Exhibit 1.1
PURCHASE AND ASSUMPTION AGREEMENT
by and among
Sovereign Bank
Rockland Trust Company
and
Independent Bank Corp.
May 17, 2000
TABLE OF CONTENTS
ARTICLE I DEFINITIONS............................................................................................2
Section 1.1. Defined Terms...................................................................................2
Section 1.2. Construction of Certain Terms..................................................................17
Section 1.3. Accounting Terms...............................................................................18
ARTICLE II PURCHASE AND SALE OF PURCHASED ASSETS
AND ASSIGNMENT AND ASSUMPTION OF ASSUMED LIABILITIES.............................................................18
Section 2.1. Purchase and Sale of Assets; No Other Assets Purchased.........................................18
Section 2.2. Assumed Liabilities............................................................................19
ARTICLE III PURCHASE PRICE; PAYMENT; SETTLEMENT; TAX ALLOCATION.................................................21
Section 3.1. Purchase Price.................................................................................21
Section 3.2. Payment at Closing.............................................................................22
Section 3.3. Adjustment of Estimated Payment Amount.........................................................23
Section 3.4. Allocation of Purchase Price...................................................................23
Section 3.5. Proration; Other Closing Date Adjustments......................................................25
ARTICLE IV TAXES................................................................................................26
Section 4.1. Sales, Transfer and Use Taxes..................................................................26
Section 4.2. Information Reports............................................................................26
ARTICLE V CLOSING...............................................................................................27
Section 5.1. Closing Date...................................................................................27
Section 5.2. Sovereign's Deliveries.........................................................................28
Section 5.3. Purchaser's Deliveries.........................................................................30
ARTICLE VI REPRESENTATIONS AND WARRANTIES OF SOVEREIGN..........................................................31
Section 6.1. Assignment of FNB and Fleet Representations and Warranties.....................................31
Section 6.2. Organization...................................................................................31
Section 6.3. Authority......................................................................................31
Section 6.4. Non-Contravention..............................................................................32
Section 6.5. Legal Proceedings..............................................................................32
Section 6.6. Loans..........................................................................................32
Section 6.7. No Broker......................................................................................32
Section 6.8. Regulatory Matters.............................................................................33
Section 6.9. Limitations on and Disclaimer of Representations and Warranties and
Purchaser's Release in Connection Therewith....................................................33
ARTICLE VII REPRESENTATIONS AND WARRANTIES OF PURCHASER AND
INDEPENDENT......................................................................................................35
Section 7.1. Organization...................................................................................35
Section 7.2. Authority......................................................................................35
Section 7.3. Non-Contravention..............................................................................35
(i)
Section 7.4. Legal Proceedings..............................................................................36
Section 7.5. Consents and Other Regulatory Matters..........................................................36
Section 7.6. WARN Act.......................................................................................37
Section 7.7. Capital Available..............................................................................38
Section 7.8. No Broker......................................................................................38
ARTICLE VIII COVENANTS OF SOVEREIGN.............................................................................38
Section 8.1. Assignment of FNB Covenants....................................................................38
Section 8.2. Consents.......................................................................................38
Section 8.3. Nonsolicitation of Customers by FNB............................................................39
Section 8.4. Nonsolicitation of Purchaser's Employees by FNB................................................39
Section 8.5. Nonsolicitation of Customers by Sovereign......................................................40
Section 8.6. Nonsolicitation of Purchaser's Employees by Sovereign..........................................40
ARTICLE IX COVENANTS OF PURCHASER AND Independent...............................................................41
Section 9.1. Regulatory Approvals and Standards.............................................................41
Section 9.2. [Reserved].....................................................................................42
Section 9.3. Solicitation of Accounts.......................................................................42
Section 9.4. Nonsolicitation of Certain FNB Employees.......................................................43
Section 9.5. Recording of Instruments of Assignment.........................................................43
Section 9.6. Transferred Employees..........................................................................43
Section 9.7. Interviews.....................................................................................47
Section 9.8. Nonsolicitation of Middle Market Customers by Purchaser........................................47
Section 9.9. Nonsolicitation of Middle Market Employees by Purchaser........................................48
Section 9.10. Independent Guaranty..........................................................................48
ARTICLE X ACCESS; EMPLOYEE AND CUSTOMER COMMUNICATIONS..........................................................48
Section 10.1. Access by Purchaser...........................................................................48
Section 10.2. Communications to Employees; Training.........................................................49
Section 10.3. Communications with Customers.................................................................50
ARTICLE XI FACILITIES...........................................................................................51
Section 11.1. Environmental Diligence.......................................................................51
Section 11.2. Title.........................................................................................51
ARTICLE XII TRANSITIONAL MATTERS................................................................................51
Section 12.1. Payment of Deposit Liabilities................................................................51
Section 12.2. Delivery of Purchaser's Check Forms...........................................................53
Section 12.3. Uncollected Checks............................................................................53
Section 12.4. Default on Loan Payments......................................................................54
Section 12.5. Notices to Obligors on Loans..................................................................54
Section 12.6. New Telephone Numbers.........................................................................54
Section 12.7. New ATM/Debit Cards...........................................................................55
Section 12.8. Installation of Equipment by Purchaser........................................................55
Section 12.9. Deactivation of ATMs and ATM/Debit Cards......................................................55
(ii)
Section 12.10. Signage......................................................................................55
Section 12.11. Letters of Credit............................................................................56
Section 12.12. Actions With Respect to ▇▇▇, ▇▇▇▇▇ Plan and Employee Pension Plan
Deposit Liabilities............................................................................58
Section 12.13. Bulk Transfer Laws...........................................................................60
Section 12.14. Ancillary Agreements.........................................................................60
ARTICLE XIII CONDITIONS TO CLOSING..............................................................................60
Section 13.1. Conditions to Obligations of Sovereign........................................................60
Section 13.2. Conditions to Obligations of Purchaser and Independent........................................62
ARTICLE XIV DATA PROCESSING.....................................................................................63
Section 14.1. Conversion....................................................................................63
ARTICLE XV INDEMNITY............................................................................................63
Section 15.1. Sovereign's Indemnity.........................................................................63
Section 15.2. Independent Indemnity.........................................................................64
Section 15.3. Indemnification Procedure.....................................................................65
Section 15.4. Limitations on Liability......................................................................66
Section 15.5. General.......................................................................................66
Section 15.6. Survival......................................................................................67
Section 15.7. Certain Limitations...........................................................................67
ARTICLE XVI POST-CLOSING MATTERS................................................................................69
Section 16.1. Further Assurances............................................................................69
Section 16.2. Access to and Retention of Books and Records..................................................70
Section 16.3. Deposit Histories.............................................................................71
ARTICLE XVII MISCELLANEOUS......................................................................................71
Section 17.1. Expenses......................................................................................71
Section 17.2. Trade Names and Trademarks....................................................................72
Section 17.3. Termination; Extension of Closing Date........................................................73
Section 17.4. Modification and Waiver.......................................................................74
Section 17.5. Binding Effect; Assignment....................................................................74
Section 17.6. Confidentiality...............................................................................75
Section 17.7. Entire Agreement; Governing Law...............................................................75
Section 17.8. Consent to Jurisdiction; Waiver of Jury Trial.................................................76
Section 17.9. Waiver of Certain Damages.....................................................................76
Section 17.10. Severability.................................................................................77
Section 17.11. Counterparts.................................................................................77
Section 17.12. Notices......................................................................................77
Section 17.13. Interpretation...............................................................................78
Section 17.14. Specific Performance.........................................................................79
Section 17.15. No Third Party Beneficiaries.................................................................79
Section 17.16. Survival.....................................................................................79
(iii)
(iv)
SCHEDULES
Schedule 6.8 Regulatory Approvals
(v)
EXHIBITS
None.
(vi)
PURCHASE AND ASSUMPTION AGREEMENT
This Purchase and Assumption Agreement (the "Agreement") dated as of
and effective May 17, 2000 by and among Sovereign Bank, a federal savings bank
with its principal office at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ("Sovereign"), Rockland Trust Company, a Massachusetts chartered trust
company with its principal office at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ("Purchaser") and Independent Bank Corp., a Massachusetts corporation with
its principal office at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
("Independent").
BACKGROUND:
Pursuant to the terms of an Amended and Restated Purchase and
Assumption Agreement dated February 28, 2000 (as it may from time to time
hereafter be amended, the "Fleet/Sovereign P&A Agreement") entered into by and
among, INTER ALIA, Sovereign and Fleet National Bank ("FNB"), FNB has agreed to
sell and transfer to Sovereign and Sovereign has agreed to purchase and assume
certain FNB assets and liabilities, including the Cape Cod Business (as
hereinafter defined).
Pursuant to the terms of a Purchase and Assumption Agreement
dated September 24, 1999, (as it may from time to time hereafter be amended, the
"Fleet/Rockland P&A Agreement"), entered into by and among, INTER ALIA,
Purchaser and FNB, FNB has agreed to sell and transfer to Purchaser and
Purchaser has agreed to purchase and assume certain other FNB assets and
liabilities (collectively, the "Mainland Business"). The closing on Purchaser's
acquisition of Mainland Business is scheduled to occur on August 4, 2000.
Sovereign has concluded that its retention of the Cape Cod
Business would be inconsistent with its strategic business plan. Purchaser has
concluded that its acquisition of the Cape Cod Business would be desirable from
the standpoint of its strategic business plan. Accordingly, Sovereign wishes, to
sell and transfer to Purchaser and Purchaser wishes to acquire from Sovereign
the Cape Cod Business on the terms and conditions herein after set forth and
subject to the receipt of all required regulatory approvals and other
conditions. It is the intention of the parties that, insofar as possible,
Purchaser will acquire the Cape Cod Business from
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Sovereign on the same terms and conditions as Sovereign acquires the Cape Cod
Business from FNB.
Sovereign and FNB entered into a letter agreement dated
September 3, 1999 (the "Community Bank Letter Agreement") and will negotiate and
enter into an amendment to the Community Bank Letter Agreement (the "Community
Bank Amendment") for the purpose of designating the branches attributable to the
Cape Cod Business as "Community Bank Branches" so that such branches: (i) will
not be conveyed to Sovereign at the Second Closing or the Third Closing (as such
terms are defined in the Fleet/Sovereign P&A Agreement), but (ii) will be
conveyed to Sovereign on August 4, 2000, together with the other assets and
liabilities attributable to the Cape Cod Business, pursuant to an Additional
Business Notice to be given by FNB to Sovereign. Sovereign and Fleet will also
negotiate and enter into a supplement to the Community Bank Amendment relating
to the purchase by Sovereign of the Cape Cod Business (the "Cape Cod
Supplement") under the terms of which, INTER ALIA, FNB will agree to conduct an
account data conversion with respect to the Cape Cod Business directly with
Purchaser and otherwise cooperate in connection with the transfer of the Cape
Cod Business to Purchaser as contemplated by this Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual
promises and covenants contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, and
intending to be legally bound hereby subject to the terms and conditions set
forth herein, the parties agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1. DEFINED TERMS. As used in this Agreement, the following
terms shall have the following meanings:
"ACCRUED INTEREST" shall mean, as of any date, (a) with
respect to the Deposit Liabilities, the interest, dividends, fees,
costs and other charges that have been accrued on but not paid,
credited, or charged to the Deposit Liabilities, all as set forth in
FNB's general ledger, and (b) with respect to the Loans, the Advance
Lines and the Negative
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Deposits, interest, fees, premiums, consignment fees, costs and other
charges that have accrued on or been charged to the Loans, the Advance
Lines and the Negative Deposits but not paid by the applicable
borrower, or any guarantor, surety or other obligor therefor, or
otherwise collected by offset, recourse to collateral or otherwise, all
as set forth in FNB's general ledger immediately prior to the
acquisition of the Cape Cod Business by Sovereign.
"ADA" shall mean the Americans with Disabilities Act of 1990,
as amended, and similar state and local laws, regulations, rules and
ordinances.
"ADJUSTED PAYMENT AMOUNT" shall have the meaning specified in
Section 3.3(a).
"ADVANCE LINES" shall mean all overdraft lines of credit to
owners of the Deposit Liabilities, plus any and all Accrued Interest
thereon.
"AFFILIATE" shall mean, with respect to any Person, any other
Person that directly or indirectly through one or more intermediaries,
controls, is controlled by, or is under common control with, such
Person, or a director, officer, partner, joint venturer or member of
such Person and any successors or assigns of such Person.
"ASSIGNMENT AND ASSUMPTION AGREEMENT" shall have the meaning
specified in Section 5.2(c).
"ASSUMED LIABILITIES" shall have the meaning specified in
Section 2.2.
"ASSUMED SEVERANCE OBLIGATIONS" shall have the meaning
specified in Section 9.6(b).
"ATMS" shall mean the automated teller machines relating to
the Cape Cod Business.
"AVERAGE DAILY BALANCE" shall mean the aggregate average daily
balance (including Accrued Interest) of the Deposit Liabilities for the
period commencing twenty (20) Business Days prior to the fifth (5th)
Business Day prior to the Closing Date and ending on the fifth (5th)
Business Day prior to the Closing Date.
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"BANKBOSTON" shall mean BankBoston Corporation, a
Massachusetts corporation.
"BKB" shall mean BankBoston, N.A.
"BOARD" shall mean the Board of Governors of the Federal
Reserve System.
"BRANCHES" shall mean the following branch offices of FNB to
be acquired by Purchaser hereunder:
BRANCH ADDRESS
West Dennis ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇
North Eastham ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇
Hyannis ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇
Chatham ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇
"BUSINESS DAY" shall mean any day that is not a Saturday, a
Sunday or a day on which banks are required or authorized by law to be
closed in the Commonwealth of Massachusetts.
"CAPE COD BUSINESS" shall mean the Consumer Bank Business and
the Small Business Bank Business.
"CAPE COD SUPPLEMENT" shall have the meaning specified in the
Background section above.
"CASH" shall mean all ▇▇▇▇▇ cash, vault cash, teller cash, ATM
cash and prepaid postage located at the Branches (including foreign
currency), in each case as of the close of business at the respective
Branch (6:00 p.m. for each automated teller machine) on the Closing
Date.
"CLOSING" shall have the meaning specified in Section 5.1(a).
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"CLOSING DATE" shall have the meaning specified in Section
5.1(a).
"CODE" shall mean the Internal Revenue Code of 1986, as
amended, and the regulations promulgated thereunder.
"COLLATERAL AGENT" shall mean Sovereign (or FNB), in its
capacity as collateral agent under the Collateral Agency Agreement.
"COLLATERAL AGENCY AGREEMENT" shall mean a Collateral Agency
Agreement to be dated as of the Closing Date among Sovereign (or FNB),
Purchaser and the Collateral Agent, in the form of EXHIBIT L to the
Fleet/Sovereign P&A Agreement.
"COLLATERAL ASSIGNMENT INSTRUMENTS" shall mean such
assignments, financing statements, endorsements, stock powers or other
instruments as shall be required under applicable law to transfer to
the Collateral Agent in accordance with the terms of the Collateral
Agency Agreement, the Letter of Credit Collateral and the rights and
remedies of Sovereign (or FNB) with respect thereto.
"COMMUNITY BANK LETTER AGREEMENT" shall have the meaning
specified in the Background section above.
"COMMUNITY BANK AMENDMENT" shall have the meaning specified in
the Background section above.
"COMPARABLE JOB" shall mean, with respect to any Consumer Bank
Employee or Consumer Bank Related Employee, a position with Purchaser
(a) with the same base salary or wage, (b) with reasonably similar
employment background and skill set requirements, (c) with no
significant changes in work schedule, and (d) (i) with respect to a
Consumer Bank Employee or Consumer Bank Related Employee located at a
Branch, to be performed at the same Branch or at another facility
located within thirty (30) miles of the such employee's current Branch
or home, whichever is closer, or (ii) with respect to any other
Consumer Bank Employee or Consumer Bank Related Employee, to be
performed within forty (40) miles of such employee's current office or
home, each as applicable to such employee immediately prior to the
Closing Date.
5
"CONSUMER BANK ASSETS" shall mean the Real Property, the ATMs,
the Fixed Assets, the Consumer Bank Loans, the Cash, and the Safe
Deposit Agreements and all keys for the related safe deposit boxes.
"CONSUMER BANK BUSINESS" shall mean the Consumer Bank Assets,
the Consumer Bank Liabilities and the Consumer Bank Employees.
"CONSUMER BANK EMPLOYEES" shall mean the FNB employees listed
on SCHEDULE 1.1(K) to the Fleet/Sovereign P&A Agreement who are
employed in the Cape Cod Business, but excluding such employees who
shall leave FNB's employ between the date of such Schedule and the
close of business on the Closing Date, but including replacements of
such employees made in the ordinary course of business between the date
hereof and the Closing Date and including any Person who fills a vacant
position at a Branch in the ordinary course of business between the
date hereof and the Closing Date to provide Branch services to
Customers.
"CONSUMER BANK LIABILITIES" shall mean the Consumer Bank
Liabilities (as defined in the Fleet/Sovereign P&A Agreement)
attributable to the Cape Cod Business.
"CONSUMER BANK LOANS" shall mean the Consumer Bank Loans (as
defined in the Fleet/Sovereign P&A Agreement) attributable to the Cape
Cod Business.
"CONSUMER BANK RELATED EMPLOYEES" shall mean those employees
who are from time to time designated as such in writing by FNB for
possible interviews with Purchaser for employment with Purchaser
following the Closing Date.
"CONSUMER DEPOSIT LIABILITIES" shall mean the Consumer Deposit
Liabilities (as defined in the Fleet/Sovereign P&A Agreement)
attributable to the Cape Cod Business
"CONTRIBUTION AGREEMENT" shall mean that certain Contribution
Agreement dated as of October 28, 1997, as amended on February 20,
1998, by and between Advanta Corporation and Fleet.
6
"CUSTOMERS" shall mean, individually and collectively, (a) the
Persons named as the owners of the deposit accounts relating to the
Deposit Liabilities, (b) the primary obligors under the Loans, and (c)
the parties (other than FNB and its Affiliates) to the Safe Deposit
Agreements.
"CUSTOMER NOTICES" shall have the meaning specified in Section
10.3(a).
"DAMAGES" shall have the meaning specified in Section 15.1.
"DEPOSIT LIABILITIES" or "DEPOSIT LIABILITY" shall mean the
Consumer Deposit Liabilities and the Small Business Bank Deposit
Liabilities, but shall exclude the Excluded ▇▇▇/▇▇▇▇▇/Employee Pension
Plan Deposits and the Excluded Deposits.
"DEPOSIT PREMIUM" shall have the meaning specified in Section
3.1(a).
"DRAFT CLOSING STATEMENT" shall mean a draft closing statement
as of the close of business of the fifth (5th) Business Day immediately
preceding the Closing Date setting forth an estimate of the Purchase
Price (including all adjustments and prorations thereto).
"EMPLOYEE PENSION PLAN" shall mean any employee pension plan
for which FNB served as a trustee immediately prior to the acquisition
of the Cape Cod Business by Sovereign, including but not limited to,
employee pension benefit plans as defined in Section 3(2) of ERISA,
retirement plans qualified under the requirements of Section 401(a) of
the Code, nonqualified deferred compensation plans, excess benefit
plans and supplemental executive retirement plans.
"EMPLOYEE PENSION PLAN DEPOSIT LIABILITY" shall mean a Deposit
Liability in an account owned by an Employee Pension Plan.
"ENVIRONMENTAL HAZARD" shall mean the presence of any
Hazardous Materials in violation of any Environmental Laws.
