SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported)
June 7, 1996
TF FINANCIAL CORPORATION
(Exact name of Registrant as specified in its Charter)
Delaware 0-24168 742705050
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(State or other jurisdiction (SEC File No.) (IRS Employer
of incorporation) Identification Number)
3 Penns Trail, Newtown, Pennsylvania 18940
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (215) 579-4000
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Not Applicable
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(Former name or former address, if changed since last Report)
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TF FINANCIAL CORPORATION
INFORMATION TO BE INCLUDED IN REPORT
Item 5. Other Events.
On June 7, 1996, TF Financial Corporation (the"Corporation"), the holding
company for Third Federal Savings Bank ("Third Federal"), announced that Third
Federal had entered into a Branch Purchase and Deposit Assumption Agreement (the
"Agreement") to acquire three branch offices and $143 million of deposits from
Cenlar Federal Savings Bank, Trenton, New Jersey ("Cenlar"). In connection with
the acquisition, Third Federal paid Cenlar a premium of approximately $9.3
million.
A copy of the Agreement dated June 7, 1996, and the press release issued
by the Corporation on June 7, 1996, are attached hereto as Exhibits 99.1 and
99.2, respectively, and incorporated herein by reference in their entirety.
Item 7. Financial Statements, Pro Forma Financial
Information and Exhibits
(c) Exhibits:
99.1 Branch Purchase and Deposit Assumption
Agreement dated June 7, 1996.
99.2 Press Release dated June 7, 1996.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned, thereunto duly authorized.
TF FINANCIAL CORPORATION
Date: June 11, 1996 By:/s/John R. Stranford
John R. Stranford
President and Chief
Executive Officer
EXHIBIT 99.1
BRANCH PURCHASE AND DEPOSIT ASSUMPTION AGREEMENT
THIS BRANCH PURCHASE AND DEPOSIT ASSUMPTION AGREEMENT (the "Agreement") is
entered into this the 7th day of June 1996, between Cenlar Federal Savings Bank,
a federally chartered capital stock savings bank having its principal office at
425 Phillips Boulevard, Trenton, NJ 08628 (the "Seller"), and Third Federal
Savings Bank, a federally chartered capital stock savings bank having its
principal office at 3 Penns Trail, Newtown, Pennsylvania 18940 (the
"Purchaser"). The Seller and the Purchaser are hereinafter sometimes
collectively referred to as the "Parties".
WHEREAS, the Seller wishes to sell the deposits and certain assets, as
defined herein, of the branch offices operated by it at 2075 Pennington Road,
Trenton, New Jersey 08618 (the "Ewing Branch"), at 1850 Route 33, Hamilton
Square, New Jersey 08690 (the "Hamilton Branch"), and at 301 North Harrison
Street, Princeton, New Jersey 08540, (the "Princeton Branch") (collectively the
"Branches"), and
WHEREAS, the Purchaser wishes to purchase the deposits and certain assets
of the Branches, and
WHEREAS, the Purchaser has upon the execution of this Agreement deposited
with the Seller the amount of one hundred thousand dollars ($100,000.00) (the
"Deposit") which amount shall be held by Seller in an interest bearing account
earning interest at the Seller's current rate paid on money market savings
accounts.
NOW, THEREFORE, in consideration of the foregoing, of the mutual
agreements, covenants, representations, warranties and conditions contained
herein, and of other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Parties have agreed and do
agree as follows (the "Transaction"):
ARTICLE I
TRANSFER OF ASSETS AND ASSUMPTION OF LIABILITIES
1.01 Effective Date. The closing of the Transaction contemplated hereby (the
"Closing") shall occur as soon as possible following receipt of all approvals of
regulatory authorities necessary for the Purchaser and Seller to consummate such
Transaction at such time and date as may be mutually agreed to by the Parties
(the "Effective Date" or the "Closing Date"). The Closing shall be held at such
place as may be agreed upon by the Parties. Notwithstanding the foregoing, in no
event shall the Closing Date be before fifteen (15) calendar days after the last
date of approval issued by the Office of Thrift Supervision ("OTS")
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and the Federal Deposit Insurance Corporation ("FDIC") or later than 30 days
after receipt of such approval. Determination of the Closing Date shall give
consideration to timetables associated with all conditions and duties of the
Parties, including obtaining all necessary governmental approvals and
certifications and coordination of the transfer of the electronic data
processing files and systems. It is agreed that time is of the essence with
respect to this Transaction.
1.02 Transfer of Assets and Consideration Therefor.
(a) Obligations of the Seller. The Seller agrees that, subject to the
terms and conditions of this Agreement, it will validly sell, assign, transfer,
convey and deliver to the Purchaser, on the Effective Date:
(i) All of its rights, title and interest, as lessee under any
and all real estate leases pertaining to the Branches, (set
forth at Schedule 1.02(a)(i)) together with all leasehold
improvements thereon, including any security deposits on
such real estate leases net of deductions as specified at
Section 8.02;
(ii) All of its rights, title and interest in all real property
pertaining to the Branches (set forth at Schedule
1.02(a)(ii);
(iii) All of its rights, title and interest in and to all of the
furniture, fixtures and equipment used in the operation of
the Branches, as set forth at Schedule 1.02(a)(iii);
(iv) All of its rights, title and interest to the safe deposit
box business conducted at the Branches, exclusive of
"Break-Opens" as hereinafter defined at Section 1.06;
(v) All petty cash, vault cash, automated teller machine cash
and drawer cash ("Branch Cash") maintained at the Branches
as of the Closing Date, subject to audit verification
conducted by a representative of each party as of the close
of business on the Closing Date, and savings and checking
deposit records and customer records relating thereto;
(vi) All of its rights, title and interest in the Loans as
referred to at Section 1.04; Further, Seller agrees to
maintain the Branches and related property and assets in a
manner conducive to normal
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operations from the date of the Agreement through the
Closing Date.
(b) Obligations of the Purchaser. The Purchaser agrees that on the
Effective Date, subject to the terms and conditions of this Agreement, and in
consideration for the aforesaid sale, assignment, transfer, conveyance and
delivery:
(i) Purchaser will pay to the Seller the sum of the aggregate of
the following: Prepaid Rent on the Princeton Branch, the
amount of the security deposit assignment on the Princeton
Branch in accordance with Section 8.02, the aggregate
purchase price for the Real Property, Leasehold
Improvements, Furniture, Fixtures and Equipment, and the
Branch Cash, as adjusted by the pro rata rents paid in
advance on the rented safe deposit boxes and pro rata
adjustments as provided at Section 1.10; and (ii) the
Purchaser will assume and agree to pay, perform and
discharge all Deposit Liabilities of the Seller to transfer
to Purchaser as of the Closing Date, including accrued
interest, attributed on the records of the Seller to the
Branches now existing or hereafter arising and existing on
the Effective Date as set forth at Schedule 1.02(b)(i)(1)
"Schedule of Deposit Liabilities" attached hereto, with only
such changes therein as shall have occurred in the ordinary
course of business of the Seller between the date of such
schedule and the Effective Date. The risk of loss for
deposited items in transit as of the Closing Date shall rest
with the Seller. The purchase price for the Prepaid Rent,
Real Property, Leasehold Improvements, Furniture, Fixtures
and Equipment shall be as set forth at Schedule
1.02(b)(i)(2).
(ii) Purchaser will assume and thereafter fully and timely
perform and discharge, in accordance with their terms, all
of the liabilities and obligations of the Seller arising on
and after the Closing Date related to the leased property,
the real property, personal property, furniture, fixtures
and equipment, rented safe deposit boxes, exclusive of
Break-Opens, and any related contracts and service
agreements listed in Schedule 1.02(b)(ii), except to the
extent that assumption of such obligations is objected to by
the applicable third party despite the assistance of
Seller's best efforts, or Purchaser and Seller agree to
modify or cancel as appropriate, such obligations as of the
Closing Date.
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(iii) Purchaser will assume all rights, title and interest of the
Seller in and to the safe deposit box business conducted at
the Branches as of the Closing Date, exclusive of
Break-Opens. A list of rental agreements for such safe
deposit boxes is attached as Schedule 1.02(b)(iii).
