EXHIBIT 2.1
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PURCHASE AND ASSUMPTION AGREEMENT
BY AND BETWEEN
U.S. BANK NATIONAL ASSOCIATION
AND
BAY VIEW BANK
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DATED AS OF JULY 22, 2002
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PURCHASE AND ASSUMPTION AGREEMENT
TABLE OF CONTENTS
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ARTICLE I -- CERTAIN DEFINITIONS.............................................................1
Section 1.1 Certain Definitions..................................................1
ARTICLE II -- TRANSFER OF ASSETS AND LIABILITIES............................................11
Section 2.1 Transferred Assets..................................................11
Section 2.2 Purchase Price......................................................13
Section 2.3 Proration; Other Closing Date Adjustments...........................16
Section 2.4 Title to Real Property..............................................17
Section 2.5 Environmental Matters...............................................18
Section 2.6 Assumed Contracts...................................................20
Section 2.7 Books and Records...................................................20
Section 2.8 Determination of Defect Reduction Amounts...........................21
ARTICLE III -- CLOSING AND EFFECTIVE TIME...................................................22
Section 3.1 Effective Time......................................................22
Section 3.2 Closing.............................................................22
Section 3.3 Post Closing Adjustments............................................24
ARTICLE IV -- TRANSITIONAL MATTERS..........................................................26
Section 4.1 General.............................................................26
Section 4.2 Notices to Customers and Others.....................................27
Section 4.3 Direct Deposits.....................................................27
Section 4.4 Direct Debit........................................................28
Section 4.5 Interest Reporting and Withholding..................................28
Section 4.6 ATM/Debit Cards.....................................................29
Section 4.7 Leasing of Personal and Real Property...............................29
Section 4.8 Notices to Obligors on Purchased Loans..............................29
ARTICLE V -- INDEMNIFICATION................................................................30
Section 5.1 Seller's Indemnification of Purchaser...............................30
Section 5.2 Purchaser's Indemnification of Seller...............................30
Section 5.3 Claims for Indemnity................................................30
Section 5.4 Limitations on Indemnification......................................32
Section 5.5 Treatment of Indemnification Payments...............................32
ARTICLE VI -- REPRESENTATIONS AND WARRANTIES OF SELLERS.....................................32
Section 6.1 Corporate Organization; Corporate Authority.........................32
Section 6.2 No Violation........................................................33
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Section 6.3 Enforceable Agreement...............................................33
Section 6.4 No Brokers..........................................................33
Section 6.5 Personal Property...................................................33
Section 6.6 Real Property and the Leased Premises...............................34
Section 6.7 Condition of Property...............................................35
Section 6.8 Labor Matters; Employees............................................35
Section 6.9 Certain Contracts...................................................36
Section 6.10 Purchased Loans.....................................................36
Section 6.11 Deposit Liabilities.................................................37
Section 6.12 Books, Records, Documentation, Etc..................................37
Section 6.13 Litigation and Regulatory Proceedings...............................37
Section 6.14 Tax Matters.........................................................37
Section 6.15 Consents and Approvals..............................................38
Section 6.16 Environmental Laws..................................................38
Section 6.17 Community Reinvestment Compliance...................................39
Section 6.18 Deposit and Loan Data...............................................39
Section 6.19 Compliance with Laws................................................39
Section 6.20 Absence of Certain Changes..........................................39
Section 6.21 Solvency............................................................39
Section 6.22 Financing...........................................................40
Section 6.23 Opinion of Financial Advisor........................................40
ARTICLE VII -- REPRESENTATIONS AND WARRANTIES OF PURCHASER..................................40
Section 7.1 Corporate Organization; Corporate Authority.........................40
Section 7.2 No Violation........................................................40
Section 7.3 Enforceable Agreement...............................................41
Section 7.4 Consents and Approvals..............................................41
Section 7.5 Financing...........................................................41
Section 7.6 No Brokers..........................................................41
Section 7.7 Litigation and Regulatory Proceedings...............................41
Section 7.8 Community Reinvestment Compliance...................................42
ARTICLE VIII -- OBLIGATIONS OF PARTIES PRIOR TO AND AFTER EFFECTIVE TIME....................42
Section 8.1 Full Access.........................................................42
Section 8.2 Application for Approval............................................43
Section 8.3 Conduct of Business.................................................43
Section 8.4 Solicitation of Customers by Purchaser Prior to Closing.............45
Section 8.5 No Solicitation by Seller and Its Affiliates........................45
Section 8.6 Efforts to Consummate; Further Assurances...........................46
Section 8.7 Fees and Expenses...................................................46
Section 8.8 Third Party Consents................................................47
Section 8.9 Insurance...........................................................47
Section 8.10 Public Announcements................................................47
Section 8.11 Tax Reporting.......................................................48
Section 8.12 Advice of Changes...................................................48
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Section 8.13 Deposits............................................................48
Section 8.14 Non-Solicitation of Transactions....................................48
Section 8.15 Stockholder Approval................................................48
Section 8.16 Employee Benefit Matters............................................49
Section 8.17 Physical Damage to Real Property....................................50
Section 8.18 Solvency Matters....................................................51
Section 8.19 Actions With Respect to ▇▇▇ and ▇▇▇▇▇ Plan Deposit
Liabilities.........................................................51
Section 8.20 Letters of Credit...................................................52
ARTICLE IX -- CONDITIONS TO PURCHASER'S OBLIGATIONS.........................................53
Section 9.1 Representations and Warranties True.................................53
Section 9.2 Obligations Performed...............................................54
Section 9.3 Delivery of Documents...............................................54
Section 9.4 Approvals...........................................................54
Section 9.5 No Seller Material Adverse Effect...................................54
Section 9.6 Financing...........................................................54
Section 9.7 Solvency Opinion....................................................54
Section 9.8 Landlord Consents...................................................54
ARTICLE X -- CONDITIONS TO SELLER'S OBLIGATIONS.............................................54
Section 10.1 Representations and Warranties True.................................55
Section 10.2 Obligations Performed...............................................55
Section 10.3 Delivery of Documents...............................................55
Section 10.4 Approvals...........................................................55
Section 10.5 No Purchaser Material Adverse Effect................................55
ARTICLE XI -- TERMINATION...................................................................55
Section 11.1 Methods of Termination..............................................55
Section 11.2 Procedure Upon Termination..........................................56
Section 11.3 Certain Obligations upon Termination................................57
ARTICLE XII -- MISCELLANEOUS PROVISIONS.....................................................58
Section 12.1 Amendment and Modification; Waiver..................................58
Section 12.2 Survival............................................................58
Section 12.3 Assignment..........................................................59
Section 12.4 Confidentiality.....................................................59
Section 12.5 Addresses for Notices, Etc..........................................59
Section 12.6 Counterparts........................................................60
Section 12.7 Governing Law.......................................................60
Section 12.8 Entire Agreement....................................................60
Section 12.9 No Third Party Beneficiaries........................................60
Section 12.10 Calculation of Dates and Deadlines..................................61
Section 12.11 Consent to Jurisdiction; Waiver of Jury Trial.......................61
Section 12.12 Severability........................................................61
Section 12.13 Specific Performance................................................61
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THIS PURCHASE AND ASSUMPTION AGREEMENT (this "AGREEMENT") is entered
into as of July 22, 2002, by and between U.S. BANK NATIONAL ASSOCIATION, a
national bank organized under the laws of the United States of America
("PURCHASER"), and BAY VIEW BANK, a national bank organized under the laws of
the United States of America ("SELLER").
W I T N E S S E T H:
WHEREAS, Seller wishes to sell certain of its assets, deposits, and
other specified liabilities to Purchaser upon the terms and subject to the
conditions set forth herein;
WHEREAS, Purchaser wishes to purchase such assets and assume such
deposits and such certain specified liabilities upon the terms and subject to
the conditions set forth herein;
WHEREAS, Seller has entered into a definitive agreement with Washington
Mutual Bank, FA with respect to the sale of certain multi-family and commercial
loan portfolios (the "OTHER TRANSACTION");
WHEREAS, concurrently with the execution and delivery hereof, and as a
condition to Purchaser's willingness to enter into this Agreement, Bay View
Capital Corporation, a corporation organized under the laws of the State of
Delaware and holder of all of the issued and outstanding shares of capital stock
of Seller ("PARENT"), has agreed fully and unconditionally to guarantee the
representations, warranties, covenants, agreements and other obligations of
Seller herein (the "GUARANTEE"), which Guarantee is set forth as Exhibit A
hereto; and
WHEREAS, in order to facilitate an orderly transition, Seller and
Purchaser are, simultaneously herewith, entering into an agreement under which
Seller will provide certain deposit operations, cash management and loan
accounting services to Purchaser for the consideration specified therein until
May 14, 2003, subject to possible extension as provided therein, which agreement
is set forth as Exhibit B hereto (the "TRANSITION AND SERVICES AGREEMENT");
NOW, THEREFORE, in consideration of the premises and mutual agreements
hereinafter set forth and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and intending to be legally bound
hereby, Seller and Purchaser agree as follows:
ARTICLE I
CERTAIN DEFINITIONS
SECTION 1.1 CERTAIN DEFINITIONS.
(a) The terms set forth below are used herein with the following
meanings:
"ACH" shall have the meaning set forth in Section 4.3.
"ACQUISITION PROPOSAL" shall have the meaning set forth in Section
11.3(c).
"ADJUSTMENT PAYMENT DATE" shall have the meaning set forth in Section
3.3(c).
"AFFILIATE" shall mean, with respect to any Person, any other Person
directly or indirectly controlled by, controlling or under common control with
such first Person. For the purposes of this definition, "control" means the
power to direct the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by contract or
otherwise, and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
"AGREEMENT" shall have the meaning set forth in the preamble.
"APPRAISER" shall have the meaning set forth in Section 8.18.
"ASSIGNMENT AND ASSUMPTION AGREEMENT" shall have the meaning set forth
in Section 3.2(b)(3).
"ASSIGNMENT AND ASSUMPTION OF LEASES" shall have the meaning set forth
in Section 3.2(b)(4).
"ASSIGNMENT AND ASSUMPTION OF TENANT LEASE" shall have the meaning set
forth in Section 3.2(b)(5).
"ASSUMED CONTRACTS" shall have the meaning set forth in Section 2.6.
"ATMS" shall have the meaning set forth in Section 2.1(a)(2).
"ATM LEASES" shall have the meaning set forth in Section 2.1(a)(2).
"AVERAGE DEPOSIT BALANCE" shall mean the average of the daily balances
of the Deposits (not including (a) Deposits that would become subject to escheat
pursuant to applicable law in the calendar year in which the Closing occurs in
the absence of further contact by the holder of such Deposit or its
representative, (b) collateralized Deposits, (c) municipal Deposits, (d)
Brokered Deposits, (e) Certificates of Deposit that are in denominations of
$100,000 or more, except for those Certificates of Deposit set forth on Schedule
1.1(a), an update to which schedule shall be delivered to Purchaser by Seller
not less than two (2) Business Days prior to the Closing Date, provided that
such Schedule shall not include any Certificates of Deposit that are Brokered
Deposits, and (f) the Excluded ▇▇▇/▇▇▇▇▇ Plan Deposits) for the thirty (30)
calendar days ending the Business Day before the Closing Date.
"BENEFIT PLANS" shall have the meaning set forth in Section 6.8(b).
"BRANCH LEASES" shall have the meaning set forth in Section 2.1(a)(2).
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"BRANCH BANKING OPERATIONS" shall mean the business of Seller conducted
through the Branches relating to Deposits and other Transferred Liabilities and
Transferred Assets.
"BRANCH EMPLOYEES" shall have the meaning set forth in Section 8.16(b).
"BRANCHES" shall have the meaning set forth in Section 2.1(a)(2).
"BROKERED DEPOSITS" shall mean (a) "brokered deposits" within the
meaning of 12 C.F.R. Section 337.6 and (b) deposits that are of the type having
risk characteristics similar to "brokered deposits" as contemplated by the Joint
Agency Advisory on Brokered and Rate Sensitive Deposits, dated May 11, 2001, of
the Board of Governors of the Federal Reserve System, FDIC, OCC and Office of
Thrift Supervision.
"BUSINESS DAY" shall mean any day other than a Saturday, a Sunday or a
day on which banks in the States of California or Minnesota are authorized or
required to close for regular banking business.
"CLAIM LIMITATION ANNIVERSARY" shall have the meaning set forth in
Section 5.3(a).
"CLOSING" shall have the meaning set forth in Section 3.1.
"CLOSING DATE" shall have the meaning set forth in Section 3.1.
"CLOSING STATEMENT" shall have the meaning set forth in Section
3.2(b)(9).
"COBRA" shall mean the continuation coverage requirements of Section 601
et seq. of ERISA and Section 4980B of the Code.
"CODE" shall mean the Internal Revenue Code of 1986, as amended.
"COINS AND CURRENCY" shall mean all ▇▇▇▇▇ cash, foreign currency, vault
cash, teller cash, ATM cash, travelers' checks and prepaid postage located at
the Real Property or the Leased Premises as of the Effective Time.
"COMPARABLE EMPLOYMENT" shall mean a position at the same base pay with
similar, but not necessarily identical, duties and responsibilities (e.g.,
reporting relationships may differ) and a workplace that is not more than
twenty-five (25) highway miles (one-way) from the Employee's current workplace.
"CONFIDENTIALITY AGREEMENT" shall mean the Confidentiality Agreement,
dated as of February 20, 2002, between Credit Suisse First Boston Corporation,
solely as representative of Parent, and Purchaser.
"CONVERSION" shall have the meaning set forth in Section 4.1(a).
"CRA" shall mean the Community Reinvestment Act of 1977 and the
regulations promulgated thereunder, as amended.
"DEFECT" shall have the meaning set forth in Section 2.4(c).
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"DEFECT REDUCTION AMOUNT" shall have the meaning set forth in Section
2.8.
"DEPOSIT LIABILITIES" shall mean all of Seller's rights, duties,
obligations and liabilities relating to the Deposits (including accrued but
unpaid or uncredited interest thereon and uncollected funds related thereto),
but excluding (a) deposit liabilities with respect to Deposits of Affiliates of
Seller, (b) deposit liabilities that, by law or contract, cannot either be
transferred by Seller or assumed by Purchaser, including the Excluded ▇▇▇/▇▇▇▇▇
Plan Deposits, and (c) those Brokered Deposits set forth on Schedule 1.1(b),
which Schedule 1.1(b) may be supplemented from time to time following the date
hereof upon mutual agreement of the parties.
"DEPOSITS" shall mean all deposits (as defined in 12 U.S.C. Section
1813(l)) booked at a Branch and made with Seller as of the Effective Time or
otherwise relating to the Branch Banking Operations and assumed by Purchaser
hereunder, including consumer, business and commercial and private client (a)
demand deposits, (b) interest checking accounts, (c) money market accounts, (d)
savings deposits, (e) time deposits, (f) time deposits that are in denominations
of $100,000 or more, (g) deposits relating to debit cards and ATM cards, (h) ▇▇▇
deposit liabilities, and (i) ▇▇▇▇▇ Plan deposit liabilities, including in each
case all accrued but unpaid or uncredited interest and fees thereon and
uncollected funds related thereto.
"EFFECTIVE TIME" shall have the meaning set forth in Section 3.1.
"EMPLOYEE" shall mean each individual principally employed by Seller or
any of its Affiliates in connection with the Branch Banking Operations.
"ENVIRONMENTAL DEFECT NOTICE" shall have the meaning set forth in
Section 2.5(c).
"ENVIRONMENTAL LAW" shall mean any federal, state, foreign or local law,
statute, ordinance, rule, regulation, code, license, permit, authorization,
approval, consent, common law, legal doctrine, order, judgment, decree,
injunction, requirement or agreement with any Governmental Authority, (a)
relating to the protection, preservation or restoration of the environment
(including air, water, vapor, surface water, groundwater, drinking water supply,
surface land, subsurface land, plant and animal life or any other natural
resource), or to human health or safety, or (b) the exposure to, or the use,
storage, recycling, treatment, generation, transportation, processing, handling,
labeling, production, release or disposal of Hazardous Substances, in each case
as amended, from time to time, including the following U.S. federal
environmental laws: the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, the Superfund Amendment and Reauthorization Act, the
Water Pollution Control Act of 1972, the Clean Air Act, the Clean Water Act, the
Resource Conservation and Recovery Act of 1976, the Solid Waste Disposal Act,
the Toxic Substances Control Act and Insecticide, Fungicide and Rodenticide Act,
each as amended.
"ENVIRONMENTAL LIABILITIES" means any action, lawsuit, claim,
proceeding, investigation, demand, response, damages (including natural
resources damages), fine, penalty, judgment, award, settlement, loss, cost or
expense (including any financial responsibility for any cleanup costs or
corrective actions, including any investigation, cleanup, removal, containment,
remedial or other response action, whether or not such action has been required
or requested by any Governmental Authority) (including reasonable attorneys' and
consultants' fees) relating to
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or arising out of or under (a) any Environmental Law, (b) the release or
threatened release of any Hazardous Substances, or (c) any other environmental,
health, or safety matters or conditions (including on-site and off-site release
or contamination and matters relating to occupational safety and health). For
purposes of this definition, the terms "removal," "remedial," "release" and
"response action" shall include those activities covered by the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended.
"EXCLUDED ASSETS" shall have the meaning set forth in Section 2.1(b).
"EXCLUDED ▇▇▇/▇▇▇▇▇ PLAN DEPOSITS" shall have the meaning set forth in
Section 8.19(a).
"EXCLUDED LIABILITIES" shall have the meaning set forth in Section
2.2(c).
"EXISTING ENVIRONMENTAL REPORTS" shall have the meaning set forth in
Section 2.5(a).
"FDIC" shall mean the Federal Deposit Insurance Corporation.
"FEDERAL FUNDS RATE" shall mean the average of the high and low rates
quoted for Federal Funds in the Money Rates column of The Wall Street Journal
during the period the rate is applied, adjusted as such average may increase or
decrease during such period.
"GENERAL CONVERSION DATE" shall have the meaning set forth in the
Transition and Services Agreement.
"GOVERNMENTAL AUTHORITY" shall mean any government or any agency,
bureau, board, commission, court, department, official, political subdivision,
tribunal or other instrumentality of any government having authority in the
United States, whether federal, state or local.
"GUARANTEE" shall have the meaning set forth in the recitals.
"HAZARDOUS SUBSTANCE" shall mean any waste, emission, material or
substance (including gases, liquids and solids) defined or identified as toxic,
hazardous or dangerous in (or for the purposes of), or which is regulated under,
any Environmental Law, including asbestos, asbestos-containing materials, radon
gas, urea formaldehyde foam insulation, polychlorinated biphenyls, and oil or
petroleum products and by-products.
"▇▇▇" shall mean an individual retirement account as specified in
Section 408 and 408A of the Code.
"▇▇▇▇▇ PLAN" shall mean an employee pension plan covering self-employed
individuals.
"LANDLORD CONSENTS" shall have the meaning set forth in Section 8.8.
"LEASED BRANCHES" shall have the meaning set forth in Section 2.1(a)(2).
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"LEASED PREMISES" shall have the meaning set forth in Section 2.1(a)(2).
"LETTER OF CREDIT CUSTOMER" shall mean an obligor under a Purchased Loan
or Reimbursement Agreement for whose account a Letter of Credit was issued.
"LETTER OF CREDIT DISBURSEMENT" shall mean an amount equal to the sum of
(a) the amount drawn under any Letter of Credit in connection with a Request
plus (b) all reasonable and customary out-of-pocket charges and expenses that
Seller may pay or incur relative to such Request that are chargeable to the
Letter of Credit Customer under the related Reimbursement Agreement.
"LETTERS OF CREDIT" shall mean (a) each letter of credit or banker's
acceptance listed on Schedule 8.20, (b) each letter of credit or banker's
acceptance issued by Seller in connection with a Purchased Loan between the date
of Schedule 8.20 and the Closing Date and in compliance with Section 8.3, and
(c) any letter of credit or banker's acceptance applied for by a customer of
Seller (but not yet issued by Seller) as of the Effective Time. To the extent
Purchaser shall assume (and Seller has been released from) any Letter of Credit
or Purchaser has issued a replacement letter of credit, whether on or after the
day on which the related Purchased Loan is purchased by Purchaser pursuant to
the terms hereof, each as described in Section 8.20, the assumed or replaced
Letter of Credit shall no longer be deemed a "Letter of Credit" hereunder.
"LIENS" shall have the meaning set forth in Section 6.5.
"LOAN LOSS RESERVE ADJUSTMENT AMOUNT" shall mean the sum (which sum and
any of the quantities contemplated by any of clauses (a), (b), (c) or (d) of
this definition may be a positive or negative number) of (a) 0.0021 times the
difference of (1) the outstanding aggregate principal amount, net of
charge-offs, as of the Effective Time of those Purchased Loans that are (or, if
made or extended after the date hereof, would have been) classified as home
equity loans on Seller's books, minus (2) the outstanding aggregate principal
amount, net of charge-offs, of such loans as of April 30, 2002 as previously
disclosed to Purchaser, (b) 0.3597 times the difference of (1) the outstanding
aggregate principal amount, net of charge-offs, as of the Effective Time of
those Purchased Loans that are (or, if made or extended after the date hereof,
would have been) classified as high-loan-to-value home equity loans on Seller's
books, minus (2) the outstanding aggregate principal amount, net of charge-offs,
of such loans as of April 30, 2002 as previously disclosed to Purchaser, (c)
0.0237 times the difference of (1) the outstanding aggregate principal amount,
net of charge-offs, as of the Effective Time of those Purchased Loans that are
(or, if made or extended after the date hereof, would have been) classified as
small business loans on Seller's books, minus (2) the outstanding aggregate
principal amount, net of charge-offs, of such loans as of April 30, 2002 as
previously disclosed to Purchaser, and (d) 0.0307 times the difference of (1)
the outstanding aggregate principal amount, net of charge-offs, as of the
Effective Time of those Purchased Loans that are (or, if made or extended after
the date hereof, would have been) classified as Overdrafts, CD-secured or other
consumer loans on Seller's books, minus (2) the outstanding aggregate principal
amount, net of charge-offs, of such loans as of April 30, 2002 as previously
disclosed to Purchaser.
