the Assuming Bank with
respect to any such Asset or asset, as provided in Section 12.4.
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ASSUMPTION
OF CERTAIN DUTIES AND OBLIGATIONS
The
Assuming Bank agrees with the Receiver and the Corporation as
follows:
4.1 Continuation
of Banking Business. For the period commencing the first banking Business
Day after Bank Closing and ending no earlier than the first anniversary of Bank
Closing, the Assuming Bank will provide full service banking in the trade area
of the Failed Bank. The Assuming Bank may cease providing such banking services
itself, in the trade area of the Failed Bank, provided the Assuming Bank has
received all necessary regulatory approvals, and another financial institution
commences providing such banking services. At the option of the Assuming Bank,
such banking services may be provided at any or all of the Bank Premises, or at
other premises within such trade area. The trade area shall be determined by the
Receiver. For the avoidance of doubt, the foregoing shall not restrict the
Assuming Bank from opening, closing, or selling branches upon receipt of the
necessary regulatory approvals, if the Assuming Bank or its successors continue
to provide banking services in the trade area. Assuming Bank will pay to the
Receiver, upon the sale of a branch or branches within the year following the
date of this agreement, fifty percent (50%) of any franchise premium in excess
of the franchise premium paid by the Assuming Bank with respect to such branch
or branches.
4.2 Agreement
with Respect to Credit Card Business. The Assuming Bank agrees to honor
and perform, from and after Bank Closing, all duties and obligations with
respect to the Failed Bank's credit card business, and/or processing related to
credit cards, if any, and assumes all outstanding extensions of credit with
respect thereto.
4.3 Agreement
with Respect to Safe Deposit Business. The Assuming Bank assumes and
agrees to discharge, from and after Bank Closing, in the usual course of
conducting a banking business, the duties and obligations of the Failed Bank
with respect to all Safe Deposit Boxes, if any, of the Failed Bank and to
maintain all of the necessary facilities for the use of such boxes by the
renters thereof during the period for which such boxes have been rented and the
rent therefore paid to the Failed Bank, subject to the provisions of the rental
agreements between the Failed Bank and the respective renters of such boxes;
provided, that the Assuming
Bank may relocate the Safe Deposit Boxes of the Failed Bank to any office of the
Assuming Bank located in the trade area of the Failed Bank. The Safe Deposit
Boxes shall be located and maintained in the trade area of the Failed Bank for a
minimum of one year from Bank Closing. The trade area shall be determined by the
Receiver. Fees related to the safe deposit business earned prior to the Bank
Closing Date shall be for the benefit of the Receiver and fees earned after the
Bank Closing Date shall be for the benefit of the Assuming Bank.
4.4 Agreement
with Respect to Safekeeping Business. The Receiver transfers, conveys and
delivers to the Assuming Bank and the Assuming Bank accepts all securities and
other items, if any, held by the Failed Bank in safekeeping for its customers as
of Bank Closing.
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The
Assuming Bank assumes and agrees to honor and discharge, from and after Bank
Closing, the duties and obligations of the Failed Bank with respect to such
securities and items held in safekeeping. The Assuming Bank shall be entitled to
all rights and benefits heretofore accrued or hereafter accruing with respect
thereto. The Assuming Bank shall provide to the Receiver written verification of
all assets held by the Failed Bank for safekeeping within sixty (60) days after
Bank Closing. The assets held for safekeeping by the Failed Bank shall be held
and maintained by the Assuming Bank in the trade area of the Failed Bank for a
minimum of one year from Bank Closing. At the option of the Assuming Bank, the
safekeeping business may be provided at any or all of the Bank Premises, or at
other premises within such trade area. The trade area shall be determined by the
Receiver. Fees related to the safekeeping business earned prior to the Bank
Closing Date shall be for the benefit of the Receiver and fees earned after the
Bank Closing Date shall be for the benefit of the Assuming Bank.
4.5 Agreement
with Respect to Trust Business.
(a) The
Assuming Bank shall, without further transfer, substitution, act or deed, to the
full extent permitted by law, succeed to the rights, obligations, properties,
assets, investments, deposits, agreements, and trusts of the Failed Bank under
trusts, executorships, administrations, guardianships, and agencies, and other
fiduciary or representative capacities, all to the same extent as though the
Assuming Bank had assumed the same from the Failed Bank prior to Bank Closing;
provided, that any liability
based on the misfeasance, malfeasance or nonfeasance of the Failed Bank, its
directors, officers, employees or agents with respect to the trust business is
not assumed hereunder.
(b) The
Assuming Bank shall, to the full extent permitted by law, succeed to, and be
entitled to take and execute, the appointment to all executorships,
trusteeships, guardianships and other fiduciary or representative capacities to
which the Failed Bank is or may be named in xxxxx, whenever probated, or to
which the Failed Bank is or may be named or appointed by any other
instrument.
(c) In
the event additional proceedings of any kind are necessary to accomplish the
transfer of such trust business, the Assuming Bank agrees that, at its own
expense, it will take whatever action is necessary to accomplish such transfer.
The Receiver agrees to use reasonable efforts to assist the Assuming Bank in
accomplishing such transfer.
(d) The
Assuming Bank shall provide to the Receiver written verification of the assets
held in connection with the Failed Bank's trust business within sixty (60) days
after Bank Closing.
4.6 Agreement
with Respect to Bank Premises.
(a) Option to
Purchase. Subject
to Section 3.5, the Receiver hereby grants to the Assuming Bank an exclusive
option for the period of ninety (90) days commencing the day after Bank Closing
to purchase any or all owned Bank Premises, including all Furniture, Fixtures
and Equipment located on the Bank Premises. The Assuming Bank shall give written
notice to the Receiver within the option period of its election to purchase or
not to purchase any of the owned Bank Premises. Any purchase of such premises
shall be effective as of the date of Bank Closing and such purchase shall be
consummated as soon as practicable thereafter, and in no event later than the
Settlement Date.
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(b) Option to
Lease. The
Receiver hereby grants to the Assuming Bank an exclusive option for the period
of ninety (90) days commencing the day after Bank Closing to cause the Receiver
to assign to the Assuming Bank any or all leases for leased Bank Premises, if
any, which have been continuously occupied by the Assuming Bank from Bank
Closing to the date it elects to accept an assignment of the leases with respect
thereto to the extent such leases can be assigned; provided, that the exercise of
this option with respect to any lease must be as to all premises or other
property subject to the lease. If an assignment cannot be made of any such
leases, the Receiver may, in its discretion, enter into subleases with the
Assuming Bank containing the same terms and conditions provided under such
existing leases for such leased Bank Premises or other property. The Assuming
Bank shall give notice to the Receiver within the option period of its election
to accept or not to accept an assignment of any or all leases (or enter into
subleases or new leases in lieu thereof). The Assuming Bank agrees to assume all
leases assigned (or enter into subleases or new leases in lieu thereof) pursuant
to this Section 4.6.
(c) Facilitation. The Receiver agrees to
facilitate the assumption, assignment or sublease of leases or the negotiation
of new leases by the Assuming Bank; provided, that neither the
Receiver nor the Corporation shall be obligated to engage in litigation, make
payments to the Assuming Bank or to any third party in connection with
facilitating any such assumption, assignment, sublease or negotiation or commit
to any other obligations to third parties.
(d) Occupancy. The Assuming Bank shall give
the Receiver fifteen (15) days' prior written notice of its intention to vacate
prior to vacating any leased Bank Premises with respect to which the Assuming
Bank has not exercised the option provided in Section 4.6(b). Any such notice
shall be deemed to terminate the Assuming Bank's option with respect to such
leased Bank Premises.
(e) Occupancy
Costs.
(i) The
Assuming Bank agrees to pay to the Receiver, or to appropriate third parties at
the direction of the Receiver, during and for the period of any occupancy by it
of (x) owned Bank Premises the market rental value, as determined by the
appraiser selected in accordance with the definition of Fair Market Value, and
all operating costs, and (y) leased Bank Premises, all operating costs with
respect thereto and to comply with all relevant terms of applicable leases
entered into by the Failed Bank, including without limitation the timely payment
of all rent. Operating costs include, without limitation all taxes, fees,
charges, utilities, insurance and assessments, to the extent not included in the
rental value or rent. If the Assuming Bank elects to purchase any owned Bank
Premises in accordance with Section 4.6(a), the amount of any rent paid (and
taxes paid to the Receiver which have not been paid to the taxing authority and
for which the Assuming Bank assumes liability) by the Assuming Bank with respect
thereto shall be applied as an offset against the purchase price
thereof.
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(ii) The
Assuming Bank agrees during the period of occupancy by it of owned or leased
Bank Premises, to pay to the Receiver rent for the use of all owned or leased
Furniture and Equipment and all owned or leased Fixtures located on such Bank
Premises for the period of such occupancy. Rent for such property owned by the
Failed Bank shall be the market rental value thereof, as determined by the
Receiver within sixty (60) days after Bank Closing. Rent for such leased
property shall be an amount equal to any and all rent and other amounts which
the Receiver incurs or accrues as an obligation or is obligated to pay for such
period of occupancy pursuant to all leases and contracts with respect to such
property. If the Assuming Bank purchases any owned Furniture and Equipment or
owned Fixtures in accordance with Section 4.6(f) or 4.6(h), the amount of any
rents paid by the Assuming Bank with respect thereto shall be applied as an
offset against the purchase price thereof.
(f) Certain
Requirements as to Furniture, Equipment and Fixtures. If the Assuming Bank
purchases owned Bank Premises or accepts an assignment of the lease (or enters
into a sublease or a new lease in lieu thereof) for leased Bank Premises as
provided in Section 4.6(a) or 4.6(b), or if the Assuming Bank does not exercise
such option but within twelve (12) months following Bank Closing obtains the
right to occupy such premises (whether by assignment, lease, sublease, purchase
or otherwise), other than in accordance with Section 4.6(a) or (b), the Assuming
Bank shall (i) effective as of the date of Bank Closing, purchase from the
Receiver all Furniture and Equipment and Fixtures owned by the Failed Bank at
Fair Market Value and located thereon as of Bank Closing, (ii) accept an
assignment or a sublease of the leases or negotiate new leases for all Furniture
and Equipment and Fixtures leased by the Failed Bank and located thereon, and
(iii) if applicable, accept an assignment or a sublease of any ground lease or
negotiate a new ground lease with respect to any land on which such Bank
Premises are located; provided, that the Receiver
shall not have disposed of such Furniture and Equipment and Fixtures or
repudiated the leases specified in clause (ii) or (iii).
(g)
Vacating
Premises.
(i) If
the Assuming Bank elects not to purchase any owned Bank Premises, the notice of
such election in accordance with Section 4.6(a) shall specify the date upon
which the Assuming Bank's occupancy of such premises shall terminate, which date
shall not be later than ninety (90) days after the date of the Assuming Bank's
notice not to exercise such option. The Assuming Bank promptly shall relinquish
and release to the Receiver such premises and the Furniture and Equipment and
Fixtures located thereon in the same condition as at Bank Closing, normal wear
and tear excepted. By occupying any such premises after the expiration of such
ninety (90)-day period, the Assuming Bank shall, at the Receiver's option, (x)
be deemed to have agreed to purchase such Bank Premises, and to assume all
leases, obligations and liabilities with respect to leased Furniture and
Equipment and leased Fixtures located thereon and any ground lease with respect
to the land on which such premises are located, and (y) be required to purchase
all Furniture and Equipment and Fixtures owned by the Failed Bank and located on
such premises as of Bank Closing.
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(ii) If
the Assuming Bank elects not to accept an assignment of the lease or sublease
any leased Bank Premises, the notice of such election in accordance with Section
4.6(b) shall specify the date upon which the Assuming Bank's occupancy of such
leased Bank Premises shall terminate, which date shall not be later than the
date which is one hundred eighty (180) days after Bank Closing. Upon vacating
such premises, the Assuming Bank shall relinquish and release to the Receiver
such premises and the Fixtures and the Furniture and Equipment located thereon
in the same condition as at Bank Closing, normal wear and tear excepted. By
failing to provide notice of its intention to vacate such premises prior to the
expiration of the option period specified in Section 4.6(b), or by occupying
such premises after the one hundred eighty (180)-day period specified above in
this paragraph (ii), the Assuming Bank shall, at the Receiver's option, (x) be
deemed to have assumed all leases, obligations and liabilities with respect to
such premises (including any ground lease with respect to the land on which
premises are located), and leased Furniture and Equipment and leased Fixtures
located thereon in accordance with this Section 4.6 (unless the Receiver
previously repudiated any such lease), and (y) be required to purchase all
Furniture and Equipment and Fixtures owned by the Failed Bank at Fair Market
Value and located on such premises as of Bank Closing.
(h) Furniture
and Equipment and Certain Other Equipment. The Receiver hereby grants
to the Assuming Bank an option to purchase all Furniture and Equipment or any
telecommunications, data processing equipment (including hardware and software)
and check processing and similar operating equipment owned by the Failed Bank at
Fair Market Value and located at any leased Bank Premises that the Assuming Bank
elects to vacate or which it could have, but did not occupy, pursuant to this
Section 4.6; provided, that, the Assuming
Bank shall give the Receiver notice of its election to purchase such property at
the time it gives notice of its intention to vacate such Bank Premises or within
ten (10) days after Bank Closing for Bank Premises it could have, but did not,
occupy.
4.7 Agreement with Respect to
Leased Data Processing Equipment
(a) The
Receiver hereby grants to the Assuming Bank an exclusive option for the period
of ninety (90) days commencing the day after Bank Closing to accept an
assignment from the Receiver of any or all Data Processing Leases to the extent
that such Data Processing Leases can be assigned.
(b) The
Assuming Bank shall (i) give written notice to the Receiver within the option
period specified in Section 4.7(a) of its intent to accept or decline an
assignment or sublease of any or all Data Processing Leases and promptly accept
an assignment or sublease of such Data Processing Leases, and (ii) give written
notice to the appropriate lessor(s) that it has accepted an assignment or
sublease of any such Data Processing Leases.
(c) The
Receiver agrees to facilitate the assignment or sublease of Data Processing
Leases or the negotiation of new leases or license agreements by the Assuming
Bank; provided,
that neither
the Receiver nor the Corporation shall be obligated to engage in litigation or
make payments to the Assuming Bank or to any third party in connection with
facilitating any such assumption, assignment, sublease or
negotiation.
(d) The
Assuming Bank agrees, during its period of use of any property subject to a Data
Processing Lease, to pay to the Receiver or to appropriate third parties at the
direction of the Receiver all operating costs with respect thereto and to comply
with all relevant terms of the applicable Data Processing Leases entered into by
the Failed Bank, including without limitation the timely payment of all rent,
taxes, fees, charges, utilities, insurance and assessments.
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(e) The
Assuming Bank shall, not later than fifty (50) days after giving the notice
provided in Section 4.7(b), (i) relinquish and release to the Receiver all
property subject to the relevant Data Processing Lease, in the same condition as
at Bank Closing, normal wear and tear excepted, or (ii) accept an assignment or
a sublease thereof or negotiate a new lease or license agreement under this
Section 4.7.
4.8 Agreement
with Respect to Certain Existing Agreements.
(a) Subject
to the provisions of Section 4.8(b), with respect to agreements existing as of
Bank Closing which provide for the rendering of services by or to the Failed
Bank, within ninety (90) days after Bank Closing, the Assuming Bank shall give
the Receiver written notice specifying whether it elects to assume or not to
assume each such agreement. Except as may be otherwise provided in this Article
IV, the Assuming Bank agrees to comply with the terms of each such agreement for
a period commencing on the day after Bank Closing and ending on: (i) in the case
of an agreement that provides for the rendering of services by the Failed Bank,
the date which is ninety (90) days after Bank Closing, and (ii) in the case of
an agreement that provides for the rendering of services to the Failed Bank, the
date which is thirty (30) days after the Assuming Bank has given notice to the
Receiver of its election not to assume such agreement; provided, that the Receiver can
reasonably make such service agreements available to the Assuming Bank. The
Assuming Bank shall be deemed by the Receiver to have assumed agreements for
which no notification is timely given. The Receiver agrees to assign, transfer,
convey, and deliver to the Assuming Bank all right, title and interest of the
Receiver, if any, in and to agreements the Assuming Bank assumes hereunder. In
the event the Assuming Bank elects not to accept an assignment of any lease (or
sublease) or negotiate a new lease for leased Bank Premises under Section 4.6
and does not otherwise occupy such premises, the provisions of this Section
4.8(a) shall not apply to service agreements related to such premises. The
Assuming Bank agrees, during the period it has the use or benefit of any such
agreement, promptly to pay to the Receiver or to appropriate third parties at
the direction of the Receiver all operating costs with respect thereto and to
comply with all relevant terms of such agreement.
(b) The
provisions of Section 4.8(a) regarding the Assuming Bank’s election to assume or
not assume certain agreements shall not apply to (i) agreements pursuant to
which the Failed Bank provides mortgage servicing for others or mortgage
servicing is provided to the Failed Bank by others, (ii) agreements that are
subject to Sections 4.1 through 4.7 and any insurance policy or bond referred to
in Section 3.5(a) or other agreement specified in Section 3.5, and (iii)
consulting, management or employment agreements, if any, between the Failed Bank
and its employees or other Persons. Except as otherwise expressly set forth
elsewhere in this Agreement, the Assuming Bank does not assume any liabilities
or acquire any rights under any of the agreements described in this Section
4.8(b).
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4.9 Informational
Tax Reporting. The Assuming Bank agrees to perform all obligations of the
Failed Bank with respect to Federal and State income tax informational reporting
related to (i) the Assets and the Liabilities Assumed, (ii) deposit accounts
that were closed and loans that were paid off or collateral obtained with
respect thereto prior to Bank Closing, (iii) miscellaneous payments made to
vendors of the Failed Bank, and (iv) any other asset or liability of the Failed
Bank, including, without limitation, loans not purchased and Deposits not
assumed by the Assuming Bank, as may be required by the Receiver.
4.10 Insurance.
The Assuming Bank agrees to obtain insurance coverage effective from and after
Bank Closing, including public liability, fire and extended coverage insurance
acceptable to the Receiver with respect to owned or leased Bank Premises that it
occupies, and all owned or leased Furniture and Equipment and Fixtures and
leased data processing equipment (including hardware and software) located
thereon, in the event such insurance coverage is not already in force and effect
with respect to the Assuming Bank as the insured as of Bank Closing. All such
insurance shall, where appropriate (as determined by the Receiver), name the
Receiver as an additional insured.
4.11 Office
Space for Receiver and Corporation. For the period commencing
on the day following Bank Closing and ending on the one hundred eightieth
(180th) day thereafter, the Assuming Bank agrees to provide to the Receiver and
the Corporation, without charge, adequate and suitable office space (including
parking facilities and vault space), furniture, equipment (including
photocopying and telecopying machines), email accounts, network access and
technology resources (such as shared drive) and utilities (including local
telephone service and fax machines) at the Bank Premises occupied by the
Assuming Bank for their use in the discharge of their respective functions with
respect to the Failed Bank. In the event the Receiver and the Corporation
determine that the space provided is inadequate or unsuitable, the Receiver and
the Corporation may relocate to other quarters having adequate and suitable
space and the costs of relocation and any rental and utility costs for the
balance of the period of occupancy by the Receiver and the Corporation shall be
borne by the Assuming Bank. Additionally, the Assuming Bank agrees to
pay such bills and invoices on behalf of the Receiver and Corporation as the
Receiver or Corporation may direct for the period beginning on the date of Bank
Closing and ending on Settlement Date. Assuming Bank shall submit it
requests for reimbursement of such expenditures pursuant to Article VIII of this
Agreement.
4.12 Agreement with Respect to
Continuation of Group Health Plan Coverage for Former Employees of the Failed
Bank.
(a) The
Assuming Bank agrees to assist the Receiver, as provided in this Section 4.12,
in offering individuals who were employees or former employees of the Failed
Bank, or any of its Subsidiaries, and who, immediately prior to Bank Closing,
were receiving, or were eligible to receive, health insurance coverage or health
insurance continuation coverage from the Failed Bank ("Eligible Individuals"),
the opportunity to obtain health insurance coverage in the Corporation's FIA
Continuation Coverage Plan which provides for health insurance continuation
coverage to such Eligible Individuals who are qualified beneficiaries of the
Failed Bank as defined in Section 607 of the Employee Retirement Income Security
Act of 1974, as amended (respectively, "qualified beneficiaries" and "ERISA").
The Assuming Bank shall consult with the Receiver and not later than five (5)
Business Days after Bank Closing shall provide written notice to the Receiver of
the number (if available), identity (if available) and addresses (if available)
of the Eligible Individuals who are qualified beneficiaries of the Failed Bank
and for whom a "qualifying event" (as defined in Section 603 of ERISA) has
occurred and with respect to whom the Failed Bank's obligations under Part 6 of
Subtitle B of Title I of ERISA have not been satisfied in full, and such other
information as the Receiver may reasonably require. The Receiver shall cooperate
with the Assuming Bank in order to permit it to prepare such notice and shall
provide to the Assuming Bank such data in its possession as may be reasonably
required for purposes of preparing such notice.
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(b) The
Assuming Bank shall take such further action to assist the Receiver in offering
the Eligible Individuals who are qualified beneficiaries of the Failed Bank the
opportunity to obtain health insurance coverage in the Corporation's FIA
Continuation Coverage Plan as the Receiver may direct. All expenses incurred and
paid by the Assuming Bank (i) in connection with the obligations of the Assuming
Bank under this Section 4.12, and (ii) in providing health insurance
continuation coverage to any Eligible Individuals who are hired by the Assuming
Bank and such employees' qualified beneficiaries shall be borne by the Assuming
Bank.
(c) This
Section 4.12 is for the sole and exclusive benefit of the parties to this
Agreement, and for the benefit of no other Person (including any former employee
of the Failed Bank or any Subsidiary thereof or qualified beneficiary of such
former employee). Nothing in this Section 4.12 is intended by the parties, or
shall be construed, to give any Person (including any former employee of the
Failed Bank or any Subsidiary thereof or qualified beneficiary of such former
employee) other than the Corporation, the Receiver and the Assuming Bank any
legal or equitable right, remedy or claim under or with respect to the
provisions of this Section.
4.13 Agreement
with Respect to Interim Asset Servicing. At any time after Bank
Closing, the Receiver may establish on its books an asset pool(s) and may
transfer to such asset pool(s) (by means of accounting entries on the books of
the Receiver) all or any assets and liabilities of the Failed Bank which are not
acquired by the Assuming Bank, including, without limitation, wholly unfunded
Commitments and assets and liabilities which may be acquired, funded or
originated by the Receiver subsequent to Bank Closing. The Receiver may remove
assets (and liabilities) from or add assets (and liabilities) to such pool(s) at
any time in its discretion. At the option of the Receiver, the Assuming Bank
agrees to service, administer, and collect such pool assets in accordance with
and for the term set forth in Exhibit 4.13 "Interim Asset Servicing
Arrangement".
4.14 Reserved.
4.15 Agreement
with Respect to Loss Sharing. The Assuming Bank shall be entitled to require reimbursement from
the Receiver for loss sharing on certain loans in accordance with the Single
Family Shared-Loss Agreement attached hereto as Exhibit 4.15A and the Non-SF
Shared-Loss Agreement attached hereto as Exhibit 4.15B, collectively, the
“Shared-Loss Agreements.” The Loans that shall be subject to the
Shared-Loss Agreements are identified on the Schedule of Loans 4.15A and 4.15B
attached hereto.
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DUTIES
WITH RESPECT TO DEPOSITORS OF THE FAILED BANK
5.1 Payment
of Checks, Drafts and Orders. Subject to Section 9.5, the
Assuming Bank agrees to pay all properly drawn checks, drafts and withdrawal
orders of depositors of the Failed Bank presented for payment, whether drawn on
the check or draft forms provided by the Failed Bank or by the Assuming Bank, to
the extent that the Deposit balances to the credit of the respective makers or
drawers assumed by the Assuming Bank under this Agreement are sufficient to
permit the payment thereof, and in all other respects to discharge, in the usual
course of conducting a banking business, the duties and obligations of the
Failed Bank with respect to the Deposit balances due and owing to the depositors
of the Failed Bank assumed by the Assuming Bank under this
Agreement.
5.2 Certain
Agreements Related to Deposits. Subject to Section 2.2, the
Assuming Bank agrees to honor the terms and conditions of any written escrow or
mortgage servicing agreement or other similar agreement relating to a Deposit
liability assumed by the Assuming Bank pursuant to this Agreement.
5.3 Notice to
Depositors.
(a) Within
seven (7) days after Bank Closing, the Assuming Bank shall give (i) notice to
depositors of the Failed Bank of its assumption of the Deposit liabilities of
the Failed Bank, and (ii) any notice required under Section 2.2, by mailing to
each such depositor a notice with respect to such assumption and by advertising
in a newspaper of general circulation in the county or counties in which the
Failed Bank was located. The Assuming Bank agrees that it will obtain prior
approval of all such notices and advertisements from counsel for the Receiver
and that such notices and advertisements shall not be mailed or published until
such approval is received.
(b) The
Assuming Bank shall give notice by mail to depositors of the Failed Bank
concerning the procedures to claim their deposits, which notice shall be
provided to the Assuming Bank by the Receiver or the Corporation. Such notice
shall be included with the notice to depositors to be mailed by the Assuming
Bank pursuant to Section 5.3(a).
(c) If
the Assuming Bank proposes to charge fees different from those charged by the
Failed Bank before it establishes new deposit account relationships with the
depositors of the Failed Bank, the Assuming Bank shall give notice by mail of
such changed fees to such depositors.
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RECORDS
6.1 Transfer
of Records.
(a) In
accordance with Section 3.1, the Receiver assigns, transfers, conveys and
delivers to the Assuming Bank the following Records pertaining to the Deposit
liabilities of the Failed Bank assumed by the Assuming Bank under this
Agreement, except as provided in Section 6.4:
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(i)
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signature
cards, orders, contracts between the Failed Bank and its depositors and
Records of similar character;
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(ii)
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passbooks
of depositors held by the Failed Bank, deposit slips, cancelled checks and
withdrawal orders representing charges to accounts of
depositors;
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and the
following Records pertaining to the Assets:
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(iii)
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records
of deposit balances carried with other banks, bankers or trust
companies;
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(iv)
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Loan
and collateral records and Credit Files and other
documents;
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(v)
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deeds,
mortgages, abstracts, surveys, and other instruments or records of title
pertaining to real estate or real estate
mortgages;
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(vi)
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signature
cards, agreements and records pertaining to Safe Deposit Boxes, if any;
and
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(vii)
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records
pertaining to the credit card business, trust business or safekeeping
business of the Failed Bank, if
any.
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(b) The
Receiver, at its option, may assign and transfer to the Assuming Bank by a
single blanket assignment or otherwise, as soon as practicable after Bank
Closing, any other Records not assigned and transferred to the Assuming Bank as
provided in this Agreement, including but not limited to loan disbursement
checks, general ledger tickets, official bank checks, proof transactions
(including proof tapes) and paid out loan files.
6.2 Delivery
of Assigned Records. The Receiver shall deliver to the Assuming Bank all
Records described in (i) Section 6.1(a) as soon as practicable on or after the
date of this Agreement, and (ii) Section 6.1(b) as soon as practicable after
making any assignment described therein.
6.3 Preservation
of Records. The Assuming Bank agrees that it will preserve and maintain
for the joint benefit of the Receiver, the Corporation and the Assuming Bank,
all Records of which it has custody for such period as either the Receiver or
the Corporation in its discretion may require, until directed otherwise, in writing, by the Receiver or
Corporation. The Assuming Bank shall have the primary responsibility to respond
to subpoenas, discovery requests, and other similar official inquiries with
respect to the Records of which it has custody.
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6.4 Access to
Records; Copies. The Assuming Bank agrees to permit the Receiver and the
Corporation access to all Records of which the Assuming Bank has custody, and to
use, inspect, make extracts from or request copies of any such Records in the
manner and to the extent requested, and to duplicate, in the discretion of the
Receiver or the Corporation, any Record in the form of microfilm or microfiche
pertaining to Deposit account relationships; provided, that in the event
that the Failed Bank maintained one or more duplicate copies of such microfilm
or microfiche Records, the Assuming Bank hereby assigns, transfers, and conveys
to the Corporation one such duplicate copy of each such Record without cost to
the Corporation, and agrees to deliver to the Corporation all Records assigned
and transferred to the Corporation under this Article VI as soon as practicable
on or after the date of this Agreement. The party requesting a copy of any
Record shall bear the cost (based on standard accepted industry charges to the
extent applicable, as determined by the Receiver) for providing such duplicate
Records. A copy of each Record requested shall be provided as soon as
practicable by the party having custody thereof.
FIRST
LOSS TRANCHE
The
Assuming Bank has submitted to the Receiver an asset premium (discount) bid of
($544,101,862.00) and a Deposit premium bid of 1%. The Deposit
premium bid will be applied to the total of all Assumed Deposits except for
brokered, CDARS, and any market place or similar subscription services
Deposits. The First Loss Tranche shall be determined by adding (i)
the asset premium (discount) bid, (ii) the Deposit premium bid, and (iii) the
Equity Adjustment. If the First Loss Tranche is a positive number,
then this is the Losses on Single Family Shared-Loss Loans and Net Charge-offs
on Shared Loss Assets that the Assuming Bank will incur before loss-sharing
commences under Exhibits 4.15A and 4.15B. If the First Loss Tranche
is a negative number, the Corporation shall pay such amount by wire transfer to
the Assuming Bank by the end of the first business day following Bank Closing
and loss sharing shall commence immediately.