1.03 Payment of Premium.
(a) The Purchaser further agrees that on the Effective Date, subject to
the terms and conditions of this Agreement, it shall pay to the Seller a premium
in the amount of $9,321,000 (the "Premium"), less the amount of the Deposit plus
accrued interest thereon. In the event that the aggregate balance of Deposit
Liabilities, including accrued interest but excluding (i) retail certificates of
deposit of $80,000 or more with negotiated rates ("Retail Jumbo Certificates of
Deposit"), (ii) deposit accounts held by officers, directors or employees of the
Seller other than those whose primary work location is at one of the Branches
and who will be employed by the Purchaser on the first day following the Closing
Date, and (iii) deposits made with respect to Individual Retirement Accounts and
KEOGH Accounts ("IRA Deposits") (collectively, constituting the "Excluded
Deposits"), of the Branches to be assumed by the Purchaser at the close of
business five (5) business days prior to the Effective Date, is less than
ninety-five percent (95%) of the aggregate balance of Deposit Liabilities
excluding the Excluded Deposits as of March 31, 1996, including accrued
interest, then in that event, the Premium to be paid by the Purchaser shall be
automatically adjusted downward, to an amount calculated by multiplying (i) the
premium originally offered by (ii) a fraction of which the numerator shall be
the aggregate of Deposit Liabilities to be transferred, including accrued
interest but excluding the Excluded Deposits, at the close of business five (5)
business days prior to the Effective Date, and the denominator shall be
ninety-five percent (95%) of the aggregate amount of Deposit Liabilities
excluding the Excluded Deposits as of March 31, 1996, including accrued
interest.
(b) The amount to be paid by the Seller to the Purchaser in consideration
of the assumption by the Purchaser of the Deposit Liabilities referred to at
Section 1.02(b)(i) and the Premium referred to at Section 1.03(a) is for the
sole purpose of determining the amounts to be paid by the Seller and the
Purchaser hereunder and shall not constitute an allocation of the purchase price
for any particular asset being transferred or liability being assumed.
(c) Because certain components of the closing payments will not be finally
determinable until after the Closing Date, the Seller shall pay the Purchaser by
wire transfer of immediately available funds by 2:00 p.m. on the Closing Date an
amount equal to
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the outstanding balances and accrued interest on the Deposit Liabilities, less
Excluded Deposits, as of the close of business on the second business day
preceding the Closing Date reduced by the Purchase Price, net of adjustments
(the "Preliminary Closing Payment"). The Seller shall deliver to the Purchaser
on the business day immediately preceding the Closing Date a preliminary
settlement statement setting forth a calculation of the Closing Payment, similar
to that as set forth at Schedule 1.03(c).
(d) The Seller shall deliver to the Purchaser no later than 30 business
days after the Closing Date a final settlement statement setting forth a
calculation of the Final Closing Payment and the difference between the Final
Closing Payment and the Preliminary Closing Payment. The difference between the
Final Closing Payment and the Preliminary Closing Payment shall be paid by wire
transfer of funds by the Seller to the Purchaser or by the Purchaser to the
Seller, as applicable, no later than 45 business days after the Closing Date.
Any such amount shall accrue interest at the Federal Funds Rate in effect on the
Closing Date from the Closing Date to the date of payment. Further, any errors
on Deposit Liabilities or accrued interest thereon, or other amounts
("Mistakes-in-Fact") which are determined as of the date of the final settlement
statement shall be reconciled as of such date and appropriate adjustments of
payments shall be made to the Seller or the Purchaser, as appropriate, at such
time. Notwithstanding the foregoing, or anything else herein to the contrary,
any Mistakes- in-Fact which shall be determined by the Seller or the Purchaser
thereafter related to the Transaction consummated under this Agreement shall
nevertheless be reconciled by adjustment or payment to the Seller or the
Purchaser, as appropriate, within 30 days of such determination. The provisions
of this Section shall survive beyond the Effective Date.
(e) If Seller accepts an item before the Closing Date, which item is
returned as uncollectible, and no offset of funds is available to the Purchaser,
then Seller shall be liable for such item in an amount equal to the portion not
covered by offset. Adjustment to the Closing Payment will be made as necessary
to reflect Seller's liability.
(f) Upon execution of the Agreement, Purchaser shall pay to Seller a
deposit in the amount of $100,000 to be held by Seller in an interest bearing
money market account ("Deposit"). Such Deposit shall be refunded to Purchaser on
the Closing Date or upon termination of the Agreement in accordance with Section
9.03 of the Agreement.
1.04 Purchase of Loans.
(a) In addition to the purchase of assets and assumption of liabilities
described above, the Purchaser shall purchase on the Effective Date certain
deposit related loans of the Branches (the
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"Loans"). These Loans shall consist of: (i) loans secured by deposit
instruments, including but not limited to, savings accounts and certificates, on
the books of the Branches and (ii) unsecured loans created by writing a check or
similar instrument and creating an overdraft and loan on an account with an
established line of credit. The Purchaser will receive all pertinent details on
these loans as part of the closing transaction at least thirty days prior to the
Effective Date. Purchase of these Loans shall be subject to each loan being
acceptable to the Purchaser in accordance with the Purchaser's underwriting
standards. (A list of such Loans as of March 31, 1996, is attached hereto as
Schedule 1.04(a)). Loans related to the Deposit Liabilities include loans
secured by deposits, overdraft loans related to checking accounts, and similar
loans. Except as mutually agreed upon, Loans to be purchased will not include
loans for which no active deposit relationship exists as a Deposit Liability
which shall transfer. Purchaser reserves the right within its sole discretion to
reject any such Loans, provided notice of such rejection is given not less than
fourteen (14) days prior to the Closing Date; in which case the related Deposit
Liabilities, if any, shall not transfer.
(b) All Loans (and any notes, other evidences of indebtedness or security
instruments associated therewith) as listed at Schedule 1.04(b), transferred to
the Purchaser on the Effective Date pursuant to Section 1.04(a) shall be
transferred without recourse and without any warranties or representations as to
the collectibility of any such loans or the creditworthiness of any such
obligors.
(c) The purchase price for each loan purchased in accordance with Sections
1.04(a) and (b) shall be equal to the unpaid principal balance plus accrued and
unpaid interest as of the Effective Date. The aggregate purchase price for all
purchased loans shall be paid by offsetting the purchase price against the
Deposit Liabilities assumed and transferred.
1.05 Additional Obligations of the Parties.
(a) On the Effective Date, the Seller will:
(i) deliver to the Purchaser such of the assets purchased as shall be
capable of physical delivery, including, without limitation, all assets
comprising the safe deposit box business at the Branches;
(ii) execute, acknowledge (if appropriate) and deliver to the Purchaser a
Bill of Sale as set forth in Schedule 1.05(a)(ii) hereto and all such deeds,
endorsements, assignments or other instruments of conveyance, assignment and
transfer as shall be reasonably necessary or advisable to consummate the sale
and transfer to the Purchaser the purchased assets;
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(iii) make available to the Purchaser cash equal to the sum of the
Deposits Liabilities plus accrued interest assumed by the Purchaser plus the
Deposit and the accrued interest thereon LESS the sum of: (i) the purchase price
for the Loans to be assumed pursuant to Section 1.04(c); (ii) the payment for
assets set forth at Section 1.02(b)(i); and (iii) the Premium set forth at
Section 1.03(a);
(iv) assign and deliver to the Purchaser all collateral security of any
nature whatsoever held by the Seller as collateral security for any loan being
acquired by the Purchaser;
(v) assign, transfer and deliver to the Purchaser such of the following
records pertaining to the Deposit Liabilities to be assumed by the Purchaser and
loans to be purchased by the Purchaser and any other records reasonably
requested by the Purchaser as exist and are in the Seller's possession, and as
are necessary to enable the Purchaser to service said deposit accounts and loans
on a continuing basis:
(i) Signature cards, retirement accounts files, orders and
contracts between the Seller and customers of accounts to be
transferred hereunder, taxpayer identification number
certifications and records relating thereto;
(ii) The form of rules and regulations applicable to the accounts
to be transferred hereunder; and
(iii) Loan files and records.
