EXHIBIT 10.97
COAST PURCHASE
AGREEMENT
---------
NOVEMBER 6, 1998
AGREEMENT FOR PURCHASE OF ASSETS
THIS AGREEMENT FOR PURCHASE OF ASSETS (hereinafter called Agreement) made
this 5th day of November, 1998, by and between Norwest Financial Coast, Inc., a
California corporation (Seller), with an address of 000 0xx Xxxxxx, Xxx Xxxxxx,
Xxxx 00000 and Pan American Bank, FSB (PanAm Bank), a federally chartered
savings bank, with an address of 0000 Xxxxx Xx Xxxxxx Xxxx, Xxx Xxxxx,
Xxxxxxxxxx 00000, and BPN Corporation (BPN), a California corporation, with an
address of 00000 Xxxxxxxx Xxxxxx, Xxxxx, Xxxxxxxxxx 00000 (PanAm Bank together
with BPN hereinafter referred to as Buyer).
1. For a sum equal to Three Million and 00/100 Dollars ($3,000,000.00)
(the Purchase Price); (i) Buyer agrees to purchase and Seller agrees to sell to
Buyer, Seller's equipment, furniture, fixtures, personal computers (including
computer equipment located in insurance policy producers' offices), proprietary
premium finance software (including source code and all existing copies),
business forms, goodwill relating to the "premium finance business," the rights
to pursue the business provided by the network of producers (independent
insurance agents and brokers) who refer their customers to Seller for insurance
premium financing (and all files, contracts and records with respect to said
producers), all as described on Schedule A attached hereto and incorporated
herein (the Assets), (ii) Buyer and Seller agree to enter into the Non-
Competition Agreement set forth on Schedule B, and (iii) Buyer agrees to
purchase and Seller agrees to sell to Buyer the names "Coast" and "Coast
Program" and any federal, state or common law trademark and service xxxx rights
or copyrights that may be associated therewith, and all other trade names and
service marks used or usable by Seller in conjunction with the "premium finance
business." The closing date shall be November 6, 1998 (the Closing Date). On
the Closing Date, Buyer shall pay to Seller the Purchase Price by wire transfer
in immediately available funds. Seller and Buyer agree that (x) Schedule A is a
representative list of the physical assets of Seller at its office located at
0000 Xxxxxx Xxxxxx, Suites 110, 200 and 000, Xxxxxx Xxxx, Xxxxxxxxxx 00000, and
may or may not include all of such assets to be transferred to Buyer hereunder;
(y) Seller makes no representations or warranties regarding the condition of the
-2-
Assets, and Buyer accepts them strictly in their "as is" condition; and (z)
Seller is not transferring to Buyer any of Seller's receivables (including,
without limitation any loans or contracts) generated in connection with its
premium finance business, or any other asset or assets not identified on
Schedule A or otherwise described herein. Seller shall deliver to Buyer on the
Closing Date a complete list of all independent insurance agents, brokers and
other producers, including addresses, phone and fax numbers (which are available
to Seller), included within the Assets, together with production levels for the
last quarter in an ASCII formatted computer disc.
2. Seller represents and warrants, as of the date of this Agreement and
as of the Closing Date, that:
(a) It owns outright and has full and perfect title to all of the Assets
and other property transferred hereunder, free and clear of all
claims, liens, pledges and other encumbrances of any kind whatsoever.
(b) It is a duly formed and validly existing corporation and has full
power and authority to sell, assign, transfer and convey the Assets
and other tangible and intangible property transferred hereunder to
the Buyer, and all necessary proceedings on the part of the Seller
have been or will be duly taken prior to the Closing Date to authorize
the sale.
3. Buyer represents and warrants:
(a) Each is a duly formed and validly existing corporation, with full
power, authority, and legal right, including but not limited to all
necessary licenses, to acquire the Assets and other property
transferred hereunder, enter into this Agreement, and perform all of
its obligations under this Agreement and to carry out the transactions
contemplated hereby.
