EXHIBIT 2
PURCHASE & ASSUMPTION AGREEMENT DATED OCTOBER 10, 2008
PURCHASE AND ASSUMPTION AGREEMENT
DEPOSITS
AMONG
FEDERAL DEPOSIT INSURANCE CORPORATION,
RECEIVER OF MAIN STREET BANK,
NORTHVILLE, MICHIGAN
FEDERAL DEPOSIT INSURANCE CORPORATION
AND
MONROE BANK & TRUST
MONROE, MICHIGAN
DATED AS OF
OCTOBER 10, 2008
TABLE OF CONTENTS
ARTICLE I DEFINITIONS...................................................... 2
ARTICLE II ASSUMPTION OF LIABILITIES....................................... 9
2.1 Liabilities Assumed by Assuming Bank............................. 9
2.2 Interest on Deposit Liabilities.................................. 10
2.3 Unclaimed Deposits............................................... 10
2.4 Employee Benefit Plans........................................... 11
ARTICLE III PURCHASE OF ASSETS............................................. 11
3.1 Assets Purchased by Assuming Bank................................ 11
3.2 Asset Purchase Price............................................. 12
3.3 Manner of Conveyance; Limited Warranty; Nonrecourse; Etc......... 12
3.4 Puts of Assets to the Receiver................................... 13
3.5 Assets Not Purchased by Assuming Bank............................ 15
3.6 Assets Essential to Receiver..................................... 16
ARTICLE IV ASSUMPTION OF CERTAIN DUTIES AND OBLIGATIONS.................... 17
4.1 Continuation of Banking Business................................. 17
4.2 Agreement with Respect to Credit Card Business................... 17
4.3 Agreement with Respect to Safe Deposit Business.................. 18
4.4 Agreement with Respect to Safekeeping Business................... 18
4.5 Agreement with Respect to Trust Business......................... 18
4.6 Agreement with Respect to Bank Premises.......................... 19
4.7 Agreement with Respect to Leased Data Processing Equipment....... 22
4.8 Agreement with Respect to Certain Existing Agreements............ 22
4.9 Informational Tax Reporting...................................... 23
4.10 Insurance........................................................ 23
4.11 Office Space for Receiver and Corporation........................ 23
4.12 Agreement with Respect to Continuation of Group Health Plan
Coverage for Former Employees of the Failed Bank.............. 24
4.13 Agreement with Respect to Interim Asset Servicing ............... 25
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ARTICLE V DUTIES WITH RESPECT TO DEPOSITORS OF THE FAILED BANK............. 25
5.1 Payment of Checks, Drafts and Orders............................. 25
5.2 Certain Agreements Related to Deposits........................... 25
5.3 Notice to Depositors............................................. 25
ARTICLE VI RECORDS......................................................... 26
6.1 Transfer of Records.............................................. 26
6.2 Delivery of Assigned Records..................................... 27
6.3 Preservation of Records.......................................... 27
6.4 Access to Records; Copies........................................ 27
ARTICLE VII BID; INITIAL PAYMENT........................................... 27
ARTICLE VIII ADJUSTMENTS................................................... 28
8.1 Pro Forma Statement.............................................. 28
8.2 Correction of Errors and Omissions; Other Liabilities............ 28
8.3 Payments......................................................... 29
8.4 Interest......................................................... 29
8.5 Subsequent Adjustments........................................... 29
ARTICLE IX CONTINUING COOPERATION.......................................... 29
9.1 General Matters.................................................. 29
9.2 Additional Title Documents....................................... 29
9.3 Claims and Suits................................................. 30
9.4 Payment of Deposits.............................................. 30
9.5 Withheld Payments................................................ 30
9.6 Proceedings with Respect to Certain Assets and Liabilities....... 31
9.7 Information...................................................... 31
ARTICLE X CONDITION PRECEDENT.............................................. 32
ARTICLE XI REPRESENTATIONS AND WARRANTIES OF THE ASSUMING BANK............. 32
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ARTICLE XII INDEMNIFICATION................................................ 33
12.1 Indemnification of Indemnitees................................... 33
12.2 Conditions Precedent to Indemnification.......................... 36
12.3 No Additional Warranty........................................... 37
12.4 Indemnification of Corporation and Receiver...................... 37
12.5 Obligations Supplemental......................................... 37
12.6 Criminal Claims.................................................. 38
12.7 Limited Guaranty of the Corporation.............................. 38
12.8 Subrogation...................................................... 38
ARTICLE XIII MISCELLANEOUS................................................. 38
13.1 Entire Agreement................................................. 38
13.2 Headings......................................................... 38
13.3 Counterparts..................................................... 39
13.4 Governing Law.................................................... 39
13.5 Successors....................................................... 39
13.6 Modification; Assignment......................................... 39
13.7 Notice........................................................... 39
13.8 Manner of Payment................................................ 40
13.9 Costs, Fees and Expenses......................................... 40
13.10 Waiver........................................................... 41
13.11 Severability..................................................... 41
13.12 Term of Agreement................................................ 41
13.13 Survival of Covenants, Etc....................................... 41
SCHEDULES
2.1 Certain Liabilities Assumed...................................... 43
3.1 Certain Assets Purchased......................................... 44
3.1(e) Loans Fully Secured by Assumed Deposits.......................... 45
3.1(i) Acquired subsidiaries ........................................... 46
3.2 Purchase Price of Assets or assets............................... 47
3.5(k) Securities Not Purchased......................................... 49
EXHIBITS
4.13 Interim Asset Servicing Arrangement.............................. 50
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PURCHASE AND ASSUMPTION AGREEMENT
DEPOSITS
THIS AGREEMENT, made and entered into as of October 10, 2008, by and among
the FEDERAL DEPOSIT INSURANCE CORPORATION, RECEIVER XX XXXX XXXXXX XXXX,
XXXXXXXXXX, XXXXXXXX (the "Receiver"), Monroe Bank & Trust, organized under the
laws of Michigan, and having its principal place of business in Monroe, Michigan
(the "Assuming Bank"), and the FEDERAL DEPOSIT INSURANCE CORPORATION, organized
under the laws of the United States of America and having its principal office
in Washington, D.C., acting in its corporate capacity (the "Corporation").
WITNESSETH:
WHEREAS, on Bank Closing Date, the Chartering Authority closed Main Street
Bank (the "Failed Bank") pursuant to applicable law and the Corporation was
appointed Receiver thereof; and
WHEREAS, the Assuming Bank desires to purchase certain assets and assume
certain deposit and other liabilities of the Failed Bank on the terms and
conditions set forth in this Agreement; and
WHEREAS, pursuant to 12 U.S.C. Section 1823(c)(2)(A), the Corporation may
provide assistance to the Assuming Bank to facilitate the transactions
contemplated by this Agreement, which assistance may include indemnification
pursuant to Article XII; and
WHEREAS, the Board of Directors of the Corporation (the "Board") has
determined to provide assistance to the Assuming Bank on the terms and subject
to the conditions set forth in this Agreement; and
WHEREAS, the Board has determined pursuant to 12 U.S.C. Section
1823(c)(4)(A) that such assistance is necessary to meet the obligation of the
Corporation to provide insurance coverage for the insured deposits in the Failed
Bank and is the least costly to the deposit insurance fund of all possible
methods for meeting such obligation.
NOW THEREFORE, in consideration of the mutual promises herein set forth and
other valuable consideration, the parties hereto agree as follows:
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ARTICLE I
DEFINITIONS
Capitalized terms used in this Agreement shall have the meanings set forth
in this Article I, or elsewhere in this Agreement. As used herein, words
imparting the singular include the plural and vice versa.
"ACCOUNTING RECORDS" means the general ledger and supporting
subsidiary ledgers and schedules.
"ACQUIRED SUBSIDIARIES" has the meaning provided in Section 3.1.
"AFFILIATE" of any Person means any director, officer, or employee of
that Person and any other Person (i) who is directly or indirectly controlling,
or controlled by, or under direct or indirect common control with, such Person,
or (ii) who is an affiliate of such Person as the term "affiliate" is defined in
Section 2 of the Bank Holding Company Act of 1956, as amended, 12 U.S.C. Section
1841.
"AGREEMENT" means this Purchase and Assumption Agreement by and among
the Assuming Bank, the Corporation and the Receiver, as amended or otherwise
modified from time to time.
"ASSETS" means all assets of the Failed Bank purchased pursuant to
Section 3.1. Assets owned by Subsidiaries of the Failed Bank are not "Assets"
within the meaning of this definition.
"ASSUMED DEPOSITS" means Deposits
"BANK CLOSING DATE" means the close of business of the Failed Bank on
the date on which the Chartering Authority closed such institution.
"BANK PREMISES" means the banking houses, drive-in banking facilities,
and teller facilities (staffed or automated) together with appurtenant parking,
storage and service facilities and structures connecting remote facilities to
banking houses, and land on which the foregoing are located, that are owned or
leased by the Failed Bank and that are occupied by the Failed Bank as of the
Bank Closing Date.
"BID AMOUNT" has the meaning provided in Article VII.
"BOOK VALUE" means, with respect to any Asset and any Liability
Assumed, the dollar amount thereof stated on the Accounting Records of the
Failed Bank. The Book Value of any item shall be determined as of the Bank
Closing Date after adjustments made by the Receiver for differences in accounts,
suspense items, unposted debits and credits, and other similar adjustments or
corrections and for setoffs, whether voluntary or involuntary. The Book Value of
an Acquired Subsidiary shall be determined from the investment in subsidiary and
related accounts on the "bank only" (unconsolidated) balance sheet of the Failed
Bank based on
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the equity method of accounting. Without limiting the generality of the
foregoing, (i) the Book Value of a Liability Assumed shall include all accrued
and unpaid interest thereon as of the Bank Closing Date, and (ii) the Book Value
of a Loan shall reflect adjustments for earned interest, or unearned interest
(as it relates to the "rule of 78s" or add-on-interest loans, as applicable), if
any, as of the Bank Closing Date, adjustments for the portion of earned or
unearned loan-related credit life and/or disability insurance premiums, if any,
attributable to the Failed Bank as of the Bank Closing Date, and adjustments for
Failed Bank Advances, if any, in each case as determined for financial reporting
purposes. The Book Value of an Asset shall not include any adjustment for loan
premiums, discounts or any related deferred income or fees, or general or
specific reserves on the Accounting Records of the Failed Bank.
"BUSINESS DAY" means any day other than a Saturday, Sunday or federal
legal holiday.
"CHARTERING AUTHORITY" means (i) with respect to a national bank, the
Office of the Comptroller of the Currency, (ii) with respect to a Federal
savings association or savings bank, the Office of Thrift Supervision, (iii)
with respect to a bank or savings institution chartered by a State, the agency
of such State charged with primary responsibility for regulating and/or closing
banks or savings institutions, as the case may be, (iv) the Corporation in
accordance with 12 U.S.C. Section 1821(c), with regard to self appointment, or
(v) the appropriate Federal banking agency in accordance with 12 U.S.C. Section
1821(c)(9).
"COMMITMENT" means the unfunded portion of a line of credit or other
commitment reflected on the books and records of the Failed Bank to make an
extension of credit (or additional advances with respect to a Loan) that was
legally binding on the Failed Bank as of Bank Closing, other than extensions of
credit pursuant to the credit card business and overdraft protection plans of
the Failed Bank, if any.
"CREDIT DOCUMENTS" mean the agreements, instruments, certificates or
other documents at any time evidencing or otherwise relating to, governing or
executed in connection with or as security for, a Loan, including without
limitation notes, bonds, loan agreements, letter of credit applications, lease
financing contracts, banker's acceptances, drafts, interest protection
agreements, currency exchange agreements, repurchase agreements, reverse
repurchase agreements, guarantees, deeds of trust, mortgages, assignments,
security agreements, pledges, subordination or priority agreements, lien
priority agreements, undertakings, security instruments, certificates,
documents, legal opinions, participation agreements and intercreditor
agreements, and all amendments, modifications, renewals, extensions,
rearrangements, and substitutions with respect to any of the foregoing.
"DATA PROCESSING LEASE" means any lease or licensing agreement,
binding on the Failed Bank as of the Bank Closing Date, the subject of which is
data processing equipment or computer hardware or software used in connection
with data processing activities. A lease or licensing agreement for computer
software used in connection with data processing activities shall constitute a
Data Processing Lease regardless of whether such lease or licensing agreement
also covers data processing equipment.
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"DEPOSIT" means a deposit as defined in 12 U.S.C. Section 1813(l),
including, without limitation, outstanding cashier's checks and other official
checks and all uncollected items included in the depositors' balances and
credited on the books and records of the Failed Bank; provided, that the term
"Deposit" shall not include all or any portion of those deposit balances which,
in the discretion of the Receiver or the Corporation, (i) may be required to
satisfy it for any liquidated or contingent liability of any depositor arising
from an unauthorized or unlawful transaction, or (ii) may be needed to provide
payment of any liability of any depositor to the Failed Bank or the Receiver,
including the liability of any depositor as a director or officer of the Failed
Bank, whether or not the amount of the liability is or can be determined as of
Bank Closing.
"FAILED BANK ADVANCES" means the total sums paid by the Failed Bank to
(i) protect its lien position, (ii) pay ad valorem taxes and hazard insurance,
and (iii) pay credit life insurance, accident and health insurance, and vendor's
single interest insurance.
"FAIR MARKET VALUE" means (i)(a) "Market Value" as defined in the
regulation prescribing the standards for real estate appraisals used in
federally related transactions, 12 C.F.R. Section 323.2(g), and accordingly
shall mean the most probable price which a property should bring in a
competitive and open market under all conditions requisite to a fair sale, the
buyer and seller each acting prudently and knowledgeably, and assuming the price
is not affected by undue stimulus. Implicit in this definition is the
consummation of a sale as of a specified date and the passing of title from
seller to buyer under conditions whereby:
(1) Buyer and seller are typically motivated;
(2) Both parties are well informed or well advised, and acting in what they
consider their own best interests;
(3) A reasonable time is allowed for exposure in the open market;
(4) Payment is made in terms of cash in U.S. dollars or in terms of
financial arrangements comparable thereto; and
(5) The price represents the normal consideration for the property sold
unaffected by special or creative financing or sales concessions granted by
anyone associated with the sale;
as determined as of the Bank Closing Date by an appraiser mutually acceptable to
the Receiver and the Assuming Bank; any costs and fees associated with such
determination shall be shared equally by the Receiver and the Assuming Bank, and
(b) which, with respect to Bank Premises (to the extent, if any, that Bank
Premises are purchased utilizing this valuation method), shall be determined not
later than sixty (60) days after the Bank Closing Date by an appraiser selected
by the Receiver and the Assuming Bank within seven (7) days after the Bank
Closing Date; or (ii) with respect to property other than Bank Premises
purchased utilizing this valuation method, the price therefor as established by
the Receiver and agreed to by the Assuming Bank, or in the absence of such
agreement, as determined in accordance with clause (i)(a) above.
