PURCHASE AND ASSUMPTION AGREEMENT
EXHIBIT 2.8
EXECUTION VERSION
DATE: July 1, 2009
PARTIES:
First Financial Bank, N.A., Hamilton, Ohio (the “Buyer”)
Xxxxx Union Bank and Trust Company, Columbus, Indiana, and
Xxxxx Union Realty, Inc., as owner of the Premises (collectively, the “Seller”)
RECITALS:
At the Closing (as hereinafter defined), Seller is willing to sell, and Buyer is willing to
purchase, the Assets (as hereinafter defined), and Buyer is willing to assume and discharge the
Liabilities (as hereinafter defined) upon the terms and subject to the conditions set forth in this
Purchase and Assumption Agreement (the “Agreement”).
Capitalized terms used herein have the respective meanings set forth on Annex I
attached hereto.
AGREEMENTS:
In consideration of the mutual covenants set forth herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as
follows:
1. Purchase and Sale of Assets.
(a) At the Closing, subject to the terms and conditions hereof and on the basis of and
subject to the representations, warranties, covenants and agreements herein contained,
including the assumption by Buyer of the Liabilities, Seller will grant, sell, convey,
assign, transfer and deliver to Buyer, and Buyer will buy, accept and receive from Seller,
all of Seller’s right, title and interest, free and clear of all Liens (excluding Permitted
Liens), in and to the following assets:
(1) The real estate owned in fee by Seller and described in Schedule 1
and all improvements to such property purchased, installed or constructed by or
on behalf of Seller and used in connection with the operation or maintenance of the
Branches, including, without limitation, buildings, structures, parking facilities
and drive-in teller facilities, (the “Premises”);
(2) All of the personal property of Seller located at the Branches or affixed
to the Premises, including, without limitation, the furniture, trade fixtures,
equipment, shelving, on-premises ATMs, security systems, safe deposit boxes
(including keys, but exclusive of contents), vaults, telephone numbers, sign
structures (exclusive of signage containing any trade name, trademark or service
xxxx, if any, of Seller), supplies (excluding any items consumed or disposed of,
but including new items acquired or obtained, in the ordinary course of the
operation of the Branches through the Closing Date) (collectively, the
“Personal Property”). The Personal Property is set forth in Schedule
2 and shall be updated as of the Closing Date;
(3) All cash on hand at the Branches, including, without limitation, vault and
teller cash, xxxxx cash, on-premises ATM cash, cash items in the process of
collection, and cash equivalents held at the Branches (collectively, the “Cash
on Hand”);
(4) The security deposits on the Branch Lease (“Premises Security
Deposits”);
(5) Prepaid expenses, including rents and utilities, as set forth on
Schedule 3, which Schedule 3 shall be updated as of the Closing
Date (the “Prepaid Expenses”);
(6) The Loans, including Accrued Interest, the collateral for the Loans, the
Loan Files and Loan Documents and all servicing rights related to such Loans
pursuant to Section 15(b);
(7) The Branch Lease, Personal Property leases, licenses, contracts and other
agreements identified on Schedule 5 that relate to the Branches
(“Assigned Contracts”);
(8) The Safe Deposit Agreements;
(9) The Records;
(10) The rights of action and claims related to the Assets and all rights of
Seller under express or implied warranties given or made in connection with the
Assets; and
(11) The Additional Assets (as defined below), if any.
The foregoing assets in (1) through (11) will be referred to collectively as the “Assets.”
Buyer shall succeed to all rights, title, benefits and interests in and to the Assets as of the
Closing, and shall be entitled to receive all benefits therefrom from and after the Closing.
(b) No later than two (2) Business Days prior to the Closing Date, Seller may agree to
grant, sell, convey, assign, transfer and deliver to Buyer, and Buyer may agree to purchase
and accept from Seller, such additional assets of Seller (“Additional Assets”) as the
parties may mutually agree, on such terms and conditions (including, without
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limitation, the valuation thereof and appropriate representations and warranties with
respect thereto) as may be mutually agreed upon by the parties and set forth on Schedule
6. Such additional consideration for any Additional Assets will be added to the Purchase
Price. Seller will not grant, sell, assign, transfer or encumber and Buyer will not purchase
any assets of Seller under this Agreement other than the Assets and any Additional Assets, if
any.
(c) Seller and Buyer hereby acknowledge and agree that, during the period between the
execution of this Agreement and five (5) Business Days prior to the Closing Date, Seller, in
its sole and absolute discretion, may add loans originated prior to the date of the execution
of this Agreement to Schedule 4(a)(i) with such loans thereby becoming “Loans” for
all purposes under this Agreement. Seller covenants and agrees, as soon as practicable
following a request by Buyer, to provide Buyer with all loan agreements, loan documents and
other relevant data (including, but not limited to, any facts, conditions, occurrences,
changes and other matters that Seller may include on the Seller Disclosure Schedule as an
exception to the representations and warranties as the same apply to such Loan) reasonably
necessary to allow Buyer to determine, in its sole and absolute discretion, which loans, if
any, shall be added to Schedule 4(a)(i) and thereby become “Loans” for all purposes
under this Agreement. Buyer covenants and agrees, that as soon as reasonably practicable
following such a determination by Buyer with respect to a particular loan or set of loans,
that Buyer shall notify Seller of Buyer’s decision to add such loans to Schedule
4(a)(i) thereby becoming “Loans” for all purposes under this Agreement. At the time such
new Loan is added to Schedule 4(a)(i) pursuant to this Section 1(c), the Seller
Disclosure Schedule shall be updated to reflect any exceptions to the representations and
warranties solely in connection with such new Loan and Section 1(e) below shall only apply to
any Seller Loan Disclosure Update made by Seller after such time.
(d) Through the period ending twenty-five (25) Business Days prior to the Closing Date
(the “Loan Review Period”), Buyer shall have reasonable access pursuant to Section
16(l) and may review all Loans to identify in writing to Seller (1) any and all loans that
were improperly or mistakenly classified as Loans as of the date of this Agreement due to
their inclusion on Schedule 4(a)(i), or (2) any and all Loans that as of the date of
the execution of this Agreement would entitle Buyer to indemnification (for purposes of this
determination, ignoring the limitations on indemnification set forth in Section 20(e)) for
Losses resulting from a breach of any of the representations or warranties set forth in
Section 9(f) (for purposes of this determination, any such representation or warranty that is
qualified by Material Adverse Effect, materiality or similar qualifier shall be read and
given effect as if no such qualifier is contained therein) ((1) and (2) collectively, the
“Excluded Loans”). Seller shall have ten (10) Business Days following the end of the
Loan Review Period to cure any such breaches, if any, capable of cure identified in such
notice provided by Buyer pursuant to (2) above (and in the event Seller cures any such
breaches, the Loan(s) associated with such breach(es) shall not be deemed “Excluded Loans”).
Following the end of such ten (10) Business Day period, Seller shall make adjustments to
Schedule 4(a)(i) to remove the Excluded Loans therefrom, and make corresponding
adjustments to the Purchase Price.
(e) Notice of Developments.
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(1) From the date of this Agreement until the Closing Date, Seller shall, from
time to time, provide Buyer with prompt written notice upon, and in any event
within one (1) business day of, becoming aware of any facts, conditions,
occurrences, changes and other matters that could reasonably be expected to cause a
breach of any of the representations and warranties of Seller contained in Section
9(f) of this Agreement (each a “Seller Loan Disclosure Update”).
(2) No later then fifteen (15) Business Days following the date the applicable
Seller Loan Disclosure Update was provided to Buyer and, with respect to any Seller
Loan Disclosure Update provided fifteen (15) Business Days prior to the Closing
Date, no later then the close of business on the Business Day immediately preceding
the Closing Date, Buyer may, in its sole and absolute discretion, notify Seller of
its intention to exclude from the definition of “Loans,” and thereby the
transactions contemplated by this Agreement, any and all Loans as to which such
particular Seller Loan Disclosure Update, directly or indirectly, relates, impacts
or is relevant to. Seller shall then have fourteen (14) calendar days following
notice from Buyer (or such lesser period of time remaining between the receipt by
Seller of notice from Buyer and the Business Day immediately preceding the Closing
Date) to address those matters, if any, capable of being cured that are identified
in the Seller Loan Disclosure Update such that thereafter they would not reasonably
be expected to cause a breach .
| i) | In Buyer’s reasonable judgment, if Seller adequately addresses said matters such that thereafter they would not reasonably be expected to cause a breach, then those Loan(s) to which the Seller Loan Disclosure Update in question relates shall not be removed from Schedule 4(a)(i) and therefore shall remain within the definition of “Loans,” which are to be acquired by Buyer pursuant to this Agreement. | ||
| ii) | In the event a Seller Loan Disclosure Update discloses matters not capable of being cured, or in Buyer’s reasonable judgment, if Seller does not adequately address a matter capable of being cured within the time period provided for above, then in Buyer’s sole and absolute discretion, Buyer may either (x) elect to acquire some or all of the Loans to which the Seller Loan Disclosure Update in question relates, or (y) remove such Loans from Schedule 4(a)(i), thereby removing them from the definition of “Loans,” which are to be acquired by Buyer pursuant to this Agreement, and make corresponding adjustments to the Purchase Price. |
(3) Unless the parties otherwise agree in writing, Seller shall not deliver
any Seller Loan Disclosure Updates to the Buyer after the fifteenth
(15th) Business Day prior to the Closing Date (the “Update Cut-Off
Date”) and any such disclosure delivered to Buyer following the Update Cut-Off
Date shall
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not be deemed to be a “Seller Loan Disclosure Update” for purposes of this
Agreement.
(4) Seller Loan Disclosure Updates shall not be deemed to be part of the
Seller Disclosure Schedule for purposes of determining whether a breach of a
representation or warranty has occurred or whether a party is entitled to
indemnification under this Agreement.
2. Assumption of Liabilities; Excluded Liabilities.
(a) As of and after the Closing, subject to satisfaction of the terms and conditions
hereof, including the transfer of the Assets to Buyer, Buyer will pay, perform and assume the
following liabilities of Seller and will perform the following duties, responsibilities and
obligations of Seller that are to be performed from and after the Closing Date:
(1) the Deposit Liabilities, including XXX and Xxxxx Accounts to the extent
contemplated by Section 2(c);
(2) the special FDIC premium assessment as of June 30, 2009 that will be
collected on September 30, 2009, but only with respect to the Deposit Liabilities;
(3) the Assigned Contracts, if such Assigned Contracts are actually assigned
to Buyer in accordance with their terms;
(4) Funding commitments under the Loans, including, Unfunded Advances, and the
servicing of the Loans;
(5) The Safe Deposit Agreements;
(6) The accrued liabilities, if any, described in Schedule 2(a)(6)
(the “Accrued Liabilities”);
(7) The obligations assumed by Buyer under Section 16(m) of this Agreement,
which under no circumstance shall include any liability or obligation for any
employment, change-in-control or other severance agreement or any payments under
any Employee Benefit Plan of Seller and/or Seller Parent, including, but not
limited to, bonus or incentive programs; and
(8) Taxes Buyer is responsible for under Section 21 and any taxes with respect
to the Assets or the Branches for any taxable period (or portion thereof) that
begins after the Closing Date.
The foregoing liabilities set forth in (1) through (8) only will be referred to collectively
as the “Liabilities.”
(b) Notwithstanding anything to the contrary in this Agreement, other than the
Liabilities, which Buyer is expressly assuming pursuant to this Agreement, Buyer shall not
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assume or be bound by any duties, responsibilities, obligations or liabilities of
Seller, or of any of its Affiliates, of any kind or nature, known, unknown, contingent or
otherwise, including, without limitation, (i) those attributable to any acts or omissions to
act taken or omitted to be taken by Seller (or any of its Affiliates) prior to the Closing
Date and any Legal Proceedings that arise as a result thereof; (ii) for any Seller or Seller
Parent tax liability, including, but not limited to, interest and penalties required to be
paid by Seller or its successor, except as provided herein; (iii) any obligation of Seller to
indemnify any Person; (iv) for any liability of Seller or any Affiliate under this Agreement
or for costs and expenses incurred in connection with this Agreement and the transactions
contemplated hereby; (v) relating or arising out of any deposit excluded under the definition
of Deposit Liabilities; (vi) those having to do with or related to the employment or other
similar relationship between Seller and Seller Parent on the one hand and their current,
former or prospective employees, officers, directors, consultants and other agents, on the
other hand, including, but not limited to, those relating to termination of employment or
refusal to hire, termination or severance payments, and compensation (including commission
and incentive payments), and those occurring under or related to any Employee Benefit Plan of
Seller or any of its ERISA Affiliates, and (vii) those arising from circumstances, events or
conditions prior to the Closing Date and not expressly assumed hereunder (collectively the
“Excluded Liabilities”).
(c)
(1) With respect to Deposit Liabilities in IRAs, Seller will use its
reasonable best efforts to cooperate with Buyer in taking any action reasonably
necessary to accomplish either the appointment of Buyer as successor custodian or
the delegation to Buyer (or to an Affiliate of Buyer) of Seller’s authority and
responsibility as custodian of all such IRAs, including, but not limited to,
sending to the depositors thereof appropriate notices, cooperating with Buyer in
soliciting consents from such depositors, and filing any appropriate applications
with applicable regulatory authorities. If, notwithstanding the foregoing, as of
the Closing Date, Buyer shall be unable to retain Deposit Liabilities in respect of
an XXX, such Deposit Liabilities shall be deemed to be “Excluded
Liabilities” for purposes of this Agreement.
(2) With respect to Deposit Liabilities in Xxxxx Accounts, Seller will use
reasonable best efforts to cooperate with Buyer to invite depositors thereof to
direct a transfer of each such depositor’s Xxxxx Account and the related Deposit
Liabilities to Buyer, as trustee thereof, and to adopt Buyer’s form of Xxxxx Master
Plan as a successor to that of Seller. Buyer will assume no Xxxxx Accounts unless
Buyer has received the documents, to its satisfaction, necessary for such
assumption at or before the Closing, and, if notwithstanding the foregoing, as of
the Closing Date, Buyer shall be unable to retain Deposit Liabilities in respect of
a Xxxxx Account, such Deposit Liabilities shall be deemed to be “Excluded
Liabilities” for purposes of this Agreement.
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3. Calculation and Allocation of Purchase Price.
(a) Purchase Price. Subject to Section 1 (with respect to Additional Assets and
Excluded Loans), Section 3(b) and Section 3(d), the purchase price of the Assets (the
“Purchase Price”) will be an amount equal to the sum of the following:
(1) The lower of: (i) the aggregate amount of the Net Book Value of the
Premises as of the last day of the month end immediately preceding the Closing
Date, and (ii) the Appraised Value of the Premises;
(2) The aggregate amount of the Net Book Value of the Personal Property as of
the last day of the month end immediately preceding the Closing Date, provided,
however that, with the exception of furniture, Buyer shall not be required to pay
for any Personal Property located at the Shelbyville branch, and therefore the Net
Book Value of such Personal Property shall not be included in the Purchase Price;
(3) The aggregate amount of the Cash on Hand on the Closing Date;
(4) The aggregate amount of the Premises Security Deposits;
(5) The aggregate amount of the Prepaid Expenses as of the Closing Date;
(6) The aggregate unpaid principal amount of the Loans, plus the aggregate
amount of Accrued Interest, on the Closing Date; plus
(7) The aggregate amount agreed upon by Seller and Buyer for the Additional
Assets, if any.
(b) Adjustments of Purchase Price.
(1) Solely for purposes of facilitating the calculation of the cash due Buyer
or Seller, as applicable, on the Closing Date, Seller shall provide to Buyer, five
(5) Business Days prior to the Closing Date, the Draft Closing Statement.
(2) On or before 12:00 noon E.D.T. on the thirtieth (30th) calendar day
following the Closing Date (the “Adjustment Date”), Seller shall deliver to
Buyer the Final Closing Statement and Seller shall make available to Buyer such
work papers, schedules and other supporting data used to calculate and prepare the
Final Closing Statement as may be requested by Buyer to enable Buyer to verify such
determinations set forth in the Final Closing Statement.
(3) If, within forty-five (45) calendar days following the date of receipt by
Buyer of the Final Closing Statement, Buyer does not dispute any items contained in
the Final Closing Statement or omitted therefrom, then the Final Closing Statement
shall be final and binding upon the parties. In the event
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that Buyer disputes any items contained in the Final Closing Statement or
omitted therefrom, such disputes shall be resolved in the following manner:
(A) Buyer shall notify Seller, in writing (the “Notice of
Disagreement”) of such dispute(s) within forty-five (45) calendar days
after Buyer’s receipt of the Final Closing Statement, which notice shall
specify in reasonable detail the nature of the dispute(s), indicating those
specific items that are in dispute (the “Disputed Items”). All
items that are not Disputed Items shall be final, binding and conclusive for
all purposes hereunder.
(B) During the 30-day period following Seller’s receipt of a Notice of
Disagreement from Buyer, Seller and Buyer shall use commercially reasonable
efforts to resolve any Disputed Items. If, at the end of such 30-day
period, the parties have reached written agreement with respect to all
matters covered by a Notice of Disagreement, the Final Closing Statement
shall be adjusted to reflect such written agreement and shall become final
and binding upon the parties hereto.
(C) If, at the end of the 30-day period specified in subsection
(b)(3)(B) above, Buyer and Seller shall have failed to reach a written
agreement with respect to all or any portion of such Disputed Items (those
Disputed Items that remain in dispute at the end of such period are the
“Unresolved Changes”), then Buyer and Seller shall promptly refer
the Unresolved Changes to a mutually agreeable nationally recognized
independent certified public accounting firm (the “Firm”) to make a
determination as to the subject matter of the Unresolved Changes. If Buyer
and Seller fail to agree on a Firm within thirty (30) days after the end of
the 30-day period specified in subsection (b)(3)(B) above, the Firm shall be
selected by the American Arbitration Association. The Firm shall be
directed to issue its written decision as promptly as practicable and in any
event within thirty (30) days following the submission of the Unresolved
Changes to the Firm for resolution, and such decision shall be final,
binding and conclusive on the parties (the “Firm Determination”).
Seller and Buyer each agree to fully cooperate with and provide any
information requested by such Firm. In the event Unresolved Changes are
submitted to the Firm for resolution as provided herein, the fees, charges
and expenses of the Firm (the “Firm Expenses”) shall be borne and
paid equally by Buyer and Seller.
(4) On or before 12:00 noon E.D.T. on the fifth (5th) Business Day after the
Adjusted Payment Amount shall have become final and binding or, in the case of a
dispute, the date of the resolution of the dispute pursuant to subsection 3(b)(3)
above, if the Adjusted Payment Amount is greater than the Estimated Payment Amount
then Seller shall pay to Buyer an amount in dollars equal to such excess, plus
interest on such excess amount from the Closing Date to but excluding the payment
date, at the Federal Funds Rate, or if the Adjusted Payment Amount is less than the
Estimated Payment Amount Buyer shall pay to
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Seller an amount in dollars equal to such shortfall, plus interest on such
shortfall from the Closing Date to but excluding the payment date, at the Federal
Funds Rate. If a payment is owed to Buyer pursuant to this Section 3(b)(4), such
payment of the Adjusted Payment Amount shall be effected first, by release of funds
held by the Escrow Agent in the Escrow Account, and second by wire transfer of
immediately available funds from Seller to an account designated in writing by the
Buyer within five (5) Business Days after the determination thereof. If a payment
is owed to Seller pursuant to this Section 3(b)(4), such payment of the Adjusted
Payment Amount shall be made by wire transfer of immediately available funds from
Buyer to an account designated in writing by Seller within five (5) Business Days
after the determination thereof.
