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BRANCH PURCHASE AND ASSUMPTION AGREEMENT
dated as of
June 25, 0000
xxxxxxx
XXXX XX XXXXXXX NATIONAL TRUST AND SAVINGS ASSOCIATION
and
COUNTY BANK
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TABLE OF CONTENTS
PAGE
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ARTICLE 1 Definitions. . . . . . . . . . . . . . . . . . . . . . 1
1.1 Definitions. . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE 2 Purchase and Sale. . . . . . . . . . . . . . . . . . . 6
2.1 Purchase and Sale. . . . . . . . . . . . . . . . . . . 6
2.2 Closing. . . . . . . . . . . . . . . . . . . . . . . . 7
2.3 Transitional Matters . . . . . . . . . . . . . . . . . 10
2.4 Employee Considerations. . . . . . . . . . . . . . . . 13
ARTICLE 3 Price and Adjustments. . . . . . . . . . . . . . . . . 16
3.1 Price. . . . . . . . . . . . . . . . . . . . . . . . . 16
3.2 Adjustments. . . . . . . . . . . . . . . . . . . . . . 16
ARTICLE 4 Additional Covenants . . . . . . . . . . . . . . . . . 20
4.1 Seller's Covenants . . . . . . . . . . . . . . . . . . 20
4.2 Buyer's Covenants. . . . . . . . . . . . . . . . . . . 24
4.3 Consents . . . . . . . . . . . . . . . . . . . . . . . 25
4.4 Environmental Matters. . . . . . . . . . . . . . . . . 25
4.5 Valuation of the Assets. . . . . . . . . . . . . . . . 33
4.6 Clearing Items . . . . . . . . . . . . . . . . . . . . 33
4.7 XXX Deposits and Xxxxx Accounts. . . . . . . . . . . . 34
4.8 Interest Reporting and Withholding . . . . . . . . . . 34
4.9 Eminent Domain or Taking . . . . . . . . . . . . . . . 34
4.10 Damage or Destruction. . . . . . . . . . . . . . . . . 35
ARTICLE 5 Representations and Warranties . . . . . . . . . . . . 36
5.1 Seller's Representations and Warranties. . . . . . . . 36
5.2 Buyer's Representations and Warranties . . . . . . . . 38
ARTICLE 6 Understandings . . . . . . . . . . . . . . . . . . . . 40
6.1 Depositors' Rights . . . . . . . . . . . . . . . . . . 40
6.2 Unclaimed Property . . . . . . . . . . . . . . . . . . 40
6.3 Head Office Accounts . . . . . . . . . . . . . . . . . 40
6.4 Limitation of Warranties . . . . . . . . . . . . . . . 41
ARTICLE 7 Conditions to the Closing. . . . . . . . . . . . . . . 41
7.1 Seller's Conditions. . . . . . . . . . . . . . . . . . 41
7.2 Buyer's Conditions . . . . . . . . . . . . . . . . . . 42
ARTICLE 8 Termination. . . . . . . . . . . . . . . . . . . . . . 44
8.1 Events of Termination. . . . . . . . . . . . . . . . . 44
8.2 Liability for Termination. . . . . . . . . . . . . . . 44
ARTICLE 9 Survival, Indemnification. . . . . . . . . . . . . . . 45
9.1 Survival . . . . . . . . . . . . . . . . . . . . . . . 45
9.2 Seller's Indemnity . . . . . . . . . . . . . . . . . . 45
9.3 Buyer's Indemnity . . . . . . . . . . . . . . . . . . 46
9.4 Arbitration of Disputes. . . . . . . . . . . . . . . . 46
9.5 Limit on Indemnities . . . . . . . . . . . . . . . . . 47
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ARTICLE 10 Taxes. . . . . . . . . . . . . . . . . . . . . . . . . 48
10.1 Obligations of the Buyer and the Seller. . . . . . . . 48
10.2 Access to Information. . . . . . . . . . . . . . . . . 48
10.3 Allocation of Consideration. . . . . . . . . . . . . . 49
ARTICLE 11 Miscellaneous. . . . . . . . . . . . . . . . . . . . . 49
11.1 Public Notice. . . . . . . . . . . . . . . . . . . . . 49
11.2 Assignment . . . . . . . . . . . . . . . . . . . . . . 49
11.3 Notices. . . . . . . . . . . . . . . . . . . . . . . . 49
11.4 Time . . . . . . . . . . . . . . . . . . . . . . . . . 50
11.5 Expenses . . . . . . . . . . . . . . . . . . . . . . . 50
11.6 Communications . . . . . . . . . . . . . . . . . . . . 50
11.7 Entire Agreement . . . . . . . . . . . . . . . . . . . 50
11.8 Amendment. . . . . . . . . . . . . . . . . . . . . . . 51
11.9 Governing Law, Severability. . . . . . . . . . . . . . 51
11.10 Waiver . . . . . . . . . . . . . . . . . . . . . . . . 51
11.11 Confidentiality. . . . . . . . . . . . . . . . . . . . 51
11.12 Third Party Rights . . . . . . . . . . . . . . . . . . 52
11.13 Headings . . . . . . . . . . . . . . . . . . . . . . . 52
11.14 Counterparts . . . . . . . . . . . . . . . . . . . . . 53
SCHEDULES
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A List of Branches
1.1(a) Branch Real Estate
1.1(b) Furniture, Fixtures and Equipment
1.1(c) Other Liabilities
1.1(d) Deposit Summary
2.2(b)(i)(A) Form of Grant Deed
2.2(b)(i)(B) Form of Xxxx of Sale
2.2(b)(i)(C) Form of Assignment and Assumption
2.2(d) Contracts
2.2(e) Leases
3.1 Leasehold Improvements
4.4(c) Phase I Environmental Site
Assessments and Asbestos Surveys
5.1(e) Litigation
5.1(h) Employees
5.2(j) Real Estate Disclosures
6.3 Head Office Accounts
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BRANCH PURCHASE AND ASSUMPTION AGREEMENT
THIS BRANCH PURCHASE AND ASSUMPTION AGREEMENT ("Agreement") is made as of
June 25, 1997, by and between BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION, a national banking association established under the laws of the
United States (the "Seller"), and COUNTY BANK, a California banking
corporation (the "Buyer").
WHEREAS, the Seller maintains the branch or branches listed on
Schedule A hereto (sometimes referred to herein collectively as the
"Branches" and individually as a "Branch");
WHEREAS, the Buyer wishes to purchase certain of the assets and assume
certain of the liabilities of the Branches and the Seller is willing to
sell and transfer the same upon the terms and subject to the conditions
hereinafter set forth; and
WHEREAS, the Buyer intends that retail and business banking services
will be offered in the geographic areas served by the Branches.
NOW, THEREFORE, in consideration of the premises and the respective
representations, warranties, covenants, agreements and conditions contained
herein, the Seller and the Buyer hereby agree as follows:
ARTICLE 1
DEFINITIONS
1.1 DEFINITIONS. For purposes of this Agreement:
"Account" means, as of any date, a deposit liability of the Seller which
(i) is not represented by a certificate of deposit having a fixed maturity
and (ii) is maintained at one of the Branches.
"Accrued Expenses" means the accrued and unpaid expenses appearing as a
liability on the Financial Statements pursuant to Section 3.2(c).
"Accrued Interest" on any Deposits at any date means interest which is
accrued on such Deposits to and including such date and not yet posted to
such deposit accounts.
"Affiliate" of a person means any person directly or indirectly
controlling or controlled by or under direct or indirect common control with
such person.
"Agreement" means this Branch Purchase and Assumption
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Agreement, including all schedules, exhibits and addenda, as modified,
amended or extended from time to time.
"Allocation" shall have the meaning set forth in Section 10.3.
"Assets" means the Branch Real Estate, the Furniture, Fixtures and
Equipment, Improvements, Leasehold Improvements, Cash on Hand, safe deposit
boxes located at the Branches (exclusive of the contents thereof), Prepaid
Expenses, Overdrafts and all books, records, files and documentation relating to
the foregoing.
"Assumed Contracts" shall have the meaning set forth in Section 2.2(d).
"Assumed Deposits" means all Deposits existing on the Closing Date in one
or more of the Branches, together with all Accrued Interest thereon as of the
Closing Date; PROVIDED, HOWEVER, that Assumed Deposits shall not include any
of the following, which shall be retained by Seller: (i) Deposits which
secure loans, (ii) Deposits not assumed pursuant to Sections 3.2(f), 3.2(g),
or 6.3, (iii) Deposits which secure Visa card accounts, and (iv) other
Deposits, if any, which the Buyer has advised the Seller, at least thirty
(30) Business Days prior to the Closing Date, it cannot legally accept.
"Branch Real Estate" means all real property owned by the Seller on which
any of the Branches is located and which is identified in the preliminary
title reports included in Schedule 1.1(a).
"Break-up Fee" means an amount to be paid by Buyer to Seller pursuant to
Section 5.2(i) hereof calculated by multiplying $75,000 times the number of
Branches listed on Schedule A hereto which are not acquired due to the
failure of Buyer to raise sufficient capital.
"Business Day" means a day on which the Seller is open for business in
California and which is not a Saturday or Sunday.
"Cash on Hand" means, as of any date, all xxxxx cash, vault cash, teller
cash, automated teller machine cash and prepaid postage maintained at the
Branches.
"Closing" and "Closing Date" refer to the closing of the sale, purchase,
transfer and assumption provided for herein to be held at the time and date
provided for in Section 2.2(a) hereof.
"Closing Financial Statement" means the estimated balance sheet of the
Branches prepared by the Seller as of the close of business at the Branches on
the Closing Date and on which are recorded as of such date, in accordance with
the Seller's normal practices and procedures, the Assets and the Liabilities
(except
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that such normal practices and procedures shall be modified as necessary to
implement prorations required by, or other provisions of, this Agreement).
"Continuation Coverage" shall have the meaning set forth in Section
2.4(g).
"Deposits" means, as of any date, all deposit liabilities of the Seller
that are Accounts or certificates of deposit maintained at the Branches,
including, without limitation, Time Deposits, and including all uncollected
items included in depositors' balances, as of such date.
"Direct Deposit Cut-off Date" shall have the meaning set forth in Section
4.1(g).
"Employee" means any employee employed on the Closing Date at one of the
Branches by Seller or its subsidiaries or Affiliates, including without
limitation, those employees on medical leave, family leave, military leave or
personal leave under Seller's policies.
"Federal Funds Rate" on any day means the per annum rate of interest
(rounded upward to the nearest 1/100 of 1%) which is the weighted average of
the rates on overnight federal funds transactions arranged on such day or, if
such day is not a banking day, the previous banking day, by federal funds
brokers computed and released by the Federal Reserve Bank of New York (or any
successor) in substantially the same manner as such Federal Reserve Bank
currently computes and releases the weighted average it refers to as the
"Federal Funds Effective Rate" at the date of this Agreement.
"Final Financial Statement" means the balance sheet of the Branches
prepared by the Seller as of the close of business at the Branches on the
Closing Date, and delivered by the Seller to the Buyer pursuant to Section
3.2(a)(ii). The Final Financial Statement is to be prepared in accordance
with the Seller's normal practices and procedures (except that such normal
practices and procedures shall be modified as necessary to implement
prorations required by, or other provisions of, this Agreement) and in a
manner consistent with the Closing Financial Statement.
"Financial Statements" shall mean collectively the Closing Financial
Statement, the Pre-Final Financial Statement and the Final Financial
Statement.
"Furniture, Fixtures and Equipment" means all furniture, fixtures and
equipment that are listed on Schedule 1.1(b) under the caption "Sold to
Buyer." Buyer acknowledges that there shall be excluded from this definition
any and all other items, including those listed on Schedule 1.1(b) under the
caption "Retained by Seller (Items Excluded from Sale)."
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"Improvements" means all improvements to the Branch Real Estate
purchased, installed or constructed by or on behalf of, and owned by, the
Seller and used in connection with the operation or maintenance of the
Branches, including, without limitation, buildings, structures, parking
facilities and drive-up teller facilities.
"Individual Retirement Account" or "XXX" means an account created by
trust for the exclusive benefit of an individual or his or her beneficiaries
in accordance with the provisions of Section 408 of the IRC.
"Initial Base Amount" shall have the meaning set forth in Section 3.1.
"XXX Deposits" shall have the meaning set forth in Section 3.2(f).
"IRC" means the Internal Revenue Code of 1986, as amended.
"Xxxxx Accounts" shall have the meaning set forth in Section 3.2(g).
"Lease" means any lease or sublease of a lease by which Seller has rights
to occupy and use Leased Real Estate or Leasehold Improvements or both.
"Leased Real Estate" means all real property on which any of the Branches
is located, which is occupied and used by the Seller pursuant to a lease.
"Leasehold Improvements" means all improvements on or constituting a
portion of Leased Real Estate, purchased, installed or constructed by or on
behalf of, and owned by, Seller and used in connection with the operation or
maintenance of the Branches, including, without limitation, buildings,
structures, parking facilities and drive-up teller facilities.
"Liabilities" means (i) the Assumed Deposits, (ii) the Assumed Contracts,
if any, (iii) the Seller's obligations to provide services from and after the
Closing Date in connection with the Assets and the Assumed Deposits,
including obligations with respect to safe deposit boxes, (iv) the Leases, if
any, and (v) such other liabilities of the Seller with respect to the
operations of the Branches as may be described on Schedule 1.1(c) (the "Other
Liabilities"); excluding, however, any Leases or Assumed Contracts as to
which any consents required to transfer the same to the Buyer at Closing
cannot be obtained; and no other duty, obligation or liability whatsoever
(including, without limitation, any and all penalties, fines, compensatory or
punitive damages of any kind whatsoever) of the Seller, its Affiliates or any
other person or with respect to the Assets or Liabilities.
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"Magnetic Tapes" shall mean the computer data storage tapes (which may be
in reel-to-reel or cartridge form) prepared by Seller which contain the
information to be used for an automated conversion of the Assumed Deposits.
"Market Value" shall mean, with respect to any Branch Real Estate and any
Improvements with respect thereto, the appraised market value thereof on an
"as is" basis, reflecting the highest and best use thereof in the condition
observed by the appraiser upon inspection and as such property physically and
legally exists without hypothetical conditions, assumptions or
qualifications. Market Value is the most probable price which a property
should bring in a competitive and open market under all conditions requisite
to a fair sale, the Buyer and the Seller each acting prudently and
knowledgeably, and assuming the price is not affected by undue stimulus.
Implicit in this definition is the consummation of a sale as of a specified
date and the passing of title from the Seller to the Buyer under conditions
whereby: (i) the Buyer and the Seller are typically motivated; (ii) both
parties are well informed or well advised, and acting in what they consider
their own best interests; (iii) a reasonable time is allowed for exposure in
the open market; (iv) payment is made in cash in U.S. dollars or in terms of
financial arrangements comparable thereto; and (v) the price represents the
normal consideration for the property sold, unaffected by special or creative
financing or sales concessions granted by anyone associated with the sale.
The appraisal shall be set forth in a report of appraisal by an independent
appraiser to be selected by the Buyer from a list of no more than five (5)
appraisers to be provided by the Seller. The cost of such appraisal shall be
borne equally by the Buyer and the Seller.
"Overdrafts" means only overdrafts in Transaction Accounts (other than
overdrafts extended pursuant to a formal line of credit or similar
arrangement) maintained at the Branches.
