Exhibit 10.1
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BRANCH PURCHASE AND ASSUMPTION AGREEMENT
This Agreement, dated as of November 1, 2006 is made by and between
Sun National Bank, a national banking association organized under the laws of
the United States of America and having its principal place of business in
Vineland, New Jersey ("Seller"), and City National Bank of New Jersey, a
national banking association chartered under the laws of the United States and
having its principal place of business in Newark, New Jersey ("Buyer").
ARTICLE I. DEFINITIONS
1.1 Certain Defined Terms.
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Some of the capitalized terms appearing in this Agreement are
defined below. The definition of a term expressed in the singular also applies
to that term as used in the plural and vice versa.
"Affiliate" means a Person that directly or indirectly, through one
or more intermediaries, controls, is controlled by, or is under common control
with, a specified Person, except in those cases where the controlling Person
exercises control solely in a fiduciary capacity.
"Amount of Deposit Premium" has the meaning set forth in Section 3.1
of this Agreement.
"Amount of Loan Premium" has the meaning set forth in Section 3.1 of
this Agreement.
"Assets" has the meaning set forth in Section 2.1 of this Agreement.
"Assignment" shall mean, with respect to the Leased Realty, each
landlord's written consent to the assignment and assumption of the lease related
to the Leased Realty or a certificate of estoppel with respect to the remaining
term of the lease with respect to the leased Realty for the benefit of Buyer
with respect to the Branch.
"ATM" means automatic teller machine.
"Benefit Plan" means any pension, profit-sharing, or other employee
benefit, fringe benefit, severance or welfare plan maintained by or with respect
to which contributions are made by, Seller or any of its Affiliates with respect
to Seller's employees.
"Branch" means the branch office of Seller located at 1701 Market
Street, Philadelphia, Pennsylvania 19103.
"Branch Cash" means cash on hand at the Branch, including vault
cash, teller drawer cash, petty cash and ATM cash.
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"Business Day" means any Monday, Tuesday, Wednesday, Thursday or
Friday on which Seller is open for business.
"Closing" means consummation of the purchase of the Assets by Buyer
and the assumption of the Liabilities by Buyer.
"Closing Date" has the meaning set forth in Section 9.1 of this
Agreement.
"Code" means the Internal Revenue Code of 1986, as amended.
"Deposit Accounts" means the deposit accounts at the Branch, the
balances of which are included in the Deposits or would be so included if the
Deposit Account had a positive balance.
"Deposits" or "Deposit Liabilities" means all deposits (as defined
in 12 U.S.C. Section 1813(l)) which are booked at the Branch on the Closing
Date, including in each case accrued but unpaid interest and both collected and
uncollected funds, but excluding (i) deposits held in accounts for which Seller
acts as fiduciary (other than deposits held by Retirement Plans that are
transferring from Seller to Buyer in accordance with this Agreement), (ii)
deposits constituting official checks, travelers checks, money orders or
certified checks, and (iii) the excluded deposit accounts described in Section
2.2(a) or otherwise set forth on Schedule 2.2(a) ("Excluded Deposits" shall
refer to excluded deposits referred to at (i), (ii), and (iii).
"Dispute Resolver" means an independent accounting firm or other
independent third-party mutually acceptable to Buyer and Seller to act as
Dispute Resolver; provided, however, that if the parties are unable to agree
upon the selection of such Dispute Resolver within thirty (30) days of the
initial request by either party to choose such Dispute Resolver, then the
Dispute Resolver shall be chosen, or the dispute resolved, in accordance with
the arbitration provisions set forth in Section 11.3
"Encumbrances" means all mortgages, claims, charges, liens,
encumbrances, easements, limitations, restrictions, commitments, security
interests, pledges or other similar charges or liabilities, whether accrued,
absolute, contingent or otherwise, except any of the forgoing: (i) for Taxes not
yet due, (ii) that is a lien of a landlord, licensor, carrier, warehouseman,
mechanic, materialsman, or any other statutory lien, in each case arising in the
ordinary course of business, (iii) that otherwise does not materially detract
from the value of the property as now used or materially interfere with the
present use or anticipated continuance of such use of the property, or (iv) to
the extent created by or arising from actions of Buyer.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended.
"ERISA Affiliate" means any entity that is considered one employer
with Seller under Section 4001 of ERISA or Section 414 of the Code.
"Equipment Leases" means those operating and financial leases and
conditional
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sales contracts covering Fixed Assets which Seller may assign to Buyer without
restriction or with the lessor's written consent.
"Federal Funds Rate" means, for any day, the rate per annum
(expressed on a basis of calculation of actual days in a year) equal to the
"near closing bid" federal funds rate published in The Wall Street Journal on
the Business Day following the Closing Date.
"Fixed Assets" means all fixtures (including signage poles),
leasehold improvements, furnishings, vaults, equipment (including, for example,
all security equipment and ATMs, but excluding any other computer and
telecommunications equipment), supplies (other than forms and other supplies
which bear Seller's name or logo), and other personal property, that are owned
or (to the extent of Seller's interest as lessee) leased by Seller, that are
located at the Branch on the Closing Date, as detailed on Schedule 2.1(a).
"FDIC" means the Federal Deposit Insurance Corporation.
"Governmental Entity" means any government or any agency, bureau,
board, commission, court, department, official, political subdivision, tribunal
or other instrumentality of any government having authority in the United
States, whether federal, state or local.
"Hazardous Material" means any substance presently listed, defined,
designated or classified as hazardous, toxic, radioactive or dangerous or
otherwise regulated, under any applicable state or federal law relating to the
protection, preservation or restoration of the environment, including, but not
limited to, the following federal environmental laws: the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, the Superfund
Amendment and Reauthorization Act, the Water Pollution Control Act of 1972, the
Clean Air Act, the Clean Water Act, the Resource Conservation and Recovery Act
of 1976, the Solid Waste Disposal Act, the Toxic Substances Control Act and the
Insecticide, Fungicide and Rodenticide Act, each as amended.
"IRS" means the Internal Revenue Service.
"Leased Realty" shall mean Seller's rights as lessee in and to any
real property leased by Seller at the Branch as detailed under the List of
Leases set forth at Schedule 1.2, together with all of Seller's rights and
interests in the leasehold improvements therein.
"Liabilities" has the meaning set forth in Section 2.2 of this
Agreement.
"Loans" has the meaning set forth in Section 2.3(a) of this
Agreement.
"Overdrafts" means those overdrafts of the book balance of any
Deposit Accounts which are not overdrawn for more than seven days as of the
Closing Date and which are not evidenced by a customer loan application and
promissory note.
"Person" means an association, a corporation, an individual, a
partnership, a trust or any other entity or organization, including a
Governmental Entity.
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"Retirement Plans" means those non-discretionary individual
retirement accounts (IRAs) and Keogh retirement plan accounts relating to the
Deposits for which Seller acts as custodian or trustee.
"Tax" or "Taxes" shall include any of the following imposed by or
payable to any governmental authority: any income, gross receipts, license,
payroll, employment, excise, severance, stamp, business, occupation, premium,
windfall profits, environmental, capital stock, franchise, profits, withholding,
social security (or similar), unemployment, disability, real property, personal
property, sales, use, transfer, registration, or value added tax, any
alternative or add-on minimum tax, any estimated tax, and any levy, impost,
duty, assessment, withholding or any other governmental charge of any kind
whatsoever, in each case including any interest, penalty, or addition thereto,
whether disputed or not.
"Training Expenses" means the overtime and out-of-pocket expenses
(meals and mileage) incurred by Seller as a result of any Buyer training
conducted prior to Closing.
"Welfare Benefit Plans" means those Benefit Plans which are "welfare
benefit plans" as defined by ERISA.
ARTICLE II. PURCHASE OF ASSETS AND ASSUMPTION OF LIABILITIES
2.1 Purchase of Assets.
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Subject to the terms and conditions of this Agreement, Seller agrees
to sell, assign and transfer possession of and all right, title and interest of
Seller in and to the following assets to Buyer (collectively, the "Assets") and
Buyer agrees to purchase the same from Seller, as of the close of business on
the Closing Date:
(a) the Fixed Assets;
(b) the Branch Cash;
(c) the Overdrafts;
(d) Seller's rights with respect to the Leased Realty;
(e) the Loans transferred pursuant to Section 2.3 of this Agreement;
and
(f) With regard to each Retirement Plan, all of Seller's right,
title and interest in and to the related plan or trustee or custodial
arrangement, and in and to all assets held by Seller pursuant thereto.
2.2 Assumption of Liabilities.
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Buyer agrees to assume, pay, perform and discharge the following
liabilities of Seller (the "Liabilities") as of the close of business on the
Closing Date:
(a) the Deposits and all terms and agreements relating to the
Deposit
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Accounts, excluding the deposit accounts set forth at Schedule 2.2(a) and
the following: escheatable Deposits, Deposits subject to or involved in
litigation and Deposits in which Seller acts as fiduciary other than
pursuant to the Retirement Plans;
(b) Seller's duties and responsibilities relating to the Deposits
arising after the Closing Date with respect to any applicable law;
(c) Seller's duties and responsibilities with respect to any
Equipment Leases;
(d) Seller's duties and responsibilities with respect to the
Retirement Plans other than those relating to Excluded Deposits; and
(e) Seller's duties and responsibilities with respect to the Leased
Realty.
The Buyer is not assuming any liabilities relating to the Branch
other than those expressly assumed under this Agreement.
2.3 Transfer of Loans.
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(a) Subject to Section 4.6(g) and 6.12 of this Agreement, Seller
shall transfer to Buyer all of Seller's right, title and interest
(including accrued but unpaid interest and collateral relating thereto) in
those loans selected by Buyer, as detailed on Schedule 2.3(a) (the
"Loans"). The Loans (as well as any lien or security interest related
thereto) shall be transferred by means of a blanket (collective)
assignment and not individually (except as may be otherwise required by
law).
(b) Seller and Buyer agree that Buyer will become the beneficiary of
credit life insurance written on Loans and coverage will continue to be
the obligation of the current insurer after the Closing Date and for the
duration of such insurance as provided under the terms of the policy or
certificate. If Buyer becomes the beneficiary of credit life insurance
written on Loans, Seller and Buyer agree to cooperate in good faith to
develop a mutually satisfactory method by which the current insurer will
make rebate payments to and satisfy claims of the holders of such
certificates of insurance after the Closing Date. After the Closing Date,
Seller will promptly deliver to Buyer the proceeds of any credit life
insurance relating to Loans inadvertently received by it. The parties'
obligations in this Section 2.3(b) are subject to any restrictions
contained in existing insurance contracts as well as applicable laws and
regulations.
