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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report: July 2, 1996
UST Corp.
(Exact name of registrant as specified in its charter)
Massachusetts 0-9623 04-2436093
(State or other jurisdiction (Commission File No.) (IRS Employer
of incorporation) Identification No.
40 Court Street 02108
Boston, Massachusetts (Zip Code)
(Address of principal executive offices)
(617)726-7000
(Registrant's telephone number, including area code)
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<PAGE>
ITEM 2. ACQUISITION OF DISPOSITION OF ASSETS.
(a) On June 18, 1996, USTrust, the principal subsidiary of UST Corp. (the
"Company"), executed a Purchase and Assumption Agreement with The First
National Bank of Boston ("FNBB") and joined in for certain purposes by Bank of
Boston Corporation pursuant to which USTrust will purchase certain assets and
assume deposit liabilities booked at and allocated to twenty branches located
in the greater Boston, Massachusetts area. The purchase is conditioned on
USTrust's receipt of the regulatory approvals noted below and the consummation
of the pending merger of BayBanks, Inc. with and into a subsidiary of Bank of
Boston Corporation. Sixteen of the branches to be acquired are currently
operated as BayBank branches and four of the branches are currently operated by
FNBB. Ten of the branches are located in Middlesex County, with the remaining
ten divided equally between Norfolk and Suffolk Counties.
In this transaction USTrust will assume approximately $860 million in
deposit liabilities and will purchase approximately $ 510 million in loans to
businesses and other customers located within or in areas proximate to the
communities served by the branches (including approximately $127.5 million in
commercial and industrial loans and $382.5 million in residential mortgage,
home equity and other loans). In addition, USTrust will purchase real property
related to the owned branches and assume certain lease obligations with respect
to the leased branches. Upon consummation of the transaction, USTrust will pay
a premium equal to 7% of the aggregate average daily balance of deposit
liabilities assumed for the period commencing twenty business days prior to the
third business day prior to the closing date and ending on the third business
day prior to the closing date (approximately $60 million) and the remainder of
the consideration will be paid in cash and other assets. The Company does not
expect to issue any securities in connection with the transaction and expects
to recognize between $2 million and $2.5 million of transaction-related
expenses prior to consummation.
In connection with the foregoing transaction, USTrust will also offer
employment to an aggregate of approximately 130 BayBank and FNBB employees who
are employed currently at the twenty branches being acquired.
The transaction remains subject to receipt of regulatory approvals from
the Federal Deposit Insurance Corporation and the Massachusetts Commissioner of
Banks. It is currently expected that the transaction will be consummated in the
fourth quarter of 1996.
(b) The assets to be acquired by the Company's subsidiary, USTrust,
include the physical premises of (or the leases with respect to) the twenty
branches acquired and which were used by FNBB (and BayBank) as locations from
which to conduct its banking activities. USTrust will also acquire
substantially all of the personalty in these branches. These locations will
continue to be used as branches by USTrust.
<PAGE>
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION
AND EXHIBITS.
(a) and (b) Financial statements including pro forma financial
information will be provided within 60 days of the consummation of the proposed
transaction. At the current time, it is impracticable to provide information as
to the specific asset mix to be transferred and the dollar value of deposits to
be assumed.
(c) Exhibits
1. Purchase and Assumption Agreement, dated as of June 18, 1996,
between USTrust and The First National Bank of Boston and joined in by Bank of
Boston Corporation.
2. UST Corp.'s Press Release dated June 18, 1996 related to
acquisition by USTrust of twenty branches from The First National Bank of
Boston.
<PAGE>
SIGNATURES
Pursuant to the requirement of the Securities and Exchange Act of 1934,
the Company has duly caused this Report to be signed on its behalf by the
undersigned hereunto duly authorized.
UST Corp.
/s/ Neal F. Finnegan
Neal F. Finnegan
President and Chief Executive Officer
/s/ Eric R. Fischer
Eric R. Fischer
Executive Vice President, General
Counsel and Clerk
Dated: July 1, 1996
PURCHASE AND ASSUMPTION AGREEMENT
Agreement, dated as of June 18, 1996, between USTrust, a Massachusetts
trust company with its principal offices at 40 Court Street, Boston,
Massachusetts 02108 ("Purchaser"), and THE FIRST NATIONAL BANK OF BOSTON, a
national banking association with its principal offices at 100 Federal Street,
Boston, Massachusetts 02110 ("Seller").
WHEREAS, Bank of Boston Corporation, a Massachusetts Corporation and the
parent of Seller ("Bank of Boston Corporation"), and BayBanks, Inc., a
Massachusetts corporation ("BayBanks, Inc."), have entered into an Agreement and
Plan of Merger, dated as of December 12, 1995 (the "Merger Agreement"), pursuant
to which BayBank, N. A. ("BayBank") will become an indirect wholly-owned
subsidiary of Bank of Boston Corporation as a result of the merger of BayBanks,
Inc. with and into Boston Merger Corp., a Massachusetts corporation wholly-owned
by Bank of Boston Corporation (the "Merger");
WHEREAS, Seller and BayBank have entered into a Plan of Reorganization and
Agreement to Merge, dated March 28, 1996, pursuant to which such parties have
agreed that, after the Merger, BayBank will merge with and into the Seller with
the Seller being the surviving entity (the "Bank Merger");
WHEREAS, Seller desires to sell, and Purchaser desires to acquire, in
accordance with the terms and provisions of this Agreement, certain assets of
Seller and certain assets of BayBank which will be initially acquired indirectly
by Bank of Boston Corporation as a result of the Merger and which will be
subsequently acquired by the Seller as a result of the Bank Merger;
WHEREAS, Seller desires to assign to Purchaser, and Purchaser desires to
assume from Seller, in accordance with the terms and provisions of this
Agreement, certain liabilities of Seller and certain liabilities of BayBank
which will be initially acquired indirectly by Bank of Boston Corporation as a
result of the Merger and which will be subsequently acquired by the Seller as a
result of the Bank Merger; and
WHEREAS, Bank of Boston Corporation, as the initial indirect acquiror of
the assets and liabilities of BayBank to be transferred to Purchaser hereunder,
desires to join this Agreement for the sole purpose of agreeing to cause such
assets and liabilities to be transferred to Purchaser in accordance with the
terms and provisions of this Agreement.
<PAGE>
NOW, THEREFORE, in consideration of the premises and the mutual promises
and covenants contained herein and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, subject to the
terms and conditions set forth herein, Seller and Purchaser agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1. Defined Terms. As used herein, the following terms shall have
the following meanings:
"Accrued Interest" shall mean (a) with respect to the Deposit Liabilities,
the interest or dividends that have been accrued but not paid or credited on the
Deposit Liabilities, and (b) with respect to the Loans and the Advance Accounts,
interest, fees, costs and other charges that have accrued on or been charged to
the Loans or the Advance Accounts but not paid by the applicable borrower, or
any guarantor, surety or other obligor therefor, or otherwise collected by
offset, recourse to collateral or otherwise.
"ADA" shall mean the Americans with Disabilities Act of 1990, as amended.
"Additional Loans" shall have the meaning specified in Section 2.4.
"Adjusted Payment Amount" shall have the meaning specified in Section
3.3(a).
"Advance Accounts" shall mean all overdraft lines of credit to customers of
the Branches pursuant to customer agreements with respect to such lines in
connection with their opening or maintaining of Deposits transferred to
Purchaser pursuant hereto, plus any and all Accrued Interest thereon.
"Affiliate" shall mean as to any Person, a Person controlled by,
controlling or under common control with, the former Person, or a director,
officer, partner, joint venturer or member of the former Person or the latter
Person.
"Agency Agreement" shall have the meaning specified in Section 2.3.
"Appraised Value" shall have the meaning specified in Section 14.4(e).
<PAGE>
"Assets" shall have the meaning specified in Section 2.1
"Assignment and Assumption Agreement" shall have the meaning specified in
Section 5.3(c).
"Assumed Liabilities" shall have the meaning specified in Section 2.2.
"Bank of Boston Corporation" shall have the meaning specified in the
recitals hereto.
"Bank Merger" shall have the meaning specified in the recitals hereto.
"BayBank" shall have the meaning specified in the recitals hereto.
"BayBanks, Inc." shall have the meaning specified in the recitals hereto.
"BKB Separation Pay Plan" means the Bank of Boston Separation Pay Plan as
originally established effective as of June 15, 1996.
"Board" shall mean the Board of Governors of the Federal Reserve System.
"Branch Customers" shall mean, collectively, the Persons named as the
owners of the deposit accounts relating to the Deposits, the primary obligors
under the Loans and the parties to Safe Deposit Agreements with the Seller (and,
prior to the Bank Merger, BayBank).
"Branch Employees" shall mean the employees of the Seller (and, prior to
the Bank Merger, BayBank) listed on Schedule 1.1(b) attached hereto, and any
replacement in the ordinary course of business and consistent with past
practices of employees who shall leave Seller's or BayBank's employ between the
date hereof and the Transfer Date or fail to qualify for an offer of employment
under Section 11.6. Any replacement, if then employed by Seller, shall have a
performance rating of "meets expectations" or its equivalent. Schedule 1.1(b)
will be updated every forty-five (45) days prior to the Closing Date.
"Branch Leases" shall mean the leases for the Branches listed on Schedule
1.1(d) attached hereto.
"Branch Related Employees" shall mean such other employees of Seller (and,
prior to the Bank Merger, BayBank) involved in branch management, administration
and operations or small business or commercial lending, as shall be designated
<PAGE>
by Seller from time to time hereafter in writing to Purchaser for possible
interviews for employment with Purchaser.
"Branches" shall mean the branches of Seller (and, prior to the Bank
Merger, BayBank) listed on Schedule 1.1(c) attached hereto.
"Business Day" shall mean any day other than a Saturday or Sunday or a day
on which banks are authorized or required to close in the Commonwealth of
Massachusetts.
"Cash on Hand" shall mean all petty cash, vault and teller cash and cash in
automated teller machines located at the Branches (including foreign currency),
in each case as of the close of business at the respective Branch (6:00 p.m. for
each automated teller machine) on the Closing Date; as determined by an audit
conducted jointly by one or more employees of Seller and one or more employees
of Purchaser.
"CERCLA" shall mean Comprehensive Environmental Response, Compensation and
Liability Act, as amended, 42 U.S.C. 9601 et seq.
"Closing" shall mean the consummation of the purchase of the Assets and the
assumption of the Assumed Liabilities by the Purchaser pursuant hereto, subject
only to the payment of the Estimated Payment Amount and to the other actions
scheduled to occur on the Transfer Date.
"Closing Date" shall have the meaning specified in Section 5.1.
"Commercial Loans" shall mean, as of any date, loans which would be
reported by Seller (or, prior to the Bank Merger, BayBank) pursuant to the
instructions to Schedule RC-C to its or their Consolidated Reports of Condition
and Income for a Bank with Domestic and Foreign Offices (or any successor
regulatory report thereto) as "commercial and industrial loans" if such loans
were held as of the end of a calendar quarter.
"Competitive Businesses" shall have the meaning specified in Section 10.4.
"Confidentiality Agreements" shall mean (a) the Confidentiality Agreement,
dated as of June 3, 1996, between Bank of Boston Corporation and the Purchaser
and (b) the Confidentiality Agreement, dated as of June 5, 1996 between
BayBanks, Inc. and the Purchaser.
"Damages" shall have the meaning specified in Section 13.1.
<PAGE>
"Deposits" shall mean, as of the Transfer Date, the deposits (as such term
is defined under Section 3(l) of the FDIA) with respect to (a) accounts which,
as of the date hereof, are booked by Seller or BayBank at the Branches or which
shall be allocated to the Branches by Seller or BayBank in connection with the
sale of the Loans pursuant to Section 2.1 hereof, including without limitation,
deposits in accounts maintained pursuant to IRAs and Keogh Plans containing only
deposits (other than deposits in the form of stocks, bonds, mutual funds or
other securities) and (b) the additional accounts opened at the Branches after
the date hereof, including in each case collected and uncollected deposits and
Accrued Interest, except that Deposits shall not include the Excluded Deposits.
"Deposit Liabilities" shall mean the obligation to pay the principal
balances of, and Accrued Interest on, all accounts relating to the Deposits
substantially in accordance with the terms and provisions of the contracts or
relationships by which such accounts were created or as otherwise required by
applicable laws, regulations, rulings and orders.
"Draft Closing Statement" shall have the meaning specified in Section 3.2.
"Encumbrances" shall mean all mortgages, claims, charges, liens,
encumbrances, easements, limitations, restrictions, commitments and security
interests, except for statutory liens securing tax payments not yet due and
easements, restrictions and agreements which do not materially and adversely
affect the use of the properties or assets subject thereto or affected thereby
or which otherwise do not materially impair business operations at such
properties.
"Environmental Consultant" shall have the meaning specified in Section 12.1
"Environmental Due Diligence Date" shall mean the forty-fifth (45th) day
following the execution hereof or, if such day shall not be a Business Day, the
next Business Day thereafter.
"Environmental Due Diligence Period" shall mean the period commencing on
the date hereof and ending on the Environmental Due Diligence Date.
"Environmental Hazard" shall mean any pollutant, contaminant, toxic
substance, hazardous waste, hazardous material, or hazardous substance, or any
oil, petroleum, or petroleum product, as defined in or pursuant to RCRA, CERCLA,
the Federal Clean Water Act, as amended, or any other federal, state, or local
<PAGE>
environmental law, regulation, ordinance, rule, or by-law, whether existing as
of the date hereof or previously or subsequently enacted.
"Environmental Law" shall mean CERCLA and RCRA and similar state
environmental laws.
"Estimated Payment Amount" shall have the meaning specified in Section 3.2.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended.
"Estimated Purchase Price" shall have the meaning specified in Section 3.2.
"Excluded Commercial Products and Services" shall have the meaning
specified in the definition of Related Commercial Products and Services.
"Excluded Consumer Products and Services" shall mean consumer loan, trust,
credit card, brokerage, mutual fund, private banking and other consumer
financial services relationships offered or performed by the Seller at the
Branches other than consumer products or services comprising the Assets and
Assumed Liabilities.
"Excluded Deposits" shall mean (a) deposits with respect to accounts which
are booked or allocated by Seller or BayBank at any Branch and are held by
Seller or BayBank under or pursuant to any judgment, decree or order of any
court; (b) deposits with respect to accounts which are booked or allocated by
Seller or BayBank at any Branch and which are registered in the name of a trust
for which Seller or BayBank serves as trustee (other than IRA and Keogh Plan
deposits); (c) deposits with respect to accounts which are booked at or
allocated by Seller or BayBank to any Branch and for which Seller or BayBank
serves as guardian or custodian (other than IRA and Keogh Plan deposits); (d)
deposits securing, guaranteeing or otherwise relating to Excluded Loans; (e)
other deposits which are designated by Seller and agreed to by Purchaser as
"Excluded Deposits" on Schedule 1.1(e)(i) to be delivered to Purchaser prior to
the Closing, in each case as of the Transfer Date, (f) deposits secured by
assets of Seller that are not being transferred to the Purchaser pursuant to
Section 2.1 and (g) deposits of customers who have, or whose related businesses
have, significant business relationships with other offices of Seller, which
deposits are designated by Seller and consented to by Purchaser on Schedule
1.1(e)(ii).
<PAGE>
"Excluded Loans" shall have the meaning specified in Section 2.4.
"Excluded Personalty" shall mean (a) artwork, supplies, signs, trade
fixtures or equipment specifically identifying or relating to Seller (or, prior
to the Bank Merger, BayBank) or any of its Affiliates located at the Branches,
(b) software, source and object code, user manuals and related documents and all
updates, upgrades or other revisions thereto and all copies or duplicates
thereof, (c) copying machines, facsimile machines, scanners, computers,
printers, modems, peripheral equipment and teller station computer hardware
located at the Branches, (d) any personal property leased by Seller (or, prior
to the Bank Merger, BayBank) located at the Branches (e) any proprietary branch
automation and systems, (f) any racks, stands, displays and other merchandising
related personal property and (g) any other personal property of Seller (or,
prior to the Bank Merger, BayBank) located at the Branches identified as
"Excluded Personalty" on Schedule 1.1(g), less any such items consumed or
disposed of, plus new similar items acquired or obtained, in the ordinary course
of the operation of the Branches through the Transfer Date.
"FDIA" shall mean the Federal Deposit Insurance Act, as amended.
"FDIC" shall mean the Federal Deposit Insurance Corporation.
"Federal Funds Rate" shall mean, for the period involved, the average of
the interest rates for each day of the period set forth in H.15(519) opposite
the caption "Federal Funds (Effective)". H.15(519) means the weekly statistical
release designated as such, or any successor publication, published by the
Board.
