EXHIBIT 10.19
DEPOSIT ASSUMPTION AND LOAN PURCHASE AGREEMENT
THIS AGREEMENT ("Agreement") is made and entered into as of the 7th day
of August, 2003, by and between Korea Exchange Bank, Seoul, Republic of Korea
("Seller") and Nara Bank, N.A., Los Angeles, California ("Buyer").
WHEREAS, Seller and Buyer have entered into a letter of intent dated as
of July 18, 2003;
WHEREAS, Seller desires to divest itself of, and Buyer desires to
assume, the deposit liabilities of the Broadway Branch, located at ▇▇-▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ (the "Branch Office") of Seller, including
personal checking and savings accounts, passbook savings accounts, business
checking accounts, club savings accounts, NOW accounts, money market accounts,
time deposits and ▇▇▇ accounts (the "Accounts"), listed on Schedule A (which
list is subject to change between the date hereof and the Closing Date
consistent with the other terms and conditions of this Agreement);
WHEREAS, Seller desires to sell, and Buyer desires to purchase, certain
loans (the "Loans") (including collateral relating thereto and including
overdraft lines of credit and letters of credit) listed on Schedule B and
Schedule C (which lists are subject to change between the date hereof and the
Closing Date consistent with the other terms and conditions of this Agreement);
and
WHEREAS, subject to the receipt of regulatory approvals or exemptions
therefrom, Buyer proposes to assume the Accounts and purchase the Loans, all in
accordance with the terms and conditions hereinafter set forth.
NOW, THEREFORE, for and in consideration of the mutual promises and
covenants contained herein, the parties hereby agree as follows:
1. CLOSING.
(a) DATE. Subject to the satisfaction or waiver of the conditions set
forth in Sections 6, 7 and 8 of this Agreement, the purchase of assets and
assumption of liabilities provided for in this Agreement shall occur at a
closing (the "Closing") to be held at the offices of Seller on the first
Friday after thirty (30) calendar days following the date of all approvals by
regulatory agencies and after all statutory waiting periods have expired, , or
at such other place, time or date on which the parties mutually agree (the
"Closing Date"). The effective time (the "Effective Time") shall be as of the
close of business on the Closing Date.
(b) DOCUMENTS, INSTRUMENTS, CERTIFICATES, ETC. TO BE DELIVERED BY THE
PARTIES AT THE CLOSING. At the Closing, the parties shall deliver the documents
required by Sections 6 and 7 hereof. In order to assign each Loan to Buyer, on
or prior to Closing Seller will endorse the promissory note associated with each
transferred Loan. On or prior to Closing, Seller will also prepare and execute
assignments of trust deeds and amendments of Uniform Commercial Code filings.
Buyer will be responsible for the filing of any such assignments and amendments
following the Closing. After delivery of all documents pursuant to the
foregoing, the Estimated
Payment Amount (defined in subsection 3(b) below) shall be made by wire transfer
on or before 4:00 p.m., pursuant to subsection 3(b) hereof. The calculation of
balances of the Accounts, the Loans and the Payment Amount (defined in
subsection 3(a) below) shall be as of the Effective Time.
2. TRANSFER OF ASSETS AND LIABILITIES.
(a) ASSUMPTION OF ACCOUNTS.
Buyer shall assume, as of and at the Effective Time and subject to the
terms and conditions set forth herein, liability for payment and performance of
all of Seller's duties, responsibilities, obligations and liabilities for the
Accounts (including accrued but unpaid or uncredited interest thereon). Seller
shall assign and transfer to Buyer all of its right, title and interest in the
records and relationships pertaining to the Accounts. Other than those
liabilities specifically assumed under this Section 2(a), Buyer is not assuming
any other liabilities or obligations of Seller, whether known or unknown,
disclosed or undisclosed, contingent or otherwise, which have arisen or may
arise or be established in connection with the conduct of business of Seller
prior to the Closing Date or thereafter (the "Excluded Liabilities"). Excluded
Liabilities includes, but is not limited to the following:
(i) Seller's cashier checks, accounts which are
on overdraft status (other than those with overdraft lines of credit), money
orders, traveler's checks and any cash items paid by Seller and not cleared
prior to the Effective Time; and
(ii) Liabilities or obligations with respect to
any litigation, suits, claims, demands or governmental proceedings related to
any fact, circumstance or event occurring prior to Closing and relating to the
Accounts or Loans;
(iii) All liabilities and obligations of Seller
arising out of Seller's employment, or Seller's termination of employment, of
employees of the Branch Office including without limitation Seller's compliance
with all applicable laws relating to employment, payment of all compensation,
payroll taxes, and benefits, obligations for providing COBRA health plan
continuation coverage to former employees and their dependents, and giving any
required notices under the Worker Adjustment and Retraining Notification Act of
1988, as amended, including similar state or local laws with respect to mass
layoffs or similar events.
(b) PURCHASE OF LOANS.
(i) Seller shall sell, assign, transfer, convey
and deliver to Buyer, and Buyer shall purchase and accept from Seller, as of and
at the Effective Time and subject to the terms and conditions set forth herein,
all of Seller's right, title and interest in the following loans, including any
collateral, deeds of trust and security agreements related thereto:
a. Those loans that are listed on
Schedule B as of the date of this Agreement and that do not become
Schedule C Loans or Excluded Loans between the date of this Agreement
and the Closing Date;
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b. Those loans that Seller makes on or
after the date of this Agreement and that Buyer agrees to list on
Schedule B (collectively with the loans described in subsection (a),
the "Schedule B Loans");
c. The Schedule C Loans, as defined in
subsection (ii) below; and
d. Those letters of credit of Seller
listed on Schedule B hereto (the "Letters of Credit").
(ii) For a period of five (5) days commencing on
a date that is within one (1) week of the date of this Agreement, Buyer shall
have the opportunity to perform due diligence on the loans and the Letters of
Credit listed on Schedule B as of the date of this Agreement, to identify those
loans and Letters of Credit that Buyer determines in good faith do not meet
Buyer's credit or other standards ("Other Loans"), and to delete such Other
Loans or Letters of Credit from Schedule B. Other Loans also include (a) loans
30 calendar days or more past due; (b) loans that Seller has classified as
"substandard," "doubtful," or "loss," listed as "special mention," or otherwise
not graded as "pass"; (c) nonaccruals (which term shall include loans in which
the collateral securing the same has been repossessed or in which collection
efforts have been instituted or claim and delivery or foreclosure proceedings
have been filed); (d) loans upon which insurance has been force-placed; (e)
loans in connection with which the borrower has filed, or has been forced to
file, a petition or relief under the United States Bankruptcy Code prior to the
Effective Time; (f) loans which are overdrafts (other than overdraft lines of
credit) and that have been on overdraft status for 30 days or more; and (g) all
loans that Seller makes or renews on or after the date of this Agreement and
that Buyer does not agree to list on Schedule B. Buyer and Seller agree to
negotiate in good faith reasonable terms for Buyer to acquire the Other Loans at
the Closing. If prior to Closing, Buyer and Seller agree upon reasonable terms
for Buyer to acquire any of the Other Loans, Buyer shall list such Other Loans
on Schedule C (the "Schedule C Loans") along with the negotiated price
therefore, and Buyer and Seller shall duly execute Schedule C. Any Other Loans
not listed in Schedule C shall constitute "Excluded Loans" and Buyer shall not
have any responsibility whatsoever with respect thereto.
(iii) Buyer shall become the beneficiary of credit
life insurance written on direct consumer installment loans and coverage will
continue to be the obligation of the current insurer after the Effective Time
and for the duration of such insurance as provided under the terms of the policy
or certificate. If Buyer becomes the beneficiary of credit life insurance
written on direct consumer installment loans, Seller and Buyer shall cooperate
in good faith to develop a mutually satisfactory method by which the current
insurer will make rebate payments to and satisfy claims of the holders of such
certificates of insurance after the Effective Time. The parties' obligations in
this section are subject to restrictions contained in existing insurance
contracts as well as applicable laws and regulations.