(c) In connection with the transfer of any Loans requiring notice to
the borrower and the servicer, Buyer and Seller will comply with all
notice and reporting requirements of the loan documents or of any law or
regulation.
(d) All Loans will be transferred without any warranties or
representations as to their collectability or the creditworthiness of any
of the obligors of the Loans, except as set forth at Section 4.6 of this
Agreement.
(e) Promptly after the Closing Date, Buyer will at its expense issue
new coupon books or other forms of payment identification for payment of
Loans for which
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Seller provides coupon books, with instructions to utilize Buyer coupons
or forms and to destroy coupons furnished by Seller.
(f) After the Closing Date, Seller will forward to Buyer, Loan
payments received by Seller. If the balance due on any Loan has been
reduced by Seller as a result of a payment by check or other instrument
received prior to the Closing Date, and if such instrument is returned to
Seller after the Closing Date as uncollectable, an amount in cash equal to
such reduction shall be paid by Buyer to Seller upon receipt by Buyer of
the next Loan payments from such borrower, and Seller shall assign
promptly all right, title and interest in such uncollectable item to
Buyer.
(g) As of the Closing Date, Seller shall transfer and assign all
files, documents and records related to the Loans to Buyer, including such
information held in electronic form, and Buyer will be responsible for
maintaining and safeguarding all such materials in accordance with
applicable law and sound banking practices.
2.4 Transfer of Records.
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(a) At the Closing, Seller also shall transfer to Buyer possession
and all right, title and interest of Seller in and to all books and
records relating to the Assets and the Liabilities which are maintained at
the Branch or otherwise in Seller's possession.
(b) All books and records relating to the Assets and the Liabilities
held by either Seller or Buyer after the Closing Date shall be maintained
in accordance with (and for the period provided in) that party's standard
recordkeeping policies and procedures and subject to applicable laws and
regulations governing records retention. Throughout such period, the party
holding such books and records shall comply with the reasonable request of
the other party to provide copies of specified documents, at the expense
of the requesting party. The requesting party shall give reasonable notice
of any such request.
2.5 Tax Matters.
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Notwithstanding Section 2.6, Buyer shall pay to Seller or the
relevant taxing jurisdiction (as appropriate under the circumstances), or
reimburse Seller if Seller shall have paid, any sales and use taxes and any
interest and penalties thereon which are payable or arise as a result of this
Agreement or the consummation of any of the transactions contemplated by this
Agreement, excluding any taxes as a result of the sale and transfer of the
Leased Realty (which shall be paid by Seller); provided, however, Seller shall
be responsible for payment of any taxes or levies that may arise under the New
Jersey Bulk Sales Act or any analogous statute or regulation in effect in the
Commonwealth of Pennsylvania (including, without limitation, Section 1403 of the
Pennsylvania Fiscal Code) with respect to the sale of the Branch and for all
other transactions occurring on or prior to the Closing Date.
2.6 Proration of Certain Items.
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Except as detailed at Section 2.5 herein, all rental income or
expenses associated with the operation of the Branch (including, but not limited
to rental lease payments related to
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the Branch and any security deposits or prepaid rents paid related to such
Leased Realty), real estate taxes, personal property taxes (tangible or
intangible), utility, water and sewer charges and assessments, and any and all
other pre-paid charges related to the operation of the Branch (and from which
the Buyer will derive a benefit after the Closing) shall be prorated between
Buyer and Seller as of the close of business on the Closing Date. In addition,
any quarterly assessments actually paid by Seller to the Deposit Insurance Fund
of the FDIC prior to the Closing Date for the quarterly assessment period
containing the Closing Date with respect to the Deposits, shall be prorated
between Buyer and Seller as of the close of business on the Closing Date based
upon the daily assessment rate in effect as of such assessment quarter with
respect to Seller, the Deposits subject to assessment that actually transfer as
of the Closing Date and the number of calendar days remaining until the end of
such assessment quarter, such that Seller shall receive a reimbursement from
Buyer for such number of calendar days remaining until the end of such
assessment quarter.
2.7 Back Office Conversion.
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Seller and Buyer shall cooperate with each other and shall use their
reasonable best efforts (consistent with their internal day-to-day operations)
in order to cause the timely transfer of information concerning the Assets and
the Liabilities which is maintained on Seller's data processing systems so that
Buyer can incorporate such information into Buyer's data processing systems no
later than the opening of business on the Business Day following the Closing
Date, including testing of such data transfers prior to the Closing Date. Buyer
shall bear the costs of any third-party programming requirements related to such
data processing efforts.
2.8 Certain Transitional Matters Following the Closing Date
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(a) Buyer agrees to honor in accordance with applicable law, up to
the collected amount on deposit (and any other funds available by reason
of any agreement between the depositor and Buyer), all properly drawn and
presented checks, drafts, electronic debits and credits and withdrawal
orders presented to Buyer by mail, over its counters, throughout the check
clearing system, and Automated Clearing House of the banking industry, by
depositors of the accounts assumed, whether drawn on the checks,
withdrawal or draft forms provided by Seller, or by Buyer, and all other
respects to discharge, in the usual course of the banking business, the
duties and obligations of Seller with respect to the balances due and
owing to the depositors whose accounts are assumed by Buyer. Buyer's
obligation under this Section to honor checks, withdrawal, draft forms and
electronic debits and credits provided by Seller and carrying its imprint
shall expire at the close of business on the 60th business day following
the Closing Date or a date mutually agreeable to both parties.
(b) If any of such depositors, instead of accepting the obligation
of Buyer to pay the Deposit Liabilities assumed, shall demand payment from
Seller for all or any part of any such assumed Deposit Liabilities, Seller
shall not be liable or responsible for making such payment. Instead,
Seller may, at its discretion, assume custody of the check or other item
presented for payment, including electronic items, on an account which has
been transferred with the Branch, batch such items and send them to Buyer
by mail within one business day after receipt thereof by Seller. Seller
shall not, at any time, be
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liable or responsible for making payment on such items by reason of its
obtaining custody of them for transmittal to Buyer.
In order to reduce the continuing charges to Seller through the
check clearing system of the banking industry which will result from check forms
of Seller being used after the Closing Date by the depositors whose accounts are
assumed, Buyer agrees, at its cost and expense, on or immediately after (and in
no event without the express written consent of Seller, if prior to) the Closing
Date, to notify depositors of Buyer's assumption of Deposit Liabilities and, at
its sole cost and expense and without cost to depositors, to furnish each
depositor of an assumed account with not less than fifty (50) checks on the
forms of Buyer, with instructions to utilize Buyer's checks and to destroy
unused checks of Seller as of the Closing Date. Buyer will send Seller a copy of
notification letters forwarded to depositors by Buyer. Seller hereby agrees that
after the 60th business day following the Closing Date or a date mutually
agreeable to both parties, it shall, with respect to the Branch, at its sole
option, either: (1) return such check or other item with reference to the maker
thereof; or (2) assume custody thereof, batch the same and make it available to
Buyer for pick-up in the manner aforesaid and telephone Buyer of the
availability of the same for pick-up prior to 10:30 a.m. of the next banking day
after receipt.
(c) Buyer agrees, no later than the start of the second business day
after demand by Seller, to pay Seller an amount equivalent to the amount
of any uncollected item included in a depositor's balance on the Closing
Date which is returned after the Closing Date as not collected less the
Deposit Premium paid thereon. Buyer shall be required to make such payment
for an item only up to the amount on deposit with Buyer in such
depositor's account at the time Seller makes the demand aforesaid.
(d) Buyer shall timely forward to Seller any mail, facsimile or
other correspondence, received at any of the Branch after the Closing
Date, that is (i) addressed to Seller, or (ii) addressed to Buyer but
relating to an obligation of Seller that originated prior to the Closing
Date.
(e) Adjustments after the Closing Date shall be made daily as may be
required. Such adjustments shall be by wire transfer.
(f) At least ten (10) business days prior to the Closing Date, Buyer
shall notify holders of ATM cards that all ATM cards held by Branch
customers will be void as of the Closing Date.
2.9 Information Returns.
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(a) Buyer shall file all required information returns with the
Internal Revenue Service with respect to interest paid on the Deposits
after the Closing Date, interest received on Overdrafts or Loans after the
Closing Date, and any other information returns required with respect to
the Assets and the Liabilities for the periods beginning after the Closing
Date. Seller will file and otherwise distribute to Depositors and other
parties as required by applicable law, all required information returns
with the Internal Revenue Service and any information returns required by
state or local tax authorities with respect to interest paid on the
Deposits on or before the Closing Date, interest received on the
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Overdrafts or Loans on or before the Closing Date, and any other
information returns required with respect to the Assets and the
Liabilities for periods ending on or before the Closing Date.
(b) At the Closing or as soon thereafter as is practicable, Seller shall
provide Buyer with a list of all Deposits for which Seller has not
received a properly completed and currently valid Form W-8 or W-9 or on
which Seller is back-up withholding as of the Closing Date. With respect
to information returns filed and similar reporting made by Buyer within
12-months after the Closing Date, Seller agrees to indemnify Buyer in an
amount equal to any initial penalty and interest imposed upon Buyer by the
IRS or other Tax authorities or self-assessed by Buyer which Buyer is
thereafter required to, and does, pay to the IRS where such penalty and
interest arises out of actions taken or omitted to be taken by Buyer in
reasonable reliance upon the representation provided by Seller under
Section 4.16(b), and such penalty and interest does not result from an act
or omission of Buyer not made in reliance upon such information. The term
"interest" for purposes of this Section 2.9(b) includes interest accrued
prior to the receipt by Buyer of a notice of penalty from the IRS
regarding Form W-8 or W-9 (or other Tax authorities regarding similar
forms) for the Deposits.
2.10 Assignment and Assumption of Branch Lease.
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Promptly following execution of this Agreement, Buyer and Seller,
shall use their commercially reasonable efforts to obtain any necessary
Assignment from the landlord of the Leased Realty and any other party related to
the Leased Realty effective as of the Closing Date; including such landlord's
execution of the Consent to the Assignment and Estoppel Certificate in a form
substantially similar to the form attached hereto as Exhibit C.