(c) Allocation of the Purchase Price.
(1) Buyer shall prepare a proposed allocation of the Purchase Price among the
Assets in accordance with Section 1060 of the Code, which proposed allocation shall
be delivered to Seller for review and comment within sixty (60) days following the
Closing Date (“Proposed Allocation Statement”). Seller shall provide to
Buyer in writing within ten (10) days of the receipt of such Proposed Allocation
Statement any objections thereto.
(2) If, within ten (10) days following the receipt of the Proposed Allocation
Statement, Seller does not dispute any items contained in the Proposed Allocation
Statement, then the Proposed Allocation Statement shall be final and binding upon
the parties (“Final Allocation Determination”). In the event that Seller
disputes any items contained in the Proposed Allocation Statement, such disputes
shall be resolved in the following manner:
(A) Seller shall notify Buyer in writing (the “Notice of Allocation
Disagreement”) of such dispute within ten (10) days following Seller’s
receipt of the Proposed Allocation Statement, which notice shall specify in
reasonable detail the nature of the dispute, indicating those specific items
that are in dispute (the “Seller Disputed Items”). All items that
are not Seller Disputed Items shall be final, binding and conclusive for all
purposes hereunder.
(B) During the 15-day period following Buyer’s receipt of a Notice of
Allocation Disagreement, Seller and Buyer shall use commercially reasonable
efforts to resolve any Seller Disputed Items. If, at the end of such 15-day
period, the parties have reached written agreement with respect to all
matters covered by a Notice of Allocation Disagreement, the Proposed
Allocation Statement shall be adjusted to reflect such written agreement and
shall become the Final Allocation Determination.
(C) If, at the end of the 15-day period specified in subsection
(c)(2)(B) above, Buyer and Seller shall have failed to reach a written
agreement with respect to all or any portion of such Seller Disputed Items
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(those Seller Disputed Items that remain in dispute at the end of such
period are the “Unresolved Allocation Changes”), then Buyer and
Seller shall promptly refer the Unresolved Allocation Changes to a mutually
agreeable Firm to make a determination as to the subject matter of the
Unresolved Allocation Changes. If Buyer and Seller fail to agree on a Firm
within 15 days after the end of the 15-day period specified in subsection
(c)(2)(B) above, the Firm shall be selected by the American Arbitration
Association. The Firm shall issue its written decision as promptly as
practicable and in any event within 15 days following the submission of the
Unresolved Allocation Changes to the Firm for resolution, and such decision
shall be final, binding and conclusive on the parties and become the Final
Allocation Determination. In the event Unresolved Allocation Changes are
submitted to the Firm for resolution as provided herein, the costs of
engaging the Firm shall be paid by Buyer and Seller equally.
(3) Buyer and Seller and their Affiliates shall file all tax returns
(including, but not limited to, Internal Revenue Service Form 8594) in all respects
and for all purposes consistent with such Final Allocation Determination. Seller
shall use commercially reasonably efforts to deliver to Buyer all such documents
and other information as Buyer may reasonably request in order to prepare the
Proposed Allocation Statement contemplated by subsection 3(c)(1) above and any tax
returns for taxable periods beginning on or after the Closing Date. No party shall
take any position (whether in audits, tax returns or otherwise) that is
inconsistent with such Final Allocation Determination, unless required to do so by
applicable Legal Requirement.
(d) Proration; Other Closing Date Adjustments.
(1) Except as otherwise specifically provided in this Agreement, it is the
intention of the parties that Seller will operate the Branches for its own account
until 11:59 p.m., E.D.T., on the Closing Date, and that Buyer shall operate the
Branches, hold the Assets and assume the Liabilities for its own account after the
Closing Date. Thus, except as otherwise specifically provided for in this
Agreement, items of income and expense shall be prorated as of 11:59 p.m., E.D.T,
on the Closing Date, and settled between Seller and Buyer on the Closing Date,
whether or not such adjustment would normally be made as of such time. Items of
proration will be handled at the Closing as an adjustment to the Purchase Price
unless otherwise agreed by the parties hereto.
(2) For purposes of this Agreement, items of proration and other adjustments
shall include, but not be limited to: (i) rental payments under the Branch Lease;
(ii) personal and real property Taxes and assessments; (iii) other Prepaid Expenses
and items and accrued but unpaid liabilities, as of the close of business on the
Closing Date; and (iv) safe deposit rental payments previously received by Seller.
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4. Payment of the Purchase Price.
(a) At the Closing, (i) if the Estimated Payment Amount as set forth on the Draft
Closing Statement is a positive amount, Seller shall pay to Buyer an amount in dollars equal
to such positive amount, or (ii) if the Estimated Payment Amount as set forth on the Draft
Closing Statement is a negative amount, Buyer shall pay to Seller an amount in dollars equal
to the absolute value of such negative amount.
(b) All payments to be made hereunder by one party to the other shall be made by wire
transfer of immediately available funds (to such account as the appropriate party shall
advise not later than two (2) Business Days prior to the Closing Date) on or before 12:00
noon E.D.T on the date of payment.
(c) At the Closing, Seller shall deposit the Escrow Amount into the Escrow Account which
shall be held by the Escrow Agent pursuant to the terms of the Escrow Agreement, with one
half of the Escrow Amount to be held for a term of twelve (12) months, and with one half of
the Escrow Amount to be held for a term of twenty-four (24) months, each such period
commencing on the Closing Date.
(d) If any instrument of transfer contemplated herein shall be recorded in any public
record before the Closing and thereafter the Closing does not occur, then at the request of
such transferring party the other party will deliver (or execute and deliver) such
instruments and take such other action as such transferring party shall reasonably request to
revoke such purported transfer.
5. Closing.
(a) The consummation of the transactions contemplated by this Agreement (the
“Closing”) will be held at Buyer’s offices at 0000 Xxxxx Xxxx, Xxxxx 000, Xxxxxxxxxx,
Xxxx 00000, as soon as reasonably practicable following the satisfaction or, where legally
permitted, the waiver of the conditions set forth in Section 7 and Section 8.
The Closing may occur on August 31, 2009 or September 14, 2009 at Buyer’s option and with
the consent of Seller, and in no event later than October 31, 2009 or such later date as may
be mutually agreed to by the Parties (such date, the “Closing Date”).
(b) Unless the parties agree pursuant to Section 16(b) that the conversion of the data
processing with respect to the Branches and the Assets and Liabilities will be performed
other than on the weekend immediately following the Closing Date, the Closing Date shall be
on a Friday and the conversion will be completed prior to the opening of business on the
following Monday.
6. Buyer’s and Seller’s Closing Deliverables.
(a) At the Closing, Seller shall deliver to Buyer the following:
(1) The deeds and all other instruments of conveyance as may be necessary to
sell, transfer and convey all right, title and interest in and to the Premises to
Buyer;
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(2) A xxxx of sale substantially in the form of Exhibit A attached
hereto pursuant to which the Personal Property shall be transferred to Buyer;
(3) Subject to Section 19, a lease assignment and assumption agreement
substantially in the form of Exhibit B attached hereto, with respect to
each of the Branch Lease (the “Lease Assignments”);
(4) The Assigned Contracts, Required Consents and other written agreements,
contracts, leases and other documentation that relate to the Assets and Liabilities
and the Safe Deposit Agreements;
(5) A certificate duly executed by the Secretary of Seller pursuant to which
such officer shall certify to (i) the due adoption by Seller’s board of directors
of resolutions attached to such certificate authorizing the execution and delivery
of this Agreement and the taking of all actions contemplated hereby, and (ii) the
incumbency and true signatures of those officers of Seller duly authorized to act
on its behalf in connection with the transaction contemplated by this Agreement and
to execute and deliver this Agreement and the taking of all actions contemplated
hereby on behalf of Seller;
(6) The Records;
(7) Such instruments of assumption of Liabilities as are required to
effectively assign and transfer the obligations for the Liabilities to the Buyer
and for Buyer to assume those Liabilities as provided herein, including, without
limitation, an assignment and assumption agreement in substantially the form set
forth on Exhibit C attached hereto with respect to the Liabilities, duly
executed by Seller (the “Assignment and Assumption Agreement”);
(8) A bring-down of Schedule 4(a)(i) and Schedule 8;
(9) Seller’s resignation as trustee or custodian, as applicable, with respect
to each XXX and/or Xxxxx Accounts, which is part of the Deposit Liabilities and
designation of Buyer as successor trustee or custodian with respect thereto, as
contemplated by Sections 2(c);
(10) The certificate of Seller’s Chief Executive Officer required by Section
8(f);
(11) The Draft Closing Statement (which shall have been furnished to Buyer no
later than the fifth Business Day prior to the Closing Date);
(12) Originals or copies of the Branch Lease fully executed by each party
thereto;
(13) Executed consents of the landlords and lessors, as applicable, necessary
to assign the Branch Lease to Buyer, subject to Section 19 hereof;
(14) Executed copies of the Unconditional Releases;
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(15) A power of attorney in substantially the form of Exhibit D
attached hereto;
(16) An ALTA form of owner policy of title insurance issued by the Title
Company for the Premises, naming Buyer as insured having an effective date as of
the Closing Date, in form and substance in accordance with Section 16(q);
(17) A certification of non-foreign status meeting the requirements of
Treasury Regulation 1.1445-2(b)(2), duly executed and acknowledged substantially in
the form of the sample certificates set forth in Treasury Regulation Section
1.1445-2(b)(2)(iv);
(18) Cash On Hand;
(19) Estimated Payment Amount, if any;
(20) A complete set of keys for each Branch, including but not limited to keys
for safe deposit boxes, vaults and automated teller machines and combinations for
all combination locks, appropriately tagged for identification and any vault
manuals or specifications with respect to vaults and automated teller machines,
together with a schedule listing same;
(21) A list, certified to by an authorized officer of Seller (acting in his or
her capacity as an officer of Seller and not as an individual), setting forth all
garnishments, similar court orders, tax liens and orders of any Governmental Entity
in effect with respect to the Deposit Liabilities;
(22) A payoff letter from the FHLB (in form and substance reasonably
satisfactory to Buyer) confirming that upon receipt of funds owed the FHLB and
securing the FHLB Pledged Loans, the FHLB releases its liens and security interests
in the FHLB Pledged Loans and authorizes release of the Loan Documents relating to
such FHLB Pledged Loans.
(23) If any of the Loans are pledged to the FR, a payoff letter from the FR
(in form and substance reasonably satisfactory to Buyer) confirming that upon
receipt of funds owed the FR and securing the FR Pledged Loans, the FR releases its
liens and security interests in the FR Pledged Loans and authorizes release of the
Loan Documents relating to such FR Pledged Loans.
(24) Such other Assets as shall be capable of physical delivery; and
(25) Such other documents as the parties may determine are reasonably
necessary to consummate the transactions contemplated hereby.
13
(b) At the Closing, Buyer will deliver to Seller the following:
(1) Certified copies of resolutions of Buyer’s board of directors authorizing
the execution and delivery of this Agreement and the consummation of the
transactions set forth in this Agreement;
(2) Such instruments of assumption of Liabilities as are required to
effectively assign and transfer the obligations for the Liabilities to the Buyer
and for Buyer to assume those Liabilities as provided herein, including, without
limitation, the Assignment and Assumption Agreement, duly executed by Buyer;
(3) The certificate of Buyer’s Chief Executive Officer as required by Section
7(f);
(4) Evidence of the Buyer Regulatory Approvals and the satisfaction of all
required conditions of such Buyer Regulatory Approvals;
(5) Buyer’s acceptance of its appointment as successor trustee or custodian,
as applicable, of the XXX and/or Xxxxx Accounts, which are part of the Deposit
Liabilities and the assumption of the fiduciary obligations of the trustee or
custodian with respect thereto, as contemplated by Section 2(c);
(6) the Estimated Payment Amount, if any; and
(7) Such other documents as the parties may determine are reasonably necessary
to consummate the transactions contemplated hereby.
(c) Loan Documents and Loan Files.
(1) Not later than three (3) Business Days following the Closing Date, Seller
shall deliver to Buyer or its designee the Loan Files and Loan Documents
(reasonably organized and cataloged), in imaged format, and no later than ten (10)
Business Days following the Closing Date, Seller shall deliver to Buyer or its
designee the original hard copies of the Loan Agreements and Loan Documents
(reasonably organized and cataloged). In addition, the parties agree that the
information, promissory notes, other Loan Documents, Loan Agreements and other
documents or instruments necessary to complete the deliveries in Section
6(a)(7) may not be available until immediately prior to or after the Closing.
Accordingly, upon completion of the documents or instruments necessary to complete
the deliveries in Section 6(a)(7) and delivery of same to Seller, Seller agrees to
promptly execute such documents and to deliver same to Buyer as expediently as
possible, but in no event later than five (5) Business Days after Seller’s receipt
of same. The parties hereto agree that failure to timely transfer the Loan
Agreement, Loan Documents and the documents and instruments necessary to complete
the deliveries in Section 6(a)(7) as set forth herein, shall entitle Buyer to
exercise its rights and remedies under this Agreement, and under applicable law.
Seller shall have no responsibility or liability for the Loan Files and Loan
Documents from and after the time such files are delivered by Seller to Buyer or to
an independent third
14
party designated by Buyer for shipment to Buyer. Seller shall not be
responsible for the cost of delivering any Loan Files or Loan Documents located at
the Branches at the Closing to any other location designated by the Buyer. Buyer
and Seller shall share equally in the cost of delivering any and all Loan Files or
Loan Documents that must be shipped to the Branches in connection with the Closing.
(2) Promptly upon execution of this Agreement, Buyer shall provide Seller in
writing with the exact name to which the Loans are to be endorsed, or whether any
Loans should be endorsed in blank. Seller will use its reasonable best efforts to
complete such endorsements and deliver the Loan Documents, along with appropriate
assignments of real property security instruments in recordable form and
assignments of financing statements, at the Closing.
(d) Collateral Assignments and Filing. Seller shall take all such reasonable
actions as requested by Buyer to assist Buyer in obtaining the valid perfection of a lien or
security interest in the collateral, if any, securing each Loan sold on the Closing Date in
favor of Buyer or its designated assignee as secured party. Any such action shall be at the
sole expense of Buyer, and Buyer shall reimburse Seller for all reasonable third party costs
incurred in connection therewith.
(e) Premises Filings. On the Closing Date, Seller and Buyer shall file or
record, or cause to be filed or recorded, any and all documents necessary in order that the
legal and equitable title to Premises as provided herein be duly vested in Buyer.
7. Conditions Precedent to Seller’s Obligations. The obligations of Seller to
consummate the transactions contemplated by this Agreement are, at the option of Seller, subject to
the following conditions precedent that, at or before Closing:
(a) The Buyer Regulatory Approvals shall have been made or obtained and shall remain in
full force and effect, and all statutory waiting periods applicable to the transactions
contemplated hereby shall have expired or terminated;
(b) Buyer shall have duly and timely performed its covenants and agreements required by
this Agreement to be performed on or prior to the Closing Date in all material respects;
(c) Each of the representations and warranties of Buyer contained or referred to in this
Agreement that are qualified as to materiality shall be true and correct and any such
representations and warranties that are not so qualified shall be true and correct in all
material respects, in each case, at the Closing as though made at the Closing (except to the
extent such representations and warranties speak of an earlier date);
(d) No Governmental Entity of competent jurisdiction shall have enacted, issued,
promulgated, enforced or entered any Legal Requirement or Order (whether temporary,
preliminary or permanent), which is in effect and which prohibits or makes illegal, or
materially restricts, the consummation of the transactions contemplated by this Agreement or
materially alters the terms of this Agreement;
15
(e) No Legal Proceedings shall have been instituted against Buyer or Seller where the
determination of liability against such party would reasonably be expected to have a Material
Adverse Effect or a material and adverse effect on the ability of such party to consummate
the transactions contemplated by this Agreement; and
(f) There shall have been delivered to Seller a certificate confirming items (a)-(c)
above, dated as of the Closing Date, and signed on behalf of the Buyer by its Chief Executive
Officer.
8. Conditions Precedent to Buyer’s Obligations. The obligations of Buyer to
consummate the transactions contemplated by this Agreement are, at the option of Buyer, subject to
the following conditions precedent that, at or before Closing:
(a) The Seller Regulatory Notices shall have been made or obtained and shall remain in
full force and effect, and all statutory waiting periods applicable to the transactions
contemplated hereby shall have expired or terminated, and no such Seller Regulatory Approval
shall have resulted in the imposition of a Materially Burdensome Regulatory Condition;
(b) Seller shall have duly and timely performed its covenants and agreements required by
this Agreement to be performed by Seller on or prior to the Closing Date in all material
respects;
(c) Each of the representations and warranties of Seller contained or referred to in
this Agreement that are qualified as to materiality shall be true and correct and any such
representations and warranties that are not so qualified shall be true and correct in all
material respects, in each case, at the Closing as though made at the Closing (except to the
extent such representations and warranties speak of an earlier date);
(d) No Governmental Entity of competent jurisdiction shall have enacted, issued,
promulgated, enforced or entered any Legal Requirement or Order (whether temporary,
preliminary or permanent), which is in effect and which prohibits or makes illegal, or
materially impacts, the consummation of the transactions contemplated by this Agreement or
materially alters the terms of this Agreement;
(e) No Legal Proceedings shall have been instituted against Buyer or Seller where the
determination of liability against such party would reasonably be expected to have a Material
Adverse Effect or a material and adverse effect on the ability of such party to consummate
the transactions contemplated by this Agreement;
(f) There shall have been delivered to Buyer a certificate confirming items (a)-(c)
above, dated as of the Closing Date, and signed on behalf of the Seller by its Chief
Executive Officer;
(g)
(1) Buyer shall have obtained a Phase I Environmental Site Assessment report
(“Buyer’s Phase I Report”), which shall be at Buyer’s expense, prepared
after the date hereof. Buyer shall report to Seller the results of
16
the Buyer’s
Phase I Report, together with any objections (an “Objection”) to any matter
related to the environmental condition of the Premises or the Branches (other than
information made available to Buyer by Seller prior to the date of this Agreement)
that Buyer reasonably believes could, individually, or in the aggregate, (i)
materially and adversely affect Buyer’s continued use of the Premises or the
Branches as a branch, or (ii) have a Material Adverse Effect on Buyer. Buyer shall
provide the report together with any Objections to Seller no later than forty-five
calendar days after the date of this Agreement. If Buyer raises any Objections,
Seller and Buyer shall address such Objection as set forth in subsection (2) below.
(2) If Buyer discovers any Objections that would, individually or in the
aggregate, require the expenditure of $100,000 or more to remediate, as determined
by Buyer in its reasonable discretion, Buyer shall promptly give written notice
thereof to Seller describing the Objection or Objections in detail and Seller shall
have the obligation to pay up to the sum of $100,000 to cure such Objection(s)
prior to the Closing, if cure is reasonably possible. If Seller is unable or
unwilling to cure any such Objection to Buyer’s reasonable satisfaction, then in
Buyer’s sole and absolute discretion, and upon written notice to Seller, such
notice to be received by Seller no later than ten (10) calendar days after Buyer is
notified in writing of Seller’s inability or unwillingness to cure any such
Objection: (a) Buyer shall receive title or a leasehold interest in the Premises or
Branch Lease, respectively, in their then existing condition with a corresponding
adjustment to the Purchase Price that is mutually agreeable to both parties,
provided, that any such adjustment to Purchase Price shall not exceed $100,000, or
(b) Buyer may terminate this Agreement, or (c) Seller shall keep title to the
Premises related to such Objection(s) and Buyer may lease such Premises from Seller
on terms mutually agreeable to both parties with a corresponding mutually agreeable
adjustment to the Purchase Price.
