EXHIBIT 10.1
THIS PURCHASE AND ASSUMPTION AGREEMENT CONTAINS REPRESENTATIONS AND WARRANTIES
THAT UNION BANK OF CALIFORNIA, N.A. AND WACHOVIA BANK, N.A. MADE
TO EACH OTHER.
THESE REPRESENTATIONS AND WARRANTIES WERE MADE AS OF SPECIFIC
DATES, MAY BE
SUBJECT TO IMPORTANT QUALIFICATIONS AND LIMITATIONS AGREED TO BY UNION
BANK OF
CALIFORNIA, N.A. AND WACHOVIA BANK,
N.A. IN CONNECTION
WITH NEGOTIATING THE
TERMS OF THE PURCHASE AND ASSUMPTION AGREEMENT, AND MAY HAVE BEEN INCLUDED IN
THE PURCHASE AND ASSUMPTION AGREEMENT FOR
THE PURPOSE OF ALLOCATING RISK BETWEEN
UNION BANK OF CALIFORNIA, N.A. AND WACHOVIA BANK, N.A.
RATHER THAN ESTABLISHING
MATTERS AS FACTS. ACCORDINGLY, THE PURCHASE
AND ASSUMPTION AGREEMENT IS INCLUDED
WITH THIS FILING ONLY TO PROVIDE INVESTORS
WITH INFORMATION
REGARDING THE TERMS
OF THE PURCHASE AND ASSUMPTION AGREEMENT,
AND NOT TO PROVIDE
INVESTORS WITH ANY
OTHER FACTUAL INFORMATION REGARDING THE
PARTIES OR THEIR RESPECTIVE BUSINESSES.
THE PURCHASE AND ASSUMPTION AGREEMENT SHOULD NOT BE READ ALONE,
BUT SHOULD
INSTEAD BE READ IN CONJUNCTION WITH THE
OTHER INFORMATION
REGARDING THE PARTIES
AND THE TRANSACTION THAT WILL BE OR HAS BEEN CONTAINED
IN, OR INCORPORATED
BY
REFERENCE INTO, THE FORMS 10-K, FORMS 10-Q, FORMS 8-K AND OTHER FILINGS
THAT
EACH OF UNION BANK OF CALIFORNIA, N.A. AND WACHOVIA BANK, N.A. OR THEIR
AFFILIATES MAY MAKE WITH THE SECURITIES AND
EXCHANGE COMMISSION.
PURCHASE AND ASSUMPTION AGREEMENT
BY AND AMONG
UNION BANK OF CALIFORNIA, N. A.,
UNION BANK OF CALIFORNIA INTERNATIONAL,
AND
UNION BANK OF CALIFORNIA SERVICOS LTDA.
AS SELLERS, ON THE ONE HAND,
AND
WACHOVIA BANK, N.A.,
AS PURCHASER, ON THE OTHER HAND
DATED SEPTEMBER 21, 2005
<PAGE>
EXECUTION COPY
PURCHASE AND ASSUMPTION AGREEMENT
BY AND AMONG
UNION BANK OF CALIFORNIA, N. A.,
UNION BANK OF CALIFORNIA INTERNATIONAL,
AND
UNION BANK OF CALIFORNIA SERVICOS LTDA.
AS SELLERS, ON THE ONE HAND,
AND
WACHOVIA BANK, N.A.,
AS PURCHASER, ON THE OTHER HAND
DATED SEPTEMBER 21, 2005
<PAGE>
TABLE OF CONTENTS
PAGE
ARTICLE I
DEFINITIONS.............................................1
ARTICLE II
TRANSFER AND ACQUISITION OF PURCHASED ASSETS...........14
2.1 Purchased
Assets...........................................14
2.1.1
Purchased Assets..................................14
2.1.2
Consents
to Assignment............................14
2.2 Excluded
Assets............................................15
2.3 Assumed
Obligations........................................17
2.4 Excluded
Obligations.......................................18
2.5 Closing
Balance Sheet......................................18
2.6
Consideration for Purchase of the Purchased Assets.........18
2.6.1
Consideration Amount at Principal Closing.........18
2.6.2
Consideration Amount at Subsequent Closings.......18
2.6.3
Closing Cash Consideration Amount.................18
2.7 The
Closing................................................19
2.7.1
Closing Procedures................................19
2.7.2
References to Closing and Effective Time..........19
2.7.3
Outside Principal Closing Date....................19
2.7.4
Outside Business Unit Closing Date................19
2.7.5
Deliverables at Each Closing......................20
2.7.6
Deliverables at the Principal Closing.............21
2.8
True-Up....................................................21
2.8.1
Final Balance Sheet...............................21
2.8.2
Mutual Right of Review............................22
2.8.3
Dispute
Resolution................................22
2.8.4
Payment of True-Up................................22
2.8.5
Interest..........................................23
2.9 Contingent
Payment.........................................23
2.9.1
Calculation of Conversion Percentage..............23
2.9.2
Payment of Contingent Payment.....................23
2.10
Downward Adjustment........................................23
2.11
Allocation of Consideration................................23
2.12
Set-Off....................................................24
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TABLE OF CONTENTS
(continued)
PAGE
2.13
Tax Treatment of Contingent Payments and Downward
Adjustments
..............................................24
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLERS..............24
3.1
Organization of UBOC.......................................24
3.2
Organization of UBOCI......................................24
3.3
Organization of Limitada...................................25
3.4
Enforceability.............................................25
3.5 Financial
Statements.......................................25
3.5.1
Delivery of Financial Statements..................25
3.5.2
Sellers' Financial Statements.....................25
3.5.3
Baseline Sellers ADCR.............................26
3.6
Assets.....................................................26
3.6.1
Customers.........................................26
3.6.2 Risk
Assets.......................................26
3.6.3
Contingent Risk Assets and Contingent Risk
Liabilities.......................................26
3.6.4
Owned Real Property...............................26
3.6.5
Leased Real Property..............................26
3.6.6
Personal Tangible Property........................27
3.6.7
Business and Purchased Assets.....................27
3.7
Litigation.................................................27
3.8
Contracts..................................................27
3.9
Intellectual Property and IT Assets........................28
3.10
Licenses...................................................30
3.11
Books and Records..........................................30
3.12
Taxes and Tax Returns......................................30
3.13
Employees and Employee Plans and Contracts.................30
3.13.1
Identification of Employee Plans and Contracts....30
3.13.2
Identification of Employees.......................30
3.13.3 ERISA
Plans.......................................31
3.13.4 Non-U.S.
Pension Plans............................31
3.14
Labor Relations............................................31
3.15
Insurance..................................................31
3.16
Brokers or Finders.........................................31
3.17
Absence of Certain Changes and Events......................31
3.18
Compliance with Legal Requirements.........................32
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TABLE OF CONTENTS
(continued)
PAGE
3.19
Sellers' Approvals.........................................33
3.20
Hart-Scott Rodino..........................................33
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PURCHASER............33
4.1 Status of
Purchaser........................................33
4.2
Enforceability.............................................33
4.3 Certain
Proceedings........................................34
4.4 Brokers or
Finders.........................................34
4.5
Purchaser's Approvals......................................34
4.6 Investment
Company.........................................34
4.7 Bank
Regulatory Matters....................................34
4.8 Financing
Available........................................34
4.9 Baseline
Purchaser ADCR....................................34
4.10
Hart-Scott Rodino..........................................34
ARTICLE V
ADDITIONAL AGREEMENTS OF SELLERS AND PURCHASER.........35
5.1 Conduct of
the Business....................................35
5.2
Purchaser's Access to the Business Prior to Closing........37
5.3
Performance of this Agreement; Notification of Certain
Matters....................................................38
5.4
Conversion.................................................38
5.4.1
General Procedures................................38
5.4.2
Costs/Revenues of Sellers' Post-Closing Operations39
5.5 Employee
Matters...........................................39
5.6
[RESERVED].................................................40
5.7
Communications.............................................40
5.8 Execution
and Delivery of Documents........................41
5.9
Cooperation after the Closing..............................41
5.9.1
Further Assurances................................41
5.9.2
Sellers' Access to Records........................41
5.9.3
Purchaser's Access to Records.....................41
5.10
Regulatory Approvals; Third Party Consents.................42
5.10.1
Regulatory Approvals..............................42
5.10.2 Third
Party Consents..............................42
5.10.3
Agreements Affecting the Other Party..............43
5.11
Regulatory Compliance......................................43
5.12
No Solicitations...........................................43
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TABLE OF CONTENTS
(continued)
PAGE
5.13
Trademarks.................................................43
5.14
Non-Competition; Non-Solicitation; Confidentiality.........43
5.14.1
Sellers...........................................43
5.14.2
Restricted Area...................................43
5.14.3
Exceptions........................................44
5.14.4
Disposition of Business Activities................44
5.14.5
Enforcement.......................................45
5.14.6 Employee
Non-Solicitation; No Hire................45
5.14.7 Rights
Retained by Sellers........................46
5.14.8
Non-Disclosure Agreement..........................46
5.14.9
Confidentiality of Information of Purchaser.......46
5.14.10
Confidentiality of Information of Sellers.........47
5.14.11 Degree of Care
for Confidential Information.......47
5.14.12 Exceptions to
Confidentiality: Required
Disclosures.......................................47
5.14.13 No
Representations and Warranties Regarding
Proprietary Information...........................48
5.15
Privileged Information.....................................48
5.15.1
Privileged Documents in Books and Records.........48
5.15.2 Sellers
Privileged Information....................49
5.16
RESERVED...................................................49
5.17
Updated Schedules..........................................49
5.18
Section 314(b) of the Patriot Act..........................49
5.19
[Reserved].................................................49
5.20
Non-Disclosure Agreements..................................50
5.21
Option to Acquire Certain Assets...........................50
5.22
Risk Participation Assets..................................50
5.23
IT Assets..................................................50
ARTICLE VI
CONDITIONS PRECEDENT TO THE OBLIGATION OF PURCHASER
TO CLOSE...............................................51
6.1 Conditions
Precedent to Principal Closing..................51
6.1.1
Representations, Warranties and Covenants.........51
6.1.2
Related Agreements................................51
6.1.3
Approvals and Consents............................52
6.1.4
Injunction and Litigation.........................52
6.1.5
Material Adverse Effect...........................52
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TABLE OF CONTENTS
(continued)
PAGE
6.2 Conditions
Precedent to Subsequent Closings................52
6.2.1
Principal Closing.................................52
6.2.2
Covenants.........................................52
6.2.3
Related Agreements................................52
6.2.4
Approvals and Consents............................52
6.2.5
Injunction and Litigation.........................53
6.3 Subsequent
Closings........................................53
ARTICLE VII
CONDITIONS PRECEDENT TO THE OBLIGATION OF SELLERS
TO CLOSE...............................................53
7.1 Conditions
Precedent to Principal Closing..................53
7.1.1
Representations, Warranties and Covenants.........53
7.1.2
Related Agreements................................53
7.1.3
Approvals and Consents............................54
7.1.4
Injunction and Litigation.........................54
7.2 Conditions
Precedent to Subsequent Closings................54
7.2.1
Principal Closing.................................54
7.2.2
Covenants.........................................54
7.2.3
Related Agreements................................54
7.2.4
Approvals and Consents............................54
7.2.5
Injunction and Litigation.........................54
7.3 Subsequent
Closings........................................55
ARTICLE VIII
TAX MATTERS............................................55
8.1
Post-Closing Access to Records; Cooperation................55
8.2 Allocation
of Taxes; Tax Returns...........................55
8.3 Additional
Tax Matters.....................................56
8.4
Survival...................................................56
ARTICLE IX
TERMINATION............................................56
9.1
Termination................................................56
9.2 Procedure
of Termination...................................57
ARTICLE X
INDEMNIFICATION........................................57
10.1
UBOC's Indemnification.....................................57
10.2
Purchaser's Indemnification................................58
10.3
Conditions of Indemnification..............................59
10.4
Indemnification Limits.....................................61
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TABLE OF CONTENTS
(continued)
PAGE
10.4.1
Exclusions from Indemnification...................61
10.4.2 Right of
Subrogation..............................61
10.4.3 Time
Limits.......................................61
10.4.4
Limitations on Amount.............................61
10.4.5 Exclusive
Remedy..................................62
ARTICLE XI
MISCELLANEOUS PROVISIONS...............................62
11.1
Notices....................................................62
11.2
Sole Agreement.............................................63
11.3
Successors and Assigns.....................................64
11.4
Interpretation.............................................64
11.5
Dispute Resolution.........................................65
11.6
Governing Law and Jurisdiction.............................65
11.7
No Third Party Beneficiaries...............................65
11.8
Expenses...................................................65
11.9
Counterparts...............................................65
11.10
Severability...............................................66
11.11
Judicial Reference; Damages................................66
11.12
Schedules and Exhibits.....................................66
11.13
Sellers' Joint and Several Obligations.....................66
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<PAGE>
INDEX OF EXHIBITS
Exhibit A
Assumption Agreement
Exhibit B
Bill of Sale
Exhibit C
Risk Participation Agreement
Exhibit D
Business Employee Leasing Agreement
Exhibit E
Trademark and Trade Name License Agreement
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INDEX OF SCHEDULES
Schedule 1(A)
Conversion and Retention Related Definitions
Schedule 1(B)
Excluded Accounts
Schedule 1(C)
Exceptions to Excluded Leases
Schedule 1(D)
Knowledge
Schedule 2.2(m)
Statutory Deposits
Schedule 2.2(u)
Other Excluded Assets
Schedule 2.9.2
Contingent Payment
Schedule 2.10
Downward Adjustment
Schedule 2.11
Allocation of Consideration
Schedule 3.1
Sellers' Business Branches and Representative Offices
Schedule 3.5.2
Qualifications Assumptions, Adjustments to Seller's
Financial Statements
Schedule 3.6.1
Customers
Schedule 3.6.2
Risk Assets; Contingent Risk Assets and Contingent Risk
Liabilities
Schedule 3.6.5(A)
Leased Premises
Schedule 3.6.5(B)
Exceptions Regarding Breaches
Schedule 3.6.6(A)
Tangible Personal Property
Schedule 3.6.6(B)
Exceptions to Title of Tangible Personal Property
Schedule 3.7
Litigation
Schedule 3.8(A)
Contracts
Schedule 3.8(B)
Exception Regarding Defaults
Schedule 3.9.1
Registered Transferred Owned Intellectual Property
Schedule 3.9.4
Intellectual Property Actions Pending
Schedule 3.9.10
Exceptions to Intellectual Property Transfer
Schedule 3.10
Licenses
Schedule 3.13.1(A) Employee
Plans and Contracts
Schedule 3.13.1(B) Exception
to Administration of ERISA Plans
Schedule 3.13.2
Business Employees
Schedule 3.13.3
ERISA
Schedule 3.13.4
Exceptions to Administration of Retirement Plans outside
the U.S.