(iv) As of the Effective Time, Seller shall
transfer and assign all files, documents and records related to the Loans (and
collateral related thereto) to Buyer.
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(v) Buyer shall after the Effective Time make
trade receipt loans and/or acceptances under the Letters of Credit in accordance
with the terms of such Letters of Credit which are listed on Schedule B on the
Effective Time.
(c) BOOKS AND RECORDS. From and after the Closing, Buyer will have
the right to possession of any and all files, books of account and records
directly relating to the Loans and the Accounts which are ordinarily maintained
at the Branch Office. All books and records relating to the Loans or Accounts
will be maintained for a period at least equal to the longer of the period
required by law or the normal retention period under Seller's or Buyer's (as the
case may be) records management program, unless the parties agree to a shorter
period.
(d) ▇▇▇ ACCOUNTS.
(i) Included in the Accounts are ▇▇▇ accounts
(which the parties acknowledge includes SEP ▇▇▇ accounts, SIMPLE ▇▇▇ accounts
and any other type of retirement account reflected on the general ledgers of the
Branch Office) pursuant to which Seller is currently acting as trustee or
custodian.
(ii) On or before the Closing Date, Seller shall
resign as of the close of business on the Closing Date as the trustee or
custodian, as applicable, of each ▇▇▇ account and to the extent permitted by the
documentation governing each such ▇▇▇ account and applicable law, appoint Buyer
as successor trustee or custodian, as applicable. Buyer hereby accepts each such
trusteeship or custodianship under the terms and conditions of Buyer's plan
documents for its ▇▇▇ accounts and assumes all fiduciary and custodial
obligations with respect thereto as of the close of business on the Closing
Date. Within such period prior to the Closing Date as is required by applicable
law or regulation, Seller will, at its sole cost and expense, notify the
depositors who maintain such ▇▇▇ accounts of Seller's intent to resign as
custodian as of Closing and to appoint Buyer as successor custodian and the
discharge and release of Seller from all liabilities as custodian from and after
the effective time of its resignation. Such notification shall include such
information as is required by the documentation governing each such ▇▇▇ account
and be accompanied by all such documents necessary to effect such replacement
and release and to Buyer's master agreement. If, pursuant to the terms of the
documentation governing any such ▇▇▇ account or applicable law, Seller is not
permitted to appoint Buyer as successor trustee or custodian, or the grantor
objects in writing to such designation, or is entitled to, and does, in fact,
name a successor trustee or custodian other than Buyer, all deposit liabilities
of Seller held under such ▇▇▇ accounts shall be excluded from the Accounts and
deemed an Excluded Liability.
(e) EMPLOYEES.
(i) Employment by Buyer. Buyer shall have the
right to make offers of employment to any employees of Seller, such employment
to be effective no earlier than the Closing Date, and shall make offers to at
least one-half of Seller's employees as of the date of this Agreement.
Notwithstanding anything in this Agreement to the contrary, Buyer shall have
complete discretion in determining which employees to hire and will hire such
employees at will subject to Buyer's current employment policies and practices,
provided however, that Buyer agrees not to terminate any of Seller's employees
that accept Buyer's offer of employment for a
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period of one year after the Closing Date, unless terminated for cause, as
reasonably determined by Buyer.
(ii) Obligations of Seller. Seller shall,
effective as of the Closing Date, terminate the employment of all employees who
have been offered and have accepted employment with Buyer. Seller shall perform
and discharge all liabilities and obligations in connection with such employees
through the Closing Date, including giving any required notices, paying all
compensation or other amount owed to such employee through the Closing Date,
including wages, bonuses, commissions, severance benefits, vacation pay, paid
time off, sick leave, holiday pay, or other accrued and vested paid time off as
of the Closing Date, employee benefit plan contributions, payroll taxes and any
other form of compensation or benefits of any type or nature on account of such
employees' employment through the Closing Date and their termination by Seller.
Seller shall remain responsible and shall perform and discharge all liabilities
and obligations of any type or nature in connection with all other employees of
Seller that are not employed by Buyer and Buyer shall have no liability or
obligations with respect thereto.
3. PRICE AND PAYMENT.
(a) PAYMENT AMOUNT.
(i) The price to be paid by Seller in
consideration of the assumption of the Accounts by Buyer in accordance with this
Agreement (the "Account Payment Amount") shall be an amount equal to one hundred
percent (100%) of the net book value of the Accounts assumed by Buyer at the
Effective Time, which book value shall include the total principal balance of
the Accounts at the Effective Time plus accrued but uncredited or unpaid
interest thereon, minus accrued but uncredited debits thereon, minus a premium
("Premium") paid by Buyer calculated pursuant to the formula set forth in
Appendix I hereto.
(ii) The price to be paid by the Buyer in
consideration of the transfer of the Loans to the Buyer in accordance with this
Agreement (the "Loan Payment Amount") shall be the sum of the following, without
duplication: (a) an amount equal to one hundred percent (100%) of the net book
value of the Schedule B Loans (excluding Letters of Credit), as recorded on the
books and records of the Seller, which books and records shall reflect any
write-downs or write-offs, and as adjusted by all earned interest as of the
Effective Time and otherwise as required by generally accepted accounting
principles consistently applied ("GAAP"), plus (b) the negotiated price for the
Schedule C Loans as shown in Schedule C.
(iii) The net amount to be paid by Seller
("Payment Amount") shall be the net of the Account Payment Amount and the Loan
Payment Amount.
(b) PAYMENT PROCEDURE. The Payment Amount shall be paid by Seller
as follows:
(i) Attached hereto as Schedule 3(b) is a trial
settlement statement prepared for the transaction as if the Closing Date had
occurred on June 30, 2003. At the Closing, the same calculations shall be made
subject to adjustments in amounts reflecting transactions made between June 30,
2003 and the Closing Date and for any other adjustments
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made in the ordinary course of business or in accordance with this Agreement.
Not less than two (2) business days prior to the Closing Date, Seller shall
deliver to Buyer its good faith estimate of the Payment Amount (the "Estimated
Payment Amount").
(ii) At the Closing, Seller shall pay to Buyer by
wire transfer to an account designated in writing by Buyer of immediately
available funds an amount equal to the Estimated Payment Amount.
(iii) As soon as practicable after the Closing but
in no event later than thirty (30) business days after the Closing Date, Buyer
and Seller shall, in good faith, make a final determination of the Payment
Amount after the receipt by Seller of Buyer's statement setting forth the amount
of the Payment Amount as determined in accordance with the provisions of this
Agreement, including work papers, schedules and other supporting data as may be
reasonably requested by Seller to enable it to verify such determination. If the
Estimated Payment Amount paid at the Closing exceeds the Payment Amount, Buyer
shall refund the excess to Seller, and, if the Payment Amount exceeds the
Estimated Payment Amount paid at the Closing, Seller shall pay to Buyer the
excess.
(iv) Notwithstanding the provisions of subsection
3(b)(iii) hereof, and subject to the following sentence, Buyer shall reimburse
Seller or Seller shall reimburse Buyer, as the case may be, for any amount by
which the balance of any Account used in determining the Payment Amount did not
accurately reflect the balance of such Account as of the close of Seller's books
on the day before the Closing Date as a result of any error or inaccuracy in the
books and records of Seller as of the close of business on such date (other than
as a result of items in transit, which are to be handled as set forth in Section
10 hereof). Such reimbursement shall be made to the party entitled thereto
promptly following the discovery of such error or inaccuracy; provided, however,
that no reimbursement for any discrepancy shall be made after (i) the date that
is ninety (90) days after the Closing Date or (ii) in the case of Accounts with
maturities or withdrawal notice periods of fifteen (15) days or more, the date
that is (A) one year after the Closing Date or (B) thirty (30) days after the
maturity of such Accounts, whichever is earlier, provided, further, that the
foregoing time limitations shall not apply if Buyer is entitled to
indemnification from Seller because of the error or inaccuracy, in which case
subsection 12(b) shall apply.
