[▇▇▇▇▇▇▇]
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BRANCH PURCHASE AND ASSUMPTION AGREEMENT
dated as of
June 30, ▇▇▇▇
▇▇▇▇▇▇▇
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ NATIONAL TRUST AND SAVINGS ASSOCIATION
and
FIRST NATIONAL BANK OF CENTRAL CALIFORNIA
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TABLE OF CONTENTS
Page
ARTICLE 1 Definitions .................................................... 1
1.1 Definitions .................................................... 1
ARTICLE 2 Purchase and Sale .............................................. 7
2.1 Purchase and Sale .............................................. 7
2.2 Closing ........................................................ 7
2.3 Transitional Matters ........................................... 11
2.4 Employee Considerations ........................................ 14
ARTICLE 3 Price and Adjustments .......................................... 18
3.1 Price .......................................................... 18
3.2 Adjustments .................................................... 19
ARTICLE 4 Additional Covenants ........................................... 24
4.1 Seller's Covenants ............................................. 24
4.2 Buyer's Covenants .............................................. 27
4.3 Consents ....................................................... 29
4.4 Environmental Matters .......................................... 30
4.5 Valuation of the Assets ........................................ 39
4.6 Clearing Items ................................................. 39
4.7 ▇▇▇ Deposits and ▇▇▇▇▇ Accounts ................................ 39
4.8 Interest Reporting and Withholding ............................. 40
4.9 Eminent Domain or Taking ....................................... 40
4.10 Damage or Destruction .......................................... 41
ARTICLE 5 Representations and Warranties ................................. 43
5.1 Seller's Representations and Warranties ........................ 43
5.2 Buyer's Representations and Warranties ......................... 44
ARTICLE 6 Understandings ................................................. 46
6.1 Depositors' Rights ............................................. 46
6.2 Unclaimed Property ............................................. 47
6.3 Head Office Accounts ........................................... 47
6.4 Limitation of Warranties ....................................... 47
ARTICLE 7 Conditions to the Closing ...................................... 48
7.1 Seller's Conditions ............................................ 48
7.2 Buyer's Conditions ............................................. 49
ARTICLE 8 Termination .................................................... 51
8.1 Events of Termination .......................................... 51
8.2 Liability for Termination ...................................... 51
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ARTICLE 9 Survival, Indemnification ..................................... 52
9.1 Survival ...................................................... 52
9.2 Seller's Indemnity ............................................ 52
9.3 Buyer's Indemnity ............................................. 53
9.4 Arbitration of Disputes ....................................... 54
9.5 Limit on Indemnities .......................................... 55
ARTICLE 10 Taxes ......................................................... 56
10.1 Obligations of the Buyer and the Seller ....................... 56
10.2 Access to Information ......................................... 56
10.3 Allocation of Consideration ................................... 56
ARTICLE 11 Miscellaneous ................................................. 57
11.1 Public Notice ................................................. 57
11.2 Assignment .................................................... 57
11.3 Notices ....................................................... 57
11.4 Time .......................................................... 59
11.5 Expenses ...................................................... 59
11.6 Communications ................................................ 59
11.7 Entire Agreement .............................................. 59
11.8 Amendment ..................................................... 59
11.9 Governing Law, Severability ................................... 59
11.10 Waiver ........................................................ 59
11.11 Confidentiality ............................................... 60
11.12 Third Party Rights ............................................ 61
11.13 Headings ...................................................... 61
11.14 Counterparts .................................................. 62
SCHEDULES
A List of Branches
1.1(a) Branch Real Estate
1.1(b) Furniture, Fixtures and Equipment
1.1(c) Other Liabilities
2.2(b)(i)(A) Form of Grant Deed
2.2(b)(i)(B) Form of ▇▇▇▇ of Sale
2.2(b)(i)(C) Form of Assignment and Assumption
2.2(d) Contracts
2.2(e) Leases
3.1 Leasehold Improvements
4.4(c) Phase I Environmental Site Assessments and
Asbestos Surveys
5.1(e) Litigation
5.2(j) Real Estate Disclosures
6.3 Head Office Accounts
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BRANCH PURCHASE AND ASSUMPTION AGREEMENT
THIS BRANCH PURCHASE AND ASSUMPTION AGREEMENT (Agreement) is made as of June 30,
1997, by and between BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, a
national banking association established under the laws of the United States
(the "Seller"), and FIRST NATIONAL BANK OF CENTRAL CALIFORNIA, a national
banking association established under the laws of the United States ("the
Buyer")
WHEREAS, the Seller maintains the branch or branches listed on Schedule
A hereto (sometimes referred to herein collectively as the Branches and
individually as a Branch)
WHEREAS, the Buyer wishes to purchase certain of the assets and assume
certain of the liabilities of the Branches and the Seller is willing to sell and
transfer the same upon the terms and subject to the conditions hereinafter set
forth; and
WHEREAS, the Buyer intends that retail and business banking services
will be offered in the geographic areas served by the Branches.
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
(i) is not represented by a certificate of deposit having a fixed maturity and
(ii) is maintained at one of the Branches.
"Accrued Expenses" means the accrued and unpaid expenses appearing as a
liability on the Financial Statements pursuant to Section 3.2(c).
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"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 Branch Real Estate, the Furniture, Fixtures and
Equipment, Improvements, Leasehold Improvements, Cash on Hand, safe deposit
boxes located at the Branches (exclusive of the contents thereof), 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
one or more of the Branches, 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 Sections 3.2(f), 3.2(g), or 6.3,
(iii) Deposits which secure Visa card accounts, and (iv) 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.
"Branch Real Estate" means all real property owned by the Seller on
which any of the Branches is located and which is identified in the preliminary
title reports included in Schedule 1.1(a)
"Business Day" means a day on which the Seller is open for business in
California and which is not a Saturday or Sunday.
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"Cash on Hand" means, as of any date, all ▇▇▇▇▇ cash, vault cash, teller
cash, automated teller machine cash and prepaid postage maintained at the
Branches.
"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
Branches prepared by the Seller as of the close of business at the Branches 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).
"Continuation Coverage" shall have the meaning set forth in Section
2.4(g).
"Deposits" means, as of any date, all deposit liabilities of the Seller
that are Accounts or certificates of deposit maintained at the Branches,
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 one of the
Branches by Seller or its subsidiaries or Affiliates, including without
limitation, those employees on medical leave, family leave, military leave or
personal leave under Sellers 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 New York (or any successor)
in substantially the same manner as such Federal Reserve Bank currently computes
and releases the weighted average it refers to as the Federal Funds Effective
Rate at the date of this Agreement.
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"Final Financial Statement" means the balance sheet of the Branches
prepared by the Seller as of the close of business at the Branches 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 Sellers 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(b) 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(b) under the caption
"Retained by Seller (Items Excluded from Sale)."
"Improvements" means all improvements to the Branch Real Estate
purchased, installed or constructed by or on behalf of, and owned by, the Seller
and used in connection with the operation or maintenance of the Branches,
including, without limitation, buildings, structures, parking facilities and
drive-up teller facilities.
"Individual Retirement Account" or "▇▇▇" 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.
"▇▇▇ Deposits" shall have the meaning set forth in Section 3.2(f).
"IRC" means the Internal Revenue Code of 1986, as amended.
"▇▇▇▇▇ Accounts" shall have the meaning set forth in Section 3.2(g).
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"Lease" means any lease or sublease of a lease by which Seller has
rights to occupy and use Leased Real Estate or Leasehold Improvements or both.
"Leased Real Estate" means all real property on which any of the
Branches is located, which is occupied and used by the Seller pursuant to a
lease.
"Leasehold Improvements" means all improvements on or constituting a
portion of Leased Real Estate, purchased, installed or constructed by or on
behalf of, and owned by, Seller and used in connection with the operation or
maintenance of the Branches, including, without limitation, buildings,
structures, parking facilities and drive-up teller facilities.
"Liabilities" means (i) the Assumed Deposits, (ii) the Assumed
Contracts, if any, (iii) the Sellers obligations to provide services from and
after the Closing Date in connection with the Assets and the Assumed Deposits,
including obligations with respect to safe deposit boxes, (iv) the Leases, if
any, and (v) such other liabilities of the Seller with respect to the operations
of the Branches as may be described on Schedule 1.1(c) (the "Other
Liabilities"); excluding, however, any Leases or 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.
"Market Value" shall mean, with respect to any Branch Real Estate and
any Improvements with respect thereto, the appraised market value thereof on an
"as is" basis, reflecting the highest and best use thereof in the condition
observed by the appraiser upon inspection and as such property physically and
legally exists without hypothetical conditions, assumptions or qualifications.
