EXHIBIT 2.3
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (this
"Agreement") made as of this 27th day of February,
1996, between Arrow Financial Corporation ("AFC"),
a New York business corporation having its
principal office at 000 Xxxx Xxxxxx, Xxxxx Xxxxx,
Xxx Xxxx, Arrow Vermont Corporation ("AVC"), a
Vermont business corporation having its principal
office at 00 Xxxx Xxxxxx, Xxxxxxx, Xxxxxxx, and
Green Mountain Bank ("GMB"), a Vermont-chartered
banking corporation with its principal offices at
00 Xxxx Xxxxxx, Xxxxxxx, Xxxxxxx (the foregoing
entities sometimes collectively referred to as the
"Seller"), and Vermont National Bank ("Buyer"), a
national banking association having its principal
office at 000 Xxxx Xxxxxx, Xxxxxxxxxxx, Xxxxxxx.
WHEREAS, AFC is a bank holding company which
owns all of the capital stock of AVC, which in turn
owns all of the capital stock of GMB;
WHEREAS, the Seller intends to organize a
trust subsidiary as a wholly owned direct or
indirect subsidiary of AFC in accordance with
Chapter 62 of Title 8 of the Vermont Statutes (the
"Trust Subsidiary"), and to sell, transfer and
convey substantially all of the trust business of
GMB as presently conducted thereby, including,
without limitation, substantially all of the
assets, rights, liabilities, interests,
appointments and responsibilities of GMB in its
fiduciary, custodial or agency capacity associated
therewith (the "Business"), to the Trust
Subsidiary, all as authorized and provided for in
said Chapter 62; and
WHEREAS, it is the parties' intention that the
Seller sell, transfer and convey the Business to
Buyer by means of a sale and transfer by the Seller
of all of the issued and outstanding capital stock
of the Trust Subsidiary to Buyer;
NOW, THEREFORE, in consideration for the
mutual covenants contained herein, and other good
and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the
parties agree as follows:
ARTICLE 1
ESTABLISHMENT OF TRUST SUBSIDIARY
1.01 Organization of Trust Subsidiary.
Promptly following the date of this
Agreement, the Seller shall take or cause to be
taken all necessary and appropriate actions to (i)
duly incorporate and organize the Trust Subsidiary
as a wholly owned direct or indirect subsidiary of
AFC in accordance with Chapter 62 of Title 8 of the
Vermont Statutes ("Chapter 62") and all other
applicable laws and regulations, (ii) cause the
directors and stockholder(s) of the Trust
Subsidiary to take all necessary and appropriate
corporate actions to approve and adopt this
Agreement and the transactions contemplated hereby
and (iii) cause the Trust Subsidiary to execute and
deliver an appropriate instrument of accession to
this Agreement, whereupon the Trust Subsidiary
shall become a party to and be bound by this
Agreement. The legal name of the Trust Subsidiary
shall be mutually agreed upon by the parties. On
and as of the date the Trust Subsidiary becomes a
party to this Agreement, the Seller will be deemed
to have represented and warranted, for all purposes
of this Agreement, to Buyer as follows:
(a) The Trust Subsidiary is a trust
company duly organized, validly existing and in
good standing under the laws of the jurisdiction of
its organization, all of the outstanding capital
stock of which is owned directly or indirectly by
AFC free and clear of any lien, charge or other
encumbrance. Since the date of its incorporation,
the Trust Subsidiary has not engaged in any
activities other than in connection with or as
contemplated by this Agreement.
(b) The Trust Subsidiary has the
corporate power and authority to enter into this
Agreement and to carry out its obligations
hereunder. The execution, delivery and performance
of this Agreement by the Trust Subsidiary and its
consummation of the transactions contemplated
hereby have been duly and validly authorized by all
necessary corporate action in respect thereof on
the part of the Trust Subsidiary. This Agreement
is a valid and binding obligation of the Trust
Subsidiary, enforceable in accordance with its
terms.
(c) The authorized capital stock of the
Trust Subsidiary consists solely of a specified
number of shares of common stock, with a specified
par value per share (which specific number of
shares and per share par value will be stated and
confirmed on the Closing Date in a certificate to
be executed and delivered by Seller), all of which
are duly issued and validly outstanding, fully paid
and nonassessable . The Trust Subsidiary is not
bound by any outstanding subscriptions, options,
warrants, calls commitments or agreements of any
character calling for the Trust Subsidiary to
issue, deliver or sell any equity security of the
Trust Subsidiary or any securities convertible
into, exchangeable for or representing the right to
subscribe for, purchase or otherwise receive any
such equity security or obligating the Trust
Subsidiary to grant, extend or enter into any such
subscriptions, options, warrants, calls,
commitments or agreements. There are no
outstanding contractual obligations of the Trust
Subsidiary to repurchase, redeem or otherwise
acquire any shares of its capital stock.
(d) Immediately prior to the Closing
(as defined in Section 1.02), the Trust Subsidiary
will have and own no assets other than the
Purchased Assets (as defined in Section 2.01), an
amount in cash or immediately available funds equal
to the Minimum Capitalization Amount (as defined in
Section 3.02) and such rights as are otherwise
possessed by the Trust Subsidiary as a result of
this Agreement, and will have and be subject to no
liabilities other than the Assumed Liabilities (as
defined in Section 2.03) and such liabilities and
obligations as are otherwise incurred by the Trust
Subsidiary as a result of this Agreement.
1.02 Transfer of the Business to Trust
Subsidiary.
Following the lawful incorporation and
organization of the Trust Subsidiary, as
contemplated by Section 1.01 above, and immediately
prior to the sale and transfer of all of the issued
and outstanding shares of the capital stock of the
Trust Subsidiary from Seller to Buyer as provided
for in Article 3 below (the completion of such sale
and transfer being referred to as the "Closing" and
the date on which the Closing occurs being referred
to as the "Closing Date"), the Seller shall take or
cause to be taken all necessary and appropriate
actions to sell, transfer and convey all of the
Business from GMB to the Trust Subsidiary in
accordance with all applicable requirements of
Chapter 62 and all other applicable laws and
regulations and all as further set forth in Article
2 of this Agreement (the completion of the transfer
of the Business from GMB to the Trust Subsidiary as
provided for in Article 2 of this Agreement being
referred to as the "Asset Closing"). The Asset
Closing shall be a condition to, and shall be
completed on the same day as and immediately prior
to, the Closing.
ARTICLE 2
TRANSFER OF THE BUSINESS FROM GMB TO TRUST
SUBSIDIARY
2.01 Purchase and Sale.
Subject to the terms, provisions and
conditions set forth herein, the Seller hereby
agrees to sell, assign, transfer and convey to the
Trust Subsidiary, and the Seller shall cause the
Trust Subsidiary to purchase, acquire and accept
from the Seller, the Business, including all of the
assets of every kind and description used by the
Seller in the Business, but excluding the Retained
Business Assets (as such term is defined in Section
2.02 below). The assets to be purchased hereunder
(the "Purchased Assets") shall include all assets
owned by GMB and held by it solely as a part of the
Business as of the date hereof and all assets
acquired by GMB in the ordinary course of the
Business prior to the Asset Closing, but excluding
assets disposed of in the ordinary course of the
Business prior to the Asset Closing or retained by
GMB pursuant to Section 2.02 below, and shall
specifically include, without limitation:
(a) Any and all fixtures, machinery,
installations, equipment, furniture, supplies and
other tangible personal property owned by GMB and
used solely in conjunction with the operations of
the Business and separable from the Seller's other
businesses, all as described on Schedule 2.01(a)
hereto (the "Personal Property");
(b) All of the Seller's title to,
interest in and rights under the leases of personal
property used solely in the Business and described
on Schedule 2.01(b) hereto (the "Personal Property
Leases");
(c) Except as otherwise set forth in
Section 2.02 hereof, all rights and interest of
GMB, including without limitation any rights for
which consents, filings or other actions may be
required, in and to its contracts with customers
relating to the Business, including without
limitation, any and all rights of every kind and
description in connection with any and all
fiduciary, custodial and agency contracts,
including appointments under xxxxx, trust
instruments or other agreements and agreements for
GMB to provide trust correspondent computer
processing services to other institutions, in all
cases entered into or accepted by GMB in a
fiduciary, custodial or agency capacity with such
customers ("Customers") in the ordinary course of
the Business, all as set forth on Schedule 2.01(c)
attached hereto (such contracts, xxxxx, instruments
and other agreements to be referred to collectively
hereafter as the "Trust Agreements");
(d) (i) Copies of the Seller's
accounting books, records, ledgers, client lists
and will files relating to the Business and copies
of all documents and records relating to the
Purchased Assets and the Business, in each case in
each such form in which the same currently is being
maintained by GMB, including where applicable in
the form of databases or other computer records,
and in each case in such other form or format as
may be reasonably requested by Buyer and that can
be accommodated without material incremental
expense to Seller, and (ii) originals of the Trust
Agreements and the Contracts (as such term is
defined in Section 2.01(i) below) (all such books,
records, files, data and documents included within
clauses (i) and (ii) hereof being referred to as
the "Business Documents");
(e) All rights of the Seller which by
their terms are transferable and which arise under
or pursuant to warranties, representations,
indemnifications, contribution agreements,
reimbursement agreements, or guarantees in favor of
the Seller made by or for the benefit of Customers,
predecessors in interest, suppliers, vendors, or
affiliates of any of the foregoing, and which
relate to the Purchased Assets or the Assumed
Liabilities (as such term is defined in Section
2.03 below) with respect to the period following
the Asset Closing, but excluding those rights which
constitute Retained Business Assets;
(f) All rights to insurance proceeds
which may become payable under insurance policies
held by the Seller covering any claims against the
Trust Subsidiary and/or Buyer for which the Trust
Subsidiary and/or Buyer is entitled to indemnity by
the Seller hereunder or covering any claims by
Buyer or the Trust Subsidiary relating to matters
occurring after the Asset Closing;
(g) All of GMB's interest in the funds,
cash, securities, instruments and other property of
any type or description held by GMB as agent,
custodian or fiduciary pursuant to the Trust
Agreements, together with records to support the
calculation of such amounts and other records
relating thereto, except the following: (i) cash
held in the Business which is subject to
escheatment as of the date on which the Asset
Closing is completed and (ii) cash covering
outstanding checks relating to the Business and on
accounts maintained in the name of Seller;
provided, however, that within six months after the
Closing, the Seller shall transfer to the Trust
Subsidiary any such cash covering checks which have
not been presented within six months of issuance;
(h) All of the Seller's title to,
interest in and rights under the computer software
and programs and other intellectual property, both
tangible and intangible, licensed to the Seller and
used solely in conjunction with the operation of
the Business, all as described on Schedule 2.01(h)
hereto (the "Software Contracts");
(i) All of the Seller's title to,
interest in and rights under the miscellaneous
contracts of the Seller relating solely to the
Business and listed on Schedule 2.01(i) hereto (the
"Miscellaneous Contracts" and together with the
Personal Property Leases and the Software
Contracts, the "Contracts"); and
(j) All prepaid Customer fees and
expenses allocable to the period from and after the
Asset Closing, all as described on Schedule 2.01(j)
hereto.
2.02 Retained Assets.
Notwithstanding any of the foregoing, the
Seller is not transferring to the Trust Subsidiary
and neither the Trust Subsidiary nor Buyer is
acquiring from Seller under this Agreement, and the
term "Purchased Assets" shall not include:
(a) any of the following assets related
to the Business (the "Retained Business Assets"):
(i) All Individual Retirement
Accounts and Xxxxx Accounts, as to which, as of the
Asset Closing, (1) GMB is serving either as trustee
or custodian, and (2) all of the funds associated
therewith are then invested in one or more
certificates of deposit or deposit accounts
maintained by GMB (collectively, the "Trusteed
Deposit Accounts"), as listed on Schedule
2.02(a)(i) hereto, together with all rights and
interest of GMB under the agreements or contracts
with Customers relating to such Trusteed Deposit
Accounts and all assets contained in such Trusteed
Deposit Accounts;
(ii) Any cash held by GMB as of the
Asset Closing, whether previously generated by or
used in connection with the Business, except for
cash covering outstanding checks as of the Asset
Closing as described in Section 2.01(g) (ii) above,
which shall be retained only to the extent and for
the time provided in Section 2.01(g) (ii);
(iii) Any accounts receivable
relating to the Business and allocable to the
period prior to the Asset Closing;
(iv) Any of the Seller's trade
names, or any stationery, office supplies, business
forms, manuals or similar property bearing the
Seller's trademarks, trade names, service marks,
logos or similar corporate identification, unless
such trademarks, trade names, service marks, logos
or similar corporate identification have been
redacted therefrom (there being no obligation on
the part of the Seller to effect any such
redaction);
(v) Any fixed assets used by the
Seller exclusively in the Business which are
damaged or inoperative and any right to any
proceeds of insurance received with respect to any
such damaged or inoperative assets;
(vi) Any income tax refunds or
claims therefor relating to the Business which the
Seller may be entitled to receive from any federal,
state, or local authorities;
(vii) Any assets of the Seller
not used solely in the Business;
(viii) Any insurance policies of
the Seller relating to or covering the Business and
rights to any proceeds thereunder, except as set
forth in Section 2.01(f);
(ix) Any rights of the Seller under
any of the Trust Agreements or Contracts or with
respect to any of the Purchased Assets to fees,
indemnification or reimbursements, or any other
claims or rights of the Seller thereunder or with
respect thereto, in each case relating to the
conduct of the Business prior to the Asset Closing;
(x) Any rights to any security
deposits or other amounts deposited by Seller with
any state or other jurisdiction or regulatory
authority in connection with the qualification,
certification, licensing or permitting of the
Seller in connection with the conduct of the
Business; and
(xi) Subject to Section 8.01(h)
below, all rights and interests of GMB in and to
any Trust Agreement that is expressly excluded from
GMB's transfer of the Business to the Trust
Subsidiary, and which is therefore excluded from
the Asset Closing, as a result of or pursuant to
any order, request or directive of the Vermont
Department of Banking, Insurance and Securities
(the "Vermont Department") or of any court or other
governmental agency or authority of competent
jurisdiction (all such Trust Agreements, if any,
being referred to in this Agreement as the
"Retained Trust Agreements").
(b) Any assets of GMB not related to or
used in connection with the Business (the
"Retained Nonbusiness Assets" and together with the
Related Business Assets, the "Retained Assets").
