PURCHASE OF ASSETS AND LIABILITY ASSUMPTION AGREEMENT
by and between
HOME SAVINGS OF AMERICA, FSB,
a Federal Savings Bank
and
GREENPOINT BANK
a New York State Chartered Savings Bank
as of
May 12, 1995
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . 1
1.1 Definitions . . . . . . . . . . . . . . . 1
ARTICLE II
TERMS OF PURCHASE AND ASSUMPTION . . . . . . . . . . 9
2.1 Purchase and Sale of Assets . . . . . . . 9
2.2 Assumption of Liabilities . . . . . . . . 10
2.3 Purchase Price . . . . . . . . . . . . . 10
2.4 Consideration for Assumption of
Liabilities . . . . . . . . . . . . . . 11
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF HOME SAVINGS . . . 11
3.1 Organization and Related Matters . . . . 11
3.2 Authorization . . . . . . . . . . . . . . 11
3.3 No Breaches of Statute or Contract;
Required Consents . . . . . . . . . . . 12
3.4 Litigation and Related Matters . . . . . 12
3.5 Consents . . . . . . . . . . . . . . . . 12
3.6 Deposits . . . . . . . . . . . . . . . . 13
3.7 Personal Property . . . . . . . . . . . 13
3.8 Account Loans . . . . . . . . . . . . . . 13
3.9 Contracts . . . . . . . . . . . . . . . . 13
3.10 Branch Leases and Branch Tenant Leases . 14
3.11 Compliance with Laws and Regulations . . 14
3.12 Governmental Notices . . . . . . . . . . 14
3.13 Environmental . . . . . . . . . . . . . . 14
3.14 FIRPTA . . . . . . . . . . . . . . . . . 15
3.15 No Broker's or Finder's Fees . . . . . . 15
3.16 Community Reinvestment Act; Regulatory
Matters . . . . . . . . . . . . . . . . 15
3.17 Relationship with Deposit Customers . . . 15
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF GREENPOINT . . . . 16
4.1 Organization and Related Matters . . . . 16
4.2 Authorization . . . . . . . . . . . . . . 16
4.3 No Breaches of Statute or Contract;
Required Consents . . . . . . . . . . . 16
i
4.4 Litigation and Related Matters . . . . . 17
4.5 Consents . . . . . . . . . . . . . . . . 17
4.6 Compliance with Laws and Regulations . . 17
4.7 Governmental Notices . . . . . . . . . . 17
4.8 No Broker's or Finder's Fees . . . . . . 17
4.9 Community Reinvestment Act; Regulatory
Matters . . . . . . . . . . . . . . . . 18
ARTICLE V
UPDATING OF INFORMATION AND "AS IS"
CONDITION OF ASSETS AND LIABILITIES . . . . . . . . . 18
5.1 Cash on Hand . . . . . . . . . . . . . . 18
5.2 Deposits . . . . . . . . . . . . . . . . 18
5.3 Personal Property . . . . . . . . . . . . 18
5.4 Account Loans . . . . . . . . . . . . . . 18
5.5 Contracts . . . . . . . . . . . . . . . . 19
5.6 Branch Leases . . . . . . . . . . . . . . 19
5.7 Title to Real Property . . . . . . . . . 19
5.8 Destruction of or Damage to a Branch . . 21
5.9 "AS IS" Condition . . . . . . . . . . . . 22
ARTICLE VI
COVENANTS OF HOME SAVINGS . . . . . . . . . . . . . . 22
6.1 Operations in Ordinary Course. . . . . . 22
6.2 Deposits and Loans. . . . . . . . . . . . 23
6.3 Conditions to Closing . . . . . . . . . . 23
6.4 Contracts . . . . . . . . . . . . . . . . 23
6.5 Records . . . . . . . . . . . . . . . . . 24
6.6 Covenant Not to Compete. . . . . . . . . 24
ARTICLE VII
COVENANTS OF GREENPOINT . . . . . . . . . . . . . . . 25
7.1 Interference or Damage; Investigations . 25
7.2 Performance of Liabilities . . . . . . . 26
7.3 Account Loans . . . . . . . . . . . . . . 26
7.4 Safe Deposit Business . . . . . . . . . . 26
7.5 Fiduciary Relationships . . . . . . . . . 26
7.6 Conduct of Business . . . . . . . . . . . 27
7.7 Conditions to Closing . . . . . . . . . . 27
7.8 Records . . . . . . . . . . . . . . . . . 27
7.9 Cardholders . . . . . . . . . . . . . . . 27
ii
ARTICLE VIII
ADDITIONAL AGREEMENTS . . . . . . . . . . . . . . . . 28
8.1 Regulatory Approvals . . . . . . . . . . 28
8.2 Reports and Information. . . . . . . . . 29
8.3 Further Assurances . . . . . . . . . . . 29
8.4 Employees . . . . . . . . . . . . . . . . 30
8.5 Confidentiality . . . . . . . . . . . . . 32
8.6 Publicity; Notices . . . . . . . . . . . 32
8.7 Tax Reporting . . . . . . . . . . . . . . 32
8.8 Interest Reporting . . . . . . . . . . . 33
8.9 Withholding . . . . . . . . . . . . . . . 33
8.10 Signs . . . . . . . . . . . . . . . . . . 34
8.11 Leasing of Branches; Excluded Branches . 34
8.12 Relocation of Certain Offices . . . . . . 36
8.13 Deposit Insurance Exit/Entrance Fees . . 36
8.14 42nd Street Branch . . . . . . . . . . . 37
8.15 SBLI . . . . . . . . . . . . . . . . . . 37
8.16 Home Office . . . . . . . . . . . . . . . 37
ARTICLE IX
CONDITIONS TO OBLIGATION OF GREENPOINT . . . . . . . 37
9.1 No Injunctions or Restraints . . . . . . 37
9.2 Conditions Performed . . . . . . . . . . 37
9.3 Representations . . . . . . . . . . . . . 38
9.4 Documentation . . . . . . . . . . . . . . 38
ARTICLE X
CONDITIONS TO OBLIGATION OF HOME SAVINGS . . . . . . 38
10.1 No Injunctions or Restraints . . . . . . 38
10.2 Conditions Performed . . . . . . . . . . 38
10.3 Representations . . . . . . . . . . . . . 38
10.4 Documentation . . . . . . . . . . . . . . 39
ARTICLE XI
CONDITIONS TO OBLIGATIONS OF BOTH PARTIES . . . . . . 39
11.1 Governmental Actions . . . . . . . . . . 39
11.2 Governmental Approvals . . . . . . . . . 39
ARTICLE XII
THE CLOSING . . . . . . . . . . . . . . . . . . . . . 40
12.1 Time and Place of Closing . . . . . . . . 40
12.2 Payment Due at Closing . . . . . . . . . 40
12.3 Closing Documents to be Delivered or
Actions to be Taken by Home Savings . . 40
iii
12.4 Closing Documents to be Delivered or
Actions to be Taken by GreenPoint . . . 43
12.5 Post-Closing Adjustments . . . . . . . . 44
ARTICLE XIII
TRANSFER OF DEPOSIT ACCOUNTS . . . . . . . . . . . . 45
13.1 Notices . . . . . . . . . . . . . . . . . 45
13.2 Post-Closing Reconciliation . . . . . . . 45
13.3 Data Processing . . . . . . . . . . . . . 47
13.4 Effect of Transitional Action . . . . . . 47
ARTICLE XIV
TERMINATION . . . . . . . . . . . . . . . . . . . . . 47
14.1 Events of Termination . . . . . . . . . . 47
14.2 Manner of Termination . . . . . . . . . . 48
ARTICLE XV
INDEMNIFICATION . . . . . . . . . . . . . . . . . . . 49
15.1 Indemnification by Both Parties . . . . . 49
15.2 Indemnification by Home Savings . . . . . 49
15.3 Indemnification by GreenPoint . . . . . 49
ARTICLE XVI
MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . 50
16.1 Non-Survival . . . . . . . . . . . . . . 50
16.2 Taxes; Expenses and Prorations . . . . . 50
16.3 Notices . . . . . . . . . . . . . . . . . 51
16.4 Entire Agreement; Modifications; Waivers;
Headings; Ambiguities . . . . . . . . . 53
16.5 Successors and Assigns . . . . . . . . . 53
16.6 Counterparts . . . . . . . . . . . . . . 53
16.7 Governing Law . . . . . . . . . . . . . . 53
16.8 Time is of the Essence . . . . . . . . . 54
16.9 Remedies . . . . . . . . . . . . . . . . 54
16.10 Attorneys' Fees . . . . . . . . . . . . . 54
16.11 Severability . . . . . . . . . . . . . . 54
EXHIBIT A NEW YORK BRANCH OFFICES OF HOME SAVINGS OF
AMERICA, FSB
EXHIBIT B PRELIMINARY SETTLEMENT STATEMENT
EXHIBIT C LESSOR'S ESTOPPEL CERTIFICATE
EXHIBIT D CONSENT
EXHIBIT E LESSEE'S ASSIGNMENT AND ASSUMPTION
AGREEMENT
EXHIBIT F LESSOR'S ASSIGNMENT AND ASSUMPTION
AGREEMENT
EXHIBIT G DEED
iv
EXHIBIT H CERTIFICATE OF NON-FOREIGN STATUS
EXHIBIT I BILL OF SALE AND ASSIGNMENT
EXHIBIT J GENERAL ASSIGNMENT
EXHIBIT K ASSUMPTION AGREEMENT
EXHIBIT L RETIREMENT ACCOUNT TRANSFER AGREEMENT
EXHIBIT M FORM OF OPINION OF COUNSEL TO HOME SAVINGS
EXHIBIT N FORM OF OPINION OF IN-HOUSE COUNSEL TO HOME
SAVINGS
EXHIBIT O FORM OF HOME SAVINGS' OFFICER'S CERTIFICATE
EXHIBIT P FORM OPINION OF COUNSEL TO GREENPOINT
EXHIBIT Q FORM OF GREENPOINT'S OFFICER'S CERTIFICATE
EXHIBIT R FINAL SETTLEMENT STATEMENT
Schedule A - Sample Calculation of Premium Adjustment
Schedule 3.6 - Deposit Accounts
Schedule 3.7 - Personal Property
Schedule 3.8 - Account Loans
Schedule 3.9 - Contracts
Schedule 3.10(a) - Leases
Schedule 3.10(b) - Branch Tenant Leases
Schedule 3.13 - Environmental Matters
Schedule 4.6 - GreenPoint's Regulatory Matters
Schedule 5.1 - Cash on Hand (to be provided at Closing)
Schedule 5.7(a) - Permitted Exceptions
Schedule 6.2 - Deposit Products
Schedule 8.11(d) - Excluded Branches
Schedule 8.14 - Terms of 42nd Street Branch Lease
Schedule 16.2 - Taxes
v
PURCHASE OF ASSETS AND LIABILITY ASSUMPTION AGREEMENT
This Purchase of Assets and Liability Assumption
Agreement is made and entered into as of May 12, 1995, by and
between Home Savings of America, FSB, a federal savings bank
("Home Savings"), and GreenPoint Bank, a New York state chartered
savings bank ("GreenPoint"), with reference to the following
facts:
WHEREAS, Home Savings desires to transfer to GreenPoint
certain deposit liabilities and certain assets and other
liabilities associated with the sixty (60) Home Savings of
America branch offices more particularly described and defined on
EXHIBIT A hereto (each a "Branch" and collectively the
"Branches"); and
WHEREAS, GreenPoint desires to assume such liabilities
and purchase such assets;
NOW, THEREFORE, for good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged,
Home Savings and GreenPoint hereby agree as follows:
ARTICLE I
DEFINITIONS
1.1 DEFINITIONS.
"AADA" shall mean the adjusted attributable deposit
amount as defined in 12 C.F.R. S 327.32(a)(3) relating to
deposits subject to assessments payable to the Savings
Association Insurance Fund.
"Account Loans" shall have the meaning set forth in
Section 5.4.
"ACH" shall have the meaning set forth in Section
13.2(b)(ii).
"Agency COFI Securities" shall mean up to $750
million of securities issued by either the Federal National
Mortgage Association or the Federal Home Loan Mortgage
Corporation backed by mortgages originated by Home Savings,
which mortgages have an interest rate linked to the 11th
District cost of funds index and are currently owned by Home
Savings.
"Agreement" shall mean this Purchase of Assets and
Liability Assumption Agreement by and between Home Savings and
GreenPoint.
"Allocation Agreement" shall have the meaning set
forth in Section 8.7.
"Assets" shall have the meaning set forth in Section
2.1.
"Assumed Contracts" shall have the meaning set forth
in Section 5.5.
"Bank Card" shall mean a general purpose bank credit,
charge or travel and entertainment card, but does not include a
Debit Card.
"Baseline Demand Deposits" shall mean the aggregate
amount of the Demand Deposits as set forth on the Execution
Date Schedule 3.6.
"Bowery Name" shall mean the name "The Bowery Savings
Bank" or any variant thereof.
"Branch" shall mean one of the Home Savings of
America branch offices more particularly described and defined
on EXHIBIT A hereto and "Branches" shall mean all such branch
offices, which constitute all of Home Savings' branch offices
(other than loan offices) in the Noncompete Area.
"Branch Leases" shall have the meaning set forth in
Section 5.6.
"Branch Tenant Leases" shall have the meaning set
forth in Section 3.10(b).
"Business Day" shall mean any day other than a
Saturday, Sunday, or a day on which federal savings banks
operating in the State of New York are authorized or obligated
by law or executive order to close.
"Cardholder" shall mean any person with an account
included in the Deposits domiciled at any of the Branches as of
the Close of Business on the Closing Date who also holds, on
the Closing Date, a Bank Card issued by Home Savings or
Citibank and bearing the name "Home Savings of America"
thereon.
"Cash on Hand" shall mean all cash on hand at the
Branches as of the Close of Business on the Closing Date,
including vault cash, ATM cash, petty cash, tellers' cash and
2
prepaid postage, as determined by a cash count to be mutually
conducted by Home Savings and GreenPoint pursuant to Section
12.5(a) hereof.
"Cash Payment" shall have the meaning set forth in
Section 12.2.
"Citibank" shall mean Citibank (South Dakota), N.A.
"Close of Business" shall mean the local time that
the Branches close to the public.
"Closing" shall have the meaning set forth in Section
12.1.
"Closing Date" shall have the meaning set forth in
Section 12.1.
"CMOs" shall mean up to $700 million of
collateralized mortgage obligations currently owned by Home
Savings.
"COBRA" shall mean the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended.
"Code" shall have the meaning set forth in Section
8.7.
"Conversion Date" shall mean the Final Expiration
Date (as defined in the Data Processing Servicing Agreement).
"Covenant Not to Compete" shall mean the covenants of
Home Savings set forth in Section 6.6.
"Data Processing Servicing Agreement" shall mean that
certain Transition Data Processing and Retail Support Services
Agreement by and between Home Savings and GreenPoint dated as
of even date herewith.
