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)
February 25, 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 February 25, 1997, Sun Bancorp, Inc. (the "Corporation"), the holding
company for Sun National Bank (the "Bank"), announced that the Bank had entered
into a Purchase and Deposit Assumption Agreement (the "Agreement") to acquire
three branch offices located in Camden County, New Jersey, and approximately $33
million of deposits from Oritani Savings Bank, SLA, Hackensack, New Jersey
("Seller"). In connection with the acquisition, the Bank has agreed to pay
Seller a premium of approximately $2.1 million. Consummation of the transaction
is subject to, among other conditions, regulatory approval.
A copy of the Agreement dated February 25, 1997, and the press release
issued by the Corporation on February 25, 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 Purchase and Deposit Assumption Agreement
dated February 25, 1997.
99.2 Press Release dated February 25, 1997.
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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: February 25, 1997 By: /s/Philip W. Koebig, III
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Philip W. Koebig, III
Executive Vice President
EXHIBIT 99.1
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BRANCH PURCHASE AND DEPOSIT ASSUMPTION AGREEMENT
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THIS BRANCH PURCHASE AND DEPOSIT ASSUMPTION AGREEMENT ( the "Agreement" is
entered into this 25th day of February, 1997 (the "Agreement Date"), between
Oritani Savings Bank, SLA (the "Seller"), a New Jersey Chartered Mutual Savings
and Loan Association having its principal office at 321 Main Street, Hackensack,
New Jersey 07601, 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 deposits and fixed assets of the
branch offices operated by it at 1468 Blackwood and Clementon Roads, Cherrywood
Mall Plaza, Clementon, New Jersey ("Clementon Branch"), 430 Gibbsboro Road,
Lindenwold, New Jersey ("Lindenwold Branch") and 47 South Centre Street,
Merchantville, New Jersey ("Merchantville Branch"), (collectively "the
Branches");
WHEREAS, the Purchaser wishes to purchase the deposits 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 possible following receipt of all approvals of regulatory
authorities necessary for the Purchaser and Seller to consummate such
Transaction at such time and date as may be mutually agreed to by the Parties
(the "Effective Date" or the "Closing Date"). The Closing shall be held at such
place as may be agreed upon by the Parties. The Closing shall occur as soon as
practicable after the fifteenth (15th) calendar day following the last date of
required regulatory approval, but in no event later that August 1, 1997.
Determination of the Closing 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. It is agreed that
time is of the essence with respect to this Transaction.
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1.02 Transfer and Consideration of Assets.
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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 that certain Lease Agreement by and
between Cherrywood Mall Corp., and Oritani Savings & Loan
Association, dated July 16, 1994, pertaining to the Clementon
Branch ("Lease"), together with all leasehold improvements
thereon, including any security deposits on such real estate
leases net of deductions as specified at Exhibit A-1, if any.
Seller shall apply for a refund of its South Jersey Gas
Company deposit in the amount of $250.00 in advance of the
Effective Date. In the event Seller's South Jersey Gas Company
deposit is transferrable to Purchaser, Seller shall take all
action necessary to transfer same and Seller shall receive a
credit of $250.00 on the Effective Date.
(ii) As Fee Simple Owner of the real estate and improvements
known as the Lindenwold Branch and Merchantville Branch, as
more particularly described on Exhibits A-2 and A-3
respectively.
(2) All of its rights, title and interest in and to all of the
furniture, fixtures and equipment used in the operation of the
Branches (exclusive of signage and supplies and forms of Seller), as
set forth in Exhibit B attached hereto; and
Purchase Price shall mean the sum of: (1) the market values, as determined by
Stack & Stack (an MAI appraisal company) and agreed upon by Purchaser and Seller
for the real property at which the Lindenwold Branch and Merchantville Branch
are located (the "Real Estate Purchase Price" as set forth on Exhibit H); and
the net 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"). In the event the parties are unable to
agree on the Real Estate Purchase Price within fifteen (15) days of receipt of
appraisal reports, Purchaser shall retain an MAI appraiser of its choosing to
appraise either one or both Branches. In the event Purchaser's MAI appraiser and
Seller's MAI appraiser are unable to agree as to the value of either or both
Branches within thirty (30) days of such fifteen (15) day period, the two MAI
appraisers shall agree on and designate a third MAI, and his determination as to
value of either or both Branches shall be conclusive. Each party shall pay its
own MAI appraiser. Should a third MAI appraiser be required, the parties shall
split the cost of said third MAI appraiser.
