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Exhibit 10.1
PURCHASE AND ASSUMPTION AGREEMENT CONCERNING THE GRISWOLD, LEDYARD, AND PLAINFIELD BRANCHES
BETWEEN
PEOPLE’S BANK
and
PUTNAM SAVINGS BANK
DATED AS OF JUNE 13, 2005
TABLE OF CONTENTS
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PURCHASE AND ASSUMPTION AGREEMENT
This Purchase And Assumption Agreement, (the “Agreement”) made and entered into as of the 13 TH day of June, 2005, by and between PEOPLE’S BANK organized under the laws of the State of Connecticut, and having its principal place of business in Bridgeport, Connecticut (“Seller”), and Putnam Savings Bank, organized under the laws of the United States of America and having its principal place of business at 40 Main Street in Putnam, Connecticut, 06260 (“Purchaser”).
RECITALS
WHEREAS, Seller wishes to sell its bank branches located at the following locations: 461 Voluntown Rd, Rt 138, Griswold, CT 06351 ( the “Griswold Branch”); 1616 Route 12, Gales Ferry, CT 06335 (the “Ledyard Branch”); and 67 Lathrop Rd, Plainfield, CT 06374 (the “Plainfield Branch”), each referred to as a “Branch” and collectively referred to as the “Branches”; and
WHEREAS, in connection with the sale of the Branches, Seller, desires to transfer certain assets and transfer certain deposit liabilities associated with the Branches, and Purchaser desires to purchase these assets and assume these deposit liabilities from Seller pursuant to the terms and conditions set forth herein;
NOW THEREFORE, in consideration of the mutual promises herein set forth and other valuable consideration, each of the parties hereto agree as follows:
DEFINITIONS
Wherever used herein, the following words and phrases, unless the context otherwise requires, shall have the following meanings.
1.1 “Assets” prior to the Estimation Date means those assets associated with the Branches and set forth in the Schedule of Assets attached hereto as Schedule I. On and after the Estimation Date and prior to the Closing Date “Assets” means those assets set forth in the Updated Schedule of Assets. On and after the Closing Date “Assets” means those assets transferred to Purchaser pursuant to this Agreement as set forth in the Final Schedule of Assets delivered to Purchaser on the Settlement Date.
1.2 “Book Value” means the dollar amount stated on the books of Seller as of the Closing Date after adjustment for differences in accounts, suspense items, unposted debits and credits, and other similar adjustments or corrections made in accordance with generally accepted accounting principles.
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1.3 “Branch Premises” means the banking houses presently leased by Seller and occupied by the Branches including safe deposit boxes and certain furniture, fixtures, and equipment located thereon, all as more particularly desribed in the Lease Assignments.
1.4 “Branch Employees” means Seller’s employees who are assigned to the Branches, or become assigned to the Branches prior to the Closing Date.
1.5 “Business Day” means a day other than a Saturday, Sunday, Federal legal holiday or legal holiday under the laws of the State of Connecticut, or a day on which the principal office of Seller is closed.
1.6 “Cash on Hand” means all petty cash, vault cash, teller cash, cash in the ATM located on the premises of the Branches, and the value of foreign currency, if any, at the Branches at any point in time.
1.7 “Closing Date” means the third Business Day following receipt of all Regulatory Approvals, the expiration of all waiting periods, and the satisfaction or waiver of all conditions, unless otherwise agreed by the parties. The parties will use their best efforts to assure that the Closing Date is no later than September 23, 2005. “Closing” means the consummation of the transaction contemplated hereby as described in Article IX.
1.8 “Customer” or “Customers” mean the owner(s) of the Deposits, the renter(s) of the Safe Deposit Boxes, and/or the borrowers under the terms and conditions of the Loans.
1.9 “Deposits” or “Deposit Accounts” prior to the Estimation Date means the deposit accounts to be assumed by Purchaser pursuant to this Agreement as set forth in Schedule II. On and after the Estimation Date and prior to the Closing Date “Deposits” or “Deposit Account” means those deposits set forth in the Updated Schedule of Deposits, and on and after the Closing Date “Deposits” or “Deposit Accounts” means those deposits transferred to Purchaser pursuant to this Agreement as set forth in the Final Schedule of Deposits delivered to Purchaser on the Settlement Date.
1.10 “Effective Time” means 5:00 p.m. on the Closing Date.
1.11 “Estimation Date” means the close of business on such date as is mutually agreed upon by Seller and Purchaser which shall be at least five (5) days prior to the Closing Date or such other date as agreed to in writing by Seller and Purchaser.
1.12 “Lease Assignments” means the assignments of the leased premises occupied by each Branch pursuant to the terms and conditions of the Assignment and Assumption of Lease Agreement executed by Purchaser for each Branch on or before the Closing Date, which shall be substantially in conformance with the form attached hereto as Exhibit A.
1.13 “ Loans ” prior to the Estimation Date means those retail and commercial loans and lines of credit set forth in the Schedule of Assets. On and after the Estimation Date and prior to the Closing Date “Loans” means those loans set forth in the Updated Schedule of Assets, and on and after the Closing
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Date “Loans” means those loans transferred to Purchaser pursuant to this Agreement as set forth in the Final Schedule of Assets delivered to Purchaser on the Settlement Date, which shall be prepared consistent with generally accepted accounting principles.
