Exhibit 10.16
CONTRACT OF SALE
AGREEMENT made this 29th day of August, 1997, by and between BNC National
Bank, a National Banking Association, (Buyer) and Preferred Investment Services,
Inc., an Illinois corporation, (Seller).
W I T N E S S E T H:
WHEREAS, Seller pursuant to written agreement provides certain
administrative services with respect to Preferred Pension Investors I-87, an
Illinois partnership formed to permit employee benefit plan trusts to buy, sell
and otherwise deal with stocks, bonds and other fixed income securities
consistent with the investment objectives of ERISA; and
WHEREAS, Seller desires to sell and assign its rights and obligations under
such written agreement; and
WHEREAS, Buyer desires to assume certain administrative obligations and to
buy from the Seller under the terms and conditions set forth herein its rights
under said written agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
hereinafter set forth, the parties have agreed and by these presents do agree as
follows:
ARTICLE 1: PURCHASE AND SALE OF ASSETS
1.01 On the Closing Date (hereinafter defined) the Seller shall sell and Buyer
shall purchase all of the Seller's right, title, and interest in and to
the following designated assets owned by the Seller as the same shall
exist on the Closing Date (collectively, the "Assets"):
(a) All rights, privileges, and interests in the INVESTORS I-87
MANAGEMENT AGREEMENT dated April 21, 1987, ("I-87 Agreement")
between Preferred Investment Services, Inc., and Preferred Pension
Investors I-87, a partnership.
(b) All books and records, historical billing information,
correspondence files, customer files or any other business records
relating to or used in connection with the servicing of the contract
mentioned in subparagraph (a) above.
ARTICLE 2: PURCHASE PRICE AND PAYMENTS
2.01 Purchase Price. Buyer agrees to pay to Seller in consideration of the
Assets described above the aggregate sum of 4.71 per cent (%) of the
assets under management on August 31, 1997 pursuant to the I-87 Agreement.
2.02 Method of Payment of Purchase Price. The purchase price shall be paid as
follows:
(a) ▇▇▇▇▇▇▇ Money. Contemporaneously with the signing of this Agreement,
Buyer shall pay Seller the sum of Three Hundred Thousand Dollars
($300,000.00) (the "▇▇▇▇▇▇▇ Money"). The ▇▇▇▇▇▇▇ Money shall be paid
on the purchase price. In the event that the transactions
contemplated by this Agreement are not consummated for any reason
other than a material breach of this Agreement by Buyer the ▇▇▇▇▇▇▇
Money promptly shall be returned to Buyer.
(b) Cash Payment For Balance. Buyer shall pay to Seller the balance of
the purchase price by wire transfer or other immediately available
funds pursuant to subparagraph (c) below. As soon as possible after
Closing, Seller shall furnish Buyer with a detailed listing of
assets under management pursuant to the I-87 Agreement along with
the valuation of the assets on August 31, 1997. Such listing shall
be in the form of the August 31, 1997 participants statements
prepared by Huntington Trust Company.
(c) Final Accounting. Buyer shall be liable for all costs and expenses and
shall be entitled to all income resulting from the administration of
the Assets from and after August 31, 1997. Seller shall be liable for
all costs and expenses and shall be entitled to all income resulting
from the administration of the Assets prior to September 1, 1997.
Realizing that both costs and expenses are billed and paid on a
quarterly basis, a final accounting, including sums due pursuant to
subparagraph (b) above, shall be prepared by Buyer within five
business days after receipt from Seller of all invoices for expenses
for the administration of the Assets for the third quarter of 1997.
Buyer shall pay the total invoices for the third quarter and shall
receive credit against the purchase price for the actual expenses due
for the months of July and August 1997. Seller shall assign to Buyer
the right to receive the quarterly management fee from the Preferred
Pension Investors I-87 Partnership for management of the Assets and
Buyer shall credit to Seller the actual management fees due for the
months of July and August 1997. The final accounting along with
payment for the balance due shall be remitted to Seller not later that
the fifth business day following receipt by Buyer of the statements
for expenses as mentioned above.
ARTICLE 3: ASSUMPTION OF LIABILITlES
3.01 Except as expressly set forth below in this paragraph 3.01, Buyer does not
assume any liabilities or obligations of the Seller and Seller shall
defend, indemnify and hold Buyer harmless from and against any and all
obligations or liabilities of the Seller other than those expressly
assumed. From and after the Closing Date, Buyer shall assume and pay,
perform and discharge, and indemnify and hold Seller harmless from and
against, the following future liabilities, obligations and commitments of
Seller to be observed and performed by Seller from and after the Closing
Date except obligations, liabilities or commitments accrued prior to the
Closing Date:
(a) All of Seller's obligations and commitments from and under the I-87
Agreement referred to in subparagraph 1.01 as the same may be
modified with the cooperation of Buyer on or prior to the Closing
Date.
