EXHIBIT 2.1
PURCHASE AND ASSUMPTION AGREEMENT
Among
Royal Bank of Pennsylvania
Crusader Holding Corporation
Crusader Savings Bank, F.S.B.
and
Asset Investment Corporation
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS..................................................................................................1
SECTION 1.1 Definitions................................................................................1
ARTICLE II
SALE AND PURCHASE OF ASSETS AND ASSUMPTION OF
LIABILITIES AND OBLIGATIONS..................................................................................9
SECTION 2.1 Purchase and Sale of Assets................................................................9
SECTION 2.2 Assumed Liabilities........................................................................9
SECTION 2.3 Purchase Price............................................................................10
SECTION 2.4 Payment at Closing........................................................................10
SECTION 2.5 Adjustment Loans..........................................................................10
SECTION 2.6 Due Diligence Reserve.....................................................................10
SECTION 2.7 Due Diligence Reserve Adjustments; Payment................................................11
SECTION 2.8 Settlement Date Adjustments...............................................................11
SECTION 2.9 Allocation of Purchase Price..............................................................12
SECTION 2.10 Transfer Taxes............................................................................13
SECTION 2.11 Casualty..................................................................................13
SECTION 2.12 Data Processing Services..................................................................13
SECTION 2.13 Certain Transitional Matters..............................................................13
SECTION 2.14 XXX.......................................................................................14
SECTION 2.15 Stop Payment Items........................................................................14
SECTION 2.16 Record Retention..........................................................................15
SECTION 2.17 Bank Premises.............................................................................15
SECTION 2.18 Interest Reporting........................................................................15
SECTION 2.19 Withholding...............................................................................15
SECTION 2.20 Further Assurances........................................................................16
ARTICLE III
CLOSING.....................................................................................................16
SECTION 3.1 Closing Date..............................................................................16
SECTION 3.2 Seller's Deliveries.......................................................................17
SECTION 3.3 Buyer's Deliveries........................................................................18
ARTICLE IV
REPRESENTATIONS AND WARRANTIES..............................................................................19
SECTION 4.1 Representations and Warranties of Seller..................................................19
SECTION 4.2 Representations and Warranties of Buyer...................................................40
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ARTICLE V
COVENANTS............................................................................................................42
SECTION 5.1 Conduct of Seller's Businesses Prior to the Effective Time................................42
SECTION 5.2 Forbearance by Seller.....................................................................42
SECTION 5.3 Cooperation...............................................................................44
SECTION 5.4 Regulatory Approvals......................................................................45
SECTION 5.5 Acquisition Proposals.....................................................................45
SECTION 5.6 Shareholder Approvals.....................................................................45
SECTION 5.7 Proxy Preparation and Disclosure..........................................................46
SECTION 5.8 Employees.................................................................................46
SECTION 5.9 Access to and Information Concerning Properties, Records, Etc.............................48
SECTION 5.10 Facilities Consents.......................................................................49
SECTION 5.11 Certain Filings, Consents and Arrangements................................................49
SECTION 5.12 Additional Agreements.....................................................................50
SECTION 5.13 Notification of Certain Matters...........................................................50
SECTION 5.14 Insurance.................................................................................50
SECTION 5.15 Margin Account............................................................................50
SECTION 5.16 Termination of Payday Lending Business....................................................51
SECTION 5.17 Release of Rights.........................................................................51
SECTION 5.18 Update Schedules..........................................................................51
SECTION 5.19 Tax Issues................................................................................51
SECTION 5.20 Liability Transfers.......................................................................52
SECTION 5.21 Trademarks, etc...........................................................................52
SECTION 5.22 WARN Act Notices..........................................................................53
SECTION 5.23 Agreed Upon Procedures....................................................................53
ARTICLE VI
CONDITIONS..................................................................................................53
SECTION 6.1 Common Conditions.........................................................................53
SECTION 6.2 Conditions Precedent to Obligations of Buyer..............................................54
SECTION 6.3 Conditions Precedent to Obligations of Seller.............................................55
ARTICLE VII
TERMINATION OF AGREEMENT....................................................................................56
SECTION 7.1 Termination by the Parties................................................................56
SECTION 7.2 Effect of Termination.....................................................................57
SECTION 7.3 Expenses..................................................................................57
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ARTICLE VIII
INDEMNIFICATION......................................................................................................58
SECTION 8.1 Indemnification...........................................................................58
SECTION 8.2 Indemnification Procedures................................................................59
SECTION 8.3 Limitations on Liability..................................................................60
ARTICLE IX
MISCELLANEOUS PROVISIONS....................................................................................61
SECTION 9.1 Effect of Disclosure......................................................................61
SECTION 9.2 Entire Agreement..........................................................................61
SECTION 9.3 Amendments................................................................................61
SECTION 9.4 Waiver or Extension.......................................................................61
SECTION 9.5 Survival..................................................................................61
SECTION 9.6 Assignment................................................................................62
SECTION 9.7 Public Announcements; Nondisclosure.......................................................62
SECTION 9.8 Brokers...................................................................................62
SECTION 9.9 Payment of Expenses.......................................................................62
SECTION 9.10 No Third Party Beneficiaries..............................................................62
SECTION 9.11 Bulk Transfer Laws........................................................................63
SECTION 9.12 Addresses for Notice, etc.................................................................63
SECTION 9.13 Counterparts..............................................................................64
SECTION 9.14 Headings..................................................................................64
SECTION 9.15 Governing Law.............................................................................64
SECTION 9.16 Severability..............................................................................64
SECTION 9.17 Waiver, Delay, etc........................................................................64
SCHEDULES, ANNEXES AND EXHIBITS
SCHEDULE A Excluded Assets
SCHEDULE B Contracts and Personal Property Leases
SCHEDULE C Leases
SCHEDULE D Loans
SCHEDULE E Adjustment Loans
SCHEDULE F Additional Liabilities
SCHEDULE G Legal Actions
ANNEX 2.9(a) Allocation of Purchase Price
ANNEX 4.1 Seller's Disclosures
ANNEX 4.2 Buyer's Disclosures
ANNEX 5.2(j) Investment Securities Available for Sale
ANNEX 5.2(r) Adjustment Loans Available for Sale
ANNEX 5.8 Severance Payments to Seller's Employees
ANNEX 5.17 Crusader Servicing Corporation Shareholders
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EXHIBIT I Xxxx of Sale
EXHIBIT II Assignment and Assumption Agreement
EXHIBIT III Lease Assignments
EXHIBIT IV Form of Voting Agreement
EXHIBIT V Use and Occupancy Agreement
EXHIBIT VI Seller's Officer's Certificate
EXHIBIT VII Tax Opinion
EXHIBIT VIII Buyer's Officer's Certificate
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PURCHASE AND ASSUMPTION AGREEMENT
THIS AGREEMENT dated as of March 12, 2001, is by and among Royal Bank
of Pennsylvania, a Pennsylvania chartered bank having its principal office in
Narberth, Pennsylvania ("Buyer"), Crusader Holding Corporation, a Pennsylvania
corporation and thrift holding company ("Crusader"), Crusader Savings Bank,
F.S.B., a federally chartered savings bank and wholly-owned subsidiary of
Crusader, having its principal office in Philadelphia, Pennsylvania ("Bank") and
Asset Investment Corporation, a Delaware corporation and wholly-owned subsidiary
of Bank ("AIC"). Crusader, Bank and AIC are hereinafter referred to collectively
as "Seller".
WITNESSETH:
WHEREAS, Seller desires to sell and Buyer desires to acquire, certain
assets of Seller in accordance with the terms and provisions of this Agreement;
and
WHEREAS, Seller desires to transfer to Buyer and Buyer desires to
assume from Seller certain deposits and other liabilities associated with Seller
in accordance with the terms and provisions of this Agreement.
WHEREAS, concurrently with the execution and delivery of this Agreement
and as a condition and inducement to Buyer's willingness to enter into this
Agreement, certain shareholders and members of the Board of Directors of Seller
shall each execute a Voting Agreement, substantially in the form attached hereto
as Exhibit IV.
NOW, THEREFORE, for and in consideration of the premises and the mutual
promises and covenants contained above and herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, and
intending to be legally bound hereby, Seller and Buyer covenant and agree as
follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 Definitions.
The terms defined in this Section 1.1 have the meanings herein
specified, unless the context clearly requires otherwise.
"Acquisition Proposal" is defined in Section 5.5.
"Adjustment Loan(s)" is defined in Section 2.5.
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"Adjustment Loans Schedule" is defined in Section 2.5.
"Adjustment Payment" is defined in Section 2.7.
"Agreement" means this Purchase and Assumption Agreement.
"AIC" means Asset Investment Corporation.
"Allocation Purchase Price" is defined in Section 2.9.
"Assets" means the assets of Seller as listed on the Seller's
Preliminary Closing Trial Balance and as subsequently adjusted in the ordinary
course of business on Seller's Final Closing Trial Balance; and Seller's right,
title and interest in its intangible assets, including, without limitation,
intellectual property, choses in action and the Crusader Savings Bank corporate
name, including all trade names, fictitious names, logos, service marks and
trademarks, and the goodwill of the business symbolized thereby.
"Assignment and Assumption Agreement" is defined in Section 3.2.
"Assumed Liabilities" is defined in Section 2.2.
"Bank" means Crusader Savings Bank, F.S.B.
"Banking Department" means the Pennsylvania Department of Banking.
"BankPhiladelphia Loan" means the loan to Seller from BankPhiladelphia
pursuant to that certain agreement titled "Loan Agreement", dated March 31,
2000, and as further amended on June 16, 2000.
"Xxxx of Sale" is defined in Section 3.2.
"Book Value" means the amount at which an asset or liability is stated
on the applicable Trial Balance of Seller.
"Business Day" means any day that is not a Saturday, a Sunday or a day
on which banks are required or authorized by law to be closed in the
Commonwealth of Pennsylvania.
"Buyer" means Royal Bank of Pennsylvania.
"Buyer Material Adverse Effect" means any circumstance, change in or
effect that has an adverse effect to the business, operation, results of
operations or the financial condition of the Buyer and its subsidiaries taken as
a whole; provided, however, that "Buyer Material Adverse Effect" shall
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not include any such effect directly or indirectly arising out of or
attributable to (A) any action taken or to be taken pursuant to the Agreement or
(B) changes in general economic conditions, including, without limitation,
changes in interest rates.
"Buyer Regulatory Agencies" means the Federal Reserve Board, the
Federal Deposit Insurance Corporation and the Pennsylvania Department of
Banking.
"Castor Avenue Facility" means the premises of Seller located at 0000
Xxxxxx Xxxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx, being a branch of Seller.
"Closing" and "Closing Date" are defined in Section 3.1.
"Code" means the Internal Revenue Code of 1986, as amended.
"CRA" means the Community Reinvestment Act.
"Crusader" means Crusader Holding Corporation.
"Crusader Shareholders Meeting" is defined in Section 5.6.
"Damages" means any and all losses, costs, claims, liabilities, fines,
penalties and expenses, including without limitation, (i) interest which may be
imposed in connection therewith, (ii) court costs and reasonable fees and
disbursements of counsel and consultants, and (iii) reasonable costs and
expenses incurred in enforcing any right of indemnification against either
party.
"Department of Banking" means the Pennsylvania Department of Banking.
"Depositors" means account holders having Deposits with Seller.
"Deposits" means any and all deposit liabilities attributable to and
booked by Seller, together with accrued interest thereon as of the Effective
Time, including, without limitation, demand deposits, savings deposits, checking
accounts, certificates of deposit and individual retirement account ("XXX")
deposits (subject to customer consent as provided in Section 2.14).
"Due Diligence Reserve" is defined in Section 2.6.
"Effective Time" means the close of business on the Closing Date.
"Employee Pension Plan" means any employee pension plan for which
Seller serves as trustee, including, but no limited to, employee pension benefit
plans as defined in Section 3(2) of ERISA, retirement plans qualified under the
requirements of Section 401(a) of the Code,
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nonqualified deferred compensation plans, excess benefit plans and supplemental
executive retirement plans.
"Employee Pension Plan Deposit" means a Deposit in an account owned by
an Employee Pension Plan.
"Environmental Laws" means any applicable federal, state or local law,
statute, ordinance, rule, regulation, order or notice requirement pertaining to
(a) the condition or protection of air, groundwater, surface water, soil, or
other environmental media, (b) the environment, including natural resources or
any activity which affects the environment, or (c) the regulation of any
pollutants, contaminants, waste, substances (whether or not hazardous or toxic),
such as the Comprehensive Environmental Response Compensation and Liability Act
(42 U.S.C. Section 9601 et seq.), the Hazardous Materials Transportation Act (49
U.S.C. Section 1801 et seq.), the Resource Conservation and Recovery Act (42
U.S. C. Section 6901 et seq.), the Clean Water Act (33 U.S.C. 1251 et seq.), the
Clean Air Act (42 U.S.C. Section 7401 et seq.), the Toxic Substances Control Act
(17 U.S.C. Section 2601 et seq.), the Safe Drinking Water Act (42 U.S.C. Section
201 and Section 300f et seq.), the Rivers and Harbors Act 133 U.S.C. Section 401
et seq.), the Oil Pollution Act (33 U.S.C. Section 2701 et seq.), and analogous
state and local provisions, as any of the foregoing may have been amended or
supplemented from time to time.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Excluded Assets" is defined in Section 2.1.
"Excluded Subsidiaries" means Crusader Mortgage Corporation, Crusader
Mortgage Corporation of Delaware and National Chinese Mortgage Corporation.
"Facilities" means the Walnut Branch Facility, the Walnut Street
Facility, the Castor Avenue Facility and the Penn Center Facility.
"FDIC" means the Federal Deposit Insurance Corporation.
"Federal Funds Effective Rate" means the weighted average of the rates
on overnight federal funds transactions arranged on such day by Federal Fund s
Brokers as computed and released by the Federal Reserve Bank of New York as the
"Federal Funds Effective Rate."
"Federal Reserve Board" means the Board of Governors of the Federal
Reserve System.
"FIRPTA Affidavits" means affidavits pursuant to Section 1445 of the
Code certifying to the non-foreign entity status of Seller.
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"GAAP" means generally accepted accounting principles as consistently
applied for financial reporting purposes. For purposes of this definition, Buyer
agrees that, to the extent that GAAP allows for a choice of accounting
practices, Seller shall keep its books and records in accordance with its past
practices, as long as those practices are and remain in accordance with GAAP.
"Hazardous Substance" means any substance presently listed, defined,
designated or classified as hazardous, toxic, radioactive or dangerous or
otherwise regulated under any Environmental Law, whether by type or by quantity,
including any material containing any such substance as a component. Hazardous
Substances include without limitation petroleum or any derivative or by-product
thereof, asbestos, radioactive material, and polychlorinated biphenyls.
"Hired Employee" is defined in Section 5.8.
"Indemnified Taxes" is defined in Section 5.19
"Investment Portfolio" means, without limitation, Seller's right, title
and interest in all securities, including, without limitation, securities
available for sale, securities held for investment or held to maturity,
financial derivatives, interest rate swaps, off-balance-sheet contracts,
options, interest rate caps and floors, mortgage-backed securities and deposit
withdrawal options.
"XXX" means an individual retirement account as specified in Section
408 and 408A of the Code.
"IRS" means the Internal Revenue Service.
"Xxxxx Plan" means an Employee Pension Plan covering self-employed
individuals.
"Landlord Consents" is defined in Section 3.2.
"Lease Assignments" is defined in Section 3.2.
"Leases" means the lease agreements for the Facilities listed on
Schedule C hereto, or such agreements as may be amended, renewed or extended in
the ordinary course of business.
"Liability" means the Seller's obligation to pay, perform or discharge
a debt or an obligation.
"Loans" means, without limitation, the loan accounts, including the
unfunded portion of all outstanding lines of credit and loan commitments,
attributable to and booked by Seller or any subsidiary of Seller as of the date
of this Agreement, all as listed on Schedule D with such changes as are made in
accordance with this Agreement.
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"Material Adverse Effect" means any circumstance, change in or effect
on the Purchased Assets or the Assumed Liabilities that is materially adverse to
the business, operations, results of operations or the financial condition of
Seller taken as a whole; provided, however, that "Material Adverse Effect" shall
not include any change in or effect on Seller directly or indirectly arising out
of or attributable to (A) any action taken or to be taken pursuant to the
Agreement or (B) changes in general economic conditions, including, without
limitation, changes in interest rates.
"Material Contract" means (A) "material contract" as such term is
defined in Item 601(b)(10) of Regulation S-K promulgated by the SEC; or (B) any
agreement not terminable on thirty (30) days or less notice involving the
payment of more than $25,000 per annum, in the case of any such agreement.
"OREO" means other real estate owned, representing properties acquired
through foreclosure of loans or secured property liens.
"OTS" means the Office of Thrift Supervision.
"Payday Lending Business" is defined in Section 5.16.
"Penn Center Facility" means the premises of Seller located at 0 Xxxx
Xxxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx.
