Federal Deposit
Insurance Corporation

{{2-29-92 p.C-769}}

   [¶10,167] In the Matter of BankEast, Manchester, New Hampshire, Docket No. FDIC-90-219c&b (1-18-91).

   Bank and institution-affiliated parties to refrain from unsafe or unsound practices, such as paying dividends to Bank's holding company; purchasing any asset of the holding company or its subsidiaries for consideration in excess of fair value; and transferring assets to the holding company or its subsidiaries without receiving fair value. (This order was terminated by order of the FDIC dated 10-17-91; see ¶15,340.)

   [.1] Bank Holding Company—Payment of Dividends to—Restricted
   [.2] Bank Holding Company—Purchase of Assets from—Restricted
   [.3] Bank Holding Company—Transfer of Assets to—Restricted

In the Matter of

BANKEAST
MANCHESTER, NEW HAMPSHIRE
(Insured State Nonmember Bank)
ORDER TO CEASE AND DESIST

   The Federal Deposit Insurance Corporation ("FDIC") on October 22, 1990, issued to BankEast, Manchester, New Hampshire ("Bank") a NOTICE OF CHARGES AND OF HEARING ("NOTICE") under section 8(b) (1) of the Federal Deposit Insurance Act ("Act"), 12 U.S.C. § 1818(b) (1). The NOTICE alleged that the Bank was about to engage in unsafe or unsound banking practices, unless restrained, and advised the Bank of its right to a hearing on such charges under section 8(b) (1) of the Act, 12 U.S.C. § 1818 (b) (1).
   The Bank and counsel for the FDIC thereafter executed a STIPULATION AND CONSENT TO THE ISSUANCE OF AN ORDER TO CEASE AND DESIST ("CONSENT AGREEMENT"), dated January 18, 1991, whereby solely for the purpose of this proceeding, the Bank consented to the issuance of an ORDER TO CEASE AND DESIST ("ORDER") by the FDIC.
   The FDIC considered the matter and determined that it had reason to believe that the Bank was about to engage in unsafe or unsound banking practices. The FDIC acknowledges that, to date, the Bank has not engaged in any of the unsafe or unsound practices alleged in the NOTICE. The FDIC, therefore, accepted the CONSENT AGREEMENT and issued the following:

   IT IS HEREBY ORDERED that the Bank and its "institution-affiliated parties," as that term is defined in section 3(u) of the Act, 12 U.S.C. § 1813(u), refrain from the following unsafe or unsound banking practices:

   [.1] (a) declaring, paying, approving or otherwise allowing a dividend of any kind to be paid to the Bank's holding com- {{2-29-92 p.C-770}}pany, BankEast Corporation, Manchester, New Hampshire ("Holding Company") without the prior written approval of the Commissioner of Banks of the State of New Hampshire ("commissioner") and the Regional Director of the Boston Region of the Federal Deposit Insurance Corporation ("Regional Director");

   [.2] (b) purchasing any subsidiary or other asset of the Holding Company or any asset of any subsidiary of the Holding Company, including, without limitation, BankEast Services, Inc., BankEast Trust Company, BankEast Mortgage corporation, and BankEast Leasing Corporation, for any amount, payment, or other consideration in excess of fair value. For the purpose of this paragraph (b), "fair value" shall be determined by an appraiser who is both qualified and experienced to perform such an appraisal. The results of the appraisal shall be reviewed by the Commissioner and Regional Director as to the thoroughness and the appropriateness of the underlying assumptions used to determine fair value, and as to whether the fair value reached in the appraisal is reasonable. The Bank shall not make any purchase covered by this paragraph (b) unless the purchase is based upon an appraisal giving an appraised fair value that has been determined by the Regional Director and the Commissioner in writing to be reasonable. The purchase of assets from the Holding Company or any subsidiary thereof shall also be in accordance with any relevant provisions of Sections 23A and 23B of the Federal Reserve Act, (12 U.S.C. § 371c and 371c-1); and/or,

   [.3] (c) transferring assets to the Holding Company or any of its subsidiaries for less than fair value, or assuming any obligations of the Holding Company or any of its subsidiaries without receiving fair value in exchange for such assumption.
   This ORDER shall become effective immediately upon its issuance.
   The provisions of this ORDER shall be binding upon the Bank and its institution-affiliated parties.
   The provisions of this ORDER shall remain effective and enforceable except to the extent that, and until such time as any provisions of this ORDER shall have been modified, terminated, suspended, or set aside by the FDIC.
   Pursuant to delegated authority.
   Dated at Needham, Massachusetts this 18th day of January, 1991.