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PURCHASE AND ASSUMPTION AGREEMENT
dated as of
October 15, 1996
between
XXXXX FARGO BANK, N.A.
and
HERITAGE OAKS BANK
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List of Schedules
Schedule 1.1(a) Assumed Severance Obligations
Schedule 1.1(b) Branches/Real Properties
Schedule 3.6(a) Form of California Grant Deed
Schedule 3.6(b) Form of Xxxx of Sale
Schedule 3.6(c) Form of Assignment and Assumption Agreement
Schedule 3.6(d) Form of Assignment of Lease and Assumption
Schedule 3.6(e) Form of Landlord Consent
Schedule 3.6(g) Form of Certificate of Officer, Xxxxx Fargo
Bank, National Association
Schedule 3.7(d) Form of Certificate of Officer [Purchaser]
Schedule 5.4 Tenant Leases
Schedule 5.6 Litigation and Undisclosed Liabilities
Schedule 5.16 Environmental Matters
Schedule 8.1 Outstanding Tax Liabilities
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This PURCHASE AND ASSUMPTION AGREEMENT, dated as of this 15th day of
October, 1996 (this "Agreement"), is by and between Xxxxx Fargo Bank, N.A.
("Seller") and Heritage Oaks Bank ("Purchaser").
RECITALS
A. Seller. As of the date hereof, Seller is a national banking
association, organized under the laws of the United States, with its principal
office located in San Francisco, California.
B. Purchaser. Purchaser is a state chartered bank, organized
under the laws of California, with its principal office located in Paso Xxxxxx,
California.
C. Purchaser desires to acquire from Seller, and Seller desires
to transfer to Purchaser, certain banking premises and certain deposits and
deposit related loans associated therewith, located in the State of California,
all in accordance with and subject to the terms and conditions of this
Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual
promises and obligations set forth herein, the parties agree as follows:
ARTICLE 1
CERTAIN DEFINITIONS
1.1 Certain Definitions. The terms set forth below are used in
this Agreement with the following meanings:
"Accrued Interest" means, as of any date, (a) with respect to a
Deposit, interest which is accrued on such Deposit to but excluding such date
and not yet posted to the relevant deposit account and (b) with respect to a
Deposit Related Loan, interest which is accrued on such Deposit Related Loan to
but excluding such date and not yet paid.
"ACH Direct Deposit Cut-Off Date" has the meaning set forth in Section
4.3.
"Adjusted Payment Amount" has the meaning set forth in Section 3.3
"Adjustment Date" has the meaning set forth in Section 3.3.
"Affiliate" means, with respect to any person, any other person
directly or indirectly controlling, controlled by or under common control with
such person.
"Agreement" means this Purchase and Assumption Agreement, including all
schedules, exhibits and addenda, each as amended from time to time in
accordance with the terms hereof.
"Allocation Statement" has the meaning set forth in Section 3.4(a).
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"Asbestos Hazard" means the presence of asbestos in a parcel of Owned
Real Property or the improvements thereon as of the date hereof which, under
applicable laws, must be immediately remediated in order to allow continuation
of the current operation of the Branch within such Owned Real Property using
the current improvements thereon and the cost of such remediation, as
reasonably determined by the Environmental Consultant, shall be more than One
Hundred Thousand Dollars ($100,000).
"Assets" has the meaning set forth in Section 2.1(a).
"Assignment and Assumption Agreement" has the meaning set forth in
Section 3.6(c).
"Assumed Severance Obligations" means those duties, responsibilities,
obligations and liabilities of Seller or of its Affiliates under the severance
and similar plans described in Schedule 1.1(a) to pay severance and provide
benefits to any Branch Employee or Transferred Employee.
"Branch Employees" means, the employees of the Seller working at the
Branches on the Closing Date (including, without limitation, those employees
who on the Closing Date are on family and medical leave, military leave or
personal or pregnancy leave and who are eligible to return to work under
Seller's policies), subject to any transfers permitted pursuant to Section 7.1
and replacement in the ordinary course of business of employees who may leave
Seller's employ between the date hereof and the Closing Date.
"Branch Leases" means the leases under which Seller leases land and/or
buildings used as Branches, including without limitation ground leases.
"Branches" means each of the branch banking offices of Seller at the
locations identified on Schedule 1.1(b) hereto.
"Burdensome Condition" has the meaning set forth in Section 9.1(a).
"Business Day" means a day on which banks are generally open for
business in California and which is not a Saturday or Sunday.
"Cash on Hand" means, as of any date, all xxxxx cash, vault cash,
teller cash, ATM cash, prepaid postage and cash equivalents held at a Branch.
"Closing" and "Closing Date" refer to the closing of the P&A
Transaction, which is to be held at such time and date as provided in Article 3
hereof.
"Code" means the Internal Revenue Code of 1986, as amended.
"Deposit Related Loans" means the following loans and only the
following: (i) any consumer loan secured directly by a Deposit being sold (but
not including any credit card line of
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credit); and (ii) any overdraft loan linked directly to a Deposit being sold
(but not including any credit card protection relationship). No other loans
are being sold.
"Deposit(s)" means deposit liabilities with respect to deposit accounts
booked by Seller at the Branches, as of the close of business of the day prior
to the Closing Date, which constitute "deposits" for purposes of the Federal
Deposit Insurance Act. 12 U.S.C. Section 1813, including collected and
uncollected deposits and Accrued Interest, but excluding: (a) all Excluded
Deposits; (b) deposit liabilities with respect to accounts registered in the
name of a trust for which Seller serves as trustee (other than XXX and Xxxxx
Account deposit liabilities); (c) deposit liabilities with respect to accounts
booked by Seller at any Branch for which Seller serves as guardian or custodian
(other than XXX and Xxxxx Account deposit liabilities); and (d) Excluded
XXX/Xxxxx Account Deposits.
"Draft Closing Statement" means a draft closing statement, prepared by
Seller, as of the close of business of the third (3rd) business day preceding
the Closing Date setting forth an estimated calculation of both the Purchase
Price and the Estimated Payment Amount.
"Encumbrances" means all mortgages, claims, charges, liens,
encumbrances, easements, limitations, restrictions, commitments and security
interests, except for statutory liens securing tax and/or other payments not
yet due, liens incurred in the ordinary course of business, including without
limitation liens in favor of mechanics or materialmen, and such other liens,
charges, security interests or encumbrances as do not materially detract from
the value or materially and adversely affect the use of the properties or
assets subject thereto or affected thereby or which otherwise do not materially
impair the value of or business operations at such properties and except for
obligations pursuant to the California escheat and unclaimed property laws
relating to the Escheat Deposits.
Environmental Consultant has the meaning specified in Section 10.1(b).
"Environmental Hazard" means the presence of any Hazardous Substance in
violation of, and reasonably likely to require material remediation costs
under, applicable Environmental Laws; provided, however, that the definition of
Environmental Hazard shall not include asbestos and asbestos-containing
materials, unless, with respect to any single parcel of Owned Real Property,
the cost of remediation, as reasonably determined by the Environmental
Consultant, shall be more than One Hundred Thousand Dollars ($100,000). Any
such determination shall be based upon a "risk-based approach" of what would be
necessary to obtain the equivalent of a "no further action letter" from the
applicable regulatory agency or agencies with no deed restrictions which would
adversely affect the commercial use of the parcel of Owned Real Property.
"Environmental Law" means any Federal or state law, statute, rule,
regulation, code, order, judgment, decree, injunction or agreement with any
Federal or state governmental authority, (x) relating to the protection,
preservation or restoration of the environment (including, without limitation,
air, water vapor, surface water, groundwater, drinking water supply, surface
land, subsurface land, plant and animal life or any other natural resource) or
to human health or safety or (y) the exposure to, or the use, storage,
recycling, treatment, generation, transportation,
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processing, handling, labeling, production, release or disposal of hazardous
substances, in each case as amended and now in effect. Environmental Laws
include, without limitation, the Clean Air Act (42 USC Section 7401 et seq.);
the Comprehensive Environmental Response Compensation and Liability Act (42 USC
Sections 9601 et seq.); the Resource Conservation and Recovery Act (42 USC
Section 96901 et seq.); the Federal Water Pollution Control Act (33 USC Sections
1251 et seq.); the Occupational Safety and Health Act (29 USC Section 651 et
seq.); the California Xxxxxx-Cologne Act (Cal. Water Code Section 13000 et seq.)
and the California Xxxxxxxxx-Xxxxxxx-Xxxxxx Hazardous Substance Account Act
(Cal. Health & Safety Code Sections 25300 et seq.); provided, however, that the
definition of "Environmental Law" shall not include any Federal or state law,
statute, rule, regulation, code, order, judgment, decree, injunction or
agreement with any governmental authority relating to asbestos or
asbestos-containing materials.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Escheat Deposits" means, as of any date, Deposits and safe deposit box
contents, in each case held on such date at the Branches which become subject
to escheat, in the calendar year in which the Closing occurs, to the State of
California pursuant to applicable escheat and unclaimed property laws.
"Estimated Payment Amount" has the meaning set forth in Section 3.2(a).
"Estimated Purchase Price" means the Purchase Price as set forth on the
Draft Closing Statement.
"Excluded XXX/Xxxxx Account Deposits" has the meaning set forth in
Section 2.4(c).
"Excluded Deposits" means: (i) all wholesale commercial deposits
(i.e., with account analysis or cash management services); and (ii) certain
business related deposit liabilities excluded by Seller. All Excluded Deposits
have been previously removed from deposit lists provided to Purchaser.
"FDIA" means the Federal Deposit Insurance Act, as amended.
"FDIC" means the Federal Deposit Insurance Corporation.
"Federal Funds Rate" on any day means the per annum rate of interest
(rounded upward to the nearest 1/100 of 1%) which is the weighted average of
the rates on overnight federal funds transactions arranged on such day or, if
such day is not a Business Day, the previous Business Day, by federal funds
brokers computed and released by the Federal Reserve Bank of New York (or any
successor) in substantially the same manner as such Federal Reserve Bank
currently computes and releases the weighted average it refers to as the
"Federal Funds Effective Rate" at the date of this Agreement.
"Federal Reserve Board" means the Board of Governors of the Federal
Reserve System.
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"FedWire Direct Deposit Cut-off Date" has the meaning set forth in
Section 4.3.
"Final Closing Statement" means a final closing statement, prepared by
Seller, as of the ninetieth (90th) day following the Closing Date setting forth
both the Purchase Price and the Adjusted Payment Amount.
"Grant Deeds" has the meaning set forth in Section 3.6(a).
"Hazardous Substance" means any substance, whether liquid, solid or gas
(a) listed, identified or designated as hazardous or toxic to a level which
requires remediation under any Environmental Law; (b) which, applying criteria
specified in any Environmental Law, is hazardous or toxic; or (c) the use or
disposal of which is regulated under Environmental Law.
"XXX" means an "individual retirement account" or similar account
created by a trust for the exclusive benefit of an individual or his
beneficiaries in accordance with the provisions of Section 408 of the Code.
"IRS" means the Internal Revenue Service.
"Xxxxx Account" means an account created by a trust for the benefit of
employees (some or all of whom are owner-employees) and that complies with the
provisions of Section 401 of the Code.
"Landlord Consents" has the meaning set forth in Section 3.6(e).
"Lease Agreement" means a lease entered into pursuant to Section
10.1(c) upon such specific terms and conditions as contemplated by such Section
and such other commercially reasonable terms and conditions as are customary in
a "triple net" lease of a bank branch facility in the State of California.
"Lease Assignment" has the meaning set forth in Section 3.6(d).
"Liabilities" has the meaning set forth in Section 2.2.
"Loans" means Deposit Related Loans only. No other loans are being
sold.
"Loan Documents" means all documents included in Seller's files with
respect to a Deposit Related Loan, including, without limitation, notes
security agreements, loan agreements, guaranties, and all modifications,
waivers and consents relating to any of the foregoing.
"Loan Value" means with respect to a Deposit Related Loan and as of a
date, the unpaid principal balance of any such Loan plus Accrued Interest
thereon.
"Loss" means the amount of losses, liabilities, damages (including
forgiveness or cancellation of obligations) and expenses (including reasonable
expenses of investigation and
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reasonable attorneys' fees and expenses in connection with any action, suit or
proceeding) incurred or suffered by the indemnified party or its Affiliates in
connection with the matters described in Section 12.1, less the amount of the
economic benefit (if any) to the indemnified party or its Affiliates occurring
or reasonably anticipated to occur in connection with any such damage, loss,
liability or expense (including Tax benefits obtainable under applicable law,
amounts recovered under insurance policies net of deductibles, recovery by
setoffs or counterclaims, and other economic benefits).
"Material Adverse Effect" means (a) with respect to Seller, a material
adverse effect on the business or direct economic results of operations of the
Branches, taken as a whole, or on the ability of Seller timely to consummate
the P&A Transaction as contemplated by this Agreement, and (b) with respect to
Purchaser, a material adverse effect on the ability of Purchaser to perform any
of its financial or other obligations under this Agreement, including the
ability of Purchaser timely to consummate the P&A Transaction contemplated by
this Agreement. In determining whether there has occurred a Material Adverse
Effect there shall be excluded the effect of any change in Federal or state
banking laws or regulations, any change in GAAP or regulatory accounting
principles, any adverse change in general economic conditions, including
without limitation the interest rate environment, or in the California
depository institution industry generally.
"OCC" means the Office of the Comptroller of the Currency.
"Order" has the meaning set forth in Section 9.1(b).
"Owned Real Property" means Real Property where Seller owns both the
real property and improvements thereon that are used for Branches.
"P&A Transaction" means the purchase and sale of Assets and the
assumption of Liabilities described in Sections 2.1 and 2.2.
"Personal Property" means all of the personal property of Seller,
located in the Branches, which is defined on the personal property and fixed
assets list previously provided to Purchaser; provided, no teller terminals or
Xxxxx Fargo signs are being sold. If, prior to the Closing Date, an item of
Personal Property is stolen, destroyed or otherwise lost, such item shall be
excluded form the P&A Transaction, and the term "Personal Property" as used
herein shall exclude such item. If, prior to the Closing Date, an item of
Personal Property is damaged by fire or other casualty, such item, if
reasonably repairable, shall be sold to Purchaser (in accordance with the
provisions hereof) and the insurance proceeds relating to such item shall be
assigned to Purchaser, it being understood that if such item is not reasonably
repairable or is underinsured or uninsured, it shall be excluded from the P&A
Transaction. Personal Property, for purposes of what is being sold hereunder,
does not include any personal property of Seller located in the Real Property
which is not in the branch banking office and is not necessary to the operation
of the branch banking office (e.g., personal property associated with
non-branch banking offices of Seller which may be located in the Real
Property).
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"Personal Property Leases" means the leases under which Seller leases
certain Personal Property in the Branch. Seller shall cancel all such Personal
Property Leases as of the Closing.
"Purchase Price" has the meaning set forth in Section 2.3.
"Real Property" means the parcels of real property on which the
Branches listed on Schedule 1.1(b) are located, including any improvements and
tenant improvements and trade fixtures thereon, which Schedule indicates
whether or not such real property is Owned Real Property.
"Records" means all paper records and original documents, or where
reasonable and appropriate copies thereof, in Seller's possession that pertain
to and are utilized by Seller to administer, reflect, monitor, evidence or
record information respecting the business or conduct of the Branches
(including transaction tickets through the Closing Date and all records for
closed accounts located in Branches and excluding any other transaction tickets
and records for closed accounts) and all such records and original documents,
or where reasonable and appropriate copies thereof, regarding the Assets, or
the Deposits, or to comply with applicable laws and governmental regulations to
which the Deposits are subject, including but not limited to the California
unclaimed property and escheat laws. Notwithstanding the above, Seller may
provide copies of all Records, except notes and other Loan Documents. Seller
is not required to deliver any data processing or electronic/image type records
commingled with other records of Seller unrelated to the Branches and Seller is
not required to deliver any account history which is prior to forty-five (45)
days prior to Closing. In addition, Seller is not required to deliver any
risk-management information regarding customers, including without limitation
credit- scoring formulas, daylight over draft limits, stop payment or overdraft
history more than forty-five (45) days prior to Closing.
"Regulatory Approvals" means all approvals, authorizations, waivers or
consents of or notices to any governmental agencies or authorities required for
or in connection with consummation of the P&A Transaction.
"Safe Deposit Agreements" means the agreements relating to safe deposit
boxes located in the Branches.
"Seller's knowledge" or other similar phrases means information that is
actually known to any officer of Seller who holds the title of Senior Vice
President or above and has responsibility with respect to management of
operations conducted at the Branches.
"Tax Returns" means any return or other report required to be filed
with respect to any Tax, including declaration of estimated tax and information
returns.