2.03 Assumed Liabilities.
At the Asset Closing, the Trust Subsidiary
shall assume and agree to pay, perform and
discharge those liabilities and obligations of GMB
which relate to the Business as set forth below
(the "Assumed Liabilities"), and from and after the
Asset Closing, the Trust Subsidiary and any
successor thereto shall pay, perform and discharge
the Assumed Liabilities as they become due. The
Trust Subsidiary's administration of the various
accounts assigned to it by the Seller hereunder
will be in accordance with the respective Trust
Agreements and applicable law pertaining to the
performance of such responsibilities in accordance
with sound fiduciary, custodial and agency
practices. The Assumed Liabilities shall consist
only of the following:
(a) All liabilities and obligations
under each of the Trust Agreements, in each case
arising after the Asset Closing;
(b) All other liabilities and
obligations relating to the Contracts and the
Purchased Assets and arising after the Asset
Closing or otherwise relating to or arising out of
the operation of the Business from and after the
Asset Closing, including liabilities and
obligations arising under applicable law and
regulation.
2.04 Retained Liabilities.
Notwithstanding anything to the contrary set
forth in this Agreement, the Trust Subsidiary will
not assume, pay or discharge, and Buyer will not
assume, pay or discharge, by virtue of the terms of
this Agreement or otherwise, any debts,
liabilities, obligations, contracts, loans,
commitments, or undertakings of the Seller, whether
fixed, liquidated, contingent or otherwise, and
whether related to the Business or otherwise,
except, with respect to the Trust Subsidiary, for
those Assumed Liabilities expressly described or
referred to in Section 2.03. All liabilities,
debts, obligations, contracts, loans, commitments
or undertakings of Seller not so assumed by the
Trust Subsidiary shall be retained by the Seller
and shall be hereinafter referred to as the
"Retained Liabilities" and shall include, without
limitation, the following:
(a) All liabilities of the Seller
arising solely out of or relating solely to the
Retained Assets at any time;
(b) All liabilities of Seller incurred
in connection with the Purchased Assets and
relating to the period prior to the Asset Closing;
(c) All liabilities of the Seller for
federal, state or foreign income, sales, use,
payroll, excise or franchise taxes relating to or
arising out of the operation of the Business for
the period prior to the Asset Closing;
(d) All liabilities of the Seller for
all environmental, ecological, accident, health or
other claims pertaining to or arising out of the
operation of the Business or the Purchased Assets
and relating to the period prior to the Asset
Closing;
(e) All liabilities of the Seller to all
of the Employees (as such term is defined in
Section 4.08 below), including the Transferred
Employees (as such term is defined in Section 7.04
below), arising at any time, including, without
limitation, any liabilities or indebtedness of the
Seller in respect of any wages, back pay or other
payroll-related items or taxes, any liabilities of
the Seller in connection with employee benefits or
arising under any Employee Contract or Employee
Plan (as such terms are defined in Section 4.08
below) or any liabilities of the Seller resulting
from any termination-related or discrimination
claims of any Employee whether or not arising under
any Employee Plan.
(f) All liabilities of the Seller
relating to the period prior to the Asset Closing
and arising out of or in connection with the
Seller's services, actions, omissions or
warranties, including, without limitation, any
violation, breach, or default by the Seller under
or in respect of any Trust Agreement or any
Contract;
(g) All liabilities (contingent or
otherwise) with respect to trust accounts which
have been terminated prior to the Asset Closing;
(h) All liabilities and obligations
arising under the Trusteed Deposit Accounts;
(i) All liabilities of the Seller
arising in connection with its business and
operations unrelated to the Business;
(j) Any liability or obligation incurred
by the Seller in connection with the negotiation,
execution or performance of this Agreement
including, without limitation, all legal,
accounting, brokers', finders' and other
professional fees and expenses;
(k) All liabilities and obligations
incurred in taking or failing to take the steps
necessary to accomplish the appointment of the
Trust Subsidiary as successor under the Trust
Agreements, including without limitation, in the
making or failing to make of any filings or notices
or in obtaining or failing to obtain any consents,
permits or approvals required for the completion of
the Asset Closing; and
(l) Any liability, obligation, penalty,
termination fee or other cost or expense arising
out of the assertion by any party to a Trust
Agreement that the transfer to the Trust Subsidiary
of the Seller's rights and interests thereunder
pursuant to the terms of this Agreement constitutes
a breach or default by the Seller under such Trust
Agreement.
2.05 Updated Schedules.
The Seller shall update all of the Schedules
referred to in this Article 2 and Section 4.04(c)
below and attached to this Agreement to the extent
necessary to reflect any changes in the information
disclosable therein occurring prior to the Asset
Closing or, with respect to Schedule 4.04(c), the
Closing as a result of (i) the conduct of the
Business by Seller as permitted to be conducted by
Seller under this Agreement, (ii) the retention by
Seller of any Retained Trust Agreements, (iii)
changes in the list of Defaulted Trust Agreements
(as such term is defined in Section 4.04(c) below)
as is set forth in Schedule 4.04(c) or (iv) any
other changes in any such Schedules as may be
agreed upon in writing by the parties hereto. The
Seller shall deliver to Buyer such updated
Schedules (the "Updated Schedules") on or prior to
the Asset Closing or, with respect to any update of
Schedule 4.04(c), the Closing, subject in all cases
to further non-material adjustments on or prior to
the fifth business day after the Closing Date (the
"Adjustment Date"), and any such Updated Schedule
as adjusted shall be deemed to be the definitive
Schedule with regard to the information contained
therein for all purposes of this Agreement,
including, without limitation, the specification of
the assets and accounts intended to be transferred
from the Seller to the Trust Subsidiary under the
terms of this Article 2. Seller's obligation to
prepare and deliver to Buyer the Updated Schedules,
and its preparation and delivery thereof to Buyer,
does not affect or otherwise cause a waiver of any
of the conditions to Buyer's obligations under this
Agreement, including without limitation the
conditions contained in Section 8.01(h) and 10.02
below.
2.06 Asset Closing; Consideration.
(a) The Asset Closing shall occur
immediately prior to the Closing on the Closing
Date.
(b) In consideration of the transfer of
the Business by the Seller to the Trust Subsidiary
hereunder, the Trust Subsidiary agrees to assume
the Assumed Liabilities.
2.07 Bank Sale Transactions.
(a) Nothing in this Agreement shall
preclude the Seller from negotiating and entering
into an agreement or agreements with one or more
parties unaffiliated with the Seller or the Buyer
(any such unaffiliated party, a "Counterparty")
involving (i) the sale by the Seller to the
Counterparty of any assets of AVC or GMB other than
the Purchased Assets or any Retained Trust
Agreements (including any sale to a Counterparty of
any of the Retained Business Assets other than
Retained Trust Agreements) and/or the assumption by
the Counterparty from the Seller of any liabilities
of AVC or GMB other than the Assumed Liabilities or
(ii) the sale to the Counterparty of all or
substantially all the stock of GMB or AVC or (iii)
a merger or consolidation of GMB or AVC with or
into the Counterparty or an affiliate thereof (any
such transaction, a "Bank Sale Transaction");
provided, however, that (x) the Seller shall not
enter into an agreement for any such Bank Sale
Transaction or consummate any such Bank Sale
Transaction if doing so would in any way adversely
affect the ability of the parties to this Agreement
to consummate the transactions provided for herein
under the terms and conditions provided for herein
in a timely manner, or would otherwise in any way
decrease the likelihood that the transactions
provided for herein will be completed in accordance
with the terms and conditions of this Agreement;
(y) on and after consummation of any such Bank Sale
Transaction, all the obligations, covenants,
agreements, representations, warranties and
indemnifications incurred or given by the Seller
and its affiliates in and under this Agreement
shall continue to be the obligations, covenants,
agreements, representations, warranties and
indemnifications of AFC and its continuing
subsidiaries and affiliates, regardless of whether
the Counterparty in such Bank Sale Transaction
succeeds, as a matter of law or contract, to any of
the foregoing upon consummation of such
transaction; and (z) on and after consummation of
any such Bank Sale Transaction, all the rights
obtained by the Buyer and its affiliates in and
under this Agreement as against the Seller and its
affiliates shall continue to be rights possessed by
the Buyer and its affiliates as against AFC and its
continuing subsidiaries and affiliates, regardless
of whether such rights also may then be asserted by
the Buyer and its affiliates, as a matter of law or
contract, against the Counterparty in such Bank
Sale Transaction. It is expressly understood and
agreed by the parties hereto that the Seller is
presently contemplating entering into a Bank Sale
Transaction on or about the date of this Agreement
involving certain of the Retained Assets and
Retained Liabilities (specifically including,
without limitation, the Trusteed Deposit Accounts),
and that the Seller may desire to consummate such
Bank Sale Transaction at or around the time of the
Closing under this Agreement, to the extent
provided in Section 3.03(b) below.
(b) Seller shall include in the
definitive agreement for any Bank Sale Transaction
(the "Bank Sale Agreement") a provision under which
each Counterparty thereto (A) agrees, from the
execution of such Bank Sale Agreement until the
date that is three years after the last principal
transaction provided for therein, not to use to its
own advantage, and to ensure that none of its
affiliates uses to its advantage, any non-public
information relating to Seller, specifically
including GMB, obtained by such Counterparty
directly or indirectly from Seller or its current
or former employees that does not reasonably relate
to the business or assets being acquired by such
Counterparty in the Bank Sale Transaction
("Counterparty Restricted Information"), whether
such Counterparty Restricted Information may have
been or may be obtained by the Counterparty, its
affiliates, representatives, or agents, or
employees of any of the foregoing (collectively,
the "Counterparty Group"), in the course of
negotiations or investigations leading to execution
or consummation of the Bank Sale Agreement or may
be obtained by any of the Counterparty Group after
such consummation from former employees of Seller,
which provisions shall specifically reference,
without limiting the generality of the foregoing,
that information related to the Business is
Counterparty Restricted Information, and shall
further specifically reference as a prohibited
usage of Counterparty Restricted Information
thereunder, any solicitation by such Counterparty
or its affiliates of any Business from the
Customers, to the extent that such Customers may
have been or may be specifically identified by the
Counterparty or its affiliates as a result of
information obtained by any one or more of the
Counterparty Group from Seller or its employees in
the course of negotiation or investigations leading
to execution or consummation of the Bank Sale
Agreement or after consummation thereof from former
employees of Seller, and (B) agrees to return to
Seller all such Counterparty Restricted Information
taking the form of documents, books, records or
tapes and to destroy any electronic records in its
possession containing such Counterparty Restricted
Information.
(c) Without limiting the foregoing, and
for a period of three years after the Closing Date
hereunder, Seller will not disclose or make
available to any Counterparty in any Bank Sale
Transaction (except for any required disclosure
under regulatory applications) any of the nonpublic
information directly or indirectly related to any
of the Business being acquired or assumed by Buyer
hereunder, except for any such information (non-customer
specific, in any event) which is also
directly related to the business being acquired by
the Counterparty or Counterparties under the Bank
Sale Agreement and is necessary to be disclosed to
the Counterparty or Counterparties thereunder,
provided that Seller will in no event disclose
during such period to any Counterparty in any Bank
Sale Transaction or any person proposed to be a
Counterparty in any such transaction the identity
of the Customers.
ARTICLE 3
PURCHASE AND SALE OF TRUST SUBSIDIARY STOCK
3.01 Purchase by Buyer.
Upon the terms and subject to the conditions
set forth in this Agreement, Buyer agrees to
purchase or cause an affiliate of Buyer to purchase
all of the shares of the capital stock of the Trust
Subsidiary issued and outstanding on the Closing
Date (the "Stock") from Seller, and Seller agrees
to sell or cause to be sold all of the Stock to
Buyer.
3.02 Purchase Price.
On the Closing Date, Buyer shall pay to AVC or
GMB, as AVC may designate, in cash, an amount equal
to Three Million Two Hundred Thirty Thousand and
00/100 Dollars ($3,230,000.00) plus the "Minimum
Capitalization Amount" (as defined below) (such
amount being referred to herein as the "Base
Purchase Price"). The total purchase price to be
paid by Buyer for its acquisition of the Stock
shall be subject to adjustment as provided for in
Section 3.05 below. The "Minimum Capitalization
Amount" is the minimum amount of capital, if any,
required to be maintained in the Trust Subsidiary
as of the Closing by any and all bank regulatory
authorities having jurisdiction over the Trust
Subsidiary and actually maintained therein at such
time in the form of liquid funds held in a separate
deposit account of a bank located in the United
States under the name and only the name of the
Trust Subsidiary or such other form or manner as
may be directed at such time by Buyer.
3.03 Closing Date.
(a) The purchase and sale of the Stock
hereunder shall occur at the offices of Xxxxxxxx &
Worcester LLP, Xxx Xxxx Xxxxxx Xxxxxx, Xxxxxx,
Xxxxxxxxxxxxx, or at such other place as shall be
mutually agreeable to the parties, on a date to be
mutually agreed upon by Buyer and AFC, which date
shall be within five (5) business days after the
day on which the last of the conditions precedent
set forth in Articles 8, 9 and 10 hereof has been
satisfied or properly waived (the "Satisfaction
Date"), subject to Section 3.03(b) below.
(b) If, as of the Satisfaction Date
under Section 3.03 (a) above, the Seller shall have
entered into but not consummated a definitive
agreement or agreements for one or more Bank Sale
Transactions pursuant to which all or substantially
all the capital stock of GMB or AFC or all or
substantially all the Retained Assets and Retained
Liabilities (excluding the building presently
serving as GMB's main office and any Retained Trust
Agreements) are to be acquired and/or assumed by a
Counterparty or pursuant to which GMB or AFC is to
merge with a Counterparty, and if, as of the
Satisfaction Date, it appears to the reasonable
satisfaction of Buyer that the Seller will be able
to consummate such Bank Sale Transaction within 30
days of such Satisfaction Date, then, at the
request of the Seller, the Closing Date hereunder
shall be postponed to a date not more than 30 days
after the Satisfaction Date, and in any case to a
date not later than the Termination Date (as such
term is defined in Section 11.01 (d) below) in
order that the Closing hereunder may occur at or
about the same time that such Bank Sale Transaction
is consummated.
(c) On the Closing Date, the following
actions shall be taken:
(i) Buyer shall pay the Base Purchase
Price to AVC or GMB, as AVC may designate, by wire
transfer of immediately available federal funds to
such bank account in the United States of America
as such payee shall designate at least two (2)
business days prior to the Closing Date;
(ii) Seller shall deliver or cause to be
delivered one or more certificates for the Stock to
Buyer or an affiliate of Buyer designated thereby,
duly endorsed in blank or with stock powers duly
endorsed in blank, together with such other
documents as Buyer may reasonably request to
evidence the transfer to Buyer or such affiliate of
good and valid title in and to the Stock, free and
clear of any lien, security interest, pledge,
charge, encumbrance, restriction, right, option to
purchase, call or commitment of any kind or nature;
(iii) Buyer shall reimburse the
Seller for all sales taxes, if any, payable by
Seller or the Trust Subsidiary with respect to any
of the Personal Property transferred by GMB to the
Trust Subsidiary as part of the Asset Closing, and
all other sales, transfer and other taxes, if any,
payable in connection with the Asset Closing shall
be borne by Seller;
(iv) Each party shall take such other
actions, and shall execute and deliver such other
instruments, certificates or other documents, as
shall be required under Articles 8, 9 and 10
hereof, including without limitation as shall be
necessary or appropriate to evidence the completion
of the Asset Closing;
(v) Seller shall deliver a calculation
of Annual Revenue (as such term is defined in
Section 3.05 below) as of the last day of the month
immediately preceding the month in which the
Closing occurs, which calculation shall be for the
parties general information only and shall not be
determinative in any way with respect to the
calculation to be undertaken in accordance with
Section 3.04; and
(vi) To the extent reasonably requested
by Buyer prior to the Closing Date, Seller shall
deliver or cause to be delivered the Business
Documents to such location(s) at which Buyer shall
conduct its Trust Services business on and after
the Closing Date.