4. REPRESENTATIONS AND WARRANTIES OF SELLER.
Seller hereby represents and warrants to Buyer as follows:
(a) ORGANIZATION; GOOD STANDING; CORPORATE AUTHORITY. Seller is a
banking corporation headquartered in Seoul, Republic of Korea duly licensed,
validly existing and in good standing under the laws of the Republic of Korea
and has the requisite corporate power and authority to execute, deliver and
perform this Agreement The Branch Office is a New York State licensed branch
duly licensed, validly existing and in good standing under the laws of the State
of New York.
(b) FDIC INSURANCE. The Branch Office is an insured depository
institution within the meaning of the Federal Deposit Insurance Act, as amended
(the "FDI Act"), and, to the
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knowledge of Seller, other than in connection with Seller's proposed voluntary
termination of the FDIC insurance upon consummation of the transactions
contemplated hereby, there is no action pending or threatened to terminate its
status as an insured depository institution. The Accounts are insured by the
FDIC to the fullest extent permitted by the FDI Act and the rules and
regulations of the FDIC thereunder.
(c) DUE AUTHORIZATION. The execution, delivery and performance of
this Agreement by Seller and the consummation of the transaction contemplated
hereby by Seller have been duly and validly authorized and approved by Seller in
accordance with its charter, bylaws or similar organizational documents and
internal policies and procedures and all requisite corporate actions have been
taken so that this Agreement is a valid and binding obligation of Seller,
enforceable against Seller in accordance with its terms, except (i) as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
affecting the enforcement of creditors' rights in general, and (ii) as such
enforceability may be limited by general principles of equity (whether
considered in a suit at law or in equity). The execution, delivery and
performance of this Agreement does not and will not conflict with any law,
regulation or order applicable to Seller and will not result in a breach of
Seller's charter, bylaws or similar organizational document or any license or of
any agreement or instrument to which Seller is a party or by which Seller or the
Accounts are bound.
(d) NO VIOLATION. The execution and delivery of this Agreement and
the consummation of the transactions contemplated hereby by Seller do not
conflict with or result in any breach, violation of or default under (with or
without notice or lapse of time, or both) or give rise to a right of
termination, cancellation, modification or acceleration of any obligation or
loss of any benefit under (a) any provision of the charter, bylaws or similar
organizational documents of Seller, (b) any material contract to which Seller is
a party or bound or by which any of its properties is bound, or (c) any
judgment, order, decree, statute, law, ordinance, rule, regulation, writ or
injunction applicable to Seller.
(e) CONSENTS. No consent, waiver, approval, order or authorization
of, or registration, declaration or filing with any Federal, state or local
government or any foreign, national, provincial or local government, or any
governmental, regulatory, legislative, executive or administrative authority,
agency or commission, or any court, tribunal, or judicial body or any other
person, including a party to any material contract with Seller, is required by
or with respect to Seller in connection with the execution and delivery of this
Agreement or the consummation of the transactions contemplated hereby other than
any filings with or approval or waiver of approval by the Office of the
Controller of the Currency, the Federal Deposit Insurance Corporation, the Board
of Governors of the Federal Reserve System, the banking department of the State
of New York, the Korean Ministry of Finance and Economy and the Korean Financial
Supervisory Service.
(f) PERMITS. Seller has all licenses, franchises, permits,
certificates, approvals or other similar authorizations affecting, or relating
in any way to, the assets or business of Seller required in connection with the
operation of the Branch Office, and all such licenses, franchises, permits,
certificates, approvals or other similar authorizations are valid and in full
force and effect, except where failure to do so would not have a material
adverse effect on the Branch Office.
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(g) ACCOUNTS, LOANS AND LISTS.
(i) Seller has delivered to Buyer a true and
complete list of each Account as of the date of this Agreement (it being
acknowledged by Buyer that such list is subject to change between the date
hereof and the Closing Date), listing the balance of each Account as of the most
recent practicable date, the interest rate, the accrued interest thereon, and
the type of Account (the "Account List," attached as Schedule A hereto). Seller
also has delivered to Buyer a true and complete copy of the account forms for
all Accounts.
(ii) Seller has delivered to Buyer a true and
complete list of each Loan as of the date of this Agreement (it being
acknowledged by Buyer and Seller that such list is subject to change between the
date hereof and the Closing Date), listing the principal balance of each Loan as
of the most recent practicable date, the interest rate, the earned interest
thereon, the Account or other collateral which secures each Loan, and the type
of Loan (the "Loan List," attached as Schedule B hereto and as of Closing,
Schedules B and C). Seller also represents that Seller has timely booked any
write-downs and write-offs as required by GAAP and any applicable rules or
regulations.
(h) NO BROKER. No agent, broker, investment banker, person or firm
retained or allegedly retained by Seller is or will be entitled to any broker's
or finder's fee or any other commission or similar fee, directly or indirectly,
in connection with any of the transactions contemplated herein.
(i) VALIDITY OF LOANS.
(i) Seller has provided to Buyer true, complete
and accurate information concerning the Loans, and no material information with
respect to the Loans has been withheld from Buyer.
(ii) (A) Each Loan and related security
instruments are a legal, valid and binding obligation of the obligor named
therein, are in full force and effect and are enforceable against the obligor
named therein in accordance with their terms (except as may be limited by
bankruptcy, insolvency, moratorium, reorganization or similar laws affecting the
rights of creditors generally or equitable principles limiting the right to
obtain specific performance or other similar relief); (B) Seller has good title
to and is the sole owner of record of each Loan as of the date of this Agreement
and of the indebtedness represented by the notes evidencing such Loans, and each
is free of any lien, encumbrance or claim by any other person; (C) Seller has
duly performed in all material respects all of its obligations thereunder to the
extent that such obligations to perform have accrued; (D) all documents and
agreements necessary for Seller to enforce such Loan and security instruments
are in existence and in Seller's possession; (E) no claims, counterclaims,
set-off rights or other rights exist, nor do the grounds for any such claim,
counterclaim, set-off rights or other rights exist, with respect to any Loan
which could impair the collectibility thereof; (F) each Loan has been, in all
material respects, originated and serviced in accordance with Seller's then
applicable underwriting guidelines, the terms of the relevant credit documents
and agreements; (G) all Loans are in compliance with all applicable laws, orders
and regulations and have been documented in such a manner so as to render the
rights and remedies of the secured parties named in the security
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instruments related thereto adequate for the realization against the collateral,
if any, securing the obligations of such Loan (except as may be limited by
bankruptcy, insolvency, moratorium, reorganization or similar laws affecting the
rights of creditors generally or equitable principles limiting the right to
obtain specific performance or other similar relief); and (H) to the knowledge
of Seller, no approval or consent of the borrower is required with respect to
the transfer to Buyer of any Loan.
(j) ACCOUNTS. Seller has properly accrued interest on the Accounts
and its records respecting the Accounts accurately reflect such accruals of
interest except where failure to do so would not have a material adverse effect
on the Branch Office. Seller has delivered to Buyer a true and correct copy of
the current account forms for each of the types of Accounts offered by Seller
out of the Branch Office.
(k) LITIGATION. There are no actions, suits or proceedings pending
or, to the knowledge of Seller, threatened against or affecting the Accounts or
Loans. Seller has not received notice from any governmental agency,
instrumentality or department of the United States, the State of New York or any
other state 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.
(l) COMPLIANCE WITH APPLICABLE LAW. The origination and
administration of the Accounts and the Loans have been and are being conducted
in compliance with all applicable laws, rules, regulations and authorities,
except where failure to do so would not have and would not be reasonably
expected to have in the aggregate a material adverse affect on the Accounts or
the Loans.
(m) EMPLOYEES. None of Seller's employees at the Branch Office are
party to any written employment or deferred compensation agreement with Seller
or any affiliate. Seller has no union contracts or collective bargaining
agreements with, or any other obligations to, employee organizations or groups.
(n) BRANCHES. Seller has no other branches or loan production
offices within a twenty mile radius of the Branch Office except a wholesale
branch located on the 14th floor at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ (the
"Park Avenue Wholesale Branch") nor does Seller currently contemplate opening a
branch or loan production office within a twenty mile radius of the Branch
Office.
