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EXHIBIT 99-A
EXHIBIT A
BRANCH PURCHASE AND ASSUMPTION AGREEMENT
dated as of
March 21, 2001
between
FIRSTPLUS BANK
and
XXXXXXX BANK OF COMMERCE
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ARTICLE 1 DEFINITIONS................................................................................1
1.1 Definitions....................................................................................1
ARTICLE 2 PURCHASE AND SALE..........................................................................4
2.1 Purchase and Sale..............................................................................4
2.2 Closing........................................................................................4
2.3 Transitional Matters...........................................................................6
2.4 Employee Considerations........................................................................7
ARTICLE 3 PRICE AND ADJUSTMENTS......................................................................8
3.1 Price..........................................................................................8
3.2 Adjustments....................................................................................8
ARTICLE 4 ADDITIONAL COVENANTS......................................................................10
4.1 Seller's Covenants............................................................................10
4.2 Buyer's Covenants.............................................................................11
4.3 Consents......................................................................................13
4.4 Valuation of the Assets.......................................................................13
4.5 XXX Deposits and Xxxxx Accounts...............................................................13
4.6 Interest Reporting and Withholding............................................................13
4.7 Eminent Domain or Taking......................................................................13
4.8 Damage or Destruction.........................................................................14
ARTICLE 5 REPRESENTATIONS AND WARRANTIES............................................................14
5.1 Seller's Representations and Warranties.......................................................14
5.2 Buyer's Representations and Warranties........................................................16
ARTICLE 6 UNDERSTANDINGS............................................................................17
6.1 Depositors' Rights............................................................................17
ARTICLE 7 CONDITIONS TO THE CLOSING.................................................................17
7.1 Seller's Conditions...........................................................................17
7.2 Buyer's Conditions............................................................................18
ARTICLE 8 TERMINATION...............................................................................19
8.1 Events of Termination.........................................................................19
8.2 Liability for Termination.....................................................................20
8.3 Liquidated Damages............................................................................20
ARTICLE 9 SURVIVAL, INDEMNIFICATION.................................................................20
9.1 Survival......................................................................................20
9.2 Seller's Indemnity............................................................................20
9.3 Buyer's Indemnity.............................................................................21
9.4 Limit on Indemnities..........................................................................21
ARTICLE 10 TAXES.....................................................................................22
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10.1 Obligations of the Buyer and the Seller.......................................................22
10.2 Access to Information.........................................................................22
10.3 Allocation of Consideration...................................................................22
ARTICLE 11 MISCELLANEOUS.............................................................................22
11.1 Public Notice.................................................................................22
11.2 Assignment....................................................................................23
11.3 Notices.......................................................................................23
11.4 Time..........................................................................................23
11.5 Expenses......................................................................................24
11.6 Communications................................................................................24
11.7 Entire Agreement..............................................................................24
11.8 Amendment.....................................................................................24
11.9 Governing Law, Severability...................................................................24
11.10 Waiver........................................................................................24
11.11 Confidentiality...............................................................................24
11.12 Third Party Rights............................................................................25
11.13 Headings......................................................................................25
11.14 Counterparts..................................................................................25
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SCHEDULES
1.1(a) Furniture, Fixtures and Equipment
1.1(b) Other Liabilities
2.2(b)(i)(B) Form of Xxxx of Sale
2.2(b)(i)(C) Form of Assignment and Assumption
2.2(d) Contracts
5.1(e) Litigation
BRANCH PURCHASE AND ASSUMPTION AGREEMENT
THIS BRANCH PURCHASE AND ASSUMPTION AGREEMENT ("Agreement") is made as of March
21, 2001, by and between FIRSTPLUS BANK, a California industrial bank (the
"Seller"), and XXXXXXX BANK OF COMMERCE, a California banking corporation (the
"Buyer").
WHEREAS, Seller maintains a branch located at 0000 Xxxxxxx Xxxxxxxxx, Xxxxxx
Xxxxxxx Xxxxxxxxxx 00000 (sometimes referred to herein as the "Branch"); and
WHEREAS, the Buyer wishes to purchase certain of the assets and assume certain
of the liabilities of the Branch and the Seller is willing to sell and transfer
the same upon the terms and subject to the conditions hereinafter set forth; and
NOW, THEREFORE, in consideration of the premises and the respective
representations, warranties, covenants, agreements and conditions contained
herein, the Seller and the Buyer hereby agree as follows:
ARTICLE 1 DEFINITIONS
1.1 DEFINITIONS. For purposes of this Agreement:
"Account" means, as of any date, a deposit liability of the Seller which is
maintained at the Branch. "Accrued Expenses" means the accrued and unpaid
expenses appearing as a liability on the Financial Statements pursuant to
Section 3.2(c).
"Accrued Interest" on any Deposits at any date means interest which is accrued
on such Deposits to and including such date and not yet posted to such deposit
accounts. "Affiliate" of a person means any person directly or indirectly
controlling or controlled by or under direct or indirect common control with
such person.
"Agreement" means this Branch Purchase and Assumption Agreement, including all
schedules, exhibits and addenda, as modified, amended or extended from time to
time. "Allocation" shall have the meaning set forth in Section 10.3.
"Assets" means the Furniture, Fixtures and Equipment, Cash on Hand, Prepaid
Expenses, Overdrafts and all books, records, files and documentation relating to
the foregoing. "Assumed Contracts" shall have the meaning set forth in Section
2.2(d).
"Assumed Deposits" means all Deposits existing on the Closing Date in the
Branch, together with all Accrued Interest thereon as of the Closing Date;
provided, however, that Assumed Deposits shall not include any of the following,
which shall be retained by Seller: (i) Deposits which secure loans, (ii)
Deposits not assumed pursuant to Section 3.2(f), (iii) other Deposits, if any,
which the Buyer has advised the Seller, at least thirty (30) Business Days prior
to the Closing Date, it cannot legally accept.
"Xxxx Right of First Refusal" means the right of Xxxx Bank, SSB, of Texas under
a Right of First Refusal Agreement (attached hereto as Exhibit A) to acquire the
Branch on the exact same terms as provided in this Agreement.
"Branch Premises Lease" means the lease between Seller and the owner of the
branch premises a copy of which is attached hereto as Exhibit B. "Branch
Premises Lease Assignment" means a real estate agreement to be executed between
the Seller and the Buyer by which the Buyer shall assume and be responsible for
all future obligations of the lessee of the Branch Premises Lease.
"Business Day" means a day on which the Branch is open for business and which is
not a Saturday or Sunday.
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"Cash on Hand" means, as of any date, all xxxxx cash, vault cash, teller cash,
and prepaid postage maintained at the Branch. "Closing" and "Closing Date" refer
to the closing of the sale, purchase, transfer and assumption provided for
herein to be held at the time and date provided for in Section 2.2(a) hereof.
"Closing Financial Statement" means the estimated balance sheet of the Branch
prepared by the Seller as of the close of business at the Branch on the Closing
Date and on which are recorded as of such date, in accordance with the Seller's
normal practices and procedures, the Assets and the Liabilities (except that
such normal practices and procedures shall be modified as necessary to
implement prorations required by, or other provisions of, this Agreement).
"Deposits" means, as of any date, all deposit liabilities of the Seller that are
Accounts or certificates of deposit maintained at the Branch, including, without
limitation, Time Deposits, and including all uncollected items included in
depositors' balances, as of such date. "Direct Deposit Cut-off Date" shall have
the meaning set forth in Section 4.1(g). "Employee" means any employee employed
on the Closing Date at the Branch by Seller or its subsidiaries or Affiliates,
including without limitation, those employees on medical leave, family leave,
military leave or personal leave under Seller's policies. "Federal Funds Rate"
on any day means the per annum rate of interest (rounded upward to the nearest
1/100 of 1%) which is the weighted average of the rates on overnight federal
funds transactions arranged on such day or, if such day is not a banking day,
the previous banking day, by federal funds brokers computed and released by the
Federal Reserve Bank of San Francisco (or any successor) in substantially the
same manner as such Federal Reserve Bank currently computes and releases the
weighted average it refers to as the "Federal Funds Effective Rate" at the date
of this Agreement. "Final Financial Statement" means the balance sheet of the
Branch prepared by the Seller as of the close of business at the Branch on the
Closing Date, and delivered by the Seller to the Buyer pursuant to Section
3.2(a)(ii). The Final Financial Statement is to be prepared in accordance with
the Seller's normal practices and procedures (except that such normal practices
and procedures shall be modified as necessary to implement prorations required
by, or other provisions of, this Agreement) and in a manner consistent with the
Closing Financial Statement. "Financial Statements" shall mean collectively the
Closing Financial Statement, the Pre-Final Financial Statement and the Final
Financial Statement. "Furniture, Fixtures and Equipment" means all furniture,
fixtures and equipment that are listed on Schedule 1.1(a) under the caption
"Sold to Buyer." Buyer acknowledges that there shall be excluded from this
definition any and all other items, including those listed on Schedule 1.1(a)
under the caption "Retained by Seller (Items Excluded from Sale)." "Individual
Retirement Account" or "XXX" means an account created by trust for the exclusive
benefit of an individual or his or her beneficiaries in accordance with the
provisions of Section 408 of the IRC. "Initial Base Amount" shall have the
meaning set forth in Section 3.1. "XXX Deposits" shall have the meaning set
forth in Section 3.2(e). "IRC" means the Internal Revenue Code of 1986, as
amended. "Liabilities" means (i) the Assumed Deposits, (ii) the Assumed
Contracts, if any, (iii) the Seller's obligations to provide services from and
after the Closing Date in connection with the Assets and the Assumed Deposits,
and (iv) such other liabilities of the Seller with respect to the operations of
the Branch as may be described on Schedule 1.1(b) (the "Other Liabilities");
excluding, however, any Assumed Contracts as to which any consents required to
transfer the same to the Buyer at Closing cannot be obtained; and no other duty,
obligation or liability whatsoever (including, without limitation, any and all
penalties, fines, compensatory or punitive damages of any kind whatsoever) of
the Seller, its Affiliates or any other person or with respect to the Assets or
Liabilities. "Magnetic Tapes" shall mean the computer data storage tapes (which
may be in reel-to-reel or cartridge form) prepared by Seller which contain the
information to be used for an automated conversion of the Assumed Deposits.