"ENVIRONMENTAL LAWS" shall mean all Federal, state or local
laws, rules, regulations, codes, ordinances, or by-laws, and any
judicial or administrative interpretations thereof, including orders,
decrees, judgments, rulings, directives or notices
7
of violation, that create duties, obligations or liabilities with
respect to (a) human health or (b) environmental pollution, impairment
or disruption, including, without limitation, laws governing the
existence, use, storage, treatment, discharge, release, containment,
transportation, generation, manufacture, refinement, handling,
production, disposal, or management of any Hazardous Materials, or
otherwise regulating or providing for the protection of the
environment, and further including, without limitation, the
Comprehensive Environmental Response, Compensation and Liability Act
(42 U.S.C. Section 9601 ET SEQ.), the Hazardous Materials
Transportation Act (49 U.S.C. Section 1801 ET SEQ.), the Public Health
Service Act (42 U.S.C. Section 300 ET SEQ.), the Pollution Prevention
Act (42 U.S.C. Section 13101 ET SEQ.), the Federal Insecticide,
Fungicide and Rodenticide Act (7 U.S.C. Section 136 ET SEQ.), the
Resource Conservation and Recovery Act (42 U.S.C. Section 6901 ET
SEQ.), the Safe Drinking Water Act (21 U.S.C. Section 349, 42 U.S.C.
Sections 201, 300f), the Toxic Substances Control Act (15 U.S.C.
Section 2601 et SEQ.), the Clean Water Act (33 U.S.C. Section 1251 ET
SEQ.), the Clean Air Act (42 U.S.C. Section 7401 ET SEQ. ), and similar
state and local statutes, and all regulations adopted pursuant thereto.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended (11 U.S.C. Section 1101 ET SEQ.)
"ESTIMATED PAYMENT AMOUNT" shall have the meaning specified in
Section 3.2.
"ESTIMATED PURCHASE PRICE" shall mean the estimate of the
Purchase Price set forth on the Draft Closing Statement.
"EXCLUDED DEPOSITS" shall mean the Excluded Deposits (as
defined in the Fleet/Sovereign P&A Agreement) attributable to the Cape
Cod Business.
"EXCLUDED FIXED ASSETS" shall mean the Excluded Fixed Assets
(as defined in the Fleet/Sovereign P&A Agreement) attributable to the
Cape Cod Business.
"EXCLUDED ▇▇▇/▇▇▇▇▇/EMPLOYEE PENSION PLAN DEPOSITS" shall have
the meaning specified in Section 12.12(a).
"FACILITIES" shall mean the Branches and the ATM locations.
8
"FDIA" shall mean the Federal Deposit Insurance Act, as
amended (12 U.S.C. Sections 1811 ET SEQ.).
"FDIC" shall mean the Federal Deposit Insurance Corporation.
"FEDERAL FUNDS RATE" shall mean, for the period involved, the
average of the interest rates for each day of the period set forth in
H.15(519) opposite the caption "Federal Funds (Effective)." H.15(519)
means the weekly statistical release designated as such, or any
successor publication, published by the Board.
"FINAL" shall mean, as applied to any governmental order or
action, that such order or action has not been stayed, vacated or
otherwise rendered ineffective and either (a) the time period for
taking an appeal therefrom shall have passed without an appeal
therefrom having been taken, or (b) if any such appeal shall have been
dismissed or resolved, all applicable periods for further appeal of
such order or action shall have passed.
"FINAL APPROVAL DATE" shall mean, with respect to the
transactions contemplated hereby, the date upon which the last of the
following has occurred: (a) all Regulatory Approvals have been
obtained; (b) all applicable regulatory notices which are required to
be published or given prior to consummation of the transactions
contemplated hereby have been published or given; (c) the filing of all
applicable regulatory reports; and (d) the expiration of all applicable
regulatory comment and waiting periods.
"FINAL LOAN SCHEDULE" shall have the meaning specified in
Section 3.3(a).
"FIRPTA AFFIDAVITS" shall mean affidavits pursuant to Section
1445 of the Code certifying to the non-foreign entity status of
Sovereign.
"FIXED ASSETS" shall mean the Fixed Assets (as defined in the
Fleet/Sovereign P&A Agreement) attributable to the Cape Cod Business.
"FLEET" shall mean Fleet Boston Financial Corporation.
9
"FLEET BOSTON DIVESTITURE SEVERANCE PLAN" shall mean that
certain severance plan of Fleet and its Affiliates to be dated as of
the Closing Date and containing the terms set forth on EXHIBIT A to the
Fleet/Sovereign P&A Agreement.
"FLEET/ROCKLAND P&A AGREEMENT" shall have the meaning
specified in the Background section above.
"FLEET/SOVEREIGN P&A AGREEMENT" shall have the meaning
specified in the Background section above.
"FNB" shall have the meaning specified in the preamble.
"FNB REGULATORY APPROVALS" shall mean those regulatory
approvals applicable to FNB and Fleet identified in Schedule 6.8
hereto.
"GAAP" shall have the meaning specified in Section 1.2.
"HAZARDOUS MATERIALS" means (a) any "hazardous material,"
"hazardous substance," "hazardous waste," "oil," "regulated substance,"
"toxic substance" or words of similar import as defined under any of
the Environmental Laws, (b) asbestos in any form, (c) urea formaldehyde
foam insulation, (d) polychlorinated biphenyls, (e) radon gas, (f)
flammable explosives, (g) radioactive materials, (h) any chemical,
contaminant, solvent, material, pollutant or substance that may be
dangerous or detrimental to any of the Facilities, the environment or
the health and safety of employees or other occupants of any of the
Facilities, and (i) any substance, the generation, storage,
transportation, utilization, disposal, management, release or location
of which, on, under or from any of the Facilities is prohibited or
otherwise regulated pursuant to any of the Environmental Laws.
"INDEMNIFIED PARTY" shall have the meaning specified in
Section 15.3.
"INDEMNITOR" shall have the meaning specified in Section 15.3.
"INDEPENDENT" shall have the meaning specified in the
preamble.
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"▇▇▇" shall mean an individual retirement account as specified
in Section 408 and 408A of the Code.
"▇▇▇ DEPOSIT LIABILITY" shall mean a Deposit Liability in a
deposit account which is an ▇▇▇.
"IRS" shall mean the Internal Revenue Service of the United
States.
"ISDA AGREEMENTS" shall mean the ISDA Agreements (as defined
in the Fleet/Sovereign P&A Agreement) attributable to the Cape Cod
Business.
"ISDA TRANSACTIONS" shall mean the ISDA Transactions (as
defined in the Fleet/Sovereign P&A Agreement) attributable to the Cape
Cod Business.
"ISP98" shall mean the International Standby Practices
(ISP98), ICC Publication No. 590.
"ITEMS" shall mean (a) transfers of funds by wire or through
the Automated Clearing House, checks, drafts, negotiable orders of
withdrawal and items of a like kind which are drawn on or deposited and
credited to the Deposit Liabilities, and (b) payments, advances,
disbursements, fees, reimbursements and items of a like kind which are
debited or credited to the Loans.
"▇▇▇▇▇ PLAN" shall mean an Employee Pension Plan covering
self-employed individuals.
"▇▇▇▇▇ PLAN DEPOSIT LIABILITY" shall mean a Deposit Liability
in a deposit account which is owned by a ▇▇▇▇▇ Plan.
"LETTER OF CREDIT CUSTOMER" shall mean an obligor under a Loan
for whose account a Letter of Credit was issued.
"LETTERS OF CREDIT" shall mean the Letters of Credit (as
defined in the Fleet/Sovereign P&A Agreement) attributable to the Cape
Cod Business.
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"LETTER OF CREDIT COLLATERAL" shall mean Letter of Credit
Collateral (as defined in the Fleet/Sovereign P&A Agreement)
attributable to the Cape Cod Business.
"LETTER OF CREDIT DISBURSEMENT" shall mean an amount equal to
the sum of (a) the amount drawn under any Letter of Credit in
connection with a Request, plus (b) all reasonable and customary
out-of-pocket charges and expenses which Sovereign (or FNB) may pay or
incur relative to such Request which are chargeable to the Customer
under the related Reimbursement Agreement.
"LIEN" shall mean any lien, easement, restrictions, pledge,
charge, encumbrance, security interest, mortgage, deed of trust, lease,
option or other adverse claim of any kind or description.
"LOAN VALUE" shall mean, as of any date, the unpaid principal
balance of the Loans, plus Accrued Interest thereon, as set forth in
FNB's general ledger immediately prior to the acquisition of the Cape
Cod Business by Sovereign and, for purposes of Section 3.3, on the
Final Loan Schedule, less accrued servicing fees under arrangements
with third parties to service such Loans.
"LOANS" shall mean, collectively, the Consumer Bank Loans, the
SBA Loans, the Small Business Bank Loans and the Developmental Real
Estate Loans.
"MATERIAL ADVERSE EFFECT" shall mean any circumstance, change
in or effect on the Purchased Assets or the Assumed Liabilities that is
materially adverse to the business, operation, results of operations or
the financial condition of the Cape Cod Business, taken as a whole;
provided, however, that "Material Adverse Effect" shall not include any
circumstance, change in or effect on the Cape Cod Business directly or
indirectly arising out of or attributable to (a) changes in general
economic, legal, regulatory or political conditions, (b) changes in
prevailing interest rates, (c) changes in GAAP, (d) any actions taken
or omitted to be taken pursuant to this Agreement, or (e) the
announcement by Purchaser, Sovereign, FNB or any of their Affiliates of
the transactions contemplated by this Agreement, any similar other
agreement entered into by Fleet or by any Fleet
12
Affiliate in connection with the Merger and relating to the divestiture
by FNB or any FNB Affiliate of certain of their respective assets and
liabilities or the Merger Agreement.
"MERGER" shall mean the merger of Fleet and BankBoston
pursuant to the terms of the Merger Agreement.
"MERGER AGREEMENT" shall mean that certain Agreement and Plan
of Merger dated as of March 14, 1999 by and between Fleet and
BankBoston, as the same may be amended or modified from time to time.
"MIDDLE MARKET BORROWER" shall mean each borrower under a
Middle Market Loan who is identified as such in a written document
delivered by Sovereign to Purchaser at the Closing.
"MIDDLE MARKET EMPLOYEES" shall mean the Middle Market
Employees (as defined in the Fleet/Sovereign P&A Agreement).
"MIDDLE MARKET LOANS" shall mean the Middle Market Loans (as
defined in the Fleet/Sovereign P&A Agreement).
"NEGATIVE DEPOSITS" shall mean overdrafts in Deposit Liability
accounts which are not covered by Advance Lines, plus any and all
Accrued Interest thereon, all as set forth in FNB's general ledger
immediately prior to the acquisition of the Cape Cod Business by
Sovereign.
"NONPERFORMING" shall mean as of the close of business on the
Closing Date any Loan with respect to which any principal or interest
shall be due and unpaid by the borrower thereunder for more than ninety
(90) days prior to the Closing Date.
"OFFERING MEMORANDUM" shall mean the Offering Memorandum
provided by FNB to Purchaser.
"OUTSTANDING CREDIT EXPOSURE" shall mean, at any time, the
aggregate maximum amount available to be drawn or advanced under each
Outstanding Credit Obligation, the determination of such maximum amount
to assume (a) compliance with all conditions for
13
drawing or advance under the specific Letter of Credit, and (b) no
reduction (i) for any amount drawn under any Outstanding Credit
Obligation unless such amount is not to be reinstated under the terms
of the specific Letter of Credit, or (ii) for any amount not available
to be drawn or advanced under the terms of the specific Letter of
Credit.
"OUTSTANDING CREDIT OBLIGATIONS" shall mean at any time, those
Letters of Credit (a) which have not been replaced or terminated, and
(b) as to which FNB has not been released from liability.
"PERSON" shall mean any individual, partnership, joint
venture, corporation, trust, limited liability company, unincorporated
organization, government or other entity.
"PURCHASE PRICE" shall have the meaning specified in Section
3.1.
"PURCHASED ASSETS" shall have the meaning specified in Section
2.1(a).
"PURCHASER" shall have the meaning specified in the preamble.
"PURCHASER INDEMNIFIED PARTY" shall have the meaning specified
in Section 15.1
"PURCHASER REGULATORY APPROVALS" shall have the meaning
specified in Section 7.5(a).
"PURCHASER'S ACCOUNT" shall have the meaning specified in
Section 3.2.
"PURCHASER'S LETTER OF CREDIT" shall mean a standby letter of
credit issued by Purchaser in favor of Sovereign (or FNB), in
substantially the form of EXHIBIT F to the Fleet/Sovereign P&A
Agreement, in a face amount equal to the sum of the aggregate maximum
amount available to be drawn or advanced under each Letter of Credit as
of the Closing Date, the determination of such maximum amount to assume
(a) compliance with all conditions for drawing or advance under the
specific Letter of Credit, and (b) no reduction (i) for any amount
drawn or advanced under any Letter of Credit unless such amount is not
to be reinstated under the terms of the specific Letter of Credit, or
(ii) for any amount not available to be drawn or advanced under the
terms of the specific Letter of Credit.
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"QUITCLAIM DEEDS" shall have the meaning specified in Section
5.2(a).
"REAL PROPERTY" shall mean each parcel of real property owned
by FNB immediately prior to the acquisition of the Cape Cod Business by
Sovereign on which a Facility is located, and all improvements thereon
and other easements and other rights appurtenant thereto.
"REAL PROPERTY PURCHASE PRICE" shall mean, with respect to any
parcel or parcels of Real Property, the purchase price specified on
SCHEDULE 1.1(II) to the Fleet/Sovereign P&A Agreement.
"REGULATORY APPROVALS" shall mean the Sovereign Regulatory
Approvals, the Purchaser Regulatory Approvals and the FNB Regulatory
Approvals.
"REIMBURSEMENT AGREEMENT" shall mean all documents and
agreements evidencing, securing or insuring the obligation of a Letter
of Credit Customer to repay, or the rights of Sovereign (or FNB) to
recover, sums paid under a Letter of Credit.
"RELEASE" shall mean releasing, spilling, leaking, pumping,
pouring, emitting, emptying, discharging, ejecting, escaping, leaching,
disposing, seeping, infiltrating, draining or dumping.
"REQUEST" shall have the meaning specified in Section
12.11(c).
"SAFE DEPOSIT AGREEMENTS" shall mean the agreements between
Sovereign (or FNB) and a Customer or Customers relating to safe deposit
boxes located in the Branches as of the close of business on the
Closing Date.
"SBA" shall mean the United States Small Business
Administration.
"SBA CONSENTS" shall mean all consents necessary to transfer
to Purchaser the SBA Loans.
"SBA LOANS" shall mean the SBA Loans (as defined in the
Fleet/Sovereign P&A Agreement) attributable to the Cape Cod Business.
15
"SMALL BUSINESS BANK ASSETS" shall mean the Small Business
Bank Loans and the SBA Loans.
"SMALL BUSINESS BANK BUSINESS" shall mean the Small Business
Bank Assets and the Small Business Bank Liabilities.
"SMALL BUSINESS BANK DEPOSIT LIABILITIES" shall mean the Small
Business Bank Deposit Liabilities (as defined in the Fleet/Sovereign
P&A Agreement) attributable to the Cape Cod Business.
"SMALL BUSINESS BANK LIABILITIES" shall mean any and all
liabilities and obligations relating to or arising out of the Small
Business Bank Assets, to the extent that such liabilities and
obligations arise and accrue after the close of business on the Closing
Date, but including any Unfunded Advances under the Loans included
therein.
"SMALL BUSINESS BANK LOANS" shall mean the Small Business Bank
Loans (as defined in the Fleet/Sovereign P&A Agreement) attributable to
the Cape Cod Business.
"SOVEREIGN" shall have the meaning specified in the preamble.
"SOVEREIGN REGULATORY APPROVALS" shall have the meaning
specified in Section 6.11.
"SWAP MARKET VALUE OF THE ISDA TRANSACTIONS" shall be equal to
the aggregate of bid-offer spread for each ISDA Transaction, calculated
by a nationally recognized securities dealer mutually acceptable to
Fleet and Sovereign (or Independent) and calculated as if an Early
Termination Event (as defined in the standard form of the ISDA
Agreement) has occurred on the Closing Date (as such term is defined in
the standard ISDA Agreement); provided, however, that in the event that
Fleet and Independent are unable to mutually agree upon such securities
dealer, then Fleet shall designate a nationally recognized securities
dealer, Independent shall designate a nationally recognized securities
dealer and such securities dealers shall designate a third nationally
recognized securities dealer to calculate such aggregate bid-offer
spread.
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"SWAP PORTFOLIO ADJUSTMENT" shall be an amount equal to the
Swap Market Value of the ISDA Transactions.
"TRANSFER DATE" shall mean the first Business Day following
the Closing Date.
"TRANSFERRED EMPLOYEES" shall mean all Consumer Bank Employees
and the Consumer Bank Related Employees who accept offers of employment
from Purchaser as contemplated by Section 9.6(a).
"UCC" shall mean the Uniform Commercial Code in effect in the
Commonwealth of Massachusetts.
"UCC ARTICLE 5" shall mean Article 5 of the UCC.
"UCP 500" shall mean the Uniform Customs and Practice for
Documentary Credits, 1993 Revision, ICC Publication No. 500.
"UNFUNDED ADVANCE" shall mean an advance requested under a
Loan on or prior to the Closing Date pursuant to the terms and
provisions of such Loan which Sovereign (or FNB) is not obligated to
fund until following the Closing Date.
"WARN ACT" shall mean the Worker Adjustment and Retraining
Notification Act, as amended (29 U.S.C. Section 2101, ET SEQ.) and
similar state and local laws, regulations and other issuances,
including, without limitation, the Massachusetts law on plant closings
under General Laws of the Commonwealth of Massachusetts, Chapter 151A.
"YEARS OF SERVICE" shall have the meaning specified in Section
9.6(b) hereof.
Section 1.2. CONSTRUCTION OF CERTAIN TERMS. The phrase "Sovereign (or
FNB)" when used in this Agreement is intended to mean Sovereign or FNB, as
appropriate, depending upon the mechanics which are employed to effect the
transfer of the Purchased Assets and Assumed Liabilities; such meaning may be
affected by the extent to which FNB will agree to effect any such transfer
directly to Purchaser. This interpretation shall also apply to all similar
phrases of the variety "X (or Y)."
17
Section 1.3. ACCOUNTING TERMS. All accounting terms not otherwise
defined herein shall have the respective meanings assigned to them in accordance
with "generally accepted accounting principles" consistently applied as are in
effect from time to time in the United States of America ("GAAP").
ARTICLE II
PURCHASE AND SALE OF PURCHASED ASSETS AND
ASSIGNMENT AND ASSUMPTION OF ASSUMED LIABILITIES
Section 2.1. PURCHASE AND SALE OF ASSETS; NO OTHER ASSETS PURCHASED
(a) Subject to the terms and conditions hereof, including without
limitation the assumption by Purchaser of the Assumed Liabilities, as of the
close of business on the Closing Date, Sovereign shall sell, transfer and
deliver to Purchaser, and Purchaser shall purchase and accept from Sovereign,
all of the right, title and interest transferred by FNB to Sovereign in, to and
under the following assets of FNB (collectively, the "Purchased Assets"):
(i) The Consumer Bank Assets;
(ii) The Small Business Bank Assets;
(iii) All of FNB's rights with respect to the contracts and
relationships giving rise to the Deposit Liabilities;
(iv) The Advance Lines and the Negative Deposits, each as
of the Closing Date;
(v) All insurance premiums paid by FNB to the FDIC which
are allocated to insurance coverage for the Deposit Liabilities
following the Closing Date, to the extent a proration or adjustment is
made with respect thereto pursuant to Section 3.5;
(vi) All of FNB's right, title and interest in and to all
books and records relating to the Purchased Assets described in the
other subsections of this Section 2.1(a) and the Assumed Liabilities,
as such books and records may exist and as are held by FNB at the
Branches;
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(vii) The ISDA Agreements; and
(viii) A 100% participation interest in the Letters of
Credit as contemplated by Section 12.11.