"Debit Card" shall mean any card that is established
to access funds on deposit in a deposit account domiciled at
one of the Branches, such as a MasterCard or Visa debit card,
including a deposit account which has a line of credit over-
draft facility linked to it, or a card which can access a line
of credit secured by a mortgage on the borrower's residence, a
personal line of credit or a secured automobile loan or similar
line of credit, provided such Debit Card is marketed as a cash
equivalent device to access such account or cash on deposit and
is not marketed, advertised or promoted as a general purpose
charging vehicle having a functionality of a Bank Card. It
3
shall not be a violation of the foregoing marketing require-
ments to disclose that, with respect to a Visa or MasterCard
Debit Card, such Debit Card may be used at all locations at
which Visa and MasterCard logos are displayed, provided that
such disclosure is not prominently featured or emphasized in
the disclosure documentation.
"Demand Deposits" shall mean all deposits (other than
Excluded Deposits) domiciled at the Branches that may be drawn
on by the account holder without prior notice to Home Savings,
including all passbook, statement savings, checking and money
market checking accounts, but not including certificates of
deposit or any deposit with a fixed term.
"Deposits" shall mean the aggregate deposit
liabilities domiciled at the Branches as of the Closing Date,
including the amount of accrued but unpaid interest thereon,
other than Excluded Deposits.
"Deposit Premium" shall mean an amount equal to the
sum of:
(i) 7.75% of the aggregate deposit liabilities
listed on the Execution Date Schedule 3.6 (which excludes
Excluded Deposits) subject to the Premium Adjustment; plus
(ii) an amount equal to 0.5% of the amount of the
deposit liabilities included within the Deposits
transferred, if any, that is subject to the assessment of
premiums based upon the assessment schedule for the Bank
Insurance Fund, and not the assessment schedule for the
Savings Association Insurance Fund.
"Designated Officers" shall mean Home Savings' Senior
Vice President and Director of Environmental Risk, Senior Vice
President and Director of Retail Banking, and each of the
Regional Managers for the New York region.
"Designated Value" shall mean (i) with respect to the
Agency COFI Securities, the value as determined by applying to
all of such securities the average of the three bid prices,
after excluding the highest and lowest bid prices, obtained for
sixty-five percent (65%) of the amount of such securities from
the following dealers on a date no earlier than five (5) Busi-
ness Days prior to the Closing Date: Greenwich Capital, Gold-
man, Sachs & Co., Lehman Brothers Inc., Morgan Stanley & Co.
Incorporated and Smith Barney Inc., (ii) with respect to the
CMOs, the value as determined on the basis of the average of
the average of the three bid prices, after excluding the high-
est and lowest bid prices, obtained for such securities from
4
the following dealers on a date no earlier than five (5) Busi-
ness Days prior to the Closing Date: Greenwich Capital, Gold-
man, Sachs & Co., Lehman Brothers Inc., Morgan Stanley & Co.
Incorporated and Smith Barney Inc., and (iii) with respect to
the Selected Securities, Home Savings' financial statement
(book) basis for such Selected Securities.
"Environmental Law" shall mean all applicable
federal, state, and local laws and regulations regulating
environmental hazards and/or Hazardous Substances.
"Excluded Branch" shall have the meaning set forth in
Section 8.11(d).
"Excluded Deposits" shall mean deposit liabilities
(i) beneficially owned by Home Savings or any of its corporate
affiliates, (ii) subject to escheat or litigation, or (iii)
subject to other legal restraint preventing assignment of such
deposit liabilities to GreenPoint.
"Execution Date Schedule 3.6" shall have the meaning
set forth in Section 3.6.
"FDIC" shall mean the Federal Deposit Insurance
Corporation.
"Final Payment Amount" shall have the meaning set
forth in Section 12.5(b).
"GreenPoint" shall mean GreenPoint Bank, a New York
state chartered savings bank.
"Ground Leased Branches" shall mean those Branches in
which Home Savings owns a leasehold interest pursuant to a
ground lease, as indicated on EXHIBIT A hereto.
"Hazardous Substances" shall mean chemicals,
pollutants, contaminants, wastes, and substances that have been
defined as toxic or hazardous by any applicable federal, state
or local law or regulation.
"Home Savings" shall mean Home Savings of America,
FSB, a federal savings bank.
"Inclearing Period" shall have the meaning set forth
in Section 13.2(a).
"IRS" shall mean the Internal Revenue Service.
5
"Leased Branches" shall mean those Branches leased by
Home Savings as lessee or sublessee, as indicated on EXHIBIT A
hereto, and shall not include Ground Leased Branches.
"Lease Deposits" shall mean the aggregate amount of
deposits paid by Home Savings as lessee or sublessee to a
lessor pursuant to the Branch Leases.
"Liabilities" shall have the meaning set forth in
Section 2.2.
"Losses" shall mean any and all losses, liabilities,
damages, expenses, penalties, fines and other costs, including
court costs, costs of investigation and reasonable attorneys'
fees.
"Net Book Value" shall mean the net book value as
reflected in Home Savings' books and records, determined in
accordance with generally accepted accounting principles
consistently applied.
"Noncompete Area" shall mean Bronx, Kings, Nassau,
New York, Queens, Richmond, Rockland, Suffolk and Westchester
counties of New York.
"NY Banking Authority" shall mean the New York State
Banking Department, the New York State Banking Board or the
Superintendent of Banks of the State of New York, as
applicable.
"NYCRA" shall mean S 28-b of the New York Banking Law
and Part 76 of the Codes, Rules and Regulations of the State of
New York.
"OTS" shall mean the Office of Thrift Supervision.
"Owned Branches" shall mean the Branches owned by
Home Savings in fee, as indicated on EXHIBIT A hereto, other
than the 42nd Street Branch.
"Paper Items" shall have the meaning set forth in
Section 13.2(a).
"Permitted Exceptions" shall have the meaning set
forth in Section 5.7(a).
"Personal Property" shall have the meaning set forth
in Section 5.3.
6
"Preliminary Purchase Price" shall mean the Purchase
Price calculated pursuant to Section 2.3 of this Agreement in
reliance upon updated SCHEDULES 3.6, 3.7, and 3.8 and upon
SCHEDULE 5.1, each as required to be delivered to GreenPoint at
the Closing.
"Preliminary Settlement Statement" shall have the
meaning set forth in Section 12.2.
"Premium Adjustment" shall mean one of the following,
if applicable:
(A) if the aggregate amount of Demand Deposits at
the Closing Date is greater than 110% of the amount of the
Baseline Demand Deposits, the product of (x) the dollar
amount of such excess of Demand Deposits over 110% of the
Baseline Demand Deposits, multiplied by (y) 7.75%, which
product shall be added to the Deposit Premium; or
(B) if the aggregate amount of Demand Deposits at
the Closing Date is less than 90% of the amount of the
Baseline Demand Deposits, the product of (x) the dollar
amount of the shortfall in the aggregate amount of Demand
Deposits that is less than 90% of the Baseline Demand
Deposits, multiplied by (y) 7.75%, which product shall be
subtracted from the Deposit Premium;
provided, that the following Demand Deposits shall be excluded
from the aggregate amounts of Demand Deposits at the Closing
Date and the amount of Baseline Demand Deposits for purposes of
the calculations set forth in (A) and (B) immediately above:
(i) Demand Deposits associated with any Excluded Branch, (ii)
Demand Deposits associated with any specifically identified
Branch that GreenPoint has publicly indicated prior to the
Closing Date that it may not operate at any time following the
Closing Date, and (iii) Demand Deposits of any customer (other
than an existing GreenPoint deposit customer) that Home Savings
is able to demonstrate have been moved by such customer to a
deposit account with GreenPoint. An example of this
calculation is set forth in SCHEDULE A.
"Prepaid FDIC Insurance Premium" shall mean the
aggregate amount of all insurance premiums paid by Home Savings
to the FDIC prior to the Closing Date with respect to the
Deposits for any period following the Closing Date based on (i)
the aggregate amount of the deposits domiciled at the Branches
at the dates used for computation of the FDIC insurance
assessment, and (ii) Home Savings' insurance assessment rate
effective at the date of computation of such assessment.
7
"Purchase Price" shall have the meaning set forth in
Section 2.3(a).
"Real Property" shall mean the real property fee
interests associated with the Owned Branches and the real
property leasehold interests associated with the Ground Leased
Branches, including all improvements thereon and appurtenances
thereto, and all right, title and interest of Home Savings in
and to (x) any land lying in the bed of any streets, roads,
avenues or alleys, opened or proposed, in front of or adjoining
the Owned Branches, to the center lines thereof or any award
made or to be made in lieu thereof, and (y) any strips
abutting, adjoining or appurtenant to the Owned Branches, in
each case, subject to the provisions of Sections 5.6, 5.7(b),
and 8.11 hereof.
"Real Property Purchase Price" shall mean the sum, in
each case as of the Close of Business on the Closing Date, of
(i) the Net Book Value of the Real Property associated with the
Owned Branches, and (ii) the Net Book Value of the leasehold
improvements associated with the Ground Leased Branches.
"Records" shall have the meaning set forth in Section
6.5.
"Region Employees" shall mean the employees of Home
Savings employed at the Branches or otherwise employed by Home
Savings within the State of New York, other than persons
employed at the mortgage lending offices of Home Savings.
"Safe Deposit Business" shall mean the safe deposit
boxes located at the Branches and the safe deposit business
associated therewith.
"Selected Securities" shall mean:
(a) Marketable direct obligations issued or
unconditionally guaranteed by the United States of
America, or issued by an instrumentality or agency thereof
and guaranteed fully as to principal, premium (if any),
and interest by the United States of America, in each case
maturing within six months of the Closing Date;
(b) Subject to a maximum per issuer of $50 million,
commercial paper maturing within 180 days of the Closing
Date, issued by a corporation organized and existing under
the laws of any State of the United States of America and
rated, as of the Closing Date, in one of the two highest
categories for such paper by any two of the following
8
statistical rating organizations: Moody's Investors Ser-
vice, Standard & Poor's Corporation, Duff & Phelps and
Fitch Investors Service, Inc.;
(c) Certificates of Deposit or other deposit
accounts of Home Savings with the Federal Home Loan Bank
of San Francisco, maturing not more than six months after
the Closing Date;
(d) Discount notes maturing within six (6) months of
the Closing Date issued or guaranteed by the Federal
National Mortgage Association, the Federal Home Loan
Mortgage Corporation, the Federal Farm Credit Bank, the
Student Loan Marketing Association, any Federal Home Loan
Bank, and the Tennessee Valley Authority; and
(e) Securities (listed in the foregoing clauses (a)
to (d) above) purchased by Home Savings from a securities
dealer under an agreement to resell within six months of
the Closing Date, whereby the securities are held by a
third party agent bank or custodian.
"Title Commitment" shall have the meaning set forth
in Section 5.7(a).
"Title Company" shall mean Lawyer's Title Insurance
Corporation.
"Title Policy" shall have the meaning set forth in
Section 12.3(r).
"Transferred Employee" shall mean each Region
Employee who is offered employment by GreenPoint and who
accepts such employment.
"WARN Act" shall mean the Worker Adjustment and
Retraining Act, as amended.
"Withholding Obligations" shall have the meaning set
forth in Section 8.9.
ARTICLE II
TERMS OF PURCHASE AND ASSUMPTION
2.1 PURCHASE AND SALE OF ASSETS.
(a) Pursuant to the terms of this Agreement, Home
Savings shall sell, transfer, convey and assign to GreenPoint,
9
and GreenPoint shall purchase and acquire from Home Savings, as
of the Close of Business on the Closing Date, all of Home
Savings' right, title and interest in and to each of the
following, except as specifically provided herein, which are
collectively referred to herein as the "Assets":
(i) the Personal Property;
(ii) the Account Loans;
(iii) the Assumed Contracts;
(iv) the Real Property;
(v) the Branch Leases;
(vi) the Branch Tenant Leases;
(vii) the Safe Deposit Business;
(viii) the Records;
(ix) the Cash on Hand;
(x) the Bowery Name;
(xi) the customer lists delivered to GreenPoint
pursuant to the terms of the Agreement; and
(xii) rights of action related to liabilities
expressly assumed by GreenPoint pursuant to the terms of this
Agreement.
(b) In addition, Home Savings agrees to be bound,
effective upon consummation of the Closing, by the terms of the
Covenant Not to Compete.
2.2 ASSUMPTION OF LIABILITIES. Pursuant to the
terms of this Agreement, GreenPoint shall assume at the Close
of Business on the Closing Date the Deposits, and the
liabilities and obligations of Home Savings arising from and
after the Closing with respect to the Deposits, the Account
Loans, the Branch Leases, the Branch Tenant Leases, the Assumed
Contracts, the Safe Deposit Business, the Bowery Name, and the
ownership and operation of the Personal Property and the Real
Property, which are collectively referred to herein as the
"Liabilities."
2.3 PURCHASE PRICE. The purchase price (the "Pur-
chase Price") of the Assets and the Deposits, which shall be
10
offset at the Closing against the amount owed to GreenPoint by
Home Savings pursuant to the terms of Section 2.4 as
consideration for the assumption by GreenPoint of the
Liabilities, will be an amount equal to the sum of the
following:
(i) the aggregate Net Book Value of the
Personal Property, determined as of the Close of Business
on the Closing Date;
(ii) the aggregate principal amount of the
Account Loans, plus accrued and unpaid interest thereon,
as of the Close of Business on the Closing Date;
(iii) the Real Property Purchase Price;
(iv) the amount of the Cash on Hand; and
(v) the Deposit Premium.
2.4 CONSIDERATION FOR ASSUMPTION OF LIABILITIES. As
consideration for the assumption of the Liabilities, Home
Savings shall pay to GreenPoint one hundred percent (100%) of
the amount of the Deposits as of the Close of Business on the
Closing Date.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF HOME SAVINGS
Home Savings represents, warrants and agrees as
follows:
3.1 ORGANIZATION AND RELATED MATTERS. Home Savings
is a federally chartered stock savings bank, duly organized,
validly existing, and in good standing under the laws of the
United States of America, and it has the requisite corporate
power and authority to own the Assets and carry on its business
at the Branches as currently conducted and execute, deliver and
perform this Agreement. Home Savings is duly authorized to
conduct a savings and loan business, is a member of the Federal
Home Loan Bank of San Francisco, and is duly authorized to
operate each of the Branches. The deposits of Home Savings are
insured by the FDIC, and the approximate total amount of
deposits and the AADA of Home Savings as of April 30, 1995 were
$42,129 million and $36,789 million, respectively.
3.2 AUTHORIZATION. The execution, delivery and
performance of this Agreement and the consummation of the
transactions contemplated hereby by Home Savings have been duly
11
and validly authorized and approved by all requisite corporate
action. This Agreement has been approved by Home Savings'
board of directors, and such approval is reflected in the
minutes of the board of directors. Home Savings shall
continuously maintain all components of this written agreement
as official records of Home Savings or any successor thereto.