"Pre-Final Financial Statement" means the balance sheet of the Branches
prepared by the Seller as of the close of business at the Branches on the
Closing Date, and delivered by the Seller to the Buyer pursuant to Section
3.2(a)(i). The Pre-Final Financial Statement is to be prepared in accordance
with the Seller's normal practices and procedures (except that such normal
practices and procedures shall be modified as necessary to implement
prorations required by, or other provisions of, this Agreement) and in a
manner consistent with the Closing Financial Statement, and shall, to the
extent practicable, reflect actual Deposits and Cash on Hand as of the
Closing Date, and any third-party invoices (such as from communication
vendors) available by the time the Seller prepares the Pre-Final Financial
Statement.
"Prepaid Expenses" means the prepaid expenses appearing as an asset on
the Financial Statements pursuant to Section 3.2(c).
"Purchase Premium" means, as of the Closing Date, the sum of
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the following: (i) 7.28% times the average over the twenty (20) Business Days
preceding the Closing of the Assumed Deposits located in the Mariposa Branch;
plus (ii) 7.28% times the average over the twenty (20) Business Days
preceding the Closing of the Assumed Deposits located in the Dos Palos
Branch; plus (iii) 7.28% times the average over the twenty (20) Business Days
preceding the Closing of the Assumed Deposits located in the Xxxxxxxxxx
Branch; PROVIDED, HOWEVER, in the event that (x) the Assumed Deposits for any
Branch on the Closing Date are equal to or greater than 70% and less than 80%
of the aggregate Deposits for such Branch as reflected in the Deposit summary
figures set forth on Schedule 1.1(d), then the percentage multiplier to be
used in calculating the Purchase Premium attributable to such Branch shall be
reduced by 100 basis points, or (y) the Assumed Deposits for any Branch on
the Closing Date are less than 70% of the aggregate Deposits for such Branch
as reflected in the Deposit summary figures set forth on Schedule 1.1(d),
then the percentage multiplier to be used in calculating the Purchase Premium
attributable to such Branch shall be reduced by 200 basis points.
"Returned Items" shall have the meaning set forth in Section 3.2(h).
"Seller's Knowledge" or other similar phrases shall mean the actual
knowledge, without having conducted any independent inquiry or investigation,
of the regional manager of the Seller responsible for a Branch (but only as
to information as to such Branch) and Xxxxx X. Xxxxx, Vice President of the
Seller.
"Settlement Date" means the sixtieth (60th) calendar day following the
Closing Date.
"Time Deposit" means a certificate of deposit which is not transferable
or negotiable, and earns interest at a fixed rate for a specific term.
"Transaction Account" means any Account in respect of which deposits
therein are withdrawable in practice upon demand or upon which third party
drafts may be drawn by the depositor, including checking accounts, Alpha
accounts, NOW accounts and money market deposit accounts.
"Validation Run" shall have the meaning set forth in Section 2.2(b)(i)(F).
ARTICLE 2
PURCHASE AND SALE
2.1 PURCHASE AND SALE. Upon the terms and subject to the conditions of
this Agreement, the Seller agrees to sell and transfer and the Buyer agrees
to purchase and assume the Assets and the Liabilities at the Closing as
provided in Section 2.2.
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2.2 CLOSING.
(a) CLOSING DATE AND PLACE. The closing of the transactions provided
for herein will be held at the offices of the Seller, 000 Xxxxxxxxxx Xxxxxx,
Xxxxx 0000, Xxx Xxxxxxxxx, Xxxxxxxxxx 00000; PROVIDED, THAT transfer of the
Branch Real Estate shall be effected through a real estate escrow to be
opened with Chicago Title Company, 000 Xxxxxx Xxxxxx, Xxx Xxxxxxxxx,
Xxxxxxxxxx 00000. The closing shall be held on a Thursday that is mutually
agreeable to the Buyer and the Seller as soon as practicable following the
receipt of all government and other approvals and consents necessary for the
consummation of the transactions contemplated hereby (including the
expiration of any statutory waiting periods) and the satisfaction (or waiver)
of all other conditions to closing provided for herein. Notwithstanding the
foregoing, the Seller may, for any proper business reason, adjourn the date
and time of the Closing, upon written notice to the Buyer; PROVIDED, HOWEVER,
that the Seller shall use all reasonable efforts to reschedule the Closing to
take place at a time agreeable to the Buyer, which agreement shall not be
unreasonably withheld; PROVIDED FURTHER, HOWEVER, that the parties shall
agree in any event upon a date for the Closing which shall be on or prior to
March 31, 1998, or such other date as the Seller and the Buyer shall agree
upon in writing.
(b) CONVEYANCES; PAYMENT.
(i) The following shall be delivered by the parties at the
Closing, subject to Sections 2.2(d), 2.2(e), 3.2(b), 4.3 and the final
paragraph of Section 7.2:
(A) The Seller shall deliver to the Buyer one or more grant
deeds for the Branch Real Estate, if any, in the form attached
hereto as Schedule 2.2(b)(i)(A) and shall cooperate with the
Buyer in assisting the Buyer to obtain (at the Buyer's expense)
one or more CLTA policies of title insurance with respect to the
Branch Real Estate (or portions thereof) if the Buyer determines
to obtain such insurance;
(B) The Seller shall deliver to the Buyer one or more bills
of sale in the form attached hereto as Schedule 2.2(b)(i)(B) for
the Leasehold Improvements, if any, and the Furniture, Fixtures
and Equipment;
(C) The Seller shall deliver to the Buyer one or more
assignments in the form attached hereto as Schedule 2.2(b)(i)(C)
for the Leases, if any, and the Assumed Contracts, if any;
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(D) The Seller shall make the payment to the Buyer required
by Section 3.1 in immediately available funds (such payment to be
made no later than 11:00 a.m.(Pacific Time));
(E) The Seller shall use its reasonable efforts to have
available for pick-up at 0000 Xxxxxx Xxxxxx, Xxx Xxxxxxxxx,
Xxxxxxxxxx, by the Buyer by approximately 6:00 a.m. on the
morning following the Closing Date (I) hard copy (printed) lists
of Assumed Deposits maintained at each Branch, which lists shall
identify each Assumed Deposit by type of Account, with
appropriate information regarding the depositor and the terms of
the Account and (II) Magnetic Tapes. The Buyer shall have the
responsibility of making and paying for the appropriate courier
arrangements to pick up from the Seller the items referred to in
(I) and (II) above and to deliver the items referred to in (I) to
the appropriate Branches and the items referred to in (II) to the
Buyer's system vendor;
(F) The Seller shall prepare, separately for each Branch, a
readable set of the Magnetic Tapes and printed reports referred
to in Section 2.2(b)(i)(E) to be used for a validation (practice)
run ("Validation Run") on a mutually agreed-upon date thirty (30)
to sixty (60) calendar days prior to the Closing Date, at no cost
to the Buyer, PROVIDED THAT, depending on the number and
locations of the Branches, the parties may agree to conduct more
than one Validation Run. If the Buyer thereafter requests any
additional Magnetic Tapes (whether or not Buyer also concurrently
requests printed reports) for Validation Run purposes, the Seller
will provide the Magnetic Tapes (and printed reports if requested
by Buyer) at a cost to Buyer of $2,000 for each set of Magnetic
Tapes (whether or not accompanied by printed reports);
(G) The Seller shall deliver to the Buyer copies of written
consents to the assignment of any Assumed Contracts or Leases
requiring such consent; and
(H) The Buyer shall pay to the Seller the amount of the
interest which would accrue at the Federal Funds Rate in effect
on the Closing Date on the cash payment by the Seller pursuant to
Section 2.2(b)(i)(D).
(c) CLOSING COSTS; PRORATION. The Seller and the Buyer
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shall each pay one-half of any documentary, stamp, deed, sales, use or other
transfer taxes, recording fees and escrow fees relating to the sale of the
Assets and assumption of the Liabilities, including but not limited to the
assignment of the Leases. On the Closing Date, (i) all real and personal
property taxes and current installments of special assessments levied or
assessed with respect to the Branch Real Estate, the Improvements, the
Leasehold Improvements and the Furniture, Fixtures and Equipment shall be
prorated between the Seller and the Buyer on a daily basis as of the Closing
Date based upon the fiscal year of the appropriate taxing authority, and (ii)
utilities and any other normal maintenance and operating expenses relating to
the Branch Real Estate, the Leases, the Improvements, the Leasehold
Improvements and the Furniture, Fixtures and Equipment shall be prorated
between the Seller and the Buyer as of the Closing Date on a daily basis.
(d) CONTRACTS. At the Closing, the Seller shall assign to the Buyer all
of the Seller's right, title and interest in those equipment leases and
service and maintenance contracts, if any, relating to the operations of one
or more of the Branches which are set forth in Schedule 2.2(d) and which the
Buyer indicates in writing to the Seller not later than thirty (30) Business
Days prior to Closing the Buyer wishes to assume (collectively, the "Assumed
Contracts"). The Seller shall not be required to provide Buyer with any
information regarding, or to set forth in Schedule 2.2(d), equipment leases
or service and maintenance contracts which it believes are not legally
assignable and the Seller shall have no liability to the Buyer as the result
of its inability to accomplish assignments thereof. After the date of this
Agreement, the Seller shall not enter into, except with the prior written
consent of the Buyer, any service, maintenance or other contracts, or any
equipment lease, relating to the operations of the Branches for which the
Buyer shall have any responsibility after the Closing.
(e) LEASES. At the Closing, the Seller shall assign to the Buyer all of
the Seller's right, title and interest in the Leases, if any, set forth in
Schedule 2.2(e); PROVIDED, HOWEVER, that if the Seller notifies the Buyer not
later than thirty (30) Business Days prior to the Closing Date that one or
more such Leases are legally nonassignable without the consent of one or more
third parties, and that such consents have not been obtained, then (i) the
Seller shall not be required to assign such Lease or Leases at Closing, (ii)
Seller shall have no liability to the Buyer as the result of its inability to
accomplish such assignment and (iii) either (A) the Seller at its sole
discretion may elect to exercise its right under the final paragraph of
Section 7.2 to exclude the affected Branch from the Closing, and the parties
shall continue to be obligated to carry out the provisions of this Agreement
as to the remaining Branch or Branches or (B) if the Lease permits the Seller
to sublease the premises and the related Leasehold Improvements to the Buyer,
the Seller in its sole discretion may elect to sublease such
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premises and Leasehold Improvements to Buyer for the maximum term permitted
under the Lease, on substantially the same terms and conditions as the terms
and conditions of the Lease, in which case the consideration payable under
Article 3 shall be adjusted to reflect the Leasehold Improvements which will
not be transferred to the Buyer and the parties shall continue to be
obligated to carry out the provisions of this Agreement as to the remaining
Branch or Branches.
2.3 TRANSITIONAL MATTERS.
(a) CONDUCT OF BUSINESS PRIOR TO THE CLOSING. From the date hereof
until the Closing, except as expressly permitted by this Agreement or
otherwise consented to or approved by the Buyer in writing (such consent or
approval not to be unreasonably withheld):
(i) The Seller shall not permit the Branches to incur any
material liabilities or material obligations (whether directly or by
way of guaranty, endorsement, surety contract or otherwise) including
without limitation any obligation for borrowed money or evidenced by
any note, bond, debenture or similar instrument, except for deposit
liabilities incurred in the ordinary course of business pursuant to
the Seller's customary rate schedules, and except for other
liabilities and obligations incurred in the ordinary course of
business;
(ii) The Seller shall not sell, transfer, mortgage, encumber or
otherwise dispose of any of the Assets except for the disposition of
Assets (other than the Branch Real Estate, Improvements or Leasehold
Improvements) in the ordinary course of business;
(iii) Except as provided in Article 6, the Seller will not cause
the transfer from one or more of the Branches to the Seller's other
operations (except to another Branch) of any deposits of the type
included in the Liabilities; PROVIDED, HOWEVER, that the Seller may
transfer deposits to the Seller's other branches or offices upon
request of the depositors and may transfer to its other branches or
offices other deposits which are not to be transferred to Buyer
pursuant to this Agreement; PROVIDED, FURTHER, that, except in
connection with a general solicitation or general advertising not
targeted specifically at the depositors of the Assumed Deposits,
Seller will not solicit or encourage depositors to transfer deposits
to Seller's other branch offices;
(iv) The Seller shall not make any capital commitments with
respect to the Branch Real Estate, the Improvements and the Leasehold
Improvements except
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aggregate capital commitments made in the ordinary course of business
not exceeding $25,000 for each Branch;
(v) The Seller shall not grant any increase in the rate of
compensation or in the benefits payable or to become payable to any
current officer or employee of the Branches, or to any current agent
or consultant thereof, over the levels in effect as of the date
hereof, other than any regularly scheduled increases, including
bonuses, contemplated under contracts, policies or programs existing
on the date hereof or under any benefit program generally applicable
to the Seller's employees; provided that the Seller shall retain the
right to hire additional branch employees at comparable rates of
compensation as necessary for the operation of the Branches;
(vi) The Seller will maintain the Branch Real Estate,
Improvements, Leasehold Improvements and Furniture, Fixtures and
Equipment substantially in accordance with its normal practices, and
keep such property in its present condition, ordinary wear and tear
excepted;
(vii) The Seller shall operate the Branches and the businesses
thereof in accordance with its normal practices and will use
reasonable efforts to preserve for the benefit of the Buyer after the
Closing its business, goodwill and relationships with customers and
suppliers; and
(viii) The Seller shall provide the Buyer reasonable access
during normal business hours to and the opportunity to review and
inspect the Branch Real Estate, Improvements, Leased Real Estate,
Leasehold Improvements, Furniture, Fixtures and Equipment of the
Branches, and the books, records, files, documentation and accounts of
the Branches; shall furnish to the Buyer such reports and compilations
pertaining thereto as the Buyer shall reasonably request from time to
time; and shall furnish to the Buyer all such other information
pertaining to the Assets and the Liabilities and the business of the
Branches as the Buyer may reasonably request. In addition, the Seller
shall provide the Buyer reasonable access to the Branches during the
thirty (30) calendar day period immediately preceding the Closing Date
for the purpose of installing teller terminals and other equipment,
PROVIDED THAT (A) Seller shall not be required to provide such access
to any Branch until after all consents, approvals and authorizations
referred to in Sections 7.1(c) and 7.2(c) hereof have been obtained
with respect to all Branches and (B) Buyer shall give
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Seller at least twenty-four (24) hours advance notice that it wishes to
have such access. The Buyer agrees to cause the installation of such
teller terminals and other equipment to be effected in a manner intended
to minimize disruption to the operations of the Branches.
(b) BUYER'S ACCESS TO BRANCH PREMISES. The Buyer will indemnify, defend,
and hold Seller harmless for, from and against any and all claims, damages,
costs, liabilities and losses (including mechanics' liens) arising out of any
entry by Buyer or its agents, designees or representatives on the Branch Real
Estate or Leased Real Estate for purposes of the review, inspection and
installation provided for in Section 2.3(a)(viii) or for any other purpose
(other than for the purposes set forth in Section 4.4(d), which shall be
governed by the provisions of that Section). Without limiting the scope of the
foregoing, Buyer also will restore the Branch Real Estate, Improvements, Leased
Real Estate, Leasehold Improvements, Furniture, Fixtures and Equipment, books,
records, files, and documentation of the Branches at its sole cost and expense
if one or more of the transactions contemplated by this Agreement do not close.