(b) Purchaser understands and agrees that it is purchasing only
the Purchased Assets (and assuming only the Assumed Liabilities) specified in
this Agreement and (i) except as may be expressly provided for in this
Agreement, Purchaser has no interest in any other business relationship which
FNB or any of its Affiliates has or may have with any Customer, or (ii) any
other customer of FNB or its Affiliates. Purchaser further understands and
agrees that FNB and its Affiliates are retaining any and all rights and claims
which any of them may have, including but not limited to indemnification or
reimbursement rights, with respect to the Purchased Assets and the Assumed
Liabilities, to the extent that such rights or claims relate to the conduct of
the business of the Cape Cod Business prior to the Closing. Without limitation
of the foregoing, Purchaser acknowledges and agrees that it will not acquire any
Middle Market Loans pursuant to the terms of this Agreement.
Section 2.2. ASSUMED LIABILITIES
(a) Subject to the terms and conditions of this Agreement,
including without limitation the transfer of the Purchased Assets to Purchaser,
on the Closing Date, Purchaser shall assume, and thereafter honor and fully and
timely, pay, perform and discharge when due, the following liabilities of FNB
(which Sovereign has agreed to assume and perform) and shall perform all duties,
responsibilities, and obligations of FNB (which Sovereign has agreed to assume
and perform) under the following, to the extent that such liabilities, duties,
responsibilities and obligations arise or accrue after close of business on the
Closing Date (other than those described in Section 2.2(a)(viii)(A), which shall
not be so limited) (collectively, the "Assumed Liabilities"):
(i) The Consumer Bank Liabilities;
(ii) The Small Business Bank Liabilities;
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(iii) All of FNB's duties and responsibilities relating to
the Deposit Liabilities, including without limitation, with respect to:
(x) the abandoned property laws of any state; (y) any legal process
which is served on FNB on or before the Closing Date with respect to
claims against or related to the Deposit Liabilities; or (z) any other
applicable law;
(iv) The Assumed Severance Obligations;
(v) The Advance Lines and the Negative Deposits, each as
of the Closing Date;
(vi) Any of FNB's accrued and unpaid expenses related to
the operations of the Cape Cod Business to the extent a proration or
adjustment is made with respect thereto pursuant to Section 3.5;
(vii) The ISDA Agreements;
(viii) Any and all liabilities or obligations of FNB or
Fleet or any of their Affiliates under Environmental Laws relating to,
resulting from or arising out of:
(A) Use or operation of the Real Property or the
Facilities prior to, on or after the Closing Date, or
(B) Use or operation of the Real Property or
Facilities by the Purchaser on or after the Closing
Date,
in either case including without limitation (1) the
presence of any Hazardous Materials or a release
or the threat of a release on, at or from the Real
Property or Facilities, (2) investigative,
containment, removal, clean up and other remedial
actions with respect to a release or the threat of
release on, at or from the Real Property or
Facilities, or (3) human exposure to any Hazardous
Materials or nuisances of whatever kind to the extent
the same arise from the
20
condition of the Real Property or Facilities or the
ownership, use, operation, sale, transfer or
conveyance thereof;
(ix) Any and all other liabilities and obligations
relating to or arising out of the Purchased Assets or Assumed
Liabilities to be performed after the Closing or arising out of the
operation of the Facilities or the Real Property from and after the
Closing Date, but only to the extent that such liabilities or
obligations arise or accrue after the close of business on the Closing
Date and are caused by actions or omissions taken or occurring after
the Closing;
(x) Unfunded Advances under the Loans; and
(xi) The participation obligations as contemplated in
Section 12.11 relating to the Letters of Credit.
(b) Except for the Assumed Liabilities and except as otherwise set
forth in this Agreement, Purchaser shall not assume or be bound by any duties,
responsibilities, obligations or liabilities of any kind or nature, whether
known or unknown, whether asserted or unasserted, whether accrued or unaccrued,
whether contingent or otherwise.
ARTICLE III
PURCHASE PRICE; PAYMENT;
SETTLEMENT; TAX ALLOCATION
Section 3.1. PURCHASE PRICE. The purchase price for the Purchased
Assets shall be an amount computed as follows (the "Purchase Price"):
(a) An amount equal to twelve percent (12%) of the greater of:
(i) the Deposit Liabilities assumed by Purchaser at the Closing, and (ii) the
Average Daily Balance (in either case, the "Deposit Premium"); PLUS
(b) The aggregate of the Real Property Purchase Prices for all
of the Real Property; (other than the Real Property leased pursuant to Section
11.1); PLUS
21
(c) The aggregate net book value of the Fixed Assets as reflected
on the general ledger of FNB immediately prior to the acquisition of the Cape
Cod Business by Sovereign; PLUS
(d) The Loan Value of the Loans as of the close of business on
the Closing Date; PLUS
(e) The aggregate unpaid principal balance of the Advance Lines
and the Negative Deposits, plus Accrued Interest thereon, each as set forth on
the general ledger of FNB immediately prior to the acquisition of the Cape Cod
Business by Sovereign, PLUS
(f) The aggregate net book value of the owned ATMs, as set forth
on the general ledger of FNB immediately prior to the acquisition of the Cape
Cod Business by Sovereign; PLUS
(g) The aggregate amount of Cash as of the close of business on
the Closing Date; PLUS
(h) (i) The Swap Portfolio Adjustment, if such adjustment is a
positive number or (ii) if the Swap Portfolio Adjustment is a negative number,
MINUS the absolute value of the Swap Portfolio Adjustment.
Section 3.2. PAYMENT AT CLOSING. On or prior to the second Business Day
immediately preceding the Closing Date, Sovereign shall deliver to Purchaser the
Draft Closing Statement, such Draft Closing Statement to be based upon the draft
closing statement to be delivered by FNB to Sovereign pursuant to the
Fleet/Sovereign P&A Agreement. On the Closing Date, Sovereign shall pay to
Purchaser by wire transfer of immediately available funds to such account as
Purchaser shall advise Sovereign no later than three (3) Business Days prior to
the Closing Date ("Purchaser's Account") the amount by which the Deposit
Liabilities (including Accrued Interest) to be assumed by Purchaser (calculated
as of the close of business on the fifth (5th) Business Day preceding the
Closing Date) exceeds the Estimated Purchase Price (the "Estimated Payment
Amount").
22
Section 3.3. ADJUSTMENT OF ESTIMATED PAYMENT AMOUNT.
(a) On or before 12:00 noon on the thirtieth (30th) day following
the Closing Date, Sovereign shall deliver to Purchaser a statement (which
statement to be based upon the corresponding statement to be delivered by FNB to
Sovereign pursuant to the Fleet/Sovereign P&A Agreement) setting forth (i) the
Purchase Price (including all adjustments and prorations thereto) and each
component thereof (including with respect to the Loans a Schedule as of the
close of business on the Closing Date of the Loans (the "Final Loan Schedule"))
and (ii) the amount of the Deposit Liabilities assumed by Purchaser at the
Closing. Sovereign shall use its commercially reasonable efforts to cause FNB to
agree to make available to Purchaser and/or its representatives such work
papers, schedules and other supporting data as may be reasonably requested by
Purchaser to enable Purchaser to verify such determinations. Such statement
shall also set forth the amount (the "Adjusted Payment Amount") by which the
amount of the Deposit Liabilities assumed by Purchaser at the Closing exceeded
the Purchase Price (including all adjustments and prorations thereto) calculated
as of the close of business on the Closing Date or such other date as required
by this Agreement.
(b) On or before 12:00 noon on the sixtieth (60th) day following
the Closing Date Sovereign shall pay to Purchaser by wire transfer of
immediately available funds to Purchaser's Account, an amount equal to the
excess of the Adjusted Payment Amount over the Estimated Payment Amount, plus
interest calculated using the Federal Funds Rate on such excess amount from the
Closing Date to but excluding the payment date, or, if the Estimated Payment
Amount exceeds the Adjusted Payment Amount, Purchaser shall pay to Sovereign by
wire transfer of immediately available funds to such account as Sovereign shall
advise Purchaser, an amount equal to such excess, plus interest thereon
calculated using the Federal Funds Rate from the Closing Date to but excluding
the payment date. Any payment or refund pursuant to this Section 3.3(b) shall be
treated, for all purposes, as an adjustment to the Purchase Price.
Section 3.4. ALLOCATION OF PURCHASE PRICE.
(a) Purchaser and Sovereign agree that, upon final determination
of the Purchase Price, the Purchase Price shall be allocated to the Purchased
Assets in a manner
23
consistent with Schedule 3.4(a) of the Fleet/Sovereign P&A Agreement and
Schedule 3.4(a) of the Fleet/Rockland P&A Agreement (the "Allocation
Schedules").
(b) Purchaser and Sovereign shall report the transactions
contemplated by this Agreement (including income tax reporting requirements
imposed pursuant to Section 1060 of the Code) in accordance with the Allocation
Schedules. In the event any party hereto receives notice of a tax audit with
respect to the allocation of the Purchase Price specified herein, such party
shall immediately notify the other party in writing as to the date and subject
of such audit.
(c) If any federal, state or local tax return, report or
filing by Purchaser or by Sovereign relating to the transactions contemplated
hereby and filed on the basis of the allocation set forth on the Allocation
Schedules is challenged by the taxing authority with which such return, report
or filing was filed, the filing party shall assert and maintain in good faith
the validity and correctness of such allocation during the audit thereof until
the issuance by the taxing authority of a "30-Day Letter," or a determination of
liability equivalent thereto, to such party, whereupon such party shall, in its
sole discretion, have the right to pay, compromise, settle, dispute or otherwise
deal with its alleged tax liability. If such a tax return, report or filing is
challenged as herein described, the party filing such return, report or filing
shall timely keep the other party apprised of its decisions and the current
status and progress of all administrative and judicial proceedings, if any, that
are undertaken at the election of the filing party.
(d) If either Purchaser or Sovereign (including permitted
successors and assigns thereof) defaults under this Section 3.4, it shall pay as
damages to the other, so long as such other party is not in default under this
Section 3.4, an amount which, after reduction for all income or gain taxes,
including without limitation interest and penalties, which would be incurred
(calculated at the highest marginal rate applicable in the relevant
jurisdictions) as a result of receiving said amount, is equal to the result (but
not less than zero) of subtracting the amount in (ii) below from the amount in
(i) below:
(i) The total amount of income or gains taxes (including
interest and penalties calculated at the highest marginal rate
applicable in the relevant jurisdictions) to
24
all jurisdictions imposing such taxes upon the non-defaulting party
with respect to the transactions contemplated hereby; and
(ii) The total amount of income or gains taxes which would
have been incurred (including interest and penalties calculated at the
highest marginal rate applicable in the relevant jurisdictions) to all
jurisdictions imposing such taxes upon the non-defaulting party with
respect to the transactions contemplated hereby, if such taxing
jurisdictions had accepted the allocations specified in the Allocation
Schedules.
Section 3.5. PRORATION; OTHER CLOSING DATE ADJUSTMENTS.
(a) Except as otherwise specifically provided in this
Agreement, it is the intention of the parties that Sovereign will use its
commercially reasonable efforts to cause FNB to agree to operate the Facilities
for its own account and own the Loans and other Purchased Assets (and all rights
associated therewith) until the close of business on the Closing Date, and that
Purchaser shall operate the Facilities, own the Loans and other Purchased Assets
and assume the Deposit Liabilities and other Assumed Liabilities (and all rights
associated therewith) for its own account from and after the close of business
on the Closing Date. Thus, except as otherwise specifically provided in this
Agreement, items of income and expense shall be prorated as of the close of
business on the Closing Date, and shall be settled between Sovereign and
Purchaser as of the Closing Date, whether or not such adjustment would normally
be made as of such time. Items of proration will be handled as an adjustment to
the Purchase Price and not as adjustments to the Estimated Payment Amount,
unless otherwise agreed by the parties hereto.
(b) For purposes of this Agreement, items of proration and
other adjustments shall include, without limitation: (i) amounts prepaid and
unused for safe deposit rentals; (ii) sales, real estate and use taxes (other
than such sales, real estate and use taxes that arise as a result of the
transactions contemplated by this Agreement which shall be paid by Purchaser or
by Sovereign in accordance with Section 4.1 hereof); (iii) insurance premiums
paid or payable to the FDIC attributable to insurance coverage for the Deposit
Liabilities for the period from and after the Closing Date; (iv) fees for
customary annual or periodic licenses or permits; (v) water, sewer, fuel and
utility charges; and (vi) other prepaid items of income and expense, in each
case as of
25
the close of business on the Closing Date; provided that items of proration and
other adjustments shall not include commitment and other fees paid in advance by
Customers with respect to Loans, Letters of Credit and ISDA Agreements.
Notwithstanding the foregoing, if accurate arrangements cannot be made as of the
Closing Date for any of the foregoing items of proration, the parties shall
apportion the charges for the foregoing items on the basis of the ▇▇▇▇ therefor
for the most recent billing period prior to the Closing Date.
ARTICLE IV
TAXES
Section 4.1. SALES, TRANSFER AND USE TAXES. Except as otherwise
provided in this Agreement, any sales, transfer, use or similar taxes, including
but not limited to all transfer taxes required in connection with the transfer
of the Real Property to Purchaser, which are payable or arise as a result of
this Agreement or the consummation of the transactions contemplated hereby,
shall be paid by Purchaser on the Closing Date.
Section 4.2. INFORMATION REPORTS. Purchaser shall provide (and
Sovereign shall provide or use its commercially reasonable efforts to cause FNB
to agree to provide) to the IRS on a timely basis and otherwise as required by
law Forms 1099INT, 1099R, W-2P, 5498 and any other required forms and reports
with respect to each Deposit Liability concerning interest paid on, or
contributions to and distributions from, the Deposit Liability accounts, as
appropriate, for the periods during which Purchaser and FNB, respectively,
administered such accounts, including without limitation, any information
required by the IRS pursuant to any request for back-up withholding and taxpayer
identification number certification records and documents. Sovereign shall use
its commercially reasonable efforts to cause FNB to agree to make such reports
for interest paid or credited to Customers through and including the Closing
Date and Purchaser shall make such reports after the Closing Date.
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ARTICLE V
CLOSING
Section 5.1. CLOSING DATE.
(a) Upon the terms and subject to the conditions of this
Agreement, the purchase and sale of the Purchased Assets and the assumption of
the Assumed Liabilities contemplated by this Agreement shall take place at a
closing (the "Closing") to be held at the offices of ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, LLP, ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ contemporaneously with
the closing under the Fleet/Rockland P&A Agreement, which is presently scheduled
to occur on August 4, 2000.
(b) Purchaser agrees (and Sovereign shall use its commercially
reasonable efforts to cause FNB to agree) as follows: It is anticipated that the
Transfer Date shall coincide with the conversion of FNB's account information as
to the Deposit Liabilities and the Loans onto Purchaser's data processing
system. FNB and Purchaser shall each use its commercially reasonable efforts to
take such actions, and FNB and Purchaser shall cooperate with each other, to
ensure that such conversion is completed on the Transfer Date. However,
notwithstanding the foregoing, in the event of an extraordinary data processing
occurrence on or prior to the Transfer Date which prevents such conversion, then
at either party's option (i) the Closing may be postponed, or (ii) the Closing
shall take place (provided that FNB and its Affiliates shall have agreed to
assist Purchaser in servicing the Deposit Liabilities and the Loans upon such
terms and for such fees as are customarily charged by unaffiliated third party
processors for such arrangements, including but not limited to, any
out-of-pocket costs incurred by FNB or its Affiliates as a result of FNB or its
Affiliates providing such service. In the event of a Closing pursuant to clause
(ii) above, Purchaser shall negotiate (and Sovereign shall use its commercially
reasonable efforts to cause FNB to agree to negotiate) in good faith one or more
interim servicing agreements for the Deposit Liabilities and Loans.
27
Section 5.2. SOVEREIGN'S DELIVERIES. On or before the Closing Date,
Sovereign shall deliver to Purchaser, duly executed and acknowledged where
required:
(a) Deeds for the Real Property in substantially the form of
EXHIBIT L to the Fleet/Sovereign P&A Agreement, pursuant to which the Real
Property shall be transferred to Purchaser "AS IS," "WHERE IS" and with all
faults but with the benefit of any statutory quitclaim covenants (the "Quitclaim
Deeds");
(b) A ▇▇▇▇ of sale for the Purchased Assets in substantially
the form of EXHIBIT I to the Fleet/Sovereign P&A Agreement, pursuant to which
the Purchased Assets (other than the Real Property) shall be transferred to
Purchaser "AS IS," "WHERE IS" and with all faults;
(c) An assignment and assumption agreement with respect to the
Assumed Liabilities in substantially the form of EXHIBIT J to the
Fleet/Sovereign P&A Agreement (the "Assignment and Assumption Agreement");
(d) True and complete copies of all instruments, certificates,
opinions and other documents delivered by FNB and/or Fleet to Sovereign at the
closing at which the Cape Cod Business is transferred to Sovereign, but only to
the extent that such documents relate to or affect the Cape Cod Business;
(e) An Officer's Certificate confirming that no conditions
precedent to Sovereign's obligations to consummate the transactions contemplated
by the Fleet/Sovereign P&A Agreement (to the extent that such conditions relate
to or affect the Cape Cod Business) were waived and that all such conditions
were satisfied in all material respects (as such conditions relate to the Cape
Cod Business) without amendment;
(f) An Officer's Certificate in substantially the form of
EXHIBIT N to the Fleet/Sovereign P&A Agreement;
(g) An opinion of counsel of Sovereign and SBI (which opinion
may be from in-house counsel), dated the Closing Date, in form and substance
reasonably satisfactory to Purchaser to the effect that: (i) Sovereign is duly
organized, validly existing and in good standing
28
under the laws of the jurisdiction of its formation or incorporation, with full
corporate power and authority to enter into and perform its obligations under
this Agreement; and (ii) this Agreement has been duly and validly authorized,
executed and delivered by Sovereign and (assuming due authorization, execution
and delivery by Purchaser and Independent) is a legal, valid and binding
obligation of Sovereign, enforceable against Sovereign in accordance with its
terms, except as enforcement may be limited by receivership, conservatorship,
and supervisory powers of bank regulatory agencies generally as well as
bankruptcy, insolvency, reorganization, moratorium or other laws of general
applicability relating to or affecting creditor's rights, or the limiting effect
of rules of law governing specific performance, equitable relief and other
equitable remedies or the waiver of rights or remedies;
(h) The Draft Closing Statement;
(i) The resignation of Sovereign (or FNB) as trustee or
custodian, as applicable, with respect to each ▇▇▇, ▇▇▇▇▇ Plan or Employee
Pension Plan deposit account included in the Deposit Liabilities and the
designation of Purchaser as successor trustee or custodian with respect thereto;
(j) A limited power of attorney granting Purchaser the
authority to execute certain documents on behalf of Sovereign (or FNB) in
substantially the form of EXHIBIT M to the Fleet/Sovereign P&A Agreement;
(k) The FIRPTA Affidavits;
(l) The Collateral Agency Agreement and the Collateral
Assignment Instruments;
(m) Physical possession of all Purchased Assets as are capable
of physical delivery;
(n) Possession of all loan files held in the Facilities and
collateral in the custody of FNB relating to the Loans (to the extent that such
files and collateral are delivered by FNB to Sovereign); and
29
(o) Such other documents as are necessary to effect
the transactions contemplated hereby as Purchaser shall reasonably request.
