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EXHIBIT 10.2
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PURCHASE AND ASSUMPTION AGREEMENT
BY AND BETWEEN
THE BANK OF NEW YORK COMPANY, INC.
AND
JPMORGAN CHASE & CO.
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DATED AS OF APRIL 7, 2006
AMENDED AND RESTATED AS OF OCTOBER 1, 2006
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TABLE OF CONTENTS
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ARTICLE I
DEFINITIONS; CONSTRUCTION
Section 1.1 Definitions....................................................2
Section 1.2 Other Definitions.............................................17
Section 1.3 Construction; Absence of Presumption..........................21
Section 1.4 Heading.......................................................22
ARTICLE II
PURCHASE AND SALE OF CORPORATE TRUST BUSINESS
Section 2.1 Purchase and Sale of Corporate Trust Assets...................22
Section 2.2 Assumption of Corporate Trust Liabilities.....................27
Section 2.3 Corporate Trust Liabilities under this Agreement and
the Corporate Trust Related Agreements........................29
Section 2.4 Untransferrable Appointments..................................29
ARTICLE III
PURCHASE AND SALE OF BANKING BUSINESS
Section 3.1 Purchase and Sale of Banking Business.........................29
Section 3.2 Assumption of Banking Liabilities.............................35
Section 3.3 Arrangements with Respect to IRAs and ▇▇▇▇▇...................36
ARTICLE IV
PURCHASE PRICE AND ADJUSTMENTS
Section 4.1 Corporate Trust Closing Payment...............................37
Section 4.2 Corporate Trust Post-Closing Payments.........................38
Section 4.3 Banking Closing Payment.......................................40
Section 4.4 Banking Post-Closing Payment..................................41
Section 4.5 Adjustment to Payments for Expenses, Prepayments and Fees.....43
Section 4.6 Allocation of Purchase Price..................................44
ARTICLE V
THE CLOSING
Section 5.1 Closing Time and Place........................................46
Section 5.2 Closing Documents.............................................46
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Section 5.3 Delivery of Assets............................................49
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF JPM RELATING TO CORPORATE TRUST
Section 6.1 Organization..................................................49
Section 6.2 Authority; Capacity...........................................50
Section 6.3 No Conflict; Defaults.........................................51
Section 6.4 Consents and Approvals........................................51
Section 6.5 Litigation and Related Matters................................51
Section 6.6 Brokers.......................................................52
Section 6.7 Absence of Undisclosed Liabilities;
No Material Adverse Change....................................52
Section 6.8 Property and Equipment........................................52
Section 6.9 Necessary Corporate Trust Permits.............................52
Section 6.10 Purchased Corporate Trust IP & IT Assets......................53
Section 6.11 Governmental Notices..........................................53
Section 6.12 Corporate Trust Employees and Benefits........................54
Section 6.13 Labor Contracts and Relations.................................55
Section 6.14 Corporate Trust Agreements and
Other Corporate Trust Contracts...............................56
Section 6.15 Environmental Matters.........................................57
Section 6.16 Compliance with Laws..........................................58
Section 6.17 Corporate Trust Financial Information.........................58
Section 6.18 Books and Records.............................................59
Section 6.19 Corporate Trust Assets........................................59
Section 6.20 Leased Corporate Trust Premises...............................60
Section 6.21 Insurance Coverage............................................61
Section 6.22 Taxes.........................................................61
Section 6.23 No Prepayment.................................................63
Section 6.24 Information Regarding Corporate Trust Customers and
Relationships.................................................64
Section 6.25 No Other Representations or Warranties........................64
ARTICLE VII
REPRESENTATIONS AND WARRANTIES OF BNY RELATING TO CORPORATE TRUST
Section 7.1 Organization..................................................64
Section 7.2 Authority; Capacity...........................................64
Section 7.3 No Conflict; Defaults.........................................65
Section 7.4 Consents and Approvals........................................65
Section 7.5 Litigation and Related Matters................................65
Section 7.6 Compliance with Laws and Regulations..........................66
Section 7.7 Governmental Notices; Regulatory Matters......................66
Section 7.8 Brokers.......................................................66
Section 7.9 Financing.....................................................66
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ARTICLE VIII
REPRESENTATIONS AND WARRANTIES OF BNY RELATING TO BANKING
Section 8.1 Organization..................................................66
Section 8.2 Authority; Capacity...........................................67
Section 8.3 No Conflict; Defaults.........................................67
Section 8.4 Consents and Approvals........................................68
Section 8.5 Litigation and Related Matters................................68
Section 8.6 Brokers.......................................................68
Section 8.7 Absence of Undisclosed Liabilities;
No Material Adverse Change....................................68
Section 8.8 Property and Equipment........................................69
Section 8.9 Necessary Banking Permits.....................................69
Section 8.10 Assumed Banking Deposits......................................69
Section 8.11 Loans.........................................................70
Section 8.12 Letters of Credit; Derivative Products........................71
Section 8.13 Banking Contracts.............................................71
Section 8.14 Other Purchased Banking Assets................................72
Section 8.15 Purchased Banking IP & IT Assets..............................72
Section 8.16 Governmental Notices..........................................73
Section 8.17 Banking Employees and Benefits................................73
Section 8.18 Labor Contracts and Relations.................................74
Section 8.19 Investment Products; Personnel................................75
Section 8.20 Properties and Purchased Banking Assets.......................75
Section 8.21 Title.........................................................75
Section 8.22 Environmental Matters.........................................75
Section 8.23 Derivative Products...........................................77
Section 8.24 Compliance with Laws..........................................77
Section 8.25 Banking Financial Information.................................77
Section 8.26 Books and Records.............................................78
Section 8.27 Safe Deposit Boxes............................................78
Section 8.28 Banking Assets................................................78
Section 8.29 Leased Banking Premises.......................................78
Section 8.30 Owned Banking Premises........................................79
Section 8.31 Insurance Coverage............................................80
Section 8.32 Taxes.........................................................81
Section 8.33 Information Regarding Banking Customers and Relationships.....81
Section 8.34 No Other Representations or Warranties........................81
ARTICLE IX
REPRESENTATIONS AND WARRANTIES OF JPM RELATING TO BANKING
Section 9.1 Organization..................................................82
Section 9.2 Authority; Capacity...........................................82
Section 9.3 No Conflict; Defaults.........................................82
Section 9.4 Consents and Approvals........................................83
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Section 9.5 Litigation and Related Matters................................83
Section 9.6 Compliance with Laws and Regulations..........................83
Section 9.7 Governmental Notices; Regulatory Matters......................83
Section 9.8 Brokers.......................................................83
ARTICLE X
GENERAL COVENANTS
Section 10.1 Access to Properties and Records Relating to the
Corporate Trust Business......................................84
Section 10.2 Access to Properties and Records Relating to the
Banking Business..............................................84
Section 10.3 Efforts; Regulatory Filings and Other Actions.................85
Section 10.4 Further Assurances............................................88
Section 10.5 Advice of Changes.............................................88
Section 10.6 Exclusive Dealing.............................................89
Section 10.7 Confidentiality...............................................90
Section 10.8 Publicity; Notices............................................90
Section 10.9 Transfer of Economic Benefits.................................90
Section 10.10 Execution and Delivery of Related Agreements..................93
Section 10.11 Non-Competition and Non-Solicitation Agreements Relating to
Corporate Trust Business......................................93
Section 10.12 Non-Competition and Non-Solicitation Agreements Relating to
Banking and Other Businesses..................................95
Section 10.13 Updated Schedules.............................................99
Section 10.14 Transition Coordinators; Cooperation with Transition..........99
ARTICLE XI
FURTHER AGREEMENTS RELATING TO CORPORATE TRUST
Section 11.1 Conduct of the Corporate Trust Business Prior to the
Closing......................................................100
Section 11.2 Conduct of Corporate Trust Business After the Closing........102
Section 11.3 Corporate Trust Landlord Consents............................102
Section 11.4 Cooperation Regarding Transition of Products and Services....103
Section 11.5 UCC-1 Assignment and Other Documents.........................104
Section 11.6 Use of JPM's Names and Forms.................................104
Section 11.7 Transfer of Paying and Authenticating Agencies...............105
Section 11.8 Transfer of Nominee Name.....................................106
Section 11.9 Conversion and Conversion Plan...............................106
Section 11.10 Grant of FCS Sublicense......................................107
Section 11.11 Interest Reporting...........................................107
Section 11.12 Withholding..................................................107
Section 11.14 Intercompany Obligations.....................................108
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ARTICLE XII
FURTHER AGREEMENTS RELATING TO BANKING
Section 12.1 Conduct of the Banking Business Prior to the Closing.........108
Section 12.2 Conduct of Banking Business After the Closing................111
Section 12.3 Banking Landlord Consents....................................112
Section 12.4 Cooperation Regarding Transition of Products and Services;
Courier Contracts............................................113
Section 12.5 UCC-1 Assignment and Other Documents.........................113
Section 12.6 Interest Reporting...........................................113
Section 12.7 Withholding..................................................114
Section 12.8 Letters of Credit............................................114
Section 12.9 Form of Transfer.............................................114
Section 12.10 Data Processing Conversion for the Retail Branches and
Handling of Certain Items....................................114
Section 12.11 Physical Damage to Owned Banking Premises....................116
Section 12.12 Right of First Offer for Excluded Banking Premises...........116
Section 12.13 Termination of Agent Bank Agreement..........................119
Section 12.14 Limited License of BNY's Name................................119
Section 12.15 Bank-At-Work Arrangement; Sublease of Certain Employee
Branches.....................................................122
Section 12.16 Information Regarding Banking Customers and Relationships....122
Section 12.17 Private Banking Earnout......................................122
Section 12.18 Subpoena and Certain Process Matters.........................122
ARTICLE XIII
EMPLOYMENT AND BENEFIT MATTERS
Section 13.1 Corporate Trust Business.....................................124
Section 13.2 Banking Business.............................................131
ARTICLE XIV
TAX MATTERS
Section 14.1 Tax Indemnification..........................................137
Section 14.2 Preparation and Filing of Tax Returns........................138
Section 14.3 Refunds, Credits and Carrybacks..............................139
Section 14.4 Cooperation..................................................140
Section 14.5 Transfer Taxes...............................................140
▇▇▇▇▇▇▇ ▇▇.▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ VAT...........................................141
Section 14.7 VAT..........................................................142
Section 14.8 Coordination.................................................142
Section 14.9 Tax Treatment of Payments....................................143
Section 14.10 Limitations and Survival.....................................143
Section 14.11 Tax-Deferred Exchange........................................143
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ARTICLE XV
CLOSING CONDITIONS
Section 15.1 Conditions to Obligations of Each Party to Close.............143
Section 15.2 Conditions to Obligation of BNY to Close.....................143
Section 15.3 Conditions to Obligation of JPM To Close.....................144
ARTICLE XVI
TERMINATION
Section 16.1 Termination..................................................146
Section 16.2 Effect of Termination........................................146
ARTICLE XVII
INDEMNIFICATION
Section 17.1 Survival of Representations and Warranties...................147
Section 17.2 Indemnification of BNY Indemnified Parties...................147
Section 17.3 Indemnification of JPM Indemnified Parties...................148
Section 17.4 Claims.......................................................149
Section 17.5 Limitations on Indemnity.....................................149
Section 17.6 Mitigation...................................................152
Section 17.7 Remedies Exclusive...........................................152
ARTICLE XVIII
MISCELLANEOUS
Section 18.1 Entire Agreement; Amendment..................................152
Section 18.2 Binding Effect; Assignment; No Third-Party Beneficiaries.....153
Section 18.3 Counterparts.................................................153
Section 18.4 Notices......................................................153
Section 18.5 Provisions Separable.........................................154
Section 18.6 Expenses.....................................................154
Section 18.7 Deadlines....................................................154
Section 18.8 Scope of Agreements..........................................155
Section 18.9 Delays or Omissions..........................................155
Section 18.10 Waiver of Jury Trial.........................................155
Section 18.11 Governing Law................................................155
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SCHEDULES AND EXHIBITS
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Schedules
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JPM Disclosure Schedules
BNY Disclosure Schedules
Schedule A
Schedule B
Annexes
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Annex A Amended and Restated Schedules
Annex B Allocation Schedule for Corporate Trust Retention
Annex C Allocation Schedule for Banking Retention
Exhibits
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Exhibit A Corporate Trust Transition Services Agreement
Exhibit B Banking Transition Services Agreement
Exhibit C Servicing Agreement
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This AMENDED AND RESTATED PURCHASE AND ASSUMPTION AGREEMENT
(this "Agreement"), dated as of October 1, 2006 (the "Execution Date"),
is by and between The Bank of New York Company, Inc., a New York
corporation ("BNY"), and JPMorgan Chase & Co., a Delaware corporation
("JPM").
RECITALS
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WHEREAS, BNY and JPM entered into that certain Purchase and
Assumption Agreement (the "Original Purchase Agreement"), dated as of
April 7, 2006 (the "Original Execution Date"), pursuant to which (a) JPM
agreed to sell (or to cause its applicable Subsidiaries to sell) certain
assets of the Corporate Trust Business to BNY, and BNY agreed to assume
certain liabilities and obligations of the Corporate Trust Business from
JPM and its applicable Subsidiaries, and (b) BNY agreed to sell (or to
cause its applicable Subsidiaries to sell) certain assets of the Banking
Business to JPM, and JPM agreed to assume certain liabilities and
obligations of the Banking Business from BNY and its applicable
Subsidiaries;
WHEREAS, concurrently with the execution of the Original
Purchase Agreement, the parties entered into that certain Transition
Services Agreement, dated as of April 7, 2006, for the Corporate Trust
Business (the "Original Corporate Trust Transition Services Agreement")
and a Transition Services Agreement, dated as of April 7, 2006, for the
Banking Business (the "Original Banking Transition Services Agreement");
WHEREAS, BNY and JPM desire to amend and restate the Original
Purchase Agreement in the form of this Agreement in order to, among other
things, amend the terms and conditions on which: (a) the assets and
liabilities of the Corporate Trust Business will be transferred from JPM
or its applicable Subsidiary to BNY (the "Corporate Trust Sale"); and
(b) the assets and liabilities of the Banking Business will be
transferred from BNY or its applicable Subsidiary to JPM (the "Banking
Sale");
WHEREAS, concurrently with the execution of this Agreement,
the parties desire to enter into (a) an Amended and Restated Transition
Services Agreement for the Corporate Trust Business, in the form attached
hereto as Exhibit A (the "Corporate Trust Transition Services
Agreement"), which Corporate Trust Transition Services Agreement shall
replace the Original Corporate Trust Transition Services Agreement, (b) a
Servicing Agreement, in the form attached hereto as Exhibit C (the
"Servicing Agreement" and together with the Corporate Trust Transition
Services Agreement, the "Corporate Trust Related Agreements"), and (c) an
Amended and Restated Transition Services Agreement for the Banking
Business, in the form attached hereto as Exhibit B (the "Banking
Transition Services Agreement" or "Banking Related Agreement" and
together with the Corporate Trust Related Agreements, the "Related
Agreements"), which Banking Transition Services Agreement shall replace
the Original Banking Transition Services Agreement; and
WHEREAS, the parties intend that (a) all references in this
Agreement to "the date hereof" or "the date of this Agreement" shall
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refer to the Original Execution Date, and (b) the date on which the
representations, warranties and covenants made by any party to this
Agreement shall not change as a result of the execution of this Agreement
and shall be made as of such dates as they were in the Original Purchase
Agreement, in each of cases (a) and (b), except as otherwise expressly
indicated in this Agreement (including in the proviso of the definition
of "Corporate Trust Business" and in Sections 6.2, 7.2, 8.2 and 9.2).
NOW, THEREFORE, in consideration of and subject to each of
the covenants, representations, warranties, terms and conditions
hereinafter set forth, the receipt and sufficiency of which are hereby
acknowledged, the parties, intending to be legally bound, hereby agree as
follows:
ARTICLE I
DEFINITIONS; CONSTRUCTION
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Section 1.1 Definitions. For purposes of this Agreement,
the following terms shall have the following meanings:
"Accrued Interest" shall mean (i) with respect to the Assumed
Banking Deposits, the interest, dividends, fees, costs, and other charges
that have been accrued on but not been paid, credited or charged to the
Assumed Banking Deposits; and (ii) with respect to the Purchased Banking
Assets, the interest, dividends, fees, costs, and other charges that have
been accrued on but not been paid, credited or charged to the Purchased
Banking Assets, in each case as set forth in BNY's general ledger.
"Affiliate" shall mean, with respect to any Person, any other
Person that directly, or through one or more intermediaries, controls or
is controlled by or is under common control with such Person. For
purposes of this definition, the term "control" (including, with
correlative meanings, the terms "controlled by" and "under common control
with"), as used with respect to any Person, shall mean the possession,
direct or indirect, of the power to direct or cause the direction of the
management and policies of such Person, directly or indirectly, whether
through the ownership of voting securities, by contract or otherwise.
"Agreement" shall mean this Purchase and Assumption
Agreement, including the Schedules hereto, as may be amended and/or
restated from time to time.
"ALTA" shall mean the American Land Title Association.
"Applicable Buyer" shall mean JPM in the case of the Banking
Business and BNY in the case of the Corporate Trust Business.
"Applicable Law" shall mean any statute, whether Federal,
state or local, any treaty, any other law, rule or regulation or formal
interpretive letter of any Governmental Authority, any applicable common
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law and any order, decree, injunction, judgment, ruling, or writ of any
Governmental Authority, or award of any arbitrator applicable in the
United States of America or any other country.
"Applicable Seller" shall mean BNY in the case of the Banking
Business and JPM in the case of the Corporate Trust Business.
"Appointment" shall mean each appointment of JPM or any of
its Subsidiaries to act in a Corporate Trust Capacity under any of the
Corporate Trust Agreements.
"Assign" (including, with correlative meanings, "Assigned,"
"Assigning" and "Assignment") shall mean, with respect to any
Appointment, the legal transfer to BNY as successor to JPM or any of its
Subsidiaries of, and succession of BNY as successor to JPM or any of its
Subsidiaries to, all rights, interests, obligations and duties of JPM or
its Subsidiary, as applicable, in its Corporate Trust Capacity under the
related Corporate Trust Agreements in all respects thereunder (a) by
relationship appointment actions or transfers created or completed
pursuant to a Tri-Partite Agreement, (b) pursuant to any applicable
statutory "bulk transfer," "fiduciary substitution" or similar statutory
process available for transferring or accomplishing Appointments of
fiduciary, trust, or any relationships and/or duties, or (c) pursuant to
provisions of the Corporate Trust Agreements relating to such Appointment
that under Applicable Law permit assignment thereof by JPM or its
Subsidiary, as applicable, without consent, upon sale or transfer of all
or substantially all of JPM's or such Subsidiary's Corporate Trust
Business, assets or relationships, or similar provisions, as applicable,
or automatic or unilateral relationship transfer and succession to the
purchaser or transferee.
"Assumed Banking Deposits" shall mean all deposits (as
defined in 12 U.S.C. Section 1813(l)) that are held by BNY or any of its
Subsidiaries in connection with the Banking Business, including demand
deposits, commercial deposits with interest, savings accounts, money
market deposit accounts, mutual fund and reserve fund sweep accounts,
negotiable order of withdrawal accounts, certificates of deposit,
business investment accounts and, subject to Section 3.3, ▇▇▇ and ▇▇▇▇▇
Accounts, in each case including, without limitation, any such deposits
received by BNY or any of its Subsidiaries from and after the date hereof
(and consistent with Section 12.1 of this Agreement) through the Close of
Business on the Closing Date, but excluding (i) brokered deposits of BNY
and its Subsidiaries held by BNY's treasury department and (ii) other
proprietary deposits of BNY and its Subsidiaries held in Banking
Branches.
"Banking Branches" shall mean the branches identified on
Schedule 1.1(a).
"Banking Business" shall mean the following businesses, in
each case as conducted by BNY or the relevant Subsidiary of BNY as of the
date hereof: (i) the business conducted through BNY's branch banking
locations, and consumer banking (including deposit taking, lending,
securities brokerage, insurance brokerage and other consumer banking
business conducted in the branch banking locations) serving the mass
retail market, in New York, New Jersey and Connecticut, including the
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business relating to the Assigned Banking Loans and the deposits set
forth on Schedule 8.10; (ii) Middle Market Commercial Lending;
(iii) Regional Real Estate Lending; and (iv) the Purchased CRA Loans;
provided, however, that the term "Banking Business" shall not include any
Excluded BNY Business.
"Banking Business Employee" shall mean, as of any particular
date: (i) all persons actively employed as of such date by BNY or any of
its Affiliates principally in connection with the Banking Business
(including any such persons who are not in the business line); and (ii)
all persons employed as of such date by BNY or any of its Affiliates
principally in connection with the Banking Business (including any such
persons who are not in the business line) who are absent from work with
the Banking Business on account of vacation, sickness, short-term
disability or leave of absence or for whom an obligation to recall,
rehire or otherwise return to employment exists under a contractual
obligation or law; provided, however, that "Banking Business Employee"
shall not include those employees of BNY or any of its Affiliates
identified as "Excluded Banking Business Employees" on Schedule 1.1(b).
"Banking Conversion" shall mean the conversion of BNY's
processing, reporting, payment and other systems associated with the
Banking Business from the systems of BNY to the systems of JPM.
"Banking Landlord Consent" shall mean the consent (or waiver)
of a landlord under a Banking Lease as shall be required pursuant to the
terms of such Banking Lease to assign or sublease the Leased Banking
Premises to JPM or its designated Subsidiary.
"Banking Material Adverse Effect" shall mean (a) any change
or effect that is materially adverse to the Purchased Banking Assets or
the Assumed Banking Liabilities, or to the results of operations or
financial condition of the Banking Business, in each case taken as a
whole, excluding any such change or effect to the extent arising out of
or in connection with or resulting from: (i) general political, economic
or business conditions or changes therein (including the outbreak or
escalation of hostilities or acts of terrorism to the extent not directly
impacting facilities or systems of the Banking Business); (ii) general
financial and capital market conditions, including interest rates, or
changes therein; (iii) general industry conditions affecting banks;
(iv) changes in law, GAAP or regulatory accounting principles, or
authoritative interpretations thereof, after the date of this Agreement;
or (v) any action or omission required to be taken or omitted to be taken
pursuant to the express terms of this Agreement or any change or
circumstance (including any loss of business, accounts, employees,
clients, customers or other business relationships) to the extent
resulting from the public announcement of this Agreement, the execution
of this Agreement or the transactions contemplated hereby; or (b) a
material adverse change in, or effect on, the ability of BNY to timely
consummate the Banking Sale and the related transactions contemplated
hereby.
"Banking-Related Services" shall mean banking and banking-
related services, brokerage, custody, financial planning, estate
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planning, tax planning, liquidity management, lending, investment
advisory, asset management and trust and fiduciary services.
"Banking Straddle Period" shall mean any taxable period
beginning prior to and ending after the Closing Date.
"BNY Material Adverse Effect" shall mean a material adverse
change in, or effect on, the ability of BNY to timely consummate the
transactions contemplated hereby.
"BNY Money Market Funds" shall mean registered money market
funds sponsored or managed by BNY or any of its Subsidiaries.
"BNY Private Banking Client" shall mean client of BNY's
Private Banking Division as of the Closing.
"BSA" shall mean the Bank Secrecy Act, 31 U.S.C.
Section 5312(a)(2)(A)-(X).
"Business Day" shall mean any day excluding Saturday, Sunday
and any day on which banking institutions located in New York, New York
are authorized or required by Applicable Law or other governmental action
to be closed.
"Close of Business" shall mean the local time that the
Banking Branches close to the public.
"Code" shall mean the Internal Revenue Code of 1986, as
amended.
"Comparable Job Offer" shall mean an offer of employment that
(i) is for a position requiring substantially comparable skills and
abilities as the employee's position immediately prior to the Closing
Date (it being understood that whether a position is managerial or non-
managerial shall not in of itself preclude an offer from being a
Comparable Job Offer), (ii) includes annual base salary or weekly or
hourly rate of pay that is substantially the same as or better than such
individual's salary or rate of pay as in effect immediately prior to the
Closing Date, (iii) includes an annual incentive opportunity that (A)
with respect to the portion of the 2006 performance year that occurs
prior to the Closing Date, is substantially the same as or better than
such individual's incentive opportunity as in effect immediately prior to
the Closing Date, and (B) with respect to all periods thereafter is
substantially the same as the annual incentive opportunity provided to
similarly situated employees (both by job classification or status and by
geographic location) of BNY in the case of the Corporate Trust Business
Employees and JPM in the case of the Banking Business Employees, (iv) is
at a work location not more than thirty-five (35) miles from such
employee's work location immediately prior to the Closing Date, and (v)
includes a work status (full or part-time) that is not changed from that
in effect immediately prior to the Closing Date.
"Confidentiality Agreement" shall mean the confidentiality
agreement, dated as of June 30, 2005, by and between JPM and BNY.
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"Contract" shall mean any written agreement, contract,
arrangement, bond note, commitment, franchise, indemnity, indenture,
instrument, lease or license, together with any exhibits, schedules or
documents executed or delivered in connection therewith and any
modifications, amendments, restatements or other supplements thereto.
"Controlled Group Liability" shall mean any and all
liabilities (i) under Title IV of ERISA, (ii) under section 302 of ERISA,
(iii) under sections 412 and 4971 of the Code, and (iv) as a result of a
failure to comply with the continuation coverage requirements of section
601 et seq. of ERISA and section 4980B of the Code.
"Corporate Trust Business" shall mean the following
businesses, in each case substantially as conducted by JPM or the
relevant Subsidiary of JPM (including the Transferred Entities) as of the
date hereof:
(1) in the United States, providing (whether directly or
under the name of another bank or trust company through a private
label relationship) corporate trust and agency services for
corporate, municipal, governmental agency and other issuers of debt
and asset-backed, mortgage-backed, collateralized debt obligation,
trust preferred, commercial paper issued by municipalities in the
United States, project finance, Eurobonds, repacks, conduits,
structured investment vehicles (SIV) and other securities under
various indentures, agreements and resolutions, including providing
investment execution, document custody, master servicing, common
and specialized depositary, bond analytics, debt defeasance and
other escrow services in conjunction with acting in a capacity
otherwise included in the Corporate Trust Business, and other
related services, all as provided in a Corporate Trust Capacity as
currently conducted by the conventional debt, structured finance,
and collateralized debt structures of the CDO sections of JPM's
Worldwide Securities Services business;
(2) in the United States, serving as loan agency,
collateral agent and other specialty agencies arising in a
Corporate Trust Capacity as currently conducted by the Asset
Servicing Division of JPM's Worldwide Securities Services business;
(3) outside of the United States, providing the services
described in clauses (1) or (2) above (or the equivalent thereof in
the applicable jurisdiction), except as limited to the United
States therein; and
(4) in Europe, providing in a Corporate Trust Capacity
commercial paper and certificates of deposit issuing and paying
agency services for issuers of commercial paper and certificates of
deposit in Europe, as currently conducted by JPM's Worldwide
Securities Services business;
provided, however, that "Corporate Trust Business" shall not include any
Excluded JPM Business, and each reference in this Agreement to "as of the
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date hereof" shall be a reference to the Execution Date with respect to
that portion of the Corporate Trust Business described in clause (4).
"Corporate Trust Business Employee" shall mean, as of any
particular date: (i) all persons actively employed as of such date by JPM
or any of its Affiliates principally in connection with the Corporate
Trust Business (including any such persons who are not in the business
line); and (ii) all persons employed as of such date by JPM or any of its
Affiliates principally in connection with the Corporate Trust Business
(including any such persons who are not in the business line) who are
absent from work with the Corporate Trust Business on account of
vacation, sickness, short-term disability or leave of absence or for whom
an obligation to recall, rehire or otherwise return to employment exists
under a contractual obligation or law; provided, however, that "Corporate
Trust Business Employee" shall not include those employees of JPM or any
of its Affiliates identified as "Excluded Corporate Trust Business
Employees" on Schedule 1.1(c).
"Corporate Trust Capacity" shall mean acting in a trustee,
registrar, agency, custodial or other similar capacity under a Corporate
Trust Agreement, and any rights or duties arising from, or the provision
of any services in connection with, any such capacities.
"Corporate Trust Conversion" shall mean the conversion of the
trust assets and Securities accounting information of the Corporate Trust
Business from the systems of JPM to the systems of BNY and matters
related thereto and the conversion to BNY's system of the software,
technology applications and IT assets related to the Corporate Trust
Business acquired by or sub-licensed to BNY pursuant to this Agreement,
as more fully described in the Corporate Trust Transition Services
Agreement.
"Corporate Trust Landlord Consent" shall mean the consent (or
waiver) of a landlord under a Corporate Trust Lease as shall be required
pursuant to the terms of such Corporate Trust Lease to assign or sublease
the Leased Corporate Trust Premises to BNY or its designated Subsidiary.
"Corporate Trust Material Adverse Effect" shall mean (a) any
change or effect that is materially adverse to the Purchased Corporate
Trust Assets or the Assumed Corporate Trust Liabilities, or to the
results of operations or financial condition of the Corporate Trust
Business, in each case taken as a whole, excluding any such change or
effect to the extent arising out of or in connection with or resulting
from: (i) general political, economic or business conditions or changes
therein (including the outbreak or escalation of hostilities or acts of
terrorism to the extent not directly impacting facilities or systems of
the Corporate Trust Business); (ii) general financial and capital market
conditions, including interest rates, or changes therein; (iii) general
industry conditions affecting businesses providing corporate trust and
agency services; (iv) changes in law, GAAP or regulatory accounting
principles, or authoritative interpretations thereof, after the date of
this Agreement; or (v) any action or omission required to be taken or
omitted to be taken pursuant to the express terms of this Agreement or
any change or circumstance (including any loss of business, accounts,
16
employees, clients, customers or other business relationships) to the
extent resulting from the public announcement of this Agreement, the
execution of this Agreement or the transactions contemplated hereby; or
(b) a material adverse change in, or effect on, the ability of JPM to
timely consummate the Corporate Trust Sale and the related transactions
contemplated hereby.
"Corporate Trust Money Fund Balances" shall mean custodial
assets of the corporate trust business of BNY after the Closing that JPM
manages off-balance sheet in money market funds.
"Corporate Trust Straddle Period" shall mean any taxable
period beginning prior to and ending after the Closing Date.
"CRA" shall mean the Community Reinvestment Act of 1977, as
amended.
"CRA Loans" shall mean CRA-eligible residential mortgage
loans originated and/or held by BNY and its Subsidiaries.
"Custodial Assets" shall mean the cash (on hand or held in
bank accounts or money market funds pursuant to or in connection with a
Corporate Trust Agreement), funds (including securities repurchase
agreements, time deposits and other deposits and other investments in
which funds might be invested on a short-term basis), mortgages (together
with mortgage collateral), guarantees, tangible and intangible assets,
receivables, securities, instruments, UCC financing statements, letters
of credit and other property of any type or description (including
insurance policies covering principal, premium and interest payments and
indemnification in respect of lost, stolen or mutilated securities,
property held as collateral or security and letters of credit, notes of
obligors, bond insurance policies, securities, derivatives, guaranteed
investment contracts, and other credit enhancement documents) held by JPM
or any of its Subsidiaries as agent or fiduciary pursuant to a Corporate
Trust Agreement except the following: (A) cash subject to escheatment as
of the Closing Date relating to the Corporate Trust Business; and
(B) cash to the extent relating to the Corporate Trust Business covering
outstanding checks for registered and bearer principal and interest on
accounts administered by JPM or any of its Subsidiaries issued less than
six months prior to the Closing.
"Damages" shall mean all actions, costs, damages,
disbursements, obligations, penalties, liabilities, losses, expenses,
assessments, judgments, settlements or deficiencies (including any
interest, penalties, investigation, legal, accounting and other out-of-
pocket costs and expenses incurred in the investigation, collection,
prosecution and defense of any action, suit, proceeding or claim and
amounts paid in settlement, but not including indirect, incidental,
exemplary, special, consequential or punitive damages that are imposed
upon or otherwise incurred by the indemnified party except for any
indirect, incidental, exemplary, special, consequential or punitive
damages awarded by any Governmental Authority or arbitrator, and actually
paid, to any unrelated person in an action, arbitration or other
proceeding).
17
"Disclosure Schedule" shall mean, with respect to JPM or BNY,
a schedule delivered by it or them to the other on or before the
execution and delivery of this Agreement setting forth, among other
things, items the disclosure of which is required under this Agreement,
either in response to an express disclosure requirement contained in a
provision of this Agreement or as an exception to one or more of the
representations and warranties or covenants contained in this Agreement;
provided that the mere inclusion of an item in a Disclosure Schedule as
an exception to a representation will not be considered an admission by
the disclosing party that such item (or any non-disclosed item or
information of comparable or greater significance) represents a material
exception or fact, event or circumstance or that such item has had or is
expected to result in a Corporate Trust Material Adverse Effect, a BNY
Material Adverse Effect, a Banking Material Adverse Effect or a JPM
Material Adverse Effect, as the case may be; provided, further, that an
item disclosed by either Party in such Party's Disclosure Schedule shall
be deemed to be a disclosure against any other representation, warranty
or covenant of such Party in this Agreement to the extent that the
relevance of such disclosure is reasonably apparent from the context of
such disclosure in such Party's Disclosure Schedule. The Schedules set
forth on Annex A are amended and restated as of the Original Execution
Date.
"DRs" shall mean American Depositary Receipts, Global
Depositary Receipts and similar depositary receipts administered under
Corporate Trust Agreements.
"Environment" shall mean any soil, surface waters, wetlands,
groundwaters, sediments, surface or subsurface strata, ambient air and
any other environmental medium.
"Environmental Law" shall mean any law, statute, regulation,
rule, ordinance, by-law, order or other binding decision of any
governmental entity, regarding health and safety as it relates to
Hazardous Materials or to the Environment.
"ERISA" shall mean the Employee Retirement Income Security
Act of 1974, as amended, and the regulations thereunder.
"ERISA Affiliate" shall mean, with respect to any entity,
trade or business, any other entity, trade or business that is a member
of a group described in Section 414(b), (c), (m) or (o) of the Code or
Section 4001(b)(1) of ERISA that includes the first entity, trade or
business, or that is a member of the same "controlled group" as the first
entity, trade or business pursuant to Section 4001(a)(14) of ERISA.
"Excluded Appointments" shall mean the Appointments
identified as such on Schedule 1.1(d).
"Excluded Banking Agreements" shall mean any Banking
Agreement that is listed on Schedule 1.1(e) under the heading "Excluded
Banking Agreements."
"Excluded Banking Premises" shall mean those Banking Branches
listed as such on Schedule 1.1(f).
18
"Excluded Banking Taxes" shall mean, for any Pre-Closing
Period, Taxes relating to the Purchased Banking Assets or the operation
of the Banking Business or the Assumed Banking Liabilities and shall
include, by way of example and not limitation, all income taxes (other
than Transfer Taxes) for any Pre-Closing Period payable with respect to
the purchase and assumption of the Banking Business contemplated by this
Agreement.
"Excluded Corporate Trust Taxes" shall mean, for any Pre-
Closing Period, Taxes relating to the Purchased Corporate Trust Assets or
the operation of the Corporate Trust Business or the Assumed Corporate
Trust Liabilities and shall include, by way of example and not
limitation, all income taxes (other than Transfer Taxes) for any Pre-
Closing Period payable with respect to the purchase and assumption of the
Corporate Trust Business contemplated by this Agreement, including
without limitation, (i) any Taxes payable as a result of a Section 338
election, or a check the box election that is effective on or prior to
the Closing Date, made in respect of any of the foreign entities
transferred by JPM, (ii) any income, corporate, or franchise Tax in
respect of the Transferred Entities or any of their respective
Subsidiaries, (iii) any Tax in respect of any affiliated, combined,
unitary, or similar group of which the Transferred Entities or any of
their respective Subsidiaries is or was at any time a member for any Tax
purpose and (iv) any Taxes payable as a result of the election made under
Section 338(h)(10) of the Code pursuant to Section 14.1(e) of this
Agreement.
"Excluded JPM Business" shall mean any loan agency and loan
servicing in Indonesia where JPM or one of its Subsidiaries is a lender,
the Phaser Funds Program and providing back office support for the Phaser
Funds Program, land trusts, insurance trusts, re-insurance trusts, any
Excluded Appointment, the Like-Kind Exchange business, FCS, Depositary &
Clearing Centre, acting as escrow agent in any capacity whatsoever (other
than acting in a capacity set forth in clause (1) of the definition of
"Corporate Trust Business", regardless of whether in the United States or
elsewhere), the DR business (including providing depositary, transfer
agent/registrar, issuance and cancellation, corporate action and dividend
services on behalf of non-U.S. issuers and operating any ▇▇ ▇▇▇▇▇-book
and DR pre-release program), the asset servicing and back-up servicing
business (including the services provided by Systems & Services
Technologies, Inc.), the fund of funds collateral business, commercial
paper issuing and paying agent services for issuers of conventional and
asset-backed commercial paper (other than commercial paper issued by
municipalities) and proprietary conduits, bankruptcy and settlement
services business, providing any depositary, clearance, securities and
cash collateral management, derivatives, custodial, fiduciary, agency,
fund servicing and administration, fund of funds accounting and custody
(other than document custody), middle and back office and accounting
services for CDO portfolio and fund managers or loan or asset servicing
or processing or similar services, or performing similar activities, in
connection with any line of business conducted outside of the Asset
Servicing Division of JPM's Worldwide Securities Services business.
"Excluded BNY Business" shall mean (i) Private Banking, (ii)
lending (other than Middle Market Commercial Lending, Regional Real
19
Estate Lending, consumer lending and lending conducted through BNY's
branch banking locations in New York, New Jersey and Connecticut), and
(iii) any lending and servicing activities (other than the activities set
forth in clauses (i), (ii), (iii) and (iv) of the definition of "Banking
Business"), such as special industry lending, other real estate lending
in New York City, real estate investments and mortgage servicing.
"Existing Out-of-Balance Appointment" shall mean, as of a
specified date, an Appointment having an Existing Out-of-Balance
Condition as of such date.
"Existing Out-of-Balance Condition" shall mean, as of a
specified date and with respect to any Appointment, a situation where, as
of such date, (i) the amount legally owing or collectible with respect to
Securities outstanding or released in connection with the Appointment as
reflected in the records of the Corporate Trust Business differs from the
amount of funds, collateral or trust assets held by the Corporate Trust
Business, or differs from the amount of the issuer's or obligor's legal
obligation to the Corporate Trust Business under the applicable Corporate
Trust Agreement for payments due with respect to such Securities,
excluding funds transferred to any Governmental Authority pursuant to any
abandoned property law, (ii) an excess or duplicate payment or overdraft
payment has been made with respect to Securities issued in connection
with such Appointment that has not been recovered, or (iii) Custodial
Asset or cash balances for an Appointment reflected in the related
records delivered to BNY differs from the funds held for payment of
securities due or to become due for such Appointment.
"FAS 91 Fees" shall mean any fees received and deferred in
accordance with Statement of Financial Accounting Standards No. 91, net
of associated deferred costs.
"FCS" shall mean Financial Computer Services L.P.
"FDIC" shall mean the Federal Deposit Insurance Corporation.
"Federal Funds Rate" shall mean, for any day, the rate per
annum (rounded upwards, if necessary, to the nearest 1/100th of 1%) equal
to the average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers
on such day, as published by the Federal Reserve Bank of New York on the
Business Day next succeeding such day; provided that, if such day is not
a Business Day or the Federal Funds Rate is not so published for any day,
the Federal Funds Rate for such day shall be such rate on such
transactions on the next Business Day as so published on the next
succeeding Business Day.
"GAAP" shall mean generally accepted accounting principles in
the United States of America consistently applied.
"Governmental Authority" shall mean any federal, state,
local, domestic or foreign agency, court, tribunal, administrative
agency, commission, department or other governmental, regulatory or self-
regulatory authority.
20
"Government Consent" shall mean any Corporate Trust
Government Consent or Banking Government Consent.
"Hazardous Material" shall mean any pollutant, contaminant,
hazardous substance, hazardous material or hazardous waste, or any oil,
petroleum, petroleum product, asbestos, asbestos containing material,
chemical, smoke, vapors or other irritants, including, without
limitation, as any of the foregoing may be defined in or designated
pursuant to any Environmental Law.
"Intellectual Property" shall mean all intellectual property
rights or other similar proprietary rights in any jurisdiction owned or
held for use under license, including such rights in and to: (a)
trademarks, (b) service marks, (c) copyrights and copyrightable works
(including software), (d) patents, (e) invention disclosures, discoveries
and improvements, whether or not patentable, (f) trade secrets,
(g) rights to limit the use or disclosure of confidential information by
any Person, (h) Internet domain names, (i) registrations of, and
applications to register, any of the foregoing with any Governmental
Authority and any renewals or extensions thereof, and (j) the goodwill
associated with each of the foregoing.
"▇▇▇" shall mean an account created by a trust for the
benefit of an individual or his or her beneficiary, and that complies
with the provisions of Section 408 or 408A of the Code.
"IRS" shall mean the Internal Revenue Service.
"IT Assets" shall mean computers, computer software,
firmware, middleware, servers, workstations, routers, hubs, data
communication lines, all other information technology equipment and all
associated documentation, in each case primarily related to the Corporate
Trust Business or Banking Business, as applicable.
"JPM Material Adverse Effect" shall mean a material adverse
change in, or effect on, the ability of JPM to timely consummate the
transactions contemplated hereby.
"JPM Money Market Funds" shall mean registered money market
funds sponsored or managed by JPM or any of its Affiliates; provided
that, with respect to Section 1.1(a) of Schedule A, "JPM Money Market
Funds" shall include registered, unregistered and offshore money market
funds sponsored or managed by JPM or any of its Affiliates.
"▇▇▇▇▇" shall mean an account created by a trust for the
benefit of employees (some or all of whom are owner-employees) and that
complies with the provisions of Section 401 of the Code.
"Knowledge" shall mean (a) with respect to JPM, the actual
knowledge, without independent investigation, of the officers of JPM set
forth on Schedule 1.1(g) and (b) with respect to BNY, the actual
21
knowledge, without independent investigation, of the officers of BNY set
forth on Schedule 1.1(h). For purposes of this definition, an officer
shall be deemed to have actual knowledge of facts that would be
reasonably expected to come to the attention of such officer in the
course of the management reporting practices of JPM and BNY, as
applicable.
"Leased Banking Premises" shall mean all of those premises
used in connection with the Banking Business that are leased by BNY as
lessee or sublessee, as described on Schedule 1.1(i).
"Letter of Credit" shall mean any letter of credit, including
any standby letter of credit, issued by BNY in connection with the
Banking Business.
"Lien" shall mean, with respect to any property, any
mortgage, deed of trust, easement, declaration, restriction, pledge,
hypothecation, assignment, deposit arrangement, option, equity interest,
encumbrance, lien (statutory or other), preference, participation
interest, priority or other security agreement or preferential
arrangement of any kind or nature whatsoever relating to that property,
including any conditional sale or other title retention agreement, any
financing lease having substantially the same economic effect as any of
the foregoing and the filing of any financing statement under the UCC or
comparable law of any jurisdiction to evidence any of the foregoing;
provided, however, that any lien deemed to be created by this Agreement
or any Related Agreement shall not be deemed to constitute a Lien.
"Like-Kind Exchange" shall mean any tax-deferred exchange of
property, including those conducted by JPM Property Exchange Inc., and
those commonly referred to as "forward" or "reverse" or "market"
transactions, and including any services or other activity related to the
deposit or investment of funds associated with such exchanges of
property.
"Loan Property" shall mean any property securing an Assigned
Banking Loan in which BNY or any of the Affiliates of BNY holds a
security interest.
"Loans" shall mean all loans, or other extensions of credit,
including, but not limited to, loans which have been partially or fully
charged off, interests in loan participations and assignments, customer
liabilities on bankers acceptances, as well as legally binding
commitments and obligations to extend credit (including any unfunded or
partially funded revolving loans, lines of credit, overdraft lines of
credit and courtesy extensions or similar arrangements, and including
short-term municipal investments (such as bond anticipation notes and
revenue anticipation notes) related to the Middle Market Commercial
Lending business), excluding any loans made by BNY or its Affiliates to
BNY or its Affiliates.
"Master Equipment Leases" shall mean Contracts under or
pursuant to which BNY or any of its Subsidiaries leases personal property
used in the Banking Business.
22
"Middle Market Commercial Lending" shall mean the business of
originating loans and taking deposits, as conducted as of the date hereof
by BNY's regional commercial banking division.
"Net Book Value" shall mean the book value net of any
associated allowance, reserve or other contra-asset account, as reflected
in BNY's books and records, determined in accordance with GAAP
consistently applied, except that the Net Book Value of Assigned Banking
Loans shall be adjusted by any FAS 91 Fees to the extent otherwise
included in such Net Book Value; provided, however, that no Federal,
state, local, or foreign income taxes shall be reflected.
"Non-Prosecution Agreement" means the Non-Prosecution
Agreement, dated November 4, 2005, between BNY and the U.S. Attorney's
Office for the Eastern District of New York and the U.S. Attorney's
Office for the Southern District of New York.
"Other Banking Facilities" shall mean the facilities used by
the Banking Business and set forth in Schedule 1.1(j).
"Out-of-Footprint Loan" shall mean any unsecured, consumer
Loan that is held by BNY or any of its Subsidiaries in the Banking
Business, where such Loan is made to a Person who resides outside of New
York, Connecticut, New Jersey or Pennsylvania and was originated through
direct mailing or through a call center.
"Overdrafts" shall mean overdrafts (whether specifically
extended or courtesy) of the book balance of any accounts constituting
Assumed Banking Deposits.
"Party" shall mean BNY or JPM, as applicable.
"Permitted Enforceability Exceptions" shall mean those
exceptions with respect to enforcement under bankruptcy, insolvency
reorganization, moratorium or other laws of general applicability now or
hereafter in effect relating to or affecting creditors' rights generally,
public policy and general principles of equity.
"Permitted Liens" shall mean (a) Liens for Taxes, assessments
or governmental charges not yet due and payable, or being contested in
good faith and by appropriate proceedings; (b) Liens imposed by law, such
as carriers', warehousemen's and mechanics' Liens with respect to which
the underlying obligations are not delinquent or are being contested in
good faith and by appropriate proceedings; (c) purchase money security
interests for the purchase or leasing of office equipment, computers,
vehicles and other items of tangible personal property so long as the
existence of such lease or other financing arrangement has been disclosed
to the party to whom the applicable representation is made; (d) zoning,
entitlement or other land use regulations; (e) easements, quasi-
easements, licenses, covenants, rights-of-way, rights of re-entry or
other restrictions, including any other agreements, conditions or
restrictions that would be shown by a current title report or other
similar report or listing; provided that the foregoing matters or
conditions do not, individually or in the aggregate, have a material
23
adverse impact on the operation of the applicable real property
encumbered or affected thereby; and (f) any conditions that may be shown
by a current survey or physical inspection; provided that the foregoing
matters or conditions do not, individually or in the aggregate, have a
material adverse impact on the operation of the applicable real property
encumbered or affected thereby.
"Person" shall be construed broadly and shall mean an
individual, corporation, partnership, limited liability company, joint
venture, trust or other entity or organization or a Governmental
Authority (or any department, agency or political subdivision).
"Phaser Funds Program" shall mean JPMorgan Securities, Inc.'s
"Pha$erfund$" program that provides mortgage originators with funding
facilities to finance agency conforming, single family mortgage loans
awaiting securitization.
"Post-Closing Period" shall mean any taxable period (or
portion thereof) beginning after the Closing Date.
"Pre-Closing Period" shall mean any taxable period (or
portion thereof) ending on (and including) the Closing Date or ending
prior to the Closing Date.
"Private Banking" shall mean the following businesses, as
conducted by BNY or its relevant Subsidiary as of the date hereof: the
business of providing (a) private banking and personal trust and
investment services (including, but not limited to, Banking-Related
Services) through a separate division branded as "private banking" or an
equivalent to any BNY Private Banking Client, and such BNY Private
Banking Client's Related Interests; and (b) Middle Market Commercial
Lending Services to an entity in which a BNY Private Banking Client
(whether a BNY Private Banking Client as of the Closing or thereafter)
has a substantial economic interest solely as an accommodation to, and at
the request of (provided that such shall not have been solicited or
encouraged by BNY or its Affiliates), such BNY Private Banking Client.
"Regional Real Estate Lending" shall mean the business of
originating and booking loans, and the related banking activities, as
conducted as of the date hereof by BNY's regional real estate banking
division.
"Related Interests" shall mean, with respect to any BNY
Private Banking Client, such BNY Private Banking Client's immediate
family members, personal staff, foundations, not-for-profit corporations,
family or personal trusts and similar related interests, advisors,
referral sources, and financial intermediaries who serve them.
"Release" shall mean any release, migration, seepage,
discharge, or disposal into the Environment, including, without
limitation, as any of the foregoing may be defined in or pursuant to any
Environmental Laws.
"REMIC" shall mean Real Estate Mortgage Investment Conduit.
24
"Run-Off Appointment" shall mean any Appointment, including
any Corporate Trust Agreement relating to such Appointment, originated or
managed by the Corporate Trust Business in a non-U.S. jurisdiction in
which BNY has notified JPM that BNY will not seek to continue the
Corporate Trust Business after the Closing, which non-U.S. jurisdictions
are set forth on Schedule 1.1(l).
"SBA" shall mean the United States Small Business
Administration.
"SBA Consents" shall mean all consents necessary to transfer
to JPM the SBA Loans.
"SBA Loan" shall mean an Assigned Banking Loan that is
secured by an SBA guaranty whether in whole or in part, provided,
however, that with respect to any such loan, to the extent that as of the
Closing Date, BNY shall not have received an SBA Consent, such Loan shall
no longer be deemed an "SBA Loan" hereunder.
"Securities" shall mean any pass-through certificates, REMIC
certificates, asset-backed certificates, participation certificates,
bonds, collateralized mortgage obligations, collateralized debt
obligations, revenue certificates, custody receipts, trust receipts,
notes, debentures or other instruments evidencing a right to monetary
distributions or payments which were issued in connection with an
Appointment pursuant to any Corporate Trust Agreements (whether or not
such instrument is referred to as a "security" or as some other kind of
instrument (such as a mortgage participation) under the Corporate Trust
Agreements).
"Security Deposits" shall mean the aggregate amount of any
funds remitted by BNY to a third party and held in escrow as security in
connection with any Banking Lease, Contract or other transaction as set
forth on Schedule 1.1(k), together with any additional Security Deposits
remitted by BNY through the Banking Business in the ordinary course of
business (and consistent with Section 12.1 of this Agreement) from and
including the last date as of which Schedule 1.1(k) is updated under this
Agreement through the Close of Business on the Closing Date.
"Student Loans" shall mean any Loan serviced or administered
by or on behalf of BNY or any of its Subsidiaries as of the Closing Date
that is a loan under the Federal Family Education Loan Program authorized
by Part B, Title IV of the Higher Education Act of 1965, as amended
(including the published rules, regulations and interpretations of the
Department of Education thereunder or thereof).
"Subsidiary" of a Person shall mean any other Person, of
which such Person, directly or indirectly, owns securities or other
ownership interest having (i) a majority of the economic interests of
such entity or (ii) the ordinary voting power to elect a majority of the
board of directors or such Person performing similar functions.
"Tax" shall mean any tax of any kind, including any federal,
state, local and foreign income, profits, license, severance, occupation,
25
windfall profits, capital gains, capital stock, transfer, registration,
social security (or similar), production, franchise, gross receipts,
payroll, sales, employment, use, property, excise, value added,
estimated, stamp, alternative or add-on minimum, environmental,
withholding and any other tax or like assessment, together with all
interest, penalties and additions imposed with respect to such amounts
and including any obligation to indemnify or otherwise assume or succeed
to the tax liability of any other Person.