"Preliminary Settlement Amount" is defined in Section 2.4.
"Proceeding" is defined in Section 5.19.
"Proxy Statement" is defined in Section 5.7.
"Purchase" means the purchase of the Purchased Assets and the
assumption of the Assumed Liabilities as contemplated in this Agreement.
"Purchase Price" is defined in Section 2.3 and adjusted in Section 2.8.
"Purchase Reserve" is defined in Section 2.6.
"Purchased Assets" is defined in Section 2.1 and shall include the loan
due to Seller from USA Bancshares pursuant to that certain agreement titled Loan
Agreement, dated March 31, 2000, and as amended June 16, 2000, (the "USA
Bancshares Loan"), if, and only if, the outstanding principal balance of the USA
Bancshares Loan is less than the outstanding principal balance of the
BankPhiladelphia Loan assumed by Buyer pursuant to Section 2.2 (d). In the event
that the outstanding principal balance of the USA Bancshares Loan is greater
than the outstanding principal
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balance of the BankPhiladelphia Loan assumed by Buyer pursuant to Section
2.2(d), then the USA Bancshares Loan shall be an Excluded Asset.
"Rehabilitation Credit" means the tax credit allowed under Section 47
of the Code for the rehabilitation of historical and older buildings.
"Repurchase Agreement" means an agreement between two parties whereby
one party sells the other a security at a specified price with a commitment to
repurchase the security at a later date for another specified price.
"RESPA" is defined in Section 4.1(y).
"Royal" means Royal Bank of Pennsylvania.
"SAIF" means the Savings Associations Insurance Fund.
"SEC" means the United States Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Seller" means Crusader Savings Bank, F.S.B., Crusader Holding
Corporation, and the respective subsidiaries of each entity, excluding Crusader
Mortgage Corporation, Crusader Mortgage Corporation of Delaware and National
Chinese Mortgage.
"Seller's Final Closing Trial Balance" means the summary of the general
ledger accounts of Seller taken as of the Effective Time, as adjusted for
consolidating entries between affiliated parties.
"Seller's Preliminary Closing Trial Balance" means the summary of the
general ledger accounts of Seller taken as of the final day of the month
immediately preceding the Closing Date, as adjusted for consolidating entries
between affiliated parties.
"Seller's Knowledge" means the actual knowledge of any officer of
Seller holding the title of Executive or Senior Vice President or higher, but
not to exclude any internal auditor, compliance officer or individual with line
responsibility for the physical plant of the Facilities and OREO properties.
"Seller Loan Portfolio Properties and Other Properties Owned" means
those properties serving as collateral for Loans in Seller's loan portfolio, or
properties owned or operated by Seller (including, without limitation, in a
fiduciary capacity).
"Seller Regulatory Agencies" means the Office of Thrift Supervision,
the Federal Deposit Insurance Corporation, and the Securities and Exchange
Commission.
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"Servicing" means upgrading the Loan classification, including, but not
limited to, the correction of any document deficiency in the Loan file.
"Settlement Date" is defined in Section 2.8.
"Software" is defined in Section 4.1(qq).
"State Regulator" means any state banking department or commission.
"Sublease Agreement" is defined in Section 5.10.
"Third Party Claim" is defined in Section 8.2.
"Trial Balance" means the summary of the general ledger accounts of
Seller taken as of a specified date, as adjusted for consolidating entries
between affiliated parties.
"Trust Preferred Security" means a security representing an undivided
beneficial interest in the assets of a business trust, supported by a guarantee
to pay distributions on the security.
"USA Bancshares Loan" means the loan due to Seller from USA Bancshares
pursuant to that certain agreement titled Loan Agreement, dated March 31, 2000
and as amended June 16, 2000.
"Walnut Branch Facility" means the premises of Seller located at 0000
Xxxxxx Xxxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx, being the principal office of Seller.
"Walnut Street Facility" means the premises of Seller located at 0000
Xxxxxx Xxxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx.
"WARN Act" means the Worker Adjustment and Retaining Notification Act,
as amended (29 U.S.C.ss.2101, et seq.) and similar state and local laws,
regulations and other issuances.
"Withholding Obligation" is defined in Section 2.19.
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ARTICLE II
SALE AND PURCHASE OF ASSETS AND ASSUMPTION OF
LIABILITIES AND OBLIGATIONS
SECTION 2.1 Purchase and Sale of Assets.
Subject to the terms and conditions hereof, including without
limitation the assumption by Buyer of the Assumed Liabilities, as of the
Effective Time, Seller shall sell, convey, assign, transfer and deliver to
Buyer, and Buyer shall purchase and accept from Seller, all of Seller's right,
title and interest in, to and under the Assets of the Seller, excluding the
assets listed on Schedule A attached hereto (the "Excluded Assets")
(collectively the "Purchased Assets").
SECTION 2.2 Assumed Liabilities.
Subject to the terms and conditions of this Agreement, including,
without limitation, the transfer of the Purchased Assets to Buyer, on the
Closing Date, Buyer shall assume, and thereafter honor and fully and timely,
pay, perform and discharge when due, the following Liabilities of Seller and
shall perform all duties, responsibilities, and obligations of Seller under the
following, to the extent that such Liabilities, duties, responsibilities and
obligations arise or accrue after the Effective Time (collectively, the "Assumed
Liabilities"):
(a) the Deposits;
(b) advances from Federal Home Loan Bank pursuant to agreements
with the Federal Home Loan Bank of Pittsburgh;
(c) commitments to purchase securities pursuant to Repurchase
Agreements;
(d) the obligations of Seller to BankPhiladelphia under the
BankPhiladelphia Loan pursuant to that certain agreement
titled "Loan Agreement", dated March 31, 2000, and as further
amended on June 16, 2000; provided, however, that in the event
that Buyer does not purchase the USA Bancshares Loan as a
Purchased Asset, as provided herein, then Buyer shall not
assume the obligations of Seller under the BankPhiladelphia
Loan and said BankPhiladelphia Loan shall not be an Assumed
Liability hereunder;
(e) legal actions on Schedule G;
(f) the contracts and personal property leases described in
Schedule B;
(g) the duties, obligations of Seller with respect to the safe
deposit business conducted by Seller and the related
agreements;
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(h) Seller's obligations under the Leases; and
(i) additional Liabilities of Seller as listed on Schedule F
hereto.
SECTION 2.3 Purchase Price.
The Purchase Price will be the sum of: the Book Value of the Purchased
Assets on the Seller's Preliminary Closing Trial Balance, minus an amount equal
to the Due Diligence Reserve as calculated in Section 2.6; plus the aggregate
amount of the Adjustment Payment due to Seller as determined and paid according
to Section 2.7 of this Agreement; minus the aggregate amount of the Book Value
of the Assumed Liabilities on the Seller's Preliminary Closing Trial Balance.
SECTION 2.4 Payment at Closing.
On the Closing Date, Buyer will transfer to Seller cash, by wire
transfer in immediately available funds, in an amount (the "Preliminary
Settlement Amount") equal to the Purchase Price (without consideration of the
Adjustment Payment which will be paid according to Section 2.7). The Preliminary
Settlement Amount will be adjusted on the Settlement Date in accordance with
Section 2.8 hereof.
SECTION 2.5 Adjustment Loans.
(a) Concurrent with the delivery of this Agreement, Seller shall
deliver to Buyer a schedule of the Loans (the "Loan Schedule"). The Loan
Schedule is attached hereto as Schedule D.
(b) Concurrent with delivery of this Agreement, Buyer shall deliver to
Seller a schedule of Loans with respect to which, in Buyer's determination, the
amount of the loan loss reserve taken on Seller's balance sheet, dated as of
December 31, 2000, is insufficient to adequately provide for losses inherent in
the loan portfolio (the "Adjustment Loans Schedule"). The Adjustment Loan
Schedule is attached hereto as Schedule E.
SECTION 2.6 Due Diligence Reserve.
(a) On the date of this Agreement, Buyer shall create a reserve set
forth on Schedule E hereto representing the increased loan loss reserve
necessary, in the determination of Buyer, to adequately reserve against the risk
of loss for each of the Adjustment Loans (the "Purchase Reserve"). The aggregate
amount of the Purchase Reserve for each of the Adjustment Loans is the "Due
Diligence Reserve".
(b) During the period between the date of this Agreement and the
Closing Date, Buyer shall, in its reasonable discretion, make adjustments to the
Purchase Reserves of the Adjustment
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Loans in order to reflect the corrective action(s) set forth on Schedule E for
each of the Adjustment Loans.
(c) If, during the period between the date of this Agreement and the
Closing Date, Buyer, in its reasonable discretion, determines that, with respect
to a Loan (whether or not an Adjustment Loan), utilizing standards consistent
with the internal standards of Buyer in the evaluation of its own loan
portfolio, the amount of the loan loss reserve taken on Seller's balance sheet,
dated as of December 31, 2000, is insufficient to adequately provide for losses
inherent in Seller's loan portfolio, Buyer may adjust Schedule E or add the Loan
to Schedule E, making the Loan an Adjustment Loan, subject to the obligation to
provide written notice to Seller of the adjustment.
(d) On the Closing Date, Buyer shall deliver to Seller any revisions to
the Purchase Reserves of the Adjustment Loans, said revisions to be determined
by Buyer in good faith, in its reasonable discretion, according to the criteria
set forth in Section 2.6(b) and (c) (the "Closing Date Adjustment Loan
Schedule").
SECTION 2.7 Due Diligence Reserve Adjustments; Payment.
On the Closing Date, Buyer will transfer to Seller cash, by wire
transfer in immediately available funds in the amount of the "Adjustment
Payment" to be calculated as thirty percent (30%) of the Due Diligence Reserve,
as shown on the Closing Date Adjustment Loan Schedule, plus Four Hundred
Seventy-Five Thousand Dollars.
SECTION 2.8 Settlement Date Adjustments.
(a) On a date to be agreed upon by Seller and Buyer at the Closing,
which date shall not be more than thirty (30) Business Days after the Closing
Date (the "Settlement Date"), Buyer will transfer to Seller or Seller will
transfer to Buyer, as appropriate, an amount equal to the difference between the
Preliminary Settlement Amount and the Purchase Price utilizing Book Values of
the Purchased Assets and the Assumed Liabilities on the Seller's Final Closing
Trial Balance. All adjusted amounts due from one party to the other on the
Settlement Date will bear interest equal to the Federal Funds Effective Rate,
and such interest will be paid along with payments of such adjusted amounts.
(b) As soon as practicable, but in no event more than ten (10) Business
Days after the Closing, Seller shall deliver to Buyer the Sellers Final Closing
Trial Balance setting forth adjustments as determined in accordance with the
provisions of Sections 2.8 (a) and shall make available to Buyer such work
papers, schedules and other supporting data as may be reasonably requested by
Buyer to enable it to verify the differences between the Seller's Preliminary
Closing Trial Balance and the Seller's Final Closing Trial Balance. The Seller's
Final Closing Trial Balance shall be final and binding for all purposes unless,
within ten (10) days after receipt by Buyer of the Seller's Final Closing Trial
Balance, Buyer shall notify the Seller in writing of its disagreement with
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any item or amount included therein or omitted therefrom, in which case, if the
parties are unable to resolve the disputed issues within five (5) days after the
receipt by Seller of notice of such disagreement, such objection(s) shall be
resolved by an independent accounting firm selected by mutual agreement between
Buyer and Seller, provided that any accounting firm which shall have provided
services to Buyer or Seller or any or their respective affiliates during the
twelve months period ending on the Closing Date shall be disqualified. The
determination of such accounting firm shall be final and binding for all
purposes. The difference between each party's determination and the accounting
firm's determination of any adjustments shall be calculated and the fees of such
firm shall be paid by the party having the greater difference in the aggregate.
All payments to be made on the Settlement Date will be made by immediately
available funds.
(c) Except as provided in the next sentence, all payments with respect
to any Loan received by the Seller on or prior to the Effective Time shall be
the property of Seller and shall reduce the Book Value of the Loan by the amount
of the payment allocated to payment of principal, and all payments with respect
to any Loan received by the Seller or Buyer after the Effective Time shall be
the property of Buyer. Any payments with respect to any Loan received after the
Effective Time shall be promptly forwarded by Seller to Buyer.
SECTION 2.9 Allocation of Purchase Price.
(a) Buyer and Seller agree that, upon final determination of the
Purchase Price, the Purchase Price and the Assumed Liabilities (the "Allocation
Purchase Price") shall be allocated in accordance with Annex 2.9(a) hereto.
(b) Buyer and Seller shall report the transaction contemplated by this
Agreement (including income tax reporting requirements imposed pursuant to
Section 1060 of the Code) in accordance with the allocation specified on Annex
2.9(a) hereto. In the event any party hereto receives notice of a tax audit with
respect to the allocation of the Allocation Purchase Price specified herein,
such party shall immediately notify the other party in writing as to the date
and subject of such audit.
(c) If any federal, state or local tax return report or filing by Buyer
or Seller relating to the transactions contemplated hereby and filed on the
basis of the allocation set forth on Annex 2.9(a) hereto, is challenged by the
taxing authority with which such return, report or filing was filed, the filing
party shall assert and maintain in good faith the validity and correctness of
such allocation during the audit thereof until the issuance by the taxing
authority of a "30 Day Letter", or a determination of liability equivalent
thereto, to such party, whereupon such party shall, in its sole discretion, have
the right to pay, compromise, settle, dispute or otherwise deal with its alleged
tax liability. If such a tax return, report or filing is challenged as herein
described, the party filing such return, report or filing shall timely keep the
other party appraised of its decisions and the current status and progress of
all administrative and judicial proceedings, if any, that are undertaken at the
election of the filing party.
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SECTION 2.10 Transfer Taxes.
The cost of real estate transfer taxes and recordation fees incurred in
connection with the transfer of the Leases and OREO properties of the Seller and
Seller's subsidiaries, contemplated herein and any other sales or transfer tax
payable as a consequence of the consummation of the transactions contemplated
hereby will be borne by Buyer.
SECTION 2.11 Casualty.
In the event that any of the Facilities is damaged or destroyed by fire
or other casualty prior to the Closing Date, Seller will transfer to Buyer the
Purchased Assets associated with such Facility pursuant to this Agreement and
the proceeds of any insurance on the Facility. Seller, in order to protect
against a casualty loss, shall continue to insure the Facilities, including
associated improvements and personal property, for their full insurable value up
to the Effective Time. In the event that the books and records, relating to the
Purchased Assets and the Assumed Liabilities, including, but not limited to, the
Loan files, are destroyed by fire or other casualty, Buyer, at its option, may
terminate the Agreement.
SECTION 2.12 Data Processing Services.
From the date of this Agreement to the Closing Date, Seller will
provide such assistance to Buyer as will be reasonably necessary to assist Buyer
in converting and transferring all information concerning the Loans, Deposits
and the other Purchased Assets and Assumed Liabilities into Buyer's own data
processing system. After execution of this Agreement, Seller will provide Buyer
with computer file instructions with respect to the information in its data
processing system regarding the Purchased Assets and Assumed Liabilities,
together with operational procedures designed to implement the transfer of such
information to Buyer. Each party will designate an individual to serve as
liaison concerning the transfer of data processing information and other similar
operational matters.
SECTION 2.13 Certain Transitional Matters.
(a) Buyer will, at its cost and expense, notify the Depositors on or
before the Closing Date of Buyer's pending assumption of the Deposits. To the
extent Seller has the legal or regulatory authority to do so, Seller hereby
consents to the Buyer's use, after the Effective Time, of Seller's ABA Routing
Number.
(b) Seller and Buyer will develop appropriate procedures and
arrangements to provide for settlement by Buyer of checks, drafts, withdrawal
orders, returns and other items that are drawn on or chargeable against the
Deposits after the Closing Date. Seller will cooperate with Buyer and take all
reasonable steps requested by Buyer to ensure that, on and after the Closing
Date, each item drawn against a Deposit and encoded for presentment to Seller or
to any bank for the account of Seller is
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delivered to Buyer in a timely manner and in accordance with applicable law and
clearing house rule or agreement.
(c) Buyer will pay in accordance with law and customary banking
practices all properly drawn and presented checks, drafts and withdrawal orders
presented to Buyer drawn on the Deposits by means of checks, drafts or
withdrawal order forms provided by Seller, and in all other respects discharge,
in the usual course of the banking business, the duties and obligations of
Seller with respect to the Deposits.
(d) Buyer will pay promptly to Seller an amount equal to the amount of
any checks, drafts, withdrawal orders and/or other items in the process of
collection as of the Effective Time credited to the Deposits on or before the
Closing Date which are returned to Seller or to Buyer after the Closing Date.
Upon receipt of payment from Buyer, Seller will promptly assign to Buyer any
item so received by Seller.
(e) Seller will remit promptly to Buyer all payments on Loans, all
amounts intended as Deposits and any other amounts properly payable to Buyer
rather than Seller as a result of the transactions contemplated hereby which may
be received by Seller after the Effective Time.
