EXHIBIT 10.9
PURCHASE AND ASSUMPTION AGREEMENT
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Agreement dated as of April 12, 1999, among PM Holdings, Inc., a Connecticut
corporation with its main office in Hartford, Connecticut, ("PMH") and PM Trust
Holding Company, a Connecticut corporation with its main office in Hartford,
Connecticut, ("PMTH") (which companies are collectively referred to herein as
"Seller") and ▇▇▇▇▇▇▇ Bank, a state-chartered savings and loan association with
its main office in Putnam, Connecticut ("CB"), Lake Sunapee Bank, fsb, a
federally chartered savings bank with its main office in Newport, New Hampshire
("LSB") and Mascoma Savings Bank, a federally chartered savings bank with its
main office in Lebanon, New Hampshire ("MSB") (which banks are collectively
referred to herein as the "Purchaser").
WHEREAS, PMH, PMTH and Purchaser have entered into a Stock Purchase Agreement
with Sun Life Assurance Company of Canada (USA), a Delaware corporation with its
principal place of business in Wellesley, Massachusetts ("Sun") and New London
Trust, FSB, a federally chartered savings bank with its main office in New
London, New Hampshire ("Target") and a wholly-owned subsidiary of Sun, of even
date ("Stock Purchase Agreement"), a true copy of which is attached hereto as
Exhibit A, which Stock Purchase Agreement provides for the sale to Seller of all
of the capital stock of Target;
WHEREAS, Seller desires to sell, and Purchaser desires to acquire, in
accordance with the terms and provisions of this Agreement, immediately after
the consummation of the transactions contemplated in the Stock Purchase
Agreement, all of the assets and liabilities of Target, other than Target's
trust business ("Trust Business") as further specified in Schedules 2.1(b) and
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2.2(b), such that only the assets and liabilities (including tangible net equity
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of $2.5 million) used in Target's Trust Business will remain in Target (the
other assets and liabilities of Target being hereinafter referred to as the
"Bank Business" as further specified in Schedules 2.1(a) and 2.2(a));
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WHEREAS, CB, LSB and MSB have entered into a certain Asset and Liability
Allocation Agreement ("Allocation Agreement"), a true copy of which is attached
hereto as Exhibit B, of even date herewith providing for the division of the
assets and liabilities of Target used in its Bank Business among themselves; and
WHEREAS, each of the parties acknowledges that the parties are relying on
each other to fulfill their individual obligations hereunder so that Target may
be purchased and its Bank Business and Trust Business distributed among the
parties as provided in this Agreement and that if any one of the parties fails
to perform its obligations, it might jeopardize the ability of the other parties
to consummate the transaction.
NOW, THEREFORE, in consideration of the premises and the mutual promises and
covenants contained herein, subject to the terms and conditions set forth
herein, Seller and Purchaser agree as follows:
ARTICLE I
DEFINITIONS
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Section 1.1. Defined Terms. As used herein, the following terms shall have
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the following meanings:
"Accrued Interest" shall mean as of any date (a) with respect to the
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Deposit Liabilities, the interest that has been accrued but not paid or credited
on the Deposit Liabilities, and (b) with respect to the Loans, the interest,
fees, costs and other charges that have accrued on or been charged to the Loans
but not paid by the applicable borrower, or a guarantor or surety therefor, or
otherwise collected by offset or recourse to collateral for the applicable Loan.
"Affiliate" shall mean with respect to a specified Person, any other Person
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who or which, directly or indirectly, controls, is controlled by or is under
common control with, such specified Person. As used in this definition, the
term "control" shall mean the power to direct or cause the direction of the
management and policies of such Person whether through ownership of voting
securities, by contract or otherwise.
"Allocation Agreement" shall have the meaning specified in the Preamble.
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"Assignment and Assumption Agreement" shall have the meaning set forth in
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Section 5.3(d).
"Assumed Severance Obligations" shall mean Target's obligations described
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on Schedule 1.1(a) attached hereto.
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"Bank Assets" shall have the meaning specified in Section 2.1(a).
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"Bank Business" shall have the meaning specified in the Preamble and shall
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include all Bank Assets set forth in Schedule 2.1(a) and all Bank Liabilities
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set forth in Schedule 2.2(a).
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"Bank Customers" shall mean the persons named as the owners of the deposit
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accounts relating to the Deposit Liabilities, the obligors under the Loans,
persons who are party to Safe Deposit Agreements with Target and any other
persons who are engaged in a Bank Business with Target.
"Bank Employees" shall mean the employees of Target who are employed by
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Target at the Closing Date other than Trust Employees and Corporate Center
Employees.
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"Bank Liabilities" shall have the meaning specified in Section 2.2(a).
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"Banking Office" shall mean any one of Target's banking offices or other
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premises used in its Bank Business (including automated teller machine premises)
listed on Schedule 1.1(b) attached hereto.
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"Banking Office Leases" shall mean the leases for the Banking Offices
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listed on Schedule 1.1(c) attached hereto.
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"Borrowings" shall have the meaning specified in Section 2.2(a)(viii).
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"Capital Account" shall have the meaning specified in Section 2.1(a).
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"Cash" shall mean all ▇▇▇▇▇ cash, vault cash, teller cash, automated teller
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machine cash and prepaid postage in each case as of the close of business at the
respective Banking Office (6:00 p.m. for each automated teller machine) on the
Closing Date, as determined by an audit conducted jointly by one or more
employees of Target and one or more employees of Purchaser.
"CB" shall have the meaning specified in the Preamble.
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"Closing" shall mean the consummation of the purchase of the Bank Business
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by the Purchaser pursuant hereto.
"Closing Date" shall have the meaning specified in Section 5.1.
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"Corporate Center Employee" shall mean any employee providing services to
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both the Bank Business and Trust Business listed on Schedule 1.1(d) attached
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hereto, any employees hired to replace any such employees that may leave
Target's employment between the date of this Agreement and the Closing Date and
any employees that may be hired before the Closing Date to fill corporate center
positions that are open as of the date of this Agreement, who are employed by
Target as of the Closing Date.
"Day Care Center" shall mean the day care center operated by Target at 4
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▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇.
"Effective Time" shall have the meaning specified in Section 5.2.
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"Excluded IRAs" shall have the meaning specified in Section 2.3(a).
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"Deposit Liabilities" or "Deposit Liability" shall mean deposit liabilities
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with respect to accounts, which are transferred by Target, as of the close of
business on the Closing
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Date, which are defined as deposits in the Federal Deposit Insurance Act, 12
U.S.C. 1813, including in each case collected and uncollected deposits plus
Accrued Interest.
"FHLB Stock" shall mean capital stock of the Federal Home Loan Bank of
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Boston owned by Target on the Closing Date.
"Final" as applied to any governmental order or action, shall mean that
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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
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contemplated hereby, the date upon which the last of the following has occurred:
(a) all Regulatory Approvals have been obtained; (b) the publication of all
regulatory notices; (c) the filing of all regulatory reports; and (d) the
expiration of all regulatory comment and waiting periods.
"▇▇▇" shall mean any Individual Retirement Account having assets consisting
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of Deposit Liabilities only.
"IRS" shall mean the Internal Revenue Service.
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"Items" shall mean (a) transfers of funds by wire or through the Automated
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Clearing House system, 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.
"Landlord Consents" shall have the meaning set forth in Section 5.3(f).
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"Lease Assignment" shall have the meaning set forth in Section 5.3(e).
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"Loan Value" shall mean as of any date the unpaid principal balance of the
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Loans, plus Accrued Interest thereon.
"Loans" shall mean:
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(a) all loans held by Target on the Closing Date (including any
reserve for possible loan losses), including all loans originated between
the date of this Agreement and the Closing Date, portions of loans which
may have been participated out to other lenders by Target or portions of
loans which may have been participated to Target by other lenders; and
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(b) pending applications to Target and unfunded commitments,
including but not limited to scheduled credits, of Target subject to any
repayments or prepayments, in whole or in part, advances, credits, debits,
charges or other actions affecting the balance of any such loans as of the
date hereof from the date hereof through the close of business on the
Closing Date, and,
(c) in each case, including all documents executed or delivered in
connection with any loan and any and all collateral held as security
therefor or in which a security interest, lien or mortgage has been
granted, and all rights in relation thereto, together with Accrued Interest
thereon, all as of the close of business on the Closing Date, and Target's
loan files and records relating thereto.