"Overdrafts" means only overdrafts in Accounts (other than overdrafts extended
pursuant to a formal line of credit or similar arrangement) maintained at the
Branch. "Pre-Final Financial Statement" means the balance sheet of the Branch
prepared by the Seller as of the close of business at the Branch on the Closing
Date, and delivered by the Seller to the Buyer pursuant to Section 3.2(a)(i).
The Pre-Final Financial Statement is to be prepared in accordance with the
Seller's normal practices and procedures (except that such normal practices and
procedures shall be modified as necessary to
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implement prorations required by, or other provisions of, this Agreement) and in
a manner consistent with the Closing Financial Statement, and shall, to the
extent practicable, reflect actual Deposits and Cash on Hand as of the Closing
Date, and any third-party invoices (such as from communication vendors)
available by the time the Seller prepares the Pre-Final Financial Statement.
"Prepaid Expenses" means the prepaid expenses appearing as an asset on the
Financial Statements pursuant to Section 3.2(c). "Purchase Premium" means 2.37%
times the Assumed Deposits located in the Branch on the Closing Date, payable by
the Buyer to the Seller as of the Closing Date. "Returned Items" shall have the
meaning set forth in Section 3.2(f). "Seller's Knowledge" or other similar
phrases shall mean the actual knowledge, without having conducted any
independent inquiry or investigation, of the manager of the Seller responsible
for the Branch (but only as to information as to the Branch). "Settlement Date"
means the sixtieth (60th) calendar day following the Closing Date. "Time
Deposit" means a certificate of deposit which is not transferable or negotiable,
and earns interest at a fixed or variable rate for a specific term. "Validation
Run" shall have the meaning set forth in Section 2.2(b)(i)(F).
ARTICLE 2 PURCHASE AND SALE
2.1 PURCHASE AND SALE. Upon the terms and subject to the conditions of this
Agreement, the Seller agrees to sell and transfer and the Buyer agrees to
purchase and assume the Assets and the Liabilities at the Closing as
provided in Section 2.2.
2.2 CLOSING.
(a) Closing Date and Place. The closing of the transactions
provided for herein will be held at a place selected by the parties. The
closing shall be held on a date that is mutually agreeable to the Buyer and
the Seller as soon as practicable (but no later than 15 business days)
following the receipt of all government and other approvals and consents
necessary for the consummation of the transactions contemplated hereby
(including the expiration of any statutory waiting periods) and the
satisfaction (or waiver) of all other conditions to closing provided for
herein. Notwithstanding the foregoing, the Seller may, for any proper
business reason, adjourn the date and time of the Closing to a date not
later than June 30, 2001, upon written notice to the Buyer; provided,
however, that the Seller shall use all reasonable efforts to reschedule the
Closing to take place at a time agreeable to the Buyer, which agreement
shall not be unreasonably withheld; provided further, however, that the
parties shall agree in any event upon a date for the Closing which shall be
on or prior to June 30, 2001, or such other date as the Seller and the
Buyer shall agree upon in writing.
(b) Conveyances; Payment.
(i) The following shall be delivered by the parties at the
Closing, subject to Sections 2.2(d), 3.2(b), 4.3 and the final paragraph of
Section 7.2:
(A) The Seller and the Buyer shall mutually
execute and deliver the Branch Premises Lease Assignment;
(B) The Seller shall deliver to the Buyer
one or more bills of sale in the form attached hereto as Schedule
2.2(b)(i)(B) for the Furniture, Fixtures and Equipment;
(C) The Seller shall deliver to the Buyer one or
more assignments in the form attached hereto as Schedule 2.2(b)(i)(C) for
the Assumed Contracts, if any;
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(D) The Seller shall make the payment to the
Buyer required by Section 3.1 in immediately available funds (such payment
to be made no later than 11:00 a.m.(Pacific Time) the morning following the
Closing Date);
(E) The Seller shall make available for pick up
by the Buyer at a place mutually selected by the parties by the Buyer by
approximately 9:00 a.m. on the morning following the Closing Date (i) hard
copy (printed) lists of Assumed Deposits maintained at the Branch, which
lists shall identify each Assumed Deposit by type of Account, with
appropriate information regarding the depositor and the terms of the
Account and (ii) by approximately 6:00 a.m. on the morning following the
Closing Date, Magnetic Tapes. The Buyer shall have the responsibility of
making and paying for the appropriate courier arrangements to pick up from
the Seller the items referred to in (i) and (ii) above and to deliver the
items referred to in (i) to the Branch and the items referred to in (ii) to
the Buyer's system vendor;
(F) The Seller shall prepare for the Branch a
readable set of the Magnetic Tapes and printed reports referred to in
Section 2.2(b)(i)(E) to be used for at least one a validation (practice)
run ("Validation Run") on a mutually agreed-upon date thirty (30) to sixty
(60) calendar days prior to the Closing Date, at no cost to the Buyer,
provided that, the parties may agree to conduct more than one Validation
Run. If the Buyer thereafter requests any additional Magnetic Tapes
(whether or not Buyer also concurrently requests printed reports) for
Validation Run purposes, the Seller will provide the Magnetic Tapes (and
printed reports if requested by Buyer) at a cost to Buyer equal to the cost
incurred by Seller for each set of Magnetic Tapes (whether or not
accompanied by printed reports); and
(G) The Seller shall deliver to the Buyer copies
of written consents to the assignment of any Assumed Contracts requiring
such consent.
(c) Closing Costs; Proration. The Seller and the Buyer shall each
pay one-half of any documentary, stamp, deed, sales, use or other transfer
taxes, recording fees and escrow fees relating to the sale of the Assets
and assumption of the Liabilities. On the Closing Date, (i) all personal
property taxes and current installments of special assessments levied or
assessed with respect to the Furniture, Fixtures and Equipment shall be
prorated between the Seller and the Buyer on a daily basis as of the
Closing Date based upon the fiscal year of the appropriate taxing
authority, and (ii) utilities and any other normal maintenance and
operating expenses relating to the Furniture, Fixtures and Equipment shall
be prorated between the Seller and the Buyer as of the Closing Date on a
daily basis.
(d) Contracts. At the Closing, the Seller shall assign to the
Buyer all of the Seller's right, title and interest in those equipment
leases and service and maintenance contracts, if any, relating to the
operations of the Branch which are set forth in Schedule 2.2(d) and which
the Buyer indicates in writing to the Seller not later than thirty (30)
Business Days prior to Closing the Buyer wishes to assume (collectively,
the "Assumed Contracts"). The Seller shall have no liability to the Buyer
as the result of its inability to accomplish assignments of contracts which
it believes are not legally assignable so long as such contracts are
disclosed to Buyer at least 10 days prior to the Closing Date. After the
date of this Agreement, the Seller shall not enter into, except with the
prior written consent of the Buyer, any service, maintenance or other
contracts, or any equipment lease, relating to the operations of the Branch
for which the Buyer shall have any responsibility after the Closing.
(e) No Other Debts, Obligations, Responsibilities or Liabilities
Assumed. It is expressly understood and agreed that, except as set forth in
this Agreement, Buyer shall not assume or be liable for any debts,
obligations, responsibilities or liabilities of Seller of any kind and
nature whatsoever.