2.11 Tax Allocation
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(i) Seller and Buyer agree to allocate the consideration under this
Agreement in such a manner as reasonably determined by Buyer in accordance with
the rules under Section 1060 of the Code, subject to Seller's consent (which
consent shall not be unreasonably withheld).
(ii) Within sixty (60) days following the Closing, Buyer shall
deliver to Seller a statement setting forth an allocation of the Purchase Price
(the "Allocation"). Seller shall have a period of thirty (30) days following
receipt of the Allocation in which to review the Allocation and raise any
objections that Seller may have. Unless Seller timely objects, the Allocation
shall become binding on the parties without further adjustment.
(iii) If Seller timely objects to Buyer's proposed Allocation,
Seller and Buyer shall use their best efforts to resolve the disagreement during
the ten-day period following Seller's notice of objection. If the disagreement
is not resolved during such ten-day period, the dispute shall be referred to the
Dispute Resolver, which shall be asked (A) to determine whether it was
unreasonable for Seller to withhold its consent to the Allocation proposed by
Buyer and (B) if the Dispute Resolver determines that it was not unreasonable
for Seller to withhold such consent, to specify those modifications required to
be made so that Buyer's proposed Allocation
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would be in accordance with the rules under Section 1060 of the Code. The
Allocation proposed by Buyer, as modified by negotiation between Seller and
Buyer and by any modifications implemented pursuant to the immediately preceding
sentence, shall be deemed to be the "Final Allocation". All determinations under
this Section 2.11 made by the Dispute Resolver shall be binding upon Buyer and
Seller. Buyer and Seller shall share equally in the cost of any Dispute
Resolver.
(iv) Buyer shall prepare Form 8594 in a manner that reflects the
Final Allocation. Seller and Buyer shall each file such Form 8594 when due.
(v) To the extent consistent with applicable law, Seller and Buyer
shall not file any Tax return or other documents or otherwise take any position
with respect to Taxes that is inconsistent with the Final Allocation; provided,
however, that neither Seller nor Buyer shall be obligated to litigate any
challenge by a governmental authority to the Final Allocation.
(vi) Seller and Buyer shall promptly inform one another of any
challenge by any governmental authority to any allocation made pursuant to this
Section 2.11 and agree to consult with and keep one another informed with
respect to the state of, and any discussion, proposal or submission with respect
to, such challenge.
ARTICLE III. CONSIDERATION
3.1 Calculation.
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In consideration of Buyer's purchase of the Assets and its
assumption of the Liabilities, Seller agrees to pay to Buyer in immediately
available funds not later than 2:00 pm, New Jersey time, on the Closing Date an
amount equal to the Deposits to be transferred, plus accrued interest on such
Deposits to be transferred, plus any amount required to be paid by Seller
pursuant to Section 6.13 less the sum of the following, in each case calculated
as of the close of business on the Closing Date (except as otherwise detailed
herein):
(a) the sum of $50,000 as the aggregate purchase price for the Fixed
Assets as of the Closing Date, as detailed on Schedule 2.1(a);
(b) the amount of Branch Cash;
(c) the principal amount of the Overdrafts, provided however that
Seller shall refund to Buyer the amount of such Overdrafts to the extent
that such amount shall remain uncollected as of 30 days following the
Closing Date, plus accrued interest from the Closing Date through the date
of collection at the contract rate determined in accordance with the
policies of Seller as detailed at Schedule 3.1(c);
(d) the net amount (which may be a negative amount) of taxes payable
by Buyer and Seller under Section 2.5 (i.e., the amount payable by Buyer
less the amount payable by Seller);
(e) the net amount (which may be a negative amount) of any
adjustments under Section 2.6 (i.e., the amount payable by Buyer less the
amount payable by Seller);
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(f) an amount equal to the Amount of Deposit Premium. The "Amount of
Deposit Premium" shall be equal to seven and 61/100 percent (7.61%) of the
average closing daily Deposits attributable to the Branch for the five (5)
calendar day period ending as of the calendar day two days prior to the
Closing. For purposes of this subparagraph, Deposits shall exclude any
pledged deposits or accounts where such pledged deposits or accounts
secured by a loan that is not being transferred and any Excluded Deposits;
(g) an amount equal to the Amount of Loan Premium. The "Amount of
Loan Premium" shall be equal to one percent (1.00%) of the net book value
of the Loans as of the last business day prior to the Closing; and
(h) the Training Expenses.
3.2 Settlement.
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(a) Not later than three (3) business days prior to the Closing
Date, Seller shall deliver to Buyer the Closing Statement prepared in
accordance with Seller's customary practices and procedures used in
preparing financial statements, substantially in the form of Exhibit A to
this Agreement, which shall be completed based upon information as of the
close of business five business days prior to the Closing Date and shall
be the basis of the payment made to Buyer's account as of the Closing Date
in the manner detailed at Section 3.1 herein (the "Settlement Payment").
(b) The parties shall cooperate in the preparation of the Adjusted
Closing Statement within 30 days after the Closing Date, which shall be
prepared in accordance with Seller's customary practices and procedures
used in preparing financial statements, substantially in the form of
Exhibit B to this Agreement, which shall be completed as of the close of
business on the Closing Date. On the Business Day after Buyer and Seller
agree to the Adjusted Closing Statement, or Buyer and Seller receive
notice of any determination of the Adjusted Closing Statement under
subsection (c) (the "Adjusted Settlement Date"), Seller shall pay to Buyer
(or Buyer shall pay to Seller, as the case may be) an amount (the
"Adjustment Payment") equal to the amount due stated on the Adjusted
Closing Statement, plus interest from the day after the Closing Date until
the calendar day before the Adjustment Payment is made at a rate per annum
(calculated daily based on a 360-day year) equal to the daily Federal
Funds Rate.
(c) If the parties are unable to agree on the Adjusted Closing
Statement within 30 days after the Closing Date, either party may refer
the matter to the Dispute Resolver, and such Adjusted Closing Statement
shall be modified by any such resolution and thereupon such Adjusted
Closing Statement shall become final and binding on Buyer and Seller
provided, however, for any claim that does not exceed $5,000 that in the
event the fees of such Dispute Resolver as estimated by such firm would
exceed fifty percent (50%) of the net amount in dispute, the parties agree
that such firm will not be engaged by either party and that such net
amount in dispute will be equally apportioned between Seller, on the one
hand, and Buyer, on the other hand. Such Dispute Resolver shall be
instructed to resolve the disputed items within ten (10) Business Days of
engagement, to
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the extent reasonably practicable. All determinations under this Agreement
made by the Dispute Resolver shall be binding upon Buyer and Seller. Buyer
and Seller shall share equally in the cost of any Dispute Resolver.
(d) The Settlement Payment and the Adjustment Payment shall each be
made by wire transfer of immediately available funds to the account of the
party receiving the payment, which account shall be identified by the
party receiving the funds to the other party not less than two Business
Days prior to such payment.
(e) Any errors associated with the Deposits or other items or
calculations as detailed on the Closing Statement or the Adjusted Closing
Statement ("Mistakes-in-Fact") which are determined as of the date of the
Adjusted Closing Statement shall be reconciled as of such date and
appropriate adjustments of payments shall be made to Seller or Buyer, as
appropriate, at such time. Notwithstanding the foregoing, or anything else
herein to the contrary, any Mistakes-in-Fact which shall be determined by
Seller or Buyer thereafter related to the transaction consummated under
this Agreement shall nevertheless be reconciled by adjustment or payment
to Seller or Buyer, as appropriate, within 30 days of such determination;
provided that any such Mistakes-in-Fact must be determined within one year
after the Closing Date in order for a claim to be made with respect
thereto.
ARTICLE IV. SELLER'S REPRESENTATIONS AND WARRANTIES
Seller makes the following representations and warranties to Buyer.
4.1 Power and Authority.
-------------------
(a) Seller has the corporate power and authority to enter into and
perform this Agreement. The execution and delivery of this Agreement has
been duly authorized by all necessary corporate action by Seller. Upon
execution and delivery by both parties, this Agreement will constitute a
valid and binding obligation of Seller, enforceable in accordance with its
terms, subject to conservatorship, receivership, and a court's right under
general principles of equity to refuse to direct specific performance.
(b) The performance of this Agreement by Seller will not violate any
provision of the Articles of Association or Bylaws of Seller, or any
applicable law, rule, regulation, or order or any contract or instrument
by which Seller or its Assets are bound, except for such violations which
alone, or taken in the aggregate, would not reasonably be expected to have
a material adverse effect on the financial condition, business or
operations of the Branch, taken as a whole, or the consummation of the
transactions contemplated by this Agreement (a "Seller Material Adverse
Effect").
4.2 Litigation and Regulatory Proceedings.
-------------------------------------
There are no actions, complaints, petitions, suits or other
proceedings, or any decree, injunction, judgment, order or ruling, entered,
promulgated or pending or (to Seller's knowledge) threatened against Seller or
any of the Assets or the Liabilities, which alone, or taken
-12-
in the aggregate, reasonably would be expected to have a Seller Material Adverse
Effect. No governmental agency has notified Seller that it would oppose or not
approve or consent to the transactions contemplated by this Agreement and Seller
knows of no reason for any such opposition, disapproval or non-consent,
including, but not limited to Seller's compliance with the Community
Reinvestment Act, the Bank Secrecy Act and the Truth-in-Lending Act.
4.3 Consents and Approvals.
----------------------
Except for required regulatory approvals, no consents, approvals,
filings or registrations with any third party or any public body, agency or
authority are required in connection with Seller's consummation of the
transactions contemplated by this Agreement, other than any required Assignments
relating to the Leased Realty or any required lessor consents to the assignment
of any the Equipment Leases, as detailed at Schedule 4.3, and as may be required
as a result of any facts or circumstances relating solely to Buyer.
4.4 Leased Realty.
-------------
Schedule 4.4 sets forth a true, correct and complete copy of the
lease applicable to the Leased Realty.
4.5 Fixed Assets.
------------
Seller has good and marketable title to the Fixed Assets as detailed
at Schedule 2.1(a), free and clear of all Encumbrances.
4.6 Loans.
-----
(a) Seller owns, and will convey to Buyer at the Closing, all of
Seller's right, title and interest to, all of the Loans, as set forth on
Schedule 2.3(a), free and clear of any Encumbrances.
