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)
May 20, 1997
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 June 4, 1997, Sun Bancorp, Inc. (the "Corporation"), the holding
company for Sun National Bank, Vineland, New Jersey (the "Bank"), announced that
the Bank had entered into a Branch Purchase and Deposit Assumption Agreement
(the "Agreement") to acquire eleven branch offices located in New Jersey,
certain loans and approximately $175 million of deposits from The Bank of New
York ("Seller"). Consummation of the transaction is subject to, among other
conditions, regulatory approval and the raising of additional capital by the
Bank.
A copy of the Agreement dated June 4, 1997, and the press release
issued by the Corporation on June 4, 1997, 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
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(c) Exhibits:
99.1 Branch Purchase and Deposit Assumption
Agreement dated June 4, 1997.
99.2 Press Release dated June 4, 1997.
99.3 Press Release dated May 20, 1997 announcing
stock dividend.
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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: June 5, 1997 By: /s/Robert F. Mack
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Robert F. Mack
Chief Financial Officer
EXHIBIT 99.1
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BRANCH PURCHASE AND DEPOSIT ASSUMPTION AGREEMENT
BY AND BETWEEN
SUN NATIONAL BANK
AND
THE BANK OF NEW YORK
JUNE 4, 1997
<PAGE>
BRANCH PURCHASE AND DEPOSIT ASSUMPTION AGREEMENT
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THIS BRANCH PURCHASE AND DEPOSIT ASSUMPTION AGREEMENT ( the "Agreement"
is entered into this 4th day of June, 1997 (the "Agreement Date"), by and
between The Bank of New York, New York, New York (the "Seller"), a New York
chartered commercial bank having its principal office at 48 Wall Street, New
York, New York 10286, and Sun National Bank, a commercial banking institution,
(the "Purchaser") having its principal office at 226 Landis Avenue, Vineland,
New Jersey 08360.
WHEREAS, the Seller wishes to sell the deposit liabilities, loans and
fixed assets of the branch offices or transfer and assign the related building
leases operated by it at 3900 Brigantine Boulevard, Brigantine, New Jersey
("Brigantine Office"); 10-16 South Arkansas Avenue, Atlantic City, New Jersey
("Atlantic City Office"); 805 Rhode Island Avenue, Somers Point, New Jersey
("Somers Point Office"); 599 New Road and Maple Avenue, Linwood, New Jersey,
("Linwood Office"); One Route 50, Weymouth, New Jersey ("Weymouth Office"); 501
Tilton Road, Northfield, New Jersey ("Northfield Office"); 1660 Olden Avenue,
Ewing, New Jersey ("Ewing Office"); 226 South Broad Street, Trenton, New Jersey
("Trenton Office"); 411 Route 33, Hamilton Township, New Jersey ("Hamilton
Office"); 2 Village Blvd., Princeton, New Jersey ("Plainsboro Office"); and 1185
Route 206, Montgomery Township, New Jersey ("Rocky Hill Office") (collectively
"the Branches");
WHEREAS, the Purchaser wishes to purchase the deposit liabilities,
loans and fixed assets of the Branches, and Seller is willing to sell same on
the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the foregoing, of the mutual
agreements, covenants, representations, warranties and conditions contained
herein, and of other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Parties hereto have agreed and
do agree as follows (the "Transaction"):
ARTICLE I
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TRANSFER OF ASSETS AND ASSUMPTION OF LIABILITIES
1.01 Effective Date
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The closing of the Transaction contemplated hereby (the "Closing")
shall occur as soon as practicable after the fifteenth calendar day following
receipt of all approvals of regulatory authorities necessary for the Purchaser
and Seller to consummate such Transaction at such place, time and date as may be
mutually agreed to by the Parties (the "Effective Date" or the "Closing
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Date"). Determination of the Effective Date shall give consideration to
timetables associated with all conditions and duties of the Parties, including
obtaining all necessary governmental approvals and certifications and
coordination of the transfer of the electronic data processing files and
systems.
1.02 Transfer of Assets and Liabilities
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(a) The Seller agrees that, subject to the terms and conditions of this
Agreement, for the "Purchase Price", as determined below, it will validly sell,
assign, transfer, convey and deliver to the Purchaser, on the Effective Date,
the following (collectively "Assets"), and Purchaser shall buy the Assets and
pay the Purchase Price subject to adjustment for proration of taxes, utilities,
insurances and other items as are customary in the transfer of owned and leased
real property:
(1) All of its rights, title and interest as follows:
(i) As Lessee, under certain Lease Agreements
pertaining to the Northfield, Hamilton, Plainsboro
and Rocky Hill Offices, as specified at Exhibit
1.02(a)(1)(i), together with all leasehold
improvements thereon, including any security deposits
on such real estate leases net of deductions, if any,
as specified at Exhibit 1.02(a)(2), (collectively,
"Leased Branches").
(ii) As Fee Simple Owner of the real estate known as
the Brigantine, Atlantic City, Somers Point, Linwood,
Weymouth, Ewing, and Trenton Offices, as more
particularly described on Exhibit 1.02(a)(1)(ii), and
improvements related to such real estate, as
specified at Exhibit 1.02(a)(2), (collectively, the
"Purchased Branches")
(2) All of its rights, title and interest in and to all of the
furniture, fixtures and equipment, including automated teller
machines ("ATMs") used in the operation of the Branches
(exclusive of branch merchadising systems, signage, supplies
and forms of Seller, and the Olivetti branch automation
equipment and telecommunication equipment) (collectively, the
"FFE"), as set forth in Exhibit 1.02(a)(2) attached hereto;
and
(3) All of its rights, title and interest to the
safe deposit box business conducted at the Branches,
exclusive of "Break-Opens" as hereinafter defined at
Section 1.13;
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(4) All petty cash, vault cash, automated teller machine cash
and drawer cash ("Branch Cash") maintained at the Branches as
of the Effective Date, subject to audit verification conducted
by a representative of each party as of the close of business
on the Effective Date, and savings and checking deposit
records and customer records relating thereto;
(5) All of its rights, title and interest in
the Loans as referred to at Section 1.04;
The Purchase Price shall mean the sum of: (1) the book value of the
real property as recorded on the financial records of the Seller as of the
Effective Date related to the Branches (the "Real Estate Purchase Price") as set
forth on Exhibit 1.02(a)(2)); and (2) the book value, defined as cost less
accumulated depreciation as of the Effective Date, for all furniture, fixtures
and equipment described in Section 1.02(a)(2) (the "FFE Purchase Price"),
subject to adjustments and pro-rations provided for hereinafter.
(b) The Purchaser agrees that on and after the Effective Date, subject
to the terms and conditions of this Agreement and as further consideration for
the aforesaid transfer, conveyance and delivery of the Assets, to assume the
following liabilities of the Seller related to the Branches (collectively, the
"Liabilities"):
(1) Assumption of Deposits. On the Effective Date, Purchaser
will assume the deposit liabilities related to the Branches
("Deposit Liabilities"). Deposit Liabilities is defined as the
aggregate outstanding balance of all deposit and transaction
accounts attributed on the records of the Seller to the
Branches, plus accrued interest payable on such accounts as of
the Effective Date as reflected on the records of the Seller.
(A List of such Deposit Liabilities as of April 30, 1997, is
attached hereto as Exhibit 1.02(b)(1)). Within five (5)
business days of the Purchaser's receipt of all regulatory
approvals and fulfillment of all financing requirements,
Seller will deliver to Purchaser the detailed trial balances
of the Deposit Liabilities and Loans as of the last day of the
most recent month ending prior to the Effective Date. Such
list of all Deposit Liabilities and Loans (hereinafter
defined), to be furnished by the Seller to the Purchaser shall
include information identifying the types of each such deposit
or loan, the amount thereof, the interest rate(s) paid
thereon, the name(s) and address(es) of each depositor or
borrower as well as all other pertinent information regarding
each depositor and his or her Deposit Liabilities or borrower
and the respective Loans. Such list shall be delivered
together with a duly executed certificate of an officer of the
Seller to the effect that, to the best knowledge of such
officer, the information is accurate. Such Exhibit shall be
updated as of the Effective Date. Purchaser will assume,
discharge and pay all Deposit Liabilities, including, without
limitation, all savings, checking, transaction, negotiable
order of
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withdrawal and certificate accounts and Individual
Retirement Arrangement ("IRA") accounts, together with accrued
interest as of the Effective Date.
(2) Purchaser will assume and thereafter fully and timely
perform and discharge, in accordance with its terms, all of
the liabilities and obligations of the Seller arising on and
after the Effective Date related to the real property, leases
to the Leased Branches, personal property, furniture and
fixtures, leased ATM facilities (located at the Weymouth
Office), rented safe deposit boxes, exclusive of Break- Opens,
overdraft lines of credit facilities ("Overdraft Lines") and
any related contracts, service agreements and leases
("Obligations"), if any. A list of the third party service
agreements are set forth on Exhibit 1.02(b)(2).
(3) Purchaser will assume all rights, title and interest of
the Seller in and to the safe deposit box business conducted
at the Branches as of the Effective Date, exclusive of
Break-Opens. A list of such rented safe deposit boxes is
attached as Exhibit 1.02(b)(3).
1.03 Payment
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(a) The amount to be paid by the Seller to the Purchaser in
consideration of the assumption by the Purchaser of the Deposit Liabilities
shall equal the outstanding balances and accrued interest on the Deposit
Liabilities as of the close of business on the Effective Date and reduced by the
sum of (i) the Premium Payment, (ii) the Purchase Price, net of adjustments,
(iii) the purchase price for the Loans to be assumed pursuant to Section 1.04;
and (iv) the Branch Cash (the "Transfer Amount"). The payment formula referred
to above is for the sole purpose of determining the amount to be paid and
transferred by the Seller to the Purchaser hereunder and shall not constitute an
allocation of the purchase price for any particular asset being transferred or
liability being assumed.
(b) Because certain components of the Transfer Amount will not be
finally determinable until after the Effective Date, the Seller shall pay the
Purchaser by wire transfer of immediately available funds by 2:00 p.m. on the
Effective Date an amount equal to the outstanding balances and accrued interest
on the Deposit Liabilities as of the close of business on the third business day
preceding the Effective Date reduced by the sum of (i) the Premium Payment, (ii)
the Purchase Price, net of adjustments, (iii) the purchase price for the Loans
to be assumed pursuant to Section 1.04; and (iv) the Branch Cash (collectively,
the "Preliminary Transfer Amount"). The Seller shall deliver to the Purchaser on
the business day immediately preceding the Effective Date a preliminary
settlement statement setting forth a calculation of the Preliminary Transfer
Amount.