(f) For a period of twelve (12) months following the Closing Date, upon
request either to Seller or Buyer from any state or the federal government to
reclaim funds relating to forged or improperly credited or issued social
security, unemployment, welfare or similar checks credited by Seller to a
Deposit account before the Effective Time, Buyer hereby will honor such request,
but only to the extent of the balance in the relevant account at the date of
such request. Buyer will assign to Seller all right, title and interest in any
such check returned to it by any such governmental entity and Seller will remain
liable for any deficiency still owing.
SECTION 2.14 XXX.
If the transfer of any XXX account requires the consent of any
customer, Seller will, at its own expense, use reasonable commercial efforts to
obtain such consent before the Closing Date. On the Closing Date, Seller will
assign, transfer and deliver XXX accounts as to which consents have been
obtained together with all assets held in such accounts, and Buyer thereafter
will assume all liabilities relating thereto and deliver to Seller appropriate
documents evidencing such assumption.
SECTION 2.15 Stop Payment Items.
Buyer will honor all stop payment orders related to any Deposits
initiated before the Effective Time and reflected in stop payment documents
delivered to Buyer on the Closing Date or thereafter, including any surety bonds
issued with respect thereto which Seller will assign to Buyer. If Buyer makes
any payment in violation of any stop order after having received appropriate
documentation, Buyer will be solely liable for any such payment and will
indemnify, hold harmless and defend Seller
14
from and against all Damages arising out of any such payment. If Buyer makes any
payment in violation of a stop payment order initiated before the Effective Time
but not reflected in stop payment documents delivered to Buyer before such
payment, Seller will indemnify, hold harmless and defend Buyer from and against
all Damages arising out of any such payment.
SECTION 2.16 Record Retention.
From and after the Closing Date, Buyer will preserve and safely keep,
for so long as may be required under applicable law, all of the files, books of
account and records transferred to Buyer under this Agreement. Upon not less
than five (5) Business Days prior notice, Buyer will permit Seller or its
representatives at any reasonable time and at Seller's expense, to inspect, make
extracts from or copies of, any such files, books of account or records as
Seller deems reasonably necessary, provided that such activities do not
unreasonably interfere with Buyer's business operations.
SECTION 2.17 Bank Premises.
Buyer will be entitled to possession and control of the Facilities on
and after the Effective Time.
SECTION 2.18 Interest Reporting.
Buyer will report from January 1, 2001 through December 31, 2001, all
interest credited to, interest premiums paid on, interest withheld from and
early withdrawal penalties charged to the Deposits. Seller warrants that the
information that it provides to Buyer with respect to the aforementioned
interest reporting is accurate. Such reports will be made to the holders of
accounts relating to Deposits and to the applicable federal and state regulatory
agencies. Buyer shall also be responsible for reporting any interest received on
the outstanding Loans.
SECTION 2.19 Withholding.
On or before the Closing Date Seller will deliver to Buyer a list of
all customers who have received "B" notices (TINs do not match) and "C" notices
(under reporting/IRS imposed withholder) issued by the IRS relating to the
Deposits. Following the Closing Date, Seller will promptly deliver to Buyer (i)
any and all similar notices regarding such Deposits received from the IRS and
(ii) all notices received from the IRS releasing any governmental agency
restriction on such Deposits. Any amounts required by any governmental agency to
be withheld from any such Deposits (the "Withholding Obligations") or any
penalties imposed by any governmental agency will be handled as follows:
(a) Any Withholding Obligation required to be remitted to the
appropriate governmental agency on or before the Closing Date will be withheld
and remitted by Seller, and any other sums
15
withheld by Seller pursuant to Withholding Obligations before the Closing Date
will also be remitted by Seller to the appropriate governmental agency on or
before the time they are due;
(b) Any Withholding Obligation required to be remitted to the
appropriate governmental agency after the Closing Date with respect to
Withholding Obligations after the Closing Date and not withheld as set forth in
Section 2.19(a) will be withheld and remitted by Buyer. Within two (2) Business
Days of receipt of any such notice by Seller, Seller will notify Buyer, and
Buyer will comply with the notification requirements;
(c) Up to and including the date twelve (12) months from the Closing
Date, any penalties described on "B" notices from the IRS or any similar
penalties which relate to the Deposits will be paid by Seller promptly upon
receipt of the notice, providing such penalty assessment resulted from Seller's
acts, policies or omissions, and any efforts to reduce such penalties will be
the responsibility of Seller; and
(d) Up to and including the date twelve (12) months from the Closing
Date, any penalties assessed due to information missing from information filings
regarding the Deposits for years prior to 2001, including, without limitation,
1099 forms, will be paid by Seller promptly upon receipt of the notice providing
such penalty assessment resulting from Seller's acts, policies or omissions, and
any efforts to reduce such penalties will be the responsibility of Seller.
SECTION 2.20 Further Assurances.
After the Closing, Buyer and Seller will execute and deliver such
instruments and take such other actions as the other party may reasonably
request in order to evidence the transactions contemplated hereby and to comply
with reporting requirements under the Code.
ARTICLE III
CLOSING
SECTION 3.1 Closing Date.
Upon the terms and subject to the conditions of this Agreement, the
purchase and sale of the Purchased Assets and the assumption of the Assumed
Liabilities contemplated by this Agreement shall take place at a closing (the
"Closing") to be held at the principal office of Buyer located at 000 Xxxxxxxxxx
Xxxxxx, Xxxxxxxx, Xxxxxxxxxxxx (which Closing shall be effective as of the
Effective Time). The Closing shall be held on the third Business Day following
the delivery by Seller to Buyer of Seller's Preliminary Closing Trial Balance,
and after the satisfaction or waiver of all conditions to the obligations of the
parties set forth in Article VI hereof (other than obligations to be performed
at the Closing), or at such other place, or at such other time or on such other
date as Seller and Buyer may mutually agree in writing. Seller's Preliminary
Closing Trial Balance shall be dated
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as of the last day of the month immediately preceding the Closing Date. Seller
shall prepare and deliver to Buyer Seller's Preliminary Closing Trial Balance no
later than ten (10) Business Days after the date of Seller's Preliminary Closing
Trial Balance and shall make available to Buyer such work papers, schedules and
other supporting data as may be reasonably requested by Buyer to enable it to
verify that Seller's Preliminary Closing Trial Balance is in conformity with
GAAP. Buyer shall give written notice to Seller within two (2) Business Days of
such delivery of any objections by Buyer to Seller's Preliminary Closing Trial
Balance, in which case, if Buyer and Seller are unable to resolve the
objections(s) within two (2) days after the receipt by Seller of notice of such
objection, such objection(s) shall be resolved by an independent accounting firm
selected by mutual agreement between Buyer and Seller, provided that any
accounting firm which shall have provided services to Buyer or Seller or any or
their respective affiliates during the twelve months period ending on the
Closing Date shall be disqualified. The determination of such accounting firm
shall be final and binding for all purposes. The difference between each party's
determination and the accounting firm's determination of any adjustments shall
be calculated and the fees of such firm shall be paid by the party having the
greater difference in the aggregate.
SECTION 3.2 Seller's Deliveries.
On or before the Closing Date, Seller shall deliver to Buyer, duly
executed and acknowledged where required:
(a) A xxxx of sale for the Purchased Assets in substantially the form
of Exhibit I hereto (the "Xxxx of Sale"), pursuant to which the Purchased Assets
(other than the assumed Leases) shall be transferred to Buyer;
(b) An assignment and assumption agreement with respect to the Assumed
Liabilities in substantially the form of Exhibit II hereto (the "Assignment and
Assumption Agreement");
(c) Leases, assignment and assumption agreements with respect to each
of the Leases in substantially the form of Exhibit III hereto (the "Lease
Assignments");
(d) Subject to the provisions of Section 5.10, such consents of
landlords under the Leases as shall be required pursuant to the terms of such
Leases for the assignment of the Leases to Buyer and (to the extent practicable)
to the release of Seller from liability thereunder (the "Landlord Consents") and
any required consents of the landlords to the execution of the Lease Agreements;
(e) An Officer's Certificate as set forth on Exhibit VI hereto;
(f) A Secretary's Certificate to the effect that the Board of Directors
and the shareholders of Seller have approved the transactions contemplated by
this Agreement without contingency or condition;
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(g) An opinion of counsel of Seller (which opinion shall not be from
in-house counsel), dated the Closing Date, in form and substance reasonably
satisfactory to Buyer to the effect that: (i) Seller is duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
formation or incorporation, with full corporate power and authority to enter
into and perform its obligations under this Agreement;(ii) this Agreement and
the other closing documents delivered and executed by any of the Sellers have
been duly and validly authorized, executed and delivered by Seller and (assuming
due authorization, execution and delivery by Buyer) are legal, valid and binding
obligations of Seller to the extent it is a party thereto, enforceable against
Seller in accordance with their respective terms, except as enforcement may be
limited by receivership, conservatorship, and supervisory powers of bank
regulatory agencies generally as well as bankruptcy, insolvency, reorganization,
moratorium or other laws of general applicability relating to or affecting
creditor's rights, or the limiting effect of rules of law governing specific
performance, equitable relief and other equitable remedies or the waiver of
rights or remedies;
(h) An opinion of counsel of Seller, dated the Closing date, relating
to certain tax matters, substantially in the form attached as Exhibit VII;
(i) The resignation of Seller as trustee or custodian, as applicable,
with respect to each XXX, Xxxxx Plan or Employee Pension Plan Deposit account
included in the Deposits and the designation of Buyer as successor trustee or
custodian with respect thereto;
(j) The FIRPTA Affidavits;
(k) Physical possession of all Purchased Assets as are capable of
physical delivery;
(l) Possession of all Loan files and collateral in the custody of
Seller relating to the Loans;
(l) Such other documents as are necessary to effect the transactions
contemplated hereby as Buyer shall reasonably request; and
(m) Possession of all indices of ownership in Seller's intangible
assets included in the Purchased Assets, including, but not limited to, the
Investment Portfolio.
SECTION 3.3 Buyer's Deliveries.
On or before the Closing Date, Buyer shall deliver to Seller, duly
executed and acknowledged where required:
(a) The Assignment and Assumption Agreement;
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(b) Buyer's acceptance of its appointment as successor trustee or
custodian, as applicable, as of the Effective Time, of the XXX, Xxxxx Plan and
Employee Pension Plan deposit accounts included in the Deposits and its
assumption of the fiduciary obligations of the trustee or custodian with respect
thereto;
(c) The Lease Assignments and such other instruments and documents as
any landlord under a Lease may reasonably require as necessary or desirable for
providing for the assumption by Buyer of such Lease, as applicable, each such
instrument and document in the form and substance reasonably satisfactory to the
parties hereto and dated as of the Closing Date;
(d) An Officer's Certificate in form attached as Exhibit VIII hereto;
(e) An opinion of Xxxxxxxx Xxxxxxxx, P.C., dated the Closing Date, in
the form and substance reasonably satisfactory to Seller, to the effect that (i)
Buyer is duly organized, validly existing and in good standing under the laws of
the jurisdiction of its formation or incorporation, with full corporate power
and authority to enter into and perform its obligations under this Agreement;
and (ii) this Agreement and the other closing documents executed and delivered
by Buyer have been duly and validly authorized, executed and delivered by Buyer,
and (assuming due authorization, execution and delivery by Seller) are legal,
valid and binding obligation of Buyer, to the extent it is a party thereto,
enforceable against Buyer in accordance with their respective terms, except as
enforcement may be limited by receivership, conservatorship and supervisory
powers of bank regulatory agencies generally as well as bankruptcy, insolvency,
reorganization, moratorium or other laws of general applicability relating to or
affecting creditors' rights, or the limiting effect of rules of law governing
specific performance, equitable relief and other equitable remedies of the
waiver of rights or remedies; and
(f) Such other documents as are necessary to effect the transactions
contemplated hereby as Seller shall reasonably request.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.1 Representations and Warranties of Seller.
In this Article IV, "Seller" means Bank, Crusader and AIC and their
respective subsidiaries, as applicable, but excluding the Excluded Subsidiaries,
unless the context clearly indicates only one entity. Seller represents and
warrants to Buyer as follows:
(a) Corporate Organization and Qualification. Bank is a federally
chartered savings bank, duly incorporated, validly existing and in good standing
under the laws of the United States of America and is in good standing as a
foreign corporation in each jurisdiction where the properties
19
owned, leased or operated, or the business conducted, by Bank requires such
qualification, except for such failure to qualify or be in such good standing
which, when taken together with all other such failures, would not have a
Material Adverse Effect on Bank and its subsidiaries, taken as a whole. Bank has
the requisite corporate power and authority (including all federal, state, local
and foreign governmental authorizations) to carry on its respective business as
now being conducted and to own its properties and assets. Bank is a member in
good standing of the Federal Home Loan Bank of Pittsburgh. Bank has made
available to Buyer a complete and correct copy of the articles of incorporation
or charter and bylaws of Bank and such charter or articles, as applicable, and
such bylaws are in full force and effect as of the date hereof.
Crusader is a corporation, duly incorporated, validly existing and in
good standing under the laws of the Commonwealth of Pennsylvania and is in good
standing as a foreign corporation in each jurisdiction where the properties
owned, leased or operated, or the business conducted, by Crusader requires such
qualification, except for such failure to qualify or be in such good standing
which, when taken together with all other such failures, would not have a
Material Adverse Effect on Crusader and its subsidiaries, taken as a whole.
Crusader has the requisite corporate power and authority (including all federal,
state, local and foreign governmental authorizations) to carry on its respective
businesses as now being conducted and to own its properties and assets. Crusader
has made available to Buyer a complete and correct copy of the articles of
incorporation and bylaws of Crusader and such articles and bylaws are in full
force and effect as of the date hereof.
AIC is a corporation, duly incorporated, validly existing and in good
standing under the laws of the State of Delaware and is in good standing as a
foreign corporation in each jurisdiction where the properties owned, leased or
operated, or the business conducted, by AIC requires such qualification, except
for such failure to qualify or be in such good standing which, when taken
together with all other such failures, would not have a Material Adverse Effect
on AIC and its subsidiaries, taken as a whole. AIC has the requisite corporate
power and authority (including all federal, state, local and foreign
governmental authorizations) to carry on its respective businesses as now being
conducted and to own its properties and assets. AIC has made available to Buyer
a complete and correct copy of the articles of incorporation and bylaws of AIC
and such articles and bylaws are in full force and effect as of the date hereof.
(b) Authorized Capital. Except as set forth on Annex 4.1(b), all of the
authorized capital stock of Bank is owned free and clear of all liens, pledges,
security interests, claims or other encumbrances by Crusader. Bank has no
outstanding bonds, debentures, notes or other obligations the holders of which
have the right to vote (or convertible into or exercisable for securities having
the right to vote) with shareholders on any matter. The outstanding shares of
capital stock of Bank have not been issued in violation of any preemptive
rights. Except as set forth on Annex 4.1(b) there are no outstanding
subscriptions, options, warrants, rights, convertible securities or other
agreements or commitments of any character relating to the issued or unissued
capital stock or other securities of Bank.
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(c) Subsidiaries. Except as listed and described in Annex 4.1(c),
Seller does not own any equity interest in any corporation, partnership, limited
liability company, trust, joint venture or other legal entity. Each wholly-owned
subsidiary of Seller organized as a corporation is duly organized and existing
as a corporation, is in good standing under the laws of the jurisdiction in
which it was organized, and has adequate corporate power to carry on its
business as now conducted. All of the outstanding capital stock of all such
subsidiaries has been validly issued, is fully paid and nonassessable and is
owned by Seller, free and clear of all liens, security interests and
encumbrances. None of the subsidiaries make use of fictitious names, except as
listed in Annex 4.1(c), in the conduct of their respective businesses.
(d) Corporate Authority. Subject only to approval of this Agreement by
the holders of the number of votes required by Seller's articles of
incorporation, charter or bylaws, (without any minority, class or series voting
requirement), and, subject to the regulatory approvals specified in Section
6.1(b), Seller has the requisite corporate power and authority, and legal right,
and has taken all corporate action necessary in order to execute and deliver
this Agreement and to consummate the transactions applicable to Seller
contemplated hereby. This Agreement has been duly and validly executed and
delivered by Seller and constitutes the valid and binding obligations of Seller
enforceable against it, in accordance with its terms, except to the extent
enforcement is limited by bankruptcy, insolvency and other similar laws
affecting creditors' rights or the application by a court of equitable
principles.