ARTICLE 4: CLOSING DATE AND CLOSING TRANSACTIONS
4.01 The Closing of this Agreement shall be held on August 31, 1997. Closing
shall take place at Seller's offices in Bismarck, North Dakota, or such
location as Buyer and Seller shall mutually agree.
4.02 Seller agrees that on the Closing Date it will deliver to Buyer such
assignments and consents to transfer, all in form satisfactory to the
Buyer's counsel, as shall be effective to transfer to Buyer the assets to
be conveyed, transferred and delivered to Buyer as provided in this
Agreement. Without limiting the generality of the foregoing, Seller shall
deliver to Buyer:
(a) Appropriate instruments, in form satisfactory to Buyer's counsel,
assigning and transferring to Buyer as of the Closing Date, all of
the Seller's right, title and interest in, to and under all of the
rights, assets and properties described in Section 1.01.
ARTICLE 5: REPRESENTATIONS, WARRANTIES AND AGREEMENTS
5.01 Seller hereby represents and warrants to Buyer as follows, which
representation and warranties, together with all other representations and
warranties of Seller in this Agreement, shall, subject to the provisions
of paragraph 9.02 hereof, survive the date hereof and the closing:
(a) Seller is a corporation duly organized, validly existing and in good
standing under the laws of the state of Illinois and has all
requisite power and authority to enter into this Agreement and
perform its obligations hereunder.
(b) The execution and delivery of this Agreement by Seller has been duly
and validly authorized and approved by all necessary action by the
Seller, and this Agreement is valid and binding agreement,
enforceable against Seller in accordance with its terms.
(c) The execution and carrying out of this Agreement and compliance with
the provisions hereof by Seller will not violate any provision of
law, will not, with or without the giving of notice and/or the
passage of time, conflict with or result in any breach of any of the
terms or conditions of, or constitute a default under any agreement
or other instrument to which Seller is a party or by which it is
bound, and will not result in the creation of any lien charge or
encumbrance upon Seller's assets conveyed hereunder.
(d) Seller has, or will secure, all requisite consents and assignments
and is entitled to sell and convey to the Buyer all rights, assets
and property described in Section 1.01 hereof, free and clear of all
liens, pledges, encumbrances, charges and adverse claims whatsoever.
(e) There are no actions, suits, proceedings, or investigations pending,
or, to the knowledge of Seller, threatened, against Seller which may
materially adversely affect the assets conveyed hereunder or
customer relations of Seller's clients or the right of Seller to
dispose of the assets being sold hereunder, or to enter into or
carry out this Agreement, nor does Seller know of any basis for any
such litigation, proceeding or investigation in the future.
(f) No representation or warranty made herein by Seller, or any written
statement, schedule or certificate furnished to Buyer pursuant
hereto or in connection with the transactions contemplated hereby by
the Seller contains any untrue Statement of material fact or omits a
material fact necessary to make the statement contained therein not
misleading.
(g) Seller has timely filed all Federal and state income tax returns
relating to the assets conveyed and there are no proceedings pending
nor to the knowledge of Seller threatened that would result in the
imposition of additional tax based on income which might result in
filing of a lien on any of the assets being acquired hereunder.
(h) The contract to be transferred or assigned to Buyer under this
Agreement will, on the Closing Date, be in full force and effect.
Seller represents and warrants that Seller has complied in all
material respects with the provisions of such contacts and is not,
and at the time of Closing will not be in material default under
such contract.
5.02 Buyer hereby represents and warrants to Seller as follows:
(a) Buyer is a corporation duly organized, validly existing and in good
standing under the applicable laws of the State of North Dakota, and
has all requisite power and authority to enter into this Agreement
and perform its obligations hereunder.
(b) The execution and delivery of this Agreement by Buyer has been duly
and validly authorized and approved by all necessary action, and
this Agreement is valid and binding upon Buyer in accordance with
its terms.
(c) The execution and carrying out of this Agreement and the compliance
with the provisions hereof by Buyer will not violate any provision
of law, will not, with or without the giving of notice and/or the
passage of time, conflict with or result in any breach of any of the
terms or conditions of, or constitute a default under any agreement
or other instrument to which Buyer is a party or by which it is
bound, and will not result in the creation of any lien, charge or
encumbrance upon Buyer's assets.
