EXECUTION VERSION
_______________________________________________________________________________
_______________________________________________________________________________
PURCHASE AND ASSUMPTION AGREEMENT
BY AND BETWEEN
THE BANK OF NEW YORK COMPANY, INC.
AND
JPMORGAN CHASE & CO.
__________________________________________________________________
DATED APRIL 7, 2006
__________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS; CONSTRUCTION
Section 1.1 Definitions..................................................1
Section 1.2 Other Definitions...........................................16
Section 1.3 Construction; Absence of Presumption........................20
Section 1.4 Heading.....................................................20
ARTICLE II
PURCHASE AND SALE OF CORPORATE TRUST BUSINESS
Section 2.1 Purchase and Sale of Corporate Trust Assets.................20
Section 2.2 Assumption of Corporate Trust Liabilities...................25
Section 2.3 Corporate Trust Liabilities under this Agreement
and the Corporate Trust Related Agreements..................27
Section 2.4 Untransferrable Appointments................................27
ARTICLE III
PURCHASE AND SALE OF BANKING BUSINESS
Section 3.1 Purchase and Sale of Banking Business.......................27
Section 3.2 Assumption of Banking Liabilities...........................32
Section 3.3 Arrangements with Respect to IRAs and ▇▇▇▇▇.................34
ARTICLE IV
PURCHASE PRICE AND ADJUSTMENTS
Section 4.1 Corporate Trust Closing Payment.............................35
Section 4.2 Corporate Trust Post-Closing Payment........................35
Section 4.3 Banking Closing Payment.....................................37
Section 4.4 Banking Post-Closing Payment................................38
Section 4.5 Adjustment to Payments for Expenses, Prepayments and Fees...40
Section 4.6 Allocation of Purchase Price................................41
ARTICLE V
THE CLOSING
Section 5.1 Closing Time and Place......................................42
Section 5.2 Closing Documents...........................................43
Section 5.3 Delivery of Assets..........................................45
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF JPM RELATING TO CORPORATE TRUST
Section 6.1 Organization................................................45
Section 6.2 Authority; Capacity.........................................46
Section 6.3 No Conflict; Defaults.......................................47
Section 6.4 Consents and Approvals......................................47
Section 6.5 Litigation and Related Matters..............................47
Section 6.6 Brokers.....................................................48
Section 6.7 Absence of Undisclosed Liabilities; No Material
Adverse Change..............................................48
Section 6.8 Property and Equipment......................................48
Section 6.9 Necessary Corporate Trust Permits...........................49
Section 6.10 Purchased Corporate Trust IP & IT Assets....................49
Section 6.11 Governmental Notices........................................49
Section 6.12 Corporate Trust Employees and Benefits......................50
Section 6.13 Labor Contracts and Relations...............................51
Section 6.14 Corporate Trust Agreements and Other Corporate
Trust Contracts.............................................52
Section 6.15 Environmental Matters.......................................53
Section 6.16 Compliance with Laws........................................54
Section 6.17 Corporate Trust Financial Information.......................54
Section 6.18 Books and Records...........................................55
Section 6.19 Corporate Trust Assets......................................55
Section 6.20 Leased Corporate Trust Premises.............................55
Section 6.21 Insurance Coverage..........................................56
Section 6.22 Taxes.......................................................57
Section 6.23 No Prepayment...............................................59
Section 6.24 Information Regarding Corporate Trust Customers
and Relationships...........................................60
Section 6.25 No Other Representations or Warranties......................60
ARTICLE VII
REPRESENTATIONS AND WARRANTIES OF BNY RELATING TO CORPORATE TRUST
Section 7.1 Organization................................................60
Section 7.2 Authority; Capacity.........................................60
Section 7.3 No Conflict; Defaults.......................................61
Section 7.4 Consents and Approvals......................................61
Section 7.5 Litigation and Related Matters..............................61
Section 7.6 Compliance with Laws and Regulations........................61
Section 7.7 Governmental Notices; Regulatory Matters....................62
Section 7.8 Brokers.....................................................62
Section 7.9 Financing...................................................62
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ARTICLE VIII
REPRESENTATIONS AND WARRANTIES OF BNY RELATING TO BANKING
Section 8.1 Organization................................................62
Section 8.2 Authority; Capacity.........................................63
Section 8.3 No Conflict; Defaults.......................................63
Section 8.4 Consents and Approvals......................................63
Section 8.5 Litigation and Related Matters..............................64
Section 8.6 Brokers.....................................................64
Section 8.7 Absence of Undisclosed Liabilities; No Material
Adverse Change..............................................64
Section 8.8 Property and Equipment......................................64
Section 8.9 Necessary Banking Permits...................................65
