EXECUTION COPY
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BRANCH PURCHASE AND ASSUMPTION AGREEMENT
dated as of
September 15, 2000
between
NORTH VALLEY BANCORP
and
XXXXX VALLEY BANK
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TABLE OF CONTENTS
PAGE
ARTICLE 1. Definitions......................................................1
1.1 Definitions...........................................................1
ARTICLE 2. Purchase and Sale................................................5
2.1 Purchase and Sale.....................................................5
2.2 Closing...............................................................5
2.3 Transitional Matters..................................................7
2.4 Employee Considerations...............................................9
ARTICLE 3. Price and Adjustments...........................................11
3.1 Price................................................................11
3.2 Adjustments..........................................................12
ARTICLE 4. Additional Covenants............................................15
4.1 Seller's Covenants...................................................15
4.2 Buyer's Covenants....................................................18
4.3 Consents.............................................................19
4.4 Valuation of the Assets..............................................19
4.5 Clearing Items.......................................................19
4.6 XXX Deposits and Xxxxx Accounts......................................20
4.7 Interest Reporting and Withholding...................................20
4.8 Eminent Domain or Taking.............................................20
4.9 Damage or Destruction................................................21
ARTICLE 5. Representations and Warranties..................................21
5.1 Seller's Representations and Warranties..............................21
5.2 Buyer's Representations and Warranties...............................23
ARTICLE 6. Understandings..................................................25
6.1 Depositors' Rights...................................................25
6.2 Unclaimed Property...................................................25
6.3 Limitation of Warranties.............................................25
ARTICLE 7. Conditions to the Closing.......................................25
7.1 Seller's Conditions..................................................25
7.2 Buyer's Conditions...................................................26
ARTICLE 8. Termination.....................................................27
8.1 Events of Termination................................................27
8.2 Liability for Termination............................................28
ARTICLE 9. Survival, Indemnification.......................................28
9.1 Survival.............................................................28
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9.2 Seller's Indemnity...................................................28
9.3 Buyer's Indemnity....................................................29
9.4 Limit on Indemnities.................................................29
ARTICLE 10. Taxes..........................................................30
10.1 Obligations of the Buyer and the Seller..............................30
10.2 Access to Information................................................30
10.3 Allocation of Consideration..........................................30
ARTICLE 11. Miscellaneous..................................................30
11.1 Public Notice........................................................30
11.2 Assignment...........................................................31
11.3 Notices..............................................................31
11.4 Time.................................................................32
11.5 Expenses.............................................................32
11.6 Communications.......................................................32
11.7 Entire Agreement.....................................................32
11.8 Amendment............................................................32
11.9 Governing Law, Severability..........................................32
11.10 Waiver.............................................................32
11.11 Confidentiality....................................................32
11.12 Third Party Rights.................................................33
11.13 Headings...........................................................33
11.14 Counterparts.......................................................33
SCHEDULES
1.1(a) Branch Premises Lease Agreement
1.1(b) Furniture, Fixtures and Equipment
1.1(c) Other Liabilities
1.1(d) Loans
2.2(b)(i)(B) Form of Xxxx of Sale
2.2(b)(i)(C) Form of Assignment and Assumption
2.2(c) Prorated Expenses
2.2(d) Contracts
5.1(g) Employees
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BRANCH PURCHASE AND ASSUMPTION AGREEMENT
THIS BRANCH PURCHASE AND ASSUMPTION AGREEMENT ("Agreement") is made as
of September 15, 2000, by and between NORTH VALLEY BANCORP, a California
corporation (the "Seller"), and XXXXX VALLEY BANK, a California banking
corporation (the "Buyer").
WHEREAS, Six Rivers National Bank, a national banking association
("Six Rivers"), maintains a commercial banking office at 000 Xxxx Xxxxxx,
Xxxxxxxxxxx, Xxxxxxxxxx (sometimes referred to herein as the "Branch"); and
WHEREAS, Six Rivers and the Seller have entered into an Agreement and
Plan of Reorganization and Agreement dated as of October 3, 1999, as amended on
January 28, 2000, and on July 25, 2000 (the "Plan of Reorganization"), which
contemplates the merger of Six Rivers with and into NVB Interim National Bank,
an interim national banking association formed on August 2, 2000 at the
direction of the Seller ("NVB Interim National Bank"), with the result that Six
Rivers will thereafter be and operate as a wholly owned subsidiary of the
Seller; and
WHEREAS, the Buyer wishes to purchase certain of the assets and assume
certain of the liabilities of the Branch and the Seller is willing to sell and
transfer the same, subsequent to the consummation of the Plan of Reorganization,
upon the terms and subject to the conditions hereinafter set forth; and
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 is maintained at the Branch.
"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.