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"LOAN LOSS RESERVE AMOUNT" shall mean the sum of (a) $2.3 million and
(b) the Loan Loss Reserve Adjustment Amount.
"LOAN PURCHASE AMOUNT" shall mean the aggregate principal amount of the
Purchased Loans net of charge-offs, plus accrued and unpaid interest thereon
(except with respect to Purchased Loans that are 90 days past due or classified
by Seller as non-accrual) as of the Effective Time, minus the Loan Loss Reserve
Amount.
"LOSSES" shall mean losses, liabilities, damages, costs and expenses
(including reasonable attorneys' fees) incurred or suffered by the indemnified
party or its Affiliates in connection with the matters described in this
Agreement, net of any amounts actually recovered by the indemnified party under
insurance policies with respect to such Loss.
"MATERIAL ADVERSE ENVIRONMENTAL CONDITION" shall have the meaning set
forth in Section 2.5(c).
"NET BOOK VALUE" means the net book value as reflected in Seller's
books, determined in accordance with U.S. generally accepted accounting
principles, consistently applied.
"NEW PLANS" shall have the meaning set forth in Section 8.16(c).
"OCC" shall mean the Office of the Comptroller of the Currency within
the United States Department of the Treasury.
"OLD PLANS" shall have the meaning set forth in Section 8.16(c).
"ORDER" shall have the meaning set forth in Section 9.4.
"ORIGINAL PRICE" shall have the meaning set forth in Section 3.3(d).
"OTHER TRANSACTION" shall have the meaning set forth in the recitals.
"OVERDRAFTS" shall mean overdrafts of the book balance of any accounts
constituting Deposit Liabilities and all consumer lines of credit made available
to customers of the Branches as a protection against overdrafts of such
accounts.
"OWNED BRANCH" shall have the meaning set forth in Section 2.1(a)(1).
"OWNED OTHER FACILITY" shall have the meaning set forth in Section
2.1(a)(1).
"PARENT" shall have the meaning set forth in the recitals.
"PERMITTED ENCUMBRANCES" shall mean collectively (a) real property ad
valorem Taxes for the year of Closing or any assessments, charges or Taxes not
yet due and payable, (b) mechanics or materialmens liens incurred in the
ordinary course or that relate to sums not yet due and payable, and that do not
exceed $25,000 with respect to any Real Property, or $50,000 in the aggregate,
or (c) zoning, building code and other use restrictions imposed by a
Governmental Authority, a subdivision plat, or customary covenants, conditions,
easements or restrictions for a
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community or mixed use development, in each case that do not interfere in any
material respect with the use of the applicable Real Property operated in the
manner it is currently operated.
"PERSON" shall mean any individual, association, corporation, limited
liability company, partnership, limited liability partnership, trust or any
other entity or organization, including any Governmental Authority.
"PERSONAL PROPERTY" shall mean the personal property of Seller located
at the Real Property or the Leased Premises consisting of the furniture,
fixtures, equipment, security systems, safe deposit boxes (exclusive of
contents), vaults and other tangible personal property that are owned by Seller
and are located on or affixed to the Real Property or the Leased Premises and
all tenant improvements and fixtures owned by Seller at any Leased Premises, in
each case as of the Effective Time, and any of such items on order at the
Effective Time.
"PERSONAL PROPERTY LEASES" shall mean all leases of Personal Property.
"POST-CLOSING BALANCE SHEET" shall have the meaning set forth in Section
3.3(a).
"POST-CLOSING BALANCE SHEET DELIVERY DATE" shall have the meaning set
forth in Section 3.3(a).
"PRE-CLOSING BALANCE SHEET" shall have the meaning set forth in Section
2.2(e).
"PRE-CLOSING BALANCE SHEET DATE" shall have the meaning set forth in
Section 2.2(e).
"PROPERTY PRICE" shall mean the Net Book Value of each Owned Branch.
"PROXY STATEMENT" shall have the meaning set forth in Section 8.15(a).
"PURCHASED LOANS" shall have the meaning set forth in Section 2.1(a)(5).
"PURCHASE PRICE" shall have the meaning set forth in Section 2.2(a).
"PURCHASER" shall have the meaning set forth in the preamble.
"PURCHASER MATERIAL ADVERSE EFFECT" shall mean any event, occurrence,
circumstance or state of facts, individually or in the aggregate, that has had
or is reasonably likely to have a material adverse effect on Purchaser's ability
to timely perform its obligations hereunder or consummate the transactions
contemplated hereby; provided, that a Purchaser Material Adverse Effect shall
not include events or conditions to the extent arising out of or attributable to
(a) changes in generally prevailing economic conditions, including changes in
interest rates and stock market valuations, (b) changes in generally prevailing
legal or regulatory conditions applicable to the industry in which Purchaser
operates, (c) changes in generally accepted accounting principles, (d)
announcement of the transactions contemplated hereby, or (e) any actions taken
or omitted to be taken by Purchaser if such action or omission is required
hereby, except, in the cases of (a), (b) and (c), as disproportionately
adversely affects Purchaser relative to other similarly situated businesses.
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"REAL PROPERTY" shall have the meaning set forth in Section 2.1(a)(1).
"REAL PROPERTY LEASES" shall have the meaning set forth in Section
2.1(a)(2).
"REGULATORY APPROVALS" shall mean all regulatory approvals that are
required in order to consummate the transactions contemplated hereby (including
any transactions Seller must complete in order to consummate the transactions
contemplated hereby), including the expiration of all waiting periods thereunder
(including any extensions thereof).
"REIMBURSEMENT AGREEMENT" shall mean all documents and agreements
evidencing, securing or insuring the obligation of a Letter of Credit Customer
to repay, or the rights of Seller to recover, sums paid under a Letter of
Credit.
"REVISED PRICE" shall have the meaning set forth in Section 3.3(d).
"REQUEST" shall have the meaning set forth in Section 8.20(c).
"SAFE DEPOSIT CONTRACTS" shall mean all safe deposit contracts and
leases for the safe deposit boxes located at the Real Property and Leased
Premises as of the Effective Time.
"SEC" shall have the meaning set forth in Section 8.15(a).
"SELLER" shall have the meaning set forth in the preamble.
"SELLER MATERIAL ADVERSE EFFECT" shall mean an event, occurrence,
circumstance or state of facts, individually or in the aggregate, that has had
or is reasonably likely to have a material adverse effect on (a) the business,
operations or condition (financial or otherwise) of the Branch Banking
Operations as a whole, (b) the Transferred Assets or the Transferred Liabilities
as a whole, or (c) Seller's ability to timely perform its obligations hereunder
or consummate the transactions contemplated hereby; provided, that a Seller
Material Adverse Effect shall not include events or conditions to the extent
arising out of or attributable to (a) changes in generally prevailing economic
conditions, including changes in interest rates and stock market valuations, (b)
changes in generally prevailing legal or regulatory conditions applicable to the
industry in which Seller operates, (c) changes in generally accepted accounting
principles, (d) announcement of the transactions contemplated hereby, or (e) any
actions taken or omitted to be taken by Seller if such action or omission is
required hereby, except, in the cases of (a), (b) and (c), as disproportionately
adversely affects Seller relative to other similarly situated businesses.
"SEVERANCE PLANS" shall have the meaning set forth in Section 8.16(b).
"SOLVENCY OPINION" shall have the meaning set forth in Section 8.18.
"STOCKHOLDER APPROVAL" shall have the meaning set forth in Section
8.15(b).
"STOCKHOLDER MEETING" shall have the meaning set forth in Section
8.15(b).
"SUBSIDIARY" shall mean, with respect to any entity, any other entity
that is consolidated with such first entity for financial reporting purposes.
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"TAXES" shall mean any and all federal, state, local or foreign income,
gross receipts, license, payroll, employment, excise, severance, stamp,
occupation, premium, windfall profits, environmental (including taxes under
Section 59A of the Code), customs duties, capital stock, franchise, profits,
withholding, social security (or similar), unemployment, disability, real
property, personal property, sales, use, transfer, registration, value added,
alternative or add-on minimum, estimated, or other tax of any kind whatsoever,
including any interest, penalty, or addition thereto, whether disputed or not.
"TAX RETURN" shall mean any return, declaration, report, claim for
refund, or information return or statement relating to Taxes, including any
schedule or attachment thereto, and including any amendment thereof.
"TENANT LEASES" shall have the meaning set forth in Section 2.1(a)(2).
"TITLE DEFECTS" shall have the meaning set forth in Section 2.4(a).
"TITLE DEFECT NOTICE" shall have the meaning set forth in Section
2.4(a).
"TRANSACTION ACCOUNT" shall mean accounts at Branches 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,
negotiable order of withdrawal accounts and money market deposit accounts.
"TRANSFERRED ASSETS" shall have the meaning set forth in Section 2.1(a).
"TRANSFERRED LIABILITIES" shall have the meaning set forth in Section
2.2(b).
"TRANSFER TAXES" shall have the meaning set forth in Section 2.2(d).
"TRANSITION AND SERVICES AGREEMENT" shall have the meaning set forth in
the recitals.
"TREASURY REGULATIONS" shall mean any final or temporary regulations
promulgated by the United States Treasury.
"UPDATED TITLE REPORT" shall have the meaning set forth in Section
2.4(b).
"WARN ACT" shall mean the Workers Adjustment and Retraining Notification
Act of 1988, as amended.
(b) The words "INCLUDE" and "INCLUDING" as used herein shall be
deemed to be followed by the phrase "WITHOUT LIMITATION." References to an
Article, Section, Exhibit or Schedule shall be deemed to be references to an
Article or Section of, or an Exhibit or Schedule to, this Agreement unless
otherwise indicated. The table of contents and headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement. The words "HEREBY," "HEREOF,"
"HEREIN," "HERETO," "HEREUNDER" and words of similar import when used in this
Agreement shall refer to this Agreement as a whole and not to any particular
provision of this Agreement. The definitions
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contained in this Agreement are applicable to the singular as well as the plural
forms of such terms and to the masculine as well as to the feminine and neuter
genders of such term.
ARTICLE II
TRANSFER OF ASSETS AND LIABILITIES
SECTION 2.1 TRANSFERRED ASSETS.
(a) As of the Effective Time, and subject to the terms and
conditions set forth herein, Seller shall (or shall cause its applicable direct
or indirect subsidiaries to) sell, assign, transfer, convey, and deliver to
Purchaser, and Purchaser shall purchase from Seller (or its applicable direct or
indirect subsidiaries), possession of and any and all right, title and interest
of Seller (or its applicable direct or indirect subsidiaries) in and to the
following assets (collectively, the "TRANSFERRED ASSETS"):
(1) all of Seller's transferable fee simple right, title and
interest in and to the real estate and the related improvements and
fixtures located at (A) Seller's owned banking offices described on
Schedule 2.1(a)(1)(A) (each such owned branch, an "OWNED BRANCH"), and
(B) Seller's other facilities described on Schedule 2.1(a)(1)(B) (each
such facility, an "OWNED OTHER FACILITY" and, together with the Owned
Branches, collectively, the "REAL PROPERTY"), in each case together with
all assignable real property rights and appurtenances pertaining
thereto;
(2) subject to Section 8.8, including the receipt of the
applicable consents referred to therein, all leases, subleases or
licenses of real property relating to (A) Seller's leased banking
offices at the locations identified on Schedule 2.1(a)(2)(A)
(collectively, the "LEASED BRANCHES" and, together with the Owned
Branches, the "BRANCHES"; and such leases or licenses relating to the
Leased Branches, collectively, the "BRANCH LEASES"), (B) Seller's remote
site, free-standing automated teller machines ("ATMs") identified on
Schedule 2.1(a)(2)(B) (such leases or licenses relating to the ATMs, the
"ATM LEASES"), and (C) space in any Branches under which Seller (or one
of its Affiliates) is the lessor or sublessor, as identified on Schedule
2.1(a)(2)(C) (collectively, the "TENANT LEASES" and, together with the
Branch Leases and the ATM Leases, the "REAL PROPERTY LEASES"; and the
premises leased under the Real Property Leases, collectively, the
"LEASED PREMISES");
(3) all Personal Property and all Personal Property Leases, a
complete and accurate list of which as of the date of this Agreement is
listed on Schedule 2.1(a)(3);
(4) all Safe Deposit Contracts;
(5) those loans set forth on Schedule 2.1(a)(5), and each
obligation of Seller to make additional extensions of credit in
connection with each such loan, as each such loan may be increased,
decreased, amended, renewed or extended by Seller in the ordinary course
of business of Seller and in compliance with the terms of Section 8.3
between the date of Schedule 2.1(a)(5) (which, except for loans
classified as single
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family loans for which information will be provided as of May 31, 2002,
shall be as of a date not earlier than the second Business Day prior to
the date hereof) and the Closing Date, and each loan made by Seller
between the date of Schedule 2.1(a)(5) and the Closing Date that Seller
shall categorize in the ordinary course of its business consistent with
past practices to a loan category set forth on Schedule 2.1(a)(5) and
which loan is made in compliance with the terms of Section 8.3, and each
obligation of Seller to make additional extensions of credit in
connection with each such loan, as each such loan may be increased,
decreased, amended, renewed or extended by Seller in the ordinary course
of business of Seller and in compliance with the terms of Section 8.3
prior to the Closing Date; in each case including the collateral
therefor and (except to the extent set forth in Section 2.1(b)) the
servicing rights thereunder for which Seller has retained servicing
rights (collectively, the "PURCHASED LOANS");
(6) all Overdrafts;
(7) all Assumed Contracts;
(8) all of the routing and transit numbers with respect to
the Branches set forth on Schedule 2.1(a)(8); provided, however, that
unless Purchaser shall consent to the exclusion of one such routing and
transit number from the scope of this Section 2.1(a)(8), subsequent to
the date of this Agreement Seller may acquire a new routing and transit
number for its own use following the Effective Time, which new routing
and transit number shall not be sold, assigned, transferred, conveyed,
or delivered to Purchaser hereunder;
(9) all of Seller's rights under the contracts and
relationships giving rise to the Deposits, but excluding all contracts
and relationships relating to any Deposit that is a Brokered Deposit set
forth on Schedule 1.1(b) or a Brokered Deposit within the meaning of
clause (a) of the definition thereof that is booked after the date
hereof;
(10) all insurance premiums paid by Seller to the FDIC that
are allocable to insurance coverage for the Deposits following the
assumption thereof by Purchaser;
(11) all books, records and documents relating primarily to
the Transferred Assets and the Transferred Liabilities, as such books,
records and other documents may exist and are as held by Seller or its
Affiliates (including all books, records and documents contemplated by
Section 2.7, but excluding, to the extent permitted by law, one original
set of the personnel files relating to the Branch Employees, provided
that Seller, to the extent permitted by law, shall deliver to Purchaser
no later than the Closing Date true and complete copies thereof);
(12) all claims, counter-claims and causes of action with
respect to the Transferred Assets and Transferred Liabilities;
(13) all Coins and Currency; and
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(14) a 100% participation interest in the Letters of Credit
as contemplated by Section 8.20(b).
(b) All other assets of Seller shall not be included in the
Transferred Assets, and shall not be transferred hereunder, including:
(1) all loans (and any interests or participations in loans)
other than the Purchased Loans;
(2) all real property and leasehold interests in real
property, other than the Real Property and the Leased Premises;
(3) Seller's rights in and to the names "Bay View," "Bay View
Bank," "Bay View Commercial Finance Group," "Bay View Acceptance
Corporation" and "EurekaBank" and any of its predecessor banks' names
and any of Seller's or Seller's predecessors' corporate logos,
trademarks, trade names, signs, paper stock forms, and other supplies
containing any such logos, trademarks, or trade names;
(4) any regulatory licenses (other than any assignable
regulatory license primarily related to the Transferred Assets, which
shall constitute Transferred Assets) or any other nonassignable licenses
and permits;
(5) any Tax refunds, Tax credits or deferred Tax assets
relating to taxable periods (or portions thereof) ending on or prior to
the Closing Date;
(6) all contracts and agreements other than Assumed
Contracts; and
(7) any assets held with respect to the Benefit Plans (other
than personnel files or similar records contemplated by Section
2.1(a)(11)).
(collectively, the "EXCLUDED ASSETS").
SECTION 2.2 PURCHASE PRICE.
(a) As consideration for the purchase of the Transferred Assets
and the other transactions contemplated hereby and subject to Section 2.2(e),
Purchaser shall pay Seller a purchase price (the "PURCHASE PRICE") equal to the
sum of the following:
(1) a premium for the Deposits equal to the sum of (A) 14.0%
of the Average Deposit Balance and (B) $5 million;
(2) the Loan Purchase Amount;
(3) the Net Book Value of the Real Property, the Personal
Property, the improvements associated with the Real Property Leases and
the Leased Premises, in each case as of the Effective Time; and
(4) the face amount of the Coins and Currency.
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(b) In addition, Purchaser shall assume as of the Effective Time
and pay, perform and discharge as of or after the Effective Time, as the case
may be, only the following duties, obligations, and liabilities of Seller
arising from and after the Effective Time (the "TRANSFERRED LIABILITIES"):
(1) the Deposit Liabilities and the terms and agreements
relating thereto (including all of Seller's related responsibilities
with respect to (A) cashier checks issued prior to the Effective Time,
(B) the abandoned property laws of any state, (C) any legal process that
is served on Seller on or before the Closing Date with respect to claims
against or for the Deposit Liabilities that does not exceed the amount
of the applicable Deposit(s) (except to the extent attributable to any
act or omission taken or omitted to be taken by Seller prior to the
Effective Time in violation of an applicable contract or law) and (D)
any other applicable laws (except to the extent attributable to any act
or omission taken or omitted to be taken by Seller prior to the
Effective Time in violation of any such laws)), but excluding all
Deposit Liabilities relating to any Deposit that is a Brokered Deposit
within the meaning of clause (a) of the definition thereof that is
booked after the date hereof;
(2) all of Seller's duties, obligations and liabilities
relating to the Real Property and the Personal Property;
(3) all of Seller's duties, obligations and liabilities
relating to the Real Property Leases and the Personal Property Leases,
and the Leased Premises and other property leased under such leases;
(4) all of Seller's duties, obligations and liabilities
relating to the Safe Deposit Contracts (including all of Seller's
related responsibilities with respect to (A) any legal process that is
served on Seller on or before the Closing Date with respect to claims
against or for the contents thereof (except to the extent attributable
to any act or omission taken or omitted to be taken by Seller prior to
the Effective Time in violation of the applicable Safe Deposit Contract
or applicable law) and (B) any other applicable laws (except to the
extent attributable to any act or omission taken or omitted to be taken
by Seller prior to the Effective Time in violation of any such laws));
(5) all of Seller's duties, obligations and liabilities
relating to the Purchased Loans and the servicing thereof;
(6) all of Seller's duties, obligations and liabilities
relating to the Overdrafts; and
(7) all of Seller's duties, obligations and liabilities
relating to the Assumed Contracts; provided, however, that Purchaser
shall not, except pursuant to a subsequent assignment to which Purchaser
is a party, assume any liabilities, duties or obligations arising under
any Assumed Contract that is not assigned to Purchaser at the Closing
due to the failure to receive a necessary consent or otherwise.
(c) Notwithstanding anything to the contrary contained herein,
Purchaser shall not assume any duties, obligations or liabilities of Seller of
any kind, whether known, unknown,
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contingent or otherwise, other than the Transferred Liabilities, including any
duty, obligation or liability (1) not directly relating to the Transferred
Assets, (2) attributable to any acts or omissions to act taken or omitted to be
taken by or on behalf of Seller (or any of its Affiliates) prior to the
Effective Time in violation of any applicable laws, contracts or legal or
fiduciary duties, (3) attributable to any actions, causes of action, claims,
suits or proceedings or violations of law or regulation attributable to any acts
or omissions to act taken or omitted to be taken by Seller (or any of its
affiliates or direct or indirect Subsidiaries), (4) for Taxes relating to the
Transferred Assets or the Transferred Liabilities for taxable periods (or
portions thereof) ending on or prior to the Closing Date, (5) except as
expressly set forth in Section 8.16, relating to the Employees in any respect,
including the employment or termination of any Employee, in the case of each
Employee relating to any period prior to the time such Employee become employed
by Purchaser as contemplated hereby, and Losses with respect to the Benefit
Plans, ERISA, COBRA or the WARN Act, whether arising before or after the
Effective Time, relating to the employment of the Employees by Seller or its
Affiliates and their respective predecessors, (6) for Excluded ▇▇▇/▇▇▇▇▇ Plan
Deposits, or (7) arising from circumstances, events or conditions prior to the
Effective Time and not expressly assumed hereunder (the "EXCLUDED LIABILITIES").
Without limiting the generality of the foregoing, it is not the intention that
the assumption by Purchaser of the Transferred Liabilities shall in any way
enlarge the rights of any third parties relating thereto. Nothing contained in
this Agreement shall prevent any party hereto from contesting matters relating
to the Transferred Liabilities with any third party obligee. From and after the
Effective Time, (A) Purchaser shall have complete control over the payment,
settlement or other disposition of the Transferred Liabilities and the right to
commence, control and conduct all negotiations and proceedings with respect
thereto and (B) Seller shall have complete control over the payment, settlement
or other disposition of the Excluded Liabilities and the right to commence,
control and conduct all negotiations and proceedings with respect thereto.