-3-
(b) All necessary corporate action on the part of the Buyer has been or
will be duly taken to authorize the purchase and this Agreement has
been executed by a duly authorized officer.
4. For and in consideration of the mutual agreements set forth herein,
the Buyer does hereby grant to Seller a license to use any or all of the Assets,
and the names and trademarks identified in paragraph 1, for a period of one (1)
year from the Closing Date at no cost to Seller for the sole purpose of
servicing insurance premium finance receivables funded by Seller prior to the
Closing Date or during the period set forth in Section 13. Provided, however,
if Seller shall require the use of the Assets for a period of time beyond one
(1) year, Seller shall notify Buyer at least sixty (60) days prior to the
expiration of said one (1) year term, and said license shall be extended at no
cost, for an additional period of six (6) months. If Seller shall require the
extension of the license beyond said additional six (6) months, it shall be on
terms and conditions mutually acceptable to the parties. At the end of the
license period, Seller shall deliver the Assets to Buyer free and clear of all
claims, liens, pledges and other encumbrances, and in the same condition as of
the date of hereof, ordinary wear and tear excepted. The Buyer shall be
responsible for any cost associated with moving the Assets from Seller's
location. After the end of the license period, Seller shall no longer be
authorized to utilize the Assets.
5. From the date hereof to the Closing Date, Seller covenants with Buyer
as set forth below:
(a) Seller shall conduct its business in the ordinary and normal course of
business and consistent with past practice, including, without
limitation, credit granting standards, marketing, and charge-off
policy and practice.
(b) Seller will use its best efforts to keep its business organization
intact and to maintain its assets.
-4-
6. From the date hereof to the Closing Date, Buyer covenants with Seller
as follows: It will promptly use its best efforts to obtain all government and
regulatory consents, approvals, licenses or other notices or filings, if any,
which will be necessary for the full performance of Buyer under this Agreement.
7. Buyer's obligation to purchase and pay for the Assets and other
property transferred hereunder shall be subject, to the extent not waived with
respect to all or any portion of the assets, to the satisfaction of each of the
following conditions at the closing.
(a) The representations and warranties in favor of Buyer contained in this
Agreement shall be true and correct in all material respects as of the
date when made and on and as of the Closing Date as though such
representations and warranties had been made on and as of the Closing
Date.
(b) Seller shall have performed and complied in all material respects with
all covenants, conditions and agreements required by this Agreement to
be performed or complied with.
(c) Seller shall have executed and delivered to Buyer a certified copy of
the resolution of its Board of Directors authorizing the sale of
assets pursuant to this Agreement.
(d) No court or governmental authority of competent jurisdiction shall
have issued an order restraining, enjoining or otherwise prohibiting
the consummation of the transactions contemplated by this Agreement.
8. Seller's obligation to sell the Assets and other property transferred
hereunder shall be subject to the satisfaction of the following condition(s) at
closing:
-5-
(a) Buyer shall have executed and delivered to Seller a certified copy of
the resolution of its Board of Directors authorizing the purchase of
assets pursuant to this Agreement.
(b) Buyer shall have performed and complied in all material respects with
all covenants, conditions and agreements required by this Agreement to
be performed or complied with by Buyer.
(c) The representation(s) and warranties of Buyer in this Agreement shall
be true and correct in all material respects as of the date when made
and on and as of the Closing Date as though such representations and
warranties had been made on and as of the Closing Date.
9. Except as specifically limited in this Agreement, all representations,
warranties, covenants, and obligations in this Agreement and any certificate or
document delivered pursuant to this Agreement will survive the Closing Date for
the longer of; (a) one (1) year, or (b) the period of the license granted to
Seller under Section 4 hereof.