Schedule 3.14
Labor Relations
Schedule 3.15
Insurance
Schedule 3.17
Absence of Certain Changes and Events
Schedule 3.18
Compliance with Legal Requirements
Schedule 3.19
Sellers' Approvals
Schedule 4.5
Purchaser's Approvals
Schedule 5.1(b)
Conduct of the Business
Schedule 5.4
Conversion Protocols
Schedule 5.5(b)
Benefits for Accepting Employees
Schedule 5.5(e)(i)(ii) Employment Records of Transferred
Employees
Schedule 5.14.6(a) Seller's
Employees
Schedule 5.14.6(b)
Purchaser's Employees
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<PAGE>
PURCHASE AND ASSUMPTION AGREEMENT
THIS PURCHASE AND ASSUMPTION AGREEMENT (this "Agreement") is made and
entered into this 21st day of September, 2005, by and among UNION BANK OF
CALIFORNIA, N.A., a national banking association ("UBOC"), UNION BANK OF
CALIFORNIA INTERNATIONAL, a corporation organized under the provisions of
Section 25A of the Federal Reserve Act ("UBOCI"), UNION BANK OF CALIFORNIA
SERVICOS LTDA., a Brazilian limited liability company (sociedade limitada)
("LIMITADA" and together with UBOC and UBOCI,
"Sellers"),
and WACHOVIA
BANK,
N.A., a national banking association
("Purchaser").
RECITALS
WHEREAS, Purchaser wishes to purchase from Sellers, and Sellers
wish to
sell to Purchaser, all of the Purchased Assets (as hereinafter
defined), and
Purchaser desires to assume from Sellers, and Sellers desire to assign to
Purchaser, all of the Assumed Obligations
(as hereinafter defined), all upon the
terms and subject to the conditions
contained herein.
NOW, THEREFORE,
in consideration of the foregoing and the mutual
representations, warranties, covenants and agreements
herein contained, and
other good and valuable consideration,
the receipt and
sufficiency of which are
hereby acknowledged, Purchaser and Sellers
agree as follows:
ARTICLE I
DEFINITIONS
The following
terms, when used in this Agreement, shall have the
meanings described in this Section:
ACCEPTING EMPLOYEE shall have the meaning given in SCHEDULE
5.4.
ACCOUNTANTS DISPUTE WORK PAPERS shall have the meaning given in
Section
2.8.3.
ACCOUNTING FIRM means a major firm of independent public
accountants as
to which the Parties shall mutually
agree.
AFFILIATE means a
Person that directly,
or indirectly through
one or
more intermediaries, controls, or is controlled by, or is under
common control
with, the Person specified; PROVIDED, HOWEVER, that with respect to
Parent and
Sellers, and each of their respective
Subsidiaries,
"Affiliate" shall
exclude
The Bank of Tokyo-Mitsubishi, Ltd. and its Affiliates (other than Parent and
Sellers and each of their respective
Subsidiaries).
AGREEMENT shall have the meaning given in the preamble.
ASSUMED OBLIGATIONS shall have the meaning given in Section
2.3.
ASSUMED PRODUCT PRICES shall have the meaning given in SCHEDULE
1(A).
ASSUMPTION AGREEMENT shall have the meaning given in Section
2.7.5(d).
AVERAGE DAILY CORE
REVENUE or ADCR
shall have the
meaning given in
SCHEDULE 1(A).
BASELINE SELLERS ADCR shall have the meaning given in SCHEDULE
1(A).
1
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BASELINE PERIOD shall have the meaning given in SCHEDULE 1(A).
BASELINE PURCHASER ADCR shall have the meaning given in SCHEDULE
1(A).
BASE PURCHASE PRICE shall have the meaning given in Section
2.6.1(b).
BILL OF SALE shall have the meaning given in Section 2.7.5(e).
BOOKS AND RECORDS means all records and all other data and
information
(in whatever form maintained) in the possession or control of
Sellers or their
Affiliates and to the extent related to the Business as currently conducted
(except to the extent they relate to
Excluded Assets or
Excluded
Obligations),
including Customer lists, "know your customer" files with respect to the
Customers, transaction detail, customer
service and collection records, billing
records, accounting records, administrative records and files and records
relating to regulatory matters; PROVIDED,
HOWEVER, that if any such financial or
accounting records contain information that does not relate to the
Business,
such information and records shall not
constitute "Books and Records."
BOOK VALUE as used
with respect
to any Purchased Assets or Assumed
Obligations shall mean the value at which such assets or liabilities are
recorded on the balance sheets of the
Business as of the date in question, which
shall be in accordance with GAAP and
otherwise consistent
with the treatment of
such or comparable items on Sellers'
Financial Statements.
BRADY BONDS
means debt securities issued as part of a "Brady
Plan
restructuring" (as originally announced by former U.S. Treasury Secretary
Nicholas F. Brady) or any similar country
debt restructuring or
financing plan.
As commonly used, the term "Brady bond"
includes debt securities that may or may
not be collateralized, provided that they were issued either in exchange for
commercial bank loans (or accrued interest thereon) or as one of the menu
options made available as part of a sovereign debtor's restructuring or
refinancing of its external
indebtedness.
BUSINESS means
International Banking
Group activities and operations.
Notwithstanding the foregoing, for all purposes under this
Agreement, the
term
"Business" shall not include:
(i) the operations of the International Banking Group
conducted through its representative office
in Moscow;
(ii) International
Banking Group
customers
headquartered or
principally located in nations formerly constituting the Soviet Union and in
Eastern Europe;
(iii) the domestic
businesses of the
International
Banking
Group related to U.S. branches and agencies
of foreign banks;
(iv) the activities and operations characterized internally by
Sellers as the U.S. International and U.S. Export Industries, which includes
domestic customers (other than financial institutions) serviced by the
International Bank Group through such activities and operations and the
activities and operations of the
International
Banking Group
conducted through
offices located in Portland, Oregon;
Seattle, Washington;
and San Francisco and
Monterey Park, California;
(v) the processing center located in Monterey Park, California
to the extent providing letter of credit
processing
services for domestic
and
international clients; and
(vi) Excluded Accounts.
2
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BUSINESS ACTIVITIES shall have the meaning given in Section
5.14.3(c).
BUSINESS DAY means any
day other than a
Saturday, Sunday or a
day on
which commercial banks in New York, New York are
authorized or required by law
to be closed.
BUSINESS EMPLOYEES
means each Person
having the status of an employee
whose working time is primarily spent serving in the Business, including,
without limitation, each such Person currently on
leave of absence,
vacation,
sick days, short or long term disability or
workers' compensation.
BUSINESS EMPLOYEE
LEASING AGREEMENT shall have the meaning given
in
Section 2.7.6(b).
BUSINESS INTELLECTUAL
PROPERTY means all
Intellectual Property Rights
primarily related to, primarily used in or primarily held for use in the
Business.
BUSINESS
INTELLECTUAL
PROPERTY CONTRACTS
means all Intellectual
Property Contracts primarily related to,
primarily used in or primarily held for
use in the Business.
BUSINESS IT ASSETS means all IT Assets primarily related to, primarily
used in or primarily held for use in the
Business.
BUSINESS LEASES means
all real property leased or subleased to Sellers
or their Affiliates and used in connection
with the Business.
BUSINESS UNIT means the respective portion of the Business
conducted
through offices in each of the following
jurisdictions
or locations
(each of
which numbered jurisdictions or locations below shall be
considered a separate
Business Unit): (i) the offices through which the Principal Business Unit
conducts business, (ii) Japan, (iii) South Korea, (iv) China (excluding Hong
Kong) (v) Hong Kong, (vi) Philippines, (vii) Brazil, (viii) India, (ix)
Indonesia, (x) Malaysia, (xi) Singapore,
(xii) Thailand,
(xiii) Vietnam,
(xiv)
Cayman Islands and (xv) Taiwan.
CLAIM shall have the meaning given in Section 11.11(a).
CLOSING and
CLOSING DATE shall have the meanings given in Section
2.7.1.
CLOSING BALANCE SHEET shall have the meaning given in Section
2.5.
CLOSING CASH
CONSIDERATION
AMOUNT shall have the meaning given in
Section 2.6.3.
CODE means the Internal Revenue Code of 1986, as amended, and the
rules
and regulations promulgated thereunder.
COMPUTER PROGRAM means
(i) existing computer
software, programs and
applications, including all object code and
reasonably available
source code,
(ii) all versions, updates, corrections,
enhancements and modifications thereof,
(iii) all descriptions, flow-charts and logic diagrams,
programmers'
comments,
schematics, and other work product used to
design, plan,
organize and
develop
any of the foregoing, and (iv) all documentation, including technical
specifications, user manuals and training materials, relating to any of the
foregoing.
CONTINGENT PAYMENT shall have the meaning given in Section
2.9.2.
CONTINGENT PAYMENT DATE shall have the meaning given in Section
2.9.2.
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CONTINGENT
RISK ASSET
means a Risk Asset
that would be required to be
set forth on Schedule RC-L of the
Consolidated
Reports of Condition
and Income
for a Bank with Domestic and Foreign
Offices -- FFIEC 031.
CONTINGENT RISK LIABILITY means an off-balance sheet liability of the
kind that would be required to be set forth
on Schedule RC-L of the Consolidated
Reports of Condition and Income for a Bank
with Domestic and Foreign Offices --
FFIEC 031.
CONTRACT means any
contract, lease, sales order, purchase order,
commitment or other agreement, whether
written or oral.
CONTRACT INTEREST
RATE means the prime
rate for money center banks as
reported in the WALL STREET Journal from
time to time.
CONTROL shall have the meaning given in Section 5.14.1.
CONVERSION shall have the meaning given in Section 5.4.1.
CONVERSION MEASUREMENT
MONTH shall have the
meaning given in SCHEDULE
1(A).
CONVERSION PERCENTAGE shall have the meaning given in SCHEDULE
1(A).
CONVERSION PERCENTAGE
CALCULATION DATE shall have the meaning given in
Section 2.9.1.
CONVERSION PERIOD
COMBINED ADCR shall have the meaning given in
SCHEDULE 1(A).
CONVERSION PROTOCOLS shall have meaning given in Section 5.4.1.
COPYRIGHTS means
mask rights, original works of authorship and
copyrights, registrations and applications for
registration thereof
throughout
the world, all renewals, extensions, restorations and reversions
thereof, all
moral and common?law rights thereto, all rights therein provided by
international treaties or conventions, and all other rights associated
therewith.
CORE PRODUCTS shall have the meaning given in SCHEDULE 1(A).
CUSTOMER means
a Person maintaining a Risk Asset or deposit
relationship with any of the Sellers
and/or on whose behalf
any of the Sellers
provides correspondent banking or trade
related finance or processing services,
in all cases in connection with the Business, but does not include any
Person
maintaining an Excluded Account or any
customer relationship
excluded from the
definition of Business.
DISPUTE OFFICER shall have the meaning given in Section
10.3(a).
DOWNWARD ADJUSTMENT shall have the meaning given in Section
2.10.
EFFECTIVE TIME shall have the meaning given in Section 2.7.1.
EMPLOYEE PLAN OR
CONTRACT means (i) each individual employment or
severance Contract with a current Business
Employee; (ii) each
plan or Contract
providing for deferred compensation, bonuses, stock options, employee stock
purchases, other equity-compensation or equity
appreciation rights,
incentive
compensation, executive compensation
payments or Severance Benefits or any other
employee benefit (including, but not limited to, fringe
benefits as defined in
Section 132 of the Code, and whether or not in
4
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writing), in each case covering current
Business Employees; (iii) any ERISA Plan
covering any current Business Employee and (iv) Sellers' Retention Program;
PROVIDED, HOWEVER, that Employee Plan or Contract
shall not mean any
employee
benefit required to be provided by Legal
Requirements
that are not
otherwise
part of Sellers' applicable and effective written plan or policy or
otherwise
embodied in a Contract with any Business
Employee.
