Document:

Filed by sedaredgar.com - MabCure Inc. - Exhibit 10.7.1

Exhibit 10.7.1

AMENDMENT TO THE EMPLOYMENT AGREEMENT
(the
“Amendment”)

     THIS AMENDMENT, is made
and entered into as of April 2, 2009, by and between MabCure Inc., (the
“Company”), and Dr. Amnon Gonenne (the “Executive”). (Together the
“Parties”, and each individually, a “Party”).

     WHEREAS, the Company and
the Executive entered into an Employment Agreement dated July 7, 2008 (the
“Agreement”); and 

     WHEREAS, the Parties are
interested in amending the Agreement effective as of the signing of the
Agreement to clarify the intent of the Parties and to correct a mistake in the
description of the shares issued to the Executive, while leaving the Agreement’s
remaining terms and conditions in full force and effect.

     NOW THEREFORE,
the Parties hereby agree to amend the Agreement as follows: 

1. Except as specifically modified by this Amendment, the terms
and conditions of the Agreement shall remain in full force and effect and shall
continue to govern the business relationship between the Parties. In the event
of any inconsistency between the terms of this Amendment and the terms of the
Agreement, the terms of this Amendment shall control.

2. The capitalized terms used in this Amendment shall have the
meanings ascribed to them in the Agreement, unless defined otherwise herein.

3. Sections 2.6 and 3.8 of the Agreement shall be deleted.

4. This Amendment and the Agreement constitute the entire
agreement among the Parties with respect to the subject matter herein and
therein, and supersede all prior agreements and understandings among the Parties
with respect to the subject mater hereof or thereof.

     IN WITNESS
HEREOF, the Parties have executed this Amendment.

	MabCure Inc. 	Dr. Amnon Gonenne 
	 	  
	 	  
	/s/ Itshak Zivan 	/s/ Dr. Amnon Gonenne 
	Name: Itshak Zivan 	Date: April 1, 2009 
	Title: Director 	  
	Date: March 18, 2009Exhibit 10.1

 

EXECUTION COPY

	
   

  
	
   

  

PURCHASE
AND ASSUMPTION AGREEMENT

 

dated
as of

APRIL
6, 2009

 

between

 

WACHOVIA
BANK, N.A.

 

and

 

HERITAGE
BANK OF COMMERCE

	
   

  
	
   

  

 

TABLE OF
CONTENTS

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  ARTICLE 1

  	
  CERTAIN
  DEFINITIONS

  	
  1

  
	
   

  	
   

  	
   

  
	
  1.1

  	
  Certain Definitions

  	
  1

  
	
  1.2

  	
  Accounting Terms

  	
  9

  
	
  1.3

  	
  Interpretation

  	
  9

  
	
   

  	
   

  	
   

  
	
  ARTICLE 2

  	
  THE
  P&A TRANSACTION

  	
  9

  
	
   

  	
   

  	
   

  
	
  2.1

  	
  Purchase and Sale of
  Assets

  	
  9

  
	
  2.2

  	
  Assumption of
  Liabilities

  	
  10

  
	
  2.3

  	
  Purchase Price

  	
  11

  
	
  2.4

  	
  [Intentionally Omitted]

  	
  11

  
	
  2.5

  	
  Assumption of IRA and
  Keogh Account Deposits

  	
  11

  
	
   

  	
   

  	
   

  
	
  ARTICLE 3

  	
  CLOSING
  PROCEDURES; PAYMENT ADJUSTMENTS

  	
  12

  
	
   

  	
   

  	
   

  
	
  3.1

  	
  Closing

  	
  12

  
	
  3.2

  	
  Payment at Closing

  	
  12

  
	
  3.3

  	
  Adjustment of Purchase
  Price

  	
  12

  
	
  3.4

  	
  Proration; Other
  Closing Date Adjustments

  	
  13

  
	
  3.5

  	
  Seller Deliveries

  	
  14

  
	
  3.6

  	
  Purchaser Deliveries

  	
  14

  
	
  3.7

  	
  Owned Real Property
  Filings

  	
  15

  
	
   

  	
   

  	
   

  
	
  ARTICLE 4

  	
  TRANSITIONAL
  MATTERS

  	
  15

  
	
   

  	
   

  	
   

  
	
  4.1

  	
  Transitional
  Arrangements

  	
  15

  
	
  4.2

  	
  Customers

  	
  16

  
	
  4.3

  	
  Direct Deposits

  	
  16

  
	
  4.4

  	
  Direct Debits

  	
  17

  
	
  4.5

  	
  Escheat Deposits

  	
  17

  
	
  4.6

  	
  Access to Records

  	
  17

  
	
  4.7

  	
  Interest Reporting and Withholding

  	
  18

  
	
  4.8

  	
  Negotiable Instruments

  	
  18

  
	
  4.9

  	
  ATM/Debit Cards; POS
  Cards

  	
  18

  
	
  4.10

  	
  Data Processing
  Conversion for the Branches and Handling of Certain Items

  	
  19

  

 

i

 

TABLE OF
CONTENTS

(continued)

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  ARTICLE 5

  	
  REPRESENTATIONS
  AND WARRANTIES OF SELLER

  	
  20

  
	
   

  	
   

  	
   

  
	
  5.1

  	
  Corporate Organization
  and Authority

  	
  20

  
	
  5.2

  	
  No Conflicts

  	
  20

  
	
  5.3

  	
  Approvals and Consents

  	
  20

  
	
  5.4

  	
  Leases

  	
  21

  
	
  5.5

  	
  Litigation

  	
  21

  
	
  5.6

  	
  Regulatory Matters

  	
  21

  
	
  5.7

  	
  Compliance with Laws;
  Permits

  	
  21

  
	
  5.8

  	
  [Intentionally Omitted]

  	
  22

  
	
  5.9

  	
  Records

  	
  22

  
	
  5.10

  	
  Title to Assets

  	
  22

  
	
  5.11

  	
  Deposits

  	
  22

  
	
  5.12

  	
  Environmental Laws;
  Hazardous Substances

  	
  22

  
	
  5.13

  	
  Brokers’ Fees

  	
  23

  
	
  5.14

  	
  Owned Real Property

  	
  23

  
	
  5.15

  	
  Limitations on
  Representations and Warranties

  	
  23

  
	
   

  	
   

  	
   

  
	
  ARTICLE 6

  	
  REPRESENTATIONS
  AND WARRANTIES OF PURCHASER

  	
  23

  
	
   

  	
   

  	
   

  
	
  6.1

  	
  Corporate Organization
  and Authority

  	
  23

  
	
  6.2

  	
  No Conflicts

  	
  24

  
	
  6.3

  	
  Approvals and Consents

  	
  24

  
	
  6.4

  	
  Regulatory Matters

  	
  24

  
	
  6.5

  	
  Litigation

  	
  25

  
	
  6.6

  	
  Operation of the
  Branches

  	
  25

  
	
  6.7

  	
  Financing Available

  	
  25

  
	
  6.8

  	
  Brokers’ Fees

  	
  25

  
	
   

  	
   

  	
   

  
	
  ARTICLE 7

  	
  COVENANTS
  OF THE PARTIES

  	
  25

  
	
   

  	
   

  	
   

  
	
  7.1

  	
  Activity in the
  Ordinary Course

  	
  25

  
	
  7.2

  	
  Access and
  Confidentiality

  	
  27

  
	
  7.3

  	
  Regulatory Approvals

  	
  28

  
	
  7.4

  	
  Consents

  	
  28

  
	
  7.5

  	
  Efforts to Consummate;
  Further Assurances

  	
  29

  

 

ii

 

TABLE OF
CONTENTS

(continued)

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  7.6

  	
  Solicitation of
  Accounts

  	
  29

  
	
  7.7

  	
  Solicitation of
  Employees

  	
  30

  
	
  7.8

  	
  Insurance

  	
  30

  
	
  7.9

  	
  Change of Name, Etc

  	
  30

  
	
  7.10

  	
  Transfer of Assets
  Following the Closing

  	
  31

  
	
  7.11

  	
  Title
  Insurance

  	
  31

  
	
   

  	
   

  	
   

  
	
  ARTICLE 8

  	
  TAXES;
  FDIC ASSESSMENTS AND EMPLOYEE MATTERS

  	
  32

  
	
   

  	
   

  	
   

  
	
  8.1

  	
  Tax Representations

  	
  32

  
	
  8.2

  	
  Proration of Taxes

  	
  32

  
	
  8.3

  	
  Sales and Transfer
  Taxes

  	
  32

  
	
  8.4

  	
  Information Returns

  	
  32

  
	
  8.5

  	
  Like Kind Exchange

  	
  32

  
	
  8.6

  	
  FDIC Special Assessment

  	
  32

  
	
  8.7

  	
  Transferred Employees

  	
  33

  
	
   

  	
   

  	
   

  
	
  ARTICLE 9

  	
  CONDITIONS
  TO CLOSING

  	
  36

  
	
   

  	
   

  	
   

  
	
  9.1

  	
  Conditions to
  Obligations of Purchaser

  	
  36

  
	
  9.2

  	
  Conditions to
  Obligations of Seller

  	
  37

  
	
   

  	
   

  	
   

  
	
  ARTICLE 10

  	
  TERMINATION

  	
  37

  
	
   

  	
   

  	
   

  
	
  10.1

  	
  Termination

  	
  37

  
	
  10.2

  	
  Effect of Termination

  	
  38

  
	
   

  	
   

  	
   

  
	
  ARTICLE 11

  	
  INDEMNIFICATION

  	
  38

  
	
   

  	
   

  	
   

  
	
  11.1

  	
  Indemnification

  	
  38

  
	
  11.2

  	
  Indemnification
  Procedures

  	
  39

  
	
  11.3

  	
  Limitations on
  Indemnification

  	
  40

  
	
  11.4

  	
  Exclusivity

  	
  41

  
	
  11.5

  	
  AS-IS, WHERE-IS Sale;
  Waiver of Warranties

  	
  41

  
	
  11.6

  	
  Survival

  	
  42

  
	
   

  	
   

  	
   

  
	
  ARTICLE 12

  	
  MISCELLANEOUS

  	
  42

  
	
   

  	
   

  	
   

  
	
  12.1

  	
  Survival of
  Representations, Warranties, and Covenants

  	
  42

  
	
  12.2

  	
  Assignment

  	
  42

  
	
  12.3

  	
  Binding Effect

  	
  43

  

 

iii

 

TABLE OF
CONTENTS

(continued)

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  12.4

  	
  Public Notice

  	
  43

  
	
  12.5

  	
  Notices

  	
  43

  
	
  12.6

  	
  Parent Financial
  Corporation Obligation

  	
  44

  
	
  12.7

  	
  Expenses

  	
  44

  
	
  12.8

  	
  Governing Law

  	
  44

  
	
  12.9

  	
  Entire Agreement;
  Amendment

  	
  44

  
	
  12.10

  	
  Third Party
  Beneficiaries

  	
  45

  
	
  12.11

  	
  Counterparts

  	
  45

  
	
  12.12

  	
  Headings

  	
  45

  
	
  12.13

  	
  Severability

  	
  45

  
	
  12.14

  	
  Specific Performance

  	
  45

  

 

iv

 

TABLE OF
CONTENTS

(continued)

 

List of
Schedules

 

	
  Schedule 1.1(a)

  	
  Branch Employees

  
	
   

  	
   

  
	
  Schedule 1.1(b)

  	
  Branches/Real Properties

  
	
   

  	
   

  
	
  Schedule 1.1(d)

  	
  Excluded Deposits

  
	
   

  	
   

  
	
  Schedule 1.1(e)

  	
  Knowledge of Seller

  
	
   

  	
   

  
	
  Schedule 2.1(a)(iii)

  	
  Personal Property; Personal Property Leases

  
	
   

  	
   

  
	
  Schedule 2.1(a)(vii)

  	
  Other Assets

  
	
   

  	
   

  
	
  Schedule 2.2(a)(v)

  	
  Accrued Liabilities

  
	
   

  	
   

  
	
  Schedule 3.5(a)

  	
  Form of Deed

  
	
   

  	
   

  
	
  Schedule 3.5(b)

  	
  Form of Bill of Sale

  
	
   

  	
   

  
	
  Schedule 3.5(c)

  	
  Form of Assignment and Assumption Agreement

  
	
   

  	
   

  
	
  Schedule 3.5(d)

  	
  Form of Estoppel and Consent Letter

  
	
   

  	
   

  
	
  Schedule 3.5(e)

  	
  Form of Certificate of Officer, Seller

  
	
   

  	
   

  
	
  Schedule 3.6(c)

  	
  Form of Certificate of Officer, Purchaser

  
	
   

  	
   

  
	
  Schedule 5.3

  	
  Seller Regulatory Approvals

  
	
   

  	
   

  
	
  Schedule 6.3

  	
  Purchaser Regulatory Approvals

  
	
   

  	
   

  
	
  Schedule 7.1

  	
  Conduct of Business

  

 

v

 

This PURCHASE AND ASSUMPTION AGREEMENT,
dated as of April 6, 2009 (“Agreement”), between Wachovia Bank,
N.A. (“Seller”) and Heritage Bank of Commerce (“Purchaser”).  Wells Fargo & Company, a Delaware
corporation and parent of Seller (“Parent”), is executing this Agreement
solely for purposes of Section 12.6.

 

RECITALS

 

Seller.  Seller is a national banking association with
its principal office located in Charlotte, North Carolina.

 

Purchaser.  Purchaser is a California banking corporation
with its principal office located in San Jose, California.

 

Purchase and Assumption
Transaction. 
Purchaser desires to acquire from Seller, and Seller desires to sell to
Purchaser, certain assets of Seller, in accordance with and subject to the
terms and conditions of this Agreement.

 

Continuation of Service.  Purchaser and Seller each intend to continue
providing retail and business banking services in the geographic regions served
by the Branches (as defined below) to be acquired by Purchaser under this
Agreement.

 

NOW, THEREFORE, in consideration
of the premises and the mutual promises and obligations set forth herein, the
parties agree as follows:

 

ARTICLE 1

CERTAIN DEFINITIONS

 

1.1           Certain Definitions.  The terms set forth below are used in this
Agreement with the following meanings:

 

“Accounting Firm” means Grant Thornton LLP.

 

“Accrued Interest” means, as of any date, with respect to a
Deposit, interest which is accrued on such Deposit to but excluding such date
and not yet posted to the relevant deposit account.

 

“Accrued Liabilities” has the meaning set forth in Section 2.2(a).

 

“ACH Direct Deposit Cut-Off Date” has the meaning set forth in Section 4.3.

 

“Adjusted Payment Amount” means as of the Closing Date (x) the
aggregate balance (including Accrued Interest) of the Deposits and Accrued
Liabilities, minus (y) the Purchase Price, each as set forth on the Final
Closing Statement.  For avoidance of
doubt, the Adjusted Payment Amount may be a negative amount.

 

“Adjustment Date” has the meaning set forth in Section 3.3.

 

 

“Affiliate” means, with respect to any Person, any other Person
directly or indirectly controlling, controlled by or under common control with
such Person.

 

“Agreement” means this Purchase and Assumption Agreement,
including all schedules, exhibits and addenda, each as amended from time to
time in accordance with Section 12.9(b).

 

“Assets” has the meaning set forth in Section 2.1(a).

 

“Assignment and Assumption Agreement” has the meaning set forth
in Section 3.5(c).

 

“Assumed Liabilities” has the meaning set forth in Section 2.2.

 

“Branch Employees” means the employees of Seller employed at the
Branches as of the date hereof (including those employees who are on an
approved leave of absence under Seller’s policies as of the date hereof) and
any employees transferred to or hired by Seller at the Branches with Purchaser’s
consent as contemplated by Section 7.1(c)(i) hereof.  Schedule 1.1(a) sets forth a list of the
Branch Employees and their original date of hire, their adjusted “service date,”
if applicable, position, status as full or part-time (with the number of
regularly scheduled weekly hours), active or on leave, if on leave whether the
employee is anticipated to return to work by the Closing Date and, if not
anticipated to return to work by the Closing Date, the anticipated date of
return to work, base salary or wages, any other compensation, the amount of
severance payment to which the Branch Employee would be entitled under Seller’s
severance plan if the employee were qualified for severance pay as of the
Closing Date, and such other information as the parties mutually agree is
necessary to facilitate the hiring of the Branch Employees as contemplated by Section 8.7.  Seller shall update Schedule 1.1(a) from
time to time to reflect any changes permitted by this Agreement after the date
hereof.

 

“Branch Leases” means the leases under which Seller leases land,
parking and/or buildings used as Branches, including ground leases.

 

“Branch” or “Branches” means each of the banking offices
of Seller at the locations identified on Schedule 1.1(b) hereto.

 

“Business Day” means a day on which banks are generally open for
business in California and which is not a Saturday or Sunday.

 

“Call Report” has the meaning set forth in Section 2.2(b).

 

“Cap” has the meaning set forth in Section 11.3(e).

 

“Cash on Hand” means, as of any date, all petty cash, vault
cash, teller cash, on-premise ATM cash, prepaid postage and cash equivalents
held at a Branch.