(b) The collateral documents, evidence of security interest, notes,
guarantees and other documentation relating to the Loans are sufficient to
enforce such Loans against the obligors and any guarantors thereof in
accordance with the terms of such Loans, subject to bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights generally and that the
remedy of specific performance and injunctive relief or other forms of
equitable relief may be subject to equitable defenses and to the
discretion of the court before which any proceedings therefore may be
brought. Each Loan was made in the ordinary course of business and, unless
approved by Seller in writing and documented in its files, no material
provision of a Loan has been waived.
(c) Each Loan (such term to include, for purposes of this paragraph,
the principal documents relating in any way to such Loans, including
notes, mortgages, security instruments and guarantees) was solicited,
originated and exists in material compliance with all requirements of
applicable federal, state and local laws and regulations, including,
without limitation, usury, truth-in-lending, real estate settlement
procedures, consumer credit, equal credit opportunity and disclosure laws
(for purposes
-13-
of this clause (c), a Loan would not be in material compliance if the
non-compliance adversely affects the value or collectability of such
Loan).
(d) Each Loan that is secured by collateral is secured by a
perfected mortgage or security interest in the collateral in favor of
Seller as mortgagee or secured party. No collateral has been released from
the interest granted to Seller, unless approved by Seller and documented
in its files.
(e) As of the Closing Date, each Loan, except those loans secured by
deposit accounts, including but not limited to savings accounts and
certificates of deposit, and unsecured loans created by writing a check or
similar instrument on an overdraft line of credit, will be not more than
sixty (60) days past due and not otherwise in material default.
(f) Seller is not aware of any acts or omissions that would give
rise to any claim or right of rescission, setoff, counterclaim or defense
by borrowers, obligors or any other person obligated to perform under any
related Loan documents.
(g) Buyer's sole remedy for a breach of the representations and
warranties in this Section 4.6 with respect to a Loan or Loans on or prior
to the Closing Date shall be Buyer's right to exclude such Loan or Loans
from Schedule 2.3(a) and, in such event, such Loans or Loans shall not be
transferred by Seller to Buyer pursuant to this Agreement. In addition, if
the Buyer advises the Seller within sixty (60) calendar days after the
Closing Date that there exists a breach of the representations and
warranties in Section 4.6 with respect to a Loan, then Buyer shall have
the right to immediately return such Loan to the Seller and receive a
refund of the consideration paid with respect thereto provided that such
determination by the Buyer is deemed reasonable and in good faith by the
Seller.
4.7 Compliance with Certain Laws.
----------------------------
The Deposit Accounts were opened, extended or made, and have been
maintained, in accordance with all applicable federal and state laws,
regulations, rules and orders, and the Branch has been operated in compliance
with Seller's policies and procedures and all applicable federal and state laws,
regulations, rules and orders, except for such instances of noncompliance which
do not have, and are not reasonably likely to have, a Seller Material Adverse
Effect.
4.8 FDIC Insurance.
--------------
The Deposits are insured by the FDIC through the Deposit Insurance
Fund to the extent permitted by law, and all premiums and assessments required
to be paid in connection therewith have been paid when due by Seller.
4.9 Absence of Employment Agreements.
--------------------------------
There are no employment agreements, contracts, incentive plans or
similar agreements (other than such agreements, contracts and plans that will
terminate automatically on
-14-
the Closing Date and with no liability to Buyer) or disputes between Seller and
Seller's Employees at the Branch, whether written or otherwise, relating to
wages, hours, terms of employment, benefits or working conditions.
4.10 Books and Records.
-----------------
The books and records of Seller respecting the operations of the
Branch accurately reflect, in accordance with generally accepted accounting
principles consistently applied, the amount of Branch Cash and the total balance
of each Deposit Account, Loan and Overdraft being transferred to Buyer.
4.11 Deposit Accounts.
----------------
All of the Deposit Accounts were originated and have been
administered in compliance, in all material respects, with the document
governing the relevant type of Deposit Account and all applicable laws. Seller
has properly accrued interest on the Deposit Accounts and the records respecting
the Deposit Accounts accurately reflects such accruals of interest. Seller has
delivered to Buyer a true and complete copy of each of the documents governing
the Deposit Accounts and a true and correct copy of the current Deposit Account
forms for each of the types of Deposit Accounts offered by Seller at the Branch.
4.12 No Broker.
---------
No agent, broker, investment banker or other person acting on behalf
or under the authority of Seller is or will be entitled to any broker's or
finder's fee or any other commission or similar fee directly or indirectly in
connection with this Agreement.
4.13 Community Reinvestment Act.
--------------------------
Seller is in compliance in all material respects with the Community
Reinvestment Act ("CRA") and its implementing regulations and, there are no
threatened or pending actions, proceedings, or allegations by any person or
regulatory agency which may cause bank regulatory authorities to deny any
application or non-objection required to be filed pursuant to this Agreement.
Seller has received a rating of not less than "satisfactory" on its most recent
CRA examination. In addition, Seller has not been advised of any supervisory
concerns regarding compliance with CRA.
4.14 Contracts.
---------
A complete and accurate list of all Equipment Leases and all other
contracts relating to the Branch's operations is set forth at Schedule 4.14.
Each Equipment Lease and contract included in the Assets or Liabilities to be
expressly assumed by Buyer pursuant to Section 2.2 is valid and subsisting in
full force and effect and Seller and, to Seller's knowledge, each other party
thereto, has performed in all material respects all obligations required to be
performed thereunder, and no condition exists which constitutes, or with notice
or lapse of time, or both, would constitute, a material default. Each Equipment
Lease and other contract included within the Assets or the Liabilities to be
expressly assumed pursuant to Section 2.2 is assignable
-15-
without the consent of any third party other than the consents listed on
Schedule 4.3 and the landlord of the Leased Realty. True and correct copies of
all Equipment Leases and other contracts included within the Assets or the
Liabilities to be expressly assumed pursuant to Section 2.2 have been made
available to Buyer (or if requested by Buyer, delivered to it). Except for the
Equipment Leases and contracts included within the Assets or included in the
Liabilities that Buyer is expressly assuming in accordance with Section 2.2, all
contracts set forth on Schedule 4.14 will be terminated by Seller without any
obligation or liability being incurred by Buyer.
4.15 Fiduciary Obligations.
---------------------
Except for the Retirement Plans, Seller has no trust or fiduciary
relationship or obligations in respect of any of the Deposit Liabilities or in
respect of any other Assets being transferred or Liabilities to be assumed by
Buyer hereunder.
4.16 Tax Matters.
-----------
(a) All Tax returns with respect to the Assets or income therefrom,
the Deposit Liabilities or payments in respect thereof or the operation of the
Branch, that are required to be filed on or before the Closing Date have been or
will be duly filed by Closing, and all Taxes shown to be due on such Tax returns
have been paid in full or will be paid in full by Closing.
(b) With respect to the Deposit Liabilities, Seller is in compliance
with the law and IRS regulations relating to (i) obtaining from depositors of
the Deposit Liabilities executed IRS Forms W-8 and W-9 when appropriate and (ii)
reports of interest. Seller has either obtained a properly completed Form W-8 or
W-9 when appropriate (and renewals of such forms, where required) or is back-up
withholding on such account.
4.17 Environmental Matters.
---------------------
There is no legal, administrative, arbitration or other proceeding,
claim, action, cause of action or governmental investigation of any nature
seeking to impose on Seller in connection with the Branch or the Assets any
liability arising under any Environmental Laws (as defined below) pending, and
Seller has not received any written notice or is otherwise aware of any
threatened such proceeding, claim, action or governmental investigation; there
is no reasonable basis of which Seller has knowledge for any such proceeding,
claim, action or governmental investigation; and Seller is not subject to any
agreement, order, judgment, decree or memorandum by or with any court,
governmental authority, regulatory agency or third party imposing any such
liability with respect to any real property. Should Seller receive knowledge for
any such proceeding, claim, action or governmental investigation, including
locating information on a past proceeding, claim, action or governmental
investigation, if any, Seller will promptly furnish such information to Buyer.
For purposes of this Agreement, "Environmental Law" means all applicable
federal, state and local environmental laws, including the Resource Conservation
and Recovery Act, the Comprehensive Environmental Response, Compensation, and
Liability Act, the Clean Water Act, the Federal Clean Air Act, and the
Occupational Safety and Health Act, as amended, regulations promulgated
thereunder, and state counterparts, and obligations under the common law,
ordinances, rules and regulations, as any of the foregoing may
-16-
have been or may be from time to time amended, supplemented or supplanted, now
or hereafter existing, relating to responsibility (or potential responsibility)
for the cleanup or other remediation of any pollutants, contaminants, or
hazardous or toxic wastes, substances or materials at, on, beneath, or
originating from any such property.
4.18 Branch Offices Within the Restricted Area.
-----------------------------------------
There are no branch offices operated by the Seller, in addition to
the Branch, within the "Restricted Area" (as such term in is defined in Section
6.11(b)).
ARTICLE V. BUYER'S REPRESENTATIONS AND WARRANTIES
Buyer makes the following representations and warranties to Seller.
5.1 Power and Authority.
-------------------
(a) Buyer has the corporate power and authority to enter into and
perform this Agreement. The execution and delivery of this Agreement has
been duly authorized by all necessary corporate action by Buyer. Upon
execution and delivery by both parties, this Agreement will constitute a
valid and binding obligation of Buyer, enforceable in accordance with its
terms subject to conservatorship, receivership, and a court's right under
general principles of equity to refuse to direct specific performance.
(b) The performance of this Agreement by Buyer will not violate any
provision of the Articles of Incorporation, Bylaws or similar governing
documents of Buyer, or any applicable law, rule, regulation, or order or
any contract or instrument by which Buyer is bound except for such
violations which alone, or taken in the aggregate, would not reasonably be
expected to have a material adverse effect on the consummation of the
transactions contemplated by this Agreement (a "Buyer Material Adverse
Effect").
5.2 Litigation and Regulatory Proceedings.
-------------------------------------
There are no actions, complaints, petitions, suits or other
proceedings, or any decree, injunction, judgment, order or ruling, entered,
promulgated or pending or (to Buyer's knowledge) threatened against Buyer or any
of its properties or assets which alone, or taken in the aggregate, reasonably
would be expected to have a Buyer Material Adverse Effect. No governmental
agency has notified Buyer that it would oppose or not approve or consent to the
transactions contemplated by this Agreement, and Buyer knows of no reason for
any such opposition, disapproval or non-consent, including, but not limited to
Buyer's compliance with the Community Reinvestment Act, the Bank Secrecy Act and
the Truth-in-Lending Act.