Until restoration is complete, Buyer will take all steps necessary to ensure
that any conditions at the Branches created by any testing, review, inspection,
installation or other actions performed by or for Buyer will not unreasonably
interfere with the normal operation of the Branches or create any dangerous,
unhealthy, unsightly or noisy conditions at the Branches. Buyer shall comply
with any requirements or restrictions contained in the Leases regarding any
actions it takes at the Leased Real Estate, including, without limitation, any
requirements of notice to the landlord. The provisions of this Section 2.3(b)
shall survive the Closing or any earlier termination of this Agreement.
(c) DATA PROCESSING CONVERSION. The conversion of the data processing
with respect to the Branches and the Assets and the Liabilities to be
transferred hereunder will commence on the Closing Date and continue during the
night on the Closing Date and the following morning. The Seller shall use its
reasonable efforts to make available the required hard copy (printed) reports
(and Magnetic Tapes, if applicable) in connection therewith for pick up at 0000
Xxxxxx Xxxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx, from the Seller by 6:00 a.m. on such
morning, subject to any production problems that are beyond the Seller's
reasonable control. The arrangements for pickup, delivery and payment for
courier services shall be as provided in Section 2.2(b)(i)(E). In connection
with the conversion of the data processing, the Seller and the Buyer shall each
cooperate with the other and shall each pay their own costs and expenses
associated with the conversion of the data processing and shall bear equally the
duties and responsibilities relating to the conversion. Seller will not migrate
(transfer) existing PINs used for ATM cards to the Buyer.
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2.4 EMPLOYEE CONSIDERATIONS.
(a) Buyer shall offer employment as of the Closing Date to all Employees.
Following the Closing Date, such Employees will be "at will" employees of Buyer
under the same conditions as Buyer's other employees. All Employees shall be
offered employment at base wages and salaries no less favorable than the wages
and salaries currently being paid by Seller to such Employees. To the extent
consistent with Buyer's existing structure for comparable positions and
comparable officer titles and its current policies regarding officer titles,
Employees shall be offered positions with responsibilities and officer titles
comparable to those they currently have with Seller and, unless agreed upon by
any such Employee, within a reasonable geographic proximity to such Employee's
work location before the Closing Date.
(b) All Employees who accept employment with Buyer as of the Closing Date
shall be eligible to participate in the employee benefit plans and other fringe
benefits of Buyer on the same basis as such plans and benefits are offered to
employees of Buyer with comparable positions with Buyer, except as provided in
the penultimate sentence of Section 2.4(e). Buyer shall credit such Employees
for their length of service with Seller or its Affiliates for all purposes under
each employee benefit plan and fringe benefit to be provided by Buyer to such
Employees, to the same extent such service was recognized under a similar plan
of Seller, based on information provided by Seller. However, such service need
not be counted for purposes of calculating accrued benefits under a pension
benefit plan, except that in determining the rate of prospective benefit
accrual, service shall be counted where such rate increases with service. For
purposes of this Section 2.4, "employee benefit plans and other fringe benefits"
includes, without limitation, pension and profit sharing plans, retirement and
post retirement welfare benefits, health insurance benefits (medical, dental and
vision), disability, life and accident insurance, sickness benefits, vacation,
employee loans and banking privileges.
(c) If Buyer offers a salary continuation or similar program for employees
unable to work for medical reasons, the Employees who accept employment with
Buyer shall be credited under any program of Buyer with at least the number of
sickness benefit days accrued under Seller's program at the Closing Date.
(d) Seller agrees to remain responsible for the payment of all benefits
accrued during the period of employment by the Seller under the terms of the
Seller's retirement plans with respect to any Employee. Buyer shall not at any
time assume any liability for the benefits of any active or any terminated,
vested or retired participants in the Seller's retirement plans.
(e) Seller shall be responsible for payments for accrued vacation not
taken by an Employee prior to the Closing Date and
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for timely payment as required by law of all wages, salaries, bonuses, if
any, and other compensation with respect to service completed on or prior to
the Closing Date. Seller shall offer Employees who accept employment with
Buyer the option to receive cash or to transfer to Buyer their accrued
vacation days or fractions thereof earned but unused while employed by
Seller. In the event any Employee elects to receive cash upon employment by
Buyer, Seller shall make a cash payment to such Employee in accordance with
applicable law. In the event any such Employee elects to have his or her
accrued vacation transferred upon employment by Buyer, Buyer shall give such
Employee credit after the Closing Date for the same number of vacation days
or fractions thereof he or she has accrued with Seller as of the Closing
Date. For purposes of this Section, personal choice days or fractions
thereof will be treated as vacation days. In the event Employees elect to
have their accrued vacation carried over to Buyer, Seller shall pay to Buyer,
not later than the date of the Final Financial Statement, an amount equal to
the net cash value of each such Employee's accrued vacation before payroll
deductions. In the calendar year in which the Closing Date occurs, Employees
shall be eligible to earn at least the prorated annual vacation amount
Employees were eligible to earn under Seller's vacation policy. In
subsequent calendar years, Employees will be eligible to earn vacation
according to the schedule specified in Buyer's policy and subject to the
maximum accruals permitted under Buyer's policies.
(f) Seller shall retain the responsibility for payment of all medical,
dental, vision, health and disability claims incurred by any Employee prior to
the Closing Date, and Buyer shall not assume any liability with respect to such
claims. On or after the Closing Date, all medical, dental, vision, health and
disability claims incurred by Employees in Buyer's employ shall be determined
under Buyer's benefit plans. Buyer agrees that Employees and their eligible
dependents will receive credit for their periods of coverage under Seller's
health or disability plans towards satisfying any preexisting condition clause
in any of Buyer's health or disability plans, provided such Employee or eligible
dependent is enrolled in Seller's plans on the Closing Date. Buyer also agrees
that Employees and their eligible dependents shall receive credit under Buyer's
health care plans for any deductibles paid by such Employee and enrolled
dependents for the current plan year under a health care plan maintained by
Seller.
(g) Seller shall be responsible for providing any Employee whose
"qualifying event," within the meaning of Section 4980B(f) of the IRC, occurs on
or prior to the Closing Date (and such Employee's "qualified beneficiaries"
within the meaning of Section 4980B(f) of the IRC) with the continuation of
group health coverage required by Section 4980B(f) of the IRC ("Continuation
Coverage") under the terms of the health plan maintained by Seller. Buyer shall
be responsible for Continuation Coverage to any Employee in Buyer's employ (and
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each Employee's qualified beneficiaries) whose qualifying event occurs after
the Closing Date to the extent required by law.
(h) Seller agrees that it shall retain, consistent with its normal
employment practices, all liability and obligation, if any (including, without
limitation, the liability and obligation for all wages, salary, vacation pay and
unemployment, medical, dental, vision, health and disability benefits) for those
former employees of the Branches who retired or terminated employment prior to
the Closing Date or who otherwise do not become employees of Buyer.
(i) Effective as of the Closing Date, Buyer shall assume liability for
severance pay and similar obligations payable to any Employee who accepts
employment with Buyer and who is terminated by Buyer on or after the Closing
Date. Such payment shall be made pursuant to Buyer's normal severance policy
and Buyer shall compute severance pay by giving Employees full credit for all
years of service that would have been recognized under Seller's severance
policy. In addition, for an Employee whose job with Buyer is eliminated within
twelve (12) months of the Closing Date, Buyer agrees to pay to such Employee the
difference, if any, between the amount of severance pay received by the Employee
under Buyer's severance policy and the amount such Employee would have received
upon his or her separation from the Seller under Seller's severance policy in
effect on the Closing Date.
(j) For Employees who accept employment with Buyer and who as of the
Closing Date are absent from work due to sickness or short-term disability,
Seller shall have no further liability or obligation for short-term disability
benefits, sick pay or salary continuation to the extent attributable to periods
after the Closing Date (or any medical, dental, vision and health claims
incurred after the Closing Date). Such Employees shall be eligible for such
benefits as are provided by Buyer under its policies and this Agreement.
(k) The Buyer shall make the offers of employment as soon as possible
after all the consents, approvals and authorizations referred to in Sections
7.1(c) and 7.2(c) hereof have been obtained (and in no event more than ten (10)
Business Days after the last of such consents, approvals and authorizations has
been obtained). Such offers shall be made in person to each Employee at a
meeting at which representatives of Buyer and Seller are present. The
information provided to each Employee at such meeting shall include a discussion
of Buyer's employee benefit plans and policies, together with a written summary
thereof. Buyer shall be responsible for advising Employees of the details of
any offers and terms of employment, and answering any questions relating
thereto, but Seller shall be allowed to review and approve, prior to its
distribution, (i) any communication with Employees prior to the Closing Date,
and (ii) any communication with such Employees after the Closing Date
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which describes or refers to Seller's employee benefit plans and policies.
Buyer shall not at any time have access to Employee personnel files of Seller.
(l) Prior to the Closing Date, the Buyer may train the Seller's
Employees who have accepted Buyer's offers of employment, at a time mutually
agreed upon by Buyer and Seller, and the Buyer will reimburse the Seller for
such Employees' salaries for the time they are engaged in such training and
for all of their expenses incurred in connection with such training for which
they are reimbursed by Seller.
ARTICLE 3
PRICE AND ADJUSTMENTS
3.1 PRICE. The Seller agrees that in the event the Initial Base Amount
(as hereinafter defined) is less than the sum of (i) the amount of the
Assumed Deposits and (ii) the amount of the Accrued Expenses, the Seller
shall transfer to the Buyer cash in the amount equal to the deficit. The
Buyer agrees that in the event the Initial Base Amount is greater than the
sum of (i) the amount of the Assumed Deposits and (ii) the amount of the
Accrued Expenses, the Buyer shall transfer to the Seller cash in an amount
equal to such excess. Calculations and payments pursuant to this Section 3.1
shall be as of the date and time of the Closing Financial Statement. The
"Initial Base Amount" shall be equal to the sum of (i) the amount of Cash on
Hand, (ii) the Market Value of the Branch Real Estate and the Improvements,
(iii) the amount of $0 for the Leasehold Improvements (which amount is
allocated among the Branches, if any, as listed on Schedule 3.1), (iv) the
amount of $141,953.52 for the Furniture, Fixtures and Equipment (which amount
is allocated as listed on Schedule 1.1(b)), (v) the amount of Prepaid
Expenses at the Branches, (vi) the amount of the Overdrafts, (vii) the amount
of any fees, charges or accrued interest receivable on such Overdrafts,
(viii) the amount of the Purchase Premium, and (ix) the Seller's pro rata
portion of XXX Deposit and Xxxxx Account trustee fees accrued on such
accounts held in the Branches through the Closing Date, less the amount of
the safe deposit key deposits referred to in Section 3.2(e).
3.2 ADJUSTMENTS. Subject to the provisions of Section 4.4 and Article 9,
the assignments, transfers, acceptances and assumptions of the Assets and the
Liabilities and the payment of the amounts due in respect thereof in accordance
with Sections 2.2 and 3.1 shall be final and without recourse and not subject to
any claim for reimbursement, repayment, rescission or avoidance; PROVIDED,
HOWEVER, that:
(a) The following adjustments shall be made:
(i) As soon as practicable after the Closing Date, but in no event
later than ten (10) calendar days
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thereafter, the Seller shall deliver the Pre-Final Financial Statement to
the Buyer. After delivery of the Pre-Final Financial Statement, the
Seller shall pay the Buyer or the Buyer shall pay the Seller, as
appropriate, by wire transfer no later than the next Business Day after
delivery of the Pre-Final Financial Statement, the difference between the
amount paid at the Closing and the amount calculated on the Pre-Final
Financial Statement, plus interest accrued from the Closing Date at the
Federal Funds Rate in effect on the Closing Date.
(ii) As soon as practicable after the Closing Date, but in no event
later than sixty (60) calendar days thereafter, the Seller shall deliver
the Final Financial Statement to the Buyer. Subject to the Seller's and
Buyer's rights of indemnification pursuant to Section 4.4 and Article 9,
the Final Financial Statement shall become final and binding on the Buyer
and the Seller ten (10) calendar days after its delivery to the Buyer,
unless the Buyer gives written notice to the Seller of its disagreement
with respect to any item included in such Final Financial Statement. The
Seller and the Buyer shall use their respective reasonable efforts to
resolve the disagreement during the ten (10) calendar day period following
receipt by the Seller of the notice. If the disagreement is not resolved
during such ten (10) calendar day period, the parties shall follow the
procedures set forth in Section 9.4 to resolve such dispute and such Final
Financial Statement shall be modified by any such resolution, whereupon the
Final Financial Statement shall become final and binding. When the Final
Financial Statement becomes final and binding, and after giving effect to
any payment made based on the Pre-Final Financial Statement, the Seller
shall pay the Buyer or the Buyer shall pay the Seller, as appropriate, the
difference between the amount paid at the Closing and the amount calculated
on the Final Financial Statement, plus interest accrued from the Closing
Date at the Federal Funds Rate in effect on the Closing Date.
(b) If any non-material Asset (materiality to be determined by Seller in
good faith) shall not have been assigned to the Buyer at the Closing, then the
Seller shall use its reasonable efforts to assign such Asset to the Buyer as
soon as possible after the Closing Date but in any event no later than on the
Settlement Date. In the event the Seller for any reason is unable to assign any
such Asset to the Buyer prior to or on the Settlement Date, then the Seller
shall no longer have any obligation to assign such Asset to the Buyer and the
Seller shall refund to the Buyer the value of such Asset as reflected on the
Closing Financial Statement together with interest from the Closing Date through
the date of such refund at a rate equal to the Federal Funds Rate in effect on
the Closing Date;
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(c) All operating expenses and fees accrued or prepaid prior to the
Closing Date, including, without limitation, wages, salaries, rents, Bank
Insurance Fund ("BIF") premiums, utility payments, personal property taxes,
non-delinquent real property taxes and assessments relating to the Assets and
the Liabilities transferred at the Closing, but excluding fees for use of safe
deposit boxes, shall be prorated between the parties. With respect to the BIF
premiums, the proration shall be on the basis of the amount of the Assumed
Deposits. To the extent that the Seller has paid expenses that are expenses
allocable to the Buyer pursuant to this Section 3.2(c), such expenses shall
appear as an asset on the Financial Statements. To the extent that expenses
have been accrued and not paid by the Seller prior to the Closing Date, they
shall appear as a liability on the Financial Statements;
(d) As soon as practicable after the Closing Date, the Seller will provide
to the Buyer a report of customer data for the Branches showing the names,
addresses, tax identification numbers (where available from the Seller's
records) and deposit balances of each and all of the customers of the Branches
as of such date; the customer data shall include the signature cards for all
Assumed Deposits and a list of Accounts and certificates of deposit subject as
of the Closing Date to annual Taxpayer Identification Number solicitation by
Seller in the normal course of its business;
(e) At the Closing Date, the Seller shall pay to the Buyer the amount of
cash deposits held by the Seller at the Closing Date received for keys issued in
connection with safe deposit box rentals at the Branches that are transferred to
the Buyer hereunder;
(f) With respect to Deposits which are Individual Retirement Accounts
("XXX Deposits") created by a trust for the exclusive benefit of an
individual or his or her beneficiaries in accordance with the provisions of
Section 408 of the IRC, the Seller will use reasonable efforts and will
cooperate with the Buyer, both before and after the Closing, in taking
whatever actions are reasonably necessary to accomplish either the
appointment of the Buyer as successor custodian or the delegation to the
Buyer (or an affiliate of the Buyer) of the Seller's authority and
responsibility as custodian of all such XXX Deposits except self-directed XXX
Deposits (and, for those customers with self-directed XXX Deposits, any other
XXX Deposits), including but not limited to, sending to the depositors
thereof appropriate notices, cooperating with the Buyer (or such affiliate)
in soliciting consents from such depositors, and filing any appropriate
applications with applicable regulatory authorities. If any such delegation
is made to the Buyer (or such affiliate), the Buyer (or such affiliate) will
perform all of the duties so delegated and comply with the terms of the
Seller's agreement with the depositor of the XXX Deposits affected thereby;
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(g) With respect to Deposits which are BankAmerica Basic Retirement Plan
Accounts ("Xxxxx Accounts") created by a trust for the benefit of employees
(some or all of whom are owner-employees) and that comply with the provisions of
Section 401 of the IRC, the Seller will use reasonable efforts and cooperate
with the Buyer to invite depositors thereof to direct a transfer of each such
depositor's Xxxxx Account and the related Deposit to the Buyer (or an affiliate
of the Buyer), as trustee thereof, and to adopt the Buyer's (or such
affiliate's) form of Xxxxx Master Plan as a successor to that of the Seller.