 

“Closing” and “Closing Date” refer to the closing of the
P&A Transaction, which is to be held at such time and date as provided in Article 3
hereof.

 

“Code” means the Internal Revenue Code of 1986, as amended,
together with any rules and regulations promulgated thereunder.

 

2

 

“Core Deposits” means Deposits, but excluding Deposits that are
certificates of deposits with balances over $100,000, and excluding IRA and
Keogh Accounts.

 

“Deductible” shall have the meaning set forth in Section 11.3(a).

 

“Deposit-Related Loans” means all loans secured by a Deposit as
of the close of business on the Closing Date that are linked to an open account
and are not sixty (60) or more calendar days delinquent as of the Closing Date.

 

“Deposit(s)” means deposit liabilities with respect to deposit
accounts booked by Seller at the Branches or allocated by Seller to the
Branches as of the close of business on the Closing Date, which constitute “deposits”
for purposes of the Federal Deposit Insurance Act, 12 U.S.C. § 1813,
including collected and uncollected deposits and Accrued Interest (provided Seller has transferred the amount of Accrued
Interest to Purchaser at Closing), but excluding (a) deposit liabilities
with respect to accounts booked by Seller at any Branch and under or pursuant
to any judgment, decree or order of any court; (b) deposit liabilities
with respect to accounts registered in the name of a trust for which Seller
serves as trustee (other than deposits held by an IRA or Keogh Account); (c) deposit
liabilities with respect to accounts booked by Seller at any Branch for which
Seller serves as guardian or custodian (other than deposits held by an IRA or
Keogh Account); (d) Excluded IRA/Keogh Account Deposits and (e) other
deposit liabilities, if any, designated as “Excluded Deposits.”

 

“Draft Closing Statement” means a draft closing statement,
prepared by Seller, as of the close of business on the third (3rd) Business Day
preceding the Closing Date setting forth an estimated calculation of both the
Estimated Purchase Price and the Estimated Payment Amount.

 

“Employee Benefit Plan” means bonus, incentive-compensation,
deferred-compensation, profit-sharing, stock-option, stock-appreciation-right,
stock-bonus, stock-purchase, employee-stock-ownership, savings, severance,
change-in-control, supplemental-unemployment, layoff, salary-continuation,
retirement, severance, pension, health, life-insurance, disability, accident,
group-insurance, vacation, holiday, sick-leave, fringe-benefit or welfare plan,
and any other employee compensation or benefit plan, agreement, policy,
practice, commitment, contract or understanding (whether qualified or
nonqualified, currently effective or terminated, written or unwritten) related
thereto that (i) is maintained or contributed to by a Person or any of its
Affiliates, or with respect to which a Person or its Affiliate has or may have
any Liability, and (ii) provides benefits, or describes policies or
procedures applicable to any current employee, regardless of how (or whether)
Liabilities for the provision of benefits are accrued or assets are acquired or
dedicated with respect to the funding thereof).

 

“Encumbrances” means all mortgages, deed of trust, claims,
charges, liens, encumbrances, easements, limitations, restrictions, commitments
and security interests, except for (i) statutory liens securing tax and/or
other payments not yet due; (ii) liens incurred in the ordinary course of
business, including liens in favor of mechanics or materialmen; and (iii) except
for obligations pursuant to applicable escheat and unclaimed property laws
relating to the Escheat Deposits.

 

3

 

“Environmental Law” means any Federal, state, or local law,
statute, rule, regulation, code, rule of common law, order, judgment,
decree, injunction or agreement with any Federal, state, or local 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 and now in effect.  Environmental Laws include the Clean Air Act
(42 USC §7401 et seq.); the Comprehensive Environmental Response
Compensation and Liability Act (42 USC §9601 et seq.); the Resource
Conservation and Recovery Act (42 USC §6901 et seq.); the Federal Water
Pollution Control Act (33 USC §1251 et seq.); and the Occupational Safety
and Health Act (29 USC §651 et seq.).

 

“Escheat Deposits” means, as of any date, Deposits and safe
deposit box contents, in each case held on such date at the Branches which
become subject to escheat, in the calendar year in which the Closing occurs, to
any governmental authority pursuant to applicable escheat and unclaimed
property laws.

 

“Estimated Payment Amount” means (x) the aggregate balance
(including Accrued Interest) of the Deposits and Accrued Liabilities, if any, minus (y) the Estimated Purchase Price, each as set
forth on the Draft Closing Statement as reasonably mutually agreed by Seller
and Purchaser prior to Closing.  For
avoidance of doubt, the Estimated Payment Amount may be a negative amount.

 

“Estimated Purchase Price” means the Purchase Price as estimated
prior to the Closing Date for purposes of, and as set forth on, the Draft
Closing Statement.

 

“Excluded Deposits” means, if any, the Escheat Deposits,
Deposits related to Deposit Related Loans and Deposits related to Overdraft
Loans, the Excluded IRA and Keogh Account Deposits set forth in
Schedule 1.1(d), as updated as of the Closing Date.

 

“Excluded IRA and Keogh Account Deposits” shall have the meaning
set forth in Section 2.5.

 

“Excluded Liabilities” has the meaning set forth in Section 2.2(b).

 

“FDIC” means the Federal Deposit Insurance Corporation.

 

“Federal Funds Rate” on any day means the per annum rate of
interest (rounded upward to the nearest 1/100 of 1%) which is the weighted
average of the rates on overnight federal funds transactions arranged on such
day or, if such day is not a Business Day, the previous Business Day, by
federal funds brokers computed and released by the Federal Reserve Bank of New
York (or any successor) in substantially the same manner as such Federal
Reserve Bank currently computes and releases the weighted average it refers to
as the “Federal Funds Effective Rate” at the date of this Agreement.

 

“Federal Reserve Board” means the Board of Governors of the
Federal Reserve System.

 

4

 

“FedWire Direct Deposit Cut-off Date” has the meaning set forth
in Section 4.3.

 

“Final Closing Statement” means a final closing statement,
prepared by Seller, on or before the thirtieth (30th) calendar day following
the Closing Date setting forth both the Purchase Price and the Adjusted Payment
Amount.

 

“First American” means First American Title Insurance Company.

 

“Government Authorization” means any consent, license, franchise
registration, certification, certificate of public convenience, authorization
or permit issued, granted, given or otherwise made available by or under the
authority of any government authority or to any Legal Requirement.

 

“Grant Deeds” has the meaning set forth in Section 3.5(a).

 

“Hazardous Substance” means any substance, whether liquid, solid
or gas (a) listed, identified or designated as hazardous or toxic; (b) which,
applying criteria specified in any Environmental Law, is hazardous or toxic; or
(c) the use or disposal, or any manner or aspect of management or
handling, of which is regulated under Environmental Law.

 

“Information” has the meaning set forth in Section 7.2(b).

 

“Insured Exception” has the meaning set forth in Section 7.11.

 

“IRA” means a non-discretionary “individual retirement account”
or similar account created by a trust for the exclusive benefit of any
individual or his beneficiaries in accordance with the provisions of Section 408
of the Code.

 

“IRS” means the Internal Revenue Service.

 

“Keogh Account” means a non-discretionary account created by a
trust for the benefit of employees (some or all of whom are owner-employees)
and that complies with the provisions of Section 401 of the Code.

 

“Lease Assignment” has the meaning set forth in Section 3.5(d).

 

“Legal Proceeding” means any judicial, administrative or arbitral
actions, suits, proceedings (public or private) or claims or any proceedings by
or before a governmental body, including any civil, criminal, investigative or
informal actions, audits, demands, claims, hearings, litigations, disputes,
inquiries, investigations or other proceedings of any kind or nature.

 

“Legal Requirement” means any federal, state, or local law,
constitution, ordinance, code, rule of common law, regulation, statute or
treaty.

 

“Liability” means any debt, loss, damage, penalty, adverse
claim, liability or obligation (whether direct or indirect, known or unknown,
asserted or unasserted, absolute or contingent, accrued or unaccrued,
liquidated or unliquidated, or due or to become due, and whether in 

 

5

 

contract, tort, strict liability or otherwise), and
including all reasonable costs and expenses relating thereto.

 

“Loss” means the amount of losses, liabilities, damages
(including forgiveness or cancellation of obligations) and reasonable expenses
(including reasonable expenses of investigation and reasonable attorneys’ fees
and expenses in connection with any action, suit or proceeding) actually
incurred or suffered by the indemnified party or its Affiliates in connection
with the matters described in Article 11, less
the amount of any amount actually recovered under insurance policies (net of
all third party costs and expenses incurred in pursuing any such insurance
recovery, including, but not limited to, those relating to deductibles and
actual premium adjustments directly resulting from such damage, loss, liability
or expense).

 

“Material Adverse Effect” means (a) with respect to Seller,
(i) a material adverse effect on the business or direct economic results
of operations of the Branches, taken as a whole, or (ii)  a material
impairment of, or delay in, Seller’s ability to effect the transactions
contemplated herein or to perform its financial or other obligations under this
Agreement, including ability of Seller to timely consummate the P&A
transaction as contemplated by this Agreement, and (b) with respect to
Purchaser, a material adverse effect on the ability of Purchaser to perform any
of its financial or other obligations under this Agreement, including the
ability of Purchaser to timely consummate the P&A Transaction as
contemplated by this Agreement provided that none of the following shall
be deemed, either alone or in combination, to constitute, and none of the
following shall be taken into account in determining whether there has been or
will be, a Material Adverse Effect with respect to Seller or Purchaser, as the
case may be,: any effect, event, development or change primarily arising out of
or resulting from (i) changes, after the date hereof, in generally
accepted accounting principles or regulatory accounting requirements applicable
to banks or savings associations and their holding companies generally, (ii) changes,
after the date hereof, in any Legal Requirement of general applicability or
interpretations thereof by courts or governmental agencies or authorities, (iii) changes,
after the date hereof, in global or national political conditions or in general
U.S. or global economic or market conditions affecting banks or their holding
companies generally (including changes in interest or exchange rates or in
credit availability and liquidity) unless the effect on Seller is
disproportionate to that experienced by similarly situated financial services
companies, (iv) public disclosure of the transactions contemplated hereby,
including the impact thereof on customers, suppliers, licensors and employees,
or (v) the commencement, occurrence, continuation or intensification of
any war, sabotage, armed hostilities or acts of terrorism not directly
involving the properties or assets of the applicable Person or its
subsidiaries.

 

“Non-Transferred Employees” has the meaning set forth in Section 8.7(d).

 

“OCC” means the Office of the Comptroller of the Currency.

 

“Offering Memo” means the Wells Fargo/Wachovia Offering
Memorandum relating to the sale of the Branches dated December 2008.

 

“Order” means any order, injunction, judgment, decree, ruling,
assessment or arbitration award of any federal, state or local governmental
body or arbitrator.

 

6

 

“Other Assets” has the meaning set forth in Section 2.1(a).

 

“Overdraft Loans” means unsecured overdraft loans, including
negotiable order of withdrawal line of credit accounts, relating to the
Deposits, as of the close of business on the Closing Date, plus Accrued
Interest and accrued fees, which do not exceed the applicable credit limit and
are linked to any open Deposit account.

 

“Owned Real Property” means Real Property where Seller owns both
the real property and improvements thereon that are used for Branches.

 

“P&A Transaction” means the purchase and sale of Assets and
the assumption of Liabilities described in Sections 2.1 and 2.2.

 

“Permitted Real Estate Exceptions” means (i) all defects,
exceptions, restrictions, easements, rights of way and encumbrances disclosed
in policies of title insurance which have been made available to Purchaser; and
(ii) minor survey exceptions, reciprocal easement agreements and other
customary encumbrances on title to real property that for purposes of clauses (i)
and (ii) of this definition: (a) do not render title to the property encumbered
thereby unmarketable (including restricting ingress to and egress from the
property), (b) do not, individually or in the aggregate, detract from the value
of or interfere with the value of or the use of such property for its current
and anticipated purposes, or (c) do not require or will not require the payment
by Purchaser of any Tax or other payment whether due and owning or not yet due
related to the ownership of the property prior to the Closing Date (except as
provided in Sections 3.7 and 8.2).

 

“Person” is to be interpreted broadly to include an individual,
a corporation, a partnership, a limited liability company, a joint venture, a
trust, an unincorporated association or organization, or a government body,
agency or instrumentality.

 

“Personal Property” means all of the personal property of Seller
located in the Branches consisting of the trade fixtures, shelving, furniture,
on-premises ATMs, security systems, safe deposit boxes (including keys, but
exclusive of contents), vaults, telephone numbers, sign structures (exclusive
of signage containing any trade name, trademark or service mark, if any, of
Seller or any of its Affiliates) supplies excluding any items consumed or
disposed of, but including new items acquired or obtained, in the ordinary
course of the operation of the Branches through the Closing Date; provided, however, that Personal Property shall not include
computer hardware (except for ATMs, computer and telephone cabling and
associated termination blocks), proprietary or licensed software, electronic
teller station hardware and other hardware related to teller stations and
platforms or any personal property subject to a Personal Property Lease.  The Personal Property is set forth on
Schedule 2.1(a)(iii) and shall be updated as of the Closing Date.

 

“Personal Property Leases” means the leases under which Seller
leases certain property in the Branches that would be “Personal Property” but
for the proviso to such defined term, and which lease agreement relates only to
one or more of the Branches and not to any other facilities of Seller or its
Affiliates, as set forth on Schedule 2.1(a)(iii), as updated as of the Closing
Date.

 

“Prospective Transferred Employees” has the meaning set forth in
Section 8.7(a).

 

7

 

“Purchase Price” has the meaning set forth in Section 2.3.

 

“Real Property” means the parcels of real property on which the
Branches listed on Schedule 1.1(b) are located, including any improvements
thereon, which Schedule indicates whether or not such real property is Owned
Real Property.

 

“Records” means all current records, documents instruments,
account cards, books, reports, tapes, files, title policies, or where
reasonable and appropriate copies thereof (for each case whether or not in
electronic form), in Seller’s possession or otherwise reasonably available that
exclusively pertain to and are used by Seller to administer, reflect, monitor,
evidence or record information respecting the business or conduct of the
Branches, the Assets, the Assumed Liabilities, or the Deposits, including all
such records maintained to comply with any Legal Requirement to which the
Deposits are subject, including but not limited to applicable unclaimed
property and escheat laws; provided, however,
it is understood and agreed that Seller shall be permitted to retain such books
and records that contain information primarily relating to other assets and
liabilities not constituting Assets and Assumed Liabilities; provided further that in any such case Seller shall provide
to Purchaser such portions or copies of such records as are (i) reasonably
necessary to vest in Purchaser title to any of the Assets or for the
enforcement of Purchaser’s rights, title or interest in the Assets or the
Assumed Liabilities or (ii) reasonably necessary and material to Purchaser’s
conduct of the business of the Branches after the Closing.

 

“Regulatory Approvals” means all approvals, authorizations, waivers
or consents of, or notices to, any governmental agencies or authorities
required to consummate the P&A Transaction, including the following:  (i) any required approvals of and/or notices
to the California Department of Financial Institutions, OCC, the Federal
Reserve Board, and the FDIC, (ii) any required approvals of and/or notices to
California Department of Financial Institutions, and (iii) the expiration of
any waiting period associated with any required Regulatory Approval.

 

“Regulatory Authority” means any federal or state banking, other
regulatory, self-regulatory or enforcement authority or any court,
administrative agency or commission or other governmental authority or
instrumentality.

 

“Safe Deposit Agreements” means the agreements relating to safe
deposit boxes located in the Branches.

 

“Seller’s knowledge” or other similar phrases means information
that is actually known to any of the individuals set forth in Schedule 1.1(e) or
knowledge obtained after a reasonable inquiry that a reasonable person would
conduct under the circumstances and transactions contemplated hereby.

 

“Seller Disclosure Schedule” means the disclosure schedule of
Seller delivered to Purchaser in connection with the execution and delivery of
this Agreement.

 

“Severance Entitled Transferred Employee” has the meaning set
forth in Section 8.7(h).

 

“Survey” has the meaning set forth in Section 7.11.

 

8

 

“Tax Returns” means any return or other report required to be
filed with respect to any Tax, including declaration of estimated tax and
information returns.

 

“Taxes” means any federal, state, local, or foreign taxes,
including but not limited to taxes on or measured by income, estimated income,
franchise, capital stock, employee’s withholding, non-resident alien
withholding, backup withholding, social security, occupation, unemployment,
disability, value added taxes, taxes on services, real property, personal
property, sales, use, excise, transfer, gross receipts, inventory and merchandise,
business privilege, and other taxes or amounts required to be withheld and paid
over to any government in respect of any tax, including any interest,
penalties, or additions to tax on the foregoing whether or not disputed.

 

“Third Party Claim” means any Legal Proceeding by a Person not a
party to this Agreement and not an Affiliate of one of the parties hereto.

 

“Title Commitment” has the meaning set forth in Section 7.11.

 

“Title Objection” has the meaning set forth in Section 7.11.

 

“Transaction Account” means any account at a Branch 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.

 

“Transfer Date” has the meaning set forth in Section 8.7(d).

 

“Transferred Employees” has the meaning set forth in Section 8.7
(d).