Except as otherwise provided in Article IV or any transition plan entered into
thereunder, (i) Seller shall promptly notify Purchaser of any claim made against
it with respect to the Transferred Liabilities or the Transferred Assets and
shall not voluntarily make any payment of, settle or offer to settle, or consent
or compromise or admit liability with respect to, any Transferred Liabilities or
Transferred Assets and (ii) Purchaser shall promptly notify Seller of any claim
made against it with respect to the Excluded Liabilities or the Excluded Assets
and shall not voluntarily make any payment of, settle or offer to settle, or
consent or compromise or admit liability with respect to, any Excluded
Liabilities or Excluded Assets.
(d) All excise, sales, use, stamp, documentary and transfer Taxes
and similar fees and charges (collectively, "TRANSFER TAXES") that are payable
or that arise as a result of the consummation of the transactions contemplated
hereby shall be paid by Seller and Purchaser in equal shares, and each party
shall indemnify and hold the other party harmless from and against any such
Transfer Taxes in excess of the allocated share of such other party.
(e) Seller shall prepare, in consultation with Purchaser, a
balance sheet (the "PRE-CLOSING BALANCE SHEET") as of the day immediately prior
to the first day of the month immediately preceding the anticipated Closing Date
(the "PRE-CLOSING BALANCE SHEET DATE") based on Seller's books and records and
using the internal accounting procedures of Seller consistently applied
reflecting the assets to be sold and assigned hereunder and the liabilities to
be transferred and assumed hereunder. Seller shall deliver the Pre-Closing
Balance Sheet to Purchaser as soon as reasonably practicable following the
Pre-Closing Balance Sheet Date, but in
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no event fewer than ten (10) days prior to the Closing Date. Seller agrees to
pay to Purchaser at the Closing, in immediately available funds, the excess
amount, if any, of the amount of Deposit Liabilities assumed by Purchaser
pursuant to paragraph (b) above as reflected by the Pre-Closing Balance Sheet,
over the aggregate Purchase Price computed in accordance with paragraph (a)
above, as reflected by the Pre-Closing Balance Sheet. Purchaser agrees to pay
Seller at the Closing, in immediately available funds, the excess amount, if
any, of the aggregate Purchase Price computed in accordance with paragraph (a)
above, as reflected by the Pre-Closing Balance Sheet, over the amount of Deposit
Liabilities assumed by Purchaser pursuant to paragraph (b) above as reflected by
the Pre-Closing Balance Sheet. All amounts paid at the Closing shall be subject
to subsequent adjustment based on the Post-Closing Balance Sheet.
(f) Seller and Purchaser agree to cooperate in good faith to
determine a reasonable allocation of the total consideration paid for the
Transferred Assets, as finally determined pursuant to Section 2.2 and Section
3.3, in accordance with Section 1060 of the Code. On or prior to the date ninety
(90) days after the Closing Date, Purchaser shall provide to Seller Purchaser's
proposed allocation of the total consideration paid for the Transferred Assets.
Within thirty (30) days after the receipt of such proposed allocation, Seller
shall propose to Purchaser any changes to such allocation in writing or
otherwise shall be deemed to have agreed with such allocation. Seller and
Purchaser shall cooperate in good faith to mutually agree to such allocation and
shall reduce such agreement to writing, including jointly and properly executing
completed Internal Revenue Service Form 8594, and any other forms or statements
required by the Code (or state or local Tax law), Treasury Regulations or the
Internal Revenue Service or other Governmental Authority, together with any and
all attachments required to be filed therewith. Seller and Purchaser shall file
timely any such forms and statements with the Internal Revenue Service or other
Governmental Authority. In the event that Seller objects to Purchaser's proposed
allocation in writing within such thirty (30) day period and Purchaser and
Seller are unable to reach an agreement within thirty (30) days after
Purchaser's receipt of such written objection, the dispute shall be referred to
a nationally recognized accounting firm mutually acceptable to Seller and
Purchaser for resolution, and the determination of such firm shall be binding
upon Seller and Purchaser and their respective Affiliates and shall constitute
the agreed allocation, with Seller and Purchaser each bearing one-half of the
costs, fees and expenses of such firm. The agreed allocation shall be
appropriately adjusted to take into account any subsequent payments under this
Agreement and any other subsequent events required to be taken into account
under Section 1060 of the Code. Seller and Purchaser shall not file any Tax
Return or other documents or otherwise take any position with respect to Taxes
that is inconsistent with the allocation determined pursuant to this Section
2.2(f); provided, however, that neither Seller nor Purchaser shall be obligated
to litigate any challenge to such allocation by any Governmental Authority.
Seller and Purchaser shall promptly inform one another of any challenge by any
Governmental Authority to any allocation made pursuant to this Section 2.2(f)
and agree to consult with and keep one another informed with respect to the
state of, and any discussion, proposal or submission with respect to, such
challenge.
SECTION 2.3 PRORATION; OTHER CLOSING DATE ADJUSTMENTS.
(a) Except as otherwise specifically provided in this Agreement
or in the Transition and Services Agreement, it is the intention of the parties
that Seller shall operate the Branch Banking Operations, hold the Transferred
Assets and retain the Transferred Liabilities
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for its own account until the Effective Time, and the Branch Banking Operations
shall be operated, the Transferred Assets shall be held and the Transferred
Liabilities shall be assumed for Purchaser's account as of and after the
Effective Time. Thus, except as otherwise expressly provided in this Agreement,
items of income and expense, as defined herein, shall be prorated as of the
Effective Time, and settled between Seller and Purchaser on and as of the
Closing Date, whether or not such adjustment would normally be made as of such
time. Items of proration will be handled at Closing as an adjustment to the
Purchase Price unless otherwise agreed by the parties hereto. In furtherance of
the foregoing, Purchaser shall promptly forward to Seller complete and accurate
copies of all invoices, billing statements and similar documents received by
Purchaser after the Effective Time and relating to the Branch Banking Operations
conducted prior to the Effective Time, and Seller shall promptly forward to
Purchaser complete and accurate copies of all invoices and billing statements
received by Seller relating to the Branch Banking Operations conducted after the
Effective Time. To the extent the exact amounts of any real or personal property
Taxes or other items to be prorated are not known on the Closing Date, the
parties shall make reasonable estimates of such Taxes or other items for
purposes of making prorations at Closing and shall thereafter adjust the
prorations as promptly as practicable after such exact amounts are finally
ascertained.
(b) For purposes hereof, items of proration and other adjustments
shall include: (1) rental payments under the Real Property Leases and the Tenant
Leases; (2) personal and real property Taxes and assessments arising from Real
Property or the Leased Premises or otherwise from the Branch Banking Operations
(determined by assuming that the taxable year or period ended at the Effective
Time); (3) FDIC deposit insurance assessments; (4) prepaid expenses and items
and accrued but unpaid liabilities a portion of which is attributable to periods
after the Effective Time (it being understood that Purchaser shall have no
liability for any accrued but unpaid liabilities attributable to Excluded Assets
or Excluded Liabilities); and (5) safe deposit rental payments previously
received by Seller.
SECTION 2.4 TITLE TO REAL PROPERTY.
(a) Purchaser agrees to notify Seller in writing (a "TITLE DEFECT
NOTICE") no later than sixty (60) days after the date hereof of any mortgages,
pledges, liens, encumbrances, reservations, encroachments, overlaps or other
title defects related to any Real Property as to which Purchaser objects (the
"TITLE DEFECTS"), provided that the Title Defects and the Title Defect Notice
shall not include or refer to any Permitted Encumbrances. If Seller shall timely
receive any Title Defect Notice with respect to any Real Property, then Seller
shall, at its option and in its sole discretion, elect to take one of the
following actions with respect to each Title Defect referenced in such Title
Defect Notice: (1) cure or eliminate such Title Defect prior to the Closing, in
which event the Closing shall proceed with respect to the Real Property subject
to such Title Defect without any reduction in the applicable Property Price; (2)
accept a reduction in the Property Price applicable to the Real Property subject
to such Title Defect equal to any applicable Defect Reduction Amount to reflect
the greater of the diminution in value (if any) resulting from such Title Defect
or the cost of curing such Title Defect, if applicable, as determined pursuant
to Section 2.8; or (3) lease to Purchaser the Real Property subject to such
Title Defect in accordance with the provisions of Section 2.4(c); provided,
however, that if Seller chooses to rely upon clause (3) and any such Title
Defect interferes in any material respect with the use of the applicable Real
Property operated in the manner in which it is currently operated,
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then Purchaser shall not be obligated to lease the Real Property subject to such
Title Defect and Purchaser shall have the option to elect either (i) to cause
Seller to elect clause (1) with respect to such Real Property or (ii) to not
acquire such Real Property and not pay the Property Price applicable to such
Real Property. For purposes of this Section 2.4, a Title Defect shall be deemed
to have been "cured" or "eliminated" if title insurance coverage or a bond
reasonably acceptable to Purchaser shall have been obtained against such Title
Defect.
(b) Purchaser shall have the right to obtain an updated title
search or survey not less than thirty (30) days prior to the anticipated Closing
Date to determine whether any title changes may have arisen between the
effective date of the applicable title commitment and such update (an "UPDATED
TITLE REPORT"). If such Updated Title Report indicates that any Title Defects
have been placed of record in respect of any Real Property since the effective
date of the applicable title commitment, then Purchaser shall have the right to
provide Seller a Title Defect Notice in respect thereof not more than five (5)
Business Days following Purchaser's receipt of such Updated Title Report, and
thereafter Seller shall have the right to address such Title Defect Notice in
the same manner as is set forth in Section 2.4(a) with respect to Title Defect
Notices received by Seller within sixty (60) days after the date hereof (by
electing to cure the Title Defect in question, accept a reduction in the
applicable Property Price or lease the Real Property in question, all as more
particularly set forth in Section 2.4(a)).
(c) If pursuant to Section 2.4(a), Section 2.4(b) or Section
2.5(c), Seller leases to Purchaser any Real Property that is subject to a Title
Defect or a Material Adverse Environmental Condition (as the case may be, a
"DEFECT"), then Seller shall lease such Real Property to Purchaser, on a triple
net basis, at existing market rents for a term of three (3) years commencing at
the Closing pursuant to a lease substantially in the form attached hereto as
Exhibit 2.4(c). The parties agree that, if they cannot agree upon the "existing
market rent" to be payable for any such Real Property under any such lease, then
such "existing market rent" shall be determined by an appraisal to be conducted
by an appraiser selected in the manner set forth in Section 2.8 below, with the
cost of such appraisal to be shared equally by Purchaser and Seller. The
"existing market rent" applicable to any such lease shall be the rent that a
willing tenant would pay to lease the Real Property in question on the terms set
forth above for use as a bank branch. If any Real Property is leased to
Purchaser pursuant to this provision, the Purchase Price shall be reduced by the
amount of the Property Price attributable to such Real Property, but if Seller
cures or eliminates the Defect related thereto to Purchaser's reasonable
satisfaction at any time during the term of such lease, then Purchaser shall
promptly thereafter purchase such Real Property according to the applicable
provisions hereof and pay Seller the Property Price for such Real Property
(without interest thereon and less any lease payments made by Purchaser to
Seller with respect to such Real Property) at the time of transfer of title
thereto to Purchaser.
SECTION 2.5 ENVIRONMENTAL MATTERS.
(a) Seller has made available to Purchaser complete and accurate
copies of all environmental studies, reports and audits in Seller's or its
Affiliates' possession related to the Real Property (the "EXISTING ENVIRONMENTAL
REPORTS").
(b) Prior to the Effective Time, Purchaser shall have the right,
but not the obligation, at its sole cost and expense, to cause such
investigations and tests to be made as it
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reasonably deems necessary to determine whether there has been any soil, surface
water, groundwater or building space contamination on or under the Real
Property. Seller shall cooperate with Purchaser and/or its agents or contractors
in their evaluation and testing of the Real Property, including by providing
Purchaser and/or its agents or contractors reasonable access to pertinent
records and documents in Seller's or its Affiliates' possession. Any
investigations or tests performed by Purchaser shall be conducted in a manner so
as not to damage in any material respect the Real Property and so as not to
interfere in any material respect with the business or operations conducted
thereat. If any such damage is caused to the Real Property, Purchaser shall
promptly repair and restore the Real Property to its former condition. Without
the prior written consent of Seller (which consent will not unreasonably be
withheld or delayed) and execution of a reasonably satisfactory property access
agreement, Purchaser shall not conduct subsurface or intrusive testing or any
ground water monitoring or install any test well or undertake any other
investigation that requires a permit or license from, or the reporting of the
investigation or the results thereof to, any environmental regulatory authority.
Purchaser shall give Seller reasonable prior notice of its intention to conduct
any investigation or test hereunder. Purchaser shall furnish Seller with a copy
of each report or investigation setting forth the results of any test performed
by Purchaser as soon as reasonably practicable after receipt. Purchaser shall
not submit a copy of any such report or disclose the contents thereof to any
Governmental Authority unless specifically required by applicable law, and if so
required, Purchaser shall provide Seller five (5) days' prior written notice of
any submission and shall simultaneously provide to Seller a copy of any
information submitted to such Governmental Authority.
(c) If Purchaser objects to a Material Adverse Environmental
Condition at any Real Property by providing written notice thereof (an
"ENVIRONMENTAL DEFECT NOTICE") to Seller within sixty (60) days after the date
hereof, then Purchaser shall, at its option and in its sole discretion, elect to
take one of the following actions with respect to each such Material Adverse
Environmental Condition: (1) to cause Seller to cure such Material Adverse
Environmental Condition in a manner reasonably satisfactory to Purchaser prior
to the Closing, in which event the Closing shall proceed with respect to the
Real Property subject to such Material Adverse Environmental Condition without
any reduction in the applicable Property Price; (2) to not acquire such Real
Property and not pay the Property Price applicable to such Real Property; or (3)
to cause Seller to lease to Purchaser the Real Property subject to such Material
Adverse Environmental Condition in accordance with the provisions of Section
2.4(c). Seller shall be deemed to have cured any Material Adverse Environmental
Condition if it agrees to remediate such Material Adverse Environmental
Condition and provide assurances that such remediation will be promptly
effected, in each case to Purchaser's reasonable satisfaction and without
material interruptions of the operations conducted at such Real Property. The
term "MATERIAL ADVERSE ENVIRONMENTAL CONDITION" as used herein means any
contamination or other condition or combination of contaminations and conditions
caused by or related to Hazardous Substances in violation of any applicable
Environmental Law (other than contamination to the extent expressly disclosed in
any Existing Environmental Report), which contaminations or conditions would be
reasonably expected to result in liabilities or remediation costs in excess of
$150,000 in the aggregate.
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SECTION 2.6 ASSUMED CONTRACTS.
Attached as Schedule 2.6 is a list of all service or similar contracts
in effect as of the date hereof that exclusively relate to the Real Property,
the Leased Premises or the Branch Banking Operations subject hereto (and that
are capable of assignment in connection herewith) ("ASSUMED CONTRACTS"). Subject
to the proration requirements of Section 2.3, Purchaser shall assume all such
Assumed Contracts as of the Effective Time.
SECTION 2.7 BOOKS AND RECORDS.
(a) As promptly as practicable subsequent to the Effective Time,
but in no event later than the General Conversion Date, Seller shall deliver to
Purchaser all files, documents and records in Seller's possession that pertain
to and are utilized by Seller to administer, monitor, evidence or record
information respecting the business or conduct of the Branch Banking Operations,
including all such files, documents and records maintained on electronic or
magnetic media in the electronic data base system of Seller that are reasonably
accessible on a branch-by-branch basis, and, to the extent permitted by law,
including copies of all personnel files relating to the Branch Employees. If any
personnel file, or portion thereof, relating to any Branch Employee is not
permitted by law to be transferred pursuant to the immediately preceding
sentence, Seller shall promptly advise Purchaser of such prohibition and,
notwithstanding anything to the contrary set forth herein, if any Branch
Employee executes a waiver mutually reasonably satisfactory to Seller and
Purchaser authorizing such delivery, Seller shall promptly provide copies of the
entire personnel file applicable to such Branch Employee. Following the Closing
Date, Seller shall promptly provide such copies of such files, documents and
records relating to the Branch Banking Operations in its possession as Purchaser
shall reasonably request. Purchaser agrees, at Seller's expense, to return to
Seller all files, documents and records contained on any Real Property or Leased
Premises that, to Purchaser's knowledge, do not relate to the business or
conduct of the Branch Banking Operations.
(b) As to any file, document, or record, as of the time of
transfer and until any return thereof to Seller, Purchaser shall become
responsible for maintaining such file, document or record transferred to it
pursuant hereto. Purchaser will preserve and hold such files, documents and
records in safekeeping as required by applicable law and in accordance with
Purchaser's customary practices.
(c) After the Effective Time, Purchaser will permit Seller and
its representatives, at reasonable times and upon reasonable written notice, at
Seller's sole cost and expense except as set forth in Section 2.7(d), to
examine, inspect, copy and reproduce any such files, documents or records, and
to access any Employees that may then be employed by Purchaser, to the extent
reasonably required in connection with any third party claim, action, litigation
or other proceeding involving Seller or its Affiliates or in connection with any
legal obligation owed by Seller or its Affiliates to any present or former
depositor or other customer or any Governmental Authority, including for
purposes of preparing regulatory reports and returns and Tax Returns. After the
Effective Time, Seller will permit Purchaser and its representatives, at
reasonable times and upon reasonable notice, at Purchaser's sole cost and
expense except as set forth in Section 2.7(d), to examine, inspect, copy and
reproduce files, documents or records retained by Seller or its Affiliates
regarding the Transferred Assets and Transferred Liabilities to
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the extent reasonably required in connection with any third party claim, action,
litigation or other proceeding involving Purchaser or its Affiliates or in
connection with any legal obligation owed by Purchaser or its Affiliates to any
present or former depositor or other customer or any Governmental Authority,
including for purposes of preparing regulatory reports and returns and Tax
Returns.
(d) For a period of six (6) months after the Effective Time, the
party providing copies of records hereunder shall do so without charge, and
thereafter it may charge its customary rate for providing such copies.
SECTION 2.8 DETERMINATION OF DEFECT REDUCTION AMOUNTS.
If Seller shall receive a Title Defect Notice or an Environmental Defect
Notice in respect of any Real Property, either party shall have the right to
require the determination of any related Defect Reduction Amount (if any) that
Seller might elect to accept pursuant to Section 2.4, Section 2.5 and this
Section 2.8, by providing written notice to the other party that such party
requires such determination. Upon the recipient's receipt of any such notice,
Seller and Purchaser shall cooperate in good faith in an attempt to reach
agreement as to the applicable Defect Reduction Amount, if any. If the parties
are unable to reach such agreement within fifteen (15) days after the date of
such notice, then the Defect Reduction Amount shall be determined by an
appraisal prepared in accordance with customary practices and procedures (except
as provided herein) by an M.A.I. appraiser selected by agreement between Seller
and Purchaser, provided that in the event the parties cannot agree on the
selection of an appraiser within five (5) days, then such appraiser shall be
selected as follows: Seller and Purchaser shall each select an appraiser within
five (5) days and the two selected appraisers shall then select a third
appraiser, who shall be the appraiser who shall determine the Defect Reduction
Amount, if any. If either party does not select an appraiser within five (5)
days, then the appraiser chosen by the other party shall be solely responsible
for determining the Defect Reduction Amount, and if the two initial appraisers
shall fail to agree on the third appraiser within five (5) Business Days then
the parties shall request that a court of competent jurisdiction in Delaware
select an impartial appraiser. For all purposes hereof, the "DEFECT REDUCTION
AMOUNT" attributable to any Defect shall be (and any appraisal thereof shall
determine) the amount of the greater of (i) any diminution in the fair market
value of the Real Property subject to such Defect that results from the Defect
below the Property Price for such Real Property, and (ii) the costs of remedying
such Defect. The fair market value of any Real Property for purposes of this
Section 2.8 shall be the amount of cash that would be expected to be realized by
Seller if Seller sold such Real Property, as willing seller, to a willing buyer
on the Closing Date, in its existing condition and for its currently
contemplated use. If any appraiser selected hereunder shall be unable to
determine any Defect Reduction Amount pursuant to the foregoing provisions, then
the parties shall cooperate and work reasonably with the appraiser in order to
ascertain the Defect Reduction Amount in a reasonable and mutually satisfactory
manner. Any appraiser selected hereunder shall be an M.A.I. appraiser of good
professional standing who has experience appraising properties similar to the
Real Property in question. Any appraisal costs incurred pursuant to this Section
2.8 shall be shared equally by Seller and Purchaser. Any determination of a
Defect Reduction Amount pursuant to this Section 2.8 shall be final. After any
Defect Reduction Amount is determined pursuant to this Section 2.8, Seller
shall, subject to the provisions of Sections 2.4 and 2.5, elect whether to
accept such Defect Reduction Amount (in which case it
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shall be deducted from the applicable Property Price) or to lease the Real
Property in question to Purchaser pursuant to the terms set forth in Section
2.4(c) or exercise the other options available to Seller pursuant to Sections
2.4 or 2.5, as applicable.
ARTICLE III
CLOSING AND EFFECTIVE TIME
SECTION 3.1 EFFECTIVE TIME.
The purchase of the Transferred Assets and assumption of Transferred
Liabilities provided for in this Agreement, shall occur at a closing (the
"CLOSING") to be held at the offices of Seller in San Mateo, California at 10:00
a.m., local time, or at such other time, place, and manner as the parties shall
mutually agree, on a date to be mutually agreed upon between the parties, which
date shall occur on the first day of the next month following the date on which
all conditions set forth in Article IX and Article X (other than those
conditions that by their nature are to be satisfied at the Closing) are
satisfied or, where legally permitted, waived; provided, however, that if the
Closing would otherwise occur prior to November 1, 2002, Seller may at its
option and in lieu of closing on such date specify, by written notice to
Purchaser no later than ten (10) business days prior to the anticipated closing
date, that the Closing shall occur on November 1, 2002, it being understood that
Seller's obligation to close on such delayed date shall not be affected by any
circumstances occurring following the originally anticipated closing. The
effective time (the "EFFECTIVE TIME") shall be 12:01 a.m., local time in San
Mateo, California, on the day on which the Closing occurs (the "CLOSING DATE").