The Buyer (or such affiliate) will assume no Deposits which are Xxxxx Accounts
unless the Buyer (or such affiliate) has received the documents necessary for
such assumption or transfer at or before the Closing. With respect to any
depositors who do not transfer such accounts to the Buyer's (or such
affiliate's) form of Xxxxx Master Plan, the Seller will use reasonable efforts
in order to enable the Buyer (or such affiliate) to retain such Xxxxx Accounts
at the Branches at which such accounts were maintained;
(h) Any items that were credited for deposit to or cashed against an
Assumed Deposit prior to the Closing and are returned unpaid on or within sixty
(60) calendar days after the Closing Date ("Returned Items") will be handled as
set forth herein. If the Seller's bank account is charged for the Returned
Item, the Seller shall forward such Returned Item to the Buyer. If upon the
Buyer's receipt of such Returned Item there are sufficient funds in the Assumed
Deposit to which such Returned Item was credited or any other Assumed Deposit
transferred at the Closing standing in the name of the party liable for such
Returned Item, the Buyer will debit any or all of such Assumed Deposits an
amount equal in the aggregate to the Returned Item, and shall repay that amount
to the Seller. If there are not sufficient funds in the Assumed Deposit because
of the Buyer's failure to honor holds placed on such Assumed Deposit, the Buyer
shall repay the amount of the Returned Item to the Seller. If there are not
sufficient funds in the Assumed Deposit for any other reason, the Buyer shall
repay the balance of the Assumed Deposit to the Seller and create an overdraft
for the unrecovered portion of the Returned Item. Any items that were credited
for deposit to or cashed against an Assumed Deposit at a Branch prior to the
Closing Date and are returned unpaid more than sixty (60) calendar days after
the Closing Date will be the responsibility of the Buyer, except that for a
period of eighteen (18) months after the Closing Date checks drawn on the United
States Treasury, checks issued by state governments and municipalities and
checks returned for endorsement irregularities will be the responsibility of the
Seller; and
(i) As soon as practicable, but in any event no later than fifteen (15)
calendar days after the Closing Date, the Buyer shall mail to each depositor in
respect of a Transaction Account (included in the Assumed Deposits) a letter
approved in writing by the Seller (which approval will be delivered as soon as
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practicable and will not be unreasonably withheld) requesting that such
depositor promptly cease writing the Seller's drafts against such Transaction
Account. At such time as the Buyer mails each such notice to each depositor,
the Buyer shall also forward to each such depositor new drafts which such
depositor may draw upon the Buyer for the purpose of effecting transactions
with respect to such Transaction Accounts.
The parties hereto shall use reasonable efforts to develop procedures
which cause the Seller's form of drafts against Transaction Accounts which
are received after the Closing Date to be cleared through the Buyer's then
current clearing procedures.
During the one hundred eighty (180) calendar day period from the Closing
Date, if it is not possible to clear Transaction Account drafts through the
Buyer's then current clearing procedures after the Closing Date, the Seller
shall forward to the Buyer no later than the next Business Day after receipt
thereof all such Transaction Account drafts drawn against Transaction
Accounts domiciled at one of the Branches and transferred on the Closing
Date. The Seller shall have no obligation to pay such Transaction Account
drafts. Upon the expiration of such one hundred eighty (180) calendar day
period, the Seller shall cease forwarding drafts against Transaction Accounts
transferred on the Closing Date and shall instead return them to the
originators marked "Account Closed." The Buyer will compensate the Seller
for processing of drafts as described in this Section according to the
compensation arrangement set forth in Section 4.6.
(j) The Seller will pay the Buyer for such portion of any overdraft on
an Assumed Deposit (including interest at the Federal Funds Rate in effect on
the Closing Date) created by Returned Items received by the Seller and passed
on to the Buyer during the sixty (60) calendar days that follow the Closing
Date, which is not recovered by the Buyer within sixty (60) calendar days
after the Closing Date.
ARTICLE 4
ADDITIONAL COVENANTS
4.1 SELLER'S COVENANTS. The Seller (and, to the extent specifically
indicated below, the Buyer) agrees:
(a) To use reasonable efforts to sign and deliver to the Buyer such
additional agreements and other documents, and to do such other acts and things,
as may be required to complete the transactions contemplated by this Agreement;
(b) To reasonably cooperate with the Buyer in obtaining all governmental
and regulatory consents, approvals, licenses, waivers and the like required to
be fulfilled or obtained for
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the completion of the transactions contemplated by this Agreement;
(c) To deliver to the Buyer those books, records, accounts and other
documents relating solely to the Assets and the Liabilities as soon as
practicable after the Closing and to store the other books, records and accounts
of the Branches relating to the Seller's former operation of the Branches in
accordance with Seller's normal records retention policy;
(d) Until Closing or the earlier termination of this Agreement, to cause
the business of the Branches to be conducted in accordance with Section 2.3
above;
(e) To remove all signage from the Branches at the expense of the Seller
on or before the Closing Date, it being understood that the Buyer shall be
responsible for installation of its signage at its expense;
(f) As soon as practicable after the receipt of all regulatory approvals
required by Sections 7.1(c) and 7.2(c) with respect to all Branches, and no
later than thirty (30) calendar days prior to the Closing Date (unless
earlier required by law, regulation or regulatory policy), each of the Seller
and the Buyer shall provide, or join in providing where appropriate, all
notices, separately as to each Branch, to holders of Deposits and other
persons that the Seller or the Buyer, as the case may be, is required to give
by any regulatory authority having jurisdiction or under applicable law or
the terms of any other agreement between the Seller and any customer in
connection with the transactions contemplated hereby. A party proposing to
send or publish any notice or communication pursuant to any provision of this
Section 4.1(f) or Section 4.2(f) shall furnish to the other party a copy of
the proposed form of such notice or communication as soon as practicable in
advance of the proposed date of the first mailing, posting, or other
dissemination thereof to customers, and shall not unreasonably refuse to
amend such notice to incorporate any changes that the other such party
proposes as necessary to comply with applicable statutes, rules, regulations
or requirements of any regulatory authority having jurisdiction. All costs
and expenses of any notice or communication sent or published by the Buyer or
the Seller shall be the responsibility of the party sending such notice or
communication. All out-of-pocket costs and expenses of any joint notice or
communication which Buyer or Seller pays to a third-party vendor shall be
shared equally by the Seller and the Buyer. Each party shall bear the costs
and expenses of its own employees or agents engaged in any joint notice or
communication;
(g) The Seller will use reasonable efforts to transfer to the Buyer on the
Closing Date all of those automated clearing house and fed wire direct deposit
arrangements which are tied by agreement or other standing arrangement to
Assumed Deposits.
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For a period of one hundred eighty (180) calendar days after the Closing
Date, in the case of automated clearing house direct deposits to Assumed
Deposits, and thirty (30) calendar days after the Closing Date, in the case
of fed wire direct deposits to Assumed Deposits (each, a "Direct Deposit
Cut-off Date"), the Seller will, no later than the next Business Day
following the date of receipt thereof, remit and transfer to the Buyer all
direct deposits intended for Accounts which are Assumed Deposits. After the
applicable Direct Deposit Cut-off Date, the Seller may discontinue accepting
and forwarding automated clearing house and fed wire entries and funds and
return such direct deposits to the originators. The Seller shall not be
liable for any account overdrafts that may thereby be created or for any
other matter. The Buyer and the Seller shall agree on a reasonable period of
time prior to the Closing during which the Seller will no longer be obligated
to accept new direct deposit arrangements. At the time of each Direct
Deposit Cut-off Date, the Buyer will provide automated clearing house
originators with account numbers and conversion tapes relating to Assumed
Deposits; and
(h) As soon as practicable after the receipt of all regulatory approvals
required by Sections 7.1(c) and 7.2(c) with respect to all Branches (except for
statutory waiting periods), and after the notice provided in Section 4.1(f)
above, the Buyer will send appropriate notice, separately as to each Branch, to
all holders of Deposits which are to be assumed by the Buyer at the Closing the
terms of which provide for direct debit of such accounts by third parties,
instructing such customers concerning transfer of customer direct debit
authorizations from the Seller to the Buyer. The Seller shall cooperate in
soliciting the transfer of such authorizations. Such notice shall be in a form
agreed to by the parties. For a period of one hundred eighty (180) calendar days
following the Closing Date, the Seller will, on the Business Day following the
date of receipt thereof, forward to the Buyer all direct debits on Accounts
which are Assumed Deposits transferred on the Closing Date and will give the
Buyer a daily accounting of such debits to its clearing account. Thereafter,
the Seller may discontinue forwarding such entries and return them to the
originators. The Buyer and the Seller shall agree on a reasonable period of
time prior to the Closing during which the Seller will no longer be obligated to
accept new direct debit arrangements. At the time of the Closing Date, the
Buyer will provide automated clearing house originators of such direct debits
with account numbers and conversion tapes.
(i) In addition to the requirements and procedures set forth in Sections
4.1(g) and 4.1(h), the Buyer shall, commencing on the first Business Day
following the Closing Date, deliver to the originators of the direct deposits of
Assumed Deposits and the originators of direct debits of Assumed Deposits
specified in such sections, notices of change instructing such originators to
change the routing transit number for such deposits and
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debits from the Seller's routing transit number to the Buyer's routing
transit number.
(j) The Seller agrees that for a period of twelve (12) months following
the Closing Date, it will not establish a "Full-Service Branch" (as defined
in the immediately following sentence) within ten (10) miles of a Branch
which is included in the Closing (the "Protected Area"). "Full-Service
Branch" shall mean a branch which includes tellers and which transacts all
business related to deposits and loans. Seller shall not be deemed to have
established a Full-Service Branch for purposes of this Section 4.1(j) solely
because Seller or any successor in interest does one or more of the
following: (i) it exercises any rights or performs any obligations it has or
may have to establish banking facilities pursuant to any existing or future
agreements with a third party or parties for the installation, location and
operation of banking facilities in or in connection with retail stores or
supermarkets owned or operated, or both, by such third party or parties, (ii)
it acquires one or more banking facilities within the Protected Area as a
result of a merger, consolidation, purchase or sale of all or substantially
all of the assets of a party, or other reorganization to which Seller or
BankAmerica Corporation ("Parent") is a party, (iii) it maintains one or more
ATM facilities or conducts courier operations within the Protected Area, (iv)
it takes any action to satisfy any obligations or commitments Seller or
Parent may have arising out of the approval by the Federal Reserve Board of
the merger of Security Pacific Corporation ("Security Pacific") into Parent
on April 22, 1992, including without limitation any commitment to maintain or
enhance all existing levels of services provided at the time of the merger by
Seller or Security Pacific branches in all service areas (for example, where
branches are sold, service levels will be maintained through placing branches
in grocery stores, mobile vans, increasing access to automated teller
machines and increasing multilingual services), or (v) it continues to
maintain within the Protected Area after the Closing Date one or more
branches which it maintained therein on the Closing Date.
(k) For a period of twelve (12) months following the Closing Date (or
such shorter period as Employees may continue to be employed by the Buyer
following the Closing Date), neither the Seller nor any Affiliate shall solicit
the employment (including the solicitation of any transfer of employment) of any
Employees; PROVIDED, HOWEVER, that nothing herein shall prevent the Seller or
its Affiliates from advertising generally any employment opportunities, or from
hiring any Employees who seek employment without inducement from the Seller.
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4.2 BUYER'S COVENANTS. The Buyer agrees:
(a) To use reasonable efforts to sign and deliver to the Seller such
additional agreements and other documents, and to do such other acts and things,
as may be required to complete the transactions contemplated by this Agreement;
(b) To use its best efforts to fulfill all governmental, regulatory and
other requirements (including, without limitation, obtaining the approval of all
California and federal bank or other financial institution regulatory agencies
and any other governmental entity having jurisdiction over the Buyer's
acquisition of the Branches or the Buyer) required to be fulfilled by the Buyer
for the completion of the transactions contemplated by this Agreement, and to
take the initial drafting responsibility therefor. The Seller shall have the
right to review and comment upon all applications to, and filings with,
governmental and regulatory agencies and entities made for the above purpose,
prior to their filing; PROVIDED THAT, the Seller shall have no responsibility
for any such application or filing. Without limiting the generality of the
foregoing, Buyer agrees to file all required regulatory applications within
thirty (30) calendar days after the date of this Agreement;
(c) To pay, honor, discharge and perform all liabilities and obligations
in respect of the Assets and the Liabilities and any other liabilities of the
Branches arising, accruing or subsisting after the Closing which the Buyer is
obligated to assume pursuant to this Agreement, subject to applicable
indemnification rights of the Buyer;
(d) Not to use, keep or claim any registered or unregistered trademark,
service xxxx or other identification commonly associated with the Seller, or any
sign, display or similar material of the Seller or any banking or other forms,
stationery, passbooks, checks, traveler's checks, cashier's checks, manager's
checks or similar banking material of the Seller or bearing the Seller's name or
other similar marks or identification (except to the extent necessary to conduct
business operations, and then only if the Seller's name, marks or identification
are obliterated from such material, and such material is clearly identified as
that of the Buyer), or any proprietary material of the Seller including, without
limitation, operating manuals, training manuals and public relations,
explanatory or advertising materials; and
(e) As of the Closing Date, to become the "holder," as that term is
defined in the California Unclaimed Property Law (Code of Civil Procedure
Section 1500, et seq.), of all Assumed Deposits and safe deposit boxes which
the Buyer assumes under this Agreement. The Buyer will be responsible for the
escheat of any property for which it becomes the holder and which becomes
abandoned during the calendar year in which the Closing occurs.
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(f) As soon as practicable after the receipt of all regulatory approvals
required by Sections 7.1(c) and 7.2(c) with respect to all Branches, and no
later than thirty (30) calendar days prior to the Closing Date (unless earlier
required by law, regulation or regulatory policy), the Buyer shall, subject to
Section 11.1 hereof, (i) send a notice to all holders of safe deposit boxes at
each Branch and (ii) notify the holders of Deposits to be transferred on the
Closing Date that, subject to Closing, the Buyer will be assuming liability for
such Deposits, and following or concurrently with such notices the Buyer may
communicate with and deliver information, brochures, bulletins and other
communications to holders of Deposits and safe deposit boxes concerning the
transactions contemplated by this Agreement and concerning the business and
operations of the Buyer.