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"FIXTURES" means those leasehold improvements, additions, alterations
and installations constituting all or a part of Bank Premises and which were
acquired, added, built, installed or purchased at the expense of the Failed
Bank, regardless of the holder of legal title thereto as of the Bank Closing
Date.
"FURNITURE AND EQUIPMENT" means the furniture and equipment (other
than Safe Deposit Boxes, motor vehicles and leased data processing equipment,
including hardware and software), leased or owned by the Failed Bank and
reflected on the books of the Failed Bank as of the Bank Closing Date, including
without limitation automated teller machines, carpeting, furniture, office
machinery (including personal computers), shelving, office supplies, telephone,
surveillance and security systems, and artwork.
"INDEMNITEES" means, except as provided in paragraph (k) of Section
12.1, (i) the Assuming Bank, (ii) the Subsidiaries and Affiliates of the
Assuming Bank other than any Subsidiaries or Affiliates of the Failed Bank that
are or become Subsidiaries or Affiliates of the Assuming Bank, and (iii) the
directors, officers, employees and agents of the Assuming Bank and its
Subsidiaries and Affiliates who are not also present or former directors,
officers, employees or agents of the Failed Bank or of any Subsidiary or
Affiliate of the Failed Bank.
"INITIAL PAYMENT" means the payment made pursuant to Article VII
(based on the best information available as of the Bank Closing Date), the
amount of which shall be either (i) if the Bid Amount is positive, the aggregate
Book Value of the Liabilities Assumed minus the sum of the aggregate purchase
price of the Assets and assets purchased and the positive Bid Amount, or (ii) if
the Bid Amount is negative, the sum of the aggregate Book Value of the
Liabilities Assumed and the negative Bid Amount minus the aggregate purchase
price of the Assets and assets purchased. The Initial Payment shall be payable
by the Corporation to the Assuming Bank if (i) the Liabilities Assumed are
greater than the sum of the positive Bid Amount and the Assets and assets
purchased, or if (ii) the sum of the Liabilities Assumed and the negative Bid
Amount are greater than the Assets and assets purchased. The Initial Payment
shall be payable by the Assuming Bank to the Corporation if (i) the Liabilities
Assumed are less than the sum of the positive Bid Amount and the Assets and
assets purchased, or if (ii) the sum of the Liabilities Assumed and the negative
Bid Amount is less than the Assets and assets purchased. Such Initial Payment
shall be subject to adjustment as provided in Article VIII.
"DEPOSITS" means the net amount due to any depositor with respect to
its Deposits as determined by the Receiver or the Corporation pursuant to 12
U.S.C. Section 1813(m), and applicable regulations at 12 C.F.R. Part 330.
"LEGAL BALANCE" means the amount of indebtedness legally owed by an
Obligor with respect to a Loan, including principal and accrued and unpaid
interest, late fees, attorneys' fees and expenses, taxes, insurance premiums,
and similar charges, if any.
"LIABILITIES ASSUMED" has the meaning provided in Section 2.1.
"LIEN" means any mortgage, lien, pledge, charge, assignment for
security purposes, security interest, or encumbrance of any kind with respect to
an Asset, including any
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conditional sale agreement or capital lease or other title retention agreement
relating to such Asset.
"LOAN FILE" means all Credit Documents and all other credit,
collateral, or insurance documents in the possession or custody of the Assuming
Bank, or any of its Subsidiaries or Affiliates, relating to an Asset or a Loan
included in a Put Notice, or copies of any thereof.
"LOANS" means all of the following owed to or held by the Failed Bank
as of the Bank Closing Date:
(i) loans, participation agreements, interests in participations,
overdrafts of customers (including but not limited to overdrafts made pursuant
to an overdraft protection plan or similar extensions of credit in connection
with a deposit account), revolving commercial lines of credit, home equity lines
of credit, United States and/or State-guaranteed student loans, and lease
financing contracts;
(ii) all Liens, rights (including rights of set-off), remedies,
powers, privileges, demands, claims, priorities, equities and benefits owned or
held by, or accruing or to accrue to or for the benefit of, the holder of the
obligations or instruments referred to in clause (i) above, including but not
limited to those arising under or based upon Credit Documents, casualty
insurance policies and binders, standby letters of credit, mortgagee title
insurance policies and binders, payment bonds and performance bonds at any time
and from time to time existing with respect to any of the obligations or
instruments referred to in clause (i) above; and
(iii) all amendments, modifications, renewals, extensions,
refinancings, and refundings of or for any of the foregoing;
provided, that there shall be excluded from the definition of Loans (a) any
portion of the foregoing which the Failed Bank or the Assuming Bank (or any of
their respective Subsidiaries) holds not for its own account but solely as agent
or fiduciary for, or otherwise as representative of, any other Person, (b) any
loans which have been charged off the Accounting Records of the Failed Bank in
whole or in part prior to the Bank Closing Date, (c) loans recorded on the
Accounting Records of the Failed Bank on "in substance foreclosure" status as of
the Bank Closing Date, (d) Commitments and (e) amounts owing under Qualified
Financial Contracts.
"OBLIGOR" means each Person liable for the full or partial payment or
performance of any Loan, whether such Person is obligated directly, indirectly,
primarily, secondarily, jointly, or severally.
"PAYMENT DATE" means the first Business Day after the Bank Closing
Date.
"PERSON" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization,
or government or any agency or political subdivision thereof, excluding the
Corporation.
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"PRIMARY INDEMNITOR" means any Person (other than the Assuming Bank or
any of its Affiliates) who is obligated to indemnify or insure, or otherwise
make payments (including payments on account of claims made against) to or on
behalf of any Person in connection with the claims covered under Article XII,
including without limitation any insurer issuing any directors and officers
liability policy or any Person issuing a financial institution bond or banker's
blanket bond.
"PUT DATE" has the meaning provided in Section 3.4.
"PUT NOTICE" has the meaning provided in Section 3.4.
"QUALIFIED FINANCIAL CONTRACT" means a qualified financial contract as
defined in 12 U.S.C. Section 1821(e)(8)(D).
"RECORD" means any document, microfiche, microfilm and computer
records (including but not limited to magnetic tape, disc storage, card forms
and printed copy) of the Failed Bank generated or maintained by the Failed Bank
that is owned by or in the possession of the Receiver at the Bank Closing Date.
"RELATED LIABILITY" with respect to any Asset means any liability
existing and reflected on the Accounting Records of the Failed Bank as of the
Bank Closing Date for (i) indebtedness secured by mortgages, deeds of trust,
chattel mortgages, security interests or other liens on or affecting such Asset,
(ii) ad valorem taxes applicable to such Asset, and (iii) any other obligation
determined by the Receiver to be directly related to such Asset.
"RELATED LIABILITY AMOUNT" with respect to any Related Liability on
the books of the Assuming Bank, means the amount of such Related Liability as
stated on the Accounting Records of the Assuming Bank (as maintained in
accordance with generally accepted accounting principles) as of the date as of
which the Related Liability Amount is being determined. With respect to a
liability that relates to more than one asset, the amount of such Related
Liability shall be allocated among such assets for the purpose of determining
the Related Liability Amount with respect to any one of such assets. Such
allocation shall be made by specific allocation, where determinable, and
otherwise shall be pro rata based upon the dollar amount of such assets stated
on the Accounting Records of the entity that owns such asset.
"REPURCHASE PRICE" means with respect to any Asset or asset, which
shall be determined by the Receiver, the lesser of (a) or (b):
(a) the amount paid by the Assuming Bank, decreased by the amount of
any money received with respect thereto since the Bank Closing Date and, if the
Asset is a Loan or other interest bearing or earning asset, the resulting amount
shall then be increased or decreased, as the case may be, by interest or
discount (whichever is applicable) accrued from and after the Bank Closing Date
at the lower of: (i) the contract rate with respect to such Asset, or (ii) the
Settlement Interest Rate; net proceeds received by or due to the Assuming Bank
from the sale of
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collateral, any forgiveness of debt, or otherwise shall be deemed money received
by the Assuming Bank; or
(b) the dollar amount thereof stated on the Accounting Records of the
Assuming Bank as of the date as of which the Repurchase Price is being
determined, as maintained in accordance with generally accepted accounting
principles, and, if the asset is a Loan, regardless of the Legal Balance thereof
and adjusted in the same manner as the Book Value of a Failed Bank Loan would be
adjusted hereunder.
Provided, however, (b), above, shall not be applicable for Loans repurchased
pursuant to Section 3.4(a).
If any Asset or asset is purchased as part of a group of Assets or assets for
Book Value and/or as a percentage of Book Value, the amount paid by the Assuming
Bank, for purposes of (a), above, shall be the Book Value, as of the date of the
Bank Closing Date, of the individual Asset or asset being repurchased
multiplied, if applicable, by the percentage paid.
"SAFE DEPOSIT BOXES" means the safe deposit boxes of the Failed Bank,
if any, including the removable safe deposit boxes and safe deposit stacks in
the Failed Bank's vault(s), all rights and benefits (other than fees collected
prior to the Bank Closing Date) under rental agreements with respect to such
safe deposit boxes, and all keys and combinations thereto.
"SETTLEMENT DATE" means the first Business Day immediately prior to
the day which is one hundred eighty (180) days after the Bank Closing Date, or
such other date prior thereto as may be agreed upon by the Receiver and the
Assuming Bank. The Receiver, in its discretion, may extend the Settlement Date.
"SETTLEMENT INTEREST RATE" means, for the first calendar quarter or
portion thereof during which interest accrues, the rate determined by the
Receiver to be equal to the equivalent coupon issue yield on twenty-six
(26)-week United States Treasury Bills in effect as of the Bank Closing Date as
published in The Wall Street Journal; provided, that if no such equivalent
coupon issue yield is available as of the Bank Closing Date, the equivalent
coupon issue yield for such Treasury Bills most recently published in The Wall
Street Journal prior to the Bank Closing Date shall be used. Thereafter, the
rate shall be adjusted to the rate determined by the Receiver to be equal to the
equivalent coupon issue yield on such Treasury Bills in effect as of the first
day of each succeeding calendar quarter during which interest accrues as
published in The Wall Street Journal.
"SUBSIDIARY" has the meaning set forth in Section 3(w)(4) of the
Federal Deposit Insurance Act, 12 U.S.C. Section 1813(w)(4), as amended.
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ARTICLE II
ASSUMPTION OF LIABILITIES
2.1 LIABILITIES ASSUMED BY ASSUMING BANK. The Assuming Bank expressly
assumes at Book Value (subject to adjustment pursuant to Article VIII) and
agrees to pay, perform, and discharge all of the following liabilities of the
Failed Bank as of the Bank Closing Date, except as otherwise provided in this
Agreement (such liabilities referred to as "Liabilities Assumed"):
(a) Assumed Deposits; provided, that as to any Deposits of public money
which are Assumed Deposits, the Assuming Bank agrees to properly
secure such Deposits with such of the Assets as appropriate which,
prior to the Bank Closing Date, were pledged as security therefor by
the Failed Bank, or with assets of the Assuming Bank, if such securing
Assets, if any, are insufficient to properly secure such Deposits;
(b) liabilities for indebtedness secured by mortgages, deeds of trust,
chattel mortgages, security interests or other liens on or affecting
any Assets, if any; provided, that the assumption of any liability
pursuant to this paragraph shall be limited to the market value of the
Assets securing such liability as determined by the Receiver;
(c) overdrafts, debit balances, service charges, reclamations, and
adjustments to accounts with the Federal Reserve Banks as reflected on
the books and records of any such Federal Reserve Bank within ninety
(90) days after the Bank Closing Date, if any;
(d) ad valorem taxes applicable to any Asset, if any; provided, that the
assumption of any ad valorem taxes pursuant to this paragraph shall be
limited to an amount equal to the market value of the Asset to which
such taxes apply as determined by the Receiver;
(e) liabilities, if any, for federal funds purchased, repurchase
agreements and overdrafts in accounts maintained with other depository
institutions (including any accrued and unpaid interest thereon
computed to and including the Bank Closing Date); provided, that the
assumption of any liability pursuant to this paragraph shall be
limited to the market value of the Assets securing such liability as
determined by the Receiver;
(f) United States Treasury tax and loan note option accounts, if any;
(g) liabilities for any acceptance or commercial letter of credit (other
than "standby letters of credit" as defined in 12 C.F.R. Section
337.2(a)); provided, that the
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assumption of any liability pursuant to this paragraph shall be
limited to the market value of the Assets securing such liability as
determined by the Receiver;
(h) duties and obligations assumed pursuant to this Agreement including
without limitation those relating to the Failed Bank's credit card
business, overdraft protection plans, safe deposit business,
safekeeping business or trust business, if any; and
(i) liabilities, if any, for amounts owed to any Acquired Subsidiary.
Schedule 2.1 attached hereto and incorporated herein sets forth certain
categories of Liabilities Assumed and the aggregate Book Value of the
Liabilities Assumed in such categories. Such schedule is based upon the best
information available to the Receiver and may be adjusted as provided in Article
VIII.
2.2 INTEREST ON DEPOSIT LIABILITIES. The Assuming Bank agrees that, from
and after the Bank Closing Date, it will accrue and pay interest on Deposit
liabilities assumed pursuant to Section 2.1 at a rate(s) it shall determine;
provided, that for nontransaction Deposit liabilities such rate(s) shall not be
less than the lowest rate offered by the Assuming Bank to its depositors for
nontransaction deposit accounts. The Assuming Bank shall permit each depositor
to withdraw, without penalty for early withdrawal, all or any portion of such
depositor's Deposit, whether or not the Assuming Bank elects to pay interest in
accordance with any deposit agreement formerly existing between the Failed Bank
and such depositor; and further provided, that if such Deposit has been pledged
to secure an obligation of the depositor or other party, any withdrawal thereof
shall be subject to the terms of the agreement governing such pledge. The
Assuming Bank shall give notice to such depositors as provided in Section 5.3 of
the rate(s) of interest which it has determined to pay and of such withdrawal
rights.