2.3 TRANSITIONAL MATTERS.
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(a) Conduct of Business Prior to the Closing. From the date hereof
until the Closing, except as expressly permitted by this Agreement or
otherwise consented to or approved by the Buyer in writing (such consent or
approval not to be unreasonably withheld):
(i) The Seller shall not permit the Branch to incur any
material liabilities or material obligations (whether directly or by way of
guaranty, endorsement, surety contract or otherwise) including without
limitation any obligation for borrowed money or evidenced by any note,
bond, debenture or similar instrument, except for deposit liabilities
incurred in the ordinary course of business pursuant to the Seller's
customary rate schedules, and except for other liabilities and obligations
incurred in the ordinary course of business;
(ii) The Seller shall not sell, transfer, mortgage,
encumber or otherwise dispose of any of the Assets except for the
disposition of Assets in the ordinary course of business;
(iii)
Except as provided in Article 6, the Seller will not
cause the transfer from the Branch to the Seller's other operations of any
deposits of the type included in the Liabilities; provided, however, that
the Seller may transfer deposits to the Seller's other offices upon request
of the depositors and may transfer to its other offices other deposits
which are not to be transferred to Buyer pursuant to this Agreement;
(iv) The Seller will maintain the Furniture, Fixtures and
Equipment substantially in accordance with its normal practices, and keep
such property in its present condition, ordinary wear and tear excepted;
(v) The Seller shall operate the Branch and the businesses
thereof in accordance with its normal practices and will use reasonable
efforts to preserve for the benefit of the Buyer after the Closing its
business, goodwill and relationships with customers and suppliers; and,
consistent with the foregoing, Seller shall maintain deposit rates at the
Branch substantially in accord with past practices; and
(vi) The Seller shall provide the Buyer reasonable access
during normal business hours to and the opportunity to review and inspect
the Furniture, Fixtures and Equipment of the Branch, and the books,
records, files, documentation and accounts of the Branch; shall furnish to
the Buyer such reports and compilations pertaining thereto as the Buyer
shall reasonably request from time to time; and shall furnish to the Buyer
all such other information pertaining to the Assets and the Liabilities and
the business of the Branch as the Buyer may reasonably request. In
addition, the Seller shall provide the Buyer reasonable access to the
Branch during the sixty (60) calendar day period immediately preceding the
Closing Date for the purpose of installing teller terminals and other
equipment, provided that (A) Seller shall not be required to provide such
access to the Branch until after all consents, approvals and authorizations
referred to in Sections 7.1(c) and 7.2(c) hereof have been obtained with
respect to the Branch and (B) Buyer shall give Seller at least twenty-four
(24) hours advance notice that it wishes to have such access. The Buyer
agrees to cause the installation of such teller terminals and other
equipment to be effected in a manner intended to minimize disruption to the
operations of the Branch.
(b) Buyer's Access to Branch Premises. The Buyer will indemnify,
defend, and hold Seller harmless for, from and against any and all claims,
damages, costs, liabilities and losses (including mechanics' liens) arising
out of any entry by Buyer or its agents, designees or representatives on
the Branch property for purposes of the review, inspection and installation
provided for in Section 2.3(a)(viii) or for any other purpose. The
provisions of this Section 2.3(b) shall survive the Closing or any earlier
termination of this Agreement. The provisions of this Section 2.3(b) shall
survive the Closing or any earlier termination of this Agreement.
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(c) Data Processing Conversion. The conversion of the data
processing with respect to the Branch and the Assets and the Liabilities to
be transferred hereunder will commence on the Closing Date and continue
during the night on the Closing Date and the following morning; provided,
Seller will reasonably cooperate with Buyer in its reasonable preparations
for data processing conversion during the 30 days preceding the Closing
Date. The Seller shall make available the required hard copy (printed)
reports (and Magnetic Tapes, if applicable) in connection therewith for
pick up from the Seller at a location mutually selected by the parties by
6:00 a.m. on such morning, subject to any production problems that are
beyond the Seller's reasonable control. In connection with the conversion
of the data processing, the Seller and the Buyer shall each cooperate with
the other and shall each pay their own costs and expenses associated with
the conversion of the data processing and shall bear equally the duties and
responsibilities relating to the conversion.
2.4 EMPLOYEE CONSIDERATIONS. All Employees of Seller shall be terminated on
or before the Closing Date at the expense of Seller. Following the Closing
Date or at such other time as may be agreed upon by the parties, Buyer will
in good faith interview the Employees for consideration as employees of
Buyer.
ARTICLE 3 PRICE AND ADJUSTMENTS
3.1 PRICE. The Seller agrees that in the event the Initial Base Amount (as
hereinafter defined) is less than the sum of (i) the amount of the Assumed
Deposits and (ii) the amount of the Accrued Expenses, the Seller shall
transfer to the Buyer cash in the amount equal to the deficit. The Buyer
agrees that in the event the Initial Base Amount is greater than the sum of
(i) the amount of the Assumed Deposits and (ii) the amount of the Accrued
Expenses, the Buyer shall transfer to the Seller cash in an amount equal to
such excess. Calculations and payments pursuant to this Section 3.1 shall
be as of the date and time of the Closing Financial Statement. The "Initial
Base Amount" shall be equal to the sum of (i) the amount of Cash on Hand,
(ii) the amount of the net book value as reflected on Seller's books for
the Furniture, Fixtures and Equipment, (iii) the amount of Prepaid Expenses
at the Branch, (iv) the amount of the Overdrafts, (v) the amount of any
fees, charges or accrued interest receivable on such Overdrafts, (vi) the
amount of the Purchase Premium, and (vii) the Seller's pro rata portion of
XXX Deposit and Xxxxx Account trustee fees accrued on such accounts held in
the Branch through the Closing Date.
3.2 ADJUSTMENTS. Subject to the provisions of Article 9, the assignments,
transfers, acceptances and assumptions of the Assets and the Liabilities
and the payment of the amounts due in respect thereof in accordance with
Sections 2.2 and 3.1 shall be final and without recourse and not subject to
any claim for reimbursement, repayment, rescission or avoidance; provided,
however, that:
(a) The following adjustments shall be made:
(i) At a time that is practicable prior to the Closing
Date, but in no event later than ten (10) calendar days thereafter, the
Seller shall deliver the Pre-Final Financial Statement to the Buyer. After
delivery of the Pre-Final Financial Statement, the Seller shall pay the
Buyer or the Buyer shall pay the Seller, as appropriate, by wire transfer
no later than the next Business Day after delivery of the Pre-Final
Financial Statement, the difference between the amount paid at the Closing
and the amount calculated on the Pre-Final Financial Statement, plus
interest accrued from the Closing Date at the Federal Funds Rate in effect
on the Closing Date.
(ii) At a time that is practicable prior to the Closing
Date, but in no event later than sixty (60) calendar days thereafter, the
Seller shall deliver the Final Financial Statement to the Buyer. Subject to
the Seller's and Buyer's rights of indemnification pursuant to Article 9,
the Final Financial Statement shall become final and binding on the Buyer
and the Seller ten (10) calendar days after its delivery to the Buyer,
unless the Buyer gives written notice to the Seller of its disagreement
with respect to any item included in such Final Financial Statement. The
Seller and the Buyer shall
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use their respective reasonable efforts to resolve the disagreement during
the ten (10) calendar day period following receipt by the Seller of the
notice. If the disagreement is not resolved during such ten (10) calendar
day period, the parties shall submit the dispute for mediation and
resolution to a neutral certified public accounting firm that is
knowledgeable about bank accounting issues. Such resolution shall be
consistent with what, in such firm's professional judgment, is proper bank
accounting practice, and such Final Financial Statement shall be modified
by any such resolution, whereupon the Final Financial Statement shall
become final and binding. When the Final Financial Statement becomes final
and binding, and after giving effect to any payment made based on the
Pre-Final Financial Statement, the Seller shall pay the Buyer or the Buyer
shall pay the Seller, as appropriate, the difference between the amount
paid at the Closing and the amount calculated on the Final Financial
Statement, plus interest accrued from the Closing Date at the Federal Funds
Rate in effect on the Closing Date.