EMPLOYMENT TIME shall have the meaning given in SCHEDULE 5.4.
ENCUMBRANCE means any pledge, security interest, mortgage, community
property interest, lien (including but not limited to
liens for unpaid taxes),
attachment, automatic or other stay in a
bankruptcy or
insolvency
proceeding,
trust agreement, constructive or resulting
trust, voting trust or agreement,
restricted stock agreement, right of first refusal,
or option,
including any
restriction on use, voting, transfer, receipt of income, or exercise of any
other attribute of ownership.
ENFORCEABILITY EXCEPTIONS shall have the meaning given in Section
3.4.
ENVIRONMENTAL LAW
shall mean any Legal
Requirement
relating to the
protection of the natural environment (i.e., air, water and soil),
including,
without limitation, the Comprehensive
Environmental
Response, Compensation
and
Liability Act (42 U.S.C. Section 9601, ET SEQ.); the
Resource Conservation
and
Recovery Act (42 U.S.C. Section 6901, ET SEQ.); the Clean Air Act, as amended
(42 U.S.C. Section 7401, ET SEQ.); the
Federal Water Pollution Control Act, as
amended (33 U.S.C. Section 1251, ET SEQ.); the Toxic
Substances Control Act, as
amended (15 U.S.C. Section 9601, ET SEQ.); the
Emergency Planning and Community
Right-to-Know Act of 1986 (42 U.S.C.
Section 11001, ET
SEQ.); the Safe Drinking
Water Act (42 U.S.C. Section 300f, ET SEQ.); and all
comparable state and local
laws and laws of other jurisdictions.
ERISA means the Employee Retirement Income Security Act of
1974.
ERISA PLAN means an employee benefit plan as defined in Section
3(3) of
ERISA.
EXCLUDED ACCOUNTS
means the accounts of
the Persons listed as
of the
date hereof on SCHEDULE 1(B) and the
accounts of such other Persons as Purchaser
may elect to add to SCHEDULE 1(B), in its reasonable
discretion,
applying its
policies and standards substantially
consistent with those used to determine the
Persons listed on SCHEDULE 1(B) as of the
date hereof.
EXCLUDED ASSETS shall have the meaning given in Section 2.2.
EXCLUDED BUSINESS
INTELLECTUAL PROPERTY
CONTRACTS means all
Business
Intellectual Property Contracts concerning Business IT Assets and/or
Computer
Programs primarily related to, primarily used in or primarily
held for use in
the Business, except to the extent Purchaser
exercises its option
with respect
thereto pursuant to Section 5.23
hereof.
EXCLUDED BUSINESS IT ASSETS means all Business IT Assets, except to
the
extent Purchaser exercises its option with respect
thereto pursuant to Section
5.23 hereof.
EXCLUDED CONTRACTS
means all Contracts
except for (i) Business Leases
that constitute Purchased Assets; (ii)
Business Intellectual
Property Contracts
that constitute Purchased Assets; and (iii) those Contracts with respect to
which Purchaser exercises its option
pursuant to Section 5.21.2.
EXCLUDED LEASES means
all Business Leases except those Business Leases
set forth on SCHEDULE 1(C).
EXCLUDED OBLIGATIONS shall have the meaning given in Section
2.4.
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EXTERNAL
COMMUNICATIONS PLAN
has the meaning given in the Conversion
Protocols.
FDIA means the Federal Deposit Insurance Act, 12 USC ss.1811 ET
SEQ.
FEDERAL RESERVE
means the Board of
Governors of the
Federal Reserve
System.
FINAL BALANCE SHEET shall have the meaning given in Section
2.8.1.
FINAL CASH CONSIDERATION AMOUNT shall have the meaning given in
Section
2.8.1.
FINAL RETENTION
PERCENTAGE means the greater of the (i) the Conversion
Percentage and (ii) the Initial Retention
Percentage.
GAAP means United States generally accepted accounting
principles.
GOVERNMENTAL AUTHORITY
means any government or political subdivision,
board, commission or other instrumentality thereof, whether federal, state,
local or foreign.
GROWTH FACTOR shall have the meaning given in SCHEDULE 1(A).
HAZARDOUS MATERIALS
means any substance, chemical, waste or other
material the presence of which requires
investigation or
remediation under
any
Environmental Law; or which is or becomes defined as a hazardous waste,
hazardous substance, hazardous material, used oil, pollutant or contaminant
under any Environmental Law.
HSR ACT means the Hart-Scott Rodino Antitrust Improvements Act of
1976.
INDEMNIFIED PARTY shall have the meaning given in Section 10.3.
INDEMNIFYING PARTY shall have the meaning given in Section
10.3.
INITIAL RETENTION
PERCENTAGE means the
average of the three Retention
Metric Quotients.
INTANGIBLE ASSETS
means, with respect to assets appearing on any
balance sheet, those rights and other
nonphysical resources such as core deposit
intangibles, Intellectual Property Rights; deferred tax assets, goodwill,
Computer Programs, capitalized advertising
costs, capitalized development costs,
organizational costs, licenses, leases,
franchises and permits.
INTELLECTUAL
PROPERTY
CONTRACTS means
all Contracts concerning
Intellectual Property Rights or IT Assets to which Sellers and/or their
Affiliates are a party, including (a) licenses of
Intellectual Property
Rights
(i) by any Seller or their Affiliates to any third party, (ii) by any third
party to any Seller or their Affiliates, or (iii) between or among Sellers
and/or their Affiliates, (b) agreements, licenses or leases relating to the
development, use, maintenance, support,
transfer or transmission of Intellectual
Property Rights or IT Assets, (c) consents, settlements, decrees, orders,
injunctions, judgments, or rulings governing the use, validity, or
enforceability of Intellectual Property Rights or IT Assets, and
(d) agreements
pursuant to which any third party has an
ownership or security
interest in any
Intellectual Property Rights or IT
Assets.
INTELLECTUAL PROPERTY
RIGHTS means
collectively:
(i) Patents,
(ii)
Copyrights, (iii) Trademarks, (iv) Trade Secrets, (v) copies and tangible
embodiments of any of the foregoing in
whatever form or medium, (vi) all rights
to sue, recover and retain damages,
costs and fees for
past, present and future
infringement, misappropriation, dilution, or
other violation of or interference
or conflict with any of the foregoing; and
(vii)
6
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rights to apply for or register any of the
foregoing.
INTERNATIONAL BANKING
GROUP means the international correspondent
banking and trade-related product business identified
internally (and
reported
as a separate business segment publicly) by
UBOC as the
"International
Banking
Group" and conducted through the domestic offices of Sellers located in San
Francisco, Monterey Park, Los Angeles,
and New York;
through foreign
branches
located in Tokyo, Taipei, Seoul, Hong Kong, Manila, and Grand Cayman; and
the
representative office activities conducted
through offices of Sellers located in
Brazil (Sao Paulo), China (Beijing and
Shanghai), India (Mumbai, Chennai and New
Delhi), Indonesia (Jakarta), Malaysia (Kuala Lumpur),
Philippines (Cebu Island,
a liaison office of Manila Branch),
Singapore (Singapore),
Thailand
(Bangkok),
and Vietnam (Ho Chi Minh City and
Hanoi).
IT ASSETS means computer systems, networks, hardware, Computer
Programs, firmware, middleware, servers,
workstations, routers,
hubs, switches,
telecommunications and data communication lines and all other information
technology equipment, and all related
documentation.
IRS means the Internal Revenue Service.
KNOWLEDGE means, with respect to each of Sellers, on the one hand, and
Purchaser, on the other hand, (i) the actual knowledge, without independent
investigation, of those individuals set forth on SCHEDULE 1(D) and (ii) such
knowledge as those individuals set forth on SCHEDULE
1(D) reasonably
would be
expected to have in light of their
respective
employment
positions or titles
with Sellers or Purchaser, as
applicable.
LEASED PREMISES shall have the meaning given in Section 3.6.5.
LEGAL REQUIREMENT means any law, statute, ordinance, regulation, writ,
injunction, rule, established principle of common law, directive, decree,
administrative ruling or enforceable supervisory policy of any Governmental
Authority or applicable court decision.
LICENSE means any license, permit, order, approval or non-objection,
registration, membership, authorization or qualification under any federal,
state or local law or with any Governmental Authority or under any industry
or
non-governmental self-regulatory
organization used by the Business.
LICENSED BUSINESS
INTELLECTUAL
PROPERTY means
Business
Intellectual
Property that Sellers are licensed or
otherwise permitted by
other Persons to
use in the operation of the Business.
LIMITADA shall have the meaning given in the recitals.
LOSS means all losses,
costs, obligations, liabilities, settlement
payments, awards, judgments, fines,
penalties, damages,
and expenses (including
but not limited to reasonable and necessary fees of counsel, investigators,
expert witnesses, consultants and other
professionals, court
filing fees, court
costs, arbitration fees or costs, witness fees and other
similar expenses),
whether or not relating to claims of third
persons.
MATERIAL ADVERSE EFFECT means with respect to any Party or the
Business
any effect, condition, event, change or occurrence (or
any combination thereof)
(a) that is materially adverse to the business, condition (financial or
otherwise) or results of operations of the Business or such Party taken as
a
whole or (b) that materially impairs the
ability of such Party to consummate the
transactions contemplated by this Agreement; PROVIDED, HOWEVER, that in
determining whether a Material Adverse
Effect with respect to the Business, or a
Party, as the case may be, has
occurred there shall be excluded any effect,
condition, event, change or occurrence
impacting the Business
or such Party to
the extent caused by: (i) any change
generally affecting banks (including
Edge
Act corporations) or bank holding
companies in laws,
regulations or rules
(or
enforcement or interpretations thereof), or of GAAP or regulatory
accounting
principles or requirements
7
<PAGE>
(unless such change has a materially disproportionate adverse effect on the
Business or such Party, as the case may be, relative to similarly situated
business or banking organizations); (ii) any change generally affecting
correspondent banking providers or the
market for correspondent banking products
and services (unless such change has a materially disproportionate adverse
effect on the Business or such Party,
as the case may be,
relative to similarly
situated business or correspondent banking providers); (iii) any change in
markets or conditions (financial, political or economic) affecting
international, national or local economies or
financial markets or
the banking
industry, including without limitation interest or exchange rates,
convertibility of foreign currencies, war, terrorism, or hostilities (unless
such change has a materially disproportionate adverse effect on
the Business or
such Party, as the case may be, relative to similarly situated banking
organizations); (iv) any disruption of employee,
customer, supplier or other
similar relationships or other event or circumstance resulting from or
attributable to the execution or announcement
of this Agreement or the pendency
of the transactions contemplated hereby or by the
Related Agreements;
(v) any
changes made by Sellers in the
Business or other actions taken, delayed or
omitted to be taken by Sellers at the
request or with the
consent of
Purchaser
or any of its representatives; (vi) with respect to the Business,
any actions
(including, without limitation, any corrective
actions) taken or to be taken by
or against Sellers, or any penalties,
restrictions, regulations or fines imposed
on Sellers, in connection with the Written Agreement or the MOU as each is
in
effect as of the date hereof (but not
including any such actions, penalties,
restrictions, regulations or fines in connection with any amendment or
modification to the Written Agreement or the MOU after the date hereof
or any
other regulatory enforcement proceeding or any criminal
proceeding); or
(vii)
any decrease in the revenue of the Business occurring after the date of the
Agreement, whether or not resulting in a
Downward Adjustment pursuant to Section
2.10.
MOU
means that certain Memorandum of Understanding entered into by and
between UBOC and the OCC dated March 23,
2005.
NON-COMPETE TERM shall have the meaning given in Section
5.14.1.
NON-DISCLOSURE
AGREEMENT means that certain Non-Disclosure Agreement
dated as of May 20, 2005 by and between
UBOC and Purchaser.
NON-OVERLAP CUSTOMER
NOTICE has the meaning
given in the
Conversion
Protocols.
OCC means the Office of the Comptroller of the Currency or its
successors in interest.
OUTSIDE BUSINESS
UNIT CLOSING DATE shall have the meaning
given in
Section 2.7.4
OUTSIDE PRINCIPAL
CLOSING DATE shall have the meaning given in Section
2.7.3.
OVERLAP CUSTOMER
NOTICE has the meaning given in the Conversion
Protocols.
OWNED BUSINESS
INTELLECTUAL PROPERTY
means all Business
Intellectual
Property owned by Sellers and their
Affiliates.
OWNED BUSINESS IT
ASSETS means all Business IT Assets owned by Sellers
and their Affiliates. PARENT means UnionBanCal Corporation.
PARTIES means Sellers and Purchaser.
PATENTS means
patents,
patent
applications,
utility
model
registrations, statutory invention registrations, and industrial designs,
including reissues, substitutions, renewals, divisions, continuations,
8
<PAGE>
continuations-in-part, extensions, and reexaminations thereof, all inventions
disclosed therein and improvements thereto, all rights therein provided by
international treaties or conventions, and all other rights associated
therewith.