2.3 UNCLAIMED DEPOSITS. If, within eighteen (18) months after the Bank
Closing Date, any depositor of the Failed Bank does not claim or arrange to
continue such depositor's Deposit assumed pursuant to Section 2.1 at the
Assuming Bank, the Assuming Bank shall, within fifteen (15) Business Days after
the end of such eighteen (18)-month period, (i) refund to the Corporation the
full amount of each such Deposit (without reduction for service charges), (ii)
provide to the Corporation a schedule of all such refunded Deposits in such form
as may be prescribed by the Corporation, and (iii) assign, transfer, convey and
deliver to the Receiver all right, title and interest of the Assuming Bank in
and to Records previously transferred to the Assuming Bank and other records
generated or maintained by the Assuming Bank pertaining to such Deposits. During
such eighteen (18)-month period, at the request of the Corporation, the Assuming
Bank promptly shall provide to the Corporation schedules of unclaimed deposits
in such form as may be prescribed by the Corporation.
2.4 EMPLOYEE BENEFIT PLANS. Except as provided in Section 4.12, the
Assuming Bank shall have no liabilities, obligations or responsibilities under
the Failed Bank's health care, bonus, vacation, pension, profit sharing or stock
purchase plans or similar plans, if any, unless the Receiver and the Assuming
Bank agree otherwise subsequent to the date of this Agreement.
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ARTICLE III
PURCHASE OF ASSETS
3.1 ASSETS PURCHASED BY ASSUMING BANK. Subject to Sections 3.5 and 3.6, the
Assuming Bank hereby purchases from the Receiver, and the Receiver hereby sells,
assigns, transfers, conveys, and delivers to the Assuming Bank, all right,
title, and interest of the Receiver in and to all of the following:
(a) cash and receivables from depository institutions, including cash
items in the process of collection, plus any accrued interest thereon
computed to and including the Bank Closing Date;
(b) securities (other than the capital stock of Subsidiaries of the Failed
Bank and those securities referred to in Section 3.5(k), if any), plus
any accrued interest thereon computed to and including the Bank
Closing Date;
(c) federal funds sold and repurchase agreements, if any, including any
accrued interest thereon computed to and including the Bank Closing
Date;
(d) Omitted;
(e) Loans secured, in whole or in part, by Assumed Deposits or deposits at
other depository institutions, but only such of those Loans which also
are listed on Schedule 3.1(e), if any;
(f) credit card business, if any, including all outstanding extensions of
credit, subject to Section 4.2;
(g) Safe Deposit Boxes and related business, safekeeping business and
trust business, if any, subject to Section 4.3, 4.4 or 4.5,
respectively;
(h) Records and other documents as provided in Section 6.1;
(i) capital stock of the Subsidiaries of the Failed Bank listed on
Schedule 3.1(i), if any (the "Acquired Subsidiaries");
(j) amounts owed to the Failed Bank by any Acquired Subsidiary;
(k) assets securing Deposits of public money, to the extent not otherwise
purchased hereunder; and
(l) overdrafts of customers (including but not limited to overdrafts made
pursuant to an overdraft protection plan or similar extensions of
credit in connection with a deposit account).
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Schedule 3.1 attached hereto and incorporated herein sets forth certain
categories of Assets. Such schedule(s) is based upon the best information
available to the Receiver and may be adjusted as provided in Article VIII.
Assets are purchased hereunder by the Assuming Bank subject to all liabilities
for indebtedness collateralized by Liens affecting such Assets to the extent
provided in Section 2.1.
3.2 ASSET PURCHASE PRICE.
(a) All Assets and assets of the Failed Bank subject to an option to
purchase by the Assuming Bank shall be purchased for the amount, or the amount
resulting from the method specified for determining the amount, as specified on
Schedule 3.2, except as otherwise may be provided herein. Any Asset, asset of
the Failed Bank subject to an option to purchase or other asset purchased for
which no purchase price is specified on Schedule 3.2 or otherwise herein shall
be purchased at its Fair Market Value.
b) The purchase price for securities (other than the capital stock of any
Acquired Subsidiary) purchased under Section 3.1 by the Assuming Bank shall be
the market value thereof as of the Bank Closing Date, which market value shall
be (i) the "Mid/Last", or "Trade" (as applicable), market price for each such
security quoted at the close of the trading day effective on the Bank Closing
Date as published electronically by Bloomberg, L.P.; (ii) provided, that if such
market price is not available for any such security, the Assuming Bank will
submit a bid for each such security within three days of notification/bid
request by the Receiver (unless a different time period is agreed to by the
Assuming Bank and the Receiver) and the Receiver, in its sole discretion will
accept or reject each such bid; and (iii) further provided in the absence of an
acceptable bid from the Assuming Bank, each such security shall not pass to the
Assuming Bank and shall be deemed to be an excluded asset hereunder.
3.3 MANNER OF CONVEYANCE; LIMITED WARRANTY; NONRECOURSE; ETC. THE
CONVEYANCE OF ALL ASSETS, INCLUDING REAL AND PERSONAL PROPERTY INTERESTS,
PURCHASED BY THE ASSUMING BANK UNDER THIS AGREEMENT SHALL BE MADE, AS NECESSARY,
BY RECEIVER'S DEED OR RECEIVER'S XXXX OF SALE, "AS IS", "WHERE IS", WITHOUT
RECOURSE AND, EXCEPT AS OTHERWISE SPECIFICALLY PROVIDED IN THIS AGREEMENT,
WITHOUT ANY WARRANTIES WHATSOEVER WITH RESPECT TO SUCH ASSETS, EXPRESS OR
IMPLIED, WITH RESPECT TO TITLE, ENFORCEABILITY, COLLECTIBILITY, DOCUMENTATION OR
FREEDOM FROM LIENS OR ENCUMBRANCES (IN WHOLE OR IN PART), OR ANY OTHER MATTERS.
3.4 PUTS OF ASSETS TO THE RECEIVER.
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(a) PUTS WITHIN 14 AND AT 30 DAYS AFTER THE BANK CLOSING DATE. During the
fourteen (14)-day period following the Bank Closing Date and only during such
period (which fourteen (14)-day period may be extended in writing in the sole
absolute discretion of the Receiver for any Loan), in accordance with this
Section 3.4, the Assuming Bank shall be entitled to require the Receiver to
purchase any Loan transferred to the Assuming Bank pursuant to Section 3.1(e)
which is not fully secured by Assumed Deposits or deposits at other insured
depository institutions due to either insufficient Assumed Deposit or deposit
collateral or deficient documentation regarding such collateral; provided with
regard to any Loan secured by an Assumed Deposit, no such purchase may be
required until any Deposit setoff determination, whether voluntary or
involuntary, has been made; and at the end of the thirty (30)-day period
following the Bank Closing Date and at that time only, in accordance with this
Section 3.4, the Assuming Bank shall be entitled to require the Receiver to
purchase any remaining overdraft transferred to the Assuming Bank pursuant to
3.1(l) which was not made pursuant to an overdraft protection plan or similar
extension of credit.
Notwithstanding the foregoing, the Assuming Bank shall not have the right to
require the Receiver to purchase any Loan if (i) the Obligor with respect to
such Loan is an Acquired Subsidiary, or (ii) the Assuming Bank has:
(A) made any advance in accordance with the terms of a Commitment or
otherwise with respect to such Loan;
(B) taken any action that increased the amount of a Related Liability
with respect to such Loan over the amount of such liability
immediately prior to the time of such action;
(C) created or permitted to be created any Lien on such Loan which
secures indebtedness for money borrowed or which constitutes a
conditional sales agreement, capital lease or other title
retention agreement;
(D) entered into, agreed to make, grant or permit, or made, granted
or permitted any modification or amendment to, any waiver or
extension with respect to, or any renewal, refinancing or
refunding of, such Loan or related Credit Documents or
collateral, including, without limitation, any act or omission
which diminished such collateral; or
(E) sold, assigned or transferred all or a portion of such Loan to a
third party (whether with or without recourse).
The Assuming Bank shall transfer all such Loans to the Receiver without
recourse, and shall indemnify the Receiver against any and all claims of any
Person claiming by, through or under the Assuming Bank with respect to any such
Loan, as provided in Section 12.4.
(b) PUTS PRIOR TO THE SETTLEMENT DATE. During the period from the Bank
Closing Date to and including the Business Day immediately preceding the
Settlement Date, the Assuming Bank shall be entitled to require the Receiver to
purchase any Asset which the
13
Assuming Bank can establish is evidenced by forged or stolen instruments as of
the Bank Closing Date; provided, that, the Assuming Bank shall not have the
right to require the Receiver to purchase any such Asset with respect to which
the Assuming Bank has taken any action referred to in Section 3.4(a)(ii) with
respect to such Asset. The Assuming Bank shall transfer all such Assets to the
Receiver without recourse, and shall indemnify the Receiver against any and all
claims of any Person claiming by, through or under the Assuming Bank with
respect to any such Asset, as provided in Section 12.4.
(c) NOTICES TO THE RECEIVER. In the event that the Assuming Bank elects to
require the Receiver to purchase one or more Assets, the Assuming Bank shall
deliver to the Receiver a notice (a "Put Notice") which shall include:
(i) a list of all Assets that the Assuming Bank requires the Receiver
to purchase;
(ii) a list of all Related Liabilities with respect to the Assets
identified pursuant to (i) above; and
(iii) a statement of the estimated Repurchase Price of each Asset
identified pursuant to (i) above as of the applicable Put Date.
Such notice shall be in the form prescribed by the Receiver or such other form
to which the Receiver shall consent. As provided in Section 9.6, the Assuming
Bank shall deliver to the Receiver such documents, Loan Files and such
additional information relating to the subject matter of the Put Notice as the
Receiver may request and shall provide to the Receiver full access to all other
relevant books and records.
(d) PURCHASE BY RECEIVER. The Receiver shall purchase Loans that are
specified in the Put Notice and shall assume Related Liabilities with respect to
such Loans, and the transfer of such Loans and Related Liabilities shall be
effective as of a date determined by the Receiver, which date shall not be later
than thirty (30) days after receipt by the Receiver of the Loan Files with
respect to such Loans (the "Put Date").
(e) PURCHASE PRICE AND PAYMENT DATE. Each Loan purchased by the Receiver
pursuant to this Section 3.4 shall be purchased at a price equal to the
Repurchase Price of such Loan less the Related Liability Amount applicable to
such Loan, in each case determined as of the applicable Put Date. If the
difference between such Repurchase Price and such Related Liability Amount is
positive, then the Receiver shall pay to the Assuming Bank the amount of such
difference; if the difference between such amounts is negative, then the
Assuming Bank shall pay to the Receiver the amount of such difference. The
Assuming Bank or the Receiver, as the case may be, shall pay the purchase price
determined pursuant to this Section 3.4(e) not later than the twentieth (20th)
Business Day following the applicable Put Date, together with interest on such
amount at the Settlement Interest Rate for the period from and including such
Put Date to and including the day preceding the date upon which payment is made.
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(f) SERVICING. The Assuming Bank shall administer and manage any Asset
subject to purchase by the Receiver in accordance with usual and prudent banking
standards and business practices until such time as such Asset is purchased by
the Receiver.
(g) REVERSALS. In the event that the Receiver purchases an Asset (and
assumes the Related Liability) that it is not required to purchase pursuant to
this Section 3.4, the Assuming Bank shall repurchase such Asset (and assume such
Related Liability) from the Receiver at a price computed so as to achieve the
same economic result as would apply if the Receiver had never purchased such
Asset pursuant to this Section 3.4.
3.5 ASSETS NOT PURCHASED BY ASSUMING BANK. The Assuming Bank does not
purchase, acquire or assume, or (except as otherwise expressly provided in this
Agreement) obtain an option to purchase, acquire or assume under this Agreement:
(a) any financial institution bonds, banker's blanket bonds, or public
liability, fire, or extended coverage insurance policy or any other insurance
policy of the Failed Bank, or premium refund, unearned premium derived from
cancellation, or any proceeds payable with respect to any of the foregoing;
(b) any interest, right, action, claim, or judgment against (i) any
officer, director, employee, accountant, attorney, or any other Person employed
or retained by the Failed Bank or any Subsidiary of the Failed Bank on or prior
to the Bank Closing Date arising out of any act or omission of such Person in
such capacity, (ii) any underwriter of financial institution bonds, banker's
blanket bonds or any other insurance policy of the Failed Bank, (iii) any
shareholder or holding company of the Failed Bank, or (iv) any other Person
whose action or inaction may be related to any loss (exclusive of any loss
resulting from such Person's failure to pay on a Loan made by the Failed Bank)
incurred by the Failed Bank; provided, that for the purposes hereof, the acts,
omissions or other events giving rise to any such claim shall have occurred on
or before the Bank Closing Date, regardless of when any such claim is discovered
and regardless of whether any such claim is made with respect to a financial
institution bond, banker's blanket bond, or any other insurance policy of the
Failed Bank in force as of the Bank Closing Date;
(c) prepaid regulatory assessments of the Failed Bank, if any;
(d) legal or equitable interests in tax receivables of the Failed Bank, if
any, including any claims arising as a result of the Failed Bank having entered
into any agreement or otherwise being joined with another Person with respect to
the filing of tax returns or the payment of taxes;
(e) Federal Reserve Bank and Federal Home Loan Bank stock, if any;
(f) amounts reflected on the Accounting Records of the Failed Bank as of
the Bank Closing Date as a general or specific loss reserve or contingency
account, if any;
(g) owned and leased Bank Premises and owned and leased Furniture and
Equipment and Fixtures and data processing equipment (including hardware and
software) located on Bank
15
Premises, if any; provided, that the Assuming Bank does obtain an option under
Section 4.6, Section 4.7 or Section 4.8, as the case may be, with respect
thereto;
(h) owned Bank Premises which the Receiver, in its discretion, determines
may contain environmentally hazardous substances;
(i) any amounts owed to the Failed Bank by any Subsidiary of the Failed
Bank other than an Acquired Subsidiary;
(j) any "goodwill," as such term is defined in the instructions to the
report of condition prepared by banks examined by the Corporation in accordance
with 12 C.F.R. Section 304.4, and other intangibles;
(k) any security if, in the discretion of the Receiver, the value of such
security either cannot be determined or is determined to be zero pursuant to
Section 3.2(b), and any security listed on Schedule 3.5(k), if any; and
(l) any criminal restitution orders issued in favor of the Failed Bank.