"Tax Return" shall mean any return, declaration, report,
claim for refund or information return or statement filed or required to
be filed with any Taxing Authority relating to Taxes, including any
schedule or attachment thereto, and including any amendment thereof.
"Taxing Authority" shall mean any Governmental Authority
having or purporting to exercise jurisdiction with respect to any Tax.
"Tri-Partite Agreement" shall mean, with respect to an
Appointment, all resignation actions, appointment and acceptance
instruments and assignment agreements agreed or consented to by the
parties hereto or their applicable Subsidiaries and other Persons to
effect the Assignment of such Appointment pursuant to, or consistent
with, the related Corporate Trust Agreements, including agreements with
clearing and settling depositions, depositaries and other clearing firms
which may include notices, appointment actions or agreements created or
completed by providing such Persons with notice of such Assignment and
obtaining acceptance or consent with respect thereto.
"UCC" shall mean the Uniform Commercial Code.
"UK VAT" shall mean United Kingdom VAT.
"VAT" shall mean value added tax.
Section 1.2 Other Definitions. The following terms shall
have the meanings defined in the Section indicated:
1031 Exchange......................................................Section 14.11
Accountant.....................................................Section 4.2(b)(3)
Agent Bank Agreement...............................................Section 12.13
Agreement...............................................................Preamble
Applicable Allocation Statement...................................Section 4.6(a)
Applicable Purchased Assets.......................................Section 4.6(a)
Assigned Banking Loans.........................................Section 3.1(a)(5)
Assumed Banking Agreements.....................................Section 3.1(a)(7)
Assumed Banking Liabilities.......................................Section 3.2(a)
Assumed Corporate Trust Liabilities...............................Section 2.2(a)
Assumed Derivative Products....................................Section 3.1(a)(6)
Assumed Letters of Credit......................................Section 3.1(a)(6)
ATM............................................................Section 3.1(a)(4)
26
Australia License................................................Section 11.6(c)
Banking Approvals....................................................Section 9.4
Banking Assignments............................................Section 5.2(b)(8)
Banking Cash on Hand..........................................Section 3.1(a)(10)
Banking Closing Payment...........................................Section 4.3(b)
Banking Conversion Plan......................................Section 12.10(c)(1)
Banking Conversion Plan Delay Period............................Section 12.14(f)
Banking Conversion Project Manager..............................Section 12.10(a)
Banking de minimis loss....................................Section 17.5(b)(1)(i)
Banking Employee Plans...........................................Section 8.17(b)
Banking Employment Agreements....................................Section 8.17(b)
Banking Financial Information....................................Section 8.25(a)
Banking Government Consents..........................................Section 9.4
Banking Lease Assignments......................................Section 5.2(b)(7)
Banking Leases.................................................Section 3.1(a)(2)
Banking License Fee Start Date..................................Section 12.14(f)
Banking Milestone Delay Period..................................Section 12.14(f)
Banking Non-Competition Period..................................Section 10.12(a)
Banking Personal Property......................................Section 3.1(a)(3)
Banking Post-Closing Payment...................................Section 4.4(c)(1)
Banking Pre-Closing Annual Incentive Bonus Pool..................Section 13.2(i)
Banking Purchase Price.........................................Section 4.3(b)(2)
Banking Receivables...........................................Section 3.1(a)(11)
Banking Related Agreement...............................................Recitals
Banking Revenue Threshold....................................Section 10.12(a)(5)
Banking Sale............................................................Recitals
Banking Seller Approvals.............................................Section 8.4
Banking Seller Government Consents...................................Section 8.4
Banking Sublease Agreement.......................................Section 12.3(b)
Banking Subsidiaries..............................................Section 8.1(a)
Banking Tax Returns..............................................Section 8.32(a)
Banking Test Period..........................................Section 10.12(a)(5)
Banking Threshold..........................................Section 17.5(b)(1)(i)
Banking Transition Services Agreement...................................Recitals
Banking Withholding Obligations.....................................Section 12.7
BNY.....................................................................Preamble
BNY Entities....................................................Section 10.12(a)
BNY Indemnified Parties.............................................Section 17.2
BNY Job Offer Condition..........................................Section 13.1(a)
BNY Name License................................................Section 12.14(a)
BNY Payment Date.................................................Section 13.1(i)
BNY's Objection................................................Section 4.2(b)(2)
BNY's Savings Plan...............................................Section 13.2(f)
Closing..............................................................Section 5.1
Closing Date.........................................................Section 5.1
27
COBRA............................................................Section 13.1(d)
Competing Banking Business......................................Section 10.12(a)
Competing Corporate Trust Business..............................Section 10.11(a)
Corporate Trust Agreement......................................Section 2.1(a)(3)
Corporate Trust Agreements.....................................Section 2.1(a)(3)
Corporate Trust Approvals............................................Section 7.4
Corporate Trust Assignments....................................Section 5.2(a)(7)
Corporate Trust Conversion Plan...............................Section 11.9(c)(1)
Corporate Trust Conversion Project Manager.......................Section 11.9(a)
Corporate Trust de minimis loss............................Section 17.5(a)(1)(i)
Corporate Trust Employee Plans...................................Section 6.12(b)
Corporate Trust Employment Agreements............................Section 6.12(b)
Corporate Trust Financial Information...............................Section 6.17
Corporate Trust Government Consents..................................Section 7.4
Corporate Trust Lease Assignments..............................Section 5.2(a)(6)
Corporate Trust Leases.........................................Section 2.1(a)(1)
Corporate Trust Net Book Value....................................Section 4.1(e)
Corporate Trust Non-Competition Period..........................Section 10.11(a)
Corporate Trust Personal Property..............................Section 2.1(a)(2)
Corporate Trust Post-Closing Payment...........................Section 4.2(c)(1)
Corporate Trust Pre-Closing Annual Incentive Bonus Pool..........Section 13.1(i)
Corporate Trust Receivables....................................Section 2.1(a)(8)
Corporate Trust Related Agreement.......................................Recitals
Corporate Trust Revenue Threshold............................Section 10.11(a)(4)
Corporate Trust Sale....................................................Recitals
Corporate Trust Seller Approvals.....................................Section 6.4
Corporate Trust Seller Government Consents...........................Section 6.4
Corporate Trust Sublease Agreement...............................Section 11.3(b)
Corporate Trust Subsidiaries......................................Section 6.1(a)
Corporate Trust Tax Returns......................................Section 6.22(a)
Corporate Trust Test Period..................................Section 10.11(a)(4)
Corporate Trust Threshold..................................Section 17.5(a)(1)(i)
Corporate Trust Transition Services Agreement...........................Recitals
Corporate Trust Withholding Obligations.........................Section 11.12(a)
Estimated Closing Corporate Trust Net Book Value..................Section 4.1(a)
Estimated Corporate Trust Net Book Value....................Section 4.2(c)(1)(i)
Estimated Subsequent Transfer Corporate Trust Net Book Value......Section 4.1(b)
Excluded Banking Assets...........................................Section 3.1(b)
Excluded Banking Liabilities......................................Section 3.2(b)
Excluded Corporate Trust Assets...................................Section 2.1(b)
Excluded Corporate Trust Liabilities..............................Section 2.2(b)
Excluded Loans................................................Section 3.1(b)(13)
Execution Date..........................................................Preamble
FCS IP..............................................................Section 6.10
Final Banking Closing Statement................................Section 4.4(b)(1)
28
Final Banking Payment..........................................Section 4.4(b)(1)
Final Corporate Trust Closing Statement........................Section 4.2(b)(1)
Final Corporate Trust Net Book Value...........................Section 4.2(b)(1)
Indemnified Parties.................................................Section 17.3
Indemnifying Party...............................................Section 17.4(a)
Indirect Transferred Entities.....................................Section 6.1(c)
Initial Corporate Trust Closing Payment...........................Section 4.1(a)
Initial Purchased Corporate Trust Assets..........................Section 4.1(a)
JPM.....................................................................Preamble
JPM Entities....................................................Section 10.11(a)
JPM Indemnified Parties.............................................Section 17.3
JPM Job Offer Condition..........................................Section 13.2(a)
JPM Name License.................................................Section 11.6(b)
JPM Payment Date.................................................Section 13.2(i)
JPM's Marks.........................................................Section 11.6
JPM's Objection................................................Section 4.4(b)(2)
JPM's Savings Plan...............................................Section 13.1(f)
Leased Corporate Trust Premises..................................Section 6.20(a)
Licensed BNY Item...............................................Section 12.14(a)
Maximum Indemnification Amount............................Section 17.5(a)(1)(ii)
NASD................................................................Section 8.19
Necessary Banking Permits............................................Section 8.9
Necessary Corporate Trust Permits....................................Section 6.9
Non-Active Accounts............................................Section 2.1(a)(3)
Non-Renewal Notice..............................................Section 12.12(b)
Non-Selected Automatic Transfer Employees........................Section 13.1(a)
Order.........................................................Section 14.6(a)(1)
Original Banking Transition Services Agreement..........................Recitals
Original Corporate Trust Transition Services Agreement..................Recitals
Original Execution Date.................................................Recitals
Original Purchase Agreement.............................................Recitals
Other Corporate Trust Contracts................................Section 2.1(a)(4)
Owned Banking Premises.........................................Section 3.1(a)(1)
Participation Agreements............................................Section 12.8
Payment Date.....................................................Section 14.5(a)
Preliminary Banking Closing Statement.............................Section 4.4(a)
Preliminary Corporate Trust Closing Statement.....................Section 4.2(a)
Prepaid Banking Expenses......................................Section 3.1(a)(12)
Prepaid Corporate Trust Expenses...............................Section 2.1(a)(9)
Purchased Banking Assets..........................................Section 3.1(a)
Purchased Banking IP..........................................Section 3.1(a)(15)
Purchased Corporate Trust Assets..................................Section 2.1(a)
Purchased Corporate Trust IP..................................Section 2.1(a)(13)
Purchased CRA Loans............................................Section 3.1(a)(5)
Purchased Out-of-Footprint Loans...............................Section 3.1(a)(5)
29
Regulatory Delayed Transferred Employee..........................Section 13.1(j)
Related Agreements......................................................Recitals
Required Government Consents.....................................Section 15.1(b)
Restricted Item..................................................Section 10.9(a)
Sales and Use Allocation..........................................Section 4.6(a)
Selected Automatic Transfer Employees............................Section 13.1(a)
Selected Banking Business Employees..............................Section 13.2(a)
Selected Corporate Trust Business Employees......................Section 13.1(a)
Selected Non-Automatic Transfer Employees........................Section 13.1(a)
Servicing Agreement.....................................................Recitals
Severance Benefits...........................................Section 13.1(e)(ii)
Stale Checks...................................................Section 2.1(a)(7)
Subpoenas.......................................................Section 12.18(a)
Subsequent Corporate Trust Closing Payment........................Section 4.1(b)
Subsequent Corporate Trust Closing Statement......................Section 4.2(a)
Subsequent Purchased Corporate Trust Assets.......................Section 4.1(b)
Subsequent Transfer Date.............................................Section 5.1
TFM Employees................................................Section 13.1(e)(ii)
Transfer Date.....................................................Section 4.1(b)
Transfer Notice.................................................Section 12.12(a)
Transfer Taxes...................................................Section 14.5(a)
Transferred Banking Employees....................................Section 13.2(a)
Transferred Corporate Trust Employees............................Section 13.1(a)
Transferred Entities Tax Affiliates..............................Section 6.22(d)
Transferred Entity............................................Section 2.1(a)(12)
Transferred Shares................................................Section 6.1(c)
Transition Coordinators.........................................Section 10.14(a)
VATA 1994.....................................................Section 14.6(a)(1)
WARN Act.........................................................Section 13.1(k)
Section 1.3 Construction; Absence of Presumption.
(a) For the purposes hereof: (i) words in the singular shall be held to
include the plural and vice versa and words of one gender shall be held to
include the other gender, in each case as the context requires; (ii) the
terms "hereof," "herein," and "herewith" and words of similar import
shall, unless otherwise stated, be construed to refer to this Agreement
as a whole (including the Related Agreements and all of the Exhibits and
Schedules) and not to any particular provision of this Agreement, and
Article, Section, paragraph, Exhibit and Schedule references are to the
Articles, Sections, paragraphs, Exhibits and Schedules to this Agreement
unless otherwise specified; (iii) the word "including" and words of
similar import when used in this Agreement shall mean "including without
limitation" unless the context otherwise requires or unless otherwise
specified; (iv) the word "or" shall not be exclusive; (v) any reference
to any federal, state, local or foreign statute or law shall be deemed
also to refer to all rules and regulations promulgated thereunder, unless
the context requires otherwise; (vi) all references to any period of days
30
shall be deemed to be to the relevant number of calendar days unless
otherwise specified; and (vii) all references to dollar amounts shall be
to U.S. Dollars. For purposes hereof, where a party hereto makes a
representation or warranty, or any covenant or agreement, such
representation or warranty shall be deemed made by any relevant
Subsidiary of such party and such covenant or agreement shall be deemed
to be a covenant or agreement by such party to cause its relevant
Subsidiary to comply with such covenant or agreement; provided that
nothing in this sentence shall relieve such party of any of its
liabilities or obligations otherwise imposed by this Agreement.
(b) The parties acknowledge that each party and its
counsel have reviewed and revised this Agreement and the Related Agreements
and that no rule of construction to the effect that any ambiguities are to
be resolved against the drafting party shall be employed in the
interpretation of this Agreement or the Related Agreements (including all
of the Exhibits and Schedules) or any amendments hereto.
Section 1.4 Heading. The Article and Section headings in
this Agreement are inserted for convenience of reference only and will
not affect the meaning or interpretation of this Agreement.
ARTICLE II
PURCHASE AND SALE OF CORPORATE TRUST BUSINESS
---------------------------------------------
Section 2.1 Purchase and Sale of Corporate Trust Assets.
(a) Purchased Corporate Trust Assets. At the Closing, and subject to the
terms and conditions set forth herein, JPM will sell, assign, transfer,
convey and deliver, or cause one or more of its Subsidiaries to sell,
assign, transfer, convey and deliver, to BNY, and BNY will purchase,
acquire and accept from JPM or the applicable Subsidiaries of JPM, all of
the right, title and interest of JPM or its applicable Subsidiaries in,
to and under all of the assets, properties, rights, Contracts and claims
of JPM or its applicable Subsidiaries, wherever located, whether tangible
or intangible, real, personal or mixed, in each case primarily related to
the Corporate Trust Business, but excluding the Excluded Corporate Trust
Assets (collectively, the "Purchased Corporate Trust Assets"), including
by way of example and not limitation, all of the following assets,
properties, rights, Contracts and claims of JPM and its Subsidiaries
(other than any of the following to the extent it is an Excluded
Corporate Trust Asset):
(1) subject to the receipt of any required third-party
consents, the real property leases, subleases, licenses or other
contracts pursuant to which JPM or any Affiliate of JPM leases the
Leased Corporate Trust Premises (the "Corporate Trust Leases"), a
true and complete list of which, as of the date hereof, is set
forth on Schedule 2.1(a)(1);
(2) the furniture, fixtures, equipment, materials and
supplies listed on Schedule 2.1(a)(2), which Schedule shall be
provided from JPM to BNY within 15 days after the date hereof, and
all other furniture, fixtures, equipment, materials and supplies
31
owned by JPM as of the Closing Date and located at the Leased
Corporate Trust Premises (collectively, the "Corporate Trust
Personal Property");
(3) subject to the receipt of any required third-party
consents, all indenture, trust, pooling and servicing, private
label, paying agency, collateral or disbursing agency, securities
(whether bond, note, debenture or other) registrar, transfer
agency, document custody, and all other fiduciary and agency
contracts, indentures primarily related to the Corporate Trust
Business, including all accounts of the Corporate Trust Business
that are active as of the Closing Date, but excluding any accounts
(and agreements for such accounts) that, on or prior to the Closing
Date, have been fully called or matured and for which all cash has
been distributed or escheated and the corporate trust agreement for
such account has been terminated (the "Non-Active Accounts")
regardless of whether JPM or any of its Subsidiaries continues to
have any obligations with respect thereto (individually, a
"Corporate Trust Agreement" and collectively, the "Corporate Trust
Agreements"), a true and complete list of which active Corporate
Trust Agreements, as of the date hereof, is set forth on Schedule
2.1(a)(3);
(4) subject to the receipt of any required third-party
consents, the agreements listed on Schedule 2.1(a)(4) (the "Other
Corporate Trust Contracts");
(5) other than with respect to Non-Active Accounts, all
books, records and other data to the extent relating to the
Corporate Trust Business, including all files (including suspicious
activity reports to the extent permitted by Applicable Law),
customer and supplier lists, mailing lists, accounting records,
documentation or records relating to the Corporate Trust Business
or the administration of the Corporate Trust Agreements, real
property files with respect to the Corporate Trust Leases
(including lease documentation, maintenance records, plans and
permits, to the extent in the possession of JPM or any of its
Subsidiaries), catalogs, printed materials and all technical and
other data relating to the Corporate Trust Business, other than
(i) corporate minute books and, except for Forms W-8 and W-9 and
similar tax forms provided to JPM by customers of the Corporate
Trust Business, income tax records of JPM or any of its
Subsidiaries, (ii) personnel files and records and (iii) books and
records to the extent relating to accounts that have terminated
prior to Closing and are no longer on the systems of JPM or any of
its Subsidiaries; provided, however, that JPM and its Subsidiaries
shall have the right to retain a copy of all such books, records
and other data that is part of the Purchased Corporate Trust Assets
to the extent reasonably necessary for, and solely for use in
connection with, tax, regulatory, litigation or other legitimate,
non-competitive purposes;
(6) other than with respect to Non-Active Accounts, any
and all rights of JPM or any of its Subsidiaries that by their terms
are transferable and that arise under or pursuant to warranties,
representations, indemnifications, reimbursement agreements,
letters of credit, insurance policies to the extent held for the
32
benefit of JPM or any of its Subsidiaries in connection with the
Corporate Trust Business or guaranties in favor of JPM or any of
its Subsidiaries, made by or for the benefit of JPM or any of its
Subsidiaries or their respective customers, issuers or holders of
Securities, predecessors in interest, suppliers, vendors, or
Affiliates of any of the foregoing, to the extent relating to the
other Purchased Corporate Trust Assets or the Assumed Corporate
Trust Liabilities, in either case with respect to the period
following the Closing;
(7) subject to Section 5.4, all of JPM's interest in the
Custodial Assets (other than Custodial Assets held in trust for
Non-Active Accounts); provided that, at the Closing (to the extent
practicable and otherwise no later than 180 days thereafter) and
subject to Section 5.4, JPM shall transfer to BNY any cash covering
the checks described in exception (B) to the definition of
Custodial Assets that have not been presented for payment as of
such date and funds for which have not been escheated to a
Governmental Authority pursuant to Applicable Law ("Stale Checks");
provided, further, that, thereafter, all Stale Checks presented to
JPM shall be forwarded to BNY for payment in due course, and BNY
hereby agrees to pay the same in the ordinary course of business as
an Assumed Corporate Trust Liability hereunder;
(8) accrued income receivable and accounts receivable to
the extent arising from the Corporate Trust Business and existing
as of the Closing Date (the "Corporate Trust Receivables"), as set
forth on the Final Corporate Trust Closing Statement (which shall
include appropriate reserves for the Corporate Trust Receivables);
(9) all prepaid charges and fees of JPM or any of its
Subsidiaries to the extent arising in the Corporate Trust Business
and existing as of the Closing Date (the "Prepaid Corporate Trust
Expenses") as set forth on the Final Corporate Trust Closing
Statement;
(10) all customer based intangibles relating to the
Corporate Trust Business, including without limitation, any core
deposit intangibles relating to the Corporate Trust Business;
(11) [Reserved];
(12) all of the issued and outstanding equity interest in
(i) ▇.▇. ▇▇▇▇▇▇ Trust Australia Limited, an Australian limited
company, (ii) ▇▇▇▇▇▇ Services Inc., a Delaware corporation, (iii)
▇.▇. ▇▇▇▇▇▇ Institutional Services Australia Limited, an Australian
limited company, and (iv) ▇.▇. ▇▇▇▇▇▇ Corporate Trustee Services
Limited, a company organized under the laws of England (each of
(i), (ii), (iii) and (iv), a "Transferred Entity");
33
(13) the Intellectual Property owned by JPM or any of its
Subsidiaries that is set forth on Schedule 2.1(a)(13)
(collectively, the "Purchased Corporate Trust IP"); and
(14) the assets set forth on Schedule 2.1(a)(14).
(b) Excluded Corporate Trust Assets. Notwithstanding
anything to the contrary contained in Section 2.1(a), JPM and its
Subsidiaries will retain ownership of the following assets, properties,
rights, Contracts and claims, wherever located, whether tangible or
intangible, real, personal or mixed, which assets, properties, rights,
Contracts and claims shall be excluded from the Purchased Corporate Trust
Assets and shall not be transferred or sold hereunder (collectively, the
"Excluded Corporate Trust Assets"):
(1) all assets, properties, rights, Contracts and claims,
wherever located, whether tangible or intangible, real, personal or
mixed, primarily related to the Excluded JPM Business;
(2) other than the Corporate Trust Leases, all leases,
subleases, licenses or other Contracts pursuant to which JPM or any
of its Subsidiaries leases, subleases or licenses real property;
(3) all furniture, fixtures, equipment, materials and
supplies, other than those items contemplated by Section 2.1(a)(2),
and all works of art;
(4) all cash, cash equivalents or similar cash items of JPM
or any of its Subsidiaries (other than the Custodial Assets), except
as otherwise set forth on the Corporate Trust Closing Statement;
(5) other than the Purchased Corporate Trust IP set forth
on Schedule 2.1(a)(13) and the assets set forth on Schedule
2.1(a)(14), all corporate franchises, stock record books, minute
books, Tax Returns, and any stationery, office supplies, business
forms, manuals or similar property bearing JPM's trademarks, trade
names, service marks, logos or similar corporate identification;
(6) all Tax refunds or credits or claims therefor to which
JPM is entitled under Article XIV;
(7) any insurance policy and proceeds covering any Excluded
Corporate Trust Asset or any Excluded Corporate Trust Liability;
(8) subject to Section 2.1(a)(8), any rights of JPM under
the Corporate Trust Agreements or any of the other Purchased
Corporate Trust Assets, including any rights to fees and
reimbursements under such agreements and any rights to assert any
claims of privilege or other position in any legal proceeding with
respect thereto or otherwise, relating to the conduct of the
Corporate Trust Business prior to the Closing;
34
(9) any security deposits or other amounts deposited with
any Governmental Authority in connection with the qualification,
certification, licensing or permitting of JPM or any of its
Subsidiaries in connection with the conduct of the businesses of
JPM or any of its Subsidiaries, including the Corporate Trust
Business;
(10) all assets related to JPM's or any of its Subsidiaries'
employee benefit arrangements, including any Corporate Trust
Employee Plan, except as otherwise provided in Section 13.1;
(11) all rights with respect to any Excluded Appointment and
any documents related to an Excluded Appointment;
(12) other than the Purchased Corporate Trust IP set forth
on Schedule 2.1(a)(13) and the assets set forth on Schedule
2.1(a)(14), all IT Assets and Intellectual Property (including,
without limitation, technology servers (the computer hardware with
the attached communication and storage devices), computer software,
systems or programs, or computer software agreements) of JPM and
any of its Subsidiaries, including any rights (ownership, licensed
or otherwise) to use the ▇▇▇▇ "JPM" and any other trademarks,
service marks, brand names, Internet domain names, logos, trade
dress, trade names, corporate names and other indicia of origin,
and any derivatives of the foregoing, and all registrations and
applications for registration of any of the foregoing, and
including without limitation those identified on Schedule
2.1(b)(12), and all goodwill associated with and symbolized by the
foregoing;
(13) all books, records and other data that cannot, without
unreasonable effort or expense, be separated from books and records
maintained by JPM in connection with businesses other than the
Corporate Trust Business or to the extent that such books, records
and other data relate to Excluded Corporate Trust Assets, Excluded
Corporate Trust Liabilities or Corporate Trust Business Employees
who do not become Transferred Corporate Trust Employees, and all
personnel files and records;
(14) the assets set forth on Schedule 2.1(b)(14); and
(15) all receivables not reflected on the Final Corporate
Trust Closing Statement, including all charged off receivables.
(c) Notwithstanding anything to the contrary in this
Agreement, the aggregate amount of net non-earning assets transferred
from JPM and its Subsidiaries to BNY pursuant to this Section 2.1 shall
not exceed the sum of (i) the aggregate amount of net non-earning assets
reflected on the balance sheet of the Corporate Trust Business as at
December 31, 2005 plus (ii) $50 million, except for such changes in net
non-earning assets since December 31, 2005 as a result of changes in the
ordinary course of business (and all other non-earning assets that would
otherwise be transferred to BNY pursuant to this Section 2.1(c) shall
35
instead be deemed to constitute "Excluded Corporate Trust Assets"). JPM
agrees to deliver to BNY by no later than 10 Business Days after the date
hereof a balance sheet of the Corporate Trust Business as at December 31,
2005 reflecting the non-earning assets of the Corporate Trust Business as
at such date in accordance with GAAP proposed to be transferred or
assumed by BNY pursuant to this Agreement.
Section 2.2 Assumption of Corporate Trust Liabilities.
(a) Assumed Corporate Trust Liabilities. From and after the Closing, BNY
will assume and be liable for, and will pay, perform and discharge as
they become due, all of the liabilities and obligations set forth in this
Section 2.2(a), other than any Excluded Corporate Trust Liability
(collectively, the "Assumed Corporate Trust Liabilities"):
(1) all liabilities and obligations of JPM, other than
deposits (as defined in 12 U.S.C. Section 1813(l)), under or relating
to each of the Corporate Trust Agreements;
(2) all liabilities and obligations of JPM under each of
the Corporate Trust Leases and the Other Corporate Trust Contracts;
(3) all liabilities and obligations relating to, arising
from or in connection with the Transferred Corporate Trust
Employees and their employment, including all compensation,
benefits, severance, workers compensation and welfare benefit
claims and employment-related liabilities arising, or relating to
the conduct of the Corporate Trust Business, on or after the
Closing Date (as such term is used in Section 13.1(a));
(4) all liabilities and obligations of JPM for Stale Checks
presented to BNY following the transfer of the cash related to such
checks as contemplated by Section 2.1(a)(7);
(5) all liabilities and obligations relating to the
payment, safekeeping, use of or application of payments received
related to the Custodial Assets pursuant to the Corporate Trust
Agreements (excluding any obligations relating to Custodial Assets
that are not physically transferred by JPM to BNY to the extent
relating to JPM's conduct as investment manager with respect to any
such Custodial Assets, subject to Section 5.4 hereof);
(6) the liabilities set forth on Schedule 2.2(a)(6); and
(7) other than the Excluded Corporate Trust Liabilities,
all other liabilities and obligations relating in any manner to or
arising out of the Corporate Trust Business, the Purchased
Corporate Trust Assets or the other Assumed Corporate Trust
Liabilities, of whatever kind or nature primary or secondary,
direct or indirect, known or unknown, accrued or unaccrued,
absolute or contingent, contractual or tortious or otherwise.
36
BNY's obligations under this Section 2.2(a) shall not be subject to
offset or reduction by reason of any actual or alleged breach of any
representation, warranty or covenant contained in this Agreement or any
document delivered in connection herewith or any right or alleged right
to indemnification hereunder or thereunder. All periodic fees or charges
shall be shared on proportionate basis as of the Closing Date in
accordance with Section 4.5.
(b) Excluded Corporate Trust Liabilities. Notwithstanding
anything to the contrary set forth in this Agreement, JPM and its
Subsidiaries will retain the following liabilities and obligations, and
such liabilities and obligations shall not be assumed by BNY or any of
its Subsidiaries and shall be excluded from the Assumed Corporate Trust
Liabilities (collectively, the "Excluded Corporate Trust Liabilities"):
(1) any liability or obligation of JPM or any of its
Subsidiaries of any nature whatsoever, whether accrued, absolute,
contingent or otherwise, asserted or unasserted, known or unknown,
not primarily related to the Corporate Trust Business;
(2) any liability or obligation of JPM or any of its
Subsidiaries of any nature whatsoever, whether accrued, absolute,
contingent or otherwise, asserted or unasserted, known or unknown,
to the extent relating to or arising from or in connection with any
Excluded Corporate Trust Asset;
(3) any liability or obligation of JPM or any of its
Subsidiaries of any nature whatsoever, whether accrued, absolute,
contingent or otherwise, asserted or unasserted, known or unknown,
to the extent existing at the time of, or arising out of or
relating to (i) acts, events or omissions to act that occurred
prior to, the Closing or in connection with the conduct by JPM or
any of its Subsidiaries of the Corporate Trust Business prior to
the Closing, whether in violation of any Applicable Law, Contracts
or fiduciary duties or otherwise; or (ii) any Existing Out-of-
Balance Condition as of the Closing;
(4) any liability or obligation of JPM or any of its
Subsidiaries for any Excluded Corporate Trust Taxes that are the
responsibility of JPM under Article XIV;
(5) any compensation and benefit liability to Corporate
Trust Business Employees with respect to services provided prior to
the Closing Date and any Liabilities under the Corporate Trust
Employee Plans and Corporate Trust Employment Agreements incurred
prior to the Closing Date, whether or not such claims are submitted
for payment or reimbursement on or before the Closing Date, except
to the extent otherwise provided under Section 13.1;
(6) any liability or obligation for retiree medical and
life insurance benefits for Corporate Trust Business Employees
under Corporate Trust Employee Plans;
37
(7) any Controlled Group Liability arising under any
Corporate Trust Employee Plan or any employee benefit plan
sponsored, maintained or contributed to or by an ERISA Affiliate of
JPM or any of its Subsidiaries;
(8) any liability or obligation of JPM or any of its
Subsidiaries with respect to the Excluded Appointments; and
(9) the liabilities and obligations set forth on Schedule
2.2(b)(9).
After the Closing, BNY shall provide JPM with reasonable access during
business hours to Transferred Corporate Trust Employees as JPM deems
necessary and appropriate for purposes of handling claims related to this
Section 2.2 for which such Transferred Corporate Trust Employees may have
relevant information.
Section 2.3 Corporate Trust Liabilities under this Agreement
and the Corporate Trust Related Agreements. In no event shall the terms
"Assumed Corporate Trust Liabilities" or "Excluded Corporate Trust
Liabilities" be deemed to include any liabilities of JPM or BNY,
respectively, arising solely out of a violation or breach, or alleged
violation or breach, of this Agreement or the Corporate Trust Related
Agreements.
Section 2.4 Untransferrable Appointments. If BNY is unable
to accept the transfer of any Appointment to be transferred to it
hereunder because of the provisions of Applicable Law or restrictions or
qualification requirements contained in any Corporate Trust Agreement or
otherwise, to the extent permitted by Applicable Law, such Appointment
will be acquired by an Affiliate of BNY and such Affiliate shall, for the
purposes of such Appointment, be deemed to be subject to the terms of
this Agreement (including making all of the representations and
warranties of BNY set forth herein).
ARTICLE III
PURCHASE AND SALE OF BANKING BUSINESS
Section 3.1 Purchase and Sale of Banking Business. (a)
Purchased Banking Assets. At the Closing, and subject to the terms and
conditions set forth herein, BNY will sell, assign, transfer, convey and
deliver, or cause one or more of its Subsidiaries to sell, assign,
transfer, convey and deliver, to JPM, and JPM will purchase, acquire and
accept from BNY or the applicable Subsidiaries of BNY, all right, title
and interest of BNY or its applicable Subsidiaries in, to and under all
of the assets, properties, rights, Contracts and claims of BNY or its
Subsidiaries, wherever located, whether tangible or intangible, real,
personal or mixed, in each case primarily related to the Banking
Business, but excluding the Excluded Banking Assets (the "Purchased
Banking Assets"), including by way of example and not limitation, all of
the following assets, properties, rights, Contracts and claims of BNY and
its Subsidiaries:
(1) all of the real property and related improvements and
fixtures used in the Banking Business (excluding any Excluded
38
Banking Premises), fee title to which is held by BNY or an
Affiliate of BNY, together with all assignable real property
rights, benefits and appurtenances pertaining thereto, a true and
complete list of which, as of the date hereof, is set forth on
Schedule 3.1(a)(1) (the "Owned Banking Premises");
(2) subject to the receipt of any required third-party
consents, the real property leases, subleases, licenses or other
contracts pursuant to which BNY or any Affiliate of BNY leases the
Leased Banking Premises (the "Banking Leases"), a true and complete
list of which Banking Leases, as of the date hereof, is set forth
on Schedule 3.1(a)(2);
(3) the furniture, fixtures, equipment, materials and
supplies identified on Schedule 3.1(a)(3) and all other furniture,
fixtures, equipment, materials and supplies owned by BNY or any of
its Subsidiaries as of the Closing Date and located at the Owned
Banking Premises or the Leased Banking Premises (collectively, the
"Banking Personal Property");
(4) except for any automated teller machine ("ATM")
physically located on an Excluded Banking Premise, a true and
complete list of such ATMs, as of the date hereof, is set forth on
Schedule 3.1(a)(4)(i), all ATMs owned by BNY or any of its
Subsidiaries, a true and complete list of which, as of the date
hereof, is set forth on Schedule 3.1(a)(4)(ii);
(5) (i) all Loans (including the servicing rights relating
thereto of BNY or any of its Subsidiaries) made or purchased by BNY
or any of its Subsidiaries in the Banking Business in the ordinary
course of business (and, if made or purchased after the date
hereof, consistent with Section 12.1 of this Agreement), a true and
complete list of which is set forth on, and is as of the date set
forth on, Schedule 3.1(a)(5)(i), (ii) CRA Loans with an aggregate
balance of no greater than the amount set forth on Schedule
3.1(a)(5)(ii) (the "Purchased CRA Loans") (it being understood
that, in the event that the aggregate CRA Loans of BNY and its
Subsidiaries is in excess of the amount set forth on Schedule
3.1(a)(5)(ii) as of the Closing Date, the Purchased CRA Loans shall
be comprised of the CRA Loans with the earliest dates of
origination), a true and complete list of which CRA Loans is set
forth on, and is as of the date set forth on, Schedule
3.1(a)(5)(ii); (iii) Out-of-Footprint Loans with an aggregate
balance of no greater than $220,000,000 (the "Purchased Out-of-
Footprint Loans") (it being understood that, in the event that the
aggregate Out-of-Footprint Loans of BNY and its Subsidiaries is in
excess of $220,000,000 as of the Closing Date, the Purchased Out-
of-Footprint Loans shall be comprised of the Out-of-Footprint Loans
with the earliest dates of origination), a true and complete list
of which Out-of-Footprint Loans is set forth on, and is as of the
date set forth on, Schedule 3.1(a)(5)(iii), (iv) all loans and
other extensions of credit that are in process by the Banking
Business in the ordinary course of business (and consistent with
Section 12.1 of this Agreement) as of the Close of Business on the
Closing Date but that are not yet "Loans" as defined herein, and
39
(v) the servicing rights of BNY or any of its Subsidiaries held in
connection with the agreement set forth on Schedule 3.1(a)(5)(v),
in each case, together with all Contracts evidencing or executed
and delivered in connection with such Loans or servicing rights and
including all obligations to make additional extensions of credit
thereunder and all related collateral, but excluding, in each case,
the Excluded Loans (collectively, the "Assigned Banking Loans");
(6) all Letters of Credit issued by BNY or any of its
Subsidiaries in the Banking Business in the ordinary course of
business (and, if issued after the date hereof, consistent with
Section 12.1 of this Agreement), which are listed on, and is as of
the date set forth on, Schedule 3.1(a)(6) (collectively, the
"Assumed Letters of Credit"), and all interest rate swaps, caps,
floors, option agreements, foreign exchange, cash management,
futures and forward Contracts and other similar risk management
arrangements and derivative financial instruments entered into for
the account of the Banking Business in connection with the Loans
being transferred pursuant to this Agreement (collectively, the
"Assumed Derivative Products"), a true and complete list of which,
as of the date hereof, is set forth on Schedule 3.1(a)(6);
(7) subject to the receipt of any required third-party
consents, all Contracts identified on Schedule 3.1(a)(7) (together
with the Master Equipment Leases, Banking Leases, Assigned Banking
Loans, Assumed Letters of Credit and the Assumed Derivative
Products, the "Assumed Banking Agreements");
(8) all books, records and other data relating primarily to
the Banking Business, including all files (including suspicious
activity reports to the extent permitted by Applicable Law),
customer and supplier lists, mailing lists, accounting records,
documentation or records relating to the Banking Business or the
administration of the Assumed Banking Agreements and the Assumed
Banking Deposits, real property files with respect to the Owned
Banking Premises and Banking Leases (including lease documentation,
maintenance records, plans and permits, to the extent in the
possession of BNY or any of its Subsidiaries), catalogs, printed
materials and all technical and other data relating to the Banking
Business other than (i) corporate minute books and, except for
Forms W-8 and W-9 and similar tax forms provided to BNY by
customers of the Banking Business, income tax records of BNY or any
of its Subsidiaries, (ii) personnel files and records and (iii)
books and records to the extent relating to accounts that have
terminated prior to Closing and are no longer on the systems of BNY
or any of its Subsidiaries; provided, however, that BNY and its
Subsidiaries shall have the right to retain a copy of all such
books, records and other data that is part of the Purchased Banking
Assets to the extent reasonably necessary for, and solely for use
in connection with, tax, regulatory, litigation or other
legitimate, non-competitive purposes;
(9) any and all rights of BNY or any of its Subsidiaries
that by their terms are transferable and that arise under or
40
pursuant to warranties, representations, indemnifications,
reimbursement agreements, letters of credit, insurance policies to
the extent held for the benefit of BNY or any of its Subsidiaries
in connection with the Banking Business or guaranties in favor of
BNY or any of its Subsidiaries, made by or for the benefit of BNY
or any of its Subsidiaries or their respective customers, issuers
or holders of Securities, predecessors in interest, suppliers,
vendors, or Affiliates of any of the foregoing, to the extent
relating to the other Purchased Banking Assets or the Assumed
Banking Liabilities, in either case with respect to the period
following the Closing;
(10) all U.S. and foreign cash on hand of the Banking
Business at the Close of Business on the Closing Date, including
vault cash, ▇▇▇▇▇ cash, ATM cash (excluding any cash contained in
ATMs not located at a Banking Branch), tellers' cash, prepaid
postage, bank orders, checks, certified checks and cash equivalents
(exclusive of the contents of any safe deposit boxes) located at
the Owned Banking Premises or the Leased Banking Premises, as
determined by a cash count to be mutually conducted by BNY and JPM
(the "Banking Cash on Hand");
(11) accrued income receivable and accounts receivable of
BNY or any of its Subsidiaries to the extent arising from the
Banking Business and existing as of the Closing Date (the "Banking
Receivables"), as set forth on the Final Banking Closing Statement;
(12) all prepaid charges and fees of BNY or any of its
Subsidiaries to the extent arising in the Banking Business and
existing as of the Closing Date (the "Prepaid Banking Expenses"),
as set forth on the Final Banking Closing Statement;
(13) all customer based intangibles relating to the Banking
Business, including, without limitation any core deposit
intangibles relating to the Banking Business;
(14) the routing and transit numbers set forth on Schedule
3.1(a)(14) of BNY or any of its Subsidiaries with respect to the
Banking Branches;
(15) all Intellectual Property owned by BNY or any of its
Subsidiaries that is set forth on Schedule 3.1(a)(15)
(collectively, the "Purchased Banking IP");
(16) all Overdrafts (subject to appropriate reserves), other
than charged off Overdrafts;
(17) any income, commissions, compensation or allowances
receivable or payable after the Closing Date in respect of
annuities (including additional premium payments thereto after the
Closing Date) and interests in mutual funds sold by BNY or any of
its Subsidiaries in the conduct or operation of the Banking
Business on or prior to the Closing Date;
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(18) all assets related to the mutual fund and reserve fund
sweep accounts for the Assumed Banking Deposits;
(19) the benefits, rights, rights of action and claims
(express or implied) related to the Purchased Banking Assets and
Assumed Banking Liabilities acquired and assumed by JPM pursuant to
the terms of this Agreement; and
(20) any unamortized FAS 91 Fees from the Banking Business
which are not otherwise deducted in determining the Net Book Value
of any Purchased Banking Asset.
(b) Excluded Banking Assets. Notwithstanding anything to
the contrary contained in Section 3.1(a), BNY and its Subsidiaries will
retain ownership of the following assets, properties, rights, Contracts
and claims, wherever located, whether tangible or intangible, real,
personal or mixed, which assets, properties, rights, Contracts and claims
shall be excluded from the Purchased Banking Assets and shall not be
transferred or sold hereunder (collectively, the "Excluded Banking
Assets"):
(1) all assets, properties, rights, Contracts and claims,
including loans and extensions of credit in process, wherever
located, whether tangible or intangible, real, personal or mixed,
primarily related to the Excluded BNY Business;
(2) all right, title and interest of BNY and its
Subsidiaries in BNY Mortgage Company LLC and Promontory
Interfinancial Network, LLC;
(3) other than the Banking Leases, all leases, subleases,
licenses or other Contracts pursuant to which BNY or any of its
Subsidiaries leases, subleases or licenses real property;
(4) all furniture, fixtures, equipment, materials and
supplies, other than those items contemplated by Section 3.1(a)(3)
and all works of art set forth on Schedule 3.1(b)(4);
(5) all Excluded Banking Agreements;
(6) any rights and obligations of BNY under securitization
agreements, including any interest in Assigned Banking Loans that
are subject of a securitization sponsored by BNY (including any
retained residual interest) but not including any right to the
Assigned Banking Loans after ceasing to be the subject to such
securitization agreement;
(7) all Tax refunds or credits or claims therefor to which
BNY is entitled under Article XIV;
42
(8) all assets related to BNY's or any of its Subsidiaries'
employee benefit arrangements, including the Banking Employee
Plans, except as otherwise provided in Section 13.2;
(9) the Excluded Banking Premises and other real property,
fixtures and improvements thereon;
(10) other than the Purchased Banking IP and except as
otherwise set forth in a Banking Related Agreement, Section 12.14
or otherwise in this Agreement, all IT Assets and Intellectual
Property (including, without limitation, computer software, systems
or programs or computer software agreements) of BNY and its
Subsidiaries, including any rights (ownership, licensed or
otherwise) to use the ▇▇▇▇ "BNY," any other trademarks, service
marks, brand names, Internet domain names, logos, trade dress,
trade names, corporate names and other indicia of origin, and any
derivatives of the foregoing, and all registrations and
applications for registration of any of the foregoing, and
including without limitation those identified on Schedule
3.1(b)(10), and all goodwill associated with and symbolized by the
foregoing;
(11) all books, records and other data that cannot, without
unreasonable effort or expense, be separated from books and records
maintained by BNY in connection with businesses other than the
Banking Business or to the extent that such books, records and
other data relate to Excluded Banking Assets, Excluded Banking
Liabilities or Banking Business Employees who do not become
Transferred Banking Employees, and all personnel files and records;
(12) all licenses, charters, and legal entities of BNY or
its Subsidiaries;
(13) (i) mortgages owned by BNY and held by BNY's treasury
department, (ii) all CRA Loans other than the Purchased CRA Loans,
(iii) all Loans (other than the Purchased CRA Loans) originated by
BNY Mortgage Company LLC; (iv) the employee loan portfolio set
forth on Schedule 3.1(b)(13); (v) all Out-of-Footprint Loans other
than the Purchased Out-of-Footprint Loans; and (vi) all Student
Loans (collectively, the "Excluded Loans");
(14) all Contracts other than those Contracts, if any,
specifically set forth in clauses (1) through (18) of Section
3.1(a);
(15) the assets set forth on Schedule 3.1(b)(15);
(16) any Loan that was charged off more than two years prior
to the Closing Date (other than any Loan that is actively being
collected or that is otherwise being worked out as of the Closing
Date); and
(17) charged off Overdrafts.
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Section 3.2 Assumption of Banking Liabilities. (a) Assumed
Banking Liabilities. From and after the Closing, JPM will assume, and
will pay, perform and discharge as they become due, all of the
liabilities and obligations set forth in this Section 3.2(a), other than
any Excluded Banking Liability (collectively, the "Assumed Banking
Liabilities"):
(1) the Assumed Banking Deposits;
(2) the Assumed Banking Agreements;
(3) all liabilities and obligations relating to, arising
from or in connection with the Transferred Banking Employees and
their employment, including all compensation, benefits, severance,
workers compensation and welfare benefit claims and employment-
related liabilities arising, or relating to the conduct of the
Banking Business, on or after the Closing Date (as such term is
used in Section 13.2(a));
(4) any Accrued Interest on the Assumed Banking Deposits,
where such Accrued Interest is not otherwise deducted in
determining the Net Book Value of any Purchased Banking Asset; and
(5) other than the Excluded Banking Liabilities, all other
liabilities and obligations relating in any manner to or arising
out of the Banking Business, the Purchased Banking Assets or the
other Assumed Banking Liabilities, of whatever kind or nature
primary or secondary, direct or indirect, known or unknown, accrued
or unaccrued, absolute or contingent, contractual or tortious or
otherwise.
JPM's obligations under this Section 3.2(a) shall not be subject to
offset or reduction by reason of any actual or alleged breach of any
representation, warranty or covenant contained in this Agreement or any
document delivered in connection herewith or any right or alleged right
to indemnification hereunder or thereunder. All periodic fees or charges
shall be shared on proportionate basis as of the Closing Date in
accordance with Section 4.5.
(b) Excluded Banking Liabilities. Notwithstanding anything
to the contrary set forth in this Agreement, BNY and its Subsidiaries
will retain the following liabilities and obligations, and such
liabilities and obligations shall not be assumed by JPM or any of its
Subsidiaries and shall be excluded from the Assumed Banking Liabilities
(collectively, the "Excluded Banking Liabilities"):
(1) any liability or obligation of BNY or any of its
Subsidiaries of any nature whatsoever, whether accrued, absolute,
contingent or otherwise, asserted or unasserted, known or unknown,
not primarily related to the Banking Business;
(2) any liability or obligation of BNY or any of its
Subsidiaries of any nature whatsoever, whether accrued, absolute,
44
contingent or otherwise, asserted or unasserted, known or unknown,
to the extent relating to or arising from or in connection with any
Excluded Banking Asset;
(3) other than the Assumed Banking Deposits assumed
pursuant to Section 3.2(a)(1), any liability or obligation of BNY
or any of its Subsidiaries of any nature whatsoever, whether
accrued, absolute, contingent or otherwise, asserted or unasserted,
known or unknown, to the extent existing at the time of, or arising
out of or relating to acts, events or omissions to act that
occurred prior to, the Closing or in connection with the conduct by
BNY or any of its Subsidiaries of the Banking Business prior to the
Closing, whether in violation of any Applicable Law, Contracts or
fiduciary duties or otherwise;
(4) any liability or obligation of BNY or any of its
Subsidiaries for any Excluded Banking Taxes that are the
responsibility of BNY under Article XIV;
(5) any compensation and benefit liability to Banking
Business Employees with respect to services provided prior to the
Closing Date and any Liabilities under the Banking Employee Plans
and Banking Employment Agreements incurred prior to the Closing
Date, whether or not such claims are submitted for payment or
reimbursement on or before the Closing Date, except to the extent
otherwise provided under Section 13.2;
(6) any liability or obligation for retiree medical and
life insurance benefits for Banking Business Employees under
Banking Employee Plans;
(7) any Controlled Group Liability arising under any
Banking Employee Plan or any of employee benefit plan sponsored,
maintained or contributed to or by an ERISA Affiliate of BNY or any
of its Subsidiaries; and
(8) the liabilities and obligations set forth on Schedule
3.2(b)(8).
After the Closing, JPM shall provide BNY with reasonable access during
business hours to Transferred Banking Employees as BNY deems necessary
and appropriate for purposes of handling claims related to this Section
3.2 for which such Transferred Banking Employees may have relevant
information.
Section 3.3 Arrangements with Respect to IRAs and ▇▇▇▇▇. On
or before the Closing Date, BNY shall cause notice (such notice to be
approved in advance by JPM) to be sent to each depositor of an Assumed
Banking Deposit held by BNY in an ▇▇▇ and each "employer" who established
an Assumed Banking Deposit pursuant to a ▇▇▇▇▇ plan, regarding the
resignation of BNY as ▇▇▇ custodian or ▇▇▇▇▇ plan trustee, as applicable.
Such resignation shall be effective as of the date that is 30 days
following the date of the notice or, if later, the Closing Date. If a
depositor of an Assumed Banking Deposit held by BNY in an ▇▇▇ or an
employer who established an Assumed Banking Deposit pursuant to ▇▇▇▇▇ or
other retirement plan fails to appoint another trustee or custodian for
such account within this period, such depositor or employer will be
45
deemed to have appointed JPM as successor trustee or custodian for the
deposit account. Upon its appointment as successor trustee or custodian
for such accounts, as applicable, JPM shall perform the services and
carry out the duties and obligations required of it under the applicable
plans, the Code and Applicable Laws. If, notwithstanding the foregoing,
as of the Closing Date, JPM shall be unable to retain deposit liabilities
in respect of an ▇▇▇, ▇▇▇▇▇ or other retirement plan, such deposit
liabilities shall be excluded from the Assumed Banking Deposits for
purposes of this Agreement.
ARTICLE IV
PURCHASE PRICE AND ADJUSTMENTS
Section 4.1 Corporate Trust Payments. (a) Initial Corporate
Trust Closing Payment. On the Closing Date, in consideration for the
purchase of the Purchased Corporate Trust Assets (other than the
Purchased Corporate Trust Assets that the parties mutually agree are to
be transferred on a Subsequent Transfer Date) (the "Initial Purchased
Corporate Trust Assets"), and the benefits contemplated by the Corporate
Trust Related Agreements, BNY agrees to (1) assume the Assumed Corporate
Trust Liabilities, (2) consummate the Banking Sale on the terms set forth
in this Agreement and (3) pay to JPM an amount (the "Initial Corporate
Trust Closing Payment") equal to the Corporate Trust Net Book Value of
the assets and liabilities to be transferred from JPM to BNY at the
Closing, as set forth on the Preliminary Corporate Trust Closing
Statement pursuant to Section 4.2(a) (the "Estimated Closing Corporate
Trust Net Book Value").
(b) Subsequent Corporate Trust Closing Payment. On each
Subsequent Transfer Date, in consideration of the purchase of the
Purchased Corporate Trust Assets to be transferred on such date (the
"Subsequent Purchased Corporate Trust Assets"), BNY agrees to (1) assume
the Assumed Corporate Trust Liabilities with respect to such Subsequent
Purchased Corporate Trust Assets and (2) pay to JPM an amount (a
"Subsequent Corporate Trust Closing Payment") equal to the Corporate
Trust Net Book Value relating to the Subsequent Purchased Corporate Trust
Assets, as set forth in the applicable Subsequent Corporate Trust Closing
Statement (each, an "Estimated Subsequent Transfer Corporate Trust Net
Book Value"). The Closing Date and each Subsequent Transfer Date are
sometimes referred to herein as a "Transfer Date."). If on a Subsequent
Transfer Date, BNY pays JPM for the Corporate Trust Assets located in a
particular country in such country's foreign currency and such payment is
duplicative of any amounts previously or subsequently paid by BNY to JPM
in respect of such Corporate Trust Assets, then JPM agrees to reimburse
BNY such duplicative payment as promptly as practicable.
(c) If BNY has not paid to JPM the Corporate Trust Net Book
Value with respect to any Purchased Corporate Trust Asset (either on the
Closing Date or on a Subsequent Transfer Date), upon the earliest to
occur of (i) the fourth anniversary of the Closing, (ii) the date on
which BNY sells or enters into an agreement with respect to the sale of
such Purchased Corporate Trust Asset or all or substantially all of the
46
assets in that portion of the Corporate Trust Business encompassing such
Purchased Corporate Trust Asset and (iii) BNY's ceasing to use reasonable
best efforts to cause as promptly as practicable the occurrence of a
Subsequent Transfer Date with respect to such Corporate Trust Asset from
BNY to JPM pursuant to Section 10.3 and 10.9, then BNY shall promptly pay
to JPM the Corporate Trust Net Book Value of such Purchased Corporate
Trust Asset in accordance with the provisions of Section 4.1(b) as if
such payment were occurring as part of a Subsequent Transfer Date, and a
Subsequent Transfer Date shall be deemed to have occurred with respect to
such Purchased Corporate Trust Asset for all purposes hereunder.