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"Agreement" means this Branch Purchase and Assumption 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 Furniture, Fixtures and Equipment, Cash on Hand,
safe deposit boxes located at the Branch (exclusive of the contents thereof),
Prepaid Expenses, Overdrafts, Loans 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
the Branch, 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 (if any) not assumed pursuant to
Sections 3.2(f) or 3.2(g), and (ii) 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 Premises Lease Agreement" means the real estate lease
agreement substantially in the form set forth on Schedule 1.1(a), to be executed
between the Seller, as lessor, and the Buyer, as lessee, with respect to the
Branch premises.
"Business Day" means a day on which the Branch is open for business
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
Branch.
"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
Branch prepared by the Seller as of the close of business at the Branch 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
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 Branch,
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).
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"Employee" means any employee employed on the Closing Date at the
Branch by the Seller or its subsidiaries or Affiliates, including without
limitation, those employees on medical leave, family leave, military leave or
personal leave under the Seller's policies. A current list of all Employees
(with a designation of those employees on medical leave, family leave, military
leave or personal leave, if any) is set forth on Schedule 5.1(g) to this
Agreement.
"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 San Francisco (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 Branch
prepared by the Seller as of the close of business at the Branch 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 items of furniture,
fixtures and equipment that are listed on Schedule 1.1(b) under the caption
"Sold to the Buyer." The Allocation with respect to such items is indicated on
Schedule 1.1(b). The 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 the Seller (Items Excluded from Sale)."
"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.
"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, and (iv) such other
liabilities of the Seller with respect to the operations of the Branch as may be
described on Schedule 1.1(c) (the "Other Liabilities"); excluding, however, any
Assumed Contracts disclosed by the Seller to the Buyer prior to the Closing Date
as to which any consents
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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.
"Loan Documents" means all documents executed or delivered in
connection with any Loan, including, without limitation, notes, deeds of trust,
security agreements, loan agreements, including building and loan agreements,
guarantees, sureties and insurance policies and all modifications, waivers and
consents relating to any of the foregoing.
"Loans" means the loans set forth in Schedule 1.1(d) hereto, adjusted
as provided in Section 3.1, and savings account loans and overdrafts extended at
the Branch and credit card loans secured by Assumed Deposits.
"Magnetic Tapes" shall mean the computer data storage tapes (which may
be in reel-to-reel or cartridge form) prepared by the Seller which contain the
information to be used for an automated conversion of the Assumed Deposits.
"Overdrafts" means only overdrafts in Transaction Accounts (other than
overdrafts extended pursuant to a formal line of credit or similar arrangement)
maintained at the Branch.
"Pre-Final Financial Statement" means the balance sheet of the Branch
prepared by the Seller as of the close of business at the Branch 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 the sum of the following: (i) XXX% times the
average over the thirty (30) Business Days preceding the Closing of the Assumed
Deposits located in the Branch, payable by the Buyer to the Seller as of the
Closing Date, plus (ii) XXX% times the average over the thirty (30) Business
Days preceding the first anniversary date of the Closing of the Assumed Deposits
located in the Branch (but in no event greater than the amount determined under
sub-paragraph (i) above), payable by the Buyer to the Seller within ten (10)
business days after such anniversary date.
"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 of the President and Chief Executive Officer of the Seller, having
made independent inquiry to all
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appropriate staff of the Seller (including branch officers at the Branch) and of
the President and Chief Executive Officer of Six Rivers who shall have made
appropriate inquiry of the staff of Six Rivers (but only as to information as to
the Branch).
"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 or variable 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, 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. Except as may be otherwise provided in this Agreement, it is the
intention of the parties that all liabilities and obligations relating to the
ownership and operation of the Branch prior to the Closing shall be the
responsibility of the Seller and all liabilities and obligations relating to the
ownership and operation of the Branch after the Closing shall be the
responsibility of the Buyer.
2.2 CLOSING.
(a) CLOSING DATE AND PLACE. The closing of the transactions provided
for herein (the "Closing") will be held at 9:00 a.m. at the offices of the
Seller, 000 Xxxx Xxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxx 00000, or at such other
time and location as may be mutually agreeable to the Buyer and the Seller. The
closing shall be held on a date (the "Closing Date") 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; PROVIDED, HOWEVER, that the parties shall agree in
any event upon a date for the Closing which shall be on or prior to November 30,
2000, 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), 3.2(b), 4.3 and the conditions set forth in Article
7:
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(A) The Buyer and the Seller shall execute and deliver the
Branch Premises Lease Agreement;
(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
Furniture, Fixtures and Equipment and for the Loans, servicing
released, including proper endorsements and assignments of the Loan
Documents;
(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 Assumed Contracts, if any;
(D) The Seller and the Buyer shall make the payment(s)
required by Section 3.1 in immediately available funds (such
payment(s) to be effected no later than 11:00 a.m.(Pacific Time));
(E) Following the date of this Agreement, at such times as
the Buyer shall reasonably request, the Seller shall make available to
the Buyer, in a format requested by the Buyer, such information as the
Buyer may reasonably request to complete the transfer and conversion
of records related to the Assumed Deposits and Loans from the Seller
to the Buyer. Initially such information shall be made available to
the Buyer in hard copy (printed); provided, however, in its sole
discretion the Buyer may request and the Seller shall provide such
information in the magnetic format maintained by the Seller, without
additional charge to the Buyer. At 6:00 a.m. on the morning following
the Closing Date, or at some other time mutually agreed to by the
parties, the Seller shall provide to the Buyer updated information as
of the Closing Date reflecting the balance and accrual information
necessary to make an accurate transfer and conversion of the Assumed
Deposits and Loans.