1.14 “Miscellaneous Assets” prior to the Estimation Date means, those Assets, if any, appearing on the Schedule of Assets, other than the Loans, overdrafts, and Safe Deposit Box Accounts, and including only that personal property located at the Branches specifically listed on the Schedule of Assets. On and after the Estimation Date and prior to the Closing Date “Miscellaneous Assets” means those Assets set forth in the Updated Schedule of Assets, other than the Loans, overdrafts, and Safe Deposit Box Accounts, and includes without limitation, only that personal property located at the Branches specifically listed on the Schedule of Assets. On and after the Closing Date “Miscellaneous Assets” means those Assets, other than the Loans, overdrafts, and Safe Deposit Box Accounts, and includes only that personal property located at the Branches specifically listed on the Schedule of Assets, which shall be transferred to Purchaser pursuant to this Agreement as set forth in the Final Schedule of Assets delivered to Purchaser on the Settlement Date. In no event shall the term “Miscellaneous Assets” include any hardware, software, equipment, or other personal property located in the Branches which is considered to be part of the infrastructure of the Seller, including without limitation the routers located in the Branches, the phone lines to and from the Branches, the security devices for the Branches, and the software loaded on any of the equipment located in the Branches. Further, to the extent the term “Miscellaneous Assets” includes any equipment, such as ATM’s, computers, servers, TAU machines or microencoders, Seller may elect to either (i) clean such equipment of all of Seller’s information and software, or (ii) replace any such piece of equipment with comparable equipment, or (iii) give the Purchaser a credit equal to the net Book Value of such equipment.
1.15 “Record” or “Records” means all records, whether paper, microfiche, microfilming, electronic or other medium pertaining solely to the Deposits or Assets necessary or required by law to consummate the transfer contemplated hereby. For any Record which Seller is required to provide pursuant to the terms hereof, Seller may elect the medium in which said Record will be delivered.
1.16 “Regulatory Approvals” means all approvals, permits, authorizations, waivers, or consents of governmental agencies or authorities necessary to permit the consummation of the transaction contemplated under this Agreement.
1.17 “Safe Deposit Boxes” means the safe deposit boxes located at the Branches including the removable safe deposit boxes and safe deposit stacks in the vault and all keys and combinations thereto. A list of the Safe Deposit Boxes is attached as Schedule III. A “Safe Deposit Box Account ” means a Safe Deposit Box rental agreement entered into by Seller and a Customer or Customers pursuant to which Seller and its Customers have attained certain rights, benefits, and obligations with respect to the rental of the Safe Deposit Boxes. A list of the Safe Deposit Box Accounts is included in the Schedule of Assets. On and after the Estimation Date and prior to the Closing Date “Safe Deposit Box Accounts” means those safe deposit box accounts set forth in the Updated Schedule of Assets, and on and after the Closing Date “Safe Deposit Box Accounts” means those safe deposit box accounts transferred to Purchaser pursuant to this Agreement as set forth in the Final Schedule of Assets delivered to Purchaser on the Settlement Date.
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1.18 “Schedule of Assets” means the list of Assets attached hereto as Schedule I. The “Updated Schedule of Assets” shall be the list of Assets updated and delivered by Seller to Purchaser prior to the Closing Date in accordance with the terms of this Agreement. The “Final Schedule of Assets” shall be the list of Assets actually transferred by Seller to Purchaser as of the Closing Date, which shall be delivered by Seller to Purchaser on or before the Settlement Date in accordance with the terms of this Agreement.
1.19 “Schedule of Deposits” means the list of all Deposits attached hereto as Schedule II. The “Updated Schedule of Deposits” shall be the list of Deposits updated and delivered by Seller to Purchaser prior to the Closing Date in accordance with the terms of this Agreement. The “Final Schedule of Deposits” shall be the list of Deposits as of the Closing Date and delivered by Seller to Purchaser on or before the Settlement Date in accordance with the terms of this Agreement.
1.20 “Seller’s Knowledge,” “knowledge of Seller,” or any phrase of similar import means the collective actual knowledge of an officer of the Seller at the level of Vice President or above.
1.21 “Settlement Date” means the first Business Day immediately after the day which is thirty (30) days after the Closing Date, or such other date prior thereto as may be agreed upon in writing by Seller and Purchaser.
TRANSACTION OVERVIEW
2.1 Transaction . (a) Pursuant to the terms and conditions of this Agreement, (1) Seller shall assign to Purchaser all of Seller’s right, title, and interest in and to the Deposits and Purchaser shall assume the Deposits and all obligations associated therewith as more particularly described in Article III; (2) Seller shall sell, assign, and transfer the Assets to Purchaser and Purchaser shall purchase the Assets as more particularly described in Article IV; (3) Purchaser shall assume, honor and fully and timely pay, perform, and discharge all of Seller’s obligations and liabilities of every type and character relating to the Deposits and Assets all beginning at the Effective Time; and (4) Seller shall assign the leases related to the Branch premises to Purchaser and Purchaser shall accept such assignment and assume all obligations under the leases in accordance with the Assignment and Assumption of Lease Agreement executed for each Branch lease in the form attached as Exhibit A.
(b) Purchaser understands and agrees that it is purchasing only the Assets and assuming only the Deposits and other liabilities as specified in this Agreement and, except as may be expressly provided for in this Agreement, Purchaser has no interest in, right to, or obligations relating to any other business relationship which Seller or any affiliate of Seller may have with any Customer or which in any way may have arisen out of or in connection with the Branches and/or activities taking place at the Branches or with Branch Employees.
2.2 Interim Operations . Beginning on the date of this Agreement and ending at the Effective Time, Seller shall continue to conduct deposit and safe deposit box business at the Branch in substantially the same manner as it has done prior to the date of this Agreement. If new deposit accounts are opened
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at the Branch or any new loans secured by Deposits are made at the Branch during this time, Seller shall include the new deposit account and/or loan secured by deposit in the Updated and Final Schedules of Deposits and/or in the Updated and Final Schedules of Assets, as appropriate, provided that all Regulatory Approvals necessary for the transfer of such new deposits and/or loans have been obtained and the transfer shall be subject to the terms and conditions of such Regulatory Approval, if any, and further provided that any new deposit account is held by a Customer who has no other relationship with the Seller other than (i) the new deposit account or other Deposit, (ii) a loan secured by the new deposit account and/or any other Deposit, and/or (iii) as the renter of one or more Safe Deposit Boxes, and further provided that the account can legally be transferred. In the event that a new account is opened by a Customer who does not primarily transact their business at one of the Branches, the new account shall not be included in the Updated or Final Schedule of Deposits.