(c) The Seller shall deliver to the Purchaser no later than fifteen
(15) business days after the Effective Date a final settlement statement setting
forth a calculation of the Transfer Amount
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and the difference between the Transfer Amount and the Preliminary Transfer
Amount. The difference between the Transfer Amount and the Preliminary Transfer
Amount shall be paid by wire transfer of funds by the Seller to the Purchaser or
by the Purchaser to the Seller, as applicable, no later than thirty (30)
business days after the Effective Date. Any such amount shall accrue interest at
the Federal Funds Rate in effect on the Effective Date from the Effective Date
to the date of payment. Further, any errors on Deposit Liabilities or accrued
interest thereon, or other amounts ("Mistakes-in-Fact") which are determined as
of the date of the final settlement statement shall be reconciled as of such
date and appropriate adjustments of payments shall be made to the Seller or the
Purchaser, as appropriate, at such time. Notwithstanding the foregoing, or
anything else herein to the contrary, any Mistakes-in-Fact which shall be
determined by the Seller or the Purchaser thereafter related to the Transaction
consummated under this Agreement shall nevertheless be reconciled by adjustment
or payment to the Seller or the Purchaser, as appropriate, within 30 days of
such determination, provided that any such Mistakes-in-Fact must be determined
within one year after the Effective Date in order for a claim to be made with
respect thereto.
(d) If Seller accepts an item before the Effective Date, which item is
returned as uncollectible, and no offset of funds is available to the Purchaser,
then Seller shall be liable for such item in an amount equal to the portion not
covered by offset. Adjustment to the Transfer Amount will be made as necessary
to reflect Seller's liability.
1.04 Purchase of Loans
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(a) In addition to the purchase of assets and assumption of liabilities
described above, the Purchaser shall purchase on the Effective Date certain
loans of the Branches (the "Loans"). These Loans shall consist of Small Business
Loans, Overdraft Lines with an outstanding loan balance ("Overdraft Loans") and
Community Loans. Purchase of these Loans shall be subject to each loan being
acceptable to the Purchaser in accordance with the Purchaser's underwriting
standards. (A detailed list of such Community Loans as of March 31, 1997, is
described at Exhibit 1.04(a)). Purchaser reserves the right within its sole
discretion to reject any such Loans, provided notice of such rejection is given
not less than fourteen (14) days prior to the Effective Date. Any Overdraft
Loans that are more than 30 days past due as of the Effective Date may be
unconditionally returned by the Purchaser to the Seller within 90 days of the
Effective Date, and Seller shall refund Purchaser the purchase price of such
Overdraft Loans. Except as noted herein, all Loans (including any and all
guarantees, collateral, notes, or any other evidences of indebtedness or
security instruments associated therewith) transferred to the Purchaser on the
Effective Date pursuant to Section 1.04(a) shall be transferred without recourse
and without any warranties or representations as to the collectibility of any
such loans or the creditworthiness of any such obligors.
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(b) The purchase price for each loan purchased in accordance with
Sections 1.04(a) shall be equal to the unpaid principal balance plus accrued and
unpaid interest as of the Effective Date.
1.05 Payments of Premium
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(a) The Purchaser further agrees that on the Effective Date, subject to
the terms and conditions of this Agreement, it also shall pay to the Seller a
premium in the amount of (.0975) times the average of the Applicable Deposit
Liabilities (defined hereinafter) calculated at the close of business during the
30-day period prior to and ending three business days prior to the Effective
Date ("Premium Payment"); which Premium Payment shall be subject to adjustment
as of 90 days following the Effective Date with respect to the Monitored
Accounts detailed at Exhibit 1.05(c) as noted hereinafter ("Premium Payment
Adjustment"). Seller shall continue the operations and business of the Branches
as presently conducted and shall use reasonable commercial efforts to maintain
the Deposit Liabilities and Loans at the levels as set forth on Exhibits 1.02(b)
and 1.04(a).
(b) The Applicable Deposit Liabilities shall be defined as Deposit
Liabilities attributable to the Branches, including accrued interest as of the
Effective Date, but excluding (i) retail certificates of deposit of $100,000 or
more with maturities of one year or less as of the Effective Date ("Retail Jumbo
Certificates of Deposit"), (ii) deposit accounts held by officers, directors or
employees (or members of such officers, directors or employees immediate family)
of the Seller other than those whose primary work location is at one of the
Branches and who will be employed by the Purchaser on the first day following
the Effective Date, (iii) certificates of deposit of $100,000 or more with
maturities of one year or less held by local, county, municipal, state, federal
or governmental authorities or agencies, (iv) any pledged deposits or accounts
where such pledged deposits or accounts secure a Loan which is not being
transferred; and (v) brokered deposits or deposits with negotiated rates
identified at Exhibit 1.05(b) (collectively, constituting the "Excluded
Deposits").
(c) The Premium Payment Adjustment shall be calculated as of the date
that is 90 days after the Effective Date ("Calculation Date"). The Premium
Payment Adjustment shall provide a reimbursement to the Purchaser based upon the
actual closing of a deposit account or any reduction in the balance of such
deposit accounts identified at Exhibit 1.05(c) as of the date of the Agreement
with such account closing or account balance reduction measured as of the
Calculation Date, provided that such account holders have indicated to Seller
and Purchaser in writing on or before the Effective Date that they intend to
close such accounts within 90 days of the Effective Date (collectively, the
"Monitored Accounts"). Upon the closing of any such Monitored Account on or
before the Calculation Date, a Premium Payment Adjustment shall be made equal to
the account balance for which such Premium Payment has previously been
calculated, multiplied by (.0975). With respect to Monitored Accounts that
remain open as of the Calculation Date and the average daily ending balance for
the period from the Effective Date
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through the Calculation Date is less than the account balance as of the
Effective Date, then such Premium Payment Adjustment shall be calculated on an
account-by-account basis as the difference between (a) and (b); with (a)
equalling the original Premium Payment calculated with respect to such account
as of the Effective Date, and (b) the product of the average daily account
ending balance calculated during the period commencing on the Effective Date and
ending on the Calculation Date, multiplied by (.0975). Such Premium Payment
Adjustment shall be paid by the Seller to the Purchaser in immediate available
funds within 100 days of the Effective Date.
1.06 Obligation of the Seller on the Effective Date
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On the Effective Date, the Seller will:
(a) Deliver to the Purchaser the Assets, as set forth
in Section 1.02, as shall be capable of physical delivery;
(b) Execute, acknowledge (if appropriate) and deliver to the Purchaser
a bill of sale and all such deeds, endorsements, assignments or other
instruments of conveyance, assignment and transfer as shall be reasonably
necessary or advisable to consummate the sale and transfer to the Purchaser of
the real property and other purchased assets;
(c) Make available to the Purchaser cash or immediately available funds
equal to the Preliminary Transfer Amount, as set forth in Section 1.03.
(d) Assign, transfer and deliver to the Purchaser such of the following
records pertaining to the Deposit Liabilities, Loans, safe deposit business and
other business to be assumed by the Purchaser and any other records reasonably
requested by the Purchaser that exist and are in the Seller's possession, and as
are necessary to enable the Purchaser to service said deposit accounts and Loans
on a continuing basis, including, signature cards, retirement account files,
orders and contracts between the Seller and customers of accounts to be
transferred hereunder; taxpayer identification number certifications and records
relating thereto, provided, the Seller's Corporate Tax Department has authorized
the release of such records, otherwise they will be delivered to the Purchaser,
on a timely basis after the Effective Date; and Loan files and records.
The Purchaser agrees that it will preserve and safely keep, for as long
as may be required by applicable law, and in any event for a period of time of
not less than seven (7) years, all of the signature cards, order, contracts,
forms, taxpayer identification number certifications, and records herein above
referred to for the joint benefit of itself and the Seller, and that it will
permit the Seller and its representatives to inspect, and make extracts from or
copies of, any such signature cards, orders, files, contracts, forms, taxpayer
identification number certifications
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or records, at any reasonable time, and at the expense of the Seller, as shall
be reasonably necessary to the Seller for purposes of its records. The Seller
agrees that it will preserve and safely keep, for as long as may be required by
applicable law, and in any event for a period of time of not less than seven (7)
years, all of the files, books of accounts and records as exist and are in
Seller's possession pertaining to the past history of the accounts transferred
hereunder, including deposit slips, canceled checks or withdrawal orders, for
the joint benefit of itself and the Purchaser, and that it will permit the
Purchaser and its representatives to inspect, and make extracts from or copies
of, any such files, books of accounts or records, at any reasonable time and at
the expense of the Purchaser, as shall be reasonably necessary to the Purchaser
for purposes of its records.
Further, both parties agree that to the extent that either
party is requested by subpoena, court order or other enforceable legal
instrument ("Legal Order") to produce business records in the possession of the
other party, such party possessing such records shall assist in complying with
such Legal Order and such party producing such information shall accept as full
payment such reimbursements that are stipulated in the Legal Order. Records
produced other than pursuant to a Legal Order will be provided and reimbursement
shall be made to the producing party based upon the fee schedule of such
producing party in effect at the time such records are produced.
(e) On the Effective Date, Seller shall execute and deliver to
Purchaser a Bargain and Sale Deed without Covenants, conveying fee simple title
and interest in the real property related to the Transaction, free and clear of
all liens and encumbrances, except encumbrances that do not affect the aggregate
value of, or interfere with the past or future use or ability to convey the
property subject thereto or affected thereby and liens for current taxes and
special assessments not yet due and payable (collectively, the "Permitted
Liens") and Permitted Exceptions (defined hereinafter) and insurable at regular
rates by a title company licensed to do business in the State of New Jersey.
Purchaser shall have the right within forty-five (45) days of this Agreement, to
conduct a title search, make application for title insurance and make objections
with regard to matters that may have a material impact on the Purchaser's
intended use or the market value of the real property. Any matters not objected
to or otherwise agreed upon by Purchaser shall be "Permitted Exceptions" (except
for any matters arising after such forty-five (45) days of the date of the
Agreement which shall be Permitted Exceptions if such matters or conditions are
not objected to by Purchaser within 30 days of discovery or notice).
(f) Within thirty (30) days of the date of this Agreement, Seller shall
use reasonable efforts to furnish Purchaser with copies of prior title
information and land survey information related to the real property associated
with the Branches readily in its possession.
