EXHIBIT 10.1
THIS PURCHASE AND ASSUMPTION AGREEMENT CONTAINS REPRESENTATIONS AND WARRANTIES
THAT UNION BANK OF CALIFORNIA, N.A. AND WACHOVIA BANK, N.A. MADE TO EACH OTHER.
THESE REPRESENTATIONS AND WARRANTIES WERE MADE AS OF SPECIFIC DATES, MAY BE
SUBJECT TO IMPORTANT QUALIFICATIONS AND LIMITATIONS AGREED TO BY UNION BANK OF
CALIFORNIA, N.A. AND WACHOVIA BANK, N.A. IN CONNECTION WITH NEGOTIATING THE
TERMS OF THE PURCHASE AND ASSUMPTION AGREEMENT, AND MAY HAVE BEEN INCLUDED IN
THE PURCHASE AND ASSUMPTION AGREEMENT FOR THE PURPOSE OF ALLOCATING RISK BETWEEN
UNION BANK OF CALIFORNIA, N.A. AND WACHOVIA BANK, N.A. RATHER THAN ESTABLISHING
MATTERS AS FACTS. ACCORDINGLY, THE PURCHASE AND ASSUMPTION AGREEMENT IS INCLUDED
WITH THIS FILING ONLY TO PROVIDE INVESTORS WITH INFORMATION REGARDING THE TERMS
OF THE PURCHASE AND ASSUMPTION AGREEMENT, AND NOT TO PROVIDE INVESTORS WITH ANY
OTHER FACTUAL INFORMATION REGARDING THE PARTIES OR THEIR RESPECTIVE BUSINESSES.
THE PURCHASE AND ASSUMPTION AGREEMENT SHOULD NOT BE READ ALONE, BUT SHOULD
INSTEAD BE READ IN CONJUNCTION WITH THE OTHER INFORMATION REGARDING THE PARTIES
AND THE TRANSACTION THAT WILL BE OR HAS BEEN CONTAINED IN, OR INCORPORATED BY
REFERENCE INTO, THE FORMS 10-K, FORMS 10-Q, FORMS 8-K AND OTHER FILINGS THAT
EACH OF UNION BANK OF CALIFORNIA, N.A. AND WACHOVIA BANK, N.A. OR THEIR
AFFILIATES MAY MAKE WITH THE SECURITIES AND EXCHANGE COMMISSION.
PURCHASE AND ASSUMPTION AGREEMENT
BY AND AMONG
UNION BANK OF CALIFORNIA, N. A.,
UNION BANK OF CALIFORNIA INTERNATIONAL,
AND
UNION BANK OF CALIFORNIA SERVICOS LTDA.
AS SELLERS, ON THE ONE HAND,
AND
WACHOVIA BANK, N.A.,
AS PURCHASER, ON THE OTHER HAND
DATED SEPTEMBER 21, 2005
EXECUTION COPY
PURCHASE AND ASSUMPTION AGREEMENT
BY AND AMONG
UNION BANK OF CALIFORNIA, N. A.,
UNION BANK OF CALIFORNIA INTERNATIONAL,
AND
UNION BANK OF CALIFORNIA SERVICOS LTDA.
AS SELLERS, ON THE ONE HAND,
AND
WACHOVIA BANK, N.A.,
AS PURCHASER, ON THE OTHER HAND
DATED SEPTEMBER 21, 2005
TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS.............................................1
ARTICLE II TRANSFER AND ACQUISITION OF PURCHASED ASSETS...........14
2.1 Purchased Assets...........................................14
2.1.1 Purchased Assets..................................14
2.1.2 Consents to Assignment............................14
2.2 Excluded Assets............................................15
2.3 Assumed Obligations........................................17
2.4 Excluded Obligations.......................................18
2.5 Closing Balance Sheet......................................18
2.6 Consideration for Purchase of the Purchased Assets.........18
2.6.1 Consideration Amount at Principal Closing.........18
2.6.2 Consideration Amount at Subsequent Closings.......18
2.6.3 Closing Cash Consideration Amount.................18
2.7 The Closing................................................19
2.7.1 Closing Procedures................................19
2.7.2 References to Closing and Effective Time..........19
2.7.3 Outside Principal Closing Date....................19
2.7.4 Outside Business Unit Closing Date................19
2.7.5 Deliverables at Each Closing......................20
2.7.6 Deliverables at the Principal Closing.............21
2.8 True-Up....................................................21
2.8.1 Final Balance Sheet...............................21
2.8.2 Mutual Right of Review............................22
2.8.3 Dispute Resolution................................22
2.8.4 Payment of True-Up................................22
2.8.5 Interest..........................................23
2.9 Contingent Payment.........................................23
2.9.1 Calculation of Conversion Percentage..............23
2.9.2 Payment of Contingent Payment.....................23
2.10 Downward Adjustment........................................23
2.11 Allocation of Consideration................................23
2.12 Set-Off....................................................24
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2.13 Tax Treatment of Contingent Payments and Downward
Adjustments ..............................................24
ARTICLE III REPRESENTATIONS AND WARRANTIES OF SELLERS..............24
3.1 Organization of UBOC.......................................24
3.2 Organization of UBOCI......................................24
3.3 Organization of Limitada...................................25
3.4 Enforceability.............................................25
3.5 Financial Statements.......................................25
3.5.1 Delivery of Financial Statements..................25
3.5.2 Sellers' Financial Statements.....................25
3.5.3 Baseline Sellers ADCR.............................26
3.6 Assets.....................................................26
3.6.1 Customers.........................................26
3.6.2 Risk Assets.......................................26
3.6.3 Contingent Risk Assets and Contingent Risk
Liabilities.......................................26
3.6.4 Owned Real Property...............................26
3.6.5 Leased Real Property..............................26
3.6.6 Personal Tangible Property........................27
3.6.7 Business and Purchased Assets.....................27
3.7 Litigation.................................................27
3.8 Contracts..................................................27
3.9 Intellectual Property and IT Assets........................28
3.10 Licenses...................................................30
3.11 Books and Records..........................................30
3.12 Taxes and Tax Returns......................................30
3.13 Employees and Employee Plans and Contracts.................30
3.13.1 Identification of Employee Plans and Contracts....30
3.13.2 Identification of Employees.......................30
3.13.3 ERISA Plans.......................................31
3.13.4 Non-U.S. Pension Plans............................31
3.14 Labor Relations............................................31
3.15 Insurance..................................................31
3.16 Brokers or Finders.........................................31
3.17 Absence of Certain Changes and Events......................31
3.18 Compliance with Legal Requirements.........................32
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TABLE OF CONTENTS
(continued)
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3.19 Sellers' Approvals.........................................33
3.20 Xxxx-Xxxxx Xxxxxx..........................................33
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PURCHASER............33
4.1 Status of Purchaser........................................33
4.2 Enforceability.............................................33
4.3 Certain Proceedings........................................34
4.4 Brokers or Finders.........................................34
4.5 Purchaser's Approvals......................................34
4.6 Investment Company.........................................34
4.7 Bank Regulatory Matters....................................34
4.8 Financing Available........................................34
4.9 Baseline Purchaser ADCR....................................34
4.10 Xxxx-Xxxxx Xxxxxx..........................................34
ARTICLE V ADDITIONAL AGREEMENTS OF SELLERS AND PURCHASER.........35
5.1 Conduct of the Business....................................35
5.2 Purchaser's Access to the Business Prior to Closing........37
5.3 Performance of this Agreement; Notification of Certain
Matters....................................................38
5.4 Conversion.................................................38
5.4.1 General Procedures................................38
5.4.2 Costs/Revenues of Sellers' Post-Closing Operations39
5.5 Employee Matters...........................................39
5.6 [RESERVED].................................................40
5.7 Communications.............................................40
5.8 Execution and Delivery of Documents........................41
5.9 Cooperation after the Closing..............................41
5.9.1 Further Assurances................................41
5.9.2 Sellers' Access to Records........................41
5.9.3 Purchaser's Access to Records.....................41
5.10 Regulatory Approvals; Third Party Consents.................42
5.10.1 Regulatory Approvals..............................42
5.10.2 Third Party Consents..............................42
5.10.3 Agreements Affecting the Other Party..............43
5.11 Regulatory Compliance......................................43
5.12 No Solicitations...........................................43
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(continued)
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5.13 Trademarks.................................................43
5.14 Non-Competition; Non-Solicitation; Confidentiality.........43
5.14.1 Sellers...........................................43
5.14.2 Restricted Area...................................43
5.14.3 Exceptions........................................44
5.14.4 Disposition of Business Activities................44
5.14.5 Enforcement.......................................45
5.14.6 Employee Non-Solicitation; No Hire................45
5.14.7 Rights Retained by Sellers........................46
5.14.8 Non-Disclosure Agreement..........................46
5.14.9 Confidentiality of Information of Purchaser.......46
5.14.10 Confidentiality of Information of Sellers.........47
5.14.11 Degree of Care for Confidential Information.......47
5.14.12 Exceptions to Confidentiality: Required
Disclosures.......................................47
5.14.13 No Representations and Warranties Regarding
Proprietary Information...........................48
5.15 Privileged Information.....................................48
5.15.1 Privileged Documents in Books and Records.........48
5.15.2 Sellers Privileged Information....................49
5.16 RESERVED...................................................49
5.17 Updated Schedules..........................................49
5.18 Section 314(b) of the Patriot Act..........................49
5.19 [Reserved].................................................49
5.20 Non-Disclosure Agreements..................................50
5.21 Option to Acquire Certain Assets...........................50
5.22 Risk Participation Assets..................................50
5.23 IT Assets..................................................50
ARTICLE VI CONDITIONS PRECEDENT TO THE OBLIGATION OF PURCHASER
TO CLOSE...............................................51
6.1 Conditions Precedent to Principal Closing..................51
6.1.1 Representations, Warranties and Covenants.........51
6.1.2 Related Agreements................................51
6.1.3 Approvals and Consents............................52
6.1.4 Injunction and Litigation.........................52
6.1.5 Material Adverse Effect...........................52
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(continued)
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6.2 Conditions Precedent to Subsequent Closings................52
6.2.1 Principal Closing.................................52
6.2.2 Covenants.........................................52
6.2.3 Related Agreements................................52
6.2.4 Approvals and Consents............................52
6.2.5 Injunction and Litigation.........................53
6.3 Subsequent Closings........................................53
ARTICLE VII CONDITIONS PRECEDENT TO THE OBLIGATION OF SELLERS
TO CLOSE...............................................53
7.1 Conditions Precedent to Principal Closing..................53
7.1.1 Representations, Warranties and Covenants.........53
7.1.2 Related Agreements................................53
7.1.3 Approvals and Consents............................54
7.1.4 Injunction and Litigation.........................54
7.2 Conditions Precedent to Subsequent Closings................54
7.2.1 Principal Closing.................................54
7.2.2 Covenants.........................................54
7.2.3 Related Agreements................................54
7.2.4 Approvals and Consents............................54
7.2.5 Injunction and Litigation.........................54
7.3 Subsequent Closings........................................55
ARTICLE VIII TAX MATTERS............................................55
8.1 Post-Closing Access to Records; Cooperation................55
8.2 Allocation of Taxes; Tax Returns...........................55
8.3 Additional Tax Matters.....................................56
8.4 Survival...................................................56
ARTICLE IX TERMINATION............................................56
9.1 Termination................................................56
9.2 Procedure of Termination...................................57
ARTICLE X INDEMNIFICATION........................................57
10.1 UBOC's Indemnification.....................................57
10.2 Purchaser's Indemnification................................58
10.3 Conditions of Indemnification..............................59
10.4 Indemnification Limits.....................................61
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(continued)
PAGE
10.4.1 Exclusions from Indemnification...................61
10.4.2 Right of Subrogation..............................61
10.4.3 Time Limits.......................................61
10.4.4 Limitations on Amount.............................61
10.4.5 Exclusive Remedy..................................62
ARTICLE XI MISCELLANEOUS PROVISIONS...............................62
11.1 Notices....................................................62
11.2 Sole Agreement.............................................63
11.3 Successors and Assigns.....................................64
11.4 Interpretation.............................................64
11.5 Dispute Resolution.........................................65
11.6 Governing Law and Jurisdiction.............................65
11.7 No Third Party Beneficiaries...............................65
11.8 Expenses...................................................65
11.9 Counterparts...............................................65
11.10 Severability...............................................66
11.11 Judicial Reference; Damages................................66
11.12 Schedules and Exhibits.....................................66
11.13 Sellers' Joint and Several Obligations.....................66
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INDEX OF EXHIBITS
Exhibit A Assumption Agreement
Exhibit B Xxxx of Sale
Exhibit C Risk Participation Agreement
Exhibit D Business Employee Leasing Agreement
Exhibit E Trademark and Trade Name License Agreement
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INDEX OF SCHEDULES
Schedule 1(A) Conversion and Retention Related Definitions
Schedule 1(B) Excluded Accounts
Schedule 1(C) Exceptions to Excluded Leases
Schedule 1(D) Knowledge
Schedule 2.2(m) Statutory Deposits
Schedule 2.2(u) Other Excluded Assets
Schedule 2.9.2 Contingent Payment
Schedule 2.10 Downward Adjustment
Schedule 2.11 Allocation of Consideration
Schedule 3.1 Sellers' Business Branches and Representative Offices
Schedule 3.5.2 Qualifications Assumptions, Adjustments to Seller's
Financial Statements
Schedule 3.6.1 Customers
Schedule 3.6.2 Risk Assets; Contingent Risk Assets and Contingent Risk
Liabilities
Schedule 3.6.5(A) Leased Premises
Schedule 3.6.5(B) Exceptions Regarding Breaches
Schedule 3.6.6(A) Tangible Personal Property
Schedule 3.6.6(B) Exceptions to Title of Tangible Personal Property
Schedule 3.7 Litigation
Schedule 3.8(A) Contracts
Schedule 3.8(B) Exception Regarding Defaults
Schedule 3.9.1 Registered Transferred Owned Intellectual Property
Schedule 3.9.4 Intellectual Property Actions Pending
Schedule 3.9.10 Exceptions to Intellectual Property Transfer
Schedule 3.10 Licenses
Schedule 3.13.1(A) Employee Plans and Contracts
Schedule 3.13.1(B) Exception to Administration of ERISA Plans
Schedule 3.13.2 Business Employees
Schedule 3.13.3 ERISA
Schedule 3.13.4 Exceptions to Administration of Retirement Plans outside
the U.S.
Schedule 3.14 Labor Relations
Schedule 3.15 Insurance
Schedule 3.17 Absence of Certain Changes and Events
Schedule 3.18 Compliance with Legal Requirements
Schedule 3.19 Sellers' Approvals
Schedule 4.5 Purchaser's Approvals
Schedule 5.1(b) Conduct of the Business
Schedule 5.4 Conversion Protocols
Schedule 5.5(b) Benefits for Accepting Employees
Schedule 5.5(e)(i)(ii) Employment Records of Transferred Employees
Schedule 5.14.6(a) Seller's Employees
Schedule 5.14.6(b) Purchaser's Employees
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PURCHASE AND ASSUMPTION AGREEMENT
THIS PURCHASE AND ASSUMPTION AGREEMENT (this "Agreement") is made and
entered into this 21st day of September, 2005, by and among UNION BANK OF
CALIFORNIA, N.A., a national banking association ("UBOC"), UNION BANK OF
CALIFORNIA INTERNATIONAL, a corporation organized under the provisions of
Section 25A of the Federal Reserve Act ("UBOCI"), UNION BANK OF CALIFORNIA
SERVICOS LTDA., a Brazilian limited liability company (sociedade limitada)
("LIMITADA" and together with UBOC and UBOCI, "Sellers"), and WACHOVIA BANK,
N.A., a national banking association ("Purchaser").
RECITALS
WHEREAS, Purchaser wishes to purchase from Sellers, and Sellers wish to
sell to Purchaser, all of the Purchased Assets (as hereinafter defined), and
Purchaser desires to assume from Sellers, and Sellers desire to assign to
Purchaser, all of the Assumed Obligations (as hereinafter defined), all upon the
terms and subject to the conditions contained herein.
NOW, THEREFORE, in consideration of the foregoing and the mutual
representations, warranties, covenants and agreements herein contained, and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Purchaser and Sellers agree as follows:
ARTICLE I
DEFINITIONS
The following terms, when used in this Agreement, shall have the
meanings described in this Section:
ACCEPTING EMPLOYEE shall have the meaning given in SCHEDULE 5.4.
ACCOUNTANTS DISPUTE WORK PAPERS shall have the meaning given in Section
2.8.3.
ACCOUNTING FIRM means a major firm of independent public accountants as
to which the Parties shall mutually agree.
AFFILIATE means a Person that directly, or indirectly through one or
more intermediaries, controls, or is controlled by, or is under common control
with, the Person specified; PROVIDED, HOWEVER, that with respect to Parent and
Sellers, and each of their respective Subsidiaries, "Affiliate" shall exclude
The Bank of Tokyo-Mitsubishi, Ltd. and its Affiliates (other than Parent and
Sellers and each of their respective Subsidiaries).
AGREEMENT shall have the meaning given in the preamble.
ASSUMED OBLIGATIONS shall have the meaning given in Section 2.3.
ASSUMED PRODUCT PRICES shall have the meaning given in SCHEDULE 1(A).
ASSUMPTION AGREEMENT shall have the meaning given in Section 2.7.5(d).
AVERAGE DAILY CORE REVENUE or ADCR shall have the meaning given in
SCHEDULE 1(A).
BASELINE SELLERS ADCR shall have the meaning given in SCHEDULE 1(A).
1
BASELINE PERIOD shall have the meaning given in SCHEDULE 1(A).
BASELINE PURCHASER ADCR shall have the meaning given in SCHEDULE 1(A).
BASE PURCHASE PRICE shall have the meaning given in Section 2.6.1(b).
XXXX OF SALE shall have the meaning given in Section 2.7.5(e).
BOOKS AND RECORDS means all records and all other data and information
(in whatever form maintained) in the possession or control of Sellers or their
Affiliates and to the extent related to the Business as currently conducted
(except to the extent they relate to Excluded Assets or Excluded Obligations),
including Customer lists, "know your customer" files with respect to the
Customers, transaction detail, customer service and collection records, billing
records, accounting records, administrative records and files and records
relating to regulatory matters; PROVIDED, HOWEVER, that if any such financial or
accounting records contain information that does not relate to the Business,
such information and records shall not constitute "Books and Records."
BOOK VALUE as used with respect to any Purchased Assets or Assumed
Obligations shall mean the value at which such assets or liabilities are
recorded on the balance sheets of the Business as of the date in question, which
shall be in accordance with GAAP and otherwise consistent with the treatment of
such or comparable items on Sellers' Financial Statements.
XXXXX XXXXX means debt securities issued as part of a "Xxxxx Plan
restructuring" (as originally announced by former U.S. Treasury Secretary
Xxxxxxxx X. Xxxxx) or any similar country debt restructuring or financing plan.
As commonly used, the term "Xxxxx xxxx" includes debt securities that may or may
not be collateralized, provided that they were issued either in exchange for
commercial bank loans (or accrued interest thereon) or as one of the menu
options made available as part of a sovereign debtor's restructuring or
refinancing of its external indebtedness.
BUSINESS means International Banking Group activities and operations.
Notwithstanding the foregoing, for all purposes under this Agreement, the term
"Business" shall not include:
(i) the operations of the International Banking Group
conducted through its representative office in Moscow;
(ii) International Banking Group customers headquartered or
principally located in nations formerly constituting the Soviet Union and in
Eastern Europe;
(iii) the domestic businesses of the International Banking
Group related to U.S. branches and agencies of foreign banks;
(iv) the activities and operations characterized internally by
Sellers as the U.S. International and U.S. Export Industries, which includes
domestic customers (other than financial institutions) serviced by the
International Bank Group through such activities and operations and the
activities and operations of the International Banking Group conducted through
offices located in Portland, Oregon; Seattle, Washington; and San Francisco and
Monterey Park, California;
(v) the processing center located in Monterey Park, California
to the extent providing letter of credit processing services for domestic and
international clients; and
(vi) Excluded Accounts.
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BUSINESS ACTIVITIES shall have the meaning given in Section 5.14.3(c).
BUSINESS DAY means any day other than a Saturday, Sunday or a day on
which commercial banks in New York, New York are authorized or required by law
to be closed.
BUSINESS EMPLOYEES means each Person having the status of an employee
whose working time is primarily spent serving in the Business, including,
without limitation, each such Person currently on leave of absence, vacation,
sick days, short or long term disability or workers' compensation.
BUSINESS EMPLOYEE LEASING AGREEMENT shall have the meaning given in
Section 2.7.6(b).
BUSINESS INTELLECTUAL PROPERTY means all Intellectual Property Rights
primarily related to, primarily used in or primarily held for use in the
Business.
BUSINESS INTELLECTUAL PROPERTY CONTRACTS means all Intellectual
Property Contracts primarily related to, primarily used in or primarily held for
use in the Business.
BUSINESS IT ASSETS means all IT Assets primarily related to, primarily
used in or primarily held for use in the Business.
BUSINESS LEASES means all real property leased or subleased to Sellers
or their Affiliates and used in connection with the Business.
BUSINESS UNIT means the respective portion of the Business conducted
through offices in each of the following jurisdictions or locations (each of
which numbered jurisdictions or locations below shall be considered a separate
Business Unit): (i) the offices through which the Principal Business Unit
conducts business, (ii) Japan, (iii) South Korea, (iv) China (excluding Hong
Kong) (v) Hong Kong, (vi) Philippines, (vii) Brazil, (viii) India, (ix)
Indonesia, (x) Malaysia, (xi) Singapore, (xii) Thailand, (xiii) Vietnam, (xiv)
Cayman Islands and (xv) Taiwan.
CLAIM shall have the meaning given in Section 11.11(a).
CLOSING and CLOSING DATE shall have the meanings given in Section
2.7.1.
CLOSING BALANCE SHEET shall have the meaning given in Section 2.5.
CLOSING CASH CONSIDERATION AMOUNT shall have the meaning given in
Section 2.6.3.
CODE means the Internal Revenue Code of 1986, as amended, and the rules
and regulations promulgated thereunder.
COMPUTER PROGRAM means (i) existing computer software, programs and
applications, including all object code and reasonably available source code,
(ii) all versions, updates, corrections, enhancements and modifications thereof,
(iii) all descriptions, flow-charts and logic diagrams, programmers' comments,
schematics, and other work product used to design, plan, organize and develop
any of the foregoing, and (iv) all documentation, including technical
specifications, user manuals and training materials, relating to any of the
foregoing.
CONTINGENT PAYMENT shall have the meaning given in Section 2.9.2.
CONTINGENT PAYMENT DATE shall have the meaning given in Section 2.9.2.
3
CONTINGENT RISK ASSET means a Risk Asset that would be required to be
set forth on Schedule RC-L of the Consolidated Reports of Condition and Income
for a Bank with Domestic and Foreign Offices -- FFIEC 031.
CONTINGENT RISK LIABILITY means an off-balance sheet liability of the
kind that would be required to be set forth on Schedule RC-L of the Consolidated
Reports of Condition and Income for a Bank with Domestic and Foreign Offices --
FFIEC 031.
CONTRACT means any contract, lease, sales order, purchase order,
commitment or other agreement, whether written or oral.
CONTRACT INTEREST RATE means the prime rate for money center banks as
reported in the WALL STREET Journal from time to time.
CONTROL shall have the meaning given in Section 5.14.1.
CONVERSION shall have the meaning given in Section 5.4.1.
CONVERSION MEASUREMENT MONTH shall have the meaning given in SCHEDULE
1(A).
CONVERSION PERCENTAGE shall have the meaning given in SCHEDULE 1(A).
CONVERSION PERCENTAGE CALCULATION DATE shall have the meaning given in
Section 2.9.1.
CONVERSION PERIOD COMBINED ADCR shall have the meaning given in
SCHEDULE 1(A).
CONVERSION PROTOCOLS shall have meaning given in Section 5.4.1.
COPYRIGHTS means mask rights, original works of authorship and
copyrights, registrations and applications for registration thereof throughout
the world, all renewals, extensions, restorations and reversions thereof, all
moral and common?law rights thereto, all rights therein provided by
international treaties or conventions, and all other rights associated
therewith.
CORE PRODUCTS shall have the meaning given in SCHEDULE 1(A).
CUSTOMER means a Person maintaining a Risk Asset or deposit
relationship with any of the Sellers and/or on whose behalf any of the Sellers
provides correspondent banking or trade related finance or processing services,
in all cases in connection with the Business, but does not include any Person
maintaining an Excluded Account or any customer relationship excluded from the
definition of Business.
DISPUTE OFFICER shall have the meaning given in Section 10.3(a).
DOWNWARD ADJUSTMENT shall have the meaning given in Section 2.10.
EFFECTIVE TIME shall have the meaning given in Section 2.7.1.
EMPLOYEE PLAN OR CONTRACT means (i) each individual employment or
severance Contract with a current Business Employee; (ii) each plan or Contract
providing for deferred compensation, bonuses, stock options, employee stock
purchases, other equity-compensation or equity appreciation rights, incentive
compensation, executive compensation payments or Severance Benefits or any other
employee benefit (including, but not limited to, fringe benefits as defined in
Section 132 of the Code, and whether or not in
4
writing), in each case covering current Business Employees; (iii) any ERISA Plan
covering any current Business Employee and (iv) Sellers' Retention Program;
PROVIDED, HOWEVER, that Employee Plan or Contract shall not mean any employee
benefit required to be provided by Legal Requirements that are not otherwise
part of Sellers' applicable and effective written plan or policy or otherwise
embodied in a Contract with any Business Employee.
EMPLOYMENT TIME shall have the meaning given in SCHEDULE 5.4.
ENCUMBRANCE means any pledge, security interest, mortgage, community
property interest, lien (including but not limited to liens for unpaid taxes),
attachment, automatic or other stay in a bankruptcy or insolvency proceeding,
trust agreement, constructive or resulting trust, voting trust or agreement,
restricted stock agreement, right of first refusal, or option, including any
restriction on use, voting, transfer, receipt of income, or exercise of any
other attribute of ownership.
ENFORCEABILITY EXCEPTIONS shall have the meaning given in Section 3.4.
ENVIRONMENTAL LAW shall mean any Legal Requirement relating to the
protection of the natural environment (i.e., air, water and soil), including,
without limitation, the Comprehensive Environmental Response, Compensation and
Liability Act (42 U.S.C. Section 9601, ET SEQ.); the Resource Conservation and
Recovery Act (42 U.S.C. Section 6901, ET SEQ.); the Clean Air Act, as amended
(42 U.S.C. Section 7401, ET SEQ.); the Federal Water Pollution Control Act, as
amended (33 U.S.C. Section 1251, ET SEQ.); the Toxic Substances Control Act, as
amended (15 U.S.C. Section 9601, ET SEQ.); the Emergency Planning and Community
Right-to-Know Act of 1986 (42 U.S.C. Section 11001, ET SEQ.); the Safe Drinking
Water Act (42 U.S.C. Section 300f, ET SEQ.); and all comparable state and local
laws and laws of other jurisdictions.
ERISA means the Employee Retirement Income Security Act of 1974.
ERISA PLAN means an employee benefit plan as defined in Section 3(3) of
ERISA.
EXCLUDED ACCOUNTS means the accounts of the Persons listed as of the
date hereof on SCHEDULE 1(B) and the accounts of such other Persons as Purchaser
may elect to add to SCHEDULE 1(B), in its reasonable discretion, applying its
policies and standards substantially consistent with those used to determine the
Persons listed on SCHEDULE 1(B) as of the date hereof.
EXCLUDED ASSETS shall have the meaning given in Section 2.2.
EXCLUDED BUSINESS INTELLECTUAL PROPERTY CONTRACTS means all Business
Intellectual Property Contracts concerning Business IT Assets and/or Computer
Programs primarily related to, primarily used in or primarily held for use in
the Business, except to the extent Purchaser exercises its option with respect
thereto pursuant to Section 5.23 hereof.
EXCLUDED BUSINESS IT ASSETS means all Business IT Assets, except to the
extent Purchaser exercises its option with respect thereto pursuant to Section
5.23 hereof.
EXCLUDED CONTRACTS means all Contracts except for (i) Business Leases
that constitute Purchased Assets; (ii) Business Intellectual Property Contracts
that constitute Purchased Assets; and (iii) those Contracts with respect to
which Purchaser exercises its option pursuant to Section 5.21.2.
EXCLUDED LEASES means all Business Leases except those Business Leases
set forth on SCHEDULE 1(C).
EXCLUDED OBLIGATIONS shall have the meaning given in Section 2.4.
5
EXTERNAL COMMUNICATIONS PLAN has the meaning given in the Conversion
Protocols.
FDIA means the Federal Deposit Insurance Act, 12 USC ss.1811 ET SEQ.
FEDERAL RESERVE means the Board of Governors of the Federal Reserve
System.
FINAL BALANCE SHEET shall have the meaning given in Section 2.8.1.
FINAL CASH CONSIDERATION AMOUNT shall have the meaning given in Section
2.8.1.
FINAL RETENTION PERCENTAGE means the greater of the (i) the Conversion
Percentage and (ii) the Initial Retention Percentage.
GAAP means United States generally accepted accounting principles.
GOVERNMENTAL AUTHORITY means any government or political subdivision,
board, commission or other instrumentality thereof, whether federal, state,
local or foreign.
GROWTH FACTOR shall have the meaning given in SCHEDULE 1(A).
HAZARDOUS MATERIALS means any substance, chemical, waste or other
material the presence of which requires investigation or remediation under any
Environmental Law; or which is or becomes defined as a hazardous waste,
hazardous substance, hazardous material, used oil, pollutant or contaminant
under any Environmental Law.
HSR ACT means the Xxxx-Xxxxx Xxxxxx Antitrust Improvements Act of 1976.
INDEMNIFIED PARTY shall have the meaning given in Section 10.3.
INDEMNIFYING PARTY shall have the meaning given in Section 10.3.
INITIAL RETENTION PERCENTAGE means the average of the three Retention
Metric Quotients.
INTANGIBLE ASSETS means, with respect to assets appearing on any
balance sheet, those rights and other nonphysical resources such as core deposit
intangibles, Intellectual Property Rights; deferred tax assets, goodwill,
Computer Programs, capitalized advertising costs, capitalized development costs,
organizational costs, licenses, leases, franchises and permits.
INTELLECTUAL PROPERTY CONTRACTS means all Contracts concerning
Intellectual Property Rights or IT Assets to which Sellers and/or their
Affiliates are a party, including (a) licenses of Intellectual Property Rights
(i) by any Seller or their Affiliates to any third party, (ii) by any third
party to any Seller or their Affiliates, or (iii) between or among Sellers
and/or their Affiliates, (b) agreements, licenses or leases relating to the
development, use, maintenance, support, transfer or transmission of Intellectual
Property Rights or IT Assets, (c) consents, settlements, decrees, orders,
injunctions, judgments, or rulings governing the use, validity, or
enforceability of Intellectual Property Rights or IT Assets, and (d) agreements
pursuant to which any third party has an ownership or security interest in any
Intellectual Property Rights or IT Assets.
INTELLECTUAL PROPERTY RIGHTS means collectively: (i) Patents, (ii)
Copyrights, (iii) Trademarks, (iv) Trade Secrets, (v) copies and tangible
embodiments of any of the foregoing in whatever form or medium, (vi) all rights
to xxx, recover and retain damages, costs and fees for past, present and future
infringement, misappropriation, dilution, or other violation of or interference
or conflict with any of the foregoing; and (vii)
6
rights to apply for or register any of the foregoing.
INTERNATIONAL BANKING GROUP means the international correspondent
banking and trade-related product business identified internally (and reported
as a separate business segment publicly) by UBOC as the "International Banking
Group" and conducted through the domestic offices of Sellers located in San
Francisco, Monterey Park, Los Angeles, and New York; through foreign branches
located in Tokyo, Taipei, Seoul, Hong Kong, Manila, and Grand Cayman; and the
representative office activities conducted through offices of Sellers located in
Brazil (Sao Paulo), China (Beijing and Shanghai), India (Mumbai, Chennai and New
Delhi), Indonesia (Jakarta), Malaysia (Kuala Lumpur), Philippines (Cebu Island,
a liaison office of Manila Branch), Singapore (Singapore), Thailand (Bangkok),
and Vietnam (Ho Chi Minh City and Hanoi).
IT ASSETS means computer systems, networks, hardware, Computer
Programs, firmware, middleware, servers, workstations, routers, hubs, switches,
telecommunications and data communication lines and all other information
technology equipment, and all related documentation.
IRS means the Internal Revenue Service.
KNOWLEDGE means, with respect to each of Sellers, on the one hand, and
Purchaser, on the other hand, (i) the actual knowledge, without independent
investigation, of those individuals set forth on SCHEDULE 1(D) and (ii) such
knowledge as those individuals set forth on SCHEDULE 1(D) reasonably would be
expected to have in light of their respective employment positions or titles
with Sellers or Purchaser, as applicable.
LEASED PREMISES shall have the meaning given in Section 3.6.5.
LEGAL REQUIREMENT means any law, statute, ordinance, regulation, writ,
injunction, rule, established principle of common law, directive, decree,
administrative ruling or enforceable supervisory policy of any Governmental
Authority or applicable court decision.
LICENSE means any license, permit, order, approval or non-objection,
registration, membership, authorization or qualification under any federal,
state or local law or with any Governmental Authority or under any industry or
non-governmental self-regulatory organization used by the Business.
LICENSED BUSINESS INTELLECTUAL PROPERTY means Business Intellectual
Property that Sellers are licensed or otherwise permitted by other Persons to
use in the operation of the Business.
LIMITADA shall have the meaning given in the recitals.
LOSS means all losses, costs, obligations, liabilities, settlement
payments, awards, judgments, fines, penalties, damages, and expenses (including
but not limited to reasonable and necessary fees of counsel, investigators,
expert witnesses, consultants and other professionals, court filing fees, court
costs, arbitration fees or costs, witness fees and other similar expenses),
whether or not relating to claims of third persons.
MATERIAL ADVERSE EFFECT means with respect to any Party or the Business
any effect, condition, event, change or occurrence (or any combination thereof)
(a) that is materially adverse to the business, condition (financial or
otherwise) or results of operations of the Business or such Party taken as a
whole or (b) that materially impairs the ability of such Party to consummate the
transactions contemplated by this Agreement; PROVIDED, HOWEVER, that in
determining whether a Material Adverse Effect with respect to the Business, or a
Party, as the case may be, has occurred there shall be excluded any effect,
condition, event, change or occurrence impacting the Business or such Party to
the extent caused by: (i) any change generally affecting banks (including Edge
Act corporations) or bank holding companies in laws, regulations or rules (or
enforcement or interpretations thereof), or of GAAP or regulatory accounting
principles or requirements
7
(unless such change has a materially disproportionate adverse effect on the
Business or such Party, as the case may be, relative to similarly situated
business or banking organizations); (ii) any change generally affecting
correspondent banking providers or the market for correspondent banking products
and services (unless such change has a materially disproportionate adverse
effect on the Business or such Party, as the case may be, relative to similarly
situated business or correspondent banking providers); (iii) any change in
markets or conditions (financial, political or economic) affecting
international, national or local economies or financial markets or the banking
industry, including without limitation interest or exchange rates,
convertibility of foreign currencies, war, terrorism, or hostilities (unless
such change has a materially disproportionate adverse effect on the Business or
such Party, as the case may be, relative to similarly situated banking
organizations); (iv) any disruption of employee, customer, supplier or other
similar relationships or other event or circumstance resulting from or
attributable to the execution or announcement of this Agreement or the pendency
of the transactions contemplated hereby or by the Related Agreements; (v) any
changes made by Sellers in the Business or other actions taken, delayed or
omitted to be taken by Sellers at the request or with the consent of Purchaser
or any of its representatives; (vi) with respect to the Business, any actions
(including, without limitation, any corrective actions) taken or to be taken by
or against Sellers, or any penalties, restrictions, regulations or fines imposed
on Sellers, in connection with the Written Agreement or the MOU as each is in
effect as of the date hereof (but not including any such actions, penalties,
restrictions, regulations or fines in connection with any amendment or
modification to the Written Agreement or the MOU after the date hereof or any
other regulatory enforcement proceeding or any criminal proceeding); or (vii)
any decrease in the revenue of the Business occurring after the date of the
Agreement, whether or not resulting in a Downward Adjustment pursuant to Section
2.10.
MOU means that certain Memorandum of Understanding entered into by and
between UBOC and the OCC dated March 23, 2005.
NON-COMPETE TERM shall have the meaning given in Section 5.14.1.
NON-DISCLOSURE AGREEMENT means that certain Non-Disclosure Agreement
dated as of May 20, 2005 by and between UBOC and Purchaser.
NON-OVERLAP CUSTOMER NOTICE has the meaning given in the Conversion
Protocols.
OCC means the Office of the Comptroller of the Currency or its
successors in interest.
OUTSIDE BUSINESS UNIT CLOSING DATE shall have the meaning given in
Section 2.7.4
OUTSIDE PRINCIPAL CLOSING DATE shall have the meaning given in Section
2.7.3.
OVERLAP CUSTOMER NOTICE has the meaning given in the Conversion
Protocols.
OWNED BUSINESS INTELLECTUAL PROPERTY means all Business Intellectual
Property owned by Sellers and their Affiliates.
OWNED BUSINESS IT ASSETS means all Business IT Assets owned by Sellers
and their Affiliates. PARENT means UnionBanCal Corporation.
PARTIES means Sellers and Purchaser.
PATENTS means patents, patent applications, utility model
registrations, statutory invention registrations, and industrial designs,
including reissues, substitutions, renewals, divisions, continuations,
8
continuations-in-part, extensions, and reexaminations thereof, all inventions
disclosed therein and improvements thereto, all rights therein provided by
international treaties or conventions, and all other rights associated
therewith.