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(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"):
(i) 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 December 31, 1996, is attached hereto as Exhibit
C). Within five (5) business days Seller will deliver to Purchaser
(x) the detail trial balance to include account numbers, customers
names and account balances as of December 31, 1996, and (y) monthly
balance reports by type of account, for each month spanning the
period from January 1, 1997 to the date hereof. Thereafter, Seller
shall furnish monthly balance reports by type of account, as same
become available. 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 withdrawal and certificate accounts
and Individual Retirement Arrangement ("IRA") accounts, together
with accrued interest as of the Closing Date. With respect to IRA
accounts, the Seller will execute an Appointment of Successor
Trustee Agreement effective as of the Effective Date which shall
name the Purchaser as successor trustee of the IRA Accounts in
accordance with the IRA Trust Agreements. The risk of loss for
deposited items in transit as of the Effective Date shall rest with
the Seller.
(ii) 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, personal property, furniture and
fixtures, and any related contracts, service agreements and leases
("Obligations"), if any, except to the extent that assumption is
objected to by the applicable third party, or purchaser and Seller
agree to cancel such obligations as of the Effective Date.
Obligations, if any, are set forth on Exhibit I.
1.03 Payments of Premium
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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 fixed
premium in the amount of $2,151,000.00 ("Premium Payment"), which Premium shall
not be adjusted to reflect actual Deposit Liabilities as of the closing date.
Seller shall continue operation of
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the Branches as presently conducted and shall use best efforts to maintain the
Deposit Liabilities at the levels as set forth on Exhibit C.
1.04 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 (the "Transfer
Amount") shall equal the outstanding balances and accrued interest on the
Deposit Liabilities as of the close of business on the Effective Date increased
by the Earnest Money plus interest at the passbook rate in effect from the date
of its deposit by Seller until the Effective Date or date of termination, if
earlier, as set forth in Section 1.04(e), and reduced by the sum of (i) the
Premium Payment, (ii) the Purchase Price, net of adjustments, and (iii) the
Branches Cash. "Branches Cash" shall be defined as all petty cash and vault cash
and drawer cash maintained at the Branches as of the Closing Date, subject to
audit verification conducted by a representative of each party as of the Closing
Date, and savings and checking deposit records and customer records relating
thereto. The payment formula referred to above is for the sole purpose of
determining the amount to be paid by the Seller 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 second business day
preceding the Effective Date reduced by the Purchase Price, net of adjustments
(the "Closing Payment"). 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 Closing Payment.
(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 and the difference between the
Transfer Amount and the Closing Payment. The difference between the Transfer
Amount and the Closing Payment 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
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within one year after the date of the final settlement statement 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 Closing Payment will be made as necessary
to reflect Seller's liability.
(e) The Purchaser has tendered a payment of $100,000.00 as an earnest
money deposit ("Earnest Money"). The Earnest Money will not be refundable if
Purchaser withdraws its offer or fails to diligently pursue the completion of
the transaction on the terms set forth in the January 21, 1997 offering
memorandum, as amended by Purchaser's letter dated February 6, 1997 and Seller's
letter dated February 7, 1997. The Earnest Money will be refundable if the
transaction cannot be completed due to Seller's acts or failure to obtain
regulatory approval, or as otherwise provided in Section 9.03.
1.05 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 the purchased
assets;
(c) Make available to the Purchaser cash or immediately available funds
equal to the Transfer Amount, as set forth in Section 1.04.
(d) Assign, transfer and deliver to the Purchaser such of the following
records pertaining to the Deposit Liabilities 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 on a continuing basis: (1) 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; and (2) The form of rules and regulations applicable
to the accounts to be transferred hereunder.
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 six (6) 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
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certifications 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 six (6) 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.
(e) At least thirty (30) days prior to the Closing Date, or as otherwise
agreed, Seller agrees to provide to Purchaser a list of all Deposit Liabilities,
identifying the types of each such deposit, the amount thereof, the interest
rate(s) paid thereon, the name(s) and address(es) of each deposit as well as all
other pertinent information regarding each depositor and his or her Deposit
Liabilities. Purchaser shall have the right, prior to the Closing Date, to
review the books and records of Seller relating to such Deposit Liabilities for
the purpose of verifying the accuracy of the foregoing list.