(g) Seller shall at its expense furnish Purchaser with one (1) set of
mailing labels (or in an acceptable electronic data format) addressed to each
account holder of a Deposit Liability and borrower of a Loan as of forty-five
(45) days prior to the anticipated Effective Date
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provided, the Seller has been notified by the Purchaser that the Purchaser has
received both regulatory approval and has raised sufficient capital to
consummate the Transaction and an additional one (1) set of mailing labels as of
the Effective Date in order to facilitate the timely and efficient transition.
(h) The Purchaser shall within 15 days of the date of the Agreement
file an appropriate Notification of Sale, Transfer, or Assignment in Bulk for
each of the Branches with the State of New Jersey Division of Taxation
("Division of Taxation"). The Seller shall provide such information to the
Purchaser 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. Purchaser 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 Effective Date, excluding the Transaction
contemplated by this Agreement. The parties shall coordinate the filing of all
notices and applications for the same not less than ten (10) days prior to the
Effective Date. Seller shall cooperate with any filing requirements and notice
provisions regarding the same. Purchaser shall establish any escrows determined
to be necessary to be established as requested by the Division of Taxation to
protect the interests of the Purchaser and the State of New Jersey for any
unpaid tax liabilities. Such sums to be paid in escrow by Purchaser shall reduce
the amount due to the Seller as of the Effective 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.
(i) Seller shall pay any state, county and local transfer taxes that
are imposed upon the transfer of the real property of the Branches.
(j) Seller shall permit Purchaser to train the Seller's Employees
before the Effective Date with regard to Purchaser's operations, policies and
procedures at Purchaser's sole cost and expense. This training may take place at
the Branches at such times to be determined by the Seller.
(k) Subject to the provisions of Section 5.10, Seller shall deliver to
the Purchaser the validly executed lease assignments and estoppel certificates
executed by the lessors related to each Leased Branch and an accounting of any
security deposits as detailed at Section 8.02.
1.07 Safekeeping Items
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(a) The Seller agrees to transfer and deliver to the Purchaser all
securities and papers, if any, held by the Seller in safekeeping for its
customers at the Branches, together with all of the records relating thereto.
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(b) The Purchaser agrees to assume, honor, and discharge, from and
after the Effective Date, the duties and obligations of the Seller with respect
to such safekeeping items and shall be entitled to any right or benefit arising
henceforth from such safekeeping business from and after the Effective Date.
1.08 Assumption Agreement
--------------------
To evidence the assumption by the Purchaser of the liabilities and
obligations of the Seller assumed pursuant to this Agreement, the Purchaser will
execute, acknowledge, and deliver to the Seller, on the Effective Date, an
Instrument of Assumption of Certain Liabilities. Subject to Section 5.10, to
evidence the assumption by Purchaser of the Leases related to the Leased
Branches, as defined in Section 1.02(a)(1)(i), Purchaser shall execute,
acknowledge and deliver to the Seller and landlord, on the Effective Date, an
Assignment and Assumption Agreement and Landlord's Consent related to each
Leased Branch and such other instrument of assumption as may be required by
landlords of Seller in connection with or as a condition to landlord consents to
assignment to the Purchaser of the real estate leases pertaining to the Leased
Branches.
1.09 Certain Transitional Matters Following the Effective Date
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(a) The Purchaser agrees to honor in accordance with law, up to the
collected amount on deposit (and any other funds available by reason of any
agreement between the depositor and the Purchaser), all properly drawn and
presented checks, drafts, electronic debits and credits and withdrawal orders
presented to the Purchaser by mail, over its counters, throughout the check
clearing system, and Automated Clearing House ("ACH") of the banking industry,
by depositors of the accounts assumed, whether drawn on the checks, withdrawal
or draft forms provided by the Seller, or by the Purchaser, and all other
respects to discharge, in the usual course of the banking business, the duties
and obligations of the Seller with respect to the balances due and owing to the
depositors whose accounts are assumed by the Purchaser. The Purchaser's
obligation under this Section to honor checks, withdrawal, draft forms and
electronic debits and credits provided by the Seller and carrying its imprint
shall expire at the close of business on the 120th business day following the
Effective Date or a date mutually agreeable to both parties.
(b) If any of such depositors, instead of accepting the obligation of
the Purchaser to pay the Deposit Liabilities assumed, shall demand payment from
the Seller for all or any part of any such assumed Deposit Liabilities, the
Seller shall not be liable or responsible for making such payment. Instead, the
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 Branches, batch such items and send them to the Purchaser
during the next banking day after receipt or promptly notify the Purchaser and
make them available to the Purchaser at a New Jersey facility of the Seller
prior to 10:30 a.m. of the next banking day after receipt. The Seller shall not,
at any time, be liable or responsible for making payment on such items by reason
of its obtaining custody of them for transmittal to the Purchaser.
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In order to reduce the continuing charges to the Seller which will
result from check forms of the Seller being used after the Effective Date by the
depositors whose accounts are assumed, the Purchaser agrees, at its cost and
expense, on or immediately after (and in no event without the express written
consent of the Seller, if prior to) the Effective Date, to notify depositors of
the Purchaser'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 the Purchaser, with
instructions to utilize the Purchaser's checks and to destroy unused checks of
the Seller as of the Effective Date. Purchaser will send Seller a copy of
notification letters forwarded to depositors by the Purchaser. The Seller hereby
agrees that after the 120th business day following the Effective Date or a date
mutually agreeable to both parties, it shall, with respect to the Branches, 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 send them
to the Purchaser during the next banking day after receipt or promptly notify
the Purchaser and make them available to the Purchaser at a New Jersey facility
of the Seller prior to 10:30 a.m. of the next banking day after receipt.
In order to reduce the continuing charges to the Seller relating to ACH
transactions after the Effective Date, the Purchaser shall initiate
notifications to customers after the Effective Date to authorize the updating of
the ACH routing numbers. With respect to the Branches, the Seller may, at its
sole option, return such ACH items to the maker thereof, after the 120th
business day following the Effective Date or a date mutually agreeable to both
parties.
(c) The Purchaser agrees, no later than the start of the second
business day after demand by the Seller, to pay the Seller an amount equivalent
to the amount of any uncollected item included in a depositor's balance on the
Effective Date which is returned after the Effective Date as not collected. The
Purchaser shall be required to make such payment for an item only up to the
amount on deposit with the Purchaser at the time the Seller makes the demand
aforesaid.
(d) The Purchaser shall timely forward to Seller any mail, facsimile or
other correspondence, received at any of the Branches after the Effective Date,
that is (i) addressed to Seller, or (ii) addressed to Purchaser but relating to
an obligation of Seller that originated prior to the Effective Date.
(e) Purchaser shall file all required information returns with the
Internal Revenue Service with respect to interest paid on the Deposit
Liabilities after the Effective Date, interest received on the Loans after the
Effective Date, and any other information returns required with respect to the
Assets and the Liabilities for the periods beginning after the Effective 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 Deposit Liabilities on or before the
Effective Date, interest received on the Loans on or before the Effective Date,
and any other information returns required with respect to the Assets and the
Liabilities for periods ending on or before the Effective Date.
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<PAGE>
(f) Adjustments after the Effective Date shall be made daily
as may be required. Such adjustments shall be by wire transfer.
1.10 Indemnification
---------------
(a) The Seller shall indemnify, hold harmless and defend the Purchaser
from and against all losses and liabilities, including reasonable legal fees and
expenses, arising out of any breach by Seller of any representation or warranty
or covenant made hereunder or in any certificate delivered hereunder or any
actions, suits or proceedings commenced prior to the Effective Date (other than
proceedings to prevent or limit the consummation of this Agreement) relating to
operations at the Branches and obligations under the Lease Agreement, and the
Seller shall indemnify, hold harmless and defend the Purchaser from and against
all losses and liabilities (including reasonable legal fees) arising out of any
actions, suits or proceeding commenced on or after the Effective Date but which
relate to operations at the Branches prior to the Effective Date. The Purchaser
will give the Seller written notice of a threatened or pending claim within
thirty (30) calendar days (except in the case where the Purchaser's first notice
is its receipt of the Complaint in which case such time for giving Notice shall
be fifteen (15) calendar days of its learning about such threatened or pending
claim), together with a statement of facts known to it regarding such threatened
or pending claim. The Seller will then have forty-five (45) calendar days from
the date it receives such notice to investigate the threatened or pending claim
to determine whether it will elect to assume the defense of the matter involving
such threatened or pending claim. If it does so elect, the Seller will be given
the Purchaser's full cooperation and assistance in maintaining such defense. The
Seller shall not be liable for any amounts in settlement of a claim or action as
described above if such settlement is effected without the Seller's written
consent, which consent shall not be unreasonably withheld. It is understood that
the obligations of the Seller under this paragraph to indemnify Purchaser for
any breach of any representation or warranty shall survive the Effective Date
for a period of one year.
(b) The Purchaser shall indemnify, hold harmless and defend the Seller
from and against all claims, losses, liabilities, demands and obligations,
including reasonable legal fees and expenses, real estate, sales and use, social
security and unemployment taxes, all accounts payable and operating expenses
including salaries, rents and utility charges, which the Seller may receive,
suffer or incur in connection with any breach by Purchaser of any representation
or warranty or covenant made hereunder or in any certificate delivered hereunder
or operations and transactions occurring on or after the Effective Date, and
which involve the Branches or the assets or leases transferred or liabilities
assumed including the Obligations pursuant to this Agreement, except as
otherwise specifically provided for in the Agreement. To the extent that any
such item has been prepaid by the Seller for a period extending beyond the
Effective Date, (including FDIC deposit insurance as provided in Section
1.11(b)), there shall be a proportionate monetary adjustment with respect
thereto in favor of the Seller. The Seller will give the Purchaser written
notice of a threatened or pending claim within thirty (30) calendar days (except
in the case where the Seller's first notice is its receipt of a Complaint, in
which case
12
<PAGE>
such time for giving notice shall be fifteen (15) calendar days of its learning
about such threatened or pending claim, together with a statement of facts known
to it regarding such threatened or pending claim. The Purchaser will then have
forty-five (45) calendar days from the date it receives such notice to
investigate the threatened or pending claim to determine whether it will elect
to assume the defense of the matter involving such threatened or pending claim.
If it does so elect, the Purchaser will be given the Seller's full cooperation
and assistance in maintaining such defense. It is understood that the
obligations of the Purchaser under this paragraph to indemnify Seller for any
breach of any representation or warranty shall survive the Effective Date for a
period of one year.