"Taxes" means any federal, state, local, or foreign taxes, including
but not limited to taxes on or measured by income, estimated income, franchise,
capital stock, employee's withholding, non-resident alien withholding, backup
withholding, social security, occupation, unemployment, disability, value added
taxes, taxes on services, real property, personal property,
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sales, use, excise, transfer, gross receipts, inventory and merchandise,
business privilege, and other taxes or governmental fees or charges or amounts
required to be withheld and paid over to any government in respect of any tax
or governmental fee or charge, including any interest, penalties, or additions
to tax on the foregoing whether or not disputed.
"Tenant Leases" means leases or subleases between Seller and tenants,
if any, listed on Schedule 5.4.
"Title Company" has the meaning set forth in Section 3.10(a).
"Title Policy" has the meaning set forth in Section 3.10(b).
"Title Reports" has the meaning set forth in Section 3.10(a).
"Transaction Account" means any account at a Branch in respect of which
deposits therein are withdrawable in practice upon demand or upon which third
party drafts may be drawn by the depositor, including checking account,
negotiable order of withdrawal accounts and money market deposit accounts.
"Transferred Employees" means Branch Employees employed by Purchaser on
and after the Closing Date.
1.2 Accounting Terms. All accounting terms not otherwise defined
herein shall have the respective meanings assigned to them in accordance with
consistently applied generally accepted accounting principles as in effect from
time to time in the United States of America ("GAAP").
1.3 Interpretation. The captions or headings in this Agreement
are for convenience of reference only and in no way define, limit or describe
the scope or intent of any provisions or Sections of this Agreement. All
references in this Agreement to particular Articles or Sections are references
to the Articles or Sections of this Agreement, unless some other reference is
clearly indicated. In this Agreement, unless the context otherwise requires,
(i) words describing the singular number shall include the plural and vice
versa, (ii) words denoting any gender shall include all genders and (iii) the
word "including" shall mean "including without limitation." The rule of
construction against the draftsman shall not be applied in interpreting and
construing this Agreement.
ARTICLE 2
THE P&A TRANSACTION
2.1 Purchase and Sale of Assets. (a) Subject to the terms and
conditions set forth in this Agreement, at the Closing, Seller shall grant,
sell, convey, assign, transfer and deliver to Purchaser, and Purchaser shall
purchase and accept from Seller, all of Seller's right, title and interest, as
of the Closing Date, in and to the following (collectively, the "Assets"):
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(i) Cash on Hand;
(ii) the Owned Real Property;
(iii) the Personal Property; provided, however, no Personal
Property Leases are being sold.
(iv) the Deposit Related Loans, and the servicing rights
related thereto pursuant to Section 2.5.
(v) the Branch Leases and Tenant Leases;
(vi) the Safe Deposit Agreements; and
(vii) the Records
(b) Purchaser understands and agrees that it is purchasing only
the Assets (and assuming only the Liabilities) specified in this Agreement and,
except as may be expressly provided for in this Agreement, Purchaser has no
interest in or right to any other business relationship which Seller may have
with any customer of the Branches, including without limitation: (i) any
deposit account or other service of Seller at any other office of Seller which
may be linked to the Deposits; (ii) any money market account which sweeps from
the Branch to a third party; (iii) any merchant card banking relationship;
and/or (iv) any cash management service (e.g., sweep accounts, cash
concentrator accounts, controlled disbursement accounts) which Seller may
provide to any customer of the Branches. No credit card relationships are
being sold. No right to the use of any trade name, trademark or service xxxx,
if any, of Seller, Xxxxx Fargo & Company (parent of Seller) or any of their
respective Affiliates is being sold.
2.2 Assumption of Liabilities. (a) Subject to the terms and
conditions set forth in this Agreement, at the Closing, Purchaser shall assume,
pay, perform and discharge all duties, responsibilities, obligations or
liabilities of Seller (whether accrued, contingent or otherwise) to be
discharged, performed, satisfied or paid on or after the Closing Date, with
respect to the following (collectively, the "Liabilities"):
(i) the Deposits, including the XXX and Xxxxx Accounts to
the extent contemplated by Section 2.4;
(ii) the Branch Leases, Tenant Leases and Personal Property
Leases;
(iii) the Safe Deposit Agreements; and
(iv) the Assumed Severance Obligations.
(b) Notwithstanding anything to the contrary in this Agreement,
Purchaser shall not assume or be bound by any duties, responsibilities,
obligations or liabilities of Seller, or of any of
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Seller's Affiliates, of any kind or nature, known, unknown, contingent or
otherwise, other than the Liabilities.
2.3 Purchase Price. The purchase price ("Purchase Price") for the
Assets shall be the sum of:
(a) An amount equal to 4.940% of the average daily balance
(including Accrued Interest) of the Deposits for the period commencing thirty
(30) days prior to and inclusive of the day prior to the Closing Date and
ending on the day prior to the Closing Date;
(b) The aggregate amount of Cash on Hand as of the Closing Date;
(c) The aggregate net book value of all the Assets, other than
Cash on Hand and Deposit Related Loans, as reflected on the books of Seller as
of the close of business of the month-end day most recently preceding the
Closing Date.
(d) The aggregate Loan Value of the Deposit Related Loans as of
the close of business of the day prior to the Closing Date.
Purchaser has, concurrently with Seller's execution of this Agreement, made a
good faith deposit to Seller, as consideration for entering into this
Agreement, in the amount of Seventy-Five Thousand Dollars ($75,000) per branch
for each Branch which is the subject of this Agreement. Such good faith
deposit shall be applied against the Purchase Price upon Closing. Such good
faith deposit shall be returned to Purchaser if this Agreement is terminated
for a reason other than the default of Purchaser. If the Closing does not
timely occur due to the default of Purchaser, Seller shall retain such deposit.
Such good faith deposit is consideration for entering into this Agreement, is
not intended as liquidated damages and shall not in any way limit Seller's
remedies for a default by Purchaser hereunder. No interest shall be paid on
such good-faith deposit.
2.4 Assumption of XXX and Xxxxx Account Deposits. (a) With
respect to Deposits in IRAs, Seller will use reasonable efforts and will
cooperate with Purchaser in taking any action reasonably necessary to
accomplish either the appointment of Purchaser as successor custodian or the
delegation to Purchaser (or an Affiliate of Purchaser) of Seller's authority
and responsibility as custodian of all such XXX deposits except self-directed
XXX deposits, including, but not limited to, sending to the depositors thereof
appropriate notices, cooperating with Purchaser (or such Affiliate) in
soliciting consents from such depositors, and filing any appropriate
applications with applicable regulatory authorities. If any such delegation is
made to Purchaser (or such Affiliates), Purchaser (or such Affiliate) will
perform all of the duties so delegated and comply with the terms of Seller's
agreement with the depositor of the XXX deposits affected thereby.
(b) With respect to Deposits in Xxxxx Accounts, Seller shall
cooperate with Purchaser to invite depositors thereof to direct a transfer of
each such depositor's Xxxxx Account and the related Deposits to Purchaser (or
an Affiliate of Purchaser), as trustee thereof, and to
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adopt Purchaser's (or such Affiliate's) form of Xxxxx Master Plan as a
successor to that of Seller. Purchaser (or such Affiliate) will assume no
Xxxxx Accounts unless Purchaser (or such Affiliate) has received the documents
necessary for such assumption at or before the Closing. With respect to any
owner of a Xxxxx Account who does not adopt Purchaser's (or such Affiliate's)
form of Xxxxx Master Plan, Seller will use reasonable efforts in order to
enable Purchaser (or such Affiliate) to retain such Xxxxx Accounts at the
Branches.
(c) If, notwithstanding the foregoing, as of the Closing Date,
Purchaser shall be unable to retain deposit liabilities in respect of an XXX or
Xxxxx Account, such deposit liabilities shall be excluded from Deposits for
purposes of this Agreement and shall constitute "Excluded XXX/Xxxxx Account
Deposits."
2.5 Sale and Transfer of Servicing and Escrows. The Deposit
Related Loans shall be sold on a servicing released basis. As of the Closing
Date, all rights, obligations, liabilities and responsibilities with respect to
the servicing of such Loans on and after the Closing Date will be assumed by
Purchaser. Seller shall be discharged and indemnified by Purchaser from all
liability with respect to servicing of the Deposit Related Loans on and after
the Closing Date and Purchaser shall be discharged and indemnified by Seller
from all liability with respect to servicing of the Deposit Related Loans prior
to the Closing Date.
ARTICLE 3
CLOSING PROCEDURE; ADJUSTMENTS
3.1 Closing. (a) The Closing will be held at the offices of
Seller at 000 Xxxxxxxxxx Xxxxxx, Xxx Xxxxxxxxx or such place as may be agreed
to by the parties.
(b) The Closing Date shall be at a date and time as soon as
practicable, which shall be no later than thirty (30) Business Days after
receipt of all Regulatory Approvals unless otherwise agreed to by the parties;
provided, however, in no event shall the closing be later than March 31, 1997.
3.2 Payment at Closing. (a) At Closing, Seller shall pay to
Purchaser the amount by which the aggregate balance (including Accrued
Interest) of the Deposits exceeds the Estimated Purchase Price (the "Estimated
Payment Amount") or, Purchaser shall pay to Seller the amount by which the
Estimated Purchase Price exceeds the aggregate balance (including Accrued
Interest) of the Deposits, each as set forth on the Draft Closing Statement as
agreed upon between Seller and Purchaser.
(b) All payments to be made hereunder by one party to the other
shall be made by wire transfer of immediately available funds (in all cases to
an account specified in writing by Seller or Purchaser, as the case may be, to
the other not later than the third (3rd) Business Day prior to the Closing
Date) on or before 11:00 A.M. local time on the date of payment. If any
payment to be made hereunder on the Closing Date (or any other date) shall not
be made on or before 11:00 A.M. local time on such date, and the amount thereof
shall have been agreed to in
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writing by the parties at the Closing Date (or such other payment date), the
party responsible therefor may make such payment on or before 11:00 A.M. local
time on the next Business Day together with interest thereon at the Federal
Funds Rate applicable from the Closing Date (or such other payment date) to the
date such payment is actually made, which in no event shall be later than the
fifth (5th) business day after such payment was due.
(c) If any instrument of transfer contemplated herein shall be
recorded in any public record before the Closing and thereafter the Closing is
not completed, then at the request of such transferring party the other party
will deliver (or execute and deliver) such instruments and take such other
action as such transferring party shall reasonably request to revoke such
purported transfer.
3.3 Adjustment of Purchase Price. (a) On or before 12:00 noon on
the sixtieth (60th) day following the Closing Date (the "Adjustment Date"),
Seller shall deliver to Purchaser the Final Closing Statement and shall make
available such work papers, schedules and other supporting data as may be
reasonably requested by Purchaser to enable it to verify the amounts set forth
in the Final Closing Statement. The Final Closing Statement shall also set
forth the amount (the "Adjusted Payment Amount") by which the aggregate amount
of Deposits (including Accrued Interest) shown on the Final Closing Statement
differs from the Estimated Purchase Price.
(b) The determination of the Adjusted Payment Amount shall be
final and binding on the parties hereto unless within thirty (30) days after
receipt by Purchaser of the Final Closing Statement, Purchaser shall notify the
Seller in writing of its disagreement with any amount included therein or
omitted therefrom, in which case, if the parties are unable to resolve the
disputed items within ten (10) Business Days of the receipt by Seller of notice
of such disagreement, such items shall be determined by an independent
accounting firm selected by mutual agreement between Seller and Purchaser;
provided, however, that in the event the fees of such firm as estimated by such
firm would exceed fifty percent (50%) of the net amount in dispute, the parties
agree that such firm will not be engaged by either party and that such net
amount in dispute will be equally apportioned between Seller and Purchaser.
Such accounting firm shall be instructed to resolve the disputed items within
ten (10) Business Days of engagement, to the extent reasonably practicable.
The determination of such accounting firm shall be final and binding on the
parties hereto. The fees of any such accounting firm shall be divided equally
between Seller and Purchaser.
(c) On or before 12:00 Noon on the tenth (10th) Business Day after
the Adjustment Date or, in the case of a dispute, the date of the resolution of
the dispute pursuant to subsection 3.3(b) above, Seller shall pay to Purchaser
an amount equal to the amount by which the Adjusted Payment Amount exceeds the
Estimated Payment Amount, plus interest on such excess amount from the Closing
Date to but excluding the payment date, at the Federal Funds Rate or, if the
Estimated Payment Amount exceeds the Adjusted Payment Amount, Purchaser shall
pay to Seller an amount equal to such excess, plus interest from the Closing
Date to but excluding the payment date, at the Federal Funds Rate. Any
payments required by Section 3.5 shall be made contemporaneously with the
foregoing payment.
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3.4 Allocation of Purchase Price. (a) Purchaser and Seller agree
that upon final determination of the Purchase Price, the Purchase Price shall
be allocated in a manner as determined by Purchaser subject to Seller's consent
(which consent shall not be unreasonably withheld or delayed), after taking
into account any applicable Treasury Regulations and the fair market value of
such items and to be set forth in a statement, dated the Adjustment Date (the
"Allocation Statement") prepared by Purchaser.
(b) Purchaser and Seller shall report the transaction contemplated
by this Agreement (including income tax reporting requirements imposed pursuant
to Section 1060 of the Code) in accordance with the allocation specified in the
Allocation Statement. In the event any party hereto receives notice of an
audit in respect of the allocation of the Purchase Price specified herein, such
party shall immediately notify the other party in writing as to the date and
subject of such audit.
(c) If any Tax Return filed by Purchaser or Seller relating to the
transactions contemplated hereby is challenged by the taxing authority with
which such Tax Return was filed on the basis of the allocation set forth in the
Allocation Statement, as finally adjusted, the filing party shall assert and
maintain in good faith the validity and correctness of such allocation during
the audit thereof until the issuance by the taxing authority of a "30 Day
Letter", or a determination of liability equivalent thereto, to such party;
provided, however, that at any time such party shall, in its sole discretion,
have the right to pay, compromise, settle, dispute or otherwise deal with its
alleged tax liability. If such a Tax Return is challenged as herein described,
the party filing such Tax Return shall keep the other party apprised of its
decisions and the current status and progress of all administrative and
judicial proceedings, if any, that are undertaken at the election of such
party.
3.5 Proration; Other Closing Date Adjustments. (a) Except as
otherwise specifically provided in this Agreement, it is the intention of the
parties that Seller will operate the Branches for its own account until 11:59
P.M., California time, the day prior to the Closing Date, and that Purchaser
shall operate the Branches, hold the Assets and assume the Liabilities for its
own account on and after the Closing Date. Thus, except as otherwise
specifically provided in this Agreement, items of income and expense, as
defined herein, shall be prorated as of 11:59 P.M., California time, the day
prior to the Closing Date, and settled between Seller and Purchaser 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
Purchase Price unless otherwise agreed by the parties hereto.
(b) For purposes of this Agreement, items of proration and other
adjustments shall include, without limitation: (i) rental payments and
security deposits under the Branch Leases and the Tenant Leases; (ii) sales
and use taxes and personal and real property taxes and assessments; (iii) FDIC
deposit insurance assessments; (iv) wages, salaries and employee benefits and
expenses; (v) trustee or custodian fees on XXX and Xxxxx Accounts; (vi)
adjustments reflecting exclusions from the Personal Property as provided for in
the definition thereof; and (vii) other prepaid expenses and items and accrued
but unpaid liabilities, as of the
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close of business on the day prior to the Closing Date. Safe deposit rental
payments previously received by Seller shall not be prorated.