Market Value is the most probable price which a property should bring in a
competitive and open market under all conditions requisite to a fair sale, the
Buyer and the Seller each acting prudently and knowledgeably, and assuming the
price
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is not affected by undue stimulus. Implicit in this definition is the
consummation of a sale as of a specified date and the passing of title from the
Seller to the Buyer under conditions whereby: (i) the Buyer and the Seller are
typically motivated; (ii) both parties are well informed or well advised, and
acting in what they consider their own best interests; (iii) a reasonable time
is allowed for exposure in the open market; (iv) payment is made in cash in U.S.
dollars or in terms of financial arrangements comparable thereto; and (v) the
price represents the normal consideration for the property sold, unaffected by
special or creative financing or sales concessions granted by anyone associated
with the sale. The appraisal shall be set forth in a report of appraisal by an
independent appraiser to be selected by the Buyer from a list of no more than
five (5) appraisers to be provided by the Seller. The cost of such appraisal
shall be borne equally by the Buyer and the Seller.
"Overdrafts" means only overdrafts in Transaction Accounts (other than
overdrafts extended pursuant to a formal line of credit or similar arrangement)
maintained at the Branches.
"Pre-Final Financial Statement" means the balance sheet of the Branches
prepared by the Seller as of the close of business at the Branches 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 Sellers 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, 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" shall mean the amount equal to 7.50% of the average
of Assumed Deposits for the twenty (20) Business Days immediately prior to and
including the Closing Date.
"Returned Items" shall have the meaning set forth in Section 3.2 (h).
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"Seller's Knowledge" or other similar phrases shall mean the actual
knowledge, without having conducted any independent inquiry or investigation, of
the regional manager of the Seller responsible for a Branch (but only as to
information as to such Branch) and ▇▇▇▇▇ ▇. ▇▇▇▇▇, Vice President of the Seller.
"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 rate for a specific term.
"Transaction Account" means any Account in respect of which deposits
therein are withdrawable in practice upon demand or upon which third party
drafts may be drawn by the depositor, including checking accounts, Alpha
accounts, NOW accounts and money market deposit accounts.
"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 the offices of the Seller, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇; provided, that transfer of
the Branch
Real Estate shall be effected through a real estate escrow to be opened with
Chicago Title Company, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇. The
closing shall be held on a Thursday that is mutually agreeable to the Buyer and
the Seller as soon as practicable 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
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provided for herein. Notwithstanding the foregoing, the Seller may, for any
proper business reason, adjourn the date and time of the Closing, 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 March 31, 1998, 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), 2.2(e), 3.2(b), 4.3 and the final paragraph of
Section 7.2:
(A) The Seller shall deliver to the Buyer one or more grant deeds
for the Branch Real Estate, if any, in the form attached hereto as
Schedule 2.2(b) (i) (A) and shall cooperate with the Buyer in assisting
the Buyer to obtain (at the Buyer's expense) one or more CLTA policies
of title insurance with respect to the Branch Real Estate (or portions
thereof) if the Buyer determines to obtain such insurance;
(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 Leasehold
Improvements, if any, and 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 Leases, if
any, and the Assumed Contracts, if any;
(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));
(E) The Seller shall use its reasonable efforts to have available
for pick-up by the
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Buyer by approximately 6:00 a.m. on the morning following the Closing
Date (I) hard copy (printed) lists of Assumed Deposits maintained at
each 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) 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
appropriate Branches and the items referred to in (II) to the Buyers
system vendor;
(F) The Seller shall prepare, separately for each Branch, a readable
set of the Magnetic Tapes and printed reports referred to in Section
2.2(b)(i)(E) to be used for 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,
depending on the number and locations of the Branches, 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 of $2,000 for each set of Magnetic Tapes
(whether or not accompanied by printed reports);
(G) The Seller shall deliver to the Buyer copies of written consents
to the assignment of any Assumed Contracts or Leases requiring such
consent;
(H) The Buyer shall pay to the Seller the amount of the interest
which would accrue at the Federal Funds Rate in effect on the Closing
Date on the cash payment by the Seller pursuant to Section 2.2(b)(i)
(D); and
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(I) The Seller shall deliver to the Buyer on the Closing Date, or as
soon thereafter as practicable, the records of information concerning
the presence, location and quantity of asbestos-containing material
("ACM") or presumed ACM, if any, in the Branch that, pursuant to 8 CCR
ss. 1529(n) (6) and 5208(j)(2)(B), is to be transferred to successive
owners.
(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, including but not limited to the assignment of the Leases.
On the Closing Date, (i) all real and personal property taxes and current
installments of special assessments levied or assessed with respect to the
Branch Real Estate, the Improvements, the Leasehold Improvements and 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 Branch Real Estate, the
Leases, the Improvements, the Leasehold Improvements and 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 one or more of
the Branches 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 not be required to provide Buyer with any
information regarding, or to set forth in Schedule 2.2(d), equipment leases or
service and maintenance contracts which it believes are not legally assignable
and the Seller shall have no liability to the Buyer as the result of its
inability to accomplish assignments thereof. 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 Branches for which the Buyer shall have any
responsibility after the Closing.
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(e) Leases. At the Closing, the Seller shall assign to the Buyer all of
the Seller's right, title and interest in the Leases, if any, set forth in
Schedule 2.2(e); provided, however, that if the Seller notifies the Buyer not
later than thirty (30) Business Days prior to the Closing Date that one or more
such Leases are legally nonassignable without the consent of one or more third
parties, and that such consents have not been obtained, then (i) the Seller
shall not be required to assign such Lease or Leases at Closing, (ii) Seller
shall have no liability to the Buyer as the result of its inability to
accomplish such assignment and (iii) either (A) the Seller at its sole
discretion may elect to exercise its right under the final paragraph of Section
7.2 to exclude the affected Branch from the Closing, and the parties shall
continue to be obligated to carry out the provisions of this Agreement as to the
remaining Branch or Branches or (B) if the Lease permits the Seller to sublease
the premises and the related Leasehold Improvements to the Buyer, the Seller in
its sole discretion may elect to sublease such premises and Leasehold
Improvements to Buyer for the maximum term permitted under the Lease, on
substantially the same terms and conditions as the terms and conditions of the
Lease, in which case the consideration payable under Article 3 shall be adjusted
to reflect the Leasehold Improvements which will not be transferred to the Buyer
and the parties shall continue to be obligated to carry out the provisions of
this Agreement as to the remaining Branch or Branches.
2.3 Transitional Matters.
(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 Branches 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 Sellers
customary rate schedules, and except for other
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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 (other than the Branch Real Estate, Improvements or Leasehold
Improvements) in the ordinary course of business;
(iii) Except as provided in Article 6, the Seller will not cause the
transfer from one or more of the Branches to the Seller's other
operations (except to another Branch) of any deposits of the type
included in the Liabilities; provided, however, that the Seller may
transfer deposits to the Sellers other branches or offices upon request
of the depositors and may transfer to its other branches or offices
other deposits which are not to be transferred to Buyer pursuant to this
Agreement;
(iv) The Seller shall not make any capital commitments with respect
to the Branch Real Estate, the Improvements and the Leasehold
Improvements except aggregate capital commitments made in the ordinary
course of business not exceeding $25,000 for each Branch;
(v) The Seller shall not grant any increase in the rate of
compensation or in the benefits payable or to become payable to any
current officer or employee of the Branches, or to any current agent or
consultant thereof, over the levels in effect as of the date hereof,
other than any regularly scheduled increases, including bonuses,
contemplated under contracts, policies or programs existing on the date
hereof or under any benefit program generally applicable to the Seller's
employees; provided that the Seller shall retain the right to hire
additional branch employees at comparable rates of compensation as
necessary for the operation of the Branches;
(vi) The Seller will maintain the Branch Real Estate, Improvements,
Leasehold Improvements and Furniture, Fixtures and Equipment
substantially in accordance with its normal practices, and keep such
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property in its present condition, ordinary wear and tear excepted;
(vii) The Seller shall operate the Branches 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
(viii) The Seller shall provide the Buyer reasonable access during
normal business hours to and the opportunity to review and inspect the
Branch Real Estate, Improvements, Leased Real Estate, Leasehold
Improvements, Furniture, Fixtures and Equipment of the Branches, and the
books, records, files, documentation and accounts of the Branches; 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 Branches as the Buyer may reasonably
request. In addition, the Seller shall provide the Buyer reasonable
access to the Branches during the thirty (30) 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 any 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 all Branches 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
Branches.