The Assuming Bank only acquires assets and rights as provided in this Agreement.
The foregoing shall not be construed to imply that any particular asset or right
listed otherwise would have been sold or assigned or that any asset or right not
listed is sold or assigned.
3.6 ASSETS ESSENTIAL TO RECEIVER.
(a) The Receiver may refuse to sell to the Assuming Bank, or the Assuming
Bank agrees, at the request of the Receiver set forth in a written notice to the
Assuming Bank, to assign, transfer, convey, and deliver to the Receiver all of
the Assuming Bank's right, title and interest in and to, any Asset or asset
essential to the Receiver as determined by the Receiver in its discretion
(together with all Credit Documents evidencing or pertaining thereto), which may
include any Asset or asset that the Receiver determines to be:
(i) made to an officer, director, or other Person engaging in the
affairs of the Failed Bank, its Subsidiaries or Affiliates or any related
entities of any of the foregoing;
(ii) the subject of any investigation relating to any claim with
respect to any item described in Section 3.5(a) or (b), or the subject of, or
potentially the subject of, any legal proceedings;
(iii) made to a Person who is an Obligor on a loan owned by the
Receiver or the Corporation in its corporate capacity or its capacity as
receiver of any institution;
(iv) secured by collateral which also secures any asset owned by the
Receiver; or
16
(v) related to any asset of the Failed Bank not purchased by the
Assuming Bank under this Article III or any liability of the Failed Bank not
assumed by the Assuming Bank under Article II.
(b) Each such Asset or asset purchased by the Receiver shall be purchased
at a price equal to the Repurchase Price thereof less the Related Liability
Amount with respect to any Related Liabilities related to such Asset or asset,
in each case determined as of the date of the notice provided by the Receiver
pursuant to Section 3.6(a). The Receiver shall pay the Assuming Bank not later
than the twentieth (20th) Business Day following receipt of related Credit
Documents and Loan Files together with interest on such amount at the Settlement
Interest Rate for the period from and including the date of receipt of such
documents to and including the day preceding the day on which payment is made.
The Assuming Bank agrees to administer and manage each such Asset or asset in
accordance with usual and prudent banking standards and business practices until
each such Loan is purchased by the Receiver. All transfers with respect to Loans
under this Section 3.6 shall be made as provided in Section 9.6. The Assuming
Bank shall transfer all such Assets or assets and Related Liabilities to the
Receiver without recourse, and shall indemnify the Receiver against any and all
claims of any Person claiming by, through or under the Assuming Bank with
respect to any such Asset or asset, as provided in Section 12.4.
ARTICLE IV
ASSUMPTION OF CERTAIN DUTIES AND OBLIGATIONS
The Assuming Bank agrees with the Receiver and the Corporation as follows:
4.1 CONTINUATION OF BANKING BUSINESS. The Assuming Bank agrees to provide
full service banking in the trade area of the Failed Bank commencing on the
first banking business day (including a Saturday) after the Bank Closing Date.
At the option of the Assuming Bank, such banking services may be provided at any
or all of the Bank Premises, or at other premises within such trade area.
4.2 AGREEMENT WITH RESPECT TO CREDIT CARD BUSINESS. The Assuming Bank
agrees to honor and perform, from and after the Bank Closing Date, all duties
and obligations with respect to the Failed Bank's credit card business, and/or
processing related to credit cards, if any, and assumes all outstanding
extensions of credit with respect thereto. Fees related to the credit card
business collected prior to the Bank Closing Date shall be for the benefit of
the Receiver and fees collected after the Bank Closing Date shall be for the
benefit of the Assuming Bank.
4.3 AGREEMENT WITH RESPECT TO SAFE DEPOSIT BUSINESS. The Assuming Bank
assumes and agrees to discharge, from and after the Bank Closing Date, in the
usual course of conducting a banking business, the duties and obligations of the
Failed Bank with respect to all Safe Deposit Boxes, if any, of the Failed Bank
and to maintain all of the necessary facilities for the use of such boxes by the
renters thereof during the period for which such boxes have been rented and the
rent therefor paid to the Failed Bank, subject to the provisions of the rental
agreements between the Failed Bank and the respective renters of such boxes;
provided, that the
17
Assuming Bank may relocate the Safe Deposit Boxes of the Failed Bank to any
office of the Assuming Bank located in the trade area of the Failed Bank. Fees
related to the safe deposit business collected prior to the Bank Closing Date
shall be for the benefit of the Receiver and fees collected after the Bank
Closing Date shall be for the benefit of the Assuming Bank.
4.4 AGREEMENT WITH RESPECT TO SAFEKEEPING BUSINESS. The Receiver transfers,
conveys and delivers to the Assuming Bank and the Assuming Bank accepts all
securities and other items, if any, held by the Failed Bank in safekeeping for
its customers as of the Bank Closing Date. The Assuming Bank assumes and agrees
to honor and discharge, from and after the Bank Closing Date, the duties and
obligations of the Failed Bank with respect to such securities and items held in
safekeeping. The Assuming Bank shall be entitled to all rights and benefits
heretofore accrued or hereafter accruing with respect thereto; provided, that,
fees related to the safe keeping business collected prior to the Bank Closing
Date shall be for the benefit of the Receiver and fees collected after the Bank
Closing Date shall be for the benefit of the Assuming Bank. The Assuming Bank
shall provide to the Receiver written verification of all assets held by the
Failed Bank for safekeeping within sixty (60) days after the Bank Closing Date.
4.5 AGREEMENT WITH RESPECT TO TRUST BUSINESS.
(a) The Assuming Bank shall, without further transfer, substitution, act or
deed, to the full extent permitted by law, succeed to the rights, obligations,
properties, assets, investments, deposits, agreements, and trusts of the Failed
Bank under trusts, executorships, administrations, guardianships, and agencies,
and other fiduciary or representative capacities, all to the same extent as
though the Assuming Bank had assumed the same from the Failed Bank prior to the
Bank Closing Date; provided, that any liability based on the misfeasance,
malfeasance or nonfeasance of the Failed Bank, its directors, officers,
employees or agents with respect to the trust business is not assumed hereunder.
Fees related to the trust business collected prior to the Bank Closing Date
shall be for the benefit of the Receiver and fees collected after the Bank
Closing Date shall be for the benefit of the Assuming Bank.
(b) The Assuming Bank shall, to the full extent permitted by law, succeed
to, and be entitled to take and execute, the appointment to all executorships,
trusteeships, guardianships and other fiduciary or representative capacities to
which the Failed Bank is or may be named in xxxxx, whenever probated, or to
which the Failed Bank is or may be named or appointed by any other instrument.
(c) In the event additional proceedings of any kind are necessary to
accomplish the transfer of such trust business, the Assuming Bank agrees that,
at its own expense, it will take whatever action is necessary to accomplish such
transfer. The Receiver agrees to use reasonable efforts to assist the Assuming
Bank in accomplishing such transfer.
(d) The Assuming Bank shall provide to the Receiver written verification of
the assets held in connection with the Failed Bank's trust business within sixty
(60) days after the Bank Closing Date.
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4.6 AGREEMENT WITH RESPECT TO BANK PREMISES.
(a) OPTION TO PURCHASE. Subject to Section 3.5, the Receiver hereby grants
to the Assuming Bank an exclusive option for the period of ninety (90) days
commencing the day after the Bank Closing Date to purchase any or all owned Bank
Premises. The Assuming Bank shall give written notice to the Receiver within the
option period of its election to purchase or not to purchase any of the owned
Bank Premises. Any purchase of such premises shall be effective as of the Bank
Closing Date and such purchase shall be consummated as soon as practicable
thereafter, and in no event later than the Settlement Date.
(b) OPTION TO LEASE. The Receiver hereby grants to the Assuming Bank an
exclusive option for the period of ninety (90) days commencing the day after the
Bank Closing Date to cause the Receiver to assign to the Assuming Bank any or
all leases for leased Bank Premises, if any, which have been continuously
occupied by the Assuming Bank from the Bank Closing Date to the date it elects
to accept an assignment of the leases with respect thereto to the extent such
leases can be assigned; provided, that the exercise of this option with respect
to any lease must be as to all premises or other property subject to the lease.
If an assignment cannot be made of any such leases, the Receiver may, in its
discretion, enter into subleases with the Assuming Bank containing the same
terms and conditions provided under such existing leases for such leased Bank
Premises or other property. The Assuming Bank shall give notice to the Receiver
within the option period of its election to accept or not to accept an
assignment of any or all leases (or enter into subleases or new leases in lieu
thereof). The Assuming Bank agrees to assume all leases assigned (or enter into
subleases or new leases in lieu thereof) pursuant to this Section 4.6.
(c) FACILITATION. The Receiver agrees to facilitate the assumption,
assignment or sublease of leases or the negotiation of new leases by the
Assuming Bank; provided, that neither the Receiver nor the Corporation shall be
obligated to engage in litigation, make payments to the Assuming Bank or to any
third party in connection with facilitating any such assumption, assignment,
sublease or negotiation or commit to any other obligations to third parties.
(d) OCCUPANCY. The Assuming Bank shall give the Receiver fifteen (15) days'
prior written notice of its intention to vacate prior to vacating any leased
Bank Premises with respect to which the Assuming Bank has not exercised the
option provided in Section 4.6(b). Any such notice shall be deemed to terminate
the Assuming Bank's option with respect to such leased Bank Premises.
(e) OCCUPANCY COSTS.
(i) The Assuming Bank agrees to pay to the Receiver, or to appropriate
third parties at the direction of the Receiver, during and for the period of any
occupancy by it of (x) owned Bank Premises the market rental value and all
operating costs, and (y) leased Bank Premises, all operating costs with respect
thereto and to comply with all relevant terms of applicable leases entered into
by the Failed Bank, including without limitation the timely payment of all rent.
Operating costs include, without limitation all taxes, fees, charges, utilities,
19
insurance and assessments, to the extent not included in the rental value or
rent. If the Assuming Bank elects to purchase any owned Bank Premises in
accordance with Section 4.6(a), the amount of any rent paid (and taxes paid to
the Receiver which have not been paid to the taxing authority and for which the
Assuming Bank assumes liability) by the Assuming Bank with respect thereto shall
be applied as an offset against the purchase price thereof.
(ii) The Assuming Bank agrees during the period of occupancy by it of
owned or leased Bank Premises, to pay to the Receiver rent for the use of all
owned or leased Furniture and Equipment and all owned or leased Fixtures located
on such Bank Premises for the period of such occupancy. Rent for such property
owned by the Failed Bank shall be the market rental value thereof, as determined
by the Receiver within sixty (60) days after the Bank Closing Date. Rent for
such leased property shall be an amount equal to any and all rent and other
amounts which the Receiver incurs or accrues as an obligation or is obligated to
pay for such period of occupancy pursuant to all leases and contracts with
respect to such property. If the Assuming Bank purchases any owned Furniture and
Equipment or owned Fixtures in accordance with Section 4.6(f) or 4.6(h), the
amount of any rents paid by the Assuming Bank with respect thereto shall be
applied as an offset against the purchase price thereof.
(f) CERTAIN REQUIREMENTS AS TO FURNITURE, EQUIPMENT AND FIXTURES. If the
Assuming Bank purchases owned Bank Premises or accepts an assignment of the
lease (or enters into a sublease or a new lease in lieu thereof) for leased Bank
Premises as provided in Section 4.6(a) or 4.6(b), or if the Assuming Bank does
not exercise such option but within twelve (12) months following the Bank
Closing Date obtains the right to occupy such premises (whether by assignment,
lease, sublease, purchase or otherwise), other than in accordance with Section
4.6(a) or (b), the Assuming Bank shall (i) effective as of the date of the Bank
Closing Date, purchase from the Receiver all Furniture and Equipment and
Fixtures owned by the Failed Bank and located thereon as of the Bank Closing
Date, (ii) accept an assignment or a sublease of the leases or negotiate new
leases for all Furniture and Equipment and Fixtures leased by the Failed Bank
and located thereon, and (iii) if applicable, accept an assignment or a sublease
of any ground lease or negotiate a new ground lease with respect to any land on
which such Bank Premises are located; provided, that the Receiver shall not have
disposed of such Furniture and Equipment and Fixtures or repudiated the leases
specified in clause (ii) or (iii).
(g) VACATING PREMISES.
(i) If the Assuming Bank elects not to purchase any owned Bank
Premises, the notice of such election in accordance with Section 4.6(a) shall
specify the date upon which the Assuming Bank's occupancy of such premises shall
terminate, which date shall not be later than ninety (90) days after the date of
the Assuming Bank's notice not to exercise such option. The Assuming Bank
promptly shall relinquish and release to the Receiver such premises and the
Furniture and Equipment and Fixtures located thereon in the same condition as at
the Bank Closing Date, normal wear and tear excepted. By occupying any such
premises after the expiration of such ninety (90)-day period, the Assuming Bank
shall, at the Receiver's option, (x) be deemed to have agreed to purchase such
Bank Premises, and to assume all leases, obligations and liabilities with
respect to leased Furniture and Equipment and leased Fixtures located
20
thereon and any ground lease with respect to the land on which such premises are
located, and (y) be required to purchase all Furniture and Equipment and
Fixtures owned by the Failed Bank and located on such premises as of the Bank
Closing Date.
(ii) If the Assuming Bank elects not to accept an assignment of the
lease or sublease any leased Bank Premises, the notice of such election in
accordance with Section 4.6(b) shall specify the date upon which the Assuming
Bank's occupancy of such leased Bank Premises shall terminate, which date shall
not be later than the date which is one hundred eighty (180) days after the Bank
Closing Date. Upon vacating such premises, the Assuming Bank shall relinquish
and release to the Receiver such premises and the Fixtures and the Furniture and
Equipment located thereon in the same condition as at the Bank Closing Date,
normal wear and tear excepted. By failing to provide notice of its intention to
vacate such premises prior to the expiration of the option period specified in
Section 4.6(b), or by occupying such premises after the one hundred eighty
(180)-day period specified above in this paragraph (ii), the Assuming Bank
shall, at the Receiver's option, (x) be deemed to have assumed all leases,
obligations and liabilities with respect to such premises (including any ground
lease with respect to the land on which premises are located), and leased
Furniture and Equipment and leased Fixtures located thereon in accordance with
this Section 4.6 (unless the Receiver previously repudiated any such lease), and
(y) be required to purchase all Furniture and Equipment and Fixtures owned by
the Failed Bank and located on such premises as of the Bank Closing Date.