(d) For the avoidance of doubt, the provisions in this
Agreement relating to Subsequent Transfer Dates and Subsequent Corporate
Trust Closing Payments shall not modify the principles or agreements of
the parties set forth in Section 10.9 or Article XVII, and, for purposes
of Section 10.9 and Article XVII, BNY shall be deemed to have acquired
all of the Purchased Corporate Trust Assets and assume and be responsible
for all of the Assumed Corporate Trust Liabilities (including any
Purchased Corporate Trust Asset and Assumed Corporate Trust Liability
that is a Restricted Item) as of the Closing Date.
(e) The term "Corporate Trust Net Book Value" shall mean,
as of any particular date, the aggregate net book value as of such date,
determined in accordance with Schedule 4.2(a).
Section 4.2 Corporate Trust Post-Closing Payments. (a)
Preliminary Corporate Trust Closing Statement. Not less than five (5)
Business Days before an expected Transfer Date, JPM shall deliver to BNY
a closing statement prepared in accordance with GAAP and consistent with
the books of account of the Corporate Trust Business, which closing
statement shall be substantially in the form attached hereto as Schedule
4.2(a), setting forth the Corporate Trust Net Book Value as of a date no
earlier than thirty (30) days before the expected Transfer Date (the
"Preliminary Corporate Trust Closing Statement") or, with respect to a
Subsequent Transfer Date, as of a date not earlier than thirty (30) days
before the expected Subsequent Transfer Date (the "Subsequent Corporate
Trust Closing Statement"), which Preliminary Corporate Trust Closing
Statement or Subsequent Corporate Trust Closing Statement shall be
reasonably agreed upon by BNY.
(b) Final Corporate Trust Closing Statement.
(1) Not later than sixty (60) days following a Transfer
Date, JPM shall deliver to BNY an adjusted closing statement
prepared in a manner consistent with the Preliminary Corporate
Trust Closing Statement or Subsequent Corporate Trust Closing
Statement, as applicable (each, a "Final Corporate Trust Closing
Statement"), which shall set forth the calculation of the Corporate
Trust Net Book Value as of the close of business on the applicable
Transfer Date (each, a "Final Corporate Trust Net Book Value").
47
(2) Within thirty (30) days following the receipt by BNY of
the applicable Final Corporate Trust Closing Statement, BNY shall
deliver to JPM in writing either (x) its agreement as to the
calculation of the Final Corporate Trust Closing Statement or (y)
its dispute thereof, specifying in reasonable detail the nature of
its dispute ("BNY's Objection"). If BNY shall not have delivered
BNY's Objection to JPM within thirty (30) days following the
receipt by BNY of the Final Corporate Trust Closing Statement, then
BNY shall be deemed to have accepted and agreed to the calculation
of the Final Corporate Trust Net Book Value set forth in JPM's
Final Corporate Trust Closing Statement.
(3) During the thirty (30) days after the delivery of BNY's
Objection to JPM, the parties hereto shall attempt in good faith to
resolve any dispute set forth in BNY's Objection, and finally
determine the Final Corporate Trust Closing Statement. If at the
end of such period, the parties hereto have failed to reach
agreement with respect to such dispute, JPM and BNY shall jointly
retain a mutually agreed upon independent, nationally recognized
firm of accountants (the "Accountant"), which Accountant shall act
as arbitrator and shall determine all disputed portions of the
Final Corporate Trust Closing Statement, in accordance with the
terms and conditions of this Agreement within thirty (30) days
after the submission; provided, however, that the Accountant's
determination as to any item disputed by or on behalf of any party
shall not be more beneficial to the other party than the
determination of that item by the other party in the Final
Corporate Trust Closing Statement. The fees, expenses and costs of
the Accountant for the services described herein shall be allocated
between JPM and BNY in the same proportion that the aggregate
amount of the items unsuccessfully disputed by each (as finally
determined by the Accountant) bears to the total amount of the
disputed items. JPM and BNY shall each promptly reimburse the
other to the extent that the other paid more than the amount so
required pursuant to the preceding sentence. The Final Corporate
Trust Closing Statement, as agreed upon by the parties and/or
determined under this Section 4.2(b), shall be final and binding
upon the parties.
(c) Corporate Trust Post-Closing Payment.
(1) On the Business Day after each date on which the
parties have agreed upon a Final Corporate Trust Closing Statement
(or the date on which such Final Corporate Trust Closing Statement
shall have otherwise been finally determined as set forth in
Section 4.2(b)):
(i) if the Final Corporate Trust Net Book Value for a
particular Transfer Date is greater than the Estimated Closing
Corporate Trust Net Book Value or the applicable Estimated
Subsequent Transfer Corporate Trust Net Book Value for such
Transfer Date (the "Estimated Corporate Trust Net Value"), then BNY
shall pay to JPM an amount equal to the difference between such
Final Corporate Trust Net Book Value and such Estimated Corporate
Trust Net Book Value; and
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(ii) if the Final Corporate Trust Net Book Value for a
particular Transfer Date is less than the Estimated Corporate Trust
Net Book Value for such Transfer Date, then JPM shall pay to BNY an
amount equal to the difference between such Estimated Corporate
Trust Net Book Value and such Final Corporate Trust Net Book Value;
in each of cases (i) and (ii), plus interest on such amount
from the applicable Transfer Date up to but excluding the date on
which such payment is made at a rate per annum equal to the average
of the Federal Funds Rate for each day from the applicable Transfer
Date up to but excluding the date on which such payment is made,
calculated on the basis of a year of 360 days and the actual number
of days elapsed (each such payment, a "Corporate Trust Post-Closing
Payment").
(2) The Corporate Trust Post-Closing Payment, as and when
due and payable under this Section 4.2(c), shall be made by federal
funds wire transfer of immediately available funds to the
account(s) of the party entitled to receive such payment, which
account(s) shall be identified by BNY to JPM or by JPM to BNY, as
applicable, not less than two (2) Business Days prior to the date
such payment is due.
(3) The parties hereto shall make available to each other
such work papers, schedules and other supporting data in their
possession or under their control as may be reasonably requested to
enable the requesting party to verify the amounts set forth in the
Preliminary Corporate Trust Closing Statement and the Final
Corporate Trust Closing Statement.
Section 4.3 Banking Closing Payment. (a) On the Closing Date,
in consideration for the purchase of the Purchased Banking Assets (and
the benefits contemplated by the Banking Related Agreement), JPM agrees
to assume the Assumed Banking Liabilities and to consummate the Corporate
Trust Sale on the terms set forth in this Agreement.
(b) On the Closing Date, BNY shall pay to JPM an amount in
U.S. dollars (the "Banking Closing Payment") equal to:
(1) an amount equal to the aggregate Net Book Value, as set
forth on the Preliminary Banking Closing Statement pursuant to
Section 4.4(a), of (i) the Assumed Banking Deposits, plus Accrued
Interest thereon, and (ii) the other Assumed Banking Liabilities,
minus
(2) an amount (the "Banking Purchase Price") equal to the
sum of the following, without duplication, in each case as set
forth on the Preliminary Banking Closing Statement pursuant to
Section 4.4(a): (A) the aggregate Net Book Value of: (i) the
Banking Personal Property; (ii) the ATMs owned by BNY, (iii) the
Assigned Banking Loans and Overdrafts, net of charge-offs and
purchase premiums, plus accrued and unpaid interest thereon, and
49
net of the reserves established by BNY in accordance with GAAP
consistently applied (it being understood that the reserves,
expressed as a percentage of aggregate Loans and accrued and unpaid
interest thereon, as reflected in the Preliminary Banking Closing
Statement or the Final Banking Closing Statement, shall be no less
than the percentage set forth on Schedule 4.3(b)(2)), (iv) the
Owned Banking Premises; and (v) the Prepaid Banking Expenses; plus
(B) the amount of Banking Cash on Hand; plus (C) One Hundred,
Twenty-Five Million Dollars ($125,000,000).
(c) The Parties agree that, on the Closing Date, the
Assumed Derivative Products to be transferred from BNY to JPM will be
valued at fair market value (to be mutually agreed). The Parties also
will use reasonable best efforts to agree upon the most efficient way to
effect such transfer.
Section 4.4 Banking Post-Closing Payment (a) Preliminary
Banking Closing Statement. Not less than five (5) Business Days before
the expected Closing Date, BNY shall deliver to JPM a closing statement
prepared in accordance with GAAP consistently applied (except as
otherwise specified in Section 4.3) and consistent with the books of
account of the Banking Business, which closing statement shall be
substantially in the form attached hereto as Schedule 4.4(a), setting
forth the calculation of the Banking Closing Payment as of a date no
earlier than thirty (30) days before the expected Closing Date (the
"Preliminary Banking Closing Statement"), which Preliminary Banking
Closing Statement shall be reasonably agreed upon by JPM.
(b) Final Banking Closing Statement.
(1) Not later than sixty (60) days following the Closing
Date, BNY shall deliver to JPM an adjusted closing statement
prepared in a manner consistent with the Preliminary Banking
Closing Statement (the "Final Banking Closing Statement"), which
shall set forth the calculation of the Banking Closing Payment that
would have been made if it had been calculated as of the Close of
Business on the Closing Date rather than as set forth in the
Preliminary Banking Closing Statement (the "Final Banking
Payment").
(2) Within thirty (30) days following the receipt by JPM of
the Final Banking Closing Statement, JPM shall deliver to BNY in
writing either (x) its agreement as to the calculation of the Final
Banking Payment or (y) its dispute thereof, specifying in
reasonable detail the nature of its dispute ("JPM's Objection").
If JPM shall not have delivered JPM's Objection to BNY within
thirty (30) days following the receipt by JPM of the Final Banking
Closing Statement, then JPM shall be deemed to have accepted and
agreed to the calculation of the Final Banking Payment set forth in
BNY's Final Banking Closing Statement.
(3) During the thirty (30) days after the delivery of JPM's
Objection to BNY, the parties hereto shall attempt in good faith to
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resolve any dispute set forth in JPM's Objection, and finally
determine the Final Banking Payment. If at the end of such period,
the parties hereto have failed to reach agreement with respect to
such dispute, each of the parties hereto shall within five (5) days
after the end of such period select the Accountant, which
Accountant shall act as arbitrator and shall determine all disputed
portions of the Final Banking Closing Statement and the Final
Banking Payment, in accordance with the terms and conditions of
this Agreement within thirty (30) days after the submission;
provided, however, that the Accountant's determination as to any
item disputed by or on behalf of any party shall not be more
beneficial to the other party than the determination of that item
by the other party in the Final Banking Closing Statement and the
Final Banking Payment. The fees, expenses and costs of the
Accountant for the services described herein shall be allocated
between JPM and BNY in the same proportion that the aggregate
amount of the items unsuccessfully disputed by each (as finally
determined by the Accountant) bears to the total amount of the
disputed items. JPM and BNY shall each promptly reimburse the
other to the extent that the other paid more than the amount so
required pursuant to the preceding sentence. The Final Banking
Closing Statement and the Final Banking Payment, as agreed upon by
the parties and/or determined under this Section 4.4(b), shall be
final and binding upon the parties.
(c) Banking Post-Closing Payment.
(1) On the Business Day after the date on which the parties
have agreed upon the Final Banking Payment (or the date on which
such Final Banking Payment shall have otherwise been finally
determined as set forth in Section 4.4(b)):
(i) if the Final Banking Payment is greater than the
Banking Closing Payment, then BNY shall pay to JPM an amount equal
to the difference between the Final Banking Payment and the Banking
Closing Payment; and
(ii) if the Final Banking Payment is less than the Banking
Closing Payment, then JPM shall pay to BNY an amount equal to the
difference between the Banking Closing Payment and the Final
Banking Payment;
in each of cases (i) and (ii), plus interest on such amount
from the Closing Date up to but excluding the date on which such
payment is made at a rate per annum equal to the average of the
Federal Funds Rate for each day from the Closing Date up to but
excluding the date on which such payment is made, calculated on the
basis of a year of 360 days and the actual number of days elapsed
(such payment, the "Banking Post-Closing Payment").
(2) The Banking Post-Closing Payment, as and when due and
payable under this Section 4.4(c), shall be made by federal funds
wire transfer of immediately available funds to the account(s) of
the party entitled to receive such payment, which account(s) shall
be identified by JPM to BNY or by BNY to JPM, as applicable, not
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less than two (2) Business Days prior to the date such payment is
due.
(3) The parties hereto shall make available to each other
such work papers, schedules and other supporting data in their
possession or under their control as may be reasonably requested to
enable the requesting party to verify the amounts set forth in the
Preliminary Banking Closing Statement and the Final Banking Closing
Statement.
Section 4.5 Adjustment to Payments for Expenses, Prepayments
and Fees. (a) Except as otherwise provided herein, all fees and expenses
with respect to the Purchased Corporate Trust Assets and Assumed
Corporate Trust Liabilities (other than any costs or expenses associated
with the Corporate Trust Conversion) shall be prorated between BNY, on
the one hand, and JPM, on the other hand, based on the full amount of the
latest available bills or statements on the basis of a three hundred
sixty-five (365)-day calendar year (except to the extent accrued on a
three hundred sixty (360)-day calendar year, in which case proration
shall be based on a three hundred sixty (360)-day calendar year) as of
the Close of Business on the Closing Date to reflect the intention of the
parties that the economics of the Corporate Trust Business (except to the
extent of the Corporate Trust Receivables and the Prepaid Corporate Trust
Expenses purchased by BNY pursuant to Sections 2.1(a)(8) and 2.1(a)(9),
respectively) shall be for the account of JPM up to the Close of Business
on the Closing Date and thereafter shall be for the account of BNY. All
fees and expenses with respect to the Purchased Banking Assets and
Assumed Banking Liabilities (other than any costs or expenses associated
with the Banking Conversion) shall be prorated between JPM, on the one
hand, and BNY, on the other hand, based on the full amount of the latest
available bills or statements on the basis of a three hundred sixty-five
(365)-day calendar year (except to the extent accrued on a three hundred
sixty (360)-day calendar year, in which case proration shall be based on
a three hundred sixty (360)-day calendar year) as of the Close of
Business on the Closing Date to reflect the intention of the parties that
the economics of the Banking Business (except to the extent of the
Banking Receivables and the Prepaid Banking Expenses purchased by JPM
pursuant to Sections 3.1(a)(11) and 3.1(a)(12), respectively) shall be
for the account of BNY up to the Close of Business on the Closing Date
and thereafter shall be for the account of JPM. In furtherance of the
foregoing, all operating expenses related to the Corporate Trust Business
or the Banking Business, as the case may be, including, but not limited
to, rent, utility, maintenance, and service expenses attributable to
operations of the Corporate Trust Business or the Banking Business, as
applicable, until the Close of Business on the Closing Date shall be paid
by and shall be the obligation of JPM or BNY, respectively, as the seller
of such business. All of such expenses attributable to operations of the
Corporate Trust Business or the Banking Business, as the case may be,
after the Close of Business on the Closing Date shall be paid by and be
the obligation of BNY or JPM, respectively, as the purchaser of such
business. All real and personal property, use and other Taxes imposed on
a time basis with respect to the Purchased Corporate Trust Assets and the
Assumed Corporate Trust Liabilities shall be pro rated between BNY, on
the one hand, and JPM, on the other hand, in the same manner based on the
52
full amount of the Tax for the relevant period, unless such amount is not
reasonably ascertainable, in which case the full amount of the Tax for
the prior period shall be used. All real and personal property, use and
other Taxes imposed on a time basis with respect to the Assumed Purchased
Banking Assets and Assumed Banking Liabilities shall be pro rated between
JPM, on the one hand, and BNY, on the other hand, in the same manner
based on the full amount of the Tax for the relevant period, unless such
amount is not reasonably ascertainable, in which case the full amount of
the Tax for the prior period shall be used. Any rental income from
subtenants or other third-party occupants of real property shall also be
prorated between JPM, on the one hand, and BNY, on the other hand, as of
the Closing Date.
(b) To the extent that any fees, expenses or Taxes
described in Section 4.5(a) are not discovered or the actual amount
thereof is not known prior to the final determination of the Final
Corporate Trust Closing Statement or the Final Banking Closing Statement,
as applicable, the parties shall cooperate with one another so that BNY
and JPM, or JPM and BNY, as the case may be, each pays its appropriate
share of any such fee, expense or Tax, depending upon whether such
expense relates to the period before, or after the Close of Business on
the Closing Date.
(c) Notwithstanding anything to the contrary in this
Section 4.5 or otherwise in this Agreement, and subject to Sections 11.9
and 12.10, (i) BNY shall not be liable for any termination fees,
penalties or other break costs incurred by JPM or any of its Subsidiaries
as a result of the Corporate Trust Conversion, and (ii) JPM shall not be
liable for any termination fees, penalties or other break costs incurred
by BNY or any of its Subsidiaries as a result of the Banking Conversion.
Section 4.6 Allocation of Purchase Price. (a) Within one
hundred eighty (180) days after the Closing, (i) the Applicable Buyer
shall prepare and deliver to the Applicable Seller a draft of a statement
(the "Applicable Allocation Statement") setting forth its proposed
calculation of the aggregate amount of consideration paid by such
Applicable Buyer for the Purchased Banking Assets or the Purchased
Corporate Trust Assets, as applicable (the "Applicable Purchased Assets")
and the proposed allocation of such aggregate amount among the Applicable
Purchased Assets (including, for purposes of the election in Section
14.1(e), among the assets of ▇▇▇▇▇▇ Services, Inc.). If within thirty
(30) days after the Applicable Seller's receipt of the draft Applicable
Allocation Statement, the Applicable Seller shall not have objected in
writing to such draft statement, then such draft statement shall become
the Applicable Allocation Statement. In the event that the Applicable
Seller objects in writing within such 30-day period, the Applicable Buyer
and the Applicable Seller shall negotiate in good faith to resolve the
dispute. If the Applicable Buyer and the Applicable Seller are unable to
reach an agreement within thirty (30) days after the Applicable Seller's
receipt of the draft Applicable Allocation Statement, then such dispute
shall be resolved and the Applicable Allocation Statement shall be
determined by an independent, nationally recognized firm of accountants
mutually selected by the parties. The Applicable Allocation Statement,
as agreed upon by the Applicable Buyer and the Applicable Seller and/or
determined under this Section 4.6(a), shall be final and binding upon the
parties. Each of the Applicable Buyer and the Applicable Seller shall
53
bear all fees and costs incurred by it in connection with the
determination of the Applicable Allocation Statement, except that the
parties shall each pay one-half (50%) of the fees and expenses of such
accounting firm. Notwithstanding the foregoing provisions of this
Section 4.6(a), (i) BNY and JPM shall cooperate together in good faith to
allocate consideration, as applicable, among the Applicable Purchased
Assets for purposes of sales, use and other similar Taxes no later than
sixty (60) days after the Closing Date (the "Sales and Use Allocation")
and (ii) the allocation of consideration determined in accordance with
the preceding provisions of this Section 4.6 shall be consistent with the
Sales and Use Allocation. The Sales and Use Allocation shall be
consistent with Schedule 14.5(c).
(b) The Applicable Allocation Statement will be prepared in
accordance with Section 1060 of the Code and the rules and regulations
promulgated thereunder, and subject to the provisions of Section 14.11
(Tax-Deferred Exchange); provided, however, that (i) the Applicable
Allocation Statement shall be consistent with Schedule 14.5(c) and any
valuation agreed to by the parties on or prior to the Closing Date
pursuant to Section 14.5(c), and (ii) no amount shall be allocated to any
of the covenants contained in Sections 10.11 or 10.12 or any of the
Related Agreements.
(c) The parties hereto agree to report the allocation of
the total consideration among the Applicable Purchased Assets in a manner
consistent with the Applicable Allocation Statement, and agree to act in
accordance with such statements in the preparation and filing of all Tax
Returns (including filing Form 8594 with their respective Federal income
Tax Returns for the taxable year that includes the Closing Date and any
other forms or statements required by the Code, Treasury regulations, the
Internal Revenue Service or any applicable state or local Taxing
Authority) and in the course of any Tax audit, Tax review or Tax
litigation relating thereto; provided that neither the Applicable Buyer
or any of its Affiliates nor the Applicable Seller or any of its
Affiliates will be obligated to litigate any challenge to such allocation
of the aggregate consideration by a Taxing Authority.
(d) The parties will promptly inform one another of any
challenge by any Taxing Authority to any allocation made pursuant to this
Section 4.6 and agree to consult and keep one another informed with
respect to the status of, and any discussion, proposal or submission with
respect to, such challenge.
(e) Notwithstanding the foregoing, the Parties agree to
cooperate with each other to determine the appropriate amount of
consideration to allocate to each real property asset contemplated to be
transferred pursuant to the terms of this Agreement for purposes of
determining the Transfer Tax filing (if applicable to such asset)
described in Section 14.5.
54
ARTICLE V
THE CLOSING
Section 5.1 Closing Time and Place. Subject to Schedule A,
the consummation of the transfer of the Purchased Corporate Trust Assets,
the Purchased Banking Assets, the Assumed Corporate Trust Liabilities and
the Assumed Banking Liabilities, and the payment of the Corporate Trust
Closing Payment and the Banking Closing Payment, in each case as
contemplated by this Agreement, shall take place at a closing (the
"Closing") to be held at 2:00 p.m., New York time, at the offices of
Wachtell, Lipton, ▇▇▇▇▇ & ▇▇▇▇, ▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇, (i) three (3) Business Days following the satisfaction or waiver
of each of the conditions set forth in Article XV (other than those
conditions that by their nature are to be satisfied or waived at the
Closing, but subject to the satisfaction or waiver of those conditions),
or (ii) if later and the parties mutually agree in writing, on the first
Business Day of the month immediately following the date on which the
conditions set forth in Article XV (other than those conditions that by
their nature are to be satisfied or waived at the Closing, but subject to
the satisfaction or waiver of those conditions) have been satisfied or
waived, or (iii) at such other place, time or date as may be mutually
agreed upon in writing by the parties. The date on which the Closing
hereunder occurs is sometimes referred to herein as the "Closing Date",
and the Closing shall be deemed effective as of 2:00 p.m., New York time,
on the Closing Date. If the Closing Date occurs on a day other than a
Business Day, any wire transfers that otherwise would have been made on
the Closing Date shall be evidenced on the Closing Date through
arrangements mutually agreed by the parties, and such wire transfers
shall occur on the first Business Day following the Closing Date. The
consummation of the transfer of certain Subsequent Purchased Corporate
Trust Assets and the payment of the Subsequent Corporate Trust Closing
Payment as contemplated by this Agreement, in each case as mutually
agreed by the parties hereto, shall occur at such places, times and dates
(each, a "Subsequent Transfer Date") as mutually agreed upon in writing
by the parties; provided that the parties agree to cause the Subsequent
Transfer Date to occur with respect to any Subsequent Purchased Corporate
Trust Asset as promptly as practicable after any cause of a Purchased
Corporate Trust Asset being a Subsequent Purchased Corporate Trust Asset
(instead of a Purchased Corporate Trust Asset to be transferred at the
Closing) has ceased, been satisfied or has abated.
Section 5.2 Closing Documents. (a) Deliveries of JPM. At the
Closing, JPM shall deliver the following documents to BNY, all of which
shall be in form reasonably satisfactory to BNY:
(1) the updated JPM Disclosure Schedules contemplated by
Section 10.13(a);
(2) duly executed counterparts to the Servicing Agreement;
(3) the officer's certificate contemplated by Section
15.2(d);
55
(4) all previously received written instruments or
documents evidencing any third-party consents received in
connection with the transfer of the Purchased Corporate Trust
Assets or the assumption of the Assumed Corporate Trust Liabilities
as contemplated by this Agreement;
(5) executed landlord consents to assignment or sublease
with respect to each Corporate Trust Lease that requires the
consent of any party to the assignment or sublease, as applicable
thereof subject to Section 11.3;
(6) duly executed counterparts to the Assignment and
Assumption Agreements with respect to each Corporate Trust Lease to
be assigned, each containing customary indemnifications from the
assignor and assignee thereunder, provided that such
indemnifications shall be consistent with the provisions of Article
XVII hereof (the "Corporate Trust Lease Assignments");
(7) a duly executed counterpart to one or more assignment
and assumption agreements with respect to Contracts that are part
of the Purchased Corporate Trust Assets (other than the Corporate
Trust Leases) and with respect to the Assumed Corporate Trust
Liabilities to be assumed (the "Corporate Trust Assignments");
(8) a duly executed counterpart to a ▇▇▇▇ of sale with
respect to the fixed assets and other tangible personal property
constituting Purchased Corporate Trust Assets;
(9) stock certificates or appropriate certificates of
ownership representing all of the issued and outstanding capital
stock of each Transferred Entity, in each case accompanied by stock
powers duly executed in blank;
(10) an affidavit pursuant to Section 1445 of the Code
certifying to the non-foreign status of JPM or any of its
Affiliates conveying real property located in the United States
hereunder;
(11) duly executed counterparts to the Banking Lease
Assignments;
(12) a duly executed counterpart to the Banking Assignment;
and
(13) all other documents and instruments necessary to
(i) transfer the Purchased Corporate Trust Assets and the Custodial
Assets to BNY, (ii) evidence JPM's assumption of the Assumed
Banking Liabilities; and (iii) to effectuate the other transactions
contemplated by this Agreement to be taken by JPM.
(b) Deliveries of BNY. At the Closing, BNY shall deliver
the following documents to JPM, all of which shall be in form reasonably
satisfactory to JPM:
56
(1) the updated BNY Disclosure Schedules contemplated by
Section 10.13(b);
(2) duly executed counterparts to the Servicing Agreement;
(3) the officer's certificate contemplated by Section
15.3(d);
(4) all previously received written instruments or
documents evidencing any third-party consents received in
connection with the transfer of the Purchased Banking Assets or the
assumption of the Assumed Banking Liabilities as contemplated by
this Agreement;
(5) a bargain and sale deed without a covenant against
grantor's acts (or its substantive equivalent) for each of the
Owned Banking Premises;
(6) executed landlord consent to assignment or sublease
with respect to each Banking Lease that requires the consent of any
party to the assignment or sublease, as applicable thereof subject
to Section 12.3;
(7) duly executed counterparts to the Assignment and
Assumption Agreements with respect to each Banking Lease to be
assigned, each containing customary indemnifications from the
assignor and assignee thereunder, provided that such
indemnifications shall be consistent with the provisions of Article
XVII hereof (the "Banking Lease Assignments");
(8) a duly executed counterpart to one or more assignment
and assumption agreements with respect to Contracts that are part
of the Purchased Banking Assets (other than the Banking Leases) and
with respect to the Assumed Banking Liabilities to be assumed (the
"Banking Assignments");
(9) a duly executed counterpart to a ▇▇▇▇ of sale with
respect to the fixed assets and other tangible personal property
constituting Purchased Banking Assets;
(10) an affidavit pursuant to Section 1445 of the Code
certifying to the non-foreign status of BNY or any of its
Affiliates conveying real property located in the United States
hereunder;
(11) duly executed counterparts to the Corporate Trust Lease
Assignments;
(12) a duly executed counterpart to the Corporate Trust
Assignments; and
(13) all other documents and instruments necessary to
(i) transfer the Purchased Banking Assets to JPM, (ii) evidence
BNY's assumption of the Assumed Corporate Trust Liabilities and
(iii) to effectuate the other transactions contemplated by this
Agreement to be taken by BNY.
57
Section 5.3 Delivery of Assets. (a) Delivery of Purchased
Corporate Trust Assets. JPM shall deliver to BNY on the Closing Date (or
at such other date if mutually agreed to by BNY and JPM) all of the fixed
assets and other tangible personal property (including real property
files) constituting Purchased Corporate Trust Assets hereunder. It is
understood that the fixed assets, tangible personal property and
Custodial Assets, located in certain non-U.S. jurisdictions mutually
agreed in writing between the parties, will transfer on Subsequent
Transfer Dates. The parties will execute appropriate bills of sale and
assignment and assumption agreements to effect these transfers on such
Subsequent Transfer Dates.
(b) Delivery of Purchased Banking Assets. BNY shall
deliver to JPM on the Closing Date (or at such other date if mutually
agreed to by JPM and BNY) all of the fixed assets and other tangible
personal property (including real property files) constituting Purchased
Banking Assets hereunder.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF JPM RELATING TO CORPORATE TRUST
Except as set forth in the JPM Disclosure Schedule, JPM
hereby represents and warrants to BNY, as of the date hereof (or as of
such other date as may be expressly provided in any representation or
warranty), as follows:
Section 6.1 Organization. (a) Schedule 6.1(a) sets forth
each Subsidiary of JPM that, as of the date hereof, owns a Purchased
Corporate Trust Asset, is liable for an Assumed Corporate Trust Liability
or is otherwise engaged in the Corporate Trust Business (such
Subsidiaries and any Subsidiary of JPM that, immediately prior to the
Closing, owns a Purchased Corporate Trust Asset, is liable for an Assumed
Corporate Trust Liability or is otherwise engaged in the Corporate Trust
Business, the "Corporate Trust Subsidiaries").
(b) Each of JPM and each Corporate Trust Subsidiary is an
entity duly organized, validly existing and in good standing under the
laws of the jurisdiction in which it is organized, and has all requisite
corporate power and authority to own the portion of the Purchased
Corporate Trust Assets owned by it and carry on the Corporate Trust
Business as currently conducted by it and is duly qualified to do
business and is in good standing as a foreign corporation or other entity
in each jurisdiction where the ownership of the portion of the Purchased
Corporate Trust Assets owned by it and the conduct of the Corporate Trust
Business as currently conducted by it requires such qualification, except
where the failure to be so qualified or be in good standing would not,
individually or in the aggregate, have a Corporate Trust Material Adverse
Effect.
(c) The issued share capital of each Transferred Entity is
set forth on Schedule 6.1(c). All of the issued and outstanding shares
of each Transferred Entity are duly authorized, validly issued, fully
58
paid and non-assessable and are owned by JPM or one of its Subsidiaries
as identified on Schedule 6.1(c). Other than the shares of each
Transferred Entity to be transferred to BNY at the Closing (the
"Transferred Shares"), there are no other bonds, debentures, notes or
other securities or financial instruments of any Transferred Entity
issued, reserved for issuance or outstanding. There are no preemptive
rights or outstanding subscriptions, options, warrants, rights,
convertible securities or other agreements, commitments or understandings
concerning the share capital, securities or financial instruments of each
Transferred Entity. None of the Transferred Entities owns any securities
or financial interests in any Person or otherwise owns any asset other
than (i) Corporate Trust Agreements, (ii) in the case of ▇.▇. ▇▇▇▇▇▇
Trust Australia Limited, all of the outstanding shares of capital stock
of each of Rusday Limited, GT Australia Nominees Limited and Brandwal
Limited (the "Indirect Transferred Entities") and (iii) any other asset
that is a Purchased Corporate Trust Asset. JPM has good and valid title
to the Transferred Shares and, upon consummation of the Closing, shall
transfer good and valid title to the Transferred Shares to BNY, free and
clear of any Liens. Except as set forth in the prior sentence, ▇.▇.
▇▇▇▇▇▇ Trust Australia Limited has good and valid title to the shares of
the Indirect Transferred Entities and, upon consummation of the Closing,
▇.▇. ▇▇▇▇▇▇ Trust Australia Limited shall have good and valid title to
such shares, free and clear of any Liens. No Transferred Entity or
Indirect Transferred Entity: (i) has conducted any material business
since its incorporation other than the Corporate Trust Business; and (ii)
is insolvent, in bankuptcy, liquidation or insolvency proceedings or the
subject of any order for its winding up, and there are no distress,
execution or other process levied on its assets and, to the Knowledge of
JPM, no such proceedings are threatened. Except to the extent reflected
in the Final Corporate Trust Closing Statement and other than any
liability or obligation that is an Assumed Corporate Trust Liability
(including any obligations to perform the Corporate Trust Agreements that
are being transferred with a Transferred Entity), no Transferred Entity
or Indirect Transferred Entity has any material liabilities or
obligations of any nature, known or unknown, accrued or absolute, fixed
or contingent.
Section 6.2 Authority; Capacity. Each of JPM and each of its
Subsidiaries has all necessary corporate power and authority to make,
execute and deliver this Agreement and the Corporate Trust Related
Agreements to which JPM or such Subsidiary is a party and to perform all
of the obligations to be performed by it under this Agreement and the
Corporate Trust Related Agreements. The making, execution, delivery and
performance of this Agreement and the Corporate Trust Related Agreements
by JPM and each of its Subsidiaries that is a party to such agreement,
and the consummation by JPM and each of its Subsidiaries of the
transactions contemplated to be performed by it hereby and thereby have
been duly and validly authorized and approved by all necessary corporate
action on the part of JPM and such Subsidiary, as applicable. This
Agreement and the Corporate Trust Transition Services Agreement have
been, and, as of the Closing Date, the Servicing Agreements will be, duly
and validly executed and delivered by JPM and each of its Subsidiaries
that is a party to such agreement, and assuming the due authorization,
execution and delivery by BNY and each of its Subsidiaries that is a
party to such agreement, each of this Agreement and the Corporate Trust
Related Agreements will constitute the valid, legal and binding
obligation of JPM and each of its Subsidiaries that is a party to such
59
agreement, enforceable against any and all of them in accordance with its
terms, except for the Permitted Enforceability Exceptions. The
representations and warranties set forth in this Section 6.2 shall apply
mutatis mutandis with respect to both the Original Purchase Agreement and
this Agreement, and, with respect to the Original Purchase Agreement,
shall be made as of the Original Execution Date and, with respect to this
Agreement, shall be made as of the Execution Date; provided, however,
that the representations and warranties set forth in this Section 6.2 do
not "address matters only as of a particular date" for purposes of
Section 15.2(a).
Section 6.3 No Conflict; Defaults. Assuming the consents and
approvals referred to in Section 6.4 are obtained, neither the execution
and delivery of this Agreement and the Corporate Trust Related Agreements
by JPM and its Subsidiaries, nor the consummation of the Corporate Trust
Sale and the related transactions contemplated hereby and thereby by JPM
and its Subsidiaries, will (i) conflict with, result in the breach of,
constitute a default under, or accelerate the performance provided by,
the terms of any order, arbitrators award, law, regulation, contract,
indenture, mortgage, instrument, commitment, judgment, or decree to which
JPM or any of its Subsidiaries is a party or by which it is bound, except
such conflicts, breaches, defaults or accelerations that would not,
individually or in the aggregate, have a Corporate Trust Material Adverse
Effect, or (ii) violate the articles of incorporation or bylaws, or any
other equivalent organizational document, of JPM or any of its
Subsidiaries.
Section 6.4 Consents and Approvals. Neither JPM nor any of
its Subsidiaries is required to obtain any order, permit, consent,
approval or authorization of, or required to make any declaration or
filing with, any Governmental Authority or third party in connection with
the execution and delivery of this Agreement or the Corporate Trust
Related Agreements or the consummation of the Corporate Trust Sale and
the related transactions contemplated hereby and thereby, except (i) as
may be required pursuant to the Corporate Trust Agreements, the Other
Corporate Trust Contracts or the Corporate Trust Leases, and (ii) the
approvals or non-objections of the Governmental Authorities set forth on
Schedule 6.4(ii) (the "Corporate Trust Seller Government Consents") (such
approvals contemplated by the foregoing clauses (i) and (ii) being
hereafter referred to as the "Corporate Trust Seller Approvals").
Section 6.5 Litigation and Related Matters. Schedule 6.5
sets forth, as of the date hereof, all material litigations, civil and
criminal, arbitrations, and administrative proceedings and
investigations, inquiries (whether formal or informal), suits, claims,
charges or controversy pending before a Governmental Authority or
arbitrator arising out of or relating to the conduct of the Corporate
Trust Business (including any such material claims made by or on behalf
of any customer, employee, or former, inactive or temporary employee
associated with the Corporate Trust Business). Except as set forth on
Schedule 6.5, as of the date hereof, there is no material action, suit,
proceeding, claim, arbitration or other litigation, or investigation by
or before any Governmental Authority or arbitrator pending or, to the
Knowledge of JPM, threatened against JPM or any of its Subsidiaries
arising out of the conduct of the Corporate Trust Business.
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Section 6.6 Brokers. Neither BNY nor any of its Affiliates
has or shall have any liability or obligation as a result of any
brokerage or finder's fee or other commission of any Person retained by
JPM or any of its Affiliates in connection with this Agreement, the
Corporate Trust Related Agreements or the transactions contemplated
hereby or thereby.
Section 6.7 Absence of Undisclosed Liabilities; No Material
Adverse Change. (a) Neither JPM nor any of its Subsidiaries had any
liabilities or financial obligations of any nature, known or unknown,
accrued or absolute, fixed or contingent, in respect of the Corporate
Trust Business or the Purchased Corporate Trust Assets, and neither JPM
nor any of its Subsidiaries has incurred any such liabilities or
obligations since December 31, 2004, in each case, except for such
liabilities or obligations (i) set forth on Schedule 6.7(a),
(ii) reflected in the Corporate Trust Financial Information, or
(iii) incurred in the ordinary course of business after December 31, 2004
or (iv) as would not reasonably be expected to have a Corporate Trust
Material Adverse Effect.
(b) Since December 31, 2004, and except as otherwise
expressly contemplated by this Agreement, JPM and its Subsidiaries have
in all material respects conducted the Corporate Trust Business only in,
and have not engaged in any material transaction other than in, the
ordinary course of business consistent with past practice. Since
December 31, 2004, there has not been any event, occurrence or
circumstance that has had or that would reasonably be expected to have a
Corporate Trust Material Adverse Effect.
Section 6.8 Property and Equipment. Schedule 6.8 is a list,
as of the date hereof, of all major items of equipment and tangible
personal property (designated by category) owned or leased by, or under
option to JPM or any of its Subsidiaries and which are among the
Purchased Corporate Trust Assets (or subject to leases or options which
are to be assumed by BNY hereunder). For purposes of this Section 6.8,
any item of equipment or personal property shall be deemed "major" if it
has a Corporate Trust Net Book Value (net of any associated allowance,
reserve or other contra-asset account, as reflected in JPM's books and
records, determined in accordance with GAAP) as of the date hereof (in
the case of owned property) or has a remaining rental payment due as of
the date hereof (in the case of leased property) in excess of $10,000.
Except as set forth on such schedule, there are no Liens (other than
Permitted Liens) on such equipment or tangible personal property, and JPM
or its Subsidiaries will deliver good and valid title or leasehold
interests or licenses (including sub-licenses), as the case may be, to
the Purchased Corporate Trust Assets free of Liens (other than Permitted
Liens).
Section 6.9 Necessary Corporate Trust Permits. JPM and its
Subsidiaries have all material permits, licenses, orders, ratings and
approvals of all Governmental Authorities necessary for them to operate
the Corporate Trust Business substantially as presently operated (the
"Necessary Corporate Trust Permits"), and: (a) all of the Necessary
Corporate Trust Permits are in full force and effect in all material
respects, and (b) to the Knowledge of JPM, no suspension or cancellation
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of any Necessary Corporate Trust Permit has been threatened. Schedule
6.9 sets forth a true and complete list of each of the jurisdictions with
respect to which a Governmental Authority has granted JPM a Necessary
Corporate Trust Permit.
Section 6.10 Purchased Corporate Trust IP & IT Assets. (a)
Schedule 6.10(a) is a complete and accurate list of all Purchased
Corporate Trust IP. JPM and its Subsidiaries own all the Purchased
Corporate Trust IP, and FCS owns the Intellectual Property that will be
the subject of the sublicense to be granted to BNY by FCS pursuant to
Section 11.12 (the "FCS IP"), free and clear of all Liens. To the
Knowledge of JPM, each of the Purchased Corporate Trust IP and the FCS IP
is valid, subsisting and enforceable, and is not subject to any
outstanding order, judgment, decree or agreement adversely affecting
JPM's or any of its Subsidiaries' use thereof or rights thereto. JPM and
its Subsidiaries have the right pursuant to license, sublicense,
agreement or permission to use, in the manner currently used in the
Corporate Trust Business, the Purchased Corporate Trust IP and FCS IP, to
the extent not exclusively owned by JPM or any of its Subsidiaries.
(b) Immediately after the Closing, BNY will own or have the
right to use in the operation of the Corporate Trust Business all of the
Purchased Corporate Trust IP, on terms and conditions substantially the
same as those in effect for JPM immediately prior to the Closing.
(c) There is no material litigation, opposition,
cancellation, proceeding, objection or claim pending, asserted in writing
or, to the Knowledge of JPM, threatened, concerning JPM's ownership,
validity, registerability, enforceability, infringement, use or licensed
right to use any Purchased Corporate Trust IP or FCS IP in connection
with the Corporate Trust Business.
(d) JPM and its Subsidiaries have taken reasonable and
commercially practicable measures to protect the secrecy, confidentiality
and value of Purchased Corporate Trust IP and the FCS IP.
(e) JPM has implemented reasonable and commercially
practicable procedures to prevent any Person from gaining unauthorized
access to the IT Assets. JPM has implemented reasonable backup and
disaster recover technology consistent with industry practices.
Section 6.11 Governmental Notices. Neither JPM nor any of its
Subsidiaries has received any notice from any Governmental Authority
indicating that such Governmental Authority would oppose or not promptly
grant or issue its consent or approval, if requested, with respect to the
transactions contemplated hereby. There are no threatened or pending
actions, proceedings or allegations by any Person or Governmental
Authority or any other facts known to JPM relating to it that could
reasonably be expected to have an adverse effect on the ability of the
parties to promptly obtain all requisite regulatory consents or to
perform its obligations under this Agreement.
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Section 6.12 Corporate Trust Employees and Benefits. (a)
Schedule 6.12(a) lists, as of the date hereof, all Corporate Trust
Business Employees who are identified as employed in the relevant
business lines in the internal JPM records and the position, corporate
and functional title, status as exempt or non-exempt, identification
number, hire date, status as full or part-time, status as active or on
leave, if on leave, the date leave commenced, geographic location and
remuneration (including salary and prior year's incentive award , if
applicable) of each such Corporate Trust Business Employee. Within
thirty (30) days of the date hereof, JPM shall update Schedule 6.12(a) to
include Corporate Trust Business Employees as of the date such Schedule
is delivered who were not identified as employed in the relevant business
lines in the internal JPM records. Following the date hereof and not
less than five (5) Business Days prior to the Closing Date, JPM shall
update Schedule 6.12(a) to reflect newly hired Corporate Trust Business
Employees and those Corporate Trust Business Employees whose employment
has terminated, as well as any change in the other information on
Schedule 6.12(a) applicable to any Corporate Trust Business Employee
previously listed on Schedule 6.12(a); provided that, within seven (7)
Business Days following the Closing, JPM shall update Schedule 6.12(a) to
reflect, as of the Closing Date, newly hired Corporate Trust Business
Employees and those Corporate Trust Business Employees whose employment
has terminated, as well as any change in the other information on
Schedule 6.12(a) applicable to any Corporate Trust Business Employee
previously listed on Schedule 6.12(a); provided, however, that no updated
information shall be provided with respect to those Corporate Trust
Business Employees previously listed on Schedule 6.12(a) who have
rejected a Comparable Job Offer or who have not received Comparable Job
Offers from BNY as of such date. Notwithstanding the foregoing, in no
event shall the information required by Schedule 6.12(a) be provided with
respect to a Corporate Trust Business Employee employed outside of the
United States until such time as is legally permissible and, following
such time, only in such form as is legally permissible. All Corporate
Trust Business Employees have completed the pre-employment screening
processes in place at JPM as in effect from time to time and satisfied
all requirements thereof, including drug testing and fingerprinting.
(b) Schedule 6.12(b) lists all of the employee benefit
plans, programs and arrangements, including all pension, retirement,
retiree medical, profit-sharing, thrift, savings, deferred compensation,
compensation, incentive, equity-based, severance, welfare, fringe
benefit, expatriate, perquisite and similar plans sponsored, maintained
or contributed to by JPM or any of its Subsidiaries and in which any
Corporate Trust Business Employee is eligible to participate (the
"Corporate Trust Employee Plans") and any employment, consulting,
incentive, incentive guarantee, other employment guarantee, change in
control, severance, expatriate, perquisite or other compensation-related
guarantee or agreement or letter between JPM or any of its Subsidiaries
and any Corporate Trust Business Employee (the "Corporate Trust
Employment Agreements"). JPM has made available to BNY copies of all
Corporate Trust Employee Plans and Corporate Trust Employment Agreements,
and where applicable, the most recent summary plan descriptions with
respect to the Corporate Trust Employee Plans.
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(c) The Corporate Trust Employee Plans are in material
compliance with Applicable Law and have been administered in all material
respects in accordance with their terms. There is no pending or, to the
Knowledge of JPM, threatened legal action, suit or claim by any Corporate
Trust Business Employee under any Corporate Trust Employee Plan (other
than ordinary course claims for benefits) or Corporate Trust Employment
Agreement. There is not now, nor do any circumstances exist that could
give rise to, any requirement for the posting of security with respect to
a Corporate Trust Employee Plan or the imposition of any Lien on the
assets of the Corporate Trust Business under ERISA Section 302(f) or Code
Section 412(n).
(d) Each of the Corporate Trust Employee Plans intended to
be "qualified" within the meaning of Section 401(a) of the Code has a
favorable determination letter from the IRS, and JPM has no Knowledge of
any fact or set of circumstances that would reasonably be expected to
adversely affect such qualified status. Neither JPM nor any of its
Subsidiaries contribute to (nor have they ever contributed to) any
multiemployer plan or any multiple employer plan, each within the meaning
of ERISA, on behalf of Corporate Trust Business Employees.
(e) Except as set forth on Schedule 6.12(e) or as otherwise
contemplated by this Agreement, neither the execution and delivery of
this Agreement nor the consummation of the transactions contemplated
hereby (either standing alone or together with any other event) will (i)
result in any material payment (including, without limitation, severance,
golden parachute or otherwise) becoming due under any Corporate Trust
Employee Plan or Corporate Trust Employment Agreement to any Corporate
Trust Business Employee; (ii) materially increase the benefits otherwise
payable under any Corporate Trust Employee Plan or Corporate Trust
Employment Agreement to any Corporate Trust Business Employee; or (iii)
result in the acceleration of the time or payment or vesting of any
benefits to any Corporate Trust Business Employee.
Section 6.13 Labor Contracts and Relations. Except as set
forth on Schedule 6.13, with respect to Corporate Trust Business
Employees, neither JPM nor any of its Subsidiaries is a party to any
collective bargaining agreement, contract, or other agreement or
understanding with a labor union or labor organization, nor is JPM or any
of its Subsidiaries the subject of a proceeding asserting it has
committed an unfair labor practice or seeking to compel it to bargain
with any labor organization as to wages and conditions of employment,
nor, to the Knowledge of JPM, is any such proceeding threatened, nor is
there any strike or other labor dispute by the Corporate Trust Business
Employees pending or threatened, nor does JPM have Knowledge of any
activity involving any Corporate Trust Business Employees seeking to
certify a collective bargaining unit or engaging in union organizational
activity. The Corporate Trust Business is and has been operated in
compliance in all material respects with all Applicable Laws relating to
employment and employment practices, occupational safety and health
standards, terms and conditions of employment and wages and hours, and
neither JPM nor any of its Subsidiaries is or has engaged in any unfair
labor practice with respect to the Corporate Trust Business.
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Section 6.14 Corporate Trust Agreements and Other Corporate
Trust Contracts. (a) Schedule 6.14(a) sets forth, as of the date hereof,
a complete and correct list of all active Corporate Trust Agreements.
Schedule 6.14(a) sets forth, as of the date hereof, a complete and
correct list of all active Other Corporate Trust Contracts. For each
Corporate Trust Agreement set forth on Schedule 6.14(a), JPM has set
forth on such Schedule each client by account (designating issues, bond
series or the like).
(b) Each of JPM and its Subsidiaries required to so act has
at all times acted as the validly appointed fiduciary or agent under the
Corporate Trust Agreements, except where the failure to so act as a
validly appointed fiduciary or agent would not, individually or in the
aggregate, reasonably be expected to result in a Corporate Trust Material
Adverse Effect. To the extent and in the manner contemplated by the
Corporate Trust Agreements, JPM or the relevant Subsidiary of JPM has
title (which may be through a nominee or authorized agent) to, or a valid
and perfected lien on, the property subject to such Corporate Trust
Agreements.
(c) To JPM's Knowledge, each of JPM and its Subsidiaries
has performed all obligations (including any record keeping obligations)
required to be performed by it under the Corporate Trust Agreements and
the Other Corporate Trust Contracts and is not in default thereunder,
except where the failure to so perform and/or such defaults would not,
individually or in the aggregate, reasonably be expected to result in a
Corporate Trust Material Adverse Effect.
(d) Each of JPM and its Subsidiaries has to the extent
required by Applicable Law or by the applicable Corporate Trust
Agreement, taken all action to maintain, for the benefit of the holders
or other beneficiaries or obligees under the applicable Corporate Trust
Agreement, all interests in collateral granted or pledged to secure
obligations thereunder, including the making of governmental or other
filings to continue such interests in such collateral, and the foregoing
is accurately reflected in the applicable books and records of the
Corporate Trust Business.
(e) Except as set forth on Schedule 6.14(e), to the
Knowledge of JPM, there is no default by any party to a Corporate Trust
Agreement other than JPM or any of its Subsidiaries or to the Knowledge
of JPM any event which, with the giving of notice or the passage of time
or both, would become a default by any party to a Corporate Trust
Agreement other than JPM or any of its Subsidiaries, which has occurred
and is continuing, under any of the Corporate Trust Agreements except
where such default or event of default would not, individually or in the
aggregate, reasonably be expected to result in a Corporate Trust Material
Adverse Effect.
(f) Each of JPM and its Subsidiaries have (i) except for
the escheat obligations of JPM and its Subsidiaries which shall have been
fulfilled as of the Closing Date, fulfilled all of their respective
escheat obligations; (ii) not waived, amended or modified any provision
of any Corporate Trust Agreement except in accordance with the provisions
of such Corporate Trust Agreement and as shown in the records maintained
by JPM and its Subsidiaries and delivered to BNY as Purchased Corporate
Trust Assets; and (iii) to the extent required by Applicable Law or by
65
the applicable Corporate Trust Agreements, taken all action to maintain,
for the benefit of the holders or other beneficiaries or obligees under
the Corporate Trust Agreements, all interests in collateral granted or
pledged to secure obligations thereunder, including the making of
governmental or other filings to continue such interests in such
collateral, except, in each case of clauses (i) through (iii), to the
extent as would not, individually or in the aggregate, have a Corporate
Trust Material Adverse Effect.
(g) Other than as set forth on Schedule 6.14(g), to the
Knowledge of JPM, there are no material Existing Out-of-Balance
Appointments and the aggregate of the amounts set forth on Schedule
6.14(g) is in all material respects the total aggregate amount of the
Existing Out-of-Balance Condition as of February 28, 2006.
Section 6.15 Environmental Matters. Except as set forth on
Schedule 6.15:
(a) Each of JPM and each of its Subsidiaries is currently
in compliance in all material respects with all Environmental Laws
applicable to any Leased Corporate Trust Premises, and with respect to
any facilities, improvements, operations, and activities conducted by JPM
or any of its Subsidiaries on such premises. Neither JPM nor any of its
Subsidiaries has received any notice that there has been any failure to
comply with Environmental Laws applicable to any Leased Corporate Trust
Premises, and with respect to any facilities, improvements, operations,
and activities conducted by JPM or any of its Subsidiaries on such
premises except any such notice with respect to a failure to comply which
has been fully remedied.