SECTION 3.2 CLOSING.
(a) All actions taken and documents delivered at the Closing
shall be deemed to have been taken and executed simultaneously, and no action
shall be deemed taken nor any document delivered until all have been taken and
delivered.
(b) At the Closing, subject to all the terms and conditions
hereof, including receipt of all consents and approvals hereunder, Seller shall
execute and deliver to Purchaser the following:
(1) grant deeds executed by Seller transferring all of
Seller's right, title and interest in and to each parcel of Real
Property to Purchaser, subject only to Permitted Encumbrances, in
substantially the form attached hereto as Exhibit 3.2(b)(1), together
with (A) such evidence of Seller's authority to sell the Real Property
as Purchaser's title company shall reasonably require, (B) an ALTA
owner's affidavit for each Real Property in customary form and (C) such
real property transfer tax and related or similar forms required in
connection with the recordation of the grant deeds;
(2) a ▇▇▇▇ of Sale, in substantially the form attached hereto
as Exhibit 3.2(b)(2), transferring to Purchaser all of Seller's interest
in the Personal Property and the Coins and Currency;
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(3) an Assignment and Assumption Agreement in substantially
the form attached hereto as Exhibit 3.2(b)(3), with respect to the
Transferred Liabilities ("ASSIGNMENT AND ASSUMPTION AGREEMENT");
(4) an Assignment and Assumption of Leases executed by
Seller, in substantially the form attached hereto as Exhibit 3.2(b)(4),
assigning Seller's interest in the Real Property Leases and pursuant to
which Purchaser shall assume the Real Property Leases ("ASSIGNMENT AND
ASSUMPTION OF LEASES");
(5) an Assignment and Assumption of Tenant Lease, in
substantially the form attached hereto as Exhibit 3.2(b)(5), assigning
Seller's interest as lessor in the Tenant Leases and pursuant to which
Purchaser shall assume the Tenant Leases ("ASSIGNMENT AND ASSUMPTION OF
TENANT LEASE");
(6) subject to the provisions of Section 8.8, the Landlord
Consents;
(7) estoppel certificates executed by the lessors of the
Leased Premises, to the extent Seller can obtain such certificates using
its reasonable best efforts;
(8) a certificate of a proper officer of Seller, dated as of
the Closing Date, certifying as to the satisfaction of the conditions
set forth in Section 9.1 and Section 9.2 (provided that in the event
that Purchaser has waived such conditions pursuant to this Agreement,
such certificate need only address such matters as have not been waived
under the terms hereof);
(9) a Closing Statement using amounts shown on the
Pre-Closing Balance Sheet, substantially in the form attached hereto as
Exhibit 3.2(b)(9) (the "CLOSING STATEMENT");
(10) a certification of Seller, meeting the requirements of
Treasury Regulations Section 1.1445-2(b)(2), certifying that Seller is
not a "foreign person" as defined in the federal Foreign Investment in
Real Property Tax Act of 1980, which certification shall be
substantially in the form of the sample certification set forth in
Treasury Regulations Section 1.1445-2(b)(2)(iii)(B), and customary
certificates and affidavits as reasonably requested by the First
American Title Insurance Company (or such other title company as may be
reasonably acceptable to Purchaser);
(11) immediately available funds in the net amount shown as
owing to Purchaser by Seller on the Closing Statement, if any;
(12) a limited power of attorney to allow Purchaser, in the
name of Seller, to effect transfers of Transferred Assets after the
Closing, which shall be in substantially the form attached hereto as
Exhibit 3.2(b)(12);
(13) the resignation of Seller as trustee or custodian, as
applicable, with respect to each ▇▇▇ or ▇▇▇▇▇ Plan deposit account
included in the Transferred Liabilities and the designation of Purchaser
as successor trustee or custodian with respect thereto; and
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(14) such certificates and other documents as the parties
determine to be reasonably necessary in connection with the consummation
of the transactions contemplated hereby and that do not alter the
parties' respective obligations or liability hereunder.
(c) At the Closing, subject to all the terms and conditions
hereof, Purchaser shall execute and deliver to Seller:
(1) the Assignment and Assumption Agreement;
(2) the Assignment and Assumption of Leases;
(3) the Assignment and Assumption of Tenant Lease;
(4) a certificate and receipt acknowledging the delivery and
receipt of possession of the Transferred Assets and records referred to
in this Agreement;
(5) immediately available funds in the net amount shown as
owing to Seller by Purchaser on the Closing Statement, if any;
(6) a certificate of a proper officer of Purchaser, dated as
of the Closing Date, certifying as to the satisfaction of the conditions
set forth in Section 10.1 and Section 10.2;
(7) Purchaser's acceptance of its appointment as successor
trustee or custodian, as applicable, as of the Effective Time, of the
▇▇▇ and ▇▇▇▇▇ Plan deposit accounts included in the Transferred
Liabilities and its assumption of the fiduciary obligations of the
trustee or custodian with respect thereto; and
(8) such certificates and other documents as the parties
determine to be reasonably necessary in connection with the consummation
of the transactions contemplated hereby and that do not alter the
parties' respective obligations or liability hereunder.
SECTION 3.3 POST CLOSING ADJUSTMENTS.
(a) Not later than the close of business on the sixtieth (60th)
day after the Effective Time (such actual date of delivery, the "POST-CLOSING
BALANCE SHEET DELIVERY DATE"), Purchaser shall deliver to Seller a balance sheet
dated as of the Effective Time based on Seller's books and records and using the
internal accounting procedures of Seller consistently applied reflecting the
assets sold and assigned and the liabilities transferred and assumed hereunder
(the "POST-CLOSING BALANCE SHEET"), together with a copy of Purchaser's
calculation of the Purchase Price as adjusted hereunder and the amounts payable
thereunder. Purchaser shall afford Seller and its accountants and attorneys the
opportunity to review all work papers and documentation used by Purchaser in
preparing the Post-Closing Balance Sheet.
(b) Except as otherwise expressly provided herein, the
determination of the Post-Closing Balance Sheet shall be final and binding on
the parties hereto unless within thirty
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(30) days after receipt by Seller of the Post-Closing Balance Sheet, Seller
shall notify Purchaser in writing of its disagreement with any amount included
therein or omitted therefrom, in which case, if the parties are unable to
resolve the disputed items within ten (10) Business Days of the receipt by
Purchaser of notice of such disagreement, such items shall be determined by a
nationally-recognized independent accounting firm selected by mutual agreement
between Seller and Purchaser; provided, however, that in the event the fees of
such firm as estimated by such firm would exceed fifty percent (50%) of the net
amount in dispute, the parties agree that such firm will not be engaged by
either party and that such net amount in dispute will be equally apportioned
between Seller and Purchaser. Such accounting firm shall be instructed to
resolve the disputed items within ten (10) Business Days of engagement, to the
extent reasonably practicable. The determination of such accounting firm shall
be final and binding on the parties hereto. The fees of any such accounting firm
shall be divided equally between Seller and Purchaser.
(c) Not later than the close of business on the second (2nd)
Business Day following the determination of the Post-Closing Balance Sheet (the
"ADJUSTMENT PAYMENT DATE"), Seller and Purchaser shall effect the transfer of
any funds as may be necessary to reflect changes in such assets and liabilities
between the Pre-Closing Balance Sheet and the Post-Closing Balance Sheet and
resulting changes in the Purchase Price, together with interest thereon computed
from the Effective Time up to but not including the Adjustment Payment Date at
the applicable Federal Funds Rate.
(d) Notwithstanding the foregoing provisions of this Section 3.3,
if at any time within three (3) months after the Post-Closing Balance Sheet
Delivery Date either party discovers an error in the calculation of the
Post-Closing Balance Sheet that resulted in the Purchase Price actually paid, as
adjusted pursuant to this Section 3.3 ("ORIGINAL PRICE"), being at least
$250,000, individually or in the aggregate with all such errors, more or less
than the Purchase Price would have been but for such error ("REVISED PRICE"),
and notifies the other party thereof, the parties agree to cooperate in good
faith to correct the error. If the parties disagree on the existence or
magnitude of an error within ten (10) Business Days after notice thereof, such
matter shall be resolved by an independent accounting firm in the same manner as
described above for resolving disputed items; provided, however, that in the
event the fees of such firm as estimated by such firm would exceed fifty percent
(50%) of the net amount in dispute, the parties agree that such firm will not be
engaged by either party and that such net amount in dispute will be equally
apportioned between Seller, on the one hand, and Purchaser, on the other hand.
Upon the determination of the Revised Price, the appropriate party shall pay an
amount to the other that is the difference between the amount actually paid by
such party pursuant to Section 2.2, as adjusted pursuant to the other paragraphs
of this Section 3.3, and the amount that such party would have paid to the other
if the Original Price had been equal to the Revised Price, together with
interest thereon computed from the Effective Time up to but not including the
Adjustment Payment Date at the applicable Federal Funds Rate.
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ARTICLE IV
TRANSITIONAL MATTERS
SECTION 4.1 GENERAL.
(a) Seller and Purchaser acknowledge and agree that Purchaser
will not be able to convert the Transferred Assets and Transferred Liabilities
to its data processing and similar systems on the Closing Date (the
"CONVERSION"). Accordingly, Seller and Purchaser have entered into, to become
effective as of the Effective Time, the Transition and Services Agreement, which
Transition and Services Agreement shall govern the relationship between Seller
and Purchaser during the period from the Effective Time to the General
Conversion Date. Without limiting any obligations that will be more specifically
set forth in the Transition and Services Agreement, Seller and Purchaser agree
during the period from the Effective Time to the General Conversion Date to (1)
cooperate in good faith to assure an orderly transition of ownership of the
Transferred Assets and Transferred Liabilities to Purchaser hereunder, (2) to
use reasonable best efforts to cause to be continued uninterrupted and
unimpaired the provision of data processing and similar services and systems
that support or facilitate the Branch Banking Operations such that the Branch
Banking Operations shall continue to be operated in the ordinary course
consistent with past practices, and (3) to use reasonable best efforts to cause
all third parties that provide data processing and similar services with respect
to the Transferred Assets and Transferred Liabilities to continue to provide
such services during such period, and shall cooperate in managing the provision
of such services.
(b) Commencing promptly following the date hereof, appropriate
personnel of Seller and Purchaser shall regularly meet to discuss implementation
of the Transition and Services Agreement and all other actions as are necessary
to implement operational aspects of the Conversion, including handling and
settlement of the following, as applicable: checks on deposit accounts and home
credit line accounts, loan payments, direct deposits and direct debits through
ACH or otherwise, point of sale transactions, ATM transactions, error resolution
matters pursuant to Regulations E and Z promulgated by the Board of Governors of
the Federal Reserve System, miscellaneous account adjustments, daily settlement,
and other settlement and transition items.
(c) In furtherance of the foregoing, appropriate personnel of
Seller and Purchaser shall meet to discuss implementation of the Transition and
Services Agreement including with respect to mutually acceptable transaction
settlement procedures and specifications, files (including conversion sample
files) and schedules for the transfer of data processing responsibilities
relating to the Transferred Assets and Transferred Liabilities from Seller to
Purchaser, to be effective as of the General Conversion Date. Purchaser will
have responsibility for all product mapping and the creation of all conversion
programs and procedures but Seller will provide full access to qualified
personnel to reasonably consult and confer with Purchaser to facilitate this
process. Not later than fifteen (15) days following the date hereof, Seller
shall deliver to Purchaser the specifications and conversion sample files in
Seller's possession and, as promptly as reasonable practicable following the
date hereof, shall use commercially reasonable efforts to deliver to Purchaser
such specifications and conversion
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sample files held by third parties and relating to the Transferred Assets and
Transferred Liabilities.
(d) Not later than thirty (30) days prior to the anticipated
Closing Date, Seller shall make available to Purchaser (1) a complete and
accurate list of all applicable customer routing and transit numbers and account
numbers with respect to the Branches, (2) files of all applicable customer
signature cards that Seller has with respect to the Deposits and all related
special instructions, and (3) names, addresses and account information on all
products related to the Deposits, including safe deposit box accounting, cash
management services, telephone ▇▇▇▇ payments, online banking payroll customers
and account analysis.
SECTION 4.2 NOTICES TO CUSTOMERS AND OTHERS.
Not later than thirty (30) days prior to the anticipated Closing Date
(or such other time as may be required by law), Seller and Purchaser shall
jointly, at Purchaser's expense, notify customers with Deposits that, subject to
the terms and conditions hereof, Purchaser will be assuming the Deposit
Liabilities, and Seller and Purchaser shall join in providing, where
appropriate, all notices to customers of the Branches and all other Persons as
Seller or Purchaser, as the case may be, is or are required to give under
applicable law or the terms of any agreements between Seller and any customer in
connection with the transactions contemplated hereby. The form and content of
such notice shall be subject to the reasonable approval of both parties.
Following a date not earlier than sixty (60) days prior to the Closing Date
anticipated by the parties, or such earlier date to which the parties shall
agree, Purchaser may communicate with and deliver information to depositors and
other customers of the Branches concerning this Agreement and the business of
Purchaser. The form and content of such communications shall be subject to the
reasonable approval of Seller. Upon request by Purchaser, Seller will provide
reasonable assistance to Purchaser in mailing or causing to be mailed such
communications, at Purchaser's expense.
SECTION 4.3 DIRECT DEPOSITS.
Seller shall transfer to Purchaser not later than the Closing Date all
of those Automated Clearing House ("ACH") and FedWire direct deposit
arrangements related (by agreement or other standing arrangement) to Deposits.
As soon as practicable after the receipt of all Regulatory Approvals (except for
the expiration of statutory waiting periods), Seller will deliver to Purchaser a
listing in a format mutually agreed upon by the parties of all such direct
deposit records. In connection with their respective obligations under Section
4.1, Purchaser and Seller shall cooperate in good faith (a) to determine the
method and timing for remitting to Purchaser and settling ACH direct deposits
and FedWire direct deposits relating to accounts constituting Deposits, as well
as such other matters relating thereto as may be necessary or advisable for
purposes of assuring an orderly transition of ownership of the Deposit
Liabilities to Purchaser hereunder and (b) to determine the method and timing
for remitting to Seller and settling ACH direct deposits and FedWire direct
deposits relating to deposit accounts of Seller that are not Deposits, but which
transactions are nonetheless routed to Purchaser as a result of the transfer to
Purchaser of the routing and transit numbers or for other reasons, as well as
such other matters relating thereto as may be necessary or advisable for
purposes of assuring the orderly processing of transactions routed to Purchaser
that relate to deposit accounts of Seller that are not Deposits.
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SECTION 4.4 DIRECT DEBIT.
As soon as practicable after the receipt of all Regulatory Approvals
(except for the expiration of statutory waiting periods), and after the
provision of the notice to depositors contemplated by Section 4.2(a), Purchaser
will send appropriate notice to all customers having accounts constituting
Deposits 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 Seller to Purchaser. Seller shall cooperate in soliciting
the transfer of such authorizations. Such notice shall be in a form reasonably
agreed to by the parties acting in good faith. In connection with their
respective obligations under Section 4.1, Purchaser and Seller shall cooperate
in good faith (a) to determine the method and timing for forwarding to Purchaser
and settling all direct debits relating to accounts constituting Deposits, as
well as such other matters relating thereto as may be necessary or advisable for
purposes of assuring an orderly transition of ownership of the Deposit
Liabilities to Purchaser hereunder and (b) to determine the method and timing
for forwarding to Seller and settling all direct debits relating to deposit
accounts of Seller that are not Deposits, but which transactions are nonetheless
routed to Purchaser as a result of the transfer to Purchaser of the routing and
transit numbers or for other reasons, as well as such other matters relating
thereto as may be necessary or advisable for purposes of assuring the orderly
processing of transactions routed to Purchaser that relate to deposit accounts
of Seller that are not Deposits.
SECTION 4.5 INTEREST REPORTING AND WITHHOLDING.
(a) Unless otherwise agreed to by the parties, Seller will report
to applicable Tax authorities and holders of Deposits, with respect to the
period from January 1 of the year in which the Closing occurs through the
Closing Date, all interest (including for purposes hereof dividends and other
distributions with respect to money market accounts) credited to, withheld from
and any early withdrawal penalties imposed upon the Deposits. Purchaser will
report to the applicable Tax authorities and holders of Deposits, with respect
to all periods from the day after the Closing Date, all such interest credited
to, withheld from and early withdrawal penalties imposed upon such Deposits. Any
amounts required by any Governmental Authority to be withheld from any of the
Deposits through the Closing Date will be withheld by Seller in accordance with
applicable law or appropriate notice from any Governmental Authority and will be
remitted by 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 Purchaser in accordance with applicable law or the
appropriate notice from any Governmental Authority and will be remitted by
Purchaser 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 Purchaser
is obligated to remit such amounts to the applicable Governmental Authority,
Seller will pay to Purchaser that portion of any sums theretofore withheld by
Seller from any Deposits that are required to be remitted by Purchaser pursuant
to the foregoing and shall directly remit to the applicable Governmental
Authority that portion of any such sums that are required to be remitted by
Seller.
(b) Unless otherwise agreed by the parties, Seller shall be
responsible for delivering to payees all Internal Revenue Service notices with
respect to information reporting and tax identification numbers required to be
delivered through the Closing Date with respect to the Deposits, and Purchaser
shall be responsible for delivering to payees all such notices required
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to be delivered following the Closing Date with respect to the Deposits.
Purchaser and Seller shall, prior to the Closing Date, consult and Seller shall
take reasonable actions as are necessary to permit Purchaser timely to deliver
such Internal Revenue Service notices required to be delivered following the
Closing Date.
(c) Unless otherwise agreed by the parties, Seller will make all
required reports to applicable Tax authorities and to obligors on Purchased
Loans, with respect to the period from January 1 of the year in which the
Closing occurs through the Closing Date, concerning all interest and points
received by Seller. Purchaser will make all required reports to applicable Tax
authorities and to obligors on Purchased Loans, with respect to all periods from
and after the day after the Closing Date, concerning all such interest and
points received.
SECTION 4.6 ATM/DEBIT CARDS.
Seller will provide Purchaser with a list of ATM access/debit cards
(including any point-of-sale cards) issued by Seller to depositors of any
Deposits, and a data processing record in Seller's standard format containing
all addresses therefor and all related information required to support an
automated conversion, in each case as soon as practicable after the receipt of
all Regulatory Approvals (except for the expiration of any statutory waiting
periods). At the Closing, Seller will provide Purchaser with a revised data
processing record through the Closing, and, within thirty (30) days prior to the
Closing Date anticipated by the parties, all customer PINs or algorithms or
logic used to generate PINs.
SECTION 4.7 LEASING OF PERSONAL AND REAL PROPERTY.
Seller shall take such actions as may be mutually agreed with Purchaser
with respect to any Personal Property Lease or Real Property Lease that is
currently in effect but that would otherwise expire on or prior to the Closing
(including renewing or extending such Personal Property Lease or Real Property
Lease on such terms and conditions as Seller and Purchaser may mutually agree).
In the event that Seller and Purchaser are unable to reach agreement pursuant to
the preceding sentence with respect to any Personal Property Lease or Real
Property Lease, Seller shall use reasonable best efforts to renew or extend on a
month-to-month basis any such Personal Property Lease or Real Property Lease;
provided, however, that no such renewal or extension shall be for a fixed term
exceeding one year without the prior written consent of Purchaser, and Seller
shall consult with Purchaser prior to renewing or extending any Real Property
Lease or any material Personal Property Lease. Seller shall not cancel,
terminate or amend (other than as provided in the preceding sentence relating to
extensions) any such Personal Property Lease or Real Property Lease without the
prior written consent of Purchaser. Notwithstanding the foregoing, Seller shall
use reasonable best efforts to amend any Personal Property Leases in order to
transfer the related Personal Property to Purchaser pursuant to Article II if
such amendment is required to effect such transfer.
SECTION 4.8 NOTICES TO OBLIGORS ON PURCHASED LOANS.
(a) Purchaser shall no later than fifteen (15) days prior to the
anticipated Closing Date prepare and transmit, at Purchaser's sole cost and
expense, to each obligor on each Purchased Loan, a notice in a form satisfying
all legal requirements to the effect that the
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Purchased Loan will be transferred to Purchaser. To the extent that Purchaser's
notice pursuant to the prior sentence shall be legally insufficient, Seller
agrees, at Purchaser's sole expense, to provide all Purchased Loan obligors with
all required notices of the assignment and transfer of the Purchased Loans.
(b) To the extent that any of the Purchased Loans transferred
from Seller to Purchaser involve a transfer of servicing as defined and governed
by the Real Estate Settlement Procedure Act (12 U.S.C. Section 2601 et seq.),
Seller and Purchaser will jointly coordinate any appropriate required customer
notices.
ARTICLE V
INDEMNIFICATION
SECTION 5.1 SELLER'S INDEMNIFICATION OF PURCHASER.
Subject to any limitations in this Section 5.1 and Section 5.4, Seller
and its respective successors and assigns (it being understood and agreed that,
in the event of a liquidation or dissolution of Parent, no Person shall be
deemed to be a successor or assign of Seller or Parent solely as a result of
such Person's status as a stockholder of Parent immediately prior to such
liquidation or dissolution) shall indemnify, hold harmless, and defend Purchaser
and its representatives, controlling persons and Affiliates from and against any
Losses arising out of or relating to (a) any breach by Seller of any of its
covenants or agreements contained herein occurring prior to the Effective Time,
(b) any breach by Seller of any of its representations and warranties contained
herein, (c) transactions or operations of the Branch Banking Operations on or
before the Effective Time, (d) any Excluded Liabilities or (e) any breach of any
of Seller's representations, warranties, covenants and agreements contained in
the Transition and Services Agreement. Purchaser shall only be entitled to
indemnity pursuant to this Section 5.1 for any alleged or actual breach of the
representations and warranties contained in Section 6.6 or 6.16 to the extent
that such breach has not been taken into account pursuant to Section 2.4 or 2.5.
