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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 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): September 24, 1999
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Sandy Spring Bancorp, Inc.
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(Exact name of registrant as specified in its charter)
Maryland 0-19065 52-1532952
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(State or other jurisdiction (Commission file (IRS Employer
of incorporation) number) Identification Number)
17801 Georgia Avenue, Olney, Maryland 20832
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (301) 774-6400
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Item 2. Acquisition or Disposition of Assets.
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On September 24, 1999, Sandy Spring National Bank of Maryland (the "Bank"), a
subsidiary of Sandy Spring Bancorp, Inc. ("Bancorp") acquired certain banking
operations of seven branch offices of Mellon Bank (MD) National Association
("Mellon"), pursuant to a purchase and assumption agreement between the Bank and
Mellon dated as of July 21, 1999, and following receipt of regulatory approvals.
Six of the branches are located in Montgomery and Anne Arundel counties,
Maryland, and one is located in Northern Virginia. The branches are now operated
as branches of the Bank. Mellon is a subsidiary of Mellon Bank Corporation.
In the acquisition, the Bank assumed approximately $225 million in deposits
and acquired approximately $33 million of consumer and commercial loans and
approximately $1.4 million in fixed assets. The Bank also received cash in the
transaction. The terms of the acquisition were determined based upon arms length
negotiations between the parties. Mellon retained certain assets, deposits, and
operations formerly associated with the branches acquired by the Bank.
Item 7. Financial Statements and Exhibits.
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(a) Exhibit 2 - Purchase and Assumption Agreement between Mellon Bank (MD)
National Association and Sandy Spring national Bank of Maryland dated as of
July 21, 1999
The Registrant agrees to furnish supplementally a copy of omitted exhibits
and schedules to Exhibit 2 to the Commission upon its request.
(b) Exhibit 99.1 - Press Release dated September 27, 1999
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 hereunto duly authorized.
SANDY SPRING BANCORP, INC.
By: /s/ James H. Langmead
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James H. Langmead
Vice President and
Treasurer
Dated: September 29, 1999
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Exhibit 2
PURCHASE AND ASSUMPTION AGREEMENT
between
MELLON BANK (MD) NATIONAL ASSOCIATION
as Seller
and
SANDY SPRING NATIONAL BANK OF MARYLAND
as Purchaser
as of
July 21, 1999
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TABLE OF CONTENTS
ARTICLE I - PURCHASE OF ASSETS AND ASSUMPTION OF
LIABILITIES 1
1.1 Effective Date 1
1.2 Transfer and Consideration 1
1.3 Preliminary Settlement and Adjustment to Cash Premium 3
1.4 Loans Transferred 3
1.5 Additional Obligations of the Seller 4
1.6 Additional Obligations of the Purchaser 5
1.7 Customer Notifications 5
1.8 Certain Transitional Matters 6
1.9 Indemnification 7
1.10 Pro-Rata Adjustment of Expenses 7
1.11 Fixed Assets 7
ARTICLE II - REPRESENTATIONS AND WARRANTIES OF THE SELLER 8
2.1 Corporate Organization 8
2.2 No Violation 8
2.3 Corporate Authority and Validity 8
2.4 Loans 8
2.5 Title to Property; Encumbrances 9
2.6 Deposit Liability Records 9
2.7 Non-solicitation of Business 10
2.8 Limitation of Warranties 10
2.9 Broker's Commissions; Finder's Fees 10
2.10 Certain Regulatory Matters 10
2.11 Delivery of Employment Information 10
ARTICLE III - REPRESENTATIONS AND WARRANTIES OF PURCHASER11
3.1 Corporate Organization 11
3.2 No Violation 11
3.3 Corporate Authority and Validity 11
3.4 Certain Regulatory Matters
ARTICLE IV - CONDUCT OF BUSINESS PENDING THE EFFECTIVE DATE 11
4.1 Activity in the Ordinary Course 11
ARTICLE V - OBLIGATION OF PARTIES PRIOR TO AND AFTER THE
EFFECTIVE DATE 12
5.1 Full Access 12
5.2 Requirements to Obtain Approval of Regulatory Authorities 12
5.3 Further Assurance 13
5.4 Right to Intervene 13
5.5 Damages for Voluntary Non-Consummation 13
5.6 Consents and Assignments, Lease Renewal 13
5.7 Test Tapes; Conversion 13
5.8 Sign 13
5.9 Condition of Premises 13
5.10 Termination of Service Agreements 14
5.11 Purchaser's Inspection of Premises 14
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ARTICLE VI - CONDITIONS TO PURCHASER'S OBLIGATIONS 14
6.1 Representations and Warranties True 14
6.2 Obligations Performed 14
6.3 No Adverse Litigation 14
6.4 Regulatory Approval 14
6.5 Availability of Premises for Intended Use 14
6.6 Material Adverse Change 15
6.7 Certificate of Compliance 15
ARTICLE VII - CONDITIONS TO THE SELLER'S OBLIGATIONS 15
7.1 Representations and Warranties True 15
7.2 Obligations Performed 15
7.3 No Adverse Litigation 15
7.4 Regulatory Approval 15
7.5 Certificate of Compliance 15
ARTICLE VIII - TERMINATION 15
8.1 Methods of Termination 15
8.2 Procedure upon Termination 16
ARTICLE IX - MISCELLANEOUS PROVISIONS 16
9.1 Amendment and Modification 16
9.2 Waiver of Extension 16
9.3 Assignment; No Rights or Remedies to Others 16
9.4 Survival of Representations and Warranties 16
9.5 Payment of Expenses; Taxes 17
9.6 Addresses for Notice, etc 17
9.7 Press Releases, Public Disclosure 17
9.8 Counterparts 17
9.9 Headings 17
9.10 Governing Law 18
SIGNATURE PAGE 18
EXHIBIT A - Leasehold Estates
EXHIBIT B - Furniture, Fixtures and Equipment to be
Excluded from the Sale
EXHIBIT C - Leasehold Improvements, Furniture, Fixtures, and
Equipment Transferred
EXHIBIT C-1 Leasehold Improvements, Furniture, Fixtures, and
Equipment Transferred
EXHIBIT D - Deposit Liabilities Assumed
EXHIBIT D-1 - Deposit Liabilities Assumed
EXHIBIT E - Loans Purchased
EXHIBIT E-1 Loans Purchased
EXHIBIT F - Instrument of Assumption of Certain Liabilities
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EXHIBIT G - Sample Settlement Worksheets
EXHIBIT G - 1 Allocation of Purchase Price
EXHIBIT H - Assignment of Loans
EXHIBIT I - Deconversion Servicing Agreement
iii
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THIS PURCHASE AND ASSUMPTION AGREEMENT made as of this 21st day of July 1999,
between MELLON BANK (MD) National Association, a national bank organized and
existing under the laws of the United States of America and having its principal
office in Rockville, Maryland, (the "Seller"), and SANDY SPRING NATIONAL BANK OF
MARYLAND, a national bank organized and existing under the laws of the United
States of America and having its principal office in Olney, Maryland, (the
"Purchaser").
WHEREAS, the Seller desires to sell certain assets and transfer certain deposits
and other liabilities of seven of its branch offices located in various
locations throughout Maryland and Virginia, (the "Branches") to Purchaser; and
WHEREAS, the Purchaser desires to buy such assets and assume such liabilities of
the Branches upon the terms and conditions hereinafter set forth;
NOW, THEREFORE, IN CONSIDERATION of the premises and the mutual covenants and
agreements contained herein, and for other good and valuable consideration the
receipt and sufficiency of which is hereby acknowledged, the parties hereto,
intending legally to be bound, agree and covenant as follows:
ARTICLE I
PURCHASE OF ASSETS AND ASSUMPTION OF LIABILITIES
1.1 Effective Date.
Except as otherwise provided herein, the closing date for the purchase and
assumption herein described (hereinafter termed the "Effective Date") shall be
on a date mutually agreed to by the parties hereto, which shall be following the
receipt of all regulatory approvals required by law and this Agreement, the
expiration of all applicable waiting periods, and after all other conditions
required to be satisfied prior to the Effective Date by Articles VI and VII of
this Agreement have been waived or fulfilled, provided that the parties hereto
shall use their best efforts to cause the Effective Date to occur on or before
September 24, 1999. The effective time of the transaction contemplated herein
shall be 11:59 p.m. on the Effective Date (the "Cut-Off Time"). The closing may
be conducted in person, by mail, or telefax, or a combination thereof on the
Effective Date.
1.2 Transfer and Consideration.
(a) The Seller agrees, subject to the terms and conditions of this
agreement, to validly sell, assign, transfer, convey and deliver to the
Purchaser, on the Effective Date:
(i) all right, title and interest in and to the Loans, as defined
in Section 1.2(b) and accrued interest receivable thereon;
(ii) all right, title and interest in and to the Deposit
Liabilities, as defined in Section 1.2(b);
(iii) all right, title and interest in and to the Seller's
leasehold estates in the real estate briefly described in
Exhibit A (to the extent of the lessee's interest and subject
to lessors' consents) on which the Branches are situated by
assignments of leases and landlord consents, to be
substantially in the form shown in Exhibit A attached to and
made a part hereof, together with all improvements thereon,
except as otherwise shown in Exhibit A;
(iv) all right, title and interest in and to the furniture,
fixtures and equipment relating to the Branches owned by the
Seller, all of which is itemized on Exhibit C attached hereto
and made a part hereof, provided further that the furniture
fixtures and equipment being transferred shall not include
those items listed on Exhibit B attached hereto and made a
part hereof; and
(v) all right, title and interest in and to the safe deposit box
business conducted at the Branches.