Delivery of the Quitclaim Deeds and ▇▇▇▇ of sale may be made
by delivery of an assignment by Sovereign of its right to receive the
corresponding instruments delivered to Sovereign by FNB pursuant to which
Purchaser is named as grantee.
Section 5.3. PURCHASER'S DELIVERIES. On or before the Closing Date,
Purchaser shall deliver to Sovereign (or in the case of subsection (i) below, to
FNB and/or to Sovereign, as the case may be):
(a) The Assignment and Assumption Agreement;
(b) Purchaser's acceptance of its appointment as of the close
of business on the Closing Date as successor trustee or custodian, as
applicable, of the ▇▇▇, ▇▇▇▇▇ Plan and Employee Pension Plan deposit accounts
included in the Deposit Liabilities and its assumption of the fiduciary
obligations of the trustee or custodian with respect thereto;
(c) [Reserved];
(d) An Officer's Certificate in substantially the form of
EXHIBIT N to the Fleet/Sovereign P&A Agreement;
(e) An opinion of counsel of Purchaser and Independent, dated
the Closing Date, in the form and substance reasonably satisfactory to
Sovereign, to the effect that (i) each of Purchaser and Independent is duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its formation or incorporation, with full corporate power and
authority to enter into and perform its obligations under this Agreement; and
(ii) this Agreement has been duly and validly authorized, executed and delivered
by each of Purchaser and Independent, and (assuming due authorization, execution
and delivery by Sovereign) is a legal, valid and binding obligation of each of
Purchaser and Independent, enforceable against Purchaser and Independent in
accordance with its terms, except as enforcement may be limited by receivership,
conservatorship and supervisory powers of bank regulatory agencies generally as
well as bankruptcy, insolvency, reorganization, moratorium or other laws of
general applicability
30
relating to or affecting creditors' rights, or the limiting effect of rules of
law governing specific performance, equitable relief and other equitable
remedies or the waiver of rights or remedies;
(f) The Purchaser's Letter of Credit;
(g) The Collateral Agency Agreement and the Collateral
Assignment Instruments;
(h) The SBA Consents; and
(i) Such other documents as are necessary to effect the
transactions contemplated hereby as Sovereign or FNB shall reasonably request.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF SOVEREIGN
Section 6.1. ASSIGNMENT OF FNB AND FLEET REPRESENTATIONS AND
WARRANTIES. Sovereign hereby makes to Purchaser the same representations and
warranties which FNB made to Sovereign in Article V of the Fleet/Sovereign P&A
Agreement, but only to the extent that such representations and warranties
relate to the Cape Cod Business.
Sovereign further represents and warrants to Purchaser as follows:
Section 6.2. ORGANIZATION. Sovereign is a federal savings bank duly
organized, validly existing and in good standing under the laws of the United
States.
Section 6.3. AUTHORITY. Sovereign has the power and authority to enter
into and perform this Agreement and any other documents executed pursuant
hereto. This Agreement and any other documents or instruments executed pursuant
hereto and the execution, delivery and performance hereof and thereof have been
duly authorized and approved by all necessary corporate action on the part of
Sovereign, and this Agreement and the instruments and documents executed
pursuant hereto constitutes, or when executed will constitute, the valid and
binding obligations of Sovereign, enforceable against Sovereign in accordance
with its terms, except as enforcement may be limited by receivership,
conservatorship and supervisory powers of bank regulatory agencies generally as
well as by bankruptcy, insolvency, reorganization,
31
moratorium or other laws of general applicability relating to or affecting
creditors' rights, or the limiting effect of rules of law governing specific
performance, equitable relief and other equitable remedies or the waiver of
rights or remedies.
Section 6.4. NON-CONTRAVENTION. The execution and delivery of this
Agreement and the instruments and documents executed pursuant hereto by
Sovereign do not and, subject to the receipt of all Regulatory Approvals, the
consummation of the transactions contemplated by this Agreement will not
constitute (a) a material breach or violation of or default under any law, rule,
regulation, judgment, order, governmental permit or license of Sovereign or to
which Sovereign is subject, which breach, violation, or default would have a
Material Adverse Effect or (b) a breach or violation of or a default under the
charter or bylaws of Sovereign.
Section 6.5. LEGAL PROCEEDINGS. There are no actions, suits, or
proceedings, whether civil, criminal or administrative, pending as of the date
of the Agreement or, to the knowledge of Sovereign, threatened as of the date of
the Agreement against or affecting Sovereign, which would reasonably be expected
to have a Material Adverse Effect.
Section 6.6. LOANS. Purchaser acknowledges that neither Sovereign nor
FNB shall be responsible for: (i) the due execution, legality, validity,
enforceability, genuineness, sufficiency, value or collectibility of the Loans
or any document, instrument or agreement in the loan file, including, without
limitation, documents granting to the lender under any such Loan a security
interest in any collateral relating to a Loan, (ii) any representation, warranty
or statement made by an obligor or other party in or in connection with any
Loan, (iii) the financial condition or creditworthiness of any primary or
secondary obligor under any Loan or any guarantor or surety or other obligor
thereof, (iv) the performance by the obligor or compliance with any of the terms
or provisions of any of the documents, instruments and agreements relating to
any Loan, (v) inspecting any of the property, books or records of any obligor,
or (vi) any of the warranties set forth in Section 3-417 of the UCC.
Section 6.7. NO BROKER. Other than ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, Inc., ▇▇▇▇▇▇
Commercial Paper, Inc. and ▇▇▇▇▇▇ Brothers, Inc., (each of whose fees and
expenses will be paid solely by Sovereign), no broker or finder, or other party
or agent performing similar functions, has been
32
retained by Sovereign or its Affiliates or is entitled to be paid based on any
arrangements, agreements or understandings made by Sovereign or its Affiliates
in connection with the transactions contemplated hereby and no brokerage fee or
other commission has been agreed to be paid by Sovereign or its Affiliates on
account of such transactions.
Section 6.8. REGULATORY MATTERS.
(a) The execution, delivery and performance of this Agreement and
the other agreements to be entered into in connection herewith by Sovereign does
not and will not require any consent, approval, authorization or other order of,
action by, filing or registration with or notification to any governmental
authority except as set forth on SCHEDULE 6.8 hereto ("Sovereign Regulatory
Approvals").
(b) There are no pending, or to the knowledge of Sovereign,
threatened disputes or controversies between Sovereign and any federal, state or
local governmental authority, including without limitation with respect to
capital requirements or year 2000 readiness that (i) would reasonably be
expected to prevent or materially delay Sovereign from being able to perform its
obligations under this Agreement, or (ii) would reasonably be expected to impair
the validity or consummation of this Agreement or the transactions contemplated
hereby. Sovereign has not received any indication from any federal, state or
other governmental authority that such governmental authority would oppose or
refuse to grant or issue its consent or approval, if required, with respect to
the transactions contemplated hereby.
Section 6.9. LIMITATIONS ON AND DISCLAIMER OF REPRESENTATIONS AND
WARRANTIES AND PURCHASER'S RELEASE IN CONNECTION THEREWITH. Except as otherwise
addressed in this Article VI, notwithstanding anything to the contrary contained
herein or in any other document or agreement delivered in connection herewith:
(a) Neither Sovereign nor FNB or Fleet makes any representations
or warranties, express or implied, as to the physical condition of the Fixed
Assets, all of which are being sold "AS IS," "WHERE IS," without recourse and
with all faults at the Closing Date.
33
(b) Neither Sovereign nor FNB or Fleet makes any
representations or warranties, express or implied, of any type or nature with
respect to the physical condition of the Facilities or Real Property which are
being sold "AS IS," "WHERE IS," without recourse and with all faults, without
any obligation on the part of Sovereign. Except as otherwise expressly set forth
in this Agreement, by closing this transaction, Purchaser hereby releases and
agrees to hold harmless Sovereign, FNB and Fleet and waives any claims which
Purchaser may now or hereafter have against Sovereign, FNB or Fleet relating to
the physical condition of the Facilities or the Real Property from and after the
Closing, including without limitation with respect to claims under Environmental
Laws or with respect to the presence of Hazardous Materials or with respect to
claims under the ADA.
(c) Neither Sovereign nor FNB or Fleet makes any
representations or warranties to Purchaser as to whether, or the length of time
during which, any accounts relating to Deposit Liabilities will be maintained by
the owners of such Deposit Liabilities at the Branches after the Transfer Date.
(d) Sovereign, FNB and Fleet each disclaim and make no
representations or warranties whatsoever with respect to the Business, Purchased
Assets or Assumed Liabilities, express or implied, including, without
limitation, any representations or warranties with respect to merchantability,
fitness, title, enforceability, collectibility, documentation or freedom from
Liens (in whole or in part) and disclaim any liability and responsibility for
any negligent representation, warranty, statement or information otherwise made
or communicated, by oversight or information otherwise made or communicated, by
oversight or otherwise (orally or in writing), to Purchaser in connection with
the transactions contemplated hereby (including without limitation, any opinion,
information, projection, statement or advice contained in the Offering
Memorandum or which may have been provided to Purchaser by any employee,
officer, agent, stockholder or other representative of Sovereign, FNB or Fleet
or their Affiliates in connection with the transactions contemplated hereby).
34
ARTICLE VII
REPRESENTATIONS AND WARRANTIES OF
PURCHASER AND INDEPENDENT
Purchaser and Independent jointly and severally represent and warrant
to Sovereign as follows:
Section 7.1. ORGANIZATION. Purchaser is a Massachusetts chartered trust
company duly organized, validly existing and in good standing under the laws of
the Commonwealth of Massachusetts. Independent is a corporation duly organized,
validly existing and in good standing under the laws of the Commonwealth of
Massachusetts.
Section 7.2. AUTHORITY. Each of Purchaser and Independent has the power
and authority to enter into and perform this Agreement and any instruments or
other documents executed pursuant hereto. This Agreement and any instruments or
other documents executed pursuant hereto, and the execution, delivery and
performance hereof and thereof have been duly authorized and approved by all
necessary corporate action on the part of each of Purchaser and Independent, and
this Agreement constitutes a valid and binding obligation of each of Purchaser
and Independent, enforceable against each of Purchaser and Independent in
accordance with its terms, except as enforcement may be limited by receivership,
conservatorship and supervisory powers of bank regulatory agencies generally as
well as bankruptcy, insolvency, reorganization, moratorium or other laws of
general applicability relating to or affecting creditors' rights, or the
limiting effect of rules of law governing specific performance, equitable relief
and other equitable remedies or the waiver of rights or remedies.
Section 7.3. NON-CONTRAVENTION. The execution and delivery of this
Agreement and any instruments or other documents executed pursuant hereto by
Purchaser do not and, subject to the receipt of all Regulatory Approvals, the
consummation of the transactions contemplated by this Agreement, will not
constitute (a) a material breach or violation of or default under any law, rule,
regulation, judgment, order, governmental permit or license of Purchaser or
Independent or to which either is subject, which breach, violation or default
would prevent or materially delay Purchaser or Independent from being able to
perform their respective obligations under this
35
Agreement in all material respects, or (b) a breach or violation of or a default
under the charter or bylaws of Purchaser or Independent or any material contract
or other instrument to which either of them is a party or by which either of
them is bound which breach, violation or default would prevent Purchaser or
Independent from performing its obligations under this Agreement in all material
respects.
Section 7.4. LEGAL PROCEEDINGS. There are no actions, suits, or
proceedings, whether civil, criminal or administrative, pending or, to the
knowledge of Purchaser or Independent threatened against or affecting Purchaser
or Independent which could prevent or materially delay Purchaser or Independent
from performing its obligations under this Agreement in all material respects.
Section 7.5. CONSENTS AND OTHER REGULATORY MATTERS.
(a) The execution, delivery and performance of this Agreement
and the other agreements to be entered into in connection herewith by Purchaser
and Independent do not and will not require any consent, approval, authorization
or other order of, action by, filing or registration with or notification to (i)
any governmental authority except as set forth on Schedule 6.8 hereto
("Purchaser Regulatory Approvals") or (ii) any other party.
(b) There are no pending, or to the knowledge of Purchaser,
threatened disputes or controversies between Purchaser or Independent and any
federal, state or local governmental authority, including without limitation
with respect to capital requirements or year 2000 readiness that (i) would
reasonably be expected to prevent or materially delay Purchaser or Independent
from being able to perform its obligations under this Agreement, or (ii) would
reasonably be expected to impair the validity or consummation of this Agreement
or the transactions contemplated hereby. Independent and Purchaser have
discussed with the Massachusetts Division of Banks this Agreement and the
transactions contemplated hereby. Neither Purchaser nor Independent believes or
has received any indication from any federal, state or other governmental
authority that such governmental authority would oppose or refuse to grant or
issue its consent or approval, if required, with respect to the transactions
contemplated
36
hereby. Purchaser satisfies all capital and other regulatory requirements
necessary to obtain all Purchaser Regulatory Approvals.
(c) The deposits of Purchaser are insured by the FDIC in
accordance with the FDIA, and Purchaser has paid all assessments and has filed
all reports required to be filed by it by the FDIC.
(d) As of the date hereof, without giving effect to the
transactions contemplated hereby each of Purchaser and Independent is (and
following the transactions contemplated hereby and the transactions contemplated
in the Fleet/Rockland P&A Agreement, each of Purchaser and Independent will be):
(i) at least "adequately capitalized," as defined in the FDIA, and (ii) in
compliance with all capital requirements, standards and ratios required by each
state or federal bank regulator with jurisdiction over it, including without
limitation, any such higher requirement, standard or ratio as applies to
institutions engaging in the acquisition of insured institution deposits, assets
or branches and no such regulator is likely to, or has indicated that it will,
condition any of the Purchaser Regulatory Approvals upon an increase in capital
or compliance with any capital requirement, standard or ratio applicable to
Purchaser or Independent.
(e) To the knowledge of Purchaser, it will not be required to
divest any of the Purchased Assets or Assumed Liabilities or any other asset or
liability as a condition to the receipt of any of the Purchaser Regulatory
Approvals.
(f) Purchaser was rated "Satisfactory" or "Outstanding"
following its most recent CRA examination by the regulatory agency responsible
for its supervision. Purchaser has received no notice of and has no knowledge of
any planned or threatened objection by any community group to the transactions
contemplated hereby.
Section 7.6. WARN ACT. Purchaser is not planning or contemplating, and
has not made or taken, any decisions or actions concerning the Transferred
Employees after the Closing that would require the service of notice under the
WARN Act.
37
Section 7.7. CAPITAL AVAILABLE. Each of Purchaser and Independent has
sufficient capital to support the acquisition of the Cape Cod Business and to
perform its other obligations hereunder (and under any of the other documents
executed in connection herewith) and under the Fleet/Rockland P&A Agreement (and
under any of the other documents executed in connection therewith).
Section 7.8. NO BROKER. Other than ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ (whose fees
and expenses will be paid solely by Independent), no broker or finder, or any
other party or agent performing similar functions, has been retained by
Purchaser or its Affiliates or is entitled to be paid based on any arrangements,
agreements or understandings made by Purchaser or its Affiliates in connection
with the transactions contemplated hereby and no brokerage fee or other
commission has been agreed to be paid by Purchaser or its Affiliates on account
of such transactions.
ARTICLE VIII
COVENANTS OF SOVEREIGN
Section 8.1. ASSIGNMENT OF FNB COVENANTS. Sovereign hereby assigns to
Purchaser its rights with respect to the covenants of FNB as set forth in
Article VII of the Fleet/Sovereign P&A Agreement, but only to the extent that
such covenants relate to the Cape Cod Business.
Section 8.2. CONSENTS. Anything contained in this Agreement to the
contrary notwithstanding, this Agreement shall not constitute an agreement to
assign any Purchased Asset, contract, Deposit Liability or other Assumed
Liability, or any claim or right or any benefit arising thereunder or resulting
therefrom if an attempted assignment thereof, without the consent of a third
party thereto, would constitute a breach thereof or in any way affect the rights
of FNB or Sovereign thereunder or be contrary to applicable law. If any such
consent or approval is not obtained, Sovereign will use its commercially
reasonable efforts (which shall not require Sovereign or its Affiliates to pay
any money or other consideration to any Person or to initiate any claim or
proceeding against any Person) to cause FNB to agree to secure an arrangement
reasonably satisfactory to Purchaser insuring that Purchaser will receive the
benefits under the agreement for which such consent is being sought following
the Closing; provided, however, that
38
neither Sovereign nor FNB shall have any obligation to obtain such consent or
approval or to provide such an alternative arrangement and Purchaser shall
remain obligated to close the transactions contemplated herein, subject to the
other provisions hereof, and shall have no remedy for Sovereign's failure to
obtain any such consent or approval or to provide any such alternative
arrangement.
Section 8.3. NONSOLICITATION OF CUSTOMERS BY FNB. Sovereign shall use
its commercially reasonable efforts to cause FNB to execute and deliver to
Purchaser at the Closing a written nonsolicitation covenant in favor of
Purchaser, as follows: For a period of two (2) years following the Closing Date,
FNB shall not use any list of Customers as a means to offer the same or similar
products and services of the Cape Cod Business to any Customer as was provided
to such Customer by the Cape Cod Business immediately prior to the Closing Date.
Notwithstanding the foregoing sentence, FNB and its Affiliates shall be
permitted to (a) engage in advertising, solicitations or marketing campaigns,
programs or other efforts not primarily directed to or targeted at the
Customers, including without limitation such campaigns, programs or efforts in
connection with lending, deposit, safe deposit, trust or other financial
services relationships with such Customers, (b) engage in other lending,
deposit, safe deposit, trust or other financial services relationships, (c)
respond to unsolicited inquiries, and (d) provide notices or communications
relating to the transactions contemplated hereby in accordance with the
provisions hereof.
Section 8.4. NONSOLICITATION OF PURCHASER'S EMPLOYEES BY FNB. Sovereign
shall use its commercially reasonable efforts to cause FNB to execute and
deliver to Purchaser at the Closing a written nonsolicitation covenant in favor
of Purchaser, as follows: FNB agrees that, for a period of two (2) years
following the Closing Date, it shall not, directly or indirectly, solicit for
employment, retain as an independent contractor or consultant, induce to
terminate employment with Purchaser or otherwise interfere with Purchaser's
employment relationship with any Transferred Employee; provided, however, that
this covenant shall not apply (i) if any such employee has been terminated by
Purchaser or any of its Affiliates for any reason, or (ii) if such employee is
hired by FNB or any of its Affiliates as a result of a general solicitation for
39
employment in newspaper advertisements or other periodicals of general
circulation not specifically targeted to employees of Purchaser.