(h) All Title Objections shall have been cured, waived by Buyer or become an Insured
Exception, in each case, as contemplated by Section 16(q); and
(i) In the aggregate, the amount of principal and accrued interest outstanding on the
Loans as of the Closing Date must exceed the Loan Floor.
(j) Seller shall have delivered the closing deliverables set forth in Section
6(a).
9. Representations and Warranties of Seller. Seller represents and warrants to Buyer
as follows, subject to the exceptions disclosed in writing in the Seller Disclosure Schedule and
delivered as of the date hereof:
(a) Corporate Organization. Seller is an Indiana state chartered commercial
bank and trust company duly organized and validly existing under the laws of the State of
Indiana, and is entitled to own its properties where such properties are now owned and
operated and has the requisite power and authority to conduct its business as now being
17
conducted at the Branches. Seller is an insured depository institution pursuant to the
provisions of the Federal Deposit Insurance Act, as amended.
(b) Financial Statements; Call Reports. The Seller has previously provided or,
as applicable, will provide, to Buyer true, correct and complete copies of:
(1) The audited consolidated balance sheets of Seller Parent as of
December 31, 2008 and 2007 and the related audited consolidated statements of
operations, stockholders’ equity and comprehensive income (loss) and cash flows for
the years ended December 31, 2008 and 2007, inclusive (collectively the
“Audited Financial Statements”), accompanied by the audit report of Ernst &
Young LLP;
(2) The unaudited consolidated balance sheets of Seller Parent as of March 31,
2009 and the related unaudited consolidated statements of operations, stockholders’
equity and comprehensive income (loss) and cash flows for the period ended March
31, 2009 and the unaudited consolidated balance sheets of Seller and Seller Parent
and the related unaudited consolidated statements of operations, stockholders’
equity and comprehensive income (loss) and cash flows of Seller Parent for each
calendar quarter ended between March 31, 2009 and the Closing Date (collectively
the “Unaudited Financial Statements” and together with the Audited
Financial Statements, the “Financial Statements”);
(3) The December 31, 2008 Call Report of the Seller and the Call Report of the
Seller for each calendar quarter ended between December 31, 2008 and the Closing
Date submitted to the Board of Governors of the Federal Reserve System
(collectively the “Reports”).
The Financial Statements and the Reports were prepared on a consistent basis and, with
respect to the Financial Statements, in accordance with GAAP (subject, in the case of the
Unaudited Financial Statements, to recurring audit adjustments, normal in nature and not
material in amount, and the absence of notes to the financial statements). The Financial
Statements and the Reports fairly and accurately present the financial condition and results
of operations of Seller Parent and Seller in all material respects for their respective
fiscal periods or as of their respective dates, are correct and complete and are consistent
with the books and records of Seller Parent and Seller. The books and records of Seller
Parent and Seller are correct and complete in all material respects, and have been, and are
being, maintained in all material respects in accordance with GAAP and any other Legal
Requirement and accounting requirements.
(c) Title to Assets. Seller is the lawful owner of, or in the case of leased
Assets, has a valid leasehold interest in, each of the Assets, and the Assets are not subject
to any Lien other than Permitted Liens. Subject to and upon the execution of the documents of
transfer, conveyance and assignment by Seller as provided herein at the Closing, and the
receipt of the consents and approvals as set forth herein, Seller has the right to sell,
convey, transfer, assign and deliver to Buyer all of Seller’s right, title and interest in
and to the Assets free and clear of any Lien other than Permitted Liens and subject to the
terms and conditions hereof, on the Closing Date, Buyer will acquire good
18
and marketable
title to all of the Assets free and clear of any Lien other than Permitted Liens.
(d) Premises. Other than the Premises, the Assets do not include any ownership
interest in real property. The Premises constitute all of the real estate owned or leased by
Seller on which Seller maintains the Branches.
(e) Environmental Matters.
(1) The Premises have been operated by Seller in material compliance with all
Applicable Environmental Laws, including but not limited to Legal Requirements
relating to the use, handling, release, storage and disposal of Hazardous
Substances. Seller has not, in violation of any Legal Requirement, used, handled,
stored or disposed of Hazardous Substances on the Premises or elsewhere, nor has
Seller, in violation of any Legal Requirement, discharged or released any Hazardous
Substances upon the Premises or elsewhere, in violation of any Applicable
Environmental Laws or that would require remedial action or otherwise impose
liability. To Seller’s Knowledge, and except as set forth in Schedule 9(e)
of the Seller Disclosure Schedule, no other party has, in violation of any Legal
Requirement, engaged in any such use, handling, storage, disposal, discharge or
release of any Hazardous Substance on the Premises. To Seller’s Knowledge, except
as set forth in Schedule 9(e) of the Seller Disclosure Schedule, the
Premises have been and are free of any Hazardous Substances, soil, soil vapor, and
groundwater contamination in violation of any Legal Requirement, or any underground
or above-ground storage tanks, disposal pits, landfills, surface impoundments,
clarifiers, leachfields, septic tanks, and xxxxx.
(2) Seller has maintained secured creditor liability exemptions pursuant to 42
U.S.C. § 9601(20) and similar laws under applicable states’ statutes, including but
not limited to not participating in management nor otherwise “controlling” or
“directing” any borrower such that Seller would be subject to any liability with
respect to any environmental matters in connection with any security, borrower’s
operations or any borrower’s property; and Seller has not foreclosed on a loan or
taken over security in a manner that would result in liability under Environmental
Laws, including but not limited to that it has taken “reasonable steps” to divest
itself of any such properties at the earliest practicable, commercially reasonable
time, on commercially reasonable terms.
(3) Except as set forth in Schedule 9(e) of the Seller Disclosure
Schedule, there are no legal, administrative, arbitration or other proceedings,
lawsuits, notices of violations, claims, actions, causes of action, environmental
investigations or remediation activities, private or governmental, of any nature
seeking to impose, or that reasonably could be expected to result in the
imposition, on the Seller of any liability or obligation under any Applicable
Environmental Laws, pending or, to the Knowledge of the Seller, threatened against
the Seller. To the Knowledge of the Seller, there is no reasonable basis for any
such proceeding, claim, action or governmental investigation that would impose any
liability or obligation on the Seller. Neither the Seller nor the
19
Premises is
subject to any agreement, order, award, judgment, decree, letter or memorandum by
or with any court, governmental authority, regulatory agency, arbitrator, or third
party imposing any unsatisfied liability or unmet obligation pursuant to or under
any Applicable Environmental Laws.
(f) Loans.
(1) All Loans have been made and maintained (including the risk rating of the
Loans) in the ordinary course of business, in accordance with Seller’s customary
lending standards and written loan policies and in compliance with all applicable
Legal Requirements. No Loan is usurious and each Loan either meets or is exempt
from any usury laws or regulations. With respect to the Loans, Seller has complied
in all material respects with any applicable federal or state laws, regulations or
other requirements on consumer credit, equal credit opportunity and
truth-in-lending.
(2) Seller’s loan files for the Loans (the “Loan Files”) contain all
originally executed notes, leases and other evidences of any indebtedness,
including without limitation all originally executed loan agreements, loan
participation agreements and certificates, control agreements, security agreements,
mortgages, guarantees, UCC financing statements and similar documents evidencing
collateral or other financial accommodations relating to the Loans (the “Loan
Documents”). The Loan Files accurately reflect the payment history through the
applicable date thereof, the outstanding balance of the Loan, as of the date
indicated therein, and all receipts pertaining to the Loan, from the Obligor(s)
thereof and all credits to which such Obligor(s) are entitled as of the date
indicated therein.
(3) No taxes or other liability of Seller shall accrue against or be collected
from Buyer out of any Loan by reason of the purchase thereof by Buyer. Seller has
paid or caused to be paid any and all license, franchise, intangible, stamp or
other tax or fee due and owing to any state where a Loan originated, or any
political subdivision thereof, arising from or relating to the acquisition,
collection or holding of any Loan by the Seller.
(4) Neither Seller nor any of its agents, officers, employees or
representatives has been guilty of any civil or criminal fraud with respect to the
creation of any Loan or with respect to the transfer, assignment and sale of the
same to Buyer hereunder.
(5) No Loan is (i) thirty (30) days or more past due in the payment of any
required principal or interest, (ii) on non-accrual status, (iii) classified, or
(iv) otherwise an Excepted Loan. All Loan Documents are correct in amount. To the
Knowledge of Seller, the Loan Documents contain genuine signatures of the parties
thereto, including, but not limited to makers and endorsers and of Seller. The
Loan Documents are supported by adequate consideration and are enforceable by Buyer
or its successors and assigns in accordance with their respective terms (except as
such enforceability may be limited by bankruptcy or
20
creditors’ relief laws of
general application), represent the valid and legally binding obligation of the
obligor, maker, co-maker, guarantor, endorser or debtor (such Person referred to as
an “Obligor”) thereunder, and are evidenced by legal, valid and binding
instruments executed by the Obligor, each of which at the time of such execution
had, to the Knowledge of Seller, capacity to contract, and none of the obligations
represented by the Loan Documents have been modified, subordinated, altered,
forgiven, discharged or otherwise disposed of except as indicated by the Loan
Documents and contained among the Loan Files, as applicable, or as a result of
bankruptcy or other debtor’s relief laws of general application. No Obligor has
any right of rescission pursuant to the Truth in Lending Act or other Legal
Requirement which has not expired or otherwise terminated. To the Knowledge of
Seller, no maker, signatory or guarantor on any Loan is in bankruptcy and none of
the Loans are subject to any offsets or claims of offset, or claims of other
liability on the part of Seller.
(6) Except for FHA loans, no Loans have been sold subject to an agreement to
repurchase.
(7) The servicing practices of Seller used with respect to the Loans have been
prudent, safe and sound servicing practices and consistent with commercially
reasonable practices in the industry and have been in compliance in all material
respects with all Legal Requirements.
(8) No borrower, customer or other party in connection with the Loans has
notified Seller, or has asserted against Seller, in each case in writing, any
“lender liability” or similar claim.
(9) Except as set forth on Schedule 9(f) of the Seller Disclosure
Schedule, the Seller has made no commitment to make or modify the terms and
conditions of any Loan other than as set forth in the Loan Files. Except as set
forth on Schedule 9(f) of the Seller Disclosure Schedule, no Obligor under
any Loan is entitled to any further advances of loan proceeds. As of the Closing,
no Loan is cross-collateralized with any other loan. Any insurance with respect to
any Loan is in full force and effect and Seller has complied with all applicable
provisions of any insurance contract or applicable Legal Requirement with respect
to such insurance.
(10) With respect to any Loan secured by real property:
| i) | the mortgage is a valid and subsisting lien on the property described in it; | ||
| ii) | the mortgaged property is free and clear of all encumbrances and liens having priority over the mortgage except for senior loans described in the Loan Documents and liens for real estate taxes and special assessments, that are not yet due and payable; | ||
| iii) | the Loan Documents include either an opinion of counsel or a mortgage title insurance policy insuring the mortgage and such |
21
| title insurance policy is on a current ALTA form (or other generally acceptable form) issued by a generally acceptable insurance company; | |||
| iv) | at the time of origination, the mortgaged property was, and Seller has not received written notification that the mortgaged property is not, free and clear of all mechanic’s liens, materialmen’s liens or similar types of liens or the mortgage title insurance policy provides Buyer with substantially the same protection as this warrant; | ||
| v) | all taxes, government assessments, insurance premiums, water, sewer and municipal charges, leasehold payment or ground rents that have become due and payable with respect to the mortgaged property have been paid or an escrow of funds sufficient to pay them has been established; | ||
| vi) | Seller has no Knowledge that any improvement on the mortgaged property is in violation of any applicable zoning law or regulation; | ||
| vii) | Except as set forth on Schedule 9(f) of the Seller Disclosure Schedule, Seller has no Knowledge that the mortgaged property is damaged by fire, wind or other cause of loss and there are no proceedings pending for the partial or total condemnation of the property; | ||
| viii) | to Seller’s Knowledge, any improvements that are included in the appraised value of the mortgaged property are totally within the property’s boundaries and building restriction lines and no improvements on adjoining property encroach on the mortgaged property; | ||
| ix) | if the Loan is secured by a single family residence and was closed on legal documents other than the current Xxxxxx Xxx/Xxxxxxx Mac uniform instruments, then with respect to each such Loan, Seller hereby makes the representations and warranties contained in Section A2-2.1-03 of Chapter A2-2 of the Xxxxxx Mae Single Family 2009 Selling Guide; | ||
| x) | except as set forth on Schedule 9(f)(x) of the Seller Disclosure Schedule, a casualty insurance policy on the mortgaged property is in effect, which is written by a generally acceptable insurance company and provides fire and extended coverages for an amount at least equal to the amount required by Seller’s loan policies, and, provided, that with respect to the mortgaged properties listed on Schedule 9(f)(x) of the Seller |
22
| Disclosure Schedule, Seller shall have thirty (30) days from the execution of this Agreement to obtain such casualty insurance, and in the event and to the extent Seller does not obtain casualty insurance with respect to a mortgaged property listed on Schedule 9(f)(x) of the Seller Disclosure Schedule within thirty (30) days of the execution of this Agreement, such mortgaged properties shall be deemed not to be listed on Schedule 9(f)(x) of the Seller Disclosure Schedule (for purposes of determining whether a breach has occurred and for purposes of calculating the amount of the damages) and therefore Seller shall be liable to Buyer for any Losses that result from the breach of this representation and warranty with respect to such mortgaged properties in accordance with Section 20 of this Agreement; | |||
| xi) | except as set forth on Schedule 9(f)(xi) of the Seller Disclosure Schedule, a flood insurance policy written by a generally acceptable insurance company, which policy meets current guidelines of the Federal Insurance Administration and is for an amount at least equal to the amount required by Seller’s loan policies, is in effect on the mortgaged property if any part of it is in an area listed in the Federal Register by the Federal Emergency Management Agency as an area with special flood hazards, and if insurance is available, and, provided, that with respect to the mortgaged properties listed on Schedule 9(f)(xi) of the Seller Disclosure Schedule, Seller shall have thirty (30) days from the execution of this Agreement to obtain such flood insurance, and in the event and to the extent Seller does not obtain flood insurance with respect to a mortgaged property listed on Schedule 9(f)(xi) of the Seller Disclosure Schedule within thirty (30) days of the execution of this Agreement, such mortgaged properties shall be deemed not to be listed on Schedule 9(f)(xi) of the Seller Disclosure Schedule (for purposes of determining whether a breach has occurred and for purposes of calculating the amount of the damages) and therefore Seller shall be liable to Buyer for any Losses that result from the breach of this representation and warranty with respect to such mortgaged properties in accordance with Section 20 of this Agreement; | ||
| xii) | to Seller’s Knowledge, there is no material litigation, proceeding or governmental investigation pending, or any order, injunction or decree outstanding, existing or relating to the mortgaged property; | ||
| xiii) | to Seller’s Knowledge, the mortgaged property has never been used for the storage, treatment or disposal of any material amount of Hazardous Substances (other than by tenants in the ordinary course of tenancy or the owner in the ordinary course of business, and such storage, treatment or disposal of Hazardous Substances is or was in all material respects in accordance with all applicable Legal Requirements), nor has such mortgaged property ever been listed by any governmental agency as containing any Hazardous Substance in violation of Legal Requirement unless such Hazardous Substance has been remediated; |
23
| xiv) | with respect to Loans secured by single family residences, the Loan Documents do not grant more favorable rights to the borrower on default and foreclosure, or less favorable rights to the note holder with respect to property insurance, leasehold interests, other liens on the mortgaged property, condemnation proceedings, or other proceedings that result in a full or partial taking of the property, or any other compensation, settlement, or award of damages that is the result of damage to, or destruction of, the mortgaged property than those granted in the Xxxxxx Xxx/Xxxxxxx Mac standard uniform instruments for the applicable jurisdiction(s); | ||
| xv) | if the mortgaged property is a single family residence or a multifamily apartment project and the Loan is a permanent loan, then the Loan meets the underwriting requirements and otherwise conforms to all of the applicable requirements contained in the Xxxxxx Mae Selling and Servicing Guide (for those Loans secured by single family residences) and the Xxxxxx Xxx Delegated Underwriting and Servicing Guide (for those Loans secured by multifamily apartment projects) | ||
| xvi) | the Loan Documents expressly allow the noteholder to advance at any time sums for unpaid insurance premiums, property taxes, or any other payments necessary to protect the value of the mortgaged property or the noteholder’s rights in the mortgaged property and permit the noteholder to collect such amounts from the borrower on a deferred basis; and | ||
| xvii) | the Loan Documents obligate the borrower to maintain the mortgaged property in a way that prevents deterioration and to repair promptly any damage to the mortgaged property, whether or not such damage is covered by insurance. |
(11) The Seller has properly perfected or caused to be properly perfected
valid and enforceable security interests, liens, or other interests in any
collateral securing the Loans, as applicable, and such proper perfection continues
to be in effect, such security interests, liens, or other interests are assignable
and have the priority reflected in the Seller’s books and records and each such
Loan contains customary and enforceable provisions such that the rights and
remedies of the holder thereof shall be adequate for the practical realization
against any collateral securing such Loan.
(12) The Seller and any other party that held any of the Loans were, at all
times during which the holder held the Loan, as applicable, authorized to transact
business in the jurisdiction where any real property securing the applicable Loan
is located. However, if Seller or any other party that held a Loan was not
authorized to do business in the jurisdiction where any real property securing an
applicable Loan is located, then Seller represents and warrants that none of the
following activities of Seller or other parties constituted doing business in that
jurisdiction: lending the mortgage funds,
24
acquiring the Loan, holding the Loan, or
transferring the Loan in whole or to the extent of a participation interest. The
Seller is the sole owner and holder of the Loans, has all power and authority to
hold the Loans and has good and marketable title to the Loans free and clear of any
Lien other than Permitted Liens. The Seller has the requisite power and authority
to sell and assign the Loans to Buyer as contemplated hereby and Seller’s right to
sell and assign is not subject to any other party’s interest or to an agreement
with any other party.
(g) Deposit Liabilities. The Deposit Liabilities are genuine and enforceable
obligations of Seller and have been originated or extended and administered in all material
respects in compliance with the documents governing the relevant type of Deposit Liabilities
and all Legal Requirements, including without limitation, the Truth in Savings Act and
regulations promulgated thereunder. The Deposit Liabilities are insured by the FDIC through
the Deposit Insurance Fund to the fullest extent provided for by applicable Legal Requirement
and all premiums and assessments required to be paid in connection with such insurance have
been paid when due. All interest has been properly accrued on the Deposit Liabilities and
Seller’s records accurately reflect such accrual of interest. Except as set forth on
Schedule 9(g) of the Seller Disclosure Schedule, Seller does not have any Knowledge
of any loss or potential loss of any material business or customers related to the Loans or
the Deposit Liabilities.
(h) Branch Business.
(1) The business at the Branches has been conducted in material compliance
with Seller’s policies and procedures and in material compliance with all Legal
Requirements.
(2) Except as set forth on Schedule 9(h) of the Seller Disclosure
Schedule, there are no Legal Proceedings or Orders entered, promulgated or
pending, or, to the Knowledge of Seller, threatened, against or affecting the
Assets, Liabilities, or any of the Branches, or the business conducted by Seller at
any of the Branches, at law or in equity or otherwise, and there are no unsatisfied
judgments of record against Seller. Except as set forth on Schedule 9(h) of
the Seller Disclosure Schedule, there are no obligations or liabilities (whether or
not accrued, contingent or otherwise) or, to the Knowledge of Seller, facts or
circumstances that would reasonably be expected to result in any claims against or
obligations or liabilities of Seller with respect to the Branches, the Assets or
Liabilities.