(b) The Purchaser agrees that it will preserve and safely keep, for as
long as may be required by applicable law, all of the signature cards, orders,
contracts, forms, taxpayer identification number certifications, and records
herein above referred to for the joint benefit of itself and the Seller, and
that it will permit the Seller and its representatives to inspect, and make
extracts from or copies of, any such signature cards, orders, files, contracts,
forms, taxpayer identification number certifications or records, at any
reasonable time, and at the expense of the Seller, as shall be reasonably
necessary to the Seller for purposes of its records. The Seller agrees that it
will preserve and safely keep, for as long as may be required by applicable law,
all of the files, books of accounts and records as exist and are in Seller's
possession pertaining to the past history of the accounts transferred hereunder,
including deposit slips, canceled checks or withdrawal orders, for the joint
benefit of itself and the Purchaser, and that it will permit the Purchaser and
its representatives to inspect, and make extracts from or copies of, any such
files, books of accounts or records, at any reasonable time and at the expense
of the Purchaser, as shall be reasonably necessary to the Purchaser for purposes
of its records.
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(c) At least 30 days prior to the Closing Date, Seller agrees to provide
to Purchaser a list of all Deposit Liabilities, exclusive of Excluded Deposits,
identifying the types of each such deposit, the amounts thereof, the interest
rate(s) paid thereon, the name(s) and address(es) of each depositor as well as
all other pertinent information regarding each depositor and his or her Deposit
Liabilities. Purchaser shall have the right, prior to the Closing Date to review
the books and records of Seller relating to such Deposit Liabilities in
accordance with Section 5.01 for the purpose of verifying the accuracy of the
foregoing list.
(d) On the Closing Date, Seller shall execute and deliver to Purchaser a
Bargain and Sale Deed with Covenants Against Grantor Acts, conveying good,
insurable and marketable title and interest in the real property related to the
Transaction, free and clear of all liens and encumbrances, except Permitted
Exceptions (defined hereinafter), and insurable at regular rates by a title
company licensed to do business in the State of New Jersey. Purchaser shall have
the right, within 60 days of this Agreement, to conduct a title search, make
application for title insurance and make objections. Any matters not objected to
or otherwise agreed upon by Purchaser shall be "Permitted Exceptions" (except
for any matters arising after such 60 days of the date of the Agreement.)
(e) Unless otherwise agreed to by the Parties, Seller shall pay to all
employees of the Branches as of the Closing Date all wages earned and payable
through the Closing Date, including all sums payable for accrued sick leave or
vacation pay in compliance with Seller's personnel practices for terminating
employees. Purchaser shall not assume any financial or legal liabilities or
responsibility for payment of wages or benefits earned and accrued by employees
of Seller prior to the Closing Date.
(f) Seller shall render a final statement of account and related tax
reporting to each depositor and borrower whose accounts are assumed by the
Purchaser hereunder as of the Closing Date, including the filing of such tax
reporting with the appropriate taxing authorities.
(g) The Purchaser agrees, at its expense, to notify all Automated Clearing
House originators of the transfers and assumptions made pursuant to this
Agreement. Seller agrees to assist Purchaser in such activities to the extent
reasonably requested.
(h) Seller shall give all notices and take all other actions necessary and
required, including actions required by applicable laws, in connection with
Seller's assignment of and Purchaser's assumption of the liabilities and
responsibilities of Seller under any operating agreements, leases and service
contracts, with prior notice and consultation by the Purchaser.
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(i) Within 30 days of the date of this Agreement, Seller shall use
reasonable efforts to furnish Purchaser with copies of prior title information
and land survey information related to the real property associated with the
Branches readily in its possession.
(j) Purchaser shall have thirty (30) days from the date of execution of
this Agreement to cause an independent environmental consultant of its choice to
inspect and audit the assets and real property related to the Transaction for
the existence of any and all environmental conditions and any and all violations
of environmental laws, as is commonly referred to as a Phase I environmental
study (the "Environmental Audit"). The cost of such Environmental Audit shall be
paid by the Purchaser, with a credit for such payments to be given to the
Purchaser at the Closing by the Seller. If such Environmental Audit discovers
any environmental condition that the Purchaser reasonably finds unacceptable
within its sole discretion ("Environmental Condition"), the Purchaser may
terminate this Agreement by delivery of written notice of termination on or
before the day which is thirty (30) days from the date of the Agreement, which
notice shall identify such Environmental Condition. Seller shall have 45 days
from the receipt of such notice of termination to undertake such actions as are
necessary to the satisfaction of the Purchaser to cure such defects or
conditions in which case such notice of termination shall be deemed withdrawn.
Upon termination of the Agreement for failure of Seller to cure such defects or
conditions, the Deposit shall be returned to the Purchaser. The Purchaser shall
furnish the Seller with a copy of the results of such Environmental Audit within
three (3) business days of receipt of such report. The result of such
Environmental Audit shall not be disclosed to any third party without the prior
written consent of the Parties.
(k) Seller shall at its expense furnish Purchaser with two (2) sets of
mailing labels addressed to each account holder and borrower and similar
information in electronic data format as of 45 days prior to the anticipated
Closing Date and an additional two (2) sets of mailing labels as of the Closing
Date in order to facilitate the timely and efficient transition.
(l) Purchaser may contract with an independent firm at its own expense to
conduct structural, engineering and mechanical inspections of the premises and
Leasehold improvements within 30 days from the signing of the Agreement. Seller
shall provide access to the property and Leasehold improvements during these
time periods. The inspection shall include, but not be limited to, areas of
heating, air conditioning, plumbing, roof, electric, basement, well, septic,
insulation, radon, termite, structure of the premises, banking equipment and
related matters. The Seller shall also allow samples to be taken of the contents
of the building and the surrounding property, including test borings, to
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determine the presence of underground storage tanks and or ground/water
contamination. Should the inspection report be unacceptable to the Purchaser
within its sole discretion, Purchaser may void the Agreement and shall be
entitled to a return of the Deposit paid on account in the event that Seller
shall not agree to make the necessary repairs at Seller's expense prior to the
Closing Date. Time periods of the inspection may be expanded for a reasonable
period of time pending delivery of laboratory results.
(m) Seller will make an application for a Letter of Non- Applicability in
compliance with the provisions of the Industrial Site Recovery Act ("ISRA") and
shall furnish copies of said application to Purchaser. In the event Seller is
unable to obtain a Letter of Non-Applicability within forty-five (45) days of
the date of this Agreement, then either party shall have the right to terminate
the Agreement upon notice to the other. Upon termination of the Agreement, the
Deposit shall be returned to the Purchaser.
(n) Seller and Purchaser will comply with the Bulk Sales Act of the State
of New Jersey ("Bulk Act"), as applicable. Seller shall be liable for payment of
all taxes due as a result of all transactions with respect to its business and
the Branches subject to the Bulk Act occurring on or prior to the Closing Date.
The Parties shall coordinate the filing of all notices and applications for the
same not less than ten (10) days prior to the Closing Date. Seller shall
cooperate with any filing requirements and notice provisions regarding the same.
Seller also agrees to establish any escrows determined to be necessary to be
established as requested by the New Jersey Department of Taxation to protect the
interests of the Purchaser and State of New Jersey for any unpaid tax
liabilities. The balance of such escrow funds shall be returned to the Seller
following issuance of the tax clearance letter by the State of New Jersey.
(o) Seller shall provide Purchaser with a Certificate of Occupancy and/or
a fire safety certificate, as and if applicable, issued by the appropriate
municipal or county authority as of the Closing Date. Should repairs be required
in order to qualify for the Certificate of Occupancy or fire safety certificate,
Seller shall be responsible for the costs of such repairs.
(p) Seller represents to its best knowledge that there are no easements
covering the leased property or real property associated with the Transaction
except easements which exclusively benefit the property which is the subject of
this Agreement.
(q) Except as detailed at Schedule 1.05(q), Seller represents that to the
best of Seller's knowledge, there exist no underground storage tanks located on
the premises or sidewalk areas of the leased property or real property
associated with the Transaction.