3.04 Proration; Allocation.
(a) On or prior to the Asset Closing,
subject to further non-material adjustments on or
prior to the Adjustment Date, Seller shall deliver
to Buyer (i) a Schedule 3.04(a)(i) which shall
accurately reflect with respect to the Trust
Agreements (A) all fees and reimbursements for
expenses paid by Customers to the Seller prior to
the Asset Closing relating to services to be
rendered to such Customers under the Trust
Agreements ("Trust Services") following the Asset
Closing and (B) all fees and reimbursements for
expenses which relate to Trust Services rendered
prior to the Asset Closing for which payment is to
be received from Customers following the Asset
Closing and (ii) a Schedule 3.04(a)(ii) which shall
accurately reflect with respect to all other fees
and expenses relating to the Business (A) all fees,
disbursements and expenses paid to or by the Seller
prior to the Asset Closing relating to services
(including, without limitation, services provided
under any of the Contracts), other than Trust
Services, to be rendered to or by Seller relating
to the Business ("Business Services") following the
Asset Closing and (B) all fees, disbursements and
expenses which relate to Business Services rendered
by or to the Seller prior to the Asset Closing for
which payment is to be received or made following
the Asset Closing. All such fees, disbursements
and expenses for both Trust Services and Business
Services shall be prorated as of the Asset Closing
to allocate the same to the periods of service to
which they relate. Seller shall pay to Buyer an
amount equal to the total of all such fees,
disbursements and expenses (i) paid to the Seller
prior to the Asset Closing but allocable to Trust
Services or Business Services to be provided during
the period following the Asset Closing and (ii) to
be paid following the Asset Closing but allocable
to Business Services provided to Seller during the
period prior to the Asset Closing. Buyer shall pay
to Seller an amount equal to the total of all such
fees, disbursements and expenses (i) paid following
the Asset Closing but allocable to Trust Services
or Business Services provided by Seller during the
period prior to the Asset Closing and (ii) paid by
Seller prior to the Asset Closing but allocable to
Business Services to be provided to the Trust
Subsidiary during the period following the Asset
Closing. The payments of such amounts shall be
made in cash by cashier's check or wire transfer of
immediately available funds on the Adjustment Date.
A single net payment may be made by the Seller or
Buyer as appropriate at such time.
(b) To the extent any additional
adjustment or payment of the prorated amounts
contemplated by Section 3.04(a) above is required
after the Adjustment Date, the parties shall make
any such further adjustments promptly and in good
faith.
(c) The aggregate amount of (i) the
Assumed Liabilities plus (ii) the sum of (A) the
amount paid by Buyer on the Closing Date and (B)
the amount of the Supplemental Payment, if any,
paid by Buyer in accordance with Section 3.05(a)
below shall be allocated among the Purchased Assets
in accordance with a schedule to be mutually agreed
upon by Seller and Buyer and to be made a part of
this Agreement not less than ten (10) days
following the parties' final determination of the
amount of such Supplemental Payment, if any, in
accordance with Sections 3.05(a)-(c) below.
3.05 Supplemental Payment; Adjustment
Payments.
(a) As promptly as practicable following
the ninetieth day after the Closing Date or, if
such ninetieth day is not the last day of a
calendar month, the first month-end day following
such ninetieth day (such ninetieth or other month-end day being
referred to as the "Measurement
Date"), the Base Purchase Price may be increased in
accordance with this Section 3.05 by a supplemental
payment (the "Supplemental Payment"). The
Supplemental Payment shall equal $570,000 if the
Annual Revenue (as such term is defined below)
attributable to (i) all of the Trust Agreements
that have been effectively transferred and assigned
by Seller to the Trust Subsidiary as part of the
Asset Closing or have been otherwise effectively
transferred and assigned by Seller to the Trust
Subsidiary or Buyer as of the Measurement Date (and
any immediate successor agreements or arrangements
thereto) and (ii) any agreements or contracts that
would have constituted Trust Agreements if they had
been in effect between the Seller and the other
party thereto on the Closing Date and that have
been entered into by Buyer with any Prospective
Retail Trust Customer, as such term is defined
further below in this Section 3.05(a), or any
Prospective Computer Processing Customer, as such
term is defined further below in Section 3.05(e),
at any time after the Closing Date up to and
through the Measurement Date, and all of which are
in full force and effect as of the Measurement
Date, all determined as of the Measurement Date, is
equal to or greater than $1,600,000. Buyer shall
reduce the Supplemental Payment by an amount equal
to $2.50 for each $1.00 that such Annual Revenue is
less than $1,600,000; provided, however, that the
Supplemental Payment may not in any case be less
than $0; and provided further, however, that if and
to the extent that such Annual Revenue as of the
Measurement Date is less than $1,600,000 as a
result of either (i) Buyer's modification of the
fee structure for Trust Services as in effect for
GMB at the time of Closing or (ii) changes
implemented by Buyer to the structure of the trust
accounts included in the Purchased Assets, then the
Supplemental Payment shall be reduced by only $1.00
for each $1.00 by which such Annual Revenue is less
than $1,600,000 as a result of the foregoing. As
soon as reasonably practicable following the
Measurement Date, Buyer will deliver to Seller its
calculation of Annual Revenue as of the Measurement
Date and a copy of the Fee Projection Report (as
such term is defined below), together with copies
of any reports of new or closed accounts as
required by 12 C.F.R. Section 9.7 (a)(2) (exclusive of
any account activity not included as part of the
Business as acquired by Buyer) covering the period
beginning with the Closing Date and ending on the
Measurement Date, together with a schedule listing
any changes implemented by Buyer during such period
in the fee structure for Trust Services as compared
to the fee structure in effect at Closing
(collectively, the "Supplemental Payment
Documents"). The term "Annual Revenue" means, with
respect to any date, the sum of (i) annualized
gross trust correspondent computer processing fees
("Computer Processing Fees"), (ii) annualized
preparation fees for various trust related tax
services ("Tax Services Fees"), (iii) annualized
administrative fees for estate administration
("Administration Fees"), and (iv) the annualized
gross sum of all other fees received for all other
Trust Services ("Other Fees"), each of the
foregoing fees as determined in accordance with the
following sentence. For purposes of calculating
Annual Revenue as of any date: (i) Computer
Processing Fees shall equal the contractual gross
monthly fee assessed for the services covered
thereby for all customers receiving such services
on such date, as annualized on a prospective basis
commencing with the first day of the first calendar
month beginning after such date; (ii) Tax Services
Fees shall equal [$88,500] (which represents the
sum of such fees billed during the 1995 calendar
year); (iii) Administration Fees shall equal (X)
divided by (Y), where (X) equals the sum of (a) the
estimated amount of Administration Fees for those
estates under administration on such date,
determined in a manner consistent with existing GMB
revenue recognition practices, for the twelve full
calendar months commencing with the first day of
the first calendar month beginning after such date
(the "1-Year Projection") plus (b) the actual
Administration Fees received by GMB for the four
calendar years ended December 31, 1995, and where
(Y) equals five, provided that if such calculation
results in an amount that is either less than 50%
or greater than 150% of the 1-Year Projection, then
the amount for Administration Fees to be used in
calculating the Annual Revenue as of such date
shall be an amount that is mutually satisfactory to
the parties; and (iv) Other Fees shall equal (X)
minus (Y), where (X) equals the total gross income
projected for the twelve full calendar months
commencing with the first day of the first calendar
month beginning after such date, as reported on the
National Computer Services Series 11 Fee Projection
Report (the "Fee Projection Report") produced for
such period, and where (Y) equals the portion of
such total gross income included in such Fee
Projection Report attributable to any and all
accounts (the "Noticed Accounts") with respect to
which (i) if such date is prior to the Closing
Date, the Customer associated therewith has
expressed to any of the Seller, the Buyer, the
Vermont Department or any court or other
governmental agency or authority of competent
jurisdiction any opposition to or dissent against
the transfer of the Business from GMB to the Trust
Subsidiary or Seller's sale and transfer of the
Trust Subsidiary to the Buyer or otherwise notified
either Seller or Buyer of such Customer's intention
to close his or its account if the transactions
contemplated by this Agreement shall occur (which
expression of opposition or dissent or other such
notice, in the case of such expression or notice to
the Buyer, may be subject to reasonable
verification by Seller), and such opposition or
dissent or other such notice has not been expressly
withdrawn or retracted by the Customer prior to the
Closing Date or (ii) if such date is after the
Closing Date, either Seller or Buyer has received
notice (which, in the case of Buyer's receipt of
notice, may be subject to reasonable verification
by Seller), which has not been subsequently
withdrawn or rescinded, on or prior to such date
from the account holder thereof that such holder
intends to close the account within the ensuing
twelve-month period (such income amount determined
under the immediately preceding clause (Y) to be
referred to as the "Noticed Account Total" and the
income attributable to any such Noticed Account to
be a "Noticed Account Fee"). The term "Prospective
Retail Trust Customers" means those prospective
retail trust customers of GMB, if any, as
identified on Schedule 3.05(a) attached hereto or,
subject to Buyer's review and reasonable
verification, any amended or updated version of
said Schedule 3.05(a) as may be prepared by Seller
and delivered to Buyer on or prior to the fifteenth
day prior to the Closing Date.
(b) Within ten (10) business days after
Buyer's delivery of the Supplemental Payment
Documents to Seller, Seller may dispute all or any
portion of the Supplemental Payment Documents (to
the extent that any such disputed calculation would
affect the amount of any Supplemental Payment
payable by Buyer under this Section 3.05) by giving
written notice (a "Notice of Disagreement") to
Buyer setting forth in reasonable detail the basis
for any such dispute (any such dispute being
hereinafter referred to as a "Disagreement"). The
parties shall promptly commence good faith
negotiations with a view to resolving all such
Disagreements. If the Seller does not give a
Notice of Disagreement in accordance with the
provisions of the first sentence of this Section
3.05(b) within the ten (10) business day period set
forth therein, Seller shall be deemed to have
irrevocably accepted the Supplemental Payment
Documents in the form delivered to Seller by Buyer.
(c) If Seller shall deliver a Notice of
Disagreement and Buyer shall not dispute all or any
portion of such Notice of Disagreement by giving
written notice to Seller setting forth in
reasonable detail the basis for such dispute within
five (5) business days following the delivery of
such Notice of Disagreement, Buyer shall be deemed
to have irrevocably accepted the Supplemental
Payment Documents as modified in the manner
described in the Notice of Disagreement. If Buyer
disputes all or any portion of the Notice of
Disagreement within the five (5) business day
period described in the previous sentence, and
within five (5) business days following Buyer's
delivery to Seller of the notice of such dispute
Seller and Buyer do not resolve the Disagreement,
such Disagreement shall be referred to an
Independent Accounting Firm (as such term is
defined further below) mutually selected by Seller
and Buyer for a resolution of such Disagreement in
accordance with the terms of this Agreement. If
Seller and Buyer do not immediately agree on the
selection of an Independent Accounting Firm, their
respective independent public accountants shall
immediately select such firm. The determinations
of such firm with respect to any Disagreement shall
be final and binding upon the parties and the
amount so determined shall be used to complete the
final Supplemental Payment Documents. The
Independent Accounting Firm will render its
determination as soon as practicable after referral
of the Disagreement to such firm, and each of the
parties shall cooperate with such firm and provide
such firm with reasonable access to the books,
records, personnel and representatives of it and
its subsidiaries and such other information as such
firm may require in order to render its
determination. All of the fees and expenses of any
Independent Accounting Firm retained pursuant to
this Section 3.05(c) shall be paid by Seller, if
the Independent Accounting Firm agrees with the
position asserted by Buyer; shall be paid by Buyer,
if the Independent Accounting Firm agrees with the
position asserted by Seller; or shall be split
evenly by Seller and Buyer if the Independent
Accounting Firm does not agree with either Seller
or Buyer. For purposes of this Agreement, the term
"Independent Accounting Firm" means any "Big Six"
accounting firm or its successor (other than the
respective independent public accountants of each
of Seller and Buyer).
(d) Following Buyer's delivery and
Seller's acceptance of the final calculation of the
Annual Revenue as of the Measurement Date, in
accordance with the provisions of Sections 3.05(a)-3.05(c)
above, Buyer shall promptly pay to GMB or
AVC, as directed by AVC, the Supplemental Payment,
if any, required by Section 3.05(a) above, such
payment to be made in immediately available federal
funds to such bank account in the United States of
America as the payee shall designate.
(e) As soon as practicable following the
last day of each of the first four consecutive
three-month periods immediately following the
Measurement Date (each, individually, an
"Adjustment Period" and collectively, the
"Adjustment Periods"), Buyer shall remit to AVC or
the payee designated by AVC, in immediately
available federal funds to such bank account in the
United States of America as the payee shall
designate, the amount of any Adjustment Payment (as
defined below) due to Seller for such Adjustment
Period, calculated on the basis of any Computer
Processing Fees Credit and Noticed Account Fees
Credit allocable to such Adjustment Period,
determined as provided below.
(i) If during any such Adjustment
Period, any one or more of the Prospective Computer
Processing Customers, as defined below, shall have
entered into a trust computer processing contract
or agreement with Buyer that calls for services to
be rendered by Buyer for at least one (1) year,
Buyer shall extend to Seller for such Adjustment
Period a credit (a "Computer Processing Fees
Credit") equal to (X) multiplied by (Y), where (X)
equals the total amount of annualized trust
computer processing fees receivable by Buyer from
such Prospective Computer Processing Customer or
Customers for the first twelve-month period under
the particular contract or agreement entered into
with each, and where (Y) equals (a) 2.5, if such
contract or agreement calls for services to be
rendered by Buyer for a period of at least five (5)
years; (b) 2.0, if such contract or agreement calls
for services to be rendered by Buyer for a period
of at least four (4) but less than five (5) years;
(c) 1.5, if such contract or agreement calls for
services to be rendered by Buyer for at least three
(3) but less than four (4) years; and (d) 0.5, in
the case of any other such contract or agreement.