"Final" as applied to any governmental order or action, shall mean that
such order or action has not been stayed, vacated or otherwise rendered
ineffective and either (a) the time period for taking an appeal therefrom shall
have passed without an appeal therefrom having been taken, or (b) if any such
appeal shall have been dismissed or resolved, all applicable periods for further
appeal of such order or action shall have passed.
"Final Approval Date" shall mean, with respect to the transactions
contemplated hereby, the date upon which the last of the following has occurred
(a) all Regulatory Approvals have been obtained; (b) all applicable regulatory
notices which are required to be published or given prior to the consummation of
the transactions contemplated hereby have been published or given; (c) all
applicable regulatory reports have been filed; and (d) all applicable regulatory
comment and waiting periods have expired.
<PAGE>
"Internal Revenue Code" shall mean the Internal Revenue Code of 1986, as
amended.
"IRA" shall mean an Individual Retirement Account.
"IRS" shall mean the Internal Revenue Service.
"Items" shall have the meaning specified in Section 15.1.
"Landlord Consents" shall have the meaning specified in Section 5.3(e).
"Landlord Estoppel" shall have the meaning specified in Section 5.3(f).
"Lease Agreement" shall mean a lease entered into pursuant to Sections
2.1(b) or 12.1 upon such specific terms and conditions as are contemplated by
such Sections and such other terms and conditions as are customary and
reasonable in a "triple net" lease of a bank branch facility.
"Lease Assignment" shall have the meaning specified in Section 5.3(d).
"Loan Value" shall mean, as of any date, the unpaid principal balance of
the Loans plus Accrued Interest thereon.
"Loans" shall mean, collectively (a) the loans described on a Schedule of
Commercial Loans (the "Schedule of Commercial Loans") to be delivered by Seller
to Purchaser on or before June 30, 1996 having an aggregate principal amount of
approximately $127.5 million and comprised of (i) Commercial Loans booked at or
allocated to the Branches, identified on Schedule 1 hereto, having an aggregate
outstanding balance of approximately $72.3 million, (ii) Commercial Loans
allocated to the Branches on the basis of the same or contiguous zip code
addresses of the Branches or of an existing branch of the Purchaser, each with
an outstanding principal balance of approximately $1.0 million or more, and
(iii) commercial real estate loans to Commercial Loan Branch Customers, provided
that in no event shall the aggregate principal balance of such commercial real
estate loans, included for purposes of the $127.5 million total referred to
above, exceed $12.75 million; and (b) the loans described on a Schedule of
Residential Loans (the "Schedule of Residential Loans") to be delivered by
Seller to Purchaser on or before June 30, 1996, having an aggregate outstanding
balance of approximately $382.5 million, comprised of (i) residential mortgage
loans (and servicing rights relating thereto) including, without limitation, all
home equity loans or lines held by Seller as of the Transfer Date on which
payments of principal and interest are made automatically by debits from Deposit
<PAGE>
accounts being transferred to Purchaser hereunder, and (ii) such commercial real
estate loans to Commercial Loan Branch Customers in excess of the aggregate
amount of $12.75 million included in the Schedule of Commercial Loans as Seller
and Purchaser shall have agreed to include on the Schedule of Residential Loans,
less any Excluded Loans, plus any Additional Loans, in the case of each such
Loan, 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 outstanding as of the date hereof from the date hereof through the
Transfer Date and, in each case, together with all collateral held as security
for any of the foregoing or in which a security interest, lien or mortgage has
been granted, together with Accrued Interest on the foregoing, all as of the
Transfer Date, and all original notes, mortgages, security agreements and other
loan documents relating to the foregoing. In assembling the Loans referred to in
subparagraphs (a)(ii) and (iii) above for inclusion on the Schedule of
Commercial Loans, Seller will confer with and in good faith take into account
the views of the Purchaser in advance of finalizing the schedule of such Loans.
"Marketable Title" shall have the meaning specified in Section 5.3(a).
"Merger" shall have the meaning specified in the recitals hereto.
"Merger Agreement" shall have the meaning specified in the recitals hereto.
"Person" shall mean any individual, partnership, joint venture,
corporation, trust, limited liability company, unincorporated organization,
government or other entity.
"Personalty" shall mean all of the personal property of Seller (or, prior
to the Bank Merger, BayBank) located in the Branches consisting of the trade
fixtures, including teller counters and teller drawers, shelving, furniture,
equipment, telephone systems, automated teller machines, security systems, safe
deposit boxes (exclusive of contents), vaults and supplies, in each case which
are designated as "Personalty" on Schedule 1.1(g) attached hereto, less any such
items consumed or disposed of, plus new similar items acquired or obtained, in
the ordinary course of the operation of the Branches through the Transfer Date,
but excluding the Excluded Personalty.
<PAGE>
"Post-Transfer Processing Period" shall have the meaning specified in
Section 15.2.
"Purchase Price" shall have the meaning specified in Section 3.1.
"Purchaser" shall have the meaning specified in the Preamble.
"Purchaser's Account" shall have the meaning specified in Section 3.2.
"Quitclaim Deed" shall have the meaning specified in Section 5.3(a).
"Real Property" shall mean the parcels of real property and improvements
thereon (including, without limitation, buildings, structures, parking
facilities and drive-in facilities, if any) for the Branches and all easements
and other rights appurtenant thereto, all as more fully set forth on Schedule
1.1(h).
"Real Property Purchase Price" shall mean, with respect to any parcel or
parcels of Real Property relating to a Branch, the purchase price specified on
Schedule 1.1(h), being the book value of such Real Property on the books of
Seller (or BayBank), provided that any debt secured by such Real Property shall
have been paid off by the Seller.
"Regulatory Approvals" shall have the meaning specified in Section 6.1(c).
"Related Commercial Products and Services" shall mean commercial banking
products and services relating to the Commercial Loans, which products and
services are offered by the Purchaser at its branches at the date hereof, and
being provided to the Branch Customers as of the Transfer Date, including but
not limited to, cash management services, but excluding any such products or
services not offered by the Purchaser at its branches at the date hereof, such
as foreign exchange services (the "Excluded Commercial Products and Services").
"Safe Deposit Agreements" shall mean the agreements relating to safe
deposit boxes located in the Branches.
"Seller" shall have the meaning specified in the Preamble.
"Schedule of Commercial Loans" shall have the meaning specified in the
definition of "Loans".
<PAGE>
"Schedule of Residential Loans" shall have the meaning specified in the
definition of "Loans".
"Sublease Agreement" shall have the meaning specified in Section 10.3(c).
"Tenant Leases" shall mean leases or subleases between Seller (or, prior to
the Bank Merger, BayBank), as lessor, and the tenants, if any, listed on
Schedule 8.8 attached hereto.
"Third Party Consents" shall have the meaning specified in Section 6.1(d).
"Third Party Contracts" shall have the meaning specified in Section 10.5.
"Transfer Date" shall have the meaning specified in Section 5.1(b).
"Transferred Employee" shall have the meaning specified in Section 11.6.
Section 1.2. Accounting Terms. All accounting terms not otherwise defined
herein shall have the respective meanings assigned to them in accordance with
"generally accepted accounting principles" consistently applied as are in effect
from time to time in the United States of America.
ARTICLE II
PURCHASE AND SALE OF ASSETS AND
ASSIGNMENT AND ASSUMPTION OF LIABILITIES
Section 2.1. Purchase and Sale of Assets; No Other Assets Purchased.
(a) Subject to the terms and conditions hereof, including without
limitation the assumption by the Purchaser of the Assumed Liabilities and
the payment of the Purchase Price by Purchaser in accordance with Article
III hereof, on the Transfer Date, Seller shall sell, convey, assign,
transfer and deliver to Purchaser, and Purchaser shall purchase and accept
from Seller, all of Seller's right, title and interest in, to and under
the following (collectively, the "Assets"):
(i) the Real Property;
(ii) the Personalty;
<PAGE>
(iii) all Loans outstanding as of the Transfer Date;
(iv) all of Seller's rights appertaining to
the contracts and relationships with respect to
the Related Commercial Products and Services;
(v) the Advance Accounts;
(vi) the Branch Leases, Tenant Leases and
Third Party Contracts;
(vii) the Safe Deposit Agreements and all keys
for the related safe deposit boxes;
(viii)Cash on Hand;
(ix) all books, records, files, reports and other information
described in Section 14.2 in Seller's possession relating to the
Branches, the Loans, the Advance Accounts, the Related Commercial
Products and Services, the Deposit Liabilities, the Assets and the
Assumed Liabilities;
(x) all of Seller's rights appertaining to
the contracts and relationships giving rise to the
Deposit Liabilities which Purchaser is assuming;
(xi) all of Seller's rights appertaining to any negative
deposits (overdrafts) in accounts booked at or allocated to the
Branches and outstanding as of the Transfer Date;
(xii) all insurance premiums paid by Seller to the FDIC which
are allocated to insurance coverage for deposit liabilities of the
Branches following the Closing Date to the extent a proration or
adjustment is made with respect thereto pursuant to Section 3.5;
(xiii)all prepaid expenses of Seller relating to the foregoing
Assets as of the Closing Date to the extent a proration or adjustment
is made with respect thereto pursuant to Section 3.5; and
(xiv) all right, title and interest of Seller in and to all
claims, causes of action and demands, including warranties against
architects, contractors, subcontractors, manufacturers, lessors,
sublessors, tenants, subtenants, borrowers, customers, suppliers and
any other Persons to the extent related to the Assets and arising in
connection with any of the foregoing.
<PAGE>
(b) Except as otherwise expressly provided in this Agreement,
Purchaser is not purchasing and Seller is not selling any assets with
respect to the Excluded Consumer Products and Services or the Excluded
Commercial Products and Services.
(c) Notwithstanding anything to the contrary contained herein (but
subject to the provisions of Article XII) if Seller shall be unable to
deliver Marketable Title to Real Property on which a Branch is located on
the Transfer Date, Seller shall use reasonable efforts (but shall not be
required to apply more than $10,000 of the Real Property Purchase Price
for such Real Property (other than mortgages voluntarily given by the
Seller, BayBank or a predecessor in title of either of them) to remove any
Encumbrances required in order for the Seller to deliver Marketable Title
on the Transfer Date. If, notwithstanding such efforts of Seller, Seller
shall be unable to deliver Marketable Title on the Transfer Date,
Purchaser shall elect either to acquire such Real Property with such
exceptions as render title not to be Marketable Title, or to lease such
Real Property from Seller pursuant to a Lease Agreement for a rental which
shall be 90% of the current market rental value as agreed to by the
parties or, if no such agreement is reached within ten (10) days prior to
the Transfer Date, 90% of the Appraised Value, as determined by the
appraisal of such fair market rental obtained pursuant to Section 14.4;
provided that such Lease Agreement shall provide as follows:
(i) Such Lease Agreement shall be for an initial term of three
(3) years, subject to extension for an additional period of three (3)
years on mutually agreeable terms. The parties agree to bargain in
good faith on such Lease Agreement terms should Purchaser and Seller
elect to extend the term of the Lease Agreement; provided, that if
the parties are unable to reach agreement on such Lease Agreement
terms by a date that is six (6) months prior to the expiration date
of such Lease Agreement, then neither party shall be under any
obligation to negotiate as to the Lease Agreement's terms and the
Lease Agreement shall expire according to its terms.
(ii) After the Transfer Date, Seller shall continue for a period
of one (1) year to use reasonable efforts to remove any Encumbrances
<PAGE>
required in order for it to deliver Marketable Title. In the event
Seller becomes able to deliver Marketable Title, Seller shall sell
and Purchaser shall purchase such Real Property at the Real Property
Purchase Price as of the Transfer Date. If Seller is not able to
remove such Encumbrances after using reasonable efforts for a period
of one (1) year after the Transfer Date, Seller may sell such Real
Property to any Person for any price, subject to the Lease Agreement.
Section 2.2. Assumed Liabilities; No Other Liabilities Assumed.
(a) Subject to the terms and conditions hereof, including without
limitation the transfer of the Assets to Purchaser and payment of the
balance of the Deposit Liabilities by Seller in accordance with Article
III hereof, on the Transfer Date, Purchaser shall assume, and agrees to
pay and shall discharge when due, all of the following liabilities of
Seller and shall perform all duties, responsibilities and obligations of
Seller under the following from and after the Transfer Date (collectively,
the "Assumed Liabilities"):
(i) the Deposit Liabilities;
(ii) the Branch Leases and Tenant Leases;
(iii) the Safe Deposit Agreements;
(iv) the Loans, including commitments to make
additional advances in connection with the Loans;
(v) the Advance Accounts;
(vi) the Third Party Contracts;
(vii) the Related Commercial Products and
Services; and
(viii)any negative deposits (overdrafts) in accounts booked at
or allocated to the Branches and outstanding as of the Transfer Date.
(b) Except as otherwise expressly provided in this Agreement,
Purchaser shall not assume any duties, responsibilities, obligations or
liabilities of Seller or any of its Affiliates of any kind or nature,
known, unknown, contingent or otherwise, including but not limited to any
liabilities with respect to the Excluded Consumer Products and Services
<PAGE>
and the Excluded Commercial Products and Services, other than the Assumed
Liabilities. Purchaser specifically does not assume any duties,
responsibilities, obligations or liabilities of Seller prior to the
Transfer Date under any Environmental Law. Seller shall retain and duly
perform all such liabilities, obligations or duties other than the Assumed
Liabilities expressly assumed by Purchaser as of the Transfer Date.
Section 2.3. Arrangements With Respect to IRAs and Keogh Plans.
(a) On or before the Transfer Date, the Seller shall cause notice
(such notice to be approved in advance by Purchaser) to be sent to each
depositor of a Deposit held by the Seller pursuant to an IRA Plan and each
"employer" who established a Deposit pursuant to a Keogh Plan, regarding
the resignation of the Seller as IRA Plan custodian or Keogh Plan trustee
and the appointment of Purchaser as successor custodian or trustee, as
applicable. Purchaser and Seller shall enter into an Agency Agreement
effective as of the Transfer Date substantially in the form of Schedule
2.3 attached hereto and made a part hereof (the "Agency Agreement"),
pursuant to which Seller shall appoint Purchaser as Seller's agent with
respect to IRA Deposit Liabilities and Keogh Plan Deposit Liabilities
during the period commencing on the Transfer Date and ending on the date
on which the Seller's resignation as custodian or trustee, as applicable,
can first become effective in accordance with the terms of the applicable
IRA or Keogh Plan (the "Agency Period"). The Agency Agreement shall
further provide that effective upon termination of the applicable Agency
Period, Seller appoints Purchaser as successor custodian to such IRAs and
as successor trustee to such Keogh Plans for which an alternative
successor custodian or trustee has not been appointed in accordance with
the applicable plans attached as Exhibit 1 to the Agency Agreement. Upon
such appointment as successor custodian for such IRA Plans and as
successor trustee for such Keogh Plans, Purchaser shall perform the
services and carry out the duties and obligations required of it under the
applicable plans, the Internal Revenue Code of 1986, as amended from time
to time, and applicable federal and state laws and regulations.
(b) The Deposit Liabilities include certain IRA's of depositors who
have attained the age of 70 1/2 years with respect to each of which the
depositor is required under applicable law to take a minimum distribution
by December 31st of each year after the depositor attains the age of 70
<PAGE>
1/2 years. Effective as of the Transfer Date, Purchaser hereby assumes the
obligation to make such minimum distributions and agrees to pay each such
minimum distribution required to be paid under applicable law with respect
to such IRA's by December 31st of the calendar year in which the Closing
occurs.