(b) Buyers 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 mechanic's liens) arising out of any
entry by Buyer or its agents, designees or representatives on the Branch Real
Estate or Leased Real Estate for purposes of the review, inspection and
installation provided for in Section 2.3(a)(viii) or for any other purpose
(other than for the purposes set forth
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in Section 4.4(d), which shall be governed by the provisions of that Section).
Without limiting the scope of the foregoing, Buyer also will restore the Branch
Real Estate, Improvements, Leased Real Estate, Leasehold Improvements,
Furniture, Fixtures and Equipment, books, records, files, and documentation of
the Branches at its sole cost and expense if one or more of the transactions
contemplated by this Agreement do not close. Until restoration is complete,
Buyer will take all steps necessary to ensure that any conditions at the
Branches created by any testing, review, inspection, installation or other
actions performed by or for Buyer will not interfere with the normal operation
of the Branches or create any dangerous, unhealthy, unsightly or noisy
conditions at the Branches. Buyer shall comply with any requirements or
restrictions contained in the Leases regarding any actions it takes at the
Leased Real Estate, including, without limitation, any requirements of notice to
the landlord. The provisions of this Section 2.3(b) shall survive the Closing or
any earlier termination of this Agreement.
(c) Data Processing Conversion. The conversion of the data processing
with respect to the Branches 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. The Seller shall use its
reasonable efforts to make available the required hard copy (printed) reports
(and Magnetic Tapes, if applicable) in connection therewith for pick up from the
Seller by 6:00 a.m. on such morning, subject to any production problems that are
beyond the Sellers reasonable control. The arrangements for pickup, delivery and
payment for courier services shall be as provided in Section 2.2(b)(i)(E). 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. Seller will
not migrate (transfer) existing PINs used for ATM cards to the Buyer.
2.4 Employee Considerations.
(a) Buyer shall offer employment as of the Closing Date to all
Employees. All Employees shall be offered employment at base wages and salaries
no less favorable than the wages and salaries currently being paid by Seller to
such Employees. To
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the extent consistent with Buyers existing structure for comparable positions
and comparable officer titles and its current policies regarding officer titles,
Employees shall be offered positions with responsibilities and officer titles
comparable to those they currently have with Seller and, unless agreed upon by
any such Employee, within a reasonable geographic proximity to such Employees
work location before the Closing Date.
(b) All Employees who accept employment with Buyer as of the Closing
Date shall be eligible to participate in the employee benefit plans and other
fringe benefits of Buyer on the same basis as such plans and benefits are
offered to employees of Buyer with comparable positions with Buyer, except as
provided in the penultimate sentence of Section 2.4(e). Buyer shall credit such
Employees for their length of service with Seller or its Affiliates for all
purposes under each employee benefit plan and fringe benefit to be provided by
Buyer to such Employees, to the same extent such service was recognized under a
similar plan of Seller, based on information provided by Seller. However, such
service need not be counted for purposes of calculating accrued benefits under a
pension benefit plan, except that in determining the rate of prospective benefit
accrual, service shall be counted where such rate increases with service. For
purposes of this Section 2.4, "employee benefit plans and other fringe benefits"
includes, without limitation, pension and profit sharing plans, retirement and
post retirement welfare benefits, health insurance benefits (medical, dental and
vision), disability, life and accident insurance, sickness benefits, vacation,
employee loans and banking privileges.
(c) If Buyer offers a salary continuation or similar program for
employees unable to work for medical reasons, the Employees who accept
employment with Buyer shall be credited under any program of Buyer with at least
the number of sickness benefit days accrued under Seller's program at the
Closing Date.
(d) Seller agrees to remain responsible for the payment of all benefits
accrued during the period of employment by the Seller under the terms of the
Seller's retirement plans with respect to any Employee. Buyer shall not at any
time assume any liability for the benefits of any active or any terminated,
vested or retired participants in the Sellers retirement plans.
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(e) Seller shall be responsible for payments for accrued vacation not
taken by an Employee prior to the Closing Date and for timely payment as
required by law of all wages, salaries, bonuses, if any, and other compensation
with respect to service completed on or prior to the Closing Date. Seller shall
offer Employees who accept employment with Buyer the option to receive cash or
to transfer to Buyer their accrued vacation days or fractions thereof earned but
unused while employed by Seller. In the event any Employee elects to receive
cash upon employment by Buyer, Seller shall make a cash payment to such Employee
in accordance with applicable law. In the event any such Employee elects to have
his or her accrued vacation transferred upon employment by Buyer, Buyer shall
give such Employee credit after the Closing Date for the same number of vacation
days or fractions thereof he or she has accrued with Seller as of the Closing
Date. For purposes of this Section, personal choice days or fractions thereof
will be treated as vacation days. In the event Employees elect to have their
accrued vacation carried over to Buyer, Seller shall pay to Buyer, not later
than the date of the Final Financial Statement, an amount equal to the net cash
value of each such Employee's accrued vacation before payroll deductions. In the
calendar year in which the Closing Date occurs, Employees shall be eligible to
earn at least the prorated annual vacation amount Employees were eligible to
earn under Seller's vacation policy. In subsequent calendar years, Employees
will be eligible to earn vacation according to the schedule specified in Buyer's
policy.
(f) Seller shall retain the responsibility for payment of all medical,
dental, vision, health and disability claims incurred by any Employee prior to
the Closing Date, and Buyer shall not assume any liability with respect to such
claims. On or after the Closing Date, all medical, dental, vision, health and
disability claims incurred by Employees in Buyer's employ shall be determined
under Buyer's benefit plans. Buyer agrees that Employees and their eligible
dependents will receive credit for their periods of coverage under Seller's
health or disability plans towards satisfying any preexisting condition clause
in any of Buyers health or disability plans, provided such Employee or eligible
dependent is enrolled in Seller's plans on the Closing Date. Buyer also agrees
that Employees and their eligible dependents shall receive credit under Buyer's
health care plans for any deductibles paid by such Employee and enrolled
dependents for the current plan year under a health care plan maintained by
Seller.
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(g) Seller shall be responsible for providing any Employee whose
"qualifying event", within the meaning of Section 4980B(f) of the IRC, occurs on
or prior to the Closing Date (and such Employees "qualified beneficiaries"
within the meaning of Section 4980B(f) of the IRC) with the continuation of
group health coverage required by Section 4980B(f) of the IRC (Continuation
Coverage) under the terms of the health plan maintained by Seller. Buyer shall
be responsible for Continuation Coverage to any Employee in Buyer's employ (and
each Employee's qualified beneficiaries) whose qualifying event occurs after the
Closing Date to the extent required by law.
(h) Seller agrees that it shall retain, consistent with its normal
employment practices, all liability and obligation, if any (including, without
limitation, the liability and obligation for all wages, salary, vacation pay and
unemployment, medical, dental, vision, health and disability benefits) for those
former employees of the Branches who retired or terminated employment prior to
the Closing Date or who otherwise do not become employees of Buyer.
(i) Effective as of the Closing Date, Buyer shall assume liability for
severance pay and similar obligations payable to any Employee who accepts
employment with Buyer and who is terminated by Buyer on or after the Closing
Date. Such payment shall be made pursuant to Buyer's normal severance policy and
Buyer shall compute severance pay by giving Employees full credit for all years
of service that would have been recognized under Seller's severance policy. In
addition, for an Employee whose job with Buyer is eliminated within twelve (12)
months of the Closing Date, Buyer agrees to pay to such Employee the difference,
if any, between the amount of severance pay received by the Employee under
Buyer's severance policy and the amount such Employee would have received upon
his or her separation from the Seller under Seller's severance policy in effect
on the Closing Date.
(j) For Employees who accept employment with Buyer and who as of the
Closing Date are absent from work due to sickness or short-term disability,
Seller shall have no further liability or obligation for short-term disability
benefits, sick pay or salary continuation to the extent attributable to periods
after the Closing Date (or any medical, dental, vision and health claims
incurred after the Closing Date). Such Employees shall be eligible for such
benefits as are provided by Buyer under its policies and this Agreement.
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(k) The Buyer shall make the offers of employment as soon as possible
after all the consents, approvals and authorizations referred to in Sections
7.1(c) and 7.2(c) hereof have been obtained (and in no event more than ten (10)
Business Days after the last of such consents, approvals and authorizations has
been obtained). Such offers shall be made in person to each Employee at a
meeting at which representatives of Buyer and Seller are present. The
information provided to each Employee at such meeting shall include a discussion
of Buyer's employee benefit plans and policies, together with a written summary
thereof. Buyer shall be responsible for advising Employees of the details of any
offers and terms of employment, and answering any questions relating thereto,
but Seller shall be allowed to review and approve, prior to its distribution,
(i) any communication with Employees prior to the Closing Date, and (ii) any
communication with such Employees after the Closing Date which describes or
refers to Seller's employee benefit plans and policies. Buyer shall not at any
time have access to Employee personnel files of Seller.