The "Prospective Computer Processing Customers"
shall be those prospective customers of GMB as
identified on Schedule 3.05 (e) attached hereto or,
subject to Buyer's review and reasonable
verification, any amended or updated version of
said Schedule 3.05(e) as may be prepared by Seller
and delivered to Buyer on or prior to the fifteenth
day prior to the Closing Date.
(ii) For each of the Adjustment
Periods, Buyer shall extend to Seller a credit (the
"Noticed Account Fees Credit"), determined as soon
as practicable after the last day of such
Adjustment Period, which shall equal, (a) for each
of the first three Adjustment Periods, 50% of the
total gross income received by Buyer during such
Adjustment Period from all Noticed Accounts, and
(b) for the last Adjustment Period, an amount equal
to the lesser of (X) or (Y), where (X) equals 50%
of the total gross income received by Buyer during
such Adjustment Period from all Noticed Accounts,
and where (Y) equals (1) minus (2), with (1)
equaling 250% of the total amount of Noticed
Account Fees included in the Noticed Account Total
under Section 3.05(a) above attributable to Noticed
Accounts that continue to be accounts of Buyer as
of the last day of such fourth Adjustment Period
and with (2) equaling the sum of all Noticed
Account Fees Credits extended by Buyer to Seller in
the first three Adjustment Periods.
Notwithstanding anything in this Agreement
that may be to the contrary, the "Adjustment
Payment" due from Buyer to Seller for any
Adjustment Period shall be the lesser of (X) or
(Y), where (X) equals the sum of any Computer
Processing Fees Credit and any Noticed Account Fee
Credit for such Adjustment Period, and where (Y)
equals $570,000 minus the sum of (a) the
Supplemental Payment and (b) all Adjustment
Payments for prior Adjustment Periods.
(f) As soon as practicable after the
last day of each month beginning after the Closing
Date and ending at least 15 days prior to the
Measurement Date, Buyer shall provide to Seller a
copy of the Fee Projection Report as of such month
end for the Trust Agreements transferred to and
still held by Buyer as of such month end, together
with a list of any and all accounts that become
Noticed Accounts during such month. During the
period extending from the Measurement Date until
the last day of the final Adjustment Period, but
only for so long during such period as the
obligation of Buyer to pay any Adjustment Payment
may continue under the terms of Section 3.05(e),
Buyer will notify Seller promptly if it enters into
any trust computer processing contract or agreement
with any Prospective Computer Processing Customer.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE SELLER
The Seller hereby represents and warrants to
Buyer as of the date of this Agreement and as of
the Closing Date as follows:
4.01 Corporate Organization; Powers and
Authority; Records.
(a) AFC is a business corporation, duly
organized, validly existing and in good standing
under the laws of the State of New York. AVC is a
business corporation, duly organized, validly
existing and in good standing under the laws of the
State of Vermont. Each of AFC and AVC is a bank
holding company, duly registered and in good
standing with the Board of Governors of the Federal
Reserve System (the "Federal Reserve Board") under
the Bank Holding Company Act of 1956, as amended.
GMB is a banking corporation, duly organized,
validly existing and in good standing under the
laws of the State of Vermont. GMB is an "insured
depository institution" as such term is defined in
Section 3(c) of the Federal Deposit Insurance Act,
as amended (the "FDIA"); provided, however, that if
GMB consummates one or more Bank Sale Transactions
prior to the Closing that involve the sale by GMB
to one or more third parties of all or
substantially all of the Nonbusiness Assets and the
assumption by one or more third parties from GMB of
all or substantially all of the Nonbusiness
Liabilities, GMB may cease to be an "insured
depository institution" under the FDIA or a banking
corporation under the laws of the State of Vermont,
but shall in all events remain possessed of all
required charters, authorities and licenses, state
and federal, required for the continuing operation
by it of the Business at all times prior to the
Closing. GMB has the corporate power and authority
to own or lease all of its properties, and each of
AFC, AVC and GMB has the corporate power and
authority to execute and deliver this Agreement and
to complete the transactions contemplated by this
Agreement and to carry on its business as presently
conducted.
(b) GMB is duly licensed or qualified to
do business in each jurisdiction in which the
nature of the business conducted by it or the
character or the location of the properties and
assets owned or leased by it makes such licensing
or qualification necessary, except where the
failure to be so licensed or qualified, either
individually or in the aggregate, would not have a
Material Adverse Effect on the Seller. As used in
this Agreement, the term "Material Adverse Effect"
when used for the Seller means any change or effect
that is or may reasonably be expected to be
materially adverse to the conduct, operations, or
result of operations of the Business or to the
value of the Purchased Assets or to the Seller's
ability to fulfill its obligations under this
Agreement, and when used for Buyer means any change
or effect that is or may reasonably be expected to
be materially adverse to Buyer's ability to fulfill
its obligations under this Agreement.
(c) The execution and delivery of this
Agreement and the consummation of the transactions
contemplated hereby have been duly and validly
approved by the Board of Directors of each of AFC,
AVC and the GMB and no other corporate proceedings
on the part of AFC, AVC or GMB are necessary to
approve this Agreement and to consummate the
transactions contemplated hereby. This Agreement
has been duly and validly executed and delivered by
AFC, AVC and GMB and constitutes a valid and
binding obligation of AFC, AVC and GMB, enforceable
against AFC, AVC and GMB in accordance with its
terms.
(d) With respect to account records
reflecting the Business and the Purchased Assets,
the books and records of GMB have been, and are
being, maintained in accordance with applicable
legal and accounting requirements, reflect only
actual transactions and reflect all of such assets,
liabilities and accruals and all of such items of
income and expense in accordance with generally
accepted accounting principles consistently
applied. All accounting ledgers and other books
and records of GMB relating to the Business and the
Purchased Assets are located at the principal
office of GMB in Rutland, Vermont or the principal
office of AFC in Glens Falls, New York, and have
been made available to Buyer, and are true,
complete and correct in all material respects, and
present fairly the financial condition, results of
operations and changes in financial position of the
Seller with respect to the Business and the
Purchased Assets as of the dates and for the
periods indicated therein.
4.02 No Violation.
(a) Neither the execution and delivery
of this Agreement by AFC, AVC or GMB, nor the
consummation by AFC, AVC or GMB of the transactions
contemplated hereby, nor compliance by AFC, AVC or
GMB with any of the terms or provisions hereof,
will (i) violate, conflict with or result in a
breach of any provision of the Charter, Articles of
Incorporation or Bylaws of AFC, AVC or GMB, or (ii)
assuming that the consents and approvals referred
to in Section 4.03 hereof are duly obtained, (x)
violate any statute, code, ordinance, rule,
regulation, judgment, order, writ, decree or
injunction applicable to AFC, AVC or GMB, or any of
its properties or assets, or (y) violate, conflict
with, result in a breach of any provisions of or
the loss of any benefit under, constitute a default
(or an event, which, with notice or lapse of time,
or both, would constitute a default) under, result
in the termination of or a right of termination or
cancellation under, accelerate the performance
required by, or result in the creation of any lien,
pledge, security interest, charge or other
encumbrance upon any of the respective properties
or assets of AFC, AVC or GMB under, any of the
terms, conditions or provisions of any note, bond,
mortgage, indenture, deed of trust, license, lease,
agreement or other instrument or obligation to
which AFC, AVC or GMB is a party, or by which they
or any of their respective properties or assets may
be bound or affected, except (in the case of clause
(y) above) for such violations, conflicts, breaches
or defaults which, either individually or in the
aggregate, would not have a Material Adverse Effect
on the Seller.
4.03 Consents and Approvals.
Except for (i) the filing of applications and
notices with, and the obtaining of required
consents and approvals of, as applicable, federal
and state regulatory authorities, including the
Vermont Department and perhaps, depending upon the
structure of Seller's ownership of the Trust
Subsidiary prior to the Closing, the Federal
Reserve Board, (ii) the filings, approvals and
notices required by Section 1476 of Chapter 62 and
(iii) the consents or approvals of, or prior
notices to, any nongovernmental third parties
required in connection with the Seller's
assignments of its rights and interests under the
Contracts, all of which required third-party
consents, approvals and notices are disclosed in
Schedule 4.03 hereto, none of AFC, AVC or GMB is
required to obtain the consent or approval of, or
give notice to, any third party in connection with
the execution and delivery by AFC, AVC and GMB of
this Agreement and the consummation of the
transactions contemplated hereby.
4.04 Title to Personal Property;
Encumbrances; and Leases.
(a) Except as set forth on Schedule 4.04
(a) hereto, GMB has good and marketable title to
all of the Personal Property and owns such property
free and clear of any and all encumbrances, liens,
mortgages, security interests or pledges, except
such encumbrances, liens, mortgages, security
interests and pledges that do not affect the value
of such property in a materially adverse manner and
will not interfere with the use of such property as
currently used or contemplated to be used by Seller
prior to the Asset Closing or the Trust
Subsidiary's conduct of the Business after the
Asset Closing.
(b) Except as may be set forth in
Schedule 4.04 (b) hereto, none of AFC, AVC or GMB
has received any notice of violation of any
applicable zoning or environmental regulation,
ordinance or other law, order, regulation or
requirement relating to the conduct of the Business
or otherwise affecting any of the Purchased Assets
and to the Seller's knowledge, there is no such
violation of a material nature.
(c) Each of the Trust Agreements that
takes the form of an agreement or contract and each
of the Contracts is valid and binding on the Seller
and, to the Seller's knowledge, valid and binding
on and enforceable against all other respective
parties thereto in accordance with their respective
terms (subject to bankruptcy, insolvency,
reorganization, moratorium and similar laws
affecting the rights and remedies of creditors
generally and general principles of equity). Each
of the Trust Agreements constituting or containing
a currently effective appointment under will or
other instrument is valid and lawful. Except as
may be set forth in Schedule 4.04 (c) hereto, GMB
has not received notice or otherwise become aware
of, or provided notice or made a claim with respect
to, any breach or default by any other party to any
of the Trust Agreements or Contracts (all Trust
Agreements with respect to which any other parties
are in breach or default being referred to in this
Agreement as the "Defaulted Trust Agreements").
There are not under any of the Contracts, any
existing breaches, defaults or events of default by
GMB, or events which with notice and/or lapse of
time would constitute a breach, default or event of
default by GMB thereunder. GMB enjoys quiet and
peaceful possession of all properties subject to a
Personal Property Lease.
(d) To the Seller's knowledge, all of
the Personal Property is in good maintenance,
repair, and operating condition, ordinary wear and
tear excepted, and is adequate for the purposes for
which it is now being or is anticipated to be used,
and is free from any material defects.
4.05 Absence of Certain Changes or
Events.
Except as may be set forth on Schedule 4.05
hereto:
(a) to the knowledge of the Seller, no
fact or condition exists which will, or could
reasonably be expected to, result in a Material
Adverse Effect on the Seller in the future;
(b) since January 1, 1992, GMB has
carried on the Business only in the ordinary course
and consistent with prior and prudent fiduciary and
business practice;
(c) the Seller has not entered into any
agreement, contract, commitment or transaction
relating to or affecting the Business or the
Purchased Assets, except for those in the ordinary
course of business (none of which, individually or
in the aggregate, has had, or could reasonably be
expected to have, a Material Adverse Effect on the
Seller);
(d) GMB has not suffered any strike,
work stoppage, slowdown, or other labor disturbance
affecting its conduct of the Business;
(e) since September 30, 1995, there has
not been any change in any of the accounting
methods or practices or the policies, procedures or
practices of the Seller with respect to or
otherwise affecting the Business or any change in
the value at which Purchased Assets are carried on
the consolidated or consolidating balance sheets of
the Seller other than changes that are reflected in
their respective profit and loss statements;
(f) since September 30, 1995, there has
not been any notice or indication of intention
from any person or entity to terminate any material
Contract with GMB affecting the Business or any
notice or indication of intention from any
Customer(s) accounting for more than ten percent
(10%) of the Business individually or in the
aggregate or third party vendor of GMB to cease
doing business with, materially change the price or
other terms on which business is transacted with or
materially reduce the business transacted with GMB,
to the extent any such third party action would
relate to or otherwise affect the Business; and
(g) all suspense accounts of GMB
maintained in connection with the Business have
been reconciled monthly, and no differences over
$500 exist.
4.06 Legal Proceedings.
Except as set forth on Schedule 4.06 hereto,
the Seller is not a party to any, and there are no
pending or, to the Seller's knowledge, threatened,
legal, administrative, arbitral or other
proceedings, claims, actions or governmental or
regulatory investigations of any nature against or
affecting AVC or GMB or challenging the validity or
propriety of the transactions contemplated by this
Agreement, and there is no reasonable basis for any
such proceeding, claim, action or governmental or
regulatory investigation. There is no injunction,
order, judgment, decree, or regulatory restriction
imposed upon the Seller or the assets of the Seller
which, either individually or in the aggregate, has
had, or could reasonably be expected to have, a
Material Adverse Effect on the Seller. To the
knowledge of the Seller, there are no facts,
circumstances or conditions affecting the Business
which would indicate or suggest the possibility of
any unrecognized future loss caused by defalcation,
embezzlement or other employee malfeasance or by
payments made or accepted in violation of any law
or regulation.
4.07 Taxes and Tax Returns.
Each of AFC, AVC and GMB has duly filed in
correct form all federal, state, county and local
information returns and tax returns required to be
filed by it on or prior to the date hereof (all
such returns being accurate and complete) and has
duly paid or made provisions for the payment of all
Taxes (as hereafter defined) and other governmental
charges which have been incurred or are due or
claimed to be due from it by federal, state, county
or local taxing authorities on or prior to the date
hereof (including without limitation, if and to the
extent applicable, those due in respect of its
properties, income, business, capital stock,
deposits, franchises, licenses, sales and payrolls,
and any business profits, business enterprise or
other tax), other than Taxes or other charges that
are not yet delinquent or are being contested in
good faith and have not been finally determined or
that are not, individually or in the aggregate,
material in amount.
As used in this Agreement, the term "Taxes"
means all federal, state, county, local and foreign
income, excise, gross receipts, ad valorem,
profits, gains, property, sales, transfer, use,
payroll, employment, severance, withholding,
duties, intangibles, franchise and other taxes,
charges, levies or like assessments, together with
all penalties and additions to tax and interest
thereon.
4.08 Officers and Employees.
Schedule 4.08 hereto sets forth (i) a true,
complete and correct list of the name and address
of each and every officer and employee currently
employed by GMB in connection with the Business
(the "Employees"), the position of each such
Employee, and the current salary or wage of each
such Employee, (ii) a list of all individualized
employment or severance agreements, contracts or
arrangements covering any such Employee (the
"Employee Contracts"), and (iii) a list and brief
description of each pension, retirement, profit
sharing, bonus, thrift, stock option, restricted
stock, deferred compensation, severance, collective
bargaining or other plan, agreement, trust, fund,
policy or arrangement that is maintained or
contributed to, or within the past three years has
been maintained or contributed to, by the Seller
that covers or affects any two or more Employees
(the "Employee Plans").