(e) No Violations. The execution, delivery and performance of this
Agreement by Seller does not and the consummation of the transactions
contemplated hereby by Seller, will not, constitute (i) subject to receipt of
the required regulatory approvals referenced in Section 6.1(b), a breach or
violation of, or a default under, any law, rule or regulation or any judgment,
decree, order, governmental permit or license, to which it (or any of its
respective properties) is subject, which breach, violation or default would have
a Material Adverse Effect on it, or enable any person to enjoin the Purchase,
(ii) a breach or violation of, or a default under Seller's articles of
incorporation, charter, or bylaws of Seller, or (iii) except as disclosed in
Annex 4.1(e), a breach or violation of, or a default under (or an event which
with due notice or lapse of time or both would constitute a default under), or
result in the termination of, accelerate the performance required by, or result
in the creation of any lien, pledge, security interest, charge or other
encumbrance upon any of the properties or assets of it under any of the terms,
conditions or provisions of any note, bond, indenture, deed of trust, loan
agreement or other agreement, instrument or obligation to which it is a party,
or to which any of their respective properties or assets may be bound, or
affected, except for any of the foregoing that, individually or in the
aggregate, would not have a Material Adverse Effect or enable any person to
enjoin the Purchase; and the consummation of the transactions contemplated
hereby by Seller will not require any approval, consent or waiver under any such
law, rule, regulation, judgment, decree, order, governmental permit or license
or the approval, consent or waiver of any other party to any such agreement,
indenture or instrument, other than (i) all required approvals, consents and
waivers of governmental authorities, (ii) the approval of its shareholder
referred to in Section 4.1(d), (iii) any such approval, consent or waiver that
already has been obtained, and (iv) any other approvals,
21
consents or waivers, the absence of which, individually or in the aggregate,
would not result in a Material Adverse Effect on it or enable any person to
enjoin the Purchase.
(f) Reports. Except as set forth in Annex 4.1(f), Seller has timely
filed all material reports and statements, together with any amendments required
to be made with respect thereto, that it was required to file since January 1,
1999 with (A) the OTS, (B) the FDIC, (C) the SEC, (D) any required state banking
department or commission or other regulatory authority ("State Regulator") and
collectively with the OTS and the FDIC, the "Seller Regulatory Agencies", and
(E) any other regulatory authority, and all other material reports and
statements required to be filed by it since January 1, 1999 including, without
limitation, any report or statement required to be filed pursuant to the laws,
rules or regulations of the United States or any Seller Regulatory Agency and
has paid all fees and assessments due and payable in connection therewith, and
no such report, registration or statement contains any material misstatement or
omission or is otherwise in material noncompliance with any law, regulation or
requirement.
(g) Absence of Certain Changes or Events. Except as disclosed on Annex
4.1(g), since June 30, 2000, to the date hereof, Seller has not incurred any
material liability, except in the ordinary course of its business consistent
with past practice, nor has there been any change in the financial condition,
properties, assets, business, results of operations or prospects of it which,
individually or in the aggregate, has had, or might reasonably be expected to
result in, a Material Adverse Effect on it.
(h) Taxes. Seller's federal income tax returns have been examined and
closed or otherwise closed by operation of law through 1996. All federal, state,
local and foreign tax returns required to be filed by it or on its behalf have
been timely filed or requests for extensions have been timely filed and any such
extension shall have been granted and not have expired, and, to Seller's
Knowledge, all such filed returns are complete and accurate in all material
respects. All taxes shown on such returns, and all taxes required to be shown on
returns for which extensions have been granted, have been paid in full or
adequate provision has been made for any such taxes on Seller's consolidated
financial statements dated as of December 31, 2000, (in accordance with GAAP)
other than those taxes which are being contested in appropriate forums in
proceedings which are being diligently pursued (all as listed on Annex 4.1(h)).
Adequate provision has been made on Seller's consolidated financial statements
dated as of December 31, 2000, (in accordance with GAAP) for all federal, state,
local and foreign tax liabilities for periods subsequent to those for which
returns have been filed. There is no audit examination, deficiency, or refund
litigation pending or, to Seller's Knowledge threatened, with respect to any
taxes that could result in a determination that would have a Material Adverse
Effect on it. All taxes, interest, additions and penalties due with respect to
completed and settled examinations or concluded litigation relating to it have
been paid in full or adequate provision has been made for any such taxes on
Seller's consolidated financial statements dated as of December 31, 2000, (in
accordance with GAAP). It has not executed an extension or waiver of any statute
of limitations on the assessment or collection of any tax due from Seller that
is currently in effect.
22
(i) Litigation and Liabilities. Except as set forth in Annex 4.1(i),
there are no (i) civil, criminal or administrative actions, suits, claims,
hearings, investigations or proceedings before any court, governmental agency or
otherwise pending or, to Seller's Knowledge, threatened against Seller or (ii)
obligations or liabilities, whether or not accrued, contingent or otherwise,
including, without limitation, those relating to environmental and occupational
safety and health matters, or any other facts or circumstances of which its
management is aware that could reasonably be expected to result in any claims
against or obligations or liabilities of it, that, alone or in the aggregate,
are reasonably likely to have a Material Adverse Effect on it or to hinder or
delay, in any material respect, consummation of the transactions contemplated by
this Agreement.
(j) Absence of Regulatory Actions. Except as set forth in Annex 4.1(j),
Seller is not a party to any cease and desist order, written agreement or
memorandum of understanding with, or a party to any commitment letter or similar
undertaking to, or is subject to any order or directive by, or is a recipient of
any extraordinary supervisory letter from, or has adopted any board resolutions
at the request of, federal or state governmental authorities, including, without
limitation, the Seller Regulatory Agencies, charged with the supervision or
regulation of financial or depository institutions or engaged in the insurance
of bank deposits nor has it been advised by any Seller Regulatory Agency that
such body is contemplating issuing or requesting (or is considering the
appropriateness of issuing or requesting) any such order, directive, written
agreement, memorandum of understanding, extraordinary supervisory letter,
commitment letter, board resolution or similar undertaking.
(k) Agreements.
(i) Except as set forth in Annex 4.1(k), as of the date of this
Agreement, Seller is not a party to, or bound by, any oral or written:
(A) "material contract" as such term is defined in Item
601(b)(10) of Regulation S-K promulgated by the SEC; or
(B) any agreement not terminable on thirty (30) days or less
notice involving the payment of more than $25,000 per annum, in the
case of any such agreement.
(ii) Seller is not in default under or, to Seller's Knowledge, in
violation of any provision of any note, bond, indenture, mortgage, deed
of trust, loan agreement, lease or other agreement to which it is a
party or by to which any of its respective properties or assets is
subject.
(l) Labor Matters. Seller is not the subject of any proceeding
asserting that it has committed an unfair labor practice or seeking to compel it
to bargain with any labor organization as
23
to wages and conditions of employment, nor is there any strike, other labor
dispute or organizational effort involving it pending or, to Seller's Knowledge,
threatened.
(m) Facility Closing. Seller has or will prior to Closing, comply with
all obligations regarding Facility closings and/or work force terminations,
including but not limited to WARN Act notices and requirements under the WARN
Act, if necessary.
(n) Leases; Title to Property; Encumbrances.
(i) Seller has at the Closing Date or will have, good and
marketable title, or leasehold to the each of the Purchased Assets, and
in each case subject to no mortgage, pledge, lien, security interest,
conditional sale agreement, encumbrance or charge of any nature
whatsoever, which would interfere with or otherwise prevent the Buyer
from having quiet enjoyment of the real estate, ownership possession
and quiet enjoyment of the other assets or ownership of the deposits or
the safe deposit business to be transferred in accordance with this
Agreement. Buyer will obtain good and marketable title, free and clear
of any lien, claim or encumbrance to all of the Purchased Assets
(except for easements of record which shall not unreasonably interfere
with Buyer's quiet enjoyment of the real estate).
(ii) Seller has delivered to Buyer a complete and correct copy
of the Leases relating to the Facilities, such Leases are listed in
Schedule C attached hereto. Each lease is valid and there does not
exist with respect to Seller's obligations thereunder, or to Seller's
Knowledge, with respect to the obligation of any lessor thereunder, any
material default or event or condition which, after notice or lapse of
time or both, would constitute a material default thereunder and, to
Seller's Knowledge, there is no condemnation proceeding or other
proceedings in the nature of eminent domain pending or threatened which
would preclude or materially impair the use of the Facilities as
presently being used in the conduct of the business of Seller.
(iii) The leaseholds, leasehold improvements, banking
equipment, fixtures, and furniture being sold are all of the physical
assets owned by Seller and used by it to conduct the business of the
Facilities as of the date hereof.
(iv) Except as set forth in Annex 4.1(n), all buildings,
structures and improvements on the real property leased by Seller are
in good condition, ordinary wear and tear excepted, and are free from
structural defects in all material respects. The equipment, including
heating, air conditioning and ventilation equipment owned by it, is in
good operating condition, ordinary wear and tear excepted. The
operation and use of the property in the business conform in all
material respects to all applicable laws, ordinances, regulations,
permits, licenses and certificates.
24
(v) No notice or citations of any violation of private
restrictions or any zoning regulations, laws, or other directives,
building, fire or other regulating laws, statutes, ordinances and
regulations relating to the Facilities has been received by Seller and
is currently outstanding and uncured.
(vi) Seller warrants that it has not received notice of nor,
to Seller's Knowledge, are there any pending improvement assessments
against the Facilities which remain uncomplied with or unpaid.
(vii) Seller has delivered to Buyer (or will deliver prior to
Closing) complete and correct copies of the Leases as well as all
leases, if any, of personal property used at the Facilities and being
transferred pursuant hereto. All such leases are valid and subsisting,
and there does not exist with respect to Seller's obligations
thereunder, or to Seller's Knowledge with respect to the obligation of
any lessor thereunder, any default, or any event or condition which,
after notice or lapse of time or both, would constitute a default, and,
to Seller's Knowledge there is no condemnation or similar proceeding
pending or threatened which would preclude or impair the use of the
Facilities as presently being used in the conduct of the business of
Seller. Seller has no actual knowledge and has received no written
notice of any proposed assessments against such Facilities for public
improvements or any notice that the current use of any of the
Facilities violates any law, ordinance, rule or regulation, including
but not limited to, laws relating to zoning, lane division, the
environment, building, fire, health and safety, of such Facilities.
(o) Compliance with Laws. Seller has all permits, licenses,
certificates of authority, orders and approvals of, and has made all filings,
applications and registrations with, federal, state, local and foreign
governmental or regulatory bodies that are required in order to permit it to
carry on its business as it is presently conducted and the absence of which
could, individually or in the aggregate, have a Material Adverse Effect on it;
all such permits, licenses, certificates of authority, orders and approvals are
in full force and effect, and to Seller's Knowledge no suspension or
cancellation of any of them is threatened.
(p) Fees. Except as set forth in Annex 4.1(p), neither Seller nor any
of its respective officers, directors, employees or agents, has employed any
broker or finder or incurred any liability for any financial advisory fees,
brokerage fees, commissions, or finder's fees, and no broker or finder has acted
directly or indirectly for it in connection with this Agreement or the
transactions contemplated hereby.
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(q) Environmental Matters.
Except as set forth in Annex 4.1(q) hereto:
(i) Seller has not been and is not now in violation of or liable under
any Environmental Laws.
(ii) To Seller's Knowledge, after reasonable investigation, none of the
Seller Loan Portfolio Properties and Other Properties Owned have been or
are in violation of or liable under any Environmental Laws.
(iii) To Seller's Knowledge, after reasonable investigation, there is
no environmental contaminant, pollutant, toxic or hazardous waste or other
similar substance has been generated, used, stored, processed, disposed of
or discharged onto any of the real estate acquired (by means of foreclosure
or exercise of any other creditor's right) or leased by Seller, except as
disclosed in Annex 4.1(q). In particular, without limiting the generality
of the foregoing sentence, except as disclosed in Annex 4.1(q), to Seller's
Knowledge: (i) no materials containing asbestos have been used or
incorporated in any building or other structure or improvement located on
any of the real estate acquired (by means of foreclosure or exercise of any
other creditor's right) or leased by Seller; (ii) no electrical
transformers, fluorescent light fixtures with ballasts or other equipment
containing PCB's are or have been located on any of the real estate
acquired (by means of foreclosure or exercise of any other creditor's
right) or leased by Seller; (iii) no underground storage tanks for the
storage of gasoline, petroleum products or other toxic or Hazardous
Substances are or have ever been located on any of the real estate acquired
(by means of foreclosure or exercise of any other creditor's right) or
leased by Seller.
(iv) Except as previously disclosed in Annex 4.1(q), there is no legal,
administrative, arbitration or other proceeding, claim, action, or to
Seller's Knowledge, cause of action or governmental investigation of any
nature seeking to impose, or that could result in the imposition, on Seller
of any liability arising under any local, state or federal environmental
statute, regulation or ordinance including, without limitation, the
Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended, pending or to Seller's Knowledge threatened against
Seller; there is no reasonable basis for any such proceeding, claim, action
or governmental investigation; and Seller is not subject to any agreement,
order, judgment, decree or memorandum by or with any court, governmental
authority, regulatory agency or third party imposing any such liability.
(r) Allowance. Including the determinations made and to be made by Buyer
pursuant to Section 2.5 or 2.6 hereof, the allowance for loan and lease losses
shown on Seller's consolidated statement of financial condition as of December
31, 2000, was, and the allowance for loan and lease losses shown on Seller's
consolidated statement of financial condition for periods ending after the
26
date of this Agreement will be, in the opinion of management of Seller and
Seller's Regulatory Agencies, adequate, as of the date thereof, under generally
accepted accounting principles applicable to thrifts and all other applicable
regulatory requirements for all losses reasonably anticipated in the ordinary
course of business as of the date thereof based on information available as of
such date. Seller has disclosed to Buyer in writing prior to the date hereof the
amounts of all Loans, leases, advances, credit enhancements, other extensions of
credit, commitments and interest-bearing assets of it that it has classified
internally as "Other Loans Specially Mentioned", "Special Mention",
"Substandard", "Doubtful", "Loss", "Classified", "Criticized", "Credit Risk
Assets", "Concerned Loans" or words of similar import, and shall promptly after
the end of each calendar quarter after the date hereof and on the Closing Date
inform Buyer of the amount of each such classification. The OREO and
in-substance foreclosures included in any of its non-performing assets are
carried net of reserves at the lower of cost or market value based on current
independent appraisals or current management valuations.
(s) Insurance. In the judgment of Seller's management, Seller is presently
insured, and has been insured, in adequate amounts. All of the insurance
policies and bonds maintained by Seller are in full force and effect, Seller is
not in default thereunder and all material claims thereunder have been filed in
due and timely fashion.
(t) Books and Records. Seller's books and records have been, and are being,
maintained in accordance with applicable legal and accounting requirements and
reflect in all material respects the substance of events and transactions that
should be included therein.
(u) Board Action. Seller's boards of directors (at meetings duly called and
held) have been duly convened and by the requisite vote of all directors (a)
determined that the Purchase is advisable and in the best interests of it and
its shareholder(s), (b) approved this Agreement and the transactions
contemplated hereby and thereby and (c) directed that the Agreement be submitted
for to a vote of its shareholders entitled to vote thereon at a special meeting
of the shareholder(s).
(v) Fairness Opinions. Crusader's board of directors has received an
opinion no later than the date of this Agreement from Xxxxxx, Xxxxxx & Co., LLC,
which shall be confirmed in writing and a copy of which shall promptly be
furnished to Buyer, to the effect that, subject to the qualifications and
assumptions thereof, the consideration to be received by Crusader's shareholders
from the net proceeds of the transactions contemplated by this Agreement is fair
to such holders from a financial point of view as of the date of this Agreement.
(w) Fidelity Bonds. Since at least December 31, 1998, the Bank has
continuously maintained fidelity bonds insuring it against acts of dishonesty by
its employees in such amounts as shown on Annex 4.1(w). Except for the claim
described on Annex 4.1(w), since December 31, 1998, the aggregate amount of all
potential claims under such bonds has not exceeded $100,000 and is not aware of
any facts which would reasonably form the basis of a claim under such bonds. The
Bank has no reason to believe that its fidelity coverage will not be renewed by
27
its carrier on substantially the same terms as its existing coverage. A copy of
such fidelity bond, as in effect as of the date of this Agreement, is attached
to this Agreement as Annex 4.1(w).
(x) Licenses and Permits. Seller has all material licenses, permits,
easements and rights of way, including proof of dedication, building permits,
certificates of occupancy and occupancy permits which are required from any
governmental authority having jurisdiction over the real property and the
Facilities (other than permits or authorizations required pursuant to
Environmental Laws) or from private parties as necessary to make use of the real
property and the Facilities and in order to insure adequate vehicular and
pedestrian ingress and egress to the real property and the Facilities, except
where the failure to hold such licenses, permits, easements and rights of way
would not result in a Material Adverse Effect.
(y) Loans. Except as set forth in Annex 4.1(y), Seller hereby represents
and warrants that, as to each Loan sold hereunder, as of the date specified
below or, if no such date is specified, then as of the Closing Date,:
(i) Validity of Loans. The Loans have been lawfully made, constitute
valid, subsisting and enforceable debts of the obligors, have
been incurred in the ordinary course of business, are subject to
the terms of payment as shall have been agreed upon between
Seller and each customer and Seller does not know of any
applicable set off or counterclaim.
(ii) List of Loans. A list of all Loans thirty (30) days or more past
due as of January 31, 2001 is set forth in Annex 4.1(y). No part
of the amount collectible under any Loan is contingent upon
performance by Seller of any obligation and no agreement for
participation, in which Seller has relinquished or agreed to
share control with a participation in management of the
facility, or agreement providing for deductions or discounts
have been made with respect to any part of such debts, except as
expressly disclosed in Annex 4.1(y).