(g) Continue to operate each of the Branches at its current location for a
period of at least ninety (90) calendar days after the Closing Date (unless
Buyer has provided Seller written confirmation from Buyer's appropriate banking
regulatory agency that any earlier change in location by Buyer would be exempt
from the notice and other requirements of 12 U.S.C. Sec. 1831r-1).
(h) To obtain approval of this Agreement and the transactions contemplated
hereby by the requisite vote or consent of the holders of outstanding securities
of the Buyer if such approval is required by applicable law, contract, the
Buyer's Articles of Incorporation or Bylaws, or otherwise.
4.3 CONSENTS. The Seller shall use its reasonable efforts to obtain any
nongovernmental consents required for the transfer or assignment of the Assets
and Liabilities to Buyer pursuant to this Agreement, including (a) Leases, if
any, and (b) Assumed Contracts, if any; PROVIDED, HOWEVER, that (a) the Seller
shall not be required to pay any additional compensation or fee to any person or
entity to obtain any such consent, (b) the Buyer agrees that it shall provide
reasonable assistance to the Seller to obtain such consents, and (c) Seller
shall be entitled to rely on the provisions of Section 2.2(e) and the final
paragraph of Section 7.2 hereof if it does not obtain one or more such consents.
4.4 ENVIRONMENTAL MATTERS.
(a) SCOPE. The provisions of this Section 4.4 shall exclusively govern
the rights and obligations of the Seller and Buyer with regard to Hazardous
Substances.
(b) DEFINITIONS. For purposes of this Section 4.4, the following terms
have the following meanings:
(i) "Environmental Assessments" means environmental audits,
investigations, reviews or testing of the Branch Real Estate, Improvements,
Leased Real Estate or Leasehold
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Improvements (sometimes referred to collectively in this Section 4.4 as the
"Subject Assets") performed by Buyer or any third party or consultant engaged
by Buyer to conduct such study.
(ii) "Environmental Due Diligence Period" means the forty-five (45)
Business Day period starting on the date of this Agreement during which Buyer
must complete its due diligence as described in Section 4.4(d).
(iii)"Environmental Law" means any law, statute, ordinance or
regulation pertaining to health, industrial hygiene or the environment in effect
as of the date of this Agreement, including but not limited to Title 42 of the
United States Code, Section 6901 ET SEQ. (commonly known as "RCRA") or Section
9601 ET SEQ. (commonly known as "CERCLA" or "Superfund").
(iv) "Hazardous Substance" means any substance, material or waste that
is or becomes designated or regulated as "toxic," "hazardous," "pollutant," or
"contaminant" or a similar designation or regulation under any federal, state or
local law (whether under common law, statute, regulation or otherwise) or
judicial or administrative interpretation of such, including without limitation,
petroleum or natural gas.
(c) SELLER'S ENVIRONMENTAL REPRESENTATIONS AND WARRANTIES. Seller has
delivered to the Buyer copies of a Phase I Environmental Site Assessment ("Phase
I") and an Asbestos Survey ("Asbestos Survey") regarding each Branch; PROVIDED
THAT Seller has not delivered an Asbestos Survey regarding any Branch where
construction of all Improvements and Leasehold Improvements was completed after
December 31, 1980. The dates of such Phase I's and Asbestos Surveys and the
names of the persons by whom they were prepared are listed on Schedule 4.4(c).
The cost of such Phase I's and Asbestos Surveys shall be borne by the Seller.
As of the date of this Agreement, to the Seller's Knowledge and except as
disclosed in the Phase I's and Asbestos Surveys:
(i) during the time the Seller has owned the Branch Real Estate or
leased the Leased Real Estate, no Hazardous Substances are now or have
been used or stored on or within any portion of the
Subject Assets except those Hazardous Substances which are or have
been used or stored in the normal course of use and operation of the
Subject Assets in compliance with all applicable Environmental Laws;
(ii) during the time the Seller has owned the Branch Real Estate or
leased the Leased Real Estate, there are and have been no federal,
state, or local enforcement, clean-up, removal, remedial or other
governmental or regulatory actions instituted or completed pursuant to
Environmental Laws or pertaining to Hazardous Substances and affecting
the Subject Assets;
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(iii) no claims have been made by any third party against Seller
relating to any Hazardous Substances on or within the Subject Assets;
and
(iv) Seller has obtained and is in compliance with all permits,
licenses and other authorizations required with respect to the
operation of its prior business at the Branch Real Estate and Leased
Real Estate under all applicable Environmental Laws.
(d) ENVIRONMENTAL DUE DILIGENCE.
(i) BUYER'S COVENANTS. The Buyer acknowledges and agrees that:
(A) Seller is furnishing copies of the Phase I's and Asbestos
Surveys to Buyer for informational purposes only and without
representation or warranty as to the accuracy or completeness of
the contents of such materials except as otherwise provided in
this Section 4.4;
(B) Buyer will not rely on the Phase I's or Asbestos Surveys and
will conduct its own due diligence on the matters contained in
the documents; and
(C) Buyer is not purchasing the Branch Real Estate, Improvements
and Leasehold Improvements and accepting assignment of the Leases
in reliance upon any representations or warranties of any kind
whatsoever made by the Seller (or any representatives, agents or
employees of the Seller) except those made or contained in this
Agreement.
(ii) BUYER'S ENVIRONMENTAL DUE DILIGENCE. During the Environmental Due
Diligence Period, Buyer shall have the right to conduct Environmental
Assessments of the Subject Assets, and Buyer and Buyer's
representatives, agents and designees will have the right, at
reasonable times and upon reasonable notice to Seller (which notice
must describe the scope of the planned testing and investigations) to
enter upon the Branch Real Estate and Leased Real Estate provided:
(A) Any Environmental Assessment performed by or on behalf of
Buyer shall be conducted pursuant to standard quality
control/quality assurance procedures.
(B) The persons or entities performing such tests shall be
properly licensed and qualified and will have obtained all
appropriate permits
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for performing such tests.
(C) Prior to any entry involving physical testing, drilling or
other physical disturbance, Buyer will obtain, maintain and
provide Seller, or shall cause any consultant, contractor or
other person entering Branch premises to obtain, maintain and
provide Seller, with proof of comprehensive general liability
insurance in the amount of at least $1,000,000 combined, single
limit coverage, naming Seller as an additional insured and with
coverages reasonably satisfactory to Seller.
(D) Buyer shall give Seller at least five (5) Business Days'
prior notice of any physical testing or drilling.
(E) Buyer shall schedule any tests outside normal business hours
whenever feasible unless otherwise approved by Seller.
(F) Seller shall have the right of approval (which shall not be
unreasonably withheld or delayed) of any proposed physical
testing or drilling.
(G) Seller shall have the right to have a representative of
Seller accompany Buyer and Buyer's representatives, agents or
designees while they are on the Branch Real Estate or Leased Real
Estate.
(H) Any entry by Buyer, its representatives, agents or designee
shall not unreasonably interfere with Seller's or any tenant's
use of the Subject Assets.
(I) Buyer shall indemnify, defend, and hold Seller harmless for,
from and against any and all claims, damages, costs, liabilities
and losses (including mechanics' liens) arising out of any entry
by Buyer or its agents, designees or representatives. Without
limiting the scope of the foregoing, Buyer also at its sole
expense shall repair, replace or otherwise correct any damages
caused by Buyer or its agents, designees or representatives to
the Subject Assets if the transactions contemplated by this
Agreement do not close. Until this correction is complete, Buyer
will take all steps necessary to ensure that any conditions
created by Buyer's entry will not interfere with the normal
operation of the Branches or create any dangerous, unhealthy,
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unsightly or noisy conditions at the Branches. This indemnity
provision shall survive the Closing or any earlier termination of
this Agreement.
(J) Any groundwater, soil, or other samples taken from the
Subject Assets shall be properly disposed of by Buyer at Buyer's
sole cost and in accordance with all applicable laws.
(K) Any Environmental Assessment conducted by Buyer shall be at
the Buyer's sole expense and Buyer shall provide to Seller a copy
of all results generated by any Environmental Assessment,
including without limitation, any reports or other summaries.
(L) Seller has provided to Buyer copies of the Leases and Buyer
shall comply with any requirements or restrictions contained in
the Leases regarding testing and investigations to be performed
at the Leased Real Estate, including, without limitation, any
requirements of notice to the landlord.
(iii) NOTICE OF OBJECTIONS. During the Environmental Due
Diligence Period, Buyer may notify Seller in writing of any objections
relating to any aspects of the Subject Assets relating to one or more
Branches (the "Affected Branches") pertaining to physical condition,
presence of any Hazardous Substances, compliance with all applicable
Environmental Laws, any matters disclosed in the Phase I's or Asbestos
Surveys, any matters disclosed by Seller or about which Seller
provided representations or warranties in this Section 4.4, or any
matters disclosed in any Environmental Assessments.
(A) In the event that Buyer fails to so notify Seller of any
such objections, Buyer shall be deemed to have approved such
items.
(B) In the event, however, that Buyer notifies Seller in writing
and within the Environmental Due Diligence Period of any such
objections, the parties will have a period of ten (10) Business
Days to agree upon a resolution of the objection(s). If the
parties cannot agree within such period of ten (10) Business
Days, then within five (5) Business Days after the expiration of
such period either party may initiate a proceeding to resolve
such objections pursuant to the procedures set forth in Section
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9.4 of this Agreement; PROVIDED, HOWEVER, that within such five
(5) Business Days the Seller in its sole discretion may, in a
case where Buyer has notified Seller of objections with respect
to Branch Real Estate or Improvements, elect to remove the Branch
Real Estate and Improvements relating to the Affected Branches
from the Assets to be sold and transferred to Buyer, in which
event (I) the consideration payable under Article 3 shall
automatically be adjusted accordingly and (II) commencing on the
Closing Date Buyer shall lease the Branch Real Estate and
Improvements relating to the Affected Branches from Seller for a
period of at least six (6) months, at a rental rate and on terms
to be agreed upon by Buyer and Seller, which rate and terms shall
be commercially reasonable and comparable to those for similar
properties in the vicinities of the Affected Branches, and
PROVIDED, FURTHER, that if Buyer and Seller do not agree upon the
rental rate or one or more such terms within an additional ten
(10) Business Days after expiration of the five (5) Business Days
referred to above, then the determination of such rate and/or
term(s) shall be immediately submitted to arbitration pursuant to
the procedures set forth in Section 9.4 of this Agreement. In a
case where Buyer has notified Seller of objections with respect
to Leased Real Estate or Leasehold Improvements, then if neither
party has initiated a proceeding to resolve such objections
pursuant to the procedures set forth in Section 9.4 of this
Agreement within the five (5) Business Days referred to in the
immediately preceding sentence, then the Seller in its sole
discretion may elect to exercise its right under the final
paragraph of Section 7.2 to exclude the Affected Branch from the
Closing.
(C) If this Agreement is not amended or otherwise modified
pursuant to the provisions of the foregoing Section
4.4(d)(iii)(B), Buyer shall be deemed to have waived its
objections and this Agreement will continue in full force and
effect.
(e) MUTUAL ENVIRONMENTAL INDEMNIFICATIONS.
(i) Subject to Subsection 4.4(e)(iv) and Article 9 below, if there
are any third party claims against Buyer that arise out of any
Hazardous Substances that became located in, on or under Branch Real
Estate during Seller's ownership of the Branch Real Estate, or in, on
or under Leased Real Estate during the term of Seller's Lease, Seller
will (to the extent the
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Seller is liable for such Hazardous Substances under any federal,
state or local law pertaining to or concerning Hazardous Substances)
indemnify, defend (by counsel reasonably acceptable to Buyer),
protect and hold Buyer harmless for, from and against any and all
claims, liabilities, penalties, forfeitures, losses or expenses
(including without limitation reasonable expenses of investigation
and attorney's fees and expenses in connection with any action, suit
or proceeding brought against the Buyer) arising therefrom (to the
extent that any such third party claims are attributable to the
portion of the Hazardous Substances which occurred or were in
existence at the Branch Real Estate or Leased Real Estate on or prior
to the Closing Date) in an amount which (together with any amount for
which Seller may become liable to provide indemnification pursuant to
Section 9.2 or otherwise), shall not exceed the amount of the Initial
Base Amount, and PROVIDED THAT notwithstanding any other provision
hereof, Seller shall not be liable under this Section 4.4(e)(i) for
any losses sustained by the Buyer unless and until the aggregate
amount of all losses with respect to a Branch sustained bythe Buyer
to be indemnified by the Seller under this Agreement (including any
amount for which Seller may become liable to provide indemnification
pursuant to Section 9.2 or otherwise), shall exceed $25,000, in which
event the Seller shall be liable only for such losses in excess of
$25,000 with respect to that Branch (it being the intention of the
parties that losses sustained by the Buyer with respect to one Branch
shall not be combined with losses sustained with respect to another
Branch to satisfy such minimum $25,000 amount).
(ii) Subject to Subsection 4.4(e)(iv) and Article 9 below, if there
are any third party claims against Seller that arise out of any
Hazardous Substances that became located in, on or under the Subject
Assets at any time after the Closing, Buyer will indemnify, defend (by
counsel reasonably acceptable to Seller), protect and hold Seller
harmless for, from and against any and all claims, liabilities,
penalties, forfeitures, losses or expenses (including without
limitation reasonable expenses of investigation and attorney's fees
and expenses in connection with any action, suit or proceeding brought
against the Seller) arising therefrom, PROVIDED THAT notwithstanding
any other provision hereof, Buyer shall not be liable under this
Section 4.4(e)(ii) for any losses sustained by the Seller unless and
until the aggregate amount of all losses with respect to a Branch
sustained by the Seller to be indemnified by the Buyer under this
Agreement (including any amount for which Buyer may
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become liable to provide indemnification pursuant to Section 9.3
or otherwise), shall exceed $25,000, in which event the Buyer shall
be liable only for such losses in excess of $25,000 with respect to
that Branch (it being the intention of the parties that losses
sustained by the Seller with respect to one Branch shall not be
combined with losses sustained with respect to another Branch to
satisfy such minimum $25,000 amount).
(iii) As used in this Subsection 4.4(e), "third party claims" are
defined as any claims or rights of recovery by any person or entity
(including governmental agencies):
(A) which result from injury, damage or loss to or of any person
or property;
(B) for cost recovery, removal or remedial action; or
(C) third party claims will also include any costs paid or
payable by either party for damage, loss, injury, investigation,
removal, remediation or other liability in response to any third
party claim or in anticipation of any enforcement or remedial
action undertaken or threatened by any governmental agency or
private party.
(iv) Nothing in this Section 4.4(e) is meant to diminish any party's
rights or obligations under any federal, state or local law pertaining
to or concerning Hazardous Substances; but Seller will not be liable
to Buyer under this Agreement, and Buyer hereby releases Seller from
any and all liability under any such law, for any third party claims
which are attributable to any environmental condition which:
(A) was described or referred to in the Phase I's, Asbestos
Surveys or any Environmental Assessments obtained or conducted by
Buyer;
(B) was reasonably discoverable by prudent investigation during
the Environmental Due Diligence Period; or
(C) was otherwise disclosed by Seller to Buyer or discovered by
Buyer at any time prior to the Closing.
(v) The above release includes claims of which Buyer is presently
unaware or which Buyer does not presently suspect to exist which, if
known by Buyer, would materially affect Buyer's release(s) to Seller.
Buyer
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expressly waives and relinquishes any and all rights which it may have
under the provisions of Section 1542 of the California Civil Code, to
the extent applicable, which Section reads as follows:
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR
DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF
EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY
AFFECTED HIS SETTLEMENT WITH THE DEBTOR".