Section 8.10 Assumed Banking Deposits....................................65
Section 8.11 Loans.......................................................65
Section 8.12 Letters of Credit; Derivative Products......................67
Section 8.13 Banking Contracts...........................................67
Section 8.14 Other Purchased Banking Assets..............................68
Section 8.15 Purchased Banking IP & IT Assets............................68
Section 8.16 Governmental Notices........................................68
Section 8.17 Banking Employees and Benefits..............................69
Section 8.18 Labor Contracts and Relations...............................70
Section 8.19 Investment Products; Personnel..............................70
Section 8.20 Properties and Purchased Banking Assets.....................71
Section 8.21 Title.......................................................71
Section 8.22 Environmental Matters.......................................71
Section 8.23 Derivative Products.........................................72
Section 8.24 Compliance with Laws........................................72
Section 8.25 Banking Financial Information...............................73
Section 8.26 Books and Records...........................................73
Section 8.27 Safe Deposit Boxes..........................................74
Section 8.28 Banking Assets..............................................74
Section 8.29 Leased Banking Premises.....................................74
Section 8.30 Owned Banking Premises......................................75
Section 8.31 Insurance Coverage..........................................76
Section 8.32 Taxes.......................................................76
Section 8.33 Information Regarding Banking Customers
and Relationships...........................................77
Section 8.34 No Other Representations or Warranties......................77
ARTICLE IX
REPRESENTATIONS AND WARRANTIES OF JPM RELATING TO BANKING
Section 9.1 Organization................................................77
Section 9.2 Authority; Capacity.........................................77
Section 9.3 No Conflict; Defaults.......................................78
Section 9.4 Consents and Approvals......................................78
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Section 9.5 Litigation and Related Matters..............................78
Section 9.6 Compliance with Laws and Regulations........................78
Section 9.7 Governmental Notices; Regulatory Matters....................79
Section 9.8 Brokers.....................................................79
ARTICLE X
GENERAL COVENANTS
Section 10.1 Access to Properties and Records Relating
to the Corporate Trust Business.............................79
Section 10.2 Access to Properties and Records Relating
to the Banking Business.....................................80
Section 10.3 Efforts; Regulatory Filings and Other Actions...............81
Section 10.4 Further Assurances..........................................83
Section 10.5 Advice of Changes...........................................83
Section 10.6 Exclusive Dealing...........................................84
Section 10.7 Confidentiality.............................................85
Section 10.8 Publicity; Notices..........................................85
Section 10.9 Transfer of Economic Benefits...............................86
Section 10.10 Execution and Delivery of Related Agreements................88
Section 10.11 Non-Competition and Non-Solicitation Agreements
Relating to Corporate Trust Business........................88
Section 10.12 Non-Competition and Non-Solicitation Agreements
Relating to Banking and Other Businesses....................90
Section 10.13 Updated Schedules...........................................94
Section 10.14 Transition Coordinators; Cooperation with Transition........94
ARTICLE XI
FURTHER AGREEMENTS RELATING TO CORPORATE TRUST
Section 11.1 Conduct of the Corporate Trust Business
Prior to the Closing........................................95
Section 11.2 Conduct of Corporate Trust Business After the Closing.......97
Section 11.3 Corporate Trust Landlord Consents...........................97
Section 11.4 Cooperation Regarding Transition of Products
and Services................................................98
Section 11.5 UCC-1 Assignment and Other Documents........................99
Section 11.6 Use of JPM's Names and Forms................................99
Section 11.7 Transfer of Paying and Authenticating Agencies.............100
Section 11.8 Transfer of Nominee Name...................................100
Section 11.9 Conversion and Conversion Plan.............................100
Section 11.10 Grant of FCS Sublicense....................................101
Section 11.11 Interest Reporting.........................................102
Section 11.12 Withholding................................................102
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ARTICLE XII
FURTHER AGREEMENTS RELATING TO BANKING
Section 12.1 Conduct of the Banking Business Prior to the Closing.......103
Section 12.2 Conduct of Banking Business After the Closing..............105
Section 12.3 Banking Landlord Consents..................................106
Section 12.4 Cooperation Regarding Transition of Products
and Services; Courier Contracts............................107
Section 12.5 UCC-1 Assignment and Other Documents.......................107
Section 12.6 Interest Reporting.........................................108
Section 12.7 Withholding................................................108
Section 12.8 Letters of Credit..........................................108
Section 12.9 Form of Transfer...........................................108
Section 12.10 Data Processing Conversion for the Retail Branches
