SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported)
December 20, 1996
SUN BANCORP, INC.
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(Exact name of Registrant as specified in its Charter)
New Jersey 0-20957 52-1382541
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(State or other jurisdiction (SEC File No.) (IRS Employer
of incorporation) Identification
Number)
226 Landis Avenue, Vineland, New Jersey 08360
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (609) 691-7700
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Not Applicable
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(Former name or former address, if changed since last Report)
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SUN BANCORP, INC.
INFORMATION TO BE INCLUDED IN REPORT
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Item 5. Other Events.
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On December 20, 1996, Sun Bancorp, Inc. (the "Corporation"), the holding
company for Sun National Bank (the "Bank"), announced that the Bank had entered
into a Purchase and Assumption Agreement (the "Agreement") to acquire four
branch offices, certain loans and $75 million of deposits from First Union
National Bank, Avondale, Pennsylvania ("First Union"). In connection with the
acquisition, the Bank has agreed to pay First Union a premium of approximately
$6 million. Consummation of the transaction is subject to, among other
conditions, regulatory approval.
A copy of the Agreement dated December 19, 1996, and the press release
issued by the Corporation on December 20, 1996, are attached hereto as Exhibits
99.1 and 99.2, respectively, and incorporated herein by reference in their
entirety.
Item 7. Financial Statements, Pro Forma Financial
Information and Exhibits
-----------------------------------------
(c) Exhibits:
99.1 Purchase and Assumption Agreement dated
December 19, 1996.
99.2 Press Release dated December 20, 1996.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned, thereunto duly authorized.
SUN BANCORP, INC.
Date: December 23, 1996 By: /s/Philip W. Koebig, III
----------------- ------------------------------
Philip W. Koebig, III
Executive Vice President
EXHIBIT 99.1
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PURCHASE AND ASSUMPTION AGREEMENT
---------------------------------
This Agreement, dated as of December 19, 1996, is by and between Sun
National Bank, a national banking association having its principal place of
business in Medford, New Jersey ("Buyer"), and First Union National Bank, a
national banking association having its principal place of business in Avondale,
Pennsylvania ("Seller").
I. DEFINITIONS
1.1 Certain Defined Terms.
---------------------
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.
"ATM" means automatic teller machine.
"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 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.
"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.
"Branches" means those branch offices of Seller listed on
Schedule 1.1 to this Agreement.
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"Business Day" means any Monday, Tuesday, Wednesday, Thursday or
Friday on which Seller is open for business.
"CBCT" means customer branch communications terminal.
"Cash Reserve Lines of Credit" means those consumer lines of
credit made available to customers of the Branches as a protection against
overdrafts on Deposit Accounts.
"Cash Reserve Loans" means those loans outstanding on the Closing
Date pursuant to Cash Reserve Lines of Credit.
"Closing" means the purchase of the Assets by Buyer and the
assumption of the Liabilities by Buyer on the Closing Date.
"Closing Date" has the meaning set forth in Section 9.1 of this
Agreement.
"Commercial Loans" means these loans listed on Schedule 1.2 to
this Agreement; provided, however, that any such loans may be excluded by Buyer,
upon giving written notice to Seller at least thirty (30) days prior to Closing,
if Buyer has reasonably determined that such loans are materially deficient.
"Deposit Accounts" means the deposit accounts at the Branches,
the balances of which are included in the Deposits or would be so included if
the Deposit Account had a positive balance, excluding any deposits held in the
CAP accounts relating to the Branches.
"Deposits" means all deposits (as defined in 12 U.S.C. Section
1813(l)) which are booked at the Branches 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), and (ii) deposits constituting
official checks, travelers checks, money orders or certified checks.
"Equipment Leases" means those operating and financial leases and
conditional sales contracts covering Fixed Assets which Seller may assign to
Buyer without restriction or with the lessor's written consent.
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"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 Internal
Revenue Code of 1986, as amended.
"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 (excluding artwork owned by Seller), vaults,
safe deposit boxes, equipment (including, for example, all ATM machines, but
excluding any computer or telecommunications equipment), supplies (other than
forms and other supplies which bear Seller's name or logo), and other personal
property, which are owned or (to the extent of Seller's interest as lessee)
leased by Seller, which are located at the Branches on the Closing Date.
"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.
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"Leased Branches" means all premises of the Branches which are
leased under the Real Property Leases.
"Liabilities" has the meaning set forth in Section 2.2 of this
Agreement.
"Mediator" means the firm of KPMG Peat Marwick LLP or such other
firm of certified public accountants mutually agreeable to Seller and Buyer.
"Overdrafts" means those overdrafts of the book balance of any
Deposit Accounts which are not subject to Cash Reserve Lines of Credit.
"Person" means an association, a corporation, an individual, a
partnership, a trust or any other entity or organization, including a
Governmental Entity.
"Real Property" means the land (including the improvements
thereon) owned by Seller on which any Branches are located.