4.09 Other Statements and Reports.
AVC and GMB have timely filed all material
reports, registrations and statements, together
with any amendments required to be made with
respect thereto, that they were required to file
since January 1, 1995 with (i) the Board of
Governors of the Federal Reserve System (the
"Federal Reserve Board"), (ii) the FDIC, (iii) the
Vermont Department of Banking, Insurance and
Securities and any other state banking commissions
or any other state regulatory authority (each a
"State Regulator") and (iv) any self-regulatory
organization or other regulatory agency and all
other material reports and statements required to
be filed by them since January 1, 1995, including
without limitation, any report or statement
required to be filed pursuant to the laws, rules or
regulations of the United States, the Federal
Reserve Board, the FDIC, any State Regulator or any
self-regulatory organization, and have paid all
fees and assessments due and payable in connection
therewith. Except as set forth on Schedule 4.09
hereto, there is no material unresolved violation,
criticism or exception pertaining in any way to the
Business or any of the Purchased Assets which has
been previously cited by any regulatory agency in
any report or statement relating to any examination
of AFC, AVC or GMB.
4.10 Agreements with Regulatory
Agencies.
None of AFC, AVC or GMB is now subject to any
cease-and-desist or other order issued by, or is
now a party to any written agreement, consent
agreement or memorandum of understanding with, or
is now a party to any commitment letter or similar
understanding to, nor now subject to any order or
directive by, nor now a recipient of any
extraordinary supervisory letter from, nor has it
adopted any board resolution that is currently in
effect at the request of, any regulatory agency
that restricts the conduct of the Business or that
in any manner relates to the Business or the
management thereof by AFC, AVC or GMB (any of the
foregoing, a "Seller Regulatory Agreement"), nor
has any of AFC, AVC or GMB been advised by any
regulatory agency that it is considering issuing or
requesting any Seller Regulatory Agreement.
4.11 Environmental Matters.
Except as set forth on Schedule 4.11 hereto:
(a) To the knowledge of the Seller, any
real property held by GMB in a fiduciary capacity
(a "Trust Property") is, and has been, in material
compliance with all applicable environmental laws
and with all rules, regulations, standards and
requirements of the United States Environmental
Protection Agency (the "EPA") and of state and
local agencies with jurisdiction over pollution or
protection of the environment.
(b) To the knowledge of the Seller,
there is no suit, claim, action or proceeding
pending or threatened, before any governmental
entity or other forum in which the Seller has been
or, with respect to threatened proceedings, may be,
named as a defendant (i) for alleged noncompliance
(including by any predecessor), with any
environmental law, rule, regulation, standard or
requirement or (ii) relating to the release into or
presence in the Environment (as hereinafter
defined) of any Hazardous Materials (as hereinafter
defined) or Oil (as hereinafter defined) occurring
at or on, or otherwise affecting, any Trust
Property.
(c) To the knowledge of the Seller,
there are no facts or circumstances which would
provide a reasonable basis for any suit, claim,
action or proceeding as described in paragraph (b)
of this Section 4.11.
(d) To the knowledge of the Seller,
during the period of GMB's ownership or operation
of any Trust Property, there has been no release of
Hazardous Material or Oil in, on, under or
affecting such property. To the knowledge of the
Seller, prior to the period of GMB's ownership or
operation of any Trust Property, there was no
release of Hazardous Material or Oil in, on, under
or affecting such property. To the knowledge of
the Seller, without any independent inquiry or
examination, both during and prior to the period of
GMB's ownership or operation of any Trust Property,
there was not nor has there been any presence of
Hazardous Material or Oil discovered in, on, under
or affecting such property.
(e) The following definitions apply for
purposes of this Section 4.11: (i) "Hazardous
Material" means any pollutant, contaminant, or
hazardous substance or hazardous material as
defined in or pursuant to the Comprehensive
Environmental Response, Compensation, and Liability
Act, the Resource Conservation and Recovery Act of
1976, Title 10, Chapter 159, Section 6602 of the
Vermont Statutes or any other federal, state, or
local environmental law, regulation, or
requirement, all as may be amended from time to
time; (ii) "Oil" means any insoluble or partially
soluble oil of any kind or origin or in any form,
as defined in or pursuant to Title 10, Chapter 59,
Section 1922 of the Vermont Statutes or any other
federal, state, or local environmental law,
regulation, or requirement, all as may be amended
from time to time; and (iii) "Environment" means
any soil, surface waters, groundwaters, stream
sediments, surface or subsurface strata, and
ambient air, and any other environmental medium.
4.12 Insurance.
All of the policies relating to insurance
maintained by the Seller with respect to the
Business and the Purchased Assets (or any
comparable policies entered into as a replacement
therefor) are in full force and effect and the
Seller has not received any notice of cancellation
with respect thereto.
4.13 Transactions with Certain Persons.
No Customer who is an officer or director of
AFC, AVC or GMB or greater-than-5% stockholder of
AFC or an affiliate (as defined in Rule 144(a)(1)
of the Securities Act) of any such officer,
director or stockholder (any such person, an
"Interested Person"), has entered into any Trust
Agreement or maintains any Customer account or
relationship with or receives any trust or
fiduciary services from GMB other than Trust
Agreements, accounts or services entered into,
maintained or provided in the ordinary course of
business on terms substantially the same as those
prevailing at the time for comparable transactions
with other, unaffiliated persons, and which did not
and do not involve any unusual risk or other
features unfavorable to GMB. Schedule 4.13 hereto
contains a full description of all outstanding
Trust Agreements with Interested Persons.
4.14 Trust Agreements.
(a) Schedule 2.01(c) attached hereto
sets forth as of the date hereof, and shall be
amended as necessary in accordance with Section
2.05 above to set forth as of the Asset Closing,
(i) a complete and correct list of all the Trust
Agreements, (ii) information as to the capacities
of GMB under each such Trust Agreement, and (iii)
current annual fees, fee schedules and fee
arrangements with Customers and arrangements
regarding payment of expenses by Customers. Except
as set forth on Schedule 2.01(c), to the Seller's
knowledge, GMB has been acting as the validly-appointed
fiduciary, custodian or agent under each
Trust Agreement for all periods during which, based
on a reasonable reading of such Trust Agreement, it
should have been acting as a validly-appointed
fiduciary, custodian or agent. The Seller believes
that each Trust Agreement is in full force and
effect on the date hereof. There are no material
oral modifications in effect with respect to any of
the Trust Agreements.
(b) GMB is not in breach or non-compliance, nor, to
the knowledge of Seller, is
GMB considered to be in breach or non-compliance by
the other party thereto, of any term of any Trust
Agreement, except in any such case for any breaches
that singly or in the aggregate would not have a
Material Adverse Effect on the Seller.
(c) Without limiting the foregoing, to
the Seller's knowledge, GMB has (i) complied with
all applicable laws and regulations in the conduct
of the Business, including, without limitation, all
laws concerning tax withholding, and has filed all
necessary returns, reports or schedules in
connection with any such withholding as required
under the Trust Agreements; (ii) prepared and filed
all income tax returns required to be prepared or
filed by it as grantor trustee or otherwise; (iii)
kept all necessary records as required by the terms
of the Trust Agreements; (iv) except for the
escheat obligations of GMB which shall have been
fulfilled as of the Asset Closing, fulfilled all of
its payment and escheat obligations; (v) paid all
liabilities required to be paid by it under the
Trust Agreements; (vi) not made any overpayments or
over-advances under the Trust Agreements; (vii) not
waived, amended or modified any provision of any
Trust Agreement except in accordance with the
provisions of such Trust Agreement and as shown in
the records maintained by the Seller that are part
of the Business Documents; (viii) no current
disputes with co-agents or others as to amounts
payable by or to any such person; and (ix) to the
extent required by law or by the applicable Trust
Agreements, taken all action to maintain for the
benefit of the holders or other beneficiaries or
obligees under the Trust Agreements all interests
in collateral granted or pledged to secure
obligations thereunder, including, without
limitation, the making of governmental or other
filings to effect, perfect or continue such
interests in such collateral, except to the extent
that GMB's failure to comply with or perform any of
the foregoing clauses (i)-(ix) would not have a
Material Adverse Effect on the Seller.
(d) As of the Asset Closing, all
requirements and conditions to the succession of
the Trust Subsidiary as successor to GMB under each
of the Trust Agreements, other than any Retained
Trust Agreements, shall have been fulfilled, and no
consents of third parties to such succession that
have not been obtained shall be required.
4.15 Disclosure.
All material facts relating to the business,
operations, properties, assets, liabilities,
results of operations and financial condition of
GMB affecting the Business have been disclosed to
Buyer in this Agreement and the Schedules furnished
hereto. No representation or warranty contained in
this Agreement, and no statement contained in any
certificate, list or other writing furnished to
Buyer pursuant to the provisions hereof, to the
knowledge of the Seller, contains any untrue
statement of a material fact or omits to state a
material fact necessary in order to make the
statements herein or therein, in light of the
circumstances in which they are made, not
misleading. No information material to the
Agreement and which is necessary to make the
representations and warranties contained herein not
misleading, to the knowledge of the Seller, has
been withheld from, or has not been delivered in
writing to, Buyer. For purposes of this Agreement,
"to the knowledge of the Seller" means any fact,
condition or circumstance actually known by any
senior officer of the Seller engaged in the
Business, including any vice president or above in
the trust department of GMB and any other senior
officer of the Seller, including any senior vice
president or above, and any fact, condition or
circumstance that should have been known by any
such senior officer in the reasonable exercise of
such officer's duties in accordance with prevailing
banking and trust practices and procedures.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer hereby represents and warrants to each
of AFC, AVC and GMB as follows:
5.01 Corporate Organization, Powers and
Authority.
(a) Buyer is a national banking
association, duly organized, validly existing and
in good standing under the laws of the United
States of America. Buyer is an "insured depository
institution" as such term is defined in Section
3(c) of the FDIA. Buyer has the corporate power
and authority to own or lease its properties, to
execute and deliver this Agreement and to complete
the transactions contemplated by this Agreement and
carry on its business as presently conducted.
(b) Buyer is duly licensed or qualified
to do business in each jurisdiction in which the
nature of the business conducted by it or the
character or the location of the properties and
assets owned or leased by it makes such licensing
or qualification necessary, except where the
failure to be so licensed or qualified, either
individually or in the aggregate, would not have a
Material Adverse Effect on Buyer.
(c) The execution and delivery of this
Agreement and the consummation of the transactions
contemplated hereby have been duly and validly
approved by the Board of Directors of Buyer. No
other corporate proceedings on the part of Buyer
are necessary to approve this Agreement and to
consummate the transactions contemplated hereby.
This Agreement has been duly and validly executed
and delivered by Buyer and constitutes a valid and
binding obligation of Buyer, enforceable against
Buyer in accordance with its terms.
5.02 No Violation.
(a) Neither the execution and delivery
of this Agreement by Buyer, nor the consummation by
Buyer of the transaction contemplated hereby, nor
compliance by Buyer with any of the terms or
provisions hereof, will (i) violate, conflict with
or result in a breach of any provision of the
Articles of Association or Bylaws of Buyer, or (ii)
assuming that the consents and approvals referred
to in Section 5.03 hereof are duly obtained, (x)
violate any statute, code, ordinance, rule,
regulation, judgment, order, writ, decree or
injunction applicable to Buyer, or any of its
properties or assets, or (y) violate, conflict
with, result in a breach of any provisions of or
the loss of any benefit under, constitute a default
(or an event, which, with notice or lapse of time,
or both, would constitute a default) under, result
in the termination of or a right of termination or
cancellation under, accelerate the performance
required by, or result in the creation of any lien,
pledge, security interest, charge or other
encumbrance upon any of the respective properties
or assets of Buyer under, any of the terms,
conditions or provisions of any note, bond,
mortgage, indenture, deed of trust, license, lease,
agreement or other instrument or obligation to
which Buyer is a party, or by which they or any of
their respective properties or assets may be bound
or affected, except (in the case of clause (y)
above) for such violations, conflicts, breaches or
defaults which, either individually or in the
aggregate, would not have a Material Adverse Effect
on Buyer.
5.03 Consents and Approvals.
Except for the filing of applications and
notices with, and the required consents and
approvals of, as applicable, federal and state bank
regulatory authorities, including the Vermont
Department and perhaps, depending upon the
structure of the ownership of the Trust Subsidiary
by Buyer's parent holding company, Vermont
Financial Services Corporation ("VFSC"), following
the Closing, the Federal Reserve Board, neither
Buyer nor any of its affiliates is required to
obtain the consent or approval of, or give notice
to, any third party in connection with the
execution and delivery by Buyer of this Agreement
and the consummation of the transactions
contemplated hereby.
5.04 Absence of Certain Changes or
Events.
To the knowledge of Buyer, no fact or
condition exists which will, or could reasonably be
expected to, result in a Material Adverse Effect on
Buyer in the future.
5.05 Legal Proceedings.
Buyer is not a party to any, and there are no
pending or, to Buyer's knowledge, threatened,
legal, administrative, arbitral or other
proceedings, claims, actions or governmental or
regulatory investigations of any nature against or
affecting Buyer or challenging the validity or
propriety of the transactions contemplated by this
Agreement, and there is no reasonable basis for any
other proceeding, claim, action or governmental or
regulatory investigation against Buyer. There is no
injunction, order, judgment, decree, or regulatory
restriction imposed upon Buyer or the assets of
Buyer which, either individually or in the
aggregate, has had, or could reasonably be expected
to have, a Material Adverse Effect on Buyer.
5.06 Agreements with Regulatory
Agencies.
Buyer is not subject to any cease-and-desist
or other order issued by, is not a party to any
written agreement, consent agreement or memorandum
of understanding with, is not a party to any
commitment letter or similar understanding to, is
not subject to any order or directive by, is not a
recipient of any extraordinary supervisory letter
from, and is not subject to any board resolution
adopted at the request of, any regulatory agency
that restricts the conduct of its business or that
in any manner relates to its management or its
business (any of the foregoing, a "Buyer Regulatory
Agreement"), nor has Buyer been advised by any
regulatory agency that it is considering issuing or
requesting any Buyer Regulatory Agreement.