SECTION 5.2 PURCHASER'S INDEMNIFICATION OF SELLER.
Purchaser and its successors and assigns shall indemnify, hold harmless,
and defend Seller and its representatives, controlling persons and Affiliates
from and against any Losses arising out of or relating to (a) any breach by
Purchaser of any of its covenants or agreements contained herein occurring prior
to the Effective Time, (b) any breach by Purchaser of any of its representations
and warranties contained herein, (c) actions or omissions of Purchaser occurring
from and after the Effective Time in conducting the Branch Banking Operations or
otherwise relating to the Transferred Assets or the Transferred Liabilities or
(d) any breach of any of Purchaser's representations, warranties, covenants or
agreements contained in the Transition and Services Agreement.
SECTION 5.3 CLAIMS FOR INDEMNITY.
(a) A claim for indemnity shall be made by the claiming party at
any time prior to the applicable Claim Limitation Anniversary by the giving of
written notice thereof to
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the other party or, in the case of Seller, to Parent. Such written notice shall
set forth in reasonable detail the basis upon which such claim for indemnity is
made. In the event that any bona fide claim is made within such period, the
indemnity relating to such claim shall survive until such claim is resolved. No
claim for indemnity may be made at any time at or after the first anniversary of
the Effective Time (excluding claims for indemnity with respect to (1) the
representations and warranties contained in Section 6.3 or Section 7.3, which
may be made until the sixth anniversary of the Effective Time, (2) the
representations and warranties contained in Section 6.14, which may be made at
any time up to the date ending thirty (30) days after the applicable statutes of
limitations with respect thereto and (3) Section 5.1(c), Section 5.1(d), or
Section 5.2(c), which may be made at any time after the Effective Time) and no
indemnity shall be available thereafter in accordance with the provisions of
this Article V. The applicable claim limitation period, as provided in the
preceding sentence, is hereby referred to as the "CLAIM LIMITATION ANNIVERSARY."
(b) In the event that any Person or entity not a party hereto
shall make any demand or claim or file or threaten to file any lawsuit, which
demand, claim or lawsuit could result in any Loss to a party hereto of the kind
for which such party is entitled to indemnification pursuant to Section 5.1 or
5.2, such indemnified party shall notify the indemnifying party of such demand,
claim or lawsuit within thirty (30) Business Days of such demand, claim, filing
or threat; provided, however, that any failure by the indemnified party to so
notify the indemnifying party shall not relieve the indemnifying party from its
obligations hereunder, except to the extent that the indemnifying party is
actually prejudiced by such failure to be given such notice. Following receipt
of notice of a demand, claim or lawsuit, and unless counsel to the indemnified
party shall have determined in good faith that the assumption of such defense by
the indemnifying party would be inappropriate due to a conflict or potential
conflict of interest or the availability of defenses not available to the
indemnifying party, the indemnifying party shall have the option, at its cost
and expense, to assume the defense of such matter and to retain counsel (not
reasonably objected to by the indemnified party) to defend any such demand,
claim or lawsuit, and the indemnifying party shall not be liable to the
indemnified party for any fees of other counsel or any other expenses (except as
expressly provided to the contrary herein) with respect to the defense of such
claim or litigation, other than reasonable fees and expenses of counsel employed
by the indemnified party for any period during which the indemnifying party has
not assumed the defense thereof. The indemnified party shall have the option of
joining the defense of such demand, claim or lawsuit (which shall be at the cost
and expense of the indemnified party unless (1) counsel to the indemnified party
determines in good faith that joint representation would be inappropriate due to
a conflict or potential conflict of interest or the availability of defenses not
available to the indemnifying party or (2) the indemnifying party fails to
assume the defense of such demand, claim or lawsuit within a reasonable period
of time following written notice thereof) with counsel not reasonably objected
to by the indemnifying party and counsel for each party shall, to the extent
consistent with its professional responsibilities, cooperate with the other
party and any counsel designated by that party. In effecting the settlement of
any such demand, claim or lawsuit, the indemnifying party, or the indemnified
party, as the case may be, shall act in good faith, shall consult with the other
party and shall enter into only such settlement as the other party shall consent
to, such consent not to be unreasonably withheld or delayed. An indemnifying
party shall not be liable for any settlement not made in accordance with the
preceding sentence.
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SECTION 5.4 LIMITATIONS ON INDEMNIFICATION.
(a) Seller shall not be required to indemnify Purchaser, and
Purchaser shall not be required to indemnify Seller, unless the aggregate amount
of all Losses incurred by Purchaser or Seller pursuant to Section 5.1 or 5.2 (as
the case may be), exceeds $3 million. Once such aggregate amount of Losses
incurred by Purchaser, on the one hand, or Seller, on the other hand, exceeds $3
million, Purchaser or Seller, as the case may be, shall thereupon be entitled to
indemnification only for amounts in excess of such $3 million; provided,
however, that the limitations contained in this sentence and the immediately
preceding sentence shall not apply to any claim of common law fraud alleged to
have been committed by or on behalf of the indemnifying party or an Affiliate
thereof upon the indemnified party or claims for indemnification relating to the
breach of any representation or warranty contained in Section 6.14 or to any
Transferred Liabilities or Excluded Liabilities, as applicable.
(b) Neither Seller, on the one hand, nor Purchaser, on the other
hand, shall be obligated to indemnify the other for Losses that exceed $60
million in the aggregate with all Losses asserted by such party; provided,
however, that the limitations contained in this sentence shall not apply to any
claim of common law fraud, alleged to have been committed by or on behalf of the
indemnifying party or an Affiliate thereof upon the indemnified party or claims
for indemnification for Transferred Liabilities or Excluded Liabilities, as
applicable.
(c) Following the Closing, the sole and exclusive remedy of the
parties hereto with respect to any and all claims relating to the matters
addressed in Section 5.1 or 5.2 (other than claims of common law fraud alleged
to have been committed by or on behalf of the indemnifying party or an Affiliate
thereof upon the indemnified party) shall be pursuant to the indemnification
provisions set forth in this Article V; provided, however, that the parties may
seek to enforce specifically this Agreement and the terms and conditions hereof.
(d) Nothing in this Article V shall affect the rights and
remedies of Purchaser or Seller with respect to any breach by the other of any
of their covenants or agreements to be performed at or after the Effective Time.
SECTION 5.5 TREATMENT OF INDEMNIFICATION PAYMENTS.
Seller and Purchaser agree to treat any indemnification payment under
this Article V as an adjustment of the consideration paid for the Transferred
Assets for income Tax purposes.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Purchaser as follows:
SECTION 6.1 CORPORATE ORGANIZATION; CORPORATE AUTHORITY.
Seller is a national bank duly organized and validly existing under the
laws of the United States. Seller and Parent have the corporate power and
authority to carry on its respective
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businesses as currently conducted, to execute and deliver this Agreement and
related documents and Guarantee, respectively, and to effect the transactions
contemplated hereby and the Other Transaction. No further corporate
authorization is necessary for Seller or Parent to consummate the transactions
contemplated hereby or the Other Transaction or the Guarantee, respectively,
except for receipt of the Stockholder Approval.
SECTION 6.2 NO VIOLATION.
Except as set forth in Schedule 6.2, assuming receipt of the required
approvals referenced under Section 6.15 and the Stockholder Approval, neither
the execution and delivery hereof or of the Guarantee, nor the consummation of
the transactions contemplated herein or the Other Transaction or the Guarantee,
(a) will violate or conflict with (i) the Articles of Association, Certificate
of Incorporation, or Bylaws of Seller or Parent, as applicable or (ii) any of
the leases constituting Transferred Assets (subject to obtaining all required
landlord consents) or (b) will violate or conflict in any material respect with
(i) any provision of any agreement or any other restriction of any kind to which
Seller or Parent is a party or by which Seller or Parent, the Transferred Assets
or the Transferred Liabilities are bound; (ii) any statute, law, decree,
regulation, or order of any Governmental Authority applicable to Seller or
Parent; or (iii) any provision that will result in a default under, or cause the
acceleration of the maturity of, any obligations or loans to which Seller or
Parent is a party.
SECTION 6.3 ENFORCEABLE AGREEMENT.
This Agreement has been duly executed and delivered by Seller, and upon
execution and delivery by Purchaser, will be the legal, valid, and binding
agreement of Seller, enforceable against Seller in accordance with its terms,
and the Guarantee has been duly executed and delivered by Parent, and upon
execution and delivery by Purchaser, will be the legal, valid and binding
agreement of Parent enforceable in accordance with its terms, except, in each
case, as enforcement may be limited by bankruptcy, insolvency, reorganization,
moratorium, receivership, conservatorship, or similar laws or judicial decisions
relating to or affecting creditors' rights generally or the rights of creditors,
or of the FDIC as insurer, regulator, conservator, or receiver, of banks the
accounts of which are insured by the FDIC in particular.
SECTION 6.4 NO BROKERS.
All negotiations relative hereto and the transactions contemplated
hereby have been carried on by Seller or Parent and Purchaser, and there has
been no participation or intervention by any other Person, firm or corporation
employed or engaged by or on behalf of Seller or Parent in such a manner as to
give rise to any valid claim against Seller or Purchaser for a brokerage
commission, finder's fee or like commission, except that Seller and Parent have
engaged Credit Suisse First Boston Corporation and will be solely responsible
for its fees and expenses.
SECTION 6.5 PERSONAL PROPERTY.
Seller owns, and will convey to Purchaser at the Closing, all of
Seller's right, title, and interest to all of the Personal Property, which
constitutes good title, free and clear of any mortgages, liens, security
interests, pledges or encumbrances of any kind or nature ("LIENS"), other than
any such Liens that are reflected in the Net Book Value of the Personal Property
for
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purposes of Section 2.2 or that do not materially detract from the value of or
interfere with the use of the Personal Property. Except for the Excluded Assets,
the Personal Property and other Transferred Assets constitute (or, in the case
of the books and records, provide access to) all of the assets required to
conduct the Branch Banking Operations in all material respects as presently
conducted.
SECTION 6.6 REAL PROPERTY AND THE LEASED PREMISES.
(a) Except as set forth on Schedule 6.6, Seller has good,
marketable and insurable fee simple title to the Real Property, subject to any
applicable Permitted Encumbrances and any Title Defect addressed pursuant to the
provisions of Section 2.4 and Section 2.8, and valid leasehold interests in all
of the Leased Premises, subject to any applicable Permitted Encumbrances, a
complete and accurate description of which properties (together with a complete
and accurate list of all tenants under Tenant Leases) is set forth on Schedule
2.1(a)(1)(A), Schedule 2.1(a)(1)(B), Schedule 2.1(a)(2)(A), Schedule
2.1(a)(2)(B), and Schedule 2.1(a)(2)(C).
(b) Except as specifically set forth on Schedule 2.1(a)(1)(A) or
Schedule 2.1(a)(1)(B), there are no pending, or, to the knowledge of Seller,
threatened or contemplated condemnation or similar proceedings affecting the
Real Property or any portion thereof. Seller will present to Purchaser, within
five (5) days after receipt by Seller, any notices that it receives relating to
such a proceeding or any condemnation that relates to the Real Property. To the
knowledge of Seller, there exists no fact or condition that would result in the
termination of the existing access to the Real Property.
(c) Except as specifically set forth on Schedule 2.1(a)(1)(A),
Schedule 2.1(a)(1)(B), Schedule 2.1(a)(2)(A), Schedule 2.1(a)(2)(B) or Schedule
2.1(a)(2)(C), Seller has not entered into any agreement for the sale, transfer,
assignment or other disposition of the Real Property or the Leased Premises or
any interest therein.
(d) Except as specifically set forth on Schedule 2.1(a)(1)(A) or
Schedule 2.1(a)(1)(B), and other than the Assumed Contracts, Seller has not
contracted for any services or made any commitments or obligations therefor that
will become binding upon Purchaser with respect to the Real Property.
(e) The Real Property Leases are valid, binding, and existing
leases that are in full force and effect and under which Seller, as lessee, is
entitled to possession of the Leased Premises. Seller has made available to
Purchaser true and complete copies of all Real Property Leases. No Real Property
Lease is subject to any lease, mortgage, deed or trust or other lien or interest
that would entitle the holder thereof to interfere materially with or disturb
the lessee's rights under such Real Property Lease so long as the lessee is not
in default under such Real Property Lease beyond any applicable cure period. To
Seller's knowledge, no event or circumstance has occurred and is continuing that
constitutes a default or would, with the lapse of time or receipt of notice or
both, constitute a default under any of the Real Property Leases. Subject to
Seller's obtaining any necessary landlord consents, the assignment of such Real
Property Leases will transfer to Purchaser all of Seller's rights under the Real
Property Leases.
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SECTION 6.7 CONDITION OF PROPERTY.
Except as would not individually or in the aggregate constitute a Seller
Material Adverse Effect, each Real Property and Leased Premises (a) is in good
operating condition and repair and, to Seller's knowledge, structurally sound,
with no material alterations or repairs being required thereto under applicable
law or insurance company requirements, (b) consists of sufficient land and
lawful means of access to permit the use thereof in the manner and for the
purposes to which they are presently devoted, and (c) is otherwise suitable and
sufficient in all material respects (whether physical, structural, legal, or
otherwise, and including the import of relevant lease terms) for its current
use, operation and occupancy as a bank branch. No Real Property or, to Seller's
knowledge, any Leased Premises, is subject to any mortgage, security agreement,
sales contract, option, right of first refusal or similar agreement or
arrangement with any third party. The Transferred Assets include all material
real estate utilized by Seller in the Branch Banking Operations. To Seller's
knowledge, there is no pending or threatened imposition of material assessments
or Tax increases against any Real Property or Leased Premises.
SECTION 6.8 LABOR MATTERS; EMPLOYEES.
(a) No Employee is a party to any collective bargaining
agreement, contract or other agreement or understanding with a labor
organization of any type, nor is Seller, with respect to any Employee, the
subject of any material proceeding asserting it has committed an unfair labor
practice in violation of the National Labor Relations Act or any other similar
or comparable state law seeking to compel it to bargain with any labor
organization as to wages and conditions of employment, nor to Seller's knowledge
is any such proceeding threatened, nor to Seller's knowledge is there any strike
or similar labor dispute by the Employees pending or threatened. Seller is
unaware of any efforts during the past five years involving any Employee seeking
to certify a collective bargaining unit or engaging in any other union
organizational activity.
(b) Schedule 6.8 contains a complete and accurate list in all
material respects (and Seller will deliver a revised Schedule 6.8 no fewer than
five (5) days prior to the Closing complete and accurate in all material
respects) of all Employees, their date of commencement of employment, their
positions, their business locations, their annual/weekly/hourly rates of
compensation, average scheduled hours per week and their status as full or
part-time and active or on leave. Schedule 6.8 sets forth a complete and
accurate list of each Employee who is a party to any written employment,
retention, severance or similar agreement with Seller, and Seller has made
available true and complete copies of each such agreement. Schedule 6.8 lists
and Seller has made available to Purchaser each employee benefit plan, program
or other arrangement providing benefits to any Employee or any beneficiary or
dependent thereof that is sponsored or maintained by Seller or any of its
Affiliates or to which Seller or any of its Affiliates contributes or is
obligated to contribute, including any employee welfare benefit plan within the
meaning of Section 3(1) of ERISA, any employee pension benefit plan within the
meaning of Section 3(2) of ERISA (whether or not such plan is subject to ERISA)
and any bonus, incentive, deferred compensation, vacation, stock purchase, stock
option, severance, employment, change of control or fringe benefit plan,
agreement, program or policy (collectively, the "BENEFIT PLANS"). Except as set
forth on Schedule 6.8 or any implied contract
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arising solely as a result of California law, no Employee is a party to any
individual contract, written or oral, express or implied, for the employment of
such Employee or the provision of severance or change of control benefits.
Except as set forth on Schedule 6.8, no Benefit Plan is a multiemployer plan
with the meaning of Section 3(37) of ERISA.
(c) Except as set forth on Schedule 6.8, there are no material
complaints, charges or claims against Seller pending or, to the knowledge of
Seller, threatened in respect of Employees.
SECTION 6.9 CERTAIN CONTRACTS.
Each of the material Personal Property Leases, Safe Deposit Contracts
and Assumed Contracts is valid and subsisting, in full force and effect, and
Seller (and, to the knowledge of Seller, all other parties thereto) have
performed in all material respects all obligations required to be performed by
Seller (or such other party, as applicable) thereunder; and no condition exists
that constitutes or, with notice, or lapse of time, or both, would constitute a
default thereunder on the part of Seller, or, to the knowledge of Seller, on the
part of any of the other parties to any thereof. True and complete copies of
each Assumed Contract (including any addenda, annexes, attachments, exhibits,
schedules or amendments thereto) have previously been made available to
Purchaser.
SECTION 6.10 PURCHASED LOANS.
(a) Seller has full power and authority to hold each Purchased
Loan, and has good and marketable title to the Purchased Loans, free and clear
of any Liens. Seller is authorized to sell and assign the Purchased Loans to
Purchaser and, upon assignment, Purchaser will have the rights of Seller with
respect to the Purchased Loans in accordance with the terms and conditions
thereof.
(b) Each Purchased Loan (such term to include, for purposes of
this paragraph, the principal documents relating to such Purchased Loans,
including notes, mortgages, security instruments, and guarantees) was originated
and has been administered in conformity in all material respects with applicable
laws and regulations; and its principal balance as shown on Seller's books and
records is true and correct as of the last day shown thereon. Seller has
complied in all material respects with all of its obligations under the
Purchased Loans and, to Seller's knowledge, each Purchased Loan represents the
valid and binding obligation of the obligor(s) thereunder, enforceable by the
holder thereof in accordance with its terms, except as (1) the enforceability
thereof may be limited by bankruptcy, insolvency, moratorium or other similar
laws affecting the enforcement of creditors' rights generally, (2) the
availability of equitable remedies may be limited by equitable principles of
general applicability and (3) such modifications to the terms thereof as may be
required pursuant to the Soldiers and Sailors Relief Act of 1940, as amended.
(c) Each Purchased Loan that is secured by collateral is secured
by a perfected mortgage or security interest in the collateral in favor of
Seller as mortgagee or secured party. Except as set forth on Schedule 6.10, no
collateral has been released from the lien granted to Seller, unless approved by
Seller and documented in its files.
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SECTION 6.11 DEPOSIT LIABILITIES.
The Deposit Liabilities are insured by the FDIC to the fullest extent
permitted by federal law and no action is pending or has been threatened by the
FDIC against Seller with respect to the termination of such insurance, and all
premiums and assessments required to be paid in connection therewith have been
paid when due by Seller. The Deposit Liabilities were opened, extended or made,
and have been maintained, in all material respects in accordance with all
applicable federal, state and local laws, regulations, rules and orders. The
Deposit Liabilities (a) are in all respects genuine and enforceable obligations
of Seller and (b) except as set forth in Schedule 6.11 were acquired in the
ordinary course of Seller' business. Seller has made available to Purchaser any
material document setting forth the terms and agreements relating to the Deposit
Liabilities. During the two (2) years preceding the date hereof, neither Seller
nor any of its Affiliates has transferred or booked any material amount of
deposit liabilities previously booked to a branch or business location of any
Affiliate of Seller, other than a Branch. Except as set forth on Schedule 6.11,
none of the Deposit Liabilities constitute Brokered Deposits.
SECTION 6.12 BOOKS, RECORDS, DOCUMENTATION, ETC.
The books and records being transferred to Purchaser hereunder are
complete, correct and accurate in all material respects, have been maintained in
a consistent and a customary manner, and are in material compliance with all
applicable federal and state laws and regulations and customary banking
practices. The deposit- and lending-related forms, notices, statements, and
related documentation, as well as Seller's policies, procedures, and practices
with respect thereto, used in connection with the Branch Banking Operations
comply in all material respects with applicable federal and state laws and
regulations.
SECTION 6.13 LITIGATION AND REGULATORY PROCEEDINGS.
Except as set forth on Schedule 6.13 and processing in the ordinary
course of regulatory applications contemplated by Section 6.15, there are no
actions, causes of action, complaints, claims, suits or proceedings pending or,
to Seller's knowledge, threatened against Seller and affecting or relating to
any of the Transferred Assets or Transferred Liabilities or that could
reasonably be expected to have a Seller Material Adverse Effect, whether at law
or in equity or before or by a Governmental Authority. No Governmental Authority
has notified Seller that it would oppose or not approve or consent to the
transactions contemplated hereby or the Other Transaction and Seller knows of no
reason (provided that Seller makes no representation or warranty with respect to
any reason relating solely to Purchaser or its Affiliates) for any such
opposition, disapproval or nonconsent. Except as set forth on Schedule 6.13,
neither Seller nor any of its Affiliates is a party to any written order,
decree, agreement or memorandum of understanding with, or commitment letter or
similar submission to, any Governmental Authority charged with the supervision
or regulation of depository institutions, nor has Seller been advised by any
such agency or authority that it is contemplating issuing or requesting any such
order, decree, agreement, memorandum or understanding, commitment letter or
submission.
SECTION 6.14 TAX MATTERS.
Except as set forth on Schedule 6.14:
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(a) Seller has filed all Tax Returns required to be filed
relating to the ownership and operation of the Transferred Assets. All such Tax
Returns were correct and complete in all material respects. All Taxes relating
to the ownership and operation of the Transferred Assets owed by Seller (whether
or not shown on any Tax Return) have been paid. Seller is not the beneficiary of
any extension of time within which to file any Tax Return relating to the
ownership and operation of the Transferred Assets. No claim has ever been made
by an authority in a jurisdiction where Seller does not file Tax Returns
relating to the ownership and operation of the Transferred Assets that it is or
may be subject to taxation by that jurisdiction. There are no security interests
on any of the Transferred Assets of Seller that arose in connection with any
failure (or alleged failure) to pay any Tax.