(iii) Lender's Liability. To Seller's Knowledge, there are no pending,
threatened or expected actions in connection with any Loans
relating to claims based on theories of "lenders' liability" or
any other basis.
(iv) Sole Owner; Good Title. Seller is transferring good and
marketable title to the Loan to Buyer free and clear of any and
all encumbrances, liens, pledges, equities, claims, charges,
rights of first refusal or similar rights, or security interests
of any nature encumbering such Loan.
(v) Validity of the Loan Documents. The note and the related
mortgage or security documents, if any, are legal, valid and
binding obligations of the maker thereof, enforceable in
accordance with the respective terms thereof,
28
except as such enforcement may be limited by bankruptcy,
insolvency, reorganization, liquidation or other similar laws or
equitable principles relating to or affecting the enforcement of
creditors' rights generally.
(vi) Valid Lien. Each Loan (A) was originated or purchased by Seller,
(B) to the extent secured, is secured by a valid and enforceable
lien on the related mortgaged property (including all
improvements on the mortgaged property), or collateral therefor,
which lien is assignable, and (C) contains customary and
enforceable provisions such that the rights and remedies of the
holder or assignee thereof shall be adequate for practical
recovery against any mortgaged property or collateral therefor.
(vii) Loan Origination. Each Loan complied at the time the Loan was
originated in all material respects with all applicable
requirements of applicable federal, state, and local laws and
regulations thereunder.
(viii) Loan Servicing. The servicing practices of Seller and its agents
used with respect to the Loans have been customary industry
practices in all material respects.
(ix) No Modifications. Neither Seller nor any prior holder of the
Loan has impaired, waived, altered or modified the related
mortgage or security documents, if any, or note in any material
respect, except as appears in the Loan file or as is reflected
in Annex 4.1(y).
(x) Taxes, Assessments and Other Charges. To Seller's Knowledge, all
taxes, governmental assessments, water charges, sewer charges,
and municipal charges affecting the related mortgaged property,
if any, which previously become due and owing in respect of such
mortgaged property have been paid, or an escrow of funds in an
amount sufficient to cover such payments has been established.
(xi) No Condemnation. There is no proceeding pending for the total or
partial condemnation of the related mortgaged property, if any.
(xii) Hazard Insurance. All buildings upon the related mortgaged
property, if any, are insured by a generally acceptable insurer
against loss by fire, hazards of extended coverage and such
other hazards as are customary in the area where such mortgaged
property is located and all such insurance policies contain a
standard mortgage clause naming the originator of the Loan, its
successors and assigns, as mortgagee.
29
(xiii) No Satisfaction of Mortgage or Security Documents. Except as
appears in the Loan file, the mortgage or security documents,
if any, have not been satisfied, canceled, subordinated or
rescinded, in whole or in part, and the related mortgaged
property or collateral has not been released from the lien of
such mortgage or security documents, in whole or in part, nor
has any instrument been executed that would effect any such
release, satisfaction, cancellation, subordination or
recission.
(xiv) No Defenses. The note and the related mortgage or security
documents, if any, are not subject to any right of recission,
set-off, counterclaim or defense, including the defense of
usury, nor will the operation of any of the terms of such note
and mortgage or security documents, or the exercise of any
right thereunder, render such mortgage or security documents
unenforceable, in whole or in part.
(xv) Loan Closed. The Loan has closed and, except with respect to
the open end Loans, the proceeds of the Loan have been fully
disbursed and there is no requirement for future advances
thereunder and any and all requirements as to completion of any
on-site or off-site improvements and as to disbursements of any
escrow funds therefor have been complied with. All costs, fees
and expenses incurred in making or closing the Loan and the
recording of the mortgage or security documents, if any, were
paid, and the obligor is not entitled to any refund of any
amounts paid or due under the note, mortgage or security
documents.
(xvi) Trustee for Deed of Trust. In the event the related mortgage,
if any, constitutes a deed of trust, a trustee, duly qualified
under applicable law to serve as such, has been designated and
currently so serves, and no fees or expenses are or will become
payable by Buyer to the trustee under the deed of trust, except
in connection with a trustee's sale after default by the
obligor, and only from the proceeds of such sale.
(xvii) Collection Practices; Interest Rate Adjustments. The collection
practices (whether the practices of Seller or its servicing
agent) used with respect to the Loan have been legal in all
material respects. Except as set forth on Annex 4.1(y), Seller
and its servicing agent have made all interest rate adjustments
to any mortgage Loan in accordance with the terms of the note
and the related mortgage or security documents, if any, and has
complied and is in compliance in all material respects with all
federal, state and other applicable laws, rules and
regulations, including orders, writs, decrees, injunctions and
other requirements of any court or governmental authorities
having jurisdiction over adjustable rate mortgages.
30
(xviii) RESPA. With respect to each Loan which is a residential
mortgage loan, Seller has given the notice required by Section
6 of the Real Estate Settlement Procedures Act ("RESPA") of the
transfer of the servicing of the Loans.
(z) TIN Certification. Seller has complied in all material respects
with all applicable laws in obtaining, maintaining and servicing the Deposit
Liabilities, including the use of due diligence relating to taxpayer
identification number compliance with respect to depositors.
(aa) Deposits. The Deposits to be transferred pursuant to this
Agreement are fully enforceable and in material compliance with all applicable
laws and rules and regulations in all material respects including, by way of
illustration and not limitation, their terms, interest rates and administration.
(bb) Deposit Insurance. The Deposits to be transferred pursuant to this
Agreement are insured by the SAIF, as administered by the FDIC up to the maximum
extent permitted by law. Seller has filed all reports and paid all premiums and
assessments required under the Federal Deposit Insurance Act.
(cc) INTENTIONALLY OMITTED
(dd) Title to Assets. Except as described in Annex 4.1(dd), Seller owns
the Purchased Assets, free and clear of any mortgage, pledge, lien, security,
interest, conditional sales agreement, lease, encumbrance or charge of any
nature whatsoever, except:
(i) liens for current taxes or assessments which are not yet due
and payable or are being contested by Seller in good faith;
(ii) builders', mechanics', materialmen's, or other similar liens
arising and continuing in the ordinary course of business for
obligations which are not yet due and payable;
(iii) statutory and other similar liens which are not yet due and
payable and which do not materially affect the value of the Purchased
Assets subject thereto or the usefulness of such Purchased Assets to
the business of the Facilities; and
(iv) easements of record which shall not unreasonably interfere
with Buyer's quiet enjoyment of the real estate. At the Closing Date,
Buyer will obtain good and marketable title, free and clear of any
lien, claim or encumbrance (except as described in the preceding
sentence) to all of the Purchased Assets.
31
(ee) Regulatory Compliance - OTS. Seller is in compliance in all
material respects with the applicable rules, regulations and directives of the
OTS, except as noted in Annex 4.1(ee).
(ff) Regulatory Compliance - FDIC. Except as noted in Annex 4.1(ff),
Seller is in compliance in all material respects with the rules and regulations
of the FDIC to the extent such rules and regulations are deemed applicable by
regulatory determination.
(gg) Capital Compliance. The capital status of Seller as of the date
hereof will not impair the Closing.
(hh) Assessments Fully Paid. All payments, fees and charges assessed by
appropriate local, state and federal agencies against Seller, and due on or
prior to the date of this Agreement, have been paid in full.
(ii) Complete and Accurate Disclosure. Neither this Agreement (insofar
as it relates to Seller's involvement in the transactions contemplated hereby)
nor any schedule, annex, or exhibit (including without limitation Annex 4.1(ii),
certificate, or other written statement or document delivered by Seller to Buyer
in connection herewith contains any statement which, at the time and in light of
the circumstances under which it is made, is false or misleading with respect to
any material fact or omits to state any material fact necessary to make the
statements contained herein or therein not false or misleading. In particular,
without limiting the generality of the foregoing sentence, the information
provided and the representations made by Seller to Buyer, both at the time such
information and representations are provided and made and at the time of the
Closing, will be true and accurate in all material respects and will not contain
any false or misleading statement with respect to any material fact or omit to
state any material fact necessary (i) to make the statements made therein not
false or misleading, or (ii) to correct any statement contained in an earlier
communication with respect to such information or representations which has
become false or misleading. Except as expressly set forth in this Section 4.1,
Seller makes no representation or warranty, express or implied, at law or in
equity, in respect of the Seller, the Assets, the Liabilities of Seller or the
business of Seller, including, without limitation, with respect to
merchantability or fitness for any particular purpose, and any such other
representations or warranties are hereby expressly disclaimed.
(jj) Repurchase Agreements. With respect to any agreement, pursuant to
which Seller has purchased securities subject to an agreement to resell, if any,
Seller has a valid, perfected first lien or security interest in the government
securities or other collateral securing the Repurchase Agreement, and the value
of such collateral equals or exceeds the amount of the debt secured thereby.
Except as disclosed in Annex 4.1(jj), which identifies location and type of
securities, Seller maintains physical possession of purchased securities that
are subject to an agreement to resell.
(kk) Assumability of Contracts and Leases. Except as listed on Annex
4.1(kk), the Leases, and each lease identified on Schedule B, is assumable and
assignable and does not contain any term
32
or provision that would accelerate or increase payments that would otherwise be
due by Seller to such person or entity, or change or modify the provisions or
terms of such leases, contracts and agreements by reason of this Agreement or
the transactions contemplated hereby. Each lease identified on Schedule B is
valid and in effect in accordance with its respective terms, and there is not,
under any of such leases, on the part of the lessee any material existing
default or any event which with notice or lapse of time, or both, would
constitute such a default.
(ll) Tenants. The tenants or other occupants (other than Seller and
Crusader Servicing Corporation) of the Facilities are listed on Annex 4.1(ll).
(mm) CRA Compliance. The Bank has received a Needs Improvement
Community Reinvestment Act compliance rating. To Seller's Knowledge, there are
no facts or circumstances which would prevent the Bank from receiving the same
or improved ratings upon its next appropriate examination.
(nn) Derivatives. Except as set forth in Annex 4.1(nn) and pursuant to
any judgments, orders, decrees or directives, Seller does not own or hold any
derivatives, "caps", or "floors", in its Investment Portfolio.
(oo) Employment Obligations. Seller has fulfilled all of its
obligations under any previous or current Seller employment contract or
agreement, employee health and welfare benefit plans, severance, incentive and
any other employee benefit plans, programs or policies in respect to any of its
present or former employees, officers or directors.
(pp) Proxy Statement, Etc. Except for information relating to Buyer and
its subsidiaries, neither (i) the Proxy Statement (as defined in Section 5.7 of
this Agreement) or any amendment or supplement thereto, at the time it is filed
with the SEC, at the time the Proxy Statement is mailed to the shareholders of
Crusader or at the date of the Crusader Shareholders Meeting (defined in Section
5.6) nor (ii) any other documents to be filed by Crusader with the SEC or any
regulatory agency in connection with this Agreement, or the transactions
contemplated hereby will contain any untrue statement of material fact or omit
to state any material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they are made,
not misleading.
(qq) Owned Software. The current software applications used by Seller
in the operation of its business are set forth on Annex 4.1(qq) (the
"Software"). To the extent that any of the Software has been designed or
developed by Seller's management information or development staff or by
consultants on Seller's behalf, such Software is original and capable of
copyright protection in the United States, and Seller has complete rights to and
ownership of such Software, including possession of, or ready access to, the
source code for such Software in its most recent version. No part of any such
Software is an imitation or copy of, or infringes upon the software of any other
person or entity, including, without limitation, rights relating to defamation,
contractual rights,
33
copyrights, trade secrets and rights of privacy or publicity. Seller has not
sold, assigned, licensed, distributed or in any other way disposed of or
encumbered any of the Software.
(rr) Licensed Software. The Software, to the extent it is licensed from
third party licensors or constitutes "off-the-shelf" software, is held by Seller
legitimately and is fully transferable hereunder without any third party
consent. All of Seller's computer hardware has legitimately licensed software
installed therein.
(ss) No Errors; Nonconformity. The Software is free from any material
defect or programming or documentation error, operates and runs in a reasonable
and efficient business manner and conforms to the stated specifications thereof,
and, with respect to owned Software, the applications can be recreated from
their associated source codes.
(tt) No Bugs or Viruses. Seller has not knowingly altered its data, or
any Software or any supporting software which may, in turn, damage the integrity
of the data, stored in electronic, optical, or magnetic or other form. To
Seller's Knowledge, no bugs or viruses exist with respect to the Software.
(uu) Documentation. Seller has furnished Buyer with true and accurate
copies of all documentation (end user or otherwise) in its possession relating
to the use, maintenance and operation of the Software.
(vv) Employee Benefit Plans. Annex 4.1(vv) contains a complete list of
all of Seller's pension, retirement, stock option, stock purchase, stock
ownership, savings, stock appreciation right, profit sharing, deferred
compensation, consulting, bonus, group insurance, severance and other employee
benefits, incentive and welfare policies, contracts, plans and arrangements, and
all trust agreements related thereto, in respect to any of its present or former
directors, officers or other employees (hereinafter referred to collectively as
the "Employee Plans").
(i) All of the Employee Plans comply in all material respects
with all applicable requirements of ERISA, the Code and
other applicable laws; it has not engaged in a "prohibited
transaction" (as defined in Section 406 of ERISA or Section
4975 of the Code) with respect to any Employee Plan which
is likely to result in any material penalties, taxes or
other events under Section 502(i) of ERISA or Section 4975
of the Code which would have a Material Adverse Effect on
it.
(ii) No liability to the Pension Benefit Guaranty Corporation
has been or is expected by it to be incurred with respect
to any Employee Plan which is subject to Title IV of ERISA
("Pension Plan"), or with respect to any "single-employer
plan" (as defined in Section 4001 (a)(15) of ERISA)
currently or formerly maintained by Seller or any entity
which is considered one employer with Seller under Section
4001 of ERISA or Section 414 of the Code (an "ERISA
Affiliate").
34
(iii) No Pension Plan or single-employer plan of an ERISA
Affiliate had an "accumulated funding deficiency" (as
defined in Section 302 of ERISA (whether or not waived)) as
of the last day of the end of the most recent plan year
ending prior to the date hereof; all contributions to any
Pension Plan or single-employer plan of an ERISA Affiliate
that were required by Section 302 of ERISA and were due
prior to the date hereof have been made on or before the
respective dates on which such contributions were due; the
fair market value of the assets of each Pension Plan or
single-employer plan of an ERISA Affiliate exceeds the
present value of the "benefit liabilities" (as defined in
Section 4001(a)(16) of ERISA) under such Pension Plan or
single employer plan of an ERISA Affiliate as of the end of
the most recent plan year with respect to the respective
Pension Plan or single-employer plan of an ERISA Affiliate
ending prior to the date hereof, calculated on the basis of
the actuarial assumptions used in the most recent actuarial
valuation for such Pension Plan or single-employer plan of
an ERISA Affiliate as of the date hereof; and no notice of
a "reportable event" (as defined in Section 4043 of ERISA)
for which the 30-day reporting requirement has not been
waived has been required to be filed for any Pension Plan
or single-employer plan of an ERISA Affiliate within the
12-month period ending on the date hereof.
(iv) Neither has Seller provided, nor is Seller required to
provide, security to any Pension Plan or to any
single-employer plan of an ERISA Affiliat pursuant to
Section 401(a)(29) of the Code.
(v) Neither Seller nor any ERISA Affiliate has contributed to
any " multi-employer plan", as defined in Section 3(37) of
ERISA, on or after September 26, 1980.
(vi) Each Employee Plan of Seller which is an "employee pension
benefit plan" (as defined in Section 3(2) of ERISA) and
which is intended to be qualified under Section 401(a) of
the Code (a "Qualified Plan") has received a favorable
determination letter from the IRS covering the requirements
of the Tax Equity and Fiscal Responsibility Act of 1982,
the Retirement Equity Act of 1984 and the Deficit Reduction
Act of 1984 and the Tax Reform Act of 1986; Seller is not
aware of any circumstances likely to result in revocation
of any such favorable determination letter; each such
Employee Plan has been amended to reflect the requirements
of subsequent legislation applicable to such plans; and
each Qualified Plan has complied at all relevant times in
all material respects with all applicable requirements of
Section 401(a) of the Code.
35
(vii) Each Qualified Plan which is an "employee stock ownership
plan" (as defined in Section 4975(e)(7) of the Code) has at
all relevant times satisfied all of the applicable
requirements of Sections 409 and 4975(e)(7) of the Code and
the regulations thereunder.
(viii) Neither Seller nor any ERISA Affiliate has committed any
act or omission or engaged in any transaction that has
caused it to incur, or created a material risk that it may
incur, liability for any excise tax under Sections 4971
through 4980B of the Code, other than excise taxes which
heretofore have been paid and fully reflected in its
financial statements.