1.11 Prorated Adjustment of Pre-paid Items and Expenses
--------------------------------------------------
(a) All payments, rents, utility payments, lease payments, liability
and casualty insurance premiums, real and personal property taxes and similar
expenses and charges relating to the Branches, the real property, furniture,
fixtures and equipment, and the safe deposit business at the Branches, assumed
by the Purchaser hereunder, shall be pro-rated between the parties as of the
Effective Date. Notwithstanding the foregoing, any state, county and local
transfer taxes that are imposed upon the transfer of the real property or
improvements regarding the Branches shall be paid by the Seller.
(b) FDIC assessments shall be prorated on the basis of total Deposit
Liabilities transferred as of the close of business on the Effective Date times
$.0001296 (or the assessment rate actually paid for such assessment quarter, if
different), times the number of days between the Effective Date and the last day
in the calendar quarter ending after the Effective Date, divided by 365.
1.12 Notice to Customers/Public Disclosures
--------------------------------------
As mutually agreed upon by the Parties, Purchaser and/or Seller shall
notify holders of all accounts and Loans at the Branches prior to the Effective
Date of the Transaction and its impact on such account holders or borrowers.
Seller and Purchaser also shall prepare another notice to Seller's customers, to
be mailed by Seller at Purchaser's request and expense, of Purchaser's impending
acquisition of the Branches within ten business days following Seller's receipt
of notice that Purchaser has obtained any and all required regulatory approvals
for the transactions contemplated by this Agreement or such earlier date as
Seller and Purchaser may mutually agree upon. After Seller mails this notice,
Purchaser shall be permitted to provide to Seller material to be sent, at
Purchaser's expense, to the depositors, borrowers and other customers of the
Branches concerning the proposed acquisition and Purchaser's products. Each
party's communication shall be subject to the approval of the other party, which
approval shall not be unreasonably withheld.
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1.13 Safe Deposit Boxes
------------------
The Purchaser agrees to assume and to discharge, in the usual course of
banking business, the duties and obligations of the Seller; from and after the
Effective Date, with respect to the safe deposit box business at the Branches,
excluding property in possession of Seller as a result of non-payment of rental
fees or pursuant to a court order ("Break-Opens"), and to maintain all necessary
facilities for the use of such boxes by the renters thereof during the period
for which such persons have paid rent therefor in advance to the Seller, subject
to the provisions of the rental agreements between it and the respective renters
of such boxes. On the Effective Date, the Seller shall assign, transfer and
deliver to the Purchaser all records pertaining to safe deposit operations at
the Branches as they exist and are available, including relevant safe deposit
contracts. Seller shall deliver to Purchaser not less than two sets of keys to
each unrented safe deposit box as of the Effective Date.
ARTICLE II
----------
REPRESENTATIONS AND WARRANTIES OF THE SELLER
The Seller hereby represents and warrants to the Purchaser as follows:
2.01 Corporate Organization and Powers
---------------------------------
The Seller is a New York chartered commercial bank duly organized,
validly existing and in good standing under the laws of the State of New York.
The Seller has the corporate power and authority to own its properties to effect
this transaction and carry on its business as presently conducted. The Seller's
deposits are, subject only to monetary limits established by law and regulation,
insured by the FDIC, Bank Insurance Fund (BIF).
2.02 Leases; Title to Property; Encumbrances
---------------------------------------
(a) The Seller has, and at the Effective Date will have insurable and
fee simple title to the Purchased Branches, and a valid lease to the Leased
Branches under which leases Seller is in good standing as a lessee, and
marketable title to all leasehold improvements, furnishings, equipment and other
assets to be transferred to the Purchaser pursuant to this Agreement, and in
each case subject to no "Title Defect", which shall be defined as a mortgage,
pledge, lien, security interest, conditional sale agreement, encumbrance or
charge of any nature whatsoever, except Permitted Liens, Permitted Exceptions,
and matters of record which do not interfere with the use of the properties as
bank branches or which would interfere with or otherwise prevent the Purchaser
from having ownership, possession, and occupancy of and quiet enjoyment of the
14
<PAGE>
real property and the other assets or ownership of the Deposit Liabilities to be
transferred in accordance with this Agreement.
(b) The Seller will deliver to the Purchaser complete and correct
copies of the deeds to the Purchased Branches and the leases to the Leased
Branches (the "Leases") as identified at Sections 1.02(a)(1)(i) and (ii) within
ten business days of the date of the Agreement. The Leases are valid and
enforceable and there does not exist with respect to the Seller's obligations
thereunder, or to the knowledge of the Seller with respect to the obligation of
any lessor thereunder, any material default thereunder and, to the knowledge of
the Seller, there is no condemnation proceeding pending or threatened which
would preclude or impair the use of the Branches as presently being used in the
conduct of the business of the Seller, except as set forth at Exhibit 2.02(b).
(c) The real estate, the leasehold improvements, the banking equipment,
the fixtures and the furniture being sold are assets owned by the Seller and
used by the Seller to conduct the business of the Branches as of the date
hereof. The banking equipment comprising part of the assets being sold is in
operating condition and repair, giving consideration to its age and use and
subject to ordinary wear and tear.
(d) No notice of any violation of zoning laws, building, fire and other
regulating laws, statutes, ordinances and regulations relating to the Branches
have been received by the Seller and are currently outstanding and uncured. With
respect to the Branches, to its knowledge, the Seller is in compliance with all
federal, state and local laws, rules and regulations relating to environmental
protection and the Seller has not been notified that it is liable, potentially
liable, or is considered potentially liable, under the Comprehensive
Environmental Response, Compensation and Liability Act of l980, as amended, or
any similar state law. To its knowledge, no disposal, release or discharge of
hazardous or toxic substances, including petroleum and gas products, as any of
such terms may be defined under federal, state or local law, has occurred on,
in, at or about any of the facilities of the Branches. To the best of Seller's
knowledge and belief there are no action, suits or regulatory investigations
pending or threatened against the Seller relating to environmental protection
matters. Seller represents that to the best of Seller's knowledge, there exist
no underground storage tanks located on the premises, parking lots, drive-up
facilities or sidewalk areas of the Leased Branches, Purchased Branches or other
real property associated with the Transaction.
(e) Seller represents to its best knowledge that there are no easements
covering the leased property or real property associated with the Transaction
except easements which exclusively benefit the property which is the subject of
this Agreement and a temporary easement on the Atlantic City Branch which is
scheduled to expire on June 6, 1997.
15
<PAGE>
2.03 No Violation
------------
Neither the execution and delivery of this Agreement, nor the
consummation of this sale, will violate or conflict with: (1) the Certificate of
Incorporation, Charter or Articles of Association (whichever is applicable) or
Bylaws of the Seller; (2) any material provision of any material agreement or
any other material restriction of any kind to which the Seller is a party or by
which the Seller is bound under any material lease; or (3) any statute, law,
decree, regulation or order of any governmental authority known to the Seller,
once the governmental consents referred to in this Agreement are obtained; or
will result in a material default under, or cause the acceleration of the
maturity of, any material obligation or loan to which the Seller is a party.
2.04 Corporate Authority
-------------------
The execution and delivery of this Agreement, and the consummation of
this Transaction, have been duly authorized by the appropriate officers of
Seller and shall have been approved by the Board of Directors of the Seller not
later than June 30, 1997. No further corporate authorization on the part of the
Seller is necessary to consummate the Transaction.
2.05 Disclosure
----------
No representation or warranty of the Seller contained in this
Agreement, nor any schedule, exhibit or other document furnished or to be
furnished by the Seller contains or will contain any untrue statement of a
material fact or omits or will omit a material fact necessary to make the
statements contained therein not misleading.
2.06 Non-Solicitation of Business
----------------------------
The Seller will not, for a period of not less than twenty-four (24)
months subsequent to the Effective Date, directly compete for or solicit
customers whose Deposit Liabilities or Loans have been transferred hereunder,
except that the foregoing restriction shall not apply to any customer if any of
such customer's deposits or loans were not transferred to Purchaser under this
Agreement.
2.07 Restriction on New Branches
---------------------------
The Seller shall not open an office or ATM facility within Atlantic and
Mercer Counties and within a 5-mile radius of the present location of the Rocky
Hill and Plainsboro branches for a period of not less than twenty-four months
following the Effective Date. This restriction shall not preclude the Seller
from acquiring or being acquired by, or merging with, another financial
institution (or substantially all of the assets thereof) which may have branches
within such market area.
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2.09 Absence of Employment Agreements
--------------------------------
There exist no employment agreements, contracts, or disputes between
Seller and Seller's existing employees at the Branches, related to wages, hours,
terms of employment or employee benefits.
2.10 Exclusivity of Transaction
--------------------------
The officers, directors, employees, representatives and agents of
Seller shall refrain from considering, soliciting, proposing to enter into or
entering into any discussion or negotiations with other potential buyers of the
Branches or substantially all of the assets, Loans or Deposit Liabilities of the
Branches from the date hereof through the Effective Date unless this Agreement
is terminated prior to the Effective Date in accordance with its terms.
2.11 No Litigation
-------------
There is no action, suit, proceeding, inquiry or investigation, at law
or in equity, or before any court, public board or body pending, or to the
knowledge of the Seller threatened, against the Seller; wherein an unfavorable
decision, ruling or finding would materially and adversely affect the
Transaction contemplated by this Agreement or adversely affect the validity or
enforceability of this Agreement or any document necessary to consummate the
Transactions contemplated herein or any approval, consent or permission required
to be obtained by the Seller hereunder.
2.12 Regulatory Compliance
---------------------
(a) The Deposit Liabilities and the Loans were opened, extended or
made, and have been substantially maintained, in accordance with all applicable
federal and state laws, regulations, rules and orders, and the Branches have
been operated in substantial compliance with Seller's policies and procedures
and all applicable federal and state laws, regulations, rules and orders.
(b) The Deposit Liabilities are insured by the Federal Deposit
Insurance Corporation through the Bank 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.
2.13 Ownership of Loans
------------------
Seller has full power and authority to hold each Loan and has good
title to the Loans free and clear of all liens and encumbrances other than
Permitted Liens.
2.14 Brokers' Fees
-------------
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<PAGE>
The Seller has not employed any broker or finder or incurred any
liability for any brokerage fees, commissions or finders' fee in connection with
the Transaction contemplated by this Agreement.
2.15 Regulatory Approvals
--------------------
The Seller is not aware of any condition that exists with respect to
the business of the Seller that will likely result in the denial of the
appropriate regulatory approvals necessary to consummate the Transaction.