(r) Purchaser, within its sole and absolute discretion, may
hire, or not hire, on the Closing Date, any, all or none of
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Seller's employees in the Branches. Purchaser currently anticipates hiring the
employees of Seller following the Closing Date, subject to receipt of certain
information from Seller regarding such employees, which information Seller
hereby agrees to provide; therefore, Seller shall not offer to retain any such
employees or to re-hire any such employees from the date of the Agreement and
for a period ending six months after the Closing Date without the prior
knowledge and approval of Purchaser. Such information to be provided by the
Seller shall include, but not be limited to, a listing of all persons currently
employed in the Branches, salary levels of such persons, copies of employment
agreements, if any, and detailed information regarding employee health, welfare
and retirement benefits currently provided to such employees. Purchaser agrees
not to contact employees of Seller unless Seller has given approval for the
employee contact. (A list of all Employees at the Branches, as of the date of
the Agreement, including the rate of pay, hiring date and responsibilities is
attached hereto as Schedule 1.05(r)).
(s) Seller shall pay any state, county and local transfer taxes that are
imposed upon the transfer of the real property of the Branches.
1.06 Safe Deposit Boxes. The Purchaser agrees to assume and to discharge, in the
usual course of banking business, the duties and obligations of the Seller; from
and after the Effective Date, with respect to the safe deposit box business at
the Branches, excluding property in possession of Seller as a result of
non-payment of rental fees or pursuant to a court order ("Break-Opens"), and to
maintain all necessary facilities for the use of such boxes by the renters
thereof during the period for which such persons have paid rent therefor in
advance to the Seller, subject to the provisions of the rental agreements
between it and the respective renters of such boxes.
On the Effective Date, the Seller shall assign, transfer and deliver to the
Purchaser all records pertaining to safe deposit operations at the Branches as
they exist and are available, including relevant safe deposit contracts, except
where the Purchaser waives compliance with any document delivery contemplated
thereby.
1.07 Safekeeping Items.
(a) The Seller agrees to transfer and deliver to the Purchaser all
securities and papers, if any, held by the Seller in safekeeping for its
customers at the Branches, together with all of the records relating thereto.
(b) The Purchaser agrees to assume, honor, and discharge, from and after
the Effective Date, the duties and obligations of the Seller with respect to
such safekeeping items and shall be
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entitled to any right or benefit arising henceforth from such safekeeping
business from and after the Effective Date.
1.08 Certain Transitional Matters. Following the Effective Date:
(a) The Purchaser agrees to honor in accordance with law, up to the
collected amount on deposit (and any other funds available by reason of any
agreement between the depositor and the Purchaser), all properly drawn and
presented checks, drafts, electronic debits and credits and withdrawal orders
presented to the Purchaser by mail, over its counters, through the check
clearing system, and Automated Clearing House of the banking industry, by
depositors of the accounts assumed, whether drawn on the checks, withdrawal or
draft forms provided by the Seller, or by the Purchaser, and 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 owning to the
depositors whose accounts are assumed by the Purchaser. The Purchaser's
obligation under this Section 1.08(a) to honor checks, withdrawal, draft forms
and electronic debits and credits provided by the Seller and carrying its
imprint shall expire at the close of business on the 90th business day or a date
mutually agreeable to both Parties.
(b) If any of such depositors, instead of accepting the obligation of the
Purchaser to pay the Deposit Liabilities assumed, shall demand payment from the
Seller for all or any part of any such assumed Deposit Liabilities, the Seller
shall not be liable or responsible for making such payment. Instead, the Seller
may, at its discretion, assume custody of the check or other item presented for
payment, including electronic items, on an account which has been transferred
with the Branches, batch such items and make them available to the Purchaser for
pick-up at the Seller's office at 425 Phillips Boulevard, Trenton, New Jersey at
10:30 a.m. of the next banking day after receipt thereof by the Seller. The
Seller shall not, at any time, be liable or responsible for making payment on
such items by reason of its obtaining custody of them for transmittal to the
Purchaser.
In order to reduce the continuing charges to the Seller through the check
clearing system of the banking industry which will result from check forms of
the Seller being used after the Effective Date by the depositors whose accounts
are assumed, the Purchaser agrees, at its cost and expense, on or immediately
after (and in no event without the express written consent of the Seller, if
prior to) the Effective Date, to notify depositors of the Purchaser's assumption
of the Deposit Liabilities and, at its sole cost and expense and without cost to
depositors, to furnish each depositor of an assumed account with not less than
fifty (50) checks on the forms of the Purchaser, with instructions to utilize
the Purchaser's checks and to destroy unused checks of the Seller as of the
Effective Date. The Seller hereby agrees that after the 90th business day or a
date
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mutually agreeable to both Parties, it shall, with respect to any check or other
item presented to it for payment on an account which has been transferred with
the Branches, at its sole option,either: (i) return such check or other item
with reference to the maker thereof; or (ii) assume custody thereof, batch the
same and make it available to the Purchaser for pick-up in the manner aforesaid
and telephone the Purchaser of the availability of the same for pick-up prior to
10:30 a.m. of the next banking day after receipt thereof by the Seller.
(c) The Purchaser agrees, no later than the start of the second business
day after demand by the Seller, to pay the Seller an amount equivalent to the
amount of any uncollected item included in a depositor's balance on the
Effective Date which is returned after the Effective Date as not collected. The
Purchaser shall be required to make such payment for an item only up to the
amount on deposit with the Purchaser at the time the Seller makes the demand
aforesaid.
1.09 Indemnification
(a) The Seller shall indemnify, hold harmless and defend the Purchaser
from and against all losses and liabilities, including reasonable legal fees and
expenses, arising out of any actions, suits or proceedings commenced prior to
the Effective Date (other than proceedings to prevent or limit the consummation
of this Agreement) relating to operations at the Branches; and the Seller shall
indemnify, hold harmless and defend the Purchaser from and against all losses
and liabilities (including reasonable legal fees) arising out of any actions,
suits or proceeding commenced on or after the Effective Date but which relate to
operations at the Branches prior to the Effective Date. The Seller agrees
further to defend, indemnify and hold harmless the Purchaser against all claims,
losses, liabilities (including reasonable legal fees) and obligations resulting
from any material breach of any agreement, representation or warranty made by
the Seller in the Agreement or in any certificate delivered to the Purchaser
hereunder. The Purchaser will give the Seller written notice of a threatened or
pending claim within thirty (30) calendar days (except in the case where the
Purchaser's first notice is its receipt of the Complaint, in which case such
time for giving Notice shall be fifteen (15) calendar days of its learning about
such threatened or pending claim), together with a statement of facts known to
it regarding such threatened or pending claim. The Seller will then have
forty-five (45) calendar days from the date it received such notice to
investigate the threatened or pending claim and determine whether it will elect
to assume the defense of the matter involving such threatened or pending claim.
If it does so elect, the Seller will be given the Purchaser's full cooperation
and assistance in maintaining said defense. The Seller shall not be liable for
any amounts in settlement of a claim or action as described above if such
settlement is effected without the Seller's written consent,
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which consent shall not be unreasonably withheld. It is understood that the
obligations of the Seller under this paragraph shall survive the Effective Date.
(b) The Purchaser shall indemnify, hold harmless and defend the Seller
from and against all claims, losses, liabilities, demands and obligations,
including reasonable legal fees and expenses, real estate, sales and use, social
security and unemployment taxes, all accounts payable and operating expenses
including salaries, rents and utility charges, which the Seller may receive,
suffer or incur in connection with operations and transactions occurring on or
after the Effective Date, and which involve the Branches or the assets
transferred or liabilities assumed pursuant to this Agreement, except as
otherwise specifically provided for in the Agreement. To the extent that any
such item has been prepaid by the Seller for a period extending beyond the
Effective Date, there shall be a proportionate monetary adjustment with respect
thereto in favor of the Seller. The Purchaser agrees further to defend,
indemnify, and hold harmless the Seller against all claims, losses, liabilities
(including reasonable legal fees) and obligations resulting from any material
breach of any agreement, representation or warranty made by the Purchaser in the
Agreement or in any certificate delivered to the Seller hereunder. The Seller
will give the Purchaser written notice of a threatened or pending claim within
thirty (30) calendar days (except in the case where the Seller's first notice is
its receipt of a Complaint, in which such time for giving notice shall be
fifteen (15) calendar days) of its learning about such threatened or pending
claim, together with a statement of facts known to it regarding such threatened
or pending claim. The Purchaser will then have forty-five (45) calendar days
from the date it receives such notice to investigate the threatened or pending
claim to determine whether it will elect to assume the defense of the matter
involving such threatened or pending claim. If it does so elect, the Purchaser
will be given the Seller's full cooperation and assistance in maintaining such
defense. It is understood that the obligations of the Purchaser under this
paragraph shall survive the Effective Date.