and Handling of Certain Items..............................109
Section 12.11 Physical Damage to Owned Banking Premises..................110
Section 12.12 Right of First Offer for Excluded Banking Premises.........111
Section 12.13 Termination of Agent Bank Agreement........................113
Section 12.14 Limited License of BNY's Name..............................113
Section 12.15 Bank-At-Work Arrangement; Sublease of Certain
Employee Branches..........................................114
Section 12.16 Information Regarding Banking Customers
and Relationships..........................................114
Section 12.17 Private Banking Earnout....................................114
ARTICLE XIII
EMPLOYMENT AND BENEFIT MATTERS
Section 13.1 Corporate Trust Business...................................115
Section 13.2 Banking Business...........................................122
ARTICLE XIV
TAX MATTERS
Section 14.1 Tax Indemnification........................................128
Section 14.2 Preparation and Filing of Tax Returns......................129
Section 14.3 Refunds, Credits and Carrybacks............................130
Section 14.4 Cooperation................................................130
Section 14.5 Transfer Taxes.............................................131
Section 14.6 United Kingdom VAT.........................................131
Section 14.7 VAT........................................................132
Section 14.8 Coordination...............................................133
Section 14.9 Tax Treatment of Payments..................................133
Section 14.10 Limitations and Survival...................................133
Section 14.11 Tax-Deferred Exchange......................................133
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ARTICLE XV
CLOSING CONDITIONS
Section 15.1 Conditions to Obligations of Each Party to Close...........133
Section 15.2 Conditions to Obligation of BNY to Close...................134
Section 15.3 Conditions to Obligation of JPM To Close...................135
ARTICLE XVI
TERMINATION
Section 16.1 Termination................................................136
Section 16.2 Effect of Termination......................................137
ARTICLE XVII
INDEMNIFICATION
Section 17.1 Survival of Representations and Warranties.................137
Section 17.2 Indemnification of BNY Indemnified Parties.................137
Section 17.3 Indemnification of JPM Indemnified Parties.................138
Section 17.4 Claims.....................................................139
Section 17.5 Limitations on Indemnity...................................139
Section 17.6 Mitigation.................................................142
Section 17.7 Remedies Exclusive.........................................142
ARTICLE XVII
MISCELLANEOUS
Section 18.1 Entire Agreement; Amendment................................142
Section 18.2 Binding Effect; Assignment; No Third-Party
Beneficiaries..............................................143
Section 18.3 Counterparts...............................................143
Section 18.4 Notices....................................................143
Section 18.5 Provisions Separable.......................................144
Section 18.6 Expenses...................................................144
Section 18.7 Deadlines..................................................144
Section 18.8 Scope of Agreements........................................144
Section 18.9 Delays or Omissions........................................144
Section 18.10 Waiver of Jury Trial.......................................145
Section 18.11 Governing Law..............................................145
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SCHEDULES AND EXHIBITS
______________________
SCHEDULES
_________
JPM Disclosure Schedules
BNY Disclosure Schedules
Schedule A
EXHIBITS
________
Exhibit A Corporate Trust Transition Support Agreement
Exhibit B Banking Transition Support Agreement
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This PURCHASE AND ASSUMPTION AGREEMENT, dated as of April 7, 2006, 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
WHEREAS, the parties desire to enter into transactions pursuant to
which (a) JPM will (or will cause its applicable Subsidiaries to) sell the
Purchased Corporate Trust Assets (as defined herein) to BNY, and BNY will assume
the Assumed Corporate Trust Liabilities (as defined herein) from JPM and its
applicable Subsidiaries (the "CORPORATE TRUST SALE"), and (b) BNY will (or will
cause its applicable Subsidiaries to) sell the Purchased Banking Assets (as
defined herein) to JPM, and JPM will assume the Assumed Banking Liabilities (as
defined herein) from BNY (the "BANKING SALE"), in each of cases (a) and (b), on
the terms and subject to the conditions set forth herein;
WHEREAS, in connection with the Corporate Trust Sale, in order to
facilitate an orderly transition of the Corporate Trust Business hereunder, the
parties shall enter into (a) at the Closing, a Servicing Agreement, in a form to
be mutually agreed between BNY and JPM after the date hereof (the "SERVICING
AGREEMENT"), and (b) concurrently with the execution of this Agreement, a
Transition Support Agreement for the Corporate Trust Business, in the form
attached hereto as EXHIBIT A (the "CORPORATE TRUST TRANSITION SUPPORT AGREEMENT"
and together with the Servicing Agreement, the "CORPORATE TRUST RELATED
AGREEMENTS"); and
WHEREAS, in connection with the Banking Sale, in order to facilitate
orderly transitions of the Banking Business hereunder, the parties shall enter
into, concurrently with the execution of this Agreement, a Transition Support
Agreement for the Banking Business, in the form attached hereto as EXHIBIT B
(the "BANKING TRANSITION SUPPORT AGREEMENT" or "BANKING RELATED AGREEMENT" and
together with the Corporate Trust Related Agreements, the "RELATED AGREEMENTS").