(b) Each of JPM and its Subsidiaries has all material
environmental permits and approvals necessary under Environmental Laws
for all facilities, improvements, operations and activities conducted by
JPM or any of its Subsidiaries on the Leased Corporate Trust Premises,
and JPM and its Subsidiaries are currently in compliance with all such
permits and approvals.
(c) There is no suit, claim, demand, action, consent order
or proceeding pending or, to the Knowledge of JPM, threatened in which
JPM or any of its Affiliates, with respect to any Leased Corporate Trust
Premises, has been or, with respect to threatened proceedings, could
reasonably be expected to be named as a defendant, responsible party or
potentially responsible party (i) for alleged noncompliance (including by
any predecessor) with any Environmental Law, or (ii) relating to the
Release into or presence in the Environment of any Hazardous Material.
(d) Neither JPM or any of its Subsidiaries, nor to JPM's
Knowledge, any lessee or owner, as applicable, of any Leased Corporate
Trust Premises, has received any written notice regarding a matter on
which a suit, claim, action or proceeding as described in subsection (c)
or (d) of this Section 6.15 would reasonably be based.
66
(e) To the Knowledge of JPM, there have been no Releases or
presence in the Environment of any Hazardous Materials in, on, from,
under or affecting any Leased Corporate Trust Premises that would
reasonably be expected to have a material adverse impact on such Leased
Corporate Trust Premises.
(f) To the Knowledge of JPM, there are no asbestos-
containing materials, polychlorinated biphenyls (PCBs) or equipment
containing PCBs, urea formaldehyde foam insulation products, underground
storage tanks, sanitary landfills, or injection ▇▇▇▇▇ at or in any Leased
Corporate Trust Premises that would have a material adverse impact on
such Leased Corporate Trust Premises.
(g) To the Knowledge of JPM, neither JPM nor any of its
Subsidiaries has taken any action under any Corporate Trust Agreement
that would result in JPM or any of its Subsidiaries or, from and after
the Closing, BNY or any of its Subsidiaries incurring any material
liability under Environmental Law in respect of any real property
pursuant to a Corporate Trust Agreement.
Section 6.16 Compliance with Laws. Each of JPM and its
Subsidiaries is in compliance with all rules and regulations applicable
to the Corporate Trust Business under Applicable Law, except as would not
reasonably be expected to, individually or in the aggregate, result in a
Corporate Trust Material Adverse Effect. Each of JPM and its Subsidiaries
has conducted and is conducting the Corporate Trust Business (including,
without limitation, all matters relating to the Corporate Trust Business
Employees and the Leased Corporate Trust Premises) in compliance with
Applicable Law (including with any escheatment and unclaimed property
laws and requirements) in all material respects; provided that the
environmental matters addressed by Section 6.15 shall be governed by
Section 6.15 and not this Section 6.16. Except as set forth on Schedule
6.16, neither JPM nor any of its Subsidiaries is subject to any order,
ruling, written agreement, memorandum of understanding or other formal or
informal enforcement action with respect to the Corporate Trust Business
directed to it by any Governmental Authority. There are no material and
uncured or unremedied deficiencies with respect to or affecting the
Corporate Trust Business, or the Purchased Corporate Trust Assets and
Assumed Corporate Trust Liabilities being acquired in connection
therewith.
Section 6.17 Corporate Trust Financial Information. (a) JPM
has previously provided BNY with a consolidated income statement and
consolidated statement of assets and liabilities concerning the Corporate
Trust Business as of, or for the fiscal years ended, December 31, 2004
and December 31, 2005 (the "Corporate Trust Financial Information"). The
Corporate Trust Financial Information fairly presents in all material
respects the financial position and results of operations of the
Corporate Trust Business as of the date or dates of such information.
The Corporate Trust Financial Information is unaudited, has been prepared
from the books and records of the Corporate Trust Business and takes into
account certain adjustments made to reflect the Corporate Trust Business
as a standalone business, is subject to JPM's internal accounting
policies and procedures and is used by JPM to prepare its financial
67
statements that are prepared in accordance with GAAP. The actual fee
revenues of the Corporate Trust Business for the fiscal year ended
December 31, 2005 is set forth on Schedule 6.17(a).
(b) The books of account of the Corporate Trust Business
fairly and accurately in all material respects reflect the Purchased
Corporate Trust Assets and Assumed Corporate Trust Liabilities in
accordance with GAAP.
(c) The books of account of the Corporate Trust Business
are maintained by JPM substantially in accordance with applicable legal
and accounting requirements.
(d) JPM or its Subsidiaries maintains, with respect to the
Corporate Trust Business, a system of internal accounting controls
sufficient in all material respects to provide reasonable assurances that
(i) transactions are executed in accordance with management's general or
specific authorizations, (ii) revenue items are accurately recorded as
necessary to permit preparation of financial statements in conformity in
all material respects with GAAP and (iii) revenues for the Corporate
Trust Business provided to BNY are accurate in all material respects and
fairly present in all material respect the actual revenues of the
Corporate Trust Business for the fiscal year ended December 31, 2005.
(e) Not later than sixty (60) days following the Closing
Date, JPM shall deliver to BNY financial statements with respect to the
Transferred Entities. Such financial statements will (i) fairly present
in all material respects the financial position and results of operations
of the Transferred Entities as of the Closing Date and (ii) be unaudited,
prepared from the books and records of the Corporate Trust Business and
Transferred Entities and will be subject to JPM's internal accounting
policies and procedures used by JPM to prepare its financial statements
that are prepared in accordance with GAAP.
Section 6.18 Books and Records. (a) With respect to each
Corporate Trust Agreement and all accounts related thereto, the
accounting, financial and other books and records kept by JPM and any of
its Subsidiaries are in all material respects complete and accurate and
have been maintained in the usual, regular and ordinary course of
business and in accordance in all material respects with Applicable Law.
(b) The files with respect to the Corporate Trust
Agreements are complete in all material respects.
Section 6.19 Corporate Trust Assets. (a) Excepting for the
matters set forth on Schedule 6.19(a) and taking into account the
Excluded Corporate Trust Assets and the Excluded Corporate Trust
Liabilities and the arrangements contemplated by Sections 10.10 and
11.11, the Purchased Corporate Trust Assets purchased and Assumed
Corporate Trust Liabilities assumed by BNY from JPM, together with the
services to be provided by JPM under the Corporate Trust Transition
Services Agreement and management, support and administrative services
that JPM may reasonably assume BNY will provide, will be sufficient to
enable BNY, immediately as of the Closing Date, to engage in all material
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respects in the activities of the Corporate Trust Business in which JPM
is currently, and has since January 1, 2003 been engaged.
(b) Immediately after the transfer of each Corporate Trust
Agreement from JPM to BNY pursuant hereto, BNY will obtain all right,
title and interest in such Corporate Trust Agreement, free and clear of
any Lien arising by, through or under JPM.
Section 6.20 Leased Corporate Trust Premises. (a) Schedule
6.20(a) contains a list, as of the date hereof, of each Corporate Trust
Lease and all material amendments or modifications thereto, including the
amount of space, rent and term, that will be part of the Purchased
Corporate Trust Assets (the premises covered by the Corporate Trust
Leases, the "Leased Corporate Trust Premises"), with a demarcation
indicating Corporate Trust Leases that require consent to be assigned or
subleased.
(b) JPM has provided BNY with a true and complete list of
all of the tenants or other occupants of the Leased Corporate Trust
Premises.
(c) Each of the Corporate Trust Leases is in full force and
has not been modified, altered or amended, and, neither JPM nor to JPM's
Knowledge, the landlord is in default under any of its respective
obligations thereunder, except for such modifications, alterations,
amendments or defaults that, individually or in the aggregate, would not
reasonably be expected to result in a Corporate Trust Material Adverse
Effect.
(d) JPM has provided BNY with true and accurate copies of
each of the Corporate Trust Leases and all amendments thereto, and
neither JPM nor, to JPM's Knowledge, any tenant under the Corporate Trust
Leases has received any notice of default thereunder or has any Knowledge
of any event that, by itself or with the passage of time, could result in
a material default under a Corporate Trust Lease.
(e) Except as would not, individually or in the aggregate,
reasonably be expected to result in a Corporate Trust Material Adverse
Effect, neither JPM nor any of its Subsidiaries engaged in the Corporate
Trust Business has received or has Knowledge of any written notices of
violations, citations, summonses, compliance orders, directives, suits,
other legal process, or other written notices of potential material
liability under applicable zoning, building, fire or other Applicable
Laws and regulations relating to the Corporate Trust Leases or the Leased
Corporate Trust Premises.
(f) Neither JPM nor any of its Subsidiaries has received or
has Knowledge of any written notice of a condemnation proceeding relating
to the Corporate Trust Leases or the Leased Corporate Trust Premises that
would materially affect a property or intended use (and provided that JPM
shall give BNY prompt written notice as to any such condemnation notices
received (or of which JPM has Knowledge) between the date hereof and the
Closing Date, this representation shall not be deemed to be breached with
respect to such matters for purposes of Section 15.2(a)).
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Section 6.21 Insurance Coverage. The Corporate Trust Business
is insured against such risks and in such amounts and with such coverage
customarily carried by Persons conducting businesses similar to the
Corporate Trust Business or owning assets similar to the Purchased
Corporate Trust Assets. Since January 1, 2000, all premiums payable
under all insurance policies and fidelity bonds that currently cover the
assets, business, operations and employees of the Corporate Trust
Business have been timely paid in all material respects, and JPM and its
Subsidiaries have otherwise complied in all material respects with the
terms and conditions of all such policies and bonds. Since January 1,
2000, there is no material claim by JPM or any of its Subsidiaries
pending under any such policies or bonds as to which coverage has been
denied by the underwriters of such policies or bonds. To the Knowledge
of JPM, no insurer has threatened a termination, or material alteration,
of coverage under any such policies or bonds, except notices required to
be given by Applicable Law prior to the expiration of any policy or bond
advising that coverage will terminate by its terms if such policy or bond
is not renewed.
Section 6.22 Taxes. (a) All Tax Returns required to be filed
with respect to the Purchased Corporate Trust Assets (such Tax Returns,
the "Corporate Trust Tax Returns") have been filed with the appropriate
Taxing Authority; each such Corporate Trust Tax Return is true, complete
and correct in all material respects. All Taxes shown to be due on such
Corporate Trust Tax Returns, and all Taxes arising from or attributable
to the Purchased Corporate Trust Assets, have been timely paid, withheld
and timely paid to the appropriate Taxing Authority, or reflected in an
appropriate tax reserve in accordance with GAAP on the financial
statements of JPM, other than those Taxes the failure of which to be paid
would not result in a Lien on the Purchased Corporate Trust Assets or
become a liability of BNY.
(b) No notice of deficiency or assessment of Taxes has been
received from any Taxing Authority with respect to the Purchased
Corporate Trust Assets. There are no security interests on any of the
Purchased Corporate Trust Assets that arose in connection with any
failure (or alleged failure) to pay any Tax (whether or not such Tax
relates to the Purchased Corporate Trust Assets).
(c) None of the Purchased Corporate Trust Assets is "tax
exempt use property" (within the meaning of Section 168(h) of the Code).
None of the Purchased Corporate Trust Assets is a lease made pursuant to
Section 168(f)(8) of the Internal Revenue Code of 1954.
(d) Each Transferred Entity, each of their respective
Subsidiaries and any affiliated, combined, unitary, or similar group of
which any Transferred Entity or any of its respective Subsidiaries is, or
was at any time, a member for any Tax purpose, other than (i) Promina
Group Limited and any Subsidiary of Promina Group Limited or (ii) any
such group of which ▇▇▇▇▇▇ Services, Inc. or ▇.▇. ▇▇▇▇▇▇ Corporate
Trustee Services Limited is, or has been, a member (the preceding
entities, including but not limited to the Transferred Entities, the
"Transferred Entities Tax Affiliates") have timely filed (and in respect
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of any taxable period which includes the Closing Date, will file), after
giving effect to any applicable extensions, all Tax Returns required to
be filed by Applicable Law. All such Tax Returns were (and, as to Tax
Returns not filed as of the date hereof, will be) true, complete and
correct in all material respects. Neither the Australian Taxation
Office, any appropriate Office of State Revenue nor any other Taxing
Authority has proposed any adjustment to any such Tax Return. No claim
has been made by any Taxing Authority of a jurisdiction where a
Transferred Entity or any of its Subsidiaries does not file Tax Returns
that such Transferred Entity or any of its Subsidiaries is subject to Tax
by that jurisdiction.
(e) Each Transferred Entities Tax Affiliate has, within the
time and in the manner prescribed by law, paid (and, in respect of any
taxable period ending after the date hereof and on or before the Closing
Date, will pay) or withheld from any payment made to another person, all
Taxes that are (or, in respect of any taxable period ending after the
date hereof and on or before the Closing Date, will become) due and
payable by it, including without limitation the payment of estimated
Taxes.
(f) No Transferred Entities Tax Affiliate has agreed to any
extension of time within which to file any Tax Return, which Tax Return
has not since been filed or which extends the period for payment of any
Taxes.
(g) No Transferred Entities Tax Affiliate has executed any
outstanding waivers or comparable consents regarding the time limits for
assessment or amended assessment imposed upon any Taxing Authority with
respect to any Taxes or Tax Returns.
(h) There are no audits, tax reviews, suits, claims,
assessments or other administrative proceedings or court proceedings
pending with respect to any Taxes or Tax Returns of any of the
Transferred Entities or any of their respective Subsidiaries, and no
Taxing Authority has officially notified any of the Transferred Entities
or any of their respective Subsidiaries in writing that it intends to
investigate its Tax affairs.
(i) No tax ruling that would apply to any Post-Closing
Period has been requested of any Taxing Authority with respect to any Tax
matter relating to the Taxes of any of the Transferred Entities or any of
their respective Subsidiaries in relation to which a reply has not yet
been received.
(j) All particulars given to any Taxing Authority in
connection with or affecting any application for any ruling, consent or
clearance on behalf of any of the Transferred Entities or any of their
respective Subsidiaries, which would apply to any Post-Closing Period,
fully and accurately disclosed all facts and circumstances material for
the decision of the Taxing Authority. Each such ruling, consent or
clearance is valid and effective. Each transaction for which that
ruling, consent or clearance has previously been obtained has been
carried into effect in accordance with the terms of the relevant
application, ruling, consent or clearance.
(k) None of the Transferred Entities or any of their
respective Subsidiaries is or has been a party to any tax indemnity, tax
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allocation or tax sharing or similar agreement or arrangement (whether or
not written), which would survive the Closing, pursuant to which it will
have any obligation to make any payments.
(l) To the extent applicable, the Transferred Entities Tax
Affiliates (other than ▇▇▇▇▇▇ Services, Inc. and ▇.▇. ▇▇▇▇▇▇ Corporate
Trustee Services Limited) have maintained and retained for the period
required by law: (i) accurate records of all assets in which Part IIIA
of the 1936 Act and Parts 3-1 and 3-3 of the 1997 Act apply or applied;
and (ii) without limiting the generality of the foregoing, accurate
records of all information relating to those assets as is referred to in
section 160ZZU of the 1936 Act and Division 121 of the 1997 Act; and
(iii) all other records that are required to be maintained under any law
relating to Taxes and group liabilities.
(m) None of the share capital accounts of ▇.▇. ▇▇▇▇▇▇ Trust
Australia Limited or any of its Subsidiaries are, or will be, tainted
within the meaning of section 160ARDM of the 1936 Act.
(n) All material stamp duty and other similar Taxes payable
in respect of every Contract or transaction to which the Transferred
Entities or any of their respective Subsidiaries is or has been a party,
or by which the Transferred Entities or any of their respective
Subsidiaries derives, has derived or will derive a substantial benefit,
have been duly paid. No such Contract is unstamped or insufficiently
stamped. No event has occurred, or will occur by operation of this
Agreement, as a result of which any material duty has become payable,
from which a Transferred Entity or any of its Subsidiaries may have
obtained relief.
(o) Each of the Transferred Entities and its Subsidiaries,
in respect of any Taxable Supply it makes, is not prevented under any
contract from recovering from the recipient of that supply any material
amount of GST payable by it in respect of its supply.
(p) None of ▇.▇. ▇▇▇▇▇▇ Trust Australia Limited or any of
its Subsidiaries will be liable to pay the superannuation guarantee
charge in respect of any of its directors, employees or sub-contractors
for any contribution period (as defined in the Superannuation Guarantee
(Administration) Act 1992) up to the Closing Date.
(q) None of ▇.▇. ▇▇▇▇▇▇ Trust Australia Limited or any of
its Subsidiaries are "land rich" within the meaning of Australian stamp
duty legislation.
(r) None of the Transferred Entities or any of their
respective Subsidiaries has engaged in any reportable or listed
transactions, as defined under Section 6011 of the Code and the
applicable U.S. Treasury Regulations, or in any transaction of which it
has made disclosure to any Taxing Authority to avoid the imposition of
any penalties, which continue in any Post-Closing Period.
Section 6.23 No Prepayment. Except as set forth in Schedule
6.23, between July 1, 2005 and February 28, 2006, neither JPM nor any of
its Subsidiaries has received a written notice of prepayment of principal
or interest in connection with any securities of any issuer with respect
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to which JPM or such Subsidiary, as applicable, acts in a Corporate Trust
Capacity under an active Corporate Trust Agreement.
Section 6.24 Information Regarding Corporate Trust Customers
and Relationships. After the Closing, neither JPM nor any of its
Affiliates shall have any right or interest in or to any of the items
included in Section 2.1(a)(5) (except to the extent otherwise provided in
the proviso thereto or required for JPM to fulfill its obligations under
the Corporate Trust Transition Services Agreement).
Section 6.25 No Other Representations or Warranties. Except
as is expressly represented or warranted in this Agreement, neither JPM
nor any of its Subsidiaries makes any representation or warranty
whatsoever with regard to any Purchased Corporate Trust Asset being
transferred to BNY or any Assumed Corporate Trust Liability being assumed
by BNY or as to any other matter or thing.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES OF BNY RELATING TO CORPORATE TRUST
Except as set forth in the BNY Disclosure Schedule, BNY
hereby represents and warrants to JPM, as of the date hereof (or as of
such other date as may be expressly provided in any representation or
warranty), as follows:
Section 7.1 Organization. BNY is a corporation duly
organized, validly existing and in good standing under the laws of New
York, and has (or, to the extent that BNY's Affiliates purchase
Appointments permitted hereunder, such Affiliates have) all requisite
corporate power and authority, as well as all requisite licenses,
franchises, permits, qualifications, ratings and similar permissions and
authorities, to own the Purchased Corporate Trust Assets, assume the
Assumed Corporate Trust Liabilities, to accept the Assignment of any
Appointment hereunder and to carry on the Corporate Trust Business as
currently conducted and is duly qualified to do business and is in good
standing as a foreign corporation or other entity in each jurisdiction
where the ownership of the Purchased Corporate Trust Assets and the
conduct of the Corporate Trust Business requires such qualification,
except where the failure to be so qualified or be in good standing would
not, individually or in the aggregate, have a BNY Material Adverse
Effect.
Section 7.2 Authority; Capacity. Each of BNY and each of its
Subsidiaries has all necessary corporate power and authority to make,
execute and deliver this Agreement and the Corporate Trust Related
Agreements to which BNY or such Subsidiary is a party and to perform all
of the obligations to be performed by it under this Agreement and the
Corporate Trust Related Agreements. The making, execution, delivery and
performance of this Agreement and the Corporate Trust Related Agreements
by BNY and each of its Subsidiaries that is a party to such agreement,
and the consummation by BNY and each of its Subsidiaries of the
transactions contemplated to be performed by it hereby and thereby have
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been duly and validly authorized and approved by all necessary corporate
action on the part of BNY and such Subsidiary, as applicable. This
Agreement and the Corporate Trust Transition Services Agreement have
been, and, as of the Closing Date, the Servicing Agreement will be, duly
and validly executed and delivered by BNY and each of its Subsidiaries
that is a party to such agreement, and assuming the due authorization,
execution and delivery by JPM and each of its Subsidiaries that is a
party to such agreement, each of this Agreement and the Corporate Trust
Related Agreements will constitute the valid, legal and binding
obligation of BNY and each of its Subsidiaries that is a party to such
agreement, enforceable against any and all of them in accordance with its
terms, except for the Permitted Enforceability Exceptions. The
representations and warranties set forth in this Section 7.2 shall apply
mutatis mutandis with respect to both the Original Purchase Agreement and
this Agreement, and, with respect to the Original Purchase Agreement,
shall be made as of the Original Execution Date and, with respect to this
Agreement, shall be made as of the Execution Date; provided, however,
that the representations and warranties set forth in this Section 7.2 do
not "address matters only as of a particular date" for purposes of
Section 15.3(a).
Section 7.3 No Conflict; Defaults. Assuming the consents and
approvals referred to in Section 7.4 are obtained, neither the execution
and delivery of this Agreement and the Corporate Trust Related Agreements
by BNY or any of its Subsidiaries, nor the consummation of the
transactions contemplated hereby and thereby by BNY or any of its
Subsidiaries, will (i) conflict with, result in the breach of, constitute
a default under, or accelerate the performance provided by, the terms of
any order, law, regulation, contract, indenture, mortgage, instrument,
commitment, judgment, or decree to which BNY or any of its Subsidiaries
is a party or by which it is bound, except such conflicts, breaches,
defaults or accelerations that would not, individually or in the
aggregate, have a BNY Material Adverse Effect or (ii) violate the
articles of incorporation or bylaws, or any other equivalent
organizational document, of BNY or any of its Subsidiaries.
Section 7.4 Consents and Approvals. Neither BNY nor any of
its Subsidiaries is required to obtain any material order, permit,
consent, approval or authorization of, nor required to make any
declaration or filing with, any Governmental Authority or third party in
connection with the execution and delivery of this Agreement or the
Corporate Trust Related Agreements, as applicable, or the consummation of
the transactions contemplated hereby and thereby, except (i) for the
Necessary Corporate Trust Permits or as may be required pursuant to the
Corporate Trust Agreements or the Other Corporate Trust Contracts, (ii)
as may be required pursuant to applicable state fiduciary substitution
laws, and (iii) the approvals of Governmental Authorities listed in
Schedule 7.4 (such approvals contemplated by the foregoing clause (iii),
together with the Corporate Trust Seller Government Consents, the
"Corporate Trust Government Consents") (such approvals contemplated by
the foregoing clauses (i), (ii) and (iii), together with the Corporate
Trust Seller Approvals, the "Corporate Trust Approvals").
Section 7.5 Litigation and Related Matters. As of the date
hereof, to the Knowledge of BNY, there is no material action, suit,
proceeding, claim or other litigation, or any investigation by any
74
Governmental Authority, pending or threatened against BNY or any of its
Subsidiaries that would materially impede, delay or prevent BNY or any of
its Subsidiaries from entering into this Agreement or performing its
terms.
Section 7.6 Compliance with Laws and Regulations. Except as
set forth in Schedule 7.6, each of BNY and its Subsidiaries has conducted
and is conducting its business in all material respects in compliance
with all Applicable Laws, including, without limitation, all regulations,
orders, and opinions of the New York State Banking Department and the
FDIC, and, except as would not, individually or in the aggregate, result
in a BNY Material Adverse Effect, neither BNY nor any of its Subsidiaries
is subject to any order or ruling directed to it by, or memorandum of
understanding with, any federal and state Governmental Authority.
Section 7.7 Governmental Notices; Regulatory Matters.
Neither BNY nor any of its Subsidiaries has received any notice from, or
had any discussions with, any federal, state, or other Governmental
Authority indicating that such agency would oppose or not promptly grant
or issue its consent or approval, if requested, with respect to the
Corporate Trust Sale and the related transactions contemplated hereby or
the Corporate Trust Related Agreements. There are no threatened or
pending actions, proceedings or allegations by any Person or Governmental
Authority or any other facts known to BNY relating to it that could
reasonably be expected to have an adverse effect on the ability of the
parties to promptly obtain all requisite regulatory consents for, or to
perform its obligations under this Agreement relating to, the Corporate
Trust Sale and the related transactions contemplated by this Agreement or
the Corporate Trust Related Agreements.
Section 7.8 Brokers. Neither JPM nor any of its Affiliates
has, or shall have, any liability or obligation as a result of any
brokerage or finder's fee or other commission of any Person retained by
BNY or any of its Affiliates in connection with this Agreement, the
Corporate Trust Related Agreements or the transactions contemplated
hereby or thereby.
Section 7.9 Financing. BNY has, and at the time of the
Closing will have, sufficient funds to enable to pay the amounts required
to be paid by it pursuant to Article IV.
ARTICLE VIII
REPRESENTATIONS AND WARRANTIES OF BNY RELATING TO BANKING
Except as set forth in the BNY Disclosure Schedule, BNY
hereby represents and warrants to JPM, as of the date hereof (or as of
such other date as may be expressly provided in any representation or
warranty), as follows:
Section 8.1 Organization. (a) Schedule 8.1(a) sets forth
each Subsidiary of BNY that, as of the date hereof, owns a Purchased
Banking Asset, is liable for an Assumed Banking Liability or is otherwise
75
engaged in the Banking Business (such Subsidiaries and any Subsidiary of
BNY that, immediately prior to the Closing, owns a Purchased Banking
Asset, is liable for an Assumed Banking Liability or is otherwise engaged
in the Banking Business, the "Banking Subsidiaries").
(b) Each of BNY and each Banking Subsidiary is an entity
duly organized, validly existing and in good standing under the laws of
the jurisdiction in which it is organized, and has all requisite
corporate power and authority to own the portion of the Purchased Banking
Assets owned by it and carry on the Banking Business as currently
conducted by it and is duly qualified to do business and is in good
standing as a foreign corporation or other entity in each jurisdiction
where the ownership of the portion of the Purchased Banking Assets owned
by it and the conduct of the Banking Business as currently conducted by
it requires such qualification, except where the failure to be so
qualified or be in good standing would not, individually or in the
aggregate, have a Banking Material Adverse Effect.
Section 8.2 Authority; Capacity. Each of BNY and each of its
Subsidiaries has all necessary corporate power and authority to make,
execute and deliver this Agreement and the Banking Related Agreement to
which BNY or such Subsidiary is a party and to perform all of the
obligations to be performed by it under this Agreement and the Banking
Related Agreement. The making, execution, delivery and performance of
this Agreement and the Banking Related Agreement by BNY and each of its
Subsidiaries that is a party to such agreement, and the consummation by
BNY and each of its Subsidiaries of the transactions contemplated to be
performed by it hereby and thereby have been duly and validly authorized
and approved by all necessary corporate action on the part of BNY and
such Subsidiary, as applicable. This Agreement and the Banking Related
Agreement have been duly and validly executed and delivered by BNY and
each of its Subsidiaries that is a party to such agreement, and assuming
the due authorization, execution and delivery by JPM and each of its
Subsidiaries that is a party to such agreement, each of this Agreement
and the Banking Related Agreement will constitute the valid, legal and
binding obligation of BNY and each of its Subsidiaries that is a party to
such agreement, enforceable against any and all of them in accordance
with its terms, except for the Permitted Enforceability Exceptions. The
representations and warranties set forth in this Section 8.2 shall apply
mutatis mutandis with respect to both the Original Purchase Agreement and
this Agreement, and, with respect to the Original Purchase Agreement,
shall be made as of the Original Execution Date and, with respect to this
Agreement, shall be made as of the Execution Date; provided, however,
that the representations and warranties set forth in this Section 8.2 do
not "address matters only as of a particular date" for purposes of
Section 15.3(b).
Section 8.3 No Conflict; Defaults. Assuming the consents and
approvals referred to in Section 8.4 are obtained, neither the execution
and delivery of this Agreement and the Banking Related Agreement by BNY
or any of its Subsidiaries, nor the consummation of the Banking Sale and
the related transactions contemplated hereby and thereby by BNY or any of
its Subsidiaries, will (i) conflict with, result in the breach of,
constitute a default under, or accelerate the performance provided by,
76
the terms of any order, arbitrators award, law, regulation, contract,
indenture, mortgage, instrument, commitment, judgment, or decree to which
BNY or any of its Subsidiaries is a party or by which it is bound, except
such conflicts, breaches, defaults or accelerations that would not,
individually or in the aggregate, have a Banking Material Adverse Effect,
or (ii) violate the articles of incorporation or bylaws, or any other
equivalent organizational document, of BNY or any of its Subsidiaries.
Section 8.4 Consents and Approvals. Neither BNY nor any of
its Subsidiaries is required to obtain any order, permit, consent,
approval or authorization of, or required to make any declaration or
filing with, any Governmental Authority or third party in connection with
the execution and delivery of this Agreement or the Banking Related
Agreement or the consummation of the Banking Sale and the related
transactions contemplated hereby and thereby, except (i) as may be
required pursuant to the Contracts set forth on Schedule 8.4(i), and (ii)
the approvals or non-objections of the Governmental Authorities set forth
on Schedule 8.4(ii) (the "Banking Seller Government Consents") (such
approvals contemplated by the foregoing clauses (i) and (ii) being
hereafter referred to as the "Banking Seller Approvals").
Section 8.5 Litigation and Related Matters. Schedule 8.5
sets forth, as of the date hereof, all material litigations, civil and
criminal, arbitrations, and administrative proceedings and
investigations, inquiries (whether formal or informal), suits, claims,
charges or controversy pending before a Governmental Authority or
arbitrator arising out of or relating to the conduct of the Banking
Business (including any such material claims made by or on behalf of any
customer, employee, or former, inactive or temporary employee associated
with the Banking Business). Except as set forth on Schedule 8.5, as of
the date hereof, there is no material action, suit, claim, proceeding,
arbitration or other litigation, or investigation or inquiry (whether
formal or informal) by or before any Governmental Authority or
arbitrator, pending or, to the Knowledge of BNY, threatened against BNY
or any of its Subsidiaries arising out of the conduct of the Banking
Business.
Section 8.6 Brokers. Neither BNY nor any of its Affiliates
has or shall have any liability or obligation as a result of any
brokerage or finder's fee or other commission of any Person retained by
JPM or any of its Affiliates in connection with this Agreement, the
Banking Related Agreement or the transactions contemplated hereby or
thereby.
Section 8.7 Absence of Undisclosed Liabilities; No Material
Adverse Change. (a) Neither BNY nor any of its Subsidiaries had any
liabilities or financial obligations of any nature, known or unknown,
accrued or absolute, fixed or contingent, in respect of the Banking
Business or the Purchased Banking Assets, and neither BNY nor any of its
Subsidiaries has incurred any such liabilities or obligations since
December 31, 2004, in each case, except for such liabilities or
obligations (i) set forth on Schedule 8.7(a), (ii) reflected in the
Banking Financial Information, or (iii) incurred in the ordinary course
of business after December 31, 2004 or (iv) as would not reasonably be
expected to have a Banking Material Adverse Effect.
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(b) Since December 31, 2004, and except as otherwise
expressly contemplated by this Agreement, BNY and its Subsidiaries have
in all material respects conducted the Banking Business only in, and have
not engaged in any material transaction other than in, the ordinary
course of business consistent with past practice. Since December 31,
2004, there has not been any event, occurrence or circumstance that has
had or that would reasonably be expected to have a Banking Material
Adverse Effect.
Section 8.8 Property and Equipment. (a) Schedule 8.8(a) sets
forth a list, as of the date hereof, of all major items of equipment and
tangible personal property (designated by category) owned or leased by,
or under option to BNY or any of its Subsidiaries and which are among the
Purchased Banking Assets (or subject to leases or options which are to be
assumed by JPM hereunder). For purposes of this Section 8.8, any item of
equipment or personal property shall be deemed "major" if it has a Book
Value (net of any associated allowance, reserve or other contra-asset
account, as reflected in BNY's books and records, determined in
accordance with GAAP) as of the date hereof (in the case of owned
property) or has a remaining rental payment due as of the date hereof (in
the case of leased property) in excess of $10,000. Except as set forth
on such schedule, there are no Liens (other than Permitted Liens) on such
equipment or tangible personal property, and BNY or its Subsidiaries will
deliver good and valid title or leasehold interests or licenses
(including sub-licenses), as the case may be, to the Purchased Banking
Assets free of Liens (other than Permitted Liens).
(b) Schedule 8.8(b) sets forth a list, as of the date
hereof, of all Master Equipment Leases, indicating which Master Equipment
Leases require the consent or approval of any Person in order for BNY to
assign such Master Equipment Lease to JPM or otherwise transfer to JPM
the Banking Personal Property covered by such Master Equipment Lease.
(c) BNY and its Subsidiaries own, and will convey to JPM at
Closing, all of BNY's and its Subsidiaries' right, title and interest in,
to and under all of the Banking Personal Property, which constitutes good
and marketable title, free and clear of any Liens, other than any
Permitted Liens. The Banking Personal Property and the other Purchased
Banking Assets constitute all of the assets required to conduct the
Banking Business in all material respects as presently conducted.
Section 8.9 Necessary Banking Permits. BNY and its
Subsidiaries have all material permits, licenses, orders, ratings and
approvals of all Governmental Authorities necessary for them to operate
the Banking Business substantially as presently operated (the "Necessary
Banking Permits"), and: (a) all of the Necessary Banking Permits are in
full force and effect in all material respects, and (b) to the Knowledge
of BNY, no suspension or cancellation of any Necessary Banking Permit has
been threatened.
Section 8.10 Assumed Banking Deposits. Schedule 8.10 sets
forth, or incorporates therein by reference, a complete and accurate
list, as of the date set forth on such Schedule, of the Assumed Banking
Deposits held by the Banking Business. The Assumed Banking Deposits have
been originated and administered in accordance with the terms of the
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respective governing documents and all Applicable Laws and regulations in
all material respects. The deposit agreements and other documents
relating to the Assumed Banking Deposits to be delivered to JPM will be
all such documents in BNY's or any of its Subsidiaries' possession or
reasonably available to BNY or any of its Subsidiaries at the Closing
that are necessary to establish the amounts or other terms of the Assumed
Banking Deposits or that evidence the Assumed Banking Deposits. The
Assumed Banking Deposits are insured by the FDIC to the fullest extent in
accordance with the Federal Deposit Insurance Act and BNY and its
Subsidiaries have paid all assessments due thereunder.
Section 8.11 Loans. (a) Schedule 8.11(a) sets forth, or
incorporates therein by reference, a complete and accurate list, as of
the date of set forth on such Schedule, of all Loans that are owned by
BNY or any of its Subsidiaries in the Banking Business, as well as a list
of each Loan that requires the affirmative consent or approval or any
Person in order for BNY or any of its Subsidiaries to assign such Loan to
JPM.
(b) As to each Assigned Banking Loan, BNY hereby represents
and warrants that as of the Closing Date:
(1) Each Assigned Banking Loan was made by BNY or any of
its Subsidiaries (or, in the case of an Assigned Banking Loan
purchased by BNY or any of its Subsidiaries, by the Person making
such Assigned Banking Loan): (A) in the ordinary course of business
at the time such Assigned Banking Loan was made; (B) in accordance
in all material respects with then existing federal and state laws
and regulations; and (C) in accordance with BNY's underwriting and
documentation guidelines then in effect at the time of origination
or acquisition.
(2) Each Assigned Banking Loan has been originated,
serviced and administered in all material respects in accordance
with (A) BNY's standard loan servicing and operating procedures as
in effect from time to time; (B) all Applicable Laws; and (C) the
respective loan documents governing each Assigned Banking Loan.
(3) None of the rights or remedies under the documentation
relating to the Assigned Banking Loans has been amended, modified,
waived, subordinated or otherwise altered by BNY or any of its
Subsidiaries except as evidenced by a written instrument which is a
part of the file with respect to the Assigned Banking Loans and was
entered into by BNY or its Subsidiaries in good faith and in the
ordinary course of business.
(4) Each Assigned Banking Loan constitutes a legal, valid
and binding obligation of the respective borrower(s) or obligor(s),
enforceable against such borrower(s) and obligor(s) in accordance
with its terms, subject to the Permitted Enforceability Exceptions.
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(5) Each secured Assigned Banking Loan is secured by a
valid, enforceable and perfected lien on the secured property
described in the applicable security agreement, mortgage, pledge,
collateral assignment or other security agreement.
(6) Immediately following the sale of each Assigned Banking
Loan, JPM will own such Assigned Banking Loan free and clear of any
encumbrance, equity, participation interest, lien, pledge, charge,
claim or security interest arising by, through or under BNY.
(7) The files with respect to each Assigned Banking Loan
contain all of the material documents and instruments evidencing
the Assigned Banking Loans.
(8) All payments made up to the Closing Date on the
Assigned Banking Loans have been properly credited to the
respective Assigned Banking Loan.
(c) As to each SBA Loan that is subject to a guaranty, such
guaranty is in full force and effect, and is freely transferable as an
incident to the sale of each SBA Loan, and JPM shall be entitled to the
benefits of such guaranty.
Section 8.12 Letters of Credit; Derivative Products. (a)
Schedule 8.12(a) is a complete and accurate list, as of the date set
forth on such Schedule, of all Letters of Credit.
(b) Schedule 8.12(b) is a compete and accurate list, as of
the date hereof, of all interest rate swaps, caps, floors, option
agreements, foreign exchange, cash management, futures and forward
Contracts and other similar risk management arrangements and derivative
financial instruments entered into for the account of the Banking
Business in connection with Loans being transferred pursuant to this
Agreement. All of such agreements, arrangements or instruments were
entered into in accordance in all material respects with all Applicable
Laws and, to the knowledge of BNY, with counterparties that were
financially responsible at the time. Each of such agreement, arrangement
or instrument constitutes a valid and legally binding obligation of BNY
or its Subsidiary, enforceable in accordance with its terms subject to
Permitted Enforceability Exceptions, and are in full force and effect.
None of BNY nor any of its Subsidiaries or, to the knowledge of BNY, any
other party thereto is in material breach of any of its obligations under
such agreement or arrangement.
Section 8.13 Banking Contracts. Schedule 8.13 sets forth a
complete and correct list, as of the date hereof, of each Contract
primarily relating to the Banking Business (other than the Banking
Leases, the Assigned Banking Loans and the Master Equipment Leases, which
are listed on the schedules hereto), indicating which Contracts would
require the consent or approval of any Person in order for BNY or its
Subsidiaries to assign such Contract to JPM. To BNY's Knowledge, each
party to any Assumed Banking Agreement has performed in all material
respects its obligations thereunder to the extent that such obligations
to perform have accrued, no party is in default under such Contracts and
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none of such contracts was entered into outside of the ordinary course of
BNY's business. Each such Contract constitutes the legal, valid and
binding obligation of BNY or its Subsidiary and, to BNY's Knowledge, the
respective third party, and is enforceable in accordance with its terms
subject to Permitted Enforceability Exceptions. Except as set forth in
Schedule 8.13, no Contract or oral agreement to which BNY or any of its
Subsidiaries is a party or by which the Purchased Banking Assets are
bound contains any non-competition, non-solicitation or exclusive dealing
agreements, or any other agreements or obligations that purports to limit
or restrict in any respect (a) the ability of BNY or any of its
Subsidiaries or the Banking Business (or, following the Closing, JPM or
its Affiliates) to solicit customers or employees or (b) the manner in
which, or the localities in which, all or any portion of the Banking
Business (or, following the Closing, the business and operations of JPM
or its Affiliates) is or could be conducted.
Section 8.14 Other Purchased Banking Assets. (a) Schedule
8.14(a) is a complete and accurate list, as of the date hereof, of
Prepaid Banking Expenses, Banking Cash on Hand, and Security Deposits
relating to the Banking Business.
(b) Schedule 8.14(b) is a complete and accurate list, as of
the date hereof, of Accrued Interest and FAS 91 Fees relating to the
Banking Business.
Section 8.15 Purchased Banking IP & IT Assets. (a) Schedule
8.15(a) is a complete and accurate list of all Purchased Banking IP. BNY
and its Subsidiaries own all the Purchased Banking IP, free and clear of
all Liens. To the Knowledge of BNY, each of the Purchased Banking IP is
valid, subsisting and enforceable, and is not subject to any outstanding
order, judgment, decree or agreement adversely affecting BNY's or any of
its Subsidiaries' use thereof or rights thereto. BNY and its
Subsidiaries have the right pursuant to license, sublicense, agreement or
permission to use, in the manner currently used in the Banking Business,
the Purchased Banking IP, to the extent not exclusively owned by BNY or
any of its Subsidiaries.
(b) Immediately after the Closing, JPM will own or have the
right to use in the operation of the Banking Business all of the
Purchased Banking IP, on terms and conditions substantially the same as
those in effect for BNY immediately prior to the Closing.
(c) There is no material litigation, opposition,
cancellation, proceeding, objection or claim pending, asserted in writing
or, to the Knowledge of BNY, threatened, concerning BNY's ownership,
validity, registerability, enforceability, infringement, use or licensed
right to use any Purchased Banking IP in connection with the Banking
Business.
(d) BNY and its Subsidiaries have taken reasonable and
commercially practicable measures to protect the secrecy, confidentiality
and value of Purchased Banking IP.
(e) BNY has implemented reasonable and commercially
practicable procedures to prevent any Person from gaining unauthorized
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access to the IT Assets. BNY has implemented reasonable backup and
disaster recover technology consistent with industry practices.
Section 8.16 Governmental Notices. Neither BNY nor any of its
Subsidiaries has received any notice from any Governmental Authority
indicating that such Governmental Authority would oppose or not promptly
grant or issue its consent or approval, if requested, with respect to the
transactions contemplated hereby. There are no threatened or pending
actions, proceedings or allegations by any Person or Governmental
Authority or any other facts known to BNY relating to it that could
reasonably be expected to have an adverse effect on the ability of the
parties to promptly obtain all requisite regulatory consents or to
perform its obligations under this Agreement.
Section 8.17 Banking Employees and Benefits. (a) Schedule
8.17(a) lists, as of the date hereof, all Banking Business Employees who
are identified as employed in the relevant business lines in the internal
BNY records and the position, corporate and functional title, status as
exempt or non-exempt, identification number, hire date, status as full or
part-time, status as active or on leave, if on leave, the date leave
commenced, geographic location and remuneration (including salary and
prior year's incentive award , if applicable) of each such Banking
Business Employee. Within thirty (30) days of the date hereof, BNY shall
update Schedule 8.17(a) to include Banking Business Employees as of the
date such Schedule is delivered who were not identified as employed in
the relevant business lines in the internal BNY records. Following the
date hereof and not less than five Business Days prior to the Closing
Date, BNY shall update Schedule 8.17(a) to reflect newly hired Banking
Business Employees and those Banking Business Employees whose employment
has terminated, as well as any change in the other information on
Schedule 8.17(a) applicable to any Banking Business Employee previously
listed on Schedule 8.17(a); provided that, within seven (7) Business Days
following the Closing Date, BNY shall update Schedule 8.17(a) to reflect,
as of the Closing, newly hired Banking Business Employees and those
Banking Business Employees whose employment has terminated, as well as
any change in the other information on Schedule 8.17(a) applicable to any
Banking Business Employee previously listed on Schedule 8.17(a);
provided, however, that no updated information shall be provided with
respect to those Banking Business Employees previously listed on Schedule
8.17(a) who have rejected a Comparable Job Offer or who have not received
Comparable Job Offers from JPM as of such date. All Banking Business
Employees have completed the pre-employment screening processes in place
at BNY as in effect from time to time and satisfied all requirements
thereof, including drug testing and fingerprinting.
(b) Schedule 8.17(b) lists all of the employee benefit
plans, programs and arrangements, including all pension, retirement,
retiree medical, profit-sharing, thrift, savings, deferred compensation,
compensation, incentive, equity-based, severance, welfare, fringe
benefit, perquisite and similar plans sponsored, maintained or
contributed to by BNY or any of its Subsidiaries and in which any Banking
Business Employee is eligible to participate (the "Banking Employee
Plans") and any employment, consulting, incentive, incentive guarantee,
other employment guarantee, change in control, severance, perquisite, or
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other compensation-related guarantee or agreement or letter between BNY
or any of its Subsidiaries and any Banking Business Employee (the
"Banking Employment Agreements"). BNY has made available to JPM copies
of all Banking Employee Plans and Banking Employment Agreements, and
where applicable, the most recent summary plan descriptions with respect
to the Banking Employee Plans.
(c) The Banking Employee Plans are in material compliance
with Applicable Law and have been administered in all material respects
in accordance with their terms. There is no pending or, to the Knowledge
of BNY, threatened legal action, suit or claim by any Banking Business
Employee under any Banking Employee Plan (other than ordinary course
claims for benefits) or Banking Employment Agreement. There is not now,
nor do any circumstances exist that could give rise to, any requirement
for the posting of security with respect to a Banking Employee Plan or
the imposition of any Lien on the assets of the Banking Business a under
ERISA Section 302(f) or Code Section 412(n).
(d) Each of the Banking Employee Plans intended to be
"qualified" within the meaning of Section 401(a) of the Code has a
favorable determination letter from the IRS, and BNY has no Knowledge of
any fact or set of circumstances that would reasonably be expected to
adversely affect such qualified status. Neither BNY nor any of its
Subsidiaries contributes to (nor has it ever contributed to) any
multiemployer plan or any multiple employer plan, each within the meaning
of ERISA, on behalf of Banking Business Employees.
(e) Except as set forth on Schedule 8.17(e) or as otherwise
contemplated by this Agreement, neither the execution and delivery of
this Agreement nor the consummation of the transactions contemplated
hereby (either standing alone or together with any other event) will (i)
result in any material payment (including, without limitation, severance,
golden parachute or otherwise) becoming due under any Banking Employee
Plan or Banking Employment Agreement to any Banking Business Employee;
(ii) materially increase the benefits otherwise payable under any Banking
Employee Plan or Banking Employment Agreement to any Banking Business
Employee; or (iii) result in the acceleration of the time or payment or
vesting of any benefits to any Banking Business Employee.
Section 8.18 Labor Contracts and Relations. With respect to
Banking Business Employees, neither BNY nor any of its Subsidiaries is a
party to any collective bargaining agreement, contract, or other
agreement or understanding with a labor union or labor organization, nor
is BNY or any of its Subsidiaries the subject of a proceeding asserting
it has committed an unfair labor practice or seeking to compel it to
bargain with any labor organization as to wages and conditions of
employment, nor, to BNY's Knowledge, is any such proceeding threatened,
nor is there any strike or other labor dispute by the Banking Business
Employees pending or threatened, nor does BNY have Knowledge of any
activity involving any Banking Business Employees seeking to certify a
collective bargaining unit or engaging in union organizational activity.
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The Banking Business is and has been operated in compliance in all
material respects with all Applicable Laws relating to employment and
employment practices, occupational safety and health standards, terms and
conditions of employment and wages and hours, and neither BNY nor any of
its Subsidiaries is or has engaged in any unfair labor practice with
respect to the Banking Business.
Section 8.19 Investment Products; Personnel. Each Banking
Business Employee who is required by Applicable Law to be licensed to
sell non-deposit investment products, including insurance and securities,
is validly licensed and in good standing with each applicable regulator,
including the National Association of Securities Dealers (the "NASD") and
the state insurance regulators. BNY and its Affiliates have conducted
all sales of fixed and variable annuity and credit insurance products and
securities investment products, and have administered and serviced all
non-deposit investment accounts, in compliance with all Applicable Laws
in all material respects, including, without limitation, all applicable
regulations and orders of the federal banking agencies and the NASD.
Section 8.20 Properties and Purchased Banking Assets. All of
the physical assets to be transferred as part of the Purchased Banking
Assets that are material to the operation of the Banking Business are in
good repair and working order, except for ordinary wear and tear.
Section 8.21 Title. (a) As to each Purchased Banking Asset
other than Owned Banking Premises and Banking Leases, BNY or one of its
Subsidiaries is the lawful owner of such Purchased Banking Asset, free
and clear of all Liens (other than Permitted Liens) and, assuming receipt
of the consents set forth on Schedule 8.21(a), BNY and its Subsidiaries
will have the right to sell and convey to JPM all of such Purchased
Banking Assets on the Closing Date.
(b) As to Owned Banking Premises, BNY or one of its
Subsidiaries is the lawful owner of the Owned Banking Premises free and
clear of all Liens except for Permitted Liens.
(c) As to Banking Leases, BNY or one of its Subsidiaries
has a valid leasehold interest in the Leased Premises covered by such
Lease, free and clear of all Liens except Permitted Liens, none of which
Permitted Liens shall prevent BNY or any of its Subsidiaries from using
the premises covered thereby as presently used. BNY and its Subsidiaries
have and will upon receipt of all required consents, assign to JPM, the
Banking Leases, and has and will upon receipt of all consents set forth
on Schedule 8.21(c), convey to JPM and its Subsidiaries on the Closing
Date, a valid leasehold interest in the Leased Banking Premises or, to
the extent applicable, licenses with respect thereto, subject only to
Permitted Liens.
Section 8.22 Environmental Matters. Except as set forth on
Schedule 8.22:
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(a) Each of BNY and each of its Subsidiaries is currently
in compliance in all material respects with all Environmental Laws
applicable to any Owned Banking Premises or Leased Banking Premises, and
with respect to any facilities, improvements, operations, and activities
conducted by BNY or any of its Subsidiaries on such premises. Neither
BNY nor any of its Subsidiaries has received any notice that there has
been any failure to comply with Environmental Laws applicable to any
Owned Banking Premises or Leased Banking Premises, and with respect to
any facilities, improvements, operations, and activities conducted by BNY
or any of its Subsidiaries on such premises except any such notice with
respect to a failure to comply which has been fully remedied. To the
Knowledge of BNY, no facilities, improvements, operations or activities
have been conducted on any Loan Properties in violation of any
Environmental Laws.
(b) Each of BNY and its Subsidiaries has all material
environmental permits and approvals necessary under Environmental Laws
for all facilities, improvements, operations and activities conducted by
BNY or any of its Subsidiaries on the Owned Banking Premises and the
Leased Banking Premises, and BNY and its Subsidiaries are currently in
compliance with all such permits and approvals.
(c) There is no suit, claim, demand, action, consent order,
or proceeding pending or, to the Knowledge of BNY, threatened in which
BNY or any Affiliate thereof has been or, with respect to threatened
proceedings, could reasonably be expected to be named as a defendant,
responsible party or potentially responsible party (i) for alleged
noncompliance (including by any predecessor for which BNY or any
Affiliate thereof may have liability), with any Environmental Laws or
(ii) relating to the Release into or presence in the Environment of any
Hazardous Materials, in either case at or on any Owned Banking Premises
or Leased Banking Premises.
(d) There is no suit, claim, demand, action, consent order
or proceeding pending or, to the Knowledge of BNY, threatened in which
any Loan Property has been or, with respect to threatened proceedings,
could reasonably be expected to be named as a defendant, responsible
party or potentially responsible party (i) for alleged noncompliance
(including by any predecessor) with any Environmental Law, or (ii)
relating to the Release into or presence in the Environment of any
Hazardous Material, in either case at or on a Loan Property.
(e) Neither BNY nor any of its Subsidiaries, nor to BNY's
Knowledge, any owner of a Loan Property, has received any written notice
regarding a matter on which a suit, claim, action or proceeding as
described in subsection (c) or (d) of this Section 8.22 could reasonably
be based.
(f) To the Knowledge of BNY, there have been no Releases or
presence in the Environment of any Hazardous Materials in, on, from,
under or affecting any Owned Banking Premises or Leased Banking Premises
which would reasonably be expected to have a material adverse impact on
such Owned Banking Premises or Leased Banking Premises. To the Knowledge
of BNY, there have been no Releases or presence in the Environment of any
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Hazardous Materials in, on, from, under or affecting any Loan Property
which would have a material adverse impact on such Loan Property.
(g) To the Knowledge of BNY, there are no asbestos-
containing materials, polychlorinated biphenyls (PCBs) or equipment
containing PCBs, urea formaldehyde foam insulation products, underground
storage tanks, sanitary landfills, or injection ▇▇▇▇▇ at or in any Owned
Banking Premises or Leased Banking Premises which would have a material
adverse impact on such Owned Banking Premises or Leased Banking Premises.