PERMITTED ENCUMBRANCES, as to any Purchased Asset, means each of the
following: (i) Encumbrances for Taxes, assessments and governmental charges or
levies not yet due and payable; (ii) Encumbrances arising out of judgments or
awards in respect of which Sellers or their Subsidiaries are in good faith
prosecuting an appeal or proceeding for review and in respect of which it has
secured a subsisting stay of execution pending such appeal of proceeding and
which are disclosed or reserved against on the balance sheet of the Business;
(iii) zoning restrictions, easements, licenses and other restrictions on the use
of real property or any interest therein, or minor irregularities in title
thereto, which do not, individually or in the aggregate, adversely affect in any
material respect the current use and enjoyment of such property by the Business
or the merchantability or the value of such property or interest therein; (iv)
purchase money mortgages or other purchase money or vendor's Encumbrances
(including, without limitation, finance leases) to the extent that the
corresponding liability is disclosed or reserved against on the balance sheet of
the Business, PROVIDED THAT no such Encumbrance shall extend to or cover any
property other than that so purchased; (v) Encumbrances on Risk Assets (other
than loans) given to secure deposits and other liabilities of Sellers arising in
the ordinary course of the operation of the Business (including those given to
secure borrowings, advances, or discount window availability from any private or
governmental banking entity or any clearinghouse); and (vi) materialmen's,
mechanics', carriers', workmen's and repairmen's liens and other similar common
law or statutory Encumbrances arising or incurred in the ordinary course that do
not, individually or in the aggregate, adversely affect in any material respect
the use and enjoyment of any Purchased Asset.
PERSON means any natural person, corporation, partnership, limited
liability company, trust, joint venture or other entity.
POST-CLOSING PERIOD means, with respect to any Business Unit, any
taxable period beginning after the Effective Time with respect to the Closing
Date therefor or, in the case of any tax period which includes the Effective
Time with respect to the Closing Date therefor, the portion of such period
beginning after the Effective time in respect of such Closing Date.
PRE-CLOSING BUSINESS OPERATIONS means the operation of a Business Unit
by Sellers or any of their Affiliates prior to the Effective Time with respect
to the Closing Date therefor.
PRE-CLOSING PERIOD means, with respect to any Business Unit, any
taxable period ending on or before the Effective Time with respect to the
Closing Date therefor or, in the case of any taxable period which includes, but
does not end on, the Effective Time with respect to the Closing Date therefor,
the portion of such period up to the Effective Time in respect of such Closing
Date.
PRINCIPAL BUSINESS UNIT means the Business conducted through offices in
the United States of America.
PRINCIPAL CLOSING means the Closing related to the Principal Business
Unit.
PRINCIPAL CLOSING DATE means the Closing Date with respect to the
Principal Closing.
PRINCIPAL EFFECTIVE TIME means the Effective Time of the Principal
Closing.
PRIVILEGED DOCUMENTS shall have the meaning given in Section 5.15.1.
PROHIBITED SERVICES shall have the meaning given in Section 5.14.1.
9
PROPOSAL shall have the meaning given in Section 5.12.
PROPRIETARY INFORMATION means any and all information and material
disclosed by one Party or its Representatives, to the other Party or its
Representatives pursuant to the Non-Disclosure Agreement or otherwise in
connection with the transactions contemplated hereby and by the Related
Agreements or in the course of a Party's evaluation of, and due diligence
relating to, the transactions contemplated hereby and by the Related Agreements,
or obtained by a Party through inspection or observation of the other Party's
properties, facilities or operations, together with all communications, data,
reports, analyses, compilations, studies, interpretations, records, notes,
lists, financial statements or other materials or information prepared by a
Party or its Representatives that contain or otherwise reflect or are based
upon, in whole or in part, any Proprietary Information, or that reflect the
review of, interest in, or evaluation of all or any portion of the transactions
contemplated hereby and by the Related Agreements or the other Party's business,
whether tangible or intangible, furnished or prepared in writing, or in oral,
graphic, electronic or any other form or manner and whether furnished or
prepared before, on or after the date hereof. Proprietary Information, includes,
without limitation, any (a) trade secret, know-how, idea, invention, process,
technique, algorithm, program (whether in source code or object code form),
hardware, device, design, schematic, drawing, formula, data, plan, strategy,
client and customer lists, financial statements or forecasts of a Party; and (b)
technical, engineering, manufacturing, product, marketing, servicing, financial,
personnel and other such information or materials of a Party. In addition,
unless and to the extent a Party consents in writing to disclosure or as such
disclosure is required by Legal Requirements, Proprietary Information shall
include (x) the proposed terms and conditions of the transactions contemplated
hereby and by the Related Agreements (including any financial terms and
conditions) and the status thereof, and (y) the context and scope of the
Non-Disclosure Agreement, this Agreement and the Related Agreements. Proprietary
Information shall not include information that: (i) is or becomes generally
available to the public other than as a result of any disclosure or other action
or inaction by a Party in breach of this Agreement (including any disclosure or
other action or inaction by the Representatives of a Party that could constitute
a breach of this Agreement if undertaken by a Party itself); (ii) is or becomes
rightfully known to a Party or its Representatives from a Person (other than the
other Party or any of its Representatives) that is not known by such Party to
owe a duty of confidentiality to the other Party or its Representatives with
respect to such Proprietary Information; or (iii) is or was already in the
possession of, or is or becomes known to, a Party or any of its Representatives
prior to any discussions between the Parties relating to the transactions
contemplated by this Agreement and the Related Agreements or is or was
independently developed by such Party or any of its Representatives without
violation of any obligation under this Agreement. The Parties acknowledge and
agree that certain Proprietary Information that is primarily related to,
primarily used in, or primarily held for use in the Business will be transferred
from Sellers to Purchaser pursuant to the consummation of the transactions
contemplated hereby and by the Related Agreements, and that, as such, Purchaser
will become the owner of such Proprietary Information and will be accorded the
same protections set forth in this Agreement with regard to such Proprietary
Information as Sellers are provided prior to such transfer.
PURCHASED ASSETS shall have the meaning given in Section 2.1.1.
PURCHASER shall have the meaning given in the preamble.
PURCHASER'S APPROVALS shall have the meaning given in Section 4.5.
REFERENCE shall have the meaning given in Section 11.11(a).
REGISTERED means issued by, registered with, renewed by or the subject
of a pending application before any Governmental Authority or domain name
registrar.
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RELATED AGREEMENTS means the Assumption Agreements, the Bills of Sale,
the Risk Participation Agreement, the Trademark and Trade Name License Agreement
and the Business Employee Leasing Agreement.
REPRESENTATIVE means as to any Person, its directors, officers,
employees, agents, advisors or other representatives (including, without
limitation, financial advisors, banks, attorneys, accountants and their
respective Representatives).
RESTRICTED AREA shall have the meaning given in Section 5.14.2.
RETENTION METRIC QUOTIENT shall have the meaning given in SCHEDULE
1(A).
RETENTION METRICS shall have the meaning given in SCHEDULE 1(A).
RETENTION PERIOD shall have the meaning given in SCHEDULE 1(A).
RISK ASSETS means, as of any specified date (a) all cash, coin,
currency, bullion, amounts due from other financial institutions, investment
securities, loans, trading securities, securities purchased, customers'
liabilities on acceptances, Federal Funds sold and other items appearing as
assets on the balance sheets of the Sellers, as of such date, relating to the
Business, other than premises, plant and equipment and Intangible Assets; and
(b) all off-balance sheet items of the Sellers relating to the Business as of
such date accorded risk-weighting (at 0% or above) for purposes of calculating
risk-weighted capital ratios in Appendix A of Part 3 of Title 12 of the Code of
Federal Regulations, as applicable to national banks, or reportable by such
banks on Schedule RC-L of the Consolidated Reports of Condition and Income for a
Bank with Domestic and Foreign Offices -- FFIEC 031, including without
limitation those in the following categories: (i) unused commitments; (ii)
standby and commercial letters of credit; (iii) participations in acceptances
conveyed to others by the reporting bank; (iv) securities lent; (v) credit
derivatives; (vi) spot foreign exchange contracts; and (vii) all other
off-balance sheet assets required to be reported on Schedule RC-L.
RISK ASSET DOCUMENTS means, with respect to any Risk Asset, all
Contracts, documents and instruments governing, evidencing, guarantying,
insuring or securing such Risk Asset.
RISK PARTICIPATION AGREEMENT shall have the meaning given in Section
2.7.6.
RISK PARTICIPATION ASSET shall the meaning given in the Risk
Participation Agreement.
SECTION 314(B) shall have the meaning given in Section 5.18.
SELLERS shall have the meaning given in the preamble.
SELLERS' FINANCIAL STATEMENTS shall have the meaning given in Section
3.5.1.
SELLERS' APPROVALS shall have the meaning given in Section 3.19.
SELLERS' RETENTION PROGRAM means the retention program established and
communicated by Sellers to the Business Employees in connection with the
transactions contemplated by this Agreement providing additional compensation
for those Business Employees who continue to be employed in the Business
immediately prior to the applicable Employment Time and otherwise meet Sellers'
requirements.
SELLERS' SHUTDOWN DATE means with respect to each Business Unit the
earlier of (i) the completion of the Conversion with respect to all Customers of
such Business Unit and (ii) the later of (A) sixty (60) days
11
after the Closing of such Business Unit and (B) March 31, 2006; PROVIDED THAT if
the Closing of a Business Unit (other than the Principal Business Unit) does not
occur by the Outside Business Unit Closing Date, then the Sellers' Shutdown Date
for such Business Unit shall mean the date thirty (30) days after the Outside
Business Unit Closing Date pursuant to Section 2.7.4(b) and (c).
SEVERANCE BENEFITS means payments or benefits extended under (i) any
applicable and effective written policy of Sellers applicable to any Business
Employee providing for payments or benefits upon termination of employment
(other than qualified or non-qualified retirement plans), all of such policies,
as of the date hereof and as Updated as of the Closing, being identified on
Schedule 3.13.1; (ii) any Contracts between any Business Employee and Sellers or
their Affiliates, all such agreements as of the date hereof and as Updated as of
the Closing being identified on Schedule 3.13.1, providing for payments or
benefits upon termination of employment (other than qualified or non-qualified
retirement plans); and (iii) any applicable Legal Requirements with respect to
Business Employees engaged outside of the United States providing for payments
or provision of benefits by Sellers upon termination of employment.
SUBSIDIARY means any corporation, trust, partnership, joint venture or
other entity of which 50% or more of the voting interest or ownership interest
is owned, legally or beneficially, by any Person and its Affiliates.
SUBSTANTIAL DETRIMENT means (i) any substantial impairment of the
benefits reasonably expected, as of the date hereof, to be realized from the
consummation of the transactions contemplated by this Agreement; or (ii) the
imposition of conditions that would require the Purchaser or the Sellers, as the
case may be, to proffer to, or agree to, sell, divest, lease, license, transfer,
dispose of or otherwise encumber or hold separate, before or after the Effective
Time of any Closing, material assets, licenses, operations, rights, product
lines, businesses or their interest therein or any of their respective
Affiliates or to agree to any material changes or restriction on, or other
material impairment of the ability of Purchaser or Sellers, as the case may be,
to own or operate, any such assets, licenses, product lines, businesses or
interests therein.
TAX (and, with correlative meaning "TAXES" and "TAXABLE") means any net
income, alternative or add-on minimum tax, gross income, gross receipts, sales,
use, ad valorem, transfer, franchise, profits, license, withholding, payroll,
employment, excise, severance, stamp, value-added, consumption, occupation,
premium, property, environmental or windfall profit tax, custom duty,
unincorporated business, estimated or other tax, governmental fee or other
assessment or charge of any kind whatsoever, together with any interest or any
penalty, addition to tax or additional amount and any interest on such penalty,
addition to tax or additional amount, imposed by any Tax Authority.
TAX AUTHORITY means Governmental Authority responsible for the
imposition, assessment or collection of any Tax (domestic or foreign).
TAX RETURNS means any return, statement, declaration, notice,
certificate or other document that is or has been filed with or submitted to, or
required to be filed with or submitted to, any Governmental Authority in
connection with the determination, assessment, collection or payment of any Tax
or in connection with the administration, implementation or enforcement of or
compliance with any Legal Requirement related to any Tax.
TRADEMARK AND TRADE NAME LICENSE AGREEMENT shall have the meaning given
in Section 2.7.6(c).
TRADEMARKS means trademarks, service marks, certification marks, trade
dress, trade names, URL addresses, Internet domain names and logos, symbols,
slogans and other indicia of source or origin, all goodwill of the Business
symbolized thereby or associated therewith, all registrations and applications
for registration thereof throughout the world, all common-law rights thereto,
all rights therein provided by
12
international treaties or conventions, and all other rights associated
therewith.
TRADE SECRETS means trade secrets, Proprietary Information and
confidential information and materials, including, without limitation, trade
secrets, Proprietary Information and/or confidential information and materials
of the following nature: know-how, technical, business, marketing and financial
information and data, databases, processes and techniques, research and
development information, discoveries and inventions (whether or not patentable
or reduced to practice), technology, formulae, processes, algorithms,
methodologies, drawings, schematics, business methods, specifications, models,
designs, plans, proposals, pricing and cost information, business and marketing
plans and records, customer, client and supplier lists and information, and all
rights in any jurisdiction to limit the use or disclosure thereof.
TRANSFER TAXES shall mean all federal, state, local or foreign sales,
use, transfer, real property transfer, mortgage recording, stamp duty,
value-added, consumption or similar Taxes that may be imposed in connection with
the transfer of Purchased Assets or assumption of Assumed Obligations, together
with any interest, additions to Tax or penalties with respect thereto and any
interest in respect of such additions to Tax or penalties.
TRANSFERRED BUSINESS INTELLECTUAL PROPERTY means Transferred Licensed
Business Intellectual Property and Transferred Owned Business Intellectual
Property.
TRANSFERRED BUSINESS INTELLECTUAL PROPERTY CONTRACTS means Business
Intellectual Property Contracts that constitute Purchased Assets.
TRANSFERRED BUSINESS IT ASSETS means Business IT Assets that constitute
Purchased Assets.
TRANSFERRED LICENSED BUSINESS INTELLECTUAL PROPERTY means Licensed
Business Intellectual Property licensed pursuant to a Transferred Business
Intellectual Property Contract.
TRANSFERRED OWNED BUSINESS INTELLECTUAL PROPERTY means Owned Business
Intellectual Property that constitute Purchased Assets.
TRUE-UP shall have the meaning given in Section 2.8.4.
UBOC shall have meaning given in the recitals.
UBOCI shall have the meaning given in the recitals.
UPDATED AS OF THE CLOSING means updated to take into account changes
from the date of this Agreement in any Business Unit with respect to the Closing
corresponding to such Business Unit.
U.S. DEPOSITS means (i) any "deposits" (as such term is defined in
Section 3(l) of the FDIA, 12 USC ss. 1813(l)) and (ii) any liabilities that
would be "deposits" (as so defined) but for subparagraphs (A), (B) or (C) of
said Section 3(l) of the FDIA.
WARN ACT shall mean the Worker Adjustment and Retraining Notification
Act.
WELFARE PLAN shall have the meaning given in Section 5.5(b)(iii).
WIN/LOSS ADJUSTMENT means an adjustment to Conversion Period Combined
ADCR designed to exclude the effect of specific customer "wins" or "losses" by
Purchaser that would affect ADCR during the Conversion Measurement Month. The
Win/Loss Adjustment is intended to neutralize the effect of
13
Purchaser "wins" (e.g., via development of new business or merger or acquisition
activity unrelated to the transactions contemplated hereby) or "losses" (e.g.,
losses of significant ADCR for reasons unrelated to the transactions
contemplated hereby, including customer losses or disposition of businesses).
Customer wins and losses will be eligible for inclusion in the Win/Loss
Adjustment only if they exceed 7.5% of the ADCR of any given Core Product.
WRITTEN AGREEMENT means that certain "Written Agreement" by and between
UBOCI and the Federal Reserve Bank of New York, dated October 18, 2004 (Docket
No. 04-028-WA/XX-XX).
ARTICLE II
TRANSFER AND ACQUISITION OF PURCHASED ASSETS
2.1 Purchased Assets
2.1.1 PURCHASED ASSETS. Subject to the other terms and conditions of
this Agreement, at the Closing for each Business Unit, with effect as of the
Effective Time therefor, Sellers shall sell, assign, convey, transfer and
deliver to Purchaser, and Purchaser shall purchase and acquire from Sellers and
take assignment and delivery from Sellers of, all of Sellers' right, title and
interest (subject to Permitted Encumbrances) in and to all of the assets,
properties, Contracts (including Business Leases), accounts and other rights of
Sellers that are primarily related to, primarily used in or primarily held for
use in the conduct of the operations of the Business, other than the Excluded
Assets (collectively, for each Business Unit, the "Purchased Assets"). The
Purchased Assets include, without limitation, the following (except to the
extent they constitute Excluded Assets) assets of Sellers primarily related to,
primarily used in or primarily held for use in the conduct of the Business:
(a) all Customers;
(b) all Business Leases including, without limitation, all
improvements and fixtures thereon;
(c) all tangible personal property, including, without
limitation, furnishings, equipment, stationery, stores and
supplies;
(d) all assets, if any, that Purchaser elects to acquire
pursuant to Section 5.21;
(e) Books and Records;
(f) all credits, prepaid expenses, advance payments, security
deposits, prepaid items and duties to the extent related to
any Purchased Asset and reflected on the Final Balance
Sheet;
(g) all Owned Business Intellectual Property, Owned Business IT
Assets and Business Intellectual Property Contracts;
(h) all claims, causes of action, choses in action, rights of
recovery, defenses or counterclaims and rights of set-off
of any kind (including rights under and pursuant to all
warranties, representations and guarantees made by
suppliers of products, materials or equipment or components
thereof) relating to any Purchased Assets or Assumed
Obligations; and
14
(i) all guaranties, warranties, indemnities and similar rights
in favor of Sellers or their Affiliates to the extent
related to any Purchased Asset.
2.1.2 CONSENTS TO ASSIGNMENT. Anything in this Agreement to the
contrary notwithstanding, this Agreement shall not constitute an agreement to
assign or transfer any Contract (including any Business Lease or License) or
other Purchased Asset or any claim or right or any benefit or obligation
thereunder or resulting therefrom if an assignment or transfer thereof, without
the consent of a Governmental Authority or, unless otherwise permitted by Legal
Requirements, a third party thereto, would constitute a breach or violation
thereof or impose any obligation or liability on Sellers unless and until such a
consent is obtained, and prior to such time (but only after the Effective Time)
the provisions of Section 5.10.2 shall apply.
2.2 EXCLUDED ASSETS. Notwithstanding the provisions of Section 2.1.1, Sellers
shall not sell, assign, convey, transfer or deliver to Purchaser, and Purchaser
shall not purchase, acquire or take assignment or delivery of, any of the
following assets, properties, Contracts (including Business Leases), accounts,
Risk Assets or rights or any right, title or interest of Sellers therein
(collectively, the "Excluded Assets"), none of which shall be deemed to be
Purchased Assets:
(a) CASH. All cash and cash equivalents owned by Sellers or
their Affiliates for their own account;
(b) RISK ASSETS. All Risk Assets (including without limitation
all Xxxxx Xxxxx and all rights or securities issued in
respect of or in exchange for Xxxxx Xxxxx, such as oil
recovery rights) and all Risk Asset Documents;
(c) TRADEMARKS. All Trademarks that (i) contain the names,
initials or acronyms "UnionBanCal Corporation," "Union
Bank," "Union Bank of California," "Union Bank of
California International," "UBOC," "UBOCI," "xxxx.xxx" or
"xxxx-x.xxx," or any non-English counterpart,
transliteration or translation thereof, owned by, licensed
to or used by Sellers or any of their Affiliates in the
conduct of the Business or (ii) are confusingly similar to
the foregoing, along with all rights or causes of action
for dilution, infringement or misappropriation of, and all
rights to apply for or register any of, the foregoing
rights;
(d) Excluded Books and Records.
(i) Books and Records consisting of Tax records
(including Tax Returns and all notes,
worksheets, files or documents relating
thereto) and all other data and information
with respect to Taxes;
(ii) The minute books from the meetings (or
consents in lieu thereof) of the directors
(including committees thereof) and
shareholders of Sellers and the shareholder
records of Sellers;
(iii) All proprietary or confidential business or
technical information, records and policies
which relate generally to Sellers and their
Affiliates, such as accounting procedures,
instructions, organizational manuals and
strategic plans;
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(iv) All Books and Records prepared in connection
with the sale of the Business, including
offers received from prospective purchasers
and any information relating to such offers;
(v) All call reports of Sellers and the general
ledger of Sellers as of the Effective Time;
(vi) Suspicious activity reports, reports of
investigation of suspicious activity, and
any other reports or documents that indicate
whether a suspicious activity report was or
was not filed in a given case; and
(vii) Books and Records the disclosure of which to
Purchaser is not permitted by Legal
Requirements.
(e) CLAIMS. All claims, causes of action, choses in action,
rights of recovery, defenses or counterclaims and rights of
set-off of any kind (including rights under and pursuant to
all warranties, representations and guarantees made by
suppliers of products, materials or equipment or components
thereof) relating to any Excluded Assets or Excluded
Obligations;
(f) TAX REFUNDS. All of Sellers' claims for and rights to
receive Tax refunds attributable to the Pre-Closing Period;
(g) EMPLOYEE CONTRACTS, ASSETS AND RECORDS. All Employee Plans
or Contracts (including without limitation Contracts of
insurance for employee group medical, dental and life
insurance plans); all assets of Sellers held for the
benefit of Business Employees under any Employee Plan or
Contract (which assets shall be retained by Sellers for the
benefit of Business Employees unless and to the extent
transfer to Purchaser is expressly provided by Section 5.5
or required by applicable Legal Requirements); and all
personnel and labor relations records, in the case of any
of the foregoing relating to Business Employees of Sellers
unless and to the extent transfer to Purchaser is expressly
provided by Section 5.5;
(h) THIS AGREEMENT. All rights of Sellers and their Affiliates
under this Agreement, the Related Agreements and the
Conversion Protocols;
(i) INSURANCE. All rights of Sellers under insurance policies;
(j) LICENSES. All of the Licenses;
(k) EXCLUDED CONTRACTS. All of the Excluded Contracts;
(l) ASSETS RELATING TO EXCLUDED ACCOUNTS. All Excluded Accounts
and all right, title and interest in and to Risk Assets and
other assets arising out of or related to Excluded
Accounts;
(m) STATUTORY DEPOSITS. All Risk Assets (and interest accrued
thereon) of Sellers deposited with any Governmental
Authority in connection with the maintenance of any banking
or similar license, which are set forth as of the
16
date of this Agreement and as Updated as of the Closing on
SCHEDULE 2.2(M);
(n) EXCLUDED LEASES. All of the Excluded Leases;
(o) TANGIBLE PERSONAL PROPERTY. All tangible personal property
(other than Business IT Assets that constitute Purchased
Assets) located on Leased Premises that are subject to
Excluded Leases;
(p) EXCLUDED INTELLECTUAL PROPERTY. All of the Excluded
Business Intellectual Property Contracts and the Excluded
Business IT Assets.
(q) PRIVILEGED INFORMATION. All attorney client communications
with, and attorney work product for, Sellers with respect
to Excluded Assets or Excluded Obligations;
(r) OFAC FUNDS ON HOLD. All funds subject to hold pursuant to
regulations of the Office of Foreign Assets Control of the
U.S. Department of Treasury;
(s) NON-DISCLOSURE AND CONFIDENTIALITY AGREEMENTS. All
non-disclosure and confidentiality agreements entered into
by Sellers or any of their Affiliates in connection with a
potential sale of the Business; and
(t) OPTIONAL ASSETS. All assets described in Section 5.21 and
Section 5.23 unless Purchaser elects, pursuant to Section
5.21 and Section 5.23, to acquire all or any portion of
such assets;
(u) OTHER EXCLUDED ASSETS. All assets, properties, Contracts,
accounts, and other rights set forth on SCHEDULE 2.2(U).
2.3 ASSUMED OBLIGATIONS. At each Closing, Purchaser shall assume the following
liabilities and obligations of Sellers of the Business Unit sold at such Closing
as of the Effective Time for such Closing (collectively, the "Assumed
Obligations"), and from and after the Effective Time, Purchaser shall pay,
perform and discharge all Assumed Obligations as and when such Assumed
Obligations become due and owing:
(a) all liabilities and obligations set forth on or reserved
for in the Final Balance Sheet in the amount and only to
the extent set forth on or reserved for thereon (for the
avoidance of doubt, such liabilities and obligations shall
not include any liabilities for Taxes);
(b) all liabilities and obligations incurred under Contracts
(including Business Leases) that constitute Purchased
Assets of such Business Unit, but in each case excluding
any liabilities or obligations to the extent arising from
or relating to (i) any breach or violation by Sellers of
such Contracts that occurred prior to the applicable
Effective Time, (ii) the ownership or operation of the
Business prior to the Effective Time other than to the
extent set forth on or reserved for in the Final Balance
Sheet, or (iii) any Contract of the type required to be
listed on SCHEDULE 3.8 if such Contract is not listed on
SCHEDULE 3.8 and if the payment of liabilities or
obligations arising under such Contract, in Purchaser's
reasonable judgment, are to any
17
extent not usual or customary in kind or amount in the
market for the goods or services furnished pursuant to such
Contract;
(c) all liabilities and obligations incurred by the Business
Unit with respect to Accepting Employees to the extent such
liabilities and obligations are expressly assumed by
Purchaser pursuant to Section 5.5;
(d) all liabilities and obligations to the extent arising out
of the ownership or operation of the Business Unit from and
after the applicable Effective Time; PROVIDED THAT, except
for the liabilities described in any of Sections 2.3(a)-(c)
and 2.3(e), this Section 2.3(d) shall apply only to
liabilities and obligations that relate to any condition
existing as a result of any action or failure to take
action by any Person following the applicable Effective
Time; and
(e) all Taxes expressly allocated to Purchaser under this
Agreement.
2.4 EXCLUDED OBLIGATIONS. In no event shall Purchaser have any liability
whatsoever for any liabilities and obligations other than the Assumed
Obligations (collectively, the "Excluded Obligations"). For avoidance of doubt,
(i) U. S. Deposits shall constitute Excluded Obligations and (ii) all
liabilities and obligations to the extent arising out of the ownership or
operation of a Business Unit prior to the applicable Effective Time, including
liabilities or obligations that relate to any condition existing as a result of
any action or failure to take action by any Person prior to the Effective Time,
except for liabilities and obligations described in any of Sections 2.3(a)-(c)
or 2.3(e), shall constitute Excluded Obligations.
2.5 CLOSING BALANCE SHEET. Not later than the second Business Day prior to each
Closing Date, UBOC will deliver to Purchaser a balance sheet for the applicable
Business Unit(s) involved in such Closing as of the last day of the last
calendar month ended prior to such second Business Day that will be prepared
from the Sellers' financial statements as of such time (which financial
statements will be prepared in accordance with the Sellers' Financial Statements
and subject to the qualifications, assumptions and adjustments set forth on
SCHEDULE 3.5.2) and which will be adjusted to include only assets and
obligations that would be Purchased Assets or Assumed Obligations, as the case
may be, from such Sellers' financial statements as of such Closing Date (the
"CLOSING BALANCE SHEET"). Each of the Purchased Assets and Assumed Obligations
for which Sellers' financial statements will be adjusted in connection with the
preparation of the Closing Balance Sheet will be valued in accordance with GAAP
and the Books and Records and consistently with past practice. Except for the
exclusions and adjustments described in this Section 2.5, the Closing Balance
Sheet will not reflect any modifications or adjustments to such Sellers'
financial statements.
2.6 CONSIDERATION FOR PURCHASE OF THE PURCHASED ASSETS.
2.6.1 CONSIDERATION AMOUNT AT PRINCIPAL CLOSING. The cash purchase
price for the Purchased Assets payable by Purchaser at the Principal Closing
shall be equal to the sum of subparagraphs (a) and (b) below:
(a) the Book Value of the Purchased Assets of the Principal
Business Unit as reflected on the Closing Balance Sheet
reduced by the Book Value of the Assumed Obligations of the
Principal Business Unit as reflected on the Closing Balance
Sheet; and
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(b) $245,000,000, representing goodwill associated with the
Business (the "Base Purchase Price").
2.6.2 CONSIDERATION AMOUNT AT SUBSEQUENT CLOSINGS. The cash purchase
price for the Purchased Assets payable by Purchaser at each Closing, other than
the Principal Closing, shall be equal to the Book Value of the Purchased Assets
of the Business Unit subject to such Closing as reflected on the applicable
Closing Balance Sheet reduced by the Book Value of the Assumed Obligations of
the Business Unit subject to such Closing as reflected on such Closing Balance
Sheet.
2.6.3 CLOSING CASH CONSIDERATION AMOUNT. The applicable cash purchase
price paid pursuant to Sections 2.6.1 and 2.6.2 above shall be referred to
herein, with respect to each Closing, as the "Closing Cash Consideration
Amount."
2.7 THE CLOSING.
2.7.1 CLOSING PROCEDURES. It is contemplated that the transactions
contemplated hereby shall be consummated in one or more Closings as set forth
herein. The first Closing shall be the Principal Closing, and no other Closing
shall occur until the Principal Closing shall have been consummated. To the
extent that the conditions for a Closing of one or more Business Units other
than the Principal Business Unit can be satisfied at the time of the Principal
Closing such other Business Units shall be sold (and such other Closings shall
be consummated) concurrently with the Principal Closing. Subject to the terms
and conditions of this Agreement, each respective Closing of the purchase and
sale of each Business Unit under this Agreement (the "Closing") shall take place
at 9:00 a.m., Pacific Time, on the applicable Closing Date at the offices of
Xxxxxxxx & Xxxxxxxx LLP, 000 Xxxxxx Xxxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx 00000.
With respect to each Business Unit, the "Closing Date" shall be the third
Business Day (or such earlier date designated by the Parties) after all of the
conditions set forth in Articles VI and VII with respect to such Business Unit
have been satisfied or waived, or such other date as the Parties may agree;
PROVIDED, HOWEVER, that the Principal Closing shall occur at 9:00 am., Pacific
Time, on October 6, 2005, subject to the satisfaction or waiver of all of the
conditions set forth in Articles VI and VII with respect to the Closing of the
Principal Business Unit. Each Closing shall be effective as of (i) 12:01 a.m.,
Pacific Time, with respect to the Principal Closing, and (ii) 12:01 a.m. local
time at the location of the applicable Business Unit (for such purposes, the
Principal Business Unit shall be deemed to be located in New York, New York),
with respect to each other Closing (the "Effective Time").
2.7.2 REFERENCES TO CLOSING AND EFFECTIVE TIME. Except as otherwise
provided herein, or as the context may otherwise require, any provision of this
Agreement relating to or referencing a "Closing," a "Closing Date," "Pre-Closing
Period," "Post-Closing Period" and "Effective Time" shall be deemed to reference
the Closing, Closing Date, Pre-Closing Period, Post-Closing Period and Effective
Time, as applicable, with respect to the acquisition by Purchaser of each
specific Business Unit and shall be deemed to relate to the Business, or portion
thereof, comprehended within such Closing. References to "Purchased Assets"
(including references to applicable "Business Leases" and "Computer Programs")
herein shall mean those Purchased Assets assigned and transferred at each
Closing with respect to the Business Unit that is the subject of such Closing.
Except as otherwise expressly provided in this Agreement or in any Related
Agreement, all actions required to be taken at each respective Closing shall be
deemed to have occurred simultaneously at such Closing, and all documents
delivered at each Closing shall be deemed to have been delivered simultaneously
on the respective Closing Date.
2.7.3 OUTSIDE PRINCIPAL CLOSING DATE. With respect to the Principal
Business Unit, the Parties agree to use reasonable best efforts to satisfy the
conditions set forth in Sections 6.1 and 7.1 that are within their respective
control as promptly as possible and in no event later than November 30, 2005 (or
such later date as may be established pursuant to the proviso to this sentence);
PROVIDED, HOWEVER, that if the Principal
19
Closing Date shall not have taken place on or before November 30, 2005, such
date may be extended to a date specified by either Party that is not later than
March 31, 2006 by such Party giving written notice to the other Party at any
time during the month of November, 2005 if such first Party reasonably believes
that the conditions to Principal Closing in Sections 6.1 and 7.1 of this
Agreement will be satisfied on or before such extended date (such date, as it
may be extended, the "Outside Principal Closing Date"). Notwithstanding any
other provision of this Agreement, if the Principal Closing has not occurred by
the Outside Principal Closing Date, then Sellers and Purchaser shall thereafter
have no duty to use any efforts to effectuate such Closing or to perform any of
their respective obligations with respect to any assets or liabilities of such
Business Unit pursuant to the second sentence of Section 5.10.2, and either
Party may terminate this Agreement upon satisfaction of the conditions set forth
in Section 9.1(e).
2.7.4 OUTSIDE BUSINESS UNIT CLOSING DATE. With respect to Business
Units other than the Principal Business Unit, the Parties agree to use
reasonable best efforts to satisfy the conditions set forth in Sections 6.2 and
7.2 that are within their respective control as promptly as possible and in no
event later than March 31, 2006 (the "Outside Business Unit Closing Date").
Notwithstanding any other provision of this Agreement to the contrary, if, after
the Principal Closing Date, any Closing with respect to any such other Business
Unit has not been consummated on or before the Outside Business Unit Closing
Date:
(a) Sellers and Purchaser shall thereafter have no duty to use
any efforts to effectuate such Closing;
(b) Sellers and Purchaser shall cooperate to make arrangements
within thirty (30) days after the Outside Business Unit
Closing Date to transfer to Purchaser, and Purchaser shall
assume, such of the Purchased Assets and Assumed
Obligations associated with such Business Unit(s), as can
then be transferred or assumed in accordance with
applicable Legal Requirements on the same economic terms
and conditions (including financial terms), and subject to
the same procedures, as would prevail if the Closing for
such Business Units(s) had taken place;
(c) Sellers and Purchaser shall cooperate to make arrangements
within thirty (30) days after the Outside Business Unit
Closing Date to enable Purchaser to hire (and/or lease
pursuant to the Business Employee Leasing Agreement) such
Business Employees (as chosen by Purchaser in its sole
discretion) as are associated with such Business Unit(s) as
can then be transferred or leased in accordance with
applicable Legal Requirements on the same terms and
conditions (and otherwise in accordance with the Conversion
Protocols) as would prevail under Section 5.5 if the
Closing for such Business Unit(s) had taken place;
(d) subject to the completion of the transfers and assumptions
contemplated by subparagraphs (b) and (c) above, Sellers
shall, at their own cost and expense, close and wind-up the
Business Units (including the offices that constitute such
Business Units) with respect to which such Closing has not
occurred, giving due consideration to applicable Legal
Requirements; PROVIDED, HOWEVER, that Purchaser shall
assume any and all costs associated with terminating or
otherwise disposing of any Business Leases that are not
Excluded Assets; and
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(e) the Final Cash Consideration Amount paid in connection with
Closings consummated prior to the time of such termination
shall be fully earned and non-refundable.
2.7.5 DELIVERABLES AT EACH CLOSING. At each Closing (including the
Principal Closing), the Parties will deliver to one another the following funds,
documents and such other Contracts, instruments and documents as are required
under this Agreement to be executed and delivered by the Parties:
(a) A wire transfer to UBOC from Purchaser of the applicable
Closing Cash Consideration Amount in immediately available
funds to the account designated by UBOC;
(b) Written documentation evidencing Sellers' Approvals for the
Business Unit associated with such Closing;
(c) Written documentation evidencing Purchaser's Approvals for
the Business Unit associated with such Closing;
(d) The Assumption Agreement in the form of EXHIBIT A, pursuant
to which Purchaser shall assume the Assumed Obligations of
the Business Unit associated with such Closing (the
"Assumption Agreement");
(e) The Xxxx of Sale in the form of EXHIBIT B, pursuant to
which Sellers shall transfer to Purchaser the Purchased
Assets of the Business Unit associated with such Closing
(the "Xxxx of Sale");
(f) Assignments of the Business Leases included in the
Purchased Assets applicable to such Business Unit, subject
to obtaining consents to such assignments;
(g) The delivery of Purchased Assets associated with such
Business Unit capable of being transferred by delivery; and
(h) Such other instruments of transfer, assumptions, filings or
documents, in form and substance reasonably satisfactory to
Purchaser and Sellers, as may be reasonably required to
give effect to this Agreement.
2.7.6 DELIVERABLES AT THE PRINCIPAL CLOSING. In addition to the
deliverables required under Section 2.7.5, at the Principal Closing, the Parties
will deliver to one another the following instruments and documents:
(a) The Master Risk Participation Agreement in the form of
EXHIBIT C (subject to Purchaser providing Schedule A
thereto pursuant to Section 5.22.1) between UBOC and
Purchaser (the "Risk Participation Agreement");
(b) The Business Employee Leasing Agreement in the form of
EXHIBIT D, pursuant to which Purchaser and Sellers shall
lease employees to each other as more particularly set
forth therein (the "Business Employee Leasing Agreement");
21
(c) The Trademark and Trade Name License Agreement in the form
of EXHIBIT E between Sellers and Purchaser (the "Trademark
and Trade Name License Agreement"); and
(d) Written assignments, in forms to be mutually agreed by the
Parties, of the Intellectual Property Rights being assigned
to Purchaser in accordance with this Agreement or any
Related Agreement.
2.8 TRUE-UP.
2.8.1 FINAL BALANCE SHEET. Within thirty (30) days after the applicable
Closing Date, Sellers shall prepare and deliver to Purchaser a balance sheet for
the Business Unit, as of the Effective Time (the "Final Balance Sheet"). The
Final Balance Sheet will be substantially in the format of (and showing the same
categories of adjustments calculated consistently with) the Closing Balance
Sheet. The data in the Final Balance Sheet will be prepared using the same
accounting policies as used in the determination of the Closing Balance Sheet.
At the time Sellers deliver the Final Balance Sheet, Sellers will set forth the
computation of the Final Cash Consideration Amount and the True-up and provide
to Purchaser the work papers and records necessary for Purchaser to validate the
accuracy of the Final Balance Sheet and the computation of the Final Cash
Consideration Amount and the True-up, and will otherwise make its financial
and/or accounting representatives available to representatives of Purchaser to
respond to any questions or inquiries regarding the same. The "Final Cash
Consideration Amount" means (i) with respect to the Principal Closing for the
Principal Business Unit the sum of: (x) the Book Value of the Purchased Assets
as reflected on the Final Balance Sheet for the Principal Closing, reduced by
the Book Value of the liabilities of the Principal Business Unit as reflected on
the Final Balance Sheet for the Principal Closing and (y) $245,000,000 and (ii)
with respect to each other Closing other than the Principal Closing, the Book
Value of the Purchased Assets as reflected on the Final Balance Sheet for such
Closing, reduced by the Book Value of the liabilities of the Business Unit as
reflected on Final Balance Sheet for such Closing.