(1) Prior to the Closing Date, the Buyer may train the Seller's
Employees who have accepted Buyer's offers of employment, at a time mutually
agreed upon by Buyer and Seller, and the Buyer will reimburse the Seller for
such Employees' salaries for the time they are engaged in such training and for
all of their expenses incurred in connection with such training for which they
are reimbursed by Seller.
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
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amount of Cash on Hand, (ii) the Market Value of the Branch Real Estate and the
Improvements, (iii) the amount of $0 for Leasehold Improvements, (iv) the amount
of $46,046.61 for the Furniture, Fixtures and Equipment (which amount is
allocated as listed on Schedule 1.1(b)), (v) the amount of Prepaid Expenses at
the Branches, (vi) the amount of the Overdrafts, (vii) the amount of any fees,
charges or accrued interest receivable on such Overdrafts, (viii) the amount of
the Purchase Premium, and (ix) the Seller's pro rata portion of ▇▇▇ Deposit and
▇▇▇▇▇ Account trustee fees accrued on such accounts held in the Branches through
the Closing Date, less the amount of the safe deposit key deposits referred to
in Section 3.2(e).
3.2 Adjustments. Subject to the provisions of Section 4.4 and 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) As soon as practicable after 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) As soon as practicable after 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 Section 4.4 and 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
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Final Financial Statement. The Seller and the Buyer shall 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 follow the procedures set forth in Section 9.4
to resolve such dispute 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, but excluding fees for use of safe
deposit boxes, 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.
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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 Branches 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 Branches
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) At the Closing Date, the Seller shall pay to the Buyer the amount of
cash deposits held by the Seller at the Closing Date received for keys issued in
connection with safe deposit box rentals at the Branches that are transferred to
the Buyer hereunder;
(f) With respect to Deposits which are Individual Retirement Accounts
("▇▇▇ 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 ▇▇▇
Deposits except self-directed ▇▇▇ Deposits (and, for those customers with
self-directed ▇▇▇ Deposits, any other ▇▇▇ 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 ▇▇▇ Deposits affected
thereby;
(g) With respect to Deposits which are BankAmerica Basic Retirement Plan
Accounts ("▇▇▇▇▇ Accounts") created by a trust for the benefit of employees
(some or all of whom are
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owner-employees) and that comply with the provisions of Section 401 of the IRC,
the Seller will use reasonable efforts and cooperate with the Buyer to invite
depositors thereof to direct a transfer of each such depositor's ▇▇▇▇▇ Account
and the related Deposit to the Buyer (or an affiliate of the Buyer), as trustee
thereof, and to adopt the Buyer's (or such affiliate's) form of ▇▇▇▇▇ Master
Plan as a successor to that of the Seller. The Buyer (or such affiliate) will
assume no Deposits which are ▇▇▇▇▇ Accounts unless the Buyer (or such affiliate)
has received the documents necessary for such assumption or transfer at or
before the Closing. With respect to any depositors who do not transfer such
accounts to the Buyer's (or such affiliate's) form of ▇▇▇▇▇ Master Plan, the
Seller will use reasonable efforts in order to enable the Buyer (or such
affiliate) to retain such ▇▇▇▇▇ Accounts at the Branches at which such accounts
were maintained;
(h) Any items that were credited for deposit to or cashed against an
Assumed Deposit prior to the Closing 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 a 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; and
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(i) As soon as practicable, but in any event no later than fifteen (15)
calendar days after the Closing Date, the Buyer shall mail to each depositor in
respect of a Transaction Account (included in the Assumed Deposits) a letter
approved in writing by the Seller requesting that such depositor promptly cease
writing the Sellers drafts against such Transaction Account. At such time as the
Buyer mails each such notice to each depositor, the Buyer shall also forward to
each such depositor new drafts which such depositor may draw upon the Buyer for
the purpose of effecting transactions with respect to such Transaction Accounts.
The parties hereto shall use reasonable efforts to develop procedures
which cause the Seller's form of drafts against Transaction Accounts which are
received after the Closing Date to be cleared through the Buyer's then current
clearing procedures.
During the one hundred eighty (180) calendar day period from the Closing
Date, if it is not possible to clear Transaction Account drafts through the
Buyer's then current clearing procedures after the Closing Date, the Seller
shall forward to the Buyer no later than the next Business Day after receipt
thereof all such Transaction Account drafts drawn against Transaction Accounts
domiciled at one of the Branches and transferred on the Closing Date. The Seller
shall have no obligation to pay such Transaction Account drafts. Upon the
expiration of such one hundred eighty (180) calendar day period, the Seller
shall cease forwarding drafts against Transaction Accounts transferred on the
Closing Date and shall instead return them to the originators marked "Account
Closed" The Buyer will compensate the Seller for processing of drafts as
described in this Section according to the compensation arrangement set forth in
Section 4.6.
(j) The Seller will pay the Buyer for such portion of any overdraft on
an Assumed Deposit (including interest at the Federal Funds Rate in effect on
the Closing Date) created by Returned Items received by the Seller and passed on
to the Buyer during the sixty (60) calendar days that follow the Closing Date,
which is not recovered by the Buyer within sixty (60) calendar days after the
Closing Date.
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ARTICLE 4
Additional Covenants
4.1 Seller's Covenants. The Seller (and, to the extent specifically
indicated below, the Buyer) agrees:
(a) To use reasonable efforts 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 Branches relating to the Seller's former operation of the Branches for
the applicable period required by law;
(d) Until Closing or the earlier termination of this Agreement, to cause
the business of the Branches to be conducted in accordance with Section 2.3
above;
(e) To remove all signage from the Branches 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) As soon as practicable after the receipt of all regulatory approvals
required by Sections 7.1(c) and 7.2(c) with respect to all Branches, and no
later than thirty (30) calendar days prior to the Closing Date (unless earlier
required by law, regulation or regulatory policy), each of the Seller and the
Buyer shall provide, or join in providing where appropriate, all notices,
separately as to each 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
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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 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. For a period of one hundred eighty (180) calendar days
after the Closing Date, in the case of automated clearing house direct deposits
to Assumed Deposits, and thirty (30) calendar days after the Closing Date, in
the case of fed wire direct deposits to Assumed Deposits (each, a "Direct
Deposit Cut-off Date"), the Seller will, no later than the next Business Day
following the date of receipt thereof, remit and transfer to the Buyer all
direct deposits intended for Accounts which are Assumed Deposits. After the
applicable Direct Deposit Cut-off Date, the Seller may discontinue accepting and
forwarding automated clearing house and fed wire entries and funds and return
such direct deposits to the originators. The Seller shall not be liable for any
account overdrafts that may thereby be created or for any other matter. The
Buyer and the Seller shall agree on a reasonable period of time prior to the
Closing during which the Seller will no longer be obligated to accept new direct
deposit arrangements. At the time of each Direct Deposit Cut-off Date, the Buyer
will provide automated clearing house originators with account numbers and
conversion tapes relating to Assumed Deposits; and
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(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 all Branches (except for
statutory waiting periods), and after the notice provided in Section 4.1(f)
above, the Buyer will send appropriate notice, separately as to each Branch, 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. For a period of one hundred eighty (180) calendar days
following the Closing Date, the Seller will, on the Business Day following the
date of receipt thereof, forward to the Buyer all direct debits on Accounts
which are Assumed Deposits transferred on the Closing Date and will give the
Buyer a daily accounting of such debits to its clearing account. Thereafter, the
Seller may discontinue forwarding such entries and return them to the
originators. The Buyer and the Seller shall agree on a reasonable period of time
prior to the Closing during which the Seller will no longer be obligated to
accept new direct debit arrangements. At the time of the Closing Date, the Buyer
will provide automated clearing house originators of such direct debits with
account numbers and conversion tapes.
(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.
