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   EXHIBIT 10.1

 

 

SECURITIES PURCHASE AGREEMENT

dated as of September 18, 2012

between

SUFFOLK BANCORP 

and

THE INVESTOR PARTY HERETO

 

 

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 

 

 

TABLE OF CONTENTS

 

	

   ARTICLE I

    

   Purchase; Closing

    
	

    

	

    

    

   1.1
	

    

    

   Purchase
	

   Page

    

   1

	

   1.2 
	

   Closing 
	

   1

    

	

   ARTICLE II 

   Representations and Warranties

    
	

    

	

   2.1
	

   Disclosure
	

   3

	

   2.2
	

   Representations and Warranties of the Company
	

   4

	

   2.3
	

   Representations and Warranties of the Investor
	

   11

    

	

   ARTICLE III 

   Covenants

    
	

    

	

   3.1
	

   Efforts 
	

   13

	

   3.2
	

   Confidentiality
	

   13

	

    
	

    
	

    

	

   ARTICLE IV

   Additional Agreements

    
	

    

	

   4.1
	

   Registration Rights
	

   13

	

   4.2
	

   Legend
	

   23

	

   4.3
	

   NASDAQ Listing
	

   24

	

   4.4
	

   Certain Transactions
	

   24

	

   4.5
	

   Witholding
	

   24

	

   4.6
	

   Notice of Control
	

   24

	

   ARTICLE V

   Termination

    
	

    

	

   5.1
	

   Termination
	

   25

	

   5.2
	

   Effects of Termination
	

   25

	 	 	 	 

 

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   ARTICLE VI

   Miscellaneous
	

    

	

    

    

   6.1
	

    

    

   Survival
	

   Page

    

   25

	

   6.2
	

   Amendment
	

   25

	

   6.3
	

   Waiver
	

   25

	

   6.4
	

   Counterparts
	

   25

	

   6.5
	

   Governing Law; Jurisdiction
	

   26

	

   6.6
	

   WAIVER OF JURY TRIAL
	

   26

	

   6.7
	

   Notices
	

   26

	

   6.8
	

   Entire Agreement; Assignment 
	

   27

	

   6.9
	

   Other Definitions
	

   27

	

   6.10
	

   Captions
	

   28

	

   6.11
	

   Severability
	

   28

	

   6.12
	

   No Third-Party Beneficiaries
	

   28

	

   6.13
	

   Specific Performance
	

   28

	

   6.14
	

   Public Announcements
	

   29

	

   6.15
	

   Other Investors

    
	

   29

	 	 	 	 

 

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INDEX OF DEFINED TERMS

	

   Term
	

   Location of Definition

    

	

   Affiliate
	

   6.9(b)

	

   Agreement
	

   Preamble

	

   Bank
	

   1.2(b)(1)(B)

	

   Beneficial Owner
	

   6.9(h)

	

   BHC Act
	

   2.2(a)

	

   BHC Act Control
	

   2.2(t)

	

   Board of Directors
	

   2.2(d)(1)

	

   business day
	

   6.9(f)

	

   Cash Proceeds
	

   1.1

	

   Closing
	

   1.2(a)

	

   Closing Date
	

   1.2(a)

	

   Common Stock
	

   Recitals

	

   Company
	

   Preamble

	

   Company 10-K
	

   2.2(e)

	

   Company Reports
	

   2.2(f)

	

   Company Stock Option
	

   2.2(c)

	

   Company Subsidiaries
	

   2.2(b)

	

   Company Subsidiary
	

   2.2(b)

	

   control
	

   6.9(b)

	

   Disclosure Schedule
	

   2.1(a)

	

   Escrow Agent
	

   Recitals

	

   Escrow Agreement
	

   Recitals

	

   FDIC
	

   2.2(a)

	

   GAAP
	

   2.1(b)(2)(A)

	

   Governmental Entities
	

   2.2(d)(3)

	

   Indemnitee
	

   4.1(g)(1)

	

   Information
	

   3.2

	

   Investor
	

   Preamble

	

   IRS
	

   4.5

	

   knowledge of the Company
	

   6.9(i)

	

   Liens
	

   2.2(b)

	

   Losses
	

   4.1(g)(1)

	

   Material Adverse Effect
	

   2.1(b)

	

   OFAC
	

   2.2(w)

	

   Other Investors
	

   1.2(b)(1)(A)

	

   Pending Underwritten Offering
	

   4.1(l)

	

     Permitted Liens
	

   2.2(g) 

	

   person
	

   6.9(g)

	

   Piggyback Registration
	

   4.1(a)(4)

	

   Press Release
	

   6.14

	

   Previously Disclosed
	

   2.1(c)

 

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   Term
	

   Location of Definition

    

	

   Purchase
	

   1.1

	

   Purchase Agreements
	

   Recitals

	

   register
	

   4.1(k)(1)

	

   registered
	

   4.1(k)(1)

	

   Registrable Securities
	

   4.1(k)(2)

	

   registration
	

   4.1(k)(1)

	

   Registration Deadline
	

   4.1(a)(1)

	

   Registration Expenses
	

   4.1(k)(3)

	

   Rule 144
	

   4.1(k)(4)

	

   Rule 144A
	

   4.1(k)(4)

	

   Rule 158
	

   4.1(k)(4)

	

   Rule 159A
	

   4.1(k)(4)

	

   Rule 405
	

   4.1(k)(4)

	

   Rule 415
	

   4.1(k)(4)

	

   SARs
	

   2.2(c)

	

   Scheduled Black-out Period
	

   4.1(k)(5)

	

   SEC
	

   2.1(c)(2)

	

   Securities Act
	

   2.3(c)

	

   Selling Expenses
	

   4.1(k)(6)

	

   Shares
	

   Recitals

	

   Shelf Registration Statement
	

   4.1(a)(2)

	

   Special Registration
	

   4.1(a)(4)

	

   subsidiary
	

   6.9(a)

	

   U.S. Sanctions Laws
	

   2.3(f)

	

   Underwritten Offering
	

   4.1(a)(2)

 

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SECURITIES PURCHASE AGREEMENT, dated as of September 18, 2012 (this “Agreement”), between SUFFOLK BANCORP, a New York corporation (the “Company”), and the investor listed on Schedule A (the “Investor”). 

RECITALS:

A.  The Company intends to sell to the Investor, and the Investor intends to purchase from the Company, as an investment in the Company, the number of shares set forth on Schedule A (the “Shares”) of common stock, par value $2.50 per share, of the Company (the “Common Stock”), at a price of $13.50 per Share, subject to the terms and conditions set forth herein.  

B.  Concurrently with the execution of this Agreement, the Company is entering into an Escrow Agreement (the “Escrow Agreement”) with American Stock Transfer & Trust Company, LLC (the “Escrow Agent”).  

C.  Substantially concurrently with the execution of this Agreement, the Company is entering into purchase agreements with certain other investors pursuant to which the investors named therein will purchase shares of Common Stock subject to the terms and conditions set forth therein (such purchase agreements, together with this Agreement, the “Purchase Agreements”). 

NOW, THEREFORE, in consideration of the premises, and of the representations, warranties, covenants and agreements set forth herein, the parties agree as follows:

ARTICLE I

Purchase; Closing

    1.1           Purchase. On the terms and subject to the conditions set forth herein, the Investor will purchase from the Company, and the Company will sell to the Investor, the Shares (the “Purchase”) for the aggregate purchase price set forth on Schedule A (the “Cash Proceeds”).  

    1.2          Closing. (a)  The closing of the Purchase (the “Closing”) will take place at the offices of Wachtell, Lipton, Rosen & Katz, 51 West 52nd Street, New York, New York 10019 at 10:00 a.m., New York time, on September 19, 2012 (the “Closing Date”), or at such later time as the last of the conditions specified in Section 1.2(b) is satisfied or waived (other than those conditions that by their nature can only be satisfied at the Closing but subject to their satisfaction as of the Closing).  Prior to the Closing, the Investor shall deliver to the Escrow Agent the Cash Proceeds, except as may otherwise be agreed by the Investor and the Company.  At the Closing, (1) the Company shall deliver to the Investor (A) physical certificates evidencing the Shares and (B) all other documents to be delivered to the Investor pursuant to Section 1.2(b)(2); and (2) except as may otherwise be agreed by the Investor and the Company, the Company shall instruct the Escrow Agent to deliver the Cash Proceeds by wire transfer of immediately available funds to an account or accounts designated by the Company.  

 

 

(b)               Closing Conditions.  

(1)               The obligation of the Company to consummate the Closing is subject to the following conditions:

(A)             the Company shall have entered into Purchase Agreements providing for the sale of shares of Common Stock by the Company to the investors party thereto (such investors, other than the Investor, the “Other Investors”) in exchange for aggregate proceeds of $12,500,000, and the closings under the other Purchase Agreements shall occur and become effective simultaneously with the Closing; 

(B)              the transactions contemplated by each of the Loan Purchase Agreements entered into by The Suffolk County National Bank of Riverhead (the “Bank”) on the Closing Date shall have closed; 

(C)              the representations and warranties of the Investor contained in this Agreement shall be true and correct on and as of the date hereof and on and as of the Closing Date as if made on and as of the Closing Date (except for any such representations or warranties expressly made as of the date hereof or as of another date, which shall be true and correct as of such date); and

(D)             the Investor shall have performed in all material respects all of its covenants and obligations in this Agreement that are to be performed at or prior to the Closing.

(2)               The obligation of the Investor to consummate the Closing is subject to the following conditions: 

(A)             the Investor shall have received an opinion, dated the Closing Date, from Wachtell, Lipton, Rosen & Katz, and/or another nationally recognized law firm, as counsel to the Company, as to the validity of the Shares being sold in the Purchase, the compliance of the Purchase with federal securities laws and other matters as are customary in comparable securities purchases; 

(B)              the representations and warranties of the Company contained in this Agreement shall be true and correct on and as of the date hereof and on and as of the Closing Date as if made on and as of the Closing Date (except for any such representations or warranties expressly made as of the date hereof or as of another date, which shall be true and correct as of such date), and the Investor shall have received a certificate of an authorized officer of the Company, dated as of the Closing Date, certifying to that fact; and

 

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(C)              the Company shall have performed in all material respects all of its covenants and obligations in this Agreement that are to be performed at or prior to the Closing, and the Investor shall have received a certificate of an authorized officer of the Company, dated as of the Closing Date, certifying to that fact.

(3)               The obligation of each of the Company and the Investor to consummate the Closing is further subject to the following conditions: 

(A)             this Agreement shall not have been terminated in accordance with Section 5.1 herein;

(B)              no provision of any applicable law or regulation and no judgment, injunction, order or decree shall prohibit the Purchase or shall prohibit or restrict Investor or its Affiliates from owning or voting any of the Shares;

(C)              the purchase by the Investor of the Shares will not result in the Investor (individually or together with any other person with whom the Investor has identified, or will have identified, itself as part of a “group” in a public filing made with the SEC involving the Company’s securities) acquiring, or obtaining the right to acquire, in excess of 9.99% of the outstanding shares of Common Stock or the voting power of the Company on the Closing Date (after giving effect to the Closing and the closings of the transactions contemplated by the other Purchase Agreements); and

(D)             the purchase of Shares by the Investor shall not (i) require the Investor or any of its affiliates to file a prior notice under the Change in Bank Control Act, or otherwise seek prior approval of any banking regulator; (ii) require the Investor or any of its affiliates to become a bank holding company or otherwise serve as a source of strength for the Company or any Company Subsidiary; or (iii) cause the Investor, together with any other person whose securities of the Company would be aggregated with the Investor’s securities of the Company for purposes of any bank regulation or law, to collectively be deemed to own, control or have the power to vote securities which (assuming, for this purpose only, full conversion and/or exercise of such securities by the Investor and such other persons) would represent more than 9.9% of any class of voting securities of the Company outstanding on the Closing Date (after giving effect to the Closing and the closings of the transactions contemplated by the other Purchase Agreements).

ARTICLE II

Representations and Warranties

    2.1        Disclosure. (a)  On or prior to the date hereof, the Company delivered to the Investor a schedule (a “Disclosure Schedule”) setting forth, among other things, items the disclosure of which is necessary or appropriate either in response to an express disclosure requirement contained in a provision hereof or as an exception to one or more of the Company’s representations or warranties contained in Section 2.2 or to one or more of its covenants contained in this Agreement; provided that the mere inclusion of an item in a Disclosure Schedule as an exception to a representation or warranty will not be deemed an ad

mission by the Company that such item represents a material exception or fact, event or circumstance or that such item is reasonably likely to result in a Material Adverse Effect.

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(b)               “Material Adverse Effect” means, with respect to the Investor, only clause (2) that follows, or, with respect to the Company, both clauses (1) and (2) that follow, any circumstance, event, change, development or effect that, individually or in the aggregate (1) is material and adverse to the financial position, results of operations, business or condition (financial or otherwise) of the Company and its subsidiaries taken as a whole, or (2) would materially impair the ability of either the Investor or the Company, respectively, to perform its obligations under this Agreement or otherwise materially threaten or materially impede the consummation of the transactions contemplated by this Agreement; provided, however, that Material Adverse Effect, under clause (1), shall not be deemed to include the impact of (A) changes in U.S. generally accepted accounting principles (“GAAP”), (B) changes in applicable laws, rules and regulations or interpretations thereof by Governmental Entities, (C) actions or omissions of the Company expressly required by the terms of this Agreement or taken with the prior written consent of the Investor, (D) general changes in the economy or the industries in which the Company and its subsidiaries operate, (E) hurricanes, tornadoes, earthquakes, floods or other natural disasters or acts of terrorism or war (whether or not declared), (F) changes in the market price or trading volumes of the Common Stock (but not the underlying causes of such changes), (G) the failure of the Company to meet any internal or public projections, forecasts, estimates or guidance (but not the underlying causes of such failure), (H) compliance by a party with the terms and conditions of this Agreement, and (I) the public disclosure of this Agreement or the transactions contemplated hereby.  

(c)                “Previously Disclosed” with regard to (1) any party means information set forth on its Disclosure Schedule corresponding to the provision of this Agreement to which such information relates; provided  that information which, on its face, reasonably should indicate to the reader that it relates to another provision of this Agreement shall also be deemed to be Previously Disclosed with respect to such other provision and (2) the Company, includes information publicly disclosed by the Company in the Company Reports filed by it with or furnished to the Securities and Exchange Commission (the “SEC”) and publicly available prior to the date of this Agreement (excluding any risk factor disclosures contained in such documents under the heading “Risk Factors” and any disclosure of risks included in any “forward-looking statements” disclaimer or other statements that are similarly nonspecific and are predictive or forward-looking in nature). 

(d)               Each party acknowledges that it is not relying upon any representation or warranty not set forth in this Agreement.  The Investor acknowledges that it has had an opportunity to conduct such review and analysis of the business, assets, condition, operations and prospects of the Company and the Company Subsidiaries, including an opportunity to ask such questions of management (for which it has received such answers) and to review such information maintained by the Company, in each case as the Investor considers sufficient for the purpose of making the Purchase.  The Investor further acknowledges that it has had such an opportunity to consult with its own counsel, financial and tax advisers and other professional advisers as it believes is sufficient for purposes of the Purchase.

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2.2        Representations and Warranties of the Company. Except as Previously Disclosed, the Company represents and warrants to the Investor as of the date of this Agreement that:

(a)                Organization and Authority; Bank Regulations.  The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of New York, is duly qualified to do business and is in good standing in all jurisdictions where its ownership or leasing of property or the conduct of its business requires it to be so qualified and failure to be so qualified would have a Material Adverse Effect on the Company, and has corporate power and authority to own its properties and assets and to carry on its business as it is now being conducted.  The Company has Previously Disclosed to the Investor true and correct copies of its Certificate of Incorporation and by-laws as amended through the date of this Agreement.  The Company is duly registered as a bank holding company under the Bank Holding Company Act of 1956, as amended (the “BHC Act”).  The Bank is duly organized and validly existing as a national banking association and its deposit accounts are insured by the Federal Deposit Insurance Corporation (“FDIC”) to the fullest extent permitted by the Federal Deposit Insurance Act and the rules and regulations of the FDIC thereunder, and all premiums and assessments required to be paid in connection therewith have been paid when due.  The Company is not, and has never been, an issuer identified in Rule 144(i)(1) promulgated under the Securities Act.

(b)               Company’s Subsidiaries.  The Company has Previously Disclosed a complete and correct list of all of its subsidiaries as of the date hereof, all shares of the outstanding capital stock of each of which are owned directly or indirectly by the Company.  The material subsidiaries of the Company are referred to herein individually as a “Company Subsidiary” and collectively as the “Company Subsidiaries.”  No equity security of any Company Subsidiary is or may be required to be issued by reason of any option, warrant, scrip, preemptive right, right to subscribe to, call or commitment of any character whatsoever relating to, or security or right convertible into, shares of any capital stock of such Company Subsidiary, and there are no contracts, commitments, understandings or arrangements by which any Company Subsidiary is bound to issue additional shares of its capital stock, or any option, warrant or right to purchase or acquire any additional shares of its capital stock.  All of such shares so owned by the Company are duly authorized and validly issued, fully paid and nonassessable and are owned by it free and clear of any lien, claim, charge, option, encumbrance or agreement (“Liens”) with respect thereto.  Each Company Subsidiary is an entity duly organized, validly existing, duly qualified to do business and in good standing under the laws of its jurisdiction of incorporation, and has corporate or other appropriate organizational power and authority to own or lease its properties and assets and to carry on its business as it is now being conducted, in each case except as would not reasonably be expected to have a Material Adverse Effect on the Company.  Except in respect of the Company Subsidiaries, the Company does not Beneficially Own, directly or indirectly, more than 5% of any class of equity securities or similar interests of any corporation, bank, business trust, association or similar organization, and is not, directly or indirectly, a partner in any partnership or party to any joint venture.  

(c)                Capitalization.  The authorized capital stock of the Company consists of 15 million shares of Common Stock, of which 9,726,814 shares were outstanding as of June 30, 

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2012.  As of June 30, 2012, there were outstanding options (each, a “Company Stock Option”) to purchase an aggregate of not more than 185,500 shares of Common Stock and 10,000 stock appreciation rights (the “SARs”).  All of the outstanding shares of capital stock of the Company have been duly and validly authorized and issued and are fully paid and nonassessable.  Once issued to the Investor against receipt of the consideration contemplated by this Agreement, the Shares will have been duly authorized and validly issued and will be fully paid and nonassessable.  Except (1)  for the rights granted pursuant to the other Purchase Agreements and (2) the Company Stock Options and the SARs, as of the date hereof there are no outstanding subscriptions, contracts, conversion privileges, options, warrants, calls, preemptive rights or other rights obligating the Company or any Company Subsidiary to issue, sell or otherwise dispose of, or to purchase, redeem or otherwise acquire, any shares of capital stock of the Company or any Company Subsidiary. There are no bonds, debentures, notes or other indebtedness having the right to vote (or convertible into securities having the right to vote) on any matters on which holders of Common Stock may vote. 