2.8.2 MUTUAL RIGHT OF REVIEW. Each Party and its representatives shall
have the right to review all of the other Party's work papers and any other
relevant financial and accounting records to the extent relevant to the Final
Balance Sheet or the True-up.
2.8.3 DISPUTE RESOLUTION. If Purchaser disagrees with any items on the
Final Balance Sheet or with the computation of the True-up, Purchaser shall give
written notice to UBOC of such disagreement, stating such objection and a
reasonably detailed explanation of the reasons therefor. Such notice shall be
delivered on or before the 30th day after delivery of the Final Balance Sheet to
Purchaser. Within 15 days following receipt of such notice, UBOC and Purchaser
shall submit to the Accounting Firm and to each other all of the material
written information upon which such Party's claims regarding the Final Balance
Sheet and the True-up is based. The Accounting Firm may, but shall not be
required to, request a meeting of UBOC and Purchaser and their representatives
to discuss UBOC's and Purchaser's claims. The Accounting Firm may request
additional information from UBOC and/or Purchaser, and copies of any such
requested information shall also be provided to the other Party to the dispute.
All materials provided by UBOC and Purchaser to the Accounting Firm are referred
to herein as the "Accountants Dispute Work Papers." Both UBOC and Purchaser and
their representatives shall have the right to review all of either UBOC's or
Purchaser's Accountants Dispute Work Papers, as the case may be. Within thirty
(30) days after the Accounting Firm' receipt of all information (including any
information requested by the Accounting Firm from UBOC or Purchaser), the
Accounting Firm shall provide as an expert and not as an arbitrator its written
decision on the dispute between UBOC and Purchaser and shall issue the Final
Balance Sheet in a form consistent with its decision (which shall be deemed to
be the Final Balance Sheet for all purposes under this Agreement) and shall
compute the True-up based thereon. The scope of the review and determination of
the Accounting Firm with respect to the Final Balance Sheet shall be limited to
the compliance of the Final
22
Balance Sheet with the terms of Sections 2.8.1. The decision of the Accounting
Firm under this Section 2.8.3 shall be final and binding on UBOC and Purchaser.
The professional fees of the Accounting Firm shall be shared equally between the
UBOC and Purchaser. If Purchaser does not timely dispute the Final Balance Sheet
or the computation of the True-up in accordance with this Section, the Final
Balance Sheet prepared by the UBOC shall be deemed to be the Final Balance Sheet
and the True-up as computed by UBOC shall be deemed to be the True-up.
2.8.4 PAYMENT OF TRUE-UP. For each Business Unit, the "True-up" shall
be equal to the amount by which the Final Cash Consideration Amount exceeds (or
is less than) the Closing Cash Consideration Amount. Within five Business Days
after the earlier of (x) if Purchaser does not timely dispute the Final Balance
Sheet or the computation of the True-up on or before the thirtieth (30th) day
after the delivery of the Final Balance Sheet under Section 2.8.1, such
thirtieth (30th) day and (y) the issuance of the Final Balance Sheet by the
Accounting Firm under Section 2.8.3, a settlement between UBOC and Purchaser
will be made by wire transfer of immediately available funds as follows:
(i) Purchaser shall pay to UBOC the
amount by which the Final Cash
Consideration Amount exceeds the
Closing Cash Consideration Amount;
or
(ii) UBOC shall pay to Purchaser the
amount by which the Closing Cash
Consideration Amount exceeds the
Final Cash Consideration Amount.
2.8.5 INTEREST. Any amount due pursuant to Section 2.8.4 shall include
interest thereon from the applicable Closing Date through the payment date
calculated at the Contract Interest Rate determined as of the Closing Date.
2.9 CONTINGENT PAYMENT.
2.9.1 CALCULATION OF CONVERSION PERCENTAGE. Within twenty (20) days
after the Conversion Measurement Month (the "Conversion Percentage Calculation
Date"), Purchaser shall prepare and deliver to UBOC a calculation of the
Conversion Percentage. At the time Purchaser delivers the Conversion Percentage
calculation to UBOC, Purchaser will provide to UBOC the work papers and records
necessary for UBOC to validate the accuracy of the calculations regarding the
Conversion Percentage, and will otherwise make its financial and/or accounting
representatives available to representatives of UBOC to respond to any questions
or inquiries regarding the same. Each Party will have the right to review the
other's work papers and any other relevant financial and accounting records
relevant to the calculation of the Conversion Percentage. If UBOC disagrees with
Purchaser's calculation of the Conversion Percentage, then the Parties agree to
follow the dispute resolution procedures set forth in Section 2.8.3.
2.9.2 PAYMENT OF CONTINGENT PAYMENT. On the earlier of (x) if UBOC does
not timely dispute Purchaser's calculation of the Conversion Percentage, the
Conversion Percentage Calculation Date or (y) the issuance of the final
Conversion Percentage by the Accounting Firm pursuant to Section 2.9.1 (the
"Contingent Payment Date"), Purchaser shall pay to UBOC by wire transfer of
immediately available funds the contingent payment (if any) set forth in
SCHEDULE 2.9.2 (such applicable payment, the "Contingent Payment") based on the
applicable Conversion Percentage (as finally determined in accordance with the
procedures set forth in this Section 2.9) set forth in SCHEDULE 2.9.2.
2.10 DOWNWARD ADJUSTMENT. The Base Purchase Price shall be adjusted
downward (the "Downward Adjustment") based on the amount of downward adjustment,
if any, applicable to the Final Retention Percentage as reflected on SCHEDULE
2.10; provided that if the Final Retention Percentage is
23
calculated to be a percentage otherwise requiring a Downward Adjustment to be
made, the Parties shall cooperate in good faith to determine the impact of any
holidays during the Retention Period and to make an appropriate adjustment to
the Initial Retention Percentage. UBOC shall pay to the Purchaser the amount of
the Downward Adjustment, if any, on the Contingent Payment Date.
2.11 ALLOCATION OF CONSIDERATION. The Parties agree to allocate the
Closing Cash Consideration Amount, the Final Cash Consideration Amount, the
Contingent Payment and other consideration payable hereunder (as possibly
adjusted pursuant to Section 2.10 with respect to the Principal Closing) and
Assumed Obligations among the Purchased Assets as set forth on SCHEDULE 2.11. If
the aggregate consideration paid by Purchaser to the Sellers under this
Agreement is more or less than the value ascribed to the Purchased Assets as set
forth on SCHEDULE 2.11, the difference shall ratably increase or decrease all of
the amounts set forth under the heading "Class VII Assets" on SCHEDULE 2.11 and
SCHEDULE 2.11 shall be deemed to reflect such adjustment. The allocation of the
Purchase Price and Assumed Obligations set forth on SCHEDULE 2.11 is intended to
comply with the requirements of Section 1060 of the Code as well as similar
provisions of applicable state and non-U.S. law. The Parties covenant and agree
that (i) such allocation was determined in an arm's length negotiation among
unaffiliated Persons, and none of the Parties shall take a position on any Tax
Return (including IRS Form 8594), before any Tax Authority or in any judicial
proceeding that is in any way inconsistent with such allocation without the
written consent of the other parties to this Agreement or unless specifically
required pursuant to a determination by an applicable Tax Authority; (ii) they
shall cooperate with each other in connection with the preparation, execution
and filing of all Tax Returns related to such allocation; and (iii) they shall
promptly advise each other regarding the existence of any tax audit, controversy
or litigation related to such allocation.
2.12 SET-OFF. Except with respect to the payment of the Closing Cash
Consideration Amount due at the Principal Closing (which amount shall be paid by
Purchaser in full, without set off, recoupment or counterclaim), the Parties
shall have the right to set off against the payment of any other Closing Cash
Consideration Amount, the True-Up, the Contingent Payment and the Downward
Adjustment any claim that the payor may have against the payee in accordance
with the following provisions:
(a) If Sellers or Purchaser, as the case may be, elects to
exercise their or its set off rights hereunder, such Party shall give the other
Party written notice thereof, which notice shall include the amount proposed to
be set off and shall set forth, in reasonable detail, the basis of the claim and
the circumstances giving rise to the alleged entitlement to such set off.
(b) The Parties shall submit any dispute arising out of the
set off to the dispute resolution procedures set forth in Section 11.5 below.
(c) To the extent that there is a final determination in a
proceeding brought pursuant to this Agreement that a Party making a set off was
not entitled to recover from the other Party on the claim as to which the set
off was taken, such first Party shall promptly pay to the other Party the amount
so determined to have been incorrectly set off, plus interest calculated from
the date such payment was due until the date payment for such amount is made, at
a per annum rate equal to the Contract Interest Rate.
2.13 TAX TREATMENT OF CONTINGENT PAYMENTS AND DOWNWARD ADJUSTMENTS. If
(i) Purchaser pays UBOC a Contingent Payment or (ii) UBOC pays Purchaser for a
Downward Adjustment, in either case, each of UBOC and Purchaser agree that for
United States federal income tax purposes, a portion of such Contingent Payment
or Downward Adjustment will be treated as interest income (in the case of the
payee) and as an interest expense (in the case of the payor), as determined by
the Parties in accordance with Code Section 483 and the regulations thereunder.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLERS
Sellers hereby represent and warrant as of the date hereof and as of
each Closing (to the extent reasonably applicable to such Closing and except to
the extent that such representation and warranty is made as of a specific date,
in which case such representation and warranty shall be as of such specific
date) that:
3.1 ORGANIZATION OF UBOC. UBOC is a national banking association, validly
existing and in good standing under the federal laws of the United States. UBOC
has full corporate power and authority to conduct the portion of the Business as
it is now being conducted. As of the date of this Agreement, UBOC is duly
licensed to conduct the portion of the Business that it conducts through
branches and representative offices in the jurisdictions set forth on SCHEDULE
3.1, and such jurisdictions constitute each jurisdiction in which UBOC is
required to be so licensed as a result of the nature of the portion of the
Business it conducts or the ownership or use of property associated with its
portion of the Business.
3.2 ORGANIZATION OF UBOCI. UBOCI is a corporation duly organized and validly
existing and in good standing under Section 25A of the Federal Reserve Act and
has full corporate power and authority to conduct the portion of the Business as
it is now being conducted by UBOCI. As of the date of this Agreement, UBOCI is
duly licensed to conduct the portion of the Business that it conducts at its
principal office in New York, and such jurisdiction constitutes the only
jurisdiction in which UBOCI is required to be so licensed as a result of the
nature of the portion of the Business that it conducts or the ownership or use
of property associated with its portion of the Business.
3.3 ORGANIZATION OF LIMITADA. Limitada is a limited liability company (SOCIEDADE
LIMITADA) duly organized and validly existing and in good standing under the
laws of Brazil and has full corporate power and authority to conduct the portion
of the Business as it is now being conducted by Limitada. As of the date of this
Agreement, Limitada is duly licensed to conduct the portion of the Business that
it conducts at its principal office in Sao Paulo, and such jurisdiction
constitutes the only jurisdiction in which Limitada is required to be so
licensed as a result of the nature of the portion of the Business that it
conducts or the ownership or use of property associated with its portion of the
Business.
3.4 ENFORCEABILITY. Sellers have full corporate power and authority to execute
and to deliver this Agreement and the Related Agreements to which they are a
party, and to carry out the transactions contemplated herein and therein.
Sellers have taken all necessary corporate action to authorize their execution
and performance of this Agreement and the Related Agreements to which they are a
party. This Agreement is, and the Related Agreements upon execution and delivery
by Sellers will be, the valid and binding obligation of Sellers, enforceable
against Sellers in accordance with their terms under the laws of California,
except as such enforceability may be limited by laws affecting the rights and
remedies of creditors and applicable principles of equity (the "Enforceability
Exceptions"). The execution, delivery and performance of this Agreement and the
Related Agreements by Sellers will not, with or without the giving of notice or
passage of time or both, (i) conflict with, result in a default, right to
accelerate or loss of rights under, or result in the creation of any lien,
charge or encumbrance pursuant to any provision of any mortgage, deed of trust,
lease, license agreement or other agreement to which Sellers are a party or by
which they are bound or affected, (ii) conflict with or result in a default
under any provision of the articles of incorporation or by-laws of Sellers, or
any effective resolution of the directors or stockholders of Sellers, or (iii),
subject to the receipt of Sellers' Approvals, conflict with or result in a
violation of any Legal Requirement applicable to Sellers.
3.5 FINANCIAL STATEMENTS.
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3.5.1 DELIVERY OF FINANCIAL STATEMENTS. UBOC has delivered to Purchaser
the following financial statements: (i) the unaudited PRO FORMA consolidated
balance sheets of the International Banking Group based on UBOC's General Ledger
Report 310 as of December 31, 2003, December 31, 2004 and June 30, 2005; and
(ii) the unaudited PRO FORMA consolidated statements of income of the
International Banking Group based on UBOC's OFSA Internal Management Reporting
System for the fiscal years ended December 31, 2003 and 2004, and for the six
months ended June 30, 2005 (collectively, "Sellers' Financial Statements").
3.5.2 SELLERS' FINANCIAL STATEMENTS. Except as expressly provided in,
and subject to the qualifications, assumptions and adjustments set forth, on
SCHEDULE 3.5.2, Sellers' Financial Statements fairly present in all material
respects the financial condition and results of operations of the International
Banking Group as a whole at the dates thereof and for the periods referred to
therein, all in accordance with GAAP subject to the qualifications, assumptions
and adjustments set forth on SCHEDULE 3.5.2; PROVIDED, HOWEVER, that Sellers'
Financial Statements do not contain statements of changes in stockholders'
equity and cash flow and footnote disclosure and are subject to normal recurring
year-end adjustments that are not, individually or in the aggregate, material to
the financial condition or results of operation of the Business or to any of
Sellers' Financial Statements. Subject to the qualifications, assumptions and
adjustments set forth on SCHEDULE 3.5.2, all of the liabilities of a nature that
are required to be included in a consolidated balance sheet of the International
Banking Group prepared in accordance with GAAP or in the notes thereto have been
reflected or disclosed in Sellers' Financial Statements as of June 30, 2005,
except for liabilities (contingent or otherwise) (a) incurred since June 30,
2005 in the ordinary course of business, (b) incurred in connection with the
transactions contemplated by this Agreement, or (c) as would not reasonably be
likely to be, individually or in the aggregate, material to the International
Banking Group.
3.5.3 BASELINE SELLERS ADCR. The Baseline Sellers ADCR shall be a true
and correct statement of the ADCR of the Business generated during the Baseline
Period and shall be derived from the daily internal performance reports used by
the management in the operation of the Business for the Baseline Period, which
reports were prepared consistently with past practice.
3.6 ASSETS.
3.6.1 CUSTOMERS. SCHEDULE 3.6.1 is a true and complete list of all
Business accounts of Customers as of the date hereof, and SCHEDULE 3.6.1 as
Updated as of the Closing will be a true and complete list of all Customers as
of the Closing. Except as set forth on SCHEDULE 3.18, Sellers have administered
and processed all Customers' transactions in accordance with the applicable
Legal Requirements and Sellers' customary business practices in all material
respects. Except for Risk Assets, Contingent Risk Liabilities, term-deposits,
and other assets or liabilities created out of the Sellers' relationship with
Customers, all of which terminate in accordance with the terms of the Risk Asset
Documents or other Contracts governing such assets or liabilities, the services
provided by the Sellers to the Customers in connection with the Business
(including demand-deposits maintained by Customers with Sellers) and other
aspects of the Business relationship between Customers and the Sellers are
terminable by any party thereto at any time without liability or obligation to
any Person. As of the date hereof, to the Knowledge of Sellers, no Customer has
given actual notice of its intention to cease being a Customer. The Books and
Records included in the Purchased Assets with respect to any Customer are
complete in all material respects.
3.6.2 RISK ASSETS. Except for those Risk Assets disposed of or
liquidated in the ordinary course since June 30, 2005, each Risk Asset of the
Business as of June 30, 2005, and each Risk Asset of the Business originated or
acquired after June 30, 2005, is or will be as of the Closing evidenced by
appropriate and sufficient documentation and constitutes the legal, valid and
binding obligation of the obligor named therein, subject to the Enforceability
Exceptions. All such Risk Assets are as of the date hereof, and will be as of
such Closing (other than Risk Assets since disposed of or paid off in the
ordinary course), free and clear of any Encumbrances; PROVIDED THAT Risk Assets
other than loans, letters of credit, bankers' acceptances and
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placements may be subject to Permitted Encumbrances. SCHEDULE 3.6.2 sets forth
as of July 31, 2005, and SCHEDULE 3.6.2 as Updated as of the Closing will set
forth as of the latest completed fiscal quarter prior to the Closing associated
with each Business Unit, a complete list of all Customers that maintain Risk
Assets (including Contingent Risk Assets) with the Business Unit sold at such
Closing and the balances therefor as of such dates.
3.6.3 CONTINGENT RISK ASSETS AND CONTINGENT RISK LIABILITIES. SCHEDULE
3.6.2 sets forth as of July 31, 2005 the Contingent Risk Assets and Contingent
Risk Liabilities of the Business, and SCHEDULE 3.6.2 as Updated as of the
Principal Closing will set forth, as of the last day of the calendar month
preceding the Principal Closing, the Contingent Risk Assets and Contingent Risk
Liabilities of the Business.
3.6.4 OWNED REAL PROPERTY. Sellers do not own any real property used in
connection with the Business.
3.6.5 LEASED REAL PROPERTY. SCHEDULE 3.6.5(A) identifies all Business
Leases covering real property located outside of the United States as of the
date hereof and as of the Closing (as Updated as of the Closing) and states the
date and parties to the applicable lease or sublease and the location of the
premises covered thereby. Except as set forth on SCHEDULE 3.6.5(B) as of the
date hereof and as of the Closing (as Updated as of the Closing), there are no
material defaults or material breaches under the Business Leases that constitute
Purchased Assets, and no event has occurred which, with the giving of notice
would constitute a material breach by Sellers of or a material default by
Sellers under any of such Business Leases, provided that as to defaults and
breaches by parties to such Business Leases other than Sellers or any of its
Affiliates, the only defaults and breaches required to be disclosed on SCHEDULE
3.6.5(B) are those of which Sellers have Knowledge. Each of the Business Leases
that constitute Purchased Assets is enforceable by and against Sellers, as
applicable, in accordance with its terms, subject to the Enforceability
Exceptions. Sellers, as applicable, have valid leasehold interests in the
premises covered by such Business Leases (the "Leased Premises"), and such
Business Leases are free and clear of any Encumbrance, other than Permitted
Encumbrances. To Sellers' Knowledge, no condition in the Leased Premises exists
that could give rise to any suit, claim, action or proceeding by any Person or
Governmental Authority against Sellers or Purchaser as a result of violations of
any Environmental Laws. To Sellers' Knowledge, there currently does not exist on
or in the Leased Premises or on or beneath the real property of which the Leased
Premises are a part any Hazardous Materials in material violation of or
non-compliance with any Environmental Laws. Neither Sellers nor their Affiliates
have received any written notice of any such violation from any Governmental
Authority.
3.6.6 PERSONAL TANGIBLE PROPERTY. SCHEDULE 3.6.6(A) sets forth as of
June 30, 2005 a complete list of tangible personal property (other than cash)
that constitutes Purchased Assets as if such date were the applicable Closing
Date, together with a description of the premises at which such tangible
personal property is located. Except as set forth on SCHEDULE 3.6.6(B) as of the
date hereof and as of the Closing (as Updated as of the Closing), Sellers have
good and marketable title to all of their respective Purchased Assets
constituting tangible personal property reflected as Purchased Assets in the
Sellers' Financial Statements and to such Purchased Assets acquired after June
30, 2005 (other than assets since disposed of in the ordinary course) free and
clear of all Encumbrances other than Permitted Encumbrances, and upon each
Closing, Sellers shall transfer good and marketable title to their respective
Purchased Assets constituting tangible personal property to Purchaser free and
clear of Encumbrances other than Permitted Encumbrances.
3.6.7 BUSINESS AND PURCHASED ASSETS. All of the Purchased Assets are
owned or leased, as the case may be, by the respective Sellers and no Affiliate
of Sellers owns any Purchased Assets. The Business is conducted by Sellers, and
no Affiliate of Sellers conducts the Business. All of the Business Employees are
employees of the respective Sellers, and no Affiliate of Sellers employs any of
the Business Employees.
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3.7 LITIGATION. Except as set forth on SCHEDULE 3.7 as of the date hereof and as
of the Closing (as Updated as of the Closing), there is no litigation,
arbitration or other proceeding or, to Sellers' Knowledge, investigation, of any
court or other Governmental Authority pending or, to Sellers' Knowledge,
threatened against Sellers in connection with the Business seeking or asserting
(i) damages in excess of $50,000, (ii) injunctive relief or other mandatory
relief that would restrict the business operations of the Business (including
the performance by the Business of any obligations arising in connection with
any Risk Asset), (iii) to revoke any License, or (iv) an unsafe or unsound
banking practice or a material violation of any Legal Requirement. Except as set
forth on SCHEDULE 3.7 as of the date hereof and as of the Closing (as Updated as
of the Closing), no Seller is a party to and is not bound by any order,
judgment, injunction, decree or settlement agreement under which it may have
continuing obligations with respect to the Business and which may restrict or
affect the current operations of the Business. There is not pending any action
against Sellers that may reasonably be expected to have the effect of
preventing, delaying or making unlawful the consummation of the transactions
contemplated by this Agreement and the Related Agreements. To Sellers'
Knowledge, no such proceedings have been threatened.
3.8 CONTRACTS. Except as provided in this Section 3.8, SCHEDULE 3.8(A) as of the
date hereof and as of the Closing (as Updated as of the Closing) sets forth all
of the following Contracts with respect to the Business (specifying where
applicable the Business Unit to which such Contract principally relates):
(a) Contracts the performance of which is expected to involve
consideration payable subsequent to the date of this
Agreement in excess of $100,000 in the twelve (12) months
from and after the Principal Closing;
(b) Contracts which restrict in any material respect or contain
material limitations on the ability of Sellers to freely
conduct any line of business;
(c) Contracts pursuant to which any Encumbrance, other than
Permitted Encumbrances, is placed or imposed on any
Purchased Assets;
(d) material Business Intellectual Property Contracts;
(e) Contracts that constitute Purchased Assets that relate to
the acquisition or disposition, outside of the ordinary
course of business consistent with past practice, of any
business (whether by merger, sale of stock, sale of assets
or otherwise);
(f) Contracts relating to indebtedness for borrowed money or
the deferred purchase price of property (in either case,
whether incurred, assumed, guaranteed or secured by any
asset) entered into in connection with the Business, except
any such agreement with an aggregate outstanding principal
amount not exceeding $100,000;
(g) partnership or joint venture agreements of Sellers relating
to the Business; or
(h) any other material Contract relating to the Business not
terminable upon sixty (60) days' written notice.
SCHEDULE 3.8(A) excludes (i) Employee Plans or Contracts, (ii) Risk Asset
Documents and Contracts evidencing or memorializing deposits or other
liabilities reflected on Sellers' Financial Statements or reflecting Contingent
Risk Liabilities, (iii) Business Leases and (iv) Contracts constituting Excluded
Assets. True and
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correct copies of the written Contracts set forth on SCHEDULE 3.8(A) have been
provided to Purchaser and accurate written descriptions of any oral Contracts
set forth on SCHEDULE 3.8(A) have been provided to Purchaser. Except as set
forth on SCHEDULE 3.8(B) as of the date hereof and as of the Closing (as Updated
as of the Closing), no Seller is in default under said Contracts, and, to
Sellers' Knowledge, no third parties are in default under said Contracts. The
Contracts set forth on SCHEDULE 3.8(A) (except for oral Contracts to the extent
subject to the statute of frauds) are enforceable by Sellers, as applicable,
and, to Seller's Knowledge, the other parties thereto, in accordance with their
terms, subject to the Enforceability Exceptions.
3.9 Intellectual Property and IT Assets.
3.9.1 SCHEDULE 3.9.1 sets forth as of the date hereof and as of the
Closing (as Updated as of the Closing) a true and complete list of all
Registered Transferred Owned Business Intellectual Property, indicating for
each, as applicable, the owner, jurisdiction and registration number (or
application number).
3.9.2 Sellers (i) own all right, title and interest in and to the
Transferred Owned Business Intellectual Property, free and clear of all
Encumbrances and (ii) have sufficient, valid and enforceable rights to use the
Transferred Business Intellectual Property in connection with the operation of
the Business, all of which rights shall survive unchanged the consummation of
the transactions contemplated by this Agreement.
3.9.3 The Transferred Owned Business Intellectual Property and, to
Sellers' Knowledge, the Transferred Licensed Business Intellectual Property, are
(i) subsisting, valid, and enforceable and have not been adjudged invalid or
unenforceable in whole or in part, (ii) currently in compliance with all formal
legal requirements necessary to maintain the validity and enforceability
thereof, and (iii) not subject to any outstanding order, judgment, decree or
Contract materially adversely affecting Sellers' use thereof or rights thereto.
3.9.4 The use of the Transferred Owned Business Intellectual Property
and, to Sellers' Knowledge, the use of the Transferred Licensed Business
Intellectual Property, in connection with the operation of the Business does not
and has not for the past five (5) years infringed upon, misappropriated,
diluted, violated or otherwise interfered or conflicted with the Intellectual
Property Rights or rights of publicity or privacy of any third party. Except as
listed on SCHEDULE 3.9.4 as of the date hereof and as of the Closing (as Updated
as of the Closing), no actions, claims, proceedings or investigations are
pending or have been asserted or threatened in writing provided to Sellers (or,
to Sellers' Knowledge, otherwise asserted or threatened) against Sellers, and
Sellers have not received any complaints, claims, notices or other
communications, (i) alleging any of the foregoing, (ii) based upon, or
challenging or seeking to deny or restrict, the use, licensing or transfer by
Sellers of any of the Transferred Business Intellectual Property, or (iii)
alleging that the Transferred Licensed Business Intellectual Property is being
licensed or sublicensed in conflict with the terms of any Contract.
3.9.5 No opposition, cancellation, interference, office action, reissue
or re-examination proceeding, or any other action, litigation, objection,
hearing, proceeding or investigation is pending or has been asserted or
threatened in writing provided to Sellers (or, to Sellers' Knowledge, otherwise
asserted or threatened) concerning the ownership, validity, registerability or
enforceability of any Transferred Owned Business Intellectual Property and, to
Sellers' Knowledge, no valid basis exists for any such action, litigation,
objection, hearing, proceeding or investigation.
3.9.6 To Sellers' Knowledge, no Person is engaging in any activity that
infringes upon, misappropriates, dilutes, violates or otherwise interferes or
conflicts with the Transferred Owned Business Intellectual Property. No actions,
litigations, objections, demands, claims, hearings, proceedings or
investigations alleging any of the foregoing have been asserted or are pending
or threatened against any Person.
29
3.9.7 No claim has been threatened or asserted that Sellers or, to
Sellers' Knowledge, another Person, has breached any Transferred Business
Intellectual Property Contract. There exists no event, condition or occurrence
that, with the giving of notice or lapse of time, or both, would constitute a
breach or material default by Sellers, or to Sellers' Knowledge, another Person,
under any Transferred Business Intellectual Property Contract. No party to any
Transferred Business Intellectual Property Contract has given Sellers notice of
its intention to cancel, terminate, change the scope of rights under, or fail to
renew any such Business Intellectual Property Contract. Sellers, nor to Sellers'
Knowledge, any other party to any Transferred Business Intellectual Property
Contract, have not repudiated any material provision thereof. Consummation of
the transactions contemplated by this Agreement will not place Sellers in
material breach or default of any Transferred Business Intellectual Property
Contract, or trigger any material modification, termination or acceleration
thereunder, or trigger any provision in any Transferred Business Intellectual
Property Contract that would create any license under or Encumbrance on any
Intellectual Property Rights owned or held by Purchaser.
3.9.8 Sellers have taken reasonable measures to maintain the
confidentiality of all confidential Transferred Business Intellectual Property.
To Sellers' Knowledge, no Person has misappropriated any confidential
Transferred Owned Business Intellectual Property, and to Sellers' Knowledge, the
confidential Transferred Owned Business Intellectual Property has not been used,
disclosed to or discovered by any Person except pursuant to valid non-disclosure
and/or license agreements, which, to Sellers' Knowledge have not been breached.
To Sellers' Knowledge, none of the Business Employees or any other employee of
Sellers has any Patents issued or applications pending for any device, process,
design or invention of any kind now used in or needed by the Business, which
patents or applications have not been assigned to Sellers.
3.9.9 The Business IT Assets have not materially malfunctioned or
materially failed within the past three (3) years.
3.9.10 Except as set forth on SCHEDULE 3.9.10 as of the date hereof and
as of the Closing (as Updated as of the Closing), at the Closing for each
Business Unit, Sellers will transfer and assign to Purchaser and Purchaser will
have exclusive ownership of the Transferred Owned Business Intellectual Property
and Transferred Business Intellectual Property Contracts free and clear of any
licenses or any royalty to third persons or other payment obligations or
Encumbrances.
3.10 LICENSES. SCHEDULE 3.10 sets forth each License of Sellers (other than
those exclusively associated with the Principal Business Unit and the Licenses
for the Sao Paolo and Manila representative offices) as of the date hereof and
as of the Closing (as Updated as of the Closing). No Business Employee
associated with a Business Unit (other than the Principal Business Unit) holds a
professional License used in connection with the Business. The Licenses set
forth on SCHEDULE 3.10 (together with Licenses for the Principal Business Unit
and the Sao Paolo and Manila representative offices) constitute all of the
Licenses that are necessary for the conduct of the Business as the Business is
conducted as of the date hereof, except in each case for municipal or county
business licenses and similar local licenses obtainable as a matter of right
upon payment of a fee.
3.11 BOOKS AND RECORDS. Except as set forth in SCHEDULE 3.18, the Books and
Records have been maintained in accordance with applicable Legal Requirements in
all material respects and Sellers' customary business practices.
3.12 TAXES AND TAX RETURNS.
Each of Sellers has timely filed all Tax Returns attributable
to the Business that it was required to file, and such Tax Returns are true,
correct and complete in all respects, except where the
30
nonfiling of such Tax Returns would not have a Material Adverse Effect. All
Taxes shown to be payable on such Tax Returns or on subsequent assessments with
respect thereto have been paid in full on a timely basis, and no other Taxes are
payable by Sellers attributable to the Business with respect to any period
ending prior to the date of this Agreement, whether or not shown due or
reportable on such Tax Returns, in each case other than Taxes for which adequate
accruals have been provided in Sellers' Financial Statements or for which the
nonpayment would not have Material Adverse Effect. There are no Encumbrances for
Taxes on the Purchased Assets, other than Permitted Encumbrances.
3.13 Employees and Employee Plans and Contracts.
3.13.1 IDENTIFICATION OF EMPLOYEE PLANS AND CONTRACTS. Except as set
forth on SCHEDULE 3.13.1 as of the date hereof and as of the Closing (as Updated
as of the Closing), no Seller is a party to any Employee Plan or Contract. Each
Employee Plan or Contract providing retirement or pension benefits for Business
Employees resident outside the United States is separately identified on
SCHEDULE 3.13.1. True and correct copies of each Employee Plan or Contract to
which a Seller is a party have been made available to Purchaser. Sellers shall
promptly update Schedule 3.13.1 following the date hereof (but, in any event,
before the Closing) to reflect any changes in Sellers' Retention Program.
3.13.2 IDENTIFICATION OF EMPLOYEES. SCHEDULE 3.13.2 contains a complete
and accurate list of each Business Employee as of the date hereof and as of the
Closing (as Updated as of the Closing), including each employee on leave of
absence, together with the following information: employee number, position
title, date of hire, current rate of compensation, compensation history for the
past two years (including base pay, incentive pay and any equity or
equity-linked awards) and Severance Benefits (other than Severance Benefits
required to be provided by Legal Requirements that are not otherwise part of
Sellers' applicable and effective written plan or policy or otherwise embodied
in a Contract with any Business Employee) payable (if the employee were to be
terminated without cause and not employed by Purchaser as contemplated
hereunder) as of March 31, 2006 based on a calculation of Severance Benefits
(other than Severance Benefits required to be provided by Legal Requirements
that are not otherwise part of Sellers' applicable and effective written plan or
policy or otherwise embodied in a Contract with any Business Employee) using the
criteria existing as of the date hereof. The updated SCHEDULE 3.13.2 to be
delivered pursuant to Section 5.17 shall reflect any changes in the information
contained in SCHEDULE 3.13.2 from and after the date hereof.
3.13.3 ERISA PLANS. Each existing ERISA Plan covering current or former
Business Employees is separately identified on SCHEDULE 3.13.1 as of the date
hereof and as of the Closing (as Updated as of the Closing). Each such ERISA
Plan that is intended to be qualified under Section 401 of the Code has received
a favorable determination letter from the Internal Revenue Service covering all
tax law changes prior to the Economic Growth and Tax Relief Reconciliation Act
of 2001 stating it is so qualified and has been separately identified on
SCHEDULE 3.13.1. Except as set forth on SCHEDULE 3.13.3 as of the date hereof
and as of the Closing (as Updated as of the Closing), Sellers or their
Affiliates, as the case may be, or the administrator of each such ERISA Plan,
has administered each ERISA Plan covering current Business Employees in material
compliance with the provisions thereof and of ERISA and reasonable
interpretations thereof. No Seller or any of its Affiliates has any liability
(i) under Title IV of ERISA, Section 302 of ERISA or Sections 412 and 4971 of
the Code, (ii) as a result of failure to comply with the continuation coverage
requirements of Section 601 et seq. of ERISA or Section 4980B of the Code or
(iii) with respect to any multiemployer plan within the meaning of Section 3(37)
of ERISA.
3.13.4 NON-U.S. PENSION PLANS. Except as set forth on SCHEDULE 3.13.4
as of the date hereof and as of the Closing (as Updated as of the Closing), each
Employee Plan or Contract providing retirement or pension benefits for Business
Employees resident outside the United States has been administered in all
material respects in accordance with applicable Legal Requirements.
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3.14 LABOR RELATIONS. Except as set forth on SCHEDULE 3.14 as of the date hereof
and as of the Closing (as Updated as of the Closing), none of the Business
Employees are members of a labor union or subject to a collective bargaining
agreement or actively seeking formation of a labor union with respect to their
employment with Sellers. Except as set forth on SCHEDULE 3.14 as of the date
hereof and as of the Closing (as Updated as of the Closing), there are no
pending or, to the Knowledge of Sellers', threatened labor disputes or
grievances with respect to any Business Employees.
3.15 INSURANCE. SCHEDULE 3.15 as of the date hereof and as of the Closing (as
Updated as of the Closing) lists all insurance policies covering Sellers which
relate, in whole or in part, to the operations of the Business outside of the
United States by type of insurance, name of insurer, expiration date,
deductibles and policy limits. All such insurance policies provide full and
adequate coverage for all normal risks incident to the Business and are in full
force and effect, and all premiums due with respect to such insurance policies
have been paid.
3.16 BROKERS OR FINDERS. Other than with respect to Xxxxxxx Xxxxx & Co., the
fees and expenses of which shall be paid by Sellers, neither Sellers nor any of
their Affiliates have incurred any obligation or liability, contingent or
otherwise, for brokerage or finders' fees or agents' commissions or other
similar payment in connection with this Agreement and the transactions
contemplated hereby or by the Related Agreements.
3.17 ABSENCE OF CERTAIN CHANGES AND EVENTS. Except as set forth on SCHEDULE
3.17, from December 31, 2004 to the date hereof Sellers have conducted the
Business in the ordinary course of business, and Sellers (in connection with the
operation of the Business) have not:
(a) Increased the rate of compensation to any Business
Employee, except for such changes made in the ordinary
course of business consistent with past practices and as do
not, in the aggregate for all Business Employees (including
increases in bonuses and accruals under any non-qualified
deferred compensation plan) exceed an increase of 5% or
more on an annualized basis;
(b) Paid any bonus or extraordinary compensation to any
Business Employee (other than normal bonuses consistent
with past practice granted in respect of the 2004 calendar
year, the amount of which has been accrued on Sellers'
Financial Statements);
(c) Adopted, entered into or modified any Employee Plan or
Contract;
(d) Prior to the date hereof, suffered or, other than in the
ordinary course of business consistent with past practice,
initiated the loss or termination of any Contract set forth
on SCHEDULE 3.8;
(e) Sold, leased or otherwise disposed of any assets of the
Business other than in the ordinary course of business
consistent with past practice that are individually or in
the aggregate material to the operation of the Business
(other than Excluded Assets);
(f) Incurred any damage, destruction or loss to any asset or
property dedicated to the use of the Business (other than
Excluded Assets) that resulted in material damages in the
aggregate;
32
(g) Made any change in the accounting methods used in
connection with the Business, except as may be required by
GAAP or other than in the ordinary course of business
consistent with past practice;
(h) Experienced any event or condition that, individually or in
the aggregate, has had or would be reasonably likely to
have, a Material Adverse Effect on the Business; or
(i) Entered into any agreement or commitment to do any of the
foregoing.
3.18 COMPLIANCE WITH LEGAL REQUIREMENTS. All of the representations and
warranties made in this Section 3.18 are subject to the matters disclosed on
SCHEDULE 3.18 as of the date hereof and as of the Closing (as Updated as of the
Closing). Each Seller is in compliance in all material respects with Legal
Requirements applicable to the Business. No Seller has committed any breach of
any Legal Requirement that may reasonably, individually or in the aggregate, be
expected to result in any material penalty or fine with respect to the Business,
suspension or loss of any License set forth on SCHEDULE 3.10, or other adverse
or remedial action that would materially interfere with the conduct of the
Business. Without limiting the foregoing, in each case in connection with the
Business: (i) Sellers are not aware of any facts or circumstances that exist,
which would cause any of Sellers to be deemed to be operating in violation in
any material respect of the Federal Bank Secrecy Act, as amended, and its
implementing regulations, the USA PATRIOT ACT of 2001 and the regulations
promulgated thereunder, any order issued with respect to anti-money laundering
by the U.S. Department of the Treasury's Office of Foreign Assets Control, or
any other applicable anti-money laundering statute, rule or regulation, (ii)
Sellers are not aware of any facts or circumstances which would cause Sellers to
believe that any non-public customer information has been disclosed to or
accessed by an unauthorized third party in a manner which would cause any Seller
to undertake any material remedial action, (iii) UBOC's and UBOCI's respective
boards of directors have adopted and implemented an anti-money laundering
program that contains adequate and appropriate customer identification
verification procedures that comply with Section 326 of the USA PATRIOT ACT of
2001 and the regulations promulgated thereunder and such anti-money laundering
program meets the requirements in all material respects of Section 352 of the
USA PATRIOT ACT of 2001 and the regulations promulgated thereunder, (iv) Sellers
have complied in all material respects with any requirements to file reports and
other necessary documents as required by the USA PATRIOT ACT of 2001 and the
regulations promulgated thereunder, (v) none of Sellers, nor, to Sellers'
Knowledge, any agent or other person acting on behalf of Sellers, has (A)
directly or indirectly, used any funds for unlawful contributions, gifts,
entertainment or other unlawful expenses related to foreign or domestic
political activity, (B) made any unlawful payment to foreign or domestic
government officials or employees or to any foreign or domestic political
parties or campaigns from corporate funds, (C) failed to disclose fully any
contribution made by Sellers (or made by any person acting on its behalf of
which Sellers are aware) which is in violation of law, or (D) violated in any
material respect any provision of the Foreign Corrupt Practices Act of 1977, as
amended. Sellers have a system of internal accounting controls, recordkeeping
and procedures sufficient to comply with the Foreign Corrupt Practices Act of
1997, as amended, and the economic sanctions of the United States administered
by the U.S. Treasury Department's Office of Foreign Assets Control.