(o) REPRESENTATIONS COMPLETE. No representation or warranty by
Seller in this Agreement or any certificate delivered pursuant hereto contains
any untrue statement of a material fact or omits to state any material fact
necessary to make such representation or warranty not misleading.
5. REPRESENTATIONS AND WARRANTIES OF BUYER.
Buyer hereby represents and warrants to Seller as follows:
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(a) ORGANIZATION; GOOD STANDING; CORPORATE AUTHORITY. Buyer is a
national bank, duly organized, validly existing and in good standing under the
laws of the United States and has the requisite corporate power and authority to
execute, deliver and perform this Agreement.
(b) FDIC INSURANCE, ETC. Buyer is an insured depository
institution within the meaning of the FDI Act. There is no action, suit,
proceeding, inquiry or investigation, at law or equity, or before or by any
court, regulatory agency, public board or body pending or, to the best of
Buyer's knowledge, threatened, which would either prevent or materially delay
the consummation of the transactions contemplated hereby.
(c) DUE AUTHORIZATION. The execution, delivery and performance of
this Agreement by Buyer and the consummation of the transactions contemplated
hereby by Buyer have been duly and validly authorized and approved and all
requisite corporate actions have been taken so that this Agreement is a valid
and binding obligation of Buyer, enforceable against Buyer in accordance with
its terms, except (i) as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect affecting the enforcement of creditors' rights in general,
(ii) as such enforceability may be limited by general principles of equity
(whether considered in a suit at law or in equity), and (iii) as to the approval
of the Board of Directors of Buyer, which is a condition to closing in Section
6(e). The execution, delivery and performance of this Agreement does not and
will not conflict with any law, regulation or order applicable to Buyer and will
not result in a breach of Buyer's charter, bylaws or of any agreement or
instrument to which Buyer is a party or by which Buyer is bound.
(d) NO BROKER. No agent, broker, investment banker, person or firm
retained or allegedly retained by Buyer is or will be entitled to any broker's
or finder's fee or any other commission or similar fee, directly or indirectly,
in connection with any of the transactions contemplated herein.
(e) LEGAL PROCEEDINGS. There are no actions, suits or proceedings
pending or, to the knowledge of Buyer, threatened against or affecting Buyer
which would have or be reasonably expected to have a material adverse effect on
Buyer's ability to consummate the transactions contemplated by this Agreement.
Buyer has not received notice from any governmental agency, instrumentality or
department of the United States or any state 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.
(f) REPRESENTATIONS COMPLETE. No representation or warranty made
or given by Buyer in this Agreement or any certificate delivered pursuant hereto
contains any untrue statement of a material fact or omits to state any material
fact necessary to make such representation or warranty not misleading.
6. CONDITIONS TO OBLIGATIONS OF BUYER.
The obligations of Buyer hereunder are subject to the satisfaction or
waiver, on or before the Closing, of the following conditions:
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(a) PERFORMANCE. Each of the acts and undertakings of Seller to be
performed at or before the Closing pursuant to this Agreement shall have been
duly performed in all material respects.
(b) REPRESENTATIONS. All of the representations and warranties
made by Seller herein shall be true and correct in all material respects as of
the Closing Date with the same force and effect as though such representations
and warranties had been made as of such date.
(c) ABSENCE OF PROCEEDINGS AND LITIGATION. No order shall have
been entered and remain in force at the Closing Date restraining or prohibiting
the transactions contemplated by this Agreement in any legal, administrative or
other proceeding and no action or proceeding shall have been instituted or
threatened on or before the Closing Date pertaining to the transactions
contemplated by this Agreement which, in the reasonable judgment of Buyer, could
be materially adverse to Buyer or Buyer's assumption of the Accounts.
(d) DOCUMENTS. Buyer shall have received at the Closing on the
Closing Date the following documents from Seller:
(i) Written approval by Seller's head office
certified by an officer of Seller, authorizing the signing and delivery of this
Agreement and the other agreements and instruments referred to herein and the
consummation of the transactions contemplated hereby and thereby;
(ii) A certificate signed by a duly authorized
officer of Seller stating that the conditions set forth in subsections 6(a) and
6(b) have been fulfilled;
(iii) An Assignment and Assumption Agreement
substantially in the form of Exhibit A hereto.
(iv) A ▇▇▇▇ of Sale substantially in the form of
Exhibit B hereto.
(v) Such other documents and instruments as
Buyer or its counsel may reasonably request to consummate the transaction
contemplated herein.
(e) BOARD APPROVAL. Buyer's Board of Directors shall have approved
this Agreement.
7. CONDITIONS TO OBLIGATIONS OF SELLER.
The obligations of Seller hereunder are subject to the satisfaction or
waiver, on or before the Closing, of the following conditions:
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(a) PERFORMANCE. Each of the acts and undertakings of Buyer to be
performed at or before the Closing pursuant to this Agreement shall have been
duly performed in all material respects.
(b) REPRESENTATIONS. All of the representations and warranties
made by Buyer herein shall be true and correct in all material respects as of
the Closing Date with the same force and effect as though such representations
and warranties had been made as of such date.
(c) ABSENCE OF PROCEEDINGS AND LITIGATION. No order shall have
been entered and remain in force at the Closing Date restraining or prohibiting
the transactions contemplated by this Agreement in any legal, administrative or
other proceeding and no action or proceeding shall have been instituted or
threatened on or before the Closing Date pertaining to the transactions
contemplated by this Agreement which, in the reasonable judgment of Seller,
could be materially adverse to Seller.
(d) DOCUMENTS. Seller shall have received at the Closing Date the
following documents from Buyer:
(i) Resolutions of Buyer's Board of Directors
certified by Buyer's Secretary or an Assistant Secretary, authorizing the
signing and delivery of this Agreement and the other agreements and instruments
referred to herein and the consummation of the transactions contemplated hereby
and thereby;
(ii) A certificate signed by a duly authorized
officer of Buyer stating that the conditions set forth in subsections 7(a) and
7(b) have been fulfilled;
(iii) The Assignment and Assumption Agreement; and
(iv) Such other documents and instruments as
Seller or its counsel may reasonably request to consummate the transaction
contemplated herein.
8. CONDITIONS TO OBLIGATIONS OF BOTH PARTIES.
The obligations of both parties to this Agreement are subject to the
condition that all filings and registrations with, and notifications to all
federal and state authorities (including any notifications to Korean
authorities) required for consummation of the transactions contemplated by this
Agreement, shall have been made, all regulatory approvals shall have been
received and shall be in full force and effect, and all applicable waiting
periods shall have passed.
9. COVENANTS AND AGREEMENTS OF THE PARTIES.
(a) COOPERATION. Seller and Buyer each agree to cooperate with the
other and to use their commercially reasonable efforts to consummate the
transactions contemplated by this Agreement.
(b) CONDUCT OF BUSINESS PRIOR TO CLOSING. Except as provided
herein and as may be otherwise required by any regulatory authority, between the
date of this Agreement and the Closing Date, Seller will conduct its deposit
business in the ordinary course and substantially in
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the same manner as heretofore conducted. Buyer and Seller will work together to
define and implement the operational procedures necessary to transfer the
Accounts and Loans to Buyer. Within two (2) days after the execution of this
Agreement, Buyer and Seller will each designate an individual to serve as
liaison concerning operational matters. Seller will use its commercially
reasonable efforts in good faith to provide Buyer, on a monthly basis, Seller's
internal loan classifications for the Loans. From and after the date hereof
through the Closing Date, except as may be required by a regulatory authority,
Seller will not, without the prior written consent of Buyer:
(i) Cause or permit the Branch Office to engage
or participate in any material transaction or incur or sustain any material
obligation except in the ordinary course of business consistent with past
practice;
(ii) Cause or encourage any customer of the
Branch Office to transfer such customers Accounts or Loans to any office of
Seller or withdraw from such Accounts or pay down such Loans (except upon the
unsolicited request of a customer in the ordinary course of business);
(iii) Effect any changes to the terms of any
Account, including in the interest rate applicable thereto, except for changes
in the ordinary course of business;
(iv) Cause or permit the Branch Office to
transfer to Seller's other operations any Loans or Accounts (except pursuant to
an unsolicited customer request in the ordinary course of business);
(v) Take any action that would cause the
termination of or reduction in coverage of any insurance policy currently in
effect on or relating to the Loans or Accounts; and
(vi) Increase the number of personnel at the
Branch Office.