10. Seller will indemnify and hold harmless Buyer and its affiliates
(collectively hereinafter called the Buyer Indemnified Persons) for, and will
pay to the Buyer Indemnified Persons the amount of, any loss, liability, claim,
damage, expense (including costs of investigation and defense and reasonable
attorneys' fees) or diminution of value, whether or not involving a third-party
claim (collectively hereinafter called Damages) arising, directly or indirectly,
from or in connection with any liability of Seller to any third-party, whenever
arising (including any liabilities related to Seller's activities under the
license granted under Section 4), and in connection with any breach of any
representation or warranty made by Seller in this Agreement or any other
certificate or document delivered by Sellers pursuant to this Agreement. Buyer
will indemnify and hold harmless Seller and its affiliates (collectively
hereinafter called the Seller Indemnified Persons) for,
-6-
and will pay to the Seller Indemnified Persons the amount of, any Damages
arising, directly or indirectly, from or in connection with any breach of any
representation or warranty made by Buyer in this Agreement. The remedies
provided in this paragraph 10 are not exclusive and do not limit any other
remedies that may be available to Seller, Buyer or any other indemnified
persons.
11. Buyer and Seller agree to the transition procedures as outlined in
Schedule C and each party will use its best efforts to adhere to such
procedures.
12. Buyer and Seller shall consult with each other and obtain each other's
approval before issuing any press release or otherwise making any public
statements with respect to this Agreement or the transactions contemplated
hereby; provided however, that nothing contained herein shall prohibit either
party from making a communication directed to its employees or the employees of
any of its affiliates as long as it is consistent with the transition procedures
in Schedule C, or from making such disclosure as required to its regulatory
authorities, or from making such disclosures as it deems necessary to its
financial rating agencies. Buyer shall not contact any of Seller's employees
without first obtaining Seller's written consent.
13. Buyer shall be permitted to interview those certain employees of
Seller who work at its office located at 0000 Xxxxxx Xxxxxx, Suites 110, 200 and
000, Xxxxxx Xxxx, Xxxxxxxxxx 00000, and all sales representatives, as specified
in writing by Seller. Buyer may, in its sole discretion, offer employment to
any of the foregoing employees. Such interviews shall take place at times and
at a place acceptable to Seller. Seller shall retain responsibility for all of
the employee related liabilities and benefits with respect to the Seller's
employees not hired by Buyer (whether incurred, or arising out of or relating to
acts, omissions, events, or occurrences taking place before, on or after the
Closing Date), and Seller agrees to pay any such liabilities or employee benefit
claims related to those employees when due (whether incurred, or arising out of
or relating to acts, omissions, events, or occurrences taking place before, on
or after the Closing
-7-
Date) subject to Seller's right to contest its liability. Seller shall retain
responsibility for all of the employee related liabilities and benefits with
respect to any of Seller's employees hired by Buyer incurred, or arising out of
or relating to acts, omissions, events or occurrences taking place on or before
the Closing Date, or otherwise during their employment by Seller, and Seller
agrees to pay any such liabilities or employee benefit claims when due, subject
to Seller's right to contest its liability. Nothing in this paragraph shall be
construed to make any of Seller's employee a third party beneficiary under this
Agreement.
14. On November 10, 1998, or on such date as may be mutually agreed upon
(the Notice Date), Seller shall send written notice to all insurance agents and
brokers known or believed to be likely to submit "premium finance" loan
applications to Seller, stating that (a) Seller has sold and the Buyer has
purchased the "premium finance business," (b) all references to "Norwest
Financial Coast, Inc." and/or "Dial Bank" on loan applications and agreements
previously distributed to them by Seller should be deleted as soon as reasonably
practical, and in any event within sixty (60) days after the Closing Date, and
(c) all loan applications and agreements bearing the name "Norwest Financial
Coast, Inc." and/or "Dial Bank" should be destroyed within sixty (60) days of
the Closing Date. Buyer shall distribute new applications and agreements to the
agents and brokers as soon as possible, but in no event later than forty-five
(45) days after the Closing Date. Until thirty (30) days after the Notice Date,
Seller shall continue to process any and all loan applications and agreements
received by Seller, and any loans made by Seller pursuant to such an application
shall be the property of Seller. Thereafter, whether or not the agents and
brokers use the loan applications and agreements bearing the name "Norwest
Financial Coast, Inc" and/or "Dial Bank," any and all applications received by
Seller shall be submitted for approval and acceptance to the Buyer, and Seller
shall have no other responsibility thereunder, except as provided under the
Master Assignment Agreement. For all applications and agreements received by
Seller after the date which is thirty (30) days following the Notice Date,
Seller hereby assigns all of its right, title and interest in, to and under such
applications and agreements
-8-
and the Buyer assumes all liabilities and obligations of Seller, if any,
thereunder, except as provided under Schedule C or the Master Assignment
Agreement.