3.6 Seller Deliveries. At the Closing, Seller shall deliver to
Purchaser:
(a) Grant deeds, in substantially the form of Schedule 3.6(a),
pursuant to which the Owned Real Property shall be transferred to Purchaser "AS
IS", "WHERE IS" and with all faults (the "Grant Deeds");
(b) A xxxx of sale, in substantially the form of Schedule 3.6(b),
pursuant to which the Personal Property shall be transferred to Purchaser "AS
IS", "WHERE IS" and with all faults;
(c) An assignment and assumption agreement, in substantially the
form of Schedule 3.6(c), with respect to the Liabilities (the "Assignment and
Assumption Agreement");
(d) Lease assignment and assumption agreements in substantially
the form of Schedule 3.6(d), with respect to each of the Branch Leases (the
"Lease Assignments");
(e) Subject to the provisions of Section 7.4, such consents of
landlords under the Branch Leases, as shall be required pursuant to the terms
of such Branch Leases, to the assignment of the Branch Leases to Purchaser in
substantially the form of Schedule 3.6(e) (the "Landlord Consents");
(f) Subject to the provisions of Section 7.4, such consents as
shall be required pursuant to the terms of the Tenant Leases and the Personal
Property Leases in connection with the assignments thereof to Purchaser;
(g) An Officer's Certificate in substantially the form of Schedule
3.6(g);
(h) An opinion of Seller's counsel, dated the Closing Date, in
form and substance reasonably satisfactory to Purchaser substantially to the
effect that:
(i) Seller is a national banking association, duly
organized and validly existing under the laws of the United States,
with all requisite corporate power and authority to execute, deliver
and perform this Agreement;
(ii) all Regulatory Approvals required to have been
obtained by Seller or its Affiliates have been obtained and are in full
force and effect; and
(iii) this Agreement has been duly authorized, executed and
delivered by Seller and (assuming due authorization, execution and
delivery by Purchaser) is a valid and legally binding obligation of
Seller enforceable in accordance with its terms, subject to bankruptcy,
insolvency, fraudulent transfers, reorganization, moratorium and
similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles;
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(i) The Draft Closing Statement;
(j) Seller's resignation as trustee or custodian, as applicable,
with respect to each XXX or Xxxxx Account included in the Deposits and
designation of Purchaser as successor trustee or custodian with respect thereto
as contemplated by Section 2.4;
(k) All documentation required to exempt Seller from the
withholding requirement of Section 1445 of the Code, consisting of an affidavit
from Seller to Purchaser under penalty of perjury that Seller is not a foreign
person and providing Seller's U.S. taxpayer identification number; and
(l) Such other documents as the parties determine are reasonably
necessary to consummate the P&A Transaction as contemplated hereby.
3.7 Purchaser Deliveries. At the Closing, Purchaser shall deliver
to Seller:
(a) The Assignment and Assumption Agreement;
(b) Purchaser's acceptance of its appointment as successor trustee
or custodian, as applicable, of the XXX and Xxxxx Accounts included in the
Deposits and assumption of the fiduciary obligations of the trustee or
custodian with respect thereto, as contemplated by Section 2.4;
(c) The Lease Assignments and, as contemplated by Section 7.4,
such other instruments and documents as any landlord under a Branch Lease may
reasonably require as necessary or desirable for providing for the assumption
by Purchaser of a Branch Lease, each such instrument and document in the form
and substance reasonably satisfactory to the parties and dated as of the
Closing Date;
(d) An Officer's Certificate in the form of Schedule 3.7(d)
attached hereto;
(e) An opinion of Purchaser's counsel, dated the Closing Date, in
form and substance reasonably satisfactory to Seller, substantially to the
effect that:
(i) Purchaser is a state chartered bank, duly organized
and validly existing under the laws of California, with all requisite
corporate power and authority to execute, deliver and perform this
Agreement;
(ii) all Regulatory Approvals required to have been
obtained by Purchaser or its Affiliates have been obtained and are in
full force and effect; and
(iii) this Agreement has been duly authorized, executed and
delivered by Purchaser and (assuming due authorization, execution and
delivery by Seller) is a valid and legally binding obligation of
Purchaser enforceable in accordance with its terms,
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subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or
affecting creditors' rights and to general equity principles; and
(f) Such other documents as the parties determine are reasonably
necessary to consummate the P&A Transaction as contemplated hereby.
3.8 Delivery of the Loan Documents. (a) In connection with the
sale hereunder, as soon as is reasonably practicable after the Closing Date,
Seller shall deliver to Purchaser or its designee the Loan Documents actually
in the possession of Seller. Seller makes no representation or warranty to
Purchaser regarding the condition of the Loan Documents or any single document
included therein, or Seller's interest in any collateral securing any Deposit
Related Loan, except as specifically set forth herein. Seller shall have no
responsibility or liability for the Loan Documents from and after the time such
files are delivered by Seller to an independent third party for shipment to
Purchaser, the cost of which shall be the sole responsibility of Purchaser.
(b) Promptly upon the execution of this Agreement, Purchaser shall
provide Seller the exact name to which the Deposit Related Loans are to be
endorsed, or whether any Deposit Related Loans should be endorsed in blank.
Seller will use its best efforts to complete such endorsements and deliver the
Loan Documents within ninety (90) days after Closing; provided, however, with
respect to specific Loan Documents, Seller may require additional time to
effectively transfer title thereto and Purchaser shall not hold Seller liable
for any reasonable delays in the delivery of such Loan Documents. Purchaser
further acknowledges and agrees that Seller may execute or endorse any Loan
Document by way of facsimile signature.
3.9 Owned Real Property Filings. On or prior to the Closing Date,
Seller shall file or record, or cause to be filed or recorded, any and all
documents (including, without limitation, deeds) necessary in order that the
legal and equitable title to Owned Real Property shall be duly vested in
Purchaser as of the Closing Date. Any expenses or documentary transfer taxes
with respect to such filings shall be borne by Seller or Purchaser in
accordance with the escrow agent's determination of the local custom in the
county in which the filing is being made; provided, however, that if it is
determined that (i) the custom is to split such expenses or documentary
transfer taxes or (ii) there is no discernible custom, any such expenses or
documentary transfer taxes shall be split evenly between Seller and Purchaser.
3.10 Title Policies. (a) Purchaser has previously been provided by
Seller, at its own expense, a preliminary title report (the "Title Reports")
for all the Owned Real Property issued by Chicago Title Company (the "Title
Company"), Purchaser has had an opportunity to review such Title Reports and
Purchaser hereby approves the condition of title with respect to all the Owned
Real Property being purchased hereunder.
(b) Purchaser shall, at its own expense, obtain as of the Closing
Date a CLTA title insurance policy from the Title Company (a "Title Policy")
with respect to all the Owned Real Property. Seller will cooperate with
Purchaser in assisting Purchaser to obtain (at Purchaser's
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expense) such Title Policies, including without limitation only such
endorsements as may be reasonably necessary to insure that such Owned Real
Property is free and clear of any Encumbrance not shown on the Title Reports
which would materially and adversely affect the value or marketability of title
thereto.
ARTICLE 4
TRANSITIONAL MATTERS
4.1 Transitional Arrangements. Seller and Purchaser agree to
cooperate and to proceed as follows to effect the transfer of account record
responsibility for the Branches:
(a) Not later than thirty (30) days after the signing of this
Agreement, Seller will meet with Purchaser to investigate, confirm and agree
upon mutually acceptable transaction settlement procedures and specifications,
files, procedures and schedules, for the transfer of account record
responsibility; provided, however it being understood and agreed that Seller is
not obligated under this Agreement to provide Purchaser any system conversion
files regarding the Assets and Liabilities other than a standard format
conversion tape (i.e., not one which is specifically formatted for Purchaser's
systems specifications); and provided, further, that Seller is not obligated to
provide Purchaser with any information regarding Seller's relationship with the
customers outside of the Branch (e.g., other customer products, house-holding
information).
(b) Not later than sixty (60) days after the date of this
Agreement, Seller shall provide Purchaser with a hard copy listing of all
applicable Check/Savings/Signatures that Seller has for the Deposits and
related special instructions.
4.2 Customers. (a) Not later than thirty (30) days prior to the
Closing Date (unless earlier required by law),
(i) Seller will notify the holders of Deposits to be
transferred on the Closing Date that, subject to the terms and
conditions of this Agreement, Purchaser will be assuming liability for
such Deposits;
(ii) each of Seller and Purchaser shall provide, or join in
providing where appropriate, all notices to customers of the Branches
and other persons that Seller or Purchaser, as the case may be, is
required to give under applicable law or the terms of any other
agreement between Seller and any customer in connection with the
transactions contemplated hereby; and
(iii) following or concurrently with the notice referred to
in clause (i) above, Purchaser may communicate with and deliver
information, brochures, bulletins and other communications to
depositors and other customers of the Branches concerning the P&A
Transaction and the business of Purchaser. A party proposing to send
or publish any notice or communication pursuant to any paragraph of
this Section 4.2 shall furnish to the
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other party a copy of the proposed form of such notice or communication
at least five (5) days in advance of the proposed date of the first
mailing, posting, or other dissemination thereof to customers, and
shall not unreasonably refuse to amend such notice to incorporate any
changes that the other such party proposes as necessary to comply with
applicable law. All costs and expenses of any notice or communication
sent or published by Purchaser or Seller shall be the responsibility of
the party sending such notice or communication and all costs and
expenses of any joint notice or communication shall be shared equally
by Seller and Purchaser. As soon as reasonably practicable and in any
event within fourteen (14) days of the date hereof, Seller shall
provide to Purchaser a report of the names and addresses of the owners
of the Deposits and the lessees of the safe deposit boxes in connection
with the mailing of such materials, which report shall be current as of
the date hereof.
(b) Following the giving of any notice described in paragraph (a)
above, Purchaser and Seller shall deliver to each new customer at any of the
Branches such notice or notices as may be reasonably necessary to notify such
new customers of Purchaser's pending assumption of liability for the Deposits
and to comply with applicable law. The cost of such notices shall be paid by
Purchaser. At any time after the receipt of all Regulatory Approvals (except
for the expiration of statutory waiting periods), within five (5) Business Days
following any request by Purchaser, Seller will provide Purchaser with account
information, including complete mailing addresses for each of the depositors of
the Deposits as of a recent date, and upon reasonable request shall provide an
updated version of such records; provided, however, that Seller shall not be
obligated to provide such updated records more than twice.
(c) Notwithstanding the provisions of Section 7.6, neither
Purchaser nor Seller shall object to the use, by depositors of the Deposits, of
payment orders issued to or ordered by such depositors on or prior to the
Closing Date, which payment orders bear the name, or any logo, trademark,
service xxxx, trade name or the proprietary xxxx of Xxxxx Fargo Bank or any of
its Affiliates.
4.3 Direct Deposits. Seller will use all reasonable efforts to
transfer to Purchaser on the Closing Date all of those automated clearing house
and FedWire direct deposit arrangements related (by agreement or other standing
arrangement) to Deposits. As soon as practicable after the receipt of all
Regulatory Approvals (except for the expiration of statutory waiting periods),
Seller will deliver to Purchaser a listing in a format mutually agreed upon by
the parties of all such direct deposit records which Seller, in the exercise of
all reasonable efforts, is able to identify. On each Business Day for a period
of four (4) months following the Closing, in the case of automated clearing
house direct deposits to accounts containing Deposits (the final Business Day
of such period being the "ACH Direct Deposit Cut-Off Date"), Seller shall, as
soon as practicable, but in any event no less than twice daily and no later
than 4:00 A.M., California time, of each Business Day for same day settlement,
and no later than 6:00 P.M., California time, of each Business Day for
settlement on the following Business Day, remit and transfer to Purchaser all
ACH direct deposits intended for accounts constituting Deposits. On each
Business Day, for a period of thirty (30) days following the Closing Date, in
the case of feeder direct deposits to accounts constituting Deposits (the final
Business Day of such period
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being the "FedWire Direct Deposit Cut-Off Date"), Seller shall, as soon
practicable, but in any event, no later then 12:00 noon, California time, of
each Business Day following the date of receipt thereof, remit and transfer to
Purchaser all FedWire direct deposits intended for accounts constituting
Deposits. Compensation for ACH direct deposits or FedWire direct deposits not
forwarded to Purchaser on the same Business Day as that on which Seller has
received such deposits will be handled in accordance with the rules established
by the United States Council on International Banking. After the applicable
Direct Deposit Cut-Off Date, Seller may discontinue accepting and forwarding
automated clearing house and FedWire entries and funds and return such direct
deposits to the originators marked "Account Closed." Seller shall not be
liable for any overdrafts that may thereby be created. Purchaser and Seller
shall agree on a reasonable period of time prior to the Closing during which
Seller will no longer be obligated to accept new direct deposit arrangements
related to the Branches. At the time of each Direct Deposit Cut-off Date,
Purchaser will provide automated clearing housing originators with account
numbers relating to Deposits.
4.4 Direct Debit. As soon as practicable after the receipt of all
Regulatory Approvals (except for the expiration of statutory waiting periods),
and after the notice provided in Section 4.2(a), Purchaser will send
appropriate notice to all customers having accounts constituting Deposits the
terms of which provide for direct debit of such accounts by third parties,
instructing such customers concerning transfer of customer direct debit
authorizations from Seller to Purchaser. Seller shall cooperate in soliciting
the transfer of such authorizations. Such notice shall be in a form agreed to
by the parties. For a period of four (4) months following the Closing Date,
Seller shall as soon as practicable, but in any event, no less than twice daily
and no later than 4:00 A.M., California time, of each Business Day for same day
settlement, and no later than 6:00 P.M., California time, of each Business Day
for settlement on the following Business Day, forward to Purchaser all direct
debits on accounts constituting Deposits. Thereafter, Seller may discontinue
forwarding such entries and return them to the originators marked "Account
Closed." Purchaser and Seller shall agree on a reasonable period of time prior
to the Closing during which Seller will not longer be obligated to accept new
direct debit arrangements related to the Branches. On the Closing Date,
Purchaser will provide automated clearing house originators of such direct
debits with account numbers.
4.5 Escheat Deposits. As soon as practicable after the Closing
Date, Seller will deliver to Purchaser a data processing record identifying all
Escheat Deposits that have been transferred to Purchaser. Thereafter,
Purchaser shall be solely responsible for the proper reporting and transmission
to the State of California of such Escheat Deposits.
4.6 Maintenance of Records. Through the Closing Date, Seller will
maintain the Records relating to the Assets and Liabilities in the same manner
and with the same care that the Records have been maintained prior to the
execution of this Agreement. Purchaser may, at its own expense, make such
copies of and excerpts from the Records as it may deem desirable. All Records,
whether held by Purchaser or Seller, shall be maintained for such periods as
are required by law, unless the parties shall, applicable law permitting, agree
in writing to a different period. From and after the Closing Date, each of the
parties shall permit the other reasonable access to any applicable Records in
its possession relating to matters arising on or before the
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Closing Date and reasonably necessary in connection with any claim, action,
litigation or other proceeding involving the party requesting access to such
Records or in connection with any legal obligation owed by such party to any
present or former depositor or other customer.
4.7 Interest Reporting and Withholding. (a) Unless otherwise
agreed to by the parties, Seller will report to applicable taxing authorities
and holders of Deposits, with respect to the period from January 1 of the year
in which the Closing occurs through the Closing Date, all interest (including
for purposes hereof dividends and other distributions with respect to money
market accounts) credited to, withheld from and any early withdrawal penalties
imposed upon the Deposits. Purchaser will report to the applicable taxing
authorities and holders of Deposits, with respect to all periods from the day
after the Closing Date, all such interest credited to, withheld from and early
withdrawal penalties imposed upon such Deposits. Any amounts required by any
governmental agencies to be withheld from any of the Deposits through the
Closing Date will be withheld by Seller in accordance with applicable law or
appropriate notice from any governmental agency and will be remitted by Seller
to the appropriate agency on or prior to the applicable due date. Any such
withholding required to be made subsequent to the Closing Date shall be
withheld by Purchaser in accordance with applicable law or the appropriate
notice from any governmental agency and will be remitted by Purchaser to the
appropriate agency on or prior to the applicable due date. Promptly after the
Closing Date, but in no event later than the date Purchaser is obligated to
remit such amounts to the applicable governmental agency, Seller will pay to
Purchaser that portion of any sums theretofore withheld by Seller from any
Deposits which are required to be remitted by Purchaser pursuant to the
foregoing and shall directly remit to the applicable governmental agency that
portion of any such sums which are required to be remitted by Seller.
(b) Unless otherwise agreed by the parties, Seller shall be
responsible for delivering to payees all IRS notices with respect to
information reporting and tax identification numbers required to be delivered
through the Closing Date with respect to the Deposits, and Purchaser shall be
responsible for delivering to payees all such notices required to be delivered
following the Closing Date with respect to the Deposits. Purchaser and Seller
shall, prior to the Closing Date, consult and Seller shall take reasonable
actions as are necessary to permit Purchaser timely to deliver such IRS notices
required to be delivered following the Closing Date.
(c) Unless otherwise agreed by the parties, Seller will make all
required reports to applicable Tax authorities and to obligors on the Deposit
Related Loans purchased on the Closing Date, with respect to the period from
January 1 of the year in which the Closing occurs through the Closing Date,
concerning all interest and points received by the Seller. Purchaser will make
all required reports to applicable Tax authorities and to obligors on the
Deposit Related Loans purchased on the Closing Date, with respect to all
periods from the day after the Closing Date, concerning all such interest and
points received.
4.8 Negotiable Instruments. Seller will remove any supply of
Seller's money orders, official checks, gift checks, travelers' checks or any
other negotiable instruments located at each of the Branches on the Closing
Date.