This Agreement has been duly executed and delivered by Home
Savings. This Agreement is a valid and binding obligation of
Home Savings, enforceable in accordance with its terms, except
that the enforceability hereof may be subject to bankruptcy,
insolvency, reorganization, moratorium or other similar laws
now or hereafter in effect relating to creditors' rights
generally and the rights of creditors of federal savings banks,
and that the remedy of specific performance and injunctive and
other forms of equitable relief may be subject to equitable
defenses and to the discretion of the court before which any
proceedings therefor may be brought.
3.3 NO BREACHES OF STATUTE OR CONTRACT; REQUIRED
CONSENTS. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby, do not
and will not (i) conflict with any of the provisions of the
charter or bylaws of Home Savings; (ii) violate any applicable
laws, orders or regulations; (iii) conflict with or result in a
breach (with notice or lapse of time or both) of any judgment,
order, decree or ruling to which Home Savings is a party, or by
which it or any of its property is bound, or any injunction of
any court or governmental authority to which it or any of its
property is subject, or any material agreement to which it is a
party or by which it is bound; or (iv) require the affirmative
consent or approval of any governmental or nongovernmental
third party (other than as expressly contemplated by this
Agreement).
3.4 LITIGATION AND RELATED MATTERS. There is no
action, suit, claim, proceeding or investigation pending or, to
the best of its knowledge, threatened against Home Savings that
is reasonably likely to impair the consummation of the
transactions contemplated hereby or materially affect the
Assets or Liabilities as a whole or materially affect the
operations of the Branches as a whole after the Closing Date.
Home Savings is not aware of any facts that would reasonably
afford a basis for any such action, suit, proceeding, claim or
investigation.
3.5 CONSENTS. Other than the approval of the OTS
and the NY Banking Authority, as well as any applicable
approval or consent of the FDIC (including any approval or
consent required pursuant to that Assistance Agreement dated as
of August 7, 1985, among The Bowery Savings Bank, The New Bank
and the FDIC), and subject to the expiration of any applicable
12
waiting period, no consent, approval or authorization of any
federal or state governmental authority or agency is required
for the execution, delivery and performance by Home Savings of
this Agreement and the consummation by it of the transactions
contemplated hereby.
3.6 DEPOSITS. Provided herewith as SCHEDULE 3.6 is
a schedule of the aggregate deposit liabilities (other than
Excluded Deposits) domiciled at the Branches, prepared as of
the close of business on the Friday immediately preceding the
date of this Agreement, listing by category and by Branch the
amount of such deposits, including the amount of accrued but
unpaid interest thereon (the "Execution Date Schedule 3.6").
3.7 PERSONAL PROPERTY. Provided herewith as
SCHEDULE 3.7 is a schedule of all furniture, fixtures,
equipment, data processing, teller servicing, and computer
equipment, alarm systems, supplies, improvements and other
tangible personal property (including safe deposit boxes and
ATMs, ATM surrounds, ATM kiosks, if any, and other related
equipment and Codex 2630 modems, if any, and all furniture and
equipment associated with the teleservicing unit located at 110
E. 42nd Street) owned by Home Savings and located at the
Branches, excluding (i) interior and exterior signs bearing, or
in the shape of, the Home Savings emblem, Home Savings sign
facings and Home Savings alphabetic signs and all related sign
cases (but not the structures, if any, supporting such sign
cases), (ii) other items that specifically identify Home
Savings by name or logo (other than ATM surrounds), (iii)
appreciated fine art, and (iv) furniture and equipment
associated with any Home Savings loan production office located
at a Branch, which schedule specifies the Net Book Value of
each such item as shown on the financial records of Home
Savings, computed as of the date indicated thereon.
3.8 ACCOUNT LOANS. Provided herewith as SCHEDULE
3.8 is a schedule of (i) all savings account loans that are
secured by deposits domiciled at the Branches, including
accrued and unpaid interest thereon, computed as of the date
indicated thereon, and (ii) all NOW, checking and other
transaction account lines of credit associated with deposits
domiciled at the Branches, including accrued and unpaid
interest thereon, computed as of the date indicated thereon.
3.9 CONTRACTS. Provided herewith as SCHEDULE 3.9 is
a schedule of contracts relating to the maintenance and physi-
cal operation of the Branches. To Home Savings' knowledge,
each party has performed in all material respects their obli-
gations thereunder to the extent that such obligations to per-
form have accrued and none of such contracts was entered into
13
outside of the ordinary course of business or is materially
burdensome.
3.10 BRANCH LEASES AND BRANCH TENANT LEASES.
(a) Attached hereto as SCHEDULE 3.10(a) is a
schedule of each real property lease or sublease pursuant to
which Home Savings leases the premises of the Leased Branches
and the real property underlying the Ground Leased Branches.
True and complete copies of each such document have been
provided to GreenPoint. To Home Savings' knowledge, the lessor
and Home Savings have performed in all material respects their
obligations under such branch leases to the extent such
obligations to perform have accrued.
(b) Attached hereto as SCHEDULE 3.10(b) is a
schedule of each real property lease (the "Branch Tenant
Leases") pursuant to which Home Savings is the lessor of any
portion of the premises of a Branch. True and complete copies
of each such document have been provided to GreenPoint. To
Home Savings' knowledge, Home Savings has performed in all
material respects its obligations under such Branch Tenant
Leases to the extent such obligations to perform have accrued.
3.11 COMPLIANCE WITH LAWS AND REGULATIONS. Home
Savings has conducted and is conducting its business in all
material respects in compliance with all federal and state laws
and regulations, including, without limitation, all
regulations, orders and opinions of the OTS and the FDIC. Home
Savings is not subject to any order or ruling directed to it
by, or memorandum of understanding with, any governmental
agency, including the OTS and the FDIC.
3.12 GOVERNMENTAL NOTICES. Home Savings has not
received any notice from any federal, state, or other
governmental agency indicating that such agency would oppose or
not grant or issue its consent or approval, if requested, with
respect to the transactions contemplated hereby. There are no
facts known to Home Savings that could reasonably be expected
to have an adverse effect on the ability of Home Savings to
obtain all requisite regulatory consents or to perform its
obligations under this Agreement.
3.13 ENVIRONMENTAL. To the knowledge of the
Designated Officers, without conducting any independent
investigation, and except as indicated to the contrary on
SCHEDULE 3.13:
(a) No Hazardous Substances have been stored,
disposed of or released upon or below any of the Branches by
Home Savings in violation of any Environmental Law;
14
(b) Home Savings has not received any written
communication from any governmental authority alleging a
violation of any Environmental Law with respect to any of the
Branches; and
(c) No person or entity has asserted any claim
arising out of, based upon, or resulting from (i) the presence
or release into the environment of any Hazardous Substance upon
or below any of the Branches in violation of any Environmental
Law, or (ii) the violation or alleged violation of any
Environmental Law with respect to any of the Branches.
3.14 FIRPTA. Home Savings is not a "foreign person"
within the meaning of Internal Revenue Code Section 1445.
3.15 NO BROKER'S OR FINDER'S FEES. No agent,
broker, investment banker, person or firm acting on behalf of
or under authority of Home Savings, other than CS First Boston
Corporation, is or will be entitled to any broker's or finder's
fee or any other commission or similar fee directly or
indirectly in connection with any of the transactions
contemplated by this Agreement.
3.16 COMMUNITY REINVESTMENT ACT; REGULATORY MATTERS.
Home Savings received a rating of "outstanding" in its most
recent examination or interim review with respect to the
Community Reinvestment Act. Home Savings has not been advised
of any supervisory concerns regarding its compliance with the
Community Reinvestment Act or, to the extent applicable, the
NYCRA. To Home Savings' knowledge there are no threatened or
pending actions, proceedings or allegations by any person or
regulatory agency which may cause the OTS, the NY Banking
Authority or the FDIC, to deny any application required to be
filed pursuant to Section 8.1.
3.17 RELATIONSHIP WITH DEPOSIT CUSTOMERS. The
material business relationships between Home Savings and the
customers holding accounts included within the Deposits consist
of: deposits, loans, credit cards, mutual funds, SBLI, safe
deposit box rentals, debit cards, notary services, ATM cards,
discount brokerage services, insurance products and services
and Silver Circle benefits.
15
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF GREENPOINT
GreenPoint represents, warrants and agrees as
follows:
4.1 ORGANIZATION AND RELATED MATTERS. GreenPoint is
a New York state chartered stock savings bank, duly organized,
validly existing, and in good standing under the laws of New
York and it has the requisite corporate power and authority to
own its assets and carry on its business as currently conducted
and execute, deliver and perform this Agreement. GreenPoint is
duly authorized to conduct a savings and loan business and,
upon receipt of the approval of the NY Banking Authority and
the FDIC, will be duly authorized to operate each of the
Branches. The deposits of GreenPoint are insured by the FDIC.
4.2 AUTHORIZATION. The execution, delivery and
performance of this Agreement and the consummation of the
transactions contemplated hereby by GreenPoint have been duly
and validly authorized and approved by all requisite corporate
action. This Agreement has been approved by GreenPoint's board
of directors, and such approval is reflected in the minutes of
the board of directors. GreenPoint shall continuously maintain
all components of this written agreement as official records of
GreenPoint or any successor thereto. This Agreement has been
duly executed and delivered by GreenPoint. This Agreement is a
valid and binding obligation of GreenPoint, enforceable in
accordance with its terms, except that the enforceability
hereof may be subject to bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights generally and
the rights of creditors of New York state chartered savings
banks, and that the remedy of specific performance and
injunctive and other forms of equitable relief may be subject
to equitable defenses and to the discretion of the court before
which any proceedings therefor may be brought.
4.3 NO BREACHES OF STATUTE OR CONTRACT; REQUIRED
CONSENTS. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby, do not
and will not (i) conflict with any of the provisions of the
charter or bylaws of GreenPoint; (ii) violate any applicable
laws, orders or regulations; (iii) conflict with or result in a
breach (with notice or lapse of time or both) of any judgment,
order, decree or ruling to which GreenPoint is a party, or by
which it or any of its property is bound, or any injunction of
any court or governmental authority to which it or any of its
property is subject, or any material agreement to which it is a
16
party or by which it is bound; or (iv) require the affirmative
consent or approval of any governmental or nongovernmental
third party (other than as expressly contemplated by this
Agreement).
4.4 LITIGATION AND RELATED MATTERS. There is no
action, suit, claim, proceeding or investigation pending or, to
the best of its knowledge, threatened against GreenPoint that
is reasonably likely to impair the consummation of the
transactions contemplated hereby. GreenPoint is not aware of
any facts that would reasonably afford a basis for any such
action, suit, proceeding, claim or investigation.
4.5 CONSENTS. Other than the approval of the OTS
and the NY Banking Authority, as well as any applicable
approval of the FDIC, and subject to the expiration of any
applicable waiting period, no consent, approval or
authorization of any federal or state governmental authority or
agency is required for the execution, delivery and performance
by GreenPoint of this Agreement and the consummation by it of
the transactions contemplated hereby.
4.6 COMPLIANCE WITH LAWS AND REGULATIONS.
GreenPoint has conducted and is conducting its business in all
material respects in compliance with all federal and state laws
and regulations, including, without limitation, all
regulations, orders, and opinions of the NY Banking Authority
and the FDIC. GreenPoint is not subject to any order or ruling
directed to it by, or memorandum of understanding with, any
governmental agency, including the NY Banking Authority and the
FDIC, except as set forth on SCHEDULE 4.6.
4.7 GOVERNMENTAL NOTICES. GreenPoint has not
received any notice from any federal, state, or other
governmental agency indicating that such agency would oppose or
not grant or issue its consent or approval, if requested, with
respect to the transactions contemplated hereby. There are no
facts known to GreenPoint that could reasonably be expected to
have an adverse effect on the ability of GreenPoint to obtain
all requisite regulatory consents or to perform its obligations
under this Agreement.
4.8 NO BROKER'S OR FINDER'S FEES. No agent, broker,
investment banker, person or firm acting on behalf of or under
authority of GreenPoint, other than J.P. Morgan & Co. Incorpo-
rated, is or will be entitled to any broker's or finder's fee
or any other commission or similar fee directly or indirectly
in connection with any of the transactions contemplated by this
Agreement.
17
4.9 COMMUNITY REINVESTMENT ACT; REGULATORY MATTERS.
GreenPoint received a rating of "outstanding" in its most
recent examination or interim review with respect to the
Community Reinvestment Act and the NYCRA. GreenPoint has not
been advised of any supervisory concerns regarding its
compliance with the Community Reinvestment Act or the NYCRA.
To GreenPoint's knowledge there are no threatened or pending
actions, proceedings or allegations by any person or regulatory
agency which may cause the OTS, the NY Banking Authority or the
FDIC, to deny any application required to be filed pursuant to
Section 8.1.
ARTICLE V
UPDATING OF INFORMATION AND "AS IS"
CONDITION OF ASSETS AND LIABILITIES
5.1 CASH ON HAND. At the Closing, Home Savings
shall deliver to GreenPoint a schedule ("SCHEDULE 5.1")
indicating the amount and location of the Cash on Hand as of
the Close of Business on the Business Day preceding the Closing
Date.
5.2 DEPOSITS. No less than two (2) days prior to
the Closing Date, Home Savings will provide GreenPoint with an
updated SCHEDULE 3.6 reflecting the aggregate deposit
liabilities (other than Excluded Deposits) domiciled at the
Branches, including accrued and unpaid interest thereon, as of
the Close of Business on a date no more than six (6) Business
Days prior to the Closing Date.
5.3 PERSONAL PROPERTY. GreenPoint shall have the
right by prior written notice to Home Savings to exclude from
SCHEDULE 3.7 items that are subject to any material lien, claim
or encumbrance as of the Closing, provided that Home Savings
shall deliver all ATMs free and clear of all material liens,
claims and encumbrances. An updated SCHEDULE 3.7 listing all
of the items of personal property remaining after any such
exclusions (collectively referred to herein as the "Personal
Property"), along with the Net Book Value of all of such items,
as of the end of the month preceding the Closing Date, shall be
delivered by Home Savings to GreenPoint at the Closing.
5.4 ACCOUNT LOANS. Home Savings shall provide to
GreenPoint at the Closing an updated SCHEDULE 3.8 listing all
of the savings account loans and NOW, checking and other
transaction account loans (collectively referred to herein as
the "Account Loans") secured by or associated with deposits
18
domiciled at the Branches and reflecting the balance of the
Account Loans, including accrued and unpaid interest thereon,
as of the Close of Business on a date no more than five (5)
Business Days prior to the Closing Date.
5.5 CONTRACTS. Home Savings shall use its
reasonable efforts to obtain the consent of any third party
required to assign any of the contracts listed on SCHEDULE 3.9
to GreenPoint. GreenPoint may by written notice to Home Savings
prior to the Closing exclude from SCHEDULE 3.9 any contract
(i) that is not assignable by its terms, or that requires the
consent of a third party in order for such contract to be
assigned to GreenPoint, if, in each case, consent has not been
obtained prior to the Closing, or (ii) that contains materially
burdensome terms that are not ordinary or customary. An
updated SCHEDULE 3.9 listing all of the contracts remaining
after any such exclusions (collectively referred to herein as
the "Assumed Contracts") shall be delivered by Home Savings to
GreenPoint at the Closing.