1.10 Prorata Adjustment of Physical Plant Expenses. All real estate taxes,
utility payments, service contracts, insurance, and similar expenses relating to
the premises on which the Branches are located shall be prorated between the
Parties as of the Effective Date.
1.11 FDIC Quarterly and Special Assessments
(a) There shall be no proration of the FDIC quarterly assessment actually
paid by the Seller for the assessment period in which the Closing Date is
included with respect to the Deposit Liabilities actually transferred as of the
Closing Date.
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(b) With respect to the proposed special assessment associated with the
recapitalization of the Savings Association Insurance Fund ("SAIF"), should the
Purchaser receive a demand for payment of such special assessment with respect
to the Branches or the Deposit Liabilities assumed by the Transaction:
(1) If the special assessment occurs prior to the Closing Date, such special
assessment will be the financial responsibility of Seller;
(2) If the enactment of such law or regulation requiring such special
assessment occurs any time prior to the one year anniversary of the
Closing Date of the Transaction, then Seller shall be liable for payment
of such special assessment related to the Deposit Liabilities equal to the
lesser of (i) the aggregate Deposit Liabilities transferred as of the
Closing Date without regard to the base period for calculation of such
assessment, or (ii) the total deposits subject to the assessment at the
Branches as of the assessment date. If such special assessment is enacted
during the period that is between the one year anniversary of the Closing
Date and the date that is on the two year anniversary of the Closing Date,
then the Seller shall pay 50% of such special assessment due calculated
based upon lesser of (i) the aggregate Deposit Liabilities transferred as
of the Closing Date without regard to the base period for calculation of
such assessment, or (ii) the total deposits subject to the assessment at
the Branches as of the assessment date, and the Purchaser would be liable
for the payment of the other 50% of such assessment amounts with respect
thereto. Seller shall be responsible for 100% of the assessment
attributable to the Excluded Deposits or any other insured deposits of the
Seller. If the special assessment is enacted subsequent to the two year
anniversary of the Closing Date, then the special assessment attributable
to the Deposit Liabilities assumed by the Purchaser will be the sole
responsibility of the Purchaser. The Purchaser shall in no event assume
responsibility for any special assessment attributable to deposits not
assumed by it in the Transaction.
(3) In the event that the special assessment does not occur prior to the
Closing Date, the Seller will provide collateral for the payment of the
special assessment by pledging securities at the Federal Home Loan Bank of
New York; with such collateral being equal to the greater of $1.22 million
or 85 basis points times the Deposits Liabilities assumed in the
Transaction. The value of such collateral shall be based upon the market
value of such collateral at the date of posting. Such collateral shall be
maintained at such level based upon any changes in its market value and
shall be adjusted not less than quarterly thereafter, as may be required
to maintain such value.
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1.12 Notice to Customers/Public Disclosures.
As mutually agreed upon by the Parties, Purchaser and/or Seller shall
notify holders of all accounts at the Branches prior to the Closing Date of the
Transaction and its impact on such account holders.
(a) Except as herein below provided to the contrary or otherwise herein
agreed, the Parties shall make no public disclosure of this Agreement or any
transaction contemplated herein prior to the Closing Date. Any press release,
public notice or notice to local officials regarding this Agreement or the
transactions contemplated herein to be made prior to the Closing Date shall be
approved in writing by all Parties prior to its release, unless such release or
notice is required in the opinion of the Purchaser or the Seller by law,
regulations or regulatory authority, in which case no approval of the other
party shall be required. Where required, the approval of any party shall not be
unreasonably withheld. Where approval is not required, the Parties, nevertheless
agree to confer prior to any such release or notice.
(b) After all applicable regulatory approvals have been received, the
Purchaser shall, at its expense, mail a notice to all depositors and safe
deposit customers of the Branches whose accounts are to be assumed notifying
them of the impending transfer of the banking business for those Branches to the
Purchaser. Prior to mailing, the Purchaser shall submit the proposed form of
such notice to the Seller for review and approval, which approval shall not be
unreasonably withheld.
(c) After all applicable regulatory approvals have been received, the
Seller shall mail a notice to all depositors and safe deposit customers of the
Branches whose accounts are to be assumed for the purpose of advising them of
the transactions contemplated by this Agreement. Prior to mailing, the Seller
shall submit the proposed form of such notice to the Purchaser for review and
approval, which approval shall not be unreasonably withheld. Alternatively, the
Seller may, at no expense to the Seller, fulfill its obligations under this
subsection (c) by joining in the notice to be mailed by the Purchaser pursuant
to subsection (b) hereinabove.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE SELLER
The Seller hereby represents and warrants to the Purchaser as follows:
2.01 Corporate Organization and Powers. The Seller is a federally
chartered capital stock savings bank duly organized, validly
existing and in good standing under the laws of the United States
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of America and the rules and regulations of the Office of Thrift Supervision
("OTS"). The Seller has the corporate power and authority to own its properties,
to effect this transaction and carry on its business as presently conducted. The
Seller' deposits are, subject only to monetary limits established by law and
regulation, insured by the Savings Association Insurance Fund ("SAIF").
2.02 Leases: Title to Property; Encumbrances.
(a) The Seller has, and at the Effective Date will have, good insurable
and marketable title, or lease to the real property, furnishings, equipment and
other assets to be transferred to the Purchaser pursuant to this Agreement, and
in each case subject to no mortgage, pledge, lien, security interest,
conditional sale agreements, encumbrance or charge of any nature whatsoever,
except as otherwise indicated on Schedule 2.02, which would interfere with or
otherwise prevent the Purchaser from having quiet enjoyment of the real estate,
ownership, possession and quiet enjoyment of the other assets or ownership of
the Deposit Liabilities, Loans or the safe deposit business to be transferred in
accordance with this Agreement.
(b) To the knowledge of the Seller (not having made any specific
investigation for this purpose), there is no condemnation proceeding pending or
threatened which would preclude or impair the use of the Branches as presently
being used in the conduct of the business of the Seller.
(c) The real property, equipment, fixtures, and furniture being sold are
all of the physical assets owned by the Seller and used by it to conduct the
business of the Branches as of the date hereof; the equipment comprising part of
the assets being sold is in operating condition and repair, giving consideration
to its age and use and subject to ordinary wear and tear. The Purchaser,
however, acknowledges and agrees that all such property is being sold "as is"
and without any warranties, express or implied, other than those specified in
this paragraph.
(d) No notice of any violation of zoning laws, building, fire, and other
regulating laws, statutes, ordinances and regulations relating to the Branches
has been received by the Seller and is currently outstanding and uncured. With
respect to the Branches, to its knowledge, the Seller is in compliance with all
federal, state and local laws, rules and regulations relating to environmental
protection and the Seller has not been notified or is otherwise aware that it is
potentially liable, or is considered potentially liable, under the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended, or
any similar state law. To its knowledge, no disposal, release or discharge of
hazardous or toxic substances, pollutants or contaminants, including petroleum
and gas products, as any of such terms may be
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defined under federal, state or local law, has occurred on, in, at or about any
of the facilities of the Branches. There are no actions, suits or regulatory
investigations pending or threatened against the Seller relating to
environmental protection matters.
2.03 No Violation. Neither the execution and delivery of this Agreement, nor the
consummation of this sale, will violate or conflict with: (i) the Charter or
Bylaws of the Seller; (ii) any provision of any agreement or any other
restriction of any kind to which the Seller is a party or by which the Seller is
bound under any material lease; or (iii) any statute, law, decree, regulation or
order of any governmental authority known to the Seller, once the governmental
consents referred to in this Agreement are obtained; or will result in a default
under or cause the acceleration of the maturity of, any obligation or loan to
which the Seller is a party.