"LSB" shall have the meaning specified in the Preamble.
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"MSB" shall have the meaning specified in the Preamble.
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"Material Condition" applicable to any party hereto shall mean with respect
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to any Regulatory Approval obtained by any party, a condition or requirement,
which, for all parties other than Seller or its Affiliates, does not relate to
or arise from the Community Reinvestment Act (or any amendment, modification or
successor thereto or similar federal or state statute thereto) or compliance
therewith or performance of its obligations thereunder, included in such
Regulatory Approval that, individually or in the aggregate, would (i) result in
a material adverse effect on the party or its Affiliates, or (ii) reduce the
benefits to the party or its Affiliates of the transactions contemplated by the
Agreement in so material a manner that it would not have entered into this
Agreement had such condition or requirement been known as of the date hereof.
For Seller and Target, it is understood that a Material Condition will apply
only to the acquisition of Target and not to any operational benefit or specific
powers sought by Seller from regulatory agencies other than operational benefits
enjoyed by Target, or specific powers held by Target, in each case, as of the
date hereof.
"Other Real Estate Owned" shall mean real estate owned by Target as of the
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date of this Agreement, and real estate acquired by Target between the date of
this Agreement and the Closing Date, in the course of the foreclosure of any
loan made by Target prior to the date of this Agreement or of any Loan after the
date of this Agreement.
"Person" shall mean any individual, partnership, joint venture,
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corporation, trust, limited liability company, unincorporated organization,
government or other entity.
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"Personalty" shall mean all of the personal property of Target used in the
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Bank Business located in the Banking Offices consisting of the trade fixtures,
leasehold improvements, shelving, furniture, automated teller machines,
equipment, security systems, safe deposit boxes (exclusive of contents), vaults
and supplies, less any items consumed or disposed of, plus new items acquired or
obtained, in the ordinary course of the operation of the Banking Offices through
the close of business on the Closing Date and excluding personal property of
Target used in its Trust Business.
"PMH" shall have the meaning specified in the Preamble.
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"PMTH" shall have the meaning specified in the Preamble.
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"Purchase Price" shall have the meaning specified in Section 3.1.
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"Purchaser" shall have the meaning specified in the Preamble.
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"Real Property" shall mean any one or more parcels of real property and
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improvements thereon listed on Schedule 1.1(e) to be conveyed to Purchaser.
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"Regulatory Approvals" shall have the meaning specified in Section 6.1(c).
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"Safe Deposit Agreements" shall mean the agreements relating to safe
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deposit boxes located in the Banking Offices and shall include any keys which
open such safe deposit boxes.
"Securities" shall have the meaning specified in Section 2.1(a)(xi).
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"Seller" shall have the meaning specified in the Preamble.
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"Stock Purchase Agreement" shall have the meaning specified in the
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Preamble.
"Subsidiary" shall mean any subsidiary of Target listed on Schedule 1.1(f).
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"Sun" shall have the meaning specified in the Preamble.
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"Target" shall have the meaning specified in the Preamble.
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"Tenant Leases" shall mean leases or subleases between Target or a
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Subsidiary, as lessor, and the tenants of the Banking Offices, if any, listed on
Schedule 1.1(g).
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"Trust Business" shall have the meaning specified in the Preamble and shall
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include all assets and liabilities set forth in Schedules 2.1(b) and 2.2(b),
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respectively.
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"Trust Employees" shall mean the employees engaged in the Trust Business
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listed on Schedule 1.1(h) attached hereto, any employees hired to replace any
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such employees that may leave Target's employment between the date of this
Agreement and the Closing Date and any employees that may be hired before the
Closing Date to fill positions that are open as of the date of this Agreement in
the Trust Business, who are employed by Target as of the Closing Date.
Section 1.2. Accounting Terms. All accounting terms not otherwise defined
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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.
ARTICLE II
PURCHASE AND SALE OF BANK ASSETS AND
ASSIGNMENT AND ASSUMPTION OF BANK LIABILITIES
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Section 2.1. Purchase and Sale of Bank Assets
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(a) Subject to the terms and conditions hereof, on the Closing Date,
Seller shall cause Target to sell, convey, assign, transfer and deliver to each
of CB, LSB and MSB in accordance with their instructions pursuant to the terms
of the Allocation Agreement, and each of CB, LSB and MSB shall purchase and
accept from Target in accordance with the terms of the Allocation Agreement, its
share of all of the right, title and interest in and to all of the assets of
Target (other than cash or cash equivalent securities in the aggregate amount
equal to $2.5 million (the "Capital Account")) related to or used in the Bank
Business as set forth in Schedule 2.1(a) attached hereto (collectively, the
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"Bank Assets") including without limitation:
(i) the Real Property and Other Real Estate Owned;
(ii) the Personalty;
(iii) the Loans;
(iv) the Banking Office Leases, Tenant Leases and Safe
Deposit Agreements;
(v) all rights of Target under any building maintenance,
service or other contracts in effect as of the Closing Date relating to the
Bank Business of Target to the extent such contracts are assignable;
(vi) the Cash;
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(vii) all prepaid expenses relating to the Bank Assets as of
the Closing Date;
(viii) all of Target's rights appertaining to the contracts and
relationships giving rise to the Deposit Liabilities which Purchaser is
assuming;
(ix) all of Target's rights appertaining to any negative
deposits (overdrafts) in accounts booked at or allocated to the Banking
Offices and outstanding as of the Closing Date;
(x) all insurance premiums paid by Target to the FDIC which
are allocated to insurance coverage for deposit liabilities of the Banking
Offices following the Closing Date to the extent a proration or adjustment
is made with respect thereto pursuant to Section 3.3;
(xi) all of the securities in Target's investment portfolio
(less the amount necessary to fund the Capital Account) ("Securities");
(xii) all of Target's ownership interests in the Subsidiaries;
(xiii) all of Target's ownership interests in the FHLB Stock;
(xiv) all of Target's ownership interests in the stock of NYCE
Corporation; and
(xv) any and all other rights, property and assets relating
to or used in the Bank Business of Target.
(b) Purchaser shall not purchase the assets of Target used in the
Trust Business of Target as set forth in Schedule 2.1(b) attached hereto.
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It is understood and agreed that Target is retaining the Capital Account
and all of the assets used by Target in the Trust Business, except as
otherwise expressly agreed to herein.
(c) In the event that the Allocation Agreement fails to provide
instructions with respect to an asset that Seller deems to be a Bank Asset,
Seller shall transfer such asset to CB, LSB or MSB, as appropriate in
accordance with Section 2.4, and such bank party shall be deemed to have
purchased such asset at a price equal to the price, if any, Seller acquired
it pursuant to the Stock Purchase Agreement. In the event that the bank
party objects to such transfer not later than 30 days after transfer, the
matter shall be referred to arbitration pursuant to Section 14.16.
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Section 2.2. Bank Liabilities; No Other Liabilities Assumed.
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(a) Subject to the terms and conditions of this Agreement, on the
Closing Date, each of CB, LSB and MSB agree to assume, pay, perform and
discharge, its share of all of the liabilities and obligations of Target
outstanding on the Closing Date related to the Bank Business as set forth
in Schedule 2.2(a) (collectively, the "Bank Liabilities") in accordance
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with the terms of the Allocation Agreement including without limitation the
following:
(i) the Deposit Liabilities including, but not limited to, any
negative deposits (overdrafts);
(ii) the Banking Office Leases and Tenant Leases;
(iii) the Safe Deposit Agreements;
(iv) the Loans;
(v) the IRAs, as contemplated by Section 2.3(a);
(vi) the Assumed Severance Obligations with respect to Bank
Employees and its allocated share of the Assumed Severance Obligations with
respect to Corporate Center Employees as provided in Section 11.3;
(vii) all obligations due under any service, maintenance or
other contract relating to the Bank Business in effect at the Closing,
regardless of whether such contract is assignable and/or included in
Section 2.1(a)(v) or (viii), including costs of terminating any such
contracts that Purchaser chooses to terminate in connection with the
transactions contemplated by this Agreement; and
(viii) any and all borrowings from the Federal Home Loan Bank of
Boston or any other person related to the Bank Business ("Borrowings").