5.6 BRANCH LEASES. Home Savings shall use its
reasonable efforts to obtain an Estoppel Certificate
substantially in the form of EXHIBIT C attached hereto from
each lessor of a Leased Branch or a Ground Leased Branch. Home
Savings shall use its reasonable efforts to obtain the consent
of any lessor (substantially in accordance with EXHIBIT D) or
third party required to assign to GreenPoint any of the leases
pursuant to which Home Savings leases the premises of the
Leased Branches, and the real property underlying the Ground
Leased Branches, provided that nothing herein shall require
Home Savings or GreenPoint to pay fees, or to offer other
consideration, to any such lessor or third party in order to
obtain such consent. GreenPoint may by written notice to Home
Savings prior to the Closing exclude from SCHEDULE 3.10(a) any
lease associated with a Branch that requires the consent of a
third party in order for such lease to be assigned to
GreenPoint or that is not assignable by its terms, unless, in
each case, all required consents have been obtained prior to
the Closing. An updated SCHEDULE 3.10(a) listing all of the
leases to be assumed by GreenPoint after any such exclusions
(collectively referred to herein as the "Branch Leases") shall
be delivered by Home Savings to GreenPoint at the Closing. In
the event a lease is excluded from SCHEDULE 3.10(a) pursuant to
this Section 5.6, the parties shall take such actions as are
set forth in Section 8.11.
5.7 TITLE TO REAL PROPERTY.
(a) Prior to the date of this Agreement, Home Sav-
ings has provided to GreenPoint, for each of the real property
19
fee interests associated with an Owned Branch, and shall
provide as soon as practicable for each of the leasehold
estates associated with a Ground Leased Branch, a commitment
issued by the Title Company to issue the Title Policy (each, a
"Title Commitment" and collectively, the "Title Commitments"),
showing fee title or ground leasehold title, as appropriate, to
be vested in Home Savings free and clear of all liens or other
title exceptions, except for (i) taxes not then delinquent,
(ii) laws, ordinances and governmental regulations regulating
the use, or occupancy of the Branch, the character, dimensions
or locations of the improvements; provided that none of the
same are materially violated by the continued use of any
portion of the Branch for the purpose for which it has been
customarily used by Home Savings, (iii) printed standard
general exceptions listed in Schedule B, Part I of the Title
Commitments, (iv) matters created by Home Savings after the
date of this Agreement with the consent of GreenPoint, (v)
matters discovered by an inspection or survey that do not make
title unmarketable, (vi) such imperfections of title as are not
so substantial as to materially impair the value of or
interfere with the continued use of any portion of the Branch
for the purposes for which they have been customarily used by
Home Savings, or (vii) matters listed on SCHEDULE 5.7(a) to
this Agreement, other than any matters discovered by an
inspection or survey that make title unmarketable (matters
listed in (i) through (vii) are collectively referred to herein
as "Permitted Exceptions").
(b) Subject to the provisions of Section 5.7(a),
GreenPoint has approved the condition of title to the real
property fee interests associated with each Owned Branch as of
the date of this Agreement as shown on the Title Commitments.
Should any title exceptions other than the Permitted Exceptions
arise or be reported by the Title Company after the date hereof
and prior to the Closing Date with respect to any of the Owned
Branches, or if title exceptions, other than Permitted Excep-
tions, appear on a Title Commitment for a Ground Leased Branch,
Home Savings shall have until the Closing Date to take such
actions as are necessary to cause the Title Company to issue
the Title Policy without such exceptions. GreenPoint agrees to
take all action reasonably necessary to assist in the removal
or other disposition of such unpermitted exceptions and to co-
operate with Home Savings in negotiating reasonable accommoda-
tions with the holders of any unpermitted exceptions, but in no
event shall GreenPoint be obligated to agree to the payment or
transfer of money or other consideration to any such holder.
If Home Savings fails to remedy any unpermitted exception ob-
jected to by GreenPoint in accordance with the terms hereof,
GreenPoint may, at its option: (i) waive any such disapproval,
in which case Home Savings shall have no further liability to
20
GreenPoint with respect to such unpermitted exception, and such
unpermitted exception shall constitute a Permitted Exception to
the Title Policy, or (ii) decline by written notice to Home
Savings to purchase the real property fee interests associated
with the Owned Branch, or to assume the real property leasehold
interests associated with the Ground Leased Branch, to which
the unpermitted exception relates, in which case such real
property interests and the related Branch shall be excluded
from the definition of Real Property in Section 1.1 hereof and
such Branch will be leased by GreenPoint from Home Savings
pursuant to Section 8.11 hereof.
(c) GreenPoint acknowledges and agrees that it will
look solely to the Title Policies, and not to Home Savings,
with regard to any claimed defects in title relating to any of
the Real Property conveyed hereunder.
(d) If any lease by Home Savings of a Leased Branch
or Ground Leased Branch is subject to any (i) superior lease,
(ii) mortgage, lien or security interest on the estate of Home
Savings in such Branch, or (iii) any mortgage, lien or security
interest on the estate of any landlord under the lease of a
Ground Leased Branch or a Leased Branch, with respect to which
any claim has been asserted which is reasonably likely to
result in the loss of the leasehold estate under a lease of a
Ground Leased Branch or of a Leased Branch prior to the
expiration date specified in such lease, then the branch
subject to such lease shall be an Excluded Branch under Section
8.11(d).
(e) Home Savings shall furnish to GreenPoint, upon
request, any authorization that may be required to enable it to
undertake violation and lien searches.
5.8 DESTRUCTION OF OR DAMAGE TO A BRANCH. From the
date of this Agreement through the Closing Date, Home Savings
shall maintain property insurance coverage upon each Branch in
an amount equal to the amount of coverage in effect as of the
date hereof. In the event any Branch is partially or totally
damaged or destroyed by fire, flood, earthquake or other casu-
alty, between the date hereof and the Closing Date, Home Sav-
ings shall use its reasonable efforts to repair such damage or
rebuild such destroyed Branch as soon as practicable through
the application of the proceeds of such insurance coverage,
provided that Home Savings shall obtain the prior consent of
GreenPoint, which consent shall not be unreasonably withheld,
regarding such repairs or rebuilding and regarding the settle-
ment of its insurance claim. If at the Closing Date the Branch
has not been fully repaired or replaced, Home Savings shall
assign any unexpended insurance proceeds to GreenPoint. In no
21
event shall GreenPoint have the right to terminate this
Agreement, or to alter its obligation to purchase and assume
the Assets and Liabilities associated with such Branch upon the
terms set forth in this Agreement, by reason of any such damage
or destruction.
5.9 "AS IS" CONDITION. GreenPoint acknowledges that
it will, subject to the terms of this Agreement, purchase the
Assets and assume the Liabilities at the Closing in "AS IS"
condition, with all faults, in reliance upon GreenPoint's
inspection thereof. Except as otherwise expressly set forth in
this Agreement, Home Savings makes no representations or
warranty of any kind whatsoever with respect to any of the
Assets or the Liabilities, whether express or implied,
including, without limitation, any representations or
warranties concerning or with respect to (i) the value, nature,
quality of condition, or state of repair of any of the Assets;
(ii) the compliance of the Real Property or the Branches, or
the operation of the Branches, with any laws, rules, ordinances
or regulations of any applicable governmental authority; or
(iii) the habitability, merchantability, marketability,
profitability or fitness for a particular purpose of the
Personal Property, the Real Property or the Branches.
ARTICLE VI
COVENANTS OF HOME SAVINGS
During the period from the date hereof to the Closing
Date, Home Savings hereby covenants and agrees as follows:
6.1 OPERATIONS IN ORDINARY COURSE. Home Savings
shall: (i) not engage in any transaction related to any of the
Branches, except in the ordinary course of business or as
contemplated by this Agreement; (ii) maintain the Branches in a
condition substantially the same as on the date of this
Agreement, reasonable wear and use excepted; (iii) maintain its
books of accounts and records with respect to the Assets and
Liabilities in the usual, regular and ordinary manner; (iv)
duly maintain compliance in all material respects with all
laws, regulatory requirements and agreements to which it is
subject or by which it is bound with respect to the Assets, the
Liabilities and the Branches; (v) not close or sell any of the
Branches or open or acquire any permanent offices or branches
within the Noncompete Area; (vi) refrain from selling or
transferring any BIF-insured deposit liabilities such that to
the greatest extent possible the Deposits to be acquired by
22
GreenPoint at Closing are BIF-insured, provided that Home
Savings shall be free to transfer up to $200 million in BIF-
insured deposit liabilities to its affiliates; (vii) cooperate
with GreenPoint to maintain and enhance the franchise value of
the Branches prior to Closing; (viii) not materially change the
compensation policies or practices applicable to the Region
Employees; (ix) not acquire personal property for, or make
capital expenditures at, the Branches in excess of $3 million
in the aggregate, or $25,000 individually; and (x) consult with
GreenPoint prior to renewing, amending or extending any
material Assumed Contract, Branch Lease or Branch Tenant Lease.
In addition, Home Savings shall not conduct its
business and operations in such a manner as to impair its
ability to consummate the transactions contemplated hereunder,
nor will it engage in any transaction, take any action, or omit
to take any action, which could reasonably be expected to
impair its ability to consummate the transactions contemplated
hereunder.
6.2 DEPOSITS AND LOANS. Home Savings shall not
materially alter its current method of establishing interest
rates for deposit products, or its current advertising, deposit
account or account loan practices at the Branches, as further
provided in SCHEDULE 6.2. Subject to the foregoing, Home
Savings agrees to take such actions as it shall reasonably deem
necessary to preserve the mix, type and aggregate amount of the
deposits domiciled at the Branches at approximately current
levels. Home Savings shall underwrite and administer the
account loans and transaction account loans domiciled at the
Branches in accordance with applicable laws and regulations.
6.3 CONDITIONS TO CLOSING. Home Savings shall use
its reasonable efforts to (i) satisfy, as expeditiously as
reasonably possible, all of the conditions to the obligations
of GreenPoint hereunder within Home Savings' control, and (ii)
obtain all consents of third parties required to assign the
branch leases set forth on SCHEDULE 3.10(a) and the contracts
set forth on SCHEDULE 3.9.
6.4 CONTRACTS. Subject to the provisions of Section
6.2, Home Savings shall not enter into any material contracts
related to the Branches, other than in the ordinary course of
business or as contemplated by the Data Processing Servicing
Agreement, without the written consent of GreenPoint, which
consent shall not be unreasonably withheld.
__________________________
23
In addition to the foregoing, Home Savings hereby
covenants and agrees as follows, which covenants and agreements
shall remain in effect subsequent to the Closing Date:
6.5 RECORDS. Upon consummation of the Closing, Home
Savings shall deliver to GreenPoint its existing files and
records located at the Branches relating to the Assets
purchased and Liabilities assumed by GreenPoint pursuant to
this Agreement and those relating to the deposit taking
activities and Safe Deposit Business provided at the Branches
(collectively referred to herein as the "Records"), which,
together with the data processing records and transaction
reports maintained by Home Savings, which will be made
available to GreenPoint pursuant to the terms of the Data
Processing Servicing Agreement, constitute all of the books and
records necessary for the conduct of the business of the
Branches as currently conducted, to the extent such business
relates to the Assets and Liabilities. Following the Final
Expiration Date (as such term is defined in the Data Processing
Servicing Agreement), Home Savings shall deliver to GreenPoint
records relating to the retirement accounts and plans; and
provided further, that Section 13.3 hereof shall govern Home
Savings' obligations to provide tapes and supporting
documentation related to the Deposits, Account Loans and Safe
Deposit Business. Following the Closing Date, Home Savings
shall promptly provide such copies of such files and records
relating to the Assets and Liabilities in its possession as
GreenPoint shall reasonably request, provided that, from and
after 180 days following the Closing Date, GreenPoint shall
reimburse Home Savings for its actual out-of-pocket expenses
incurred in connection therewith.
6.6 COVENANT NOT TO COMPETE.
(a) For a period of three (3) years commencing as of
the Closing Date, Home Savings shall not open any temporary or
permanent offices or branches for deposit gathering activities
or otherwise solicit retail deposits within the Noncompete
Area, other than any office or branch acquired by Home Savings
that is incidental to an acquisition of the business or deposit
liabilities of another financial institution the offices or
branches of which are not primarily located in the Noncompete
Area, provided, that under no circumstances, including those
set forth immediately above, shall Home Savings use the names
"Home Savings of America," "Savings of America," or "The Bowery
Savings Bank" (or any similar name) with respect to deposit
gathering activities within the Noncompete Area for a period of
three (3) years following the Closing Date.
(b) During the three (3) year period following the
Closing Date, Home Savings shall not (i) use any proprietary
24
customer list, or other similar record of the holders of
accounts that constitute Deposits on the Closing Date, other
than lists or other records, unrelated to the Deposits, of such
holders that remain or become customers of Home Savings after
the Closing Date, to solicit deposits, loans, or other products
or services, or (ii) solicit for hire any Region Employee of
Home Savings who becomes an employee of GreenPoint as of the
Closing Date.
(c) Notwithstanding the foregoing, during the three
(3) year period following the Closing Date, Home Savings shall
be permitted to engage in general media advertising within the
Noncompete Area, provided such advertising is not intended to
solicit deposits primarily from customers within the Noncompete
Area.
(d) Subject to the provisions of Section 6.6(b)(i),
GreenPoint acknowledges that Home Savings will continue to
originate and service loans and otherwise engage in the lending
business in the Noncompete Area, and agrees that,
notwithstanding this Section 6.6, Home Savings shall be
permitted to engage in such business, including any
solicitation by Home Savings of such business.
(e) The restrictions set forth in this Section 6.6
shall apply to Home Savings and its affiliates, provided that
none of such restrictions shall apply to any bona fide third
party that by any means acquires Home Savings, or all, or
substantially all, of its business, assets and liabilities as
long as such entity does not solicit deposits under the names
"Home Savings of America," "Savings of America," or "The Bowery
Savings Bank" (or any similar name) within the Noncompete Area
during the three (3) year period following the Closing Date.
ARTICLE VII
COVENANTS OF GREENPOINT
7.1 INTERFERENCE OR DAMAGE; INVESTIGATIONS. Prior
to the Closing, GreenPoint shall not interfere with Home Sav-
ings' normal operations or its customer or employee relations
at the Branches. Subject to the foregoing, Home Savings shall
afford GreenPoint access, at reasonable times and upon reason-
able notice, to the Branches for purposes of transition plan-
ning and to conduct such environmental investigations as
GreenPoint shall reasonably deem appropriate, provided that
GreenPoint shall, and shall cause its consultants and other
agents to, conduct and complete such investigations as expedi-
tiously as reasonably possible. GreenPoint hereby agrees to
25
indemnify, reimburse, defend and hold harmless Home Savings
for, from and against all Losses arising out of or related to
the activities of GreenPoint, its agents or contractors on or
about the Branches in conducting such inspections or transition
planning as Home Savings shall allow prior to the Closing.