(F) The Seller shall provide the information referred to in
Section 2.2 (b) (i) (E) for use in a validation (pre-conversion) run
("Validation Run") on a mutually agreed upon date not less than thirty
(30) calendar days prior to the Closing Date, at no cost to the Buyer,
PROVIDED THAT, the parties may agree to conduct more than one
Validation Run.
(G) The Seller shall deliver to the Buyer copies of written
consents to the assignment of any Assumed Contracts requiring such
consent; and
(H) The Buyer shall pay to the Seller, and the Seller shall
pay to the Buyer, the amount of the interest which would accrue from
the date such payment is due at the Federal Funds Rate in effect on
the date such payment is due on any cash payment(s) required of the
Buyer and the Seller, respectively, under the terms of this Agreement.
(c) CLOSING COSTS; PRORATION. The Seller and the Buyer shall each pay
one-half (or such other percentages as may be standard custom and practice in
the relevant county) 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. On the Closing Date, (i) all personal
property taxes and current installments of special assessments levied or
assessed with
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respect to the Furniture, Fixtures and Equipment shall be prorated between the
Seller and the Buyer on the basis of the Closing Date and the fiscal year of the
appropriate taxing authority, and (ii) utilities and any other normal
maintenance and operating expenses relating to the Furniture, Fixtures and
Equipment shall be prorated between the Seller and the Buyer on the basis of the
Closing Date. Schedule 2.2(c) sets forth each item for which a prorated expense
is anticipated at Closing.
(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 the
Branch 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 provide the Buyer with appropriate information regarding equipment leases
or service and maintenance contracts which it believes are not legally
assignable, which contracts and leases are set forth separately on Schedule
2.2(d), 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 Branch for which the Buyer would have any
responsibility after the Closing.
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, and will not permit Six Rivers to,
permit the Branch 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, and will not permit Six Rivers
to, sell, transfer, mortgage, encumber or otherwise dispose of any of
the Assets except for the disposition of Assets in the ordinary course
of business;
(iii) The Seller will not, and will not permit Six Rivers
to, cause the transfer from the Branch to the Seller's other
operations of any Assumed Deposits; PROVIDED, HOWEVER, that the Seller
may transfer deposits to the Seller's other offices upon request of
the depositors; PROVIDED, FURTHER, that, the Seller shall not, and
will not permit Six Rivers to, offer interest rates or terms on any
category of Assumed Deposits which are not consistent with past
practice or which provide a yield greater than the yields then
currently offered by the Buyer and except in connection with a general
solicitation or general advertising not targeted specifically at the
depositors of the Assumed Deposits,
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the Seller will not solicit or encourage such depositors to transfer
their deposits to the Seller's other offices;
(iv) The Seller will, and will require Six Rivers to,
maintain the Furniture, Fixtures and Equipment substantially in
accordance with its normal practices, and keep such property in its
present condition, ordinary wear and tear excepted;
(v) The Seller shall, and will require Six Rivers to,
operate the Branch 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;
(vi) Prior to the Closing, the Seller shall, and will
require Six Rivers to, provide the Buyer and its attorneys,
independent accountants and agents, full access during normal business
hours and upon reasonable request, to and the opportunity to review
and inspect the Furniture, Fixtures and Equipment, and the books,
records, files, documentation and accounts of the Branch, and shall,
and will require Six Rivers to, allow the Buyer to make copies of such
materials (excluding regulatory examinations and correspondence to the
extent prohibited by applicable law or regulation); the Seller shall,
and will require Six Rivers to, furnish to the Buyer such reports and
compilations pertaining thereto as the Buyer shall reasonably request
from time to time; and the Seller shall, and will require Six Rivers
to, furnish to the Buyer all such other information pertaining to the
Assets and the Liabilities and the business of the Branch as the Buyer
may reasonably request; and the Seller shall use its best efforts to
cause its officers, employees, independent accountants and attorneys
to cooperate with the Buyer in its reasonable requests for
information. The Buyer shall treat as confidential all such
information in the same manner as the Buyer treats similar
confidential information of its own and shall use such information, or
cause it to be used, solely for the purposes of evaluating and
completing the transactions contemplated by this Agreement. The Buyer
and the Seller agree to comply with the terms and provisions of that
certain Confidentiality Agreement dated September 1, 2000, entered
into between the Buyer, the Seller and Six Rivers, and any
inconsistency between the terms and provisions of said Confidentiality
Agreement and the foregoing provisions shall be resolved in favor of
the terms and provisions contained in said Confidentiality Agreement.