To the Knowledge of BNY, there are no asbestos-containing materials,
polychlorinated biphenyls (PCBs) or equipment containing PCBs, urea
formaldehyde foam insulation products, underground storage tanks,
sanitary landfills, or injection ▇▇▇▇▇ at or in any Loan Property.
Section 8.23 Derivative Products. Schedule 8.23 contains a
true and complete list of the Assumed Derivative Products as of the date
set forth on such Schedule.
Section 8.24 Compliance with Laws. Each of BNY and its
Subsidiaries is in compliance with all rules and regulations applicable
to the Banking Business under Applicable Law, except as would not
reasonably be expected to, individually or in the aggregate, result in a
Banking Material Adverse Effect. Each of BNY and its Subsidiaries has
conducted and is conducting the Banking Business (including, without
limitation, all matters relating to the Banking Business Employees, the
Owned Banking Premises and the Leased Banking Premises) and has
originated, administered and serviced all Assigned Banking Loans and
Assumed Banking Deposits in compliance with Applicable Law in all
material respects, including, without limitation, the Equal Credit
Opportunity Act, the Fair Housing Act, the CRA, the Home Mortgage
Disclosure Act, the BSA and the rules and regulations promulgated
thereunder and all other applicable fair lending laws and other laws
relating to discriminatory business practices and the rules and
regulations promulgated thereunder; provided that the environmental
matters addressed by Section 8.22 shall be governed by Section 8.22 and
not this Section 8.24. Except as set forth on Schedule 8.24, neither BNY
nor any of its Subsidiaries is subject to any order, ruling, written
agreement, memorandum of understanding or other formal or informal
enforcement action with respect to the Banking Business directed to it by
any Governmental Authority. There are no material and uncured or
unremedied deficiencies with respect to or affecting the Banking
Business, or the Purchased Banking Assets and Assumed Banking Liabilities
being acquired in connection therewith. BNY received a rating of
satisfactory or higher in its most recent examination or interim review
with respect to the CRA. Neither BNY nor any of its Subsidiaries has
been advised of any supervisory concerns regarding its compliance with
the CRA.
Section 8.25 Banking Financial Information. (a) BNY has
previously provided JPM with a consolidated income statement and
consolidated statement of assets and liabilities concerning the Banking
Business as of, or for the fiscal years ended, December 31, 2004 and
December 31, 2005 (the "Banking Financial Information"). The Banking
Financial Information fairly presents in all material respects the
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financial position and results of operations of the Banking Business as
of the date or dates of such information. The Banking Financial
Information is unaudited, has been prepared from the books and records of
the Banking Business and takes into account certain adjustments made to
reflect the Banking Business as a standalone business, is subject to
BNY's internal accounting policies and procedures and is used by BNY to
prepare its financial statements that are prepared in accordance with
GAAP.
(b) The books of account of the Banking Business fairly and
accurately in all material respects reflect the Purchased Banking Assets
and Assumed Banking Liabilities in accordance with GAAP.
(c) The books of account of the Banking Business are
maintained by BNY substantially in accordance with applicable legal and
accounting requirements.
Section 8.26 Books and Records. With respect to each Assumed
Banking Agreement and all accounts related thereto, the accounting,
financial and other books and records kept by BNY and any of its
Subsidiaries are in all material respects complete and accurate and have
been maintained in the usual, regular and ordinary course of business and
in accordance in all material respects with Applicable Law.
Section 8.27 Safe Deposit Boxes. Each of BNY and its
Subsidiaries is in compliance in all material respects with the terms and
conditions of the applicable leases or other agreements relating to the
safe deposit boxes currently offered or maintained in the Regional
Banking Distribution Network.
Section 8.28 Banking Assets. Excepting for the matters set
forth on Schedule 8.28 and taking into account the Excluded Banking
Assets and the Excluded Banking Liabilities and the arrangements
contemplated by Sections 12.3 and 10.10, the Purchased Banking Assets
purchased and Assumed Banking Liabilities assumed by JPM from BNY,
together with the services to be provided by BNY under the Banking
Transition Services Agreement and management, support and administrative
services that BNY may reasonably assume JPM will provide, will be
sufficient to enable JPM, immediately as of the Closing Date, to engage
in all material respects in the activities of the Banking Business in
which BNY is currently, and has since January 1, 2003 been engaged.
Section 8.29 Leased Banking Premises. (a) Schedule 8.29(a)
contains a list, as of the date hereof, of each written Banking Lease and
all material amendments or modifications thereto, including the amount of
space, rent and term, pursuant to which BNY or any of its Subsidiaries
leases the Leased Banking Premises, with a demarcation indicating the
Banking Leases that require consent to be assigned or subleased.
(b) BNY has provided JPM with a true and complete list of
all of the tenants or other occupants of the Leased Banking Premises as
of the date set forth on such list.
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(c) Each Banking Lease is in full force and has not been
modified, altered or amended, and, neither BNY nor to BNY's Knowledge,
the landlord is in default under any of its respective obligations
thereunder, except for such modifications, alterations, amendments or
defaults that, individually or in the aggregate, would not reasonably be
expected to result in a Banking Material Adverse Effect.
(d) BNY has provided JPM with true and accurate copies of
each of the Banking Leases and all amendments thereto, and neither BNY
nor, to BNY's Knowledge, any tenant under the Banking Leases has received
any notice of default thereunder or has any Knowledge of any event that,
by itself or with the passage of time, could result in a material default
under a Banking Lease.
(e) Except as would not, individually or in the aggregate,
reasonably be expected to have a Banking Material Adverse Effect, neither
BNY nor any of its Subsidiaries engaged in the Banking Business has
received or has Knowledge of any written notices of violations,
citations, summonses, compliance orders, directives, suits, other legal
process, or other written notices of potential material liability under
applicable zoning, building, fire or other Applicable Laws and
regulations relating to the Banking Leases or the Leased Banking
Premises.
(f) Neither BNY nor any of its Subsidiaries has received or
has Knowledge of any written notice of a condemnation proceeding relating
to the Banking Leases or the Leased Banking Premises that would
materially affect a property or its intended use (and provided that BNY
shall give JPM prompt written notice as to any such condemnation notices
received (or of which BNY has Knowledge) between the date hereof and the
Closing Date, this representation shall not be deemed to be breached with
respect to such matters for purposes of Section 15.3(b)).
(g) Neither BNY's nor any of its Subsidiaries' rights with
respect to the Leased Banking Premises are subordinate to any mortgage,
trust deed or ground lease, except (i) as provided in Schedule 8.29(g),
(ii) where such lienholder has executed a non-disturbance agreement that
assures BNY's or its Subsidiaries' rights to possession and other rights
granted under the Banking Lease (provided that there is no default
thereunder), or (iii) for such subordination that, individually or in the
aggregate, would not reasonably be expected to result in a Banking
Material Adverse Effect.
Section 8.30 Owned Banking Premises. (a) Schedule 8.30(a)
contains a list, complete and accurate, of all the Owned Banking
Premises.
(b) On the Closing Date, BNY and its Subsidiaries will
convey good and marketable title to the Owned Banking Premises free and
clear of all Liens, except for Permitted Liens, applicable zoning laws
and the rights of tenants under leases specified in Schedule 8.30(b).
BNY and its Subsidiaries shall maintain in effect from the date hereof
until the Closing Date, all property, liability, fire and casualty
insurance in effect as of the date hereof, on substantially the same
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terms as currently in effect, with regard to the Owned Banking Premises
and the Leased Banking Premises, including the structures, leasehold
improvements and fixed assets relating to the Banking Branches.
(c) Except as would not, individually or in the aggregate,
reasonably be expected to have a Banking Material Adverse Effect, neither
BNY nor any of its Subsidiaries has received or has any Knowledge of any
written notice of violation, citations, summonses, subpoenas, compliance
orders, directives, suits, other legal process, or other written notice
of potential liability under applicable zoning, building, fire and other
Applicable Laws and regulations relating to the Owned Banking Premises.
(d) Neither BNY nor any of its Subsidiaries has received
any written notice of a condemnation proceeding relating to the Owned
Banking Premises that would materially affect a property or its intended
use (and provided that BNY shall give JPM prompt written notice as to any
such condemnation notices received (or of which BNY has Knowledge)
between the date hereof and the Closing Date, this representation shall
not be deemed to be breached with respect to such matters for purposes of
Section 15.3(b)).
(e) Except as set forth on Schedule 8.30(e), to the
Knowledge of BNY, there are no outstanding agreements, options, rights of
first refusal or commitments of any nature obligating BNY or any of its
Subsidiaries to transfer any of the Owned Banking Premises or rights or
interests therein to any other person or entity.
(f) Except as set forth on Schedule 8.30(f), to the
Knowledge of BNY, there are no leases, subleases, licenses or other
rental agreements or occupancy agreements which grant any possessory
interest in and to any space situated on or in the Owned Banking
Premises.
(g) Except as would not, individually or in the aggregate,
reasonably be expected to have a Banking Material Adverse Effect,
(i) each Owned Banking Premises (or the use and operation of any
component, portion or area of any such premises) is in compliance in all
material respects with all applicable municipal and other governmental
laws, ordinances, regulations, codes, licenses, permits and
authorizations (provided that compliance with any building codes shall be
considered only as of the time that any construction or building permit
would have required such compliance), and (ii) there are presently and
validly in effect all licenses, permits and other authorizations to be
obtained by BNY or any of its Subsidiaries that are necessary.
Section 8.31 Insurance Coverage. The Banking Business is
insured against such risks and in such amounts and with such coverage
customarily carried by Persons conducting businesses similar to the
Banking Business or owning assets similar to the Purchased Banking
Assets. Since January 1, 2000, all premiums payable under all insurance
policies and fidelity bonds that currently cover the assets, business,
operations and employees of the Banking Business have been timely paid in
all material respects, and BNY and its Subsidiaries have otherwise
complied in all material respects with the terms and conditions of all
such policies and bonds. Since January 1, 2000, there is no material
claim by BNY or any of its Subsidiaries pending under any such policies
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or bonds as to which coverage has been denied by the underwriters of such
policies or bonds. To the Knowledge of BNY, no insurer has threatened a
termination, or material alteration, of coverage under any such policies
or bonds, except notices required to be given by Applicable Law prior to
the expiration of any policy or bond advising that coverage will
terminate by its terms if such policy or bond is not renewed.
Section 8.32 Taxes. (a) All Tax Returns required to be filed
with respect to the Purchased Banking Assets (such Tax Returns, the
"Banking Tax Returns") have been filed with the appropriate Taxing
Authority; each such Banking Tax Return is true, complete and correct in
all material respects. All Taxes shown to be due on such Banking Tax
Returns, and all Taxes arising from or attributable to the Purchased
Banking Assets, have been timely paid, withheld and timely paid to the
appropriate Taxing Authority, or reflected in an appropriate tax reserve
in accordance with GAAP on the financial statements of JPM, other than
those Taxes the failure of which to be paid would not result in a Lien on
the Purchased Banking Assets or become a liability of JPM.
(b) No notice of deficiency or assessment of Taxes has been
received from any Taxing Authority with respect to the Purchased Banking
Assets. There are no security interests on any of the Purchased Banking
Assets that arose in connection with any failure (or alleged failure) to
pay any Tax (whether or not such Tax relates to the Purchased Banking
Assets).
(c) None of the Purchased Banking Assets is "tax exempt use
property" (within the meaning of Section 168(h) of the Code). None of the
Purchased Banking Assets is a lease made pursuant to Section 168(f)(8) of
the Internal Revenue Code of 1954.
Section 8.33 Information Regarding Banking Customers and
Relationships. After the Closing, neither BNY nor any of its Affiliates
(including BNY Mortgage Company LLC) shall have any right or interest in
or to any of the items included in Section 3.1(a)(8) (except to the
extent otherwise provided in the proviso thereto or required for BNY to
fulfill its obligations under the Banking Transition Services Agreement).
Section 8.34 No Other Representations or Warranties. Except
as is expressly represented or warranted in this Agreement, neither BNY
nor any of its Subsidiaries makes any representation or warranty
whatsoever with regard to any Purchased Banking Assets being transferred
to JPM or any Assumed Banking Liability being assumed by JPM or as to any
other matter or thing.
ARTICLE IX
REPRESENTATIONS AND WARRANTIES OF JPM RELATING TO BANKING
Except as set forth in the JPM Disclosure Schedule, JPM
hereby represents and warrants to BNY, as of the date hereof (or as of
such other date as may be expressly provided in any representation or
warranty), as follows:
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Section 9.1 Organization. JPM is a corporation duly
organized, validly existing, and in good standing under the laws of
Delaware, and has the all requisite corporate power and corporate
authority, as well as all requisite licenses, franchises, permits,
qualifications and similar permissions and authorities, to own the
Purchased Banking Assets, assume the Assumed Banking Liabilities and to
carry on the Banking Business as currently conducted and is duly
qualified to do business in and is in good standing as a foreign
corporation or other entity in each jurisdiction where the ownership of
the Purchased Banking Assets and the conduct of the Banking Business
requires such qualification, except where the failure to be so qualified
or be in good standing would not, individually or in the aggregate, have
a JPM Material Adverse Effect.
Section 9.2 Authority; Capacity. Each of JPM and each of its
Subsidiaries has all necessary corporate power and authority to make,
execute and deliver this Agreement and the Banking Related Agreement to
which JPM or such Subsidiary is a party and to perform all of the
obligations to be performed by it under this Agreement and the Banking
Related Agreement. The making, execution, delivery and performance of
this Agreement and the Banking Related Agreement by JPM and each of its
Subsidiaries that is a party to such agreement, and the consummation by
JPM and each of its Subsidiaries of the transactions contemplated to be
performed by it hereby and thereby have been duly and validly authorized
and approved by all necessary corporate action on the part of JPM and
such Subsidiary, as applicable. This Agreement and the Banking Related
Agreement have been duly and validly executed and delivered by JPM and
each of its Subsidiaries that is a party to such agreement, and assuming
the due authorization, execution and delivery by BNY and each of its
Subsidiaries that is a party to such agreement, each of this Agreement
and the Banking Related Agreement will constitute the valid, legal and
binding obligation of JPM and each of its Subsidiaries that is a party to
such agreement, enforceable against any and all of them in accordance
with its terms, except for the Permitted Enforceability Exceptions. The
representations and warranties set forth in this Section 9.2 shall apply
mutatis mutandis with respect to both the Original Purchase Agreement and
this Agreement, and, with respect to the Original Purchase Agreement,
shall be made as of the Original Execution Date and, with respect to this
Agreement, shall be made as of the Execution Date; provided, however,
that the representations and warranties set forth in this Section 9.2 do
not "address matters only as of a particular date" for purposes of
Section 15.2(b).
Section 9.3 No Conflict; Defaults. Assuming the consents and
approvals referred to in Section 9.4 are obtained, neither the execution
and delivery of this Agreement and the Banking Related Agreement by JPM
or any of its Subsidiaries, nor the consummation of the transactions
contemplated hereby and thereby by JPM or any of its Subsidiaries, will
(i) conflict with, result in the breach of, constitute a default under,
or accelerate the performance provided by, the terms of any order, law,
regulation, contract, indenture, mortgage, instrument, commitment,
judgment, or decree to which JPM or any of its Subsidiaries is a party or
by which it is bound, except such conflicts, breaches, defaults or
accelerations that would not, individually or in the aggregate, have a
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JPM Material Adverse Effect or (ii) violate the articles of incorporation
or bylaws, or any other equivalent organizational document, of JPM or any
of its Subsidiaries.
Section 9.4 Consents and Approvals. Neither JPM nor any of
its Subsidiaries is required to obtain any material order, permit,
consent, approval or authorization of, nor required to make any material
declaration or filing with, any Governmental Authority or third party in
connection with the execution and delivery of this Agreement or the
Banking Related Agreement, as applicable, or the consummation of the
transactions contemplated hereby and thereby, except (i) as may be
required pursuant to the Contracts set forth on Schedule 9.4(i), and (ii)
the approvals or non-objections of the Governmental Authorities set forth
on Schedule 9.4(ii) (such approvals contemplated by the foregoing clause
(ii), together with the Banking Seller Government Consents, the "Banking
Government Consents") (such approvals contemplated by the foregoing
clauses (i) and (ii), together with the Banking Seller Approvals, the
"Banking Approvals").
Section 9.5 Litigation and Related Matters. As of the date
hereof, to the Knowledge of JPM, there is no material action, suit,
proceeding, claim or other litigation, or any investigation by any
Governmental Authority, pending or threatened against JPM or any of its
Subsidiaries that would materially impede, delay or prevent JPM or any of
its Subsidiaries from entering into this Agreement or performing its
terms.
Section 9.6 Compliance with Laws and Regulations. Except as
set forth in Schedule 9.6, each of JPM and its Subsidiaries has conducted
and is conducting its business in all material respects in compliance
with all Applicable Laws, including, without limitation, all regulations,
orders, and opinions of the Office of the Comptroller of the Currency and
the FDIC, and, except as would not, individually or in the aggregate,
result in a JPM Material Adverse Effect, neither JPM nor any of its
Subsidiaries is subject to any order or ruling directed to it by, or
memorandum of understanding with, any federal and state Governmental
Authority.
Section 9.7 Governmental Notices; Regulatory Matters.
Neither JPM nor any of its Subsidiaries has received any notice from, or
had any discussions with, any federal, state, or other Governmental
Authority indicating that such agency would oppose or not promptly grant
or issue its consent or approval, if requested, with respect to the
Banking Sale and the related transactions contemplated hereby and the
Banking Related Agreement. There are no threatened or pending actions,
proceedings or allegations by any Person or Governmental Authority or any
other facts known to JPM relating to it that could reasonably be expected
to have an adverse effect on the ability of the parties to promptly
obtain all requisite regulatory consents for, or to perform its
obligations under this Agreement relating to, the Banking Sale and the
related transactions contemplated by this Agreement and the Banking
Related Agreement.
Section 9.8 Brokers. Neither JPM nor any of its Affiliates
has or shall have any liability or obligation as a result of any
brokerage or finder's fee or other commission of any Person retained by
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BNY or any of its Affiliates in connection with this Agreement, the
Banking Related Agreement or the transactions contemplated hereby or
thereby.
ARTICLE X
GENERAL COVENANTS
Section 10.1 Access to Properties and Records Relating to the
Corporate Trust Business. (a) To the extent permitted by Applicable Law,
from the date hereof until the earlier of the Closing Date and the
termination of this Agreement, JPM will provide to BNY and to its
officers, accountants, counsel, and other representatives reasonable
access during JPM's normal business hours to the properties, books,
contracts, commitments and records of JPM and its Subsidiaries relating
primarily to the Corporate Trust Business for purposes related to the
consummation of the transactions contemplated by this Agreement
(including, without limitation, access to the Leased Corporate Trust
Premises for purposes of conducting customary Phase 1 environmental
audits and inspections); provided, however, that such access shall be at
reasonable times and upon reasonable notice and shall not disrupt the
personnel and operations of JPM or any of their Subsidiaries; provided,
further, that BNY's access to Corporate Trust Tax Returns filed by or
otherwise relating to JPM or any of its Subsidiaries shall be governed by
Article XIV. All requests for access to such offices, properties, books,
and records shall be made to such representatives of JPM as JPM shall
designate, who shall be solely responsible for coordinating all such
requests and all access permitted hereunder.
(b) Following the Closing, BNY will grant JPM and its
representatives reasonable access during BNY's normal business hours to
all books, records and other data included in the Corporate Trust
Business and the Purchased Corporate Trust Assets and to the Transferred
Corporate Trust Employees (including making such persons reasonably
available to JPM for depositions, witness preparation, trial preparation
and fact-gathering, but excluding any proceedings, or threatened
proceedings, between JPM and BNY or an Affiliate of BNY or of JPM) upon
reasonable prior notice if such access is reasonably deemed necessary or
desirable by JPM or any of its Subsidiaries in connection with its tax,
regulatory, litigation, contractual or other legitimate, non-competitive
matters. Nothing in the foregoing shall prevent JPM or any of its
Subsidiaries from seeking to make such persons available via subpoena or
other legal or similar process.
(c) For a period commencing on the Closing Date and ending
on the earlier to occur of (i) the seventh (7th) anniversary of the
Closing Date and (ii) the date on which such books and records are
transferred to BNY, to the extent permitted by Applicable Law, JPM shall
make available to BNY at BNY's reasonable request retained books and
records (other than Corporate Trust Tax Returns, which shall be governed
by Article XIV), if any, relating to the Corporate Trust Business
transferred to BNY hereunder.
Section 10.2 Access to Properties and Records Relating to the
Banking Business. (a) To the extent permitted by Applicable Law, from the
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date hereof until the earlier of the Closing Date and the termination of
this Agreement, BNY will provide to JPM and to its officers, accountants,
counsel, and other representatives reasonable access during BNY's normal
business hours to the properties, books, contracts, commitments and
records of BNY and its Subsidiaries relating primarily to the Banking
Business for purposes related to the consummation of the transactions
contemplated by this Agreement (including, without limitation, access to
Owned Banking Premises, the Leased Banking Premises and the Other Banking
Facilities for purposes of conducting customary Phase 1 environmental
audits and inspections); provided, however, that such access shall be at
reasonable times and upon reasonable notice and shall not disrupt the
personnel and operations of BNY or any of its Subsidiaries; and provided,
further, that JPM's access to Banking Tax Returns filed by or otherwise
relating to BNY or any of its Subsidiaries shall be governed by Article
XIV. All requests for access to such offices, properties, books, and
records shall be made to such representatives of BNY as BNY shall
designate, who shall be solely responsible for coordinating all such
requests and all access permitted hereunder.
(b) Following the Closing, JPM will grant BNY and its
representatives reasonable access during JPM's normal business hours to
all books, records and other data included in the Banking Business and
the Purchased Banking Assets and to the Transferred Banking Employees
(including making such persons reasonably available to BNY for
depositions, witness preparation, trial preparation and fact-gathering,
but excluding any proceedings, or threatened proceedings, between BNY and
JPM or an Affiliate of JPM or of BNY) upon reasonable prior notice if
such access is reasonably deemed necessary or desirable by BNY or any of
its Subsidiaries in connection with its tax, regulatory, litigation,
contractual or other legitimate, non-competitive matters. Nothing in the
foregoing shall prevent BNY or any of its Subsidiaries from seeking to
make such persons available via subpoena or other legal or similar
process.
(c) For a period commencing on the Closing Date and ending
on the earlier to occur of (i) the seventh (7th) anniversary of the
Closing Date and (ii) the date on which such books and records are
transferred to JPM, to the extent permitted by Applicable Law, BNY shall
make available to JPM at JPM's reasonable request retained books and
records (other than Banking Tax Returns, which shall be governed by
Article XIV), if any, relating to the Banking Business transferred to JPM
hereunder.
Section 10.3 Efforts; Regulatory Filings and Other Actions.
(a) Each of the parties hereto agrees to use its reasonable best efforts
to take, or cause to be taken, all actions and to do, or cause to be
done, all things necessary, proper or advisable to consummate and make
effective as promptly as practicable the transactions contemplated hereby
and to cooperate with the other parties in connection with the foregoing.
Without limiting the generality of the foregoing, each of the parties
shall use its reasonable best efforts to: (i) obtain all Corporate Trust
Approvals and Banking Approvals (including SBA Consents) as promptly as
practicable, (ii) to lift or rescind as promptly as practicable any
injunction or restraining order or other order adversely affecting the
ability of the parties hereto to consummate the transactions contemplated
hereby, (iii) to effect all necessary registrations and filings, if any,
and (iv) to fulfill all of the conditions to the obligations of the
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parties to consummate the transactions contemplated by this Agreement set
forth in Article XV.
(b) In furtherance, and not in limitation, of the covenants
set forth in Section 10.3(a), but subject to Section 15.3(f), each of the
parties hereto agrees to use its best efforts to take, or cause to be
taken, all actions and to do, or cause to be done, all things necessary,
proper or advisable to obtain the Required Government Consents as
promptly as practicable, including promptly agreeing to take and taking
any other actions required by any Governmental Authority with respect to
any Required Government Consent to the extent necessary to consummate the
transactions contemplated hereby as promptly as practicable and, where
applicable, to avoid a decision by a Governmental Authority to open an
in-depth investigation or to cause a Governmental Authority to close its
investigation as promptly as practicable. The parties agree that they
shall cooperate in preparing, submitting, filing, updating and publishing
(as applicable), as expeditiously as possible, all applications,
notifications and report forms as may be required by Applicable Law with
respect to the transactions contemplated by this Agreement, including
those of any applicable state, federal or foreign regulatory agency, and
the parties hereto will use their best efforts to obtain such approvals
and accomplish such actions as expeditiously as possible; provided that,
within thirty (30) days after the date hereof, each party will file any
application, notice or report required to be filed by such party with any
Governmental Authority with respect to any Government Consent or
otherwise required in connection with the transactions contemplated
hereby and will use its best efforts to obtain a waiver from any
applicable waiting period, and will make any further filings pursuant
thereto that may be necessary in connection therewith.
(c) Each party shall, subject to Applicable Law, (i) permit
counsel for the other party to review in advance, and consider in good
faith the views of the other party in connection with, any proposed
written communication to any Governmental Authority in connection with
the transactions contemplated hereby, and (ii) provide counsel for the
other party with copies of all filings made by such party, and all
material correspondence between such party (and its advisors) with any
Governmental Authority and any other information supplied by such party
and such party's Affiliates to a Governmental Authority or received from
such a Governmental Authority in connection with the transactions
contemplated hereby; provided, however, that materials may be redacted
(x) to remove references concerning the valuation of the Corporate Trust
Business or the Banking Business, (y) as necessary to comply with
contractual arrangements, and (z) as necessary to address reasonable
privilege or confidentiality concerns. Each party agrees that it will use
reasonable best efforts to keep the other party fully informed with
respect to all applications and developments related thereto, and, where
reasonably practicable under the circumstances, give the other party
reasonable advance notice of, and whenever appropriate, invite the other
party (and give due consideration in good faith to any reasonable request
of the other party) to participate in, any meetings or discussions held
with any Governmental Authority; provided that such participation is not
objected to by such Governmental Authority. The parties further covenant
and agree to mutually identify the most expedient method of effecting, as
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promptly as practicable, the legal transfer of all of the Purchased
Corporate Trust Assets and the Assumed Corporate Trust Liabilities to
BNY, and all of the Purchased Banking Assets and the Assumed Banking
Liabilities to JPM, and each party further covenants and agrees to use
its reasonable best efforts to so effectuate such transfer, including, to
the extent applicable, by making full use of available state fiduciary
substitution statutes and any appropriate interim bank and bank merger
structures. The parties further covenant and agree not to extend any
waiting period associated with any Government Consent or enter into any
agreement with any Governmental Authority not to consummate the
transactions contemplated by this Agreement, except with the prior
written consent of the other party hereto.
(d) The parties further covenant and agree that (i) with
respect to any threatened or pending preliminary or permanent injunction
or other order, decree or ruling or statute, rule, regulation or
executive order that would adversely affect the ability of the parties
hereto to consummate the transactions contemplated hereby, to use their
respective best efforts to prevent the entry, enactment or promulgation
thereof, as the case may be, and (ii) in the event that any action, suit,
proceeding or investigation is commenced after the date hereof
challenging any of the parties' rights to consummate the transaction
contemplated by this Agreement, the parties shall use their best efforts,
and take all actions necessary and appropriate, to contest such action,
suit, proceeding or investigation.
(e) BNY and JPM will use their reasonable best efforts to
provide any notice or make any filings or claims required in order to
permit the Assignment to BNY of the Corporate Trust Agreements and the
Other Corporate Trust Contracts, and BNY, with the cooperation of JPM as
reasonably requested, shall use reasonable best efforts to obtain, before
and after the Closing Date, the consent of any party whose consent is
required in order to permit the assignment to BNY of the Other Corporate
Trust Contracts and the Corporate Trust Agreements. In furtherance, and
not in limitation, of the foregoing, BNY shall use reasonable best
efforts to effect the Assignment of the Corporate Trust Agreements to BNY
for, and to obtain any required approvals to accept, the Appointments set
forth on Schedule 10.3(e) as promptly as practicable within 180 days
after the Closing Date. If any such required consent shall not have been
obtained within the four-year time period specified in the Servicing
Agreement (provided that (i) such time period shall terminate earlier if
and when, after the second anniversary of the Closing, fewer than 2.5% of
the aggregate number of issuers under the Corporate Trust Agreements to
be transferred from JPM to BNY in the Corporate Trust Sale that remain
Restricted Items; and (ii) such time period shall terminate 18 months
after the Closing Date with respect to any Run-Off Appointment and
immediately with respect to any Appointment for which BNY shall cease to
use its reasonable best efforts to seek the consents or approvals
required to effect the assignment of such Appointment to BNY), JPM or any
of its Subsidiaries that is a party to any such Corporate Trust Agreement
shall have the right to resign as fiduciary, trustee, agent, successor,
or otherwise thereunder without any liability hereunder or thereunder
upon ninety days' prior written notice to BNY, and BNY shall use
reasonable best efforts to promptly identify an appropriate successor;
provided that, if, at any time following the Closing, JPM or any of its
Subsidiaries that is a party to any such Corporate Trust Agreement has an
individual conflict in continuing to serve as fiduciary, trustee, agent,
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successor or otherwise under such Corporate Trust Agreement, BNY will use
its reasonable best efforts to assist JPM to expedite the replacement.
(f) Promptly upon the execution of this Agreement, JPM and
BNY will reasonably coordinate in good faith in respect of any
communications by BNY with the parties whose consent is required. BNY
and JPM, in consultation with each other, shall as promptly as
practicable following the date hereof develop a communications and action
plan (which plan shall be designed to communicate promptly and follow up
with all such parties with respect to, and to obtain, all such required
consents), and shall keep each other reasonably informed regarding the
progress and status of such efforts.
(g) Each party represents, warrants and agrees that any
information furnished by it for inclusion in any regulatory application
will to its Knowledge be true and complete in all material respects as of
the date so furnished.
Section 10.4 Further Assurances. The parties agree that, from
time to time, whether before, on or after the Closing Date, each of them
will execute and deliver such further instruments of conveyance and
transfer and take such other action as may be reasonably necessary to
carry out the purposes and intents of this Agreement, including
delivering appropriate bills of sale and assignment and assumption
agreements to transfer assets and liabilities that are Restricted Items
once such assets and liabilities cease to be Restricted Items or as
required to effect any Subsequent Transfer. Without limiting the
generality of the foregoing, (i) upon request of BNY, JPM will negotiate
in good faith with BNY to enter into on or prior to the Closing a
transition services agreement on terms mutually agreed between BNY and
JPM, pursuant to which, for a period not to expire later than the
completion of the Banking Conversion, JPM shall provide certain services
required by BNY to support its Private Banking business substantially as
such business was supported by the Banking Business prior to the Closing;
and (ii) upon request of JPM, BNY will negotiate in good faith with JPM
to enter into on or prior to the Closing a networking agreement on a cost
neutral basis to BNY and such other terms mutually agreed between BNY and
JPM, pursuant to which JPM shall grant certain of BNY's employees with
the right to remain at certain of the Banking Branches to provide broker-
dealer and other brokerage services in such Banking Branches until the
completion of the conversion of BNY's broker-dealer accounts to JPM's
broker-dealer platform.
Section 10.5 Advice of Changes. (a) JPM shall promptly advise
BNY of (i) any change or event having a Corporate Trust Material Adverse
Effect or a JPM Material Adverse Effect, (ii) any change or event that
would or would be reasonably likely to cause or constitute a material
breach of any of JPM's or JPM's representations, warranties or covenants
contained herein, (iii) any material negative change in the ordinary
course of the business of the Corporate Trust Business, (iv) any
resignations or terminations of employment of the Corporate Trust
Business Employees having an official title above "Assistant Vice
President" or any Corporate Trust Business Employee having a different
title but similar duties as those with such a title, and any plans to
replace them, and (v) to the extent permitted by Applicable Law, and to
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the Knowledge of JPM, any governmental complaints, investigations or
hearings (or communications indicating that the same may be contemplated)
or the institution or the threat of significant litigation involving the
Corporate Trust Business.
(b) BNY shall promptly advise JPM of (i) any change or
event having a BNY Material Adverse Effect or a Banking Material Adverse
Effect, (ii) any change or event that would or would be reasonably likely
to cause or constitute a material breach of any of BNY's or BNY's
representations, warranties or covenants contained herein, (iii) any
material negative change in the ordinary course of the business of the
Banking Business, (iv) any resignations or terminations of employment of
the Banking Business Employees having a title of "Branch Manager" or an
official title above "Assistant Vice President" or any Banking Business
Employee having a different title but similar duties as those with such a
title, and any plans to replace them, and (v) to the extent permitted by
Applicable Law, and to the Knowledge of BNY, any governmental complaints,
investigations or hearings (or communications indicating that the same
may be contemplated) or the institution or the threat of significant
litigation involving the Banking Business.
(c) Notwithstanding anything to the contrary herein, a
party's good-faith failure to comply with its obligations under this
Section 10.5 shall not provide the other party hereo or any of such other
party's Affiliates with a right not to effect the transactions
contemplated by this Agreement, except, in each case, to the extent that
the underlying material breach of a representation, warranty or covenant
would independently provide such right.
Section 10.6 Exclusive Dealing. (a) During the period from the
date of this Agreement to the earlier of the Closing Date or the
termination of this Agreement, neither JPM nor any of its Affiliates
shall take any action to, directly or indirectly, encourage, initiate or
engage in discussions or negotiations with, or provide any information
to, any Person other than BNY or any of its Affiliates and their
representatives concerning any sale of the Corporate Trust Business,
except to the extent expressly required by this Agreement or any of the
Related Agreements or necessary to consummate the transactions
contemplated hereby or thereby. JPM will promptly communicate to BNY the
terms of any proposal of inquiry that it or any of its Affiliates may
receive in respect of any such transaction other than the transactions
contemplated hereby, or of any such negotiations or discussions being
sought to be initiated with JPM or any of its Affiliates, and, if known,
the identity of the third party initiating any such proposal, inquiry,
discussion or negotiation.
(b) During the period from the date of this Agreement to
the earlier of the Closing Date or the termination of this Agreement,
neither BNY nor any of its Affiliates shall take any action to, directly
or indirectly, encourage, initiate or engage in discussions or
negotiations with, or provide any information to, any Person other than
the JPM or any of its Affiliates and their representatives concerning any
sale of the Banking Business, except to the extent expressly required by
this Agreement or any of the Related Agreements or necessary to
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consummate the transactions contemplated hereby or thereby. BNY will
promptly communicate to JPM the terms of any proposal of inquiry that it
or any of its Affiliates may receive in respect of any such transaction
other than the transactions contemplated hereby, or of any such
negotiations or discussions being sought to be initiated with BNY or any
of its Affiliates, and, if known, the identity of the third party
initiating any such proposal, inquiry, discussion or negotiation.
Section 10.7 Confidentiality. The parties agree that the
confidentiality provisions of the Confidentiality Agreement shall survive
the execution and delivery of this Agreement, any termination of this
Agreement and the consummation of the transactions contemplated by this
Agreement until the fifth anniversary of the date hereof (notwithstanding
any earlier termination date in respect of the confidentiality provisions
set forth in the Confidentiality Agreement). Without limiting the
foregoing, after the Closing, all of the nonpublic information relating
to the Purchased Corporate Trust Assets and the Assumed Corporate Trust
Liabilities shall be treated as confidential information of BNY for
purposes of JPM's obligations under the Confidentiality Agreement, and,
after the Closing, all of the nonpublic information relating to the
Purchased Banking Assets and the Assumed Banking Liabilities shall be
treated as confidential information of JPM for purposes of BNY's
obligations under the Confidentiality Agreement.
Section 10.8 Publicity; Notices. Until the Closing Date, the
parties hereto shall coordinate with each other in advance as to (i) the
form and content of any external communication, including any
communication intended for dissemination or to reach, or reasonably
expected to be disseminated or to reach, members of the public or
customers of the Corporate Trust Business or the Banking Business
regarding the transactions contemplated by this Agreement and (ii) the
form and content of any communication from JPM to the employees of BNY or
from BNY to the employees of JPM. 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 the parties hereto from
making any and all public disclosures legally required to comply with any
applicable securities laws or regulations or requests of governmental
agencies or authorities; provided that, to the extent possible under the
circumstances, the party making such disclosure consults with the other
party, and considers in good faith the views of the other party, before
doing so.
Section 10.9 Transfer of Economic Benefits. (a) The
transactions contemplated by this Agreement shall not constitute an
assignment, assumption or transfer of any Purchased Corporate Trust
Asset, Purchased Banking Asset, Assumed Corporate Trust Liability or
Assumed Banking Liability (any such asset or liability, a "Restricted
Item") if (i) such assignment, assumption or transfer, without a
necessary consent, waiver or approval of a third party (including any
Governmental Authority), would be ineffective or would constitute a
default under, or other contravention of, the provisions of any Contract
or Applicable Law or give rise to any right of acceleration of any
obligation thereunder or any right to termination thereof, and such
consent or approval shall not have been obtained prior to the Closing
Date or (ii) the parties shall have mutually agreed in writing to treat
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such asset or liability (or part of the Corporate Trust Business to which
such asset or liability belongs) as a Restricted Item, Delayed
Appointment (as defined in the Servicing Agreement) or a Run-Off
Appointment pursuant to this Section 10.9. In addition to being a
Restricted Item, any Appointment that fails to be transferred from JPM to
BNY at the Closing shall be subject to the terms and conditions set forth
in the Servicing Agreement, and, to the extent the terms of the Servicing
Agreement conflicts with the terms of this Section 10.9 with respect to
such Appointment, the terms of the Servicing Agreement shall govern. No
later than ten (10) Business Days prior to the Closing Date, each of JPM
and BNY shall prepare and deliver to the other a list of those Contracts
or other assets or liabilities, if any, determined to be Restricted Items
as of such date with respect to the Corporate Trust Sale or the Banking
Sale, respectively.
(b) With respect to any Restricted Item, on the Closing
Date, BNY and JPM shall, if and to the extent permitted by Applicable Law
or the applicable Contract, asset or liability, and subject to the
provisions of the Related Agreements, if applicable, assume the
responsibility, as agent of JPM or BNY, as applicable, to supervise,
manage, administer and otherwise discharge the duties of JPM or BNY, as
applicable, with respect to such Restricted Item until the requisite
consents and approvals are obtained (or any relevant Contract, asset or
liability is amended to provide) for BNY or JPM, as applicable, to assume
JPM or BNY's rights, privileges and powers thereunder. Upon the receipt
of such consent or approval (or the amendment of such Contracts, assets
or liabilities), BNY or JPM, as applicable, will assume JPM's or BNY's
rights, privileges and powers thereunder in accordance with the terms of
this Agreement, and such Restricted Item shall constitute a transferred
Purchased Corporate Trust Asset or Purchased Banking Asset, as
applicable, or a transferred Assumed Corporate Trust Liability or Assumed
Banking Liability, as the case may be, for all purposes of this
Agreement. In view of the provisions of Section 10.9(h), no additional
compensation shall be payable to BNY or JPM for acting as agent of JPM or
BNY, as the case may be, with respect to any Restricted Item pursuant to
this Section 10.9.
(c) The parties shall cooperate, and each party shall use
its respective reasonable best efforts, to maintain good relations with
any obligees or other counterparties in connection with any Restricted
Item with respect to which it or its Subsidiaries acts as the other
party's agent under this Section 10.9 and shall not (i) sell, sublease,
transfer, assign or otherwise dispose of any rights related to such
Restricted Item or (ii) solicit or encourage inquiries or proposals with
respect to any acquisition or purchase of any rights related to such
Restricted Item or authorize any of their officers, directors, agents or
affiliates to solicit or encourage, or fail to notify the other promptly
following its receipt of any such inquiry or proposal.
(d) Subject to the provisions of the Related Agreements,
after the Close of Business on the Closing Date, (i) a party acting as
agent for the other party hereto under Section 10.9(b) shall, promptly
upon obtaining knowledge thereof, give such other party notice of any
default or event of default under or with respect to any Restricted Item;
and (ii) in so acting, with respect to any Restricted Item as to which
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notice has been given in accordance with the preceding sentence, the
party acting as agent with respect to such Restricted Item pursuant to
Section 10.9(b), while any default is continuing, will continue to act
only pursuant to written instructions from the other party hereto;
provided that such party acting as agent shall not have any liability for
any act taken or omission made in accordance with such instructions or as
a result of the failure by the other party hereto to give such
instructions in a timely manner.
(e) Each party shall furnish to the other party and the
other party's authorized agents and representatives such financial and
operating data and other information with respect to the Restricted Items
with respect to which such first party then acts as agent for the other
party pursuant to this Section 10.9 as such other party shall reasonably
request.
(f) A party acting as agent for the other party hereto
under Section 10.9(b) shall take all actions reasonably requested by such
other party to enforce such other party's rights under any Restricted
Item, including, without limitation, the assertion of any claim against a
party to such Restricted Item or the assignment of any such claim to such
other party. The parties agree to cooperate with each other in
preserving, maintaining, asserting and enforcing rights, claims and liens
with respect to Restricted Items related to the Banking Sale, or any
Purchased Banking Asset or Assumed Banking Liability sharing the same
collateral, guaranties or other forms of credit support as any such
Restricted Item, and to execute and deliver such documents and do such
other acts and things (including without limitation joint assertion or
enforcement of such rights, claims and liens) as may reasonably be
required or appropriate in connection therewith.
(g) The parties shall cooperate and use reasonable best
efforts after the Closing Date to obtain any approvals or consent
required to transfer each Restricted Item.
(h) Without limitation on the foregoing, in the case of any
Restricted Item that is not transferred to BNY or JPM, as applicable, as
of the Closing Date, JPM and BNY shall use reasonable best efforts so
that BNY or JPM, as applicable, obtains the benefits and burdens of each
such Restricted Item that would have been obtained by it had such
Restricted Item been transferred to JPM or BNY, as the case may be, as of
the Closing Date, in accordance with the principles set forth in Schedule
10.9(h) or as otherwise agreed in writing by the parties.
Notwithstanding the foregoing, neither JPM nor BNY shall have any
obligation to insure the performance of any party to any Restricted Item
or the value thereof. In the event that Applicable Law in a jurisdiction
shall prohibit the parties from transferring the benefits and burdens of
any Restricted Item pursuant to the other provisions of this Section
10.9, the parties agree to cooperate with each other and to use
reasonable best efforts to promptly determine and effect a practicable
alternative means that would have substantially the same economic effect.
(i) The provisions of this Section 10.9 shall survive the
Closing and terminate on the second anniversary, or the fourth
anniversary with respect to the Corporate Trust Agreements, of the
Closing.
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Section 10.10 Execution and Delivery of Related Agreements. On
the Closing Date, BNY and JPM shall execute and deliver the Servicing
Agreement.
Section 10.11 Non-Competition and Non-Solicitation Agreements
Relating to Corporate Trust Business. (a) During the period beginning on
the Closing Date and ending on the fifth (5th) anniversary of the Closing
Date (the "Corporate Trust Non-Competition Period"), and except as
otherwise required for JPM to perform its obligations under any Related
Agreement, neither JPM nor any of its Affiliates (collectively, the "JPM
Entities") shall, directly or indirectly, engage in the Corporate Trust
Business, as conducted on the Closing Date, except for those businesses
of any of the JPM Entities as of the Closing Date that are not included
in the Purchased Corporate Trust Assets (the "Competing Corporate Trust
Business"); provided, however, that any JPM Entity may do each of the
following without JPM or any Affiliate of JPM being deemed to be in
violation of this Section 10.11(a):
(1) own or hold up to 10% of the outstanding securities of
any entity whose securities are listed and traded on a nationally
recognized securities exchange or market (provided that no JPM
Entity otherwise controls the business or affairs of such entity)
or hold or exercise rights of ownership with respect to any
security in a fiduciary capacity or otherwise for the benefit of a
third party not affiliated with JPM;
(2) make acquisitions or maintain ownership of any entity
in connection with the venture capital or merchant banking line of
business of JPM or any Affiliate thereof;
(3) merge, consolidate or otherwise engage in a business
combination with, or sell all or substantially all of its assets or
businesses to, any Person that is not an Affiliate of JPM with an
existing Competing Corporate Trust Business and continue to operate
such existing Competing Corporate Trust Business; provided that
members of the JPM board of directors do not constitute a majority
of the board of directors of the surviving corporation of such
transaction (or of the board of directors of its publicly traded
parent company) and that the JPM shareholders immediately prior to
consummation of such transaction do not immediately after
consummation of such transaction own 55% or more of the outstanding
capital stock or other equity interests of the surviving entity of
such transaction (or of its publicly traded parent company); and,
upon the consummation of such a permitted transaction, the
Corporate Trust Non-Competition Period and the Banking Non-
Competition Period and the prohibitions of Sections 10.11(a) and
10.12(a) shall immediately terminate and be of no further effect;
provided, further, that, after the consummation of such merger,
consolidation, acquisition or sale, no JPM Entity (including the
surviving corporation of such transaction) shall use the "JPM" name
or any derivation thereof with respect to the Competing Corporate
Trust Business until the fifth anniversary of the Closing Date; and
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(4) purchase or acquire (through merger, stock purchase or
purchase of all or substantially all of the assets or otherwise)
any entity with an existing Competing Corporate Trust Business and
continue to operate such existing Competing Corporate Trust
Business; provided that, after the consummation of such purchase or
acquisition, such Competing Corporate Trust Business shall not use
the "JPM" name or any derivation thereof until the expiration of
the Corporate Trust Non-Competition Period; provided, further, that
(i) if the consolidated revenue of such Competing Corporate
Trust Business for the twelve-(12)-month period ending
on the date of the consummation of such purchase or
acquisition is greater than the amount set forth on
Schedule 10.11(a)(4)(i) (using 2006 as the base year
and increasing this amount by 5% per calendar year
beginning in 2007) (such amount, the "Corporate Trust
Revenue Threshold"), then such JPM Entity shall
commence as promptly as practicable a process to sell
such Competing Corporate Trust Business to an
unaffiliated third party (which sale shall occur no
later than twenty-four (24) months after the
consummation of such purchase or acquisition); and
(ii) if the aggregate consolidated revenue of JPM's
Competing Corporate Trust Businesses (other than any
Competing Corporate Trust Business that JPM is required
to sell or has sold pursuant to clause (i) of this
Section 10.11(a)(4)) for the twelve-(12)-month period
(the "Corporate Trust Test Period") ending on the date
of the consummation of JPM's most recent acquisition of
a Competing Corporate Trust Business (other than an
acquisition of a Competing Corporate Trust Business
that JPM is required to sell or has sold pursuant to
clause (i) of this Section 10.11(a)(4)) is greater than
the amount set forth on Schedule 10.11(a)(4)(ii) (using
2006 as the base year and increasing this amount by 5%
per calendar year beginning in 2007), then such JPM
Entity shall commence as promptly as practicable a
process to sell all or a portion of such Competing
Corporate Trust Businesses to an unaffiliated third
party (which sale shall occur no later than twenty-four
(24) months after the consummation of such purchase or
acquisition) such that the aggregate consolidated
revenue of JPM's Competing Corporate Trust Businesses
not being sold pursuant to this clause (ii) for the
Corporate Trust Test Period is the Corporate Trust
Revenue Threshold or less;
and in each of cases (i) and (ii), JPM and BNY agree as to the
matters set forth on Schedule 10.11(a)(4)(iii).
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(b) Notwithstanding anything to the contrary in the
Confidentiality Agreement, during the period beginning on the Closing
Date and ending on the second anniversary of the Closing Date, no JPM
Entity shall directly or indirectly solicit for employment or hire any
Transferred Corporate Trust Employee; provided that this Section 10.11(b)
shall not prohibit any JPM Entity from (i) conducting a solicitation made
by means of a general purpose advertisement not specifically targeted at
BNY or the Transferred Corporate Trust Employees or hiring any
Transferred Corporate Trust Employee as a result of such general purpose
advertisement or (ii) rehiring any Transferred Corporate Trust Employee
who was terminated by BNY or its Affiliates after the Closing Date. JPM
and BNY agree to develop a communications channel to facilitate
resolution of any issues between the parties regarding the change of
employment of Transferred Corporate Trust Employees.
(c) JPM understands and acknowledges that (i) it would be
difficult to calculate damages to BNY from any breach of the obligations
of JPM under this Section 10.11, (ii) injury to BNY from any such breach
would be irreparable and impossible to measure and (iii) the remedy at
law for any breach or threatened breach of this Section 10.11 would
therefore be an inadequate remedy and, accordingly, BNY shall, in
addition to all other available remedies (including, without limitation,
seeking such damages as it can show it has sustained by reason of such
breach and/or the exercise of all other rights it has under this
Agreement), be entitled to seek injunctive relief, specific performance
and other equitable remedies without the necessity of showing actual
damages or posting bond.
(d) JPM understands and acknowledges that this Section
10.11 imposes an affirmative duty on it to ensure that its Affiliates
comply with its terms, and that JPM will be held accountable for any
noncompliance. The parties understand and acknowledge that occasional,
inadvertent de minimis violations of this Section 10.11 by their
Affiliates shall not be deemed a violation of this Section 10.11.
(e) JPM and BNY understand and acknowledge that that the
restrictive covenants and other agreements contained in this Section
10.11 are an essential part of this Agreement and the Corporate Trust
Related Agreements and the transactions contemplated hereby and thereby.
It is the intention of the parties that, if any of the restrictions or
covenants contained herein are held to cover a geographic area or to be
for a length of time that is not permitted by Applicable Law, or is in
way construed to be too broad or to any extent invalid, such provision
shall not be construed to be null, void and of no effect, but to the
extent that such provision would then be valid or enforceable under
Applicable Law, such provision shall be construed and interpreted or
reformed to provide for a restriction or covenant having the maximum
enforceable geographic area, time period and other provisions as shall be
valid and enforceable under Applicable Law.
