Exhibit 10.1
BRANCH PURCHASE
AND
ASSUMPTION AGREEMENT
by and among
ALERUS FINANCIAL, NATIONAL ASSOCIATION,
BNC NATIONAL BANK
and its parent,
BNCCORP, Inc.
Dated as of the 26th day of July, 2002
TABLE OF CONTENTS
1. PURCHASE AND ASSUMPTION..........................................1
1.01 Purchase and Sale of Assets.............................1
1.02 Transfer of Assets......................................1
1.03 Acceptance and Assumption...............................3
1.04 Excluded Assets.........................................5
1.05 Payment of Funds........................................5
2. CONDUCT OF THE PARTIES PRIOR TO CLOSING..........................7
2.01 Covenants of Seller.....................................7
2.02 Covenants of Buyer.....................................11
2.03 Covenants of All Parties...............................12
3. REPRESENTATIONS AND WARRANTIES..................................12
3.01 Representations and Warranties of Seller...............12
3.02 Representations and Warranties of Parent...............17
3.03 Representations and Warranties of Buyer................17
3.04 No Additional Representations and Warranties...........18
4. EMPLOYEES.......................................................19
4.01 Employees..............................................19
4.02 Employee Retention.....................................20
4.03 Employee Training......................................20
5. CONDITIONS PRECEDENT TO CLOSING.................................20
5.01 Conditions to Seller's Obligations.....................20
5.02 Conditions to Buyer's Obligations......................21
6. CLOSING.........................................................22
6.01 Closing and Closing Date...............................22
6.02 Seller's Actions at Closing............................22
6.03 Buyer's Actions at Closing.............................24
6.04 Methods of Payment.....................................24
6.05 Effectiveness of Closing...............................25
7. CERTAIN TRANSITIONAL MATTERS....................................25
7.01 Transitional Action by Buyer...........................25
7.02 Transitional Action by Seller..........................27
7.03 Overdrafts and Transitional Action.....................30
7.04 ATMs and Debit Cards...................................30
7.05 Effect of Transitional Action..........................31
8. GENERAL COVENANTS AND INDEMNIFICATION...........................31
8.01 Confidentiality Obligations of Buyer...................31
8.02 Confidentiality Obligations of Selle...................32
8.03 Indemnification........................................32
8.04 Solicitation of Customers by Seller and Parent
After the Closing................................35
8.05 Further Assurances.....................................35
8.06 Information After Closing..............................35
8.07 Survival of Covenants..................................36
8.08 Individual Retirement Accounts.........................36
8.09 Covenant Not to Compete................................36
8.10 Exclusivity............................................36
8.11 Access to Information..................................36
9. TERMINATION.....................................................37
9.01 Termination by Mutual Agreement........................37
9.02 Termination by Seller..................................37
9.03 Termination by Buyer...................................37
9.04 Effect of Termination..................................37
10. MISCELLANEOUS PROVISIONS........................................37
10.01 Expenses...............................................37
10.02 Certificates...........................................38
10.03 Notices................................................38
10.04 Parties In Interest; Amendment.........................38
10.05 Headings...............................................38
10.06 Terminology............................................39
10.07 Press Releases.........................................39
10.08 Entire Agreement.......................................40
10.09 Governing Law..........................................40
10.10 Counterparts...........................................40
SCHEDULES
Schedule 1.01 - Description of Branch Real Estate
Schedule 1.02(b) - Tangible Assets
Schedule 1.02(c) - Safe Deposit Leases
Schedule 1.02(e) - Prepaid Expenses
Schedule 1.02(f) - Branch Loans
Schedule 1.02(f)(ii) - Excluded Loans
Schedule 1.02(h) - Assumed Contracts
Schedule 1.02(i) - Real Property Leases
Schedule 1.03(b) - Deposit Accounts
Schedule 1.04(d) - Excluded Assets
Schedule 1.05(b) - Allocation of Assets
Schedule 3.01(c) - Consents of Seller
Schedule 3.02(c) - Consents of Parent
Schedule 3.01(m) - Form of Deposit Account Agreement
Schedule 3.01(i) - Insurance Policies
Schedule 3.01(q)(iii) - Branch Loans in Default or Past Due
Schedule 3.03(c) - Consents of Buyer
Schedule 4.02 - Form of Employee Retention Program
Schedule 5.01(b) - Form of Certification of Buyer
Schedule 5.02(b) - Form of Certification of Seller
Schedule 5.02(c) - Form of Certification of Parent
Schedule 6.02(h) - Form of Xxxx of Sale, Assignment and Assumption
Schedule 6.04(a) - Form of Preliminary Closing Statement
Schedule 6.04(b) - Form of Final Closing Statement
BRANCH PURCHASE AND ASSUMPTION AGREEMENT
This Branch Purchase and Assumption Agreement (the "Agreement"), made and
entered into this 26th day of July, 2002, by and between Alerus Financial,
National Association, with its principal office located at 000 Xxxxxx Xxxxxx,
Xxxxx Xxxxx, Xxxxx Xxxxxx (the "Buyer"), BNC National Bank, with its principal
office located at 000 Xxxx Xxxx, Xxxxxxxx, Xxxxx Dakota (the "Seller") and
BNCCORP, Inc., a Delaware corporation and corporate parent of the Seller (the
"Parent").
RECITALS
WHEREAS, Buyer desires to purchase and assume from Seller, and Seller
desires to sell and assign to Buyer, certain assets and liabilities associated
with Seller's banking office located at 0000 00xx Xxxxxx XX, Xxxxx, Xxxxx Xxxxxx
00000 (the "Branch").
WHEREAS, Buyer and Seller propose to apply to the appropriate regulatory
authorities for permission to effect the purchase and sale of the Branch and for
such other requisite approvals as may be necessary for consummation of the
transactions contemplated by this Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the promises and for other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, Buyer and Seller hereby agree as follows:
1. PURCHASE AND ASSUMPTION.
1.01 Purchase and Sale of Assets. At the Closing, as defined in Section
6.01 hereof, Buyer shall purchase and acquire, and Seller shall sell
and assign, the real estate as specifically described on Schedule 1.01
and the other assets described in Section 1.02 hereof (collectively,
excluding the Excluded Assets, the "Assets") all of which are used in
and/or relate to the business conducted by Seller at the Branch. The
purchase of the Assets and assumption of liabilities as described in
Sections 1.03(b), 1.03(c), 1.03(d) and 1.03(e) (collectively, the
"Assumed Liabilities") provided for herein are sometimes referred to
herein as the "Acquisition."
1.02 Transfer of Assets. Subject to the terms and conditions of this
Agreement, Seller shall assign, transfer, convey and deliver to Buyer,
on and as of the Closing on the Closing Date, as defined in Section
6.01 hereof, the Assets, which shall include the following:
(a) Branch Real Estate. All of Seller's right, title and interest in
and to the real estate located at 0000 00xx Xxxxxx XX, Xxxxx,
Xxxxx Xxxxxx 00000 on which the Branch is situated, which real
estate is specifically described on Schedule 1.01 attached
hereto, together with all of Seller's rights in and to all
improvements and fixtures thereon; and all easements, rights,
privileges and appurtenances associated therewith (the "Branch
Real Estate");
(b) Furniture and Equipment. All of Seller's right, title and
interest in and to furniture, furnishings, equipment and tangible
personal property (the "Tangible Assets") located at the Branch
as of the Closing Date, including, without limitation, that
listed in Schedule 1.02(b) attached hereto and incorporated
herein by reference;
(c) Safe Deposit Business. All right, title and interest of Seller in
and to the safe deposit business, including, but not limited to,
the safe deposit leases listed on Schedule 1.02(c) (subject to
the allocation of safe deposit rental payments as provided in
Section 1.03(c)(ii) hereof) conducted at the Branch as of the
close of business on the Closing Date;
(d) Cash on Hand. All cash on hand at the Branch as of the close of
business on the Closing Date including vault cash, xxxxx cash,
ATM cash and tellers' cash;
(e) Prepaid Expenses. All prepaid expenses listed on Schedule
1.02(e), prorated as of the close of business on the Closing
Date, but only to the extent attributable to the Assets sold,
assigned or transferred to Buyer by Seller pursuant to this
Agreement and only to the extent arising by reason of Buyer's use
or ownership of such Assets after the close of business on the
Closing Date. Any and all prepaid expenses incurred by Seller
with respect to the Branch that individually exceed $500
subsequent to the date of this Agreement, shall be subject to the
prior written consent of Buyer;
(f) Branch Loans. All right, title and interest in and to all those
loans, including accrued but unpaid interest thereon through the
Closing Date attributable to the Branch (the "Branch Loans"),
which (i) are set forth on Schedule 1.02(f); provided however,
that the Branch Loans shall not include any loan set forth on
Schedule 1.02(f) that is repaid in full as to principal and
interest prior to the Closing Date, (ii) shall not include any
loan set forth on Schedule 1.02(f)(ii), (iii) are hereafter
offered to Buyer for purchase, Buyer has had an opportunity to
review and Buyer has agreed in writing to purchase, and (iv) are
automatically created as the result of an overdraft of a Deposit
Account pursuant to a pre-approved overdraft protection program
offered by Seller (except for those overdraft protection loans
which are charged to credit card accounts not transferred to the
Buyer hereunder). A final listing of specific loans included in
the Branch Loans will be provided to Buyer prior to Closing;
(g) Records of the Branch. All original records and documents related
to the Assets or Assumed Liabilities which are maintained by
Seller and available for delivery to Buyer in whatever form
presently maintained by Seller, including, but not limited to,
those relating to the Deposit Accounts and the Branch Loans;
(h) Contracts or Agreements. All of Seller's right, title and
interest in and to the maintenance and service agreements related
to the Branch, as listed on Schedule 1.02(h) annexed hereto and
made a part hereof (the "Assumed Contracts");
(i) Real Property Leases. All of Seller's right, title and interest
in and to the real property leases attributed to the Branch Real
Estate, as listed on Schedule 1.02(i) annexed hereto and made a
part hereof (the "Real Property Leases"); and
(j) Branch Goodwill. All goodwill of Seller relating to the operation
of the Branch (the "Branch Goodwill").
1.03 Acceptance and Assumption. Subject to the terms and conditions of this
Agreement, on and as of the Closing on the Closing Date, Buyer shall:
(a) Assets. Receive and accept all of the Assets assigned,
transferred, conveyed and delivered to Buyer by Seller pursuant
to this Agreement, including those identified in Section 1.02
above.
(b) Deposit Liabilities. Assume Seller's obligations to pay the
principal amount of, together with accrued and unpaid interest as
of the close of business on the Closing Date on, all Deposit
Accounts, and thereafter, in accordance with the respective
deposit agreements for the Deposit Accounts, pay or perform the
obligations arising under such deposit agreements after the
Closing (the "Deposit Liabilities"). The deposit accounts of
Seller attributable to the Branch as of the close of business on
the Closing Date and referred to in the immediately preceding
sentence (hereinafter the "Deposit Accounts") consist of the
following accounts: savings, non-interest bearing demand, money
market, and NOW accounts, Individual Retirement Accounts for
which Seller has not received, on or before the Closing Date, the
written advice from the account holder of such account holder's
objection or failure to accept Buyer as successor custodian or
trustee ("IRAs") and certificates of deposit. Attached as
Schedule 1.03(b) hereto is a true and correct preliminary listing
of Deposit Accounts by category, prepared as of a date within one
(1) day prior to the date of this Agreement, listing the amount
of all deposits and the interest rates and maturity dates
associated with such deposits. A final listing of the Deposit
Accounts, by category, will be provided to Buyer as of the close
of business one day prior to the Closing Date.
(c) Safe Deposit Business Liabilities. Assume, and thereafter fully
and timely perform and discharge, in accordance with their
respective terms, all of the liabilities and obligations of
Seller arising after the Closing Date with respect to:
(i) the safe deposit leases of the Branch listed on Schedule
1.02(c) and sold, assigned or transferred to Buyer by Seller
pursuant to this Agreement; and
(ii) the safe deposit business of the Branch related to the
maintenance of all necessary facilities for the use of safe
deposit boxes by the renters thereof during the periods for
which such persons have paid rent therefor in advance to
Seller, subject to the agreed allocation of such rents,
which allocation shall be satisfied in full by Seller paying
to Buyer, in the manner specified in Section 6.04 hereof,
the amount of rental payment received by Seller for each
such safe deposit box attributable to and prorated to
reflect the period from and after the Closing Date, subject
to the provisions of the applicable leases or other
agreements relating to such boxes.