(b) If any non-material Asset (materiality to be determined by
Seller in good faith) shall not have been assigned to the Buyer at the
Closing, then the Seller shall use its reasonable efforts to assign such
Asset to the Buyer as soon as possible after the Closing Date but in any
event no later than on the Settlement Date. In the event the Seller for any
reason is unable to assign any such Asset to the Buyer prior to or on the
Settlement Date, then the Seller shall no longer have any obligation to
assign such Asset to the Buyer and the Seller shall refund to the Buyer the
value of such Asset as reflected on the Closing Financial Statement
together with interest from the Closing Date through the date of such
refund at a rate equal to the Federal Funds Rate in effect on the Closing
Date;
(c) All operating expenses and fees accrued or prepaid prior to
the Closing Date, including, without limitation, wages, salaries, rents,
Bank Insurance Fund ("BIF") premiums, utility payments, personal property
taxes, non-delinquent real property taxes and assessments relating to the
Assets and the Liabilities transferred at the Closing, shall be prorated
between the parties. With respect to the BIF premiums, the proration shall
be on the basis of the amount of the Assumed Deposits. To the extent that
the Seller has paid expenses that are expenses allocable to the Buyer
pursuant to this Section 3.2(c), such expenses shall appear as an asset on
the Financial Statements. To the extent that expenses have been accrued and
not paid by the Seller prior to the Closing Date, they shall appear as a
liability on the Financial Statements;
(d) As soon as practicable after the Closing Date, the Seller will
provide to the Buyer a report of customer data for the Branch showing the
names, addresses, tax identification numbers (where available from the
Seller's records) and deposit balances of each and all of the customers of
the Branch as of such date; the customer data shall include the signature
cards for all Assumed Deposits and a list of Accounts and certificates of
deposit subject as of the Closing Date to annual Taxpayer Identification
Number solicitation by Seller in the normal course of its business;
(e) With respect to Deposits which are Individual Retirement
Accounts ("XXX Deposits") created by a trust for the exclusive benefit of
an individual or his or her beneficiaries in accordance with the provisions
of Section 408 of the IRC, the Seller will use reasonable efforts and will
cooperate with the Buyer, both before and after the Closing, in taking
whatever actions are reasonably necessary to accomplish either the
appointment of the Buyer as successor custodian or the delegation to the
Buyer (or an affiliate of the Buyer) of the Seller's authority and
responsibility as custodian of all such XXX Deposits except self-directed
XXX Deposits (and, for those customers with self-directed XXX Deposits, any
other XXX Deposits), including but not limited to, sending to the
depositors thereof appropriate notices, cooperating with the Buyer (or such
affiliate) in soliciting consents from such depositors, and filing any
appropriate applications with applicable regulatory authorities. If any
such delegation is made to the Buyer (or such affiliate), the Buyer (or
such affiliate) will perform all of the duties so delegated and comply with
the terms of the Seller's agreement with the depositor of the XXX Deposits
affected thereby; and
(f) Any items that were credited for deposit to or against an
Assumed Deposit prior to the Closing
11
and are returned unpaid on or within sixty (60) calendar days after the
Closing Date ("Returned Items") will be handled as set forth herein. If the
Seller's bank account is charged for the Returned Item, the Seller shall
forward such Returned Item to the Buyer. If upon the Buyer's receipt of
such Returned Item there are sufficient funds in the Assumed Deposit to
which such Returned Item was credited or any other Assumed Deposit
transferred at the Closing standing in the name of the party liable for
such Returned Item, the Buyer will debit any or all of such Assumed
Deposits an amount equal in the aggregate to the Returned Item, and shall
repay that amount to the Seller. If there are not sufficient funds in the
Assumed Deposit because of the Buyer's failure to honor holds placed on
such Assumed Deposit, the Buyer shall repay the amount of the Returned Item
to the Seller. If there are not sufficient funds in the Assumed Deposit for
any other reason, the Buyer shall repay the balance of the Assumed Deposit
to the Seller and create an overdraft for the unrecovered portion of the
Returned Item. Any items that were credited for deposit to or cashed
against an Assumed Deposit at the Branch prior to the Closing Date and are
returned unpaid more than sixty (60) calendar days after the Closing Date
will be the responsibility of the Buyer, except that for a period of
eighteen (18) months after the Closing Date checks drawn on the United
States Treasury, checks issued by state governments and municipalities and
checks returned for endorsement irregularities will be the responsibility
of the Seller.
ARTICLE 4 ADDITIONAL COVENANTS
4.1 SELLER'S COVENANTS. The Seller (and, to the extent specifically
indicated below, the Buyer) agrees:
(a) To sign and deliver to the Buyer such additional agreements
and other documents, and to do such other acts and things, as may be
required to complete the transactions contemplated by this Agreement;
(b) To reasonably cooperate with the Buyer in obtaining all
governmental and regulatory consents, approvals, licenses, waivers and the
like required to be fulfilled or obtained for the completion of the
transactions contemplated by this Agreement;
(c) To deliver to the Buyer those books, records, accounts and
other documents relating solely to the Assets and the Liabilities as soon
as practicable after the Closing and to store the other books, records and
accounts of the Branch relating to the Seller's former operation of the
Branch in accordance with Seller's normal records retention policy;
(d) Until Closing or the earlier termination of this Agreement, to
cause the business of the Branch to be conducted in accordance with Section
2.3 above;
(e) To remove all signage from the Branch at the expense of the
Seller on or before the Closing Date, it being understood that the Buyer
shall be responsible for installation of its signage at its expense;
(f) Seller and the Buyer shall cooperate with each other to
provide, or join in providing where appropriate, all notices, separately as
to the Branch, to holders of Deposits and other persons that the Seller or
the Buyer, as the case may be, is required to give by any regulatory
authority having jurisdiction or under applicable law or the terms of any
other agreement between the Seller and any customer in connection with the
transactions contemplated hereby. A party proposing to send or publish any
notice or communication pursuant to any provision of this Section 4.1(f) or
Section 4.2(f) shall furnish to the other party a copy of the proposed form
of such notice or communication as soon as
12
practicable in advance of the proposed date of the first mailing, posting,
or other dissemination thereof to customers, and shall not unreasonably
refuse to amend such notice to incorporate any changes that the other such
party proposes as necessary to comply with applicable statutes, rules,
regulations or requirements of any regulatory authority having
jurisdiction. All costs and expenses of any notice or communication sent or
published by the Buyer or the Seller shall be the responsibility of the
party sending such notice or communication. All out-of-pocket costs and
expenses of any joint notice or communication which Buyer or Seller pays to
a third-party vendor shall be shared equally by the Seller and the Buyer.
Each party shall bear the costs and expenses of its own employees or agents
engaged in any joint notice or communication;
(g) The Seller will use reasonable efforts to transfer to the
Buyer on the Closing Date all of those automated clearing house and fed
wire direct deposit arrangements which are tied by agreement or other
standing arrangement to Assumed Deposits.;
(h) As soon as practicable after the receipt of all regulatory
approvals required by Sections 7.1(c) and 7.2(c) with respect to the Branch
(except for statutory waiting periods), and after the notice provided in
Section 4.1(f) above, the Buyer will send appropriate notice to all holders
of Deposits which are to be assumed by the Buyer at the Closing the terms
of which provide for direct debit of such accounts by third parties,
instructing such customers concerning transfer of customer direct debit
authorizations from the Seller to the Buyer. The Seller shall cooperate in
soliciting the transfer of such authorizations. Such notice shall be in a
form agreed to by the parties; and
(i) In addition to the requirements and procedures set forth in
Sections 4.1(g) and 4.1(h), the Buyer shall, commencing on the first
Business Day following the Closing Date, deliver to the originators of the
direct deposits of Assumed Deposits and the originators of direct debits of
Assumed Deposits specified in such sections, notices of change instructing
such originators to change the routing transit number for such deposits and
debits from the Seller's routing transit number to the Buyer's routing
transit number.
4.2 BUYER'S COVENANTS. The Buyer agrees:
(a) To use reasonable efforts to sign and deliver to the Seller
such additional agreements and other documents, and to do such other acts
and things, as may be required to complete the transactions contemplated by
this Agreement;
(b) To apply for approval of the transactions contemplated by
this Agreement to all governmental agencies having jurisdiction of the
transactions contemplate in this Agreement and to use its best efforts to
fulfill all governmental, regulatory and other requirements (including,
without limitation, obtaining the approval of all California and federal
bank or other financial institution regulatory agencies and any other
governmental entity having jurisdiction over the Buyer's acquisition of the
Branch or the Buyer) required to be fulfilled by the Buyer for the
completion of the transactions contemplated by this Agreement, and to take
the initial drafting responsibility therefor. The Seller shall have the
right to review and comment upon all applications to, and filings with,
governmental and regulatory agencies and entities made for the above
purpose, prior to their filing; provided that, the Seller shall have no
responsibility for any such application or filing. Without limiting the
generality of the foregoing, Buyer agrees to file all required regulatory
applications within thirty (30) calendar days after the date of this
Agreement;
(c) To pay, honor, discharge and perform all liabilities and
obligations in respect of the Assets and the Liabilities and any other
liabilities of the Branch arising, accruing or subsisting after the Closing
which the Buyer is obligated to assume pursuant to this Agreement, subject
to applicable indemnification rights of the Buyer;
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(d) Not to use, keep or claim any registered or unregistered
trademark, service xxxx or other identification commonly associated with
the Seller, or any sign, display or similar material of the Seller or any
banking or other forms, stationery, passbooks, checks, traveler's checks,
cashier's checks, manager's checks or similar banking material of the
Seller or bearing the Seller's name or other similar marks or
identification (except to the extent necessary to conduct business
operations, and then only if the Seller's name, marks or identification are
obliterated from such material, and such material is clearly identified as
that of the Buyer), or any proprietary material of the Seller including,
without limitation, operating manuals, training manuals and public
relations, explanatory or advertising materials; and
(e) As of the Closing Date, to become the "holder," as that term
is defined in the California Unclaimed Property Law (Code of Civil
Procedure ss. 1500, et seq.), of all Assumed Deposits which the Buyer
assumes under this Agreement. The Buyer will be responsible for the escheat
of any property for which it becomes the holder and which becomes abandoned
during the calendar year in which the Closing occurs.