2.3 Defense of Claims . (a) In the event that any claim, protest, suit, or other proceeding is instituted against Purchaser related to this Agreement and/or the actions contemplated herein, Purchaser shall immediately inform Seller in writing. Seller shall have the right, at its discretion and expense, to intervene in such litigation and Purchaser hereby consents to such intervention.
(b) In the event that any claim, protest, suit, or other proceeding is instituted against Seller related to this Agreement and/or the actions contemplated herein, Seller shall immediately inform Purchaser in writing. Purchaser shall have the right, at its discretion and expense, to intervene in such litigation and Seller hereby consents to such intervention.
2.4 Continuation of Business . Purchaser agrees to provide full service banking at the Branches commencing on the first Business Day after the Closing Date.
ASSUMPTION OF DEPOSIT LIABILITIES
3.1 Deposits Assumed by Purchaser . Deposits consist of retail and commercial demand deposits, money market accounts, certificates of deposits and savings deposits and shall include all uncollected items included in the Deposit Account balances and credited on the books of the Seller as of the Closing Date as listed on the Final Schedule of Deposits. Seller agrees to transfer to Purchaser and Purchaser agrees to assume on and as of the Closing Date, all of Seller’s obligations and liabilities of every type and character relating to the Deposits at Book Value including accrued and unpaid interest thereon computed up to and including the Closing Date. Purchaser further agrees that as of the Closing Date it shall pay, perform, and discharge the duties, obligations, and responsibilities arising from and after the Effective Time to the extent attributable to the Deposits.
3.2 Interest on Deposit Liabilities Assumed . Seller will post interest earned on the Deposits according to Seller’s normal posting schedule. On the Closing Date, Seller will pass to the Purchaser interest accrued from Seller’s last scheduled posting date up until the Effective Date, and Purchaser shall be responsible for paying said interest accrued on the Deposits to the Customers. Purchaser agrees that it will accrue and pay interest on Deposit Account liabilities assumed pursuant to
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Section 3.1 in accordance with the terms of the respective Deposit Account agreements between the Seller and the Deposit Account Customers commencing on the Closing Date at the Effective Time.
3.3 Successor Custodian . Effective at the Effective Time, Seller hereby appoints Purchaser as the successor custodian to Seller under the Deposits consisting of individual retirement accounts, simplified employee pension accounts, and Keogh accounts, and Purchaser hereby accepts from Seller the appointment to serve in such capacity from and after the Closing Date and to service such Deposits in the manner provided by law and in accordance with the terms and conditions of applicable documents relating to such Deposit Account liabilities.
3.4 Notice to Customers Pending Regulatory Approval . Purchaser, at its sole cost and expense, shall notify Deposit Account Customers by letter, sent by first class U.S. mail, in a form and at a time reasonably acceptable to Seller, of the pending transaction, and in particular Purchaser’s intention to assume the Deposit Account liabilities on the Closing Date. Seller agrees to provide a file in order to create this mailing. The letter may be sent jointly with the Seller subject to the prior agreement and approval by Seller. Between the date of this Agreement and the Closing Date, Seller agrees to provide Purchaser with a copy of any written communication regarding the transaction contemplated hereby sent by Seller to its Customers at least three Business Days before the mailing or transmission of any such communication to such Customers, provided that the law does not require that the communication be made to a Customer or Customers at such a time that it will not allow for delivery of the communication to Purchaser three Business Days before delivery to the Customer(s).
3.5 Notice to Depositors Subsequent to Regulatory Approval . As soon as possible subsequent to the procurement of all Regulatory Approvals and prior to the Closing Date, Purchaser, at its sole cost and expense, shall notify Deposit Account Customers of the receipt of Regulatory Approvals by sending a letter, by first class U.S. mail, in a form reasonably acceptable to Seller. Purchaser may utilize Seller’s files to create this mailing, which also may be sent jointly with the Seller subject to the prior agreement and approval by Seller. In addition, these notification letters shall include the following as applicable.
(a) Purchaser’s Check Forms. Such letters sent to Deposit Account Customers who have checking accounts shall (i) include a notification to those Deposit Account Customers whose accounts are then covered by any type of overdraft protection offered by Seller that, from and after the Effective Time, all such overdraft protection from Seller shall terminate, or shall terminate and be replaced by such other overdraft protection as Purchaser chooses to offer, if any, and (ii) furnish the Deposit Account Customer with checks at no charge to the Customer using the forms of Purchaser and instruct these Customers to utilize such checks on Purchaser’s forms on and after the Closing Date and thereafter to destroy any unused checks on Seller’s forms; and
(b) ATM/Debit Cards. Purchaser shall use best efforts to make sure that there is no interruption in the Customer’s ability to access their Accounts by utilizing ATM/Debit cards. In order to do so, Purchaser shall issue new account numbers to the Customers in sufficient time for new ATM/Debit cards to be issued and distributed to such Customers prior to the Closing Date. Purchaser shall, prior to the Closing Date, furnish ATM/Debit Cards to Deposit Account Customers to replace Seller’s ATM/Debit cards and mail to these Customers a letter explaining when the existing ATM/Debit Card will be
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deactivated with instructions to destroy the existing card at that time and when the new ATM/Debit Card will be activated.