Section 2.4 Excluded/Additional Loans. From the date of this Agreement
until the Closing Date, the Seller shall afford the Purchaser reasonable access
to the loan documents related to the Loans, subject to Sections 12.2 and 16.8
hereof. Notwithstanding anything herein to the contrary, Purchaser may by
written notice to Seller at any time and from time to time after delivery by
Seller to Purchaser of the Schedule of Commercial Loans and the Schedule of
Residential Loans and prior to the date which is 15 days prior to the Closing
Date, designate any Loan as an "Excluded Loan" if such Loan has a credit or
documentation deficiency on the date of such notice or if any representation or
warranty made by Seller in Section 8.7 shall fail to be true and correct in any
material respect as of the date of such notice. In the event that Purchaser
shall designate any Loan as an Excluded Loan pursuant to this Section 2.4,
Seller shall, by written notice to Purchaser not later than ten (10) days after
receipt of the notice from Purchaser designating such Excluded Loan, designate a
replacement Loan to be transferred to Purchaser hereunder in approximately the
same principal amount and type as the Excluded Loan (each such Loan being
referred to herein as an "Additional Loan"); provided, that the average interest
rate on and maturity of all Additional Loans transferred to Purchaser hereunder
shall be approximately the same as the average interest rate on and maturity of
the Excluded Loans. The parties will agree upon a reasonable procedure for the
implementation of the rights provided for in this Section 2.4. For purposes of
this Section 2.4, (a) a Loan shall only be deemed to have a credit deficiency as
of any date if such Loan is: (i) a Commercial Loan with a rating less than
"Satisfactory" under the internal loan rating system of Seller or BayBank as of
such date or any unrated Commercial Loan deemed substandard by Purchaser due to
inadequate net worth or collateral, outdated financial statements, unacceptable
performance or any other characteristic which is reasonably likely to result in
a loss if not cured, or a Commercial Loan which is more than sixty (60) days
past due as of such date, or (ii) a residential real estate loan that is sixty
(60) days or more past due; and (b) a Loan shall only be deemed to have a
documentation deficiency if there is a material deficiency in the documentation
as of such date and such material documentation deficiency is continuing as of
<PAGE>
the date which is thirty (30) days after the initial notice from Purchaser to
Seller of such material documentation deficiency. Purchaser agrees that for a
period of 12 months following the Closing Date, Purchaser shall not (and shall
cause its Affiliates not to) directly or indirectly, solicit loans or other
credit related business from any Person who was an obligor on any Excluded Loan.
ARTICLE III
PURCHASE PRICE; PAYMENT;
SETTLEMENT; AND ALLOCATION
Section 3.1. Purchase Price. The "Purchase Price" for the Assets shall be
the aggregate of the following items, each determined as of the Transfer Date
except where otherwise noted:
(a) an amount equal to seven percent (7%) of the aggregate average
daily balance (including Accrued Interest) of Deposit Liabilities for the
period commencing 20 Business Days prior to the third Business Day prior
to the Closing Date and ending on the third Business Day prior to the
Closing Date; PLUS
(b) The aggregate balance of all negative deposits
(overdrafts) (expressed as a positive number) booked at or allocated
to the Branches; PLUS
(c) The aggregate Real Property Purchase Prices for all of the
Real Property; PLUS
(d) The net book value of the Personalty as reflected on the
books of Seller; PLUS
(e) The Loan Value of the Loans; PLUS
(f) The unpaid principal balance of the Advance Accounts plus
Accrued Interest thereon; PLUS
(g) Cash on Hand.
Section 3.2. Payment on Transfer Date. On or prior to the Closing Date,
Seller shall deliver to Purchaser a draft closing statement (the "Draft Closing
Statement") dated as of the close of business on the third business day
preceding the Closing Date setting forth an estimate of the Purchase Price
(including all adjustments and prorations thereto) (the "Estimated Purchase
Price") and of the Deposit Liabilities. On the Transfer Date, Seller shall pay
to Purchaser by wire transfer of immediately available Federal Funds to such
account as Purchaser shall advise Seller at the Closing ("Purchaser's Account")
the amount by which the aggregate balance (including Accrued Interest) of the
<PAGE>
Deposit Liabilities as of the close of business on the third business day
preceding the Closing Date exceeds the Estimated Purchase Price (the "Estimated
Payment Amount").
Section 3.3. Adjustment of Estimated Payment Amount.
(a) On or before 12:00 noon on the tenth Business Day following the
Closing Date, Seller shall deliver to Purchaser a statement setting forth
the Purchase Price (including all adjustments and prorations thereto) and
each component thereof and the Deposit Liabilities as determined in
accordance with the provisions of this Agreement as of the Transfer Date
and shall make available such work papers, schedules and other supporting
data as may be reasonably requested by Purchaser to enable it to verify
such determination. Such statement shall also set forth the amount (the
"Adjusted Payment Amount") by which the aggregate balance of the Deposit
Liabilities exceeded the Purchase Price (including all adjustments and
prorations thereto) calculated as of the Transfer Date.
(b) On or before 12:00 noon on the fifteenth Business Day after the
Closing Date, Seller shall pay to Purchaser by wire transfer of
immediately available Federal Funds to Purchaser's Account an amount equal
to the excess of the Adjusted Payment Amount over the Estimated Payment
Amount, plus interest on such excess amount from the Transfer Date to but
excluding the payment date, at the Federal Funds Rate or, if the Estimated
Payment Amount exceeds the Adjusted Payment Amount, Purchaser shall pay to
the Seller by wire transfer of immediately available Federal Funds to such
account as Seller shall advise Purchaser an amount equal to such excess,
plus interest from the Transfer Date to but excluding the payment date, at
the Federal Funds Rate.
Section 3.4. Allocation of Purchase Price.
(a) Purchaser and Seller agree that, upon final determination of the
Purchase Price, the Purchase Price shall be allocated to the Assets in
accordance with Schedule 3.4 attached hereto.
(b) Purchaser and Seller shall report the transaction contemplated by
this Agreement (including income tax reporting requirements imposed
pursuant to Section 1060 of the Internal Revenue Code of 1986, as amended)
in accordance with the allocation specified in Schedule 3.4. In the event
<PAGE>
any party hereto receives notice of an audit in respect of the allocation
of the Purchase Price specified herein, such party shall immediately
notify the other party in writing as to the date and subject of such
audit.
(c) If any federal, state or local tax return report or filing by
Purchaser or Seller relating to the transactions contemplated hereby is
challenged by the taxing authority with which such return, report or
filing was filed on the basis of the allocation set forth in Schedule 3.4,
as finally adjusted, the filing party shall assert and maintain in good
faith the validity and correctness of such allocation during the audit
thereof until the issuance by the taxing authority of a "30 Day Letter",
or a determination of liability equivalent thereto, to such party,
whereupon such party shall, in its sole discretion, have the right to pay,
compromise, settle, dispute or otherwise deal with its alleged tax
liability. If such a tax return, report or filing is challenged as herein
described, the party filing such return, report or filing shall keep the
other party apprised of its decisions and the current status and progress
of all administrative and judicial proceedings, if any, that are
undertaken at the election of the filing party.
(d) If either party (including permitted successors and assigns
thereof) to this Agreement defaults under this Section 3.4, it shall pay
as damages to the other party, so long as such other party is not in
default under this Section 3.4, an amount which, after reduction for all
taxes which would be incurred (calculated at the highest marginal rate
applicable in the relevant jurisdictions) as a result of receiving said
amount, is equal to the result (but not less than zero) of subtracting the
amount in (ii) below from the amount in (i) below:
(i) The total amount of income or gains taxes incurred
(including interest and penalties calculated at the highest marginal
rate applicable in the relevant jurisdictions) to all jurisdictions
imposing such taxes upon the nondefaulting party with respect to the
transactions contemplated hereby; and
(ii) The total amount of income or gains taxes which would have
been incurred (including interest and penalties calculated at the
highest marginal rate applicable in the relevant jurisdictions) to
all jurisdictions imposing such taxes upon the nondefaulting party
<PAGE>
with respect to the transactions contemplated hereby, if such taxing
jurisdictions had accepted the allocations specified in Schedule 3.4.
Section 3.5. Proration; Other Transfer Date Adjustments.
(a) Except as otherwise specifically provided in this Agreement, it
is the intention of the parties that Seller will operate the Branches for
its own account until the Transfer Date, and that Purchaser shall operate
the Branches, hold the Loans and other Assets and assume the Deposit
Liabilities and other Assumed Liabilities for its own account from and
after the Transfer Date. Thus, except as otherwise specifically provided
in this Agreement, items of income and expense shall be prorated as of the
Transfer Date and settled between Seller and Purchaser on the Transfer
Date, whether or not such adjustment would normally be made as of such
time. Items of proration will be handled on the Transfer Date as an
adjustment to the Purchase Price unless otherwise agreed by the parties
hereto.
(b) For purposes of this Agreement, items of proration and other
adjustments shall include, without limitation: (i) amounts prepaid and
unused for safe deposit rentals; (ii) rental payments under Branch Leases
and Tenant Leases; (iii) real estate taxes; (iv) insurance premiums paid
or payable to the FDIC attributable to insurance coverage for Deposit
Liabilities for the period from and after the Transfer Date; (v) fees for
customary annual or other periodic licenses and permits; (vi) water,
sewer, fuel and utility charges; and (vii) other prepaid items; in each
case as of the Transfer Date. Notwithstanding the foregoing, if accurate
arrangements cannot be made as of the Transfer Date for any of the
foregoing items of proration, the parties shall apportion the charges for
the foregoing items on the basis of the bill therefor for the most recent
billing period prior to the Closing, and the Seller and the Purchaser
shall promptly, and in any event within thirty (30) days after the
Closing, readjust the apportionments in accordance with the next bills
rendered.
Section 3.6. Other Adjustments. After the Transfer Date, the parties will
make such other adjustments as may be necessary to fulfill the provisions of
this Agreement, including, but not limited to, any adjustments to the Purchase
Price resulting from adjusting the amount calculated pursuant to Section 3.1(a)
to reflect any collected negative Deposits transferred to Purchaser hereunder.
<PAGE>
ARTICLE IV
TAXES
Section 4.1. Sales and Use Taxes. Any sales, use 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 by Purchaser on the Transfer
Date. Purchaser shall indemnify and hold harmless Seller from and against any
and all such taxes including those arising upon subsequent audit by any taxing
authority, including interest and penalties. Purchaser and Seller will cooperate
in the preparation of any required filings or returns.
Section 4.2. Information Reports. The Purchaser and the Seller shall each
provide to the United States Internal Revenue Service, 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 concerning interest paid
on, or contributions to and distributions from, the Deposit Accounts, as
appropriate, for the periods during which the Purchaser, the Seller, and BayBank
respectively, administered such accounts including without limitation any
information required by the IRS pursuant to any request for back-up withholding
and TIN certification records and documents. The Seller shall make such reports
for interest paid or credited to customers before the Transfer Date and the
Purchaser shall make such reports including and after the Transfer Date.
ARTICLE V
CLOSING
Section 5.1. Closing Date; Transfer Date.
(a) The Closing shall occur as soon as practicable on a date (the
"Closing Date") mutually agreed to by the parties hereto, which shall in
no event be later than six (6) months after the transactions contemplated
by the Merger Agreement shall have been consummated.
(b) The "Transfer Date" shall be the opening of banking business on
the first Business Day following the Closing Date.
(c) It is anticipated that the Transfer Date will coincide with the
conversion of Seller's account information as to the Deposit Liabilities
and the Loans onto Purchaser's data processing system. The parties shall
cooperate with each other to effect such conversion in accordance with
<PAGE>
Section 14.5. However, notwithstanding the foregoing, in the event of an
extraordinary data processing occurrence on or prior to the Transfer Date
which prevents such conversion, then at Seller's option (i) the Closing
may be postponed in the event that such occurrence occurs prior to the
Closing, or (ii) the Closing shall take place and Seller shall assist
Purchaser in servicing the Deposit Liabilities and the Loans upon such
terms and for such fees as are customarily charged in such arrangements.
Section 5.2. Place of Closing. The Closing shall be held at the offices of
Bingham, Dana & Gould LLP, 150 Federal Street, Boston, Massachusetts 02110.
Section 5.3. Seller Deliveries. On the Closing Date, Seller shall deliver
to Purchaser:
(a) Quitclaim deeds for the Real Property in the form of Schedule
5.3(a) attached hereto, duly executed and with such evidences of corporate
authority of Seller as may be required in order to record the Quitclaim
Deeds and satisfy the reasonable requirements of the title insurer,
pursuant to which the Real Property shall be transferred to Purchaser (the
"Quitclaim Deeds"); provided that, with respect to each parcel of Real
Property, Seller shall only be required to convey to Purchaser good and
marketable fee simple title of record to the Real Property free and clear
of all Encumbrances ("Marketable Title"), together with the Owner's
Duplicate Certificate of Title for all registered properties;
(b) A bill of sale for the Assets in the form of
Schedule 5.3(b) attached hereto;
(c) An assignment and assumption agreement with respect to the
Deposit Liabilities, Loans, Advance Accounts, Tenant Leases, Safe Deposit
Agreements, Third Party Contracts and Assumed Severance Obligations in the
form of Schedule 5.3(c) attached hereto, to which the Purchaser shall be
authorized to attach updated schedules and the updated Schedule of
Commercial Loans and Schedule of Residential Loans setting forth
respectively the Deposit Liabilities, Excluded Deposits, Advance Accounts
and Loans prepared as of the Transfer Date and delivered by the Seller to
the Purchaser on the Transfer Date (the "Assignment and Assumption
Agreement");
<PAGE>
(d) Lease assignment and assumption agreements with respect to each
of the Branch Leases in the form of Schedule 5.3(d) attached hereto (the
"Lease Assignments");
(e) With respect to each Branch Lease which requires Landlord's
consent to assign to Purchaser, Seller shall deliver the consent of such
landlord in the form of Schedule 5.3(e) attached hereto (the "Landlord's
Consent").
(f) With respect to each Branch Lease, Seller agrees to use
reasonable efforts to obtain the estoppel certificate of the Landlord
thereof in the form of Schedule 5.3(f) attached hereto (the "Landlord's
Estoppel Certificate"), provided, however, that the failure to obtain such
Landlord's Estoppel Certificate shall not allow Purchaser to terminate
this Agreement and Purchaser shall remain obligated to perform any and all
of its obligations hereunder with respect to the applicable Branch,
including without limitation, the assumption of the Deposit Liabilities
relating thereto and the payment of the full Purchase Price without any
reduction or adjustment.
(g) An Officer's Certificate in the form of Schedule 5.3(g)
attached hereto;
(h) An opinion of counsel to Seller (which opinion may be from
in-house counsel, who shall be the General Counsel or an Assistant General
Counsel, to the Seller), dated the Closing Date, in form and substance
reasonably satisfactory to Purchaser to the effect that: (i) Seller is a
national bank, duly organized, validly existing and in good standing under
the laws of the United States, with full corporate power and authority to
enter into and perform its obligations under this Agreement; and (ii) this
Agreement has been duly and validly authorized, executed and delivered by
Seller and (assuming due authorization, execution and delivery by
Purchaser) is a legal, valid and binding obligation of Seller enforceable
against Seller in accordance with its terms, except as enforcement may be
limited by receivership, conservatorship and supervisory powers of bank
regulatory agencies generally as well as bankruptcy, insolvency,
reorganization, moratorium or other laws of general applicability relating
to or affecting creditors' rights, or the limiting effect of rules of law
governing specific performance, equitable relief and other equitable
remedies or the waiver of rights or remedies;
(i) The Draft Closing Statement;
<PAGE>
(j) the Agency Agreement;
(k) Such endorsements, conveyances, deeds of transfer, assignments
and other documents necessary to effect the transactions contemplated
hereby as Purchaser shall reasonably request.
Section 5.4. Purchaser Deliveries. On the Closing Date, Purchaser shall
deliver to Seller:
(a) The Assignment and Assumption Agreement;
(b) the Agency Agreement;
(c) The Lease Assignments and, as contemplated by Section 11.3, such
other instruments and documents as any landlord under a Branch Lease may
reasonably require for permitting the assumption by Purchaser of a Branch
Lease, each such instrument and document to be in form and substance
reasonably satisfactory to the parties and dated as of the Transfer Date;
(d) An Officer's Certificate in the form of Schedule 5.4(d)
attached hereto;
(e) An opinion of Purchaser's counsel, dated the Closing Date, in
form and substance reasonably satisfactory to Seller, to the effect that:
(i) Purchaser is a a Massachusetts trust company, duly organized, validly
existing and in good standing under the laws of the Commonwealth of
Massachusetts, with full corporate power and authority to enter into and
perform its obligations under this Agreement; and (ii) this Agreement has
been duly and validly authorized, executed and delivered by Purchaser and
(assuming due authorization, execution and delivery by Seller) is a legal,
valid and binding obligation of Purchaser enforceable against Purchaser in
accordance with its terms, except as enforcement may be limited by
receivership, conservatorship and supervisory powers of bank regulatory
agencies generally as well as bankruptcy, insolvency, reorganization,
moratorium or other laws of general applicability relating to or affecting
creditors' rights, or the limiting effect of rules of law governing
specific performance, equitable relief and other equitable remedies or the
waiver of rights or remedies; and
<PAGE>
(f) Such other documents necessary to effect the transactions
contemplated hereby as Seller shall reasonably request.