(h) FURNITURE AND EQUIPMENT AND CERTAIN OTHER EQUIPMENT. The Receiver
hereby grants to the Assuming Bank an option to purchase, effective as of the
date of the Bank Closing Date, all Furniture and Equipment or any
telecommunications, data processing equipment (including hardware and software)
and check processing and similar operating equipment owned by the Failed Bank
and located at any owned or leased Bank Premises that the Assuming Bank elects
to vacate or which it could have, but did not occupy, pursuant to this Section
4.6; provided, that, the Assuming Bank shall give the Receiver notice of its
election to purchase such property at the time it gives notice of its intention
to vacate such Bank Premises or within ten (10) days after the Bank Closing Date
for Bank Premises it could have, but did not, occupy.
4.7 AGREEMENT WITH RESPECT TO LEASED DATA PROCESSING EQUIPMENT.
(a) The Receiver hereby grants to the Assuming Bank an exclusive option for
the period of ninety (90) days commencing the day after the Bank Closing Date to
accept an assignment from the Receiver of any or all Data Processing Leases to
the extent that such Data Processing Leases can be assigned.
(b) The Assuming Bank shall (i) give written notice to the Receiver within
the option period specified in Section 4.7(a) of its intent to accept an
assignment or sublease of any or all Data Processing Leases and promptly accept
an assignment or sublease of such Data Processing Leases, and (ii) give written
notice to the appropriate lessor(s) that it has accepted an assignment or
sublease of any such Data Processing Leases.
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(c) The Receiver agrees to facilitate the assignment or sublease of Data
Processing Leases or the negotiation of new leases or license agreements by the
Assuming Bank; provided, that neither the Receiver nor the Corporation shall be
obligated to engage in litigation or make payments to the Assuming Bank or to
any third party in connection with facilitating any such assumption, assignment,
sublease or negotiation.
(d) The Assuming Bank agrees, during its period of use of any property
subject to a Data Processing Lease, to pay to the Receiver or to appropriate
third parties at the direction of the Receiver all operating costs with respect
thereto and to comply with all relevant terms of the applicable Data Processing
Leases entered into by the Failed Bank, including without limitation the timely
payment of all rent, taxes, fees, charges, utilities, insurance and assessments.
(e) The Assuming Bank shall, not later than fifty (50) days after giving
the notice provided in Section 4.7(b), (i) relinquish and release to the
Receiver all property subject to the relevant Data Processing Lease, in the same
condition as at the Bank Closing Date, normal wear and tear excepted, or (ii)
accept an assignment or a sublease thereof or negotiate a new lease or license
agreement under this Section 4.7.
4.8 AGREEMENT WITH RESPECT TO CERTAIN EXISTING AGREEMENTS.
(a) Subject to the provisions of Section 4.8(b), with respect to agreements
existing as of the Bank Closing Date which provide for the rendering of services
by or to the Failed Bank, within thirty (30) days after the Bank Closing Date,
the Assuming Bank shall give the Receiver written notice specifying whether it
elects to assume or not to assume each such agreement. Except as may be
otherwise provided in this Article IV, the Assuming Bank agrees to comply with
the terms of each such agreement for a period commencing on the day after the
Bank Closing Date and ending on: (i) in the case of an agreement that provides
for the rendering of services by the Failed Bank, the date which is ninety (90)
days after the Bank Closing Date, and (ii) in the case of an agreement that
provides for the rendering of services to the Failed Bank, the date which is
thirty (30) days after the Assuming Bank has given notice to the Receiver of its
election not to assume such agreement; provided, that the Receiver can
reasonably make such service agreements available to the Assuming Bank. The
Assuming Bank shall be deemed by the Receiver to have assumed agreements for
which no notification is timely given. The Receiver agrees to assign, transfer,
convey, and deliver to the Assuming Bank all right, title and interest of the
Receiver, if any, in and to agreements the Assuming Bank assumes hereunder. In
the event the Assuming Bank elects not to accept an assignment of any lease (or
sublease) or negotiate a new lease for leased Bank Premises under Section 4.6
and does not otherwise occupy such premises, the provisions of this Section
4.8(a) shall not apply to service agreements related to such premises. The
Assuming Bank agrees, during the period it has the use or benefit of any such
agreement, promptly to pay to the Receiver or to appropriate third parties at
the direction of the Receiver all operating costs with respect thereto and to
comply with all relevant terms of such agreement.
(b) The provisions of Section 4.8(a) shall not apply to (i) agreements
pursuant to which the Failed Bank provides mortgage servicing for others or
mortgage servicing is provided
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to the Failed Bank by others, (ii) agreements that are subject to Sections 4.1
through 4.7 and any insurance policy or bond referred to in Section 3.5(a) or
other agreement specified in Section 3.5, and (iii) consulting, management or
employment agreements, if any, between the Failed Bank and its employees or
other Persons. Except as otherwise expressly set forth elsewhere in this
Agreement, the Assuming Bank does not assume any liabilities or acquire any
rights under any of the agreements described in this Section 4.8(b).
4.9 INFORMATIONAL TAX REPORTING. The Assuming Bank agrees to perform all
obligations of the Failed Bank with respect to Federal and State income tax
informational reporting related to (i) the Assets and the Liabilities Assumed,
(ii) deposit accounts that were closed and loans that were paid off or
collateral obtained with respect thereto prior to the Bank Closing Date, (iii)
miscellaneous payments made to vendors of the Failed Bank, and (iv) any other
asset or liability of the Failed Bank, including, without limitation, loans not
purchased and Deposits not assumed by the Assuming Bank, as may be required by
the Receiver.
4.10 INSURANCE. The Assuming Bank agrees to obtain insurance coverage
effective from and after the Bank Closing Date, including public liability, fire
and extended coverage insurance acceptable to the Receiver with respect to owned
or leased Bank Premises that it occupies, and all owned or leased Furniture and
Equipment and Fixtures and leased data processing equipment (including hardware
and software) located thereon, in the event such insurance coverage is not
already in force and effect with respect to the Assuming Bank as the insured as
of the Bank Closing Date. All such insurance shall, where appropriate (as
determined by the Receiver), name the Receiver as an additional insured.
4.11 OFFICE SPACE FOR RECEIVER AND CORPORATION. For the period commencing
on the day following the Bank Closing Date and ending on the one hundred
eightieth (180th) day thereafter, the Assuming Bank agrees to provide to the
Receiver and the Corporation, without charge, adequate and suitable office space
(including parking facilities and vault space), furniture, equipment (including
photocopying and telecopying machines) and utilities (including local telephone
service) at the Bank Premises occupied by the Assuming Bank for their use in the
discharge of their respective functions with respect to the Failed Bank. In the
event the Receiver and the Corporation determine that the space provided is
inadequate or unsuitable, the Receiver and the Corporation may relocate to other
quarters having adequate and suitable space and the costs of relocation and any
rental and utility costs for the balance of the period of occupancy by the
Receiver and the Corporation shall be borne by the Assuming Bank.
4.12 AGREEMENT WITH RESPECT TO CONTINUATION OF GROUP HEALTH PLAN COVERAGE
FOR FORMER EMPLOYEES OF THE FAILED BANK.
(a) The Assuming Bank agrees to assist the Receiver, as provided in this
Section 4.12, in offering individuals who were employees or former employees of
the Failed Bank, or any of its Subsidiaries, and who, immediately prior to the
Bank Closing Date, were receiving, or were eligible to receive, health insurance
coverage or health insurance continuation coverage from the Failed Bank
("Eligible Individuals"), the opportunity to obtain health insurance coverage in
the Corporation's FIA Continuation Coverage Plan which provides for health
23
insurance continuation coverage to such Eligible Individuals who are qualified
beneficiaries of the Failed Bank as defined in Section 607 of the Employee
Retirement Income Security Act of 1974, as amended (respectively, "qualified
beneficiaries" and "ERISA"). The Assuming Bank shall consult with the Receiver
and not later than five (5) Business Days after the Bank Closing Date shall
provide written notice to the Receiver of the number (if available), identity
(if available) and addresses (if available) of the Eligible Individuals who are
qualified beneficiaries of the Failed Bank and for whom a "qualifying event" (as
defined in Section 603 of ERISA) has occurred and with respect to whom the
Failed Bank's obligations under Part 6 of Subtitle B of Title I of ERISA have
not been satisfied in full, and such other information as the Receiver may
reasonably require. The Receiver shall cooperate with the Assuming Bank in order
to permit it to prepare such notice and shall provide to the Assuming Bank such
data in its possession as may be reasonably required for purposes of preparing
such notice.
(b) The Assuming Bank shall take such further action to assist the Receiver
in offering the Eligible Individuals who are qualified beneficiaries of the
Failed Bank the opportunity to obtain health insurance coverage in the
Corporation's FIA Continuation Coverage Plan as the Receiver may direct. All
expenses incurred and paid by the Assuming Bank (i) in connection with the
obligations of the Assuming Bank under this Section 4.12, and (ii) in providing
health insurance continuation coverage to any Eligible Individuals who are hired
by the Assuming Bank and such employees' qualified beneficiaries shall be borne
by the Assuming Bank.
(c) This Section 4.12 is for the sole and exclusive benefit of the parties
to this Agreement, and for the benefit of no other Person (including any former
employee of the Failed Bank or any Subsidiary thereof or qualified beneficiary
of such former employee). Nothing in this Section 4.12 is intended by the
parties, or shall be construed, to give any Person (including any former
employee of the Failed Bank or any Subsidiary thereof or qualified beneficiary
of such former employee) other than the Corporation, the Receiver and the
Assuming Bank any legal or equitable right, remedy or claim under or with
respect to the provisions of this Section.
4.13 AGREEMENT WITH RESPECT TO INTERIM ASSET SERVICING. At any time after
the Bank Closing Date, the Receiver may establish on its books an asset pool(s)
and may transfer to such asset pool(s) (by means of accounting entries on the
books of the Receiver) all or any assets and liabilities of the Failed Bank
which are not acquired by the Assuming Bank, including, without limitation,
wholly unfunded Commitments and assets and liabilities which may be acquired,
funded or originated by the Receiver subsequent to the Bank Closing Date. The
Receiver may remove assets (and liabilities) from or add assets (and
liabilities) to such pool(s) at any time in its discretion. At the option of the
Receiver, the Assuming Bank agrees to service, administer, and collect such pool
assets in accordance with and for the term set forth in Exhibit 4.13 "Interim
Asset Servicing Arrangement".
ARTICLE V
DUTIES WITH RESPECT TO DEPOSITORS OF THE FAILED BANK
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5.1 PAYMENT OF CHECKS, DRAFTS AND ORDERS. Subject to Section 9.5, the
Assuming Bank agrees to pay all properly drawn checks, drafts and withdrawal
orders of depositors of the Failed Bank presented for payment, whether drawn on
the check or draft forms provided by the Failed Bank or by the Assuming Bank, to
the extent that the Deposit balances to the credit of the respective makers or
drawers assumed by the Assuming Bank under this Agreement are sufficient to
permit the payment thereof, and in all other respects to discharge, in the usual
course of conducting a banking business, the duties and obligations of the
Failed Bank with respect to the Deposit balances due and owing to the depositors
of the Failed Bank assumed by the Assuming Bank under this Agreement.
5.2 CERTAIN AGREEMENTS RELATED TO DEPOSITS. Subject to Section 2.2, the
Assuming Bank agrees to honor the terms and conditions of any written escrow or
mortgage servicing agreement or other similar agreement relating to a Deposit
liability assumed by the Assuming Bank pursuant to this Agreement.
5.3 NOTICE TO DEPOSITORS.
(a) Within seven (7) days after the Bank Closing Date, the Assuming Bank
shall give (i) notice to depositors of the Failed Bank of its assumption of the
Deposit liabilities of the Failed Bank, and (ii) any notice required under
Section 2.2, by mailing to each such depositor a notice with respect to such
assumption and by advertising in a newspaper of general circulation in the
county or counties in which the Failed Bank was located. The Assuming Bank
agrees that it will obtain prior approval of all such notices and advertisements
from counsel for the Receiver and that such notices and advertisements shall not
be mailed or published until such approval is received.
(b) The Assuming Bank shall give notice by mail to depositors of the Failed
Bank concerning the procedures to claim their deposits, which notice shall be
provided to the Assuming Bank by the Receiver or the Corporation. Such notice
shall be included with the notice to depositors to be mailed by the Assuming
Bank pursuant to Section 5.3(a).
(c) If the Assuming Bank proposes to charge fees different from those
charged by the Failed Bank before it establishes new deposit account
relationships with the depositors of the Failed Bank, the Assuming Bank shall
give notice by mail of such changed fees to such depositors.
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ARTICLE VI
RECORDS
6.1 TRANSFER OF RECORDS.
(a) In accordance with Section 3.1, the Receiver assigns, transfers,
conveys and delivers to the Assuming Bank the following Records pertaining to
the Deposit liabilities of the Failed Bank assumed by the Assuming Bank under
this Agreement, except as provided in Section 6.4:
(i) signature cards, orders, contracts between the Failed Bank and its
depositors and Records of similar character;
(ii) passbooks of depositors held by the Failed Bank, deposit slips,
cancelled checks and withdrawal orders representing charges to accounts of
depositors;
and the following Records pertaining to the Assets:
(iii) records of deposit balances carried with other banks, bankers or
trust companies;
(iv) loan and collateral records and Loan Files and other documents;
(v) deeds, mortgages, abstracts, surveys, and other instruments or
records of title pertaining to real estate or real estate mortgages;
(vi) signature cards, agreements and records pertaining to Safe
Deposit Boxes, if any; and
(vii) records pertaining to the credit card business, trust business
or safekeeping business of the Failed Bank, if any.
(b) The Receiver, at its option, may assign and transfer to the Assuming
Bank by a single blanket assignment or otherwise, as soon as practicable after
the Bank Closing Date, any other Records not assigned and transferred to the
Assuming Bank as provided in this Agreement, including but not limited to loan
disbursement checks, general ledger tickets, official bank checks, proof
transactions (including proof tapes) and paid out loan files.