"Real Property Leases" means the lease agreements pursuant to
which any Branches are leased by Seller.
"Retirement Plans" means those non-discretionary individual
retirement accounts and qualified retirement plan accounts relating to the
Deposits for which Seller acts as custodian or trustee.
"Training Expenses" means the overtime and out-of-pocket expenses
(meals and mileage) incurred by Seller as a result of Buyer's training schedule
prior to Closing.
"Welfare Benefit Plans" means those Benefit Plans which are
"welfare benefit plans" as defined by ERISA.
"Working Agreement" has the meaning set forth in Section 2.7 of
this Agreement and the terms of the Working Agreement shall be incorporated into
this Agreement.
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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 (the "Assets") and Buyer agrees
to purchase the same from Seller, as of the close of business on the Closing
Date:
(a) the Real Property;
(b) the Fixed Assets;
(c) cash on hand in the Branches;
(d) the Cash Reserve Loans;
(e) the Commercial Loans;
(f) the Overdrafts; and
(g) Seller's rights under the Cash Reserve Lines of Credit and
any safe deposit box rental agreements and prepaid rents relating to
safe deposit boxes located at the Branches.
2.2 Assumption of Liabilities.
-------------------------
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 Accounts;
(b) Seller's duties and responsibilities relating to the Deposits
with respect to: (i) the abandoned property laws of any state, (ii)
any legal process which is served on Seller on or before the Closing
Date with respect to claims against or for the Deposits or (iii) any
other applicable law;
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(c) Seller's duties and responsibilities with respect to the Real
Property Leases and the Equipment Leases;
(d) Seller's duties and responsibilities with respect to the Cash
Reserve Lines of Credit and the Commercial Loans;
(e) Seller's duties and responsibilities with respect to the safe
deposit boxes located at the Branches; and
(f) Seller's duties and responsibilities with respect to the
Retirement Plans.
2.3 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 Branches.
(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.
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.
2.4 Tax Matters.
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(a) Notwithstanding Section 2.5, 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.
(b) Notwithstanding Section 2.5, Seller shall pay to Buyer or the
relevant taxing jurisdiction (as appropriate
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under the circumstances), or reimburse Buyer if Buyer shall have paid,
any real property transfer, recording and similar documentary taxes
arising out of the transfer of the Real Property, the Leased Branches,
the Real Property Leases and the Fixed Assets.
(c) The Buyer shall within 15 days of the date hereof file an
appropriate Notification of Sale, Transfer, or Assignment in Bulk for
each of the Branches with the Division of Taxation. The Seller shall
provide such information to the Buyer as may be necessary or desirable
to allow such filing, and Seller will cooperate with the Division of
Taxation in its determination of the sum to be placed in escrow by the
Purchaser.
(d) Buyer and Seller will comply with the Bulk Sales Act of the
State of New Jersey, as applicable (the "Bulk Act"). Seller shall be
liable for payment of all taxes due as a result of all transactions
with respect to its business and the Branches subject to the Bulk Act
occurring on or prior to the Closing Date. The parties shall
coordinate the filing of all notices and applications for the same not
less than ten (10) days prior to the Closing Date. Seller shall
cooperate with any filing requirements and notice provisions regarding
the same. Buyer shall establish any escrows determined to be necessary
to be established as requested by the New Jersey Department of
Taxation to protect the interests of the Buyer and the State of New
Jersey for any unpaid tax liabilities. Such sums to be paid in escrow
by Buyer shall reduce the amount due to the Seller as of the Closing
Date. The balance of such escrow funds shall be returned to the Seller
following issuance of the tax clearance letter by the State of New
Jersey.
2.5 Proration of Certain Items.
--------------------------
Subject to the provisions of Section 2.4, all rentals, real
estate taxes, personal property taxes (tangible or intangible), and utility,
water and sewer charges and assessments, and safe deposit rental prepayments as
well as assessments paid to the Bank Insurance Fund with respect to the
Deposits, shall be prorated between Buyer and Seller as of the close of business
on the Closing Date.
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2.6 Back Office Conversion.
----------------------
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 Saturday
following the Closing Date.
2.7 Processing of Certain Items After Closing.
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A draft of the written practices and procedures under which Buyer
and Seller shall handle all items (including, for example, automated clearing
house and electronic funds transfer items) relating to the Assets and the
Liabilities, which are presented or returned following the Closing Date, and any
claims relating to such items are attached to this Agreement as Exhibit A,
including certain other matters relating to consummation of the transactions
contemplated hereby (the "Working Agreement"). As promptly as practicable
following the execution of this Agreement, the parties agree to finalize the
Working Agreement.
2.8 Information Returns.
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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 the Cash Reserve 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 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 Cash Reserve 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.
2.9 Allocation of Purchase Price.
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The consideration paid under Section 3.1 and the Liabilities
assumed by the Buyer pursuant to this Agreement shall be allocated in accordance
with Section 1060 of the Internal Revenue Code of 1986, as amended (the "Code").