(d) No representation or warranty of Buyer, or any statement or
certificate furnished to Seller hereunder or in connection with the
transactions contemplated hereby, contains or will contain any
untrue statement of a material fact or omits or will omit to state a
material fact necessary to make the statement contained therein not
misleading (except to the extent that such statements are made in
reliance on Seller's representations and warranties).
ARTICLE 6: CONDITIONS TO OBLIGATIONS
6.01 The obligation of Buyer to perform or fulfill or carry out its agreements,
undertakings and obligations herein made or expressed to be performed,
fulfilled or carried out on or after the date hereof and on or before
Closing Date is and shall be subject to fulfillment of or compliance with,
on the date hereof and on or before Closing Date, of the following
conditions precedent, any of which may be waived by Buyer:
(a) Seller's representations and warranties contained in this Agreement
shall be true in all material respects; Seller shall have performed
and complied in all material respects with all agreements required
by this Agreement to be performed or complied with by it prior to or
on the closing date.
(b) There shall not have been instituted by any third party any suit or
proceeding to restrain or invalidate this transaction or seeking
damages from or to impose obligations upon Buyer as a result of this
transaction which, in Buyer's good faith judgment, based upon the
written advice of counsel, a copy of which shall be delivered to
Seller, would involve expense or lapse of time that would be
materially adverse to Buyer's interests.
(c) There shall have been no material adverse change in the assets under
management pursuant to the agreement between the date hereof and the
Closing Date, and the business of Seller shall have been conducted
between the date hereof and the Closing Date in the ordinary course
of business consistent in all material respects with past practices.
6.02 The obligation of Seller to perform or fulfill or carry out their
agreements, undertakings and obligations herein made or expressed or to be
performed, fulfilled or carried out on or after the date hereof is and
shall be subject to fulfillment of or compliance with, on the Closing
Date, the following conditions precedent, any of which may be waived by
Seller:
(a) Buyer's representations and warranties contained in this Agreement
shall be true in all material respects.
(b) There shall not have been instituted by any third party any suit or
proceeding to restrain or invalidate this transaction or seeking
damages from or to impose obligations upon Seller as a result of
this transaction which in Seller's good faith judgment, based upon
the written advice of counsel, a copy of which shall be delivered to
Buyer, would involve expense or lapse of time that would be
materially adverse to Seller's interests.
ARTICLE 7: CLOSING
7.01 The Closing Date shall be August 31, 1997.
7.02 If this Agreement is terminated because of the mutual agreement of the
parties or because any condition precedent to the obligations set forth in
Section 6 hereof has not been timely satisfied or waived, then this
Agreement shall become null and void and have no further effect, except
that Seller and Buyer shall continue to indemnify and hold harmless the
other, its officers, directors, partners or affiliated companies against
any claim arising out of any breach of such party's, or its affiliated
company's, representations and warranties with respect to the absence of
any claim by any broker, finder, agent or other intermediary.
ARTICLE 8: INDEMNITY
8.01 Seller agrees from and after the Closing Date to indemnify and to hold
Buyer harmless from and against and in respect of any losses incurred by
Buyer from:
(a) Breach of any representation or warranty or non-fulfillment of any
agreement or covenant on the part of the Seller which survives the
Closing Date under this Agreement.
(b) Any claims made by creditors of Seller relating to the assets
conveyed hereunder
(c) All reasonable costs and expenses (including reasonable attorneys'
fees) incurred by Buyer in connection with any action, suit,
proceeding, demand, assessment or judgment incident to any of the
matters Buyer is indemnified against by Seller in this Agreement.
(d) All costs and expenses (including reasonable attorneys' fees)
incurred by Buyer as a result of the failure of Seller to secure any
consent to any agreement Seller was aware of to which such consent
was required to be secured by Seller hereunder in order to vest
Buyer with ownership of the assets.
8.02 Buyer agrees from and after the Closing to indemnify and to hold Seller
harmless from and against and in respect of any losses incurred by Seller
from:
(a) Any and all damages, costs, claims and expenses arising by reason of
Buyer's failure to materially perform and discharge all of the
obligations and liabilities assumed by it hereunder.
(b) Any claims made by creditors of Buyer relating to the asset conveyed
hereunder which are incurred by Buyer from and after the Closing
Date.
(c) Any damage or deficiency resulting from any material
misrepresentation, breach of warranty, or non-fulfillment of any
agreement or covenant on the part of the Buyer under this Agreement,
or from any material misrepresentation in or material omission from
any other instrument furnished or to be furnished to Seller
hereunder.