(i) Regulatory Approval; Regulatory Agreement.
(1) Except as set forth on Schedule 9(i)(1) of the Seller Disclosure
Schedule, there are no pending, or, to the Knowledge of Seller, threatened, Legal
Proceedings involving Seller Parent or Seller pending before any Governmental
Entity that would reasonably be expected to (a) have the effect of hindering or
delaying the Closing, (b) affect the ability of the parties hereto to consummate
the transactions contemplated hererby, or (c) impose restrictions,
25
limitations or
obligations on the Assets, Liabilities, Branches or the conduct of the business by
Buyer at the Branches following the Closing.
(2) Neither Seller Parent nor Seller has received any indication from any
Governmental Entity that such Governmental Entity would oppose or refuse regulatory
approval regarding the execution of this Agreement by Seller Parent and Seller and
the consummation of the transactions contemplated herein by Seller Parent and
Seller, and to the Knowledge of Seller there is no reason relating to Seller or
Seller Parent for any such opposition or approval.
(3) Except as set forth on Schedule 9(i)(3) of the Seller Disclosure
Schedule, neither Seller nor Seller Parent is subject to any cease-and-desist or
other order issued by, or a party to any written agreement, consent agreement or
memorandum of understanding with, or a party to any commitment letter or similar
undertaking to, or subject to any order or written directive by, or been a
recipient of any supervisory letter from, or has adopted any board resolutions at
the request of, any Governmental Entity (each of the foregoing, a “Regulatory
Agreement”), nor has the Seller been advised in writing by any Governmental
Entity that it is considering issuing or requesting any Regulatory Agreement that,
in each case, would reasonably be expected to (a) have the effect of hindering or
delaying the Closing, (b) affect the ability of the parties hereto to consummate
the transactions contemplated hereby, or (c) impose restrictions, limitations or
obligations on the Assets, Liabilities, Branches or the conduct of the business by
Buyer at the Branches following the Closing. The Regulatory Agreements set forth
on Schedule 9(i)(3) of the Seller Disclosure Schedule remain in full force
and effect as of the date hereof.
(4) Seller has been in compliance and continues to be in material compliance
as of the date hereof with the Regulatory Agreements set forth on Schedule
9(i)(3) of the Seller Disclosure Schedule.
(j) Power, Authority and Enforceability. Seller has the corporate power and
authority to enter into, deliver and perform this Agreement and any instruments or other
documents executed pursuant hereto. This Agreement and any instruments or other documents
executed pursuant hereto, and the execution, delivery and performance hereof and thereof have
been duly authorized and approved by all necessary corporate action on the part of Seller.
This Agreement has been duly and validly executed and delivered by Seller and, assuming due
authorization, execution and delivery by Buyer, constitutes a valid and binding obligation of
Seller, enforceable against Seller in accordance with its terms, except as enforcement may be
limited by receivership, conservatorship and supervisory powers of bank regulatory agencies
generally, as well as bankruptcy, insolvency, reorganization, moratorium or other laws of
general applicability relating to or affecting creditors’ rights, or the limiting effect of
rules of law governing specific performance, equitable relief and other equitable remedies or
the waiver of rights or remedies.
26
(k) No Conflict. The execution, delivery and performance of this Agreement and
any instruments and documents executed pursuant hereto by Seller do not, and will not:
(1) violate any provision of the organizational documents of Seller,
(2) subject to the receipt of all regulatory approvals required by this
Agreement as set forth in Schedule 9(k)(2) of the Seller Disclosure
Schedule (the “Seller Regulatory Notices”), constitute a breach or
violation of, or default under, any Legal Requirement, Order or Governmental
Authorization to which Seller is subject, which breach, violation or default,
individually or in the aggregate, would reasonably be expected to have a Material
Adverse Effect, or
(3) subject to the receipt of all consents required by this Agreement as set
forth on Schedule 9(k)(3) of the Seller Disclosure Schedule (the
“Consents” and together with the Seller Regulatory Notices collectively
referred to as, the “Required Consents”), constitute a breach or violation
of, or default under, any agreement or instrument of Seller or to which Seller is
subject or by which Seller is otherwise bound, which breach, violation or default,
individually or in the aggregate, would reasonably be expected to have a Material
Adverse Effect, or
(4) result in the creation of any Lien upon any of the Assets.
(l) Licenses and Permits. Seller has all material Governmental Authorizations
necessary for the lawful conduct of its business at each of the Branches as now conducted
and, except as would not individually or in the aggregate be reasonably expected to have a
Material Adverse Effect, all such Governmental Authorizations, are valid and in good standing
and, to the Knowledge of Seller, are not subject to any suspension, modification or
revocation or proceedings related thereto.
(m) Required Consents. Other than the Seller Regulatory Notices, no notices,
reports or other filings are required to be made by Seller with, nor are any consents,
registrations, approvals, permits or authorizations required to be obtained by Seller from,
any Governmental Entity in connection with the execution and delivery of this Agreement by
Seller and the consummation of the transactions contemplated by this Agreement by Seller.
Other than the Consents, there are no consents or approvals of any third party required to be
obtained in connection with the execution and delivery of this Agreement by Seller and the
consummation of the transactions contemplated by this Agreement by Seller.
(n) Personal Property. Seller has valid title to the Personal Property, free
and clear of any Liens other than Permitted Liens, and has the right to sell, convey,
transfer, assign and deliver to Buyer all of the Personal Property. The Personal Property is
in good working order, ordinary wear and tear excepted, and is fit for the purpose it is used
for by Seller in the conduct of the business of the Branches.
(o) Employment; Labor.
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(1) Seller has provided or made available to Buyer a complete list of all
employees employed at the Branches as of the date hereof and a true and correct
copy of each such employee’s complete employment file. All employment files have
been maintained in compliance in all material respects with all applicable Legal
Requirements regarding employment. Except as set forth on Schedule 9(o) of
the Seller Disclosure Schedule, there are no employment agreements, non-compete
agreements or other contracts or arrangements for the performance of personal
services at the Branches, with employees employed or independent contractors or
consultants retained, at the Branches.
(2) Seller has not received services in connection with the operation of any
of the Branches from any individual whom Seller treated as an independent
contractor, but who should have been treated as a common-law employee.
(3) Seller has complied with all Legal Requirements relating to the employment
of its employees at the Branches in all material respects, including any provisions
thereof relating to: (i) wages, hours, bonuses, commissions, termination pay,
vacation pay, sick pay, fringe benefits, employee benefits, health insurance
continuation (COBRA), and the payment and/or accrual of the same and all insurance
and all other costs and expenses applicable thereto; (ii) unlawful, wrongful, or
retaliatory or discriminatory employment or labor practices; (iii) occupational
safety and health standards; or (iv) plant closing, mass layoff, immigration,
workers’ compensation, disability, unemployment compensation, whistleblower and
other employment Legal Requirements.
(4) Seller has not engaged in any “mass layoff” or “plant closing” (as defined
by applicable federal and state WARN laws) within the six months prior to the
Closing for any of the Branches, either individually or collectively.
(5) Seller is not a party to any collective bargaining agreement or other
labor union contract applicable to its employees. There are and have been no
strikes, slowdowns, work stoppages or lockouts, by or with respect to any of the
employees of Seller in connection with the operation of the business. Seller has
not agreed to recognize any union or other collective bargaining representative,
and no union or other collective bargaining representative has been certified as
the exclusive bargaining representative of any of Seller’s employees. There is no
current union representation matter involving employees of Seller, and, to Seller’s
Knowledge, there is no activity or proceeding of any labor organization (or
representative thereof) or employee group to organize any such employees.
(6) Except as set forth on Schedule 9(o) of the Seller Disclosure
Schedule, no employee of Seller at any of the Branches is party to, or is otherwise
bound by, any agreement, including any confidentiality, non-competition,
non-solicitation, or proprietary rights agreement between such employee and any
other Person which materially adversely affects or will materially adversely affect
the employee’s ability to perform duties as an employee of Buyer following the
Closing.
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(7) No employee of Seller at any of the Branches has asserted or threatened to
assert any claim against Seller or any of Seller’s officers, directors, or managers
(whether under Legal Requirement, any employment agreement or otherwise) on account
of or for: (i) overtime pay; (ii) wages, salaries, bonuses or commissions; (iii)
vacations, sick leave, or time off or pay in lieu of vacation or sick leave or time
off; (iv) alleged unlawful, unfair, wrongful, retaliatory or discriminatory
employment or labor practices; (v) breach of contract arising under an individual
agreement or any other employment covenant whether express or implied; (vi) alleged
violation of any law regarding minimum wages, maximum hours of work, or meal and
rest periods; (vii) alleged violation of occupational safety and health standards;
(viii) alleged tort violations; or (ix) alleged violations of immigration, workers’
compensation, disability, unemployment compensation, protected leave,
whistleblower, or any other employment or labor relations laws.
(8) All employees of Seller at each of the Branches are authorized to work in
the United States and a Form I-9 has been properly completed and retained with
respect to each of Seller’s current and former employees at each of the Branches.
(9) The employees of Seller at the Branches who have (or have had) access to
confidential and/or proprietary information of Seller have executed confidentiality
agreements that adequately protect Seller’s interest therein;
(10) Except as set forth on Schedule 9(o) of the Seller Disclosure
Schedule, the employment of each employee of Seller at the Branches is terminable
at will without cost to Seller except for payment of accrued salaries or wages and
vacation pay. No current or former employee of Seller at the Branches has any
right to be rehired by Seller prior to its hiring an individual not previously
employed by Seller.
(11) All employees of Seller at the Branches have been or will have been, on
or before the Closing, paid in full by Seller for all earned wages, salaries,
bonuses, vacation pay, sick pay, and other compensation of any kind for services
performed on behalf of Seller up to and including the Closing Date, and will be
paid as soon as administratively possible following the Closing Date for all
commissions and incentives earned prior to the Closing Date.
(12) To Seller’s Knowledge, no officer or other key employee of Seller at the
Branches intends to terminate employment with Seller prior to the Closing. Seller
has not taken any action which was calculated to dissuade any present employees,
representatives or agents of Seller at the Branches from working for Buyer
following the Closing.
(p) Tax Matters. Except as set forth in Schedule 9(p) of the Seller
Disclosure Schedule:
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(1) Seller and each of its Affiliates has filed all material tax returns that
it is required to file with respect to the Branches or the Assets (taking into
account any extensions of a required filing date). All such tax returns were
correct and complete in all respects. All taxes owed by Seller or any of its
Affiliates (whether or not shown on any tax return) with respect to the Branches or
the Assets have been paid. Neither Seller nor any of its Affiliates is currently
the beneficiary of any extension of time within which to file any tax return with
respect to the Branches or the Assets. There are no Liens on any of the Branches
or the Assets that arose in connection with any failure (or alleged failure) to pay
any tax.
(2) Seller has withheld and paid all taxes required to have been withheld and
paid in connection with amounts paid or owing to any employee, independent
contractor, creditor, stockholder, or other third party with respect to the
Branches.
(3) There is no dispute or claim concerning any tax liability of Seller and
any of its Affiliates (including a claim made by an authority in a jurisdiction
where Seller does not file tax returns that Seller is or may be subject to taxation
by that jurisdiction) with respect to the Branches or the Assets either (A) claimed
or raised by any authority in writing or (B) as to which any of the directors and
officers (and employees responsible for tax matters) of Seller have Knowledge based
upon personal contact with any agent of such authority. Schedule 9(p) of
the Seller Disclosure Schedule lists all material federal, state, local and foreign
income tax returns filed for each of the last five (5) years with respect to
Seller, indicates any tax returns that have been audited, and indicates any tax
returns that currently are the subject of audit. Seller has delivered to the Buyer
correct and complete copies of all its income tax returns for the last five (5)
years, examination reports, and statements of deficiencies assessed against or
agreed to by Seller.
(4) Neither Seller nor any of its Affiliates has waived any statute of
limitations in respect of taxes or agreed to any extension of time with respect to
a tax assessment or deficiency, in each case with respect to the Branches or the
Assets, that will be binding on Buyer after the Closing.
(q) Intellectual Property.
(1) Set forth on Schedule 9(q)(1) of the Seller Disclosure Schedule is
a complete description of the Intellectual Property that will be licensed by Seller
to Buyer at Closing (the “Licensed IP”), including a true and complete list
of (i) all worldwide registrations made by or on behalf of the Seller of any
trademarks, service marks, Internet domain names or Internet or World Wide Web URLs
or addresses with any governmental authority or quasi-governmental authority,
including Internet domain name registries, and (ii) all applications,
registrations, filings and other formal written governmental actions made or taken
pursuant to applicable Legal Requirements by the Seller to secure, perfect or
protect its interest in the Licensed IP.
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(2) Seller owns, free and clear of any liens, all rights, title and interest
in and to all Licensed IP. To the Knowledge of Seller, the Licensed IP are valid
and subsisting, in full force and effect in all material respects, and have not
been canceled, expired or abandoned. Except as set forth on Schedule
9(q)(2) of the Seller Disclosure Schedule, no registration or application with
respect to any Licensed IP is subject to any maintenance fees or taxes or actions
falling due, including without limitation, the filing of an affidavit of use,
renewal or response to an official action, during the Phaseout Period. To the
Knowledge of Seller and Seller Parent, no Person is challenging, infringing on or
otherwise violating any right of Seller or Seller Parent with respect to any
Licensed IP. To the Knowledge of Seller and Seller Parent, in the four (4) years
immediately preceding the date of this Agreement, Seller has not received any
written notice of any pending, existing or threatened claim, action or proceeding
with respect to any Licensed IP and, to the knowledge of Seller and Seller Parent,
no such claim, action or proceeding is pending, existing or threatened, and to the
Knowledge of Seller and Seller Parent, no Licensed IP is being used or enforced in
a manner that would result in the abandonment, cancellation or unenforceability of
such Licensed IP or right.
(r) Assigned Contracts.
(1) Seller has made available to Buyer true, complete and accurate copies of
the Assigned Contracts, together with all amendments, modifications or supplements
thereto, including any assignments thereof.
(2) The Assigned Contracts are the valid and binding obligation of Seller, and
to Seller’s Knowledge, of each other party thereto; and, except as would not
reasonably be expected to have a Material Adverse Effect, there does not exist with
respect to Seller’s obligations thereunder, or, to Seller’s Knowledge, with respect
to the obligations of each other party thereto, any default, or event or condition
which constitutes or, after notice or passage of time or both, would constitute a
default on the part of Seller or such other party, as applicable, under the
Assigned Contracts.
(s) No Insolvency or Insolvency Proceeding. Seller is not insolvent and the
consummation of the transactions contemplated by this Agreement shall not render Seller
insolvent. Seller has now, and will have as of the Closing, sufficient capital and net worth
to meet its obligations as they become due and payable. Seller has liquid financial
resources adequate to consummate the transactions contemplated herein. Seller has not entered
into this Agreement with the actual intent to hinder, delay or defraud any creditor or any
other Person. There has been no voluntary insolvency, bankruptcy, receivership,
custodianship, liquidation, dissolution, reorganization, assignment for the benefit of
creditors or similar proceeding (an “Insolvency Proceeding”) commenced with respect
to Seller. As of the date of this Agreement, Seller is not currently planning to commence an
Insolvency Proceeding. As of the date of this Agreement, to the Knowledge of Seller, no other
Person is currently planning to commence an Insolvency Proceeding with respect to Seller.
31
(t) No Adverse Change. Except as disclosed in the representations and
warranties made hereunder, since December 31, 2008, there has been no Material Adverse Effect
nor any event or condition that has had, nor has a reasonable possibility of having in the
future, a Material Adverse Change, since the date of the Audited Financial Statements.
(u) Brokers. Seller has not employed or contracted with any broker or finder or
incurred any liability for brokerage fees, commissions, finders’ fees or other like payment
in connection with the transactions contemplated hereunder, except for any liability, fee and
commission to Xxxxxx, Xxxxxxxx & Company (“Seller Financial Advisor”) for which
Seller shall be solely liable.
(v) Limitations on Representations and Warranties. Except for the
representations and warranties specifically set forth in this Section 9, neither Seller nor
any of its agents, Affiliates or representatives, nor any other Person makes or shall be
deemed to make any representation or warranty to Buyer, express or implied, at law or in
equity, with respect to the transactions contemplated hereby.
10. Reserved.
11. Representations and Warranties of Buyer. Buyer represents and warrants to Seller
as follows, subject to the exceptions disclosed in writing in the Buyer Disclosure Schedule and
delivered as of the date hereof:
(a) Corporate Organization. Buyer is a national association organized and
existing in good standing under the laws of the United States, and is entitled to carry on
its banking business where such business is now conducted.
(b) Power, Authority and Enforceability. Buyer has the requisite power and
authority to enter into, deliver and perform this Agreement and any instruments or other
documents executed pursuant hereto. This Agreement and any instruments or other documents
executed pursuant hereto, and the execution, delivery and performance hereof and thereof have
been duly authorized and approved by all necessary corporate action on the part of Buyer.
This Agreement has been duly and validly executed and delivered by Buyer and, assuming due
authorization, execution and delivery by Seller, constitutes a valid and binding obligation
of Buyer, enforceable against Buyer in accordance with its terms, except as enforcement may
be limited by receivership, conservatorship and supervisory powers of bank regulatory
agencies generally, as well as bankruptcy, insolvency, reorganization, moratorium or other
laws of general applicability relating to or affecting creditors’ rights, or the limiting
effect of rules of law governing specific performance, equitable relief and other equitable
remedies or the waiver of rights or remedies.
(c) No Conflict. The execution and delivery of this Agreement and any
instruments and documents executed pursuant hereto by Buyer do not and, subject to the
receipt of all Regulatory Approvals, the consummation of the transactions contemplated by
this Agreement will not:
32
(1) constitute a breach or violation of or default under any Legal
Requirement, judgment, order, governmental permit or the organizational documents
or any license of Buyer, or to which Buyer is subject, which breach, violation or
default would materially and adversely affect the transactions contemplated hereby,
or
(2) violate, conflict with, result in a breach of any provision 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 upon any of its assets 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 it or any of its properties or assets may be bound or
affected, which breach, violation or default would prevent or materially delay
Buyer from performing its obligations under this Agreement in all material
respects.
(d) Regulatory Approvals. Except for the regulatory approvals set forth on
Schedule 11(d) of the Buyer Disclosure Schedule (the “Buyer Regulatory
Approvals”), no consents or approvals of or filings or registrations with any
Governmental Entity, or any third party are necessary in connection with the execution and
delivery by Buyer of this Agreement or the consummation by Buyer of the transactions
contemplated hereby.
(e) Litigation. There are no actions, claims, suits, proceedings or
investigations, whether civil, criminal or administrative, pending or, to the Knowledge of
Buyer, threatened against or affecting Buyer or its business at law or in equity or
otherwise, which would prevent or materially delay Buyer from being able to perform its
obligations under this Agreement.
(f) Compliance with Laws. To the Knowledge of Buyer, Buyer has not received any
written notice of any alleged or threatened claim, violation or liability under any law of a
Governmental Entity in connection with the operation and business of Buyer that should
reasonably be expected to prevent or materially delay Buyer from being able to perform its
obligations under this Agreement.
(g) Absence of Regulatory Agreements. Buyer is not subject to any Regulatory
Agreement with any Governmental Entity that restricts or would reasonably be expected to
restrict its ability to purchase the Assets or to assume the Liabilities, nor has Buyer been
advised in writing by any Governmental Entity that it is considering issuing or requesting
any Regulatory Agreement.