ADJUSTMENTS
8.1
Pro Forma
Statement. The Receiver, as soon as practicable after Bank Closing, in
accordance with the best information then available, shall provide to the
Assuming Bank a pro forma statement reflecting any adjustments of such
liabilities and assets as may be necessary. Such pro forma statement shall take
into account, to the extent possible, (i) liabilities and assets of a nature
similar to those contemplated by Section 2.1 or Section 3.1, respectively, which
at Bank Closing were carried in the Failed Bank's suspense accounts, (ii)
accruals as of Bank Closing for all income related to the assets and business of
the Failed Bank acquired by the Assuming Bank hereunder, whether or not such
accruals were reflected on the Accounting Records of the Failed Bank in the
normal course of its operations, and (iii) adjustments to determine the Book
Value of any investment in an Acquired Subsidiary and related accounts on the
"bank only" (unconsolidated) balance sheet of the Failed Bank based on the
equity method of accounting, whether or not the Failed Bank used the equity
method of accounting for investments in subsidiaries, except that the resulting
amount cannot be less than the Acquired Subsidiary's recorded equity as of Bank
Closing as reflected on the Accounting Records of the Acquired Subsidiary. Any
Loan purchased by the Assuming Bank pursuant to Section 3.1 which the Failed
Bank charged off during the period from March 31, 2009 to Bank Closing shall be
deemed not to be charged off for the purposes of the pro forma statement, and
the purchase price shall be determined pursuant to Section 3.2.
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8.2 Correction
of Errors and Omissions; Other Liabilities.
(a) In
the event any bookkeeping omissions or errors are discovered in preparing any
pro forma statement or in completing the transfers and assumptions contemplated
hereby, the parties hereto agree to correct such errors and omissions, it being
understood that, as far as practicable, all adjustments will be made consistent
with the judgments, methods, policies or accounting principles utilized by the
Failed Bank in preparing and maintaining Accounting Records, except that
adjustments made pursuant to this Section 8.2(a) are not intended to bring the
Accounting Records of the Failed Bank into accordance with generally accepted
accounting principles.
(b) If
the Receiver discovers at any time subsequent to the date of this Agreement that
any claim exists against the Failed Bank which is of such a nature that it would
have been included in the liabilities assumed under Article II had the existence
of such claim or the facts giving rise thereto been known as of Bank Closing,
the Receiver may, in its discretion, at any time, require that such claim be
assumed by the Assuming Bank in a manner consistent with the intent of this
Agreement. The Receiver will make appropriate adjustments to the pro forma
statement provided by the Receiver to the Assuming Bank pursuant to Section 8.1
as may be necessary.
8.3 Payments.
The Receiver agrees to cause to be paid to the Assuming Bank, or the Assuming
Bank agrees to pay to the Receiver, as the case may be, on the Settlement Date,
a payment in an amount which reflects net adjustments (including any costs,
expenses and fees associated with determinations of value as provided in this
Agreement) made pursuant to Section 8.1 or Section 8.2, plus interest as
provided in Section 8.4. The Receiver and the Assuming Bank agree to effect on
the Settlement Date any further transfer of assets to or assumption of
liabilities or claims by the Assuming Bank as may be necessary in accordance
with Section 8.1 or Section 8.2.
8.4 Interest.
Any amounts paid under Section 8.3 or Section 8.5 shall bear interest for the
period from and including the day following Bank Closing to and including the
day preceding the payment at the Settlement Interest Rate.
8.5 Subsequent
Adjustments .In
the event that the Assuming Bank or the Receiver discovers any errors or
omissions as contemplated by Section 8.2 or any error with respect to the
payment made under Section 8.3 after the Settlement Date, the Assuming Bank and
the Receiver agree to promptly correct any such errors or omissions, make any
payments and effect any transfers or assumptions as may be necessary to reflect
any such correction plus interest as provided in Section 8.4.
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CONTINUING
COOPERATION
9.1 General
Matters. The parties hereto agree that they will, in good faith and with
their best efforts, cooperate with each other to carry out the transactions
contemplated by this Agreement and to effect the purposes hereof.
9.2 Additional
Title Documents. The Receiver, the Corporation and the Assuming Bank each
agree, at any time, and from time to time, upon the request of any party hereto,
to execute and deliver such additional instruments and documents of conveyance
as shall be reasonably necessary to vest in the appropriate party its full legal
or equitable title in and to the property transferred pursuant to this Agreement
or to be transferred in accordance herewith. The Assuming Bank shall prepare
such instruments and documents of conveyance (in form and substance satisfactory
to the Receiver) as shall be necessary to vest title to the Assets in the
Assuming Bank. The Assuming Bank shall be responsible for recording such
instruments and documents of conveyance at its own expense.
9.3 Claims
and Suits.
(a) The
Receiver shall have the right, in its discretion, to (i) defend or settle any
claim or suit against the Assuming Bank with respect to which the Receiver has
indemnified the Assuming Bank in the same manner and to the same extent as
provided in Article XII, and (ii) defend or settle any claim or suit against the
Assuming Bank with respect to any Liability Assumed, which claim or suit may
result in a loss to the Receiver arising out of or related to this Agreement, or
which existed against the Failed Bank on or before Bank Closing. The exercise by
the Receiver of any rights under this Section 9.3(a) shall not release the
Assuming Bank with respect to any of its obligations under this
Agreement.
(b) In
the event any action at law or in equity shall be instituted by any Person
against the Receiver and the Corporation as codefendants with respect to any
asset of the Failed Bank retained or acquired pursuant to this Agreement by the
Receiver, the Receiver agrees, at the request of the Corporation, to join with
the Corporation in a petition to remove the action to the United States District
Court for the proper district. The Receiver agrees to institute, with or without
joinder of the Corporation as coplaintiff, any action with respect to any such
retained or acquired asset or any matter connected therewith whenever notice
requiring such action shall be given by the Corporation to the
Receiver.
9.4 Payment
of Deposits. In the event any depositor does not accept the obligation of
the Assuming Bank to pay any Deposit liability of the Failed Bank assumed by the
Assuming Bank pursuant to this Agreement and asserts a claim against the
Receiver for all or any portion of any such Deposit liability, the Assuming Bank
agrees on demand to provide to the Receiver funds sufficient to pay such claim
in an amount not in excess of the Deposit liability reflected on the books of
the Assuming Bank at the time such claim is made. Upon payment by the Assuming
Bank to the Receiver of such amount, the Assuming Bank shall be discharged from
any further obligation under this Agreement to pay to any such depositor the
amount of such Deposit liability paid to the Receiver.
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9.5 Withheld
Payments. At any time, the Receiver or the Corporation may, in its
discretion, determine that all or any portion of any deposit balance assumed by
the Assuming Bank pursuant to this Agreement does not constitute a "Deposit" (or
otherwise, in its discretion, determine that it is the best interest of the
Receiver or Corporation to withhold all or any portion of any deposit), and may
direct the Assuming Bank to withhold payment of all or any portion of any such
deposit balance. Upon such direction, the Assuming Bank agrees to hold such
deposit and not to make any payment of such deposit balance to or on behalf of
the depositor, or to itself, whether by way of transfer, set-off, or otherwise.
The Assuming Bank agrees to maintain the "withheld payment" status of any such
deposit balance until directed in writing by the Receiver or the Corporation as
to its disposition. At the direction of the Receiver or the Corporation, the
Assuming Bank shall return all or any portion of such deposit balance to the
Receiver or the Corporation, as appropriate, and thereupon the Assuming Bank
shall be discharged from any further liability to such depositor with respect to
such returned deposit balance. If such deposit balance has been paid to the
depositor prior to a demand for return by the Corporation or the Receiver, and
payment of such deposit balance had not been previously withheld pursuant to
this Section, the Assuming Bank shall not be obligated to return such deposit
balance to the Receiver or the Corporation. The Assuming Bank shall be obligated
to reimburse the Corporation or the Receiver, as the case may be, for the amount
of any deposit balance or portion thereof paid by the Assuming Bank in
contravention of any previous direction to withhold payment of such deposit
balance or return such deposit balance the payment of which was withheld
pursuant to this Section.
9.6 Proceedings
with Respect to Certain Assets and Liabilities.
(a) In
connection with any investigation, proceeding or other matter with respect to
any asset or liability of the Failed Bank retained by the Receiver, or any asset
of the Failed Bank acquired by the Receiver pursuant to this Agreement, the
Assuming Bank shall cooperate to the extent reasonably required by the
Receiver.
(b) In
addition to its obligations under Section 6.4, the Assuming Bank shall provide
representatives of the Receiver access at reasonable times and locations without
other limitation or qualification to (i) its directors, officers, employees and
agents and those of the Subsidiaries acquired by the Assuming Bank, and (ii) its
books and records, the books and records of such Subsidiaries and all Credit
Files, and copies thereof. Copies of books, records and Credit Files shall be
provided by the Assuming Bank as requested by the Receiver and the costs of
duplication thereof shall be borne by the Receiver.
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(c) Not
later than ten (10) days after the Put Notice pursuant to Section 3.4 or the
date of the notice of transfer of any Loan by the Assuming Bank to the Receiver
pursuant to Section 3.6, the Assuming Bank shall deliver to the Receiver such
documents with respect to such Loan as the Receiver may request, including
without limitation the following: (i) all related Credit Documents (other than
certificates, notices and other ancillary documents), (ii) a certificate setting
forth the principal amount on the date of the transfer and the amount of
interest, fees and other charges then accrued and unpaid thereon, and any
restrictions on transfer to which any such Loan is subject, and (iii) all Credit
Files, and all documents, microfiche, microfilm and computer records (including
but not limited to magnetic tape, disc storage, card forms and printed copy)
maintained by, owned by, or in the possession of the Assuming Bank or any
Affiliate of the Assuming Bank relating to the transferred Loan.
9.7 Information.
The Assuming Bank promptly shall provide to the Corporation such other
information, including financial statements and computations, relating to the
performance of the provisions of this Agreement as the Corporation or the
Receiver may request from time to time, and, at the request of the Receiver,
make available employees of the Failed Bank employed or retained by the Assuming
Bank to assist in preparation of the pro forma statement pursuant to Section
8.1.
CONDITION
PRECEDENT
The
obligations of the parties to this Agreement are subject to the Receiver and the
Corporation having received at or before Bank Closing evidence reasonably
satisfactory to each of any necessary approval, waiver, or other action by any
governmental authority, the board of directors of the Assuming Bank, or other
third party, with respect to this Agreement and the transactions contemplated
hereby, the closing of the Failed Bank and the appointment of the Receiver, the
chartering of the Assuming Bank, and any agreements, documents, matters or
proceedings contemplated hereby or thereby.
REPRESENTATIONS
AND WARRANTIES OF THE ASSUMING BANK
The
Assuming Bank represents and warrants to the Corporation and the Receiver as
follows:
(a) Corporate
Existence and Authority. The Assuming Bank (i) is duly organized, validly
existing and in good standing under the laws of its Chartering Authority and has
full power and authority to own and operate its properties and to conduct its
business as now conducted by it, and (ii) has full power and authority to
execute and deliver this Agreement and to perform its obligations hereunder. The
Assuming Bank has taken all necessary corporate action to authorize the
execution, delivery and performance of this Agreement and the performance of the
transactions contemplated hereby.
(b) Third
Party Consents. No governmental authority or other third party consents
(including but not limited to approvals, licenses, registrations or
declarations) are required in connection with the execution, delivery or
performance by the Assuming Bank of this Agreement, other than such consents as
have been duly obtained and are in full force and effect.
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(c) Execution
and Enforceability. This Agreement has been duly executed and delivered
by the Assuming Bank and when this Agreement has been duly authorized, executed
and delivered by the Corporation and the Receiver, this Agreement will
constitute the legal, valid and binding obligation of the Assuming Bank,
enforceable in accordance with its terms.
(d) Compliance
with Law.
(i) Neither
the Assuming Bank nor any of its Subsidiaries is in violation of any statute,
regulation, order, decision, judgment or decree of, or any restriction imposed
by, the United States of America, any State, municipality or other political
subdivision or any agency of any of the foregoing, or any court or other
tribunal having jurisdiction over the Assuming Bank or any of its Subsidiaries
or any assets of any such Person, or any foreign government or agency thereof
having such jurisdiction, with respect to the conduct of the business of the
Assuming Bank or of any of its Subsidiaries, or the ownership of the properties
of the Assuming Bank or any of its Subsidiaries, which, either individually or
in the aggregate with all other such violations, would materially and adversely
affect the business, operations or condition (financial or otherwise) of the
Assuming Bank or the ability of the Assuming Bank to perform, satisfy or observe
any obligation or condition under this Agreement.
(ii) Neither
the execution and delivery nor the performance by the Assuming Bank of this
Agreement will result in any violation by the Assuming Bank of, or be in
conflict with, any provision of any applicable law or regulation, or any order,
writ or decree of any court or governmental authority.
e)
Representations
Remain True. The
Assuming Bank represents and warrants that it has executed and delivered to the
Corporation a Purchaser Eligibility Certification and Confidentiality Agreement
and that all information provided and representations made by or on behalf of
the Assuming Bank in connection with this Agreement and the transactions
contemplated hereby, including, but not limited to, the Purchaser Eligibility
Certification and Confidentiality Agreement (which are affirmed and ratified
hereby) are and remain true and correct in all material respects and do not fail
to state any fact required to make the information contained therein not
misleading.
INDEMNIFICATION
12.1 Indemnification
of Indemnitees. From and after Bank Closing and subject to the
limitations set forth in this Section and Section 12.6 and compliance by the
Indemnitees with Section 12.2, the Receiver agrees to indemnify and hold
harmless the Indemnitees against any and all costs, losses, liabilities,
expenses (including attorneys' fees) incurred prior to the assumption of defense
by the Receiver pursuant to paragraph (d) of Section 12.2, judgments, fines and
amounts paid in settlement actually and reasonably incurred in connection with
claims against any Indemnitee based on liabilities of the Failed Bank or any
Subsidiary or Affiliate of the Failed Bank that are not assumed by the Assuming
Bank pursuant to this Agreement or subsequent to the execution hereof by the
Assuming Bank or any Subsidiary or Affiliate of the Assuming Bank for which
indemnification is provided hereunder in (a) of this Section 12.1, subject to
certain exclusions as provided in (b) of this Section 12.1:
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(a)
(1)
claims based on the rights of any shareholder or former shareholder as such of
(x) the Failed Bank, or (y) any Subsidiary or Affiliate of the Failed
Bank;
(2)
claims based on the rights of any creditor as such of the Failed Bank or any
Subsidiary or Affiliate of the Failed Bank, or any creditor as such of any
director, officer, employee or agent of the Failed Bank or any Subsidiary or
Affiliate of the Failed Bank, with respect to any indebtedness or other
obligation of the Failed Bank or any Subsidiary or Affiliate of the Failed Bank
arising prior to Bank Closing;
(3)
claims based on the rights of any present or former director, officer, employee
or agent as such of the Failed Bank or of any Subsidiary or Affiliate of the
Failed Bank;
(4)
claims based on any action or inaction prior to Bank Closing of the Failed Bank,
its directors, officers, employees or agents as such, or any Subsidiary or
Affiliate of the Failed Bank, or the directors, officers, employees or agents as
such of such Subsidiary or Affiliate;
(5)
claims based on any malfeasance, misfeasance or nonfeasance of the Failed Bank
or any Subsidiary or Affiliate of the Failed Bank , their directors, officers,
employees or agents with respect to the trust business of the Failed Bank or any
Subsidiary or Affiliate of the Failed Bank, if any;
(6)
claims based on any failure or alleged failure (not in violation of law) by the
Assuming Bank to continue to perform any service or activity previously
performed by the Failed Bank or any Subsidiary or Affiliate of the Failed Bank
which the Assuming Bank is not required to perform pursuant to this Agreement or
which arise under any contract to which the Failed Bank or any Subsidiary or
Affiliate of the Failed Bank was a party which the Assuming Bank elected not to
assume in accordance with this Agreement and which neither the Assuming Bank nor
any Subsidiary or Affiliate of the Assuming Bank has assumed subsequent to the
execution hereof;
(7)
claims arising from any action or inaction of any Indemnitee, including for
purposes of this Section 12.1(a)(7) the former officers or employees of the
Failed Bank or of any Subsidiary or Affiliate of the Failed Bank that is taken
upon the specific written direction of the Corporation or the Receiver, other
than any action or inaction taken in a manner constituting bad faith, gross
negligence or willful misconduct; and
(8)
claims based on the rights of any depositor of the Failed Bank whose deposit has
been accorded "withheld payment" status and/or returned to the Receiver or
Corporation in accordance with Section 9.5 and/or has become an "unclaimed
deposit" or has been returned to the Corporation or the Receiver in accordance
with Section 2.3;
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(b) provided, that, with respect to
this Agreement, except as otherwise set forth in Section 12.1(a), no
indemnification will be provided under this Agreement for any:
(1)
judgment or fine against, or any amount paid in settlement (without the written
approval of the Receiver) by, any Indemnitee in connection with any action that
seeks damages against any Indemnitee (a "counterclaim") arising with respect to
any Asset and based on any action or inaction of either the Failed Bank, its
directors, officers, employees or agents as such prior to Bank Closing, unless
any such judgment, fine or amount paid in settlement exceeds the greater of (i)
the Repurchase Price of such Asset, or (ii) the monetary recovery sought on such
Asset by the Assuming Bank in the cause of action from which the counterclaim
arises; and in such event the Receiver will provide indemnification only in the
amount of such excess; and no indemnification will be provided for any costs or
expenses other than any costs or expenses (including attorneys' fees) which, in
the determination of the Receiver, have been actually and reasonably incurred by
such Indemnitee in connection with the defense of any such counterclaim; and it
is expressly agreed that the Receiver reserves the right to intervene, in its
discretion, on its behalf and/or on behalf of the Receiver, in the defense of
any such counterclaim;
(2)
claims with respect to any liability or obligation of the Failed Bank that is
expressly assumed by the Assuming Bank pursuant to this Agreement or subsequent
to the execution hereof by the Assuming Bank or any Subsidiary or Affiliate of
the Assuming Bank;
(3)
claims with respect to any liability of the Failed Bank to any present or former
employee as such of the Failed Bank or of any Subsidiary or Affiliate of the
Failed Bank, which liability is expressly assumed by the Assuming Bank pursuant
to this Agreement or subsequent to the execution hereof by the Assuming Bank or
any Subsidiary or Affiliate of the Assuming Bank;
(4)
claims based on the failure of any Indemnitee to seek recovery of damages from
the Receiver for any claims based upon any action or inaction of the Failed
Bank, its directors, officers, employees or agents as fiduciary, agent or
custodian prior to Bank Closing;
(5)
claims based on any violation or alleged violation by any Indemnitee of the
antitrust, branching, banking or bank holding company or securities laws of the
United States of America or any State thereof;
(6)
claims based on the rights of any present or former creditor, customer, or
supplier as such of the Assuming Bank or any Subsidiary or Affiliate of the
Assuming Bank;
(7)
claims based on the rights of any present or former shareholder as such of the
Assuming Bank or any Subsidiary or Affiliate of the Assuming Bank regardless of
whether any such present or former shareholder is also a present or former
shareholder of the Failed Bank;
(8)
claims, if the Receiver determines that the effect of providing such
indemnification would be to (i) expand or alter the provisions of any warranty
or disclaimer thereof provided in Section 3.3 or any other provision of this
Agreement, or (ii) create any warranty not expressly provided under this
Agreement;
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(9)
claims which could have been enforced against any Indemnitee had the Assuming
Bank not entered into this Agreement;
(10)
claims based on any liability for taxes or fees assessed with respect to the
consummation of the transactions contemplated by this Agreement, including
without limitation any subsequent transfer of any Assets or Liabilities Assumed
to any Subsidiary or Affiliate of the Assuming Bank;
(11)
except as expressly provided in this Article XII, claims based on any action or
inaction of any Indemnitee, and nothing in this Agreement shall be construed to
provide indemnification for (i) the Failed Bank or (ii) any present or former
director, officer, employee or agent of the Failed Bank or its Subsidiaries or
Affiliates; provided, that the Receiver, in
its discretion, may provide indemnification hereunder for any present or former
director, officer, employee or agent of the Failed Bank or its Subsidiaries or
Affiliates who is also or becomes a director, officer, employee or agent of the
Assuming Bank or its Subsidiaries or Affiliates;
(12)
claims or actions which constitute a breach by the Assuming Bank of the
representations and warranties contained in Article XI;
(13)
claims arising out of or relating to the condition of or generated by an Asset
arising from or relating to the presence, storage or release of any hazardous or
toxic substance, or any pollutant or contaminant, or condition of such Asset
which violate any applicable Federal, State or local law or regulation
concerning environmental protection; and
(14)
claims based on, related to or arising from any asset, including a loan,
acquired or liability assumed by the Assuming Bank, other than pursuant to this
Agreement.
12.2 Conditions
Precedent to Indemnification. It shall be a condition precedent to the
obligation of the Receiver to indemnify any Person pursuant to this Article XII
that such Person shall, with respect to any claim made or threatened against
such Person for which such Person is or may be entitled to indemnification
hereunder:
(a) give
written notice to the Regional Counsel (Litigation Branch) of the Corporation in
the manner and at the address provided in Section 13.7 of such claim as soon as
practicable after such claim is made or threatened; provided, that notice must be
given on or before the date which is six (6) years from the date of this
Agreement;
(b) provide
to the Receiver such information and cooperation with respect to such claim as
the Receiver may reasonably require;
(c) cooperate
and take all steps, as the Receiver may reasonably require, to preserve and
protect any defense to such claim;
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(d) in
the event suit is brought with respect to such claim, upon reasonable prior
notice, afford to the Receiver the right, which the Receiver may exercise in its
sole discretion, to conduct the investigation, control the defense and effect
settlement of such claim, including without limitation the right to designate
counsel and to control all negotiations, litigation, arbitration, settlements,
compromises and appeals of any such claim, all of which shall be at the expense
of the Receiver; provided, that the Receiver
shall have notified the Person claiming indemnification in writing that such
claim is a claim with respect to which the Person claiming indemnification is
entitled to indemnification under this Article XII;
(e) not
incur any costs or expenses in connection with any response or suit with respect
to such claim, unless such costs or expenses were incurred upon the written
direction of the Receiver; provided, that the Receiver
shall not be obligated to reimburse the amount of any such costs or expenses
unless such costs or expenses were incurred upon the written direction of the
Receiver;
(f) not
release or settle such claim or make any payment or admission with respect
thereto, unless the Receiver consents in writing thereto, which consent shall
not be unreasonably withheld; provided, that the Receiver
shall not be obligated to reimburse the amount of any such settlement or payment
unless such settlement or payment was effected upon the written direction of the
Receiver; and
(g) take
reasonable action as the Receiver may request in writing as necessary to
preserve, protect or enforce the rights of the indemnified Person against any
Primary Indemnitor.
12.3 No
Additional Warranty. Nothing in this Article XII shall be construed or
deemed to (i) expand or otherwise alter any warranty or disclaimer thereof
provided under Section 3.3 or any other provision of this Agreement with respect
to, among other matters, the title, value, collectibility, genuineness,
enforceability or condition of any (x) Asset, or (y) asset of the Failed Bank
purchased by the Assuming Bank subsequent to the execution of this Agreement by
the Assuming Bank or any Subsidiary or Affiliate of the Assuming Bank, or (ii)
create any warranty not expressly provided under this Agreement with respect
thereto.
12.4 Indemnification
of Receiver and Corporation. From and after Bank Closing, the Assuming
Bank agrees to indemnify and hold harmless the Corporation and the Receiver and
their respective directors, officers, employees and agents from and against any
and all costs, losses, liabilities, expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and reasonably incurred
in connection with any of the following:
(a) claims
based on any and all liabilities or obligations of the Failed Bank assumed by
the Assuming Bank pursuant to this Agreement or subsequent to the execution
hereof by the Assuming Bank or any Subsidiary or Affiliate of the Assuming Bank,
whether or not any such liabilities subsequently are sold and/or transferred,
other than any claim based upon any action or inaction of any Indemnitee as
provided in paragraph (7) or (8) of Section 12.1(a); and
(b) claims
based on any act or omission of any Indemnitee (including but not limited to
claims of any Person claiming any right or title by or through the Assuming Bank
with respect to Assets transferred to the Receiver pursuant to Section 3.4 or
3.6), other than any action or inaction of any Indemnitee as provided in
paragraph (7) or (8) of Section 12.1(a).
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12.5 Obligations
Supplemental. The obligations of the Receiver, and the Corporation as
guarantor in accordance with Section 12.7, to provide indemnification under this
Article XII are to supplement any amount payable by any Primary Indemnitor to
the Person indemnified under this Article XII. Consistent with that intent, the
Receiver agrees only to make payments pursuant to such indemnification to the
extent not payable by a Primary Indemnitor. If the aggregate amount of payments
by the Receiver, or the Corporation as guarantor in accordance with Section
12.7, and all Primary Indemnitors with respect to any item of indemnification
under this Article XII exceeds the amount payable with respect to such item,
such Person being indemnified shall notify the Receiver thereof and, upon the
request of the Receiver, shall promptly pay to the Receiver, or the Corporation
as appropriate, the amount of the Receiver's (or Corporation's) payments to the
extent of such excess.
12.6 Criminal
Claims. Notwithstanding any provision of this Article XII to the
contrary, in the event that any Person being indemnified under this Article XII
shall become involved in any criminal action, suit or proceeding, whether
judicial, administrative or investigative, the Receiver shall have no obligation
hereunder to indemnify such Person for liability with respect to any criminal
act or to the extent any costs or expenses are attributable to the defense
against the allegation of any criminal act, unless (i) the Person is successful
on the merits or otherwise in the defense against any such action, suit or
proceeding, or (ii) such action, suit or proceeding is terminated without the
imposition of liability on such Person.
12.7 Limited
Guaranty of the Corporation. The Corporation hereby guarantees
performance of the Receiver's obligation to indemnify the Assuming Bank as set
forth in this Article XII. It is a condition to the Corporation's obligation
hereunder that the Assuming Bank shall comply in all respects with the
applicable provisions of this Article XII. The Corporation shall be liable
hereunder only for such amounts, if any, as the Receiver is obligated to pay
under the terms of this Article XII but shall fail to pay. Except as otherwise
provided above in this Section 12.7, nothing in this Article XII is intended or
shall be construed to create any liability or obligation on the part of the
Corporation, the United States of America or any department or agency thereof
under or with respect to this Article XII, or any provision hereof, it being the
intention of the parties hereto that the obligations undertaken by the Receiver
under this Article XII are the sole and exclusive responsibility of the Receiver
and no other Person or entity.
12.8 Subrogation.
Upon payment by the Receiver, or the Corporation as guarantor in accordance with
Section 12.7, to any Indemnitee for any claims indemnified by the Receiver under
this Article XII, the Receiver, or the Corporation as appropriate, shall become
subrogated to all rights of the Indemnitee against any other Person to the
extent of such payment.
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MISCELLANEOUS
13.1
Entire
Agreement. This Agreement embodies the entire agreement of the parties
hereto in relation to the subject matter herein and supersedes all prior
understandings or agreements, oral or written, between the parties.
13.2 Headings.
The headings and subheadings of the Table of Contents, Articles and Sections
contained in this Agreement, except the terms identified for definition in
Article I and elsewhere in this Agreement, are inserted for convenience only and
shall not affect the meaning or interpretation of this Agreement or any
provision hereof.
13.3 Counterparts.
This Agreement may be executed in any number of counterparts and by the duly
authorized representative of a different party hereto on separate counterparts,
each of which when so executed shall be deemed to be an original and all of
which when taken together shall constitute one and the same
Agreement.
13.4 GOVERNING
LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS HEREUNDER SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE FEDERAL LAW OF THE UNITED
STATES OF AMERICA, AND IN THE ABSENCE OF CONTROLLING FEDERAL LAW, IN ACCORDANCE
WITH THE LAWS OF THE STATE IN WHICH THE MAIN OFFICE OF THE FAILED BANK IS
LOCATED.
13.5 Successors.
All terms and conditions of this Agreement shall be binding on the successors
and assigns of the Receiver, the Corporation and the Assuming Bank. Except as
otherwise specifically provided in this Agreement, nothing expressed or referred
to in this Agreement is intended or shall be construed to give any Person other
than the Receiver, the Corporation and the Assuming Bank any legal or equitable
right, remedy or claim under or with respect to this Agreement or any provisions
contained herein, it being the intention of the parties hereto that this
Agreement, the obligations and statements of responsibilities hereunder, and all
other conditions and provisions hereof are for the sole and exclusive benefit of
the Receiver, the Corporation and the Assuming Bank and for the benefit of no
other Person.
13.6 Modification;
Assignment. No amendment or other modification, rescission, release, or
assignment of any part of this Agreement shall be effective except pursuant to a
written agreement subscribed by the duly authorized representatives of the
parties hereto.
13.7 Notice.
Any notice, request, demand, consent, approval or other communication to any
party hereto shall be effective when received and shall be given in writing, and
delivered in person against receipt therefore, or sent by certified mail,
postage prepaid, courier service, telex, facsimile transmission or email to such
party (with copies as indicated below) at its address set forth below or at such
other address as it shall hereafter furnish in writing to the other parties. All
such notices and other communications shall be deemed given on the date received
by the addressee.
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Assuming
Bank
J.