In addition, the Seller shall, and will require Six Rivers to, provide
the Buyer reasonable access to the Branch during the thirty (30)
calendar day period immediately preceding the Closing Date for the
purpose of installing teller terminals and other equipment, PROVIDED
THAT the Buyer shall give the 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 Branch; and
(vii) Seller shall not grant, and will prohibit Six Rivers
from granting, any increase in the rate of compensation or in the
benefits payable or to become payable to any Employee over the levels
in effect as of the date hereof, other than any regularly
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scheduled increases, including bonuses, contemplated under contracts,
policies or programs existing on the date hereof or under any benefit
program generally applicable to Seller's employees. Any such changes
in compensation shall be disclosed to Buyer in writing within five (5)
days of such changes.
(b) BUYER'S ACCESS TO BRANCH PREMISES. The Buyer will indemnify,
defend, and hold the Seller harmless for, from and against any and all claims,
damages, costs, liabilities and losses (including mechanics' liens) arising out
of any entry by the Buyer or its agents, designees or representatives on the
Branch premises for purposes of the review, inspection and installation provided
for in Section 2.3(a)(vi) or for any other purpose. Without limiting the scope
of the foregoing, the Buyer also will restore the Furniture, Fixtures and
Equipment, books, records, files, and documentation of the Branch at its sole
cost and expense if the transactions contemplated by this Agreement do not
close. Until restoration is complete, the Buyer will take all steps necessary to
ensure that any conditions at the Branch created by any testing, review,
inspection, installation or other actions performed by or for the Buyer will not
unreasonably interfere with the normal operation of the Branch or create any
dangerous, unhealthy, unsightly or noisy conditions at the Branch. 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 Branch 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 make available the
required hard copy (printed) reports (and Magnetic Tapes, if applicable) in
connection with the procedures set forth in Section 2.2(b)(i)(E) and (F). 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. The Seller
will not migrate (transfer) existing PINs used for ATM cards to the Buyer.
2.4 EMPLOYEE CONSIDERATIONS.
(a) Subject to the Closing, the Seller shall terminate the employment
of all Employees, effective as of the close of business on the Business Day
immediately preceding the Closing Date, and, other than those employees
designated on Schedule 5.1(g), the Buyer shall offer, subject to Buyer's normal
new employee screening procedures, new employment with the Buyer to all
Employees, effective as of the Closing Date. Any Employee who elects to accept
employment with the Buyer will be an "at will" employee of the Buyer under the
same conditions as the Buyer's other employees. All Employees shall be offered
employment at base wages and salaries reasonably consistent with the wages and
salaries currently being paid by the Buyer to its other employees. To the extent
consistent with the 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 held with the Seller before the Closing Date.
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(b) All Employees who accept employment with the Buyer as of the
Closing Date shall be eligible to participate in the employee benefit plans and
other fringe benefits of the Buyer on the same basis as such plans and benefits
are offered to the other employees of the Buyer with comparable positions with
the Buyer. The Buyer shall credit such Employees for their length of service
with the Seller (or its predecessors) for all purposes under each employee
benefit plan and fringe benefit to be provided by the Buyer to such Employees,
based on information provided by the Seller. For purposes of this Section 2.4,
"employee benefit plan and fringe benefit" includes, without limitation, any
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 currently offered by the Buyer; provided, however, enrollment
in the Buyer's 401k plan will be made available to such Employees on the first
day of the next calendar quarter following the Closing Date.
(c) The 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, severance plans and all other plans with
respect to any Employee. The 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, severance plans or other plans.
(d) The Seller shall be solely responsible for payments for accrued
vacation not taken by Employees prior to the Closing Date and 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.
The Seller shall make cash payments to such Employees in accordance with
applicable law. No accrued vacation days or personal choice days shall be
transferred, or assumed by the Buyer, upon employment by the Buyer.
(e) The 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 the 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 the Buyer's employ
shall be determined under the Buyer's benefit plans, subject to the terms and
conditions of such plans.
(f) The 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 the Seller. The
Buyer shall be responsible for Continuation Coverage to any Employee in the
Buyer's employ (and each Employee's qualified beneficiaries) whose qualifying
event occurs after the Closing Date, to the extent required by law.