(f) To provide timely notice to the holders of Deposits to be
transferred on the Closing Date that, subject to Closing, that Buyer will
be assuming liability for such Deposits, and following or concurrently with
such notices the Buyer may communicate with and deliver information,
brochures, bulletins and other communications to holders of Deposits
concerning the transactions contemplated by this Agreement and concerning
the business and operations of the Buyer.
(g) To continue to operate the Branch at its current location for
a period of at least ninety (90) calendar days after the Closing Date
(unless Buyer has provided Seller written confirmation from Buyer's
appropriate banking regulatory agency that any earlier change in location
by Buyer would be exempt from the notice and other requirements of 12
U.S.C. Sec. 1831r-1).
(h) To obtain approval of this Agreement and the transactions
contemplated hereby by the requisite vote or consent of the holders of
outstanding securities of the Buyer if such approval is required by
applicable law, contract, the Buyer's Articles of Incorporation or Bylaws,
or otherwise.
4.3 CONSENTS. The Seller shall use its reasonable efforts to obtain any
nongovernmental consents required for the transfer or assignment of the
Assets and Liabilities to Buyer pursuant to this Agreement, including
Assumed Contracts, if any; provided, however, that (a) the Seller shall not
be required to pay any additional compensation or fee to any person or
entity to obtain any such consent, (b) the Buyer agrees that it shall
provide reasonable assistance to the Seller to obtain such consents, and
(c) Seller shall be entitled to rely on the final paragraph of Section 7.2
hereof if it does not obtain one or more such consents.
4.4 VALUATION OF THE ASSETS. Buyer agrees that it is relying solely upon
its own judgment, after such investigation and inspection as it deems
necessary or appropriate, as to the quality, condition, fitness and value
of the Assets and the nature and amount of the Liabilities, and Seller
hereby disclaims any representations or warranties made by Seller as to
their condition, value, nature or amount except those made in Section 5.1
of this Agreement.
4.5 XXX DEPOSITS AND XXXXX ACCOUNTS. The Seller will deliver to the Buyer,
on the Closing Date, copies of the Seller's documents for each XXX Deposit
and Xxxxx Account which is included in the Assumed Deposits. The Seller
will prepare and file all reports to government authorities required to be
filed for the period ending on the Closing Date and all prior periods. The
Buyer will be responsible for all such reporting for periods commencing on
the day after the Closing.
4.6 INTEREST REPORTING AND WITHHOLDING. Unless otherwise agreed to by the
parties, the Seller will report to applicable taxing authorities and
holders of Assumed Deposits transferred on the Closing Date, with respect
to the period from January 1 of the year in which the Closing occurs
14
through and including the Closing Date, all interest credited to, withheld
from and any early withdrawal penalties imposed upon the Assumed Deposits.
The Buyer will report to the applicable taxing authorities and holders of
Assumed Deposits, with respect to all periods from the day after the
Closing Date, all such interest credited to, withheld from and any early
withdrawal penalties imposed upon such Assumed Deposits. Any amounts
required by any governmental agencies to be withheld from any of the
Assumed Deposits through the Closing Date will be withheld by the Seller in
accordance with applicable law or appropriate notice from any governmental
agency and will be remitted by the Seller to the appropriate agency on or
prior to the applicable due date. Any such withholding required to be made
subsequent to the Closing Date shall be withheld by the Buyer in accordance
with applicable law or the appropriate notice from any governmental agency
and will be remitted by the Buyer to the appropriate agency on or prior to
the applicable due date. Promptly after the Closing Date, but in no event
later than the date the Buyer is obligated to remit such amounts to the
applicable governmental agency, the Seller will pay to the Buyer that
portion of any sums theretofore withheld by the Seller from any Assumed
Deposits transferred on the Closing Date which are or may be required to be
remitted by the Buyer pursuant to the foregoing and shall directly remit to
the applicable governmental agency that portion of any such sums which are
required to be remitted by the Seller.
4.7 EMINENT DOMAIN OR TAKING. If proceedings under a power of eminent
domain relating to the Branch or any part thereof are commenced prior to
the Closing Date, Seller will promptly inform Buyer in writing.
(a) If such proceedings involve the taking of all of or a material
interest in the Branch, the Buyer may elect to terminate this Agreement by
notice in writing sent within ten (10) calendar days of Seller's written
notice to Buyer, in which case neither party will have any further
obligation to or rights against the other with respect to the Branch except
any rights or obligations of either party which are expressly stated to
survive termination of this Agreement.
(b) If the proceedings do not involve the taking of all of or a
material interest in the Branch, or if the Buyer does not elect to
terminate this Agreement as to the Branch, this transaction will be
consummated as described herein, and, subject to the Branch Premises Lease
Agreement, or other encumbrances, if any, relating to the Branch, any award
or settlement payable with respect to such proceeding will be paid or
assigned to the Seller on the Closing Date.
(c) If the Closing contemplated by this Agreement is not
consummated for any reason, the Buyer will have no claim to any
condemnation award or settlement with respect to the Branch.
4.8 DAMAGE OR DESTRUCTION. Prior to the Closing Date, as between the Seller
and the Buyer, the entire risk of loss or damage by earthquake, flood,
landslide, fire or other casualty is borne and assumed by the Seller.
ARTICLE 5 REPRESENTATIONS AND WARRANTIES.
5.1 SELLER'S REPRESENTATIONS AND WARRANTIES. The Seller represents and warrants
to the Buyer that, as of the date of this Agreement (or, as to any
information specified in a Schedule to have been compiled as of some
earlier date, as of such earlier date):
(a) The Seller is a California industrial bank, duly organized
under the California Financial Code validly existing and in good standing
under the laws of the State of California;
(b) The Seller has the requisite power and authority to execute,
deliver and perform this Agreement and to consummate the transactions
contemplated hereby; all corporate action necessary to be taken by or on
the part of the Seller to execute, deliver and perform this Agreement and
15
to consummate the transactions contemplated hereby has been duly and
validly taken; and this Agreement has been duly executed and delivered by,
and constitutes the valid and binding agreement of the Seller, enforceable
in accordance with its terms except as limited by bankruptcy, insolvency,
reorganization, fraudulent transfer, moratorium and similar laws affecting
creditors generally and by the availability of equitable remedies;
(c) The execution, delivery and performance by the Seller of this
Agreement do not, and the consummation by the Seller of the transactions
contemplated hereby will not, violate or conflict with the Articles of
Incorporation or Bylaws of the Seller, or any law or regulation currently
applicable to the Seller, or any material agreement or instrument, or
currently applicable award, order, judgment or decree to which the Seller
is a party or by which it is bound, or require any filing by the Seller
with, or authorization, approval, consent or other action with respect to
the Seller by, any governmental or regulatory agency except such as have
been made or obtained and are in full force and effect;
(d) Schedule 2.2(d) sets forth a list of all material written
contracts, agreements and other obligations known to the Seller to which
the Seller is a signatory which relate to the operation of the Branch
(other than those giving rise to the Assets and the Liabilities), including
without limitation equipment leases and service and maintenance contracts,
consulting contracts, agency agreements and licensing agreements;
(e) Except as set forth in Schedule 5.1(e): (i) there is no
litigation, claim, action, suit or proceeding pending which, if adversely
determined, would adversely affect the use of the Assets or the
Liabilities; and (ii) to the Seller's knowledge, there is no litigation,
claim, action, suit or proceeding threatened by any organization, person,
individual or governmental agency which, if adversely determined, would,
individually or in the aggregate, materially and adversely affect the use
of the Assets or the Liabilities;
(f) Other than Xxxxxxxxx and Company, the Seller has not in any
manner whatsoever paid or agreed to pay any fee or commission to any agent,
broker, finder or other person for or on account of services rendered as a
broker or finder in connection with this Agreement or the transactions
covered and contemplated hereby. All negotiations relating to this
Agreement have been conducted by the Seller directly and without the
intervention of any person in such manner as to give rise to any valid
claim against the Seller for any brokerage commission or like payment; and
(g) A certificate of occupancy or equivalent is in effect
permitting the occupancy of the Branch for its present use. The Seller
holds all licenses materially required in connection with the use or
occupancy of the Branch.
(h) Seller's deposits are insured by the FDIC in the manner and to
the full extent provided by law. To Seller's knowledge, no governmental
authority is contemplating entering into any written agreement or
memorandum of understanding with Seller that would restrict Seller's
ability to consummate the actions contemplated by this Agreement.
(i) Seller's Financial Statements will present fairly the
financial position of the Branch as of the dates thereof.