(j) The Seller agrees that for a period of twelve (12) months following
the Closing Date, it will not establish a "Full-Service Branch" (as defined in
the immediately following sentence) within ten (10) miles of a Branch which is
included in the Closing (the "Protected Area"). "Full-Service Branch" shall mean
a branch which includes tellers and which transacts all business related to
deposits and loans. Seller shall not be deemed to have established a
Full-Service Branch for purposes of this Section 4.1(j) solely because Seller or
any successor in interest does one or more of the following: (i) it
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exercises any rights or performs any obligations it has or may have to establish
banking facilities pursuant to any existing or future agreements with a third
party or parties for the installation, location and operation of banking
facilities in or in connection with retail stores or supermarkets owned or
operated, or both, by such third party or parties, (ii) it acquires one or more
banking facilities within the Protected Area as a result of a merger,
consolidation, purchase or sale of all or substantially all of the assets of a
party, or other reorganization to which Seller or BankAmerica Corporation
("Parent") is a party, (iii) it maintains one or more ATM facilities or conducts
courier operations within the Protected Area, (iv) it takes any action to
satisfy any obligations or commitments Seller or Parent may have arising out of
the approval by the Federal Reserve Board of the merger of Security Pacific
Corporation ("Security Pacific") into Parent on April 22, 1992, including
without limitation any commitment to maintain or enhance all existing levels of
services provided at the time of the merger by Seller or Security Pacific
branches in all service areas (for example, where branches are sold, service
levels will be maintained through placing branches in grocery stores, mobile
vans, increasing access to automated teller machines and increasing multilingual
services), or (v) it continues to maintain within the Protected Area after the
Closing Date one or more branches which it maintained therein on the Closing
Date.
(k) For a period of twelve (12) months following the Closing Date (or
such shorter period as Employees may continue to be employed by the Buyer
following the Closing Date), neither the Seller nor any Affiliate shall solicit
the employment (including the solicitation of any transfer of employment) of any
Employees; provided, however, that nothing herein shall prevent the Seller or
its Affiliates from advertising generally any employment opportunities, or from
hiring any Employees who seek employment without inducement from the Seller.
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;
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(b) 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 Branches 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
Branches 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;
(d) Not to use, keep or claim any registered or unregistered trademark,
service ▇▇▇▇ 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 ss. Procedure
1500, et seq.), of all Assumed Deposits and safe deposit boxes 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
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becomes abandoned during the calendar year in which the Closing occurs.
(f) As soon as practicable after the receipt of all regulatory approvals
required by Sections 7.1(c) and 7.2(c) with respect to all Branches, and no
later than thirty (30) calendar days prior to the Closing Date (unless earlier
required by law, regulation or regulatory policy), the Buyer shall, subject to
Section 11.1 hereof, (i) send a notice to all holders of safe deposit boxes at
each Branch and (ii) notify the holders of Deposits to be transferred on the
Closing Date that, subject to Closing, the 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 and safe deposit boxes concerning the
transactions contemplated by this Agreement and concerning the business and
operations of the Buyer.
(g) Continue to operate each of the Branches 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 (a) Leases, if
any, and (b) 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 provisions of Section 2.2(e) and the final
paragraph of Section 7.2 hereof if it does not obtain one or more such consents.
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4.4 Environmental Matters.
(a) Scope. The provisions of this Section 4.4 shall exclusively govern
the rights and obligations of the Seller and Buyer with regard to Hazardous
Substances.
(b) Definitions. For purposes of this Section 4.4, the following terms
have the following meanings:
(i) "Environmental Assessments" means environmental audits,
investigations, reviews or testing of the Branch Real Estate, Improvements,
Leased Real Estate or Leasehold Improvements (sometimes referred to collectively
in this Section 4.4 as the "Subject Assets") performed by Buyer or any third
party or consultant engaged by Buyer to conduct such study.
(ii) "Environmental Due Diligence Period" means the thirty (30) Business
Day period starting on the date of this Agreement during which Buyer must
complete its due diligence as described in Section 4.4(d).
(iii) "Environmental Law" means any law, statute, ordinance or
regulation pertaining to health, industrial hygiene or the environment in effect
as of the date of this Agreement, including but not limited to Title 42 of the
United States Code, Section 6901 et seq. (commonly known as "RCRA") or Section
9601 et seq. (commonly known as "CERCLA" or "Superfund")
(iv) "Hazardous Substance" means any substance, material or waste that
is or becomes designated or regulated as "toxic", "hazardous", "pollutant", or
"contaminant" or a similar designation or regulation under any federal, state or
local law (whether under common law, statute, regulation or otherwise) or
judicial or administrative interpretation of such, including without limitation,
petroleum or natural gas.
(c) Seller's Environmental Representations and Warranties. Seller has
delivered to the Buyer copies of a Phase I Environmental Site Assessment ("Phase
I") and an Asbestos Survey ("Asbestos Survey") regarding each Branch; provided
that Seller has not delivered an Asbestos Survey regarding any Branch where
construction of all Improvements and Leasehold Improvements was completed after
December 31, 1980. The dates of such Phase I's and Asbestos Surveys and the
names of the
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persons by whom they were prepared are listed on Schedule 4.4(c). The cost of
such Phase I's and Asbestos Surveys shall be borne by the Seller. As of the date
of this Agreement, to the Seller's Knowledge and except as disclosed in the
Phase I's and Asbestos Surveys:
(i) during the time the Seller has owned the Branch Real Estate or
leased the Leased Real Estate, no Hazardous Substances are now or have
been used or stored on or within any portion of the Subject Assets
except those Hazardous Substances which are or have been used or stored
in the normal course of use and operation of the Subject Assets in
compliance with all applicable Environmental Laws;
(ii) during the time the Seller has owned the Branch Real Estate or
leased the Leased Real Estate, there are and have been no federal,
state, or local enforcement, clean-up, removal, remedial or other
governmental or regulatory actions instituted or completed pursuant to
Environmental Laws or pertaining to Hazardous Substances and affecting
the Subject Assets;
(iii) no claims have been made by any third party against Seller
relating to any Hazardous Substances on or within the Subject Assets;
and
(iv) Seller has obtained and is in compliance with all permits,
licenses and other authorizations required with respect to the operation
of its prior business at the Branch Real Estate and Leased Real Estate
under all applicable Environmental Laws.
(d) Environmental Due Diligence.
(i) Buyers Covenants. The Buyer acknowledges and agrees that:
(A) Seller is furnishing copies of the Phase I's and Asbestos
Surveys to Buyer for informational purposes only and without
representation or warranty as to the accuracy or completeness
of the contents of such materials except as otherwise provided
in this Section 4.4;
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(B) Buyer will not rely on the Phase I's or Asbestos Surveys
and will conduct its own due diligence on the matters contained
in the documents; and
(C) Buyer is not purchasing the Branch Real Estate,
Improvements and Leasehold Improvements and accepting
assignment of the Leases in reliance upon any representations
or warranties of any kind whatsoever made by the Seller (or any
representatives, agents or employees of the Seller) except
those made or contained in this Agreement.
(ii) Buyer's Environmental Due Diligence. During the Environmental
Due Diligence Period, Buyer shall have the right to conduct
Environmental Assessments of the Subject Assets, and Buyer and Buyer's
representatives, agents and designees will have the right, at reasonable
times and upon reasonable notice to Seller (which notice must describe
the scope of the planned testing and investigations) to enter upon the
Branch Real Estate and Leased Real Estate provided:
(A) Any Environmental Assessment performed by or on behalf of
Buyer shall be conducted pursuant to standard quality
control/quality assurance procedures.
(B) The persons or entities performing such tests shall be
properly licensed and qualified and will have obtained all
appropriate permits for performing such tests.
(C) Prior to any entry involving physical testing, drilling or
other physical disturbance, Buyer will obtain, maintain and
provide Seller, or shall cause any consultant, contractor or
other person entering Branch premises to obtain, maintain and
provide Seller, with proof of comprehensive general liability
insurance in the amount of at least $1,000,000 combined, single
limit coverage, naming Seller as an additional insured and with
coverages reasonably satisfactory to Seller.
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(D) Buyer shall give Seller at least five (5) Business Days'
prior notice of any physical testing or drilling.
(E) Buyer shall schedule any tests outside normal business
hours whenever feasible unless otherwise approved by Seller.
(F) Seller shall have the right of approval (which shall not be
unreasonably withheld or delayed) of any proposed physical
testing or drilling.
(G) Seller shall have the right to have a representative of
Seller accompany Buyer and Buyer's representatives, agents or
designees while they are on the Branch Real Estate or Leased
Real Estate.
(H) Any entry by Buyer, its representatives, agents or designee
shall not unreasonably interfere with Seller's or any tenant's
use of the Subject Assets.
(I) Buyer shall 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. Without limiting the scope of the foregoing,
Buyer also at its sole expense shall repair, replace or
otherwise correct any damages caused by Buyer or its agents,
designees or representatives to the Subject Assets if the
transactions contemplated by this Agreement do not close. Until
this correction is complete, Buyer will take all steps
necessary to ensure that any conditions created by Buyer's
entry will not interfere with the normal operation of the
Branches or create any dangerous, unhealthy, unsightly or noisy
conditions at the Branches. This indemnity provision shall
survive the Closing or any earlier termination of this
Agreement.
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(J) Any groundwater, soil, or other samples taken from the
Subject Assets shall be properly disposed of by Buyer at
Buyer's sole cost and in accordance with all applicable laws.