(b) Purchaser shall not assume or be bound by any duties,
responsibilities, obligations or liabilities of Target of any kind or
nature, known, unknown, contingent or otherwise relating to the Trust
Business as set forth in Schedule 2.2(b). It is understood and agreed that
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Target is retaining the Capital Account and all of the liabilities relating
to the Trust Business, except as otherwise expressly agreed to herein, and
that Purchaser is assuming all liabilities relating to the Bank Business.
(c) In the event that the Allocation Agreement fails to provide
instructions with respect to a liability that Seller deems to be a Bank
Liability,
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Seller shall transfer such liability to CB, LSB or MSB, as appropriate in
accordance with Section 2.4, and such bank party shall assume such
liability for consideration which is deemed to be equal to the
consideration paid to Seller, if any, for assuming such liability pursuant
to the Stock Purchase Agreement. In the event that the bank party objects
to such transfer not later than 30 days after transfer, the matter shall be
referred to arbitration pursuant to Section 14.16.
Section 2.3. Actions With Respect to IRAs.
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(a) Seller shall cause Target to resign as of the close of business on
the Closing Date as the custodian of each ▇▇▇ of which it is the custodian.
Seller shall also cause Target, to the extent permitted by the
documentation governing each such ▇▇▇ and applicable law, to (i) appoint
CB, LSB or MSB, as instructed by Purchaser in accordance with the
Allocation Agreement, as successor custodian of each such ▇▇▇, and
Purchaser agrees to accept each such custodianship under the terms and
conditions of Target's documents for its IRAs, and assume all fiduciary and
custodial obligations with respect thereto as of the close of business on
the Closing Date, and (ii) deliver to the ▇▇▇ owner of each such ▇▇▇ such
notice of the foregoing as is required by the documentation governing each
such ▇▇▇ or applicable law. The parties agree that such resignation and
appointment shall be effected by instrument substantially in the form of
the ▇▇▇ Resignation and Custodian Appointment attached as Schedule 5.3(h).
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Each of CB, LSB and MSB, as applicable, shall be responsible for delivering
its ▇▇▇ documents to the applicable ▇▇▇ owner, including but not limited to
a beneficiary designation form to be completed by the applicable ▇▇▇ owner;
provided, however, that in the event that an ▇▇▇ owner dies before such
time Purchaser receives a properly completed beneficiary designation form,
Target shall make available to Purchaser such information as may exist in
Target's files regarding any beneficiary designation it may have regarding
such decedent. If, pursuant to the terms of the documentation governing
any such ▇▇▇ or applicable law, the owner designates a successor custodian
other than CB, LSB or MSB, as applicable, all such IRAs shall be excluded
from the Deposit Liabilities (such excluded Deposits Liabilities being
herein called the "Excluded IRAs") and the Excluded IRAs shall be
transferred to the designated custodian by Seller.
(b) The Deposit Liabilities may include certain IRAs the owners of
which are receiving periodic distributions either at the owner's request or
because the owner has attained the age of 70 1/2. In such event each of
CB, LSB or MSB agrees to continue to make such periodic distributions in
accordance with the distribution instructions received from Target.
Section 2.4. Adjustments in Assets and Liabilities. While it is the
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intent of the parties to divide the Bank Business and Trust Business between the
Purchaser and
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Seller, respectively, they recognize that there may be certain assets and
liabilities that do not clearly fit into one category or the other that may be
identified between the date of this Agreement and the Closing Date or may be
identified after the Closing. In such case the parties will endeavor in good
faith to allocate any such asset or liability equitably between each other in
such a manner as to carry out the intent of this Agreement, including any such
transfer by Seller in accordance with Sections 2.1(c) and 2.2(c). As a general
principle, the parties agree that any such asset or liability that is incidental
to or a consequence of an asset or liability assigned to the Bank Business or
Trust Business will belong to the party receiving the related asset or
liability. Any other asset or liability that relates to both the Bank Business
and the Trust Business will be allocated between the parties based on the
relative benefit or burden derived from such asset or liability to the Bank
Business or Trust Business, except that if such relative benefit or burden
cannot be ascertained, then each party shall share equally in such benefit or
burden. If the parties are unable to agree on an allocation after a good faith
effort, the matter shall be referred to arbitration pursuant to Section 14.16.
ARTICLE III
PURCHASE PRICE; PAYMENT; AND
SETTLEMENT
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Section 3.1. Purchase Price. The "Purchase Price" for the Bank Assets
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shall be Purchaser's share of the purchase price of Target in an amount equal to
$25.2 million, as adjusted pursuant to Section 2.3.2 of the Stock Purchase
Agreement.
Section 3.2. Payment at Closing. On the Closing Date, each of CB, LSB and
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MSB shall pay its share of the Purchase Price in accordance with the Allocation
Agreement to Target by wire transfer of immediately available federal funds to
such account as Target shall advise Purchaser prior to the Closing.
Section 3.3. Proration; Other Closing Date Adjustments. It is the
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intention of the parties that Target will operate the Banking Offices for its
own account until the close of business on the Closing Date, and that Purchaser
shall operate the Banking Offices, own the Bank Assets and assume the Bank
Liabilities from and after the close of business on the Closing Date. To the
extent provided in Section 2.4 of the Stock Purchase Agreement, items of income
and expense shall be prorated as of the close of business on the Closing Date,
and settled between Target and Purchaser on the Closing Date, whether or not
such adjustment would normally be made as of such time. Items of proration not
capable of being settled at Closing shall be settled not later than thirty (30)
days after Closing unless otherwise agreed by the parties hereto. Seller or
Purchaser shall promptly pay the amount due to the other party, as the case may
be, by wire transfer of immediately available federal funds to such account as
the party shall advise.
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Section 3.4. Adjustments to Purchase Price. In the event PMH becomes
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liable to Sun for an adjustment in the purchase price payable to Sun pursuant to
Section 2.3.4 of the Stock Purchase Agreement because of any delay caused by or
attributable to acts or omissions of Purchaser, the Purchase Price shall be
adjusted upwards by such amount.
ARTICLE IV
TAXES
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Section 4.1. Sales and Use Taxes. Except as otherwise provided in this
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Agreement, any sales, use, transfer or similar taxes which are payable or arise
as a result of this Agreement or the consummation of the transactions
contemplated hereby shall be paid equally by each party on the Closing Date.
Each party shall indemnify and hold harmless the other from and against any and
all such taxes including those arising upon subsequent audit by any taxing
authority, including interest and penalties. Purchaser and Target will cooperate
in the preparation of any filings or returns.
Section 4.2. Information Reports. Each of CB, LSB and MSB shall provide
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to the IRS, on a timely basis and otherwise as required by law, Form 1099INT,
1099R, W-2P, 5498 and any other required forms and reports with respect to each
Deposit Liability allocated to each party under the Allocation Agreement
concerning interest paid on, or contributions to and distributions from, the
deposit accounts, as appropriate, for the periods both before and after the
Closing Date including without limitation any information required by the IRS
pursuant to any request for backup withholding and TIN certification records and
documents.
ARTICLE V
CLOSING
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Section 5.1. Closing Date.
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(a) The "Closing Date" shall be the "Closing Date" specified in the
Stock Purchase Agreement.
(b) It is anticipated that the Closing Date shall coincide with the
acquisition of all of Target's capital stock by Seller pursuant to the
Stock Purchase Agreement.
Section 5.2. Place and Time of Closing; Effective Time. The Closing shall
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take place at a mutually agreeable time and place on the Closing Date and shall
be effective as of the close of business on the Closing Date ("Effective Time").