(b) The Purchaser agrees that on the Effective Date, subject to the terms
and conditions of this Agreement and as consideration for the aforesaid
sale, assignment, transfer, conveyance and delivery:
(i) it will pay to the Seller a cash premium (the "Deposit Premium")
of eight and seventy hundredths percent (8.70%) of the deposit
liabilities assumed by Purchaser pursuant to paragraph (b)(iv) of this
Section 1.2 (the "Deposits"), excluding accrued interest payable
thereon. For purposes of this Agreement, "Deposit Liabilities" shall
mean all deposits of Seller shown on the books and records of the
Branches, including accrued but unpaid interest and both collected and
uncollected funds (but excluding overdrawn accounts which are
identified in the post-Effective Date settlement process set forth in
Section 1.3 herein) and balances in other accounts linked to accounts
containing deposit liabilities under sweep or similar arrangements,
together with Seller's rights and responsibilities under any related
customer agreement, but excluding: (1) deposits subject to legal
process, (2) deposits which have been reported as abandoned property
under the abandoned property law of any jurisdiction, (3) deposits held
in accounts for which Seller acts as fiduciary (other than deposits
held in an Individual Retirement Account or Keogh Account), (4)
deposits held in any Individual Retirement Account or Keogh
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Account that the Purchaser is prohibited from assuming under
applicable law or where the account holder has notified Seller or
Purchaser of his, her or its objection to Purchaser acting as custodian
or trustee of such Individual Retirement Account or Keogh Account, (5)
deposits owned by Seller or any of its subsidiaries or affiliates, (6)
deposits constituting official checks, travelers checks, money orders
or certified checks of Seller, (7) accounts designated as closed on the
books and records of Seller, (8) deposits pledged as collateral for
loans not being purchased by Purchaser, (9) any deposits that are
affiliated with Seller's Private Banking or Business Banking sections
that are not set forth in Exhibit D (as such exhibit is hereinafter
described and as it may be superseded by an exhibit of a later date),
and (10) any accounts that are business or commercial purpose
(including Seller's Middle Market section) deposits that are not set
forth in Exhibit D (as superseded by an exhibit of a later date).
Exhibit D attached to this Agreement sets forth the Deposit Liabilities
as of a date prior to the date hereof acceptable to the parties
(including account types, identifying numbers, account balances,
applicable interest rates, maturity dates, if any and other customary
information, and on any amended Exhibit D, account names). In
accordance with the provisions of Section 1.3, Exhibit D shall be
amended and superceded by Exhibit D-1 which shall reflect the Deposit
Liabilities as of the Cut-Off Time in connection with the adjusted
settlement statement. Seller reasonably believes that Exhibit D
accurately reflects the Deposit Liabilities as of the date of this
Agreement. The parties recognize that the balances of the accounts
listed in Exhibits D may fluctuate or change in the ordinary course of
business, or that the accounts comprising Exhibits D may be adjusted by
the Seller to correct any good faith errors in identification of the
Deposit Liabilities that should properly be listed in said Exhibit D
according to the terms of this Agreement. Notwithstanding the
foregoing, without the prior consent of Purchaser, Seller shall not
adjust Exhibits D to remove accounts or balances in existence on the
date of Exhibit D from the Deposit Liabilities if such account or
balances were not, as of the date hereof, treated by Seller as part of
an excluded category of deposit.
(ii) for the transfer of loans hereunder, it will pay to the Seller the
amount set forth in Section 1.4(c), which shall include a cash premium
("Loan Premium") of Eight and Ninety-seven hundredths percent (8.97%)
of the outstanding principal balances of the loans (excluding accrued
interest receivable thereon), being acquired by the Purchaser pursuant
to paragraphs (a)(i) and (b)(v) of this Section 1.2 (the "Loans"). For
purposes of this Agreement, "Loans" shall mean, except as further
qualified in Section 2.4(b) below, all consumer and business loans of
the Seller shown in the books and records of the Branches, including on
the open-end loans the accrued but unbilled interest, but shall not
include: (1) any loans made to Seller's Private Banking customers that
are not set forth in Exhibit E (as such exhibit is hereinafter
described and as it may be superseded by an exhibit of a later date),
(2) any business or commercial loans that are not set forth in Exhibit
E (as superseded by an exhibit of a later date), (3) loans excluded by
Purchaser as a result of Purchaser's due diligence and identified on a
schedule delivered by Purchaser to Seller prior to the date of this
Agreement, (4) loans made after the date of Exhibit E attached as of
the date hereof which are excluded by Purchaser as a result of
Purchaser's due diligence on such loans based solely on Purchaser's
customary underwriting standards, which such excluded loans shall be
identified on a schedule delivered to Seller not later than five (5)
days after the Effective Date, (5) loans insured by the FHA, or (6)
loans as to which Seller is unable to provide the representations and
warranties set forth in Section 2.4 of this Agreement. Exhibit E
attached to this Agreement sets forth the Loans as of a date prior to
the date hereof acceptable to the parties (including account types,
identifying numbers, loan balances, applicable interest rates, maturity
dates, security, unfunded commitments with respect to such balances,
and other customary information, and on any amended Exhibit E, account
names). In accordance with the provisions of Section 1.3, Exhibit E
shall be amended and superseded by Exhibit E-1 which shall reflect the
Loans as of the Cut-Off Time in connection with the adjusted settlement
statement. Seller reasonably believes that Exhibit E accurately
reflects the Loans as of the date of this Agreement. The parties
recognize that the balances of the Loans shown in Exhibit E may
fluctuate or change in the ordinary course of business, or that the
Loans comprising Exhibit E may be adjusted by the Seller to correct any
good faith errors in identification of the Loans that should properly
be listed in said Exhibit E, according to the terms of this Agreement.
Notwithstanding the foregoing, without the prior consent of Purchaser,
Seller shall not adjust Exhibits E to remove loan accounts or balances
in existence on the date of Exhibit E from the Loans if such account or
balances were not, as of the date hereof, treated by Seller as part of
an excluded category of loan.
(iii) it will pay to the Seller the value stipulated in Exhibit C hereto
(as such exhibit may be amended and superceded) for the leasehold
improvements, furniture, fixtures and equipment owned by the
Seller; it being understood that Purchaser will pay Seller the book
value (which shall mean, for purposes of this Agreement, cost less
accumulated depreciation or amortization in accordance with
generally accepted accounting principles) of all such property as
shown on the books of the Seller, which will not include the book
value of the items which will be retained by Seller that are listed
in Exhibit B.
(iv) it will assume and thereafter fully and timely perform and
discharge in accordance with their terms all Deposit Liabilities
identified on Exhibit D (as superseded by an exhibit of a later
date) attached hereto and
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made a part hereof.
(v) it will assume and thereafter fully and timely perform and
discharge in accordance with their terms, and applicable law, all
duties and obligations of the Seller as creditor under the Loans
(and the agreements governing such) identified in Exhibit E (as
superseded by an exhibit of a later date) attached hereto and made
a part hereof; and
(vi) it will assume and thereafter fully and timely perform and
discharge, in accordance with their terms, all liabilities and
obligations of Seller under the leases transferred and assigned to
the Purchaser under this Agreement.
(c) The liabilities assumed by the Purchaser hereunder shall not include any
liability of Seller of any kind or description not expressly set forth
herein.
1.3 Preliminary Settlement and Adjustment to Cash Premium.
Two business days before the Effective Date, Seller shall deliver a preliminary
settlement statement accumulated through the close of business at the Branches
on a date not more than five (5) business days prior to the Effective Date (the
"Pre-settlement Date"), except as otherwise mutually agreed to by the parties,
in the form of Exhibit G, which shall be certified by an authorized officer of
Seller. Such preliminary statement shall be based upon the fixed assets as of
the most recent month-end preceding the Pre-settlement Date and the Deposit
Liabilities and Loans as of the Pre-settlement date, except as otherwise
mutually agreed to by the parties. Such preliminary settlement statement shall
be the basis of the preliminary payment made to Purchaser on the Effective Date.
Based on the preliminary settlement sheet data, which shall include calculations
of the Deposit Premium and the Loan Premium, the amount due the Purchaser and
the amount due the Seller shall be netted and Seller will transfer to Purchaser,
in a manner as hereinafter described, the netted difference on or prior to the
Effective Date. Within ten (10) days after the Effective Date, Seller shall
deliver Exhibits C-1, D-1 and E-1 as of the Effective Date, which shall amend
and supersede Exhibits C, D and E for purposes of the adjusting and final
settlement statement. The parties shall use their best efforts to agree upon
Exhibits C-1, D-1 and E-1, as of the Effective Date. At the same time, the
parties shall agree upon and jointly prepare and attach to this Agreement as of
the Effective Date an Allocation of Purchase Price on Exhibit G-1 reflecting the
allocation of the Purchase Price as negotiated by the parties. Within 60 days
of the Effective Date, the Seller shall prepare an IRS Form 8594 reflecting the
allocation of the Purchase Price in accordance with Allocation of Purchase Price
on Exhibit G-1 and shall submit such Form 8594 to Purchaser for review.