 

1.2                                 Accounting
Terms.  All accounting terms not
otherwise defined herein shall have the respective meanings assigned to them in
accordance with consistently applied generally accepted accounting principles
as in effect from time to time in the United States of America.

 

1.3                                 Interpretation.  All references in this Agreement to Articles
or Sections are references to Articles or Sections of this Agreement, unless
some other reference is clearly indicated. 
Whenever the words “include,” “includes” or “including” are used in this
Agreement, they shall be deemed to be followed by the words “without limitation.”  The rule of construction against the
draftsman shall not be applied in interpreting and construing this Agreement.

 

ARTICLE 2

THE P&A TRANSACTION

 

2.1                                 Purchase
and Sale of Assets.  (a) Subject to
the terms and conditions set forth in this Agreement, at the Closing, Seller
shall grant, sell, convey, assign, transfer and deliver to Purchaser, and
Purchaser shall purchase and accept from Seller, all of Seller’s right, title
and interest free and clear of all Encumbrances (excluding any Permitted Real
Estate Exceptions), as of the Closing Date, in and to the following
(collectively, the “Assets”):

 

(i)                                     Cash
on Hand;

 

9

 

(ii)                                  the
Owned Real Property;

 

(iii)                               the
Personal Property;

 

(iv)                              the
Personal Property Leases;

 

(v)                                 the
Branch Leases;

 

(vi)                              the
Safe Deposit Agreements;

 

(vii)                           prepaid
expenses, including rents, utilities and security deposits as described in
Schedule 2.1(a)(vii) (“Other Assets”); and

 

(viii)                        the
Records.

 

(b)                                 Purchaser
understands and agrees that it is purchasing only the Assets (and assuming only
the Assumed Liabilities) and the customer relationships relating to the deposit
accounts as specified in this Agreement and, except as expressly provided in
this Agreement, Purchaser will not acquire any interest in or right to any
other business relationship which Seller or its Affiliates may have with any
customer of the Branches, including:  (i)
any deposit account or other service of Seller or its Affiliates at any other
office of Seller or its Affiliates which may be linked to the Deposits; (ii) any
deposit account that sweeps from the Branch to a third party; (iii) any
merchant card banking business; and (iv) controlled disbursement accounts that
Seller or its Affiliates may provide to any customer of the Branches.  It is expressly understood and agreed that
the Assets shall not include any securities or brokerage relationships,
custodial and trust relationships (except as they relate to IRA and Keogh accounts
to the extent contemplated by Section 2.5), insurance relationships, credit
card relationships or other relationships (other than the deposit account
relationship) between any customer of the Branches and the Seller or its
Affiliates, or any right to the use of any sign, trade name, trademark or
service mark, if any, of Seller or any of its Affiliates.  Notwithstanding anything contained in this
Agreement to the contrary and to avoid any uncertainty, Purchaser and its
Affiliates shall not be prohibited or otherwise restricted from marketing to
any customer of the Branches acquired in connection with the P&A
Transaction any of its products, services, accounts or relationships.

 

2.2                                 Assumption
of Liabilities.  (a) Subject to the
terms and conditions set forth in this Agreement, at the Closing, Purchaser
shall assume, pay, perform and discharge the duties, responsibilities,
obligations or Liabilities of Seller to be discharged, performed, satisfied or
paid from and after the Closing Date, solely with respect to the following
(collectively, the “Assumed Liabilities”):

 

(i)                                     the
Deposits (other than Accrued Interest), including IRA and Keogh Accounts to the
extent contemplated by Section 2.5;

 

(ii)                                  the
Branch Leases;

 

(iii)                               the
Personal Property, if any, and the Personal Property Leases, if any;

 

10

 

(iv)                              the
Safe Deposit Agreements; and

 

(v)                                 the
accrued liabilities, if any, described in Schedule 2.2(a)(v) (the “Accrued
Liabilities”).

 

(b)                                 Notwithstanding
anything to the contrary in this Agreement, Purchaser shall not assume or be
bound by any Liabilities of Seller or of any of its Affiliates, including,
without limitation, (i) any Liabilities of Seller and its Affiliates arising
out of or relating to the business of the Branches, the Branch Employees, the
Employee Benefit Plans or the Assets prior to the Closing Date or as a result
of the Closing, other than the Assumed Liabilities or as otherwise expressly
set forth herein, and (ii) any special assessment related to the Deposits
assessed by the FDIC based on a quarterly Report of Condition and Income (a “Call
Report”) filed by Seller or one of its Affiliates prior to the Closing Date
(collectively, the “Excluded Liabilities”).

 

2.3                                 Purchase
Price.  The purchase price (“Purchase
Price”) for the Assets shall be the sum of:

 

(a)                                  An
amount equal to 0.25% of the Core Deposits transferred to Purchaser on the
Closing Date;

 

(b)                                 The
aggregate amount of Cash on Hand as of the Closing Date; and

 

(c)                                  $2,217,800
for all of the remaining Assets (including the Owned Real Property), other than
Cash on Hand.

 

2.4                                 [Intentionally
Omitted].

 

2.5                                 Assumption
of IRA and Keogh Account Deposits.  (a)
With respect to Deposits in IRAs, Seller will use reasonable efforts and will
cooperate with Purchaser in taking any action reasonably necessary to
accomplish either the appointment of Purchaser as successor custodian or the
delegation to Purchaser of Seller’s authority and responsibility as custodian
of all such IRA deposits, including sending to the depositors thereof
appropriate notices, cooperating with Purchaser in soliciting consents from
such depositors, and filing any appropriate applications with applicable
regulatory authorities.  If any such
delegation is made to Purchaser, Purchaser will perform all of the duties so
delegated and comply with the terms of Seller’s agreement with the depositor of
the IRA Deposits affected thereby.

 

(b)                                 With
respect to Deposits in Keogh Accounts, Seller will use reasonable efforts and
will cooperate with Purchaser to invite depositors thereof to direct a transfer
of each such depositor’s Keogh Account and the related Deposits to Purchaser,
as trustee thereof, and to adopt Purchaser’s form of Keogh Master Plan as a
successor to that of Seller.  Purchaser
will assume no Keogh Accounts unless Purchaser has received to its satisfaction
the documents necessary for such assumption at or before the Closing.

 

(c)                                  If,
notwithstanding the foregoing, as of the Closing Date, Purchaser shall be
unable to retain deposit liabilities in respect of an IRA or Keogh Account,
such deposit 

 

11

 

liabilities shall be excluded from Deposits for
purposes of this Agreement and shall constitute “Excluded IRA/Keogh Account
Deposits.”

 

ARTICLE 3

CLOSING PROCEDURES; PAYMENT ADJUSTMENTS

 

3.1                                 Closing.  (a) The Closing will be held at the offices
of Seller’s parent company, Wells Fargo & Company, at 420 Montgomery
Street, San Francisco, California, or such other place as may be agreed to by
the parties.

 

(b)                                 Subject
to the satisfaction or, where legally permitted, the waiver of the conditions
set forth in Article 9, the Closing Date shall be August 7, 2009, or, if the
Closing cannot occur on such date, on a date and time as soon thereafter as
practicable after receipt of all Regulatory Approvals and the expiration of all
related statutory waiting periods, subject to the next sentence of this Section
3.1(b).  Unless the parties agree
pursuant to Section 4.10(a) that the conversion of the data processing with
respect to the Branches and the Assets and Assumed Liabilities will be
performed on a date other than the Closing Date, the Closing Date shall be a
Friday and shall become effective at 11:59 p.m., Pacific Time on such date.

 

3.2                                 Payment
at Closing.  (a) Within three (3) Business
Days before the Closing Date, Seller shall deliver to Purchaser the Draft
Closing Statement.

 

(b)                                 At
Closing, (i) if the Estimated Payment Amount as set forth on the Draft Closing
Statement is a positive amount, Seller shall pay to Purchaser an amount in
dollars equal to such positive amount, or (ii) if the Estimated Payment Amount
as set forth on the Draft Closing Statement is a negative amount, Purchaser
shall pay to Seller an amount in dollars equal to the absolute value of such
negative amount.  In addition, Purchaser
shall pay to Seller any sales tax due.

 

(c)                                  All
payments to be made hereunder by one party to the other shall be made by wire
transfer of immediately available funds (in all cases to an account specified
in writing by Seller or Purchaser, as the case may be, to the other not later
than the third (3rd) Business Day prior to the Closing Date) on the date of
payment.

 

(d)                                 If
any instrument of transfer contemplated herein shall be recorded in any public
record before the Closing and thereafter the Closing does not occur, then at
the request of such transferring party the other party will deliver (or execute
and deliver) such instruments and take such other action as such transferring
party shall reasonably request to revoke such purported transfer.

 

3.3                                 Adjustment
of Purchase Price.  (a) On the
thirtieth (30th) calendar day following the Closing Date (the “Adjustment
Date”), Seller shall deliver to Purchaser the Final Closing Statement and
shall make available such work papers, schedules and other supporting data as
may be reasonably requested by Purchaser to enable it to verify the amounts set
forth in the Final Closing Statement. 
The Final Closing Statement shall also set forth the Adjusted Payment
Amount.

 

12

 

(b)                                 The
determination of the Adjusted Payment Amount shall be final and binding on the
parties hereto on the thirtieth (30th) calendar day after receipt by Purchaser
of the Final Closing Statement, unless Purchaser shall notify Seller in writing
of its objection (“notice of objection”) with any amount included therein or
omitted therefrom, in which case, the Seller and Purchaser shall attempt in
good faith to resolve such objections within ten (10) Business Days of the
receipt by Seller of the written notice of objection and any written resolution
by them as to any disputed amount shall be deemed final and binding with
respect to the determination of the Adjusted Payment Amount.  If the Purchaser and Seller are unable to
reach resolution of the objections set forth in the Seller’s notice of
objection, Seller and Purchaser shall submit the issues remaining in dispute to
Accounting Firm for resolution.  If
issues are submitted to the Accounting Firm for resolution, Seller and
Purchaser shall furnish or cause to be furnished to the Accounting Firm such
work papers Schedules, records and other documents and information relating to
the disputed issues as the Accounting Firm may request and are available to
that party or its agents and shall be afforded the opportunity to present to
the Accounting Firm any material relating to the disputed issues and to discuss
the issues with the Accounting Firm.  In
the event the fees of the Accounting Firm, as estimated by such firm, would
exceed fifty percent (50%) of the net amount in dispute, the parties agree that
the Accounting Firm will not be engaged by either party and that such net
amount in dispute will be equally apportioned between Seller and
Purchaser.  The 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 the Accounting Firm
shall be final and binding on the parties hereto.  The fees of the Accounting Firm shall be
divided equally between Seller and Purchaser.

 

(c)                                  On
the fifth (5th) Business Day after the Adjusted Payment Amount shall have
become final and binding or, in the case of a dispute, the date of the
resolution of the dispute pursuant to subsection 3.3(b) above, if the Adjusted
Payment Amount exceeds the Estimated Payment Amount, Seller shall pay to
Purchaser an amount in dollars equal to such excess, plus interest on such
excess amount from the Closing Date to but excluding the payment date, at the
Federal Funds Rate or, if the Estimated Payment Amount exceeds the Adjusted
Payment Amount, Purchaser shall pay to Seller an amount in dollars equal to
such excess, plus interest on such excess amount from the Closing Date to but
excluding the payment date, at the Federal Funds Rate.

 

3.4                                 Proration;
Other Closing Date Adjustments.  (a) Except
as otherwise specifically provided in this Agreement, it is the intention of
the parties that Seller will operate the Branches for its own account until
11:59 p.m., Pacific Standard Time, on the Closing Date, and that Purchaser
shall operate the Branches, hold the Assets and assume the Assumed Liabilities
for its own account after the Closing Date. 
Thus, except as otherwise specifically provided in this Agreement, items
of income and expense, as defined herein, shall be prorated as of 11:59 p.m.,
Pacific Standard Time, on the Closing Date, and settled between Seller and
Purchaser on 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.

 

(b)                                 For
purposes of this Agreement, items of proration and other adjustments shall
include:  (i) rental payments under the
Branch Leases; (ii) personal and real property taxes and assessments; (iii) other
prepaid expenses and items and accrued but unpaid liabilities, as of 

 

13

 

the close of business on the Closing Date; and (iv) safe
deposit rental payments previously received by Seller.

 

3.5                                 Seller
Deliveries.  At the Closing, Seller
shall deliver to Purchaser:

 

(a)                                  Deeds
in substantially the form of Schedule 3.5(a), pursuant to which the Owned Real
Property shall be transferred to Purchaser “AS IS”, “WHERE IS” and with all
faults (the “Grant Deeds”);

 

(b)                                 A
bill of sale in substantially the form of Schedule 3.5(b) (except as otherwise
required by local state law), pursuant to which the Personal Property shall be
transferred to Purchaser “AS IS”, “WHERE IS” and with all faults;

 

(c)                                  An
assignment and assumption agreement in substantially the form of Schedule 3.5(c)
(except as otherwise required by local state law), with respect to the Assumed
Liabilities (the “Assignment and Assumption Agreement”);

 

(d)                                 Estoppel
and Consent Letters (to the extent required) in substantially the form of
Schedule 3.5(d), with respect to each of the Branch Leases (the “Estoppel
and Consent Letters”);

 

(e)                                  An
Officer’s Certificate in substantially the form of Schedule 3.5(e);

 

(f)                                    The
Draft Closing Statement;

 

(g)                                 A
certification of non-foreign status meeting the requirements of Treasury
Regulation 1.1445-2(b)(2), duly executed and acknowledged, substantially in the
form of the sample certificates set forth in Treasury Regulation Section 1.1445-2(b)(2)(iv);

 

(h)                                 Seller’s
resignation as trustee or custodian, as applicable, with respect to each IRA or
Keogh Account included in the Deposits and designation of Purchaser as
successor trustee or custodian with respect thereto, as contemplated by Section
2.5;

 

(i)                                     An
ALTA form of owner policy of title insurance issued by First American (at
Seller’s expense) for the Owned Real Property, naming Purchaser as insured
having an effective date as of the Closing Date, in form and substance
(including any exceptions or exclusions to coverage) satisfactory to Purchaser
in its sole and absolute discretion.

 

(j)                                     Such
other documents as the parties determine are reasonably necessary to consummate
the P&A Transaction as contemplated hereby; and

 

(k)                                  The
Estimated Payment Amount, if applicable.

 

3.6                                 Purchaser
Deliveries.  At the Closing,
Purchaser shall deliver to Seller:

 

(a)                                  The
Assignment and Assumption Agreement;

 

14

 

(b)                                 The
Estoppel and Consent Letters (to the extent required) and such other
instruments and documents as any landlord under a Branch Lease may reasonably
require as necessary or desirable for providing for the assumption by Purchaser
of a Branch Lease, each such instrument and document in form and substance
reasonably satisfactory to the parties and dated as of the Closing Date;

 

(c)                                  An
Officer’s Certificate in substantially the form of Schedule 3.6(c);

 

(d)                                 Purchaser’s
acceptance of its appointment as successor trustee or custodian, as applicable,
of the IRA and Keogh Accounts included in the Deposits and assumption of the
fiduciary obligations of the trustee or custodian with respect thereto, as
contemplated by Section 2.5;

 

(e)                                  Such
other documents as the parties determine are reasonably necessary to consummate
the P&A Transaction as contemplated hereby; and

 

(f)                                    The
Estimated Payment Amount, if applicable.

 

3.7                                 Owned
Real Property Filings.  On or prior
to the Closing Date, Seller shall file or record, or cause to be filed or
recorded, any and all documents necessary in order that the legal and equitable
title to Owned Real Property shall be duly vested in Purchaser.  Any filing expenses or documentary transfer
taxes with respect to such filings and all escrow closing costs shall be shared
equally by Seller and Purchaser.

 

ARTICLE 4

TRANSITIONAL MATTERS

 

4.1                                 Transitional
Arrangements.  Seller and Purchaser
agree to cooperate and to proceed as follows to effect the transfer of account
record responsibility for the Branches:

 

(a)                                  As
soon as practicable after the execution of this Agreement by the parties
hereto, but in no event later than fifteen (15) calendar days after the date of
this Agreement, Seller will meet with Purchaser to investigate, confirm and agree
upon mutually acceptable transaction settlement procedures and specifications,
files, deliverables, procedures and schedules, for the transfer of account
record responsibility for the Branches; provided, however,
that neither Seller nor its Affiliates shall be obligated under this Agreement
to provide Purchaser any information regarding the business relationships
described in Section 2.1(b) of this Agreement. 
Not later than twenty-five (25) Business Days after the date of this
Agreement, Seller shall deliver to Purchaser the specifications and conversion
sample files to consist of live data of all accounts.

 

(b)                                 After
Purchaser has tested and confirmed the conversion sample files, Seller shall
provide Purchaser with account information, as of a recent date, including
complete name and address, account masterfile, ATM account number information,
applicable transaction and stop/hold/caution information, account-to-account
relationship information and any other related information with respect to the
Deposits.  Seller shall, upon reasonable
request, but not later than thirty (30) days, provide to Purchaser an updated
version of such records; provided, however,
that Seller shall not be obligated to provide such updated records more than
twice.