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4.9 ATM/Debit Cards. Seller will provide Purchaser with a list of
ATM access/debit cards issued by Seller to depositors of any Deposits, and a
record thereof in a format reasonably agreed to by the parties containing all
addresses therefor, as soon as practicable after the receipt of all Regulatory
Approvals (except for the expiration of any statutory waiting periods). At or
promptly after the Closing, Seller will provide Purchaser with a revised record
through the Closing. In instances where a depositor of a Deposit made an
assertion of error regarding an account constituting Deposits pursuant to the
Electronic Funds Transfer Act and Federal Reserve Board Regulation E, and
Seller, prior to the Closing, recredited the disputed amount to the relevant
account during the conduct of the error investigation, Purchaser agrees to
comply with a written request from Seller to debit such account in a stated
amount and remit such amount to Seller, to the extent of the balance of funds
available in the accounts. Seller agrees to indemnify Purchaser for any claims
or losses that Purchaser may incur as a result of complying with such request
from Seller. Seller will not be required to disclose to Purchaser customers'
PINs or algorithms or logic used to generate PINs. Purchaser shall reissue ATM
access/debit cards to depositors of any Deposits prior to the Closing Date,
which cards shall be effective as of the Closing Date. Seller agrees to settle
any and all ATM transactions effected on or before the Closing Date, but
processed after the Closing Date, as soon as practicable. Purchaser and Seller
agree to remit the total net balance of such transactions to Seller or
Purchaser, as the case may be, on the same date the transactions are settled.
4.10 Leasing of Personal Property. Seller shall cancel or
terminate any Personal Property Leases as of the Closing Date.
4.11 Handling of Certain Items. (a) As soon as practicable after
the Closing Date, Purchaser shall mail to each depositor in respect of a
Transaction Account (i) a letter approved by Seller requesting that such
depositor promptly cease writing Seller's drafts against such Transaction
Account and (ii) new drafts which such depositor may draw upon Purchaser for
the purpose of effecting transactions with respect to such Transaction
Accounts. The parties hereto shall use their best efforts to develop
procedures which cause Seller's drafts against Transaction Accounts which are
received after the Closing Date to be cleared through Purchaser's then- current
clearing procedures. During the ninety (90) day period after the Closing Date,
if it is not possible to clear Transaction Account drafts through Purchaser's
then-current clearing procedures, Seller shall forward to Purchaser as soon as
practicable but in no event more than three (3) Business Days after receipt all
Transaction Account drafts drawn against Transaction Accounts. Seller shall
have no obligation to pay such forwarded Transaction Account drafts. Upon the
expiration of such ninety (90) day period, Seller shall cease forwarding drafts
against Transaction Accounts. Purchaser and Seller will agree upon a
reasonable market rate compensation to be paid to Seller for its processing of
the drafts during the ninety (90) day period following the Closing Date.
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(b) Any items that were credited for deposit to or cashed against
a Deposit prior to the Closing and are returned unpaid on or within sixty (60)
days after the Closing Date ("Returned Items") will be handled as set forth
herein. If Seller's bank account is charged for the Returned Item, Seller
shall forward such Returned Item to Purchaser. If upon Purchaser's receipt of
such Returned Item there are sufficient funds in the Deposit to which such
Returned Item was credited or any other Deposit transferred at the Closing
standing in the name of the party liable for such Returned Item, Purchaser will
debit any or all of such Deposits an amount equal in the aggregate to the
Returned Item, and shall repay that amount to Seller. If there are not
sufficient funds in the Deposit because of Purchaser's failure to honor holds
placed on such Deposit, Purchaser shall repay the amount of the Returned Item
to Seller. Any items that were credited for deposit to or cashed against an
account at the Branches to be transferred at the Closing prior to the Closing
and are returned unpaid more than sixty (60) days after the Closing will be the
responsibility of Purchaser, except that for a period of eighteen (18) months
after the Closing checks drawn on the United States Treasury, checks issued by
state governments and municipalities and checks returned for endorsement
irregularities will be the responsibility of Seller.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Purchaser as follows:
5.1 Corporate Organization and Authority. As of the date hereof,
Seller is a national banking association, duly organized and validly existing
in good standing under the laws of the United States of America and has the
requisite power and authority to conduct the business now being conducted at
the Branches. Seller has the requisite corporate power and authority and has
taken all corporate action necessary in order to execute and deliver this
Agreement and to consummate the transactions contemplated hereby. This
Agreement is a valid and binding agreement of Seller enforceable in accordance
with its terms subject, as to enforcement, to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and to general equity
principles.
5.2 No Conflicts. The execution, delivery and performance of this
Agreement by Seller does not, and will not, (i) violate any provision of its
charter or by-laws or (ii) violate or constitute a breach of, or default under,
any law, rule, regulation, judgment, decree, ruling or order of any court,
government or governmental agency to which Seller is subject or under any
agreement or instrument of Seller, or to which Seller is subject or by which
Seller is otherwise bound, which violation, breach, contravention or default
referred to in this clause (ii), individually or in the aggregate, would have a
Material Adverse Effect (assuming the receipt of any required consents of
lessors under the Branch Leases and Personal Property Leases). Seller has all
material licenses, franchises, permits, certificates of public convenience,
orders and other authorizations of all federal, state and local governments and
governmental authorities necessary for the lawful conduct of its business at
each of the Branches as now conducted and all such licenses, franchises,
permits, certificates of public convenience, orders and other authorizations,
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are valid and in good standing and, to Sellers' knowledge, are not subject to
any suspension, modification or revocation or proceedings related thereto.
5.3 Approvals and Consents. Other than the Regulatory Approvals
or as otherwise disclosed in writing to Purchaser by Seller prior to the date
hereof, no notices, reports or other filings are required to be made by Seller
with, nor are any consents, registrations, approvals, permits or authorizations
required to be obtained by Seller from, any governmental or regulatory
authorities of the United States or the several States in connection with the
execution and delivery of this Agreement by Seller and the consummation of the
transactions contemplated hereby by Seller, the failure to make or obtain any
or all of which, individually or in the aggregate, would have a Material
Adverse Effect.
5.4 Tenants. Except for the tenants listed on Schedule 5.4
attached hereto, there are no tenants or other occupants of the Real Property.
5.5 Leases. Each Branch Lease and each Personal Property Lease is
the valid and binding obligation of Seller and, to Seller's knowledge, of each
other party thereto; and there does not exist with respect to Seller's
obligations thereunder, or, to Seller's knowledge, with respect to the
obligations of the lessor thereof, any material default, or event or condition
which constitutes or, after notice or passage of time or both, would constitute
a material default on the part of Seller or the lessor under any such Branch
Lease or Personal Property Lease. As used in the immediately preceding
sentence, the term "lessor" includes any sub-lessor of the property to Seller.
Each Branch Lease and each material Personal Property Lease is current and all
rents, expenses and charges payable by Seller thereunder have been paid or
accrued pursuant to the terms thereof (except for any payments not yet
delinquent or as to which the obligation to make such payment is being
contested in good faith). Accurate copies of each Branch Lease and each
material Personal Property Lease have heretofore been made available to
Purchaser.
5.6 Litigation and Undisclosed Liabilities. Except as set forth
in Schedule 5.6, there are no actions, suits or proceedings that have a
reasonable likelihood of an adverse determination pending or, to Seller's
knowledge, threatened against Seller or any of the Branches, or obligations or
liabilities (whether or not accrued, contingent or otherwise) or to Seller's
knowledge, facts or circumstances that could reasonably be expected to result
in any claims against or obligations or liabilities of Seller that,
individually or in the aggregate, would have a Material Adverse Effect.
5.7 Regulatory Matters. (a) Except as previously disclosed in
writing to Purchaser, there are no pending, or to Seller's knowledge
threatened, disputes or controversies between Seller and any federal, state or
local governmental agency or authority that, individually or in the aggregate,
would have a Material Adverse Effect.
(b) Seller is not a party to any written order, decree, agreement
or memorandum or understanding with, or commitment letter or similar submission
to, any federal or state governmental agency or authority charged with the
supervision or regulation of depository institutions, nor has Seller been
advised by any such agency or authority that it is contemplating
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issuing or requesting (or is considering the appropriateness of issuing or
requesting) any such order, decree, agreement, memorandum of understanding,
commitment letter of submission, in each case which, individually or in the
aggregate, would have a Material Adverse Effect.
5.9 Compliance With Laws. The banking business of the Branches
has been conducted in compliance with all federal, state and local laws,
regulations and ordinances applicable thereto, except for any failures to
comply that would not, individually or in the aggregate, result in a Material
Adverse Effect.
5.10 Loans. (a) An accurate list of the Deposit Related Loans has
previously been delivered to Purchaser. Such list will be updated to include
an accurate list of such Loans as of the Closing Date. With respect to each
such Deposit Related Loan:
(i) Such Loan was solicited and originated in material
compliance with all applicable requirements of federal, state, and
local laws and regulations in effect at the time of such solicitation
and origination; and there was no fraud on the part of the Seller with
respect to the origination of any Loan;
(ii) Each note evidencing a Loan and any related security
instrument constitutes a valid and legally binding obligation of the
obligor thereunder enforceable in accordance with its terms, subject to
bankruptcy, insolvency, fraudulent transfers, reorganization,
moratorium and similar laws of general applicability relating to or
affecting creditors' rights and to general equity principles;
(iii) To Seller's knowledge, no claims or defenses to the
enforcement of such Loan have been asserted and Seller is aware of no
acts or omissions that would give rise to any claim or right of
rescission, setoff, counterclaim or defense by a borrower, obligor,
guarantor or any other person obligated to perform under any related
Loan Documents;
(iv) The security interest in any Deposit account securing
any Loan is a legal, valid and binding obligation enforceable against
the obligor subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general equity
principles.
(v) All information provided hereunder pertaining to such
Loan is a true and correct reflection of Seller's records regarding
such Loan in all material respects;
(vi) Each Loan was made in compliance with all applicable
usury laws; and
(vii) The terms of the notes have not been altered, modified
or waived in any material respect, except by a written instrument
contained in the Loan Documents.
5.11 Financial and Deposit Data. To Seller's knowledge, all
written financial and Deposit information regarding the Assets and Liabilities
provided to Purchaser by Seller was accurate in all material respects as of the
date thereof.
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5.12 Records. The Records respecting the operations of the
Branches and the Assets and Liabilities accurately reflect in all material
respects the net book value of the Assets and Liabilities being transferred to
Purchaser hereunder. The Records include all information reasonably necessary
to service the Deposits and the Deposit Related Loans on an ongoing basis.
5.13 Title to Assets. Subject to the terms and conditions of this
Agreement, on the Closing Date Purchaser will acquire, good and marketable
title to all of the material Assets, free and clear of any Encumbrances;
provided, however, that this representation does not cover Owned Real Property
(with respect to which Seller has provided a Title Report and Purchaser is to
obtain its own Title Policy pursuant to Section 3.10), Branch Leases or Tenant
Leases.
5.14 Branch Leases. The Branch Leases give Seller the right to
occupy the building and land comprising the related Branch. Accurate copies of
all Branch Leases and all attachments, amendments and addenda thereto have
heretofore been made available to Purchaser. To Seller's knowledge, the Branch
Leases constitute valid and legally binding leasehold interests of Seller.
Except as described on Schedule 5.4, there are no leases, subleases,
occupancies, tenancies or rights of first refusal relating to any Branch
created or suffered to exist by Seller or, to Seller's knowledge, created or
suffered to exist by any other person.
5.15 Deposits. All of the Deposit accounts have been administered
and, to Seller's knowledge, originated, in compliance with the documents
governing the relevant type of Deposit account and all applicable laws. 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.
5.16 Environmental Laws; Hazardous Substances. To Seller's
knowledge, except as disclosed on Schedule 5.16, or as would not, individually
or in the aggregate, have a Material Adverse Effect, each parcel of Real
Property:
(a) has been operated by Seller in compliance with all applicable
Environmental Laws;
(b) is not the subject of any pending written notice from any
governmental authority alleging the violation of any applicable Environmental
Laws;
(c) is not currently subject to any court order, administrative
order or decree arising under any Environmental Law;
(d) has not been used during the period of Seller's ownership or
occupancy of such Real Property for the disposal of Hazardous Substances and is
not contaminated with any Hazardous Substances requiring remediation under any
applicable Environmental Law; and
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(e) has not, during the period of Seller's ownership or occupancy
of such Real Property, had any release of Hazardous Substances except as
permitted under applicable Environmental Laws.
For purposes of this Section 5.16, with respect to the parcels which
are subject to Branch Leases and Tenant Leases, "Seller's knowledge" shall mean
that an officer of Seller who holds the title of Senior Vice President or above
and has responsibility with respect to management of operations conducted at
the Branches on such parcels has received actual written notice from the
landlord that any one of the representations in (a) through (e) above is not
correct.
5.17 Broker's Fees. Except for Xxxxxxxxxx Securities, no broker
has been employed by or on behalf of Seller in connection with the transactions
contemplated by this Agreement. Seller will pay the fees of Xxxxxxxxxx
Securities.
5.18 Limitations on Representations and Warranties.
Notwithstanding anything to the contrary contained herein Seller makes no
representations or warranties to Purchaser in this Agreement or in any
agreement, instrument or other document executed in connection with any of the
transactions contemplated hereby or provided or prepared pursuant hereto or in
connection with any of the transactions contemplated hereby:
(a) As to title to Owned Real Property or as to the physical
condition (including, without limitation, ability to withstand seismic events)
of the Branches or Personal Property, all of which are being sold "AS IS",
"WHERE IS" and with all faults at the Closing Date; or
(b) As to whether, or the length of time during which, any
accounts will be maintained by the depositors at the Branches after the Closing
Date.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser represents and warrants to Seller as follows:
6.1 Corporate Organization and Authority. Purchaser is a state
chartered bank duly organized and validly existing under the laws of California
and has the requisite power and authority to conduct the business conducted at
the Branches substantially as currently conducted by Seller. Purchaser has the
requisite corporate power and authority and has taken all corporate action
necessary in order to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. This Agreement is a valid and binding
agreement of Purchaser enforceable in accordance with its terms subject, as to
enforcement, to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles.
6.2 No Conflicts. The execution, delivery and performance of this
Agreement by Purchaser does not, and will not, (i) violate any provision of its
charter or by-laws or (ii) violate
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or constitute a breach of, or default under, any law, rule, regulation,
judgment, decree, ruling or order of any court, government or governmental
agency to which Purchaser is subject or under any agreement or instrument of
Purchaser, or to which Purchaser is subject or by which Purchaser is otherwise
bound, which violation, breach, contravention or default referred to in this
clause (ii), individually or in the aggregate, would have a Material Adverse
Effect.
6.3 Approvals and Consents. Other than the Regulatory Approvals
or as otherwise disclosed in writing to Seller by Purchaser prior to the date
hereof, no notices, reports or other filings are required to be made by
Purchaser with, nor are any consents, registrations, approvals, permits or
authorizations required to be obtained by Purchaser from any governmental or
regulatory authorities of the United States, the several States or any foreign
jurisdictions in connection with the execution and delivery of this Agreement
by Purchaser and the consummation of the transactions contemplated hereby by
Purchaser, the failure to make or obtain any or all of which, individually or
in the aggregate, would have a Material Adverse Effect.
6.4 Regulatory Matters. (a) Except as previously disclosed in
writing to Seller, there are no pending, or to Purchaser's knowledge
threatened, disputes or controversies between Purchaser and any federal, state
or local governmental agency or authority that, individually or in the
aggregate, would have a Material Adverse Effect.
(b) Purchaser is not a party to any written order, decree,
agreement or memorandum of understanding with, or commitment letter or similar
submission to, any federal or state governmental agency or authority charged
with the supervision or regulation of depository institutions, nor has
Purchaser been advised by any such agency or authority that it is contemplating
issuing or requesting (or is considering the appropriateness of issuing or
requesting) any such order, decree, agreement, memorandum of understanding,
commitment letter or submission, in each case which, individually or in the
aggregate, would have a Material Adverse Effect.
(c) Purchaser is, and on a pro forma basis giving effect to the
P&A Transaction will be, (i) at least "adequately capitalized", as defined for
purposes of the FDIA, and (ii) in compliance with all capital requirements,
standards and ratios required by each state or federal bank regulator with
jurisdiction over Purchaser, including, without limitation, any such higher
requirements, standard or ratio as shall apply to institutions engaging in the
acquisition of insured institution deposits, assets or branches, and no such
regulator is likely to, or has indicated that it will, condition any of the
Regulatory Approvals upon an increase in Purchaser's capital or compliance with
any capital requirements, standard or ratio.
(d) Purchaser has no knowledge that it will be required to divest
deposit liabilities, branches, loans or any business or line of business as a
condition to the receipt of any of the Regulatory Approvals.
(e) Each of the subsidiaries or Affiliates of Purchaser that is an
insured depository institution was rated "Satisfactory" or "Outstanding"
following its most recent Community
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Reinvestment Act examination by the regulatory agency responsible for its
supervision. Purchaser has received no notice of and has no knowledge of any
planned or threatened objection by any community group to the transactions
contemplated hereby.
