Exhibit 2.4
COVENANT NOT TO SOLICIT CUSTOMERS OR TAKE DEPOSITS
--------------------------------------------------
This Covenant Not To Solicit Customers (the "Covenant") is executed
and delivered by Bank of America, FSB, a Federal Savings Bank ("Seller"), and
American Savings Bank, F.S.B., a Federal Savings Bank ("Purchaser") this 5th day
of December, 1997.
RECITALS
A. Seller and Purchaser entered into a Purchase and Assumption
Agreement dated as of May 26, 1997 (the "Agreement"), by which Purchaser will
acquire certain of Seller's retail branches and operational offices in the State
of Hawaii, together with substantially all of Seller's deposit liabilities and a
significant portion of Seller's Hawaii-based loans.
B. Capitalized terms used and not otherwise defined herein shall
have the meanings assigned to such terms in the Agreement.
C. Seller and Parent or their Affiliates maintain and will be
continue to maintain after consummation of the transactions provided for in the
Agreement, residential, commercial, corporate and business loan origination
offices and operations in the State of Hawaii (the "Loan Offices").
D. Seller has numerous Affiliates, all of which are subject to the
control of Parent, and Parent executes this Covenant Not to Solicit Customers on
behalf of itself and all of its existing and future Affiliates.
E. Active solicitation by Seller, Parent or their Affiliates of the
future business of depositors and other customers of Seller whose deposits,
loans or other accounts are transferred to Purchaser under the Agreement will
adversely affect Purchaser's operations and diminish the value of the Assets and
Liabilities acquired by Purchaser pursuant to the Agreement.
AGREEMENT
NOW, THEREFORE, in view of the foregoing, and in consideration of the
benefits of the transactions contemplated by the Agreement, the parties hereto
hereby agree as follows:
1. For a period of two years after the Closing Date, Seller shall
not, and Seller shall take such steps as shall be necessary to ensure that
Parent and their Affiliates do not, use lists or any other information in their
possession as of the Closing Date and which are derived from the Records
("Customer Lists"), that identify the names and addresses of Persons who now are
or at any time have been depositors and Persons who are borrowers with respect
to the Loans ("Acquired Customers") to solicit deposits (including, without
limitation, Accounts and Certificates of Deposit) or other banking products of
the types included in the Assets in the State of Hawaii; provided, however, that
-------- -------
nothing in this paragraph 1 shall limit the right of Seller, Parent or their
Affiliates to (i) advertise for business from the public generally, (ii) to
solicit depositors or other customers of the Hawaii Division who, prior to the
Closing Date, (A) had existing deposits, loans or other accounts at branches or
other offices of Seller or its Affiliates outside of Hawaii, pursuant to
solicitations which arise from their status as a customer at such other branches
or offices, or, (B) had a loan or other business relationship with Seller,
Parent or an Affiliate which is not acquired by Purchaser and continues with
Seller after the Closing Date; or (iii) to solicit any Acquired Customer for any
purpose so long as such solicitation is not based
upon use of a Customer List. Seller, Parent and their Affiliates shall be
entitled to retain and use Customer List information for any purpose other than
the foregoing.
2. For a period of six (6) months after the Closing Date, neither
Seller nor its Affiliates shall solicit or take deposits at any location in the
State of Hawaii, nor for a period of two (2) years after the Closing Date shall
Seller or its Affiliates solicit or take deposits at the Other Branches;
provided, however, that Seller may take deposits outside the State of Hawaii
-------- -------
from depositors whose Deposits are not transferred to or assumed by Purchaser.
3. If any of the foregoing restrictions on solicitation or
competition is determined by a court of competent jurisdiction to be invalid or
unenforceable by reason of such restriction extending for too great a period of
time or covering too broad a geographical area, or by reason of its being too
extensive in any other respect, such restriction shall be interpreted to extend
only over the maximum period of time and geographical area, and to the maximum
extent in all other respects, as to which it is valid and enforceable, all as
determined by such court in such action. Any determination that any provision
hereof is invalid or unenforceable, in whole or in part, shall have no effect on
the validity or enforceability of any remaining provision hereof.
4. Seller acknowledges that its breach of any of the foregoing
provisions hereof will cause irreparable damage to Purchaser, the exact amount
of which will be difficult or impossible to ascertain, and that the remedies at
law for any such breach will be inadequate. Accordingly, in addition to any
other remedies, Seller agrees that Purchaser shall be entitled to injunctive
relief ordering Seller's specific performance of the foregoing agreements,
without the necessity for bond or other security to be posted by Purchaser.
5. This Agreement shall be governed by and construed in accordance
with the internal laws of the State of Hawaii.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Covenant Not To Compete as of the date first written above.
BANK OF AMERICA, FSB,
a Federal Savings Bank
By: /s/ Xxxxxxx X. Sted
-----------------------
Its: EVP
-----------------------
AMERICAN SAVINGS BANK, F.S.B.,
a Federal Savings Bank
By /s/ Xxxxx X. Xxxxxx
-----------------------
Its: President
-----------------------
By: /s/ Xxxxxxx X.X. Xxxxx
-----------------------
Its: General Counsel VP
-----------------------
2