 

(d)                 Authorization; No Default.   

(1)               The Company has the corporate power and authority to enter into this Agreement and to carry out its obligations hereunder.  The execution, delivery and performance of this Agreement by the Company and the consummation of the transactions contemplated hereby have been duly authorized by the board of directors of the Company (the “Board of Directors”).  This Agreement has been duly and validly executed and delivered by the Company and, assuming due authorization, execution and delivery of this Agreement by the Investor, is a valid and binding obligation of the Company enforceable against the Company in accordance with their respective terms, except as such enforceability may be limited by bankruptcy, insolvency, moratorium, reorganizations, fraudulent transfer or similar laws relating to or affecting creditors generally or by general equitable principles (whether applied in equity or at law).  No other corporate proceedings are necessary for the execution and delivery by the Company of this Agreement, the performance by it of its obligations hereunder or the consummation by it of the transactions contemplated hereby.  

(2)               Subject to compliance with the statutes, regulations and filings referred to in Section 2.2(d)(3), neither the execution, delivery and performance by the Company of this Agreement, nor the consummation of the transactions contemplated hereby, will (A) violate, conflict with, or result in a breach of any provision of, or constitute a default (or an event which, with notice or lapse of time or both, would constitute a default) under, or result in the termination of, or accelerate the performance required by, or result in a right of termination or acceleration of, or result in the creation of, any Lien upon any of the properties or assets of the Company or any Company Subsidiary under any of the material terms, conditions or provisions of (i) its certificate of incorporation or by-laws (or similar governing documents) or (ii) any note, bond, mortgage, indenture, deed of trust, license, lease, agreement or other instrument or obligation to which the Company or any Company Subsidiary is a party or by which it may be bound, or to which the Company or any Company Subsidiary or any of the properties or assets of the Company or any Company Subsidiary may be subject; or (B) violate any statute, rule or regulation or, to the knowledge of the Company, any judgment, ruling, order, writ, injunction or decree applicable to the Company or any Company Subsidiary or any of their respective properties or 

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assets; except, in the case of clauses (A)(ii) and (B), as would not reasonably be expected to have a Material Adverse Effect on the Company.

 

(3)               Other than filings under the federal securities laws or the securities or blue sky laws of the various states, the approval of the Shares for listing on the NASDAQ Stock Market and as otherwise provided in this Agreement, no material notice to, filing with, exemption or review by, or authorization, consent or approval of, any governmental or regulatory authorities, agencies, courts, commissions or other entities (collectively, “Governmental Entities”) or any other person is necessary for the consummation by the Company of the transactions contemplated by this Agreement. 

(e)                Company Financial Statements.  Except as Previously Disclosed, the consolidated statements of condition of the Company and the Company Subsidiaries as of December 31, 2011 and 2010 and related consolidated statements of income, changes in stockholders’ equity and cash flows for the three years ended December 31, 2011, together with the notes thereto, included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2011 (the “Company 10-K”), and the unaudited consolidated statements of condition of the Company and the Company Subsidiaries as of June 30, 2012 and related consolidated statements of income, changes in stockholders’ equity and cash flows for the six months ended June 30, 2012 included in the Company’s Quarterly Report on Form 10-Q for the period ended June 30, 2012 have been prepared in accordance with GAAP applied on a consistent basis and present fairly in all material respects the consolidated financial position of the Company and the Company Subsidiaries at the dates set forth therein and the consolidated results of operations, changes in stockholders’ equity and cash flows of the Company and the Company Subsidiaries for the periods stated therein (subject to the absence of notes and year-end audit adjustments in the case of interim unaudited statements).

(f)                 Reports.  Except as Previously Disclosed, since December 31, 2010, the Company and each Company Subsidiary have filed all material reports, registrations and statements, together with any required amendments thereto, that it was required to file with any Governmental Entity (collectively, the “Company Reports”).  Except as Previously Disclosed, as of their respective filing dates, the Company Reports (1) complied in all material respects with all statutes and applicable rules and regulations of the applicable Governmental Entities, as the case may be, and (2) did not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading.  

(g)               Properties and Leases.  Except as Previously Disclosed, the Company or Company Subsidiaries have good title, free and clear of any material Liens other than Permitted Liens, to the owned real and personal property reflected in the Company’s consolidated balance sheet as of December 31, 2011 included in the Company 10-K, and all real and personal property acquired since such date, except such real and personal property as has been disposed of in the ordinary course of business.  For purposes of this Agreement, “Permitted Liens” means (1) liens for taxes and other governmental charges and assessments that are not yet due and payable, (2) liens of landlords and liens of carriers, warehousemen, mechanics and materialmen and other like liens arising in the ordinary course of business for sums 

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not yet due and payable and (3) other Liens or imperfections on property that are not material in amount or do not materially detract from the value of or materially impair the existing use of the property affected by such Lien or imperfection.  Except as would not reasonably be expected to have a Material Adverse Effect on the Company, (A) all leases of real property and all other leases material to the Company or any Company Subsidiary pursuant to which the Company or such Company Subsidiary, as lessee, leases real or personal property are valid and effective in accordance with their respective terms, and (B) there is not, under any such lease, any existing material default by the Company or such Company Subsidiary or any event which, with notice or lapse of time or both, would constitute such a material default.

 

(h)               Taxes.  Each of the Company and the Company Subsidiaries has filed all material federal, state, county, local and foreign tax returns, including information returns, required to be filed by it, and paid all material taxes owed by it, including those with respect to income, withholding, social security, unemployment, workers compensation, franchise, ad valorem, premium, excise and sales taxes, and no taxes shown on such returns to be owed by it or assessments received by it are delinquent.  Neither the Company nor any Company Subsidiary is a party to any pending action or proceeding, nor to the knowledge of the Company has any such action or proceeding been threatened by any Governmental Entity, for the assessment or collection of taxes, interest, penalties, assessments or deficiencies that would reasonably be likely to have a Material Adverse Effect on the Company and, to the knowledge of the Company, no issue has been raised by any federal, state, local or foreign taxing authority in connection with an audit or examination of the tax returns, business or properties of the Company or any Company Subsidiary which has not been settled, resolved and fully satisfied, or adequately reserved for (other than those issues that are not reasonably likely to have a Material Adverse Effect on the Company).  Each of the Company and the Company Subsidiaries has withheld all material taxes that it is required to withhold from amounts owing to employees, creditors or other third parties.  

(i)                 No Material Adverse Effect.  Since December 31, 2011, no change has occurred and no circumstances exist that have had or are reasonably likely to have a Material Adverse Effect on the Company.

(j)                 Insurance.  The Company and each Company Subsidiary is presently insured, and during each of the past five calendar years (or during such lesser period of time as the Company has owned such Company Subsidiary) has been insured, for reasonable amounts with financially sound and reputable insurance companies against such risks as companies engaged in a similar business would, in accordance with good business practice, customarily be insured.

(k)               Permits; Compliance with Laws.  Except as Previously Disclosed, the Company and each Company Subsidiary has all permits, licenses, authorizations, orders and approvals of, and has made all filings, applications and registrations with, Governmental Entities that are required in order to permit them to own or lease their properties and assets and to carry on their business as presently conducted and that are material to the business of the Company and the Company Subsidiaries, taken as a whole, and all such permits, licenses, authorizations, orders and approvals are in full force and effect and, to the knowledge of the Company, (1) no suspension or cancellation of any of them is threatened, and all such filings, applications and registrations are current, and (2) there are no facts or circumstances that would give rise to the revocation or material adverse modification of any such permits, licenses, authorizations, orders and 

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approvals.  Except as Previously Disclosed or as is not reasonably expected to have a Material Adverse Effect on the Company, (A) the conduct by the Company and each Company Subsidiary of their business and the condition and use of their properties does not violate or infringe any applicable domestic (federal, state or local) or foreign law, statute, ordinance, license or regulation or have the effect of revoking or limiting FDIC deposit insurance, and (B) neither the Company nor any Company Subsidiary is in default under any order, license, regulation, demand, writ, injunction or decree of any Governmental Entity. 

 

(l)                 Litigation.  Except as Previously Disclosed, there are no litigation, regulatory, governmental or similar proceedings pending or, to the Company’s knowledge, threatened, to which the Company or any Company Subsidiary is a party or of which any property of the Company or any of its subsidiaries is the subject which, individually or in the aggregate, could be reasonably expected to have a Material Adverse Effect on the Company. 

(m)             Brokers and Finders.  Except for Keefe, Bruyette & Woods, Inc., neither the Company nor any Company Subsidiary nor any of their respective officers, directors or employees has employed any broker or finder or incurred any liability for any financial advisory fees, brokerage fees, commissions or finder’s fees, and no broker or finder has acted directly or indirectly for the Company or any Company Subsidiary, in connection with this Agreement or the transactions contemplated hereby.

(n)               Issuance of the Shares.  The issuance of the Shares has been duly authorized, and when issued and paid for in accordance with the terms of this Agreement, the Shares will be duly and validly issued, fully paid and non-assessable and free and clear of all Liens, other than restrictions on transfer imposed by applicable securities laws, and shall not be subject to preemptive rights.  

(o)               Employment Matters.  Except as Previously Disclosed, no labor dispute exists or, to the Company’s knowledge, is imminent with respect to any of the employees of the Company or any Company Subsidiary which would have or reasonably be expected to have a Material Adverse Effect. None of the Company’s or Company’s Subsidiaries’ employees is a member of a union that relates to such employee’s relationship with the Company or Company Subsidiary, and neither the Company nor any of the Company Subsidiaries is a party to a collective bargaining agreement.  To the Company’s knowledge, no executive officer is, or is now expected to be, in material violation of any material term of any employment contract, confidentiality, disclosure or proprietary information agreement or non-competition agreement, or any other contract or agreement or any restrictive covenant in favor of a third party, and to the Company’s knowledge, the continued employment of each such executive officer does not subject the Company or any Company Subsidiary to any material liability with respect to any of the foregoing matters.

(p)               No Investment Company.  The Company is not, and immediately after receipt of payment for the Shares will not be, an “investment company,” an “affiliated person” of, “promoter” for or “principal underwriter” for, an entity “controlled” by an “investment company,” within the meaning of the Investment Company Act of 1940, as amended.

 

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(q)               S-3 Eligibility.  The Company is eligible to register the resale of the Shares by the Investor using Form S-3 promulgated under the Securities Act.

(r)                 Bank Regulatory Capitalization.  As of the date hereof, the Bank is “well capitalized” (as that term is defined in the relevant regulation of the Bank’s primary federal regulator).

(s)                Agreements with Regulatory Agencies; Fiduciary Obligations.  Except as Previously Disclosed, neither the Company nor any Company Subsidiary is subject to any cease-and-desist or other similar order or enforcement action issued by, or is a party to any written agreement, consent agreement or memorandum of understanding with, any Governmental Entity that restricts in any material respect the conduct of its business.  To the Company’s knowledge, each of the Company and each Company Subsidiary has administered all accounts for which it acts as a fiduciary, including accounts for which it serves as a trustee, agent, custodian, personal representative, guardian, conservator or investment advisor, in accordance with the terms of the governing documents, and applicable law.  To the Company’s knowledge, none of the Company, any Company Subsidiary or any director, officer or employee of the Company or any Company Subsidiary has committed any breach of trust or fiduciary duty with respect to any such fiduciary account.

(t)                 Common Control.  The Company is not and, after giving effect to the offering and sale of the Shares, will not be under the control (as defined in the BHC Act and the Federal Reserve’s Regulation Y (12 CFR Part 225)) (“BHC Act Control”) of any company.  The Company is not in BHC Act Control of any federally insured depository institution other than the Bank.  The Bank is not under the BHC Act Control of any company other than the Company.  Neither the Company nor the Bank controls, in the aggregate, more than five percent of the outstanding voting class, directly or indirectly, of any federally insured depository institution (other than, in the case of the Company, the Bank).  

(u)               Material Non-Public Information.  Neither the Company nor any of its officers or directors nor any other person acting on its or their behalf has provided, and it has not authorized Keefe, Bruyette & Woods, Inc. to provide, the Investor or its agents or counsel with any information that the Company believes constitutes or could reasonably be expected to constitute material, non-public information, except for such information that will be disclosed by the Company in the Press Release.  The Company acknowledges that the Investor will rely on the foregoing representations in effecting transactions in securities of the Company. 

(v)               Private Placement.  No registration under the Securities Act is required for the offer and sale of the Shares by the Company to the Investor pursuant to and subject to the terms and conditions of this Agreement.  The issuance and sale of the Shares hereunder does not contravene the rules and regulations of the NASDAQ Stock Market as of the date hereof.

(w)             OFAC.  Neither the Company nor any Company Subsidiary nor, to the Company’s knowledge, any director, officer, agent, employee, Affiliate or person acting on behalf of the Company or any Company Subsidiary is currently subject to any any sanction, regulation, or law promulgated by the Office of Foreign Assets Control (“OFAC”), the Financial Crimes Enforcement Network or any other similar Governmental 

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Entity (collectively, “U.S. Sanctions Laws”); and the Company will not knowingly use the proceeds of the sale of the Shares, or lend, contribute or otherwise make available such proceeds to any Company Subsidiary, joint venture partner or other person or entity, towards any sales or operations in any country sanctioned by OFAC or for the purpose of financing the activities of any person currently subject to any U.S. sanctions administered by OFAC.

 

(x)               Other Purchase Agreements.  No Purchase Agreement executed by an insitutional investor on the date hereof contains rights, or otherwise benefits the investor party thereto in a manner, more favorable in any material respect to such investor than the rights and benefits established in favor of the Investor by this Agreement.  

    2.3        Representations and Warranties of the Investor. Except as Previously Disclosed, the Investor hereby represents and warrants to the Company as of the date of this Agreement that:

(a)                Organization and Authority.  The Investor is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization, is duly qualified to do business and is in good standing in all jurisdictions where its ownership or leasing of property or the conduct of its business requires it to be so qualified and failure to be so qualified would have a Material Adverse Effect on the Investor and has the requisite power and authority to own its properties and assets and to carry on its business as it is now being conducted.  

(b)               Authorization; No Default.   

(1)               The Investor has the requisite power and authority to enter into this Agreement and to carry out its obligations hereunder and thereunder.  This Agreement has been duly and validly authorized, executed and delivered by the Investor and, assuming due authorization, execution and delivery of this Agreement by the Company, is a valid and binding obligation of the Investor enforceable against the Investor in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, moratorium, reorganizations, fraudulent transfer or similar laws relating to or affecting creditors generally or by general equitable principles (whether applied in equity or at law).  No other corporate proceedings are necessary for the execution and delivery by the Investor of this Agreement, the performance by it of its obligations hereunder or the consummation by it of the transactions contemplated hereby.  

(2)               Neither the execution, delivery and performance by the Investor of this Agreement, nor the consummation of the transactions contemplated hereby, will (A) violate, conflict with, or result in a breach of any provision of, or constitute a default (or an event which, with notice or lapse of time or both, would constitute a default) under, or result in the termination of, or accelerate the performance required by, or result in a right of termination or acceleration of, or result in the creation of, any Lien upon any of the properties or assets of the Investor under any of the material terms, conditions or provisions of (i) its certificate of incorporation or by-laws (or similar governing documents) or (ii) any note, bond, mortgage, indenture, deed of trust, license, lease, agreement or other instrument or obligation to which the Investor is a party or by which it may be bound, or to which the Investor or any of the properties or assets of the Investor may be subject; or (B) subject to compliance with the statutes and regulations referred to in the 

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next paragraph, materially violate any statute, rule or regulation or, to the knowledge of the Investor, any judgment, ruling, order, writ, injunction or decree applicable to the Investor or any of its properties or assets; except, in the case of clauses (A)(ii) and (B), as would not reasonably be expected to have a Material Adverse Effect on the Investor.

 

(3)               No notice to, filing with, exemption or review by, or authorization, consent or approval of, any Governmental Entity or any other person is necessary for the consummation by the Investor of the transactions contemplated by this Agreement. 

(c)                Purchase for Investment.  The Investor acknowledges that the Shares have not been registered under the Securities Act of 1933, as amended, and the rules and regulations thereunder (the “Securities Act”) or under any state securities laws, and is aware that the sale of the Shares to it is being made in reliance on a private placement exemption from registration under the Securities Act.  The Investor (i) is acquiring the Shares for its own account pursuant to an exemption from registration under the Securities Act for investment only and with no present intention of distributing any of the Shares to any person or any arrangement or understanding with any other persons regarding the distribution of such Shares (the foregoing representation and warranty not limiting the Investor’s right to sell such Shares pursuant to an effective registration statement or otherwise in compliance with the Securities Act and any other applicable securities laws), (ii) will not sell or otherwise dispose of any of the Shares, except in compliance with the registration requirements or exemption provisions of the Securities Act and any other applicable securities laws, (iii) has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of its prospective investment in the Shares, (iv) has the ability to bear the economic risks of its prospective investment and can afford the complete loss of such investment and (v) is an “accredited investor” (as that term is defined by Rule 501 of the Securities Act).  The Investor understands that the Company will rely upon the truth and accuracy of the foregoing representations, acknowledgements and agreements and agrees that if any of the representations and acknowledgements deemed to have been made by it by its purchase of the Shares is no longer accurate, it shall promptly notify the Company.  If the Investor is acquiring Shares as a fiduciary or agent for one or more accounts, the Investor represents that it has sole investment discretion with respect to each such account and it has full power to make the foregoing representations, acknowledgements and agreements on behalf of such account.

(d)               Ownership.  As of the date of this Agreement, the Investor is the owner of record or the Beneficial Owner of only the number of shares of Common Stock, securities convertible into or exchangeable for Common Stock or any other equity or equity-linked security of the Company, if any, set forth on Schedule A.  The Investor is acting independently with respect to the Purchase, this Agreement and the transactions contemplated thereby, and the Investor is not acting as part of a group or in concert with any other person or entity, including the Other Investors.  The decision of the Investor to purchase the Shares has been made independently of any Other Investor and independently of any information, materials, statements or opinions as to the business, affairs, operations, assets, properties, liabilities, results of operations, condition (financial or otherwise) or prospects of the Company or any Company Subsidiary which may have been made or given by any Other Investor or by any agent or employee of any Other Investor.  The Investor is not party to any agreement, arrangement or understanding for the purpose of 

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acquiring, holding, voting or disposing of, in each case, any shares of Common Stock or other securities of the Company or any option, warrant or other right to acquire any of the foregoing. 

  

(e)                Financial Capability.  The Investor has available funds to make the Purchase on the terms and conditions contemplated by this Agreement.