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
Section 1.1 DEFINITIONS. For purposes of this Agreement, the
following terms shall have the following meanings:
"ACCRUED INTEREST" shall mean 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, all as set forth in BNY's general ▇▇▇▇▇▇.
"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 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.
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"ASSUMED BANKING DEPOSITS" shall mean all deposits (as defined in 12
U.S.C. ss. 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, IRA 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 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.
3
"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 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.
ss. 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.
4
"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.
"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 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
5
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; and
(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;
PROVIDED, HOWEVER, that "Corporate Trust Business" shall not include any
Excluded JPM Business.
"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 Support 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.
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"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, 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
7
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).
"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.
"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),
8
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).
"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 ▇.▇. ▇▇▇▇▇▇
Trust Australia Limited, any of its Subsidiaries or Longreach CP Limited, and
(iii) any Tax in respect of any affiliated, combined, unitary, or similar group
of which ▇.▇. ▇▇▇▇▇▇ Trust Australia Limited, any of its Subsidiaries or
Longreach CP Limited is or was at any time a member for any Tax purpose.
"EXCLUDED JPM BUSINESS" shall mean 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,
9
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 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 exceeds the amount of funds, collateral
or trust assets held by Corporate Trust Seller, or exceeds the amount of the
issuer's or obligor's legal obligation to Corporate Trust Seller 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, or (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.
"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.
10
"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.
"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.
"IRA" 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.
"▇▇▇▇▇" 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.
11
"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 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).
12
"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.
"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,
13
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 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).
"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.
14
"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.
"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, 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.
15
"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)
Agency Agreement................................................Section 3.3
Agency Period...................................................Section 3.3
Agent Bank Agreement..........................................Section 12.13
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)
Banking Approvals...............................................Section 9.4
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(b)
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
16
Banking Lease Assignments.................................Section 5.2(b)(7)
Banking Leases............................................Section 3.1(a)(2)
Banking License Fee Start Date.............................Section 12.14(b)
Banking Milestone Delay Period.............................Section 12.14(b)
Banking Non-Competition Period.............................Section 10.12(a)
Banking Omnibus Assignment................................Section 5.2(b)(8)
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 Support 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
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 Closing Payment..............................Section 4.1(a)
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)
17
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(b)
Corporate Trust Non-Competition Period.....................Section 10.11(a)
Corporate Trust Omnibus Assignment........................Section 5.2(a)(7)
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 Agreements.................................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 Support Agreement.......................Recitals
Corporate Trust Withholding Obligations....................Section 11.12(a)
Estimated Corporate Trust Net Book Value.....................Section 4.1(a)
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)
FCS IP.........................................................Section 6.10
Final Banking Closing Statement...........................Section 4.4(b)(1)
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)
▇.▇. ▇▇▇▇▇▇ Trust Australia Limited Tax Affiliates..........Section 6.22(d)
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
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JPM's Objection...........................................Section 4.4(b)(2)
JPM's Savings Plan..........................................Section 13.1(f)
Leased Corporate Trust Premises.............................Section 6.20(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)
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)
Regulatory Delayed Transferred Employee.....................Section 13.1(j)
Related Agreements.................................................Recitals
Required Government Consents................................Section 15.1(b)
Restricted Item.............................................Section 10.9(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)
TFM Employees...........................................Section 13.1(e)(ii)
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 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)
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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 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,
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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 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
21
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 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;
(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;
22
(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) all of the assets of ▇▇▇▇▇▇ Services, Inc., a Delaware
corporation;
(12) all of the issued and outstanding equity interest in ▇.▇. ▇▇▇▇▇▇
Trust Australia Limited, an Australian limited company (the "TRANSFERRED
ENTITY");
(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;
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(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)(7), 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;
(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 mark "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;
and
(14) the assets set forth on SCHEDULE 2.1(b)(14).
