1.1	Certain Definitions	1
1.2	Accounting Terms	10
1.3	Interpretation	10

2.1	Purchase and Sale of Assets	10
2.2	Assumption of Liabilities	11
2.3	Purchase Price	13
2.4	Assumption of IRA and Keogh Account Deposits	13
2.5	Sale and Transfer of Servicing	14

3.1	Closing	14
3.2	Payment at Closing	14
3.3	Adjustment of Purchase Price	14
3.4	Proration; Other Closing Date Adjustments	15
3.5	Seller Deliveries	15
3.6	Purchaser Deliveries	16
3.7	Delivery of the Loan Documents	17
3.8	Collateral Assignments and Filing	17
3.9	Owned Real Property Filings	17
3.10	Allocation of Purchase Price	17

4.1	Transitional Arrangements	18
4.2	Customers	19
4.3	Direct Deposits	20
4.4	Direct Debits	21
4.5	Escheat Deposits	21
4.6	Access to Records	21
4.7	Interest Reporting and Withholding	21
4.8	Negotiable Instruments	22
4.9	ATM/Debit Cards; POS Cards	22

 

4.10	Data Processing Conversion for the Branches and Handling of Certain Items	23
4.11	Employee Training	24
4.12	Affinity Programs	24

5.1	Corporate Organization and Authority	25
5.2	No Conflicts	25
5.3	Approvals and Consents	25
5.4	Leases	25
5.5	Undisclosed Liabilities	26
5.6	Regulatory Matters	26
5.7	Compliance with Laws	26
5.8	Loans and Reimbursement Obligations	26
5.9	Records	27
5.10	Title to Assets	27
5.11	Deposits	27
5.12	Environmental Laws; Hazardous Substances	27
5.13	Brokers’ Fees	28
5.14	Owned Real Property	28
5.15	Limitations on Representations and Warranties	28

6.1	Corporate Organization and Authority	30
6.2	No Conflicts	30
6.3	Approvals and Consents	30
6.4	Regulatory Matters	30
6.5	Litigation and Undisclosed Liabilities	31
6.6	Operation of the Branches	31
6.7	Financing to be Available	31
6.8	Brokers’ Fees	31
6.9	Limitations on Representations and Warranties	31

7.1	Activity in the Ordinary Course	32
7.2	Access and Confidentiality	33
7.3	Regulatory Approvals	35
7.4	Consents	35
7.5	Efforts to Consummate; Further Assurances	36

7.6	Solicitation of Accounts	36
7.7	Insurance	37
7.8	Servicing Prior to Closing Date	37
7.9	Change of Name, Etc	37
7.10	Right of First Refusal	38

8.1	Tax Representations	39
8.2	Proration of Taxes	39
8.3	Sales and Transfer Taxes	39
8.4	Information Returns	39
8.5	Payment of Amount Due under Article 8	39
8.6	Assistance and Cooperation	39
8.7	Transferred Employees	40

9.1	Conditions to Obligations of Purchaser	43
9.2	Conditions to Obligations of Seller	43

10.1	Termination	44
10.2	Effect of Termination	45

11.1	Indemnification	45
11.2	Exclusivity	48
11.3	AS-IS Sale; Waiver of Warranties	48

12.1	Survival	48
12.2	Assignment	49
12.3	Binding Effect	49
12.4	Public Notice	49

 

12.5	Notices	49
12.6	Expenses	50
12.7	Governing Law	50
12.8	Waiver of Jury Trial	50
12.9	Entire Agreement; Amendment	50
12.10	Third Party Beneficiaries	51
12.11	Counterparts	51
12.12	Headings	51
12.13	Severability	51
12.14	Specific Performance	51