3.6 Seller’s Final Customer Statements . At Seller’s sole cost and expense, Seller shall issue, as of the Closing Date, standard account statements for each statement savings, NOW, and checking account included in the Deposit Account liabilities. Such final statements shall be sent to the Customers within a reasonable period of time after the Closing Date. Passbook transaction information that has not been posted to a passbook as of the Closing Date will be passed by Seller to Purchaser via paper report listings, magnetic tape or other form selected by Seller within a reasonable period of time after the Closing Date. Purchaser shall then be responsible for posting on passbooks the transactions reflected on such listings, tapes or other form for passbook Deposit Accounts.
3.7 Payment of Deposit Liabilities After Effective Time . From and after the Effective Time, Purchaser shall: (i) pay all properly drawn and timely presented checks, negotiable orders of withdrawal drafts and debits, and other withdrawal orders presented to Purchaser by Deposit Account Customers, whether drawn on checks, negotiable orders of withdrawal, drafts, or other withdrawal order forms provided by Seller or by Purchaser; (ii) in all other respects discharge, in the usual course of the banking business, the duties and obligations of Seller with respect to the balances due and owing to the Deposit Account Customers; provided, however, that Purchaser’s obligations pursuant to this paragraph to honor checks, negotiable orders of withdrawal drafts, and other withdrawal orders on forms provided by Seller and carrying its imprint (including its name and transit routing number) shall not apply to any such check, negotiable order of withdrawal, draft, or other withdrawal order presented to Purchaser more than sixty (60) days following the Closing Date.
3.8 Depositor Objections . Purchaser hereby acknowledges that if, after the Effective Time, any Deposit Account Customers, instead of accepting the obligation of Purchaser to pay the Deposit liabilities (including accrued interest thereon) assumed hereunder, shall demand payment from Seller for all or any part of any such Deposit Account liabilities (including accrued interest thereon), Seller shall not be liable or responsible for making such payment. If any such Deposit Account Customer draws a check, draft, or withdrawal order against the Deposit Account liabilities which is presented or delivered to Seller not later than sixty (60) days after the Closing Date, Seller shall use its reasonable efforts to batch all such checks, drafts, or withdrawal orders and to deliver the same to Purchaser at Purchaser’s cost. 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, or withdrawal orders shall not result in any liability or obligation of Seller and shall not affect any of the rights of Seller under this Agreement. In the event Seller, in its sole discretion, should pay any such check, draft, or withdrawal order, Purchaser shall immediately, upon demand by Seller, reimburse Seller for such payment or charge, provided there are sufficient funds in the subject Deposit Account, and if there are not sufficient funds, Purchaser shall immediately reimburse Seller when funds become available in said Deposit Account. Seller shall not be deemed to have made any representations or warranties to Purchaser with respect to any such checks, drafts, or withdrawal orders, and any such representations or warranties implied by law are hereby disclaimed and are the responsibility of Purchaser.
3.9 Uncollected Checks Returned to Seller . Purchaser shall promptly pay to Seller an amount equivalent to the amount of any checks, negotiable orders of withdrawal drafts, or any other
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withdrawal orders returned uncollected to Seller after the Effective Time and which (i) were credited as of the Effective Time to any Deposit Account or (ii) had been cashed by Seller prior to the Effective Time if Seller had placed an equivalent hold upon a Deposit Account pending collection of such item prior to the Effective Time, provided such hold is reflected on the books and records of Seller at the Effective Time. However, in the event that Seller shall have failed to make or properly reflect in the information provided to Purchaser any provisional credit or hold on any such Deposit Accounts in respect of uncollected funds represented by any such item, Purchaser’s obligations hereunder in respect of such item shall be limited to the amount of collected funds in the Deposit Account upon which the returned item was drawn provided that the Purchaser has closed all Deposit Accounts in the name of the holder of the Deposit Account on which the returned uncollected item was received.
3.10 Automated Clearing House System . After the Effective Time, Purchaser will make every reasonable effort to notify immediately all originators of Automated Clearing House (“ACH”) entries affecting Deposit Accounts of the transfer of the Deposits to Purchaser on the Closing Date. Unless otherwise agreed to by Purchaser and Seller, for a period of sixty (60) days after the Closing Date, on each Business Day, Seller will deliver to Purchaser each previous Business Day’s transactions via an ACH format tape or paper listing of all ACH entries received by Seller for debit or credit to such Deposit Accounts, accompanied by either a check or deposit advice to a settlement account with the Seller for the amount by which such credits exceed debits, or an invoice or charge advice to a settlement account with the Seller, for the amount by which such debits exceed credits, which invoice shall be paid by Purchaser on the same Business Day if received before 12:00 noon local time or on the next Business Day if received after 12:00 noon local time. Purchaser shall promptly pay all fees and other expenses incurred in connection with rerouting any ACH transactions, including without limitation any fees to be paid to the Federal Reserve Bank.
3.11 Deposit Account Overdrafts . Deposit Account overdrafts approved with respect to ledger dates on or after the Effective Time will be the responsibility and risk of Purchaser. Deposit Account overdrafts approved with respect to ledger dates prior to the Effective Time will be the responsibility and risk of Seller. Deposit Account overdrafts approved with respect to ledger dates prior to the Effective Time will initially be the responsibility and risk of Purchaser; provided, however, that Purchaser shall have the right to re-transfer any such overdrafts back to Seller for its responsibility and risk within five (5) Business Days following the Closing Date, and Seller will repurchase all rights in respect of such overdrafts from Purchaser for the amount of the overdrafts outstanding as of the Effective Time, and provided further, that Purchaser has closed all Deposit Accounts on which such overdrafts exist not later than the date of their re-transfer.
3.12 Interest Reporting . Unless otherwise agreed to by the parties, Seller will report to applicable taxing authorities and holders of Deposit Accounts, all interest which Seller has credited to, withheld from, and any early withdrawal penalties imposed upon the Deposit Accounts by Seller, up to the Effective Time, and Purchaser will report to the applicable taxing authorities and holders of Deposit Accounts, , all such interest credited to, withheld from, and early withdrawal penalties imposed upon such Deposit Accounts after the Effective Time.