24
(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 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. ss. 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
25
(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.
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
27
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;
(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,
27
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 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
or leased 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
28
$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 (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;
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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 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, 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, including all cash of the Banking Business held at or in transit
with CDC Systems, Inc., the Brink's Company or Integrated Payment Systems,
Inc., 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;
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(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;
(18) all assets related to the mutual fund and reserve fund sweep
accounts for the Assumed Banking Deposits; and
(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.
(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;
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(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 or in Section 12.15, 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 mark "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); and
(v) all Out-of-Footprint Loans other than the Purchased Out-of-Footprint
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); and
(15) the assets set forth on SCHEDULE 3.1(b)(15).
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;
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(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 and any FAS 91 Fees earned, unbilled and
unearned, or unamortized fees from the Banking Business, in each case which
are 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, 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
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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 IRA and each "employer" who established a Banking Assumed Deposit pursuant
to a ▇▇▇▇▇ plan, regarding the resignation of BNY as IRA custodian or ▇▇▇▇▇ plan
trustee, as applicable. JPM and BNY shall enter into an Agency Agreement
effective as of the Closing Date, in a form reasonably acceptable to each of JPM
and BNY (the "AGENCY AGREEMENT"), pursuant to which BNY shall appoint JPM as
BNY's agent with respect to IRA deposit liabilities and ▇▇▇▇▇ plan deposit
liabilities during the period commencing on the Closing Date and ending on the
date on which BNY's resignation as custodian or trustee, as applicable, can
first become effective in accordance with the terms of the applicable IRA or
▇▇▇▇▇ plan (the "AGENCY PERIOD"). The Agency Agreement shall further provide
that, effective upon termination of the applicable Agency Period, BNY appoints
JPM as successor custodian to such IRA and as successor trustee to such ▇▇▇▇▇
plans for which an alternative successor custodian or trustee has not been
appointed in accordance with the applicable plans attached as a schedule to the
Agency Agreement. Upon such appointment as successor custodian for such IRAs and
as successor trustee for
34
such ▇▇▇▇▇ plans, 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 IRA or ▇▇▇▇▇ 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 CLOSING PAYMENT. (a) On the Closing Date,
in consideration for the purchase of the 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 "CORPORATE TRUST CLOSING PAYMENT") equal to the Corporate Trust Net
Book Value as set forth on the Preliminary Corporate Trust Closing Statement
pursuant to Section 4.2(a) (the "ESTIMATED CORPORATE TRUST NET BOOK VALUE").
(b) 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 PAYMENT. (a) PRELIMINARY
CORPORATE TRUST CLOSING STATEMENT. Not less than five (5) Business Days before
the expected Closing 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
Closing Date (the "PRELIMINARY CORPORATE TRUST CLOSING STATEMENT"), which
Preliminary 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 the Closing Date, JPM
shall deliver to BNY an adjusted closing statement prepared in a manner
consistent with the Preliminary Corporate Trust Closing Statement (the
"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 Closing Date (the "FINAL CORPORATE TRUST NET BOOK VALUE").
(2) Within thirty (30) days following the receipt by BNY of the 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
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("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 the date on which the parties have
agreed upon the 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 is greater than the
Estimated Corporate Trust Net Book Value, then BNY shall pay to JPM an
amount equal to the difference between the Final Corporate Trust Net Book
Value and the Estimated Corporate Trust Net Book Value; and
(ii) if the Final Corporate Trust Net Book Value is less than the
Estimated Corporate Trust Net Book Value, then JPM shall pay to BNY an
amount equal to the difference between the Estimated Corporate Trust Net
Book Value and the Final Corporate Trust Net Book Value;
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
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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 "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 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).
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(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 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
38
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 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.
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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 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.
40
(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. 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 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.
(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 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.
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(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.