(K) Any Environmental Assessment conducted by Buyer shall be at
the Buyer's sole expense and Buyer shall provide to Seller a
copy of all results generated by any Environmental Assessment,
including without limitation, any reports or other summaries.
(L) Seller has provided to Buyer copies of the Leases and Buyer
shall comply with any requirements or restrictions contained in
the Leases regarding testing and investigations to be performed
at the Leased Real Estate, including, without limitation, any
requirements of notice to the landlord.
(iii) Notice of Objections. During the Environmental Due Diligence
Period, Buyer may notify Seller in writing of any objections relating to
any aspects of the Subject Assets relating to one or more Branches (the
"Affected Branches") pertaining to physical condition, presence of any
Hazardous Substances, compliance with all applicable Environmental Laws,
any matters disclosed in the Phase I's or Asbestos Surveys, any matters
disclosed by Seller or about which Seller provided representations or
warranties in this Section 4.4, or any matters disclosed in any
Environmental Assessments.
(A) In the event that Buyer fails to so notify Seller of any
such objections, Buyer shall be deemed to have approved such
items.
(B) In the event, however, that Buyer notifies Seller in
writing and within the Environmental Due Diligence Period of
any such objections, the parties will have a period of ten (10)
Business Days to agree upon a resolution of the objection(s).
If the parties cannot agree within such period of ten (10)
Business Days, then within five (5) Business Days after the
expiration of such period either party may
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initiate a proceeding to resolve such objections pursuant to
the procedures set forth in Section 9.4 of this Agreement;
provided, however, that within such five (5) Business Days the
Seller in its sole discretion may, in a case where Buyer has
notified Seller of objections with respect to Branch Real
Estate or Improvements, elect to remove the Branch Real Estate
and Improvements relating to the Affected Branches from the
Assets to be sold and transferred to Buyer, in which event (I)
the consideration payable under Article 3 shall automatically
be adjusted accordingly and (II) commencing on the Closing Date
Buyer shall lease the Branch Real Estate and Improvements
relating to the Affected Branches from Seller for a period of
at least six (6) months, at a rental rate and on terms to be
agreed upon by Buyer and Seller, which rate and terms shall be
commercially reasonable and comparable to those for similar
properties in the vicinities of the Affected Branches, and
provided, further, that if Buyer and Seller do not agree upon
the rental rate or one or more such terms within an additional
ten (10) Business Days after expiration of the five (5)
Business Days referred to above, then the determination of such
rate and/or term(s) shall be immediately submitted to
arbitration pursuant to the procedures set forth in Section 9.4
of this Agreement. In a case where Buyer has notified Seller of
objections with respect to Leased Real Estate or Leasehold
Improvements, then if neither party has initiated a proceeding
to resolve such objections pursuant to the procedures set forth
in Section 9.4 of this Agreement within the five (5) Business
Days referred to in the immediately preceding sentence, then
the Seller in its sole discretion may elect to exercise its
right under the final paragraph of Section 7.2 to exclude the
Affected Branch from the Closing.
(C) If this Agreement is not amended or otherwise modified
pursuant to the provisions of the foregoing Section 4.4(d)
(iii) (B), Buyer shall be deemed to have waived its objections
and this Agreement will continue in full force and effect.
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(e) Mutual Environmental Indemnifications.
(i) Subject to Subsection 4.4(e) (iv) and Article 9 below, if there are
any third party claims against Buyer that arise out of any Hazardous
Substances that became located in, on or under Branch Real Estate during
Seller's ownership of the Branch Real Estate, or in, on or under Leased
Real Estate during the term of Seller's Lease, Seller will (to the
extent the Seller is liable for such Hazardous Substances under any
federal, state or local law pertaining to or concerning Hazardous
Substances) indemnify, defend (by counsel reasonably acceptable to
Buyer), protect and hold Buyer harmless for, from and against any and
all claims, liabilities, penalties, forfeitures, losses or expenses
(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) arising therefrom (to the extent
that any such third party claims are attributable to the portion of the
Hazardous Substances which occurred or were in existence at the Branch
Real Estate or Leased Real Estate on or prior to the Closing Date) in an
amount which (together with any amount for which Seller may become
liable to provide indemnification pursuant to Section 9.2 or otherwise),
shall not exceed the amount of the Initial Base Amount, and provided
that notwithstanding any other provision hereof, Seller shall not be
liable under this Section 4.4(e) (i) for any losses sustained by the
Buyer unless and until the aggregate amount of all losses with respect
to a Branch sustained by the Buyer to be indemnified by the Seller under
this Agreement (including any amount for which Seller may become liable
to provide indemnification pursuant to Section 9.2 or otherwise), shall
exceed $25,000, in which event the Seller shall be liable only for such
losses in excess of $25,000 with respect to that Branch (it being the
intention of the parties that losses sustained by the Buyer with respect
to one Branch shall not be combined with losses sustained with respect
to another Branch to satisfy such minimum $25,000 amount)
(ii) Subject to Subsection 4.4(e) (iv) and Article 9 below, if there are
any third party claims against
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Seller that arise out of any Hazardous Substances that became located
in, on or under the Subject Assets at any time after the Closing, Buyer
will indemnify, defend (by counsel reasonably acceptable to Seller),
protect and hold Seller harmless for, from and against any and all
claims, liabilities, penalties, forfeitures, losses or expenses
(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) arising therefrom, provided that
notwithstanding any other provision hereof, Buyer shall not be liable
under this Section 4.4(e) (ii) for any losses sustained by the Seller
unless and until the aggregate amount of all losses with respect to a
Branch sustained by the Seller to be indemnified by the Buyer under this
Agreement (including any amount for which Buyer may become liable to
provide indemnification pursuant to Section 9.3 or otherwise), shall
exceed $25,000, in which event the Buyer shall be liable only for such
losses in excess of $25,000 with respect to that Branch (it being the
intention of the parties that losses sustained by the Seller with
respect to one Branch shall not be combined with losses sustained with
respect to another Branch to satisfy such minimum $25,000 amount)
(iii) As used in this Subsection 4.4(e), "third party claims" are
defined as any claims or rights of recovery by any person or entity
(including governmental agencies):
(A) which result from injury, damage or loss to or of any
person or property;
(B) for cost recovery, removal or remedial action; or
(C) third party claims will also include any costs paid or
payable by either party for damage, loss, injury,
investigation, removal, remediation or other liability in
response to any third party claim or in anticipation of any
enforcement or remedial action undertaken or threatened by any
governmental agency or private party.
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(iv) Nothing in this Section 4.4(e) is meant to diminish any party's
rights or obligations under any federal, state or local law pertaining
to or concerning Hazardous Substances; but Seller will not be liable to
Buyer under this Agreement, and Buyer hereby releases Seller from any
and all liability under any such law, for any third party claims which
are attributable to any environmental condition which:
(A) was described or referred to in the Phase I's, Asbestos
Surveys or any Environmental Assessments obtained or conducted
by Buyer;
(B) was reasonably discoverable by prudent investigation during
the Environmental Due Diligence Period; or
(C) was otherwise disclosed by Seller to Buyer or discovered by
Buyer at any time prior to the Closing.
(v) The above release includes claims of which Buyer is presently
unaware or which Buyer does not presently suspect to exist which, if
known by Buyer, would materially affect Buyer's release(s) to Seller.
Buyer expressly waives and relinquishes any and all rights which it may
have under the provisions of Section 1542 of the California Civil Code,
to the extent applicable, which Section reads as follows:
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT
KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE
RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS
SETTLEMENT WITH THE DEBTOR".
It is understood and agreed that the purchase price has been adjusted by
prior negotiations to reflect that all of the Subject Assets and the
Furniture Fixtures and Equipment are sold by Seller and purchased by
Buyer and Buyer is accepting assignment of the Leases subject to the
foregoing. It is not contemplated that the purchase price will be
increased if costs to Buyer associated with the Subject Assets, the
Furniture Fixtures and Equipment and the Leases
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prove to be less than expected nor will the purchase price be reduced if
the Buyer's plan for the same leads to higher cost protections. The sole
remedy of the Buyer will be to exercise its rights under Section 4.4(d)
prior to the end of the Environmental Due Diligence Period.
Buyer's Initials ______________ Seller's Initials ______________
4.5 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, and subject
to the provisions of Section 4.4 of this Agreement, which shall exclusively
govern the rights and obligations of the parties with regard to Hazardous
Substances.