(j) Seller's records accurately and validly reflect, in all
material respects, its transactions. Such records, to the extent they
contain important information pertaining to Seller which is not easily and
readily available elsewhere have been duplicated, and such duplicates are
stored safely and securely.
(k) Seller has good title to all Assets, free and clear of all
mortgages, liens, encumbrances, pledges or charges of any kind or nature,
except for (i) liens for current taxes not yet
16
due and payable; (ii) liens incurred in the ordinary course of business and
which do not materially impair the business of Seller, or materially
detract from the usefulness of the properties subject thereto; or (iii)
such liens as are disclosed in Seller's Financial Statements.
(l) Except as otherwise disclosed hereunder, there is no private
or governmental suit, claim, action, arbitration or proceeding pending, nor
any private or governmental suit, claim, action, arbitration or to Seller's
knowledge threatened, nor does Seller know of any facts or circumstances
which would form a basis for any such suit, claim, action, arbitration or
proceeding against Seller, or against any of its directors, officers,
contingent workers or employees relating to the performance of their duties
in such capacities, or against or affecting any properties of Seller which
individually, or in the aggregate, could have a material adverse effect on
the Assets conveyed hereunder.
(m) Except as set forth hereunder, Seller is not in breach of any
law, ordinance, rule, regulation, order, judgment or decree applicable to
it promulgated by any governmental authority having authority over it,
where such default or breach would have a material adverse effect on the
Assets conveyed hereunder.
5.2 BUYER'S REPRESENTATIONS AND WARRANTIES. The Buyer represents and
warrants to the Seller that, as of the date of this Agreement:
(a) The Buyer is a banking corporation, duly established and in
good standing under the laws of the State of California;
(b) Subject to the satisfaction of any applicable governmental or
regulatory requirements referred to in Section 4.2(b) and to approval of
this Agreement and the transactions contemplated hereby by the requisite
vote or consent of the holders of outstanding securities of the Buyer if
such approval is required by applicable law, contract, the Buyer's Articles
of Incorporation or Bylaws, or otherwise, the Buyer has the requisite power
and authority to execute, deliver and perform this Agreement and to
consummate the transactions contemplated hereby; all acts and other
proceedings required to be taken by or on the part of the Buyer to execute,
deliver and perform this Agreement and to consummate the transactions
contemplated hereby have been duly and validly taken; and this Agreement
has been duly executed and delivered by, and constitutes the valid and
binding agreement of, the Buyer, enforceable in accordance with its terms
except as limited by bankruptcy, insolvency, reorganization, fraudulent
transfer, moratorium and similar laws affecting creditors generally and by
the availability of equitable remedies;
(c) Subject to the satisfaction of any applicable governmental or
regulatory requirements referred to in Section 4.2(b), the execution,
delivery and performance by the Buyer of this Agreement do not, and the
consummation by the Buyer of the transactions contemplated hereby will not,
violate or conflict with the articles of incorporation or bylaws of the
Buyer, or any law or regulation currently applicable to the Buyer, or any
material agreement or instrument, or currently applicable order, judgment
or decree to which the Buyer is a party or by which it is bound or require
any prior filing by the Buyer with, or authorization, approval, consent or
other action with respect to the Buyer by, any governmental or regulatory
agency except such as have been made or obtained and are in full force and
effect or will be made or obtained and in full force and effect as of the
Closing;
(d) There are no actions, suits or proceedings pending or, to the
knowledge of the Buyer, threatened against or affecting, the Buyer, which
may cause a material adverse change in the Buyer's business or financial
condition;
(e) Other than Columbia Financial Advisors, the Buyer has not paid
or agreed to pay any fee or commission to any agent, broker, finder or
other person for or on account of services rendered as a broker or finder
in connection with this Agreement or the transactions covered and
17
contemplated hereby. All negotiations relating to this Agreement have been
conducted by the Buyer directly and without the intervention of any person
in such manner as to give rise to any valid claim against the Seller for
any brokerage commission or like payment;
(f) The Buyer has not received written notice from any federal or
California governmental or regulatory agency indicating that it would
oppose or not grant or issue its consent or approval, if required, with
respect to the transactions contemplated by this Agreement;
(g) The Buyer satisfies each and all of the standards and
requirements lawfully within the control of the Buyer of which it is aware
(and, as of the Closing Date, will satisfy each and all of the standards
and requirements lawfully within the control of the Buyer) imposed as a
condition to obtaining or necessary to comply with and in order to obtain
any of the governmental or regulatory approvals referred to in Section
4.2(b) of this Agreement; and
(h) At the time of the most recent regulatory evaluation of
Buyer's performance under the Community Reinvestment Act (the "CRA"),
Buyer's record of performance was deemed to be "outstanding" or
"satisfactory", and no proceedings are pending or to the knowledge of
Buyer, threatened, that would result in a change in such evaluation. Buyer
has not received any adverse public comments with respect to its compliance
under the CRA since the date of its most recent regulatory evaluation of
its performance under the CRA.
ARTICLE 6 UNDERSTANDINGS
Buyer and Seller understand and agree as follows:
6.1 DEPOSITORS' RIGHTS. The Buyer and the Seller understand and agree that
all transfers to the Buyer of Assumed Deposits are subject to the
individual depositors' continuing rights to withdraw, and the Seller makes
no representation or warranty to the Buyer concerning the continuing
maintenance of such deposits at the Branch.
ARTICLE 7 CONDITIONS TO THE CLOSING
7.1 SELLER'S CONDITIONS. The obligations of the Seller to consummate the
Closing shall be subject to the satisfaction at or prior to Closing of all
of the following conditions, any one or more of which may be waived, in
whole or in part, by the Seller:
(a) The Buyer shall have complied in all material respects with
each of its covenants and agreements contained herein to be performed at or
prior to the Closing Date, and each of the representations and warranties
of the Buyer in Section 5.2 hereof shall be true and correct in all
material respects as if made at and as of the Closing;
(b) The Buyer shall have delivered to the Seller a duly authorized
and signed officer's certificate, dated as of the Closing Date, certifying
as to the matters specified in Section 7.1(a), and further that (i) the
methodology and accounting procedures used by the Seller in preparing the
Closing Financial Statement have been reviewed and are acceptable to the
Buyer, and (ii) the Buyer, to and including the Closing Date, has performed
such review of the books, records, files, documentation and accounts of the
Branch as it has deemed appropriate;
(c) All consents, approvals and authorizations required to be
obtained prior to the Closing from governmental and regulatory authorities
in connection with the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby to be consummated at
the Closing shall have been made or obtained, and shall remain in full
force and effect, all waiting periods applicable to the consummation of the
transactions contemplated hereby shall have expired or been terminated and
all required regulatory filings shall have been made; provided, however,
that no
18
governmental or regulatory consent, approval or authorization shall have
imposed any condition or requirement that the Seller in good faith
determines to be materially burdensome upon the business of the Seller or
upon the consummation of the transactions contemplated hereby;
(d) There shall not be in effect any non-appealable final order,
decree or judgment of any court or governmental body having competent
jurisdiction that would be violated by consummation of the transactions
contemplated hereby, nor any material pending or threatened action,
proceeding or investigation, the adverse determination of which would
result in such order, decree or judgment; provided, that in the case of
such material pending or threatened action, proceeding or investigation,
neither party shall decline to proceed with the Closing pending final
resolution thereof without exercising its reasonable efforts promptly to
determine jointly with the other party the merit thereof and the likelihood
of an adverse determination in such proceeding;
(e) This Agreement and the transactions contemplated hereby shall
have been approved by the requisite vote or consent of the holders of
outstanding securities of the Buyer if such approval is required by
applicable law, contract, the Buyer's Articles of Incorporation or Bylaws,
or otherwise; and
(f) The Xxxx Right of First Refusal shall not have been exercised.