5.07 Disclosure.
All material facts relating to the financial
condition of Buyer and its ability to consummate
the transaction provided for herein have been
disclosed to the Seller. No representation or
warranty contained in this Agreement, and no
statement contained in any certificate, list or
other writing furnished to AFC, AVC or GMB pursuant
to the provisions hereof, to the knowledge of
Buyer, contains any untrue statement of a material
fact or omits to state a material fact necessary in
order to make the statements herein or therein, in
light of the circumstances in which they are made,
not misleading. No information material to the
Agreement and which is necessary to make the
representations and warranties contained herein not
misleading, to the knowledge of Buyer, has been
withheld from, or has not been delivered in writing
to, the Seller. For purposes of this Agreement,
"to the knowledge of the Buyer" means any fact,
condition or circumstance actually known by any
senior officer of Buyer, including any vice
president or above, and any fact, condition or
circumstance that should have been known by any
such senior officer in the reasonable exercise of
such officer's duties in accordance with prevailing
banking practices and procedures.
ARTICLE 6
CONDUCT OF BUSINESS PENDING THE CLOSING
During the period from the date of this
Agreement and continuing until the Closing, and
except as expressly contemplated or permitted by
this Agreement or otherwise consented to in writing
by the party hereto whom such provision is intended
to benefit:
6.01 Conduct of the Business.
(a) The Seller (which reference, for
purposes of this Article 6, includes the Trust
Subsidiary from and after the time it is organized
and becomes a party to this Agreement) will carry
on the Business diligently and substantially in the
same manner as heretofore, and the Seller will not,
with regard to the Business, engage in any one or
more activities or transactions which shall be
outside of the usual, regular and ordinary course
of the Business as conducted as of the date hereof
except for activities or transactions expressly
contemplated by this Agreement, including any Bank
Sale Transaction as described under Section 2.07
above; and
(b) The Seller will use its best efforts
to preserve the value of the Business. The Seller
further agrees to use its best efforts to preserve
for Buyer the goodwill of the Customers and others
having relations with GMB through the conduct of
the Business, and to cooperate with and assist
Buyer in assuring the orderly transition of such
business, as will be conducted through the Trust
Subsidiary, from GMB to Buyer. Nothing in this
paragraph shall be construed as requiring Seller to
engage in any activities or efforts outside of the
ordinary course of business as presently conducted,
except as otherwise expressly provided for in this
Agreement. Without limiting the generality of the
foregoing, and except as set forth on Schedule 6.01
hereto or as otherwise expressly provided for by
this Agreement or as consented to in writing by
Buyer, the Seller shall not:
(i) amend, revise or otherwise
change the current fee schedules and arrangements
with Customers as such are disclosed in Schedule
2.01(c) of this Agreement;
(ii) enter into any new line of
business or offer any new product in connection
with its conduct of the Business;
(iii) change its methods,
policies or procedures of accounting for or
relating to or including the Business in effect at
January 1, 1995, except as required by changes in
generally accepted accounting procedures;
(iv) except as required by
applicable law or under an existing Employee
Contract or Employee Plan , (a) increase in any
manner the compensation or fringe benefits of any
Transferred Employee or pay any special benefit to
such person, other than in the ordinary course of
business in normal amounts at normal times, or (b)
enter into, modify or renew any Employee Contract
with any Transferred Employee, or establish, adopt,
enter into or amend any Employee Plan covering or
providing for any benefit to any Transferred
Employee;
(v) sell, lease, pledge, encumber,
assign or otherwise dispose of any material
Purchased Asset, Personal Property, Contract or
Trust Agreement (other than any Retained Trust
Agreement) or take any action which would have a
material adverse effect on the value of any of the
foregoing;
(vi) with respect to the Business or
any of the Purchased Assets, incur any debt,
liability or obligation (whether absolute or
contingent, whether primary or secondary or whether
directly by way of guaranty) or make any loan or
advance, other than in any case in the ordinary
course of business consistent with past practice;
(vii) undertake, enter into or
renew, amend or terminate, or give notice of a
proposed renewal, amendment or termination of any
commitment with respect to, (a) any Contract, Trust
Agreement (other than any Retained Trust Agreement)
or any of the Purchased Assets other than in the
ordinary course of business consistent with past
practice or (b) any capital improvement related to
the Business or any Purchased Asset, except as
provided in the 1996 capital budget as previously
disclosed to Buyer;
(viii) commit any act or omission
which constitutes a material breach or default by
the Seller under any Seller Regulatory Agreement,
Trust Agreement (other than any Retained Trust
Agreement) or Contract;
(ix) since September 30, 1995,
change the procedures or practices relating to the
Business other than as required by law;
(x) establish any new trust account
other than pursuant to GMB's policies and
procedures in effect on June 30, 1995, as
previously disclosed to Buyer, and in accordance
with customary terms, conditions and standards and
applicable law and consistent with prudent
fiduciary and business practices;
(xi) waive any material right,
whether in equity or at law, that it has with
respect to any Trust Agreement or Contract, except
in the ordinary course of business consistent with
prudent fiduciary and business practices;
(xii) authorize, recommend,
propose or announce an intention to authorize,
recommend or propose, or enter into an agreement
with respect to, (a) any merger, consolidation,
purchase and assumption transaction or business
combination (other than as contemplated by this
Agreement), (b) any acquisition of a material
amount of assets or securities or assumption of
liabilities or (c) any disposition of a material
amount of assets or securities, which with respect
to any of the foregoing would in any way relate to
or affect the Business or any of the Purchased
Assets or Assumed Liabilities, it being expressly
agreed by the parties hereto that any agreement
entered into by the Seller for or relating to a
Bank Sale Transaction as described in Section 2.07
above shall not be prohibited by this Section 6.01
(b) (xi); or
(xiii) take any action that is
intended or may reasonably be expected to result in
any of its representations and warranties set forth
in this Agreement being or becoming untrue.
6.02 No Solicitation.
The Seller will immediately cease and cause to
be terminated any activities, discussions or
negotiations conducted with any parties other than
Buyer with respect to the sale or transfer of all
or any portion of the Business to be sold and
transferred to the Buyer pursuant to this
Agreement, and will not solicit, initiate,
encourage, respond to or participate in any
discussions regarding any inquiry or proposal from
any third party relating to any such sale or
transfer while this Agreement is in effect.
6.03 Access to Information.
Upon reasonable notice and subject to
applicable laws relating to the provision of
information, the Seller shall afford the officers,
employees, accountants, counsel and other
representatives of Buyer, access, during normal
business hours during the period prior to the
Closing, to all of the Seller's properties, books,
contracts, commitments and records relating to the
Purchased Assets and Assumed Liabilities subject to
this Agreement and, during such period, the Seller
shall make available to Buyer (i) copies of
applicable periodic reports to senior management of
GMB involving the Business and all materials
furnished to the Board of Directors of GMB relating
to the conduct of the Business generally, and (ii)
all other information concerning the Seller's
business, properties, assets and personnel
reasonably relevant to the Business or the
completion of the transactions provided for in this
Agreement as Buyer may reasonably request. The
Seller shall not be required to provide such access
or to disclose such information where such access
or disclosure would contravene any law, rule,
regulation, order, judgment, decree or fiduciary
duty or any binding agreement entered into prior to
the date of this Agreement, but in any such case
the parties hereto will attempt in good faith to
make appropriate substitute disclosure
arrangements.
6.04 Advice of Changes.
Prior to the Closing, each of the Seller and
the Buyer will promptly advise the other of (i) any
change or the occurrence or nonoccurrence of any
event having a Material Adverse Effect on such
party or which would be reasonably likely to cause
any representation or warranty of such party
contained in this Agreement to be untrue or
inaccurate in any material respect and (ii) any
material failure of such party to comply with or
satisfy any covenant, condition or agreement to be
complied with or satisfied by it under this
Agreement if such failure is not or cannot be cured
within 30 days of discovery. From time to time
prior to the Closing, each party will promptly
supplement or amend any Schedule delivered in
connection with the execution of this Agreement to
reflect any matter which, if existing, occurring or
known at the date of this Agreement, would have
been required to be set forth or described in such
Schedule or which is necessary to correct any
information in such Schedule which has been
rendered inaccurate thereby. Neither the delivery
of any such notice nor any supplement or amendment
to such Schedule shall limit or otherwise affect
the remedies available hereunder to the party
receiving such notice, supplement or amendment nor
have any effect for the purposes of determining
satisfaction of the conditions set forth in this
Agreement; provided, however, that the election by
the party receiving any such notice, amendment or
supplement prior to the Closing relating to any
representation, warranty, agreement or covenant of
the other party to proceed with the Closing shall
constitute the irrevocable waiver by such party, as
of the Closing, of any claim that such party might
otherwise have had against the other party for any
damages, satisfaction, compensation, specific
performance or other remedy, at law or in equity,
arising out of or relating to any breach, failure
or nonfulfillment of the representation, warranty
or covenant to which such notice, amendment or
supplement relates.
6.05 Current Information.
(a) During the period from the date of
this Agreement to the Closing Date, the Seller will
cause one or more of its designated representatives
to confer on a regular and frequent basis (not less
than monthly) with representatives of Buyer to
report on the general status of the ongoing
operations of the Business and the status of the
Purchased Assets and to cooperate and communicate
fully with respect to the manner in which the
Business is proposed to be conducted before and
after the Closing, including without limitation the
type and mix of products and services, personnel
matters, accounting, and the making of any capital
improvement related to the Business or any of the
Purchased Assets.
(b) Each of the Seller and the Buyer
will promptly notify the other party of any
Material Adverse Effect on such party and of any
governmental complaints, investigations or hearings
that may relate or otherwise affect, directly or
indirectly, the Business or the transaction
contemplated by this Agreement (or communications
indicating that the same may be contemplated) or
the institution or the threatened institution of
significant litigation relating to or otherwise
affecting, directly or indirectly, the Business,
and will keep such other party reasonably informed
of such events.
6.06 Failure to Fulfill Conditions.
In the event that a party hereto determines
that a condition to its obligation to complete the
transactions contemplated by this Agreement cannot
be fulfilled and will not be waived, it will
promptly notify the other party.
ARTICLE 7
OBLIGATIONS OF PARTIES PRIOR TO AND AFTER THE
CLOSING
7.01 Regulatory and Other Approvals.
Each party (i) shall, as soon as practicable
after the date hereof, prepare and file, and shall
assist and cooperate in a timely fashion with the
other party in its preparation and filing of,
applications with the appropriate federal and/or
state regulatory authorities for all approvals
required by law or regulation to effect the
transactions contemplated by this Agreement, and
the parties hereto shall, if required, publish
appropriate notice of such applications, and (ii)
shall, as soon as practicable after the date
hereof, seek to obtain, and shall assist and
cooperate in a timely fashion with the other party
in its attempts to obtain, all other consents and
approvals necessary to effect such transactions,
including the approval or consent of
nongovernmental third parties of the assignment of
the Seller's rights and interests under the
Contracts, if and as required. The parties agree
to use their respective best efforts to cooperate
and obtain any and all such regulatory and other
approvals at the earliest practicable time, and to
satisfy any reasonable conditions imposed by the
regulators or other parties whose consent or
approval is required.
7.02 Further Assurance.
Each party will use its best efforts to
perform its obligations under this Agreement and to
take such actions as are necessary or advisable to
satisfy the conditions set forth herein. In
connection with the foregoing, to the extent any
one or more Customers shall object to the Chapter
62 proceeding relating to Seller's transfer of the
Business to the Trust Subsidiary or otherwise
object to the transfer of such Customer's account
to the Trust Subsidiary or Buyer, Seller shall use
its best efforts to persuade such Customer(s) to
withdraw such objection or, to the extent such
efforts are unsuccessful or would be inappropriate
if continued, shall use its best efforts to
transfer the trusteeship of each such Customer's
account(s) to a suitable successor trustee. Each
party hereby agrees to execute and deliver such
instruments and take such other actions as the
other party may reasonably require in order to
carry out the intent of this Agreement. In
connection with the Asset Closing, Seller agrees to
give the Trust Subsidiary such bills of sale,
assignments and other instruments of conveyance and
transfer as, in the reasonable judgment of Buyer,
shall be necessary and appropriate to vest in the
Trust Subsidiary the legal and equitable title to
the Purchased Assets, free and clear of all liens
and encumbrances. Seller further agrees to use its
best efforts to obtain all necessary and
appropriate consents from third parties to effect
the substitution of Buyer or the Trust Subsidiary
in place of GMB with respect to any fiduciary,
custodial or agency appointments of GMB included
within the Purchased Assets or otherwise relating
to the Business that have not been effectively
transferred to the Trust Subsidiary, whether in
accordance with Chapter 62 or otherwise, at any
time from and after the Closing Date; provided,
however, that Seller shall not be required to incur
substantial additional costs or expenses in
fulfillment of its obligation contained in this
sentence.
7.03 Limitations on the Seller's
Fiduciary Services Business Activities.
AFC and its subsidiaries and affiliates will
not, directly or indirectly, solicit to provide or
provide, by any means including, without
limitation, personal contact, mail or telephone,
any form or manner of Fiduciary Services (as such
term is defined below) to any of the Customers for
a period of three years after the Closing Date. As
used in this Agreement, the term "Fiduciary
Services" means services provided primarily for the
benefit of others in the capacity as investment
manager, trustee, custodian, agent, executor,
administrator, guardian of estates, assignee,
receiver or committee of estates of lunatics.
Nothing in this Section 7.03 shall prevent the
subsidiary banks or other affiliates of AFC after
the Closing from providing any services, including
without limitation Fiduciary Services, to any
person or entity if the subsidiary bank or
affiliate providing such services is initially
approached without any prior solicitation of any
kind by such person or entity regarding such
services.
7.04 Officers and Employees.
Buyer intends to offer employment, through the
Trust Subsidiary, to such number of the Employees
who meet Buyer's qualifications and remain in good
standing as Employees prior to the Closing Date, as
it requires to conduct the Business after the
Closing Date. Buyer shall provide to AFC at least
30 days prior to the Closing Date a list of the
Employees to whom Buyer intends to offer employment
after the Closing (such specified Employees being
referred to as the "Transferred Employees"), which
list may be amended from time to time by Buyer
prior to the Closing Date. Buyer shall offer to
the Transferred Employees the same benefits as are
maintained by Buyer from time to time for the
benefit of its employees similarly situated. Buyer
shall cause its employee benefit plans, programs or
arrangements, other than any employee pension plan,
to treat the prior service of each Transferred
Employee with GMB or its affiliates, to the extent
such prior service is recognized under any
comparable plan, program or arrangement of the
Seller, as service rendered to Buyer or its
affiliates, as the case may be, for purposes of
eligibility to participate, vesting and eligibility
for special benefits under each such plan, program
or arrangement of Buyer, but not for benefit
accrual attributable to any period before the
Closing Date. Buyer shall have no obligations or
liabilities whatsoever, relating to severance
benefits or otherwise, to any Employee other than
those persons who are included among the
Transferred Employees and, in any case, Buyer shall
have no obligations or liabilities to any of the
Employees, including the Transferred Employees,
with respect to or under the terms or conditions of
any Employee Contract or Employee Plan.