PERMITTED
ENCUMBRANCES, as to
any Purchased Asset,
means each of the
following: (i) Encumbrances for Taxes,
assessments and
governmental charges or
levies not yet due and payable;
(ii) Encumbrances arising out of judgments or
awards in respect of which Sellers or their Subsidiaries are in good faith
prosecuting an appeal or proceeding for review and in respect of which
it has
secured a subsisting stay of execution pending such appeal of
proceeding
and
which are disclosed or reserved against on the balance
sheet of the
Business;
(iii) zoning restrictions, easements,
licenses and other restrictions on the use
of real property or any interest therein, or minor irregularities in title
thereto, which do not, individually or in
the aggregate, adversely affect in any
material respect the current use and
enjoyment of such property by the Business
or the merchantability or the value of
such property or interest therein; (iv)
purchase money mortgages or other purchase money or vendor's Encumbrances
(including, without limitation, finance leases) to the extent that the
corresponding liability is disclosed or
reserved against on the balance sheet of
the Business, PROVIDED THAT no such Encumbrance shall extend to or cover any
property other than that so purchased;
(v) Encumbrances on Risk Assets (other
than loans) given to secure deposits and
other liabilities of Sellers arising in
the ordinary course of the operation of the
Business (including
those given to
secure borrowings, advances, or discount
window availability from any private or
governmental banking entity or any clearinghouse); and (vi) materialmen's,
mechanics', carriers', workmen's and
repairmen's liens and other similar common
law or statutory Encumbrances arising or
incurred in the ordinary course that do
not, individually or in the aggregate,
adversely affect in
any material respect
the use and enjoyment of any Purchased
Asset.
PERSON means any
natural person,
corporation,
partnership,
limited
liability company, trust, joint venture or
other entity.
POST-CLOSING PERIOD
means, with respect to any Business
Unit, any
taxable period beginning after the Effective Time with
respect to the Closing
Date therefor or, in the case of any tax period
which includes the
Effective
Time with respect to the Closing Date therefor, the portion of such period
beginning after the Effective time in
respect of such Closing Date.
PRE-CLOSING BUSINESS
OPERATIONS means the operation of a Business Unit
by Sellers or any of their Affiliates prior to the Effective Time with
respect
to the Closing Date therefor.
PRE-CLOSING PERIOD
means, with respect to any Business Unit, any
taxable period ending on or before the Effective Time with respect to the
Closing Date therefor or, in the case of
any taxable period which includes, but
does not end on, the Effective Time with respect to the Closing
Date therefor,
the portion of such period up to the
Effective Time in respect of such
Closing
Date.
PRINCIPAL BUSINESS UNIT means the Business conducted through
offices in
the United States of America.
PRINCIPAL CLOSING
means the Closing
related to the Principal Business
Unit.
PRINCIPAL CLOSING
DATE means the Closing Date with respect to the
Principal Closing.
PRINCIPAL EFFECTIVE
TIME means the
Effective Time of the Principal
Closing.
PRIVILEGED DOCUMENTS shall have the meaning given in Section
5.15.1.
PROHIBITED SERVICES shall have the meaning given in Section
5.14.1.
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<PAGE>
PROPOSAL shall have the meaning given in Section 5.12.
PROPRIETARY
INFORMATION means any
and all information
and material
disclosed by one Party or its Representatives, to the other Party or its
Representatives pursuant to the Non-Disclosure Agreement or otherwise in
connection with the transactions contemplated hereby and by the Related
Agreements or in the course of a Party's evaluation of, and due diligence
relating to, the transactions contemplated
hereby and by the Related Agreements,
or obtained by a Party through inspection or observation of the other Party's
properties, facilities or operations,
together with all
communications,
data,
reports, analyses, compilations, studies, interpretations, records, notes,
lists, financial statements or other materials or information prepared by a
Party or its Representatives that contain or otherwise reflect or are based
upon, in whole or in part, any Proprietary Information, or that reflect the
review of, interest in, or evaluation of
all or any portion of the transactions
contemplated hereby and by the Related
Agreements or the other Party's business,
whether tangible or intangible,
furnished or prepared
in writing, or in
oral,
graphic, electronic or any other form or manner and whether furnished or
prepared before, on or after the date
hereof. Proprietary Information, includes,
without limitation, any (a) trade secret, know-how,
idea, invention,
process,
technique, algorithm, program (whether in source code or object code form),
hardware, device, design, schematic, drawing, formula, data, plan, strategy,
client and customer lists, financial
statements or forecasts of a Party; and (b)
technical, engineering, manufacturing,
product, marketing, servicing, financial,
personnel and other such information or materials of a Party. In addition,
unless and to the extent a Party
consents in writing to
disclosure
or as such
disclosure is required by Legal Requirements, Proprietary Information shall
include (x) the proposed terms and
conditions of the
transactions
contemplated
hereby and by the Related Agreements (including any financial terms and
conditions) and the status thereof, and (y) the context and scope of the
Non-Disclosure Agreement, this Agreement
and the Related Agreements. Proprietary
Information shall not include information that: (i) is or becomes generally
available to the public other than as a
result of any disclosure or other action
or inaction by a Party in breach of this
Agreement (including
any disclosure or
other action or inaction by the
Representatives of a Party that could constitute
a breach of this Agreement if undertaken by
a Party itself); (ii)
is or becomes
rightfully known to a Party or its
Representatives from a Person (other than the
other Party or any of its Representatives) that is not known by such Party
to
owe a duty of confidentiality to the other Party or its
Representatives
with
respect to such Proprietary Information; or (iii) is or was already in the
possession of, or is or becomes known to, a
Party or any of its
Representatives
prior to any discussions between the Parties relating to the transactions
contemplated by this Agreement and the Related Agreements or is or was
independently developed by such Party or any of its Representatives without
violation of any obligation under this Agreement. The Parties acknowledge and
agree that certain Proprietary Information that is primarily related to,
primarily used in, or primarily held for
use in the Business will be transferred
from Sellers to Purchaser pursuant to the consummation of the transactions
contemplated hereby and by the Related
Agreements, and that,
as such, Purchaser
will become the owner of such Proprietary Information and will be accorded
the
same protections set forth in this Agreement
with regard to such
Proprietary
Information as Sellers are provided prior
to such transfer.
PURCHASED ASSETS shall have the meaning given in Section 2.1.1.
PURCHASER shall have the meaning given in the preamble.
PURCHASER'S APPROVALS shall have the meaning given in Section
4.5.
REFERENCE shall have the meaning given in Section 11.11(a).
REGISTERED means issued by, registered with, renewed by or the subject
of a pending application before any Governmental Authority or domain name
registrar.
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<PAGE>
RELATED AGREEMENTS means the Assumption Agreements, the Bills of Sale,
the Risk Participation Agreement, the
Trademark and Trade Name License Agreement
and the Business Employee Leasing
Agreement.
REPRESENTATIVE means
as to any Person, its directors, officers,
employees, agents, advisors or other representatives (including, without
limitation, financial advisors, banks, attorneys, accountants and their
respective Representatives).
RESTRICTED AREA shall have the meaning given in Section 5.14.2.
RETENTION METRIC
QUOTIENT shall have the meaning given in SCHEDULE
1(A).
RETENTION METRICS shall have the meaning given in SCHEDULE
1(A).
RETENTION PERIOD shall have the meaning given in SCHEDULE 1(A).
RISK ASSETS
means, as of any specified date (a) all cash, coin,
currency, bullion, amounts due from other financial
institutions,
investment
securities, loans, trading securities, securities purchased, customers'
liabilities on acceptances, Federal Funds sold and other items
appearing as
assets on the balance sheets of the Sellers,
as of such date,
relating to the
Business, other than premises, plant and equipment and Intangible
Assets; and
(b) all off-balance sheet items of the Sellers
relating to the
Business as of
such date accorded risk-weighting (at 0% or above) for purposes of
calculating
risk-weighted capital ratios in Appendix A of
Part 3 of Title 12 of the Code of
Federal Regulations, as applicable to national
banks, or reportable by such
banks on Schedule RC-L of the Consolidated
Reports of Condition and Income for a
Bank with Domestic and Foreign Offices -- FFIEC 031, including without
limitation those in the following categories: (i) unused commitments; (ii)
standby and commercial letters of credit; (iii) participations in acceptances
conveyed to others by the reporting bank; (iv) securities lent; (v) credit
derivatives; (vi) spot foreign exchange contracts; and (vii) all other
off-balance sheet assets required to be
reported on Schedule RC-L.
RISK ASSET
DOCUMENTS means, with respect to any Risk Asset, all
Contracts, documents and instruments governing, evidencing, guarantying,
insuring or securing such Risk Asset.
RISK PARTICIPATION
AGREEMENT shall have the meaning given in
Section
2.7.6.
RISK
PARTICIPATION
ASSET shall
the meaning given in the Risk
Participation Agreement.
SECTION 314(B) shall have the meaning given in Section 5.18.
SELLERS shall have the meaning given in the preamble.
SELLERS' FINANCIAL
STATEMENTS shall have
the meaning given in Section
3.5.1.
SELLERS' APPROVALS shall have the meaning given in Section
3.19.
SELLERS' RETENTION PROGRAM means the retention program established and
communicated by Sellers to the Business Employees in connection with the
transactions contemplated by this Agreement
providing additional
compensation
for those Business Employees who continue to be employed in the Business
immediately prior to the applicable
Employment Time and
otherwise meet Sellers'
requirements.
SELLERS'
SHUTDOWN DATE means with respect to each
Business Unit the
earlier of (i) the completion of the
Conversion with respect to all Customers of
such Business Unit and (ii) the later of (A)
sixty (60) days
11
<PAGE>
after the Closing of such Business Unit and
(B) March 31, 2006; PROVIDED THAT if
the Closing of a Business Unit (other than
the Principal Business Unit) does not
occur by the Outside Business Unit Closing
Date, then the Sellers' Shutdown Date
for such Business Unit shall mean the date
thirty (30) days after
the Outside
Business Unit Closing Date pursuant to
Section 2.7.4(b) and (c).
SEVERANCE BENEFITS
means payments or
benefits extended
under (i) any
applicable and effective written policy of Sellers applicable to any Business
Employee providing for payments or benefits
upon termination of employment
(other than qualified or non-qualified
retirement plans), all
of such policies,
as of the date hereof and as Updated as of the
Closing, being identified on
Schedule 3.13.1; (ii) any Contracts between
any Business Employee and Sellers or
their Affiliates, all such agreements as of
the date hereof and as Updated as of
the Closing being identified on Schedule 3.13.1, providing for payments or
benefits upon termination of employment
(other than qualified
or non-qualified
retirement plans); and (iii) any applicable Legal
Requirements with respect to
Business Employees engaged outside of the United
States providing for payments
or provision of benefits by Sellers upon
termination of employment.
SUBSIDIARY means any corporation, trust, partnership, joint venture
or
other entity of which 50% or more of the
voting interest or
ownership interest
is owned, legally or beneficially, by any
Person and its Affiliates.
SUBSTANTIAL DETRIMENT
means (i) any substantial impairment of the
benefits reasonably expected, as of the date hereof,
to be realized from
the
consummation of the transactions contemplated by this Agreement; or (ii) the
imposition of conditions that would require
the Purchaser or the Sellers, as the
case may be, to proffer to, or agree to,
sell, divest, lease, license, transfer,
dispose of or otherwise encumber or hold
separate, before or after the Effective
Time of any Closing, material assets, licenses, operations, rights, product
lines, businesses or their interest therein or any of their respective
Affiliates or to agree to any material changes or restriction on, or other
material impairment of the ability of
Purchaser or Sellers, as the case may be,
to own or operate, any such assets, licenses, product lines, businesses or
interests therein.
TAX (and, with correlative meaning "TAXES" and "TAXABLE") means any
net
income, alternative or add-on minimum tax,
gross income, gross receipts, sales,
use, ad valorem, transfer, franchise,
profits, license,
withholding,
payroll,
employment, excise, severance, stamp, value-added, consumption, occupation,
premium, property, environmental or windfall profit tax, custom duty,
unincorporated business, estimated or other tax, governmental fee or other
assessment or charge of any kind
whatsoever,
together with any
interest or any
penalty, addition to tax or additional
amount and any interest on such penalty,
addition to tax or additional amount,
imposed by any Tax Authority.
TAX AUTHORITY
means Governmental Authority responsible for the
imposition, assessment or collection of any
Tax (domestic or foreign).
TAX RETURNS
means any return, statement, declaration, notice,
certificate or other document that is or
has been filed with or submitted to, or
required to be filed with or submitted to, any Governmental Authority in
connection with the determination,
assessment, collection
or payment of any Tax
or in connection with the administration, implementation or enforcement of or
compliance with any Legal Requirement
related to any Tax.
TRADEMARK AND TRADE NAME LICENSE AGREEMENT shall have the meaning
given
in Section 2.7.6(c).