(f)                 OFAC; Anti-Money Laundering.  (i) Neither the Investor nor, to the Investor’s knowledge, any director, officer, agent, partner, member, employee, Affiliate or person acting on behalf of the Investor is currently subject to any U.S. Sanctions Laws; (ii) the Investor is not a “foreign shell bank” and is not acting on behalf of a “foreign shell bank” under applicable anti-money laundering laws and regulations; (iii) the Investor’s entry into this Agreement or consummation of the transactions contemplated hereby will not contravene U.S. Sanctions Laws or applicable anti-money laundering laws or regulations; (iv) the Investor will promptly provide to the Company or any Governmental Entity such information or documentation as may be required to comply with U.S. Sanctions Laws or applicable anti-money laundering laws or regulations; and (v) the Company may provide to any Governmental Entity information or documentation regarding, or provided by, the Investor for the purposes of complying with U.S. Sanctions Laws or applicable anti-money laundering laws or regulations.

(g)               Brokers and Finders.  Neither the Investor nor its Affiliates or any of their respective officers, directors or employees has employed any broker or finder or incurred any liability for any financial advisory fees, brokerage fees, commissions or finder’s fees, and no broker or finder has acted directly or indirectly for the Investor, in connection with this Agreement or the transactions contemplated hereby.

ARTICLE III

Covenants

                            3.1       Efforts.  Subject to the terms and conditions of this Agreement, each of the parties will use its reasonable best efforts in good faith to take, or cause to be taken, all actions, and to do, or cause to be done, all things necessary, proper or desirable, or advisable under applicable laws, so as to permit consummation of the Purchase as promptly as practicable and otherwise to enable consummation of the transactions contemplated hereby and shall use reasonable best efforts to cooperate with the other party to that end.

  

                            3.2       Confidentiality.  Prior to the issuance by the Company of the Press Release, the Investor will hold, and will cause its subsidiaries and their directors, officers, employees, agents, consultants and advisors to hold, in strict confidence, unless compelled to disclose by judicial or administrative process or, in the written opinion of its counsel, by other requirement of law or the applicable requirements of any Governmental Entity or relevant stock exchange, all nonpublic records, books, contracts, instruments, computer data and other data and information (collectively, “Information”) concerning the Company or any of its subsidiaries, in each case furnished to it by the Company or its representatives pursuant to this Agreement (except to the extent that such Information can be shown to have been (a) previously known by the Investor on a non-confidential basis, (b) in the public domain through no fault of 

the Investor or (c) later lawfully acquired from other sources by the Investor), and the Investor shall not release or disclose such Information to any other person, except to its auditors, attorneys, financial advisors and other consultants and advisors.  

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ARTICLE IV
Additional Agreements

4.1        Registration Rights. 

(a)                Registration. 

(1)               Shelf Registration.  Subject to the terms and conditions of this Agreement, the Company covenants and agrees that as promptly as reasonably practicable after the Closing Date (and in any event no later than the date that is 60 days after the Closing Date (the “Registration Deadline”)), the Company shall have prepared and filed with the SEC a Shelf Registration Statement covering all Registrable Securities (or otherwise designate an existing Shelf Registration Statement filed with the SEC to cover the Registrable Securities), and, to the extent the Shelf Registration Statement has not theretofore been declared effective or is not automatically effective upon such filing, the Company shall use reasonable best efforts to cause such Shelf Registration Statement to be declared or become effective not later than the Registration Deadline and to keep such Shelf Registration Statement continuously effective and in compliance with the Securities Act and usable for resale of such Registrable Securities for a period from the date of its initial effectiveness until such time as there are no Registrable Securities remaining (including by refiling such Shelf Registration Statement (or a new Shelf Registration Statement) if the initial Shelf Registration Statement expires).   

(2)               Underwritten Offerings.  Any registration pursuant to this Section 4.1(a) shall be effected by means of a shelf registration under the Securities Act (a “Shelf Registration Statement”) in accordance with the methods and distribution set forth in the Shelf Registration Statement and Rule 415.  If the Investor intends to distribute any Registrable Securities by means of an underwritten offering (an “Underwritten Offering”), it shall promptly so advise the Company in writing, and the Company shall include such information in a written notice to the Other Investors that have registration rights under the applicable Purchase Agreements within ten days of the Company’s receipt of such notice from the Investor.  If the Other Investors, to the extent they have registration rights under the applicable Purchase Agreements, request inclusion of their Registrable Securities in the Underwritten Offering, or the Company notifies the Investor of a request by the Company to include any securities in the Underwritten Offering, the Investor shall offer to include such securities of such Other Investors and the Company in the Underwritten Offering but may condition such offer on their acceptance of the further applicable provisions of this Section 4.1(a).  The managing underwriters in any Underwritten Offering pursuant to this Section 4.1(a)(2) shall be selected by the Company and shall be reasonably acceptable to holders of a majority of the Registrable Securities participating in the Underwritten Offering.  All holders proposing to distribute their securities through such Underwritten Offering shall enter into an underwriting agreement in customary form with the underwriters so 

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selected for such Underwritten Offering.  Notwithstanding any other provision of this Section 4.1(a)(2), if the managing underwriters advise the Company that in their reasonable opinion the number of securities requested to be included in such Underwritten Offering exceeds the number that can be sold without adversely affecting the marketability of such offering (including an adverse effect on the per share offering price), the Company shall so advise the Investor and the Other Investors holding Registrable Securities that would otherwise be included in such Underwritten Offering, and the number of securities that may be included in such Underwritten Offering shall be allocated as follows:  (A) first, among the Investor and the Other Investors that have elected to participate in the Underwritten Offering, pro rata based on the Registrable Securities requested to be included in the Underwritten Offering by such holders, until such holders have included in the Underwritten Offering all Registrable Securities requested by such holders to be included, (B) second, to the Company, until the Company has included in the Underwritten Offering all securities requested by it to be included, and (C) third, among any other holders of securities of the Company requesting to be included in such Underwritten Offering, pro rata based on the number of securities requested to be included in such Underwritten Offering by each such holder.  The Investor may request a maximum of two Underwritten Offerings (excluding any offering that is not completed, provided  that the Investor has reimbursed the Company for all reasonable and documented out of pocket fees and expenses incurred by the Company in connection with any such offering which is not completed due to actions or elections of the Investor); provided  that the Company shall not be required to facilitate an Underwritten Offering unless the expected gross proceeds from such offering exceed $10,000,000; provided, further, that the Company shall not be required to facilitate an Underwritten Offering if there has been one or more Underwritten Offerings pursuant to this Agreement or any of the other Purchase Agreements during the six-month period prior to the date on which the Investor makes such request for an Underwritten Offering.

 

(3)               The Company shall not be required to effect a registration (including a resale of Registrable Securities from an effective Shelf Registration Statement) or an underwritten offering pursuant to this Section 4.1(a):  (A) with respect to securities that are not Registrable Securities; (B) during any Scheduled Black-out Period; or (C) if the Company has notified the Investor that in the good faith judgment of the Board of Directors, it would be materially detrimental to the Company or its securityholders for such registration or underwritten offering to be effected at such time, in which event the Company shall have the right to defer such registration or underwritten offering for a period of not more than 60 days after receipt of the request of the Investor; provided  that such right to delay a registration or underwritten offering shall be exercised by the Company (i) only if the Company has generally exercised (or is concurrently exercising) similar black-out rights against holders of similar securities that have registration rights, to the extent permitted by the terms of such registration rights, (ii) not more than two times in any 12-month period and (iii) not more than 90 days in the aggregate in any 12-month period.

(4)               Piggyback Registration.  Whenever the Company proposes to register any of its equity securities, other than a registration pursuant to Section 4.1(a)(1) or a Special Registration, and the registration form to be filed may be used for the registration or qualification for distribution of Registrable Securities, the Company will give prompt written notice to the Investor and the Other Investors, to the extent they have registration rights under the applicable Purchase Agreements, of its intention to effect such a registration (but in no event less than 

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10 days prior to the anticipated filing date) and, subject to clause (6) below, will include in such registration all Registrable Securities with respect to which the Company has received written requests for inclusion therein within five business days after the date of the Company’s notice (a “Piggyback Registration”).  The Investor may withdraw its Registrable Securities from such Piggyback Registration by giving written notice to the Company and the managing underwriter, if any, on or before the fifth business day prior to the planned effective date of such Piggyback Registration.  The Company may terminate or withdraw any registration under this Section 4.1(a)(4) prior to the effectiveness of such registration, whether or not the Investor has elected to include Registrable Securities in such registration.  “Special Registration”  means the registration of (A) equity securities and/or options or other rights in respect thereof solely registered on Form S-4 or Form S-8 (or a successor form) or (B) shares of equity securities and/or options or other rights in respect thereof to be offered to directors, members of management, employees, consultants, customers, lenders or vendors of the Company or the Company Subsidiaries or in connection with dividend reinvestment plans.

 

(5)               If the registration referred to in Section 4.1(a)(4) is proposed to be underwritten, the Company will so advise the Investor and such Other Investors as part of the written notice given pursuant to Section 4.1(a)(4).  In such event, the right of the Investor to registration pursuant to this Section 4.1(a) will be conditioned upon the Investor’s participation in such underwriting and the inclusion of the Investor’s Registrable Securities in the underwriting, and the Investor will (together with the Company and the other persons distributing their securities through such underwriting) enter into an underwriting agreement in customary form with the underwriter or underwriters selected for such underwriting by the Company.  If the Investor disapproves of the terms of the underwriting, such person may elect to withdraw therefrom by written notice to the Company and the managing underwriter.

(6)               If a Piggyback Registration under Section 4.1(a)(4) relates to an underwritten offering on behalf of the Company, and the managing underwriters advise the Company that in their reasonable opinion the number of securities requested to be included in such offering exceeds the number that can be sold without adversely affecting the marketability of such offering (including an adverse effect on the per share offering price), the Company will include in such registration or prospectus only such number of securities that in the reasonable opinion of such underwriters can be sold without adversely affecting the marketability of the offering (including an adverse effect on the per share offering price), which securities will be so included in the following order of priority:  (i) first, the securities that the Company proposes to sell, until the Company has included in the underwriting all securities requested by it to be included,  (ii) second, the Registrable Securities of the Investor and the Other Investors that have requested registration pursuant to Section 4.1(a)(4), pro rata based on the Registrable Securities requested to be included in such underwriting by such holders, until such holders have included in the underwriting all Registrable Securities requested by such holders to be included, and (iii) third, among any other holders of securities of the Company requested to be included in such underwriting, pro rata based on the number of securities requested to be included in such underwriting by each such holder.

(b)        Expenses of Registration.  All Selling Expenses incurred in connection with any registrations hereunder shall be borne by the holders of the securities so registered pro rata on the basis of the aggregate offering or sale price of the securities so registered.

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(c)                Obligations of the Company.  Whenever required to effect the registration of any Registrable Securities or facilitate the distribution of Registrable Securities pursuant to an effective Shelf Registration Statement, the Company shall, as expeditiously as reasonably practicable:

(1)               prepare and file with the SEC a prospectus supplement with respect to a proposed offering of Registrable Securities pursuant to an effective registration statement, subject to this Section 4.1(c), and keep such registration statement effective or such prospectus supplement current until the securities described therein are no longer Registrable Securities;

(2)               prepare and file with the SEC such amendments and supplements to the applicable registration statement and the prospectus or prospectus supplement used in connection with such registration statement as may be necessary to comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such registration statement;

(3)               furnish to the Investor and any underwriters such number of copies of the applicable registration statement and each such amendment and supplement thereto (including in each case all exhibits, including those incorporated by reference) and of a prospectus, including a preliminary prospectus, in conformity with the requirements of the Securities Act, and such other documents as they may reasonably request in order to facilitate the disposition of Registrable Securities owned or to be distributed by them;

(4)               use its reasonable best efforts to register and qualify the securities covered by such registration statement under such other securities or blue sky laws of such jurisdictions as shall be reasonably requested by the Investor or any managing underwriter(s), to keep such registration or qualification in effect for so long as such registration statement remains in effect and to take any other action which may be reasonably necessary to enable such seller to consummate the disposition in such jurisdictions of the securities owned by the Investor; provided  that the Company shall not be required in connection therewith or as a condition thereto to qualify to do business or to file a general consent to service of process in any such states or jurisdictions; 

(5)               notify each holder of Registrable Securities at any time when a prospectus relating thereto is required to be delivered under the Securities Act of the happening of any event as a result of which the applicable prospectus, as then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing; 

(6)               give written notice to the Investor:

(A)             when any registration statement filed pursuant to Section 4.1(a) or any amendment thereto has been filed with the SEC (except for any amendment 

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effected by the filing of a document with the SEC pursuant to the Exchange Act) and when such registration statement or any post-effective amendment thereto has become effective;

 

(B)              of any request by the SEC for amendments or supplements to any registration statement or the prospectus included therein or for additional information;

(C)              of the issuance by the SEC of any stop order suspending the effectiveness of any registration statement or the initiation of any proceedings for that purpose;

(D)             of the receipt by the Company or its legal counsel of any notification with respect to the suspension of the qualification of the Common Stock for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose;

(E)              of the happening of any event that requires the Company to make changes in any effective registration statement or the prospectus related to the registration statement in order to make the statements therein not misleading (which notice shall be accompanied by an instruction to suspend the use of the prospectus until the requisite changes have been made); and

(F)               if at any time the representations and warranties of the Company contained in any underwriting agreement contemplated by Section 4.1(c)(10) cease to be true and correct;

(7)               use its reasonable best efforts to prevent the issuance or obtain the withdrawal of any order suspending the effectiveness of any registration statement referred to in Section 4.1(c)(6)(C) at the earliest practicable time;

(8)               upon the occurrence of any event contemplated by Section 4.1(c)(5) or 4.1(c)(6)(E), promptly prepare a post-effective amendment to such registration statement or a supplement to the related prospectus or file any other required document so that, as thereafter delivered to the Investor and any underwriters, the prospectus will not contain an untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading.  If the Company notifies the Investor in accordance with Section 4.1(c)(6)(E) to suspend the use of the prospectus until the requisite changes to the prospectus have been made, then the Investor and any underwriters shall suspend use of such prospectus and use their reasonable best efforts to return to the Company all copies of such prospectus (at the Company’s expense) other than permanent file copies then in Investor’s or underwriter’s possession.  The total number of days that any such suspension may be in effect in any 180-day period shall not exceed 90 days;

(9)               use reasonable best efforts to procure the cooperation of the Company’s transfer agent in settling any offering or sale of Registrable Securities, including with respect to the transfer of physical stock certificates into book-entry form in accordance with any procedures reasonably requested by the Investor or any managing underwriter(s);

 

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(10)           if an underwritten offering is requested pursuant to Section 4.1(a)(2), enter into an underwriting agreement in customary form, scope and substance and take all such other actions reasonably requested by the holders of a majority of the Registrable Securities being sold in connection therewith or by the managing underwriter(s), if any, to expedite or facilitate the underwritten disposition of such Registrable Securities, and in connection therewith in any underwritten offering (including making members of management and executives of the Company available to participate in “road shows,” similar sales events and other marketing activities), (A) make such representations and warranties to the selling stockholders and the managing underwriter(s), if any, with respect to the business of the Company and its subsidiaries, and the Shelf Registration Statement, prospectus and documents, if any, incorporated or deemed to be incorporated by reference therein, in each case, in customary form, substance and scope, and, if true, confirm the same if and when requested, (B) use its reasonable best efforts to furnish the underwriters with opinions of counsel to the Company, addressed to the managing underwriter(s), if any, covering the matters customarily covered in such opinions requested in underwritten offerings, (C) use its reasonable best efforts to obtain “cold comfort” letters from the independent certified public accountants of the Company (and, if necessary, any other independent certified public accountants of any business acquired by the Company for which financial statements and financial data are included in the Shelf Registration Statement) who have certified the financial statements included in such Shelf Registration Statement, addressed to each of the managing underwriter(s), if any, such letters to be in customary form and covering matters of the type customarily covered in “cold comfort” letters, (D) if an underwriting agreement is entered into, the same shall contain indemnification provisions and procedures customary in underwritten offerings, and (E) deliver such documents and certificates as may be reasonably requested by the holders of a majority of the Registrable Securities being sold in connection therewith, their counsel and the managing underwriter(s), if any, to evidence the continued validity of the representations and warranties made pursuant to clause (A) above and to evidence compliance with any customary conditions contained in the underwriting agreement or other agreement entered into by the Company.  Notwithstanding anything contained herein to the contrary, the Company shall not be required to enter into any underwriting agreement or permit any underwritten offering absent an agreement by the applicable underwriter(s) to indemnify the Company in form, scope and substance as is customary in underwritten offerings by the Company;

(11)           make available for inspection by a representative of the Investor, the managing underwriter(s), if any, and any attorneys or accountants retained by the investor or managing underwriter(s), at the offices where normally kept, during reasonable business hours, financial and other records, pertinent corporate documents and properties of the Company, and cause the officers, directors and employees of the Company to supply all information in each case reasonably requested (and of the type customarily provided in connection with due diligence conducted in connection with a registered public offering of securities) by any such representative, managing underwriter(s), attorney or accountant in connection with such Shelf Registration Statement;

(12)           cause all such Registrable Securities to be listed on each securities exchange on which similar securities issued by the Company are then listed or, if no similar securities issued by the Company are then listed on any securities exchange, use its reasonable best efforts to cause all such Registrable Securities to be listed on the New York Stock Exchange or the NASDAQ Stock Market, as determined by the Company; 

 

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(13)           if requested by holders of a majority of the Registrable Securities being registered and/or sold in connection therewith, or the managing underwriter(s), if any, promptly include in a prospectus supplement or amendment such information as the holders of a majority of the Registrable Securities being registered and/or sold in connection therewith or managing underwriter(s), if any, may reasonably request in order to permit the intended method of distribution of such securities and make all required filings of such prospectus supplement or such amendment as soon as practicable after the Company has received such request; 

(14)           timely provide to its security holders earning statements satisfying the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder;

(15)           reasonably cooperate with the Investor and each underwriter, if any, participating in the disposition of such Registrable Securities and their respective counsel in connection with any filings required to be made with the FINRA;

(16)           not later than the effective date of the applicable registration statement, provide a CUSIP number for all Registrable Securities; and 

(17)           cooperate with the Investor and each underwriter, if any, to facilitate the timely preparation and delivery of certificates representing the Registrable Securities to be sold under the registration statement in a form eligible for deposit with The Depository Trust Company.