Schedule 1.1(a)	Appraised Value of Owned Real Properties
Schedule 1.1(b)	Branches/Real Properties
Schedule 1.1(c)	Seller’s Knowledge
Schedule 1.1(d)	Branch Employees
Schedule 1.1(e)	Excluded Loans
Schedule 2.2(c)	Letters of Credit
Schedule 2.4(c)	Excluded IRA/Keogh Account Deposits
Schedule 3.5(a)	Form of Deed
Schedule 3.5(b)	Form of Bill of Sale
Schedule 3.5(c)	Form of Assignment and Assumption Agreement
Schedule 3.5(d)	Form of Assignment of Lease and Assumption Agreement
Schedule 3.5(e)	Form of Certificate of Officer
Schedule 3.6(d)	Form of Certificate of Officer
Schedule 4.1(d)	Technical Personnel Consultation Rates
Schedule 4.10	Schedule of Processing Fees
Schedule 7.4(b)-1	Estoppel Certificate – Branch Lease
Schedule 7.4(b)-2	Estoppel Certificate – Tenant Lease
Schedule 7.4(c)	Form of Non Disturbance Agreement

“Item” means (a) checks, drafts, negotiable orders of withdrawal and items of a like kind which are drawn on or deposited and credited to the Deposit accounts, and (b) payments, advances, disbursements, fees, reimbursements and items of a like kind which are debited or credited to the Loans.

 

“Transfer Date” means the Closing Date, except that for Branch Employees on disability leave at the Closing Date, “Transfer Date” means the date of active commencement of such Branch Employee’s employment with Purchaser or one of its Affiliates, as applicable.

(i)

Cash on Hand;

(ii)

the Owned Real Property;

(iii)

the Personal Property;

(iv)

the Loans (together with all Accrued Interest thereon), and servicing rights related thereto pursuant to Section 2.5;

(v)

the Reimbursement Obligations;

(vi)

the Branch Leases, Tenant Leases and ATM Lease;

(vii)

the Branch Lease Security Deposits;

(viii)

the Safe Deposit Agreements; and

(ix)

the Records.

(i)

the Deposits, including IRA and Keogh Accounts to the extent contemplated by Section 2.4;

(ii)

the Branch Leases, Tenant Leases, ATM Leases, Tenant Security Deposits and the Owned Real Property;

(iii)

the Safe Deposit Agreements;

(iv)

except as set forth in Section 8.7, all liabilities arising out of the employment of the Branch Employees and their dependents and beneficiaries;

(v)

the Loans, and the servicing of the Loans pursuant to Section 2.5;

(vi)

subject to Section 2.2(c), Seller’s obligations with respect to the Letters of Credit; and

(vii)

any liability for (a) Taxes of, or relating to, the Assets, the Liabilities or the business or operation of the Branches, other than Excluded Taxes and (b) Transfer Taxes.

(i)

Seller will notify the holders of Deposits to be transferred on the Closing Date that, subject to the terms and conditions of this Agreement, Purchaser will be assuming liability for such Deposits; and

(ii)

each of Seller and Purchaser shall provide, or join in providing where appropriate, all notices to customers of the Branches and other persons that either Seller or Purchaser, as the case may be, is required to give under applicable law or the terms of any other agreement between Seller and any customer in connection with the transactions contemplated hereby.

 

(i)

is and has been operated by Seller in compliance with all applicable Environmental Laws;

(ii)

is not the subject of any written notice from any governmental authority or other person alleging the violation of, or liability under, any applicable Environmental Laws;

(iii)

is not currently subject to any court order, administrative order or decree arising under any Environmental Law;

(iv)

to Seller’s knowledge, has not been used for the disposal of Hazardous Substances and is not contaminated with any Hazardous Substances requiring remediation or response under any applicable Environmental Law; and

(v)

to Seller’s knowledge, has not had any releases, emissions, or discharges of Hazardous Substances except as permitted under applicable Environmental Laws.

(i)

Increase or agree to increase the salary, remuneration or compensation of any employee at any Branch other than in accordance with Seller’s existing customary policies generally applicable to employees having similar rank or duties or as required by contractual commitments outstanding on the date hereof, or pay or agree to pay any uncommitted bonus to any employee at any Branch other than regular bonuses granted in the ordinary course of Seller’s business, or, other than in the ordinary course of business consistent with past practice, transfer any employee at any Branch (other than any employees at any Branch who do not become Transferred Employees) to another branch or office of Seller or any of its Affiliates, other than temporary assignments of a fill-in nature in the ordinary course of business;

(ii)