 

15

 

(c)                                  Seller
shall provide Purchaser after close of business on the Closing Date, a final
conversion file containing all information as of close of business on the
Closing Date.

 

4.2                                 Customers.  (a) Not later than thirty (30) calendar days
nor earlier than sixty (60) calendar days prior to the Closing Date (except as
otherwise required by applicable law):

 

(i)                                     Seller
will notify the holders of Deposits to be transferred on the Closing Date that,
subject to the terms and conditions of this Agreement, Purchaser will be
assuming liability for such Deposits; and

 

(ii)                                  each
of Seller and Purchaser shall provide, or join in providing where appropriate,
all notices to customers of the Branches and other Persons that Seller or
Purchaser, as the case may be, is required to give under applicable law or the
terms of any other agreement between Seller and any customer in connection with
the transactions contemplated hereby.

 

A party proposing to send or publish any notice or
communication pursuant to this Section 4.2 shall furnish to the other party a
copy of the proposed form of such notice or communication at least five (5) calendar
days in advance of the date of the first mailing, posting, or other
dissemination thereof to customers, and shall not unreasonably refuse to amend
such notice to incorporate any changes that the other such party proposes as
necessary to comply with applicable law. 
All costs and expenses of any notice or communication sent or published
by Purchaser or Seller shall be the responsibility of the party sending such
notice or communication and all costs and expenses of any joint notice or
communication shall be shared equally by Seller and Purchaser.  As soon as reasonably practicable and in any
event within forty-five (45) calendar days after the date hereof, Seller shall
provide to Purchaser a report of the names and addresses of the owners of the
Deposits, and the lessees of the safe deposit boxes as of the date hereof in
connection with the mailing of such materials. 
No communications by Purchaser, and no communications by Seller outside
the ordinary course of business, to any such owners, borrowers or lessees shall
be made prior to the Closing Date except as provided in this Agreement or
otherwise agreed to by the parties.

 

(b)                                 Following
the giving of any notice described in paragraph (a) above, Purchaser and Seller
shall deliver to each new customer at any of the Branches such notice or
notices as may be reasonably necessary to notify such new customers of
Purchaser’s pending assumption of liability for the Deposits and to comply with
applicable law.

 

(c)                                  Notwithstanding
the provisions of Section 7.9, neither Purchaser nor Seller shall object to the
use by depositors of the Deposits of payment orders issued to or ordered by
such depositors on or prior to the Closing Date, which payment orders bear the
name, or any logo, trademark, service mark or proprietary mark, of Seller or
any of its Affiliates.

 

4.3                                 Direct
Deposits.  Seller will use its
reasonable best efforts to transfer to Purchaser on the Closing Date all of
those automated clearing house (“ACH”) and FedWire direct deposit
arrangements related (by agreement or other standing arrangement) to the
Deposits.  For a period of three (3) months
following the Closing Date, in the case of ACH direct deposits to accounts
containing Deposits (the final Business Day of such period being the “ACH
Direct Deposit Cut-

 

16

 

Off Date”), Seller shall transfer to
Purchaser all received ACH Direct Deposits each Business Day in accordance with
Seller’s customary procedures.  Purchaser
will send NACHA compliant Notice of Change on each transfer received.  On each Business Day, for a period of sixty
(60) calendar days following the Closing Date (the final Business Day of such
period being the “FedWire Direct Deposit Cut-Off Date”), FedWire direct
deposits received by Seller shall be returned (as soon as is practicable after
receipt) to the originator with an indication of Purchaser’s correct Wire Room contact
information and an instruction that such wire should be sent to Purchaser.  Compensation for ACH direct deposits or
FedWire direct deposits not forwarded to Purchaser on the same Business Day as
that on which Seller has received such deposits will be handled in accordance
with the applicable rules established by the United States Council on
International Banking.  After the
respective ACH Direct Deposit Cut-Off Date or FedWire Direct Deposit Cut-Off
Date, Seller may discontinue accepting and forwarding ACH and FedWire entries
and funds and return such direct deposits to the originators marked “Account
Sold.”  Seller and its Affiliates
shall not be liable for any overdrafts that may thereby be created.  Purchaser and Seller shall agree on a
reasonable period of time prior to the Closing during which Seller will no
longer be obligated to accept new direct deposit arrangements related to the
Branches.  At the time of the ACH Direct
Deposit Cut-Off Date, Purchaser will provide ACH originators with account
numbers relating to the Deposits.

 

4.4                                 Direct
Debits.  After the notice provided in
Section 4.2(a), Purchaser shall 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 the
transfer of customer direct debit authorizations from Seller to Purchaser.  Such notice shall be in a form reasonably
agreed to by the parties hereto.  For a
period of three (3) months following the Closing, Seller shall transfer to
Purchaser all received direct debits on accounts constituting Deposits each
Business Day in accordance with Seller’s customary procedures.  Purchaser will send NACHA compliant Notice of
Change on each direct debit received. 
Thereafter, Seller may discontinue forwarding such entries and return
them to the originators marked “Account Sold.” 
Purchaser and Seller shall agree on a reasonable period of time prior to
the Closing during which Seller will no longer be obligated to accept new
direct debit arrangements related to the Branches.  On the Closing Date, Purchaser shall provide
ACH originators of such Direct Debits with account numbers relating to the Deposits.

 

4.5                                 Escheat
Deposits.  After Closing, Purchaser
shall be solely responsible for the proper reporting and transmission to the
appropriate governmental entity of Escheat Deposits.

 

4.6                                 Access
to Records.  From and after the
Closing Date, each of the parties shall permit the other reasonable access to
any applicable records in its possession relating to matters arising on or
before the Closing Date and reasonably necessary in connection with any claim,
action, litigation or other proceeding involving the party requesting access to
such records or in connection with any legal obligation owed by such party to
any present or former depositor or other customer, subject to confidentiality
requirements.  All records, whether held
by Purchaser or Seller, shall be maintained for such periods as are required by
law, unless the parties shall agree in writing to a longer period.  Seller may maintain such copies of Records as
may be required by applicable law.

 

17

 

4.7                                 Interest
Reporting and Withholding.  (a) Unless
otherwise agreed to by the parties, Seller will report to applicable taxing
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 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 taxing 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 any early withdrawal penalties imposed upon the
Deposits.  Any amounts required by any
governmental agencies 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 agency 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 will be withheld by Purchaser in accordance with
applicable law or appropriate notice from any governmental agency and will be
remitted by Purchaser to the appropriate agency on or prior to the applicable due
date.

 

(b)                                 Unless
otherwise agreed by the parties, Seller shall be responsible for delivering to
payees all IRS 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 to be delivered following the Closing Date
with respect to the Deposits.

 

4.8                                 Negotiable
Instruments.  Seller will remove any
supply of Seller’s money orders, official checks, gift checks, travelers’
checks or any other negotiable instruments located at each of the Branches on
the Closing Date.

 

4.9                                 ATM/Debit
Cards; POS Cards.  Seller will
provide Purchaser with a list of ATM access/debit cards and Point-of-Sale (“POS”)
cards issued by Seller to depositors of any Deposits, and a record thereof in a
format reasonably agreed to by the parties containing all addresses therefor,
as soon as practicable and in no event later than thirty (30) calendar days
after the date of this Agreement.  At or
promptly after the Closing, Seller will provide Purchaser with a revised record
through the Closing.  In instances where
a depositor of a Deposit made an assertion of error regarding an account
pursuant to the Electronic Funds Transfer Act and Federal Reserve Board
Regulation E, and Seller, prior to the Closing, recredited the disputed amount
to the relevant account during the conduct of the error investigation,
Purchaser agrees to comply with a written request from Seller to debit such
account in a stated amount and remit such amount to Seller, to the extent of
the balance of funds available in the accounts. 
Seller agrees to indemnify Purchaser for any claims or losses that
Purchaser may incur as a result of complying with such request from
Seller.  Seller shall not be required to
disclose to Purchaser customers’ PINs or algorithms or logic used to generate
PINs.  Purchaser shall reissue ATM
access/debit cards to depositors of any Deposits not earlier than forty-five
(45) calendar days nor later than fifteen (15) calendar days prior to the
Closing Date, which cards shall be effective as of the day following the
Closing Date.  Purchaser and Seller agree
to settle any and all ATM transactions and POS transactions effected on or before
the Closing Date, but processed after the Closing Date, as soon as practicable
following the processing thereof.  In
addition, Purchaser assumes responsibility for and agrees to pay on
presentation all POS transactions initiated before or after 

 

18

 

the Closing with POS cards issued by Seller to access
Transaction Accounts (so long as sufficient funds are available in the
applicable Transaction Account).

 

4.10                           Data
Processing Conversion for the Branches and Handling of Certain Items.  (a)  The
conversion of the data processing with respect to the Branches and the Assets
and Assumed Liabilities will be completed on the Closing Date unless otherwise
agreed to by the parties.  Seller and
Purchaser agree to cooperate to facilitate the orderly transfer of data
processing information in connection with the P&A Transaction.  Within ten (10) calendar days of the date of
this Agreement, Purchaser and/or its representatives shall be permitted access
(subject to the provisions of Section 7.2(a)) to review each Branch for the
purpose of installing automated equipment for use by Branch personnel.  Following the receipt of all Regulatory
Approvals (except for the expiration of statutory waiting periods) and within
forty-five (45) calendar days prior to the Closing Date, Purchaser shall be
permitted, at its expense, to install and test communication lines and any
necessary related equipment, both internal and external, from each Branch and
prepare for the installation of automated equipment on the Closing Date.

 

(b)                                 As
soon as practicable and in no event more than three (3) Business Days after the
Closing Date, Purchaser shall mail to each depositor in respect of a
Transaction Account (i) a letter approved by Seller requesting that such
depositor promptly cease writing Seller’s drafts against such Transaction
Account and (ii) new drafts which such depositor may draw upon Purchaser
against such Transaction Accounts. 
Purchaser shall use its reasonable best efforts to cause these
depositors to begin using such drafts and cease using drafts bearing Seller’s
name.  The parties hereto shall use their
reasonable best efforts to develop procedures that cause Seller’s drafts
against Transaction Accounts received after the Closing Date to be cleared
through Purchaser’s then-current clearing procedures.  During the ninety (90) calendar-day period
after the Closing Date, if it is not possible to clear Transaction Account
drafts through Purchaser’s then-current clearing procedures, Seller shall make
available to Purchaser as soon as practicable but in no event more than three (3)
Business Days after receipt all Transaction Account drafts drawn against
Transaction Accounts.  Seller shall have
no obligation to pay such forwarded Transaction Account drafts.  Upon the expiration of such ninety (90)
calendar-day period, Seller shall cease forwarding drafts against Transaction
Accounts.

 

(c)                                  Any
items that were credited for deposit to or cashed against a Deposit prior to
the Closing and are returned unpaid on or within ninety (90) calendar days
after the Closing Date (“Returned Items”) will be handled as set forth
herein.  Except as set forth below,
Returned Items shall be the responsibility of Seller.  If depositor’s bank account at Seller is charged
for the Returned Item, Seller shall forward such Returned Item to
Purchaser.  If upon Purchaser’s receipt
of such Returned Item there are sufficient funds in the Deposit to which such
Returned Item was credited or any other Deposit transferred at the Closing
standing in the name of the party liable for such Returned Item, Purchaser will
debit any or all of such Deposits an amount equal in the aggregate to the
Returned Item, and shall repay that amount to Seller.  If there are not sufficient funds in the
Deposit because of Purchaser’s failure to honor holds placed on such Deposit,
Purchaser shall repay the amount of such Returned Item to Seller.

 

(d)                                 During
the ninety (90) calendar-day period after the Closing Date, any deposits or
other payments received by either Purchaser or Seller in error shall be
returned to the other party within two (2) Business Days of receipt by
Purchaser.

 

19

 

(e)                                  Prior
to the Closing Date, Purchaser will open and maintain a demand deposit accounts
with Seller for deposits, to be used for settlement activity following the
Closing Date.  Seller will provide
Purchaser with a daily statement for these accounts.  Purchaser will be responsible for initiating
all funding and draw-down activity against these accounts.  Purchaser will ensure that all debit
(negative) balances are funded no later then one day following the day the
account went into a negative status. 
Activity that will be settled through these accounts will include but
not be limited to:  items drawn on a
Deposit but presented to Seller for payment, ACH transactions, Direct Debit
transactions, and Returned Items.

 

ARTICLE 5

REPRESENTATIONS AND WARRANTIES OF SELLER

 

Seller represents and warrants to Purchaser as follows, except as set
forth in the Seller Disclosure Schedule:

 

5.1                                 Corporate
Organization and Authority.  Seller
is a national banking association, duly organized and validly existing under
the laws of the United States of America, and has the requisite power and authority
to conduct its business as now being conducted at the Branches.  Seller has the requisite corporate power and
authority and has taken all corporate action necessary in order to execute and
deliver this Agreement and to consummate the transactions contemplated
hereby.  This Agreement has been duly and
validly executed and delivered by Seller and (assuming due authorization,
execution and delivery by Purchaser) constitutes the valid and binding
obligation of Seller, enforceable against Seller in accordance with its terms
(except as may be limited by bankruptcy, insolvency, moratorium, reorganization
or similar laws affecting the rights of creditors generally and except as the
availability of equitable remedies may be limited by general principles of equity).

 

5.2                                 No
Conflicts.  The execution, delivery
and performance of this Agreement by Seller does not, and will not, (i) violate
any provision of Seller’s charter or by-laws, (ii) result in the creation of
any Encumbrance upon any of the Assets, (iii) subject to Regulatory Approvals,
violate or constitute a breach of, or default under, any Legal Requirement,
Order or Government Authorization to which Seller is subject, or (iv) violate
or result in a breach or default under any agreement or instrument of Seller,
or to which Seller is subject or by which Seller is otherwise bound, which
violation, breach, contravention or default referred to in clauses (iii) and (iv)
of this Section 5.2, individually or in the aggregate, would reasonably be
expected to have a Material Adverse Effect with respect to the Seller (assuming
the receipt of any required consents of lessors under the Branch Leases in
respect of the transactions herein contemplated).

 

5.3                                 Approvals
and Consents.  Other than Regulatory
Approvals relating to Seller as set forth in Schedule 5.3 and the consents
contemplated by Section 7.4, no notices, reports or other filings are required
to be made by Seller with, nor are any Government Authorization required to be
obtained by Seller in connection with the execution and delivery of this
Agreement by Seller and the consummation of the transactions contemplated
hereby by Seller, the failure to make or obtain any or all of which,
individually or in the aggregate, would reasonably be expected to have a Material
Adverse Effect with respect to the Seller.

 

20

 

5.4                                 Leases.    (a)  Prior to the Closing Date, Seller has
provided to the Purchaser for Purchaser’s review true, correct and complete
copies of the Branch Leases, together with all amendments, modifications or
supplements thereto, including any assignments thereof.  Seller has a valid and enforceable leasehold
interest under each of the Branch Leases, subject to applicable bankruptcy,
insolvency, reorganization, moratorium and similar laws affecting creditors’
rights and remedies generally and subject, as to enforceability, to general
principles of equity.  Each of the Branch
Leases is in full force and effect, and Seller has not received or given any
notice of any default, event or condition that with notice or lapse of time, or
both, would constitute a material default by Seller under any of the Branch
Leases and, to the knowledge of Seller, no other party is in default thereof,
and no party to any of the Branch Leases has exercised any termination rights
with respect thereto.  The Branch Leases
give Seller the right to occupy the building and land comprising the related
Branch.  There are no subleases relating
to any Branch created or suffered to exist by Seller, or to Seller’s knowledge,
created or suffered to exist by any other Person.

 

(b)                                 Prior
to the Closing Date, Seller has provided to the Purchaser for Purchaser’s
review true, correct and complete copies of the Personal Property Leases,
together with all amendments, modifications or supplements thereto, including
any assignments thereof.  Each Personal
Property Lease is valid and enforceable, subject to applicable bankruptcy,
insolvency, reorganization, moratorium and similar laws affecting creditors’
rights and remedies generally and subject, as to enforceability, to general
principles of equity.  Each of the
Personal Property Leases is in full force and effect, and Seller has not
received or given any notice of any default, event or condition that with notice
or lapse of time, or both, would constitute a material default by Seller under
any of the Personal Property Leases and, to the knowledge of Seller, no other
party is in default thereof, and no party to any of the Personal Property
Leases has exercised any termination rights with respect thereto.

 

5.5                                 Litigation.  There are no Legal Proceedings pending or, to
Seller’s knowledge, threatened against Seller or, to Seller’s knowledge, facts
or circumstances that would reasonably be expected to result in any claims
against Seller that, individually or in the aggregate, would reasonably be
expected to have a Material Adverse Effect with respect to Seller.

 

5.6                                 Regulatory
Matters.  (a) Except as set forth in
Schedule 5.6, there are no pending or, to Seller’s knowledge, threatened
disputes or controversies between Seller regarding the Branches and any
federal, state or local governmental agency or authority that, individually or
in the aggregate, would reasonably be expected to have a Material Adverse
Effect with respect to Seller.