Section 8.5. NONSOLICITATION OF CUSTOMERS BY SOVEREIGN. For a period of
two (2) years following the Closing Date, Sovereign shall not use any list of
Customers provided to it by FNB or any FNB Affiliate as a means to offer the
same or similar products and services of the Cape Cod Business to any Customer
as was provided to such Customer by the Cape Cod Business immediately prior to
the Closing Date. Notwithstanding the foregoing sentence, Sovereign and its
Affiliates shall be permitted to (a) engage in advertising, solicitations or
marketing campaigns, programs or other efforts not primarily directed to or
targeted at the Customers, including without limitation such campaigns, programs
or efforts in connection with lending, deposit, safe deposit, trust or other
financial services relationships with such Customers, (b) engage in other
lending, deposit, safe deposit, trust or other financial services relationships,
(c) respond to unsolicited inquiries, (d) provide notices or communications
relating to the transactions contemplated hereby in accordance with the
provisions hereof, and (e) administer and service the Middle Market Loans
(including any and all extensions and refinancings thereof).
Section 8.6. NONSOLICITATION OF PURCHASER'S EMPLOYEES BY SOVEREIGN.
Sovereign agrees that, for a period of two (2) years following the Closing Date,
it shall not, directly or indirectly, solicit for employment, retain as an
independent contractor or consultant, induce to terminate employment with
Purchaser or otherwise interfere with Purchaser's employment relationship with
any Transferred Employee who is identified as such in a written document
delivered by Purchaser to Sovereign at the Closing; provided, however, that this
covenant shall not apply (i) if any such employee has been terminated by
Purchaser or any of its Affiliates for any reason, or (ii) if such employee is
hired by Sovereign or any of its Affiliates as a result of a general
solicitation for employment in newspaper advertisements or other periodicals of
general circulation not specifically targeted to employees of Purchaser.
40
ARTICLE IX
COVENANTS OF PURCHASER AND
INDEPENDENT
Purchaser and Independent covenant and agree with Sovereign as follows:
Section 9.1. REGULATORY APPROVALS AND STANDARDS.
(a) Not later than one (1) day after the date hereof,
Independent and Purchaser shall discuss with the FDIC this Agreement and the
transactions contemplated hereby and shall advise Sovereign in writing whether
the FDIC indicates that it will oppose (or not oppose) or refuse to issue its
consent or approval with respect to the transactions contemplated hereby and
whether Independent or Purchaser believes that the FDIC will oppose or refuse to
consent to or approve the transactions contemplated hereby. Purchaser will use
its commercially reasonable efforts to obtain as expeditiously as possible the
Purchaser Regulatory Approvals and SBA Consents and will file within two (2)
days after the execution of this Agreement all necessary applications of
Purchaser to obtain the Purchaser Regulatory Approvals and SBA Consents.
Purchaser will supply to Sovereign prior to filing copies of all proposed
regulatory applications and filings (other than confidential portions thereof)
and will use reasonable efforts to reflect any comments of Sovereign in such
filings. As of the Closing Date, Purchaser will satisfy any and all of the
standards and requirements reasonably within its control imposed as a condition
to obtaining or necessary to comply with the Purchaser Regulatory Approvals and
the SBA Consents. Purchaser shall pay any fees charged by any governmental
authorities to which it must apply to obtain any of the Purchaser Regulatory
Approvals or the SBA Consents. Purchaser shall take no action which would
adversely affect or delay the ability of any other party hereto to obtain any
Regulatory Approval or to perform its covenants and agreements under this
Agreement. Purchaser shall notify Sovereign promptly (and in no event later than
one (1) Business Day following notice) of any significant development with
respect to any application or notice Purchaser files with any governmental
authority in connection with the transactions contemplated by this Agreement.
41
(b) From the date hereof through the Transfer Date, Purchaser
and Independent shall each (i) remain at least "adequately capitalized," as
defined in the FDIA, (ii) meet all capital requirements, standards and ratios
required by each state or federal bank regulator with jurisdiction over it,
including without limitation, any such higher requirement, standard or ratio as
shall apply to institutions engaging in the acquisition of insured institution
deposits, assets or branches, and (iii) maintain at least "satisfactory" CRA
ratings.
(c) Purchaser hereby confirms that after the Closing it is
Purchaser's intention to conduct a banking business at the Branches, and
therefore as of the date of this Agreement it is not expected that the
transactions contemplated by this Agreement will result in the closing,
consolidation or relocation of any of the Branches. Purchaser agrees that it
shall be solely responsible for complying with any required branch closing or
other notices to regulators and customers in the event Purchaser should at any
time determine to close, consolidate or relocate any of the Branches or to
close, consolidate or relocate any branch of Purchaser in connection with or
relating to the transactions contemplated by this Agreement.
Section 9.2. [Reserved]
Section 9.3. SOLICITATION OF ACCOUNTS. Prior to the Closing Date,
neither Purchaser nor any of its Affiliates shall solicit Customers through
advertising specifically referencing or targeted to such Customers nor transact
their respective businesses in such a way which is reasonably likely to (a)
induce such Customers to close Deposit Liability accounts and open deposit
accounts directly with Purchaser or any of its Affiliates, or (b) result in the
transfer of all or a portion of an existing Deposit Liability from FNB.
Notwithstanding the foregoing sentence, Purchaser and its Affiliates shall be
permitted to (i) engage in advertising, solicitations or marketing campaigns not
primarily directed to or targeted at such Customers, (ii) engage in lending,
deposit, safe deposit, trust or other financial services relationships existing
as of the date hereof with such Customers through branch offices of Purchaser,
(iii) respond to unsolicited inquiries by such Customers with respect to banking
or other financial services offered by Purchaser and (iv) provide notices or
communications relating to the transactions contemplated hereby in accordance
with the provisions hereof. It is the intention of the parties that FNB shall be
a third party beneficiary of the foregoing covenant.
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Section 9.4. NONSOLICITATION OF CERTAIN FNB EMPLOYEES. In consideration
of, among other things, the willingness of FNB to provide Purchaser with the
opportunity to interview and hire the Consumer Bank Related Employees, Purchaser
and its Affiliates agree that, except in accordance with this Section 9.4, for a
period of two (2) years following the Closing Date, it shall not, directly or
indirectly, solicit for employment, or hire any Person who is employed by FNB or
its Affiliates in an executive or management level position or who otherwise is
considered by FNB to be a key employee and who at the time of such solicitation
is employed by FNB in an executive or management level position or is otherwise
considered by FNB or its Affiliates to be a key employee; provided, however,
that this Section 9.4 shall not apply (i) if any such employee has been
terminated by FNB or any of its Affiliates for any reason, or (ii) if such
employee is hired by Purchaser or any of its Affiliates as a result of a general
solicitation for employment in newspaper advertisements or other periodicals of
general circulation not specifically targeted to employees of FNB. It is the
intention of the parties that FNB shall be a third party beneficiary of the
foregoing covenant.
Section 9.5. RECORDING OF INSTRUMENTS OF ASSIGNMENT.
(a) No later than ten (10) Business Days following the Closing
Date, Purchaser shall have recorded all deeds relating to the Real Property.
(b) No later than six (6) months following the Closing Date,
Purchaser shall have recorded all other instruments required, necessary or
reasonably desirable to evidence the acquisition, assignment and assumption of
the Purchased Assets and the Assumed Liabilities, including, without limitation,
all assignments of mortgage, financing statements, and security agreements
relating to the Loans.
Section 9.6. TRANSFERRED EMPLOYEES. Purchaser covenants to Sovereign
that it will do or cause the following to occur:
(a) No later than the Final Approval Date, Purchaser shall
offer employment beginning as of the Closing Date to all Consumer Bank Employees
upon terms and conditions described in subsection (c) below and subject to the
Closing. Purchaser may but shall not be obligated to offer employment to any
Consumer Bank Related Employee following the Final
43
Approval Date on the same terms as required hereunder for offers of employment
to Consumer Bank Employees; provided, however, that Purchaser must offer
employment to such Consumer Bank Related Employees no later than thirty (30)
days following the date on which a list of such Consumer Bank Related Employees
is provided to Purchaser. The position offered to each Consumer Bank Employee
and each Consumer Bank Related Employee must be a Comparable Job. Subject to the
provisions of this Section 9.6, Transferred Employees will be subject to the
employment terms, conditions and rules applicable to other similarly situated
employees of Purchaser. Nothing contained in this Agreement shall be construed
as an employment contract between Purchaser and any Transferred Employee.
(b) Effective as of the Closing Date, Purchaser shall assume
the Fleet Boston Divestiture Severance Plan and all obligations for all
severance benefits payable pursuant to such plan (the "Assumed Severance
Obligations") to any Consumer Bank Employee to whom Purchaser does not provide a
Comparable Job in accordance with Section 9.6(a) hereof; provided, however, that
transitional assistance programs for which Purchaser shall be responsible under
the Fleet Boston Divestiture Severance Plan shall be limited to outplacement
services. For a period of one (1) year following the Closing Date, Purchaser
shall provide severance benefits to any Transferred Employee who is terminated
by Purchaser on or after the Closing Date pursuant to the terms of the Fleet
Boston Divestiture Severance Plan. Purchaser shall compute severance benefits by
giving all Transferred Employees full credit for all years of service with FNB,
its Affiliates and predecessors in accordance with their respective adjusted
dates of hire as furnished by FNB ("Years of Service"). After the one (1) year
period provided for herein, Purchaser shall provide Transferred Employees with
severance benefits in accordance with Purchaser's severance policy, if any,
crediting Transferred Employees with years of service as provided under this
Agreement.
(c) Each Consumer Bank Employee, and Consumer Bank Related
Employee offered employment by Purchaser, shall be offered employment subject to
the following terms and conditions:
(i) Base salary or base hourly wages shall be equivalent to
the base salary or base hourly wage paid by FNB to such employee as of
the close of business on the
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Closing Date until such time that Purchaser's compensation policies
would entitle each such employee to an increased salary or base wage;
and
(ii) Vacation benefits shall be equivalent to vacation
benefits provided by FNB to such employee as of the close of business
on the Closing Date, until December 31, 2000. Any vacation balance to
which such employee is entitled in the year of Closing shall carry over
to Purchaser (to a maximum of four weeks). As of January 1, 2001,
Transferred Employees shall receive in the aggregate for vacation, sick
and personal days the amount of paid time off to which they are
entitled under Purchaser's policies as in effect then and from time to
time thereafter.
(d) Purchaser shall provide such Transferred Employee with the
following:
(i) Each Transferred Employee will be eligible to participate
in any qualified profit sharing plan/40l(k) plan or plans of Purchaser,
based on each plan's eligibility criteria as of the close of business
on the Closing Date. Purchaser shall credit each Transferred Employee
with his or her Years of Service with FNB, its Affiliates and
predecessors in determining eligibility to participate, vesting and
level of matching contributions in such plan or plans;
(ii) Each Transferred Employee will be eligible to participate
in the Purchaser's qualified pension plan or plans, based on each such
plan's eligibility criteria as of the close of business on the Closing
Date. Purchaser shall credit each Transferred Employee with his or her
Years of Service with FNB, its Affiliates and predecessors in
determining eligibility to participate, vesting and eligibility to
receive benefits in Purchaser's pension plan(s); provided, however,
that such crediting of service shall not operate to duplicate any
benefit or the funding of any benefit for any period of service;
(iii) Each Transferred Employee will receive credit for his or
her Years of Service with FNB, its Affiliates and predecessors for
purposes of calculation of benefits and waiting period eligibility in
Purchaser's other miscellaneous benefits programs, including but not
limited to, vacation, severance, leaves of absence, education
assistance, sick leave, long-term disability plans and other similar
benefits;
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(iv) On the Closing Date each Transferred Employee will become
immediately eligible to participate in the Purchaser's health and
welfare plans, including but not limited to, dental and sick leave, as
such plans may exist, on the same basis as other similarly-situated
employees of Purchaser. Purchaser shall waive any pre-existing
condition limitations with respect to such Transferred Employee and his
or her dependents. With respect to Purchaser's existing life insurance
and long-term disability plans, which have a participation waiting
period of ninety (90) days, the Purchaser shall use its commercially
reasonable best efforts to provide that each Transferred Employee will
be immediately eligible to participate in a plan or plans providing the
same benefits as Purchaser's existing plans effective on and after the
Closing Date; provided however, that Transferred Employees shall be
eligible to participate in Purchaser's existing plans not more than
ninety (90) days after the Closing Date. Except as set forth in the
immediately preceding sentence, Purchaser shall cause each Transferred
Employee to be eligible as of the Closing Date for at least the amount
of insurance coverage that he or she maintained under FNB's plans,
without requiring such Transferred Employee to provide any evidence of
insurability; provided however, that for full-time Transferred
Employees, life insurance benefits shall be limited to 2 and1/2 times
base salary, to a maximum of $350,000, and for part-time Transferred
Employees, life insurance benefits shall be limited to a maximum of
$20,000.
(v) Upon conclusion of his or her short-term disability or
temporary leave of absence, subject to the terms and conditions of
Purchaser's plans and policies and applicable law, each Transferred
Employee on such leave as of the Closing Date shall receive the greater
of the salary and vacation benefits in effect (y) when he or she went
on leave, or (z) upon the conclusion of such leave (to the extent that
such Transferred Employee is entitled to any pay increase or vacation
entitlement during such leave of absence pursuant to FNB's leave of
absence policies), shall otherwise be treated as a Transferred
Employee, and shall be offered by Purchaser the same or a substantially
equivalent position to his or her position with FNB prior to the leave;
and
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(vi) To the extent that Purchaser provides any Transferred
Employee with benefit or other plans and such plans accept cash
roll-overs, Purchaser shall allow such Transferred Employee to roll
over into such plans any cash distributions or contributions received
from FNB or its plans, including any outstanding loan balances from
FNB's qualified or thrift retirement plan.
(e) Purchaser shall be responsible for all obligations
(including obligations to provide notices) or liabilities, if any, which may
arise in connection with any Transferred Employee under the WARN Act. Purchaser
shall indemnify and hold Sovereign and FNB harmless for any WARN Act obligations
or liabilities of Sovereign or FNB that are triggered by any mass layoff, plant
closing or other employment action by Purchaser within the ninety (90) day
period following after Closing Date.
Section 9.7. INTERVIEWS. Purchaser shall be solely responsible for any
acts or omissions which are wrongful, illegal or in contravention of this
Agreement made by it in connection with interviewing or hiring the Consumer Bank
Employees and Consumer Bank Related Employees. Purchaser shall reimburse the
Consumer Bank Employees and Consumer Bank Related Employees (if applicable) for
transportation costs at applicable IRS mileage rates to and from any location
where Purchaser shall interview such employees.
Section 9.8. NONSOLICITATION OF MIDDLE MARKET CUSTOMERS BY PURCHASER.
For a period of two (2) years following the Closing Date, neither Purchaser nor
any of its Affiliates shall: (i) solicit any Middle Market Borrower for the
purpose of inducing such Borrower to terminate its relationship with Sovereign,
or (ii) otherwise interfere with Sovereign's relationship with any Middle Market
Borrower. Notwithstanding the foregoing sentence, Purchaser and its Affiliates
shall be permitted to (a) engage in advertising, solicitations or marketing
campaigns not primarily directed to or targeted at Middle Market Borrowers, (b)
engage in lending, deposit, safe deposit, trust or other financial services
relationships with any such Middle Market Borrower to the extent that such
relationships: (i) exist as of the date hereof; or (ii) are acquired pursuant to
the acquisition by Purchaser of the Cape Cod Business hereunder, and (c) respond
to unsolicited inquiries by any such Middle Market Borrower with respect to
banking or other financial services offered by Purchaser.
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Section 9.9. NONSOLICITATION OF MIDDLE MARKET EMPLOYEES BY PURCHASER.
For a period of two (2) years following the Closing Date, neither Purchaser nor
any of its Affiliates shall, directly or indirectly, solicit for employment,
retain as an independent contractor or consultant, induce to terminate
employment with Sovereign or any Sovereign Affiliate or otherwise interfere with
Sovereign's or such Affiliate's employment relationship with any Middle Market
Employee who is identified as such in a written document delivered by Sovereign
to Purchaser at the Closing; provided, however, that this covenant shall not
apply (i) if any such employee has been terminated by Sovereign or any of its
Affiliates for any reason, or (ii) if such employee is hired by Purchaser or any
of its Affiliates as a result of a general solicitation for employment in
newspaper advertisements or other periodicals of general circulation not
specifically targeted to employees of Sovereign.
Section 9.10. INDEPENDENT GUARANTY. Subject to the terms and conditions
of the Agreement, Independent hereby guarantees the performance by the Purchaser
of Purchaser's obligations (a) hereunder, and (b) under any other agreements
made or documents executed in connection herewith.
ARTICLE X
ACCESS; EMPLOYEE AND CUSTOMER COMMUNICATIONS
Section 10.1. ACCESS BY PURCHASER. Upon execution of this Agreement,
Sovereign shall use its commercially reasonable efforts to cause FNB to agree to
provide Purchaser and its representatives, accountants and counsel reasonable
access during normal business hours and upon five (5) Business Days' notice to
FNB to the Facilities, Consumer Bank Employees, Consumer Bank Related Employees,
depository records, Loan files, and all other documents and other information
concerning the Facilities, the Cape Cod Business, the Purchased Assets, the
Assumed Liabilities and the Transferred Employees as Purchaser may reasonably
request; provided that a representative of FNB shall be permitted to be present
at all times and provided further that with respect to information concerning
Consumer Bank Employees and Consumer Bank Related Employees, FNB's sole
obligation shall be to provide Purchaser with information concerning the name,
position, date of hire and salary of the Consumer Bank Employees and Consumer
Bank Related Employees and FNB shall not be required to provide Purchaser with
48
access to or copies of any personnel files or other individualized employee
files or documents, all of which shall remain the sole property of FNB.
Notwithstanding the foregoing, in no event shall FNB be required to provide (a)
any information which FNB, in its sole discretion deems proprietary, including
without limitation, any "credit scoring" system, branch or credit practices,
policies or procedures, or staffing models, (b) any information which is
protected by the attorney-client privilege, or (c) their or any of their
Affiliates' tax returns.
Section 10.2. COMMUNICATIONS TO EMPLOYEES; TRAINING. Sovereign shall
use its commercially reasonable efforts to cause FNB to agree to the following:
(a) Promptly following the execution of this Agreement,
meetings shall be held at such location as Purchaser and FNB shall mutually
agree, provided that representatives of FNB shall be permitted to attend such
meetings, to announce Purchaser's proposed acquisition of the Cape Cod Business
to the Consumer Bank Employees. FNB and Purchaser shall mutually agree as to the
scope and content of all communications to the Consumer Bank Employees and
Consumer Bank Related Employees. Except as specifically provided in this Section
10.2, in no event shall Purchaser contact any Consumer Bank Employee or Consumer
Bank Related Employee without the prior written consent of FNB which consent may
be granted or withheld in FNB's sole discretion.
(b) At mutually agreed upon times following the initial
announcement described in Section 10.2(a), Purchaser shall be permitted to meet
with the Consumer Bank Employees and Consumer Bank Related Employees to discuss
employment opportunities with Purchaser, provided that representatives of FNB
shall be permitted to attend any such meeting. From and after the Final Approval
Date, Purchaser shall also be permitted to conduct training sessions outside of
normal business hours or at other times as FNB may agree, with the Consumer Bank
Employees and Consumer Bank Related Employees (if applicable) and may, at FNB's
sole option, conduct such training seminars at the Branches; provided that
Purchaser will in good faith attempt to schedule such training sessions in a
manner which does not unreasonably interfere with FNB's normal business
operations. Purchaser shall reimburse the Consumer Bank Employees and Consumer
Bank Related Employees (if applicable) for transportation costs to and from the
locations where Purchaser shall train such employees and compensate the Consumer
49
Bank Employees and Consumer Bank Related Employees (if applicable) or reimburse
FNB at the Consumer Bank Employees and Consumer Bank Related Employees (if
applicable) respective applicable standard or overtime rates for the time spent
in such training.