Transfer to or from any Branch to or from any of Seller’s other operations or branches any material Assets or any Deposits, except (A) in the ordinary course of business or as contemplated by this Agreement, (B) upon the unsolicited request of a depositor or customer, (c) for Deposits which Purchaser agrees to transfer pursuant to the householding methodology or (d) if such Deposit is pledged as security for a loan or other obligation that is not a Loan;

(iii)

Sell, transfer, assign, encumber or otherwise dispose of or enter into any contract, agreement or understanding to sell, transfer, assign, encumber or dispose of any of the Assets existing on the date hereof, except in the ordinary course of business consistent with past practice;

(iv)

Except pursuant to the request of the applicable obligor, sell, transfer, assign, encumber or otherwise dispose of or enter into any contract, agreement or understanding to sell, transfer, assign, encumber or dispose of any Loan;

(v)

Make or agree to make any material improvements to the Owned Real Property, except with respect to commitments for such made on or before the date of this Agreement, as set forth in Schedule 7.1(v) of the Seller Disclosure Schedule, and normal maintenance or refurbishing purchased or made in the ordinary course of business;

(vi)

File any application or give any notice to relocate or close any Branch or relocate or close any Branch;

(vii)

Amend, terminate or extend in any material respect any Branch Lease, Tenant Lease or the ATM Lease; provided, however, Seller may extend any Branch Lease, Tenant Lease or the ATM Lease if, in its reasonable business judgment, and after consultation with Purchaser, Seller determines such extension is necessary to deliver the Branch on the Closing Date as a fully operative branch banking operation;

(viii)

Except as permitted by this Section 7.1, knowingly take, or knowingly permit its Affiliates to take, any action (A) impairing Purchaser’s rights in any Deposit or Asset, (B) impairing in any way the ability of Purchaser to collect upon any Loan or Reimbursement Obligation, or (C) except in the ordinary course of servicing, waiving any material right, whether in equity or at law, that it has with respect to any Loan or Reimbursement Obligation;

(ix)

Fail to maintain loan underwriting or loan review policies in all material respects in accordance with the loan underwriting or loan review policies in effect at similarly situated branches of Seller located in the applicable general geographic area of the Branches;

(x)

Fail to price Deposits in all material respects in accordance with the deposit pricing policies in effect at similarly situated branches of Seller and Legacy located in the applicable general geographic area of the Branches; or

(xi)

Agree with, or commit to, any person to do any of the things described in clauses (i) through (x) except as contemplated hereby.

(b)     Seller shall permit Purchaser, at its expense, to cause a “phase I environmental audit” and a “phase II environmental audit” to be performed at each Branch at any time after the Merger Effective Time and prior to the Closing Date; provided, however, that Purchaser shall have the right to conduct a “phase II environmental audit” prior to the Closing only to the extent that a “phase II environmental audit” is within the scope of additional testing recommended by the “phase I environmental audit” to be performed as a result of a "Recognized Environmental Condition" (as such term is defined by The American Society for Testing Materials) that was discovered in the “phase I environmental audit.”  Prior to performing any “phase II environmental audits,” Purchaser will provide Seller with a copy of its proposed work plan and Purchaser will cooperate in good faith with Seller to address any comments or suggestions made by Seller regarding the work plan.  Purchaser and its environmental consultant shall conduct all environmental assessments pursuant to this Section 7.2(b) at mutually agreeable times and so as to eliminate or minimize to the greatest extent possible interference with Seller’s operation of its business, and Purchaser shall maintain or cause to be maintained adequate insurance with respect to any assessment conducted hereunder.  Purchaser shall be required to restore each Owned Real Property to its pre-assessment condition.  All costs and expenses incurred in connection with any “phase I environmental audit” and any “phase II environmental audit,” and any restoration and clean up, shall be borne solely by Purchaser.