(g) The Seller agrees that it shall retain, consistent with its normal
employment practices, all liability and
10
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 Branch who
retire or whose employment is terminated prior to the Closing Date or who
otherwise do not become employees of the Buyer.
(h) For Employees who accept employment with the Buyer and who are, as
of the Closing Date, absent from work due to sickness or short-term disability,
the Seller shall have no further liability or obligation for short-term
disability benefits, sick pay or salary continuation to the extent attributable
to periods on and 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 may be provided by the Buyer under its standard policies
and this Agreement.
(i) 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 less than ten (10)
Business Days prior to the Closing). Such offers shall be made in person to each
Employee at a meeting at which representatives of the Buyer and the Seller are
present. The information provided to each Employee at such meeting shall include
a discussion of the Buyer's employee benefit plans and policies, together with a
written summary thereof. The Buyer shall be responsible for advising the
Employees of the details of any offers and terms of employment, and answering
any questions relating thereto, but the Seller shall be allowed to review and
approve, prior to its distribution, (i) any communication with the Employees
prior to the Closing Date, and (ii) any communication with such Employees after
the Closing Date which describes or refers to the Seller's employee benefit
plans and policies. With the written consent of Employees, the Buyer shall have
access to Employee personnel files of the Seller, including salary history,
training and certification, performance evaluations, and disciplinary histories.
(j) Prior to the Closing Date, the Buyer may train the Seller's
Employees who have accepted the Buyer's offers of employment, at a time mutually
agreed upon by the Buyer and the Seller, and, if requested by the Seller, 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 the 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 unpaid principal amount of the
11
Loans to be delivered at the Closing, (ii) the amount of accrued interest
receivable on all such Loans, (iii) the amount of Cash on Hand, (iv) the amount
of Prepaid Expenses at the Branch, (v) the amount of the Overdrafts, (vi) the
amount of any fees, charges or accrued interest receivable on such Overdrafts,
(vii) the amount of the Purchase Premium, and (viii) the Seller's pro rata
portion of XXX Deposit and Xxxxx Account trustee fees accrued on such accounts
held in the Branch through the Closing Date, less the amount of the safe deposit
key deposits referred to in Section 3.2(e). Except as otherwise agreed in
writing by the Buyer, the Loans to be delivered at the Closing shall not include
any loans listed on Schedule 1.1(c) that, as of the date of this Agreement or as
of the Closing Date, have been classified "substandard," "doubtful" or "loss" by
the Seller or any federal or state examining authority or that, as of the
Closing Date, are more than thirty (30) days past due (or, in the case of
consumer loans, are more than sixty (60) days past due); provided, HOWEVER, that
the Buyer and the Seller hereby undertake and agree to negotiate in good faith
to determine a mutually acceptable price at which the Seller would be willing to
sell and the Buyer would be willing to purchase all of such loans at the
Closing.
3.2 ADJUSTMENTS. Subject to the provisions of 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 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 the Buyer's rights of indemnification pursuant to
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 submit the matter to
Xxxxx-Xxxxx LLP, Sacramento, California, for mediation and resolution,
consistent with what, in such firm's professional judgment, is proper
bank accounting practice; and such Final Financial Statement shall be
modified by any such resolution, whereupon the Final Financial
Statement shall become
12
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 (any Asset not reasonably necessary for
the operation of the Branch or to the convenience of the customers of the
Branch) disclosed by the Seller on a list provided to the Buyer at the Closing
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;
(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 (calculated at the Buyer's applicable rate, if
lower than the Seller's applicable rate), 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) At the request of the Buyer following execution of this Agreement,
the Seller will provide to the Buyer a report of customer data for the Branch
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 Branch 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 the 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 Branch 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
13
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;
(g) Any items that were credited for deposit to or cashed against an
Assumed Deposit prior to the Closing and are returned unpaid on or 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 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,
to the extent of any balance in such Assumed Deposit(s), and shall repay that
amount to the Seller. If there are not sufficient funds in the Assumed Deposit,
the Buyer shall forward such Returned Item to the Seller and the Seller shall
take responsibility for collection of the unpaid amount. Any items of $1,000 or
less that were credited for deposit to or cashed against an Assumed Deposit at
the Branch prior to the Closing Date and are returned unpaid more than sixty
(60) days after the Closing Date will be the responsibility of the Buyer; any
items over $1,000 that were credited for deposit to or cashed against an Assumed
Deposit at the Branch prior to the Closing Date and are returned unpaid will be
the responsibility of the Seller; 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
(h) As soon as practicable, but in any event no later than thirty (30)
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
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.
14
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 the Branch 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 4.5.
(i) 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 after the Closing Date, which is not recovered by the Buyer after
the Closing Date in accordance with sub-paragraph (g) above.
ARTICLE 4.