(f) On the Closing Date, Seller shall execute and deliver to Purchaser a
Bargain and Sale Deed with Covenants Against Grantor Acts, conveying good,
insurable and marketable title and interest in the real property related to the
Transaction, free and clear of all liens and encumbrances, except 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 thirty (30) days of this Agreement, to conduct a title search,
make application for title insurance and make objections. Any matters not
objected to or otherwise agreed upon by Purchaser shall be "Permitted
Exceptions" (except for any matters arising after such thirty (30) days of the
date of the Agreement).
(g) Seller shall pay to all employees of the Branches as of the Closing
Date all wages earned and payable through the closing Date, including all sums
payable for accrued sick leave or vacation pay. Purchaser shall not assume any
financial or legal liabilities or responsibility for payment of wages or
benefits earned and accrued by employees of Seller prior to the Closing Date. In
addition, Seller shall pay a two (2) week retention bonus to all employees who
remain employed by Seller until the Effective Date. Seller may disclose
Purchaser's agreement to offer employment for one year from the Effective Date,
as set forth herein.
(h) Seller shall render a final statement of account and related tax
reporting to each depositor and borrower whose accounts are assumed by the
Purchaser hereunder as of the Closing Date, including the filing of such tax
reporting with the appropriate taxing authorities.
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(i) Seller shall give all notices and take all other actions necessary and
required, including actions required by applicable laws, in connection with
Seller's assignment of and Purchaser's assumption of the liabilities and
responsibilities of Seller under any operating agreements, leases and service
contracts, with prior notice and consultation by the Purchaser.
(j) 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.
(k) Seller shall at its expense furnish Purchaser with one (1) set of
mailing labels addressed to each account holder and similar information in
electronic data format as of forty-five (45) days prior to the anticipated
Closing Date and an additional one (1) set of mailing labels as of the Closing
Date in order to facilitate the timely and efficient transition.
(l) Purchaser and Seller acknowledge that the Transaction is not a bulk
sale and is not subject to the bulk sale requirements under New Jersey law.
Seller agrees it shall be responsible for payment of all applicable taxes in
connection with the operation of its business, including at the Branch through
closing and hereby agrees to indemnify and hold harmless Purchaser for any of
such taxes or any penalties associated therewith. New Jersey sales tax
attributable to Purchaser's purchaser of the furniture, fixtures and equipment,
if any, shall be paid by Purchaser.
1.06 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.
(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.
1.07 Assumption Agreement
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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, the
Instrument of Assumption of Certain Liabilities attached hereto as Exhibit D. To
evidence the assumption by Purchaser of the Lease, as defined in Section
1.02(a)(i), Purchaser shall execute, acknowledge and deliver to the Seller and
landlord, on the Effective Date, the Assignment and Assumption Agreement and
Landlord's Consent, attached hereto as Exhibit E and such other instrument of
assumption as may be required by landlords of Seller in connection with or as a
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condition to landlord consents to assignment of the real estate lease pertaining
to the Branches to the Purchaser.
1.08 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 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 90th 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 by fax and by
mail within one day after receipt thereof by the Seller. 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.
In order to reduce the continuing charges to the Seller through the check
clearing system of the banking industry 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 90th 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 make it available to the
Purchaser for pick-up in the manner aforesaid and telephone the Purchaser of the
availability of the same for pick-up prior to 10:30 a.m. of the next banking day
after receipt.
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(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) The Purchaser acknowledges that the customers set forth on Exhibit G
(the "Equity Loan Customers"), attached hereto and made a part hereof, maintain
with Seller (i) home equity loans and (ii) checking accounts. Seller has granted
the Equity Loan Customers preferred home equity loan interest rates ("Preferred
Rates") in exchange for the right to collect home equity loan payments via a
direct reduction of the Equity Loan Customers' checking accounts. Seller agrees
to continue to offer the Preferred Rate to the Equity Loan Customers for so long
as the Purchaser shall electronically transfer the monthly payments from the
Equity Loan Customers' accounts to Seller via the Automated Clearing House
System.
(f) Adjustments after the Effective Date shall be made daily as may
be required. Such adjustments shall be by wire transfer.
(g) Approximately ten (10) days prior to the Effective Date, Seller shall
notify holders of ATM cards that all ATM cards will be void as of the Effective
Date.
1.09 Indemnification
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(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 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 received such notice to
investigate the threatened or pending claim and determine whether it will elect
to assume the defense of the matter involving such threatened or pending claim.