Purchaser shall inform Seller in writing, of any disagreement with the amounts
allocated on Form 8594 within 15 days after receipt. The amounts shown on Form
8594 shall become final should Purchaser fail to inform Seller of any
disagreement within 15 days. The parties agree to use the allocations on
Exhibit G-1 and IRS Form 8594 for all tax purposes, including the preparation of
federal and state income tax returns. For purposes of the preparation of IRS
Form 8594, the name, address and taxpayer identification number of the parties
will be as listed in Section 9.6 of this Agreement. Not later than two business
days after delivery of the Exhibits C-1, D-1 and E-1 as of the Effective Date,
Seller shall pay to Purchaser (or Purchaser to Seller as the case may be) an
adjusting settlement payment based on such exhibits together with accrued
interest calculated at the Fed. Funds Rate for the number of days lapsed
between the Effective Date and the date of such adjusting settlement payment.
For purposes of this Agreement, Fed. Funds Rate shall mean the closing Federal
Funds Rate as published in the Wall Street Journal on the day of each payment
hereunder. Subject to the provisions of paragraph (c) of Section 1.8 hereof, an
appropriate adjustment to the Deposit Premium shall be made in the event that an
error in calculating deposits listed in Exhibit D-1 as of the Effective Date is
discovered by the Purchaser within sixty (60) days of the Effective Date.
Likewise, subject to the provisions of paragraph (e) of Section 1.4 hereof, an
appropriate adjustment (including, without limitation, an appropriate adjustment
to the Loan Premium) shall be made in the event that an error in identifying the
proper Loans to be sold listed in Exhibit E-1 as of the Effective Date is
discovered by the Purchaser within sixty (60) days of the Effective Date. All
amounts due or adjustments to the Deposit Premium or the Loan Premium (after
notice and the amount of the adjustment has been given) shall be made within two
(2) business days by timely wire transfer, or crediting or debiting (as the case
may be) to an account of Purchaser or Seller, as appropriate.
1.4 Loans Transferred.
(a) Seller will transfer to Purchaser on the Effective Date, subject to the
terms and conditions of this Agreement, all of Seller's right, title and
interest in the Loans listed in Exhibit E (superseded and replaced by an
exhibit of a later date as set forth in Section 1.3), free and clear of all
liabilities, obligations, liens, claims, charges, security interests and
encumbrances, and Purchaser shall purchase, acquire and accept, subject to
the terms of this Agreement, all of Seller's right, title and interest in
the Loans, together with all liens and security interests securing such
Loans.
(b) In connection with the transfer of any Loans requiring notice to the
borrower, Purchaser and Seller agree to comply with all notice and reporting
requirements of the loan documents or of any law or regulation.
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(c) As consideration for the sale and transfer of Loans hereunder, the
Purchaser shall pay to the Seller on the Effective Date an amount equal to
the outstanding, principal balances of the Loans, including accrued interest
(and accrued, but unbilled on open-end accounts) all as of the Effective
Date, plus the Loan Premium set forth above, in Section 1.2(b)(ii).
(d) All Loans will be transferred without recourse and without any
warranties or representations as to their collectibility or the
creditworthiness of any of the obligors of such Loans.
(e) For a period of sixty (60) days after the Effective Date, Seller will
forward to Purchaser loan payments received by Seller that relate to any of
the Loans. Purchaser shall reimburse Seller upon demand for checks returned
on payments forwarded to Purchaser; however, to the extent possible, Seller
will deduct the amount of such returned checks from payments received and
shall settle with Purchaser via a "due to" account described in Appendix II
to Exhibit I hereto.
(f) On and after the Effective Date, Seller and Purchaser each will be
responsible for maintaining and safeguarding all Loan files, documents and
records in their possession related to the Loans in accordance with
applicable law and sound banking practices and neither will destroy any such
records without thirty (30) days written notice to the other, except that
neither party shall destroy any such records during the ninety (90) day
period immediately following the Effective Date.
(g) If the balance due on any Loan purchased pursuant to this Section 1.4
has been reduced by Seller as a result of a payment by check received on or
prior to the Effective Date, which item is returned after the Effective
Date, the asset value represented by the Loan transferred shall be
correspondingly increased and an amount in cash equal to such increase, plus
the applicable Loan Premium, shall be paid by Purchaser to Seller promptly
upon demand.
(h) As of the Effective Date, and by virtue of this purchase of the Loans,
Purchaser shall succeed to all of Seller's right, title and interest in and
to the outstanding principal balance of the Loans, all unpaid interest and
fees, and all payments or other benefits due to be applied to said Loans,
all in accordance with the terms and conditions thereof. As part of its
sale of the Loans, at the Effective Date Seller will transfer, assign and
convey to Purchaser all its right, title and interest in, to, and under (i)
any promissory notes, loan agreements, security agreements, pledge
agreements, guaranty agreements, endorsements, financing statements,
disclosures, insurance certificates (to the extent available; for credit,
death and disability) or other written agreements or documentation securing
or relating to any of the Loans (the "Loan Contracts"), and (ii) the
collateral held as security for any Loans which are secured (including,
without limitation, deposits securing any of the Loans). At the Effective
Date, Purchaser will assume Seller's obligations under and become obligated
to discharge Seller's duties and obligations with respect to all Loans, Loan
Contracts, and such collateral security. On the Effective Date, Seller
shall deliver to Purchaser the Loan Contracts and such collateral. Within
thirty (30) days following the Effective Date, Seller shall deliver to
Purchaser the back-up documentation (to the extent available) which consists
of customer applications, credit bureau reports, income/employment
verifications, loan approvals, and the like, as required for specific Loans,
and miscellaneous correspondence.
(i) As of the Effective Date, Purchaser shall become responsible to
administer, manage, maintain, service, and collect the Loans in accordance
with terms of the Loan Contracts and with all applicable laws.
1.5 Additional Obligations of the Seller.
(a) On the Effective Date, the Seller shall:
(i) deliver to the Purchaser at the respective Branches such of
the assets purchased and specified in Exhibit C (as such
exhibit may be superseded by an exhibit of a later date) (and
excluding the items identified in Exhibit B) as shall be
capable of physical delivery, including, without limitation,
the furniture, fixtures and equipment purchased hereunder and
all assets comprising the safe deposit box business at the
Branches;
(ii) execute, acknowledge and deliver to the Purchaser all such
endorsements, assignments, bills of sale, and other
instruments of conveyance, assignment and transfer in such
form as shall be reasonably satisfactory to the Purchaser to
consummate the sale and transfer of the assets purchased to
the Purchaser;
(iii) update Exhibit D to accurately reflect the Deposit
Liabilities and accrued interest thereon as of the close of
business on the business day established for the preliminary
settlement statement and make available to Purchaser the
netted funds as described in Section 1.3;
(iv) assign, transfer and deliver to the Purchaser the following
records pertaining to the Deposit Liabilities to be assumed
by the Purchaser as exist and are available in whatever form
or medium is maintained by the Seller: signature cards,
orders and contracts between the Seller and the Branches'
depositors, and records of similar character;
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(b) From and after the Effective Date the Seller agrees that it will
preserve and safely keep, for as long as may be required by applicable law,
all of the historical books and records of account pertaining to the Deposit
Liabilities and Loans assumed by the Purchaser and not otherwise transferred
to the Purchaser on the Effective Date for the joint benefit of itself and
the Purchaser, and that it will permit the Purchaser or its representatives,
at any reasonable time and at the Purchaser's expense, to inspect, make
extracts from or copies of, any such books and records as the Purchaser
shall reasonably deem necessary; provided, however, nothing herein shall
require the Seller to breach any obligation of confidentiality of any
depositor or loan customer.
1.6 Additional Obligations of the Purchaser.
(a) To evidence the assumption by the Purchaser of the liabilities and
obligations of the Seller assumed pursuant to this Agreement, the Purchaser
shall execute, acknowledge and deliver to the Seller, on the Effective Date,
instruments of assumption in the form attached hereto as Exhibits F and H;
and
(b) Purchaser shall offer employment beginning immediately after the
Effective Date to all employees of the Seller working at the Branches on the
date thereof, including regular part-time employees, at base wages at least
equal to their current base wages or salaries (excluding bonuses and similar
payments) for six (6) months after the Effective Date. Purchaser shall grant
to all employees accepting employment credit for all their respective
service with Seller for the purposes of determining their participation,
eligibility, waiting periods, and vesting rights, but not for purposes of
benefit accrual, in any and all thrift, medical, life insurance, disability,
pension plans and other employee benefits plans or programs currently
maintained by Purchaser. Purchaser reserves the right to exclude past
service in the calculation of profit sharing contributions or similar
benefits. Purchaser shall provide coverage for pre-existing medical
conditions to the extent that such condition is currently covered under
Seller's plan, provided that such conditions would be covered under
Purchaser's plan if it were not pre-existing. In such an event of differing
coverages such person shall be covered by Seller's COBRA plan at the
employee's expense. For a period of six (6) months after the Effective Date,
the Purchaser will not terminate or reduce the level of base salaries or
wages for any of such employees who accept Purchaser's offer of employment;
provided, however, any such employee may be terminated or disciplined for
cause as set forth in Purchaser's employee policies. Purchaser is not
required hereby to maintain the titles, duties, or work location of any
employee. Except as prohibited by law, within five (5) business days of the
date of execution of this Agreement, Seller shall provide Purchaser with (i)
a list of employees working at the Branches along with such employees'
salaries, job descriptions, work site or sites, and date of hire, and (ii)
complete copies of any and all employment agreements, severance agreements,
change in control agreements, or similar agreements (or policies enforceable
by an employee against Seller) to which any such employee is or a party or
is subject. Seller shall attempt to obtain any written authorizations from
such employees necessary for Seller to lawfully provide such information.