(d) Real Property Leases. Assume and thereafter fully and timely
perform and discharge, in accordance with their respective terms,
all of the liabilities and obligations of Seller arising after
the Closing Date with respect to the Real Property Leases listed
on Schedule 1.02(i) to this Agreement and sold, assigned or
transferred to Buyer by Seller pursuant to this Agreement. Rent
paid in advance to Seller shall be subject to the agreed
allocation of such rents, which allocation shall be satisfied in
full by Seller paying to Buyer, in the manner specified in
Section 6.04 hereof, the amount of rental payment received by
Seller for each such Real Property Lease attributable to and
prorated to reflect the period from and after the Closing Date,
subject to the provisions of the applicable Real Property Leases.
(e) Assumed Contracts. Assume and thereafter fully and timely perform
and discharge, in accordance with their respective terms, all of
the liabilities and obligations of Seller arising after the
Closing Date with respect to the Assumed Contracts listed on
Schedule 1.02(h) to this Agreement and sold, assigned or
transferred to Buyer by Seller pursuant to this Agreement.
(f) Other Liabilities. Except for the Assumed Liabilities, Buyer
shall not assume any liabilities or obligations of Seller,
Parent, or any affiliate thereof. Seller shall be solely liable
for all liabilities and obligations, known or unknown, fixed or
contingent, arising from operation of the Branch business or
ownership of the Assets and any other incidents and occurrences
in each case, arising, relating to or incurred prior to the
Closing Date, whether or not reflected on its books and records.
1.04 Excluded Assets. Notwithstanding anything contained in this Agreement
to the contrary, the following assets (collectively, the "Excluded
Assets") are expressly excluded from the purchase and sale
contemplated hereby:
(a) the names "BNC," "BNCCORP," "BNC National Bank" and any and all
deviations thereof;
(b) any logos, service marks or trademarks, advertising material,
slogans, letterhead, Internet domain names, electronic mail
addresses or any similar items used by Seller in connection with
its business, whether or not such is or was copyrighted or
registered; provided, however, that Buyer shall have a reasonable
period of time to remove or transfer any of the foregoing items
from the Branch Real Estate; and
(c) all computer software used by Seller in connection with its
business; and
(d) the assets listed on Schedule 1.04(d).
1.05 Payment of Funds. Subject to the terms and conditions hereof, at the
Closing:
(a) Consideration. In consideration of Seller's sale of the Assets
and its other agreements herein, on the Closing Date, Buyer shall
make available and transfer to Seller, in the manner specified in
Section 6.04 hereof, funds equal to the sum of:
(i) the amount of cash on hand at the Branch as of the close of
business on the Closing Date;
(ii) $5,297,102 for the Branch Real Estate, Tangible Assets and
Branch Goodwill being transferred to Buyer;
(iii) the amount of prepaid expenses described in Section 1.02(e)
of this Agreement, prorated as of the close of business on
the Closing Date;
(iv) an amount equal to 100.7% of the aggregate outstanding
principal amount of the Branch Loans as of the close of
business on the Closing Date (such amount over 100% of the
foregoing, or 0.7%, is hereinafter referred to as the
"Branch Loan Premium"), plus an amount equal to accrued and
unpaid interest on the Branch Loans through the Closing
Date; provided, however that the Branch Loan Premium shall
not be paid on any Branch Loans automatically created as the
result of an overdraft of a Deposit Account pursuant to a
pre-approved overdraft protection program offered by Seller;
and
(v) an amount equal to the sum of the following, computed as of
the close of business on the Closing Date (the "Deposit
Premium"):
(A) the amount of Deposit Accounts categorized as savings
accounts, excluding accrued and unpaid interest
thereon, times 0.0575;
(B) the amount of Deposit Accounts categorized as NOW
accounts, excluding accrued and unpaid interest
thereon, times 0.0475;
(C) the amount of Deposit Accounts categorized as money
market accounts, excluding accrued and unpaid interest
thereon, times 0.0150; and
(D) the amount of Deposit Accounts categorized as
non-interest bearing demand accounts times 0.0675;
less an amount equal to the aggregate balance of all Deposit
Accounts (including interest posted or accrued to such
accounts as of the close of business on the Closing Date).
In the event that the aggregate balance of all Deposit
Accounts (including interest posted or accrued to such
accounts as of the close of business on the Closing Date)
should be in excess of the sum of items (i) through (v)
above, the full amount of such excess shall constitute an
amount due from Seller to Buyer, and shall be paid to Buyer
in the manner specified in Section 6.04 hereof. The Buyer
and Seller shall execute a Preliminary Settlement Statement
at the Closing and a Final Settlement Statement post-closing
in accordance with Section 6.04 hereof.
(b) Allocation. The consideration set forth in Section 1.05(a)
shall be allocated among the various assets and rights
acquired by Buyer hereunder consistent with Schedule
1.05(b). The parties each agree to make such allocations in
accordance with the provisions of Section 1060(a) of the
Internal Revenue Code of 1986, as amended (the "Code"), and
to file Internal Revenue Service Forms 8594 and any other
IRS forms and schedules thereto as may be required to be
filed under Code Section 1060, unless and to the extent that
the parties shall mutually agree that Code section does not
apply to the transactions contemplated by this Agreement.
(c) Reimbursement and Proration of Certain Income and Expenses.
Except as otherwise specifically provided in this Agreement,
items of income and expense shall be prorated as of 11:59
p.m., Fargo, North Dakota, time, on the Closing Date, and
settled between Seller and Buyer on the Closing Date,
whether or not such adjustment would normally be made as of
such time. Items of proration will be handled at Closing as
an adjustment to the amounts paid pursuant to Section 1.05
unless otherwise agreed by the parties hereto.
For purposes of this Agreement, items of proration and other
adjustments shall include: (i) real and personal property
taxes and assessments; (ii) leasehold income; (iii) accrued
and unpaid interest included on Deposit Liabilities; (iv)
accrued and unpaid interest on Branch Loans; (v) telephone,
electric, gas, water and other utility services (to the
extent it is not possible to transfer such services into the
name of Buyer as of the Closing Date); and (vi) the prepaid
expenses identified in Schedule 1.02(e).
(d) Expenses Relating to Real Property. The transfer (or
conveyance) fees relating to the Branch Real Estate and the
costs, fees and expenses of all title commitments, title
guaranties and title examinations relating to the
procurement of the Title Commitments related to the Branch
Real Estate referred to in Sections 2.01(b) and 5.02(g)
herein, shall be allocated to, and shall be borne, solely
and exclusively by Seller. The costs, fees and expenses
relating to the premiums for all title insurance policies
(net of the costs of all title commitments, guaranties and
examinations), recording costs and other similar costs, fees
and expenses, if any, relating to the sale and transfer of
the Branch Real Estate shall be allocated to, and shall be
borne, solely and exclusively, by Buyer. Seller shall
reimburse Buyer at the Closing for all the costs, fees and
expenses allocated to Seller pursuant to this Section
1.05(d) but paid by Buyer, and Buyer shall reimburse Seller
at the Closing for all of the costs, fees and expenses
allocated to Buyer pursuant to this Section 1.05(d) but paid
by Seller in the manner specified in Section 6.04 herein.
2. CONDUCT OF THE PARTIES PRIOR TO CLOSING.
2.01 Covenants of Seller. Seller hereby covenants to Buyer that, from the
date hereof until the Closing, Seller will do or cause the following
to occur:
(a) Operation of the Branch. Seller shall continue to operate the
Branch in a manner substantially equivalent to that manner and
system of operation employed immediately prior to the date of
this Agreement.
Notwithstanding the foregoing and except as may be required to
obtain the required authorizations referred to in Section 2.03 of
this Agreement, between the date of this Agreement and the
Closing Date, and except as may be otherwise required by a
regulatory authority, Seller shall not, without the prior consent
of Buyer, which consent shall not be unreasonably withheld or
delayed:
(i) transfer, assign, encumber or otherwise dispose of or enter
into any contract, agreement or understanding to transfer,
assign, encumber or otherwise dispose of any of the Assets
except, or pursuant to the terms of this Agreement; or
(ii) cause the Branch to transfer to Seller's other operations
any deposits other than deposits securing loans made by
Seller which are not Branch Loans, except in the ordinary
course of business at the unsolicited request of depositors,
or cause any of Seller's other operations to transfer to the
Branch any deposits, except in the ordinary course of
business at the unsolicited request of depositors;
(iii) fail to maintain the Tangible Assets in good operating
condition (ordinary wear and tear excepted) and repair or
invest in any Tangible Assets on behalf the Branch, except
for replacements of furniture, furnishings and equipment and
normal maintenance and refurbishing purchased or made in the
ordinary course of business;
(iv) enter into or amend any contract relating to the Branch,
other than incurring Deposit Liabilities and entering into
Branch Loans and safe deposit agreements in the ordinary
course of business and in conformity with the other
provisions of this Section 2.01;
(v) hire (other than to replace a departing employee and/or to
bring the number of employees at the Branch to normal
staffing levels), transfer, reassign or terminate any
employee of the Branch, increase the compensation of any
employee of the Branch, or promote any of the employees of
the Branch except pursuant to and consistent with Seller's
customary procedures and policies;
(vi) offer interest rates or terms on any category of Deposit
Accounts at the Branch which are inconsistent with either
the Seller's normal operating practices within a fifty mile
radius of the Branch or those practices in effect at May 31,
2002, except as required by changes in applicable law or
industry wide practices; and
(vii) enter into any type of real property lease with respect to
the Branch.
(b) Deliveries Related to the Branch Real Estate.
(i) Title Insurance Commitments. Within 15 business days after
execution of this Agreement, Seller shall, at its expense,
cause to be prepared and delivered to Buyer a commitment for
an American Land Title Association ("ALTA") Owner's Policy
Form B-1970 title insurance policy by Chicago Title
Insurance Company covering the Branch Real Estate, in form
reasonably acceptable to Buyer. The commitment shall include
endorsements deleting or limiting to the reasonable
satisfaction of Buyer the standard exceptions and agreeing
to provide affirmative insurance with respect to zoning.
(ii) Survey. Within 15 business days after the execution of this
Agreement, Seller shall, at its expense, furnish Buyer with
a current, accurate survey of the Branch Real Estate,
showing access, the location of all points and lines
referred to in the legal description, the location and
dimension of all easements, buildings, improvements, parking
spaces, encroachments, if any, and utility lines to their
point of connection with public systems, together with the
legal description of the real estate, certified to Buyer and
to Chicago Title Insurance Company by a registered land
surveyor acceptable to Buyer and to the title insurance
company, and otherwise in a form acceptable to Buyer and to
the title insurance company.
(iii) Title Objections. Buyer shall examine the commitment
provided pursuant to Section 2.01(b)(i) and the survey
provided pursuant to Section 2.01(b)(ii) hereof, and shall
be allowed 10 days after receipt of the last thereof to
notify Seller in writing of any objections to title or
survey matters affecting the property. Buyer shall not
object to any Permitted Exceptions. If any objections to
title are made, Seller shall have the right, but not the
obligation, to cure such objections within 20 business days
(or within such longer period of time as is reasonable in
light of the nature of such objections) following receipt of
written notice thereof from Buyer. Unless Buyer waives its
objections, the obligations of the parties to consummate the
Acquisition pursuant to Section 6.01, if necessary, shall be
extended through the end of such 20-day period or until such
earlier date as the objections have been cured. If Seller
does not cure such objections within such period, then Buyer
shall have the right and option to either (a) terminate this
Agreement, (b) waive its objections (c) withhold from the
amount set forth in Section 1.05(a)(ii) an amount sufficient
to discharge at the Closing any mortgage, judgment or other
monetary lien objected to by Buyer or (d) allow Seller
additional time in which to cure such objections, in which
case the obligations of the parties to consummate the
Acquisition pursuant to Section 6.01 shall be appropriately
further extended. Seller shall cooperate with Buyer both
before and after the Closing in connection with the efforts
of Buyer, if any, to cure any objections to title raised by
Buyer in writing prior to the Closing which are not cured
before the Closing Date, if Buyer elects to close
notwithstanding such objections.