The Seller and the Buyer shall cooperate to comply with all substantive and
procedural requirements of Section 1060 of the Code and any regulations
thereunder.
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 an amount equal to
the Deposits, plus accrued interest thereon, less the sum of the following, in
each case calculated as of the close of business on the Closing Date:
(a) $39,889, $21,451, $14,550, and $7,199, representing the
purchase price of the Fixed Assets for the Salem Branch, the Woodstown
Branch, the Carney's Point Branch and the Florence Branch,
respectively; provided, however, that such amounts shall be adjusted
to reflect the net book value of the Fixed Assets at the respective
Branches as of the Closing Date;
(b) $185,792, $369,049 and $240,541, representing the purchase
price of the Real Property for the Salem Branch, the Woodstown Branch,
and the Carney's Point Branch, respectively; provided, however, that
such amount shall be adjusted to reflect the net book value of the
Real Property as of the Closing Date;
(c) the principal amount of the Cash Reserve Loans, plus accrued
interest thereon;
(d) the principal amount of the Commercial Loans, plus accrued
interest thereon;
(e) the amount of cash on hand at the Branches;
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(f) the principal amount of the Overdrafts;
(g) the net amount (which may be a negative amount) of taxes
payable by Buyer and Seller under Section 2.4 (i.e., the amount
payable by Buyer less the amount payable by Seller);
(h) the net amount (which may be a negative amount) of any
adjustments under Section 2.5 (i.e., the amount payable by Buyer less
the amount payable by Seller);
(i) an amount equal to 8.03 percent of the average of the
Deposits at the Branches for the calendar month preceding the month
during which the Closing Date occurs (the "Amount of Premium");
provided, however, that for purposes of calculating the Amount of
Premium, the amount of Deposits shall (x) not include municipal deposits
over $100,000 per account with a maturity of less than one year, (y) not
include brokered deposits, and (z) be subject to adjustment to reflect
certain deposit relationships mutually agreeable to Buyer and Seller;
and
(j) the Training Expenses.
3.2 Settlement.
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(a) Not later than on the first Saturday following 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 B
to this Agreement, which shall be completed as of the Closing Date and
be the basis of the payment to be made to Buyer's account on the Monday
following the Closing Date (the "Settlement Payment"). Seller shall pay
interest on the Deposits through and including the Sunday immediately
following the Closing Date.
(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
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Exhibit C 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 (d) (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 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
submit the matter to the Mediator, which shall determine all disputed
portions of the Adjusted Closing Statement in accordance with the
terms and conditions of this Agreement within 30 days after the
submission. The parties shall each pay half of the fees and expenses
of the Mediator, except that the Mediator may assess the full amount
of its fees and expenses against either party if it determines that
party negotiated the Adjusted Closing Statement in bad faith. The
Adjusted Closing Statement, as agreed upon by the parties and/or
determined under this subsection, shall be final and binding upon the
parties.
(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.
IV. SELLER'S REPRESENTATIONS AND WARRANTIES
Seller makes the following representations and warranties to Buyer.
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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 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 financial condition, business or
operations of the Branches, 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 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 nonconsent.
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 lessor
consents to the
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assignment of the Real Property Leases and the Equipment Leases and as may be
required as a result of any facts or circumstances relating solely to Buyer.
4.4 Real Property.
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(a) Schedule 4.4(a) contains a list of all the Real Property.
(b) Seller will convey good and marketable title, such as is
insurable by any reputable title insurance company, to the Real
Property, free and clear of all encumbrances, except for easements and
restrictions of record, applicable zoning laws, building restrictions
and all other laws of duly constituted public authorities, grants of
public rights of way, standard exceptions in the title insurance policy,
the rights of landlords under any ground leases relating to the Real
Property, the rights of any tenants, and liens for taxes and assessments
not delinquent. Seller shall maintain in effect from the date of this
Agreement until the Closing Date, all property, liability, fire and
casualty insurance in effect as of the date hereof with regard to the
Branches, including the structures, leasehold improvements and Fixed
Assets relating to the Branches.
(c) To the knowledge of Seller, Seller has not received any
written notice of violation, citations, summonses, subpoenas, compliance
orders, directives, suits, other legal process, or other written notice
of potential liability under applicable environmental, zoning, building,
fire and other applicable laws and regulations relating to the Branches.
(d) To the knowledge of Seller, Seller has received no written
notice of a condemnation proceeding relating to the Branches.
4.5 Ownership of Cash Reserve Loans.
Seller has full power and authority to hold each Cash
Reserve Loan, and has good title to the Cash Reserve Loans free and clear of all
liens and encumbrances. Seller is authorized to sell and assign the Cash Reserve
Loans to Buyer and, upon such
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assignment, Buyer will have the rights of Seller with respect to the Cash
Reserve Loans in accordance with the terms and conditions thereof.