Notwithstanding anything herein to the contrary, Purchaser shall not be
obligated to offer employment to (or if offered, to continue the employment
or maintain the base salary or wages of) any employee who is not included on
such list or any employee who is a party to or the subject of any such
agreement or policy. Seller shall not increase or commit to increase the
salaries or wages of any employee of the Branch prior to the Effective Date
except for customary increases consistent with past practice. The provisions
of this section are not intended to create any third party beneficiaries,
shall not be enforceable by any party other than Seller or Purchaser, and,
without limitation, are not enforceable by any employee of Seller or
Purchaser.
1.7 Customer Notifications.
Purchaser will develop appropriate notices to customers of the Branches, which
notices will include the Effective Date, appropriate details of the assumption
and purchase, any changes to the customer's deposit or loan accounts which will
occur as of the Effective Date, and other appropriate information about the
Branches and the Purchaser (which is hereinafter called the "Purchaser's
Customer Notice"). Purchaser will submit the Purchaser's Customer Notice to the
Seller for approval, which approval shall not be unreasonably withheld or
delayed, no later than twenty (20) days after the date of this Agreement.
Seller covenants and agrees to use its best efforts to provide the Purchaser
with copies of all of Seller's relevant standard forms of agreements, loan
documents, and other material necessary for Purchaser to determine the form of
such notice and the period for which such notice must be given within five (5)
business days after the date of this Agreement. Following receipt of
regulatory approval of the transactions contemplated hereunder or such earlier
date as the parties may agree, the Purchaser will send the Purchaser's Customer
Notice to the customers of the Branches by first class mail at its own expense.
Within twenty (20) days of the date of this Agreement, Seller will provide a
proposed form of notice to customers of the Branches to Purchaser for its review
and suggestions. Seller agrees to consider all of Purchaser's reasonable
suggestions. After the form has been finalized, at the discretion of the
Seller, the Seller will send this notice to the customers of the Branches by
first class mail at Seller's own expense. Seller and Purchaser will coordinate
the distribution of these notices so as to minimize disruption of the Branches
and confusion of the Branches' customer base. In order to reduce the continuing
charges to the Seller through the check clearing
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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, and without charge to
such depositors, to furnish each depositor of an assumed account with checks (or
deposit and withdrawal slips, as appropriate) for demand deposit accounts and
personal lines of credit accounts on the forms of the Purchaser with
instructions to utilize the Purchaser's checks and to destroy unused checks of
the Seller. Such checks (or deposit and withdrawal slips) shall be furnished to
depositors of the Branches prior to the Effective Date, but in no event more
than five (5) business days prior to the Effective Date.
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1.8 Certain Transitional Matters.
Following the Effective Date:
(a) The Purchaser agrees to pay in accordance with law and customary
banking practices all properly drawn and presented checks, drafts and
withdrawal orders presented to the Purchaser by mail, over the counter or
through the check clearing, system of the banking industry, by depositors of
the deposit accounts assumed, whether drawn on the checks, drafts or
withdrawal order forms provided by the Seller or by the Purchaser, and in
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 paragraph to honor checks, drafts and
withdrawal orders on forms provided by the Seller and carrying, its imprint
(including name and transit routing number) shall not apply to any such
check, draft or withdrawal order presented to Purchaser more than sixty (60)
days following the Effective Date.
(b) Purchaser shall honor all stop payment orders on demand deposit
accounts and personal lines of credit initiated prior to the Effective Date
and reflected in the stop payment documents delivered to Purchaser on the
Effective Date or thereafter. If following receipt of appropriate stop order
documentation, Purchaser makes any payment in violation of any such order,
Purchaser shall be solely liable for any such payment and shall indemnify,
hold harmless and defend Seller from and against all claims, liabilities,
losses, fines or other expenses, including reasonable attorneys' fees and
expenses, arising out of any such payment. In the event that Purchaser shall
make any payment in violation of a stop payment order initiated prior to the
Effective Date but not reflected in stop payment documents delivered to
Purchaser prior to such payment, Seller shall indemnify, hold harmless and
defend Purchaser from and against all claims, losses and liabilities,
including, reasonable attorneys' fees and expenses, arising out of any such
payment.
(c) Seller will promptly remit to Purchaser all amounts intended as
Deposits and all other amounts properly payable to Purchaser rather than
Seller as a result of the transactions contemplated hereby which may be
received by Seller after the Effective Date.
(d) Upon request after the Effective Date either to Seller or Purchaser
from any state or the Federal government to reclaim funds relating to forged
social security checks, unemployment checks or welfare checks credited by
Seller or cashed by Seller on or prior to the Effective Date to a Deposit
transferred to and assumed by Purchaser pursuant to this Agreement,
Purchaser hereby agrees to honor such request and to pay to such
governmental entity the amount requested as of the date of such request.
Seller shall remain liable for remitting any deficiency to such Governmental
entity and shall reimburse Purchaser promptly in the amount paid by
Purchaser pursuant to the preceding sentence.
(e) If, within sixty (60) days following the Effective Date, any of the
depositors of the accounts assumed, 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. If
any of such depositors draws a check, draft or withdrawal order against the
Deposit Liabilities, including accrued interest, assumed from the Seller
hereunder which is presented or charged to the Seller within sixty (60) days
after the Effective Date, the Seller may pay the same and the Purchaser
agrees to reimburse the Seller for any such payments or charges, provided
there are sufficient funds in the depositor's account. The Seller shall not
be deemed to have made any representation or warranty to the Purchaser with
respect to any such checks, drafts or withdrawal orders of depositors whose
accounts have been assumed by the Purchaser, and any such representations or
warranties implied by law are hereby disclaimed. The Purchaser will settle
with the Seller any such checks, drafts or orders of withdrawal presented by
Seller to Purchaser for reimbursement, provided there are sufficient funds
in the depositor's account, no later than the start of the second business
day after presentment.
(f) The Purchaser will pay to the Seller within two business days after
presentment an amount equivalent to the amount of any checks, drafts or
withdrawal orders credited to an account which has been assumed by the
Purchaser which are returned to the Seller after the Effective Date.
(g) Manifest errors in calculation or data entry relating to any amount
supplied hereunder may be corrected by notice to the other party within
sixty (60) days after the Effective Date. Each party hereunder agrees to
take any action, including the payment of money or the amendment of any
records, necessary to reflect such correction within five (5) business days
after receiving such notice from the other party.
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(h) Exhibit I, attached hereto, sets forth specifics on Seller's and
Purchaser's deconversion tasks and post Effective Date data processing.
1.9 Indemnification.
(a) The Seller shall indemnify the Purchaser and hold it harmless from and
against any losses, liabilities, damages or expenses (collectively,
"Losses") that the Purchaser may sustain or become subject to as a result of
(i) any breach of any representation, warranty or agreement of Seller
contained in this Agreement, (ii) any claim, legal action or administrative
proceeding, based on any conduct of Seller or resulting from or arising in
connection with the operation of the Branches prior to or on the Effective
Date or ownership by Seller of the Branches or any of the assets transferred
hereunder, or (iii) the assertion against Purchaser of any liability or
obligation with respect to Taxes (as defined below) or information reporting
requirements of any taxing, authority attributable to the assets or
operations of the Branches prior to the Effective Date or that Seller is
obligated to pay hereunder; provided, however, Seller shall have no
obligation to indemnify Purchaser against any Losses for which a claim for
indemnification has not been made by Purchaser prior to one year after the
Effective Date with respect to clause (i) above, prior to two years after
the Effective Date with respect to clause (ii) above, and prior to
expiration of the applicable statute of limitations taking into
consideration any extensions thereof pertaining to such Taxes or information
reporting requirements with respect to clause (iii) above. "Taxes" shall
include, but not be limited to, any federal, state, local, foreign and other
income, franchise, capital stock, employees' income withholding, non-
resident alien withholding, social security, unemployment, disability, real
property, personal property, sales, use, excise, transfer, business
privilege, bank shares tax, loans and other taxes or governmental fees or
charges, including any interest, penalties or additions to tax on the
foregoing.
(b) The Purchaser shall indemnify the Seller and hold it harmless from and
against any Losses that the Seller may sustain or become subject to as a
result of (i) any breach of any representation, warranty or agreement of
Purchaser contained in this Agreement, (ii) any claim, legal action or
administrative proceeding based on any conduct of Purchaser or resulting
from or arising in connection with the operation of the Branches after the
Effective Date or ownership by Purchaser of the Branches or any of the
assets transferred hereunder, or (iii) the assertion against Purchaser of
any liability or obligation with respect to Taxes or information reporting
requirements of any taxing authority attributable to the assets or
operations of the Branches after the Effective Date or that Purchaser is
obligated to pay hereunder; provided, however, Purchaser shall have no
obligation to indemnify Seller against any Losses for which a claim for
indemnification has not been made by Seller prior to one year after the
Effective Date with respect to clause (i) above, prior to two years after
the Effective Date with respect to clause (ii) above, and prior to
expiration of the applicable statute of limitations taking into
consideration any extensions thereof pertaining to such Taxes or information
reporting requirements with respect to clause (iii) above.