Section 10.3. COMMUNICATIONS WITH CUSTOMERS.
(a) Following the Final Approval Date but not earlier than
fifteen (15) days prior to the anticipated Closing Date, Purchaser shall send
statements to the Customers announcing the transactions contemplated hereby
(such statements being herein called "Customer Notices"). The form and content
of each Customer Notice shall be subject to the approval of the parties and the
cost of printing and mailing the Customer Notices shall be borne solely by
Purchaser. Following the Final Approval Date, Purchaser shall also be entitled
to provide solely at its own expense such other notices or communications to
Customers relating to the transactions contemplated hereby as may be required by
law; provided that the text of any such notice or communication and the timing
of such notice or communication which is provided prior to the Closing shall be
approved in advance by FNB, which approval shall not unreasonably be withheld or
delayed.
(b) Except as specifically provided herein, in no event will
Purchaser or its Affiliates contact any Customers prior to the Final Approval
Date without the prior written consent of FNB which may be granted or withheld
in their sole discretion; provided that Purchaser may contact Customers in
connection with (i) advertising, solicitations or marketing campaigns not
primarily directed to or targeted at Customers, (ii) lending, deposit, safe
deposit, trust or other financial services relationships of Purchaser with
Customers through branch offices of Purchaser existing as of the date hereof,
(iii) unsolicited inquiries by Customers to Purchaser with respect to banking or
other financial services provided by Purchaser, and (iv) notices or
communications relating to the transactions contemplated hereby in accordance
with the provisions hereof.
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ARTICLE XI
FACILITIES
Section 11.1. ENVIRONMENTAL DILIGENCE.
(a) Purchaser acknowledges that prior to the date hereof, it
has been provided copies of "Phase I" assessments of the Real Property prepared
for Sovereign by ESNR Consulting and Engineering.
(b) Sovereign makes no representations or warranties of any
kind with respect to the foregoing Phase I assessments, with respect to the
presence of hazardous materials at the Facilities or the Real Property, or with
respect to compliance with any Environmental Law applicable to the Facilities or
the Real Property.
Section 11.2. TITLE.
(a) Purchaser acknowledges that prior to the date hereof, it
has been provided copies of recently issued title searches relating to the Real
Property.
(b) Sovereign makes no representations or warranties of any
kind with respect to the foregoing title searches and, except to the extent of
the FNB representations and warranties assigned to Purchaser in Section 6.1
above, Sovereign makes no representations or warranties with respect to the
title to any parcel of Real Property.
ARTICLE XII
TRANSITIONAL MATTERS
Section 12.1. PAYMENT OF DEPOSIT LIABILITIES.
(a) From and after the Closing Date, Purchaser shall (i) pay
all properly drawn and presented checks, negotiable orders of withdrawal,
drafts, debits and other withdrawal orders presented to Purchaser by Deposit
Liability account customers, whether drawn on checks, negotiable orders of
withdrawal, drafts, or other withdrawal order forms provided by FNB or by
Purchaser, and (ii) in all other respects discharge, in the usual course of the
banking business, all of the duties and obligations of FNB with respect to the
balances due and owing to the
51
Customers who have Deposit Liability accounts. If any Customer who has a Deposit
Liability account draws checks, drafts, or negotiable orders of withdrawal
against the Deposit Liabilities which are presented or delivered to FNB not
later than ninety (90) days after the Closing Date. Sovereign shall use its
commercially reasonable efforts to cause FNB to agree to use its commercially
reasonable efforts to batch all such checks, drafts, negotiable orders of
withdrawal, or other withdrawal order forms and to deliver the same to Purchaser
at Purchaser's sole expense. Purchaser acknowledges that any delay, failure, or
inability on its part to comply with the obligations imposed upon it as a
depository institution under applicable federal or state law, with regard to
such checks, drafts, negotiable orders of withdrawal or other withdrawal orders
shall not result in any liability or obligation of Sovereign or FNB and shall
not affect any of the rights of Sovereign under this Agreement. Neither
Sovereign nor FNB shall be deemed to have made any representations or warranties
to Purchaser with respect to any such checks, drafts, negotiable orders of
withdrawal or other withdrawal orders and any such representations or warranties
implied by law are hereby disclaimed and are the responsibility of Purchaser,
except that FNB shall be chargeable with the warranties and representations
implied by law with respect to any such check, draft, negotiable orders of
withdrawal order, or other withdrawal order, which is paid by FNB over the
counter.
(b) Purchaser hereby acknowledges that if, after the Closing
Date, any Customer who has a Deposit Liability account, instead of accepting the
obligation of Purchaser to pay the Deposit Liabilities (including Accrued
Interest thereon) shall demand payment from FNB for all or any part of any such
Deposit Liabilities (including Accrued Interest thereon), FNB shall not be
liable or responsible for making such payment.
(c) Purchaser understands that Sovereign has been advised that
it is FNB's intent to act in a commercially reasonable manner to ensure that all
Deposit Liability transactions will be referred to Purchaser; provided however
that, if, after the Closing Date, FNB honors and pays any Deposit Liabilities
which are presented to FNB for payment, pay any check, draft, negotiable order
of withdrawal or other withdrawal order, Purchaser shall upon demand by FNB
reimburse FNB for such payment. Any payment made under this Section 12.1 shall
be made
52
within three (3) Business Days after demand by FNB, by wire transfer of
immediately available funds to an account designated by FNB.
Section 12.2. DELIVERY OF PURCHASER'S CHECK FORMS. Within fifteen (15)
Business Days following the Final Approval Date, but not less than five (5) days
prior to the Closing Date, Purchaser shall, at its sole cost and expense, notify
all Customers who have a Deposit Liability account by letter, in a form
reasonably acceptable to FNB, of Purchaser's assumption of the Deposit
Liabilities (other than Excluded Deposits) (which shall include a notification
to those Deposit Liability account Customers whose accounts are then covered by
any type of overdraft protection offered by FNB, including but not limited to
Advance Lines, that from and after the Closing Date all such overdraft
protection from FNB shall terminate) and furnish each such Customer with checks,
deposit tickets, or other similar instruments using the forms of Purchaser,
which shall be appropriately encoded with Purchaser's routing number and with
accurate account numbers, and with instructions to the customer to utilize such
checks, deposit tickets, or other similar instruments on Purchaser's forms on
and after the Closing Date and thereafter to destroy any unused checks on a
FNB's forms; such notice and such delivery of checks by Purchaser shall be by
first class U.S. mail.
Section 12.3. UNCOLLECTED CHECKS. From and after the Closing Date,
Purchaser shall promptly pay to FNB an amount equivalent to the amount of any
checks, negotiable orders of withdrawal, drafts, or any other withdrawal orders
(net of the applicable deposit premium paid by Purchaser with respect to the
Deposit Liabilities represented by any such instrument) credited as of the close
of business on the Closing Date to any Deposit Liability accounts which are
returned uncollected to FNB after the Closing Date and which shall include an
amount equivalent to holds placed upon such Deposit Liability accounts for Items
cashed by FNB (net of the applicable deposit premium paid by Purchaser with
respect to the Deposit Liabilities represented by any such instrument), as of
the close of business on the Closing Date which Items are subsequently
dishonored; provided, however, that Sovereign shall use its commercially
reasonable efforts to cause FNB to agree that if FNB shall have failed to make
or properly reflect in the information provided to Purchaser any provisional
credit or hold on any such Deposit Liability accounts in respect of uncollected
funds represented by any such Item, Purchaser's obligations under this
53
Section 12.3 in respect of such Item shall be limited to the amount of collected
funds in such Deposit Liability accounts.
Section 12.4. DEFAULT ON LOAN PAYMENTS. If the balance due on any Loan
has been reduced by FNB as a result of a payment by check or draft received
prior to the close of business on the Closing Date, which Item is returned to
FNB after the Closing Date, the Loan Value of such Loan shall be correspondingly
increased and an amount in cash equal to such increase shall be promptly paid by
Purchaser to FNB within three (3) Business Days after demand by FNB by wire
transfer of immediately available funds to an account designated by FNB.
Section 12.5. NOTICES TO OBLIGORS ON LOANS.
(a) Purchaser shall, following the Final Approval Date, but no
later than fifteen (15) days prior to the Closing Date, prepare and transmit, at
Purchaser's sole cost and expense, to each obligor on each Loan, a notice in a
form satisfying all legal requirements and reasonably acceptable to FNB to the
effect that the Loan will be transferred to Purchaser and directing that
payments be made after the Closing Date to Purchaser at any address of Purchaser
specified by Purchaser, with Purchaser's name as payee on any checks or other
instruments used to make such payments, and, with respect to all such Loans on
which payment notices or coupon books have been issued, to issue new notices or
coupon books reflecting the name and address of Purchaser as the person to whom
and the place at which payments are to be made. To the extent that Purchaser's
notice pursuant to the prior sentence shall be legally insufficient, Sovereign
shall use its commercially reasonable efforts to cause FNB to agree, at
Purchaser's sole expense, to provide all Loan obligors with all required notices
of the assignment and transfer of the Loans.
(b) To the extent that any of the Loans transferred to
Purchaser involve a transfer of servicing as defined and governed by the Real
Estate Settlement Procedures Act (12 U.S.C. ss.2601 ET. SEQ.), Purchaser will
jointly coordinate with FNB any appropriate required Customer notices.
Section 12.6. NEW TELEPHONE NUMBERS. Purchaser shall, no later than ten
(10) days prior to the Closing Date, obtain new telephone numbers for the
Facilities in Purchaser's name.
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Section 12.7. NEW ATM/DEBIT CARDS. Purchaser shall, following the Final
Approval Date, but no later than five (5) days prior to the Closing Date,
furnish ATM/Debit cards to Customers who have Deposit Liability accounts to
replace FNB's ATM/Debit cards. Purchaser shall, no later than five (5) days
prior to the Transfer Date, notify affected Customers to destroy FNB's'
ATM/Debit cards as of the Transfer Date and shall notify such Customers of
Purchaser's withdrawal limits immediately following the Closing by form of
notice reasonably acceptable to FNB.
Section 12.8. INSTALLATION OF EQUIPMENT BY PURCHASER. Subsequent to the
Final Approval Date and prior to the Transfer Date, Sovereign shall use its
commercially reasonable efforts to cause FNB to agree to cooperate with and
permit Purchaser, at Purchaser's option and sole cost and expense, to make
provision for the installation of teller and other related equipment in the
Branches; provided, however, that Purchaser shall arrange for the installation
of such equipment at such times and in a manner that does not significantly
interfere with the normal business activities and operation of the Branches.
Section 12.9. DEACTIVATION OF ATMS AND ATM/DEBIT CARDS. On the Transfer
Date, Sovereign shall use its commercially reasonable efforts to cause FNB to
agree to deactivate all ATM/Debit cards issued with respect to all Deposit
Liability accounts and electronically block access of those cards to the Deposit
Liability accounts, to deactivate the ATMs not later than 8:00 a.m. on the
Transfer Date, and to settle point of sale transactions between Purchaser and
FNB for a period of forty-five (45) days after the Closing Date.
Section 12.10. SIGNAGE. During the ten (10) day period immediately
preceding the Transfer Date, Sovereign shall use its commercially reasonable
efforts to cause FNB to agree to cooperate with any commercially reasonable
request of Purchaser directed to accomplishing the installation of signage of
Purchaser's choosing at the Facilities prior to the Closing Date; provided,
however, that all such installations shall be at the sole cost and expense of
Purchaser, that such installation shall be performed in such a manner that does
not significantly interfere with the normal business activities and operations
of the Facilities, that such signage complies with all applicable zoning and
permitting laws and regulations, that such signage has, if necessary, received
the prior approval of the owner or landlord of the Real Property, and that all
55
such installed signage shall be covered in such a way as to be unreadable at all
times prior to the Closing. Immediately following the Closing, Sovereign shall
use its commercially reasonable efforts to cause FNB to agree to cover all of
their signage at FNB's sole cost and expense in such a way as to be unreadable
after the Closing and to commence activities directed to accomplishing the
removal of all of FNB's existing signage at the Facilities and diligently pursue
such activities in good faith so that such removal may be effected as promptly
as practicable following the Closing.
Section 12.11. LETTERS OF CREDIT.
(a) It is the intention of the parties that Purchaser assume
all risks and obligations arising or accruing after the close of business on the
Closing Date with respect to the Letters of Credit. Accordingly, Purchaser
agrees to use its commercially reasonable efforts to obtain prior to the Closing
Date and, in any event, no later than two (2) months following the Closing Date,
the consent of the beneficiary (if necessary) to the assumption of (and the
resulting release of FNB from) the Letters of Credit and/or to issue replacement
letters of credit for those Letters of Credit which are standby Letters of
Credit.
(b) Until such time as there are no Letters of Credit,
Sovereign shall grant to Purchaser (or shall cause FNB to grant to Purchaser,
provided that Sovereign shall not be obligated to use more than its commercially
reasonably efforts in this regard), and Purchaser hereby agrees and commits to
acquire, as of the Closing Date, a participation in the Letters of Credit equal
to one hundred percent (100%) of the amount thereof.
(c) Sovereign agrees (or shall cause FNB to agree, provided
that Sovereign shall not be obligated to use more than its commercially
reasonably efforts in this regard) to the following: That, with respect to each
request by a beneficiary for a draw under or payment of a Letter of Credit, (a
"Request"), Sovereign (or FNB) will (i) promptly provide, by facsimile sent to
Purchaser, copies of documents submitted to support any Request; (ii) wait 24
hours, or such shorter time period as may be required under such Letter of
Credit, after sending the facsimile before acting on a Request; (iii) act in
accordance with ISP98, UCP 500 and/or UCC Article 5, as applicable, in deciding
whether or not to honor the Request unless directed in writing by
56
Purchaser to otherwise honor or dishonor a Request; (iv) provide notice to
Purchaser that the Request has been honored and the amount of the Letter of
Credit Disbursement that may become due pursuant to Subsection 12.11(d), below;
and (v) after honoring a Request, send the documents submitted by the
beneficiary in support of a Request as directed by Purchaser.
(d) In the event that Sovereign (or FNB) notifies Purchaser
that a Letter of Credit Disbursement has been made and that either (A) the
affected Customer has failed to immediately reimburse such Letter of Credit
Disbursement pursuant to its Reimbursement Agreement or (B) the related
Reimbursement Agreement does not require that the affected Customer immediately
reimburse Sovereign (or FNB) for such Letter of Credit Disbursement, then,
Purchaser agrees to pay to Sovereign (or FNB if so directed by Sovereign) on the
day so notified, an amount equal to the Letter of Credit Disbursement; PROVIDED,
HOWEVER, if such notice was not given to Purchaser prior to 2:00 p.m. on such
day, then such amount shall be paid by Purchaser not later than 10:00 a.m. on
the next Business Day. Whenever any amounts are due and payable by Purchaser
pursuant to this Subsection 12.11(d), Sovereign (or FNB) shall submit a draw
request to Purchaser in accordance with the terms of the Purchaser's Letter of
Credit stating the amount due hereunder. Purchaser agrees to pay to Sovereign
(or FNB if so directed by Sovereign) any amounts due under this subsection
12.11(d) by wire transfer of immediately available funds to an account
previously designated by Sovereign (or FNB).
(e) Purchaser also agrees to pay to Sovereign ( or to FNB if
so directed by Sovereign) (i) interest on any and all amounts unpaid by
Purchaser when due under subsection 12.11(d), above, from the date such amounts
become due until payment in full, such interest being payable on demand and
accruing at a fluctuating interest rate per annum (computed on the basis of a
year of 365 days for the actual number of days elapsed) which shall at all times
be equal to the Federal Funds Rate during each day until such amounts are paid
in full (but such fluctuating interest rate shall in no event be higher than the
maximum rate permitted by then applicable law) and (ii) any and all costs and
expenses (including, without limitation, reasonable attorneys' fees) reasonably
incurred by Sovereign (or by FNB) in exercising or enforcing any rights or
performing any obligations under Sections 12.11(d) and (e).
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(f) So long as Purchaser is not in default of its obligations
under this Section 12.11, Sovereign shall promptly remit (or shall use its
commercially reasonable efforts to cause FNB to promptly remit) to Purchaser any
amounts subsequently received from Customers in respect of all Letter of Credit
Disbursements.
(g) Sovereign (or FNB) will not, without the prior written
consent of Purchaser, amend or modify the terms of any Letter of Credit or
Reimbursement Agreement. Purchaser acknowledges and agrees (or shall use its
commercially reasonable efforts to cause FNB to acknowledge and agree) that with
respect to all Letters of Credit the expiry date of which is, by the terms
thereof, automatically extended, (x) Sovereign (or FNB) shall give notice in
accordance with the terms of such Letters of Credit that such expiry date will
not be extended beyond the current expiry date unless Purchaser and Sovereign
(or FNB) mutually agree to permit the extension of such Letter of Credit, and
(y) Sovereign (or FNB) shall not otherwise extend a Letter of Credit without
Purchaser's consent.
(h) Purchaser shall pay to Sovereign a fee with respect to the
Outstanding Credit Exposure computed (on the basis of a year of 365 days for the
actual number of days elapsed) at a rate per annum equal to the rate paid by
Sovereign to FNB pursuant to Section 11.11(j) of the Fleet/Sovereign P&A
Agreement. Such fee shall be payable quarterly in arrears on each June 30,
September 30, December 31 and March 31, commencing on the quarter end
immediately following the Closing Date, and shall be calculated on the average
daily outstanding Credit Exposure during each such period. The initial fee shall
be appropriately pro-rated.
Section 12.12. ACTIONS WITH RESPECT TO ▇▇▇, ▇▇▇▇▇ PLAN AND EMPLOYEE
PENSION PLAN DEPOSIT LIABILITIES.
(a) On or before the Closing Date, Sovereign agrees (and shall
use its commercially reasonable efforts to cause FNB to agree) to (i) resign as
of the close of business on the Closing Date as the trustee or custodian, as
applicable, of each ▇▇▇, ▇▇▇▇▇ Plan and Employee Pension Plan of which it is the
trustee or custodian, (ii) to the extent permitted by the documentation
governing each such ▇▇▇, ▇▇▇▇▇ Plan or Employee Pension Plan and applicable
58
law, appoint Purchaser as successor trustee or custodian, as applicable, of each
such ▇▇▇, ▇▇▇▇▇ Plan or Employee Pension Plan, and Purchaser hereby accepts each
such trusteeship or custodianship under the terms and conditions of Purchaser's
plan documents for its ▇▇▇, ▇▇▇▇▇ Plans and Employee Pension Plan, and assumes
all fiduciary and custodial obligations with respect thereto as of the close of
business on the Closing Date, and (iii) deliver to the ▇▇▇ grantor or ▇▇▇▇▇ Plan
or Employee Pension Plan named fiduciary of each such ▇▇▇, Employee Pension Plan
or ▇▇▇▇▇ Plan such notice of the foregoing as is required by the documentation
governing each such ▇▇▇, Employee Pension Plan or ▇▇▇▇▇ Plan or applicable law.