6.2 DELIVERY OF ASSIGNED RECORDS. The Receiver shall deliver to the
Assuming Bank all Records described in (i) Section 6.1(a) as soon as practicable
on or after the date of this Agreement, and (ii) Section 6.1(b) as soon as
practicable after making any assignment described therein.
6.3 PRESERVATION OF RECORDS. The Assuming Bank agrees that it will preserve
and maintain for the joint benefit of the Receiver, the Corporation and the
Assuming Bank, all
26
Records of which it has custody for such period as either the Receiver or the
Corporation in its discretion may require, until directed otherwise, in writing,
by the Receiver or Corporation. The Assuming Bank shall have the primary
responsibility to respond to subpoenas, discovery requests, and other similar
official inquiries with respect to the Records of which it has custody.
6.4 ACCESS TO RECORDS; COPIES. The Assuming Bank agrees to permit the
Receiver and the Corporation access to all Records of which the Assuming Bank
has custody, and to use, inspect, make extracts from or request copies of any
such Records in the manner and to the extent requested, and to duplicate, in the
discretion of the Receiver or the Corporation, any Record in the form of
microfilm or microfiche pertaining to Deposit account relationships; provided,
that in the event that the Failed Bank maintained one or more duplicate copies
of such microfilm or microfiche Records, the Assuming Bank hereby assigns,
transfers, and conveys to the Corporation one such duplicate copy of each such
Record without cost to the Corporation, and agrees to deliver to the Corporation
all Records assigned and transferred to the Corporation under this Article VI as
soon as practicable on or after the date of this Agreement. The party requesting
a copy of any Record shall bear the cost (based on standard accepted industry
charges to the extent applicable, as determined by the Receiver) for providing
such duplicate Records. A copy of each Record requested shall be provided as
soon as practicable by the party having custody thereof.
ARTICLE VII
BID; INITIAL PAYMENT
The Assuming Bank has submitted to the Receiver a positive bid of 1.0 % of
the Assumed Deposits, less Brokered Deposits, for the Assets purchased and
Liabilities Assumed hereunder (the "Bid Amount"). For purposes of determining
the Bid Amount, adjustments will be made to the amount of Assumed Deposits to
the Settlement Date; thereafter, the Bid Amount shall be fixed, regardless of
any additions or reductions to the amount of Assumed Deposits. On the Payment
Date, the Assuming Bank will pay to the Corporation, or the Corporation will pay
to the Assuming Bank, as the case may be, the Initial Payment, together with
interest on such amount (if the Payment Date is not the day following the day of
the Bank Closing Date) from and including the day following the Bank Closing
Date to and including the day preceding the Payment Date at the Settlement
Interest Rate.
ARTICLE VIII
ADJUSTMENTS
8.1 PRO FORMA STATEMENT. It is understood that the determination of the
Initial Payment is based on the Receiver's best estimate of the Liabilities
Assumed and the Assets at the Bank Closing Date. The Receiver, as soon as
practicable after the Bank Closing Date, in accordance with the best information
then available, shall provide to the Assuming Bank a pro forma statement
reflecting any adjustments of such liabilities and assets as may be necessary.
Such pro forma statement shall take into account, to the extent possible, (i)
liabilities and assets
27
of a nature similar to those contemplated by Section 2.1 or Section 3.1,
respectively, which at the Bank Closing Date were carried in the Failed Bank's
suspense accounts, (ii) accruals as of the Bank Closing Date for all income
related to the assets and business of the Failed Bank acquired by the Assuming
Bank hereunder, whether or not such accruals were reflected on the Accounting
Records of the Failed Bank in the normal course of its operations, and (iii)
adjustments to determine the Book Value of any investment in an Acquired
Subsidiary and related accounts on the "bank only" (unconsolidated) balance
sheet of the Failed Bank based on the equity method of accounting, whether or
not the Failed Bank used the equity method of accounting for investments in
subsidiaries, except that the resulting amount cannot be less than the Acquired
Subsidiary's recorded equity as of the Bank Closing Date as reflected on the
Accounting Records of the Acquired Subsidiary. Any Loan purchased by the
Assuming Bank pursuant to Section 3.1 which the Failed Bank charged off shall be
deemed not to be charged off for the purposes of the pro forma statement, and
the purchase price shall be determined pursuant to Section 3.2.
8.2 CORRECTION OF ERRORS AND OMISSIONS; OTHER LIABILITIES.
(a) In the event any bookkeeping omissions or errors are discovered in
preparing any pro forma statement or in completing the transfers and assumptions
contemplated hereby, the parties hereto agree to correct such errors and
omissions, it being understood that, as far as practicable, all adjustments will
be made consistent with the judgments, methods, policies or accounting
principles utilized by the Failed Bank in preparing and maintaining Accounting
Records, except that adjustments made pursuant to this Section 8.2(a) are not
intended to bring the Accounting Records of the Failed Bank into accordance with
generally accepted accounting principles.
(b) If the Receiver discovers at any time subsequent to the date of this
Agreement that any claim exists against the Failed Bank which is of such a
nature that it would have been included in the liabilities assumed under Article
II had the existence of such claim or the facts giving rise thereto been known
as of the Bank Closing Date, the Receiver may, in its discretion, at any time,
require that such claim be assumed by the Assuming Bank in a manner consistent
with the intent of this Agreement. The Receiver will make appropriate
adjustments to the pro forma statement provided by the Receiver to the Assuming
Bank pursuant to Section 8.1 as may be necessary.
8.3 PAYMENTS. The Receiver agrees to cause to be paid to the Assuming Bank,
or the Assuming Bank agrees to pay to the Receiver, as the case may be, on the
Settlement Date, a payment in an amount which reflects net adjustments
(including any costs, expenses and fees associated with determinations of value
as provided in this Agreement) made pursuant to Section 8.1 or Section 8.2, plus
interest as provided in Section 8.4. The Receiver and the Assuming Bank agree to
effect on the Settlement Date any further transfer of assets to or assumption of
liabilities or claims by the Assuming Bank as may be necessary in accordance
with Section 8.1 or Section 8.2.
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8.4 INTEREST. Any amounts paid under Section 8.3 or Section 8.5, shall bear
interest for the period from and including the day following the Bank Closing
Date to and including the day preceding the payment at the Settlement Interest
Rate.
8.5 SUBSEQUENT ADJUSTMENTS. In the event that the Assuming Bank or the
Receiver discovers any errors or omissions as contemplated by Section 8.2 or any
error with respect to the payment made under Section 8.3 after the Settlement
Date, the Assuming Bank and the Receiver agree to promptly correct any such
errors or omissions, make any payments and effect any transfers or assumptions
as may be necessary to reflect any such correction plus interest as provided in
Section 8.4.
ARTICLE IX
CONTINUING COOPERATION
9.1 GENERAL MATTERS. The parties hereto agree that they will, in good faith
and with their best efforts, cooperate with each other to carry out the
transactions contemplated by this Agreement and to effect the purposes hereof.
9.2 ADDITIONAL TITLE DOCUMENTS. The Receiver, the Corporation and the
Assuming Bank each agree, at any time, and from time to time, upon the request
of any party hereto, to execute and deliver such additional instruments and
documents of conveyance as shall be reasonably necessary to vest in the
appropriate party its full legal or equitable title in and to the property
transferred pursuant to this Agreement or to be transferred in accordance
herewith. The Assuming Bank shall prepare such instruments and documents of
conveyance (in form and substance satisfactory to the Receiver) as shall be
necessary to vest title to the Assets in the Assuming Bank. The Assuming Bank
shall be responsible for recording such instruments and documents of conveyance
at its own expense.
9.3 CLAIMS AND SUITS.
(a) The Receiver shall have the right, in its discretion, to (i) defend or
settle any claim or suit against the Assuming Bank with respect to which the
Receiver has indemnified the Assuming Bank in the same manner and to the same
extent as provided in Article XII, and (ii) defend or settle any claim or suit
against the Assuming Bank with respect to any Liability Assumed, which claim or
suit may result in a loss to the Receiver arising out of or related to this
Agreement, or which existed against the Failed Bank on or before the Bank
Closing Date. The exercise by the Receiver of any rights under this Section
9.3(a) shall not release the Assuming Bank with respect to any of its
obligations under this Agreement.
(b) In the event any action at law or in equity shall be instituted by any
Person against the Receiver and the Corporation as codefendants with respect to
any asset of the Failed Bank retained or acquired pursuant to this Agreement by
the Receiver, the Receiver agrees, at the request of the Corporation, to join
with the Corporation in a petition to remove the action to the United States
District Court for the proper district. The Receiver agrees to institute, with
or
29
without joinder of the Corporation as coplaintiff, any action with respect to
any such retained or acquired asset or any matter connected therewith whenever
notice requiring such action shall be given by the Corporation to the Receiver.
9.4 PAYMENT OF DEPOSITS. In the event any depositor does not accept the
obligation of the Assuming Bank to pay any Deposit liability of the Failed Bank
assumed by the Assuming Bank pursuant to this Agreement and asserts a claim
against the Receiver for all or any portion of any such Deposit liability, the
Assuming Bank agrees on demand to provide to the Receiver funds sufficient to
pay such claim in an amount not in excess of the Deposit liability reflected on
the books of the Assuming Bank at the time such claim is made. Upon payment by
the Assuming Bank to the Receiver of such amount, the Assuming Bank shall be
discharged from any further obligation under this Agreement to pay to any such
depositor the amount of such Deposit liability paid to the Receiver.
9.5 WITHHELD PAYMENTS. At any time, the Receiver or the Corporation may, in
its discretion, determine that all or any portion of any deposit balance assumed
by the Assuming Bank pursuant to this Agreement does not constitute a "Deposit"
(or otherwise, in its discretion, determine that it is the best interest of the
Receiver or Corporation to withhold all or any portion of any deposit), and may
direct the Assuming Bank to withhold payment of all or any portion of any such
deposit balance. Upon such direction, the Assuming Bank agrees to hold such
deposit and not to make any payment of such deposit balance to or on behalf of
the depositor, or to itself, whether by way of transfer, set-off, or otherwise.
The Assuming Bank agrees to maintain the "withheld payment" status of any such
deposit balance until directed in writing by the Receiver or the Corporation as
to its disposition. At the direction of the Receiver or the Corporation, the
Assuming Bank shall return all or any portion of such deposit balance to the
Receiver or the Corporation, as appropriate, and thereupon the Assuming Bank
shall be discharged from any further liability to such depositor with respect to
such returned deposit balance. If such deposit balance has been paid to the
depositor prior to a demand for return by the Corporation or the Receiver, and
payment of such deposit balance had not been previously withheld pursuant to
this Section, the Assuming Bank shall not be obligated to return such deposit
balance to the Receiver or the Corporation. The Assuming Bank shall be obligated
to reimburse the Corporation or the Receiver, as the case may be, for the amount
of any deposit balance or portion thereof paid by the Assuming Bank in
contravention of any previous direction to withhold payment of such deposit
balance or return such deposit balance the payment of which was withheld
pursuant to this Section.
9.6 PROCEEDINGS WITH RESPECT TO CERTAIN ASSETS AND LIABILITIES.
(a) In connection with any investigation, proceeding or other matter with
respect to any asset or liability of the Failed Bank retained by the Receiver,
or any asset of the Failed Bank acquired by the Receiver pursuant to this
Agreement, the Assuming Bank shall cooperate to the extent reasonably required
by the Receiver.
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(b) In addition to its obligations under Section 6.4, the Assuming Bank
shall provide representatives of the Receiver access at reasonable times and
locations without other limitation or qualification to (i) its directors,
officers, employees and agents and those of the Acquired Subsidiaries, and (ii)
its books and records, the books and records of the Acquired Subsidiaries and
all Loan Files, and copies thereof. Copies of books, records and Loan Files
shall be provided by the Assuming Bank as requested by the Receiver and the
costs of duplication thereof shall be borne by the Receiver.
(c) Not later than ten (10) days after the Put Notice pursuant to Section
3.4 or the date of the notice of transfer of any Loan by the Assuming Bank to
the Receiver pursuant to Section 3.6, the Assuming Bank shall deliver to the
Receiver such documents with respect to such Loan as the Receiver may request,
including without limitation the following: (i) all related Credit Documents
(other than certificates, notices and other ancillary documents), (ii) a
certificate setting forth the principal amount on the date of the transfer and
the amount of interest, fees and other charges then accrued and unpaid thereon,
and any restrictions on transfer to which any such Loan is subject, and (iii)
all Loan Files, and all documents, microfiche, microfilm and computer records
(including but not limited to magnetic tape, disc storage, card forms and
printed copy) maintained by, owned by, or in the possession of the Assuming Bank
or any Affiliate of the Assuming Bank relating to the transferred Loan.
9.7 INFORMATION. The Assuming Bank promptly shall provide to the
Corporation such other information, including financial statements and
computations, relating to the performance of the provisions of this Agreement as
the Corporation or the Receiver may request from time to time, and, at the
request of the Receiver, make available employees of the Failed Bank employed or
retained by the Assuming Bank to assist in preparation of the pro forma
statement pursuant to Section 8.1.
ARTICLE X
CONDITION PRECEDENT
The obligations of the parties to this Agreement are subject to the
Receiver and the Corporation having received at or before the Bank Closing Date
evidence reasonably satisfactory to each of any necessary approval, waiver, or
other action by any governmental authority, the board of directors of the
Assuming Bank, or other third party, with respect to this Agreement and the
transactions contemplated hereby, the closing of the Failed Bank and the
appointment of the Receiver, the chartering of the Assuming Bank, and any
agreements, documents, matters or proceedings contemplated hereby or thereby.
ARTICLE XI
REPRESENTATIONS AND WARRANTIES OF THE ASSUMING BANK
The Assuming Bank represents and warrants to the Corporation and the
Receiver as follows:
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(a) CORPORATE EXISTENCE AND AUTHORITY. The Assuming Bank (i) is duly
organized, validly existing and in good standing under the laws of its
Chartering Authority and has full power and authority to own and operate its
properties and to conduct its business as now conducted by it, and (ii) has full
power and authority to execute and deliver this Agreement and to perform its
obligations hereunder. The Assuming Bank has taken all necessary corporate
action to authorize the execution, delivery and performance of this Agreement
and the performance of the transactions contemplated hereby.