3.13 Withholding . Seller will continue backup withholding and remittance up until the Effective Time. Any amounts required by any governmental agencies to be withheld from any of the Deposit
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Accounts up until the Effective Time will be withheld by Seller in accordance with applicable law or appropriate notice from any governmental agency and will be remitted by Seller to the appropriate agency on or prior to the applicable due date. Any such withholding required to be made on or subsequent to the Effective Time shall be withheld by Purchaser in accordance with applicable law or the appropriate notice from any governmental agency and will be remitted by Purchaser to the appropriate agency on or prior to the applicable due date.
3.14 IRS Notices . Unless otherwise agreed by the parties, Seller shall be responsible for delivering to payees all IRS notices with respect to information reporting and tax identification numbers with respect to the Deposit Accounts required to be delivered for all periods up until the Effective Time, and Purchaser shall be responsible for delivery to payees all such notices with respect to the Deposit Accounts required to be delivered for all periods beginning on and following the Effective Time. Purchaser and Seller shall, prior to the Effective Time, consult (and Seller shall take such actions as are necessary) to permit Purchaser timely to deliver notices required to be delivered after the Closing Date.
3.15 Liability Related to IRS Regulations . Seller shall bear the responsibility and liability for and pay all penalties associated with missing taxpayer identification numbers and U.S. Treasury reclamations, and any failures to comply with IRS regulations that occurred prior to the Effective Time. Purchaser shall be responsible for complying with all IRS regulations and requirements after the Effective Time, including without limitation obtaining missing taxpayer identification numbers.
PURCHASE OF ASSETS
4.1 Assets Purchased by Purchaser . The Purchaser agrees to purchase the Assets as of the Closing Date, and the Seller agrees to sell, assign, transfer, convey, and deliver to the Purchaser all right, title, and interest of the Seller in and to the Assets. These Assets are set forth in the Schedule of Assets attached hereto as Schedule I and include: (a) All Cash on Hand as of the Effective Time; (b) Loans fully secured by a Deposit(s); (c) Personal and business lines of credit associated with any demand Deposit; (d) Overdrafts, if any, not subject to a line of credit agreement associated with a demand Deposit Account; (e) Safe Deposit Box Accounts, including rental and other fees, if any attributable to any rental period covering the time from and after the Effective Time; (f) Records and other documents as provided in Article IX; (g) Miscellaneous Assets, if any (h) Rights under the lease agreements related to the Branches; (i) The Customer lists delivered to Purchaser pursuant to the terms of this Agreement; and (j) Rights of action related to any liabilities assumed hereunder.
Purchaser further agrees that as of the Closing Date it shall pay, perform, and discharge the duties, obligations, and responsibilities arising from and after the Effective Time to the extent attributable to the Assets, including but not limited to (i) all of Seller’s obligations and liabilities under the Loans, which shall
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include obligations of Seller, if any, to renew or make additional extensions of credit pursuant to the terms and conditions of the Loans, (ii) all of Seller’s obligations and liabilities under the Safe Deposit Box rental agreements and/or other agreements, if any, related to the Safe Deposit Box Accounts, and (iii) all of Seller’s obligations and liabilities under the leases for the Branches and any other contracts being transferred in connection with the purchase contemplated hereby.
4.2 Closing Without Recourse; Limitation of Warranties . EXCEPT AS OTHERWISE SPECIFICALLY PROVIDED FOR IN THIS AGREEMENT, SELLER MAKES NO REPRESENTATIONS OR WARRANTIES WHATSOEVER WITH RESPECT TO THE ASSETS, EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, ANY WARRANTIES WITH RESPECT TO MERCHANTABILITY, FITNESS, TITLE, ENFORCEABILITY, COLLECTIBILITY, DOCUMENTATION OR FREEDOM FROM LIENS OR ENCUMBRANCES (IN WHOLE OR IN PART). All Loans transferred to Purchaser pursuant to this Agreement shall be transferred without recourse and without any representations or warranties whatsoever (including, without limitation, any representations or warranties as to the enforceability or collectibility of any such Loans, the creditworthiness of any obligors or guarantors thereunder, or the value or adequacy of documentation or collateral).
4.3 Loan Assignments . On or before and effective as of the Closing Date, Seller shall assign to Purchaser without recourse all promissory notes representing the outstanding indebtedness under each Loan pursuant to an assignment in substantially the form of Exhibit B attached hereto.
4.4 Loan Payments Received After Closing Date . From and after the Closing Date, all rights arising out of the Loans shall vest in the Purchaser, and any payments due and received after the Closing Date by the Seller shall be credited to the Purchaser less any past due amounts owed to the Seller.
4.5 Agreement With Respect to Safe Deposit Box Accounts . Seller agrees to transfer to Purchaser and Purchaser agrees to assume on and as of the Closing Date, all of Seller’s obligations and liabilities of every type and character relating to the Safe Deposit Box Accounts. Purchaser further agrees that as of the Closing Date it shall pay, perform, and discharge the duties, obligations, and responsibilities arising from and after the Effective Time to the extent attributable to the Safe Deposit Box Accounts.
4.6 Notices to Obligors on Loans . Purchaser shall, after procurement of all Regulatory Approvals and prior to the Closing Date, prepare and transmit, at Purchaser’s sole cost and expense, a notice to each obligor on each Loan, to the effect that the Loan shall be transferred to Purchaser on the Closing Date and directing that payments be made 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, Purchaser agrees to issue new notices or coupon books reflecting the name and address of Purchaser as the person to whom and place at which payments are to be made. Such notice may be included in the notice to Deposit Account Customers described in Section 3.5 of this Agreement. The form and timing of this notice shall be reasonably satisfactory to Seller.