(h) Governmental Entity Correspondence and Proceedings. Buyer has not received
any written notice from any Governmental Entity indicating that such agency would oppose or
not promptly grant or issue its consent or approval, if requested, with respect to the
transactions contemplated hereby. There are no pending or, to Buyer’s Knowledge, threatened
actions, proceedings or allegations by any Person or Governmental Entity against Buyer that
has or would reasonably be expected to have a material and
33
adverse effect on Buyer’s ability
to perform its obligations under this Agreement in all material
respects.
(i) Financing. Buyer has the necessary funding to complete the transactions
contemplated by this Agreement.
(j) Broker. Buyer has not employed or contracted with any broker or finder or
incurred any liability for brokerage fees, commissions, finders’ fees or other like payment
in connection with the transactions contemplated hereunder.
(k) Limitations on Representations and Warranties. Except for the
representations and warranties specifically set forth in this Section 11, neither Buyer nor
any of its agents, Affiliates or representatives, nor any other Person makes or shall be
deemed to make any representation or warranty to Seller, express or implied, at law or in
equity, with respect to the transactions contemplated hereby.
12. Seller’s Covenants. During the period from the date hereof to Closing Date,
except as set forth in Schedule 12 of the Seller Disclosure Schedule, Seller (i) will, with
respect to the Branches, Assets and Liabilities, use its commercially reasonable efforts to
preserve the business relationship with depositors, customers and others having business
relationships with it and whose accounts will be retained at the Branches and Seller shall provide
written notice to Buyer in the event it receives written notice of any loss or potential loss of
any material business or customers related to the Loans or the Deposit Liabilities, (ii) will
underwrite and administer the Loans in accordance with prudent, safe and sound underwriting and
administration practices and applicable Legal Requirements, (iii) will maintain the Branches in
their current condition, ordinary wear and tear excepted, (iv) will conduct the business of the
Branches and preserve the Assets and Liabilities in accordance with prudent, safe and sound
commercial banking practices and applicable Legal Requirements, (v) will notify Buyer within twelve
(12) hours of Seller becoming aware of any material change to Seller’s representations and
warranties set forth in Section 9(i). Other than as may be required by any Governmental Authority
or Legal Requirement, and except as set forth in Schedule 12 of the Seller Disclosure
Schedule, Seller covenants with Buyer that, from the date hereof to Closing, Seller, except with
the prior written consent of Buyer, will not:
(a) Sell, transfer, assign, lease, mortgage, pledge or otherwise dispose of or encumber
or enter into any contract, agreement, or understanding to sell, transfer, assign, lease,
mortgage, pledge or otherwise dispose of or encumber any of the Assets (other than use of
Cash on Hand in the ordinary course of business consistent with past practice) or Liabilities
existing on the date hereof.
(b) Sell, transfer, assign, lease, mortgage, pledge or otherwise dispose of or encumber
or enter into any contract, agreement, or understanding to sell, transfer, assign, lease,
mortgage, pledge or otherwise dispose of or encumber any Loan.
(c) Enter into any employment, agency or other contract or arrangement for the
performance of personal services at the Branches, which is not terminable at will (at any
time, with or without cause, and with or without notice) without liability to Buyer.
34
(d) Fail to comply in all material respects with all Legal Requirements that relate to
(1) the conduct of the banking business at the Branches, or (2) the Assets.
(e) Set interest rates at the Branches in a manner inconsistent with prudent, safe and
sound banking practices, and without limiting the generality of the foregoing, (i) accept any
deposits at higher than prevailing market rates in the geographic markets where the Branches
are located at the time of such acceptance; (ii) change interest rates on existing deposits,
or (iii) employ any special promotions unique to the markets served by the Branches to
increase deposits, unless Buyer consents to such special promotion.
(f) Fail to maintain the Personal Property in a commercially reasonable manner and
consistent with past practices.
(g) Acquire or dispose of any Personal Property other than pursuant to commitments made
on or before the date of this Agreement and which are identified on Schedule 12(g) of
the Seller Disclosure Schedule, and except for replacement of any Personal Property and
normal maintenance and refurbishing in the ordinary course of business; provided however,
that Seller shall make no capital expenditures nor any contract or commitment for capital
expenditures in excess of $5,000 for any individual expenditure and $20,000 in the aggregate
for any one (1) project for furniture, fixtures or equipment for a Branch.
(h) Pay or commit to pay (a) any bonus prior to Closing, or (b) pay or commit to pay
prior to Closing, any salary, fee, or other compensation to any of its employees at the
Branches at a rate in excess of that prevailing on the date hereof.
(i) Make any new loans at the Branches to any Affiliated Person of the Seller or modify
the terms of any existing loan at the Branches with any Affiliated Person of the Seller.
(j) Modify the interest rate or structure, or amend, extend or renew any term, of any
Loans, grant any interest deferral or fee waivers, or deviate from industry standard and
commercially reasonable collection procedures, including, without limitation, modification of
payment terms or due date(s).
(k) Establish new Deposit Liabilities at the Branches other than in the ordinary course
of business consistent with Section 12(e) above.
(l) File any application or give any notice to relocate or close any of the Branches or
relocate or close any Branches.
(m) Transfer any employees currently employed at any of the Branches to another branch
of Seller or any of its Affiliates.
(n) Transfer to or from any Branch to or from any of Seller’s other operations or
branches or those of its Affiliates any Assets or any Deposit Liabilities, except upon the
unsolicited request of a depositor or customer.
(o) Amend, terminate or extend in any material respect any Branch Lease.
35
(p) Make or agree to make any material improvements to the Premises, except with respect
to commitments for such made on or before the date of the Agreement as set forth on
Schedule 12(p), and normal maintenance or refurbishing in the ordinary course of
business.
(q) Introduce any new material method of management or operation of the Branches.
(r) Make any significant change to the employees at the Branches or any changes in the
duties or responsibilities of any of them other than in the ordinary course of business.
(s) Default with respect to any provision of any insurance policy now or hereafter in
effecting relating to the Branches.
(t) Take any action that is intended or is reasonably likely to result in any of the
covenants or conditions to the transactions contemplated hereby not being materially
satisfied or a material violation of any provision of this Agreement.
(u) Agree with, or commit to, any Person to do any of the things described in clauses
(a) through (t) of this Section 12 except as expressly contemplated hereby.
13. Cross-Collateralization/Cross-Default. As of the Closing Date, Seller and Buyer
agree that each cross-default agreement (or similar agreement) and each cross-default rider (or
similar rider) attached to a promissory note or mortgage or deed of trust covering loans not part
of the Loans, shall be amended to un-cross such cross-default and exclude any Loans, and that the
Loans shall not be cross-defaulted with any loans not part of the Loans. Further, Seller and Buyer
agree that each cross-collateral agreement (or similar agreement) and each cross-collateralization
rider (or similar rider) attached to a promissory note or mortgage or deed of trust covering loans
not part of the Loans, shall be amended to un-cross such cross-collateralization of any security
interests, liens, or other interests in any collateral securing the Loans. Seller agrees to
execute any documents necessary to evidence such un-crossing of any cross-defaults and
cross-collateralizations in the real property records, or otherwise. The parties further agree
that where the only loans crossed are in fact within the Loans, any applicable cross
collateralization agreements and riders shall be assigned by Seller to Buyer as a Loan Agreement
pursuant to the terms of this Agreement.
14. Buyer Covenants. Buyer covenants with Seller that, between the date of this
Agreement and the Closing, Buyer will not (i) take any action that is intended to or is reasonably
likely to result in any of the conditions set forth in Section 7 becoming incapable of being
satisfied, or (ii) take any action or fail to take any action which would, or is reasonably
likely to, individually or in the aggregate, result in a Material Adverse Effect on Buyer.
15. Additional Covenants.
(a) Servicing Prior to Closing Date. With respect to the Loans from the date
hereof until the Closing Date, Seller shall provide servicing of such Loans that is
consistent with the servicing provided with respect to its loans that are not Loans. Further,
without the prior written consent of Buyer (which consent shall not be unreasonably
36
withheld or delayed), Seller shall not (a) except as required by Legal Requirement or the terms of the
Loan Documents, release any collateral or any party from any liability on or with respect to
any of the Loans; (b) compromise or settle any material claims of any kind or character with
respect to the Loans; or (c) amend or waive any of the material terms of any Loan as set
forth in the Loan Documents.
(b) Servicing Loans Post Closing Date. The Loans shall be sold on a
servicing-released basis (and without limitation, any related escrow deposits shall be
transferred to Buyer). As of the Closing Date, all rights, obligations, liabilities and
responsibilities with respect to the servicing of the Loans after the Closing Date will be
assumed by Buyer. Seller shall be discharged and indemnified by Buyer from all liability
with respect to servicing of the Loans after the Closing and Buyer shall not assume and shall
be discharged and indemnified by Seller from all liability with respect to servicing of the
Loans on or prior to the Closing.
(c) Solicitation of Accounts.
(1) Until the Closing Date and for an additional twelve (12) months following
the Closing Date, Seller and its Affiliates will not target or solicit deposits,
loans or other products and services from or to Persons (i) who were depositors or
borrowers at the Branches as of the Closing Date, or (ii) whose Loans were acquired
or Deposit Liabilities were assumed pursuant to this Agreement, whether by personal
contact, by telephone, by facsimile, by mail or other form of solicitation or
communication, or in any other way except for general solicitations that are
directed to the general public and not directed specially to Persons referenced
above.
(2) In making any of the foregoing permitted communications, following the
execution of this Agreement, Seller shall not reference any of the transactions
contemplated by this Agreement in a manner that intentionally disparages Buyer or
the business of Buyer. Following the execution of this Agreement, Buyer shall not
reference any of the transactions contemplated by this Agreement in a manner that
intentionally disparages Seller or the business of Seller.
(3) This Section 15(c) shall survive the Closing for the period set forth
above, and the obligations under this Section 15(c) will survive and apply to any
successor of Seller whether by merger, acquisition, stock purchase, asset purchase
or similar business combination transaction.
(d) Access to Books and Records. For a period of six (6) years from the Closing
Date, subject to applicable Legal Requirement, each party shall have commercially reasonable
access to any books and records of the other party relating to the Branches, Assets and the
Liabilities, and the requesting party, at its own expense, may during normal business hours
make copies and extracts when such copies and extracts are required by regulatory
authorities, for litigation purposes, or for tax or accounting purposes. If such copies or
extracts require use of a party’s equipment or the Branches, the user shall reimburse the
other party for all costs incurred, including, without limitation,
37
employee expenses. In the event that as of the end of such six (6) year period, any tax year of Seller is under
examination by any taxing authority, Seller shall inform Buyer in writing of the audit and
such books and records shall be maintained by Seller and/or Buyer, as the case may be, until
a final determination of the tax liability of Seller for that year has been made.
(e) Release of Non-Solicitation Agreements; Non-Solicitation; and Non-Compete.
(1) Seller will enter into written unconditional releases (the
“Unconditional Releases”), in a form reasonably satisfactory to Buyer, (a)
with each employee of Buyer who is employed by Buyer as of the execution of this
Agreement who was previously employed by Seller, and (b) each Hired Employee, from
any and all restrictions and/or obligations to Seller under any existing
non-solicitation agreements or non-competition agreements or other agreements or
arrangements containing non-solicitation and/or non-competition provisions,
provided, however, that such unconditional release shall only apply: (a) with
respect to any geographic non-competition covenants in such agreements, to the
counties in which the Branches are located, (b) with respect to any customer
non-solicitation covenants in such agreements, to the customers whose Loans are
acquired and/or Deposit Liabilities are assumed by Buyer pursuant to the
transaction contemplated by this Agreement, and (c) for such period of time as they
remain employees of Buyer or any of its Affiliates.
(2) For a period of twelve (12) months following the Closing Date Seller will
not (and shall cause its Affiliates not to)
| i) | solicit the employment, directly or indirectly (other than general solicitations through newspapers or other media of general circulation not targeted at such employees or actions in response to an employee’s own initiative, provided that there has not been any direct or indirect solicitation by or encouragement from Seller or any Affiliate of Seller or any agent or representative of Seller), of any of the individuals listed on Schedule 15(e). | ||
| ii) | solicit the business, directly or indirectly, of any customers whose Loans are acquired and/or Deposit Liabilities are assumed by Buyer pursuant to the transaction contemplated by this Agreement. | ||
| iii) | establish any new physical presence (whether it be a branch, a loan production office or otherwise) in any county in which a Branch is located. |
(f) Insurance. Seller will maintain in effect until the Closing Date all
casualty and public liability policies relating to the Branches, the Premises and the
activities conducted thereon and maintained by Seller on the date hereof or to procure
comparable replacement policies and maintain such replacement policies in effect until the
Closing Date at equal or greater coverage levels. Buyer shall provide all casualty and public
liability insurance for the Branches after the Closing Date. In the event of any material
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damage, destruction or condemnation affecting the Premises between the date hereof and the
time of the Closing, Buyer shall have the right to (i) exclude any Premise and/or Branch
Lease so affected from the Assets to be acquired and receive a corresponding deduction to the
Purchase Price in an amount to be mutually agreed upon in good faith between the parties, or,
in the alternative, (ii) require Seller to take reasonable steps to repair or replace the
damaged or destroyed property, or (iii) require Seller to deliver to Buyer any insurance
proceeds and other payments, to the extent of the fair market value or the replacement cost
of the Premise and/or Branch Lease, received by Seller as a result thereof unless, in the
case of damage or destruction, Seller has repaired or replaced the damaged or destroyed
property.
(g) Additional Loans. Promptly following the date hereof, the parties will
agree on a schedule and process for providing information relating to loans (“Additional
Loan Information”) originated after the date hereof through the fifth (5th) Business Day
prior to the Closing Date (with Additional Loan Information provided to Buyer not less
frequently than monthly and the final delivery of Additional Loan Information, if any, not
later than the second (2nd) Business Day prior to the Closing Date) that Buyer
deems reasonably necessary to enable it to determine whether to designate such loans as
“Additional Loans.” The parties will further agree on a schedule for Buyer to designate Loans
as “Additional Loans,” which shall occur not later than the fifth (5th) Business
Day following the date that the applicable Additional Loan Information was provided to Buyer
and, with respect to any Additional Loan Information provided within Five (5) Business Days
of the Closing Date, not later than the close of business on the day preceding the Closing
Date. Unless the parties otherwise agree in writing, loans originated after the fifth
(5th) Business Day prior to the Closing Date shall not be “Additional Loans.” Any
loans originated after the date hereof that Buyer does not designate as “Additional Loans”
pursuant to the agreed upon process shall not be Loans, Additional Loans or Assets and
may, without regard to any other provisions of this Agreement, be transferred by Seller to
another Seller banking branch, together with any related servicing or other rights or
collateral.
(h) Within twenty-one (21) calendar days of the execution of this Agreement, Buyer shall
obtain a commercial appraisal of the property value of each of the Branches, including the
Premises (the “Appraised Value”), the cost of which shall be borne equally by the
parties.
(i) Seller shall, at its own cost and expense, and in coordination with Buyer, shall
remove anything related to the Excluded Deposits, Excluded Liabilities and Excluded Loans, as
well as any assets that the Buyer is not acquiring pursuant to this Agreement that are
located at the Branches, and Seller shall be responsible for making any repairs necessitated
by the removal of the foregoing from the Branches.
(j) On July 1, 2009, Seller shall deposit Ninety Million Dollars ($90,000,000.00) into a
pledged deposit account maintained at one of Buyer’s branch locations (“Seller Special
Deposit Amount”). Withdrawal or encumbrance of any amount of the Seller Special Deposit
Amount by Seller shall require the consent of Buyer, which consent may be withheld or granted
in the sole and absolute discretion of Buyer, provided, that, (x) upon the payment by Seller
to Buyer of the Termination Fee in accordance with
39
the terms of this Agreement, which amount shall be paid from the Seller Special Deposit Amount to the extent sufficient to fund the
Termination Fee, the remainder, if any, of the Seller Special Deposit Amount shall be
returned to Seller and (y) upon payment by Seller to Buyer of any and all amounts due
hereunder or contemplated hereby at the Closing, which amount shall be paid from the Seller
Special Deposit Amount to the extent sufficient to fund such payments, the remainder, if any,
of the Seller Special Deposit Amount shall be returned to Seller. For the avoidance of doubt,
in the event the Seller Special Deposit Amount is insufficient to fund the Termination Fee or
the payment of any and all amounts owing at Closing pursuant to the terms of this Agreement,
Seller shall fund and make such payments in accordance with the other applicable provisions
of this Agreement.
(k) Five (5) Business Days prior to the Closing Date, Seller and Buyer shall together
review the Loans set forth on Schedule 4(a)(i) and the Deposit Liabilities set forth
on Schedule 8 and identify any and all Deposit Liabilities set forth on Schedule
8 that serve as security for loans other than the Loans, and with respect to such Deposit
Liabilities, Buyer shall, within three (3) Business Days, inform Seller in writing as to
whether Buyer wishes to assume any of such Deposit Liabilities at the Closing, in which case,
the loans secured by such Deposit Liabilities shall be added to Schedule 4(a)(i) and
shall be deemed to be “Loans,” and with respect to all such other Deposit Liabilities that
serve as security for loans that are not Loans, such Deposit Liabilities shall be removed
from Schedule 8 and shall not be “Deposit Liabilities” and as such Buyer shall not
assume such deposit liabilities at the Closing. Any and all modifications to Schedule
4(a)(i) and Schedule 8 shall be taken into consideration and reflected on the
Final Closing Statement and a corresponding adjustment shall be made to the Purchase Price
and Adjusted Payment Amount.
(l) The parties hereto acknowledge and agree that it is the intent of Buyer to purchase,
and the intent of Seller to sell, any and all additional loans related to the Loans acquired
in connection herewith. Therefore, Seller (i) covenants and agrees, within ten (10) Business
Days following execution of this Agreement, and thereafter two (2) Business Days following
the addition of a loan to Schedule 4(a)(i) pursuant to the terms of this Agreement
thereby making it a “Loan” (the “Related Loan Review Period”), to review its records, loan
files and other relevant data to identify the existence and nature of any loans held by it,
the borrower of which is the same Person as the borrower under any Loan or the affiliate or
principal of a borrower under any Loan (a “Related Loan”) and (ii) hereby agrees to
sell to Buyer one or more of the Related Loans in the event Buyer wishes to acquire such
Related Loans in its sole and absolute discretion. In the event Seller discovers any
Related Loans, it shall, prior to the expiration of the Related Loan Review Period, notify
Buyer in writing of the same and provide Buyer with copies of all loan documents, loan files
and other data relevant to the Related Loans and Buyer’s purchase decision with respect
thereto. In the event Buyer elects to purchase one or more of the Related Loans, it shall
deliver written notice to Seller, within ten (10) Business Days following the end of the
relevant Related Loan Review Period (or such shorter period of time that exists between the
end of the Related Loan Review Period and the Business Day immediately preceding the Closing
Date), identifying any and all of the Related Loans it intends to purchase. Such Related
Loans shall immediately thereafter be added to Schedule 4(a)(i) and be deemed to be a
“Loan” for all purposes of this Agreement. Buyer’s failure to
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deliver to Seller such written
notice within the aforementioned timing shall operate to terminate Buyer’s right to acquire
such Related Loans hereunder.
16. Regulatory Compliance, Conversion and Transition Matters.
(a) Regulatory Filings and Approvals.