7.05 Systems Conversion.
From and after the date hereof, the Seller
shall meet with Buyer on a regular basis to discuss
and plan for the conversion of GMB data processing
and related electronic informational systems
relating to the Business to those used by Buyer.
Buyer shall use its best efforts to complete the
systems conversion as soon as is reasonably
practicable following the Closing Date. Until such
time as the conversion is completed, the Seller
shall assist Buyer by providing access to the
Seller's computer software and computer and data
processing services relating to or otherwise
affecting the Business. Each party shall be
responsible for its own costs and expenses
associated with the systems conversion.
7.06 Public Announcements;
Confidentiality; No Misuse of Seller Information;
Restricted Names.
(a) Except as otherwise required by law
or the rules of the NASDAQ Stock Market, the Seller
and Buyer will cooperate with each other in the
development and distribution of all news releases
and other public information disclosures with
respect to this Agreement or any of the
transactions contemplated hereby. Each of the
Buyer and the Seller will hold all non-public
information relating to the other party received by
it from the other party, directly or through agents
or representatives, under this Agreement or in the
course of any discussions and negotiations leading
to this Agreement in strictest confidence and shall
not disclose, and shall take all appropriate steps
to ensure that its employees, agents and
representatives having access to such information
do not disclose, any such information to any third
parties, to the public generally, or to any of its
own employees, agents or representatives who have
no need to know such information, unless and until
such information shall otherwise have become
publicly known; provided, however, that non-public
information relating to the Business shall be
deemed non-public information of the Buyer after
the Closing.
(b) Buyer and its affiliates will not,
directly or indirectly, solicit to provide or
provide, by any means including, without
limitation, personal contact, mail or telephone,
any form or manner of Fiduciary Services to any
customer of Seller whose account is serviced by
Buyer in accordance with the Servicing Agreement
(as such term is defined in Section 7.07 below) for
so long as such customer's account is serviced by
Buyer under the Servicing Agreement. For a period
of three years after the Closing Date, Buyer and
its affiliates will not use to its or their
advantage any Restricted Information (as such term
is defined below), including without limitation
soliciting to provide or providing any form of
Individual Retirement Accounts or Xxxxx Accounts to
former customers of GMB whose Trusteed Deposit
Accounts have been transferred to a Counterparty in
any Bank Sale Transaction, to the extent that Buyer
or its affiliates shall have identified such
customers by use of any such Restricted
Information. As used in this Section 7.06(b), the
term "Restricted Information" means any of the
information of or relating to GMB or its business,
operations or customers obtained by Buyer from
Seller under this Agreement or in negotiations or
investigations leading up to the parties' execution
and delivery of this Agreement and consummation of
the transactions contemplated hereby or obtained by
Buyer after Closing from former employees of
Seller, including without limitation information
relating to the Trusteed Deposit Accounts or the
loan or deposit operations or business of GMB;
provided, however, that Restricted Information
shall not in any event include any of the
following: (i) information that relates to the
Business and is necessary to Buyer after the
Closing in the continued operation and further
development of the trust, fiduciary, custodial,
agency and other business constituting the
Business; (ii) information that is or becomes
generally available to the public other than as
result of a disclosure by Buyer or any affiliate or
representative of Buyer, or (iii) information that
was previously known or available to Buyer or its
affiliates or representatives on a nonconfidential
basis prior to its disclosure to Buyer by Seller,
its affiliates or representatives. Buyer agrees to
return to Seller all of such Restricted Information
taking the form of documents, books, records or
tapes and to destroy any electronic records in its
possession containing such Restricted Information.
Nothing contained in this Section 7.06(b) or
elsewhere in this Agreement shall be deemed to
prohibit Buyer or any of its affiliates from
engaging in general marketing and/or soliciting
activities in any area of business conducted
through customary mass media sources, including
without limitation print media, television and
radio, which are not intended to specifically
target persons who are customers of Seller whose
accounts are serviced by Buyer in accordance with
the Servicing Agreement or persons who are former
GMB customers whose Trusteed Deposit Accounts have
been transferred to a Counterparty in a Bank Sale
Transaction.
(c) Nothing in this Section 7.06 shall
prevent the subsidiary banks or other affiliates of
VFSC after the Closing from providing any services,
including without limitation Fiduciary Services or
services pertaining to Individual Retirement
Accounts or Xxxxx Accounts, to any person or entity
if the subsidiary bank or affiliate providing such
services is initially approached without any prior
solicitation of any kind by such person or entity
regarding such services.
(d) Buyer shall not use or permit any
successor to use the names "Green Mountain Bank,"
"First Twin State Bank," "Xxxxxxx Bank" or "United
Vermont Bancorporation."
7.07 Servicing Arrangements.
On the Closing Date, AFC and Buyer shall enter
into a servicing agreement in substantially the
form included as Exhibit A hereto (the "Servicing
Agreement"), which shall provide for the continued
provision by Buyer after the Closing Date to AFC
and its affiliates of fiduciary services similar in
type and quality to the fiduciary services
currently being provided by GMB to AFC and its
affiliates.
7.08 Lease Arrangements.
On the Closing Date, the Seller and Buyer
shall enter into a lease agreement in substantially
the form included as Exhibit B hereto (the "Lease
Agreement"), pursuant to which Buyer shall lease
for the period from the Closing Date through
November 30, 1996 that space of approximately 2,083
square feet located in 00 Xxxx Xxxxxx, Xxxxxxx,
Xxxxxxx currently occupied by the trust department
of GMB, at a per annum rate of Eight and 00/100
Dollars ($8.00) per square foot.
7.09 Section 338(h)(10) Election.
If Buyer so elects, as evidenced by written
notice given to AFC not later than the Closing
Date, Buyer and AFC will join in making an election
under Section 338(h)(10) of the Internal Revenue
Code of 1986, as amended (a "Section 338(h)(10)
Election"). Buyer will be responsible for
preparing and filing all documents and materials
necessary in connection with making the Section
338(h)(10) Election, and AFC agrees to cooperate
with Buyer in connection therewith (including,
without limitation, signing and returning to Buyer
after the Closing Date, completed Internal Revenue
Service Forms 8023-A and any other documents sent
to it for its signature in connection therewith (to
the extent such documents are consistent therewith)
within fifteen (15) days of its receipt of such
documents and filing any such documents with its
tax returns as necessary). The fair market value
of the Purchased Assets shall be determined in a
manner consistent with the allocation of values
contemplated by Section 3.04(c) above. Buyer and
AFC will file all tax returns in a manner
consistent with the Section 338(h)(10) Election and
the valuation of the Purchased Assets as so
determined.
7.10 Alternative Structure.
Notwithstanding anything to the contrary
contained in this Agreement, at any time prior to
the Closing Date, Buyer shall be entitled to revise
the structure of its acquisition of the Business as
contemplated by this Agreement, so long as the
transactions comprising such revised structure
shall (i) be capable of consummation in as timely a
manner as the structure contemplated herein and
(ii) not otherwise have a material adverse impact
on the Seller, including on the financial benefits
reasonably expected to be derived by the Seller
from the transactions provided for herein or the
costs likely to be incurred by Seller in effecting
such transactions. This Agreement and any related
documents shall be appropriately amended in order
to reflect any such revised structure.
ARTICLE 8
CONDITIONS PRECEDENT TO BUYER'S OBLIGATIONS
Each and every obligation of Buyer under this
Agreement to be performed on or before the Closing
Date shall be subject to the satisfaction by or on
behalf of the Seller, on or before the Closing
Date, of the following conditions, unless such
satisfaction is waived by the Buyer:
8.01 Representations and Warranties
True; Obligations Performed.
(a) The representations and warranties
made by the Seller in this Agreement, including any
that may be contained in any Schedule hereto, shall
be true at and as of the Closing Date as though
such representations and warranties were made at
and as of such time, except for any changes
consented to by Buyer or otherwise expressly
permitted in this Agreement.
(b) The Seller shall have performed and
complied with all obligations and agreements
required by this Agreement to be performed or
complied with by it prior to or at the Closing
Date.
(c) From the date of this Agreement
until the Closing Date, there shall have been no
Material Adverse Effect, not cured, on the Seller;
provided, however, that the updating of Schedule
4.04(c), as contemplated by Sections 2.05 and
4.04(c) above, to amend and revise the list of
Defaulted Trust Agreements contained in said
Schedule 4.04(c) and/or the aggregate amount of the
fees payable to Seller under the Defaulted Trust
Agreements, including any increase thereof from the
date of this Agreement up to and including the
Closing Date, shall not on their own constitute the
occurrence of a Material Adverse Effect for
purposes of this Section 8.01(c), subject in all
cases, however, to the continuing effect and
applicability of Section 8.01(h) below.
(d) On the Closing Date, no action, suit
or proceeding shall be pending or threatened
against the Seller which would reasonably be
expected to result in a Material Adverse Effect on
the Seller.
(e) Each of the Servicing Agreement and
the Lease Agreement shall have been duly executed
and delivered by Buyer and Seller and shall be in
full force and effect on the Closing Date.
(f) Buyer shall have received the
opinion of Gallop, Xxxxxxx & Xxxxxx, X.X., counsel
to the Seller, dated the Closing Date, such opinion
to be in substantially the form attached hereto as
Exhibit C. In delivering such opinion, said
counsel may reasonably rely on the opinion of
Vermont counsel, such counsel and opinion to be
reasonably satisfactory to Buyer and its counsel,
with regard to matters of Vermont law.
(g) Each of AFC, AVC and GMB shall have
delivered to Buyer a certificate signed by its
President, Chief Financial Officer and senior
officers having responsibility for the management
and operation of the Business, dated the Closing
Date, certifying to the fulfillment of all of the
foregoing conditions.
(h) The Closing Annual Revenue (as such
term is defined below) shall be not less that
$1,500,000.00. For purposes of this Section
8.01(h), the "Closing Annual Revenue" shall equal
(i) the Annual Revenue, determined in accordance
with Section 3.05(a), as of the most recent
practicable date prior to the Closing, minus (ii)
the amount of such Annual Revenue attributable to
any and all Retained Trust Agreements, Defaulted
Trust Agreements and any other Trust Agreements
that have not been effectively transferred and
assigned by Seller to the Trust Subsidiary as part
of the Asset Closing, plus (iii) if, as of the
Closing Date, Buyer shall have received written
commitment, in form and substance satisfactory to
Buyer, from any one or more Prospective Computer
Processing Customers for such Prospective Computer
Processing Customer(s) to purchase trust
correspondent computer processing services from
Buyer after the Closing, the amount of Computer
Processing Fees that would be attributable to each
such Prospective Computer Processing Customer if a
contract for such services had been in effect
between Seller and such Prospective Computer
Processing Customer prior to the Asset Closing and
had been effectively transferred and assigned by
Seller to the Trust Subsidiary as part of the Asset
Closing (provided that the amount added under this
clause (iii) shall not exceed the Notice Account
Total, if any, deducted from gross income in
computing Annual Revenue in clause (i) above).
ARTICLE 9
CONDITIONS PRECEDENT TO THE SELLER'S OBLIGATIONS
Each and every obligation of the Seller under
this Agreement to be performed on or before the
Closing Date shall be subject to the satisfaction
by or on behalf of the Buyer, on or before the
Closing Date, of the following conditions, unless
such satisfaction is waived by the Seller:
9.01 Representations and Warranties
True; Obligations Performed.
(a) The representations and warranties
made by Buyer in this Agreement shall be true at
and as of the Closing Date as though such
representations and warranties were made at and as
of such time, except for any changes consented to
by the Seller.
(b) Buyer shall have performed and
complied with all obligations and agreements
required by this Agreement to be performed or
complied with by it prior to or at the Closing
Date.
(c) From the date of this Agreement
until the Closing Date, there shall have been no
Material Adverse Effect, not cured, on Buyer.
(d) On the Closing Date, no action, suit
or proceeding shall be pending or threatened
against Buyer which would reasonably be expected to
result in a Material Adverse Effect on Buyer.
(e) The Seller shall have received the
opinion of Xxxxxxxx & Worcester LLP, counsel to
Buyer, dated the Closing Date, such opinion to be
in substantially the form attached hereto as
Exhibit D. In delivering such opinion, said
counsel may reasonably rely on the opinion of
Vermont counsel, such counsel and opinion to be
reasonably satisfactory to the Seller and its
counsel, with regard to matters of Vermont law.
(f) Buyer shall have delivered to the
Seller a certificate of its President and Chief
Financial Officer, dated the Closing Date,
certifying to the fulfillment of all of the
foregoing conditions.
ARTICLE 10
CONDITIONS PRECEDENT TO ALL PARTIES'
OBLIGATIONS
Each and every obligation of the parties under
this Agreement to be performed on or before the
Closing Date shall be subject to the satisfaction,
on or before the Closing Date, of the following
conditions, unless such satisfaction is mutually
waived (to the extent legally permitted) by the
parties:
10.01 Approval of Regulatory
Authorities.
All necessary approvals, authorizations and
consents of all federal and state regulatory
authorities required to consummate the transactions
contemplated hereby shall have been obtained and
shall remain in full force and effect and all
statutory waiting periods in respect thereof shall
have expired or been terminated. No order,
injunction or decree issued by any court or agency
of competent jurisdiction or other legal restraint
or prohibition preventing the consummation of the
transaction contemplated by this Agreement shall be
in effect and no proceeding initiated by any
regulatory authority seeking an injunction shall be
pending. No statute, rule, regulation, order,
injunction or decree shall have been enacted,
entered, promulgated or enforced by any regulatory
or judicial authority which prohibits, restricts or
makes illegal consummation of the transaction
contemplated by this Agreement.
10.02 Completion of Asset Closing.
Subject to Buyer's rights under Section 7.10
above to revise the structure of its acquisition of
the Business as contemplated by this Agreement, the
Asset Closing shall have been completed in
accordance with the provisions of Article 2 of this
Agreement.
ARTICLE 11
TERMINATION
11.01 Methods of Termination.
This Agreement may be terminated:
(a) At any time on or prior to the
Termination Date (as such term is defined below),
if the Closing has not already then occurred, by
mutual written agreement of Buyer and the Seller;
or
(b) At any time on or prior to the
Termination Date, if the Closing has not already
then occurred, by either Buyer or the Seller in
writing, if (i) the other party has, in any
material respect, breached any covenant or
agreement contained herein or (ii) any material
representation or warranty of the other party
contained herein is or becomes inaccurate or
misleading (taking into account that Seller's
updating of the list of Defaulted Trust Agreements
contained in Schedule 4.04(c) shall not on its own
result in a breach of Seller's representation and
warranty contained in Section 4.04(c)), and in
either case if such breach or inaccuracy has not
been cured or otherwise corrected within forty-five
(45) days after the date on which written notice of
such breach or inaccuracy is given to the party
committing such breach and, in the reasonable
judgment of the party terminating this Agreement,
cannot be cured or otherwise corrected by the close
of business on the Termination Date; or
(c) At any time prior to the Termination
Date, by either Buyer or the Seller in writing, if
any of the requests or applications for prior
approval or consent referred to in Section 7.01
hereof is denied, and, to the extent applicable,
the time period for appeals and requests for
reconsideration has expired; or
(d) By either Buyer or the Seller in
writing, if the Closing has not occurred by the
close of business on September 30, 1996 (the
"Termination Date").