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Section 5.3. Target Deliveries. On the Closing Date, Seller shall
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deliver, or cause Target to deliver, to CB, LSB or MSB in the manner instructed
by Purchaser in accordance with the terms of the Allocation Agreement:
(a) A statement setting forth the basis of the Purchase Price;
(b) Deeds for each parcel of Real Property or Other Real Estate Owned
in the same form of deed received by Target, pursuant to which the Real
Property or Other Real Estate Owned shall be transferred "AS IS", "WHERE
IS" and with all faults;
(c) A ▇▇▇▇ of sale for the Bank Assets substantially in the form of
Schedule 5.3(c) attached hereto, pursuant to which the Bank Assets shall be
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transferred "AS IS", "WHERE IS" and with all faults;
(d) An assignment and assumption agreement with respect to the Bank
Liabilities substantially in the form of Schedule 5.3(d) attached hereto
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(the "Assignment and Assumption Agreement");
(e) Lease assignment and assumption agreements with respect to each of
the Banking Office Leases substantially in the form of Schedule 5.3(e)
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attached hereto (the "Lease Assignments");
(f) Such consents of landlords under the Banking Office Leases, as
shall be obtained pursuant to Section 6.8 of the Stock Purchase Agreement,
to the assignment of the Banking Office Leases, if possible, in the form of
Schedule 5.3(f) attached hereto (the "Landlord Consents");
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(g) Certificates Relating to Lease of Banking Offices by Target
substantially in the form of Schedule 5.3(g) attached hereto;
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(h) Target's resignation as custodian with respect to each ▇▇▇
included in the Deposit Liabilities and designation of CB, LSB or MSB as
successor custodian with respect thereto, as contemplated by Section 2.3
and substantially in the form of Schedule 5.3(h) attached hereto;
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(i) A limited power of attorney granting each of CB, LSB and MSB the
authority to execute certain documents on behalf of Target substantially in
the form of Schedule 5.3(i) attached hereto;
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(j) Officer's certificate from each of PMH, PMTH and Target
substantially in the form of Schedule 5.3(j) attached hereto;
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(k) An opinion of counsel in a form reasonably acceptable to
Purchaser; and
(l) Such other documents necessary to effect the transactions
contemplated hereby as Purchaser shall reasonably request.
Section 5.4. Purchaser Deliveries. On the Closing Date, each of CB, LSB
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and MSB shall deliver its share of the Purchase Price and the following
documents to Target in accordance with the terms of this Agreement and the
Allocation Agreement:
(a) The Assignment and Assumption Agreement;
(b) The acceptance of its appointment as successor custodian of the
IRAs included in the Deposit Liabilities (excepting the Excluded IRAs) and
assumption of the fiduciary obligations of the custodian with respect
thereto, as contemplated by Section 2.3;
(c) The Lease Assignments and, as contemplated by Section 11.2, such
other instruments and documents as any landlord under a Banking Office
Lease may reasonably require as necessary or desirable for providing for
the assumption of a Banking Office Lease, each such instrument and document
in the form and substance reasonably satisfactory to the parties and dated
as of the Closing Date;
(d) Officer's certificate from each of CB, LSB and MSB in the form of
Schedule 5.4(d) attached hereto;
---------------
(e) An opinion of counsel from each of CB, LSB and MSB in a form
reasonably acceptable to Seller; and
(f) Such other documents necessary to effect the transactions
contemplated hereby as Target shall reasonably request.
ARTICLE VI
CONDITIONS TO OBLIGATIONS OF SELLER AND TARGET
----------------------------------------------
Section 6.1. Conditions to Obligations of Seller and Target. Unless
----------------------------------------------
expressly waived in writing by Seller and Target, the obligations of Seller and
Target under this Agreement are subject to the satisfaction as of the Closing
Date, of each of the following conditions:
(a) PMTH acquires all of the capital stock of Target pursuant to the
Stock Purchase Agreement and all of the conditions thereunder are
fulfilled.
14
(b) All of the covenants and other agreements required by this
Agreement to be complied with and performed by Purchaser on or before the
Closing Date shall have been duly complied with and performed in all
material respects;
(c) Approvals in writing of all relevant regulatory agencies to
purchase the Bank Assets and assume the Bank Liabilities shall have been
obtained by Purchaser, and approvals in writing of all relevant regulatory
agencies to acquire the Target's charter, where applicable, shall have been
obtained by Target, and all necessary conditions, including any additional
governmental approvals, permissions or consents, if any, including the
giving of all legally required notices and the expiration of all legally
required waiting or protest periods, of or relating to licenses, approvals
and consents shall have been met (all of such approvals, conditions,
permissions, licenses and consents being herein collectively called the
"Regulatory Approvals"), and such Regulatory Approvals shall include no
Material Condition applicable to Seller or Target; and
(d) Target shall have received the items to be delivered by Purchaser
pursuant to Section 5.4.
ARTICLE VII
CONDITIONS TO OBLIGATIONS OF PURCHASER
--------------------------------------
Section 7.1. Conditions to Obligations of Purchaser. Unless expressly
--------------------------------------
waived in writing by CB, LSB or MSB, as appropriate, the obligations of each of
CB, LSB and MSB individually under this Agreement are subject to the
satisfaction 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 Target on or before the Closing Date
shall have been duly complied with and performed in all material respects;
(b) The Regulatory Approvals, which shall include no Material
Condition applicable to CB, LSB or MSB, as appropriate, shall have been
obtained; and
(c) Purchaser shall have received the items to be delivered by Target
pursuant to Section 5.3.
Section 7.2. Representations and Warranties of Target. Each of PMH and
----------------------------------------
PMTH shall cause Target to represent and warrant to Purchaser at Closing as
follows:
15
(a) Target is a federally chartered bank duly organized and validly
existing under the laws of the United States of America.
(b) Target has the power and authority to enter into and perform this
Agreement. 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 actions on the
part of Target, and this Agreement and the instruments and documents executed
pursuant hereto constitutes, or will constitute, the valid and binding
obligations of Target, enforceable against Target in accordance with its terms,
except as enforcement may be limited by federal and state regulators of Target
or by bankruptcy, insolvency, reorganization, moratorium or other laws of
general applicability relating to or affecting creditors' rights, or the
limiting effect of rules of law governing specific performance, equitable relief
and other equitable remedies or the waiver of rights or remedies.
(c) The execution and delivery of this Agreement and the instruments and
documents executed pursuant hereto by Target do not and, subject to the receipt
of all required approvals and consents, the consummation of the transactions
contemplated by this Agreement will not constitute (i) a breach or violation of
or default under any law, rule, regulation, judgment, order, governmental permit
or license of Target or to which Target is subject, which breach, violation, or
default would have a material and adverse effect on Target or the business or
properties of the Banking Offices; or (ii) a breach or violation of or a default
under the organizational instruments or Bylaws of Target.
(d) There are no pending or, to the knowledge of Target, threatened,
disputes or controversies between Target and any federal, state or local
governmental authority that (i) would reasonably be expected to prevent or
impair the ability of Target to perform its obligations under this Agreement in
any material respect or (ii) would reasonably be expected to impair the validity
or consummation of this Agreement or the transactions contemplated hereby.
ARTICLE VIII
REPRESENTATIONS AND WARRANTIES OF SELLER
----------------------------------------
Each of PMH and PMTH represents and warrants to Purchaser as follows:
Section 8.1. Organization. Each of PMH and PMTH is duly organized, validly
------------
existing and in good standing under the laws of the State of Connecticut.
Section 8.2. Authority. Each of PMH and PMTH has the power and authority
---------
to enter into and perform this Agreement. This Agreement and any other documents
or instruments executed pursuant hereto and the execution, delivery and
performance
16
hereof and thereof have been duly authorized and approved by all necessary
corporate actions on the part of each of PMH or PMTH, and this Agreement and the
instruments and documents executed pursuant hereto constitutes, or will
constitute, the valid and binding obligations of each of PMH or PMTH,
enforceable against each of PMH or PMTH in accordance with its terms, except as
enforcement may be limited by federal and state regulators of PMH or PMTH or by
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 8.3. Non-Contravention. The execution and delivery of this
-----------------
Agreement and the instruments and documents executed pursuant hereto by each of
PMH or PMTH do not and, subject to the receipt of all required approvals and
consents, the consummation of the transactions contemplated by this Agreement
will not constitute (a) a breach or violation of or default under any law, rule,
regulation, judgment, order, governmental permit or license of each of PMH or
PMTH or to which each of PMH or PMTH is subject, which breach, violation, or
default would reasonably be expected to impair the validity or consummation of
this Agreement, or the transactions contemplated hereby; or (b) a breach or
violation of or a default under the organizational instruments or Bylaws of PMH
or PMTH or any material contract or other instrument to which PMH or PMTH is a
party or by which PMH or PMTH is bound.