(1) As promptly as practicable, but in no event later than fifteen (15)
calendar days from the date of this Agreement, and assuming the full and timely
cooperation and assistance of Seller (including, but not limited to, in the event
Buyer requests Seller’s cooperation in seeking expedited review and approval by the
OCC of the transactions contemplated by this Agreement), which Seller hereby
covenants and agrees to provide as and when requested by Buyer, Buyer shall
prepare, submit and/or file all applications, filings, notices, consents, permits
or registrations required to obtain the Buyer Regulatory Approvals. Buyer shall
use commercially reasonable efforts to obtain each such Buyer Regulatory Approval
as promptly as practicable. Seller and Buyer will use commercially reasonable
efforts to cooperate in connection therewith (including the furnishing of any
information and any reasonable undertaking or reasonable commitments which may be
required to obtain the Buyer Regulatory Approvals). Buyer will provide Seller with
copies of any applications and all correspondence relating thereto prior to filing,
other than material filed in connection therewith under an appropriate claim of
confidentiality, and Seller shall have an opportunity to review and comment on the
application to the OCC prior to filing the same with the OCC and Buyer shall
provide Seller with a copy of the final application promptly after it is filed with
the OCC. In exercising the foregoing right, Seller agrees to act reasonably and as
promptly as practicable. If any Governmental Entity shall require the modification of any of the terms
and provisions of this Agreement as a condition to granting any Buyer Regulatory
Approval, the parties hereto will negotiate in good faith to seek a mutually
agreeable adjustment to the terms of the transaction contemplated hereby, such
agreement not to be unreasonably withheld or delayed.
(2) As promptly as practicable, but in no even later than five (5) calendar
days after Buyer files an application to obtain the Buyer Regulatory Approvals, and
assuming the full and timely cooperation and assistance of Buyer, Seller shall
prepare, submit and/or file all of the Seller Regulatory Notices. Seller shall use
commercially reasonable efforts to file the Seller Regulatory Approval as promptly
as practicable. Seller and Buyer will use commercially reasonable efforts to
cooperate in connection therewith (including the furnishing of any information and
any reasonable undertaking or reasonable commitments which may be required to
obtain the Seller Regulatory Notices). Seller will provide Buyer with copies of any
notices and all correspondence relating thereto prior to submission, other than
material submitted in connection therewith under a claim of confidentiality, and
Buyer shall have an opportunity to review and comment on the notice to the Indiana
Department of Financial Institutions prior to submitting the same and Seller shall
provide Buyer with a
41
copy of the final notice promptly after it is submitted. In
exercising the foregoing right, Buyer agrees to act reasonably and as promptly as
practicable.
(b) Transitional Arrangements. Seller and Buyer agree to cooperate and to
proceed as follows to effect the transfer of account record responsibility for the Branches:
(1) As soon as practicable after the execution of this Agreement by the
parties hereto, but in no event later than two (2) calendar days after the date of
this Agreement, Seller will meet with Buyer to investigate, confirm and agree upon
mutually acceptable transaction settlement procedures and specifications, files,
deliverables, procedures and schedules, for the transfer of account record
responsibility for the Branches. Not later than five (5) calendar days after the
date of this Agreement, Seller shall deliver to Buyer the specifications and
conversion sample files to consist of live data of all accounts, which shall
include live data of all accounts as of the close of business two (2) calendar days
following the execution of this Agreement by the parties hereto or such a date as
soon as possible thereafter.
(2) After Buyer has tested and confirmed the conversion sample files, Seller
shall provide Buyer with account information, as of the most recent practicable
date, including complete name and address, account master file, ATM account number
information, applicable transaction and stop/hold/caution information,
account-to-account relationship information and any other related information with
respect to the Deposit Liabilities. Seller shall, upon reasonable request, but not
later than five(5) days following such request, and the performance of the
necessary research and mapping, which shall be performed as promptly as possible,
provide to Purchaser an updated version of such records.
(3) Seller shall provide Buyer after close of business on the Closing Date, a
final conversion file containing all information as of close of business on the
Closing Date.
(c) Customers.
(1) Buyer shall, jointly with Seller, as soon as practicable after the
execution and delivery of this Agreement, prepare and mail to each holder of
Deposit Liabilities, a letter, in the form and substance reasonably satisfactory to
each of the parties, informing such depositor of the nature of the transaction
contemplated by this Agreement and the continuing availability of services to be
provided by Buyer at the Branches on and after the Closing Date
(2) Each of Seller and Buyer shall provide, or join in providing where
appropriate, all notices to customers of the Branches and other Persons that Seller
or Buyer, as the case may be, is required to give notice to in connection with the
transactions contemplated hereby under Legal Requirement or the terms of any other
agreement between Seller and any customer.
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A party required to send or publish any notice or communication pursuant to this
Section 16(c)(2) shall furnish to the other party a copy of the proposed form of
such notice or communication at least five (5) Business Days in advance of the date
of the first mailing, posting, or other dissemination thereof to customers, and
shall not unreasonably refuse to amend such notice to incorporate any changes that
the other party proposes as necessary to comply with any Legal Requirement. All
costs and expenses of any notice or communication sent or published by Buyer or
Seller shall be the responsibility of the party sending such notice or
communication and all costs and expenses of any joint notice or communication shall
be shared equally by Seller and Buyer. As soon as reasonably practicable and in
any event within thirty (30) calendar days after the date hereof, Seller shall
provide to Buyer a report of the names and addresses of the owners of the Deposit
Liabilities, and the lessees of the safe deposit boxes, each as of the date hereof,
to facilitate the mailing of such materials. No communications by Buyer, and no
communications by Seller, outside the ordinary course of business, to any such
owners, borrowers or lessees shall be made prior to the Closing Date, except as
provided in this Agreement or otherwise agreed to by the parties in writing.
(3) Following the giving of any notice described in paragraph (1) above, Buyer
and Seller shall deliver to each new customer at any of the Branches such notice or
notices as may be reasonably necessary to notify such new customers of Buyer’s
pending assumption of liability for the Deposit Liabilities and to comply with
applicable Legal Requirements.
(4) Notwithstanding the provisions of Section 18, until Buyer has provided
substitute materials to the depositors of the Deposit Liabilities, neither Buyer
nor Seller shall object to the use by depositors of the Deposit Liabilities of
payment orders issued to or ordered by such depositors on or prior to the Closing
Date, which payment orders bear the name, or any logo, trademark, service xxxx
or proprietary xxxx, of Seller or any of its Affiliates.
(d) Contracts with Depositors. Buyer will timely perform, honor, and assume all
contractual deposit agreements and relationships between Seller and Seller’s depositors with
regard to the Deposit Liabilities after the Closing and will do so in compliance with
applicable Legal Requirements. Buyer and Seller shall make appropriate arrangements with
each other to provide for settlement by Buyer of checks, deposits, debits, returns, and other
items that are presented to Seller after the Closing for the Deposit Liabilities. On the
third (3rd) Business Day prior to the Closing Date, Seller shall provide Buyer with a list of
Deposit Liabilities, corresponding interest rates paid on the Deposit Liabilities and other
information necessary for Buyer to verify the rates paid by Seller on Deposit Liabilities.
(e) Direct Deposits. Seller will use its reasonable best efforts to transfer to
Buyer on the Closing Date all of those automated clearing house (“ACH”) and FedWire
direct deposit arrangements related (by agreement or other standing arrangement) to the
Deposit Liabilities. For a period of three (3) months following the Closing Date, in the
case of ACH direct deposits to accounts containing Deposit Liabilities (the final Business
Day of such period being the “ACH Direct Deposit Cut-Off Date”), Seller shall
transfer to
43
Buyer all received ACH Direct Deposits each Business Day in accordance with
Seller’s customary procedures. Seller shall, on behalf of Buyer, send NACHA compliant Notice
of Change on each transfer received. On each Business Day, for a period of sixty (60)
calendar days following the Closing Date (the final Business Day of such period being the
“FedWire Direct Deposit Cut-Off Date”), FedWire direct deposits received by Seller
shall be returned (as soon as is practicable after receipt) to the originator with an
indication of Buyer’s correct Wire Room contact information and an instruction that such wire
should be sent to Buyer. Compensation for ACH direct deposits or FedWire direct deposits not
forwarded to Buyer on the same Business Day as that on which Seller has received such
deposits will be handled in accordance with the applicable rules established by the United
States Council on International Banking. After the respective ACH Direct Deposit Cut-Off
Date or FedWire Direct Deposit Cut-Off Date, Seller may discontinue accepting and forwarding
ACH and FedWire entries and funds, and return such direct deposits to the originators marked
“Account Sold.” Seller and its Affiliates shall not be liable for any overdrafts that may
thereby be created. Buyer and Seller shall agree on a reasonable period of time prior to the
Closing during which Seller will no longer be obligated to accept new direct deposit
arrangements related to the Branches. At the time of the ACH Direct Deposit Cut-Off Date,
Buyer will provide ACH originators with account numbers relating to the Deposit Liabilities.
(f) Direct Debits. After the notice provided in Section 16(c)(1), Buyer shall
send appropriate notice to all customers having accounts constituting Deposit Liabilities,
the terms of which provide for direct debit of such accounts by third parties, instructing
such customers concerning the transfer of customer direct debit authorizations from Seller to
Buyer. Such notice shall be in a form reasonably agreed to by the parties hereto. For a
period of three (3) months following the Closing, Seller shall transfer to Buyer all received
direct debits on accounts constituting Deposit Liabilities each Business Day in accordance
with Seller’s customary procedures. Buyer will send NACHA compliant Notice of Change on each
direct debit received. Thereafter, Seller may discontinue forwarding such
entries and return them to the originators marked “Account Sold.” Buyer and Seller
shall agree on a reasonable period of time prior to the Closing during which Seller will no
longer be obligated to accept new direct debit arrangements related to the Branches. On the
Closing Date, Buyer shall provide ACH originators of such direct debits with account numbers
relating to the Deposit Liabilities.
(g) Interest Reporting and Withholding.
(1) Unless otherwise agreed to by the parties, Seller will report to
applicable taxing authorities and holders of Deposit Liabilities, with respect to
the period from January 1 of the year in which the Closing occurs through the
Closing Date, all interest (including dividends and other distributions with
respect to money market accounts) credited to, withheld from and any early
withdrawal penalties imposed upon the Deposit Liabilities. Buyer will report to the
applicable taxing authorities and holders of Deposit Liabilities, with respect to
all periods from the day after the Closing Date, all such interest credited to,
withheld from and any early withdrawal penalties imposed upon the Deposit
Liabilities. Any amounts required by any Governmental Entity to be withheld from
any of the Deposit Liabilities through the Closing Date will be withheld by
44
Seller in accordance with Legal Requirements or appropriate notice from any Governmental
Entity and will be remitted by Seller to the appropriate agency on or prior to the
applicable due date. Any such withholding required to be made subsequent to the
Closing Date will be withheld by Buyer in accordance with Legal Requirements or
appropriate notice from any Governmental Entity and will be remitted by Buyer to
the appropriate agency on or prior to the applicable due date.
(2) Unless otherwise agreed by the parties, Seller shall be responsible for
delivering to payees all IRS notices with respect to information reporting and tax
identification numbers required to be delivered through the Closing Date with
respect to the Deposit Liabilities, and Buyer shall be responsible for delivering
to payees all such notices required to be delivered following the Closing Date with
respect to the Deposit Liabilities.
(3) Unless otherwise agreed by the parties, Seller will timely make all
required reports to applicable taxing authorities and to obligors on Loans, with
respect to the period from January 1 of the year in which the Closing occurs
through the Closing Date concerning all interest and points received by Seller, and
Buyer will timely make all required reports to applicable taxing authorities and to
obligors on Loans, with respect to all periods from the day after the Closing Date,
concerning all such interest and points received by Buyer.
(h) Negotiable Instruments. Seller will remove any supply of Seller’s money
orders, official checks, gift checks, travelers’ checks or any other negotiable instruments
located at each of the Branches on the Closing Date.
(i) ATM/Debit Cards; POS Cards. Seller will provide Buyer with a list of ATM
access/debit cards and Point-of-Sale (“POS”) cards issued by Seller to depositors of
any Deposit Liabilities, and a record thereof in a format reasonably agreed to by the
parties containing all addresses therefor, as soon as practicable and in no event later than
fourteen (14) calendar days after the date of this Agreement. At or promptly after the
Closing, Seller will provide Buyer with a revised record through the Closing. In instances
where a depositor of a Deposit Liability made an assertion of error regarding an account
pursuant to the Electronic Funds Transfer Act and Federal Reserve Board Regulation E, and
Seller, prior to the Closing, re-credited the disputed amount to the relevant account during
the conduct of the error investigation, Buyer agrees to comply with a written request from
Seller to debit such account in a stated amount and remit such amount to Seller, to the
extent of the balance of funds available in the accounts. Seller agrees to indemnify Buyer
for any Losses that Buyer may incur as a result of complying with such request from Seller.
Seller shall not be required to disclose to Buyer customers’ PINs or algorithms or logic used
to generate PINs. Buyer shall reissue ATM access/debit cards to depositors of any Deposit
Liabilities not earlier than forty-five (45) calendar days nor later than seven (7) calendar
days prior to the Closing Date, which cards shall be effective as of the day following the
Closing Date. Buyer and Seller agree to settle any and all ATM transactions and POS
transactions effected on or before the Closing Date, but processed after the Closing Date, as
soon as practicable following the processing thereof.
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(j) Data Processing Agreement and Hardware. Seller will provide Buyer in
advance of the Closing upon reasonable prior notice, during normal hours of operations,
reasonable access to equipment and records in order to effectuate a conversion of the Deposit
Liabilities and the Loans from Seller to Buyer as of the Closing Date. Any cost of such
inspection or conversion shall be at Buyer’s sole expense. Notwithstanding the foregoing,
Seller shall not be obligated to provide access to such equipment and records if it would
materially interfere with Seller’s ability to conduct its business or operations in the
ordinary course. The parties agree to use reasonable best efforts to comply with the purpose
and intent of this Section 16(j) prior to and after the Closing.
(k) Loan Collections. Buyer and Seller shall make appropriate arrangements with
each other to provide for settlement by the party receiving payments of all payments of any
kind made in relation to the Loans which are presented to a party after the Closing and with
regard to loans which are owned by the other party. These arrangements shall be performed by
both parties in good faith prior to and after the Closing.
(l) Access to Properties, Books and Records. Until the Closing, Seller shall
upon reasonable prior written notice and during regular business hours cooperate with Buyer
to provide Buyer and its officers and authorized agents and representatives access to the
properties (including visiting the Branches for integration planning purposes), books,
records, files (including all of the Loan Files), documents and other information relating to
the Assets and Liabilities as Buyer may reasonably request. Buyer and Seller each will
identify to the other, within ten (10) calendar days after the date hereof, a selected group
of their respective salaried personnel that shall constitute a “transition group” and will be
available to Seller and Buyer, respectively, at reasonable times (limited to normal operating
hours) to provide information and assistance in connection with Buyer’s investigation of
matters relating to the Branches, Assets and Liabilities. Such transition group will also
work cooperatively to identify and resolve issues arising from any commingling of Seller’s
records with respect to the Branches with Seller’s records for its
other branches and operations not subject to this Agreement. Seller shall furnish Buyer
with such additional financial and operating data and other information about Seller’s
business operations at the Branches as the Seller determines may be reasonably necessary for
the orderly transfer of the business operations of the Branches, the Assets and the
Liabilities.
(m) Employees and Employee Benefits.
(1) Buyer intends to hire (on an at-will basis) after the Closing certain
staff at the Branches that are employed by Seller immediately prior to the Closing.
Buyer shall make a written offer of employment to each such employee of Seller
selected by Buyer to be an employee of Buyer effective as of the Closing Date by
virtue of the consummation of the transactions set forth herein. Buyer shall
provide Seller with a written list of current Branch employees to whom Buyer will
make an offer of employment, and Seller shall take such action as is necessary to
terminate such employees not included on such list or transfer their employment
within Seller and its affiliates, in both cases effective as of the Closing Date.
Each such Branch employee who accepts Buyer’s offer of employment (regardless of
whether they are active employees or on leave of
46
absence status as of the Closing Date) shall be a “Hired Employee” for purposes of this Agreement, effective
upon the Closing Date and this date shall be referred to as the Hired Employee’s
“Transfer Date.” Subject to applicable Legal Requirements, on and after
the Closing Date, the Hired Employees shall become employees of Buyer, and Buyer
shall have the right to dismiss any or all Hired Employees at any time, with or
without cause, and to change the terms and conditions of their employment
(including compensation and employee benefits provided to them). Each employee who
is not offered employment by Buyer, or who fails to accept Buyer’s offer of
employment shall be an “Excluded Employee” for purposes of this Agreement.
Nothing in this Agreement shall give any employee any rights to claim status as a
third party beneficiary of this Agreement.
(2) Except as expressly provided in this Agreement, Seller shall pay,
discharge, and be responsible for, and shall indemnify Buyer and its Affiliates for
(i) all salary, wages (including, without limitation, payment for any and all
accrued paid time off, vacation, sick time or personal days accrued by the Hired
Employees as of the Transfer Date, which Seller agrees to pay to the Hired
Employees pursuant to Seller’s Employee Benefit Plans and as required by any
applicable Legal Requirement), bonuses, commissions and any other form of
compensation (including, without limitation, any deferred compensation) arising out
of the employment of the Hired Employees prior to the Transfer Date, and (ii) any
employee benefits under the Seller’s Employee Benefit Plans arising out of the
employment of the Hired Employees prior to the Transfer Date, including welfare
benefits with respect to claims incurred prior to the Transfer Date but reported
after the Transfer Date.
(3) Seller’s Employee Benefit Plans shall retain responsibility for all claims
incurred by employees prior to the date they become Hired Employees.
For purposes of this paragraph, a claim shall be deemed to have been incurred
when the medical or other service giving rise to the claim is performed, except
that disability claims shall be deemed to have been incurred on the date the
employee becomes disabled. Buyer agrees, to the extent permitted under its
Employee Benefit Plans, to (i) provide coverage for Hired Employees under its
medical and dental benefit plans, effective on the Closing Date or as soon as
practicable thereafter as permitted by the Employee Benefit Plans, and (ii) waive
any preexisting conditions, waiting periods and actively at work requirements under
such plans.
(4) Seller shall be solely and fully responsible for the Excluded Employees in
the transfer of Excluded Employees to other positions with Seller or in the
termination of their employment with Seller. To the extent Seller is terminating
any Excluded Employees, Seller shall be fully and completely responsible for said
termination(s), paying those certain Excluded Employees all accrued wages,
commissions, vacation pay and any other compensation due and owing, and providing
notice of such Excluded Employees rights and obligations pursuant to COBRA. Seller
shall be fully liable for any claims, demands, damages orders, awards and/or
judgments arising out of or relating in any way to
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Seller’s treatment of and/or termination of Excluded Employees, including but not limited to any obligations
which may arise under the Federal or any applicable state or local Worker
Adjustment and Retraining Notification (“WARN”) law.
(5) Pursuant to Treasury Regulations Section 1.409A-1(h)(4), Seller and Buyer
agree that, on the Closing Date, each Hired Employee shall be treated as having a
“separation from service” with Seller for purposes of Section 409A of the Code and
Treasury Regulations Section 1.409A-1(h).