(ix) There is no pending or threatened litigation,
administrative action or proceeding relating to any
Employee Plan, other than routine claims for benefits.
(x) There has been no announcement or legally binding
commitment by Seller to create an additional Employee Plan,
or to amend an Employee Plan, except for amendments
required by applicable law which do not materially increase
the cost of such. Seller does not have any obligations for
retiree health and life benefits under any Employee Plan
that cannot be terminated without incurring any liability
thereunder.
(xi) The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby will
not result in any payment or series of payments by Seller
to any person which is an "excess parachute payment" (as
defined in Section 280G of the Code) under any Employee
Plan, increase any benefits payable under any Employee
Plan, or accelerate the time of payment or vesting of any
such benefit.
(xii) All annual reports have been filed timely with respect to
each Employee Plan, it has made available to Buyer a true
and correct copy of (A) reports on the applicable form of
the Form 5500 series filed with the IRS for plan years
beginning after 1987, (B) such Employee Plan, including
amendments thereto, (C) each trust agreement and insurance
contract relating to such Employee Plan, including
amendments thereto, (D) the most recent summary plan
description for such Employee Plan, including amendments
thereto, if the Employee Plan is subject to Title I of
ERISA, (E) the most recent actuarial report or valuation if
such Employee Plan is a Pension Plan and (F) the most
recent determination letter issued by the IRS if such
Employee Plan is a Qualified Plan.
36
(xiii) Seller has no retiree health benefit plans except as
required to be maintained by COBRA.
(ww) Material Interests of Certain Persons. Except as noted in Annex
4.1(ww), none of Seller's respective officers or directors, or any "associate"
(as such term is defined in Rule 12b-2 under the Exchange Act of any such
officer or director, has any material interest in any material contract or
property (real or personal), tangible or intangible, used in or pertaining to
its business.
(xx) No Guarantees. Except as disclosed in Annex 4.1(xx), Seller is not
obligated as guarantor, co-xxxxxx or surety (or otherwise in a secondary
liability capacity) for any obligation of any kind of any other person or
entity.
(yy) Loan Portfolio. Except as disclosed in Annex 4.1(yy), all
evidences of indebtedness reflected as Assets of Seller on Seller's Trial
Balance as of the date of this Agreement are in all material respects binding
obligations of the respective primary obligors associated therewith, and to
Seller's Knowledge, no material amount thereof is subject to any defenses which
may be asserted against Seller. Except as set forth in Annex 4.1(yy) or as
contained in Seller's Loan files, Seller has delivered to Buyer a true and
correct list and brief description of all real property (other than personal
residences) in which Seller or any subsidiary has an interest as creditor or
mortgagee securing an amount or amounts greater than $250,000 to one borrower,
or a series of related borrowers. Except as set forth on Annex 4.1(yy), there
are no outstanding Loans held by Seller with an unpaid balance of $25,000 or
more which are currently in default. For purposes hereof, "default" shall
include, but not be limited to, a failure of an obligor to make payments with
respect to any Loans for 60 days or more past the due date for such payment;
and
(zz) Powers of Attorney, Guarantees. Except as set forth in Annex
4.1(zz), Seller has no power of attorney outstanding, or any obligation or
liability, either actual, accruing or contingent, as guarantor, surety,
cosigner, endorser, co-maker or indemnitor in respect of the obligation of any
person, corporation, partnership, joint venture, association, organization or
other entity, except for letters of credit issued in the ordinary course of
business which are listed in Annex 4.1(zz).
(aaa) Mortgage Banking Operations and Activities. Except as set forth
in Annex 4.1(aaa):
(i) Seller (A) has all certifications, authorizations,
licenses, permits and other approvals ("Licenses")
necessary to conduct its current mortgage banking business
and is in compliance therewith in all material respects,
(B) is in compliance in all material respects with all
applicable investor requirements, federal and state
statutes and regulations and with the underwriting and
servicing guidelines of the Federal Home Loan Mortgage
Corporation ("FHLMC"), and the Federal National Mortgage
Association ("FNMA"), the Department of Veteran's Affairs
("VA") and the Federal Housing
37
Administration ("FHA"), including but not limited to those
statutes, regulations and guidelines governing the
origination, recordation or servicing of mortgage loans
closed, originated or serviced by Seller ("Mortgage
Loans"), the obtaining of appropriate loan documentation
and insurance policies, the calculation of interest rate
adjustments, the maintenance of escrow accounts and filing
of all documents required by the Code, (C) is in
compliance in all material respects with all mortgage
servicing agreements to which it is currently a party
(true and complete copies of which Seller previously made
available to Buyer), and such agreements are valid and
binding obligations of Seller, are in full force and
effect and are enforceable in accordance with their terms,
except as enforcement thereof may be limited by
bankruptcy, insolvency or other similar laws affecting the
enforcement of creditors' rights generally and by general
principles of equity (whether applied in a proceeding in
equity or at law), and (D) is in compliance in all
material respects with all FHA insurance certificates, VA
guaranty certificates or policies of private mortgage
insurance covering the Loans in its loan portfolio or loan
servicing portfolio, in each case except where the failure
to do so would not have a Material Adverse Effect. Except
as set forth in Annex 4.1(aaa), neither the execution and
delivery of this Agreement nor the consummation of the
transactions contemplated hereby will affect the validity
of any License currently possessed by Seller, constitute a
default (or an event which with the passage of time or the
giving of notice or both would constitute a default) under
any mortgage servicing agreement to which Seller is
currently a party, or result in any such mortgage
servicing agreement being terminable by any party thereto,
in each case except where such invalidity, default or
termination would not have a Material Adverse Effect.
(ii) All of the servicing rights owned by Seller are owned free
and clear of any lien, pledge, security interest, claim,
restriction or encumbrance.
(iii) Seller is not a party to (A) any agreement or arrangement
with any person to repurchase from any such person any
Mortgage Loan, mortgaged property serviced for others,
mortgage loans sold by Seller with servicing released
("Servicing Released Loans") or any mortgage loan and/or
the servicing rights related thereto which were sold by
Seller ("Previously Disposed Loans") or (B) any agreement,
arrangement or understanding to reimburse, indemnify or
hold harmless any person or otherwise assume any liability
with respect to any loss suffered or incurred as a result
of any default under or the foreclosure or sale of any
such Mortgage Loan, mortgaged property, Servicing Released
Loans, or Previously Disposed Loans except insofar as (i)
such recourse is based upon a breach by Seller of a
customary representation, warranty or
38
undertaking, or (ii) Seller incurs expenses such as legal
fees in excess of the customary reimbursement limits, if
any, set forth in the applicable Mortgage Servicing
Agreement. For purposes of this Agreement, the term
"Recourse Loan" means any Mortgage Loan, mortgaged
property, Servicing Released Loan or Previously Disposed
Loan with respect to which Seller bears the risk of loss
as described in the preceding sentence.
(iv) Investor Commitments. Seller has previously provided to
Buyer complete and correct copies of all commitments to
purchase Mortgage Loans ("Investor Commitments") in effect
on the date hereof. Each Investor Commitment constitutes a
valid and binding obligation of Seller, and, to the
Seller's Knowledge, all of the other parties thereto,
enforceable in accordance with its terms, subject to
bankruptcy, insolvency or other similar laws affecting the
enforcement of creditors' rights generally and by general
principles of equity (whether applied in a proceeding in
equity or at law). Each Mortgage Loan owned by Seller and
currently held for sale which is subject to an Investor
Commitment is a loan eligible to be either an FHA or VA
loan or sold to FNMA ("Conforming Loans") or is otherwise
readily saleable in the secondary market.
(v) Physical Damage. To Seller's Knowledge, no physical damage
to any collateral for a Mortgage Loan exists, which
physical damage is not insured against in compliance with
regulations and which would have a material adverse effect
on the value or marketability of any Mortgage Loan, or on
the underlying collateral.
(vi) Advances. There are no pooling, participation, servicing
or other agreements to which Seller is a party which
obligate it to make advances with respect to defaulted or
delinquent Mortgage Loans other than as provided in FNMA
or FHLMC pooling and servicing agreements.
(vii) Pool Certification. In all material respects, all pools
relating to the Mortgage Loans have been certified in
accordance with applicable regulations, and the securities
backed by such pools have been issued on uniform
documents, in accordance with the applicable investor
guide without any material deviations therefrom. The
principal balance outstanding and owing on the Mortgage
Loans in each pool equals or exceeds the amount owing to
the corresponding security holders of such pool. No event
has occurred or failed to occur which would require Seller
to repurchase any Mortgage Loan from any pool, except with
respect to the obligation to repurchase Conforming Loans
that are in foreclosure.
39
(viii) Payoff Statements. All payoff and assumption statements
with respect to each Mortgage Loan provided by Seller to
borrowers or their agents were, at the time they were
provided, complete and adequate in all material respects.
(bbb) Trademarks, Trade Names. Seller owns, or has the right to use,
all trademarks, trade names and copyrights used in or necessary for the ordinary
conduct of its existing business as heretofore conducted, and the consummation
of the transactions contemplated hereby will not alter or impair any such
rights. Except as set forth in Annex 4.1(bbb), no claims are pending for the use
of any trademarks, trade names or copyrights or challenging or questioning the
validity or effectiveness of any license or agreement relating to the same nor
is there, to Seller's Knowledge, any valid basis for any such claim, challenge
or question, and, to Seller's Knowledge, the use of such trademarks, trade names
and copyrights by Seller does not infringe on the rights of any person.
SECTION 4.2 Representations and Warranties of Buyer.
Buyer represents and warrants to Seller that, except as specifically
disclosed in the disclosure annexes attached hereto, to the best of its
knowledge:
(a) Corporate Organization and Qualification. Buyer is a
Pennsylvania-chartered commercial banking institution duly organized, validly
existing and in good standing under the laws of the Commonwealth of Pennsylvania
and is in good standing as a foreign corporation in each jurisdiction where the
properties owned, leased or operated, or the business conducted, by Buyer
requires such qualification, except for such failure to qualify or be in such
good standing which, when taken together with all other such failures, would not
have a Buyer Material Adverse Effect . Buyer has the requisite corporate power
and authority (including all federal, state, local and foreign governmental
authorizations) to carry on its business as now conducted and to own its
properties and assets.
(b) Corporate Authority. Subject only to the regulatory approvals
specified in Section 6.1, Buyer has the requisite corporate power and authority,
and legal right, and has taken all corporate action necessary in order to
execute and deliver this Agreement and to consummate the transactions applicable
to Buyer contemplated hereby. This Agreement has been duly and validly executed
and delivered by Buyer and constitutes the valid and binding obligations of
Buyer enforceable against Buyer, in accordance with its terms, except to the
extent enforcement is limited by bankruptcy, insolvency and other similar laws
affecting creditors' rights or the application by a court of equitable
principles.
(c) No Violations. The execution, delivery and performance of this
Agreement by Buyer does not, and the consummation of the transactions
contemplated hereby by Buyer will not, constitute (i) a breach or violation of,
or a default under, any law, rule or regulation or any judgment, decree, order,
governmental permit or license, or agreement, indenture or instrument to which
Buyer or any of Buyer's respective properties or assets is subject, which
breach, violation or default would
40
have a Buyer Material Adverse Effect, or enable any person to enjoin the
Purchase, (ii) a breach or violation of, or a default under, Buyer's articles of
incorporation or bylaws.
(d) Required Consents. Buyer has no reason to believe that it will be
unable to obtain consents and approvals, including without limitation all such
consents and approvals of Regulatory Agencies (as hereinafter defined),
necessary to consummate the transactions contemplated by this Agreement by July
30, 2001 or that any such consents or approvals would contain any condition or
requirement that would result in a Buyer Material Adverse Effect .
(e) Board Action. Buyer's board of directors (at a meeting duly called)
has been duly convened and by the requisite vote of all directors approved this
Agreement and the transactions contemplated hereby.
(f) Proxy Statement. Any information Buyer provides to Seller in
connection with the preparation of Seller's Proxy Statement will not contain any
untrue statement of material fact or omit to state any material fact required to
be stated therein or necessary to make the statements therein, in light of the
circumstances under which they are made, not misleading.
(g) Absence of Regulatory Actions. Buyer is not a party to any cease
and desist order, written agreement or memorandum of understanding with, or a
party to any commitment letter or similar undertaking to, or is subject to any
order or directive by, or is a recipient of any extraordinary supervisory letter
from, or has adopted any board resolutions at the request of, federal or state
governmental authorities, including, without limitation, the Buyer Regulatory
Agencies, charged with the supervision or regulation of banks or bank holding
companies or savings and loan holding companies or engaged in the insurance of
bank and/or savings and loan deposits nor has it been advised by any Buyer
Regulatory Agency that it is contemplating issuing or requesting (or is
considering the appropriateness of issuing or requesting) any such order,
directive, written agreement, memorandum of understanding, extraordinary
supervisory letter, commitment letter, board resolutions or similar undertaking.
(h) Litigation and Liabilities. Except as set forth in Annex 4.2(h),
there are no (i) civil, criminal or administrative actions, suits, claims,
hearings, investigations or proceedings before any court, governmental agency or
otherwise pending or, to the knowledge of management, threatened against Buyer
or (ii) obligations or liabilities, whether or not accrued, contingent or
otherwise, including, without limitation, those relating to environmental and
occupational safety and health matters, or any other facts or circumstances of
which its management is aware that could reasonably be expected to result in any
claims against or obligations or liabilities of it, that could hinder or delay,
in any material respect, consummation of the transactions contemplated by this
Agreement.
(i) CRA Compliance. Buyer has received a satisfactory compliance rating
and has received a satisfactory Community Reinvestment Act rating. Buyer has no
knowledge of any facts or
41
circumstances which would prevent it from receiving such satisfactory ratings
upon its next appropriate examination.
(j) Capital Transaction. Buyer has sufficient capital to consummate the
Purchase and to perform its other obligations under this Agreement and any other
documents executed in connection herewith.
(k) Sufficient Resources. Buyer will have available at the Effective
Time, available financial resources to enable Buyer to lawfully satisfy its
obligations pursuant to this Agreement. Buyer has and will have sufficient
management and financial resources to obtain the required regulatory and other
approvals for the Purchase and the transactions contemplated by this Agreement.
ARTICLE V
COVENANTS
SECTION 5.1 Conduct of Seller's Businesses Prior to the Effective Time.
Except as expressly provided in this Agreement and by any orders,
decrees, supervisory agreements or directives, or the like, from any of Seller's
Regulatory Agencies, during the period from the date of this Agreement to the
Effective Time, Seller shall (and the word "it" in this Article V refers to
Crusader, Bank and AIC and each subsidiary of any of them, except for the
Excluded Subsidiaries) (i) conduct its business in the manner directed by any
and all regulatory agencies, (ii) maintain and preserve intact in all material
respects its business organization, Purchased Assets, Deposits, Leases,
properties, Investment Portfolio, employees and advantageous business
relationships and use its reasonable efforts to retain the services of its
officers and key employees, (iii) not knowingly take any action which would
adversely affect or delay its ability to obtain any necessary approvals,
consents or waivers of any governmental authority required for the transactions
contemplated hereby or to perform its covenants and agreements on a timely basis
under this Agreement, and (iv) not knowingly take any action that is reasonably
likely to have a Material Adverse Effect on Seller.
SECTION 5.2 Forbearance by Seller.