ARTICLE V
THE CLOSING
Section 5.1 CLOSING TIME AND PLACE. 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 8:00 p.m. New York time at the offices of
▇▇▇▇▇▇▇▇, 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 of the transactions contemplated herein shall be deemed effective as of
the close of business on the Closing Date.
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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);
(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 an omnibus assignment and
assumption agreement 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 OMNIBUS ASSIGNMENT");
(8) a duly executed counterpart to a bill 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 the
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 hereunder;
(11) duly executed counterparts to the Banking Lease Assignments;
43
(12) a duly executed counterpart to the Banking Omnibus 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:
(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 an omnibus assignment and
assumption agreement 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 OMNIBUS
ASSIGNMENT");
(9) a duly executed counterpart to a bill of sale with respect to the
fixed assets and other tangible personal property constituting Purchased
Banking Assets;
44
(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 hereunder;
(11) duly executed counterparts to the Corporate Trust Lease
Assignments;
(12) a duly executed counterpart to the Corporate Trust Omnibus
Assignment; 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.
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.
(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
45
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 the Transferred Entity is set forth
on SCHEDULE 6.1(c). All of the issued and outstanding shares of the Transferred
Entity are duly authorized, validly issued, fully 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 the 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 the 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 the Transferred Entity. The Transferred
Entity does not own any securities or financial interests in any Person or
otherwise owns any asset other than (i) Corporate Trust Agreements, (ii) all of
the outstanding shares of capital stock of each of Rusday Limited, GT Australia
Nominees Limited and Brandwal Limited and shares representing 40% of the
outstanding shares of Longreach CP 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, the
Transferred Entity has good and valid title to the shares of the Indirect
Transferred Entities and, upon consummation of the Closing, the Transferred
Entity shall have good and valid title to such shares, free and clear of any
Liens. Neither the Transferred Entity nor any of the Indirect Transferred
Entities: (i) has not conducted any material business since its incorporation
other than the Corporate Trust Business; and (ii) is not 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 the Transferred Entity), neither the Transferred
Entity nor any 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
46
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 Support 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 agreement, enforceable
against any and all of them in accordance with its terms, except for the
Permitted Enforceability Exceptions.
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
47
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.
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).
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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 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
49
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.
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 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.
50
(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.
51
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
52
(iii) to the extent required by Applicable Law or by 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.
53
(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 statements
that are prepared in
54
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.
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 Support 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 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
55
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)).
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
56
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) ▇.▇. ▇▇▇▇▇▇ Trust Australia Limited, any of its Subsidiaries, Longreach
CP Limited and any affiliated, combined, unitary, or similar group of which ▇.▇.
▇▇▇▇▇▇ Trust Australia Limited, any of its Subsidiaries or Longreach CP Limited
is, or was at any time, a member for any Tax purpose, other than Promina Group
Limited and any Subsidiary of Promina Group Limited (the preceding entities,
including but not limited to ▇.▇. ▇▇▇▇▇▇ Trust Australia Limited, the "▇.▇.
▇▇▇▇▇▇ TRUST AUSTRALIA LIMITED TAX AFFILIATES") have timely filed (and in
respect 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 ▇.▇. ▇▇▇▇▇▇ Trust Australia Limited, any of its Subsidiaries
or Longreach CP Limited does not file Tax Returns that ▇.▇. ▇▇▇▇▇▇ Trust
Australia Limited, any of its Subsidiaries or Longreach CP Limited is subject to
Tax by that jurisdiction.
57
(e) Each ▇.▇. ▇▇▇▇▇▇ Trust Australia Limited 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 ▇.▇. ▇▇▇▇▇▇ Trust Australia Limited 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 ▇.▇. ▇▇▇▇▇▇ Trust Australia Limited 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 ▇.▇. ▇▇▇▇▇▇ Trust Australia Limited, any of its
Subsidiaries or Longreach CP Limited, and no Taxing Authority has officially
notified ▇.▇. ▇▇▇▇▇▇ Trust Australia Limited, any of its Subsidiaries or
Longreach CP Limited 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 ▇.▇. ▇▇▇▇▇▇ Trust Australia Limited, any of its Subsidiaries or
Longreach CP Limited 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
▇.▇. ▇▇▇▇▇▇ Trust Australia Limited, any of its Subsidiaries or Longreach CP
Limited, 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 ▇.▇. ▇▇▇▇▇▇ Trust Australia Limited, any of its
Subsidiaries or Longreach CP Limited is or has been a party to any tax
indemnity, tax 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) The ▇.▇. ▇▇▇▇▇▇ Trust Australia Limited Tax Affiliates 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
58
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, any of its Subsidiaries or Longreach CP Limited 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 ▇.▇. ▇▇▇▇▇▇ Trust Australia Limited,
any of its Subsidiaries or Longreach CP Limited is or has been a party, or by
which ▇.▇. ▇▇▇▇▇▇ Trust Australia Limited, any of its Subsidiaries or Longreach
CP Limited 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 ▇.▇. ▇▇▇▇▇▇ Trust Australia
Limited, any of its Subsidiaries or Longreach CP Limited may have obtained
relief.