Purchaser shall be solely responsible for delivering its ▇▇▇, Employee Pension
Plan and ▇▇▇▇▇ Plan documents to the applicable ▇▇▇ grantor and ▇▇▇▇▇ Plan or
Employee Pension Plan named fiduciary, including but not limited to a
beneficiary designation form to be completed by the applicable ▇▇▇ grantor or
▇▇▇▇▇ Plan or Employee Pension Plan participant; provided, however, that in the
event that an ▇▇▇ grantor or ▇▇▇▇▇ Plan or Employee Pension Plan participant
dies before such time as Purchaser receives a properly completed beneficiary
designation form, Sovereign shall use its commercially reasonable efforts to
cause FNB to agree to make available to Purchaser such information as may exist
in FNB's files regarding any beneficiary designation it may have regarding such
decedent. If, pursuant to the terms of the documentation governing any such ▇▇▇
or ▇▇▇▇▇ Plan or Employee Pension Plan or applicable law, (X) FNB is not
permitted to appoint Purchaser as successor trustee or custodian, or the ▇▇▇
grantor or ▇▇▇▇▇ Plan or Employee Pension Plan named fiduciary objects in
writing to such designation, or is entitled to, and does, in fact, name a
successor trustee or custodian other than Purchaser, or (Y) such ▇▇▇ or ▇▇▇▇▇
Plan or Employee Pension Plan includes assets which are not Deposit Liabilities
and are not being transferred to Purchaser or the assumption of such deposit
liabilities included in such ▇▇▇ or ▇▇▇▇▇ Plan or Employee Pension Plan would
result in a loss of qualification of such ▇▇▇ or ▇▇▇▇▇ Plan or Employee Pension
Plan under the Code or applicable IRS regulations, all FNB deposit liabilities
held under such ▇▇▇ or ▇▇▇▇▇ Plan or Employee Pension Plan shall be excluded
from the Deposit Liabilities (such excluded deposits liabilities being herein
called the "Excluded ▇▇▇/▇▇▇▇▇/Employee Pension Plan Deposits"). Upon
appointment as a successor custodian for such ▇▇▇ Deposit Liabilities or as a
successor trustee for such IRAs or ▇▇▇▇▇ Plans or Employee Pension Plans,
Purchaser shall perform the services
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and carry out the duties and obligations required of it under the applicable
plans, the Code and applicable Federal and state laws and regulations.
(b) To the extent the Deposit Liabilities include certain
IRAs, ▇▇▇▇▇ Plans and Employee Pension Plans that are required to make certain
periodic distributions to the ▇▇▇ account owner or ▇▇▇▇▇ Plan or Employee
Pension Plan participant (or beneficiary) either at the account owner's or
participant's request or because the account owner or participant has attained
age 70-1/2, effective as of the Transfer Date, Purchaser agrees to continue to
make such periodic distributions in accordance with the reasonable distribution
instructions forwarded by FNB to Purchaser. Purchaser hereby assumes the
obligation to pay each minimum distribution required by federal law by December
31 of the calendar year in which the Closing occurs and, in consideration
thereof, Sovereign agrees not to withhold the amount of such distributions from
the aggregate amount of the Deposit Liabilities.
Section 12.13. BULK TRANSFER LAWS. Sovereign and Purchaser hereby waive
compliance with any applicable bulk transfer laws. If by reason of any
applicable bulk sales law any claims are asserted by creditors of Sovereign or
FNB, such claims shall be the responsibility of Purchaser in the case of claims
arising under any of the Purchased Assets or Assumed Liabilities.
Section 12.14. ANCILLARY AGREEMENTS. At the Closing, Purchaser will
enter into the Purchaser's Letter of Credit and the Collateral Agency Agreement,
in each case with Sovereign (or, if so directed by Sovereign, with FNB).
ARTICLE XIII
CONDITIONS TO CLOSING
Section 13.1. CONDITIONS TO OBLIGATIONS OF SOVEREIGN. The obligations
of Sovereign under this Agreement are subject to the satisfaction (or, if
applicable, waiver in the sole discretion of Sovereign, except as to the
condition described in 13.1(c)) on or before the Closing Date, of each of the
following conditions:
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(a) All of the covenants and other agreements required by this
Agreement to be complied with and performed by Purchaser and/or Independent on
or before the Closing Date shall have been duly complied with and performed in
all material respects;
(b) The representations and warranties made by Purchaser
and/or Independent herein or in any certificate or other document delivered
pursuant to the provisions hereof or in connection with the transactions
contemplated hereby shall be true and correct in all material respects, on and
as of the Closing Date, with the same force and effect as though such
representations and warranties had been made on the Closing Date provided,
however, that the representations and warranties of Purchaser or Independent
herein or in any certificate or other document delivered pursuant to the
provisions hereof shall be deemed to be true and correct in all material
respects on and as of the Closing Date, with the same force and effect as though
made on the Closing Date, unless the failure to be so true and correct would
have a material adverse effect on Purchaser's ability to consummate the
transactions contemplated by the Agreement;
(c) All Regulatory Approvals shall have been obtained and
shall be Final;
(d) No court or governmental or regulatory authority of
competent jurisdiction shall have enacted, issued, promulgated, enforced or
entered any statute, rule, regulation, judgment, decree, injunction or other
order (whether temporary, preliminary or permanent) which is in effect to
enjoin, or which prohibits, consummation of the transactions contemplated
hereby;
(e) Sovereign shall have received the items to be delivered by
Purchaser pursuant to Section 5.3.;
(f) FNB shall have duly executed and delivered to Sovereign
the Community Bank Amendment and the Cape Cod Supplement, in each case in form
and substance satisfactory to Sovereign; and
(g) The Second Closing and the Third Closing (as such terms
are defined in the Fleet/Sovereign P&A agreement) shall have been consummated
and FNB shall have transferred the Cape Cod Business to Sovereign.
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Section 13.2. CONDITIONS TO OBLIGATIONS OF PURCHASER AND INDEPENDENT.
The obligations of Purchaser under this Agreement are subject to the
satisfaction (or, if applicable, waiver in the sole discretion of Purchaser,
except as to the condition described in Section 13.2(c)) on or before the
Closing Date, of each of the following conditions;
(a) All of the covenants and agreements required by this
Agreement to be complied with and performed by Sovereign on or before the
Closing Date shall have been duly complied with and performed in all material
respects; provided, however, that Sovereign shall be deemed to have duly
complied with and performed such covenants and agreements in all material
respects unless the failure to so perform or comply would have a Material
Adverse Effect;
(b) The representations and warranties made by Sovereign
herein or in any certificate or other document delivered pursuant to the
provisions hereof or in connection with the transactions contemplated hereby
shall be true and correct in all material respects, on and as of the Closing
Date, with the same force and effect as though such representations and
warranties had been made on the Closing Date; provided, however, that the
representations and warranties made by Sovereign herein or in any certificate or
other document delivered pursuant to the provisions hereof shall be deemed to be
true and correct in all material respects on and as of the Closing Date, with
the same force and effect as though made on the Closing Date, unless the failure
to be so true and correct would have a Material Adverse Effect;
(c) The Regulatory Approvals shall have been obtained and
shall be Final;
(d) No court or governmental or regulatory authority of
competent jurisdiction shall have enacted, issued, promulgated, enforced or
entered any statute, rule, regulation, judgment, decree, injunction or other
order (whether temporary, preliminary or permanent) which is in effect to
enjoin, or which prohibits, consummation of the transactions contemplated
hereby;
(e) Purchaser shall have received the items to be delivered by
FNB pursuant to Section 5.2; and
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(f) FNB shall have duly executed and delivered to Sovereign
the Cape Cod Supplement, which Supplement shall be satisfactory to Purchaser in
form and substance.
ARTICLE XIV
DATA PROCESSING
Section 14.1. CONVERSION.
(a) Sovereign shall use its commercially reasonable efforts to
cause FNB to agree to convert account information as to the Deposit Liabilities
and the Loans in accordance with the provisions of SCHEDULE 14.1 of the
Fleet/Rockland P&A Agreement.
(b) All tasks and obligations concerning the provision of data
processing services to or for the Branches after the Closing Date shall be
performed solely and exclusively by Purchaser, except to the extent otherwise
specifically agreed to by FNB. Purchaser acknowledges its assumption of all such
tasks and obligations, and further acknowledges that any delay, failure, or
inability on its part to perform such tasks or comply with such obligations,
except as and to the extent attributable to any delay, failure, or inability on
the part of FNB in performing those tasks or complying with those obligations
specifically agreed to by FNB, shall not result in any liability or obligation
of Sovereign or FNB and shall not affect any of the rights of Sovereign under
this Agreement.
(c) Notwithstanding anything to the contrary set forth in the
Agreement, Purchaser acknowledges and agrees that: (i) Sovereign shall have no
responsibilities or obligations of any kind whatsoever with respect to the
conversion of account information relating to the Cape Cod Business, and (ii)
Sovereign shall not be liable, directly or indirectly, to Purchaser, Independent
or any other Person with respect to any claims or liabilities of any kind
whatsoever which may arise from or relate directly or indirectly to such
conversion.
ARTICLE XV
INDEMNITY
Section 15.1. SOVEREIGN'S INDEMNITY. Sovereign shall indemnify, hold
harmless and defend Purchaser, its Affiliates, and their respective successors,
permitted assigns, directors,
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shareholders, officers, agents and employees (collectively, the "Purchaser
Indemnified Parties") from and against all claims, losses, liabilities, demands
and obligations of any nature whatsoever (including reasonable legal fees and
expenses) (collectively, "Damages") which Purchaser or any of its Affiliates or
their respective successors, permitted assigns, directors, shareholders,
officers, agents or employees shall receive, suffer or incur, arising out of or
resulting from:
(a) Any liability of Sovereign which is not an Assumed
Liability;
(b) The breach of any representation or warranty made by
Sovereign in this Agreement; or
(c) The breach of any covenant or other agreement made by
Sovereign in this Agreement.
Section 15.2. INDEPENDENT INDEMNITY. Independent shall indemnify, hold
harmless and defend Sovereign, its Affiliates and their respective successors,
permitted assigns, directors, shareholders, officers, agents and employees from
and against all Damages which Sovereign or any of its Affiliates or their
respective successors, permitted assigns, directors, shareholders, officers,
agents or employees shall receive, suffer or incur, arising out of or resulting
from:
(a) Any Assumed Liability;
(b) Any actions taken or omitted to be taken by Purchaser from
and after the date hereof with respect to the Consumer Bank Employees or the
Consumer Bank Related Employees, and any suits or proceedings commenced in
connection therewith;
(c) Any actions taken or omitted to be taken by Purchaser
after the Closing and relating to the Purchased Assets, Assumed Liabilities and
the Transferred Employees, and any suits or proceedings commenced in connection
therewith (other than proceedings to prevent or limit the consummation of the
transactions contemplated by this Agreement);
(d) The breach of any representation or warranty made by
Purchaser or Independent in this Agreement;
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(e) The breach of any covenant or other agreement made by
Purchaser or Independent in this Agreement; and
(f) Any claims arising under any of the Purchased Assets or
Assumed Liabilities made by creditors of Sovereign or FNB under any applicable
bulk sales laws.
Section 15.3. INDEMNIFICATION PROCEDURE. If a party entitled to
indemnification hereunder ("Indemnified Party") is aware that a claim, demand or
other circumstance exists that has given or may reasonably be expected to give
rise to a right of indemnification under this Article XV (whether or not the
amount of the claim is then quantifiable), such Indemnified Party shall promptly
give written notice thereof to the other party ("Indemnitor"), and the
Indemnified Party will thereafter keep the Indemnitor reasonably informed with
respect thereto, provided that failure of the Indemnified Party to give the
Indemnitor prompt notice as provided herein shall not relieve the Indemnitor of
its obligations hereunder except to the extent, if any, that the Indemnitor's
rights shall have been prejudiced or the Indemnitor's liability shall have been
materially increased thereby. In case any such action, suit or proceeding is
brought against an Indemnified Party, the Indemnitor shall be entitled to
participate in (and, in its discretion, to assume) the defense thereof with
counsel reasonably satisfactory to the Indemnified Party, provided, however,
that the Indemnified Party shall be entitled to participate in any such action,
suit or proceeding with counsel of its own choice at the expense of the
Indemnitor if, in the good faith judgment of the Indemnified Party's counsel,
representation by the Indemnitor's counsel may present a conflict of interest or
there may be defenses available to the Indemnified Party which are different
from or in addition to those available to the Indemnitor. The Indemnitor will
not settle any claim, action, suit or proceeding which would give rise to the
Indemnitor's liability under its indemnity unless such settlement includes as an
unconditional term thereof the giving by the claimant or plaintiff of a release
of the Indemnified Party, in form and substance reasonably satisfactory to the
Indemnified Party and its counsel, from all liability with respect to such
claim, action, suit or proceeding. If the Indemnitor assumes the defense of any
claim, action, suit or proceeding as provided in this Section 15.3, the
Indemnified Party shall be permitted to join in the defense thereof with counsel
of its own selection and at its own expense. If the Indemnitor shall not assume
the defense of any claim, action, suit or proceeding, the
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Indemnified Party may defend against such claim, action, suit or proceeding in
such manner as it may deem appropriate, provided that an Indemnified Party shall
not settle any claim, action, suit or proceeding which would give rise to the
Indemnitor's liability under its indemnity without the prior written consent of
the Indemnitor, which consent shall not be unreasonably withheld.
Section 15.4. LIMITATIONS ON LIABILITY. Notwithstanding anything to the
contrary contained in this Article XV, no party shall be entitled to
indemnification pursuant to Section 15.1(b) or 15.2(d) until its aggregate
Damages shall be in excess of One Hundred Seventy-Five Thousand Dollars
($175,000), at which time such party shall be entitled to indemnification for
the full amount of its Damages to the extent such Damages exceed such amount. In
no event shall the Damages payable by Sovereign in the aggregate exceed Five
Million Dollars ($5,000,000) and in no event shall any party be entitled to any
incidental, consequential, special, exemplary or punitive Damages.
Section 15.5. GENERAL.
(a) Each Indemnified Party shall be obligated in connection
with any claim for indemnification under this Article XV to use all commercially
reasonable efforts to obtain any insurance proceeds available to such
Indemnified Party with regard to the applicable claims. The amount which any
Indemnitor is or may be required to pay to any Indemnified Party pursuant to
this Article XV shall be reduced (retroactively, if necessary) by any insurance
proceeds or other amounts actually recovered (net of any direct relevant
collections costs) by or on behalf of such Indemnified Party in reduction of the
related Damages. If an Indemnified Party shall have received the payment
required by this Agreement from the Indemnitor in respect of Damages and shall
subsequently receive insurance proceeds or other amounts in respect of such
Damages, then such Indemnified Party shall promptly repay to the Indemnitor a
sum equal to the amount of such insurance proceeds or other amounts actually
received (net of any direct relevant collection costs)
(b) In addition to the requirements of Paragraph (a) above,
each Indemnified Party shall be obligated in connection with any claim for
indemnification under this Article XV
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to use all commercially reasonable efforts to mitigate Damages upon and after
becoming aware of any event which could reasonably be expected to give rise to
such Damages.
(c) Subject to the rights of existing insurers of an
Indemnified Party, an Indemnitor shall be subrogated to any right of action
which the Indemnified Party may have against any other Person with respect to
any matter giving rise to a claim for indemnification from such Indemnitor
hereunder.
(d) Except for the parties' rights to specific performance and
injunctive relief as described in Section 17.14, the indemnification provided in
this Article XV shall be the exclusive post-Closing Date remedy available to any
Indemnified Party with respect to any breach of any representation, warranty,
covenant or agreement made by Purchaser or Sovereign in this Agreement. The
parties hereto further acknowledge that no indemnity shall be payable for any
Damages with respect to any breach of representations or warranties in this
Agreement if prior to Closing such party receives a written notice from the
other party (i) disclosing such breach or breaches and (ii) informing such party
that such breach or breaches constitute a Material Adverse Effect.
(e) All indemnification payments under this Article XV shall
be deemed adjustments to the Purchase Price as defined in Section 3.1 of Article
III.
Section 15.6. SURVIVAL. All representations, warranties and covenants
contained in or made pursuant to this Agreement shall survive the execution and
delivery of the Agreement and shall continue in full force and effect for a
period of one (1) year after the Closing Date and thereafter shall terminate,
except as to any claim for which written notice shall have been given prior to
such date; and provided, further, that all covenants or agreements which by
their terms are to be performed after the first anniversary of the Closing Date
shall survive until fully discharged.
Section 15.7. CERTAIN LIMITATIONS. Notwithstanding anything to the
contrary set forth in this Agreement, Sovereign shall be liable to the Purchaser
Indemnified Parties for indemnification under this Article XV in respect of any
breach of the representations and warranties made by it in Section 6.1 above
(and recourse may be had against Sovereign in respect
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of any such breach) only if and to the extent that Sovereign has recourse
against Fleet pursuant to a claim for indemnification under Article XIV of the
Fleet/Sovereign P&A Agreement. Any such claim which Purchaser may have against
Sovereign for which Sovereign has a claim for indemnification against Fleet is
hereinafter referred to as a "Purchaser Pass-Through Claim." (Purchaser
acknowledges that any claim which Sovereign may assert against Fleet under such
Article XIV is subject to all of the limitations on Fleet's liability set forth
in such Article, including, without limitation, the limitations set forth in
Section 14.6 thereof.) If requested to do so by Purchaser, Sovereign shall, at
Sovereign's option: (a) assert in Purchaser's name and on Purchaser's behalf any
Purchaser Pass-Through Claim against Fleet at Purchaser's sole cost and expense,
provided that: (i) that such Claim is BONA FIDE, and (ii) Purchaser delivers to
Sovereign in writing its undertaking to defend and indemnify Sovereign against
and to hold Sovereign harmless from any claims and liabilities which may be
asserted against Sovereign as a consequence of Sovereign's assertion of the
Purchaser Pass-Through Claim against Fleet, such undertaking to be reasonably
satisfactory to Sovereign in form and substance, or (b) assign such Claim to
Purchaser, provided that the consent of any third Person to such assignment is
not required or, if required, is obtained. All claims for indemnification which
Sovereign may have against Fleet shall be aggregated with all Purchaser
Pass-Through Claims for purposes of applying the limitations set forth in
Section 14.6 of the Fleet/Sovereign P&A Agreement and any recovery shall be
shared by Sovereign and Purchaser in proportion to their respective claims,
provided that Sovereign and Purchaser shall each be entitled to be reimbursed in
full for the expenses incurred by it in securing any recovery before any
allocation of such recovery is made between them. For example, if Sovereign has
a claim for indemnification against Fleet in the amount of $12 million and
Purchaser has a Purchaser Pass-Through Claim in the amount of $6 million (such
that the aggregate amount of the claims against Fleet is $18 million), and if
Sovereign secures a recovery from Fleet in the amount of $3 million and
Sovereign and Purchaser collectively incur expenses of $600,000 in securing such
recovery, Purchaser would be entitled to receive $800,000 of such recovery [($3
million, less $600,000) x 6/18]. Purchaser agrees to cooperate fully with
Sovereign in pursuing any such claim against Fleet and to take all such actions
in connection therewith as Sovereign may from time to time reasonably request.
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ARTICLE XVI
POST-CLOSING MATTERS
Section 16.1. FURTHER ASSURANCES. From and after the Closing Date:
(a) Except as specifically provided otherwise herein,
Sovereign shall assist (and shall use its commercially reasonable efforts to
cause FNB to agree to assist) Purchaser in the orderly transition of the
operations of the Cape Cod Business and shall give (and shall use its
commercially reasonable efforts to cause FNB to give) such further assurances
and execute, acknowledge and deliver all such instruments as may be necessary
and appropriate to effectively vest in Purchaser title in the Purchased Assets
in the manner contemplated hereby; provided that neither Sovereign nor FNB need
incur any out-of-pocket costs or expenses in connection with the agreements in
this Section 16.1, unless such costs or expenses are reimbursed by Purchaser.