(iv) Environmental Assessment. Following execution of this
Agreement, Buyer shall have the right to an environmental
assessment (the "Assessment") to be performed for the
purpose of determining whether any material environmental
risks would be associated with the ownership of the Branch
Real Estate and other Assets or the operation of the Branch,
and shall report the results of any such Assessment promptly
after completion of the Assessment; provided, however, that
without the prior written consent of Seller, Buyer shall not
conduct any ground water monitoring or install any test well
or undertake any other investigation which requires a permit
or license from, or the reporting of the investigation or
the results thereof to, any local or state environmental
regulatory authority or the United States Environmental
Protection Agency. If Seller refuses to provide such written
consent, Buyer shall have the option to terminate this
Agreement, in which event neither party shall have any
further liability to the other party under this Agreement,
except for any breach hereof. The Assessment shall be
conducted by consulting engineers selected by Buyer, and
shall have such scope as Buyer shall determine, and Seller
shall reimburse Buyer for the out-of-pocket cost of the
Assessment, not to exceed $5,000. Buyer hereby agrees to
indemnify and hold harmless Seller and its affiliates from
and against any and all damages to property or persons
arising directly out of Buyer's Assessment.
(c) Required Authorizations. Each Seller and Parent shall prepare and
submit for filing, at no expense to Buyer, any and all
applications, filings, and registrations with, and notifications
to, all federal and state authorities required on the part of
Seller, Parent or any shareholder or affiliate of Seller or
Parent for the Acquisition to be consummated at the Closing,
including without limitation those listed on Schedule 3.01(c) and
Schedule 3.02(c) or contemplated in Section 6.01 hereof and for
Buyer to operate the Branch following the Closing. Seller shall
use commercially reasonable efforts to pursue all such
applications, filings, registrations, and notifications, and
shall file such supplements, amendments, and additional
information in connection therewith as may be reasonably
necessary for the Acquisition to be consummated at such Closing
and for Buyer to operate the Branch following the Closing. Each
of Seller and Parent shall deliver to Buyer evidence of the
filing of each and all of such applications, filings,
registrations and notifications (except for any confidential
portions thereof), and any supplement, amendment or item of
additional information in connection therewith (except for any
confidential portions thereof). Each of Seller and Parent shall
also deliver to Buyer a copy of each material notice, order,
opinion and other item of correspondence received by Seller or
Parent from such federal and state authorities (except for any
confidential portions thereof) and shall advise Buyer, at Buyer's
request, of developments and progress with respect to such
matters.
(d) Creation of Liens and Encumbrances. With respect to the Branch
Real Estate, Seller shall not create or allow any liens,
imperfections in title, charges, easements, restrictions or
encumbrances other than the Permitted Exceptions.
(e) Destruction, Damage or Condemnation of Branch Real Estate. Seller
shall maintain adequate insurance on all the Assets consisting of
Branch Real Estate. If prior to Closing, all or any portion of
the Branch Real Estate is subject to damage, destruction,
condemnation or is taken or made subject to eminent domain or
other governmental acquisition proceedings, then Seller shall
promptly notify Buyer thereof, and Buyer may either complete the
Closing and receive the insurance proceeds (which would be
received assuming Seller's insurance policy had no deductible),
or terminate this Agreement. If Buyer terminates this Agreement,
both parties shall thereupon be relieved from all further
obligations hereunder, except for any breach hereof.
(f) Destruction or Damage of Tangible Assets. Seller shall maintain
adequate insurance on all the Assets consisting of Tangible
Assets. If prior to Closing, all or any portion in excess of
$25,000 of the Tangible Assets is subject to damage or
destruction, then Seller shall promptly notify Buyer thereof, and
Buyer may either complete the Closing and receive the insurance
proceeds (which would be received assuming Seller's insurance
policy had no deductible), or terminate this Agreement. If Buyer
terminates this Agreement, both parties shall thereupon be
relieved from all further obligations hereunder, except for any
breach hereof. If prior to the Closing, any portion equal to or
less than $25,000 of the Tangible Assets is subject to damage or
destruction, then Seller shall promptly notify Buyer thereof, and
Buyer shall be entitled upon Closing to receive the insurance
proceeds (which would be received assuming Seller's insurance
policy had no deductible) as a result of such damage or
destruction.
(g) XXX Accounts. Not later than thirty days prior to the expected
Closing Date, Seller shall, at Seller's expense, mail notice of
Seller's resignation as custodian and trustee, and the
appointment of Buyer as the successor custodian or trustee,
effective upon Closing, of IRAs maintained at the Branch. The
notice shall be in the form that is mutually agreed upon by
Seller and Buyer.
2.02 Covenants of Buyer. Buyer hereby covenants to Seller that it shall
prepare and submit for filing, at no expense to Seller, any and all
applications, filings, and registrations with, and notifications to,
all federal and state authorities required on the part of Buyer or any
shareholder or affiliate of Buyer for the Acquisition to be
consummated at the Closing, including without limitation those listed
on Schedule 3.03 (c) or contemplated in Section 6.01 hereof and for
Buyer to operate the Branch following the Closing. Buyer shall use
commercially reasonable efforts to pursue all such applications,
filings, registrations, and notifications, and shall file such
supplements, amendments, and additional information in connection
therewith as may be reasonably necessary for the Acquisition to be
consummated at such Closing and for Buyer to operate the Branch
following the Closing. Buyer shall deliver to Seller evidence of the
filing of each and all of such applications, filings, registrations
and notifications (except for any confidential portions thereof), and
any supplement, amendment or item of additional information in
connection therewith (except for any confidential portions thereof).
Buyer shall also deliver to Seller a copy of each material notice,
order, opinion and other item of correspondence received by Buyer from
such federal and state authorities (except for any confidential
portions thereof) and shall advise Seller, at Seller's request, of
developments and progress with respect to such matters.
2.03 Covenants of All Parties. Seller hereby covenants to Buyer, and Buyer
hereby covenants to Seller that, from the date hereof until the
Closing, such party shall cooperate fully with the other party in
attempting to obtain all consents, approvals, permits, or
authorizations which are required to be obtained pursuant to any
federal or state law, or any federal or state regulation thereunder,
or from any third party, for or in connection with the transactions
described and contemplated in this Agreement. Notwithstanding anything
in this Agreement to the contrary, no party shall be required to agree
as a condition to receipt of any such consent, approval, permit or
authorization to make any payment (other than filing fees), agree to
divest any asset, alter the terms of this Agreement or restrict in any
material respect any operations of such party.
3. REPRESENTATIONS AND WARRANTIES.
3.01 Representations and Warranties of Seller. Seller represents and
warrants to Buyer as follows:
(a) Good Standing and Power. Seller is a national banking association
duly organized, validly existing, and in good standing under the
laws of the United States with corporate power and authority to
own its properties and to carry on its business as presently
conducted. Seller is an insured bank as defined in the Federal
Deposit Insurance Act and applicable regulations thereunder.
(b) Authorization of Agreement. The execution and delivery of this
Agreement, and the transactions contemplated hereby, have been
duly authorized by all necessary corporate action on the part of
Seller, and this Agreement is a valid and binding obligation of
Seller.
(c) Effective Agreement. Subject to the receipt of the required
regulatory approvals and required consents set forth on Schedule
3.01(c), the execution, delivery, and performance of this
Agreement by Seller and the consummation of the transactions
contemplated hereby, will not conflict with, result in the breach
of, constitute a violation or default, result in the acceleration
of payment or other obligations, or create a lien, charge or
encumbrance, under any of the provisions of Articles of
Association or By-Laws of Seller, under any judgment, decree or
order, under any law, rule, or regulation of any government or
agency thereof, or under any contract, agreement or instrument to
which Seller is subject.
(d) Title to Real Estate and Other Assets. Except for the Branch Real
Estate, Seller is the sole owner of each of the Assets free and
clear of any mortgage, lien or encumbrance of any kind or nature.
As to the Branch Real Estate, Schedule 1.01 correctly identifies
the Branch Real Estate. Seller is the sole owner of a fee simple
interest in, and has good and marketable title to, such Branch
Real Estate, free and clear of all liens, claims, encumbrances
and rights of tenants in possession except for the Permitted
Exceptions and the other matters that are disclosed in the title
report and survey, and Seller shall convey, or cause to be
conveyed, such real estate to Buyer by delivery at the Closing of
a warranty deed conveying such title subject only to the
Permitted Exceptions and the other matters waived by the Buyer.
(e) Condemnation Proceedings. Seller has not received written notice
of any pending or threatened, nor does Seller have knowledge of
any contemplated, condemnation proceeding affecting or relating
to the Branch Real Estate.
(f) Taxes. Seller is in compliance in all material respects with, and
its records contain all information and documents necessary to
comply with, all applicable reporting and tax withholding
requirements under federal, state and local tax laws with respect
to the Assets and the Assumed Liabilities.
(g) Operations Lawful. The Branch has been operated in all material
respects in compliance with all applicable federal, state, county
and municipal laws, ordinances and regulations.
(h) Third-Party Claims. There is no action, suit or proceeding
pending against Seller, or to the knowledge of Seller, threatened
against Seller, before any court or arbitrator or any
governmental body, agency or official which (i) relates in any
respect to the Assets, the Assumed Liabilities or the Branch, or
(ii) would adversely affect the ability of Seller to perform its
obligations under this Agreement or which in any manner questions
the validity or this Agreement.
(i) Insurance. Schedule 3.01(i) is a listing of all policies of
property and casualty insurance maintained by Seller covering the
Branch Real Estate and the Tangible Assets for which Buyer would
be entitled to receive any proceeds in the event of destruction,
damage or condemnation of the Branch Real Estate or the Tangible
Assets as provided in Sections 2.01(e) and 2.01(f). Seller has
made available to Buyer true and correct copies of such policies.
(j) Labor Relations. No employee located at the Branch is
represented, for purposes of collective bargaining, by a labor
organization of any type, and Seller has no knowledge of any
efforts during the past three years to unionize or organize any
employees at the Branch. No material claim related to labor
relations or employment practices under any federal, state, or
local statute, ordinance or regulation, including, without
limitation, the Fair Labor Standards Act, National Labor
Relations Act, Civil Rights of 1964, Xxxxx-Xxxxx Act, Xxxxx Xxxxx
Act, Fair Labor Standards Act, Age Discrimination in Employment
Act, Equal Pay Act of 1963, Executive Order No. 11246, Federal
Unemployment Tax Act, Vietnam Era Veterans Readjustment Act,
Occupational Safety and Health Act, Americans with Disabilities
Act is pending, has been made in the past three years, or, to the
best of Seller's knowledge, is or has been threatened with
respect to Seller's employment of any employee located at the
Branch within the past three years. In addition, no unfair labor
practice, discrimination or wage-and-hour claim is pending, has
been made in the past three years, or, to the best of Seller's
knowledge, is or has been threatened with respect to Seller's
employment of any employee located at the Branch within the past
three years.
(k) Governmental Notices. Seller has not received notice from any
federal or state governmental 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.
(l) Environmental Matters.
(i) For purposes of this Agreement, "Environmental Law" means
the Comprehensive Environmental Response, Compensation and
Liability Act, 42 X.X.X.xx. 9601 et seq., the Resource
Conservation and Recovery Act, 42 X.X.X.xx. 6901 et seq.,
the Federal Water Pollution Control Act, 33 X.X.X.xx. 1201
et seq., the Clean Water Act, 33 X.X.X.xx. 1321 et seq., the
Clean Air Act, 42 X.X.X.xx. 7401 et seq., and any other
federal, state, local or other governmental statute,
regulation, law or ordinance dealing with the protection of
human health, natural resources or the environment; and
"Hazardous Substance" means any pollutant, contaminant,
hazardous substance or waste, solid waste, petroleum or any
fraction thereof, or any other chemical, substance or
material listed or identified in or regulated by any
Environmental Law.