(c) To exercise its indemnification rights under this Section 1.9 as a
result of the assertion against it of any claim or liability for which
indemnification is provided, the indemnified party shall promptly notify the
indemnifying party that such claim or liability has been asserted, shall
advise the indemnifying party of all facts relating thereto within the
knowledge of the indemnified party, and shall afford the indemnifying party
the opportunity, at the indemnifying party's sole cost and expense, to
defend against such claim or liability (in which event the indemnified party
may participate in the defense at its sole expense). The indemnified party
shall not settle or compromise any such claim or liability and then seek to
be indemnified from and against all Losses resulting therefrom, without the
prior written consent of the indemnifying party, which consent shall not be
unreasonably withheld.
1.10 Pro-Rata Adjustment of Expenses.
Taxes and any items either of which may become a municipal lien upon the
premises shall be pro-rated on a daily basis and settled between the parties as
of the Effective Date.
1.11 Fixed Assets.
Exhibit C identifies the leasehold improvements, furniture, fixtures and
equipment to be transferred by Seller to Purchaser under this Agreement as of
June 30, 1999, grouped by Branch, and provides the book value of each such
improvement or item of furniture, fixture or equipment, to the extent available
to Seller without unreasonable effort or expense, and if such information is not
reasonably available, Seller shall provide the most detailed information
reasonably available. Exhibit C will be updated and superseded as described in
Section 1.3 hereof. Prior to the Effective Date, assets shall be added or
subtracted from Exhibit C only in the ordinary course of business, except as
mutually agreed by Seller and Purchaser.
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ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE SELLER
The Seller hereby represents and warrants to the Purchaser as follows:
2.1 Corporate Organization.
The Seller is a national bank validly existing and in good standing under the
laws of the United States of America. The Seller has the corporate power and
authority to own the property being transferred, to carry on its business as
presently conducted and to effect the transactions contemplated hereunder. The
Seller's deposit liabilities are insured by the Federal Deposit Insurance
Corporation ("FDIC").
2.2 No Violation.
The execution and delivery of this Agreement by Seller does not, and the
consummation by it of the transactions contemplated hereby will not, constitute
(i) a breach or violation of, or a default under, any law, rule, regulation,
judgment, decree, order, governmental permit or license, agreement, indenture or
instrument of Seller or to which Seller is subject, which breach, violation or
default would have material adverse effect on the financial condition, business
or results of operation of Seller and its subsidiaries taken as a whole or (ii)
a breach or violation of, or a default under, Seller's articles of association
or by-laws; and the consummation of the transactions contemplated hereby will
not require any consent or approval under any such law, rule, regulation,
judgment, decree, order, Governmental permit or license or the consent or
approval of any other party to any such agreement, indenture or instrument,
other than the approval of applicable regulatory authorities referred to in
Section 6.4 hereof and the consents of lessors of the Branches referred to in
Section 6.5 hereof.
2.3 Corporate Authority and Validity.
The execution and delivery of this Agreement and consummation of the
transactions contemplated hereunder have been duly authorized by all necessary
corporate action and no further corporate authorization on the part of the
Seller is necessary to consummate such transactions. This Agreement is a valid
and binding agreement of the Seller enforceable against the Seller in accordance
with its terms, subject as to enforcement to bankruptcy, insolvency, moratorium
and other laws of general applicability relating to or affecting creditors'
rights and to generate equity principles.
2.4 Loans.
(a) Each Loan being transferred by Seller to Purchaser is in all respects
what it purports to be, was made in the ordinary course of business, was not
known to be uncollectible at the time it was made, and accrues interest in
accordance with the terms of the applicable Loan Documents. The records of
Seller regarding all Loans outstanding are accurate and complete in all
material respects. Each Loan is the legal, valid and binding obligation of
the obligor and any guarantor named therein, enforceable in accordance with
its terms (including the validity, perfection and enforceability of any
lien, security interest or other encumbrance relating to such Loan), except
as such enforcement may be limited by applicable bankruptcy, insolvency,
fraudulent conveyance and other laws of general applicability relating to or
affecting creditors' rights and to general principles of equity, and no
defense, offset or counterclaim has been asserted with respect to any such
Loan. The records and files of Seller to be delivered to Purchaser
hereunder, evidencing and relating to the Loans, contain such information
and documentation as Seller reasonably believes to be sufficient for Seller
to properly conduct its banking business with respect to such Loans if the
transaction contemplated were not consummated. Without limitation, the
collateral documents, evidence of security interests, notes and other
documentation of all types contained in the records to be delivered to
Purchaser hereunder related to the Loans are sufficient to enforce such
Loans against the obligors and guarantors (if any) thereof, in accordance
with the respective terms thereof, subject to bankruptcy, insolvency,
fraudulent conveyance and other laws of general applicability relating to or
affecting creditors' rights and to general principles of equity.
(b) None of the Loans are in default with respect to any material
provisions (except payment), or are 30 days or more currently past due or
are listed on Seller's books as being in non-accrual or restructured status,
(which term shall include, without limitation, Loans in which the collateral
securing the same has been repossessed or in which repossession efforts have
been instituted or, claim and delivery or foreclosure proceedings have been
filed). No obligor on any Loan has currently on file a petition for relief
under the United States Bankruptcy Code or other state or federal
bankruptcy,
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insolvency or similar statute, or with respect to which the obligor has made a
general assignment for the benefit of creditors.
(c) No real property which stands as collateral security for any part of
any Loan to be purchased by Purchaser hereunder is, to the best of Seller's
knowledge and belief, the subject of any action, suit or proceeding, pending
or, to the best of Seller's knowledge and belief, threatened, under
environmental, hazardous waste disposal or other similar federal or state
laws, rules or regulations, and, to the best of Seller's knowledge and
belief, none of such real property has been used in any manner which would
violate any such laws, rules or regulations.
(d) There is no action, suit or proceeding, pending against Seller or
threatened against Seller which respect to any Loan, that alleges violation
of, or noncompliance with, any state or federal consumer lending consumer
protection or other compliance statute or regulation, including but not
limited to the Truth in Lending Act, the Real Estate Settlement Practices
Act, the Fair Debt Collection Practices Act, the Fair Credit Reporting
Practices Act, or Regulation B or Regulation Z promulgated by the Board of
Governors of the Federal Reserve System, each as amended, that would, if
adversely determined, have a material adverse effect on the value of the
Loans being sold hereunder, and Seller has had no notice or communication
with respect to any such action, suit or proceeding, and there is no such
violation.
2.5 Title to Property; Encumbrances.
(a) The Seller is the owner of the furniture, fixtures, equipment and other
such assets to be transferred to the Purchaser pursuant to this agreement,
and in no case are any of such assets subject to any mortgage, pledge, lien,
security interest, conditional sales agreement, lease, encumbrance or charge
of any nature whatsoever.
(b) The leasehold estates being assigned and the furniture, fixtures and
equipment being sold pursuant to this Agreement are substantially all of the
tangible assets owned by the Seller and/or used by it to conduct the
business operations of the Branches as of the date hereof, other than the
items set forth in Exhibit B which are not being sold to the Purchaser
hereunder. The leasehold premises, and the furniture, fixtures and equipment
being sold are all in good operating condition and repair, giving
consideration to their age and use and subject to ordinary wear and tear.
(c) No notice of any violation of zoning laws, building or fire codes, or other
statutes, ordinances or regulations relating to the Branches or the
operation thereof has been received by the Seller, and to the best of
Seller's knowledge and belief, no such violation exists. Without limitation,
to the best of Seller's knowledge and belief, none of the Branch premises is
the subject of any pending or threatened action, suit or proceeding under
environmental, hazardous waste disposal, or other similar federal or state
laws, rules or regulations, and, to the best of Seller's knowledge and
belief, none of such premises has been used in any manner which would
violate any such laws, rules or regulations.
2.6 Deposit Liability Records.
(a) The Deposit Liabilities are insured by the Bank Insurance Fund of the FDIC.
None of the Deposit Liabilities are insured by the Savings Association
Insurance Fund of the FDIC or are assessed at rates applicable to deposits
so insured.
(b) The Seller will provide the Purchaser with access to all current records of
account pertaining to deposit liabilities of the Branches to be assumed by
the Purchaser pursuant to this Agreement in such form or medium as is
maintained by the Seller, which form or medium is recognized by applicable
regulatory authorities as being appropriate. All such records of account are
accurate, and all purported signatures on and the executions of any
documents are genuine. With respect to the deposit records, Seller is in
good faith compliance with the Internal Revenue Code of 1986 and the
regulations thereunder (the Code), relative to obtaining from depositors
executed Forms W-8 and W-9. Seller has made the two consecutive annual
mailings pursuant to Section 3406 and 6724 of the Code for those deposit
liabilities for which an annual mailing is required. The records assigned,
transferred and delivered to the Purchaser pursuant to paragraph (a)(iv) of
Section 1.5 and as provided for in Exhibit F hereof will, at the Effective
Date, be in a form or medium which has been recognized by applicable
regulatory authorities as being appropriate, will be accurate, and
constitute all such records as are required by such regulatory authorities
to be necessary to lawfully conduct the business of taking deposits at the
Branches except for those historical books and records of account retained
by the Seller for the joint benefit of the Seller and the Purchaser pursuant
to Section 1.5 hereof.
(c) No notice of any violation of the Bank Secrecy Act, including, without
limitation, the currency reporting requirements thereof, relating to the
Branches or the Deposit Liabilities has been received by the Seller, and, to
the best of Seller's knowledge and belief, no such violation exists. Seller
will use commercially reasonable efforts to cooperate and share
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information regarding suspicious patterns of large currency transactions
under the Bank Secrecy Act that reasonably pertain to the Branches or the
Deposit Liabilities and which occur within a relevant period of time before
or on the Effective Date.