4.6 Clearing Items. From the Closing Date and for one hundred eighty
(180) calendar days thereafter, items drawn on Transaction Accounts assumed by
the Buyer may continue to be presented to the Seller. The Seller will make
provisional settlement to the presenting institution and will present such items
to the Buyer within the Seller's midnight deadline. For the first ninety (90)
calendar days following the Closing Date, the Seller shall perform its
obligations under the first two sentences of this Section 4.6 at no cost to the
Buyer. For the remaining ninety (90) calendar day period, the Buyer shall pay
the Seller $0.50 for each item so processed. After one hundred eighty (180)
calendar days from the Closing Date, the Seller shall return to the sender any
items presented. Upon timely presentation to the Buyer, the Buyer will assume
all responsibility for such items (except for such items which have not been
handled by the Seller in accordance with applicable law or regulation, or with
ordinary care), including but not limited to determining whether to honor or
dishonor such items and giving any required notification for the return of large
items.
4.7 ▇▇▇ Deposits and ▇▇▇▇▇ Accounts. The Seller will deliver to the
Buyer, on the Closing Date, copies of the Seller's documents for each ▇▇▇
Deposit and ▇▇▇▇▇ Account which is included in the Assumed Deposits. The Seller
will prepare and file all reports to government authorities required to be
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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.
4.8 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 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.
4.9 Eminent Domain or Taking. If proceedings under a power of eminent
domain relating to a specific Branch or any part thereof (the "Affected Branch")
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 Affected Branch, Buyer may elect to terminate this Agreement
with respect to such Affected Branch by notice in writing sent within ten (10)
calendar days of Seller's written notice to Buyer, in which case neither party
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will have any further obligation to or rights against the other with respect to
the Affected 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 Affected Branch, or if Buyer does not elect to terminate this
Agreement as to the Affected Branch, this transaction will be consummated as
described herein, and, subject to the Lease, if any, or other encumbrances, if
any, relating to the Affected Branch, any award or settlement payable with
respect to such proceeding will be paid or assigned to Buyer on the Closing
Date.
(c) If the Closing contemplated by this Agreement is not consummated for
any reason, Buyer will have no claim to any condemnation award or settlement
with respect to the Affected Branch.
4.10 Damage or Destruction. Except as provided in this Section 4.10,
prior to the Closing Date, as between Seller and Buyer the entire risk of loss
or damage by earthquake, flood, landslide, fire or other casualty is borne and
assumed by Seller. If, prior to the Closing Date, any part of the Improvements
or Leasehold Improvements at a specific Branch (the "Affected Improvements") is
damaged or destroyed by earthquake, flood, landslide, fire or other casualty,
Seller will promptly inform Buyer of such fact in writing and advise Buyer as to
the extent of the damage and whether it is, in Seller's reasonable opinion,
"material".
(a) If Seller determines that such damage or destruction is "material",
Buyer has the option to terminate this Agreement with respect to such Branch
(the "Affected Branch") upon written notice to the Seller given not later than
ten (10) calendar days after receipt of Seller's written notice to Buyer
advising of such damage or destruction.
(b) For purposes of this Section 4.10, "material" shall mean any damage
or destruction to the Affected Improvements where the cost of repair or
replacement is estimated to be (i) in the case of damage or destruction to
Improvements, more than twenty-five (25) percent of the Market Value of the
Branch Real Estate and Improvements, or (ii) in the case of damage or
destruction to Leasehold Improvements' more than twenty-five (25) percent of the
amount indicated in Section 3.1 and
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Schedule 3.1 for the Leasehold Improvements at the Affected Branch ("Leasehold
Improvements Value"), and that in either case will take more than sixty (60)
calendar days to repair.
(c) If this Agreement is so terminated, neither party will have any
further obligation to or rights against the other with respect to the Affected
Branch except any rights or obligations of either party which are expressly
stated to survive termination of this Agreement.
(d) Subject to the Lease, if any, or other encumbrances, if any, if the
Buyer does not elect to terminate this Agreement as to the Affected Branch, or
if the casualty is not material, Seller shall either (i) reduce the Market Value
of the Branch Real Estate or the Leasehold Improvements Value at the Affected
Branch, as the case may be, by the value reasonably estimated by Seller to
repair or restore the damaged portion of the Affected Improvements, less any
sums expended by Seller to make emergency repairs to the Affected Improvements
or (ii) repair or restore the damaged portion of the Affected Improvements, and
in either case this transaction will close pursuant to the terms of this
Agreement, and the Buyer will accept the Affected Branch as is, where is,
without recourse, with all faults and with no warranties other than as expressly
provided in Section 5.1 of this Agreement, and subject to the provisions of
Section 4.4 of this Agreement, which shall exclusively govern the rights and
obligations of the parties with regard to Hazardous Substances.
(e) If the damage is not material, Seller's notice to Buyer of the
damage or destruction will also set forth the reduced Market Value of the Branch
Real Estate or the reduced Leasehold Improvements Value at the Affected Branch,
as the case may be, and Seller's allocation of value to the damaged portion of
the Affected Improvements. If Buyer does not accept Seller's reduced valuation,
Buyer's sole remedy will be to submit the issue to arbitration pursuant to
Section 9.4 hereof.
(f) Whether or not the sale of the Affected Branch is consummated
hereunder, Buyer shall have no rights to insurance claims or proceeds in respect
of damage or destruction to the Affected Improvements occurring prior to the
Closing Date.
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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), and subject to Section 4.4 (a):
(a) The Seller is a national banking association, duly organized and in
good standing under the laws of the United States;
(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 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
association 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 Branches (other than those giving
rise to the Assets and the Liabilities), including without limitation equipment
leases and service and maintenance contracts,
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consulting contracts, agency agreements and licensing agreements; provided,
however, that equipment leases and service and maintenance contracts which the
Seller does not believe are assignable are not listed;
(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) 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) Schedule 2.2(e) contains an accurate and complete list of all
Leases, if any. True and correct copies of all Leases referred to in such
Schedule have been provided to Buyer.
5.2 Buyer's Representations and Warranties. The Buyer represents and
warrants to the Seller that, as of the date of this Agreement, and subject to
Section 4.4 (a):
(a) The Buyer is a national banking association, duly organized and in
good standing under the laws of the United States;
(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
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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) 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 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
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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;
(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;
(i) The Buyer has available sufficient cash or other liquid assets or
financing pursuant to binding agreements or commitments which may be used to
fund the transactions contemplated hereby and its ability to consummate such
transactions is not contingent on raising any equity capital, obtaining specific
financing therefor, consent of any lender or any other matter; and
(j) Buyer acknowledges and is aware of the disclosures made by Seller
with respect to the Branch Real Estate and set forth in Schedule 5.2(j) attached
hereto.
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 Branches.
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6.2 Unclaimed Property. With respect to safe deposit boxes that have
been opened by the Seller and whose contents have been inventoried and are being
held by the Seller in safekeeping in preparation for escheat to the State of
California, the Seller shall remove any and all such contents from the Branches
prior to the Closing Date.
6.3 Head Office Accounts. Schedule 6.3 sets forth certain Accounts at
the Branches which have been designated by the Seller as "Head Office Accounts."
The Buyer and the Seller understand and agree that the Seller may remove from
the Branches prior to the Closing Date any and all Head Office Accounts and
deposits of the types described in the proviso in Section 2.3(a) (iii) and any
Head Office Accounts and any such deposits so removed shall not be included in
the Assumed Deposits.
6.4 Limitation of Warranties. Except as may be expressly represented or
warranted by Seller in Section 5.1 of this Agreement, and subject to the
provisions of Section 4.4 of this Agreement which shall exclusively govern the
rights and obligations of the parties with regard to Hazardous Substances,
Seller makes no representation or warranty whatsoever with regard to any Asset,
any Liability or the business or operation of any of the Branches, it being
expressly understood that such Assets and Liabilities are being transferred AS
IS, WHERE IS, WITHOUT RECOURSE, WITH ALL FAULTS AND WITH NO WARRANTIES OTHER
THAN AS EXPRESSLY PROVIDED IN SECTION 5.1 OF THIS AGREEMENT. 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, subject to Section 4.4 of this Agreement. Notwithstanding any
other provision of this Agreement, Buyer and Seller understand and agree that
Seller is making, and shall make, no representations or warranties with respect
to title to the Branch Real Estate other than those, if any, contained in the
grant deed the form of which is attached hereto as Schedule 2.2(b) (i) (A).
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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 Branches as it has
deemed appropriate;
(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 Seller, or on the
consummation of the transactions contemplated hereby; and
(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
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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
(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.
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
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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; and
(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 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 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.