6.5 Litigation and Undisclosed Liabilities. There are no actions,
suits or proceedings that have a reasonable likelihood of an adverse
determination pending or, to Purchaser's knowledge, threatened against
Purchaser, or obligations or liabilities (whether or not accrued, contingent or
otherwise) or, to Purchaser's knowledge, facts or circumstances that could
reasonably be expected to result in any claims against or obligations or
liabilities of Purchaser that, individually or in the aggregate, would have a
Material Adverse Effect.
6.6 Financing Available. Not later than the Closing Date,
Purchaser will have available sufficient cash or other liquid assets or
financing pursuant to binding agreements or commitments which may be used to
fund the P&A Transaction; and Purchaser's ability to consummate the
transactions contemplated by this Agreement is not contingent on raising any
equity capital, obtaining specific financing thereof, consent of any lender or
any other matter.
6.7 Broker's Fees. Purchaser has not employed any broker or
finder or incurred any liability for any brokerage fees, commissions or
finder's fees in connection with the transactions contemplated by this
Agreement.
ARTICLE 7
COVENANTS OF THE PARTIES
7.1 Activity in the Ordinary Course. Until the Closing Date, (a)
Seller shall conduct the business of the Branches (including, without
limitation, filling open positions at the Branches and job-posting in the
Branches for open positions at other offices of Seller) in the ordinary and
usual course of business consistent with past practice and giving effect to the
fact that Seller is engaged in certain systems conversions and office closings
arising out of its recent merger with First Interstate Bank, and (b) Seller
shall not, without the prior written consent of Purchaser:
(i) Increase or agree to increase the salary, remuneration or
compensation of any Branch Employee (or make any material increase or decrease
in the number of such persons, or transfer such persons to or from any Branch)
other than in accordance with Seller's existing customary policies generally
applicable to employees having similar rank or duties, or pay or agree to pay
any uncommitted bonus to any Branch Employee other than regular bonuses granted
in the ordinary course of Seller's business (which bonuses, in any event, shall
be the responsibility of Seller); or, except at the request of such Branch
Employee, transfer any Branch Employee to another branch or office, of Seller
or any of its Affiliates;
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(ii) Offer interest rates or terms on any category of deposits at a
Branch except as determined in a manner consistent with Seller's practice with
respect to its branches which are not being sold;
(iii) Transfer to or from any Branch to or from any of Seller's
other operations or branches any material Assets or any Deposits, except (A) in
the ordinary course of business or as contemplated in this Agreement, or (B)
upon the unsolicited request of a depositor or customer;
(iv) Sell, transfer, assign, encumber or otherwise dispose of or
enter into any contract, agreement or understanding to sell, transfer, assign,
encumber or dispose of any of the Assets existing on the date hereof, except in
the ordinary course of business and in an immaterial aggregate amount;
provided, however, that in any event, Seller shall not knowingly take any
action that would create any Encumbrance on any of the Real Property or the
Branch Leases;
(v) Make or agree to make any material improvements to the Owned
Real Property, except with respect to commitments for such made on or before
the date of this Agreement (and heretofore disclosed in writing to Purchaser)
and normal maintenance, repair or refurbishing purchased or made in the
ordinary course of business;
(vi) File any application or give any notice to relocate or close
any Branch or relocate or close any Branch;
(vii) Amend, terminate or extend in any material respect any Branch
Lease, Tenant Lease or Personal Property Lease; provided, however, Seller may
extend any Branch Lease, Tenant Lease or Personal Property Lease, in its
reasonable business judgment (including without limitation pursuant to the
terms and conditions of any contractual option to extend in any Branch Lease,
Tenant Lease or Personal Property Lease) if Seller determines such extension is
necessary to deliver the Branch on the Closing Date as a fully operative branch
banking operation.
7.2 Access and Confidentiality. (a) Until the Closing Date,
Seller shall afford to Purchaser and its officers and authorized agents and
representatives reasonable access to the properties, books, records, contracts,
documents, files and other information of or relating to the Assets and
Liabilities. Purchaser and Seller each will identify to the other, within ten
(10) days after the date hereof, a selected group of their respective salaried
personnel that shall constitute a "transition group" who will be available to
Seller and Purchaser, respectively, at reasonable times (limited to normal
operating hours) to provide information and assistance in connection with
Purchaser's investigation of matters relating to the Assets and Liabilities.
Seller shall cause other personnel to be reasonably available during normal
business hours, to an extent not disruptive of ongoing operations, for the same
purposes. Any investigation pursuant to this Section 7.2 shall be conducted in
such manner as not to interfere unreasonably with the conduct of the Seller's
business. Notwithstanding the foregoing, Seller shall not be required to
provide access to or disclose information where such access or disclosure would
impose an unreasonable burden on Seller, or any employee of Seller or would
violate or prejudice the rights of customers, jeopardize any attorney-client
privilege or contravene any law, rule, regulation, order, judgment, decree,
fiduciary duty or binding agreement entered into prior to the date of this
Agreement. The
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parties hereto shall make appropriate substitute disclosure arrangements under
circumstances in which the restrictions of the preceding sentence apply.
(b) EACH PARTY TO THIS AGREEMENT SHALL HOLD, AND SHALL CAUSE ITS
RESPECTIVE DIRECTORS, OFFICERS, EMPLOYEES, AGENTS, CONSULTANTS AND ADVISORS TO
HOLD, IN STRICT CONFIDENCE, UNLESS DISCLOSURE TO A BANK REGULATORY AUTHORITY IS
NECESSARY OR DESIRABLE IN CONNECTION WITH ANY REGULATORY APPROVAL OR UNLESS
COMPELLED TO DISCLOSE BY JUDICIAL OR ADMINISTRATIVE PROCESS OR, IN THE WRITTEN
OPINION OF ITS COUNSEL, BY OTHER REQUIREMENTS OF LAW OR THE APPLICABLE
REQUIREMENTS OF ANY REGULATORY AGENCY OR RELEVANT STOCK EXCHANGE, ALL
NON-PUBLIC RECORDS, BOOKS, CONTRACTS, INSTRUMENTS, COMPUTER DATA AND OTHER DATA
AND INFORMATION (COLLECTIVELY, "INFORMATION") CONCERNING THE OTHER PARTY (OR,
IF REQUIRED UNDER A CONTRACT WITH A THIRD PARTY, SUCH THIRD PARTY) FURNISHED IT
BY SUCH OTHER PARTY OR ITS REPRESENTATIVES PURSUANT TO THIS AGREEMENT (EXCEPT
TO THE EXTENT THAT SUCH INFORMATION CAN BE SHOWN TO HAVE BEEN (i) PREVIOUSLY
KNOWN BY SUCH PARTY ON A NON-CONFIDENTIAL BASIS, (ii) IN THE PUBLIC DOMAIN
THROUGH NO FAULT OF SUCH PARTY OR (iii) LATER LAWFULLY ACQUIRED FROM OTHER
SOURCES BY THE PARTY TO WHICH IT WAS FURNISHED), AND NEITHER PARTY SHALL
RELEASE OR DISCLOSE SUCH INFORMATION TO ANY OTHER PERSON, EXCEPT ITS AUDITORS,
ATTORNEYS, FINANCIAL ADVISORS, BANKERS, OTHER CONSULTANTS AND ADVISORS AND, TO
THE EXTENT PERMITTED ABOVE, TO BANK REGULATORY AUTHORITIES.
7.3 Regulatory Approvals. As soon as practicable after the date
of this Agreement, Purchaser shall prepare and file any applications, notices
and filings required in order to obtain the Regulatory Approvals. Purchaser
shall use all reasonable efforts to obtain each such approval as promptly as
reasonably practicable and, to the extent possible, in order to permit the
Closing to occur not later than March 31, 1997. Seller will cooperate in
connection therewith (including the furnishing of any information and any
reasonable undertaking or commitments which may be required to obtain the
Regulatory Approvals). Each party will provide the other with copies of any
applications and all correspondence relating thereto prior to filing, other
than material filed in connection therewith under a claim of confidentiality.
7.4 Consents. Seller agrees to use reasonable commercial efforts
(such efforts not to include making payments to third parties) to obtain from
lessors and any other parties to any Branch Leases or Personal Property Leases
any required consents to the assignment of the Branch Leases and Personal
Property Leases to Purchaser on the Closing Date; provided, however, the Seller
shall not be obligated to incur any monetary obligations or expenditures to the
parties whose consent is required in connection with the utilization of its
reasonable efforts to obtain any such required consents. If any such required
consent cannot be obtained, notwithstanding any other provision hereof, the
Assets and Liabilities associated with the subject Branch, other than any such
Branch Lease or any Personal Property Lease or as to which consent cannot be
obtained, shall nevertheless be transferred to Purchaser at the Closing and the
parties
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shall negotiate in good faith and Seller and Purchaser shall use reasonable
efforts (such efforts not to include making payments to third parties) to make
alternative arrangements reasonably satisfactory to Seller and Purchaser. In
the event Seller does not obtain consent from the lessors and any other parties
to any Branch Lease or Personal Property Lease, Seller shall not be obligated
to deliver physical possession of the subject Branch or the personal property
subject to such Personal Property Lease to Purchaser at the Closing.
7.5 Efforts to Consummate; Further Assurances. (a) Purchaser and
Seller agree to use all reasonable efforts to satisfy or cause to be satisfied
as soon as practicable their respective obligations hereunder and the
conditions precedent to the Closing.
(b) Seller will duly execute and deliver such assignments, bills
of sale, deeds, acknowledgments and other instruments of conveyance and
transfer as shall at any time be necessary or appropriate to vest in Purchaser
the full legal and equitable title to the Assets.
(c) On and after the Closing Date, each party will promptly
deliver to the other all mail and other communications properly addressable or
deliverable to the other as a consequence of the P&A Transaction; and without
limitation of the foregoing, on and after the Closing Date, Seller shall
promptly forward any mail, communications or other material relating to the
Deposits or the Assets transferred on the Closing Date, including, but not
limited to, that portion of any IRS "B" tapes that relates to such Deposits, to
such employees of Purchaser at such addresses as may from time to time be
specified by Purchaser in writing.
(d) The costs incurred by a party in performing its obligations to
the other (x) under Sections 7.5(a) and (c) shall be borne by the initial
recipient and (y) otherwise under this Section 7.5 shall be borne by Purchaser.
Seller will cooperate with Purchaser to minimize the costs referred to in
clause (y).
7.6 Solicitation. (a) Until the Closing Date and for an
additional six (6) months following the Closing Date, Seller agrees that it
will not solicit deposits (but may solicit loans or other business) from or to
persons or entities who were depositors at the Branches on the date hereof by
personal contact, by telephone, by facsimile, by mail or other similar
solicitation, or in any other way except for general solicitations and
solicitations that are not directed primarily to persons or entities who were
depositors of the Branches on the date hereof; provided, however, that Seller
may solicit depositors who as of the date of this Agreement have existing
accounts originating at branches or other offices of Seller or its Affiliates
other than the Branches pursuant to solicitations which arise from their status
as a customer at such other branches or offices; and provided, further, that
Seller may solicit major or statewide depositors (such as, for example, a
company with more than one location or the state government or any agency or
instrumentality thereof) without restriction hereunder.
(b) Prior to the Closing Date, Purchaser agrees that it will not
attempt to solicit Branch customers through advertising nor transact its
business in a way which would induce such Branch customers to close any account
and open accounts directly with Purchaser or would otherwise result in a
transfer of all or a portion of an existing account from Seller to Purchaser or
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to any other financial institution. Notwithstanding the foregoing sentence,
Purchaser and its Affiliates shall be permitted to: (i) engage in advertising,
solicitations or marketing campaigns not primarily directed to or targeted at
such Branch customers; (ii) engage in lending, deposit, safe deposit, trust or
other financial services relationships existing as of the date hereof which
such Branch customers through other branch offices of Purchaser; (iii) respond
to unsolicited inquiries by such Branch customers with respect to banking or
other financial services; and (iv) provide notices or communications relating
to the transactions contemplated hereby in accordance with the provisions
hereof.
7.7 Insurance. Seller will maintain in effect until the Closing
Date all casualty and public liabilities policies relating to the Branches and
maintained by Seller on the date hereof or procure comparable replacement
policies and maintain such replacement policies in effect until the Closing
Date.
7.8 No Servicing and Maintenance Contracts. Except for the
Personal Property Leases, no existing contracts of Seller with respect to the
service, maintenance and physical operation of the Branches will be assumed at
the Closing by Purchaser. All such service and maintenance shall be provided
by Purchaser, subsequent to the Closing, pursuant to its own contracts.
ARTICLE 8
TAXES AND EMPLOYEE BENEFITS
8.1 Tax Representations. Seller represents and warrants to
Purchaser as follows:
(a) Except as set forth in Schedule 8.1, all Tax Returns with
respect to the Assets or income therefrom, the Liabilities or payments in
respect thereof or the operation of the Branches, that are required to be filed
(taking into account any extension of time within which to file) before the
Closing Date, have been or will be duly filed, and all Taxes shown to be due on
such Tax Returns have been or will be paid in full.
(b) With respect to the Deposits, Seller is in compliance with the
Code and regulations thereunder relative to obtaining form depositors of the
Deposits executed IRS Forms W-8 and W-9. With respect to the Deposits opened
after December 31, 1983, Seller has either obtained a properly completed Form
W-8 or W-9 (or a substitute form meeting applicable requirements) or is back-up
withholding on such account.
8.2 Proration of Taxes. Except as otherwise agreed to by the
parties, whenever it is necessary to determine the liability for Taxes for a
portion of a taxable year or period that begins before and ends on or after the
Closing Date, the determination of the Taxes for the portion of the year or
period ending on, and the portion of the year or period beginning on or after,
the Closing Date shall be determined by assuming that the taxable year or
period ended at 11:59 P.M. California time on the day prior to the Closing
Date.
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8.3 Sales and Transfer Taxes. Except as set forth in Section 3.9,
all excise, sales, use and transfer taxes that are payable or that arise as a
result of the consummation of the purchase and sale contemplated by this
Agreement shall be paid by Purchaser and Purchaser shall indemnify and hold
Seller harmless from and against any such taxes.
8.4 Information Returns. At the Closing or as soon thereafter as
is practicable, Seller shall provide Purchaser with a list of all Deposits for
which Seller has not received a properly completed Form W-8 and W-9 (or a
substitute form meeting applicable requirements) or on which Seller is back-up
withholding as of the Closing Date. Seller agrees to indemnify Purchaser in an
amount equal to any penalty and interest imposed upon Purchaser by the IRS
which Purchaser is thereafter required to, and does, pay to the IRS where such
penalty and interest arises out of actions taken or omitted to be taken by
Purchaser in reasonable reliance upon information provided under this Section
8.4 and such penalty and interest does not result from an act or omission of
Purchaser not made in reasonable reliance upon such information. The term
"interest" for purposes of this Section 8.4 means interest accrued prior to the
receipt by Purchaser of a notice of Penalty from the IRS regarding Forms W-8 or
W-9 for the Deposits. Purchaser shall timely notify Seller of such penalty
notice prior to Purchaser's payment of any penalty or interest. Seller has the
right, at its own expense, to protest such penalty and interest. Purchaser
shall cooperate fully with respect to Seller's protest, including furnishing
all relevant information, records, and documents.
8.5 Payment of Amount Due Under Article 8. Any payment by Seller
to Purchaser, or to Seller from Purchaser, under this Article 8 (other than
payments required by Section 8.3) to the extent due at the Closing may be
offset against any payment due the other party at the Closing. All subsequent
payments under this Article 8 shall be made as soon as determinable and shall
be made and bear interest from the date due to the date of payment as provided
in Section 3.2(b).
8.6 Assistance and Cooperation. After the Closing Date, each of
Seller and Purchaser shall:
(a) Make available to the other and to any taxing authority as
reasonably requested all relevant information, records, and documents relating
to Taxes with respect to the Assets or income therefrom, the Liabilities or
payments in respect thereof, or the operation of the Branches;
(b) Provide timely notice to the other in writing of any pending
or proposed Tax audits (with copies of all relevant correspondence received
from any Taxing authority in connection with any Tax audit or information
request) or Tax assessments with respect to the Assets or the income therefrom,
the Liabilities or payments in respect thereof, or the operation of the
Branches for taxable periods for which the other may have a liability under
this Article 8; and
(c) The party requesting assistance or cooperation shall bear the
other party's out-of-pocket expenses in complying with such request to the
extent that those expenses are attributable to fees and other costs of
unaffiliated third party service providers.