Section 8.4. Regulatory Matters. There are no pending or, to the
------------------
knowledge of PMH or PMTH, threatened, disputes or controversies between PMH or
PMTH and any federal, state or local governmental authority that (i) would
reasonably be expected to prevent or impair the ability of PMH or PMTH to
perform its obligations under this Agreement in any material respect or (ii)
would reasonably be expected to impair the validity or consummation of this
Agreement or the Stock Purchase Agreement or the transactions contemplated
hereby or thereby. Neither of PMH or PMTH is aware of any reason relating to
PMH or PMTH why all required Regulatory Approvals should not be procured. Each
of PMH and PMTH believes that it can satisfy all capital and other regulatory
requirements necessary to obtain all Regulatory Approvals.
Section 8.5. Legal Proceedings. There are no actions, suits, claims,
-----------------
governmental investigations or proceedings instituted, pending or, to the best
knowledge of PMH or PMTH, threatened against either of them or against any
officer, director or employee of either of them which would be reasonably likely
to prevent or hinder the consummation of the transactions contemplated by this
Agreement.
Section 8.6. Brokers and Finders. Except as disclosed in Schedule 8.6,
------------------- ------------
neither PMH or PMTH nor any of their respective directors, officers or
employees, has employed any broker or finder or incurred any liability for any
broker or finder fees or commissions in connection with the transactions
contemplated hereby.
17
ARTICLE IX
REPRESENTATIONS AND WARRANTIES OF PURCHASER
-------------------------------------------
Each of CB, LSB and MSB represents and warrants, with respect to itself, to
Seller and Target as follows:
Section 9.1. Organization. Each of LSB and MSB is a federally chartered
------------
savings bank duly organized and validly existing under the laws of the United
States of America. CB is a state-chartered savings and loan association duly
organized, validly existing and in good standing under the laws of the State of
Connecticut.
Section 9.2. Authority. Each of CB, LSB and MSB 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 actions on the part of each of CB, LSB and MSB, and this Agreement
constitutes a valid and binding obligation of Purchaser, enforceable against
each of CB, LSB and MSB in accordance with its terms, except as enforcement may
be limited by 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 9.3. 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 required approvals and
consents, the consummation of the transactions contemplated by this Agreement
will not constitute (a) a breach or violation of or default under any law, rule,
regulation, judgment, order, governmental permit or license of any of CB, LSB or
MSB, or to which any of them is subject, which breach, violation or default
would reasonably be expected to impair the validity or consummation of this
agreement or the transactions contemplated hereby, or (b) a breach or violation
of or a default under the organizational instruments or Bylaws of any of CB, LSB
or MSB or any material contract or other instrument to which it is a party or by
which it is bound.
Section 9.4. Regulatory Matters.
------------------
(a) There are no pending or, to the knowledge of any of CB, LSB
and MSB, threatened, disputes or controversies between CB, LSB or MSB and
any federal, state or local governmental authority that (i) would
reasonably be expected to prevent or impair the ability of any of CB, LSB
or MSB to perform its obligations under this Agreement in any material
respect or (ii) would reasonably
18
be expected to impair the validity or consummation of this Agreement or the
Stock Purchase Agreement or the transactions contemplated hereby or
thereby. None of CB, LSB or MSB is aware of any reason why all required
Regulatory Approvals should not be procured. None of CB, LSB and MSB is
aware of any reason that would prevent it from satisfying all capital and
other regulatory requirements necessary to obtain all Regulatory Approvals.
(b) As of the date hereof, without giving effect to the transactions
contemplated hereby, and following the consummation of the transactions
contemplated hereby, on a pro forma basis each of CB, LSB or MSB will
remain at least "adequately capitalized", as defined in the Federal Deposit
Insurance Corporation Improvement Act of 1991, as amended (12 U.S.C.
1831(o)) and will meet all applicable regulatory minimum capital standards.
Section 9.5. MSB's Payment of Its Share of Purchase Price Not Contingent.
-----------------------------------------------------------
MSB's agreement to pay its share of the Purchase Price to Seller hereunder is
not contingent on the availability to MSB of sufficient cash or other liquid
assets or financing pursuant to binding agreements or commitments for such
purpose, except as may otherwise be required under Section 11.6(b).
Section 9.6. Legal Proceedings. There are no actions, suits, claims,
-----------------
governmental investigations or proceedings instituted, pending or, to the best
knowledge of CB, LSB and MSB, threatened against any of them or against any
officer , director or employee of any of them which would be reasonably likely
to prevent or hinder the consummation of the transactions contemplated by this
Agreement.
Section 9.7. Brokers and Finders. Except as disclosed in Schedule 9.7,
------------------- ------------
neither CB, LSB or MSB nor any of their respective directors, officers or
employees, has employed any broker or finder or incurred any liability for any
broker or finder fees or commissions in connection with the transactions
contemplated hereby.
Section 9.8. Purchaser Investigation. Each of CB, LSB and MSB
-----------------------
acknowledges that: (i) it has had the opportunity to visit with Target and meet
with its representative officers and other representatives to discuss the
business, assets, liabilities, reserves, financial condition, cash flow and
operations of Target, and (ii) all materials and information requested by CB,
LSB or MSB have been provided to CB, LSB or MSB to the reasonable satisfaction
of such party. Each of CB, LSB and MSB acknowledges that it has made its own
independent examination, investigation, analysis and evaluation of Target,
including its own estimate of the value of its interest in the Bank Business.
Each of CB, LSB and MSB acknowledges that it has undertaken such investigation
(including a review of the assets, liabilities, books, records and contracts of
Target) as CB, LSB or MSB deems adequate, including that described above.
19
ARTICLE X
COVENANTS OF SELLER
-------------------
Seller covenants and agrees with Purchaser as follows:
Section 10.1. Regulatory Approvals.
--------------------
(a) Seller shall cooperate with Purchaser and use its best efforts to
promptly prepare and file all necessary documentation; to effect all
applications, notices, petitions and filings; and to obtain as promptly as
practicable all permits, consents, approvals, waivers and authorizations of
all third parties and governmental entities which are necessary or
advisable to consummate the transactions contemplated by this Agreement.
(b) Within 45 days after the execution of this Agreement, Seller shall
file with the appropriate governmental entities all the applications for
the requisite Regulatory Approvals relating to Seller and for all other
consents, permits and authorizations which Seller is required to obtain in
connection with the consummation of the transactions contemplated by this
Agreement.
(c) Subject to the applicable laws relating to the exchange of
information, Seller and Purchaser shall consult with each other on all
information in connection with obtaining all permits, consents, approvals
and authorizations from all third parties and governmental entities that
are necessary or advisable to consummate the transactions contemplated by
this Agreement.
(d) Seller and Purchaser will keep the other party apprised of the
status of all applications and filings.
(e) Except for any confidential portions thereof, the party
responsible for making and filing shall promptly (i) provide a copy of the
filing, and any supplement, amendment or item of additional information in
connection with the filing, to the other party and (ii) deliver to the
other party a copy of each material notice, order, opinion and other item
of correspondence received by it in respect of any such filing from any
governmental entity whose consent or approval is required for consummation
of the transactions contemplated by this Agreement.
(f) Purchaser and Seller shall promptly advise each other of any
communication received from a governmental entity which causes such party
to believe that there is reasonable likelihood that a requisite Regulatory
Approval will not be obtained or that the receipt of such approval will be
materially delayed.
20
Section 10.2. Corporate and Other Consents.
-----------------------------
(a) Seller shall use its reasonable efforts to fulfill its duties as
the representative of Purchaser under the Stock Purchase Agreement and in
such capacity shall fully cooperate with Sun in enabling it to satisfy its
consent obligations under Sections 6.2.1, 6.7 and 6.8 of the Stock Purchase
Agreement and Schedule 6.2.1 attached thereto.