4.6 Validity of and Compliance with Real Property Leases.
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The Real Property Leases are valid and existing leases
under which Seller, as lessee, is entitled to possession of the leased
premises. To Seller's knowledge, Seller has received no written notice
of an event that has occurred and is continuing, which constitutes a
default under any of the Real Property Leases. Subject to Seller
obtaining any necessary landlord consents, and subject to Seller
obtaining the executed extension of the Real Property Lease relating to
the Florence Branch from the landlord, the assignment of such leases
will transfer to Buyer all of Seller's rights under the Real Property
Leases.
4.7 Compliance with Certain Laws.
----------------------------
The Deposit Accounts and the Cash Reserve Lines of Credit were
opened, extended or made, and have been maintained, in accordance with all
applicable federal and state laws, regulations, rules and orders, and the
Branches have 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 Federal Deposit Insurance
Corporation through the Bank Insurance Fund and the Savings Association
Insurance Fund, as applicable, 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 Ownership of Commercial Loans.
-----------------------------
Seller has full power and authority to hold each Commercial Loan
and has good title to the Commercial Loans free and clear of all liens and
encumbrances. Seller is authorized to
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sell and assign the Commercial Loans to Buyer and, upon such assignment, Buyer
will have the rights of Seller with respect to the Commercial Loans in
accordance with the terms and conditions thereof.
4.10 Absence of Employment Agreements.
--------------------------------
Except as disclosed on Schedule 4.10, to this Agreement, there
are no employment agreements, contracts, incentive plans (other than such
agreements, contracts and plans that will terminate automatically on the Closing
Date) or disputes between Seller and Seller's Employees at the Branches, whether
written or otherwise, relating to wages, hours, terms of employment, benefits or
working conditions.
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 Association, 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").
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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 nonconsent.
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 what may be required as a
result of any facts or circumstances relating solely to Seller.
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 Branches as Buyer may reasonably
request, provided that Buyer does not unreasonably interfere with the
Branches' 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.
(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,
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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, 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 Branches' business and
negotiating and concluding management employment contracts, employee
benefit plans, and new incentive plans 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 Matters Relating to Branch Closing.
----------------------------------
In the event that Buyer intends to close any of the Branches on
the Closing Date or before ninety (90) days thereafter, Buyer and Seller agree
to the following:
(a) Subject to subsection (b), Seller and Buyer shall prepare
Branch closing notices to Seller's customers, to be mailed by Seller at
Buyer's request and expense, at such time as shall be mutually agreed
upon between Buyer and Seller. Seller and Buyer also shall prepare
another notice to Seller's customers, to be mailed by Seller at Buyer's
request and expense, of Buyer's impending acquisition of the Branches
within ten Business Days following Seller's receipt of notice that Buyer
has obtained any and all required regulatory approvals for the
transactions contemplated by this Agreement or such earlier date as
Seller and Buyer may mutually agree upon. After Seller mails this
notice,
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Buyer shall be permitted to provide to Seller material to be sent, at
Buyer's expense, to the depositors, borrowers and other customers of
the Branches concerning the proposed acquisition and Buyer's products.
Each party's communication shall be subject to the approval of the
other party, which approval shall not be unreasonably withheld.
(b) Unless Buyer shall certify in writing at the time that (x)
Buyer is not aware of the occurrence of any event or condition, which,
if not corrected, would be reasonably expected to result in the
failure of any condition to Closing under Sections 9.3 or 9.4; (y)
Buyer has no reason to believe that any regulatory approval required
under Section 9.3(a) will not be forthcoming, and (z) no challenge has
been threatened or filed and is pending with respect to any such
regulatory approval:
(i) Buyer shall not take any action with respect to any
of the Branches which would require that notices be posted or
provided to customers or regulators, as required by 12 U.S.C.
Section 1831r-1, on or prior to the Closing Date; and
(ii) Seller shall not be required to participate in the
closing of any Branch or in any notice to customers relating to
such a closing.
6.3 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 also agrees to cooperate
with Buyer in obtaining any regulatory approval which 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.
6.4 Conduct of Business.
-------------------
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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
Branches until the Closing in the ordinary course of business, consistent with
prudent business practices. Seller shall not terminate the operation of any
Branch, unless those operations cease due to events beyond Seller's control.
Seller will notify Buyer of any event of which Seller obtains knowledge which
would make any of Seller's representations under Article IV of this Agreement
false in any material respect.
6.5 Covenant of Seller not to Compete.
---------------------------------
Seller hereby agrees not to purchase or open a de novo brick and
mortar branch facility (excluding any ATMs or CBCTs) within the county of Salem
in New Jersey and within an area extending 3 miles in all directions from the
location of the Florence Branch for a period of three years from the Closing
Date; provided, however, that Seller, or its affiliates, shall be expressly
permitted to acquire a financial institution notwithstanding the fact that the
financial institution to be acquired has a branch or other facility in such
location.
