Hi
Place your clip on Video Track1
Click the FX box on the clip and select POSITION
Undock the preview pane so you can see things clearer.
You need to move the clip DOWN to remove the overlapped area.
Grab the Top of the box and drag the frame down until the overlapped portion is just out of the frame.
The Vertical value will be about 6.5 Horizontal value =0
Close the effects window and the preview pane.
Now place the same clip on the overlay track and drag it left so it lines up with the clip on Track1.
You now need to move the overlay clip UP so the overlapped portion is in the space made at the top of the clip on Track 1
Click the FX box on the overlay clip and select POSITION.
Undock the preview pane so you can see things clearer.
Grab the Bottom of the frame and drag it up.
As it moves you will see Track 1 appear in the preview
Stop when the chequerboard area appears and match the join as neatly as possible.
The vertical value will be 100-6.5
The horizontal value should be 0
EDIT........Sorry hadn't noticed c-major had replied with the same solution.
Nat