2.7 Non-solicitation of Business.
(a) The Seller will not, for thirty (30) months following the Effective
Date, solicit customers whose deposit or loan accounts are included in
Exhibit D-1 or on Exhibit E-1 and expected to be transferred, except as may
occur in connection with (i) mass mailed credit card solicitations not
targeted to such customers and (ii) advertising or solicitations directed to
the public generally, using print, television or radio, and not targeted to
depositors at the Branches. The Purchaser recognizes that, in connection
with solicitations directed to the public generally, the Seller cannot
easily control telemarketing and mass mailings which may be received by
customers of the Branches and agrees to permit the Seller to engage in such
activities provided that such solicitations do not target such customers.
Purchaser further recognizes that some customers of the Branches may
inadvertently be solicited by the Seller following the Effective Date
because mailing lists and similar solicitation materials were prepared prior
to the Effective Date. Also, the Purchaser agrees to permit the Seller to
distribute "Statement Stuffer" materials to customers who hold accounts or
maintain banking relationships at other branches, departments, or entities
of the Seller notwithstanding the fact that some of such customers may also
be depositors at the Branches. It is the understanding of the Purchaser and
the Seller that solicitation does not include the circumstances wherein a
customer of the Branches initiates discussions with the Seller. The Seller
will give instructions to the personnel located at the neighboring community
offices not to solicit the Branches's customers for thirty (30) months
following the Effective Date.
(b) The Seller further represents and covenants that for a period of thirty
(30) months following the date of this Agreement, it will not establish any
branch office, except as noted below in (ii), within Montgomery County,
Maryland (including, without limitation, the political jurisdictions located
within its geographic boundaries) or within a radius of three (3) miles of
the Tysons Branch or the Annapolis Branch. For purposes of this section, the
term "establish" shall not include (i) the acquisition of branches by Seller
in a direct or indirect acquisition of a whole bank or savings association
(by merger, purchase and assumption, or otherwise) provided such branch
offices have been established and operating for at least two months prior to
the execution of a definitive agreement for such acquisition and provided
further that the deposits of such bank or savings association so acquired
(together with its affiliates) within such areas constitute less than 10% of
such institution's total deposits at the date the acquisition is
consummated; and (ii) the establishment of loan production offices; or the
establishment of branch offices, or other facilities that only provide
specialized banking products and services to Seller's Private Banking and
Business Banking customers, provided such offices are not on the first floor
or street level and are not of a character that invites the general public
through advertising, signage, or otherwise; provided, however, that nothing
herein shall prohibit Seller from identifying its office location in
building directories and the like.
2.8 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, assigned or delivered to the Purchaser or any
liability or obligation being assumed by the Purchaser.
2.9 Broker's Commissions; Finder's Fees.
All negotiations relative to this Agreement and the transactions contemplated
herein have been carried on by the Seller directly with the Purchaser and no
action has been taken that would give rise to any valid claim against the
Purchaser for a brokerage commission, finder's fee or other like commission.
This representation and warranty shall survive the Effective Date.
2.10 Certain Regulatory Matters.
Seller is an Eligible Bank as defined in 12 CFR (S) 5.3(g) and the Business
Combinations Booklet of the Comptroller of the Currency's Corporate Manual
(April 1998). Seller is not aware of any basis for denial by the Office of the
Comptroller of the Currency ("OCC") for use of the streamlined application form
or of expedited processing of the application for approval of such transactions.
Seller has not entered into any commitment with any community organization,
civic association, or similar entity to provide banking services to any
community served by any of the Branches. Seller did not receive a less than
satisfactory CRA rating in its last examination for Seller as a whole or with
respect to any MSA, non-MSA or other portion of Seller's market.
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2.11 Delivery of Employment Information.
To the extent permitted by applicable law, Seller has delivered complete copies
of any and all employment agreements, severance agreements, change in control
agreements, or similar agreements (or policies enforceable by an employee
against Seller) of each employee of the Branches required by Section 1.6(b)
hereof.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The Purchaser hereby represents and warrants to the Seller as follows:
3.1 Corporate Organization.
The Purchaser is a national bank 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 the properties being acquired, to assume the liabilities being
transferred, and to effect the transactions contemplated hereunder. The
Purchaser's deposit liabilities are insured by the Federal Deposit Insurance
Corporation.
3.2 No Violation.
The execution and delivery of this Agreement by Purchaser does not, and the
consummation of the transactions contemplated hereby by it will not, constitute
(i) a breach or violation of, or a default under, any law, rule, regulation,
judgment, decree, order, Governmental permit or license, agreement, indenture or
instrument of Purchaser or to which Purchaser is subject, which breach,
violation or default would have a material adverse effect on the financial
condition, business or results of operation of Purchaser and its subsidiaries
taken as a whole or (ii) a breach or violation of, or a default under,
Purchaser's articles of association or by-laws; and the consummation of the
transactions contemplated hereby will not require any consent or approval under
any such law, rule, regulation, judgment, decree, order, Governmental permit or
license or the consent or approval of any other party to any such agreement,
indenture or instrument, other than the approval of applicable regulatory
authorities.
3.3 Corporate Authority and Validity.
The execution and delivery of this Agreement, and consummation of the
transactions contemplated hereunder, have been duly authorized by all necessary
corporate action and no further corporate authorization on the part of the
Purchaser is necessary to consummate the transactions contemplated hereunder.
The Agreement is a valid and binding agreement of the Purchaser enforceable
against the Purchaser in accordance with its terms, subject as to enforcement to
bankruptcy, insolvency, moratorium and other laws of general applicability
relating to or affecting creditors' rights and to general equity principles.
3.4 Certain Regulatory Matters.
Purchaser is an Eligible Bank as defined in the Business Combinations
Booklet of the OCC's Corporate Manual (April 1998). Purchaser is not aware of
any basis for denial by the OCC for expedited processing of the application for
approval of such transactions.
ARTICLE IV
CONDUCT OF BUSINESS PENDING THE EFFECTIVE DATE
4.1 Activity in the Ordinary Course.
(a) The Seller shall conduct the business of the Branches in substantially the
same manner as heretofore conducted, and the Seller shall not, with regard
to the Branches, engage in any activities or transactions, or establish
pricing or other terms of loans or deposits that will be sold to Purchaser
hereunder, outside its ordinary course of business as conducted as of the
date hereof and consistent with Seller's past practice, and shall not after
the date of this Agreement, initiate any new special rate or other
promotions or otherwise set the interest rates or other terms of loan or
deposit accounts such that they are significantly more attractive to the
customer than those generally offered in Montgomery County, except to the
extent Seller
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is legally required to do so.
(b) The Seller shall use its best efforts to preserve its business operation as
presently conducted at the Branches, to preserve for the Purchaser the good
will of the Seller's customers and others doing business with the Branches,
and shall cooperate with and assist the Purchaser in assuring the orderly
transition of such business from the Seller to the Purchaser. Nothing in
this paragraph (b) shall be construed as requiring the Seller to engage in
any activities or efforts outside the ordinary course of business as
presently conducted by the Seller.
(c) Seller shall not transfer any of the Loans, Deposit Liabilities, or
other assets intended to be conveyed to Purchaser under the terms of this
Agreement to any other branch or office of Seller or to any of its
affiliates, or to any other party, except as otherwise permitted by this
Agreement.
ARTICLE V
OBLIGATIONS OF PARTIES PRIOR TO AND AFTER THE EFFECTIVE DATE
5.1 Full Access.
The Seller shall afford to Purchaser and authorized representatives of the
Purchaser, upon prior notice, access to the properties, books and records
pertaining to the Branches, at reasonable times without interfering with the
Branches' normal business and operations, in order that the Purchaser may have
full opportunity to make reasonable investigations of the affairs of the Seller
relating to the Branches, and the Seller shall furnish the Purchaser with such
additional financial and operating data and other information as to its business
operations at the Branches as may be reasonably necessary for the orderly
transfer of the business operations of the Branches, including, without
limitations information required for inclusion in all Governmental applications
necessary to effect the transactions contemplated hereunder. Nothing in this
Section 5.1 shall be deemed to require the Seller to breach any obligation of
confidentiality or to reveal any proprietary information, trade secrets or
marketing or strategic plans. Anything to the contrary notwithstanding, the
Purchaser shall not require the Seller to disclose the Seller's profitability
analysis of the Branches or any other proprietary financial information except
as contemplated by this Agreement. In addition, for at least forty-five (45)
days before the Effective Date, Seller shall afford Purchaser access to the
Branches during business hours and during such times that such offices are not
open to the public, in order that the Purchaser may prepare to occupy and
operate the Branches as of the first business day (including any weekday or
Saturday on which the Branches historically have been open for business)
following the Effective Date. During such period, Purchaser may, at its own
expense, install and test electrical, data, and other equipment, so long as such
installation, testing or equipment does not interfere with the operations of the
Branches and such equipment is not identifiable to customers as that of any
institution other than Seller. Purchaser shall remove such electrical and other
equipment and return the Branch premises to its former condition, within limits
of commercial reasonableness, if this Agreement is terminated, and shall hold
Seller harmless from any damage suffered by reason of such access, installation,
or removal. In addition, for at least thirty (30) days before the Effective
Date, Seller will make available the employees of the Branches for training by
Purchaser at Purchaser's expense and on Purchaser's premises. Purchaser shall
reimburse Seller for any additional costs relating to such training time.