ADDITIONAL COVENANTS
4.1 SELLER'S COVENANTS. The Seller (and, to the extent specifically
indicated below, the Buyer) agrees:
(a) To sign and deliver to the Buyer such additional agreements and
other documents, and to use reasonable efforts to do such other acts and things,
as may be reasonably necessary or convenient 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 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 Branch relating to the Seller's former operation of the Branch 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 Branch to be conducted in accordance with Section 2.3
above, including but not limited to causing Six Rivers and NVB Interim National
Bank, pursuant to the terms and provisions of the Plan of Reorganization, to use
reasonable efforts to do such acts and things as may be reasonably necessary or
convenient to complete the transactions contemplated by this Agreement;
(e) To remove all signage from the Branch at the expense of the Seller
on or before the Closing Date, it being understood that the Seller shall be
responsible for the repair of any damage caused by such removal and the Buyer
shall be responsible for installation of its signage at its expense;
15
(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 the Branch, 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 the 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,
at the time of the validation run as set forth in Section 2.2(b)(i)(F), a
listing of all of those automated clearing house and fed wire direct deposit
arrangements which are tied by agreement or other standing arrangement to
Assumed Deposits. 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;
(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 the Branch
(except for statutory waiting periods), and after the notice provided in Section
4.1(f) above, the Buyer will send appropriate notice 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
16
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 debits
from the Seller's routing transit number to the Buyer's routing transit number;
(j) The Seller agrees that following the Closing Date it will no
longer utilize the name "Six Rivers" to identify its banking operations or
products in the City of Weaverville;
(k) For a period of three (3) years following the Closing Date,
neither the Seller nor any Affiliate shall solicit the employment (including the
solicitation of any transfer of employment) of any former employee of the Seller
at the Branch who was an Employee when this Agreement was executed; PROVIDED,
HOWEVER, that nothing herein shall prevent the Seller or its Affiliates from
advertising generally any employment opportunities, or, except for a period of
one (1) year following the Closing Date, from hiring any employees of the Buyer
who seek employment without inducement from the Seller other than any such
employees whose employment has been terminated by the Buyer;
(l) For a period of two (2) years following the Closing Date, neither
the Seller nor any Affiliate shall solicit Seller's current customers in the
community served by the Branch by any means other than though Seller's bank-wide
general marketing efforts. The provisions of this Section 4.1(l) shall preclude
any special product development or campaigns designed for or focused on the
Weaverville or Trinity County markets, including campaigns offering different
interest rates at North Valley Bank's Weaverville Branch Office from those
otherwise available on a bank-wide basis;
(m) To pay, honor, discharge and perform all liabilities and
obligations in respect of the Assets and the Liabilities and any other
liabilities of the Branch arising, accruing or subsisting prior to the Closing
as to which the Seller is obligated pursuant to this Agreement, subject to
applicable indemnification rights of the Seller;
(n) 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 Seller if such approval is required by applicable
law, contract, the Seller's Articles of Incorporation or Bylaws, or otherwise;
17
(o) To enforce the Seller's rights and the obligations of Six Rivers
under the Plan of Reorganization in such a manner that the Seller at all times
will be in compliance with its obligations under this Agreement as if the Seller
currently owned and controlled the Branch;
(p) To use the Seller's best efforts to consummate the Plan of
Reorganization in a timely manner so that this Agreement may be performed on or
before the final date set forth in Section 2.2(a) of this Agreement;
(q) The Seller shall not cause or allow any conversion of the Deposits
and Loans to any person (other than the Buyer), nor shall the Seller cause or
allow Six Rivers to make any such conversion of the Deposits and Loans, prior to
the conversion of the Assumed Deposits and Loans to the Buyer as described in
Section 2.2(b)(i)(E); and
(r) The Seller shall prepare and deliver to the Buyer each of the
schedules to this Agreement (Schedules 1.1(a), (b), (c) and (d), Schedules
2.2(b)(i)(B) and (C), Schedules 2.2(c) and (d) and Schedule 5.1(g)) not later
than seven (7) Business Days after the date of this Agreement.
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 reasonable 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 Branch 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 shall use reasonable efforts 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 Branch 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) Except in connection with transition mailings during the first
year following the Closing, as consented to by the Seller in advance of such
mailing (such consent not to be unreasonably withheld), 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,
18
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;
(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 ss.
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;
(f) As soon as practicable, after the receipt of all regulatory
approvals required by Sections 7.1(c) and 7.2(c), 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 the 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 the Branch 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); and
(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 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, and (b) the Buyer agrees that it shall provide reasonable
assistance to the Seller to obtain such consents.
4.4 VALUATION OF THE ASSETS. The 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 the Seller
hereby disclaims any representations or warranties made by the Seller as to
their condition, value, nature or amount except those made in this Agreement.