(c)     Each party to this Agreement shall hold, and shall cause its respective directors, officers, employees, agents, consultants and advisors to hold, in strict confidence, except to the extent necessary to discharge obligations pursuant to Section 7.3 or unless compelled to disclose by judicial or administrative process or, based on the advice of its counsel, by other requirements of law or the applicable requirements of any regulatory agency or relevant stock exchange, all non-public records, books, contracts, instruments, computer data and other data and information (collectively, “Information”) concerning the other party (or, if required under a contract with a third party, such third party) furnished to it by such other party or its representatives pursuant to this Agreement (except to the extent that such information can be shown to have been (i) previously known by such party on a non-confidential basis, (ii) in the public domain through no fault of such party or (iii) later lawfully acquired from other sources by the party to which it was furnished), and neither party shall release or disclose such Information to any other person, except its auditors, attorneys, financial advisors, bankers, other consultants and advisors and, to the extent permitted above, any Regulatory Authority.  Without limiting the foregoing, Purchaser may meet with Branch Employees, promptly following execution of this Agreement and through the Closing to discuss employment retention and other employment related matters at mutually agreeable times and so long as such meetings do not interfere unreasonably with the conduct of Seller’s business.

7.6     Solicitation of Accounts.  (a)  Until the Closing Date and for an additional three (3) years following the Closing Date, Seller agrees that it will not use confidential information contained in Branch customer information files to solicit financial services business, including deposits, loans and other financial products.  Except as set forth in the foregoing sentence, nothing in this Agreement shall be construed to at any time prohibit or otherwise limit Seller or any of its Affiliates from soliciting financial services business, including deposits, loans and other financial products, provided, however, that, during such three year period, Seller shall not engage in any solicitation of financial services business by way of advertisements specifically directed to or targeted at customers who hold Deposits (including, without limitation, Moved Deposits) or received Loans as of the date of this Agreement, except that customers who are retained by Seller following the Closing, by virtue of other deposit accounts, loans held at branches of Seller not subject to this P&A Transaction, home equity loans, home equity lines of credits (HELOCs) or other financing relationships may be so solicited by Seller and/or its Affiliates, and Purchaser hereby understands and acknowledges that Seller and/or its Affiliates will conduct such solicitations from and after the date of this Agreement as well as after the Closing Date.  Purchaser understands and acknowledges that Seller or its Affiliates will conduct banking operations in the same geographic area as the Branches.

(i)

Base salary shall be at least equivalent to the rate of annual base salary or regular hourly wage rate, as applicable, paid by Seller to such Transferred Employee as of the Business Day prior to the Closing Date.

(ii)

Except as otherwise specifically provided herein, from and after the Closing Date, each Transferred Employee shall be provided employee benefits and compensation opportunities that are substantially equivalent to those provided to similarly situated employees of the Purchaser in accordance with the terms of Purchaser’s employee benefit plans commencing on such Transferred Employee’s Transfer Date.  Without limiting the generality of the foregoing, Purchaser shall provide each Transferred Employee with credit for such Transferred Employee’s period of service as recognized by Seller immediately prior to the applicable Transfer Date (including any service credited from predecessors by merger or acquisition to Seller) with respect to all of Purchaser’s employee benefit plans, practices and policies (but not for accrual of benefits under any defined benefit pension plan or post-retirement welfare benefit plan of the Purchaser), provided that such service shall not be recognized to the extent such recognition would result in a duplication of benefits and provided that such credit for prior service with Seller will not be provided with respect to the Purchaser’s employee stock ownership plan.

(iii)

Each Transferred Employee shall be eligible to participate in the medical, dental, or other welfare plans of Purchaser, as such plans may exist, on and after the applicable Transfer Date, and any pre-existing conditions, provisions or actively at-work requirements of such plans shall be waived with respect to any such Transferred Employee (it being understood that general requirements of formal employment with Purchaser shall not be waived).  All Transferred Employees who cease participation in a Seller’s medical and/or dental or other welfare plans on the applicable Transfer Date and become participants in a corresponding Purchaser plan shall receive credit for all co-payments and deductibles paid under Seller’s medical and dental plans, upon substantiation, in a form satisfactory to Purchaser that such co-payments and/or deductibles or portion thereof have been satisfied.

(iv)

During the period from the Closing Date until the first anniversary thereof, Purchaser shall provide each Transferred Employee whose employment is terminated by the Purchaser or its Affiliates without cause, subject to such Transferred Employee’s execution and non-revocation of a release of claims, with severance benefits no less favorable to such Transferred Employee than those that would have been provided under the severance plans of Seller and its Affiliates applicable to such Transferred Employee immediately prior to the Closing Date.