It is understood and agreed that the purchase price has been adjusted
by prior negotiations to reflect that all of the Subject Assets and
the Furniture Fixtures and Equipment are sold by Seller and purchased
by Buyer and Buyer is accepting assignment of the Leases subject to
the foregoing. It is not contemplated that the purchase price will be
increased if costs to Buyer associated with the Subject Assets, the
Furniture Fixtures and Equipment and the Leases prove to be less than
expected nor will the purchase price be reduced if the Buyer's plan
for the same leads to higher cost projections. The sole remedy of the
Buyer will be to exercise its rights under Section 4.4(d) prior to the
end of the Environmental Due Diligence Period.
Buyer's Initials /s/JB Seller's Initials /s/BAD
--------- ---------
4.5 VALUATION OF THE ASSETS. Buyer agrees that it is relying solely upon
its own judgment, after such investigation and inspection as it deems necessary
or appropriate, as to the quality, condition, fitness and value of the Assets
and the nature and amount of the Liabilities, and Seller hereby disclaims any
representations or warranties made by Seller as to their condition, value,
nature or amount except those made in Section 5.1 of this Agreement, and subject
to the provisions of Section 4.4 of this Agreement, which shall exclusively
govern the rights and obligations of the parties with regard to Hazardous
Substances.
4.6 CLEARING ITEMS. From the Closing Date and for one hundred eighty
(180) calendar days thereafter, items drawn on Transaction Accounts assumed by
the Buyer may continue to be presented to the Seller. The Seller will make
provisional settlement to the presenting institution and will present such items
to the Buyer within the Seller's midnight deadline. For the first ninety (90)
calendar days following the Closing Date, the Seller shall perform its
obligations under the first two sentences of this Section 4.6 at no cost to the
Buyer. For the remaining ninety (90) calendar day period, the Buyer shall pay
the Seller $0.50 for each item so processed. After one hundred eighty (180)
calendar days from the Closing Date, the Seller
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shall return to the sender any items presented. Upon timely presentation to
the Buyer, the Buyer will assume all responsibility for such items (except
for such items which have not been handled by the Seller in accordance with
applicable law or regulation, or with ordinary care), including but not
limited to determining whether to honor or dishonor such items and giving any
required notification for the return of large items.
4.7 XXX DEPOSITS AND XXXXX ACCOUNTS. The Seller will deliver to the
Buyer, on the Closing Date, copies of the Seller's documents for each XXX
Deposit and Xxxxx Account which is included in the Assumed Deposits. The Seller
will prepare and file all reports to government authorities required to be filed
for the period ending on the Closing Date and all prior periods. The Buyer will
be responsible for all such reporting for periods commencing on the day after
the Closing.
4.8 INTEREST REPORTING AND WITHHOLDING. Unless otherwise agreed to by the
parties, the Seller will report to applicable taxing authorities and holders of
Assumed Deposits transferred on the Closing Date, with respect to the period
from January 1 of the year in which the Closing occurs through and including the
Closing Date, all interest credited to, withheld from and any early withdrawal
penalties imposed upon the Assumed Deposits. The Buyer will report to the
applicable taxing authorities and holders of Assumed Deposits, with respect to
all periods from the day after the Closing Date, all such interest credited to,
withheld from and any early withdrawal penalties imposed upon such Assumed
Deposits. Any amounts required by any governmental agencies to be withheld from
any of the Assumed Deposits through the Closing Date will be withheld by the
Seller in accordance with applicable law or appropriate notice from any
governmental agency and will be remitted by the Seller to the appropriate agency
on or prior to the applicable due date. Any such withholding required to be
made subsequent to the Closing Date shall be withheld by the Buyer in accordance
with applicable law or the appropriate notice from any governmental agency and
will be remitted by the Buyer to the appropriate agency on or prior to the
applicable due date. Promptly after the Closing Date, but in no event later
than the date the Buyer is obligated to remit such amounts to the applicable
governmental agency, the Seller will pay to the Buyer that portion of any sums
theretofore withheld by the Seller from any Assumed Deposits transferred on the
Closing Date which are or may be required to be remitted by the Buyer pursuant
to the foregoing and shall directly remit to the applicable governmental agency
that portion of any such sums which are required to be remitted by the Seller.
4.9 EMINENT DOMAIN OR TAKING. If proceedings under a power of eminent
domain relating to a specific Branch or any part thereof (the "Affected Branch")
are commenced prior to the Closing Date, Seller will promptly inform Buyer in
writing.
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(a) If such proceedings involve the taking of all of or a material
interest in the Affected Branch, Buyer may elect to terminate this Agreement
with respect to such Affected Branch by notice in writing sent within ten (10)
calendar days of Seller's written notice to Buyer, in which case neither party
will have any further obligation to or rights against the other with respect to
the Affected Branch except any rights or obligations of either party which are
expressly stated to survive termination of this Agreement.
(b) If the proceedings do not involve the taking of all of or a material
interest in the Affected Branch, or if Buyer does not elect to terminate this
Agreement as to the Affected Branch, this transaction will be consummated as
described herein, and, subject to the Lease, if any, or other encumbrances, if
any, relating to the Affected Branch, any award or settlement payable with
respect to such proceeding will be paid or assigned to Buyer on the Closing
Date.
(c) If the Closing contemplated by this Agreement is not consummated for
any reason, Buyer will have no claim to any condemnation award or settlement
with respect to the Affected Branch.
4.10 DAMAGE OR DESTRUCTION. Except as provided in this Section 4.10, prior
to the Closing Date, as between Seller and Buyer the entire risk of loss or
damage by earthquake, flood, landslide, fire or other casualty is borne and
assumed by Seller. If, prior to the Closing Date, any part of the Improvements
or Leasehold Improvements at a specific Branch (the "Affected Improvements") is
damaged or destroyed by earthquake, flood, landslide, fire or other casualty,
Seller will promptly inform Buyer of such fact in writing and advise Buyer as to
the extent of the damage and whether it is, in Seller's reasonable opinion,
"MATERIAL."
(a) If the parties determine that such damage or destruction is
"MATERIAL", Buyer has the option to terminate this Agreement with respect to
such Branch (the "Affected Branch") upon written notice to the Seller given not
later than ten (10) calendar days after receipt of Seller's written notice to
Buyer advising of such damage or destruction.
(b) For purposes of this Section 4.10, "MATERIAL" shall mean any damage or
destruction to the Affected Improvements where the cost of repair or replacement
is estimated to be (i) in the case of damage or destruction to Improvements,
more than twenty-five (25) percent of the Market Value of the Branch Real Estate
and Improvements, or (ii) in the case of damage or destruction to Leasehold
Improvements, more than twenty-five (25) percent of the amount indicated in
Section 3.1 and Schedule 3.1 for the Leasehold Improvements at the Affected
Branch ("Leasehold Improvements Value"), and that in either case will take more
than sixty (60) calendar days to repair.
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(c) If this Agreement is so terminated, neither party will have any further
obligation to or rights against the other with respect to the Affected Branch
except any rights or obligations of either party which are expressly stated to
survive termination of this Agreement.
(d) Subject to the Lease, if any, or other encumbrances, if any, if the
Buyer does not elect to terminate this Agreement as to the Affected Branch, or
if the casualty is not material, Seller shall EITHER (i) reduce the Market Value
of the Branch Real Estate or the Leasehold Improvements Value at the Affected
Branch, as the case may be, by the value reasonably estimated by the parties to
repair or restore the damaged portion of the Affected Improvements, less any
sums expended by Seller to make emergency repairs to the Affected Improvements
OR (ii) repair or restore the damaged portion of the Affected Improvements, and
in either case this transaction will close pursuant to the terms of this
Agreement, and the Buyer will accept the Affected Branch as is, where is,
without recourse, with all faults and with no warranties other than as expressly
provided in Section 5.1 of this Agreement, and subject to the provisions of
Section 4.4 of this Agreement, which shall exclusively govern the rights and
obligations of the parties with regard to Hazardous Substances.
(e) If the damage is not material, Seller's notice to Buyer of the damage
or destruction will also set forth the reduced Market Value of the Branch Real
Estate or the reduced Leasehold Improvements Value at the Affected Branch, as
the case may be, and Seller's allocation of value to the damaged portion of the
Affected Improvements. If Buyer does not accept Seller's reduced valuation,
Buyer's sole remedy will be to submit the issue to arbitration pursuant to
Section 9.4 hereof.
(f) Whether or not the sale of the Affected Branch is consummated
hereunder, Buyer shall have no rights to insurance claims or proceeds in respect
of damage or destruction to the Affected Improvements occurring prior to the
Closing Date.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES
5.1 SELLER'S REPRESENTATIONS AND WARRANTIES. The Seller represents and
warrants to the Buyer that, as of the date of this Agreement (or, as to any
information specified in a Schedule to have been compiled as of some earlier
date, as of such earlier date), and subject to Section 4.4 (a):
(a) The Seller is a national banking association, duly organized and in
good standing under the laws of the United States;
(b) The Seller has the requisite power and authority to execute, deliver
and perform this Agreement and to consummate
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the transactions contemplated hereby; all corporate action necessary to be
taken by or on the part of the Seller to execute, deliver and perform this
Agreement and to consummate the transactions contemplated hereby has been
duly and validly taken; and this Agreement has been duly executed and
delivered by, and constitutes the valid and binding agreement of the Seller,
enforceable in accordance with its terms except as limited by bankruptcy,
insolvency, reorganization, fraudulent transfer, moratorium and similar laws
affecting creditors generally and by the availability of equitable remedies;
(c) The execution, delivery and performance by the Seller of this
Agreement do not, and the consummation by the Seller of the transactions
contemplated hereby will not, violate or conflict with the articles of
association or bylaws of the Seller, or any law or regulation currently
applicable to the Seller, or any material agreement or instrument, or currently
applicable award, order, judgment or decree to which the Seller is a party or by
which it is bound, or require any filing by the Seller with, or authorization,
approval, consent or other action with respect to the Seller by, any
governmental or regulatory agency except such as have been made or obtained and
are in full force and effect;
(d) Schedule 2.2(d) sets forth a list of all material written contracts,
agreements and other obligations known to the Seller to which the Seller is a
signatory which relate to the operation of the Branches (other than those giving
rise to the Assets and the Liabilities), including without limitation equipment
leases and service and maintenance contracts, consulting contracts, agency
agreements and licensing agreements; PROVIDED, HOWEVER, THAT equipment leases
and service and maintenance contracts which the Seller does not believe are
assignable are not listed;
(e) Except as set forth in Schedule 5.1(e): (i) there is no litigation,
claim, action, suit or proceeding pending which, if adversely determined, would
adversely affect the use of the Assets or the Liabilities; and (ii) to the
Seller's knowledge, there is no litigation, claim, action, suit or proceeding
threatened by any organization, person, individual or governmental agency which,
if adversely determined, would, individually or in the aggregate, materially and
adversely affect the use of the Assets or the Liabilities;
(f) The Seller has not in any manner whatsoever paid or agreed to pay any
fee or commission to any agent, broker, finder or other person for or on account
of services rendered as a broker or finder in connection with this Agreement or
the transactions covered and contemplated hereby. All negotiations relating to
this Agreement have been conducted by the Seller directly and without the
intervention of any person in such manner as to give rise to any valid claim
against the Seller for any brokerage commission or like payment;
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(g) Schedule 2.2(e) contains an accurate and complete list of all Leases,
if any. True and correct copies of all Leases referred to in such Schedule have
been provided to Buyer;
(h) Schedule 5.1(h) lists for each Branch all employees thereof and states
for each such individual his or her position, dates of employment with the
Seller and present compensation;
(i) A certificate of occupancy or equivalent is in effect permitting the
occupancy of each Branch for its present use. The Seller holds all licenses
materially required in connection with the use or occupancy of each Branch;
(j) The Seller has not in any manner whatsoever paid or agreed to pay any
fee or commission to any agent, broker, finder or other person for or on account
of services rendered as a broker or finder in connection with this Agreement or
the transactions covered and contemplated hereby. All negotiations relating to
this Agreement have been conducted by the Seller directly and without the
intervention of any person in such manner as to give rise to any valid claim
against the Seller for any brokerage commission or like payment; and
(k) The Branch Real Estate and the Improvements have been owned, operated
and used in material compliance with all laws, regulations and ordinances
(excluding Environmental Laws, which are exclusively governed by Section 4.4
hereof); to the knowledge of the Seller, the Improvements were constructed in
material compliance with all applicable laws and regulations (excluding
Environmental Laws, which are exclusively governed by Section 4.4 hereof),
including zoning, land use and other requirements and all building permits; the
Seller has received no notice of, or is not otherwise aware of, any proposed
condemnation or eminent domain proceeding with respect to the Branch Real
Estate, or any portion thereof.
5.2 BUYER'S REPRESENTATIONS AND WARRANTIES. The Buyer represents and
warrants to the Seller that, as of the date of this Agreement, and subject to
Section 4.4(a):
(a) The Buyer is a banking corporation, duly established and in good
standing under the laws of the State of California;
(b) Subject to the satisfaction of any applicable governmental or
regulatory requirements referred to in Section 4.2(b) and to approval of this
Agreement and the transactions contemplated hereby by the requisite vote or
consent of the holders of outstanding securities of the Buyer if such approval
is required by applicable law, contract, the Buyer's Articles of Incorporation
or Bylaws, or otherwise, the Buyer has the requisite power and authority to
execute, deliver and perform this
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Agreement and to consummate the transactions contemplated hereby; all acts
and other proceedings required to be taken by or on the part of the Buyer to
execute, deliver and perform this Agreement and to consummate the
transactions contemplated hereby have been duly and validly taken; and this
Agreement has been duly executed and delivered by, and constitutes the valid
and binding agreement of, the Buyer, enforceable in accordance with its terms
except as limited by bankruptcy, insolvency, reorganization, fraudulent
transfer, moratorium and similar laws affecting creditors generally and by
the availability of equitable remedies;
(c) Subject to the satisfaction of any applicable governmental or
regulatory requirements referred to in Section 4.2(b), the execution, delivery
and performance by the Buyer of this Agreement do not, and the consummation by
the Buyer of the transactions contemplated hereby will not, violate or conflict
with the articles of incorporation or bylaws of the Buyer, or any law or
regulation currently applicable to the Buyer, or any material agreement or
instrument, or currently applicable order, judgment or decree to which the Buyer
is a party or by which it is bound or require any prior filing by the Buyer
with, or authorization, approval, consent or other action with respect to the
Buyer by, any governmental or regulatory agency except such as have been made or
obtained and are in full force and effect or will be made or obtained and in
full force and effect as of the Closing;
(d) There are no actions, suits or proceedings pending or, to the
knowledge of the Buyer, threatened against or affecting, the Buyer, which may
cause a material adverse change in the Buyer's business or financial condition;
(e) The Buyer has not paid or agreed to pay any fee or commission to any
agent, broker, finder or other person for or on account of services rendered as
a broker or finder in connection with this Agreement or the transactions covered
and contemplated hereby. All negotiations relating to this Agreement have been
conducted by the Buyer directly and without the intervention of any person in
such manner as to give rise to any valid claim against the Seller for any
brokerage commission or like payment;
(f) The Buyer has not received written notice from any federal or
California governmental or regulatory agency indicating that it would oppose or
not grant or issue its consent or approval, if required, with respect to the
transactions contemplated by this Agreement;
(g) The Buyer satisfies each and all of the standards and requirements
lawfully within the control of the Buyer of which it is aware (and, as of the
Closing Date, will satisfy each and all of the standards and requirements
lawfully within the control of the Buyer) imposed as a condition to obtaining or
necessary to comply with and in order to obtain any of the governmental or
regulatory approvals referred to in Section 4.2(b) of this Agreement;
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(h) At the time of the most recent regulatory evaluation of Buyer's
performance under the Community Reinvestment Act (the "CRA"), Buyer's record of
performance was deemed to be "outstanding" or "satisfactory", and no proceedings
are pending or to the knowledge of Buyer, threatened, that would result in a
change in such evaluation. Buyer has not received any adverse public comments
with respect to its compliance under the CRA since the date of its most recent
regulatory evaluation of its performance under the CRA;
(i) The Buyer has available sufficient cash or other liquid assets or
financing pursuant to binding agreements or commitments which may be used to
fund the transactions contemplated hereby and has provided to Seller a copy of
an engagement letter from Sutro & Co., a reputable investment banking firm, to
act as managing underwriter of a firm commitment underwritten equity capital
offering which will be completed before the Closing Date in a sufficient
principal amount with which to consummate such transactions; PROVIDED that if
the transactions contemplated hereby are not consummated due to Buyer's failure
to raise sufficient capital, then, promptly upon demand, Buyer shall pay to
Seller the Break-up Fee; and
(j) Buyer acknowledges and is aware of the disclosures made by Seller with
respect to the Branch Real Estate and set forth in Schedule 5.2(j) attached
hereto.