ARTICLE VI
CONDITIONS TO OBLIGATIONS OF SELLER
Section 6.1. Conditions to Obligations of Seller. The obligations of Seller
under this Agreement are subject to the satisfaction (or, if applicable, waiver
in the sole discretion of Seller, except as to the condition described in (c)
below), on or before the Closing Date, of each of the following conditions:
(a) 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;
(b) The representations and warranties made by Purchaser herein or in
any certificate or other document delivered pursuant to the provisions
hereof or in connection with the transactions contemplated hereby shall be
correct in all material respects, on and as of the Closing Date, with the
same force and effect as though such representations and warranties had
been made on the Closing Date;
(c) Approvals in writing of all relevant regulatory agencies shall
have been obtained by Purchaser, and approvals in writing of all relevant
regulatory agencies shall have been obtained by Seller, 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");
(d) Except as otherwise set forth in Sections 10.3(b) and 10.5, all
material approvals and consents of relevant third parties shall have been
obtained by Seller and by Purchaser ("Third Party Consents");
(e) Seller shall have received the items to be delivered by
Purchaser pursuant to Section 5.4;
<PAGE>
(f) Seller shall have obtained, in the case of each Real Property
having a septic tank system, a "Title 5" certification by a licensed
inspector to Purchaser and to the Board of Health of the applicable
jurisdiction in which such Real Property is located, regarding the
compliance of such septic tank system with applicable laws and
regulations; provided, that any and all costs and expenses of upgrading
such septic tank system to meet such legal and regulatory requirements
shall be borne equally by Purchaser and Seller; and
(g) The transactions contemplated in the Merger Agreement shall
have been consummated.
ARTICLE VII
CONDITIONS TO OBLIGATIONS OF PURCHASER
Section 7.1. Conditions to Obligations of Purchaser. The obligations of
Purchaser under this Agreement are subject to the satisfaction (or, if
applicable, waiver in the sole discretion of Purchaser, except as to the
condition described in (c) below), on or before the Closing Date, of each of the
following conditions:
(a) All of the covenants and other agreements required by this
Agreement to be complied with and performed by Seller on or before the
Closing Date shall have been duly complied with and performed in all
material respects;
(b) The representations and warranties made by Seller herein or in
any certificate or other document delivered pursuant to the provisions
hereof or in connection with the transactions contemplated hereby shall be
correct in all material respects, on and as of the Closing Date, with the
same force and effect as though such representations and warranties had
been made on the Closing Date;
(c) The Regulatory Approvals shall have been obtained;
(d) Except as otherwise set forth in Sections 10.3(b) and 10.5,
all Third Party Consents shall have been obtained;
(e) Purchaser shall have received the items to be delivered by Seller
pursuant to Section 5.3.
<PAGE>
ARTICLE VIII
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Purchaser as follows:
Section 8.1. Organization. Seller is a national bank duly organized,
validly existing and in good standing under the laws of the United States.
Section 8.2. Authority. Seller has the power and authority to enter into
and perform this Agreement and any instruments or other documents executed
pursuant hereto. This Agreement and any instruments or other documents executed
pursuant hereto and the execution, delivery and performance hereof and thereof
have been duly authorized and approved by all necessary corporate action on the
part of Seller, and this Agreement and any instruments or other documents
executed pursuant hereto constitute, or when executed at the Closing will
constitute, the valid and binding obligations of Seller, enforceable against
Seller in accordance with their terms, except as enforcement may be limited by
receivership, conservatorship and supervisory powers of bank regulatory agencies
generally as well as bankruptcy, insolvency, reorganization, moratorium or other
laws of general applicability relating to or affecting creditors' rights, or the
limiting effect of rules of law governing specific performance, equitable relief
and other equitable remedies or the waiver of rights or remedies.
Section 8.3. Non-Contravention. The execution and delivery of this
Agreement and the instruments and other documents executed pursuant hereto by
Seller do not and, subject to the receipt of all Regulatory Approvals and Third
Party 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 Seller
or to which Seller is subject, which breach, violation or default would have a
material and adverse effect on Seller or the business or properties of the
Branches; or (b) a breach or violation of or a default under the charter or
Bylaws of Seller or any material contract or other instrument to which Seller is
a party or by which Seller is bound.
Section 8.4. Compliance with Law. To Seller's best knowledge, the business
and operations of the Branches have been and are being conducted in accordance
with all applicable laws, rules and regulations of all authorities (other than
<PAGE>
Environmental Laws or the ADA), the penalty or liability for the violation of
which, if imposed or asserted, could adversely affect the business, operations,
revenues, financial condition or properties of the Branches.
Section 8.5. Legal Proceedings. There are no actions, suits or proceedings,
whether civil, criminal or administrative, pending or, to Seller's best
knowledge, threatened against or affecting Seller which would reasonably by
expected to have a material adverse effect on the Branches, Assets, Loans or
Deposit Liabilities or on the consummation of the transactions contemplated
hereby.
Section 8.6. Personalty; Cash on Hand. Seller (or, prior to the Bank
Merger, BayBank) has good and marketable title to the Personalty and the Cash on
Hand, free and clear of all liens and encumbrances.
Section 8.7. Loans. To the best knowledge of Seller, as of the date of
delivery of the Schedule of Commercial Loans and the Schedule of Residential
Loans and as of the Closing Date:
(a) each of the Loans is based upon valid, binding and enforceable
agreements to which Seller has good and marketable title, free and clear
of all liens and encumbrances; and
(b) the collateral for each of the Loans that is secured is (i) the
collateral described in the applicable security agreement, mortgage,
pledge, collateral assignment or other security document, and (ii) subject
to a valid, enforceable and perfected lien.
Except as set forth in this Section 8.7, Seller has not made, is not making and
shall not be deemed to have made, any representation as to the collectibility of
any Loan or as to the creditworthiness, credit history or financial condition of
any primary or secondary obligor under any Loan, or any guarantor or surety
thereof, in this Agreement or any agreement, instrument or other document
executed in connection with any of the transactions contemplated hereby or
provided or prepared pursuant hereto or in connection with any of the
transactions contemplated hereby.
Section 8.8. Tenants; Branch Leases.
(a) Except for the tenants listed on Schedule 8.8 attached hereto,
there are no tenants or other occupants of the Real Property.
(b) To the Seller's best knowledge, except as set forth in Schedule
8.8, each of the Branch Leases is in full force and effect, and Seller is
not in default under any of its obligations thereunder.
<PAGE>
(c) Seller has provided Purchaser with true and accurate copies of
the Branch Leases and all amendments thereto, that to the best of Seller's
knowledge neither Seller nor any tenant under the Branch Leases has
received any notice of default thereunder or has any knowledge of any
event which by itself or with the passage of time would cause a default
under a Branch Lease and all rents and other payments now due under any of
the Branch Leases have been paid in full.
Section 8.9. Financial and Deposit Data. To the Seller's best knowledge,
all financial, Deposit Liability and Loan information regarding the Branches
provided to Purchaser in writing by Seller was calculated as of the respective
dates set forth in such writing and was accurate and complete in all material
respects as of such dates based upon the best information available at such
time.
Section 8.10. Accuracy of Deposit Schedules. The Schedule of Deposit
Liabilities to be delivered pursuant to Section 3.3(a) hereof shall accurately
reflect the Deposit Liabilities with respect to each account relating to the
Deposits appearing on such schedule (subject to such adjustments as are
contemplated herein) and is complete and accurate in all material respects as of
the date thereof.
Section 8.11. Deposit Accounts. The deposit agreements and other documents
relating to the Deposits to be delivered to the Purchaser will be all such
documents in Seller's possession or reasonably available to the Seller at the
Closing. The deposits of Seller are insured by the FDIC in accordance with the
FDIA and Seller has paid all assessments due and has filed all reports required
by the FDIC.
Section 8.12. Advance Accounts. The Advance Accounts and the documents and
instruments evidencing and securing them (i) are not in default; (ii) grant the
Seller a valid security interest in the applicable accounts related to the
Deposits; (iii) are secured by the applicable accounts related to the Deposits
and, to the knowledge of the Seller, are not subject to any material third party
claim; (iv) conform in all material respects with applicable laws and
regulations; (v) to the knowledge of the Seller, are not subject to any material
defense, counterclaim or pending bankruptcy; and (vi) are enforceable against
the obligor in accordance with their terms, except as enforcement may be limited
by bankruptcy, insolvency, reorganization, moratorium or other laws of general
applicability relating to or affecting creditor's rights, or the limiting effect
of rules of how governing specific performance, equitable remedies or the waiver
of rights or remedies.
<PAGE>
Section 8.13. Limitations on Representations and Warranties.
Notwithstanding anything to the contrary contained herein or in any other
document or agreement:
(a) Seller makes no representations or warranties, express or
implied, as to the physical condition of any Branch or of any of the
physical assets to be transferred under this Agreement, all of which are
being sold "as is" and "where is", without recourse, as of the Transfer
Date. Further, Seller makes no warranties as to the collectibility of
amounts overdrawn as of the Transfer Date or due under the Advance
Accounts which Seller is transferring to Purchaser without recourse
pursuant to Section 2.1 hereof.
(b) Seller makes no representations or warranties to Purchaser as to
the actual customers, accounts, levels of Deposits or balances of Advance
Accounts and Loans which will be assigned to any Branch as of the Transfer
Date (except as reflected on the schedules to be attached to the
Assignment and Assumption Agreement), nor does Seller make any
representation or warranty to Purchaser as to the length of time that the
Deposits will be maintained by depositors at any Branch after the Transfer
Date.
(c) To the extent that any representation or warranty is made by the
Seller with respect to BayBank or any of its Branches, or any Assets or
Assumed Liabilities owned (or purported to be owned) by BayBank prior to
the Bank Merger whether made herein or in any certificate or other
document delivered pursuant to the provisions hereof or in connection the
transactions contemplated hereby, such representation or warranty shall be
made only to the best knowledge of the Seller except (i) when such
representation or warranty is deemed to be repeated on the Closing Date in
accordance with Section 7.1(b) hereof and (ii) for purposes of determining
whether indemnification is available to the Purchaser pursuant to Section
13.1(d) hereof, in each such case such representation or warranty shall
only be to the best knowledge of the Seller if such qualification
expressly appears in the text of such representation or warranty.
<PAGE>
ARTICLE IX
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser represents and warrants to Seller as follows:
Section 9.1. Organization. Purchaser is a Massachusetts trust company duly
organized, validly existing and in good standing under the laws of the
Commonwealth of Massachusetts.
Section 9.2. Authority. Purchaser has the power and authority to enter into
and perform this Agreement and any instruments or other documents executed
pursuant hereto. This Agreement and any instruments or other documents executed
pursuant hereto and the execution, delivery and performance hereof and thereof
have been duly authorized and approved by all necessary corporate action on the
part of Purchaser, and this Agreement and any instruments or other documents
executed pursuant hereto constitute, or when executed at the Closing will
constitute, the valid and binding obligations of Purchaser, enforceable against
Purchaser in accordance with their terms, except as enforcement may be limited
by receivership, conservatorship and supervisory powers of bank regulatory
agencies generally as well as by bankruptcy, insolvency, reorganization,
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 Regulatory Approvals and
Third Party 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
Purchaser or to which Purchaser is subject, which breach, violation or default
would have a material and adverse effect on Purchaser or on Purchaser's ability
to consummate the transactions contemplated hereby or (b) a breach or violation
of or a default under the charter or Bylaws of Purchaser or any material
contract or other instrument to which Purchaser is a party or by which Purchaser
is bound.
Section 9.4. Legal Proceedings. There are no actions, suits, or
proceedings, whether civil, criminal or administrative, pending or, to
Purchaser's best knowledge, threatened against or affecting Purchaser which
could have a material adverse effect on Purchaser's ability to Purchaser or on
the Purchaser's ability to consummate the transactions contemplated hereby.
<PAGE>
Section 9.5. Regulatory Matters.
(a) There are no pending or, to the knowledge of Purchaser,
threatened, disputes or controversies between Purchaser and any federal,
state or local governmental authority that (i) would reasonably be
expected to have a material adverse effect upon the financial condition of
Purchaser, (ii) would reasonably be expected to prevent or impair the
ability of Purchaser to perform its obligations under this Agreement in
any material respect or (iii) would reasonably be expected to impair the
validity or consummation of this Agreement or the transactions
contemplated hereby. Purchaser has not received any indication from any
federal, state or other governmental agency that such agency would oppose
or refuse to grant or issue its consent or approval, if required, with
respect to the transactions contemplated hereby. Purchaser believes that
it can satisfy all capital and other regulatory requirements necessary to
obtain all Regulatory Approvals.
(b) The deposits of Purchaser are insured by the FDIC in accordance
with the FDIA and Purchaser has paid all assessments and has filed all
reports required by the FDIC.
(c) 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, Purchaser will (i) remain
"adequately capitalized", as defined in the Federal Deposit Insurance
Corporation Improvement Act of 1991, as amended, and (ii) meet all capital
requirements, standards and ratios required by each state or federal bank
regulator with jurisdiction over Purchaser, including without limitation,
any such higher requirement, standard or ratio as shall apply to
institutions engaging in the acquisition of insured institution deposits,
assets or branches, and no such regulator has indicated that it will
condition any of the Regulatory Approvals upon an increase in Purchaser's
capital or compliance with any special capital requirement, standard or
ratio.
(d) Each of the subsidiaries or Affiliates of Purchaser which is an
insured depository institution was rated "Satisfactory" or "Outstanding"
following its most recent Community Reinvestment Act examination by the
regulatory agency responsible for its supervision. Purchaser has received
no notice of and has no knowledge of any planned or threatened objection
by any community group to the transactions contemplated hereby.
<PAGE>
Section 9.6. Financing Available. Purchaser has available sufficient cash
or other liquid assets or financing pursuant to binding agreements or
commitments which may be used to fund the Purchase Price and Purchaser's ability
to pay the Purchase Price hereunder is not contingent on raising any equity
capital, obtaining specific financing therefor or the consent of any lender.
ARTICLE X
COVENANTS OF SELLER
Seller covenants and agrees with Purchaser as follows:
Section 10.1. Conduct of the Business. From the date hereof through the
Transfer Date, Seller shall (a) conduct its banking business relating to the
Branches, the Assets and the Deposit Liabilities in the usual, regular and
ordinary course consistent with past practice, and (b) use reasonable efforts to
maintain and preserve intact its relationships with its Branch Employees and
Branch Customers, other than as provided in the definition of Branch Employees
and transfers of personnel from the Branches pursuant to decisions of management
made before the date hereof and reported to Purchaser as provided herein with
respect to Schedule 1.1(b), (c) maintain the Branch Leases in full force and
effect, and (d) not voluntarily permit or suffer any adverse change in the title
to the Real Property.
From the date hereof until the Closing, the Seller will not do or agree to
do, without the prior written consent of the Purchaser, any of the following:
(a) incur any material liabilities or material obligations with
respect to the Branches which would affect the Assumed Liabilities, except
in the ordinary course of business in accordance with past practice and
reasonable banking standards;
(b) acquire or dispose of any assets of the Branches of the types
that are Assets, except in the ordinary course of business consistent with
past practice and reasonable banking standards; or
(c) enter into, amend in any material respect or terminate any
contract or agreement (including without limitation any settlement
agreement with respect to litigation) material to the business, assets,
<PAGE>
financial condition, results of operations or business of the Branches,
except in the ordinary course of business consistent with past practice.
Section 10.2. Regulatory Approvals. Seller shall use reasonable efforts to
assist Purchaser in obtaining the Regulatory Approvals. Seller shall provide
Purchaser or the appropriate regulatory authorities all information reasonably
required to be submitted by Seller in connection with the Regulatory Approvals.
Seller shall take no action which would adversely affect or delay the ability of
any party hereto to obtain any Regulatory Approval or to perform such party's
covenants and agreements under this Agreement.
Section 10.3. Corporate and Other Consents.
(a) Seller shall use reasonable efforts to secure all necessary
corporate and other non-regulatory consents (except those involving
Purchaser) and shall provide certified copies of the same to Purchaser
upon Purchaser's request.
(b) Seller shall use reasonable efforts (which, except as expressly
provided below, shall not require Seller to pay any money or other
consideration to any Person or to initiate any claim or proceeding against
any Person) to cause every landlord under a Branch Lease, the consent of
which is required under the terms of such Branch Lease to the assignment
of such Branch Lease to Purchaser, to execute in favor of Purchaser a
Landlord Consent. Notwithstanding anything to the contrary contained in
this Agreement, Seller's failure to obtain a Landlord Consent from a
landlord under a Branch Lease after using such reasonable efforts to
obtain the same shall not entitle Purchaser to terminate this Agreement
and Purchaser shall remain obligated to perform all of its obligations
hereunder with respect to the applicable Branch, including without
limitation, the assumption of the Deposit Liabilities relating thereto and
the payment of the full Purchase Price without any reduction or
adjustment, but excluding only Purchaser's obligation to assume such
Branch Lease. If Seller shall be unable to deliver a Landlord Consent
required with respect to a Branch Lease, Seller shall deliver to Purchaser
at the Closing a certificate from Seller, as tenant under the applicable
Branch Lease in the form of Schedule 10.3 attached hereto.