If it
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does so elect, the Seller will be given the Purchaser's full cooperation and
assistance in maintaining said defense. The Seller shall not be liable for any
amounts in settlement of a claim or action as describes 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 shall survive the Effective Date.
(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 operations and transactions occurring on or
after the Effective Date, and which involve the Branches or the assets or leases
transferred or liabilities assumed 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), there shall be a
proportionate monetary adjustment with respect thereto in favor of the Seller.
The Purchaser agrees further to defend, indemnify, and hold harmless the Seller
against all claims, losses, liabilities (including reasonable legal fees) and
obligations resulting from any material breach of any Agreement, representation
or warranty made by the Purchase in the Agreement or in any certificate
delivered to the Seller hereunder. 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 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 injury 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 the paragraph shall survive the Effective
Date.
1.10 Prorated Adjustment of Expenses
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(a) Except as otherwise noted herein to the contrary, 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 assumed by
the Purchaser hereunder, shall be pro-rated between the parties as of the
Closing 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) Pro-ration of FDIC Quarterly Assessment
---------------------------------------
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The FDIC quarterly assessment actually paid by the Seller for the
assessment period in which the Closing Date is included shall be pro rata as of
the Closing Date attributable to the Deposit Liabilities actually transferred as
of the Closing Date. Therefore, the assessment attributable to the Deposit
Liabilities transferred as of the closing Date for the remainder of the
quarterly assessment period shall be subject to proration based upon the daily
assessment rate paid by the Seller, the number of days remaining in the
quarterly assessment period following the Closing Date and the total Deposit
Liabilities actually transferred as of the Closing Date. There shall be no
proration of FDIC assessments for assessment periods occurring after the
quarterly assessment period in which the Closing Date is included.
(c) Seller has paid all assessments, special or periodic due and owing to
the FDIC. Any refund or credit relating to the assessments paid by Seller prior
to the Effective Date shall belong to the Seller.
1.11 Notice to Customers/Public Disclosures
- - -------------------------------------------
As mutually agreed upon by the Parties, Purchaser and/or Seller shall
notify holders of all accounts at the Branches prior to the Closing Date of the
Transaction and its impact on such account holders.
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 Jersey chartered Savings and Loan Association duly
organized, validly existing and in good standing under the laws of the State of
New Jersey. Prior to the Effective Date, the Seller may recharter itself from a
New Jersey chartered mutual savings association to a New Jersey chartered mutual
savings bank. 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, Savings Association
Insurance Fund (SAIF).
2.02 Leases; Title to Property; Encumbrances
- - --------------------------------------------
(a) The Seller has, and at the Effective Date will have good, insurable
and marketable title to the Lindenwold Branch and Merchantville Branch, a valid
lease to the Clementon Branch, 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 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 quiet enjoyment of the real estate ownership possession
and quiet enjoyment of
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the other assets or ownership of the Deposit Liabilities to be transferred in
accordance with this Agreement.
(b) The Seller has delivered to the Purchaser complete and correct copies
of the deeds to the properties and the Lease. The Lease and descriptions are
attached hereto as Exhibits A1, A2, and A3 respectively. The Lease is valid and
there does not exist with respect to the Seller's obligations thereunder, or to
the knowledge of the Seller (not having made any specific investigation for this
purpose), with respect to the obligation of any lessor thereunder, any material
default thereunder and, to the knowledge of the Seller (not having made any
specific investigation for this purpose, 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.
(c) The real estate, the leasehold improvements, the banking equipment,
the fixtures and the furniture being sold are all of the physical assets owned
by the Seller and used by it 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. The Purchaser, however, acknowledges and
agrees that all such property is being sold "as is" and without any warranties,
express or implied, other than specified in this paragraph. Seller is not bound
by any oral statements purported to have been made by any party.
(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.
Nothing herein shall obligate Seller to perform any repairs or improvements
required as a condition of obtaining a certificate of occupancy in connection
with this sale. 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 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.
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 or Articles of Association (whichever is applicable) or Bylaws of
the Seller; (2) any provision of any agreement or any other 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,
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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 default under, or cause the acceleration of the
maturity of, any 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
sale, have been duly authorized by the Board of Directors of the Seller. 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 (i) contains or will contain any untrue statement of a material fact or
(ii) omits or will omit fact necessary to make the statements contained therein
not misleading.