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(b) To the extent that any consent of FNB is required for the
assignment by Sovereign to Purchaser of the benefit of any covenant of FNB made
to Sovereign in the Fleet/Sovereign P&A Agreement and such consent has not been
obtained, Sovereign will, at Purchaser's request, enforce Sovereign's rights
against FNB under the Fleet/Sovereign P&A Agreement for the benefit of Purchaser
at the cost and expense of Purchaser, provided that: (i) the enforcement of such
rights by it would not be commercially unreasonable or impractical; and (ii)
Purchaser delivers to Sovereign in writing its undertaking to defend and
indemnify Sovereign against and to hold Sovereign harmless from any claims and
liabilities which may be asserted against Sovereign as a consequence of
Sovereign's effort to enforce such rights against FNB, such undertaking to be
reasonably satisfactory to Sovereign in form and substance. Where Sovereign has
undertaken in this Agreement to use commercially reasonable efforts to cause FNB
to take action for the benefit of Purchaser, if Sovereign is unsuccessful and
the action is of a type which could reasonably and practically be taken by
Sovereign as a result of the Purchased Assets having been sold to Sovereign
under the Fleet/Sovereign P&A Agreement, Sovereign will take such action for the
benefit of Purchaser and the parties shall each bear one-half of the
out-of-pocket expenses incurred by Sovereign in taking such action.
(c) Except as specifically provided otherwise herein,
Purchaser shall give such further assurances to Sovereign and to FNB and shall
execute, acknowledge and deliver all such acknowledgments and other instruments
and take such further action as may be necessary and appropriate to effectively
relieve and discharge Sovereign and FNB from any obligations remaining with
respect to the Deposit Liabilities or other Assumed Liabilities; provided that
Purchaser need not incur any out-of-pocket costs or expenses in connection with
its agreements in this Section 16.1 unless such out-of-pocket costs or expenses
are reimbursed by Sovereign or FNB.
Section 16.2. ACCESS TO AND RETENTION OF BOOKS AND RECORDS. For a
period of six (6) years from the Closing Date, Purchaser shall provide to FNB
(and Sovereign shall use its commercially reasonable efforts to cause FNB to
agree to provide to Purchaser) commercially reasonable access to any books and
records relating to the Purchased Assets and the Assumed Liabilities, and the
requesting party, at its own expense, may make copies and extracts when such
70
copies and extracts are required by regulatory authorities, for litigation
purposes, or for tax or accounting purposes; provided that in the event that as
of the end of such period, any tax year of Sovereign or FNB is under examination
by any taxing authority, such books and records shall be maintained by Purchaser
until a final determination of the tax liability of Sovereign or FNB for that
year has been made. If such copies or extracts require use of a party's
equipment or facilities, the user shall reimburse the other party for all costs
incurred, including without limitation employee expenses.
Section 16.3. DEPOSIT HISTORIES. In case of any dispute with or inquiry
by any Customer whose Deposit Liability account is included in the Assumed
Liabilities, which dispute or inquiry relates to the servicing of such account
by FNB prior to the date for which a deposit history has been provided to
Purchaser, Sovereign will use its commercially reasonable efforts to cause FNB
to agree to provide Purchaser, where available and to the extent reasonably
requested by Purchaser and not already provided to Purchaser, information
regarding the Deposit Liability account and copies of pertinent documents or
instruments with respect to such dispute or inquiry so as to permit Purchaser to
respond to such Customer within a period of time and in a manner which would
comply with standard banking practices and customs and all applicable laws.
ARTICLE XVII
MISCELLANEOUS
Section 17.1. EXPENSES.
(a) Except as otherwise provided herein, Sovereign and
Purchaser shall each pay all of their own out-of-pocket expenses in connection
with this Agreement, including investment banking, appraisal, accounting,
consulting, professional and legal fees, if any, whether or not the transactions
contemplated by this Agreement are consummated.
(b) Purchaser shall pay all (i) recording, filing or other
fees, cost and expenses (including without limitation fees, costs and expenses
for (w) preparation of title commitments, abstracts or searches, surveys,
inspections, environmental audits or other investigations, (x) filing of any
forms (including without limitation tax forms) with governmental authorities in
connection with the transfer of the Real Property or Fixed Assets, (y) recording
instruments or
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documents evidencing any transfers of interests in real property), and (z) any
real property transfer stamps or taxes imposed on any transfers or interest in
Real Property, provided that Sovereign shall use its commercially reasonable
efforts to cause FNB to agree to pay all such fees, costs or expenses with
respect to matters described in (x), (y) and (z) which FNB is required by law to
pay and which are customarily paid by a seller of property in the applicable
jurisdiction; and (ii) costs and expenses relating to the preparation, execution
and recording of assignments of mortgages, financing statements, notes, security
agreements or other instruments applicable to or arising in connection with the
transfer, assignment or assumption of the Purchased Assets and Assumed
Liabilities including, but not limited to, fees payable to the SBA in connection
with the transfer to Purchaser of the SBA Loans.
Section 17.2. TRADE NAMES AND TRADEMARKS.
(a) The Purchaser acknowledges and agrees that notwithstanding
anything to the contrary contained herein, it has, and following the Closing
shall have, no interest in or to the names "Fleet," "BankBoston," "Fleet Boston"
or any trade name, trademark or service ▇▇▇▇, logo or corporate name of FNB,
Fleet, BankBoston or any of their respective Affiliates, including, without
limitation, the tradenames and trademarks listed on SCHEDULE 17.2 of the
Fleet/Rockland P&A Agreement. After the Closing Date, Independent shall not
permit Purchaser or any of its Affiliates to use any of the trade names,
trademarks, service marks, logos or corporate names of FNB, Fleet, BankBoston or
any of their respective Affiliates including, without, limitation, the
tradenames and trademarks listed on SCHEDULE 17.2 of the Fleet/Rockland P&A
Agreement.
(b) From and after the Closing, Purchaser agrees not to use
any forms or other documents bearing any name or logo of FNB, or the name or
logo of any Affiliate of FNB, without the prior written consent of FNB, which
consent may be denied or given in FNB's sole discretion. If such consent is
given, Purchaser hereby agrees that all forms or other documents to which such
consent relates will be stamped or otherwise marked in such a way that
identifies Purchaser as the party using the form or document.
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Section 17.3. TERMINATION; EXTENSION OF CLOSING DATE. This Agreement
shall terminate and shall be of no further force or effect as between the
parties hereto, except as to the liability for actual direct damages due to a
willful breach of any material representation, warranty or covenant occurring or
arising prior to the date of termination, upon the occurrence of any of the
following:
(a) Upon mutual agreement of the parties;
(b) Upon written notice by either Purchaser or Sovereign to
the other immediately upon receipt by Purchaser or Sovereign of notice from any
governmental authority that Purchaser, Sovereign or FNB, as the case may be, has
been denied any Regulatory Approval by Final order;
(c) Upon written notice by Sovereign to Purchaser, if the
Closing has not occurred by 12:00 noon on August 4, 2000, unless Sovereign,
Purchaser and FNB shall have agreed to postpone the Closing Date and the date on
which the conversion of account information is to occur.
(d) By either Purchaser or Sovereign (provided that the
terminating party is not then in material breach of any representation,
warranty, covenant or other agreement contained herein) if there shall have been
a material breach of any of the representations, warranties, covenants or other
agreements set forth in this Agreement on the part of the other party, which
breach is not cured within thirty (30) days following written notice to the
party committing such breach, or which breach, by its nature, cannot be cured
prior to the Closing; provided, however, that Purchaser shall not have the right
to terminate this Agreement pursuant to this Section 17.3(d) unless the breach
of representation, warranty, covenant, or other agreement together with all
other such breaches would have a Material Adverse Effect;
(e) Upon written notice by Purchaser to Sovereign in the event
that FNB does not duly execute and deliver to Sovereign on or before June 9,
2000 the Cape Cod Supplement in form and substance satisfactory to Purchaser in
its sole and absolute discretion;
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(f) Upon written notice by Sovereign to Purchaser in the event
that FNB does not duly execute and deliver to Sovereign on or before June 9,
2000 the Community Bank Amendment and the Cape Cod Supplement, in each case in
form and substance satisfactory to Sovereign in its sole and absolute
discretion;
(g) Upon written notice by either Sovereign or Purchaser to
the other in the event that Purchaser has not obtained the Purchaser Regulatory
Approvals on or before June 20, 2000;
(h) Upon written notice by Sovereign to Purchaser in the event
that FNB and/or Fleet terminates, repudiates or fails to perform its obligations
under the Fleet/Sovereign P&A Agreement, the Community Bank Letter Agreement,
the Community Bank Amendment or the Cape Cod Supplement; or
(i) Upon written notice by Sovereign to Purchaser in the event
that Sovereign is advised by the Office of Thrift Supervision or any other
regulator that it should not consummate the transactions contemplated by this
Agreement given at any time on or before June 20, 2000.
Section 17.4. MODIFICATION AND WAIVER. No modification of any provision
of this Agreement shall be binding unless in writing and executed by the party
or parties sought to be bound thereby. Performance of or compliance with any
covenant given herein or satisfaction of any condition to the obligations of
either party hereunder may be waived by the parties to whom such covenant is
given or whom such condition is intended to benefit, except as otherwise
provided in this Agreement or to the extent any such condition is required by
law; provided, that, any such waiver must be in writing.
Section 17.5. BINDING EFFECT; ASSIGNMENT. This Agreement shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective successors and permitted assigns; provided, however, that neither
this Agreement nor any rights, privileges, duties or obligations of the parties
hereto may be assigned without the prior written consent of the other parties
hereto.
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Section 17.6. CONFIDENTIALITY.
(a) From and after the date hereof, the parties hereto and
their Affiliates shall keep confidential the terms of this Agreement and the
negotiations relating hereto and all documents and information obtained by a
party from another party in connection with the transactions contemplated
hereby, except (i) to the extent this Agreement and such negotiations need to be
disclosed to obtain a Regulatory Approval, (ii) for disclosures made to FNB or
other Persons in accordance with the terms of this Agreement, and (iii) to the
extent required by applicable law, regulations or rules of the National
Association of Securities Dealers, any applicable national securities exchange
or the Securities and Exchange Commission. This Section shall survive any
termination of this Agreement.
(b) Except as otherwise required by law, regulations or rules,
including the rules of any self-regulatory organization (as defined in the
Securities Exchange Act of 1934, as amended), the parties hereto shall each
furnish to the other the text of all notices and communications, written or
oral, proposed to be sent by the furnishing party regarding the transactions
contemplated hereby. Except as otherwise required by law, regulations or rules
of the National Association of Securities Dealers or any national stock
exchange, the furnishing party shall not send or transmit such notices or
communications or otherwise make them public unless and until the consent of the
other parties is received, which consent shall not be unreasonably withheld or
delayed. This section shall survive any termination of this Agreement.
(c) Purchaser and Sovereign shall issue mutually agreed upon
press releases on the date of this Agreement and on the Closing Date or the
first Business Day thereafter.
Section 17.7. ENTIRE AGREEMENT; GOVERNING LAW. This Agreement, together
with the exhibits and schedules attached hereto and made a part hereof, contains
the entire agreement between the parties hereto with respect to the transactions
covered and contemplated hereunder, and supersedes all prior agreements or
understandings between the parties hereto relating to the subject matter hereof.
This Agreement shall be governed by and construed in accordance with the laws of
the Commonwealth of Massachusetts (without reference to conflicts or choice of
law provisions).
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Section 17.8. CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL. EACH PARTY
HERETO, TO THE EXTENT IT MAY LAWFULLY DO SO, HEREBY SUBMITS TO THE JURISDICTION
OF THE COURTS OF THE COMMONWEALTH OF MASSACHUSETTS AND THE UNITED STATES
DISTRICT COURT FOR THE DISTRICT OF MASSACHUSETTS, AS WELL AS TO THE JURISDICTION
OF ALL COURTS FROM WHICH AN APPEAL MAY BE TAKEN OR OTHER REVIEW SOUGHT FROM THE
AFORESAID COURTS, FOR THE PURPOSE OF ANY SUIT, ACTION OR OTHER PROCEEDING
ARISING OUT OF SUCH PARTY'S OBLIGATIONS UNDER OR WITH RESPECT TO THIS AGREEMENT
OR ANY OF THE AGREEMENTS, INSTRUMENTS OR DOCUMENTS CONTEMPLATED HEREBY (OTHER
THAN THE CONFIDENTIALITY AGREEMENT), AND EXPRESSLY WAIVES ANY AND ALL OBJECTIONS
IT MAY HAVE AS TO VENUE IN ANY OF SUCH COURTS.
EACH PARTY HERETO HEREBY WAIVES TRIAL BY JURY IN ANY ACTION, PROCEEDING
OR COUNTERCLAIM ARISING OUT OF OR IN ANY WAY CONCERNED WITH THIS AGREEMENT OR
ANY OF THE AGREEMENTS, INSTRUMENTS OR DOCUMENTS CONTEMPLATED HEREBY. NO PARTY
HERETO, NOR ANY ASSIGNEE OR SUCCESSOR OF A PARTY HERETO SHALL SEEK A JURY TRIAL
IN ANY LAWSUIT, PROCEEDING, COUNTERCLAIM OR ANY OTHER LITIGATION PROCEDURE BASED
UPON, OR ARISING OUT OF, THIS AGREEMENT OR ANY OF THE AGREEMENTS, INSTRUMENTS OR
DOCUMENTS CONTEMPLATED HEREBY. NO PARTY WILL SEEK TO CONSOLIDATE ANY SUCH
ACTION, IN WHICH A JURY TRIAL HAS BEEN WAIVED, WITH ANY OTHER ACTION IN WHICH A
JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED. THE PROVISIONS OF THIS HAVE BEEN
FULLY DISCUSSED BY THE PARTIES HERETO, AND THE PROVISIONS SHALL BE SUBJECT TO NO
EXCEPTIONS. NO PARTY HAS IN ANYWAY AGREED WITH OR REPRESENTED TO ANY OTHER PARTY
THAT THE PROVISIONS OF THIS SECTION WILL NOT BE FULLY ENFORCED IN ALL INSTANCES.
Section 17.9. WAIVER OF CERTAIN DAMAGES. Each of the parties hereto to
the fullest extent permitted by law irrevocably waives any rights that they may
have to punitive, special,
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incidental, exemplary or consequential damages in respect of any litigation
based upon, or arising out of, this agreement or any related agreement or any
course of conduct, course of dealing, statements or actions of any of them
relating thereto.
Section 17.10. SEVERABILITY. In the event that any provision of this
shall be held invalid, illegal, or unenforceable in any respect, the validity,
legality, and enforceability of the remaining provisions contained in this
Agreement shall not in any way be affected or impaired thereby, and this
Agreement shall otherwise remain in full force and effect.
Section 17.11. COUNTERPARTS. This Agreement may be executed in one or
more counterparts, all of which shall be considered one and the same agreement
and shall become effective when one or more counterparts have been signed by
each of the parties hereto.
Section 17.12. NOTICES. All notices, consents, requests, instructions,
approvals, waivers, stipulations and other communications provided for herein to
be given by one party hereto to the other party shall be deemed validly given,
made or served, if in writing and delivered personally or sent by certified
mail, return receipt requested, nationally recognized overnight delivery
service, or facsimile transmission, if to Sovereign addressed to:
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Chief Accounting Officer
Sovereign Bank
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile number: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇▇ & ▇▇▇
▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile number: (▇▇▇) ▇▇▇-▇▇▇▇
and if to Purchaser addressed to:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Executive Vice President
Rockland Trust Company
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile Number: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇▇▇ & Worcester LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile Number: (▇▇▇) ▇▇▇-▇▇▇▇
Notice by certified mail shall be deemed to be received three (3)
Business Days after mailing of the same. Either party may change the persons or
addresses to whom or to which notices may be sent by written notice to the
others.
Section 17.13. INTERPRETATION. Article titles, headings to sections and
any table of contents are inserted for convenience of reference only and are not
intended to be a part of or to affect the meaning or interpretation hereof. The
Schedules and Exhibits referred to herein shall be construed with and as an
integral part of this Agreement to the same extent as if they were set forth
verbatim herein. As used herein, "include," "includes" and "including" are
deemed to be followed by "without limitation" whether or not they are in fact
followed by such words or words of like import; "writing," "written" and
comparable terms refer to printing, typing , lithography and other means of
reproducing words in a visible form; references to a person are also to its
successors and assigns; except as the context may otherwise require, "hereof,"
"herein," "hereunder" and comparable terms refer to the entirety hereof and not
to any particular article, section or other subdivision hereof or attachment
hereto; references to any gender include the other; except as the context may
otherwise require, the singular includes the plural and vice versa; references
to any agreement or other document are to such agreement or document as amended
and supplemented from time to time; references to "Article," "Section" or
another subdivision or to an "Exhibit" or "Schedule" are to an article, section
or subdivision hereof or an "Exhibit" or "Schedule." The parties acknowledge
that each party and its counsel have reviewed and revised this Agreement and
that the normal rule of construction to the effect that any ambiguities are to
be resolved against the drafting party shall not be employed in the
interpretation, construction and enforcement of this Agreement or any amendment,
schedule or exhibit hereto.
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Section 17.14. SPECIFIC PERFORMANCE. The parties hereto acknowledge
that monetary damages could not adequately compensate either party hereto in the
event of a breach of this Agreement by the other, that the non-breaching party
would suffer irreparable harm in the event of such breach and that the
non-breaching party shall have, in addition to any other rights or remedies it
may have at law or in equity, specific performance and injunctive relief as a
remedy for the enforcement hereof.
Section 17.15. NO THIRD PARTY BENEFICIARIES. Except as otherwise
expressly provided herein, the parties hereto intend that this Agreement shall
not benefit or create any right or cause of action in or on behalf of any person
other than the parties hereto. No future or present employee or customer of
either of the parties or of FNB nor their affiliates, successors or assigns or
other person shall be treated as a third party beneficiary in or under this
Agreement.
Section 17.16. SURVIVAL. Except for Articles XV and XVI and Sections
17.1 and 17.2 and Sections 17.4 through 17.16 no representations, warranties,
covenants or agreements made by the parties herein shall survive termination of
this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed, by their duly authorized representatives, as of and
effective the day and year first above written.
SOVEREIGN BANK
By:
----------------------------------------
Name:
-------------------------------
Title:
------------------------------
ROCKLAND TRUST COMPANY
By:
----------------------------------------
Name:
-------------------------------
Title:
------------------------------
INDEPENDENT BANK CORP.
By:
----------------------------------------
Name:
-------------------------------
Title:
------------------------------
SCHEDULE 6.8
REGULATORY APPROVALS
FNB REGULATORY APPROVALS
Shall mean all approvals required to be obtained by FNB or
Fleet, including the approval of the following:
United States Department of Justice
Board of Governors of the Federal Reserve System
Massachusetts Attorney General
PURCHASE REGULATORY APPROVALS
Purchaser must obtain the following approvals:
Federal Deposit Insurance Corporation
Massachusetts Division of Banks
SOVEREIGN REGULATORY APPROVALS
Sovereign must obtain the following approvals:
Office of Thrift Supervision
1