7.2 BUYER'S CONDITIONS. The obligations of the Buyer to consummate the
Closing shall be subject to the satisfaction at or prior to Closing of all
of the following conditions, any one or more of which may be waived, in
whole or in part, by the Buyer:
(a) The Seller shall have complied in all material respects with
each of its covenants and agreements herein to be performed at or prior to
the Closing Date and each of the representations and warranties of the
Seller contained in this Agreement and the Schedules shall be true and
correct in all material respects as if made at and as of Closing except to
the extent of changes that have occurred prior to Closing that are
consistent with the provisions of Section 2.3(a);
(b) The Seller shall have delivered to the Buyer a duly authorized
and signed officer's certificate, dated as of the Closing Date, certifying
that (i) the representations and warranties of the Seller contained in this
Agreement and the Schedules are true and correct as of the Closing Date,
and (ii) the Seller has complied in all material respects with each of its
covenants and agreements herein to be performed at or prior to the Closing
Date;
(c) As to the Branch, there shall have been given, obtained or
satisfied in final form any notice, approval, permit or other requirement
of law or any competent governmental or regulatory authority that is
necessary to proceed with the Closing, including without limitation such
approvals as may be required of any California or federal bank or other
financial institution regulatory agency and any other entity or entities
having jurisdiction over the Branch, the Buyer or the Seller, and no such
agency or entity shall, in connection therewith, have imposed any condition
or requirement that would result in a material adverse effect on the
business or prospects of the Branch or the Buyer, or on the consummation of
the transactions contemplated hereby;
(d) There shall not be in effect any nonappealable final order,
decree or judgment of any court or governmental body having competent
jurisdiction that would be violated by consummation of the transactions
contemplated hereby, nor any material pending or threatened action,
proceeding or investigation, the adverse determination of which would
result in such order, decree or judgment; provided, that in the case of
such material pending or threatened action, proceeding or investigation,
neither party shall decline to proceed with the Closing pending final
resolution thereof without exercising its reasonable efforts promptly to
determine jointly with the other party the merit thereof and the likelihood
of an adverse determination in such proceeding; and
19
(e) Xxxxx Xxxxxxxxx, Trustee for the FPFI Creditors Trust
("Trustee") shall have delivered an undertaking related to Section 9.2 as
negotiated between Buyer and the Trustee.
ARTICLE 8 TERMINATION
8.1 EVENTS OF TERMINATION. This Agreement may be terminated at any time
prior to Closing:
(a) By the mutual written agreement of the Seller and the Buyer;
(b) By the Seller or by the Buyer in the event that the Closing
has not occurred on or before the date indicated in the third proviso in
Section 2.2(a), or such other date as the Seller and the Buyer shall agree
in writing, unless the failure to so consummate by such time is due to a
breach of this Agreement by the party seeking to terminate;
(c) By the Seller or by the Buyer if consummation of the
transactions contemplated hereby would violate any nonappealable final
order, decree or judgment of any court or governmental body having
competent jurisdiction;
(d) By the Seller or the Buyer, in the event of a material breach
by the other of any representation, warranty or agreement contained herein
which is not cured or cannot be cured within thirty (30) calendar days
after written notice of such termination has been delivered to the
breaching party; provided, however, that termination pursuant to this
Section 8.1(d) shall not relieve the breaching party of liability for such
breach or otherwise.
(e) By Seller or Buyer upon the expiration of 20 calendar days
after any governmental agency having jurisdiction over Buyer shall have
denied or refused to grant the approvals or consents required to be
obtained to allow Buyer to complete the transactions contemplated by this
Agreement; and
(f) By Buyer or Seller if the Xxxx Right of First Refusal has been
exercised.
Any party desiring to terminate this Agreement pursuant to any of the
foregoing clauses shall give written notice of such termination to the
other party.
8.2 LIABILITY FOR TERMINATION. If this Agreement is terminated as permitted
by Section 8.1, except as provided in Section 8.1(d), such termination
shall be without liability of either party (or any shareholder, director,
officer, employee, agent, consultant or representative of such party) to
the other party to this Agreement, except that, if such termination shall
result from the willful failure of a party to fulfill a condition to the
performance of the obligations of the other party or to perform a covenant
of this Agreement or from a willful misrepresentation or breach of a
warranty, covenant or agreement hereunder by either party to this
Agreement, such party shall be fully liable for any and all damages, costs
and expenses (including, but not limited to, reasonable attorney's fees)
sustained or incurred by the other party as a result of such failure or
breach.
8.3 LIQUIDATED DAMAGES. The parties have determined that, in the event the
Agreement is terminated by Seller for reasons other than as provided in
Section 8.1, Buyer would suffer damages which would be difficult or
impossible to ascertain. For this reason, the parties have determined by
mutual agreement that in the event of such termination, Seller shall pay
Buyer on or before the date 90 days after termination, as liquidated
damages, $50,000 in cash. Any such amount shall bear interest on the unpaid
amount thereof from the date due at a rate equal to The Wall Street Journal
West Coast prime rate, calculated on a daily basis, until paid in full.
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ARTICLE 9 SURVIVAL, INDEMNIFICATION
9.1 SURVIVAL. The covenants, agreements, representations and warranties of
the parties hereto made, contained in or to be performed pursuant to this
Agreement, the Schedules hereto or the officers' certificates delivered
pursuant hereto or in connection herewith shall survive Closing and remain
operative and in full force and effect until the first anniversary of the
Closing Date, except for the provisions of Sections 10.1 and 11.11, which
shall survive such first anniversary. Notwithstanding the preceding
sentence, any covenant, agreement, representation, warranty or claim in
respect of which indemnity may be sought under Sections 9.2 or 9.3 shall
survive the time at which it would otherwise terminate pursuant to the
preceding sentence if notice of the claim, inaccuracy or breach giving rise
to such right to indemnity shall have been given to the party against whom
such indemnity may be sought prior to such time. After Closing, the sole
and exclusive remedy of the Buyer and the Seller for any breach of any
covenant or agreement or any inaccuracy of any such representation or
warranty by the Seller or the Buyer shall be the indemnities contained in
Sections 9.2 and 9.3, respectively, which shall survive Closing.
9.2 SELLER'S INDEMNITY. Subject to the proviso in the final sentence of
Section 9.1, the Seller hereby indemnifies the Buyer against and agrees to
hold it harmless from any and all damage, loss, liability and expense
(including, without limitation, reasonable expenses of investigation and
attorney's fees and expenses in connection with any action, suit or
proceeding brought against the Buyer) demanded, claimed or threatened in
writing against the Buyer or incurred or suffered by the Buyer arising out
of (i) any action taken or omitted to be taken by the Seller prior to the
Closing relating to the ownership or operation of the Branch prior to
Closing, but excluding any damage, loss, liability or expense resulting
from actions taken by the Seller at the written direction of the Buyer;
(ii) any misrepresentation or breach of warranty, covenant or agreement
made, contained in or to be performed by the Seller pursuant to this
Agreement, the Schedules hereto or the Seller's officer's certificate; and
(iii) any claim or demand by any Branch employee of the Seller who shall
not become an employee of the Buyer (except as may be the result of any
action or inaction of the Buyer). The Seller shall not be liable under this
Section 9.2 for any settlement effected without its consent (which consent
shall not be unreasonably withheld) of any claim, litigation or proceeding
in respect of which indemnity may be sought hereunder. The Buyer agrees to
give prompt notice to the Seller of the assertion of any claim, or the
commencement of any suit, action or proceeding in respect of which
indemnity may be sought hereunder. The Seller may, and at the request of
the Buyer shall, participate in and control the defense of any such suit,
action or proceeding at its own expense.
9.3 BUYER'S INDEMNITY. Subject to the proviso in the final sentence of
Section 9.1, the Buyer hereby indemnifies the Seller against and agrees to
hold it harmless from any and all damage, loss, liability and expense
(including, without limitation, reasonable expenses of investigation and
attorney's fees and expenses in connection with any action, suit or
proceeding brought against the Seller) demanded, claimed or threatened in
writing against the Seller or incurred or suffered by the Seller arising
out of (i) ownership or operation of the Branch on and after Closing
(except as to such damage, liability, loss or expense resulting from
actions taken by the Buyer at the written direction of the Seller); and
(ii) any misrepresentation or breach of warranty, covenant or agreement
made, contained in or to be performed by the Buyer pursuant to this
Agreement, the Schedules hereto or the Buyer's officer's certificate. The
Buyer shall not be liable under this Section 9.3 for any settlement
effected without its consent (which consent shall not be unreasonably
withheld) of any claim, litigation or proceeding in respect of which
indemnity may be sought hereunder. The Seller agrees to give prompt notice
to the Buyer of the assertion of any claim, or the commencement of any
suit, action or proceeding in respect of which indemnity may be sought
hereunder. The Buyer may, and at the request of the Seller shall,
participate in and control the defense of any such suit, action or
proceeding at its own expense.
9.4 LIMIT ON INDEMNITIES.
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(a) Notwithstanding any other provision hereof, an indemnifying
party shall not be liable under this Article 9 for any losses sustained by
the indemnified party with respect to the Branch unless and until the
aggregate amount of all such losses sustained by the indemnified party with
respect to the Branch shall exceed $25,000, in which event the indemnifying
party shall be liable only for such losses in excess of $25,000. The
minimum $25,000 amount shall not apply to amounts which one party may be
required to pay to the other under Sections 3.2, 4.1(g), 4.1(h), 4.5 and
10.1 of this Agreement or other provisions dealing with customary and
foreseeable post-closing adjustments. In no event shall the aggregate
losses for which the Seller may be liable under this Article 9 or any other
basis exceed the amount of the Initial Base Amount. The obligations of
Seller under the provisions of this Article 9 are personal to Seller and
shall not be binding on Seller's affiliates, successors or assigns. IN
ADDITION, THE INDEMNIFYING PARTY SHALL HAVE NO OBLIGATIONS UNDER THIS
AGREEMENT FOR ANY CONSEQUENTIAL LIABILITY, DAMAGE OR LOSS OF THE
INDEMNIFIED PARTY THAT THE INDEMNIFIED PARTY MAY SUFFER.