(c) ACCESS TO RECORDS AND INFORMATION. Between the date of this
Agreement and the Closing Date, Seller will afford Buyer and its authorized
agents and representatives reasonable access during normal business hours, upon
reasonable notice to Seller, to records and other information within Seller's
possession relating to the Accounts and the Loans. Seller shall provide to Buyer
assistance in Buyer's investigation of matters relating to the Accounts and the
Loans; provided, however, Buyer's investigations shall be conducted in a manner
which does not unreasonably interfere with Seller's normal operations, customers
and employee relations. Seller shall provide to Buyer information requested by
Buyer sufficient to prepare and deliver necessary change of terms notices in
sufficient time to allow for changes to the terms of the Accounts effective upon
transfer to Buyer. Seller shall provide full access to the books and records
necessary for servicing of the Accounts and the Loans commencing immediately
after close of business on the business day immediately preceding the Closing
Date for transfer to Buyer's premises. Buyer and Seller will provide each other
promptly with information as to any significant developments in the performance
of this Agreement and will promptly notify the other if either discovers that
any of its representations or warranties contained in this Agreement was not
true and correct in all material respects or becomes untrue or incorrect in any
material respect.
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(d) REGULATORY APPLICATIONS AND APPROVALS. Buyer and Seller shall
file initial regulatory applications and notices required to consummate the
transactions contemplated hereby as soon as reasonably practicable, but no later
than five (5) business days from the date hereof. Buyer and Seller agree to use
their commercially reasonable efforts to obtain and, where necessary, to assist
the other party in obtaining as promptly as practicable such regulatory approval
and other approvals or consents, if any, as may be necessary to consummate the
transactions contemplated hereby. The parties shall promptly notify the other
upon receipt of any regulatory approval or consent. Immediately following the
Closing Date, Seller shall request that the FDIC terminate its FDIC insurance of
the Branch Office.
(e) COMPUTER SERVICES: TRIAL BALANCES. Buyer and Seller shall
cooperate with each other and any applicable service bureau and shall use their
commercially reasonable efforts to cause the transfer on the Closing Date of all
information and records relating to the Accounts and the Loans from Seller's
computer system to Buyer's computer system. Seller agrees to deliver to Buyer
within one week of executing this Agreement a preliminary draft of certain data
processing information (the "DP Information") then in existence on Seller's data
processing system that relates to the Accounts and Loans. Additionally, Seller
agrees to deliver to Buyer within 30 days prior to and at the Closing Date all
DP Information on Seller's data processing system that relates to the Accounts
and Loans.
(f) DELINQUENT LOAN REPORT. At Closing, Seller will deliver to
Buyer a report listing each transferred Loan that, as of such date, is 60 days
delinquent and each transferred Loan that, as of such date, is 30 days
delinquent.
(g) FURTHER ASSURANCES. On and after the Closing Date, upon
Buyer's request, Seller shall execute, acknowledge and deliver such assurances
as may be reasonably necessary and appropriate to transfer all of the Accounts
in full to Buyer and to vest in Buyer full, legal and equitable title to all of
the Loans, including without limitation providing Buyer with access to any
documents, records and other information in Seller's possession that are not
already provided to Buyer and reasonably related to the Accounts or Loans. From
the date hereof through Closing, Seller will provide Buyer all reasonable
assistance requested by Buyer in order to effect as of Closing the orderly
transfer of the Accounts and Loans, including providing information reasonably
requested by Buyer to enable Buyer to provide the notifications and documents
necessary hereunder or to effect the transfer, and except as otherwise provided
in this Agreement, for a period of three (3) months after the Closing Date,
Seller will provide such similar reasonable assistance to Buyer to effect the
orderly transfer of the Accounts and Loans.
(h) CONSENTS. Except as otherwise provided by this Agreement,
Seller will use its commercially reasonable efforts to obtain and deliver to
Buyer prior to Closing all consents reasonably necessary, if any, to authorize
the transfer and assignment to Buyer of, or the substitution of Buyer for Seller
under, all Account agreements, Loans and related documents.
(i) TAX INFORMATION AND WITHHOLDING. All tax information reporting
and filing requirements and all tax withholding requirements with respect to the
Accounts and Loans are the responsibility of Seller up to and through the
Closing Date and the responsibility of Buyer thereafter.
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(j) EXCLUSIVITY. Neither Seller, nor any of its directors,
executive officers, lawyers or accountants or other representatives will,
directly or indirectly, encourage or solicit proposals or discussions with, or
enter into negotiations with, or provide any information to, any person, entity
or group other than Buyer concerning any sale or assumption of the Loans or
Accounts or concerning any other possible transaction which would preclude or
materially adversely affect the ability of Seller or Buyer to consummate the
purchase and assumption of the Loans and Accounts contemplated by this
Agreement. Neither Seller, nor any of its directors, executive officers, lawyers
or accountants or other representatives have taken since July 18, 2003, any of
the actions described in this section.
10. ITEMS IN TRANSIT; TRANSITIONAL MATTERS.
(a) RETURNED ITEMS. Except as provided in this subsection, Buyer
shall obtain the benefit of and shall bear the risk of all checks, drafts,
withdrawal orders, and items of any kind which are deposited and credited to an
Account by Seller prior to Closing ("Deposit Items") relating to or originating
from the Accounts which are in transit as of the Effective Time. Any Deposit
Items that were credited for deposit to an Account prior to the Effective Time
and are returned unpaid ("Returned Item") on or after the Effective Time will be
handled in following manner.
(i) If there are sufficient funds in the Account
to which such Returned Item was credited, and Buyer has a right of charge-back
against such Account, Buyer will debit any or all of such Account an amount
equal in the aggregate to such Returned Item and shall repay that amount to
Seller, reduced however, by the amount of the Premium, if any, attributable to
such Returned Item; or
(ii) If there are not sufficient funds in the
Account, Buyer will use its commercially reasonable efforts to obtain
reimbursement from the party to whom the Returned Item was credited, but Buyer
will have no obligation to repay Seller an amount in excess of what is in the
Account unless and until Buyer obtains reimbursement from the party liable for
such Returned Item.
(iii) Any repayment obligation of the Buyer to the
Seller for Returned Items shall be conditional upon such Returned Items being
debited from the Seller's account with the Federal Reserve Bank after the
Closing Date. To the extent that the processing of any item or transaction
pursuant to this Section 10 requires the cooperation of the other party, that
party will provide such cooperation.
(b) ACH TRANSACTIONS. Seller agrees that for a period of three (3)
months following the Closing Date it will effectuate direct pay and automated
clearinghouse transactions in the same manner and with the same diligence as it
would have prior to the Closing Date. Seller agrees timely to provide Buyer with
the daily electronic detail necessary for Buyer to timely credit or debit the
customer's account and to allow Buyer to send notifications of changes. Seller
and Buyer agree to a timely net daily settlement of these transactions. At the
end of such four month period, Seller will discontinue accepting and forwarding
ACH entries and funds and will return them to the originators marked "Account
Closed." Buyer agrees to reimburse Seller for any reasonable out of pocket
expenses incurred by Seller in complying with this Section.
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(c) OTHER TRANSITIONAL MATTERS. For a period of three (3) months
beginning on the Closing Date, Seller shall timely provide Buyer with checks,
deposits and payments it receives on the Accounts and Loans, including
documentation for ACH transactions, to enable Buyer to timely pay checks drawn
on the Accounts and process deposits to the Accounts and process payments on the
Loans.