ARTICLE III
-----------
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The Purchaser hereby represents and warrants to the Seller the following:
3.01 Corporate Organization and Powers
---------------------------------
The Purchaser is a financial institution duly organized, validly
existing and in good standing under the laws of the United States of America.
The Purchaser has the corporate power and authority to own or lease its
properties, to effect the transaction contemplated hereby and to carry on its
business as presently being conducted. The Purchaser is a member of the Federal
Reserve System and its deposits are insured by the Federal Deposit Insurance
Corporation.
3.02 No Violation
------------
Neither the execution and delivery of this Agreement nor the
consummation of this sale will violate or conflict with: (1) the Articles of
Association or the Bylaws of the Purchaser; (2) any provision of any agreement
or any other restriction of any kind to which the Purchaser is a party to or by
which the Purchaser is bound; or (3) any statute, law, decree, regulation or
order of any governmental authority known to the Purchaser, once the
governmental consents referred to in this Agreement are obtained, or will result
in a default under, or cause the acceleration of the maturity of, any obligation
or loan to which the Purchaser is a party.
3.03 Corporate Authority
-------------------
The execution and delivery of this Agreement, the raising of sufficient
capital to finance the Transaction, and the consummation of this sale have been
duly authorized by the
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<PAGE>
Board of Directors of the Purchaser. No further corporate authorization on the
part of the Purchaser is necessary to consummate the Transaction.
3.04 No Litigation
-------------
There is no action, suit, proceeding, inquiry or investigation, at law
or in equity, or before any court, public board or body pending, or to the
knowledge of the Purchaser threatened against the Purchase, wherein an
unfavorable decision, ruling or finding would materially and adversely affect
the transaction contemplated by the Agreement or adversely effect the validity
or enforceability of this Agreement or any document necessary to consummate the
transaction contemplated herein or any approval, consent or permission required
to be obtained by the Purchaser hereunder.
3.05 Disclosure
----------
Neither this Agreement nor any schedule, exhibit, certificate or other
document furnished or to be furnished by the Purchaser on the Effective Date
contains or will contain any untrue statement of a material fact or omits or
will omit a material fact necessary in order to make the statements contained
therein not misleading.
3.06 Brokers' Fees
-------------
The Purchaser has not employed any broker or finder or incurred any
liability for any brokerage fees, commissions or finders' fee in connection with
the Transaction contemplated by this Agreement.
3.07 Regulatory Approvals
--------------------
The Purchaser is not aware of any condition that exists with respect to
the business of the Purchaser that will likely result in the denial of the
appropriate regulatory approvals necessary to consummate the Transaction, other
than the requirement that Purchaser obtain the necessary financing to complete
the Transaction.
ARTICLE IV
----------
CONDUCT OF BUSINESS PENDING THE EFFECTIVE DATE
4.01 Conduct of Business
-------------------
Pending the Effective Date, and except as otherwise consented to by the
Purchaser
19
<PAGE>
(a) The Seller will carry on the business of the Branches diligently
and substantially in the same manner as on the date hereof, and the Seller will
not, with regard to the Branches, engage in any one or more activities or
transactions which shall be outside of the ordinary course of the business of
the Branches as conducted as of the date hereof, except for activities or
transactions contemplated by this Agreement; Seller shall not transfer the
Deposit Liabilities or Loans to other branches of the Seller without the prior
notice to and consent by the Purchaser.
(b) The Seller will keep the business operations as are presently
conducted at the Branches. Seller shall maintain in effect the current staffing
levels at the Branches from the date of the Agreement to the Effective Date,
including the replacement hiring of personnel, if necessary, with the prior
approval of the Purchaser, which approval shall not be unreasonably withheld or
delayed. The Seller further agrees to use its best efforts to preserve for the
Purchaser the goodwill of its customers and others having relations with the
business normally conducted at the Branches, and to cooperate with and assist
the Purchaser in assuring the orderly transition of such business from the
Seller to the Purchaser. Nothing in this paragraph shall be construed as
requiring the Seller to engage in any activities or efforts outside of the
ordinary course of business as presently conducted. Notwithstanding the
foregoing, Seller shall cooperate with the Purchaser in an effort to maintain
the deposit relationships detailed at Exhibit 1.05(c).
(c) Seller shall not increase the wages of any employee of the Branches
other than in accordance with the salary budget guidelines presently in effect
without the approval of a representative of Purchaser, which shall not be
unreasonably withheld or delayed.
(d) Seller shall not materially alter the products or services
presently offered at the Branches or materially alter the pricing policy
applicable to such products without prior notice to the Purchaser.
(e) Seller shall maintain in effect through the Effective Date all
property, liability, fire and casualty insurance in effect as of the date of the
Agreement with regard to the Branches, including the structures, leasehold
improvements and personal property.
(f) Purchaser may establish and staff a customer representative help
desk and information telephone line at each location commencing 15 days prior to
the anticipated Effective Date to assist Branch customers.
(g) Seller agrees to maintain the Branches and related property and
assets in a manner conducive to normal operations from the date of the Agreement
through the Effective Date.
(h) Seller shall not enter into a lease renewal with respect to the
Forrestal Office without the prior written consent of Purchaser. Seller shall
permit Purchaser to participate in lease negotiations related to this Office.
20
<PAGE>
ARTICLE V
---------
OBLIGATIONS OF THE PARTIES PRIOR TO AND AFTER EFFECTIVE DATE
5.01 Full Access
-----------
The Seller shall afford to the officers and authorized representatives
of the Purchaser access to properties, books and records pertaining to the
Branches in order that the Purchaser may have full opportunity to make such
reasonable investigation upon reasonable written notice to Seller of the affairs
of the Seller relating to the Branches and the officers of the Seller will
furnish the Purchaser with such additional financial and operating data and
other information as to its business and properties at the Branches as the
Purchaser shall from time to time reasonably request and as shall be available,
including, without limitation, information required for inclusion in all
governmental applications necessary to effect the Transaction provided Seller
need not employ any accountants or other professionals. Nothing in this Section
5.01 shall be deemed to require the Seller to breach any obligation of
confidentiality. Purchaser shall hold, and shall cause its officers, directors,
employees and any agents or representatives to hold, in confidence, unless
compelled to disclose by judicial or administrative process or by other
requirements of Law (in which case Purchaser shall give Seller written notice of
the intended disclosure promptly if possible so that Seller may seek a
protective order or other appropriate remedy), all confidential documents and
information concerning Seller or its business provided to Purchaser or agents
pursuant to this Section.
5.02 Requirements of Regulatory Authorities
--------------------------------------
The Seller shall, as soon as is practicable after the Purchaser
receives regulatory approval and raises sufficient capital to consummate the
Transaction, notify the proper regulatory authorities of its intent to terminate
operation of the Branches and thereafter shall comply with the normal and usual
requirements imposed by such authority applicable to transfer the operations of
the Branches.
5.03 Regulatory Application to Effect the Purchase of
Assets and Assumption of Liabilities
-----------------------------------------------------------------------
The Purchaser shall prepare and file, with the assistance of the Seller
as may be required, as soon as practicable, but not later than 30 days following
the date of this Agreement, any applications or notices, as may be required by
law or regulation, to the appropriate Federal and/or State regulatory
authorities for approval to effect this Transaction, and the Parties hereto
shall, if required by applicable statute or regulation, publish appropriate
notice of the Transaction or related regulatory application. The Purchaser
agrees to use its good faith best efforts to obtain such approval in a diligent
manner and on a priority basis, and the Purchaser
21
<PAGE>
further agrees to prepare the application in a diligent manner and on a priority
basis. Each party shall pay its own fees associated with its regulatory
applications.
5.04 Further Assurance
-----------------
Both parties hereby agree to execute and deliver such instruments and
take such other actions as the other party may reasonably require in order to
carry out the intent of this Agreement, and the Seller agrees to execute and
deliver such Bill of Sale, lease assignments, acknowledgements and other
instruments of conveyance and transfer as, in the reasonable judgment of the
Purchaser, shall be necessary and appropriate to vest in the Purchaser legal and
equitable title to the Assets and Deposit Liabilities of the Seller being sold
hereunder, free and clear of all liens and encumbrances other than Permitted
Liens. The Purchaser shall be responsible for the costs of examining title,
surveys, recording of documents, etc., related to conveyance of the real
property with respect to the Transaction.
5.05 Right to Intervene
------------------
In the event that any litigation is instituted against the Purchaser
under or in connection with this Agreement, the Seller shall have the right in
its sole discretion to intervene in such litigation and the Purchaser does
hereby consent to such intervention.
5.06 Employee Related Matters
------------------------
(a) Covered Employees. The Purchaser shall offer employment, effective
immediately after the Effective Date for a period of not less than 12 months at
work locations which are in the same geographic area and in job positions that
are similar to that held as of the Effective Date to all full-time and part-time
employees working in the Branches and the area community lending office who are
listed at Exhibit 5.06(a) ("Bank Employees"). The Purchaser shall communicate
offers of employment to Bank Employees as soon as practicable after the date
hereof. All Bank Employees who commence employment with the Purchaser as of the
Effective Date shall be referred to collectively as "Covered Employees".
Notwithstanding the foregoing, any Bank Employee who accepts the Purchaser's
offer of employment and who is on disability, sick or such other paid or unpaid
leave (other than vacation leave) on the Effective Date will be deemed to become
a Covered Employee as of the date he or she returns to work and reports to the
Purchaser to commence such employment following expiration of said leave,
provided he or she returns to employment by the latter of six (6) months after
the commencement of such leave or 30 days after the Effective Date. Prior to the
date that such employee on leave reports to work with the Purchaser, such
individual shall remain a Bank Employee. If such employee on leave fails to
return from leave within the specified period, then such employee shall not be
deemed an employee of Purchaser for any reason whatsoever. All Bank Employees
shall cease employment with Seller at such time that they shall be deemed to be
Covered Employees. The Purchaser shall employ such Covered Employees on the
Effective Date at (i) in the case of
22
<PAGE>
salaried Bank Employees, base salaries at least equal to their existing base
salaries, and (ii) in the case of hourly Bank Employees, their existing hourly
rates. Salaries for salaried Bank Employees and compensation for full-time and
part-time hourly employees shall not be adjusted by the Purchaser to reflect any
increases or decreases in the number of hours in the scheduled workweeks of such
persons becoming Covered Employees. The Purchaser shall employ such Covered
Employees for a period of not less than one year from the Effective Date, except
in the event of voluntary termination by the respective employee or termination
for "cause" (as that term is applied pursuant to the Purchaser's personnel
policies).