3.19 SELLERS' APPROVALS. Sellers do not require any approvals of or notice
filings with any Governmental Authority or other third party, except for those
to be obtained prior to the applicable Closing Date for the Closing of each
Business Unit and set forth on SCHEDULE 3.19 (the "Sellers' Approvals"), in
order to consummate the transactions described in this Agreement and the Related
Agreements. SCHEDULE 3.19 shall set forth the specific Sellers' Approvals
necessary for the Closing of each Business Unit. As the context requires, the
term "Sellers' Approvals" shall refer to the specific Sellers' Approvals
necessary for the Closing of the applicable Business Unit.
33
3.20 XXXX-XXXXX XXXXXX. In connection with the HSR Act, and the applicable
regulations thereunder, 16 C.F.R. Parts 801-803, all of the information that
Sellers have provided to Purchaser that could reasonably be used in a fair
market value determination of the Purchased Assets and the Assumed Obligations
(other than the Customers, any Risk Participation Assets, Contingent Risk
Liabilities or foreign assets to which no sales in or into the United States of
America are attributable) is true and correct in all material respects.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser hereby warrants and represents to Sellers as of the date
hereof and as of each Closing (to the extent reasonably applicable to such
Closing and except to the extent that such representation and warranty is made
as of a specific date, in which case such representation and warranty shall be
as of such specific date) that:
4.1 STATUS OF PURCHASER. Purchaser is a national bank, validly existing and in
good standing under the laws of the United States of America. Purchaser has full
corporate power and authority to conduct its business as it is now being
conducted. As of the date of this Agreement, Purchaser is duly licensed to
conduct international banking operations outside the United States through its
branches and representative offices.
4.2 ENFORCEABILITY. Purchaser has full corporate power and authority to execute
and to deliver this Agreement and the Related Agreements to which it is a Party,
and to carry out the transactions contemplated herein and therein. Purchaser has
taken all necessary corporate action to authorize its execution and performance
of this Agreement and the Related Agreements to which it is a Party. Each of
this Agreement and the Related Agreements is the valid and binding obligation of
Purchaser, and enforceable against Purchaser in accordance with its terms,
except as such enforceability may be limited by the Enforceability Exceptions.
The execution, delivery and performance by Purchaser of this Agreement and each
of the Related Agreements to which it is a Party will not, with or without the
giving of notice or passage of time or both, (i) conflict with, result in a
default, right to accelerate or loss of rights under, or result in the creation
of any lien, charge or encumbrance pursuant to any provision of any mortgage,
deed of trust, indenture, loan or credit agreement, lease, license agreement or
other Contract to which Purchaser is a party or by which it is bound or
affected, (ii) conflict with or result in a default under any provision of the
certificate of incorporation or by-laws of Purchaser, or any effective
resolution of the directors or stockholders of Purchaser, or (iii) conflict with
or result in a violation of any Legal Requirement.
4.3 CERTAIN PROCEEDINGS. There is not pending any action against Purchaser that
may reasonably be expected to have the effect of preventing or delaying or
making unlawful the consummation of the transactions contemplated by this
Agreement and the Related Agreements. To Purchaser's Knowledge, no such
proceeding has been threatened.
4.4 BROKERS OR FINDERS. Neither Purchaser nor any of its Affiliates has incurred
any obligation or liability, contingent or otherwise, for brokerage or finders'
fees or agents' commissions or other similar payment in connection with this
Agreement and the transactions contemplated hereby or by the Related Agreements.
4.5 PURCHASER'S APPROVALS. Purchaser requires no approvals of or notice filings
with any Governmental Authority or other third party except for those to be
obtained prior to the applicable Closing Date for the Closing of each Business
Unit and set forth on SCHEDULE 4.5 (the "Purchaser's Approvals"), in order to
consummate the transactions described in this Agreement and the Related
Agreements. SCHEDULE
34
4.5 shall set forth the specific Purchaser's Approvals necessary for the Closing
of each Business Unit. As the context requires, the term "Purchaser's Approvals"
shall refer to the specific Purchaser's Approvals necessary for the Closing of
the applicable Business Unit.
4.6 INVESTMENT COMPANY. Purchaser is not an investment company subject to
registration and regulation under the Investment Company Act of 1940, as
amended.
4.7 BANK REGULATORY MATTERS. To Purchaser's Knowledge, there are no facts or
circumstances, and it has engaged in no acts, practices or courses of conduct,
that reasonably would cause a Governmental Authority, including but not limited
to the OCC and the Federal Reserve, and any other applicable federal, state or
foreign bank regulatory authority, to deny, object to or limit in any material
respect any of Purchaser's Approvals or to take any other action that would make
Purchaser's representation and warranty in Section 4.5 untrue as of the Closing.
4.8 FINANCING AVAILABLE. Purchaser has available, and at the Closing will have
available, sufficient cash to consummate the transactions contemplated by this
Agreement and the Related Agreements and to pay all related fees and expenses
required to be paid by Purchaser hereunder and thereunder.
4.9 BASELINE PURCHASER ADCR. The Baseline Purchaser ADCR is a true and correct
statement of the ADCR of Purchaser generated during the Baseline Period and is
derived from the books and records for Purchaser's operations for the Baseline
Period, consistent with such books and records.
4.10 XXXX-XXXXX XXXXXX. In connection with the HSR Act, and the applicable
regulations thereunder, 16 C.F.R. Parts 801-803, and based on information
supplied by Sellers, Purchaser has, in good faith, determined that the fair
market value of the Purchased Assets and the Assumed Obligations (other than the
Customers, any Risk Participation Assets, Contingent Risk Liabilities, and
foreign assets to which no sales in or into the United States of America are
attributable and not taking into account the Base Purchase Price) does not
exceed $53,100,000.
ARTICLE V
ADDITIONAL AGREEMENTS OF SELLERS AND PURCHASER
5.1 Conduct of the Business.
(a) Prior to the Closing of a particular Business Unit or the
termination of this Agreement pursuant to the terms hereof,
except as contemplated hereby (including, without
limitation, as set forth on SCHEDULE 5.1(B)) or by Section
5.4, Sellers shall conduct the Business of such Business
Unit only in the ordinary course of business, substantially
consistent with past practice, and will use commercially
reasonable efforts to preserve the business organization
and relationships of Sellers as they relate to the
Business, preserve the Business's rights, franchises,
goodwill and client relations, preserve the Licenses issued
to Sellers for the conduct of the Business in full force
and effect consistent with past practice, keep available
the services of the Business Employees and other employees
directly involved in the Business, preserve Sellers
relationships with the Customers and others having business
dealings with the Business and continue to market existing
Customers for new business consistent with past practice.
35
(b) Without limiting the generality of Section 5.1(a), during
the period from the date of this Agreement to the Closing
Date, to the extent it affects the Business and except as
set forth on SCHEDULE 5.1(B) or as expressly permitted by
this Agreement, Sellers shall not, without the prior
written consent of Purchaser:
(i) other than in the ordinary course of
business consistent with past practice,
originate, terminate, transfer or otherwise
dispose of any Purchased Assets or Risk
Assets of the Business;
(ii) waive any material claims or rights relating
to Purchased Assets, except in the ordinary
course of business consistent with past
practices;
(iii) adopt, enter into or modify any Employee
Plan or Contract, or grant any increase in
the compensation or benefits thereunder
affecting Business Employees other than (i)
increases in the ordinary course of business
consistent with past practices and (ii)
adoption or modification of any Employee
Plan or Contract generally applicable to
employees of UBOC and/or its Affiliates and
not limited to the Business; PROVIDED,
HOWEVER, that this provision shall not
prohibit Sellers from (i) establishing,
increasing or amending any Severance
Benefits, retention or other incentive
benefits for Business Employees that they
reasonably believe are necessary or
appropriate to preserve the Business intact
and/or encourage successful consummation of
the transactions contemplated by this
Agreement so long as Sellers consult in good
faith with Purchaser reasonably in advance
(or in the event of exigent circumstances,
as soon as practical thereafter) of
implementing any of the preceding and all
actual and potential obligations and
liabilities resulting therefrom are paid by
Sellers; (ii) satisfying contractual
obligations existing as of the date hereof
and disclosed on SCHEDULE 3.13.1 and (iii)
making modifications required by changes in,
or the interpretation or application of
applicable Legal Requirements;
(iv) make any change, in a manner that would be
adverse to the Business or to Purchaser
under the terms of this Agreement, in
accounting methods, principles or practices
used in connection with the Business, except
insofar as may be required by a change in
GAAP or tax accounting principles or as may
be required by Legal Requirements;
(v) terminate the services (other than for
cause) or substantially change the duties of
any Business Employee;
(vi) solicit the employment of any Business
Employee unless Purchaser has notified UBOC
in writing that it will not make an offer of
employment to the Business Employee, or that
Purchaser's offer of employment has been
rejected by the Business Employee;
36
(vii) maintain the Books and Records other than
consistent with all Legal Requirements in
all material respects and in the same manner
and with the same care that such Books and
Records have been maintained prior to the
execution of this Agreement;
(viii) except in the ordinary course of business
consistent with past practice, incur, create
or assume any Encumbrance on any of the
Purchased Assets other than a Permitted
Encumbrance;
(ix) except in the ordinary course of business
consistent with past practice, sell, lease,
license, transfer or dispose of any of the
Purchased Assets or the Risk Assets;
(x) except in the ordinary course of business
consistent with past practice, terminate or
materially extend or materially modify any
Contract described on SCHEDULE 3.8 that
constitutes a Purchased Asset or enter into
any Contract that would have been required
to have been listed on SCHEDULE 3.8 had it
been effective as of the date hereof;
(xi) except in the ordinary course of business
consistent with past practice, (A) sell,
assign, or grant any security interest in
any Transferred Business Intellectual
Property, Transferred Business IT Assets or
Transferred Business Intellectual Property
Contract, (B) grant to any third party any
license in, to or under any Transferred
Business Intellectual Property, (C) develop,
create, or invent any Business Intellectual
Property jointly with any third party, (D)
disclose or allow to be disclosed to any
Person not a Business Employee any
Transferred Business Intellectual Property
not heretofore a matter of public knowledge,
except pursuant to judicial or
administrative process or in accordance with
an agreement that contains reasonable
confidentiality obligations, or (E) permit
any item of Transferred Owned Business
Intellectual Property to lapse or to be
abandoned, dedicated, or disclaimed, and
Sellers shall perform all applicable
filings, recordings, and other acts, and pay
all required fees and taxes, to maintain and
protect their interest in each and every
item of Transferred Business Intellectual
Property;
(xii) make any material loans, advances or capital
contributions to, or investments in, any
other Person in connection with the Business
other than (i) the origination or
acquisition of Risk Assets in the ordinary
course and (ii) loans, advances, capital
contributions or investments by a Seller to
or in another Seller; and
(xiii) agree in writing or otherwise to take any of
the actions described above in this Section
5.1(b).
(c) For purposes of clarification, the Parties acknowledge and
agree that Sellers shall not be deemed to be in breach of
the provisions of this Section 5.1, to the extent that (i)
Purchaser or any of its Affiliates causes or requests the
37
actions or omissions described herein in connection with
the conduct of the Business, (ii) such actions or omissions
are taken or made in accordance with other provisions of
this Agreement or the Conversion Protocols or (iii) such
actions or omissions are not expressly prohibited by the
Conversion Protocols and are taken or made (A) in good
faith, (B) not for any purpose that would be reasonably
likely to be adverse to Purchaser, (C) in a commercially
reasonable manner and (D) for purposes of preserving the
Sellers' relationships with the Customers and/or retaining
Business Employees; provided that any such actions taken
for purposes of retaining Business Employees shall be
deemed part of Sellers' Retention Program.
(d) By way of clarification, the covenants set forth in this
Section 5.1 shall not apply to the conduct of the Business
by the Sellers of any Business Unit that has been subject
to a Closing. To the extent that any Business Employees of
such Business Unit continue to be employed, or Customers of
such Business Unit continue to be serviced, by Sellers
following the Closing of such Business Unit, the duties and
obligations of Sellers shall be as set forth in Section
5.4.
5.2 PURCHASER'S ACCESS TO THE BUSINESS PRIOR TO CLOSING. Between the date of
this Agreement and the Closing Date, subject to Legal Requirements, Sellers
shall afford to Purchaser and its authorized agents and representatives access,
upon reasonable notice and during normal business hours, to all Contracts,
documents and information of or relating to the assets, liabilities, business,
operations and other aspects of the Business; PROVIDED, HOWEVER, that
Purchaser's agents and representatives shall not have access to (i) information
that is legally privileged or to which Purchaser's access is not permitted
pursuant to any contractual obligation or Legal Requirement, (ii) Tax records
and information (other than Tax records or information of Customers to the
extent such records and information are pertinent to Purchaser's acquisition of
the Business hereunder and are not proscribed from being disclosed to Purchaser
and/or its agents and representatives pursuant to any Legal Requirement), and
(iii) Contracts, documents and information pertaining to the operations of
Sellers or their Affiliates other than the Business. Sellers shall cause the
Business Employees and other employees of Affiliates of Sellers to provide
reasonable assistance to Purchaser in Purchaser's investigation of matters
relating to the transactions contemplated hereby and by the Related Agreements;
PROVIDED, HOWEVER, that Purchaser's investigation shall be conducted in a manner
which does not unreasonably interfere with the normal operations, client and
employee relations of Sellers and Sellers' Affiliates. Without limiting any of
the terms thereof, (i) the terms of Section 5.14 shall govern Purchaser's and
its Representatives' obligations with respect to all Proprietary Information
with respect to the Business, Sellers and their Affiliates and other related
Persons, which has been provided or made available to them at any time,
including during the period between the date of this Agreement and each Closing
Date; PROVIDED, HOWEVER, that this sentence shall not apply to communications
approved by the Parties in accordance with Section 5.7, and (ii) Purchaser shall
maintain the confidentiality of all nonpublic personal information of Sellers'
and their Affiliates' customers as required under applicable Legal Requirements,
including but not limited to the requirements of 12 U.S.C. xx.xx. 6801-6809 and
implementing rules and regulations thereunder. No investigation conducted before
or after the date hereof by any Person shall be deemed to modify in any way any
representation or warranty contained in this Agreement, the Related Agreements
or any certificate furnished or to be furnished hereunder.
5.3 Performance of this Agreement; Notification of Certain Matters.
(a) Subject to the limitations set forth in Section 5.10, each
of the Parties hereto shall execute such documents and
other papers and perform such further acts as may be
reasonably required to carry out the provisions hereof and
the transactions
38
contemplated hereby and by the Related Agreements. Subject
to the limitations set forth in Section 5.10, each such
Party shall, at or prior to each Closing Date, use its
reasonable best efforts to fulfill or obtain the fulfill-
ment of the conditions precedent to the consummation of the
transactions contemplated hereby, including the execution
and delivery of any documents, certificates, instruments
or other papers that are reasonably required for the
consummation of the transactions contemplated hereby.
(b) Each Party shall give prompt notice to the other Party of
(i) the occurrence, or failure to occur, of any event or
the existence of any condition that has caused or could
reasonably be expected to cause any of its representations
or warranties contained in this Agreement to be untrue or
inaccurate in any material respect at any time after the
date of this Agreement, up to and including the last to
occur of the Effective Times (except to the extent such
representations and warranties are given as of a particular
date or period and relate solely to such particular date or
period), and (ii) any failure on its part to comply in any
material respect with or satisfy any covenant, conditions
or agreement to be complied with or satisfied by it under
this Agreement.
5.4 CONVERSION.
5.4.1 GENERAL PROCEDURES. The parties acknowledge and agree that the
transactions contemplated by this Agreement shall be consummated following the
Principal Closing by referring the Customers from Sellers to Purchaser and, more
particularly, by transitioning and redirecting the transaction flows related to
each Customer, to the extent related to the Business, from Sellers' information
systems to Purchaser's information systems. Prior to the Principal Closing, the
Parties shall use their respective reasonable best efforts to cooperate with and
assist each other in preparing for such transfer of Customers, including without
limitation by introducing the Customers to Purchaser; provided that nothing in
this Agreement or any of the Related Agreements shall require Purchaser to make
any such efforts with respect to Excluded Accounts. The actual transfer of
Customers (and the accompanying hire by Purchaser of the Business Employees
pursuant to Section 5.5) shall commence with the Principal Closing. The entire
process of transitioning and redirecting Customers from Sellers to Purchaser,
including the preparatory measures taken prior to the Principal Closing and the
actual transfer of Customers following the Principal Closing (accompanied by the
hire by Purchaser of Business Employees) shall be referred to as the
"Conversion." The Conversion shall be accomplished in accordance with the
process, guidelines, policies and procedures set forth in SCHEDULE 5.4 (the
"Conversion Protocols"). The Conversion Protocols shall be updated by the
parties from time to time (including following Closings if the Parties deem it
appropriate) to set out any changes in the process, guidelines, policies and
procedures pursuant to which the Conversion shall take place. From and after the
Principal Closing until the Sellers' Shutdown Date, the Sellers and Purchaser
shall use their reasonable best efforts to implement the Conversion in
accordance with the Conversion Protocols and as further set forth below in this
Section 5.4. Notwithstanding any covenant in this Agreement to the contrary,
Sellers shall have no obligation to (i) continue the employment of any Business
Employee not listed on ATTACHMENT A to SCHEDULE 5.4 to the extent that Sellers
can continue to provide appropriate service levels (consistent with services
levels provided as of the date of this Agreement) to Customers, (ii) pay any
Business Employees amounts in excess of those required under Employee Plans and
Contracts in effect as of the date of this Agreement, (iii) hire additional
employees for the Business, (iv) invest in any new technological infrastructure
or new furnishings, fixtures or equipment, (v) engage in marketing efforts for
new customers, or (vi) otherwise undertake any efforts for the expansion of the
Business. During the Conversion, in each circumstance where Sellers are
permitted under this Agreement to terminate the services (other than for cause)
or substantially change the duties of any Business Employee, Sellers shall
provide Purchaser with ten (10) days' written notice prior to such action in
order to allow Purchaser to make use of such Business
39
Employee if it so determines. In the event Purchaser notifies Sellers within
such notice period of its determination to use such Business Employee,
Purchaser, at its option, shall either promptly (i) offer to hire such Business
Employee (and thereby include the relevant Business Employee on ATTACHMENT A to
SCHEDULE 5.4) or (ii) lease all of his or her time under the Business Employee
Leasing Agreement in accordance with the Conversion Protocols; PROVIDED THAT no
such notice shall be required in connection with a termination pursuant to the
Conversion Protocols.
5.4.2 COSTS/REVENUES OF SELLERS' POST-CLOSING OPERATIONS. The Parties
acknowledge that the rationale for Sellers to continue to provide services to
Customers following a Closing is to permit Purchaser the time to provide for a
full and effective Conversion of as many Customers as possible and the transfer
of Business Employees to Purchaser in an orderly fashion, including the
conversion of transaction processes from Sellers' platform to Purchaser's
platform. The Parties further acknowledge that during the time Sellers continue
to keep their organization intact and otherwise fulfill their obligations under
this Section 5.4 and the Conversion Protocols, Sellers shall be incurring
continuing operating expenses associated with the ongoing operation of the
Business. In consideration of these ongoing efforts and the ongoing incurrence
of costs prior to the Sellers' Shutdown Date, the Parties agree that Sellers
shall be entitled to keep (in lieu of payment by Purchaser to Sellers of any
service fee) all revenues from such operations generated by Customers that have
not yet been converted to Purchaser.
5.5 EMPLOYEE MATTERS.
(a) [Reserved]
(b) Purchaser shall provide to Accepting Employees employee
benefits that are substantially comparable in the aggregate
with the benefits provided to similarly situated employees
of Purchaser. In addition, Purchaser shall grant all
Accepting Employees, for purposes of employee benefit
rights, the privileges set forth on SCHEDULE 5.5(B).
(c) Sellers agree to provide COBRA continuation coverage for
all of Sellers' Business Employees (and their covered
dependents) to the extent required by Legal Requirements.
(d) At the relevant Employment Time, Sellers will pay to each
Accepting Employee his or her accrued paid time off as of
the Employment Time; PROVIDED, HOWEVER, to the extent
applicable Legal Requirements outside of the United States
require that Purchaser carry over such accrued paid time
off, UBOC shall pay to Purchaser the amount thereof.
(e) Except as provided in this subsection, all employment
records of each Business Employee compiled by Sellers prior
the Employment Time will be retained by Sellers or their
designee. At the Employment Time of an Accepting Employee,
UBOC shall deliver to Purchaser an electronic employment
record for such Accepting Employee (i) in the form of, and
containing the fields specified in, SCHEDULE 5.5(E)(I) AND
(II) with the consent of the Accepting Employee to the
release of such information (which consent UBOC undertakes
to make reasonable efforts in collaboration with Purchaser
to obtain), in the form of, and containing the fields
specified in, SCHEDULE 5.5(E)(II). Sellers will retain
originals of all such records and will grant access by
Purchaser to such records, subject to Sellers' personnel
40
policies and applicable Legal Requirements related to
disclosure of personnel files.
(f) UBOC shall be solely responsible for and shall expressly
assume and hold Purchaser and its Affiliates harmless
against (i) all liabilities and obligations owed by Sellers
to each Business Employee who is not an Accepting Employee
and (ii) all liabilities and obligations owed by Sellers to
each Business Employee who is an Accepting Employee other
than those liabilities and obligations expressly assumed by
Purchaser pursuant to Section 5.5(b).
(g) As of the relevant Employment Time, each Accepting Employee
shall cease to be covered by Sellers' Welfare Plans.
Sellers shall retain responsibility for all Welfare Plan
claims incurred by Accepting Employees before the relevant
Employment Time. Sellers shall retain any obligation for
payment of long or short-term disability claims arising
from disabilities of Accepting Employees that occurred
before the relevant Employment Time. Purchaser shall be
responsible for payment of long and short-term disability
claims that arise from disabilities of Accepting Employees
that occur on or after relevant Employment Time to the
extent covered by Purchaser's disability plans, if any. For
purposes of this paragraph, a claim shall be deemed to have
been incurred when the medical or other service giving rise
to the claim is performed, except that disability claims
shall be deemed to have been incurred on the date the
Accepting Employee becomes disabled.
(h) UBOC shall be solely responsible for and shall expressly
assume and hold Purchaser harmless against all payments due
under Sellers' Retention Program.
5.6 [RESERVED]
5.7 COMMUNICATIONS. Except pursuant to any Legal Requirements (including,
without limitation, the filing of periodic and other reports with the Securities
and Exchange Commission or other Governmental Authorities concerning the
transactions contemplated by this Agreement and the Related Agreements) or the
rules of any applicable stock exchange (provided that each Party shall use
commercially reasonable efforts to notify each other Party of any release,
communication or announcement required pursuant to any Legal Requirements or
stock exchange rules), no release, communication or announcement concerning this
Agreement or the transactions contemplated hereby or by the Related Agreements
shall be made without advance written approval thereof by UBOC and Purchaser,
which approval shall not be unreasonably conditioned, delayed or withheld. UBOC
and Purchaser shall cooperate with each other in making any such release,
communication or announcement. Each Party shall request confidential treatment
of information (except to the extent it has previously been publicly disclosed
or there is otherwise no reasonable basis for such request) concerning the
transactions contemplated by this Agreement and the Related Agreements when
filing such information with, or communicating such information to, banking
agencies and other Governmental Authorities which allow confidential treatment
of such type of information. UBOC and Purchaser have prepared a mutually
acceptable communications plan for announcing the status of the transactions
contemplated hereby and by the Related Agreements, any related events that will
occur prior to the Closing, and Purchaser's plans with respect to future
relations with or employment of the Business Employees and the Customers.
41
5.8 EXECUTION AND DELIVERY OF DOCUMENTS. All agreements or certificates
delivered in connection with the transactions contemplated by this Agreement
shall be deemed to be delivered by the corporations or companies executing the
same, and the individual officers executing the same shall not be personally
liable thereon.
5.9 Cooperation after the Closing.
5.9.1 FURTHER ASSURANCES. After the Closing, Sellers and Purchaser
shall cooperate with each other by furnishing any additional information and
executing and delivering any additional documents as may be reasonably requested
by the other to further perfect or evidence the consummation of, or otherwise
implement, any transaction contemplated by this Agreement and the Related
Agreements, or to aid in the preparation of any regulatory filing, including
(subject to the provisions of Article VIII) Tax Returns; PROVIDED, HOWEVER, that
any such additional documents must be reasonably satisfactory to each of the
Parties and not impose upon either Party any material liability, risk,
obligation, loss, cost or expense not contemplated by this Agreement or the
Related Agreements. After the Principal Closing, Purchaser shall furnish to
Sellers all information and documentation requested by Sellers to satisfy
UBOCI's obligations under the Written Agreement or any amendment or replacement
thereof, all out-of-pocket costs of which shall be borne by Sellers. After the
Closing of any Business Unit, Purchaser shall furnish Sellers any information or
documentation they may reasonably request in connection with the closing or
wind-down of any of Sellers' continuing operations (not transferred in
connection with such Closing) associated with such Business Unit. After the
Closing, Sellers and Purchaser, as the case may be, shall afford or cause to be
afforded to any Indemnifying Party pursuant to Article X hereof such access to
all books, records and personnel of Sellers during normal business hours as
shall be reasonably requested with respect to any claim or assertion of any
Loss. Sellers may retain copies of any Books and Records as of the Closing Date,
which if retained shall be held subject to Section 5.15.
5.9.2 SELLERS' ACCESS TO RECORDS. Except as to Tax books, records and
information, which are subject to the provisions of Section 8.1, for a period of
seven years after the last Closing Date hereunder, subject to applicable Legal
Requirements, Sellers and their representatives shall have reasonable access to
all of the Books and Records to the extent that such access may reasonably be
required by Sellers in connection with matters relating to or affected by the
operations of Sellers prior to the Closing Date. Such access shall be afforded
by Purchaser upon receipt of reasonable advance notice and during normal
business hours. UBOC shall be solely responsible for any costs or expenses
incurred by it pursuant to this Section 5.9.4. If Sellers desire to acquire any
of such Books and Records after the expiration of such seven-year period,
Sellers shall, prior to the expiration of such seven-year period, give Purchaser
notice thereof and after receiving such notice Purchaser shall either (i)
continue to provide Sellers access to the Books and Records in the manner set
forth above, or (ii) if at any time after receiving such notice Purchaser elects
to destroy or otherwise not retain such Books and Records, segregate and permit
Sellers, at UBOC's expense, to remove such Books and Records as Sellers may
select.
5.9.3 PURCHASER'S ACCESS TO RECORDS. Except as to Tax books, records
and information, which are subject to the provisions of Section 8.1, for a
period of seven years after the last Closing Date hereunder, subject to
applicable Legal Requirements, Purchaser and its representatives shall have
reasonable access to all of the books and records that UBOC or any of its
Affiliates may retain after the Closing Date, to the extent related to the
Business. Such access shall be afforded by UBOC and its Affiliates upon receipt
of reasonable advance notice and during normal business hours. Purchaser shall
be solely responsible for any costs and expenses incurred by it pursuant to this
Section 5.9.3. If Purchaser desires to acquire any of such Books and Records
after the expiration of such seven-year period, Purchaser shall, prior to the
expiration of such seven-year period, give Sellers notice thereof and after
receiving such notice Sellers shall either (i) continue to provide Purchaser
access to the Books and Records in the manner set forth above, or (ii) if at any
time after receiving such notice Sellers elect to destroy or otherwise not
retain such Books and Records,
42
segregate and permit Purchaser, at Purchaser's expense, to remove such Books and
Records as Purchaser may select.
5.10 Regulatory Approvals; Third Party Consents.
5.10.1 REGULATORY APPROVALS. Sellers and Purchaser shall cooperate and
use commercially reasonable efforts to obtain all consents, approvals and
agreements of, and to give and make all notices and filings with, any
Governmental Authority necessary to authorize, approve or permit the
consummation of the transactions contemplated by this Agreement, the Related
Agreements and any other agreements contemplated hereby or thereby, including,
without limitation, as set forth on SCHEDULE 3.19 and SCHEDULE 4.5; PROVIDED,
HOWEVER, that nothing in this Agreement shall require, or be construed to
require, Purchaser or Sellers to proffer to, or agree to, sell, divest, lease,
license, transfer, dispose of or otherwise encumber or hold separate, before or
after the Effective Time of any Closing, material assets, licenses, operations,
rights, product lines, businesses or their interest therein or any of their
respective Affiliates or to agree to any material changes or restriction on, or
other material impairment of the ability of Purchaser or Sellers, as the case
may be, to own or operate, any such assets, licenses, product lines, businesses
or interests therein. Without limiting the generality of the foregoing,
Purchaser and Sellers and their respective Affiliates shall, as promptly as
reasonably practicable, file with all foreign Government Authorities
applications and/or notices required to be made by them to obtain the non-US
approvals set forth in SCHEDULE 3.19 or SCHEDULE 4.5, as the case may be.
Purchaser and UBOC will keep each other informed of the status of matters
relating to obtaining the regulatory approvals set forth on SCHEDULE 3.19 and
SCHEDULE 4.5. It is expressly understood by the Parties that each Party shall
use commercially reasonable efforts to ensure that representatives of both
Purchaser and UBOC shall have the right to attend and participate in any
hearing, proceeding, meeting, conference or similar event before or with a
Governmental Authority or other organization relating to this Agreement or a
Related Agreement. In furtherance of the foregoing, Purchaser and UBOC shall
provide each other reasonable advance notice of any such hearing, proceeding,
meeting, conference or similar event. The notice required to be given under this
Section 5.10.1 shall be given to representatives of UBOC or Purchaser entitled
to receive notices hereunder.
5.10.2 THIRD PARTY CONSENTS. Sellers and Purchaser shall cooperate and
use commercially reasonable efforts to obtain all approvals and consents to the
transactions contemplated by this Agreement and the Related Agreements,
including the consents of third parties under Contracts included in the
Purchased Assets. In the event and to the extent that Sellers are unable to
obtain any required approval or consent of non-Governmental Authorities to any
Contract to be assigned to Purchaser hereunder, (i) Sellers shall use
commercially reasonable efforts in cooperation with Purchaser to (A) provide or
cause to be provided to Purchaser the benefits of any such Contract, (B)
cooperate in any arrangement, reasonable and lawful as to Sellers and Purchaser,
designed to provide such benefits to Purchaser and (C) enforce for the account
of Purchaser any rights of Sellers arising from such Contracts, including the
right to elect to terminate in accordance with the terms thereof on the advice
of Purchaser and (ii) Purchaser shall use commercially reasonable efforts to
perform the obligations of Sellers arising under such Contracts, to the extent
that, by reason of the transactions consummated pursuant to this Agreement or
otherwise, Purchaser has control over the resources necessary to perform such
obligations. If and when any such approval or consent shall be obtained or such
Contract shall otherwise become assignable, Sellers shall promptly assign all of
their rights and obligations thereunder to Purchaser without the payment by
Purchaser of further consideration and Purchaser shall, without the payment of
any further consideration therefor, assume such rights and obligations and
Sellers shall be relieved of any and all obligation or liability thereunder.
5.10.3 AGREEMENTS AFFECTING THE OTHER PARTY. Notwithstanding any other
provision of this Section 5.10, neither Sellers nor Purchaser shall make or
permit any of their Affiliates to make any agreement or understanding affecting
the assets or business of the other Party or its Affiliates as a condition to
obtaining any consents, approvals or waivers except with the prior written
approval of such other Party.
43
5.11 REGULATORY COMPLIANCE. Purchaser and Sellers and their agents,
representatives and Affiliates shall comply with all Legal Requirements
applicable to their conduct in performing their obligations under this Agreement
and the Related Agreements.
5.12 NO SOLICITATIONS. From and after the date hereof until the last Closing
Date to occur hereunder (or until the termination of this Agreement), Sellers
and their Affiliates shall not, and shall direct and use their reasonable best
efforts to cause each of their Representatives not to, (i) directly or
indirectly, solicit, initiate, facilitate or knowingly encourage the submission
of any Proposal (as defined below), (ii) participate in any discussions or
negotiations regarding, or furnish to any Person any non-public information with
respect to any Proposal or Alternative Transaction, other than with Purchaser or
(iii) agree to or approve any Alternative Transaction or authorize any of its
Subsidiaries to agree to or approve any Alternative Transaction. For purposes of
this Agreement: (i) "Proposal" means any proposal or offer from any Person
relating to an Alternative Transaction; and (ii) "Alternative Transaction" means
any transaction for the sale of all or a material part of the Business.
5.13 TRADEMARKS. Notwithstanding any implication contained herein or prior
course of conduct to the contrary, in no event shall Purchaser or any of its
Affiliates have any right to use, nor shall Purchaser or any of its Affiliates,
use, any Trademark of Sellers or any of their Affiliates or any application or
registration therefor, owned by, licensed to or used by Sellers or any of their
Affiliates, or any other xxxx, name, term or identification that is confusingly
similar to the foregoing, except to the extent Purchaser is authorized to do so
pursuant to the Trademark and Trade Name License Agreement. Except as set forth
in the Trademark and Trade Name License Agreement, Purchaser agrees as soon as
reasonably practicable after the Closing to cause the Business acquired by
Purchaser not to use any name containing the names, initials or acronyms
"UnionBanCal Corporation," "Union Bank," "Union Bank of California," "Union Bank
of California International," "UBOC," "UBOCI," "xxxx.xxx" or any words or
Trademarks that are confusingly similar to the foregoing, or the "Union Bank of
California" logo.
5.14 Non-Competition; Non-Solicitation; Confidentiality.
5.14.1 SELLERS. In consideration of the benefits of this Agreement and
the Related Agreements to Sellers and in order to induce Purchaser to enter into
this Agreement, Sellers hereby covenant and agree, subject to the exceptions in
Section 5.14.3, that for a period of four years after the Principal Closing Date
(the "Non-Compete Term"), neither UBOC nor any of its Affiliates shall, without
the prior written consent of Purchaser, directly or indirectly, operate, engage
in, manage or own any equity interest constituting "control" within the meaning
of the Bank Holding Company Act of 1956 ("Control") in any line of business
offering international trade and payment and correspondent banking products and
services, (including cash vault processing services for Mexican banks), all as
currently engaged in by the Business (the "Prohibited Services") in the
Restricted Area (as defined below). By way of clarification, "Prohibited
Services" shall not include services provided by Sellers pursuant to Section 5.4
and the Conversion Protocols through and including the winding down of Sellers'
Business activities.
5.14.2 RESTRICTED AREA. The covenants contained in Section 5.14.1 shall
be construed as a series of separate covenants, one for each county or state of
the United States of America (including its territories and possessions), one
for the United States (including its territories and possessions), as a whole,
and one for each foreign country and/or territory or political subdivision
thereof in which the Business operates as of the date hereof (together, the
"Restricted Area").
5.14.3 EXCEPTIONS. Notwithstanding any other provisions of this
Agreement to the contrary, the provisions of Section 5.14.1 shall not apply to:
44
(a) the continued servicing of Excluded Accounts prior to the
winding down of Sellers' Business activities to the extent
reasonably necessary to wind down such relationships or to
promote the Conversion of such Customers;
(b) any Person who acquires, directly or indirectly, any
interest in UBOC or any of its Affiliates (or all or a
portion of the business of any of them);
(c) any transaction or transactions, as a result of which UBOC
or any of its Affiliates acquires any interest in any
Person engaging in Prohibited Services, or assets related
to Prohibited Services, and retains such interest or
assets, as applicable, (i) if the annual non-interest
income of such Person (or from such purchased assets)
derived from Prohibited Services for the fiscal year
immediately preceding such acquisition is $20 million or
less, or (ii) the activities of such Person or purchased
assets constituting Prohibited Services (the "Business
Activities") are disposed of in accordance with Section
5.14.4, it being understood that if UBOC or any of its
Affiliates makes an acquisition in a transaction described
in this Section 5.14.3(c) during the Non-Compete Term
requiring that the Business Activities be disposed of in
accordance with Section 5.14.4, UBOC shall, or shall cause
its Affiliate, as applicable, to dispose of such Business
Activities notwithstanding the expiration of the
Non-Compete Term prior to the completion of such
disposition.
5.14.4 Disposition of Business Activities.
(a) If UBOC or an Affiliate engages in a transaction described
in Section 5.14.3(c) requiring disposition of Business
Activities, UBOC shall promptly, and in any event within
fifteen (15) Business Days after the earlier of the public
announcement of an agreement to consummate such transaction
and the consummation of such transaction, provide to
Purchaser a written notice of such transaction, which
notice shall describe in reasonable detail the relevant
Business Activities. In such case, upon request of
Purchaser, UBOC shall, and shall cause its Affiliates to,
provide to Purchaser reasonable access to the Business
Activities to conduct customary due diligence of such
Business Activities, subject to Purchaser executing a
customary confidentiality agreement with respect to the
Business Activities.