7.2 PERFORMANCE OF LIABILITIES. From and after the
Closing Date, GreenPoint shall perform and be bound by the
terms and provisions of the deposit agreements governing the
terms of the accounts included within the Deposits, until such
terms and provisions are properly modified by GreenPoint.
Subject to the provisions of Section 13.2 hereof, from and
after the Closing Date, GreenPoint shall pay, to the extent of
sufficient available funds on deposit, all properly drawn
checks, drafts, and non-negotiable withdrawal orders timely
presented to it by mail, over its counters, or through
clearings by depositors whose deposits or accounts on which
such items are drawn are included within the Deposits, whether
drawn on the check or draft forms provided by Home Savings or
by GreenPoint, all in accordance with applicable law, customary
banking practices and the provisions of such accounts in effect
as of the Closing Date, until such provisions are properly
modified or canceled by GreenPoint. GreenPoint shall forward
to the last known address of all customers of the Branches
within five (5) days following the Closing Date a reasonable
amount of checks, drafts and withdrawal orders bearing its own
imprint for use by such customers.
7.3 ACCOUNT LOANS. From and after the Closing Date,
GreenPoint shall continue to honor and provide credit in
accordance with applicable law, customary banking practices and
the terms and provisions of the Account Loans transferred under
this Agreement, until such terms and provisions are properly
modified by GreenPoint.
7.4 SAFE DEPOSIT BUSINESS. From and after the
Closing Date, GreenPoint shall perform and discharge all of
Home Savings' liabilities with respect to the Safe Deposit
Business, including maintaining all necessary facilities and
providing all necessary services for the use of safe deposit
boxes by the renters thereof, in accordance with the terms and
provisions of the applicable leases or other agreements
relating to such boxes, until such terms and provisions are
properly modified by GreenPoint.
7.5 FIDUCIARY RELATIONSHIPS. From and after the
Closing Date, GreenPoint shall perform all of the fiduciary
relationships of Home Savings arising out of any retirement
accounts included within the Deposits, and with respect to such
accounts, GreenPoint shall assume, subject to the receipt of
26
any required consents, all of the obligations and duties of
Home Savings as fiduciary and succeed to all such fiduciary
relationships of Home Savings as fully and to the same extent
as if GreenPoint had originally acquired, incurred or entered
into such fiduciary relationship.
7.6 CONDUCT OF BUSINESS. Between the date hereof
and the Closing Date, GreenPoint and its affiliates shall not
undertake any marketing or advertising efforts specifically
targeted to Home Savings' customers or take any other action
specifically intended to reduce the amount of the Deposits as
of the Closing Date. Notwithstanding the foregoing, GreenPoint
shall be permitted to continue to conduct its current business
in the ordinary course and shall be permitted to (i) engage in
general media advertising not specifically targeted to
customers of the Branches and not using Home Savings' name, and
(ii) originate and service loans and otherwise engage in the
lending business, including any solicitation of such business.
GreenPoint shall not, between the date of this Agreement and
the Closing Date, conduct its business and operations in such a
manner as to impair its ability to consummate the transactions
contemplated hereunder, nor will it engage in any transaction,
take any action or omit to take any action, which could be
expected to impair its ability to consummate the transactions
contemplated hereunder.
7.7 CONDITIONS TO CLOSING. GreenPoint shall use its
reasonable efforts to (i) satisfy, as expeditiously as
reasonably possible, all of the conditions to the obligations
of Home Savings hereunder within GreenPoint's control, and (ii)
obtain all consents of third parties required to assign the
branch leases set forth on SCHEDULE 3.10(a) and the contracts
set forth on SCHEDULE 3.9.
7.8 RECORDS. GreenPoint shall maintain the Records
in accordance with applicable law and regulation and
GreenPoint's record retention policy and, in any case, for not
less than seven (7) years following the Closing Date.
Following the Closing Date, GreenPoint shall promptly provide
such copies of the Records transferred to GreenPoint by Home
Savings as Home Savings shall reasonably request, provided
that, from and after 180 days following the Closing Date, Home
Savings shall reimburse GreenPoint for its actual out-of-pocket
costs incurred in connection therewith.
7.9 CARDHOLDERS. Home Savings shall arrange for
Citibank to provide to GreenPoint after the Closing Date a list
of all Cardholders. GreenPoint shall not at any time use or
transfer the Cardholder names on such list for the purpose of
soliciting, directly or indirectly, any Cardholder for any Bank
27
Card. If GreenPoint makes or conducts any solicitation for a
Bank Card, it shall purge the names of all Cardholders whose
names appear on the list provided by Citibank to GreenPoint
from any list of persons to be solicited. Citibank is hereby
designated as a third party beneficiary of the obligations
stated in this Section 7.9 with a direct right of enforcement
against GreenPoint without regard to or defense based upon any
action or omission of Home Savings. GreenPoint acknowledges
that Home Savings has granted to Citibank the right to solicit
customers with accounts domiciled at the Branches as of the
date prior to the Closing Date (including customers who are not
Cardholders) for Bank Cards, for an indefinite period,
including the period following the Closing Date, and that
GreenPoint does not have exclusive rights to solicit such
customers. GreenPoint's obligations under this Section 7.9
shall be limited to those obligations required to be imposed
upon GreenPoint pursuant to the terms of that certain Purchase
and Sale Agreement by and between Home Savings and Citibank
dated as of December 14, 1993. The number of Cardholders as of
March 31, 1995 was approximately 11,500.
ARTICLE VIII
ADDITIONAL AGREEMENTS
8.1 REGULATORY APPROVALS.
(a) Home Savings and GreenPoint shall cooperate in
preparing, submitting, filing, updating and publishing (as
applicable), as expeditiously as possible, all applications,
notification and report forms, and notices as may be required
by applicable law, with respect to the transactions
contemplated by this Agreement, including, without limitation,
those of the OTS, the NY Banking Authority, the FDIC, the
Federal Trade Commission, the Department of Justice and any
other applicable state or federal regulatory agency, and Home
Savings and GreenPoint will use their reasonable efforts to
obtain such approvals and accomplish such actions as
expeditiously as possible. On or prior to June 1, 1995 each
party shall file in draft or final form each application,
notification or similar form required to obtain the regulatory
approval or consent necessary to consummate the transactions
contemplated by this Agreement.
(b) Each party represents, warrants and agrees that
any information furnished by it for inclusion in any regulatory
application will be true and complete as of the date so
furnished.
28
8.2 REPORTS AND INFORMATION. Home Savings has
provided to GreenPoint the Phase I environmental reports,
asbestos reports and other reports, documents and information
with respect to the environmental condition of the Branches
listed on SCHEDULE 3.13 hereto. Home Savings has no reason to
believe that such reports contain any material misstatement or
omit information that makes the statements made therein
misleading in any material respect. Subject to the foregoing,
Home Savings makes no representations and warranties whatsoever
with respect to the form or content of such reports and hereby
disclaims responsibility for the information underlying the
reports, the scope of examination undertaken in connection with
the reports, the fitness of the reports for GreenPoint's
purposes, or the qualifications and expertise of the preparers
of the reports. GreenPoint acknowledges that all reports and
other documents obtained from Home Savings, including, but not
limited to, the Phase I and asbestos reports, shall remain the
property of Home Savings until the consummation of the Closing
and GreenPoint will not disseminate any of such materials to
any other individual or entity, except its attorneys and
environmental consultants. In the event the Closing Date does
not occur or this Agreement is terminated, GreenPoint shall
return to Home Savings all documents delivered by Home Savings
to GreenPoint or its agents, together with copies of all
reports, studies, analyses and other written work product
(other than attorney work product) prepared by GreenPoint or
its agents or contractors relating to the Branches. If
GreenPoint shall specifically identify to Home Savings in
writing prior to the Closing any environmental problem
requiring remediation at any of the Owned Branches or Ground
Leased Branches, GreenPoint shall bear the first $250,000 of
costs related to the remediation thereof per Branch, and Home
Savings shall bear all costs related to such remediation
thereafter; provided, that each party shall use its reasonable
efforts to cooperate in conducting any such remediation, which
shall be completed as expeditiously as possible and at the
lowest possible cost.
8.3 FURTHER ASSURANCES. Home Savings and GreenPoint
each shall do all things reasonably necessary or desirable and
within its control to effect the consummation of the transac-
tions contemplated hereby as soon as possible, and at any time
and from time to time after the Closing Date shall, upon the
request of the other, do or cause to be done such further acts
and execute such documents as may be necessary or desirable to
vest in GreenPoint the Assets (other than the Real Property for
which GreenPoint will look solely to the Title Policies), and
to evidence GreenPoint's assumption of the Liabilities, in-
cluding, among others, obtaining all necessary consents and
substitutions necessary to substitute GreenPoint as trustee for
all retirement deposit accounts included in the Deposits.
29
8.4 EMPLOYEES.
(a) Within five (5) Business Days of the date
hereof, Home Savings shall deliver to GreenPoint a true and
complete list of all Region Employees by name, date of hire and
position in the Branches as of a recent date and shall promptly
provide to GreenPoint the most recent performance evaluation,
current salary and other compensation information for any
Region Employee who consents in writing to the provision of
such information to GreenPoint. GreenPoint shall use all
reasonable efforts to interview each Region Employee for
employment effective as of the Closing and use all reasonable
efforts to hire as many of the Region Employees as possible
consistent with, and subject to, GreenPoint's requirements and
employment policies. Home Savings shall permit GreenPoint to
interview Region Employees, at times and locations acceptable
to each of Home Savings and GreenPoint. No later than ninety
(90) days from the date of this Agreement, GreenPoint shall
provide to Home Savings a list of the Region Employees it
intends to employ following the Closing. Home Savings shall
permit GreenPoint to communicate with the Region Employees, at
reasonable times and upon reasonable notice, concerning
GreenPoint's plans, operations, business, customer relations
and general personnel matters, provided that such contacts
shall be conducted in a manner as is reasonably acceptable to
Home Savings.
(b) GreenPoint shall recognize each Transferred
Employee's original date of hire with Home Savings for
determining eligibility and vesting, and give each Transferred
Employee credit for all purposes (other than benefit accrual),
under each employee benefit plan, program or arrangement of
GreenPoint other than (x) GreenPoint's Employee Stock Ownership
Plan (a true and complete copy of which has been provided to
Home Savings) and (y) post-retirement health benefit plan.
Home Savings shall transfer to GreenPoint, at the Closing Date,
cash in the amount of its post-retirement health benefit
accrual for the Transferred Employees, in the approximate
amount of $200,000. GreenPoint shall also give credit to each
Transferred Employee under GreenPoint's welfare benefit plans
for deductible and co-payments made by the Transferred Employee
under Home Savings' welfare benefit plans during the period
prior to the Closing Date to the extent applicable under the
terms of such plans to any period following the Closing Date.
GreenPoint shall waive any pre-existing condition limitation
under each of GreenPoint's welfare benefit plans for any
condition of a Transferred Employee that would have been
covered under such plan had service of such Transferred
Employee with Home Savings been service with GreenPoint.
30
(c) GreenPoint shall provide retirement and welfare
benefits (including, without limitation, medical, hospital,
dental, accidental death and dismemberment, life, disability,
401(k) plan and other similar benefits) to Transferred
Employees for claims incurred and benefits earned on or after
the Closing Date under and subject to this Section 8.4 and the
generally applicable terms and conditions of GreenPoint's
employee benefit plans, programs and arrangements as amended
from time to time; provided that Transferred Employees shall
become eligible under such welfare benefit plans upon the
Closing Date.
(d) GreenPoint agrees to maintain, for a period of
at least one year following the Closing Date, severance benefit
plans for Transferred Employees that provide each Transferred
Employee with (i) a severance pay benefit equal to that which
an employee at a comparable employment level of each such
Transferred Employee would receive under the severance benefit
plan of GreenPoint, provided such severance pay benefit shall
be calculated based on the highest salary paid by Home Savings
or GreenPoint to such Transferred Employee during the 18-month
period preceding the termination of such Transferred Employee,
and (ii) the opportunity to make contributions to medical,
hospital and dental plans following termination of employment
under COBRA. Without limiting the generality of Section 8.4(b)
hereof, GreenPoint will give each Transferred Employee credit
under GreenPoint's severance pay plans for service rendered by
such Transferred Employee to Home Savings. GreenPoint agrees
to act as successor employer for purposes of COBRA, so that the
Transferred Employees will not, as a result, be deemed to have
had a termination of employment for purposes of COBRA and that
any COBRA notices or coverage required to be given or made
available to any such employee shall be given or made by
GreenPoint, not Home Savings.
(e) GreenPoint agrees to credit Transferred
Employees with all earned and/or accrued vacation days for the
current year, to which they are entitled under Home Savings'
vacation policy (a true and complete copy of which has been
provided to GreenPoint) upon their employment with GreenPoint,
and with length of service affecting the rate of accrual of
vacation days, and to advise those employees of same.
(f) In reliance on the agreements of GreenPoint set
forth in this Section 8.4, GreenPoint and Home Savings agree
that Home Savings shall not deliver any notice to Region Em-
ployees pursuant to the WARN Act. GreenPoint further agrees
that it shall be responsible for providing a timely notifica-
tion if required by the WARN Act for any employee terminations
31
or layoffs following the Closing Date and Home Savings shall
cooperate with GreenPoint with respect to the foregoing.
(g) This Agreement is not intended to create and
does not create any contractual or legal rights in or
enforceable by any Region Employee. GreenPoint agrees to
obtain the prior approval of Home Savings before sending any
written communications to any Home Savings employee concerning
the subject matter of this Section 8.4, which approval shall
not be unreasonably withheld. Home Savings agrees to use its
reasonable efforts to incorporate GreenPoint's comments in any
written communications to the Region Employees concerning the
subject matter of this Section 8.4.
8.5 CONFIDENTIALITY. Except to the extent
disclosure is required by law, or in response to any
governmental or regulatory authority, or in connection with any
litigation relating to an alleged breach of this Agreement,
each party shall maintain the confidentiality of all
information obtained from the other party hereto that is not
publicly available and shall use such information only for
purposes reasonably related to this Agreement and the
transactions contemplated hereby. If this Agreement is
terminated, each of the parties hereto agrees to return
promptly upon request all documents received from the other
party that contain or embody information subject to this
paragraph.
8.6 PUBLICITY; NOTICES. Until consummation of the
Closing, GreenPoint and Home Savings each shall coordinate with
each other in advance as to (i) the form and content of any
communication intended for dissemination to the public or the
customers of the Branches regarding the transactions
contemplated by this Agreement, (ii) the form and content of
any communication from GreenPoint to the employees of Home
Savings, and (iii) the form and content of any application made
to any regulatory authority, or similar agency, relating to the
transactions contemplated hereby. Neither party shall
disseminate any such communication without the prior approval
of the other, which approval shall not be unreasonably withheld
or delayed, except that nothing contained in this Agreement
shall prevent Home Savings or GreenPoint from making any and
all public disclosures that either of them shall believe is
advisable to make, based upon the advice of counsel, to comply
with any applicable securities laws or regulations or requests
of governmental agencies or authorities.