(6) It is understood and agreed that (i) Buyer’s employment of any Hired
Employee as set forth in this Section 16(m) shall not constitute a commitment,
contract or understanding (express or implied) of an obligation on the part of
Buyer to a post-Closing employment relationship of any fixed term or duration or
upon any terms or conditions other than those that Buyer may establish pursuant to
individual offers of employment, and (ii) employment offered by Buyer is “at will”
and may be terminated by Buyer or by a Hired Employee at any time for any reason
(subject to any written commitments to the contrary made by Buyer or a Hired
Employee and subject to any Legal Requirement). Nothing in this Agreement shall be
deemed to prevent or restrict in any way the right of Buyer to terminate, reassign,
promote or demote any of the Hired Employees after the Closing Date or to change
adversely or favorably the title, powers, duties, responsibilities, functions,
locations, salaries, other compensation, or terms or conditions of employment of
such Hired Employees. Nothing in this Agreement shall be construed as requiring any
compensation or Employee Benefit Plan, program or arrangement to be maintained by
Buyer for any Hired Employee at, or for any specified period after, the Closing
Date.
(n) Transitional Matters. Without in any way limiting the generality of the
foregoing provisions, Buyer and Seller shall cooperate with regard to the transitional
matters as reasonably requested by Buyer of Seller. Notwithstanding the foregoing, Seller
shall not be obligated to provide its resources or time to such transitional matters if it
would materially interfere with Seller’s ability to conduct its business or operations in the
ordinary course.
(o) Assumption of IRAs. Subject to Sections 2(c) and 6(b)(5), Buyer agrees that
after the Closing, it will perform all of the duties so delegated as successor custodian and
comply with the terms of Seller’s agreement with the depositor of the XXX and Xxxxx Account
Deposits affected thereby. For the avoidance of doubt (x) Seller shall be responsible for
reporting contributions and distributions on or prior to the Closing Date and (y) Buyer shall
be responsible for all tax reporting with respect to the XXX and Xxxxx Account Deposits for
which it serves as successor custodian from and after the Closing Date.
(p) Grant of License. Seller hereby grants to Buyer a nonexclusive,
irrevocable, paid up, royalty-free, sublicensable right and license to use the Licensed IP
during the Phaseout Period in connection with Buyer’s maintenance of the Liabilities and
ownership of the Assets and Branches in accordance with and subject to the following:
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(1) Beginning on the Closing Date and during the subsequent one hundred fifty
(150) days thereafter (the “Phaseout Period”), Buyer will use the Licensed
IP as reasonably necessary or desirable to communicate to customers and the public
the transition of the Assets and Liabilities from Seller to Buyer, and the Licensed
IP shall be replaced, removed, covered-over or otherwise obliterated by Buyer, at
Buyer’s expense, as promptly as practicable for items existing as of the Closing
Date with Licensed IP affixed to them that are used in the maintenance of the
Liabilities and ownership of the Assets and the Branches. Without limitation to
the above, Seller will take all actions as may be needed to enable Buyer’s use of
the Licensed IP, including access to and redirecting of domain name(s) as
applicable.
(2) Buyer further agrees that any and all permitted uses of the Licensed IP
pursuant to the Agreement shall inure to the sole and exclusive benefit of Seller
and Seller Parent.
(3) Buyer agrees that any use of the Licensed IP in the maintenance of the
Liabilities and ownership of the Assets and the Branches after the Closing shall be
provided in accordance with all applicable Legal Requirements, and to the
additional terms and conditions as set forth in this Agreement and that the same
shall not reflect adversely upon the good name of Seller, and that the maintenance
of the Liabilities and ownership of the Assets and the Branches will be of a high
standard and skill that is at least commensurate with the standard and skill
employed by Seller immediately prior to the Closing Date.
(q) No later than forty-five (45) calendar days after the date of this Agreement, Seller
shall furnish to Buyer, for the Premises at Buyer’s expense, a title commitment
issued by Chicago Title Company (the “Title Company”), naming Buyer as the
proposed insured, wherein the Title Company shall agree to issue an ALTA form of owner’s
insurance policy of title insurance (a “Title Commitment”). Each Title Commitment
shall include the Title Company’s requirements to issue a title policy with respect to the
Premises, which requirements shall be satisfied by Seller on or before the Closing Date. If
any of the following shall occur (collectively, a “Title Objection”): (i) any Title
Commitment or other evidence of title or search of the appropriate real estate records
discloses that any party other than Seller or one of its Affiliates has title to the insured
estate covered by the Title Commitment; (ii) any title exception (other than a Permitted
Lien) is disclosed in Schedule B to any Title Commitment; or (iii) a survey discloses any
matter that affects Buyer’s use of the Premises for the purpose of operating the relevant
Branch, then, in each such case, Seller shall use commercially reasonable efforts to cure
each such Title Objection and take all commercially reasonable steps required by the Title
Company to eliminate each such Title Objection as an exception to the applicable Title
Commitment. Any Title Objection that the Title Company is willing to insure over on terms
reasonably acceptable to Buyer is herein referred to as an “Insured Exception.” The
incremental increase in the cost of the premiums as a result of any Insured Exceptions
relative to what the Title Company would otherwise charge for the title insurance shall be
borne by Seller. Except as provided for in the prior sentence, the premiums for such title
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insurance policy, recording costs and other similar costs, fees and expenses, if any,
relating to the sale and transfer of the Premises, shall be borne by Buyer.
(r) Transition Services Agreement. If on or prior to Closing, Buyer desires, in
its sole and absolute discretion, to engage Seller to provide Buyer with certain transition
support services post-Closing of the transaction contemplated hereunder (e.g., servicing
arrangements with respect to the Loans and/or the Deposit Liabilities), Buyer and Seller
agree to work in good faith to document the particulars of such an arrangement in a
Transition Services Agreement (“Transition Services Agreement”), which shall be on
terms and conditions reasonably satisfactory to the parties, and shall be entered into at the
Closing.
(s) Overdrafts. Prior to the Closing, Seller agrees to cooperate with Buyer and
to use its best efforts to indentify those deposit accounts for which provisional credit has
been given and that contain uncollected funds.
17. Survival of Representations, Warranties, and Covenants.
(a) The representations and warranties of the parties shall survive until the second
(2nd) anniversary of the Closing Date except that (i) the representations and
warranties set forth in Sections 9(a) (Corporate Organization), 9(c) (Title to Assets), 9(j)
(Power, Authority and Enforceability), 11(a) (Corporate Organization), and 11(b) (Power,
Authority and Enforceability) shall survive indefinitely (the “Fundamental
Representations”), and (ii) the representations and warranties set forth in 9(e)
(Environmental Matters), 9(f) (Loans), 9(g) (Deposit Liabilities), 9(h) (Branch Activities),
9(o) (Employment; Labor), 9(p) (Tax Matters) and 9(q) (IP) shall survive until the earlier of
(1) thirty (30) days following the expiration of the applicable statute of limitations, or
(2) five (5) years from the anniversary of the Closing Date (such time periods, as
applicable, are each referred to as the “Survival Period”). The parties hereto
specifically intend that the statutory statutes of limitations of Legal Requirements
applicable to each of the representations and warranties be superseded and replaced by the
relevant Survival Period. It is also the intention of the parties hereto that any claim for
indemnification or suit initiated with respect to any representations and warranties that is
not asserted by written notice by the Indemnified Party to the Indemnifying Party (which
written notice shall contain the amount of such claim and describe the facts then known by
the Indemnified Party relating to such claim, including, without limitation, the reason why
the Indemnified Party believes the claim is subject to indemnification by the Indemnifying
Party) within the relevant Survival Period may not be pursued and is hereby irrevocably
waived after such time.
(b) All of the covenants or other agreements of the parties contained in this Agreement
shall survive until fully performed or fulfilled, unless and to the extent that
non-compliance with such covenants or agreements is (1) waived in writing by the party
entitled to such performance, or (2) otherwise specifically permitted by this Agreement.
18. Name Change, etc. Immediately after the Closing (but under no circumstances later
than the next Business Day immediately following the Closing), Buyer will (a) change the name and
logo on all documents and facilities relating to the Assets and the Liabilities to Buyer’s
50
or one of its division’s name and logo, (b) notify all Persons whose Loans, Deposit
Liabilities or safe deposit agreements are transferred under this Agreement of the consummation of
the transactions contemplated by this Agreement, and (c) provide all appropriate notices to the
FDIC and any other regulatory authorities required as a result of the consummation of such
transactions. Seller shall cooperate with any commercially reasonable request of Buyer directed to
accomplish the removal of Seller’s signage by Buyer and the installation of Buyer’s signage by
Buyer at the Branches; provided, however, that (i) all such costs and expenses of removals and all
such costs and expenses of installations shall be at the expense of Buyer, (ii) such removals and
installations shall be performed in such a manner that does not unreasonably interfere with the
normal business activities and operations of the Branches, (iii) such installed signage shall
comply with the Branch Lease and all applicable zoning and permitting laws and regulations, and
(iv) such installed signage shall have, if necessary, received the prior approval of the owner or
landlord of the facility, and such installed signage shall be covered in such a way as to make
Buyer signage unreadable at all times prior to the Closing, but such cover shall display the name
and/or logo of Seller (or of Seller or its other Affiliates) in a manner reasonably acceptable to
Seller. Buyer agrees not to use any forms or other documents bearing Seller’s or any of its
Affiliates’ name or logo after the Closing without the prior written consent of Seller, and, if
such consent is given, Buyer agrees that all such forms and documents to which such consent relates
will be stamped or otherwise marked in such a way that identifies Buyer as the party using the form
or other document. As soon as practicable and, in any event, not more than five (5) nor less than
two (2) calendar days prior to the Closing Date, Buyer will mail new checks reflecting its transit
and routing number to customers of the Branches with check writing privileges. Buyer shall use its
reasonable best efforts to cause these customers to begin using such checks and cease using checks
bearing Seller’s name.
19. Contracts.
(a) To the extent that the assignment of any of the Assigned Contracts, commitments or other
assets included in the Assets requires the consent of any other party thereto, neither this
Agreement nor any action taken pursuant to its provisions shall constitute an assignment or an
agreement to assign any Assigned Contract, commitment or other asset if such assignment or
agreement to assign would constitute a breach thereof. Seller shall, prior to the Closing, use
reasonable best efforts to obtain the consent of any party to each such Assigned Contract,
commitment or other asset to its assignment to Buyer in all cases where such consent is necessary.
Buyer agrees to provide reasonable cooperation in connection therewith (including, by providing
relevant information requested by the applicable lessors or other third parties regarding Buyer’s
financial capability to fulfill the obligations of the Assigned Contracts, but such cooperation by
Buyer shall not include Buyer agreeing to any amendment to any Assigned Contract, other than to
reflect the change from Seller to Buyer). If any such consent is not obtained, Seller shall
cooperate with Buyer in any lawful and reasonable arrangement designed to provide to Buyer the
benefits under any such Assigned Contract, commitment or other asset. Any costs incurred in
obtaining any consents or assignments of such Assigned Contracts, commitments or other assets shall
be borne by Seller.
(b) In the case that the transfer and/or assignment of the Branch Lease cannot be obtained,
notwithstanding any other provision hereof, Seller shall use commercially reasonable efforts to
make alternative arrangements acceptable to Buyer and cooperate with Buyer in any lawful and
reasonable arrangement designed to provide to Buyer the benefits under any such
51
Branch Lease. In such event, Seller shall not be obligated to deliver physical possession of
the subject Branch or Personal Property associated with the subject Branch to Buyer at the Closing.
The Parties shall negotiate in good faith a reasonable reduction to the Purchase Price to take into
account the Seller’s inability to transfer such Branch Lease(s) and the associated Personal
Property.
20. Indemnification.
(a) Indemnification by Seller. Seller agrees to indemnify and hold Buyer and
any Person directly or indirectly controlling or controlled by Buyer harmless from and
against any and all Losses that they suffer, incur or sustain arising out of or attributable
to:
(1) subject to the relevant Survival Period, any breach of representation or
warranty of Seller contained in this Agreement or any schedule, certificate or
other document delivered pursuant hereto or as part of the transactions
contemplated hereby;
(2) any breach of a covenant or agreement on the part of Seller or the failure
of Seller to perform any agreement, covenant or obligation of Seller, in each case
contained in this Agreement, or in any other Transaction Agreement;
(3) ownership or operation of the Branches the Premises, the Assets or the
Liabilities prior to the Closing;
(4) the commencement of any Insolvency Proceeding with respect to Seller or
any claim relating to fraudulent transfers or conveyance regarding the Assets; or
(5) the Excluded Liabilities, the Excluded Deposits, the Excluded Loans, the
Seller’s assets that are not Assets and/or Excepted Loans.
For purposes of determining the amount of any Losses resulting from, relating to or arising out of
a breach of any representation or warranty or of any covenant, any such representation, warranty or
covenant that is qualified by Material Adverse Effect, materiality or similar qualifier (including
dollar thresholds) shall be read and given effect as if no such qualifier is contained therein.
(b) Indemnification by Buyer. Buyer agrees to indemnify and hold Seller and any
Person directly or indirectly controlling or controlled by Seller harmless from and against
and Losses that they may suffer, incur or sustain arising out of or attributable to:
(1) subject to the relevant Survival Period, any breach of representation or
warranty of Buyer in this Agreement or any schedule, certificate or other document
delivered pursuant hereto or as part of the transactions contemplated hereby;
(2) any breach of a covenant or agreement on the part of Buyer or the failure
of Buyer to perform any agreement, covenant or obligation of Buyer, in each case
contained in this Agreement, or in any other Transaction Agreement;
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(3) ownership or operation of the Branches the Premises, the Assets or the
Liabilities after to the Closing; or
(4) the Liabilities.
For purposes of determining the amount of any Losses resulting from, relating to or arising
out of a breach of any representation or warranty or of any covenant, any such representation,
warranty or covenant that is qualified by Material Adverse Effect, materiality or similar qualifier
(including dollar thresholds) shall be read and given effect as if no such qualifier is contained
therein.
(c) Indemnification Procedures
(1) A claim for indemnification for any matter not involving a Third Party
Claim may be asserted by written notice to the Indemnifying Party, which notice
shall include a reasonable description of the basis for the claim.
(2) In the event that any Legal Proceedings shall be instituted or that any
Third Party Claim is asserted, the Indemnified Party shall as soon as reasonably
practicable cause written notice of the assertion of any Third Party Claim of which
it has Knowledge, which is covered by this Section 20 to be forwarded to the
Indemnifying Party. If the Indemnifying Party acknowledges in writing its
obligation to indemnify the Indemnified Party hereunder against any Losses that may
result from such Third Party Claim, the Indemnifying Party shall have the right, at
its sole expense, to be represented by counsel and to defend against, negotiate,
settle or otherwise deal with any Third Party Claim, which relates to any Losses
for which indemnification is sought hereunder. If the Indemnifying Party elects to
defend against, negotiate, settle or otherwise deal with any Third Party Claim,
which relates to any Losses for which indemnification is sought hereunder, it shall
within ten (10) calendar days (or sooner, if the nature of the Third Party Claim so
requires) of receipt of notice of the Third Party Claim notify the Indemnified
Party of its intent to do so. If the Indemnifying Party elects not to defend
against, negotiate, settle or otherwise deal with any Third Party Claim, which
relates to any Losses for which indemnification is sought hereunder, or fails to
notify the Indemnified Party of its election within the timeframe provided for
herein, the Indemnified Party may then, but only then, defend against, negotiate,
settle or otherwise deal with such Third Party Claim and the Indemnifying Party
shall reimburse the Indemnified Party for the actual expenses of defending such
Third Party Claim upon submission of periodic bills. If the Indemnifying Party
assumes the defense of the Third Party Claim, the Indemnified Party may
participate, at its own expense, in the defense of such Third Party Claim;
provided, that such Indemnified Party shall be entitled to participate in any such
defense with separate counsel at the expense of the Indemnifying Party only if
(i) so requested by the Indemnifying Party to participate, (ii) upon the reasonable
advice of counsel to the Indemnified Party a conflict or potential conflict exists
between the interests of the Indemnified Party and the Indemnifying Party that
would make such separate representation advisable, or (iii) such claim is based
upon an
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investigation, inquiry, or other proceeding by a Governmental Entity; and
provided, further, that the Indemnifying Party shall not be required to pay for
more than one such counsel (and any appropriate local counsel) for the Indemnified
Parties in connection with such Third Party Claim. The parties hereto agree to
cooperate fully with each other in connection with the defense, negotiation or
settlement of any such Third Party Claim.
(3) After any final judgment or award shall have been rendered by a
governmental body of competent jurisdiction and the expiration of the time in which
to appeal therefrom, or a settlement shall have been consummated, or the
Indemnified Party and the Indemnifying Party shall have arrived at a mutually
binding agreement with respect to a Third Party Claim hereunder, the Indemnified
Party shall forward to the Indemnifying Party notice of any sums due and owing
(including any bills, records or other documentation supporting such sums) by the
Indemnifying Party pursuant to this Agreement with respect to such matter and the
Indemnifying Party shall be required to pay all of the sums so due and owing to the
Indemnified Party by wire transfer of immediately available funds within five
Business Days after the date of such notice. Any indemnification of Buyer pursuant
to this Section 20 shall be effected first, by release of funds held by the Escrow
Agent in the Escrow Account, and second, by wire transfer of immediately available
funds from Seller to an account designated in writing by the Buyer within five (5)
Business Days after the determination thereof. Any indemnification of Seller
pursuant to this Section 20 shall be effected by wire transfer of immediately
available funds from Buyer to an account designated in writing by Seller within
five (5) Business Days after the determination thereof.
(4) The failure of the Indemnified Party to give reasonably prompt notice of
any Third Party Claim shall not release, waive or otherwise affect the Indemnifying
Party’s obligations with respect thereto except to the extent that the Indemnifying
Party can demonstrate actual Loss and prejudice as a result of such failure or
delay.
(d) Disputes Regarding Indemnification. If an Indemnifying Party disputes a
claim for indemnification presented by written notice to the Indemnifying Party, as set forth
in this Section 20, then such dispute shall be submitted to binding arbitration under the
rules of commercial arbitration of the American Arbitration Association, as modified herein.
The Indemnified Party shall, by written notice to the Indemnifying Party given within ten
(10) days of notice from the Indemnifying Party of dispute of a claim for indemnification,
appoint an arbitrator. The Indemnifying Party, by written notice to the Indemnified Party
within ten (10) days thereafter, shall then appoint a second arbitrator. When two
arbitrators have been appointed, as set forth herein, the arbitrators shall agree, if
possible, upon a third arbitrator who shall be appointed by written notice signed by both
arbitrators, a copy of which shall be mailed to Seller and Buyer within five (5) Business
Days of the appointment of the second arbitrator. In the event that five (5) Business Days
elapse after the appointment of the second arbitrator without notice of an appointment of a
third arbitrator, then either party, or both, may in writing request a Judge of the Southern
District Court of Ohio to appoint a third arbitrator. The arbitrators shall follow the
Federal
54
Rules of Evidence and allow parties to conduct discovery pursuant to the Federal Rules
of Civil Procedure for a period not to exceed thirty (30) days. After receiving evidence and
hearing witnesses, if any, the arbitrators shall render a decision determining the amount (if
any) of the claim accompanied by findings of fact and a statement of the reason for the
decision. The decision of the majority of the arbitrators shall be conclusive and binding
upon the parties and may be enforced in any court having jurisdiction thereof. The costs and
expenses of the arbitration shall be borne equally by the parties, but each side shall bear
the expense of its own legal counsel.
(e) Limitations on Indemnification. Notwithstanding the foregoing, there shall
be no liability for an Indemnifying Party under this Section 20, unless the amount of Losses
incurred by an Indemnified Party exceeds Two Hundred Thousand Dollars ($200,000.00) in the
aggregate (the “Deductible Amount”) and then only for the amount by which such Losses
exceed the Deductible Amount. An Indemnifying Party’s liability to an Indemnified Party
under this Section 20 shall be limited to an aggregate amount of Five Million Dollars
($5,000,000.00) (the “Indemnification Cap”). Notwithstanding the foregoing under
this Section 20(e), no Deductible Amount will be required to be met for any Losses related to
Fundamental Representations, Losses incurred under Sections 20(a)(2)-(5), intentional
misrepresentation, fraud or willful misconduct.