(b) If (i) Purchaser makes an offer to acquire such Business
Activities within fifteen (15) days after receiving the
notice described in Section 5.14.4(a), and (ii) in the
reasonable judgment of UBOC or such Affiliate, as the case
may be, such offer is the most economically beneficial
offer in the aggregate to acquire such Business Activities
UBOC or such Affiliate has received within sixty (60) days
following its acquisition of such Business Activities (and
such offer in the reasonable judgment of UBOC or such
Affiliate is more economically beneficial in the aggregate
to UBOC than discontinuing such Business Activities), UBOC
(or its Affiliate, as the case may be) shall grant
exclusivity to Purchaser for thirty (30 days) to enter into
definitive agreements upon the terms of Purchaser's offer
to sell to Purchaser the Business Activities. If (i)
Purchaser does not make an offer to acquire such Business
Activities within fifteen (15) days after receiving the
notice described in Section 5.14.4(a), or (ii) UBOC (or its
Affiliate, as
45
the case may be) do not enter into definitive agreements
with respect to Purchaser's offer within thirty (30) days
after such grant of exclusivity (or no such exclusivity is
required to be granted), then UBOC or, to the extent
applicable, its Affiliates shall (A) discontinue such
Business Activities within one year after such acquisition
or (B) dispose of such Business Activities at a price and
upon terms that are acceptable to UBOC within one year
after such acquisition (or, if the absence of the consent
or approval of any Governmental Authority is the only
condition to such disposition not satisfied (other than
such conditions which, by their nature, are to be satisfied
on the date such disposition is completed) within one year
after such acquisition, then UBOC or, to the extent
applicable, its Affiliates shall dispose of such Business
Activities at a price and upon terms that are acceptable to
UBOC within eighteen (18) months after such acquisition;
PROVIDED, HOWEVER, that if Purchaser makes an offer for the
Prohibited Services, then the period during which UBOC
shall be required to discontinue or divest such Business
Activities shall be tolled for any period during which UBOC
is actively negotiating definitive agreements with respect
to Purchaser's offer in good faith until the earlier of the
execution of such definitive agreements, the withdrawal by
Purchaser of its offer or written notice by UBOC to
Purchaser that it has rejected Purchaser's offer.
5.14.5 ENFORCEMENT. Each of the Parties specifically agrees that the
covenants set forth in this Section 5.14 are an integral part of the inducement
of the respective Parties to enter into this Agreement and that each Party (or
its successors or assigns) shall be entitled to injunctive relief in addition to
all other legal and equitable rights and remedies available to it in connection
with any breach by the other Party or any of its Affiliates of any provision of
this Section 5.14 and that, notwithstanding the foregoing, no right, power or
remedy conferred upon or reserved or exercised by a Party in this Section 5.14
is intended to be exclusive of any other right, power or remedy, each and every
one of which (now or hereafter existing at law, in equity, by statute or
otherwise) shall be cumulative and concurrent.
5.14.6 Employee Non-Solicitation; No Hire.
(a) Purchaser hereby covenants and agrees that neither it nor
any of its Affiliates or Representatives shall, during the
Non-Compete Term, without the prior written consent of
UBOC, directly or indirectly, solicit for employment or
employ (or enter into any consulting or agency relationship
with) any employees of Sellers set forth on SCHEDULE
5.14.6(A) during such employment and for a period of twelve
months after any termination thereof.
(b) Sellers hereby covenant and agree that neither they nor any
of their Affiliates or Representatives shall, during the
Non-Compete Term, without the prior written consent of
Purchaser, directly or indirectly, solicit for employment
or employ (or enter into any consulting or agency
relationship with) any employees of Purchaser set forth on
SCHEDULE 5.14.6(B) during such employees' employment with
Purchaser or its Affiliates and for a period of twelve
months after any termination thereof.
(c) Sellers hereby covenant and agree that neither they nor any
of their Affiliates or Representatives shall, during the
Non-Compete Term, without the prior written consent of
Purchaser, directly or indirectly, solicit for
46
employment or employ (or enter into any consulting or
agency relationship with) any Accepting Employees during
the period of such Accepting Employees' employment with
Purchaser or any of its Affiliates and for a period of
twelve months after any termination thereof.
(d) Purchaser hereby covenants and agrees that in the event
this Agreement is terminated at any time prior to the
Principal Closing, neither it nor any of its Affiliates or
Representatives shall, for a period of two years from and
including the date of such termination, without the prior
written consent of UBOC, (i) directly or indirectly,
solicit for employment any Business Employee or (ii) employ
(or enter into any consulting or agency relationship with)
any Business Employee holding the title of officer or
higher.
(e) Nothing in this Section 5.14.6 shall prohibit any Party
from (i) using third-party recruiters as long as the
recruiters are not specifically directed by the Party to
solicit the persons as to whom the non-solicitation
covenants of this Section 5.14.6 apply; (ii) from making
general public solicitations for employment for any
position, (iii) in the case of Business Employees who are
solicited in a manner permitted by clauses (i) and (ii) of
this subparagraph (d), from employing Business Employees
who do not hold the title of officer or higher at the time
of such employment, or (iv) from soliciting or employing
any person whose employment with the other Party (or the
successor-in-interest to the Business if a party other than
Purchaser) terminated twelve months prior to such
solicitation or hiring.
(f) The foregoing restriction shall not be deemed to prohibit
Purchaser from making offers of employment to any Business
Employees in connection with the transactions contemplated
by this Agreement as long as such offers are in accordance
with the Conversion Protocols and otherwise are in effect
from or after the Principal Closing; PROVIDED THAT if this
Agreement is terminated, the provisions of Section
5.14.6(d) shall govern.
5.14.7 RIGHTS RETAINED BY SELLERS. Subject to Section 2.1.1, Purchaser
acknowledges that it is not acquiring any interest in any Proprietary
Information concerning the enterprise of Sellers and their Affiliates other than
that concerning the Business (except for the Excluded Assets), including, but
not limited to, (i) the customers and employees of Sellers and their Affiliates,
or (ii) information (x) in which Sellers or their Affiliates have an ownership
interest (either through creation, license, other contractual relation or
through acquisition from Sellers and their Affiliates), (y) that is
confidential, and (z) relates to the data bases, marketing strategies, marketing
relationships, products, product development, product pricing, and customers of
the enterprise of Sellers and their Affiliates. Prior to its acquisition at a
Closing, all Proprietary Information constituting Purchased Assets is and shall
remain the sole property of Sellers.
5.14.8 NON-DISCLOSURE AGREEMENT. The parties hereby agree that the
Non-Disclosure Agreement is hereby terminated and shall have no further force or
effect except with respect to any prior breach thereof.
5.14.9 CONFIDENTIALITY OF INFORMATION OF PURCHASER. From and after the
date hereof, Sellers shall, and shall cause their respective Affiliates and
Representatives to, treat as confidential and safeguard, and not to use (or
disclose or reveal to any other Person except its own Representatives who are
necessary in consummating the transactions contemplated herein and in the
Related Agreements) in any manner whatsoever, in whole or in part, except as
expressly agreed in writing by the Purchaser, any and all Proprietary
47
Information of Purchaser and its Affiliates (including information, knowledge
and data related to the Business after the Principal Closing) for the benefit of
Sellers or any third party (including without limitation any Person described in
Section 5.14.3(b) or (c), or any division, department or unit thereof, to the
extent such Person, division, department or unit engages in any Prohibited
Services) or for any purpose other than in connection with the consummation of
the transactions contemplated hereby or by the Related Agreements, in each case
by using the standard of care set forth in Section 5.14.11 below. Sellers shall
inform all of its Representatives and shall cause its Representatives to inform
its Representatives who receive Proprietary Information hereunder, of the
confidential nature of such information, as well as the terms of this Agreement.
Sellers shall cause its Representatives to comply with all terms, conditions,
restrictions and limitations of this Agreement as if they were direct parties
hereto, and Sellers shall be responsible for any breach of the terms of this
Agreement by any Seller or its Representatives.
5.14.10 CONFIDENTIALITY OF INFORMATION OF SELLERS. From and after the
date hereof, Purchaser shall, and shall cause its respective Affiliates and
Representatives to, treat as confidential and safeguard, and not to use (or
disclose or reveal to any other Person except its own Representatives who are
necessary in consummating the transactions contemplated herein and in the
Related Agreements) in any manner whatsoever, in whole or in part, except as
expressly agreed in writing by UBOC, any and all Proprietary Information of
Sellers and its Affiliates (including information, knowledge and data related to
the Business prior to the Principal Closing) for the benefit of itself or any
third party or for any purpose other than in connection with the consummation of
the transactions contemplated hereby or by the Related Agreements, in each case
by using the standard of care set forth in Section 5.14.11 below. Purchaser
shall inform all of its Representatives and shall cause its Representatives to
inform its Representatives who receive Proprietary Information hereunder, of the
confidential nature of such information, as well as the terms of this Agreement.
Purchaser shall cause its Representatives to comply with all terms, conditions,
restrictions and limitations of this Agreement as if they were direct parties
hereto, and Purchaser shall be responsible for any breach of the terms of this
Agreement by it or its Representatives.
5.14.11 DEGREE OF CARE FOR CONFIDENTIAL INFORMATION. In complying with
the obligations of Section 5.14.9 and Section 5.14.10, each Party shall exercise
the same degree of care that it uses to protect its own confidential and
proprietary information of similar nature and importance (but in no event less
than reasonable care) to protect the confidentiality and avoid the unauthorized
use, disclosure, publication or dissemination of the Proprietary Information.
Each Party shall not, and shall cause its Representatives not to, decompile,
disassemble or otherwise reverse engineer (except to the extent expressly
permitted by applicable law, notwithstanding a contractual obligation to the
contrary) any Proprietary Information or any portion thereof, or determine or
attempt to determine any source code, algorithms, methods or techniques embodied
in any Proprietary Information or any portion thereof. Each Party shall not use
Proprietary Information for any purpose or in any manner that would constitute a
violation of any laws or regulations, including without limitation the export
control laws of the United States.
5.14.12 EXCEPTIONS TO CONFIDENTIALITY: REQUIRED DISCLOSURES.
Notwithstanding the provisions of Section 5.14.9 and Section 5.14.10, the
confidentiality obligations therein contained shall not extend to information,
knowledge or data that (i) is or becomes generally available to the public other
than as a result of any disclosure or other action or inaction by a Party in
breach of this Agreement (including any disclosure or other action or inaction
by the Affiliates or Representatives of a Party that could constitute a breach
of this Agreement if undertaken by any Party itself); (ii) is or becomes
rightfully known to a Party or its Representatives from a Person (other than the
other Party or any of its Representatives) that is not known by such Party to
owe a duty of confidentiality to the other Party or its Representatives with
respect to such information, knowledge or data; or (iii) is or was already in
the possession of, or is or becomes known to, a Party or any of its
Representatives prior to any discussions between the Parties relating to the
transactions contemplated by this Agreement or is or was independently developed
by a Party or any of its Representatives without violation of any obligation
under this Agreement. In the event that a Party or any
48
of its Representatives are requested pursuant to, or required by, applicable law
or regulation or by legal process to disclose any such confidential or
Proprietary Information, knowledge or data, such Party shall provide the other
Party with prompt written notice of such request or requirement in order to
enable the other Party (a) to seek an appropriate protective order or other
remedy, (b) to consult with such Party to the extent permitted by law with
respect to taking steps to resist or narrow the scope of such request or legal
process or (c) to waive compliance, in whole or in part, with the terms of this
Agreement. In the event that such protective order or other remedy is not
obtained, or the other Party waives compliance, in whole or in part, with the
terms of this Agreement, such Party or its Representatives, as the case may be,
shall disclose only that portion of such confidential or Proprietary
Information, knowledge or data which such Party (or such Representative) is
legally required to disclose and shall exercise its reasonable best efforts to
obtain confidential treatment for such confidential or Proprietary Information,
knowledge or data so disclosed.
5.14.13 NO REPRESENTATIONS AND WARRANTIES REGARDING PROPRIETARY
INFORMATION. Subject to the terms and conditions of this Agreement and the
Related Agreements and without prejudice thereto, the Parties acknowledge and
agree that neither they nor their Representatives make any express or implied
representation or warranty as to the completeness of any Proprietary Information
provided to the other Party or any use thereof. Each Party hereby expressly
disclaims all such warranties, including any implied warranties of
merchantability and fitness for a particular purpose, non-infringement and
accuracy, and any warranties arising out of course of performance, course of
dealing or usage of trade. Each Party shall not be entitled to rely on the
completeness of any Proprietary Information from the other Party but shall be
entitled to rely solely on such representations and warranties regarding the
completeness of the Proprietary Information as may be made in this Agreement and
the Related Agreements.
5.15 Privileged Information
5.15.1 PRIVILEGED DOCUMENTS IN BOOKS AND RECORDS. Sellers and Purchaser
acknowledge and agree that the Books and Records presently may contain documents
that are subject to privilege of Sellers or their Subsidiaries, based upon
attorney work product or confidential attorney-client communication ("Privileged
Documents") and may in the future contain Privileged Documents of Purchaser, and
that there is no intention to waive any such privilege notwithstanding the
transfer of possession of the Books and Records to Purchaser pursuant to this
Agreement or the implementation of the procedures described in this Section
5.15.
(a) Purchaser shall notify UBOC of any third party claim or
commencement of any third party litigation or any third
party discovery request related to the Business arising out
of Sellers' conduct up to and including the Effective Time.
UBOC thereupon shall have the right to review the files
involved in such claim or litigation, to instruct Purchaser
to segregate into separate files any documents that UBOC
determines, in its sole discretion, are Privileged
Documents from the files, and to make and take copies of
any such Privileged Documents; PROVIDED THAT any such
review and segregation shall not unreasonably interfere
with Purchaser's business operations or the management of
the Business. Purchaser also may segregate any documents it
determines, in its sole discretion, are subject to the
privilege of Purchaser. UBOC will furnish Purchaser with a
"privilege log" of all such documents identified by it as
Privileged Documents.
(b) Subject to applicable Legal Requirements (with respect to
the interpretation of which Purchaser shall be entitled to
rely on the advice of its counsel), Purchaser shall not
turn over or make available any documents in any Books and
Records affected by any such claim or litigation to any
third
49
party in connection therewith until UBOC has had a
reasonable opportunity to complete its review as provided
in Section 5.17.1(a). In addition, Purchaser shall not turn
over any documents identified by UBOC as Privileged
Documents to any third party without having obtained UBOC's
written consent unless required to do so pursuant to valid
legal process (with respect to the interpretation of which
Purchaser shall be entitled to rely on the advice of its
counsel).
5.15.2 SELLERS PRIVILEGED INFORMATION. In the event any document which
is part of the Excluded Assets for which Sellers could assert a claim of
attorney-client privilege comes into the possession of or is otherwise disclosed
to Purchaser, Purchaser agrees that, except in connection with any claim by
Purchaser against Sellers or any of their Affiliates, (a) such disclosure was
inadvertent and is not a waiver of any privilege by Sellers, (b) subject to
applicable Legal Requirements (with respect to the interpretation of which
Purchaser shall be entitled to rely on the advice of its counsel), Purchaser
will not share such document with any Governmental Authority or third party and
(c) Purchaser will promptly return such document whenever found or at the
request of UBOC.
5.16 RESERVED.
5.17 UPDATED SCHEDULES. At least three (3) Business Days prior to each Closing
Date, Sellers shall provide Purchaser with updates of those Schedules that are
permitted to be "Updated as of the Closing" in accordance with the terms hereof.
Sellers will supplement or amend the applicable Schedules as of a Closing in
accordance with the terms hereof with respect to any matter hereafter arising
which, if existing or occurring at or prior to the date of this Agreement, would
have been required to be set forth or described in such Schedule or in any
representation and warranty made by Sellers which would have been rendered
inaccurate by the failure to supplement or amend the Schedules. Such
supplemental and/or amended Schedules shall be deemed to amend and restate such
original Schedules in their entirety as of the Closing with effect as of the
date of such Closing or such Effective Time and shall modify accordingly the
representations, warranties and covenants made in this Agreement as of such
time; provided, however, such supplemented and/or amended Schedules (i) shall
not qualify, or cure any breach of or inaccuracy in, any representation or
warranty in this Agreement made by Sellers on or as of the date hereof, and (ii)
shall not be taken into account for purposes of Section 6.1.1 and the
certificate to be delivered thereunder.
5.18 SECTION 314(B) OF THE PATRIOT ACT. Purchaser and UBOC desire to transmit,
receive or otherwise share information with one another regarding individuals,
entities, organizations, and countries for purposes of identifying and, where
appropriate, reporting activities that either suspects may involve possible
terrorist activity or money laundering, as contemplated by Section 314(b) of the
USA PATRIOT Act and 31 C.F.R. ss. 103.110 (together, "Section 314(b)"). As of
the date hereof, each of Purchaser and UBOC represents and warrants to, and
covenants with, the other that (i) it is a "financial institution" as such term
is defined in 31 CFR 103.110(a)(2), (ii) it has filed a notification with the
Financial Crimes Enforcement Network of the United States Department of the
Treasury that it intends to engage in the sharing of information with the other
regarding individuals, entities, organizations, and countries, as permitted by
Section 314(b), and will renew such notification so that such notification
continues in effect throughout the period that this Agreement remains in effect,
(iii) each of Purchaser and UBOC has established and will maintain adequate
procedures to safeguard the security and confidentiality of such information,
and (iv) information received by Purchaser and UBOC pursuant to Section 314(b)
will not be used for any purpose other than (x) identifying and, where
appropriate, reporting on activities that may involve terrorist or money
laundering activities, (y) determining whether to establish or maintain an
account or to engage in a transaction, or (z) assisting in complying with the
requirements of the Bank Secrecy Act and its implementing regulations. From and
after the date hereof until the Sellers' Shutdown Date, to the extent
permissible under Legal Requirements, Sellers shall transmit to and share with
Purchaser all information Sellers obtain with
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respect to any Customer that indicates or suggest that such Customer may be
involved, or in the past may have been involved, in any terrorist activity,
terrorist financing or money laundering.
5.19 [Reserved]
5.20 NON-DISCLOSURE AGREEMENTS. From and after the Closing, UBOC shall enforce
in a commercially reasonable manner, and shall cause its Affiliates to enforce
in a commercially reasonable manner, for the benefit of Purchaser, each
non-disclosure or confidentiality Contract entered into by Sellers or any of
their Affiliates with respect to any prospective purchaser of all or any portion
of the Business, in each case to the fullest extent permitted by Legal
Requirements and the terms and conditions of such Contracts.
5.21 Option to Acquire Certain Assets.
5.21.1 Prior to the Principal Closing Date, Purchaser may elect, in its
sole discretion, to acquire, for Book Value, any or all PEFCO stock that is
related to the Business. In such event, Purchaser shall notify Sellers of such
election not less than two (2) Business Days prior to the Principal Closing Date
and as of the Principal Closing such assets shall be deemed to be Purchased
Assets.
5.21.2 Prior to March 31, 2006, Purchaser may elect, in it sole
discretion, to acquire any or all Contracts of Sellers primarily related to,
primarily used in or primarily held for use in the Business other than (i)
Contracts with Affiliates of Sellers, (ii) this Agreement and the Related
Agreements, (iii) Business Leases, (iv) Contracts with professional advisors to
Sellers (including accountants, counsel, compensation consultants, investment
bankers and other consultants); (iii) Employee Plans or Contracts; (iv)
Contracts constituting Risk Asset Documents (which shall be governed by the
terms of the Risk Participation Agreement); (v) Contracts evidencing or
memorializing deposits or Contingent Risk Liabilities; (vi) any Contracts
governed by Section 5.23; or (vii) Contracts set forth on SCHEDULE 3.8 (other
than Sellers' Contracts with Cognizant and TATA America specified on such
SCHEDULE 3.8). In such event, Purchaser shall notify Sellers of such election
not less than two (2) Business Days prior to the Closing Date of the Business
Unit associated with such Contracts and as of such Closing such assets shall be
deemed to be Purchased Assets. In the event that any such Contracts are included
in the Purchased Assets pursuant to this Section 5.21.2, Purchaser shall pay to
Sellers (or, to the extent that the net Book Value is negative, Sellers shall
pay to Purchaser) the Book Value thereof (to the extent any Book Value has been
assigned to any such assets) consistent with the formulation for the
consideration to be paid for any Purchased Assets.
5.22 Risk Participation Assets.
5.22.1 At least two (2) Business Days prior to the Principal Closing Date,
Purchaser shall deliver to Sellers a copy of Schedule A to the Risk
Participation Agreement.
5.22.2 Neither this Agreement nor the Risk Participation Agreement shall
restrict Sellers from taking any actions after March 31, 2006 with respect to
their Risk Assets that are not Risk Participation Assets or Converted Risk
Assets (as defined in the Risk Participation Agreement).
5.23 IT ASSETS.
5.23.1 Prior to March 31, 2006, Purchaser may elect, in its sole
discretion, to acquire any or all of the Business IT Assets and Business
Intellectual Property Contracts. In such event, Purchaser shall notify Sellers
of such election not less than two (2) Business Days prior to the Closing Date
of the Business Unit using such Business IT Assets or Business Intellectual
Property Contracts and as of such Closing such assets shall be deemed to be
Purchased Assets.
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5.23.2 In the event that any Business IT Assets and any Business
Intellectual Property Contracts related thereto are included in the Purchased
Assets pursuant to Section 5.23.1:
(a) Purchaser shall pay the Book Value thereof (to the extent
any Book Value has been assigned to any such assets)
consistent with the formulation for the consideration to be
paid for any Purchase Assets;
(b) Purchaser shall reimburse Sellers for any reasonable fees
payable by Sellers to any third party to obtain any
approval or consent required to be obtained from such third
party in order for the transfer of the Business IT Assets
by Sellers to Purchaser to be effective;
(c) Purchaser hereby grants to Sellers and their Affiliates
irrevocable, non-exclusive, worldwide, royalty-free,
non-transferable right and license (to the extent Purchaser
has the right to grant sublicenses) to use such Business IT
Assets and Business Intellectual Property Contracts, solely
to the extent, and for the time period, necessary for
Sellers and their Affiliates to conduct the Business as
conducted through the relevant Business Unit pursuant to
the Conversion Protocols, for the wind-down of Sellers'
Business operations (including with respect to Excluded
Accounts), for maintenance of records with respect to
discontinued Business operations and for use in connection
with operations that do not constitute Prohibited Services;
and.
(d) Notwithstanding any other provision of this Agreement,
Sellers and their Affiliates shall not sublicense, assign
or transfer (by operation of law or otherwise except as a
result of any merger, consolidation or other acquisition of
Sellers or any of their Affiliates) to any third party, or
otherwise provide any benefit to any third party utilizing,
any Excluded Business IT Asset or Excluded Business
Intellectual Property Contract.
ARTICLE VI
CONDITIONS PRECEDENT TO THE OBLIGATION
OF PURCHASER TO CLOSE
6.1 CONDITIONS PRECEDENT TO PRINCIPAL CLOSING. Notwithstanding any other
provision of this Agreement, Purchaser's obligation to consummate the Principal
Closing is subject to the fulfillment on or prior to the Principal Closing Date
of the following conditions, any one or more of which may be waived by
Purchaser.
6.1.1 REPRESENTATIONS, WARRANTIES AND COVENANTS. The representations
and warranties of Sellers contained in this Agreement, other than the
representations and warranties of Sellers contained in Sections 3.1, 3.2, 3.3,
3.4 and 3.19, shall be true and correct on the date of this Agreement and as of
the Principal Closing with the same force and effect as though made as of the
Principal Closing, except that any such representations and warranties that are
given as of a particular date and relate solely to a particular date or period
shall be true and correct as of such date or period, and except when the failure
to be true and correct (without regard to any materiality qualifiers therein)
would not, individually or in the aggregate, be reasonably likely to have a
Material Adverse Effect. The representations and warranties of Sellers contained
in Sections 3.1, 3.2, 3.3, 3.4 and 3.19 shall be true and correct in all
respects on the date of this Agreement and as of the Principal Closing with the
same force and effect as though made as of the Principal Closing. Sellers shall
have performed and complied in all material respects with the covenants and
agreements required
52
by this Agreement to be performed or complied with by Sellers on or prior to the
Principal Closing. On the Principal Closing Date, Sellers shall have delivered
to Purchaser a certificate dated the Principal Closing Date, and signed by a
senior officer of each Seller, to the effect that the conditions set forth in
this Section 6.1.1 have been satisfied.
6.1.2 RELATED AGREEMENTS. The Related Agreements required by Section
2.7 with respect to the Principal Closing shall have been duly executed and
delivered by Sellers on or prior to the Principal Closing Date, and such
agreements shall be in full force and effect with respect to Sellers as of the
Principal Closing.
6.1.3 APPROVALS AND CONSENTS. All approvals and authorizations of,
filings and registrations with, notifications to and all other transactions by
or in respect of, any Governmental Authority with respect to the Principal
Business Unit and described on SCHEDULE 3.19 and SCHEDULE 4.5 shall have been
obtained or made and shall be in full force and effect, in each case without any
conditions, restrictions or limitations which in the aggregate would have a
Material Adverse Effect on the Business or have a Substantial Detriment on
Purchaser, and all applicable waiting periods for the Principal Closing under
any federal, state or foreign jurisdiction statute or regulation shall have
expired or been terminated. The approvals and consents of any Person other than
a Governmental Authority with respect to the Principal Business Unit set forth
on SCHEDULE 3.19 and SCHEDULE 4.5 shall have been received or deemed received,
in each case without any unreceived approvals or consents, or conditions,
restrictions or limitations imposed on such consents, which in the aggregate
would have a Material Adverse Effect on the Business; PROVIDED, HOWEVER, that,
if Sellers cannot obtain any such consent from a Person other than a
Governmental Authority, Sellers shall have the option to carry out the
arrangements specified in Section 5.10.2 in accordance therewith, in which event
the condition contained in this Section 6.1.4 shall be deemed satisfied.
6.1.4 INJUNCTION AND LITIGATION. There shall not be in effect any
injunction, writ, preliminary restraining order or other order issued by any
court of competent jurisdiction directing that the Principal Closing not be
consummated as herein or therein provided, and there shall not be pending or
threatened in writing any action by any Governmental Authority for any such
judicial or administrative relief.
6.1.5 MATERIAL ADVERSE EFFECT. Since the date hereof, there shall not
have been any change, event or circumstance with respect to the Business which
is a Material Adverse Effect.
6.2 CONDITIONS PRECEDENT TO SUBSEQUENT CLOSINGS. Notwithstanding any other
provision of this Agreement, Purchaser's obligation to consummate each Closing
(other than the Principal Closing) is subject to the fulfillment on or prior to
the Closing Date for each such other Closing of the following conditions, any
one or more of which may be waived by Purchaser.
6.2.1 PRINCIPAL CLOSING. The Principal Closing shall have been
consummated.
6.2.2 COVENANTS. Sellers shall have performed and complied in all
material respects with the covenants and agreements of Article II with respect
to such Closing required by this Agreement to be performed or complied with by
Sellers on or prior to such Closing Date. On the applicable Closing Date,
Sellers shall have delivered to Purchaser a certificate dated such Closing Date,
and signed by a senior officer of each Seller, to the effect that the conditions
set forth in this Section 6.2.2 have been satisfied.
6.2.3 RELATED AGREEMENTS. The Related Agreements required by Section
2.7 with respect to such Closing shall have been duly executed and delivered by
Sellers on or prior to the Closing Date therefor, and such agreements shall be
in full force and effect with respect to Sellers as of such Closing.
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6.2.4 APPROVALS AND CONSENTS. All approvals and authorizations of,
filings and registrations with, notifications to and all other transactions by
or in respect of, any Governmental Authority with respect to the Business Unit
which is the subject of such Closing described on SCHEDULE 3.19 and SCHEDULE 4.5
shall have been obtained or made and shall be in full force and effect, in each
case without any conditions, restrictions or limitations which in the aggregate
would have a Material Adverse Effect on the Business, and all applicable waiting
periods for such Closing under any federal, state or foreign jurisdiction
statute or regulation shall have expired or been terminated. The approvals and
consents of any Person other than a Governmental Authority with respect to the
Business Unit which is the subject of such Closing set forth on SCHEDULE 3.19
and SCHEDULE 4.5 shall have been received or deemed received, in each case
without any unreceived approvals or consents, or conditions, restrictions or
limitations imposed on such consents, which in the aggregate would have a
Material Adverse Effect on the Business; PROVIDED, HOWEVER, that, if Sellers
cannot obtain any such consent from a Person other than a Governmental
Authority, Sellers shall have the option to carry out the arrangements specified
in Section 5.10.2 in accordance therewith, in which event the condition
contained in this Section 6.2.4 shall be deemed satisfied.
6.2.5 INJUNCTION AND LITIGATION. There shall not be in effect any
injunction, writ, preliminary restraining order or other order issued by any
court of competent jurisdiction directing that such Closing not be consummated
as herein or therein provided, and there shall not be pending or threatened in
writing any action by any Governmental Authority for any such judicial or
administrative relief.
6.3 SUBSEQUENT CLOSINGS. Purchaser acknowledges and agrees that each Closing
after the Principal Closing shall occur once the conditions in Section 6.2 with
respect to such Closing are satisfied, and Purchaser shall not delay or prevent
such Closing regardless of any breach or default under this Agreement or any
Related Agreement (other than a failure to satisfy the conditions for such
Closing set forth in Section 6.2) and regardless of any event or condition,
whether or not constituting a Material Adverse Effect, that may have occurred on
or prior to such Closing. Purchaser agrees that the conditions for each Closing
(other than the Principal Closing) shall not include the accuracy of the
representations and warranties made by Sellers and/or the compliance with the
covenants undertaken by Sellers set forth herein (other than a failure to
satisfy the conditions for such Closing set forth in Section 6.2) or in any
Related Agreement or the absence of any change, event or circumstance with
respect to the Business which is a Material Adverse Effect.
ARTICLE VII
CONDITIONS PRECEDENT TO THE OBLIGATION
OF SELLERS TO CLOSE
7.1 CONDITIONS PRECEDENT TO PRINCIPAL CLOSING. Notwithstanding any other
provision of this Agreement, Sellers' obligation to consummate the Principal
Closing is subject to the fulfillment on or prior to the Principal Closing Date
of the following conditions, any one or more of which may be waived by UBOC.
7.1.1 REPRESENTATIONS, WARRANTIES AND COVENANTS. The representations
and warranties of Purchaser contained in this Agreement shall be true and
correct on the date of this Agreement and on the Principal Closing Date with the
same force and effect as though made as of the Principal Closing, except that
any such representations and warranties that are given as of a particular date
and relate solely to a particular date or period shall be true and correct as of
such date or period, and except where the failure to be true and correct
(without regard to any materiality qualifiers therein) would not, individually
or in the aggregate, impair the ability of Purchaser to perform its obligations
under this Agreement and the Related Agreements. Purchaser shall have performed
and complied in all material respects with the covenants and agreements required
by this Agreement to be performed or complied with by Purchaser on or prior to
the Principal Closing Date. Purchaser shall have delivered to UBOC a certificate
dated the Principal Closing Date, and
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signed by a senior officer of Purchaser, to the effect that the conditions set
forth in this Section 7.1.1 have been satisfied.
7.1.2 RELATED AGREEMENTS. The Related Agreements required by Section
2.7 with respect to the Principal Closing to which Purchaser is a Party shall
have been duly executed and delivered by Purchaser on or prior to the Principal
Closing Date and such agreements shall be in full force and effect with respect
to Purchaser as of the Principal Closing.
7.1.3 APPROVALS AND CONSENTS. All approvals and authorizations of,
filings and registrations with, notifications to and all other transactions by
or in respect of, any Governmental Authority with respect to the Principal
Business Unit and described on SCHEDULE 3.19 and SCHEDULE 4.5 shall have been
obtained or made and shall be in full force and effect, in each case without any
conditions, restrictions or limitations which in the aggregate would materially
impair the ability of Purchaser to perform its obligations under this Agreement
and the Related Agreements or have a Substantial Detriment on Sellers, and all
applicable waiting periods for the Principal Closing under any federal, state or
foreign jurisdiction statute or regulation shall have expired or been
terminated. The approvals and consents of any Person other than a Governmental
Authority with respect to the Principal Business Unit set forth on SCHEDULE 3.19
and SCHEDULE 4.5 shall have been received or deemed received, in each case
without any unreceived approvals or consents, or conditions, restrictions or
limitations imposed on such consents, which in the aggregate would materially
impair the ability of Purchaser to perform its obligations under this Agreement
and the Related Agreements.
7.1.4 INJUNCTION AND LITIGATION. There shall not be in effect any
injunction, writ, preliminary restraining order or other order issued by any
court of competent jurisdiction directing that the Principal Closing not be
consummated as herein or therein provided, and there shall not be pending or
threatened in writing any action by any Governmental Authority for any such
judicial or administrative relief.
7.2 CONDITIONS PRECEDENT TO SUBSEQUENT CLOSINGS. Notwithstanding any other
provision of this Agreement, Sellers' obligation to consummate each Closing
(other than the Principal Closing) is subject to the fulfillment on or prior to
the Closing Date for each such other Closing of the following conditions, any
one or more of which may be waived by UBOC.
7.2.1 PRINCIPAL CLOSING. The Principal Closing shall have been
consummated.
7.2.2 COVENANTS. Purchaser shall have performed and complied in all
material respects with the covenants and agreements of Article II with respect
to such Closing required by this Agreement to be performed or complied with by
Purchaser on or prior to such Closing Date. On the applicable Closing Date,
Purchaser shall have delivered to Sellers a certificate dated such Closing Date,
and signed by a senior officer of Purchaser, to the effect that the conditions
set forth in this Section 7.2.2 have been satisfied.
7.2.3 RELATED AGREEMENTS. The Related Agreements required by Section
2.7 with respect to the Closing shall have been duly executed and delivered by
Purchaser on or prior to the Closing Date, and such agreements shall be in full
force and effect with respect to Purchaser as of the Closing.
7.2.4 APPROVALS AND CONSENTS. All approvals and authorizations of,
filings and registrations with, notifications to and all other transactions by
or in respect of, any Governmental Authority with respect to the Business Unit
which is the subject of such Closing and described on SCHEDULE 3.19 and SCHEDULE
4.5 shall have been obtained or made and shall be in full force and effect, in
each case without any conditions, restrictions or limitations which would
materially impair the ability of Purchaser to perform its obligations under this
Agreement and the Related Agreements, and all applicable waiting periods for
such Closing under any federal, state or foreign jurisdiction statute or
regulation shall have expired or been terminated. The approvals and consents of
any Person other than a Governmental Authority with respect to
55
the Business Unit which is the subject of such Closing set forth on SCHEDULE
3.19 and SCHEDULE 4.5 shall have been received or deemed received, in each case
without any unreceived approvals or consents, or conditions, restrictions or
limitations imposed on such consents, which would materially impair the ability
of Purchaser to perform its obligations under this Agreement and the Related
Agreements.
7.2.5 INJUNCTION AND LITIGATION. There shall not be in effect any
injunction, writ, preliminary restraining order or other order issued by any
court of competent jurisdiction directing that such Closing not be consummated
as herein or therein provided, and there shall not be pending or threatened in
writing any action by any Governmental Authority for any such judicial or
administrative relief.
7.3 SUBSEQUENT CLOSINGS. Sellers acknowledge and agree that each Closing after
the Principal Closing shall occur once the conditions in Section 7.2 are
satisfied and Sellers shall not delay or prevent such Closing regardless of any
breach or default under this Agreement or any Related Agreement (other than a
failure to satisfy the conditions for such Closing set forth in Section 7.2).
Sellers agree that the conditions for each Closing (other than the Principal
Closing) shall not include the accuracy of the representations and warranties
made by Purchaser and/or the compliance with the covenants undertaken by
Purchaser set forth herein (other than a failure to satisfy the conditions for
such Closing set forth in Section 7.2) or in any Related Agreement.
ARTICLE VIII
TAX MATTERS
8.1 POST-CLOSING ACCESS TO RECORDS; COOPERATION. After the Principal Effective
Time, UBOC and Purchaser will each afford (or cause its respective Affiliates to
afford) to the other or to such other's representatives or agents reasonable
access during normal business hours (on terms not unreasonably disruptive to the
business, operations or employees of the Party or Parties of which access is
sought) to the records and all other data and information relating to Taxes with
respect to the Business pertaining to taxable years or periods ending at or
prior to the Principal Effective Time and to Sellers' employees, the Accepting
Employees or such other employees providing services in respect of the Business
and auditors for the purpose of obtaining information relating to Taxes, to the
extent such access is reasonably necessary: (i) to prepare and complete any Tax
Returns required to be made hereunder; (ii) to prosecute or defend litigation or
administrative controversies controlled by Sellers or Purchaser, as the case may
be, under Section 8.2 of this Agreement; and (iii) to comply with requests made
by any Tax Authority conducting an audit, investigation or inquiry relating to
Sellers' activities. After the Principal Closing, Purchaser and Sellers agree
(i) to retain all books and records with respect to Tax matters pertinent to the
Business relating to any Tax period beginning before the Principal Effective
Time until the expiration of the statute of limitations (and, to the extent
notified by Purchaser or UBOC, any extensions thereof) of the respective Tax
periods, and to abide by all record retention agreements entered into with any
Governmental Authority; and (ii) to give the other Party hereto reasonable
written notice prior to transferring, destroying or discarding any such books
and records and, if the other Party so requests, Purchaser or Sellers, as the
case may be, shall allow the other Party hereto to take possession of such books
and records.
8.2 Allocation of Taxes; Tax Returns
(a) Notwithstanding any Legal Requirements or anything herein
to the contrary, each of Purchaser and Sellers shall be
responsible for and shall pay fifty percent (50%) of any
Transfer Taxes when due, Purchaser shall, at its own
expense, file all necessary Tax Returns and other
documentation with respect to all such Transfer Taxes;
PROVIDED, HOWEVER, that, if required by any
56
Legal Requirement, Sellers will join in the execution of
any such Tax Returns and other documentation.
(b) Sellers shall be responsible for, shall pay and shall
indemnify Purchaser for any Taxes arising or resulting from
or in connection with the conduct of each Business Unit or
the ownership of the Purchased Assets of such Business Unit
attributable to the Pre-Closing Period applicable thereto.
Purchaser shall be responsible for, shall pay and shall
indemnify Seller for any Taxes arising or resulting from or
in connection with the conduct of each Business Unit or the
ownership of the Purchased Assets of such Business Unit
attributable to the Post-Closing Period applicable thereto.
(c) Where it is necessary to apportion between Purchaser and
Sellers the Tax liability for a period which includes both
Pre-Closing Periods and Post-Closing Periods, such
liability shall be apportioned between the period deemed to
end on the day of the Effective Time of such Closing, and
the period deemed to begin at the beginning of the day
following the Effective Time of such Closing on the basis
of an interim closing of the books, except that Taxes
(including but not limited to real property Taxes) imposed
on a periodic basis shall be allocated on a daily basis.