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8.7 Employees. (a) As soon as reasonably practicable and in any
event within thirty (30) days of the date hereof, Seller shall deliver to
Purchaser a true and complete list of all Branch Employees by name, date of
hire and position, as of the date hereof, together with their most recent
performance evaluations, current salaries and other compensation arrangements;
provided, however, that Seller shall not release a performance evaluation
without having first obtained the written consent of the respective Branch
Employee. Purchaser may, at its discretion, interview any and all Branch
Employees. Purchaser shall make employment available to all Branch Employees
on the Closing Date upon the terms and conditions described below. Seller
shall promptly inform Purchaser of any Branch Employee who resigns prior to the
Closing Date. On and after the Closing Date, Branch Employees employed by
Purchaser shall be defined as Transferred Employees for all purposes hereof.
Subject to the provisions of this Section 8.7, Transferred Employees shall be
subject to the employment terms, conditions and rules applicable to other
employees of Purchaser. Nothing contained in this Agreement shall be construed
as an employment contract between Purchaser and any Branch Employee or
Transferred Employee.
(b) Purchaser may interview Branch Employees during normal working
hours. Purchaser shall be solely responsible for any activity in connection
with interviewing Branch Employees. Purchaser indemnifies and holds Seller
harmless from and against any claim, liability, losses, costs or expenses,
including reasonable attorneys' fees, resulting or arising from Purchaser's
acts or omissions in connection with said interviews.
(c) Purchaser shall be responsible for the Assumed Severance
Obligations with respect to all Branch Employees.
(d) Each Transferred Employee shall be provided employment subject
to the following terms and conditions:
(i) Base salary rate shall be at least equivalent to the
rate of base salary paid by Seller to such Transferred Employee as of
the close of business on the day prior to the Closing Date.
(ii) Except as specifically provided herein, Transferred
Employees shall be provided employee benefits that are no less
favorable in the aggregate than those provided to similarly situated
employees of Purchaser. Purchaser shall provide such Transferred
Employee with credit for the Transferred Employee's period of service
with Seller (including any service credited from First Interstate Bank
as a predecessor entity to Seller) towards the calculation of
eligibility for such purposes as vacation, severance and other benefits
and participation and vesting in Purchaser's qualified pension or
profit sharing plan, as such plans may exist (but, except as set forth
in (v) below and for vacation, not for purpose of benefit accruals,
including without limitation, funding of accrued pension or profit
sharing plans for such Transferred Employee with respect to any period
prior to the Closing Date).
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(iii) Each Transferred Employee shall be eligible to
participate in the medical, dental or other welfare plans of Purchaser,
as such plans may exist, effective as of the Closing Date and any
pre-existing conditions provisions of such plans shall be waived with
respect to such Transferred Employee; provided, however, that if
Purchaser's relevant health or disability insurance policy or plan has
a pre-existing condition limitation and a Transferred Employee's
condition is being excluded (as a pre-existing condition) under
Seller's plan as of the Closing Date, Purchaser may treat such
condition as a pre-existing condition for the period such condition
would have been treated as a pre-existing condition under Seller's plan
under which such Transferred Employee would have been covered.
(iv) With respect to any Transferred Employee on a
short-term disability or temporary leave of absence, upon conclusion of
his or her short-term disability or temporary leave of absence, subject
to the terms and conditions of the Purchaser's plans and policies and
applicable law, each Transferred Employee on such leave shall receive
the salary and vacation benefits in effect when he or she went on
leave, shall otherwise be treated as a Transferred Employee and, to the
extent practicable, shall be offered by Purchaser the same or a
substantially equivalent position to his or her position with Seller
prior to having gone on leave.
(v) Until April 1, 1998, each Transferred Employee shall
be eligible for benefits under the severance and similar plans referred
to in Schedule 1.1(a) (the "Assumed Severance Obligations"). After
April 1, 1998, each Transferred Employee, who is continuously employed
by Purchaser as of the Closing Date, shall be eligible for benefits
under any severance or similar plans maintained by Purchaser with
credit for the period of years of credited service with Seller towards
the calculation of benefits.
(e) Except as provided herein, Seller shall pay, discharge and be
responsible for (i) all salary and wages, arising out of or relating to the
employment of the Branch Employees before the Closing Date and (ii) any
employee benefits (including, but not limited to, accrued vacation) arising
under Seller's employee benefit plans and employee programs prior to the
Closing Date (but not including any future retiree medical benefits), including
benefits with respect to claims incurred prior to the Closing Date but reported
after the Closing Date. From and after the Closing Date, Purchaser shall pay,
discharge and be responsible for all salary, wages and benefits arising out of
or relating to the employment of the Transferred Employees by Purchaser on and
after the Closing Date, including, without limitation, all claims for welfare
benefit plans incurred on or after the Closing Date. Claims are incurred as of
the date services are provided or disability payments are accrued,
notwithstanding when the injury or illness may have occurred.
(f) To the extent permitted under Purchaser's 401(k) plan, Seller
and Purchaser shall cooperate in arranging for the transfer to Purchaser's
401(k) plan, as soon as practicable after the Closing Date and in a manner that
satisfies sections 414(l) and 411(d)(6) of the Code, of those accounts held
under Seller's 401(k) plan on behalf of Transferred Employees.
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(g) For a period of twelve (12) months following the Closing Date,
Seller shall not solicit any Transferred Employee hired by Purchaser as of the
Closing Date to again become an employee of Seller or any of its Affiliates;
provided, however, that Seller shall not be prohibited from hiring a
Transferred Employee if such Transferred Employee contacts Seller to seek such
hiring or retention, whether in response to general advertising or otherwise.
For purposes of this Section 8.7, the term "Seller" shall include Xxxxx Fargo &
Company, a Delaware corporation and their Affiliates.
8.8 Branch Employee Representations. (a) Seller represents and
warrants to Purchaser, to Seller's knowledge, as follows:
(i) none of the Branch Employees is a member of any labor
union;
(ii) Seller is not a party to any individual contract,
written or oral, express or implied, for the employment of any Branch
Employee, and Seller is not subject to any collective bargaining
arrangement with respect to any Branch Employee;
(iii) Seller's 401(k) Plan is in compliance in all material
respects with applicable law;
(iv) no liabilities exist or are reasonably expected to
exist under any employee benefit plan of Seller that, individually or
in the aggregate, would have a Material Adverse Effect; and
(v) Seller has not entered into any individual agreement
or otherwise made any individual commitment to any Branch Employee with
respect to continued employment by Purchaser.
(b) Seller shall indemnify and hold Purchaser harmless from and
against any claims, losses, damages or expenses (including attorney's fee)
suffered as a result of any failure to give any notice to its Branch Employees
required by the Worker Adjustment and Retraining Notification Act (the "WARN
Act"), provided such notice is required as a result of action by Seller prior
to the Closing Date.
ARTICLE 9
CONDITIONS TO CLOSING
9.1 Conditions to Obligations of Purchaser. Unless waived in
writing by Purchaser, the obligation of Purchaser to consummate the P&A
Transaction is conditioned upon satisfaction of each of the following
conditions:
(a) Regulatory Approvals. All consents, approvals and
authorizations required to be obtained prior to the Closing from governmental
and regulatory authorities in connection with the execution and delivery of
this Agreement and the consummation of the transactions
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contemplated hereby to be consummated at the Closing, including the Regulatory
Approvals, shall have been made or obtained, and shall remain in full force and
effect, and all waiting periods applicable to the consummation of the P&A
Transaction shall have expired or been terminated; provided, however, that no
Regulatory Approval shall have imposed any condition or requirement (a
"Burdensome Condition") that would (i) result in any Material Adverse Effect or
(ii) require Purchaser to effect any divestiture that would constitute a
substantial portion of the business or properties of the Branches, taken as a
whole.
(b) Orders. No court or governmental authority of competent
jurisdiction shall have enacted, issued, promulgated, enforced or entered any
statute, rule, regulation, judgment, decree, injunction or other order (whether
temporary, preliminary or permanent) (any of the foregoing, an "Order") which
is in effect and prohibits or makes illegal the consummation of the P&A
Transaction or would otherwise result in a Material Adverse Effect.
(c) Representations and Warranties; Covenants. Each of the
representations and warranties of Seller contained in this Agreement shall be
true in all material respects when made and as of the Closing Date, with the
same effect as though such representations and warranties had been made on and
as of the Closing Date (except that representations and warranties relating to
Assets and Liabilities transferred at the Closing Date shall only be made, and
need only be true in all material respects, on and as of the Closing Date).
Purchaser shall have received at Closing a certificate to that effect dated as
of such Closing Date and executed by the President or any Executive Vice
President of Seller. Each of the covenants and agreements of Seller to be
performed on or prior to the Closing Date shall have been duly performed in all
material respects. Purchaser shall have received at Closing a certificate to
that effect dated as of such Closing Date and executed by the President or any
Executive Vice President of Seller.
Notwithstanding any other provision of this Agreement, if there shall
be a failure of any condition specified in this Section 9.1 to the obligations
of Purchaser in respect of the acquisition of any specific Branch or Branches
the aggregate Deposits of which as of the date hereof shall constitute less
than 25% of the Deposits in all of the Branches subject to this Agreement as of
the date hereof, Purchaser nevertheless shall be obligated to consummate the
P&A Transaction but may, upon written notice to Seller, exclude from the
transaction the Branch or Branches in respect of which the failure of condition
shall exist, in which case, appropriate adjustment shall be made in the
schedules hereto and the other documents to be delivered pursuant hereto so as
to duly reflect the deletion of such Branch or Branches from the transactions
contemplated hereby (and, consequently, to the calculation of the Estimated
Purchase Price, Estimated Payment Amount, Purchase Price and Adjusted Payment
Amount). If any Branch is excluded from this Agreement or if Purchaser
nevertheless elects to purchase any Branch which would otherwise be so excluded
and such Branch is transferred to Purchaser at the Closing (subject to
Purchaser's rights under Section 12.1(a)), any event that would otherwise
constitute a breach of warranty or failure of condition in respect of such
Branch arising solely from or relating to the operation of this paragraph shall
not constitute a breach of warranty or failure of condition.
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9.2 Conditions to Obligations of Seller. Unless waived in writing
by Seller, the obligation of Seller to consummate the P&A Transaction is
conditioned upon satisfaction of each of the following conditions:
(a) Regulatory Approvals. All consents, approvals and
authorizations required to be obtained prior to the Closing from governmental
and regulatory authorities in connection with the execution and delivery of
this Agreement and the consummation of the transactions contemplated hereby to
be consummated at the Closing, including the Regulatory Approvals, shall have
been made or obtained, and shall remain in full force and effect, and all
statutory waiting periods applicable to the consummation of the P&A Transaction
shall have expired or been terminated.
(b) Orders. No Order shall be in effect that prohibits or makes
illegal the consummation of the P&A Transaction.
(c) Representations and Warranties; Covenants. Each of the
representations and warranties of Purchaser contained in this Agreement shall
be true in all material respects when made and as of the Closing Date, with the
same effect as though such representations and warranties had been made on and
as of the Closing Date (except that representations and warranties that are
made as of a specific date need be true in all material respects only as of
such date). Seller shall have received at Closing a certificate to that effect
dated as of such Closing Date and executed by the President or any Executive
Vice President of Purchaser. Each of the covenants and agreements of Purchaser
to be performed on or prior to the Closing Date shall have been duly performed
in all material respects. Seller shall have received at Closing a certificate
to that effect dated as of such Closing Date and executed by the President or
any Executive Vice President of Purchaser.
ARTICLE 10
ENVIRONMENTAL MATTERS
10.1 Environmental Matters. (a) Seller has provided to Purchaser
and Purchaser hereby acknowledges receipt of copies of Phase I environmental
site assessments for all Owned Real Property and asbestos reports with respect
to all the Real Property, except for Real Property where the improvements have
been completed after December 31, 1978. Such Phase I environmental site
assessments for all Owned Real Property have been dated (or supplemented) on or
after January 1, 1996.
(b) If such Phase I site assessments and asbestos reports
reasonably indicate the necessity or desirability of further investigation to
determine whether or not an Environmental Hazard or an Asbestos Hazard exists
at such Real Property, Purchaser may elect, not later than thirty (30) days
after the signing of this Agreement, to have Xxxxxxx Environmental, Building
Analytics, or another similarly qualified environmental engineer or consultant
mutually acceptable to Purchaser and Seller (the "Environmental Consultant"),
to the extent reasonable and appropriate, conduct Phase II environmental site
assessments and additional asbestos
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investigations, the cost of which shall be shared equally by the parties. Any
such further investigation or testing shall be conducted in such a manner so as
not to interfere with the normal operation of the Branch(s) involved. All such
Phase II environmental site assessments and additional asbestos reports shall
be treated as information subject to Section 7.2(b) and shall be completed not
less than ninety (90) days after the signing of this Agreement.
(c) In the event that the Environmental Consultant has discovered
an Environmental Hazard, and/or Asbestos Hazard, during any such Phase II
environmental site assessment at any single parcel of Owned Real Property, the
remediation of which, in the reasonable judgment of the Environmental
Consultant, is or would be the responsibility of Seller, or Purchaser should it
acquire such Owned Real Property, and will cost $100,000 or more for such
single parcel of Owned Real Property, Purchaser shall lease from Seller such
single parcel of Owned Real Property pursuant to a Lease Agreement that shall
provide as follows:
(i) Such Lease Agreement shall be for a term of two (2)
years, with no obligation or right to renew (it being the intention of
Seller that Purchaser locate an alternative branch site during such two
years), at a rental equal to a fair market rental value;
(ii) Seller may sell such Owned Real Property to any
person, subject to such Lease Agreement, for any price;
(iii) During the term of such Lease Agreement, in the event
that Seller shall deliver to Purchaser a report of a qualified
environmental engineer or consultant certifying that the Environmental
Hazard, and/or Asbestos Hazard, at or on any such leased parcel of
Owned Real Property has been remediated to the extent required under
applicable Environmental Laws, Purchaser shall be required to purchase
such parcel of Owned Real Property at the net book value as of the close
of business of the month-end day most recently preceding the Closing
Date; and
(iv) Other terms and conditions of the Lease Agreement
shall be typical to such branch leases in the market as negotiated
between Seller and Purchaser.
If the remediation cost is less than $100,000 for any single parcel of
Owned Real Property, Purchaser shall acquire such parcel and such cost shall be
borne by Purchaser without indemnity under this Agreement.
(d) Purchaser agrees that it and its Environmental Consultant
shall conduct any Phase II environmental site assessments or other
investigations pursuant to this Section with reasonable care and subject to
customary practices among environmental consultants and engineers, including,
without limitation, following completion thereof, the restoration of any site
to the extent practicable to its condition prior to such site assessment or
investigation and the removal of all monitoring xxxxx.
(e) Any lease of a parcel of Owned Real Property under Section
10.1(c) shall in no way affect the transfer of any Assets or Liabilities, other
than such parcel of Owned Real Property, to the Purchaser at the Closing.
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ARTICLE 11
TERMINATION
11.1 Termination. This Agreement may be terminated at any time
prior to the Closing Date:
(a) By the mutual written agreement of Purchaser and Seller;
(b) By Seller or Purchaser, in the event of a material breach by
the other of any representation, warranty or agreement contained herein which
is not cured or cannot be cured within thirty (30) days after written notice of
such termination has been delivered to the breaching party; provided, however,
that termination pursuant to this Section 11.1(b) shall not relieve the
breaching party of liability arising out of or related to such breach;
(c) By Seller or Purchaser, in the event that the Closing has not
occurred by March 31, 1997 unless the failure to so consummate by such time is
due to a breach of this Agreement by the party seeking to terminate;
(d) By Seller or Purchaser at any time after the denial or
revocation of any Regulatory Approval or by Purchaser if any such approval has
been obtained which contains a Burdensome Condition; or
(e) By Seller if, at any time prior to the Closing Date, an
appropriate official of any governmental agency or authority whose consent,
approval or authorization is required in order for Purchaser to consummate the
transactions contemplated hereby shall have advised that such authority will
not grant such consent, approval or authorization or will grant the same only
subject to a Burdensome Condition (unless Purchaser shall have waived the
condition provided for in the proviso to Section 9.1(a)), or where there shall
be in effect any Order, or if there shall exist any proceeding which, in
Seller's reasonable judgment, would result in an Order; provided, however, that
Purchaser shall have fifteen (15) days following receipt of notice from Seller
to remedy any such situation or to provide assurances reasonably acceptable to
Seller that such situation will be remedied by the Closing Date.
11.2 Effect of Termination. In the event of termination of this
Agreement and abandonment of the transactions contemplated hereby pursuant to
Section 11.1, no party hereto (or any of its directors, officers, employees,
agents or Affiliates) shall have any liability or further obligation to any
other party, except as provided in Section 7.2(b) and except that nothing
herein will relieve any party from liability for any breach of this Agreement.