--------------
(b) Seller shall promptly comply with all applicable laws,
regulations, and rulings in connection with this Agreement and the
consummation of the transactions contemplated hereby.
Section 10.3. Retention Pay. Seller shall be responsible, prior to
--------------
Closing, for an amount not to exceed 25% of the "stay for pay" amount referred
to in Section 2.5.5 of the Stock Purchase Agreement to contribute to the
retention pay Target has paid or will pay to its employees as incentive for them
to remain employed through the date of Closing.
Section 10.4. Employees.
---------
(a) With respect to all group health plans maintained by Target or any
Subsidiary thereof, Seller shall cause Target to retain full responsibility
and liability for compliance with the continuation health care coverage
requirements of Internal Revenue Code Section 4980B and ERISA Sections 601
through 608 for all "qualifying events" within the meaning of Section
4980B(f)(3) of the Code and Section 603 of ERISA with respect to such group
health plans occurring on or prior to the Closing Date.
(b) Seller shall be solely responsible for, and shall fulfill all of
the duties and all of the obligations as set forth in Section 7.7 of the
Stock Purchase Agreement with respect to the Trust Employees and shall be
responsible for 13% of the cost of the Assumed Severance Obligations with
respect to the Corporate Center Employees.
(c) As of or prior to the Closing Date, Target shall (i) take whatever
action is necessary to cause the Bank Employees to become vested in their
account balances under the 401(k) plan maintained by Target (the "Target
401(k) Plan") (ii) take whatever action is necessary to cause the Bank
Employees to become vested in their accrued benefits under the defined
benefit pension plan in which Target participated, but only to the extent
permitted by the terms of such plan and only to the extent such accrued
benefits are funded as of the Closing Date; (iii) make whatever amendments
to the Target 401(k) Plan as are necessary to allow for the distribution of
a Bank Employee's entire account balance as of the Closing Date and to
permit that such distributions include the
21
promissory note relating to any outstanding loan of the Bank Employee; and
(iv) make whatever amendments to the Target 401(k) Plan as are necessary,
if any, to provide for the allocation of all matching contributions
attributable to the portion of the plan year ending on the Closing Date to
the accounts of Bank Employees, regardless of any hours, services or
employment requirements that otherwise would apply to the allocation of
matching contributions.
Section 10.5. Trust Deposits. Seller covenants that it will maintain all
--------------
Deposit Liabilities relating to the Trust Business in operating and cash flow
accounts at LSB following Closing Date for the lesser of a period equal to five
(5) years or the period LSB continues to retain Target or its Affiliates as its
exclusive provider of trust services. If the Deposit Liabilities are withdrawn
prematurely, Seller shall reimburse LSB for the portion of the Purchase Price it
paid related to such Deposit Liabilities amortized over said five (5) year
period.
Section 10.6. Excluded Securities. Seller shall cooperate with Purchaser
-------------------
in determining which securities are to remain in the investment portfolio of
Target after the Closing Date.
Section 10.7. Corporate Pledges. Seller shall assume 25% of the corporate
-----------------
pledge obligations of Target following Closing.
Section 10.8. Proceeds from Sale of Bank Business Realty. Seller covenants
------------------------------------------
that the proceeds from the sale of any real property asset realized pursuant to
the terms of Section 2.9 of the Stock Purchase Agreement shall be assigned to
the Bank Party to which such realty is allocated in the Allocation Agreement.
ARTICLE XI
COVENANTS OF PURCHASER
----------------------
Each of CB, LSB and MSB with respect to itself covenants and agrees with
Seller and Target as follows:
Section 11.1. Regulatory Approvals and Standards.
----------------------------------
(a) Each of CB, LSB and MSB will use its best efforts to obtain as
expeditiously as possible the Regulatory Approvals. As of the Closing Date,
each of CB, LSB and MSB will satisfy each and all of the standards and
requirements reasonably within its control imposed as a condition to
obtaining or necessary to comply with Regulatory Approvals. Each of CB,
LSB or MSB shall take no action which would adversely affect or delay the
ability of any party hereto to obtain any Regulatory Approval or to perform
its covenants and agreements under this Agreement.
22
(b) From the date hereof through the Closing Date, each of CB, LSB and
MSB shall remain at least "adequately capitalized", as defined in the
Federal Deposit Insurance Corporation Improvement Act of 1991, as amended
(12 U.S.C. 183l(o)) and meet all applicable regulatory minimum capital
standards.
(c) After the Closing Date it is each of CB's, LSB's and MSB's
intention to conduct a Bank Business at the Banking Offices, and therefore
as of the date hereof it is not expected that the transactions contemplated
by this Agreement will result in the closing, consolidation or relocation
of any of the Banking Offices. Each of CB, LSB and MSB agrees that it
shall be responsible for complying with any required Banking Office closing
or other notices to regulators and customers in the event any of CB, LSB or
MSB should at any subsequent time determine to close, consolidate or
relocate any of the Banking Offices or to close, consolidate or relocate
any Banking Office of any of CB, LSB or MSB in connection with or relating
to the transactions contemplated by this Agreement.
Section 11.2. Corporate and Other Consents; Compliance with Law.
-------------------------------------------------
(a) Each of CB, LSB or MSB shall use its best efforts to secure all
necessary corporate and other non-regulatory consents (except those
involving Target) and shall provide certified copies to Seller and Target
upon Seller's request.
(b) Each of CB, LSB and MSB shall promptly comply with all applicable
laws, regulations, and rulings in connection with this Agreement and the
consummation of the transactions contemplated hereby.
Section 11.3. Employees.
----------
(a) Each of CB, LSB and MSB shall fulfill all of the duties and all of
the obligations as set forth in Section 7.7 of the Stock Purchase Agreement
with respect to Bank Employees for which it is responsible under the
Allocation Agreement and shall be responsible collectively for 87% of the
cost of the Assumed Severance Obligations with respect to the Corporate
Center Employees in accordance with the Allocation Agreement.
(b) CB shall be responsible for providing the retiree medical
benefits identified in Item 8 of Schedule 4.16.1 attached to the Stock
Purchase Agreement and CB assumes all obligations and rights of Target
relating to such retiree medical obligations.
Section 11.4. Retention Pay. Each of CB, LSB and MSB shall, in accordance
--------------
with the Allocation Agreement, reimburse Target at Closing for an amount not to
exceed
23
75% of the "stay for pay" amount referred to in Section 2.5.5 of the Stock
Purchase Agreement to contribute to the retention pay Target has paid or will
pay to its employees as incentive for them to remain employed through the
Closing Date.
Section 11.5. Excluded Securities. Purchaser shall cooperate with Seller
-------------------
in determining which securities are to remain in the investment portfolio of
Target after the Closing Date.
Section 11.6. Covenants of LSB and MSB Alone.
------------------------------
(a) LSB and MSB shall assume the obligations of the lease for the Day
Care Center and shall use their reasonable efforts to secure all necessary
approvals, permits, licenses and insurance to own and operate the Day Care
Center after the Closing Date. LSB and MSB will jointly fulfill all of the
duties and all of the obligations as set forth in Section 7.7 of the Stock
Purchase Agreement with respect to the employees of the Day Care Center.
(b) If, between the date of this Agreement and the Closing Date,
either (i) LSB or MSB, in consultation with Seller, determine that the
▇▇▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇ Index change with regard to the Banking Offices and
Deposit Liabilities to be assumed by each of LSB and MSB under the
Allocation Agreement will create an impermissible competitive effect, or
(ii) a government agency, the approval of which will be a requirement to
Closing, so indicates, LSB and MSB shall cooperate to amend the Allocation
Agreement so as to re-allocate certain Bank Assets and/or Bank Liabilities
to each of LSB and MSB to eliminate the impermissible competitive effect.
Section 11.7. Covenants by CB and LSB Alone. Each of CB and LSB shall use
-----------------------------
all possible efforts to obtain financing necessary for it to consummate the
transactions contemplated by this Agreement. Each of CB and LSB shall not
pursue other whole bank acquisitions, branch, or other asset acquisitions or
sales or similar transactions other than in the ordinary course of business,
unless and until such financing is completed, and it shall not use the proceeds
of such financing for any purpose other than consummation of the transactions
contemplated by this Agreement.