6.6 Covenant of Seller Not to Solicit.
---------------------------------
Seller hereby agrees that from the date of this Agreement and for
a period of three (3) years after the Closing Date, Seller shall not
specifically target and solicit customers of the Branches whose Deposits are
being purchased by the Seller; provided, however, that nothing in this section
shall: (i) restrict general mass mailings, telemarketing calls, statement
stuffers, advertisements or other similar communications whether in print, on
radio or television, or by other means that are directed to the general public
or to a group of customers who may include customers of the Branches, provided
that such group is defined by criteria other than solely as customers of the
Branches, or (ii) otherwise prevent Seller from taking such actions as may be
required to comply with any applicable federal or state laws, rules or
regulations or from servicing or communicating with the then-current customers
of Seller or its affiliates.
6.7 Assignment of Real Property Leases.
----------------------------------
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Seller shall use its best efforts to cause the landlord to
furnish the Buyer with a statement of the balance of any security deposits held
under such Real Property Leases as of the Closing Date, giving effect to all
deductions that are deemed necessary by the landlord following an inspection of
the Leased Branches as of the Closing Date.
6.8 Industrial Site Recovery Act Letter of Nonapplicability.
-------------------------------------------------------
Seller will make an application for a Letter of Non-applicability
in compliance with the provisions of the Industrial Site Recovery Act ("ISRA")
and shall furnish copies of said application to Buyer.
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 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.
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 Cash Reserve Loans or
Deposits are transferred under this Agreement of the consummation of the
transactions contemplated by this Agreement, and (c) provide all appropriate
notices to the Federal Deposit Insurance Corporation and any other regulatory
authorities required as a result of the consummation of such transactions. Buyer
agrees not to use any
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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 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 Branches 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.
7.3 Real Property.
(a) Except as expressly set forth herein, Buyer hereby
acknowledges and agrees that: (i) Buyer is expressly purchasing the Real
Property in its existing condition "AS IS, WHERE IS, AND WITH ALL
FAULTS" with respect to any facts, circumstances, conditions and
defects; (ii) Seller has no obligation to repair or correct any such
facts, circumstances, conditions or defects or to compensate Buyer for
same; (iii) Seller has specifically bargained for the assumption by
Buyer of all responsibility to inspect and investigate the Real Property
and of all risk of adverse conditions; and (iv) Buyer has or will have
prior to the Closing undertaken all such physical inspections and
examinations of the Real Property as Buyer deems necessary or
appropriate as to the condition of the Real Property. Except as
expressly set forth herein, Buyer acknowledges that Seller has made no
representations or warranties and shall have no liability to Buyer (and
Buyer hereby waives any right to recourse against Seller) with respect
to the conditions of the soil, the existence or nonexistence of
hazardous substances, any past use of the Real Property, the economic
feasibility of the Real Property, or the Real Property's compliance or
noncompliance with all laws, rules or regulations affecting the Real
Property.
(b) Buyer may, at Buyer's option, within forty-five (45) days
from the date of this Agreement, undertake such physical inspections and
examinations of the Real Property and the Leased Real Property, and the
legal title thereto,
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including such inspections of the buildings thereon, as Buyer deems
necessary or appropriate. The cost of any such inspections and
examinations of the Branch buildings shall be responsibility of Buyer
and the cost of any such inspections and examinations of the Real
Property and the Leased Real Property shall be shared equally by both
Buyer and Seller.
(i) If Buyer shall discover a Material Defect, as defined
herein, as a result of Buyer's inspections and examinations Buyer
shall give Seller written notice as soon as possible describing
the facts or conditions constituting such Material Defect and the
measures which Buyer reasonably believes are necessary to correct
such Material Defect. Seller shall promptly notify Buyer whether
Seller elects to cure such Material Defect or terminate the
Agreement with respect to such Branch, unless Buyer elects to
waive such Material Defect. If Seller elects to cure, then Seller
shall have thirty (30) days from the date of the receipt of
Buyer's notice, or such later time, which shall not be later than
the Closing Date, as shall be mutually agreeable to the parties
which agreement shall not be unreasonably withheld, in which to
cure such Material Defect to Buyer's reasonable satisfaction and
Seller's reasonable cure shall be a condition to Buyer's
obligation to purchase the Assets and assume the Liabilities with
respect to such Branch under this Agreement. "Material Defect"
shall mean the existence of (x) a lien or encumbrance on the
legal title to the Real Property, except as previously disclosed
in writing to Buyer by Seller, which materially detracts from the
value of the Real Property, (y) any discharge, disposal, release,
threatened release or emission of any Hazardous Material in the
ground or the structure of the Branch or the existence of any
underground storage tank for which the Buyer has been advised in
writing by its legal counsel that Buyer could become responsible
for the assessment, removal or remediation of such discharge,
disposal, release, threatened release, emission, the existence of
such tank or for other corrective action, (z) with respect to the
buildings, material deficiencies in the plumbing,
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electrical, HVAC, drive thru air transport system, roof, walls,
or foundations.
(ii) With respect to the Branch buildings, Seller shall
cure any Material Defect described in subsection 7.3(b)(i)(z) if
the estimated cost of such cure is less than $20,000 per Branch.