(d)               Suspension of Sales.  During any Scheduled Black-out Period or upon receipt of written notice from the Company that a registration statement, prospectus or prospectus supplement contains or may contain an untrue statement of a material fact or omits or may omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading, or that circumstances exist that make inadvisable use of such registration statement, prospectus or prospectus supplement, the Investor shall forthwith discontinue disposition of Registrable Securities until termination of such Scheduled Black-out Period or until the Investor has received copies of a supplemented or amended prospectus or prospectus supplement, or until the Investor is advised in writing by the Company that the use of the prospectus and, if applicable, prospectus supplement may be resumed, and, if so directed by the Company, the Investor shall deliver to the Company (at the Company’s expense) all copies, other than permanent file copies then in the Investor’s possession, of the prospectus and, if applicable, prospectus supplement covering such Registrable Securities current at the time of receipt of such notice.  The total number of days that any such suspension may be in effect in any 180-day period shall not exceed 60 days.

(e)                Termination of Registration Rights.  The Investor’s registration rights as to any securities held by the Investor shall not be available upon the earlier of (A) the first time the Investor ceases to hold any Registrable Securities and (B) the time when the Investor is permitted to sell its Registrable Securities pursuant to Rule 144 without volume limitations.

(f)                 Furnishing Information. 

 

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(1)               The Investor shall not use any free writing prospectus (as defined in Rule 405) in connection with the sale of Registrable Securities without the prior written consent of the Company.

(2)               It shall be a condition precedent to the obligations of the Company to take any action pursuant to Section 4.1(c) that the Investor and the underwriters, if any, shall furnish to the Company such information regarding themselves, the Registrable Securities held by the Investor and the intended method of disposition of such securities as shall be required to effect the registered offering of such Registrable Securities.

(g)               Indemnification. 

(1)               The Company agrees to indemnify the Investor and, if the Investor is a person other than an individual, the Investor’s officers, directors, employees, agents, representatives and Affiliates, and each person, if any, that controls the Investor within the meaning of the Securities Act (each, an “Indemnitee”), against any and all actions, suits, claims, proceedings, costs, losses, liabilities, damages, expenses (including reasonable attorneys’ fees and disbursements), amounts paid in settlement and other costs (collectively, “Losses”) arising out of or based upon any untrue statement or alleged untrue statement of material fact contained in any registration statement, including any preliminary prospectus or final prospectus contained therein or any amendments or supplements thereto or any documents incorporated therein by reference or contained in any free writing prospectus (as such term is defined in Rule 405) prepared by the Company or authorized by it in writing for use by the Investor (or any amendment or supplement thereto); or any omission to state therein a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; provided  that the Company shall not be liable to such Indemnitee in any such case to the extent that any such Losses arise out of or are based upon (A) an untrue statement or omission made in such registration statement, including any such preliminary prospectus or final prospectus contained therein or any such amendments or supplements thereto or contained in any free writing prospectus (as such term is defined in Rule 405) prepared by the Company or authorized by it in writing for use by the Investor (or any amendment or supplement thereto) in reliance upon and in conformity with information regarding the Investor or its plan of distribution or ownership interests that was furnished in writing to the Company by the Investor for use in connection with such registration statement, including any such preliminary prospectus or final prospectus contained therein or any such amendments or supplements thereto, or (B) offers or sales effected by or on behalf of such Indemnitee “by means of” (as defined in Rule 159A) a “free writing prospectus” (as defined in Rule 405) that was not authorized in writing by the Company.

(2)               If the indemnification provided for in Section 4.1(g)(1) is unavailable to an Indemnitee with respect to any Losses or is insufficient to hold the Indemnitee harmless as contemplated therein, then the Company, in lieu of indemnifying such Indemnitee, shall contribute to the amount paid or payable by such Indemnitee as a result of such Losses in such proportion as is appropriate to reflect the relative fault of the Indemnitee, on the one hand, and the Company, on the other hand, in connection with the statements or omissions that resulted in such Losses, as well as any other relevant equitable considerations.  The relative fault of the Company, on the one hand, and of the Indemnitee, on the other hand, shall be determined by ref-

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erence to, among other factors, whether the untrue statement of a material fact or omission to state a material fact relates to information supplied by the Company or by the Indemnitee and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission; the Company and the Investor agree that it would not be just and equitable if contribution pursuant to this Section 4.1(g)(2) were determined by pro rata allocation or by any other method of allocation that does not take account of the equitable considerations referred to in this Section 4.1(g).  No Indemnitee guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from the Company if the Company is not guilty of such fraudulent misrepresentation.

 

(h)               Reserved.   

(i)                 Holdback.  With respect to any underwritten offering of Registrable Securities by the Investor pursuant to this Section 4.1, the Company agrees not to effect (other than pursuant to such registration or pursuant to a Special Registration) any public sale or distribution, or to file any Shelf Registration Statement (other than such registration or a Special Registration) covering any of its equity securities, or any securities convertible into or exchangeable or exercisable for such securities, during the period not to exceed 10 days prior and 60 days following the effective date of such offering.  The Company also agrees to cause each of its directors and senior executive officers to execute and deliver customary lockup agreements in such form and for such time period up to 90 days as may be requested by the managing underwriter.   

(j)                 Rule 144; Rule 144A Reporting.  With a view to making available to the Investor the benefits of certain rules and regulations of the SEC which may permit the sale of the Registrable Securities to the public without registration, so long as the Investor owns any Registrable Securities, the Company agrees to use its reasonable best efforts to:

(1)               make and keep public information available, as those terms are understood and defined in Rule 144(c)(1) or any similar or analogous rule promulgated under the Securities Act;

(2)               file with the SEC, in a timely manner, all reports and other documents required of the Company under the Exchange Act, and if at any time the Company is not required to file such reports, make available, upon the request of the Investor, such information necessary to permit sales pursuant to Rule 144A (including the information required by Rule 144A(d)(4) and the Securities Act); 

(3)               furnish to the Investor forthwith upon request:  a written statement by the Company as to its compliance with the reporting requirements of Rule 144 under the Securities Act, and of the Exchange Act; a copy of the most recent annual or quarterly report of the Company; and such other reports and documents as the Investor may reasonably request in availing itself of any rule or regulation of the SEC allowing it to sell Registrable Securities without registration under the Securities Act; and 

(4)               take such further action as the Investor may reasonably request, all to the extent required from time to time to enable the Investor to sell Registrable Securities without registration under the Securities Act.

 

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(k)               Certain Definitions.  As used in this Section 4.1, the following terms shall have the following respective meanings:

(1)               “register,” “registered,” and “registration” shall refer to a registration effected by preparing and (A) filing a registration statement in compliance with the Securities Act, and the declaration or ordering of effectiveness of such registration statement, or (b) filing a prospectus and/or prospectus supplement in respect of an appropriate effective registration statement on Form S-3;

(2)               “Registrable Securities” means (A) the Shares and the shares of Common Stock issued by the Company pursuant to the other Purchase Agreements and (B) any equity securities issued or issuable directly or indirectly with respect to such shares of Common Stock by way of stock dividend or stock split or in connection with a combination of shares, recapitalization, reclassification, merger, amalgamation, arrangement, consolidation or other reorganization, provided  that, once issued, such securities will not be Registrable Securities when (i) they are sold pursuant to an effective registration statement under the Securities Act, (ii) they shall have ceased to be outstanding or (iii) they have been sold in a private transaction in which the transferor’s rights under this Agreement are not assigned to the transferee of the securities.  No Registrable Securities may be registered under more than one registration statement at one time;

(3)               “Registration Expenses” means all expenses incurred by the Company in effecting any registration pursuant to this Agreement (whether or not any registration or prospectus becomes effective or final) or otherwise complying with its obligations under this Section 4.1, including all registration, filing and listing fees, printing expenses, fees and disbursements of counsel for the Company, blue sky fees and expenses, expenses incurred by the Company in connection with any “road show”  and expenses of the Company’s independent accountants in connection with any regular or special reviews or audits incident to or required by any such registration; provided  that Registration Expenses shall not include Selling Expenses and the compensation of regular employees of the Company, which shall be paid in any event by the Company;

(4)               “Rule 144,” “Rule 144A,” “Rule 158,” “Rule 159A,” “Rule 405” and “Rule 415” mean, in each case, such rule promulgated under the Securities Act (or any successor provision), as the same shall be amended from time to time;

(5)               “Scheduled Black-out Period” means the period from and including the last day of a fiscal quarter of the Company to and including the first business day after the day on which the Company publicly releases its earnings for such fiscal quarter; and  

(6)               “Selling Expenses” means all discounts, selling commissions and stock transfer taxes applicable to the sale of Registrable Securities and fees and disbursements of counsel for the Investor.

 

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(l)                 Forfeiture.  At any time, the Investor may elect to forfeit its rights set forth in this Section 4.1 from that date forward; provided  that the Investor shall nonetheless be entitled to participate under Sections 4.1(a)(4)-(6) in any Pending Underwritten Offering to the same extent that the Investor would have been entitled to if the Investor had not withdrawn; provided, further, that no such forfeiture shall terminate the Investor’s rights or obligations under Section 4.1(g) with respect to any prior registration or Pending Underwritten Offering.  “Pending Underwritten Offering” means, with respect to the forfeiture of rights pursuant to this Section 4.1(l), any underwritten offering of Registrable Securities in which the Investor has advised the Company of its intent to register its Registrable Securities either pursuant to Section 4.1(a)(2) or 4.1(a)(4) prior to the date of the Investor’s forfeiture.

    4.2.       Legend. (a)  The Investor agrees that all certificates (or book-entry recordation) or other instruments representing the Shares subject to this Agreement will bear a legend (or restrictive code) substantially to the following effect:

“THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR SECURITIES LAWS OF ANY STATE AND MAY NOT BE TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF EXCEPT WHILE A REGISTRATION STATEMENT RELATING THERETO IS IN EFFECT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT OR SUCH LAWS.”

(b)               The Investor acknowledges that the Shares have not been registered under the Securities Act or under any state securities laws and agrees that it will not sell or otherwise dispose of any of the Shares, except in compliance with the registration requirements or exemption provisions of the Securities Act and any other applicable securities laws.  Upon the request of the Investor and the receipt by the Company of an opinion of counsel reasonably satisfactory to the Company to the effect that the restriction referenced in the foregoing legend (or restrictive code) is no longer required in order to ensure compliance with the Securities Act or applicable state laws, as the case may be, the Company shall promptly cause the legend to be removed from any certificate (or restrictive code from any book entry recordation).  

    4.3.       NASDAQ Listing.  The Company shall use its reasonable best efforts to cause the Shares to be approved for listing on the NASDAQ Stock Market, subject to official notice of issuance, as promptly as practicable. 

     4.4       Certain Transactions.  The Company will not merge or consolidate into, or sell, transfer or lease all or substantially all of its assets to, any other party unless the successor, transferee or lessee party, as the case may be (if not the Company), expressly assumes the due and punctual performance and observance of each and every covenant and condition of this Agreement to be performed and observed by the Company.

    4.5        Witholding.  The Company shall be entitled to deduct and withhold from amounts payable to the Investor or any of its Affiliates in respect of the Shares such amounts as it is required to deduct and withhold under applicable law.  To the extent that amounts are so 

withheld by the Company, such withheld amounts shall be treated for all purposes as having been paid to the Investor or any such Affiliates in respect of which such deduction and withholding was made by the Company.  Prior to the Investor or any of its Affiliates receiving any Shares, the Investor shall, and cause such Affiliates to, deliver to the Company a duly executed Internal Revenue Service (“IRS”) Form W-9 or the appropriate IRS Form W-8, as applicable, and such other IRS forms as may be reasonably requested by the Company from time to time.  The Investor shall, and cause such Affiliates to, update all such IRS forms, as appropriate, from time to time.

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    4.6        Notice of Control. The Company shall use commercially reasonable efforts to notify the Investor prior to taking any action that would, to the Company’s knowledge, cause (a) the Investor’s equity of the Company (together with equity owned by such Investor’s Affiliates (as such term is used under the BHC Act)) to exceed 33.3% of the Company’s total equity or (b) the Investor’s ownership of any class of voting securities of the Company (together with the ownership by such Investor’s Affiliates (as such term is used under the BHC Act) of voting securities of the Company) to exceed 9.9% or otherwise cause the Investor to “control” the Company under and for purposes of the BHC Act, the Change in Bank Control Act or any rules or regulations promulgated thereunder (or any successor provisions).  Notwithstanding anything to the contrary in this Agreement, the Investor (together with its Affiliates (as such term is used under the BHC Act)) shall not have the ability to purchase more than 33.3% of the Company’s total equity or to own, control or have power to vote in excess of 9.9% of the total outstanding voting securities of the Company. 

ARTICLE V

Termination

     5.1        Termination.  This Agreement may be terminated (a) by mutual agreement of the parties hereto or (b) by either party upon written notice to the other if the Closing has not been consummated on or prior to 5:00 p.m., New York City time, on the fifteenth (15th) day following the date hereof, provided  that the right to terminate this Agreement under Section 5.1(b) shall not be available to a party whose failure to comply with its obligations under this Agreement has been the cause of or resulted in the failure of the Closing to occur on or before such time.

                             5.2       Effects of Termination.  In the event of any termination of this Agreement as provided in Section 5.1, this Agreement (other than Section 3.2, this Section 5.2 and Article VI and all applicable defined terms, which shall remain in full force and effect) shall forthwith become wholly void and of no further force and effect and, if the Closing has not yet occurred, any funds held by the Escrow Agent on behalf of the Investor shall promptly be returned to the Investor; provided that nothing herein shall relieve any party from liability for willful breach of this Agreement or breach of this Agreement prior to any termination hereof.

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ARTICLE VI

Miscellaneous

    6.1        Survival.  None of the representations and warranties set forth in this Agreement shall survive the Closing.  Except as otherwise provided herein, all covenants and agreements contained herein, other than those which by their terms are to be performed in whole or in part after the Closing Date, shall terminate as of the Closing Date.

     6.2       Amendment.  No amendment of this Agreement will be effective unless made in writing and signed by an officer of a duly authorized representative of each party.

     6.3        Waiver.  No failure or delay by any party in exercising any right, power or privilege hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege.  No waiver will be effective unless it is in a writing signed by a duly authorized officer of the waiving party that makes express reference to the provision or provisions subject to such waiver.

     6.4       Counterparts.  For the convenience of the parties hereto, this Agreement may be executed in any number of separate counterparts, each such counterpart being deemed to be an original instrument, and all such counterparts will together constitute the same agreement.  Executed signature pages to this Agreement may be delivered by facsimile or other electronic means and will be deemed as sufficient as if actual signature pages had been delivered.

     6.5       Governing Law; Jurisdiction.  This Agreement shall be construed, and the rights and obligations of the parties hereunder determined, in accordance with the substantive laws of the State of New York, without regard to its conflict-of-laws principles.  For the purposes of any suit, action or proceeding based upon, arising out of or relating to this Agreement or the negotiation, execution or performance hereof, the parties hereby expressly submit to the jurisdiction of all federal and state courts sitting within the confines of the federal Eastern District of New York (the “Venue Area”) and consent that any order, process, notice of motion or other application to or by any such court or a judge thereof may be served within or without such court’s jurisdiction by registered mail or by personal service in accordance with Section 6.7.  The parties agree that such courts shall have the exclusive jurisdiction over any such suit, action or proceeding commenced by either or both of said parties.  Each party hereby irrevocably waives any objection that it may now or hereafter have to the laying of venue of any suit, action or proceeding based upon, arising out of or relating to this Agreement or the negotiation, execution or performance hereof, brought in any federal or state court sitting within the confines of the Venue Area and hereby further irrevocably waives any claim that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum.

     6.6        WAIVER OF JURY TRIAL.  EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.  EACH OF the Parties HERETO hereby (a) certifies that no representative, agent or attorney of 

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the other party has represented, expressly or otherwise, that such other party would not, in the event of litigation, seek to enforce the foregoing waiver and (b) acknowledges that it has been induced to enter into this Agreement and the transactions contemplated by this Agreement, as applicable, by, among other things, the mutual waivers and certifications contained in thiS SECTION 6.6. 

 

     6.7       Notices.  Any notice, request, instruction or other document to be given hereunder by any party to the other will be in writing and will be deemed to have been duly given (a) on the date of delivery if delivered personally or by facsimile, upon confirmation of receipt, (b) on the first business day following the date of dispatch if delivered by a recognized next-day courier service or (c) on the third business day following the date of mailing if delivered by registered or certified mail, return receipt requested, postage prepaid.  All notices hereunder shall be delivered as set forth below, or pursuant to such other instructions as may be designated in writing by the party to receive such notice.

(a)                If to the Company:

Suffolk Bancorp
4 West Second Street, P.O. Box 9000
Riverhead, NY  11901
Facsimile:  (631) 727-2638
Attention:  General Counsel

with a copy to (which copy alone shall not constitute notice):

Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, NY 10019-6150
Facsimile:  (212) 403-2000
Attn:   David E. Shapiro, Esq.

 

(b)               If to the Investor, to the address for notice set forth on Schedule A. 

     6.8       Entire Agreement; Assignment.  (a)  This Agreement (including the Disclosure Schedules hereto) constitutes the entire agreement, and supersede all other prior agreements, understandings, representations and warranties, both written and oral, between the parties, with respect to the subject matter hereof; (b) the terms and conditions of this Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective successors and permitted assigns; and (c) this Agreement will not be assignable by a party, by operation of law or otherwise, without the prior written consent of the other party (any attempted assignment in contravention hereof being null and void).

     6.9.       Other Definitions.  Wherever required by the context of this Agreement, the singular shall include the plural and vice versa, and the masculine gender shall include the feminine and neuter genders and vice versa, and references to any agreement, document or instrument shall be deemed to refer to such agreement, document or instrument as amended, supplemented or modified from time to time.  All article, section, paragraph or clause references not attributed to a particular document shall be references to such parts of this Agreement, and all exhibit, annex and schedule references not attributed to a particular document shall be references to such exhibits, annexes and schedules to this Agreement.  When used herein:  

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(a)                the term “subsidiary” means those corporations and other persons of which such person owns or controls more than 50% of the outstanding equity securities either directly or indirectly through an unbroken chain of entities as to each of which more than 50% of the outstanding equity securities is owned directly or indirectly by its parent; provided, however, that there shall not be included any such entity to the extent that the equity securities of such entity were acquired in satisfaction of a debt previously contracted in good faith or are owned or controlled in a bona fide fiduciary capacity;

(b)               the term “Affiliate” means, with respect to any person, any person directly or indirectly controlling, controlled by or under common control with, such other person.  For purposes of this definition, “control” (including, with correlative meanings, the terms “controlled by” and “under common control with”) when used with respect to any person, means the possession, directly or indirectly, of the power to cause the direction of management and/or policies of such person, whether through the ownership of voting securities by contract or otherwise;

(c)                the word “or” is not exclusive;

(d)               the words “including,” “includes,” “included” and “include” are deemed to be followed by the words “without limitation”;  

(e)                the terms “herein,” “hereof” and “hereunder” and other words of similar import refer to this Agreement as a whole and not to any particular section, paragraph or subdivision;

(f)                 “business day” means any day except Saturday, Sunday and any day which shall be a legal holiday or a day on which banking institutions in the State of New York generally are authorized or required by law or other governmental actions to close;

(g)               “person” has the meaning given to it in Section 3(a)(9) of the Exchange Act and as used in Sections 13(d)(3) and 14(d)(2) of the Exchange Act;

(h)               “Beneficial Owner” (and the correlative term “Beneficially Owned”) has the meaning given to it in Rules 13d-3 and 13d-5 of the Exchange Act; and

(i)                 the term “knowledge of the Company” or any similar formulation of knowledge shall mean the actual knowledge of the officers of the Company listed on Section 6.9(i) of the Disclosure Schedule of the Company.