(ii) Seller has not buried, spilled, leaked, discharged, emitted,
generated, stored, used or released any Hazardous Substances
in, on or under the Branch Real Estate in such forms or
quantities as to create any liability or obligation under
the common law or any Environmental Law, and to the
knowledge of Seller, no other party has buried, spilled,
leaked, discharged, emitted, generated, stored, used or
released any Hazardous Substances in, on or under the Branch
Real Estate in such forms or quantities as to create any
liability or obligation under the common law or any
Environmental Law.
(iii) Seller is not in violation of any Environmental Law with
respect to the operation of the Branch, and is not party to
any proposed removal, response or remedial action.
(iv) Seller has not received notice of any alleged violation of
any Environmental Law or liability for any release of any
Hazardous Substance in connection with the operation of the
Branch, and there exists no writ, injunction, decree, order
or judgment outstanding, nor any lawsuit, proceeding,
citation, summons or governmental agency investigation
relating thereto.
(v) To the knowledge of Seller, the Branch Real Estate is not
and has never been listed on the National Priorities List,
the Comprehensive Environmental Response, Compensation and
Liability Information System or any equivalent federal,
state or local list, schedule, log or database.
(vi) Seller has made available to Buyer copies of all
environmental audits, studies or documents in Seller's
possession or control relating to the Branch Real Estate.
(m) Deposits. Schedule 1.03(b) is a listing of the Deposit Accounts
as of the date specified therein, including he record owner
thereof. The books and records with respect to the Deposit
Accounts are true and correct as to the balances of each such
Deposit Account. The Deposit Accounts are insured by the Bank
Insurance Fund of the FDIC up to the current applicable maximum
limits, and no action is pending or, to Seller's knowledge,
threatened by the FDIC with respect to the termination of such
insurance. A true and correct copy of any form of deposit account
agreement used in connection with the Deposit Accounts or in use
at the Branch is attached hereto in Schedule 3.01(m). Seller is
not in default under any form of deposit account agreement listed
on Schedule 3.01 (m).
(n) Personal Property. Schedule 1.02(b) is a listing of the Tangible
Assets located at the Branch as of the date specified therein.
The Tangible Assets constitute all of the tangible personal
property of Seller used at the Branch.
(o) Assumed Contracts. Seller is not in default under any of the
Assumed Contracts. To the knowledge of Seller, no other party to
any of the Assumed Contracts is in default under the Assumed
Contracts. Each of the Assumed Contracts is in full force and
effect. Seller has provided Buyer with a true and correct copy of
each of the Assumed Contracts, including all amendments and
modifications thereof and waivers or assignments of rights
thereunder.
(p) Real Property Leases. Seller is not in default under any of the
Real Property Leases. To the knowledge of Seller, no other party
to any of the Real Property Leases is in default under the Real
Property Leases. Each of the Real Property Leases is in full
force and effect. Seller has provided Buyer with a true and
correct copy of each of the Real Property Leases, including all
amendments and modifications thereof and waivers or assignments
of rights thereunder.
(q) Branch Loans.
(i) To the knowledge of Seller, each of the Branch Loans
represents a valid and legally enforceable obligation of the
borrower(s) identified in the loan agreement subject to (A)
applicable bankruptcy, insolvency, reorganization,
moratorium, and similar debtor relief laws, (B) general
principles of equity and (C) the unenforceability of
remedial provisions related to the Branch Loans that do not
make the rights or remedies provided therein inadequate to
realize the benefits afforded thereby.
(ii) Each of the Branch Loans has been made and documented in
conformity in all material respects with all applicable
federal, state and local laws, regulations and rules.
(iii) To the knowledge of Seller, none of the Branch Loans is (A)
subject to any borrower bankruptcy proceedings, or (B)
except as set forth on Schedule 3.01(q)(iii), is in default
or past due.
(iv) Seller has complied in all material respects with all of its
obligations under the loan documents with respect to the
Branch Loans.
(v) There are no valid claims or defenses with respect to any
Branch Loan that can be asserted against Seller.
(vi) The files and other materials related to the Branch Loans
transferred pursuant hereto are true and correct in all
material respects and accurately reflect the facts stated
therein; provided that, with respect to information
furnished by persons other than Seller and its affiliates,
this representation shall be to the knowledge of Seller.
Attached hereto as Schedule 1.02(f) is a true and accurate
schedule of all Branch Loans, including outstanding
principal balance, accrued and unpaid interest thereon,
computed as of a date within one (1) day prior to the date
of this Agreement.
(r) Brokers' and Finders' Fees. Seller has not employed or entered
into any arrangement with any person pursuant to which Buyer may
incur, directly or indirectly, any liability for brokerage or
finders' fees, agents' commissions or any similar charges in
connection with the transactions contemplated by this Agreement.
3.02 Representations and Warranties of Parent. Parent represents and
warrants as follows:
(a) Good Standing and Power. Parent is a corporation duly organized,
validly existing and in good standing under the laws of Delaware
with corporate power and authority to own its own properties and
carry on it business as presently conducted.
(b) Authorization of Agreement. The execution and delivery of this
Agreement, and the transactions contemplated hereby, have been
duly authorized by all necessary corporate action on the part of
Parent, and this Agreement is a valid and binding obligation of
Parent.
(c) Effective Agreement. Subject to the receipt of the required
regulatory approvals and required consents set forth on Schedule
3.02(c), the execution, delivery, and performance of this
Agreement by Parent and the consummation of the transactions
contemplated hereby, will not conflict with, result in the breach
of, constitute a violation or default, result in the acceleration
of payment or other obligations, or create a lien, charge or
encumbrance, under any of the provisions of Certificate of
Incorporation or By-Laws of Parent, under any judgment, decree or
order, under any law, rule, or regulation of any government or
agency thereof, or under any contract, agreement or instrument to
which Parent is subject.
(d) Third-Party Claims. There is no action, suit or proceeding
pending against Parent, or to the knowledge of Parent, threatened
against Parent, before any court or arbitrator or any
governmental body, agency or official which would adversely
affect the ability of Parent to perform its obligations under
this Agreement or which in any manner questions the validity or
this Agreement.
(e) Governmental Notices. Parent has not received notice from any
federal or state governmental 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.
3.03 Representations and Warranties of Buyer. Buyer represents and warrants
to Seller as follows:
(a) Good Standing and Power of Buyer. Buyer is a national banking
association duly organized, validly existing, and in good
standing under the laws of the United States, with corporate
power to own its properties and to carry on its business as
presently conducted. Buyer is an insured bank, as defined in the
Federal Deposit Insurance Act and applicable regulations
thereunder.
(b) Authorization of Agreement. The execution and delivery of this
Agreement, and the transactions contemplated hereby, have been
duly authorized by all necessary corporate action on the part of
Buyer, and this Agreement is a valid and binding obligation of
Buyer.
(c) Effective Agreement. Subject to the receipt of the required
regulatory approvals and required consents set forth on Schedule
3.03(c), the execution, delivery, and performance of this
Agreement by Buyer, and the consummation of the transactions
contemplated hereby, will not conflict with, result in the breach
of, constitute a violation or default, result in the acceleration
of payment or other obligations, or create a lien, charge or
encumbrance, under any of the provisions of the Articles of
Association or By-Laws of Buyer, under any judgment, decree or
order, under any law, rule or regulation of any government or
agency thereof, or under any material agreement, material
contract or material instrument to which Buyer is subject.
(d) Third-Party Claims. There are no actions, suits or proceedings
pending or, to Buyer's knowledge, threatened, against or
affecting Buyer that would adversely affect the ability of Buyer
to perform its obligations under this Agreement or which in any
manner affects the validity of this Agreement.
(e) Brokers' and Finders' Fees. Buyer has not employed or entered
into any arrangement with any person pursuant to which Seller may
incur, directly or indirectly, any liability for brokerage or
finders' fees, agents' commissions or any similar charges in
connection with the transactions contemplated by this Agreement.
(f) Governmental Notices. Buyer has not received notice from any
federal or state governmental 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.
3.04 No Additional Representations and Warranties. EXCEPT AS EXPRESSLY
PROVIDED IN THIS ARTICLE 3, NEITHER THE SELLER, PARENT NOR BUYER MAKES
ANY REPRESENTATIONS OR WARRANTIES WHATSOEVER, EXPRESS OR IMPLIED,
REGARDING EITHER THE ASSETS OR THE ASSUMED LIABILITIES, INCLUDING,
WITHOUT LIMITATION, ANY REPRESENTATION OR IMPLIED WARRANTY WITH
RESPECT TO (A) COLLECTIBILITY OR CREDITWORTHINESS OF ANY OBLIGORS OF
THE BRANCH LOANS, (B) THE TRANSFER OR ASSIGNMENT OF NEGOTIABLE
INSTRUMENTS AS MAY BE PROVIDED UNDER THE UNIFORM COMMERCIAL CODE OF
NORTH DAKOTA, AS THE SAME MAY BE AMENDED FROM TIME TO TIME, OR (C)
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. EXCEPT AS SET
FORTH IN ARTICLE 8 OF THIS AGREEMENT, NO PARTY SHALL HAVE RECOURSE TO
ANY OTHER PARTY FOR ANY INACCURACY IN OR BREACH OF A REPRESENTATION OR
WARRANTY SET FORTH IN THIS ARTICLE 3.
4. EMPLOYEES.
4.01 Employees. Buyer may, in its sole and absolute discretion, make
employment available to some or all employees of Seller at the Branch
(the "Employees"). Seller agrees to deliver to Buyer a list of all
Employees employed at the Branch by name, date of hire, salary and
position, as of the most recent practicable date and to give Buyer
access to personnel files concerning each of the Employees employed at
the Branch within seven days of receiving written consent of such
Employees. Seller shall use commercially reasonable efforts to obtain
such consent from each of its Employees as soon as practicable after
the execution of this Agreement. Employees may be hired by Buyer on
terms and conditions as are determined by the Buyer in Buyer's sole
and absolute discretion. Buyer shall not disclose or provide Seller
with any information relating to its criteria or processes for
determining whether or not to make offers of employment to any
Employees, and Seller acknowledges that it has and will not receive
any such information. Buyer shall notify each Employee as to whether
or not Buyer will be offering employment to such Employee no later
than seven business days before the Closing Date. Each Employee shall
be given five Business Days from the date of Buyer's offer to accept
or decline the employment offer. Employees accepting Buyer's offer are
referred to as "Transferred Employees."
Beginning on the date on which any of Seller's Employees are hired by
Buyer, Buyer shall assume all obligations and liabilities which may
arise as a result of Buyer's employment of the Transferred Employees
on or after such first date of employment of the Transferred
Employees, and hereby agrees to and shall indemnify and hold Seller
harmless from and against any such liability.
This Agreement is not intended to create and does not create any
contractual or legal rights in or enforceable by any Employee. Nothing
contained herein is to be construed as (i) offering or creating an
employment contract or guarantee of employment for any specified
period of time for any Employee or (ii) any other obligation to employ
such Employees.
Neither Buyer nor Seller may send any communications to any Employee
employed at the Branch concerning the subject matter of this Section
4.01 without the prior written consent of the other party, which
approval shall not be unreasonably withheld. This Agreement may be
amended or terminated without liability to any Employee.
Seller and Parent agree that for a period of two years after the
Closing, neither Seller, Parent nor its respective affiliates will
solicit employment of any Transferred Employees.
4.02 Employee Retention. Seller shall, at its sole expense, establish an
employee retention program, upon the terms and conditions set forth on
Schedule 4.02, to begin contemporaneously with this Agreement that
provides each Employee who remains an Employee through the Closing
Date with a bonus, payable on the Closing Date, equal to two (2) weeks
pay based on such Employee's current wage or salary level.
4.03 Employee Training. Seller and Buyer shall cooperate in order to permit
Buyer to train Transferred Employees, as mutually scheduled by Seller
and Buyer for reasonably limited periods of time such that Seller's
ongoing operations at the Branch shall not be disrupted.
5. CONDITIONS PRECEDENT TO CLOSING.
5.01 Conditions to Seller's Obligations. The obligations of Seller to
consummate the Acquisition are subject to the satisfaction, or the
waiver in writing by Seller to the extent permitted by applicable law,
of the following conditions at or prior to the Closing:
(a) Prior Regulatory Approval. All filings and registrations with,
and notifications to, all federal and state authorities required
by Seller for consummation of the Acquisition and set forth on
Schedule 3.01(c) shall have been made, all approvals and
authorizations of all federal and state authorities required for
consummation of the Acquisition shall have been received and
shall be in full force and effect, and all applicable waiting
periods shall have passed.