(c) If, despite Seller's reasonable efforts, a Landlord Consent to
assignment of a Branch Lease cannot be obtained, or cannot be obtained
<PAGE>
without the payment of an assignment fee or similar lump sum or rent
increase, Seller shall, if permitted under the Branch Lease, sublease the
Leased Premises to Purchaser ("the Sublease Agreement"). Such Sublease
Agreement shall be for the remainder of the existing term of the Lease
Agreement and otherwise on mutually agreeable terms, and shall, to the
extent permitted by the Branch Lease, be subject to an extension for an
additional period of up to three years on mutually agreeable terms. The
parties agree to bargain in good faith on such Sublease Agreement terms
should Purchaser and Seller elect to extend the term of the Lease
Agreement; provided, that if the parties are unable to reach agreement on
such Sublease Agreement terms by a date that is six (6) months prior to
the expiration date of such Sublease Agreement, then neither party shall
be under any obligation to negotiate as to the Lease Agreement's terms and
the Sublease Agreement shall expire according to its terms.
(d) If Seller is not permitted to sublease or assign the Leased
Premises to Purchaser under the Branch Lease, and if, despite Seller's
reasonable efforts, a Landlord Consent to assignment or sublease of a
Branch Lease cannot be obtained without the payment of an assignment fee
or similar lump sum payment to a Branch Lease landlord and such sum does
not exceed an amount equal to 100% of the annual base rent payable under
such lease for the current lease year or $100,000, whichever is less, then
Seller and Purchaser shall each pay one half of such sum. If despite
Seller's reasonable efforts a Landlord Consent to assignment or sublease
of a Branch Lease cannot be obtained without an increase in the annual
base rent payable under such Branch Lease and the present value of such
additional rental payments for the remainder of the current lease term
(discounted at a rate equal to 6% per annum) does not exceed 100% of the
annual base rent payable under such lease for the current lease year or
$100,000, whichever is less, then Seller and Purchaser shall each pay one
half of such additional rental payments for the remainder of the current
lease term.
(e) If Seller is not permitted to assign or sublease the Leased
Premises to Purchaser under the Branch Lease, and if despite Seller's
reasonable efforts Seller is unable to obtain a Landlord Consent to the
assignment of a Branch Lease prior to August 31, 1996, or the cost of
obtaining such Landlord Consent exceeds the limits specified above, or
both, Seller shall use reasonable efforts to locate another rental
property within the same zip code which in terms of location, premises,
<PAGE>
area and lease terms is reasonably acceptable to both parties. Seller
shall apply for the relocation of the Branch licenses for the Branch as to
which such Landlord Consent has not been obtained to such new location,
shall use reasonable efforts to obtain approval of such applications and
shall use reasonable efforts to negotiate a lease of such premises in the
name of Purchaser as tenant on terms reasonably acceptable to Purchaser.
Upon final approval of such relocation applications and execution and
delivery of such new lease, such new lease shall be deemed to be the
Branch Lease in place of the Branch Lease for which the Landlord Consent
has not been obtained.
Section 10.4. Nonsolicitation. Prior to the Transfer Date, neither Seller
nor its Affiliates shall solicit Branch Customers through advertising
specifically referencing or targeted to such Branch Customers in a way which is
reasonably likely to induce such Branch Customers to close Deposit Liability
accounts at the Branches and open accounts with Seller at its other branches.
For a period of one year following the Transfer Date, Seller and its Affiliates
shall not (a) solicit Branch Customers which are obligors of Commercial Loans
that are acquired and assumed by Purchaser as of the Transfer Date for
Commercial Loan business, or (b) solicit any Branch Customers for any deposit
account or consumer lending business other than Excluded Consumer Products and
Services (the businesses described in clauses (a) and (b) above being referred
to herein collectively as the "Competitive Businesses"). Notwithstanding the
foregoing sentence, Seller, Bank of Boston Corporation, BayBanks and their
respective Affiliates shall be permitted, subject to the provisions of Section
16.2, to (a) engage in advertising, solicitations or marketing campaigns,
programs or other efforts not primarily directed to or targeted at Branch
Customers including without limitation, such campaigns, programs or efforts in
connection with Excluded Consumer Products and Services and Excluded Commercial
Products and Services, (b) engage in the offering of Excluded Consumer Products
and Services and Excluded Commercial Products and Services existing as of the
Transfer Date with Branch Customers, which are not acquired or assumed by
Purchaser pursuant hereto, through other branch offices of Seller, (c) respond
to unsolicited inquiries by Branch Customers with respect to banking or other
financial services, including without limitation, Commercial Loans and (d)
provide notices or communications relating to the transactions contemplated
hereby in accordance with the provisions hereof.
Section 10.5. Assumed Contracts. No less than thirty (30) days after the
date hereof, Seller will provide to Purchaser copies of all of the material
<PAGE>
contracts between Seller (and, prior to the Bank Merger, BayBank) and providers
of goods and services related to the Branches. Within fifteen (15) days after
the delivery of such contracts, Purchaser agrees to provide the Seller with a
list of those third party contracts it wishes to assume ("Third Party
Contracts"). The Seller shall promptly request consents of all necessary third
parties to the assignment of the Third Party Contracts, and shall use all
reasonable efforts to obtain such consents, each such consent to be effective on
the Transfer Date; provided that the Seller's failure to obtain such consent
shall not entitle Purchaser to terminate this Agreement. Purchaser shall have no
obligations or liability to any person under any contract that is not a Third
Party Contract, and Purchaser shall have no obligations or liabilities to any
person under any Third Party Contract for which a required third party consent
has not been obtained by the Seller on or prior to the Transfer Date. Anything
contained in this Agreement to the contrary notwithstanding, this Agreement
shall not constitute an agreement to assign any contract, Deposit, or any claim
or right or any benefit arising thereunder or resulting therefrom if an
attempted assignment thereof, without the consent of a third party thereto,
would constitute a breach thereof or in any way affect the rights of any of the
Seller thereunder or be contrary to applicable law.
Section 10.6. Nonsolicitation of Purchaser's Employees. In consideration of
the consummation of the transactions contemplated hereby, Seller agrees that,
for a period of one year following the Transfer Date, it shall not, directly or
indirectly, solicit for employment, retain as an independent contractor or
consultant, induce to terminate employment with Purchaser or otherwise interfere
with Purchaser's employment relationship with any Transferred Employee or any
other employee of the Purchaser involved in branch management, administration or
operations or small business or commercial lending of the Purchaser's branches.
It is expressly acknowledged by the parties hereto that Seller may employ or
retain as an independent contractor or consultant any such Transferred Employee
or other such employee of Purchaser who shall terminate his or her employment
with Purchaser, without any such direct or indirect inducement or interference
by, or other pre-termination contact with, Seller or who shall be terminated by
Purchaser, in either case after the Transfer Date.
<PAGE>
ARTICLE XI
COVENANTS OF PURCHASER
Purchaser covenants and agrees with Seller as follows:
Section 11.1. Conduct of Business. Between the date hereof and the Transfer
Date, Purchaser will operate its business in the usual, regular and ordinary
course and will not materially change its method or manner of doing business.
Section 11.2. Regulatory Approvals and Standards.
(a) Purchaser will use its best efforts to obtain as expeditiously as
possible the Regulatory Approvals and will use its best efforts to prepare
and file within thirty (30) days after the execution of this Agreement all
necessary applications of Purchaser for Regulatory Approvals. Purchaser
will supply to Seller in advance copies of all proposed regulatory
applications and filings and will use reasonable efforts to reflect any
comments of Seller in such applications and filings. As of the Transfer
Date, Purchaser will satisfy any and all of the standards and requirements
reasonably within its control imposed as a condition to obtaining or
necessary to comply with Regulatory Approvals. Purchaser shall pay any
fees charged by any regulatory authorities to which it must apply for any
of the Regulatory Approvals. Purchaser shall take no action which would
adversely affect or delay the ability of any party hereto to obtain any
Regulatory Approval or to perform such party's covenants and agreements
under this Agreement.
(b) From the date hereof through the Transfer Date, Purchaser shall
(i) remain "adequately capitalized" as defined in the Federal Deposit
Insurance Corporation Improvement Act of 1991, as amended, and (ii) meet
all capital requirements, standards and ratios required by each state or
federal bank regulator with jurisdiction over Purchaser, including without
limitation, any such higher requirement, standard or ratio as shall apply
to institutions engaging in the acquisition of insured institution
deposits, assets or branches.
(c) After the Transfer Date it is Purchaser's intention to conduct a
banking business at the Branches, 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 Branches.
Purchaser agrees that it shall be responsible for complying with any
<PAGE>
required branch closing or other notices to regulators and customers
pursuant to Section 42 of FDIA in the event Purchaser should at any
subsequent time determine to close, consolidate or relocate any of the
Branches or to close, consolidate or relocate any branch of Purchaser in
connection with or relating to the transactions contemplated by this
Agreement.
Section 11.3. Corporate and Other Consents; Compliance with Law; Real
Property.
(a) Purchaser shall use its best efforts to secure all necessary
corporate and other non-regulatory consents (except those which the Seller
has expressly agreed herein to obtain) and shall provide certified copies
to Seller upon Seller's request.
(b) Purchaser shall provide such financial and other information as
shall be reasonably requested by landlords under the Branch Leases in
connection with obtaining the Landlord Consents. Notwithstanding anything
to the contrary contained herein, Purchaser agrees that the form of
Landlord Consent with respect to a Branch Lease may be modified at the
request of a landlord to incorporate any and all conditions, terms and
agreements such landlord may require with respect to such landlord's
required consent to the assignment of such Branch Lease to Purchaser;
provided that such conditions, terms and agreements do not constitute a
material or monetary modification or alteration of the terms, covenants
and conditions of such Branch Lease or otherwise impose any burden on
Seller or Purchaser not otherwise contemplated by such Branch Lease.
(c) Purchaser shall promptly order any title certificates or title
searches required in connection with the transfer of the Real Property
under applicable state or local practice.
Section 11.4. Solicitation of Accounts. Prior to the Transfer Date, neither
Purchaser nor its Affiliates shall solicit Branch Customers through advertising
specifically referencing or targeted to such Branch Customers in a way which is
reasonably likely to induce such Branch Customers to close Deposit Liability
accounts and open accounts directly with Purchaser or would otherwise result in
the transfer of all or a portion of an existing Deposit Liability from Seller.
Notwithstanding the foregoing sentence, Purchaser and its Affiliates shall be
permitted, subject to the provisions of Section 16.2, to (a) engage in
advertising, solicitations or marketing campaigns not primarily directed to or
targeted at Branch Customers, (b) engage in lending, deposit, safe deposit,
trust, credit card, mutual fund or other financial services relationships
<PAGE>
existing as of the date hereof with Branch Customers through other branch
offices of Purchaser, (c) respond to unsolicited inquiries by Branch Customers
with respect to banking or other financial services, and (d) provide notices or
communications relating to the transactions contemplated hereby in accordance
with the provisions hereof.
Section 11.5. Nonsolicitation of Seller's Employees. In consideration of,
among other things, the willingness of Seller to provide Purchaser with the
opportunity to interview and hire any of the Branch Related Employees, Purchaser
and its Affiliates agree that, except in accordance with Section 11.6, from the
date hereof through the first anniversary of the Transfer Date, it shall not,
directly or indirectly, solicit for employment, retain as an independent
contractor or consultant, induce to terminate employment with Seller or
otherwise interfere with Seller's employment relationships with any Branch
Employee or Branch Related Employee who is not employed by Purchaser pursuant to
Section 11.6, or any other employee involved in branch management,
administration or operations or small business or commercial lending of any
other branch of Seller or BayBank located in Massachusetts within Route 495. It
is expressly acknowledged by the parties hereto that Purchaser may employ as an
employee or retain as an independent contractor or consultant any such Branch
Employee, Branch Related Employee or other such employee who shall terminate his
or her employment with Seller or BayBank, without any such direct or indirect
inducement or interference by, or other pre-termination contact with, Purchaser
or who shall be terminated by Seller or BayBank, in either case after the
Transfer Date; provided that such employment or retention shall not be
prohibited by any existing agreement between such Branch Employee, Branch
Related Employee or any other such employee and the Seller.
Section 11.6. Offer of Employment with Purchaser. Purchaser will offer
employment beginning as of the Transfer Date for not less than 90 days to all of
the Branch Employees (i) who continue to be employed as of the offer date, (ii)
who are not then receiving long-term disability or worker compensation benefits
and (iii) who are not covered by any agreement, contract or other arrangement
providing severance payments upon termination of employment other than the BKB
Separation Pay Plan for positions and upon the terms and conditions specified in
this Section and Sections 11.7 and 11.10 and otherwise upon the employment
terms, conditions and rules applicable to other employees of the Purchaser
generally. Any offer due to a Branch Employee absent on an unpaid leave may be
deferred until the Branch Employee's return from such leave. Each such Branch
Employee shall be offered a job which: (a) is one which requires a reasonably
similar employment background and skill set as the Branch Employee's current job
<PAGE>
with Seller; (b) pays a base salary equal to such Branch Employee's base salary
as of the date hereof or as increased at any time prior to the Transfer Date but
only to the extent any such increase was granted in the ordinary course of
business and consistent with past practices; (c) requires similarly scheduled
work hours; and (d) is at a work location within thirty (30) miles of commuting
distance from the Branch Employee's current job with Seller. Purchaser may but
shall not be obligated to offer employment to any Branch Related Employee
following the Final Approval Date and in any event at least twenty (20) calendar
days prior to the Transfer Date on the same terms as required hereunder for
Branch Employees. Each Branch Employee and each Branch Related Employee who
accepts such an offer of employment and commences work with Purchaser is
referred to as a "Transferred Employee".
Section 11.7. Benefits. (a) All Transferred Employees will be eligible to
participate in all employee benefit plans in accordance with the terms of such
plans which Purchaser makes available to its employees substantially equivalent
in the aggregate to such plans as in effect as of the date hereof from the
Transfer Date through April 30, 1998 except as described in Annex A to this
Agreement. Purchaser agrees that it will give all Transferred Employees credit
for service with the Seller (and with predecessors of the Seller, in the event
that the Seller gave such Transferred Employee credit for such service) as
constituting service with Purchaser in connection with any waiting periods or
other service requirements which determine (i) eligibility for participation,
(ii) schedule for vesting and/or (iii) differential benefits (but not for
pension benefit accrual) under or with respect to any of Purchaser's pension,
thrift, employee stock ownership (or similar) plans, vacation allotment,
severance, sick leave, health, life, disability or other insurance or any other
similar pension or other benefits. Without limiting the foregoing, Purchaser
shall not treat any Transferred Employee as a new employee for purposes of any
exclusion under any health or similar plan of Purchaser for any preexisting
medical condition.
(b) To the extent that Purchaser provides any Transferred Employee
with benefit or other plans and such plans permit roll-overs, Purchaser shall
allow Transferred Employees to roll over into such plans any distributions or
contributions received from the Seller or its plans.
(c) Purchaser acknowledges Seller may elect to pay a portion of the
generally applicable medical insurance premiums of any Transferred Employee who
as of the Closing Date is a part-time employee (as determined under Seller's
<PAGE>
personnel policies at such Date) and who elects to continue his or her medical
coverage under Seller's plans for himself or herself and/or his or her eligible
dependents pursuant to the provisions of Title I, Part 6 of ERISA. Purchaser
agrees that if Seller so elects, Purchaser shall, so long as each such
Transferred Employee remains employed by the Purchaser or is entitled to medical
coverage as a separation benefit under Section 11.10 and the BKB Separation Pay
Plan, reimburse Seller on a monthly basis in arrears for the portion of such
premiums Seller pays promptly following Seller's submission to Purchaser of the
amounts thereof and identification of the person or persons in respect of whom
such payments were made.
Section 11.8. Overtime and Other Benefits. The Seller shall remain liable
for payment of overtime, medical, dental and life insurance and other marginal
benefits payable to Transferred Employees with respect to periods of employment
ending prior to the Transfer Date including any payments due to any Transferred
Employee under any incentive program of the Seller (including any sales
commission payable to any such employee). Purchaser shall be liable for payment
of overtime, medical and life insurance and other marginal benefits payable to
Transferred Employees with respect to periods of employment from and after the
Transfer Date.