2.04 Corporate Authority. The execution and delivery of this Agreement, and the
consummation of this sale, have been duly authorized by the Board of Directors
of the Seller. No further corporate authorization on the part of the Seller is
necessary to consummate the transaction.
2.05 Disclosure. No representation or warranty of the Seller contained in this
Agreement, nor any schedule, exhibit or other document furnished or to be
furnished by the Seller, contains or will contain any untrue statement of a
material fact or omits or will omit a material fact necessary in order to make
the statements contained therein not misleading.
2.06 Non-Competition and Non-Solicitation
(a) For a period of three years from the Closing Date, Seller agrees not
to open, acquire, establish, operate or engage in the conduct of activities
associated with the retail banking business or the opening of offices for the
conduct of retail branch banking or other banking or securities brokerage
services within the counties of Mercer and Middlesex in New Jersey, and the
counties of Bucks and Philadelphia in Pennsylvania, except for activities for
the sole purpose of servicing Excluded Deposits or for maintaining the conduct
of its home office at 425 Phillips Boulevard, Trenton, New Jersey ("Home
Office"), or any relocation thereof.
(b) Seller will not directly solicit in any manner customers whose Deposit
Liabilities or Loans are located at the Branches and are being transferred
hereunder on the Closing Date or otherwise directly solicit customers with
residences or offices in Mercer County, New Jersey, to engage in banking
transactions at the Home Office, in direct competition with the operations of
the Branches for a period beginning on the date of this Agreement and ending
three (3) years after the Closing Date, except with respect to
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required renewal notices to Excluded Deposits with maturing certificates of
deposit resident at the Home Office.
2.07 IRA/KEOGH DEPOSITS. Purchaser shall as of the date of the Agreement and for
a period of six years thereafter have a first option and a right of first
refusal with respect to any future sale or transfer of the IRA/KEOGH DEPOSITS
associated with the Branches that are being retained by Seller. A list of such
IRA/KEOGH accounts as of the date of this Agreement is attached at Schedule
2.07.
2.08 Limitation of Warranties. Except as may be expressly represented or
warranted in this Agreement by the Seller, the Seller makes no representations
or warranties whatsoever with regard to any assets being transferred to the
Purchaser, or liability or obligation being assumed by the Purchaser.
2.09 Absence of Employment Agreements.
Except as disclosed in Schedule 2.09 attached hereto, there exist no
employment agreements, contracts, understandings or disputes between Seller and
Seller's Employees at the Branches, whether written or otherwise related to
wages, hours, terms of employment, benefits or working conditions or
accommodations.
2.10 Non-Solicitation. Officers, directors, employees, representatives and
agents of Seller shall refrain from considering, soliciting, proposing to enter
into or entering into any discussion or negotiations with other potential buyers
of the Branches or substantially all of the assets or Deposit Liabilities of the
Branches from the date hereof through the Closing Date. Seller shall promptly
inform Purchaser of the receipt from the date hereof of any proposals, and terms
thereof, from third parties relating to any such potential acquisition.
2.11 No Litigation. There is no action, suit, proceeding, inquiry or
investigation, at law or in equity, or before any court, public board or body
pending, or to the knowledge of the Seller threatened, against the Seller;
wherein an unfavorable decision, ruling or finding would materially and
adversely affect the Transaction contemplated by this Agreement or adversely
affect the validity or enforceability of this Agreement or any document
necessary to consummate the Transactions contemplated herein or any approval,
consent or permission required to be obtained by the Seller hereunder.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PURCHASER
The Purchaser hereby represents and warrants to the Seller the following:
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3.01 Corporate Organization. The Purchaser is a federally chartered stock
savings bank duly organized validly existing and in good standing under the laws
of the United States of America. The Purchaser has the corporate power and
authority to own or lease its properties, to effect the transactions
contemplated hereby and to carry on its business as presently being conducted.
The Purchaser is authorized to hold Deposit Liabilities insured by the SAIF.
3.02 No Violation. Neither the execution and delivery of this Agreement nor the
consummation of the Transaction as contemplated by this Agreement will violate
or conflict with: (i) the Charter or the Bylaws of the Purchaser; (ii) any
provision of any agreement or any other restriction of any kind to which the
Purchaser is a party to or by which the Purchaser is bound; or (iii) any
statute, law, decree, regulation or order of any governmental authority known to
the Purchaser, once the governmental consents referred to in this Agreement are
obtained, or will result in a default under, or cause the acceleration of the
maturity of, any obligation or loan to which the Purchaser is a party.
3.03 Corporate Authority. The execution and delivery of this Agreement, and the
consummation of the Transaction have been duly authorized by the Board of
Directors of the Purchaser. No further corporate authorization on the part of
the Purchaser is necessary to consummate the Transaction.
3.04 No Litigation. There is no action, suit, proceeding, inquiry or
investigation, at law or in equity, or before any court, public board or body
pending, or to the knowledge of the Purchaser threatened, against the Purchaser;
wherein an unfavorable decision, ruling or finding would materially and
adversely affect the Transaction contemplated by this Agreement or adversely
affect the validity or enforceability of this Agreement or any document
necessary to consummate the Transactions contemplated herein or any approval,
consent or permission required to be obtained by the Purchaser hereunder.
3.05 Disclosure. Neither this Agreement nor any schedule, exhibit, certificate
or other document furnished or to be furnished by the Purchaser on the Effective
Date contains or will contain any untrue statement of a material fact or omits
or will omit a material fact necessary in order to make the statements contained
therein not misleading.
ARTICLE IV
CONDUCT OF BUSINESS PENDING THE EFFECTIVE DATE
4.01 Conduct of Business. Pending the Effective Date, and except
as otherwise consented to by the Purchaser:
(a) The Seller will carry on the business of the Branches diligently and
substantially in the same manner as on the date hereof, and the Seller will not,
with regard to the Branches, engage in any one or more activities or
transactions which shall be
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outside of the ordinary course of the business of the Branches as conducted as
of the date hereof, except for activities or transactions contemplated by this
Agreement;
(b) The Seller will use its best efforts to preserve the business
operations as are presently conducted at the Branches. Seller shall maintain in
effect the current staffing levels at the Branches from the date of the
Agreement to the Closing Date, including the replacement hiring of personnel,
with the prior approval of the Purchaser, which approval shall not be
unreasonably withheld. The Seller further agrees to use its best efforts to
preserve for the Purchaser the goodwill of its customers and others having
relations with the business normally conducted at the Branches, and to cooperate
with and assist the Purchaser in assuring the orderly transition of such
business from the Seller to the Purchaser. Nothing in this paragraph shall be
construed as requiring the Seller to engage in any activities or efforts outside
of the ordinary course of business as presently conducted.
(c) Seller shall not increase the wages of any employee of the Branches
other than in accordance with the salary budget guidelines presently in effect
as included at Schedule 4.01(c).
(d) Seller shall not materially alter the products or services presently
offered at the Branches or materially alter the pricing policy applicable to
such products without prior notice to the Purchaser.
(e) Seller shall maintain in effect through the Closing Date all property,
liability, fire and casualty insurances in effect as of the date of the
Agreement with regard to the Branches, including the structures, leasehold
improvements and personal property.
ARTICLE V
OBLIGATIONS OF THE PARTIES PRIOR TO AND AFTER EFFECTIVE DATE
5.01 Full Access. The Seller shall afford to the officers and authorized
representatives of the Purchaser access to properties, books and records
pertaining to the Branches in order that the Purchaser may have full opportunity
to make such reasonable investigations at such reasonable times as it shall
desire of the affairs of the Seller relating to the Branches, and the officers
of the Seller will furnish the Purchaser with such additional financial and
operating data and other information as to its business and properties at the
Branches as the Purchaser shall from time to time reasonably request and as
shall be available, including, without limitations, information required for
inclusion in all governmental applications necessary to effect the Transaction.
Nothing in this Section 5.01 shall be deemed to require the Seller to breach any
obligation of confidentiality.