(b) THIRD PARTY CONSENTS. No governmental authority or other third party
consents (including but not limited to approvals, licenses, registrations or
declarations) are required in connection with the execution, delivery or
performance by the Assuming Bank of this Agreement, other than such consents as
have been duly obtained and are in full force and effect.
(c) EXECUTION AND ENFORCEABILITY. This Agreement has been duly executed and
delivered by the Assuming Bank and when this Agreement has been duly authorized,
executed and delivered by the Corporation and the Receiver, this Agreement will
constitute the legal, valid and binding obligation of the Assuming Bank,
enforceable in accordance with its terms.
(d) COMPLIANCE WITH LAW.
(i) Neither the Assuming Bank nor any of its Subsidiaries is in
violation of any statute, regulation, order, decision, judgment or decree of, or
any restriction imposed by, the United States of America, any State,
municipality or other political subdivision or any agency of any of the
foregoing, or any court or other tribunal having jurisdiction over the Assuming
Bank or any of its Subsidiaries or any assets of any such Person, or any foreign
government or agency thereof having such jurisdiction, with respect to the
conduct of the business of the Assuming Bank or of any of its Subsidiaries, or
the ownership of the properties of the Assuming Bank or any of its Subsidiaries,
which, either individually or in the aggregate with all other such violations,
would materially and adversely affect the business, operations or condition
(financial or otherwise) of the Assuming Bank or the ability of the Assuming
Bank to perform, satisfy or observe any obligation or condition under this
Agreement.
(ii) Neither the execution and delivery nor the performance by the
Assuming Bank of this Agreement will result in any violation by the Assuming
Bank of, or be in conflict with, any provision of any applicable law or
regulation, or any order, writ or decree of any court or governmental authority.
e) REPRESENTATIONS REMAIN TRUE. The Assuming Bank represents and warrants
that it has executed and delivered to the Corporation a Purchaser Eligibility
Certification and Confidentiality Agreement and that all information provided
and representations made by or on behalf of the Assuming Bank in connection with
this Agreement and the transactions contemplated hereby, including, but not
limited to, the Purchaser Eligibility Certification and Confidentiality
Agreement (which are affirmed and ratified hereby) are and remain true and
correct in all material respects and do not fail to state any fact required to
make the information contained therein not misleading.
32
ARTICLE XII
INDEMNIFICATION
12.1 INDEMNIFICATION OF INDEMNITEES. From and after the Bank Closing Date
and subject to the limitations set forth in this Section and Section 12.6 and
compliance by the Indemnitees with Section 12.2, the Receiver agrees to
indemnify and hold harmless the Indemnitees against any and all costs, losses,
liabilities, expenses (including attorneys' fees) incurred prior to the
assumption of defense by the Receiver pursuant to paragraph (d) of Section 12.2,
judgments, fines and amounts paid in settlement actually and reasonably incurred
in connection with claims against any Indemnitee based on liabilities of the
Failed Bank that are not assumed by the Assuming Bank pursuant to this Agreement
or subsequent to the execution hereof by the Assuming Bank or any Subsidiary or
Affiliate of the Assuming Bank for which indemnification is provided hereunder
in (a) of this Section 12.1, subject to certain exclusions as provided in (b) of
this Section 12.1:
(a)
(1) claims based on the rights of any shareholder or former
shareholder as such of (x) the Failed Bank, or (y) any Subsidiary or Affiliate
of the Failed Bank;
(2) claims based on the rights of any creditor as such of the Failed
Bank, or any creditor as such of any director, officer, employee or agent of the
Failed Bank, with respect to any indebtedness or other obligation of the Failed
Bank arising prior to the Bank Closing Date;
(3) claims based on the rights of any present or former director,
officer, employee or agent as such of the Failed Bank or of any Subsidiary or
Affiliate of the Failed Bank;
(4) claims based on any action or inaction prior to the Bank Closing
Date of the Failed Bank, its directors, officers, employees or agents as such,
or any Subsidiary or Affiliate of the Failed Bank, or the directors, officers,
employees or agents as such of such Subsidiary or Affiliate;
(5) claims based on any malfeasance, misfeasance or nonfeasance of the
Failed Bank, its directors, officers, employees or agents with respect to the
trust business of the Failed Bank, if any;
(6) claims based on any failure or alleged failure (not in violation
of law) by the Assuming Bank to continue to perform any service or activity
previously performed by the Failed Bank which the Assuming Bank is not required
to perform pursuant to this Agreement or which arise under any contract to which
the Failed Bank was a party which the Assuming Bank elected not to assume in
accordance with this Agreement and which neither the Assuming Bank nor any
Subsidiary or Affiliate of the Assuming Bank has assumed subsequent to the
execution hereof;
33
(7) claims arising from any action or inaction of any Indemnitee,
including for purposes of this Section 12.1(a)(7) the former officers or
employees of the Failed Bank or of any Subsidiary or Affiliate of the Failed
Bank that is taken upon the specific written direction of the Corporation or the
Receiver, other than any action or inaction taken in a manner constituting bad
faith, gross negligence or willful misconduct; and
(8) claims based on the rights of any depositor of the Failed Bank
whose deposit has been accorded "withheld payment" status and/or returned to the
Receiver or Corporation in accordance with Section 9.5 and/or has become an
"unclaimed deposit" or has been returned to the Corporation or the Receiver in
accordance with Section 2.3;
(b) provided, that, with respect to this Agreement, except for paragraphs
(7) and (8) of Section 12.1(a), no indemnification will be provided under this
Agreement for any:
(1) judgment or fine against, or any amount paid in settlement
(without the written approval of the Receiver) by, any Indemnitee in connection
with any action that seeks damages against any Indemnitee (a "counterclaim")
arising with respect to any Asset and based on any action or inaction of either
the Failed Bank, its directors, officers, employees or agents as such prior to
the Bank Closing Date, unless any such judgment, fine or amount paid in
settlement exceeds the greater of (i) the Repurchase Price of such Asset, or
(ii) the monetary recovery sought on such Asset by the Assuming Bank in the
cause of action from which the counterclaim arises; and in such event the
Receiver will provide indemnification only in the amount of such excess; and no
indemnification will be provided for any costs or expenses other than any costs
or expenses (including attorneys' fees) which, in the determination of the
Receiver, have been actually and reasonably incurred by such Indemnitee in
connection with the defense of any such counterclaim; and it is expressly agreed
that the Receiver reserves the right to intervene, in its discretion, on its
behalf and/or on behalf of the Receiver, in the defense of any such
counterclaim;
(2) claims with respect to any liability or obligation of the Failed
Bank that is expressly assumed by the Assuming Bank pursuant to this Agreement
or subsequent to the execution hereof by the Assuming Bank or any Subsidiary or
Affiliate of the Assuming Bank;
(3) claims with respect to any liability of the Failed Bank to any
present or former employee as such of the Failed Bank or of any Subsidiary or
Affiliate of the Failed Bank, which liability is expressly assumed by the
Assuming Bank pursuant to this Agreement or subsequent to the execution hereof
by the Assuming Bank or any Subsidiary or Affiliate of the Assuming Bank;
(4) claims based on the failure of any Indemnitee to seek recovery of
damages from the Receiver for any claims based upon any action or inaction of
the Failed Bank, its directors, officers, employees or agents as fiduciary,
agent or custodian prior to the Bank Closing Date;
34
(5) claims based on any violation or alleged violation by any
Indemnitee of the antitrust, branching, banking or bank holding company or
securities laws of the United States of America or any State thereof;
(6) claims based on the rights of any present or former creditor,
customer, or supplier as such of the Assuming Bank or any Subsidiary or
Affiliate of the Assuming Bank;
(7) claims based on the rights of any present or former shareholder as
such of the Assuming Bank or any Subsidiary or Affiliate of the Assuming Bank
regardless of whether any such present or former shareholder is also a present
or former shareholder of the Failed Bank;
(8) claims, if the Receiver determines that the effect of providing
such indemnification would be to (i) expand or alter the provisions of any
warranty or disclaimer thereof provided in Section 3.3 or any other provision of
this Agreement, or (ii) create any warranty not expressly provided under this
Agreement;
(9) claims which could have been enforced against any Indemnitee had
the Assuming Bank not entered into this Agreement;
(10) claims based on any liability for taxes or fees assessed with
respect to the consummation of the transactions contemplated by this Agreement,
including without limitation any subsequent transfer of any Assets or
Liabilities Assumed to any Subsidiary or Affiliate of the Assuming Bank;
(11) except as expressly provided in this Article XII, claims based on
any action or inaction of any Indemnitee, and nothing in this Agreement shall be
construed to provide indemnification for (i) the Failed Bank, (ii) any
Subsidiary or Affiliate of the Failed Bank, or (iii) any present or former
director, officer, employee or agent of the Failed Bank or its Subsidiaries or
Affiliates; provided, that the Receiver, in its discretion, may provide
indemnification hereunder for any present or former director, officer, employee
or agent of the Failed Bank or its Subsidiaries or Affiliates who is also or
becomes a director, officer, employee or agent of the Assuming Bank or its
Subsidiaries or Affiliates;
(12) claims or actions which constitute a breach by the Assuming Bank
of the representations and warranties contained in Article XI;
(13) claims arising out of or relating to the condition of or
generated by an Asset arising from or relating to the presence, storage or
release of any hazardous or toxic substance, or any pollutant or contaminant, or
condition of such Asset which violate any applicable Federal, State or local law
or regulation concerning environmental protection; and
(14) claims based on, related to or arising from any asset, including
a loan, acquired or liability assumed by the Assuming Bank, other than pursuant
to this Agreement.
35
12.2 CONDITIONS PRECEDENT TO INDEMNIFICATION. It shall be a condition
precedent to the obligation of the Receiver to indemnify any Person pursuant to
this Article XII that such Person shall, with respect to any claim made or
threatened against such Person for which such Person is or may be entitled to
indemnification hereunder:
(a) give written notice to the Regional Counsel (Litigation Branch) of the
Corporation in the manner and at the address provided in Section 13.7 of such
claim as soon as practicable after such claim is made or threatened; provided,
that notice must be given on or before the date which is six (6) years from the
date of this Agreement;
(b) provide to the Receiver such information and cooperation with respect
to such claim as the Receiver may reasonably require;
(c) cooperate and take all steps, as the Receiver may reasonably require,
to preserve and protect any defense to such claim;
(d) in the event suit is brought with respect to such claim, upon
reasonable prior notice, afford to the Receiver the right, which the Receiver
may exercise in its sole discretion, to conduct the investigation, control the
defense and effect settlement of such claim, including without limitation the
right to designate counsel and to control all negotiations, litigation,
arbitration, settlements, compromises and appeals of any such claim, all of
which shall be at the expense of the Receiver; provided, that the Receiver shall
have notified the Person claiming indemnification in writing that such claim is
a claim with respect to which the Person claiming indemnification is entitled to
indemnification under this Article XII;
(e) not incur any costs or expenses in connection with any response or suit
with respect to such claim, unless such costs or expenses were incurred upon the
written direction of the Receiver; provided, that the Receiver shall not be
obligated to reimburse the amount of any such costs or expenses unless such
costs or expenses were incurred upon the written direction of the Receiver;
(f) not release or settle such claim or make any payment or admission with
respect thereto, unless the Receiver consents in writing thereto, which consent
shall not be unreasonably withheld; provided, that the Receiver shall not be
obligated to reimburse the amount of any such settlement or payment unless such
settlement or payment was effected upon the written direction of the Receiver;
and
(g) take reasonable action as the Receiver may request in writing as
necessary to preserve, protect or enforce the rights of the indemnified Person
against any Primary Indemnitor.
12.3 NO ADDITIONAL WARRANTY. Nothing in this Article XII shall be construed
or deemed to (i) expand or otherwise alter any warranty or disclaimer thereof
provided under Section 3.3 or any other provision of this Agreement with respect
to, among other matters, the title, value, collectibility, genuineness,
enforceability or condition of any (x) Asset, or (y) asset of the Failed Bank
purchased by the Assuming Bank subsequent to the execution of this
36
Agreement by the Assuming Bank or any Subsidiary or Affiliate of the Assuming
Bank, or (ii) create any warranty not expressly provided under this Agreement
with respect thereto.
12.4 INDEMNIFICATION OF RECEIVER AND CORPORATION. From and after the Bank
Closing Date, the Assuming Bank agrees to indemnify and hold harmless the
Corporation and the Receiver and their respective directors, officers, employees
and agents from and against any and all costs, losses, liabilities, expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred in connection with any of the following:
(a) claims based on any and all liabilities or obligations of the Failed
Bank assumed by the Assuming Bank pursuant to this Agreement or subsequent to
the execution hereof by the Assuming Bank or any Subsidiary or Affiliate of the
Assuming Bank, whether or not any such liabilities subsequently are sold and/or
transferred, other than any claim based upon any action or inaction of any
Indemnitee as provided in paragraph (7) or (8) of Section 12.1(a); and
(b) claims based on any act or omission of any Indemnitee (including but
not limited to claims of any Person claiming any right or title by or through
the Assuming Bank with respect to Assets transferred to the Receiver pursuant to
Section 3.4 or 3.6), other than any action or inaction of any Indemnitee as
provided in paragraph (7) or (8) of Section 12.1(a).
12.5 OBLIGATIONS SUPPLEMENTAL. The obligations of the Receiver, and the
Corporation as guarantor in accordance with Section 12.7, to provide
indemnification under this Article XII are to supplement any amount payable by
any Primary Indemnitor to the Person indemnified under this Article XII.
Consistent with that intent, the Receiver agrees only to make payments pursuant
to such indemnification to the extent not payable by a Primary Indemnitor. If
the aggregate amount of payments by the Receiver, or the Corporation as
guarantor in accordance with Section 12.7, and all Primary Indemnitors with
respect to any item of indemnification under this Article XII exceeds the amount
payable with respect to such item, such Person being indemnified shall notify
the Receiver thereof and, upon the request of the Receiver, shall promptly pay
to the Receiver, or the Corporation as appropriate, the amount of the Receiver's
(or Corporation's) payments to the extent of such excess.
12.6 CRIMINAL CLAIMS. Notwithstanding any provision of this Article XII to
the contrary, in the event that any Person being indemnified under this Article
XII shall become involved in any criminal action, suit or proceeding, whether
judicial, administrative or investigative, the Receiver shall have no obligation
hereunder to indemnify such Person for liability with respect to any criminal
act or to the extent any costs or expenses are attributable to the defense
against the allegation of any criminal act, unless (i) the Person is successful
on the merits or otherwise in the defense against any such action, suit or
proceeding, or (ii) such action, suit or proceeding is terminated without the
imposition of liability on such Person.