(b) Representations and Warranties. The representations and
warranties of Buyer set forth in this Agreement shall be true and
correct in all material respects on the Closing Date with the
same effect as though all such representations and warranties had
been made on and as of such date, and Buyer shall have delivered
to Seller a Certificate to that effect, dated as of the Closing
Date to the effect specified in Schedule 5.01(b) to this
Agreement.
(c) Covenants. Each and all of the covenants and agreements of Buyer
to be performed or complied with at or prior to Closing pursuant
to this Agreement shall have been duly performed or complied with
in all material respects by Buyer, or waived by Seller, and Buyer
shall have delivered to Seller a Certificate to that effect,
dated as of the Closing Date to the effect specified in Schedule
5.01(b) to this Agreement.
(d) No Proceeding or Prohibition. At the time of the Closing, there
shall not be any litigation, investigation, inquiry, or
proceeding pending or threatened in or by any court or agency of
any government or by any third party which presents a bona fide
claim to restrain, enjoin, or prohibit consummation of the
transaction contemplated by this Agreement or which might result
in rescission in connection with such transactions.
(e) Receipt of Consents of Third Parties. Seller shall have received,
in form and substance reasonably satisfactory to the Buyer, any
and all consents, approvals or waivers of third parties listed on
Schedule 3.01(c), and Parent shall have received, in form and
substance reasonably satisfactory to the Buyer, any and all
consents, approvals or waivers of third parties listed on
Schedule 3.02(c) hereto.
5.02 Conditions to Buyer's Obligations. The obligations of Buyer to
consummate the Acquisition are subject to the satisfaction, or the
waiver in writing by Buyer to the extent permitted by applicable law,
of the following conditions at or prior to the Closing:
(a) Prior Regulatory Approval. All filings and registrations with,
and notifications to, all federal and state authorities required
by Buyer for consummation of the Acquisition and set forth on
Schedule 3.03(c) shall have been made, all approvals and
authorizations of all federal and state authorities required for
consummation of the Acquisition and operation of the Branch by
Buyer shall have been received and shall be in full force and
effect, and all applicable waiting periods shall have passed.
(b) Representations and Warranties of Seller. The representations and
warranties of Seller set forth in this Agreement shall be true
and correct in all material respects (except that where any
statement in a representation or warranty expressly includes
"material" or other materiality qualifier, such representation
shall be true and correct in all respects) on the Closing Date
with the same effect as though all such representations and
warranties had been made on and as of such date, and Seller shall
have delivered to Buyer a Certificate to that effect, dated as of
the Closing Date to the effect specified in Schedule 5.02(b) to
this Agreement.
(c) Representations and Warranties of Parent. The representations and
warranties of Parent set forth in this Agreement shall be true
and correct in all material respects on the Closing Date with the
same effect as though all such representations and warranties had
been made on and as of such date, and Parent shall have delivered
to Buyer a Certificate to that effect, dated as of the Closing
Date to the effect specified in Schedule 5.02(c) to this
Agreement.
(d) Covenants. Each and all of the covenants and agreements of Seller
and Parent to be performed or complied with pursuant to this
Agreement shall have been duly performed or complied with in all
material respects by Seller and Parent, or waived by Buyer, and
Seller and Parent shall have delivered to Buyer a Certificate to
that effect, dated as of the Closing Date to the effect specified
in Schedule 5.02(b) to this Agreement.
(e) No Proceedings or Prohibitions. At the time of the Closing, there
shall not be any litigation, investigation, inquiry, or
proceeding pending or threatened in or by any court or agency of
any government or by any third party which presents a bona fide
claim to restrain, enjoin, or prohibit consummation of the
transactions contemplated by this Agreement or which might result
in rescission in connection with such transactions.
(f) Real Property. The Title Commitment (as defined in Section
2.01(b) herein) shall have been delivered to Buyer, and updated
to or as close as practicable to (but in no event more than five
(5) business days prior to) the Closing Date, in accordance with
the terms of such Section, and such updated Title Commitment
shall not include any special exceptions other than Permitted
Exceptions.
(g) Receipt of Consents of Third Parties. Buyer shall have received,
in form and substance reasonably satisfactory to the Seller, any
and all consents, approvals or waivers of third parties listed on
Schedule 3.01(c) Schedule 3.02(c) and Schedule 3.03(c) hereto.
6. CLOSING.
6.01 Closing and Closing Date. The Acquisition contemplated by this
Agreement shall be consummated and closed (the "Closing") at such
location as shall be mutually agreed upon by Buyer and Seller. The
date on which the Closing shall occur (the "Closing Date") shall be on
a date to be mutually agreed upon by Buyer and Seller within ten (10)
days after receiving all required regulatory approvals with such date
to be confirmed in writing as soon as practicable after receiving all
such required regulatory approvals.
6.02 Seller's Actions at Closing. At the Closing (unless another time is
specifically stated in Section 6.04 hereof), Seller shall, with
respect to the Branch:
(a) transfer possession to Buyer at the Branch such of the Assets
purchased hereunder as shall be capable of physical delivery,
including, without limitation, all assets comprising the safe
deposit box business, if any, of the Branch;
(b) execute, acknowledge and deliver to Buyer a special warranty deed
(qualified, as necessary, to reflect all Permitted Exceptions),
conveying the Branch Real Estate to Buyer and such other
documents as the title company may reasonably require; the
originals of all blueprints, construction plans, specifications
and plat relating to the Branch Real Estate, which are now in
Seller's possession or which Seller has reasonable access to; and
such other documents or instruments as may be reasonably required
by Buyer, required by other provisions of this Agreement, or
reasonably necessary to effectuate the Closing;
(c) assign, transfer, and make available to Buyer such of the
following records, to the extent such records exist and are
available and maintained at the Branch (in whatever form or
medium then maintained by Seller), pertaining to the Deposit
Liabilities and Branch Loans:
(i) signature cards, orders and contracts and agreements between
Seller and depositors of the Branch and borrowers with
respect to Branch Loans, and records of similar character;
(ii) canceled checks and/or negotiable orders of withdrawal
representing charges to depositors;
(iii) a trial balance listing of records of account;
(iv) overdraft histories for all Deposit Accounts;
(v) any and all suspicious activity reports;
(vi) returned check histories for all Deposit Accounts;
(vii) histories related to all Branch Loans, including, but not
limited to, past due histories; and
(viii) all other miscellaneous records, statements and other data
and materials maintained by Seller relative to any Deposit
Liabilities being assumed by Buyer and Branch Loans being
acquired by Buyer;
(d) assign, transfer, and deliver to Buyer such safe deposit and
safekeeping files and records (in whatever form or medium then
maintained by Seller) pertaining to the safe deposit business of
the Branch transferred to Buyer hereunder as exist and are
available, together with the contents of the safe deposit boxes
maintained at the Branch, as the same exist as of the close of
business on the day immediately preceding the Closing Date
(subject to the terms and conditions of the leases or other
agreements relating to the same) and all securities and other
records, if any, held by the Branch for their customers as of the
close of business on the day immediately preceding the Closing
Date (subject to the terms and conditions of the agreements or
receipts relating to the same);
(e) make available and transfer to Buyer on the Closing Date and
prior to the conclusion of the Closing any funds required to be
paid to Buyer pursuant to the terms of this Agreement;
(f) execute, acknowledge and deliver to Buyer all Certificates and
other documents required to be delivered to Buyer by Seller at
the Closing pursuant to the terms of this Agreement;
(g) assign by endorsement in a form reasonably acceptable to Buyer,
transfer and deliver to Buyer the contract, promissory note or
other evidence of indebtedness related to the Branch Loans
together with the loan file and records (in whatever form or
medium then maintained by Seller) pertaining to such Branch
Loans;
(h) execute, acknowledge, and deliver to Buyer, to evidence the
assignment of the Assets of Buyer by Seller hereunder, an
instrument of assignment in the form set forth in Schedule
6.02(h) to this Agreement, and Buyer shall then accept, execute,
and acknowledge such instrument.
(i) resign as trustee and custodian with respect to any IRAs as to
which Seller is trustee or custodian and as to which one or more
of the assets included therein is a Deposit Account and designate
or appoint Buyer as successor trustee or custodian under such
IRAs.
6.03 Buyer's Actions at Closing. At the Closing (unless another time is
specifically stated in Section 6.04 hereof), Buyer shall, with respect
to the Branch:
(a) execute, acknowledge, and deliver to Seller, to evidence the
assumption of the Assumed Liabilities of Seller by Buyer
hereunder, an instrument of assumption in the form set forth in
Schedule 6.02(h) to this Agreement, and Seller shall then accept,
execute, and acknowledge such instrument;
(b) receive, accept and acknowledge delivery of all Assets, and all
records and documentation relating thereto, sold, assigned,
transferred, conveyed or delivered to Buyer by Seller hereunder;
(c) execute and deliver to Seller such written receipts for the
Assets, properties, records, and other materials assigned,
transferred, conveyed, or delivered to Buyer hereunder as Seller
may reasonably have requested at or before the Closing;
(d) pay to Seller on the Closing Date and prior to the conclusion of
the Closing the funds required to be paid to Seller at the
Closing pursuant to the terms of this Agreement; and
(e) execute, acknowledge and deliver to Seller all Certificates and
other documents required to be delivered to Seller by Buyer at
the Closing pursuant to the terms of this Agreement.
6.04 Methods of Payment. Subject to the adjustment procedures set forth in
this Section 6.04, the transfer of the funds, if any, due to Seller or
to Buyer, as the case may be, as set forth pursuant to the terms of
Section 1.05(a) hereof, shall be made on the Closing Date in
immediately available United States funds. At least two business days
prior to the Closing, Seller and Buyer shall provide written notice to
one another indicating the account and bank to which such funds shall
be wire transferred. In order to facilitate the Closing, the parties
agree that the amount of funds transferred on the Closing Date,
pursuant to Section 1.05(a) hereof, shall be as set forth in Section
1.05, except that the amount of Deposit Accounts, Branch Loans and
cash transactions shall be calculated as of the close of business on
the day immediately preceding the Closing Date and the parties shall
execute a Preliminary Closing Statement set forth in Schedule 6.04(a)
attached. Within ten (10) business days after the Closing, the parties
shall make appropriate post-closing adjustments, consistent with the
provisions of Section 1.05 hereof, based upon actual Deposit Accounts,
Branch Loans and cash transactions which took place as of the close of
business on the Closing Date, but which were not reflected as of the
close of business on the day immediately preceding the Closing Date,
and execute the Final Settlement Statement in substantially the form
set forth in Schedule 6.04(b) attached. In addition, prorations of
income and expenses that cannot be reasonably calculated at the
Closing shall be settled and paid based on actual amounts and
calculations as soon as possible after the Closing.
6.05 Effectiveness of Closing. Upon the satisfactory completion of the
Closing, which does not include and shall not require completion of
the adjustment and proration arrangements set forth in Section 6.04,
the Acquisition shall be deemed to be effective and the Closing shall
be deemed to have occurred.
7. CERTAIN TRANSITIONAL MATTERS.
7.01 Transitional Action by Buyer. After the Closing, unless another time
is otherwise indicated:
(a) Buyer shall: (i) pay in accordance with the law and customary
banking practices and applicable Deposit Account contract terms,
all properly drawn and presented checks, negotiable orders of
withdrawal, drafts, debits, and withdrawal orders presented to
Buyer by mail, over the counter, through electronic media, or
through the check clearing system of the banking industry, by
depositors of the Deposit Accounts assumed by Buyer hereunder,
whether drawn on checks, negotiable orders or withdrawal, drafts,
or withdrawal order forms provided by Buyer or Seller; and (ii)
in all other respects discharge, in the usual course of the
banking business, the duties and obligations of Seller with
respect to the balances due and owing to the depositors whose
Deposit Accounts are assumed by Buyer hereunder; provided,
however, that any obligations of Buyer pursuant to this Section
7.01 to honor checks, negotiable orders of withdrawal, drafts,
and withdrawal orders on forms provided by Seller and carrying
its imprint (including its name and transit routing number) shall
not apply to any checks, drafts, withdrawal orders, or returned
items (i) presented to Buyer more than 180 days following the
Closing Date, or (ii) on which a stop payment has been requested
by the depositor. The provisions of this subsection 7.01(a) shall
in no way limit Buyer's duties or obligations arising under
Section 1.03(b) hereof.