(d) Sellers shall prepare and file all Tax Returns for each
Business Unit to be filed on or before the Effective Time
for the Closing applicable to such Business Unit and all
Tax Returns to be filed after a Closing for the Pre-Closing
Period applicable thereto Except as set forth in the
preceding sentence, Purchaser shall prepare all Tax Returns
for each Business Unit due to be filed after the applicable
Closing therefor. Taxes due on any such Tax Returns shall
be paid pursuant to the other provisions of this Agreement.
8.3 ADDITIONAL TAX MATTERS. Except as necessary to comply with any Legal
Requirement, the Parties shall treat the Purchased Assets and the Business of a
Business Unit as transferred to Purchaser as of the Effective Time of the
Closing therefor. The Parties shall report the purchase and sale of the
Purchased Assets and the Business consistently for Tax purposes pursuant to the
terms of this Section 8.3.
8.4 SURVIVAL. Notwithstanding any other provision of this Agreement, each
provision of this Article VIII shall survive the Principal Closing and
subsequent Closings to the survival of the applicable statute of limitations
with respect to such provision.
ARTICLE IX
TERMINATION
9.1 TERMINATION. This Agreement may be terminated with the effects described in
Section 9.2 hereof at any time prior to the Principal Closing Date:
(a) by mutual agreement of Purchaser and UBOC;
(b) by Purchaser if any condition set forth in Section 6.1.1
becomes incapable of satisfaction as of the Principal
Closing (other than as a result of a breach or default by
Purchaser in its representations and warranties or the
57
performance of its obligations hereunder), except for those
conditions which, by their nature, are to be satisfied as
of the Principal Closing; provided that noncompliance with
covenants as set forth in Section 6.1.1. shall not serve as
the basis for termination unless such noncompliance is
incapable of being cured as of the Principal Closing or has
continued without cure for a period of thirty days after
notice thereof by Purchaser to UBOC;
(c) by UBOC if any condition set forth in Section 7.1.1 becomes
incapable of satisfaction as of the Principal Closing
(other than as a result of a breach or default by any
Seller in its representations and warranties or the
performance of its obligations hereunder), except for those
conditions which, by their nature, are to be satisfied as
of the Principal Closing; provided that noncompliance with
covenants as set forth in Section 7.1.1. shall not serve as
the basis for termination unless such noncompliance is
incapable of being cured as of the Principal Closing or has
continued without cure for a period of thirty days after
notice thereof by UBOC to Purchaser;
(d) by Purchaser if, subsequent to the date hereof and prior to
the Principal Closing, there occurs a Material Adverse
Effect, and such Material Adverse Effect is incapable of
being cured or has continued without cure for a period of
sixty days after notice thereof by Purchaser to UBOC; or
(e) by Purchaser or UBOC if the Principal Closing has not
occurred on or before the Outside Principal Closing Date
(unless the failure to close results primarily from a
breach by Purchaser or any Seller, as the case may be, of
any representation, warranty or covenant of Purchaser or
such Seller, as the case may be, contained in this
Agreement or Purchaser's or any Seller's, as the case may
be, failure to fulfill a condition precedent to the
Principal Closing or another default by Purchaser or any
Seller, as the case may be).
9.2 PROCEDURE OF TERMINATION. In the event of termination of this Agreement
pursuant to Section 9.1 hereof, written notice of termination shall be given
pursuant to the notice provisions herein, and the transactions contemplated by
this Agreement shall be terminated without further action by any Party. If the
transactions contemplated by this Agreement are terminated as provided herein,
no Party hereto shall have any liability to any other Party hereto or their
respective Affiliates, or their respective directors, officers or employees,
except:
(a) Purchaser and UBOC shall return or destroy all documents,
work papers and other material of any other Party relating
to the transactions contemplated hereby or by the Related
Agreements, whether so obtained before or after the
execution hereof, upon the written request of the Party
furnishing the same;
(b) such termination shall not in any way limit or restrict the
rights and remedies of any Party hereto against any other
Party or any other Person which has breached any of the
representations, warranties, covenants, agreements or other
provisions of this Agreement prior to the termination
hereof; and
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(c) any confidentiality obligations of the Parties (arising
under this Agreement or under any other confidentiality
agreement entered into by UBOC and Purchaser) and the
obligations of the Parties under Article X and Section
11.8, and any other obligations of the Parties which by
their terms survive the termination of this Agreement,
shall survive the termination of this Agreement.
ARTICLE X
INDEMNIFICATION
10.1 UBOC'S INDEMNIFICATION. In addition to any other provisions of this
Agreement or any Related Agreement under which UBOC or any of its Affiliates has
agreed to indemnify Purchaser and except as otherwise expressly provided in this
Agreement, UBOC shall indemnify and hold Purchaser and its Affiliates,
directors, officers, agents and employees harmless from and against any Loss
arising or resulting from:
(a) Any breach of any representation or warranty of Sellers
contained in this Agreement or the Related Agreements or
certificate furnished or to be furnished to Purchaser
hereunder, in each case without giving effect to any
updates of SCHEDULES 3.6.5(B), 3.6.6(B), 3.7, 3.8(B),
3.9.4, 3.13.3, 3.13.4, 3.14 and 3.18 that may be made by
Sellers in connection with the Principal Closing pursuant
to Section 5.17;(1) provided, that for purposes of this
Section 10.1(a), any qualifications as to materiality or
Material Adverse Effect or other similar materiality
qualifications included in such representation or warranty
shall be disregarded for purposes of determining whether
such representation or warranty was breached;
(b) Any nonfulfillment of any agreement on the part of Sellers
or any of their Affiliates under this Agreement or the
Related Agreements;
(c) The Excluded Obligations (other than Taxes of Sellers with
respect to the Pre-Closing Period); and
(d) Any Taxes of Sellers with respect to the Pre-Closing
Period.
In the case of any action, event or omission described in Section
10.1(a), (b), (c) and (d) that continues after the Effective Time, UBOC shall be
responsible for indemnification for the period prior to the Effective Time, and
the responsibility of UBOC and Purchaser for such action, event or omission
after the Effective Time shall be apportioned between them according to
equitable allocation principles (except for Taxes, which shall be apportioned in
accordance with Section 8.2(c)), taking into account, INTER ALIA, the time at
which Purchaser had knowledge of, and any ability to mitigate, such action,
event or omission after the Effective Time.
10.2 PURCHASER'S INDEMNIFICATION. In addition to any other provisions of this
Agreement or any Related Agreement under which Purchaser has agreed to indemnify
Sellers or any of their Affiliates, and except as otherwise expressly provided
in this Agreement, Purchaser shall indemnify and hold Sellers and
__________________
(1) 3.10 is not subject to updating.
59
their Affiliates and their respective directors, officers, agents and employees
harmless from and against any Loss resulting from:
(a) Any breach of any representation or warranty of Purchaser
contained in this Agreement or the Related Agreements or
any certificate furnished or to be furnished to Sellers
hereunder; provided, that for purposes of this Section
10.2(a), any qualifications as to materiality or Material
Adverse Effect or other similar materiality qualifications
included in such representation or warranty shall be
disregarded for purposes of determining whether such
representation or warranty was breached;
(b) Any nonfulfillment of any agreement on the part of
Purchaser under this Agreement or the Related Agreements;
(c) The Assumed Obligations; and
(d) Any Taxes of Purchaser for the Post-Closing Period.
10.3 CONDITIONS OF INDEMNIFICATION. The respective obligations and liabilities
of UBOC and Purchaser (herein sometimes called the "Indemnifying Party") to the
other and the other Persons entitled to indemnification (herein sometimes called
the "Indemnified Party") under Section 5.5, Sections 8.2(b), 10.1 and 10.2
hereof shall be subject to the following terms and conditions:
(a) UBOC and Purchaser each agree to designate a single point
of contact within each of their respective corporate
organizations to give and receive notices of disputes under
this Agreement and the Related Agreements (the "Dispute
Officer"), who shall be reasonably acceptable to the other
Party and shall be a senior manager who either reports
directly to the Chief Executive Officer or a person who
reports to a person who reports directly to the Chief
Executive Officer. In the event of any claim against
Purchaser or UBOC covered by Section 8.2(b), Section 5.5 or
this Article X that does not involve a claim, audit or
inquiry by a third party to which a response must be served
in order to avoid default or waiver of any defense,
Purchaser and UBOC agree that for a period of not less than
15 days following receipt of the claim by the Party against
which the claim has been asserted, they each will respond
to reasonable inquiries by the other Party and will hold at
least one meeting in person or by telephone conference of
the Dispute Officers to attempt to resolve the claim and to
provide prompt reimbursement to the Indemnified Party of
the amount agreed to be owed to such Indemnified Party. To
the extent that any amount of any claim remains in dispute
at the end of the agreed period for consideration by the
Dispute Officers, which shall not be less than 15 days
following receipt of the claim by the Party against whom
the claim has been made, the Indemnified Party seeking
recovery may proceed with its claim under Section 10.3(b).
Any undisputed portion of any invoice or other claim that
has been submitted pursuant to this Section 10.3 shall be
paid to the Indemnified Party to which such amount is owed
within 15 days of the later of (i) the date the invoice or
claim is received by the Indemnifying Party, (ii) the date
a bona fide dispute over such portion is resolved by
agreement of the Parties, or (iii) if a bona fide dispute
is not resolved by agreement, the date such dispute is
otherwise finally resolved. Amounts not paid within
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the time limits provided in this Section 10.3(a) shall bear
interest at the Contract Interest Rate.
(b) On or before the earliest of (i) the 20th day after receipt
of notice (referred to herein as "notice") by the
Indemnified Party of commencement of any action or the
assertion in writing, formal or informal, of any claim,
audit or inquiry by a third person (referred to herein as a
"claim"), (ii) the 45th day after the determination by the
Indemnified Party of the existence of any potential claim,
(iii) the tenth day preceding the day on which a responsive
pleading must be served in order to prevent judgment by
default in favor of the Person asserting a claim (but only
if the Indemnified Party has knowledge of a claim as of
such time), and (iv), in the case of a claim described in
(a) above, the 30th day after expiration of the agreed
period of consideration by the Dispute Officers, the
Indemnified Party shall give the Indemnifying Party written
notice thereof together with a copy of the document
asserting such claim. Failure to give such notice timely
shall not relieve the Indemnifying Party from any
obligation under this Agreement except to the extent that
the Indemnifying Party is prejudiced, except that the
Indemnifying Party shall not be responsible for expenses
incurred by the Indemnified Party during the period within
which the Indemnified Party failed to give such notice. The
Indemnifying Party shall have the right to respond to such
claim and to undertake the defense thereof by a
representative of its own choosing (which shall be
reasonably satisfactory to the Indemnified Party) and to
enter into a settlement or compromise thereof or consent to
a judgment with respect thereto; PROVIDED, HOWEVER, the
Indemnifying Party shall not, without the prior written
consent of the Indemnified Party, settle or compromise any
claim by any third party or consent to the entry of
judgment (i) that does not include as an unconditional term
thereof the giving by the claimant or the plaintiff to the
Indemnified Party a release from all liability in respect
of such claim, (ii) that would result in the imposition of
any order, writ, injunction or decree that would restrict
the future activity or conduct of the Indemnified Party or
any of its successors or assigns, (iii) that would include
an explicit finding or admission of a violation of Legal
Requirements or the violation of the rights of any Person
by an Indemnified Party, (iv) that would result in an
explicit finding or admission that would have a material
adverse effect on other claims made or threatened against
the Indemnified Party or any of its Affiliates, or (v) that
contemplates any payment or performance by the Indemnified
Party. The Indemnified Party may retain separate counsel at
its sole cost and expense to represent it in any
proceedings involving any claim; PROVIDED, that if (i) the
Indemnified Party and the Indemnifying Party are both named
parties to such proceedings and the Indemnified Party shall
have reasonably concluded and specifically notified the
Indemnifying Party that representation of both parties by
the same counsel would be inappropriate due to actual or
potential differing interests between them, or (ii) the
Indemnified Party assumes the defense of a claim after the
Indemnifying Party has failed to diligently pursue such
claim it has assumed (as provided in Section 10.3(c)), the
Indemnified Party may retain separate counsel, but no more
than one such counsel, to represent it in such proceedings
at the reasonable cost and expense of the Indemnifying
Party.
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(c) In the event that (i) by the 20th day after receipt of
notice of a claim by a third party (or, if earlier, by the
fifth day preceding the day on which a responsive pleading
must be served in order to prevent judgment by default in
favor of the Person asserting such claim), the Indemnifying
Party does not elect to defend against such claim, (ii) the
Indemnifying Party elects to defend the claim but does not
provide reasonable assurances to the Indemnified Party of
the Indemnifying Party's (or its insurer's) ability to pay
defense costs and indemnity costs likely to be incurred
with respect to the claim by the 20th day after receipt of
notice of a claim by a third party (or, if earlier, by the
fifth day preceding the day on which a responsive pleading
must be served in order to prevent judgment by default in
favor of the Person asserting such claim), or (iii) the
Indemnified Party at any time reasonably determines that
the Indemnifying Party is not actively and diligently
defending a claim, the Indemnified Party will, upon notice
to the Indemnifying Party, have the right to respond to
such claim and to undertake to defend, compromise or settle
such claim on behalf of and for the account and risk of
loss of the Indemnifying Party (including the right to be
reimbursed), PROVIDED THAT the Indemnifying Party shall be
given at least five (5) Business Days' prior written notice
of the effectiveness of any such proposed settlement or
compromise.
(d) In connection with any such indemnification, the
Indemnified Party shall cooperate in all reasonable
requests of the Indemnifying Party, including by making
commercially reasonable efforts to mitigate, whether by
seeking claims against a third party, an insurer or
otherwise, any Losses in respect of such claim or liability
and to resolve any such claim or liability.
(e) Each Indemnified Party shall be entitled to indemnification
hereunder notwithstanding whether such Indemnified Party
had (i) (A) in the case of indemnification pursuant to any
of Sections 10.1(a), 10.1(c), 10.1(d), 10.2(a), 10.2(c) or
10.2(d), knowledge of the facts that give rise to the
claimed breach, Assumed Obligations, Excluded Obligations
or Taxes, as the case may be, with respect to which such
Indemnified Party is seeking indemnification hereunder and
(B) in the case of indemnification for Losses pursuant to
either of Sections 10.1(b) or 10.2(b), knowledge of the
facts that give rise to the claimed breach (but only to the
extent that the Indemnified Party did not consent to the
action or omission alleged to constitute such breach in
writing) and/or (ii) an opportunity to obtain and/or review
any information regarding, or to investigate, the Business,
the Parties hereto or any of their respective Affiliates or
the transactions contemplated by this Agreement.
10.4 INDEMNIFICATION LIMITS.
10.4.1 EXCLUSIONS FROM INDEMNIFICATION. Required payments by an
Indemnifying Party pursuant to Sections 10.1 or 10.2 shall be limited to the
amount of any Loss remaining after deducting therefrom (i) any insurance
proceeds actually recovered by the Indemnified Party on account of the Loss, and
(ii) any indemnity, contribution, or other similar payment actually recovered by
any Indemnified Party from any third party, in each case with respect to such
Loss. The Indemnified Party shall use commercially reasonable efforts to collect
all such indemnity, contribution or other similar payments. Without limiting the
foregoing, if an Indemnified Party receives any payment from an Indemnifying
Party in respect of Losses
62
indemnifiable under this Agreement (whether or not under Article X) and the
Indemnified Party later recovers all or a part of such Losses from a third party
based on the underlying claim or demand asserted against such Indemnifying
Party, then such Indemnified Party shall promptly pay to the Indemnifying Party
the amount of such Losses to the extent recovered from such third party.
10.4.2 RIGHT OF SUBROGATION. With the Indemnified Party's consent,
which shall not be unreasonably withheld or delayed, the Indemnifying Party
shall be subrogated with respect to any rights the Indemnified Party may have
against any third party in connection with any Losses suffered by the
Indemnified Party and paid by the Indemnifying Party, and the Indemnified Party
agrees to execute and deliver all documents and take all other actions
reasonably requested by the Indemnifying Party to effect such subrogation.
10.4.3 TIME LIMITS. Neither Purchaser nor UBOC shall have any
obligation to indemnify the other or any other Indemnified Party for any
inaccuracy of any representation or warranty or from any misrepresentation in
any certificate furnished or to be furnished hereunder unless on or before a
date eighteen months after the Principal Closing Date (or, if the Agreement is
terminated pursuant to Article IX, one year after the date hereof), the Party
seeking indemnification notifies the other Party of a claim specifying the
factual basis for the claim in reasonable detail to the extent then known by the
Party seeking indemnification. The foregoing limit shall not apply, expressly or
by implication, (i) to claims based on Sections 3.1, 3.2, 3.3, 3.4, 3.6.7, 4.1,
4.2 and 4.6, each of which shall survive indefinitely, (ii) to claims based on
Sections 3.12, 10.1(d) or 10.2(d) or the covenants in Article VIII, which shall
survive, as to each Tax Period to which such representation or covenant applies,
until the closing of the statute of limitations with respect to such Tax period,
and (iii) to claims arising under Sections 10.1(b), 10.1(c), 10.2(b) and
10.2(c), which shall survive indefinitely.
10.4.4 LIMITATIONS ON AMOUNT.
(a) UBOC shall have no obligation to indemnify Purchaser or any
other Indemnified Party under Section 10.1(a) unless (i)
the amount of Purchaser's or such other Indemnified Party's
claim exceeds $25,000 with respect to any single Loss or
series of related Losses, (ii) the aggregate amount of such
indemnifiable claims previously paid by Purchaser and the
other Indemnified Parties shall exceed $2,500,000, and
thereafter UBOC shall be responsible only for the excess of
such aggregate amount over $2,500,000; PROVIDED, HOWEVER,
that in no event shall the aggregate of all indemnifiable
claims paid by UBOC to Purchaser and the other Indemnified
Parties under Section 10.1(a) exceed $75,000,000.
(b) Purchaser shall have no obligation to indemnify Sellers or
any other Indemnified Party under Section 10.2(a) unless
(i) the amount of Sellers' or such other Indemnified
Party's claim exceeds $25,000 with respect to any single
Loss or series of Related Losses, (ii) the aggregate amount
of such indemnifiable claims previously paid by Sellers and
the other Indemnified Parties shall exceed $2,500,000, and
thereafter Purchaser shall be responsible only for the
excess of such aggregate amount over $2,500,000; PROVIDED,
HOWEVER, that in no event shall the aggregate of all
indemnifiable claims paid by Purchaser to Sellers and the
other Indemnified Parties under Section 10.2(a) exceed
$75,000,000.
(c) Notwithstanding anything to the contrary in this Agreement,
(x) none of the limitations described in this Section
10.4.4 shall apply with respect to
63
any indemnity payments pursuant to breaches of the
representations and warranties in Section 3.12 or pursuant
to the provisions of Article VIII and (y) the $25,000 limi-
tations described in clauses (i) of each of Sections
10.4.4(a) and 10.4.4(b) shall not apply to any indemnity
payments pursuant to any breaches of the representations
and warranties in Sections 3.5.4., 3.6.7 or 4.9.
10.4.5 EXCLUSIVE REMEDY. The Parties expressly acknowledge that the
provisions of this Article X shall be the sole and exclusive remedy for damages
caused as a result of breaches of the representations, warranties and agreements
contained in this Agreement (except to the extent additionally provided in
Article VIII, other than in respect of any claim of fraud or for any breach of
this Article X), the Related Agreements and any certificate furnished or to be
furnished hereunder, except that the remedies of injunction and specific
performance shall remain available to the Parties hereto.
ARTICLE XI
MISCELLANEOUS PROVISIONS
11.1 NOTICES. Any notice, request or other communication to be given by any
Party hereunder shall be in writing and shall be delivered personally, sent by
registered or certified mail, postage prepaid, by overnight courier with written
confirmation of delivery or by facsimile transmission with written confirmation
of error-free transmission. Any such notice shall be deemed given when so
delivered personally or sent by facsimile transmission (and immediately after
transmission confirmed by telephone), if mailed, on the date shown on the
receipt therefor, or if sent by overnight courier, on the date shown on the
written confirmation of delivery. Such notices shall be given to the following
address:
To Sellers or UBOC Union Bank of California, N.A.
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxx
Telephone No.: (000) 000-0000
Fax Number: (000) 000-0000
With a copy to: Union Bank of California, N.A.
Legal Division
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxx
Telephone No.: (000) 000-0000
Fax Number: (000) 000-0000
To Purchaser: Wachovia Bank, National Association
0000 Xxxxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Telephone No.: 000-000-0000.
Fax Number: 000-000-0000
Attention: Xxxxxxx Xxxxxxxx,
Executive Vice President
Telephone No: (000) 000-0000
Fax Number: (000) 000-0000
64
With a copy to: Wachovia Corporation
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Attention: Xxxxxxx Xxxxxxxx, Senior Vice
President
Telephone No: (000) 000-0000
Fax Number: (000) 000-0000
11.2 SOLE AGREEMENT. This Agreement may not be amended or modified in any
respect whatsoever except by instrument in writing signed by the Parties hereto
or, in the case of a waiver, by the Party against whom the waiver is to be
effective. No delay on the part of any Party in exercising any right, power,
remedy or privilege hereunder shall operate as a waiver thereof, nor shall any
waiver on the part of any Party of any right, power, remedy or privilege, nor
any single or partial exercise of any such right, power, remedy or privilege,
preclude any further exercise thereof or the exercise of any other such right,
remedy, power or privilege. This Agreement and the Related Agreements and other
documents delivered pursuant hereto and thereto, together with the provisions of
the Non-Disclosure Agreement that survive after the date hereof pursuant to the
terms hereof, constitute the entire agreement between the Parties hereto with
respect to the subject matter hereof and thereof and supersede all prior
negotiations, discussions, writings and agreements between them with respect
thereto. EXCEPT TO THE EXTENT OF THE EXPRESS REPRESENTATIONS AND WARRANTIES
CONTAINED IN ARTICLE III, SELLERS ARE SELLING THE PURCHASED ASSETS ON AN "AS IS,
WHERE IS" BASIS, AND DISCLAIMS ALL OTHER WARRANTIES, REPRESENTATIONS AND
GUARANTEES, WHETHER EXPRESS OR IMPLIED INCLUDING, WITHOUT LIMITATION, ALL
IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND
NON-INFRINGEMENT.
11.3 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and inure to
the benefit of Purchaser and Sellers and their respective permitted successors
and assigns; provided, however, that neither Purchaser nor Sellers may transfer
or assign any of their respective rights or obligations hereunder or under the
Related Agreements (except to the extent provided in the Related Agreements), in
whole or in part, without the prior written consent of the other Party (except,
in the case of Purchaser, to a subsidiary of Purchaser provided that Purchaser
remains fully liable as a principal for the performance of its obligations
hereunder and thereunder), and any such transfer or assignment without said
consent shall be void, AB INITIO.
11.4 INTERPRETATION.
11.4.1 In this Agreement, except as context may otherwise require,
references:
(a) to the Preamble, Recitals, Sections, Annexes, Exhibits or
Schedules are to the Preamble to, a Recital or Section of,
or Annex, Exhibit or Schedule to, this Agreement;
(b) to this Agreement are to this Agreement, and the Annexes,
Exhibits and Schedules to it, taken as a whole;
(c) to this Agreement, are to this Agreement as amended,
modified, supplemented, restated or replaced from time to
time (to the extent permitted by the terms hereof);
(d) to the "transactions contemplated hereby" includes the
transactions provided for in this Agreement; and
65
(e) to any Governmental Authority include any successor to that
Governmental Authority; and
(f) to the date of this Agreement are to September 21, 2005.
11.4.2 The table of contents and article and section headings are for
reference purposes only and do not limit or otherwise affect any of the
substance of this Agreement.
11.4.3 The words "include," "includes" or "including" are to be deemed
followed by the words "without limitation."
11.4.4 The words "herein", "hereof" or "hereunder", and similar terms
are to be deemed to refer to this Agreement as a whole and not to any specific
Section.
11.4.5 This Agreement is the product of negotiation by the Parties, having the
assistance of counsel and other advisers. The Parties intend that this
Agreement
not be construed more strictly with regard to one Party than with regard to the
other.
11.4.6 No provision of this Agreement is to be construed to require,
directly or indirectly, any Person to take any action, or omit to take any
action, to the extent such action or omission would violate any Legal
Requirement.
11.4.7 The inclusion of an item in a Schedule hereto as an exception to
a representation or warranty will not by itself be deemed an admission by a
party that such item is material or was required to be disclosed therein.
11.5 DISPUTE RESOLUTION. This Section establishes a procedure for (i) internal
review of disputes between Sellers and Purchaser under this Agreement and the
Related Agreements, and (ii) a procedure for review and discussion of disputes
by Sellers and Purchaser prior to initiating any litigation with respect
thereto. Notwithstanding anything to the contrary herein, the Parties agree that
no failure by either Party to follow the procedures described in this Section
11.5 will (i) constitute a breach of this Agreement or of the standard of good
faith applicable to this Agreement or (ii) adversely affect such Party's right
to any remedy hereunder or otherwise at law or in equity. UBOC and Purchaser
agree to establish procedures within their respective corporate organizations
intended to result in the prompt internal reporting of disputes by all levels of
the respective organizations. The dispute resolution procedures so established
will require UBOC's and Purchaser's employees and representatives to report the
existence of a dispute with the other Party promptly to the Dispute Officer for
such employee's or representative's organization. Sellers and Purchaser agree
that prior to initiating litigation of any dispute under this Agreement or any
of the Related Agreements, notice of the dispute and a statement of the basis
therefor will be provided to the other Party by the Dispute Officers for each
organization to discuss and explain their positions with respect to the dispute.
Notice of disputes will be given under this provision promptly after the
existence of the dispute becomes known to either UBOC or Purchaser. Any notice
of a dispute by any Person other than the Dispute Officer will be ineffective to
initiate the dispute review process under this Section.
11.6 GOVERNING LAW AND JURISDICTION. This Agreement shall be governed by and
construed in accordance with the laws of the State of California applicable to
Contracts entered into therein, without reference to principles of choice of law
or conflicts of laws. Purchaser and Sellers each hereby irrevocably and
unconditionally submit to the exclusive jurisdiction of any State or Federal
Court sitting in San Francisco County, State of California, over any suit,
action or proceeding arising out of or relating to this Agreement. Purchaser and
Sellers each hereby agree that service of any process, summons, notice or
document by U.S. registered mail addressed to such Party shall be effective
service of process for any action, suit or proceeding
66
brought against such Party in such court. Purchaser and Sellers each hereby
irrevocably and unconditionally waive any objection to the laying of venue of
any such suit, action or proceeding brought in any such court and any claim that
any such action, suit or proceeding brought in any such court has been brought
in an inconvenient forum. Purchaser and Sellers each agree that final judgment
in any such action, suit or proceeding brought in any such court shall be
conclusive and binding upon such Party and may be enforced in any other courts
to whose jurisdiction such Party may be subject, by suit upon such judgment.
11.7 NO THIRD PARTY BENEFICIARIES. Except as otherwise expressly set forth in
Article X hereof, nothing in this Agreement is intended or shall be construed to
give any Person, other than the Parties hereto, any legal or equitable right,
remedy or claim under or in respect of this Agreement or any provision contained
herein. For the avoidance of doubt, nothing in this Agreement shall be construed
to give any customer or Business Employee any legal or equitable right, remedy
or claim under or in respect of this Agreement of any provision contained
herein.
11.8 EXPENSES. Except as otherwise provided herein or in any Related Agreement,
and regardless of whether any or all of the transactions contemplated by this
Agreement or any Related Agreement are consummated, the Parties hereto shall
each bear their respective expenses incurred in connection with the negotiation,
preparation, execution, and performance of this Agreement and the Related
Agreements and the transactions contemplated hereby and thereby, including,
without limitation, all fees and expenses of agents, representatives, investment
bankers, counsel and accountants.
11.9 COUNTERPARTS. This Agreement may be executed by the Parties hereto in
separate counterparts, each of which when so executed and delivered shall be an
original, but all such counterparts shall together constitute one and the same
instrument. Each counterpart may consist of a number of copies hereof each
signed by less than all, but together signed by all of the Parties hereto. Each
counterpart may be delivered by facsimile transmission, which transmission shall
be deemed delivery of an originally executed document.
11.10 SEVERABILITY. Any term or provision of this Agreement which is invalid or
unenforceable in any jurisdiction shall, as to that jurisdiction, be ineffective
to the extent of such invalidity or unenforceability without rendering invalid
or unenforceable the remaining terms and provisions of this Agreement or
affecting the validity or enforceability of any of the terms or provisions of
this Agreement in any other jurisdiction, so long as the economic or legal
substance of the transactions contemplated hereby and by the Related Agreements
is not affected in any material respect adversely to any Party. If any provision
of this Agreement is so broad as to be unenforceable, that provision shall be
interpreted to be only so broad as is enforceable.
11.11 Judicial Reference; Damages.
(a) All claims, causes of action or other disputes concerning
this Agreement or any of the Related Agreement or the
transactions contemplated hereby or thereby (each a
"Claim"), including any and all questions of law or fact
relating thereto, shall, at the written request of any
Party, be determined by judicial reference ("Reference").
The Parties shall select a single neutral referee, who
shall be a retired state or federal judge with at least
five years of judicial experience in civil matters. In the
event that the Parties cannot agree upon a referee, the
referee shall be appointed by the court. The non-prevailing
Party shall bear the fees and expenses of the referee
unless the referee otherwise provides in the statement of
decision. In connection with a Reference or any other
action or proceeding, whether brought in state or federal
court, the Parties hereby expressly, intentionally and
deliberately waive any right they may otherwise have to
trial by jury of any Claim. The
67
referee shall determine all issues relating to the appli-
cability, interpretation, legality and enforceability of
this Agreement. This Section 11.11(a) shall apply to any
subsequent amendments, renewals, supplements or modifica-
tions to this Agreement or any of the Related Agreements.
(b) Each of the Parties hereto irrevocably waives, with respect
to any first Party action filed by the other Party (but not
as to any action by one Party against the other seeking
indemnification for (x) a third party claim against the
Party initiating the action, to the extent that such
damages may be recoverable as part of the indemnification
by the Indemnified Party or (y) Losses arising out of or
resulting from the willful or intentional breach of this
Agreement or any Related Agreement by the Indemnifying
Party or any common law fraud by the Indemnifying Party)
(i) any right to punitive, incidental, consequential or
multiplied damages or lost profits, either pursuant to
common law or statute, in any legal proceedings arising out
of or related to this Agreement or the transactions
contemplated hereby and (ii) any right to punitive,
incidental or multiplied damages, either pursuant to common
law or statute, in any legal proceedings arising out of or
related to the Related Agreements or the transactions
contemplated thereby.
11.12 SCHEDULES AND EXHIBITS. The schedules and exhibits to this Agreement are
incorporated herein and, by this reference, made a part hereof as if fully set
forth at length herein.
11.13 SELLERS' JOINT AND SEVERAL OBLIGATIONS. Except to the extent otherwise
provided in this Agreement, all Sellers' obligations under this Agreement are
joint and several.
68
IN WITNESS WHEREOF, the Parties hereby execute this Agreement as of the
day and year first set forth above.
SELLERS: UNION BANK OF CALIFORNIA, N.A.
By: /s/ XXXXX X. XXXXX
____________________________________________
Name: Xxxxx X. Xxxxx
Title: Senior Vice President
UNION BANK OF CALIFORNIA INTERNATIONAL
By: /s/ XXXXX X. XXXXXX
____________________________________________
Name: Xxxxx X. Xxxxxx
Title: President
UNION BANK OF CALIFORNIA SERVICOS LTDA.,
a Brazilian limited liability company,
acting by and through the below parties who
hold in aggregate 100% of its QUOTAS, who
additionally undertake to cause it to act as
provided for it under this Agreement
By: UNION BANK OF CALIFORNIA, N.A.
By: /s/ XXXXX X. XXXXX
____________________________________________
Name: Xxxxx X. Xxxxx
Title: Senior Vice President
By: THE XXXXX PARTNERSHIP, a California
general partnership
By: /s/ XXXXX X. XXXXX
____________________________________________
Name: Xxxxx X. Xxxxx
Title: Senior Vice President of Union Bank
of California, N.A., and duly authorized
representative of Xxx Xxxxx Xxxxxxxxxxx
X-0
PURCHASER: WACHOVIA BANK, N.A.
By: /s/ XXXXXX X. XXXXX
____________________________________________
Name: Xxxxxx X. Xxxxx
Title: Executive Vice President
S-2
EXHIBIT A
FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT
This ASSIGNMENT AND ASSUMPTION AGREEMENT (this "Agreement"),
dated the ___ day of ___________, 200_, is made and entered into by and among
UNION BANK OF CALIFORNIA, N.A., a national banking association ("UBOC"), UNION
BANK OF CALIFORNIA INTERNATIONAL, a corporation organized under the provisions
of Section 25A of the Federal Reserve Act ("UBOCI"), UNION BANK OF CALIFORNIA
SERVICOS LTDA., a Brazilian limited liability company (sociedade limitada)
("Limitada" and together with UBOC and UBOCI, "Assignors"), and WACHOVIA BANK,
N.A., a national banking association ("Assignee").
W I T N E S S E T H
WHEREAS, Assignee and Assignors have entered into a Purchase
and Assumption Agreement, dated as of September __, 2005 (the "Purchase
Agreement"), pursuant to which Assignors have agreed to sell certain of their
assets to Assignee;
WHEREAS, this Agreement is being entered into in connection
with the Closing of the following Business Units under the Purchase Agreement:
[____________, ____________ and ___________] (collectively, the "Applicable
Business Units"); and
WHEREAS, pursuant to the requirements of the Purchase
Agreement, Assignors wish to assign and Assignee wishes to assume the Contracts
included in the Purchased Assets for each such Applicable Business Unit
(collectively, the "Applicable Assigned Contracts") and the Assumed Obligations
for each such Applicable Business Unit (such Applicable Assigned Contracts and
Assumed Obligations, collectively, the "Applicable Assumed Obligations");
NOW, THEREFORE, in consideration of the above premises and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties agree as follows:
Section 1. DEFINITIONS. Capitalized terms used herein and not
otherwise defined herein have the meanings given to them in the Purchase
Agreement.
Section 2. ASSIGNMENT AND ASSUMPTION.
(a) Assignors hereby assign to Assignee and its successors and
permitted assigns forever, as of the Effective Time for the Closing of the
Applicable Business Units ("Applicable Effective Time"), the Applicable Assigned
Contracts and the Applicable Assumed Obligations.
(b) As of the Applicable Effective Time, Assignee hereby
assumes and agrees to pay, perform, and discharge as and when due and owing, and
to be bound by all the terms, covenants, conditions, liabilities and obligations
in and of, the Applicable Assumed Obligations.
Section 3. FURTHER ASSURANCES. Assignors and Assignee hereby
agree to execute such documents and other papers and perform such further acts
as may be reasonably required to carry out the provisions hereof and the
transactions contemplated hereby.
Section 4. SOLE REMEDY. Assignors' and Assignee's sole and
exclusive remedy for damages caused by a breach of this Agreement shall be the
indemnities provided in Article X of the Xxxxxxxx
X-0
Agreement (except to the extent additionally provided in Article VIII of the
Purchase Agreement, other than in respect of any claim of fraud and except that
the remedies of injunction and specific performance shall remain available to
the Parties hereto).
Section 5. REFERENCE TO PURCHASE AGREEMENT. This Agreement is
issued pursuant to the terms of the Purchase Agreement and Assignors and
Assignee are entitled to the benefits of, and this instrument is subject to, all
pertinent provisions of the Purchase Agreement. Reference is hereby made to the
Purchase Agreement for a statement of all representations, warranties, covenants
and indemnities made in connection with this Agreement. EXCEPT TO THE EXTENT OF
THE REPRESENTATIONS AND WARRANTIES CONTAINED IN THE PURCHASE AGREEMENT, ASSIGNEE
IS ASSUMING THE APPLICABLE ASSUMED OBLIGATIONS ON AN "AS IS, WHERE IS" BASIS,
AND ASSIGNORS DISCLAIM ALL OTHER WARRANTIES, REPRESENTATIONS AND GUARANTEES,
WHETHER EXPRESS OR IMPLIED INCLUDING, WITHOUT LIMITATION, ALL IMPLIED WARRANTIES
OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND NON-INFRINGEMENT.
Section 6. MISCELLANEOUS. Sections 11.1, 11.2, 11.3, 11.5,
11.6, 11.7, 11.8, 11.9, 11.10 and 11.11 of the Purchase Agreement are hereby
incorporated by reference MUTATIS MUTANDI.
Section 7. HEADINGS. The headings of this Agreement are for
purposes of reference only and shall not limit or otherwise affect the meaning
or interpretation of this Agreement.
* * * * *
A-2
IN WITNESS WHEREOF, Assignors and Assignee have executed this
Agreement as of the date first above written.
ASSIGNORS: UNION BANK OF CALIFORNIA, N.A.
By:_________________________________________
Name:
Title:
UNION BANK OF CALIFORNIA INTERNATIONAL
By:_________________________________________
Name:
Title:
UNION BANK OF CALIFORNIA SERVICOS LTDA.,
a Brazilian limited liability company,
acting by and through the below parties who
hold in aggregate 100% of its quotas, who
additionally undertake to cause it to act as
provided for it under this Agreement
By: UNION BANK OF CALIFORNIA, N.A.
By:_________________________________________
Name: Xxxxx X. Xxxxx
Title: Senior Vice President
By: THE XXXXX PARTNERSHIP, a California
general partnership
By:_________________________________________
Name: Xxxxx X. Xxxxx
Title: Senior Vice President of Union
Bank of California, N.A., and duly
authorized representative of The Xxxxx
Partnership
A-3
ASSIGNEE: WACHOVIA BANK, N.A.
By:_________________________________________
Name:
Title:
A-4
EXHIBIT B
FORM OF XXXX OF SALE
THIS XXXX OF SALE (this "Xxxx of Sale"), dated as of _________ __,
200_, has been made and entered into by and among UNION BANK OF CALIFORNIA,
N.A., a national banking association ("UBOC"), UNION BANK OF CALIFORNIA
INTERNATIONAL, a corporation organized under the provisions of Section 25A of
the Federal Reserve Act ("UBOCI"), UNION BANK OF CALIFORNIA SERVICOS LTDA., a
Brazilian limited liability company (sociedade limitada) ("Limitada" and
together with UBOC and UBOCI, "Assignors"), and WACHOVIA BANK, N.A., a national
banking association ("Assignee").