Section 10.12 Non-Competition and Non-Solicitation Agreements
Relating to Banking and Other Businesses. (a) During the period
beginning on the Closing Date and ending on the fifth (5th) anniversary
of the Closing Date (the "Banking Non-Competition Period"), and except as
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otherwise required for BNY to perform its obligations under any Related
Agreement, neither BNY nor any of its Affiliates (collectively, the "BNY
Entities") shall, directly or indirectly, (i) engage in the business
described in clause (i) of the definition of "Banking Business" (provided
that this clause (i) shall not prohibit the BNY Entities from providing
Private Banking or Banking-Related Services to clients who each have
investible assets of at least $1,000,000 or an annual income of at least
$400,000, in the case of a client whose principal residence is in
Connecticut, New Jersey or New York, or $250,000 otherwise, and such
client's Related Interests), (ii) establish, reestablish or acquire
physical operations to conduct, or that conducts, Middle Market
Commercial Lending in New York, New Jersey or Connecticut, except, in the
case of clause (i), for those businesses of any of the BNY Entities as of
the Closing Date that are not included in the Purchased Banking Assets
(the activities described in clause (i) or (ii), the "Competing Banking
Business"), (iii) solicit or encourage any customer (other than a Middle
Market Commercial Lending customer, for which clause (iv) shall apply)
for which a relationship was transferred from BNY to JPM as a result of
the Banking Sale for any banking services or products (including services
or products within the scope of the Banking Business), other than (x) as
may occur incidentally as part of general advertising or general
solicitation to provide products or services that is not specifically
targeted to any such customer or (y) as part of the solicitation
activities conducted by BNY's clearing services business consistent with
current practices; (iv) solicit or encourage any Middle Market Commercial
Lending customer for which a relationship was transferred from BNY to JPM
as a result of the Banking Sale to lead arrange a financing transaction
or provide banking products or services ancillary to such financing or of
the type currently provided by any BNY Entity to such customer; or
(v) conduct the activities set forth in Schedule 10.12(a)(v); provided,
however, that any BNY Entity may do each of the following without BNY or
any Affiliate of BNY being deemed to be in violation of this Section
10.12(a):
(1) own or hold up to 10% of the outstanding securities of
any entity whose securities are listed and traded on a nationally
recognized securities exchange or market (provided that no BNY
Entity otherwise controls the business or affairs of such entity)
or hold or exercise rights of ownership with respect to any
security in a fiduciary capacity or otherwise for the benefit of a
third party not affiliated with BNY;
(2) make acquisitions or maintain ownership of any entity
in connection with the venture capital or merchant banking line of
business of BNY or any Affiliate thereof;
(3) continue to solicit, offer or provide any investment
management or trust or benefits administration and consulting
services; provided that the exception set forth in this clause (3)
shall not apply to clause (iii) of this Section 10.12(a);
(4) merge, consolidate or otherwise engage in a business
combination with, or sell all or substantially all of its assets or
businesses to, any Person that is not an Affiliate of BNY with an
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existing Competing Banking Business and continue to operate such
existing Competing Banking Business; provided that members of the
BNY board of directors do not constitute a majority of the board of
directors of the surviving corporation of such transaction (or of
the board of directors of its publicly traded parent company) and
that the BNY shareholders immediately prior to consummation of such
transaction do not immediately after consummation of such
transaction own 55% or more of the outstanding capital stock or
other equity interests of the surviving entity of such transaction
(or of its publicly traded parent company); and, upon the
consummation of such a permitted transaction, the Corporate Trust
Non-Competition Period and the Banking Non-Competition Period and
the prohibitions of Sections 10.11(a) and 10.12(a) shall
immediately terminate and be of no further effect; provided,
further, that, after the consummation of such merger,
consolidation, acquisition or sale, no BNY Entity (including the
surviving corporation of such transaction) shall use the "BNY" name
or any derivation thereof with respect to the Competing Banking
Business until the fifth anniversary of the Closing Date;
(5) purchase or acquire (through merger, stock purchase or
purchase of all or substantially all of the assets or otherwise)
any entity with an existing Competing Banking Business and continue
to operate such existing Competing Banking Business; provided that,
after the consummation of such purchase or acquisition, such
Competing Banking Business shall not use the "BNY" name or any
derivation thereof until the expiration of the Banking Non-
Competition Period; provided, further, that
(i) if the consolidated revenue of such Competing Banking
Business for the twelve-(12)-month period ending on the
date of the consummation of such purchase or
acquisition is greater than the amount set forth on
Schedule 10.12(a)(5)(i) (using 2006 as the base year
and increasing this amount by 5% per calendar year
beginning in 2007) (such amount, the "Banking Revenue
Threshold"), then such BNY Entity shall commence as
promptly as practicable a process to sell such
Competing Banking Business to an unaffiliated third
party (which sale shall occur no later than twenty-four
(24) months after the consummation of such purchase or
acquisition); and
(ii) if the aggregate consolidated revenue of BNY's
Competing Banking Businesses (other than any Competing
Banking Business that BNY is required to sell or has
sold pursuant to clause (i) of this Section
10.12(a)(5)) for the twelve-(12)-month period (the
"Banking Test Period") ending on the date of the
consummation of BNY's most recent acquisition of a
Competing Banking Business (other than an acquisition
of a Competing Banking Business that BNY is required to
sell or has sold pursuant to clause (i) of this Section
10.12(a)(5)) is greater than the amount set forth on
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Schedule 10.12(a)(5)(ii) (using 2006 as the base year
and increasing this amount by 5% per calendar year
beginning in 2007), then such BNY Entity shall commence
as promptly as practicable a process to sell all or a
portion of such Competing Banking Businesses to an
unaffiliated third party (which sale shall occur no
later than twenty-four (24) months after the
consummation of such purchase or acquisition), such
that the aggregate consolidated revenue of BNY's
Competing Banking Businesses not being sold pursuant to
this clause (ii) for the Banking Test Period is the
Banking Revenue Threshold or less;
and in each of cases (i) and (ii), BNY and JPM agree as to the
matters set forth on Schedule 10.12(a)(5)(iii); and
(6) complete its contractual obligations with ▇▇▇▇▇▇ ▇▇▇
with respect to the Student Loans.
(b) Notwithstanding anything to the contrary in the
Confidentiality Agreement, during the period beginning on the Closing
Date and ending on the second anniversary of the Closing Date, no BNY
Entity shall directly or indirectly solicit for employment or hire any
Transferred Banking Employee; provided that this Section 10.12(b) shall
not prohibit any BNY Entity from (i) conducting a solicitation made by
means of a general purpose advertisement not specifically targeted at JPM
or the Transferred Banking Employees or hiring any Transferred Banking
Employee as a result of such general purpose advertisement or
(ii) rehiring any Transferred Banking Employee who was terminated by JPM
or its Affiliates after the Closing Date. JPM and BNY agree to develop a
communications channel to facilitate resolution of any issues between the
parties regarding the change of employment of Transferred Banking
Employees.
(c) BNY understands and acknowledges that (i) it would be
difficult to calculate damages to JPM from any breach of the obligations
of BNY under this Section 10.12, (ii) injury to JPM from any such breach
would be irreparable and impossible to measure and (iii) the remedy at
law for any breach or threatened breach of this Section 10.12 would
therefore be an inadequate remedy and, accordingly, JPM shall, in
addition to all other available remedies (including, without limitation,
seeking such damages as it can show it has sustained by reason of such
breach and/or the exercise of all other rights it has under this
Agreement), be entitled to seek injunctive relief, specific performance
and other equitable remedies without the necessity of showing actual
damages or posting bond.
(d) BNY understands and acknowledges that that this Section
10.12 imposes an affirmative duty on it to ensure its Affiliates comply
with its terms, and that BNY will be held accountable for any
noncompliance. The parties understand and acknowledge that occasional,
inadvertent de minimis violations of this Section 10.12 by their
Affiliates shall not be deemed a violation of this Section 10.12.
(e) JPM and BNY understand and acknowledge that that the
restrictive covenants and other agreements contained in this Section
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10.12 are an essential part of this Agreement and the Banking Related
Agreement and the transactions contemplated hereby and thereby. It is
the intention of the parties that, if any of the restrictions or
covenants contained herein are held to cover a geographic area or to be
for a length of time that is not permitted by Applicable Law, or is in
way construed to be too broad or to any extent invalid, such provision
shall not be construed to be null, void and of no effect, but to the
extent that such provision would then be valid or enforceable under
Applicable Law, such provision shall be construed and interpreted or
reformed to provide for a restriction or covenant having the maximum
enforceable geographic area, time period and other provisions as shall be
valid and enforceable under Applicable Law.
Section 10.13 Updated Schedules. (a) Updated Corporate Trust
Schedules. On the fifth (5th) day prior to the Closing Date anticipated
by the parties, JPM shall deliver to BNY, for informational purposes
only, updated versions of Schedule 2.1(a)(1) (Corporate Trust Leases),
Schedule 2.1(a)(2) (Corporate Trust Personal Property), Schedule
2.1(a)(3) (Corporate Trust Agreements), Schedule 2.1(a)(4) (Other
Corporate Trust Contracts), Schedule 6.5 (Litigation and Related
Matters), Schedule 6.14(a) (Corporate Trust Agreements and Other
Corporate Trust Contracts), so that they are as of a date no earlier than
the fifteenth (15th) day prior to the Closing Date.
(b) Updated Banking Schedules. On the fifth (5th) day
prior to the Closing Date anticipated by the parties, BNY shall deliver
to JPM, for informational purposes only, updated versions of Schedule
3.1(a)(1) (Owned Banking Premises), Schedule 3.1(a)(2) (Banking Leases),
Schedule 3.1(a)(3) (Banking Personal Property), Schedule 3.1(a)(4)
(ATMs), Schedule 3.1(a)(5)(i) (Assigned Banking Loans), Schedule
3.1(a)(6) (Assumed Letters of Credit), Schedule 3.1(a)(7) (Assumed
Banking Agreements), Schedule 3.1(a)(15) (Purchased Banking IP), Schedule
8.5 (Litigation and Related Matters), Schedule 8.10 (Assumed Banking
Deposits), Schedule 8.11(a) (Loans), Schedule 8.12(a) (Letters of
Credit), Schedule 8.12(b) (Derivative Products), Schedule 8.13 (Banking
Contracts), Schedules 8.14(a) and (b) (Other Purchased Banking Assets),
so that they are as of a date no earlier than the fifteenth (15th) day
prior to the Closing Date.
Section 10.14 Transition Coordinators; Cooperation with
Transition. (a) From the date hereof until the earlier of the Closing
Date and the termination of this Agreement, JPM and BNY will cooperate
with each other to provide each other with current information regarding
material activities of the Corporate Trust Business and the Banking
Business, respectively, and cooperate with and assist each other in
planning and implementing necessary and appropriate policies and
procedures in connection with the transition of the ownership of the
Corporate Trust Business from JPM to BNY, and the transition of the
ownership of the Banking Business from BNY to JPM, including the computer
systems conversion including data processing and transfer services
capabilities. In connection therewith, BNY and JPM shall each as
promptly as practicable after the execution of this Agreement designate
certain of their respective employees as "Transition Coordinators." With
the prior consent of the Transition Coordinators, which consent may not
be unreasonably withheld, JPM may meet with Banking Business Employees,
in accordance with the terms of the Banking Transition Services
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Agreement, and BNY may meet with Corporate Trust Business Employees, for
training and planning purposes and may communicate with the customers of
the Banking Business or Corporate Trust Business, as applicable, in order
to facilitate such transition, in each case subject to any restrictions
imposed by Applicable Laws.
(b) In furtherance of the foregoing and subject to
Applicable Law, JPM and BNY shall use reasonable commercial efforts to
cause the Corporate Trust Business Employees and the Banking Business
Employees, as applicable, (i) to meet and confer with representatives of
BNY and JPM, as applicable, to report on the general status of the
ongoing operations of the Corporate Trust Business or the Banking
Business, as applicable, and (ii) to cooperate and communicate with
respect to the manner in which the Corporate Trust Business or the
Banking Business, as applicable, is conducted.
(c) JPM and BNY shall use commercially reasonable best
efforts to transfer as soon as practicable following the identification
of the Transferred Corporate Employees or Transferred Banking Employees,
as applicable (and in no event later than thirty (30) days before the
Closing Date) payroll data relating to all such Transferred Corporate
Trust Employees or all such Transferred Banking Employees, as applicable,
from the payroll system of JPM or BNY, as applicable, to the payroll
system of BNY or JPM, as applicable.
ARTICLE XI
FURTHER AGREEMENTS RELATING TO CORPORATE TRUST
Section 11.1 Conduct of the Corporate Trust Business Prior to
the Closing. (a) From the date hereof until the earlier of the Closing
Date and the termination of this Agreement, JPM shall use its reasonable
best efforts to, and shall cause its applicable Subsidiaries to use their
respective reasonable best efforts to, consistent with the other
provisions of this Agreement, (i) conduct the Corporate Trust Business
only in the ordinary course of business consistent with past practices
(including maintaining its Custodial Assets practices as it relates to
the Corporate Trust Business or other practices specific to the Corproate
Trust Business); (ii) preserve the Corporate Trust Business as currently
conducted, (iii) preserve in all material respects the mix, type and
aggregate amounts of the Custodial Assets held in connection with the
Corporate Trust Business, (iv) continue to advertise and market the
products and services of the Corporate Trust Business substantially as
JPM is doing so today; (v) maintain its existing relations and goodwill
with the customers of the Corporate Trust Business, (vi) keep available
the services of its officers and employees involved with the Corporate
Trust Business, (vii) comply in all material respects with all Applicable
Laws, ordinances, rules and regulations relating to the Corporate Trust
Business and (viii) maintain the books of account and records of the
Corporate Trust Business as currently maintained and in the usual,
regular and ordinary course and in accordance with past practices.
(b) From the date hereof until the earlier of the Closing
Date and the termination of this Agreement, except as (i) set forth in
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Schedule 11.1(b), (ii) otherwise expressly contemplated by this
Agreement, (iii) consented to in writing in advance by BNY (which consent
shall not be unreasonably withheld or delayed), or (iv) required by
Applicable Law, JPM shall not, and shall cause its Subsidiaries not to:
(1) (i) materially increase the number of persons employed
in the Corporate Trust Business, (ii) increase the compensation or
benefits payable to the Corporate Trust Business Employees, other
than immaterial increases in the ordinary course of business
consistent with past practice, or (iii) enter into any agreement or
arrangement that would be a Corporate Trust Employment Agreement if
it were in effect as of the date hereof, or any collective
bargaining agreement with respect to the Corporate Trust Business
Employees; provided, however, that nothing in this Section
11.1(b)(1) shall limit the ability of JPM or any of its
Subsidiaries to adopt, modify, amend or terminate any employee
benefit plan, program, policy, arrangement or practice that is or
may become applicable to the employees of JPM or any of its
Subsidiaries generally;
(2) promote, transfer, reassign or otherwise change the job
description or title of any Corporate Trust Business Employee,
except for promotions of non-officer level employees in the
ordinary course consistent with past practice in connection with an
annual review;
(3) place, or knowingly permit to be placed, any Lien
(other than Permitted Liens) upon any of the Purchased Corporate
Trust Assets;
(4) with respect to any existing Corporate Trust Agreement,
(i) resign or terminate, or consent to the termination of, any such
Corporate Trust Agreement (other than any expiration or prepayment
in accordance with the terms of such Corporate Trust Agreement, or
as may be required by Applicable Law, or as may be advised by
counsel, or as may be demanded in writing by a customer, or as
permitted by the policies or procedures of JPM or any of its
Subsidiaries, as applicable) or (ii) amend or modify any such
Corporate Trust Agreement in a manner that would materially reduce
the fees thereunder or otherwise materially alter the rights,
obligations, liabilities or protections of JPM or any of its
Subsidiaries under such Corporate Trust Agreement; provided that no
consent of BNY or any of its Subsidiaries shall be required if
neither JPM nor any of its Subsidiaries has discretion as to
whether any such termination, amendment or modification shall be
effected;
(5) terminate or materially modify any Corporate Trust
Agreement or Other Corporate Trust Contract, except as required or
permitted by its existing terms or as a result of action by the
other party to such Corporate Trust Agreement or Other Corporate
Trust Contract, respectively;
(6) sell, transfer or convey any material property that is
part of the Purchased Corporate Trust Assets;
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(7) release, compromise or waive any material claim or
right that is part of the Purchased Corporate Trust Assets;
(8) change the treatment for U.S. federal income tax
purposes of any entity included in the Purchased Corporate Trust
Assets other than ▇.▇. ▇▇▇▇▇▇ Corporate Trustee Services Limited
and ▇.▇. ▇▇▇▇▇▇ Trust Australia Limited and any of their
Subsidiaries (whether from corporation to partnership or
disregarded entity or vice versa);
(9) with respect to the Transferred Entities or any of
their respective Subsidiaries, (i) make or rescind any material
election relating to Taxes (other than pursuant to Section
11.1(b)(8)), (ii) file any material amended income Tax Return or
claim for refund, or (iii) settle or compromise any Tax audit or
processing;
(10) settle or compromise any litigation or investigation if
such settlement or litigation would reasonably be expected to
impose any obligation or liability on the Purchased Corporate Trust
Assets, the Assumed Corporate Trust Liabilities or BNY or any of
its Subsidiaries (other than any settlement or compromise providing
solely for the payment of money damages that is included as a
liability on the Final Corporate Trust Closing Statement);
(11) other than in the ordinary course of business
consistent with past practice or as determined to be necessary or
advisable by JPM in the reasonable bona fide exercise of its
discretion based on changes in market conditions applicable to the
Corporate Trust Business, materially alter its interest rate or fee
pricing policies with respect to the Custodial Assets and Corporate
Trust Agreements or waive any material fees;
(12) materially alter any of its Custodial Assets practices
or other practices specific to the Corporate Trust Business;
(13) introduce any new corporate trust products or services;
or
(14) agree or commit to do any of the foregoing.
Section 11.2 Conduct of Corporate Trust Business After the
Closing. From and after the Closing Date, BNY and each of its Affiliates
to which any Purchased Corporate Trust Asset or Assumed Corporate Trust
Liability is transferred shall treat such Purchased Corporate Trust
Assets and Assumed Corporate Trust Liabilities in a manner consistent
with the manner in which (and in accordance with the same fiduciary
practices) BNY and its Subsidiaries treat the assets and liabilities of
their corporate trust business on the date hereof (including retaining
records consistent with requirements of Applicable Law and the Corporate
Trust Agreements).
Section 11.3 Corporate Trust Landlord Consents. (a) JPM shall
use reasonable best efforts (but shall not be obligated to expend any
111
money or initiate litigation) to cause every landlord under a Corporate
Trust Lease, the consent of which is required pursuant to the terms of
such Corporate Trust Lease to the assignment of such Corporate Trust
Lease to BNY, to execute in favor of BNY a Corporate Trust Landlord
Consent.
(b) If, despite JPM's reasonable best efforts, a Corporate
Trust Landlord Consent to assignment of a Corporate Trust Lease cannot be
obtained prior to the Closing, JPM shall, if permitted under the
Corporate Trust Leases or the landlord agrees, sublease the Leased
Corporate Trust Premises to BNY or permit BNY to otherwise occupy the
Leased Corporate Trust Premises as of the Closing Date (the "Corporate
Trust Sublease Agreement"). To the extent permitted by the applicable
Corporate Trust Lease, such Corporate Trust Sublease Agreement shall be
for the remainder of the existing term of the Corporate Trust Lease and
shall have extension options to the same extent that the Corporate Trust
Lease does and shall be on the same terms as the Corporate Trust Lease,
and shall contain a customary subtenant indemnity from BNY in favor of
JPM. In such event, at BNY's request, JPM shall request from any
applicable landlord a subordination and non-disturbance agreement with
respect to such Corporate Trust Sublease Agreement in reasonable and
customary form; provided that obtaining any such executed subordination
and non-disturbance agreement from a landlord shall in no event be a
condition to BNY's obligation to complete the Banking Sale or the
Corporate Trust Sale.
(c) BNY shall use reasonable best efforts to cooperate with
JPM's attempts to obtain each Corporate Trust Landlord Consent or its
approval of a Corporate Trust Sublease Agreement, but shall not be
obligated to pay any consideration or grant any concession in connection
therewith.
(d) The Parties agree that Section 10.9 shall not apply to
any Corporate Trust Lease for which a Corporate Trust Landlord Consent is
not obtained and a Corporate Trust Sublease is not approved.
(e) JPM shall reasonably cooperate with BNY in its efforts
to obtain title insurance insuring its interest in the Leased Corporate
Trust Premises, including, without limitation, by executing and
delivering such authority documents and customary seller's title
affidavits, which shall include a so-called "gap indemnity", as are
reasonably required by BNY's title company.
(f) At BNY's request, JPM shall request and in good faith
seek to obtain a landlord's estoppel certificate in reasonable and
customary form from any landlord under a Corporate Trust Lease; provided
that obtaining any such executed landlord's estoppel certificate shall in
no event be a condition to BNY's obligation to complete the Corporate
Trust Sale or the Banking Sale.
Section 11.4 Cooperation Regarding Transition of Products and
Services. (a) From and after the date hereof until the Closing and
subject to Applicable Law, JPM shall use commercially reasonable efforts
to (i) deliver to BNY a bi-weekly report of any new Corporate Trust
Agreements; and (ii) provide BNY with any other information that BNY
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reasonably requests on a bi-weekly basis. BNY and JPM shall meet at
least twice a month to review the performance of the Corporate Trust
Business during the prior two-week period, including reviewing the mix
and volumes of business.
(b) From and after the date hereof until the Closing and
subject to Applicable Law, BNY and JPM shall consult with each other on
products and services not currently offered by JPM that BNY would expect
to make available to corporate trust customers of BNY after the Closing,
as well as on procedures and practices not currently undertaken by JPM
that BNY would expect to use after the Closing.
(c) Nothing herein shall require JPM to assist BNY in
marketing to or soliciting any business from any customer of the
Corporate Trust Business if JPM determines that to do so would violate
any Contract which is an Excluded Corporate Trust Asset.
Section 11.5 UCC-1 Assignment and Other Documents. (a) JPM
shall use commercially reasonable efforts to deliver to BNY all signed
UCC-1 financing statements and UCC-3 assignments of financing statements,
endorsed notes, participations and all other documentation necessary to
effect the assignment of the Corporate Trust Agreements to BNY. The out-
of-pocket costs and expenses of preparing and filing any such
documentation shall be paid by BNY.
(b) JPM shall make, by no later than June 30, 2006, all
filings of continuation statements in the applicable offices necessary as
a result of Revised Article 9 of the Uniform Commercial Code to maintain
perfection of security interests related to the Corporate Trust
Agreements proposed to be transferred to BNY. The out-of-pocket costs and
expenses of preparing and filing any such documentation shall be paid by
JPM.
Section 11.6 Use of JPM's Names and Forms. (a) Except for the
Intellectual Property set forth on Schedule 11.6 and as otherwise
provided in Section 11.6(b), (i) following the Closing, BNY shall not use
JPM's names, forms, marketing materials and similar items included in the
Purchased Corporate Trust Assets, for any purpose whatsoever; and
(ii) BNY expressly agrees that it is not purchasing or acquiring any
right, title or interest in the name of JPM or its Affiliates or any
tradenames, trademarks or service marks of JPM or its Affiliates as JPM
or such Affiliates have used prior to the date of this Agreement, or will
use or own thereafter, in connection with the Purchased Corporate Trust
Assets (collectively, the "JPM's Marks"). BNY acknowledges that JPM and
its respective Affiliates exclusively own the JPM's Marks and all
goodwill related thereto and symbolized thereby. BNY will not make use
of the JPM's Marks in any manner that will disparage or damage such marks
or the reputation of JPM or its Affiliates, or diminish the goodwill of
JPM or their Affiliates.
(b) On the Closing Date, JPM shall grant BNY a non-
exclusive, non-transferable, non-sublicensable, royalty-free license to
use, in connection with the purchase, operation and conduct of the
Corporate Trust Business, the "JPMorgan" name in the forms that currently
appear on the systems and applications used in connection with the
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operation of the Corporate Trust Business and trade names associated
therewith in substantially the same manner as used by JPM in connection
with the purchase, operation and conduct of the Corporate Trust Business
immediately prior to the Closing solely (i) in connection with systems
and applications controlled and operated by JPM or any of its
Subsidiaries on behalf of BNY and its Subsidiaries pursuant to the
Corporate Trust Transition Services Agreement, (ii) in connection with
the use of such name on the website of the Corporate Trust Business prior
to such Corporate Trust Conversion and (iii) to the extent necessary for
BNY and its Subsidiaries to perform their obligations under the Servicing
Agreement (collectively, the "JPM Name License"). The term of the JPM
Name License shall commence on the Closing Date and expire upon (x) in
the case of clauses (i) and (ii) of the prior sentence, the completion of
the Corporate Trust Conversion and (y) in the case of clause (iii) of the
prior sentence, the expiration or termination of the Servicing Agreement.
(c) On the Closing Date, JPM shall grant BNY a non-
exclusive, non-transferable, non-sublicensable, royalty-free license (the
"Australia License") to use, in connection with the operation of the
Corporate Trust Business operated by BNY Trust (Australia) Pty Limited,
the "▇.▇. ▇▇▇▇▇▇ Trust Australia Limited" name, in the forms that it
currently appears and is used in connection with the operation of the
Corporate Trust Business in Australia and trade names associated
therewith in substantially the same manner as used by JPM in connection
with the Purchased Corporate Trust Assets and the operation of the
Corporate Trust Business in Australia immediately prior to the Closing.
The Australia License shall terminate on the earlier of: (i) 18 months
after the Closing Date and (ii) the date on which the name of BNY Trust
(Australia) Pty Limited shall have changed its name. BNY shall use its
reasonable best efforts to cause the change of the name of BNY Trust
(Australia) Pty Limited as promptly as practicable after the Closing
Date.
Section 11.7 Transfer of Paying and Authenticating Agencies.
(a) At the Closing, BNY, or its qualified nominees, shall become the
paying agent and/or authenticating agent under any Corporate Trust
Agreement pursuant to which JPM or any of its Subsidiaries is acting as
such and shall assume all responsibility of JPM or its Subsidiary, as
applicable, in connection therewith. BNY and its Subsidiaries shall
faithfully perform all of the obligations and duties of the paying agent
and/or authenticating agent as required under such Corporate Trust
Agreements and shall comply with any Applicable Laws and regulations in
connection therewith.
(b) BNY agrees to maintain any deposit accounts for
Custodial Assets at any branch office of JPM or any of its Subsidiaries
which are required to be maintained with JPM or any of its Subsidiaries
by the terms of the Corporate Trust Agreements; provided, however, that,
after the Closing, subject to Sections 5.4 and 11.8, BNY may seek the
consent of any party to a Corporate Trust Agreement in order to open new
accounts for such purposes at any other depository institution.
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Section 11.8 Transfer of Nominee Name. If, in order to
effectively transfer any of the Corporate Trust Agreements to BNY
hereunder, and subject to Section 11.3(b), it is mutually determined by
the parties hereto to be necessary or convenient for JPM or any of its
Subsidiaries to transfer to BNY the rights to a nominee name or other
designation held by a legal entity with no assets other than such name or
designation and no duties or purposes other than duties and purposes
ancillary to the Corporate Trust Business, then, without further
consideration, upon request of BNY, JPM or its applicable Subsidiary
controlling the same shall transfer all of the rights in any such entity
to BNY; provided, however, that BNY shall bear any costs, including legal
fees and expenses, in connection with the transfer.
Section 11.9 Conversion and Conversion Plan. (a) The parties
hereto agree to cooperate to employ their commercially reasonable efforts
to plan, execute and complete the Corporate Trust Conversion in an
orderly and efficient manner pursuant to the Corporate Trust Conversion
Plan. As promptly as practicable after the date hereof, JPM and BNY
shall each appoint qualified staff members to act as project managers for
the Corporate Trust Conversion (each, a "Corporate Trust Conversion
Project Manager"). Such Corporate Trust Conversion Project Managers
shall act as the principal contacts between the parties on matters
relating to the Corporate Trust Conversion, and shall coordinate the
assignment of personnel as required and generally facilitate the
planning, execution and completion of the Corporate Trust Conversion
pursuant to the Corporate Trust Conversion Plan. In addition to any
conversion of the data and systems files as part of the Corporate Trust
Conversion pursuant to the Corporate Trust Conversion Plan and subject to
the Corporate Trust Transition Services Agreement, the parties shall
reasonably cooperate in performing such tasks as may be outlined in the
Corporate Trust Conversion Plan, including the collection and input of
relevant data, development of new operating procedures and design of
forms, in each case, as mutually agreed by the parties.
(b) Except as otherwise set forth in the Corporate Trust
Transition Services Agreement, each party shall bear its own out-of-
pocket costs and expenses associated with the Corporate Trust Conversion,
including costs and expenses (including the costs and expenses of such
party's employees) incurred in converting, moving, storing, archiving,
adapting or otherwise transferring or facilitating the transfer of any
data, information, Securities, records, files and systems from the
systems and facilities of JPM and its Affiliates to the systems and
facilities of BNY and its Affiliates (including costs with respect to
computer programs, data processing, deconversion, data extraction, third-
party charges and filing fees); provided, however, that, notwithstanding
anything to the contrary in this Section 11.9 or otherwise in this
Agreement, BNY shall not be liable hereunder for any termination fees,
penalties or other break costs incurred by JPM or any of its Subsidiaries
as a result of the Corporate Trust Conversion.
(c) In connection with the conversion activities described
in subsections (a) and (b) immediately above, it is further agreed that:
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(1) BNY will review, subject to Section 10.1, current
operations of JPM, and BNY and JPM shall cooperate and use
reasonable best efforts to develop a mutually agreeable written
plan within 60 days of the date hereof, subject to such
modification in the schedule for development thereof as the parties
may mutually agree (as it may be amended from time to time, the
"Corporate Trust Conversion Plan"), which Corporate Trust
Conversion Plan shall (i) set forth the plan, procedures and
schedule required to fully effect the Corporate Trust Conversion as
promptly as practicable after the Closing with a target completion
date of no later than one year after the Closing Date (provided
that the target conversion date for all U.S. applications shall be
no later than June 1, 2007), and (ii) shall include interim target
dates for the completion of integral items to the Corporate Trust
Conversion; and
(2) prior to the Closing, JPM shall have completed in all
material respects (including time of delivery and service level
requirements) the data conversion, mapping and other systems
functionality projects to be specified in the Corporate Trust
Conversion Plan.
Section 11.10 Grant of FCS Sublicense. At the time of the
Closing, JPM and BNY shall enter into a mutually acceptable sublicensing
agreement, pursuant to which JPM or a Subsidiary of JPM shall sub-license
to BNY or a Subsidiary of BNY, on the terms set forth on Schedule 11.10,
certain of JPM's or its Subsidiary's rights pursuant to its computer
software licensing arrangement with FCS. Such sublicensing agreement
shall contain such other terms and conditions that are customarily
entered into between JPM and third-party sublicensees for similar
products.
Section 11.11 Information Reporting. Subject to the provisions
of the Corporate Trust Transition Services Agreement, all interest
credited to, interest premiums paid on, interest withheld from, early
withdrawal penalties charged to, and other reportable amounts with
respect to, accounts included within the Corporate Trust Business shall
be reported by JPM to the extent related to the period beginning on
January 1, 2006 and ending on December 31, 2006, and by BNY to the extent
related to any period beginning after December 31, 2006. Such reports
shall be made to the holders of such accounts and to the applicable
federal and state regulatory agencies. Notwithstanding the two
immediately preceding sentences, JPM will report all interest credited
to, interest premiums paid on, interest withheld from, early withdrawal
penalties charged with respect to, and other reportable amounts with
respect to, any JPM Money Market Funds, Corporate Trust Money Fund
Balances or any Index Rate Deposit Accounts.
Section 11.12 Withholding. (a) Subject to the provisions of the
Corporate Trust Transition Services Agreement, any amounts required by
any Governmental Authority to be withheld with respect to the Corporate
Trust Business (the "Corporate Trust Withholding Obligations") or any
penalties imposed by any Governmental Authority will be handled as
follows:
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(1) any Corporate Trust Withholding Obligations required to
be withheld on or prior to December 31, 2006 will be withheld and
remitted by JPM to the appropriate Governmental Authority on or
prior to the time they are due; and
(2) any Corporate Trust Withholding Obligations required to
be remitted to the appropriate governmental agency after December
31, 2006 with respect to Corporate Trust Withholding Obligations
after December 31, 2006 and not withheld by JPM shall be withheld
and remitted by BNY.
(b) Notwithstanding Section 11.12(a), JPM will withhold and
remit to the appropriate Governmental Authority, on or prior to the time
they are due, any amounts required by any Governmental Authority to be
withheld, or any penalties imposed by any Governmental Authority with
respect to, any JPM Money Market Funds, Corporate Trust Money Fund
Balances or any Index Rate Deposit Accounts.
(c) Any penalties that relate to information returns filed
by JPM on or prior to December 31, 2006 in connection with transactions
that occurred on or prior to December 31, 2006 will be JPM's
responsibility. BNY shall cooperate with JPM in providing copies of
penalty notices on a timely basis and other information which JPM may
reasonably request in order to verify or challenge such penalties. To
the extent that any penalty imposed by the IRS relates to information
returns filed by BNY (or filed by JPM on behalf of BNY) after December
31, 2006 in connection with transactions that occurred prior to December
31, 2006, BNY shall be responsible for such penalty; provided that JPM
has satisfied its obligation to provide all material information to BNY
which is necessary to complete such information returns (including any
such obligation set forth in the Corporate Trust Transition Services
Agreement).
Section 11.13 Intercompany Obligations. Effective as of the
Closing Date, except as otherwise contemplated by this Agreement or any
Related Agreement or as contemplated by Schedule 11.13, all intercompany
receivables, payables, loans and guarantees then existing between JPM or
any of its Subsidiaries (other than any Transferred Entity or any of its
Subsidiaries), on the one hand, and any Transferred Entity or any of its
Subsidiaries, on the other hand, shall be settled, including by way of
capital contribution (with respect to intercompany payables or loans due
to JPM or any of its Subsidiaries that is not a Transferred Entity) or by
way of dividend in kind (with respect to intercompany payables or loans
owed by JPM or any of its Subsidiaries that is not a Transferred Entity
or investments by the Transferred Entities).
ARTICLE XII
FURTHER AGREEMENTS RELATING TO BANKING
Section 12.1 Conduct of the Banking Business Prior to the
Closing. (a) From the date hereof until the earlier of the Closing Date
and the termination of this Agreement, BNY shall use its reasonable best
efforts to, and shall cause its applicable Subsidiaries to use their
respective reasonable best efforts to, consistent with the other
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provisions of this Agreement, (i) conduct the Banking Business only in
the ordinary course consistent with past practices and in accordance with
the Banking Business' existing standards, (ii) preserve the Banking
Business as currently conducted, (iii) preserve in all material respects
the mix, type and aggregate amount of the Assumed Banking Deposits held
in connection with the Banking Business, (iv) continue to advertise and
market the products and services of the Banking Business substantially as
BNY is doing so today and spend an amount on marketing and promotions in
accordance with budgeted levels as of the date hereof; (v) maintain its
existing relations and goodwill with the customers of, and vendors and
suppliers to, the Banking Business, (vi) keep available the services of
its officers and employees involved with the Banking Business,
(vii) comply in all material respects with all Applicable Laws,
ordinances, rules and regulations relating to the Banking Business,
(viii) maintain the books of account and records of the Banking Business
as currently maintained and in the usual, regular and ordinary course and
in accordance with past practices, and (ix) give JPM reasonable prior
notice of, and consult with JPM with respect to, the exercise by BNY of
any renewal or extension options under any Banking Lease. In
furtherance, and not in limitation of the foregoing, from the date hereof
until the earlier of the Closing Date and the termination of this
Agreement, BNY Mortgage Company LLC shall originate and purchase Loans
only in the ordinary course of business consistent with past practices,
and BNY and its other Subsidiaries shall not transfer or sell any Loans
to BNY Mortgage Company LLC other than in the ordinary course of business
consistent with past practices.
(b) From the date hereof until the earlier of the Closing
Date and the termination of this Agreement, except as (i) set forth in
Schedule 12.1(b), (ii) otherwise expressly contemplated by this
Agreement, (iii) consented to in writing in advance by JPM (which consent
shall not be unreasonably withheld or delayed), or (iv) required by
Applicable Law, BNY shall not, and shall cause its applicable
Subsidiaries not to:
(1) (i) materially increase the number of persons employed
in the Banking Business, (ii) increase the compensation or benefits
payable to the Banking Business Employees, other than immaterial
increases in the ordinary course of business consistent with past
practice, or (iii) enter into any agreement or arrangement that
would be a Banking Employment Agreement if it were in effect as of
the date hereof, or any collective bargaining agreement with
respect to the Banking Business Employees; provided, however, that
nothing in this Section 12.1(b)(1) shall limit the ability of BNY
or any of its Subsidiaries to adopt, modify, amend or terminate any
employee benefit plan, program, policy, arrangement or practice
that is or may become applicable to the employees of BNY or any of
its Subsidiaries generally;
(2) promote, transfer, reassign or otherwise change the job
description or title of any Banking Business Employee, except for
(i) promotions and changes in job description or title within non-
official positions and to positions that are in the Banking
Branches, in each case in the ordinary course consistent with past
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practice, and (ii) transfers and assignments within the Banking
Branches in the ordinary course consistent with past practice;
(3) place, or knowingly permit to be placed, any Lien
(other than Permitted Liens) upon any of the Purchased Banking
Assets;
(4) with respect to any Assumed Banking Agreement,
(i) terminate such Assumed Banking Agreement (other than any
expiration or prepayment in accordance with the terms or such
Assumed Banking Agreement, or as may be required by Applicable Law,
or as may be advised by counsel, or as may be demanded in writing
by a customer, or as permitted by the policies or procedures of BNY
or any of its Subsidiaries) or (ii) amend or modify any such
Assumed Banking Agreement in a manner that would materially alter
the rights, obligations, liabilities or protections of BNY or any
of its Subsidiaries under such Banking Agreement; provided that no
consent of JPM shall be required if BNY or any of its Subsidiaries
has no discretion as to whether any such termination, amendment or
modification shall be effected;
(5) terminate or materially modify any Assumed Banking
Agreement, except as required or permitted by its existing terms or
as a result of action by the other party to such Assumed Banking
Agreement;
(6) terminate, materially modify or allow to lapse or fail
to renew any Banking Lease;
(7) close, sell, consolidate or relocate or materially
alter any of the Banking Branches or the Other Banking Facilities
or open any branches for the purpose of soliciting retail deposits;
(8) amend or modify, including by entering into any
forbearance agreement, any Assigned Banking Loan in any manner
materially adverse to BNY or any of its Subsidiaries or in any
manner other than the ordinary course of business and consistent
with the loan policies of BNY and its Subsidiaries as of the date
hereof;
(9) originate any Loan for the Banking Business, or
increase any line with respect thereto, in an amount in excess of
BNY's credit policy and/or lending guidelines in effect on the date
hereof;
(10) materially alter any of its credit policies or pricing
practices applicable to the Assumed banking Deposits or the
Acquired Banking Loans;
(11) sell, transfer or convey any material property that is
part of the Purchased Banking Assets;
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(12) release, compromise, or waive any material claim or
right that is part of the Purchased Banking Assets;
(13) fail to maintain the Owned Banking Premises, the Leased
Banking Premises, the Other Banking Facilities or the Banking
Personal Property in a condition substantially the same as on the
date of this Agreement, ordinary wear and use excepted;
(14) settle or compromise any litigation or investigation if
such settlement or litigation would reasonably be expected to
impose any obligation or liability on the Purchased Banking Assets,
the Assumed Banking Liabilities or JPM or any of its Subsidiaries
(other than any settlement or compromise providing solely for the
payment of money damages that is included as a liability on the
Final Banking Closing Statement);
(15) other than in the ordinary course of business
consistent with past practice or as determined to be necessary or
advisable by BNY in the reasonable bona fide exercise of its
discretion based on changes in market conditions applicable to the
Banking Business, materially alter its interest rate or fee pricing
policies with respect to the Assumed Banking Deposits and the
Assigned Banking Loans or waive any material fees;
(16) materially alter any of its Assumed Banking Deposit or
Assigned Banking Loan practices or other practices specific to the
Banking Business;
(17) introduce any new banking products or services;
(18) increase the outstanding balance, as of the date
hereof, of the CRA Loan Portfolio;
(19) except for relationships heretofore disclosed to JPM,
reclassify any BNY customer or relationship as a Private Banking
customer or relationship; or
(20) agree or commit to do any of the foregoing.
Section 12.2 Conduct of Banking Business After the Closing.
From and after the Closing Date, JPM and each of its Affiliates to which
any Purchased Banking Asset or Assumed Banking Liability is transferred
shall treat such Purchased Banking Assets and Assumed Banking Liabilities
in a manner consistent with the manner in which (and in accordance with
the same fiduciary practices) JPM and its Subsidiaries treat the assets
and liabilities of their banking business on the date hereof (including
retaining records consistent with requirements of Applicable Law and the
Assumed Banking Agreements). Without limiting the generality of the
foregoing sentence, JPM agrees to provide the Transferred Banking
Employees with the same banking privileges, if any, that JPM generally
provides to similarly situated employees of JPM.
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Section 12.3. Banking Landlord Consents. (a) BNY shall use
reasonable best efforts (but shall not be obligated to expend any money
or initiate litigation) to cause every landlord under a Banking Lease,
the consent of which is required pursuant to the terms of such Banking
Lease to the assignment of such Banking Lease to JPM, to execute in favor
of JPM a Banking Landlord Consent.
(b) If, despite BNY's reasonable best efforts, a Banking
Landlord Consent to assignment of a Banking Lease cannot be obtained
prior to the Closing, BNY shall, if permitted under the Banking Leases or
the landlord agrees, sublease the Leased Banking Premises to JPM or
permit JPM to otherwise occupy the Leased Banking Premises as of the
Closing Date (the "Banking Sublease Agreement"). To the extent permitted
by the applicable Banking Lease, such Banking Sublease Agreement shall be
for the remainder of the existing term of the Banking Lease and shall
have extension options to the same extent that the Banking Lease does and
shall be on the same terms as the Banking Lease, and shall contain a
customary subtenant indemnity from JPM in favor of BNY. In such event,
at JPM's request, BNY shall request from any applicable landlord a
subordination and non-disturbance agreement with respect to such Banking
Sublease Agreement in reasonable and customary form; provided that
obtaining any such executed subordination and non-disturbance agreement
from a landlord shall in no event be a condition to JPM's obligation to
complete the Banking Sale or the Corporate Trust Sale.
(c) JPM shall use reasonable best efforts to cooperate with
BNY's attempts to obtain each Banking Landlord Consent or its approval of
a Banking Sublease Agreement, but shall not be obligated to pay any
consideration or grant any concession in connection therewith.
(d) The Parties agree that Section 10.9 shall not apply to
any Banking Lease for which a Banking Landlord Consent is not obtained
and a Banking Sublease Agreement is not approved.
(e) BNY shall reasonably cooperate with JPM in its efforts
to obtain satisfactory title insurance insuring its interest in the
Leased Banking Premises and Owned Banking Premises, including, without
limitation, by executing and delivering such authority documents and
customary seller's title affidavits, which shall include a so-called "gap
indemnity", as are reasonably required by JPM's title company. In
addition to the foregoing, BNY shall reasonably cooperate with JPM in
connection with the issuance to JPM, at JPM's election and expense, of an
ALTA title insurance policy in form reasonably satisfactory to JPM
insuring its interest in the Owned Banking Premises subject only to the
matters set forth in Section 8.29(b) and Permitted Liens.
(f) At JPM's request, BNY shall request and in good faith
seek to obtain a landlord's estoppel certificate in reasonable and
customary form from any landlord under a Banking Lease, provided that
obtaining any such executed landlord's estoppel certificate shall in no
event be a condition to JPM's obligation to complete the Corporate Trust
Sale or the Banking Sale.
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Section 12.4 Cooperation Regarding Transition of Products and
Services; Courier Contracts. (a) From and after the date hereof until
the Closing and subject to Applicable Law, BNY shall use commercially
reasonable efforts to (i) deliver to JPM a bi-weekly report that shall
contain good-faith estimates by BNY as to the volume of Assumed Banking
Deposits and Assigned Banking Loans held by the Banking Business; and
(ii) provide JPM with any other information that JPM reasonably requests
on a bi-weekly basis. BNY and JPM shall meet at least twice a month to
review the performance of the Banking Business during the prior two-week
period, including reviewing the mix and volumes of business such as BNY's
"free for life" product and promotions.
(b) From and after the date hereof until the Closing and
subject to Applicable Law, BNY and JPM shall consult with each other on
products and services not currently offered by BNY that JPM would expect
to make available to customers of JPM after the Closing, as well as on
procedures and practices not currently undertaken by BNY that JPM would
expect to use after the Closing.
(c) Nothing herein shall require BNY to assist JPM in
marketing to or soliciting any business from any customer of the Banking
Business if BNY determines that to do so would violate any Contract which
is an Excluded Banking Asset.
(d) On or prior to the Closing Date, JPM shall use
commercially reasonable efforts to enter into an agreement with CDC
Systems, Inc., the Brink's Company or Integrated Payment Systems, Inc. or
such other similar company to facilitate the transfer of the Banking Cash
on Hand at the Closing and otherwise to conduct the Banking Business from
and after the Closing as currently conducted.
Section 12.5 UCC-1 Assignment and Other Documents. (a) BNY
shall use commercially reasonable efforts to deliver to JPM at the
Closing all signed UCC-1 financing statements and UCC-3 assignments of
financing statements, endorsed notes, participations and all other
documentation necessary to effect the assignment of the Assigned Banking
Loans and the Assumed Letters of Credit to JPM. The out-of-pocket costs
and expenses of preparing and filing any such documentation shall be paid
by JPM.
(b) BNY shall make, by no later than June 30, 2006, all
filings of continuation statements in the applicable offices necessary as
a result of Revised Article 9 of the Uniform Commercial Code to maintain
perfection of security interests related to the Assigned Banking Loans
and Assumed Letters of Credit proposed to be transferred to JPM. The out-
of-pocket costs and expenses of preparing and filing any such
documentation shall be paid by BNY.
Section 12.6 Information Reporting. Subject to the provisions
of the Banking Transition Services Agreement, all interest credited to,
interest premiums paid on, interest withheld from, early withdrawal
penalties charged to, and other reportable amounts with respect to,
accounts included within the Assumed Banking Deposits shall be reported
by BNY to the extent related to the period beginning on January 1, 2006
and ending on December 31, 2006, and by JPM to the extent related to any
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period beginning after December 31, 2006. Such reports shall be made to
the holders of such deposit accounts and to the applicable federal and
state regulatory agencies.
Section 12.7 Withholding. Subject to the provisions of the
Banking Transition Services Agreement, any amounts required by any
Governmental Authority to be withheld from any of the accounts included
within the Assumed Banking Deposits (the "Banking Withholding
Obligations") or any penalties imposed by any Governmental Authority will
be handled as follows:
(a) any Banking Withholding Obligations required to be
withheld on or prior to December 31, 2006 will be withheld and remitted
by BNY to the appropriate Governmental Authority on or prior to the time
they are due; and
(b) any Banking Withholding Obligations required to be
remitted to the appropriate Governmental Authority after December 31,
2006 with respect to Banking Withholding Obligations after the December
31, 2006and not withheld by BNY shall be withheld and remitted by JPM.
Any penalties that relate to information returns filed by BNY
on or prior to December 31, 2006 in connection with transactions that
occurred on or prior to December 31, 2006 will be BNY's responsibility.
JPM shall cooperate with BNY in providing copies of penalty notices on a
timely basis and other information which BNY may reasonably request in
order to verify or challenge such penalties. To the extent that any
penalty imposed by the IRS relates to information returns filed by JPM
(or filed by BNY on behalf of JPM) after December 31, 2006 in connection
with transactions that occurred prior to December 31, 2006, JPM shall be
responsible for such penalty; provided that BNY has satisfied its
obligation to provide all material information to JPM which is necessary
to complete such information returns (including any such obligation set
forth in the Banking Transition Services Agreement).
Section 12.8 Letters of Credit. In the event that any Assumed
Letter of Credit cannot be assigned to JPM, on the Closing Date, JPM and
BNY shall enter into a participation agreement in customary form
reasonably satisfactory to JPM and BNY pursuant to which JPM shall
acquire and assume all of BNY's rights and obligations under such Assumed
Letters of Credit. The participation agreements referred to in this
Section 12.8 shall be referred to herein as the "Participation
Agreements."
Section 12.9 Form of Transfer. BNY and JPM may by mutual
written agreement at any time change the method of transferring the
Banking Business from BNY to JPM in order to achieve, in a more efficient
manner, the business, financial accounting, regulatory and tax objectives
of BNY and JPM in connection with the transactions contemplated by this
Agreement; provided, however, no such change shall alter or change the
amount of consideration to be paid by JPM as provided in this Agreement.
Section 12.10 Data Processing Conversion for the Retail
Branches and Handling of Certain Items. (a) The parties hereto agree to
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cooperate to employ their commercially reasonable efforts to plan,
execute and complete the Banking Conversion in an orderly and efficient
manner pursuant to the Banking Conversion Plan. As promptly as
practicable after the date hereof, JPM and BNY shall each appoint
qualified staff members to act as project managers for the Banking
Conversion (each, a "Banking Conversion Project Manager"). Such Banking
Conversion Project Managers shall act as the principal contacts between
the parties on matters relating to the Banking Conversion, and shall
coordinate the assignment of personnel as required and generally
facilitate the planning, execution and completion of the Banking
Conversion pursuant to the Banking Conversion Plan. In addition to any
conversion of the data and systems files as part of the Banking
Conversion pursuant to the Banking Conversion Plan and subject to the
Banking Transition Services Agreement, the parties shall reasonably
cooperate in performing such tasks as may be outlined in the Banking
Conversion Plan, including the collection and input of relevant data,
development of new operating procedures and design of forms, in each
case, as mutually agreed by the parties.
(b) Except as otherwise set forth in the Banking Transition
Services Agreement, each party shall bear its own out-of-pocket costs and
expenses associated with the Banking Conversion, including costs and
expenses (including the costs and expenses of such party's employees)
incurred in converting, moving, storing, archiving, adapting or otherwise
transferring or facilitating the transfer of any data, information,
Securities, records, files and systems from the systems and facilities of
BNY and its Affiliates to the systems and facilities of JPM and its
Affiliates (including costs with respect to computer programs, data
processing, deconversion, data extraction, third-party charges and filing
fees); provided, however, that, notwithstanding anything to the contrary
in this Section 12.10 or otherwise in this Agreement, JPM shall not be
liable hereunder for any termination fees, penalties or other break costs
incurred by BNY or any of its Subsidiaries as a result of the Banking
Conversion.
(c) In connection with the conversion activities described
in subsections (a) and (b) immediately above, and subject to Applicable
Law, it is further agreed that:
(1) JPM will review, subject to Section 10.1,
current operations of BNY, and BNY and JPM shall cooperate and use reasonable
best efforts to develop a mutually agreeable written plan within 30 days
of the date hereof (as it may be amended from time to time, the "Banking
Conversion Plan"), which Banking Conversion Plan shall (i) set forth the
plan, procedures and schedule required to fully effect the Banking
Conversion as promptly as practicable after the Closing, (ii) shall
include interim target dates for the completion of integral items to the
Banking Conversion; and (iii) shall provide that conversion items
integral to the operation of the Banking Business, as identified by JPM,
shall have the earliest target completion dates in the Banking Conversion
Plan;
(2) BNY will, in accordance with JPM's reasonable
instructions, change, alter or update customer facing systems (including
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Internet, ATMs, IVRs, Print Output and Teller Receipts) so that, after
the Closing, they will reflect JPM as the owner of the Banking Business;
(3) as of the Closing Date, BNY will provide JPM
with BNY's existing customer, account and transaction data feeds in order to
allow JPM to comply with applicable legal and contractual AML and privacy
requirements on and after the Closing Date;
(4) BNY will use reasonable best efforts to
create prior to the Closing a unique and segmented general ledger that will
be substantially sufficient for JPM to balance, reconcile and settle its
books and records in accordance with Applicable Law and GAAP;
(5) BNY will ensure that, as of the Closing, all
data related to Assigned Banking Loans and other Purchased Banking Assets
residing on BNY's commercial loan systems, including, but not limited to,
the AFS, AIMS, ECAPS, PIMS and CIF systems will be logically segregated
from data relating to the Excluded Banking Assets so that, with respect
to such systems from and after the Closing: (i) JPM employees will have
view and inquiry access to Assigned Banking Loans and other Purchased
Banking Assets data and (ii) BNY employees, other than employees assigned
to the Regional Loan Operations or Client Management Administration units
(which employees JPM acknowledges will have view, inquiry and operational
access to such data pursuant to the Banking Transition Services
Agreement), will be restricted from having access to the Assigned Banking
Loans and other Purchased Banking Assets data on the systems;
(6) BNY will use reasonable best efforts to
separate data relevant to the Purchased Banking Assets from other data of
BNY prior to the Closing; and
(7) prior to the Closing, BNY shall have completed
in all material respects (including time of delivery and service level
requirements) the data conversion, mapping and other systems
functionality projects to be specified in the Banking Conversion Plan.
Section 12.11 Physical Damage to Owned Banking Premises.
In the event of any physical damage or destruction, other than ordinary wear
and tear, to any Owned Banking Premises, at the election of JPM, either
(a) BNY shall prior to the Closing Date repair such damage or destruction
to return such property to its condition prior to such damage or
destruction, (b) the Net Book Value of such Owned Banking Premises shall
be adjusted as mutually agreed by JPM and BNY or (c) BNY shall pay to JPM
an amount equal to the sum of (1) the insurance proceeds received by BNY
with respect to such damage or destruction, (2) any applicable deductible
amount and (3) such additional amount as may be required to repair such
damage or destruction to return such property to its condition prior to
such damage or destruction.