2.06 Non-Solicitation of Business
- - ---------------------------------
The Seller will not, for twelve (12) months subsequent to the Effective
Date, directly compete for or solicit customers whose deposit accounts have been
transferred hereunder. It is the intention of the parties that the Seller shall
not directly solicit deposits in Camden County, but the Purchaser recognizes and
agrees that the Seller cannot control mass mailing (except to eliminate Camden
County from any such mass mailing), distribution of statement "stuffers" or
other advertising materials to persons who also hold accounts at other branches
of the Seller or newspaper, radio and television advertisements of a general
nature, and that the Seller cannot control the solicitation of such customers
who enter other premises of the Seller or make telephone inquiries of Seller.
Nothing in this paragraph shall preclude the Seller from servicing customers
that have a borrowing or other business relationship with the Seller on the
Effective Date.
2.07 Restriction on New Branches
- - --------------------------------
The Seller shall not open an office or ATM facility within Camden County
for a period of one year following the Effective Date. This restriction shall
not affect any banking branch being operated by the Seller as of the close of
business on the date this of this Agreement, nor shall such restriction preclude
the Seller from acquiring or being acquired by another financial institution
which may have branches within such market area.
2.08 Limitation of Warranties
- - -----------------------------
Except as may be expressly represented or warranted in this Agreement by
the Seller, the Seller makes no representations or warranties whatsoever with
regard to any assets being transferred to the Purchaser, or liability or
obligation being assumed by the Purchaser.
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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 benefits.
2.10 Non-Solicitation
- - ---------------------
So long as this Agreement is in good standing, 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 or Deposit Liabilities of the Branches from the date hereof through
the Closing Date. Seller shall promptly inform Purchaser of the receipt from the
date hereof of any proposals, and terms thereof, from third parties relating to
any such potential acquisition.
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 Seller represents that to the best of Seller's knowledge, there exist no
underground storage tanks located on the premises or sidewalk areas of the
leased property or real property associated with the Transaction.
2.13 Seller shall pay any state, county and local transfer taxes that are
imposed upon the transfer of the real property of the Branches.
ARTICLE III
-----------
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The Purchaser hereby represents and warrants to the Seller the following:
3.01 Corporate Organization
- - ---------------------------
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
- - -----------------
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Neither the execution and delivery of this Agreement nor the consummation
of this sale will violate or conflict with: (1) the Charter, Certificate of
Incorporation or Articles of Association (whichever is applicable) 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, and the consummation of this
sale have been duly authorized by the 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 Disclosure
- - ---------------
The Purchaser is a financial institution which has a net worth of not less
than $10,000,000.00.
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
(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
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<PAGE>
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; and
(b) The Seller will use its best efforts to 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
Closing 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.
(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 Purchase, 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 Closing 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.
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.
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5.02 Requirements of Regulatory Authorities
- - -------------------------------------------
The Seller shall, as soon as is practicable, notify the proper regulatory
authorities of its intent to terminate operation of the Branches and to
consummate this Transaction and thereafter shall: (1) comply with the normal and
usual requirements imposed by such authority applicable to effectuate this
Transaction, and (2) use its good faith efforts to obtain any required approval
of such regulatory authority 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 soon as practicable, but not later than 30 days following the date of this
Agreement, an application, as required by law, 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
Parties agree to use their good faith best efforts to obtain such approval in a
diligent manner and on a priority basis, and the Purchaser 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 give such Bill of
Sale, acknowledgements and other instruments or 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 of the Seller
being sold hereunder, free and clear of all liens and encumbrances. The
Purchaser shall be responsible for the costs of examining title, surveys,
recording of documents, etc.
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 Retention of Employees
- - ---------------------------
The Purchaser agrees to offer employment to all employees of the Seller at
the Branches who are still employed as of the Effective Date, on terms, benefits
and conditions comparable to those provided by the Seller to such employees as
set forth on Exhibit F, to the extent such benefits are offered by Purchaser.
Each employee has the option of remaining in the employ of the Seller should a
position be available. The Seller will not renegotiate the position or
compensation of any
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Branches employee prior to the Effective Date, other than ordinary salary
increases. Employment by the Purchaser will commence on the Effective Date. The
Purchaser agrees to keep employed for a period of a least twelve months those
employees set forth on Schedule F, unless any such employee is discharged for
cause.
5.07 Press Releases
- - -------------------
Purchaser and Seller will cooperate and coordinate in the issuance of any
press releases regarding the branch transaction prior to the Effective Date.
5.08 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
Closing 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.