5.2 Requirements to Obtain Approval of Regulatory Authorities.
(a) Purchaser's Requirements. In order to consummate the transactions
contemplated by this Agreement and to acquire the Branches, the Purchaser
will require the approval of the OCC. As soon as possible, but not later
than two (2) business days after execution of this Agreement, the Purchaser
shall prepare and file an application with the OCC for expedited,
accelerated, or early approval to consummate the transactions contemplated
hereunder and to acquire the Branches as contemplated hereby and thereafter
shall (i) comply with the normal and usual requirements imposed by the OCC
applicable to effectuate the transactions contemplated hereunder, and (ii)
use its good faith efforts on a priority basis to obtain any required
permission of the OCC to consummate such transactions and to acquire the
Branches. Purchaser shall also promptly file all other regulatory
applications, (including, but not limited to a Hart-Scott Rodino filing, if
applicable) whether federal or state, as may be necessary to obtain approval
to consummate the transaction described herein. The Purchaser agrees to
provide the Seller promptly with copies of any application as filed (except
for any confidential portions thereof) and all notices, orders, opinions,
correspondence and other documents with respect thereto. It is understood
that Purchaser may determine not to operate all of the Branches after the
Effective Date and may close, sell, or consolidate one or more Branches, and
that any intention of Purchaser to do so ascertained prior to the Effective
Date will be disclosed in the application to the OCC or in subsequent
correspondence with the OCC with respect to the application. Any closings,
consolidations, or sales will be effected in a manner designed not to delay
approval by the OCC.
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(b) Seller's Requirements. The Seller shall, as soon as practicable
following the execution of this Agreement, prepare and file any notice(s) or
application(s), as required by law, with the appropriate regulatory
authorities regarding the termination of its operation of the Branches, the
sale of the Branches to the Purchaser and to effect in all other respects
the transactions contemplated hereunder. The Seller agrees to provide
information and approvals needed for applications, notices, and filings to
be prepared by Purchaser pursuant to Section 5.2(a), and to process any
application Seller or Purchaser is required to prepare or file hereunder, in
a diligent manner, and to provide the Purchaser promptly with a copy of any
application filed by Seller (except for any confidential portions thereof)
and all notices, orders, opinions, correspondence and other documents with
respect thereto, and to use its good faith efforts on a priority basis to
obtain all necessary regulatory approvals to terminate its operation of the
Branches, to sell the business operations of the Branches and to consummate
the transactions contemplated hereunder.
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5.3 Further Assurance.
The parties hereto agree to execute and deliver such instruments and to take
such other actions as the other party may reasonably require in order to carry
out the intent of this Agreement. The Seller agrees to duly execute and deliver
such bills of sale, acknowledgments 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 the legal and equitable title to the assets
of the Seller being sold hereunder, free and clear of all liens and encumbrances
except as otherwise noted in the Exhibits hereto. Purchaser shall be
responsible for all costs of deed recordation and, Purchaser shall also pay, or
reimburse Seller for Seller's payment of, all state or local sales or
compensating use or transfer taxes, including without limitation any recordation
taxes, payable in connection with the transactions contemplated hereunder, other
than any tax or portion thereof calculated directly or indirectly with respect
to the income of Seller.
5.4 Right to Intervene.
In the event that any claim, protest, suit or other proceeding is instituted
against the Purchaser as a result of this Agreement, the Seller shall have the
right, at its discretion and expense, to intervene in such litigation, and
Purchaser hereby consents to such intervention.
5.5 Damages for Voluntary Non-Consummation.
If, after the execution of this Agreement, the Purchaser voluntarily elects to
not proceed with the closing on the Effective Date when there has not been a
termination of this Agreement pursuant to Article VIII of this Agreement, the
Purchaser shall be liable to the Seller for the Seller's costs and expenses
incurred in preparation for said transaction, plus liquidated damages in the
amount of Two Hundred Thousand Dollars ($200,000), an amount agreed upon by the
parties as being a reasonable estimate of the damages to be incurred by the
Seller in such event. Upon payment of such liquidated damages, Purchaser shall
be released from liability to the Seller (and any of its affiliates, owners,
successors or assigns) for each and every claim for loss, damages or expenses
under this Agreement or in connection with the transactions contemplated hereby,
other than actual losses, damages or expenses that are determined by final, non-
appealable judgement of a court with appropriate jurisdiction to be the direct
result of Purchaser's willful misconduct.
5.6 Consents and Assignments; Lease Renewal.
On or prior to the Effective Date, Seller shall use good faith, reasonable
efforts to obtain consents of lessors to the assignment to Purchaser of all
leases of Branch premises upon terms substantially the same as those applicable
to Seller, including but not limited to the same lease payments applicable to
Seller. Seller shall cooperate with Purchaser's effort to negotiate with the
lessor of the Wildwood Branch office for an extension of the lease or new lease
of such premises referred to in Section 6.5 hereof.
5.7 Test Tapes; Conversion.
Seller shall provide test tapes and other data processing information for Loans
and Deposits to Purchaser's data processor in customary form on or before July
23, 1999, and shall otherwise cooperate with Purchaser to effect the conversion
of such accounts from Seller's data processing systems to Purchaser's data
processing systems on the first business day (including any weekday or Saturday
on which the Branches historically have been open for business) following the
Effective Date, as specified in Exhibit I.
5.8 Signs.
Seller, at its own expense, will remove all of its identifying signs relating to
the Branches (including, without limitation, signs advertising, listing, or
referring to Seller, Seller's products or services, or a logo or service mark
associated with Seller or any affiliate of Seller in the vicinity of any Branch)
within one calendar day after the Effective Date. Seller and Purchaser shall
cooperate to schedule removal of Seller's signage and installation of
Purchaser's signage within one calendar day after the Effective Date.
5.9 Condition of Premises.
Within one calendar day after the Effective Date, Seller shall have removed, at
its own expense and in a manner that does not unreasonably interfere with
Purchaser's right to possess and operate any Branch, all of its property not
purchased or leased by Purchaser hereunder, including, without limitation, any
and all trash and unused forms, supplies, and office equipment not
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purchased by Purchaser hereunder, or, with respect to leased property, not
transferred to Purchaser hereunder. Seller shall deliver the premises of each
Branch in clean and safe condition, and without tears or gaps in carpeting,
damage to walls, ceiling or floors, or other defects that may unreasonably
interfere with Purchaser's operation of the premises as an attractive and safe
branch office on the first business day (including any weekday or Saturday on
which the Branches historically have been open) following the Effective Date.
The condition and state of repair of such premises shall satisfy the
requirements of the leases in effect immediately prior to the Effective Date on
such premises applicable during and at termination of such leases.
5.10 Termination of Service Agreements.
Seller shall terminate all service, repair, maintenance, hauling and similar
contracts applicable to the Branches at or prior to the Effective Date, and
shall hold Purchaser harmless from any claims thereunder.
5.11 Purchaser's Inspection of Premises.
Purchaser may in good faith hire a duly qualified, independent engineer or
building inspector to conduct promptly after the execution of this Agreement any
and all inspections Purchaser deems necessary or appropriate. If the written
report from said engineer or building inspector, a copy of which must be
supplied to Seller within forty-five (45) days of the Effective Date, identifies
any material deficiencies on or to said premises, including but not limited to
deficiencies which (i) constitute violations of the respective lease pertaining
to said premises, or (ii) inadequate or delayed maintenance and upkeep of said
premises, Seller shall promptly take reasonable action to correct said
deficiency, provided, however, that Seller shall not be responsible for the
repair or correction of any deficiency the repair or correction of which is the
obligation of the landlord of such premises under the lease relating thereto.
ARTICLE VI
CONDITIONS TO PURCHASER'S OBLIGATIONS
The obligation of the Purchaser to consummate the transactions provided for in
this Agreement is conditioned upon fulfillment, at or before the Effective Date,
of each of the following conditions:
6.1 Representations and Warranties True.
Each of the representations and warranties contained herein of the Seller shall
be true in all material respects on the Effective Date as if made on and as of
such date, except for any changes permitted by the terms hereof or consented to
by the Purchaser in writing.
6.2 Obligations Performed.
The Seller shall have performed and complied in all material respects with all
obligations and agreements contained herein of the Seller required to be
performed or complied with by it prior to or at the Effective Date.
6.3 No Adverse Litigation.
On the Effective Date, no action, suit or proceeding shall be pending or
threatened against the Seller or the Purchaser which (a) might reasonably be
expected to materially and adversely affect the business, results of operation
or financial condition of the Branches, or (b) challenges the validity or
consummation of the transactions contemplated by this Agreement.
6.4 Regulatory Approval.
The Purchaser shall have received from the appropriate regulatory authorities
approval, without the imposition of any condition or requirement that materially
and adversely affects the value to the Purchaser of the transaction contemplated
by this Agreement, taken as a whole.
6.5 Availability of Premises for Intended Use.
The Premises of each Branch shall not have been destroyed, damaged or condemned,
and shall be available for use by the Purchaser as contemplated by this
Agreement. All consents of third parties or assignments of premises necessary to
allow occupancy of the premises by Purchaser, and any lease, lease extension or
commitment with respect thereto described in the letter from Purchaser to Seller
of even date herewith, shall have been obtained, or waived.
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6.6 Material Adverse Change.