Notwithstanding any other provision of this Agreement, in the event
that, at the Closing, there shall be a failure of any condition specified in
this Section 7.2 or elsewhere in this Agreement, including without limitation
any failure of condition specified in Section 2.2(d), 2.2(e), 4.3, 4.4, 4.9 or
4.10 to the obligations of the Buyer in respect of the acquisition of any
specific Branch or Branches, the Buyer nevertheless shall be obligated to
consummate the transactions contemplated by this Agreement upon the Closing
Date, and the Seller may, upon written notice to the Buyer, exclude from the
Closing the Branch or Branches in respect of which the failure of condition
shall exist, in which case, appropriate adjustment shall be made in the
consideration payable pursuant to Article 3, the Schedules hereto, the Financial
Statements and the other documents to be delivered pursuant hereto so as to duly
reflect the deletion of such Branch or Branches from the Closing.
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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; and
(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 (i) termination pursuant to this Section 8.1(d) shall not relieve
the breaching party of liability for such breach or otherwise and (ii) this
Section 8.1 (d) shall not under any circumstances provide the Buyer with a basis
for termination due to any actual or alleged breach relating to Hazardous
Substances, Buyer's sole remedies with respect to Hazardous Substances being
contained in Section 4.4.
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, subject to Section 4.4,
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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.
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 2.4, 3.2(h), 4.4(e) (ii), 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,
provided however, that the provisions of Section 4.4 shall exclusively govern
the rights and obligations of the Seller and Buyer with regard to Hazardous
Substances.
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
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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 Branches or their
business and properties 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 or resulting from defects in title to the Branch Real
Estate; (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). Any direct claim by the Buyer against the Seller, as distinguished from
a claim against the Buyer by a third party, shall be settled by arbitration
pursuant to Section 9.4. 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 Buyers 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 Branches or their business and properties 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
officers certificate. Any direct claim by the Seller against the Buyer, as
distinguished from a claim against the Seller by a third party, shall be settled
by arbitration
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pursuant to Section 9.4. 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 Arbitration of Disputes. (A) ANY CONTROVERSY OR CLAIM ARISING OUT OF
OR RELATING TO THIS AGREEMENT OR ANY AGREEMENTS OR INSTRUMENTS RELATING HERETO
OR DELIVERED IN CONNECTION HEREWITH, INCLUDING, BUT NOT LIMITED TO A CLAIM BASED
ON OR ARISING FROM AN ALLEGED TORT WILL, AT THE REQUEST OF ANY PARTY, BE
DETERMINED BY ARBITRATION IN ACCORDANCE WITH THE FEDERAL ARBITRATION ACT (9
U.S.C. SECTION 1 ET SEQ.) UNDER THE AUSPICES AND RULES OF THE AMERICAN
ARBITRATION ASSOCIATION ("AAA"). THE AAA WILL BE INSTRUCTED BY EITHER OR BOTH
PARTIES TO PREPARE A LIST OF THREE (3) JUDGES WHO HAVE RETIRED FROM THE SUPERIOR
COURT OF THE STATE OF CALIFORNIA, A HIGHER CALIFORNIA COURT OR ANY FEDERAL
COURT. WITHIN TEN (10) CALENDAR DAYS OF RECEIPT OF THE LIST, EACH PARTY MAY
STRIKE ONE (l) NAME FROM THE LIST. THE AAA WILL THEN APPOINT THE ARBITRATOR FROM
THE NAME(S) REMAINING ON THE LIST. THE ARBITRATION WILL BE CONDUCTED IN SAN
FRANCISCO, LOS ANGELES OR SAN DIEGO, WHICHEVER IS THE CLOSEST CITY TO THE NEXUS
OF THE DISPUTE. ANY CONTROVERSY IN INTERPRETATION OR ENFORCEMENT OF THIS
PROVISION OR WHETHER A DISPUTE IS ARBITRABLE, WILL BE DETERMINED BY THE
ARBITRATOR. JUDGMENT UPON THE AWARD RENDERED BY THE ARBITRATOR MAY BE ENTERED IN
ANY COURT HAVING JURISDICTION. THE INSTITUTION AND MAINTENANCE OF AN ACTION FOR
JUDICIAL RELIEF OR IN PURSUIT OF AN ANCILLARY REMEDY DOES NOT CONSTITUTE A
WAIVER OF THE RIGHT OF ANY PARTY, INCLUDING THE PLAINTIFF, TO SUBMIT THE
CONTROVERSY OR CLAIM TO ARBITRATION.
(B) IN ANY ARBITRATION PROCEEDING, THE ARBITRATOR IS AUTHORIZED TO
APPORTION COSTS AND EXPENSES, INCLUDING INVESTIGATION, LEGAL AND OTHER EXPENSES,
WHICH WILL INCLUDE, IF APPLICABLE, A REASONABLE ESTIMATE OF ALLOCATED COSTS AND
EXPENSE OF IN-HOUSE LEGAL COUNSEL AND LEGAL STAFF. SUCH COSTS AND EXPENSES ARE
TO BE AWARDED ONLY AFTER THE CONCLUSION OF THE ARBITRATION AND WILL NOT BE
ADVANCED DURING THE COURSE OF SUCH ARBITRATION.
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NOTICE: BY INITIALING IN THE SPACE BELOW YOU ARE AGREEING TO HAVE ANY DISPUTE
ARISING OUT OF THE MATTERS INCLUDED IN THE "ARBITRATION" PROVISION DECIDED BY
NEUTRAL ARBITRATION AS PROVIDED BY CALIFORNIA LAW AND YOU ARE GIVING UP ANY
RIGHTS YOU MIGHT POSSESS TO HAVE THE DISPUTE LITIGATED IN A COURT OR BY JURY
TRIAL. BY INITIALING IN THE SPACE BELOW YOU ARE GIVING UP YOUR JUDICIAL RIGHTS
TO DISCOVERY AND APPEAL UNLESS SUCH RIGHTS ARE SPECIFICALLY INCLUDED IN THE
"ARBITRATION OF DISPUTES" PROVISION. IF YOU REFUSE TO SUBMIT TO ARBITRATION
AFTER AGREEING TO THIS PROVISION, YOU MAY BE COMPELLED TO ARBITRATE UNDER THE
AUTHORITY OF THE CALIFORNIA CODE OF CIVIL PROCEDURE. YOUR AGREEMENT TO THIS
ARBITRATION PROVISION IS VOLUNTARY.
WE HAVE READ AND UNDERSTAND THE FOREGOING AND AGREE TO SUBMIT DISPUTES ARISING
OUT OF THE MATTERS INCLUDED IN THE "ARBITRATION OF DISPUTES" PROVISION TO
NEUTRAL ARBITRATION.
BUYER'S INITIALS ________________ SELLER'S INITIALS _______________
9.5 Limit on Indemnities. (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 a Branch unless and
until the aggregate amount of all such losses sustained by the indemnified party
with respect to that Branch (including any amount for which the indemnifying
party may become liable to provide indemnification pursuant to Section 4.4),
shall exceed $25,000, in which event the indemnifying party shall be liable only
for such losses in excess of $25,000 (it being the intention of the parties that
losses sustained by a party with respect to one Branch shall not be combined
with losses sustained with respect to another Branch to satisfy such minimum
$25,000 amount). The minimum $25,000 amount shall not apply to amounts which one
party may be required to pay to the other under Sections 2.4, 3.2, 4.1(g),
4.1(h), 4.6 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
Section 4.4 or any other basis exceed the amount of the Initial Base Amount. 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
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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, including
but not limited to the assignment of the Leases. On the Closing Date, all real
and personal property taxes and current installments of special assessments
levied or assessed with respect to the Branch Real Estate, the Improvements, the
Leasehold Improvements and 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.
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ARTICLE 11
Miscellaneous
11.1 Public Notice. All written notices to third parties, including
customers of the Branches, all oral or written notices or general communications
to employees of the Branches, 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.
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:
BankAmerica Corporation
Corporate Development Department #13262
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Director of Corporate Development
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
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With copies to:
Bank of America NT&SA
Legal Department #3017
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Legal Department - Corporate Advice
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
And to:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Buyer:
First National Bank of Central California
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
Executive Vice President and Chief
Financial Officer
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
And to:
First National Bank of Central California
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
Vice President and Controller
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
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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.
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 by the Seller as of March 24, 1997 (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
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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 and any information developed in connection with any
Environmental Assessments that are performed by or on behalf of the Buyer
(including without limitation any reports or sampling results and analysis).
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, or (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. 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,
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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.
11.12 Third Party Rights. Other than the provisions of Section 2.4,
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.
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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 consitute one and the same instrument.
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:
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇
Its Vice President
BUYER:
FIRST NATIONAL BANK OF CENTRAL
CALIFORNIA
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
Its Executive Vice President
and Chief Financial Officer
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