(b) Benefit Plans and other Policies - General.
-------------------------------------------
(i) As of the Effective Date, the Purchaser shall provide each
Covered Employee with coverage under each benefit plan, program, policy
(including that for vacation and sick days) and arrangement established,
maintained or contributed to by Purchaser and which is provided to similarly
situated employees of the Purchaser immediately prior to the date of execution
of this Agreement ("Purchaser's Plan"). Coverage under Purchaser's Plan shall be
subject to the same terms and conditions to which coverage of similarly situated
employees of the Purchaser are subject, except that Purchaser shall waive any
waiting periods and pre-existing conditions exclusions for the Covered Employees
to the extent that such individuals were in fact enrolled in and covered under
the Seller's plans as of the Effective Date with respect to such conditions. As
of the Effective Date, the Purchaser shall provide credit for each Covered
Employee's service with Seller (including periods of employment with any other
employer which are taken into account under Seller's benefit plans) prior to the
Effective Date for purposes of eligibility for, participation in, and vesting,
if applicable, under Purchaser's Plans.
(ii) The Purchaser shall credit each Covered Employee for any
eligible expenses (as defined under the Purchaser's welfare benefit plans)
incurred in 1997 prior to the Effective Date by, and claims paid on behalf of,
such Covered Employee and his or her covered dependents (if applicable) for
purposes of satisfying the 1997 deductible provisions and the 1997 maximum
annual out of pocket under the Purchaser's Plans which are welfare benefit
plans. Seller will reimburse Purchaser for all out-of-pocket expenses incurred
by Purchaser in satisfying such 1997 deductible provisions under Purchaser's
Plans upon receipt by the Seller of an employee-by-employee accounting
requesting such reimbursements; provided that no reimbursements shall be made by
Seller to Purchaser with respect to any request for reimbursements received by
Seller after June 30, 1998.
(iii) Seller shall retain all liability for all hospital,
medical, life insurance, disability and other covered welfare benefit plan
expenses and benefits for each Covered Employee with respect to claims incurred
by such person or his or her covered dependents on or prior to the Effective
Date. The Purchaser's Plans shall pay for all such claims incurred by each
Covered Employee or his or her covered dependents after the Effective Date in
accordance with the provisions of such Purchaser's Plans as may be amended from
time to time. For this
23
<PAGE>
purpose, a claim is incurred when the medical or other service giving rise to
the claim is performed, except that in the case of death, a claim is incurred on
the date of death.
(iv) Seller shall be responsible for all legally mandated
continuation of health care coverage for Bank Employees and their covered
dependents who have a loss of health care coverage due to a qualifying event
with respect to periods on or prior to the Effective Date. The Purchaser shall
be responsible for such coverage for Covered Employees and their dependents who
have had a loss of health care coverage due to a qualifying event occurring
after the date that such Bank Employees shall be deemed Covered Employees,
except for coverage exclusions provided for in accordance with Section
5.06(b)(i) of the Agreement.
(c) Defined Benefit Plan. The Purchaser represents that it does not
maintain or contribute to any employee benefit plan subject to Title IV of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"). No assets
or liabilities with respect to Covered Employees or their beneficiaries shall be
transferred as a result of this Agreement from the Retirement Plan of the Bank
of New York Company, Inc. ("Seller's Retirement Plan") to any plan or
arrangement established or maintained by the Purchaser for the benefit of such
Covered Employees or their beneficiaries. After the Effective Date, no further
benefit shall accrue under Seller's Retirement Plan with respect to Covered
Employees. Benefits payable to Covered Employees under Seller's Retirement Plan
shall be payable to such Covered Employees pursuant to the terms of, and at the
time and in the amounts provided under, Seller's Retirement Plan based upon such
Covered Employee's years of service with Seller (and any periods of service with
any other employer which are otherwise taken into account under Seller's
Retirement Plan for such Covered Employees) and compensation received from
Seller through the Effective Date. The Purchaser shall not assume any liability
or responsibility with respect to the Seller's Retirement Plan as a result of
(i) the Transaction, or (ii) the hiring of any Bank Employees as Covered
Employees in accordance with the Agreement.
(d) Savings Plan.
(i) All Covered Employees who are participants
in the Employees' Incentive Savings Plan of The Bank of New York
Company, Inc. ("Seller's Savings Plan") shall become fully vested in
their account balances as of the Effective Date.
(ii) Following the Effective Date, Purchaser shall advise
Seller periodically of the separation from service of any Covered Employees to
the extent that such information may be necessary for the Seller to administer
the Seller's Savings Plan.
(iii) As of the Effective Date, the Purchaser shall permit all
Covered Employees to be eligible to participate in the Sun National Bank 401(k)
Plan, which is one of Purchaser's Plans which is a pension benefit plan within
the meaning of Section 3(2) of ERISA and is intended to be qualified under
Section 401(a) of the Code ("Purchaser's Savings Plan").
24
<PAGE>
(e) Vacation. The Purchaser shall be responsible for vacation
entitlement of Covered Employees after the Effective Date and shall take into
account past service from each Covered Employee's date of hire with Seller. The
Purchaser shall apply any vacation time taken by Covered Employees in calendar
year 1997 with Seller against any 1997 vacation time entitlement. Seller will
provide the Purchaser with a record of such vacation time taken by Covered
Employees as of the Effective Date. For 1997, Covered Employees shall be
entitled to take vacation leave after the Effective Date but prior to January 1,
1998 that they would have been eligible to utilize had they remained a Bank
Employee, subject to prior scheduling of such leave with the Seller and approval
by the Purchaser (which approval shall not be unreasonably withheld). Seller
will reimburse Purchaser for all out-of-pocket expenses incurred by Purchaser in
paying vacation pay to Covered Employees that utilize vacation leave after the
Effective Date but prior to January 1, 1998, upon receipt by the Seller of an
employee-by-employee accounting requesting such reimbursements; provided that no
reimbursements shall be made by Seller to Purchaser with respect to any request
for reimbursements received by Seller after January 31, 1998.
(f) Seller shall pay to all Covered Employees of the Branches as of the
Effective Date all wages earned and payable (excluding vacation pay entitlements
to be honored by the Purchaser in accordance with Section 5.06(e)) through the
Effective Date.
5.07 Customer Data
-------------
Seller shall provide Purchaser with such data processing computer disks
or tapes encoded with information pertaining to deposit accounts of the
Branches' customers as Purchaser shall request, or authorizations of Seller for
Purchaser to access same from the service bureau maintaining such information as
of the Effective Date. Each Party shall pay its own expenses associated with the
data processing conversion of the customer records to be transferred. Seller
shall provide Purchaser with reasonably available statistical data related to
Branches prior to the Effective Date.
Seller and Purchaser 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
Loans and the Deposit Liabilities which is maintained on Seller's data
processing systems so that Purchaser can incorporate such information into
Purchaser's data processing systems no later than the opening of business on the
next calendar day following the Effective Date. The foregoing shall be subject
to the restrictions of any applicable vendor or licensing agreements and the
need to maintain the confidentiality of Seller's proprietary information.
5.08 Allocation of Purchase Price
----------------------------
25
<PAGE>
The purchase price paid and liabilities assumed by the Purchaser
pursuant to this Agreement shall be allocated as agreed to by the Seller and the
Purchaser in accordance with Section 1060 of the Internal Revenue Code of 1986,
as amended ("Code"). Purchaser shall prepare Form 8594 in a manner which
reflects the allocation agreed to by Seller and Purchaser, and shall submit it
to Seller for review within 30 days following the Effective Date. Seller and
Purchaser shall each file the agreed upon Form 8594 when due. Neither Purchaser
nor Seller shall file any tax returns that are inconsistent with such
allocation.
5.09 Use of Seller's Name, Trademarks and Service Marks
--------------------------------------------------
Notwithstanding anything herein to the contrary, no interest in or
right to use any logo, name, trademark or service mark presently or previously
used by the Seller is being conveyed pursuant to this Agreement. The Purchaser
agrees that on and after the Effective Date neither it nor any of its affiliates
(including the transferred branches) will use the name "The Bank of New York" or
"National Community Bank" or any derivative thereof, in connection with any
business or activity engaged in by the Purchaser and its affiliates. Promptly
after the Effective Date, the Purchaser shall commence the removal of the trade
names, service marks, logos, insignia, slogans, emblems, symbols, designs, and
other identifying characteristics from all premises, equipment, signs, interior
decor items, fixtures and furnishings, and from all printed materials associated
with the transferred branches and personal property acquired.
5.10 Leased Branches
---------------
With respect to any Leased Branch which requires the consent of the
landlord to the assignment of the branch lease as contemplated by this
Agreement, if the Seller is unable to obtain the landlord's consent to such
assignment and is unable to deliver to Purchaser an assignment of such branch
lease, then if Seller is able to sublease the branch under the branch lease,
Purchaser shall enter into a sublease with Seller which shall contain the terms
of the related lease and which shall otherwise be in form and substance
satisfactory to Purchaser and Seller, and if Seller is unable to sublease such
branch because the landlord's consent to such subletting is required and cannot
be obtained after the exercise of commercially reasonable efforts, Seller shall
exercise commercially reasonable efforts to put Purchaser in the same position
as if the landlord's consent to such assignment or sublease had been granted.
ARTICLE VI
----------
CONDITIONS TO PURCHASER'S OBLIGATIONS
Each and every obligation of the Purchaser under the Agreement to be
performed on or before the Effective Date shall be subject to the satisfaction,
on or before the Effective Date, of the following conditions:
26
<PAGE>
6.01 Obligations Performed
---------------------
(a) The representations and warranties made by the Seller in this
Agreement shall be true in all material respects at and as of the Effective Date
as though such representations and warranties were made at and as of such time,
except for any changes permitted by the terms hereof or consented to by the
Purchaser.
(b) The Seller shall have performed and complied with in all material
respects all obligations and agreements required by this Agreement to be
performed or complied with by it prior to or at the Effective Date.
(c) From the date of this Agreement until the Effective Date, there
shall have been no material adverse change, not cured, in the business or
material conditions (financial or otherwise) of the Branches, except for any
changes permitted by the terms, hereof, or consented to by the Purchaser.
(d) On the Effective Date, no action, suit or proceeding shall be
pending or threatened: (i) against the Seller which if adversely determined
would materially and adversely affect the business, properties and assets of the
Branches; or (ii) against either party which seeks to prohibit consummation of
the Transaction.