21. Taxes. Seller shall be solely responsible for all of Seller’s federal, foreign,
state and local income, sales, use, excise and other taxes applicable to its business and to the
Assets and all taxes resulting or arising from its payroll arising prior to the Closing with such
taxes computed as if such taxable period ended as of the close of business on the Closing Date.
Any filing, bulk sale, recordation, or similar taxes, which are payable or arise as a result of
this Agreement or the consummation of the transactions contemplated hereby, shall be the sole
responsibility of Buyer. Notwithstanding the foregoing, (a) general real estate taxes and
installments of special assessments due and payable with respect to the Branches in the calendar
year 2008 and all prior years will be paid by Seller, and (b) general real estate taxes and
installments of special assessments due and payable for calendar year 2009 shall be allocated
between Seller and Buyer as of the Closing Date where Seller’s share shall be calculated based on a
fraction, the numerator of which is the number of calendar days in 2009 prior to the Closing and
the denominator is 365, and (c) Buyer shall assume liability for and pay all real estate taxes and
installments of special assessments “due and payable” after the Closing. Solely for purposes of
this Section 21, real estate taxes and installments of special assessments shall be deemed to be
“due and payable” in the first calendar year in which such payment can be made.
22. No Partnership or Joint Venture. No activity of Buyer or Seller before, on or
after the Closing shall state or imply that Seller and Buyer are in any way involved as partners,
joint venturers or otherwise.
23. Further Assurances. Except as specifically provided in this Agreement, Seller
shall assist Buyer in the ordinary transition of the operations of the Branches and, from time to
time, Buyer or Seller, as the case may be, shall cause to be executed and delivered to the other
party all such other instruments and shall take or cause to be taken such further or other action
as may reasonably and in good faith be deemed by the other party to be necessary or desirable in
order to further assure the performance by Buyer or Seller, as the case may be, of any of their
respective obligations under this Agreement.
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24. Amendment; Waiver. The terms, provisions, and conditions of this Agreement may
not be changed, modified or amended in any manner except in a writing executed by both parties.
The waiver of any breach of any provision of this Agreement by any party hereto shall not be deemed
to be a waiver of any preceding or subsequent breach of this Agreement and no such waiver shall be
effective unless in writing signed by the party granting such waiver.
25. Termination of Agreement. This Agreement may be terminated, and the transactions
contemplated by this Agreement may be abandoned, at any time before the Closing as follows:
(a) By mutual written consent of Seller and Buyer;
(b) By either Seller or Buyer in the event of a Legal Proceeding, which would permit the
terminating party not to consummate the transactions contemplated hereby under the standard
set forth in Section 7(e) or 8(e), as applicable; provided, that termination pursuant to this
Section 25(b) shall not relieve the breaching party of liability for Losses arising out of or
related to such breach;
(c) By either Seller or Buyer (provided that the terminating party is not then in breach
of any representation, warranty, covenant or other agreement contained herein) in the event
of a breach by the other of any of its representations, warranties, covenants or agreements
contained in this Agreement, which is not cured or cannot be cured within thirty (30) days
after written notice of such termination has been delivered to the breaching party and which,
in the case of a breach of representation or warranty, would if occurring or continuing on
the Closing Date, permit the terminating party not to consummate the transactions
contemplated hereby under the standard set forth in Section 7(c) or 8(c), as applicable;
provided, that termination pursuant to this Section 25(c) shall not relieve the breaching
party of liability for Losses arising out of or related to such breach; or
(d) By either Seller or Buyer, if the Closing does not occur on or before the date that
is the four (4) month anniversary of the date of this Agreement, unless the parties mutually
agree in writing that it would be reasonable to extend such date for an additional period. A
party shall not be entitled to terminate this Agreement pursuant to this subsection if the
failure of the Closing to occur by such date shall be due to the failure of the party seeking
to terminate this Agreement to perform or observe the covenants or agreements of such party
set forth herein;
(e) By Buyer or Seller (1) immediately upon receipt of notice that any Regulatory
Approval has been denied by a final and non-appealable order; or (2) if Buyer has been
requested to withdraw any regulatory application that is required for the transactions
contemplated hereby to be consummated; provided, however, that Buyer or Seller shall have no
right to terminate this Agreement pursuant to this Section 25(e)(2) if such request for
withdrawal is due to such party’s failure to perform the covenants and agreements of such
party set forth herein; or
(f) By Buyer, if Seller shall have breached its obligations under Section 39;
(g) By Buyer, if an Insolvency Proceeding shall have been commenced with respect to
Seller Parent or if proceedings shall have been commenced to place Seller in
56
FDIC receivership. Seller shall provide Buyer with advanced written notice in the event
Seller Parent intends to commence an Insolvency Proceeding and shall provide Buyer with
written notice as soon as Seller or Seller Parent learns of any third party’s intention to do
so with respect to Seller Parent or of the FDIC’s intention to do so with respect to Seller.
Buyer shall keep confidential in accordance with Section 37 of this Agreement any information
provided by Seller or Seller Parent to Buyer pursuant to this provision.
(h) By Buyer, if the aggregate amount of the Loans as of the Closing Date does not meet
or exceed the Loan Floor.
26. Responsibilities Upon Termination. Upon termination of this Agreement, each party
shall bear its own costs and expenses, and none of the parties hereto shall have any liability or
further obligation hereunder to any other party, except for the obligations in Sections 38 and 39,
which shall continue to survive and except that nothing herein will relieve or release any party
from liability at law or in equity or for the damages that flow therefrom for any fraud, willful
misconduct or breach of this Agreement.
27. Entire Agreement. This Agreement, including all exhibits, schedules, and annexes
hereof, constitutes the entire agreement between the parties with respect to the subject matter
hereof and supersedes all other prior agreements and understandings, both written and oral, between
the parties with respect to the subject matter hereof; provided, however, that the terms of any
confidentiality agreement between the parties hereto previously entered into, to the extent not
inconsistent with any provisions of this Agreement, shall continue to apply, except that, upon
consummation of the transactions contemplated hereby, Buyer’s confidentiality obligation under such
confidentiality agreement shall terminate with respect to that portion of the confidential
information relating to the Branches, Assets and Liabilities.
28. Notices. All notices, requests, demands or other communications hereunder shall
be in writing and shall be given by facsimile or by registered or certified mail return receipt
requested to the other party as follows:
| if to the Buyer: | Personal & Confidential | |||
| First Financial Bank, N.A. | ||||
| Attn: Xxxxxx X. Xxxxx, President and CEO | ||||
| 0000 Xxxxx Xxxx, Xxx. 000 | ||||
| Xxxxxxxxxx, Xxxx 00000 |
57
| with copies to: | First Financial Bank, N.A. | |||
| Attn: Xxxx Xxxxxxxx, General Counsel | ||||
| 0000 Xxxxx Xxxx, Xxx. 000 | ||||
| Xxxxxxxxxx, Xxxx 00000 | ||||
| Manatt, Xxxxxx & Xxxxxxxx LLP | ||||
| Attn: Xxxxx X. Xxxxxxxx | ||||
| 00000 X. Xxxxxxx Xxxx. | ||||
| Xxx Xxxxxxx, XX 00000 | ||||
| if to the Seller: | ||||
| Personal & Confidential | ||||
| Xxxxx Union Bank and Trust Company | ||||
| Attn: Xxxx Xxxxxx, President | ||||
| 000 Xxxxxxxxxx Xx. | ||||
| Xxxxxxxx, Xxxxxxx 00000 | ||||
| with a copy to: | Xxxxx Financial Corporation | |||
| Attn: Xxxxxx X. Xxxxxxx, General Counsel | ||||
| 000 Xxxxxxxxxx Xx. | ||||
| Xxxxxxxx, Xxxxxxx 00000 | ||||
| Xxxxxx X. Xxxxxxx | ||||
| Xxxxxx & Xxxxxxxxx LLP | ||||
| 00 X. Xxxxxxxx Xxxxxx | ||||
| Xxxxxxxxxxxx, XX 00000 |
or to such other address or to such other Person such party may designate in a writing and provide
to the other party in the manner provided for herein.
29. Governing Law. This Agreement shall be governed by and construed in accordance
with the laws of the State of Ohio and applicable federal laws of the United States.
30. Descriptive Headings. The descriptive headings in this Agreement are inserted for
convenience and reference only and are not intended to be part of or to affect the meaning or
interpretation of this Agreement.
31. Parties in Interest; Third Party Beneficiaries. This Agreement shall be binding
upon and will inure solely to the benefit of the parties hereto, and to their respective successors
and permitted assigns. Except as provided in Section 20, nothing in this Agreement, expressed or
implied, is intended, or shall be construed, to confer upon or give to any Person (other than the
parties hereto and their successors and permitted assigns) any rights or remedies under or by
reason of this Agreement or any term, provision, condition, undertaking, warranty, representation,
indemnity, covenant or agreement contained herein.
32. Expenses. Except as otherwise expressly provided for herein, the parties hereto
agree that each shall pay its respective costs and expenses of performance of and compliance
58
with the covenants, conditions, and agreements to be performed or complied with by it
hereunder. Buyer and Seller will each be responsible for their respective data processing
conversion and de-conversion charges, if any, that may be assessed by their respective data
processing vendors.
33. Specific Performance. The parties agree that irreparable damage would occur in
the event that provisions contained in this Agreement are not performed in accordance with their
specific terms or were otherwise breached. It is accordingly agreed that the parties shall be
entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce
specifically the terms and provisions of this Agreement (including the parties’ obligation to
consummate this Agreement subject to the terms of this Agreement and provided all required
Regulatory Approvals have been obtained) in any court of the United States or any state having
jurisdiction, this being in addition to any other remedy to which the parties are entitled at law
or in equity or under this Agreement. Any requirements for the securing or posting of any bond with
respect to any such remedy is hereby waived.
34. Assignability. Neither Buyer nor Seller may assign any of their rights,
liabilities or obligations under the Agreement without the prior written consent of the other party
to this Agreement, provided that Buyer may assign its rights, liabilities and obligations under the
Agreement to any one of its Affiliates. Any purported assignment in contravention of this Section
34 shall be void.
35. Counterparts. This Agreement may be executed in one or more counterparts, each of
which shall be deemed to be an original but all of which together shall constitute one and the same
instrument. If Buyer and Seller so elect, this Agreement shall be deemed to be executed at such
time as all parties exchange duly executed signature pages via facsimile or other electronic
transmission, provided that each party shall thereafter mail to the other party an original of this
Agreement bearing such party’s signature.
36. Press Releases. Prior to the Closing Date, neither Buyer, Seller nor any of their
respective Affiliates shall directly or indirectly make or cause to be made any press release for
general circulation, public announcement or disclosure or issue any notice or communication to
employees with respect to any of the transactions contemplated hereby without the prior written
consent of the other party (which consent shall not be unreasonably withheld, conditioned or
delayed). Buyer and Seller each agree that, without the other party’s prior written consent,
neither Buyer, Seller nor any of their respective Affiliates shall release or disclose any of the
terms or conditions of the transactions contemplated herein to any other Person. Notwithstanding
the foregoing, each party may make such public disclosure as, upon advice of its counsel and with
as much prior notice to the other party as reasonably practicable, may be required by Legal
Requirement or as necessary to obtain the Regulatory Approvals or to comply with the federal
securities laws.
37. Confidentiality. All information disclosed or furnished by one party to another,
whether orally or in writing, in connection with this Agreement and Buyer’s due diligence
examination of Seller and the documents and other records produced in the course thereof shall be
deemed to be proprietary and confidential information of the disclosing party. The receiving party
agrees not to disclose such information to any third party other than its representatives or
employees or, upon the advice of its counsel, as may be required by Legal Requirement or as
59
necessary to obtain the Regulatory Approvals or to comply with the federal securities laws, or
as otherwise contemplated in this Agreement or the exhibits, annexes and schedules hereto. In
connection with any such disclosure, the disclosing party shall give the other party as much prior
notice to the other party as reasonably practicable. Regardless of whether the Closing occurs
hereunder, each party agrees that it shall not use or disclose, and shall cause its Affiliates not
to use or disclose the proprietary or confidential information of the other party for any purpose,
including the solicitation of customers or business of the other party, for a period of two (2)
years. Notwithstanding the foregoing, each party shall protect and hold in confidence any
Nonpublic Personal Information (as defined in Title V of the Xxxxx-Xxxxx-Xxxxxx Act) obtained from
the other party in compliance with applicable law.
38. Termination Fee.
(a) In the event that this Agreement is terminated by Buyer pursuant to Sections 25(b)-(h) or
the parties otherwise fail to consummate the Closing for any reason whatsoever, in either such
event, other than as a result of a breach by Buyer of any of its representations, warranties,
covenants or agreements contained in this Agreement, which is not cured or cannot be cured within
thirty (30) days after written notice of such breach has been delivered to Buyer and which would,
if occurring or continuing on the Closing Date, permit the Seller not to consummate the
transactions contemplated hereby under the standard set forth in Section 7(b) or 7(c), as
applicable, then Seller shall pay to Buyer as promptly as reasonably practicable (and in any event,
within two (2) Business Days following such termination) by wire transfer in immediately available
funds to an account specified by Buyer in writing to Seller a payment of Five Million Dollars Even
($5,000,000.00) (a “Termination Fee”), and Seller shall provide written unconditional
releases, in a form reasonably satisfactory to Buyer, of all current employees of Buyer, for such
period as they remain employees of Buyer or any of its Affiliates, from any and all
non-solicitation and non-compete agreements and/or arrangements with Seller.
(b) Seller acknowledges that the agreements contained in this Section 38 are an integral part
of the transactions contemplated by this Agreement, that, without these agreements, Buyer would not
enter into this Agreement and the Termination Fee is not liquidated damages. Buyer shall be
entitled to receive payment of the Termination Fee, as well as, for any damages actually incurred
by Buyer in excess of the Termination Fee, including, but not limited to, damages resulting from
fraud or intentional misrepresentation on the part of Seller. If Buyer seeks its remedies as set
forth in this Section 38 of the Agreement, and Seller pays the amounts owing to Buyer under this
Section 38, then Buyer will not have any right, equitable or otherwise, to require or otherwise
compel Seller to consummate the transactions contemplated by this Agreement. For the avoidance of
doubt, the amount of damages that Buyer may recover from Seller pursuant to this Section 38 shall
not be governed or limited by Section 20 of this Agreement, which Section 20 only applies to claims
for indemnification made by Buyer or Seller, if any, following the Closing.
(c) If Seller fails to promptly pay the Termination Fee when due in accordance with the
applicable requirements of Section 38, and, in order to obtain such payments Buyer commences a suit
that results in a judgment against Seller for the Termination Fee, Seller shall pay to Buyer its
costs and expenses (including reasonable attorney’s fees) in connection with such suit.
60
39. Exclusive Dealing.
(a) During the period from the date of this Agreement to the earlier of the Closing Date or
the termination of this Agreement, neither Seller nor any of its Affiliates or representatives
shall take any action to, directly or indirectly, encourage, initiate, or otherwise engage in
discussions or negotiations with, or provide any information to, any Person (other than Buyer and
its Affiliates and representatives) concerning any direct or indirect merger, acquisition, stock
purchase or asset purchase, consolidation or other similar business combination transaction of
Seller that includes the Branches, the Assets and/or the Liabilities, in each case, other than the
transactions contemplated by this Agreement. Seller will promptly (but in no event later than
twenty-four (24) hours) communicate to Buyer the terms of any proposal or inquiry that they or any
of their Affiliates or representatives may receive in writing in respect of any such transaction,
or of any such negotiations or discussions being sought to be initiated with Seller or any of their
Affiliates or representatives and the identity of such third party initiating any such proposal,
inquiry, discussion or negotiation.
(b) Seller shall ensure its respective representatives are aware of the restrictions described
in this Section 39 as reasonably necessary to avoid violations thereof. It is understood that any
violation of the restrictions set forth in this Section 39 by any representative of Seller shall be
deemed to be a breach of this Section 39 by Seller.
40. Severability. If any provision of this Agreement, as applied to any party or
circumstance shall be judged by a court of competent jurisdiction to be void, invalid or
unenforceable , the same shall in no way effect any other provision of this Agreement, the
application of any such provision and any other circumstances or the validity or enforceability of
the other provisions of this Agreement.
**SIGNATURE PAGE FOLLOWS**
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The parties have caused this Agreement to be executed on their behalf by duly authorized
officers.
| FIRST FINANCIAL BANK, N.A. | ||||||
| By: Name: |
/s/ Xxxxxx X. Xxxxx
|
|||||
| Title: | President and Chief Executive Officer | |||||
| XXXXX UNION BANK AND TRUST COMPANY | ||||||
| By: Name: |
/s/ Xxxxxxx X. Xxxxx
|
|||||
| Title: | Vice President and Chief Administrative Officer | |||||
Solely with regard to the sale of the Premises:
| XXXXX UNION REALTY, INC. | ||||||
| By: Name: |
/s/ Xxxx X. Xxxxxxxx
|
|||||
| Title: | Vice President | |||||
SIGNATURE PAGE TO PURCHASE AND ASSUMPTION AGREEMENT
LIST OF ANNEXES, EXHIBITS AND SCHEDULES
Annex and Exhibits |
||
Annex I:
|
Definitions | |
Exhibit A:
|
Form of Xxxx of Sale | |
Exhibit B:
|
Form of Lease Assignment and Assumption Agreement | |
Exhibit C:
|
Form of Assignment and Assumption Agreement | |
Exhibit D:
|
Form of Power of Attorney | |
Exhibit E:
|
Form of Escrow Agreement | |
Exhibit F:
|
Draft Closing Statement | |
| Schedules to Agreement | ||
Schedule 1:
|
Branches/Premises | |
Schedule 2:
|
Personal Property | |
Schedule 2(a)(6):
|
Accrued Liabilities | |
Schedule 3:
|
Prepaid Expenses | |
Schedule 4(a)(i):
|
Loans | |
Schedule 5:
|
Assigned Contracts | |
Schedule 6:
|
Additional Assets | |
Schedule 8:
|
Deposit Liabilities | |
| Seller Disclosure Schedules to Agreement | ||
Schedule 9(e):
|
Environmental Matters | |
Schedule 9(f):
|
Loan Commitments or Modifications | |
Schedule 9(f)(x)
|
Casualty Insurance | |
Schedule 9(f)(xi)
|
Flood Insurance | |
Schedule 9(g):
|
Loss of Business | |
Schedule 9(h):
|
Seller Litigation | |
Schedule 9(i)(1),(3):
|
Regulatory Agreements and Cease and Desist Orders | |
F-1
Schedule 9(k)(2),(3):
|
Regulatory Actions and Consents | |
Schedule 9(o):
|
Employment Agreements, Non-Compete Agreements or other Contracts or Arrangements | |
Schedule 9(p):
|
Tax Matters | |
Schedule 9(q)(1)
|
Licensed IP | |
Schedule 12:
|
Seller’s Covenants | |
Schedule 12(g):
|
Personal Property Commitments | |
Schedule 12(p):
|
Premises Material Improvements | |
Schedule 15(e)
|
No Solicitation | |
| Buyer Disclosure Schedule to Agreement | ||
Schedule 11(d):
|
Buyer’s Regulatory Approvals | |
F-2