If the estimated cost of such cure exceeds $20,000 per Branch and
Seller elects not to cure, then Buyer may terminate the Agreement
with respect to such Branch unless Buyer agrees to accept the
obligations to cure in excess of $20,000 per Branch.
(iii) With regard to the Leased Branch, Buyer and Seller
understand that conducting the inspections and affecting the cure
of a Material Defect, if any, may require the action or the
consent of the lessor. In the event that the lessor elects not to
undertake such action or give such consent relating to the cure
of a Material Defect, then Buyer may terminate the Agreement with
respect to such Branch.
(c) No information or the contents of any environmental audits,
nor the results of any investigation of the real estate conducted
pursuant to this section, including, but not limited to, the contents of
the report issued in connection therewith, shall be disclosed by Buyer
or its agents, consultants or employees to any third party without
Seller's prior written approval, unless and until Buyer is legally
compelled to make such disclosure under applicable laws or until Buyer
completes its purchase of the Real Property pursuant to this Agreement.
Notwithstanding the foregoing, Buyer may disclose such matters to its
directors, executive officers, legal counsel and such employees who are
reasonably required to receive such disclosure (such parties being
referred to as "Buyer" for purposes of this section), the specific
identities of whom shall be supplied to Seller prior to any permitted
disclosure to such party by Buyer. If this Agreement is terminated for
any reason, Buyer shall immediately deliver and/or return to Seller any
and all documents, plans and other items furnished to Buyer pursuant to
this section.
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(d) Seller shall provide Buyer with 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.
Should repairs be required in order to qualify for such Certificate(s),
Seller shall be responsible for the costs of such repairs subject to the
limitations set forth in section 7.3(b)(ii) of this Agreement.
VIII. SELLER'S EMPLOYEES
8.1 Transferred Employees.
---------------------
(a) Buyer will offer to employ all of Seller's employees who are
employed at the Branches on the Closing Date (such employees who agree
to be employed by Buyer are hereafter referred to as "Transferred
Employees"), in such a position and at a salary or hourly wage
comparable to that earned by them at the time of the Closing. At least
fifteen calendar days prior to the Closing Date, Buyer shall provide
Seller with a list of the employees to whom Buyer intends to offer
employment along with the positions and salaries or hourly wages to be
offered to such employees. Such offers of employment by Buyer shall be
for a term of at least one year unless terminated for cause and shall be
at the same Branch where such employee is currently employed or at
another branch of the Buyer within 30 miles from such Branch.
(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.
(c) From and after the Closing Date, Buyer shall have no
liability for any accrued and presently due obligations of Seller to or
for the benefit of the Transferred Employees whether arising by
operation of law, by contract or by past practice, which pertain
including, without limitation, accrued wages.
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(d) Seller shall not renegotiate the position or salary or hourly
wage of any of the employees at the Branches prior to the Closing Date,
other than ordinary salary increases and Seller will promptly advise
Buyer if any such employee terminates, or gives notice of intent to
terminate employment with the Seller before the Closing.
8.2 Employee Benefits.
-----------------
(a) (i) Following the Closing, Buyer shall not have any liability
or obligation under any Benefit Plans or any other program or
arrangement of Seller or an ERISA Affiliate thereof under which any
current or former employee of Seller or any of its Affiliates has any
right to any benefits;
(ii) Upon the Closing, the participation of Transferred
Employees in the Benefit Plans shall cease in accordance with the terms
of such plans; and
(iii) With respect to the Transferred Employees, Seller shall be
responsible for any welfare benefits or claims which, by reason of
events which take place on or prior to the Closing Date, become payable
under the terms of any Welfare Benefit Plan. With respect to Transferred
Employees, Buyer shall be responsible for any welfare benefits or claims
in accordance with Buyer's welfare benefit plans which become payable by
reason of events that take place after the Closing Date.
(b) (i) From and after the Closing Date, Buyer shall provide the
Transferred Employees with the employee benefits, if any, provided to
employees of Buyer and its Affiliates, subject to the terms of Buyer's
benefit plans;
(ii) Buyer will grant for purposes 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 under the Welfare Benefit Plans. 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
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<PAGE>
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; and
(iii) Buyer shall take whatever action is necessary, including
amendment of its defined contribution pension plan, to grant to each
Transferred Employee past service credit for purposes of eligibility
and vesting(including any waiting period) under Buyer's defined
contribution pension plan for all periods of service credited to each
such Transferred Employee under the Seller's defined contribution
pension plan. Within 45 days after the Closing Date, Seller shall
provide to Buyer such information as Buyer reasonably requires to
establish the service for the Transferred Employees credited under the
Seller's defined contribution pension plan.
8.3 Training.
--------
Seller shall permit Buyer to train the Transferred Employees
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
business hours and may, at Seller's option, take place at the Branches.