(b) Buyer shall, not earlier than the time of procurement of all
regulatory approvals required for consummation of the transaction
contemplated by this Agreement nor later than ten days prior to
the Closing Date, notify all depositors of the Branch by letter,
acceptable to Seller, produced in, if appropriate, several
similar, but different forms calculated to provide necessary and
specific information to the owners of particular types of
accounts, of Buyer's pending assumption of the Deposit
Liabilities hereunder, and, in appropriate instances, notify
depositors that on and after the Closing Date certain Seller
deposit-related services and/or Seller's debit card and automatic
teller machine services impacted by the transactions contemplated
by this Agreement, will be terminated. As an enclosure to such
notices, Buyer may furnish appropriate depositors with brochures,
forms and other written materials related or necessary to the
assumption of the Deposit Accounts by Buyer and the conversion of
such accounts to Buyer accounts, including the provision of
checks to appropriate depositors using the forms of Buyer with
instructions to such depositors to utilize such Buyer checks on
and after the Closing Date and thereafter to destroy any unused
checks on Seller's forms. The expenses of the printing,
processing and mailing of such letter notices and providing new
Buyer checks and other forms and written materials to appropriate
customers shall be borne by Buyer. Before Closing, except as
provided in this paragraph or elsewhere in this Agreement, Buyer
will not contact Seller's customers except as may occur in
connection with advertising or solicitations directed to the
public generally or in the course of obtaining the requisite
regulatory approvals of the transaction.
(c) Buyer shall promptly pay to Seller an amount equivalent to the
amount of any checks, negotiable orders of withdrawal, drafts,
withdrawal orders, or returned items (net of the applicable
Deposit Premium paid by Buyer with respect to the Deposit
Liabilities represented by any such instrument) credited as of
the close of business on the Closing Date to a Deposit Account
assumed by Buyer hereunder which are returned uncollected to
Seller after the Closing Date. The foregoing shall include an
amount equivalent to holds placed upon such deposit account for
items cashed by Seller as of the close of business on the Closing
Date.
(d) All tasks and obligations concerning the provision of data
processing services to or for the Branch after the Closing, other
than those specifically set forth in, and to the extent assumed
by Seller pursuant to, Section 7.02(b) herein, if any, are the
sole and exclusive responsibility of, and shall be performed
solely and exclusively by, Buyer.
(e) Buyer shall, not later than the close of business on the business
day immediately following the Closing Date, supply suitable
government-backed securities as security for any deposits of
governmental units included among the Deposit Liabilities for
which Seller had provided similar security.
(f) Buyer shall, as soon as practicable after the Closing Date,
prepare and transmit at Buyer's expense to each of the obligors
on Branch Loans transferred to Buyer pursuant to this Agreement a
notice to the effect that the loan has been transferred and
directing that payment be made to Buyer at the address specified
by Buyer, with Buyer's name as payee on any checks or other
instruments used to make payments, and, with respect to such loan
on which a payment notice or coupon book has been issued, to
issue a new notice or coupon book reflecting the name and an
address of Buyer as the person to whom and place at which
payments are to be made.
(g) If the balance due on any Branch Loan transferred to Buyer
pursuant to this Agreement has been reduced by Seller as a result
of a payment by check or draft received prior to the close of
business on the Closing Date, which item is returned unpaid to
Seller after the day immediately preceding the Closing Date, the
asset value represented by the loan transferred shall be
correspondingly increased and an amount in cash equal to such
increase shall be promptly paid by Buyer to Seller.
(h) Buyer shall use its commercially reasonable efforts to cooperate
with Seller in assuring an orderly transition of ownership of the
Assets and responsibility for the Assumed Liabilities, including
the Deposit Liabilities, assumed by Buyer hereunder.
(i) The duties and obligations of Buyer in this Section 7.01 shall
survive the Closing.
7.02 Transitional Action by Seller. After the Closing, unless another time
is otherwise indicated:
(a) Seller shall use its commercially reasonable efforts to cooperate
with Buyer in assuring an orderly transition of ownership of the
Assets and responsibility for the Assumed Liabilities, including
the Deposit Liabilities, assumed by Buyer hereunder. Seller shall
provide final statements as of the Closing Date, in conjunction
with appropriate Deposit Liabilities, with interest and service
charges pro-rated to close of business on the Closing Date.
(b) As soon as practicable following the date of this Agreement,
Seller shall provide Buyer with applicable product functions and
specifications relating to the data processing support required
for the Deposit Accounts, Branch Loans, and safe deposit business
(if such data processing support currently is provided with
respect to such business) maintained at the Branch (such Deposit
Accounts, Branch Loans and safe deposit business, if applicable,
hereinafter called the "Accounts"). As soon as practicable
following the date of this Agreement, Seller shall provide to
Buyer file formats relating to the Accounts and up to three (3)
sets of CD-ROMs related to the Accounts in generic form which are
readable using Microsoft Excel or Lotus 1-2-3 software. By not
later than 2:00 P.M. local Grand Forks, North Dakota time on the
day immediately following the Closing Date, Seller shall make the
foregoing documents and materials available for pick-up by Buyer.
(c) Seller shall cooperate with Buyer, at no expense to Seller, to
make provision for the installation of equipment in the Branch
subject to approval by Seller; provided, however, that Buyer
shall arrange for the installation and placement of such
equipment at such times and in a manner that does not
significantly interfere with the normal business activities and
operation of Seller or the Branch.
(d) As of the close of business on the Closing Date, Seller shall
terminate its ATM/debit card service at the Branch. Such
terminations will be preceded by the notice described in Section
7.01(b) herein. Seller shall have no obligation with respect to
conversion or change over with respect to direct deposit or
payroll and retirement payments service relating to the Deposit
Accounts following the Closing and, further, Buyer shall assume
all responsibility and liability with respect thereto following
the Closing. Seller will continue to redirect and/or pass through
relevant ACH transactions on Deposit Accounts for a period of 90
days following the Closing Date.
(e) As of the opening of business on the first business day after the
Closing Date, Seller and Buyer shall provide the appropriate
Federal Reserve Bank (the "FRB") with all information necessary
in order to expedite the clearing and sorting of all checks,
drafts, instruments and other commercial paper relative to the
Deposit Liabilities and/or the Branch Loans (hereinafter
collectively referred to as "Paper Items"). Buyer shall bear all
charges and costs imposed by the Federal Reserve in connection
with the reassignment of account number ranges for sorting the
Paper Items.
In the event the Federal Reserve and/or any other regional or
local clearinghouse for negotiable instruments fails, refuses or
is unable to direct sort such Paper Items for delivery to Buyer
with the result that such Paper Items are presented to Seller, by
not later than 2:00 P.M. Grand Forks, North Dakota, time on each
business day following the Closing and continuing for one hundred
twenty (120) days after the Closing, Seller will make available
to Buyer for pick up from Seller's offices, all of the Paper
Items which are received by Seller from the FRB and/or any
regional or local clearinghouse during the morning of each such
business day on an "as-received basis." At the same xxxx Xxxxxx
shall also make available to Buyer information and records,
including but not limited to systems printouts, concerning such
Paper Items and concerning incoming Automated Clearing House
items ("ACH items") as well as outstanding Automatic Teller
Machine ("ATM") transactions. Such information and records,
including but not limited to systems printouts, will utilize the
most recent account number designated by Seller for each of the
Deposit Accounts and/or the Branch Loans. Buyer shall initiate
appropriate Notification of Change requests relating to
appropriate routing matters at the sole expense of Buyer within
30 days of execution and delivery of this Agreement. Each
business day Seller will endeavor to see that the sum of (a) the
actual Paper Items provided to Buyer plus (b) all ACH items and
ATM transactions captured by Seller in its information and
records balance with the sum of (c) the information and records,
including but not limited to systems printouts, provided by
Seller relative to the Paper Items plus (d) the information and
records, including but not limited to systems printouts, provided
relative to the ACH items and ATM transactions affecting the
Deposit Accounts and/or the Branch Loans.
Except as otherwise expressly noted, Seller shall provide the
foregoing at no charge to Buyer for a period not to exceed thirty
(30) days from the Closing Date except that Buyer shall pay any
charges assessed to Seller by the FRB, a national or local
clearinghouse and/or Seller's agent and/or processor to the
extent such assessments relate to the Deposit Accounts. Buyer
shall be responsible for pick up of the data to be provided by
Seller and shall compensate Seller for activity subsequent to the
referenced 30 day period in the amount of $50.00 per day and $.25
per item.
Seller and Buyer shall arrange for appropriate daily settlement
between the parties in order that the transmission of all monies
associated with the matters set forth in this Section 7.02 (g)
might be effected promptly.
Seller shall not be liable to Buyer for any failure to provide
the data required by this Section 7.02 (g) to the extent any such
failure results from causes beyond Seller's control including
war, strike or other labor disputes, acts of God, errors or
failures of the FRB, and/or a participating regional or local
clearinghouse, or equipment failure or other emergency wherein
Seller and/or its agent processor has been unable to process
inclearings from the FRB or such clearinghouse.
(f) Seller shall, not earlier than the time of procurement of all
regulatory approvals required for consummation of the transaction
contemplated by this Agreement nor later, than twenty days prior
to the Closing Date, notify all depositors of the Branch and all
borrowers of any Branch Loan by letter reasonably acceptable to
Buyer, produced in, if appropriate, several similar, but
different forms calculated to provide necessary and specific
information to the owners of particular types of accounts and/or
loans, of Buyer's pending assumption of the Deposit Liabilities
and acquisition of the Branch Loans hereunder, and, in
appropriate instances, notify depositors that on and after the
Closing Date certain Seller deposit-related services and/or
Seller's debit card and automatic teller machine services, will
be terminated. The expenses of the printing, processing and
mailing of such letter notices shall be borne by Seller.
(g) For a period of sixty (60) days after the Closing Date, Seller
will forward to Buyer, within two (2) business days of receipt,
loan payments received by Seller with respect to the Branch
Loans. Buyer will forward, within two (2) business days of
receipt payments received by Buyer with respect to any loan not a
Branch Loan. Seller agrees to refer customers to the offices of
the Buyer when such customers present payments over the counter
to the Seller. Buyer shall reimburse Seller within 30 days of
notice by Seller to Buyer for any payments tendered by borrowers
which were credited to the outstanding balance of any Branch Loan
prior to the Closing Date and which are subsequently returned or
otherwise withdrawn for any reason and Seller shall assign to
Buyer any rights of Seller to recovery of such payments as
against the relevant borrower.
(h) The duties and obligations of the parties in this section 7.02
shall survive the Closing.
7.03 Overdrafts and Transitional Action. Overdrafts paid on the Deposit
Accounts with respect to ledger dates after the Closing Date will be
the responsibility and risk of Buyer. Overdrafts approved with respect
to ledger dates more than four (4) business days prior to the Closing
Date will be the responsibility and risk of Seller. Overdrafts
approved with respect to ledger dates during the period beginning four
(4) business days prior to the Closing Date through the Closing Date,
inclusive, will initially be the responsibility and risk of Buyer
(other than overdrafts of customers who are specifically identified in
writing by Buyer to Seller not less than four (4) business days prior
to the Closing Date); provided, however, that Buyer shall have the
right to retransfer any such overdrafts back to Seller for Seller's
responsibility and at its risk within six (6) days following the
Closing Date, and Seller will repurchase all rights in respect of such
overdrafts from Buyer for the amount of each such overdraft
outstanding at the time it is retransferred back to Seller less the
amount of the Branch Loan Premium paid by Buyer to Seller attributable
to such overdrafts; provided, however, that Buyer shall have closed
all accounts on which each such overdraft exists not later than the
date of such retransfer.