Xxxxxxxx Xxxx
EVP &
Chief Financial Officer
First
Financial Bank, National Association
0000
Xxxxx Xxxx, Xxxxx 000
Xxxxxxxxxx,
Xxxx 00000
(000)
000-0000
with a
copy to:
Xxxxxxx
Xxxxxxxx
Senior
Vice President and General Counsel
(000)
000-0000
Receiver and
Corporation
Federal
Deposit Insurance Corporation,
Receiver
of XXXXX UNION BANK AND TRUST
COMPANY
0000
Xxxxx Xxxxxx, Xxxxx 0000 Xxxxxx,
Xxxxx
00000
Attention:
Settlement Manager
with copy
to: Regional Counsel (Litigation Branch)
and
with respect to notice under Article XII:
Federal
Deposit Insurance Corporation
Receiver
of XXXXX UNION BANK AND TRUST
COMPANY
0000
Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxx,
Xxxxx 00000
Attention:
Regional Counsel (Litigation Branch)
13.8 Manner of
Payment. All payments due under this Agreement shall be in lawful money
of the United States of America in immediately available funds as each party
hereto may specify to the other parties; provided, that in the event the Receiver or the
Corporation is obligated to make any payment hereunder in the amount of
$25,000.00 or less, such payment may be made by check.
13.9 Costs,
Fees and Expenses. Except as otherwise specifically provided herein, each
party hereto agrees to pay all costs, fees and expenses which it has incurred in
connection with or incidental to the matters contained in this Agreement,
including without limitation any fees and disbursements to its accountants and
counsel; provided, that the Assuming Bank shall pay all
fees, costs and expenses (other than attorneys' fees incurred by the Receiver)
incurred in connection with the transfer to it of any Assets or Liabilities
Assumed hereunder or in accordance herewith.
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13.10 Waiver.
Each of the Receiver, the Corporation and the Assuming Bank may waive its
respective rights, powers or privileges under this Agreement; provided, that such waiver shall be in writing;
and further provided, that no failure or delay on
the part of the Receiver, the Corporation or the Assuming Bank to exercise any
right, power or privilege under this Agreement shall operate as a waiver
thereof, nor will any single or partial exercise of any right, power or
privilege under this Agreement preclude any other or further exercise thereof or
the exercise of any other right, power or privilege by the Receiver, the
Corporation, or the Assuming Bank under this Agreement, nor will any such waiver
operate or be construed as a future waiver of such right, power or privilege
under this Agreement.
13.11 Severability.
If any provision of this Agreement is declared invalid or unenforceable, then,
to the extent possible, all of the remaining provisions of this Agreement shall
remain in full force and effect and shall be binding upon the parties
hereto.
13.12 Term of
Agreement. This Agreement shall continue in full force and effect until
the tenth (10th) anniversary of Bank Closing; provided, that the provisions of Section 6.3 and
6.4 shall survive the expiration of the term of this Agreement. Provided,
however, the receivership of the Failed Bank may be terminated prior to the
expiration of the term of this Agreement; in such event, the guaranty of the
Corporation, as provided in and in accordance with the provisions of Section
12.7 shall be in effect for the remainder of the term. Expiration of the term of
this Agreement shall not affect any claim or liability of any party with respect
to any (i) amount which is owing at the time of such expiration, regardless of
when such amount becomes payable, and (ii) breach of this Agreement occurring
prior to such expiration, regardless of when such breach is
discovered.
13.13 Survival
of Covenants, Etc. The covenants,
representations, and warranties in this Agreement shall survive the execution of
this Agreement and the consummation of the transactions contemplated
hereunder.
[Signature
Page Follows]
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IN WITNESS WHEREOF, the
parties hereto have caused this Agreement to be executed by their duly
authorized representatives as of the date first above written.
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FEDERAL
DEPOSIT INSURANCE CORPORATION,
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RECEIVER
OF XXXXX UNION BANK AND TRUST
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COMPANY,
COLUMBUS, INDIANA
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BY:
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XXXXXX
X. XXXX
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RECEIVER-IN-CHARGE
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Attest:
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FEDERAL
DEPOSIT INSURANCE CORPORATION
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BY:
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XXXXXX
X. XXXX
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ATTORNEY-IN-FACT
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Attest:
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FIRST
FINANCIAL BANK, NATIONAL
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ASSOCIATION
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HAMILTON,
OHIO
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BY:
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NAME:
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TITLE:
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Attest:
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To be
provided.
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SEE
ATTACHED LIST
THE
LIST(S) ATTACHED TO THIS SCHEDULE (OR SUBSCHEDULE(S)) AND THE INFORMATION
THEREIN, IS AS OF THE DATE OF THE MOST RECENT PERTINENT DATA MADE AVAILABLE TO
THE ASSUMING BANK AS PART OF THE INFORMATION PACKAGE. IT WILL BE
ADJUSTED TO REFLECT THE COMPOSITION AND BOOK VALUE OF THE LOANS AND ASSETS AS OF
THE DATE OF BANK CLOSING. THE LIST(S) MAY NOT INCLUDE ALL LOANS AND ASSETS
(E.G., CHARGED OFF LOANS). THE LIST(S) MAY BE REPLACED WITH A MORE ACCURATE LIST
POST CLOSING.
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(a)
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cash
and receivables from depository institutions, including cash items in the
process of collection, plus interest thereon:
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Book
Value
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(b)
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securities
(exclusive of the capital stock of Acquired Subsidiaries), plus interest
thereon:
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As
provided in Section 3.2(b)
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(c)
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federal
funds sold and repurchase agreements, if any, including interest
thereon:
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Book
Value
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(d)
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Loans:
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Book
Value
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(e)
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credit
card business, if any, including all outstanding extensions of credit and
offensive litigation, but excluding any class action lawsuits related to
the credit card business:
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Book
Value
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(f)
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Safe
Deposit Boxes and related business, safekeeping business and trust
business, if any:
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Book
Value
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(g)
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Records
and other documents:
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Book
Value
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(h)
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capital
stock of any Acquired Subsidiaries:
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Book
Value
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(i)
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amounts
owed to the Failed Bank by any Acquired Subsidiary:
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Book
Value
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(j)
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assets
securing Deposits of public money, to the extent not otherwise purchased
hereunder:
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Book
Value
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(k)
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Overdrafts
of customers:
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Book
Value
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(l)
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rights,
if any, with respect to Qualified Financial Contracts.
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As
provided in Section
3.2(c)
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(m)
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rights
of the Failed Bank to provide mortgage servicing for others and to have
mortgage servicing provided to the Failed Bank by others and related
contracts.
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Book
Value
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assets
subject to an option to purchase:
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(a)
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Bank
Premises:
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Fair
Market Value
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(b)
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Furniture
and Equipment:
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Fair
Market Value
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(c)
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Fixtures:
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Fair
Market Value
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(d)
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Other
Equipment:
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Fair
Market
Value
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SCHEDULE
4.15A
LOANS
SUBJECT TO LOSS SHARING UNDER THE
SINGLE
FAMILY SHARED-LOSS AGREEMENT
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LOANS
SUBJECT TO LOSS SHARING UNDER THE
NON-SINGLE
FAMILY SHARED-LOSS AGREEMENT
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Accounts
Excluded from Calculation of Deposit Franchise Bid Premium
Xxxxx Union Bank & Trust
Company
Columbus,
IN
The
accounts identified below will pass to the Assuming Bank (unless otherwise
noted). When calculating the premium to be paid on Assumed
Deposits in a P&A transaction, the FDIC will exclude the following
categories of deposit accounts:
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#
of
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||||||||||
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Category
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Description
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Accounts
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Amount
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|||||||
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I
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DO
Brokered Deposits
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57
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$ | 597,284,032 | ||||||
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II
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Non-
DO Brokered Deposits
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1
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$ | 31,914,010 | |||||
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III
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CDARS
|
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3
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$ | 10,932,930 | |||||
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IIII
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Market
Place Deposits
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Total
deposits excluded from Calculation of premium
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$ | 640,130,972 | ||||||||
Category
Description
I Brokered
Deposits
Brokered
deposit accounts are accounts for which the “depositor of record” is an agent,
nominee, or custodian who deposits funds for a principal or principals to whom
“pass-through” deposit insurance coverage may be extended. The FDIC
separates brokered deposit accounts into 2 categories: 1) Depository
Organization (DO) Brokered Deposits and 2) Non-Depository Organization (Non-DO)
Brokered Deposits. This distinction is made by the FDIC to facilitate
our role as Receiver and Insurer. These terms will not appear on
other “brokered deposit” reports generated by the institution.
Non-DO
Brokered Deposits pass to the Assuming Bank, but are excluded from Assumed
Deposits when the deposit premium is calculated. Please see the
attached “Schedule 7 Non-DO Broker Deposit Detail Report” for a listing of these
accounts. This list will be updated post closing with balances as of
Bank Closing date.
DO
Brokered Deposits (Cede & Co as Nominee for DTC), are typically excluded
from Assumed Deposits in the P&A transaction. A list of these
accounts is provided on “Schedule 2.1 DO Brokered Deposit Detail
Report”. If, however, the terms of a particular transaction are
altered and the DO Brokered Deposits pass to the Assuming Bank, they will not be
included in Assumed Deposits for purposes of calculating the deposit
premium.
II
CDARS
CDARS
deposits pass to the Assuming Bank, but are excluded from Assumed Deposits when
the deposit premium is calculated.
__________
did not participate in the CDARS program as of the date of the deposit
download. If CDARS deposits are taken between the date of the deposit
download and the Bank Closing Date, they will be identified post closing and
made part of Schedule 7 to the P&A Agreement.
III Market
Place Deposits
“Market
Place Deposits” is a description given to deposits that may have been solicited
via a money desk, internet subscription service (for example, Qwickrate), or
similar programs.
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__________
does have Qwickrate deposits as identified above. The Qwickrate
deposits are reported as time deposits in the Call Report. _________
uses “Branch 4” on their system to identify both brokered and Qwickrate
deposits. Please see the attached Schedule 7 – Qwickrate Deposit
Detail Report for a listing of these accounts as of _____ __,
2009. This list will be updated post closing with balances as of Bank
Closing date.
This
schedule provides account categories and balances as of the date of the deposit
download, or as indicated. The deposit franchise bid premium will be
calculated using account categories and balances as of Bank Closing Date that
are reflected in the general ledger or subsystem as described
above. The final numbers for Schedule 7 will be provided post
closing.
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QUALIFIED
FINANCIAL CONTRACTS
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A.
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Scope
|
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Interest
Rate Contracts - All interest rate swaps, forward rate agreements,
interest rate futures, caps, collars and floors, whether purchased or
written.
|
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Option
Contracts - All put and call option contracts, whether purchased or
written, on marketable securities, financial futures, foreign currencies,
foreign exchange or foreign exchange futures
contracts.
|
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Foreign
Exchange Contracts - All contracts for future purchase or sale of foreign
currencies, foreign currency or cross currency swap contracts, or foreign
exchange futures contracts.
|
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B.
|
Exclusions
|
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All
financial contracts used to hedge assets and liabilities that are acquired
by the Assuming Bank but are not subject to adjustment from Book
Value.
|
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C.
|
Adjustment
|
|
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The
difference between the Book Value and market value as of Bank
Closing.
|
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D.
|
Methodology
|
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1.
|
The
price at which the Assuming Bank sells or disposes of Qualified Financial
Contracts will be deemed to be the fair market value of such contracts, if
such sale or disposition occurs at prevailing market rates within a
predefined timetable as agreed upon by the Assuming Bank and the
Receiver.
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2.
|
In
valuing all other Qualified Financial Contracts, the following principles
will apply:
|
|
(i)
|
All
known cash flows under swaps or forward exchange contracts shall be
present valued to the swap zero coupon interest rate
curve.
|
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(ii)
|
All
valuations shall employ prices and interest rates based on the actual
frequency of rate reset or
payment.
|
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(iii)
|
Each
tranche of amortizing contracts shall be separately valued. The total
value of such amortizing contract shall be the sum of the values of its
component tranches.
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(iv)
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For
regularly traded contracts, valuations shall be at the midpoint of the bid
and ask prices quoted by customary sources (e.g.,The Wall Street
Journal, Telerate, Reuters or other similar source) or regularly
traded exchanges.
|
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(v)
|
For
all other Qualified Financial Contracts where published market quotes are
unavailable, the adjusted price shall be the average of the bid and ask
price quotes from three (3) securities dealers acceptable to the Receiver
and Assuming Bank as of Bank Closing. If quotes from securities dealers
cannot be obtained, an appraiser acceptable to the Receiver and the
Assuming Bank will perform a valuation based on modeling, correlation
analysis, interpolation or other techniques, as
appropriate.]
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INTERIM ASSET SERVICING
ARRANGEMENT
(a) With
respect to each asset (or liability) designated from time to time by the
Receiver to be serviced by the Assuming Bank pursuant to this Arrangement (such
being designated as "Pool Assets"), during the term of this Arrangement, the
Assuming Bank shall:
(i)
Promptly apply payments received with respect to any Pool Assets;
(ii)
Reverse and return insufficient funds checks;
(iii) Pay
(A) participation payments to participants in Loans, as and when received; and
(B) tax and insurance bills on Pool Assets as they come due, out of escrow funds
maintained for purposes;
(iv)
Maintain accurate records reflecting (A) the payment history of Pool Assets,
with updated information received concerning changes in the address or identity
of the obligors and (B) usage of data processing equipment and employee services
with respect to servicing duties;
(v) Send
billing statements to obligors on Pool Assets to the extent that such statements
were sent by the Failed Bank;
(vi) Send
notices to obligors who are in default on Loans (in the same manner as the
Failed Bank);
(vii)
Send to the Receiver, Attn: Managing Liquidator, at the address provided in
Section 13.7 of the Agreement, via overnight
delivery: (A) on a weekly basis, weekly reports for the Pool Assets,
including, without limitation, reports reflecting collections and the trial
balances, transaction journals and loan histories for Pool Assets having
activity, together with copies of (1) checks received, (2) insufficient funds
checks returned, (3) checks for payment to participants or for taxes and
insurance, (4) pay-off requests, (5) notices to defaulted obligors, and (6) data
processing and employee logs and (B) any other reports, copies or information as
may be periodically or from time to time requested;
(viii)
Remit on a weekly basis to the Receiver, Attn: Division of Finance, Cashier
Unit, Operations, at the address in (vii), via wire transfer to the
account designated by the Receiver, all payments received on Pool Assets managed
by the Assuming Bank or at such time and place and in such manner as may be
directed by the Receiver;
(ix)
prepare and timely file all information reports with appropriate tax
authorities, and, if required by the Receiver, prepare and file tax returns and
pay taxes due on or before the due date, relating to the Pool Assets;
and
(x) provide
and furnish such other services, operations or functions as may be required with
regard to Pool Assets, including, without limitation, as may be required with
regard to any business, enterprise or agreement which is a Pool Asset, all as
may be required by the Receiver.
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Notwithstanding
anything to the contrary in this Section, the Assuming Bank shall not be
required to initiate litigation or other collection proceedings against any
obligor or any collateral with respect to any defaulted Loan. The Assuming Bank
shall promptly notify the Receiver, at the address provided above in
subparagraph (a)(vii), of any claims or legal actions regarding any Pool
Asset.
(b)
The Receiver agrees to reimburse the Assuming Bank for actual, reasonable and
necessary expenses incurred in connection with the performance of duties
pursuant to this Arrangement, including expenses of photocopying, postage and
express mail, and data processing and employee services (based upon the number
of hours spent performing servicing duties).
(c) The
Assuming Bank shall provide the services described herein for an initial period
of ninety (90) days after Bank Closing. At the option of the Receiver,
exercisable by notice given not later than ten (10) days prior to the end of
such initial period or a renewal period, the Assuming Bank shall continue to
provide such services for such renewal period(s) as designated by the Receiver,
up to the Settlement Date.
(d) At
any time during the term of this Arrangement, the Receiver may, upon written
notice to the Assuming Bank, remove one or more Pool Assets from the Pool, at
which time the Assuming Bank's responsibility with respect thereto shall
terminate.
(e) At
the expiration of this Agreement or upon the termination of the Assuming Bank's
responsibility with respect to any Pool Asset pursuant to paragraph (d) hereof,
the Assuming Bank shall:
(i)
deliver to the Receiver (or its designee) all of the Credit Documents and Pool
Records relating to the Pool Assets; and
(ii)
cooperate with the Receiver to facilitate the orderly transition of managing the
Pool Assets to the Receiver (or its designee).
(f) At
the request of the Receiver, the Assuming Bank shall perform such transitional
services with regard to the Pool Assets as the Receiver may request.
Transitional services may include, without limitation, assisting in any due
diligence process deemed necessary by the Receiver and providing to the Receiver
or its designee(s) (x) information and data regarding the Pool Assets,
including, without limitation, system reports and data downloads sufficient to
transfer the Pool Assets to another system or systems, and (y) access to
employees of the Assuming Bank involved in the management of, or otherwise
familiar with, the Pool Assets.
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SINGLE
FAMILY SHARED-LOSS AGREEMENT
This
agreement for the reimbursement of loss sharing on certain single family
residential mortgage loans (the “Single Family Shared-Loss Agreement”) shall
apply when the Assuming Bank purchases Single Family Shared-Loss Loans as that
term is defined herein. The terms hereof shall modify and supplement, as
necessary, the terms of the Purchase and Assumption Agreement to which this
Single Family Shared-Loss Agreement is attached as Exhibit 4.15A and
incorporated therein. To the extent any inconsistencies may arise between the
terms of the Purchase and Assumption Agreement and this Single Family
Shared-Loss Agreement with respect to the subject matter of this Single Family
Shared-Loss Agreement, the terms of this Single Family Shared-Loss Agreement
shall control. References in this Single Family Shared-Loss Agreement to a
particular Section shall be deemed to refer to a Section in this Single Family
Shared-Loss Agreement, unless the context indicates that it is intended to be a
reference to a Section of the Purchase and Assumption Agreement.
ARTICLE
I — DEFINITIONS
The
capitalized terms used in this Single Family Shared-Loss Agreement that are not
defined in this Single Family Shared-Loss Agreement are defined in the Purchase
and Assumption Agreement. In addition to the terms defined above, defined below
are certain additional terms relating to loss-sharing, as used in this Single
Family Shared-Loss Agreement.
“Accounting
Records” means the subsidiary system of record on which the loan history
and balance of each Single Family Shared-Loss Loan is maintained; individual
loan files containing either an original or copies of documents that are
customary and reasonable with respect to loan servicing, including management
and disposition of Other Real Estate; the records documenting alternatives
considered with respect to loans in default or for which a default is reasonably
foreseeable; records of loss calculations and supporting documentation with
respect to line items on the loss calculations; and, monthly delinquency reports
and other performance reports customarily utilized by the Assuming Bank in
management of loan portfolios.
“Accrued
Interest” means, with respect to Single Family Shared-Loss Loans, the
amount of earned and unpaid interest at the note rate specified in the
applicable loan documents, limited to 90 days.
“Affiliate” shall have the meaning set
forth in the Purchase and Assumption Agreement; provided, that, for purposes of
this Single Family Shared-Loss Agreement, no Third Party Servicer shall be
deemed to be an Affiliate of the Assuming Bank.
“Commencement
Date” means the first calendar day following the Bank
Closing.
“Commercial
Shared-Loss Agreement” means the Commercial and Other Assets Shared-Loss
Agreement attached to the Purchase and Assumption Agreement as
Exhibit 4.15B.
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“Cumulative
Loss Amount” means the sum of the Monthly Loss Amounts less the sum of
all Recovery Amounts.
“Cumulative
Shared-Loss Amount” means the excess, if any, of the Cumulative Loss
Amount over the First Loss Tranche.
“Customary
Servicing Procedures” means procedures (including collection procedures)
that the Assuming Bank (or, to the extent a Third Party Servicer is engaged, the
Third Party Servicer) customarily employs and exercises in servicing and
administering mortgage loans for its own accounts and the servicing procedures
established by FNMA or FHLMC (as in effect from time to time), which are in
accordance with accepted mortgage servicing practices of prudent lending
institutions.
“Deficient
Valuation” means
the determination by a court in a bankruptcy proceeding that the value of the
collateral is less than the amount of the loan in which case the loss will be
the difference between the then unpaid principal balance (or the NPV of a
modified loan that defaults) and the value of the collateral so
established.
“Examination
Criteria” means
the loan classification criteria employed by, or any applicable regulations of,
the Assuming Bank’s Chartering Authority at the time such action is taken, as
such criteria may be amended from time to time.
“Home
Equity Loans” means loans or funded portions of lines of credit secured
by mortgages on one-to four-family residences or stock of cooperative housing
associations, where the Failed Bank did not have a first lien on the same
property as collateral.
“Final
Shared-Loss Month” means the calendar month in which the tenth
anniversary of the Commencement Date occurs.
“Final
Shared-Loss Recovery Month” means the calendar month in which the tenth
anniversary of the Commencement Date occurs.
“Foreclosure
Loss” means the loss realized when the Assuming Bank has completed the
foreclosure on a Single Family Shared-Loss Loan and realized final recovery on
the collateral through liquidation and recovery of all insurance
proceeds. Each Foreclosure Loss shall be calculated in accordance
with the form and methodology specified in Exhibit 2a or Exhibit
2a(1).
“Investor-Owned
Residential Loans” means Loans, excluding advances made pursuant to Home
Equity Loans, that are secured by mortgages on one- to four family residences or
stock of cooperative housing associations that are not owner-occupied. These
loans can be treated as Restructured Loans on a commercially reasonable basis
and can be a restructured under terms separate from the Exhibit 5
standards. Please refer to Exhibit 2b for guidance in Calculation of
Loss for Restructured Loans.
“Loss”
means a Foreclosure Loss, Restructuring Loss, Short Sale Loss, Portfolio Loss,
Modification Default Loss or Deficient Valuation.
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“Loss
Amount” means the dollar amount of loss incurred and reported on the
Monthly Certificate for a Single Family Shared-Loss Loan.
“Modification
Default Loss” means the loss calculated in Exhibits 2a(1) and 2c(1) for
single family loans modified under this part of the agreement that default and
result in a foreclosure or short sale.
“Modification
Guidelines” has
the meaning provided in Section 2.1(a) of this Single Family Shared-Loss
Agreement.
“Monthly
Certificate” has the meaning provided in Section 2.1(b) of this Single
Family Shared-Loss Agreement.
“Monthly
Loss Amount” means the sum of all Foreclosure Losses, Restructuring
Losses, Short Sale Losses, Portfolio Losses, Modification Default Losses and
losses in connection with Deficient Valuations realized by the Assuming Bank for
any Shared Loss Month.
“Monthly
Shared-Loss Amount” means the change in the Cumulative Shared-Loss Amount
from the beginning of each month to the end of each month.
“Neutral
Member” has the meaning provided in Section 2. 1(f)(ii) of this Single
Family Shared-Loss Agreement.
“Portfolio
Loss” means the loss realized on either (i) a portfolio sale of Single
Family Shared-Loss Loans in accordance with the terms of Article IV or (ii) the
sale of a loan with the consent of the Receiver as provided in Section 2.7.
“Recovery
Amount” means, with respect to any period prior to the Termination Date,
the amount of collected funds received by the Assuming Bank that (i) are
applicable against a Foreclosure Loss which has previously been paid to the
Assuming Bank by the Receiver or (ii) gains realized from a Section 4.1 sale of
Single Family Shared-Loss Loans for which the Assuming Bank has previously
received a Restructuring Loss payment from the Receiver (iii) or any incentive
payments from national programs paid to an investor or borrower on loans that
have been modified or otherwise treated (short sale or foreclosure) in
accordance with Exhibit 5.
“Restructuring
Loss” means the loss on a modified or restructured loan measured by the
difference between (a) the principal, Accrued Interest, tax and insurance
advances, third party or other fees due on a loan prior to the modification or
restructuring, and (b) the net present value of estimated cash flows on the
modified or restructured loan, discounted at the Then-Current Interest Rate.
Each Restructuring Loss shall be calculated in accordance with the form and
methodology attached as Exhibit 2b, as applicable.
“Restructured
Loan” means a Single Family Shared-Loss Loan for which the Assuming Bank
has received a Restructuring Loss payment from the Receiver. This
applies to owner occupied and investor owned residences.
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“Servicing
Officer” has the meaning provided in Section 2.1(b) of this Single Family
Shared-Loss Agreement.
“Shared
Loss Payment Trigger” means when the sum of the Cumulative Loss Amount
under this Single Family Shared-Loss Agreement and the Shared-Loss Amount under
the Commercial and Other Assets Shared-Loss Agreement, exceeds the First Loss
Tranche. If the First Loss Tranche is zero or a negative number, the
Shared Loss Payment Trigger shall be deemed to have been reached upon Bank
Closing.
“Shared-Loss
Month” means each calendar month between the Commencement Date and the
last day of the month in which the tenth anniversary of the Commencement Date
occurs, provided that, the first Shared-Loss Month shall begin on the
Commencement Date and end on the last day of that month.
“Short-Sale
Loss” means the loss resulting from the Assuming Bank’s agreement with
the mortgagor to accept a payoff in an amount less than the balance due on the
loan (including the costs of any cash incentives to borrower to agree to such
sale or to maintain the property pending such sale), further provided, that each
Short-Sale Loss shall be calculated in accordance with the form and methodology
specified in Exhibit 2c or Exhibit 2c(1).
“Single
Family Shared-Loss Loans” means the single family one-to-four residential
mortgage loans (whether owned by the Assuming Bank or any Subsidiary) identified
on Schedule 4.15A of the Purchase and Assumption Agreement.
“Stated Threshold” means
total losses under the shared loss agreements in the amount of ($
526,000,000.00).
“Termination
Date” means the last day of the Final Shared-Loss Recovery
Month.
“Then-Current
Interest Rate” means the most recently published Xxxxxxx Mac survey rate
for 30-year fixed-rate loans.
“Third
Party Servicer” means any servicer appointed from time to time by the
Assuming Bank or any Affiliate of the Assuming Bank to service the Shared-Loss
Loans on behalf of the Assuming Bank, the identity of which shall be given to
the Receiver prior to or concurrent with the appointment thereof.
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ARTICLE
II — SHARED-LOSS ARRANGEMENT
2.1 Shared-Loss
Arrangement.
(a) Loss
Mitigation and Consideration of Alternatives. For each Single Family
Shared-Loss Loan in default or for which a default is reasonably foreseeable,
the Assuming Bank shall undertake reasonable and customary loss mitigation
efforts, in accordance with any of the following programs selected by Assuming
Bank in its sole discretion, Exhibit 5 (FDIC Mortgage Loan Modification
Program), the United States Treasury's Home Affordable Modification Program
Guidelines or any other modification program approved by the United States
Treasury Department, the Corporation, the Board of Governors of the Federal
Reserve System or any other governmental agency (it being understood that the
Assuming Bank can select different programs for the various Single Family
Shared-Loss Loans) (such program chosen, the “Modification Guidelines”). After
selecting the applicable Modification Guideline for any such Single Family
Shared-Loss Loan, the Assuming Bank shall document its consideration of
foreclosure, loan restructuring under such Modification Guideline chosen, and
short-sale (if short-sale is a viable option) alternatives and shall select the
alternative the Assuming Bank believes, based on its estimated calculations,
will result in the least Loss. Losses on Home Equity Loans shall be
shared under the charge-off policies of the Assuming Bank’s Examination Criteria
as if they were Single Family Shared-Loss Loans with respect to the calculation
of the Stated Threshold. Assuming Bank shall retain its calculations
of the estimated loss under each alternative, such calculations to be provided
to the Receiver upon request. For the avoidance of doubt and
notwithstanding anything herein to the contrary, (i) the Assuming Bank is not
required to modify or restructure any Single Family Shared-Loss Loan on more
than one occasion and (ii) the Assuming Bank is not required to consider any
alternatives with respect to any Shared-Loss Loan in the process of foreclosure
as of the Bank Closing and shall be entitled to continue such foreclosure
measures and recover the Foreclosure Loss as provided herein, and
(iii) the Assuming Bank shall have a transition period of up to 90
days after Bank Closing to implement the Modification Guidelines, during which
time, the Assuming Bank may submit claims under such guidelines as may be in
place at the Failed Bank.
(b) Monthly
Certificates.
Not later
than fifteen (15) days after the end of each Shared-Loss Month, beginning with
the month in which the Commencement Date occurs and ending in the month in which
the tenth anniversary of the Commencement Date occurs, the Assuming Bank shall
deliver to the Receiver a certificate, signed by an officer of the Assuming Bank
involved in, or responsible for, the administration and servicing of the Single
Family Shared-Loss Loans whose name appears on a list of servicing officers
furnished by the Assuming Bank to the Receiver, (a “Servicing Officer”) setting
forth in such form and detail as the Receiver may reasonably specify (a “Monthly
Certificate”):
(i) (A)
a schedule substantially in the form of Exhibit 1 listing:
(i) each
Single Family Shared-Loss Loan for which a Loss Amount (calculated in accordance
with the applicable Exhibit) is being claimed, the related Loss Amount for each
Single Family Shared-Loss Loan, and the total Monthly Loss Amount for all Single
Family Shared-Loss Loans;
(ii) each
Single Family Shared-Loss Loan for which a Recovery Amount was received, the
Recovery Amount for each Single Family Shared-Loss Loan, and the total Recovery
Amount for all Single Family Shared-Loss Loans;
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(iii) the
total Monthly Loss Amount for all Single Family Shared-Loss Loans minus the
total monthly Recovery Amount for all Single Family Shared-Loss
Loans;
(iv) the
Cumulative Shared-Loss Amount as of the beginning and end of the
month;
(v) the
Monthly Shared Loss Amount;
(vi) the
result obtained in (v) times 80%, or times 95% if the Stated Threshold has been
reached, which in either case is the amount to be paid under Section 2.1(d) of
this Single Family Shared-Loss Agreement by the Receiver to the Assuming Bank if
the amount is a positive number, or by the Assuming Bank to the Receiver if the
amount is a negative number;
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(ii)
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(B)
for each of the Single Family Shared-Loss Loans for which a Loss is
claimed for that Shared-Loss Month, a schedule showing the calculation of
the Loss Amount using the form and methodology shown in Exhibit 2a,
Exhibit 2b, or Exhibit 2c, as
applicable.