During the period from the date of this Agreement to the Effective
Time, except as otherwise permitted or required by the terms of this Agreement,
Seller shall not, without the prior written consent of Buyer:
(a) make any advance or loan or incur any indebtedness for borrowed
money, assume, guarantee, endorse or otherwise as an accommodation become
responsible for, the obligations of any
42
other individual, corporation or other person, other than in compliance with any
and all orders, supervisory agreements or directives from any of Seller's
Regulatory Agencies;
(b) sell, transfer, mortgage, encumber or otherwise dispose of any of
its properties, leasehold interests or assets to any individual, corporation or
other entity, or cancel, release or assign any indebtedness of any such person
or any contracts or agreements as in force at the date of this Agreement, other
than in compliance with any and all orders or supervisory agreements and
directives from any of Seller's Regulatory Agencies;
(c) increase in any manner the compensation or fringe benefits of any
of its employees or pay any pension or retirement allowance not required by law
or by any existing plan or agreement to any such employees, or become a party
to, amend or commit itself to any pension, retirement, profit-sharing or welfare
benefit plan or agreement or employment agreement with or for the benefit of any
employee, or voluntarily accelerate the vesting of any stock options or other
compensation or benefit, other than payment of bonuses in the ordinary course of
business consistent with past practice and general increases in compensation to
individual employees in the ordinary course of business consistent with past
practice;
(d) amend its articles of incorporation, charter, or its bylaws, except
as expressly contemplated by this Agreement or required by law or regulation, in
each case as concurred in by its counsel;
(e) change its method of accounting as in effect at December 31, 2000,
except as required by changes in generally accepted accounting principles or
required by law or regulation, in each case as concurred in by its independent
auditors;
(f) enter into or assume any Material Contract, incur any material
liability or obligation, make any material commitment, acquire or dispose of any
property or asset or engage in any transaction or subject any of Seller's
properties or assets to any material lien, claim, charge, or encumbrance of any
kind whatsoever;
(g) knowingly take or permit to be taken any action which would
constitute a breach of any representation, warranty or covenant set forth in
this Agreement;
(h) make any loan or other credit facility commitment in excess of
$500,000 (including without limitation, lines of credit and letters of credit)
to any affiliate or compromise, expand, renew or modify any such outstanding
commitment;
(i) enter into any participation arrangements or approvals or
extensions of credit in excess of $500,000 or renew, expand or modify any
outstanding participation arrangements or approvals;
43
(j) except as provided in Annex 5.2(j), purchase, sell, exchange or
otherwise dispose of any investment securities or loans that are held for sale,
prior to scheduled maturity and other than as agreed upon from time to time by
the parties, except for the sale of Trust Preferred Securities;
(k) waive, release, grant or transfer any rights of value or modify or
change in any material respect any existing agreement to which Seller is a
party, other than in the ordinary course of business consistent with past
practice;
(l) authorize, purchase, issue or sell (or authorize, issue or grant
options, warrants or rights to purchase or sell) any shares of its capital stock
or the capital stock of any of its subsidiaries, or any other equity or debt
securities of Seller or any securities convertible into Seller's or any of its
subsidiaries' capital stock;
(m) permit or allow its direct or indirect ownership of the capital
stock of Quest Holding Corporation or Asset Investment Corporation to be less
than 100% of its respective total capital stock or permit or allow its direct or
indirect ownership of the capital stock of Crusader Servicing Corporation to be
less than 60% of its capital stock;
(n) offer to or pay rates on Deposits higher than, or offer to or make
any loan at interest rates lower than, those offered or paid at any other
non-internet thrift institution located in the Philadelphia market;
(o) offer or make Loans or accept Deposits other than on a commercially
reasonable basis;
(p) offer to modify or modify any of the contractual terms on the
Deposits or the Loans, except on a commercially reasonable basis;
(q) acquire or dispose of any furniture, fixtures or equipment for the
Facilities, except for replacement of furniture, fixtures and equipment and
normal maintenance and refurbishing in the ordinary course of business of the
Facilities; and
(r) offer for sale or sell any of the Adjustment Loans, except for
Loans listed on Annex 5.2(r) attached hereto.
SECTION 5.3 Cooperation.
Seller shall cooperate with Buyer and Buyer shall cooperate with Seller
in completing the transactions contemplated by this Agreement and each shall not
take, cause to be taken or agree or make any commitment to take any action (i)
that would result in any of the material representations and warranties set
forth in this Agreement becoming untrue as of any date after the date hereof, or
(ii) in the case of Seller, that is inconsistent with or prohibited by Section
5.2.
44
SECTION 5.4 Regulatory Approvals.
The parties shall cooperate fully, and shall cause each of their
affiliates to cooperate fully, in the preparation and submission by them, as
promptly as reasonably practicable, of such notices, applications, petitions,
and other documents and materials as any of them may reasonably deem necessary
(or desirable) to the OTS, the Banking Department, the SEC, the FDIC, the
Federal Reserve Board, other regulatory authorities, holders of the voting
shares of capital stock of Seller, and any other persons for the purpose of
obtaining any approvals or consents necessary to consummate the transactions
contemplated by this Agreement. Prior to the making of any such filings with any
regulatory authority or the making of any written disclosures with respect to
the transactions contemplated hereby to shareholders or any third person (such
as mailings to shareholders or press releases), the parties shall submit to each
other the materials to be filed, mailed or released. Any such materials must be
acceptable to both Buyer and Seller (such acceptance not to be unreasonably
withheld) prior to the filings with any regulatory authorities or the
disclosures to shareholders or any third person, except to the extent that any
party is legally required to proceed prior to obtaining the acceptances of the
other parties.
SECTION 5.5 Acquisition Proposals.
Seller agrees that it and its officers and directors shall not, and
that it shall direct and use reasonable efforts to cause its employees, agents
and representatives (including, without limitation, any investment banker,
attorney or accountant retained by it) not to, initiate, solicit or encourage,
directly or indirectly, any inquiries or the making of any proposal or offer
(including, without limitation, any proposal or offer to its shareholders) with
respect to a merger, consolidation or similar transaction involving, or any
purchase, sale or other disposition of all or any significant portion of the
assets or liabilities or any equity securities of Seller (any such proposal or
offer being hereinafter referred to as an "Acquisition Proposal") or, engage in
any negotiations concerning, or provide any confidential information or data to,
or have any discussions with, any person relating to an Acquisition Proposal, or
otherwise facilitate any effort or attempt to make or implement an Acquisition
Proposal. Seller agrees that it will immediately cease and cause to be
terminated any existing activities, discussions or negotiations with any parties
conducted heretofore with respect to any of the foregoing. Seller agrees that it
will take the necessary steps to inform the appropriate individuals or entities
referred to in the first sentence hereof of the obligations undertaken by them
in this Section 5.5. Seller agrees that it will notify Buyer immediately if any
such inquiries or proposals are received by, any such information is requested
from, or any such negotiations, or discussions are sought to be initiated or
continued with it.
SECTION 5.6 Shareholder Approvals.
Crusader shall, as soon as practicable, hold a meeting of its
shareholders (the "Crusader Shareholders Meeting") to submit for shareholder
approval this Agreement and the transactions contemplated hereby. An affirmative
vote of a majority of the votes cast by all holders of Crusader
45
Common Stock entitled to vote thereon shall be required for such approval and
adoption of this Agreement and the transactions contemplated hereby. Crusader's
directors shall recommend to its shareholders approval of this Agreement, and
the transactions contemplated hereby. Seller shall cause their respective
subsidiaries to timely obtain all requisite shareholder consents and approvals
of this Agreement and the transactions contemplated hereby, if necessary.
SECTION 5.7 Proxy Preparation and Disclosure.
Following the date hereof, Crusader will prepare and file with the SEC
under the Exchange Act a proxy statement (the "Proxy Statement"), and each party
shall be responsible for providing all information concerning itself and its
subsidiaries required to be included therein. Crusader shall use all reasonable
efforts to provide, as soon as practicable prior to its filing with the SEC, a
copy of the Proxy Statement to Buyer and its counsel for review. Seller will
promptly provide Buyer with copies of all correspondence, comment letters,
notices or other communications to or from the SEC relating to the Proxy
Statement or any amendment or supplement thereto. Buyer shall cooperate with
Seller in the preparation, in accordance with the requirements of the proxy
rules under the Exchange Act, of the Proxy Statement and the filing thereof.
In connection with the Crusader Shareholders Meeting, Crusader will
duly solicit, in compliance with Section14(a) of the Exchange Act and the proxy
rules of the SEC thereunder, the affirmative vote of its shareholders by mailing
or delivering to each such shareholder, as soon as practicable after the
execution of this Agreement, the Proxy Statement, and as soon as practicable
thereafter, any amendments or supplements thereto as may be necessary to assure
that at the date of the Crusader Shareholders Meeting the Proxy Statement shall
conform to the requirements of Section 14(a) of the Exchange Act.
SECTION 5.8 Employees.
(a) Prior to the Closing Date, Buyer shall interview such employees of
Seller as Buyer shall choose, for purposes of determining employment after the
Closing Date in such positions as Buyer, in its discretion, shall choose;
however, nothing in this Agreement shall obligate or require Buyer to hire or
employ any of Seller's employees after the Closing Date. Employees of Seller
immediately prior to the Effective Time who are employed by Buyer immediately
after the Effective Time are hereinafter referred to as "Hired Employees".
(b) Buyer will provide severance payments to those employees of Seller
whose employment is terminated (other than for cause) on the Closing Date, and
who sign a release of any and all claims the employee may have against Buyer
and/or Seller. Upon receipt of the release, which shall be in form reasonably
acceptable to Buyer, the former employee shall receive severance payments in
accordance with Annex 5.8 attached hereto.
46
(c) Immediately following the Closing Date, Buyer shall enter into
agreements with Hired Employees who had employment contracts with Seller, and
who sign a release in form reasonably acceptable to Buyer of any and all claims
the Hired Employee may have against Buyer and/or Seller, providing only for
severance payments as set forth on Annex 5.8 in the same amounts as those
provided for in the Hired Employee's employment agreement with Seller, which
severance payments will be reduced by the exact amount of any salary actually
paid by Buyer to the Hired Employee. Immediately following the Closing Date,
employees of Seller who had employment contracts with Seller providing for
severance payments and who do not become Hired Employees shall receive the
amount of severance payment due under the terms of their applicable employment
contract with Seller upon the condition that such employee signs a release in
form reasonably acceptable to Buyer of any and all claims the employee may have
against Buyer and/or Seller. The Hired Employees who enter into agreements with
Buyer pursuant to this Section 5.8(c) shall be compensated (not including bonus
or overtime, as applicable) at initial salary levels no less than the salary
level of compensation such Hired Employees received from Seller immediately
prior to the Closing Date.
(d) If allowed under the terms of Buyer's programs, policies and plans
as in existence as of the Effective Time, Hired Employees shall be entitled to
participate in all employee health and welfare benefit plans and other fringe
benefit programs, (including, without limitation, hospitalization, medical, life
and disability benefit policies and plans) provided by Buyer for its employees
if they are eligible for the programs, policies and/or plans under the terms of
same and in accordance with the terms of those programs, policies and/or plans
as they may be amended and changed from time to time. If allowed under the terms
of the programs, policies and/or plans, the Hired Employees shall receive
service credit from their date of hire with Seller for purposes of eligibility
to participate in such plans.
(e) If allowed under the terms of Buyer's plans as in existence as of
the Effective Time, upon the Effective Time, Hired Employees will be entitled to
participate, pursuant to the terms of the applicable plan, in the qualified
profit sharing plans in effect at such time for employees of Buyer as they may
be amended and changed from time to time. Hired Employees shall receive service
credit from their hire date for employment with Seller for purposes of
eligibility and vesting requirements, but not for benefit accrual.
(f) Pre-existing condition requirements for health, life, disability
and other benefits and any insurance waiting period will be waived for Hired
Employees to the extent that Buyer's benefit plans, insurance policies or
programs will permit the same.
(g) Seller shall retain and pay all liability, costs, obligations,
funding requirements, excise taxes and/or fines associated with all employee and
director pension, profit sharing, health and welfare, and/or any other employee
and director benefit, deferred compensation, incentive or retirement plan of
Seller existing prior to and, as of the Closing Date, and shall indemnify and
hold harmless Buyer from any such obligations and/or liabilities thereunder.
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(h) Buyer's obligations to make severance payments pursuant to this
Section 5.8 is limited to Annex 5.8. Seller will indemnify Buyer and hold Buyer
harmless against any liabilities, claims, lawsuits or other legal proceedings
brought or raised by Hired Employees or employees of Seller whom Buyer does not
hire with respect to any severance program, plan, policy or obligation of Seller
except as set forth on Annex 5.8.
(i) Seller shall assume and pay all liability costs, obligations,
funding requirements, excise taxes and/or fines associated with all employee
pension, profit sharing, health and welfare, and/or any other employee benefit,
deferred compensation, incentive or retirement plan of Seller existing prior to
and as of the Closing Date, and Seller shall indemnify and hold harmless Buyer
from any such obligations and/or liabilities thereunder. Such indemnification
shall include, but not be limited to, all such plans, arrangements, contracts
and agreements within the scope of Sections 5.20, 4.1(oo) and 4.1(vv) of this
Agreement.
SECTION 5.9 Access to and Information Concerning Properties, Records, Etc.
Upon reasonable notice, and subject to applicable laws relating to the
exchange of information, Seller shall afford to Buyer and its representatives
(including, without limitation, directors, officers and employees of Buyer and
its affiliates, and counsel, accountants and other professionals retained) such
access during normal business hours throughout the period prior to the Effective
Time to the books, records (including, without limitation, tax returns and work
papers of independent auditors), properties, personnel and such other
information as Buyer may reasonably request in order to perform due diligence
review of the documents and items listed on Annex 5.9 (other than reports or
documentation which are not permitted to be disclosed under applicable law);
provided, however, that no investigation pursuant to this Section 5.9 shall
affect or be deemed to modify any representation or warranty made herein. Buyer
will not, and will cause its representatives not to, use any information
obtained pursuant to this Section 5.9 for any purpose unrelated to the
consummation of the transactions contemplated by this Agreement and in no event
will Buyer directly or indirectly use such information for any competitive or
commercial purpose. Subject to the requirements of law, Buyer will keep
confidential, and will cause its representatives to keep confidential, all
information and documents obtained pursuant to this Section 5.9 unless such
information (i) was already known to Buyer or an affiliate of Buyer, (ii)
becomes available to Buyer or an affiliate of Buyer from other sources not known
by such person to be bound by a confidentiality agreement, (iii) is disclosed
with the prior written approval of Seller, (iv) is or becomes readily
ascertainable from published information or trade sources or (v) was already
publicly available. In the event that this Agreement is terminated or the
transactions contemplated by this Agreement shall otherwise not be consummated,
each party shall, if so requested, promptly cause all copies of documents or
extracts thereof containing information and data as to another party hereto (or
an affiliate of any party hereto) to be returned to the party which furnished
the same.
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SECTION 5.10 Facilities Consents.
(a) Seller shall use all commercially reasonable efforts (which shall
not require Seller or its affiliates to pay any money or other consideration to
any person or to initiate any claim or proceeding against any person) to cause
every landlord of a Lease, the consent of which is required under the terms of
the applicable Lease to the assignment of such Lease to Buyer, to execute in
favor of Buyer a Landlord Consent.
(b) If, despite Seller's commercially reasonable efforts, a Landlord
Consent to assignment of a Lease cannot be obtained, or cannot be obtained
without the payment of an assignment fee or similar lump sum or rent increase,
Seller shall, if permitted without the consent of the Landlord under the Lease,
sublease the Facility to Buyer pursuant to a sublease agreement which shall be
for the remainder of the existing term of the Lease, as applicable, and which
shall provide for Buyer to perform all of the obligations of Seller under such
Lease and which otherwise shall contain mutually agreeable terms (a "Sublease
Agreement").
(c) If Seller shall be unable to deliver (i) a Landlord Consent with
respect to a Lease or (ii) a Sublease Agreement, Seller shall make available to
Buyer space at such Facility location necessary for the operations of the
applicable Facility pursuant to a Use and Occupancy Agreement substantially in
the form of Exhibit V hereto.
(d) In each of the above-described scenarios of this Section 5.10,
Buyer's assignment of lease, sublease or delivery of Use and Occupancy Agreement
shall permit Buyer to further sub-lease the Penn Center Facility.
(e) In the event that the contingencies described in paragraphs (b),
(c) and (d) cannot be accomplished in compliance with the terms of a Lease, the
rights, title and interest of the Seller and the obligations of the Seller
pursuant to the applicable Lease shall be excluded from the Purchased Assets and
the Assumed Liabilities, respectively.
SECTION 5.11 Certain Filings, Consents and Arrangements.
Buyer and Seller shall each use all reasonable efforts to obtain all
necessary approvals required to carry out the transactions contemplated by this
Agreement. Seller shall, including without limitation, furnish all information
concerning Seller as may be reasonably requested by Buyer in connection with any
such action. Buyer shall use all reasonable efforts to provide, as soon as
practicable prior to submission, Seller with copies of all material
applications, notices, petitions or other filings or submissions prepared by
Buyer in connection with consummation of the Purchase. Any comments timely
received by Buyer from Seller in connection with the foregoing will be reviewed
and considered in good faith, but Buyer shall not be bound to comply with the
recommendations set forth in such comments. Buyer will consult with Seller with
respect to the obtaining of all permits, consents, approvals and authorizations
of all third parties and governmental
49
authorities necessary or advisable to consummate the transactions contemplated
by this Agreement and Buyer will keep Seller appraised of the status of matters
relating to completion of the transactions contemplated hereby. Buyer shall
promptly furnish Seller with copies of applications to any governmental
authority in respect of the transactions contemplated hereby.
SECTION 5.12 Additional Agreements.
Subject to the terms and conditions herein provided, each of the
parties hereto agrees to use all reasonable efforts to take promptly, or cause
to be taken promptly, all actions and to do promptly, or cause to be done
promptly, all things necessary, proper or advisable under applicable laws and
regulations to consummate and make effective the transactions contemplated by
this Agreement as promptly as practicable, including using efforts to obtain all
necessary actions or non-actions, extensions, waivers, consents; and approvals
from all applicable governmental authorities, or other entities, effecting all
necessary registrations, applications and filings and obtaining any required
contractual consents and regulatory approvals.
SECTION 5.13 Notification of Certain Matters.
Each party shall give prompt notice to the others of: (a) any notice
of, or other communication relating to, a default or event that, with notice or
lapse of time or both, would become a default, received by it or any of its
subsidiaries subsequent to the date of this Agreement and prior to the Effective
Time, under any contract material to the financial condition, properties,
businesses, results of operations or prospects of it to which it is a party or
is subject; and (b) any change in its financial condition, properties, business,
or results of operations taken as a whole or the occurrence of any event which,
at the time of its occurrence, is reasonably likely to result in Buyer's or
Seller's inability to consummate the transactions as contemplated hereunder.