5.3 Consents and Approvals.
----------------------
Except for required regulatory approvals, no consents, approvals,
filings or registrations with any third party or any public body, agency or
authority are required in connection with Buyer's consummation of the
transactions contemplated by this Agreement, other than any required Assignments
relating to the Leased Realty or as set forth on Seller's Schedule 4.3, and
other than what may be required as a result of any facts or circumstances
-17-
relating solely to Seller.
5.4 FDIC Insurance.
--------------
Buyer is authorized to hold Deposits that are insured by the FDIC
through the Deposit Insurance Fund to the extent permitted by law, and all
premiums and assessments required to be paid in connection therewith have been
paid when due.
5.5 No Broker.
---------
No agent, broker, investment banker or other person acting on behalf
or under the authority of Buyer is or will be entitled to any broker's or
finder's fee or any other commission or similar fee directly or indirectly in
connection with this Agreement.
5.6 Community Reinvestment Act.
--------------------------
Buyer is in compliance in all material respects with the CRA and its
implementing regulations and, there are no threatened or pending actions,
proceedings, or allegations by any person or regulatory agency that may cause
bank regulatory authorities to deny any application or non-objection required to
be filed pursuant to this Agreement. Buyer has received a rating of not less
than "satisfactory" on its most recent CRA examination. In addition, Buyer has
not been advised of any supervisory concerns regarding compliance with CRA.
ARTICLE VI. ADDITIONAL AGREEMENTS OF SELLER
6.1 Access to Seller's Premises, Records and Personnel.
--------------------------------------------------
(a) Upon execution of this Agreement, Seller shall give Buyer and
its representatives such access to the Branch as Buyer may reasonably
request, provided that Buyer does not unreasonably interfere with the
Branch's business operations. Seller shall not be required to provide
access to or to disclose information where such access or disclosure might
violate or prejudice the rights of any customer or employee or would be
contrary to law, rule, regulation or any legal or regulatory order or
process or any fiduciary duty or binding agreement entered into prior to
the date of this Agreement. To the extent the confidential and proprietary
information consists of "non-public personal information" within the
meaning of the Gramm-Leach-Bliley Act Section 509(4), each party receiving
such information shall take reasonable measures to: (i) ensure the
security and confidentiality of such non-public personal information; (ii)
protect against any anticipated threats or hazards to the security or
integrity of such non-public personal information; and (iii) protect
against unauthorized access to or use of such non-public personal
information.
(b) Anything contained in this Agreement to the contrary
notwithstanding, Seller shall not be required to disclose, or to cause the
disclosure to Buyer or its representatives (or provide access to any
offices, properties, books or records of Seller, that could result in the
disclosure to such Persons or others), of any tax returns and/or any work
papers relating thereto or any other confidential information relating to
income or franchise taxes or other taxes of Seller, or trade secrets,
patent or trademark applications,
-18-
or product research and development belonging to or performed by or for
Seller, nor shall Seller be required to permit or to cause others to
permit Buyer or its representatives to copy or remove from the offices or
properties of Seller any documents, drawings or other materials that might
reveal any such confidential information; provided, however, Buyer shall
have access to tax returns to the extent that liability for the taxes at
issue could be imposed on Buyer.
(c) At Buyer's request, Seller shall authorize and permit certain of
its officers and members of management to engage in discussions with Buyer
for the purposes of discussing the Branch business, and Buyer shall
maintain the confidentiality of any information furnished by such officers
or members of management of Seller pursuant to such discussions with
Buyer.
6.2 Regulatory Approvals.
--------------------
Seller agrees to use its reasonable best efforts to obtain promptly
any regulatory approval on which its consummation of the transactions
contemplated by this Agreement is conditioned. Seller shall prepare and file any
necessary regulatory notices and applications related to the transactions
contemplated by this Agreement within 30 calendar days of the execution date of
the Agreement. Seller also agrees to cooperate with Buyer in obtaining any
regulatory approval that Buyer must obtain before the Closing. Seller shall
notify Buyer promptly of any significant development with respect to any
application it files under this Section. Seller also shall provide Buyer with a
copy of any regulatory approval it receives under this Section, promptly after
Seller's receipt of the same.
6.3 Conduct of Business.
-------------------
Except as provided in this Agreement or as may otherwise be agreed
upon by Buyer, Seller will continue to carry on the business at the Branch until
the Closing in the ordinary course of business, consistent with prudent business
and past practices. Seller shall not terminate the operation of the Branch,
unless those operations cease due to events beyond Seller's control. Seller will
notify Buyer of any event of which Seller obtains knowledge that would make any
of Seller's representations under Article IV of this Agreement false in any
material respect.
6.4 Returned Items.
--------------
If Seller accepts an item before the Closing Date, which item is
returned as uncollectible, and no offset of funds is available to Buyer, then
Seller shall be liable for such item in an amount equal to the portion not
covered by offset. Adjustment to the Settlement Payment will be made as
necessary to reflect Seller's liability.
6.5 Branch Property Lease.
---------------------
Seller and Buyer shall use commercially reasonable efforts to obtain
any necessary consents or non-objections of the landlord of the Leased Realty to
the Assignment of the Leased Realty to Buyer, including such landlord's
execution of the Consent and Assignment of Lease and Estoppel Certificate in the
form substantially similar to the form attached hereto as Exhibit C.
-19-
6.6 Employee Payroll.
----------------
Seller shall not increase the wages of any employee of the Branch,
as detailed at Schedule 6.6, other than in accordance with the salary budget
guidelines presently in effect, as detailed at Schedule 6.6 and otherwise in the
ordinary course of business consistent with past practice, without the approval
of a representative of Buyer, which shall not be unreasonably withheld or
delayed.
6.7 Branch Operations.
-----------------
Seller shall not materially alter the products or services presently
offered at the Branch or materially alter the pricing policy applicable to such
products without the prior written consent of the Buyer, which shall not be
unreasonably withheld or delayed.
6.8 Final Payroll.
-------------
Seller shall pay all of its employees not later than as of the close
of business on the Closing Date all sums due for all wages earned, including
overtime pay, and all accrued, but unused paid time off days as of such time.
6.9 Customer Records.
----------------
At least thirty (30) days prior to the Closing Date, or as otherwise
agreed, Seller agrees to provide to Buyer a list of all Deposits, identifying
the types of each such deposit, the amount thereof, the interest rate(s) paid
thereon, the name(s) and address(es) of each deposit as well as all other
pertinent information regarding each depositor and his or her Deposit
(including, without limitation, the amount of any Overdraft). Seller agrees to
provide an updated list setting forth the same information with respect to each
Deposit as of the same date that the Closing Statement is delivered to Buyer
pursuant to Section 3.2(a) and as of the close of business as of the business
day immediately preceding the Closing Date. Seller represents and warrants that
each such list shall be true and correct as of the date it, or any update
thereto, is delivered to Buyer. Buyer shall have the right, prior to the Closing
Date, to review the books and records of Seller relating to such Deposits for
the purpose of verifying the accuracy of the foregoing list.
6.10 IRA and Keogh Plan Deposits.
---------------------------
(a) On or before the Closing Date, to the extent that such accounts
will transfer to Buyer, Seller shall: (i) resign as of the close of
business on the Closing Date as the trustee or custodian, as applicable,
of each IRA and Keogh Plan of which it is the trustee or custodian; (ii)
to the extent permitted by the documentation governing each such IRA or
Keogh Plan and applicable law, appoint Buyer as successor trustee or
custodian, as applicable, of each such IRA or Keogh Plan, and Buyer hereby
accepts each such trusteeship or custodianship under the terms and
conditions of Buyer's plan documents for its IRA and Keogh Plans, and
assumes all fiduciary and custodial obligations with respect thereto as of
the close of business on the Closing Date; and (iii) deliver to the IRA
grantor or Keogh Plan named fiduciary, of each such IRA or Keogh
-20-
Plan such notice of the foregoing as is required by the documentation
governing such IRA or Keogh Plan or applicable law. Buyer shall be solely
responsible for delivering its IRA and Keogh Plan documents to the
applicable IRA grantor and Keogh Plan named fiduciary, including, but not
limited to, a beneficiary designation form to be completed by the
applicable IRA grantor or Keogh Plan participant; provided, however that
in the event the IRA grantor or Keogh Plan participant dies before such
time as Buyer receives a properly completed beneficiary designation form,
Seller shall make available to Buyer such information as may exist in
Seller's files regarding any beneficiary designation it may have regarding
such decedent. If, pursuant to the terms of the documentation governing
any such IRA or Keogh Plan or applicable law; (x) Seller is not permitted
to appoint Buyer as successor trustee or custodian, or the IRA grantor or
Keogh Plan or named fiduciary objects in writing to such designation, or
is entitled to, and does, in fact, name a successor trustee or custodian
other than Buyer; or (y) such IRA or Keogh Plan includes assets that are
not Deposits and are not being transferred to Buyer or the assumption of
such deposit liabilities included in such IRA or Keogh Plan or would
result in a loss of qualification of such IRA or Keogh Plan under the
Code, all deposit liabilities of Seller held under such IRA or Keogh Plan
shall be excluded from the Deposits. Upon appointment as a successor
custodian for such IRAs or as a successor trustee for such Keogh Plans,
Buyer shall perform the services and carry out the duties and obligations
required of it under the applicable plans, the Code and applicable federal
and state laws and regulations.
(b) To the extent the Deposits include certain IRAs and Keogh Plans
that are required to make certain periodic distributions to the IRA
account owner or Keogh Plan or participant (or beneficiary) either at the
account owner's or participant's request or because the account owner or
participant has attained age 70-1/2, effective as of the Closing Date,
Buyer agrees to continue to make such periodic distributions in accordance
with the reasonable distribution instructions forwarded by Seller to
Buyer. Buyer hereby assumes the obligation to pay each minimum
distribution required by federal law by December 31 of the calendar year
in which the Closing occurs and, in consideration thereof, Seller agrees
not to withhold the amount of such distributions from the aggregate amount
of the Deposits.
(c) At a reasonable time prior to the Closing Date, Seller shall
provide to Buyer copies of all plan documents and beneficiary designation
forms in Seller's possession with respect to the IRAs and Keogh Plans.
Seller represents and warrants that all such copies of plan documents and
beneficiary designation forms, and any other information regarding the
Retirement Plans provided by it, will be true, correct and complete.