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     6.10      Captions.  The article, section, paragraph and clause captions herein are for convenience of reference only, do not constitute part of this Agreement and will not be deemed to limit or otherwise affect any of the provisions hereof.

     6.11     Severability.  If any provision of this Agreement or the application thereof to any person (including the officers and directors of the Investor and the Company) or circumstance is determined by a court of competent jurisdiction to be invalid, void or unenforceable, the remaining provisions hereof, or the application of such provision to persons or circumstances other than those as to which it has been held invalid or unenforceable, will remain in full force and effect and shall in no way be affected, impaired or invalidated thereby, so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any party.  Upon such determination, the parties shall negotiate in good faith in an effort to agree upon a suitable and equitable substitute provision to effect the original intent of the parties.

    6.12     No Third-Party Beneficiaries.  Nothing contained in this Agreement, expressed or implied, is intended to confer upon any person other than the parties hereto any benefit right or remedies, except that the provisions of Section 4.1 shall inure to the benefit of the persons referred to in such Section.

    6.13       Specific Performance.  The parties agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached.  Accordingly, each of the parties shall be entitled to specific performance of the terms hereof, including an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement, this being in addition to any other remedy to which such party is entitled at law or in equity.  Each of the parties hereby further waives (a) any defense in any action for specific performance that a remedy at law would be adequate and (b) any requirement under any law to post security as a prerequisite to obtaining equitable relief. 

     6.14.     Public Announcements.   The Company shall, by 9:30 a.m., New York City time, on the first (1st) Business Day following the Closing Date, issue one or more press releases or file one or more reports with the SEC (collectively, the “Press Release”) disclosing all material, nonpublic information that the Company may have provided the Investor at any time prior to the filing of the Press Release in connection with the transactions contemplated by this Agreement.  The Company and Investor agree that the Press Release shall be a press release of the Company, provided  that the Company shall not publicly disclose the name of the Investor or any Affiliate or investment adviser of the Investor in the Press Release without the prior written consent of the Investor, except to the extent such disclosure is required by applicable law or regulation, at the request of the staff of the SEC or any other Governmental Entity or under trading market regulations (in which case the Company shall, to the extent permitted by applicable law, regulation or such request, provide the Investor with prior notice of such disclosure).  Until the issuance of the Press Release, neither party shall issue any press release or make any public statement or announcement with respect to this Agreement or the transactions contemplated hereby, except as required by law.

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6.15     Other Investors.  The Company agrees and acknowledges that the Investor shall not be responsible for the performance of the obligations of the investors party to the other Purchase Agreements.   

[signature page follows]

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IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by the duly authorized officers of the parties hereto as of the date first herein above written.

SUFFOLK BANCORP

By:                                                                  
Name: 
Title:  

 

 

 

____________________________________

 

By:                                                                  
Name:  
Title:  

 

 

 

 

Schedule A

Investor:                                                                      ___________________________

Shares:                                                                         ___________________________

Cash Proceeds (aggregate purchase price):                 ___________________________

 

Shares of Common Stock Beneficially 

Owned as of the date hereof (Section 2.3(d)):           ___________________________

 

Address for notice (Section 6.7):                                ___________________________

                                                                                    ___________________________

                                                                                    Facsimile: __________________

                                                                                    Attn: ______________________

 

Address for delivery of stock certificates:                 ___________________________

                                                                                    ___________________________

                                                                                    ___________________________

 

EIN:                                                                            ___________________________suffolkloanpurchaseagreement.htm - Generated by SEC Publisher for SEC Filing

	

   EXHIBIT 10.2

 

LOAN PURCHASE AGREEMENT

BETWEEN

THE SUFFOLK COUNTY NATIONAL BANK OF RIVERHEAD

AND

[●]

SEPTEMBER 19, 2012

 

 

 

Table of Contents

	

    

    

   ARTICLE I DEFINITIONS

    
	

   Page

    

   1

	

   ARTICLE II PURCHASE AND SALE OF THE LOANS

    
	

   6

	

   Section 2.1
	

   Purchase and Sale of the Loans
	

   6

	

   Section 2.2
	

   Reserved
	

   7

	

   Section 2.3
	

   Amount Payable at Closing 
	

   7

	

   Section 2.4
	

   Adjustments
	

   7

	

   Section 2.5
	

   Assumed Liabilities
	

   7

	

   Section 2.6
	

   Retained Rights 
	

   7

	

    
	

    

	

   ARTICLE III REPRESENTATIONS AND WARRANTIES OF PURCHASER
	

   8

	

   Section 3.1
	

   Representations and Warranties by Purchaser 
	

   8

	

    
	

    

	

   ARTICLE IV REPRESENTATIONS AND WARRANTIES OF SELLER
	

   10

	

    
	

    
	

    

	

   Section 4.1
	

   Representations and Warranties by Seller
	

   10

	

   Section 4.2
	

   Limited Representations and Warranties by Seller
	

   12

	

   Section 4.3
	

   Limitations
	

   13

	

   Section 4.4
	

   Survival of Representations and Warranties
	

   13

	

    
	

    
	

    

	

   ARTICLE V COVENANTS OF SELLER AND PURCHASER 
	

   14

	

    
	

    

	

   Section 5.1
	

   Permits, Authorizations, etc.
	

   14

	

   Section 5.2
	

   Litigation Cooperation
	

   14

	

   Section 5.3
	

   Document Handling
	

   14

	

   Section 5.4
	

   Public Announcements
	

   15

	

   Section 5.5
	

   Insurance
	

   15

	

   Section 5.6
	

   Reserved
	

   15

	

   Section 5.7
	

   Post-Closing Servicing By Seller
	

   15

	

   Section 5.8
	

   Additional Covenants
	

   15

	

    
	

    
	

    

	

   ARTICLE VI CLOSING
	

   16

	

    
	

    
	

    

	

   Section 6.1
	

   Closing
	

   16

	

   Section 6.2
	

   Closing Date
	

   17

	

   Section 6.3
	

   Transfer and Recordation Taxes; Responsibility for Recording
	

   18

	

   Section 6.4
	

   Closing Expenses
	

   18

	

   Section 6.5
	

   Escrow Amounts
	

   18

	

    
	

    
	

    

	

   ARTICLE VII DEFAULTS AND INDEMNIFICATION
	

   18

	

    
	

    
	

    

	

   Section 7.1
	

   Defaults, Seller’s Right to Cure
	

   18

	

   Section 7.2
	

   Purchaser’s Indemnification
	

   19

	

   Section 7.3
	

   Seller’s Indemnification
	

   19

	

   Section 7.4
	

   Procedure for Indemnification
	

   19

 

 

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ARTICLE VIII REPURCHASE PROCEDURES	

   Page

    

   20

    

	

   Section 8.1
	

   Repurchase
	

   20

	

   Section 8.2
	

   Transfer Documentation; Further Assurances; Transfer and Recordation Taxes and Fees
	

   20

	

   Section 8.3
	

   Conditions to Repurchase
	

   21

	

   Section 8.4
	

   Calculation of Repurchase Price
	

   22

	

   Section 8.5
	

   Remedies Exclusive
	

   23

	

    
	

    

	

   ARTICLE IX NOTICES
	

   23

	

   Section 9.1
	

   Notices 
	

   23

	

    
	

    

	

   ARTICLE X MISCELLANEOUS PROVISIONS
	

   24

	

    
	

    
	

    

	

   Section 10.1
	

   Severability
	

   24

	

   Section 10.2
	

   Amendment
	

   24

	

   Section 10.3
	

   Waiver
	

   24

	

   Section 10.4
	

   Headings
	

   25

	

   Section 10.5
	

   Construction
	

   25

	

   Section 10.6
	

   Assignment
	

   25

	

   Section 10.7
	

   Entire Agreement
	

   25

	

   Section 10.8
	

   Counterparts
	

   26

	

   Section 10.9
	

   Governing Law; Jurisdiction; and Venue
	

   26

	

   Section 10.10
	

   No Third-Party Beneficiaries
	

   26

	

   Section 10.11
	

   Waiver of Trial by Jury
	

   26

	 	 	 	 

 

 

SCHEDULES
Schedule A – Loan Schedule
Schedule B – Lien Schedule
Schedule C – ORE Loan Schedule

Schedule D – Outstanding Property Taxes

EXHIBITS
Exhibit 6.2(a)(i)(A) – Allonge to Note
Exhibit 6.2(a)(i)(B) – Affidavit of Lost Note
Exhibit 6.2(a)(ii) – Assignment of Mortgage
Exhibit 6.2(a)(iv) – Notice to Borrower
Exhibit 6.2(a)(v) – Limited Power of Attorney
Exhibit 6.2(a)(vi)(A) – Bill of Sale
Exhibit 6.2(a)(vi)(B) – Assignment and Acceptance of Interests

 

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LOAN PURCHASE AGREEMENT

THIS LOAN PURCHASE AGREEMENT is entered into as of the 19th day of September, 2012, by and between [●], a [●], having its principal office at [●] (“Purchaser”), and The Suffolk County National Bank of Riverhead, a national banking association, having its principal office at 4 West Second Street, P.O. Box 9000, Riverhead, NY 11901 (“Seller”). 

WITNESSETH

WHEREAS, Seller owns legal title to certain Loans (as hereinafter defined);

WHEREAS, Seller desires to sell the Loans to Purchaser on a whole-loan, servicing released basis, in accordance with the terms of this Agreement; and

WHEREAS, Purchaser desires to purchase the Loans, in accordance with the terms of this Agreement;

NOW, THEREFORE, in consideration of the mutual premises herein set forth and other valuable consideration, the receipt of which is hereby acknowledged, Seller and Purchaser agree as follows:

Article I

DEFINITIONS

For purposes of this Agreement, the following terms shall have the meanings indicated below:

Additional Advances means, with respect to any Loan, any advances made to or on behalf of the Borrower by Seller after the Cutoff Date pursuant to any commitment. 

Affiliate means with respect to any specified Person, any other Person that directly or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with the specified Person.  For purposes of this definition, the term “control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through ownership of voting stock, by contract or otherwise.

Agreement means this Loan Purchase Agreement, including all Addenda, Schedules and Exhibits, as the same may be amended, supplemented, restated or modified.

Allocated Bid Percentage means for each Loan, the Allocated Loan Price divided by the Unpaid Principal Balance. 

Allocated Loan Price means the individual price for each Loan, as set forth on the Loan Schedule, the aggregate of which equals the Base Purchase Price.

Assumed Liabilities means those duties, obligations and liabilities of Seller, if any, under the Loan Documents, including (a) all obligations and responsibilities of enforcing, 

servicing and administering the Loans (except as set forth in Section 5.7); (b) all of Seller’s obligations under each and every contract of insurance or guaranty then existing in respect of any Loan; and (c) all obligations of the holder of the Loan in respect of any Escrow Amounts.

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Base Purchase Price means $[●].

Bid Date means August 28, 2012.

Borrower means any current and unreleased obligor under a Note.

Business Day means any day other than a Saturday, Sunday or day on which the banks in the State of New York are authorized or obligated by Law to be closed.

Claim means any claim, demand or legal proceeding relating to any facts or circumstances for which either Seller or Purchaser may have an obligation to indemnify the other pursuant to this Agreement.

Closing means the exchange of documents and the payment of the Total Amount Payable to affect the sale of the Loans by Seller to Purchaser on the Closing Date as set forth in this Agreement.

Closing Date means September 19, 2012.

Collateral Documents means, with respect to each Loan, the Loan Documents which create or purport to create a security interest in or lien upon any property as security for the Loan contained in the Loan File, which may include a Mortgage, Security Agreement, UCC Financing Statement, assignment of rents, pledge agreement, guaranty, indemnification agreement, title insurance policies, tax and insurance escrows, fire and casualty insurance policies, flood hazard insurance policies, other insurance and other documents, agreements or instruments under which legal rights or obligations are created or exist, if any, that are contained in the Loan File.

Collateral Property means any collateral which is security for a Loan and is contained in the Loan File, including certificated securities, certificates of deposit and chattel paper.

Confidentiality Agreement means that certain letter agreement, dated [●], 2012, between Seller and Purchaser, as the same may be amended.

Cutoff Date means midnight on August 31, 2012.  

Environmental Law means any federal, state or local Law, statute, regulation or ordinance, and any judicial or administrative order or judgment thereunder, and any permit, approval, certification, license, notice or registration pertaining to health, industrial hygiene or the environmental or ecological conditions at, upon, under or within any Mortgaged Property or on or about any other site at, upon, under or within which Hazardous Substances from such property may be located, including, but not limited to, each of the following as to date or hereafter amended: the Comprehensive Environmental Response, Compensation and Liability Act of 1980, 42 U.S.C. §9601-9657; the Resource Conservation and Recovery Act of 1976, 42 U.S.C. §6901-6991i; the Toxic Substances Control Act, 15 U.S.C. §2601-2629; the Water 

Pollution Control Act (also known as the Clean Water Act), 33 U.S.C. §1251 et  seq.; the Clean Air Act, 42 U.S.C. §7401 et  seq.; and the Hazardous Materials Transportation Act, 49 U.S.C. §1801 et  seq. 

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Escrow Amounts mean all escrows for taxes, governmental assessments and insurance, deposits, security deposits, utility deposits, replacement reserves or other funds relating to the Loans and deposited by or on behalf of any Borrower or tenant and held by or on behalf of Seller.

Excluded Liabilities means any liability, obligation, debt, damage, fine, judgment or penalty of Seller (or any of its Affiliates), or otherwise relating to the operation Seller’s businesses that is not specifically included in the Assumed Liabilities.    

Governmental Entity means any court, administrative agency, arbitrator or commission or other governmental, prosecutorial or regulatory authority or instrumentality, or any domestic or foreign securities, broker-dealer, investment adviser and insurance industry self-regulatory organization. 

Hazardous Materials means any material, waste or substance which is:

(a)                included within the definitions of “hazardous waste”, “hazardous substances”, “hazardous materials”, “toxic substances” or “solid waste” in or pursuant to any Environmental Law, or subject to regulation under any Environmental Law;

(b)               listed in the United States Department of Transportation Optional Hazardous Materials Table, 49 C.F.R. §172.101, as to date or hereafter amended, or in the United States Environmental Protection Agency List of Hazardous Substances and Reportable Quantities, 40 C.F.R. Part 302, as to date or hereafter amended; or

(c)                explosive, radioactive, asbestos, polychlorinated biphenyl, oil or a petroleum product.

Notwithstanding the foregoing, the term “Hazardous Substances” shall not include any lead paint or lead paint containing materials.

Interested Purchaser means, with respect to any Loan, the purchaser of such Loan and its successor or assigns, if such Person is a Borrower or other obligor, or is an Affiliate of a Borrower or other obligor, pursuant to a guarantee, letter of credit or otherwise, under or in connection with such Loan.

Law means any federal, state, local or foreign law, statute, ordinance, rule, regulation, judgment, code, order, injunction, interpretation, ruling, common law, arbitration award, agency requirement, license or permit of any Governmental Entity.

Lien means any lien, claim, charge, option, encumbrance, mortgage, pledge or security interest or other restriction of any kind.

Loan means each loan being sold hereby which is included on the Loan Schedule.

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Loan Agreement means with respect to each Loan for which a loan agreement exists and is contained in the Loan File, the agreement setting forth the principal terms of such Loan executed by the Borrower under such Loan, as such agreement may be amended, modified or extended from time to time.

Loan Documents means, with respect to each Loan, those written agreements or instruments that are in the Loan File relating to such Loan, which may include the Note, any Loan Agreement, any Mortgage, and any assignment, reinstatement, extension, endorsement or modification of the Loan Agreement, the Note or the Mortgage.

Loan File means that certain file for each Loan, including any amendments, supplements, corrections or modifications to such file, but excluding internal analysis and correspondences (including as to the collectibility of any Loan or the value of any Mortgaged Property or other collateral), privileged information and other communications between the Seller and its counsel and advisors and any correspondences to or from any Governmental Entity.

Loan Schedule means the schedule identifying the Loans to be sold, transferred and conveyed hereunder and which is attached hereto as Schedule A,  as said Loan Schedule may be amended or modified from time to time in accordance with the terms of this Agreement.

The Loan Schedule shall set forth the following information concerning each Loan as of the Cutoff Date:

(a)                Seller’s control number;

(b)               Name of Borrower; 

(c)                Performing or Non-Performing Loan designator;

(d)               Residential loan status;

(e)                Unpaid Principal Balance;

(f)                In the case of Performing Loans, the accrued interest;

(g)               Escrow Amount;

(h)               Allocated Bid Percentage; and

(i)                 Allocated Loan Price.

            Losses  means claims, losses, damages, penalties, fines, charges, liabilities, obligations, taxes, fees and expenses, including reasonable expenses of investigation, court costs, and reasonable attorneys’ fees and expenses incurred in connection with any claim, action, suit or proceeding against the indemnitee determined net of (a) insurance proceeds actually received by indemnitee in respect of such Losses and (b) indemnity payments actually received by indemnitee with respect to such Losses.  Notwithstanding anything contained herein to the 

contrary, “Losses” shall not include any consequential, lost profits, special, indirect or punitive damages in connection with any breach or violation of this Agreement or otherwise in connection with the transactions contemplated hereby.  

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Material Adverse Effect means any change or effect that (i) has a material adverse effect on the Loans, taken as a whole or (ii) prevents or materially delays or impairs the ability of any party hereto to consummate the transactions contemplated hereby.

Mortgage means with respect to each Loan which is or purports to be secured by real property, the mortgage, deed of trust or other security instrument creating or purporting to create a lien upon real property described therein, as such mortgage may be amended, modified or extended from time to time.

Mortgaged Property means with respect to each Mortgage, the related mortgagor’s interest in real property (including all improvements, building, fixtures and leases), all other collateral securing repayment of the debt evidenced by the related Mortgage and the related Borrower’s interest therein.