(b) Each party's right to indemnification under this Article 9
shall preclude any other monetary award (whether at law or in equity) and
shall preclude assertion by such party of any right to any such monetary
award from the indemnifying party.
ARTICLE 10 TAXES
10.1 OBLIGATIONS OF THE BUYER AND THE SELLER. The Buyer and the Seller shall
each assume and pay one-half of the following: any documentary, stamp,
deed, sales, use or other transfer taxes, recording fees and escrow fees
relating to the sale of the Assets and assumption of the Liabilities. On
the Closing Date, all real and personal property taxes and current
installments of special assessments levied or assessed with respect to the
Furniture, Fixtures and Equipment shall be prorated between the Seller and
the Buyer on a daily basis as of the Closing Date based upon the fiscal
year of the appropriate taxing authority.
10.2 ACCESS TO INFORMATION. For the applicable period required by law, the
Seller and the Buyer shall have a right to have access to and to copy all
of the records of the other party relevant to the Assets and the
Liabilities and necessary for the preparation of income tax returns,
employee tax returns, employee reports, employee benefits calculations, and
for customary accounting functions and other similar bona fide purposes.
Additionally, the Buyer and the Seller each agree to make available to the
other party, at reasonable times and upon reasonable advance notice,
relevant records and personnel in connection with an investigation or the
preparation of or participation in a defense, negotiation or settlement
relating to any pending, future, or threatened litigation or government
agency proceeding (including a tax audit) involving the conduct or interest
of such other party.
10.3 ALLOCATION OF CONSIDERATION. The Buyer and the Seller shall use
reasonable efforts to allocate the consideration payable hereunder at the
Closing among the Assets, tangible and intangible, on the basis of an
allocation (the "Allocation") to be agreed upon by the Buyer and the Seller
prior to the Closing.
ARTICLE 11 MISCELLANEOUS
11.1 PUBLIC NOTICE. All written notices to third parties, including
customers of the Branch, all oral or written notices or general
communications to employees of the Branch, and all public announcements and
press releases concerning the transactions contemplated by this Agreement
made prior to Closing shall be jointly planned and coordinated by the Buyer
and the Seller. Neither party shall act unilaterally in this regard without
the prior approval of the other party, which shall not be unreasonably
withheld or delayed; provided, however, that in the event that a party
reasonably concludes that a public announcement or release is required by
applicable law and the parties cannot reach agreement upon a mutually
acceptable release, the party releasing the information, announcement or
public statement shall not be deemed to be in breach of this Agreement.
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11.2 ASSIGNMENT. Neither party shall assign this Agreement or any of its
rights, duties or obligations hereunder without the prior written consent
of the other party.
11.3 NOTICES. Notices and legal process to be delivered to or served upon
either party hereto shall be deemed to have been duly delivered or served
when delivered in written form by hand or by telegraph, telex or facsimile
transmission, or the day after being sent from within the continental
United States by overnight delivery or courier service, or three (3)
calendar days after posting by registered mail or certified mail with
return receipt requested, to the parties hereto at the following addresses:
If to the Seller:
FirstPlus Bank
00000 Xxxxxx Xxxxxxxxx
Xxxxxx, XX 00000
Attention: Xxxxxxx X. XxXxxxx
Fax: (000) 000-0000
With a copy to:
XxXxxxxxx Xxxxx Xxxxx & Xxxxxxx, LLP
0 Xxxxxxxxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxx, Esq.
Fax: (000) 000-0000
If to the Buyer:
Redding Bank Of Commerce
0000 Xxxxx Xxxxx Xxxx
Xxxxxxx, XX 00000
Attention: Xxxxxxx Xxxxx, President
Fax: (000) 000-0000
With a copy to:
Xxxxxx, Brand, Seymour & Xxxxxx
000 Xxxxxxx Xxxx, 00xx Xxxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxxx Xxxxxx, Esq.
Fax: (000) 000-0000
or to such other authorized agent or address as either party may hereafter
select by written notice to the other party.
11.4 TIME. Time shall be of the essence for all purposes connected with this
Agreement.
11.5 EXPENSES. Except as otherwise expressly provided herein, the Buyer and
the Seller shall each bear its own out-of-pocket expenses incurred in
connection with the transactions contemplated by this Agreement.
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11.6 COMMUNICATIONS. If for any reason any payment or communication to which
one party is entitled is received by the other party hereto, the receiving
party shall promptly forward such payment or communication to the other
party.
11.7 ENTIRE AGREEMENT. This Agreement embodies the entire agreement and
understanding between the parties hereto and supersedes all prior
agreements and understandings, except that certain Confidentiality
Agreement between the parties hereto which was executed as of March 22,
2001 (the "Confidentiality Agreement"), relating to the subject matter of
this Agreement. The Confidentiality Agreement shall survive, in accordance
with its own terms, the execution, delivery and performance of this
Agreement.
11.8 AMENDMENT. Neither this Agreement nor any provision hereof may be
changed, waived, discharged or terminated orally. Any such change, waiver,
discharge or termination may be effected only by an instrument in writing
signed by the party against which enforcement of such change, waiver,
discharge or termination is sought.
11.9 GOVERNING LAW, SEVERABILITY. This Agreement shall be governed by and
construed in accordance with the laws of the State of California. If any
one or more of the provisions of this Agreement shall for any reason be
held to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other
provision of this Agreement, and this Agreement shall be construed as if
such invalid, illegal or unenforceable provision were not contained herein.
11.10 WAIVER. No delay or omission to exercise any right, power or remedy
accruing to either party upon any breach or default under this Agreement
shall impair any such right, power or remedy of such party, nor shall it be
construed to be a waiver of any such breach or default, or an acquiescence
therein, or in any similar breach or default thereafter occurring; nor
shall any waiver of any single breach or default be deemed a waiver of any
other breach of default theretofore or thereafter occurring. Any waiver,
permit, consent or approval or any kind or character of any breach or
default under this Agreement, or any waiver of any provision or condition
of this Agreement, must be in writing and shall be effective only to the
extent specifically set forth in such writing. All rights and remedies,
either under this Agreement or by law or otherwise afforded to a party,
shall be cumulative and not alternative.
11.11 CONFIDENTIALITY. The Buyer and its representatives, agents and
designees shall keep confidential and shall not disclose to any person or
entity, without Seller's prior written consent: the amount of the Purchase
Premium, the fact that confidential information has been made available to
Buyer, the existence of this Agreement or any of the terms or conditions
hereof, the status of the transactions contemplated hereby, all information
concerning the books, records, accounts and documents of Seller to which it
has access under this Agreement. These restrictions, however, shall not
apply to any such information (i) that becomes public knowledge through no
fault, act or omission of Buyer or its representatives, agents or designees
(for purposes of this Section 11.11 collectively the "Buyer"), (ii) that
Buyer lawfully acquires from an entity not under an obligation of
confidentiality to Seller, (iii) that is independently developed by Buyer,
(iv) where the Buyer is legally compelled to disclose such information,
provided that the Seller is provided with advance written notice of the
intention of Buyer to disclose to allow the Seller to contest the proposed
disclosure before any court or agency with jurisdiction unless such notice
impedes a duty or obligation of the Buyer under applicable laws,
regulations or legal requirements to timely report such information, in
which event Buyer shall concurrently advise Seller of Buyer's disclosure,
or (v) where the Buyer, upon advice of counsel, is required to disclose
such information in connection with a public offering of its equity
securities. In case of any actual or purported inconsistency or conflict
between the provisions of this Agreement and the provisions of the
Confidentiality Agreement with respect to obligations of the Buyer to
maintain confidentiality as to any information, the provisions which impose
a higher standard of confidentiality on the Buyer with respect to such
information shall control and govern as to such actual or purported
inconsistency or conflict.
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11.12 THIRD PARTY RIGHTS. Nothing contained in this Agreement, whether
express or implied, is intended to (i) confer any rights or remedies upon
any persons other than the parties hereto and their respective successors
and assigns, (ii) relieve or discharge the obligations or liabilities of
any third person to either party to this Agreement, or (iii) give any third
person any right of subrogation or action over either party to this
Agreement.
11.13 HEADINGS. The headings and captions used herein and in the Schedules
are included for purposes of convenience of reference only and shall not
limit or define the meaning of any provisions of this Agreement.
11.14 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original instrument,
but all of which together shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers or representatives as of the date
first above written.
SELLER:
FIRSTPLUS BANK
By: /s/ XXXXXXX XXXXXXX
----------------------------
Xxxxxxx XxXxxxx
Its: President & CEO
BUYER:
REDDING BANK OF COMMERCE
By: /s/ XXXXXXX X. XXXXX
----------------------------
Xxxxxxx X. Xxxxx
Its: President & CEO