6.11 Non- Solicitation After Closing.
-------------------------------
(a) Seller agrees that, for a period of one (1) year after the
Closing, neither the Seller nor its Affiliates shall directly or
indirectly solicit Bank Deposits (as hereinafter defined), loans or other
banking business from customers of the Branch maintaining Deposits or
having Loans transferred to the Buyer pursuant to this Agreement, or from
any other depositor, borrower or customer of the Branch at the time of the
Closing except
-21-
that (a) nothing herein shall prevent Seller from making general
solicitations of the public (or any segment of the public), through
advertising campaigns or otherwise, for the purpose of having the public
establish Bank Deposits of the Seller, so long as such solicitations are
not specifically directed toward customers of the Branch, (b) nothing
herein shall prevent Seller from soliciting so-called "brokered"
certificates of deposit, and (c) nothing herein shall prevent Seller from
displaying brochures and other marketing materials with respect to Bank
Deposits at Seller's offices. As used herein, "Bank Deposits" means demand
deposits, time deposits and certificates of deposit insured by the FDIC.
(b) Seller agrees that, for a period of one (1) year after the
Closing, Seller shall not, within the "Restricted Area" described below,
open or maintain any banking branch office or purchase any single banking
branch office from a third-party, other than a branch office operated by
the Seller as of the date of the Agreement. For the purposes of this
Agreement, the Restricted Area shall be defined as the geographic area
within the Commonwealth of Pennsylvania within 5 miles of the Branch.
(c) Seller agrees that unless prior written consent is obtained from
the Buyer, for a period of one (1) year after the Closing, Seller shall
not, and shall cause its Affiliates not to, solicit, employ, or induce, or
attempt to employ, solicit or induce to become employed by Seller or such
Affiliate or to leave the Buyer's employment, any former employee of the
Seller that is a Transferred Employee.
(d) Notwithstanding the foregoing, the provisions in this Section
6.11 shall not apply to Seller or its successors or assigns if the Seller
(a) is acquired in a merger or asset sale transaction with a third-party
or (b) Seller acquires another bank, thrift or financial institution by
merger or asset sale consisting of at least three retail banking offices
and one or more of such offices falls within the Restricted Area.
6.12 Loan Review
-----------
The Buyer may inspect all files and payment histories regarding the
Loans and, based upon such review, prior to Closing, the Buyer may reject the
purchase of identified Loans in the exercise of its good-faith discretion. In
addition, for a period of 30 days after the Closing, Buyer has the right to
return any Loan, and receive a refund of the consideration paid with respect
thereto, which Loan is more than 30 days past due with respect to the payment of
principal or interest, subject to a pending legal proceeding or subject to a
bankruptcy proceeding as of the Closing Date.
6.13 Environmental And Building Inspection
-------------------------------------
For a period of 45 days after the date of the Agreement, the Buyer
at is own expense and with the prior written consent of the Landlord of the
Leased Realty, may undertake a building inspection and Phase I environmental
audit of the Leased Realty including, without limitation, such physical
inspections of the Leased Realty as Buyer shall deem necessary or appropriate.
In the event Buyer conducts any such inspection or audit and as a result thereof
determines that a Phase II study is required, Seller shall have the option to
either permit a Phase
-22-
II study, to be performed by a licensed and reputable environmental inspection
company, or to terminate this Agreement. If the landlord of the Leased Realty
does not provide its consent to an environmental audit or building inspection
that Buyer desires to conduct or to the cure, prior to the Closing Date, of a
"Material Defect" (as defined below) which is discovered as a result of such
audit or inspection, Buyer shall have the right to terminate this Agreement.
Buyer shall inform Seller of any defect it discovers as a result of
such environmental audit or inspection which is reasonably estimated to cost in
excess of $5,000 to repair (any such defect being referred to as a "Material
Defect"). Each such Material Defect shall be cured to the reasonable
satisfaction of the Buyer within thirty days of such notice, and, in any event,
not later than the date scheduled for the Closing. If any such Material Defect
is not so cured prior the date scheduled for Closing, Buyer shall have the
option of terminating this Agreement or requiring Seller to pay to Buyer the
reasonable estimate of the cost to repair such Material Defect on the date
scheduled for the Closing and Seller shall indemnify Buyer for any costs or
expenses it subsequently incurs in repairing such Material Defect that are in
excess of the amount reasonably estimated and paid by Seller on the Closing
Date. In the event the landlord of the Leased Property prohibits any physical
inspection or environmental audit that Buyer desires to conduct on the Leased
Realty and Buyer elects not to terminate this Agreement and the Closing
contemplated hereby occurs, then Seller shall indemnify Buyer for the costs and
expenses it incurs in effectuating a repair of a Material Defect which it
discovers within thirty days after the Closing Date.
6.14 Prior Real Property Data.
------------------------
Within thirty (30) days of the date of this Agreement, Seller shall
furnish Buyer with copies of any prior environmental or title information
relating to the Leased Realty that is readily in Seller's possession.
6.15 Other Consents.
--------------
Seller shall use its reasonable best effort to obtain all consents
to the assignments of the Equipment Leases detailed on Schedule 4.3.
6.16 Insurance.
---------
Seller will maintain in effect until and including the Closing Date
casualty and public liability insurance policies relating to the Branch
consistent with that which it maintains in connection with its other branch
offices.
6.17 Damage or Destruction.
---------------------
If, prior to the Closing, the Leased Realty is damaged by fire,
vandalism, acts of God, or other casualty or cause, and the Leased Realty is not
repaired to substantially the same condition as existed immediately before such
casualty prior to the date scheduled for Closing, then Buyer shall have the
option of terminating this Agreement or proceeding with the Closing and
accepting the Leased Realty as it is together with the insurance proceeds, if
any, and the right to receive the same and Buyer shall receive a credit at the
Closing in the amount of any
-23-
deductible. If Buyer elects to proceed with the Closing, Seller agrees to
cooperate with Buyer in any loss adjustment negotiations, legal actions and
agreements with the insurance company, and to assign to Buyer at Closing, in
form and substance reasonable satisfactory to Buyer, its rights to such
insurance proceeds (and pay over to Buyer any such proceeds already received),
and Seller will not settle any insurance claims or legal actions relating
thereto without Buyer's prior written consent.
6.18 Certificate of Occupancy
------------------------
Seller shall use commercially reasonable efforts to assist the Buyer
in obtaining a Certificate of Occupancy and/or a Fire Safety Certificate, as and
if applicable, to be issued by the appropriate municipal or county authority as
of the Closing Date. In the event repairs are required in order to qualify for
such Certificate(s), Seller shall indemnify Buyer for the costs of such repairs
to the extend that such repairs are not required to be performed by the Landlord
of such property at such Landlord's expense, if applicable.
VII. ADDITIONAL AGREEMENTS OF BUYER
7.1 Regulatory Approvals.
--------------------
Buyer agrees to use its reasonable best efforts to obtain promptly
any regulatory approval on which its consummation of the transactions
contemplated by this Agreement is conditioned. Buyer shall prepare and file all
necessary regulatory notices and applications related to the transaction
contemplated by the Agreement within 30 calendar days of the execution date of
the Agreement. Buyer also agrees to cooperate with Seller in obtaining any
regulatory approval which Seller must obtain before the Closing. Buyer shall
notify Seller promptly of any significant development with respect to any
application it files under this Section. Buyer also shall provide Seller with a
copy of any regulatory approval it receives under this Section, promptly after
Buyer's receipt of the same. Notwithstanding the foregoing or anything else to
the contrary contained in this Agreement, Buyer shall not in any event be
required to agree to any term or condition, or take any action, in order to
obtain such regulatory approval which would adversely affect in a material way
(a) Buyer's operation of the Branch or (b) Buyer or any of its Affiliates with
respect to their present business or activities.
7.2 Change of Name, Etc.
-------------------
Immediately after the Closing, Buyer will (a) change the name and
logo on all documents and facilities relating to the Assets and the Liabilities
to Buyer's name and logo, (b) notify all persons whose Deposits are transferred
under this Agreement of the consummation of the transactions contemplated by
this Agreement, and (c) provide all appropriate notices to the FDIC and any
other regulatory authorities required as a result of the consummation of such
transactions. Buyer agrees not to use any forms or other documents bearing
Seller's name or logo after the Closing without the prior written consent of
Seller, and, if such consent is given, Buyer agrees that all such forms or other
documents to which such consent relates will be stamped or otherwise marked in
such a way that identifies Buyer as the
-24-
party using the form or other document. As soon as practicable and, in any
event, within seven calendar days after the Closing Date, Buyer will issue new
checks reflecting its transit and routing number to customers of the Branch with
check writing privileges. Buyer shall use its best efforts to encourage these
customers to begin using such checks and cease using checks bearing Seller's
name.
ARTICLE VIII. SELLER'S EMPLOYEES
8.1 Transferred Employees.
---------------------
(a) Buyer will notify Seller not later than 30 days prior to the
Closing Date which employees of Seller it intends to offer to employ as of
the day after the Closing Date. Seller's employees who become employees of
Buyer after the Closing shall be referred to as "Transferred Employees."
Seller shall be responsible for retaining or terminating the employment of
its employees whom Buyer does not hire as of the day after the Closing,
and Seller shall make payment of any severance and other payments due
Seller's Branch employees that are not hired by Buyer.
(b) Seller is responsible for the filing of Forms W-2 with the
Internal Revenue Service and any required filing with state tax
authorities, with respect to wages and benefits paid to each Transferred
Employee for periods ending on or prior to the Closing Date.
8.2 Employee Benefits.
-----------------
(a) From and after the Closing Date, Buyer shall provide the
Transferred Employees with the employee benefits, if any, provided to
similar employees of Buyer and its Affiliates, subject to the terms of
Buyer's benefit plans;
(b) Buyer will grant for purposes of determination of vacation
benefits, severance pay and all welfare benefit plans (as defined in
ERISA) past service credit to all Transferred Employees for periods of
time credited to such Transferred Employees as employees of Seller. To the
extent that any Transferred Employee has satisfied in whole or in part any
annual deductible under a Welfare Benefit Plan, or has paid any
out-of-pocket expenses pursuant to any Welfare Benefit Plan co-insurance
provision, such amount shall be counted toward the satisfaction of any
applicable deductible or out-of-pocket expense maximum, respectively,
under the benefit plans and programs provided to Transferred Employees by
Buyer, and such plans and programs shall be applied without regard to any
limitations relating to preexisting conditions or required physical
examinations that would not otherwise apply under the respective Welfare
Benefit Plans to the extent that such Transferred Employees are covered by
the Welfare Benefit Plans on the Closing Date;
(c) For Transferred Employees, the terms of their participation in
Buyer's employee benefit plans, including credit for past service or
contributions shall be determined by Buyer.