Section 11.8. Little Red House Lease. At Closing LSB and Target shall
----------------------
enter into a lease agreement for the Red Building located at ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇ for a term of not less than five years at
$15.00 per square foot triple net. Such lease shall contain such other terms as
are mutually acceptable to LSB and Seller.
Section 11.9. Corporate Pledges. Each of CB, LSB and MSB shall assume 25%
-----------------
of the corporate pledge obligations of Target following Closing.
24
ARTICLE XII
INDEMNITY
---------
Section 12.1. Seller and Target's Indemnity. Except as otherwise provided
-----------------------------
in this Agreement, each of Seller and Target shall jointly and severally
indemnify, hold harmless and defend each of CB, LSB and MSB, and its respective
directors, shareholders, officers, agents and employees from and against all
claims, losses, liabilities, demands and obligations (including reasonable legal
fees and expenses) asserted by third parties which it and its respective
directors, shareholders, officers, agents or employees shall receive, suffer or
incur arising out of or resulting from (a) any liability assumed by Target
hereunder or (b) the breach of any material representation, warranty or covenant
made by Seller or Target in this Agreement.
Section 12.2. Purchaser's Indemnity. Except as otherwise provided in this
---------------------
Agreement, each of CB, LSB and MSB shall severally indemnify, hold harmless and
defend Seller, Target and each other, and their respective directors,
shareholders, officers, agents and employees from and against all claims,
losses, liabilities, demands and obligations (including reasonable legal fees
and expenses) asserted by third parties which either of them and their
respective directors, shareholders, officers, agents or employees shall receive,
suffer or incur arising out of or resulting from (a) Bank Liabilities assumed by
CB, LSB or MSB, respectively, hereunder or (b) the breach of any material
representation, warranty or covenant made by CB, LSB or MSB, respectively, in
this Agreement.
Section 12.3. Indemnification Procedure. Promptly after receipt by any
-------------------------
party of notice of the assertion of any claim or the commencement of any action,
suit or proceeding arising under this Agreement, such party ("Indemnified
Party") shall give written notice thereof to the other party ("Indemnitor") and
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, it shall have been prejudiced 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 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 that 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
25
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,
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 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 12.4. Survival. All indemnities contained in or made pursuant to
--------
this Agreement shall survive the Closing, until fifteen months after the Closing
Date, except as to any claim for which written notice shall have been given
prior to such date.
Section 12.5. Indemnity under the Stock Purchase Agreement. If more than
--------------------------------------------
one of the parties hereto who are also parties to the Stock Purchase Agreement
have claims, losses, liabilities, demands and obligations (including reasonable
legal fees and expenses) which they are entitled to assert directly against Sun,
they shall cooperate with each other to coordinate the filing of their claims of
indemnity to maximize their recovery and shall distribute the indemnity proceeds
in an equitable manner.
ARTICLE XIII
POST CLOSING MATTERS
--------------------
Section 13.1. Further Assurances. On and after the Closing Date:
------------------
(a) Except as specifically provided otherwise herein, Seller shall
cause Target to assist Purchaser in the orderly transition of the
operations of the Banking Offices and shall 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
Bank Assets in the manner contemplated hereby; and
(b) Except as specifically provided otherwise herein, Purchaser shall
give such further assurances to Target 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 Target from any obligations remaining with respect to the
Bank Liabilities of Target assumed by Purchaser hereunder.
Section 13.2. Access to and Retention of Books and Records. On the
--------------------------------------------
Closing Date, to the extent practicable, each of CB, LSB and MSB shall receive
possession of,
26
and all right, title and interest in, all books and records in the possession of
Target relating to the Bank Business which each of them is acquiring. Each of
CB, LSB and MSB shall assume the obligations of Seller as "Purchaser Parent" and
"Purchaser" under Section 9.8 of the Stock Purchase Agreement and shall retain
such books and records for seven (7) years and permit access to them by Sun and
Seller during such period so as to fulfill the obligations thereunder.
Notwithstanding anything to the contrary contained herein the obligations of the
parties hereto under this Section shall be subject to all applicable laws
relating to the confidentiality of bank records.
Section 13.3. Servicing Rights. The parties agree that the responsibility
----------------
for addressing any liability incurred by any of them with respect to loan
servicing contracts listed on Schedule 13.3 shall be delegated to CB, LSB or
-------------
MSB in accordance with the Allocation Agreement, or in the event the Allocation
Agreement fails to address such matter, by Seller in accordance with the
principles of Section 5.4. A proportionate share of any excess loan loss
reserves of CB, LSB and MSB received from Target (the amount of such excess
reserves shall be agreed to by the parties as of the Closing Date) shall be used
to compensate CB, LSB or MSB, as applicable, for any actual loss incurred with
respect to the loan servicing contract liability delegated to it. Any loss
incurred in excess of the loan loss reserves, if any, shall be shared equally
among the parties.
ARTICLE XIV
MISCELLANEOUS
-------------
Section 14.1. Expenses. Except as otherwise provided herein, Seller and
--------
each party shall pay all of its own out-of-pocket expenses in connection with
this Agreement, including appraisal, accounting, consulting, professional and
legal fees, if any, whether or not the transactions contemplated by this
Agreement are consummated, provided that Purchaser shall pay all (a) recording,
filing or other fees, cost and expenses (including fees, costs and expenses for
(i) preparation of title certificates or searches, surveys, inspections,
environmental audits or other investigations, (ii) filing of any forms
(including without limitation tax forms) with governmental instrumentalities in
connection with the transfer of the Real Property or Personalty, and (iii)
recording instruments or documents evidencing any transfers of interests in real
property), and (b) costs and expenses relating to the preparation, execution and
recording of assignments of mortgages, financing statements, notes, security
agreements or other instruments (other than the items to be delivered by Target
pursuant to Section 5.3), applicable to or arising in connection with the
transfer, assignment or assumption of the Loans (and mortgages, financing
statements, notes, security agreements and other instruments relating thereto),
the Real Property, the Banking Office Leases or the Personalty.
Section 14.2. Communications, Notices, etc. Purchaser shall furnish to
----------------------------
Target, and Seller shall cause Target to furnish to Purchaser copies of the text
of all notices,
27
advertisements, information or communications, written or oral, proposed to be
sent or transmitted by the furnishing party to Bank Employees, Bank Customers or
the public generally regarding the transfer of the Bank Business (including any
public notices required to be given by law or regulation in connection with such
transactions or applications for approval thereof), and the furnishing party
shall not send or transmit such notices, advertisements, information or
communications or otherwise make them public unless and until the prior consent
of the other party shall have been received (such consent not to be unreasonably
withheld). This obligation shall terminate on the Closing Date.
Section 14.3. Trade Names and Trademarks. The parties agree that the name
--------------------------
"New London Trust" or derivation thereof shall not be used by any party after
the Closing Date.
Section 14.4. 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 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 receipt by CB, LSB or MSB or Seller or Target of notice from
any regulatory authority that such party has been denied any Regulatory
Approval by Final order, provided, however, that termination pursuant to
this Section 14.4(b) shall be effective only as to the applicable bank,
whether CB, LSB or MSB, individually; or
(c) Upon written notice by any party to the other parties, if the
Closing has not occurred by January 31, 2000, unless the closing under
Section 11.1 of the Stock Purchase Agreement is extended pursuant to
Section 12.1.3 of the Stock Purchase Agreement or the parties shall by
mutual agreement otherwise extend the time for Closing under this
Agreement.
In the event any party breaches its obligations hereunder other than due to
circumstances described in the third sentence of Section 14.18 hereof and causes
the termination of the Agreement or causes another party to assume its
obligations in order for the transaction to be consummated, then the breaching
party shall be liable to the other party or parties for out-of-pocket expenses
actually incurred in connection with the transactions contemplated hereby.