TRADEMARKS means
trademarks, service marks, certification marks, trade
dress, trade names, URL addresses, Internet domain names and logos,
symbols,
slogans and other indicia of source or origin,
all goodwill of the Business
symbolized thereby or associated
therewith,
all registrations and
applications
for registration thereof throughout the world, all
common-law rights
thereto,
all rights therein provided by
12
<PAGE>
international treaties or conventions, and all other rights associated
therewith.
TRADE SECRETS
means trade secrets, Proprietary Information and
confidential information and materials,
including,
without limitation,
trade
secrets, Proprietary Information and/or
confidential
information and materials
of the following nature: know-how,
technical, business,
marketing and financial
information and data, databases, processes and techniques, research and
development information, discoveries and inventions
(whether or not patentable
or reduced to practice), technology, formulae, processes, algorithms,
methodologies, drawings, schematics, business
methods, specifications, models,
designs, plans, proposals, pricing and cost
information, business
and marketing
plans and records, customer, client and
supplier lists and information, and all
rights in any jurisdiction to limit the use
or disclosure thereof.
TRANSFER TAXES shall mean all federal, state, local or foreign sales,
use, transfer, real property transfer, mortgage recording, stamp duty,
value-added, consumption or similar Taxes
that may be imposed in connection with
the transfer of Purchased Assets or
assumption of Assumed Obligations, together
with any interest, additions to Tax or penalties
with respect
thereto and any
interest in respect of such additions to
Tax or penalties.
TRANSFERRED BUSINESS
INTELLECTUAL PROPERTY
means Transferred Licensed
Business Intellectual Property and Transferred Owned Business Intellectual
Property.
TRANSFERRED BUSINESS
INTELLECTUAL
PROPERTY CONTRACTS means Business
Intellectual Property Contracts that
constitute Purchased Assets.
TRANSFERRED BUSINESS IT ASSETS means Business IT Assets that
constitute
Purchased Assets.
TRANSFERRED LICENSED
BUSINESS INTELLECTUAL PROPERTY means Licensed
Business Intellectual Property licensed pursuant to a Transferred Business
Intellectual Property Contract.
TRANSFERRED OWNED BUSINESS INTELLECTUAL PROPERTY means Owned Business
Intellectual Property that constitute
Purchased Assets.
TRUE-UP shall have the meaning given in Section 2.8.4.
UBOC shall have meaning given in the recitals.
UBOCI shall have the meaning given in the recitals.
UPDATED AS OF THE CLOSING means updated to take into account
changes
from the date of this Agreement in any
Business Unit with respect to the Closing
corresponding to such Business Unit.
U.S. DEPOSITS
means (i) any
"deposits"
(as such term is
defined in
Section 3(l) of the FDIA, 12 USC ss. 1813(l)) and (ii) any liabilities that
would be "deposits" (as so defined) but for
subparagraphs
(A), (B) or (C) of
said Section 3(l) of the FDIA.
WARN ACT shall mean
the Worker Adjustment
and Retraining Notification
Act.
WELFARE PLAN shall have the meaning given in Section
5.5(b)(iii).
WIN/LOSS ADJUSTMENT
means an adjustment to Conversion Period Combined
ADCR designed to exclude the effect of
specific customer
"wins" or "losses"
by
Purchaser that would affect ADCR during the
Conversion Measurement
Month. The
Win/Loss Adjustment is intended to neutralize
the effect of
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Purchaser "wins" (e.g., via development of
new business or merger or acquisition
activity unrelated to the transactions
contemplated
hereby) or "losses"
(e.g.,
losses of significant ADCR for reasons unrelated to the transactions
contemplated hereby, including customer losses or disposition of
businesses).
Customer wins and losses will be eligible for inclusion in the Win/Loss
Adjustment only if they exceed 7.5% of the
ADCR of any given Core Product.
WRITTEN AGREEMENT means that certain "Written Agreement" by and
between
UBOCI and the Federal Reserve Bank of New York,
dated October 18, 2004
(Docket
No. 04-028-WA/RB-EC).
ARTICLE II
TRANSFER AND ACQUISITION OF PURCHASED ASSETS
2.1 Purchased
Assets
2.1.1 PURCHASED
ASSETS. Subject to the other terms and
conditions of
this Agreement, at the Closing for each Business
Unit, with effect as of the
Effective Time therefor, Sellers shall sell, assign, convey, transfer and
deliver to Purchaser, and Purchaser shall purchase and
acquire from Sellers and
take assignment and delivery from Sellers
of, all of Sellers'
right, title and
interest (subject to Permitted Encumbrances) in and to all of the assets,
properties, Contracts (including Business
Leases), accounts and other rights of
Sellers that are primarily related to, primarily used in or primarily
held for
use in the conduct of the operations of the Business, other than the Excluded
Assets (collectively, for each Business Unit, the "Purchased Assets"). The
Purchased Assets include, without limitation, the following (except to the
extent they constitute Excluded Assets) assets of Sellers
primarily related to,
primarily used in or primarily held for use
in the conduct of the Business:
(a) all Customers;
(b) all Business
Leases including, without limitation, all
improvements and fixtures thereon;
(c) all tangible personal property, including, without
limitation,
furnishings, equipment, stationery, stores and
supplies;
(d) all assets, if any, that Purchaser elects to acquire
pursuant to Section 5.21;
(e) Books and
Records;
(f) all credits,
prepaid expenses,
advance payments,
security
deposits, prepaid items and duties to the extent related to
any Purchased
Asset and reflected on the Final Balance
Sheet;
(g) all Owned Business
Intellectual Property, Owned Business IT
Assets and Business Intellectual Property Contracts;
(h) all claims,
causes of action,
choses in action,
rights of
recovery, defenses or
counterclaims and
rights of set-off
of any kind (including
rights under and pursuant to all
warranties,
representations
and guarantees
made
by
suppliers of products, materials or equipment or components
thereof) relating
to any Purchased Assets or Assumed
Obligations; and
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(i) all guaranties,
warranties,
indemnities and similar rights
in favor of
Sellers or their Affiliates to the extent
related to any Purchased Asset.
2.1.2 CONSENTS
TO ASSIGNMENT. Anything in this Agreement to the
contrary notwithstanding, this Agreement shall not constitute an agreement
to
assign or transfer any Contract (including any Business Lease or License) or
other Purchased Asset or any claim or right or any benefit or obligation
thereunder or resulting therefrom if an
assignment or transfer thereof, without
the consent of a Governmental Authority or, unless otherwise
permitted by Legal
Requirements, a third party thereto, would constitute a breach or violation
thereof or impose any obligation or
liability on Sellers unless and until such a
consent is obtained, and prior to such time (but only
after the Effective Time)
the provisions of Section 5.10.2 shall
apply.
2.2 EXCLUDED ASSETS. Notwithstanding the provisions of Section 2.1.1,
Sellers
shall not sell, assign, convey, transfer or
deliver to Purchaser,
and Purchaser
shall not purchase, acquire or take assignment or delivery of, any of the
following assets, properties, Contracts (including Business
Leases), accounts,
Risk Assets or rights or any right, title or interest of Sellers therein
(collectively, the "Excluded Assets"), none of which shall be deemed to be
Purchased Assets:
(a) CASH. All cash and cash equivalents owned by Sellers or
their Affiliates for their own account;
(b) RISK ASSETS.
All Risk Assets
(including without limitation
all Brady Bonds and
all rights
or securities issued in
respect of or in
exchange for Brady Bonds, such as oil
recovery rights) and all Risk Asset Documents;
(c) TRADEMARKS.
All Trademarks that (i) contain the names,
initials or
acronyms "UnionBanCal Corporation," "Union
Bank," "Union
Bank of California," "Union Bank of
California
International,"
"UBOC," "UBOCI," "uboc.com" or
"uboc-i.com," or any non-English
counterpart,
transliteration or translation thereof, owned by, licensed
to or used by Sellers
or any of their
Affiliates
in the
conduct of the Business or (ii) are confusingly similar to
the foregoing,
along with all rights or causes of
action
for dilution,
infringement or misappropriation of, and all
rights to apply
for or register any of, the foregoing
rights;
(d) Excluded Books and
Records.
(i)
Books and Records
consisting of Tax records
(including Tax
Returns
and all notes,
worksheets,
files or documents relating
thereto) and all other data and information
with respect to Taxes;
(ii)
The minute
books from the meetings (or
consents in lieu
thereof) of the
directors
(including committees
thereof)
and
shareholders of
Sellers and the shareholder
records of Sellers;
(iii)
All proprietary or confidential business or
technical information,
records and policies
which relate generally
to Sellers and their
Affiliates, such as
accounting
procedures,
instructions,
organizational manuals
and
strategic plans;
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<PAGE>
(iv)
All Books and Records prepared in connection
with the sale of the Business, including
offers received from prospective purchasers
and any information relating to such offers;
(v)
All call reports of
Sellers and the general
ledger of Sellers as of the Effective Time;
(vi)
Suspicious activity
reports, reports of
investigation of
suspicious activity,
and
any other reports or documents that indicate
whether a suspicious
activity report was or
was not filed in a given case; and
(vii)
Books and Records the disclosure of which to
Purchaser is
not permitted by Legal
Requirements.
(e) CLAIMS.
All claims, causes of action, choses in action,
rights of recovery, defenses or counterclaims and rights of
set-off of any kind (including rights under and pursuant to
all warranties,
representations
and guarantees made by
suppliers of products, materials or equipment or components
thereof) relating
to any Excluded Assets or Excluded
Obligations;
(f) TAX REFUNDS. All of Sellers' claims for and rights to
receive Tax refunds attributable to the Pre-Closing Period;
(g) EMPLOYEE
CONTRACTS, ASSETS AND
RECORDS. All Employee Plans
or Contracts
(including without
limitation
Contracts of
insurance for
employee group medical, dental and life
insurance plans);
all assets of Sellers held for the
benefit of Business
Employees under any
Employee Plan or
Contract (which assets shall be retained by Sellers for the
benefit of
Business Employees unless and to the extent
transfer to Purchaser is expressly provided by Section 5.5
or required by
applicable
Legal Requirements); and all
personnel and labor relations records, in the case of any
of the foregoing
relating to Business Employees of Sellers
unless and to the extent transfer to Purchaser is expressly
provided by Section 5.5;
(h) THIS AGREEMENT.
All rights of Sellers
and their Affiliates
under this
Agreement,
the Related Agreements and the
Conversion Protocols;
(i) INSURANCE. All rights of Sellers
under insurance policies;
(j) LICENSES. All of
the Licenses;
(k) EXCLUDED
CONTRACTS. All of the Excluded Contracts;
(l) ASSETS RELATING TO
EXCLUDED ACCOUNTS. All Excluded Accounts
and all right, title and interest in and to Risk Assets and
other assets
arising
out of or related to Excluded
Accounts;
(m) STATUTORY
DEPOSITS. All Risk Assets (and interest
accrued
thereon) of
Sellers deposited with any Governmental
Authority in connection with the maintenance of any banking
or similar license,
which are set forth as
of the
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<PAGE>
date of this Agreement and as Updated as of the Closing on
SCHEDULE 2.2(M);
(n) EXCLUDED LEASES.
All of the Excluded Leases;
(o) TANGIBLE PERSONAL
PROPERTY. All tangible
personal property
(other than Business
IT Assets that
constitute
Purchased
Assets) located
on Leased Premises that are subject to
Excluded Leases;
(p) EXCLUDED
INTELLECTUAL
PROPERTY.
All of the Excluded
Business Intellectual
Property Contracts and
the Excluded
Business IT Assets.
(q) PRIVILEGED
INFORMATION. All
attorney client communications
with, and attorney
work product for,
Sellers with respect
to Excluded Assets or Excluded Obligations;
(r) OFAC FUNDS ON
HOLD. All funds
subject to hold
pursuant to
regulations of the
Office of Foreign Assets Control of the
U.S. Department of Treasury;
(s) NON-DISCLOSURE
AND CONFIDENTIALITY AGREEMENTS.
All
non-disclosure and confidentiality agreements entered into
by Sellers or any of their Affiliates in connection with
a
potential sale of the Business; and
(t) OPTIONAL
ASSETS. All assets described in Section
5.21 and
Section 5.23 unless Purchaser elects, pursuant to Section
5.21 and Section
5.23, to acquire all or any portion of
such assets;
(u) OTHER EXCLUDED
ASSETS. All assets,
properties,
Contracts,
accounts, and other rights set forth on SCHEDULE 2.2(U).