19
4.5 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 4.5 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 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.
4.6 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.
4.7 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.
4.8 EMINENT DOMAIN OR TAKING. If proceedings under a power of eminent
domain relating to the Branch or any part thereof are commenced prior to the
Closing Date, the Seller will promptly inform the Buyer in writing.
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(a) If such proceedings involve the taking of all of or a material
interest in the Branch, the Buyer may elect to terminate this Agreement by
notice in writing sent within ten (10) calendar days of the Seller's written
notice to the Buyer, in which case neither party will have any further
obligation to or rights against the other with respect to the 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 Branch, or if the Buyer does not elect to terminate
this Agreement as to the Branch, this transaction will be consummated as
described herein, and, subject to encumbrances, if any, relating to the Branch,
any award or settlement payable with respect to such proceeding will be paid or
assigned to the Buyer on the Closing Date.
(c) If the Closing contemplated by this Agreement is not consummated
for any reason, the Buyer will have no claim to any condemnation award or
settlement with respect to the Branch.
4.9 DAMAGE OR DESTRUCTION. Prior to the Closing Date, as between the
Seller and the Buyer, the entire risk of loss or damage by earthquake, flood,
landslide, fire or other casualty is borne and assumed by the Seller.
ARTICLE 5.
REPRESENTATIONS AND WARRANTIES
5.1 SELLER'S REPRESENTATIONS AND WARRANTIES. The Seller (for purposes
of this Section 5.1, the term "Seller" means the Seller on its own behalf and in
reliance upon the representations and warranties of Six Rivers provided to the
Seller in the Plan of Reorganization and confirmed in a certificate delivered by
Six Rivers prior to the execution of this Agreement and updated as of Closing in
a form satisfactory to Buyer) 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):
(a) The Seller is a corporation, duly organized and in good standing
under the laws of the State of California;
(b) The Seller has the requisite power and authority to execute,
deliver and perform this Agreement and to consummate 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
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conflict with the Articles of Incorporation 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 Branch, including
without limitation equipment leases and service and maintenance contracts,
consulting contracts, agency agreements and licensing agreements (including
equipment leases and service and maintenance contracts which the Seller does not
believe are assignable);
(e) 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, 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) Other than certain consulting fees payable to Xxxxxxx Lynch,
Pierce, Xxxxxx & Xxxxx Inc., 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;
(g) Schedule 5.1 (g) to this Agreement lists all Employees and states
for each such individual his or her position, dates of employment with Seller,
present compensation and status of any medical leave, family leave, military
leave or personal leave under the Seller's policies;
(h) A certificate of occupancy or equivalent is in effect permitting
the occupancy of the Branch for its present use. The Seller holds all licenses
materially required in connection with the use or occupancy of the Branch;
(i) None of the Loans is presently serviced by third parties and,
prior to the Closing, none will be serviced by third parties, and there are no
obligations, agreements or understandings whatsoever that could result in any
Loan becoming subject to any such third party servicing, and Seller will not
undertake any such obligation or enter into any such agreement or understanding;
(j) With respect to each Loan transferred to Purchaser:
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(i) Such Loan was solicited, originated and currently exists
in material compliance with all applicable requirements of federal,
state, and local laws and regulations promulgated thereunder;
(ii) Each note evidencing a Loan and any related security
instrument (including, without limitation, any guaranty or similar
instrument) constitutes a valid, legal or binding obligation of the
obligor thereunder, enforceable in accordance with their terms,
subject as to enforcement to bankruptcy, insolvency and other laws of
general applicability relating to or affecting creditors' rights and
to general principles of equity; and all actions necessary to perfect
any related security interest have been duly taken;
(iii) The terms of the Loan Documents with respect to all
Loans are consistent in all material respects with the terms of the
internal loan approval for such Loan and there has been no material
modification to or waiver of such terms except as evidenced in
documents executed by the parties and included in the Loan Documents;
(iv) No claims or defenses to the enforcement of such Loan
have been asserted and the Seller is aware of no acts or omissions
that would give rise to any claim or right of rescission, setoff,
counterclaim or defense by borrowers, obligor or any other person
obligated to perform under any related Loan Documents;
(v) On the Closing Date, the Buyer shall not be obligated to
make payment of principal or interest on a Loan which is more than
thirty (30) days past due (or, in the case that such Loan is a
consumer loan, more than sixty (60) days past due) and, to the best
knowledge of the Seller, there will be no other default, by any
borrower, obligor or any other person obligated to perform under any
related Loan Document with respect to such Loan, nor of any conditions
that with respect to such Loan, nor of any conditions that with notice
or lapse of time or both, would constitute a default, breach,
violation or event permitting acceleration under the terms of such
Loan; and
(vi) Such Loan was made substantially in accordance with Six
Rivers' standard underwriting and documentation guidelines as in
effect at the time of its origination and has been administered
substantially in accordance with Six Rivers' standard loan servicing
procedures as in effect from time to time;
(k) At the time of the most recent regulatory evaluation of the
Seller's performance under the Community Reinvestment Act (the "CRA"), the
Seller's record of performance was deemed to be "outstanding" or "satisfactory",
and no proceedings are pending or to the knowledge of the Seller, threatened,
that would result in a change in such evaluation. The Seller 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; and
(l) The Seller has no knowledge of any pending or suspected conditions
or circumstances related to the operations of the Branch or the general economic
conditions of the community that is served by the Branch that if they
materialize would result in an adverse change which may materially effect the
Assets or Liabilities.