Section 12.12 Right of First Offer for Excluded Banking
Premises. (a) Owned Properties. Until the fifth anniversary of the
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Closing, if BNY or any of its Affiliates desires to sell, transfer,
convey or exchange, in one transaction or a series of transactions, any
real property that it owns that is part of the Excluded Banking Premises
(other than any Excluded Banking Premise set forth on Schedule 12.12(a)),
to a Person other than an Affiliate of BNY (except pursuant to an
indirect sale, transfer, conveyance or exchange of one or more Excluded
Banking Premises that may be deemed to have occurred solely as a result
of a merger, business combination, share purchase or similar transaction
involving BNY or any of its "significant subsidiaries," as defined under
Rule 1-02(w) of Regulation S-X promulgated under the Securities Exchange
Act of 1934, as amended, or a sale-leaseback or similar transaction),
then prior to effecting or making such sale, transfer, conveyance or
exchange or entering into an agreement with respect thereto, BNY shall
notify JPM in writing of the material terms and conditions upon which it
proposes to effect such sale, transfer, conveyance or exchange (such
notice, the "Transfer Notice"), which Transfer Notice shall include all
material terms and conditions of the proposed sale, transfer, conveyance
or exchange relating to price, terms of payment and timing of closing.
JPM shall have the right to acquire the real property that is the subject
of the Transfer Notice on the same terms and conditions as are set forth
in the Transfer Notice. JPM shall have thirty (30) days following
delivery of the Transfer Notice during which to notify BNY whether or not
JPM desires to exercise its right of first offer, and, during such thirty
(30) day period, BNY shall promptly provide to JPM title reports,
surveys, environmental reports and other due diligence materials as may
be in BNY's possession, and BNY shall provide JPM with reasonable access
to the applicable premises for the purposes of conducting due diligence
investigations. If JPM does not respond during the applicable period set
forth above for exercising its purchasing right under this Section 12.12,
JPM shall be deemed to have declined to exercise its right of first offer
under this Section 12.12 with respect to such real property. If JPM
elects to purchase the real property that is the subject of the Transfer
Notice, the parties shall act promptly and in good faith to enter into a
purchase agreement reflecting the terms and conditions set forth in the
Transfer Notice and other customary terms and conditions. BNY and JPM
agree to use commercially reasonable efforts to cause any applicable
conditions precedent in such purchase agreement to be satisfied as
expeditiously as possible. At the closing of the sale of such real
property, (a) BNY shall, or shall cause its applicable Subsidiaries to,
execute and deliver to JPM (i) a bargain and sale deed (without covenant
against grantor's acts) transferring the real property described in the
Transfer Notice to JPM, free and clear of all Liens other than Permitted
Liens, and otherwise in form and substance reasonably acceptable to JPM
and BNY; (ii) customary title affidavits; and (iii) any other instruments
reasonably requested by JPM to give effect to the purchase; and (b) JPM
shall deliver to BNY the purchase price specified in the Transfer Notice
in immediately available funds or other consideration as specified in the
Transfer Notice. If JPM does not elect to purchase the property pursuant
to this Section 12.12 or, having elected to so purchase such property,
fails to do so within the time period required by this Section 12.12, BNY
shall have the right, for a period of 180 days after the expiration of
the offer period referred to above or the date of such failure, as
applicable, to enter into a definitive written agreement and consummate
the sale, transfer or exchange with an unaffiliated Person regarding the
sale, transfer, conveyance or exchange of the real property described in
the Transfer Notice on terms and conditions that satisfy the following
criteria:
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(1) the amount of consideration to be paid by the
purchasing party may not be less than the consideration set forth
in the Transfer Notice (excluding customary pro-rations, transfer
taxes, closing costs and brokerage commissions);
(2) subject to clause (1) above, the form of consideration
may not be materially different from that set forth in the Transfer
Notice, except to the extent any change in the form of
consideration makes the terms of the transaction less favorable
from the purchaser's standpoint; and
(3) the terms and conditions set forth in such definitive
written agreement, when considered together with the form and
amount of consideration to be paid by such purchasing party, may
not render the terms of such transaction, taken as a whole,
materially inferior (to BNY or its Subsidiaries from an economic
standpoint) to those set forth in the Transfer Notice.
If such sale, transfer, conveyance or exchange is not consummated within
the 180-day period described above and in accordance with the terms of
such definitive written agreement, the requirements of this Section 12.12
shall apply anew to any further efforts by BNY or any of its Subsidiaries
to sell, transfer, convey or exchange the real property described in the
Transfer Notice.
(b) Leased Properties. If BNY or any of its Affiliates is
party to a lease with respect to any real property that is part of the
Excluded Banking Premises (which lease contains at least one unexercised
renewal option), and BNY or its applicable Affiliate does not desire to
renew such lease, then at least sixty (60) days prior to the last date on
which such lease may be renewed, and prior to providing any written
notice to the landlord under such lease that BNY or its Affiliates does
not intend to renew such lease, BNY shall notify JPM in writing of its
intent (the "Non-Renewal Notice"), and shall provide JPM with a written
copy of the lease all amendments and modifications thereto and all
material correspondence files, together with all other documents relating
to the lease as JPM may reasonably request. Within thirty (30) days of
its receipt of the Non-Renewal Notice, JPM may notify BNY that it desires
to occupy such leased premises. If JPM provides such notice to BNY, then
BNY or its applicable Affiliate shall renew such lease in a timely manner
and, as of the commencement date of the renewal term, BNY shall sublet
the space covered by such lease on the same economic terms and for the
same duration as BNY or its applicable Affiliate is leasing such space
from the landlord; provided, however, that, if such sublet would require
consent of the landlord, then, then BNY or its applicable Affiliate shall
be required to renew the lease and sublet the space to JPM only if it
receives such consent of the landlord; provided, further, that, in such
case, BNY and its applicable Affiliates shall use reasonable best efforts
to obtain such consent and to permit JPM to participate in any
discussions with the landlord to obtain such consent.
(c) The provisions of this Section 12.12 shall survive the
Closing and terminate on the fifth anniversary of the Closing.
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Section 12.13 Termination of Agent Bank Agreement. BNY and JPM
agree that, on or prior to the Closing, BNY and JPM shall terminate, or
shall cause the termination of, effective as of or prior to the Closing,
the Agent Bank Agreement, dated as of October 21, 1997, as amended (the
"Agent Bank Agreement"), among The Bank of New York Company, Inc.,
certain of its affiliates and Chase Manhattan Bank USA, National
Association, without the requirement of any payment by JPM, BNY or any of
their respective Subsidiaries of any costs, fees or other penalties or
break costs. BNY and JPM agree that, upon such termination, all rights
of BNY to purchase or arrange to purchase (whether pursuant to Section
11.3 of the Agent Bank Agreement or otherwise) the Accounts, the BNY Co.
Relationship Accounts and/or the Program Receivables shall terminate and
be without any force or effect. As used in this Section 12.13,
"Accounts," the "BNY Co. Relationship Accounts" and the "Program
Receivables" shall have the respective meanings attributed to them in the
Agent Bank Agreement.
Section 12.14 Limited License of BNY's Name. (a) On the
Closing Date, BNY shall grant JPM and its Affiliates a non-exclusive,
non-transferable, non-sublicensable, royalty-free license to use, in
connection with the purchase, operation and conduct of the Banking
Business, each of the "The Bank of New York" name, red box logo design(s)
and associated or related trade names and marks (each, a "Licensed BNY
Item" and, collectively, the "Licensed BNY Items") in substantially the
same forms, and for substantially the same purposes, as BNY is using such
Licensed BNY Items in connection with the purchase, operation and conduct
of the Banking Business immediately prior to the Closing, including but
not limited to the forms that currently appear or are used in, on or in
connection with any Owned Banking Premises, Leased Banking Premises,
Other Banking Facility, ATM or any other Purchased Banking Asset or
Assumed Banking Liability (the "BNY Name License"). The BNY Name License
shall permit JPM to use the Licensed BNY Items in connection with the
Banking Business after Closing, including but not limited to operations
and marketing (subject to subsection (c) below). The term of the BNY
Name License shall commence on the Closing Date and, except as otherwise
provided herein, expire upon the Banking Conversion.
(b) The BNY Name License shall not grant JPM any right to
use in any manner BNY's multi-color jewel box "The Bank of New York" logo
design, a copy of which is set forth on Schedule 12.14. Notwithstanding
the foregoing sentence, BNY agrees that, if BNY's multi-color jewel box
"The Bank of New York" logo design or the name "▇▇▇▇▇▇ Trust" appears on
any signage or otherwise on or in any Owned Banking Premise, Leased
Banking Premises, Other Banking Facility, ATM or any other Purchased
Banking Asset, BNY shall either (i) grant JPM and its Affiliates a non-
exclusive, non-transferable, non-sublicensable, royalty-free license to
use such logo design or name, as applicable, in the forms that currently
appear on such premise, branch or facility for the duration of the BNY
Name License; or (ii) remove such logo design or name without any cost to
JPM and without any damage to such premise, branch or facility. In
addition to the foregoing, if the name "▇▇▇▇▇▇ Trust" is etched into any
building on any Owned Banking Premise, any Leased Banking Premises or any
Other Banking Facility, then BNY agrees that it shall grant JPM and its
Affiliates a perpetual, non-exclusive, non-transferable, non-
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sublicensable, royalty-free license to use such name to the extent
necessary to permit such name to remain etched into such building,
whether such building is then owned or leased by JPM or an Affiliate or
by subsequent transferees.
(c) JPM's permitted use of the Licensed BNY Items for
marketing purposes shall include but not be limited to direct mail,
radio, print, TV, outdoor advertising, internal and external signage and
merchandising, and online and electronic banking and marketing. Such
marketing shall be consistent with and substantially similar to (i)
marketing JPM then conducts or previously has conducted for similar
products and services or (ii) marketing BNY conducted immediately prior
to the Closing except in each case as modified to comply with applicable
law or as necessary or advisable in JPM's reasonable discretion to
reflect the transactions contemplated by this Agreement and/or to avoid
customer or public confusion.
BNY shall have the right to approve, which approval shall not
be unreasonably withheld or delayed, proposed marketing materials
containing any BNY Licensed Item prior to JPM's use, it being understood
that it shall not be unreasonable for BNY to withhold its approval for
marketing materials that depict BNY or any of its businesses in a
negative manner. However, to the extent any such material is
substantially similar to the material set forth in Schedule 12.14(c)
hereto, BNY will be deemed to have consented and no prior review shall be
necessary. BNY's review and approval hereunder shall be limited to the
form of such materials; matters such as product/service terms, features
and pricing will be within JPM's sole discretion. BNY will respond to
any request for approval within two business days.
(d) JPM's permitted use of the Licensed BNY Items for
operations purposes shall include but not be limited to (i) debit/credit
advices; (ii) overdraft, uncollected funds and similar notices; (iii)
funds availability and similar notices; (iv) CD maturity notices; (v)
official checks, money orders and foreign drafts; (vi) statements, forms,
agreements and disclosures; (vii) ATM and Quick Deposit envelopes;
(viii) safe deposit box key fobs, envelopes, statements, etc.; (ix)
correspondence; (x) online and electronic banking; (xi) customer service
matters; (xii) customer communications; and (xiii) employee
communications.
(e) BNY acknowledges and agrees that possession, retention
or use of materials containing any BNY Licensed Item or any other BNY
name, logo, ▇▇▇▇▇, ▇▇▇▇ or similar item, by a customer, former customer,
counterparty or other third party (i) is not within JPM's control and is
not a use by JPM of such Licensed BNY Item (and, except as set forth in
the last sentence of this Section 12.14, JPM is not obligated to replace
such materials, including ATM cards, debit cards and checks, without such
Licensed BNY Item or other BNY name, logo, ▇▇▇▇▇, ▇▇▇▇ or similar item);
and (ii) is not subject to this Agreement or the BNY Name License and
will not result in any JPM obligation or liability thereunder. Such
third party use includes but is not limited to checks of any type,
including money market, travelers, official and gift; ATM cards; debit
cards; account access devices; statements; forms, agreements and
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disclosures; correspondence; Checking Advantage, iPayments and similar
membership materials; gift cards; promotional material; and similar
documents and materials. On or prior to the 90th day after completion of
the Banking Conversion, JPM shall issue new debit cards without a
Licensed BNY Item to all customers within the Banking Business to replace
the debit cards containing a BNY Licensed Item, and, on or prior to the
18-month anniversary of the completion of the Banking Conversion, JPM
shall issue new checks without a Licensed BNY Item to all customers
within the Banking Business to replace the checks containing a BNY
Licensed Item.
In addition, JPM's use of any document or material containing
a BNY Licensed Item, including imaged or hard copies of statements,
checks, forms, agreements, customer correspondence, notices and other
records, to service accounts, respond to customer or other third party
requests, to effectuate the transactions contemplated by this Agreement,
and to comply with any applicable legal, regulatory or contractual
requirement, is permissible and not subject to this Agreement or the BNY
Name License and is not a violation thereof.
(f) No fee for the BNY Name License shall be charged until
the later of (i) July 1, 2007 and (ii) nine months following the Closing
Date (the later of such two dates, the "Banking License Fee Start Date");
provided, however, that if either (1) the Banking Conversion Plan
provides for a scheduled completion of the Banking Conversion after April
30, 2007 (the number of days between the scheduled completion and April
30, 2007, the "Banking Conversion Plan Delay Period") and/or (2) BNY's
completion of a material item set forth in the Banking Conversion Plan is
delayed beyond the scheduled deadline for completing such item in the
Banking Conversion Plan (the number of days between the date on which BNY
completes such item and the scheduled deadline for such item, the
"Banking Milestone Delay Period"), then the Banking License Fee Start
Date shall be postponed by a number of days equal to the sum of the
Banking Conversion Plan Delay Period, if any, and the aggregate Banking
Milestone Delay Periods for all such items, if any. Beginning on the
Banking License Fee Start Date, for each month during which the BNY Name
License shall continue to be in effect, JPM shall pay BNY the following
monthly fees: (i) for the period commencing on the Banking License Fee
Start Date and ending on the date that is four months after the Banking
License Fee Start Date, Five Million Dollars ($5,000,000) per month; and
(ii) for each month thereafter, Ten Million Dollars ($10,000,000).
Notwithstanding the foregoing or anything contrary herein, no fee shall
be charged for the limited, perpetual license contemplated by Section
12.14(b).
In addition, no fee shall be charged in connection with (x)
any JPM use of a Licensed BNY Item contemplated by Section 12.14(e) and
(y) any inadvertent, de minimus or similar use by JPM of a Licensed BNY
Item after the Banking Conversion so long as JPM has used commercially
reasonable efforts to discontinue such uses, other than as contemplated
herein, after the Banking Conversion.
(g) Notwithstanding anything to the contrary in this
Agreement, JPM may use the BNY product/service names and marks BNY is
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using in the Banking Business immediately prior to the Closing for up to
45 days following the Banking Conversion; provided, however, that neither
this Section 12.14(g) or any other provision in the Agreement shall
constitute a waiver by JPM of any common law, statutory or other right
with respect to product/service names and marks.
Section 12.15 Bank-At-Work Arrangement; Sublease of Certain
Employee Branches. (a) During the Banking Non-Competition Period, BNY
shall not enter into any "bank-at-work" arrangement with any Person other
than JPM or its Affiliates.
(b) JPM and BNY shall enter into a "group banking"
agreement, to be effective as of the Closing, containing terms and
condition no worse in the aggregate than any comparable "group banking"
agreement that JPM or its Subsidiaries has with a third party as of the
date hereof.
(c) In connection with the agreement described in Section
12.15(b), JPM and its applicable Subsidiary shall have the the option to
sublease from BNY or its applicable Subsidiary the Banking Premises set
forth on Schedule 12.15(c). If JPM exercises this option, JPM and BNY
agree to negotiate in good faith to enter into a sublease agreement on
terms mutually acceptable between BNY and JPM.
Section 12.16 Information Regarding Banking Customers and
Relationships. Without limiting Section 3.1(a)(8), after the Closing,
neither BNY nor any of its Affiliates shall provide or furnish to BNY
Mortgage Company LLC any books, records or other data (including files,
customer lists, mailing lists, documentation or records) acquired by JPM
pursuant to Section 3.1(a)(8), including relating to any customer for
which a relationship was transferred from BNY or any of its Subsidiaries
to JPM or any of its Subsidiaries as a result of the Banking Sale.
Section 12.17 Private Banking Earnout. The Parties agree that,
based on the terms and subject to the conditions set forth in Section 1.4
of Schedule A, JPM shall pay to BNY an amount not less than $25 million
nor greater than $75 million based on individuals who are clients of
BNY's private banking business as of the Closing who establish new
deposit accounts at JPM bank branches in Connecticut, New Jersey or New
York during the one-year period ending on the first anniversary of the
Closing Date.
Section 12.18 Subpoena and Certain Process Matters. (a)
Subpoenas. BNY will continue to handle and process after the Closing all
civil and criminal subpoenas, IRS summons, court-ordered or
governmental/regulatory demands for documentation or information
(collectively referred to as "Subpoenas") served on BNY prior to Closing
which relate to Purchased Banking Assets or Assumed Banking Liabilities.
For a period of six months after the Closing Date, civil
Subpoenas served on BNY after the Closing Date that relate to Purchased
Banking Assets or Assumed Banking Liabilities will be returned to the
issuer with an appropriate letter notifying the issuer of the recent
acquisition by JPM of certain BNY assets. Notwithstanding the previous
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sentence, in the event that BNY determines it has an independent
obligation to comply with the Subpoena it shall do so and, for a period
of eight (8) months following the Closing Date, shall provide to JPM a
copy of said Subpoena and a detailed list of all documents produced by
BNY, unless such notification is prohibited by law or request of a
Governmental Authority.
(b) Retail Broker-Dealer Matters (Including Annuities).
BNY will handle and respond to client and regulatory complaints,
arbitrations and litigation related to any events or transactions that
occurred prior to October 4, 2006. CISC will forward to BNY any such
complaints, arbitrations or litigation received by CISC.
(c) Other Process. For a period of two years from the
Closing Date, BNY will promptly forward to JPM all bankruptcy,
foreclosure and similar legal notices received after Closing that relate
to a Purchased Banking Asset to the following address:
JPMorgan Chase Bank, N.A.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
For a period of two years from the Closing Date, JPM will promptly
forward to BNY all bankruptcy, foreclosure and similar notices received
after Closing that relate to Purchased Corporate Trust Assets to the
following address:
The Bank of New York
Legal Department
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
JPM will promptly forward to BNY notices and documents that JPM's legal
department receives after the Closing Date from third parties to the
extent that such notices or documents relate to any pending and new
litigation matters, bankruptcy notices, foreclosure notices or municipal
citations regarding mortgage-backed and asset-backed securities
trusteeships that form part of the Purchased Corporate Trust Assets to
the following address:
The Bank of New York
Legal Department
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Either party may change their respective addresses listed in this Section
12.18(c) by written notice to the other party.
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ARTICLE XIII
EMPLOYMENT AND BENEFIT MATTERS
Section 13.1 Corporate Trust Business. (a) Offers of
Employment/Automatic Transfer of Employment. Commencing on the date
hereof and ending ninety (90) calendar days hereafter, JPM shall provide
BNY with reasonable access to each of the Corporate Trust Business
Employees. On or prior to the end of such ninety-(90)-day period, BNY
shall provide JPM with a list of those Corporate Trust Business Employees
to whom BNY (i) will make a Comparable Job Offer for employment with BNY,
with respect to those employed in the United States and any other
jurisdiction where transfer does not occur by operation of Applicable Law
(the "Selected Non-Automatic Transfer Employees") or (ii) would have made
a Comparable Job Offer for employment with BNY but which job offer is
unnecessary due to the fact that the employment of such Corporate Trust
Business Employees will automatically transfer to BNY under Applicable
Law (the "Selected Automatic Transfer Employees", and collectively with
the Selected Non-Automatic Transfer Employees, the "Selected Corporate
Trust Business Employees"). Subject to Applicable Law, at least thirty
(30) days (unless an earlier date is required by Applicable Law) prior to
the Closing Date and effective as of the Closing Date, BNY shall (i)
make, and shall use reasonable best efforts to cause to be accepted, a
Comparable Job Offer to all Selected Non-Automatic Corporate Trust
Business Employees and (ii) take all action necessary under Applicable
Law to effectuate the transfer of the (A) Selected Automatic Transfer
Employees and (B) the Corporate Trust Business Employees who will
automatically transfer to BNY under Applicable Law but who are not on the
list of Selected Automatic Transfer Employees (the "Non-Selected
Automatic Transfer Employees") (unless otherwise requested by JPM with
respect to a particular Non-Selected Automatic Transfer Employee). A
Comparable Job Offer may be conditioned upon (i) completing a standard
and customary written employment application with BNY and (ii) satisfying
pre-employment screening requirements, except that drug testing,
fingerprinting and a criminal background check shall be considered
satisfied to the extent JPM reaffirms to BNY the representation made in
the last sentence of Section 6.12(a) (the "BNY Job Offer Condition").
The Selected Corporate Trust Business Employees (and any other Corporate
Trust Business Employees, including the Non-Selected Automatic Transfer
Employees) who, as applicable, either (i) accept BNY's offer of
employment and satisfy the BNY Job Offer Condition or (ii) otherwise
become employees of BNY by operation of Applicable Law are referred to
herein as the "Transferred Corporate Trust Employees." BNY's employment
of the Transferred Corporate Trust Employees shall be deemed to commence
at 12:01 a.m. on the Closing Date, without regard to whether the
Transferred Corporate Trust Employee is actively at work on the Closing
Date in the case of an employee who on the Closing Date is absent from
work due to a vacation, jury duty, funeral leave or personal day.
Notwithstanding the foregoing, to the extent that a Corporate Trust
Business Employee who has accepted BNY's job offer is not available to
perform services on the Closing Date because on the Closing Date such
employee is on sick leave, short or long-term disability, military leave,
leave of absence under the Family Medical Leave Act or other leave of
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absence approved by JPM (other than a vacation, jury duty, funeral leave
or personal day), he or she shall remain an employee of JPM (except as
may otherwise be provided by Applicable Law); provided that, BNY shall
hire such Corporate Trust Business Employee if such Employee returns to
work no later than the date that is the earlier of the scheduled return
date (including any approved extensions thereto) and six months from the
date of commencement of such leave, and, for purposes of this Agreement,
such Employee shall become a Transferred Corporate Trust Employee as of
the date active employment with BNY commences and, to the extent
applicable, references in this Section 13.1 to the "Closing Date" shall
relate to the date active employment commences. Those Corporate Trust
Business Employees who do not receive, or do not accept, a Comparable Job
Offer from BNY, and those Corporate Trust Business Employees whose
employment does not transfer to BNY by operation of Applicable Law, shall
not be considered Transferred Corporate Trust Employees for any purpose
of this Agreement. The parties shall comply with their respective legal
obligations relating to informing and consulting with any Corporate Trust
Business Employees whose employment automatically transfers to BNY under
Applicable Law and/or their recognized representatives (including without
limitation any works council or trades union who is entitled to be
informed and consulted in respect of the transaction contemplated by this
Agreement) and, notwithstanding anything contained herein to the
contrary, the breaching party shall indemnify and hold the non-breaching
party harmless on a dollar-for-dollar basis in respect of any Damages
(including any Tax) incurred as a result of the breaching party's failure
to comply with these obligations.
(b) Termination of Employment with JPM. Subject to
Applicable Law, as of the Closing Date, the Transferred Corporate Trust
Employees shall cease active participation in each Corporate Trust
Employee Plan. Except as otherwise expressly provided in this Section
13.1 or as otherwise provided by Applicable Law, JPM shall retain all
assets and liabilities for the Corporate Trust Business Employees under
the Corporate Trust Employee Plans. Except as otherwise provided by
Applicable Law, JPM shall be liable for all eligible claims for benefits
under the Corporate Trust Employee Plans that are welfare plans that are
incurred by the Transferred Corporate Trust Employees prior to the
Closing Date. For purposes of this Agreement, the following claims shall
be deemed to be incurred as follows: (i) life, accidental death and
dismemberment, business travel accident insurance, short-term disability
and workers compensation benefits, upon the event giving rise to such
benefits; (ii) health, vision, dental and/or prescription drug benefits,
on the date such services, materials or supplies were provided; and (iii)
long-term disability benefits, on the eligibility date determined by the
long-term disability carrier for the plan in which the individual
participates.
(c) Benefits Following the Closing Date. Subject to
Applicable Law, effective as of the Closing Date, BNY shall provide the
Transferred Corporate Trust Employees with the same employee benefit
plans and programs as those that are provided to similarly situated
employees of BNY (both by job classification or status and by geographic
location). For purposes of determining (i) eligibility to participate in
and vesting under any employee benefit plan of BNY or its Affiliates,
(ii) the banking privileges and perquisites applicable to the Transferred
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Corporate Trust Employees and (iii) retirement eligibility under any BNY
plan providing for the grant of equity awards , and for benefit accrual
purposes only for vacation, sickness benefits and severance benefits (if
any), each Transferred Corporate Trust Employee shall be credited with
the years of service he or she has been credited with under the
comparable Corporate Trust Employee Plan; provided that such service
shall not be recognized for purposes of (i) grandfathering, benefit
accruals and/or level of pay credits under any BNY defined benefit
retirement plan or (ii) retiree medical benefits. BNY shall (i) waive
any preexisting conditions and waiting periods under the welfare benefit
plans of BNY that provide healthcare benefits in which the Transferred
Corporate Trust Employees are eligible to participate to the same extent
that such conditions and waiting periods were waived under the comparable
Corporate Trust Employee Plan, and (ii) subject to JPM providing BNY with
the applicable information with respect to each Transferred Corporate
Trust Employee in a form that BNY determines is administratively feasible
to take into account under its plans, cause such plans (other than HMOs)
to honor any expenses incurred by such Corporate Trust Employees and
their eligible dependents under Corporate Trust Employee Plans that are
healthcare benefit plans during the portion of the calendar year in which
they become employees of BNY for purposes of satisfying applicable
deductible, co-insurance, maximum out-of-pocket, and similar expenses, to
the same extent that such expenses were recognized under the comparable
Corporate Trust Employee Plan. Notwithstanding the foregoing, with
respect to Transferred Corporate Trust Employees providing services
outside of the United States, to the extent more favorable or otherwise
required by Applicable Law, the provision of benefits following the
Closing Date and credited service shall be in accordance with Applicable
Law and in all other respects their employment relationship shall take
effect on and from the Closing Date as if it were originally made between
each such employee and BNY.
(d) COBRA. JPM shall be responsible for the administration
of and shall retain any and all obligations and liabilities for
continuation coverage under Section 4980B of the Code ("COBRA") with
respect to Transferred Corporate Trust Employees and their dependents and
beneficiaries for "qualifying events" occurring on or prior to the
Closing Date, and BNY shall be responsible for all obligations and
liabilities for COBRA continuation coverage for Transferred Corporate
Trust Employees and their dependents and beneficiaries with respect to
"qualifying events" occurring after the Closing Date. JPM shall retain
any and all obligations and liabilities for COBRA continuation coverage
for all Corporate Trust Business Employees and their dependents and
beneficiaries who are not Transferred Corporate Trust Employees.
(e) Severance. (i) Termination of Transferred Corporate
Trust Employees Following the Closing Date. BNY shall pay severance and
provide benefits in accordance with the severance schedule set forth on
Schedule 13.1(e)(i) (or such other applicable plan, policy or arrangement
to the extent required by Applicable Law), to each Transferred Corporate
Trust Employee who was a Selected Corporate Trust Business Employee and
whose employment is terminated by BNY without "cause" (as defined under
BNY's policies and practices) within twelve (12) months after the Closing
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Date, subject to the execution, delivery and non-revocation of a release
of claims in favor of BNY, JPM and their respective Affiliates.
(ii) Termination of Corporate Trust Business Employees who
Do Not Become Transferred Corporate Trust Employees or who were Non-
Selected Automatic Transfer Employees. With respect to Corporate Trust
Business Employees who do not become Transferred Corporate Trust
Employees for any reason (other than due to having rejected a Comparable
Job Offer), whether due to the fact that such Employees were not Selected
Corporate Trust Employees or due to the fact that they do not transfer
(including, with respect to persons employed outside of the United
States, due to refusal to transfer to BNY) under Applicable Law, JPM
shall retain and shall satisfy all severance, notice (including pay in
lieu of notice), unfair dismissal and redundancy pay and benefits,
including any such obligations that are statutorily imposed and the
employer-paid portion of any taxes or social contributions (the
"Severance Benefits"). BNY shall assume and shall satisfy all Severance
Benefits with respect to Non-Selected Automatic Transfer Employees who
become Transferred Corporate Trust Employees; provided that JPM shall
reimburse BNY, on an as incurred basis, for the full cost of the
Severance Benefits paid to a Non-Selected Automatic Transfer Employee who
was previously listed as a Corporate Trust Business Employee, becomes a
Transferred Corporate Trust Employee and receives notice (to be effective
immediately) of termination of employment from BNY within ten (10)
Business Days of the Closing Date and whose employment termination is
otherwise effectuated in accordance with the procedures set forth in the
last sentence of this Section 13.1(e)(ii), it being understood that BNY
is responsible for the salary and other employment costs associated with
employing such person during such period. Notwithstanding anything
contained herein to the contrary, BNY shall reimburse JPM, on an as
incurred basis, for the full cost of the Severance Benefits paid to the
JPM employees who are categorized as Trust Financial Management employees
(the "TFM Employees"), upon the termination of such employees during the
term of the Corporate Trust Transition Services Agreement or in
connection with the expiration of the term of the Corporate Trust
Transition Services Agreement (but in no event more than 20 Business Days
following the payment of such Severance Benefits); provided that the
severance of the TFM Employees shall be determined in accordance with
Schedule 13.1(e)(i) (with benefits to be provided under the terms of the
JPM Severance Pay Plan), with the base salary or rate of pay used for
purposes of such severance calculation to be the last base salary or rate
of pay that was included in determining the Service Fee payable by BNY to
JPM for such TFM Employee under the Corporate Trust Transition Services
Agreement. Except as may otherwise be required by Applicable Law,
neither BNY, JPM nor any of their respective Affiliates shall pay or
provide Severance Benefits to any Corporate Trust Business Employee who
receives a Comparable Job Offer from BNY and does not accept such offer;
provided, that if Severance Benefits are required to be paid or provided
under Applicable Law, the cost allocation provisions of this Section
13.1(e)(ii) shall apply. BNY shall (i) reimburse JPM for the full cost
of any Severance Benefits paid to a Corporate Trust Business Employee who
BNY identified as a Selected Non-Automatic Transfer Employee, but to whom
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BNY did not ultimately make a Comparable Job Offer and (ii) be fully
liable and indemnify JPM for the full cost of any Severance Benefits paid
to a Selected Automatic Transfer Employee who is dismissed by BNY
following the Closing Date. Nothing in this Section 13.1(e)(ii) is
intended to conflict with the provisions of Section 13.1(k), but in the
event of an inconsistency, Section 13.1(e)(ii) shall govern. Subject to
Applicable Law, BNY and JPM shall cooperate to take commercially
reasonable steps to reduce, to the extent possible, the likelihood that
any of the parties will have to pay Severance Benefits to any Corporate
Trust Business Employees who do not become Transferred Corporate Trust
Employees or who were Non-Selected Automatic Transfer Employees;
provided, however, that, in no event, shall JPM or BNY be required to
find alternative employment for such employees at JPM or BNY or one of
their respective Affiliates. In addition, in the event a Non-Selected
Automatic Transfer Employee asserts that he or she became an employee of
BNY as a result of the transactions contemplated by this Agreement, BNY
shall (i) within ten (10) Business Days of BNY first becoming aware of
such claim of transferred employment, provide such Employee with a notice
of termination of employment to be effective immediately, (ii) take such
other action as is necessary to effectuate such termination of employment
with BNY and (iii) immediately notify JPM of such claim, and thereafter
JPM shall control such claim (including in respect of any settlement
related thereto), although BNY agrees to cooperate with JPM in connection
with any such proceedings or such settlement.
(ii) Severance for Corporate Trust Business Employees in the
Run-Off Appointment Jurisdiction. Notwithstanding anything to the
contrary in this Section 13.1(e), BNY shall also reimburse JPM, on an as
incurred basis, for the full cost of the Severance Benefits paid to
Corporate Trust Business Employees in the Run-Off Appointment
jurisdictions to the extent specified on Schedule 13.1(e)(iii).
(f) Retirement Plans. Effective as of the Closing Date, to
the extent permitted by Applicable Law, JPM shall take action to provide
that the account balances and accrued benefits, as applicable, of all
Transferred Corporate Trust Employees under the tax-qualified employee
savings plan(s) (the "JPM's Savings Plan") and pension plan(s) that are
sponsored by JPM in the United States in which the Transferred Corporate
Trust Employees participated immediately prior to the Closing Date shall
vest in full. BNY shall take all action necessary to permit BNY's tax-
qualified employee savings plan(s) maintained in the United States to,
during the 90 day period following the Closing Date, accept rollover
contributions of "eligible rollover distributions" (within the meaning of
Section 402(c)(4) of the Code, but excluding any after-tax contributions
and amounts attributable thereto) made to the Transferred Corporate Trust
Employees from the JPM's Savings Plan. For purposes of this Section, the
term "eligible rollover distribution" shall include (i) the amount of any
unpaid balance of any loan made to a Transferred Corporate Trust Employee
under the JPM's Savings Plan and (ii) the promissory note (or other
documentation) evidencing such loan. Prior to the Closing Date, JPM
shall take all action necessary to effectuate the agreement set forth on
Schedule 13.1(f).
(g) Vacation Time. For the remainder of the calendar year
during which the Closing Date occurs, a Transferred Corporate Trust
Employee shall be entitled to vacation time benefits pursuant to the
terms of JPM's vacation time policy as in effect on the Closing Date
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(subject to ordinary course limits on vacation scheduling), with full
recognition of and credit for his or her accrued and unused vacation time
for the portion of such calendar year ending as of the Closing Date
(except to the extent a Transferred Corporate Trust Employee receives a
cash payment in satisfaction of accrued and unused vacation time as
provided in the following sentence) and with accruals for the remaining
portion of such calendar year in accordance with JPM's vacation time
policy as in effect on the Closing Date. Notwithstanding the foregoing,
to the extent Applicable Law requires that in connection with the
transaction accrued and unused vacation time be satisfied through a cash
payment, as soon as reasonably practicable following the Closing Date,
JPM shall pay to each applicable Transferred Corporate Trust Employee an
amount in cash in respect of all unused vacation time that has been
accrued with respect to such Employee through the Closing Date, and BNY
shall have no liability with respect thereto. With respect to calendar
years commencing after the calendar year in which the Closing Date
occurs, Transferred Corporate Trust Employees shall be eligible for
vacation time benefits in accordance with BNY's vacation time policy
applicable to similarly situated employees of BNY.
(h) Assumption of Corporate Trust Employment Agreements.
Effective as of the Closing Date, BNY shall assume (and shall have taken
all action required to effectuate such assumption) all Corporate Trust
Employment Agreements set forth on Schedule 6.12(b) with the Transferred
Corporate Trust Employees.
(i) 2006 Annual Incentives for Pre-Closing Period. BNY
shall pay the Transferred Corporate Trust Employees, as a group,
incentive bonuses with respect to the portion of the calendar year
commencing on January 1, 2006 and ending on the Closing Date in an
aggregate amount of at least the amount accrued in respect of annual
bonuses for the Transferred Corporate Trust Employees as reflected on the
Final Corporate Trust Closing Statement (the "Corporate Trust Pre-Closing
Annual Incentive Bonus Pool"). The allocation to individual Transferred
Corporate Trust Employees of the Corporate Trust Pre-Closing Annual
Incentive Bonus Pool shall be made by BNY consistent with BNY's past
practice, taking into consideration JPM's past practice (and with respect
to any allocation to a Transferred Corporate Trust Employee who is
terminated prior to the BNY Payment Date shall reflect his or her
contributions through the date of termination). The allocated bonus
amounts from the Corporate Trust Pre-Closing Annual Incentive Bonus Pool
shall be paid in cash to Transferred Corporate Trust Employees on the
earlier of the date on which BNY pays annual bonuses to similarly
situated employees of BNY and March 15, 2007 (the earlier date, referred
to herein as the "BNY Payment Date"). If, after the Closing Date and
prior to the BNY Payment Date, a Transferred Corporate Trust Employee's
employment is terminated by BNY under circumstances entitling him or her
to severance, any bonus amount allocated to such employee from the
Corporate Trust Pre-Closing Annual Incentive Bonus Pool shall be paid by
BNY to such employee on the BNY Payment Date. For purposes of the terms
of the Comparable Job Offers to Corporate Trust Business Employees, BNY
has relied upon the Final Corporate Trust Closing Statement including an
accrual for the Corporate Trust Pre-Closing Annual Incentive Bonus Pool.
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(j) Delayed Hire/Transfer Date Employees. (i) Regulatory
Delayed Transfer Employees. Notwithstanding the foregoing, to the extent
that, on the Closing Date, the job function of a Selected Corporate Trust
Business Employee is not permitted to be performed by BNY due to BNY or
JPM having not received a required consent, approval or license from a
third party (including any Governmental Authority) as contemplated by
Section 10.9, such Selected Corporate Trust Business Employee's
commencement of employment with BNY shall be delayed until the date on
which BNY is first able to employ such person in such job function. For
purposes hereof, a Selected Corporate Trust Business Employee whose
employment with BNY is delayed for the reasons described in the foregoing
sentence shall be referred to herein as a "Regulatory Delayed Transfer
Employee." A Regulatory Delayed Transfer Employee shall become a
Transferred Corporate Trust Employee as of the first date on which BNY is
able to employ such person in his or her job function and, to the extent
applicable, references in this Section 13.1 to the "Closing Date" shall
relate to the date on which active employment with BNY commences. Until
such time as a Regulatory Delayed Transfer Employee's active employment
with BNY commences, (i) except as otherwise required by Applicable Law or
upon BNY's consent, JPM shall abide by the limitations set forth in
Sections 11.1(b)(1)(ii) and (iii) and Section 11(b)(2) with regard to the
terms of such Regulatory Delayed Transfer Employee's employment with JPM,
and (ii) the costs incurred by JPM for the employment of such Regulatory
Delayed Transfer Employee shall be reimbursed by BNY to JPM in accordance
with the principles of Section 10.9 of this Agreement; provided that, the
costs reimbursable by BNY to JPM shall also include the cost of Severance
Benefits in the event a Regulatory Delayed Transfer Employee's employment
is terminated by JPM following the Closing Date.
(ii) Delayed Hire Employees. To the extent that,
within fifteen (15) months after the Closing Date (but in no event beyond
the expiration of the Corporate Trust Transition Services Agreement), BNY
employs a Corporate Trust Business Employee (other than a Transferred
Corporate Trust Employee who transfers to BNY on the Closing Date or a
Regulatory Delayed Transfer Employee who shall be covered by Section
13.1(j)(i) above) whose employment with JPM has been uninterrupted from
the period commencing immediately prior to the Closing Date and ending
immediately prior to the date active employment with BNY commences, such
employee shall become a Transferred Corporate Trust Employee as of the
date active employment with BNY commences and, to the extent applicable,
references in this Section 13.1 to the "Closing Date" shall relate to the
date active employment with BNY commences.
(k) WARN Act. The parties hereto agree to cooperate in
good faith, including by sharing information about terminations of
employment in a timely manner, to determine whether any notification may
be required under the Worker Adjustment and Retraining Notification Act
of 1988 or any similar state or local law (collectively, the "WARN Act")
as a result of the transactions contemplated by this Agreement. BNY
shall be responsible for providing any notice (or pay in lieu of notice)
required pursuant to the WARN Act with respect to a layoff or plant
closing involving Transferred Corporate Trust Employees that occurs on or
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after the Closing Date. Subject to Section 13.1(e)(ii), JPM shall be
responsible for providing any such notice (or pay in lieu of notice) with
respect to a layoff or plant closing occurring prior to, on or after the
Closing Date and involving Corporate Trust Business Employees who do not
become Transferred Corporate Trust Employees; provided that, to the
extent such layoff or plant closing arises due to the termination of (or
the provision of WARN notice to) Corporate Trust Business Employees who
BNY has identified as Selected Corporate Trust Business Employee but to
whom BNY did not ultimately make a Comparable Job Offer as and when
contemplated by Section 13.1(a), BNY shall reimburse JPM for the WARN
related costs incurred by JPM during any portion of the period of notice
(or pay in lieu of notice) from and after the Closing Date.
(l) Employee Communications. Any communications by BNY
with the Corporate Trust Business Employees prior to the Closing Date
shall be subject to and in compliance with the terms of this Agreement.
Written communications from BNY to Corporate Trust Business Employees
shall be subject to review, comment and approval by JPM. JPM shall not
make any promises or commitments to the Corporate Trust Business
Employees with respect to employment by BNY or the terms and conditions
thereof.
(m) No Third-Party Rights. No provision of this Section
13.1 shall create any third party beneficiary rights in any Corporate
Trust Business Employee (including any beneficiary or dependent thereof).
Nothing contained herein shall prevent BNY from terminating the
employment of any Transferred Corporate Trust Employee or amending or
terminating the terms of any benefit plan.
(n) Training. JPM shall permit BNY to train the Corporate
Trust Business Employees to whom BNY intends to make offers of employment
before the Closing Date with regard to BNY's operations, policies and
procedures at BNY's sole cost and expense, including without limitation
any overtime pay due to employees. At BNY's election, this training may
take place during or outside of business hours; provided, however, that
any training that occurs shall be conducted in a manner not unreasonably
disruptive to the Corporate Trust Business.
(o) Corporate Trust Business Retention. JPM and BNY agree
to the provision of retention amounts to Corporate Trust Business
Employees and the JPM employees providing services under the Corporate
Trust Transition Services Agreement, as specified in Schedule 13.1(o).
Section 13.2 Banking Business. (a) Offers of Employment.
Commencing on the date hereof and ending ninety (90) calendar days
hereafter, BNY shall provide JPM with reasonable access to each of the
Banking Business Employees. On or prior to the end of such ninety-(90)-
day period, JPM shall provide BNY with a list of those Banking Business
Employees to whom JPM will make a Comparable Job Offer (the "Selected
Banking Business Employees"). Subject to Applicable Law, at least thirty
(30) days (unless an earlier date is required by Applicable Law) prior to
the Closing Date and effective as of the Closing Date, JPM shall make,
and shall use reasonable best efforts to cause to be accepted, a
Comparable Job Offer to all Selected Banking Business Employees. A
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Comparable Job Offer may be conditioned upon (i) completing a standard
and customary written employment application with JPM and (ii) satisfying
pre-employment screening requirements, except that drug testing,
fingerprinting and a criminal background check shall be considered
satisfied to the extent BNY reaffirms to JPM the representation made in
the last sentence of Section 8.17(a) (the "JPM Job Offer Condition"). The
Selected Banking Business Employees (and any other Banking Business
Employees) who (i) accept JPM's offer of employment and satisfy the JPM
Job Offer Condition or (ii) otherwise become employees of JPM by
operation of Applicable Law are referred to herein as the "Transferred
Banking Employees." JPM's employment of the Transferred Banking
Employees shall be deemed to commence at 12:01 a.m. on the Closing Date,
without regard to whether the Transferred Banking Employee is actively at
work on the Closing Date in the case of an employee who on the Closing
Date is absent from work due to a vacation, jury duty, funeral leave or
personal day. Notwithstanding the foregoing, to the extent that a
Banking Business Employee who has accepted JPM's offer is not available
to perform services on the Closing Date because on the Closing Date such
employee is on sick leave, short or long-term disability, military leave,
leave of absence under the Family Medical Leave Act or other leave of
absence approved by BNY (other than a vacation, jury duty, funeral leave
or personal day), he or she shall remain an employee of BNY (except as
may otherwise be provided by Applicable Law); provided that JPM shall
hire such Banking Business Employee if such Employee returns to work no
later than the date that is the earlier of the scheduled return date
(including any approved extensions thereto) and six months from the date
of commencement of such leave and, for purposes of this Agreement, such
Employee shall become a Transferred Banking Employee as of the date
active employment with JPM commences and, to the extent applicable,
references in this Section 13.2 to the "Closing Date" shall relate to the
date on which active employment commences. Those Banking Business
Employees who do not receive, or do not accept, a Comparable Job Offer
from JPM, and those Banking Business Employees whose employment does not
transfer to JPM by operation of Applicable Law, shall not be considered
Transferred Banking Employees for any purpose of this Agreement.
(b) Termination of Employment with BNY. As of the Closing
Date, the Transferred Banking Employees shall cease active participation
in each Banking Employee Plan. Except as otherwise expressly provided in
this Section 13.2 (or as otherwise provided by Applicable Law), BNY shall
retain all assets and liabilities for the Banking Business Employees
under the Banking Employee Plans. Except as otherwise required by
Applicable Law, BNY shall be liable for all eligible claims for benefits
under the Banking Employee Plans that are welfare plans that are incurred
by the Transferred Banking Employees prior to the Closing Date. For
purposes of this Agreement, the following claims shall be deemed to be
incurred as follows: (i) life, accidental death and dismemberment,
business travel accident, short-term disability and workers compensation
insurance benefits, upon the event giving rise to such benefits;
(ii) health, vision, dental and/or prescription drug benefits, on the
date such services, materials or supplies were provided; and (iii) long-
term disability benefits, on the eligibility date determined by the long-
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term disability carrier for the plan in which the individual
participates. Prior to the Closing Date, BNY shall amend the applicable
BNY equity incentive and compensation plans to provide for the vesting of
equity incentive awards held by the Transferred Banking Employees and the
deferred bonus accounts of the Transferred Banking Employees as set forth
in Schedule 13.2(b).
(c) Benefits Following the Closing Date. Effective as of
the Closing Date, JPM shall provide the Transferred Banking Employees
with the same employee benefit plans and programs as those that are
provided to similarly situated employees of JPM (both by job
classification or status and by geographic location). For purposes of
determining (i) eligibility to participate in and vesting under any
employee benefit plan of JPM or its Affiliates, (ii) the banking
privileges and perquisites applicable to the Transferred Banking
Employees and (iii) retirement eligibility under any JPM plan providing
for the grant of equity awards, and for benefit accrual purposes only for
vacation, sickness benefits and severance benefits (if any), each
Transferred Banking Employee shall be credited with the years of service
he or she has been credited with under the comparable Banking Employee
Plans; provided that such service shall not be recognized for purposes of
(i) grandfathering, benefit accruals and/or level of pay credits under
any JPM defined benefit retirement plan and (ii) retiree medical benefits
(but it shall be recognized for access only retiree medical). JPM shall
(i) waive any preexisting conditions and waiting periods under the
welfare benefit plans of JPM that provide healthcare benefits in which
the Transferred Banking Employees are eligible to participate to the same
extent that such conditions and waiting periods were waived under the
comparable Banking Employee Plan, and (ii) subject to BNY providing JPM
with the applicable information with respect to each Transferred Banking
Employee in a form that JPM determines is administratively feasible to
take into account under its plans, cause such plans (other than HMOs) to
honor any expenses incurred by such Banking Employees and their eligible
dependents under Banking Employee Plans that are healthcare benefit plans
during the portion of the calendar year in which they become employees of
JPM for purposes of satisfying applicable deductible, co-insurance,
maximum out-of-pocket, and similar expenses, to the same extent that such
expenses were recognized under the comparable Banking Employee Plan.
(d) COBRA. BNY shall be responsible for the administration
of and shall retain any and all obligations and liabilities for COBRA
continuation coverage with respect to Transferred Banking Employees and
their dependents and beneficiaries for "qualifying events" occurring on
or prior to the Closing Date, and JPM shall be responsible for all
obligations and liabilities for COBRA continuation coverage for
Transferred Banking Employees and their dependents and beneficiaries with
respect to "qualifying events" occurring after the Closing Date. BNY
shall retain any and all obligations and liabilities for COBRA
continuation coverage for all Banking Business Employees and their
dependents and beneficiaries who are not Transferred Banking Employees.
(e) Severance. (i) Termination of Transferred Banking
Employees following the Closing Date. JPM shall pay severance and
provide benefits in accordance with the severance schedule set forth on
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Schedule 13.2(e)(i), to each Transferred Banking Employee whose
employment is terminated by JPM without "cause" (as defined under JPM's
policies and practices) within twelve (12) months after the Closing Date,
subject to the execution, delivery and non-revocation of a release of
claims in favor of JPM, BNY and their respective Affiliates.
(ii) Termination of Banking Business Employees
who Do Not Become Transferred Banking Employees. With respect to Banking
Business Employees who do not become Transferred Banking Employees for
any reason (other than due to having rejected a Comparable Job Offer),
whether due to the fact that such Employees were not Selected Banking
Business Employees or due to the fact that they do not transfer
(including, with respect to persons employed outside of the United
States, due to refusal to transfer JPM) under Applicable Law, BNY shall
retain and shall satisfy all Severance Benefits. Except as may otherwise
be required by Applicable Law, neither BNY, JPM nor any of their
respective Affiliates shall pay or provide Severance Benefits to any
Banking Business Employee who receives a Comparable Job Offer from JPM
and does not accept such offer; provided that, if Severance Benefits are
required to be paid or provided under Applicable Law, the cost allocation
provisions of this Section 13.2(e)(ii) shall apply. JPM shall reimburse
BNY for the full cost of any Severance Benefits paid to a Banking
Business Employee who JPM identified as a Selected Banking Business
Employee, but to whom JPM did not ultimately make a Comparable Job Offer.
Nothing in this Section 13.2(e)(ii) is intended to conflict with the
provisions of Section 13.2(k), but in the event of an inconsistency,
Section 13.2(e)(ii) shall govern. Subject to Applicable Law, BNY and JPM
shall cooperate to take commercially reasonable steps to reduce, to the
extent possible, the likelihood that any of the parties will have to pay
Severance Benefits to any Banking Business Employees who do not become
Transferred Banking Employees; provided, however, that, in no event,
shall JPM or BNY be required to find alternative employment for such
employees at JPM or BNY or one of their respective Affiliates.
(f) Retirement Plans. Effective as of the Closing Date, to
the extent permitted by Applicable Law, BNY shall take action to provide
that the account balances and accrued benefits, as applicable, of all
Transferred Banking Employees under the tax-qualified employee savings
plan(s) (the "BNY's Savings Plan") and pension plan(s) that are sponsored
by BNY in the United States in which the Transferred Banking Employees
participated immediately prior to the Closing Date shall vest in full.
JPM shall take all action necessary to permit JPM's tax-qualified
employee savings plan(s) maintained in the United States to, during the
90 day period following the Closing Date, accept rollover contributions
of "eligible rollover distributions" (within the meaning of Section
402(c)(4) of the Code, but excluding any after-tax contributions and
amounts attributable thereto) made to the Transferred Banking Employees
from BNY's Savings Plan. For purposes of this Section, the term
"eligible rollover distribution" shall include (i) the amount of any
unpaid balance of any loan made to a Transferred Banking Employee under
BNY's Savings Plan and (ii) the promissory note (or other documentation)
evidencing such loan. In addition and subject to the occurrence of the
Closing Date, in substitution for the 2% contribution and match under
BNY's Savings Plan, prior to December 31, 2006, BNY shall pay the
Transferred Banking Employees an amount in cash equal to 2% of each such
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Employee's compensation (as determined for this purpose under the terms
of BNY's Savings Plan) earned through the Closing Date for the year in
which the Closing Date occurs. Prior to the Closing Date, BNY shall take
all action necessary to effectuate the agreement set forth on Schedule
13.2(f).