11. PRESS RELEASES; CONTACT WITH DEPOSITORS.
(a) PRESS RELEASE. Unless otherwise required by law, the parties
agree that, to the extent practicable, they will cooperate on any public
announcements, communications or other publicity concerning the transactions
contemplated by this Agreement.
(b) NOTIFICATION OF CUSTOMERS.
(i) Seller shall promptly but no later than one
(1) business day following receipt by the parties of all required regulatory
approvals, deliver to Buyer the names and addresses of the holders of the
Accounts and of the borrowers on the Loans that are to be purchased by Buyer.
Buyer may use the address list to send change of terms notices within sufficient
time to permit change of terms of the Accounts on the Closing Date. Buyer shall
give Seller a reasonable opportunity to review and comment upon Buyer's written
communications (other than portions of said communications which set forth the
specific changes proposed to the terms and rates of the Accounts) to the holders
of the Accounts and to the borrowers on the Loans prior to the Closing.
Commencing not earlier than two (2) weeks prior to the estimated Closing Date,
Buyer may commence telephone and further written communications with holders of
Accounts to be assumed under this Agreement and with borrowers on the Loans to
be purchased under this Agreement for the purpose of assisting such Account
holders in the transition of the Accounts to Buyer. Buyer shall give Seller a
reasonable opportunity to review and comment on such written communications and
Buyer's script, fact sheet or any other document used in connection with such
telephonic communications (other than portions of said communications which set
forth the specific changes proposed to the terms and rates of the Accounts).
(ii) At least two (2) weeks prior to the
estimated Closing Date, Seller will at its expense prepare and deliver a letter,
in form and substance reasonably satisfactory to Buyer, informing customers and
depositors of the Branch Office of the transfer of Accounts and Loans to Buyer.
With respect to any customer notice which is required by applicable law or
regulation to be mailed by Seller, Seller will, no later than the applicable
deadline mail a letter prepared by Seller in form and substance reasonably
satisfactory to Buyer to each customer.
(iii) Within such period as may be required by
applicable law and regulations but no later than five (5) business days
following the Closing Date, Buyer will mail to each account holder of a
checking, money market deposit or NOW account: (a) a letter prepared by Buyer,
in form and substance reasonably satisfactory to Seller, notifying such
depositor of the transfer of his or her account to Buyer, requesting that such
account holder cease writing checks or drafts against his or her Seller's
account immediately following receipt of such letter (or such other period as
may be required by applicable law or regulation) and (b) check
16
order forms, replacement checks bearing Buyer's transit and routing number and
any other documents to be signed by the account holder to establish a similar
account with Buyer.
(iv) Within five (5) business days after the
Closing Date, Buyer will mail a letter prepared by Buyer, in form and substance
reasonably satisfactory to Seller, to each customer whose Loan was transferred
to Buyer and requesting that such customer remit all payments on such Loan to
Buyer.
(v) At Buyer's option, Seller agrees to do the
mailings prior to Closing on Buyer's behalf provided that the costs of the
mailings will remain the liability of Buyer.
12. INDEMNIFICATION.
(a) INDEMNIFICATION BY SELLER. Seller shall indemnify and hold
harmless Buyer and its directors, officers, employees and affiliates from, and
shall reimburse Buyer and its directors, officers, employees and affiliates for,
any loss, fee, cost, expense, damage, liability or claim (including, without
limitation, any and all fees, costs and expenses whatsoever, reasonably incurred
by Buyer or such other persons in investigating, preparing for, defending
against, or providing evidence, producing documents or taking any other action
in respect of any threatened or asserted claim) (hereinafter referred to as
"Losses") arising out of, based upon, resulting from or relating to (i) the
inaccuracy of any representation or warranty of Seller contained in Section 4 of
this Agreement; (ii) Seller's breach of or failure to perform in any material
respect any of its covenants or agreements contained in this Agreement; (iii)
any obligation or liability of Seller arising out of the Accounts and Loans
before the Effective Time which is not expressly assumed by Buyer pursuant to
this Agreement, including, but not limited to, Seller's management or
administration of the Accounts and Loans prior to the Effective Time (including
without limitation any claims asserted after the Effective Time and attributable
to the period before the Effective Time); (iv) any liability for payroll,
withholding, property, excise, sales, use and transfer taxes imposed by the
United States or by any other taxing authority relating to the Accounts which
are due and payable by Seller for the period prior to the Effective Time; (v)
any Excluded Liabilities; or (vi) any Excluded Loans.
(b) INDEMNIFICATION BY BUYER. Buyer shall indemnify and hold
harmless Seller and its respective directors, officers, employees and affiliates
from, and shall reimburse Seller and its respective directors, officers,
employees and affiliates for, any loss, fee, cost, expense, damage, liability or
claim (including, without limitation, any and all fees, costs and expenses
whatsoever, reasonably incurred by Seller or such other persons in
investigating, preparing for, defending against, or providing evidence,
producing documents or taking any other action in respect of any threatened or
asserted claim) (hereinafter referred to as "Losses") arising out of, based upon
or resulting from (i) the inaccuracy of any representation or warranty of Buyer
which is contained in Section 5 of this Agreement; (ii) Buyer's breach of or
failure to perform in any material respect any of its covenants or agreements
contained in this Agreement, including, but not limited to, Buyer's assumption
of the Accounts; (iii) any obligation or liability of Buyer arising out of the
Accounts and Loans after the Effective Time, including, but not limited to,
Buyer's management or administration of the Accounts and Loans after the
Effective Time; or (iv) any liability for payroll, withholding, property,
excise, sales, use or transfer taxes imposed by the
17
United States or by any other taxing authority relating to the Accounts which
are due and payable by Buyer for the period after the Effective Time.
(c) PROCEDURE. In the event of the occurrence of any event which
any party asserts is an indemnifiable event pursuant to this Section 12, such
party shall notify the indemnifying party promptly and, if such event involves
the claim of any third party, the indemnifying party shall be entitled to assume
the defense of any claim as to which this Section 12 requires it to indemnify
the other party, provided that (i) the indemnified party may, if it so desires,
employ counsel at its own expense to assist in the handling of such claim, and
(ii) the indemnifying party shall obtain the prior written approval of the
indemnified party, which approval shall not be unreasonable withheld, before
entering into any settlement, adjustment or compromise of such claim or ceasing
to defend against such claim.
(d) SURVIVAL OF REPRESENTATIONS.
All of the representations and warranties in this Agreement shall
survive the Closing (even if the damaged party knew or had reason to know of any
misrepresentation or breach of warranty at the time of Closing) and shall
continue in full force and effect until the first anniversary of the Closing
Date, except that all representations and warranties relating only to the
Accounts in Section 4(b), 4(g)(i), and 4(j) shall survive the Closing and
continue in full force and effect until the end of the sixth full month after
the Closing Date. After the applicable survival period, all such representations
and warranties shall terminate and be of no further force and effect, other than
claims for indemnification with respect to which notice has been given to the
indemnifying party prior to the end of the applicable survival period.
(e) SURVIVAL OF INDEMNIFICATION OBLIGATIONS. After the first
anniversary of the Closing Date, all indemnification obligations hereunder shall
terminate and be of no further force and effect, other than (i) claims for
indemnification with respect to which notice has been given to the indemnifying
party prior to such anniversary (or prior to the time provided in Section 12(d),
as applicable) and (ii) claims for indemnification arising from or relating to
any claim or claims asserted by a third party (i.e., asserted against Buyer by a
party other than Seller, or asserted against Seller by a party other than Buyer)
which shall survive until expiration of the applicable statute of limitations.