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 "Closing Date") which shall be on a Friday and shall be no more
than 60 days after the last regulatory approval necessary for the Closing has
been obtained (without regard to any statutory waiting periods following such
approval). The Closing shall take place at Seller's offices located at 91 East
Main Street, Moorestown, New Jersey 08057, at 10:00 a.m. on the
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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 (other than the Closing Statement) at least ten
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, including the satisfaction of any conditions
contained in such approvals are required to be satisfied prior to
Closing, 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;
(b) each representation and warranty of Seller in this Agreement
being true and correct in all material respects as of the Closing 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) the Closing Statement;
(ii) Quitclaim deeds conveying the Real Property
relating to the Woodstown and Carney's Point Branches,
respectively, and a bargain and sale deed with covenants against
grantor's acts conveying the Real Property relating to the Salem
Branch;
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(iii) 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 remaining Assets;
(iv) a certificate executed by an appropriate officer
of Seller attesting, to the officer's best knowledge, to Seller's
compliance with the conditions set forth in Section 9.3(b); and
(v) estoppel certificates executed by the lessors of
the Leased Branches; and
(d) Buyer's agreement to receive the Settlement Payment as
provided in Section 3.2.
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, including the satisfaction of any conditions
contained in such approvals are required to be satisfied prior to
Closing, 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;
(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:
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(i) one or more executed assumptions of the Real
Property Leases;
(ii) one or more executed instruments assuming the
remaining Liabilities; and
(iii) 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). 9.5
Survival of Representations and Warranties.
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 or instrument delivered by either party at the Closing shall survive
for a period of one year following the Closing Date.
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 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 within two hundred seventy (270)
days after the date of this Agreement; or
(c) the other party so agrees in writing.
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.
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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 providing upon request
information relating to the tax liability of any business operated by
Seller or Buyer with respect to the Branches 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 First Union National Bank's logo or the name "First Union" 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 the 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
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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.
------------------
(a) Neither Seller nor Buyer shall assert any claim arising out
of or relating to this Agreement (except with respect to claims to be
handled under the Working Agreement or submitted to the Mediator under
Section 3.2(c)), unless:
(i) except for claims arising under or in respect of
Sections 2.4, 2.5 or 11.1(d), the amount in dispute with respect
to any claim exceeds $5,000.00;
(ii) except for claims arising in respect of Sections 2.4,
2.5 or 11.1(d), the aggregate amount of all claims by Buyer or
Seller (as the case may be) which satisfy the preceding clause
exceeds $25,000.00, in which case a claim may be asserted only to
the extent that such threshold has been exceeded;
(iii) except for claims arising under Sections 2.4, 2.5,
or 11.1(d), the aggregate amount of all claims by Buyer or Seller
(as the case may be) shall not exceed the Amount of Premium; and
(iv) except for claims arising under Sections 2.4,
2.5 or 11.1(d), the notification required by Section 11.3(b) (if
any) is given on or before the first anniversary of the Closing
Date.
(b) The parties shall attempt in good faith to resolve any
dispute arising out of or relating to this Agreement promptly by
negotiations, as provided in this subsection
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(b). Either party may give the other party written notice of any
dispute not resolved in the normal course of business. Executives of
both parties at comparable levels at least one step above the
personnel who have previously been involved in the dispute shall meet
at a mutually acceptable time and place within ten days after delivery
of such notice, and thereafter as often as they reasonably deem
necessary, to exchange relevant information and to attempt to resolve
the dispute. If the matter has not been resolved by these persons
within 30 days of the disputing party's notice, or if the parties fail
to meet within ten days, the dispute shall be referred to more senior
executives of both parties who have authority to settle the dispute
and who shall likewise meet to attempt to resolve the dispute. All
negotiations under this subsection (b) are confidential and shall be
treated as compromise and settlement negotiations for purposes of the
Federal Rules of Evidence, applicable state rules of evidence, and
common law. The procedures set forth above will be followed in advance
of litigation of any dispute between the parties; nevertheless, either
party may seek a preliminary injunction or other provisional judicial
relief if in its judgment such an action is necessary to avoid
irreparable damage or to preserve the status quo. Despite any such
action, the parties will continue to participate in good faith in the
procedures set forth in this subsection (b).
(c) Neither party shall have any liability for lost profits or
punitive damages with respect to any claim arising out of or relating
to this Agreement. The sole recourse and remedy of a party hereto for
breach of this Agreement by the other party hereto shall be against
such other party and its assets, and no officer, director, employee,
stockholder or affiliate of any party shall be liable at law or in
equity for the breach by such party of any of its obligations under
this Agreement.
11.4 Indemnification.
---------------
After the Closing Date, and unless otherwise provided in the
Agreement:
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(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 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, and from any
loss or damage resulting from any breach by Seller of any
representation, warranty or covenant of Seller contained in 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 the 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.
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(c) Any claims for indemnification brought under this Section
shall be subject to the provisions of Section 11.3.
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.
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If to Seller to: Jonathan Stern
Senior Vice President
First Union National Bank
550 Broad Street
Newark, New Jersey 07102
with a copy to: Keith D. Lembo, Esq.