(o) Each of ▇.▇. ▇▇▇▇▇▇ Trust Australia Limited, its Subsidiaries and
Longreach CP Limited, 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, any of its
Subsidiaries or Longreach CP Limited 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, any of its
Subsidiaries or Longreach CP Limited are "land rich" within the meaning of
Australian stamp duty legislation.
(r) None of ▇.▇. ▇▇▇▇▇▇ Trust Australia Limited, any of its
Subsidiaries or Longreach CP Limited 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 to which
JPM or such Subsidiary, as applicable, acts in a Corporate Trust Capacity under
an active Corporate Trust Agreement.
59
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
Support 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 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 Support Agreement have been, and,
as of the Closing Date, the Servicing Agreement will be, duly and validly
executed and delivered by BNY
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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.
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 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,
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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 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
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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.
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, 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")
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(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.
(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
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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 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.
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(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.
(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.
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(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 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.
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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 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.
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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 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 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).
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(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. 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.
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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:
(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.
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(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 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
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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 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.
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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 Support 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.
(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.
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(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 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.
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(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
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).
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(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 Support 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:
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
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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.
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 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
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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 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
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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 third (3rd) 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 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.
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(c) For a period commencing on the Closing Date and ending on the
earlier to occur of (i) the third (3rd) 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 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
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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 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. If any such required consent shall not have been obtained
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within the four-year time period specified in the Servicing Agreement (provided
that 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), 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, 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. 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
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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 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,
84
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 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.
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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 if 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 (any such asset or liability, a "RESTRICTED ITEM"). 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, 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 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), 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. As compensation 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, BNY or JPM, as applicable, shall be entitled to all fees, and all
other revenues of JPM or BNY, respectively, in respect thereof.
(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
86
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 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.
(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. 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"), 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
(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
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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).
(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
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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.
(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 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"), 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
90
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 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
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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; and
(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
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),
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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).
(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.
(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 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.
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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, BNYs 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 Support 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
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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 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
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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;
(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 ▇.▇.
▇▇▇▇▇▇ Trust Australia Limited, any of its Subsidiaries and Longreach CP
Limited (whether from corporation to partnership or disregarded entity or
vice versa);
(9) with respect to ▇.▇. ▇▇▇▇▇▇ Trust Australia Limited, any of its
Subsidiaries or Longreach CP Limited, (i) make or rescind any material
election
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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 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
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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 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.
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(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 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 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 the "JPM" name
in the forms that currently appear on the systems and applications used in
connection with the operation of the Corporate Trust Business and trade names
associated therewith in substantially the same manner as used by JPM 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 Support 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
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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.
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.
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
Support Agreement, the parties shall reasonably cooperate in performing such
tasks as may be outlined in the Corporate Trust Conversion
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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
Support 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:
(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.
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Section 11.11 INFORMATION REPORTING. Subject to the provisions of the
Corporate Trust Transition Support 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 the Closing Date, and by BNY
to the extent related to any period beginning after the Closing Date. 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 Support 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:
(1) any Corporate Trust Withholding Obligations required to be
withheld on or prior to the Closing Date 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 the Closing Date with
respect to Corporate Trust Withholding Obligations after the Closing Date
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 the Closing Date in connection with transactions that occurred on or
prior to the Closing Date 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 the
Closing Date in connection with transactions that occurred prior to the Closing
Date, 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 Support Agreement).
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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 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
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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 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;
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(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;
(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
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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.
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.
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(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.
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.