5.02 Requirements of Regulatory Authorities. The Seller shall, as
soon as is practicable, notify the proper regulatory authorities of
its intent to terminate operation of the Branches and to consummate
this Transaction and thereafter shall: (i) comply with the normal
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and usual requirements imposed by such authority applicable to effectuate this
Transaction; and (ii) use its good faith efforts to obtain any required approval
of such regulatory authority to transfer the operations of the Branches.
5.03 Regulatory Application to Effect the Purchase of Assets and Assumption of
Liabilities. The Purchaser shall prepare and file, with the assistance of the
Seller, as soon as practicable, but in no event later than 30 days following the
date of this Agreement, an application, as required by law, to the appropriate
Federal and/or State regulatory authorities for approval to effect this
Transaction, and the Parties hereto shall, if required by applicable statute or
regulation, publish appropriate notice of the Transaction or related regulatory
application. The Parties agree to use their good faith efforts to obtain such
approval in a diligent manner and on a priority basis, and the Purchaser further
agrees to prepare the application in a diligent manner and on a priority basis.
The Parties shall each pay the $4,000 fee for each institution associated with
the OTS Application.
5.04 Further Assurance. Both Parties hereby agree to execute and to deliver such
instruments and take such other actions as the other party may reasonably
require in order to carry out the intent of this Agreement, and the Seller
agrees to give such bills of sale, acknowledgments and other instruments or
conveyance and transfer as, in the reasonable judgment of the Purchaser, shall
be necessary and appropriate to vest in the Purchaser legal and equitable title
to the assets of the Seller being sold hereunder, free and clear of all liens
and encumbrances; and that Seller shall assist Purchaser as requested and
required for Purchaser to perfect any liens or security interest associated with
any assets or collateral being transferred. Except as otherwise provided by the
terms of the Agreement, the Purchaser shall be responsible for the costs of
examining title to real property, land surveys, recording of documents, and
similar activities associated with the transfer of the real property.
5.05 Right to Intervene. In the event that any litigation is instituted against
the Purchaser under or in connection with this Agreement, the Seller shall have
the right in its sole discretion to intervene in such litigation and the
Purchaser does hereby consent to such intervention.
5.06 Customer Data.
Seller shall provide Purchaser with such data processing computer disks or
tapes encoded with information pertaining to deposit accounts and loans of the
Branches' customers as Purchaser shall request, or authorizations of Seller for
Purchaser to access same from the service bureau maintaining such information as
of the Closing Date. Each Party shall pay its own expenses associated with the
data processing conversion of the customer records to be
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transferred. Seller shall provide Purchaser with reasonably available
statistical data related to the Branches prior to the Closing Date upon request.
5.07 Press Releases. Purchaser and Seller will cooperate and
coordinate in the issuance of any press releases regarding the
Transaction.
5.08 Allocation of Purchase Price.
The purchase price paid and liabilities assumed by the Purchaser pursuant
to this Agreement shall be allocated in accordance with Section 1060 of the
Internal Revenue Code of 1986, as amended ("Code"). The Seller and the Purchaser
shall cooperate to comply with all substantive and procedural requirements of
Section 1060 of the Code and any regulations thereunder.
ARTICLE VI
CONDITIONS TO PURCHASER'S OBLIGATIONS
Each and every obligation of the Purchaser under the Agreement to be performed
on or before the Effective Date shall be subject to the satisfaction, on or
before the Effective Date, of the following conditions:
6.01 Representations and Warranties True: Obligations Performed.
(a) The representations and warranties made by the Seller in this
Agreement shall be true at and as of the Effective Date as though such
representations and warranties were made at and as of such time, except for any
changes permitted by the terms hereof or consented to by the Purchaser.
(b) The Seller shall have performed and complied with in all material
respects all obligations and agreements required by this Agreement to be
performed or complied with by it prior to or at the Effective Date.
(c) From the date of this Agreement until the Effective Date, there shall
have been no material adverse change, not cured, in the business or material
conditions (financial or otherwise) of the Branches, except for any changes
permitted by the terms, hereof, or consented to by the Purchaser.
(d) On the Effective Date, no action, suit or proceeding shall be pending
or threatened: (i) against the Seller which might materially and adversely
affect the business, properties and assets of the Branches; or (ii) against
either party which seeks to prohibit consummation of this transaction.
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(e) The Seller shall have delivered to the Purchaser a certificate of its
President, dated the Effective Date, certifying to the fulfillment of all the
conditions contained at this Section 6.01.
(f) The Purchaser and the Seller shall have received from the
appropriate regulatory authorities unconditional approval: (i) to
effect this transaction; and (ii) for the Purchaser to operate the
Branches.
(g) The Purchaser shall have received an opinion of counsel or a
certification from the President for the Seller, dated the Effective Date, to
the effect that (i) the Seller has been duly organized and is validly existing,
(ii) the Seller has duly authorized the execution and delivery of this Agreement
and the performance by the Seller of each of its obligations hereunder, (iii)
this Agreement and the instruments delivered by the Seller pursuant hereto are
valid, binding and enforceable against the Seller in accordance with their
respective terms (subject only to applicable bankruptcy laws and principles of
equity), (iv) any consents, approvals, permissions or authorizations required to
be obtained under any law, rule or regulation from any governmental body, agency
or authority for the consummation by the Seller of its obligations hereunder and
the transactions contemplated by the Seller herein have been obtained, and (v)
such party is unaware of any action, suit, proceeding, inquiry, or
investigation, at law or in equity, or before any court, public board or body,
pending or threatened, against the Seller wherein an unfavorable decision,
ruling or finding would materially and adversely affect the consummation,
validity or enforceability of the transactions contemplated hereby.
(h) From the date of this Agreement until the Closing Date, there shall
have occurred no material damage to or destruction of the Branches or the
leasehold improvements thereto.
ARTICLE VII
CONDITIONS TO THE SELLER'S OBLIGATIONS
Each and every obligation of the Seller under this Agreement to be performed on
or before the Effective Date shall be subject to the satisfaction, on or before
the Effective Date, of the following conditions:
7.01 Representations and Warranties True: Obligations Performed.
(a) The representations and warranties made by the Purchaser in this
Agreement shall be true at and as of the Effective Date as though such
representations and warranties were made at and as of such time, except for any
changes permitted by the terms hereof or consented to by the Seller.
(b) The Purchaser shall have performed and complied with in all material
respects all obligations and agreements required by this Agreement to be
performed or complied with by it prior to or at the Effective Date.
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(c) The Purchaser shall have delivered to the Seller a certificate of its
President, dated the Effective Date, certifying to the fulfillment of both of
the foregoing conditions.
(d) The Seller shall have received an opinion of counsel or a
certification from the President for the Purchaser, dated the Effective Date, to
the effect that (i) the Purchaser has been duly organized and is validly
existing, (ii) the Purchaser has duly authorized the execution and delivery of
this Agreement and the performance by the Purchaser of each of its respective
obligations hereunder, (iii) this Agreement and the instruments delivered by the
Purchaser pursuant hereto are valid, binding and enforceable against the
Purchaser in accordance with their respective terms (subject only to applicable
bankruptcy laws and principles of equity), (iv) other than the approval of
agencies regulating the Purchaser to buy the assets and assume the liabilities
pursuant to this Agreement and to establish the Branches contemplated hereby, no
other consents, approvals, permissions or authorizations are required to be
obtained under any law, rule or regulation from any governmental body, agency or
authority for the consummation by the Purchaser of its obligations hereunder and
the transactions contemplated by the Purchaser herein, and the aforesaid
approvals have been obtained and are in full force and effect, and (v) such
party is unaware of any action, suit, proceeding, inquiry, or investigation at
law or in equity, or before any court, public board or body, pending or
threatened, against the Purchaser wherein an unfavorable decision, ruling or
finding would materially and adversely affect any such approval, consent or
permission or the consummation, validity or enforceability or the transactions
contemplated hereby.