12.7 LIMITED GUARANTY OF THE CORPORATION. The Corporation hereby guarantees
performance of the Receiver's obligation to indemnify the Assuming Bank as set
forth in this Article XII. It is a condition to the Corporation's obligation
hereunder that the Assuming Bank
37
shall comply in all respects with the applicable provisions of this Article XII.
The Corporation shall be liable hereunder only for such amounts, if any, as the
Receiver is obligated to pay under the terms of this Article XII but shall fail
to pay. Except as otherwise provided above in this Section 12.7, nothing in this
Article XII is intended or shall be construed to create any liability or
obligation on the part of the Corporation, the United States of America or any
department or agency thereof under or with respect to this Article XII, or any
provision hereof, it being the intention of the parties hereto that the
obligations undertaken by the Receiver under this Article XII are the sole and
exclusive responsibility of the Receiver and no other Person or entity.
12.8 SUBROGATION. Upon payment by the Receiver, or the Corporation as
guarantor in accordance with Section 12.7, to any Indemnitee for any claims
indemnified by the Receiver under this Article XII, the Receiver, or the
Corporation as appropriate, shall become subrogated to all rights of the
Indemnitee against any other Person to the extent of such payment.
ARTICLE XIII
MISCELLANEOUS
13.1 ENTIRE AGREEMENT. This Agreement embodies the entire agreement of the
parties hereto in relation to the subject matter herein and supersedes all prior
understandings or agreements, oral or written, between the parties.
13.2 HEADINGS. The headings and subheadings of the Table of Contents,
Articles and Sections contained in this Agreement, except the terms identified
for definition in Article I and elsewhere in this Agreement, are inserted for
convenience only and shall not affect the meaning or interpretation of this
Agreement or any provision hereof.
13.3 COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by the duly authorized representative of a different party
hereto on separate counterparts, each of which when so executed shall be deemed
to be an original and all of which when taken together shall constitute one and
the same Agreement.
13.4 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS HEREUNDER
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE FEDERAL LAW OF THE
UNITED STATES OF AMERICA, AND IN THE ABSENCE OF CONTROLLING FEDERAL LAW, IN
ACCORDANCE WITH THE LAWS OF THE STATE IN WHICH THE MAIN OFFICE OF THE FAILED
BANK IS LOCATED.
13.5 SUCCESSORS. All terms and conditions of this Agreement shall be
binding on the successors and assigns of the Receiver, the Corporation and the
Assuming Bank. Except as otherwise specifically provided in this Agreement,
nothing expressed or referred to in this Agreement is intended or shall be
construed to give any Person other than the Receiver, the Corporation and the
Assuming Bank any legal or equitable right, remedy or claim under or with
respect to this Agreement or any provisions contained herein, it being the
intention of the parties
38
hereto that this Agreement, the obligations and statements of responsibilities
hereunder, and all other conditions and provisions hereof are for the sole and
exclusive benefit of the Receiver, the Corporation and the Assuming Bank and for
the benefit of no other Person.
13.6 MODIFICATION; ASSIGNMENT. No amendment or other modification,
rescission, release, or assignment of any part of this Agreement shall be
effective except pursuant to a written agreement subscribed by the duly
authorized representatives of the parties hereto.
13.7 NOTICE. Any notice, request, demand, consent, approval or other
communication to any party hereto shall be effective when received and shall be
given in writing, and delivered in person against receipt therefor, or sent by
certified mail, postage prepaid, courier service, telex or facsimile
transmission to such party (with copies as indicated below) at its address set
forth below or at such other address as it shall hereafter furnish in writing to
the other parties. All such notices and other communications shall be deemed
given on the date received by the addressee.
ASSUMING BANK
Monroe Bank & Trust, Monroe, Michigan
Attention: Xxxx X. Xxxxxxx
Executive Vice President and Chief Financial Officer
000 X. Xxxxx Xxxxxx
Xxxxxx, XX 00000
with a copy to: H. Xxxxxxx Xxxxxxx
RECEIVER AND CORPORATION
Federal Deposit Insurance Corporation,
Receiver of Main Street Bank, Northville, MI
0000 Xxxxx Xx.
Xxxxxx, Xxxxx 00000
Attention: Deputy Director (DRR-Field Operations Branch)
39
with copy to: Regional Counsel (Litigation Branch)
AND WITH RESPECT TO NOTICES UNDER ARTICLE XII:
Federal Deposit Insurance Corporation
Receiver of Main Street Bank, Northville, MI
0000 Xxxxx Xx.
Xxxxxx, Xxxxx 00000
Attention: Regional Counsel (Litigation Branch)
13.8 MANNER OF PAYMENT. All payments due under this Agreement shall be in
lawful money of the United States of America in immediately available funds as
each party hereto may specify to the other parties; provided, that in the event
the Receiver or the Corporation is obligated to make any payment hereunder in
the amount of $25,000.00 or less, such payment may be made by check.
13.9 COSTS, FEES AND EXPENSES. Except as otherwise specifically provided
herein, each party hereto agrees to pay all costs, fees and expenses which it
has incurred in connection with or incidental to the matters contained in this
Agreement, including without limitation any fees and disbursements to its
accountants and counsel; provided, that the Assuming Bank shall pay all fees,
costs and expenses (other than attorneys' fees incurred by the Receiver)
incurred in connection with the transfer to it of any Assets or Liabilities
Assumed hereunder or in accordance herewith.
13.10 WAIVER. Each of the Receiver, the Corporation and the Assuming Bank
may waive its respective rights, powers or privileges under this Agreement;
provided, that such waiver shall be in writing; and further provided, that no
failure or delay on the part of the Receiver, the Corporation or the Assuming
Bank to exercise any right, power or privilege under this Agreement shall
operate as a waiver thereof, nor will any single or partial exercise of any
right, power or privilege under this Agreement preclude any other or further
exercise thereof or the exercise of any other right, power or privilege by the
Receiver, the Corporation, or the Assuming Bank under this Agreement, nor will
any such waiver operate or be construed as a future waiver of such right, power
or privilege under this Agreement.
13.11 SEVERABILITY. If any provision of this Agreement is declared invalid
or unenforceable, then, to the extent possible, all of the remaining provisions
of this Agreement shall remain in full force and effect and shall be binding
upon the parties hereto.
13.12 TERM OF AGREEMENT. This Agreement shall continue in full force and
effect until the sixth (6th) anniversary of the Bank Closing Date; provided,
that the provisions of Section 6.3 and 6.4 shall survive the expiration of the
term of this Agreement. Provided, however, the receivership of the Failed Bank
may be terminated prior to the expiration of the term of this Agreement; in such
event, the guaranty of the Corporation, as provided in and in accordance with
the provisions of Section 12.7 shall be in effect for the remainder of the term.
Expiration of
40
the term of this Agreement shall not affect any claim or liability of any party
with respect to any (i) amount which is owing at the time of such expiration,
regardless of when such amount becomes payable, and (ii) breach of this
Agreement occurring prior to such expiration, regardless of when such breach is
discovered.
13.13 SURVIVAL OF COVENANTS, ETC. The covenants, representations, and
warranties in this Agreement shall survive the execution of this Agreement and
the consummation of the transactions contemplated hereunder.
[SIGNATURE PAGE FOLLOWS]
41
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized representatives as of the date first above
written.
FEDERAL DEPOSIT INSURANCE CORPORATION,
RECEIVER OF MAIN STREET BANK
NORTHVILLE, MI
BY:
------------------------------------
TITLE:
---------------------------------
Attest:
-------------------------------------
FEDERAL DEPOSIT INSURANCE CORPORATION
BY:
------------------------------------
TITLE:
---------------------------------
Attest:
-------------------------------------
MONROE BANK & TRUST
BY:
------------------------------------
TITLE:
---------------------------------
Attest:
-------------------------------------
42
SCHEDULE 2.1 - CERTAIN LIABILITIES ASSUMED
43
SCHEDULE 3.1 - CERTAIN ASSETS PURCHASED
44
SCHEDULE 3.1(E) - LOANS SECURED, IN WHOLE OR IN PART, BY ASSUMED DEPOSITS OR
DEPOSITS AT OTHER DEPOSITORY INSTITUTIONS
SEE ATTACHED LIST
TO BE FURNISHED POST CLOSING
45
SCHEDULE 3.1(I) - ACQUIRED SUBSIDIARIES
NONE
46
SCHEDULE 3.2 - PURCHASE PRICE OF ASSETS OR ASSETS
(a) cash and receivables from depository Book Value
institutions, including cash items in the
process of collection, plus interest
thereon:
(b) securities (exclusive of the capital As provided in Section 3.2(b)
stock of Acquired Subsidiaries), plus
interest thereon:
(c) federal funds sold and repurchase Book Value
agreements, if any, including interest
thereon:
(d) Omitted
(e) Loans purchased pursuant to Book Value
Section 3.1(e):
(f) credit card business, if any, including Book Value
all outstanding extensions of credit:
(g) Safe Deposit Boxes and related business, Fair Market Value
safekeeping business and trust business,
if any:
(h) Records and other documents: Book Value
(i) capital stock of any Acquired Fair Market Value
Subsidiaries:
(j) amounts owed to the Failed Bank by any Fair Market Value
Acquired Subsidiary:
(k) assets securing Deposits of public money, Fair Market Value
to the extent not otherwise purchased
hereunder:
(l) Overdrafts of customers: Book Value
47
ASSETS SUBJECT TO AN OPTION TO PURCHASE:
(a) Bank Premises: Fair Market Value
(b) Furniture and Equipment: Fair Market Value
(c) Fixtures: Fair Market Value
(d) Other Equipment: Fair Market Value
48
SCHEDULE 3.5(K) - SECURITIES NOT PURCHASED
AS SPECIFIED IN SECTION 3.5
49
EXHIBIT 4.13
INTERIM ASSET SERVICING ARRANGEMENT
(a) With respect to each asset (or liability) designated from time to time
by the Receiver to be serviced by the Assuming Bank pursuant to this Arrangement
(such being designated as "Pool Assets"), during the term of this Arrangement,
the Assuming Bank shall:
(i) Promptly apply payments received with respect to any Pool Assets;
(ii) Reverse and return insufficient funds checks;
(iii) Pay (A) participation payments to participants in Loans, as and
when received; and (B) tax and insurance bills on Pool Assets as they come due,
out of escrow funds maintained for purposes;
(iv) Maintain accurate records reflecting (A) the payment history of
Pool Assets, with updated information received concerning changes in the address
or identity of the obligors and (B) usage of data processing equipment and
employee services with respect to servicing duties;
(v) Send billing statements to obligors on Pool Assets to the extent
that such statements were sent by the Failed Bank;
(vi) Send notices to obligors who are in default on Loans (in the same
manner as the Failed Bank);
(vii) Send to the Receiver, Attn: Managing Liquidator, at the address
provided in Section 13.7 of the Agreement, via overnight delivery: (A) on a
weekly basis, weekly reports for the Pool Assets, including, without limitation,
reports reflecting collections and the trial balances, transaction journals and
loan histories for Pool Assets having activity, together with copies of (1)
checks received, (2) insufficient funds checks returned, (3) checks for payment
to participants or for taxes and insurance, (4) pay-off requests, (5) notices to
defaulted obligors, and (6) data processing and employee logs and (B) any other
reports, copies or information as may be periodically or from time to time
requested;
(viii) Remit on a weekly basis to the Receiver, Attn: Division of
Finance, Cashier Unit, Operations, at the address in (vii), via wire transfer to
the account designated by the Receiver, all payments received on Pool Assets
managed by the Assuming Bank or at such time and place and in such manner as may
be directed by the Receiver;
50
(ix) prepare and timely file all information reports with appropriate
tax authorities, and, if required by the Receiver, prepare and file tax returns
and pay taxes due on or before the due date, relating to the Pool Assets; and
(x) provide and furnish such other services, operations or functions
as may be required with regard to Pool Assets, including, without limitation, as
may be required with regard to any business, enterprise or agreement which is a
Pool Asset, all as may be required by the Receiver.
Notwithstanding anything to the contrary in this Section, the Assuming Bank
shall not be required to initiate litigation or other collection proceedings
against any obligor or any collateral with respect to any defaulted Loan. The
Assuming Bank shall promptly notify the Receiver, at the address provided above
in subparagraph (a)(vii), of any claims or legal actions regarding any Pool
Asset.
(b) The Receiver agrees to reimburse the Assuming Bank for actual,
reasonable and necessary expenses incurred in connection with the performance of
duties pursuant to this Arrangement, including expenses of photocopying, postage
and express mail, and data processing and employee services (based upon the
number of hours spent performing servicing duties).
(c) The Assuming Bank shall provide the services described herein for an
initial period of ninety (90) days after the Bank Closing Date. At the option of
the Receiver, exercisable by notice given not later than ten (10) days prior to
the end of such initial period or a renewal period, the Assuming Bank shall
continue to provide such services for such renewal period(s) as designated by
the Receiver, up to the Settlement Date.
(d) At any time during the term of this Arrangement, the Receiver may, upon
written notice to the Assuming Bank, remove one or more Pool Assets from the
Pool, at which time the Assuming Bank's responsibility with respect thereto
shall terminate.
(e) At the expiration of this Agreement or upon the termination of the
Assuming Bank's responsibility with respect to any Pool Asset pursuant to
paragraph (d) hereof, the Assuming Bank shall:
(i) deliver to the Receiver (or its designee) all of the Credit
Documents and Pool Records relating to the Pool Assets; and
(ii) cooperate with the Receiver to facilitate the orderly transition
of managing the Pool Assets to the Receiver (or its designee).
(f) At the request of the Receiver, the Assuming Bank shall perform such
transitional services with regard to the Pool Assets as the Receiver may
request. Transitional services may include, without limitation, assisting in any
due diligence process deemed necessary by the Receiver and providing to the
Receiver or its designee(s) (x) information and data regarding the
51
Pool Assets, including, without limitation, system reports and data downloads
sufficient to transfer the Pool Assets to another system or systems, and (y)
access to employees of the Assuming Bank involved in the management of, or
otherwise familiar with, the Pool Assets.
52