(b) Seller has withheld and paid all Taxes relating to the
ownership and operation of the Transferred Assets required to have been withheld
and paid in connection with amounts paid or owing to any Employee, independent
contractor, creditor, stockholder, or other third party through the Effective
Time.
(c) There is no dispute or claim concerning any Tax Liability of
Seller relating to the ownership and operation of the Transferred Assets either
(1) claimed or raised by any authority in writing or (2) as to which any of
Seller's directors and officers (and Employees responsible for Tax Matters) has
knowledge.
(d) None of the Transferred Liabilities is an obligation to make
a payment that will not be deductible under Section 280G of the Code.
SECTION 6.15 CONSENTS AND APPROVALS.
Except for the Regulatory Approvals and third party consents set forth
on Schedule 6.15, no consents, approvals, filings or registrations with any
third party or any public body, agency or authority are required in connection
with Seller's consummation of the transactions contemplated hereby or the Other
Transaction or Parent's performance of the Guarantee, other than any required
lessor consents to the assignment of the Real Property Leases and required
consents to the assignment of the Assumed Contracts.
SECTION 6.16 ENVIRONMENTAL LAWS.
(a) Seller has made available to Purchaser true and complete
copies of all Existing Environmental Reports. Except as disclosed on Schedule
6.16, (1) there are no violations of any Environmental Laws or any Environmental
Liabilities or the presence (including in any underground or other storage
tanks) of any Hazardous Substance on or under any Real Property or Leased
Premises, (2) the Real Property and, to Seller's knowledge, the Leased Premises
are not subject to any Lien, court order, administrative order or decree,
imposed by or arising under any Environmental Law, and there are no proceedings
pending, or to Seller's knowledge threatened, for the imposition of any Lien
under, or alleging the violation of or any liability under, any Environmental
Law, (3) Seller has complied and is now complying with, and each Real Property
and Leased Premises has been operated in accordance with, in all material
respects, all Environmental Laws applicable to the Real Property or Leased
Premises, and (4) Seller has not received any notice from any person or
Governmental Authority alleging that
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Seller or any Real Property or Leased Premises are not in compliance with, or
seeking to impose any liability under, any Environmental Law.
(b) There are no present or, to Seller's knowledge, past actions,
activities, circumstances, events or incidents, including any storage or
disposal, or release, discharge or emission, of Hazardous Substance, that could
form the basis for assertion of any Environmental Liability with respect to any
Real Property or Leased Premises.
(c) To Seller's knowledge, no Purchased Loan is secured by real
property for which there is a threat of potential Environmental Liability that
could reasonably be expected to exceed $100,000.
SECTION 6.17 COMMUNITY REINVESTMENT COMPLIANCE.
As of the date hereof, Seller is in compliance in all material respects
with the applicable provisions of the CRA and has received a CRA rating of
"satisfactory" in its most recent exam under the CRA as of the date hereof.
SECTION 6.18 DEPOSIT AND LOAN DATA.
The amount, rate and accrued interest on Deposits and Purchased Loans as
of May 31, 2002, and the past-due status of Purchased Loans as of May 31, 2002,
and all other written or magnetically (or otherwise) recorded financial data and
information, provided by, or to be provided by, Seller to Purchaser in
connection with the transactions contemplated hereby was, or will be, complete
and accurate in all material respects as of the date so provided based on
Seller's books and records and the internal accounting procedures of Seller
consistently applied.
SECTION 6.19 COMPLIANCE WITH LAWS.
The Branch Banking Operations have been conducted by Seller in
compliance in all material respects with all federal, state and local laws,
regulations and ordinances applicable thereto.
SECTION 6.20 ABSENCE OF CERTAIN CHANGES.
Since March 31, 2002, and except as set forth on Schedule 6.20, (a)
there has not been any action taken of the type described in Section 8.3(b)(9)
that, had such action occurred after the date hereof, would be in violation of
such Section 8.3(b)(9), and (b) Purchased Loans have been made in a manner
consistent with past practice as relates to the normal and customary credit
standards and policies of Seller and (c) the overall status of the Purchased
Loans that were outstanding as of March 31, 2002 as relates to credit quality
does not differ in any material respect from such status as of such date.
SECTION 6.21 SOLVENCY.
As of the date hereof, and immediately prior to and after giving effect
to (a) the consummation of the transactions contemplated hereby, including the
transfer of the Transferred Assets and the Transferred Liabilities, and (b) the
consummation of the Other Transaction, Seller
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(i) owns assets the fair saleable value of which is (1) greater than the total
amount of its liabilities (including the amount of any contingent liabilities
estimated on a reasonable basis based on the probability of incurrence of such
contingent liabilities and the magnitude of such contingent liabilities were
they to be fully incurred, whether or not such contingent liabilities meet the
criteria for accrual under generally accepted accounting principles) and (2)
greater than the amount that will be required to pay the probable liabilities of
Seller's indebtedness as such becomes absolute and mature, (ii) has capital that
is not unreasonably small in relation to Seller's business as currently
conducted, or as will be conducted after giving effect to the consummation of
the transactions contemplated hereby and the Other Transaction, and (iii) will
be able to pay its indebtedness and other liabilities (including the reasonably
anticipated amount of subordinated, unmatured, unliquidated and contingent
liabilities) as they become due.
SECTION 6.22 FINANCING.
Seller will have at the close of business on the fifth (5th) Business
Day prior to the Effective Time, sufficient funds available to consummate the
transactions contemplated hereby, including to make any payment pursuant to
Section 2.2.
SECTION 6.23 OPINION OF FINANCIAL ADVISOR.
Seller has received the opinion, dated as of the date hereof, of Credit
Suisse First Boston Corporation, to the effect that the consideration to be
received by the Seller hereunder is fair, from a financial point of view, to
Seller. Seller have delivered to Purchaser a true and complete copy of the
opinion referenced in the preceding sentence.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser hereby represents and warrants to Seller as follows:
SECTION 7.1 CORPORATE ORGANIZATION; CORPORATE AUTHORITY.
Purchaser is a national bank duly organized and validly existing under
the laws of the United States. Purchaser has the corporate power and authority
to carry on the business being acquired, to assume the liabilities being
transferred, to execute and deliver this Agreement and related documents and to
effect the transactions contemplated herein and therein. No further corporate
authorization is necessary for Purchaser to consummate the transactions
contemplated hereby.
SECTION 7.2 NO VIOLATION.
Assuming receipt of the required approvals referenced under Section 7.4,
neither the execution and delivery hereof, nor the consummation of the
transactions contemplated herein will violate or conflict with (a) the Articles
of Association or Bylaws of Purchaser; (b) provision of any agreement or any
other restriction of any kind to which Purchaser is a party or by which
Purchaser is bound; (c) any statute, law, decree, regulation or order of any
Governmental
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Authority applicable to Purchaser; or (d) any material provision that will
result in a default under, or cause the acceleration of the maturity of, any
obligations or loans to which Purchaser is a party, except, in the case of
clauses (b), (c) and (d) as would not have a Purchaser Material Adverse Effect.
SECTION 7.3 ENFORCEABLE AGREEMENT.
This Agreement has been duly executed and delivered by Purchaser and,
upon execution and delivery by Seller, will be the legal, valid, and binding
agreement of Purchaser, enforceable against Purchaser in accordance with its
terms, and the Guarantee has been duly executed and delivered by Purchaser, and
upon execution and delivery by Parent will be the legal, valid and binding
agreement of Purchaser, enforceable against Purchaser in accordance with its
terms, except, in each case, as may be limited by bankruptcy, insolvency,
reorganization, moratorium, receivership, conservatorship, or similar laws or
judicial decisions relating to or affecting creditors' rights generally or the
rights of creditors, or of the FDIC as insurer, regulator, conservator, or
receiver, of banks the accounts of which are insured by the FDIC in particular.
SECTION 7.4 CONSENTS AND APPROVALS.
Except for required regulatory approvals set forth on Schedule 7.4, no
consents, approvals, filings or registrations with any third party or any public
body, agency or authority are required of Purchaser in connection with
Purchaser's consummation of the transactions contemplated hereby, other than
what may be required as a result of any facts or circumstances relating solely
to Seller. Purchaser has no reason to believe that it will not be able to obtain
all required regulatory approvals in a prompt and timely manner.
SECTION 7.5 FINANCING.
Purchaser will have not later than the Effective Time sufficient funds
available to consummate the transactions contemplated hereby, including to make
any payment pursuant to Section 2.2.
SECTION 7.6 NO BROKERS.
All negotiations relative hereto and the transactions contemplated hereby
have been carried on by Seller or Parent and Purchaser, and there has been no
participation or intervention by any other Person, firm or corporation employed
or engaged by or on behalf of Purchaser in such a manner as to give rise to any
valid claim against Seller or Parent for a brokerage commission, finder's fee or
like commission.
SECTION 7.7 LITIGATION AND REGULATORY PROCEEDINGS.
Except as set forth on Schedule 7.7 and proceedings relating to matters
contemplated by Section 7.4, there are no actions, causes of action, complaints,
claims, suits or proceedings pending or, to Purchaser's knowledge, threatened
against Purchaser that would reasonably be expected to materially adversely
affect Purchaser's ability to timely perform its obligations hereunder or
consummate the transactions contemplated hereby, whether at law or in equity or
before or by a Governmental Authority. As of the date hereof, no Governmental
Authority has
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notified Purchaser that it would oppose or not approve or consent to the
transactions contemplated hereby and Purchaser knows of no reason (other than
any reason relating to Seller and its Affiliates) for any such opposition,
disapproval or nonconsent. Except as set forth on Schedule 7.7, neither
Purchaser nor any of its Affiliates is a party to any written order, decree,
agreement or memorandum of understanding with or commitment letter or similar
submission to, any Governmental Authority charged with the supervision or
regulation of depository institutions, in any case that would reasonably be
expected to materially adversely affect Purchaser's ability to timely perform
its obligations hereunder.
SECTION 7.8 COMMUNITY REINVESTMENT COMPLIANCE.
As of the date hereof except as would not have a Purchaser Material
Adverse Effect, Purchaser is in compliance with the applicable provisions of the
CRA and has received a CRA rating of no lower than "satisfactory" in its most
recent exam under the CRA as of the date hereof.
ARTICLE VIII
OBLIGATIONS OF PARTIES PRIOR TO AND AFTER EFFECTIVE TIME
SECTION 8.1 FULL ACCESS.
(a) Until the Closing Date, Seller shall afford to the officers
and representatives of Purchaser, upon reasonable prior notice, reasonable
access during normal business hours of Seller to all properties, Employees,
books, and records pertaining to the Branch Banking Operations, specifically
including but not limited to all books and records relating to the Deposit
Liabilities, the Purchased Loans, the Real Property, the Leased Premises and the
Personal Property. In exercising its rights of access pursuant to the previous
sentence, Purchaser will make reasonable efforts to minimize any disruption to
Seller's business activities and Seller's relations with its customers. Seller
will cooperate with Purchaser to the extent reasonably requested and to the
extent permitted by law to provide Purchaser with information about Employees
and a reasonable opportunity to meet with Employees. Nothing in this Section 8.1
shall require Seller to provide access to or disclose information where such
access or disclosure would violate the rights of customers, result in the loss
of any attorney-client privilege or contravene any law, rule, regulation, order,
judgment or decree. The parties hereto shall make appropriate substitute
disclosure arrangements under circumstances in which the restrictions of the
preceding sentence apply.
(b) Between the date hereof and the Closing Date, the parties
shall meet on at least a monthly basis to discuss matters relating to the Branch
Banking Operations (including credit quality and related issues), systems
conversion, customer communications, employee matters and other issues relating
to the Transferred Assets and Transferred Liabilities and the transactions
contemplated hereby to the extent permitted by applicable law. In addition,
Seller shall provide to Purchaser monthly reports regarding the Purchased Loans
and Deposits, as well as monthly asset quality reports as reasonably requested
by Purchaser, including but not limited to watch loans, past due reports,
non-performing assets, charge-offs, risk rating distribution,
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portfolio growth, industry and product concentrations and composition, and
changes to off-balance sheet exposures.
(c) Any information discovered, disclosed or revealed pursuant to
Sections 2.4, 2.5 or 2.8, Article IV or this Section 8.1, or otherwise disclosed
in connection with entering into or performing the covenants and agreements
contemplated hereby, shall be subject to the provisions of the Confidentiality
Agreement.
SECTION 8.2 APPLICATION FOR APPROVAL.
(a) As soon as reasonably practicable following the execution of
this Agreement, Purchaser shall prepare and file applications and notices
relating to the Regulatory Approvals. Purchaser agrees to process such
applications as promptly as reasonably practicable and to provide Seller
promptly with a copy of such applications as filed (except for any confidential
portions thereof) and all material notices, orders, opinions, correspondence,
and other documents with respect thereto, and to use its reasonable best efforts
to obtain the Regulatory Approvals. Purchaser shall promptly notify Seller upon
receipt by Purchaser of notification that any application provided for hereunder
has been accepted or denied. Seller shall provide all cooperation and
information reasonably requested by Purchaser in connection with Purchaser's
obligations pursuant to this Section 8.2(a) and its compliance with the
requirements of the applicable regulatory authorities.
(b) The parties shall (1) cooperate in all respects with each
other in connection with any filing or submission and in connection with any
investigation or other inquiry relating to the Regulatory Approvals, (2) subject
to applicable law, permit the other party to review and discuss in advance, and
consider in good faith the views of the other in connection with, any proposed
written or material oral communication (or other correspondence or memoranda)
between it and any Governmental Authority, including the applications referred
to in Section 8.2(a), (3) promptly inform each other of and supply to such other
party any communication (or other correspondence or memoranda) received by such
party from, or given by such party to, the OCC or any other Governmental
Authority, in each case regarding or potentially affecting any of the
transactions contemplated hereby, and (4) consult with each other in advance of
any meeting or conference with the OCC or any other Governmental Authority.
SECTION 8.3 CONDUCT OF BUSINESS.
Except as expressly set forth herein or as may otherwise be agreed upon
by Purchaser in writing, (a) Seller will continue to conduct the Branch Banking
Operations (including Deposit and loan pricing) until the Closing in the
ordinary course of business consistent with past practices, and (b) Seller shall
not:
(1) increase or agree to increase, or enter into or modify
any plans, practices or agreements with respect to, the salary,
benefits, remuneration, severance or compensation of, or pay any bonus
to, any Employee (other than, following notice to Purchaser, (A) normal
individual increases in salary, remuneration or compensation to
Employees in the ordinary course of business consistent with past
practice, (B) increases or payments pursuant to agreements outstanding
on the date hereof, including pursuant to
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any severance, retention or bonus program described on Schedule 6.8, and
(C) any other changes to the extent required by applicable law), or
materially increase or materially decrease the number of Employees;
(2) sell, transfer, assign, encumber or otherwise dispose of
or enter into any contract, agreement or understanding to sell,
transfer, assign, encumber or dispose of, or permit any Lien to be
created on, any of the Transferred Assets existing as of the date
hereof;
(3) make or agree to make any material improvements to any
Real Property or Leased Premises, except with respect to commitments for
such made prior to the date hereof and previously disclosed to Purchaser
in writing and for normal maintenance or refurbishing made in the
ordinary course of business consistent with past practice;
(4) file any application or give any notice to relocate or
close any Branch or ATM or relocate or close or, absent an emergency
situation requiring such action, suspend operations at any Branch or ATM
(in which event such suspension shall be permitted only for the duration
of such emergency);
(5) subject to Section 4.7, except in the ordinary course of
business consistent with past practice, amend, terminate or extend any
Real Property Lease, Personal Property Lease, Safe Deposit Contract or
Assumed Contract without the prior written consent of Purchaser (other
than any amendment to any Personal Property Lease or Assumed Contract
required in order to transfer the related assets to Purchaser pursuant
to Article II);
(6) take, or permit any Affiliate to take, any action
impairing in any material respect Purchaser's rights in any Deposit
Liabilities or Transferred Assets or waive any material right, whether
in equity or at law, that it has with respect to any Purchased Loan
(other than collection and work-out procedures undertaken in all
material respects in accordance with Seller's normal and customary
practices relating thereto);
(7) take, or permit any Affiliate to take, any action or fail
to take, or permit any Affiliate to fail to take, any action that is
intended to or is reasonably likely to cause any of the representations
or warranties set forth in Article VI that is not qualified as to
materiality or Seller Material Adverse Effect to be or become untrue in
any material respect individually or in the aggregate, any of the
representations or warranties set forth in Article VI that is qualified
as to materiality or Seller Material Adverse Effect to be or become
untrue in any respect, or any of the conditions set forth in Articles IX
or X not to be satisfied;
(8) increase its pricing on Deposits such that its rates
exceed by more than 25 basis points the average of the rates being paid
by Purchaser, Bank of America, Union Bank, Washington Mutual and ▇▇▇▇▇
Fargo, or their respective Affiliates, in the greater San Francisco Bay
Area; provided, however, that this Section 8.3 shall not be deemed to
prohibit Seller from obtaining Deposits that are Brokered Deposits that
are
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Excluded Liabilities hereunder so long as such activity complies with
all applicable law, regulation and regulatory guidance and does not
prevent, impair or materially delay the completion of the transactions
contemplated hereby or increase the likelihood that any condition to the
parties' obligations to consummate the transactions contemplated hereby
will not be satisfied;
(9) fail to follow Seller's normal and customary practices
and procedures regarding loan pricing, underwriting and recognition of
charge-offs in a manner consistent with past practice;
(10) except as set forth on Schedule 8.3(b)(10), make or
approve any new loan that constitutes a Purchased Loan, or extend or
renew any Purchased Loan, (A) the principal amount of which (together
with any related commitments to extend credit) (i) is equal to or in
excess of $1 million, if such loan, extension or renewal is a secured
loan, or (ii) is equal to or in excess of $500,000 if such loan,
extension or renewal is an unsecured loan, (B) which loan, extension or
renewal is made to a small business customer, or (C) which loan
extension, or renewal would be, if made as of the date hereof,
classified as a high-loan-to-value home equity on Seller's books;
(11) issue any Letter of Credit (A) with a commitment in
excess of (i) $1 million if any amounts drawn on such commitment are to
be secured, or (ii) $500,000 if any amounts drawn on such commitment are
not to be unsecured, or (B) to any obligor with respect to which is a
small business customer; or
(12) agree with, or commit to, any Person to do any of the
things described in the foregoing (1) through (11) except as expressly
permitted hereunder.
SECTION 8.4 SOLICITATION OF CUSTOMERS BY PURCHASER PRIOR TO CLOSING.
At any time prior to the Closing Date, Purchaser will not, and will not
permit any of its Affiliates, if any, to conduct any mass marketing that is
specifically targeted to induce customers whose Deposit Liabilities are to be
assumed or whose Purchased Loans are to be acquired by Purchaser pursuant hereto
to discontinue or limit their account relationships with Seller or to conduct
any media or customer solicitation activities outside of the ordinary course of
business of Purchaser, consistent with past practice, that are specifically
targeted to induce any such customers to discontinue or limit any such
relationships, it being understood and agreed that the foregoing is not intended
to prohibit general advertising or solicitations directed to the public
generally or other similar activities conducted in the ordinary course of
business of Purchaser.
SECTION 8.5 NO SOLICITATION BY SELLER AND ITS AFFILIATES.
For a period of three (3) years following the Effective Time, Seller and
its Affiliates will not, directly or indirectly, (a) establish or conduct a
branch deposit and loan business, or other commercial or retail banking
business, in Northern California, provided, however, that this Section 8.5(a)
shall not apply to the continued conduct of the businesses of Seller or its
Affiliates that are not being acquired by Purchaser hereunder, to the
solicitation or acceptance of deposits of types that are excluded from the
definition of "Average Deposit Balance" hereunder or are otherwise gathered from
wholesale sources, or to the establishment and subsequent conduct of
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new lines of business that are unrelated to the business conducted through the
Branch Banking Operations, (b) solicit deposit or loan business or other
commercial or retail banking business from customers whose Deposit Liabilities
and/or Purchased Loans are assumed or acquired by Purchaser pursuant hereto, or
(c) solicit for employment, retain as an independent contractor or consultant,
induce to terminate employment with Purchaser or otherwise interfere with
Purchaser's employment relationship with any Branch Employee; provided, however,
that this Section 8.5(c) shall not apply if such Branch Employee has been
terminated by Purchaser or if such Branch Employee is hired by Seller or its
Affiliates as a result of a general solicitation for employment in newspaper
advertisements or other periodicals of general circulation not specifically
targeted to employees of Purchaser.
SECTION 8.6 EFFORTS TO CONSUMMATE; FURTHER ASSURANCES.
The parties hereto agree to use all reasonable efforts to satisfy or
cause to be satisfied as soon as practicable their respective obligations
hereunder and the conditions precedent to Closing. Without limiting the
foregoing, Seller shall act diligently in good faith, and shall use its
reasonable best efforts, to assure that it will have sufficient funds available
to consummate the transactions contemplated hereby, including to make any
payment pursuant to Section 2.2, as soon as practicable following the date
hereof. After the Effective Time, (a) Seller will duly execute and deliver such
assignments, bills of sale, deeds, acknowledgments and other instruments of
conveyance and transfer as shall at any time be necessary or appropriate to vest
in Purchaser the full legal and equitable title to the Transferred Assets, and
(b) Purchaser will duly execute and deliver such assumptions, acknowledgments
and other instruments of assumption and transfer as shall at any time be
necessary or appropriate to cause the Transferred Liabilities to be assumed by
Purchaser and to cause Seller to be discharged from all liability and obligation
thereunder.