Section 11.9. Benefit Plans. The Seller shall remain solely responsible for
the payment of all accrued benefits and accrued vacation to Transferred
Employees in accordance with the terms of any benefit plan of the Seller or its
predecessors with respect to periods of employment ending prior to the Transfer
Date. Purchaser assumes responsibility for any employee benefits accrued and
payable to Transferred Employees from and after the date of their employment
with Purchaser. Notwithstanding the foregoing, Purchaser assumes responsibility
for accrued sick pay as described on Annex A.
Section 11.10. Termination. Purchaser agrees that, if the employment by
Purchaser of any Transferred Employee ends prior to April 30, 1998, Purchaser
shall make available to such Transferred Employee either separation benefits in
the amount and form described in the BKB Separation Pay Plan if and to the
extent such Transferred Employee would have been entitled to separation benefits
under the BKB Separation Pay Plan in the circumstances of the Employee's actual
termination of employment with Purchaser or the separation benefits offered by
Purchaser to its employees in the circumstances of the Transferred Employee's
termination, if any, at the time of termination, whichever benefits are most
favorable to the Transferred Employee.
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Nothing in the foregoing or the terms of the BKB Separation Pay Plan shall
be construed to obligate Purchaser to provide separation benefits in the amounts
and circumstances described in that Plan in the case of a termination of
employment subsequent to April 30, 1998. For the purpose of facilitating
Purchaser's delivery of transition assistance required as a separation benefit
as described in the BKB Separation Pay Plan, Seller shall make available the
resources of its Transition Assistance Program to qualifying Transferred
Employees at Purchaser's expense.
Section 11.11. Interviews. Purchaser shall be solely responsible for any
acts or omissions which are wrongful, illegal or in contravention of this
Agreement made by it in connection with interviewing the Branch Employees and
Branch Related Employees. Purchaser indemnifies and agrees to hold Seller
harmless from and against any claim, liability, losses, costs or expenses,
including reasonable attorneys' fees, resulting or arising from Purchaser's acts
or omissions which are wrongful, illegal or in contravention of this Agreement
in connection with said interviews. Seller indemnifies and agrees to hold
Purchaser harmless from and against any claim, liability, losses, costs or
expenses, including reasonable attorneys' fees, resulting or arising from
Seller's acts or omissions in connection with said interviews.
ARTICLE XII
ENVIRONMENTAL DUE DILIGENCE; EMPLOYEE NOTICES; ETC.
Section 12.1. Environmental Due Diligence.
(a) Seller shall provide to Purchaser, within 15 days after the date
hereof, copies of all material documents, to the extent permissible under
such documents, in its possession or control or reasonably available to
Seller concerning any Environmental Hazards on or affecting or relating to
the Real Property or any facilities or improvements or any operations or
activities thereon, whether generated by Seller or others, including,
without limitation, environmental audits, environmental risk assessments,
or site assessments of the Real Property. Seller makes no representations
or warranties as to the truth or accuracy of any of the statements
contained in the foregoing documents. Seller agrees to use reasonable
efforts to obtain any necessary consents required to deliver copies of
such documents to Purchaser.
<PAGE>
(b) Purchaser may conduct at its own expense environmental audits by
an independent qualified environmental engineer or consultant (the
"Environmental Consultant") of the Real Property during the Environmental
Due Diligence Period. In the event Purchaser conducts a Phase I audit,
Purchaser shall use its best efforts to commence such audit within seven
(7) days from the date of receipt by Purchaser of the items referred to in
paragraph (a) above.
(c) In the event the Phase I audit of any of the Real Property is not
completed within the Environmental Due Diligence Period through no fault
of Purchaser or its Environmental Consultant, Purchaser may request an
extension of the Environmental Due Diligence Period for a reasonable
period not exceeding fifteen (15) days solely to permit completion of such
Phase I audit.
(d) In the event that as a result of such Phase I audit, Purchaser
elects in the exercise of its reasonable business judgment to conduct a
Phase II environmental audit by the Environmental Consultant of any of the
Real Property, upon receipt of written notice of such election and a copy
of any report prepared with respect to such Phase I audit evidencing a
reasonable basis for such election prior to the conclusion of the
Environmental Due Diligence Period, Seller shall extend such Environmental
Due Diligence Period for an additional thirty (30) days solely to permit
completion of such Phase II audit.
(e) In the event that during the Environmental Due Diligence Period
or any extension thereof pursuant to this Section 12.1, Purchaser shall
notify Seller in writing that the Environmental Consultant has discovered
any Environmental Hazards at or on any parcel of the Real Property, the
remediation of which, in the reasonable judgment of the Environmental
Consultant, is the responsibility of Seller, and will cost more than
$25,000, Seller may elect to:
(i) make an adjustment to the Purchase Price for the estimated
remediation costs of any such Environmental Hazards which shall not
have been remediated on or prior to the Transfer Date, in excess of
$25,000 with respect to such parcel of Real Property; or
(ii) take such remediation steps as are necessary to make the
Real Property comply with Environmental Laws by the Transfer Date (or
<PAGE>
make provisions for such remediation steps following the Transfer
Date as shall be reasonably satisfactory to Purchaser); or
(iii)lease to Purchaser such parcel of Real Property for a
period of ten (10) years pursuant to a Lease Agreement; provided that
if, during the term of such Lease Agreement or renewal or extension
thereof, Seller shall deliver to Purchaser a report as shall be
reasonably satisfactory to Purchaser of an independent qualified
environmental engineer or consultant certifying that the
Environmental Hazards at or on any such leased parcel of Real
Property has been remediated to the extent required under applicable
Environmental Laws, Purchaser shall be required to purchase such
parcel of Real Property, at the Real Property Purchase Price, in the
event such report is delivered within twelve (12) months after the
Transfer Date, and, thereafter, at the fair market value of such Real
Property as agreed to by the parties hereto or, if no such agreement
is reached within thirty (30) days after delivery of such report, as
determined pursuant to an appraisal pursuant to Section 14.4.
(f) Purchaser agrees that it and its Environmental Consultant shall
conduct any Phase I or II audits or other investigations pursuant to this
Section 12.1 with reasonable care and subject to customary practices among
environmental consultants and engineers, including without limitation,
following completion thereof the restoration of any site to the extent
practicable to its condition prior to such audit or investigation and the
removal of all monitoring wells.
Section 12.2. Access to Branches by Purchaser. Upon execution of this
Agreement, Seller shall provide Purchaser and its representatives, accountants
and counsel reasonable access to the Branches, employees, depository records,
Loan files and all other documents and other information concerning the Branches
as Purchaser may reasonably request in order for Purchaser to perform a review
of the same; provided that, with respect to Branch Employees, Seller's sole
obligation shall be to provide Purchaser with information concerning the name,
position, date of hire and salary of such Branch Employees, and Seller shall not
be required to provide any information concerning its "credit scoring" system
(except to the extent reasonably necessary to enable Purchaser to evaluate the
ratings of Loans under Seller's internal loan rating system for purposes of
Section 2.4) or any other proprietary information as to its business, branch or
credit practices, policies or procedures. Seller shall provide Purchaser with
<PAGE>
assistance in Purchaser's investigation relating to the Branches, Assets and
Deposit Liabilities; provided that Purchaser's investigation shall be conducted
in a manner which does not unreasonably interfere with Seller's normal
operations, customers and employee relations; and provided further, that if
Purchaser's investigation occurs during non-business hours, the expenses
incurred by Seller as a result of such investigation during non-business hours
shall be paid by Purchaser to Seller prior to or on the Transfer Date.
ARTICLE XIII
INDEMNITY
Section 13.1 Seller's Indemnity. Except as otherwise provided in this
Agreement, Seller shall indemnify, hold harmless and defend Purchaser, its
Affiliates, and their respective directors, officers, agents and employees from
and against all claims, losses, liabilities, demands and obligations (including
reasonable legal fees and expenses) (collectively, "Damages") which Purchaser or
any of its Affiliates and their respective directors, officers, agents and
employees shall receive, suffer or incur arising out of or resulting from (a)
any liability of Seller not assumed by Purchaser hereunder in accordance with
Section 2.2 hereof, including without limitation any liability of the Seller for
violations of Environmental Law and the ADA, (b) any actions taken or omitted to
be taken by Seller prior to the Transfer Date and relating to the Branches,
Assets, Assumed Liabilities, Branch Employees, Branch Related Employees, and any
suits or proceedings commenced in connection therewith (other than proceedings
to prevent or limit the consummation of the transactions contemplated by this
Agreement), (c) all liabilities under all pension and welfare benefit plans (as
defined in Sections 3(1) and (2) of ERISA), or any supplemental unemployment
benefit, deferred compensation, or other employee benefit plan of Seller with
respect to any and all periods prior to and subsequent to the Transfer Date,
including without limitation, all liabilities under ERISA, any liabilities for
any accumulated funding deficiency as such term is defined in Section 302 of
ERISA and Section 412 of the Code and for any liability to the Pension Benefit
Guaranty Corporation, the IRS, participants, beneficiaries, employees, or any
other public or private person, incurred with respect to or attributable to any
plan of Seller and (d) the breach of any material representation, warranty or
covenant made by Seller in this Agreement.
Section 13.2. Purchaser's Indemnity. Except as otherwise provided in this
Agreement, Purchaser shall indemnify, hold harmless and defend Seller, its
<PAGE>
Affiliates and their respective directors, officers, agents and employees from
and against all Damages which Seller or any of its Affiliates and their
respective directors, officers, agents, and employees shall receive, suffer or
incur arising out of or resulting from (a) any liability of Seller assumed by
Purchaser in accordance with Section 2.2 hereunder, including the Assumed
Liabilities, (b) any actions taken or omitted to be taken by Purchaser from or
after the Transfer Date and relating to the Branches, Assets, Assumed
Liabilities, Branch Employees, Branch Related Employees, and any suits or
proceedings commenced in connection therewith (other than proceedings to prevent
or limit the consummation of the transactions contemplated in this Agreement),
and (c) the breach of any material representation, warranty or covenant made by
Purchaser in this Agreement.
Section 13.3. Indemnification Procedure. If a party entitled to
indemnification hereunder ("Indemnified Party") is aware that a claim, demand or
other circumstance exists that has given or may reasonably be expected to give
rise to a right of indemnification under this Article XIII (whether or not the
amount of the claim is then quantifiable), such Indemnified Party shall promptly
give written notice thereof to the other party ("Indemnitor"), and the
Indemnified party will thereafter keep the Indemnitor reasonably informed with
respect thereto, provided that failure of the Indemnified Party to give the
Indemnitor prompt notice as provided herein shall not relieve the Indemnitor of
its obligations hereunder except to the extent, if any, that the Indemnitor's
rights shall have been prejudiced or the Indemnitor's liability shall have been
increased thereby. In case any such action, suit or proceeding is brought
against an Indemnified Party, the Indemnitor shall be entitled to participate in
(and, in its discretion, to assume) the defense thereof with counsel reasonably
satisfactory to the Indemnified Party, provided, however, that the Indemnified
Party shall be entitled to participate in any such action, suit or proceeding
with counsel of its own choice at the expense of the Indemnitor if, in the good
faith judgment of the Indemnified Party's counsel, representation by the
Indemnitor's counsel may present a conflict of interest or there may be defenses
available to the Indemnified Party which are different from or in addition to
those available to the Indemnitor. The Indemnitor will not settle any claim,
action, suit or proceeding which would give rise to the Indemnitor's liability
under its indemnity unless such settlement includes as an unconditional term
thereof the giving by the claimant or plaintiff of a release of the Indemnified
Party, in form and substance reasonably satisfactory to the Indemnified Party
and its counsel, from all liability with respect to such claim, action, suit or
<PAGE>
proceeding. If the Indemnitor assumes the defense of any claim, action, suit or
proceeding as provided in this Section 13.3, the Indemnified Party shall be
permitted to join in the defense thereof with counsel of its own selection and
at its own expense. If the Indemnitor shall not assume the defense of any claim,
action, suit or proceeding, the 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 13.4. Nonsolicitation. Notwithstanding anything to the contrary
contained herein, if Seller shall breach its covenants set forth in Section 10.4
and obtain a relationship for Competitive Businesses from a Branch Customer
through a solicitation which is prohibited by Section 10.4, Purchaser's sole
remedy with respect thereto shall be to notify Seller in writing thereof on or
before the first anniversary of the Transfer Date, in which event Seller shall,
to the extent practicable, transfer any deposit or loan account relating to such
relationship to Purchaser for a purchase price equivalent to what would have
been paid for such account if it had been included in the Deposit Liabilities or
the Loans on the Transfer Date.
Section 13.5. Survival. All indemnities contained in or made pursuant to
this Agreement shall survive the Closing for a period of one (1) year after the
Transfer Date, except as to any claim for which written notice shall have been
given prior to such date.
Section 13.6. Limitations on Liability. Notwithstanding anything to the
contrary contained in this Article XIII, no party shall be entitled to
indemnification pursuant to Sections 13.1 or 13.2 until its aggregate Damages
shall exceed $75,000 at which time such party shall be entitled to
indemnification for the full amount of its Damages to the extent that such
Damages exceed such amount. As provided in Section 16.10, in no event shall any
party be indemnified for any incidental, consequential, special, exemplary or
punitive damages.
Section 13.7. General. (a) Each Indemnified Party shall be obligated in
connection with any claim for indemnification under this Article XIII to use all
commercially reasonable efforts to obtain any insurance proceeds available to
such Indemnified Party with regard to the applicable claims. The amount which
any Indemnitor is or may be required to pay to any Indemnified Party pursuant to
this Article XIII shall be reduced (retroactively, if necessary) by any
<PAGE>
insurance proceeds or other amounts actually recovered (net of any direct
relevant collection costs) by or on behalf of such Indemnified Party in
reduction of the related Damages. If an Indemnified Party shall have received
the payment required by this Agreement from the Indemnitor in respect of Damages
and shall subsequently receive insurance proceeds or other amounts in respect of
such Damages, then such Indemnified Party shall promptly repay to the Indemnitor
a sum equal to the amount of such insurance proceeds or other amounts actually
received (net of any direct relevant collection costs).
(b) In addition to the requirements of paragraph (a) above, each
Indemnified Party shall be obligated in connection with any claim for
indemnification under this Article XIII to use all commercially reasonable
efforts to mitigate Damages upon and after becoming aware of any event which
could reasonably be expected to give rise to such Damages.
(c) Subject to the rights of existing insurers of an Indemnified Party, an
Indemnitor shall be subrogated to any right of action which the Indemnified
Party may have against any other Person with respect to any matter giving rise
to a claim for indemnification from such Indemnitor hereunder.
(d) Except for the parties' rights to specific performance and injunctive
relief as described in Sections 16.16 and 13.4, the indemnification provided in
this Article XIII shall be the exclusive post-Transfer Date remedy available to
any Indemnified Party with respect to any breach of any representation,
warranty, covenant or agreement made by Purchaser to Seller in this Agreement.
(e) Notwithstanding anything contained in any provision of this Agreement
to the contrary, each party hereto understands and agrees that neither party
hereto is making any representation or warranty whatsoever, express or implied,
other than the representations and warranties expressly made by such party
herein.
ARTICLE XIV
TRANSITIONAL MATTERS
Section 14.1. Further Assurances. From and after the Transfer Date:
(a) Except as specifically provided otherwise herein, Seller shall
assist Purchaser in the orderly transition of the operations of the
<PAGE>
Branches 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 Assets in the manner
contemplated hereby; provided that Seller need not incur any costs or
expenses in connection with its agreements in this Section 14.1 unless
such costs or expenses are paid by Purchaser; and
(b) Except as specifically provided otherwise herein, Purchaser shall
give such further assurances to Seller 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 Seller from any obligations remaining with respect to the
Deposit Liabilities or other Assumed Liabilities; provided that Purchaser
need not incur any costs or expenses in connection with its agreements in
this Section unless such costs or expenses are paid by Seller.
Section 14.2. Access to and Retention of Books and Records. On the Transfer
Date, to the extent practicable, Purchaser shall receive possession of, and all
right, title and interest in, all books and records relating to the Loans, the
Advance Accounts, the Deposit Liabilities, the Assets, the Assumed Liabilities,
and the operation of the Branches and located at the Branches which are in the
possession of Seller; provided that for a period of at least six (6) years from
the Transfer Date, each party shall have reasonable access to any such books and
records in the possession of the other party and the books and records of the
Branches, and the requesting party, at its own expense, may make copies and
extracts when such copies and extracts are required by regulatory authorities,
for litigation purposes, accounting purposes or as otherwise appropriate;
provided further that in the event that as of the end of such period, any tax
year of the Seller is under examination by any taxing authority, such books and
records shall be maintained by Purchaser until a final determination of the tax
liability of Seller for that year has been made. If such copies or extracts
require use of a party's equipment or facilities, the user shall reimburse the
other party for all costs incurred, including without limitation, employee
expenses. Notwithstanding the foregoing, except as expressly set forth in this
Section 14.2, neither party shall have any obligation to retain records beyond
any statutorily required or commonly acceptable time limit. Purchaser agrees to
maintain records with respect to the Branches for the applicable periods set
forth above. Notwithstanding anything to the contrary contained herein (i) the
obligations of the parties hereto under this Section 14.2 shall be subject to
<PAGE>
all applicable laws relating to the confidentiality of bank records and (ii)
Seller shall have no obligation to provide proprietary information that is
unrelated to the processing or resolution of disputes or bona-fide inquiries
relating to Branch Customers.