7.04 ATMs and Debit Cards.
(a) Seller shall provide to Buyer no later than sixty (60) days prior
to the Closing Date, a CD-ROM, along with a file format or file
layout and a production tape thirty (30) days before the Closing
Date, containing customer name, card number, withdrawal limits,
the Deposit Accounts activated by, accessible to or committed to
such cards issue dates and/or open dates, last transaction dates,
and expiration dates as to all ATM and debit cards issued to
customers of the Seller Branch processor to deactivate the
operation of the Seller ATM and debit cards completely or to
deactivate or disconnect the Deposit Accounts from such Seller
ATM and debit cards no later than the business day cutoff on the
date prior to the Closing Date so that all activity generated by
the Seller ATM and debit cards shall have settled prior to the
Closing Date. All transactions and activity related to the Seller
ATM and debit cards following the Closing Date which are received
or forwarded to Seller will be accepted and forwarded by Seller
to Buyer along with all corresponding funds. Seller thereafter
agrees to immediately notify its processor to deactivate such ATM
and debit cards and to forward all transactions related thereto
directly to Buyer.
(b) Seller agrees to deactivate the ATMs located at the Branch on or
before the business day cutoff on the Closing Date. Thereafter,
Buyer shall reconfigure the ATMs to its standards for activation
after the business day cutoff on the Closing Date.
(c) Buyer and Seller agree to cooperate with each other to assure
that all transactions originated through the ATM or originated
with the ATM Cards prior to or on the Closing Date shall be for
the account of Seller and all transactions originated after the
Closing Date shall be for the account of Buyer. A post closing
adjustment shall be made in the manner set forth in Section 6.04
hereof to reflect all such transactions which cannot be
reasonably calculated as of the Closing.
7.05 Effect of Transitional Action. Except as and to the extent expressly
set forth in this Article 7, nothing contained in this Article 7 shall
be construed to be an abridgment or nullification of the rights,
customs and established practices under applicable banking laws and
regulations as they affect any of the matters addressed in this
Article 7.
8. GENERAL COVENANTS AND INDEMNIFICATION.
8.01 Confidentiality Obligations of Buyer. From and after the date hereof,
Buyer and its affiliates and parent company shall treat all
information received from Seller concerning the business, assets,
operations, and financial condition of Seller and its affiliates and
its and their customers (including without limitation the Branch), as
confidential, unless and to the extent that Buyer can demonstrate that
such information was already known to Buyer and its affiliates, if
any, or is then in the public domain through no fault of Buyer or its
affiliates or was received from a third person not known by Buyer to
be under any obligation to Seller; and Buyer shall not use any such
information (so required to be treated as confidential) for any
purpose except in furtherance of the transactions contemplated hereby.
Upon the termination of this Agreement, Buyer shall, and shall cause
its affiliates, if any, to promptly return all documents and
workpapers containing, and all copies of, any such information (so
required to be treated as confidential) received from or on behalf of
Seller in connection with the transactions contemplated hereby. The
covenants of Buyer contained in this Section 8.01 are of the essence
and shall survive any termination of this Agreement, but shall
terminate at the Closing, if it occurs, with respect to any
information that is limited solely to the activities and transactions
of the Branch; provided, however, that neither Buyer nor any of its
affiliates shall be deemed to have violated the covenants set forth in
this Section 8.01 if Buyer shall in good faith disclose any of such
confidential information in compliance with any legal or regulatory
requirement, process, order or decree issued by any court or agency of
government of competent jurisdiction. It is expressly acknowledged by
Seller that all information provided to Buyer related to the
Acquisition may be provided to Buyer's affiliates and representatives
as necessary for the purpose of consummating the Acquisition.
8.02 Confidentiality Obligations of Seller and Parent. From and after the
date hereof, Seller, Parent and their affiliates shall treat all
information received from Buyer concerning the business, assets,
operations, and financial condition of Buyer as confidential, unless
and to the extent Seller or Parent can demonstrate that such
information was already known to Seller, Parent or their affiliates or
is then in the public domain through no fault of Seller, Parent or
their affiliates or was received from a third person not known by
Seller or Parent to be under any obligation to Buyer; and Seller and
Parent shall not use any such information (so required to be treated
as confidential) for any purpose except in furtherance of the
transactions contemplated hereby. Upon the termination of this
Agreement, Seller and Parent shall promptly return all documents and
workpapers containing, and all copies of, any such information (so
required to be treated as confidential) received from or on behalf of
Buyer in connection with the transactions contemplated hereby. The
covenants of Seller and Parent contained in this Section 8.02 are of
the essence and shall survive any termination of this Agreement;
provided, however, that neither Seller, Parent nor any of their
respective affiliates shall be deemed to have violated the covenants
set forth in this Section 8.02 if Seller shall in good faith disclose
any of such confidential information in compliance with any legal
process, order or decree issued by any court or agency of government
of competent jurisdiction. It is expressly acknowledged by Buyer that
all information provided to Parent and Seller related to the
Acquisition may be provided to Seller's or Parent's affiliates and
representatives as necessary for the purpose of consummating the
Acquisition.
8.03 Indemnification.
(a) Seller shall indemnify Buyer and hold Buyer harmless from and
against any and all claims, judgments, settlements, penalties,
fines, losses, liabilities, obligations or duties (of any kind or
nature, whether or not accrued or fixed, absolute or contingent,
determined or determinable) damages (including compensatory or
punitive damages and forgiveness or cancellation of obligations),
expenses, interest, costs and legal fees and disbursements
(collectively, the "Losses") which Buyer may suffer, incur or
sustain arising out of or attributable to (i) any
misrepresentation or any breach of any representation or warranty
made by Seller pursuant to this Agreement, (ii) any breach of any
agreement to be performed by Seller pursuant to this Agreement or
(iii) any liabilities, obligation or duty of Seller or any of its
affiliates that is not an Assumed Liability.
(b) Parent shall indemnify Buyer and hold Buyer harmless from and
against any and all Losses which Buyer may suffer, incur or
sustain arising out of or attributable to (i) any
misrepresentation or any breach of any representation or warranty
made by Parent pursuant to this Agreement, (ii) any breach of any
agreement to be performed by Parent pursuant to this Agreement
and
(c) Buyer shall indemnify Seller and Parent and hold them harmless
from and any and all Losses which Seller or Parent may suffer,
incur or sustain arising out of or attributable to (i) any
misrepresentation or breach of any representation or warranty
made by Buyer pursuant to this Agreement, (ii) any breach of any
agreement to be performed by Buyer pursuant to this Agreement, or
(iii) any of the Assumed Liabilities assumed by Buyer at the
Closing.
(d) To exercise its indemnification rights under this Section 8.03 as
the result of the assertion against it of any claim or potential
liability or loss for which indemnification is provided, the
indemnified party shall promptly notify the indemnifying party of
the assertion of such claim, discovery of any such potential
liability or loss or the commencement of any action or proceeding
in respect of which indemnity may be sought hereunder; provided,
however, that the failure to provide such notice shall not
relieve the indemnifying party of its obligations under this
Section 8.03 except to the extent of any actual damages incurred.
The indemnified party shall advise the indemnifying party of all
facts relating to such assertion within the knowledge of the
indemnified party, and shall afford the indemnifying party the
opportunity, at the indemnifying party's sole cost and expense,
to defend against such claims for liability. The indemnifying
party shall notify the indemnified party within thirty days of
receipt of a notice of claim, whether it shall assume the defense
of such claim (unless a shorter response period is required under
the circumstances). If the defense of a claim is assumed by the
indemnifying party, the indemnified party shall be consulted and
kept fully informed with regard to the progress of such claim.
The indemnified party shall cooperate with the indemnifying party
in connection with such claim. In any such action or proceeding,
the indemnified party shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at
its own expense unless (i) the indemnifying party and the
indemnified party mutually agree to the retention of such
counsel, (ii) the named parties to any such suit, action, or
proceeding (including any impleaded parties) include both the
indemnifying party and the indemnified party, and in the
reasonable judgment of the indemnified party, representation of
the indemnifying party and the indemnified party by the same
counsel would be inadvisable due to actual or potential differing
or conflicts of interests between them, or (iii) an indemnifying
party has failed to promptly assume or diligently prosecute to
defend the claim.
(e) In the event of an actual or potential conflict as provided in
clause (ii) of the last sentence of subsection (d) above, or in
the event of the indemnifying party's failure to assume or
diligently handle a claim as provided in clause (iii) of the last
sentence subsection (d), the indemnified party shall have the
absolute right to settle or compromise any claim or liability
subject to indemnification under this Section and to be
indemnified from and against all Losses resulting therefrom,
provided that the amount of any such settlement is less than
$50,000. If any proposed settlement (whether or not arising in
circumstances covered by clauses (ii) or (iii) of the last
sentence of subsection (d) above) is for $50,000 or more, an
indemnifying party shall not be liable under this Section 8.03
for any settlement effected without its consent, which will not
be unreasonably withheld, of any claim or liability or proceeding
for which indemnity may be sought hereunder.
(f) Notwithstanding the protection afforded by this Section 8.03, no
investigation by an indemnified party at or prior to the Closing
shall relieve any indemnifying party of any liability herein.
(g) The respective representations and warranties of Seller set forth
in Section 3.01, of Parent set forth in Section 3.02 and of Buyer
set forth in Section 3.03 in this Agreement shall survive until
the second anniversary of the Closing, except for the
representation and warranty of Seller contained in Section
3.01(d), which shall survive indefinitely, and Section 3.01(l),
which shall survive until the fifth anniversary of the Closing.
After such expiration of any representation or warranty, neither
party may assert a claim for indemnification hereunder except
with respect to any Loss that has been the subject of written
notice to the party against whom such claim of Loss is asserted
prior to the expiration of such representation and warranty,
which notice will preserve such claim until it is liquidated or
otherwise finally resolved pursuant to the procedures set forth
in this Section 8.03.
(h) The provisions of this Section 8.03 shall apply to any claim for
indemnification by one party against the other party, with the
intent being that all such claims be subject to the procedures,
limitations and other provisions contained in this Section 8.03.
Each party hereto acknowledges and agrees that, with respect to
any claim by a party hereto against another party which arises
out of or relates to a breach of any of the representations,
warranties, covenants or agreements of the parties herein, the
indemnification remedy set forth in this Section 8.03 shall be
the sole and exclusive remedy of the parties with respect
thereto. Each party waives, to the fullest extent permitted under
applicable law, any and all rights, claims and causes of action
that it may have against the other arising under or based upon
any Federal, state or local statute, law, ordinance, rule or
regulation, or arising under or based upon common law or
otherwise, except to the extent provided in this Section 8.03.
Notwithstanding the foregoing, nothing contained in this Section
8.03 shall be deemed to preclude (i) an action by one party
against another party for fraud or (ii) an action by one party
against the another party seeking injunctive or other equitable
relief.
(i) No claim for indemnification under Section 8.03(a)(i) shall be
made by Buyer unless and until the aggregate amount of such
claims by Buyer shall exceed $10,000, and then, only as to the
amount by which aggregate claims by Buyer exceed $10,000.
Notwithstanding the foregoing, in the case of a claim arising out
of a breach of, or inaccuracy in, the representations and
warranties set forth in Section 3.01(q) (a "Branch Loan Claim"),
no Branch Loan Claim may be made, unless and until the total
amount of all claims for indemnification by Buyer under Section
8.03(a)(i) exceed $50,000 (the "Branch Loan Threshold"), and then
only as to the amount by which a Branch Loan Claim exceeds the
Branch Loan Threshold. Notwithstanding anything in this Agreement
to the contrary, it is hereby understood that for purposes of
Section 8.03(a)(i) hereof, in the event of a breach of, or
inaccuracy in, any representation or warranty, in determining the
amount of Losses resulting therefrom, "material" or any other
materiality exceptions and qualifications and knowledge
exceptions set forth in any representation and warranty shall be
disregarded.
8.04 Solicitation of Customers by Seller and Parent After the Closing. From
the date of this Agreement and for two (2) years following the Closing
Date, Seller and Parent will not solicit customers whose Deposit
Liabilities and/or Branch Loans are assumed or acquired by Buyer
pursuant to this Agreement; provided, however that this Section 8.04
shall not be deemed to prohibit (i) communications directed to current
customers listed on Schedule 8.04, (ii) newspaper, radio or television
advertisements of a general nature directed to markets outside of a 50
mile radius of the Branch, or (iii) Seller or Parent from taking such
actions as may be required to comply with applicable law.