(c)     Except as provided in this Section 8.7, Seller shall remain solely responsible for any and all Liabilities and obligations arising under the employee benefit plans (or associated assets and liabilities) of Seller and its Affiliates with respect to service of the Transferred Employees prior to the Closing Date, and Purchaser shall not assume or otherwise acquire any of the employee benefit plans of Seller and its Affiliates.  Seller shall pay, discharge, and be responsible for (i) all salary and wages arising out of employment of each Transferred Employee through the applicable Transfer Date, and (ii) any employee benefits (including, but not limited to, accrued vacation) arising under Seller’s employee benefit plans and employee programs prior to the applicable Transfer Date, including (x) benefits with respect to claims incurred prior to the Closing Date but reported after the Closing Date and (y) severance payable to any Branch Employee solely as a result of the cessation of such Branch Employee’s employment with Seller and its Affiliates pursuant to and in accordance with the terms and conditions of the severance plan of Seller and its Affiliates applicable to such Branch Employee as of immediately prior to the Closing Date, it being understood that Purchaser shall be responsible for any such severance payable solely as a result of Purchaser’s failure to offer employment to such Branch Employee in accordance with Sections 8.7(a) and (b).  From and after the applicable Transfer Date, Purchaser shall pay, discharge, and be responsible for all salary, wages, and benefits arising out of or relating to the employment of each Transferred Employee by Purchaser from and after the applicable Transfer Date, including, without limitation, all claims under Purchaser’s welfare benefits plans incurred after the applicable Transfer Date.  Claims are incurred as of the date services are provided or disability payments are accrued, notwithstanding when the injury or illness may have occurred.  Seller shall be responsible for all retiree medical claims and benefits under Seller's retiree medical plans or programs with respect to the Transferred Employees and any former Branch Employees, such that the Purchaser shall have no liability with respect to any retiree medical plan maintained by Seller.

(i)

any material breach of any representation or warranty made by Seller in this Agreement, except for any representation or warranty set forth in Section 5.12 (which is subject to Section 11.1(a)(iv));

(ii)

any material breach of any covenant or agreement to be performed by Seller pursuant to this Agreement;

(iii)

any liability, obligation or duty of Seller that is not a Liability; and

(iv)

any material breach of any representation or warranty made by Seller in Section 5.12, and, subject to Section 11.1(g), the presence of any hazardous substance at any of the Owned Real Property which is required, by any applicable Environmental Law, to be removed or otherwise remediated.

(i)

any material breach of any representation or warranty made by Purchaser in this Agreement;

(ii)

any material breach of any covenant or agreement to be performed by Purchaser pursuant to this Agreement; or

(iii)

the Liabilities.

If to Seller:

Legacy Banks 99 North Street

Pittsfield, Massachusetts  01201

Attention:

J. Williar Dunlaevy Patrick Sullivan

With a copy to:

Berkshire Hills Bancorp, Inc. 24 North Street

Pittsfield, Massachusetts 01201

Attention: Wm. Gordon Prescott

and

Luse Gorman Pomerenk & Schick

5335 Wisconsin Avenue, N.W., Suite 780

Washington, D.C. 20015 Attention: Marc P. Levy

 

If to Purchaser:

NBT Bank, NA

Norwich, NY 13815

Attention: Michael J. Chewens, CFO

With a copy to:

F. Sheldon Prentice, Esq.

NBT Bank, NA

52 S. Broad Street

Norwich, NY 13815

	LEGACY BANKS
	By:	/s/ J. Williar Dunlaevy
		Name:   J. Williar Dunlaevy
		Title:     Chairman of the Board
	BERKSHIRE HILLS BANCORP, INC., solely for purposes of Section 7.10
	By:	/s/ Michael P. Daly
		Name:   Michael P. Daly
		Title:     President and Chief Executive Officer
	NBT BANK, NA
	By:	/s/ Michael J. Chewens
		Name:   Michael J. Chewens
		Title:     Chief Financial Officer