(e) The Seller shall have delivered to the Purchaser a certificate of a
senior vice president, dated the Effective Date, certifying to the fulfillment
of all the conditions contained at this Section 6.01.
(f) The Purchaser shall have received a certification from a senior
vice president for the Seller, dated the Effective Date, to the effect that (1)
the Seller has been duly organized and is validly existing, (2) the Seller has
duly authorized the execution and delivery of the Agreement and the performance
by the Seller of each of its obligations hereunder, (3) this Agreement and the
instruments delivered by the Seller pursuant hereto are valid, binding and
enforceable against the Seller in accordance with their respective terms
(subject only to applicable bankruptcy laws and principles of equity), (4) any
consents, approvals, permissions or authorizations required to be obtained under
any law, rule or regulation from any governmental body, agency or authority for
the consummation by the Seller of its obligations hereunder and the transaction
contemplated by the Seller herein have been obtained, and (5) such party is
unaware of any action, suit, proceeding, inquiry, or investigation, at law or in
equity, or before any court, public board or body, pending or threatened,
against the Seller wherein and unfavorable decision, ruling or finding would
materially and adversely affect the consummation, validity or enforceability of
the transaction contemplated hereby.
27
<PAGE>
(g) From the date of this Agreement until the Effective Date, there
shall have occurred no material damage to or destruction of the Branches or the
leasehold improvements thereto which have not been restored, repaired or
otherwise cured by the Effective Date.
ARTICLE VII
-----------
CONDITIONS TO SELLER'S OBLIGATIONS
Each and every obligation of the Seller under this Agreement to be
performed on or before the Effective Date shall be subject to the satisfaction,
on or before the Effective Date, of the following conditions:
7.01 Obligations Performed
---------------------
(a) The representations and warranties made by the Purchaser in this
Agreement shall be true in all material respects at and as of the Effective Date
as though such representations and warranties were made at and as of such time,
except for any changes permitted by the terms hereto or consented to by the
Seller.
(b) The Purchaser shall have performed and complied with in all
material respects all obligations and agreements required by the Agreement to be
performed or complied with by it prior to or at the Effective Date.
(c) On the Effective Date, no action, suit or proceeding shall be
pending or threatened against either party which seeks to prohibit consummation
of the Transaction.
(d) The Purchaser shall have delivered to the Seller a certificate of
its President, dated the Effective Date, certifying to the fulfillment of the
conditions at Section 7.01.
(e) The Seller shall have received a certification from the President
for the Purchaser, dated the Effective Date, to the effect that (1) the
Purchaser has been duly organized and is validly existing, (2) the Purchaser had
duly authorized the execution and delivery of this Agreement and the performance
by the Purchaser of each of their respective obligations hereunder, (3) this
Agreement and the instruments delivered by the Purchaser pursuant hereto are
valid, binding and enforceable against the Purchaser in accordance with their
respective terms (subject only to applicable bankruptcy laws and principles of
equity), (4) other than the approval of agencies regulating the Purchaser to buy
the assets and assume the liabilities pursuant to this Agreement and to
establish the Branches contemplated hereby, no other consents, approvals,
permissions or authorizations are required to be obtained under the law, rule or
regulation from any governmental body, agency or authority for the consummation
by the Purchaser of its obligations hereunder and the transactions contemplated
by the Purchaser herein, and the aforesaid approvals have been obtained and are
in full force and effect, and (5)
28
<PAGE>
party is unaware of any action, suit, proceeding, inquiry, or investigation at
law or in equity, or before any court, public board or body, pending or
threatened, against the Purchaser wherein an unfavorable decision, ruling or
finding would materially and adversely effect any such approval, consent or
permission or the consummation, validity or enforceability or the transaction
contemplated hereby.
(f) The Purchaser has raised sufficient capital to finance the
Transaction.
ARTICLE VIII
------------
CONDITIONS TO THE SELLER'S AND THE PURCHASER'S OBLIGATIONS
Each and every obligation of the parties under this Agreement to be
performed on or before the Effective Date shall be subject to the satisfaction,
on or before the Effective Date, of the following conditions:
8.01 Approval of Governmental Authorities
------------------------------------
The approval by the appropriate regulatory authorities shall have been
obtained; the consent of the appropriate regulatory authorities to the
establishment and operation by the Purchaser of a bank branch at each of the
present locations of the Branches shall have been obtained (except for Branch
locations that may have been excluded from the Transaction by operation of
Sections 8.02 or 8.03; and termination of branch operations conducted by the
Seller at the Branches locations and the Seller's consummation of the
Transaction shall not have been objected to by the appropriate regulatory
authority.
8.02 Leased Branches
---------------
The lessors under any real estate leases related to the Leased Branches
to be assigned shall have consented to the Seller's assignment of such leases to
the Purchaser on terms substantially similar to the existing terms between the
Seller and the lessors, and the lessors shall execute such lease assignment and
estoppel certificate, or Seller shall have entered into other arrangements as
contemplated by Section 5.10 to the satisfaction of the Purchaser. Further,
landlord shall furnish the Purchaser with a statement of the balance of any
security deposits held under such lease as of the Effective Date, giving effect
to all deductions that are deemed necessary by the landlord following an
inspection of the property as of the Effective Date. Notwithstanding the
foregoing, to the extent that Seller shall not deliver a lease assignment or
similar instruments or shall be unable to provide other arrangements as
contemplated by Section 5.10 to the satisfaction of the Purchaser, then
Purchaser shall nevertheless assume the Deposit Liabilities and Overdraft Lines
and shall acquire the Loans and Branch Cash associated with
29
<PAGE>
such Leased Branch and shall offer to hire such Bank Employees assigned to such
Leased Branch (but without the obligation to employ such employees at the
location of this branch facility that is not transferring), but shall not be
obligated to acquire the FFE, or other related assets of such Leased Branch and
the Purchase Price shall be reduced by the book value of such assets not
acquired.
a.03 Due Diligence/Environmental Matters/Building Systems
----------------------------------------------------
(a) 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 Purchaser. In the event Seller
is unable to procure a Letter of Nonapplicability by the Effective Date, the
Purchaser will have the option of postponing the Effective Date until the Seller
receives the Letter of Nonapplicability or may consummate the Transaction
without receiving the Letter of Nonapplicability.
(b) Purchaser may, within thirty (30) days from the date of this
Agreement, at its sole cost and expense, arrange for an engineering inspection
and report with respect to the Leased Branches and the Purchased Branches and
the building operating systems (including plumbing, electrical, HVAC, drive thru
air transport system, roof, walls or foundations). Such inspection is to be
conducted by an engineer that is duly licensed and in good standing and
qualified to do business in the State of New Jersey. In the event the aforesaid
inspection reveals the existence of defects in the the building or its systems,
the Purchaser shall so notify Seller in writing, citing such deficiencies with
specificity and providing Seller with a copy of the engineer's report. If
Seller's good faith estimated cost of curing the specified deficiencies is less
than $10,000 per branch location, Seller shall promptly cure such deficiencies
or, at Seller's option, reduce the Purchase Price in an amount equal to a
mutually agreed upon estimate of the cost of curing such deficiencies. If the
total cost of repair is greater than $10,000.00 per branch location, Seller
shall notify the Purchaser by written notice within 10 days of Purchaser's
notice, of its election to (i) correct the condition, or (ii) leave the
condition uncorrected. If Seller elects not to correct the condition, Purchaser
must elect within 10 days of Seller's written notice to either (i) close this
Transaction without the condition being corrected, accept possession of the
branch premises in its then "As Is" condition and take a reduction in the
Purchase Price equal to the reasonable cost of such repair, in an amount up to
but not to exceed $10,000.00 per location, or (ii) exclude from this Agreement
such branch office and FFE of this branch, and reduce the Purchase Price of the
Transaction. Purchaser shall nevertheless assume the Deposit Liabilities and
Overdraft Lines related to such excluded branch office, acquire the Loans and
Branch Cash associated with such excluded branch office, and offer to hire the
Bank Employees assigned to such excluded branch (but without the obligation to
employ such employees at the location of the excluded branch office).
(c) Purchaser shall have forty-five (45) days from the date of
execution of this Agreement to cause an independent environmental consultant of
its choice to inspect and
30
<PAGE>
audit the buildings, leasehold improvements and real property related to the
Branches for the existence of any and all environmental conditions and any and
all violations of environmental laws, as is commonly referred to as a Phase I
environmental study (the "Environmental Audit"). The cost of such Environmental
Audit shall be paid by the Purchaser, with a credit for 50% of such payments to
the Purchaser at the Closing by the Seller, not to exceed a credit of $750 per
Branch inspected. If such Environmental Audit discovers any environmental
condition that the Purchaser reasonably finds unacceptable within its sole
discretion ("Environmental Condition"), the Purchaser may deliver written notice
of exclusion of the affected branch office ("Excluded Branch") on or before the
day which is forty-five (45) days from the date of the Agreement, which notice
shall identify such Environmental Condition. Seller shall have 45 days from the
receipt of such notice of exclusion to undertake such actions as are necessary
to the satisfaction of the Purchaser to cure such defects or conditions in which
case such notice of exclusion shall be deemed withdrawn. Alternatively, if
Seller does not agree in a writing satisfactory to the Purchaser within such 45
day time period to remedy such Environmental Condition to the satisfaction of
the Purchaser, then the Purchaser shall have the right to proceed with the
Transaction without the Excluded Branch facility being a part of the
Transaction, in which case there shall be a reduction in the Purchase Price of
the Transaction equal to the book value of the Excluded Branch and related FFE
of the Excluded Branch. Purchaser shall nevertheless assume the Deposit
Liabilities and Overdraft Lines related to such Excluded Branch, acquire the
Loans and Branch Cash associated with such Excluded Branch, and offer to hire
the Bank Employees assigned to such Excluded Branch (but without the obligation
to employ such employees at the location of the Excluded Branch). The Purchaser
shall furnish the Seller with a copy of the results of such Environmental Audit
within three (3) business days of receipt of such report. The result of such
Environmental Audit shall not be disclosed to any third party without the prior
written consent of the Parties.