2.3 ASSUMED OBLIGATIONS. At each Closing, Purchaser shall assume the
following
liabilities and obligations of Sellers of
the Business Unit sold at such Closing
as of the Effective Time for such Closing (collectively, the "Assumed
Obligations"), and from and after the
Effective Time, Purchaser shall pay,
perform and discharge all Assumed Obligations as and when such Assumed
Obligations become due and owing:
(a) all liabilities and obligations set forth on or
reserved
for in the Final
Balance Sheet in the
amount and only to
the extent set forth on or reserved for thereon (for the
avoidance of doubt,
such liabilities and obligations shall
not include any liabilities for Taxes);
(b) all liabilities
and obligations incurred under Contracts
(including Business
Leases) that constitute Purchased
Assets of such Business Unit, but in each case excluding
any liabilities
or obligations to the
extent arising from
or relating to (i) any
breach or violation
by Sellers of
such Contracts
that occurred prior to the applicable
Effective Time,
(ii) the ownership or operation of the
Business prior to the
Effective Time other than to the
extent set forth on or
reserved for in the
Final Balance
Sheet, or (iii) any
Contract of the type required to be
listed on SCHEDULE
3.8 if such
Contract is not listed
on
SCHEDULE 3.8
and if the payment of liabilities or
obligations arising
under such Contract,
in Purchaser's
reasonable judgment,
are to any
17
<PAGE>
extent not
usual or customary in kind or amount in the
market for the goods or services furnished pursuant to such
Contract;
(c) all liabilities
and obligations incurred by the Business
Unit with respect to Accepting Employees to the extent such
liabilities and
obligations
are expressly assumed by
Purchaser pursuant to Section 5.5;
(d) all liabilities and obligations to the extent
arising out
of the ownership or operation of the Business Unit from and
after the applicable
Effective Time; PROVIDED THAT, except
for the liabilities described in any of Sections 2.3(a)-(c)
and 2.3(e),
this Section 2.3(d) shall apply only to
liabilities and
obligations
that relate to any
condition
existing as a result
of any action or failure to take
action by any Person
following the
applicable
Effective
Time; and
(e) all Taxes
expressly allocated to Purchaser under this
Agreement.
2.4 EXCLUDED OBLIGATIONS. In no event shall Purchaser have any liability
whatsoever for any liabilities and obligations other than the Assumed
Obligations (collectively, the "Excluded Obligations"). For
avoidance of doubt,
(i) U. S. Deposits shall constitute Excluded Obligations and (ii) all
liabilities and obligations to the extent arising out of the ownership or
operation of a Business Unit prior to the
applicable Effective
Time, including
liabilities or obligations that relate to
any condition existing
as a result of
any action or failure to take action by any
Person prior to the Effective Time,
except for liabilities and obligations
described in any of
Sections
2.3(a)-(c)
or 2.3(e), shall constitute Excluded
Obligations.
2.5 CLOSING BALANCE SHEET. Not later than the second Business
Day prior to each
Closing Date, UBOC will deliver to Purchaser a
balance sheet for the applicable
Business Unit(s) involved in such Closing as of the last day of the last
calendar month ended prior to such
second Business Day that will be prepared
from the Sellers' financial statements as of such time (which financial
statements will be prepared in accordance
with the Sellers' Financial Statements
and subject to the qualifications, assumptions and adjustments set forth on
SCHEDULE 3.5.2) and which will be adjusted to include only assets and
obligations that would be Purchased Assets
or Assumed
Obligations, as the
case
may be, from such Sellers' financial statements as of such Closing Date (the
"CLOSING BALANCE SHEET"). Each of the Purchased Assets and
Assumed
Obligations
for which Sellers' financial statements will be adjusted in
connection with the
preparation of the Closing Balance Sheet will be valued in
accordance with GAAP
and the Books and Records and consistently with past practice. Except for the
exclusions and adjustments described in this Section 2.5, the
Closing Balance
Sheet will not reflect any modifications or adjustments to such Sellers'
financial statements.
2.6 CONSIDERATION FOR PURCHASE OF THE
PURCHASED ASSETS.
2.6.1
CONSIDERATION AMOUNT AT PRINCIPAL CLOSING. The cash purchase
price for the Purchased Assets payable by Purchaser at the
Principal Closing
shall be equal to the sum of subparagraphs
(a) and (b) below:
(a) the Book
Value of the
Purchased Assets of the Principal
Business
Unit as reflected on the Closing
Balance Sheet
reduced by the Book Value of the Assumed Obligations of the
Principal Business Unit as reflected on the Closing Balance
Sheet; and
18
<PAGE>
(b) $245,000,000,
representing
goodwill associated with the
Business (the "Base Purchase Price").
2.6.2 CONSIDERATION
AMOUNT AT SUBSEQUENT
CLOSINGS. The cash
purchase
price for the Purchased Assets payable by
Purchaser at each Closing, other than
the Principal Closing, shall be equal to the Book Value
of the Purchased Assets
of the Business Unit subject to such Closing as reflected on the applicable
Closing Balance Sheet reduced by the Book
Value of the Assumed
Obligations of
the Business Unit subject to such Closing as
reflected on such Closing Balance
Sheet.
2.6.3 CLOSING CASH
CONSIDERATION AMOUNT.
The applicable cash purchase
price paid pursuant to Sections 2.6.1 and 2.6.2 above shall be referred to
herein, with respect to each Closing, as the "Closing Cash Consideration
Amount."
2.7 THE
CLOSING.
2.7.1 CLOSING
PROCEDURES. It is
contemplated
that the transactions
contemplated hereby shall be consummated in one or more Closings as set
forth
herein. The first Closing shall be the
Principal Closing,
and no other
Closing
shall occur until the Principal Closing shall have been consummated. To the
extent that the conditions for a Closing of one or more
Business Units other
than the Principal Business Unit can be satisfied at
the time of the Principal
Closing such other Business Units shall be sold (and such
other Closings shall
be consummated) concurrently with the Principal
Closing. Subject to the terms
and conditions of this Agreement,
each respective Closing of the purchase and
sale of each Business Unit under this
Agreement (the "Closing") shall take place
at 9:00 a.m., Pacific Time, on the applicable Closing Date at the offices of
Morrison & Foerster LLP, 425 Market
Street, San Francisco, California 94105.
With respect to each Business Unit, the "Closing Date" shall be the third
Business Day (or such earlier date
designated by the
Parties) after all of
the
conditions set forth in Articles VI and VII
with respect to such
Business Unit
have been satisfied or waived, or such other date as the
Parties may agree;
PROVIDED, HOWEVER, that the Principal Closing shall
occur at 9:00 am., Pacific
Time, on October 6, 2005, subject to the satisfaction or waiver of all of the
conditions set forth in Articles VI and VII
with respect to the
Closing of the
Principal Business Unit. Each Closing shall be effective as
of (i) 12:01 a.m.,
Pacific Time, with respect to the Principal
Closing, and (ii) 12:01 a.m. local
time at the location of the applicable Business Unit (for such
purposes, the
Principal Business Unit shall be deemed to be located
in New York, New
York),
with respect to each other Closing (the
"Effective Time").
2.7.2 REFERENCES
TO CLOSING AND
EFFECTIVE TIME.
Except as
otherwise
provided herein, or as the context may
otherwise require, any
provision of this
Agreement relating to or referencing a
"Closing," a "Closing Date," "Pre-Closing
Period," "Post-Closing Period" and
"Effective Time" shall be deemed to reference
the Closing, Closing Date, Pre-Closing
Period, Post-Closing Period and Effective
Time, as applicable, with respect to the acquisition by Purchaser of each
specific Business Unit and shall be deemed
to relate to the Business, or portion
thereof, comprehended within such Closing. References to "Purchased Assets"
(including references to applicable
"Business Leases" and
"Computer Programs")
herein shall mean those Purchased Assets assigned and transferred at each
Closing with respect to the Business
Unit that is the
subject of such
Closing.
Except as otherwise expressly provided in this Agreement or in any Related
Agreement, all actions required to be taken
at each respective Closing shall be
deemed to have occurred simultaneously at such Closing, and all documents
delivered at each Closing shall be deemed
to have been delivered
simultaneously
on the respective Closing Date.
2.7.3 OUTSIDE
PRINCIPAL CLOSING
DATE. With respect to the Principal
Business Unit, the Parties agree to use
reasonable best
efforts to satisfy the
conditions set forth in Sections 6.1 and 7.1
that are within their
respective
control as promptly as possible and in no
event later than November 30, 2005 (or
such later date as may be established
pursuant to the proviso to this sentence);
PROVIDED, HOWEVER, that if the
Principal
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Closing Date shall not have taken place on
or before November
30, 2005, such
date may be extended to a date specified by either Party that is
not later than
March 31, 2006 by such Party giving written notice to the other Party at
any
time during the month of November,
2005 if such first
Party reasonably believes
that the conditions to Principal Closing in Sections 6.1 and 7.1 of this
Agreement will be satisfied on or before
such extended
date (such date, as
it
may be extended, the "Outside Principal Closing Date"). Notwithstanding any
other provision of this Agreement,
if the Principal
Closing has not occurred by
the Outside Principal Closing Date, then
Sellers and Purchaser shall thereafter
have no duty to use any efforts to
effectuate such
Closing or to perform any of
their respective obligations with respect to any
assets or liabilities of such
Business Unit pursuant to the second
sentence of Section
5.10.2, and either
Party may terminate this Agreement upon
satisfaction of the conditions set forth
in Section 9.1(e).
2.7.4 OUTSIDE
BUSINESS UNIT CLOSING DATE. With respect to Business
Units other than the Principal Business Unit, the Parties agree to use
reasonable best efforts to satisfy the
conditions set forth in Sections 6.2 and
7.2 that are within their respective control as promptly as possible
and in no
event later than March 31, 2006 (the
"Outside Business Unit Closing Date").
Notwithstanding any other provision of this
Agreement to the contrary, if, after
the Principal Closing Date, any Closing with
respect to any such other Business
Unit has not been consummated on or before the Outside
Business Unit Closing
Date:
(a) Sellers and
Purchaser shall
thereafter have no duty to use
any efforts to effectuate such Closing;
(b) Sellers and
Purchaser shall cooperate to make arrangements
within thirty
(30) days after the
Outside Business
Unit
Closing Date to transfer to Purchaser, and Purchaser shall
assume, such
of the Purchased Assets and Assumed
Obligations associated
with such Business Unit(s), as can
then be transferred or assumed in accordance with
applicable Legal
Requirements
on the same economic
terms
and conditions
(including financial terms), and subject to
the same procedures,
as would prevail if the Closing for
such Business Units(s) had taken place;
(c) Sellers and
Purchaser shall cooperate to make arrangements
within thirty
(30) days after the
Outside Business
Unit
Closing Date to enable
Purchaser to hire (and/or lease
pursuant to the Business Employee Leasing Agreement) such
Business Employees
(as chosen by Purchaser in its sole
discretion) as are associated with such Business Unit(s) as
can then be
transferred
or leased in accordance with
applicable Legal
Requirements
on the same terms and
conditions (and otherwise in accordance with the Conversion
Protocols) as
would prevail under Section 5.5 if the
Closing for such Business Unit(s) had taken place;
(d)
subject to the
completion of the transfers and assumptions
contemplated by
subparagraphs (b) and
(c) above, Sellers
shall, at their own cost and expense, close and wind-up the
Business Units
(including the offices that constitute such
Business Units) with
respect to which such Closing has not
occurred, giving due
consideration
to applicable Legal
Requirements;
PROVIDED, HOWEVER, that Purchaser shall
assume any and all costs associated with terminating or
otherwise disposing
of any Business Leases that are not
Excluded Assets; and
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(e) the Final Cash
Consideration Amount paid in connection with
Closings consummated
prior to the time of such termination
shall be fully earned and non-refundable.
2.7.5 DELIVERABLES
AT EACH CLOSING.
At each Closing
(including
the
Principal Closing), the Parties will
deliver to one another the following funds,
documents and such other Contracts, instruments and documents as are required
under this Agreement to be executed and
delivered by the Parties:
(a) A wire
transfer to UBOC from
Purchaser of the
applicable
Closing Cash Consideration Amount in immediately available
funds to the account designated by UBOC;
(b) Written
documentation evidencing Sellers' Approvals for the
Business Unit associated with such Closing;
(c) Written
documentation
evidencing Purchaser's Approvals for
the Business Unit associated with such Closing;
(d) The Assumption
Agreement in the form of EXHIBIT A, pursuant
to which Purchaser shall assume the Assumed Obligations of
the Business
Unit associated with such Closing (the
"Assumption
Agreement");
(e) The Bill of Sale in the form of
EXHIBIT B, pursuant to
which Sellers
shall transfer to Purchaser the Purchased
Assets of the Business
Unit associated
with such Closing
(the "Bill of Sale");
(f) Assignments
of the Business Leases included in the
Purchased Assets applicable to such Business Unit, subject
to obtaining consents to such assignments;
(g) The delivery of Purchased Assets associated with such
Business Unit capable of being transferred by delivery; and
(h) Such other
instruments of transfer, assumptions, filings or
documents, in form and substance reasonably satisfactory to
Purchaser and Sellers,
as may be reasonably required to
give effect to this Agreement.
2.7.6 DELIVERABLES
AT THE PRINCIPAL CLOSING. In addition to the
deliverables required under Section 2.7.5,
at the Principal Closing, the Parties
will deliver to one another the following
instruments and documents:
(a) The Master Risk Participation Agreement in the form of
EXHIBIT C (subject to Purchaser providing Schedule A
thereto pursuant
to Section 5.22.1) between UBOC and
Purchaser (the "Risk Participation Agreement");
(b) The Business Employee Leasing Agreement in the form of
EXHIBIT D, pursuant to
which Purchaser
and Sellers shall
lease employees
to each other as more particularly set
forth therein (the "Business Employee Leasing Agreement");
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(c) The Trademark and
Trade Name License
Agreement in the form
of EXHIBIT E between
Sellers and Purchaser (the "Trademark
and Trade Name License Agreement"); and
(d) Written
assignments, in forms
to be mutually agreed by the
Parties, of the Intellectual Property Rights being assigned
to Purchaser
in accordance with this Agreement or any
Related Agreement.