-25-
(d) If applicable, Buyer agrees to permit and shall modify its
existing defined 401(k) plan to the extent necessary to permit a
trustee-to-trustee transfer from Seller's 401(k) plan of the vested
account balances of participants in that plan who become employees of
Buyer. Seller will cause the vested account balances of participants in
Seller's 401(k) plan who become employees of Buyer to be transferred to
Buyer's 401(k) plan in a trustee-to-trustee transfer.
(e) Past service credit and credit for plan year deductibles under
this Section 8.2 will only be given by Buyer to the Transferred Employees,
and Buyer shall only be required to comply with Section 8.2(d), if no
overly burdensome plan amendments to Buyer's plans are necessary and no
significant expense would be incurred to implement such provisions.
8.3 Training.
--------
Seller shall permit Buyer to train the Transferred Employees during
the 30 day period before Closing with regard to Buyer's operations, policies and
procedures at Buyer's sole cost and expense. This training shall take place
outside of normal business hours and may, at Seller's option, take place at the
Branch.
IX. CLOSING AND CONDITIONS TO CLOSING
9.1 Time and Place of Closing.
-------------------------
The Closing shall be on a date mutually agreed upon by the parties
(the date of the Closing, the "Closing Date"), which shall be no more than 45
days after the last regulatory approval or non-objection necessary for the
Closing has been obtained (without regard to any statutory waiting periods
following such approval), but in no event later than February 28, 2007 to the
extent feasible and acceptable to Seller's and Buyer's respective data
processing services. The Closing shall take place at Seller's offices located at
226 Landis Avenue, Vineland, New Jersey 08360 at 10:00 a.m. on the Closing Date,
or at a time and place otherwise determined by mutual agreement of the parties.
9.2 Exchange of Closing Documents.
-----------------------------
The parties shall exchange drafts of all documents to be delivered
at the Closing (including a preliminary Closing Statement) at least three (3)
Business Days prior to the Closing Date.
9.3 Buyer's Conditions to Closing.
-----------------------------
Buyer's obligations to purchase the Assets and assume the
Liabilities is contingent upon and subject to the fulfillment of the following
conditions in all material respects:
(a) the parties obtaining all regulatory approvals which are
required in order for them to proceed with the transactions contemplated
by this Agreement and the expiration of any required waiting period
without the commencement of adverse proceedings by any governmental
authority with jurisdiction over the transactions
-26-
contemplated by this Agreement. Notwithstanding the foregoing, regulatory
approval will not be deemed obtained if such approvals obtained impose a
condition or requirement reasonably deemed by Buyer to (i) significantly
limit or impair the ability of the Buyer to operate the Branch as
contemplated by it or materially increase the costs of such operations so
as to eliminate the opportunity for the Buyer to realize a reasonable
return on its investment over time on the operation of the Branch or (ii)
adversely affect in a material way Buyer or its Affiliates with respect to
their present business or activities;
(b) each representation and warranty of Seller in this Agreement
being true and correct in all material respects (without giving effect to
any materiality or Seller Material Adverse Effect qualification provisions
contained therein) as of the Closing Date as though made on the Closing
Date (except to the extent expressly made as of an earlier date, in which
case as of such date) and all covenants and conditions of Seller to be
performed or met by Seller on or before the Closing Date having been
performed or met in all material respects;
(c) Seller's delivery to Buyer of the following documents in form
and substance reasonably satisfactory to Buyer:
(i) bills of sale, assignments and other instruments of
transfer sufficient to convey to Buyer all of Seller's right, title,
and interest in and to the Assets;
(ii) the Assignment of the Leased Realty by the landlord of
the Leased Realty effective as of the Closing Date, including the
Consent to Assignment of the Lease and Estoppel Certificate in a
form substantially similar to the form attached hereto as Exhibit C
with respect to the remaining term of the Lease with respect to the
Leased Realty, duly executed by such landlord;
(iii) a certificate executed by an appropriate officer of
Seller attesting to Seller's compliance with the conditions set
forth in Section 9.3(b);
(iv) documentation executed by both parties with respect to
the transfer of the trusteeship under the Retirement Plans;
(v) any other consents or approvals required, other than
regulatory approvals, if any, related to the transfer of the Fixed
Assets or the Equipment Leases.
(vi) a copy of a resolution of the Board of Directors or the
Executive Committee of Seller approving this Agreement and the
transactions contemplated hereby;
(vii) a certificate from the Secretary or Assistant Secretary
of Seller as to the incumbency and signatures of officers attesting
to the authority of such officers to execute and deliver this
Agreement and all related documents; and
-27-
(viii) such other instruments and documents as shall be
reasonably requested by Buyer, all of which instruments and
documents (as well as those listed above) shall be reasonably
acceptable to Buyer; and
(d) Buyer's agreement to receive the Closing Statement and the
Settlement Payment as provided in Section 3.2, in a form substantially
similar to that furnished pursuant to Section 9.2 herein, and Buyer's
receipt in immediately available funds of the Settlement Payment.
(e) The absence of any Seller Material Adverse Effect.
(f) The absences of any instituted or threatened claim, suit, damage
or litigation seeking to restrain the transaction contemplated by the
Agreement which is reasonably evaluated so as to have the effect of
materially impairing the Buyer's ownership of the Assets or the operation
of the Branch.
9.4 Seller's Conditions to Closing.
------------------------------
Seller's obligation to sell the Assets and transfer the
Liabilities to Buyer is contingent upon and subject to the fulfillment of the
following conditions in all material respects:
(a) the parties obtaining all regulatory approvals which are
required in order for them to proceed with the transactions contemplated
by this Agreement and the expiration of any required waiting period
without the commencement of adverse proceedings by any governmental
authority with jurisdiction over the transactions contemplated by this
Agreement; Notwithstanding the foregoing, regulatory approval will not be
deemed obtained if such approvals obtained impose a condition or
requirement reasonably deemed by Buyer to (i) significantly limit or
impair the ability of the Buyer to operate the Branch as contemplated by
it or increase the costs of such operations so as to eliminate the
opportunity for the Buyer to realize a reasonable return on its investment
over time on the operation of the Branch or (ii) adversely affect in a
material way, Buyer or its Affiliate with respect to their present
business or activities.
(b) each representation and warranty of Buyer in this Agreement
being true and correct in all material respects as of the Closing Date and
all covenants and conditions of Buyer to be performed or met by Buyer on
or before the Closing Date having been performed or met in all material
respects;
(c) Buyer's delivery to Seller of the following documents in form
and substance reasonably satisfactory to Seller:
(i) one or more executed instruments assuming the Deposits and
all other Liabilities; and
(ii) a certificate executed by an appropriate officer of Buyer
attesting, to the officer's best knowledge, to Buyer's compliance
with the conditions set forth in Section 9.4(b).
-28-
9.5 Survival of Representations and Warranties.
------------------------------------------
Unless provided otherwise in this Agreement, Buyer's and Seller's
representations and warranties under this Agreement or contained in any
certificate, instrument or document delivered by either party at the Closing or
otherwise in accordance with this Agreement shall survive the Closing Date for a
period of one year. Notwithstanding the foregoing, for tax matters set forth in
this Agreement and for title representations and warranties set forth in Section
4.5 for Fixed Assets, Buyer's and Seller's representations and warranties under
this Agreement or contained in any certificate, instrument or document delivered
by either party at the Closing or otherwise in accordance with this Agreement
shall survive the Closing Date for the applicable statute of limitations period.
ARTICLE X. TERMINATION
10.1 Termination by Either Party.
---------------------------
Either party may terminate this Agreement upon written notice to the
other if:
(a) as a result of any material breach of any representation,
warranty or covenant, the party terminating this Agreement has given the
other party written notice of such breach and such breach is not cured
within 30 days thereafter;
(b) the Closing does not occur on or before February 28, 2007;
(c) the other party so agrees in writing; or
(d) Seller fails to obtain the necessary Assignment of the Leased
Realty after Buyer and Seller both make commercially reasonable efforts to
obtain such assignment, including the refusal by the landlord of the
Leased Realty to execute the Consent to Assignment of Lease and Estoppel
Certificate, in a form substantially similar to the form attached hereto
as Exhibit C.
The termination of this Agreement under subsection (a) shall not
absolve the breaching party from any liability to the other party arising out of
its breach of this Agreement.
ARTICLE XI. MISCELLANEOUS
11.1 Continuing Cooperation.
----------------------
(a) On and after the Closing Date, Seller agrees to execute,
acknowledge and deliver such documents and instruments as Buyer may
reasonably request to vest in Buyer the full legal and equitable title to
the Assets and Liabilities.
(b) On and after the Closing Date, Buyer shall execute, acknowledge
and deliver such documents and instruments as Seller may reasonably
request to relieve and discharge Seller from its obligations with respect
to the Liabilities.
(c) Seller and Buyer shall cooperate with each other in connection
with any examination conducted by any tax authority subsequent to the
Closing Date by promptly
-29-
providing upon request information relating to the tax liability of any
business operated by Seller or Buyer with respect to the Branch and
promptly informing the other of the institution of, any material
developments concerning, and the outcome of, the same.
(d) Except as provided in Section 7.2, no interest in or right to
use Sun National Bank's logo or its name, or any other similar word, name,
symbol or device in which Seller has any interest by itself or in
combination with any other word, name, symbol or device, or any similar
variation of any of the foregoing (collectively, the "Retained Names and
Marks") is being transferred to Buyer pursuant to the transactions
contemplated hereby. Unless permitted pursuant to Section 7.2, Buyer shall
not after the Closing Date in any way knowingly use any materials or
property, whether or not in existence on the Closing Date, that bear any
Retained Name or Mark. Buyer agrees that Seller shall have no
responsibility for claims by third parties arising out of, or relating to,
the use by Buyer of any Retained Name or Mark after the Closing Date, and
Buyer agrees to indemnify and hold harmless Seller from any and all claims
(and all expenses, including reasonable attorneys' fees and disbursements
incurred in connection with any such claim) that may arise out of the use
thereof by Buyer.
11.2 Merger and Amendment.
--------------------
This Agreement sets out the complete agreement of the parties with
respect to the matters discussed in this Agreement, and it supersedes all prior
agreements between the parties, whether written or oral, which apply to these
matters. No provision of this Agreement may be changed or waived except as
expressly stated in a document executed by both parties.