SECTION 8.7 FEES AND EXPENSES.
Unless expressly stated to the contrary herein, each party will assume
and pay for the expenses it incurs with respect to the purchase and sale of the
Transferred Assets and the assumption of the Transferred Liabilities hereunder;
provided, however, that (a) Purchaser shall pay all fees and expenses associated
with the regulatory application process, (b) each party shall be responsible for
any fee payable to any agent, broker or finder acting on its behalf in this
transaction, (c) except as provided in Section 2.2(d) with respect to Transfer
Taxes that are payable or that arise as a result of the consummation of the
transactions contemplated hereby, Purchaser shall be responsible for the costs,
charges and expenses relating to all title examinations, title search fees,
surveys, title insurance (including but not limited to premiums and the costs of
any endorsements), environmental investigation costs, its own attorneys' and
accountants' fees and expenses, software license and transfer fees, recording
fees, transfer fees, regulatory applications and other expenses arising in
connection therewith as well as all costs and expenses associated with the
transfer or perfection of any security interests or liens securing Purchased
Loans and related motor vehicles transferred hereunder, (d) Purchaser shall be
responsible for the costs of removing Seller's signage from the Branches and (e)
Seller shall be responsible for its own attorneys' and accountants' fees and
expenses related to this transaction.
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SECTION 8.8 THIRD PARTY CONSENTS.
(a) Seller shall use its reasonable best efforts to obtain from
lessors or sublessors under Real Property Leases any consents to the assignment
of such leases required under the terms thereof in connection with the
consummation of the transactions contemplated hereby and the removal of Seller's
signage and the installation of Purchaser's signage (the "LANDLORD CONSENTS").
If any such Landlord Consent shall not have been obtained prior to the Closing
then, notwithstanding any other provision hereof, the applicable Real Property
Lease shall not be assigned to Purchaser at Closing (and the Purchase Price
shall not include the Net Book Value thereof) but all other Transferred Assets
and Transferred Liabilities associated with the relevant Leased Premises shall
nevertheless be transferred to Purchaser at the Closing and the parties shall
negotiate in good faith and Seller and Purchaser shall use reasonable best
efforts to make alternative arrangements reasonably satisfactory to Purchaser
that provide Purchaser, to the maximum extent reasonably possible, the benefits
and burdens of the underlying Leased Premises in a manner that does not violate
the applicable Real Property Lease (for the same cost as would have applied if
the relevant consent had been obtained). If any alternative arrangement is
implemented between Seller and Purchaser at or prior to the Closing, the parties
shall continue after the Closing to exercise commercially reasonable efforts to
obtain the related consents that could not be obtained prior to the Closing, and
if such consent is obtained, Seller shall assign to Purchaser the applicable
Real Property Lease pursuant to the terms of this Agreement applicable to leases
assigned at the Closing and the parties shall restructure the applicable
alternative arrangement and Purchaser shall pay Seller any consideration for the
lease assignment that Seller would have received had the lease been assigned at
the Closing.
(b) Seller shall use its reasonable best efforts to obtain from
the parties to any material contract, agreement, license or Personal Property
Lease to be transferred hereunder, any consents to the assignment of any such
material contracts, agreements, licenses and leases required under the terms of
such contract, agreement, license or lease in connection with the consummation
of the transactions contemplated hereby.
SECTION 8.9 INSURANCE.
Seller shall maintain in effect until the Closing Date all casualty and
public liability policies relating to the Real Property and Leased Premises and
the activities conducted thereon and maintained by Seller on the date hereof or
procure comparable replacement policies and maintain such replacement policies
in effect until the Effective Time.
SECTION 8.10 PUBLIC ANNOUNCEMENTS.
Other than the mutually agreed upon press releases and other materials
to be issued upon the announcement of this Agreement, Seller and Purchaser agree
that from and after the date hereof neither shall make any public announcement
or public comment regarding this Agreement or the transactions contemplated
herein without the prior written consent of the other party (which consent shall
not be unreasonably withheld or delayed), unless and only to the extent that (a)
the furnishing or use of such information is required in making any filing or
obtaining any consent or approval required for the consummation of the
transactions contemplated hereunder or (b) the furnishing or use of such
information is required by applicable law, legal proceedings
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or the rules or regulations of the SEC, the Nasdaq Stock Market or the New York
Stock Exchange applicable to the announcing party or its controlling Affiliate.
SECTION 8.11 TAX REPORTING.
Subject to Section 4.5, Seller shall comply with all Tax reporting
obligations in connection with the Transferred Assets and the Transferred
Liabilities for taxable periods (or portions thereof) ending on or before the
Closing Date, and Purchaser shall comply with all Tax reporting obligations with
respect to the Transferred Assets and the Transferred Liabilities for taxable
periods (or portions thereof) beginning after the Closing Date.
SECTION 8.12 ADVICE OF CHANGES.
Seller and Purchaser shall each promptly advise the other party of any
change or event (a) having a Seller Material Adverse Effect or Purchaser
Material Adverse Effect, respectively, (b) that it believes would or would be
reasonably likely to cause or constitute a material breach of any of its
representations, warranties or covenants contained herein or (c) that it
believes would or would be reasonably likely to cause any of the conditions set
forth in Article IX or X not being satisfied.
SECTION 8.13 DEPOSITS.
Seller shall deliver to Purchaser on the date of the calculation of the
Average Deposit Balance and on the Closing Date, a list in electronic format
reasonably acceptable to Purchaser of all Deposits, as of such dates, used to
calculate the Average Deposit Balance and the name, address and tax
identification number of the applicable Deposit holder.
SECTION 8.14 NON SOLICITATION OF TRANSACTIONS.
Neither the Seller nor any of its Affiliates shall, directly or
indirectly, through any officer, director or agent of any of them or otherwise,
encourage, solicit, initiate, negotiate, enter into any agreement with respect
to, or, except, prior to the receipt of the Stockholder Approval, as required by
Parent's fiduciary duties to its stockholders and solely with respect to a bona
fide unsolicited offer (and only after three (3) Business Days' prior written
notice to Purchaser) participate in discussions with respect to or furnish any
information in connection with the sale of all or any part of the Transferred
Assets or Transferred Liabilities, other than the transactions contemplated
hereby. Seller will notify Purchaser orally (within one (1) Business Day) and in
writing (as promptly as practicable) of any inquiry or proposal received with
respect to any such transaction. As of the date hereof, Seller shall, and shall
cause its and its Affiliates' officers, directors and agents to, cease any
pending discussions or negotiations regarding any such transaction.
SECTION 8.15 STOCKHOLDER APPROVAL.
(a) As promptly as practicable following the date hereof, a proxy
statement relating to the Stockholder Meeting (the "PROXY STATEMENT"), will be
prepared and filed by Parent with the United States Securities and Exchange
Commission ("SEC"), and Seller and its Affiliates shall use reasonable best
efforts to have the Proxy Statement cleared by the SEC.
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Seller shall notify Purchaser of the receipt of any comments of the SEC with
respect to the Proxy Statement and shall provide Purchaser copies of all
correspondence with respect thereto. Seller shall afford Purchaser and its
counsel the opportunity to review the Proxy Statement prior to its filing with
the SEC and shall afford Purchaser and its counsel the opportunity to review all
amendments and supplements thereto, and replies to comments thereon, prior to
their being filed with or sent to the SEC, and Purchaser agrees to provide any
comments thereon as promptly as reasonably practicable. As promptly as
practicable following the Proxy Statement being cleared by the SEC, Parent shall
mail and deliver the Proxy Statement to its stockholders. As of the date of
first mailing of the Proxy Statement, the Proxy Statement shall not contain any
statement that, in light of the circumstances under which it is made, is false
or misleading with respect to any material fact, or that omits to state any
material fact necessary in order to make the statements therein not false or
misleading; provided, that neither Parent nor Seller makes any representation as
to information furnished by Purchaser expressly for inclusion in the Proxy
Statement. Prior to the date of Stockholder Meeting, Parent shall correct
promptly any information in the Proxy Statement that shall have become false or
misleading, and Parent shall take all steps necessary to file with, and have
cleared by, the SEC any amendment or supplement to the Proxy Statement so as to
correct the same and cause the Proxy Statement as so corrected to be mailed and
delivered to the stockholders of the Parent.
(b) A meeting of the stockholders of Parent shall be called to be
held as soon as reasonably practicable after the date hereof (the "STOCKHOLDER
MEETING") for the purpose of obtaining the approval of the stockholders of
Parent of the transactions contemplated hereby and a plan of liquidation of
Parent (the "STOCKHOLDER APPROVAL"); Stockholder Approval as used in this
Agreement shall not include any proposal regarding any other matter brought
before the stockholders of Parent at the Stockholder Meeting except for the
transactions contemplated hereby and a plan of liquidation of Parent. The Proxy
Statement shall include the recommendation of Parent's Board of Directors that
Parent's stockholders grant the Stockholder Approval, and Seller and its
Affiliates shall use its reasonable best efforts to obtain the Stockholder
Approval.
SECTION 8.16 EMPLOYEE BENEFIT MATTERS.
(a) Not later than the Business Day prior to the Effective Time,
Purchaser shall offer Comparable Employment as of the Effective Time to each
Employee listed on Schedule 6.8, as long as such Employee is then employed by
and in good standing with Seller. Purchaser shall keep Seller informed on a
reasonably prompt basis of any offer of employment made by Purchaser to an
Employee excluded from Schedule 6.8.
(b) During the period commencing on the Closing Date and ending
no earlier than the first anniversary thereof, (1) Purchaser shall provide the
Employees of the Branch Banking Operations who become employees of Purchaser in
connection with the transactions contemplated by this Agreement (the "BRANCH
EMPLOYEES") with employee benefits substantially comparable in the aggregate to
similarly situated employees of Purchaser, as in effect from time to time and
(2) Purchaser shall maintain in place a severance plan for Branch Employees that
provides severance benefits to eligible Branch Employees no less beneficial in
the aggregate than those provided pursuant to the Parent Employee Severance
Plans as set forth on Schedule 8.16(b) (the "SEVERANCE PLANS") and any
supplemental benefits provided to those
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Branch Employees referenced on Schedule 8.16(b), and otherwise subject to the
payment provisions of the Severance Plans; provided, however, that the provision
thereof relating to a Branch Employee signing a separation agreement as a
condition to eligibility to receive severance payments shall be deemed to refer
to Purchaser's form of separation agreement.
(c) For purposes of eligibility and vesting under the employee
benefit plans of Purchaser for which service is taken into account or
recognized, and that provide benefits to any Branch Employees after the Closing
Date (the "NEW PLANS"), each Branch Employee shall be credited with his or her
years of service from his or her most recent date of hire with Seller or any
predecessor of Seller before the Closing Date, to the same extent as such Branch
Employee was entitled, before the Closing Date, to credit for such service under
any similar employee benefit plans of Seller, except to the extent such credit
would result in a duplication of benefits or for purposes of benefit accrual. In
addition, and without limiting the generality of the foregoing: (1) each Branch
Employee shall be immediately eligible to participate, without any waiting time,
in any and all New Plans to the extent coverage under such New Plan replaces
coverage under a comparable employee benefit plans of Seller in which such
Branch Employee participated immediately before the Closing Date (such plans,
collectively, the "OLD PLANS"); and (2) for purposes of each New Plan providing
medical, dental, pharmaceutical and/or vision benefits to any Branch Employee,
Purchaser shall cause all pre-existing condition exclusions and actively-at-work
requirements of such New Plan to be waived for such employee and his or her
covered dependents, and Purchaser shall cause any eligible expenses incurred by
such employee and his or her covered dependents during the portion of the plan
year of the Old Plan ending on the date such employee's participation in the
corresponding New Plan begins to be taken into account under such New Plan for
purposes of satisfying all deductible, coinsurance and maximum out-of-pocket
requirements applicable to such employee and his or her covered dependents for
the applicable plan year as if such amounts had been paid in accordance with
such New Plan; provided, that Seller provides Purchaser as promptly as
practicable, but in no event later than thirty (30) days following a request
therefor, with such data as may be reasonably requested by Purchaser in
connection therewith (whether from Seller or the applicable plan administrator
or insurer), and Seller delivers to Purchaser an update of such information as
of the Closing Date no later than sixty (60) days following the Closing Date.
SECTION 8.17 PHYSICAL DAMAGE TO REAL PROPERTY.
In the event of any physical damage or destruction, other than ordinary
wear and tear, to any Real Property between the date hereof and the Closing
Date, at the election of Seller, either (a) Seller shall prior to the Closing
Date repair such damage or destruction to return such property to its condition
prior to such damage or destruction, (b) the Property Price of such Real
Property shall be adjusted in the same manner described in Section 2.8 with
respect to Defect Reduction Amounts or (c) Seller shall pay to Purchaser an
amount equal to the sum of (1) the insurance proceeds received by Seller with
respect to such damage or destruction, (2) any applicable deductible amount and
(3) such additional amount as may be required to repair such damage or
destruction to return such property to its condition prior to such damage or
destruction, or, if the damage or destruction is not reasonably capable of
repair, to reflect the difference between the amounts paid under the preceding
clauses (1) and (2) and the Net Book Value of the applicable Real Property.
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SECTION 8.18 SOLVENCY MATTERS.
As soon as practicable after the date hereof, Seller shall engage a
nationally recognized business valuation expert reasonably satisfactory to
Purchaser (the "APPRAISER"), to provide an opinion to the effect that as of
Effective Time after giving effect to (a) the consummation of the transactions
contemplated hereby, including the transfer of the Transferred Assets and the
Transferred Liabilities, and (b) the consummation of the Other Transaction,
Seller (i) will own assets the fair saleable value of which is (1) greater than
the total amount of its liabilities (including the amount of any contingent
liabilities estimated on a reasonable basis based on the probability of
incurrence of such contingent liabilities and the magnitude of such contingent
liabilities were they to be fully incurred, whether or not such contingent
liabilities meet the criteria for accrual under generally accepted accounting
principles) and (2) greater than the amount that will be required to pay the
probable liabilities of Seller's indebtedness as such becomes absolute and
mature, (ii) has capital that is not unreasonably small in relation to Seller's
business as currently conducted, or as will be conducted after giving effect to
the consummation of the transactions contemplated hereby and the Other
Transaction, and (iii) will be able to pay its indebtedness and other
liabilities (including the reasonably anticipated amount of subordinated,
unmatured, unliquidated and contingent liabilities) as they become due (the
"SOLVENCY OPINION"). Seller shall provide all information to the Appraiser as
may necessary to enable to the Appraiser to render the Solvency Opinion, shall
cause the Appraiser to deliver the Solvency Opinion as soon as reasonably
practicable after the date hereof, and shall cause the Appraiser to reaffirm the
Solvency Opinion as of the Closing Date. Except as otherwise set forth on
Schedule 8.18, all costs and expenses for the Appraiser shall be borne equally
by Seller and Purchaser.
SECTION 8.19 ACTIONS WITH RESPECT TO ▇▇▇ AND ▇▇▇▇▇ PLAN DEPOSIT
LIABILITIES.
(a) On or before the Closing Date, Seller shall (1) resign as the
trustee or custodian, as applicable, of each ▇▇▇ and ▇▇▇▇▇ Plan of which it is
the trustee or custodian and whose Deposit Liabilities are being assumed by
Purchaser hereunder (a list of which Plans and the amount of related Deposits as
of the date herein is set forth on Schedule 8.19(a)), (2) to the extent
permitted by the documentation governing each such ▇▇▇ and ▇▇▇▇▇ Plan and
applicable law, appoint Purchaser as successor trustee or custodian, as
applicable, of each such ▇▇▇ and ▇▇▇▇▇ Plan, and Purchaser hereby accepts each
such trusteeship or custodianship under their terms and conditions of
Purchaser's plan documents for its ▇▇▇ and ▇▇▇▇▇ Plans, and assumes all
fiduciary and custodial obligations with respect thereto as of the close of
business the day on which the Deposit Liabilities of such ▇▇▇ and ▇▇▇▇▇ Plans
are being assumed by Purchaser pursuant to the terms hereof, and (3) deliver to
the ▇▇▇ grantor or ▇▇▇▇▇ Plan named fiduciary of each such ▇▇▇ or ▇▇▇▇▇ Plan
such notice of the foregoing as is required by the documentation governing each
such ▇▇▇ or ▇▇▇▇▇ Plan or applicable law. If, pursuant to the terms of the
documentation governing any such ▇▇▇ or ▇▇▇▇▇ Plan or applicable law, (A) Seller
is not permitted to appoint Purchaser as successor trustee or custodian, or the
▇▇▇ grantor or ▇▇▇▇▇ Plan named fiduciary objects in writing to such
designation, or is entitled to, and does, in fact, name a successor trustee or
custodian other than Purchaser, or (B) such ▇▇▇ or ▇▇▇▇▇ Plan includes assets
that are not Deposit Liabilities and are not being transferred to Purchaser, or
the assumption of such deposit liabilities included in such ▇▇▇ or ▇▇▇▇▇ Plan
would result in a loss of qualification of such ▇▇▇ or ▇▇▇▇▇ Plan under the Code
or applicable Treasury Regulations,
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all deposit liabilities of Seller held under such ▇▇▇ or ▇▇▇▇▇ Plan shall be
excluded from the Deposit Liabilities (such excluded deposit liabilities being
herein called the "EXCLUDED ▇▇▇/▇▇▇▇▇ PLAN DEPOSITS"). Upon appointment as a
successor custodian for such ▇▇▇ Deposit Liabilities or as a successor trustee
for such IRAs or ▇▇▇▇▇ Plans, Purchaser shall perform the services and carry out
the duties and obligations required of it under the applicable plans, the Code
and applicable federal and state laws and regulations.
(b) To the extent that the Deposit Liabilities include certain
IRAs or ▇▇▇▇▇ Plans that are required to make certain periodic distributions to
the ▇▇▇ account owner or ▇▇▇▇▇ Plan participant (or beneficiary) either at the
account owner's or participant's request or because the account owner or
participant has attained age 70 1/2, effective as of the Effective Time,
Purchaser agrees to continue to make such periodic distributions in accordance
with the distribution instructions forwarded by Seller to Purchaser. Purchaser
hereby assumes the obligation to pay each minimum distribution required by
federal law by December 31 of the calendar year in which the Effective Time
occurs and, in consideration thereof, Seller agrees not to withhold the amount
of such distributions from the aggregate amount of the Deposit Liabilities.
SECTION 8.20 LETTERS OF CREDIT.
(a) It is the intention of the parties that Purchaser will assume
all obligations accruing after the Effective Time with respect to the Letters of
Credit. Accordingly, Seller and Purchaser agree to use their respective
reasonable best efforts to obtain prior to the Closing Date the consent of the
beneficiary (if necessary) to the assumption of (and the resulting release of
Seller from) the Letters of Credit and/or to issue replacement letters of credit
for those Letters of Credit that are standby Letters of Credit. At least five
(5) Business Days prior to the Closing Date, Seller shall provide to Purchaser a
list of all such Letters of Credit for which consent is required.
(b) Until such time as there are no Letters of Credit, Seller
hereby grants to Purchaser, and Purchaser hereby agrees and commits to acquire,
as of the Closing Date, from Seller a participation in the Letters of Credit
equal to one hundred percent (100%) of the amount thereof.
(c) Seller agrees that, with respect to each request by a
beneficiary for a draw under or payment of a Letter of Credit (a "REQUEST"), it
will (1) promptly provide, by facsimile sent to Purchaser, copies of any and all
documents submitted to support any Request; (2) wait twenty-four (24) hours, or
such shorter time period as may be required under such Letter of Credit, after
sending the facsimile before acting on a Request; (3) act in accordance with law
in deciding whether or not to honor the Request unless directed in writing by
Purchaser to otherwise honor or dishonor a Request, which written direction from
Purchaser shall set forth Purchaser's specific reasons for honor or dishonor, as
the case may be, provided, however, in the event Purchaser has directed Seller
in writing to dishonor a Request that Seller reasonably deems should be honored,
Purchaser's written direction just be accompanied by an indemnification from
Purchaser holding Seller harmless from and against any and all Losses that
Seller may incur arising from Purchaser's direction to dishonor (nothing in this
Section 8.20(c) is intended to limit Purchaser's reimbursement obligation set
forth in Section 8.20(d), and the indemnity
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herein shall not be subject to the time limitations or basket limitations set
forth in Article V), and if such indemnification is not provided to Seller in
writing in a timely fashion, Seller may honor such Request; (4) provide notice
to Purchaser of the action taken on the Request and the amount of the Letter of
Credit Disbursement that may become due pursuant to Section 8.20(d); and (5)
after honoring a Request, send the documents submitted by the beneficiary in
support of a Request as directed by Purchaser.
(d) In the event Seller notifies Purchaser that a Letter of
Credit Disbursement has been made, then Purchaser agrees to pay to Seller on the
day so notified by Seller an amount equal to the Letter of Credit Disbursement;
provided, however, that if such notice was not given by Seller to Purchaser
prior to 2:00 p.m. Pacific Time on such day, then such amount shall be paid by
Purchaser not later than 10:00 a.m. on the next Business Day. Purchaser agrees
to pay Seller any amounts due under this Section 8.20(d) by wire transfer of
immediately available funds to an account previously designated by Seller.
(e) Purchaser also agrees to pay Seller (1) interest on any and
all amounts unpaid by Purchaser when due under Section 8.20(d), from the date
such amounts become due until payment in full, such interest being payable on
demand and accruing at the Federal Funds Rate and (2) any and all out-of-pocket
expenses (including reasonable attorneys' fees) reasonably incurred by Seller in
exercising or enforcing any rights or performing any obligations under Section
8.20(d) and 8.20(e).