13. TERMINATION.
(a) TERMINATION EVENTS. This Agreement shall terminate and be of
no further force or effect, upon the occurrence of any of the following:
(i) Any regulatory authority whose consent or
approval is necessary for consummation of the transactions contemplated hereby
shall have issued a final order denying or refusing to grant any such approval
or consent or shall have granted such approval but shall have imposed conditions
that are or would become applicable to either Seller or Buyer that either Seller
or Buyer reasonably and in good ▇▇▇▇▇ ▇▇▇▇▇ to be materially burdensome to it;
or
(ii) Mutual agreement of the parties evidenced in
writing; or
18
(iii) Immediately upon the expiration of thirty
(30) days from the date that either party hereto has given notice to the other
party hereto of such other party's material breach or misrepresentation of any
condition, warranty, representation or covenant herein; provided, however, that
no such termination shall take effect if within said thirty (30) day period the
party so notified shall have corrected in all material respects the grounds for
termination as specified in the aforementioned notice; or
(iv) Written notice by Buyer or Seller to the
other party if the Closing shall not have taken place on or before ninety (90)
days from the date of this Agreement, other than by reason of a matter within
the control of the person asserting such termination provided that if, as of
such date, all regulatory approvals necessary for the consummation of the
transactions contemplated hereunder have been received but the Closing cannot
take place because any applicable waiting period has not expired, the parties
agree that this Agreement shall be extended for such period as shall be required
for the expiration of such waiting period and, within a reasonable time
thereafter, the Closing; or
(v) Written notice by Buyer or Seller given to
the other party after entry of a final, restraining order or injunction
prohibiting the assumption of the Accounts.
(b) NO TERMINATION FOR OWN BREACH. Notwithstanding anything to the
contrary herein contained, neither party hereto shall have the right to
terminate this Agreement on account of its own breach or any non-material breach
by the other party hereto.
14. NOTICES.
Any notice or other communications required or permitted hereunder
shall be sufficiently given if sent by registered or certified mail, postage
prepaid, or sent by facsimile transmission or otherwise actually delivered,
addressed as follows:
To Seller: Oh ▇▇▇▇▇ ▇▇▇▇
Regional Director
Regional Headquarters for the Americas
Korea Exchange Bank
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Copy to: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
▇▇▇▇▇ ▇▇▇▇ LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
19
To Buyer: ▇▇▇▇▇▇ ▇▇▇
Senior Vice President
Nara Bank, NA
▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Copy to: ▇▇▇▇▇▇ ▇▇▇▇▇, Esq.
Director of Legal Affairs
Nara Bank, NA
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
or such other address as shall be furnished in writing by either party.
15. EXPENSES.
Except as otherwise provided in this Agreement, each party hereto shall
pay its own expenses.
16. CONFIDENTIALITY.
Except to the extent disclosure is required by law, Buyer will maintain
the confidentiality of all information obtained from Seller which is not
publicly available (the "Information"), and will use the Information only for
purposes reasonably related to this Agreement and the transactions contemplated
herein. Buyer shall guard and protect the Information with the highest degree of
care. In the event of termination of this Agreement, Buyer shall promptly
deliver to Seller the Information, and all copies thereof which are in the
possession or under the control of Buyer or its officers, directors, employees
or agents, or (in the case of copies) certified to Seller that all such copies
have been destroyed. That portion of Buyer's summaries, analysis, memoranda,
correspondence, notes and other writings containing Information shall be
modified to delete, destroy or render illegible material based in whole or in
part on such Information and the deletion, destruction and/or rendering of
portions of said material illegible shall be certified to Seller. The mutual
covenants contained in this Section shall survive termination of this Agreement.
17. ENTIRE AGREEMENT, MODIFICATIONS, WAIVERS, HEADINGS.
This Agreement constitutes the entire agreement between the parties
hereto pertaining to the subject matter hereof, supersedes all prior and
contemporaneous agreements and understandings of the parties in connection
therewith, and confers no rights or benefits upon any person not a party hereto.
No modification or termination of this Agreement shall be binding unless
executed in writing by the parties hereto. No waiver of any provision of this
Agreement shall be deemed or shall constitute a waiver of any other provision
hereof (whether or not
20
similar) nor shall such waiver constitute a continuing waiver. Section and
subsection headings are not to be considered part of this Agreement, are solely
for convenience of reference, are not intended to be full or accurate
descriptions of the contents of any section or subsection.
18. SUCCESSORS AND ASSIGNS.
All of the terms and provisions of this Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective transferees,
successors and assigns, but rights under this Agreement may not be assigned and
duties hereunder may not be delegated by either party without the written
consent of the other. Nothing herein, express or implied, is intended to or
shall confer upon any other person any right, benefit or remedy of any nature
whatsoever under or by reason of this Agreement.
19. COUNTERPARTS.
This Agreement may be executed in one or more counterparts, all of
which taken together shall constitute one instrument.
20. NO SOLICITATION OF CUSTOMERS.
(a) BY SELLER. Prior to the Closing, Seller will not knowingly
solicit any of its customers, either directly or indirectly, to reduce, transfer
or close any of the Accounts, or open deposit accounts or conduct any type of
business at other branches of the Seller that are not the subject of this
Agreement. For a period of twelve (12) months following the Closing Date, Seller
will not, directly or indirectly, knowingly solicit deposits or loans, whether
by the use of direct mail, telemarketing programs or other marketing methods,
specifically directed at former customers whose Accounts and Loans were
transferred to Buyer. For a period of twelve (12) months following the Closing
Date, Seller will not open a branch or loan production office located within the
State of New York and within a twenty (20) mile radius of the Branch Office.
Notwithstanding the previous sentence, nothing herein will prohibit Seller from
soliciting customers who are also customers of other operations of Seller or
other products offered by Seller and through general marketing campaigns not
directed at persons whose Accounts or Loans were transferred to Buyer. The
parties agree that the covenants in this Section 20 are reasonable in scope,
territory, and duration. If any court of competent jurisdiction shall at any
time deem any covenant herein too broad or lengthy, the duration or scope of
such covenant shall be deemed to be the longest and broadest permissible by law
under the circumstances.
(b) BY BUYER. From and after the date hereof and up to the Closing
Date, Buyer will not cause or encourage any customer of the Branch Office to
transfer such customer's Accounts or Loans to any office of Buyer.
21. GOVERNING LAW.
This Agreement shall be construed and enforced in accordance with the
laws of the State of New York without giving effect to the principles of the
conflicts of laws, except to the extent matters may be governed as a matter of
law by federal law. FURTHERMORE, THE PARTIES EACH WAIVE THEIR RESPECTIVE RIGHTS
TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF
OR RELATED TO THIS
21
AGREEMENT, IN ANY ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY
A PARTY AGAINST THE OTHER PARTY, WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT
CLAIMS, OR OTHERWISE. THE PARTIES AGREE THAT ANY SUCH ACTION OR CAUSE OF ACTION
SHALL BE TRIED BY A COURT TRIAL WITHOUT A JURY. THIS WAIVER SHALL APPLY TO ANY
SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT.
22. CONSENT TO JURISDICTION; WAIVER OF IMMUNITIES.
Each party hereby irrevocably submits to the nonexclusive jurisdiction
of any state or federal court sitting in the City of New York, borough of
Manhattan, U.S.A., in any action or proceeding brought to enforce or otherwise
arising out of or relating to this Agreement. Seller irrevocably appoints CT
Corporation System, with an office on the date hereof at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇ ▇▇▇▇▇, U.S.A., as its agent for service of process to receive on behalf
of Seller and its property service of copies of the summons and complaint and
any other process which may be served in any such action or proceeding. Such
service may be made by mailing or delivering a copy of such process to Seller in
care of such process agent, at the address of such process agent stated above,
and Seller hereby irrevocably authorizes and directs such process agent to
accept such service on its behalf. Each party also irrevocably consents to the
service of any and all process in any such action or proceeding by the mailing
of copies of such process to such party by registered or certified mail at its
address in accordance with Section 14 hereof. Nothing contained herein shall be
deemed to limit in any way any right to serve process in any manner permitted by
law. In addition, each party hereby irrevocably waives to the fullest extent
permitted by law any objection which it may now or hereafter have to the laying
of venue in any such action or proceeding in any state or federal court sitting
in the City of New York, borough of Manhattan, U.S.A., and hereby further
irrevocably waives any claim that any such forum is an inconvenient forum. Each
party agrees that a final judgment in any such action or proceeding that is no
longer subject to appeal shall be conclusive and may be enforced in any other
jurisdiction by suit on the judgment or in any other manner provided by law.