11.02 Procedure Upon Termination.
In the event of termination pursuant to
Section 11.01 hereof, written notice thereof shall
forthwith be given to the other party, and this
Agreement shall terminate upon receipt of such
notice, immediately unless an extension is
consented to by the party having the right to
terminate. If this Agreement is terminated as
provided herein:
(a) Each party will redeliver all
documents, work papers and other material of the
other party relating to this transaction, whether
so obtained before or after the execution hereof,
to the party furnishing the same.
(b) All information received by either
party hereto with respect to the business of the
other party (other than information which is a
matter of public knowledge or which has heretofore
been or is hereafter published in any publication
for public distribution or filed as public
information with any regulatory authority) shall
not at any time be used for business advantage by
such party or disclosed by such party to third
persons.
(c) Nothing contained in this Article 11
shall be deemed to excuse either party for a breach
of any of its obligations or agreements undertaken
or made in this Agreement.
11.03 Effect of Termination
If this Agreement shall be terminated as a
result of the Seller's breach of its covenant under
Section 6.02 or as a result of the willful breach
of this Agreement by either Buyer or the Seller,
the other party shall be entitled to be paid an
amount equal to $150,000 to compensate it for its
out-of-pocket expenses and the time and effort of
its management in working on the transaction. In
addition, if the Seller enters into an agreement
with any other party for the sale and transfer of
the Business during a 12 month period following
Buyer's termination of this Agreement due to the
Seller's committing such a breach or willful breach
as provided in the foregoing sentence, Buyer shall
be entitled to be paid an additional $200,000.
Notwithstanding the foregoing, and subject to the
last clause of Section 6.04 above, either party may
pursue any remedy at law or in equity for damages
or equitable relief if the other party shall breach
the terms of this Agreement, and the prevailing
party shall be entitled to be paid all
out-of-pocket expenses, including attorneys' fees
and court costs, in enforcing its rights hereunder.
ARTICLE 12
INDEMNIFICATION
12.01 Trust Indemnification.
(a) The Seller hereby agrees to
indemnify and hold harmless Buyer and the Trust
Subsidiary from and against any and all losses,
claims, liabilities and damages, including, without
limitation, any and all investigation, legal and
other expenses reasonably incurred by either Buyer
or the Trust Subsidiary in connection with, and any
amount paid by either Buyer or the Trust Subsidiary
in settlement of, any action, suit or proceeding
brought against the Seller or either Buyer or the
Trust Subsidiary, or any claim asserted against the
Seller or either Buyer or the Trust Subsidiary,
arising out of any act or omission of the Seller
with respect to any Trust Agreement or related to
the conduct of the Business, the ownership,
possession or use of any Purchased Asset or the
payment or performance of any Assumed Liability, in
each case where such act or omission of the Seller
occurred during the period prior to the Closing.
(b) Buyer hereby agrees to indemnify and
hold harmless the Seller from and against any and
all losses, claims, damages and liabilities,
including, without limitation, any and all
investigation, legal and other expenses reasonably
incurred by the Seller in connection with, and any
amount paid by the Seller in settlement of, any
action, suit or proceeding brought against the
Seller or either Buyer or the Trust Subsidiary,
arising out of any act or omission of Buyer or the
Trust Subsidiary with respect to any Trust
Agreement or related to the conduct of the
Business, the ownership, possession or use of the
Purchased Assets or the payment or performance of
the Assumed Liabilities, in each case where such
act or omission occurred during the period after
the Closing, but in no event shall such
indemnification relate to actions or omissions of
the Trust Subsidiary or Seller or Buyer during the
period prior to the Closing.
12.02 General Indemnification.
Except as otherwise provided in Section 12.01
hereof, each party hereto hereby agrees to
indemnify, defend, save and hold harmless the other
from and against any and all damage, liability,
loss, expense, assessment, judgment or deficiency
of any nature whatsoever (including, without
limitation, reasonable attorneys' fees and other
costs and expenses incident to any suit, action or
proceeding) incurred or sustained by such other
party which shall arise out of, result from or
constitute any breach by such party of any
representation, warranty or covenant under this
agreement or non-fulfillment by it of any
obligation under this Agreement.
12.03 Claims.
(a) In case any claim shall be made or
action brought with respect to a matter referred to
in Sections 12.01 or 12.02 hereof, the party
entitled to indemnification (the "Indemnified
Party") shall promptly notify the party liable
therefor hereunder (the "Indemnifying Party") in
writing, setting forth the particulars of such
claim or action, and the Indemnifying Party shall
assume the defense thereof, including, without
limitation, the employment of counsel mutually
satisfactory to it and the Indemnified Party. No
such claim or action shall be settled by the
Indemnifying Party without the Indemnified Party's
prior written consent, which shall not be
unreasonably withheld; provided, however, that no
consent of the Indemnified Party is required in any
case if (i) such proposed settlement involves only
the payment of money by the Indemnifying Party,
(ii) the Indemnifying Party is able to pay the
amount of such settlement and all related expenses,
and (iii) the terms of such settlement are to
remain confidential by agreement of all parties to
such action other than the Indemnified Party. If
the Indemnifying Party shall not have employed
counsel within a reasonable time after receiving
notice of commencement of any such action, or if
the Indemnified Party shall have concluded that
there may be defenses available to it which are
different from or additional to those available to
the Indemnifying Party, then the Indemnified Party
may take actions separately in its own defense and
employ separate counsel and all legal and other
expenses, including, without limitation, the
reasonable fees and expenses of such counsel,
incurred by the Indemnified Party shall be borne by
the Indemnified Party.
(b) Notwithstanding any other provisions
of this Agreement, no claim for indemnification
shall be brought pursuant to Section 12.01 hereof
more than three (3) years after the Closing Date
and no claim for indemnification shall be brought
pursuant to Section 12.02 hereof more than thirteen
(13) months after the later of the Closing Date or
the date on which any covenant or obligation in
question was required to have been performed,
except that with respect to the Seller's
representations and warranties contained in Section
4.07 above a claim for indemnification may be
brought pursuant to Section 12.02 hereof at any
time prior to the lapse of time within which
federal, state or local taxing authorities are
entitled to assert any tax liability on the part of
the Seller for tax periods ending at or prior to
the Closing Date.
(c) If an Indemnified Party receives any
payment from any third party (including any
insurer) as compensation for any claim by the
Indemnified Party after the Indemnifying Party has
made any payment under Section 12.01 or Section
12.02 above to the Indemnified Party on account of
such claim by the Indemnified Party, then the
Indemnified Party shall promptly pay the dollar
amount of all such prior indemnification payments
to the Indemnifying Party, without demand or notice
of any kind made by the Indemnifying Party, to the
extent of all such third-party payments received by
the Indemnified Party.
ARTICLE 13
MISCELLANEOUS PROVISIONS
13.01 Amendment and Modification.
The parties hereto may amend, modify and
supplement this Agreement in such manner as may be
agreed upon by them in writing. Any corporation,
bank or other entity organized by a party hereto to
facilitate the consummation of the transactions
herein contemplated shall join in this Agreement,
become a party hereto and agree to be bound by its
provisions by executing a written instrument
signifying such intent at such time as it is
legally capable of doing so, but no party shall be
relieved of any obligation hereunder by the
addition of such party.
13.02 Assignment; Parties in Interest.
This Agreement and all of the provisions
hereof shall be binding upon, and inure to the
benefit of, the parties hereto and their respective
successors and permitted assigns, but neither this
Agreement nor any of the rights, interests or
obligations hereunder shall be assigned by either
of the parties hereto without the prior written
consent of the other. Nothing in this Agreement,
including without limitation Section 7.04 above, is
intended to confer, expressly or by implication,
upon any other person any rights or remedies under
or by reason of this Agreement.
13.03 Counterparts.
This Agreement may be executed simultaneously
in two or more counterparts, each of which shall be
deemed an original, but all of which together shall
constitute one and the same instrument.
13.04 Headings.
The headings of the Sections and Articles of
this Agreement are inserted for convenience only
and shall not constitute a part hereof.
13.05 Waiver.
Any condition to a party's obligation
hereunder may be waived by the other party.
13.06 Payment of Expenses.
Each party herein shall pay for its own
expenses and costs in connection with the carrying
out of this Agreement except as expressly provided
otherwise herein.
13.07 Governing Law, etc.
This Agreement shall be governed by the laws
of the State of Vermont. The representations,
warranties, covenants and obligations of the
parties hereunder shall survive the Closing Date,
subject to the provisions of Article 12 hereof.
13.08 Addresses for Notice, etc.
All notices, requests, demands and other
communications provided for hereunder shall be in
writing (including telecopy communication) and
mailed (by registered or certified mail) or
delivered by telecopy to the applicable party at
the address for such party indicated below or such
other address as shall be furnished in writing by
any party, and any such notice, request, demand or
other communication shall be deemed to have been
given as of the date received by the recipient
party, and copies of any such notices, requests,
demands or other communications shall be provided
as follows: (i) if to Buyer, copies to Xxxxxxxx &
Worcester LLP, Xxx Xxxx Xxxxxx Xxxxxx, Xxxxxx,
Xxxxxxxxxxxxx 00000, Telecopy No. (000) 000-0000,
Attention: Xxxxxxxxxxx Xxxxx, Esq. and Xxxxxxx X.
Xxxxxx, Esq.; and (ii) if to Seller, a copy to
Gallop, Xxxxxxx & Xxxxxx, X.X., Interco Corporate
Tower, 000 Xxxxx Xxxxxx, Xx. Xxxxx, Xxxxxxxx 00000,
Telecopy No. (000) 000-0000, Attention: Xxxxxx X.
Xxxxxxx, Esq.
[Remainder of Page Intentionally Blank]
IN WITNESS WHEREOF, each of the parties has
caused this instrument to be executed on its behalf
by its duly authorized officers and its corporate
seal to be affixed hereto, as of the first date
written above.
VERMONT NATIONAL BANK
By:________________________
Xxxx X. Xxxxxxxx,
Xx.
President
000 Xxxx Xxxxxx
Xxxxxxxxxxx,
Xxxxxxx 00000
Telecopy No.: 000-000-0000
ARROW FINANCIAL
CORPORATION
By:_________________________
Xxxxxxx X.
Xxxxxxxx
President
000 Xxxx Xxxxxx
Xxxxx Xxxxx, Xxx
Xxxx 00000
Telecopy No.: 000-000-0000
ARROW VERMONT
CORPORATION
By:_________________________
Xxxxxxx X.
Xxxxxxxx
President
00 Xxxx Xxxxxx
Xxxxxxx, Xxxxxxx
00000
Telecopy No.:
000-000-0000
GREEN MOUNTAIN BANK
By:_________________________
Xxxx X. Xxxxxx
Treasurer/Chief
Financial Officer
00 Xxxx Xxxxxx
Xxxxxxx, Xxxxxxx
00000
Telecopy No.:
000-000-0000
CONFORMED COPY
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (this
"Agreement") made as of this 27th day of February,
1996, between Arrow Financial Corporation ("AFC"),
a New York business corporation having its
principal office at 000 Xxxx Xxxxxx, Xxxxx Xxxxx,
Xxx Xxxx, Arrow Vermont Corporation ("AVC"), a
Vermont business corporation having its principal
office at 00 Xxxx Xxxxxx, Xxxxxxx, Xxxxxxx, and
Green Mountain Bank ("GMB"), a Vermont-chartered
banking corporation with its principal offices at
00 Xxxx Xxxxxx, Xxxxxxx, Xxxxxxx (the foregoing
entities sometimes collectively referred to as the
"Seller"), and Vermont National Bank ("Buyer"), a
national banking association having its principal
office at 000 Xxxx Xxxxxx, Xxxxxxxxxxx, Xxxxxxx.
WHEREAS, AFC is a bank holding company which
owns all of the capital stock of AVC, which in turn
owns all of the capital stock of GMB;
WHEREAS, the Seller intends to organize a
trust subsidiary as a wholly owned direct or
indirect subsidiary of AFC in accordance with
Chapter 62 of Title 8 of the Vermont Statutes (the
"Trust Subsidiary"), and to sell, transfer and
convey substantially all of the trust business of
GMB as presently conducted thereby, including,
without limitation, substantially all of the
assets, rights, liabilities, interests,
appointments and responsibilities of GMB in its
fiduciary, custodial or agency capacity associated
therewith (the "Business"), to the Trust
Subsidiary, all as authorized and provided for in
PAGE
said Chapter 62; and
WHEREAS, it is the parties' intention that the
Seller sell, transfer and convey the Business to
Buyer by means of a sale and transfer by the Seller
of all of the issued and outstanding capital stock
of the Trust Subsidiary to Buyer;
NOW, THEREFORE, in consideration for the
mutual covenants contained herein, and other good
and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the
parties agree as follows:
IN WITNESS WHEREOF, each of the parties has
caused this instrument to be executed on its behalf
by its duly authorized officers and its corporate
seal to be affixed hereto, as of the first date
written above.
VERMONT NATIONAL BANK
By: /s/ Xxxx X.
Xxxxxxxx, Xx.
Xxxx X. Xxxxxxxx,
Xx.
President
000 Xxxx Xxxxxx
Xxxxxxxxxxx,
Xxxxxxx 00000
Telecopy No.: 000-000-0000
ARROW FINANCIAL
CORPORATION
By: /s/ Xxxxxxx X.
Xxxxxxxx
Xxxxxxx X.
Xxxxxxxx
President
000 Xxxx Xxxxxx
Xxxxx Xxxxx, Xxx
Xxxx 00000
Telecopy No.: 000-000-0000
ARROW VERMONT
CORPORATION
By: /s/ Xxxxxxx X.
Xxxxxxxx
Xxxxxxx X.
Xxxxxxxx
President
00 Xxxx Xxxxxx
Xxxxxxx, Xxxxxxx
00000
Telecopy No.:
000-000-0000
GREEN MOUNTAIN BANK
By: /s/ Xxxx X.
Xxxxxx
Xxxx X. Xxxxxx
Treasurer/Chief
Financial Officer
00 Xxxx Xxxxxx
Xxxxxxx, Xxxxxxx
00000
Telecopy No.:
000-000-0000