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(iii)
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(C) For
each of the Restructured Loans where a gain or loss is realized in a sale
under Section 4.1 or 4.2, a schedule showing the calculation using the
form and methodology shown in Exhibit
2d.
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(iv)
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(D) a
portfolio performance and summary schedule substantially in the form shown
in Exhibit 3.
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(c) Monthly
Data Download. Not later than fifteen (15) days after the end of each
month, beginning with the month in which the Commencement Date occurs and ending
with the Final Shared-Loss Recovery Month, Assuming Bank shall provide
Receiver:
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(v)
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(i)
the
servicing file in machine-readable format including but not limited to the
following fields for each outstanding Single Family Shared-Loss Loan, as
applicable:
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(A) Loan
number
(B)
FICO score
(C)
Origination date
(D)
Original principal amount
(E)
Maturity date
(F)
Paid-to date
(G)
Last payment date
(H)
Loan status (bankruptcy, in foreclosure, etc.)
(I)
Delinquency counters
(J)
Current principal balance
(K)
Current escrow account balance
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(L)
Current Appraisal/BPO value
(M)
Current Appraisal/BPO date
(N) Interest
rate
(O) Monthly
principal and interest payment amount
(P)
Monthly escrow payment for taxes and insurance
(Q) Interest
rate type (fixed or adjustable)
(R)
If adjustable: index, margin, next interest rate reset date
(S)
Payment/Interest rate cap and/or floor
(T)
Underwriting type (Full doc, Alt Doc, No Doc)
(U)
Lien type (1st, 2nd)
(V)
Amortization type (amortizing or I/O)
(W) Property
address, including city, state, zip code
(X)
A code indicating whether the Mortgaged Property is owner
occupied
(Y)
Property type (single-family detached, condominium, duplex,
etc.)
(vi) (ii)
An Excel file for ORE held as a result of foreclosure on a Single Family
Shared-Loss Loan listing:
(A)
Foreclosure date
(B)
Unpaid loan principal balance
(C)
Appraised value or BPO value, as applicable
(D)
Projected liquidation date
Notwithstanding
the foregoing, the Assuming Bank shall not be required to provide any of the
foregoing information to the extent it is unable to do so as a result of the
Failed Bank’s or Receiver’s failure to provide information required to produce
the information set forth in this Section 2.1(c); provided, that the Assuming Bank
shall, consistent with Customary Servicing Procedures seek to produce any such
missing information or improve any inaccurate information previously provided to
it.
(d) Payments
With Respect to Shared-Loss Assets.
(i) Losses
Under the Stated Threshold. After the Shared Loss Payment Trigger is
reached, not later than fifteen (15) days after the date on which the Receiver
receives the Monthly Certificate, the Receiver shall pay to the Assuming Bank,
in immediately available funds, an amount equal to eighty percent (80%) of the
Monthly Shared-Loss Amount reported on the Monthly Certificate. If the total
Monthly Shared-Loss Amount reported on the Monthly Certificate is a negative
number, the Assuming Bank shall pay to the Receiver in immediately available
funds eighty percent (80%) of that amount.
(ii)
Losses in
Excess of the Stated Threshold. In the event that the sum of the
Cumulative Loss Amount under this Single Family Shared-Loss Agreement and the
Stated Loss Amount under the Commercial Shared-Loss Agreement meets or exceeds
the Stated Threshold, the loss/recovery sharing percentages set forth herein
shall change from 80/20 to 95/5 and thereafter the Receiver shall pay to the
Assuming Bank, in immediately available funds, an amount equal to ninety-five
percent (95%) of the Monthly Shared-Loss Amount reported on the Monthly
Certificate. If the Monthly Shared-Loss Amount reported on the Monthly
Certificate is a negative number, the Assuming Bank shall pay to the Receiver in
immediately available funds ninety-five percent (95%) of that
amount.
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(e) Limitations
on Shared-Loss Payment. The Receiver shall not be required to make any
payments pursuant to Section 2.1(d) with respect to any Foreclosure Loss,
Restructuring Loss, Short Sale Loss or Portfolio Loss that the Receiver
determines, based upon the criteria set forth in this Single Family Shared-Loss
Agreement (including the analysis and documentation requirements of Section
2.1(a)) or Customary Servicing Procedures, should not have been effected by the
Assuming Bank; provided, however, (x) the Receiver must provide notice to the
Assuming Bank detailing the grounds for not making such payment, (y) the
Receiver must provide
the Assuming Bank with a reasonable opportunity to cure any such deficiency and
(z) (1) to the extent curable, if cured, the Receiver shall make payment with
respect to the properly effected Loss, and (2) to the extent not curable,
notwithstanding the foregoing, the Receiver shall make a payment as to all
Losses (or portion of Losses) that were effected which would have been payable
as a Loss if the Assuming Bank had properly effected such Loss. In the event
that the Receiver does not make any payment with respect to Losses claimed
pursuant to Section 2.1(d), the Receiver and Assuming Bank shall, upon final
resolution, make the necessary adjustments to the Monthly Shared-Loss Amount for
that Monthly Certificate and the payment pursuant to Section 2.1(d) above shall
be adjusted accordingly.
(f) Payments
by Wire-Transfer. All payments under this Single Family Shared-Loss
Agreement shall be made by wire-transfer in accordance with the wire-transfer
instructions on Exhibit 4.
2.2
Auditor Report; Right
to Audit.
(a) Within
ninety (90) days after the end of each fiscal year during which the Receiver
makes any payment to the Assuming Bank under this Single Family Shared-Loss
Agreement, the Assuming Bank shall deliver to the Corporation and to the
Receiver a report signed by its independent public accountants stating that they
have reviewed the terms of this Single Family Shared-Loss Agreement and that, in
the course of their annual audit of the Assuming Bank’s books and records,
nothing has come to their attention suggesting that any computations required to
be made by the Assuming Bank during such year pursuant to this Article II were
not made by the Assuming Bank in accordance herewith. In the event that the
Assuming Bank cannot comply with the preceding sentence, it shall promptly
submit to the Receiver corrected computations together with a report signed by
its independent public accountants stating that, after giving effect to such
corrected computations, nothing has come to their attention suggesting that any
computations required to be made by the Assuming Bank during such year pursuant
to this Article II were not made by the Assuming Bank in accordance herewith. In
such event, the Assuming Bank and the Receiver shall make all such accounting
adjustments and payments as may be necessary to give effect to each correction
reflected in such corrected computations, retroactive to the date on which the
corresponding incorrect computation was made. It is the intention of this
provision to align the timing of the audit required under this Single-Family
Shared-Loss Agreement with the examination audit required pursuant to 12 CFR
Section 363.
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(b) The
Receiver or the FDIC in its corporate capacity (“Corporation”) may perform an
audit or audits to determine the Assuming Bank’s compliance with the provisions
of this Single Family Shared-Loss Agreement, including this Article II, by
providing not less than ten (10) Business Days’ prior written notice. Assuming
Bank shall provide access to pertinent records and proximate working space in
Assuming Bank’s facilities. The scope and duration of any such audit shall be
within the reasonable discretion of the Receiver or the Corporation, but shall
in no event be administered in a manner that unreasonably interferes with the
operation of the Assuming Bank’s business. The Receiver or the Corporation, as
the case may be, shall bear the expense of any such audit. In the event that any
corrections are necessary as a result of such an audit or audits, the Assuming
Bank and the Receiver shall make such accounting adjustments and payments as may
be necessary to give retroactive effect to such corrections.
2.3 Withholdings.
Notwithstanding any other provision in this Article II, the Receiver, upon the
direction of the Director (or designee) of the Federal Deposit Insurance
Corporation’s Division of Resolutions and Receiverships, may withhold payment
for any amounts included in a Monthly Certificate delivered pursuant to Section
2.1, if in its good faith and reasonable judgment there is a reasonable basis
under the requirements of this Single Family Shared-Loss Agreement for denying
the eligibility of an item for which reimbursement or payment is sought under
such Section. In such event, the Receiver shall provide a written notice to the
Assuming Bank detailing the grounds for withholding such payment. At such time
as the Assuming Bank demonstrates to the satisfaction of the Receiver, in its
reasonable judgment, that the grounds for such withholding of payment, or
portion of payment, no longer exist or have been cured, then the Receiver shall
pay the Assuming Bank the amount withheld which the Receiver determines is
eligible for payment, within fifteen (15) Business
Days.
2.4 Books and
Records. The Assuming Bank shall at all times during the term of this
Single Family Shared-Loss Agreement keep books and records sufficient to ensure
and document compliance with the terms of this Single Family Shared-Loss
Agreement, including but not limited to (a) documentation of alternatives
considered with respect to defaulted loans or loans for which default is
reasonably foreseeable, (b) documentation showing the calculation of loss for
claims submitted to the Receiver, (c) retention of documents that support each
line item on the loss claim forms, and (d) documentation with respect to the
Recovery Amount on loans for which the Receiver has made a loss-share
payment
2.5 Information.
The Assuming Bank shall promptly provide to the Receiver such other information,
including but not limited to, financial statements, computations, and bank
policies and procedures, relating to the performance of the provisions of this
Single Family Shared-Loss Agreement, as the Receiver may reasonably request from
time to time.
2.6 Tax
Ruling. The Assuming Bank shall not at any time, without the Receiver’s
prior written consent, seek a private letter ruling or other determination from
the Internal Revenue Service or otherwise seek to qualify for any special tax
treatment or benefits associated with any payments made by the Receiver pursuant
to this Single Family Shared-Loss Agreement.
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2.7 Sale of
Single Family Shared-Loss Loans. The Receiver shall be relieved of its
obligations with respect to a Single Family Shared-Loss Loan upon payment of a
Foreclosure Loss amount or a Short Sale Loss amount with respect to such Single
Family Shared-Loss Loan or upon the sale of a Single Family Shared-Loss Loan by
Assuming Bank to a person or entity that is not an Affiliate; provided, however,
that if the Receiver consents to the sale of any such Single Family Shared-Loss
Loan, any loss on such sale shall be a Portfolio Loss. The Assuming
Bank shall provide the Receiver with timely notice of any such sale.
Notwithstanding the foregoing, a sale of the Single Family Shared-Loss Loan, for
purposes of this Section 2.7, shall not be deemed to have occurred as the result
of (i) any change in the ownership or control of Assuming Bank or the transfer
of any or all of the Single Family Shared-Loss Loan(s) to any Affiliate of
Assuming Bank, (ii) a merger by Assuming Bank with or into any other entity, or
(iii) a sale by Assuming Bank of all or substantially all of its assets.
ARTICLE
III - RULES REGARDING THE ADMINISTRATION OF SINGLE FAMILY
SHARED-LOSS
LOANS
3.1 Agreement
with Respect to Administration. The Assuming Bank shall (and shall cause
any of its Affiliates to which the Assuming Bank transfers any Single Family
Shared-Loss Loans to) manage, administer, and collect the Single Family
Shared-Loss Loans while owned by the Assuming Bank or any Affiliate thereof
during the term of this Single Family Shared-Loss Agreement in accordance with
the rules set forth in this Article III. The Assuming Bank shall be responsible
to the Receiver in the performance of its duties hereunder and shall provide to
the Receiver such reports as the Receiver reasonably deems advisable, including
but not limited to the reports required by Sections 2.1, 2.2 and 3.3 hereof, and
shall permit the Receiver to monitor the Assuming Bank’s performance of its
duties hereunder.
3.2 Duties of
the Assuming Bank. (a) In performance of its duties under this Article
III, the Assuming Bank shall:
(i)
manage and administer each Single Family Shared-Loss Loan in accordance with
Assuming Bank’s usual and prudent business and banking practices and Customary
Servicing Procedures;
(ii)
exercise its best business judgment in managing, administering and collecting
amounts owed on the Single Family Shared-Loss Loans;
(iii) use
commercially reasonable efforts to maximize Recoveries with respect to Losses on
Single Family Shared-Loss Loans without regard to the effect of maximizing
collections on assets held by the Assuming Bank or any of its Affiliates that
are not Single Family Shared-Loss Loans;
(iv)
retain sufficient staff (in Assuming Bank’s discretion) to perform its duties
hereunder; and
(v) other
than as provided in Section 2.1(a), comply with the terms of the Modification
Guidelines for any Single Family Shared-Loss Loans meeting the requirements set
forth therein. For the avoidance of doubt, the Assuming Bank may propose
exceptions to Exhibit 5 (the FDIC Loan Modification Program) for a group of
Loans with similar characteristics, with the objectives of (1) minimizing the
loss to the Assuming Bank and the FDIC and (2) maximizing the opportunity for
qualified homeowners to remain in their homes with affordable mortgage
payments.
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(b) Any
transaction with or between any Affiliate of the Assuming Bank with respect to
any Single Family Shared-Loss Loan including, without limitation, the execution
of any contract pursuant to which any Affiliate of the Assuming Bank will
manage, administer or collect any of the Single Family Shared-Loss Loans will be
provided to FDIC for informational purposes and if such transaction is not
entered into on an arm’s length basis on commercially reasonable terms such
transaction shall be subject to the prior written approval of the
Receiver.
3.3 Shared-Loss
Asset Records and Reports. The Assuming Bank shall establish and maintain
such records as may be appropriate to account for the Single Family Shared-Loss
Loans in such form and detail as the Receiver may reasonably require, and to
enable the Assuming Bank to prepare and deliver to the Receiver such reports as
the Receiver may from time to time request regarding the Single Family
Shared-Loss Loans and the Monthly Certificates required by Section 2.1 of this
Single Family Shared-Loss Agreement.
3.4
Related
Loans.
(a) Assuming
Bank shall use its best efforts to determine which loans are “Related Loans”, as
hereinafter defined. The Assuming Bank shall not manage, administer or collect
any “Related Loan” in any manner that would have the effect of increasing the
amount of any collections with respect to the Related Loan to the detriment of
the Single Family Shared-Loss Loan to which such loan is related. A “Related
Loan” means any loan or extension of credit held by the Assuming Bank at any
time on or prior to the end of the Final Shared-Loss Month that is made to an
Obligor of a Single Family Shared-Loss Loan.
(b) The
Assuming Bank shall prepare and deliver to the Receiver with the Monthly
Certificates for the calendar months ending June 30 and December 31, a schedule
of all Related Loans on the Accounting Records of the Assuming Bank as of the
end of each such semi-annual period.
3.5
Legal
Action; Utilization of Special Receivership Powers. The Assuming Bank
shall notify the Receiver in writing (such notice to be given in accordance with
Article V below and to include all relevant details) prior to utilizing in any
legal action any special legal power or right which the Assuming Bank derives as
a result of having acquired an asset from the Receiver, and the Assuming Bank
shall not utilize any such power unless the Receiver shall have consented in
writing to the proposed usage. The Receiver shall have the right to direct such
proposed usage by the Assuming Bank and the Assuming Bank shall comply in all
respects with such direction. Upon request of the Receiver, the Assuming Bank
will advise the Receiver as to the status of any such legal action. The Assuming
Bank shall immediately notify the Receiver of any judgment in litigation
involving any of the aforesaid special powers or rights.
3.6 Third
Party Servicer. The Assuming Bank may perform any of its obligations
and/or exercise any of its rights under this Single Family Shared-Loss Agreement
through or by one or more Third Party Servicers, who may take actions and make
expenditures as if any such Third Party Servicer was the Assuming Bank hereunder
(and, for the avoidance of doubt, such expenses incurred by any such Third Party
Servicer on behalf of the Assuming Bank shall be included in calculating Losses
to the extent such expenses would be included in such calculation if the
expenses were incurred by Assuming Bank); provided, however, that the use
thereof by the Assuming Bank shall not release the Assuming Bank of any
obligation or liability hereunder.
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ARTICLE
IV – PORTFOLIO SALE
4.1
Assuming
Bank Portfolio Sales of Remaining Single Family Shared-Loss Loans. The
Assuming Bank shall have the right with the concurrence of the Receiver to
liquidate for cash consideration, from time to time in one or more transactions,
all or a portion of Single Family Shared-Loss Loans held by the Assuming Bank at
any time prior to the Termination Date (“Portfolio Sales”). If the Assuming Bank
exercises its option under this Section 4.1, it must give thirty (30) days
notice in writing to the Receiver setting forth the details and schedule for the
Portfolio Sale which shall be conducted by means of sealed bid sales to third
parties, not including any of the Assuming Bank’s affiliates, contractors, or
any affiliates of the Assuming Bank’s contractors. Sales of Restructured Loans
shall be sold in a separate pool from Single Family Shared-Loss Loans not
restructured. The Receiver’s review of the Assuming Bank’s proposed Portfolio
Sale will be considered in a timely fashion and approval will not be
unreasonably withheld, delayed or conditioned.
4.2 Assuming
Bank’s Liquidation of Remaining Single Family Shared-Loss Loans. In the
event that the Assuming Bank does not conduct a Portfolio Sale pursuant to
Section 4.1, the Receiver shall have the right, exercisable in its sole and
absolute discretion, to require the Assuming Bank to liquidate for cash
consideration, any Single Family Shared-Loss Loans held by the Assuming Bank at
any time after the date that is six months prior to the Termination Date. If the
Receiver exercises its option under this Section 4.2, it must give notice in
writing to the Assuming Bank, setting forth the time period within which the
Assuming Bank shall be required to liquidate the Single Family Shared-Loss
Loans. The Assuming Bank will comply with the Receiver’s notice and must
liquidate the Single Family Shared-Loss Loans as soon as reasonably practicable
by means of sealed bid sales to third parties, not including any of the Assuming
Bank’s affiliates, contractors, or any affiliates of the Assuming Bank’s
contractors. The selection of any financial advisor or other third party broker
or sales agent retained for the liquidation of the remaining Single Family
Shared-Loss Loans pursuant to this Section shall be subject to the prior
approval of the Receiver, such approval not to be unreasonably withheld, delayed
or conditioned.
4.3 Calculation
of Sale Gain or Loss. For Single Family Shared-Loss Loans that are not
Restructured Loans gain or loss on the sales under Section 4.1 or Section 4.2
will be calculated as the sale price received by the Assuming Bank less the
unpaid principal balance of the remaining Single Family Shared-Loss Loans. For
any Restructured Loan included in the sale gain or loss on sale will be
calculated as (a) the sale price received by the Assuming Bank less (b) the net
present value of estimated cash flows on the Restructured Loan that was used in
the calculation of the related Restructuring Loss plus (c) Loan principal
payments collected by the Assuming Bank from the date the Loan was restructured
to the date of sale. (See Exhibit 2d for example calculation).
ARTICLE
V — LOSS-SHARING NOTICES GIVEN TO RECEIVER AND PURCHASER
All
notices, demands and other communications hereunder shall be in writing and
shall be delivered by hand, or overnight courier, receipt requested, addressed
to the parties as follows:
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If
to Receiver, to:
|
Federal
Deposit Insurance Corporation as Receiver
|
|
for
XXXXX UNION BANK AND
TRUST
|
|
|
COMPANY
|
|
|
Division
of Resolutions and Receiverships
|
|
|
000
00xx Xxxxxx, X.X.
|
|
|
Xxxxxxxxxx,
X.X. 00000
|
|
|
Attention:
Xxxxx Malami, Manager, Capital Markets
|
|
|
with
a copy to:
|
Federal
Deposit Insurance Corporation
|
|
as
Receiver for XXXXX UNION
BANK AND
|
|
|
TRUST
COMPANY
|
|
|
Room
E7056
|
|
|
0000
Xxxxxxx Xxxxx, Xxxxxxxxx, XX 2226
|
|
|
Attn:
Special Issues Unit
|
|
|
With
respect to a notice under Section 3.5 of this Single Family Shared-Loss
Agreement, copies of such notice shall be sent to:
|
|
|
Federal
Deposit Insurance Corporation
|
|
|
Legal
Division 0000 Xxxxx Xx.
|
|
|
Xxxxxx,
Xxxxx 00000
|
|
|
Attention:
Regional Counsel
|
|
|
If
to Assuming Bank, to:
|
|
|
J.
Xxxxxxxx Xxxx
|
|
|
EVP
& Chief Financial Officer
|
|
|
First
Financial Bank, National Association
|
|
|
0000
Xxxxx Xxxx, Xxxxx 000
|
|
|
Xxxxxxxxxx,
Xxxx 00000
|
|
|
(000)
000-0000
|
|
|
with
a copy to:
|
|
|
Xxxxxxx
Xxxxxxxx
|
|
|
Senior
Vice President and General Counsel
|
|
|
(000)
000-0000
|
|
Such
Persons and addresses may be changed from time to time by notice given pursuant
to the provisions of this Article V. Any notice, demand or other communication
delivered pursuant to the provisions of this Article V shall be deemed to have
been given on the date actually received.
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ARTICLE
VI — MISCELLANEOUS
6.1.
Expenses. Except
as otherwise expressly provided herein, all costs and expenses incurred by or on
behalf of a party hereto in connection with this Single Family Shared-Loss
Agreement shall be borne by such party whether or not the transactions
contemplated herein shall be consummated.
6.2 Successors
and Assigns; Specific Performance. All terms and
provisions of this Single Family Shared-Loss Agreement
shall be binding upon and shall inure to the benefit of the parties hereto only;
provided, however, that, Receiver may assign or
otherwise transfer this Single FamilyShared-Loss Agreement (in whole or in part)
to the Federal Deposit Insurance Corporation in its corporate capacity without
the consent of Assuming Bank. Notwithstanding anything to the
contrary contained in this Single FamilyShared-Loss Agreement, except as is
expressly permitted in this Section 6.2, Assuming Bank may not assign or
otherwise transfer this Single Family Shared-Loss Agreement (in whole or in
part) without the prior written consent of the Receiver, which consent may be
granted or withheld by the Receiver in its sole discretion, and any attempted
assignment or transfer in violation of this provision shall be void ab initio. For the
avoidance of doubt, a merger or consolidation of the Assuming Bank with and into
another financial institution, the sale of all or substantially all of the
assets of the Assuming Bank to another financial institution constitutes the
transfer of this Single Family Shared-Loss Agreement which requires the consent
of the Receiver; and for a period of thirty-six (36) months after
Bank Closing, a merger or consolidation shall also include the sale by any
individual shareholder, or shareholders acting in concert, of more than 9% of
the outstanding shares of the Assuming Bank, or of its holding company, or of
any subsidiary holding Shared-Loss Assets, or the sale of shares by the Assuming
Bank or its holding company or any subsidiary holding Shared-Loss Assets, in a
public or private offering, that increases the number of shares outstanding by
more than 9%, constitutes the transfer of this Single FamilyShared-Loss
Agreement which requires the consent of the Receiver. However, no
Loss shall be recognized as a result of any accounting adjustments that are made
due to any such merger, consolidation or sale consented to by the
FDIC. The FDIC’s consent shall not be required if the aggregate
outstanding principal balance of Shared-Loss Assets is less than twenty percent
(20%) of the initial aggregate balance of Shared-Loss
Assets.
6.3 Governing
Law. This Single Family Shared-Loss Agreement shall be construed in
accordance with federal law, or, if there is no applicable federal law, the laws
of the State of New York, without regard to any rule of conflict of law that
would result in the application of the substantive law of any jurisdiction other
than the State of New York.
6.4 WAIVER OF
JURY TRIAL. EACH PARTY HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY
WAIVES ALL RIGHT TO TRIAL BY JURY IN OR TO HAVE A JURY PARTICIPATE IN RESOLVING
ANY DISPUTE, ACTION, PROCEEDING OR COUNTERCLAIM, WHETHER SOUNDING IN CONTRACT,
TORT OR OTHERWISE, ARISING OUT OF OR RELATING TO OR IN CONNECTION WITH THIS
SINGLE FAMILY SHARED-LOSS AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED
HEREBY.
6.5
Captions.
All captions and headings contained in this Single Family Shared-Loss Agreement
are for convenience of reference only and do not form a part of, and shall not
affect the meaning or interpretation of, this Single Family Shared-Loss
Agreement.
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6.6
Entire
Agreement; Amendments. This Single Family Shared-Loss Agreement, along
with the Commercial Shared-Loss Agreement and the Purchase and Assumption
Agreement, including the Exhibits and any other documents delivered pursuant
hereto or thereto, embody the entire agreement of the parties with respect to
the subject matter hereof, and supersede all prior representations, warranties,
offers, acceptances, agreements and understandings, written or oral, relating to
the subject matter herein. This Single Family Shared-Loss Agreement may be
amended or modified or any provision thereof waived only by a written instrument
signed by both parties or their respective duly authorized agents.
6.7 Severability.
Whenever possible, each provision of this Single Family Shared-Loss Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Single Family Shared-Loss Agreement
is held to be prohibited by or invalid, illegal or unenforceable under
applicable law, such provision shall be construed and enforced as if it had been
more narrowly drawn so as not to be prohibited, invalid, illegal or
unenforceable, and the validity, legality and enforceability of the remainder of
such provision and the remaining provisions of this Single Family Shared-Loss
Agreement shall not in any way be affected or impaired thereby.
6.8 No Third
Party Beneficiary. This Single Family Shared-Loss Agreement and the
Exhibits hereto are for the sole and exclusive benefit of the parties hereto and
their respective permitted successors and permitted assigns and there shall be
no other third party beneficiaries, and nothing in this Single Family
Shared-Loss Agreement or the Exhibits shall be construed to grant to any other
Person any right, remedy or Claim under or in respect of this Single Family
Shared-Loss Agreement or any provision hereof.
6.9 Counterparts.
This Single Family Shared-Loss Agreement may be executed separately by Receiver
and Assuming Bank in any number of counterparts, each of which when executed and
delivered shall be an original, but such counterparts shall together constitute
one and the same instrument.
6.10
Consent.
Except as otherwise provided herein, when the consent of a party is required
herein, such consent shall not be unreasonably withheld or delayed.
6.11 Rights
Cumulative. Except as otherwise expressly provided herein, the rights of
each of the parties under this Single Family Shared-Loss Agreement are
cumulative, may be exercised as often as any party considers appropriate and are
in addition to each such party’s rights under the Purchase and Sale Agreement
and any of the related agreements or under law. Except as otherwise expressly
provided herein, any failure to exercise or any delay in exercising any of such
rights, or any partial or defective exercise of such rights, shall not operate
as a waiver or variation of that or any other such right.
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ARTICLE
VII
DISPUTE
RESOLUTION
7.1
Dispute Resolution
Procedures.
(a) In
the event a dispute arises about the interpretation, application, calculation of
Loss, or calculation of payments or otherwise with respect to this Single Family
Shared-Loss Agreement (“SF Shared-Loss Dispute Item”), then the Receiver and the
Assuming Bank shall make every attempt in good faith to resolve such items
within sixty (60) days following the receipt of a written description of the SF
Shared-Loss Dispute Item, with notification of the possibility of taking the
matter to arbitration (the date on which such 60-day period expires, or any
extension of such period as the parties hereto may mutually agree to in writing,
herein called the “Resolution Deadline Date”). If the Receiver and the Assuming
Bank resolve all such items to their mutual satisfaction by the Resolution
Deadline Date, then within thirty (30) days following such resolution, any
payment arising out such resolution shall be made arising from the settlement of
the SF Shared-Loss Dispute.
(b) If
the Receiver and the Assuming Bank fail to resolve any outstanding SF
Shared-Loss Dispute Items by the Resolution Deadline Date, then either party may
notify the other of its intent to submit the SF Shared-Loss Dispute Item to
arbitration pursuant to the provisions of this Article VII. Failure of either
party to notify the other of its intent to submit any unresolved SF Shared-Loss
Dispute Item to arbitration within thirty (30) days following the Resolution
Deadline Date (the date on which such thirty (30) day period expires is herein
called the “Arbitration Deadline Date”) shall be deemed an acceptance of such SF
Shared-Loss Dispute not submitted to arbitration, as well as a waiver of the
submitting party’s right to dispute such non-submitted SF Shared-Loss Dispute
Item but not a waiver of any similar claim which may arise in the
future.
(c) If
a SF Shared-Loss Dispute Item is submitted to arbitration, it shall be governed
by the rules of the American Arbitration Association (the “AAA”), except as
otherwise provided herein. Either party may submit a matter for arbitration by
delivering a notice, prior to the Arbitration Deadline Date, to the other party
in writing setting forth:
(i) A
brief description of each SF Shared-Loss Dispute Item submitted for
arbitration;
(ii) A
statement of the moving party’s position with respect to each SF Shared-Loss
Dispute Item submitted for arbitration;
(iii) The
value sought by the moving party, or other relief requested regarding each SF
Shared-Loss Dispute Item submitted for arbitration, to the extent reasonably
calculable; and
(iv) The
name and address of the arbiter selected by the moving party (the “Moving
Arbiter”), who shall be a neutral, as determined by the AAA.
Failure
to adequately include any information above shall not be deemed to be a waiver
of the parties right to arbitrate so long as after notification of such failure
the moving party cures such failure as promptly as reasonably
practicable.