(f) Seller shall promptly remit to Purchaser any amounts
subsequently received by Seller from Letter of Credit Customers in respect of
all Letter of Credit Disbursements, and agrees to use reasonable best effects to
collect all amounts that may be owed to Seller from Letter of Credit Customers
in respect of all Letter of Credit Disbursements. Seller also agrees to pay to
Purchaser (1) interest on any and all amounts due to Purchaser under this
Section 8.20(f), from the date Seller receives such amounts until payment in
full, such interest being payable on demand and accruing at the Federal Funds
Rate and (2) any and all out-of-pocket expenses (including reasonable attorneys'
fees) reasonably incurred by Purchaser in exercising or enforcing any rights
under this Section 8.20(f).
ARTICLE IX
CONDITIONS TO PURCHASER'S OBLIGATIONS
The obligation of Purchaser to complete the transactions contemplated
herein is conditioned upon fulfillment or, where legally permitted, waiver, on
or before the Closing Date, of each of the following conditions:
SECTION 9.1 REPRESENTATIONS AND WARRANTIES TRUE.
Each of the representations and warranties made by Seller herein that is
qualified as to materiality or Seller Material Adverse Effect shall be true and
correct as of the date hereof and as of the Effective Time, and each of the
representations and warranties made by Seller herein that is not qualified as to
materiality or Seller Material Adverse Effect shall be true and correct in all
material respects as of the date hereof and as of the Effective Time, in each
case as though such
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representations and warranties were made at and as of such time (except that
representations and warranties that speak as of a specified date shall be so
true and correct as of such date).
SECTION 9.2 OBLIGATIONS PERFORMED.
Seller shall have performed and complied in all material respects with
all obligations, covenants and agreements, taken as a whole, required hereby to
be performed or complied with by it prior to or at the Effective Time.
SECTION 9.3 DELIVERY OF DOCUMENTS.
Seller shall have delivered to Purchaser those items required by Section
3.2(b).
SECTION 9.4 APPROVALS.
The parties shall have obtained the Regulatory Approvals and the
Stockholder Approval. No court or other Governmental Authority of competent
jurisdiction shall have enacted, issued, promulgated, enforced or entered any
statute, judgment, decree, legal restraint or other order (whether temporary,
preliminary or permanent) (an "ORDER") that is in effect and prohibits or makes
illegal the consummation of the transactions contemplated hereby.
SECTION 9.5 NO SELLER MATERIAL ADVERSE EFFECT.
There shall not have been any change, condition, event or development
that, individually or in the aggregate, would constitute a Seller Material
Adverse Effect.
SECTION 9.6 FINANCING.
Seller shall have sufficient funds available to consummate the
transactions contemplated hereby, including to make any payment pursuant to
Section 2.2.
SECTION 9.7 SOLVENCY OPINION.
Purchaser shall have received the Solvency Opinion, dated as of the
Closing Date, in form and substance satisfactory to Purchaser.
SECTION 9.8 LANDLORD CONSENTS.
Seller shall have obtained each Landlord Consent other than those set
forth on Schedule 9.8.
ARTICLE X
CONDITIONS TO SELLER'S OBLIGATIONS
The obligation of Seller to complete the transactions contemplated
herein is conditioned upon fulfillment or, where legally permitted, waiver, on
or before the Closing Date, of each of the following conditions:
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SECTION 10.1 REPRESENTATIONS AND WARRANTIES TRUE.
Each of the representations and warranties made by Purchaser herein that
is qualified as to materiality or Purchaser Material Adverse Effect shall be
true and correct as of the date hereof and as of the Effective Time, and each of
the representations and warranties made by Purchaser herein that is not
qualified as to materiality or Purchaser Material Adverse Effect shall be true
and correct in all material respects as of the date hereof and as of the
Effective Time, in each case as though such representations and warranties were
made at and as of such time (except that representations and warranties that
speak as of a specified date shall be so true and correct as of such date).
SECTION 10.2 OBLIGATIONS PERFORMED.
Purchaser shall have performed and complied in all material respects
with all obligations and agreements, taken as a whole, required hereby to be
performed or complied with by it prior to or on the Effective Time.
SECTION 10.3 DELIVERY OF DOCUMENTS.
Purchaser shall have delivered to Seller those items required by Section
3.2(c).
SECTION 10.4 APPROVALS.
The parties shall have obtained all Regulatory Approvals and the
Stockholder Approval. No court or other Governmental Authority of competent
jurisdiction shall have enacted, issued, promulgated, enforced or entered any
Order that is in effect and prohibits or makes illegal the consummation of the
transactions contemplated hereby.
SECTION 10.5 NO PURCHASER MATERIAL ADVERSE EFFECT.
There shall not have been any change, condition, event or development
that, individually or in the aggregate, would constitute a Purchaser Material
Adverse Effect.
ARTICLE XI
TERMINATION
SECTION 11.1 METHODS OF TERMINATION.
This Agreement may be terminated in any of the following ways:
(a) by either Purchaser or Seller, in writing five (5) days in
advance of such termination, if the Closing has not occurred by March 31, 2003
(provided that no party shall be permitted to terminate this Agreement hereunder
if the failure of the Closing to occur prior to such date arises out of or
results from the actions or omissions of the terminating party; provided,
further, the failure of the representations and warranties contained in Section
6.22 to be true and
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correct, without more, shall not prevent Seller from exercising its rights under
this Section 11.1(a) if Seller has fully complied with its obligations under
Section 8.6);
(b) at any time on or prior to the Effective Time by the mutual
consent in writing of Seller and Purchaser;
(c) by Purchaser, as a result of any breach of any
representation, warranty or covenant of Seller contained herein, which breach
would cause any condition set forth in Sections 9.1 or 9.2 to not be satisfied,
if Purchaser has given notice of such breach and such breach is not, or is not
capable of being, cured within thirty (30) days after such notice;
(d) by Seller, as a result of any breach of any representation,
warranty or covenant of Purchaser contained herein, which breach would cause any
condition set forth in Sections 10.1 or 10.2 to not be satisfied, if Seller has
given notice of such breach and such breach is not, or is not capable of being,
cured within thirty (30) days after such notice;
(e) by either Purchaser or Seller, if the Stockholder Approval
shall not have been received at the meeting of Parent's stockholders called to
act thereon; or
(f) by either Purchaser or Seller, if (1) any Regulatory Approval
shall have been denied by final, nonappealable action of such Governmental
Authority, or such Governmental Authority shall have requested permanent
withdrawal of any application therefor or (2) any injunction, decree or other
order issued by any Governmental Authority or other legal restraint or
prohibition preventing consummation of the transactions contemplated hereby
shall have been entered by any Governmental Authority of competent jurisdiction
or any applicable law shall have been enacted or adopted that enjoins, prohibits
or makes illegal consummation of any of the transactions contemplated hereby and
such injunction, decree or other order shall be final and nonappealable.
SECTION 11.2 PROCEDURE UPON TERMINATION.
(a) In the event of termination pursuant to Section 11.1, and
except as otherwise stated therein, written notice thereof shall be given to the
other party, and, except as set forth in Section 11.2(b), this Agreement shall
terminate immediately upon receipt of such notice unless an extension is
consented to by the party having the right to terminate. If this Agreement is
terminated as provided herein:
(1) each party will return all documents, work papers and
other materials of the other party, including photocopies or other
duplications thereof, relating to this transaction, whether obtained
before or after the execution hereof, to the party furnishing the same;
(2) all information received by either party hereto with
respect to the business of the other party (other than information that
is a matter of public knowledge or that has heretofore been published in
any publication for public distribution or filed as public information
with any Governmental Authority) shall not at any time be used for any
business purpose by such party or disclosed by such party to third
Persons; and
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(3) each party will pay its own expenses, except as otherwise
specifically provided in this Agreement.
(b) In the event of termination of this Agreement pursuant to
this Article XI, this Agreement (other than as set forth in Sections 8.1, 11.3
and 12.4) shall become void and of no effect with no liability on the part of
any party hereto (or of any of its directors, officers, employees, agents, legal
and financial advisors or other representatives); provided, however, that, no
such termination shall absolve the breaching party from any liability to the
other party arising out of its knowing or willful breach of this Agreement.
SECTION 11.3 CERTAIN OBLIGATIONS UPON TERMINATION.
(a) Notwithstanding Section 8.7, should the transactions
contemplated herewith not be consummated because of a party's breach of this
Agreement, in addition to such damages as may be recoverable in law or equity,
the other party shall be entitled to recover from the breaching party upon
demand, itemization, and documentation, its reasonable outside legal,
accounting, consulting, and other out-of-pocket expenses incurred in connection
herewith.
(b) Without limiting Section 11.3(a),
(1) if this Agreement is terminated (A) by Purchaser pursuant
to Section 11.1(c) as a result of Seller's breach of any covenants of
Seller contained in Section 8.6, or (B) by Purchaser or Seller pursuant
to Section 11.1(a), if, at the time of such termination, Seller shall
not have sufficient funds available to consummate the transactions
contemplated hereby, including to make any payment pursuant to Section
2.2, Seller shall promptly, but in no event later than five (5) Business
Days following the date of receipt of the notice required by Section
11.2(a), pay to Purchaser, via wire transfer of immediately available
funds to such account as Purchaser may from time to time designate, $5
million; and
(2) if this Agreement is terminated by Seller pursuant to
Section 11.1(d) as a result of Purchaser's breach of any representation
or warranty contained in Section 7.5, Purchaser shall promptly, but in
no event later than five (5) Business Days following the date of receipt
of the notice required by Section 11.2(a), pay to Seller, via wire
transfer of immediately available funds to such account as Seller may
from time to time designate, $5 million.
(c) Without limiting Section 11.3(a) or (b) and subject to the
final sentence of this Section 11.3(c), if (1) this Agreement is terminated by
either Purchaser or Seller pursuant to Section 11.1(e), and (2) within nine (9)
months following the date of such termination, Seller or Parent shall enter into
a definitive agreement with respect to, or consummate, an Acquisition Proposal,
Seller shall promptly, but in no event later than five (5) Business Days
thereafter, pay to Purchaser, via wire transfer of immediately available funds
to such account as Purchaser may from time to time designate, $20 million. For
purposes of this Section 11.3(c), the term "ACQUISITION PROPOSAL" shall mean any
proposal relating to any tender offer or exchange offer for, or proposal for
merger, consolidation or other business combination with, or any proposal for
the acquisition of a substantial equity interest in, or of a substantial portion
of the assets of, or
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any similar transaction involving, Seller or any of its Subsidiaries, other than
the transactions contemplated hereby, including the Other Transaction, it being
understood that any proposal to acquire, or that would result directly or
indirectly in the acquisition of, any significant portion of the Branch Banking
Operations, the Transferred Assets or the Transferred Liabilities shall
constitute an Acquisition Proposal. In the event that (A) Seller, Parent or any
of their respective Affiliates exercises their right under Section 8.14 to
participate in discussions with a third party, or furnishes any information in
connection with discussions with a third party, to satisfy a fiduciary duty to
its stockholders any unsolicited offer, or (B) Seller, Parent or any of their
respective Affiliates breaches Section 8.14 or Section 8.15, the nine (9) month
period cited in the first sentence of this Section 11.3(c) shall be extended to
eighteen (18) months.
(d) The parties hereto acknowledge that the agreements contained
in Sections 11.3(b) and (c) are an integral part of the transactions
contemplated hereby, and that, without these agreements, neither party to this
Agreement would enter into this Agreement; accordingly, if a party fails
promptly to pay any amount due pursuant to Sections 11.3(b) and (c), and, in
order to obtain such payment, the other party commences a suit that results in a
judgment against the obligated party for either of the fees set forth in
Sections 11.3(b) or (c), the obligated party shall pay to the other party its
costs and expenses (including reasonable attorneys' fees and expenses) in
connection with such suit, together with interest on the amount of the fee at
the Federal Funds Rate. The parties hereto agree that any remedy or amount
payable pursuant to Sections 11.3(b) or (c) shall not preclude any other remedy
or amount payable hereunder with respect to, and shall not be the exclusive
remedy for, any willful and material breach of any representation, warranty,
covenant or agreement contained herein.
ARTICLE XII
MISCELLANEOUS PROVISIONS
SECTION 12.1 AMENDMENT AND MODIFICATION; WAIVER.
This Agreement may not be amended or modified in any manner except by
mutual agreement of the parties and as set forth in a writing signed by each of
the parties hereto or their respective successors in interest.
Subject to applicable law, each party, by written instrument signed by a
duly authorized officer thereof, may extend the time for the performance of any
of the obligations or other acts of any of the other parties and may waive (a)
any inaccuracies in the representations and warranties contained herein or in
any document delivered pursuant hereto or (b) compliance with any of the
undertakings, obligations, covenants or other acts contained herein. The waiver
of any breach of or compliance with any provision hereof by a party shall not be
deemed to be a wavier of any preceding or subsequent breach or a failure to
comply with this Agreement.
SECTION 12.2 SURVIVAL.
Except as otherwise provided herein, the parties' respective
representations and warranties contained herein shall survive (a) in all cases
other than with respect to the representations and warranties contained in
Sections 6.3, 6.14, and 7.3, until the first anniversary
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of the Effective Time, (b) in the case of the representations and warranties
contained in Sections 6.3 and 7.3, the sixth anniversary of the Effective Time
and (c), in the case of the representations and warranties contained in Section
6.14, the thirtieth (30th) day after the expiration of the applicable statute of
limitations with respect thereto; provided that any representation or warranty
shall be deemed to survive its relevant Claim Limitation Anniversary solely for
the purpose of resolving any claim with respect thereto submitted by an
indemnified party in accordance with Article V prior to such relevant Claim
Limitation Anniversary with respect to Losses incurred by the applicable
indemnified party prior to such Claim Limitation Anniversary and asserted under
such claim and relating to the relevant surviving representations and
warranties. The covenants and agreements contained herein that by their terms
contemplates performance after the Effective Time shall survive the Effective
Time in accordance with such terms.
SECTION 12.3 ASSIGNMENT.
This Agreement and all of the provisions hereof shall be binding upon,
and shall inure to the benefit of, the parties hereto and their successors and
permitted assigns, but neither this Agreement nor any of the rights, interests
or obligations hereunder shall be assigned by either of the parties hereto
without the prior written consent of the other.
SECTION 12.4 CONFIDENTIALITY.
Purchaser and Seller agree that the Confidentiality Agreement shall
survive the execution hereof, any termination hereof or any consummation of the
transactions contemplated herein.
SECTION 12.5 ADDRESSES FOR NOTICES, ETC.
All notices, consents, waivers, and other communications hereunder must
be in writing and will be deemed to have been duly given when (a) delivered by
hand (with written confirmation of receipt), (b) deposited in the United States
Mail by registered or certified mail, return receipt requested, (c) sent by
telecopier (with electronic confirmation of receipt), provided that a copy is
mailed by registered or certified mail, return receipt requested, or (d) when
received by the addressee, if sent by a nationally recognized overnight delivery
service (receipt requested), in each case to the appropriate addresses or
telecopier numbers set forth below (or to such other addresses and telecopier
numbers as a party may designate by notice to the other parties):
If to Seller, to: Bay View Bank
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇, Esq.
Telephone Number: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile Number: (▇▇▇) ▇▇▇-▇▇▇▇
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with a copy to: ▇▇▇▇▇ ▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Telephone Number: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile Number: (▇▇▇) ▇▇▇-▇▇▇▇
If to Purchaser, to: U.S. Bank National Association
U.S. Bank Place
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇. Mitau, Esq.
Telephone Number: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile Number: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: Wachtell, Lipton, ▇▇▇▇▇ & ▇▇▇▇
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Telephone Number: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile Number: (▇▇▇) ▇▇▇-▇▇▇▇
SECTION 12.6 COUNTERPARTS.
This Agreement may be executed simultaneously in two counterparts, each
of which shall be deemed an original, but both of which together shall
constitute one and the same instrument.
SECTION 12.7 GOVERNING LAW.
This Agreement shall be governed by, and construed in accordance with,
the laws of the State of Delaware applicable to contracts made and to be
performed entirely within such state.
SECTION 12.8 ENTIRE AGREEMENT.
Except for the Confidentiality Agreement, this Agreement and the
schedules, exhibits and attachments hereto, the Transition and Services
Agreement and the Guarantee represent the entire agreement between the parties
hereto respecting the transactions contemplated hereby and all prior or
contemporaneous written or oral proposals, agreements in principle,
representations, warranties and understandings between the parties with respect
to such matters are superseded hereby and by the Transition and Services
Agreement and the Guarantee and merged herein and therein.
SECTION 12.9 NO THIRD PARTY BENEFICIARIES.
Nothing herein is intended to or shall confer upon or give to any Person
(other than the parties hereto, their successors and permitted assigns) any
rights or remedies under or by reason of this Agreement, or any term, provision,
condition, undertaking, warranty, representation,
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indemnity, covenant or agreement contained herein, other than the beneficiaries
of the provisions of Article V as set forth therein.
SECTION 12.10 CALCULATION OF DATES AND DEADLINES.
Unless otherwise specified, any period of time to be determined
hereunder shall be deemed to commence at 12:01 a.m. on the first full day after
the specified starting date, event, or occurrence. Any deadline, due date,
expiration date, or period-end to be calculated hereunder shall be deemed to end
at 5 p.m. on the last day of the specified period. The time of day shall be
determined with reference to the then current local time in the State of
California.
SECTION 12.11 CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL.
Each of the parties hereto hereby irrevocably and unconditionally
submits to the jurisdiction of any court in the State of Delaware and any
federal court sitting in the State of Delaware, and irrevocably agrees that all
actions or proceedings arising out of or relating to this Agreement or the
transactions contemplated hereby or in aid or arbitration or for enforcement of
an arbitral award shall be litigated exclusively in such courts. Each of the
parties hereto agrees not to commence any legal proceedings related hereto
except in such courts. Each of the parties hereto irrevocably waives any
objection that he or it may now or hereafter have to the laying of the venue of
any such proceeding in any such court and hereby further irrevocably and
unconditionally waives and agrees not to plead or claim in any such court that
any such action, suit or proceeding brought in any such court has been brought
in an inconvenient forum.
EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL
BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR
THE TRANSACTIONS CONTEMPLATED HEREBY.
SECTION 12.12 SEVERABILITY.
Any term or provision of this Agreement that is invalid or unenforceable
in any jurisdiction shall, as to that jurisdiction, be ineffective to the extent
of such invalidity or unenforceability without rendering invalid or
unenforceable the remaining terms and provisions of this Agreement or affecting
the validity or enforceability of any of the terms or provisions of this
Agreement in any other jurisdiction. If any provision of this Agreement is so
broad as to be unenforceable, the provision shall be interpreted to be only so
broad as is enforceable.
SECTION 12.13 SPECIFIC PERFORMANCE.
Each of the parties hereto acknowledges and agrees that the other party
would be damaged irreparably in the event any of the provisions of this
Agreement are not performed in accordance with their specific terms or otherwise
are breached. Accordingly, each of the parties agrees that the other party
hereto shall be entitled to seek an injunction or injunctions to prevent
breaches of the provisions of this Agreement and to enforce specifically this
Agreement and the terms and provisions hereof in any action instituted in any
court of the United States or any state thereof having jurisdiction over the
parties and the matter, in addition to any other remedy to which it may be
entitled, at law or in equity.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their duly authorized officers as of the date first written
above.
U.S. BANK NATIONAL ASSOCIATION
By: __________________________________
Name:
Title:
BAY VIEW BANK
By: __________________________________
Name:
Title:
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EXECUTION COPY
FORM OF GUARANTEE
BAY VIEW CAPITAL CORPORATION ("PARENT") irrevocably guarantees
each and every representation, warranty, covenant, agreement and other
obligation of Seller, and/or any of its permitted assigns (and where any such
representation or warranty is made to the knowledge of Seller, such
representation or warranty shall be deemed made to the knowledge of Parent), and
the full and timely performance of their respective obligations under the
provisions of the foregoing Agreement and the Transition and Services Agreement.
This is a guarantee of payment and performance, and not of collection, and
Parent acknowledges and agrees that this guarantee is full and unconditional,
and no release or extinguishment of Seller's obligations or liabilities (other
than in accordance with the terms of the foregoing Agreement or the Transition
and Services Agreement), whether by decree in any bankruptcy proceeding or
otherwise, shall affect the continuing validity and enforceability of this
guarantee, as well as any provision requiring or contemplating performance by
Parent.
Parent hereby waives, for the benefit of Purchaser, (1) any right
to require Purchaser, as a condition of payment or performance by Parent, to
proceed against Seller or pursue any other remedy whatsoever and (2) to the
fullest extent permitted by law, any defenses or benefits that may be derived
from or afforded by law that limit the liability of or exonerate guarantors or
sureties, except to the extent that any such defense is available to Seller.
Without limiting in any way the foregoing guarantee, Parent
covenants and agrees to take all actions to enable Seller to adhere to each
provision of the foregoing Agreement and of the Transition and Services
Agreement that requires an act or omission on the part of Parent or any of its
subsidiaries to enable Seller to comply with its obligations under the foregoing
Agreement and the Transition and Services Agreement.
The provisions of Article XII of the foregoing Agreement are
incorporated herein, mutatis mutandis, except that notices and other
communications hereunder to Parent shall be delivered to:
Bay View Capital Corporation
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇, Esq.
Telephone Number: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile Number: (▇▇▇) ▇▇▇-▇▇▇▇
Parent understands that Purchaser is relying on this guarantee in
entering into the foregoing Agreement and the Transition and Services Agreement
and may enforce this guarantee as if Parent were a party thereto.
BAY VIEW CAPITAL CORPORATION
By: __________________________________
Name:
Title:
U.S. BANK NATIONAL ASSOCIATION
By: __________________________________
Name:
Title:
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SCHEDULES AND EXHIBITS ARE OMITTED PURSUANT TO ITEM 601(b) (2) OF REGULATION
S-K AND WILL BE PROVIDED SUPPLEMENTALLY TO THE SECURITIES AND EXCHANGE
COMMISSION UPON ITS REQUEST.