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5.2 BUYER'S REPRESENTATIONS AND WARRANTIES. The Buyer represents and
warrants to the Seller that, as of the date of this Agreement:
(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 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;
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(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; and
(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.
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 Branch.
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 Branch
prior to the Closing Date.
6.3 LIMITATION OF WARRANTIES. Except as may be expressly represented
or warranted by Seller in this Agreement, the Seller makes no representation or
warranty whatsoever with regard to any Asset, any Liability or the business or
operation of any of the Branch, 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 OF THIS
AGREEMENT. The 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 of this Agreement.
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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 Branch as it has deemed
appropriate;
(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;
(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; and
(f) The transactions contemplated by the Plan of Reorganization shall
have been consummated.
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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 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 the Branch, 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
Branch, 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 Branch
or the Buyer, or on 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;
(e) The transactions contemplated by the Plan of Reorganization shall
have been consummated;
(f) Not later than thirty (30) days after the date of this Agreement,
the Buyer shall have notified the Seller that its preliminary due diligence
review of the Branch has been completed to its satisfaction;
27
(g) Prior to the Closing, the Buyer shall have identified a manager
for the Branch PROVIDED THAT, the Buyer shall provide the Seller with notice of
such fact not less than ten (10) Business Days prior to the Closing Date; and
(h) The amount of the Assumed Deposits subject to the Purchase Premium
calculation at Closing is less than $15,500,000.
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 termination pursuant to this Section 8.1(d) shall not relieve the
breaching party of liability for such breach or otherwise; and
(e) By the Buyer within three (3) Business Days after receipt by the
Buyer of all schedules described in Section 4.1(q).
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 Section 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, 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 either party to this Agreement, such party shall be fully liable
for any and all damages, costs and expenses (including, but not limited
28
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. 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.
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 Branch 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; (ii) any misrepresentation or breach of
representation, warranty, covenant, agreement or other material term 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 arising or related to any alleged act or inaction
occurring prior to the Closing (except as may be the result of any action or
inaction of the Buyer). 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 Branch 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
29
this Agreement, the Schedules hereto or the Buyer's officer's certificate. 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 LIMIT ON INDEMNITIES. 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 the Branch unless and until
the aggregate amount of all such losses sustained by the indemnified party with
respect to the Branch shall exceed $10,000, in which event the indemnifying
party shall be liable only for such losses in excess of $10,000. The minimum
$10,000 amount shall not apply to amounts which one party may be required to pay
to the other under Sections 3.2, 4.1(g), 4.1(h), 4.5 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 any other basis exceed the amount of the Initial
Base Amount. IN ADDITION, THE INDEMNIFYING PARTY SHALL HAVE NO OBLIGATIONS TO
THE OTHER PARTY 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. On the
Closing Date, all real and personal property taxes and current installments of
special assessments levied or assessed with respect to 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
30
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.
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 Branch, all oral or written notices or general communications
to employees of the Branch, 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:
North Valley Bancorp
000 Xxxx Xxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxx
Fax: (000) 000-0000
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With a copy to:
Coudert Brothers
000 Xxxxxxx Xxxx., 0xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxxx, Esquire
Fax: (000) 000-0000
If to the Buyer:
Xxxxx Valley Bank
000 Xxxxx Xxxxxxxx
Xxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxx
Fax: (000) 000-0000
With a copy to:
McCutchen, Doyle, Xxxxx & Xxxxxxx, LLP
0 Xxxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxx, Esquire
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 certain Confidentiality Agreement between the
parties hereto which was executed as of September 1, 2000 (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.
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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. These restrictions, however, shall not apply to any such
information (i) that becomes public knowledge 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.
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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.
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:
NORTH VALLEY BANCORP
By /s/ X. X. ("XXXX") XXXXX, JR.
----------------------------------------
X. X. ("Xxxx") Xxxxx, Jr.
Secretary
BUYER:
XXXXX VALLEY BANK
By /s/ XXXXXXX X. XXXXX
-------------------------------------
Xxxxxxx X. Xxxxx
President and Chief Executive Officer
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