ARTICLE 6
UNDERSTANDINGS
Buyer and Seller understand and agree as follows:
6.1 DEPOSITORS' RIGHTS. The Buyer and the Seller understand and agree
that all transfers to the Buyer of Assumed Deposits are subject to the
individual depositors' continuing rights to withdraw, and the Seller makes no
representation or warranty to the Buyer concerning the continuing maintenance of
such deposits at the Branches.
6.2 UNCLAIMED PROPERTY. With respect to safe deposit boxes that have been
opened by the Seller and whose contents have been inventoried and are being held
by the Seller in safekeeping in preparation for escheat to the State of
California, the Seller shall remove any and all such contents from the Branches
prior to the Closing Date.
6.3 HEAD OFFICE ACCOUNTS. Schedule 6.3 sets forth certain Accounts at the
Branches which have been designated by the Seller as "Head Office Accounts."
The Buyer and the Seller understand and agree that the Seller may remove from
the Branches prior to the Closing Date any and all Head Office Accounts and
deposits of the types described in the proviso in Section 2.3(a)(iii) and any
Head Office Accounts and any such
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deposits so removed shall not be included in the Assumed Deposits.
6.4 LIMITATION OF WARRANTIES. Except as may be expressly represented or
warranted by Seller in Section 5.1 of this Agreement, and subject to the
provisions of Section 4.4 of this Agreement which shall exclusively govern the
rights and obligations of the parties with regard to Hazardous Substances,
Seller makes no representation or warranty whatsoever with regard to any Asset,
any Liability or the business or operation of any of the Branches, it being
expressly understood that such Assets and Liabilities are being transferred AS
IS, WHERE IS, WITHOUT RECOURSE, WITH ALL FAULTS AND WITH NO WARRANTIES OTHER
THAN AS EXPRESSLY PROVIDED IN SECTION 5.1 OF THIS AGREEMENT. Buyer agrees that
it is relying solely upon its own judgment, after such investigation and
inspection as it deems necessary or appropriate, as to the quality, condition,
fitness and value of the Assets and the nature and amount of the Liabilities,
and Seller hereby disclaims any representations or warranties made by Seller as
to their condition, value, nature or amount except those made in Section 5.1 of
this Agreement, subject to Section 4.4 of this Agreement. Notwithstanding any
other provision of this Agreement, Buyer and Seller understand and agree that
Seller is making, and shall make, no representations or warranties with respect
to title to the Branch Real Estate other than those, if any, contained in the
grant deed the form of which is attached hereto as Schedule 2.2(b)(i)(A).
ARTICLE 7
CONDITIONS TO THE CLOSING
7.1 SELLER'S CONDITIONS. The obligations of the Seller to consummate the
Closing shall be subject to the satisfaction at or prior to Closing of all of
the following conditions, any one or more of which may be waived, in whole or in
part, by the Seller:
(a) The Buyer shall have complied in all material respects with each of
its covenants and agreements contained herein to be performed at or prior to the
Closing Date, and each of the representations and warranties of the Buyer in
Section 5.2 hereof shall be true and correct in all material respects as if made
at and as of the Closing;
(b) The Buyer shall have delivered to the Seller a duly authorized and
signed officer's certificate, dated as of the Closing Date, certifying as to the
matters specified in Section 7.1(a), and further that (i) the methodology and
accounting procedures used by the Seller in preparing the Closing Financial
Statement have been reviewed and are acceptable to the Buyer, and (ii) the
Buyer, to and including the Closing Date, has performed such review of the
books, records, files, documentation and accounts of the Branches as it has
deemed appropriate;
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(c) All consents, approvals and authorizations required to be obtained
prior to the Closing from governmental and regulatory authorities in connection
with the execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby to be consummated at the Closing shall have
been made or obtained, and shall remain in full force and effect, all waiting
periods applicable to the consummation of the transactions contemplated hereby
shall have expired or been terminated and all required regulatory filings shall
have been made; PROVIDED, HOWEVER, that no governmental or regulatory consent,
approval or authorization shall have imposed any condition or requirement that
the Seller in good faith determines to be materially burdensome upon the
business of the Seller or upon the consummation of the transactions contemplated
hereby;
(d) There shall not be in effect any nonappealable final order, decree or
judgment of any court or governmental body having competent jurisdiction that
would be violated by consummation of the transactions contemplated hereby, nor
any material pending or threatened action, proceeding or investigation, the
adverse determination of which would result in such order, decree or judgment;
provided, that in the case of such material pending or threatened action,
proceeding or investigation, neither party shall decline to proceed with the
Closing pending final resolution thereof without exercising its reasonable
efforts promptly to determine jointly with the other party the merit thereof and
the likelihood of an adverse determination in such proceeding; and
(e) This Agreement and the transactions contemplated hereby shall have
been approved by the requisite vote or consent of the holders of outstanding
securities of the Buyer if such approval is required by applicable law,
contract, the Buyer's Articles of Incorporation or Bylaws, or otherwise.
7.2 BUYER'S CONDITIONS. The obligations of the Buyer to consummate the
Closing shall be subject to the satisfaction at or prior to Closing of all of
the following conditions, any one or more of which may be waived, in whole or in
part, by the Buyer:
(a) The Seller shall have complied in all material respects with each of
its covenants and agreements herein to be performed at or prior to the Closing
Date and each of the representations and warranties of the Seller contained in
this Agreement and the Schedules shall be true and correct in all material
respects as if made at and as of Closing except to the extent of changes that
have occurred prior to Closing that are consistent with the provisions of
Section 2.3(a);
(b) The Seller shall have delivered to the Buyer a duly authorized and
signed officer's certificate, dated as of the Closing Date, certifying that
(i) the representations and
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warranties of the Seller contained in this Agreement and the Schedules are
true and correct as of the Closing Date, and (ii) the Seller has complied in
all material respects with each of its covenants and agreements herein to be
performed at or prior to the Closing Date;
(c) As to each of the Branches, there shall have been given, obtained or
satisfied in final form any notice, approval, permit or other requirement of law
or any competent governmental or regulatory authority that is necessary to
proceed with the Closing, including without limitation such approvals as may be
required of any California or federal bank or other financial institution
regulatory agency and any other entity or entities having jurisdiction over the
Branches, the Buyer or the Seller, and no such agency or entity shall, in
connection therewith, have imposed any condition or requirement that would
result in a material adverse effect on the business or prospects of the Branches
or the Buyer, or on the consummation of the transactions contemplated hereby;
and
(d) There shall not be in effect any nonappealable final order, decree or
judgment of any court or governmental body having competent jurisdiction that
would be violated by consummation of the transactions contemplated hereby, nor
any material pending or threatened action, proceeding or investigation, the
adverse determination of which would result in such order, decree or judgment;
provided, that in the case of such material pending or threatened action,
proceeding or investigation, neither party shall decline to proceed with the
Closing pending final resolution thereof without exercising its reasonable
efforts promptly to determine jointly with the other party the merit thereof and
the likelihood of an adverse determination in such proceeding.
Notwithstanding any other provision of this Agreement, in the event that,
at the Closing, there shall be a failure of any condition specified in this
Section 7.2 or elsewhere in this Agreement, including without limitation any
failure of condition specified in Section 2.2(d), 2.2(e), 4.3, 4.4, 4.9 or 4.10
to the obligations of the Buyer in respect of the acquisition of any specific
Branch or Branches, the Buyer nevertheless shall be obligated to consummate the
transactions contemplated by this Agreement upon the Closing Date, and the
Seller may, upon written notice to the Buyer, exclude from the Closing the
Branch or Branches in respect of which the failure of condition shall exist, in
which case, appropriate adjustment shall be made in the consideration payable
pursuant to Article 3, the Schedules hereto, the Financial Statements and the
other documents to be delivered pursuant hereto so as to duly reflect the
deletion of such Branch or Branches from the Closing.
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ARTICLE 8
TERMINATION
8.1 EVENTS OF TERMINATION. This Agreement may be terminated at any time
prior to Closing:
(a) By the mutual written agreement of the Seller and the Buyer;
(b) By the Seller or by the Buyer in the event that the Closing has not
occurred on or before the date indicated in the third proviso in Section 2.2(a),
or such other date as the Seller and the Buyer shall agree in writing, unless
the failure to so consummate by such time is due to a breach of this Agreement
by the party seeking to terminate;
(c) By the Seller or by the Buyer if consummation of the transactions
contemplated hereby would violate any nonappealable final order, decree or
judgment of any court or governmental body having competent jurisdiction;
(d) By the Seller or the Buyer, in the event of a material breach by the
other of any representation, warranty or agreement contained herein which is not
cured or cannot be cured within thirty (30) calendar days after written notice
of such termination has been delivered to the breaching party; PROVIDED,
HOWEVER, that (i) termination pursuant to this Section 8.1(d) shall not relieve
the breaching party of liability for such breach or otherwise and (ii) this
Section 8.1(d) shall not under any circumstances provide the Buyer with a basis
for termination due to any actual or alleged breach relating to Hazardous
Substances, Buyer's sole remedies with respect to Hazardous Substances being
contained in Section 4.4; and
(e) By the Seller, in the event that the Buyer's equity capital offering
shall not have been consummated by November 14, 1997.
Any party desiring to terminate this Agreement pursuant to any of the
foregoing clauses shall give written notice of such termination to the other
party.
8.2 LIABILITY FOR TERMINATION. If this Agreement is terminated as
permitted by Section 8.1, except as provided in Sections 5.2(i) and 8.1(d), such
termination shall be without liability of either party (or any shareholder,
director, officer, employee, agent, consultant or representative of such party)
to the other party to this Agreement, except that, subject to Section 4.4, if
such termination shall result from the willful failure of a party to fulfill a
condition to the performance of the obligations of the other party or to perform
a covenant of this Agreement or from a willful misrepresentation or breach of a
warranty, covenant or agreement hereunder by
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either party to this Agreement, such party shall be fully liable for any and
all damages, costs and expenses (including, but not limited to, reasonable
attorney's fees) sustained or incurred by the other party as a result of such
failure or breach.
ARTICLE 9
SURVIVAL, INDEMNIFICATION
9.1 SURVIVAL. The covenants, agreements, representations and warranties
of the parties hereto made, contained in or to be performed pursuant to this
Agreement, the Schedules hereto or the officers' certificates delivered pursuant
hereto or in connection herewith shall survive Closing and remain operative and
in full force and effect until the first anniversary of the Closing Date, except
for the provisions of Sections 2.4, 3.2(h), 4.4(e)(ii), 10.1 and 11.11, which
shall survive such first anniversary. Notwithstanding the preceding sentence,
any covenant, agreement, representation, warranty or claim in respect of which
indemnity may be sought under Sections 9.2 or 9.3 shall survive the time at
which it would otherwise terminate pursuant to the preceding sentence if notice
of the claim, inaccuracy or breach giving rise to such right to indemnity shall
have been given to the party against whom such indemnity may be sought prior to
such time. After Closing, the sole and exclusive remedy of the Buyer and the
Seller for any breach of any covenant or agreement or any inaccuracy of any such
representation or warranty by the Seller or the Buyer shall be the indemnities
contained in Sections 9.2 and 9.3, respectively, which shall survive Closing,
PROVIDED HOWEVER, THAT the provisions of Section 4.4 shall exclusively govern
the rights and obligations of the Seller and Buyer with regard to Hazardous
Substances.
9.2 SELLER'S INDEMNITY. Subject to the proviso in the final sentence of
Section 9.1, the Seller hereby indemnifies the Buyer against and agrees to hold
it harmless from any and all damage, loss, liability and expense (including,
without limitation, reasonable expenses of investigation and attorney's fees and
expenses in connection with any action, suit or proceeding brought against the
Buyer) demanded, claimed or threatened in writing against the Buyer or incurred
or suffered by the Buyer arising out of (i) any action taken or omitted to be
taken by the Seller prior to the Closing relating to the ownership or operation
of the Branches or their business and properties prior to Closing, but excluding
any damage, loss, liability or expense resulting from actions taken by the
Seller at the written direction of the Buyer or resulting from defects in title
to the Branch Real Estate; (ii) any misrepresentation or breach of warranty,
covenant or agreement made, contained in or to be performed by the Seller
pursuant to this Agreement, the Schedules hereto or the Seller's officer's
certificate; and (iii) any claim or demand by any Branch employee of the Seller
who shall not become an employee of the Buyer (except as may be
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the result of any action or inaction of the Buyer). Any direct claim by the
Buyer against the Seller, as distinguished from a claim against the Buyer by
a third party, shall be settled by arbitration pursuant to Section 9.4. The
Seller shall not be liable under this Section 9.2 for any settlement effected
without its consent (which consent shall not be unreasonably withheld) of any
claim, litigation or proceeding in respect of which indemnity may be sought
hereunder. The Buyer agrees to give prompt notice to the Seller of the
assertion of any claim, or the commencement of any suit, action or proceeding
in respect of which indemnity may be sought hereunder. The Seller may, and
at the request of the Buyer shall, participate in and control the defense of
any such suit, action or proceeding at its own expense.
9.3 BUYER'S INDEMNITY. Subject to the proviso in the final sentence of
Section 9.1, the Buyer hereby indemnifies the Seller against and agrees to hold
it harmless from any and all damage, loss, liability and expense (including,
without limitation, reasonable expenses of investigation and attorney's fees and
expenses in connection with any action, suit or proceeding brought against the
Seller) demanded, claimed or threatened in writing against the Seller or
incurred or suffered by the Seller arising out of (i) ownership or operation of
the Branches or their business and properties on and after Closing (except as to
such damage, liability, loss or expense resulting from actions taken by the
Buyer at the written direction of the Seller); and (ii) any misrepresentation or
breach of warranty, covenant or agreement made, contained in or to be performed
by the Buyer pursuant to this Agreement, the Schedules hereto or the Buyer's
officer's certificate. Any direct claim by the Seller against the Buyer, as
distinguished from a claim against the Seller by a third party, shall be settled
by arbitration pursuant to Section 9.4. The Buyer shall not be liable under
this Section 9.3 for any settlement effected without its consent (which consent
shall not be unreasonably withheld) of any claim, litigation or proceeding in
respect of which indemnity may be sought hereunder. The Seller agrees to give
prompt notice to the Buyer of the assertion of any claim, or the commencement of
any suit, action or proceeding in respect of which indemnity may be sought
hereunder. The Buyer may, and at the request of the Seller shall, participate
in and control the defense of any such suit, action or proceeding at its own
expense.