Non-Performing Loan means a Loan which, as of the Cutoff Date, is any Loan other than a Performing Loan and which is identified with the designation “NPL” on the Loan Schedule.

Note means the originally executed promissory note or notes, bond, lost note affidavit (in instances where the originally executed instruments are not in Seller’s possession) or other evidence of indebtedness with respect to such Loan, as such promissory note or notes, bond, lost note affidavit or other evidence of indebtedness may be amended, modified or extended from time to time.

Outstanding Property Taxes means due and payable taxes on any Mortgaged Property, prorated through the Closing Date, as set forth on Schedule D under the heading “Prorated Amount Due.” 

ORE Loan means any Loan secured by a Mortgage for which, as of the Closing Date, Seller has acquired an ownership interest in Mortgaged Property by virtue of the entry of a judgment of foreclosure, the issuance of a sheriff’s deed (naming Seller as purchaser) in non-judicial foreclosure proceedings, or the acceptance of a deed in lieu of foreclosure from a Borrower or other party which has pledged a Mortgaged Property to secure repayment of such Loan.

Performing Loan means a Loan which, as of the Cutoff Date, is not delinquent with respect to the payment of regularly scheduled payments of principal and interest for more than thirty (30) days and which is identified with the designation “PL” on the Loan Schedule.

Permitted Liens means (a) Liens for taxes, assessments or governmental charges or levies not yet due and payable or which although delinquent can be paid without penalty or are being contested in good faith by appropriate proceedings, (b) Liens resulting from a filing by a lessor as a precautionary filing for a lease, (c) Liens imposed by Law, such as carriers’, warehousemen’s and mechanics’ liens and other similar liens arising in the ordinary course 

which secure payment of obligations not more than 60 days past due or which are being contested in good faith by appropriate proceedings, (d) zoning, building, subdivision, environmental regulations, entitlement or other land use regulations, (e) easements, quasi-easements, encumbrances, licenses, covenants, rights-of-way, rights of re-entry or other restrictions and similar agreements, conditions or restrictions or Liens, and (f) any other Liens affecting the Loans that do not impede the ownership, operation or value of such Loans, taken as a whole, in any material respect.

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Person means an individual, corporation, partnership, joint venture, association, limited liability company, joint stock company, trust, unincorporated organization, or government or any agency or subdivision thereof.

Protective Advances means, with respect to any Loan, any advances made to or on behalf of the Borrower by Seller after the Cutoff Date which are necessary or advisable in the judgment of Seller to preserve or protect any collateral or right. 

Repurchase Date means the date on which any Loan is repurchased by Seller from Purchaser pursuant to this Agreement.

Repurchase Price means the amount payable by Seller to Purchaser to repurchase any Loan which Seller is obligated to repurchase under the provisions of Section 8.1, which is more fully defined in Section 8.4. 

Security Agreement means any security agreement creating or purporting to create a lien upon personal property described therein as such security agreement may be amended, modified or extended from time to time.

Third Parties means any Persons other than Seller or Purchaser.

UCC Financing Statement means a financing statement pursuant to the Uniform Commercial Code, as in effect in the relevant jurisdiction.

Unpaid Principal Balance means, with respect to any Loan, the unpaid principal balance of such Loan as reflected on the Loan Schedule as of the Cutoff Date.

Article II

PURCHASE AND SALE OF THE LOANS

    Section 2.1.       Purchase and Sale of the Loans.  For valuable consideration, the sufficiency of which is hereby acknowledged, and subject to the terms, provisions and conditions of this Agreement, as of the Closing Seller hereby sells, assigns and conveys to Purchaser, and Purchaser hereby purchases and accepts from Seller, all of the Seller’s right, title and interest in and to the Loans.  Except as provided in Section 5.7, the sale of such Loans shall be on a whole-loan, servicing released basis and shall include all of Seller’s right, title and interest in and to the related Collateral Documents, to the extent assignable.  Except as provided in Section 5.7,  Seller shall have no obligation to service the Loans after the Closing Date.

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     Section 2.2.     Reserved.

     Section 2.3.      Amount Payable at Closing. (a)  Subject to Section 2.4, the total amount payable at Closing for the Loans (the “Total Amount Payable”) shall be equal to (i) the Base Purchase Price, (ii) plus  all Additional Advances, (iii) minus  all payments received by Seller after the Cutoff Date, (iv) minus  Outstanding Property Taxes, (v) minus  any Escrow Amounts actually held by Seller as of the Closing Date, (vi) plus  in the case of Performing Loans, all accrued but unpaid interest as of the Closing Date on such Performing Loans at the rate specified in the applicable Note or Loan Agreement, (vii) plus  all Protective Advances.  

(b)               The Total Amount Payable shall be paid at Closing, in immediately available funds, via federal funds wire transfer, by Purchaser to Seller’s account as instructed in writing by Seller to Purchaser.

    Section 2.4.       Adjustments.

(a)                Credits to Seller.  Without limiting Section 2.3(a), Purchaser shall remit to Seller on the Closing Date in immediately available funds any and all payments actually made by Seller in respect of any non-routine out-of-pocket expenses incurred by Seller to maintain the Loans during the period from the Cutoff Date to (and including) the Closing Date, only to the extent that such expenses were authorized by Purchaser prior to Seller incurring such expense.  

(b)               Further Adjustments.  Seller and Purchaser shall each cooperate with each other in correcting any errors or omissions in computing any adjustments and credits pursuant to Section 2.3 and this Section 2.4.

   Section 2.5.      Assumed Liabilities. As of the Closing, Seller delegates to Purchaser, and Purchaser assumes and agrees to perform faithfully all of Seller's duties, obligations and liabilities in respect of each of the Loans, including the Assumed Liabilities, subject to the terms of this Agreement.  

     Section 2.6.    Retained Rights. Purchaser acknowledges that Seller may retain certain credit, depository or trust relationships with a Borrower, guarantor or a maker of the Notes and their respective agents, employees and affiliates, which loans and other relationships may continue following Closing (collectively, a “Retained Lending Relationship”).  All documents and instruments relating to a Retained Lending Relationship, and rights and obligations relating thereto, are not and shall not be deemed Collateral Property, it being understood that the Collateral Property relates only to those Notes evidencing the Loans listed on the Loan Schedule and the Loan Documents related thereto.  Without limiting the foregoing, to the extent any Borrower or other obligor under a Loan is obligated to indemnify or defend Seller pursuant to the Loan Documents, Seller shall be a beneficiary of such obligations and Seller retains the right to compel Borrower and/or such other obligor to perform such obligation.

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Article III

REPRESENTATIONS AND WARRANTIES OF PURCHASER

    Section 3.1.        Representations and Warranties by Purchaser. Purchaser makes the following representations and warranties for the benefit of Seller, each of which is true and correct as of the Closing Date:

(a)                Authority.  Purchaser is duly organized, validly existing and in good standing under the laws of the State of [●] with powers and authority adequate for the making and performing of this Agreement and for carrying on the business now conducted or proposed to be conducted by it, and Purchaser is qualified to do business and is in good standing as a foreign corporation in each jurisdiction where the ownership, leasing or operation of its properties or assets or conduct of its business requires such qualification, except where the failure to be so qualified could not reasonably be expected to delay or prevent Purchaser from consummating the transactions contemplated hereby.  Purchaser has taken all necessary action required to execute, deliver and perform this Agreement and all related documents and to consummate the transactions contemplated by this Agreement and all related documents.  

(b)                 Consents and Approvals; No Violations.  No filing with or notice to, and no permit, authorization, registration, consent or approval of, any Governmental Entity is required on the part of Purchaser for the execution, delivery and performance by Purchaser of this Agreement and each other document to be executed or delivered by Purchaser at Closing or the consummation by Purchaser of the transactions contemplated hereby and thereby.  Neither the execution, delivery and performance of this Agreement by Purchaser nor the consummation by Purchaser of the transactions contemplated by this Agreement and each other document to be executed or delivered by Purchaser at Closing will (i) conflict with or result in any breach, violation or infringement of any provision of the respective articles of incorporation or by-laws (or similar governing documents) of Purchaser, (ii) result in a breach, violation or infringement of, or constitute (with or without due notice or lapse of time or both) a default (or give rise to the creation of any Lien, except for Permitted Liens, or any right of termination, amendment, cancellation or acceleration) under, any of the terms, conditions or provisions of any material contract, agreement or document to which Purchaser is subject or (iii) violate or infringe any Law applicable to Purchaser.  

(c)                  Validity of Agreement.  This Agreement and each other document to be executed or delivered by Purchaser at Closing has been duly and validly executed and delivered by Purchaser and, assuming due authorization, execution and delivery by Seller, constitutes the valid, legal and binding obligations of Purchaser, enforceable against Purchaser in accordance with the terms hereof, subject to (i) applicable bankruptcy, insolvency, reorganization, moratorium and other laws affecting the enforcement of creditors’ rights generally, and (ii) general principles of equity, regardless of whether such enforcement is considered in a proceeding in equity or at law.

(d)                 Legal Action Against Purchaser.  There are no judgments, orders or decrees of any kind against Purchaser unpaid or unsatisfied of record or any legal action, suit, investigation, complaint or other legal or administrative proceeding pending, threatened or 

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reasonably anticipated which could be filed before any court or administrative agency which has, or is likely to have, any material adverse effect on  the ability of Purchaser to perform its obligations under this Agreement.

 

(e)                Bankruptcy or Debt of Purchaser; Financial Condition.  Purchaser has not filed any petition seeking or acquiescing in any reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under any law relating to bankruptcy or insolvency, nor has any such petition been filed against Purchaser.  No general assignment of Purchaser’s property has been made for the benefit of creditors, and no receiver, master, liquidator or trustee has been appointed for Purchaser or any of its property.  Purchaser is not insolvent and the consummation of the transactions contemplated by this Agreement shall not render Purchaser insolvent.  Purchaser has sufficient capital or net worth to meet its current obligations, including payment of the Total Amount Payable and all other amounts payable under this Agreement.  

(f)                Decision to Purchase.  Purchaser is a sophisticated investor and its bid and decision to purchase the Loans and to acquire the Collateral Documents and Collateral Property is based upon its own independent evaluation of the Loan Files, the Loan Documents and other materials deemed relevant by Purchaser and its agents all of which Purchaser has had a full opportunity to review.  Purchaser has made such independent investigations as Purchaser deems to be warranted as to the validity, enforceability and collectibility of the Loans, the perfection and priority of any security interest, the value of any collateral (including any Mortgaged Property) and the nature and value of the Loans, and all other facts it deems material to their purchase and is entering into this Agreement solely upon the basis of that investigation and Purchaser’s own judgment.  Purchaser has not relied in entering into this Agreement upon any oral or written information from Seller, or any of Seller’s employees, affiliates, agents, consultants, advisors or representatives, other than the representations and warranties of Seller specifically set forth in this Agreement.  Purchaser further acknowledges that no employee, agent, consultant, advisor or representative of Seller (including Keefe, Bruyette & Woods, Inc.) has been authorized to make, and that Purchaser has not relied upon, any statement or representations other than those specifically set forth in this Agreement.  Without limiting the generality of the foregoing, Purchaser acknowledges and agrees that, except as expressly set forth in Section 4.1 and 4.2 hereof, Purchaser is purchasing the Loans “as is” and “where is” on the Closing Date with all faults and, except as expressly set forth in Section 4.1 and 4.2 hereof, Seller is making no representation or warranty, express or implied, written or oral, and Purchaser has not relied on any representation or warranty, express or implied, written or oral, regarding any Borrower, any of the Loans or any collateral (including any Mortgaged Property), including any representation or warranty with respect to (a) the business, financial condition or prospects of any Borrower, any Third Party (including any guarantor) or any tenants, (b) the physical condition of any building, improvement, machinery, equipment or personal property comprising all or a part of any collateral (including any Mortgaged Property), (c) the leases, rents, income or expenses of any Mortgaged Property, (d) the enforceability, validity, transferability, currency or legality of any guarantee or insurance policy which is transferred or conveyed to Purchaser pursuant to this Agreement, whether as Collateral Property or otherwise, and (e) the compliance of any Borrower or collateral (including any Mortgaged Property) with any Environmental Law (including but not limited to those pertaining to the use, handling, generating, treating, storing or disposing of any Hazardous Materials and/or petroleum product storage tanks, asbestos and/or 

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lead paint and lead paint containing materials), (f) the condition, value or collectibility of any personal property, whether tangible or intangible securing any Loan, and (g) condition, merchantability or suitability.  

(g)               Resale.  Without characterizing the Loans as a “security” within the meaning of applicable securities Law, the purchase by Purchaser of Seller’s right, title and interest in the Loans will be for Purchaser’s own account for investment and not with the view towards resale or distribution; and Purchaser has no intention of assigning, transferring, selling, pledging, hypothecating or otherwise distributing all or any part of the Loans or the Loan Documents, except in compliance with applicable federal and state securities Law.

(h)               Brokers.   No broker, investment banker, financial advisor or other Person is entitled to any broker’s, finder’s, financial advisor’s or other similar fee or commission in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of Purchaser or any of its Affiliates.

(i)                 OFAC List/Litigation/Reg W.  Neither the Purchaser nor any of its Affiliates, nor any of its or its Affiliates’ respective officers, directors, agents, partners, members, controlling entities and employees:  (i) is a country, individual or entity named on the Specifically Designated National and Blocked Persons (SDN) list issued by the Office of Foreign Asset Control of the Department of the Treasury of the United States of America; (ii) is a party to or is otherwise involved in, or is aware of the Purchaser’s, any of Purchaser’s Affiliates’ or any of Purchaser’s or its Affiliates’ respective officers’, directors’, agents’, partners’, members’, controlling entities’ and employees’ involvement in, any threatened litigation or other administration or adversarial proceedings affecting the Seller or any of its Affiliates; (iii) is a Borrower, obligor, principal of any Borrower or any obligor, or Affiliate of any Borrower or any obligor, on any Loan; or (iv) is an “affiliate” of Seller, as defined in Regulation W, 12 C.F.R. Section 223.2.

(j)                 No Other Representations or Warranties. Except for the representations and warranties expressly set forth in this Agreement, neither Purchaser nor any other Person makes any other express or implied representation or warranty on behalf of any of such Persons with respect to any of such Persons or the transactions contemplated by this Agreement.

(k)               Survival of Representations and Warranties. Each of the representations and warranties in Section 3.1 shall survive the Closing for a period of twelve (12) months. 

Article IV

REPRESENTATIONS AND WARRANTIES OF SELLER

     Section 4.1.        Representations and Warranties by Seller. Seller makes the following representations and warranties for the benefit of Purchaser, each of which is true and correct in all material respects as of the Closing Date:

(a)                Authority.  Seller is duly organized, validly existing and in good standing under the laws of the United States with powers and authority adequate for the making and 

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performing of this Agreement and for carrying on the business now conducted or proposed to be conducted by it, and Seller is qualified to do business and is in good standing as a foreign corporation in each jurisdiction where the ownership, leasing or operation of its properties or assets or conduct of its business requires such qualification, except where the failure to be so qualified could not reasonably be expected to delay or prevent Seller from consummating the transactions contemplated hereby.  Seller has taken all necessary action required to execute, deliver and perform this Agreement and all related documents and to consummate the transactions contemplated by this Agreement and all related documents. 

 

(b)               Consents and Approvals; No Violations.  No filing with or notice to, and no permit, authorization, registration, consent or approval of, any Governmental Entity is required on the part of Seller for the execution, delivery and performance by Seller of this Agreement and each other document to be executed or delivered by Seller at Closing or the consummation by Seller of the transactions contemplated hereby and thereby.  Neither the execution, delivery and performance of this Agreement by Seller nor the consummation by Seller of the transactions contemplated by this Agreement and each other document to be executed or delivered by Seller at Closing will (i) conflict with or result in any breach, violation or infringement of any provision of the respective articles of incorporation or by-laws (or similar governing documents) of Seller, (ii) result in a breach, violation or infringement of, or constitute (with or without due notice or lapse of time or both) a default (or give rise to the creation of any Lien, except for Permitted Liens, or any right of termination, amendment, cancellation or acceleration) under, any of the terms, conditions or provisions of any material contract, agreement or document to which Seller is subject or (iii) violate or infringe any Law applicable to Seller.  

(c)                  Validity of Agreement.  This Agreement and each other document to be executed or delivered by Seller at Closing has been duly and validly executed and delivered by Seller and, assuming due authorization, execution and delivery by Purchaser, constitutes the valid, legal and binding obligations of Seller, enforceable against Seller in accordance with the terms hereof, subject to (i) applicable bankruptcy, insolvency, reorganization, moratorium and other laws affecting the enforcement of creditors’ rights generally, and (ii) general principles of equity, regardless of whether such enforcement is considered in a proceeding in equity or at law.

(d)                 Legal Action Against Seller.  There are no judgments, orders or decrees of any kind against Seller unpaid or unsatisfied of record or any legal action, suit, investigation, complaint or other legal or administrative proceeding pending, threatened or reasonably anticipated which could be filed before any court or administrative agency which has, or is likely to have, any material adverse effect on the ability of Seller to perform its obligations under this Agreement.

(e)                Bankruptcy or Debt of Purchaser; Financial Condition.  Seller has not filed any petition seeking or acquiescing in any reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under any law relating to bankruptcy or insolvency, nor has any such petition been filed against Seller.  No general assignment of Seller’s property has been made for the benefit of creditors, and no receiver, master, liquidator or trustee has been appointed for Seller or any of its property.  Seller is not insolvent and the consummation of the transactions contemplated by this Agreement shall not render Seller 

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insolvent.  Seller has now and will have as of the Closing Date sufficient capital or net worth to meet its current obligations.  

 

(f)                Title to Loans.  Seller is the sole owner and holder of each Loan.  Seller has full right to sell and assign each Loan and Seller’s interest in any Collateral Documents related thereto offered by it hereunder free and clear of any Lien other than Permitted Liens and without the consent of any Third Party, except such consent as has been obtained or is unnecessary under applicable Law.

(g)               Brokers.  Except for Keefe, Bruyette & Woods, Inc., whose fees and expenses will be paid by Seller, no broker, investment banker, financial advisor or other Person is entitled to any broker’s, finder’s, financial advisor’s or other similar fee or commission in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of Seller or any of its Affiliates.

    Section 4.2.       Limited Representations and Warranties by Seller. Seller makes the following representations and warranties for the benefit of Purchaser, each of which is true and correct in all material respects as of the Closing Date.

(a)                Unpaid Principal Balance.  The Unpaid Principal Balance for each Loan, as set forth on the Loan Schedule, is true and correct as of the Cutoff Date.

(b)               Loan Documents.  Except to the extent reflected in the Loan Documents or the Loan File or as raised in connection with any litigation disclosed to Purchaser, Seller has not received written notice from any party asserting or purporting to assert that (i) any security interest, mortgage or similar right on any collateral securing a Loan is not valid and perfected or (ii) any of the Loan Documents is not genuine, valid, legally binding and enforceable against the applicable Borrower.