There shall have occurred no material adverse change in the subject matter of
the transactions contemplated by this Agreement, taken as a whole, excluding any
adverse change that results from changes in general economic conditions or
general levels of interest rates.
6.7 Certificate of Compliance.
The Seller shall have delivered to the Purchaser a certificate of a duly
authorized officer, dated the Effective Date, certifying to the best of such
officer's knowledge after reasonable investigation to the fulfillment of the
conditions set forth in Sections 6.1, 6.2, 6.3 (with respect to Seller only),
6.5 and 6.6.
ARTICLE VII
CONDITIONS TO THE SELLER'S OBLIGATIONS
The obligation of the Seller to Consummate the transactions provided for in this
Agreement is conditioned upon fulfillment, at or before the Effective Date, of
each of the following conditions:
7.1 Representations and Warranties True.
Each of the representations and warranties contained herein of the Purchaser
shall be true in all material respects on the Effective Date as if made on and
as of such date, except for any changes permitted by the terms hereof or
consented to by the Seller in writing.
7.2 Obligations Performed.
The Purchaser shall have performed and complied in all material respects with
all obligations and agreements contained herein of the Purchaser required to be
performed or complied with by it prior to or at the Effective Date.
7.3 No Adverse Litigation.
On the Effective Date, no action, suit or proceeding, shall be pending or
threatened against the Purchaser or Seller which challenges the validity or
consummation of the transactions contemplated under this Agreement.
7.4 Regulatory Approval.
The Seller shall have received from the appropriate regulatory authorities
approval to effect the transactions contemplated hereunder and to sell and
terminate its operation of the Branches without the imposition of any condition
or requirement that materially and adversely affects the value to the Seller of
the transactions contemplated by this Agreement, taken as a whole.
7.5 Certificate of Compliance.
The Purchaser shall have delivered to the Seller a certificate of a duly
authorized officer, dated the Effective Date, certifying to the best of such
officer's knowledge after reasonable investigation to the fulfillment of the
conditions set forth in Sections 7.1, 7.2, and 7.3 (with respect to Purchaser
only).
ARTICLE VIII
TERMINATION
8.1 Methods of Termination.
This Agreement may be terminated prior to the Effective Date:
(a) By the mutual consent of Seller and Purchaser;
(b) By Purchaser, in the event of a material breach by Seller of any
representation, warranty or agreement contained herein
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which cannot be cured or is not cured within five (5) business days after
written notice of such breach is given to Seller;
(c) By Seller, in the event of a material breach by Purchaser of any
warranty or agreement contained herein which cannot be cured or is not
cured within five (5) business days after written notice of such breach is
given to Purchaser;
(d) By Seller or Purchaser, in the event that the Effective Date does not
occur by October 31, 1999; or
(e) By Purchaser at any time upon payment of the amount set forth in
Section 5.5.
provided, however, that (i) any termination by Purchaser pursuant to subsection
(a), (b) or (e) above must have been approved by its board of directors; (ii)
Purchaser may not terminate this Agreement pursuant to (d) above if the
Effective Date has not occurred by reason of its failure to obtain a third-party
consent or take any act required by this Agreement to be obtained or taken by a
specific date; and (iii) Seller may not terminate this Agreement pursuant to (d)
above if the Effective Date has not occurred by reason of its failure to obtain
a third party consent (other than a third-party consent, assignment, extension
or commitment required by Section 6.5 hereof, provided that Seller has fulfilled
its obligations under Section 5.6 hereof) or take any act required by this
Agreement to be obtained or taken by a specific date.
8.2 Procedure Upon Termination.
In the event of termination pursuant to Section 8. 1 hereof, written notice
thereof shall forthwith 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 having the right to terminate. If this Agreement is
terminated as provided herein:
(a) each party will return all documents, work papers and other materials
of the other party relating to this Agreement whether 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 government authority) shall not at any time be used for any
purpose by such party or disclosed by such party to third persons.
ARTICLE IX
MISCELLANEOUS PROVISIONS
9.1 Amendment and Modification.
The parties hereto, by mutual consent of their duly authorized officers, may
amend, modify or supplement this Agreement in such manner as may be agreed upon
by them in writing.
9.2 Waiver or Extension.
Except with respect to required approvals of the applicable governmental
authorities, either party, by written instrument signed by a duly authorized
executive officer, may extend the time for the performance of any of the
obligations or other acts of the other party and may waive (a) any inaccuracies
in the representations or warranties contained herein or in any document
delivered pursuant hereto or (b) compliance with any of the undertakings,
obligations, covenants or the acts contained herein.
9.3 Assignment; No Rights or Remedies to Others.
This Agreement and all of the provisions hereof shall be binding upon, and shall
inure to the benefit of, the parties hereto and their respective successors and
permitted assigns, 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.
This Agreement is not intended to confer upon any person not a party hereto any
rights or remedies hereunder.
9.4 Survival of Representations and Warranties.
The representations, warranties, conditions and obligations set out in this
Agreement shall survive the Effective Date, except as expressly provided to the
contrary herein or unless the context otherwise requires.
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9.5 Payment of Expenses; Taxes.
Except as otherwise specifically provided in this Agreement, each party hereto
shall bear and pay all costs and expenses incurred by it or on its behalf in
connection with the transactions contemplated hereunder. Except as otherwise
provided herein, any expenses, fees, and costs necessary for any approvals of
the appropriate regulatory authorities, or for any notice to depositors of the
assumption of deposit liabilities provided for in this Agreement shall be paid
by the party seeking such approval or giving such notice. Purchaser shall be
responsible for the payment of all sales or transfer taxes, if any, that arise
as a result of the transaction herein.
9.6 Addresses for Notice, etc.
All notices, requests, demands, consents and other communications provided for
hereunder and under the related documents shall be in writing and mailed (by
registered or certified mail) delivered to the applicable party at the addresses
indicated below:
If to the Seller: With copy to:
Mellon Bank (MD) National Association Mellon Bank, N.A.
1901 Research Boulevard One Mellon Bank Center, Room 151-5105
Rockville, MD 20850 500 Grant Street
Pittsburgh, PA 15258
Attn.: Maryann Johnson Arm.: Mark Oxenreiter
(301) 217-0696 (412) 236-2737
EIN 52-1459469
If to the Purchaser: With copy to:
Sandy Spring National Bank of Maryland Kennedy, Baris & Lundy, L.L.P.
17801 Georgia Avenue Suite 300
Olney, MD 20832 4719 Hampden Lane
Attn: Hunter R. Hollar Bethesda, MD 20814
President and Chief Executive Officer James I. Lundy, III, Esquire
EIN# 52-0312970
----------
or, as to each party, at such other address as shall be designated by such party
in a written notice to the other party complying as to delivery with the terms
of this Section.
9.7 Press Releases, Public Disclosure.
The Purchaser and the Seller each hereby covenants and agrees that unless
approved by the other party hereto in advance (which approval shall not be
unreasonably withheld or delayed) it will not issue any press release for
general circulation or otherwise make any public disclosure relating to the
transactions contemplated hereby except as otherwise may be required by law.
9.8 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.
9.9 Headings.
The headings of the Sections and Articles of this Agreement are inserted for
convenience only and shall not constitute a part hereof.
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9.10 Governing Law.
This Agreement shall be governed by, and construed in accordance with, the
substantive law of the State of Maryland.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their duly authorized officers and their corporate seats to be affixed as of
the date first written above.
ATTEST: MELLON BANK (MD) NATIONAL ASSOCIATION
BY: /s/ Maryann Johnson BY: /s/ Frederick K. Beard
------------------- ----------------------
TITLE: First Vice President TITLE: Chairman, President & CEO
-------------------- -------------------------
ATTEST: SANDY SPRING NATIONAL BANK OF MARYLAND
BY: Marjorie S. Holsinger BY: /s/ Hunter R. Hollar
--------------------- --------------------
TITLE: Corporate Secretary TITLE: President
------------------- ---------
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Exhibit 99.1
Press Release
SANDY SPRING
BANCORP
SANDY SPRING NATIONAL BANK
of Maryland
NASDAQ NATIONAL MARKET-SASR
Web Page-www.ssnb.com
- --------------------------------------------------------------------------------
FOR IMMEDIATE RELEASE
SANDY SPRING NATIONAL BANK ACQUIRES LOCAL MELLON OFFICES
September 27, 1999, Olney, Maryland. Sandy Spring National Bank of Maryland, a
subsidiary of Sandy Spring Bancorp, Inc. (NASDAQ National Market--SASR),
announced that it completed the acquisition of seven offices of Mellon Bank (MD)
National Association; along with approximately $225 million in deposits and a
$33 million portfolio of consumer and commercial loans. Five of the new offices
are in Montgomery County, one is in Annapolis, and one is in Tysons Corner,
Virginia.
Hunter R. Hollar, President and Chief Executive Officer of Sandy Spring
Bancorp, stated, "We welcome our new clients, and are delighted to add these
additional, convenient locations."
Sandy Spring Bancorp is the bank holding company for Sandy Spring National
Bank of Maryland, which now has thirty banking offices and approximately $1.6
billion in assets. Construction is underway on a new community banking office in
Edgewater, in Anne Arundel County. It is expected to open in the first quarter
of 2000.
For additional information or questions please contact:
Hunter R. Hollar, President & Chief Executive Officer or
Sara E. Watkins, Senior Vice President
(301) 774-6400 or (410) 792-2450
Sandy Spring Bancorp, Inc.
17801 Georgia Avenue
Olney, MD 20832
####