8.7 TAX REPORTING. The parties shall use their best
efforts to enter into an agreement (the "Allocation Agreement")
as soon as practicable after the Closing Date concerning the
allocation of the Purchase Price among the Assets in accordance
32
with Section 1060 of the Internal Revenue Code of 1986, as
amended, and the regulations promulgated thereunder (the
"Code"). GreenPoint shall deliver to Home Savings a proposed
Allocation Agreement which will allocate the Purchase Price
among the Assets within 120 days after the Closing Date. If
Home Savings has not objected to such Allocation Agreement
within 30 days of receipt, such agreement shall be deemed
accepted and shall be the Allocation Agreement. If Home
Savings objects to GreenPoint's proposed Allocation Agreement,
Home Savings shall give GreenPoint notice of its objections and
GreenPoint and Home Savings shall use all reasonable efforts to
resolve their differences. If, 60 days after the date on which
Home Savings has given GreenPoint notice of its objections, the
parties have not adopted the Allocation Agreement, any disputes
related thereto shall be referred to a "big six" accounting
firm mutually agreed on by the parties having no material
relationship with either party and shall be resolved within 30
days after such referral. The costs, expenses and fees of such
accounting firm shall be borne equally by the parties.
The Parties shall file all applicable tax returns and
other documents in accordance with the Allocation Agreement (as
finally determined) and will not adopt or otherwise assert tax
positions inconsistent therewith (unless required to do so
under applicable law). GreenPoint shall deliver to Home
Savings a completed Internal Revenue Service Form 8594 as soon
as practicable following the Closing Date but in any event not
later than 60 days prior to the due date, including extension,
for filing the federal income tax return for the year of the
sale. The parties shall file such Form 8594 with their
respective tax returns for the year in which the Closing
occurs.
8.8 INTEREST REPORTING. Home Savings shall report
from January 1, 1995 (or from January 1, 1996, if the Closing
Date is in 1996) through the Closing Date, and GreenPoint shall
report from the Closing Date through December 31, 1995 (or
through December 31, 1996, if the Closing Date is in 1996), all
interest credited to, interest premiums paid on, interest
withheld from, and early withdrawal penalties charged to,
accounts included within the Deposits. Such reports shall be
made to the holders of such deposit accounts and to the
applicable federal and state regulatory agencies.
8.9 WITHHOLDING. No later than 6:00 p.m. Pacific
Time on the day following the Closing Date, Home Savings shall
provide to GreenPoint information regarding all "B" notices
(TINs do not match) and "C" notices (underreporting/IRS imposed
withholding) received by it from the IRS regarding any of the
accounts included within the Deposits and for a period of 180
days following the Closing Date, Home Savings shall provide
33
information regarding all notices received by Home Savings from
the IRS releasing withholding restrictions on the accounts
related to the Deposits. Any amounts required by any
governmental agency to be withheld from any of any of the
accounts included within the Deposits (the "Withholding
Obligations") or any penalties imposed by any governmental
agency will be handled as follows:
(a) Any Withholding Obligations required to be
remitted to the appropriate governmental agency on or prior to
the Closing Date will be withheld and remitted by Home Savings,
and any other sums withheld by Home Savings pursuant to
Withholding Obligations prior to the Closing Date shall also be
remitted by Home Savings to the appropriate governmental agency
on or prior to the time they are due; and
(b) Any Withholding Obligations required to be
remitted to the appropriate governmental agency after the
Closing Date with respect to Withholding Obligations after the
Closing Date and not withheld by Home Savings shall be withheld
and remitted by GreenPoint.
Any penalties described in "B" notices from the IRS or any
similar penalties that relate to accounts opened by Home
Savings prior to the Closing Date will, subject to this Section
8.9, be paid by Home Savings promptly upon receipt of the
notice providing such penalty assessment resulted from Home
Savings' acts, policies or omissions. Home Savings shall pay
such penalties only after exhausting all administrative and
judicial remedies which Home Savings deems appropriate.
GreenPoint shall cooperate with Home Savings in providing
copies of penalty notices on a timely basis and other
information which Home Savings may request in order to
challenge such penalties.
8.10 SIGNS. Home Savings may remove any and all
interior and exterior signs bearing, or in the shape of, the
Home Savings emblem, and any other signs and sign casings
excluded from SCHEDULE 3.7, at any time until and including the
tenth (10th) day following the Closing Date. With respect to
all signs identifying such branches as Home Savings branches,
GreenPoint and Home Savings shall mutually agree upon one or
more sign companies to simultaneously remove said signs, sign
facings, and sign casings at Home Savings' cost and install
GreenPoint's signage at GreenPoint's cost.
8.11 LEASING OF BRANCHES; EXCLUDED BRANCHES.
(a) In the event GreenPoint excludes any branch
lease under which Home Savings is the lessee or sublessee from
SCHEDULE 3.10(a) pursuant to the terms of Section 5.6 then, if
34
permitted by the lease, GreenPoint shall sublease any such
Leased Branch or Ground Leased Branch from Home Savings
following the Closing for the same rent and term, and subject
to the same terms and conditions, as the existing lease for
such Branch, provided, that GreenPoint shall indemnify Home
Savings for any breach by GreenPoint of the terms of such
sublease. If such sublease is permitted, all other provisions
of this Agreement relating to the purchase of the Assets and
the assumption of the Liabilities shall be unaffected. If the
consent of the lessor is required for such sublease, and such
consent cannot be obtained prior to the Closing Date, then such
branch shall be deemed an "Excluded Branch" in accordance with
the provisions of Section 8.11(d).
(b) In the event GreenPoint declines to purchase the
real property fee interest associated with an Owned Branch or
to assume the real property leasehold interest associated with
a Ground Leased Branch pursuant to the terms of Section 5.7(b),
then:
(i) GreenPoint shall lease or sublease any such
Branch from Home Savings following the Closing pursuant to
the terms of a commercial lease prepared by Home Savings,
which commercial lease shall provide for (A) a term of
five years, (B) a base rent determined by an independent
commercial leasing agent selected jointly by Home Savings
and GreenPoint which rent shall represent a fair market
rental amount for the premises when compared to similar
properties in similar locations, on a triple net basis,
with utilities and taxes to be paid for or reimbursed by
GreenPoint, (C) a requirement that GreenPoint obtain and
maintain public liability insurance with a minimum
$5,000,000 combined single limit coverage naming Home
Savings as an additional named insured, and (D) such other
commercially reasonable terms and conditions as may be
determined by the parties; provided, however, that if the
consent of the lessor is required for a sublease of a
Ground Leased Branch, and such consent cannot be obtained
prior to the Closing Date, then such branch shall be
deemed an "Excluded Branch" in accordance with the
provisions of Section 8.11(d); and
(ii) the Real Property Purchase Price shall be
reduced by (A) the Net Book Value of the real property fee
interest associated with such Branch, if the Branch is an
Owned Branch, or (B) the Net Book Value of the leasehold
improvements associated with such Branch, if the Branch is
a Ground Leased Branch.
35
(c) Notwithstanding the foregoing, if a Ground
Leased Branch is excluded from SCHEDULE 3.10(a) pursuant to the
terms of Section 5.6, and if GreenPoint declines to assume the
leasehold interest associated with such Ground Leased Branch
pursuant to the terms of Section 5.7(b), then GreenPoint shall,
if permitted by the terms of such ground lease, sublease such
Ground Leased Branch premises from Home Savings in accordance
with the provisions of Section 8.11(b), or, if the consent of
the lessor is required for such sublease, and such consent
cannot be obtained prior to the Closing Date, such Ground
Leased Branch shall be deemed an "Excluded Branch" in
accordance with the terms of Section 8.11(d).
(d) If the consent of the lessor is required for a
sublease pursuant to Section 8.11(a), (b) or (c) above, and
such consent cannot be obtained prior to the Closing Date, or
if a branch is excluded pursuant to Section 5.7(a), each such
affected branch shall be referred to herein as an "Excluded
Branch." GreenPoint shall have no obligation to assume the
lease associated with an Excluded Branch or to assume and/or
purchase the Personal Property, the Assumed Contracts, the Cash
on Hand or the leasehold improvements associated with an
Excluded Branch, but GreenPoint shall nevertheless assume
and/or purchase the Deposits, Account Loans, Records and Safe
Deposit Business associated with an Excluded Branch on the same
terms and conditions otherwise provided herein, subject to
SCHEDULE 8.11(d).
8.12 RELOCATION OF CERTAIN OFFICES. Home Savings
shall use its reasonable efforts to relocate its loan
production offices located at the Bayside and Massapequa Park
Branches as soon as practicable following the Closing Date, but
in any case, no later than one hundred twenty (120) days
following the Closing Date. GreenPoint shall use its
reasonable efforts to relocate the teleservicing unit located
at the 42nd Street Branch as soon as practicable following the
Closing Date, but in any case, no later than one hundred twenty
(120) days following the Closing Date. After the Closing Date,
the relocating party shall not unnecessarily or materially
interfere with the other's operations, and shall conduct such
relocation in an orderly manner and the other shall cooperate
with the relocating party in its efforts to conduct such
relocation.
8.13 DEPOSIT INSURANCE EXIT/ENTRANCE FEES. The
parties hereby agree that each shall use its reasonable efforts
to obtain all necessary regulatory approvals to consummate the
transfer of the Deposits as contemplated by this Agreement
without the assessment of exit or entrance fees by the FDIC,
including, without limitation, seeking approval pursuant to
Section 5(d)(3) of the Federal Deposit Insurance Act.
36
8.14 42ND STREET BRANCH. GreenPoint shall lease the
42nd Street Branch from Home Savings following the Closing
pursuant to the terms of a full service gross commercial lease,
which lease shall provide for (i) a term of three years, (ii)
an annual rent equal to $1,700,000 per year, (iii) a
requirement that GreenPoint obtain and maintain public
liability insurance with a minimum $5,000,000 combined single
limit coverage naming Home Savings as an additional named
insured, (iv) acceptance of the premises on an "as is" basis,
and (v) such other terms and conditions as set forth on
SCHEDULE 8.14 hereto.
8.15 SBLI. Home Savings and GreenPoint shall
cooperate to effect a transfer from Home Savings to Greenpoint
of the assets and liabilities associated with the savings bank
life insurance business associated with the Branches on fair
and reasonable terms.
8.16 HOME OFFICE. Home Savings and GreenPoint will
cooperate to ensure that GreenPoint can purchase and assume the
Assets and Liabilities associated with each of the Branches in
compliance with the provisions of Section 240 of the Banking
Law of the State of New York, provided, however, that
notwithstanding any other term or provision of this Agreement,
GreenPoint shall in no event be excused from its obligation to
purchase and assume any of the Assets and Liabilities on
account of any violation or potential violation of such statute
that may arise out of or relate to such purchase and
assumption.
ARTICLE IX
CONDITIONS TO OBLIGATION OF GREENPOINT
The obligation of GreenPoint to close the
transactions contemplated hereunder is subject to the
satisfaction on or before the Closing of the following
conditions:
9.1 NO INJUNCTIONS OR RESTRAINTS. No order,
injunction or decree issued by any court or agency of competent
jurisdiction or other legal restraint or prohibition preventing
the consummation of the Closing of the transactions
contemplated by this Agreement shall be in effect.
9.2 CONDITIONS PERFORMED. Each of the terms, cov-
enants and conditions of this Agreement to be complied with and
performed by Home Savings on or before the Closing shall have
been duly complied with and performed in all material respects,
or GreenPoint shall have waived such compliance or performance,
37
and all documents to be delivered or actions to be taken by
Home Savings pursuant to Sections 12.2 and 12.3 shall have been
delivered or performed.
9.3 REPRESENTATIONS. Each of the representations
and warranties made by Home Savings herein shall be true and
correct as of the date hereof and as of the Closing with the
same force and effect as though such representations and
warranties had been made as of the Closing, except that the
representations and warranties made regarding SCHEDULES 3.6,
3.7, 3.8, 3.9, 3.10(a) and 3.10(b) shall be true and correct as
of the Closing Date with respect to such Schedules as updated
and delivered at the Closing in accordance with the terms of
this Agreement.
9.4 DOCUMENTATION. The form and substance of all
instruments of transfer and other documents required to be
delivered pursuant to this Agreement by Home Savings shall be
reasonably satisfactory in all respects to GreenPoint.
ARTICLE X
CONDITIONS TO OBLIGATION OF HOME SAVINGS
The obligation of Home Savings to close the
transactions contemplated hereunder is subject to the
satisfaction on or before the Closing of the following
conditions:
10.1 NO INJUNCTIONS OR RESTRAINTS. No order,
injunction or decree issued by any court or agency of competent
jurisdiction or other legal restraint or prohibition preventing
the consummation of the Closing of the transactions
contemplated by this Agreement shall be in effect.
10.2 CONDITIONS PERFORMED. Each of the terms,
covenants and conditions of this Agreement to be complied with
and performed by GreenPoint on or before the Closing shall have
been duly complied with and performed in all material respects,
or Home Savings shall have waived such compliance or
performance, and all documents to be delivered or actions to be
taken by GreenPoint pursuant to Section 12.4 shall have been
delivered or performed.
10.3 REPRESENTATIONS. Each of the representations
and warranties made by GreenPoint herein shall be true and
correct as of the date hereof and as of the Closing with the
same force and effect as though such representations and
warranties had been made as of the Closing.
38
10.4 DOCUMENTATION. The form and substance of all
instruments of assumption and other documents required to be
delivered pursuant to this Agreement by GreenPoint shall be
reasonably satisfactory in all respects to Home Savings.
ARTICLE XI
CONDITIONS TO OBLIGATIONS OF BOTH PARTIES
The obligations of both parties to close the
transactions contemplated by this Agreement are subject to the
satisfaction on or before the Closing Date of each of the
following conditions:
11.1 GOVERNMENTAL ACTIONS. Neither the Department
of Justice, the Federal Trade Commission nor any other agency
of the United States of America (or any political subdivision
thereof) shall have issued any order or taken or threatened to
take any action which would or could have the effect of
preventing the consummation of the transactions contemplated by
this Agreement or asserting any liability as a result of such
transactions. No governmental action or proceeding shall have
been instituted or, in the reasonable opinion of Home Savings
or GreenPoint, be imminent, and, at what would be the Closing,
remain imminent or pending by or before a court or other
governmental body, agency or authority to restrain or prohibit
the transactions contemplated by this Agreement or assert any
material liability in connection herewith.
11.2 GOVERNMENTAL APPROVALS. To the extent required
by applicable law or regulation, the OTS, the NY Banking
Authority, the FDIC and/or such other state or federal agencies
whose approval of the transactions contemplated by this
Agreement is so required, shall have approved or authorized all
of the transactions contemplated by this Agreement. Any such
approval required to be obtained by Home Savings or GreenPoint
shall have been granted without the imposition of conditions
that are reasonably deemed by the affected party to be
materially burdensome. All other statutory or regulatory
requirements for the valid consummation of the transactions
contemplated by this Agreement shall have been satisfied and
all other required governmental consents and approvals shall
have been obtained.