(c)                No Modification.  Except by written instrument or other written documentation contained in the Loan File or otherwise disclosed to the Purchaser in writing, Seller has not modified any related Note, Mortgage or Security Agreement with respect to a Loan or satisfied, canceled or subordinated such Note, Mortgage or Security Agreement in whole or in part or released all or any material portion of (i) the Mortgaged Property from the lien of the Mortgage or (ii) the personal property from the security interest granted by the Security Agreement, or executed any instrument of release, cancellation or satisfaction.

(d)               Condemnation.  Seller has not received any written notice of a pending condemnation proceeding or similar proceeding materially affecting any Mortgaged Property or any part thereof which proceedings could have a material adverse effect upon the value of the lien on the Mortgaged Property.

(e)                Lien Priority.  Each Loan secured by a Mortgage or ORE Loan for which Seller has first lien position or fee ownership interest (as applicable) is reflected on Schedule B or Schedule C hereto (as applicable, and identified by common street address) subject only to (i) Liens for delinquent real property taxes and for real property taxes and assessments which are not yet due and payable; (ii) covenants, conditions and restrictions, rights of way, rights of re-entry, easements, quasi-easements, encumbrances, licenses and other matters of public record 

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customary in the area in which the Mortgaged Property is located or otherwise specifically referred to in any appraisal performed in connection with the origination of the related Loan; (iii) zoning, building, subdivision, environmental regulations, entitlement or other land use regulations; (iv) any Liens or encumbrances reflected in the lender’s title insurance policy (if any) contained in the Loan File; (v) in the case of an ORE Loan as to which foreclosure proceedings are not complete, any statutory redemption rights retained by the Borrower or other party from which Seller obtained such Mortgage, and others claiming through them; and (vi) such other matters as do not materially and adversely interfere with the Lien evidenced by such Mortgage.  

 

(f)                Loan Files.  With respect to each Loan, the related Note, Mortgage and Security Agreement, if any, and any documents modifying the terms of such Note, Mortgage and Security Agreement included in the Loan File are true and correct copies of the documents they purport to be.  The Loan File for each Loan includes all material documents, or certified copies thereof, relating to such Loan that are in the possession of Seller, but excludes internal analysis and correspondences (including as to the collectibility of any Loan or the value of any Mortgaged Property or other collateral), privileged information and other communications between the Seller and its counsel and advisors and any correspondences to or from any Governmental Entity.   Except as otherwise expressly stated in this Agreement, Seller makes no representation or warranty as to the accuracy of facts, analyses or abstracts recited or contained in any documents and papers which are included in the Loan Files, including rent rolls, operating statements, appraisals and other information which, in many cases, may have been provided by Third Parties.

(g)               Loan Payment Defaults.  With respect to Performing Loans, as enumerated on the Loan Schedule, as of the Cutoff Date, no scheduled payment of principal or interest required under any Loan is more than thirty (30) days past due.

    Section 4.3.       Limitations. Notwithstanding the foregoing, (a) no representation or warranty is made in Section 4.1 and 4.2 with respect to any Loan to the extent that Purchaser (or any successor or assign of Purchaser) is an Interested Purchaser with respect to such Loan; and (b) if, on or after the Closing Date, (i) Purchaser (or any successor or assign of Purchaser) procures title insurance, (ii) Purchaser would be able to procure title insurance or updated title coverage upon payment of the required premium by Purchaser or (iii) Purchaser is entitled to receive the benefit of title insurance by assignment, endorsement or otherwise with respect to such Loan, then, to the extent that such title insurance provides or would have provided coverage with respect to any matters addressed by any of the foregoing representations and warranties, such representations and warranties shall be null and void and shall be deemed not to have been made by Seller.  Except for the representations and warranties expressly set forth in this Agreement, neither Seller nor any other Person makes any other express or implied representation or warranty on behalf of any of such Persons with respect to any of such Persons or the transactions contemplated by this Agreement.

     Section 4.4.      Survival of Representations and Warranties. (a)  Each of the representations and warranties specified in Section 4.1 shall survive the Closing for a period of twelve (12) months.

 

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(b)               Each of the representations and warranties specified in Section 4.2 shall survive the Closing for a period of sixty (60) days from and including the Closing Date.

Article V

COVENANTS OF SELLER AND PURCHASER

    Section 5.1.      Permits, Authorizations, etc. Seller and Purchaser shall each use reasonable best efforts to obtain any and all material permits, authorizations, consents, waivers, clearances or approvals required by each of them for the lawful consummation of the transactions contemplated by this Agreement.  If at any time from and after the Closing any further actions are necessary or desirable to carry out the purposes of this Agreement, each of the parties will take such further actions (including the execution and delivery of such further instruments and documents) as any other party may reasonably request, without further consideration therefor.  

    Section 5.2.       Litigation Cooperation. Seller and Purchaser shall cooperate with each other so as to, as soon as practicable after the Closing Date, substitute Purchaser as the party plaintiff in any litigation commenced by Seller with respect to any Loan.  If either party receives notice of any Claim, threatened Claim or litigation filed by a Mortgagor or Borrower which arises from or relates to the Loans, such party shall promptly notify the other party. 

     Section 5.3.     Document Handling. From and after the Closing:

(a)                Purchaser shall abide by all applicable Law regarding the handling and maintenance of documents and records relating to the Loans, including, but not limited to, regulations specifying the length of time such documents and records are to be retained.

(b)               Seller may access the employees of Purchaser and use, inspect and make extracts from or copies of any files, documents and/or records that are in Purchaser’s actual or constructive possession, in each case in respect of any of the Loans and upon reasonable notice by Seller to Purchaser. Seller may retain copies of any Loan Files conveyed to Purchaser pursuant to Section 6.2(b). 

(c)                Seller may take possession, custody and use of original documents in Purchaser’s actual or constructive possession and pertaining to any of the Loans, for any lawful purpose and upon reasonable terms and conditions.

(d)               Purchaser agrees to provide Seller within two (2) Business Days of receipt thereof, any notices or other records received by Purchaser (or any Affiliate of Purchaser) after the Cut-Off Date relating to the operation of the Loans prior to the Cut-Off date.  

(e)                Before destroying or disposing of any documents or files pertaining to any Loan, Purchaser shall (i) give reasonable notice of the same to Seller and (ii) allow Seller, at Seller’s expense, to recover the same from Purchaser.

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   Section 5.4       Public Announcements. Seller and Purchaser agree that the initial press release announcing the execution and delivery of this Agreement and/or the transactions contemplated hereby shall be a press release of Seller.  Until such initial press release, neither party will issue any press release or make any public statement or announcement with respect to this Agreement or the transactions contemplated hereby.    

    Section 5.5       Insurance. Purchaser shall be solely responsible for having itself substituted as loss payee or additional insured on all hazard or mortgage insurance in respect of any Loan in which the Seller is listed as a loss payee or additional insured on the Closing Date; and any loss after the Closing Date to either a Borrower or to Purchaser or to the value or collectibility of any Loan or the related collateral (including any Mortgaged Property or Collateral Property) that arises either by reason of the termination or expiration of any such insurance, or of Purchaser’s failure to identify itself as loss payee or additional insured, is the sole responsibility of Purchaser; provided  that Seller shall be responsible for such losses directly resulting from an affirmative instruction by Seller to cancel such insurance (unless Seller disclosed or indicated the actual or prospective cancellation in the Loan File or otherwise to Purchaser prior to the Bid Date).

             Section 5.6.          Reserved. 

 

             Section 5.7.          Post-Closing Servicing By Seller. Except for those Loans subject to the Real Estate Settlement Procedures Act (“RESPA”), all Loans shall be sold and conveyed to the Purchaser on the Closing Date on a whole loan, servicing-released basis.  Servicing of Loans subject to RESPA, if any, shall be released in accordance with RESPA requirements, and Seller shall have no obligation to perform any other activities with respect to such Loans from and after the Closing Date, except those required by applicable Law. 

 

                Section 5.8.        Additional Covenants.

 

(a)                IRS Reporting.  Purchaser shall submit all Internal Revenue Service forms and information returns required by law (if any) for the Loans for the balance of the year in which the Closing occurs, and thereafter.

(b)               Use of Seller’s Name.  

                                                                 (i)                        Purchaser shall not use or permit the use by its agents, successors or assigns, of any name or combination of letters which is similar to Seller or any affiliate thereof.  Purchaser shall not represent or imply that it is affiliated with, authorized by, or in any way related to Seller, or any affiliate thereof.  If Purchaser shall breach the provisions of this Section 5.8(b), then Purchaser shall pay to Seller the sum of $50,000 for each such breach as damages, together with such fees and expenses (including reasonable attorneys’ fees) as Seller may incur in preventing the further or continuing breach of this Section 5.8(b). The parties acknowledge: Seller will incur substantial damages if Purchaser breaches this Section 5.8(b); as of the date of this Agreement, such damages are either unascertainable or unreasonably difficult to ascertain; and under the circumstances existing as of the date of the parties’ entry into this Agreement, this Section 5.8(b) is a reasonable estimate of those damages.  Notwithstanding the provisions of this Section 5.8(b), Seller may also pursue any equitable remedy it may have for 

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Purchaser’s breach of this covenant including seeking an injunction against any further or future use; 

                                                               (ii)                        After completion of the Closing, Purchaser shall not, without Seller’s express prior written consent, institute any legal action in Seller’s name, or continue to prosecute in Seller’s name any pending legal action.  Purchaser shall not, either intentionally or unintentionally, through misrepresentation or nondisclosure, mislead or conceal the identity of the owner of the Loans.  Purchaser acknowledges that there is no adequate remedy at law for violation of this Section 5.8(b), and consents to the entry of an order by a court of competent jurisdiction enjoining any violation or threatened violation of the provisions of this Section 5.8(b). 

(c)                Subpoenas.  If, after the Closing Date, Seller, its servicers or any of their respective employees, agents or representatives is requested or required by subpoena, court order or otherwise, to perform any acts (including but not limited to testifying, preparing responses to subpoenas or other legal process or pleading, and/or performing any review of public or private record such as tracing funds) in connection with any litigation or bankruptcy proceeding in respect of any Loan, whether the same shall have been commenced by Purchaser or any other party, then Purchaser shall reimburse Seller for the time expended by such employees involved in the performance of said acts, at the rate of $50.00 per hour per employee (or, if such performance is made by a servicer or other agent or representative of Seller, the greater of $50.00 per hour per employee or the amount charged to Seller by such servicer or such agent or representative) plus all associated travel, lodging and per diem costs plus the actual fees and expenses of counsel to the Seller incurred in connection with the taking of any such action.  Seller may determine and assign such personnel as Seller, in its sole discretion, deems necessary to perform the said acts.  Purchaser shall reimburse Seller for all copies made in the course of performing said acts, at the rate of $0.35 cents per copy (or, if greater, the amount charged Seller by its servicer or other agents or representative of such service).  Nothing in this shall require Seller, its servicers or their respective employees, agents or representatives to provide Purchaser with any information or service in this regard.

(d)               Capital Improvements.  Without the prior written consent of Seller, Purchaser shall not commence any capital improvements (other than those which Purchaser reasonably determines to be necessary to prevent deterioration of the Loan or to protect the safety of persons) with respect to any Loan purchased on the Closing Date until the expiration of the representations and warranties set forth in Section 4.2 and any cure period applicable to a breach thereof with respect to which a Notice of Claim was timely delivered pursuant to Section 7.1.  

(e)                Confidentiality.   The terms of the Confidentiality Agreement shall continue in full force and effect in accordance with their terms. 

Article VI

CLOSING

    Section 6.1.       Closing. The Closing shall take place on the Closing Date.  

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 Section 6.2.       Closing Date. (a)  Unless otherwise agreed in writing by the parties, Seller shall prepare and deliver to Purchaser at Seller’s offices any and all documents required to be delivered by Seller pursuant to this Section 6.2(a) on the Closing Date:

                                                                 (i)                        the original Note for each Loan, endorsed without recourse (such endorsement may, at Seller’s sole option for any or all of the Loans, be by separate allonge in substantially the form of Exhibit 6.2(a)(i)(A) attached hereto); provided, however, that in the event Seller cannot locate the original Note with respect to any Loan, Seller may satisfy its obligation to deliver the original Note with respect to such Loan by delivering a copy of such Note (if available) together with a lost note affidavit in substantially the form of Exhibit 6.2(a)(i)(B) attached hereto;

                                                               (ii)                        an executed assignment of each Mortgage and Collateral Property and the other recorded Loan Documents in substantially the form of Exhibit 6.2(a)(ii) attached hereto, with such modifications as are required under local laws for recording purposes in the land records in the jurisdiction in which the related Mortgaged Property is located (the “Assignment of Mortgage”); 

                                                             (iii)                        assignments of UCC Financing Statements in recordable form, for any UCC Financing Statement contained in the Loan File on which Seller is listed as the secured party, provided, however, that at Seller’s sole option, Purchaser shall prepare and file such assignments as are required for Closing on Seller’s behalf, utilizing the Limited Power of Attorney described in Section 6.2(a)(v) below, and Seller hereby authorizes Purchaser to prepare such assignments on Seller’s behalf in accordance with the authority conferred by the Limited Power of Attorney and UCC Section 9-509, as adopted in the jurisdictions where UCC Financing Statements are filed;

                                                             (iv)                        an executed Notice to Borrower addressed to each Borrower, substantially in the form of Exhibit 6.2(a)(iv) attached hereto, notifying such Borrower of the conveyance of the Loan to Purchaser and directing such Borrower to make all payments under the Loan to Purchaser (which Purchaser agrees to deliver to the applicable Borrower within any time periods required under applicable Law);

                                                               (v)                        an executed Limited Power of Attorney substantially in the form of Exhibit 6.2(a)(v) attached hereto; and

                                                             (vi)                        such other executed assignments, instruments of transfer, and other documents as Purchaser may reasonably require in order to complete the transactions contemplated hereunder, including but not limited to a Bill of Sale and an Assignment and Acceptance of Interests, substantially in the form of Exhibits 6.2(a)(vi)(A) and  6.2(a)(vi)(B) attached hereto.

(b)               Within five (5) Business Days following the Closing Date, Seller shall deliver to Purchaser the Loan Files.

(c)                On the Closing Date, Purchaser shall, prior to 12 p.m. Eastern time, pay the Total Amount Payable, as adjusted herein, to Seller in immediately available funds by wire transfer in accordance with Seller’s instructions.

 

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(d)               With respect to any Loan which has become an ORE Loan, as itemized on the attached Schedule C, Seller shall transfer (i) its interest in acquired Mortgaged Property to Purchaser by means of an appropriate quitclaim deed (or an assignment of the judgment of foreclosure, if appropriate), in place of the Assignment of Mortgage form described in Section 6.2(a)(ii) above, and (ii) to the extent transferable, all of Seller’s rights, claims and causes of action against any title company, attorneys or other third party arising from or in connection with the foreclosure of such Mortgaged Property.  Seller shall also provide Purchaser with a note allonge for such Loan, in the form specified in Exhibit 6.2(a)(i)(A) attached hereto, subject to the understanding that such Note may no longer be enforceable (in whole or in part) as a debt instrument in light of Loan consideration allocated to the acquisition of relevant Mortgaged Property through Loan enforcement proceedings or other negotiations with the Borrower and related parties.  The provisions of this Section 6.2(d) shall have controlling effect over any other section or subsection of this Agreement, to the extent of any conflict or inconsistency in and between Section 6.2(d) and such other sections or subsections.   

     Section 6.3.      Transfer and Recordation Taxes; Responsibility for Recording. Purchaser shall be responsible for the recording of any transfer documents.  Purchaser shall also be solely responsible for, shall pay when due and payable, and shall indemnify and hold Seller harmless with respect to, all conveyance, transfer, filing and recording fees, taxes, costs and expenses, and any documentary taxes, if any, with respect to the filing or recording of any document or instrument, or the sale, assignment and transfer of the Loans contemplated hereby.  

    Section 6.4.      Closing Expenses. Purchaser shall be solely responsible for its own attorneys’ fees and the expenses of any and all title searches or bringdowns and any and all title commitments or policies and all endorsements to any of the title policies obtained by Purchaser and the expenses of environmental site assessments and other due diligence Purchaser may desire.  Except as otherwise provided in this Agreement, all other expenses shall be paid by the party incurring such expenses.

    Section 6.5.       Escrow Amounts. Effective as of the Closing Date, and except to the extent expressly stated to the contrary in this Agreement, Purchaser shall assume, undertake, and discharge any and all obligations of the Borrower of each Loan as may relate to the Escrow Amounts.  Seller shall not transfer to Purchaser that sum of money held by Seller as of the Closing Date relating to the said Escrow Amounts, but instead will give Purchaser a credit against the Total Amount Payable for such sum in accordance with Section 2.3 hereof. 

Article VII

DEFAULTS AND INDEMNIFICATION

    Section 7.1.         Defaults, Seller's Right to Cure. Subject to Section 4.3 and Section 4.4, in the event of a material breach by Seller of any representation or warranty contained in Section 4.1 or Section 4.2, Seller shall have a period of 60 days after written notice by Purchaser of such breach (a “Notice of Claim”) to cure such breach.  Such Notice of Claim from Purchaser shall contain detailed information regarding the basis for such request sufficient to demonstrate to Seller’s reasonable satisfaction that the event in fact constitutes a material breach of a representation or warranty.  

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 Section 7.2.        Purchaser's Indemnification. Subject to the limitations set forth in Section 3.1(k),  Purchaser shall indemnify, defend and hold harmless Seller and its officers, directors, agents, partners, members, and employees (collectively, the “Seller Indemnitees”) from and against any and all Losses incurred by Seller Indemnitees in connection with (a) the material inaccuracy of any of Purchaser’s representations or warranties herein, (b) the material breach of any of Purchaser’s covenants herein or (c) the Assumed Liabilities.  