Section 14.3. Deposit Histories. In case of any dispute with or inquiry by
any Branch Customer whose Deposit Liability account is subject to this
Agreement, which dispute or inquiry relates to the servicing of such account by
Seller or BayBank prior to the date for which a deposit history has been
provided to Purchaser, Seller will provide Purchaser, where available and to the
extent reasonably requested by Purchaser and not already provided to Purchaser,
information regarding the Deposit Liability account and copies of pertinent
documents or instruments with respect to such dispute or inquiry so as to permit
Purchaser to respond to the Deposit Liability account holder within a period of
time and in a manner which would comply with standard banking practices and
customs.
Section 14.4. Appraisal of Real Property.
(a) As contemplated by Sections 2.1(c) and 12.1(d), prior to the
Closing either party may designate by written notice to the other an
independent certified appraiser or appraisers to determine the fair market
value of the Real Property or its fair rental value as of the Transfer
Date using appraisers having at least ten (10) years experience in
appraising commercial properties similar to the properties being
appraised.
(b) Unless such other party shall object in writing within ten (10)
days of receipt of such designation, such appraiser or appraisers shall
conduct appraisals of the fair market or rental value of the Real Property
and deliver two copies of reports thereof to each of Seller and Purchaser.
(c) In the event the other party shall so object to the first party's
designation, the other party's written objection shall designate an
independent certified appraiser or appraisers acceptable to it, having at
least ten (10) years experience in appraising commercial properties
similar to the properties being appraised, which shall conduct such
appraisals and deliver such copies of reports thereof unless the first
party shall object in writing to the appraiser or appraisers designated by
the other party within ten (10) days of such objection.
(d) In the event the first party shall so object to the other party's
designation, the appraisers designated by Seller and the Purchaser shall
<PAGE>
mutually designate an independent certified appraiser to conduct such
appraisals and deliver such copies of reports thereof.
(e) The fair market or rental value of the Real Property (the
"Appraised Value") as determined by the appraiser or appraisers designated
pursuant to (a), (c) or (d) above shall be final and binding upon the
parties hereto. Notwithstanding the foregoing, except as expressly
contemplated by Sections 2.1(c) and 12.1(d), Appraised Value shall have no
bearing whatsoever on the Real Property Purchase Price.
(f) The party initiating the appraisal shall pay the cost of
retaining the appraiser or appraisers which determines the Appraised Value
in accordance with this Section 14.4.
Section 14.5. Data Processing and Transfer Services. (a) Seller and
Purchaser shall diligently pursue discussions regarding conversion issues among
their operations and systems personnel, Seller's present check vendors and the
check vendors designated by Purchaser, and Seller at its expense shall provide
data conforming to industry standards regarding the Deposits, Loans and Advance
Accounts to Purchaser, including a list of all account numbers, account parties
and addresses of such parties, on computer readable magnetic tape with
associated tape file layouts presented on magnetic media and in such other form
or forms as may be mutually agreed to by Seller and Purchaser, to enable the
Purchaser to convert such data onto Purchaser's data processing systems by the
Transfer Date. Seller agrees to use all reasonable efforts to deliver to the
Purchaser the tape described in the foregoing sentence on the following three
(3) occasions: (i) as soon as practicable but in any event within thirty (30)
calendar days after the Final Approval Date, (ii) within five (5) Business Days
after request therefor given by the Purchaser approximately thirty (30) days
prior to the Closing, and (iii) within twenty-four (24) hours after the close of
business on the day of the Closing. Purchaser hereby acknowledges that each such
tape provided prior to the Closing shall be based upon the best information
available to the Seller at the time of the preparation thereof and may not
reflect all of the information necessary for the conversion onto the system of
Purchaser of the Deposits or Loans to be transferred to Purchaser pursuant
hereto. In addition, Seller agrees to use all reasonable efforts to deliver to
the Purchaser a tape in the form described above, but containing artificial
data, as soon as practicable but in any event within thirty (30) calendar days
after the date hereof.
<PAGE>
(b) Notwithstanding the foregoing, neither the Seller nor BayBank
shall be required to reformat, recode or otherwise alter its data files or
repeat delivery of its data files, unless arrangements satisfactory to the
Seller are made for the Purchaser's payment of the cost of such incremental
actions, nor shall the Seller be required to provide information to any third
party unless such Person shall have executed a confidentiality agreement in form
and substance acceptable to the Seller.
(c) All data and other information provided to the Purchaser or
any other Person pursuant to this section shall remain the Seller's or BayBank's
sole and exclusive property until the Transfer Date for the Assets or the
Assumed Liabilities to which such information relates and shall be subject to
the confidentiality provisions of this Agreement and the Confidentiality
Agreements.
(d) Beginning not earlier than seven (7) calendar days before the
Closing, the Purchaser shall be entitled to make reasonably necessary entry onto
the Branch premises at mutually agreed times during normal business hours,
without disruption of Branch operation, for the purpose of installing telephone
and/or data lines necessary for the operation of the Branches or automated
teller machines from and after the Transfer Date.
(e) The Purchaser agrees and acknowledges that, except as
expressly stated above, it shall be solely responsible for, and shall indemnify
and hold harmless the Seller for, all costs and expenses, including without
limitation overtime payable to Seller's employees, relating to the conversion
process.
Section 14.6. Commercial Loan Matters. In the event that during the period
beginning on the Transfer Date and ending six months thereafter, any Commercial
Loans purchased by the Purchaser hereunder are repaid or prepaid in whole or in
part (other than at the scheduled maturity thereof) with proceeds of a
Commercial Loan made by Seller, then, upon the request of Purchaser, Seller will
assign to Purchaser, at no additional cost to Purchaser, a one-year
participation in one or more Commercial Loans held by Seller in an aggregate
principal amount approximately equal to the principal amount so repaid or
prepaid and bearing interest at a rate approximately the same as the interest
rate on, and having a maturity approximately the same as the maturity on, the
Commercial Loan so repaid or prepaid.
<PAGE>
ARTICLE XV
POST-CLOSING PROCESSING OF ITEMS
Section 15.1. Mutual Cooperation. In order to accomplish a smooth
transition between the Seller and the Purchaser relative to the processing of
debits and credits to the Deposit accounts transferred to and assumed by the
Purchaser under this Agreement (referred to for purposes of this Section 15 as
the "Transferred Accounts") following the Transfer Date, each of the Seller and
the Purchaser agrees to cooperate in good faith in the post-transfer processing
of checks, drafts, deposit tickets for deposits made prior to the Transfer Date,
withdrawal orders and other items pertaining to Transferred Accounts
(collectively, the "Items") and payments of principal and interest received by
Seller after the Transfer Date with respect to the Loans, and agrees to the
terms of this Section 15. The parties intend that the Uniform Commercial Code as
in effect in the Commonwealth of Massachusetts, applicable federal regulations
and usual banking practices shall govern the processing of Items during the
Post-Transfer Processing Period, except as otherwise agreed below. This Section
15 and the other provisions of this Agreement constitute an agreement between
the Seller and the Purchaser only, and no third party shall be, or shall be
deemed to be, entitled to rely on, or to receive any direct or indirect benefit
from, any of the provisions hereof.
Section 15.2. Covenants of Purchaser.
(a) No later than seven (7) calendar days prior to the Closing, the
Purchaser shall distribute at its sole expense in the Purchaser's usual fashion
to customers of the Seller whose Deposit accounts are expected to be assumed by
the Purchaser having checking, money market deposit and/or NOW or SuperNOW
accounts at the Branches, an initial supply of new basic checks, deposit tickets
or other similar instruments and ATM cards, which shall be appropriately encoded
with the Purchaser's routing numbers and with accurate account numbers for use
by such customers following the Transfer Date. The Purchaser shall notify such
customers that (i) following the Transfer Date customers of the Branch are to
use the new checks issued by the Purchaser and are not to use any remaining
checks, deposit tickets or other Items or any ATM cards previously issued by the
Seller which may be in the possession of such customers and (ii) upon the
expiration of a period of ninety (90) calendar days from and after the Transfer
Date (the "Post-Transfer Processing Period"), any Items which are drawn on the
Seller shall not thereafter be honored by the Seller. Such notice shall be given
by delivering written instructions to such effect to such customers prior to the
<PAGE>
Transfer Date and by posting signs in the Branches beginning 30 days prior to
the Transfer Date and during the Post-Transfer Processing Period. The form of
such notice shall be subject to the prior written approval of the Seller in
accordance with the procedures set forth in Section 12.4 hereof. In the event
that the Seller shall so request at any time(s) during the Post-Transfer
Processing Period, the Purchaser shall use all reasonable efforts to notify
particular customers to stop using the Seller's checks and to stop attempting to
make deposits into the Transferred Accounts. The Purchaser agrees to be in a
position to process the Transferred Accounts on its system on the Transfer Date.
Subject to the terms of Section 16.2, Purchaser and Seller will mutually
determine any documents, instruments and/or notices to be given to other holders
of Deposit accounts to be assumed by Purchaser.
(b) During the Post-Transfer Processing Period, the Purchaser shall
maintain a demand deposit account at the Seller ("Purchaser's DDA") and hereby
authorizes the Seller to debit and credit the Purchaser's DDA as provided below
in this Section 15. The Purchaser and the Seller shall identify to the other and
make available on a daily basis individuals to serve as liaisons between the
Purchaser and the Seller in order to resolve any settlement or other
reconciliation issues relating to the Transferred Accounts.
Section 15.3. Delivery of Items. During the Post-Transfer Processing
Period, the Seller shall make all Items received by it available to the
Purchaser at the Seller's data processing center at 2 Morrissey Boulevard,
Dorchester, Massachusetts, or at BayBank's data processing center at One BayBank
Technology Place, Waltham, Massachusetts on or before 2:00 p.m. on the Business
Day following receipt thereof by the Seller. If on account of a delay by the
Seller in making an Item available to the Purchaser for pickup by the deadline
specified herein, the Purchaser is unable to meet applicable deadlines for
dishonoring such Item, then upon the Purchaser's request the Seller shall
promptly credit to the Purchaser's DDA an amount equal to the amount of such
Item, subject to prompt reversal if the Purchaser is able to return such Item
notwithstanding the Purchaser's failure to meet such deadlines. At Seller's
request, Purchaser will assign to the Seller all of Purchaser's rights in any
such Items that are not so reversed.
Section 15.4. Post-Closing Items Drawn on Seller. During the Post-Transfer
Processing Period, the Seller shall: (a) accept for forwarding to the Purchaser
all Items which are presented to the Seller for payment in any manner including
without limitation through the Seller's Federal Reserve cash letters or
correspondent bank cash letters or deposited by the Seller's customers,
<PAGE>
correspondent banks or others but excluding ATM withdrawals, deposits and
transfers unless initiated with an ATM card issued by Purchaser; (b) outsort all
such Items and deliver them to the Purchaser as provided in Section 15.3 above;
(c) notify the Purchaser by telephone by noon of the Business Day following the
Seller's receipt of any Item in excess of $10,000 that the Seller has received
such Item, whereupon the Purchaser will direct the Seller to either return, pay
or deliver over (in accordance with Section 15.3 above) such Item and the Seller
shall promptly comply with such direction; and (d) debit the Purchaser's DDA for
the amount of any Items that the Seller has paid unless the Purchaser has
directed the Seller to return such Item.
Section 15.5. Items Drawn on Seller and Returned by Purchaser. The
Purchaser will promptly process all Items received from the Seller and will
honor all Items properly drawn on the Transferred Accounts. In the event that
the Purchaser shall return an Item, the Purchaser shall prepare and process
their returns in the Purchaser's normal fashion. In the event that such Item is
recharged to the Seller for any reason (except as a result of the negligence of
the Seller), the Seller may then debit the Purchaser's DDA for the amount of
such Item recharged to the Seller. Any other Item recharged to the Seller shall
be handled in the manner provided by Sections 15.3 and 15.4 hereof.
Section 15.6. Deposits Inadvertently Received by Seller. The Seller shall
be under no obligation to accept after the Transfer Date any deposits for the
Transferred Accounts. In the event that the Seller accepts any deposits for the
Transferred Accounts after the Transfer Date, the Seller will credit promptly
the Purchaser's DDA for the amount of any such deposits and will deliver deposit
tickets for such deposits to the Purchaser in the manner and at such time as is
set forth in Section 15.3 above. The Seller will credit the Purchaser's DDA for
any electronic credits to the Transferred Accounts which the Seller may receive
during the Post-Transfer Processing Period and will notify the Purchaser
promptly of such credits. The Purchaser agrees to credit promptly customers in
the amount of such deposits and electronic credits and to process any such Items
so deposited and transferred to the Purchaser for collection. Promptly following
the Transfer Date, the Purchaser shall notify originators of electronic credits
of the new account numbers of the Purchaser for the Transferred Accounts.
Section 15.7. Checks Cashed by Seller. From and after the Transfer Date,
the Seller shall establish reasonable policies and controls to inform its
tellers not to honor in-person requests at tellers' windows to cash checks drawn
on the Transferred Accounts or otherwise withdraw funds from Transferred
<PAGE>
Accounts nor to accept or honor attempted ATM or electronic transactions with
respect to Transferred Accounts except for transactions using access devices
provided by Purchaser. The Seller shall be under no obligation to honor or cash
Items drawn on a Transferred Account presented at tellers' windows after the
Transfer Date. However, in the event that after the Transfer Date the Seller
shall inadvertently cash, at one of the Seller's branches, or shall otherwise
give credit for any Item drawn on a Transferred Account, the Seller may debit
the Purchaser's DDA in the amount of such Item and shall thereafter make
available such Item for pickup by the Purchaser in the manner and at the time
provided in Section 15.3 above. Should the Purchaser determine that such Item is
not properly payable and subsequently dishonor such Item, the Purchaser shall
give prompt written notice thereof to the Seller and the Seller shall promptly
credit the Purchaser's DDA for the amount of such Item whereupon the Purchaser
shall take reasonable steps to cooperate with the Seller to mitigate any loss to
the Seller resulting from the foregoing. The Seller shall be entitled to present
Items to the Purchaser any number of times in accordance with the Seller's usual
banking practices for returned Items. In the event that the Item is subsequently
paid by the Purchaser, the Seller shall debit the Purchaser's DDA for the amount
of such Item.
Section 15.8. Adjustments for Accounts with Negative Balances. If the
balance(s) of any of the Deposits were negative on the Transfer Date and are
also negative on the close of business on the date which is thirty (30) days
after the Transfer Date, then at Purchaser's request within 5 days after the end
of such thirty (30) day period, Seller shall pay to the Purchaser in cash an
amount equal to Purchaser's total cost for such account(s) (net of any credits
against the negative Deposits after the Transfer Date) plus interest on the
average negative balance in such account(s) from and including the Transfer Date
calculated at the Federal Funds Rate, and Seller shall acquire all of
Purchaser's rights with respect to such negative Deposit balance. For purposes
of this Section 15.8, Purchaser's total cost for an account shall be the amount
the Purchaser paid for such account pursuant to Section 3.1(b).
ARTICLE XVI
MISCELLANEOUS
Section 16.1. Expenses. Except as otherwise provided herein, Seller and
Purchaser shall each pay all of their own out-of-pocket expenses in connection
with this Agreement, including appraisals, accounting and legal fees, if any,
whether or not the transactions contemplated by this Agreement are consummated.
<PAGE>
Purchaser shall pay all recording, filing or other fees, cost and expenses
(including fees, costs and expenses for (a) preparation of title certificates or
searches, surveys, inspections, environmental audits or other investigations,
(b) filing of any forms (including without limitation tax forms) with
governmental instrumentalities in connection with the transfer of the Real
Property or Personalty, and (c) recording instruments or documents evidencing
any transfers of interests in real property) applicable to or arising in
connection with the transfer, assignment or assumption of the Loans, the Real
Property, the Branch Leases or the Personalty, including, without limitation,
any real property transfer stamps or taxes imposed on any transfers of interests
in real property.