Senior Vice President
and Deputy General Counsel
First Union Corporation
One First Union Center, Leg-0630,
31st Floor
Charlotte, North Carolina 28288-0603
If to Buyer to: Ron Seagraves
Director of Corporate Development
Sun National Bank
226 Landis Avenue
Vineland, New Jersey 08360
with a copy to: Ricky Fisch, Esq.
Malizia, Spidi
1301 K Street, NW
Number 700 East
Washington, D.C. 20005
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; provided, however, that Buyer shall pay all fees and expenses
associated with the regulatory application process. Each party shall be
35
<PAGE>
responsible for any fee payable to any agent, broker or finder acting on its
behalf in this transaction.
11.11 Public Announcements.
--------------------
Each party shall consult with the other before making any
announcement or other public communication with respect to the transactions
contemplated by this Agreement and shall furnish a copy of the text to the other
party of the announcement or other communication.
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 made and to be performed entirely within the
State of New Jersey.
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.
11.14 Waiver or Extension.
-------------------
(a) Except with respect to required approvals of the applicable
governmental authorities, either party, by written instrument signed by
an appropriate officer, may extend the time for the performance of any
of the obligations or other acts of the other party and may waive:
(i) any known inaccuracies in the representations or
warranties in any document delivered pursuant hereto, or
(ii) compliance with any of the undertakings,
obligations, covenants or the acts contained herein.
(b) With respect to required approvals of the applicable
governmental authorities, the Seller shall grant an extension to the
Closing Date, of up to 30 days, if Buyer has not received a required
approval, but is diligently and
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in good faith attempting to obtain such approval and has otherwise
satisfied all of its obligations under this Agreement with respect to
seeking regulatory approval and has provided any information requested
by the appropriate governmental regulatory authorities within the time
period specified by such authorities.
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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
written on page one of this Agreement.
SUN NATIONAL BANK
By:
----------------------------------------
Its:
----------------------------------------
FIRST UNION NATIONAL BANK
By:
-----------------------------------------
Its:
----------------------------------------
EXHIBIT 99.2
<PAGE>
[LOGO]
[Sun Bancorp, Inc. Letterhead]
****FOR IMMEDIATE RELEASE**** PAGE 1 OF 2
FOR MORE INFORMATION, CONTACT: Robert F. Mack (609) 691-7700
SUN BANCORP, INC. TO PURCHASE FOUR FIRST UNION BRANCHES
Vineland, NJ....................December 20, 1996
Bernard A. Brown, Chairman and Philip W. Koebig, III, Executive Vice President
of Sun Bancorp, Inc., the Vineland New Jersey parent holding company of Sun
National Bank, announced today that Sun National Bank has signed a definitive
agreement to purchase four New Jersey branches from First Union National Bank.
The branches are located in Salem, Woodstown, Carney's Point and Florence, New
Jersey and have approximately $75 million in deposits.
"We are very pleased for this opportunity to expand our presence in southern
New Jersey," commented Brown. "With the purchsae of these branches, Sun will
have twenty-two financial service centers serving southern New Jersey," he
added.
"Sun prides itself in being a community bank that responds to its customers'
needs" remarked Koebig, who also serves as President and Chief Executive
Officer of Sun National Bank. "This is an exciting opportunity to offer our new
customers a wide range of products and services, while also giving them the
personalized attention of a community bank."
o MORE o
P.O. Box 849 - 226 Landis Avenue - Vineland, New Jersey 08360 - (609) 691-7700
<PAGE>
[LOGO]
Sun
Bancorp, Inc.
SUN BANCORP, INC. TO PURCHASE FOUR FIRST UNION BRANCHES
Page 2 of 2 December 20, 1996
Koebig also remarked that this is the fifth in a series of five purchases during
the past two-and-one-half years that have continued to fulfill Sun's strategic
growth goals. During that period of time, the total assets of Sun will have
grown from $113 million in 1994 to total assets in excess of $500 million
following the completion of the transaction.
The branch purchase is subject to regulatory approval and is expected to close
during the second quarter of 1997. Once the transaction has been completed, all
branch employees will be retained by Sun National Bank.
First Union National Bank operates 327 branches in New Jersey, including 59 in
South Jersey. It is a subsidiary of First Union Corporation (NYSE: FTU), the
nation's sixth largest banking company, which provides financial services to
more than 12 million customers along the East Coast and throughout the nation.
Sun National Bank currently has eighteen financial serivce centers in Atlantic,
Burlington, Cape May, Cumberland, Mercer and Ocean counties, New Jersey,
servicing the retail and commercial markets. Its deposits are insured by the
F.D.I.C.
Sun Bancorp, Inc. is listed on the Nasdaq Small Cap Market under the symbol
SNBC. Sun's market makers are Wheat First Butcher Singer; M.A. Schapiro & Co.,
Inc. and Janney Montgomery Scott.
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