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ARTICLE 12
INDEMNIFICATION AND OTHER REMEDIES
12.1 Indemnification. (a) Subject to Section 13.1, Seller shall
indemnify and hold harmless Purchaser and any person directly or indirectly
controlling Purchaser from and against any and all Losses which Purchaser may
suffer, incur or sustain arising out of or attributable to (i) any breach of
any representation or warranty made by Seller in this Agreement, (ii) any
material breach of any covenant or agreement to be performed by Seller pursuant
to this Agreement, (iii) any claim, penalty asserted, legal action or
administrative proceeding based upon any action taken or omitted to be taken by
Seller or conditions existing prior to the Closing Date, relating in any such
case to the operation of the Branches, the Assets or the Liabilities; or (iv)
any liability, obligation or duty of Seller that is not a Liability.
(b) Subject to Section 13.1, Purchaser shall indemnify and hold
harmless Seller and any person directly or indirectly controlling Seller from
and against any and all Losses which Seller may suffer, incur or sustain
arising out of (i) any breach of any representation or warranty made by
Purchaser in this Agreement, (ii) any material breach of any covenant or
agreement to be performed by Purchaser pursuant to this Agreement, including,
without limitation, the covenants contained in Section 10.2 above, or (iii) any
claim, penalty asserted, legal action or administrative proceeding based upon
any action taken or omitted to be taken by Purchaser on or after the Closing
Date, relating in any such case to the operation of the Branches or the Assets,
or (iv) the Liabilities.
(c) To exercise its indemnification rights under this Section 12.1
as a result of the assertion against it of any claim or potential liability 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 the commencement of any action or proceeding in respect
of which indemnity may be sought hereunder; PROVIDED, HOWEVER, in no event
shall notice of original claim for indemnification under this Agreement be
given later than the expiration of one (1) year from the Closing Date
(excluding only claims related to the covenants in Section 10.2 above). 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. 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 or (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 defenses or conflicts of interests between them.
(d) The indemnified party shall have the 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,
unless the indemnifying party, within sixty (60) calendar days after
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receiving written notice of the claim or liability in accordance with Section
12.1(c) above, notifies the indemnified party that it intends to defend against
such claim or liability and undertakes such defense, or, if required in a
shorter time than sixty (60) calendar days, the indemnifying party makes the
requisite response to such claim or liability asserted.
(e) Notwithstanding anything to the contrary contained in this
Agreement, an indemnifying party shall not be liable under this Section 12.1
for any Losses sustained by the indemnified party unless and until the
aggregate amount of all indemnifiable Losses sustained by the indemnified party
shall exceed Twenty-Five Thousand Dollars ($25,000) times the number of
Branches being purchased hereunder, in which event the indemnifying party shall
provide indemnification hereunder in respect of all such indemnifiable Losses
in excess of Twenty-Five Thousand Dollars ($25,000) times the number of
Branches being purchased hereunder, provided, however, that the aggregate
amount of indemnification payments payable pursuant to this Section 12.1, shall
in no event exceed the amount of the Purchase Price. An indemnifying party
shall not be liable under this Section 12.1 for any settlement effected,
without its consent, of any claim or liability or proceeding for which
indemnity may be sought hereunder except in the case of a settlement in an
amount which does not exceed Twenty-Five Thousand Dollars ($25,000) times the
number of Branches being purchased hereunder; provided, however, the provisions
of this Section 12.1(e) shall not apply to Purchaser's obligation to indemnify
Seller for a breach of Purchaser's covenants contained in Section 10.2 above.
In no event shall either party hereto be entitled to consequential or punitive
damages or damages for lost profits in any action relating to the subject
matter of this Agreement.
12.2 Purchase Price Adjustment. Any amount paid by Seller or
Purchaser under this Article 12 will be treated as an adjustment to the
Purchase Price unless and to the extent that a "determination" (as defined in
Section 1313(a) of the Code) causes any such amount not to constitute an
adjustment to the Purchase Price for federal Tax purposes.
12.3 Exclusivity. After the Closing, Article 12 will provide the
exclusive remedy for any misrepresentation, breach of warranty, covenant or
other agreement or other claim arising out of this Agreement or the
transactions contemplated hereby.
12.4 AS-IS Sale; Waiver of Warranties. Except as otherwise
expressly set forth in this Agreement, Purchaser acknowledges that the Assets
and Liabilities are being sold and accepted on an "AS-IS-WHERE-IS" basis, and
are being accepted without any representation or warranty. As part of
Purchaser's agreement to purchase and accept the Assets and Liabilities
AS-IS-WHERE-IS, and not as a limitation on such agreement, TO THE FULLEST
EXTENT PERMITTED BY LAW, SELLER HEREBY DISCLAIMS AND PURCHASER HEREBY
UNCONDITIONALLY AND IRREVOCABLY WAIVES AND RELEASES ANY AND ALL ACTUAL OR
POTENTIAL RIGHTS PURCHASER MIGHT HAVE AGAINST SELLER OR ANY PERSON DIRECTLY OR
INDIRECTLY CONTROLLING SELLER REGARDING ANY FORM OF WARRANTY, EXPRESS OR
IMPLIED, OF ANY KIND OR TYPE, RELATING TO THE ASSETS AND LIABILITIES INCLUDING,
BUT NOT LIMITED TO, THE LOANS AND/OR THE COLLATERAL THEREFOR EXCEPT THOSE SET
FORTH IN ARTICLE 5 AND SECTIONS 8.1 AND 8.8. SUCH WAIVER AND RELEASE IS, TO
XXX
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XXXXXXX XXXXXX PERMITTED BY LAW, ABSOLUTE, COMPLETE, TOTAL AND UNLIMITED IN
EVERY WAY. SUCH WAIVER AND RELEASE INCLUDES TO THE FULLEST EXTENT PERMITTED BY
LAW, BUT IS NOT LIMITED TO, A WAIVER AND RELEASE OF EXPRESS WARRANTIES (EXCEPT
THOSE SET FORTH IN ARTICLE 5 AND SECTIONS 8.1 AND 8.8), IMPLIED WARRANTIES,
WARRANTIES OF FITNESS FOR A PARTICULAR USE, WARRANTIES OF MERCHANTABILITY,
WARRANTIES OF HABITABILITY, STRICT LIABILITY RIGHTS AND CLAIMS OF EVERY KIND
AND TYPE, INCLUDING BUT NOT LIMITED TO CLAIMS REGARDING DEFECTS WHICH WERE NOT
OR ARE NOT DISCOVERABLE, ALL OTHER EXTANT OR LATER CREATED OR CONCEIVED OF
STRICT LIABILITY OR STRICT LIABILITY TYPE CLAIMS AND RIGHTS.
ARTICLE 13
MISCELLANEOUS
13.1 Survival. (a) The parties' respective representations and
warranties contained in this Agreement shall survive until the first
anniversary of the Closing Date, and thereafter neither party may claim any
Loss in relation to a breach thereof. The agreements and covenants contained
in this Agreement shall not survive the Closing except to the extent expressly
set forth herein.
(b) No claim based on any breach of any representation or warranty
shall be valid or made unless written notice with respect thereto is given to
Seller in accordance with this Agreement on or before the date specified in
Section 12.1(c); provided, however, that the provisions of this Section shall
not apply to claims based on Purchaser's breach of Section 10.2 above.
13.2 Assignment. Neither this Agreement nor any of the rights,
interests or obligations of either party may be assigned by either of the
parties hereto without the prior written consent of the other party, and any
purported assignment in contravention of this Section 13.2 shall be void.
13.3 Binding Effect. This Agreement and all of the provisions
hereof shall be binding upon and inure to the benefit of the parties hereto and
their respective successors and permitted assigns.
13.4 Public Notice. Prior to the Closing Date, neither Purchaser
nor Seller shall directly or indirectly make or cause to be made any press
release for general circulation, public announcement or disclosure or issue any
notice or general communication to employees with respect to any of the
transactions contemplated hereby without the prior written consent of the other
party (which consent shall not be unreasonably withheld or delayed). Purchaser
agrees that, without Seller's prior written consent, it shall not release or
disclose any of the terms or conditions of the transactions contemplated herein
to any other person. Notwithstanding the foregoing, each party may make such
public disclosure as, in the opinion of its counsel, may be required by law or
as necessary to obtain the Regulatory Approvals.
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13.5 Notices. All notices, requests, demands, consents and other
communications given or required to be given under this Agreement and under the
related documents shall be in writing and delivered to the applicable party at
the address indicated below:
If to Seller, to: Xxxxx Fargo Bank, National Association
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Attention: Xxx Xxxxxxxxxxx, Xx., Esq.
Executive Vice President,
Chief Counsel & Secretary
Fax: (000) 000-0000
If to Purchaser, to: Heritage Oaks Bank
000 00xx Xxxxxx
Xxxx Xxxxxx, XX 00000
Attention: Xxxxx Xxxx, President
Fax: (000) 000-0000
or, as to each party at such other address as shall be designated by such party
in a written notice to the other party complying as to delivery with the terms
of this Section. Any notices shall be in writing, including telegraphic or
facsimile communication, and may be sent by registered or certified mail,
return receipt requested, postage prepaid, or by fax, or by overnight delivery
service. Notice shall be effective upon actual receipt thereof.
13.6 Expenses. Except as expressly provided otherwise in this
Agreement, each party shall bear any and all costs and expenses which it
incurs, or which may be incurred on its behalf, in connection with the
preparation of this Agreement and consummation of the transactions described
herein, and the expenses, fees, and costs necessary for any approvals of the
appropriate regulatory authorities.
13.7 Governing Law. This Agreement shall be governed by and
interpreted in accordance with the laws of the State of California applicable
to contracts made and to be performed entirely within such State.
13.8 Entire Agreement; Amendments. (a) This Agreement contains
the entire understanding of and all agreements between the parties hereto with
respect to the subject matter hereof and supersedes any prior or
contemporaneous agreement or understanding, oral or written, pertaining to any
such matters which agreements or understandings shall be of no force or effect
for any purpose; provided, however, that the terms of any confidentiality
agreement between the parties hereto previously entered into, to the extent not
inconsistent with any provisions of this Agreement, shall continue to apply.
(b) This Agreement may not be amended or supplemented in any
manner except by mutual agreement of the parties and as set forth in a writing
signed by the parties hereto or their respective successors in interest. The
waiver of any breach of any provision under this
-45-
48
Agreement by any party shall not be deemed to be a waiver of any preceding or
subsequent breach under this Agreement. No such waiver shall be effective
unless in writing.
13.9 Third Party Beneficiaries. This Agreement shall not benefit
or create any right or cause of action in or on behalf of any person other than
Seller and Purchaser.
13.10 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
13.11 Headings. The headings used in this Agreement are inserted
for purposes of convenience of reference only and shall not limit or define the
meaning of any provisions of this Agreement.
13.12 Consent to Jurisdiction; Waiver of Jury Trial. (a) EACH
PARTY HERETO HEREBY SUBMITS TO THE JURISDICTION OF THE COURTS OF THE STATE OF
CALIFORNIA AND THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF
CALIFORNIA, AS WELL AS TO THE JURISDICTION OF ALL COURTS FROM WHICH AN APPEAL
MAY BE TAKEN OR OTHER REVIEW SOUGHT FROM THE AFORESAID COURTS, FOR THE PURPOSE
OF ANY SUIT, ACTION OR OTHER PROCEEDING ARISING OUT OF SUCH PARTY'S OBLIGATIONS
UNDER OR WITH RESPECT TO THIS AGREEMENT OR ANY OF THE AGREEMENTS, INSTRUMENTS
OR DOCUMENTS CONTEMPLATED HEREBY, AND, TO THE EXTENT IT LAWFULLY MAY DO SO,
EXPRESSLY WAIVES ANY AND ALL OBJECTIONS IT MAY HAVE AS TO VENUE IN ANY OF SUCH
COURTS.
(b) EACH PARTY HERETO HEREBY WAIVES ALL RIGHT TO TRIAL BY JURY IN
ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR IN ANY WAY CONCERNED
WITH THIS AGREEMENT OR ANY OF THE AGREEMENTS, INSTRUMENTS OR DOCUMENTS
CONTEMPLATED HEREBY. NO PARTY HERETO, NOR ANY ASSIGNEE OR SUCCESSOR OF A PARTY
HERETO, SHALL SEEK A JURY TRIAL IN ANY LAWSUIT, PROCEEDING, COUNTERCLAIM OR ANY
OTHER LITIGATION PROCEDURE BASED UPON, OR ARISING OUT OF, THIS AGREEMENT OR ANY
OF THE AGREEMENTS, INSTRUMENTS OR DOCUMENTS CONTEMPLATED HEREBY. NO PARTY WILL
SEEK TO CONSOLIDATE ANY SUCH ACTION IN WHICH A JURY TRIAL HAS BEEN WAIVED WITH
ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED. THE
PROVISIONS OR THIS SECTION HAVE BEEN FULLY CONSIDERED BY THE PARTIES HERETO,
AND THE PROVISIONS SHALL BE SUBJECT TO NO EXCEPTIONS. NO PARTY HAS IN ANY WAY
AGREED WITH OR REPRESENTED TO ANY OTHER PARTY THAT THE PROVISIONS OF THIS
SECTION WILL NOT BE FULLY ENFORCED IN ALL INSTANCES.
13.13 Severability. If any provision of this Agreement, as applied
to any party or circumstance, shall be judged by a court of competent
jurisdiction to be void, invalid or
-46-
49
unenforceable, the same shall in no way effect any other provision of this
Agreement, the application of any such provision and any other circumstances or
the validity or enforceability of the other provisions of this Agreement.
13.14 Legal Action. If either Seller or Purchaser shall institute
any legal action to enforce this Agreement or any provision hereof, it is
agreed that the prevailing party shall be entitled to collect reasonable
attorneys fees and costs incurred in connection therewith.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers as of the date and year first above
written.
XXXXX FARGO BANK,
NATIONAL ASSOCIATION
By: /s/ XXXXXX X. XXXXXX
---------------------------------
Name: Xxxxxx X. Xxxxxx
-------------------------
Title: Vice Chairman & CFO
-------------------------
By: /s/ XXXXX X. XXXXXXX
---------------------------------
Name: Xxxxx X. Xxxxxxx
-------------------------
Title: Executive Vice President
-------------------------
PURCHASER
By: /s/ XXXXXXXX X. XXXX
---------------------------------
Name: Xxxxxxxx X. Xxxx
-------------------------
Title: President/Chief
Executive Officer
-------------------------
By: /s/ XXXXXX X. XXXXX
---------------------------------
Name: Xxxxxx X. Xxxxx
-------------------------
Title: Executive Vice-President/
Chief Financial Officer
-------------------------
-47-
50
SCHEDULE 1.1(a)
Assumed Severance Obligations
1. First Interstate Bancorp Broad-Based Change in Control
Severance Pay Plan.
2. First Interstate Bancorp Middle Management Change in Control
Severance Pay Plan.
3. Xxxxx Fargo & Company Separation Pay Plan.
51
SCHEDULE 1.1(b)
Branches/Real Properties
BRANCH NAME BRANCH ADDRESS CITY LEASE/OWN
Cambria 0000 Xxxxxx Xx. Xxxxxxx Leased
52
SCHEDULE 3.6(a)
FORM OF CALIFORNIA GRANT DEED
Recording Requested by:
When Recorded Mail to:
DOCUMENTARY TRANSFER TAX $ ________________
( ) COMPUTED ON FULL VALUE OF PROPERTY CONVEYED, OR ( ) COMPUTED ON FULL VALUE
LESS LIENS AND ENCUMBRANCES REMAINING THEREON AT TIME OF SALE.
Signature of declarant or agent determining tax - Firm Name
( ) Unincorporated Area ( ) City of ________________
Assessor's parcel No. ________________
XXXXX FARGO BANK, NATIONAL ASSOCIATION with its principal
office located in San Francisco, California, the undersigned grantor, for a
valuable consideration, receipt of which is hereby acknowledged, does hereby
remise, release and forever grant to [NAME OF GRANTEE(S)] a _________________,
with its principal office located in __________________, all of the real
property in the City of ____________________, County of ____________________,
State of California, described in Attachment A hereto.
Date: ___________________ XXXXX FARGO BANK,
NATIONAL ASSOCIATION
By: _______________________________
Name:
Title:
MAIL TAX STATEMENTS TO GRANTEE
AT ADDRESS ABOVE
53
SCHEDULE 3.6(b)
FORM OF XXXX OF SALE
XXXX OF SALE, dated as of _________________, 1996 by XXXXX FARGO BANK,
NATIONAL ASSOCIATION, with its principal office located in San Francisco,
California ("Seller"), to _______________________________________________, with
its principal office located in ___________________________________________,
California ("Purchaser"). Capitalized terms not otherwise defined herein shall
have the same meanings as set forth in the Purchase and Assumption Agreement,
dated as of __________________, 1996 (the "P&A Agreement"), between Seller and
Purchaser, unless the context herein otherwise requires.