5.09 Allocation of Purchase Price
- - ---------------------------------
The purchase price paid and liabilities assumed by the Purchaser pursuant
to this Agreement shall be allocated in accordance with Section 1060 of the
Internal Revenue Code of 1986, as amended ("Code"). The Seller and the Purchaser
shall cooperate to comply with all substantive and procedural requirements of
Section 1060 of the Code and any regulations thereunder. Purchaser shall
indemnify and hold Seller harmless for any sales or use taxes due solely in
connection with the Transaction, except as provided at Section 1.5(o) herein.
ARTICLE VI
----------
CONDITION 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:
6.01 Representations and Warranties True: Obligations Performed
- - ----------------------------------------- ---------------------
(a) The representations and warranties made by the Seller in this
Agreement shall be true 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
18
<PAGE>
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 might materially and adversely
affect the business, properties and assets of the Branches; or (ii) against
either party which seeks to prohibit consummation of its transaction.
(e) The Seller shall have delivered to the Purchaser a certificate of its
President, dated the Effective Date, certifying to the fulfillment of all the
conditions contained at this Section 6.01.
(f) The Purchaser and the Seller shall have received from the
appropriate regulatory authorities approval: (1) to effect this
transaction, and (2) for the Purchaser to operate the Branches.
(g) The Purchaser shall have received an opinion of counsel or a
certification from the President for the Seller, date 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.
(h) From the date of this Agreement until the Closing 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 THE 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
19
<PAGE>
satisfaction, on or before the Effective Date, of the following
conditions:
7.01 Representations and Warranties True: Obligations Performed
- - ----------------------------------------- ---------------------
(a) The representations and warranties made by the Purchaser in this
Agreement shall be true 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) The Purchaser shall have delivered to the Seller a certificate of its
President, dated the Effective Date, certifying to the fulfillment of the
foregoing conditions.
(d) The Seller shall have received an opinion of counsel or a
certification from President for the Purchaser, date 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) 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.
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
- - -----------------------------------------
20
<PAGE>
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 the present
location shall have been obtained; and termination of branch operations
conducted by the Seller at the Branches location and the Seller's consummation
of this sale shall not have been objected to by the appropriate regulatory
authority.
8.02 Consents to Assignment of Leases
- - -------------------------------------
The landlord under any real estate lease to be assigned shall have
consented, to the Seller's assignment of such lease to the Purchaser on terms
substantially similar to the existing terms between the Seller and the Landlord.
8.03 Due Diligence/Environmental
- - --------------------------------
(a) Seller will make an application for a Letter of Nonapplicability 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, either
party may cancel this Agreement without further obligation to the other in which
event Purchaser shall receive a return of the Earnest Money plus accrued
interest.
(b) Except as expressly set forth herein, Purchaser hereby acknowledges
and agrees that: (i) Purchaser is purchasing the Assets in their existing
condition "AS IS, WHERE IS, AND WITH ALL FAULTS" with respect to any facts,
circumstances, conditions and defects, without any warranties, express or
implied; Seller is not bound by any oral statements purported to have been made
by any party; (ii) Seller has no obligation to repair or correct any such facts,
circumstances, conditions or defects or to compensate Purchaser for same; (iii)
Seller has specifically bargained for the assumption by Purchaser of all
responsibility to inspect and investigate the Assets and of all risk of adverse
conditions; and (iv) Purchaser has or will have prior to the Effective Date
undertaken all such physical inspections and examinations of the Assets as
Purchaser deems necessary or appropriate as to the conditions of the Assets.
Except as expressly set forth herein, Purchaser acknowledges that Seller has
made no representations or warranties and shall have no liability to Purchaser
(and Purchaser hereby waives any right to recourse against Seller) with respect
to the conditions of the soil, the existence or nonexistence of hazardous
substances, any past use of the Assets, the economic feasibility of the Assets,
or the Assets' compliance or noncompliance with all laws, rules or regulations
affecting the Assets.
(c) Purchaser may, at Purchaser's option, within thirty (30) days from the
date of this Agreement, undertake such physical inspections and examinations of
the Assets and the leased property, and the legal title thereto, including such
inspections of the buildings thereon, as Purchaser deems necessary or
appropriate. The cost of any such inspections and examinations shall be the sole
responsibility of Purchaser. The foregoing notwithstanding, the cost of a Phase
I
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Environmental Report on the Lindenwold and Merchantville Branches shall be
shared equally by Purchaser and Seller.