Nothing in this section shall impair the right of any party to bring
any action or proceeding against the other or its property in the courts of any
other jurisdiction, and each party irrevocably submits to the nonexclusive
jurisdiction of the appropriate courts of the jurisdiction sitting in any place
where the property or an office of such party is located.
To the extent that any party or any of its property has or may
hereafter acquire any immunity from jurisdiction of any court or from any legal
process (whether through service or notice, attachment prior to judgment,
attachment in aid of execution, execution, or otherwise) under the laws of any
jurisdiction, such party hereby irrevocably waives such immunity in respect of
its obligations under this Agreement and agrees that it shall be subject to
civil and commercial law with respect to such obligations.
23. SEVERABILITY.
Any provision of this Agreement which is prohibited or unenforceable in
any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability
22
without invalidating the remaining provisions hereof or affecting the validity
or enforceability of such provision in any other jurisdiction.
24. ATTORNEYS' FEES.
If any litigation with respect to the obligations of the parties under
this Agreement results in a final nonappealable order of a court of competent
jurisdiction that results in a final disposition of such litigation, the
prevailing party, as determined by the court ordering such disposition, shall be
entitled to reasonable attorneys' fees and costs of suit, including appeal, as
shall be determined by such court.
[Rest of the page left intentionally blank]
23
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
SELLER:
KOREA EXCHANGE BANK
By:___________________________________________
Name:_________________________________________
Title:________________________________________
BUYER:
NARA BANK, NATIONAL ASSOCIATION
By:___________________________________________
Name:_________________________________________
Title:________________________________________
24
SCHEDULE A
ACCOUNT LIST
A-1
SCHEDULE B
LOAN LIST
B-1
SCHEDULE C
LOAN LIST
(To be prepared after due diligence)
C-1
APPENDIX I
1. Eight percent (8%) of the Average Balance of all Accounts listed on
Schedule A on the Closing Date which balance shall exclude: (i) the
Average Balance of the business checking account and money market
account of Seller or any of Seller's affiliates; and (ii) the accounts
listed in item 2 below. The "Average Balance" as used herein shall mean
the average amount calculated using the average of the daily closing
balances over the period from the date of the Agreement to the Closing
Date.
2. Zero percent (0%) of all certificates of deposit and club savings
accounts listed on Schedule A on the Closing Date.
I-1
EXHIBIT A
DEPOSIT ASSUMPTION AND LOAN PURCHASE AGREEMENT
BETWEEN
KOREA EXCHANGE BANK
AND
NARA BANK, N.A.
ASSIGNMENT AND ASSUMPTION AGREEMENT
THIS ASSIGNMENT AND ASSUMPTION AGREEMENT is entered into this ____ day of
____________, 2003, by and between Korea Exchange Bank, Seoul, Republic of Korea
("Seller"), and Nara Bank, N.A., a national bank ("Buyer").
W I T N E S S E T H:
WHEREAS, Seller and Buyer have entered into a Deposit Assumption and Loan
Purchase Agreement dated as of _____________, 2003 (the "Agreement"), which
provides for the assignment by Seller of all of its rights and interests in and
to certain deposit liabilities related to Seller's office located at ▇▇-▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, and the assumption by Buyer of all of Seller's
liabilities thereunder, all as set forth in the Agreement;
NOW, THEREFORE, in consideration of the foregoing, and for other good and
valuable consideration, receipt of which is hereby acknowledged by Seller and
Buyer, Seller hereby assigns, transfers and sets over to Buyer all of Seller's
rights and interest to, and Buyer does hereby assume all of Seller's liabilities
and obligations in connection with, all Accounts set forth on Schedule A
attached hereto on the Closing Date.
Nothing contained herein shall require Buyer to pay or discharge any debts or
obligations expressly assumed hereby so long as Buyer shall in good faith
contest or cause to be contested the amount or validity thereof.
Other than as specifically stated above or in the Agreement, Buyer assumes no
debt, liability or obligation of Seller by this Assignment and Assumption
Agreement, and it is expressly understood and agreed that all debts, liabilities
and obligations not assumed hereby by Buyer shall remain the sole obligation of
Seller, its successors and assigns.
No person other than Seller, its successors and assigns shall have any rights
under this Assignment and Assumption Agreement or the provisions contained
herein.
AA-1
This Assignment and Assumption Agreement is intended to evidence the
consummation of the transactions contemplated by the Agreement and is made
without representation or warranty except as provided in and by the Agreement.
This Assignment and Assumption Agreement is in all respects subject to the
provisions of the Agreement and is not intended in any way to supersede, limit,
expand or qualify any provision of the Agreement.
Capitalized terms used herein and not defined herein shall have the meanings
assigned to them in the Agreement.
This Assumption Agreement may be executed in any number of counterparts, each of
which will be deemed an original, but all of which together will constitute one
and the same instrument.
This Assignment and Assumption Agreement shall be governed by and construed in
accordance with the laws of the State of New York applicable to a contract
executed and performed in such State without giving effect to the conflicts of
law principles thereof. Section 22 of the Agreement on consent to jurisdiction
and waiver of immunities is incorporated herein by reference and made a part
hereof as if fully set forth herein.
IN WITNESS WHEREOF, the undersigned have caused their duly authorized officers
to execute this Assignment and Assumption Agreement on the day and year first
above written.
BUYER:
NARA BANK NATIONAL ASSOCIATION
By: ___________________________
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇
Title: President
SELLER:
KOREA EXCHANGE BANK
By:_____________________________
Name:___________________________
Title:__________________________
AA-2
EXHIBIT B
DEPOSIT ASSUMPTION AND LOAN PURCHASE AGREEMENT
BETWEEN
KOREA EXCHANGE BANK
AND
NARA BANK, N.A.
▇▇▇▇ OF SALE
THIS ▇▇▇▇ OF SALE is dated this ____ day of _____________, 2003, by Korea
Exchange Bank, Seoul, Republic of Korea ("Seller").
W I T N E S S E T H:
WHEREAS, Seller and Nara Bank, N.A., a national bank ("Buyer"), have entered
into a Deposit Assumption and Loan Purchase Agreement dated as of August __,
2003 (the "Agreement"), which provides for the sale by Seller to Buyer of
certain loans related to Seller's Broadway Branch located at ▇▇-▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, all as set forth in the Agreement;
NOW, THEREFORE, Seller, for good and valuable consideration, receipt of which is
hereby acknowledged, does hereby grant, bargain, sell, assign, set over, convey
and transfer to Buyer all of its right, title and interest in and to the
following assets (the "Assets"):
(a) All of the Loans (including the Letters of Credit but excluding the
Excluded Loans under Section 2(b) of the Agreement) set forth on
Schedule B and Schedule C attached hereto on the Closing Date; and
(b) All of Seller's files and records related to the Loans.
Seller, for itself and its successors and assigns, does hereby covenant and
agree to and with Buyer and its successors and assigns that it (i) is seized of,
and has the right to convey to Buyer, such title to the Assets as is provided in
the Agreement, (ii) shall warrant and defend said title to the Assets in the
manner provided in the Agreement, and (iii) shall, from time to time at the
request of Buyer, provide Buyer with such information and assistance as may be
necessary to give full force and effect to the intent and purposes of this ▇▇▇▇
of Sale.
This ▇▇▇▇ of Sale is intended to evidence the consummation of the transactions
contemplated by the Agreement and is made without representation or warranty
except as provided in and by the
BB-1
Agreement. This ▇▇▇▇ of Sale is in all respects subject to the provisions of the
Agreement and is not intended in any way to supersede, limit, expand or qualify
any provision of the Agreement.
Capitalized terms not defined herein shall have the meaning assigned to them in
the Agreement.
IN WITNESS WHEREOF, Seller has caused this ▇▇▇▇ of Sale to be duly executed by
its duly authorized officer, all as of the day and year first above written.
KOREA EXCHANGE BANK
By:__________________________
Name:________________________
Title:_______________________
BB-2