(d) The non-moving party shall,
within thirty (30) days following receipt of a notice of arbitration pursuant to
this Section 7.1, deliver a notice to the moving party setting
forth:
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(i) The
name and address of the arbiter selected by the non-moving party (the
“Respondent Arbiter”), who shall be a neutral, as determined by the
AAA;
(ii) A
statement of the position of the respondent with respect to each Dispute Item;
and
(iii) The
ultimate resolution sought by the respondent or other relief, if any, the
respondent deems is due the moving party with respect to each SF Shared-Loss
Dispute Item.
Failure
to adequately include any information above shall not be deemed to be a waiver
of the non-moving party’s right to defend such arbitration so long as after
notification of such failure the non-moving party cures such failure as promptly
as reasonably practicable
(e) The
Moving Arbiter and Respondent Arbiter shall select a third arbiter from a list
furnished by the AAA. In accordance with the rules of the AAA, the three (3)
arbiters shall constitute the arbitration panel for resolution of each SF
Loss-Share Dispute Item. The concurrence of any two (2) arbiters shall be deemed
to be the decision of the arbiters for all purposes hereunder. The arbitration
shall proceed on such time schedule and in accordance with the Rules of
Commercial Arbitration of the AAA then in effect, as modified by this Section
7.1. The arbitration proceedings shall take place at such location as the
parties thereto may mutually agree, but if they cannot agree, then they will
take place at the offices of the Corporation in Washington, DC, or Arlington,
Virginia.
(f) The
Receiver and Assuming Bank shall facilitate the resolution of each outstanding
SF Shared-Loss Dispute Item by making available in a prompt and timely manner to
one another and to the arbiters for examination and copying, as appropriate, all
documents, books, and records under their respective control and that would be
discoverable under the Federal Rules of Civil Procedure.
(g) The
arbiters designated pursuant to subsections (c), (d) and (e) hereof shall
select, with respect to each Dispute Item submitted to arbitration pursuant to
this Section 7.1, either (i) the position and relief submitted by the Assuming
Bank with respect to each SF Shared-Loss Dispute Item, or (ii) the position and
relief submitted by the Receiver with respect to each SF Shared-Loss Dispute
Item, in either case as set forth in its respective notice of arbitration. The
arbiters shall have no authority to select a value for each Dispute Item other
than the determination set forth in Section 7.1(c) and Section 7.1(d). The
arbitration shall be final, binding and conclusive on the parties.
(h) Any amounts ultimately determined to be payable
pursuant to such award shall bear interest at the Settlement Interest Rate from
and including the date specified for the arbiters decisions specified in this
Section 7.1, without regard to any extension of the finality of such award, to
but not including the date paid. All payments required to be made under this
Section 7.1 shall be made by wire transfer.
(i) For the avoidance of doubt, to the extent any
notice of a SF Shared-Loss Dispute Item(s) is provided prior to the Termination
Date, the terms of this Single Family Shared-Loss Agreement shall remain in
effect with respect to the Single Family Shared-Loss Loans that are the subject
of such SF Shared-Loss Dispute Item(s) until such time as any such dispute is
finally resolved.
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7.2
Fees and Expenses of
Arbiters. The aggregate fees and expenses of the
arbiters shall be borne equally by the parties. The parties shall pay
the aggregate fees and expenses within thirty (30) days after receipt of the
written decision of the arbiters (unless the arbiters agree in writing on some
other payment schedule).
Exhibit
1
Monthly
Certificate
SEE
FOLLOWING PAGE
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Pursuant
to Section 2.1 of the Single Family Shared-Loss Agreement, the undersigned
hereby certifies the information on this Certificate is true, complete and
correct.
|
OFFICER
SIGNATURE
|
|
|
OFFICER
NAME:
|
TITLE
|
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Exhibit
2a
This
exhibit contains three versions of the loss share calculation for foreclosure,
plus explanatory notes.
Exhibit
2a(1)
CALCULATION
OF FORECLOSURE LOSS
Foreclosure
Occurred Prior to Loss Share Agreement
|
1
|
Shared-Loss
Month
|
May-09
|
|||
|
2
|
Loan
no:
|
364574
|
|||
|
3
|
REO
#
|
621
|
|||
|
4
|
Foreclosure
date
|
12/18/08
|
|||
|
5
|
Liquidation
date
|
4/12/09
|
|||
|
6
|
Note
Interest rate
|
8.100
|
% | ||
|
7
|
Most
recent BPO
|
228,000
|
|||
|
8
|
Most
recent BPO date
|
1/21/09
|
|||
|
Foreclosure Loss
calculation
|
|||||
|
9
|
Book
value at date of Loss Share agreement
|
244,900
|
|||
|
10
|
Accrued
interest, limited to 90 days or days from failure to sale, whichever is
less
|
3,306
|
|||
|
11
|
Costs
incurred after Loss Share agreement in place:
|
||||
|
12
|
Attorney's
fees
|
0
|
|||
|
Foreclosure
costs, including title search, filing fees,
|
|||||
|
13
|
advertising,
etc.
|
0
|
|||
|
14
|
Property
protection costs, maint. and repairs
|
6,500
|
|||
|
15
|
Tax
and insurance advances
|
0
|
|||
|
Other
Advances
|
|||||
|
16
|
Appraisal/Broker's
Price Opinion fees
|
0
|
|||
|
17
|
Inspections
|
0
|
|||
|
18
|
Other
|
0
|
|||
|
19
|
Gross
balance recoverable by Purchaser
|
254,706
|
|||
|
Cash Recoveries:
|
|||||
|
20
|
Net
liquidation proceeds (from HUD-1 settl stmt)
|
219,400
|
|||
|
21
|
Hazard
Insurance proceeds
|
0
|
|||
|
22
|
Mortgage
Insurance proceeds
|
0
|
|||
|
23
|
T
& I escrow account balances, if positive
|
0
|
|||
|
24
|
Other
credits, if any (itemize)
|
0
|
|||
|
25
|
Total
Cash Recovery
|
219,400
|
|||
|
26
|
Loss
Amount
|
35,306
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Exhibit
2a(2)
CALCULATION
OF FORECLOSURE LOSS
No
Preceeding Loan Mod under Loss Share
|
1
|
Shared-Loss
Month
|
May-09
|
|||
|
2
|
Loan
no:
|
292334
|
|||
|
3
|
REO
#
|
477
|
|||
|
4
|
Interest
paid-to-date
|
4/30/08
|
|||
|
5
|
Foreclosure
date
|
1/15/09
|
|||
|
6
|
Liquidation
date
|
4/12/09
|
|||
|
7
|
Note
Interest rate
|
8.000%
|
|||
|
8
|
Owner
occupied?
|
Yes
|
|||
|
9
|
If
owner-occupied:
|
||||
|
10
|
Borrower
current gross annual income
|
42,000
|
|||
|
11
|
Estimated
NPV of loan mod
|
195,000
|
|||
|
12
|
Most
recent BPO
|
235,000
|
|||
|
13
|
Most
recent BPO date
|
1/21/09
|
|||
|
Foreclosure
Loss calculation
|
|||||
|
16
|
Loan
Principal balance after last paid installment
|
300,000
|
|||
|
17
|
Accrued
interest, limited to 90 days
|
6,000
|
|||
|
18
|
Attorney's
fees
|
0
|
|||
|
19
|
Foreclosure
costs, including title search, filing fees, advertising,
etc.
|
4,000
|
|||
|
20
|
Property
protection costs, maint. and repairs
|
5,500
|
|||
|
21
|
Tax
and insurance advances
|
1,500
|
|||
| Other Advances | |||||
|
22
|
Appraisal/Broker's
Price Opinion fees
|
0
|
|||
|
23
|
Inspections
|
50
|
|||
|
24
|
Other
|
0
|
|||
|
25
|
Gross
balance recoverable by Purchaser
|
317,050
|
|||
|
Cash
Recoveries:
|
|||||
|
26
|
Net
liquidation proceeds (from HUD-1 settl stmt)
|
205,000
|
|||
|
27
|
Hazard
Insurance proceeds
|
0
|
|||
|
28
|
Mortgage
Insurance proceeds
|
0
|
|||
|
29
|
T
& I escrow account balances, if positive
|
0
|
|||
|
30
|
Other
credits, if any (itemize)
|
0
|
|||
|
31
|
Total
Cash Recovery
|
205,000
|
|||
|
32
|
Loss
Amount
|
112,050
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Exhibit
2a(3)
CALCULATION
OF FORECLOSURE LOSS
Foreclosure
after a Covered Loan Mod
|
1
|
Shared-Loss
Month
|
May-09
|
|||
|
2
|
Loan
no:
|
138554
|
|||
|
3
|
REO
#
|
843
|
|||
|
4
|
Loan
mod date
|
1/17/08
|
|||
|
5
|
Interest
paid-to-date
|
4/30/08
|
|||
|
6
|
Foreclosure
date
|
1/15/09
|
|||
|
7
|
Liquidation
date
|
4/12/09
|
|||
|
8
|
Note
Interest rate
|
4.000
|
% | ||
|
9
|
Most
recent BPO
|
210,000
|
|||
|
10
|
Most
recent BPO date
|
1/20/09
|
|||
|
|
|||||
|
Foreclosure Loss
calculation
|
|
||||
|
11
|
NPV
of projected cash flows at loan mod
|
285,000
|
|||
|
12
|
Less:
Principal payments between loan mod and deliquency
|
2,500
|
|||
|
13
|
Plus:
|
||||
|
14
|
Attorney's
fees
|
0
|
|||
|
15
|
Foreclosure
costs, including title search, filing fees, advertising,
etc.
|
4,000
|
|||
|
16
|
Property
protection costs, maint. and repairs
|
7,000
|
|||
|
17
|
Tax
and insurance advances
|
2,000
|
|||
|
18
|
Other
Advances
|
||||
|
19
|
Appraisal/Broker's
Price Opinion fees
|
0
|
|||
|
20
|
Inspections
|
0
|
|||
|
21
|
Other
|
0
|
|||
|
22
|
Gross
balance recoverable by Purchaser
|
295,500
|
|||
|
Cash Recoveries:
|
|||||
|
23
|
Net
liquidation proceeds (from HUD-1 settl stmt)
|
201,000
|
|||
|
24
|
Hazard
Insurance proceeds
|
0
|
|||
|
25
|
Mortgage
Insurance proceeds
|
0
|
|||
|
26
|
T
& I escrow account balances, if positive
|
0
|
|||
|
27
|
Other
credits, if any (itemize)
|
0
|
|||
|
28
|
Total
Cash Recovery
|
201,000
|
|||
|
|
|||||
|
29
|
Loss
Amount
|
94,500
|
|
Module
1 – Whole Bank w/ Loss Share – P&A
|
XXXXX
UNION BANK AND TRUST COMPANY
|
|
Version
1.08
|
COLUMBUS,
INDIANA
|
|
July
24, 2009
|
Notes
to Exhibit 2a (foreclosure)
|
|
1.
|
The
data shown are for illustrative purpose. The figures will vary
for actual restructurings.
|
|
|
2.
|
The
covered loss is the difference between the gross balance recoverable by
Purchaser and the total cash recovery. There are three methods
of calculation for covered losses from foreclosures, depending upon the
circumstances. They are shown
below:
|
|
a.
|
If
foreclosure occurred prior to the beginning of the Loss Share agreement,
use Exhibit 2a(1). This version uses the book value of the REO
as the starting point for the covered
loss.
|
|
b.
|
If
foreclosure occurred after the Loss Share agreement was in place, and if
the loan was not restructured when the Loss Share agreement was in place,
use Exhibit 2a(2). This version uses the unpaid balance of the
loan as of the last payment as the starting point for the covered
loss.
|
|
c.
|
If
the loan was restructured when the Loss Share agreement was in place, and
then foreclosure occurred, use Exhibit 2a(3). This version uses
the Net Present Value (NPV) of the modified loan as the starting point for
the covered loss.
|
|
3.
|
For
Exhibit 2a(1), the gross balance recoverable by the purchaser is
calculated as the sum of lines 9 – 18; it is shown in line 19. For Exhibit
2a(2), the gross balance recoverable by the purchaser is calculated as the
sum of lines 16 – 24; it is shown in line 25. For Exhibit 2a(3), the gross
balance recoverable by the purchaser is calculated as line 11 minus line
12 plus lines 13 – 21; it is shown in line
22.
|
|
4.
|
For
Exhibit 2a(1), the total cash recovery is calculated as the sum of lines
20 – 24; it is shown in line 25. For Exhibit 2a(2), the total cash
recovery is calculated as the sum of lines 26 – 30; it is shown in line
31. For Exhibit 2a(3), the total cash recovery is calculated as the sum of
lines 23 – 27; it is shown in line
28.
|
|
5.
|
Reasonable
and customary third party attorney’s fees and expenses incurred by or on
behalf of Assuming Bank in connection with any enforcement procedures, or
otherwise with respect to such loan, are reported under Attorney’s
fees.
|
|
6.
|
Assuming
Bank’s (or Third Party Servicer’s) reasonable and customary out-of-pocket
costs paid to either a third party or an affiliate (if affiliate is
pre-approved by the FDIC) for foreclosure, property protection and
maintenance costs, repairs, assessments, taxes, insurance and similar
items are treated as part of the gross recoverable balance, to the extent
they are not paid from funds in the borrower’s escrow
account. Allowable costs are limited to amounts per Xxxxxxx Mac
and Xxxxxx Mae guidelines (as in effect from time to time), where
applicable, provided that this limitation shall not apply to costs or
expenses relating to environmental
conditions.
|
|
7.
|
Do
not include late fees, prepayment penalties, or any similar lender fees or
charges by the Failed Bank or Assuming Bank to the loan account, any
allocation of Assuming Bank’s servicing costs, or any allocations of
Assuming Bank’s general and administrative (G&A) or other operating
costs.
|
|
8.
|
If
Exhibit 2a(3) is used, then no accrued interest may be included as a
covered loss. Otherwise, the amount of accrued interest that
may be included as a covered loss is limited to the minimum
of:
|
|
a.
|
90
days
|
|
b.
|
The
number of days that the loan is delinquent when the property was
sold
|
|
Module
1 – Whole Bank w/ Loss Share – P&A
|
XXXXX
UNION BANK AND TRUST COMPANY
|
|
Version
1.08
|
COLUMBUS,
INDIANA
|
|
July
24, 2009
|
|
c.
|
The
number of days between the resolution date and the date when the property
was sold
|
To
calculate accrued interest, apply the note interest rate that would have been in
effect if the loan were performing to the principal balance after application of
the last payment made by the borrower.
|
Module
1 – Whole Bank w/ Loss Share – P&A
|
XXXXX
UNION BANK AND TRUST COMPANY
|
|
Version
1.08
|
COLUMBUS,
INDIANA
|
|
July
24, 2009
|
Exhibit
2b
This
exhibit contains the loss share calculation for restructuring (loan mod), plus
explanatory notes.
Exhibit
2b
CALCULATION
OF RESTRUCTURING LOSS
|
1
|
Shared-Loss
Month
|
May-09
|
|||
|
2
|
Loan
no:
|
123456
|
|||
|
Loan before Restructuring
|
|||||
|
3
|
Original
loan amount
|
500,000
|
|||
|
4
|
Current
unpaid principal balance
|
450,000
|
|||
|
5
|
Remaining
term
|
298
|
|||
|
6
|
Interest
rate
|
7.500
|
% | ||
|
7
|
Interest
Paid-To-Date
|
2/29/08
|
|||
|
8
|
Monthly
payment - P&I
|
3,333
|
|||
|
9
|
Monthly
payment - T&I
|
1,000
|
|
||
|
10
|
Total
monthly payment
|
4,333
|
|||
|
11
|
Loan
type (fixed-rate, ARM, I/O, Option ARM, etc.)
|
Option ARM
|
|||
|
12
|
Borrower
current annual income
|
82,000
|
|||
|
Terms
of Modified/Restructured Loan
|
|||||
|
13
|
Closing
date on modified/restructured loan
|
4/19/09
|
|||
|
14
|
New
Principal balance
|
461,438
|
|||
|
15
|
Remaining
term
|
313
|
|||
|
16
|
Interest
rate
|
3.500
|
% | ||
|
17
|
Monthly
payment - P&I
|
1,346
|
|||
|
18
|
Monthly
payment - T&I
|
800
|
|||
|
19
|
Total
monthly payment
|
2,146
|
|||
|
20
|
Loan
type (fixed-rate, ARM, I/O, Option ARM, etc.)
|
IO
Hybrid
|
|||
|
00
|
Xxxx
xxxx (0xx, 0xx)
|
0xx
|
|||
|
If
adjustable:
|
|||||
|
22
|
Initial
interest rate
|
3.500
|
% | ||
|
23
|
Term
– initial interest rate
|
60 Months
|
|||
|
24
|
Initial
payment amount
|
2,146
|
|||
|
25
|
Term-initial
payment amount
|
60 Months
|
|
||
|
26
|
Negative
amortization?
|
No
|
|||
|
27
|
Rate
reset frequency after first adjustment
|
6 Months
|
|||
|
28
|
Next
reset date
|
5/1/14
|
|||
|
29
|
Index
|
LIBOR
|
|||
|
30
|
Margin
|
2.750
|
% | ||
|
31
|
Cap
per adjustment
|
2.000
|
% | ||
|
32
|
Lifetime
Cap
|
9.500
|
% | ||
|
33
|
Floor
|
2.750
|
% | ||
|
34
|
Front
end DTI
|
31
|
% | ||
|
35
|
Back
end DTI
|
45
|
% | ||
|
Restructuring
Loss Calculation
|
|||||
|
36
|
Loan
Principal balance before restructuring
|
450,000
|
|||
|
37
|
Accrued
interest, limited to 90 days
|
8,438
|
|||
|
38
|
Tax
and insurance advances
|
3,000
|
|||
|
39
|
3rd
party fees due
|
-
|
|||
|
40
|
Total
loan balance due before restructuring
|
461,438
|
|||
|
Assumptions
for NPV Calculation, Restructured Loan:
|
|||||
|
41
|
Discount
rate for projected cash flows
|
5.530
|
% | ||
|
42
|
Loan
prepayment in full
|
120 Months
|
|||
|
43
|
NPV
of projected cash flows
|
403,000
|
|||
|
44
|
Loss
Amount
|
58,438
|
|
Module
1 – Whole Bank w/ Loss Share – P&A
|
XXXXX
UNION BANK AND TRUST COMPANY
|
|
Version
1.08
|
COLUMBUS,
INDIANA
|
|
July
24, 2009
|
Notes
to Exhibit 2b (restructuring)
|
1.
|
The
data shown are for illustrative purpose. The figures will vary
for actual restructurings.
|
|
2.
|
For
purposes of loss sharing, losses on restructured loans are calculated as
the difference between:
|
|
|
a.
|
The principal, accrued interest, advances due on
the loan, and allowable 3rd
party fees prior to restructuring (lines 36-39),
and
|
|
|
b.
|
The Net Present Value (NPV) of the estimated cash
flows (line 43). The cash flows should assume no default or prepayment for
10 years, followed by prepayment in full at the end of 10 years (120
months).
|
|
3.
|
For
owner-occupied residential loans, the NPV is calculated using the most
recently published Xxxxxxx Mac survey rate on 30-year fixed rate loans as
of the restructure date.
|
|
4.
|
For
investor owned or non-owner occupied residential loans, the NPV is
calculated using commercially reasonable rate on 30-year fixed rate loans
as of the restructure date.
|
|
5.
|
If
the new loan is an adjustable-rate loan, interest rate resets and related
cash flows should be projected based on the index rate in effect at the
date of the loan restructuring. If the restructured loan
otherwise provides for specific charges in monthly P&I payments over
the term of the loan, those changes should be reflected in the projected
cash flows. Assuming Bank must retain supporting schedule of
projected cash flows as required by Section 2.1 of the Single Family
Shared-Loss Agreement and provide it to the FDIC if requested for a sample
audit.
|
|
6.
|
Do
not include late fees, prepayment penalties, or any similar lender fees or
charges by the Failed Bank or Assuming Bank to the loan account, any
allocation of Assuming Bank’s servicing costs, or any allocations of
Assuming Bank’s general and administrative (G&A) or other operating
costs.
|
|
7.
|
The
amount of accrued interest that may be added to the balance of the loan is
limited to the minimum of:
|
|
a.
|
90
days
|
|
b.
|
The
number of days that the loan is delinquent at the time of
restructuring
|
|
c.
|
The
number of days between the resolution date and the
restructuring
|
To
calculate accrued interest, apply the note interest rate that would have been in
effect if the loan were performing to the principal balance after application of
the last payment made by the borrower.
|
Module
1 – Whole Bank w/ Loss Share – P&A
|
XXXXX
UNION BANK AND TRUST COMPANY
|
|
Version
1.08
|
COLUMBUS,
INDIANA
|
|
July
24, 2009
|
Exhibit
2c
This
exhibit contains two versions of the loss share calculation for short sales,
plus explanatory notes.
Exhibit
2c(1)
CALCULATION
OF LOSS FOR SHORT SALE LOANS
No
Preceeding Loan Mod under Loss Share
|
1
|
Shared-Loss
Month:
|
May-09
|
|||
|
2
|
Loan
#
|
58776
|
|||
|
3
|
RO
#
|
542
|
|||
|
4
|
Interest
paid-to-date
|
7/31/08
|
|||
|
5
|
Short
Payoff Date
|
4/17/09
|
|||
|
6
|
Note
Interest rate
|
7.750
|
% | ||
|
7
|
Owner
occupied?
|
Yes
|
|||
|
If
so:
|
|||||
|
8
|
Borrower
current gross annual income
|
38,500
|
|||
|
9
|
Estimated
NPV of loan mod
|
200,000
|
|||
|
10
|
Most
recent BPO
|
380,000
|
|||
|
11
|
Most
recent BPO date
|
1/31/06
|
|||
|
Short-Sale
Loss calculation
|
|||||
|
12
|
Loan
Principal balance
|
375,000
|
|||
|
13
|
Accrued
interest, limited to 90 days
|
7,266
|
|||
|
14
|
Attorney's
fees
|
0
|
|||
|
15
|
Tax
and insurance advances
|
0
|
|||
|
16
|
3rd
party fees due
|
2,800
|
|||
|
17
|
Incentive
to borrower
|
2,000
|
|||
|
18
|
Gross
balance recoverable by Purchaser
|
387,066
|
|||
|
19
|
Amount
accepted in Short-Sale
|
255,000
|
|||
|
20
|
Hazard
Insurance
|
0
|
|||
|
21
|
Mortgage
Insurance
|
0
|
|||
|
22
|
Total
Cash Recovery
|
255,000
|
|||
|
23
|
Loss
Amount
|
132,066
|
|
Module
1 – Whole Bank w/ Loss Share – P&A
|
XXXXX
UNION BANK AND TRUST COMPANY
|
|
Version
1.08
|
COLUMBUS,
INDIANA
|
|
July
24, 2009
|
Exhibit
2c(2)
CALCULATION
OF LOSS FOR SHORT SALE LOANS
Short
Sale after a Covered Loan Mod
|
1
|
Shared-Loss
Month:
|
May-09
|
|||
|
2
|
Loan
#
|
20076
|
|||
|
3
|
REO
#
|
345
|
|||
|
4
|
Loan
mod date
|
5/12/08
|
|||
|
5
|
Interest
paid-to-date
|
9/30/08
|
|||
|
6
|
Short
Payoff Date
|
4/2/09
|
|||
|
7
|
Note
Interest rate
|
7.500
|
%
|
||
|
8
|
Most
recent BPO
|
230,000
|
|||
|
9
|
Most
recent BPO date
|
1/21/09
|
|||
|
Short-Sale Loss calculation
|
|||||
|
11
|
NPV
of projected cash flows at loan mod
|
311,000
|
|||
|
12
|
Less:
Principal payments between loan mod and deliquency Plus:
|
1,000
|
|||
|
13
|
Attorney's
fees
|
0
|
|||
|
14
|
Tax
and insurance advances
|
1,500
|
|||
|
15
|
3rd
party fees due
|
2,600
|
|||
|
16
|
Incentive
to borrower
|
3,500
|
|||
|
17
|
Gross
balance recoverable by Purchaser
|
317,600
|
|||
|
18
|
Amount
accepted in Short-Sale
|
234,000
|
|||
|
19
|
Hazard
Insurance
|
0
|
|||
|
20
|
Mortgage
Insurance
|
0
|
|||
|
21
|
Total
Cash Recovery
|
234,000
|
|||
|
22
|
Loss
Amount
|
83,600
|
|
Module
1 – Whole Bank w/ Loss Share – P&A
|
XXXXX
UNION BANK AND TRUST COMPANY
|
|
Version
1.08
|
COLUMBUS,
INDIANA
|
|
July
24, 2009
|
Notes
to Exhibit 2c (short sale)
|
|
1.
|
The
data shown are for illustrative purpose. The figures will vary
for actual short sales.
|
|
|
2.
|
The
covered loss is the difference between the gross balance recoverable by
Purchaser and the total cash recovery. There are two methods of
calculation for covered losses from short sales, depending upon the
circumstances. They are shown
below:
|
|
|
a.
|
If
the loan was restructured when the Loss Share agreement was in place, and
then the short sale occurred, use Exhibit 2c(2). This version
uses the Net Present Value (NPV) of the modified loan as the starting
point for the covered loss.
|
|
|
b.
|
Otherwise,
use Exhibit 2c(1). This version uses the unpaid balance of the
loan as of the last payment as the starting point for the covered
loss.
|
|
|
3.
|
For
Exhibit 2c(1), the gross balance recoverable by the purchaser is
calculated as the sum of lines 12 – 17; it is shown in line 18. For
Exhibit 2a(2), the gross balance recoverable by the purchaser is
calculated as line 11 minus line 12 plus lines 13 – 16; it is shown in
line 17.
|
|
|
4.
|
For
Exhibit 2c(1), the total cash recovery is calculated as the sum of lines
19 – 21; it is shown in line 22. For Exhibit 2c(2), the total cash
recovery is calculated as the sum of lines 18 – 20; it is shown in line
21.
|
|
|
5.
|
Reasonable
and customary third party attorney’s fees and expenses incurred by or on
behalf of Assuming Bank in connection with any enforcement procedures, or
otherwise with respect to such loan, are reported under Attorney’s
fees.
|
|
|
6.
|
Do
not include late fees, prepayment penalties, or any similar lender fees or
charges by the Failed Bank or Assuming Bank to the loan account, any
allocation of Assuming Bank’s servicing costs, or any allocations of
Assuming Bank’s general and administrative (G&A) or other operating
costs.
|
|
|
7.
|
If
Exhibit 2c(2) is used, then no accrued interest may be included as a
covered loss. Otherwise, the amount of accrued interest that
may be included as a covered loss is limited to the minimum
of:
|
|
|
d.
|
90
days
|
|
|
e.
|
The
number of days that the loan is delinquent when the property was
sold
|
|
|
f.
|
The
number of days between the resolution date and the date when the property
was sold
|
|
|
To
calculate accrued interest, apply the note interest rate that would have
been in effect if the loan were performing to the principal balance after
application of the last payment made by the
borrower.
|
|
Module
1 – Whole Bank w/ Loss Share – P&A
|
XXXXX
UNION BANK AND TRUST COMPANY
|
|
Version
1.08
|
COLUMBUS,
INDIANA
|
|
July
24, 2009
|
|
Shared-Loss
Month:
|
[input
month]
|
|
Loan
no.:
|
[input
loan no.)
|
NOTE
The
calculation of recovery on a loan for which a Restructuring Loss has been paid
will only apply if the loan is sold.
|
EXAMPLE
CALCULATION
|
||||||||||||
|
Restructuring
Loss Information
|
||||||||||||
|
Loan
principal balance before restructuring
|
$ | 200,000 |
A
|
|||||||||
|
NPV,
restructured loan
|
165,000 |
B
|
||||||||||
|
Loss
on restructured loan
|
$ | 35,000 |
A
– B
|
|||||||||
|
Times
FDIC applicable loss share % (80% or 95%)
|
80 | % | ||||||||||
|
Loss
share payment to purchaser
|
$ | 28,000 |
C
|
|||||||||
|
Calculation
– Recovery amount due to Receiver
|
||||||||||||
|
Loan
sales price
|
$ | 190,000 | ||||||||||
|
NPV
of restructured loan at mod date
|
165,000 | |||||||||||
|
Gain
- step 1
|
25,000 |
D
|
||||||||||
|
PLUS
|
||||||||||||
|
Loan
UPB after restructuring
|
(1)
|
200,000 | ||||||||||
|
Loan
UPB at liquidation date
|
192,000 | |||||||||||
|
Gain
- step 2 (principal collections after restructuring)
|
8,000 |
E
|
||||||||||
|
Recovery
amount
|
33,000 |
D
+ E
|
||||||||||
|
Times
FDIC loss share %
|
80 | % | ||||||||||
|
Recovery
due to FDIC
|
$ | 26,400 |
F
|
|||||||||
|
Net
loss share paid to purchaser (C – F)
|
$ | 1,600 | ||||||||||
|
Proof
Calculation
|
(2)
|
|||||||||||
|
Loan
principal balance
|
$ | 200,000 |
G
|
|||||||||
|
Principal
collections on loan
|
8,000 | |||||||||||
|
Sales
price for loan
|
190,000 | |||||||||||
|
Total
collections on loan
|
198,000 |
H
|
||||||||||
|
Net
loss on loan
|
$ | 2,000 |
G
– H
|
|||||||||
|
Times
FDIC applicable loss share % (80% or 95%)
|
80 | % | ||||||||||
|
Loss
share payment to purchaser
|
$ | 1,600 | ||||||||||
|
(1)
|
This
example assumes that the FDIC loan modification program as shown in
Exhibit 5 is applied and the loan restructuring does not result in a
reduction in the loan principal balance due from the
borrower.