11.3 Dispute Resolution.
------------------
Any controversy or claim arising out of or relating to this
Agreement, or the breach thereof, shall be settled exclusively by arbitration in
accordance with the rules for commercial arbitration then in effect at the
district office of the American Arbitration Association ("AAA") nearest to
Vineland, New Jersey, and judgment upon the award rendered may be entered in any
court having jurisdiction thereof, except to the extent that the Parties may
otherwise reach a mutual settlement of such issue.
11.4 Indemnification.
---------------
After the Closing Date, and unless otherwise provided in the
Agreement:
(a) Buyer shall indemnify and hold Seller harmless from and against
all claims, lawsuits, costs (including reasonable counsel fees) and
liabilities which arise out of or relate to transactions or operations at
the Branch after the Closing Date, and from any loss or damage resulting
from any breach by Buyer of any representation, warranty or covenant of
Buyer contained in this Agreement. If any claim or lawsuit is made or
commenced as to which Seller proposes to demand such indemnification, it
shall notify Buyer with reasonable promptness; provided, however, that any
failure by Seller to notify Buyer shall not relieve Buyer from its
obligations hereunder, except to the extent that Buyer is actually
prejudiced by such failure to give notice. Buyer shall have the option of
-30-
defending such claim or lawsuit with counsel of its own choosing at its
own cost and expense and such counsel shall, to the extent consistent with
its professional responsibilities, cooperate with Seller and any counsel
designated by Seller. Buyer shall be liable for any settlement of any
claim or lawsuit against Seller made with Buyer's written consent, which
consent shall not be unreasonably withheld.
(b) Seller shall indemnify and hold Buyer harmless from and against
all claims, lawsuits, costs (including reasonable counsel fees) and
liabilities which arise out of or relate to transactions or operations at
the Branch on or before the Closing Date, including, but not limited to
the tax liabilities, and from any loss or damage resulting from any breach
by Seller of any representation, warranty or covenant of Seller contained
in this Agreement or in any certificate or other document delivered by
Seller in connection with this Agreement. If any claim or lawsuit is made
or commenced as to which Buyer proposes to demand such indemnification, it
shall notify Seller with reasonable promptness; provided, however, that
any failure by Buyer to notify Seller shall not relieve Seller from its
obligations hereunder, except to the extent Seller is actually prejudiced
by such failure to give notice. Seller shall have the option of defending
such claim or lawsuit with counsel of its own choosing at its own cost and
expense and such counsel shall, to the extent consistent with its
professional responsibilities, cooperate with Buyer and any counsel
designated by Buyer. Seller shall be liable for any settlement of any
claim or lawsuit against Buyer made with Seller's written consent, which
consent shall not be unreasonably withheld.
(c) Notwithstanding anything to the contrary contained in this
Section 11.4, no indemnification shall be required to be made by either
party until the aggregate amount of all such claims by a party exceeds
$10,000.
(d) Any disputes between the parties arising from claims for
indemnification brought under this Section 11.4 shall be subject to the
provisions of Section 11.3
(e) Affiliates of the Buyer and the Seller shall each be entitled to
the benefit of the indemnification provisions contained in this Section
11.4 as if named as an additional indemnitee together with the party with
whom it is Affiliated.
(f) Notwithstanding anything in this Agreement to the contrary, for
purposes of determining whether there has been a breach and the amount of
any liability, loss or damage that is the subject matter of an indemnity
claim, each representation or warranty contained in this Agreement shall
be read without giving effect to any materiality or Seller or Buyer
Material Adverse Effect standard or qualification that has the effect of
making such representation and warranty less restrictive. Any indemnity
payable pursuant to this Section 11.4 shall be paid within the later of 10
days after the indemnified party's request therefore (in the case of
claims not involving a third party claim) or 10 days prior to the date on
which the loss or expense upon which the indemnity is based is required to
be satisfied or paid by the indemnified party. All indemnification
payments shall include interest at the then prime rate as published from
time to time in the Wall Street Journal plus 200 basis points per annum
accruing from the
-31-
date that the indemnified party incurs the indemnified liability, loss or
damage up to and including the date of payment.
11.5 Counterparts.
------------
This Agreement may be executed in any number of counterparts, each
of which will constitute an original, but all of which taken together shall
constitute one and the same instrument.
11.6 Exhibits and Schedules.
----------------------
All exhibits and schedules referred to in this Agreement shall
constitute a part of this Agreement.
11.7 Assignment.
----------
This Agreement is not assignable by either party without the written
consent of the other party, which shall not be unreasonably withheld.
11.8 Headings.
--------
The headings contained in this Agreement are inserted for
convenience only and shall not affect the meaning of this Agreement or any of
its provisions.
11.9 Notices.
-------
Any notice under this Agreement shall be made in writing and shall
be deemed given when delivered in person, when delivered by first class mail
postage prepaid (in which case the notice shall be deemed given on the third
Business Day following the date on which the notice is postmarked), or when
delivered by facsimile transmission, which transmission also shall be sent by
first class mail, postage prepaid before the second Business Day following the
transmission (in which case the notice shall be deemed given on the day
transmitted if transmitted before or during normal business hours or, otherwise,
on the next succeeding Business Day) to the parties at the respective addresses
set forth below or at such other addresses as each party shall inform the other
in writing.
If to Buyer to: Edward R. Wright
Senior Vice President and Chief Financial Officer
City National Bank of New Jersey
900 Broad Street
Newark, New Jersey 07102
If to Seller to: Dan A. Chila
Executive Vice President and Chief Financial Officer
Sun National Bank
226 Landis Avenue
Vineland, New Jersey 08360
-32-
With a copy to: Malizia Spidi & Fisch, PC
901 New York Avenue, NW
Suite 210 East
Washington, DC 20001
Attention: Richard Fisch, Esq.
11.10 Expenses.
--------
Unless specifically stated to the contrary in this Agreement, each
party will assume and pay for the expenses it incurs with respect to the
purchase and sale of the Assets and assumption of the Liabilities under this
Agreement, including, without limitation, that each party shall pay all fees and
expenses associated with obtaining the required regulatory approvals with
respect to such party. Each party shall be responsible for any fee payable to
any agent, broker or finder acting on its behalf in this transaction.
11.11 Notice to Customers/Public Disclosures.
--------------------------------------
As mutually agreed upon by the parties, Buyer and/or Seller shall
notify holders of all accounts at the Branch prior to the Closing Date of the
Transaction and its impact on such account holders.
(a) Any press release, public notice or notice to local officials
regarding this Agreement or the transactions contemplated herein to be
made prior to the Closing Date shall be approved in writing by both
parties prior to its release, unless such release or notice is mandated by
law, regulations or regulatory authority. Where required, the approval of
either party shall not be unreasonably withheld. Where approval is not
required, the parties, nevertheless agree to confer prior to any such
release or notice.
(b) After all applicable regulatory approvals have been received,
Buyer shall, at its expense, mail a notice to all depositors of the Branch
whose accounts are to be assumed notifying them of the impending transfer
of the banking business for that Branch to Buyer. Prior to mailing, Buyer
shall submit the proposed form of such notice to Seller for review and
approval, which approval shall not be unreasonably withheld.
(c) After all applicable regulatory approvals have been received,
Seller shall, at its expense, mail a notice to all depositors of the
Branch whose accounts are to be assumed for the purpose of advising them
of the transactions contemplated by this Agreement. Prior to mailing,
Seller shall submit the proposed form of such notice to Buyer for review
and approval, which approval shall not be unreasonably withheld.
Alternatively, Seller may, at no expense to Seller, fulfill its
obligations under this subsection (c) by joining in the notice to be
mailed by Buyer pursuant to subsection (b) hereinabove.
11.12 Governing Law; Jurisdiction.
---------------------------
This Agreement and the legal relations between the parties shall be
governed by and construed in accordance with the laws of the State of New Jersey
applicable to contracts
-33-
made and to be performed entirely within the State of New Jersey, except to the
extent that federal law shall be deemed to apply.
11.13 No Third Party Beneficiaries.
----------------------------
The parties intend that this Agreement shall not benefit or create
any right or cause of action in or on behalf of any Person other than Seller and
Buyer.
IN WITNESS WHEREOF, each of the parties to this Agreement has caused this
Agreement to be executed by a duly authorized officer as of the date first
written on page one of this Agreement.
Sun National Bank (Seller)
/Dan A. Chila/
-------------------------------------------
By: Dan A. Chila
Its: Executive Vice President and Chief
Financial Officer
City National Bank of New Jersey (Buyer)
/Louis E. Prezeau/
-------------------------------------------
By: Louis E. Prezeau
Its: President and Chief Executive Officer
-34-
AMENDMENT TO THE
BRANCH PURCHASE AND ASSUMPTION AGREEMENT
This Amendment to the Agreement, dated as of March 8, 2007, is made
by and between Sun National Bank, a national banking association organized under
the laws of the United States of America and having its principal place of
business in Vineland, New Jersey ("Seller"), and City National Bank of New
Jersey, a national banking association organized under the laws of the United
States of America and having its principal place of business in Newark, New
Jersey ("Buyer").
Whereas the Seller and the Buyer have previously entered into the Branch
Purchase and Assumption Agreement, dated November 1, 2006 ("Agreement"), and
Whereas, the parties now wish to make certain amendments to such Agreement
("Amendment") in order to more closely reflect the intentions of the parties.
The parties, intending to be legally bound, do hereby agree as follows:
1. Section 3.1 of the Agreement shall be amended by adding the
following new Section 3.1(i) to provide as follows:
(i) the aggregate unpaid principal balance plus accrued and unpaid
interest as of the Closing Date with respect to the Loans.
Nothing contained herein shall be held to alter, vary, or affect any of the
terms, provisions, or conditions of the Agreement other than as stated above.
Except as noted herein, all of the provisions of the Agreement shall remain in
full force and effect.
IN WITNESS WHEREOF, each of the parties to this Amendment to the Agreement
has caused this Amendment to the Agreement to be executed by a duly authorized
officer as of the date first written above.
Sun National Bank (Seller)
/Dan A. Chila/
-------------------------------------------
By: Dan A. Chila
Its: Executive Vice President and Chief
Financial Officer
City National Bank of New Jersey (Buyer)
/Louis E. Prezeau/
-------------------------------------------
By: Louis E. Prezeau
Its: President and Chief Executive Officer
-1-