  Section 7.3.         Seller's Indemnification. Subject to the limitations set forth in Section 4.3 and Section 4.4 and in this Section 7.3, Seller shall indemnify, defend and hold harmless Purchaser and its officers, directors, agents, partners, members, and employees (collectively, the “Purchaser Indemnitees”) from and against any and all Losses incurred by Purchaser Indemnitees in connection with (a) the material inaccuracy of any of Seller’s representations or warranties herein (subject to Seller’s right to cure any certain such inaccuracies pursuant to Section 7.1), (b) the material breach of any of Seller’s covenants herein or (c) the Excluded Liabilities; provided  that under no circumstances shall (i) Seller be required to indemnify any Purchaser Indemnitee for any environmental liability associated with any collateral securing a Loan (including any Mortgaged Property), and (ii) any amounts payable pursuant to indemnification under this Section 7.3 in respect of any Loan exceed the Allocated Purchase Price for such Loan; provided, further, that if Purchaser has timely invoked repurchase remedies concerning any given Loan pursuant to Article VIII, such repurchase shall be the exclusive remedy of the Purchaser Indemnitees in respect of such Loan, and the Purchaser Indemnitees shall not be entitled to indemnification in respect of such Loan under this Section 7.3; provided, further, that with respect to indemnification payments under Section 7.3(a) (other than with respect to breaches of Section 4.1(a), Section 4.1(b)(i) and Section 4.1(c)): (A) Seller shall not be liable for any such indemnification until the aggregate amount of Losses for which Purchaser is entitled to be indemnified under Section 7.3(a) (other than with respect to breaches of Section 4.1(a), Section 4.1(b)(i) and Section 4.1(c)), together with the aggregate Repurchase Price of the Loans required to be repurchased by Seller pursuant to Article VIII, exceeds, on a cumulative basis, an amount equal to one percent (1%) of the Base Purchase Price (the “Seller Basket”), (B) to the extent the Seller Basket is exceeded, then Seller shall pay Purchaser all indemnifiable Losses under Section 7.3(a) including the Seller Basket and (C) in no event shall Seller be required to make aggregate indemnification payments pursuant to Section 7.3(a) (other than with respect to breaches of Section 4.1(a), Section 4.1(b)(i) and Section 4.1(c)) in excess of an amount equal to ten percent (10%) of the Base Purchase Price. 

    Section 7.4.      Procedure for Indemnification. (a) The party seeking indemnification hereunder (the “Indemnified Party”) shall notify the party from which indemnification is sought (the “Indemnifying Party”) following the assertion of any claim, or the incurrence of any Losses, that might give rise to indemnification hereunder. 

(b)               Promptly after the assertion by any third party of any claim against any Indemnified Party that in the reasonable judgment of such Indemnified Party may result in the incurrence by such Indemnified Party of Losses for which such Indemnified Party would be entitled to indemnification pursuant to this Agreement, such Indemnified Party shall deliver to the Indemnifying Party a written notice describing in reasonable detail (to the extent known) such claim and such Indemnifying Party may, at its option, assume the defense of the Indemnified Party against such claim at such Indemnifying Party’s expense.  Any Indemnified 

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Party shall have the right to employ separate counsel in any such action or claim and to participate in the defense thereof, but the fees and expenses of such counsel shall not be at the expense of the Indemnifying Party; provided  that the Indemnifying Party shall be responsible for the fees and expenses of the Indemnified Party’s counsel in any such action or claim if (the Indemnified Party shall have been advised in writing by counsel that the assumption of such defense by the Indemnifying Party would be inappropriate due to an actual or potential conflict of interest.  No Indemnifying Party shall be liable to indemnify any Indemnified Party for any settlement of any such action or claim effected without the consent of the Indemnifying Party (not to be unreasonably withheld or delayed).  The Indemnified Party and the Indemnifying Party each agree to fully cooperate in all matters covered by this Section 7.4(b), including, as required, the furnishing of books and records, personnel and witnesses and the execution of documents, in each case as necessary for any defense of such third-party claim and at no cost to the other party.  If the amount of any Loss shall, at any time subsequent to payment pursuant to this Agreement, be reduced by recovery, settlement or otherwise, the amount of such reduction, less any expenses incurred in connection therewith, shall promptly be repaid by the Indemnified Party to the Indemnifying Party.

 

Article VIII

REPURCHASE PROCEDURES 

     Section 8.1.     Repurchase. Subject to the terms of this Article VIII, Seller shall repurchase any Loan sold to Purchaser pursuant to this Agreement within five (5) Business Days of receipt of a Notice of Claim from Purchaser if Seller breaches in any material respect any of the representations, warranties or agreements contained in Section 4.2 (provided  that Seller has not cured such breach within the period specified in Section 7.1), provided  that such Notice of Claim is delivered within sixty (60) days after the Closing Date.  On the Repurchase Date, Seller shall pay to Purchaser, in immediately available funds, the Repurchase Price, and Purchaser shall convey to Seller all of Purchaser’s right, title and interest in and to such Loan and any related collateral.  In addition to the foregoing, if any Loan required to be repurchased hereunder is cross-collateralized with any other Loan sold hereunder, Seller shall have the right, in its sole discretion, to repurchase such other Loan or Loans on the Repurchase Date and shall pay to Purchaser, in immediately available funds, the Repurchase Price for each such other Loan or Loans.  Purchaser shall convey to Seller all of Purchaser’s right, title and interest in and to such Loan or Loans and any related collateral and the provisions of this Article VIII shall apply with respect to all Loans repurchased.  Notwithstanding the foregoing, Seller shall not be obligated under any circumstances to repurchase any Loans under this Section 8.1 unless the aggregate amount of the Repurchase Price of the Loans to which it has a repurchase obligation hereunder, together with the aggregate amount of Losses for which Purchaser is entitled to be indemnified under Section 7.3(a), exceeds the Seller Basket, and thereafter Seller shall be required to repurchase all such Loans to which it has repurchase obligation under this Section 8.1 at the Repurchase Price.   

  Section 8.2.       Transfer Documentation; Further Assurances; Transfer and Recordation Taxes and Fees. On the Repurchase Date with respect to any applicable repurchased Loan, Purchaser shall deliver to Seller all originals and copies of the Loan Documents and any other transfer documents or other documents that were delivered to 

Purchaser pursuant to this Agreement regarding such Loans, together with any addenda, exhibits and schedules thereto and together with any correspondence and documents received or prepared after the Closing.  With respect to each such Loan, Purchaser shall endorse, transfer, convey or assign to Seller the Note and the Collateral Documents in the same manner and by the same documentation as such Note and the Collateral Documents was transferred and assigned from Seller to Purchaser.  Simultaneously with Purchaser’s delivery of such documents to Seller, Seller shall pay to Purchaser the Repurchase Price.  If on the Repurchase Date, Purchaser (or a Subsidiary or an Affiliate) owns the Mortgaged Property related to the repurchased Loan, Purchaser (or such Subsidiary or Affiliate) shall convey to Seller all right, title and interest in and to such Mortgaged Property pursuant to a quitclaim deed (or other equivalent form of deed) with the only representation made by Purchaser and, if applicable, such Subsidiary or Affiliate, being as to the absence of any Lien or other encumbrance created by or arising through Purchaser (or any Subsidiary or Affiliate).  Further, Purchaser shall make all required deliveries and take all other actions on substantially the same terms and conditions under which Seller had conveyed such Loan to Purchaser, shall convey the Mortgaged Property in substantially the same condition it was in when Seller conveyed such Loan to Purchaser, shall satisfy each of the conditions set forth in Section 8.3 and shall cause such reconveyance to be free and clear of any Liens or other encumbrances created by or arising through Purchaser.  Purchaser shall execute and deliver any and all such additional assignments, instruments of transfer and other documents as Seller may reasonably require in order to complete the transactions contemplated hereunder.  Seller shall be responsible for, and shall pay when due and payable, all transfer, filing and recording fees and taxes, costs and expenses, and any state or county documentary taxes, if any, with respect to the filing or recording of any document or instrument contemplated hereby in connection with such repurchase and shall be responsible for recording any documents evidencing the transfers contemplated in connection with such repurchase.  After repurchase hereunder, Purchaser shall immediately endorse, assign over and deliver to Seller any and all payments received from or on behalf of any obligor on the repurchased Loan.  Upon repurchase of any Loan, Purchaser agrees to immediately terminate, at its sole cost, any servicing agreement regarding such Loan.  If either party fails to comply with the terms of this Section 8.2, the other party shall have the right to enforce the provisions hereof by appropriate legal means and, in connection therewith, the defaulting party shall be responsible for payment of all of the prevailing party’s costs and expenses (including attorneys’ fees and costs) incurred by the prevailing party in such enforcement.

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     Section 8.3.         Conditions to Repurchase. Each Loan subject to repurchase under this Article VII shall be in the same condition as when such Loan was conveyed by Seller to Purchaser at the Closing, including with regard to the following:

(a)                the physical condition of the applicable Mortgaged Property shall be the same (normal wear and tear excepted) as it was on the Cutoff Date, other than in respect of a fully insured casualty loss or any condemnation, in which event Purchaser shall assign the insurance and/or condemnation proceeds to Seller;

(b)               the substantive rights under the Loan shall not have been impaired from those conveyed by Seller to Purchaser;

 

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(c)                the condition of title to the Loan being repurchased and all related Collateral Property shall be the same as conveyed by Seller to Purchaser and any loan title policies or updated loan title policies shall be assigned and delivered by Purchaser to Seller;

(d)               the collateral for the Loan being repurchased shall be the same, except to the extent that any of such collateral and proceeds therefrom (including escrows and deposits) has been expended for its intended purpose or otherwise in a commercially prudent manner;

(e)                there shall be no claim of any party against Seller or otherwise affecting the Loan that is the result of any action or inaction of Purchaser or any agent, successor or assign of Purchaser other than any claim as to which Seller shall have received an indemnification in form and substance acceptable to Seller from a party whose financial condition is satisfactory to Seller for the purposes of such indemnification;

(f)                Purchaser shall have provided evidence reasonably satisfactory to Seller of its ability to meet reasonably anticipated future financial obligations to Seller, including, any indemnification obligations;

(g)               Purchaser shall have delivered to Seller all portions of the Loan File with respect to such Loan that were previously delivered by Seller to Purchaser, any documents, writings and correspondence with respect to such Loan subsequent to the Closing Date and any other document pertaining to such Loan in possession of Purchaser or any of its agents or servicers, and any of such documents that were endorsed or assigned to Purchaser as required by Section 6.2 shall be endorsed, assigned and delivered to Seller in the same manner as provided therein;

(h)               Purchaser shall have delivered to Seller a full, complete and correct accounting, current as of the Repurchase Date, of all payments made and received after the Closing Date on account of such Loan and a copy of all correspondence, documents, work notes and collection notes generated since the Closing; and

(i)                 Purchaser shall have delivered to Seller such other documentation as Seller may reasonably request confirming Purchaser’s compliance with all of the terms and conditions set forth in this Section 8.3, including an affidavit signed by an authorized representative of Purchaser that its representations, warranties and covenants in this Agreement are true and correct as of the Repurchase Date.

     Section 8.4.       Calculation of Repurchase Price. The Repurchase Price shall be determined in accordance with the following formula.  

(a)                the Allocated Loan Price for such Loan;

(b)               plus, in the case of a Performing Loan, any unpaid interest on the unpaid principal balance of such Performing Loan at the interest rate borne by such Performing Loan at the time of repurchase which has first accrued during the period (i) commencing on the date of delivery by Purchaser to Seller pursuant to Section 7.1 hereof of the Notice of Claim with 

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respect to such Loan and (ii) ending on the calendar day immediately prior to the Repurchase Date;

 

(c)                minus  any collections (including, but not limited to, the proceeds of any insurance policy and the awards from any condemnation proceedings) received with respect to the Loan since the Closing Date, but only to the extent that such collections result in the reduction of the outstanding principal balance of such Loan in accordance with the provisions of the related Note;

(d)               minus  the amount that was required to be held by Purchaser in any escrow account (but in no event less than the amount credited to Purchaser pursuant to Section 2.3(a),  reduced by any amounts Purchaser is required to expend, and has expended, pursuant to the respective Loan Documents);

(e)                plus  an amount equal to the sum of any insurance premiums and real estate tax payments advanced by Purchaser on behalf of the mortgagor in accordance with the terms of the Mortgage, provided  that (i) such real estate taxes are not paid prior to the date on which such taxes would become a lien prior to the lien of the Mortgage and (ii) any such amounts are not paid out of any Escrow Amounts or any other escrow collected by Purchaser.

Except as provided above, no other accrued or unpaid interest or other sums payable under any Loan shall be included in calculating the Repurchase Price of the Loan.

                Section 8.5.       Remedies Exclusive. Other than remedies for specific performance or other claims in equity or in connection with fraud, the remedies set forth in Article VII and Article VIII are exclusive and in lieu of any other remedies that may be available for claims under this Agreement. 

Article IX

NOTICES

    Section 9.1.         Notices. All notices and other communications to be given to any party hereunder shall be sufficiently given for all purposes hereunder if in writing and delivered by hand, courier or overnight delivery service, or three days after being mailed by certified or registered mail, return receipt requested, with appropriate postage prepaid, or when transmitted in the form of a facsimile (receipt confirmation requested), and shall be directed to the address set forth below (or at such other address or facsimile number as such party shall designate by like notice):

(a)                If to Seller, to:  

The Suffolk County National Bank of Riverhead
Attention:  General Counsel
4 West Second Street, P.O. Box 9000
Riverhead, NY 11901
Facsimile:  (631) 727-2638

Phone:  (631) 208-2412

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With a copy to:

Wachtell, Lipton, Rosen & Katz
Attention:  David E. Shapiro, Esq.

51 W. 52nd Street

New York, New York 10019
Telephone:  (212) 403-1000
Facsimile:  (212) 403-2000

 

(b)               If to Purchaser, to:  

[●]
Attention:  [●]
[●]
[●]
Facsimile:  [●]
Phone:  [●] 

With a copy to:

[●]

The giving of any notice required hereunder may be waived in writing by the party entitled to receive such notice.  

Article X

MISCELLANEOUS PROVISIONS

    Section 10.1.   Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction or other authority to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any party hereto.  Upon such a determination, the parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in a mutually acceptable manner in order that the transactions contemplated hereby be consummated as originally contemplated to the fullest extent possible.    

    Section 10.2.   Amendment. This Agreement may not be amended except by an instrument in writing signed on behalf of each of the parties hereto.

    Section 10.3.   Waiver. Any term, condition or provision of this Agreement may be waived at any time but only in writing by the party which is entitled to the benefits thereof.  Any 

waiver of any term or condition shall not be construed as a waiver of any subsequent breach or a subsequent waiver of the same term or condition, or a waiver of any other term or condition of this Agreement.  No failure or delay by any party hereto in exercising any right hereunder shall operate as a waiver thereof, nor shall any single or partial exercise thereof, preclude any other or further exercise thereof or the exercise of any other right.

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     Section 10.4     Headings. The headings contained in this Agreement are inserted for convenience only and shall not affect the meaning or interpretation of this Agreement or any provision hereof.

     Section 10.5.    Construction. (a) For the purposes of this Agreement, (i) words in the singular shall be held to include the plural and vice versa 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 all of the Exhibits and Schedules) and not to any particular provision of this Agreement, and Article, Section, clause, paragraph, Schedule and Exhibit references are to the Articles, Sections, clauses, paragraphs, Schedules and Exhibits 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) all references to any period of days shall be deemed to be to the relevant number of calendar days unless otherwise specified; (vi) any reference to any Law shall include any amendments, modifications, codifications, replacements and reenactments (as of the date hereof, with respect to references to Law in Article III or Article IV) and shall be deemed also to refer to all rules and regulations promulgated thereunder (as of the date hereof, with respect to references to Law in Article III or Article IV), unless the context requires otherwise; and (vii) any references to any agreement, document or instrument means such agreement, document or instrument as amended or modified and in effect from time to time in accordance with the terms thereof.  The parties acknowledge that each party and its counsel have reviewed and revised this Agreement 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.  

    Section 10.6.     Assignment. This Agreement and the terms, covenants, conditions, provisions, obligations, undertakings, rights and benefits hereof, including the Exhibits and Schedules hereto, shall be binding upon, and shall inure to the benefit of, the undersigned parties and their respective heirs, executors, administrators, representatives, successors, and assigns.  Notwithstanding the foregoing, Purchaser shall not assign its rights under this Agreement to any party without the prior written consent of Seller, which may be withheld by Seller in its sole discretion.

    Section 10.7.     Entire Agreement. This Agreement, together with the Exhibits and Schedules hereto, and the Confidentiality Agreement constitute the entire agreement between the parties with respect to the subject matter of this Agreement and supersede any prior discussion, correspondence, negotiation, proposed term sheet, agreement, understanding or arrangement and there are no agreements, understandings, representations or warranties between the parties other than those set forth or referred to in this Agreement.

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 Section 10.8.   Counterparts. This Agreement may be executed in any number of counterparts, each of which shall constitute one and the same instrument, and either party hereto may execute this Agreement by signing any such counterpart.

 Section 10.9.    Governing Law; Jurisdiction; and Venue. (a)  This Agreement shall be construed, and the rights and obligations of the parties hereunder determined, in accordance with the substantive laws of the State of New York, without regard to its conflict-of-laws principles.

(b)               For the purposes of any suit, action or proceeding based upon, arising out of or relating to this Agreement or the negotiation, execution or performance hereof, the parties hereby expressly submit to the jurisdiction of all federal and state courts sitting within the confines of the federal Eastern District of New York (the “Venue Area”) and consent that any order, process, notice of motion or other application to or by any such court or a judge thereof may be served within or without such court’s jurisdiction by registered mail or by personal service in accordance with Section 9.1.  The parties agree that such courts shall have the exclusive jurisdiction over any such suit, action or proceeding commenced by either or both of said parties.  

(c)                Each party hereby irrevocably waives any objection that it may now or hereafter have to the laying of venue of any suit, action or proceeding based upon, arising out of or relating to this Agreement or the negotiation, execution or performance hereof, brought in any federal or state court sitting within the confines of the Venue Area and hereby further irrevocably waives any claim that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum.

  Section 10.10.    No Third-Party Beneficiaries. No person, firm or other entity other than Seller and Purchaser and their permitted successors and assigns, shall have any rights or claims under this Agreement; provided, however, that Purchaser’s successors and/or assigns shall not be entitled to the benefit of any of Seller’s representations and warranties as to any Loan and the specific remedies provided in this Agreement for breach thereof.  

   Section 10.11.   Waiver of Trial by Jury. EACH OF SELLER AND PURCHASERhereby waiveS to the fullest extent permitted by applicable law any right it may have to a trial by jury with respect to any litigation directly or indirectly arising out of, under or in connection with this Agreement or the transactions contemplated by this Agreement.  EACH OF the Parties HERETO hereby (a) certifies that no representative, agent or attorney of the other party has represented, expressly or otherwise, that such other party would not, in the event of litigation, seek to enforce the foregoing waiver and (b) acknowledges that it has been induced to enter into this Agreement and the transactions contemplated by this Agreement, as applicable, by, among other things, the mutual waivers and certifications contained in thiS SECTION 10.11. 

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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.

[●]

By:

 

_____________________________________

Name:
                                                                        Title:

 

 

THE SUFFOLK COUNTY NATIONAL BANK OF RIVERHEAD

By:

 

_____________________________________

Name:
                                                                        Title:

 

 

 

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