(g) Vacation Time. For the remainder of the calendar year
during which the Closing Date occurs, a Transferred Banking Employee
shall be entitled to vacation time benefits pursuant to the terms of
BNY's vacation time policy as in effect on the Closing Date (subject to
ordinary course limits on vacation scheduling), with full recognition of
and credit for his or her accrued and unused vacation time for the
portion of such calendar year ending as of the Closing Date (except to
the extent a Transferred Banking Employee receives a cash payment in
satisfaction of accrued and unused vacation time as provided in the
following sentence) and with accruals for the remaining portion of such
calendar year in accordance with BNY's vacation time policy as in effect
on the Closing Date. Notwithstanding the foregoing, to the extent
Applicable Law requires that in connection with the transaction accrued
and unused vacation time be satisfied through a cash payment, as soon as
reasonably practicable following the Closing Date, BNY shall pay to each
applicable Transferred Banking Employee an amount in cash in respect of
all unused vacation time that has been accrued with respect to such
Employee through the Closing Date, and JPM shall have no liability with
respect thereto. With respect to calendar years commencing after the
calendar year in which the Closing Date occurs, Transferred Banking
Employees shall be eligible for vacation time benefits in accordance with
JPM's vacation time policy applicable to similarly situated employees of
JPM.
(h) Assumption of Banking Employment Agreements. Effective
as of the Closing Date, JPM shall assume (and shall have taken all action
required to effectuate such assumption) all Banking Employment Agreements
set forth on Schedule 8.17(b) with the Transferred Banking Employees.
(i) 2006 Annual Incentives for Pre-Closing Period. JPM
shall pay the Transferred Banking Employees, as a group, incentive
bonuses with respect to the portion of the calendar year commencing on
January 1, 2006 and ending on the Closing Date in an aggregate amount of
at least the amount accrued in respect of annual bonuses for the
Transferred Banking Employees as reflected on the Final Banking Closing
Statement (the "Banking Pre-Closing Annual Incentive Bonus Pool"). The
allocation to individual Transferred Banking Employees of the Banking
Pre-Closing Annual Incentive Bonus Pool shall be made by JPM consistent
with JPM's past practice, taking into consideration BNY's past practice
(and with respect to any allocation to a Transferred Banking Employee who
is terminated prior to the JPM Payment Date shall reflect his or her
contributions through the date of termination). The allocated bonus
amounts from the Banking Pre-Closing Annual Incentive Bonus Pool shall be
paid in cash to Transferred Banking Employees on the earlier of the date
on which JPM pays annual bonuses to similarly situated employees of JPM
and March 15, 2007 (the earlier date, referred to herein as the "JPM
Payment Date"). If, after the Closing Date and prior to the JPM Payment
Date, a Transferred Banking Employee's employment is terminated by JPM
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under circumstances entitling him or her to severance, any bonus amount
allocated to such employee from the Banking Pre-Closing Annual Incentive
Bonus Pool shall be paid by JPM to such employee on the JPM Payment Date.
For purposes of the terms of the Comparable Job Offers to Banking
Business Employees, JPM has relied upon the Final Banking Closing
Statement including an accrual for the Banking Pre-Closing Annual
Incentive Bonus Pool.
(j) Delayed Hires. To the extent that, within fifteen (15)
months after the Closing Date (but in no event beyond the expiration of
the Banking Transition Services Agreement), JPM employs a Banking
Business Employee (other than a Transferred Banking Employee who
transfers to BNY on the Closing Date) whose employment with BNY has been
uninterupted from the period commencing immediately prior to the Closing
Date and ending immediately prior to the date active employment with JPM
commences), such Employee shall become a Transferred Banking Employee as
of the date active employment with JPM commences and, to the extent
applicable, references in this Section 13.2 to the "Closing Date" shall
relate to the date active employment with JPM commences.
(k) WARN Act. The parties hereto agree to cooperate in
good faith, including by sharing information about terminations of
employment in a timely manner, to determine whether any notification may
be required under the WARN Act as a result of the transactions
contemplated by this Agreement. JPM shall be responsible for providing
any notice (or pay in lieu of notice) required pursuant to the WARN Act
with respect to a layoff or plant closing involving Transferred Banking
Employees that occurs on or after the Closing Date. Subject to Section
13.2(e)(ii), BNY shall be responsible for providing any such notice (or
pay in lieu of notice) with respect to a layoff or plant closing
occurring prior to, on or after the Closing Date and involving Banking
Business Employees who do not become Transferred Banking Employees;
provided that, to the extent such layoff or plant closing arises due to
the termination of (or the provision of WARN notice to) Banking Business
Employees who JPM has identified as Selected Banking Business Employee
but to whom JPM did not ultimately make a Comparable Job Offer, as and
when contemplated by Section 13.2(a), JPM shall reimburse BNY for the
WARN related costs incurred by JPM during any portion of the period of
notice (or pay in lieu of notice) from and after the Closing Date.
(l) Employee Communications. Any communications by JPM
with the Banking Business Employees prior to the Closing Date shall be
subject to and in compliance with the terms of this Agreement. Written
communications from JPM to Banking Business Employees shall be subject to
review, comment and approval by BNY. BNY shall not make any promises or
commitments to the Banking Business Employees with respect to employment
by JPM or the terms and conditions thereof.
(m) No Third-Party Rights. No provision of this Section
13.2 shall create any third party beneficiary rights in any Banking
Business Employee (including any beneficiary or dependent thereof).
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Nothing contained herein shall prevent JPM from terminating the
employment of any Transferred Banking Employee or amending or terminating
the terms of any benefit plan.
(n) Training. BNY shall permit JPM to train the Banking
Business Employees who JPM intends to make offers of employment to before
the Closing Date with regard to JPM's operations, policies and procedures
at JPM's sole cost and expense, including without limitation any overtime
pay due to employees. At JPM's election, this training may take place
during or outside of business hours and may take place at BNY's
facilities; provided, however, that any training that occurs shall be
conducted in a manner not unreasonably disruptive to the Banking
Business.
(o) Banking Business Retention. JPM and BNY agree to the
provision of retention amounts to Banking Business Employees and the BNY
employees providing services under the Banking Transition Services
Agreement, as specified in Schedule 13.2(o).
ARTICLE XIV
TAX MATTERS
Section 14.1 Tax Indemnification. (a) Except to the extent
reflected as a liability in the Final Corporate Trust Closing Statement
as agreed upon by BNY and JPM, JPM shall pay or cause to be paid, shall
be liable for, and shall indemnify, defend and hold BNY and its
Affiliates harmless from and against any and all Excluded Corporate Trust
Taxes, other than any liability for Taxes resulting from transactions or
actions taken by BNY on the Closing Date that are properly attributable
to the portion of the Closing Date after the Closing except for
transactions or actions taken in the ordinary course of business, and any
interest and penalties related thereto. Notwithstanding anything to the
contrary in the immediately preceding sentence, JPM shall pay or cause to
be paid, shall be liable for, and shall indemnify, defend and hold BNY
and its Affiliates harmless from and against any Taxes resulting from,
(i) an election under Section 338 of the Code in respect of the sale of
any foreign entity that is a Purchased Corporate Trust Asset and (ii) the
election to be made under Section 338(h)(10) of the Code and any state or
foreign law equivalents pursuant to Section 14.1(e). BNY shall pay or
cause to be paid, shall be liable for, and shall indemnify, defend and
hold JPM and their Affiliates harmless from and against any and all Taxes
relating to the Purchased Corporate Trust Assets or the Assumed Corporate
Trust Liabilities other than Excluded Corporate Trust Taxes that are the
responsibility of JPM under the two immediately preceding sentences.
(b) Except to the extent reflected as a liability in the
Final Banking Closing Statement as agreed upon by BNY and JPM, BNY shall
pay or cause to be paid, shall be liable for, and shall indemnify, defend
and hold JPM and its Affiliates harmless from and against any and all
Excluded Banking Taxes, other than any liability for Taxes resulting from
transactions or actions taken by JPM on the Closing Date that are
properly attributable to the portion of the Closing Date after the
Closing except for transactions or actions taken in the ordinary course
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of business, and any interest and penalties related thereto. JPM shall
pay or cause to be paid, shall be liable for, and shall indemnify, defend
and hold BNY and their Affiliates harmless from and against any and all
Taxes relating to the Purchased Banking Assets or the Assumed Banking
Liabilities other than Excluded Banking Taxes that are the responsibility
of BNY under the immediately preceding sentence.
(c) Payment in full of any amount due from JPM or BNY under
this Section 14.1 shall be made to the affected party in immediately
available funds at least two Business Days before the date payment of the
Taxes to which such payment relates is due, or, if no Tax is payable,
within fifteen days after written demand is made for such payment.
(d) Each Applicable Seller shall indemnify each Applicable
Buyer to the extent that any Taxes are imposed on the Applicable Buyer or
any of its respective Subsidiaries that are attributable to a failure by
such entity to comply with any federal, state, local or foreign Tax
reporting or withholding requirement during the 3-month period beginning
on the Closing Date, if such failure is due to the use by such entity of
any procedure established by the Applicable Seller or any of its
respective Subsidiaries and in place as of the Closing Date for the
solicitation, collection and maintenance of any forms, certifications and
other information or otherwise is due to any form, certification or other
required information in place as of the Closing Date (or the absence of
any such form, certification or information as of the Closing Date),
except to the extent such failure is due to a change in law following the
Closing or to the extent that management of the Applicable Buyer has
actual knowledge following the Closing of such failure.
(e) BNY and JPM shall make or cause to be made a joint
election under Section 338(h)(10) of the Code, and under any similar
provisions of state or foreign law, with respect to the purchase of the
shares of ▇▇▇▇▇▇ Services, Inc. JPM represents to BNY that such shares
meet the requirements of Section 1504(a)(2) of the Code and that ▇▇▇▇▇▇
Services, Inc. will be included for the taxable period that includes the
Closing in the U.S. consolidated federal income tax return for the
affiliated group of which JPM is the common parent. BNY shall prepare,
and BNY and JPM shall on the Closing Date exchange completed and executed
copies of, Internal Revenue Service Form 8023, required schedules
thereto, and any similar state and foreign forms. If any changes are
required in these forms as a result of information which is first
available after the Closing Date, the parties will promptly agree on such
changes.
Section 14.2 Preparation and Filing of Tax Returns. (a)
Corporate Trust Tax Returns.
(1) JPM shall timely prepare and file or shall cause to be
timely prepared and filed (i) any combined, consolidated or unitary
Tax Return that includes JPM or any of its Affiliates and (ii) any
Tax Return relating to the Purchased Corporate Trust Assets for any
Pre-Closing Period.
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(2) BNY shall, except to the extent that such Tax Returns
are the responsibility of JPM under Section 14.2(a)(1), timely
prepare and file or shall cause to be timely prepared and filed all
Tax Returns with respect to the Purchased Corporate Trust Assets.
(3) For any Tax Return for any Corporate Trust Straddle
Period relating to the Purchased Corporate Trust Assets that is the
responsibility of BNY under Section 14.2(a)(2), BNY shall deliver
to JPM for its review, comment and approval (which approval shall
not be unreasonably withheld) a copy of such proposed Tax Return
(accompanied by an allocation between the Pre-Closing Period and
the Post-Closing Period of the Taxes shown to be due on such Tax
Return) at least 40 business days prior to the due date of such Tax
Return (giving effect to any validly obtained extension thereof).
(b) Banking Tax Returns.
(1) BNY shall timely prepare and file or shall cause to be
timely prepared and filed (i) any combined, consolidated or unitary
Tax Return that includes BNY or any of its Affiliates and (ii) any
Tax Return relating to the Purchased Banking Assets for any Pre-
Closing Period.
(2) JPM shall, except to the extent that such Tax Returns
are the responsibility of BNY under Section 14.2(b)(1), timely
prepare and file or shall cause to be timely prepared and filed all
Tax Returns with respect to the Purchased Banking Assets.
(3) For any Tax Return for any Banking Straddle Period Tax
Return relating to the Purchased Banking Assets that is the
responsibility of JPM under Section 14.2(b)(2), JPM shall deliver
to BNY for its review, comment and approval (which approval shall
not be unreasonably withheld) a copy of such proposed Tax Return
(accompanied by an allocation between the Pre-Closing Period and
the Post-Closing Period of the Taxes shown to be due on such Tax
Return) at least 40 business days prior to the due date of such Tax
Return (giving effect to any validly obtained extension thereof).
(c) The provisions of this Section 14.2 shall not apply to
the matters governed by Sections 11.11 and 12.6.
Section 14.3 Refunds, Credits and Carrybacks. (a) JPM shall be
entitled to any refunds or credits of or against any Excluded Corporate
Trust Taxes that are the responsibility of JPM under Section 14.1(a).
BNY shall be entitled to any refunds or credits of or against any Taxes
relating to the Purchased Corporate Trust Assets or the operation of the
Corporate Trust Business or the Assumed Corporate Trust Liabilities,
other than refunds or credits of or against Excluded Corporate Trust
Taxes that are the responsibility of JPM under Section 14.1(a).
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(b) BNY shall be entitled to any refunds or credits of or
against any Excluded Banking Taxes that are the responsibility of BNY
under Section 14.1(b). JPM shall be entitled to any refunds or credits
of or against any Taxes relating to the Purchased Banking Assets or the
operation of the Banking Business or the Assumed Banking Liabilities,
other than refunds or credits of or against Excluded Banking Taxes that
are the responsibility of BNY under Section 14.1(b).
(c) JPM shall promptly forward to BNY or reimburse BNY for
any refunds or credits due BNY (pursuant to the terms of this Article
XIV) after receipt thereof, and BNY shall promptly forward to JPM or
reimburse JPM for any refunds or credits due JPM (pursuant to the terms
of this Article XIV) after receipt thereof.
Section 14.4 Cooperation. Each party hereto shall, and shall
cause its Affiliates to, provide to the other party hereto such
cooperation, documentation and information relating to the Purchased
Corporate Trust Assets and the Purchased Banking Assets as either of them
reasonably may request in (i) filing any Tax Return, amended Tax Return
or claim for refund, (ii) determining a liability for Taxes or an
indemnity obligation under this Article XIV or a right to refund of
Taxes, (iii) conducting any audit, examination, contest, litigation or
other proceeding by or against any Taxing Authority or (iv) determining
an allocation of Taxes between a Pre-Closing Period and Post-Closing
Period. Such cooperation and information shall include providing copies
of all relevant portions of relevant Tax Returns, together with all
relevant portions of relevant accompanying schedules and relevant work
papers, relevant documents relating to rulings or other determinations by
Taxing Authorities and relevant records concerning the ownership and Tax
basis of property and other information, which any such party may
possess. Each party will retain all Tax Returns, schedules and work
papers, and all material records and other documents relating to Tax
matters, of the relevant entities for their respective Tax periods ending
on or prior to the Closing Date until the later of (x) the expiration of
the statute of limitations for the Tax periods to which the Tax Returns
and other documents relate or (y) eight years following the due date
(without extension) for such Tax Returns. Thereafter, the party holding
such Tax Returns or other documents may dispose of them after offering
the other party reasonable notice and opportunity to take possession of
such Tax Returns and other documents at such other party's own expense.
Each party shall make its employees reasonably available on a mutually
convenient basis at its cost to provide explanation of any documents or
information so provided.
Section 14.5 Transfer Taxes.
(a) All excise, sales, use, transfer, real property
transfer, documentary, stamp or similar Taxes, other than any VAT
("Transfer Taxes") that are payable or that arise as a result of the
consummation of the purchase and sale of the Corporate Trust Assets
contemplated by this Agreement shall be borne 50%/50% by each of BNY and
JPM. BNY agrees to timely sign and deliver any certificates or forms as
may be necessary or appropriate to establish an exemption from (or
otherwise reduce), or file Tax Returns with respect to, such Transfer
Taxes. JPM will remit the full amount of any such Transfer Tax shown on
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such Tax Returns to the applicable tax authorities on or before the date
such Transfer Taxes are due (the "Payment Date"). BNY will reimburse JPM
for any Transfer Taxes for which it is liable under this Section 14.5(a)
on the Payment Date in immediately available funds to the extent any such
Transfer Taxes are paid by JPM.
(b) All Transfer Taxes that are payable or that arise as a
result of the consummation of the purchase and sale of the Banking Assets
contemplated by this Agreement shall be borne 50%/50% by each of JPM and
BNY. JPM agrees to timely sign and deliver any certificates or forms as
may be necessary or appropriate to establish an exemption from (or
otherwise reduce), or file Tax Returns with respect to, such Transfer
Taxes. BNY will remit the full amount of any such Transfer Tax shown on
such Tax Returns to the applicable tax authorities on or before the
Payment Date. JPM will reimburse BNY for any Transfer Taxes for which it
is liable under this Section 14.5(b) on the Payment Date in immediately
available funds to the extent any such Transfer Taxes are paid by BNY.
(c) The parties shall attempt in good faith to agree, on or
prior to the Closing Date, on the fair market value of the Owned Banking
Premises, the Corporate Trust Leases and the Banking Leases and shall
prepare and file any Tax Returns required to be filed by them with
respect to Transfer Taxes on a basis consistent with any such agreed
valuation. Any Transfer Taxes that are payable with respect to the
consummation of the purchase and sale of the Corporate Trust Assets or
Banking Assets contemplated by this Agreement shall be prepared in a
manner consistent with the values set forth on Schedule 14.5(c).
(d) Any party shall have the right to seek a refund
of any and all Transfer Taxes paid by it for which it is responsible
pursuant to this Section 14.5 at its own expense (subject to the last
sentence of this Section 14.5(d)). If so requested, the other party
shall use reasonable efforts to cooperate with the party seeking such
refund. Any refund of Transfer Taxes (and any reasonable out-of-pocket
expenses incurred by the parties in obtaining such refund, provided, in
the case of fees and disbursements paid to any accounting firm, such
expenses were incurred after providing reasonable advance notice to and
consulting in good faith with the other party) shall be shared between
the parties in accordance with the portion of such Tax paid by each such
party.
Section 14.6 United Kingdom VAT.
(a) Without prejudice to Section 14.11, the parties will
use reasonable efforts to treat the sale of the Purchased Corporate Trust
Assets in the United Kingdom as a sale of a going concern for UK VAT
purposes and accordingly:
(1) JPM and BNY shall (when required to do so) give notice
of such sale to H.M. Customs & Excise pursuant to paragraph 11 of
Schedule 1 Value Added Tax ▇▇▇ ▇▇▇▇ ("VATA 1994") or paragraph 6 of
the Value Added Tax Regulations 1995 (the "Order") or as otherwise
required by law; and
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(2) JPM shall on Closing make available to BNY, to the
extent related to the Corporate Trust Business, all records
referred to in Section 49 VATA 1994.
(b) Without prejudice to Section 14.11, JPM and BNY shall
use all reasonable endeavors to secure that the sale of the Purchased
Corporate Trust Assets is treated under the Value Added Tax (Special
Provision) Order 1995 as neither a supply of goods nor a supply of
services and JPM and BNY shall promptly agree the form of a letter to be
sent by JPM to H.M. Customs & Excise before Closing seeking confirmation
that the sale is to be so treated.
(c) BNY represents and warrants to JPM that the purchaser
of the Purchased Corporate Trust Assets in the United Kingdom will be an
entity that is registered for UK VAT purposes.
Section 14.7 VAT. Where the sale of any assets (other than
any assets the sale of which falls within the scope of UK VAT) gives rise
to a supply by JPM for purposes of VAT and VAT is chargeable on such
supply for which JPM is required to account to the relevant Taxing
Authority, and the parties can do nothing, and the sale cannot be so
structured (in each case, with reason) as to result in the sale giving
rise to neither a supply of goods nor a supply of services or there being
no VAT being payable in respect of such sale:
(a) JPM shall issue to BNY a valid VAT invoice in respect
of such supply no later than the due date for payment of the stated
consideration for such supply, and within all applicable time limits,
will cause such valid VAT invoice to be complete in all respects and will
not (i) adjust the taxable value of such supply once the VAT invoice in
respect of such supply has been issued to BNY or (ii) make any claim in
relation to such supply pursuant to any equivalent section 36 of the
United Kingdom Valued Added Tax ▇▇▇ ▇▇▇▇ or Part XIX of the Order;
(b) BNY shall promptly apply for a repayment or credit from
the relevant Taxing Authority in respect of such VAT, and BNY shall be
obligated to pay over the amount of such repayment or credit it receives
or utilizes (such amount, the "VAT Repayment Amount") to JPM within 30
days after the date on which it receives such repayment or utilizes such
credit. To the extent that BNY does not receive such repayment or credit
from the relevant Taxing Authority, BNY shall pay to JPM, in addition to
the VAT Repayment Amount, an amount equal to 50% of the excess of the
amount of VAT paid over the VAT Repayment Amount, if any; and
(c) BNY and JPM shall reasonably cooperate to minimize VAT
liability to the extent legally permissible.
Section 14.8 Coordination. Notwithstanding anything in this
Agreement to the contrary, in the event there is a conflict between
Article XIV and any provision contained in any other Article of this
Agreement, Article XIV shall control.
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Section 14.9 Tax Treatment of Payments. JPM, BNY and their
respective Affiliates shall treat any and all payments under this Article
XIV or Article XVII as an adjustment to the Corporate Trust Purchase
Price or the Banking Purchase Price, as applicable, for Tax purposes
unless they are required to treat such payments otherwise by applicable
Tax laws.
Section 14.10 Limitations and Survival. Notwithstanding
anything in this Agreement to the contrary, the indemnification
provisions of Section 14.1 are not subject to the limitations of Section
17.5 hereof and shall survive the Closing until the expiration of the
applicable statutes of limitation.
Section 14.11. Tax-Deferred Exchange. JPM and BNY
acknowledge and agree that they desire and intend to treat all or part of
each of the Corporate Trust Sale and the Banking Sale as a tax-deferred
exchange under Section 1031 of the Code (such an exchange, a "1031
Exchange") for U.S. federal income Tax purposes, provided that beginning
as promptly as reasonably practicable after the date hereof and within 60
days after the Closing Date, the parties shall attempt to agree in good
faith on the extent to which such transactions will be treated as a 1031
Exchange. In the event that the parties are unable to reach such
agreement within such period, each party shall be entitled to determine
and report its own treatment of the Corporate Trust Sale and the Banking
Sale for U.S. federal income Tax purposes. JPM and BNY shall attempt in
good faith to agree on and jointly retain a third-party appraisal firm in
connection with this Section 14.11 and shall equally share all fees and
expenses charged with respect to any such jointly retained appraisal firm
and, unless both parties agree otherwise in writing, shall file all Tax
Returns in a manner consistent with the valuations contained in any such
appraisal.
ARTICLE XV
CLOSING CONDITIONS
Section 15.1 Conditions to Obligations of Each Party to Close.
The respective obligations of each party to effect the transactions
contemplated by this Agreement are subject to the satisfaction or, where
legally permitted, waiver by such party, prior to or at the Closing, of
each of the following conditions:
(a) No statute, rule, regulation, executive order, decree,
ruling, permanent injunction or other permanent order shall have become
effective (and final and nonappealable) permanently restraining,
enjoining or otherwise prohibiting or making illegal the consummation of
the transactions contemplated hereby.
(b) All Government Consents set forth on Schedule 15.1 (the
"Required Government Consents") shall have been obtained, and any
applicable waiting periods relating thereto shall have expired or been
terminated early.
Section 15.2 Conditions to Obligation of BNY to Close. BNY's
obligation to effect the transactions contemplated by this Agreement is
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subject to the satisfaction or waiver (in BNY's sole discretion), prior
to or at the Closing, of each of the following conditions:
(a) Each of the representations and warranties of JPM
contained in Article II and Article VI shall be true and correct as of
the Closing Date as though made on and as of the Closing Date, except (i)
that those representations and warranties which address matters only as
of a particular date shall be true and correct as of such particular
date; and (ii) where the failure of such representations and warranties
in the aggregate to be so true and correct has not had, and would not
reasonably be expected to result in, a Corporate Trust Material Adverse
Effect (disregarding for purposes of this clause (ii) any qualification
in the text of the relevant representation or warranty as to materiality,
Corporate Trust Material Adverse Effect or Knowledge).
(b) Each of the representations and warranties of JPM
contained in Article IX shall be true and correct as of the Closing Date
as though made on and as of the Closing Date, except (i) that those
representations and warranties which address matters only as of a
particular date shall be true and correct as of such particular date; and
(ii) where the failure of such representations and warranties in the
aggregate to be so true and correct has not had, and would not reasonably
be expected to result in, a JPM Material Adverse Effect (disregarding for
purposes of this clause (ii) any qualification in the text of the
relevant representation or warranty as to materiality, JPM Material
Adverse Effect or Knowledge).
(c) Each of the obligations of JPM to be performed on or
before the Closing Date pursuant to the terms of this Agreement shall
have been duly and fully performed in all material respects on or before
the Closing Date.
(d) BNY shall have received at the Closing a certificate
dated the Closing Date and validly executed on behalf of JPM by an
appropriate officer certifying that the conditions specified in Sections
15.2(a), 15.2(b) and 15.2(c) have been satisfied.
(e) The Related Agreements shall have each been executed
and delivered to BNY by JPM and each of its Subsidiaries to the extent
that JPM or such Subsidiary is a signatory thereto.
Section 15.3 Conditions to Obligation of JPM To Close. JPM's
obligation to effect the transactions contemplated by this Agreement is
subject to the satisfaction or waiver (in JPM's sole discretion), prior
to or at the Closing, of each of the following conditions:
(a) Each of the representations and warranties of BNY
contained in Article VII shall be true and correct as of the Closing Date
as though made on and as of the Closing Date, except (i) that those
representations and warranties which address matters only as of a
particular date shall be true and correct as of such particular date; and
(ii) where the failure of such representations and warranties in the
aggregate to be so true and correct has not had, and would not reasonably
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be expected to result in, a BNY Material Adverse Effect (disregarding for
purposes of this clause (ii) any qualification in the text of the
relevant representation or warranty as to materiality, BNY Material
Adverse Effect or Knowledge).
(b) Each of the representations and warranties of BNY
contained in Article III and Article VIII shall be true and correct as of
the Closing Date as though made on and as of the Closing Date, except (i)
that those representations and warranties which address matters only as
of a particular date shall be true and correct as of such particular
date; and (ii) where the failure of such representations and warranties
in the aggregate to be so true and correct has not had, and would not
reasonably be expected to result in, a Banking Material Adverse Effect
(disregarding for purposes of this clause (ii) any qualification in the
text of the relevant representation or warranty as to materiality,
Banking Material Adverse Effect or Knowledge).
(c) Each of the obligations of BNY to be performed on or
before the Closing Date pursuant to the terms of this Agreement shall
have been duly and fully performed in all material respects on or before
the Closing Date.
(d) JPM shall have received at the Closing a certificate
dated the Closing Date and validly executed on behalf of BNY by an
appropriate officer certifying that the conditions specified in Sections
15.3(a), 15.3(b) and 15.3(c) have been satisfied.
(e) The Related Agreements have each been executed by and
delivered to JPM by BNY and each of its Subsidiaries to the extent that
BNY or such Subsidiary is a signatory thereto.
(f) (i) The Non-Prosecution Agreement shall not have been
amended or modified (or proposed to be amended or modified) in any manner
that causes, or would reasonably be expected to cause, the Non-
Prosecution Agreement to apply to JPM or any of its Affiliates or, in
each case following the Closing, the Purchased Banking Assets, the
Assumed Banking Liabilities or the Banking Business; (ii) neither the
Department of Justice nor any U.S. Attorney's Office shall have asserted
that (or shall have commenced an inquiry or investigation to ascertain
whether) the Non-Prosecution Agreement may apply, in whole or in part, to
JPM or any of its Affiliates or, in each case following the Closing, the
Purchased Banking Assets, the Assumed Banking Liabilities or the Banking
Business; and (iii) neither BNY nor any of its Affiliates shall have
taken any action, or omitted to take any action, inconsistent with their
respective obligations under the Non-Prosecution Agreement that has
caused or would reasonably be expected to cause JPM or any of its
Affiliates to incur any liability under, or become subject to, the Non-
Prosecution Agreement.
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ARTICLE XVI
TERMINATION
Section 16.1 Termination. This Agreement may be terminated at
any time prior to the Closing Date:
(a) by mutual written consent of JPM and BNY;
(b) by JPM or BNY if (i) any Governmental Authority that
must grant a Required Government Consent has denied such Required
Government Consent, and such denial has become final and nonappealable or
(ii) any Governmental Authority of competent jurisdiction shall have
issued a final nonappealable order enjoining or otherwise prohibiting the
consummation of the transactions contemplated by this Agreement, unless,
in either case, such denial of approval or issuance of such order arises
out of, or results from, a material breach by the party seeking to
terminate this Agreement of any representation, warranty, covenant or
agreement of such party in this Agreement;
(c) by JPM or BNY, if the Closing shall not have occurred
on or before the date that is nine (9) months after the date of this
Agreement; unless the failure of the Closing to occur by such date arises
out of, or results from, a material breach by the party seeking to
terminate this Agreement of any representation, warranty, covenant or
agreement of such party in this Agreement; and
(d) (i) by JPM, if BNY has breached any of its covenants
or agreements or any of its representations or warranties contained in
this Agreement, which breach, individually or in the aggregate, would
cause the conditions set forth in Section 15.3(a), 15.3(b) or 15.3(c) to
not be satisfied, and such breach is not cured within forty-five (45)
days following written notice to BNY or cannot, by its nature, be cured
prior to the date that is nine (9) months after the date of this
Agreement; provided that JPM is not then in material breach of any
representation, warranty, covenant or other agreement contained in this
Agreement, or (ii) by BNY, if JPM has breached any of its covenants or
agreements or any of its representations or warranties contained in this
Agreement, which breach, individually or in the aggregate, would cause
the conditions set forth in Section 15.2(a), 15.2(b) or 15.2(c) to not be
satisfied, and such breach is not cured within forty-five (45) days
following written notice to JPM or cannot, by its nature, be cured prior
to the date that is nine (9) months after the date of this Agreement;
provided that BNY is not then in material breach of any representation,
warranty, covenant or other agreement contained in this Agreement.
Section 16.2 Effect of Termination. In the event of
termination of this Agreement as provided in Section 16.1, this Agreement
shall forthwith become void and have no effect, and none of BNY, JPM, any
of their respective Affiliates or any of the officers, directors or
stockholders of any of them shall have any liability of any nature
whatsoever hereunder, or in connection with the transactions contemplated
hereby, except (i) the confidentiality provisions of Sections 10.1 and
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Section 10.7 shall survive any termination of this Agreement, and (ii)
notwithstanding anything to the contrary contained in this Agreement,
neither JPM nor BNY shall be relieved or released from any liabilities or
damages arising out of its willful breach of any provision of this
Agreement.
ARTICLE XVII
INDEMNIFICATION
Section 17.1 Survival of Representations and Warranties. The
representations and warranties set forth herein (other than the
representations and warranties contained in Section 6.21 and Section
8.31, which shall survive until the expiration of the applicable statute
of limitations, giving effect to any extensions thereof) shall survive
the Closing until the two-year anniversary of the Closing Date; provided
that the period covered by such representations and warranties shall not
be deemed to include any period on or after the Closing Date. Those
covenants that contemplate or may involve actions to be taken or
obligations in effect after the Closing shall survive in accordance with
their terms. Notwithstanding anything to the contrary herein, no Person
shall have any right or obligation with respect to indemnification with
respect to Taxes except to the extent expressly set forth in Article XIV,
and no other provision in this Article XVII (including no provision in
Sections 17.2, 17.3, 17.4, 17.5, 17.6 and 17.7) shall apply, or provide
any rights or obligations, with respect to indemnification relating to
Taxes (the provisions for which are set forth in and shall be governed
exclusively by Article XIV). In the event of any conflict between any
provision in Article XIV and any provision in Article XVII, the provision
in Article XIV shall govern.
Section 17.2 Indemnification of BNY Indemnified Parties.
Subject to Section 17.4 hereof, JPM hereby agrees, from and after the
Closing, to indemnify, defend, save and hold harmless BNY and its
Affiliates, each of their respective officers, directors, employees and
agents, and each of the heirs, executors, successors and assigns of the
foregoing (collectively, the "BNY Indemnified Parties"), from and against
any and all Damages, including reasonable out-of-pocket attorneys' and
other professional fees (including such fees and expenses related to the
enforcement of this Agreement), to the extent resulting from, arising out
of or related to:
(a) any breach by JPM of any representation or warranty
under Article VI (disregarding any qualification in the text of the
relevant representation or warranty as to materiality, Corporate Trust
Material Adverse Effect or Knowledge, other than any such qualification
set forth in Section 6.5 (Litigation and Related Matters), 6.7(b)
(Absence of Undisclosed Liabilities; No Material Adverse Change) or 6.14
(Corporate Trust Financial Information));
(b) any breach by JPM of any representation or warranty
under Article IX (disregarding any qualification in the text of the
relevant representation or warranty as to materiality, JPM Material
Adverse Effect or Knowledge);
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(c) any breach by JPM of any covenant or agreement under
this Agreement or the Related Agreements, or any non-fulfillment by JPM
of any obligation under this Agreement or Related Agreements;
(d) the Excluded Corporate Trust Liabilities (including,
for the avoidance of doubt, with respect to the Transferred Entities, any
liability of the Transferred Entity that would have been an Excluded
Corporate Trust Liability pursuant to Section 2.2(b) if the assets of the
Transferred Entity had been purchased, and their liabilities assumed, by
BNY under this Agreement);
(e) all out-of-pocket expenses, including reasonable fees
and expenses of counsel, that are incurred by BNY or any of its
Subsidiaries in connection with the default, bankruptcy or insolvency of
any counterparty to a Corporate Trust Agreement if any such condition
exists at or prior to the Closing Date; and
(f) except to the extent that BNY is obligated to indemnify
the JPM Indemnified Parties as set forth in Section 17.3(c), the Assumed
Banking Liabilities and the conduct of the Banking Business after the
Closing.
Section 17.3 Indemnification of JPM Indemnified Parties.
Subject to Section 17.4 hereof, BNY hereby agrees, from and after the
Closing, to indemnify, defend, save and hold harmless JPM, its
Affiliates, each of their respective officers, directors, employees and
agents, and each of the heirs, executors, successors and assigns of the
foregoing (collectively, the "JPM Indemnified Parties" and together with
the BNY Indemnified Parties, the "Indemnified Parties"), from and against
any and all Damages, including reasonable out-of-pocket attorneys' and
other professional fees (including such fees and expenses related to the
enforcement of this Agreement), to the extent resulting from, arising out
of or related to:
(a) any breach by BNY of any representation or warranty
under Article VII (disregarding any qualification in the text of the
relevant representation or warranty as to materiality, BNY Material
Adverse Effect or Knowledge);
(b) any breach by BNY of any representation or warranty
under Article VIII (disregarding any qualification in the text of the
relevant representation or warranty as to materiality, Banking Material
Adverse Effect or Knowledge, other than any such qualification set forth
in Section 8.5 (Litigation and Related Matters), 8.7(b) (Absence of
Undisclosed Liabilities; No Material Adverse Change) or 8.24(a) (Banking
Financial Information));
(c) any breach by BNY of any covenant or agreement under
this Agreement or the Related Agreements, or any non-fulfillment by BNY
of any obligation under this Agreement or Related Agreements;
(d) the Excluded Banking Liabilities; and
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(e) except to the extent that JPM is obligated to indemnify
the BNY Indemnified Parties as set forth in Section 17.2(c), the Assumed
Corporate Trust Liabilities and the conduct of the Corporate Trust
Business after the Closing.
Section 17.4 Claims. (a) Third-Party Claims. If a claim
shall be made or action brought by a third party with respect to a matter
referred to in this Article XVII against an Indemnified Party, such
Indemnified Party shall, in the case of a BNY Indemnified Party, promptly
notify JPM and in the case of a JPM Indemnified Party, promptly notify
BNY (as the case may be, the "Indemnifying Party"), in writing, setting
forth the particulars of such claim or action, and the Indemnifying Party
shall assume the defense thereof. No such claim or action shall be
settled by the Indemnifying Party without the Indemnified Party's prior
written consent; provided, however, that no such prior written consent of
the Indemnified Party shall be required to any proposed settlement if
such proposed settlement involves only the payment of money by the
Indemnifying Party and includes as an unconditional term thereof the
granting by the person asserting such claim or bringing such action of an
unconditional release from liability to all Indemnified Parties with
respect to such claim. If (i) the Indemnifying Party shall not have
employed counsel within a reasonable time after such notice of
commencement of any such action, or (ii) the Indemnified Party shall have
reasonably concluded (on the advice of counsel) that there are likely to
be material defenses available to it that are different from, additional
to or in conflict with those available to the Indemnifying Party, then
the Indemnified Party shall have the right to employ one separate firm of
counsel and the legal and other expenses incurred by the Indemnified
Party, including the reasonable fees and expenses of such separate
counsel, shall be borne by the Indemnifying Party.
(b) Direct Claims. Each party hereto also agrees that any
direct claim which such party may bring against any other party hereto
under the provisions of this Agreement shall be governed exclusively by
the provisions of this Article XVII, except as to any claim related to
Taxes, which shall be governed by Article XIV.
Section 17.5 Limitations on Indemnity. (a) Limitations
Relating to Corporate Trust Representations and Warranties.
Notwithstanding anything contained in this Agreement to the contrary:
(1) (i) JPM shall not be liable for any amounts for which
BNY Indemnified Parties are otherwise entitled to indemnification
pursuant to Section 17.2(a) for any individual Damages claim less
than $25,000 (each, a "Corporate Trust de minimis loss") or until
the amount for which BNY Indemnified Parties are (but for this
Section 17.5(a)(1)) entitled to indemnification under all such
claims for indemnification under Section 17.2(a) in the aggregate
(excluding any individual claim less than the Corporate Trust de
minimis loss) exceeds on a cumulative basis $15,000,000 (the
"Corporate Trust Threshold"), and then only to the extent of such
excess; and (ii) JPM shall not be required to make indemnification
payments pursuant to Section 17.2(a) to the extent indemnification
payments hereunder would exceed in the aggregate $200,000,000 (the
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"Maximum Indemnification Amount"); provided, however, that (A) the
limitation on indemnification provided for in this Section
17.5(a)(1) shall not apply to any claim for indemnification under
Section 17.2(a) as a result of a breach of Section 6.6 (Brokers)
and (B) to the extent that a Damage is indemnifiable under Section
17.2(b), 17.2(c), 17.2(d) or 17.2(e), the amount of such Damages
shall not be subject to (or counted with respect to) the Corporate
Trust Threshold or the Maximum Indemnification Amount.
(2) (i) BNY shall not be liable for any amounts for which
JPM Indemnified Parties are otherwise entitled to indemnification
pursuant to Section 17.3(a) for any individual Damages claim less
than the Corporate Trust de minimis loss or the amount for which
JPM Indemnified Parties are (but for this Section 17.5(a)(2))
entitled to indemnification under all such claims for
indemnification under Section 17.3(a) in the aggregate (excluding
any individual claim less than the Corporate Trust de minimis loss)
exceeds on a cumulative basis the Corporate Trust Threshold, and
then only to the extent of such excess, and (ii) BNY shall not be
required to make indemnification payments pursuant to
Section 17.3(a) to the extent indemnification payments hereunder
would exceed in the aggregate the Maximum Indemnification Amount;
provided, however, that (A) the limitation on indemnification
provided for in this Section 17.5(a)(2) shall not apply to any
claim for indemnification under Section 17.3(a) as a result of a
breach of Section 7.6 (Brokers) and (B) to the extent that a Damage
is indemnifiable under Section 17.3(b), 17.3(c), 17.3(d) or
17.3(e), the amount of such Damages shall not be subject to (or
counted with respect to) the Corporate Trust Threshold or the
Maximum Indemnification Amount.
(b) Limitations Relating to Banking Representations and
Warranties. Notwithstanding anything contained in this Agreement to the
contrary:
(1) (i) BNY shall not be liable for any amounts for which
JPM Indemnified Parties are otherwise entitled to indemnification
pursuant to Section 17.3(b) for any individual Damages claim less
than $25,000 (each a "Banking de minimis loss") or until the amount
for which JPM Indemnified Parties are (but for this Section
17.5(b)(1)) entitled to indemnification under all such claims for
indemnification under Section 17.3(b) in the aggregate (excluding
any individual claim less than the Banking de minimis loss) exceeds
on a cumulative basis $15,000,000 (the "Banking Threshold"), and
then only to the extent of such excess; and (ii) BNY shall not be
required to make indemnification payments pursuant to
Section 17.3(b) to the extent indemnification payments hereunder
would exceed in the aggregate the Maximum Indemnification Amount;
provided, however, that (A) the limitation on indemnification
provided for in this Section 17.5(b)(1) shall not apply to any
claim for indemnification under Section 17.3(b) as a result of a
breach of Section 9.8 (Brokers) and (B) to the extent that a Damage
is indemnifiable under Section 17.3(a), 17.3(c), 17.3(d) or
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17.2(e), the amount of such Damages shall not be subject to (or
counted with respect to) the Banking Threshold or the Maximum
Indemnification Amount.
(2) (i) JPM shall not be liable for any amounts for which
BNY Indemnified Parties are otherwise entitled to indemnification
pursuant to Section 17.2(b) for any individual Damages claim less
than the Banking de minimis loss or the amount for which BNY
Indemnified Parties are (but for this Section 17.5(b)(2)) entitled
to indemnification under all such claims for indemnification under
Section 17.2(b) in the aggregate (excluding any individual claim
less than the Banking de minimis loss) exceeds on a cumulative
basis the Banking Threshold, and then only to the extent of such
excess, and (ii) JPM shall not be required to make indemnification
payments pursuant to Section 17.2(b) to the extent indemnification
payments hereunder would exceed in the aggregate the Maximum
Indemnification Amount; provided, however, that (A) the limitation
on indemnification provided for in this Section 17.5(b)(2) shall
not apply to any claim for indemnification under Section 17.2(b) as
a result of a breach of Section 8.18 (Brokers); and (B) to the
extent that a Damage is indemnifiable under Section 17.2(a),
17.2(c), 17.2(d) or 17.2(e), the amount of such Damages shall not
be subject to (or counted with respect to) the Banking Threshold or
the Maximum Indemnification Amount.
(c) Actual Damages; Waiver of Certain Damages. In
determining the amount to which any Indemnified Party is entitled to
assert a claim for indemnification pursuant to this Article XVII, only
actual Damages, net of all tax benefits and all insurance payments (net
of any applicable deductible), and no consequential, incidental, special,
exemplary or punitive or other special or indirect damages or losses by
such Indemnified Party shall be indemnifiable except as provided in the
definition of Damages. The parties hereto waive any claim to
consequential, incidental, indirect, special, exemplary or punitive
damages relating to direct claims against each other.
(d) Survival of Indemnity. The obligation of JPM and BNY
to indemnify under this Article XVII as to claims covered by Sections
17.2(a), 17.2(b), 17.3(a) and 17.3(b), as applicable, shall expire on the
second anniversary of the Closing Date, and shall not apply to any claims
made after such date, except that the obligation of JPM and BNY to
indemnify with respect to bona fide claims for indemnity made in writing
by BNY Indemnified Parties and JPM Indemnified Parties, as applicable,
within such two-year period shall continue until final resolution of such
claims. The obligation of JPM to indemnify Damages covered by Sections
17.2(c), 17.2(d) and 17.2(e) shall be perpetual, and the obligation of
BNY to indemnify Damages covered by Sections 17.3(c), 17.3(d) and 17.3(e)
shall be perpetual.
(e) No Indemnity for Damages Intentionally Caused by
Indemnified Party. Notwithstanding any other provision herein, in no
event shall any Indemnifying Party be obligated under this Article XVII
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to indemnify any Person otherwise entitled to indemnity hereunder in
respect of any Damages that result from the willful misconduct, bad
faith, gross negligence or intentional acts or omissions of such a
Person.
Section 17.6 Mitigation. (a) If a JPM Indemnified Party shall
suffer or incur Damages to which it is entitled to be indemnified or
recover a loss against a customer or a third party, in whole or in part,
under a Purchased Banking Asset that was transferred to JPM or any of its
Subsidiaries or under any insurance policy or bond, such JPM Indemnified
Party shall use reasonable best efforts to obtain such indemnification or
recovery as promptly as practicable. To the extent that such JPM
Indemnified Party shall have recovered any amount under such
indemnification, the Damages suffered or incurred by such JPM Indemnified
Party shall be reduced by an amount equal to such recovery, and, to the
extent that such recovery occurs after an Indemnifying Party shall have
indemnified the JPM Indemnified Party in respect of such Damages, then
the JPM Indemnified Party shall remit such recovery to the Indemnifying
Party.
(b) If a BNY Indemnified Party shall suffer or incur
Damages to which it is entitled to be indemnified or recover a loss
against a customer or a third party, in whole or in part, under a
Purchased Corporate Trust Asset that was transferred to BNY or any of its
Subsidiaries or under any insurance policy or bond, such BNY Indemnified
Party shall use reasonable best efforts to obtain such indemnification or
recovery as promptly as practicable. To the extent that such BNY
Indemnified Party shall have recovered any amount under such
indemnification, the Damages suffered or incurred by such BNY Indemnified
Party shall be reduced by an amount equal to such recovery, and, to the
extent that such recovery occurs after an Indemnifying Party shall have
indemnified the BNY Indemnified Party in respect of such Damages, then
the BNY Indemnified Party shall remit such recovery to the Indemnifying
Party.
Section 17.7 Remedies Exclusive. Except as otherwise
specifically provided herein or in the case of fraud or willful
misconduct, the remedies provided in this Article XVII shall be the
exclusive remedies of the parties hereto from and after the Closing in
connection with any breach of a representation or warranty, or non-
performance, partial or total, of any covenant or agreement contained
herein except as to Taxes, as to which the provisions of Article XIV
shall control.
ARTICLE XVIII
MISCELLANEOUS
Section 18.1 Entire Agreement; Amendment. All Exhibits
(attached hereto and as executed) and Schedules hereto (including
Schedule A) shall be deemed to be incorporated into and made part of this
Agreement. This Agreement, together with the Exhibits (attached hereto
and as executed) and Schedules hereto, and the Confidentiality Agreement,
contain the entire agreement and understanding among the parties with
respect to the subject matter hereof (and supersede any prior agreements,
arrangements or understandings among the parties with respect to the
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subject matter hereof) and there are no agreements, representations, or
warranties which are not set forth herein. This Agreement may not be
amended or revised except by a writing signed by BNY and JPM.
Section 18.2 Binding Effect; Assignment; No Third-Party
Beneficiaries. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and
assigns. Except as expressly provided herein, this Agreement and all
rights hereunder may not be assigned by any party hereto except by prior
written consent of the other party hereto; provided that each of JPM and
BNY may assign its right to acquire any asset and/or the obligation to
pay all or part of the consideration and to assume any liability to any
wholly owned Subsidiary without the prior written consent of the other
party hereto, and BNY may assign its right to acquire the equity
interests in, and the Purchased Corporate Trust Assets related to, ▇.▇.
▇▇▇▇▇▇ Trust Australia Limited and ▇.▇. ▇▇▇▇▇▇ Institutional Services
Australia Limited to BNY Trust (Australia) Pty Limited without the prior
written consent of JPM; provided, further, that, in each case, no such
assignment by JPM or BNY shall relieve JPM or BNY, as the case may be, of
any of its obligations hereunder. The parties intend that this Agreement
shall not benefit or create any right or cause of action in or on behalf
of any Person other than parties hereto.
Section 18.3 Counterparts. This Agreement may be executed in
any number of counterparts, each of which shall be deemed to be an
original as against any party whose signature appears thereon, and all of
which shall together constitute one and the same instrument. This
Agreement shall become binding when one or more counterparts hereof,
individually or taken together, shall bear the signatures of all of the
parties reflected hereon as the signatories.
Section 18.4 Notices. All notices, request, demands and other
communications required hereunder shall be in writing and shall be deemed
to have been duly given or made if delivered personally, sent by
telefacsimile transmission or telex confirmed in writing within two (2)
Business Days, or sent by registered or certified mail, postage prepaid,
as follows:
If to JPM:
JPMorgan Chase & Co.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: General Counsel
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
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with a copy to:
Wachtell, Lipton, ▇▇▇▇▇ & ▇▇▇▇
▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
If to BNY:
The Bank of New York Company, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: General Counsel
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
and with a copy to:
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Any party may change the address or fax number to which such
communications are to be sent to it by giving written notice of change of
address to the other party in the manner provided above for giving
notice.
Section 18.5 Provisions Separable. The provisions of this
Agreement are independent of and separable from each other, and no
provision shall be affected or rendered invalid or unenforceable by
virtue of the fact that for any reason any other or others of them may be
invalid or unenforceable in whole or in part.
Section 18.6 Expenses. Except as otherwise expressly set
forth herein, all fees and expenses payable in connection with the
consummation of the transactions contemplated by this Agreement shall be
the sole liability of the party incurring such expense.
Section 18.7 Deadlines. If the last day of the time period
for the giving of any notice or the taking of any action required under
this Agreement falls on a Saturday, Sunday or legal holiday or a date on
which banks in the State of New York are authorized by law to close, the
time period for giving such notice or taking such action shall be
extended through the next Business Day following the original expiration
date of such.
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Section 18.8 Scope of Agreements. Neither this Agreement nor
any of the Related Agreements shall create any partnership, joint venture
or other similar arrangement between BNY or any of its Affiliates, on the
one hand, and JPM or any of its Affiliates, on the other hand.
Section 18.9 Delays or Omissions. Any waiver, permit, consent
or approval of any kind or character of any breach or default under this
Agreement, or any waiver of any provision or condition of this Agreement
shall be effective only to the extent specifically set forth in writing.
Notwithstanding any provision set forth herein, no party hereto shall be
required to take any action or refrain from taking any action that would
cause it to violate any Applicable Law, statute, legal restriction,
regulation, rule or order or any Governmental Authority.
Section 18.10 Waiver of Jury Trial. EACH PARTY HERETO HEREBY
WAIVES TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY
ANY OF THEM AGAINST THE OTHER ARISING OUT OF OR IN ANY WAY CONNECTED WITH
THIS AGREEMENT, OR ANY OTHER AGREEMENTS EXECUTED IN CONNECTION HEREWITH,
OR THE ADMINISTRATION THEREOF OR ANY OF THE TRANSACTIONS CONTEMPLATED
HEREIN OR THEREIN. NO PARTY TO THIS AGREEMENT SHALL SEEK A JURY TRIAL IN
ANY LAWSUIT, PROCEEDING, COUNTERCLAIM, OR ANY OTHER LITIGATION PROCEDURE
BASED UPON, OR ARISING OUT OF, THIS AGREEMENT OR ANY RELATED INSTRUMENTS
OR THE RELATIONSHIP BETWEEN THE PARTIES. NO PARTY WILL SEEK TO
CONSOLIDATE ANY SUCH ACTION, IN WHICH A JURY TRIAL HAS BEEN WAIVED, WITH
ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED.
THE PROVISIONS OF THIS SECTION HAVE BEEN FULLY DISCUSSED BY THE PARTIES
HERETO, AND THESE PROVISIONS SHALL BE SUBJECT TO NO EXCEPTIONS. NO PARTY
HAS IN ANY WAY AGREED WITH OR REPRESENTED TO ANY OTHER PARTY THAT THE
PROVISIONS OF THIS SECTION WILL NOT BE FULLY ENFORCED IN ALL INSTANCES.
Section 18.11 Governing Law. The execution, interpretation,
and performance of this Agreement shall be governed by the laws of the
State of New York without giving effect to any conflict of laws provision
or rule (whether of the State of New York or any other jurisdiction) that
would cause the application of the law of any other jurisdiction other
than the State of New York.
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IN WITNESS WHEREOF, each of the parties hereto has caused this
Purchase and Assumption Agreement to be duly executed as an instrument under
seal by its officer thereunto duly authorized as of the date first above
written.
THE BANK OF NEW YORK COMPANY, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇ ▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇ ▇▇▇▇
Title: Vice Chairman
JPMORGAN CHASE & CO.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Chief Executive Officer of
Retail Financial Services