4.7 Notices to Customers with Safe Deposit Box Accounts . Purchaser shall, after procurement of all Regulatory Approvals and prior to the Closing Date, prepare and transmit, at
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Purchaser’s sole cost and expense, a notice to Customers having a Safe Deposit Box Account, to the effect that the Safe Deposit Box Account shall be transferred to Purchaser on the Closing Date and directing that rental and any other payments related to such Safe Deposit Box Account due and payable on or after the Closing Date be made 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. Such notice may be included in the notice to Deposit Account Customers described in Section 3.5 of this Agreement for Customers having both one or more Safe Deposit Box Accounts and one or more Deposit Accounts.
4.8 Default on Loan Payments to Seller . If the balance due on any Loan which constitutes an Asset has been reduced by Seller as a result of a payment by check or draft received prior to the Effective Time, which item is returned to Seller after the Effective Time and prior to the Settlement Date, the asset value represented by such Loan shall be correspondingly increased and an amount in cash equal to such increase shall be promptly paid by Purchaser to Seller, provided the Loan and the Deposit Account securing the Loan remain in place on the date the item is returned and the Loan has not been in default for ninety (90) days or more.
4.9 Sale Recorded as Sale of Assets . The sale of each Asset shall be reflected on the Seller’s balance sheet and other financial statements and for federal and state income tax purposes, as a sale of assets by the Seller. The purchase of each Asset shall be reflected on the Purchaser’s balance sheet and other financial statements and for federal and state income tax purposes, as a purchase of assets by the Purchaser.
4.10 Branch Premises . On the Closing Date the Purchaser shall assume the duties and obligations under the leases applicable to the Branches pursuant to the terms and conditions set forth in the Assignment and Assumption of Lease Agreement executed by Purchaser for each Branch on or before the Closing Date, each of which shall be substantially in conformance with the form attached hereto as Exhibit A. Prior to the Closing Date, Purchaser shall take whatever action is necessary to transfer the utilities serving each Branch into the name of the Purchaser. Prior to the Effective Time, Seller shall remove all of its promotional material, forms, signs, and other proprietery information and supplies from the Branches, at Seller’s sole cost and expense.
REPRESENTATIONS AND WARRANTIES OF PURCHASER
The Purchaser represents, warrants and agrees that, as of the date of this Agreement:
5.1 Corporate Organization . Purchaser is an FDIC insured depository institutution duly organized, validly existing, and in good standing under the laws of the United States of America with its principal place of business located at 40 Main Street, Putnam Connecticut 06260. Purchaser has the requisite power and authority to enter into this Agreement and any other agreements to which Purchaser is party and that are contemplated by this Agreement.
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5.2 Corporate Authorization . The execution, delivery of this Agreement and the performance by Purchaser of its obligations hereunder have been duly authorized by all necessary corporate action on the part of Purchaser. This Agreement has been duly executed and delivered by Purchaser and, upon due execution and delivery by Seller, will constitute the legal, valid, and binding obligations of Purchaser, enforceable against Purchaser in accordance with its terms subject to bankruptcy, insolvency, reorganization, fraudulent conveyance, or similar laws affecting the enforcement of creditors’ rights in general and to general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).
5.3 Corporate Compliance . Purchaser is not in violation of or in default under any obligation, agreement, covenant, or condition contained in its articles of association or incorporation or its bylaws, and Purchaser is not in violation of, or in default under, any contract, lease, or other instrument to which it is a party (or which is binding on it or its assets), which violation or default, either individually or in the aggregate with all such other violations and/or defaults, would materially and adversely affect its business, operations, or financial condition, or its ability to perform, satisfy, or observe any obligation or condition under this Agreement. The execution and delivery of this Agreement by Purchaser and the performance of and compliance with the terms of this Agreement will not violate Purchaser’s articles of association or incorporation or by-laws or constitute a default under or result in a breach or acceleration of, any material contract, agreement, or other instrument to which Purchaser is a party or which may be applicable to Purchaser or its assets.
5.4 Legal and Regulatory Compliance . Purchaser is not in violation of any statute, regulation, order, decision, judgment, or decree of, or any restriction imposed by, the United States of America, any State, municipality, or other political subdivision or any agency of any of the foregoing, or any court or other competent tribunal having jurisdiction over it or its assets, or any foreign country having jurisdiction over it or its assets, in respect of the conduct of its business or the ownership of its properties, which, either individually or in the aggregate with all such other violations, would materially and adversely affect its business, operations, or condition (financial or otherwise) or its ability to perform, satisfy, or observe any obligation or condition under this Agreement. The execution, delivery and performance by Purchaser of this Agreement does not, and will not, violate any provision of any applicable law or regulation, or any order, writ, decree, or judgment of any court or governmental authority, and will not result in the creation of any lien on, or security interest in, its assets. Purchaser is in substantial compliance with all applicable fair lending laws, rules, and regulations, including but not limited to the Community Reinvestment Act of 1977 as amended (“CRA”) and has received a CRA rating of “Satisfactory” or better following its last CRA examination conducted by the appropriate federal supervisory agency.
5.5 Consents and Approvals . No consents or approvals of or filings or registrations with any governmental entity or with any third party are necessary in connection with the consummation by Purchaser of the purchase of Assets and assumption of Deposit liabilities and any other transactions contemplated under this Agreement except for the following Regulatory Approvals: (a) The application to be submitted by Purchaser and signed by Seller pursuant to Section 18(c) of the Federal Deposit Insurance Act to be approved by the Office of Thrift Supervision. (b) The filing, if any, required by the Hart Scott Rodino Act.