2.8
TRUE-UP.
2.8.1 FINAL BALANCE SHEET. Within thirty (30) days after the
applicable
Closing Date, Sellers shall prepare and
deliver to Purchaser a balance sheet for
the Business Unit, as of the Effective Time
(the "Final Balance
Sheet"). The
Final Balance Sheet will be substantially
in the format of (and showing the same
categories of adjustments calculated consistently with) the Closing Balance
Sheet. The data in the Final Balance Sheet will be prepared using the same
accounting policies as used in the
determination of the
Closing Balance Sheet.
At the time Sellers deliver the Final
Balance Sheet, Sellers
will set forth the
computation of the Final Cash Consideration Amount and the True-up and
provide
to Purchaser the work papers and records
necessary for Purchaser to validate the
accuracy of the Final Balance Sheet and the computation of the Final Cash
Consideration Amount and the True-up,
and will otherwise make its financial
and/or accounting representatives available to representatives of
Purchaser to
respond to any questions or inquiries regarding the same. The "Final Cash
Consideration Amount" means (i) with respect to
the Principal
Closing for the
Principal Business Unit the sum of: (x) the
Book Value of the Purchased Assets
as reflected on the Final Balance Sheet for
the Principal
Closing, reduced by
the Book Value of the liabilities of the
Principal Business Unit as reflected on
the Final Balance Sheet for the Principal
Closing and (y)
$245,000,000 and (ii)
with respect to each other Closing other
than the Principal
Closing, the Book
Value of the Purchased Assets as reflected on the Final
Balance Sheet for such
Closing, reduced by the Book Value of the
liabilities
of the Business Unit
as
reflected on Final Balance Sheet for such
Closing.
2.8.2 MUTUAL RIGHT OF REVIEW. Each Party and its representatives
shall
have the right to review all of the other Party's work papers and any other
relevant financial and accounting
records to the extent
relevant to the
Final
Balance Sheet or the True-up.
2.8.3 DISPUTE RESOLUTION. If Purchaser disagrees with any
items on the
Final Balance Sheet or with the computation
of the True-up, Purchaser shall give
written notice to UBOC of such disagreement, stating such objection and a
reasonably detailed explanation of the reasons
therefor. Such notice
shall be
delivered on or before the 30th day after
delivery of the Final Balance Sheet to
Purchaser. Within 15 days following receipt
of such notice, UBOC
and Purchaser
shall submit to the Accounting Firm and to each other all of the material
written information upon which such Party's claims
regarding the Final Balance
Sheet and the True-up is based. The Accounting Firm may, but shall not be
required to, request a meeting of UBOC and
Purchaser and their
representatives
to discuss UBOC's and Purchaser's claims. The Accounting Firm may request
additional information from UBOC and/or Purchaser, and copies of any such
requested information shall also be provided
to the other Party to the dispute.
All materials provided by UBOC and
Purchaser to the Accounting Firm are referred
to herein as the "Accountants Dispute Work Papers." Both UBOC
and Purchaser and
their representatives shall have the right to review
all of either
UBOC's or
Purchaser's Accountants Dispute Work Papers, as the case
may be. Within thirty
(30) days after the Accounting Firm' receipt of all information
(including any
information requested by the Accounting Firm from UBOC or Purchaser), the
Accounting Firm shall provide as an expert
and not as an arbitrator its written
decision on the dispute between UBOC and Purchaser and shall issue the Final
Balance Sheet in a form consistent with its decision (which shall be
deemed to
be the Final Balance Sheet for all purposes
under this
Agreement)
and shall
compute the True-up based thereon.
The scope of the
review and determination of
the Accounting Firm with respect to the Final
Balance Sheet shall be limited to
the compliance of the Final
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Balance Sheet with the terms of Sections
2.8.1. The decision of the Accounting
Firm under this Section 2.8.3 shall be
final and binding on UBOC and Purchaser.
The professional fees of the Accounting
Firm shall be shared equally between the
UBOC and Purchaser. If Purchaser does not
timely dispute the Final Balance Sheet
or the computation of the True-up in accordance
with this Section,
the Final
Balance Sheet prepared by the UBOC shall be
deemed to be the Final Balance Sheet
and the True-up as computed by UBOC shall
be deemed to be the True-up.
2.8.4 PAYMENT OF TRUE-UP. For each Business Unit, the
"True-up" shall
be equal to the amount by which the Final
Cash Consideration
Amount exceeds (or
is less than) the Closing Cash
Consideration Amount.
Within five Business
Days
after the earlier of (x) if Purchaser
does not timely
dispute the Final Balance
Sheet or the computation of the True-up on or before the
thirtieth (30th)
day
after the delivery of the Final Balance Sheet under Section 2.8.1, such
thirtieth (30th) day and (y) the
issuance of the Final Balance Sheet by the
Accounting Firm under Section 2.8.3, a settlement between UBOC and Purchaser
will be made by wire transfer of
immediately available funds as follows:
(i)
Purchaser shall
pay to UBOC the
amount by which the Final Cash
Consideration
Amount exceeds
the
Closing Cash
Consideration
Amount;
or
(ii)
UBOC
shall pay to Purchaser the
amount by which
the Closing Cash
Consideration
Amount exceeds
the
Final Cash Consideration Amount.
2.8.5 INTEREST. Any
amount due pursuant to Section 2.8.4 shall include
interest thereon from the applicable Closing Date through the payment date
calculated at the Contract Interest Rate
determined as of the Closing Date.
2.9 CONTINGENT
PAYMENT.
2.9.1 CALCULATION
OF CONVERSION
PERCENTAGE.
Within twenty (20)
days
after the Conversion Measurement Month (the "Conversion
Percentage
Calculation
Date"), Purchaser shall prepare and deliver to UBOC a calculation of the
Conversion Percentage. At the time Purchaser delivers the
Conversion Percentage
calculation to UBOC, Purchaser will provide to UBOC the
work papers and records
necessary for UBOC to validate the accuracy
of the calculations
regarding the
Conversion Percentage, and will otherwise make its
financial and/or accounting
representatives available to
representatives of UBOC to respond to any questions
or inquiries regarding the same. Each Party will have the right to
review the
other's work papers and any other
relevant financial and accounting records
relevant to the calculation of the
Conversion Percentage. If UBOC disagrees with
Purchaser's calculation of the Conversion
Percentage, then the
Parties agree to
follow the dispute resolution procedures
set forth in Section 2.8.3.
2.9.2 PAYMENT OF CONTINGENT PAYMENT. On the earlier of (x) if UBOC
does
not timely dispute Purchaser's calculation of the Conversion
Percentage,
the
Conversion Percentage Calculation Date or (y) the issuance of the final
Conversion Percentage by the Accounting Firm pursuant to Section 2.9.1 (the
"Contingent Payment Date"), Purchaser shall pay to UBOC by wire
transfer of
immediately available funds the contingent payment (if any) set forth in
SCHEDULE 2.9.2 (such applicable payment,
the "Contingent
Payment") based on the
applicable Conversion Percentage (as finally determined
in accordance with the
procedures set forth in this Section 2.9)
set forth in SCHEDULE 2.9.2.
2.10 DOWNWARD
ADJUSTMENT. The Base
Purchase Price shall be adjusted
downward (the "Downward Adjustment") based
on the amount of downward adjustment,
if any, applicable to the Final
Retention Percentage as reflected on
SCHEDULE
2.10; provided that if the Final Retention Percentage is
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calculated to be a percentage otherwise requiring a Downward Adjustment to be
made, the Parties shall cooperate in good faith to
determine the impact of any
holidays during the Retention Period and to make an appropriate
adjustment to
the Initial Retention Percentage.
UBOC shall pay to the
Purchaser the amount of
the Downward Adjustment, if any, on the
Contingent Payment Date.
2.11 ALLOCATION
OF CONSIDERATION. The Parties agree to allocate
the
Closing Cash Consideration Amount, the Final Cash Consideration Amount, the
Contingent Payment and other consideration payable hereunder (as possibly
adjusted pursuant to Section 2.10 with respect to the
Principal Closing) and
Assumed Obligations among the Purchased
Assets as set forth on SCHEDULE 2.11. If
the aggregate consideration paid by Purchaser to the Sellers under this
Agreement is more or less than the value
ascribed to the Purchased Assets as set
forth on SCHEDULE 2.11, the difference
shall ratably increase or decrease all of
the amounts set forth under the heading
"Class VII Assets" on
SCHEDULE 2.11 and
SCHEDULE 2.11 shall be deemed to reflect
such adjustment. The
allocation of the
Purchase Price and Assumed Obligations set
forth on SCHEDULE 2.11 is intended to
comply with the requirements of Section 1060 of the Code as well as
similar
provisions of applicable state and non-U.S.
law. The Parties
covenant and agree
that (i) such allocation was determined in an arm's length
negotiation
among
unaffiliated Persons, and none of the Parties shall take
a position on any Tax
Return (including IRS Form 8594), before any Tax Authority or in any
judicial
proceeding that is in any way inconsistent with such allocation without the
written consent of the other parties to
this Agreement or
unless
specifically
required pursuant to a determination by an
applicable Tax Authority; (ii) they
shall cooperate with each other in
connection with the
preparation,
execution
and filing of all Tax Returns related to
such allocation;
and (iii) they
shall
promptly advise each other regarding the
existence of any tax audit, controversy
or litigation related to such
allocation.
2.12 SET-OFF.
Except with
respect to the payment
of the Closing Cash
Consideration Amount due at the Principal
Closing (which amount shall be paid by
Purchaser in full, without set off, recoupment or counterclaim), the Parties
shall have the right to set off against the
payment of any other
Closing Cash
Consideration Amount, the True-Up, the Contingent Payment and the Downward
Adjustment any claim that the payor may have
against the payee in accordance
with the following provisions:
(a) If Sellers or
Purchaser,
as the case may be,
elects to
exercise their or its set off rights
hereunder, such Party
shall give the other
Party written notice thereof, which notice shall include the
amount proposed to
be set off and shall set forth, in
reasonable detail, the basis of the claim and
the circumstances giving rise to the
alleged entitlement to such set off.
(b) The Parties shall
submit any dispute
arising out of the
set off to the dispute resolution
procedures set forth in Section 11.5 below.
(c) To the extent
that there is a final
determination
in a
proceeding brought pursuant to this Agreement
that a Party making a set off was
not entitled to recover from the other Party on the claim
as to which the set
off was taken, such first Party shall
promptly pay to the other Party the amount
so determined to have been incorrectly set off, plus interest
calculated from
the date such payment was due until the
date payment for such amount is made, at
a per annum rate equal to the Contract
Interest Rate.
2.13 TAX TREATMENT OF CONTINGENT PAYMENTS AND DOWNWARD ADJUSTMENTS.
If
(i) Purchaser pays UBOC a Contingent
Payment or (ii) UBOC
pays Purchaser for a
Downward Adjustment, in either case, each of UBOC and
Purchaser agree that for
United States federal income tax purposes,
a portion of such
Contingent Payment
or Downward Adjustment will be treated as interest
income (in the case of
the
payee) and as an interest expense (in the case of the
payor), as determined
by
the Parties in accordance with Code Section
483 and the regulations thereunder.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLERS
Sellers hereby
represent and warrant as of the date hereof
and as of
each Closing (to the extent reasonably
applicable to such
Closing and except to
the extent that such representation and warranty is
made as of a specific date,
in which case such representation and warranty shall be as of such specific
date) that:
3.1 ORGANIZATION OF UBOC. UBOC is a national banking association, validly
existing and in good standing under the
federal laws of the United States. UBOC
has full corporate power and authority to
conduct the portion of the Business as
it is now being conducted. As of the date of this Agreement, UBOC is duly
licensed to conduct the portion of the Business that it conducts through
branches and representative offices in the jurisdictions set
forth on SCHEDULE
3.1, and such jurisdictions constitute each jurisdiction in which UBOC is
required to be so licensed as a result of the nature of the portion of the
Business it conducts or the ownership or use of property associated with its
portion of the Business.
3.2 ORGANIZATION OF UBOCI. UBOCI is a corporation
duly organized and
validly
existing and in good standing under Section 25A of the Federal
Reserve Act and
has full corporate power and authority to
conduct the portion of the Business as
it is now being conducted by UBOCI.
As of the date of this
Agreement, UBOCI
is
duly licensed to conduct the
portion of the
Business that it conducts at its
principal office in New York, and such jurisdiction constitutes the only
jurisdiction in which UBOCI is required to be so licensed as a result of
the
nature of the portion of the Business
that it conducts or
the ownership or
use
of property associated with its portion of
the Business.
3.3 ORGANIZATION OF LIMITADA. Limitada is a
limited liability company (SOCIEDADE
LIMITADA) duly organized and validly existing and in good standing
under the
laws of Brazil and has full corporate power
and authority to conduct the portion
of the Business as it is now being
conducted by Limitada. As of the date of this
Agreement, Limitada is duly licensed to
conduct the portion of the Business that
it conducts at its principal office in Sao Paulo, and such jurisdiction
constitutes the only jurisdiction in which Limitada is required to be so
licensed as a result of the nature of the portion of the Business that it
conducts or the ownership or use of
property associated
with its portion of the
Business.