39
ARTICLE XII
THE CLOSING
12.1 TIME AND PLACE OF CLOSING. Unless this
Agreement is earlier terminated pursuant to Section 14.1, the
consummation of the transactions provided for herein (the
"Closing") will take place in a mutually acceptable manner and
on a mutually acceptable day and place (the "Closing Date"),
which shall be a Friday and, unless the parties mutually agree
otherwise, shall be as soon as reasonably practicable and no
later than the last Business Day of the month immediately
following the month in which all required regulatory approvals
have been received (or no later than December 14, 1995 in the
event such required regulatory approvals are received prior to
such date and the Closing can be reasonably facilitated by such
date) and all applicable waiting periods have expired, but in
no event shall the Closing Date be (i) later than January 31,
1996, (ii) on a date between December 15, 1995 and January 15,
1996, inclusive, (iii) during the last three (3) days or the
first ten (10) days of any fiscal quarter of Home Savings or
GreenPoint, or (iv) on a date on or between September 1-4, 1995
or September 29 - October 2, 1995.
12.2 PAYMENT DUE AT CLOSING. Home Savings shall pay
to GreenPoint at the Closing an amount (the "Cash Payment") in
United States dollars equal to one hundred percent (100%) of
the aggregate amount of the Deposits, as reflected on the
updated SCHEDULE 3.6 delivered to GreenPoint at the Closing
pursuant to Section 5.2 of this Agreement, minus the
Preliminary Purchase Price, minus the aggregate Designated
Value of the Agency COFI Securities, CMOs, and Selected
Securities, if any, delivered by Home Savings to GreenPoint at
the Closing, minus the Lease Deposits, minus the Prepaid FDIC
Insurance Premium, and plus or minus the net taxes and expenses
to be paid by Home Savings or GreenPoint pursuant to Section
16.2 (to the extent such amounts are calculable at Closing).
Home Savings shall prepare and deliver to GreenPoint at the
Closing a statement (the "Preliminary Settlement Statement")
supported by appropriate exhibits, substantially in the form of
EXHIBIT B hereto, showing the computation of the Cash Payment.
12.3 CLOSING DOCUMENTS TO BE DELIVERED OR ACTIONS TO
BE TAKEN BY HOME SAVINGS. At the Closing, Home Savings shall:
(a) Deliver to GreenPoint updated SCHEDULES 3.6,
3.7, 3.8, 3.9, 3.10(a), 3.10(b) and SCHEDULE 5.1;
(b) Deliver to GreenPoint the Preliminary Settlement
Statement and any exhibits thereto;
40
(c) Deliver the Cash Payment by wire transfer in
immediately available funds to an account designated in writing
by GreenPoint;
(d) Deliver to GreenPoint each and every executed
Lessor's Estoppel Certificate Home Savings was able to obtain,
substantially in the form attached hereto as EXHIBIT C, with
respect to each Branch Lease under which Home Savings is a
lessee or sublessee;
(e) Deliver to GreenPoint an executed Consent to
Assignment substantially in the form attached hereto as EXHIBIT
D with respect to each Branch Lease under which Home Savings is
a lessee or sublessee that requires the consent of any party to
the assignment thereof;
(f) Execute and deliver to GreenPoint a Lessee's
Assignment and Assumption Agreement substantially in the form
attached hereto as EXHIBIT E with respect to each Branch Lease;
(g) Execute and deliver to GreenPoint a Lessor's
Assignment and Assumption Agreement substantially in the form
attached hereto as EXHIBIT F with respect to each Branch Tenant
Lease;
(h) Execute and deliver real property deeds to the
Title Company, in the form attached hereto as EXHIBIT G,
conveying to GreenPoint fee title to the Real Property
associated with each Owned Branch and deliver all filings to
local and state authorities necessary to transfer such Real
Property;
(i) Execute and deliver to GreenPoint a certificate
of non-foreign status in the form of EXHIBIT H hereto;
(j) Execute and deliver to GreenPoint a Bill of Sale
and Assignment in the form attached hereto as EXHIBIT I;
(k) Execute and deliver to GreenPoint a General
Assignment in the form attached hereto as EXHIBIT J;
(l) Deliver to GreenPoint possession of the Assets;
(m) Acknowledge and deliver to GreenPoint an
Assumption Agreement in the form attached hereto as EXHIBIT K;
(n) Execute and deliver to GreenPoint a Retirement
Account Transfer Agreement in the form attached hereto as
EXHIBIT L;
41
(o) Deliver to GreenPoint an opinion of counsel to
Home Savings dated as of the Closing Date substantially in the
form attached hereto as EXHIBIT M and an opinion of in-house
counsel substantially in the form attached hereto as EXHIBIT N;
(p) Deliver to GreenPoint a certificate of a Senior
Vice President of Home Savings, or of another officer
acceptable to GreenPoint, dated as of the Closing Date,
substantially in the form attached hereto as EXHIBIT O;
(q) Deliver or cause to be delivered to GreenPoint
all other documents and instruments necessary to transfer to
GreenPoint all of Home Savings' right, title and interest in
and to the Assets (other than the Real Property for which
GreenPoint will only receive the applicable Title Policy and
either the real property deed or the Assignment and Assumption
Agreement, as applicable, delivered pursuant to Sections
12.3(f) and (g) hereof);
(r) Cause to be issued, at GreenPoint's option, an
Owner's Policy of Title Insurance (a "Title Policy", and
together, the "Title Policies") issued by the Title Company (or
an unconditional commitment, dated as of the Closing Date, to
issue such Title Policy promptly following the Closing), the
expense of which shall be borne and paid by GreenPoint,
together with any endorsements reasonably requested by
GreenPoint, insuring GreenPoint's fee title or ground leasehold
title interest, as appropriate, for any or all of the parcels
of Real Property, subject only to the Permitted Exceptions.
Any surveys desired by GreenPoint or required by the Title
Company in connection with the issuance of the Title Policies
pursuant to this Section 12.3(r) or any endorsements reasonably
requested by GreenPoint hereunder, shall be obtained by
GreenPoint at GreenPoint's sole cost and expense;
(s) Execute as lessor or sublessor, and deliver to
GreenPoint a lease or sublease relating to each Branch that
GreenPoint shall lease from Home Savings pursuant to Section
8.11 hereof;
(t) Deliver or cause to be delivered such documents
evidencing the corporate authority and existence of Home Sav-
ings as GreenPoint shall reasonably request, including (i) a
copy of all resolutions duly adopted by the Board of Directors
of Home Savings authorizing the execution, delivery and per-
formance of this Agreement by Home Savings, certified by the
Secretary or an Assistant Secretary of Home Savings as being in
full force and effect as of the Closing, (ii) certified copies
of the charter and bylaws of Home Savings as in full force and
42
effect as of the Closing, (iii) a certificate of existence
issued by the Office of Thrift Supervision, and (iv) a
certificate of the Secretary or an Assistant Secretary of Home
Savings as to the incumbency and signatures of the officers of
Home Savings executing the Agreement and any other documents
delivered by Home Savings at the Closing; and
(u) Deliver to GreenPoint the Selected Securities,
the Agency COFI Securities and the CMOs, endorsed or in a form
appropriate for transfer.
12.4 CLOSING DOCUMENTS TO BE DELIVERED OR ACTIONS TO
BE TAKEN BY GREENPOINT. At the Closing, GreenPoint shall:
(a) Execute and deliver to Home Savings a Lessee's
Assignment and Assumption Agreement in the form attached hereto
as EXHIBIT E with respect to each Branch Lease;
(b) Execute and deliver to Home Savings a Lessor's
Assignment and Assumption Agreement substantially in the form
attached hereto as EXHIBIT F with respect to each Branch Tenant
Lease;
(c) Execute and deliver to Home Savings an
Assumption Agreement in the form attached hereto as EXHIBIT K;
(d) Execute and deliver to Home Savings a Retirement
Account Transfer Agreement in the form attached hereto as
EXHIBIT L;
(e) Deliver to Home Savings an opinion of counsel to
GreenPoint dated as of the Closing Date substantially in the
form attached hereto as EXHIBIT P.
(f) Deliver to Home Savings the certificate of the
Chief Financial Officer of GreenPoint, or of another officer
acceptable to Home Savings, dated as of the Closing Date,
substantially in the form attached hereto as EXHIBIT Q;
(g) Deliver or cause to be delivered to Home Savings
all other documents and instruments necessary to evidence
GreenPoint's assumption of the Liabilities;
(h) Execute as lessee or sublessee, and deliver to
Home Savings a lease or sublease relating to each Branch that
GreenPoint shall lease from Home Savings pursuant to Sections
8.11 and 8.14 hereof; and
(i) Deliver or cause to be delivered such documents
evidencing the corporate authority and existence of GreenPoint
43
as Home Savings shall reasonably request, including (i) a copy
of all resolutions duly adopted by the Board of Directors of
GreenPoint authorizing the execution, delivery and performance
of this Agreement by GreenPoint, certified by the Secretary or
an Assistant Secretary of GreenPoint as being in full force and
effect as of the Closing, (ii) certified copies of the charter
and bylaws of GreenPoint as in full force and effect as of the
Closing, (iii) a certificate of existence issued by the New
York State Banking Authority, and (iv) a certificate of the
Secretary or an Assistant Secretary of GreenPoint as to the
incumbency and signatures of the officers of GreenPoint
executing the Agreement and any other documents delivered by
GreenPoint at the Closing.
12.5 POST-CLOSING ADJUSTMENTS.
(a) As soon as reasonably practicable after the
Closing Date, but no later than ten (10) Business Days
thereafter, Home Savings shall provide GreenPoint with: (i)
final SCHEDULES 3.6 and 3.8 that shall accurately reflect the
related balances, including accrued and unpaid interest
thereon, as of the Close of Business on the Closing Date, and
(ii) a final SCHEDULE 5.1 that shall accurately reflect the
amount of Cash on Hand as of the Close of Business on the
Closing Date, which schedule shall be prepared by Home Savings
based upon a cash count to be mutually conducted by Home
Savings and GreenPoint at the Close of Business on the Closing
Date.
(b) No later than ten (10) Business Days following
the Closing Date, Home Savings shall prepare and deliver to
GreenPoint a final settlement statement substantially in the
form of EXHIBIT R, which shall show the calculation of the
final payment amount (the "Final Payment Amount") based upon
the final schedules delivered pursuant to this Section 12.5.
(c) If the Final Payment Amount is different from
the Cash Payment, then a payment shall be made in the following
manner: if the Cash Payment shall have been greater than the
Final Payment Amount, GreenPoint shall refund to Home Savings
the difference between such amounts; if the Cash Payment shall
have been less than the Final Payment Amount, Home Savings
shall pay to GreenPoint the difference between such amounts.
Such refund or payment shall be made promptly by wire transfer
in immediately available collected funds, together with inter-
est thereon for the number of days from and including the
Closing Date to such settlement date, but excluding such set-
tlement date, at the rate per annum equal to the average during
such period of the average of the daily high and low rates for
federal funds on each Business Day during such period, as such
rates are published in the Western Edition of the Wall Street
44
Journal, computed on the basis of actual days elapsed over a
365-day year.
ARTICLE XIII
TRANSFER OF DEPOSIT ACCOUNTS
13.1 NOTICES. Each of Home Savings and GreenPoint
shall obtain the prior approval of the other of its written
notification to holders of deposits domiciled at any of the
Branches of the transfer of the Deposits from Home Savings to
GreenPoint. Neither Home Savings nor GreenPoint shall
unreasonably withhold such approval. Such notification shall
be made on such date as the parties hereto shall mutually
agree, provided that such notification shall be made in
compliance with relevant federal and state laws and
regulations.
13.2 POST-CLOSING RECONCILIATION.
(a) INCLEARING ITEMS. As of the opening of business
on the day following the Conversion Date, Home Savings shall
advise the Federal Reserve Bank of New York that the routing
transit numbers associated with the Branches should be
reassigned to GreenPoint and shall further provide such other
information necessary to expedite the clearing and sorting of
all checks, drafts, instruments and other commercial paper
relating to the Deposits (collectively referred to herein as
the "Paper Items"). GreenPoint shall bear all charges and
costs imposed by the Federal Reserve in connection with
reassignment of account number ranges for sorting the Paper
Items. For a period of sixty (60) days following the
Conversion Date (the "Inclearing Period"), in the event the
Federal Reserve fails or refuses to direct sort such Paper
Items for delivery to GreenPoint with the result that such
Paper Items are presented to Home Savings, Home Savings shall
continue to process checks or drafts drawn on deposit accounts
included within the Deposits that are not intercepted by the
Federal Reserve. During the Inclearing Period, Home Savings
shall by 3:00 p.m. Eastern Time transmit by facsimile or
electronic transmission a list of each inclearing item equal to
or greater than $2,500 setting forth the amount and the Home
Savings account number of each item received by Home Savings
for payment that day.
By 6:00 p.m. Eastern time on each Business Day during
the Inclearing Period, Home Savings shall make available to
GreenPoint all inclearing items received for payment on the
prior Business Day. By 2:00 p.m. Eastern Time on the day fol-
lowing the receipt of the inclearing items, GreenPoint shall
reimburse Home Savings for the amount of the checks presented
45
by wire transfer of immediately available funds. Upon
expiration of the Inclearing Period, Home Savings shall cease
honoring inclearing items presented against deposit accounts
included within the Deposits and such items shall be returned
marked "Refer to Maker". Following the Conversion Date, if
GreenPoint receives any of Home Savings' bank or escrow checks
bearing any of the routing transit numbers transferred to
GreenPoint, GreenPoint shall outsort such items and forward
them to Home Savings' Servicing Center in Irwindale (or such
other location as Home Savings shall specify) by overnight mail
for a period of one (1) year following the Closing Date. By
2:00 p.m. Eastern Time on the day following receipt of the
inclearing items, Home Savings shall reimburse GreenPoint for
the amount of such checks presented by wire transfer of
immediately available funds. Home Savings shall determine
whether to pay or reject such checks.
(b) ACH TRANSACTIONS. (i) Losses due to reclamation
requests against assumed accounts are closed or have
insufficient funds to cover a reclamation request will be
absorbed by Home Savings if the reclamation is against a credit
received on or prior to the Closing Date, and by GreenPoint if
against a credit received after the Closing Date.
(ii) Home Savings shall provide to GreenPoint no
later than forty-five (45) days prior to the Conversion Date,
the customer name, customer account number, and the originator
identification number for each automated clearinghouse ("ACH")
entry for the deposit accounts domiciled at the Branches, and
shall further provide, within seven (7) days following the
Conversion Date, an updated list as of the Close of business on
the Conversion Date. Prior to closing, Home Savings and
GreenPoint will develop a methodology by which ACH items re-
ceived by Home Savings after Conversion will be electronically
redirected to GreenPoint. For a period of one hundred eighty
(180) days following the Conversion Date, Home Savings agrees
to continue to accept and immediately forward to GreenPoint all
automated clearinghouse entries and corresponding funds. Home
Savings also agrees to include the originator identification
number, and GreenPoint agrees to immediately notify and in-
struct the originator of the ACH to reroute the entries di-
rectly to GreenPoint. Home Savings shall use its reasonable
efforts to telecopy or deliver to GreenPoint by 1:00 p.m. Pa-
cific Time (4:00 Eastern Time) of each Business Day, a summary
of ACH items received during such Business Day including claim
number, suffix, if applicable, source name, trade ID, company
ID, client name and effective date. GreenPoint shall be re-
sponsible for processing and responding to any reclamation
against deposit accounts that were transferred to GreenPoint
46
that are open and have sufficient funds to cover the
reclamation request. After the 180-day period, Home Savings
may discontinue accepting and forwarding ACH entries and return
them to the originators marked "Account Sold to Another DFI".