 

(b)                                 Neither
Seller nor any of its Affiliates is aware of any facts or circumstances that
would indicate that any federal or state governmental agency or authority would
oppose or refuse to grant a Regulatory Approval.

 

5.7                                 Compliance
with Laws; Permits.  The banking
business of the Branches has been conducted in compliance with all Legal
Requirements applicable thereto, except for any failures to comply that would
not, individually or in the aggregate, result in a Material Adverse Effect with
respect to Seller.

 

21

 

5.8                                 [Intentionally
Omitted].

 

5.9                                 Records.  The Records respecting the operations of the
Branches and the Assets and Assumed Liabilities accurately reflect in all
material respects, as of their respective dates, the net book value of the
Assets and Assumed Liabilities being transferred to Purchaser hereunder.  The Records include all customary Branch,
customer and customer-related information reasonably necessary to service the Deposits
on an ongoing basis, and to otherwise operate or use the Assets and perform its
obligations under the Assumed Liabilities in substantially the manner currently
operated and performed by Seller.

 

5.10                           Title
to Assets.  Subject to the terms and
conditions of this Agreement, on the Closing Date, Purchaser will acquire good
and marketable title to all of the Assets, free and clear of any Encumbrances,
except Permitted Real Estate Exceptions.

 

5.11                           Deposits.  All of the Deposit accounts have been administered
and originated in compliance in all material respects with the documents
governing the relevant type of Deposit account and all applicable Legal
Requirements and Government Authorizations. 
The Deposit accounts are insured by the FDIC through the Deposit
Insurance Fund to the fullest extent permitted by law, and all premiums and
assessments required to be paid in connection therewith have been paid when
due.

 

5.12                           Environmental
Laws; Hazardous Substances.  (a) Except
as would not, individually or in the aggregate, have a Material Adverse Effect
with respect to Seller, each parcel of Real Property:

 

(i)                                     is
and has been operated by Seller in compliance with all applicable Environmental
Laws;

 

(ii)                                  is
not currently subject to any Order arising under any Environmental Law;

 

(iii)                               to
Seller’s knowledge, has not been used for the disposal of Hazardous Substances
and is not contaminated with any Hazardous Substances requiring remediation or
response under any applicable Environmental Law; and

 

(iv)                              to
Seller’s knowledge, has not had any releases, emissions, or discharges of
Hazardous Substances except as permitted under applicable Environmental Laws.

 

(b)                                 Seller
has not received any written notice from any governmental authority or other
Person alleging the material violation of, or material liability under, any
applicable Environmental Laws.

 

(c)                                  Seller
has made available to Purchaser correct and complete copies of all existing
Phase I, Phase II and other environmental assessments, reviews, audits and
similar reports and all material written information pertaining to actual or
potential liabilities arising under Environmental Laws at the Branches.

 

22

 

5.13                           Brokers’
Fees.  Seller has not employed any
broker or finder or incurred any liability for any brokerage fees, commission
or finders’ fees in connection with the transactions contemplated by this
Agreement, except for fees and commissions for which Seller shall be solely
liable.

 

5.14                           Owned
Real Property.  (a) Seller will
convey to Purchaser good and marketable title to the Owned Real Property, free
and clear of all Encumbrances, except Permitted Real Estate Exceptions.

 

(b)                                 Seller
has not received any written notice of a current violation, citations,
summonses, subpoenas, compliance orders, directives, suits, other legal
process, or other written notice of potential liability under any applicable
Legal Requirement relating to the Owned Real Property.

 

(c)                                  Seller
has not received any written notice of any actual or pending condemnation
proceeding relating to the Branches.

 

(d)                                 Seller
has not entered into any agreement regarding the Owned Real Property, and the
Owned Real Property is not subject to any Legal Proceeding, pending or
outstanding, or to Seller’s knowledge, threatened, which would be binding upon
Purchaser or its successors or assigns or affect or limit Purchaser’s or its
successors’ or assigns’ use and enjoyment of the Owned Real Property or which
would limit or restrict Purchaser’s right or ability to enter into this
Agreement and consummate the sale and purchase contemplated hereby, in each
case, which is not covered by title insurance related to the Owned Real
Property.

 

(e)                                  Seller
has delivered to Purchaser true and complete copies of all deeds, existing
title insurance policies and surveys of or pertaining to the Owned Real
Property.

 

5.15                           Limitations
on Representations and Warranties. 
Notwithstanding anything to the contrary contained herein, Seller makes
no representations or warranties to Purchaser in this Agreement or in any
agreement, instrument or other document executed in connection with any of the
transactions contemplated hereby or provided or prepared pursuant hereto or in
connection with any of the transactions contemplated hereby:

 

(a)                                  As
to the physical condition of the Branches or Personal Property, all of which
are being sold “AS IS”, “WHERE IS” and with all faults at the Closing Date; or

 

(b)                                 As
to whether, or the length of time during which, any accounts will be maintained
by the depositors at the Branches after the Closing Date.

 

ARTICLE 6

REPRESENTATIONS AND WARRANTIES OF PURCHASER

 

Purchaser represents and warrants to Seller as follows:

 

6.1                                 Corporate
Organization and Authority. 
Purchaser is a California banking corporation, duly organized and
validly existing under the laws of California and has the requisite power and
authority to conduct its business as currently conducted and as contemplated 

 

23

 

to be conducted at the Branches.  Purchaser has the requisite corporate power
and authority and has taken all corporate action necessary in order to execute
and deliver this Agreement and to consummate the transactions contemplated
hereby.  This Agreement has been duly and
validly executed and delivered by Purchaser and (assuming due authorization,
execution and delivery by Seller) constitutes the valid and binding obligation
of Purchaser, enforceable against Purchaser in accordance with its terms
(except as may be limited by bankruptcy, insolvency, moratorium, reorganization
or similar laws affecting the rights of creditors generally and except as the
availability of equitable remedies may be limited by general principles of
equity).

 

6.2                                 No
Conflicts.  The execution, delivery
and performance of this Agreement by Purchaser does not, and will not, (i) violate
any provision of its charter or by-laws or (ii) subject to Regulatory
Approvals, violate or constitute a breach of, or default under, any Legal
Requirement, Government Authorization or Order, or (iii) violate or result in a
breach or default under any agreement or instrument of Purchaser, or to which
Purchaser is subject or by which Purchaser is otherwise bound, which violation,
breach, contravention or default referred to in clauses (ii) or (iii),
individually or in the aggregate, would be reasonably expected to have a
Material Adverse Effect with respect to Purchaser.

 

6.3                                 Approvals
and Consents.  Other than Regulatory
Approvals relating to Purchaser set forth in Schedule 6.3, no notices, reports
or other filings are required to be made by Purchaser with, nor any Government
Authorization required to be obtained by Purchaser from, any governmental or
regulatory authorities of the United States or the several States in connection
with the execution and delivery of this Agreement by Purchaser and the
consummation of the transactions contemplated hereby by Purchaser, the failure
to make or obtain any or all of which, individually or in the aggregate, would
be reasonably expected to have a Material Adverse Effect with respect to
Purchaser.

 

6.4                                 Regulatory
Matters.  (a) Except as set forth in
Schedule 6.4, there are no pending or, to Purchaser’s knowledge, threatened
disputes or controversies between Purchaser and any federal, state or local
governmental agency or authority that, individually or in the aggregate, would
be reasonably expected to have a Material Adverse Effect with respect to
Purchaser.

 

(b)                                 Neither
Purchaser nor any of its Affiliates is aware of any facts or circumstances that
would indicate that any federal or state governmental agency or authority would
oppose or refuse to grant a Regulatory Approval.

 

(c)                                  Purchaser
is, and on a pro forma basis giving effect to
the P&A Transaction, will be, (i) at least “well capitalized”, as defined
for purposes of the tests used by the Federal Reserve and FDIC to evaluate the
capital of a state bank, and (ii) in compliance with all capital requirements,
standards and ratios required by each state or federal bank regulator with
jurisdiction over Purchaser, including any such higher requirement, standard or
ratio as shall apply to institutions engaging in the acquisition of insured
institution deposits, assets or branches, and no such regulator is likely to,
or has indicated that it may, condition any of the Regulatory Approvals upon an
increase in Purchaser’s capital or compliance with any capital requirement,
standard or ratio.

 

24

 

(d)           Purchaser has no reason
to believe that it will be required to divest deposit liabilities, branches,
loans or any business or line of business as a condition to the receipt of any
of the Regulatory Approvals.

 

(e)           Purchaser and each of
the subsidiaries or Affiliates of Purchaser that is an insured depository
institution was rated “Satisfactory” or “Outstanding” following its most recent
Community Reinvestment Act examination by the regulatory agency responsible for
its supervision.  Purchaser has received
no notice of and has no knowledge of any planned or threatened objection by any
community group to the transactions contemplated hereby.

 

6.5           Litigation.  There are no Legal Proceedings that have a
reasonable likelihood of an adverse determination pending or, to Purchaser’s
knowledge, threatened against Purchaser or, to Purchaser’s knowledge, facts or
circumstances that could reasonably be expected to result in any claims against
Purchaser that, individually or in the aggregate, would have a Material Adverse
Effect with respect to Purchaser.

 

6.6           Operation of the
Branches.  Purchaser intends to
continue to provide retail and business banking services in the geographical
area served by the Branches.

 

6.7           Financing Available.  Purchaser has and will have as of the Closing
Date available sufficient cash to fund the P&A Transaction.  Purchaser’s ability to consummate the
transactions contemplated by this Agreement is not contingent on raising any
equity capital, obtaining financing therefor, consent of any lender or any
other matter relating to funding the P&A Transaction.

 

6.8           Brokers’ Fees.  Purchaser has not employed any broker or
finder or incurred any liability for any brokerage fees, commission or finders’
fees in connection with the transactions contemplated by this Agreement, except
for fees and commissions for which Purchaser shall be solely liable.

 

ARTICLE 7

COVENANTS OF THE PARTIES

 

7.1           Activity in the
Ordinary Course.  (a) Until the
Closing Date, except (i) as may be required by a Regulatory Authority or
Legal Requirement, (ii) as set forth in Schedule 7.1 of the Seller
Disclosure Schedule or (iii) or as contemplated hereby, Seller (a) 
shall conduct the business of the Branches in the ordinary and usual course of
business consistent with past practice.

 

(b)           Prior to Closing,
Seller shall:

 

(i)            use its commercially
reasonable efforts to (A) preserve its present banking business operations
at the Branches, and goodwill of Seller as they relate to the Assets and
Deposits and (B) maintain its present relationships with Persons having
business dealings with Seller (including, without limitation, customers,
suppliers, employees, landlords) with respect to the banking business at the
Branches or the Assets;

 

25

 

(ii)           maintain (A) all
of the Owned Real Property and Personal Property in their current condition,
ordinary wear and tear excepted and (B) insurance upon all of the assets
and properties of Seller that relate to the conduct of the banking business at
the Branches or the Assets and Deposits in such amounts and of such kinds
comparable to that in effect on the date of this Agreement;

 

(iii)          (A) maintain the
Records in the ordinary course of business, and (B) comply in all material
respects with all contractual and other obligations applicable to the Assets
and Assumed Liabilities;

 

(iv)          comply in all material
respects with all Legal Requirements that relate to the conduct of the banking
business at the Branches or the Assets;

 

(v)           not take any action which
would adversely affect the ability of the parties to consummate the
transactions contemplated by this Agreement.

 

(c)           Prior to the Closing
Date, Seller shall not, without the prior written consent of Purchaser, which
consent shall not be unreasonably withheld, conditioned or delayed (and which
shall be deemed to be waived if Purchaser has made no response by the end of
the second complete Business Day following the receipt, as evidenced by
confirmed facsimile, of the request by the representative designated in writing
by Purchaser):

 

(i)            transfer or hire any
new employee for a Branch;

 

(ii)           increase or agree to
increase the salary of any Branch Employee other than in accordance with Seller’s
existing customary policies generally applicable to employees having similar
rank or duties, or pay or agree to pay any uncommitted bonus to any Branch
Employee other than regular bonuses in the ordinary course of business (which
bonuses, in any event, shall be the responsibility of Seller), or, other than
in the ordinary course of business, consistent with past practice, transfer any
Branch Employee to another branch or office of Seller or any of its Affiliates;

 

(iii)          offer interest rates or
terms on any category of deposits at a Branch except as determined in a manner
materially consistent with Seller’s ordinary course of business, consistent
with past practice with respect to its branches which are not being sold;

 

(iv)          transfer to or from any
Branch to or from any of Seller’s other operations or branches any material
Assets or any Deposits, except (A) in the ordinary course of business or
as contemplated by this Agreement, (B) upon the unsolicited request of a
depositor or customer, or (C) if such Deposit is pledged as security for a
loan or other obligation (including, but not limited to, any Deposits related
to a Deposit-Related Loan or Overdraft Loan);

 

(v)           sell, transfer, assign,
encumber or otherwise dispose of or enter into any contract, agreement or
understanding to sell, transfer, assign, encumber or dispose of any of the
Assets existing on the date hereof, except in the ordinary course of business
consistent with past practice;

 

26

 

(vi)          make or agree to make
any material improvements to the Owned Real Property, except with respect to
commitments for such improvements made on or before the date of this Agreement
and normal maintenance or refurbishing purchased or made in the ordinary course
of business;

 

(vii)         file any application or
give any notice to relocate or close any Branch or relocate or close any
Branch;

 

(viii)        amend, terminate or extend
in any material respect any Branch Lease; provided, however,
Seller may extend any Branch Lease if, in its reasonable business judgment,
Seller determines such extension is necessary to deliver the Branch on the
Closing Date as a fully operative branch banking operation; or

 

(ix)           agree with, or commit
to, any Person to do any of the things described in clauses (i) through (viii) except
as contemplated hereby.

 

7.2           Access and
Confidentiality.  (a) Until the
Closing Date, Seller shall afford to Purchaser and its officers and authorized
agents and representatives reasonable access to the premises of each of the
Branches (and permit physical inspections thereof, including improvements and
personal property), Records, Branch Leases, Personal Property Leases, Safe
Deposit Agreements and other information of or relating to the Assets and
Assumed Liabilities.  Purchaser and
Seller each will identify to the other, within ten (10) calendar days
after the date hereof, a selected group of their respective salaried personnel
that shall constitute a “transition group” and will be available to Seller and
Purchaser, respectively, at reasonable times (limited to normal operating
hours) to provide information and assistance in connection with Purchaser’s
investigation of matters relating to the Assets and Liabilities.  Such transition group will also work
cooperatively to identify and resolve issues arising from any commingling of
Seller’s records with respect to the Branches with Seller’s records for its
other branches and operations not subject to this Agreement.  Seller shall furnish Purchaser with such
additional financial and operating data and other information about Seller’s
business operations at the Branches as the Seller determines may be reasonably
necessary for the orderly transfer of the business operations of the Branches,
the Assets and the Assumed Liabilities. 
Any investigation pursuant to this Section 7.2 shall be conducted
in such manner as not to interfere unreasonably with the conduct of Seller’s
businesses.  Notwithstanding the
foregoing, Seller shall not be required to provide access to or disclose
information where such access or disclosure would impose an unreasonable burden
on Seller or its Affiliates, or any employee of Seller or its Affiliates, would
violate or prejudice the rights of customers, jeopardize any attorney-client
privilege or contravene any Legal Requirement, Order, Governmental
Authorization or binding agreement entered into prior to the date of this
Agreement.  The parties hereto shall use
reasonable best efforts to make appropriate substitute disclosure arrangements
under circumstances in which the restrictions of the preceding sentence apply.

 

(b)           From the date hereof
and after the Closing Date, each party to this Agreement shall hold, and shall
cause its respective directors, officers, employees, agents, consultants and
advisors to hold, in strict confidence, except to the extent necessary to
discharge obligations pursuant to Section 7.3 or unless compelled to
disclose by judicial or administrative process or, in the opinion of its
counsel, by other requirements of law or the applicable 

 

27

 

requirements of any regulatory agency or relevant
stock exchange, all non-public records, books, contracts, instruments, computer
data and other data and information (collectively, “Information”)
concerning the other party (or, if required under a contract with a third party,
such third party) furnished it by such other party or its representatives
pursuant to this Agreement (except to the extent that such information was
publicly available prior to the date of this Agreement or hereafter becomes
publicly available without any violation of this Agreement, was available to
the party receiving the information on a non-confidential basis prior to its
disclosure by the other party hereto or becomes available from a Person (other
than the party providing such information in connection herewith) who is not,
to the knowledge of the party receiving the information, subject to any legally
binding obligation to keep such information confidential), and neither party
shall release or disclose such Information to any other Person, except its
auditors, attorneys, financial advisors, bankers, other consultants and
advisors and, to the extent permitted above, to bank regulatory authorities; provided, however, upon consummation of the P&A
Transaction, this Section 7.2(b) shall terminate as to any
Information provided by Seller to Purchaser solely to the extent such
Information relates exclusively to the Assets and the Liabilities.