(d) All reasonable costs and expenses (including reasonable attorneys'
fees) incurred by Seller in connection with any action, suit,
proceeding, demand, assessment or judgment incident to any of the
matters Seller is indemnified against by Buyer in this Agreement.
8.03 The remedies provided to Seller and Buyer by this indemnity shall be in
addition to, and not in lieu of, any other remedies to which the
respective party is entitled at law or in equity for any breach or
noncompliance by the other with the provisions of this Agreement.
8.04 Seller and Buyer each agrees to give prompt written notice to the other of
any claim against the party giving notice which might give rise to a claim
by it against the other party hereto based upon the indemnity agreement
contained in Sections 8.01 and 8.02 hereof, stating the nature and basis
of the claim and the actual or estimated amount thereof. In the event any
action, suit or proceeding is brought against Seller or Buyer with respect
to which the other party hereto may have liability under the indemnity
agreement contained in Sections 8.01 or 8.02 hereof, the indemnifying
party shall have the right, at its sole cost and expense, to defend such
action in the name and on behalf of the indemnified party and in
connection with any such action, suit or proceeding, the parties hereto
agree to render to each other such assistance as may reasonably be
required in order to insure the proper and adequate defense of any such
action, suit or proceeding. The party hereto seeking indemnification
hereunder shall not make any settlement of any claim which might give rise
to liability to the other party hereto under the indemnity
contained in Sections 8.01 or 8.02 hereof without the written consent of
such other party, which consent such other party covenants shall not be
unreasonably withheld. In any event the indemnifying party shall not be
obligated to make any payment pursuant to this indemnity agreement until
the aggregate amount of the indemnifying party's liability hereunder for
all claims exceeds $25,000 in the aggregate.
ARTICLE 9: MISCELLANEOUS
9.01 Each party hereto agrees to use its best efforts to cause the consummation
of the transactions contemplated hereby including, but not limited to,
using its best efforts to assure that the conditions to Closing are
satisfied.
9.02 Each party hereto covenants and agrees that its representations and
warranties contained in this Agreement and in any instrument of sale,
assignment, conveyance, and transfer executed and delivered pursuant to
this Agreement shall survive the date hereof and the closing, and such
representations contained therein shall be of no further force and effect
after the end of the twelfth (12th) month following the date hereof,
except as to breaches theretofore discovered.
9.03 All notices, claims and other communications hereunder shall be in writing
and shall be deemed to have been duly given if personally delivered or
mailed first class, postage prepaid:
(a) if to Buyer:
▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇▇
CEO
BNC National Bank
▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
(b) if to Seller:
▇▇. ▇▇▇▇▇▇▇ Simon
President
Preferred Investment Services, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
A. or at such other address as any party may from time to time furnish
to the other party by notice given in accordance with the provisions
of this Section. All notices shall be deemed given when mailed or
personally delivered in the manner provided in this Section.
9.04 This Agreement, together with the Exhibits hereto, contains the entire
understanding between the parties hereto concerning the subject matter
hereof and may not be changed, modified, altered or terminated, except by
an agreement in writing executed by the parties hereto. Any waiver by
either party of any of its rights under this Agreement or of any breach of
this Agreement shall not constitute a waiver of any other rights or of any
other or future breach.
9.05 Each and all of the rights and remedies in this Agreement provided, and
each and all of the rights and remedies allowed at law in equity in like
case, shall be cumulative, and be exercise of one right or remedy shall
not be exclusive of the right to exercise or resort to any and all other
rights or remedies provided in this Agreement or at law or in equity.
9.06 This Agreement and all rights and obligations of the Buyer may be
assigned, either before or after the Closing Date, without the consent of
Seller, to an affiliate or subsidiary of Buyer or a limited partnership,
the general partner of which is a wholly-owned subsidiary of Buyer,
provided that any such assignment shall not relieve Buyer of any of its
obligations hereunder.
9.07 Descriptive headings are for convenience only and shall not control or
affect the meaning or construction of any provisions of this Agreement.
9.08 This Agreement has been executed in, and shall be construed in accordance
with and subject to the laws and decisions of the State of North Dakota,
applicable to contracts made and to be performed entirely therein. This
Agreement may be executed in several counterparts, each of which shall be
an original; but such counterparts shall together constitute one and the
same instrument.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
on the day and year first above written.
BUYER:
BNC NATIONAL BANK
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇
Its Chief Executive Officer
SELLER:
PREFERRED, INVESTMENT SERVICES,
INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇
Its President