3.4 ENFORCEABILITY. Sellers have full corporate power
and authority to execute
and to deliver this Agreement and the Related Agreements to which they are a
party, and to carry out the transactions contemplated herein and therein.
Sellers have taken all necessary
corporate action to authorize their
execution
and performance of this Agreement and the
Related Agreements to which they are a
party. This Agreement is, and the Related
Agreements upon execution and delivery
by Sellers will be, the valid and binding
obligation
of Sellers,
enforceable
against Sellers in accordance with their terms under the laws of
California,
except as such enforceability may be limited by laws
affecting the rights
and
remedies of creditors and applicable
principles of equity
(the
"Enforceability
Exceptions"). The execution, delivery and
performance of this Agreement and the
Related Agreements by Sellers will not,
with or without the giving of notice or
passage of time or both, (i) conflict with, result in a default, right to
accelerate or loss of rights under, or result in the creation of any lien,
charge or encumbrance pursuant to any
provision of any mortgage, deed of trust,
lease, license agreement or other agreement to
which Sellers are a party or by
which they are bound or affected, (ii) conflict with or result in a default
under any provision of the articles of
incorporation or
by-laws of Sellers,
or
any effective resolution of the directors or
stockholders of Sellers, or (iii),
subject to the receipt of Sellers' Approvals, conflict with or result in a
violation of any Legal Requirement
applicable to Sellers.
3.5 FINANCIAL
STATEMENTS.
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<PAGE>
3.5.1 DELIVERY OF FINANCIAL STATEMENTS. UBOC has delivered to
Purchaser
the following financial statements: (i) the unaudited PRO FORMA
consolidated
balance sheets of the International Banking
Group based on UBOC's General Ledger
Report 310 as of December 31, 2003, December 31, 2004 and June 30, 2005;
and
(ii) the unaudited PRO FORMA consolidated statements of income of the
International Banking Group based on UBOC's OFSA
Internal Management
Reporting
System for the fiscal years ended
December 31, 2003 and 2004, and for the six
months ended June 30, 2005 (collectively,
"Sellers' Financial Statements").
3.5.2 SELLERS' FINANCIAL STATEMENTS. Except as expressly provided
in,
and subject to the qualifications, assumptions and adjustments set forth, on
SCHEDULE 3.5.2, Sellers' Financial Statements fairly present in all material
respects the financial condition and results of
operations of the International
Banking Group as a whole at the dates
thereof and for the
periods referred
to
therein, all in accordance with GAAP
subject to the qualifications, assumptions
and adjustments set forth on SCHEDULE
3.5.2; PROVIDED,
HOWEVER, that Sellers'
Financial Statements do not contain statements of changes in stockholders'
equity and cash flow and footnote
disclosure and are subject to normal recurring
year-end adjustments that are not,
individually or in the aggregate, material to
the financial condition or results of operation of the Business or to
any of
Sellers' Financial Statements. Subject to the qualifications,
assumptions and
adjustments set forth on SCHEDULE 3.5.2,
all of the liabilities of a nature that
are required to be included in a
consolidated balance sheet of the International
Banking Group prepared in accordance with
GAAP or in the notes thereto have been
reflected or disclosed in Sellers'
Financial Statements as of June 30, 2005,
except for liabilities (contingent or otherwise) (a) incurred since June 30,
2005 in the ordinary course of business, (b) incurred in connection with the
transactions contemplated by this Agreement,
or (c) as would not
reasonably be
likely to be, individually or in the aggregate,
material to the
International
Banking Group.
3.5.3 BASELINE SELLERS
ADCR. The Baseline Sellers ADCR shall be a true
and correct statement of the ADCR of the
Business generated
during the Baseline
Period and shall be derived from the daily
internal performance
reports used by
the management in the operation of the
Business for the Baseline Period, which
reports were prepared consistently with
past practice.
3.6
ASSETS.
3.6.1 CUSTOMERS.
SCHEDULE 3.6.1 is a true and complete list of all
Business accounts of Customers as of the date
hereof, and SCHEDULE 3.6.1 as
Updated as of the Closing will be a true
and complete list of
all Customers as
of the Closing. Except as set forth on SCHEDULE
3.18, Sellers have administered
and processed all Customers' transactions in accordance with the applicable
Legal Requirements and Sellers'
customary business practices in all material
respects. Except for Risk Assets,
Contingent Risk
Liabilities,
term-deposits,
and other assets or liabilities
created out of the
Sellers' relationship
with
Customers, all of which terminate in
accordance with the terms of the Risk Asset
Documents or other Contracts governing such
assets or liabilities,
the services
provided by the Sellers to the Customers in connection with the Business
(including demand-deposits maintained by Customers with Sellers) and other
aspects of the Business relationship between Customers and the Sellers are
terminable by any party thereto at any time without
liability or
obligation to
any Person. As of the date hereof, to the
Knowledge of Sellers,
no Customer has
given actual notice of its intention to cease being a
Customer. The Books
and
Records included in the Purchased Assets with respect to any Customer are
complete in all material respects.
3.6.2 RISK
ASSETS. Except for those Risk Assets disposed of or
liquidated in the ordinary course since June 30, 2005,
each Risk Asset of
the
Business as of June 30, 2005, and each Risk
Asset of the Business
originated or
acquired after June 30, 2005, is or will be as of the
Closing evidenced by
appropriate and sufficient documentation and constitutes the legal,
valid and
binding obligation of the obligor named
therein, subject to
the Enforceability
Exceptions. All such Risk Assets are as of the
date hereof,
and will be as of
such Closing (other than Risk Assets since disposed of or paid off in the
ordinary course), free and clear of any
Encumbrances; PROVIDED
THAT Risk Assets
other than loans, letters of credit,
bankers' acceptances
and
26
<PAGE>
placements may be subject to Permitted
Encumbrances.
SCHEDULE 3.6.2 sets
forth
as of July 31, 2005, and SCHEDULE 3.6.2 as Updated as of the Closing
will set
forth as of the latest completed fiscal
quarter prior to the Closing associated
with each Business Unit, a complete list of all Customers that maintain Risk
Assets (including Contingent Risk Assets) with the Business
Unit sold at such
Closing and the balances therefor as of
such dates.
3.6.3 CONTINGENT RISK ASSETS AND CONTINGENT RISK LIABILITIES.
SCHEDULE
3.6.2 sets forth as of July 31, 2005 the
Contingent
Risk Assets and
Contingent
Risk Liabilities of the Business, and SCHEDULE 3.6.2 as Updated as of the
Principal Closing will set forth, as of the last day of the
calendar month
preceding the Principal Closing,
the Contingent Risk
Assets and Contingent Risk
Liabilities of the Business.
3.6.4 OWNED REAL PROPERTY. Sellers do not own any real property
used in
connection with the Business.
3.6.5 LEASED REAL PROPERTY. SCHEDULE 3.6.5(A) identifies all Business
Leases covering real property located outside of the United States as of
the
date hereof and as of the Closing (as
Updated as of the
Closing) and states the
date and parties to the applicable lease or sublease and the location of the
premises covered thereby. Except as set forth on SCHEDULE
3.6.5(B) as of the
date hereof and as of the Closing (as
Updated as of the
Closing), there are
no
material defaults or material breaches
under the Business Leases that constitute
Purchased Assets, and no event has occurred
which, with the giving of notice
would constitute a material breach by Sellers of or a material default by
Sellers under any of such Business Leases, provided that as to defaults and
breaches by parties to such Business Leases other than Sellers or any of its
Affiliates, the only defaults and breaches
required to be disclosed on SCHEDULE
3.6.5(B) are those of which Sellers have
Knowledge. Each of the
Business Leases
that constitute Purchased Assets is enforceable by and against
Sellers, as
applicable, in accordance with its terms, subject to the Enforceability
Exceptions. Sellers, as applicable, have valid leasehold interests in the
premises covered by such Business Leases (the "Leased Premises"), and such
Business Leases are free and clear of any
Encumbrance,
other than Permitted
Encumbrances. To Sellers' Knowledge, no
condition in the Leased Premises exists
that could give rise to any suit,
claim, action or proceeding by any Person
or
Governmental Authority against Sellers or
Purchaser as a result of violations of
any Environmental Laws. To Sellers'
Knowledge, there currently does not exist on
or in the Leased Premises or on or beneath
the real property of which the Leased
Premises are a part any Hazardous Materials in material violation of or
non-compliance with any Environmental Laws.
Neither Sellers nor their Affiliates
have received any written notice of any such violation from any Governmental
Authority.
3.6.6 PERSONAL
TANGIBLE PROPERTY.
SCHEDULE 3.6.6(A) sets
forth as of
June 30, 2005 a complete list of tangible
personal property (other than cash)
that constitutes Purchased Assets as if such date were the
applicable Closing
Date, together with a description of the premises at which such tangible
personal property is located. Except as set
forth on SCHEDULE 3.6.6(B) as of the
date hereof and as of the Closing (as
Updated as of the
Closing), Sellers
have
good and marketable title to all of their respective Purchased Assets
constituting tangible personal property reflected as Purchased Assets in
the
Sellers' Financial Statements and to such Purchased
Assets acquired after June
30, 2005 (other than assets since
disposed of in the
ordinary course) free
and
clear of all Encumbrances other than Permitted Encumbrances, and upon each
Closing, Sellers shall transfer good and
marketable title to
their respective
Purchased Assets constituting tangible personal property to
Purchaser free and
clear of Encumbrances other than Permitted
Encumbrances.
3.6.7 BUSINESS AND PURCHASED ASSETS. All of the Purchased Assets are
owned or leased, as the case may be, by the
respective Sellers and
no Affiliate
of Sellers owns any Purchased Assets. The
Business is conducted by Sellers, and
no Affiliate of Sellers conducts the
Business. All of the Business Employees are
employees of the respective Sellers,
and no Affiliate of
Sellers employs any of
the Business Employees.
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3.7 LITIGATION. Except as set forth on
SCHEDULE 3.7 as of the date hereof and as
of the Closing (as Updated as of the Closing), there is no litigation,
arbitration or other proceeding or, to
Sellers' Knowledge, investigation, of any
court or other Governmental Authority pending or, to Sellers' Knowledge,
threatened against Sellers in connection with
the Business seeking or asserting
(i) damages in excess of $50,000,
(ii) injunctive relief or other mandatory
relief that would restrict the business operations of the Business
(including
the performance by the Business of any
obligations
arising in connection
with
any Risk Asset), (iii) to revoke any License, or (iv) an unsafe or unsound
banking practice or a material violation of
any Legal Requirement. Except as set
forth on SCHEDULE 3.7 as of the date hereof
and as of the Closing (as Updated as
of the Closing), no Seller is a party to and is not bound by any order,
judgment, injunction, decree or settlement agreement under which it may have
continuing obligations with respect to the Business and which
may restrict or
affect the current operations of the Business.
There is not pending
any action
against Sellers that may reasonably be expected to have the effect of
preventing, delaying or making unlawful the
consummation
of the transactions
contemplated by this Agreement and the Related Agreements. To Sellers'
Knowledge, no such proceedings have been
threatened.
3.8 CONTRACTS. Except as provided in this
Section 3.8, SCHEDULE 3.8(A) as of the
date hereof and as of the Closing (as
Updated as of the Closing) sets forth all
of the following Contracts with respect to the Business (specifying where
applicable the Business Unit to which such
Contract principally relates):
(a) Contracts the
performance
of which is expected
to involve
consideration payable
subsequent
to the date of this
Agreement in excess of
$100,000 in the twelve
(12) months
from and after the Principal Closing;
(b) Contracts which
restrict in any material respect or contain
material limitations
on the ability of Sellers to freely
conduct any line of business;
(c) Contracts
pursuant to which any Encumbrance, other than
Permitted
Encumbrances, is
placed or imposed on any
Purchased Assets;
(d) material Business
Intellectual Property Contracts;
(e) Contracts that
constitute Purchased
Assets that relate
to
the acquisition
or disposition, outside of the ordinary
course of business
consistent with past
practice, of any
business (whether by merger, sale of stock, sale of assets
or otherwise);
(f) Contracts
relating to
indebtedness
for borrowed money
or
the deferred
purchase price of property (in either
case,
whether incurred,
assumed, guaranteed or secured by any
asset) entered into in connection with the Business, except
any such agreement with an aggregate outstanding principal
amount not exceeding $100,000;
(g) partnership or
joint venture agreements of Sellers relating
to the Business; or
(h) any other
material Contract relating to the Business not
terminable upon sixty (60) days' written notice.
SCHEDULE 3.8(A) excludes (i) Employee Plans or Contracts, (ii) Risk Asset
Documents and Contracts evidencing or memorializing deposits or other
liabilities reflected on Sellers' Financial
Statements or reflecting Contingent
Risk Liabilities, (iii) Business Leases and
(iv) Contracts constituting Excluded
Assets. True and
28
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correct copies of the written Contracts set forth on SCHEDULE
3.8(A) have been
provided to Purchaser and accurate
written descriptions of any oral Contracts