 

7.3           Regulatory Approvals.  As soon as practicable and in no event later
than fifteen (15) calendar days after the date of this Agreement, Purchaser
shall prepare and file any applications, notices and filing required in order
to obtain the Regulatory Approvals. 
Purchaser shall use reasonable best efforts to obtain each such approval
as promptly as reasonably practicable and, to the extent best possible, in
order to permit the Closing to occur not later than August 7, 2009.  Seller will use reasonable best efforts to
cooperate in connection therewith (including the furnishing of any information
and any reasonable undertaking or reasonable commitments which may be required
to obtain the Regulatory Approvals). 
Each party will provide the other with copies of any applications and
all correspondence relating thereto prior to filing, other than material filed
in connection therewith under a claim of confidentiality, and each party will
notify the other of any significant development with respect to any
application, notice or filing made pursuant to this Agreement.  If any Regulatory Authority shall require the
modification of any of the terms and provisions of this Agreement as a
condition to granting any Regulatory Approval, the parties hereto will
negotiate in good faith to seek a mutually agreeable adjustment to the terms of
the transaction contemplated hereby, such agreement not to be unreasonably
withheld, conditioned or delayed.

 

7.4           Consents.  Seller agrees to use reasonable best efforts
to obtain (such efforts not to include making payments to third parties) from
lessors and any other parties to any Branch Leases any required consents to the
assignment of the Branch Leases to Purchaser on the Closing Date; provided, however, Seller
shall not be obligated to incur any monetary obligations or expenditures to the
parties whose consent is requested in connection with the use of its reasonable
best efforts to obtain any such required consents unless such monetary
obligations are required by the terms of the applicable Branch Lease; provided, further, that
Purchaser shall use all commercially reasonable efforts to assist Seller with
obtaining such consents including, by providing financial information or such
other commercially reasonable request made by the lessor, to effect the
transfer of the applicable Branch Lease as contemplated hereby.  Subject to Section 9.1(d), if any such
required consent cannot be obtained, notwithstanding any other provision
hereof, and subject to any required Regulatory Approvals, the Assets and
Assumed Liabilities associated with the subject Branch, other than any such
Branch Lease as to which 

 

28

 

consent cannot be obtained, shall nevertheless be
transferred to Purchaser at the Closing and the parties shall negotiate in good
faith and Seller shall use reasonable best efforts (such efforts not to include
making payments to third parties) to make alternative arrangements reasonably
satisfactory to Purchaser and Seller.

 

7.5           Efforts to
Consummate; Further Assurances.  (a) Purchaser
and Seller agree to use reasonable best efforts to satisfy or cause to be
satisfied as soon as practicable their respective obligations hereunder and the
conditions precedent to the Closing set forth in Article 9 of this
Agreement.

 

(b)           From time to time
following the Closing, at Purchaser’s request, Seller will duly execute and
deliver such assignments, bills of sale, deeds, acknowledgments and other
instruments of conveyance and transfer as shall be reasonably necessary or
appropriate to vest in Purchaser the full legal and equitable title to the
Assets.  From time to time following the
Closing, at Seller’s request, Purchaser will duly execute and deliver such
documents and other instruments as shall be reasonably necessary or appropriate
to relieve and discharge Seller from its obligations with respect to the
Assumed Liabilities.

 

(c)           Subject to Section 4.3,
on and after the Closing Date, each party will promptly deliver to the other
all mail and other communications properly addressable or deliverable to the
other as a consequence of the P&A Transaction; and without limitation of
the foregoing, on and after the Closing Date, Seller shall promptly forward any
mail, communications or other material relating to the Branches, Deposits or
the Assets transferred on the Closing Date, including, but not limited to, that
portion of any IRS “B” tapes that relates to such Deposits, to such employees
of Purchaser at such addresses as may from time to time be specified by
Purchaser in writing.

 

(d)           The costs incurred by a
party in performing its obligations to the other under Sections 7.5(a) and
(c) shall be borne by the initial recipient.

 

7.6           Solicitation of
Accounts.  (a) For a period of
two (2) years following the Closing Date, Seller will not solicit deposits
of the type sold to Purchaser pursuant to the P&A Transaction (but may
solicit and provide other financial services, including mutual fund purchases,
investment advisory services, securities and brokerage services, custodial and
trust services, capital markets services, or insurance products or other
business) from or to Persons or entities who were depositors at the Branches on
the Closing Date by personal contact, by telephone, by facsimile, by mail or
other similar solicitation, or in any other way except for general
solicitations, advertisements, marketing campaigns and other solicitations that
are not directed specially to Persons or entities who were depositors of the
Branches on the Closing Date; provided, however, Seller and its Affiliates may solicit such
customers who as of the Closing Date have existing accounts, loans or other
relationships originating at branches or other offices of Seller or its
Affiliates other than the Branches; and provided, further,
that Seller and its Affiliates may solicit major or statewide customers (such
as, for example, a company with more than one location or the state government
or any agency or instrumentality thereof) without restriction hereunder.  Notwithstanding the foregoing sentence,
Seller and its Affiliates shall be permitted to (i) respond to unsolicited
inquiries by such Branch customers with respect to 

 

29

 

banking or other financial services and (ii) provide
notices or communications relating to the transactions contemplated hereby in
accordance with the provisions hereof.

 

(b)           Prior to the Closing
Date, Purchaser agrees that it will not attempt to solicit Branch customers
through advertising or transact its business in a way which would induce such
Branch customers to close any account and open accounts directly with Purchaser
or would otherwise result in a transfer of all or a portion of an existing
account from Seller to Purchaser or its Affiliates.  Notwithstanding the foregoing sentence,
Purchaser and its Affiliates shall be permitted to (i) engage in
advertising, solicitations or marketing campaigns not directed to or targeted
at such Branch customers, (ii) engage in lending, deposit, safe deposit,
trust or other financial services relationships existing as of the date hereof
with such Branch customers at or through branch offices of Purchaser, (iii) respond
to unsolicited inquiries by such Branch customers with respect to banking or
other financial services and (iv) provide notices or communications
relating to the transactions contemplated hereby in accordance with the
provisions hereof.

 

7.7           Solicitation of
Employees.  Without the Purchaser’s
prior written consent, for a period of two (2) years from the Closing
Date, neither Seller nor its Affiliates will directly or indirectly solicit for
employment, attempt to employ, employ or otherwise encourage to terminate his
or her employment, any Transferred Employee. 
Notwithstanding the foregoing, it is understood and agreed (x) that
the use of general newspaper advertisements, advertisements in publications and
other general circulation materials not directly targeted at such employees and
any hiring as a result thereof, or (y) the solicitation or hiring of any
Transferred Employee terminated by Purchaser after the Closing Date, in each
case, shall not be deemed a violation of the foregoing provision.

 

7.8           Insurance.  Seller will use reasonable best efforts to
maintain in effect until the Closing Date all casualty and public liability
policies relating to the Branches and maintained by Seller on the date hereof
or to procure comparable replacement coverage and maintain such policies or
replacement coverage in effect until the Closing Date.  Purchaser shall provide all casualty and
public liability insurance for the Branches after the Closing Date.  In the event of any material damage, destruction
or condemnation affecting Real Property between the date hereof and the time of
the Closing, Purchaser shall have the right to exclude any Real Property so
affected from the Assets to be acquired, require Seller to take reasonable
steps to repair or replace the damaged or destroyed property, or require Seller
to deliver to Purchaser any insurance proceeds and other payments, to the
extent of the fair market value or the replacement cost of the Real Property,
received by Seller as a result thereof unless, in the case of damage or
destruction, Seller has repaired or replaced the damaged or destroyed property.

 

7.9           Change of Name, Etc.  Immediately after the Closing, Purchaser will
(a) change the name and logo on all documents and facilities relating to
the Assets and the Assumed Liabilities to Purchaser’s name and logo, (b) notify
all Persons whose Deposits or Safe Deposit Agreements are transferred under
this Agreement of the consummation of the transactions contemplated by this
Agreement, and (c) provide all appropriate notices to the OCC and any
other regulatory authorities required as a result of the consummation of such
transactions.  Seller shall cooperate
with any commercially reasonable request of Purchaser directed to accomplish
the removal of Seller’s signage by Purchaser and the installation of Purchaser’s
signage by 

 

30

 

Purchaser; provided, however,
that (i) all such removals and all such installations shall be at the
expense of Purchaser, (ii) such removals and installations shall be
performed in such a manner that does not unreasonably interfere with the normal
business activities and operations of the Branches, (iii) such installed
signage shall comply with the applicable Branch Lease and all applicable zoning
and permitting laws and regulations, and (iv) such installed signage shall
have, if necessary, received the prior approval of the owner or landlord of the
facility, and such installed signage shall be covered in such a way as to make
the Purchaser signage unreadable at all times prior to the Closing, but such
cover shall display the name and/or logo of Seller (or of its Affiliates) in a
manner reasonably acceptable to Seller. 
Purchaser agrees not to use any forms or other documents bearing Seller
or any of its Affiliates’ name or logo after the Closing without the prior
written consent of Seller, and, if such consent is given, Purchaser agrees that
all such forms or other documents to which such consent relates will be stamped
or otherwise marked in such a way that identifies Purchaser as the party using
the form or other document.  As soon as
practicable and, in any event, not more than three (3) Business Days after
the Closing Date, Purchaser will mail new checks reflecting its transit and
routing number to customers of the Branches with check writing privileges.  Purchaser shall use its reasonable best
efforts to cause these customers to begin using such checks and cease using
checks bearing Seller’s name.

 

7.10         Transfer of Assets
Following the Closing.  In the event
that, at any time on or after the Closing, Seller or the Purchaser shall
receive or otherwise possess any asset that is allocated to the other party
pursuant to this Agreement, such party shall promptly transfer, or cause to be
transferred, such asset to the party so entitled thereto or to have been
responsible therefor (the “Transferee”), and such Transferee shall
accept or assume, or cause to be accepted or assumed, such asset.  Prior to such transfer, the Transferor shall
hold such asset in trust for the benefit of the Transferee and shall perform
all obligations of the Transferee under such agreement following the Closing; provided, that the Transferee shall reimburse the Transferor
for any out of pocket expenses incurred in perform any such obligations.

 

7.11         Title Insurance.  No later than forty-five (45) calendar days
after the date of this Agreement, Purchaser shall furnish to Seller (at Seller’s
expense), for each parcel of the Owned Real Property (a) a title commitment
issued by First American, naming Purchaser as the proposed insured and having
an effective date after the date hereof, wherein First American shall agree to
issue an ALTA form of owner’s insurance policy of title insurance (a “Title
Commitment”), and (b) an ALTA survey by a licensed land surveyor
selected by Purchaser which survey shall reflect exceptions to the Title
Commitment (the “Survey”).  Each
Title Commitment shall include First American’s requirements to issue a title
policy with respect to such parcel of Owned Real Property, which requirements
shall be satisfied by Seller on or before the Closing Date.  If any of the following shall occur
(collectively, a “Title Objection”): (i) any Title Commitment or
other evidence of title or search of the appropriate real estate records
discloses that any party other than Seller or one of its Affiliates has title
to the insured estate covered by the Title Commitment; (ii) any title
exception (other than a Permitted Real Estate Exception) is disclosed in Schedule
B to any Title Commitment that Seller has not committed to remove from the
Title Commitment on or prior to the Closing; or (iii) the Survey discloses
any matter (other than a Permitted Real Estate Exception) that affect Purchaser’s
use of the Owned Real Property, then, in each case, Seller shall use
commercially reasonable efforts to cure each such Title Objection and take all
commercially reasonable steps required by First American to eliminate each such
Title Objection as an exception to the applicable Title Commitment.  Any 

 

31

 

Title Objection that First American is willing to
insure over on terms acceptable to Purchaser is herein referred to as an “Insured
Exception.”  The Insured Exceptions,
if any, together with any title exceptions or matters disclosed by the Survey
not objected to by Purchaser in writing shall be deemed to be acceptable to
Purchaser and Seller shall have no further Liability with respect thereto.

 

ARTICLE 8

TAXES; FDIC ASSESSMENTS AND EMPLOYEE MATTERS

 

8.1           Tax Representations.  Seller represents and warrants to Purchaser
that with respect to the Deposits, Seller is in compliance in all material
respects with the Code and regulations thereunder relative to obtaining from
depositors of the Deposits executed IRS Forms W 8 and W 9.

 

8.2           Proration of Taxes.  Except as otherwise agreed to by the parties,
whenever it is necessary to determine the liability for property Taxes for a
portion of a taxable year or period that begins before and ends after the
Closing Date, the determination of the property Taxes for the portion of the
year or period ending on, and the portion of the year or period beginning after
the Closing Date shall be determined by assuming that the taxable year or
period ended at 11:59 p.m. Eastern Standard Time on the Closing Date.

 

8.3           Sales and Transfer
Taxes.  Except for the documentary
transfer taxes referred to in Section 3.7, all excise, sales, use and
transfer taxes that are payable or that arise as a result of the consummation
of the P&A Transaction shall be paid by Purchaser and Purchaser shall
indemnify and hold Seller harmless from and against any such taxes.

 

8.4           Information Returns.  At the Closing or as soon thereafter as is
practicable, Seller shall provide Purchaser with a list of all Deposits for
which Seller has not received a properly completed Form W 8 or W 9 (or a
substitute form meeting applicable requirements) or on which Seller is back-up
withholding as of the Closing Date.

 

8.5           Like Kind Exchange.  Purchaser acknowledges that Seller may desire
to complete one or more like kind exchanges (including transactions which are
intended to qualify under Section 1031 of the Code).  If requested by Seller, Purchaser shall
cooperate to the extent reasonably necessary in order to accomplish such like
kind exchanges and shall execute all documents and provide all consents
reasonably necessary to complete such like kind exchanges including an
amendment to or an assignment of this Agreement; provided,
however, that (a) Purchaser’s obligations under this Agreement
shall not be increased, (b) Seller’s representations, warranties,
covenants and obligations under this Agreement shall continue in full  force and effect and (c) the total Purchase Price will
not change as a result of this assignment.

 

8.6           FDIC Special
Assessment.  Any special assessment
assessed by the FDIC on the Deposits included in a quarterly Call Report filed
by Seller prior to the Closing Date shall be paid by Seller.  Seller shall have no obligation with respect
to any special assessment assessed on the Deposits included in any quarterly
Call Report filed by Purchaser after the Closing Date, regardless of when
announced.

 

32

 

8.7           Transferred
Employees.  (a) On or prior to
the date hereof, Seller has delivered to Purchaser Schedule 1.1(a), which
schedule is true and correct and contains the information set forth in the
definition of “Branch Employees.” Purchaser or its Affiliates shall extend
offers of employment effective as of the Closing Date, and otherwise on terms
Purchaser or its Affiliates shall determine in their discretion, to
substantially all Branch Employees set forth on Schedule 1.1(a) (collectively,
the “Prospective Transferred Employees”).  Offers of employment by Purchaser are subject
to routine employment screening and all other measures determined in Purchaser’s
discretion and as generally applicable to Purchaser’s new hires, and otherwise
in accordance with all Legal Requirements. 
At least ten (10) Business Days prior to the Closing Date Purchaser
shall deliver, in writing, the offers of employment to the Branch Employees who
are receiving offers in accordance with the preceding sentence.  Seller agrees that prior to the Closing Date,
neither it nor any of its Affiliates will solicit or cause to be solicited any
Prospective Transferred Employee to induce such Prospective Transferred
Employee to continue in the employment of Seller or an Affiliate of Seller
after the Closing Date.  Seller agrees to
cooperate in assisting and supporting Purchaser’s hiring of the Prospective
Transferred Employees.

 

(b)           All communication
between Purchaser and the Branch Employees shall be made at such times and in
such manner as Seller and Purchaser mutually agree, provided,
that (i) at least forty-five (45) days before the Closing
Date Purchaser shall be given the opportunity to interview and communicate
its terms of employment to Branch Employees and (ii) after the delivery of
the offers of employment contemplated in Section 8.7(a), Purchaser shall
be given the opportunity to train Prospective Transferred Employees for
purposes of converting to Purchaser’s computer systems.

 

(c)           Purchaser will conduct
the interviews of the Branch Employees as expeditiously as possible prior to
the Closing Date. Access to the Branch Employees will be provided by Seller
upon reasonable prior notice during normal business hours.

 

(d)           Prospective Transferred
Employees who accept an offer of employment with Purchaser or one of its
Affiliates shall be referred to as “Transferred Employees.”  Each Branch Employee who either (i) is
not made an offer of employment by Purchaser or its Affiliates, or (ii) who
rejects an offer of employment made by Purchaser or its Affiliates shall be
referred to as a “Non-Transferred Employee” for purposes of this
Agreement.  The Transferred Employees
(regardless of whether they are active employees or on leave of absence status
as of the Closing Date) will be terminated by Seller and will be hired by Purchaser
or its Affilates as of the Closing Date, and this date shall be referred to as
the Transferred Employee’s “Transfer Date.”

 

(e)           Each Prospective
Transferred Employee shall be offered employment with Purchaser (i) at a
salary or wage rate at least equivalent to the rate of base salary or wage rate
paid by Seller to such Prospective Transferred Employee as listed on Schedule
1.1(a); and (ii) at a location no more than twenty (20) miles from the
Prospective Transferred Employee’s principal work location immediately prior to
the Transfer Date.