(i) If Purchaser shall discover a Material Defect, as defined
herein, as a result of Purchaser's inspections and examinations Purchaser
shall give Seller written notice within such thirty (30) day period
describing the facts or conditions constituting such Material Defect and
the measures which Purchaser reasonably believes are necessary to correct
such Material Defect. Seller shall promptly notify Purchaser whether
Seller elects to cure such Material Defect or terminate the Agreement with
respect to the Assets of such Branch, unless Purchaser elects to waive
such Material Defect. If Seller elects to cure, then Seller shall have
thirty (30) days from the date of the receipt of Purchaser's notice, or
such later time, which shall not be later than the Effective Date, as
shall be mutually agreeable to the parties which agreement shall not be
unreasonably withheld, in which to cure such Material Defect to
Purchaser's reasonable satisfaction and Seller's reasonable cure shall be
a condition to Purchaser's obligation to purchase the Assets with respect
to the Branches under this Agreement. "Material Defect" shall mean the
existence of (x) a Title Defect as defined in Section 2.02(a), except as
previously disclosed in writing to Purchaser by Seller, which materially
detracts from the value of the Assets, (y) any discharge, disposal,
release, threatened release or emission of any Hazardous Material in the
ground or the structure of the Branch or the existence of any underground
storage tank for which the Purchaser has been advised in writing by its
legal counsel that Purchaser could become responsible for the assessment,
removal or remediation of such discharge, disposal, release, threatened
release, emission, the existence of such tank or for other corrective
action, (z) with respect to the buildings, material deficiencies in the
plumbing, electrical, HVAC, roof, walls, or foundations.
(ii) With regard to the Clementon Branch, Purchaser and Seller
understand that conducting the inspections and affecting the cure of a
Material Defect, if any, may require the action or the consent of the
landlord. In the event that the landlord elects not to undertake such
action or give such consent relating to the cure of a Material Defect,
then Purchaser may terminate the Agreement with respect to the Assets of
such Branch.
(d) In the event Purchaser elects to properly terminate this Agreement as
to the Assets of less than all Branches for any reason permitted in this
Agreement, including (i) Seller's failure to cure any Material Defect after
notice of same from Purchaser, as set forth in Section 8.03(c)(i), or (ii)
landlord's election not to undertake the action or grant the consent necessary
to effect the cure of a Material Defect as set forth in Section 8.03(c)(ii),
then Seller shall have the option of either (w) proceeding with the transaction
with respect to the Branch or Branches acceptable to Purchaser or (x)
terminating this Agreement as to all Branches. In the event Purchaser and Seller
agree to proceed with the transaction with respect to less than all of the
Branches, it is understood and agreed that, with respect to any Branch with a
Material Defect whose Assets Purchaser has elected not to
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purchase, Purchaser shall, at Seller's option either (y) be relieved of all
obligation with respect to that Branch, in which event the Purchase Price shall
be reduced by the FFE Purchase Price, Real Estate Purchase Price (if applicable)
and a pro rata portion of the Premium Payment, attributable to that Branch. its
obligations, or (z) nonetheless assume the Deposit Liabilities as set forth in
Section 1.02(b) and retain the employees as set forth in Section 5.06, in which
event the Purchase Price shall be reduced by the FFE Purchase Price and, Real
Estate Purchase Price (if applicable), attributable to that Branch.
(e) 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.
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 Boards of Directors of the Purchaser
and the Seller, or
(b) Any time prior to the Effective Date, by Purchaser or Seller in
writing if the other shall have been in breach of any representation and
warranty in any material respect (as if such representation and warranty had
been made on and as of the date hereof and on the date of the notice of breach
referred to below), or in breach of any covenant, undertaking or obligation
contained herein, and such breach has not been cured by the earlier of 30
calendar days after the giving of notice to the breaching party of such breach,
or
(c) By Purchaser in writing if the conditions set forth in Article VII of
this Agreement shall not have been met by Seller or waived in writing by
Purchaser, or
23
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(d) By Seller or Purchaser in writing at any time after any applicable
regulatory authority has denied approval of any application for approval of the
transaction contemplated herein, or
(e) By the Board of Directors of the Seller or the Purchaser if the
Effective Date has not occurred on or before September 30, 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 of terminate. If this Agreement is
terminated as provided herein:
(a) Each party will redeliver 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.