15. The parties hereto agree that this Agreement constitutes a sale of
"assets" and not a sale of the corporate entities "Norwest Financial Coast,
Inc." or "Premium Service/Norwest Financial Coast, Inc." and Seller shall
continue to have the right to bring or defend actions in its corporate names.
Seller agrees that Buyer has not assumed any liabilities of Seller or any
affiliated entities and all such liabilities shall remain the responsibility of
and be discharged by Seller. Seller has not transferred to Buyer the right to
use the names "Norwest Financial Coast, Inc." or "Premium Service/Norwest
Financial Coast, Inc." and any of the state or common law trademark and service
xxxx rights or copyrights that may be associated therewith and not transferred
to Buyer under Section 1 of this Agreement. Seller agrees herein to use the
names "Norwest Financial Coast, Inc." and/or "Premium Service/Norwest Financial
Coast, Inc." for the sole purposes of running-off of its current receivables and
bringing and defending actions with respect to the premium finance business
previously originated by Seller and the business originated pursuant to the
terms hereof, and shall not market any products or services using the name
"Coast." Buyer agrees that if in connection with any such actions, Seller
requires access to any of the equipment, or copies of any of the records or
documents transferred hereunder, Buyer shall (at no cost to Buyer) provide
Seller access to such equipment or copies of such documents or records.
16. This Agreement, the Non-Competition Agreement set forth as Schedule B,
and the Master Assignment Agreement of even date hereof, (a) constitutes the
entire agreement and supersedes all other prior agreements and understandings,
both written and oral, between the parties or their affiliates, with respect to
the subject matter hereof, (b) shall not be assigned by Buyer (other than to
such affiliated companies as it may designate) or by Seller by operation of law
or otherwise, without the consent of the other, (c) shall be governed in all
respects, including validity, interpretation and effect by the laws of the State
of California (excepting those conflicts
-9-
of laws provisions which would serve to defeat application of California law),
and (d) may be executed in two or more counterparts, each of which shall be
deemed an original but all of which shall constitute but one instrument.
17. With the prior written consent of Seller, Buyer may assign its rights
under this Agreement to an affiliate.
18. Each party will be responsible for its own legal and out-of-pocket
expenses related to this transaction.
[Signature Page Follows]
-10-
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
BUYER: SELLER:
Pan American Bank, FSB, a federally Norwest Financial Coast, Inc., a
chartered savings bank California corporation
By: /s/ Xxxxxxx Xxxx By: /s/ [SIGNATURE ILLEGIBLE]
----------------------------- --------------------------------
Title: Chairman Title: President
-------------------------- -----------------------------
BPN Corporation, a California
corporation
By:
-----------------------------
Title:
--------------------------
-11-
Schedule A
[See Attached]
Schedule A
1. All equipment
2. All furniture
3. All fixtures
4. Personal computers (including computer equipment located in insurance policy
producers' offices)
5. Proprietary premium finance software (including source code and all existing
copies)
6. Business forms
7. Goodwill relating to the "premium finance business"
8. The rights to pursue the business provided by the network of producers
(independent insurance agents and brokers) who refer their customers to
Seller for insurance premium financing (including all files, contracts and
records with respect to said producers)
9. All assets not listed above but included in the documentation of Seller
assets previously provided to Buyer by Seller