 

(f)            Subject to the
eligibility requirements and other terms of Purchaser’s Employee Benefit Plans,
Purchaser shall provide Transferred Employees (both active employees 

 

33

 

and employees on leave of absence status) with
benefits under its Employee Benefit Plans as such plans may exist, on and after
the Transferred Employee’s Transfer Date that are no less favorable than those
provided to similarly situated employees of Purchaser.  Purchaser shall provide each Transferred
Employee with credit for such Transferred Employee’s period of service with
Seller and its Affiliates (including any service credited from predecessor or
successor entities to Seller and its Affiliates), based on the “Service Date”
specified for the Transferred Employee on Schedule 1.1(a), towards the
calculation of eligibility and vesting for such purposes as vacation and other
benefits and participation and vesting in Purchaser’s Employee Benefit Plans,
as such plans may exist and insofar as such plans depend upon years of service,
in accordance with the terms of such Employee Benefit Plans and as permitted by
Legal Requirements.

 

(g)           Subject to the
eligibility requirement terms and other terms of Purchaser’s Employee Benefit
Plans, each Transferred Employee shall be eligible to participate in the
medical, dental, or other welfare plans of Purchaser, as such plans may exist,
on and after the Transferred Employee’s Transfer Date, and any pre-existing
conditions provisions of such plans shall be waived with respect to any such
Transferred Employees if such Transferred Employee is a participant in Seller’s
or its Affiliates medical and health plans prior to the Closing Date; provided, however, that if Purchaser’s relevant health or
disability insurance policy or plan has a pre-existing condition limitation and
a Transferred Employee’s condition is being excluded as a pre-existing
condition under Seller’s or its Affiliates’ plan (as applicable to the
Transferred Employee) as of the Transferred Employee’s Transfer Date, Purchaser
may treat such condition as a pre-existing condition for the period such
condition would have been treated as a pre-existing condition under Seller’s or
its Affiliates’ plan (as applicable to the Transferred Employee).

 

(h)           Seller shall be
responsible for any and all obligations regarding severance, termination or
separation payments to the Branch Employees as a result of or in connection
with this transaction; provided, however,
that Purchaser shall, or shall cause its Affiliates to, provide severance pay
to any Transferred Employee who is laid off by Purchaser  or
has been transferred to a location more than twenty (20) miles from his or her
current location and does not accept such transfer or continue to work for
Purchaser at that new location, during the
six-month period following the Transferred Employee’s Transfer Date (each such
Transferred Employee a “Severance-Entitled Transferred Employee), in an
amount equivalent to the amount listed as the “Severance Amount” on Schedule
1.1(a). Except for the specific obligation described in the preceding sentence,
Purchaser shall have no obligation with respect to the payment of any
severance, termination or separation pay to any Branch Employee, and Purchaser
shall have no obligation with respect to Seller’s severance plan or any
obligation to establish its own severance plan.

 

(i)            Seller shall be
responsible for any and all obligations regarding the Non-Transferred
Employees, including, without limitation, (i) any obligation related to a
Non-Transferred Employee who remains on leave of absence status with Seller
after rejecting an offer of employment from Purchaser or its Affiliates, or (ii) any
severance payment that may be due to a Non-Transferred Employee, either before
or after the Closing.  For the avoidance
of doubt, Purchaser shall have no responsibility or obligation with respect to
any Non-Transferred Employee.

 

34

 

(j)            It is understood and
agreed that (i) Purchaser’s expressed intention to extend offers of
employment as set forth in this Section shall not constitute any
commitment, contract or understanding (expressed or implied) of any obligation
on the part of Purchaser to a post-closing employment relationship of any fixed
term or duration or upon any terms or conditions other than those that
Purchaser may establish pursuant to individual offers of employment, and (ii) employment
offered by Purchaser is “at will” and may be terminated by Purchaser or by an
employee at any time for any reason, with or without cause or advance notice.
Nothing in this Agreement shall be deemed to prevent or restrict in any way the
right of Purchaser to terminate, reassign, promote or demote any of the
Transferred Employees after the Closing or to change adversely or favorably the
title, powers, duties, responsibilities, functions, locations, salaries, other
compensation or terms or conditions of employment of such employees.

 

(k)           Except as expressly
provided in this Agreement, Seller shall pay, discharge, and be responsible
for, and shall indemnify Purchaser and its Affiliates for (i) all salary,
wages (including, without limitation, payment for any and all accrued paid time
off, vacation, sick time or personal days accrued by the Transferred Employees
as of the Transfer Date, which Seller agrees to pay to the Transferred
Employees pursuant to Seller’s Employee Benefit Plans and as required by any
applicable Legal Requirement), bonuses, commissions and any other form of
compensation (including, without limitation, any deferred compensation) arising
out of the employment of the Branch Employees prior to the Transfer Date, and (ii) any
employee benefits under the Seller’s Employee Benefit Plans arising out of the
employment of the Transferred Employees prior to the Transfer Date, including
welfare benefits with respect to claims incurred prior to the Transfer Date but
reported after the Transfer Date.  From
and after the Transfer Date, Purchaser shall pay, discharge, and be responsible
for, and shall indemnify Seller and its Affiliates for, all salary, wages, and
benefits arising out of or relating to the employment of the Transferred
Employees by Purchaser or its Affiliates from and after the Transfer Date,
including all claims for welfare benefits incurred on or after the Transfer
Date.  With respect to welfare benefits,
claims are considered incurred in accordance with the Legal Requirements
regarding claims for those welfare benefits.

 

(l)            Nothing in this Agreement
shall be construed to grant any employee of Seller or any Transferred Employee
a right to receive any payments or benefits from  Seller’s
(or Parent’s) or Purchaser’s Employee Benefit Plans.  This Agreement shall not limit Seller’s,
Purchaser’s or their respective Affiliates’ ability or right to amend or
terminate any benefit or compensation plan or program maintained or sponsored
by any such entity, and nothing contained herein shall be construed as an
amendment to, or modification of, any such plan or program.  Further, nothing in this Section 8.7 is
intended to confer upon any Person (including, for the avoidance of doubt, any
Transferred Employee) any right as a third-party beneficiary of this Agreement.

 

(m)          Purchaser shall not have
any responsibility or Liability, whether to Transferred Employees,
Non-Transferred Employees, former employees, their beneficiaries or to any
other Person, with respect to any Employee Benefit Plan, employee practices,
programs or arrangements (including the establishment, operation or termination
thereof and the notification and provision of COBRA coverage extension)
maintained by Seller or its Affiliates.

 

35

 

ARTICLE 9

CONDITIONS TO CLOSING

 

9.1           Conditions to
Obligations of Purchaser.  Unless
waived in writing by Purchaser, the obligation of Purchaser to consummate the
P&A Transaction is conditioned upon satisfaction of each of the following
conditions:

 

(a)           Regulatory Approvals.  The Regulatory Approvals shall have been made
or obtained and shall remain in full force and effect, and all waiting periods
thereunder applicable to the consummation of the P&A Transaction shall have
expired or been terminated, and no such Regulatory Approval shall have resulted
in the imposition of a Materially Burdensome Regulatory Condition.  A “Materially Burdensome Regulatory
Condition” shall mean any condition or restriction set forth in a
Regulatory Approval which would reasonably be expected to materially and adversely
affect Purchaser.

 

(b)           Orders.  No court or governmental authority of
competent jurisdiction shall have enacted, issued, promulgated, enforced or
entered any Legal Requirement or Order (whether temporary, preliminary or
permanent) which is in effect and which prohibits or makes illegal the
consummation of the P&A Transaction.

 

(c)           Representations and
Warranties; Covenants.  The
representations and warranties of Seller contained in this Agreement shall be
true in all respects as of the Closing Date (except that representations and
warranties as of a specific date need only be true as of such date); provided, however, that for purposes of determining the
satisfaction of the condition set forth in this Section 9.1(c), such
representations and warranties shall be deemed to be so true and correct if the
failure or failures of such representations and warranties to be true and
correct (such representations and warranties to be read for this purpose
without reference to any qualification set forth therein relating to “materiality”
or “Material Adverse Effect”) do not constitute, individually or in the
aggregate, a Material Adverse Effect with respect to Seller.  Purchaser shall have received at Closing a
certificate to that effect dated as of such Closing Date and executed by an
authorized officer of Seller.  Each of
the covenants and agreements of Seller to be performed on or prior to the
Closing Date shall have been performed in all material respects.  Purchaser shall have received at Closing a
certificate to that effect dated as of such Closing Date and executed by an
authorized officer of Seller.

 

(d)           Consents.  Seller shall have obtained any and all
consents or waivers from the landlord or lessors under the applicable Branch
Leases as contemplated by Section 7.4.

 

(e)           Phase I
Environmental Assessment Reports; Title Objections.

 

(i)            Purchaser shall have
obtained a Phase I Environmental Site Assessment report (at Purchaser’s
expense) prepared after the date hereof that does not disclose any matter
(other than information made available to Purchaser by Seller prior to the date
of this Agreement) that Purchaser believes in its sole and absolute discretion
could, individually, or in the aggregate, materially and adversely affect
Purchaser’s use and enjoyment of the Owned Real Property or have a Material
Adverse Effect on Purchaser.

 

36

 

(ii)           All Title Objections
shall have been cured, waived by Purchaser or become an Insured Exception, in
each case, as contemplated by Section 7.11.

 

(f)            Closing Deliveries.  Seller shall have delivered, or caused to be
delivered to Purchaser all the items listed in Section 3.5.

 

9.2           Conditions to
Obligations of Seller.  Unless waived
in writing by Seller, the obligation of Seller to consummate the P&A
Transaction is conditioned upon satisfaction of each of the following
conditions:

 

(a)           Regulatory Approvals.  The Regulatory Approvals shall have been made
or obtained and shall remain in full force and effect, and all waiting periods
applicable to the consummation of the P&A Transaction shall have expired or
been terminated.

 

(b)           Orders.  No court or governmental authority of
competent jurisdiction shall have enacted, issued, promulgated, enforced, or
entered any Legal Requirement or Order (whether temporary, preliminary or
permanent) which is in effect and which prohibits or makes illegal the
consummation of the P&A Transaction.

 

(c)           Representations and
Warranties; Covenants.  The
representations and warranties of Purchaser contained in this Agreement shall
be true in all respects as of the Closing Date (except that representations and
warranties as of a specific date need to be true only as of such date); provided, however, that for purposes of determining the
satisfaction of the condition set forth in this Section 9.2(c), such
representations and warranties (except for Section 6.7, which shall be
true and correct as of the Closing as written) shall be deemed to be so true
and correct if the failure or failures of such representations and warranties
to be true and correct (such representations and warranties to be read for this
purpose without reference to any qualification set forth therein relating to “materiality”
or “Material Adverse Effect”) do not constitute, individually or in the aggregate,
a Material Adverse Effect with respect to Purchaser.  Seller shall have received at Closing a
certificate to that effect dated as of such Closing Date and executed by the
Chief Executive Officer, Chief Financial Officer or President of
Purchaser.  Each of the covenants and
agreements of Purchaser to be performed on or prior to the Closing Date shall
have been performed in all material respects. 
Seller shall have received at Closing a certificate to that effect dated
as of such Closing Date and executed by the Chief Executive Officer, Chief
Financial Officer or President of Purchaser.

 

(d)           Closing Deliveries.  Purchaser shall have delivered or caused to
be delivered to Seller all of the items listed in Section 3.6.

 

ARTICLE 10

TERMINATION

 

10.1         Termination.  This Agreement may be terminated at any time
prior to the Closing Date:

 

(a)           By the mutual written
agreement of Purchaser and Seller;

 

37

 

(b)           By Seller or Purchaser,
in the event of a breach by the other of any representation, warranty or
agreement contained herein which is not cured or cannot be cured within thirty
(30) calendar days after written notice of such termination has been delivered
to the breaching party and which, in the case of a breach of a representation
or warranty, would if occurring or continuing on the Closing Date permit the
terminating party not to consummate the P&A Transaction under the standard
set forth in Section 9.1(c) or 9.2(c), as applicable; provided, however, that termination pursuant to this Section 10.1(b) shall
not relieve the breaching party of liability arising out of or related to such
breach;

 

(c)           By Seller or Purchaser,
in the event the Closing has not occurred by September 25, 2009, unless
the failure to so consummate is due to a breach of this Agreement by the party
seeking to terminate; or

 

(d)           By either Seller or
Purchaser, if any governmental agencies or authorities that must grant a
Regulatory Approval has denied approval of the P&A Transaction and such
denial has become final and nonappealable or any governmental agency or
authority of competent jurisdiction shall have issued a final and nonappealable
order permanently enjoining or otherwise prohibiting the consummation of the
P&A Transaction.

 

10.2         Effect of Termination.  In the event of termination of this Agreement
and abandonment of the transactions contemplated hereby pursuant to Section 10.1,
no party hereto (or any of its directors, officers, employees, agents or
Affiliates) shall have any liability or further obligation to any other party,
except as provided in Section 7.2(b) and except that nothing herein
will relieve any party from liability for any breach of this Agreement.

 

ARTICLE 11

INDEMNIFICATION

 

11.1         Indemnification.  (a) Subject to the provision of this Article 11
and Section 12.1, Seller shall indemnify and hold harmless Purchaser and
any Person directly or indirectly controlling or controlled by Purchaser from
and against any and all Losses which they may suffer, incur or sustain arising
out of or attributable to the following:

 

(i)            any breach of any
representation or warranty made by Seller in this Agreement (it being
understood and agreed that such representations and warranties shall be
interpreted without giving effect to any such limitations or qualifications as
to “knowledge,” “materiality” or “Material Adverse Effect”);

 

(ii)           any breach of any
covenant or agreement to be performed by Seller pursuant to this Agreement;

 

(iii)          as provided under Section 8.7(k);
or

 

(iv)          the Excluded Liabilities.

 

(b)           Subject to the
provisions of this Article 11 and Section 12.1, Purchaser shall
indemnify and hold harmless Seller and any Person directly or indirectly
controlling or 

 

38

 

controlled by Seller from and against any and all
Losses which they may suffer, incur or sustain arising out of the following:

 

(i)            any breach of any
representation or warranty made by Purchaser in this Agreement (it being
understood and agreed that such representations and warranties shall be
interpreted without giving effect to any such limitations or qualifications as
to “knowledge,” “materiality” or “Material Adverse Effect”);

 

(ii)           any breach of any
covenant or agreement to be performed by Purchaser pursuant to this Agreement;

 

(iii)          any Liability or Legal
Proceeding based upon any action taken or omitted to be taken by Purchaser
after the Closing Date, relating in any such case to the operation of the
Branches, the Real Property or the Assets;

 

(iv)          as provided in Section 8.7(k);

 

(v)           the Assumed
Liabilities.

 

11.2         Indemnification
Procedures.

 

(a)           A claim for
indemnification for any matter not involving a third party claim may be
asserted by written notice to the party from whom indemnification is sought,
which notice shall include a reasonable description of the basis for the claim.

 

(b)           In the event that any
Legal Proceedings shall be instituted or that any Third Party Claim is
asserted, the indemnified party shall reasonably and promptly cause written
notice of the assertion of any Third Party Claim of which it has knowledge
which is covered by this indemnity to be forwarded to the indemnifying
party.  If the indemnifying party
acknowledges in writing its obligation to indemnify the indemnified party
hereunder against any Losses that may result from such Third Party Claim, the
indemnifying party shall have the right, at its sole expense, to be represented
by counsel and to defend against, negotiate, settle or otherwise deal with any
Third Party Claim which relates to any Losses for which indemnification is
sought hereunder.  If the indemnifying
party elects to defend against, negotiate, settle or otherwise deal with any
Third Party Claim which relates to any Losses for which indemnification is
sought hereunder, it shall within ten (10) days (or sooner, if the nature
of the Third Party Claim so requires) notify the indemnified party of its
intent to do so.  If the indemnifying
party elects not to defend against, negotiate, settle or otherwise deal with
any Third Party Claim which relates to any Losses for which indemnification is
sought hereunder, or fails to notify the indemnified party of its election as
herein provided the indemnified party may then, but only then, defend against,
negotiate, settle or otherwise deal with such Third Party Claim.  If the indemnified party defends any Third
Party Claim, then the indemnifying party shall reimburse the indemnified party
for the reasonable expenses of defending such Third Party Claim upon submission
of periodic bills.  If the indemnifying
party shall assume the defense of any Third Party Claim, the indemnified party
may participate, at his or its own expense, in the defense of such Third Party
Claim; provided, that such indemnified party
shall be entitled to participate in any such defense with separate counsel at
the expense of the indemnifying party if (i) so requested by the
indemnifying party to participate, (ii) in the reasonable opinion of
counsel to the 

 

39

 

indemnified party a conflict or potential conflict
exists between the indemnified party and the indemnifying party that would make
such separate representation advisable, (iii) such claim is based upon an
investigation, inquiry, or other proceeding by a governmental body, or (iv) Purchaser
reasonably anticipates the Third Party Claim to have a material and adverse
effect upon either the Purchaser’s use of the Assets and/or the conduct or
reputation of the Purchaser and its business after the Closing Date; and provided, further, that
the indemnifying party shall not be required to pay for more than one such
counsel (and any appropriate local counsel) for all indemnified parties in
connection with any Third Party Claim. 
The parties hereto agree to cooperate fully with each other in
connection with the defense, negotiation or settlement of any such Third Party
Claim.  Notwithstanding anything in this Section 11.2
to the contrary, the indemnified party shall not, without the written consent
of the indemnifying party, settle or compromise any Third Party Claim or permit
a default or consent to entry of any judgment unless the claimant and the
indemnified party provide to the indemnifying party an unqualified release from
all Liability in respect of the related Third Party Claim.