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Section 12.6 INFORMATION REPORTING. Subject to the provisions of the
Banking Transition Support 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 the Closing Date, and by JPM
to the extent related to any period beginning after the Closing Date. 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 Support 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 the Closing Date 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 the Closing Date with respect to
Banking Withholding Obligations after the Closing Date and 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 the Closing Date in connection with transactions that occurred on or
prior to the Closing Date 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 the
Closing Date in connection with transactions that occurred prior to the Closing
Date, 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 Support 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,
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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 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 Support 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 Support
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
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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 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 Support
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
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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 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
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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:
(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
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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.
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 a non-exclusive, non-transferable, non-sublicensable,
royalty-free license to use the "BNY" name in the forms that currently appear in
branch facilities and trade names associated therewith on any branch that
constitutes an Owned Banking Premise or that is the subject of a Banking Lease
in each case in substantially the same manner as used by BNY immediately prior
to the Closing, except that JPM shall not have any right to use in any manner
BNY's multi-color "BNY" logo design, a copy of which is set forth on SCHEDULE
12.14 (the "BNY NAME LICENSE"). Notwithstanding the foregoing sentence, BNY
agrees that, if the BNY's multi-color "BNY" logo design or the name "▇▇▇▇▇▇
Trust" appears on any signage on any Owned Banking Premise, any branch that is
subject of a Banking Lease or any Other Banking Facility, BNY shall either (i)
grant JPM 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 branch that is subject of a Banking Lease or any Other
Banking Facility, then BNY agrees that it shall grant JPM a perpetual,
non-exclusive, non-transferable, non-sublicensable, royalty-free license to use
such name to the extent necessary to permit such name to remain etched into such
building. The term of the BNY Name License shall commence on the Closing Date
and expire upon the Banking Conversion.
(b) 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
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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). No fee
shall be charged for the limited, perpetual license contemplated by the
penultimate sentence of Section 12.14(a).
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
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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.
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
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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
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
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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 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
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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
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 five (5) 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).
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 Support Agreement or in connection with the
expiration of the term of the Corporate Trust Transition Support Agreement (but
in no event more than five (5) Business Days following the end of the relevant
Service Period (as defined in the Corporate Trust Transition Support
Agreement)); 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 Support
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 BNY did not ultimately make a Comparable Job Offer and
(ii) be
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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.
(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 (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
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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.
(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 having not received a
required consent, approval or license from a third party (including any
Governmental Authority) as contemplated by
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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 Corporate Trust Transition
Support 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 Support Agreement), BNY employs a Corporate Trust
Business Employee (other than a Transferred Corporate Trust Employee) 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
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
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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.
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 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
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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-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
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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 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
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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 Corporate Trust Employees an amount in cash equal to
2% of each such 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
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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 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 Support Agreement), JPM employs a Banking Business Employee (other
than a Transferred
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Banking Employee) 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). 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.
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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 an election under
Section 338 of the Code in respect of the sale of any foreign entity that is a
Purchased Corporate Trust Asset. 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 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
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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.
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.
(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
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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).
(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
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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
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.
(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. If so requested, the other party shall use reasonable
efforts to cooperate with the party seeking such refund.
Section 14.6 UNITED KINGDOM VAT.
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(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 Act 1994 ("VATA 1994") or paragraph 6 of the Value Added Tax
Regulations 1995 (the "ORDER") or as otherwise required by law; and
(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 Act 1994 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
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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.
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:
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(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 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.
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Section 15.3 CONDITIONS TO OBLIGATION OF JPM TO CLOSE. JPM's
obligation to effect the Corporate Trust Sale as 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 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
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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.
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.
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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 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
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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);
(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;
(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;
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(d) the Excluded Banking Liabilities; and
(e) except to the extent that JPM is obligated to indemnify the BNY
Indemnified Parties as set forth in Section 17.2(d), 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
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payments hereunder would exceed in the aggregate $200,000,000 (the "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 17.2(e),
the amount of such
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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 to indemnify any Person
otherwise entitled to
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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, 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 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, 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 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 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.
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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; PROVIDED, FURTHER, that 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: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇▇, Lipton, ▇▇▇▇▇ & ▇▇▇▇
▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
143
If to BNY:
The Bank of New York Company, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ 10286
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.
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
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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.
[Remainder of page left intentionally blank]
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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 and Chief Financial
Officer
JPMORGAN CHASE & CO.
By: /S/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Chief Executive Officer of Retail
Financial Services
[Signature Page to Purchase and Assumption Agreement]