Assignee and Assignors have entered into a Purchase and Assumption
Agreement, dated as of September __, 2005 (the "Purchase Agreement"), pursuant
to which Assignors have agreed to sell certain of their assets to Assignee.
Capitalized terms used herein but not otherwise defined having the meaning set
forth in the Purchase Agreement.
This Xxxx of Sale is being entered into in connection with the Closing
of the following Business Units under the Purchase Agreement: [____________,
____________ and ___________] (collectively, the "Applicable Business Units").
Pursuant to the requirements of the Purchase Agreement and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, as of the Effective Time for the Closing of the Applicable
Business Units ("Applicable Effective Time"), Assignors do each hereby grant,
bargain, sell, assign, transfer, convey, set over, confirm and deliver unto
Assignee, and its successors and assigns, all of their respective right, title
and interest in and to all of the Purchased Assets for each such Applicable
Business Unit (collectively, the "Applicable Purchased Assets").
TO HAVE AND TO HOLD unto Assignee, and its successors and assigns
forever all of the Applicable Purchased Assets hereby granted, bargained, sold,
assigned, transferred, conveyed, set over, confirmed and delivered as of the
Applicable Effective Time.
Assignors and Assignee hereby agree to execute such documents and other
papers and perform such further acts as may be reasonably required to carry out
the provisions hereof and the transactions contemplated hereby.
This Xxxx of Sale is issued pursuant to the terms of the Purchase
Agreement and Assignors and Assignee are entitled to the benefits of, and this
instrument is subject to, all pertinent provisions of the Purchase Agreement.
Reference is hereby made to the Purchase Agreement for a statement of all
representations, warranties, covenants and indemnities made in connection with
this Xxxx of Sale. EXCEPT TO THE EXTENT OF THE REPRESENTATIONS AND WARRANTIES
CONTAINED IN THE PURCHASE AGREEMENT, ASSIGNORS ARE SELLING THE APPLICABLE
PURCHASED ASSETS ON AN "AS IS, WHERE IS" BASIS, AND DISCLAIM ALL OTHER
WARRANTIES, REPRESENTATIONS AND GUARANTEES, WHETHER EXPRESS OR IMPLIED
INCLUDING, WITHOUT LIMITATION, ALL IMPLIED WARRANTIES OF MERCHANTABILITY,
FITNESS FOR A PARTICULAR PURPOSE AND NON-INFRINGEMENT.
Assignors' and Assignee's sole and exclusive remedy for damages caused
by a breach of this Xxxx of Sale shall be the indemnities provided in Article X
of the Purchase Agreement (except to the extent additionally provided in Article
VIII of the Purchase Agreement, other than in respect of any claim of fraud and
except that the remedies of injunction and specific performance shall remain
available to the Parties hereto).
B-1
Sections 11.1, 11.2, 11.3, 11.5, 11.6, 11.7, 11.8, 11.9, 11.10
and 11.11 of the Purchase Agreement are hereby incorporated by reference MUTATIS
MUTANDI.
The headings of this Xxxx of Sale are for purposes of
reference only and shall not limit or otherwise affect the meaning or
interpretation of this Xxxx of Sale.
B-2
IN WITNESS WHEREOF, each of Assignors and Assignee have caused this
instrument to be signed by its proper and duly authorized officer as of the date
and year first written above.
ASSIGNORS: UNION BANK OF CALIFORNIA, N.A.
By:_________________________________________
Name:
Title:
UNION BANK OF CALIFORNIA INTERNATIONAL
By:_________________________________________
Name:
Title:
UNION BANK OF CALIFORNIA SERVICOS LTDA.,
a Brazilian limited liability company,
acting by and through the below parties who
hold in aggregate 100% of its quotas, who
additionally undertake to cause it to act
as provided for it under this Agreement
By: UNION BANK OF CALIFORNIA, N.A.
By:_________________________________________
Name: Xxxxx X. Xxxxx
Title: Senior Vice President
By: THE XXXXX PARTNERSHIP, a California
general partnership
By:_________________________________________
Name: Xxxxx X. Xxxxx
Title: Senior Vice President of Union Bank
of California, N.A., and duly authorized
representative of The Xxxxx Partnership
B-3
ASSIGNEE: WACHOVIA BANK, N.A.
By:_________________________________________
Name:
Title:
B-4
EXHIBIT C
MASTER RISK PARTICIPATION AGREEMENT AND
RISK ASSETS PURCHASE AGREEMENT
This MASTER RISK PARTICIPATION AGREEMENT AND RISK ASSETS
PURCHASE AGREEMENT is made on this [___] day of [________], 2005 between
Wachovia Bank, National Association ("Wachovia") and Union Bank of California,
National Association ("UBOC").(2) Each of Wachovia and UBOC is a "Party" and
together they are the "Parties").
WHEREAS
Wachovia and UBOC, among others, entered into the Purchase and
Assumption Agreement, dated as of September 21, 2005 (as it may be amended or
modified from time to time in accordance with the terms thereof, the "Purchase
Agreement"); and
In accordance with the Purchase Agreement, Wachovia desires to
participate in, and UBOC desires to permit Wachovia to participate in, on an
unfunded basis, certain loans, documentary credits or other trade related risk
instruments, including, without limitation, loan agreements, authenticated
electronic evidence of indebtedness, notes, bills of exchange and drafts, in
each case relating to the international correspondent banking and trade-related
product business of UBOC.
IT IS AGREED as follows:
ARTICLE I
DEFINITIONS
In this Agreement:
"ACCEPTANCE" has the meaning given in Section 2.1(b).
"CONVERTED RISK ASSETS" has the meaning given in Section 3.2.
"DEFAULT" has the meaning given in Section 8.3.
"INITIAL RISK PARTICIPATION ASSETS" has the meaning given in
Section 2.1(a).
"INVITATION" has the meaning given in Section 2.1(a).
"INVOICE" has the meaning given in Section 4.1.
"NEW TRANSACTIONS" has the meaning given in Section 2.2(a)(i).
__________________
(2) UBOCI will be added as a party to the extent Risk Participation Assets are
held by UBOCI.
C-1
"OBLIGOR" means an Obligor in a Transaction as identified in
an Invitation.
"PARTICIPATION AGREEMENT" means the Invitation and the
Acceptance in relation to a Transaction.
"PARTICIPATION" means the participation on an unfunded basis
in the risks associated with the non-payment of the whole or any part of the
amounts due under a Transaction.
"PURCHASE AGREEMENT" has the meaning given in the recitals
hereto.
"RISK PARTICIPATION ASSETS" has the meaning given in Section
2.2(a)(ii).
"RISK PARTICIPATION ASSETS CONVERSION DATE" has the meaning
given in Section 3.1.
"RISK PARTICIPATION FEES" has the meaning given in Section
4.1.
"SECURITY PARTY" means any party (other than the Obligor) who
provides a guarantee or other security on behalf of or procured by the Obligor
in relation to a Transaction.
"SUBSEQUENT RISK PARTICIPATION ASSETS" has the meaning given
in Section 2.2(a)(ii).
"TRANSACTION" means a loan, documentary credit or other risk
instrument issued in connection with a Risk Participation Asset.
"UNPAID AMOUNT" means (i) the shortfall in payment of any
amount due UBOC under any Risk Participation Assets, including, without
limitation (A) the principal of or interest or fee on any Risk Participation
Assets; (B) any fee payable under the documents evidencing the Transaction; and
(C) any other amount payable under the documents evidencing the Transaction; and
(ii) to the extent not paid by the Obligor or a Security Party to UBOC, all
costs and expenses incurred by UBOC in connection with enforcing such Risk
Participation Asset to the extent that Wachovia requests or consents to such
enforcement.
"WACHOVIA EMPLOYEE" has the meaning given in Section 6.3.
All other capitalized terms used herein but not defined herein
shall have the respective meanings set forth in the Purchase Agreement.
ARTICLE II
RISK PARTICIPATIONS
2.1 INITIAL RISK PARTICIPATIONS.
(a) Immediately after the execution hereof, UBOC shall deliver
to Wachovia an invitation to acquire a 100% risk participation interest on an
unfunded basis in up to
C-2
US$550,000,000 of Risk Assets selected by Wachovia in its sole discretion prior
to the Principal Closing Date and described on Schedule A attached hereto (such
risk-participated Risk Assets, collectively, the "Initial Risk Participation
Assets").(3) Such invitation shall be substantially in the form of Schedule B
attached hereto (an "Invitation").
(b) Wachovia shall accept the Invitation described in Section
2.1(a) by a writing substantially in the form of Schedule C attached hereto (an
"Acceptance").
2.2 SUBSEQUENT RISK PARTICIPATIONS.
(a) From and after the date hereof, UBOC shall send an
Invitation to Wachovia to acquire a 100% risk participation interest on an
unfunded basis in:
(i) each new documentary credit or other risk instrument
entered into by UBOC from and after the execution hereof until the date that is
sixty (60) days from and after the Principal Closing Date (such transactions,
"New Transactions"), to the extent that such New Transactions relate to, and
were executed for the purpose of supporting, (A) the Business to the extent such
Business is then conducted by UBOC pursuant to the Conversion Protocols (but
shall not include any Xxxxx Xxxxx, oil recovery rights, investment securities
and all Risk Assets booked outside of the United States) or (B) export letters
of credit that are confirmed under lines of credit made available by the
Business; and
(ii) all Risk Assets (excluding Xxxxx Xxxxx, oil recovery
rights, investment securities and all Risk Assets booked outside of the United
States) relating exclusively to Customers with respect to which the Conversion
is then complete (such Risk Assets, together with Risk Assets relating to New
Transactions, the "Subsequent Risk Participation Assets" and, together with the
Initial Risk Participation Assets, the "Risk Participation Assets").
(b) Wachovia may, in its sole discretion, accept any
Invitation relating to a New Transaction that Wachovia has not approved in
advance in writing. Wachovia shall promptly accept any Invitation relating to a
New Transaction that Wachovia has approved in advance in writing. If Wachovia
determines to, or is required to, accept an Invitation, then Wachovia shall
confirm its acceptance of such Invitation by sending an Acceptance to UBOC. Each
such Invitation and Acceptance shall be sent by authenticated S.W.I.F.T.
message.
__________________
(3) Included will be loans with maturity dates of over ninety (90) days after
the date hereof and certain "long-dated" letters of credit and bankers'
acceptances. Excluded will be certain counterparties (including all uncommon
customers); Risk Assets with a BDG worse than 7.5 at the Principal Closing; all
Risk Assets other than bankers' acceptances, commercial loans, letters of
credit, standby letters of credit or placements (such as derivatives, foreign
exchange and securities exposure, including investment securities trading
securities, securities lent, securities purchased, etc.); any cash
collateralized assets; any Risk Assets that have Encumbrances (including
Permitted Encumbrances); Mongolia, Yemen, Russia, Baltic and the former CIS, as
well as UBOC's Tokyo, Taipei, Hong Kong or Seoul branches, whether funded or
unfunded, and certain specifically identified counterparties; Risk Assets that
are more than 30 days past due as of the Principal Closing Date; instruments
lacking appropriate documentation; and Risk Assets that have not received
compliance approval from Wachovia. These will not include any Xxxxx Xxxxx, oil
recovery rights, investment securities and all Risk Assets booked outside of the
United States.
C-3
(b) For the avoidance of doubt, notwithstanding anything to
the contrary herein or the Purchase Agreement, (i) to the extent Wachovia has
made a payment to UBOC for an Unpaid Amount, UBOC shall assign and transfer to
Wachovia any proceeds of any credit insurance policies, up to the amount of such
Unpaid Amount paid by Wachovia to UBOC, covering the Risk Participation Assets;
provided that in the event any third party consent is required for any such
assignment or transfer, UBOC shall be deemed to have satisfied the foregoing
obligation if UBOC shall have used commercially reasonable efforts to obtain
such consent; (ii) Wachovia is not assuming any risk, liability, obligation,
loss, claim, damages, penalty, action, cost or expense hereunder with respect to
the enforceability of, or the accuracy or completeness of, any Risk Asset
Documentation related to any Risk Participation Asset; and (iii) to the extent
Wachovia has made a payment to UBOC for an Unpaid Amount, Wachovia shall have
rights hereunder, up to the amount of such Unpaid Amount paid by Wachovia to
UBOC, to any and all of UBOC's rights to credit insurance, security, guaranties
or collateral to the extent relating to any Risk Participation Asset.
ARTICLE III
CONVERSION OF CERTAIN RISK PARTICIPATION ASSETS
3.1 From and after the date hereof, Wachovia may, in its sole
reasonable discretion, elect to convert all or a portion of the Risk
Participation Assets from UBOC's books to Wachovia's books as of one or more
dates selected by Wachovia in its sole discretion, which dates shall be no later
than March 31, 2006 (each such date, a "Risk Participation Assets Conversion
Date"). For the avoidance of doubt, a Risk Participation Assets Conversion Date
may be any Business Day reasonably selected by Wachovia. From and after the date
hereof until the Sellers' Shutdown Date, UBOC shall provide to Wachovia such
information concerning the Risk Participation Assets as Wachovia may reasonably
request in connection with its evaluation of the Risk Participation Assets with
a view to determining which Risk Participation Assets, if any, Wachovia will
convert in accordance with this Article III.
3.2 Wachovia shall give UBOC written notice of a Risk
Participation Assets Conversion Date and a description of the Risk Assets it
intends to convert onto its books as of the Risk Participation Assets Conversion
Date (the "Converted Risk Assets") at least ten (10) Business Days prior
thereto.(4)
3.3 UBOC shall deliver to Wachovia an estimate, in writing, of
the aggregate book value of the Converted Risk Assets at least two (2) Business
Days prior to the applicable Risk Participation Assets Conversion Date.
3.4 On each Risk Participation Assets Conversion Date, the
following shall occur:
(a) UBOC shall sell, assign, convey, transfer and deliver to
Wachovia, and Wachovia shall purchase and acquire from UBOC and take assignment
and delivery from UBOC
__________________
(4) Wachovia does not expect to convert banker's acceptances.
C-4
of, all of UBOC's right, title and interest in and to all of the Converted Risk
Assets that Wachovia has elected to convert on such Risk Participation Assets
Conversion Date, together with the Risk Asset Documents that are related to such
Converted Risk Assets, any cash that is serving as collateral for a Converted
Risk Asset, in each case free and clear of any Encumbrances and the right to
receive any credit insurance proceeds applicable to such Converted Risk Assets.
(b) Wachovia shall assume, and from and after the Risk
Participation Assets Conversion Date, shall pay, perform and discharge, all
Contingent Risk Liabilities to the extent associated with, arising out of or
resulting from any Contingent Risk Assets included in the Converted Risk Assets.
By way of example, such Contingent Risk Liabilities would include (i) the
obligation of UBOC to pay a beneficiary under a letter of credit where the
account party's obligation to UBOC is a Contingent Risk Asset that constitutes a
Converted Risk Asset and (ii) the obligation under a draft accepted by UBOC
where the obligation to UBOC under the draft is a Contingent Risk Asset
constituting a Converted Risk Asset;
(c) The conversion of the Converted Risk Assets shall be
effective as of 12:01 a.m., Pacific Time, on the applicable Risk Participation
Assets Conversion Date. UBOC shall deliver to Wachovia, no later than 9:00 a.m.
Pacific Time, on the applicable Risk Participation Assets Conversion Date, a
true and complete calculation of the aggregate net book value of the Converted
Risk Assets; and
(d) Wachovia shall pay to UBOC by wire transfer of immediately
available funds to an account designed by UBOC for such purpose the aggregate
net book value of the Converted Risk Assets that have been converted to
Wachovia's books on such Risk Participation Assets Conversion Date. Any dispute
regarding the calculation of the aggregate net book value for such Converted
Risk Assets shall be resolved in accordance with Section 2.8.3 of the Purchase
Agreement, mutatis mutandi.
ARTICLE IV
RISK PARTICIPATION FEE
4.1 On a monthly basis, beginning at the conclusion of the
first full calendar month after the date hereof, Wachovia shall deliver to UBOC
a statement (an "Invoice") of the fees (the "Risk Participation Fees") payable
by UBOC hereunder in arrears with respect to the preceding month (and, in the
case of the first Invoice delivered hereunder, for the period from and after the
date hereof until the end of the calendar month in which the Principal Closing
occurred).
4.2 The Risk Participation Fee shall be calculated as follows:
(a) The Risk Participation Fee for the Initial Risk
Participation Assets and Subsequent Risk Participation Assets described in
Section 2.2(a)(ii) (relating to Customers with respect to which the Conversion
is completed) shall be 0.45% p.a. with respect to loans, 0.15% p.a. with respect
to bankers' acceptances, 0.25% p.a. with respect to commercial letters of credit
and 0.70% p.a. with respect to standby letters of credit.
C-5
(b) The Risk Participation Fee for the Subsequent Risk
Participation Assets described in Section 2.2(a)(i) (relating to New
Transactions) shall be equal to the Actual Risk Margin on the New Transactions.
"Actual Risk Margin" means: (i) for loans and placements, the basis point spread
above the London Interbank Offering Rate applicable to each such loan; (ii) for
bankers' acceptances, the basis point spread above the bankers' acceptance rate
applicable to each such bankers' acceptance; and (iii) for letters of credit and
standby letters of credit, the actual fees charged for such letter of credit.
(c) In the case of each of Sections 4.2(a) and (b), the Risk
Participation Fee will be calculated on the monthly average amount of Risk
Participation Assets then outstanding.
4.3 UBOC shall promptly, and in any event within five (5) days
after receipt of an Invoice, pay to Wachovia by wire transfer of immediately
available funds to an account designated by Wachovia for such purpose all
undisputed amounts shown on such Invoice. If UBOC objects to Wachovia's
calculation of the Risk Participation Fees shown on such Invoice, UBOC shall
promptly, and in any event within five (5) days after receiving such Invoice,
notify Wachovia of such objection. Any dispute regarding an Invoice shall be
resolved in accordance with Section 11.5 of the Purchase Agreement and, promptly
upon such resolution, UBOC shall pay to Wachovia any remaining outstanding
amounts determined pursuant to Section 11.5 of the Purchase Agreement to be due
and payable with respect to such Invoice.
4.4 Other than the Risk Participation Fees and the payments
described in Article VII hereof, each Party shall bear its own costs and
expenses arising from its performance under this Agreement, including without
limitation the operational costs of servicing the Risk Assets portfolio unless
such amounts represent an Unpaid Amount.
ARTICLE V
DURATION OF RISK PARTICIPATIONS
5.1 Each Participation Agreement hereunder shall provide that
the Participation granted thereunder shall terminate with respect to a Risk
Participation Asset upon the earlier of (i) the Risk Participation Conversation
Date, if such Risk Participation Asset is then purchased by Wachovia and
converted onto Wachovia's books, (ii) expiration or cancellation of a Risk
Participation Asset without obligation by Wachovia or UBOC, (iii) the date on
which UBOC has received all amounts owing to it in respect of such Risk
Participation Asset and is under no further obligation, actual or contingent, in
respect of such Risk Participation Asset or (iv) the date, if any, after March
31, 2006 on which UBOC provides written notice to Wachovia that it is electing,
such election to be made in UBOC's sole discretion, to terminate a Participation
with respect to a Risk Participation Asset.
ARTICLE VI
INFORMATION; DOCUMENTATION; ACCESS; CONFIDENTIALITY
6.1 From and after the date hereof, UBOC shall provide to
Wachovia an updated SCHEDULE A on at least a weekly basis reflecting the
payment, expiration or cancellation
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of any Risk Participation Assets described therein or any other changes in the
composition of the Risk Participation Assets in which Wachovia has acquired a
Participation hereunder or under any of the Participation Agreements executed
and delivered pursuant hereto.
6.2 UBOC shall make available to Wachovia, at Wachovia's
request, copies of or, at UBOC's option, on-site access to true and correct
copies of the documents evidencing each Transaction in which UBOC has delivered
an Invitation with respect thereto or has granted Wachovia a Participation
hereunder. Wachovia confirms that it is familiar with the information regarding
each Obligor and Security Party identified in Schedule A as of the date hereof
that Wachovia deems necessary. UBOC (A) makes no representation or warranty to
Wachovia and shall not be responsible to it for the accuracy or completeness of
any information, exhibit or report furnished by an Obligor or a Security Party
in connection with the documents evidencing the Transactions or any statements,
warranties or representations (whether written or oral) made or deemed made by
an Obligor or a Security Party in or in connection with any of such documents,
(B) subject to industry standards with respect to loan portfolio servicing by
major financial institutions, shall have no duty to ascertain or to inquire as
to the performance or observance of any of the terms, covenants or conditions of
any of the documents evidencing the Transactions on the part of the Obligor, any
Security Party, or any other Person or to inspect the property, books or records
of the Obligor, any Security Party, or any other Person and (C) shall not be
responsible for the sufficiency, value or collectability of any collateral
related to the Transactions.
6.3 Subject to compliance with Legal Requirements, from and
after the date hereof, the Parties shall cooperate and provide information to
each other regarding the Risk Participation Assets, including the Obligor and
loan identification numbers associated with the Risk Participation Assets, in
order to facilitate the tracking of counterparty exposure by each of the
Parties. From and after the date hereof until Sellers' Shutdown Date, UBOC
shall, to the extent permissible under Legal Requirements, permit at least two
(2) Wachovia employees to be located in one or more domestic UBOC facilities on
a part-time or full-time basis, at Wachovia's option (each such employee, a
"Wachovia Employee"), and shall cause its employees to reasonably cooperate with
each Wachovia Employee for the purpose of complying with the foregoing
cooperation obligation and for the purpose of reviewing New Transactions and
reporting such New Transactions to Wachovia. In furtherance and not in
limitation of the foregoing, UBOC shall permit each Wachovia Employee to access
UBOC's loan and risk management systems and to run daily reports regarding the
Risk Participation Assets and to deliver such reports to the appropriate
Wachovia officers. The costs related to such Wachovia Employees shall be borne
solely by Wachovia and all liabilities arising out of such Wachovia Employees'
cooperation with UBOC and placement at UBOC offices shall be the responsibility
of Wachovia. Wachovia hereby indemnifies UBOC (or its agents, Affiliates,
directors, officers or employees) and holds it harmless for any and all
liabilities, obligations, losses, claims, damages, penalties, actions, costs and
expenses which may be suffered by, or imposed on or incurred by UBOC (or its
agents, Affiliates, directors, officers or employees), to the extent related to
such Wachovia Employees, including any of such Wachovia Employees' actions or
omissions, except to the extent any such liabilities, obligations, losses,
claims, damages, penalties, actions, costs or expenses arise out of or result
from UBOC's gross negligence or willful misconduct.
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6.4 With respect to the Risk Participation Assets, UBOC shall
maintain records and accounts in accordance with its usual practice in respect
of the amounts paid and received by it from Obligors and/or Security Parties and
from Wachovia and such records and accounts will be available for inspection by
Wachovia at all reasonable times and will be conclusive and binding on Wachovia
in the absence of manifest error.
6.5 The Parties shall inform each other without delay of
events, which come to their knowledge and in their reasonable opinion may have
an adverse effect on the ability of any Obligor or Security Party to fulfill its
obligations under any Transaction relating to any Risk Participation Asset.
6.5 Wachovia undertakes to keep confidential all information
it receives from UBOC with respect to Risk Participation Assets or otherwise to
the extent required by the documents evidencing the Transactions or applicable
Legal Requirements, provided that the exceptions set forth clauses (i)-(iii) of
the definition of "Proprietary Information" in the Purchase Agreement shall
apply to this Section 6.6 mutatis mutandi and provided, further, that to the
extent any Risk Participation Assets become Converted Risk Assets, the foregoing
restriction shall cease to apply to such Risk Participation Assets.
ARTICLE VII
UNFUNDED PARTICIPATIONS; RECOVERIES
7.1 In respect of a Participation, Wachovia shall upon first
written demand by UBOC, subject to Section 8.1 hereof, promptly pay to UBOC an
amount equal to the Unpaid Amount payable under the relevant Transaction
(without requiring UBOC to first take recourse against any Obligor, Security
Party or any other Person); provided that such losses, damages, liabilities,
costs or expenses were not caused by the grossly negligent acts or omissions of
UBOC or by UBOC's willful misconduct.
7.2 Subject to Section 7.3, with respect to Unpaid Amounts
paid by Wachovia to UBOC under Sections 7.1(a) and (b), UBOC shall promptly pay
to Wachovia the amount of all recoveries, including but not limited to
principal, interest (including default interest), fees and costs, received by
UBOC under a Transaction to the extent related to such Unpaid Amounts paid by
Wachovia to UBOC. The Parties agree that if any sum which is received or
recovered under the documents evidencing a Transaction is not attributable to
any particular amount due under such documents, that sum will be applied (after
payment of any expenses incurred in its collection to the extent Wachovia
consented to, or directed UBOC to undertake, such collection) by UBOC towards
such obligations (including any Unpaid Amount) of the relevant Obligor as
Wachovia and UBOC may mutually determine.
7.3 If (a) any sum which is paid into an account required by
Legal Requirements to be blocked or is paid in non-transferable or
non-convertible currency, or (b) any financial or other instrument is issued to
UBOC in satisfaction or purported satisfaction of any obligation of an Obligor
to make any payment with respect to a Risk Participated Asset (which payment, in
either case of the foregoing clauses (a) or (b), if made to UBOC in the manner
provided for in the documents evidencing the Transaction would have given rise
to a liability on
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the part of UBOC to make a corresponding payment to Wachovia under Section 7.2),
then (i) at Wachovia's sole option, promptly following Wachovia's written
request, UBOC shall transfer to Wachovia such sum or such instrument, as the
case may be, to the extent permitted by Legal Requirements, in lieu of the
payments described in Section 7.2 and (ii) if such transfer is not permissible
under Legal Requirements, then UBOC shall hold such sum or such instrument, as
the case may be, on Wachovia's behalf and shall consult with Wachovia and obtain
Wachovia's consent prior to taking any action with respect thereto; provided
that Wachovia shall not receive any greater amount pursuant to this Section 7.3
than it is entitled to receive under Section 7.2.
7.4 Each payment to be made pursuant to Section 7.1, 7.2 or
7.3 hereof shall be:
(a) remitted to the account number specified in the relevant
Participation Agreement;
(b) made in the currency in which the amount is denominated
for value on the date due at such times and in such funds as are customary at
the time for settlement of transactions in that currency; and
(c) made net of any deduction or withholding required to be
made from such payments pursuant to applicable Legal Requirements.
7.5 If at any time applicable Legal Requirements require
either Party to make any deduction or withholding of whatsoever nature from any
payment due under this Article VII, the sum due from such Party in respect of
such payment shall be increased to the extent necessary to ensure that after the
making of such deduction or withholding, the other Party receives a net sum
equal to the sum which it would have received had no such deduction or
withholding been made. Each Party shall use commercially reasonable efforts to
avoid becoming subject to any obligation to make a payment of any such deduction
or withholding. Each Party agrees to make any and all payments due under this
Agreement from such Party from its booking branch in the United States to the
other Party's booking branch in the United States.
7.6 If either Party fails to pay any sum under this Agreement
when due and payable, interest will accrue on that sum from the due date up to
and including the day when the amount is actually paid, calculated at an annual
rate equal to the Contract Interest Rate.
7.7 Any payment falling due on a non-Business Day shall be
made on the next following Business Day.
7.8 Where the obligation of UBOC to make a payment under a
Participation Agreement arises as a result of UBOC having received an amount
from the Obligor or any Security Party or any other Person as described in
Section 7.2 or Section 7.3, UBOC will not be obliged to make that payment until
it has established to its satisfaction that it has irrevocably received such
amount, but if UBOC does make such payment and it proves to be the case that it
has not received that amount, Wachovia will on demand promptly refund that
payment in full to UBOC.
C-9
7.9 If UBOC receives payment of any amount in respect of a
Risk Participated Asset and subsequently such payment is set aside, avoided or
ordered to be reduced by virtue of any provision to bankruptcy insolvency or
liquidation, then Wachovia shall, upon demand by UBOC, promptly pay to UBOC a
sum equal to the amount avoided, set aside, refunded or reduced.
7.10 All payments by a Party herein shall be made without set-
off or counterclaim.
7.11 The Parties agree that the obligations of Wachovia to pay
to UBOC the amounts set forth herein shall be absolute, unconditional and
irrevocable and shall be performed strictly in accordance with the terms hereof
under all circumstances, including the following circumstances: (i) subject to
Section 8.2, any amendment or waiver of or any consent to any departure from all
or any of the documents evidencing the Transactions, or other indulgence or
modification of or forbearance with respect to any of such documents unless such
amendment, waiver, consent, indulgence or modification is entered into or made
by UBOC in violation of the terms hereof; (ii) subject to Section 8.1, any other
act or omission to act of any kind by UBOC, the Obligor, any Security Party or
any other Person, except such acts or omissions which constitute the gross
negligence or willful misconduct of UBOC; or (iii) the fact that any event,
matter, condition or circumstance may have occurred which has or could have a
material adverse effect on the business, properties, results of operations or
condition (financial or otherwise) of the Obligor, any Security Party or other
Person. Wachovia acknowledges that UBOC may honor whatever funding obligation
UBOC in good faith, consistent with industry standards with respect to loan
portfolio servicing by major financial institutions, determines itself to have
under the documents evidencing a Transaction.
ARTICLE VIII
ADMINISTRATION OF A TRANSACTION
8.1 The examination of documents and administration of the
participated letters of credit are the sole and full responsibility of UBOC, and
Wachovia is under no obligation to reimburse UBOC if the relevant Obligor's
failure to make reimbursement is due to UBOC's failure to comply with any term
of any participated letter of credit, its negotiation of non-conforming
documents or its failure to comply with the terms of the Uniform Customs and
Practice for Documentary Credits (International Chamber of Commerce publication
no. 500, 1993 Revision) ("UCP 500") in relation to documentary and standby
letters of credit, or the International Standby Practices (International Chamber
of Commerce publication no. 590, issued in 1998 ("ISP98")), in respect of
standby letters of credit.
8.2 Modifications
(a) Subject to paragraph (b) below UBOC may, without
responsibility to Wachovia, in connection with the Risk Participation Assets
(but not the Converted Risk Assets): (i) exercise or refrain from exercising any
or all of its rights, powers and discretions arising under or in connection with
the documents evidencing the Transactions; (ii) agree to any
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variation or waiver of the terms of the documents evidencing the Transactions;
and (iii) perform any other acts under the documents evidencing the Transactions
as it in its discretion sees fit.
(b) UBOC shall not, without the prior written consent of
Wachovia, take such action that would result in: (i) any variation to the date
for payment of, or any variation to an amount or a change in the currency of any
amounts payable under, the documents evidencing the Transactions; (ii) a
reduction of any amount in respect of interest or any fee payable by an Obligor
provided under the documents evidencing the Transactions; (iii) the release of
any credit insurance, security, guaranty or collateral relating to any Risk
Participation Asset; or (iv) the enforcement of, or efforts by UBOC to enforce,
any of UBOC's rights with respect to any Risk Participation Asset against any
Obligor, any Security Party or any third party.
8.3 UBOC shall promptly upon the occurrence of any event of
default or other similar condition or event in relation to an Obligor and/or
Security Party (however described in the relevant Transaction, each a "Default")
notify Wachovia of the Default in respect of any Transaction in which Wachovia
has a Participation hereunder.
8.4 Following receipt by Wachovia of a notice that an Obligor
or Security Party has failed to make payment when due and payable with respect
to any Risk Participation Asset, Wachovia and UBOC shall jointly determine the
actions to be taken by UBOC in order to recover the amounts due and unpaid from
the Obligor and/or a Security Party. Upon written request by Wachovia, if
permitted by Legal Requirements and the Transaction documents, UBOC shall assign
to Wachovia a portion of the claims under the Transaction which correspond to
the relevant Risk Participated Assets and, following such assignment, Wachovia
may proceed directly against the relevant Obligor and/or Security Party. If UBOC
and Wachovia cannot agree on the actions to take to enforce the Transaction, and
if such an assignment is not permissible under Legal Requirements and the
Transaction Documents, then at Wachovia's request, UBOC shall, acting as
Wachovia's agent, take such actions on Wachovia's behalf as Wachovia shall
reasonably request in order to recover the amounts due and unpaid from the
Obligor and/or a Security Party; provided that UBOC shall be under no obligation
to take such actions if it reasonably believes that such actions are in
violation of Legal Requirements. For Transactions where UBOC is acting as
Wachovia's agent and at Wachovia's direction, Wachovia shall indemnify UBOC on
first written demand from and against all losses, damages, liabilities,
reasonable costs and expenses which UBOC has incurred in connection with such
actions; provided such losses, damages, liabilities, reasonable costs and
expenses are not caused by UBOC's grossly negligent acts or omissions or by its
willful misconduct.
ARTICLE IX
TERMINATION
9.1 If:
(a) Wachovia fails to pay any amount when due and payable
hereunder or under a Participation Agreement, UBOC may cancel that Participation
Agreement upon notice to Wachovia; or
C-11
(b) UBOC's representations set forth in Section 10.6 hereof to
the extent related to the Risk Participation Assets are untrue in any material
respect, Wachovia may require UBOC to cancel the affected Participation
Agreement upon notice to UBOC and UBOC shall pay to Wachovia an amount equal to
the amount already paid by Wachovia in respect of that Participation,
notwithstanding anything to the contrary in this Agreement or the Purchase
Agreement;
and once accrued claims and liabilities owing hereunder have been paid all
rights and obligations of UBOC and Wachovia under that Participation Agreement
shall be terminated.
ARTICLE X
OTHER
10.1 Sections 11.1, 11.5, 11.6, 11.7, 11.8, 11.9, 11.10,
11.11, 11.12 and 11.13 of the Purchase Agreement are hereby incorporated by
reference mutatis mutandi.
10.2 No Party may assign or transfer any of its rights or
obligations under this Agreement or under any Participation Agreement without
the prior written consent of the other Party. This Agreement shall be binding
upon and shall inure to the benefit of the Parties hereto and their respective
successors and permitted assigns.
10.3 Status of Participation.
(a) Except as set forth in this Agreement, UBOC does not
transfer or assign any rights or obligations under the documents evidencing the
Transactions to the extent related to any Risk Participation Assets and Wachovia
will have no proprietary interest in the benefit of the documents evidencing the
Transactions or in any monies received by UBOC under or in relation to the
documents evidencing the Transactions, in each case to the extent related to any
Risk Participation Assets.
(b) The right of the Wachovia to receive monies from UBOC with
respect to any Risk Participation Asset is restricted to the extent of an amount
equal to the relevant portion of any monies received and applied in accordance
herewith by UBOC from any Obligor or Security Party.
(c) Wachovia shall not be subrogated to or substituted in
respect of UBOC's claims by virtue of any payment under a Participation and
Wachovia shall have no contractual relationship with or rights against any
Obligor or Security Party pursuant to the terms hereof except in any case in
which UBOC defaults in its servicing obligation with respect to the relevant
Risk Participation Assets and except for Risk Participation Assets converted to
Wachovia in accordance with the terms hereof.
(d) Nothing herein constitutes UBOC as agent, fiduciary or
trustee for the Wachovia.
(e) Nothing herein shall place UBOC under an obligation to
exercise any rights of set-off it may have against any Obligor or Security
Party; provided that if UBOC does
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elect or agree to set-off any such amounts, UBOC shall make Wachovia whole for
any amounts to which Wachovia would be entitled hereunder with respect to the
amount of such set-off reasonably attributable to the applicable Risk
Participation Asset.
(f) UBOC's obligations under the Participations shall be
subject to its obligations under the documents evidencing the Transactions.
(g) This Agreement and the agreements and understandings
between the Parties in relation to a Participation shall not constitute a
partnership, joint venture or any other form of association between UBOC and
Wachovia.
10.4 Each Participation Agreement shall form an integral part
of this Agreement and the conditions agreed upon in the applicable Participation
Agreement shall together with this Agreement govern the relevant Participation.
10.5 If for the purpose of obtaining a judgment in any court
with respect to any obligation of a Party hereunder or stating a claim, it shall
become necessary to convert into any other currency any amount into the currency
due hereunder, then such conversion shall be made at the spot conversion rate as
in effect on the date the paying Party makes payment to the receiving Party in
satisfaction of such judgment. If pursuant to any such judgment or claim,
conversion shall be made on a date other than the date payment is made and there
shall occur a change between such spot conversion rate and the spot conversion
rate as in effect on the date of payment, the paying Party agrees to pay such
additional amounts, if any, as may be necessary to insure that the amount paid
is the amount in such other currency which, when converted at the spot
conversion rate as in effect on the date of payment or distribution, is the
amount then due hereunder in such currency as may be specified by the receiving
Party ("Receiver's Required Currency"). Any amount due under this Section 10.5
shall be due as a separate debt and shall not be affected by or merged into any
judgment being obtained for any other sums due hereunder or in respect of any
obligation. In no event, however, shall a paying Party be required to pay more
Receiver's Required Currency at the spot conversion rate as in effect when
payment is made than the amount of Receiver's Required Currency stated to be due
hereunder.
10.6 UBOC represents and warrants that each Risk Participation
Asset is, as of the date hereof, or will be as of the time at which UBOC and
Wachovia enter into a Participation Agreement with respect thereto (i) evidenced
by appropriate and sufficient documentation and will constitute the legal, valid
and binding obligation of the Obligor named therein, subject to the
Enforceability Exceptions and (ii) free and clear of any Encumbrances. Each
Converted Risk Asset will be as of the time at which such asset is converted
onto Wachovia's books in accordance with the terms hereof (i) evidenced by
appropriate and sufficient documentation and will constitute the legal, valid
and binding obligation of the Obligor named therein, subject to the
Enforceability Exceptions and (ii) free and clear of any Encumbrances. UBOC
shall transfer good title to such Converted Risk Assets free of Encumbrances. If
UBOC's liability to make any payment under any Transaction with respect to which
Wachovia is entering into a Participation Agreement is contingent upon the
Obligor or any other Person having provided any documents or having satisfied
any conditions upon requesting any payment from UBOC under the relevant
Transaction, such documents have been provided in a form acceptable to UBOC and
in accordance with the practices and standards generally complied with in
relation to a specific type
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of Transaction including, but not limited to, the UCP 500 in relation to
documentary and standby letters of credit, and the ISP 98 in respect of standby
letters of credit, and such conditions have been satisfied to the satisfaction
of UBOC.