|
|
(2)
|
This
proof calculation is provided to illustrate the concept and the Assuming
Bank is not required to provide this with its Recovery
calculations.
|
|
Module
1 – Whole Bank w/ Loss Share – P&A
|
XXXXX
UNION BANK AND TRUST COMPANY
|
|
Version
1.08
|
COLUMBUS,
INDIANA
|
|
July
24, 2009
|
Portfolio
Performance and Summary Schedule
SHARED-LOSS
LOANS
PORTFOLIO
PERFORMANCE AND SUMMARY SCHEDULE
|
MONTH
ENDED:
|
[input
report month]
|
|||||
|
POOL
SUMMARY
|
||||||
|
#
|
$
|
|||||
|
Loans
at Sale Date
|
xx
|
xx
|
||||
|
Loans
as of this month-end
|
xx
|
xx
|
||||
|
STATED
THRESHOLD TRACKING
|
#
|
$
|
||||
|
Stated
Threshold amount
|
A
|
|||||
|
Cumulative
loss payments, prior month
|
||||||
|
Loss
payment for current month
|
||||||
|
Cumulative
loss payment, this month
|
||||||
|
Cumulative
Commercial & Other Loans Net Charge-Offs
|
||||||
|
B
|
||||||
|
Remaining
to Stated Threshold
|
A -
B
|
|||||
|
Percent of Total
|
||||||
|
PORTFOLIO
PERFORMANCE STATUS
|
#
|
$
|
#
|
|||
|
Current
|
||||||
|
30
– 59 days past due
|
||||||
|
60
– 89 days past due
|
||||||
|
90
– 119 days past due
|
||||||
|
120
and over days past due
|
||||||
|
In
foreclosure
|
||||||
|
ORE
|
||||||
|
Total
|
||||||
|
Memo Item:
|
||||||
|
Loans
in process of restructuring – total
|
||||||
|
Loans
in bankruptcy
|
||||||
|
Loans
in process of restructuring by delinquency status
|
||||||
|
Current
|
||||||
|
30
- 59 days past due
|
||||||
|
60
- 89 days past due
|
||||||
|
90
- 119 days past due
|
||||||
|
120
and over days past due In foreclosure
|
||||||
|
Total
|
||||||
|
Module
1 – Whole Bank w/ Loss Share – P&A
|
XXXXX
UNION BANK AND TRUST COMPANY
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Version
1.08
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COLUMBUS,
INDIANA
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July
24, 2009
|
|
List
of Loans Paid Off During Month
|
||||||
|
Loan #
|
Principal
Balance
|
|||||
|
List
of Loans Sold During Month
|
||||||
|
Loan #
|
Principal
Balance
|
|||||
|
Module
1 – Whole Bank w/ Loss Share – P&A
|
XXXXX
UNION BANK AND TRUST COMPANY
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Version
1.08
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COLUMBUS,
INDIANA
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July
24, 2009
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Wire
Transfer Instructions
PURCHASER
WIRING INSTRUCTIONS
|
BANK
RECEIVING WIRE
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|
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9
DIGIT ABA ROUTING NUMBER
|
|
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ACCOUNT
NUMBER
|
|
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NAME
OF ACCOUNT
|
|
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ATTENTION
TO WHOM
|
|
|
|
PURPOSE
OF WIRE
|
|
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FDIC
RECEIVER WIRING INSTRUCTIONS
|
||
|
BANK
RECEIVING WIRE
|
|
|
|
SHORT
NAME
|
|
|
|
ADDRESS
OF BANK RECEIVING WIRE
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|
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9
DIGIT ABA ROUTING NUMBER
|
|
|
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ACCOUNT
NUMBER
|
|
|
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NAME
OF ACCOUNT
|
|
|
|
ATTENTION
TO WHOM
|
|
|
|
PURPOSE
OF WIRE
|
|
|
|
Module
1 – Whole Bank w/ Loss Share – P&A
|
XXXXX
UNION BANK AND TRUST COMPANY
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|
Version
1.08
|
COLUMBUS,
INDIANA
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July
24, 2009
|
EXHIBIT
5
FDIC MORTGAGE LOAN
MODIFICATION PROGRAM
Objective
The
objective of this FDIC Mortgage Loan Modification Program (“Program”) is to
modify the terms of certain residential mortgage loans so as to improve
affordability, increase the probability of performance, allow borrowers to
remain in their homes and increase the value of the loans to the FDIC and
assignees. The Program provides for the modification of Qualifying Loans (as
defined below) by reducing the borrower’s monthly housing debt to income ratio
(“DTI Ratio”) to no more than 31% at the time of the modification and
eliminating adjustable interest rate and negative amortization
features.
Qualifying Mortgage
Loans
In order
for a mortgage loan to be a Qualifying Loan it must meet all of the following
criteria, which must be confirmed by the lender:
|
|
·
|
The
collateral securing the mortgage loan is owner-occupied and the owner’s
primary residence; and
|
|
|
·
|
The
mortgagor has a first priority lien on the collateral;
and
|
|
|
·
|
Either
the borrower is at least 60 days delinquent or a default is reasonably
foreseeable.
|
Modification
Process
The
lender shall undertake a review of its mortgage loan portfolio to identify
Qualifying Loans. For each Qualifying Loan, the lender shall determine the net
present value of the modified loan and, if it will exceed the net present value
of the foreclosed collateral upon disposition, then the Qualifying Loan shall be
modified so as to reduce the borrower’s monthly DTI Ratio to no more than 31% at
the time of the modification. To achieve this, the lender shall use a
combination of interest rate reduction, term extension and principal
forbearance, as necessary.
The
borrower’s monthly DTI Ratio shall be a percentage calculated by dividing the
borrower’s monthly income by the borrower’s monthly housing payment (including
principal, interest, taxes and insurance). For these purposes, (1) the
borrower’s monthly income shall be the amount of the borrower’s (along with any
co-borrowers’) documented and verified gross monthly income, and (2) the
borrower’s monthly housing payment shall be the amount required to pay monthly
principal and interest plus one-twelfth of the then current annual amount
required to pay real property taxes and homeowner’s insurance with respect to
the collateral.
In order
to calculate the monthly principal payment, the lender shall capitalize to the
outstanding principal balance of the Qualifying Loan the amount of all
delinquent interest, delinquent taxes, past due insurance premiums, third party
fees and (without duplication) escrow advances (such amount, the “Capitalized
Balance”).
|
Module
1 – Whole Bank w/ Loss Share – P&A
|
XXXXX
UNION BANK AND TRUST COMPANY
|
|
Version
1.08
|
COLUMBUS,
INDIANA
|
|
July
24, 2009
|
In order
to achieve the goal of reducing the DTI Ratio to 31%, the lender shall take the
following steps in the following order of priority with respect to each
Qualifying Loan:
|
|
1.
|
Reduce
the interest rate to the then current Xxxxxxx Mac Survey Rate for 30-year
fixed rate mortgage loans, and adjust the term to 30
years.
|
|
|
2.
|
If
the DTI Ratio is still in excess of 31%, reduce the interest rate further,
but no lower than 3%, until the DTI ratio of 31% is
achieved.
|
|
|
3.
|
If
the DTI Ratio is still in excess of 31% after adjusting the interest rate
to 3%, extend the remaining term of the loan by 10
years.
|
|
|
4.
|
If
the DTI Ratio is still in excess of 31%, calculate a new monthly payment
(the “Adjusted Payment Amount”) that will result in the borrower’s monthly
DTI Ratio not exceeding 31%. After calculating the Adjusted Payment
Amount, the lender shall bifurcate the Capitalized Balance into two
portions – the amortizing portion and the non-amortizing portion. The
amortizing portion of the Capitalized Balance shall be the mortgage amount
that will fully amortize over a 40-year term at an annual interest rate of
3% and monthly payments equal to the Adjusted Payment Amount. The
non-amortizing portion of the Capitalized Balance shall be the difference
between the Capitalized Balance and the amortizing portion of the
Capitalized Balance. If the amortizing portion of the Capitalized Balance
is less than 75% of the current estimated value of the collateral, then
the lender may choose not to restructure the loan. If the
lender chooses to restructure the loan, then the lender shall forbear on
collecting the non-amortizing portion of the Capitalized Balance, and such
amount shall be due and payable only upon the earlier of (i) maturity of
the modified loan, (ii) a sale of the property or (iii) a pay-off or
refinancing of the loan. No interest shall be charged on the
non-amortizing portion of the Capitalized Balance, but repayment shall be
secured by a first lien on the
collateral.
|
Special
Note:
The net
present value calculation used to determine whether a loan should be modified
based on the modification process above is distinct and different from the net
present value calculation used to determine the covered loss if the loan is
modified. Please refer only to the net present value calculation
described in this exhibit for the modification process, with its separate
assumptions, when determining whether to provide a modification to a
borrower. Separate assumptions may include, without limitation,
Assuming Bank’s determination of a probability of default without modification,
a probability of default with modification, home price forecasts, prepayment
speeds, and event timing. These assumptions are applied to different
projected cash flows over the term of the loan, such as the projected cash flow
of the loan performing or defaulting without modification and the projected cash
flow of the loan performing or defaulting with modification.
By contrast, the net present
value for determining the covered loss is based on a 10 year
period. While the assumptions in the net present value calculation
used in the modification process may change, the net present value calculation
for determining the covered loss remains constant.
|
Module
1 – Whole Bank w/ Loss Share – P&A
|
XXXXX
UNION BANK AND TRUST COMPANY
|
|
Version
1.08
|
COLUMBUS,
INDIANA
|
|
July
24, 2009
|
COMMERCIAL
AND OTHER ASSETS SHARED-LOSS AGREEMENT
This
agreement for reimbursement of loss sharing expenses on certain loans and other
assets (the “Commercial Shared-Loss Agreement”) shall apply when the Assuming
Bank purchases Shared-Loss Assets as that term is defined herein. The
terms hereof shall modify and supplement, as necessary, the terms of the
Purchase and Assumption Agreement to which this Commercial Shared-Loss Agreement
is attached as Exhibit 4.15B and incorporated therein. To the extent any
inconsistencies may arise between the terms of the Purchase and Assumption
Agreement and this Commercial Shared-Loss Agreement with respect to the subject
matter of this Commercial Shared-Loss Agreement, the terms of this Commercial
Shared-Loss Agreement shall control. References in this Commercial
Shared-Loss Agreement to a particular Section shall be deemed to refer to a
Section in this Commercial Shared-Loss Agreement unless the context indicates
that a Section of the Purchase and Assumption Agreement is
intended.
ARTICLE
I — DEFINITIONS
Capitalized
terms used in this Commercial Shared-Loss Agreement that are not defined in this
Commercial Shared-Loss Agreement are defined in the Purchase and Assumption
Agreement In addition to the terms defined above, defined below are
certain additional terms relating to loss-sharing, as used in this Commercial
Shared-Loss Agreement.
“AAA” means the American
Arbitration Association as provided in Section 2.1(f)(iii) of this Commercial
Shared-Loss Agreement.
“Accrued
Interest” means,
with respect to any Shared-Loss Loan, Permitted Advance or Shared-Loss Loan
Commitment Advance at any time, the amount of earned and unpaid interest, taxes,
credit life and/or disability insurance premiums (if any) payable by the Obligor
accrued on or with respect to such Shared-Loss Loan, Permitted Advance or
Shared-Loss Loan Commitment Advance, all as reflected on the Accounting Records
of the Failed Bank or the Assuming Bank (as applicable); provided, that Accrued Interest
shall not include any amount that accrues on or with respect to any Shared-Loss
Loan, Permitted Advance or Shared-Loss Loan Commitment Advance after that Asset
has been placed on non-accrual or nonperforming status by either the Failed Bank
or the Assuming Bank (as applicable).
“Additional
ORE” means
Shared-Loss Loans that become Other Real Estate after Bank Closing
Date.
“Affiliate” shall have the meaning set
forth in the Purchase and Assumption Agreement; provided, that, for purposes of
this Commercial Shared-Loss Agreement, no Third Party Servicer shall be deemed
to be an Affiliate of the Assuming Bank.
“Applicable
Anniversary of the Commencement Date” means the fifth (5th) anniversary of the
Commencement Date.
|
Module
1 – Whole Bank w/ Loss Share – P&A
|
XXXXX
UNION BANK AND TRUST COMPANY
|
|
Version
1.08
|
COLUMBUS,
INDIANA
|
|
July
24, 2009
|
“Calendar
Quarter” means a
quarterly period (a) for the first such period, beginning on the Commencement
Date and ending on the last calendar day of either March, June, September or
December, whichever is the first to occur after the Commencement Date, and (b)
for quarterly periods thereafter, beginning on the first calendar day of the
calendar month immediately after the month that ended the prior period and
ending on the last calendar day of each successive three-calendar-month period
thereafter (i.e., each March, June, September and December, starting in the
applicable order depending on the ending date of first such period) of any
year.
“Capitalized
Expenditures”
means those expenditures that (i) would be capitalized under generally
accepted accounting principles, and (ii) are incurred with respect to
Shared-Loss Loans, Other Real Estate, Additional ORE or Subsidiary ORE.
Capitalized Expenditures shall not include expenses related to environmental
conditions including, but not limited to, remediation, storage or disposal of
any hazardous or toxic substances or any pollutant or contaminant.
“Charge-Offs” means, with respect to any
Shared-Loss Assets for any period, an amount equal to the aggregate amount of
loans or portions of loans classified as “Loss” under the Examination Criteria,
including (a) charge-offs of (i) the principal amount of such assets net of
unearned interest (including write-downs associated with Other Real Estate,
Additional ORE, Subsidiary ORE or loan modification(s)) (ii) Accrued Interest,
and (iii) Capitalized Expenditures plus (b) Pre-Charge-Off Expenses incurred on
the respective Shared-Loss Loans, all as effected by the Assuming Bank during
such period and reflected on the Accounting Records of the Assuming Bank; provided, that: (i) the
aggregate amount of Accrued Interest (including any reversals thereof) for the
period after Bank Closing that shall be included in determining the amount of
Charge-Offs for any Shared-Loss Loan shall not exceed ninety (90) days’ Accrued
Interest; (ii) no Charge-Off shall be taken with respect to any anticipated
expenditure by the Assuming Bank until such expenditure is actually incurred;
(iii) any financial statement adjustments made in connection with the purchase
of any Assets pursuant to this Purchase and Assumption Agreement or any future
purchase, merger, consolidation or other acquisition of the Assuming Bank shall
not constitute “Charge-Offs”; and (iv) except for Portfolio Sales or any other
sales or dispositions consented to by the Receiver, losses incurred on the sale
or other disposition of Shared-Loss Assets to any Person (other than the sale or
other disposition of Other Real Estate, Additional ORE or Subsidiary ORE to a
Person other than an Affiliate of the Assuming Bank which is conducted in a
commercially reasonable and prudent manner) shall not constitute
Charge-Offs.
“Commencement
Date” means the
first calendar day following Bank Closing.
“Consumer
Loans” means
Loans to individuals for household, family and other personal expenditures
(including United States and/or State-guaranteed student loans and extensions of
credit pursuant to a credit card plan or debit card plan).
“Environmental
Assessment” means
an assessment of the presence, storage or release of any hazardous or toxic
substance, pollutant or contaminant with respect to the collateral securing a
Shared-Loss Loan that has been fully or partially charged off.
|
Module
1 – Whole Bank w/ Loss Share – P&A
|
XXXXX
UNION BANK AND TRUST COMPANY
|
|
Version
1.08
|
COLUMBUS,
INDIANA
|
|
July
24, 2009
|
“Examination
Criteria” means
the loan classification criteria employed by, or any applicable regulations of,
the Assuming Bank’s Chartering Authority at the time such action is taken, as
such criteria may be amended from time to time.
“Failed
Bank Charge-Offs/Write-Downs” means, with respect to any
Shared-Loss Asset, an amount equal to the aggregate amount of reversals or
charge-offs of Accrued Interest and charge-offs and write-downs of principal
effected by the Failed Bank with respect to that Shared-Loss Asset as reflected
on the Accounting Records of the Failed Bank.
“Fair
Value” means the
fair value of a Shared Loss MTM Asset as determined in accordance with FAS 157
as in effect on Bank Closing.
“FDIC
Party” has the
meaning provided in Section 2.1(f)(ii) of this Commercial Shared-Loss
Agreement.
“Net
Charge-Offs”
means, with respect to any period, an amount equal to the aggregate amount of
Charge-Offs for such period less the amount of Recoveries for such
period.
“Neutral
Member” has the
meaning provided in Section 2.1(f)(ii) of this Commercial Shared-Loss
Agreement.
“New
Shared-Loss Loans”
means loans that would otherwise be subject to loss sharing under this
Commercial Shared-Loss Agreement that were originated after March 31, 2009 and
before Bank Closing.
“Notice of
Dispute” has the
meaning provided in Section 2.1(f)(iii) of this Commercial Shared-Loss
Agreement.
“ORE
Subsidiary” means
any Subsidiary of the Assuming Bank that engages solely in holding, servicing,
managing or liquidating interests of a type described in clause (A) of the
definition of “Other Real Estate,” which interests have arisen from the
collection or settlement of a Shared-Loss Loan.
“Other
Real Estate”
means all of the following (including any of the following fully or partially
charged off the books and records of the Failed Bank or the Assuming Bank) that
(i) are owned by the Failed Bank as of Bank Closing and are purchased pursuant
to the Purchase and Assumption Agreement or (ii) have arisen
subsequent to Bank Closing from the collection or settlement by the Assuming
Bank of a Shared-Loss Loan:
(A) all
interests in real estate (other than Bank Premises and Fixtures), including but
not limited to mineral rights, leasehold rights, condominium and cooperative
interests, air rights and development rights; and
(B) all
other assets (whether real or personal property) acquired by foreclosure or in
full or partial satisfaction of judgments or indebtedness.
|
Module
1 – Whole Bank w/ Loss Share – P&A
|
XXXXX
UNION BANK AND TRUST COMPANY
|
|
Version
1.08
|
COLUMBUS,
INDIANA
|
|
July
24, 2009
|
“Permitted
Advance” means an
advance of funds by the Assuming Bank with respect to a Shared-Loss Loan, or the
making of a legally binding commitment by the Assuming Bank to advance funds
with respect to a Shared-Loss Loan, that (i) in the case of such an advance, is
actually made, and, in the case of such a commitment, is made and all of the
proceeds thereof actually advanced, within one (1) year after the Commencement
Date, (ii) does not cause the sum of (A) the book value of such Shared-Loss Loan
as reflected on the Accounting Records of the Assuming Bank after any such
advance has been made by the Assuming Bank plus (B) the unfunded amount of any
such commitment made by the Assuming Bank related thereto, to exceed 110% of the
Book Value of such Shared-Loss Loan, (iii) is not made with respect to a
Shared-Loss Loan with respect to which (A) there exists a related Shared-Loss
Loan Commitment or (B) the Assuming Bank has taken a Charge-Off and (iv) is made
in good faith, is supported at the time it is made by documentation in the
Credit Files and conforms to and is in accordance with the applicable
requirements set forth in Article III of this Commercial Shared-Loss Agreement
and with the then effective written internal credit policy guidelines of the
Assuming Bank; provided, that the limitations
in subparagraphs (i), (ii) and (iii) of this definition shall not apply to any
such action (other than to an advance or commitment related to the remediation,
storage or final disposal of any hazardous or toxic substance, pollutant or
contaminant) that is taken by Assuming Bank in its reasonable discretion to
preserve or secure the value of the collateral for such Shared-Loss
Loan.
“Permitted
Amendment” means,
with respect to any Shared-Loss Loan Commitment or Shared-Loss Loan, any
amendment, modification, renewal or extension thereof, or any waiver of any
term, right, or remedy there under, made by the Assuming Bank in good faith and
otherwise in accordance with the applicable requirements set forth in Article
III of this Commercial Shared-Loss Agreement and the then effective written
internal credit policy guidelines of the Assuming Bank; provided, that:
(i) with
respect to a Shared-Loss Loan Commitment or a Shared-Loss Loan that is not a
revolving line of credit, no such amendment, modification, renewal, extension,
or waiver, except as allowed under the definition of Permitted Advance, shall
operate to increase the amount of principal (A) then remaining available to be
advanced by the Assuming Bank under the Shared-Loss Loan Commitment or (B) then
outstanding under the Shared-Loss Loan;
(ii) with
respect to a Shared-Loss Loan Commitment or a Shared-Loss Loan that is a
revolving line of credit, no such amendment, modification, renewal, extension,
or waiver, except as allowed under the definition of Permitted Advance, shall
operate to increase the maximum amount of principal authorized as of Bank
Closing to be outstanding at any one time under the underlying revolving line of
credit relationship with the debtor (regardless of the extent to which such
revolving line of credit may have been funded as of Bank Closing or may
subsequently have been funded and/or repaid); and
(iii) no
such amendment, modification, renewal, extension or waiver shall extend the term
of such Shared-Loss Loan Commitment or Shared-Loss Loan beyond the end of the
final Shared-Loss Quarter unless the term of such Shared-Loss Loan Commitment or
Shared-Loss Loan as existed on Bank Closing was beyond the end of the final
Shared-Loss Quarter, in which event no such amendment, modification, renewal,
extension or waiver shall extend such term beyond the term as existed as of Bank
Closing.
|
Module
1 – Whole Bank w/ Loss Share – P&A
|
XXXXX
UNION BANK AND TRUST COMPANY
|
|
Version
1.08
|
COLUMBUS,
INDIANA
|
|
July
24, 2009
|
“Pre-Charge-Off
Expenses” means
those expenses incurred in the usual and prudent management of a
Shared-Loss Loan that would qualify as a Reimbursable Expense or Recovery
Expense if incurred after a Charge-Off of the related Shared-Loss Asset had
occurred.
“Quarterly
Certificate” has
the meaning provided in Section 2.1(a)(i) of this Commercial Shared-Loss
Agreement.
“Recoveries” (I)(A) In addition to any
sums to be applied as Recoveries pursuant to subparagraph (II) below,
“Recoveries” means, with respect to any period, the sum of (without
duplication):
(i) the
amount of collections during such period by the Assuming Bank on Charge-Offs of
Shared-Loss Assets effected by the Assuming Bank prior to the end of the final
Shared-Loss Quarter; plus
(ii) the
amount of collections during such period by the Assuming Bank on Failed Bank
Charge-Offs/Write-Downs; plus
(iii) the
amount of gain on any sale or other disposition during such period by the
Assuming Bank of Shared Loss Loans, Other Real Estate, Additional ORE or
Subsidiary ORE (provided, that the amount of any such gain included in
Recoveries shall not exceed the aggregate amount of the related Failed Bank
Charge-Offs/Write-Downs and Charge-Offs taken and any related Reimbursable
Expenses and Recovery Expenses); plus
(iv) the
amount of collections during such period by the Assuming Bank of any
Reimbursable Expenses or Recovery Expenses; plus
(v) the
amount of any fee or other consideration received by the Assuming Bank during or
prior to such period in connection with any amendment, modification, renewal,
extension, refinance, restructure, commitment or other similar action taken by
the Assuming Bank with respect to a Shared-Loss Asset with respect to which
there exists a Failed Bank Charge-Off/Write-Down or a Shared-Loss Loan as to
which a Charge-Off has been effected by the Assuming Bank during or prior to
such period (provided, that the amount of
any such fee or other consideration included in Recoveries shall not exceed the
aggregate amount of the related Failed Bank Charge-Offs/Write-Downs and
Charge-Offs taken and any related Reimbursable Expenses and Recovery
Expenses).
(I)(B)
For the purpose of determining the amounts to be applied as Recoveries pursuant
to subparagraph (I)(A) above, the Assuming Bank shall apply amounts received on
the Assets that are not otherwise applied to reduce the book value of principal
of a Shared-Loss Loan (or, in the case of Other Real Estate, Additional ORE,
Subsidiary ORE and Capitalized Expenditures, that are not otherwise applied to
reduce the book value thereof) in the following order: first to Charge-Offs and
Failed Bank Charge-Offs/Write Downs; then to Reimbursable Expenses and Recovery
Expenses; then to interest income; and then to other expenses incurred by the
Assuming Bank.
|
Module
1 – Whole Bank w/ Loss Share – P&A
|
XXXXX
UNION BANK AND TRUST COMPANY
|
|
Version
1.08
|
COLUMBUS,
INDIANA
|
|
July
24, 2009
|
(II)
If there occurs
an amendment, modification, renewal, extension, refinance, restructure,
commitment, sale or other similar action with respect to a Shared-Loss Loan as
to which there exists a Failed Bank Charge-Off/Write Down or as to which a
Charge-Off has been effected by the Assuming Bank during or prior to such
period, and
if, as a result
of such occurrence, the Assuming Bank recognizes any interest income for
financial accounting purposes on that Shared-Loss Loan, then “Recoveries”
shall also include the portion of the total amount of any such interest income
recognized by the Assuming Bank which is derived by multiplying:
(A) the
total amount of any such interest income recognized by the Assuming Bank during
such period with respect to that Shared-Loss Loan as described above, by
(B) a
fraction, the numerator of which is
the aggregate principal amount (excluding reversals or charge-offs of Accrued
Interest) of all such Failed Bank Charge-Offs/Write-Downs and Charge-Offs
effected by the Assuming Bank with respect to that Shared-Loss Loan plus the
principal amount of that Shared-Loss Loan that has not yet been charged-off but
has been placed on nonaccrual status, all of which occurred at any time prior to
or during the period in which the interest income referred to in subparagraph
(II)(A) immediately above was recognized, and the denominator of which
is the total amount of principal indebtedness (including all such prior Failed
Bank Charge-Offs/Write-Downs and Charge-Offs as described above) due from the
Obligor on that Shared-Loss Loan as of the end of such period;
provided, however, that the amount of
any interest income included as Recoveries for a particular Shared-Loss Loan
shall not exceed the aggregate amount of (a) Failed Bank
Charge-Offs/Write-Downs, (b) Charge-Offs effected by the Assuming Bank during or
prior to the period in which the amount of Recoveries is being determined, plus
(c) any Reimbursable Expenses and Recovery Expenses paid to the Assuming Bank
pursuant to this Commercial Shared-Loss Agreement during or prior to the period
in which the amount of Recoveries is being determined, all with respect to that
particular Shared-Loss Loan; and, provided, further, that any collections
on any such Shared-Loss Loan that are not applied to reduce book value of
principal or recognized as interest income shall be applied pursuant to
subparagraph (I) above.
|
Module
1 – Whole Bank w/ Loss Share – P&A
|
XXXXX
UNION BANK AND TRUST COMPANY
|
|
Version
1.08
|
COLUMBUS,
INDIANA
|
|
July
24, 2009
|
(III)
Notwithstanding subparagraphs (I) and (II) above, the term “Recoveries” shall
not include: (a) any amounts paid to the Assuming Bank by the Receiver pursuant
to Section 2.1 of this Commercial Shared-Loss Agreement, (b) amounts received
with respect to Charge-Offs effected by the Assuming Bank after the final
Shared-Loss Quarter, (c) after the final Shared-Loss Quarter, income received by
the Assuming Bank from the operation of, and any gains recognized by the
Assuming Bank on the disposition of, Other Real Estate, Additional ORE or
Subsidiary ORE (such income and gains being hereinafter together referred to as
“ORE Income”), except to the
extent that aggregate ORE Income exceeds the aggregate expenses paid to third
parties by or on behalf of the Assuming Bank after the final Shared-Loss Quarter
to manage, operate and maintain Other Real Estate, Additional ORE or Subsidiary
ORE (such expenses being hereinafter referred to as “ORE Expenses”). In
determining the extent aggregate ORE Income exceeds aggregate ORE Expenses for
any Recovery Quarter as set forth immediately above in subparagraph (c), the
Assuming Bank will subtract (i) ORE Expenses paid to third parties during such
Recovery Quarter (provided, that, in the case of the final Recovery Quarter
only, the Assuming Bank will subtract ORE Expenses paid to third parties from
the beginning of the final Recovery Quarter up to the date the Assuming Bank is
required to deliver the final Quarterly Certificate pursuant to this Commercial
Shared-Loss Agreement) from (ii)
ORE Income received during such Recovery Quarter, to calculate net ORE income
(“Net ORE Income”) for that Recovery Quarter. If the amount of Net ORE Income so
calculated for a Recovery Quarter is positive, such amount shall be reported as
Recoveries on the Quarterly Certificate for such Recovery Quarter. If the amount
of Net ORE Income so calculated for a Recovery Quarter is negative (“Net ORE
Loss Carryforward”), such amount shall be added to any ORE Expenses paid to
third parties in the next succeeding Recovery Quarter, which sum shall then be
subtracted from ORE Income for that next succeeding Recovery Quarter, for the
purpose of determining the amount of Net ORE Income (or, if applicable, Net ORE
Loss Carryforward) for that next succeeding Recovery Quarter. If, as of the end
of the final Recovery Quarter, a Net ORE Loss Carryforward exists, then the
amount of the Net ORE Loss Carryforward that does not exceed the aggregate amount of Net
ORE Income reported as Recoveries on Quarterly Certificates for all Recovery Quarters may be included
as a Recovery Expense on the Quarterly Certificate for the final Recovery
Quarter.
“Recovery
Amount” has the
meaning provided in Section 2.1(b)(ii) of this Commercial Shared-Loss
Agreement.