9.03 Payment of Expenses and Retention of Deposit
- - -------------------------------------------------
If this Agreement is terminated by the Purchaser for any reason other than
the compliance with any of the conditions provided for in Articles VI or VIII of
this Agreement not having been met or waived in writing by the Purchaser, or
failure to satisfy the conditions of Sections 8.03 or 1.05 then the Seller shall
retain the deposit plus all accrued interest thereon.
ARTICLE X
---------
MISCELLANEOUS PROVISIONS
10.01 Entire Agreement; Amendment and Modification
- - --------------------------------------------------
This Agreement and the exhibits and schedules hereto shall constitute the
entire agreement of the Parties. The Parties hereto, by mutual consent of their
respective duly authorized officers, may amend, modify and supplement this
Agreement in such manner as may be agreed upon by them in writing.
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<PAGE>
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.
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 state 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 controls.
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 Deposit Account Servicing
- - -------------------------------
Purchaser shall, as of the Effective Date, have converted, by the close of
thee business day, all of the computerized deposit account information onto the
Purchaser's data processing system.
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10.10 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:
Oritani Savings Bank, SLA Alexander J. Tafro
Attn: Kevin J. Lynch Brach, Eichler, Rosenberg,
321 Main Street Silver, Bernstein, Hammer
Hackensack, NJ 07601 & Gladstone
101 Eisenhower Parkway
Roseland, NJ 07068
If to the Purchaser: With a copy to:
Sun National Bank Richard Fisch
Attn: Ronald A. Seagraves Malizia, Spidi, Sloane &
226 Landis Avenue Fisch, P.C.
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 *
26
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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: ORITANI SAVINGS BANK, SLA
February 25, 1997 BY: Kevin J. Lynch
- - ----------------------------------- ----------------------------------
President
ATTEST: SUN NATIONAL BANK
February 25, 1997 BY: Phillip E. Koebig, III
- - ----------------------------------- ----------------------------------
Executive Vice President
EXHIBIT 99.2
<PAGE>
[LOGO] SUN
Bancorp, Inc.
**** FOR IMMEDIATE RELEASE *** PAGE 1 OF 2
FOR MORE INFORMATION, CONTACT: Robert F. Mack (609) 691-7700
SUN BANCORP, INC. TO ACQUIRE DEPOSITS OF THREE ORITANI SAVINGS BRANCHES
Vineland, NJ..........................February 25, 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 Sun National Bank has signed a definitive
agreement to purchase the deposits of three branches from Oritani Savings Bank,
SLA, Hackensack, NJ. The branches are located in the Camden County communities
of Clementon, Lindenwold and Merchantville, New Jersey and have approximately
$33 million in deposits.
"We are very pleased for this opportunity to extend our presence in Camden
County," commented Brown. "With the purchase of these branches and our
previously announced purchase of four branches from First Union National Bank,
Sun will have twenty-five financial service centers serving southern New
Jersey," he added.
"Sun prides itself in being a community bank that responds to its customers'
needs," remarked Koebig, who also serves as President and Chief Executive
Officer of Sun National Bank. "This is an exciting opportunity to offer our new
customers a wide range of products and services, while also giving them the
personalized attention of a community bank."
- MORE -
P.O. Box 849 - 226 Landis Avenue - Vineland, New Jersey 08360 - (609) 691-7700
<PAGE>
[LOGO] SUN
Bancorp, Inc.
SUN BANCORP, INC. TO ACQUIRE DEPOSITS OF THREE ORITANI SAVINGS BRANCHES
Page 2 of 2 February 25, 1997
Koebig also remarked that this will be the sixth in a series of purchases during
the past two-and-one- half years that have continued to fulfill Sun's strategic
growth goals. During that period of time, the total assets of Sun will have
grown from $113 million in 1994 to total assets in excess of $540 million
following the completion of the transaction.
The branch purchase is subject to regulatory approval and is expected to close
during the third quarter of 1997. Once the transaction has been completed, all
branch employees will be retained by Sun National Bank.
Sun National Bank currently 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.
In December 1996, Sun announced that it had signed a definitive agreement to
purchase four branches of First Union National Bank that had total deposits of
approximately $75 million. The First Union transaction is expected to be
completed during the second quarter of 1997.
Sun Bancorp, Inc. is listed on the Nasdaq Small Cap Market under the symbol
SNBC. Sun's market makers are Wheat First Butcher Singer; M.A. Schapiro & Co.,
Inc. and Janney Montgomery Scott.
###