[THE NEXT PAGE IS THE SIGNATURE PAGE]
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WACHOVIA BANK, NATIONAL ASSOCIATION
By
____________________________________________
Name:
Title:
UNION BANK OF CALIFORNIA,
NATIONAL ASSOCIATION
By
____________________________________________
Name:
Title:
C-15
SCHEDULE A
INITIAL RISK PARTICIPATION ASSETS
[Schedule to be provided updated by Wachovia as of the Principal Closing]
C-16
SCHEDULE B
FORM OF INVITATION
[(to be sent via email followed by a next-day courier delivery of executed
version)][For Initial Risk Participation Assets]
[(to be sent by authenticated S.W.I.F.T. message)][For Subsequent Risk
Participation Assets]
Date:
From: Union Bank of California, National Association
To: Wachovia Bank, National Association
UBOC's reference:
Wachovia's reference:
Dear Sirs,
INVITATION
We refer to the Master Participation Agreement dated [ ] 2005
between Wachovia Bank, National Association and Union Bank of California,
National Association (as the same may be amended as from time to time, the
"Agreement"). This Invitation forms part of, and is subject to, the Agreement.
All terms contained in the Agreement shall have the same meanings when used in
this Invitation.
1. TERMS OF PARTICIPATION
[The terms of the particular Participation to which this
Invitation relates are as set forth in the attached spreadsheet.] [For Initial
Risk Participations]
[The terms of the particular Participation to which this
Invitation relates are as follows:
Obligor:
Details of Participation: (funded/unfunded, confirmed,
guaranteed, financed, refinanced, discounted)
Face Amount:
Transaction:
Transaction Details: [We attach a copy of the relevant
Transaction.]
Guarantee or other security for the Obligor's payment
obligations: [We attach a copy of the document evidencing liens and encumbrances
on property, guarantees
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or any other rights granted or provided to secure the
repayment of an obligation (specify).]
Security Party/Parties (describe by name and type of
collateral):
2. PARTICIPATION DATE
The date on which Wachovia is committed with its participation
amount for the proposed Participation is .
3. FEE
We shall pay to you a fee calculated in accordance with the
Master Risk Participation Agreement.
4. OTHER TERMS.
(Insert specific terms, if any, applicable to the relevant
Transaction.)
5. ACCOUNT DETAILS
Our account details in relation to this Invitation are as
follows:
Account number:
Bank:
6. ACCEPTANCE DATE] [For Subsequent Risk Participations]
If you agree to the terms of this Invitation, kindly send us
your Acceptance to be received by us no later than .
This Invitation shall be governed by and construed in
accordance with the law agreed pursuant to the Agreement.
Yours sincerely,
UNION BANK OF CALIFORNIA,
NATIONAL ASSOCIATION
By
____________________________________________
Name:
Title:
C-18
SCHEDULE C
FORM OF ACCEPTANCE
(to be sent by authenticated S.W.I.F.T. message)
Date:
From: Union Bank of California, National Association
To: Wachovia Bank, National Association
UBOC's reference:
Wachovia's reference:
Dear Sirs,
ACCEPTANCE
We refer to:
(i) the Master Participation Agreement dated [ ] 2005
between Union Bank of California, National
Association and Wachovia Bank, National Association
(as the same may be amended as from time to time, the
"Agreement"); and
(i) your Invitation dated [ ].
This Acceptance forms part of, and is subject to, the
Agreement. All terms contained in the Agreement shall have the same meanings
when used in this Acceptance.
We hereby accept to participate in the invited Transaction on
the terms and conditions stated therein and in the Agreement.
This Acceptance shall be governed by and construed in
accordance with the laws agreed pursuant to the Agreement.
Yours sincerely,
WACHOVIA BANK, NATIONAL ASSOCIATION
By
____________________________________________
Name:
Title:
C-19
EXHIBIT D
MASTER EMPLOYEE LEASING AGREEMENT, dated as of [DATE] 2005 (as
amended, supplemented or replaced from time to time, this "AGREEMENT"), by and
among UNION BANK OF CALIFORNIA, N.A., a national banking association, UNION BANK
OF CALIFORNIA INTERNATIONAL, a corporation organized under the provisions of
Section 25A of the Federal Reserve Act, and UNION BANK OF CALIFORNIA SERVICOS
LTDA., a Brazilian limited liability company (SOCIEDADE LIMITADA) (collectively,
"SELLERS"), on the one hand, and WACHOVIA BANK, NATIONAL ASSOCIATION, a national
banking association, on the other hand ("PURCHASER").
RECITALS
A. Purchaser and Sellers have entered into the Asset Purchase
Agreement, dated as of September 21, 2005 (as it may be amended,
supplemented or replaced from time to time, the "PURCHASE
AGREEMENT"), which provides for the purchase by Purchaser of
assets of Sellers (the "TRANSACTION").
B. Purchaser desires to use the services of designated employees of
Sellers, and Sellers desire to use the services of certain
designated employees of Purchaser, in each case on a temporary
basis in accordance with the terms and conditions of this
Agreement.
NOW, THEREFORE, the parties, intending to be legally bound,
agree as follows:
1. EMPLOYEE LEASING.
(a) At Purchaser's request from time to time made in accordance with
the Conversion Protocols, Sellers will lease to Purchaser any
Business Employee so requested by Purchaser (each such Business
Employee, a "SELLERS' LEASED EMPLOYEE") until the earlier of (1)
the Business Employee's becoming an Accepting Employee and (2)
Sellers' Shutdown Date (with respect to each Sellers' Leased
Employee, the "SELLERS' LEASE PERIOD") to perform (1) such
services as are substantially comparable to those services that
were performed by the Sellers' Leased Employee before the Closing
for the Business and/or (2) such services as Purchaser reasonably
requests in accordance with the Conversion Protocols in connection
with the Conversion and Purchaser's operation of the Business
during the Sellers' Lease Period (such services, collectively, the
"SELLERS' LEASED EMPLOYEE SERVICES"); and
(b) At Sellers' request from time to time made in accordance with the
Conversion Protocols, Purchaser will lease to Sellers any
Accepting Employee so requested by Sellers (each such Accepting
Employee, a "PURCHASER'S LEASED EMPLOYEE") until Sellers' Shutdown
Date (the "PURCHASER'S LEASE PERIOD") to perform such services as
may be reasonably necessary for Sellers to satisfy their
obligations to service the Business after the Closing pursuant to
the Purchase Agreement and the Conversion Protocols (such
services, collectively, the "PURCHASER LEASED EMPLOYEE SERVICES").
(c) Notwithstanding the foregoing, the parties acknowledge that
Sellers are likely to need to staff a number of their foreign
offices beyond the Sellers' Shutdown Date in connection with the
wind down of such offices and, in particular, Sellers are likely
to be required by Governmental Authorities in the jurisdictions in
which such foreign offices are located to
D-1
maintain branch managers and/or representatives until licenses can
be surrendered in an orderly fashion in accordance with applicable
Legal Requirements. Accordingly, and to accommodate such
situations abroad, the parties agree that Sellers' Lease Period
and the Purchaser's Lease Period may be extended at the election
of either Sellers or Purchaser (by notice to such other party) for
a period not to exceed 180 days (or 270 days to the extent
required by Legal Requirements) beyond the Sellers' Shutdown Date
to accommodate (i) the leasing by Purchaser of Sellers' Business
Employees resident in Sellers' foreign offices to the extent
Sellers retain such employees and (ii) the leasing by Sellers of
Accepting Employees to the extent required to meet wind down
requirements in such foreign offices, it being understood that all
decisions regarding the Business Employees and/or Accepting
Employees to be leased, the timing and conditions under which the
leasing occurs and the circumstances of their leasing shall be
made in accordance with this Agreement and the labor and
employment provisions of the Conversion Protocols, which shall be
deemed extended beyond the Sellers' Shutdown Period through such
extended Sellers' Lease Period and/or Purchaser's Lease Period to
govern such leasing arrangements.
2. CERTAIN DEFINITIONS.
(a) Sellers, in their capacity as lessors of the Sellers' Leased
Employees, and Purchaser, in its capacity as lessor of the
Purchaser's Leased Employees, as applicable, are referred to
herein as the "LESSOR".
(b) Purchaser, it its capacity as lessee of Sellers' Leased Employees,
and Sellers, in their capacity as lessees of the Purchaser's
Leased Employees, as applicable, are referred to herein as the
"Lessee".
(c) Where Sellers are the Lessor, the Sellers' Leased Employees are
the "LEASED EMPLOYEES", the Sellers' Lease Period is the "LEASE
PERIOD", and the Sellers' Leased Employee Services are the
"SERVICES". Where Purchaser is the Lessor, the Purchaser's Lease
Employees are the "LEASED Employees", the Purchaser's Lease Period
is the "LEASE PERIOD", and the Purchaser's Leased Employee
Services are the "SERVICES".
(d) Other capitalized terms used but not defined in this Agreement
have their respective meanings assigned in the Purchase Agreement.
3. SUPERVISION; WORK ENVIRONMENT; EMPLOYMENT DECISIONS.
(a) SUPERVISION. Subject to the Conversion Protocols, the Lessee will
determine the procedures to be followed in its business by the
Leased Employees, including without limitation with respect to the
time, manner and performance of their duties as Leased Employees,
and be responsible for the supervision of the Leased Employees in
the performance of the Services.
(b) COMPLIANCE. Each of the Lessor and Lessee will comply with all
Legal Requirements applicable to it with respect to the Leased
Employees.
(c) ACCIDENTS AND INJURIES. The Lessee will report to the Lessor any
employee accidents or workplace injuries involving Leased
Employees during the Lease Period promptly after such accidents or
injuries are reported to the Lessee.
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(d) LICENSES. The Lessor will, to the extent consistent with its
operation of the Business prior to the date hereof, in the case of
Sellers, and to the extent consistent with its operation of the
Business after the date hereof, in the case of Purchaser, obtain
and maintain, or reasonably assist the Leased Employees to obtain
and maintain, all Licenses, if any, required in connection with
the Leased Employees' performance of Services.
(e) TERMINATION OF EMPLOYMENT. During the Lease Period, the Lessor
will not terminate the employment of any Leased Employee without
the prior written approval of the Lessee, which approval will not
be unreasonably withheld or delayed; PROVIDED that the Lessor may
terminate the employment of a Leased Employee without the prior
approval of the Lessee (but after consultation with the Lessee if
reasonably practicable), if such termination is made for cause (or
the equivalent thereof) as defined in the employment procedures
for employees of the Lessor. In the event of any termination of
employment of a Leased Employee, the Lessor will be solely
responsible for any severance or other payments due to such Leased
Employee as a result of such termination.
(f) LEASED EMPLOYEE AGREEMENT. To the extent permissible under
applicable Legal Requirements, all Business Employees, prior to
becoming Leased Employees, will be required to sign an agreement,
substantially in the form of ATTACHMENT A.
(g) RECORDS. Each party will maintain books and records relating to
the Leased Employees in a reasonable manner and consistent with
applicable Legal Requirements and sound business practices. Each
party will make all such books and records available to the other
parties upon reasonable request and will provide such other
information to the other parties as is reasonably requested by
such other parties to perform their respective obligations under
this Agreement or as is reasonably necessary for such other
parties to comply with their respective obligations under Legal
Requirements.
(h) EMPLOYEE CLAIMS. Each party will reasonably cooperate with each
other party in the defense of any and all claims, including
litigation and administrative claims, against such other party
brought by any Leased Employee, unless the parties have an actual
conflict of interest with respect to such matter. Such cooperation
may include providing the other parties with access to claim
information, facilities, witnesses and other information and
documents as reasonably requested.
4. COMPENSATION AND BENEFITS. During the Lease Period, the Leased Employees
will for all purposes be employees solely of the Lessor. The Lessor will,
in a timely manner and consistent with the Lessor's practices with respect
to its own employees:
(a) Pay compensation and provide benefits to the Leased Employees (1)
in the case of the Sellers' Leased Employees, equal to the wages
paid and benefits provided to such Sellers' Leased Employees
immediately before the Lease Period and (2) in the case of the
Purchaser's Leased Employees, in accordance with the terms of any
employment offers made to such Leased Employees pursuant to
Section 5.5 of the Purchase Agreement, but in any event and in
either case equal to or greater than the wages or benefits
required to be paid or provided pursuant to any applicable Legal
Requirements;
(b) Make all wage payments to Leased Employees (including bonuses or
commissions) directly through the Lessor's payroll systems;
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(c) Make all payroll withholding deductions for Leased Employees to
the extent required under applicable Legal Requirements, including
Federal and State income tax, social security, unemployment and
disability insurance (if applicable) on a timely basis;
(d) Promptly remit all Taxes with respect to the Leased Employees to
all applicable governmental agencies;
(e) File all Tax reports in respect of the Leased Employees to the
extent required under applicable Legal Requirements;
(f) Administer, or cause a third party administrator to administer,
all of the Lessor's Employee Plans or Contracts or benefits
required to be provided by Legal Requirements for which such
Lessor's Leased Employees are eligible; and
(g) Maintain (if applicable in foreign jurisdictions) workers'
compensation insurance, and add the Lessee as an insured on its
workers' compensation insurance policy, and keep such insurance in
full force and effect at all times with respect to the Leased
Employees.
5. FEES.
(a) On a monthly basis, beginning on the tenth day of the first full
calendar month after the date of this Agreement, the Lessor will
deliver to the Lessee a statement (an "INVOICE") of the fees (the
"LEASING FEE") payable by the Lessee with respect to all Leased
Employees leased by the Lessee hereunder during the preceding
month. The Lessee will promptly, and in any event within fifteen
(15) days after receipt of an Invoice, pay to the Lessor in
immediately available funds all undisputed amounts shown on such
Invoice. If the Lessee objects to any item of expense included in
the calculation of the Leasing Fee shown on an Invoice, the Lessee
will promptly, and in any event within ten Business Days after
receiving such Invoice, notify the Lessor of its objection. Any
dispute regarding an Invoice will be resolved in accordance with
Section 11.5 of the Purchase Agreement and, promptly upon such
resolution, the Lessee will pay to the Lessor any remaining
outstanding amounts determined pursuant to Section 11.5 of the
Purchase Agreement to be due and payable with respect to such
Invoice.
(b) The Leasing Fee will be equal to the sum of the following for each
Leased Employee (determined on a pro rata basis according to the
number of hours worked with respect to Leased Employees who
provide Services on a part-time basis; such pro rata basis to be
specified in the request for such Leased Employees made pursuant
to Section 1 of this Agreement and in accordance with the
Conversion Protocols):
(1) The gross wages or salary (excluding any severance
payments) before deductions for income taxes, employment
taxes and other tax deductions and before reductions for
pre-tax salary deferrals related to Section 401(k) of the
Code and other similar statutes or plans for the Leased
Employee; and
(2) The statutory and non-statutory employee benefit costs for
the Leased Employee actually incurred by the Lessor during
the relevant period during which the Leased Employee
performed Services for the Lessee (including all benefit
accruals during the applicable period and including any
Federal Social Security taxes (FICA) and Federal
Unemployment Insurance taxes (FUTA) or similar taxes
attributable to the Leased Employee during the applicable
period).
D-4
(c) A non-binding estimate of the Leasing Fee for each Business
Employee that the parties reasonably expect, as of the date
hereof, may be a Leased Employee is set forth in ATTACHMENT B.
Each party agrees that ATTACHMENT B contains Proprietary
Information of the other party.
(d) The Lessee will provide to the Lessor, on a weekly basis, a report
setting forth the number of hours worked by each Leased Employee
who provided Services to the Lessee during the preceding week.
(e) No increases in wages or salary, bonus payments or benefit costs
attributable to Leased Employees occurring from and after the
commencement of the Lease Period (in the case of the Sellers'
Leased Employees) or the commencement of service with Purchaser in
accordance with the terms of any employment offers made pursuant
to Section 5.5 of the Purchase Agreement (in the case of the
Purchaser's Leased Employees) will be taken into account for
purposes of calculating the Leasing Fee unless such changes are
approved in writing by the Lessee (which approval will not be
unreasonably withheld or delayed).
(f) The Lessor will, upon Lessee's reasonable request, provide to the
Lessee reasonable supporting documentation for its calculation of
the Leasing Fee.
6. TERM; TERMINATION.
(a) TERM. This Agreement is effective from and after the date hereof
and will terminate as of the expiration of the later of the
Sellers' Lease Period and the Purchaser's Lease Period.
(b) TERMINATION. No party may terminate this Agreement with respect to
any Leased Employee prior to the Sellers' Shutdown Date except as
follows:
(1) The Lessee may terminate this Agreement with immediate
effect with respect to any Leased Employee.
(2) The Lessor will terminate this Agreement with immediate
effect with respect to any Leased Employee whose
employment the Lessor terminated in accordance with this
Agreement.
(3) This Agreement will terminate automatically with immediate
effect upon the resignation of any Leased Employee from
Lessor's employment, PROVIDED that Lessor will give notice
of such resignation to Lessee as promptly as reasonably
practicable.
(c) EFFECTS OF TERMINATION. In the event of the termination of this
Agreement with respect to any Leased Employee:
(1) in the event of a termination of this Agreement with
respect to any Leased Employee that is not reasonably
anticipated by the Lessee, the parties will reasonably
cooperate to ensure that the Lessee is able to obtain any
Services formerly provided by such Leased Employee from an
alternative source; and
(2) the Lessor will include any Leasing Fees with respect to
such terminated Leased Employee in the next subsequent
Invoice and the Lessee will pay such Invoice in accordance
with Section 5.
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7. INDEMNIFICATION. Article X of the Purchase Agreement will be the sole and
exclusive remedy for damages caused as a result of any breach of this
Agreement (except to the extent additionally provided in Article VIII of
the Purchase Agreement, other than in respect of any claim of fraud or for
any breach of Article X of the Purchase Agreement), except that the
remedies of injunction and specific performance will remain available to
the parties. In addition, each party agrees to indemnify, hold harmless,
protect and defend the other party and its Representatives from any Loss
arising out of or resulting from any and all claims, actions or damages
asserted by or awarded to a Leased Employee arising from or caused by the
indemnifying party's failure or alleged failure to comply with any
applicable Legal Requirements or any contract to which the indemnifying
party is a party.
8. CONFIDENTIALITY. All Proprietary Information which either party may acquire
concerning the other party, its affiliates, or their customers and
prospective customers in connection with the performance of Services under
this Agreement will at all times and for all purposes be and remain subject
to the provisions of the Purchase Agreement that relate to Proprietary
Information.
9. FORCE MAJEURE. The Lessor will not be held responsible for any failure or
delay in delivery of, nor the Lessee for any failure or delay in accepting,
the Services if the failure or delay is due to an act of God or the public
enemy, war, government acts or regulations, fire, flood, embargo,
quarantine, epidemic, differences with workmen, accident, unusually severe
weather, or other cause similar or dissimilar to the foregoing, which is
beyond their respective control (each such event, a "FORCE MAJEURE"). If
the performance of this Agreement or any obligation under it by any party
is prevented, restricted or interfered with by reason of a Force Majeure,
the party whose performance is so affected, upon giving prompt notice to
the other party, will be excused from such performance to the extent of
such Force Majeure; PROVIDED however, that the party so affected will use
commercially reasonable efforts to (1) avoid or remove such causes of
nonperformance, and (2) mitigate any loss or damage resulting from such
non-performance, and will promptly continue performance under this
Agreement if and when such causes are removed.
10. NO PARTNERSHIP. Nothing in this Agreement will constitute Sellers or any of
its Affiliates, on the one hand, and Purchaser or any of its Affiliates, on
the other hand, as members of any partnership, joint venture, association,
syndicate, or other entity, or be deemed to confer on any of them any
express, implied, or apparent authority to incur any obligation or
liability on behalf of another party.
11. AMENDMENT; WAIVER. This Agreement may not be amended, and performance with
any provision may not be waived, in either case except by an instrument in
writing signed by the parties hereto or, in the case of a waiver, by the
party against whom the waiver is to be effective. No delay on the part of
any party in exercising any right, power, remedy or privilege hereunder
will operate as a waiver thereof, nor will any waiver on the part of any
party of any right, power, remedy or privilege nor any single or partial
exercise of any such right, power, remedy or privilege, preclude any
further exercise thereof or the exercise of any other such right, remedy,
power or privilege.
12. INCORPORATION BY REFERENCE. Sections 11.1, 11.3, 11.5, 11.6, 11.7, 11.8,
11.9, 11.10, 11.11, 11.12 and 11.13 of the Purchase Agreement are hereby
incorporated by reference MUTATIS MUTANDI.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the date and year first above written.
UNION BANK OF CALIFORNIA, N.A.
____________________________________________
Name:
Title:
UNION BANK OF CALIFORNIA, INTERNATIONAL
____________________________________________
Name:
Title:
UNION BANK OF CALIFORNIA SERVICOS LTDA, a
Brazilian limited liability company, acting
by and through the below parties who hold in
aggregate 100% of its quotas, who
additionally undertake to cause it to act as
provided for it under this Agreement
By: UNION BANK OF CALIFORNIA, N.A.
By:_________________________________________
Name: Xxxxx X. Xxxxx
Title: Senior Vice President
By: THE XXXXX PARTNERSHIP, a California
general partnership
By:_________________________________________
Name: Xxxxx X. Xxxxx
Title: Senior Vice President of Union Bank
of California, N.A., and duly authorized
representative of The Xxxxx Partnership
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WACHOVIA BANK, NATIONAL ASSOCIATION
____________________________________________
Name:
Title:
D-8
ATTACHMENT A
LEASED EMPLOYEE AGREEMENT
I hereby understand and agree that as an employee of [Lessor] I may be asked to
assist [Lessor] in the provision of services to [Lessee] in connection with the
Agreement and Plan of Merger entered into between [Warrior] and [Atlas]. This is
to confirm and acknowledge that at all times while providing such services to
[Lessee] nothing will either alter or modify in any way my status as a [Lessor]
employee or my obligation to comply with all [Lessor] rules, regulations and
policies. Furthermore, I understand and agree that none of the services that I
may be asked to perform for [Lessee] shall make me eligible to participate in
any [Lessee] employee benefit plan.
I agree that, except as may be required by law, I will not, directly or
indirectly, disclose to anyone outside [Lessee], except with [Lessee]'s prior
written consent, any confidential or proprietary information concerning [Lessee]
that I may acquire during the course of providing services in connection with
the arrangement between [Warrior] and [Atlas] relating to [Lessee]'s business
operations including, but not limited to, confidential or proprietary
information, processes and trade secrets ("Confidential Information"). I also
agree that I will not make use of any Confidential Information for my own
purposes or for the benefit of anyone or any other entity other than [Lessee].
Nothing contained in this Attachment shall preclude me from discussing any
matter concerning [Lessee] with any governmental, regulatory or self-regulatory
agency, or with [Lessor] representatives responsible for overseeing my terms and
conditions of employment. Notwithstanding the above, any matter concerning
[Lessee]'s Confidential Information shall not be discussed with any [Lessor]
representative until I first discuss the matter with the [Lessee HR Business
Partner]. If the matter cannot be resolved with the [Lessee HR Business
Partner], I will bring this matter to [Lessee's Head of Human Resources].
Furthermore, I will cooperate with any governmental regulatory or
self-regulatory agency that requests me to provide testimony or information
regarding [Lessee]. If I am compelled to testify by a validly served subpoena in
any legal proceeding or by regulatory authority, I will testify truthfully as to
all matters concerning my work under this Agreement. I agree to disclose to
[Warrior] and [Atlas] as soon as reasonably practical, all requests for
information.
Dated: ____________________
Signed: _______________________
D-9
ATTACHMENT A
EMPLOYEE LEASING FEE ESTIMATE
[To come]
D-10
EXHIBIT E
FORM OF TRADEMARK AND TRADE NAME LICENSE AGREEMENT
THIS TRADEMARK AND TRADE NAME LICENSE AGREEMENT (this "Trademark and
Trade Name License Agreement") is made and entered into this ___ day of
September, 2005 (the "Effective Date"), by and between Union Bank of California,
N.A., a national banking association ("Licensor") and Wachovia Bank, N.A., a
national banking association ("Licensee") (each a "party" and, collectively, the
"parties").
W I T N E S S E T H
WHEREAS, Licensor is the owner of all rights, title and interest in the
trademarks, service marks and trade names listed on EXHIBIT A attached hereto
(collectively, the "Marks"); and
WHEREAS, Licensor, Union Bank of California International and Union
Bank of California Servicos Ltda. (collectively, the "Sellers"), on the one
hand, and Licensee, on the other hand, have entered into that certain Purchase
and Assumption Agreement, dated as of September __, 2005 (the "Purchase
Agreement"), pursuant to which Sellers have agreed to sell certain of their
assets to Licensee; and
WHEREAS, in connection with the Purchase Agreement, Licensor has agreed
to license the Marks to Licensee.
NOW THEREFORE, in consideration of the above premises and the mutual
covenants and undertakings contained herein and the entering into of the
Purchase Agreement and Related Agreements, in reliance upon the representations,
warranties, conditions and covenants contained therein, and upon the
transactions contemplated thereby, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereby agree as follows:
1. DEFINITIONS. Capitalized terms used herein and not otherwise
defined herein have the meanings given to them in the Purchase Agreement.
2. GRANT. To the extent that, as of the Closing Date for a
Business Unit, there exist purchase orders, invoices, brochures, labels,
letterhead, shipping documents, signs (subject to Section 3 hereof),
advertisements and promotional materials or other documents and materials that
incorporate one or more of the Marks ("Existing Stock"), Licensor hereby grants
to Licensee, effective as of such Closing Date, a non-exclusive, royalty-free,
non-transferable, non-sublicensable (subject to Section 6 hereof), personal,
limited license, until the earlier to occur of (a) the depletion of such items
of Existing Stock or (b) 60 days following such Closing Date, to use such Marks
on such Existing Stock solely in the manner as such Marks were used prior to
such Closing Date; provided, that (1) Licensee places a xxxxx, xxxx or other
notation on or includes an insert with all Existing Stock that identifies the
Business as a business or division of Licensee (and not of Sellers) and (2)
Licensee takes reasonably necessary steps to avoid any confusion that Licensee
is acting for or on behalf of a business of Sellers or any of their Affiliates.
Purchaser agrees not to alter, modify, edit or change the Marks as they appear
on the Existing Stock in any manner without the prior written consent of
Licensor, which consent Licensor may withhold in its sole and absolute
discretion, except as expressly provided herein and as necessary to comply with
its obligations hereunder. Notwithstanding anything to the contrary in this
Trademark and Trade Name License Agreement, Licensee shall have the right to (i)
keep records and other historical or archived documents and materials containing
or referencing the Marks, and (ii) refer to the historical fact that the
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Business was previously conducted under the Marks, provided that with respect to
any such reference, Licensee shall not otherwise use the Marks and Licensee
shall expressly state in writing the fact that the Business is no longer
affiliated with Licensor.
3. SIGNS. To the extent permitted by Applicable Law, Licensee may
continue to use signs bearing the name "Union Bank of California" and the "Union
Bank of California" logo which are owned or used by the Business on the Closing
Date for a Business Unit until replaced. Licensee agrees to use its commercially
reasonable efforts to replace such signs as soon as reasonably practicable and
in any event within one (1) month after such Closing Date. Licensee further
agrees that within five (5) Business Days of Licensor's request after such
Closing Date, and for no longer than one (1) month after such Closing Date,
Licensee will prominently display in the New Delhi, Chennai and Hanoi offices of
the Business a notice provided to Licensee by Licensor that the Business is part
of Licensee and not of Sellers.
4. CONSIDERATION. This Trademark and Trade Name License Agreement is
entered into in connection with the Purchase Agreement and no additional
consideration is provided to Licensor hereunder.
5. OWNERSHIP. Licensee recognizes and acknowledges that the Marks and
all associated rights and goodwill are the exclusive property of Licensor and
that all goodwill arising from the use of the Marks by Licensee shall inure to
the benefit of Licensor. Licensee shall not register or use any trade or service
xxxx confusingly similar to the Marks or take any action to dilute or otherwise
detract from the value of the Marks.
6. IRREPARABLE INJURY. Licensee acknowledges that a breach of this
Trade Xxxx and Trade Name License Agreement may cause irreparable injury to
Licensor, and Licensee hereby agrees that in addition to monetary damages
therefor, Licensor shall be entitled to seek an injunction or other equitable
remedy to prevent or limit such breach.
7. TERM & TERMINATION. This Trade Xxxx and Trade Name License Agreement
(a) may be terminated at any time upon written notice by either party if the
other party breaches a material provision or defaults in the performance of a
material obligation under this Trade Xxxx and Trade Name License Agreement, and
such breach or default is not cured within thirty (30) days after written notice
of the breach or default is provided to the other party, and (b) shall
automatically terminate upon the bankruptcy, liquidation (provided that
liquidation shall not include a statutory merger), insolvency, or rehabilitation
of either party. Upon termination, Licensee shall destroy and cease to use all
unused Existing Stock in its possession or control and shall modify any
electronic media of Licensee to eliminate use of the Marks within such media.
8. REPRESENTATIONS AND WARRANTIES; DISCLAIMER.
8.1 Licensor represents and warrants as of the Effective Date
that: (a) it owns all right and title to or has the right to use the Marks; (b)
it has the right and authority to grant the license of the Marks to Licensee set
forth above in Sections 2 and 3; (c) this Agreement does not violate any
currently valid and binding Contracts between Licensor and third persons; and
(d) Licensee's use of the Marks as permitted hereunder will not infringe,
violate or otherwise conflict with any Intellectual Property Rights, proprietary
rights, or other rights held by any third person.
8.2 EXCEPT AS EXPRESSLY PROVDED HEREIN, LICENSOR (A) MAKES NO
WARRANTIES OR REPRESENTATIONS, EXPRESS OR IMPLIED, (B) EXPRESSLY DISCLAIMS ALL
OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO THE IMPLIED
WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, TITLE, ACCURACY
AND NONINFRINGEMENT, AND (C) EXPRESSLY DISCLAIMS ALL
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WARRANTIES THAT MAY ARISE OUT OF COURSE OF DEALING, COURSE OF PERFORMANCE OR
USAGE OF TRADE.
9. MISCELLANEOUS.
9.1. NOTICES. Any notice, request or other communication to be
given by either party hereunder shall be in writing and shall be delivered
personally, sent by registered or certified mail, postage prepaid, by overnight
courier with written confirmation of delivery or by facsimile transmission with
written confirmation of error-free transmission. Any such notice shall be deemed
given when so delivered personally or sent by facsimile transmission (and
immediately after transmission confirmed by telephone), if mailed, on the date
shown on the receipt therefor, or if sent by overnight courier, on the date
shown on the written confirmation of delivery. Such notices shall be given to
the following address:
To Licensor: Union Bank of California, N.A.
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxx
Telephone No.: (000) 000-0000
Fax Number: (000) 000-0000
With a copy to: Union Bank of California, N.A.
Legal Division
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxx
Telephone No.: (000) 000-0000
Fax Number: (000) 000-0000
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To Licensee: Wachovia Bank, National Association
0000 Xxxxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Telephone No.: 000-000-0000.
Fax Number: 000-000-0000
Attention: Xxxxxxx Xxxxxxxx, Executive Vice
President
Telephone No: (000) 000-0000
Fax Number: (000) 000-0000
With a copy to: Wachovia Corporation
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Attention: Xxxxxxx Xxxxxxxx, Senior Vice
President
Telephone No: (000) 000-0000
Fax Number: (000) 000-0000
9.2 SOLE AGREEMENT. This Trademark and Trade Name License
Agreement may not be amended or modified in any respect whatsoever except by
instrument in writing signed by the parties hereto or, in the case of a waiver,
by the party against whom the waiver is to be effective. No delay on the part of
any party in exercising any right, power, remedy or privilege hereunder shall
operate as a waiver thereof, nor shall any waiver on the part of any party of
any right, power, remedy or privilege, nor any single or partial exercise of any
such right, power, remedy or privilege, preclude any further exercise thereof or
the exercise of any other such right, remedy, power or privilege. This Trademark
and Trade Name License Agreement, the Purchase Agreement, the Related
Agreements, and other documents delivered pursuant hereto and thereto, together
with the provisions of the Non-Disclosure Agreement that survive after the date
of the Purchase Agreement pursuant to the terms of the Purchase Agreement,
constitute the entire agreement between the parties hereto with respect to the
subject matter hereof and thereof and supersede all prior negotiations,
discussions, writings and agreements between them with respect thereto.
9.3 SUCCESSORS AND ASSIGNS. This Trademark and Trade Name
License Agreement shall be binding upon and inure to the benefit of Licensee and
Licensor and their respective permitted successors and assigns; provided,
however, that neither Licensee nor Licensor may transfer or assign any of their
respective rights or obligations hereunder, in whole or in part, without the
prior written consent of the other party (except, in the case of Licensee, to a
subsidiary of Licensee provided that Licensee remains fully liable as a
principal for the performance of its obligations hereunder), and any such
transfer or assignment without said consent shall be void, ab initio.
9.4 INTERPRETATION.
9.4.1 In this Trademark and Trade Name License
Agreement, except as context may otherwise require, references:
(a) to the Sections or Exhibit are to the
Section of or Exhibit to this Trademark and
Trade Name License Agreement;
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(b) to this Trademark and Trade Name License
Agreement are to this Trademark and Trade
Name License Agreement, and the Exhibit to
it, taken as a whole;
(c) to this Trademark and Trade Name License
Agreement, are to this Trademark and Trade
Name License Agreement as amended, modified,
supplemented, restated or replaced from time
to time (to the extent permitted by the
terms hereof); and
(d) to the "transactions contemplated hereby"
includes the transactions provided for in
this Trademark and Trade Name License
Agreement.
9.4.2 The article and section headings are for
reference purposes only and do not limit or otherwise affect any of the
substance of this Trademark and Trade Name License Agreement.
9.4.3 The words "include," "includes" or "including"
are to be deemed followed by the words "without limitation."
9.4.4 The words "herein", "hereof" or "hereunder",
and similar terms are to be deemed to refer to this Trademark and Trade Name
License Agreement as a whole and not to any specific Section.
9.4.5 This Trademark and Trade Name License Agreement
is the product of negotiation by the parties, having the assistance of counsel
and other advisers. The parties intend that this Trademark and Trade Name
License Agreement not be construed more strictly with regard to one party than
with regard to the other.
9.4.6 No provision of this Trademark and Trade Name
License Agreement is to be construed to require, directly or indirectly, any
Person to take any action, or omit to take any action, to the extent such action
or omission would violate any Legal Requirement.
9.5 GOVERNING LAW AND JURISDICTION. This Trademark and Trade
Name License Agreement shall be governed by and construed in accordance with the
laws of the State of California applicable to Contracts entered into therein,
without reference to principles of choice of law or conflicts of laws. Licensee
and Licensor each hereby irrevocably and unconditionally submit to the exclusive
jurisdiction of any State or Federal Court sitting in San Francisco County,
State of California, over any suit, action or proceeding arising out of or
relating to this Trademark and Trade Name License Agreement. Licensee and
Licensor each hereby agree that service of any process, summons, notice or
document by U.S. registered mail addressed to such party shall be effective
service of process for any action, suit or proceeding brought against such party
in such court. Licensee and Licensor each hereby irrevocably and unconditionally
waive any objection to the laying of venue of any such suit, action or
proceeding brought in any such court and any claim that any such action, suit or
proceeding brought in any such court has been brought in an inconvenient forum.
Licensee and Licensor each agree that final judgment in any such action, suit or
proceeding brought in any such court shall be conclusive and binding upon such
party and may be enforced in any other courts to whose jurisdiction such party
may be subject, by suit upon such judgment.
9.6 NO THIRD PARTY BENEFICIARIES. Except as otherwise
expressly set forth in Article X of the Purchase Agreement, nothing in this
Trademark and Trade Name License Agreement is intended or shall be construed to
give any Person, other than the parties hereto, any legal or equitable right,
remedy
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or claim under or in respect of this Trademark and Trade Name License Agreement
or any provision contained herein. For the avoidance of doubt, nothing in this
Trademark and Trade Name License Agreement shall be construed to give any
customer or Business Employee any legal or equitable right, remedy or claim
under or in respect of this Trademark and Trade Name License Agreement of any
provision contained herein.
9.7 COUNTERPARTS. This Trademark and Trade Name License
Agreement may be executed by the parties hereto in separate counterparts, each
of which when so executed and delivered shall be an original, but all such
counterparts shall together constitute one and the same instrument. Each
counterpart may consist of a number of copies hereof each signed by less than
all, but together signed by all of the parties hereto. Each counterpart may be
delivered by facsimile transmission, which transmission shall be deemed delivery
of an originally executed document.
9.8 SEVERABILITY. Any term or provision of this Trademark and
Trade Name License Agreement which is invalid or unenforceable in any
jurisdiction shall, as to that jurisdiction, be ineffective to the extent of
such invalidity or unenforceability without rendering invalid or unenforceable
the remaining terms and provisions of this Trademark and Trade Name License
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Trademark and Trade Name License Agreement in any other
jurisdiction, so long as the economic or legal substance of the transactions
contemplated hereby and by the Purchase Agreement and Related Agreements is not
affected in any material respect adversely to any party. If any provision of
this Trademark and Trade Name License Agreement is so broad as to be
unenforceable, that provision shall be interpreted to be only so broad as is
enforceable.
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9.10 EXHIBIT. The exhibit to this Trademark and Trade Name
License Agreement is incorporated herein and, by this reference, made a part
hereof as if fully set forth at length herein.
9.11 SURVIVAL. Sections 5, 6, 8 and 9 of this Trademark and
Trade Name License Agreement shall survive the termination of this Trademark and
Trade Name License Agreement for any reason.
9.13 SUPREMACY. In the event of a conflict between the
provisions of this Trademark and Trade Name License Agreement and the Purchase
Agreement, the provisions of this Trademark and Trade Name License Agreement
shall control.
[The remainder of this page is intentionally left blank]
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IN WITNESS WHEREOF, the parties have executed this Trademark and Trade Name
License Agreement as of the date first above written.
Licensor: Licensee:
UNION BANK OF CALIFORNIA, N.A. WACHOVIA BANK, N.A.
By: By:
_____________________________________ ________________________________
Name: Name:
_____________________________________ ________________________________
Title: Title:
_____________________________________ ________________________________
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ATTACHMENT A
Exhibit A
MARKS
UnionBanCal Corporation
Union Bank
Union Bank of California
"Union Bank of California" logo
Union Bank of California International
UBOC
UBOCI
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