GreenPoint shall indemnify Home Savings against any Losses
arising out of or related to any account overdrafts that may
thereby be created.
(c) OVER-THE-COUNTER RETURNED ITEMS. Over-the-
counter returned items are those items that are included within
the deposit accounts transferred to GreenPoint but that are
returned unpaid to Home Savings after the Closing Date. On the
Business Day after any over-the-counter returned item is
received by Home Savings, GreenPoint shall transmit to Home
Savings, GreenPoint shall transmit to Home Savings by 5:00 p.m.
Eastern Time in immediately available funds by wire transfer,
the sum of the over-the-counter returned items GreenPoint deems
acceptable. After the Conversion Date, GreenPoint shall
process all over-the-counter returned items relating to
accounts included within the Deposits.
(d) INDEMNIFICATION. Each party shall indemnify the
other for any Losses incurred by such other party as a result
of such other party's compliance with instructions from the
first party pursuant to this Section 13.2 or as a result of the
failure of the first party to instruct such other party to take
action as required by this Section 13.2.
13.3 DATA PROCESSING. Home Savings shall, subject
to the provisions of Section 13.2, provide data processing
support to GreenPoint following the Closing in accordance with
the terms of the Data Processing Servicing Agreement that is
being entered into by the parties simultaneously with the
execution and delivery of this Agreement.
13.4 EFFECT OF TRANSITIONAL ACTION. Except as and
to the extent expressly set forth in this Article XIII, nothing
contained in this Article XIII shall be construed to be an
abridgement or nullification of the rights, customs, and
established practices under applicable banking laws and
regulations as they affect any of the matters addressed in this
Article XIII.
ARTICLE XIV
TERMINATION
14.1 EVENTS OF TERMINATION. This Agreement shall be
terminable and, if so terminated, shall be of no further force
47
or effect between the parties hereto, except (i) as to any li-
ability for breach of any duty, representation, warranty, cov-
enant or obligation arising prior to the date of termination,
or (ii) as to any post-termination obligations under Article 15
or Sections 7.1, 8.2, and 8.5, upon the occurrence of any of
the following events:
(a) By mutual written consent of Home Savings and
GreenPoint;
(b) By Home Savings, if any of the conditions set
forth in Article X or in Article XI have not been satisfied by
January 31, 1996;
(c) By GreenPoint, if any of the conditions set
forth in Article IX or in Article XI have not been satisfied by
January 31, 1996;
(d) By either party, if the other party has failed
to disclose in writing pursuant to Section 3.12 or Section 4.7,
as the case may be, facts known to it that could have an ad-
verse effect on its ability to obtain all requisite regulatory
consents or to perform its obligations under this Agreement;
(e) By either party if a representation or warranty
of the other party is or becomes false or inaccurate or if the
other party fails to comply with a covenant in a timely manner,
provided that such breach is material to the value or condition
of the Branches, the Assets or the Liabilities or such breach
has a material impact on the other party's ability to consum-
mate the transactions contemplated hereby; or
(f) By either party, if the OTS, the NY Banking Au-
thority, the FDIC, or any other governmental agency having ju-
risdiction over the transactions contemplated by this Agreement
notifies Home Savings or GreenPoint in writing of its final
determination that it will refuse to grant an approval or
consent to any material element of the transaction necessary to
the consummation thereof.
14.2 MANNER OF TERMINATION. Notwithstanding any-
thing to the contrary herein contained, neither party hereto
shall have the right to terminate this Agreement on account of
its own breach or any immaterial breach by the other party
hereto. If a party hereto desires to terminate this Agreement
pursuant to any right under this Article, such termination
shall be ineffective unless notice is given in writing to the
other party five (5) Business Days prior to the date of termi-
nation.
48
ARTICLE XV
INDEMNIFICATION
15.1 INDEMNIFICATION BY BOTH PARTIES. GreenPoint
and Home Savings mutually agree to indemnify and hold each
other harmless from, and to reimburse each other promptly for,
any and all Losses that one party may suffer as the result of
(i) the material breach of any provision of this Agreement by
the other, (ii) prior to the Closing, the inaccuracy of the
other party's representations or warranties; or (iii) any
liabilities of the other not expressly assumed hereunder or
pursuant to any agreement or other document delivered at the
Closing.
15.2 INDEMNIFICATION BY HOME SAVINGS. Home Savings
shall indemnify, hold harmless and defend GreenPoint from and
against any and all Losses arising out of any actions, suits,
or other proceedings, claims or demands brought by any bona
fide third party unaffiliated with GreenPoint, which arise out
of, or are in any way related to, any of the Assets or
Liabilities, provided that the injury or loss underlying such
action, suit, proceeding, claim or demand was actually suffered
or incurred by such third party prior to the Closing, and
provided further that Home Savings shall have no obligation to
indemnify GreenPoint with respect to any matter described in
Section 15.3(b). Home Savings shall indemnify, hold harmless
and defend GreenPoint from and against any and all Losses from
any claim for payment of a broker's or finder's fee or any
other commission or similar fee to any agent, broker,
investment banker, person or firm acting on behalf of or under
authority of Home Savings, including CS First Boston
Corporation, or acting pursuant to any statement,
representation or agreement of Home Savings.
15.3 INDEMNIFICATION BY GREENPOINT.
(a) GreenPoint shall indemnify, hold harmless and
defend Home Savings from and against any and all Losses arising
out of any actions, suits or other proceedings, claims or de-
mands which arise out of, or are in any way related to, any of
the Assets or Liabilities, other than actions, suits or other
proceedings, claims or demands based upon injuries or losses
actually suffered or incurred prior to the Closing by any bona
fide third party unaffiliated with GreenPoint. GreenPoint
shall indemnify, hold harmless and defend Home Savings from and
against any and all Losses from any claim for payment of
broker's or finder's fee or any other commission or similar fee
49
to any agent, broker, investment banker, person or firm acting
on behalf of or under authority of GreenPoint, including J.P.
Morgan & Co. Incorporated, or acting pursuant to any statement,
representation or agreement of GreenPoint.
(b) Notwithstanding the foregoing, GreenPoint shall
indemnify, hold harmless and defend Home Savings from and
against any and all Losses arising out of any actions, suits or
other proceedings, claims or demands, which arise out of, or
are in any way related to, (i) the existence of Hazardous Sub-
stances in, on, upon, about, beneath or migrating or threaten-
ing to migrate to or from any of the Branches, or (ii) condi-
tions at any of the Branches that constitute a violation of any
Environmental Law; provided, however, that this provision shall
not require indemnification of any amounts Home Savings is re-
quired to pay to GreenPoint pursuant to Section 8.2.
(c) GreenPoint shall indemnify, hold harmless and
defend Home Savings from and against any and all Losses
suffered as a result of any failure to give any notice to
Region Employees pursuant to the WARN Act.
ARTICLE XVI
MISCELLANEOUS
16.1 NON-SURVIVAL. The representations and warran-
ties of GreenPoint and Home Savings set forth herein shall not
survive the Closing. Notwithstanding any other provision of
this Agreement, neither Home Savings nor GreenPoint shall have
any liability to the other following the Closing for any breach
of any representation or warranty set forth herein.
16.2 TAXES; EXPENSES AND PRORATIONS.
(a) Each party hereto shall pay its own expenses,
including attorneys' fees and filing or other fees payable in
connection with all applications, notification and report forms
and notices to be filed pursuant to Section 8.1.
(b) All prepaid expenses, property taxes and as-
sessments with respect to the Assets and Liabilities shall be
prorated between the parties based on the full amount of the
latest available property tax or other expense bills on the
basis of a three hundred and sixty-five (365) day year as of
the Close of Business on the Closing Date. All operating ex-
penses related to the Branches, including, but not limited to,
utility, maintenance and service expenses attributable to op-
erations until the Close of Business on the Closing Date shall
50
be paid by Home Savings; all such expenses (or reimbursement
for items prepaid by Home Savings) attributable to operations
after the Close of Business on the Closing Date shall be paid
by GreenPoint.
(c) All fees for the Title Commitments and Title
Policies and other title or survey fees, expenses or charges,
shall be paid by GreenPoint.
(d) All recording and documentary transfer taxes,
sales, transfer, use, stamp, excise, and similar taxes payable
or arising as a result of this Agreement or the consummation of
the transactions contemplated hereby, including, without
limitation, the New York State Real Estate Transfer Tax and New
York City Real Property Transfer Tax, if any, payable in
connection with the transfer of the Owned Branches, Leased
Branches, Real Property and other Assets to GreenPoint at the
Closing, shall be paid by Home Savings, subject to Schedule
16.2. The New York State Real Property Transfer Gains Tax, if
any, payable in connection with the transfer of the Owned
Branches, Leased Branches, Real Property and other Assets to
GreenPoint at the Closing, shall be paid by Home Savings.
GreenPoint shall respond to Home Savings' written request for a
New York State Real Property Transfer Gains Tax Transferee
Questionnaire within five business days or as soon as
practicable after receipt of such request.
(e) The party customarily responsible for taxes set
forth in subsection (d) under applicable law for the filing of
related returns shall file such returns and provide the other
with copies of all relevant tax filings and related documents
and the other party shall cooperate relating thereto. The
party responsible for the payment of such taxes shall indemnify
and hold harmless the other (pursuant to the procedures of
Article XV) from and against any such taxes due, including
those arising upon subsequent audit by a taxing authority,
including interest and penalties.
(f) This Section shall survive the consummation of
the transactions contemplated by this Agreement.
16.3 NOTICES. Any notice or other communication
required or permitted hereunder shall be sufficiently given if
sent by registered, certified or first class United States
mail, postage prepaid, by reputable overnight private delivery
service generally used for business purposes, or by personal
delivery, addressed as follows:
51
If to Home Savings:
Home Savings of America, FSB
4900 Rivergrade Road
Irwindale, California 91706
Attention: Verne Kline
Corporate Development
With copies to:
Legal Department
Home Savings of America, FSB
4900 Rivergrade Road
Irwindale, California 91706
Attention: General Counsel
Munger, Tolles & Olson
355 South Grand Avenue
35th Floor
Los Angeles, California 90071-1560
Attention: John B. Frank, Esq.
If to GreenPoint:
GreenPoint Bank
41-60 Main Street
Flushing, New York 11355
Attention: General Counsel
With a copy to:
Watchell, Lipton, Rosen & Katz
512 West 52nd Street
New York, New York 10019
Attention: Craig M. Wasserman, Esq.
or such other address as shall be furnished in writing by
either party, and such notice or communication shall be deemed
to have been received as of three (3) Business Days after the
date so mailed if sent by United States mail, one (1) Business
Day after the date sent if sent by overnight delivery service,
or on the date so delivered if delivered in person.
52
16.4 ENTIRE AGREEMENT; MODIFICATIONS; WAIVERS;
HEADINGS; AMBIGUITIES. This Agreement, including all exhibits
and schedules hereto, and the Data Processing Servicing
Agreement constitute the entire agreement between the parties
hereto pertaining to the subject matter hereof and supersede
all prior agreements and understandings of the parties, whether
oral or written, in connection therewith. No modification of
this Agreement shall be binding unless executed in writing by
the parties hereto. No waiver of any provision of this
Agreement shall be deemed or shall constitute a waiver of any
other provision hereof (whether or not similar) nor shall such
waiver constitute a continuing waiver. Article, section and
subsection headings are not considered part of this Agreement,
are solely for convenience of reference, and are not intended
to be full or accurate descriptions of the contents of any
section or subsection. Each party hereto has been represented
by legal counsel in the review and revision of this Agreement
and each party agrees that any rule of construction to the
effect that ambiguities are to be resolved against the drafting
party shall not apply in interpreting this Agreement.
16.5 SUCCESSORS AND ASSIGNS. All of the terms,
obligations and provisions of this Agreement shall be binding
upon and inure to the benefit of the parties hereto and their
respective transferees, successors and assigns, but rights
under this Agreement may not be assigned and duties hereunder
may not be delegated by either party without the written
consent of the other, and any such assignment or delegation
shall be void and of no force or effect.
Notwithstanding the foregoing, GreenPoint may at any
time designate one or more of its affiliates (whether now
existing or hereafter organized) to acquire the Assets
hereunder in lieu of GreenPoint; provided, however, that no
such change shall adversely affect, in the reasonable opinion
of Home Savings, the tax treatment to Home Savings of the
transactions contemplated hereby, or materially delay receipt
of or require any different or additional regulatory approvals
necessary for the consummation of the transactions contemplated
hereby; provided, further, that no such change shall discharge
GreenPoint from any obligations or liabilities to Home Savings
hereunder.
16.6 COUNTERPARTS. This Agreement may be executed
in counterparts, all of which taken together shall constitute
one original instrument.
16.7 GOVERNING LAW. This Agreement shall be gov-
erned by federal law, including laws and regulations governing
the operation of federal savings institutions. To the extent
federal law is not applicable, the governing law applicable to
53
this Agreement shall be the law of the State of New York
applicable to contracts made and to be performed within the
State of New York by residents of the State of New York.
16.8 TIME IS OF THE ESSENCE. Time is of the essence
of this Agreement.
16.9 REMEDIES. Each party acknowledges that the
other will have no adequate remedy at law if the first party
fails to perform its obligations hereunder, and each party
therefore confirms that the other's right to specific
performance of the terms of this Agreement is essential to
protect the rights and interests of the other. Accordingly, in
addition to any other remedies that the parties may have at law
or in equity, each party shall have the right to have the
other's obligations under this Agreement specifically performed
by the other, and shall have the right to obtain preliminary
and permanent injunctive relief to secure specific performance
and to prevent a breach or contemplated breach of this
Agreement.
16.10 ATTORNEYS' FEES. If any action at law or in
equity, including an action for declaratory relief, is brought
to enforce or interpret the provisions of this Agreement, the
prevailing party shall be entitled to recover reasonable
attorneys' fees from the other party, which fees shall be in
addition to any other relief which may be awarded.
16.11 SEVERABILITY. If any provision of this
Agreement or the application of any such provision to any per-
son or circumstance shall be held invalid, illegal or unen-
forceable in any respect by a court of competent jurisdiction,
such
54
invalidity, illegality or unenforceability shall not affect any
other provision hereof.
IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be executed by their duly authorized officers
as of the day and year first above written.
GREENPOINT BANK HOME SAVINGS OF AMERICA, FSB
By: /s/ Thomas S. Johnson By: /s/ Kevin M. Twomey
Its: Chairman Its: Chief Financial Officer
55
[Exhibits and schedules omitted]