“Recovery
Expenses” means,
for any Recovery Quarter, the amount of actual, reasonable and necessary
out-of-pocket expenses (other than Capitalized Expenditures) paid to third
parties (other than Affiliates of the Assuming Bank) by or on behalf of the
Assuming Bank, as limited by Sections 3.2(c) and (d) of Article III to this
Commercial Shared-Loss Agreement, to recover amounts owed with respect to (i)
any Shared-Loss Asset as to which a Charge-Off was effected prior to the end of
the final Shared-Loss Quarter (provided that such amounts were incurred no
earlier than the date the first Charge-Off on such Shared-Loss Asset could have
been reflected on the Accounting Records of the Assuming Bank), and (ii) Failed
Bank Charge-Offs/Write-Downs (including, in each case, all costs and expenses
related to an Environmental Assessment and any other costs or expenses related
to any environmental conditions with respect to the Shared-Loss Assets (it being
understood that any remediation expenses for any such pollutant or contaminant
are not recoverable if in excess of $200,000 per Shared-Loss Asset, without the
Assuming Bank having obtained the prior consent of the Receiver for such
expenses); provided, that, so long as
income with respect to a Shared-Loss Loan is being prorated pursuant to the
arithmetical formula in subsection (II) of the definition of “Recoveries”, the
term “Recovery Expenses” shall not include that portion of any such expenses
paid during such Recovery Quarter to recover any amounts owed on that
Shared-Loss Loan that is derived by:
subtracting (1) the
product derived by multiplying:
(A) the
total amount of any such expenses paid by or on behalf of the Assuming Bank
during such Recovery Quarter with respect to that Shared-Loss Loan, by
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(B) a
fraction, the numerator of which is
the aggregate principal amount (excluding reversals or charge-offs of Accrued
Interest) of all such Failed Bank Charge-Offs/Write-Downs and Charge-Offs
effected by the Assuming Bank with respect to that Shared-Loss Loan plus the
principal amount of that Shared-Loss Loan that has not yet been charged-off but
has been placed on nonaccrual status, all of which occurred at any time prior to
or during the period in which the interest income referred to in subparagraph
(II)(A) of the definition of “Recoveries” was recognized, and the denominator of which
is the total amount of principal indebtedness (including all such prior Failed
Bank Charge-Offs/Write-Downs and Charge-Offs as described above) due from the
Obligor on that Shared-Loss Loan as of the end of such period;
from (2) the total
amount of any such expenses paid during that Recovery Quarter with respect to
that Shared-Loss Loan.
“Recovery
Quarter” has the
meaning provided in Section 2.1(a)(ii) of this Commercial Shared-Loss
Agreement.
“Reimbursable
Expenses” means,
for any Shared-Loss Quarter, the amount of actual, reasonable and necessary
out-of-pocket expenses (other than Capitalized Expenditures), paid to third
parties (other than Affiliates of the Assuming Bank) by or on behalf of the
Assuming Bank, as limited by Sections 3.2(c) and (d) of Article III of this
Commercial Shared-Loss Agreement, to:
(i)
recover amounts owed with respect to any Shared-Loss Asset as to which a
Charge-Off has been effected prior to the end of the final Shared-Loss Quarter
(provided that such amounts were incurred no earlier than the date the first
Charge-Off on such Shared-Loss Asset could have been reflected on the Accounting
Records of the Assuming Bank) and recover amounts owed with respect to Failed
Bank Charge-Offs/Write-Downs (including, in each case, all costs and expenses
related to an Environmental Assessment and any other costs or expenses related
to any environmental conditions with respect to the Shared-Loss Assets (it being
understood that any such remediation expenses for any such pollutant or
contaminant are not recoverable if in excess of $200,000 per Shared-Loss Asset,
without the Assuming Bank having obtained the prior consent of the Receiver for
such expenses); provided, that, so long as
income with respect to a Shared-Loss Loan is being pro-rated pursuant to the
arithmetical formula in subsection (II) of the definition of “Recoveries”, the
term “Reimbursable Expenses” shall not include that
portion of any such expenses paid during such Shared-Loss Quarter to recover any
amounts owed on that Shared-Loss Loan that is derived by:
subtracting (1) the
product derived by multiplying:
(A) the
total amount of any such expenses paid by or on behalf of the Assuming Bank
during such Shared-Loss Quarter with respect to that Shared-Loss Loan, by
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(B) a
fraction, the numerator of which is
the aggregate principal amount (excluding reversals or charge-offs of Accrued
Interest) of all such Failed Bank Charge-Offs/Write-Downs and Charge-Offs
effected by the Assuming Bank with respect to that Shared-Loss Loan plus the
principal amount of that Shared-Loss Loan that has not yet been charged-off but
has been placed on nonaccrual status, all of which occurred at any time prior to
or during the period in which the interest income referred to in subparagraph
(II)(A) of the definition of “Recoveries” was recognized, and the denominator of which
is the total amount of principal indebtedness (including all such prior Failed
Bank Charge-Offs/Write-Downs and Charge-Offs as described above) due from the
Obligor on that Shared-Loss Loan as of the end of such period;
from (2) the total
amount of any such expenses paid during that Shared-Loss Quarter with respect to
that Shared-Loss Loan; and
(ii)
manage, operate or maintain Other Real Estate, Additional ORE or Subsidiary ORE
less the amount of any income
received by the Assuming Bank during such Shared-Loss Quarter with respect to
such Other Real Estate, Additional ORE or Subsidiary ORE (which resulting amount
under this clause (ii) may be negative).
“Review
Board” has the
meaning provided in Section 2.1(f)(i) of this Commercial Shared-Loss
Agreement.
“Shared-Loss
Amount” has the
meaning provided in Section 2.1(b)(i) of this Commercial Shared-Loss
Agreement.
“Shared-Loss
Asset Repurchase Price” means, with respect to any
Shared-Loss Asset, the principal amount thereof plus any other fees or penalties
due from an Obligor (including, subject to the limitations discussed below, the
amount of any Accrued Interest) stated on the Accounting Records of the Assuming
Bank, as of the date as of which the Shared-Loss Asset Repurchase Price is being
determined (regardless, in the case of a Shared-Loss Loan, of the Legal Balance
thereof) plus all Reimbursable Expenses and Recovery Expenses incurred up to and
through the date of consummation of purchase of such Shared-Loss Asset; provided, that (i) in the case
of a Shared-Loss Loan there shall be excluded from such amount the amount of any
Accrued Interest accrued on or with respect to such Shared-Loss Loan prior to
the ninety (90)-day period ending on the day prior to the purchase date
determined pursuant to Sections 2.1(e)(i) or 2.1(e)(iii) of this Commercial
Shared-Loss Agreement, except to the extent such Accrued Interest was included
in the Book Value of such Shared-Loss Loan, and (ii) any collections on a
Shared-Loss Loan received by the Assuming Bank after the purchase date
applicable to such Shared-Loss Loan shall be applied (without duplication) to
reduce the Shared-Loss Asset Repurchase Price of such Shared-Loss Loan on a
dollar-for-dollar basis. For purposes of determining the amount of unpaid
interest which accrued during a given period with respect to a variable-rate
Shared-Loss Loan, all collections of interest shall be deemed to be applied to
unpaid interest in the chronological order in which such interest
accrued.
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“Shared-Loss
Assets” means
Shared-Loss Loans, Other Real Estate purchased by the Assuming Bank, Additional
ORE, Subsidiary ORE and Capitalized Expenditures, but does not include Shared
Loss MTM Assets.
“Shared-Loss
Loan Commitment”
means:
(i) any
Commitment to make a further extension of credit or to make a further advance
with respect to an existing Shared-Loss Loan; and
(ii) any
Shared-Loss Loan Commitment (described in subparagraph (i) immediately
preceding) with respect to which the Assuming Bank has made a Permitted
Amendment.
“Shared-Loss
Loan Commitment Advance” means an advance pursuant to
a Shared-Loss Loan Commitment with respect to which the Assuming Bank has not made a Permitted
Advance.
“Shared-Loss
Loans”
means:
(i)(A)
Loans purchased by the Assuming Bank pursuant to the Purchase and Assumption
Agreement set forth on Exhibit 4.15(b) to the Purchase and Assumption Agreement,
(B) New Shared-Loss Loans purchased by the Assuming Bank pursuant to the
Purchase and Assumption Agreement, (C) Permitted Advances and (D) Shared-Loss
Loan Commitment Advances, if any; provided, that Shared-Loss
Loans shall not include Loans, New Shared-Loss Loans, Permitted Advances and
Shared-Loss Loan Commitment Advances with respect to which an Acquired
Subsidiary, or a constituent Subsidiary thereof, is an Obligor; (E) Loans owned
by any Subsidiary which are not Shared-Loss Loans under the Single Family
Shared-Loss Agreement; and (F) Consumer Loans; and
(ii) any
Shared-Loss Loans (described in subparagraph (i) immediately preceding) with
respect to which the Assuming Bank has made a Permitted Amendment.
“Shared-Loss
MTM Assets” means
those securities and other assets listed on Exhibit 4.15(C).
“Shared-Loss
Payment Trigger”
means when the sum of the Cumulative Loss Amount under the Single Family
Shared-Loss Agreement and the cumulative Net Charge-Offs under this Commercial
Shared-Loss Agreement, exceeds the First Loss Tranche. If the First
Loss Tranche is zero or a negative number, the Shared-Loss Payment Trigger shall
be deemed to have been reached upon Bank Closing.
“Shared-Loss
Quarter” has the
meaning provided in Section 2.1(a)(i) of this Commercial Shared-Loss
Agreement.
“Stated
Threshold” means
total losses under the shared loss agreements in the amount of ($
526,000,000.00).
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“Subsidiary
ORE” means all
assets owned by ORE Subsidiaries that would constitute Additional ORE if such
assets were on the books of the Assuming Bank.
“Termination
Date” means the
eighth (8th)anniversary of the Commencement Date.
“Third
Party Servicer”
means any servicer appointed from time to time by the Assuming Bank or
any Affiliate of the Assuming Bank to service the Shared-Loss Assets on behalf
of the Assuming bank, the identity of which shall be given to the Receiver prior
to or concurrent with the appointment thereof.
ARTICLE II — SHARED-LOSS
ARRANGEMENT
2.1 Shared-Loss
Arrangement.
(a)
Quarterly Certificates. (i) Not
later than thirty (30) days after the end of each Calendar Quarter from and
including the initial Calendar Quarter to and including the Calendar Quarter in
which the Applicable Anniversary of the Commencement Date falls (each of such
Calendar Quarters being referred to herein as a “Shared-Loss Quarter”), the
Assuming Bank shall deliver to the Receiver a certificate, signed by the
Assuming Bank’s chief executive officer and its chief financial officer, setting
forth in such form and detail as the Receiver may specify (a “Quarterly
Certificate”):
(A) the
amount of Charge-Offs, the amount of Recoveries and the amount of Net
Charge-Offs (which amount may be negative) during such Shared-Loss Quarter with
respect to the Shared-Loss Assets (and for Recoveries, with respect to the
Assets for which a charge-off was effected by the Failed Bank prior to Bank
Closing); and
(B) the
aggregate amount of Reimbursable Expenses (which amount may be negative) during
such Shared-Loss Quarter; and
(C) net
realized loss on the Shared Loss MTM Assets determined pursuant to FAS 115,
expressed as a positive number (MTM Net Realized Loss), or net realized gain on
the Shared Loss MTM assets, expressed as a negative number (MTM Net Realized
Gain); and
(D) any
other than temporary impairment of the Shared Loss MTM Assets, determined
pursuant to FAS 115, expressed as a positive number (“OTTI Loss”) or reversals
of OTTI Loss, expressed as a negative number (for the avoidance of doubt, normal
and customary unrealized xxxx-to-market changes by reason of the application of
fair value accounting do not qualify for loss sharing payments).
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(ii) Not
later than thirty (30) days after the end of each Calendar Quarter from and
including the first Calendar Quarter following the final Shared-Loss Quarter to
and including the Calendar Quarter in which the Termination Date falls (each of
such Calendar Quarters being referred to herein as a “Recovery Quarter”), the
Assuming Bank shall deliver to the Receiver a Quarterly Certificate setting
forth, in such form and detail as the Receiver may specify
(A) the
amount of Recoveries and Recovery Expenses during such Recovery Quarter. On the
Quarterly Certificate for the first Recovery
Quarter only, the Assuming Bank may report as a separate item, in such
form and detail as the Receiver may specify, the aggregate amount of any
Reimbursable Expenses that: (a) were incurred prior to or during the final
Shared-Loss Quarter, and (b) had not been
included in any Quarterly Certificate for any Shared-Loss Quarter because they
had not been actually paid by or on behalf of the Assuming Bank (in accordance
with the terms of this Commercial Shared-Loss Agreement) during any Shared-Loss
Quarter and (c)
were actually paid by or on behalf of the Assuming Bank (in accordance with the
terms of this Commercial Shared-Loss Agreement) during the first Recovery
Quarter; and
(B) net
realized gain on the Shared Loss MTM Assets.
(b) Payments With Respect to
Shared-Loss Assets.
(i) For
purposes of this Section 2.1(b), the Assuming Bank shall initially record the
Shared-Loss Assets on its Accounting Records at Book Value, and initially record
the Shared Loss MTM Assets on its Accounting Records at Fair Value, and adjust
such amounts as such values may change after the Bank Closing. If the amount of
all Net Charge-Offs during any Shared-Loss Quarter plus Reimbursable
Expenses, plus MTM
Net Realized Gain or MTM Net Realized Loss, plus OTTI Loss during such Shared-Loss
Quarter (the “Shared-Loss Amount”) is positive, then, except as provided in
Sections 2.1(c) and (e) below, and subject to the provisions of Section
2.1(b)(vi) below, not later than fifteen (15) days after the date on which the
Receiver receives the Quarterly Certificate with respect to such Shared-Loss
Quarter, the Receiver shall pay to the Assuming Bank an amount equal to eighty
percent (80%) of the Shared-Loss Amount for such Shared-Loss Quarter. If the
Shared-Loss Amount during any Shared-Loss Quarter is negative, the Assuming Bank
shall pay to the Receiver an amount equal to eighty percent (80%) of the
Shared-Loss Amount for such Shared-Loss Quarter, which payment shall be
delivered to the Receiver together with the Quarterly Certificate for such
Shared-Loss Quarter. When the cumulative Shared-Loss Amounts for all
Shared-Loss Quarters plus the Cumulative Loss Amount under the Single Family
Shared-Loss Agreement equals or exceeds the Stated Threshold, the Receiver shall
pay to the Assuming Bank an amount equal to ninety-five percent ((95%) of the
Shared-Loss Amount for each Shared-Loss Quarter, until such time as the
cumulative Shared-Loss Amount for all Shared-Loss Quarters is less than the
Stated Threshold, when the percentage shall revert back to eighty percent
(80%).
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(ii) If
the amount of gross Recoveries during any Recovery Quarter less Recovery Expenses during such
Recovery Quarter plus net realized gains or reversals of OTTI Loss on Shared
Loss MTM Assets (the “Recovery Amount”) is positive, then, simultaneously with
its delivery of the Quarterly Certificate with respect to such Recovery Quarter,
the Assuming Bank shall pay to the Receiver an amount equal to eighty percent
(80%) of the Recovery Amount for such Recovery Quarter. If the Recovery Amount
is negative, then such negative amount shall be subtracted from the amount of
gross Recoveries during the next succeeding Recovery Quarter in determining the
Recovery Amount in such next succeeding Recovery Quarter; provided, that this Section
2.1(b)(ii) shall operate successively in the event that the Recovery Amount
(after giving effect to this Section 2.1(b)(ii)) in such next succeeding
Recovery Quarter is negative. The Assuming Bank shall specify, in the Quarterly
Certificate for the final Recovery Quarter, the aggregate amount for all
Recovery Quarters only, as of the end of, and including, the final Recovery
Quarter of (A) Recoveries plus net realized gains or reversals of OTTI Loss on
Shared Loss MTM Assets (“Aggregate Recovery Period Recoveries”), (B) Recovery
Expenses (“Aggregate Recovery Expenses”), and (C) only those Recovery
Expenses that have been actually “offset” against Aggregate Recovery Period
Recoveries (including those so “offset” in that final Recovery Quarter)
(“Aggregate Offset Recovery Expenses”); as used in this sentence, the term
“offset” means the amount that has been applied to reduce gross Recoveries in
any Recovery Quarter pursuant to the methodology set forth in this Section
2.1(b)(ii). If, at the end of the final Recovery Quarter the amount
of Aggregate Recovery Expenses exceeds the amount of Aggregate Recovery Period
Recoveries, the Receiver shall have no obligation to pay to the Assuming Bank
all or any portion of such excess. Subsequent to the Assuming Bank’s calculation
of the Recovery Amount (if any) for the final Recovery Quarter, the Assuming
Bank shall also show on the Quarterly Certificate for the final Recovery Quarter
the results of the following three mathematical calculations: (i) Aggregate
Recovery Period Recoveries minus Aggregate
Offset Recovery Expenses; (ii) Aggregate Recovery Expenses minus Aggregate
Offset Recovery Expenses; and (iii) the lesser of the two
amounts calculated in (i) and (ii) immediately above (“Additional Recovery
Expenses”) multiplied
by 80% (the amount so calculated in (iii) being defined as the
“Additional Recovery Expense Amount”). If the Additional Recovery Expense Amount
is greater than zero, then the Assuming Bank may request in the Quarterly
Certificate for the final Recovery Quarter that the Receiver reimburse the
Assuming Bank the amount of the Additional Recovery Expense Amount and the
Receiver shall pay to the Assuming Bank the Additional Recovery Expense Amount
within fifteen (15) days after the date on which the Receiver receives that
Quarterly Certificate. On the Quarterly Certificate for the final Recovery
Quarter only, the Assuming Bank may include, in addition to any Recovery
Expenses for that Recovery Quarter that were paid by or on behalf of the
Assuming Bank in that Recovery Quarter, those Recovery Expenses that: (a) were
incurred prior to or during the final Recovery Quarter, and (b) had not been included in
any Quarterly Certificate for any Recovery Quarter because they had not been
actually paid by or on behalf of the Assuming Bank (in accordance with the terms
of this Commercial Shared-Loss Agreement) during any Recovery Quarter, and (c) were actually
paid by or on behalf of the Assuming Bank (in accordance with the terms of this
Commercial Shared-Loss Agreement) prior to the date the Assuming Bank is
required to deliver that final Quarterly Certificate to the Receiver under the
terms of Section 2.1(a)(ii).
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(iii) With
respect to each Shared-Loss Quarter and Recovery Quarter, collections by or on
behalf of the Assuming Bank on any charge-off effected by the Failed Bank prior
to Bank Closing on an Asset other than a Shared-Loss Asset or Shared-Loss MTM
Assets shall be reported as Recoveries under this Section 2.1 only to the extent
such collections exceed the Book Value of such Asset, if any. For any
Shared-Loss Quarter or Recovery Quarter in which collections by or on behalf of
the Assuming Bank on such Asset are applied to both Book Value and to a
charge-off effected by the Failed Bank prior to Bank Closing, the amount of
expenditures incurred by or on behalf of the Assuming Bank attributable to the
collection of any such Asset, that shall be considered a Reimbursable Expense or
a Recovery Expense under this Section 2.1 will be limited to a proportion of
such expenditures which is equal to the proportion derived by dividing (A) the
amount of collections on such Asset applied to a charge-off effected by the
Failed Bank prior to Bank Closing, by (B) the total collections on such
Assets.
(iv) If
the Assuming Bank has duly specified an amount of Reimbursable Expenses on the
Quarterly Certificate for the first Recovery Quarter as described above in the
last sentence of Section 2.1(a)(ii), then, not later than fifteen (15) days
after the date on which the Receiver receives that Quarterly Certificate, the
Receiver shall pay to the Assuming Bank an amount equal to eighty percent (80%)
(or, if the Cumulative Loss Amount under the Single Family Shared-Loss Agreement
plus the cumulative Shared-Loss Amount for all Shared-Loss Quarters equals or
exceeds the Stated Threshold, ninety-five percent (95%)) of the amount of such
Reimbursable Expenses.
(v) If
the First Loss Tranche as determined under the Purchase and Assumption Agreement
is a positive number, Receiver has no obligation to make payment for any Shared
Loss Quarters until the Shared-Loss Payment Trigger is satisfied.
(c) Limitation
on Shared-Loss Payment. The Receiver shall not be
required to make any payments pursuant to this Section 2.1 with respect to any
Charge-Off of a Shared-Loss Asset that the Receiver or the Corporation
determines, based upon the Examination Criteria, should not have been effected
by the Assuming Bank; provided, (x) the Receiver must provide notice to the
Assuming Bank detailing the grounds for not making such payment, (y) the
Receiver must provide the Assuming Bank with a reasonable opportunity to cure
any such deficiency and (z) (1) to the extent curable, if cured, the Receiver
shall make payment with respect to any properly effected Charge-Off and (2) to
the extent not curable, the Receiver shall make a payment as to all Charge-Offs
(or portion of Charge-Offs) that were effected which would have been payable as
a Charge-Off if the Assuming Bank had properly effected such Charge-Off. In the
event that the Receiver does not make any payments with respect to any
Charge-Off of a Shared-Loss Asset pursuant to this Section 2.1 or determines
that a payment was improperly made, the Assuming Bank and the Receiver shall,
upon final resolution, make such accounting adjustments and payments as may be
necessary to give retroactive effect to such corrections.
(d) Sale of,
or Additional Advances or Amendments with Respect to, Shared-Loss Loans and
Administration of Related Loans. No Shared-Loss Loan shall be
treated as a Shared-Loss Asset pursuant to this Section 2.1 (i) if the Assuming
Bank sells or otherwise transfers such Shared-Loss Loan or any interest therein
(whether with or without recourse) to any Person, (ii) after the Assuming Bank
makes any additional advance, commitment or increase in the amount of a
commitment with respect to such Shared-Loss Loan that does not constitute a
Permitted Advance or a Shared-Loss Loan Commitment Advance, (iii) after the
Assuming Bank makes any amendment, modification, renewal or extension to such
Shared-Loss Loan that does not constitute a Permitted Amendment, or (iv) after
the Assuming Bank has managed, administered or collected any “Related Loan” (as
such term is defined in Section 3.4 of Article III of this Commercial
Shared-Loss Agreement) in any manner which would have the effect of increasing
the amount of any collections with respect to the Related Loan to the detriment
of such Shared-Loss Asset to which such loan is related; provided,
that any such Shared-Loss Loan that has been the subject of
Charge-Offs prior to the taking of any action described in clause (i),
(ii), (iii) or (iv) of this Section 2.1(d) by the Assuming Bank shall
be treated as a Shared-Loss Asset pursuant to this Section 2.1 solely for the
purpose of treatment of Recoveries on such Charge-Offs until such time as the
amount of Recoveries with respect to such Shared-Loss Asset equals such
Charge-Offs.
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(e) Option to
Purchase.
(i) In
the event that the Assuming Bank determines that there is a substantial
likelihood that continued efforts to collect a Shared-Loss Asset or an Asset for
which a charge-off was effected by the Failed Bank with, in either case, a Legal
Balance of $500,000 or more on the Accounting Records of the Assuming Bank will
result in an expenditure, after Bank Closing, of funds by on behalf of the
Assuming Bank to a third party for a specified purpose (the expenditure of
which, in its best judgment, will maximize collections), which do not constitute
Reimbursable Expenses or Recovery Expenses, and such expenses will exceed ten
percent (10%) of the then book value thereof as reflected on the Accounting
Records of the Assuming Bank, the Assuming Bank shall (i) promptly so notify the
Receiver and (ii) request that such expenditure be treated as a Reimbursable
Expense or Recovery Expense for purposes of this Section 2.1. (Where the
Assuming Bank determines that there is a substantial likelihood that the
previously mentioned situation exists with respect to continued efforts to
collect a Shared-Loss Asset or an Asset for which a charge-off was effected by
the Failed Bank with, in either case, a Legal Balance of less than $1,000,000 on
the Accounting Records of the Assuming Bank, the Assuming Bank may so notify the
Receiver and request that such expenditure be treated as a Reimbursable Expense
or Recovery Expense.) Within thirty (30) days after its receipt of such a
notice, the Receiver will advise the Assuming Bank of its consent or denial,
that such expenditures shall be treated as a Reimbursable Expense or Recovery
Expense, as the case may be. Notwithstanding the failure of the Receiver to give
its consent with respect to such expenditures, the Assuming Bank shall continue
to administer such Shared-Loss Asset in accordance with Section 2.2, except that
the Assuming Bank shall not be required to make such expenditures. At any time
after its receipt of such a notice and on or prior to the Termination Date the
Receiver shall have the right to purchase such Shared-Loss Asset or Asset as
provided in Section 2.1(e)(iii), notwithstanding any consent by the Receiver
with respect to such expenditure.
(ii) During
the period prior to the Termination Date, the Assuming Bank shall notify the
Receiver within fifteen (15) days after any of the following becomes fully or
partially charged-off:
(A) a
Shared-Loss Loan having a Legal Balance (or, in the case of more than one (1)
Shared-Loss Loan made to the same Obligor, a combined Legal Balance) of $500,000
or more in circumstances in which the legal claim against the relevant Obligor
survives; or
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(B) a
Shared-Loss Loan to a director, an “executive officer” as defined in 12
C.F.R. 215.2(d), a “principal shareholder” as defined in
12 C.F.R. 215.2(l), or an Affiliate of the Assuming
Bank.
(iii) If
the Receiver determines in its discretion that the Assuming Bank is not
diligently pursuing collection efforts with respect to any Shared-Loss Asset
which has been fully or partially charged-off or written-down (including any
Shared-Loss Asset which is identified or required to be identified in a notice
pursuant to Section 2.1(e)(ii)) or any Asset for which there exists a Failed
Bank Charge-Off/Write-Down, the Receiver may at its option, exercisable at any
time on or prior to the Termination Date, require the Assuming Bank to assign,
transfer and convey such Shared-Loss Asset or Asset to and for the sole benefit
of the Receiver for a price equal to the Shared-Loss Asset Repurchase Price
thereof less the Related Liability Amount with respect to any Related
Liabilities related to such Shared-Loss Asset or Asset.
(iv) Not
later than ten (10) days after the date upon which the Assuming Bank receives
notice of the Receiver’s intention to purchase or require the assignment of any
Shared-Loss Asset or Asset pursuant to Section 2.1(e)(i) or (iii), the Assuming
Bank shall transfer to the Receiver such Shared-Loss Asset or Asset and any
Credit Files relating thereto and shall take all such other actions as may be
necessary and appropriate to adequately effect the transfer of such Shared-Loss
Asset or Asset from the Assuming Bank to the Receiver. Not later than fifteen
(15) days after the date upon which the Receiver receives such Shared-Loss Asset
or Asset and any Credit Files relating thereto, the Receiver shall pay to the
Assuming Bank an amount equal to the Shared-Loss Asset Repurchase Price of such
Shared-Loss Asset or Asset less the Related Liability Amount.
(v) The
Receiver shall assume all Related Liabilities with respect to any Shared-Loss
Asset or Asset set forth in the notice described in Section
2.1(e)(iv).
(f) Dispute
Resolution.
(i) (A)
Any dispute as to whether a Charge-Off of a Shared-Loss Asset was made in
accordance with Examination Criteria shall be resolved by the Assuming Bank’s
Chartering Authority. (B) With respect to any other dispute arising under the
terms of this Commercial Shared-Loss Agreement which the parties hereto cannot
resolve after having negotiated such matter, in good faith, for a thirty (30)
day period, other than a dispute the Corporation is not permitted to submit to
arbitration under the Administrative Dispute Resolution Act of 1996 (“ADRA”), as
amended, such other dispute shall be resolved by determination of a review board
(a “Review Board”) established pursuant to Section 2.1(f). Any Review Board
under this Section 2.1(f) shall follow the provisions of the Federal Arbitration
Act and shall follow the provisions of the ADRA. (C) Any determination by the
Assuming Bank’s Chartering Authority or by a Review Board shall be conclusive
and binding on the parties hereto and not subject to further dispute, and
judgment may be entered on said determination in accordance with applicable
arbitration law in any court having jurisdiction thereof.
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(ii) A
Review Board shall consist of three (3) members, each of whom shall have such
expertise as the Corporation and the Assuming Bank agree is relevant. As
appropriate, the Receiver or the Corporation (the “FDIC Party”) will select one
member, one member will be selected by the Assuming Bank and the third member
(the “Neutral Member”) will be selected by the other two members. The member of
the Review Board selected by a party may be removed at any time by such party
upon two (2) days’ written notice to the other party of the selection of a
replacement member. The Neutral Member may be removed by unanimous action of the
members appointed by the FDIC Party and the Assuming Bank after two (2) days’
prior written notice to the FDIC Party and the Assuming Bank of the selection of
a replacement Neutral Member. In addition, if a Neutral Member fails
for any reason to serve or continue to serve on the Review Board, the other
remaining members shall so notify the parties to the dispute and the Neutral
Member in writing that such Neutral Member will be replaced, and the Neutral
Member shall thereafter be replaced by the unanimous action of the other
remaining members within twenty (20) business days of that
notification.