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Purchaser is an “eligible depository institution” as defined in Section 303.2(r) of the FDIC rules and regulations and reasonably expects to be “well-capitalized” as defined in the appropriate capital regulation and guidance of the Purchaser’s primary federal regulator immediately following the Closing Date. Purchaser is not aware of any reason why the Regulatory Approvals and other approvals, if any, required to be obtained by it in order to consummate the transactions contemplated under this Agreement would not be obtained within a time frame customary for transactions of the nature contemplated under this Agreement, specifically including but not limited to knowledge of weakness in Purchaser’s application(s) for Regulatory Approval related to regulatory capital requirements, anti-competitive effects, managerial competencies, and compliance with CRA requirements.
5.6 Brokers . Neither Purchaser nor any of its officers, directors, or employees has employed any broker or finder or incurred any liability for any broker’s fees, commissions, or finder’s fees in connection with the transactions contemplated herein,and Purchaser shall indemnify, defend and hold harmless Seller from any and all expenses (including without limitation attorney’s fees), fees, liabilities and claims against Seller arising out of any actions taken by the Purchaser or any of its officers, directors, employees or agents which could give rise to a claim for a broker’s, finder’s or similar fee or commission. This indemnification shall survive the Closing or the earlier expiration or termination of this Agreement.
REPRESENTATIONS AND WARRANTIES OF THE SELLER
The Seller represents, warrants, and agrees that as of the date of this Agreement:
6.1 Corporate Organization . Seller is an FDIC insured capital stock savings bank duly organized, validly existing, and in good standing under the laws of the State of Connecticut and doing business in the State of Connecticut. Seller has the requisite power and authority to enter into this Agreement and any other agreements to which Seller is party and that are contemplated by this Agreement.
6.2 Corporate Authorization . The execution, delivery of this Agreement and the performance by Seller of its obligations hereunder have been duly authorized by all necessary corporate action on the part of Seller. This Agreement has been duly executed and delivered by Seller and, upon due execution and delivery by Purchaser, will constitute the legal, valid, and binding obligations of Seller, enforceable against Seller in accordance with its terms subject to bankruptcy, insolvency, reorganization, fraudulent conveyance, or similar laws affecting the enforcement of creditors’ rights in general and to general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).
6.3 Corporate Compliance . Seller is not in violation of or in default under any obligation, agreement, covenant, or condition contained in its articles of association or incorporation or its bylaws, and Seller is not in violation of, or in default under, any contract, lease, or other instrument to which it is a party (or which is binding on it or its assets), which violation or default, either individually or in the aggregate with all such other violations and/or defaults, would materially and adversely affect its business, operations, or conditions (financial or otherwise), or its ability to perform, satisfy, or observe any obligation or condition
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under this Agreement. The execution and delivery of this Agreement by Seller and the performance of and compliance with the terms of this Agreement will not violate Seller’s articles of association or incorporation or by-laws or constitute a default under or result in a breach or acceleration of, any material contract, agreement, or other instrument to which Seller is a party and which are applicable to the Branches, and/or the Assets, including without limitation, the Branch leases.
6.4 Legal and Regulatory Compliance . Seller is not in violation of any statute, regulation, order, decision, judgment, or decree of, or any restriction imposed by, the United States of America, any State, municipality, or other political subdivision or any agency of any of the foregoing, or any court or other competent tribunal having jurisdiction over it or its assets, or any foreign country having jurisdiction over it or its assets, in respect of the conduct of its business or the ownership of its properties, which, either individually or in the aggregate with all such other violations, would materially and adversely affect its business, operations, or condition (financial or otherwise) or its ability to perform, satisfy, or observe any obligation or condition under this Agreement. The execution, delivery and performance by Seller of this Agreement does not, and will not, violate any provision of any applicable law or regulation, or any order, writ, decree, or judgment of any court or governmental authority, and will not result in the creation of any lien on, or security interest in, its assets. Seller is in substantial compliance with all applicable fair lending laws, rules, and regulations, including but not limited to the Community Reinvestment Act of 1977 as amended (“CRA”), and has received a CRA rating of “Satisfactory” or better following its last CRA examination conducted by its federal supervisory agency.
6.5 Consents and Approvals . No consents or approvals of or filings or registrations with any governmental entity or with any third party are necessary in connection with the consummation by Seller of the sale of Assets and transfer of Deposit liabilities and any other transactions contemplated under this Agreement except for the following Regulatory Approvals: (a) The application to be jointly submitted by Purchaser and Seller to the appropriate federal regulator pursuant to Section 18(c) of the Federal Deposit Insurance Act. (b) Branch sale application to be submitted to the Department of Banking for the State of Connecticut pursuant to C.G.S. §36a-145.
Seller is not aware of any reason why the regulatory and other approvals, if any, required to be obtained by it in order to consummate the transactions contemplated under this Agreement would not be obtained within a time frame customary for transactions of the nature contemplated under this Agreement, specifically including but not limited to knowledge of weakness in Seller’s application(s) for Regulatory Approval related to regulatory capital requirements, anti-competitive effects, managerial competencies, and compliance with CRA requirements.
6.6 No Brokers . Neither Seller nor any of its officers, directors, or employees has employed any broker or finder or incurred any liability for any broker’s fees, commissions, or finder’s fees in connection with the transaction contemplated herein other than Keefe, Bruyette & Woods and Seller represents and agrees that it shall be solely responsible for any and all fees and/or commissions due to Keefe, Bruyette & Woods related to the transactions comtemplated herein.
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6.7 Suits . There are no pending or to the Seller’s Knowledge threatened legal, administrative, arbitration, or other proceedings, claims, actions, or governmental investigation of any nature relating to the Assets and Deposits, Branch Employees or the Seller’s interest in the Branch Premises.