W I T N E S S E T H:
WHEREAS, subject to the terms and conditions set forth in the P&A
Agreement, Seller has agreed to transfer to Purchaser the Assets;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Seller does hereby convey, grant,
bargain, sell, transfer, set over, assign, alienate, remise, release, deliver
and confirm unto Purchaser, its successors and assigns, forever, all of
Seller's right, title, interest and claim in and to the Personal Property
(including without limitation, the items described in Attachment A hereto), as
of 11:59 P.M., California time, the day prior to the date hereof.
TO HAVE AND TO HOLD all and singular of the foregoing (the "Transferred
Properties") unto Purchaser, its successors and assigns, to its and their own
use and enjoyment forever.
SELLER FURTHER COVENANTS AND AGREES AS FOLLOWS:
1. This instrument shall not constitute an assignment of any
covenant, obligation, liability, contract, agreement, license, lease or
commitment pertaining to the Transferred Properties if an attempted assignment
thereof without the consent of any other party thereto or with an interest
therein would constitute a breach thereof or would materially and adversely
affect the rights of Seller thereunder. If any such consent is not obtained
with respect to any such covenant, obligation, liability, contract, agreement,
license, lease or commitment, or if an attempted assignment with respect
thereto would be ineffective or would impair the rights of Seller thereunder so
that Purchaser would not in fact receive the benefit of all such rights, then
Seller, its successors and assigns, shall act as Purchaser's agent in order to
obtain for Purchaser, its successors and assigns, the benefits thereunder, and
Seller will cooperate with Purchaser in any other reasonable arrangement
designed to provide such benefits for Purchaser.
2. The Transferred Properties are being delivered "AS IS", "WHERE IS" and
with all faults.
54
3. From time to time, Seller, its successor and assigns, shall
execute and deliver all such further bills of sale, assignments or other
instruments of conveyance and transfer as Purchaser, its successors or assigns,
may reasonably request more effectively to transfer to and vest in Purchaser
all of Seller's interest in the Transferred Properties.
4. This Xxxx of Sale is made pursuant to the provisions of the
P&A Agreement, and, except as herein otherwise provided, the transfer of
property hereunder is made subject to the terms and provisions of the P&A
Agreement.
5. This Agreement shall be governed by and interpreted in
accordance with the laws of the State of California applicable to contracts
made and to be performed entirely within such State.
IN WITNESS WHEREOF, Seller has duly executed and delivered this Xxxx of
Sale as of the day and year first above written.
XXXXX FARGO BANK, NATIONAL ASSOCIATION
By:_______________________________________
Name:
Title:
PURCHASER:
By:_______________________________________
Name:
Title:
2
55
Attachment A
Personal Property
[To be provided]
56
SCHEDULE 3.6(c)
FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT
ASSIGNMENT AND ASSUMPTION AGREEMENT, dated as of __________, 1996 (this
"Agreement"), between XXXXX FARGO BANK, NATIONAL ASSOCIATION, organized under
the laws of the United States, with its principal office located in San
Francisco, California ("Seller"), and _____________________________, with its
principal office located in ________________________________ ("Purchaser").
Capitalized terms not otherwise defined herein shall have the meanings set
forth in the Purchase and Assumption Agreement, dated as of
_____________________, (the "P&A Agreement"), between Seller and Purchaser,
unless the context herein otherwise requires.
W I T N E S S E T H:
WHEREAS, subject to the terms and conditions set forth in the P&A
Agreement, Seller has agreed to assign, and Purchaser has agreed to assume, the
Liabilities;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. Seller hereby sells, assigns, conveys, transfers and delivers,
and Purchaser assumes, without warranty or representation, express or implied,
or recourse to, Seller, except as expressly provided in the P&A Agreement, the
Liabilities, other than the Branch Leases, as set forth in the P&A Agreement.
2. Seller hereby (a) resigns as the trustee or custodian of each
Deposit in an XXX or Xxxxx Account of which it is the trustee or custodian, and
(b) the extent permitted by the documentation governing such XXX or Xxxxx
Account, appoints Purchaser as successor trustee or custodian of each such XXX
or Xxxxx Account, and Purchaser hereby accepts each such trusteeship or
custodianship and assumes all fiduciary obligations with respect thereto.
3. This Agreement shall not constitute an assignment or
assumption of any covenant, fiduciary or other obligation, liability, contract,
agreement, license, lease or commitment pertaining to any Liability if an
attempted assignment or assumption thereof without the consent of any other
party thereto or with an interest therein would constitute a breach thereof or
would materially and adversely affect the rights of Seller thereunder. If any
such consent is not obtained with respect to any such covenant, fiduciary or
other obligation, liability, contract, agreement, license, lease or commitment,
or if an attempted assignment or assumption of any covenant, fiduciary or other
obligation, liability, contract, agreement, license, lease or commitment
pertaining to any Liability would be ineffective or would impair the rights of
Seller thereunder so that Purchaser would not in fact receive the benefit of
all such rights, then Seller, its successors and assigns shall act as
Purchaser's agent in order to obtain for Purchaser, its
57
successors and assigns, the benefits thereunder, and Seller will cooperate with
Purchaser in any other reasonable arrangement designed to provide such benefits
for Purchaser.
4. This Agreement and all of the provisions hereof shall be
binding upon and inure to the benefit of the parties hereto and their
respective permitted successors and permitted assigns; provided, that neither
this Agreement nor any of the rights, interests or obligations of either party
may be assigned by either party hereto without the prior written consent of the
other party, and any purported assignment in contradiction of this Section 4
shall be void.
5. This Agreement is made pursuant to the provisions of the P&A
Agreement and, except as herein otherwise provided, the assignment and
assumption of any other Liabilities hereunder are made subject to the terms and
provisions of the P&A Agreement.
6. Except as otherwise provided herein, all of the transactions
provided for herein shall be effective as of 11:59 p.m., California time, the
day prior to the date hereof.
7. This Agreement shall be governed by and interpreted in
accordance with the laws of the State of California applicable to contracts
made and to be performed entirely within such State.
IN WITNESS WHEREOF, the parties hereto have duly executed and delivered
this Agreement as of the day and year first above written.
XXXXX FARGO BANK, NATIONAL ASSOCIATION
By:_______________________________________
Name:
Title:
[PURCHASER]:
By:_______________________________________
Name:
Title:
2
58
SCHEDULE 3.6(d)
FORM OF ASSIGNMENT OF LEASE AND ASSUMPTION
KNOW THAT XXXXX FARGO BANK, NATIONAL ASSOCIATION, a national bank,
organized under the laws of the United States, having its principal office in
San Francisco, California ("Assignor"), in consideration of One Dollar ($1.00)
and other good and valuable consideration paid by ___________________________
_________, with its principal office located in _________________, California
("Assignee"), hereby assigns unto the Assignee all of Assignor's right, title
and interest as tenant under a certain lease more particularly described on
Attachment A hereto, covering premises described on such attachment and in
such Lease (the "Lease").
TO HAVE AND TO HOLD the same unto Assignee, its successors and assigns
from and after 11:59 P.M., California time, the day prior to the date hereof
(the "Effective Time"), subject to the terms, covenants, conditions and
provisions set forth in the Lease.
ASSIGNEE hereby assumes, effective as of the Effective Time, the
performance of all terms, covenants and obligations of the Lease on the part of
Assignor to be performed under the Lease.
IN WITNESS WHEREOF, Assignor and Assignee have executed this Agreement
as of the ____ day of ______________, 1996.
XXXXX FARGO BANK, NATIONAL ASSOCIATION
By:_______________________________________
Name:
Title:
[ASSIGNEE]:
By:_______________________________________
Name:
Title:
59
Attachment A
Lease
2
60
SCHEDULE 3.6(e)
FORM OF LANDLORD CONSENT
CONSENT, dated as of ________________, 1996, of __________________,
with its principal office located in _______________________ ("Landlord"), in
favor of XXXXX FARGO BANK, NATIONAL ASSOCIATION organized under the laws of the
United States, with its principal office located in San Francisco, California
("Seller").
W I T N E S S E T H:
WHEREAS, Landlord is the owner of certain premises and a party to a
certain lease, each described on Attachment A hereto (the "Lease"); and
WHEREAS, Seller desires to assign its entire interest (including,
without limitation, renewal rights, if any) in the Lease to
_____________________________, with its principal office located in
__________________, California ("Purchaser"); and
WHEREAS, Seller has requested Landlord's consent to said assignment and
to Purchaser's use of said premises as a banking office and for all other
purposes authorized under the Lease for the balance of the term of the Lease
and Landlord desires to consent to the same for all purposes required under the
Lease.
NOW, THEREFORE,
1. Subject to the limitations set forth below, Landlord hereby
consents to the assignment of the Lease by Seller to Purchaser and to
Purchaser's use of said premises as a banking office and for all other purposes
authorized under the Lease for the balance of the term of the Lease; provided
that Purchaser shall agree to assume all of the obligations of Seller arising
under the Lease from and after the effective date of the assignment.
2. Except for the aforementioned assignment by Seller to
Purchaser, nothing contained herein shall constitute a waiver of the
obligation, if any, of the holder of the leasehold interest created under the
Lease to obtain Landlord's consent to future assignments of the Lease or a
sublease of the premises demised thereunder.
3. Nothing contained herein shall be construed to obligate Seller
to assign the Lease to Purchaser, it being understood and acknowledged by
Landlord that the execution and delivery of this Consent is in anticipation of
said assignment, which may or may not be effected. If said assignment shall be
effected, Seller or Purchaser shall promptly provide to Landlord a fully
executed counterpart of said assignment and notify Landlord of the effective
date thereof.
4. Landlord acknowledges and certifies that, except for the
conditions contained herein, all conditions set forth in the Lease, if any, to
the effectiveness of the aforementioned
1
61
assignment or to the consent of Landlord contained herein have been either
waived by Landlord or satisfied.
IN WITNESS WHEREOF, the undersigned has duly executed and delivered
this instrument as of the day and year first above written.
[LANDLORD]
By:____________________________________
Name:
Title:
2
62
Attachment A
Lease
3
63
SCHEDULE 3.6(g)
FORM OF CERTIFICATE OF OFFICER
XXXXX FARGO BANK, NATIONAL ASSOCIATION
The undersigned, the [title of officer] of XXXXX FARGO BANK, NATIONAL
ASSOCIATION, a bank, organized under the laws of the United States of America,
with its principal office located in San Francisco, California ("Seller"),
hereby certifies, to the best of [his] [her] knowledge after reasonable inquiry,
as follows:
1. Each of the representations and warranties made by Seller in
the Purchase and Assumption Agreement, dated as of _____________, 1996, (the
"P&A Agreement"), between Seller and _________________________________, with its
principal office located in __________________, California, are true in all
material respects, as of the date hereof.
2. Each of the covenants and agreements of Seller to be performed
on or prior to the date hereof have been duly performed in all material
respects.
3. Attached hereto are true and correct copies of the resolutions
of the Seller's Board of Directors, dated as of _____________, 1996, authorizing
the execution, delivery and performance of the transactions contemplated by the
P&A Agreement, which resolutions were duly adopted and, as of the date hereof,
remain in full force and effect without amendment or modification.
IN WITNESS WHEREOF, I have hereunto subscribed my name this ____ day of
________________, 1996.
XXXXX FARGO BANK, NATIONAL ASSOCIATION
By:
----------------------------------
Name:
Title:
64
SCHEDULE 3.7(d)
FORM OF CERTIFICATE OF OFFICER
The undersigned, the [title of officer] of ____________________________
_________________________________, with its principal office located in
____________________, California ("Purchaser"), hereby certifies, to the best of
[his] [her] knowledge after reasonable inquiry, as follows:
1. Each of the representations and warranties made by Purchaser in
the Purchase and Assumption Agreement, dated as of ____________, 1996 (the "P&A
Agreement"), between Purchaser and Xxxxx Fargo Bank, National Association,
organized under the laws of the United States, with its principal office located
in Los Angeles, California, are true in all material respects, as of the date
hereof (except for representations and warranties that are made as of a specific
date).
2. Each of the covenants and agreements of Purchaser to be
performed on or prior to the date hereof have been duly performed in all
material respects.
3. Attached hereto are true and correct copies of the resolutions
of the Purchaser's Board of Directors, dated as of _________________, 1996,
authorizing the execution, delivery and performance of the transactions
contemplated by the P&A Agreement, which resolutions were duly adopted and, as
of the date hereof, remain in full force and effect without amendment or
modification.
IN WITNESS WHEREOF, I have hereunto subscribed my name this ____ day of
________________, 1996.
[PURCHASER]:
By:
----------------------------------------
Name:
Title:
65
SCHEDULE 5.4
Tenant Leases
PROP. # PROPERTY NAME SUB-TENANT NAME SQ. FT. LEASE EXPIRES
------- ------------- --------------- ------- -------------
None.
66
SCHEDULE 5.6
Litigation and Undisclosed Liabilities
None.
67
SCHEDULE 5.16
Environmental Matters
See asbestos reports and Phase I Reports (as updated) previously provided to
Purchaser.
68
SCHEDULE 8.1
Outstanding Tax Liabilities
None.
69
[XXXXX FARGO BANK LETTERHEAD]
November 13, 1996
VIA FACSIMILE AND FEDERAL EXPRESS
Xx. Xxxxxxxx X. Xxxx
President and Chief Executive Officer
Heritage Oaks Bank
000 00xx Xxxxxx
Xxxx Xxxxxx, XX 00000
Branch Purchase Agreement
Dear Xxxxx:
This will confirm our agreement to amend that certain Purchase and
Assumption Agreement (the "Agreement"), dated as of October 15, 1996, by and
between ourselves and Heritage Oaks Bank, for the purpose of correcting the
mistake in the percentage amount, under Section 2.3(a) of the Agreement, which
is used in determining the Purchase Price. This amount should read "an amount
equal to 3.00% of the average daily balance...," not "an amount equal to 4.940%
of the average daily balance..." The Agreement is hereby so amended.
All other terms and conditions of the Purchase and Assumption
Agreement (including without limitation the October 15th effective date) shall
remain the same.
Please indicate your agreement with the foregoing by executing the
enclosed copy of this letter and returning it to the undersigned.
Very truly yours,
/s/ XXXXXX X. XXXXXX
---------------------------------
Xxxxxx X. Xxxxxx
Vice Chairman and CFO
70
Xx. Xxxxxxxx X. Xxxx
November 13, 1996
Page 2
/s/ XXXXX X. XXXXXXX
----------------------------------
Xxxxx X. Xxxxxxx
Executive Vice President
AGREED
Heritage Oaks Bank
hereby agrees to the foregoing.
By: /s/ XXXXXXXX X. XXXX
-----------------------------
Its: President and CEO
By: /s/ XXXXXX X. XXXXX
-----------------------------
Its: EVP & CFO
71
PLEASE NOTE:
The attached release announcing the acquisition of the Cambria branch of Xxxxx
Fargo Bank by Heritage Oaks Bank has been approved as written by both
entities. Please do not alter the content.
If you require additional information or want to clarify a point, feel free to
contact Mr. Xxxxx Xxxx, President of Heritage Oaks Bank. He may be reached at
239-5200.
Thank you
FOR IMMEDIATE RELEASE
OCTOBER 17, 1996
For more information, contact
Xxxxx Xxxx, President
(000) 000-0000
HERITAGE OAKS BANK
PURCHASES A XXXXX FARGO BRANCH
Xxxxx Xxxx, President of Heritage Oaks Bank, with offices in Paso Xxxxxx
and San Xxxx Obispo, announced today that it has reached a definitive agreement
with Xxxxx Fargo Bank to purchase the Xxxxx Fargo Branch in Cambria. The sale
includes the deposit accounts and facilities of the branch.
The purchase of the Xxxxx Fargo Branch in Cambria will be a very
exciting move for Heritage Oaks Bank. As a Paso Xxxxxx based bank, Heritage
Oaks will be able to provide products and services not otherwise available to
the community. "We are a service oriented organization," stated Xxxx. "We
pride ourselves in getting to know our clients, servicing their financial needs
and getting involved in each community we have an office."
"The decision to sell was difficult," said Xxx Xxxxxxxx, Executive Vice
President of Xxxxx Fargo Bank, "however, this branch is located in a rural
community without easy access to our network of Xxxxx Fargo retail outlets.
Rather than offer limited services, we believe this community will be better
served by a locally owned bank such as Heritage Oaks Bank, where banking can
continue to be delivered as it is today."
It will be business as usual for all employees and customers of the
Cambria branch of Xxxxx Fargo until the sale is completed some time during the
first quarter of 1997. Customers of the Cambria office will be notified well
in advance as to what actions, if any, they will need to take.
# # #