(iii) No
dispute may be submitted to a Review Board by any of the parties to this
Commercial Shared-Loss Agreement unless such party has provided to the other
party a written notice of dispute (“Notice of Dispute”). During the forty-five
(45)-day period following the providing of a Notice of Dispute, the parties to
the dispute will make every effort in good faith to resolve the dispute by
mutual agreement. As part of these good faith efforts, the parties should
consider the use of less formal dispute resolution techniques, as judged
appropriate by each party in its sole discretion. Such techniques may include,
but are not limited to, mediation, settlement conference, and early neutral
evaluation. If the parties have not agreed to a resolution of the dispute by the
end of such forty-five (45)-day period, then, subject to the discretion of the
Corporation and the written consent of the Assuming Bank as set forth in Section
2.1(f)(i)(B) above, on the first day following the end of such period, the FDIC
Party and the Assuming Bank shall notify each other of its selection of its
member of the Review Board and such members shall be instructed to promptly
select the Neutral Member of the Review Board. If the members appointed by the
FDIC Party and the Assuming Bank are unable to promptly agree upon the initial
selection of the Neutral Member, or a timely replacement Neutral Member as set
forth in Section 2.1(f)(ii) above, the two appointed members shall apply to the
American Arbitration Association (“AAA”), and such Neutral Member shall be
appointed in accordance with the Commercial Arbitration Rules of the
AAA.
(iv) The
resolution of a dispute pursuant to this Section 2.1(f) shall be governed by the
Commercial Arbitration Rules of the AAA to the extent that such rules are not
inconsistent with this Section 2.1(f). The Review Board may modify the
procedures set forth in such rules from time to time with the prior approval of
the FDIC Party and the Assuming Bank.
(v) Within
fifteen (15) days after the last to occur of the final written submissions of
both parties, the presentation of witnesses, if any, and oral presentations, if
any, the Review Board shall adopt the position of one of the parties and shall
present to the parties a written award regarding the dispute. The determination
of any two (2) members of a Review Board will constitute the determination of
such Review Board.
(vi) The
FDIC Party and the Assuming Bank will each pay the fees and expenses of the
member of the Review Board selected by it. The FDIC Party and Assuming Bank will
share equally the fees and expenses of the Neutral Member. No such fees or
expenses incurred by or on behalf of the Assuming Bank shall be subject to
reimbursement by the FDIC Party under this Commercial Shared-Loss Agreement or
otherwise.
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(vii) Each
party will bear all costs and expenses incurred by it in connection with the
submission of any dispute to a Review Board. No such costs or expenses incurred
by or on behalf of the Assuming Bank shall be subject to reimbursement by the
FDIC Party under this Commercial Shared-Loss Agreement or otherwise. The Review
Board shall have no authority to award costs or expenses incurred by either
party to these proceedings.
(viii) Any
dispute resolution proceeding held pursuant to this Section 2.1(f) shall not be
public. In addition, each party and each member of any Review Board shall
strictly maintain the confidentiality of all issues, disputes, arguments,
positions and interpretations of any such proceeding, as well as all
information, attachments, enclosures, exhibits, summaries, compilations,
studies, analyses, notes, documents, statements, schedules and other similar
items associated therewith, except as the parties agree in writing or such
disclosure is required pursuant to law, rule or regulation. Pursuant to ADRA,
dispute resolution communications may not be disclosed either by the parties or
by any member of the Review board unless:
(1) all
parties to the dispute resolution proceeding agree in writing;
(2) the
communication has already been made public;
(3) the
communication is required by statute, rule or regulation to be made public;
or
(4) a
court determines that such testimony or disclosure is necessary to prevent a
manifest injustice, help establish a violation of the law or prevent harm to the
public health or safety, or of sufficient magnitude in the particular case to
outweigh the integrity of dispute resolution proceedings in general by reducing
the confidence of parties in future cases that their communications will remain
confidential.
(ix) Any
dispute resolution proceeding pursuant to this Section 2.1(f) (whether as a
matter of good faith negotiations, by resort to a Review Board, or otherwise) is
a compromise negotiation for purposes of the Federal Rules of Evidence and state
rules of evidence. The parties agree that all proceedings, including any
statement made or document prepared by any party, attorney or other participants
are privileged and shall not be disclosed in any subsequent proceeding or
document or construed for any purpose as an admission against interest. Any
document submitted and any statements made during any dispute resolution
proceeding are for settlement purposes only. The parties further agree not to
subpoena any of the members of the Review Board or any documents submitted to
the Review Board. In no event will the Neutral Member voluntarily testify on
behalf of any party.
(x) No
decision, interpretation, determination, analysis, statement, award or other
pronouncement of any Review Board shall constitute precedent as regards any
subsequent proceeding (whether or not such proceeding involves dispute
resolution under this Commercial Shared-Loss Agreement) nor shall any Review
Board be bound to follow any decision, interpretation, determination, analysis,
statement, award or other pronouncement rendered by any previous Review Board or
any other previous dispute resolution panel which may have convened in
connection with a transaction involving other failed financial institutions or
Federal assistance transactions.
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(xi) The
parties may extend any period of time in this Section 2.1(f) by mutual
agreement. Notwithstanding anything above to the contrary, no dispute shall be
submitted to a Review Board until each member of the Review Board, and any
substitute member, if applicable, agrees to be bound by the provisions of this
Section 2.1(f) as applicable to members of a Review Board. Prior to the
commencement of the Review Board proceedings, or, in the case of a substitute
Neutral Member, prior to the re-commencement of such proceedings subsequent to
that substitution, the Neutral Member shall provide a written oath of
impartiality.
(xii) For
the avoidance of doubt, and notwithstanding anything herein to the contrary, in
the event any notice of dispute is provided to a party under this Section 2.1(g)
prior to the Termination Date, the terms of this Commercial Shared-Loss
Agreement shall remain in effect with respect to any such items set forth in
such notice until such time as any such dispute with respect to such item is
finally resolved.
2.2 Administration
of Shared-Loss Assets.
The Assuming Bank shall at all times prior to the Termination Date comply
with the Rules Regarding the Administration of Shared-Loss Assets as set forth
in Article III of this Commercial Shared-Loss Agreement.
2.3 Auditor Report; Right to
Audit.
(a) Within
ninety (90) days after the end of each fiscal year from and including the fiscal
year during which Bank Closing falls to and including the calendar year during
which the Termination Date falls, the Assuming Bank shall deliver to the
Corporation and to the Receiver a report signed by its independent public
accountants stating that they have reviewed the terms of this Commercial
Shared-Loss Agreement and that, in the course of their annual audit of the
Assuming Bank’s books and records, nothing has come to their attention
suggesting that any computations required to be made by the Assuming Bank during
such year by this Article II were not made by the Assuming Bank in
accordance herewith. In the event that the Assuming Bank cannot comply with the
preceding sentence, it shall promptly submit to the Receiver corrected
computations together with a report signed by its independent public accountants
stating that, after giving effect to such corrected computations, nothing has
come to their attention suggesting that any computations required to be made by
the Assuming Bank during such year by this Article II were not made by the
Assuming Bank in accordance herewith. In such event, the Assuming Bank and the
Receiver shall make all such accounting adjustments and payments as may be
necessary to give effect to each correction reflected in such corrected
computations, retroactive to the date on which the corresponding incorrect
computation was made. It is the intention of this provision to align
the timing of the audit required under this Commercial Shared-Loss Agreement
with the examination audit required pursuant to 12 CFR Section 363.
(b) The
Assuming Bank shall perform on an annual basis an internal audit of its
compliance with the provisions of this Article II and shall provide the Receiver
and the Corporation with copies of the internal audit reports and access to
internal audit workpapers related to such internal audit.
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(c) The
Receiver or the Corporation may perform an audit to determine the Assuming
Bank’s compliance with the provisions of this Commercial Shared-Loss Agreement,
including this Article II, at any time by providing not less than ten (10)
Business Days prior written notice. The scope and duration of any such audit
shall be within the discretion of the Receiver or the Corporation, as the case
may be, but shall in no event be administered in a manner that unreasonably
interferes with the operation of the Assuming Bank’s business. The Receiver or
the Corporation, as the case may be, shall bear the expense of any such audit.
In the event that any corrections are necessary as a result of such an audit,
the Assuming Bank and the Receiver shall make such accounting adjustments and
payments as may be necessary to give retroactive effect to such
corrections.
2.4 Withholdings.
Notwithstanding any other provision in this Article II, the Receiver, upon the
direction of the Director (or designee) of the Corporation’s Division of
Resolutions and Receiverships, may withhold payment for any amounts included in
a Quarterly Certificate delivered pursuant to Section 2.1, if, in its judgment,
there is a reasonable basis under the terms of this Commercial Shared-Loss
Agreement for denying the eligibility of an item for which reimbursement or
payment is sought under such Section. In such event, the Receiver shall provide
a written notice to the Assuming Bank detailing the grounds for withholding such
payment. At such time as the Assuming Bank demonstrates to the satisfaction of
the Receiver that the grounds for such withholding of payment, or portion of
payment, no longer exist or have been cured, then the Receiver shall pay the
Assuming Bank the amount withheld which the Receiver determines is eligible for
payment, within fifteen (15) Business Days. In the event the Receiver or the
Assuming Bank elects to submit the issue of the eligibility of the item for
reimbursement or payment for determination under the dispute resolution
procedures of Section 2.1(f), then (i) if the dispute is settled by the mutual
agreement of the parties in accordance with Section 2.1(f)(iii), the Receiver
shall pay the amount withheld (to the extent so agreed) within fifteen (15)
Business Days from the date upon which the dispute is determined by the parties
to be resolved by mutual agreement, and (ii) if the dispute is resolved by the
determination of a Review Board, the Receiver shall pay the amount withheld (to
the extent so determined) within fifteen (15) Business Days from the date upon
which the Receiver is notified of the determination by the Review Board of its
obligation to make such payment. Any payment by the Receiver pursuant to this
Section 2.4 shall be made together with interest on the amount thereof from the
date the payment was agreed or determined otherwise to be due, at the interest
rate per annum determined by the Receiver to be equal to the coupon equivalent
of the three (3)-month U.S. Treasury Xxxx Rate in effect as of the first
Business Day of each Calendar Quarter during which such interest accrues as
reported in the Federal Reserve Board’s Statistical Release for Selected
Interest Rates H.15 opposite the caption “Auction Average - 3-Month” or, if not
so reported for such day, for the next preceding Business Day for which such
rate was so reported.
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2.5 Books and
Records. The Assuming Bank shall at all times during the term
of this Commercial Shared-Loss Agreement keep books and records which fairly
present all dealings and transactions carried out in connection with its
business and affairs. Except as otherwise provided for in the Purchase and
Assumption Agreement or this Commercial Shared-Loss Agreement, all financial
books and records shall be kept in accordance with generally accepted accounting
principles, consistently applied for the periods involved and in a manner such
that information necessary to determine compliance with any requirement of the
Purchase and Assumption Agreement or this Commercial Shared-Loss Agreement will
be readily obtainable, and in a manner such that the purposes of the Purchase
and Assumption Agreement or this Commercial Shared-Loss Agreement may be
effectively accomplished. Without the prior written approval of the Corporation,
the Assuming Bank shall not make any change in its accounting principles
adversely affecting the value of the Shared-Loss Assets except as required by a
change in generally accepted accounting principles. The Assuming Bank shall
notify the Corporation of any change in its accounting principles affecting the
Shared-Loss Assets which it believes are required by a change in generally
accepted accounting principles.
2.6 Information. The
Assuming Bank shall promptly provide to the Corporation such other information,
including financial statements and computations, relating to the performance of
the provisions of the Purchase and Assumption Agreement or otherwise relating to
its business and affairs or this Commercial Shared-Loss Agreement, as the
Corporation or the Receiver may request from time to time.
2.7 Tax
Ruling. The Assuming Bank
shall not at any time, without the
Corporation’s
prior written consent, seek a private letter ruling or other determination from
the Internal Revenue Service or otherwise seek to qualify for any special tax
treatment or benefits associated with any payments made by the Corporation
pursuant to the Purchase and Assumption Agreement or this Commercial Shared-Loss
Agreement.
ARTICLE
III - RULES REGARDING THE ADMINISTRATION OF SHARED-LOSS
ASSETS
AND SHARED-LOSS MTM ASSETS
3.1 Agreement
with Respect to Administration. The Assuming Bank shall (and
shall cause any of its Affiliates to which the Assuming Bank transfers any
Shared-Loss Assets or Shared-Loss MTM Assets) to, or a Third Party Servicer to,
manage, administer, and collect the Shared-Loss Assets and Shared-Loss MTM
Assets while owned by the Assuming Bank or any Affiliate thereof during the term
of this Commercial Shared-Loss Agreement in accordance with the rules set forth
in this Article III (“Rules”). The Assuming Bank shall be responsible to the
Receiver and the Corporation in the performance of its duties hereunder and
shall provide to the Receiver and the Corporation such reports as the Receiver
or the Corporation reasonably deems advisable, including but not limited to the
reports required by Section 3.3 hereof, and shall permit the Receiver and the
Corporation at all times to monitor the Assuming Bank’s performance of its
duties hereunder.
3.2 Duties of the Assuming Bank
with Respect to Shared-Loss Assets.
(a) In
performance of its duties under these Rules, the Assuming Bank
shall:
(i)
manage, administer, collect and effect Charge-Offs and Recoveries with respect
to each Shared-Loss Asset in a manner consistent with (A) usual and prudent
business and banking practices; (B) the Assuming Bank’s (or, in the case a Third
Party Servicer is engaged, the Third Party Servicer’s) practices and procedures
including, without limitation, the then-effective written internal credit policy
guidelines of the Assuming Bank, with respect to the management, administration
and collection of and taking of charge-offs and write-downs with respect to
loans, other real estate and repossessed collateral that do not constitute
Shared Loss Assets;
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(ii)
exercise its best business judgment in managing, administering, collecting and
effecting Charge-Offs with respect to Shared-Loss Assets;
(iii) use
its best efforts to maximize collections with respect to Shared-Loss Assets and,
if applicable for a particular Shared-Loss Asset, without regard to the effect
of maximizing collections on assets held by the Assuming Bank or any of its
Affiliates that are not Shared-Loss Assets;
(iv)
adopt and implement accounting, reporting, record-keeping and similar systems
with respect to the Shared-Loss Assets, as provided in Section 3.4
hereof;
(v)
retain sufficient staff to perform its duties hereunder; and
(vi)
provide written notification in accordance with Article IV of this Commercial
Shared-Loss Agreement immediately after the execution of any contract pursuant
to which any third party (other than an Affiliate of the Assuming Bank) will
manage, administer or collect any of the Shared-Loss Assets, together with a
copy of that contract.
(b) Any
transaction with or between any Affiliate of the Assuming Bank with respect to
any Shared-Loss Asset including, without limitation, the execution of any
contract pursuant to which any Affiliate of the Assuming Bank will manage,
administer or collect any of the Shared-Loss Assets, or any other action
involving self-dealing, shall be subject to the prior written approval of the
Receiver or the Corporation.
(c) The
following categories of expenses shall not be deemed to be Reimbursable Expenses
or Recovery Expenses:
(i) Federal,
State, or local income taxes and expenses related thereto;
(ii)
salaries or other compensation and related benefits of Assuming Bank employees
and the employees of its Affiliates including, without limitation, any bonus,
commission or severance arrangements, training, payroll taxes, dues, or travel-
or relocation-related expenses,;
(iii) the
cost of space occupied by the Assuming Bank, any Affiliate thereof and their
staff, the rental of and maintenance of furniture and equipment, and expenses
for data processing including the purchase or enhancement of data processing
systems;
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(iv)
except as otherwise provided herein, fees for accounting and other independent
professional consultants (other than consultants retained to assess the
presence, storage or release of any hazardous or toxic substance, or any
pollutant or contaminant with respect to the collateral securing a Shared-Loss
Loan that has been fully or partially charged-off); provided, that for purposes of this Section
3.2(c)(iv), fees of attorneys and appraisers engaged as necessary to assist in
collections with respect to Shared-Loss Assets shall not be deemed to be fees of
other independent consultants;
(v) allocated
portions of any other overhead or general and administrative expense other than
any fees relating to specific assets, such as appraisal fees or environmental
audit fees, for services of a type the Assuming Bank does not normally perform
internally;
(vi) any
expense not incurred in good faith and with the same degree of care that the
Assuming Bank normally would exercise in the collection of troubled assets in
which it alone had an interest; and
(vii) any
expense incurred for a product, service or activity that is of an extravagant
nature or design.
(d) Subject
to Section 3.7, the Assuming Bank shall not contract with third parties to
provide services the cost of which would be a Reimbursable Expense or Recovery
Expense if the Assuming Bank would have provided such services itself if the
relevant Shared-Loss Assets were not subject to the loss-sharing provisions of
Section 2.1 of this Commercial Shared-Loss Agreement.
3.3 Duties of the Assuming Bank
with Respect to Shared-Loss MTM Assets.
(a) In
performance of its duties under these Rules, the Assuming Bank
shall:
(i)
manage, administer, collect and each Shared-Loss MTM Asset in a manner
consistent with (A) usual and prudent business and banking practices; (B) the
Assuming Bank’s practices and procedures including, without limitation, the
then-effective written internal credit policy guidelines of the Assuming Bank,
with respect to the management, administration and collection of similar assets
that are not Shared-Loss MTM Assets;
(ii)
exercise its best business judgment in managing, administering, collecting and
effecting Charge-Offs with respect to Shared-Loss MTM Assets;
(iii) use
its best efforts to maximize collections with respect to Shared-Loss MTM Assets
and, if applicable for a particular Shared-Loss MTM Asset, without regard to the
effect of maximizing collections on assets held by the Assuming Bank or any of
its Affiliates that are not Shared-Loss MTM Assets, provided that, any sale of a
Shared-Loss MTM Asset shall only be made with the prior approval of the Receiver
or the Corporation;
(iv)
adopt and implement accounting, reporting, record-keeping and similar systems
with respect to the Shared-Loss MTM Assets, as provided in Section 3.4
hereof;
(v)
retain sufficient staff to perform its duties hereunder; and
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(vi)
provide written notification in accordance with Article IV of this Commercial
Shared-Loss Agreement immediately after the execution of any contract pursuant
to which any third party (other than an Affiliate of the Assuming Bank) will
manage, administer or collect any of the Shared-Loss MTM Assets, together with a
copy of that contract.
(b) Any
transaction with or between any Affiliate of the Assuming Bank with respect to
any Shared-Loss MTM Asset including, without limitation, the execution of any
contract pursuant to which any Affiliate of the Assuming Bank will manage,
administer or collect any of the Shared-Loss Assets, or any other action
involving self-dealing, shall be subject to the prior written approval of the
Receiver or the Corporation.
(c) The
Assuming Bank shall not contract with third parties to provide services the cost
of which would be a Reimbursable Expense or Recovery Expense if the Assuming
Bank would have provided such services itself if the relevant Shared-Loss Assets
were not subject to the loss-sharing provisions of Section 2.1 of this
Commercial Shared-Loss Agreement.
3.4 Records
and Reports. The Assuming Bank shall establish and maintain records on a
separate general ledger, and on such subsidiary ledgers as may be appropriate to
account for the Shared-Loss Assets and the Shared-Loss MTM Assets, in such form
and detail as the Receiver or the Corporation may require, to enable the
Assuming Bank to prepare and deliver to the Receiver or the Corporation such
reports as the Receiver or the Corporation may from time to time request
regarding the Shared-Loss Assets, the Shared-Loss MTM Assets and the Quarterly
Certificates required by Section 2.1 of this Commercial Shared-Loss
Agreement.
3.5 Related
Loans.
(a) The
Assuming Bank shall not manage, administer or collect any “Related Loan” in any
manner which would have the effect of increasing the amount of any collections
with respect to the Related Loan to the detriment of the Shared-Loss Asset to
which such loan is related. A “Related Loan” means any loan or extension of
credit held by the Assuming Bank at any time on or prior to the end of the final
Recovery Quarter that is: (i) made to the same Obligor with respect to a Loan
that is a Shared-Loss Asset or with respect to a Loan from which Other Real
Estate, Additional ORE or Subsidiary ORE derived, or (ii) attributable to the
same primary Obligor with respect to any Loan described in clause (i) under the
rules of the Assuming Bank’s Chartering Authority concerning the legal lending
limits of financial institutions organized under its jurisdiction as in effect
on the Commencement Date, as applied to the Assuming Bank.
(b) The
Assuming Bank shall prepare and deliver to the Receiver with the Quarterly
Certificates for the Calendar Quarters ending June 30 and December 31 for all
Shared-Loss Quarters and Recovery Quarters, a schedule of all Related Loans
which are commercial loans or commercial real estate loans with Legal Balances
of $500,000 or more on the Accounting Records of the Assuming Bank as of the end
of each such semi-annual period, and all other commercial loans or commercial
real estate loans attributable to the same Obligor on such loans of $500,000 or
more.
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3.6 Legal
Action; Utilization of Special Receivership Powers. The Assuming Bank
shall notify the Receiver in writing (such notice to be given in accordance with
Article IV below and to include all relevant details) prior to utilizing in any
legal action any special legal power or right which the Assuming Bank derives as
a result of having acquired a Shared-Loss Asset from the Receiver, and the
Assuming Bank shall not utilize any such power unless the Receiver shall have
consented in writing to the proposed usage. The Receiver shall have the right to
direct such proposed usage by the Assuming Bank and the Assuming Bank shall
comply in all respects with such direction. Upon request of the Receiver, the
Assuming Bank will advise the Receiver as to the status of any such legal
action. The Assuming Bank shall immediately notify the Receiver of any judgment
in litigation involving any of the aforesaid special powers or
rights.
3.7 Third
Party Servicer. The Assuming Bank may perform any of its
obligations and/or exercise any of its rights under this Commercial Shared-Loss
Agreement through or by one or more Third Party Servicers, who may take actions
and make expenditures as if any such Third Party Servicer was the Assuming Bank
hereunder (and, for the avoidance of doubt, such expenses incurred by any such
Third Party Servicer on behalf of the Assuming Bank shall be Reimbursable
Expenses or Recovery Expenses, as the case may be, to the same extent such
expenses would so qualify if incurred by the Assuming Bank); provided, however,
that the use thereof by the Assuming Bank shall not release the Assuming Bank of
any obligation or liability hereunder.
ARTICLE
IV — PORTFOLIO SALE
4.1 Assuming
Bank Portfolio Sales of Remaining Shared-Loss Assets. The
Assuming Bank shall have the right with the concurrence of the Receiver,
commencing as of the first day of the third to last Shared-Loss Quarter, to
liquidate for cash consideration, in one or more transactions, all or a portion
of Shared-Loss Assets held by the Assuming Bank (“Portfolio
Sales”). If the Assuming Bank exercises its option under this Section
4.1, it must give thirty (30) days notice in writing to the Receiver setting
forth the details and schedule for the Portfolio Sale which shall be conducted
by means of sealed bid sales to third parties, not including any of the Assuming
Bank’s affiliates, contractors, or any affiliates of the Assuming Bank’s
contractors.
4.2 Calculation
of Sale Gain or Loss. For Shared-Loss Assets gain or loss on
the sales under Section 4.1 will be calculated as the sale price received by the
Assuming Bank less the book value of the remaining Shared-Loss
Assets.
ARTICLE
V — LOSS-SHARING NOTICES GIVEN TO CORPORATION AND/OR RECEIVER
As a
supplement to the notice provisions contained in Section 13.7 of the Purchase
and Assumption Agreement, any notice, request, demand, consent, approval, or
other communication (a “Notice”) given to the Corporation and/or the Receiver in
the loss-sharing context shall be given as follows:
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5.1 With
respect to a Notice under Section 2 and Sections 3.1-3.5 of this Commercial
Shared-Loss Agreement:
Federal
Deposit Insurance Corporation
Division
of Resolutions and Receiverships
000 00xx
Xxxxxx, X.X.
Xxxxxxxxxx,
X.X. 00000
Attention:
Assistant Director, Franchise and Asset Marketing
5.2 With
respect to a Notice under Section 3.6 of this Commercial Shared-Loss
Agreement:
Federal
Deposit Insurance Corporation Legal Division
0000
Xxxxx Xxxxxx
Xxxxxx,
Xxxxx 00000
Attention:
Regional Counsel
with a
copy to:
Federal
Deposit Insurance Corporation Legal Division
000 00xx
Xxxxxx, X.X.
Xxxxxxxxxx,
X.X. 00000
Attention:
Senior Counsel (Special Issues Group)
ARTICLE
VI – MISCELLANEOUS
6.1 Expenses. Except
as otherwise expressly provided herein, all costs and expenses incurred by a
party hereto in connection with this Commercial Shared-Loss Agreement shall be
borne by such party whether or not the transactions contemplated herein shall be
consummated.
6.2 Successors
and Assigns; Specific Performance. All terms and
provisions of this Commercial Shared-Loss Agreement shall be binding up on and
shall inure to the benefit of the parties hereto only; provided, however, that,
Receiver may assign or otherwise transfer this Commercial Shared-Loss Agreement
(in whole or in part) to the Federal Deposit Insurance Corporation in its
corporate capacity without the consent of Assuming
Bank. Notwithstanding anything to the contrary contained in this
Commercial Shared-Loss Agreement, except as is expressly permitted in this
Section 6.2, Assuming Bank may not assign or otherwise transfer this Commercial
Shared-Loss Agreement (in whole or in part) without the prior written consent of
the Receiver, which consent may be granted or withheld by the Receiver in its
sole discretion, and any attempted assignment or transfer in violation of this
provision shall be void ab
initio. For the avoidance of doubt, a merger or consolidation
of the Assuming Bank with and into another financial institution, the sale of
all or substantially all of the assets of the Assuming Bank to another financial
institution constitutes the transfer of this Commercial Shared-Loss Agreement
which requires the consent of the Receive; and for a period
of thirty-six (36) months after Bank Closing, a merger or
consolidation shall also include the sale by any individual shareholder, or
shareholders acting in concert, of more than 9% of the outstanding shares of the
Assuming Bank, or of its holding company, or of any subsidiary holding
Shared-Loss Assets, or the sale of shares by the Assuming Bank or its holding
company or any subsidiary holding Shared-Loss Assets, in a public or private
offering, that increases the number of shares outstanding by more than 9%,
constitutes the transfer of thisCommercial Shared-Loss Agreement
which requires the consent of the Receiver. However, no Loss shall be
recognized as a result of any accounting adjustments that are made due to any
such merger, consolidation or sale consented to by the FDIC. The
FDIC’s consent shall not be required if the aggregate outstanding principal
balance of Shared-Loss Assets is less than twenty percent (20%) of
the initial aggregate balance of Shared-Loss Assets.
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6.3 Governing
Law. This Commercial Shared-Loss Agreement shall be construed in
accordance with federal law, or, if there is no applicable federal law, the laws
of the State of New York, without regard to any rule of conflict of law that
would result in the application of the substantive law of any jurisdiction other
than the State of New York.
6.4 WAIVER OF
JURY TRIAL. EACH PARTY HERETO HEREBY IRREVOCABLY
AND UNCONDITIONALLY WAIVES ALL RIGHT TO TRIAL BY JURY IN OR TO HAVE A JURY
PARTICIPATE IN RESOLVING ANY DISPUTE, ACTION, PROCEEDING OR COUNTERCLAIM,
WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE, ARISING OUT OF OR RELATING TO
OR IN CONNECTION WITH THIS COMMERCIAL SHARED-LOSS AGREEMENT OR ANY OF THE
TRANSACTIONS CONTEMPLATED HEREBY.
6.5 Captions.
All captions and headings contained in this Commercial Shared-Loss Agreement are
for convenience of reference only and do not form a part of, and shall not
affect the meaning or interpretation of, this Commercial Shared-Loss
Agreement.
6.6 Entire
Agreement; Amendments. This Commercial Shared-Loss Agreement, along with
the Single Family Shared-Loss Agreement and the Purchase and Assumption
Agreement, including the Exhibits and any other documents delivered pursuant
hereto, embody the entire agreement of the parties with respect to the subject
matter hereof, and supersede all prior representations, warranties, offers,
acceptances, agreements and understandings, written or oral, relating to the
subject matter herein. This Commercial Shared-Loss Agreement may be amended or
modified or any provision thereof waived only by a written instrument signed by
both parties or their respective duly authorized agents.
6.7 Severability.
Whenever possible, each provision of this Commercial Shared-Loss Agreement shall
be interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Commercial Shared-Loss Agreement is held to be
prohibited by or invalid, illegal or unenforceable under applicable law, such
provision shall be construed and enforced as if it had been more narrowly drawn
so as not to be prohibited, invalid, illegal or unenforceable, and the validity,
legality and enforceability of the remainder of such provision and the remaining
provisions of this Commercial Shared-Loss Agreement shall not in any way be
affected or impaired thereby.
6.8 No Third
Party Beneficiary. This Commercial Shared-Loss
Agreement and the Exhibits hereto are for the sole and exclusive benefit of the
parties hereto and their respective permitted successors and permitted assigns
and there shall be no other third party beneficiaries, and nothing in Commercial
Shared-Loss Agreement or the Exhibits shall be construed to grant to any other
Person any right, remedy or claim under or in respect of this Commercial
Shared-Loss Agreement or any provision hereof.
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6.9 Consent.
Except as otherwise provided herein, when the consent of a party is required
herein, such consent shall not be unreasonably withheld or delayed.
6.10 Rights
Cumulative. Except as otherwise expressly provided herein, the rights of
each of the parties under this Commercial Shared-Loss Agreement are cumulative,
may be exercised as often as any party considers appropriate and are in addition
to each such party’s rights under the Purchase and Sale Agreement and any of the
related agreements or under law. Except as otherwise expressly provided herein,
any failure to exercise or any delay in exercising any of such rights, or any
partial or defective exercise of such rights, shall not operate as a waiver or
variation of that or any other such right.
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