8.05 Further Assurances. From and after the date hereof, each party hereto
agrees to execute and deliver such instruments and to take such other
actions as the other party hereto may reasonably request in order to
carry out and implement this Agreement. The parties shall cooperate
with each other in executing any necessary and proper documents and
notices as may be appropriate in furtherance of the foregoing covenant
and consistent with the terms of this Agreement. The covenants of each
of the parties hereto pursuant to this Section 8.05 shall survive the
Closing.
8.06 Information After Closing. For a period of seven (7) years following
the Closing, upon written request of Seller to Buyer or Buyer to
Seller, as the case may be, such requested party shall provide the
requesting party with reasonable access to, or copies of, information
and records relating to the Branch which are then in the possession or
control of the requested party reasonably necessary to permit the
requesting party or any of its subsidiaries or affiliates to comply
with or contest any applicable legal, tax, banking, accounting, or
regulatory policies or requirements, or any legal or regulatory
proceeding thereunder or requests related to customer relationships at
the Branch prior to Closing. In the event of any such requests, the
requesting party shall reimburse the requested party for the
reasonable costs of the requested party related to such request.
8.07 Survival of Covenants. The obligations and covenants of the parties
under this Section 8 shall survive the Closing.
8.08 Individual Retirement Accounts. Any IRAs related to the Branch for
which Seller, on or before the Closing Date, shall have received
written advice from the account holder of such account holder's
objection or failure to accept Buyer as successor custodian or trustee
shall not be assigned by Seller to Buyer or assumed by Buyer. Seller
may thereafter, at its option, elect to retain such IRAs, advise the
account holders that it has withdrawn its resignation as custodian or
transfer the amount in such IRAs to the account holders.
8.09 Covenant Not to Compete. From and after the Closing and for a period
of two years following the Closing Date, neither Seller nor Parent
shall, within a fifty mile radius of the Branch, operate a full
service branch, make loans, accept deposits, cash checks, or provide
securities brokerage, insurance, trust or asset management services.
8.10 Exclusivity. From the period of time beginning with the date of this
Agreement through the Termination Date (as hereinafter defined),
neither Seller, Parent nor its respective affiliates will (a) solicit,
initiate, encourage or accept any other inquiries, proposals or offers
from any individual, partnership, limited liability company, firm,
corporation, association, trust, unincorporated organization or other
entity, as well as any syndicate or group that would be deemed to be a
person under Section 13(d)(3) of the Securities Exchange Act of 1934,
as amended (collectively "Person") relating to (x) any purchase of all
or any substantial portion of the Assets, (y) assumption of all or a
substantial part of the Assumed Liabilities or (z) any other
extraordinary business transaction involving or otherwise relating to
the Branch (each of the transactions described in clauses (x), (y) and
(z) being referred to herein as an "Alternative Transaction"), or (b)
participate in any discussions, conversations, negotiations or other
communications with any other Person regarding, or furnish to any
other Person any information with respect to, or otherwise cooperate
in any way, assist or participate in, facilitate or encourage any
effort or attempt by any other Person to seek to consummate, any
Alternative Transaction.
8.11 Access to Information. So long as this Agreement remains in effect,
Seller will give to Buyer full access during normal working hours to,
and furnish them with, all documents, records, work papers and
information with respect to the Branch business, as the Buyer shall
from time to time reasonably request. In addition, Seller will permit
the Buyer reasonable access to such personnel of the Branch during
normal business hours as may be necessary or useful to the Buyer in
its review of documents, records, work papers and information with
respect to the Branch business.
9. TERMINATION.
9.01 Termination by Mutual Agreement. This Agreement may be terminated and
the transactions contemplated hereby may be abandoned by mutual
consent of the parties.
9.02 Termination by Seller. This Agreement may be terminated and the
transactions contemplated hereby abandoned by Seller:
(a) in the event of a material breach by Buyer of this Agreement; or
(b) on or after midnight, Grand Forks, North Dakota time, December
31, 2002, (the "Termination Date") if the Closing has not then
occurred unless the failure to consummate by such time is due to
a breach of this Agreement by Seller.
9.03 Termination by Buyer. This Agreement may be terminated and the
transactions contemplated hereby abandoned by Buyer:
(a) in the event of a material breach by Seller of this Agreement; or
(b) on or after the Termination Date if the Closing has not then
occurred unless the failure to consummate by such time is due to
a breach of this Agreement by Buyer.
9.04 Effect of Termination. The termination of this Agreement pursuant to
Sections 9.02 or 9.03 of this Article 9 shall not release any party
hereto from any liability or obligation to the other party hereto
arising from a breach of any provision of this Agreement occurring
prior to the termination hereof. If the transactions contemplated by
this Agreement are not consummated as a result of a breach of this
Agreement as described in either Section 9.02(a) or Section 9.03(a),
the breaching party shall be responsible for and shall, as
appropriate, reimburse the other party for its reasonable
out-of-pocket expenses (including attorneys' fees) incurred in
connection with the preparation, negotiation and execution of this
Agreement.
10. MISCELLANEOUS PROVISIONS.
10.01 Expenses. Except as and to the extent specifically allocated
otherwise herein, each of the parties hereto shall bear its own
expenses, whether or not the transactions contemplated hereby are
consummated.
10.02 Certificates. All statements contained in any certificate
("Certificate") delivered by or on behalf of Seller, Parent or Buyer
pursuant to this Agreement or in connection with the transactions
contemplated hereby shall be deemed to be representations and
warranties of the party delivering the Certificate hereunder. Each
such Certificate shall be executed on behalf of the party delivering
the Certificate by duly authorized officers of such party.
10.03 Notices. All notices and other communications hereunder may be made
by mail, hand-delivery or by courier service and notice shall be
deemed to have been given when received; provided, however, if notices
and other communications are made by nationally recognized overnight
courier service for overnight delivery, such notice shall be deemed to
have been given one business day after being forwarded to such a
nationally recognized overnight courier service for overnight
delivery.
If to Seller or Parent:
BNCCORP, Inc.
000 Xxxx Xxxx
Xxxxxxxx, Xxxxx Xxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxxx, President and CEO
If to Buyer:
Alerus Financial, National Association
X.X. Xxx 0000
Xxxxx Xxxxx, Xxxxx Xxxxxx 00000
Attention: Xxxxx X. Xxxxxx, Chairman, President and CEO
or such other person or address as any such party may designate by
notice to the other parties, and shall be deemed to have been given as
of the date received.
10.04 Parties In Interest; Amendment. The rights and obligations of Seller,
Parent and Buyer shall be exclusively and individually binding upon,
and shall inure exclusively and individually to the benefit of,
Seller, Parent and Buyer and the respective permitted successors or
assigns of each party. This Agreement is binding upon and is for the
benefit of the parties hereto and their respective successors, legal
representatives, and assigns, and no person who is not a party hereto
(or a permitted successor or assignee of such party) shall have any
rights or benefits under this Agreement, either as a third party
beneficiary or otherwise. This Agreement cannot be amended or
modified, except by a written agreement executed by the parties hereto
or their respective permitted successors and assigns.
10.05 Headings. The headings, table of contents, and index to defined terms
(if any) used in this Agreement are inserted for convenience of
reference only and are not intended to be a part of or to affect the
meaning or interpretation of this Agreement.
10.06 Terminology. The specific terms of art that are defined in various
provisions of this Agreement shall apply throughout this Agreement
(including without limitation each Schedule hereto), unless expressly
indicated otherwise. In addition, the following terms and phrases
shall have the meanings set forth for purposes of this Agreement
(including such Schedule):
(a) The term "business day" shall mean any day other than a Saturday,
Sunday, or a day on which either Seller or Buyer is closed in
accordance with applicable law or regulation. Any action, notice,
or right which is to be taken or given or which is to be
exercised or lapse on or by a given date which is not a business
day may be taken, given, or exercised, and shall not lapse, until
the next business day following.
(b) The term "affiliate" shall mean, with respect to any person, any
other person directly or indirectly controlling, controlled by or
under common control with such person.
(c) The term "Permitted Exceptions" shall mean, with respect to the
Branch Real Estate,
(i) statutory liens for current taxes or assessments not yet
due, or if due not yet delinquent, or the validity of which
is being contested in good faith by appropriate proceedings;
(ii) such other easements, restrictions, and encumbrances (but in
all cases of Branch Real Estate excluding those which secure
borrowed money) which, individually and in the aggregate, do
not detract from the value of, or interfere with the present
use of, any property subject thereto or affected thereby;
and
(iii) such other exceptions as are approved by Buyer in writing.
(d) The term "person" shall mean any individual, corporation
partnership, limited liability company, association, trust, or
other entity, whether business, personal, or otherwise.
(e) Unless expressly indicated otherwise in a particular context, the
terms "herein," "hereunder," "hereto," "hereof," and similar
references refer to this Agreement in its entirety and not to
specific articles, sections, schedules, or subsections of this
Agreement. Unless expressly indicated otherwise in a particular
context, references in this Agreement to enumerated articles,
sections, and subsections refer to designated portions of this
Agreement (but do not refer to portions of any Schedule unless
such Schedule is specifically referenced) and do not refer to any
other document.
10.07 Press Releases. Any and all public announcements of any kind or nature
whatsoever concerning the transactions contemplated hereby made
before, on or after the Closing Date shall require the prior written
approval of Buyer and Seller. Contemporaneously with the signing of
this Agreement, Buyer and Seller shall jointly prepare and issue a
written public communication regarding the execution of the Agreement
to be sent to all customers having dealings with the Branch.
10.08 Entire Agreement. This Agreement supersedes any and all oral or
written agreements and understandings heretofore made relating to the
subject matter hereof and contains the entire agreement of the parties
relating to the subject matter hereof. All schedules, exhibits, and
appendices to this Agreement are incorporated into this Agreement by
reference and made a part hereof.
10.09 Governing Law. This Agreement shall be governed by, and construed in
accordance with, the internal laws of the State of North Dakota.
10.10 Counterparts. This Agreement may be executed in several counterparts,
each of which shall be deemed an original, but all of which together
shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective officers thereunto duly authorized, all as of
the date first above written.
BNC NATIONAL BANK
By: /s/ Xxxxxxx X. Xxxxxxxxx
___________________________________________
Xxxxxxx X. Xxxxxxxxx
President and CEO
BNCCORP, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxx
___________________________________________
Xxxxxxx X. Xxxxxxxxx
President and CEO
ALERUS FINANCIAL, NATIONAL ASSOCIATION
By: /s/ Xxxxx X. Xxxxxx
___________________________________________
Xxxxx X. Xxxxxx
Chairman, President and CEO
SCHEDULES
TO
BRANCH PURCHASE AND ASSUMPTION AGREEMENT
Schedule 1.01 - Description of Branch Real Estate
Schedule 1.02(b) - Tangible Assets
Schedule 1.02(c) - Safe Deposit Leases
Schedule 1.02(e) - Prepaid Expenses
Schedule 1.02(f) - Branch Loans
Schedule 1.02(f)(ii) - Excluded Loans
Schedule 1.02(h) - Assumed Contracts
Schedule 1.02(i) - Real Property Leases
Schedule 1.03(b) - Deposit Accounts
Schedule 1.04(d) - Excluded Assets
Schedule 1.05(b) - Allocation of Assets
Schedule 3.01(c) - Consents of Seller
Schedule 3.02(c) - Consents of Parent
Schedule 3.01(m) - Form of Deposit Account Agreement
Schedule 3.01(q)(iii) - Branch Loans in Default or Past Due
Schedule 3.01(i) - Insurance Policies
Schedule 3.03(c) - Consents of Buyer
Schedule 4.02 - Form of Employee Retention Program
Schedule 5.01(b) - Form of Certification of Buyer
Schedule 5.02(b) - Form of Certification of Seller
Schedule 5.02(c) - Form of Certification of Parent
Schedule 6.02(h) - Form of Xxxx of Sale, Assignment and Assumption
Schedule 6.04(a) - Form of Preliminary Closing Statement
Schedule 6.04(b) - Form of Final Closing Statement