6.8 Deposits . The Deposits are insured by the FDIC to the fullest extent permitted by federal law and no action is pending or has been threatened by the FDIC against Seller with respect to the termination of such insurance. To the knowledge of Seller, the Deposits (i) are in all respects genuine and enforceable obligations of Seller and have been acquired and maintained substantially in compliance with all applicable laws, including (but not limited to) the Truth in Savings Act and regulations promulgated thereunder; and (ii) were acquired in the ordinary course of Seller’s business.
6.9 Loans (a) To Seller’s Knowledge and except as otherwise reflected on the Records, there are no material agreements, waivers, opinions of counsel, security or collateral documents, amendments, releases, discharges, or modifications or releases of collateral, representations or promises, written or oral, made by Seller or any of its affiliates, agents or employees with respect to the Loans which have not been disclosed to Purchaser by Seller and which would be binding upon Purchaser. Each of the Loans is assignable.
(b) The amounts listed as loan balances in the Schedule of Assets represent debt for actual monies borrowed.
(c) To Seller’s Knowledge and subject to any applicable bankruptcy, insolvency and other laws affecting the enforcement of creditors’ rights generally and general principles of equity, the documents representing such Loans (the “Loan Documents”) are in full force and effect, are valid and binding and enforceable against the parties thereto in accordance with their terms. Further to Seller’s Knowledge the balance of each Loan and the accrued and unpaid interest and fees thereon represents the genuine, legal, valid and binding payment obligation of the borrower of such Loan and no Loan is subject to any right of rescission, setoff, recoupment, abatement, diminution, counterclaim or valid defense by any borrower or guarantor thereunder. Seller is the sole lender under and owns the Loans free and clear of any encumbrance, lien, pledge, charge, claim, right of third parties or secondary interest. Each of the Loans was made in compliance with applicable banking laws, rules and regulations. (d) To Seller’s Knowledge Seller has performed all obligations required to have been performed by it under the Loan Documents except where the failure to have performed such obligations would not materially adversely affect any Loan. To Seller’s Knowledge, Seller has not received written notice and does not have any knowledge that any borrower is asserting any material claim against Seller or any defense to payment of such borrower’s obligations under any Loan Documents. To Seller’s Knowledge there are no claims, proceedings, actions, arbitrations, or investigations pending, or, to the knowledge of Seller, threatened, which if adversely determined, would have a material adverse effect on the Loans taken as a whole.(e) To Seller’s Knowledge, none of the Loans has been satisfied, cancelled, subordinated or rescinded and no collateral securing or supporting the Loans has been released from any existing lien nor has any instrument been executed that would effect any such release, cancellation, subordination or rescission.
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(f) Other than notices received or given which have been disclosed by Seller to Purchaser or as shown in the Loan files, to Seller’s Knowledge, Seller has not received or has not given any notice of termination with respect to any of the Loans.(g) To Seller’s Knowledge, Seller has not received written notice and does not have knowledge of any material default or breach of any material representation, agreement or covenant by any borrower under any of the Loan Documents which remains uncured for any Loan except as may be reflected in the Loan files(h) Upon delivery to Purchaser at the Closing of an assignment, in accordance with this Agreement, Purchaser shall have all rights, title and interests of Seller under the Loans purchased, except as otherwise specifically provided herein, and shall hold the Loans free and clear of any encumbrance, lien, pledge, charge, claim, right of third party or secondary interest except as otherwise reflected in the Loan files(i) With respect to each Loan, Seller has (unless otherwise provided in the relevant Loan Documents) a valid first priority perfected security interest (subject, however to any prior liens arising by operation of law) in all collateral described in the Loan Documents as security for such Loans.(j) To Seller’s Knowledge, there are no material defaults in the performance of any covenant or obligation to be performed under any Loan Document by any party thereto which default remains uncured and affects the enforceability of the Loan or Loans. Other than in the ordinary course of business, no waiver has been granted by Seller with respect to any Loan.(k) Other than as expressly provided for herein, Seller is not making, and shall not be deemed to be making, any representations or warranties with respect to the collectibility or credit quality of the Loans, the value or condition of any collateral securing the Loans, the creditworthiness or financial condition of the borrower under each of the Loans. Further, notwithstanding the foregoing representations and warranties, Purchaser for itself and its successors and assigns, hereby agrees that Seller shall not be liable in any way whatsoever for any breach or misrepresentation arising out of Section 6.9.6.10 FIRPTA . Seller is not a “foreign person” within the meaning of Section 1445 of the Internal Revenue Code.6.11 Employees . No Branch Employee is a party to any collective bargaining, employment, severance, termination, or change of control agreement, formal or written, or represented under any collective bargaining agreement relating to employment with Seller. Seller is unaware of any efforts during the past three years to unionize or organize the Branch Employees. .6.12 Records . To Seller’s Knowledge the Records are correct, accurate and complete in all material respects, have been maintained in material compliance with all applicable federal and state laws and regulations. The deposit- and lending-related forms, notices, statements and related documentation, as well as Seller’s policies, procedures and practices with respect thereto, used at the Branches comply in all material respects with applicable federal and state laws and regulations and customary banking practices.
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6.13 Tax Matters . To Seller’s Knowledge and to the extent not reflected in the Records, Seller has complied in all material respects, with the requirements of the IRS regarding taxpayer identification number certification, interest information reporting and backup withholding of interest payable in connection with Deposits. In all material respects, Seller has paid all taxes which it is required to withhold from amounts owing to employeesor holders of Deposits, and has made all material filings and tax and information returns with the appropriate tax authorities with respect to the Loans, if any such filings or returns were required. For all calendar years ending prior to or on the Closing Date, in all material respects, Seller has duly and timely sent to each holder of Deposits a Form 1099 (or a substitute form permitted by law) relating to interest, earnings or dividends paid on such accounts for those periods.
6.14 Other Assets .
(a) Except as reflected on the Records, Seller has good and marketable title to the Assets that the parties mutually agree Seller will sell to Purchaser and Purchaser will purchase from Seller.
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