Section 14.5. Modification and Waiver. The parties acknowledge and agree
-----------------------
that this Agreement and the schedules attached hereto will likely require
modification as assets and liabilities are discovered in the intervening period
between the date of this
28
Agreement and the Closing Date in order to divide their respective rights and
duties in accordance with the intent of this Agreement. The parties agree to
cooperate in making such modifications. No modification of any provision of this
Agreement or schedule shall be binding unless in writing and executed by all of
the parties to this Agreement. 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 party to whom such covenant is given or whom such
condition is intended to benefit, except to the extent any such condition is
required by law; provided, any such waiver must be in writing.
Section 14.6. Binding Effect; Assignment. This Agreement shall be binding
--------------------------
upon and shall inure to the benefit of the parties hereto and their respective
successors and assigns; provided, however, subject to the provisions of Section
14.18, that neither this Agreement nor any rights, privileges, duties or
obligations of the parties hereto may be assigned by any such party prior to the
Effective Time without the written consent of the other party hereto, and
provided further that in the case of any such assignment the assigning party
shall also remain responsible as a party hereto.
Section 14.7. Confidentiality.
---------------
(a) From and after execution hereof, the parties hereto shall keep
confidential the terms of this Agreement and the negotiations relating
hereto and all documents and confidential proprietary information obtained
by a party from another party in connection with the transactions
contemplated hereby except (i) to the extent that the Agreement and such
negotiations must be disclosed to obtain the Regulatory Approvals, (ii) for
disclosure made in accordance with the terms and conditions of this
Agreement, (iii) to the extent required by applicable law, or (iv) as
previously made public by any party.
(b) This Section 14.7 shall survive the termination or consummation of
this Agreement.
Section 14.8. Entire Agreement; Governing Law. This Agreement, the Stock
-------------------------------
Purchase Agreement, the Allocation Agreement and the Confidentiality Agreements
(as defined in the Stock Purchase Agreement), together with the exhibits and
schedules attached hereto and thereto and made a part hereof and thereof,
contain the entire agreement between the parties hereto with respect to the
transactions covered and contemplated hereunder, and supersede 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 State of New Hampshire.
Section 14.9. Consent to Jurisdiction; Waiver of Jury Trial. EACH PARTY
---------------------------------------------
HERETO, TO THE EXTENT IT MAY LAWFULLY DO SO, HEREBY SUBMITS TO THE
29
JURISDICTION OF THE COURTS OF THE STATE OF NEW HAMPSHIRE AND THE UNITED STATES
DISTRICT COURT FOR THE DISTRICT OF NEW HAMPSHIRE, 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, 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 ANY WAY AGREED WITH OR REPRESENTED TO ANY OTHER
PARTY THAT THE PROVISIONS OF THIS SECTION WILL NOT BE FULLY ENFORCED IN ALL
INSTANCES.
Section 14.10. Severability. In the event that any provision of this
------------
Agreement 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 14.11. 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 14.12. 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,
30
If to Seller addressed to:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, Esquire
Phoenix Home Life Mutual Insurance Company
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
If to Purchaser, addressed to:
▇▇▇▇▇▇▇ Bank
Westbank Tower, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esquire
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Lake Sunapee Bank, fsb
▇ ▇▇▇▇ ▇▇▇▇▇▇ (▇▇ ▇▇▇ ▇)
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President and Chief Executive Officer
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esquire
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & Wood
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Mascoma Savings Bank
▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, President
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
31
With a copy to: W. ▇▇▇▇ ▇▇▇▇, Esquire
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, P.A.
▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇ (PO Box 1214)
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Notice by certified mail shall be deemed to be received three (3) business
days after mailing of the same. Any party may change the persons or addresses to
whom or to which notices may be sent by written notice to the others.
Section 14.13. Interpretation. Any reference herein to a Section, Exhibit,
--------------
or Schedule shall be deemed a reference to a Section of, or Exhibit or Schedule
to, this Agreement unless otherwise specified herein. The Section and Article
headings contained in this Agreement are for reference purposes only and shall
not affect in any way the meaning or interpretation of this Agreement.
Section 14.14. Specific Performance. The parties hereto acknowledge that
--------------------
monetary damages could not adequately compensate the parties hereto in the event
of a breach of this Agreement by one party, that the non-breaching party or
parties would suffer irreparable harm in the event of such breach and that the
non-breaching party or parties shall have, in addition to any other rights or
remedies it or they may have at law or in equity, specific performance and
injunctive relief as a remedy for the enforcement hereof.
Section 14.15. Third Party Beneficiaries. 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 any of the parties nor their Affiliates, successors or
assigns or other person shall be treated as a third party beneficiary in or
under this Agreement.
Section 14.16. Arbitration. The parties agree that any dispute hereunder
-----------
shall be resolved by arbitration in accordance with the rules of the American
Arbitration Association. Each party agrees that the determination of the
arbitrator shall be final and binding. The cost of the arbitration shall be
borne equally by the parties participating in the arbitration.
Section 14.17. Termination Expenses and Damages. Any expenses and damages
--------------------------------
awarded to the parties under Section 12.2.1 of the Stock Purchase Agreement
shall be shared proportionately among the parties to this Agreement based on
their respective out-of-pocket expenses, including reasonable legal, accounting
and investment banking fees and other expenses, incurred by them in connection
with the transactions contemplated by this Agreement, the Stock Purchase
Agreement and the Allocation Agreement.
32
Section 14.18. Termination by Bank Party; Seller Remedies. In the event
------------------------------------------
that CB, LSB or MSB is unwilling or unable to perform its obligations hereunder,
the parties expressly acknowledge and agree that Seller shall be entitled to
assign such party's rights and obligations to a third party unless another party
to this Agreement agrees to assume such party's rights and obligations hereunder
within 30 days after notice to the other parties by Seller of such
circumstances. Seller agrees to consult with all the parties hereto with
respect to selection of the assignee, which shall remain in Seller's sole
discretion. In the event that the failure of a bank party to perform its
obligations hereunder is due to circumstances which are within such party's
control or can be addressed by such Party without unreasonable financial burden,
such party shall be liable to Seller for the difference between what the Seller
would have received from such party in accordance Section 3.1 hereof and the
amount actually received pursuant to the exercise of Seller's rights under this
Section, in addition to any remedy available under Section 14.4.
Section 14.19. Survival. Except as otherwise provided in this Agreement,
--------
the representations, warranties, covenants and other agreements made by the
parties herein shall survive the Closing Date; provided, however, the
representations and warranties contained in Sections 8 and 9 and the covenants
in Sections 10 and 11 hereof shall survive only until fifteen months after the
Closing Date.
33
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed, by their duly authorized representatives, as of the day and year first
above written.
PM HOLDING, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------
PM TRUST HOLDINGS COMPANY
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------
▇▇▇▇▇▇▇ BANK
By:
---------------------------------
LAKE SUNAPEE BANK, fsb
By:
---------------------------------
MASCOMA SAVINGS BANK
By:
---------------------------------
S-1
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed, by their duly authorized representatives, as of the day and year first
above written.
PM HOLDING, INC.
By:
---------------------------------
PM TRUST HOLDINGS COMPANY
By:
---------------------------------
▇▇▇▇▇▇▇ BANK
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------
Executive Vice President
LAKE SUNAPEE BANK, fsb
By:
---------------------------------
MASCOMA SAVINGS BANK
By:
---------------------------------
S-1
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed, by their duly authorized representatives, as of the day and year first
above written.
PM HOLDING, INC.
By:
---------------------------------
PM TRUST HOLDINGS COMPANY
By:
---------------------------------
▇▇▇▇▇▇▇ BANK
By:
---------------------------------
LAKE SUNAPEE BANK, fsb
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------
MASCOMA SAVINGS BANK
By:
---------------------------------
S-1
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed, by their duly authorized representatives, as of the day and year first
above written.
PM HOLDING, INC.
By:
---------------------------------
PM TRUST HOLDINGS COMPANY
By:
---------------------------------
▇▇▇▇▇▇▇ BANK
By:
---------------------------------
LAKE SUNAPEE BANK, fsb
By:
---------------------------------
MASCOMA SAVINGS BANK
By: /s/ ▇. ▇. ▇▇▇▇▇▇▇, PR.
---------------------------------
S-1