Section 16.2. Communications; Notices; etc. Subject to regulatory
restrictions:
(a) Seller and Purchaser agree that promptly following the execution
of this Agreement, meetings, joint or several, of Seller, BayBank and
Purchaser as the parties and BayBank may agree, shall be held at the
Branches or at such other location as Purchaser, BayBank and Seller shall
mutually agree, to announce Purchaser's proposed acquisition of the
Branches to the Branch Employees. Except as otherwise set forth in this
Section 16.2, Seller, BayBank and Purchaser shall mutually agree as to the
scope and content of all initial communications to the Branch Employees.
Thereafter, Purchaser shall be permitted to meet with the Branch Employees
working at the Branches on the date of this Agreement, at times mutually
convenient to Purchaser, BayBank and Seller to discuss employment
opportunities with Purchaser. Seller and BayBank may temporarily transfer
employees from other branches to the Branches, but except as otherwise
allowed by the definition of Branch Employee, none of such employees shall
be treated as Branch Employees. From and after the Final Approval Date,
Purchaser shall be permitted to conduct training sessions during normal
business hours or at other times with the Branch Employees; provided that
Purchaser will use reasonable efforts to schedule such training sessions
in a manner which does not unreasonably interfere with Seller's or
BayBank's normal business operations. Purchaser shall reimburse the Branch
Employees for transportation costs to and from the location where
Purchaser shall train such employees and compensate the Branch Employees
at their respective applicable standard or overtime rates for the time
spent in such training.
<PAGE>
(b) After the Final Approval Date and prior to the Transfer Date, on
a date certain which is mutually agreeable to the parties, Seller, BayBank
and Purchaser shall each send statements (or, in the event the parties and
BayBank shall mutually agree, the parties and BayBank shall send a joint
statement) to the Branch Customers announcing the transactions
contemplated hereby. Upon or after the mailing of the statements described
in the immediately preceding sentence, Purchaser agrees to provide all
Branch Customers having Loan relationships with written notice of
Purchaser's intent to purchase the Loans. No later than seven (7) calendar
days prior to the Closing, Seller shall notify in writing all such Branch
Customers having such loan relationships that from and after the Transfer
Date, such Branch Customers are to make principal and interest payments on
the Loans to the Purchaser in the manner stipulated by the Purchaser.
(c) Seller and BayBank, and after the Final Approval Date, Purchaser
shall, in each case, at its own expense, be entitled to communicate with,
and deliver information, notices, brochures and bulletins to Branch
Employees, Branch Related Employees, Branch Customers and members of the
communities in which the Branches are located, and to make press releases
or public announcements or other communications concerning the
transactions contemplated by this Agreement, and Seller shall assist
Purchaser by providing mailing lists of such Branch Employees, Branch
Related Employees and Branch Customers, or by itself mailing such
materials or communications to such Persons, in each case upon Purchaser's
request and at Purchaser's expense.
(d) Prior to the Final Approval Date, except as otherwise expressly
set forth in this Section 16.2, Purchaser (i) shall not contact or
communicate with any Branch Customer without the prior written consent of
Seller; and (ii) shall not communicate with a Branch Employee without the
prior written consent of Seller which will not be unreasonably withheld.
(e) Purchaser and Seller shall each furnish to the other copies of
the text of all notices, advertisements, information or communications,
written or oral, proposed to be sent or transmitted by the furnishing
party to Branch Employees, Branch Related Employees, Branch Customers or
the public generally regarding the proposed or actual transfer of Deposit
Liabilities, Advance Accounts, the other Assets or Assumed Liabilities
and/or the purchase and sale of the Branches (including any public notices
required to be given by law or regulation in connection with such
<PAGE>
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 or delayed); provided, however, that nothing in
this Section 16.2 shall (i) prohibit any party from making any press
release or announcement which its legal counsel reasonably deems necessary
under law, if it makes a good faith effort to obtain the other party's
consent to the text of the press release or announcement before making it
public, or (ii) require Seller to furnish to Purchaser or obtain
Purchaser's consent for any communication (A) made in an ad hoc fashion
that is responsive to issues or questions of any Branch Employees, Branch
Related Employees or Branch Customers or (B) that makes factual statements
about the transactions contemplated hereby and does not disparage
Purchaser.
(f) Seller and Purchaser shall each deliver to the other copies of
all proposed filings with bank regulatory and other governmental
authorities, shall use their respective reasonable efforts to accommodate
any suggestions or recommendations made by the other with respect thereto
and shall deliver to the other, as soon as practicable, all final
applications to bank regulatory and other governmental authorities.
Section 16.3. Trade Names and Trademarks. Purchaser shall not acquire
hereunder any right or license to the use of any trade name, trademark or
service mark, if any, of Bank of Boston Corporation, The First National Bank of
Boston, BayBanks or any of their respective Affiliates (including without
limitation the name BayBank of Boston, N.A., Bank of Boston, BayBank or any
derivation of any thereof).
Section 16.4. Termination: Extension of Closing Date. Except as otherwise
expressly set forth herein, this Agreement shall terminate and shall be of no
further force or effect as between the parties hereto, except as to liability
for actual direct damages suffered or incurred by either party due to a willful
breach by the other party of any material representation or warranty occurring
or arising prior to the date of termination, upon the occurrence of any of the
following:
(a) Upon mutual agreement of the parties;
<PAGE>
(b) Immediately upon receipt by Purchaser or Seller of notice from
any regulatory authority that Purchaser or Seller, as the case may be, has
been denied any Regulatory Approval by Final order;
(c) Upon written notice by either party to the other, if the Closing
has not occurred within six (6) months after the closing of the Merger;
(d) by either party if there has been a material misrepresentation or
breach by the other party in its representations, warranties and covenants
set forth herein;
(e) by Purchaser or the Seller if any of the conditions to closing
set forth in Articles VI and VII hereof have not been satisfied and is not
likely to be satisfied at or prior to the Closing, other than a closing
condition that is reasonably within the electing party's control; or
(f) Upon written notice of Seller following
termination of the Merger Agreement.
In any event, upon the termination of this Agreement, each party will
return all work papers, documents, financial statements and other data furnished
to it by or with respect to the other party, including any copies thereof made
by the returning party.
Section 16.5. Brokers-Finders.
(a) Purchaser hereby represents and warrants to Seller that it has
not employed or agreed to retain any broker of finder in connection with
the transactions contemplated by this Agreement, and Purchaser agrees to
indemnify Seller against any claim arising out of any such employment of
or agreement to retain any such broker or finder by Purchaser.
(b) Seller hereby represents and warrants to Purchaser that it has
not employed or agreed to retain any broker or finder in connection with
the transactions contemplated by this Agreement, and Seller agrees to
indemnify Purchaser against any claim arising out of any such employment
of or agreement to retain any such broker or finder by Seller.
Section 16.6. Modification and Waiver. No modification of any provision of
this Agreement shall be binding unless in writing and executed by the party
<PAGE>
sought to be bound thereby. Performance of or compliance with any covenant given
herein or satisfaction of any condition to the obligations of either party
hereunder may be waived by the 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, that any such waiver must be in writing.
Section 16.7. Assignment. Neither this Agreement nor any of the rights,
interests or obligations of either party hereto shall be assigned by either of
the parties hereto (whether by operation of law or otherwise) without the prior
written consent of the other party. This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their respective successors
and permitted assigns.
Section 16.8. 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 the other party in connection with the transactions
contemplated hereby (collectively, the "Confidential Information") (except
(i) to the extent that the Agreement and such negotiation must be
disclosed to obtain the Regulatory Approvals or any required regulatory
approval or consent relating to the Merger and the transactions relating
thereto, (ii) for disclosures made in accordance with the terms and
conditions of this Agreement, (iii) to the extent required by applicable
law, (iv) as previously made public by either party, or (v) as otherwise
provided in the Confidentiality Agreements).
(b) Neither Purchaser nor Seller shall use the Confidential
Information obtained by it to compete with the other party, and neither
party shall use the Confidential Information otherwise than in connection
with this Agreement or as contemplated hereby.
(c) This Section 16.8 shall survive the termination or consummation
of this Agreement.
(d) In the event of termination of this Agreement, Purchaser shall
not use any Confidential Information obtained by it from Seller to solicit
accounts or other business from customers of the Branches or the Seller,
BayBank or any of their Affiliates and each party shall return or destroy
all Confidential Information in accordance with the Confidentiality
Agreements.
<PAGE>
Section 16.9. Entire Agreement; Governing Law. This Agreement, together
with the exhibits and schedules attached hereto and made a part hereof, contains
the entire agreement between the parties hereto with respect to the transactions
covered and contemplated hereunder, and supersedes all prior agreements or
understandings between the parties hereto relating to the subject matter hereof;
provided that the terms of the Confidentiality Agreements, to the extent not
inconsistent with the terms hereof, shall continue to apply. This Agreement
shall be governed by and construed in accordance with the laws of The
Commonwealth of Massachusetts (without reference to conflicts or choice of law
provisions).
Section 16.10. Waiver of Certain Damages. EACH OF THE PARTIES HERETO TO THE
FULLEST EXTENT PERMITTED BY LAW IRREVOCABLY WAIVES ANY RIGHTS THAT THEY MAY HAVE
TO PUNITIVE, SPECIAL, INCIDENTAL, EXEMPLARY OR CONSEQUENTIAL DAMAGES IN RESPECT
OF ANY LITIGATION BASED UPON, OR ARISING OUT OF, THIS AGREEMENT OR ANY RELATED
AGREEMENT OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS OR ACTIONS OF
ANY OF THEM RELATING THERETO.
Section 16.11. Consent to Jurisdiction: Waiver of Jury Trial. EACH PARTY
HERETO, TO THE EXTENT IT MAY LAWFULLY DO SO, HEREBY SUBMITS TO THE JURISDICTION
OF THE COURTS OF THE COMMONWEALTH OF MASSACHUSETTS AND THE UNITED STATES
DISTRICT COURT FOR THE DISTRICT OF MASSACHUSETTS, AS WELL AS TO THE JURISDICTION
OF ALL COURTS FROM WHICH AN APPEAL MAY BE TAKEN OR OTHER REVIEW SOUGHT FROM THE
AFORESAID COURTS. FOR THE PURPOSE OF ANY SUIT ACTION OR OTHER PROCEEDING ARISING
OUT OF SUCH PARTY'S OBLIGATIONS UNDER OR WITH RESPECT TO THIS AGREEMENT OR ANY
OF THE AGREEMENTS, INSTRUMENTS OR DOCUMENTS CONTEMPLATED HEREBY, 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 RELATING TO 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
<PAGE>
JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED. THE PROVISIONS OF THIS SECTION HAVE
BEEN FULLY DISCUSSED BY THE PARTIES HERETO, AND SUCH PROVISIONS SHALL NOT BE
SUBJECT TO ANY 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 16.12. 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 16.13. 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 16.14. Notices. All notices, consents, requests, instructions,
approvals, waivers, stipulations and other communications provided for herein to
be given by one party hereto to the other party shall be deemed validly given,
made or served, if in writing and delivered personally or sent by certified
mail, return receipt requested, nationally recognized overnight delivery
service, or facsimile transmission, if to Seller addressed to:
The First National Bank of Boston
100 Federal Street
Boston, Massachusetts 02110
Attention:Peter J. Manning
Facsimile number: (617) 434-7825
<PAGE>
with copies to:
The First National Bank of Boston
100 Federal Street
Boston, Massachusetts 02110
Attention:Gary A. Spiess, Esq.
Facsimile number: (617) 434-7825
and to:
Bingham, Dana & Gould LLP
150 Federal Street
Boston, Massachusetts 02110
Attention:Norman J. Shachoy, Esq.
and
Neal J. Curtin, Esq.
Facsimile number: (617) 951-8736
and if to Purchaser addressed to:
USTrust
40 Court Street
Boston, Massachusetts 02108
Attention:Neal F. Finnegan
Facsimile number: (617) 726-7320
with copies to:
USTrust
40 Court Street
Boston, Massachusetts 02108
Attention: Eric R. Fischer, Esq.
Facsimile number: (617) 726-7320
and to:
Goodwin, Procter & Hoar LLP
53 Exchange Place
Boston, Massachusetts 02109
Attention:William P. Mayer, Esq.
and
Margaret B.Crockett, Esq.
Facsimile number: (617) 523-1231
<PAGE>
Notice by certified mail shall be deemed to be received three (3) business days
after mailing of the same. Either party may change the persons or addresses to
whom or to which notices may be sent by written notice to the other.
Section 16.15. 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. 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 16.16. Specific Performance. The parties hereto acknowledge that
monetary damages could not adequately compensate either party hereto in the
event of a breach of this Agreement by the other, that the non-breaching party
would suffer irreparable harm in the event of such breach and that the
non-breaching party shall have, in addition to any other rights or remedies it
may have at law or in equity, specific performance and injunctive relief as a
remedy for the enforcement hereof.
Section 16.17. Survival. Except as otherwise provided in Sections 2.2, 2.3,
2.4, 3.3, 3.4, 3.5, 3.6, 4.1, 4.2, 5.1, 8.6, 8.7, 8.9, 8.10, 8.12, 10.4, 10.6,
11.2, 11.5, 11.6, 11.7, 11.8, 11.9, 11.10, 11.11, 12.1, 13, 14, 15 and 16 or in
any instrument or document furnished in connection herewith, no representations,
warranties or covenants made by the parties herein or therein shall survive the
Transfer Date. The representations and warranties contained in Sections 8.6,
8.7, 8.9, 8.10 and 8.12 hereof shall survive only until the first anniversary of
the Transfer Date, and, in each case, thereafter no party shall claim any
Damages for any breach of any thereof.
Section 16.18. 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 either 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.
<PAGE>
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.
THE FIRST NATIONAL BANK OF
BOSTON
By: /s/ Peter J. Manning
Title: Executive Director
Merger and Acquisitions
USTRUST
By: /s/ Neal F. Finnegan
Title: President and Chief
Executive Officer
The undersigned hereby joins this
Agreement for the sole purpose of
agreeing to cause the Assets and
the Assumed Liabilities to be
transferred to Purchaser in
accordance with the terms and
provisions of this Agreement.
BANK OF BOSTON CORPORATION
By:/s/ Peter J. Manning
Title: Executive Director
Mergers and Acquisitions
[LOGO]
N E W S R E L E A S E
For: Immediate Release
Contact: Sheila Celata (617) 726-7120
UST CORP. ANNOUNCES DEFINITE AGREEMENT TO PURCHASE
TWENTY BAYBANK AND BANK OF BOSTON BRANCHES
BOSTON, MASS. June 18,1996. UST Corp. (NASDAQ: USTB) and its principal
subsidiary, USTrust, announced today the execution of a definitive agreement
with the Bank of Boston under which USTrust will purchase certain assets and
assume the deposit liabilities of twenty branches located in the greater Boston
area. The purchase is conditioned on the pending merger of BayBanks, Inc. with
Bank of Boston.
The transaction involves the transfer of approximately $860 million in
deposits, and USTrust will purchase $510 million in commercial, residential
real estate and other loans with businesses and consumers located in the
communities served by the branches. Upon completion of the transaction, USTrust
will pay a premium equal to 7% of the deposit liabilities assumed.
"We are pleased with this acquisition because it enables USTrust to
service a wider geographic area, and to bring our highly competitive products
and services to more of the eastern Massachusetts market," stated Neal F.
Finnegan, president and chief executive officer. "Convenience is a very
important factor in bank selection," noted Finnegan, "and the addition of 20
branches in key cities and towns in greater Boston will give USTrust the third
largest branch network in the metropolitan area, and will enable the Bank to
expand its consumer and commercial customer bases."
USTrust currently operates 28 branches in eastern Massachusetts. Following
the transaction, USTrust will operate 48 branches with over $2.2 billion in
<PAGE>
deposits, $1.6 billion in net loans and $2.7 billion in total assets. Sixteen
of the branches to be acquired arc currently operated as BayBank branches and
four of the branches are operated by Bank of Boston. Ten of the branches are
located in Middlesex County, with the remaining ten divided equally between
Norfolk and Suffolk Counties. USTrust does not expect to close any of its
existing branches and will offer BayBank and Bank of Boston branch employees at
these branches similar employment with USTrust.
The transaction is expected to be completed in the fourth quarter of 1996,
and is subject, among other matters, to the approval of bank regulators. UST
Corp. expects to fund this transaction with existing resources and does not
expect to issue any additional shares.
UST Corp. is a $2.0 billion Boston-based bank holding company. Through its
banking and nonbanking subsidiaries, the Company provides a broad range of
financial services, principally to individuals and small-and medium-sized
companies in New England. Included in these services are commercial banking,
consumer services, trust and money management and equipment leasing.
# # #
Attachment: List of Branches