(d) 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 Purchaser or its agents, consultants
or employees to any third party without Seller's prior written approval, unless
and until Purchaser is legally compelled to make such disclosure under
applicable laws or until Purchaser completes its purchase of the Assets pursuant
to this Agreement. Notwithstanding the foregoing, Purchaser 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 "Purchaser" for purposes of this section), the specific
identities of whom shall be supplied to Seller prior to any permitted disclosure
to such party by Purchaser. If this Agreement is terminated for any reason,
Purchaser shall immediately deliver and/or return to Seller any and all
documents, plans and other items furnished to Purchaser pursuant to this
Section.
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<PAGE>
ARTICLE IX
----------
TERMINATION
9.01 Methods of Termination
----------------------
This Agreement may be terminated at any time, but not later than the Effective
Date:
(a) By mutual agreement of the Purchaser and the Seller, or
(b) By Purchaser or Seller in writing if the other shall have been in
breach of any representation and warranty in any material respect, or in
material breach of any covenant, undertaking or obligation contained herein, and
such breach has not been cured within 30 calendar days after the giving of
notice to the breaching party of such breach, provided that such party
terminating the Agreement shall not otherwise be in breach of any representation
and warranty in any material respect, or in material breach of any covenant,
undertaking or obligation contained herein, or
(c) By Purchaser in writing if the conditions set forth in
Article VI of this Agreement shall not have been met by Seller or waived in
writing by Purchaser, or
(d) By the Seller in writing if the conditions set forth
in Article VII of the Agreement shall not have been met by the Purchaser or
waived in writing by the Seller, or
(e) By Seller in writing at any time after any applicable regulatory
authority has denied approval of any application filed by the Purchaser for
approval of the Transaction contemplated herein, or
(f) By Purchaser in writing at any time after any applicable regulatory
authority has denied approval of any application filed by the Seller for
approval of the Transaction contemplated herein, or
(g) By the Seller or the Purchaser if the Effective Date
has not occurred on or before December 15, 1997.
9.02 Procedure Upon Termination
--------------------------
In the event of termination pursuant to Section 9.01, written notice
thereof shall be given to the other party, and this Agreement shall terminate
immediately upon receipt of such notice, unless an extension is consented to by
the party or parties having the right to terminate. If this Agreement is
terminated as provided herein:
32
<PAGE>
(a) Each party will return all documents, work papers and other
materials of the party relating to this transaction, whether so obtained before
or after the execution hereof, to the party furnishing the same; and
(b) All information received by either party hereto with respect to the
business of the other party (other than information which is a matter of public
knowledge or which has heretofore been or is hereafter published in any
publication for public distribution or filed as public information with any
governmental authority) shall not at any time be used for business advantage by
such party or disclosed by such party to third persons to the detriment of the
party furnishing such information or if otherwise prohibited by state or federal
law.
(c) Nothing contained in this Article IX shall be deemed to excuse
either party for a breach of any of its obligations or agreements undertaken or
made in this Agreement.
ARTICLE X
---------
MISCELLANEOUS PROVISIONS
10.01 Entire Agreement; Amendment and Modification
--------------------------------------------
The parties hereto expressly acknowledge, represent and agree that this
agreement is fully integrated, sets forth, constitutes and contains all of the
promises, agreements, conditions and understandings among the parties respecting
the Transaction and supersedes all negotiations, conversations, discussions,
correspondence, memoranda, agreements, and understandings, whether written or
oral, among the parties or any of their affiliates concerning the Transaction.
The parties hereto further acknowledge, represent and agree that no party nor
any of its affiliates has made representations, promises or statements to induce
any other party to enter into this Agreement and each party specifically
disclaims reliance on any such representations, promises or statements and any
rights arising therefrom.
10.02 Assignment
----------
This Agreement and all provisions hereof shall be binding upon, and
inure to the benefit of, the parties hereto and their respective successors and
permitted assignments, but neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned, prior to the Effective
Date, by either of the parties hereto without the prior written consent of the
other.
33
<PAGE>
10.03 Counterparts
------------
This Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
10.04 Headings
--------
The headings of the Sections and Articles of this Agreement are
inserted for convenience only and shall not constitute a part hereof.
10.05 Survival of Representations and Warranties
------------------------------------------
The respective representations and warranties of the parties hereto
contained herein shall survive for a period of one year after the Effective
Date, unless stated otherwise herein.
10.06 Payment of Expenses
-------------------
Each party herein shall pay for its own expenses and costs in
connection with the carrying out of this Agreement except as stated otherwise
herein. Each Party shall pay its own applicable fees with respect to any
regulatory application fee related to the Transaction.
10.07 Governing Law
-------------
This Agreement shall be governed by the laws of the State of New Jersey
except to the extent that Federal law shall control.
10.08 Public Disclosure; Advertising
------------------------------
Except as herein provided to the contrary or as required by law or
otherwise herein agreed, neither Party shall make any public disclosure of any
Transaction to be consummated hereunder prior to the Effective Date. Any press
release, public notice or notice to local officials regarding this Agreement or
the transactions contemplated herein to be made prior to the Effective Date
shall be approved in writing by all Parties prior to its release; the approval
of any party shall not be unreasonably withheld.
10.09 Failure to Raise Capital
------------------------
In the event Purchaser fails to raise sufficient capital necessary to
consummate the Transaction on or prior to December 15, 1997, and the Seller
terminates this Agreement, the Purchaser will pay the Seller a fee of
$100,000.00.
34
<PAGE>
10.10 WAIVER OF JURY TRIAL
--------------------
SELLER AND PURCHASER EACH HEREBY WAIVES TRIAL BY JURY IN ANY JUDICIAL
PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN
TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED
WITH THIS AGREEMENT OR THE RELATIONSHIPS ESTABLISHED HEREUNDER.
10.11 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 Purchaser.
10.12 Addresses for Notice, etc.
--------------------------
All notices, requests, demands and other communications provided for
hereunder and under the related documents shall be in writing (including
telegraphic communications) and mailed (by registered or certified mail) or
telegraphed or delivered to the applicable party at the addresses indicated
below:
If to the Seller: With a copy to:
Paul S. Foster Chief Legal Officer
The Bank of New York The Bank of New York
Corporate Planning Dept. One Wall Street
48 Wall Street - 27th Floor New York, New York 10286
New York, New York 10286
If to the Purchaser: With a copy to:
Sun National Bank Richard Fisch, Esq.
Attn: Ronald A. Seagraves Malizia, Spidi, Sloane & Fisch, P.C.
226 Landis Avenue 1301 K Street, NW
Vineland, NJ 08360 Suite 700 East
Washington, DC 20005
or, as to each party, at such address as shall be designated by such party in a
written notice to each party complying as to delivery with the terms of this
Section.
* END OF DOCUMENT - SIGNATURE PAGE TO FOLLOW *
35
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their duly authorized officers and their corporate seals to be
affixed as of the date written above.
ATTEST: THE BANK OF NEW YORK
/s/ BY: /s/Robert C. Kuser, Jr.
- --------------------- ------------------------------------
Senior Vice President
ATTEST: SUN NATIONAL BANK
/s/ BY: /s/Philip W. Koebig, III
- --------------------- ------------------------------------
Philip W. Koebig, III
President and CEO
EXHIBIT 99.2
<PAGE>
SUN BANCORP, INC.
NEWS RELEASE NEWS RELEASE NEWS RELEASE NEWS RELEASE
****FOR IMMEDIATE RELEASE****
FOR MORE INFORMATION, CONTACT: Robert F. Mack (609) 691-7700
Vineland, NJ........June 4, 1997
SUN BANCORP, INC. TO PURCHASE ELEVEN BANK OF NEW YORK BRANCHES
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 eleven New Jersey branches from The Bank of New
York. Six of the branches are located in Atlantic County, three in Mercer County
and one each in Middlesex and Somerset Counties, New Jersey.
The branches have approximately $175 million in deposits.
"We are pleased to have an opportunity to strengthen our presence in
Atlantic and Mercer Counties and to expand into Middlesex and Somerset
Counties," commented Brown. "When this transaction is complete, Sun will have
thirty-nine financial service centers serving southern and central New Jersey,"
he added.
Sun has developed a reputation for being a community bank that focuses
on the needs of its customers," 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 the continuation of a wide range of
products and services, while also giving them the personalized attention of a
community bank. Also, we are pleased to announce that, once the transaction has
been completed, branch employees will be retained by Sun."
Koebig also commented that this is the seventh in a series of purchases
during the past three 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 $800 million
following the completion of the transaction with The Bank of New York. The
transaction is subject to regulatory approval and the raising of additional
capital. It is expected to close during the fourth quarter of 1997.
<PAGE>
Sun National Bank currently has twenty financial service centers in
Atlantic, Burlington, Cape May, Cumberland, Mercer an Ocean Counties, New
Jersey, servicing the retail and commercial markets. Sun has previously
announced the June, 1997 acquisition of four branches of First Union National
Bank and the July, 1997 acquisition of three branches from Oritani Savings Bank,
SLA.
Sun Bancorp, Inc. common stock is listed on the Nasdaq Small Cap Market
under the symbol SNBC. Its Trust Preferred Securities are listed on the Nasdaq
National Market under the symbol SNBCP. Sun's deposits are insured by the
F.D.I.C.
EXHIBIT 99.3
<PAGE>
Exhibit 99.3
[LOGO]
NEWS RELEASE NEWS RELEASE NEWS RELEASE NEWS RELEASE
**** FOR IMMEDIATE RELEASE ****
FOR MORE INFORMATION, CONTACT: Robert F. Mack (609) 691-7700
SUN BANCORP, INC. ANNOUNCES STOCK DIVIDEND
Vineland, NJ.......................................May 20, 1997
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 on June 25, 1997 Sun will pay a 5% stock
dividend to common shareholders of record as of June 2, 1997. Fractional shares
created as a result of the dividend will be paid in cash.
The dividend announcement was made less than seven months from the date of its
previous stock dividend - also a 5% stock dividend. Sun Bancorp, Inc. common
stock trades on the Nasdaq SmallCap Stock Market under the symbol "SNBC".
<PAGE>
[LOGO]
SUN BANCORP, INC. ANNOUNCES STOCK DIVIDEND
Page 2 of 2 May 20, 1997
In announcing the dividend, Mr. Brown remarked that Sun Bancorp had continued to
perform at record levels. "We are pleased to be able to declare this dividend as
a result of the performance of our organization and for the very loyal support
from our shareholders," remarked Brown.
"Sun is becoming recognized as a bank that exceeds the expectations of its
customers," remarked Koebig, who also serves as President and Chief Executive
Officer of Sun National Bank. "That personalized service has resulted in strong
growth, which translates into added value for our shareholders."
Sun National Bank has nineteen financial service 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.
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