 

(c)           After any final
judgment or award shall have been rendered by a governmental body of competent
jurisdiction and the expiration of the time in which to appeal therefrom, or a
settlement shall have been consummated, or the indemnified party and the
indemnifying party shall have arrived at a mutually binding agreement with
respect to a Third Party Claim hereunder, the indemnified party shall forward
to the indemnifying party notice of any sums due and owing (including any
bills, records or other documentation supporting such sums and the dates such
sums were incurred) by the indemnifying party pursuant to this Agreement with
respect to such matter and the indemnifying party shall be required to pay all
of the undisputed sums so due and owing to the indemnified party by wire
transfer of immediately available funds within five Business Days after the
date of such notice.

 

(d)           The failure of the
indemnified party to give reasonably prompt notice of any Third Party Claim
shall not release, waive or otherwise affect the indemnifying party’s
obligations with respect thereto except to the extent that the indemnifying
party can demonstrate actual Loss and prejudice as a result of such failure.

 

11.3         Limitations on
Indemnification.

 

(a)           Seller shall not have
any Liability under Section 11.1(a)(i) and Purchaser shall not have
any Liability under Section 11.1(b)(i) unless and until the aggregate
amount of Losses to the indemnified parties to arise thereunder based upon,
attributable to or resulting from a breach of any representation or warranty
exceeds $60,000 (the “Deductible”) and, in such event, the indemnifying
party shall be required to pay the amount of such Losses that exceeds the
Deductible.

 

(b)           Until the amount of
claims exceeds the Deductible, no single claim for Losses may be made for
indemnification or aggregated with any other claim for indemnification if the
amount of such claim does not exceed $10,000.

 

(c)           Notwithstanding the
foregoing, the Deductible shall not apply to the extent Purchaser seeks
reimbursement or indemnification for (i) Losses resulting from fraud or
intentional misrepresentation; (ii) Losses under Sections 11.1(a)(ii),
11.1(a)(iii), or 11.1(a)(iv); or 

 

40

 

(iii) Losses resulting from a breach of any
representations and warranties set forth in Sections 5.1 (Corporate
Organization and Authority), 5.10 (Title to Assets), 5.12 (Environmental),
5.14 (Owned Real Property), and 8.1 (Tax).

 

(d)           Notwithstanding the
foregoing, the Deductible shall not apply to the extent Seller seeks
reimbursement or indemnification for (i) Losses resulting from fraud or
intentional misrepresentation; (ii) Losses under Sections 11.1(b)(ii),
11.1(b)(iii), 11.1(b)(iv) or 11.1(b)(v); or (iii) Losses resulting
from a breach of any representations and warranties set forth in Section 6.1
(Organization and Authority).

 

(e)           Neither Seller nor
Purchaser shall be required to indemnify, any Person under Section 11.1(a) or
11.1(b) for an aggregate amount of Losses exceeding $1,000,000 (the “Cap”).

 

(f)            Notwithstanding the
foregoing, the Cap shall not apply to the extent Purchaser seeks reimbursement
or indemnification for (i) Losses resulting from fraud or intentional
misrepresentation; (ii) Losses under Sections 11.1(a)(ii), 11.1(a)(iii),
or 11.1(a)(iv) or; (iii) Losses resulting from a breach of any
representations and warranties set forth in Sections 5.1 (Organization and
Authority), 5.10 (Title to Assets), 5.12 (Environmental), 5.14 (Owned Real
Property), and 8.1 (Tax).

 

(g)           Notwithstanding the
foregoing, the Cap shall not apply to the extent Seller seeks reimbursement or
indemnification for (i) Losses resulting from fraud or intentional
misrepresentation; (ii) Losses under Sections 1.11(b)(ii), 11.1(b)(iii),
11.1(b)(iv) or 11.1(b)(v); or (iii) Losses resulting from a breach of
any representations and warranties set forth in Section 6.1 (Organization
and Authority).

 

11.4         Exclusivity.  After the Closing, except as expressly set
forth in Sections 4.9, 8.3 and 8.7(k), and except in the case of common law
fraud relating to the entry into this Agreement, Article 11 will provide
the exclusive remedy for any misrepresentation, breach of warranty, covenant or
other agreement or other claim arising out of the this Agreement or the
transactions contemplated hereby; provided, that it is understood and agreed
that the foregoing shall not prevent a party from obtaining specific
performance, injunctive relief or any other available non-monetary equitable
remedy.

 

11.5         AS-IS, WHERE-IS Sale;
Waiver of Warranties.  Except as set
forth in Article 5 and Section 8.1, Purchaser acknowledges that the
Assets and Assumed Liabilities are being sold and accepted on an “AS-IS”,
WHERE-IS” basis, and are being accepted without any representation or
warranty.  As part of Purchaser’s
agreement to purchase and accept the Assets and Assumed Liabilities
AS-IS-WHERE-IS, and not as a limitation on such agreement, TO THE FULLEST
EXTENT PERMITTED BY LAW, SELLER HEREBY DISCLAIMS AND PURCHASER HEREBY
UNCONDITIONALLY AND IRREVOCABLY WAIVES AND RELEASES ANY AND ALL ACTUAL OR
POTENTIAL RIGHTS PURCHASER MIGHT HAVE AGAINST SELLER OR ANY PERSON DIRECTLY OR
INDIRECTLY CONTROLLING SELLER REGARDING ANY FORM OF WARRANTY, EXPRESS OR
IMPLIED, OF ANY KIND OR TYPE, RELATING TO THE ASSETS AND ASSUMED LIABILITIES
EXCEPT THOSE SET FORTH IN ARTICLE 5 AND SECTION 8.1.  SUCH 

 

41

 

WAIVER AND RELEASE IS, TO THE FULLEST EXTENT PERMITTED
BY LAW, ABSOLUTE, COMPLETE, TOTAL AND UNLIMITED IN EVERY WAY.  SUCH WAIVER AND RELEASE INCLUDES TO THE
FULLEST EXTENT PERMITTED BY LAW, BUT IS NOT LIMITED TO, A WAIVER AND RELEASE OF
EXPRESS WARRANTIES (EXCEPT THOSE SET FORTH IN ARTICLE 5 AND SECTION 8.1),
IMPLIED WARRANTIES, WARRANTIES OF FITNESS FOR A PARTICULAR USE, WARRANTIES OF
MERCHANTABILITY, WARRANTIES OF HABITABILITY, STRICT LIABILITY RIGHTS AND CLAIMS
OF EVERY KIND AND TYPE, INCLUDING BUT NOT LIMITED TO CLAIMS REGARDING DEFECTS
WHICH WERE NOT OR ARE NOT DISCOVERABLE, ALL OTHER EXTANT OR LATER CREATED OR
CONCEIVED OF STRICT LIABILITY OR STRICT LIABILITY TYPE CLAIMS AND RIGHTS.

 

11.6         Survival.  The indemnification obligations set forth in
this Article 11 shall survive the Closing until the expiration of the
applicable Survival Period (as defined below) related to the indemnification
obligations set forth in this Article 11.

 

ARTICLE 12

MISCELLANEOUS

 

12.1         Survival of
Representations, Warranties, and Covenants. 
The representations, warranties, and covenants of the parties contained
in this Agreement shall survive the Closing as follows:

 

(a)           the representations and
warranties in Sections 8.1 shall survive until the expiration of the applicable
statute of limitations;

 

(b)           the representations and
warranties in Section 5.12 shall survive the Closing and will not
terminate until the second (2nd)
anniversary of the Closing Date;

 

(c)           the indemnification
obligations set forth in Sections 11.1(a)(iii) and (iv) and Sections
11.1(b)(iii),(iv) and (v) shall survive indefinitely;

 

(d)           all other
representations and warranties in this Agreement shall survive the Closing and
will not terminate for eighteen (18) months following the Closing Date; and

 

(e)           The covenants and
agreements of the parties hereto contained in this Agreement shall, subject to
the express terms thereof, not survive the Closing; provided
that the agreements and covenants set forth in Section 12.4 shall survive
the Closing or any termination of this Agreement (items (a) through (e) collectively,
the “Survival Period”);

 

provided, that any obligation to
indemnify and hold harmless shall not terminate with respect to any Losses as
to which the Person to be indemnified shall have given notice (stating in
reasonable detail the basis of the claim for indemnification) to the
indemnifying party in accordance with Section 11.2 before the termination
of the Survival Period.

 

12.2         Assignment.  Neither this Agreement nor any of the rights,
interests or obligations of either party may be assigned by either party hereto
without the prior written consent of the other party, and any purported
assignment in contravention of this Section 12.2 shall be void.

 

42

 

12.3         Binding Effect.  This Agreement and all of the provisions
hereof shall be binding upon and inure to the benefit of the parties hereto and
their respective successors and permitted assigns.

 

12.4         Public Notice.  Neither Purchaser, Seller nor any of their
respective Affiliates shall directly or indirectly make or cause to be made any
press release for general circulation, public announcement or disclosure or
issue any notice with respect to any of the transactions contemplated hereby
without the prior written consent of the other party (which consent shall not
be unreasonably withheld, conditioned or delayed).  Purchaser and Seller each agree that, without
the other party’s prior written consent, neither Purchaser, Seller nor any of
their respective Affiliates shall release or disclose any of the terms or
conditions of the transactions contemplated herein to any other Person.  Notwithstanding the foregoing, each party may
make such public disclosure as, in the opinion of its counsel, may be required
by law or as necessary to obtain the Regulatory Approvals.

 

12.5         Notices.  All notices, requests, demands, consents and
other communications given or required to be given under this Agreement and
under the related documents shall be in writing and delivered to the applicable
party at the address indicated below:

 

	
   

  	
  If to
  Seller:

  	
  Wachovia
  Bank, N.A.

  
	
   

  	
   

  	
  301 South
  College Street

  
	
   

  	
   

  	
  Charlotte,
  North Carolina 28288

  
	
   

  	
   

  	
  Attention:  Corporate Secretary

  
	
   

  	
   

  	
  Facsimile:  (704) 715-4494

  
	
   

  	
   

  	
   

  
	
   

  	
  With a copy
  to:

  	
  Wells
  Fargo & Company

  
	
   

  	
   

  	
  Wells Fargo
  Center

  
	
   

  	
   

  	
  MAC
  #N9305-173

  
	
   

  	
   

  	
  Sixth and
  Marquette

  
	
   

  	
   

  	
  Minneapolis,
  Minnesota 55479

  
	
   

  	
   

  	
  Attention:  Corporate Secretary

  
	
   

  	
   

  	
  Facsimile:  (612) 667-6082

  
	
   

  	
   

  	
   

  
	
   

  	
  If to
  Purchaser:

  	
  Heritage
  Bank of Commerce

  
	
   

  	
   

  	
  150 Almaden
  Boulevard

  
	
   

  	
   

  	
  San Jose,
  California 95113

  
	
   

  	
   

  	
  Attention:  General Counsel

  
	
   

  	
   

  	
  Facsimile:  (408) 947-6910

  
	
   

  	
   

  	
   

  
	
   

  	
  With a copy
  to:

  	
  Mark A.
  Bonenfant, Esq.

  
	
   

  	
   

  	
  Buchalter
  Nemer

  
	
   

  	
   

  	
  1000
  Wilshire Boulevard

  
	
   

  	
   

  	
  Fifteen
  Floor

  
	
   

  	
   

  	
  Los Angeles,
  California 90017

  
	
   

  	
   

  	
  Facsimile:  (213) 896-0400

  

 

43

 

or, as to each party at such other address as shall be
designated by such party in a written notice to the other party complying as to
delivery with the terms of this Section. 
Any notices shall be in writing, including telegraphic or facsimile
communication, and may be sent by registered or certified mail, return receipt
requested, postage prepaid, or by fax, or by overnight delivery service.  Notice shall be effective upon actual receipt
thereof.

 

12.6         Parent Financial
Corporation Obligation.  Parent, as
the ultimate parent of Seller, by its signature hereto irrevocably, absolutely
and unconditionally guarantees the performance of Seller of its obligations
under this Agreement.  Parent waives
presentment, demand, protest, notice of acceptance, notice of obligations
incurred and all other notices of any kind, all legal or equitable defenses
which may be available by virtue of any change in the time, manner or place of
Purchaser’s performance, any right to require the marshalling of assets, and
all suretyship defenses generally. 
Parent represents that it has the corporate authority to undertake its
obligations hereunder, and the execution and delivery of this Agreement has
been duly authorized by all necessary corporate action by Parent.  Upon execution and delivery by Seller, Parent’s
obligations hereunder will constitute valid and binding obligations of Parent,
enforceable in accordance with its terms subject to subject to bankruptcy,
insolvency and other similar laws of general applicability relating to or
affecting creditors’ rights and to general equity principles. This Section 12.6
shall be binding upon Parent’s successors and permitted assigns.

 

12.7         Expenses.  Except as expressly provided otherwise in
this Agreement, each party shall bear any and all costs and expenses which it
incurs, or which may be incurred on its behalf, in connection with the
preparation of this Agreement and consummation of the transactions described
herein, and the expenses, fees, and costs necessary for any approvals of the
appropriate regulatory authorities.

 

12.8         Governing Law.  This Agreement shall be governed by and
interpreted in accordance with the laws of the State of Delaware.

 

12.9         Entire Agreement;
Amendment.  (a) This Agreement
contains the entire understanding of and all agreements between the parties
hereto with respect to the subject matter hereof and supersedes any prior or
contemporaneous agreement or understanding, oral or written, pertaining to any
such matters which agreements or understandings shall be of no force or effect
for any purpose; provided, however, that the terms
of any confidentiality agreement between the parties hereto previously entered
into, to the extent not inconsistent with any provisions of this Agreement,
shall continue to apply, except that, upon consummation of the P&A
Transaction, Purchaser’s confidentiality obligations under any such
confidentiality agreement shall terminate solely with respect to that portion
of the confidential information exclusively relating to the Assets and the
Liabilities.  If, for any reason, the
P&A Transaction is not consummated, any such confidentiality agreement
shall nevertheless continue in full force and effect and shall remain binding
on Purchaser.

 

(b)           This Agreement may not
be amended or supplemented in any manner except by mutual agreement of the
parties and as set forth in a writing signed by the parties hereto or their
respective successors in interest.  The
waiver of any beach of any provision under this Agreement by any party shall
not be deemed to be waiver of any preceding or subsequent breach under this
Agreement.  No such waiver shall be
effective unless in writing.

 

44

 

12.10       Third Party Beneficiaries.  Except as expressly provided in Section 11.1,
this Agreement shall not benefit or create any right or cause of action in or
on behalf of any Person other than Seller and Purchaser.

 

12.11       Counterparts.  This Agreement may be executed in any number
of counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

 

12.12       Headings.  The headings used in this Agreement are
inserted for purposes of convenience of reference only and shall not limit or
define the meaning of any provisions of this Agreement.

 

12.13       Severability.  If any provision of this Agreement, as
applied to any party or circumstance, shall be judged by a court of competent
jurisdiction to be void, invalid or unenforceable, the same shall in no way
effect any other provision of this Agreement, the application of any such
provision and any other circumstances or the validity or enforceability of the
other provisions of this Agreement.

 

12.14       Specific Performance.  The parties hereto agree that irreparable
damage would occur if any provision of this Agreement were not performed in
accordance with the terms hereof (and, more specifically, that irreparable
damage would likewise occur if the P&A Transaction was not consummated),
and, accordingly, that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement or to enforce specifically
the performance of the terms and provisions hereof (including the parties’ obligation
to consummate the P&A Transaction, subject to the terms and conditions of
this Agreement).

 

[Remainder of page intentionally
left blank]

 

45

 

IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be executed by their duly authorized officers as of the date
and year first above written.

 

	
   

  	
   

  	
  SELLER

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  WACHOVIA BANK, N.A.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Bruce F. Hegel

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Bruce F. Hegel

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Executive Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  PURCHASER

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  HERITAGE BANK OF COMMERCE

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Walter Kaczmarek

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Walter Kaczmarek

  
	
   

  	
   

  	
   

  	
  Title:

  	
  President

  

 

Accepted and Acknowledged

with respect to the obligations

set forth in Section 12.6

 

 

PARENT

 

 

WELLS FARGO & COMPANY

 

 

	
  By:

  	
  /s/ Bruce F. Hegel

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Bruce F. Hegel

  	
   

  	
   

  
	
   

  	
  Title:

  	
  Executive Vice President

  	
   

  	
   

  

 

S-1

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