ARTICLE VIII
CONDITIONS TO THE SELLER'S AND THE PURCHASER'S OBLIGATIONS
Each and every obligation of the Parties under this Agreement to be performed on
or before the Effective Date shall be subject to the satisfaction, on or before
the Effective Date, of the following conditions:
8.01 Approval of Governmental Authorities. The approval by the appropriate
regulatory authorities shall have been obtained; the consent of the appropriate
regulatory authorities to the establishment and operation by the Purchaser of a
branch bank at the present location of each Branch shall have been obtained; and
termination of branch operations conducted by the Seller at each Branch location
and the Seller's consummation of this sale shall not have been objected to by
the appropriate regulatory authority.
8.02 Consents to Assignment of Leases. The landlord under any real estate lease
to be assigned hereunder shall have consented to the Seller's assignment of such
lease to the Purchaser on terms substantially similar to the existing terms
between the Seller and
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the landlord. Further, landlord shall furnish the Purchaser with a statement of
the balance of any security deposits held under such lease as of the Closing
Date, giving effect to all deductions that are deemed necessary by the landlord
following an inspection of the property as of the Closing Date.
ARTICLE IX
TERMINATION
9.01 Methods of Termination. This Agreement may be terminated at
any time, but not later than the Effective Date:
(a) By mutual agreement of the Boards of Directors of the
Purchaser and the Seller; or
(b) By the Board of Directors of the Purchaser if any of the conditions
provided for in Article VI of this Agreement shall not have been met or waived
in writing by the Purchaser; or
(c) By the Board of Directors of the Seller if any of the conditions
provided for in Article VII of this Agreement shall not have been met or waived
in writing by the Seller; or
(d) By the Board of Directors of either party if any of the
conditions provided for in Article VIII shall not have been met; or
(e) By the Board of Directors of the Seller or the Purchaser if the
Effective Date has not occurred on or before November 30, 1996.
9.02 Procedure Upon Termination. In the event of termination pursuant to Section
9.01 hereof, written notice thereof shall be given to the other party, and this
Agreement shall terminate immediately upon receipt of such notice, unless an
extension is consented to by the party or Parties having the right to terminate.
If this Agreement is terminated as provided herein:
(a) Each party will redeliver all documents, work papers and other
materials of the party relating to this transaction, whether so obtained before
or after the execution hereof, to the party furnishing the same; and
(b) All information received by either party hereto with respect to the
business of the other party (other than information which is a matter of public
knowledge or which has heretofore been or is hereafter published in any
publication for public distribution or filed as public information with any
governmental authority) shall not at any time be used for business advantage by
such party or disclosed by such party to third persons to the detriment of the
party furnishing such information or if otherwise prohibited by state or federal
law; and
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(c) Nothing contained in this Article IX shall be deemed to excuse either
Party for a breach of any of its obligations or agreements undertaken or made in
this Agreement.
9.03 Payment of Expenses and Retention of Deposit. If this Agreement is
terminated by the Purchaser for any reason other than the compliance with any of
the conditions provided for in Articles VI or VIII of this Agreement not having
been met or waived in writing by the Purchaser or failure to satisfy the
conditions of Sections 1.05 (j),(l) and (m), then the Seller shall retain the
Deposit plus all accrued interest thereon.
ARTICLE X
MISCELLANEOUS PROVISIONS
10.01 Entire Agreement; Amendment and Modification. This Agreement and the
exhibits and schedules hereto shall constitute the entire agreement of the
Parties. The Parties hereto, by mutual consent of their respective duly
authorized officers, may amend, modify and supplement this Agreement in such
manner as may be agreed upon by them in writing.
10.02 Assignment. This Agreement and all of the provisions hereof shall be
binding upon, and 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.
10.03 Counterparts. This Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
10.04 Headings. The headings of the Sections and Articles of this Agreement are
inserted for convenience only and shall not constitute a part hereof.
10.05 Survival of Representations and Warranties. The respective representations
and warranties of the Parties hereto contained herein shall survive for a period
of one year after the Effective Date, unless stated otherwise herein.
10.06 Payment of Expenses. Each party hereto shall pay for its own expenses and
costs in connection with the carrying out of this Agreement except as stated
otherwise herein. Each Party shall pay the applicable $4,000 fee to the OTS as
the OTS application fee related to the Transaction.
10.07 Consent to Arbitration. Any controversy or claim arising out
of or relating to this Agreement, or the breach thereof, shall be
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settled by arbitration in accordance with the rules for commercial arbitration
then in effect at the district office of the American Arbitration Association
("AAA") nearest to the home office of the party initiating said arbitration
proceeding, and judgment upon the award rendered may be entered in any court
having jurisdiction thereof, except to the extent that the Parties may otherwise
reach a mutual settlement of such issue.
10.08 Governing Law. This Agreement shall be governed by the laws
of the State of New Jersey except to the extent Federal Law
controls.
10.09 Public Disclosure: Advertising. Except as herein provided to the contrary
or as required by law or otherwise herein agreed, neither Party shall make any
public disclosure of any Transaction to be consummated hereunder prior to the
Effective Date. Any press release, public notice or notice to local officials
regarding this Agreement or the transactions contemplated herein to be made
prior to the Effective Date shall be approved in writing by all Parties prior to
its release; the approval of any party shall not be unreasonably withheld.
10.10 Deposit Account Servicing. Purchaser shall, as of the Effective Date, have
converted, by the close of the business day, all of the computerized deposit
account information, onto the Purchaser's data processing system.
10.11 Addresses for Notice, etc. All notices, requests, demands and other
communications provided for hereunder and under the related documents shall be
in writing (including telegraphic communications) and mailed (by registered or
certified mail) or telegraphed or delivered to the applicable party at the
addresses indicated below.
If to the Seller: Michael W. Young President
Cenlar Federal Savings Bank
425 Phillips Boulevard
Trenton, New Jersey 08628
With a copy to: Leonard G. Gleason, Esq.
Cenlar Federal Savings Bank
425 Phillips Boulevard
Trenton, New Jersey 08628
If to the Purchaser: John R. Stranford, President
Third Federal Savings Bank
3 Penns Trail
Newtown, Pennsylvania 18940
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With a copy to: Richard Fisch
Malizia, Spidi, Sloane & Fisch, P.C.
1301 K Street, N.W.
Suite 700 East
Washington, D.C. 20005
or, as to each party, at such other address as shall be designated by such party
in a written notice to each other party complying as to delivery with the terms
of this Section.
EXHIBIT 99.2
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TF FINANCIAL NEWS
CORPORATION RELEASE
3 PENNS TRAIL
NEWTOWN, PENNSYLVANIA 18940
For verification, contact: John R. Stranford, President and CEO
Bill Niemczura, Senior Vice President
and Chief Executive Officer
Phone : (215) 579-4000
Fa: (215) 579-4748
For immediate release June 7, 1996
- ------------------------------------------------------------------------------
TF FINANCIAL CORPORATION ANNOUNCES
ACQUISITION OF CENLAR BRANCH OFFICES IN NEW JERSEY
Newtown, PA, June 7, 1996 - TF Financial Corporation (NASDAQ:THRD), The parent
holding company for Third Federal Savings Bank, a federally chartered savings
bank ("Third Federal") announced today that they have entered into an agreement
with Cenlar Federal Savings Bank, Trenton, New Jersey ("Cenlar") to acquire the
3 branches of Cenlar located in Ewing, Hamilton Square and Princeton, New Jersey
with approximately $143 million in deposits. The terms of the transaction
include a premium payment of approximately $9.3 million. John R. Stranford,
President of Third Federal, commented that: "Expansion of Third Federal's
operations into Mercer County, New Jersey, is an exciting opportunity for us and
a natural extension of our marketplace. For many years we have had customers and
employees on both sides of the Delaware River. Now we are positioned to better
serve them. We will be counting on Cenlar's branch employees to join the Third
Federal team and make the customer transition a smooth one."
As of March 31, 1996, Third Federal held approximately $338 million in deposits.
All deposits of Third Federal are insured up to applicable limits by the Federal
Deposit Insurance Corporation ("FDIC"). TF Financial Corporation is the holding
company for Third Federal, which presently operates 11 full-service offices in
Philadelphia and Bucks Counties, Pennsylvania. The Company's stock is traded
under the symbol "THRD" on the NASDAQ National Market System.