9.4 ARBITRATION OF DISPUTES. (A) ANY CONTROVERSY OR CLAIM ARISING OUT OF
OR RELATING TO THIS AGREEMENT OR ANY AGREEMENTS OR INSTRUMENTS RELATING HERETO
OR DELIVERED IN CONNECTION HEREWITH, INCLUDING, BUT NOT LIMITED TO A CLAIM BASED
ON OR ARISING FROM AN ALLEGED TORT WILL, AT THE REQUEST OF ANY PARTY, BE
DETERMINED BY ARBITRATION IN ACCORDANCE WITH THE FEDERAL ARBITRATION ACT (9
U.S.C. SECTION 1 ET SEQ.) UNDER THE AUSPICES AND RULES OF THE AMERICAN
ARBITRATION ASSOCIATION ("AAA"). THE AAA WILL BE INSTRUCTED BY EITHER OR BOTH
PARTIES TO PREPARE A LIST OF THREE (3) JUDGES WHO HAVE RETIRED FROM THE
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XXXXXXXX XXXXX XX XXX XXXXX XX XXXXXXXXXX, A HIGHER CALIFORNIA COURT OR ANY
FEDERAL COURT. WITHIN TEN (10) CALENDAR DAYS OF RECEIPT OF THE LIST, EACH
PARTY MAY STRIKE ONE (1)NAME FROM THE LIST. THE AAA WILL THEN APPOINT THE
ARBITRATOR FROM THE NAME(S) REMAINING ON THE LIST. THE ARBITRATION WILL BE
CONDUCTED IN SAN FRANCISCO, LOS ANGELES OR SAN DIEGO, WHICHEVER IS THE
CLOSEST CITY TO THE NEXUS OF THE DISPUTE. ANY CONTROVERSY IN INTERPRETATION
OR ENFORCEMENT OF THIS PROVISION OR WHETHER A DISPUTE IS ARBITRABLE, WILL BE
DETERMINED BY THE ARBITRATOR. JUDGMENT UPON THE AWARD RENDERED BY THE
ARBITRATOR MAY BE ENTERED IN ANY COURT HAVING JURISDICTION. THE INSTITUTION
AND MAINTENANCE OF AN ACTION FOR JUDICIAL RELIEF OR IN PURSUIT OF AN
ANCILLARY REMEDY DOES NOT CONSTITUTE A WAIVER OF THE RIGHT OF ANY PARTY,
INCLUDING THE PLAINTIFF, TO SUBMIT THE CONTROVERSY OR CLAIM TO ARBITRATION.
(B) IN ANY ARBITRATION PROCEEDING, THE ARBITRATOR IS AUTHORIZED TO
APPORTION COSTS AND EXPENSES, INCLUDING INVESTIGATION, LEGAL AND OTHER EXPENSES,
WHICH WILL INCLUDE, IF APPLICABLE, A REASONABLE ESTIMATE OF ALLOCATED COSTS AND
EXPENSE OF IN-HOUSE LEGAL COUNSEL AND LEGAL STAFF. SUCH COSTS AND EXPENSES ARE
TO BE AWARDED ONLY AFTER THE CONCLUSION OF THE ARBITRATION AND WILL NOT BE
ADVANCED DURING THE COURSE OF SUCH ARBITRATION.
NOTICE: BY INITIALING IN THE SPACE BELOW YOU ARE AGREEING TO HAVE ANY DISPUTE
ARISING OUT OF THE MATTERS INCLUDED IN THE "ARBITRATION" PROVISION DECIDED BY
NEUTRAL ARBITRATION AS PROVIDED BY CALIFORNIA LAW AND YOU ARE GIVING UP ANY
RIGHTS YOU MIGHT POSSESS TO HAVE THE DISPUTE LITIGATED IN A COURT OR BY JURY
TRIAL. BY INITIALING IN THE SPACE BELOW YOU ARE GIVING UP YOUR JUDICIAL RIGHTS
TO DISCOVERY AND APPEAL UNLESS SUCH RIGHTS ARE SPECIFICALLY INCLUDED IN THE
"ARBITRATION OF DISPUTES" PROVISION. IF YOU REFUSE TO SUBMIT TO ARBITRATION
AFTER AGREEING TO THIS PROVISION, YOU MAY BE COMPELLED TO ARBITRATE UNDER THE
AUTHORITY OF THE CALIFORNIA CODE OF CIVIL PROCEDURE. YOUR AGREEMENT TO THIS
ARBITRATION PROVISION IS VOLUNTARY.
WE HAVE READ AND UNDERSTAND THE FOREGOING AND AGREE TO SUBMIT DISPUTES ARISING
OUT OF THE MATTERS INCLUDED IN THE "ARBITRATION OF DISPUTES" PROVISION TO
NEUTRAL ARBITRATION.
BUYER'S INITIALS /s/JB SELLER'S INITIALS /s/BAD
--------- ---------
9.5 LIMIT ON INDEMNITIES. (a) Notwithstanding any other provision hereof,
an indemnifying party shall not be liable under this Article 9 for any losses
sustained by the indemnified party with respect to a Branch unless and until the
aggregate amount of all such losses sustained by the indemnified party with
respect to that Branch (including any amount for which the indemnifying party
may become liable to provide indemnification pursuant to Section 4.4), shall
exceed $25,000, in which event the indemnifying party shall be liable only for
such losses in excess of $25,000 (it being the intention of the parties that
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losses sustained by a party with respect to one Branch shall not be combined
with losses sustained with respect to another Branch to satisfy such minimum
$25,000 amount). The minimum $25,000 amount shall not apply to amounts which
one party may be required to pay to the other under Sections 2.4, 3.2, 4.1(g),
4.1(h), 4.6 and 10.1 of this Agreement or other provisions dealing with
customary and foreseeable post-closing adjustments. In no event shall the
aggregate losses for which the Seller may be liable under this Article 9 or
Section 4.4 or any other basis exceed the amount of the Initial Base Amount. IN
ADDITION, THE INDEMNIFYING PARTY SHALL HAVE NO OBLIGATIONS UNDER THIS AGREEMENT
FOR ANY CONSEQUENTIAL LIABILITY, DAMAGE OR LOSS OF THE INDEMNIFIED PARTY THAT
THE INDEMNIFIED PARTY MAY SUFFER.
(b) Each party's right to indemnification under this Article 9 shall
preclude any other monetary award (whether at law or in equity) and shall
preclude assertion by such party of any right to any such monetary award from
the indemnifying party.
ARTICLE 10
TAXES
10.1 OBLIGATIONS OF THE BUYER AND THE SELLER. The Buyer and the Seller
shall each assume and pay one-half of the following: any documentary, stamp,
deed, sales, use or other transfer taxes, recording fees and escrow fees
relating to the sale of the Assets and assumption of the Liabilities, including
but not limited to the assignment of the Leases. On the Closing Date, all real
and personal property taxes and current installments of special assessments
levied or assessed with respect to the Branch Real Estate, the Improvements, the
Leasehold Improvements and the Furniture, Fixtures and Equipment shall be
prorated between the Seller and the Buyer on a daily basis as of the Closing
Date based upon the fiscal year of the appropriate taxing authority.
10.2 ACCESS TO INFORMATION. For the applicable period required by law,
the Seller and the Buyer shall have a right to have access to and to copy all of
the records of the other party relevant to the Assets and the Liabilities and
necessary for the preparation of income tax returns, employee tax returns,
employee reports, employee benefits calculations, and for customary accounting
functions and other similar bona fide purposes. Additionally, the Buyer and the
Seller each agree to make available to the other party, at reasonable times and
upon reasonable advance notice, relevant records and personnel in connection
with an investigation or the preparation of or participation in a defense,
negotiation or settlement relating to any pending, future, or threatened
litigation or government agency proceeding (including a tax audit) involving the
conduct or interest of such other party.
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10.3 ALLOCATION OF CONSIDERATION. The Buyer and the Seller shall use
reasonable efforts to allocate the consideration payable hereunder at the
Closing among the Assets, tangible and intangible, on the basis of an allocation
(the "Allocation") to be agreed upon by the Buyer and the Seller prior to the
Closing.
ARTICLE 11
MISCELLANEOUS
11.1 PUBLIC NOTICE. All written notices to third parties, including
customers of the Branches, all oral or written notices or general communications
to employees of the Branches, and all public announcements and press releases
concerning the transactions contemplated by this Agreement made prior to Closing
shall be jointly planned and coordinated by the Buyer and the Seller. Neither
party shall act unilaterally in this regard without the prior approval of the
other party, which shall not be unreasonably withheld or delayed; PROVIDED,
HOWEVER, that in the event that a party reasonably concludes that a public
announcement or release is required by applicable law and the parties cannot
reach agreement upon a mutually acceptable release, the party releasing the
information, announcement or public statement shall not be deemed to be in
breach of this Agreement.
11.2 ASSIGNMENT. Neither party shall assign this Agreement or any of its
rights, duties or obligations hereunder without the prior written consent of the
other party.
11.3 NOTICES. Notices and legal process to be delivered to or served upon
either party hereto shall be deemed to have been duly delivered or served when
delivered in written form by hand or by telegraph, telex or facsimile
transmission, or the day after being sent from within the continental United
States by overnight delivery or courier service, or three (3) calendar days
after posting by registered mail or certified mail with return receipt
requested, to the parties hereto at the following addresses:
If to the Seller:
BankAmerica Corporation
Corporate Development Department #13262
000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Attention: Director of Corporate Development
Fax: (000) 000-0000
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With copies to:
Bank of America NT&SA
Legal Department #3017
000 Xxxxxxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxxxxxxx, XX 00000
Attention: Legal Department - Corporate Advice
Fax: (000) 000-0000
And to:
Pillsbury Madison & Sutro LLP
000 Xxxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxx, Esq.
Fax: (000) 000-0000
If to the Buyer:
County Bank
0000 X. Xxxxx, Xxxxx X
Xxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxx
President and Chief Executive Officer
Fax: (000) 000-0000
With a copy to:
McCutchen, Doyle, Xxxxx & Enersen
0 Xxxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxx, Esq.
Fax: (000) 000-0000
or to such other authorized agent or address as either party may hereafter
select by written notice to the other party.
11.4 TIME. Time shall be of the essence for all purposes connected with
this Agreement.
11.5 EXPENSES. Except as otherwise expressly provided herein, the Buyer
and the Seller shall each bear its own out-of-pocket expenses incurred in
connection with the transactions contemplated by this Agreement.
11.6 COMMUNICATIONS. If for any reason any payment or communication to
which one party is entitled is received by the other party hereto, the receiving
party shall promptly forward such payment or communication to the other party.
11.7 ENTIRE AGREEMENT. This Agreement embodies the entire agreement and
understanding between the parties hereto and supersedes all prior agreements and
understandings, except that
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certain Confidentiality Agreement between the parties hereto which was
executed by the Seller as of March 24, 1997 (the "Confidentiality
Agreement"), relating to the subject matter of this Agreement. The
Confidentiality Agreement shall survive, in accordance with its own terms,
the execution, delivery and performance of this Agreement.
11.8 AMENDMENT. Neither this Agreement nor any provision hereof may be
changed, waived, discharged or terminated orally. Any such change, waiver,
discharge or termination may be effected only by an instrument in writing signed
by the party against which enforcement of such change, waiver, discharge or
termination is sought.
11.9 GOVERNING LAW, SEVERABILITY. This Agreement shall be governed by and
construed in accordance with the laws of the State of California. If any one or
more of the provisions of this Agreement shall for any reason be held to be
invalid, illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provision of this Agreement, and
this Agreement shall be construed as if such invalid, illegal or unenforceable
provision were not contained herein.
11.10 WAIVER. No delay or omission to exercise any right, power or remedy
accruing to either party upon any breach or default under this Agreement shall
impair any such right, power or remedy of such party, nor shall it be construed
to be a waiver of any such breach or default, or an acquiescence therein, or in
any similar breach or default thereafter occurring; nor shall any waiver of any
single breach or default be deemed a waiver of any other breach of default
theretofore or thereafter occurring. Any waiver, permit, consent or approval or
any kind or character of any breach or default under this Agreement, or any
waiver of any provision or condition of this Agreement, must be in writing and
shall be effective only to the extent specifically set forth in such writing.
All rights and remedies, either under this Agreement or by law or otherwise
afforded to a party, shall be cumulative and not alternative.
11.11 CONFIDENTIALITY. The Buyer and its representatives, agents and
designees shall keep confidential and shall not disclose to any person or
entity, without Seller's prior written consent: the amount of the Purchase
Premium, the fact that confidential information has been made available to
Buyer, the existence of this Agreement or any of the terms or conditions hereof,
the status of the transactions contemplated hereby, all information concerning
the books, records, accounts and documents of Seller to which it has access
under this Agreement and any information developed in connection with any
Environmental Assessments that are performed by or on behalf of the Buyer
(including without limitation any reports or sampling results and analysis).
These restrictions, however, shall not apply to any such information (i) that
becomes public knowledge
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through no fault, act or omission of Buyer or its representatives, agents or
designees (for purposes of this Section 11.11 collectively the "Buyer"), (ii)
that Buyer lawfully acquires from an entity not under an obligation of
confidentiality to Seller, (iii) that is independently developed by Buyer,
(iv) where the Buyer is legally compelled to disclose such information,
provided that the Seller is provided with advance written notice of the
intention of Buyer to disclose to allow the Seller to contest the proposed
disclosure before any court or agency with jurisdiction unless such notice
impedes a duty or obligation of the Buyer under applicable laws, regulations
or legal requirements to timely report such information, in which event Buyer
shall concurrently advise Seller of Buyer's disclosure, or (v) where the
Buyer, upon advice of counsel, is required to disclose such information in
connection with a public offering of its equity securities. In case of any
actual or purported inconsistency or conflict between the provisions of this
Agreement and the provisions of the Confidentiality Agreement with respect to
obligations of the Buyer to maintain confidentiality as to any information,
the provisions which impose a higher standard of confidentiality on the Buyer
with respect to such information shall control and govern as to such actual
or purported inconsistency or conflict.
11.12 THIRD PARTY RIGHTS. Other than the provisions of Section 2.4,
nothing contained in this Agreement, whether express or implied, is intended to
(i) confer any rights or remedies upon any persons other than the parties hereto
and their respective successors and assigns, (ii) relieve or discharge the
obligations or liabilities of any third person to either party to this
Agreement, or (iii) give any third person any right of subrogation or action
over either party to this Agreement.
11.13 HEADINGS. The headings and captions used herein and in the
Schedules are included for purposes of convenience of reference only and shall
not limit or define the meaning of any provisions of this Agreement.
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11.14 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original instrument, but
all of which together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers or representatives as of the date
first above written.
SELLER:
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION
By /s/ Xxxxx X. Xxxxx
---------------------------------
Its Vice President
----------------------------
BUYER:
COUNTY BANK
By /S/ Xxxxx Xxxxx
---------------------------------
Its SVP/CFO
----------------------------
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SCHEDULE A
LIST OF BRANCHES
Dos Palos
Xxxxxxxxxx
Mariposa