Each party shall give prompt notice to the other party of any notice or other
communication from any third party alleging that the consent of such third party
is or may be required in connection with the transactions contemplated by this
Agreement.
SECTION 5.14 Insurance.
Prior to Closing, Seller shall use its best efforts to retain no less
than the level of insurance coverage presently held by it as of the date hereof.
SECTION 5.15 Margin Account.
On or prior to the Closing Date, Seller shall pay off its margin
account with Deutsche Banc Xxxx Xxxxx.
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SECTION 5.16 Termination of Payday Lending Business.
Seller shall terminate, prior to the Closing Date, its short-term
consumer loan program (the "Payday Lending Business") pursuant to the
Supervisory Directive dated December 13, 2000, issued to Seller by the OTS and
Seller's plan to terminate the Payday Lending Business as set forth in
correspondence from Seller to the Regional Director of the OTS dated December
22, 2000. In connection with said termination, Seller shall close, cancel,
terminate or divest itself of any asset or liability shown on Seller's general
ledger associated with the Payday Lending Business, including receivables and
"Cash Collateral" as that term is used in Seller's December 22, 2000,
correspondence to the Regional Director of the OTS, but excepting cash received
in liquidation transactions related to the termination.
SECTION 5.17 Release of Rights.
Seller shall use its best efforts to assist Buyer to obtain from each
of the shareholders of Crusader Servicing Corporation listed on Annex 5.17
attached hereto, a release of such shareholder's right of first refusal to
purchase Seller's capital stock in Crusader Servicing Corporation pursuant to
the Shareholders Agreement, dated as of October 2, 1996, by and among Crusader
Savings Bank, FSB, Xxxxxx X. Xxxxx, Xxxx Xxxxxx and Crusader Servicing
Corporation and any amendments or modifications thereto. In the event that Buyer
does not receive said releases from each of the Crusader Servicing Corporation
shareholders listed on Annex 5.17 hereto, Buyer may, in its discretion,
terminate the Agreement pursuant to Section 7.1(c).
SECTION 5.18 Update Schedules.
Except for Schedule D hereto, which shall be updated by Seller every
thirty (30) days from the date of this Agreement to the date of Seller's
Preliminary Closing Trial Balance, Seller shall promptly disclose to Buyer, in
writing, any change, addition, deletion or other modification to the information
set forth in the Schedules, Annexes, or Exhibits to this Agreement, including
the loan portfolio. Notwithstanding the foregoing, disclosures made subsequent
to the date of this Agreement shall not relieve Seller from any and all
liabilities for prior written statements and disclosures to Buyer.
SECTION 5.19 Tax Issues.
(a) From and after the Closing Date, Seller shall protect, defend,
indemnify and hold harmless Buyer from any and all liability for federal income
tax attributable to recapture of any Rehabilitation Credit that has been
allowable to Quest Holding Corporation ("Quest") prior to the Closing Date (but
only to the extent any such recapture results from the closing of the Purchase
under this Agreement and exclusive of any reduction in investment credit
carryover apportioned to Quest pursuant to Treasury Regulation
ss1.1502-79(c)(2)(ii)("Indemnified Taxes").
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(b) In the case of any audit, examination or other proceeding
("Proceeding") with respect to Indemnified Taxes for which Seller is or may be
liable pursuant to this Agreement, Buyer shall promptly inform Seller, and shall
afford Seller, at Seller's expense, the opportunity to control the conduct of
such Proceeding. Buyer shall execute or cause to be executed powers of attorney
or other documents necessary to enable Seller to take all actions desired by
Seller with respect to such Proceeding to the extent such Proceeding may affect
either the amount of Indemnified Taxes for which Seller is liable pursuant to
this Agreement. Seller shall have the right to control any such Proceeding, and,
if requested by Seller, Buyer shall file any claim for refund, amended return or
other federal income tax document that Seller deems appropriate with respect to
taxable years affected by such Indemnified Taxes. If requested by Buyer, Seller
shall provide to Buyer an opinion from counsel (other than in-house counsel)
that there is substantial authority for the position that Seller is requesting
Buyer to take in connection with any such filings, and Buyer need not file any
claim for refund, amended return or other federal income tax document until any
such requested opinion is delivered to Buyer.
(c) The parties agree that any indemnification payments made by Seller
with respect to Indemnified Taxes shall be treated for all tax purposes as an
adjustment to the Allocation Purchase Price and that Buyer shall not be entitled
to additional compensation for any reduction in tax benefits attributable to the
receipt of such payments.
SECTION 5.20 Liability Transfers.
Prior to Closing, Seller shall transfer from Quest Holding Corporation,
all contracts, agreements, plans, arrangements and all liabilities associated
therewith, relating to or in connection with any employee deferred compensation,
retirement plans and benefits, post retirement benefits, pension benefits or
rights, incentive compensation, supplemental employee retirement benefits or
rights, or split dollar insurance. It is expressly understood that Buyer shall
have no financial or other liability under such contracts, agreements, plans or
arrangements. Immediately prior to or as of the Closing Date, Seller shall
withdraw, and shall use reasonable commercial efforts to substitute Buyer, as a
participating provider, party or trustee under all qualified and all
non-qualified employee and director pension, profit sharing, deferred
compensation, incentive, supplemental retirement and split dollar insurance
plans, employment agreements and contracts of Crusader Servicing Corporation and
will cease to provide any such employee benefits as of the Closing Date.
SECTION 5.21 Trademarks, etc.
Seller shall not sell, transfer, assign or otherwise dispose of any of
its right, title and interest, except to Buyer, in its corporate name,
including, but not limited to, all trade names, fictitious names, logos, service
marks and trademarks.
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SECTION 5.22 WARN Act Notices.
Seller shall provide any notices required under the WARN Act at least
sixty (60) days prior to the Closing Date.
SECTION 5.23 Agreed Upon Procedures.
Buyer shall direct Xxxxx Xxxxxxxx, LLP, or such other accounting firm
chosen by Buyer, to perform the procedures contemplated pursuant to Section
6.2(k) hereof and shall pay the expenses associated with the performance of said
procedures.
ARTICLE VI
CONDITIONS
SECTION 6.1 Common Conditions.
The respective obligations of the parties to consummate the transaction
contemplated by this Agreement shall be subject to the satisfaction or waiver
prior to the Closing Date of the following conditions:
(a) The Agreement, and the transactions contemplated hereby shall have
been approved by the requisite vote of the shareholders of Seller and its
subsidiaries, if necessary, in accordance with applicable law.
(b) All approvals, notices to, consents or waivers required by any of
the Seller Regulatory Agencies or the Buyer Regulatory Agencies with respect to
this Agreement and the transactions contemplated hereby shall have been obtained
and shall remain in full force and effect, and all applicable statutory waiting
periods shall have expired; and the parties shall have procured all other
regulatory approvals, consents or waivers of governmental authorities or other
persons that are necessary to the consummation of the transactions contemplated
by this Agreement except those approvals, consents or waivers, if any, which, in
Buyer's sole discretion, if not so obtained, would not have a material adverse
effect on Buyer, Seller, the Purchased Assets or the Assumed Liabilities after
giving effect to the transactions contemplated herein; provided, however, that
no such approval shall have imposed any condition or requirement which in the
reasonable opinion of the board of directors of Buyer renders consummation of
the transactions contemplated by this Agreement inadvisable.
(c) All other requirements prescribed by law which are necessary to the
consummation of the transactions contemplated by this Agreement shall have been
satisfied.
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(d) No party hereto shall be subject to any order, decree or injunction
of a court or agency of competent jurisdiction which enjoins or prohibits the
consummation of the transactions contemplated by this Agreement, and no
litigation or proceeding shall be pending against any of the parties herein or
any of their subsidiaries brought by any governmental agency seeking to prevent
consummation of the transactions contemplated hereby.
(e) No statute, rule, regulation, order, injunction or decree shall
have been enacted, entered, promulgated or enforced by any governmental
authority which prohibits, restricts or makes illegal consummation of the
transactions contemplated by this Agreement.
SECTION 6.2 Conditions Precedent to Obligations of Buyer.
The obligation of Buyer to consummate the Buyer transactions
contemplated by this Agreement will be subject to the satisfaction, on or before
the Closing Date, of each and every one of the following conditions all or any
of which may be waived, in whole or in part, by Buyer:
(a) Performance of Seller. Each of the acts, undertakings and covenants
of Seller to be performed on or before the Closing Date will have been duly
performed in all material respects.
(b) Representations True at Closing. The representations and warranties
made by Seller herein will be true and correct in all material respects on the
Closing Date hereunder with the same force and effect as though such
representations and warranties had been made on and as of such time except to
the extent that such representations and warranties may become untrue or
incorrect as a result of actions or transactions of Seller made with the consent
of Buyer or as contemplated by this Agreement.
(c) Certified Resolutions. Seller will have furnished Buyer with a
certified copy of resolutions duly adopted by the Board of Directors of Seller
authorizing the execution, delivery and performance of this Agreement and the
transactions contemplated hereby.
(d) No Injunction. No action, proceeding, regulation or legislation
will have been instituted or threatened before any court, governmental agency or
legislative body to enjoin or prohibit the consummation of the transactions
contemplated hereby.
(e) Deliveries of Seller. Buyer shall have received the items to be
delivered by Seller pursuant to Section 3.2.
(f) Employee Releases. Buyer shall have obtained a releases
contemplated by Section 5.8 hereof.
(g) Shareholder Releases. Buyer shall have obtained a release executed
by each shareholder of Crusader Servicing Corporation identified on Annex 5.17
giving up all rights of first
54
refusal to purchase Seller's capital stock in Crusader Servicing Corporation
pursuant to the Shareholders Agreement dated October 2, 1996, by and among
Crusader Savings Bank, FSB, Xxxxxx X. Xxxxx, Xxxx Xxxxxx and Crusader Servicing
Corporation and any amendments or modifications thereto.
(h) Payday Lending Business. Seller shall have terminated its Payday
Lending Business pursuant to the Supervisory Directive dated December 13, 2000,
issued to Seller by the OTS and its plan to terminate the Payday Lending
Business as set forth in correspondence from Seller to the Regional Director of
the OTS dated December 22, 2000.
(i) Authorizations. Buyer shall have received all required approvals,
consents or waivers (i) to retain and operate the Castor Avenue Facility as a
branch office of Buyer and (ii) either to consolidate the branch located at the
Walnut Branch Facility into Buyer's branch office located at 0000 Xxxxxx Xxxxxx,
Xxxxxxxxxxxx, Pennsylvania, or to retain and operate Seller's branch located at
the Walnut Branch Facility.
(j) Estoppel Certificate. Buyer shall have received from Seller
estoppel certificates from all tenants under the Leases to the Facilities
providing that there are no claims, demands or obligations unsatisfied by Seller
which would give rise to any action at law or in equity against Seller pursuant
to the Leases.
(k) Agreed Upon Procedures. Xxxxx Xxxxxxxx, LLP or such other
accounting firm as chosen by Buyer, shall have furnished to Buyer an "agreed
upon procedures" letter, dated the Closing Date, in form and substance
satisfactory to Buyer to the effect that, based upon a procedure performed with
respect to the financial condition of Seller, for the period from June 30, 2000,
to last day of the calendar quarter ended immediately preceding the Closing
Date, including but not limited to (a) their inspection of the minute books of
Seller, (b) inquiries made by them of officers and other employees of Seller
responsible for financial and accounting matters as to transactions and events
during the period, as to consistency of accounting procedures with prior periods
and as to the existence and disclosure of any material contingent liabilities,
and (c) other procedures and inquiries specified and performed by them stating
(A) as of a specified date not more than five (5) days prior to the date of such
letter, the capitalization of Seller, and (B) that nothing has come to their
attention that would indicate that any material adjustments would be required to
the Seller's Trial Balance as of the last day of the calendar quarter ended
immediately preceding the Closing Date, in order for it to be in conformity with
GAAP.
SECTION 6.3 Conditions Precedent to Obligations of Seller.
The obligation of Seller to consummate the Seller transactions
contemplated by this Agreement will be subject to the satisfaction, on or before
the Closing Date, of each and every one of the following conditions, all or any
of which may be waived, in whole or in part, by Seller:
55
(a) Performance of Buyer. Each of the acts, undertakings and covenants
of Buyer to be performed on or before the Closing Date will have been duly
performed in all material respects.
(b) Representations True at Closing. The representations and warranties
made by Buyer herein will be true and correct in all material respects on the
Closing Date hereunder with the same force and effect as though such
representations and warranties had been made on and as of such time except to
the extent that such representations and warranties may become untrue or
incorrect as a result of actions or transactions of Buyer made with the consent
of Seller or as contemplated by this Agreement.
(c) Certified Resolutions. Buyer will have furnished Seller with a
certified copy of resolutions duly adopted by the Board of Directors of Buyer
authorizing the execution, delivery and performance of this Agreement and
transactions contemplated hereby.
(d) Seller shall have received the items to be delivered by Buyer
pursuant to Section 3.3.
ARTICLE VII
TERMINATION OF AGREEMENT
SECTION 7.1 Termination by the Parties.
This Agreement may be terminated by the parties with the effects stated
in Section 7.2 in any of the following ways:
(a) by the mutual, written consent of Seller and Buyer if the board of
directors of each so determines by a vote of a majority of the members of the
entire Board;
(b) by Seller if (i) by written notice to Buyer that there has been a
material breach by Buyer of any representation, warranty, covenant or agreement
contained herein and such breach is not cured or not curable within thirty (30)
days after written notice of such breach is given to Buyer by Seller or (ii) by
written notice to Buyer that any condition precedent to Seller's obligations as
set forth in Article VI of this Agreement has not been met or waived by Seller,
through no fault of Seller, on July 31, 2001;
(c) by Buyer by written notice to Seller, in the event (i) of a
material breach by Seller of any representation, warranty, covenant or agreement
contained herein and such breach is not cured or not curable within thirty (30)
days after written notice of such breach is given to Seller by Buyer or (ii) any
condition precedent to Buyer's obligations as set forth in Article VI of this
Agreement has not been met or waived by Buyer, through no fault of Buyer on July
31, 2001;
(d) by Buyer by written notice to Seller pursuant to Section 2.11
hereof;
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(e) by Buyer, by March 9, 2001, at 5:00 p.m. prevailing time, by giving
written notice to Seller if any matter or thing has come to the attention of
Buyer in the course of Buyer's due diligence review or otherwise with respect to
the Assets or Liabilities of Seller that leads Buyer to believe such matter or
thing would have a material and adverse impact on the transactions contemplated
by this Agreement;
(f) by Buyer by written notice to Seller in the event of a breach by
Seller of any representation, warranty, covenant or agreement contained herein
if Buyer determines that such breach individually or when aggregated with all
such breaches is material. For purposes of this Section 7.1(f), the term
"material" refers to those items, which, individually or when aggregated, in the
reasonable opinion of Buyer, have an impact in a pre-tax amount greater than a
negative $750,000; or
(g) by Buyer or Seller by written notice if Buyer makes upward
adjustments to the Purchase Reserves on any loan on Schedule E as of the date of
this Agreement or adds additional Loans to Schedule E pursuant to Section 2.6(c)
that result in an aggregate increase to the Due Diligence Reserve as of the date
of this Agreement (as adjusted in accordance with Section 2.6(b)) in excess of
$1,500,000.00.
(h) by Seller or Buyer in writing if the purchase, sale and assumption
contemplated hereby has not been consummated on or before July 31, 2001.
SECTION 7.2 Effect of Termination.
In the event of the termination of this Agreement, this Agreement shall
thereafter become void and have no effect, except that the provisions of
Sections 4.1(p) (Fees), Section 5.9 (relating to confidentiality and return of
documents), Section 9.7(Press Releases and Publicity) and Sections 7.3 and 9.9
(Expenses) of this Agreement shall survive any such termination and abandonment.
SECTION 7.3 Expenses.
Any termination of this Agreement pursuant to Sections 7.1(a), 7.1(e),
7.1(f), 7.1(g) or 7.1(h) hereof shall be without cost, expense or liability on
the part of any party to the others. Any termination of this Agreement pursuant
to Section 7.1(b), 7.l(c) or 7.1(d) hereof shall also be without cost, liability
or expense on the part of any party to the others, unless the material breach of
a representation or warranty or covenant is caused by the willful conduct or
gross negligence of a party, in which event said party shall be liable to the
other parties for all out-of pocket costs and expenses, including without
limitation, reasonable legal, accounting and investment banking fees and
expenses, incurred by such other party in connection with their entering into
this Agreement and their carrying out of any and all acts contemplated hereunder
(the "Expenses").
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So long as Buyer shall not have breached its obligations hereunder, if
this Agreement is terminated by Buyer pursuant to Section 7.1(c) or 7.1(f) and
the material breach of a representation, warranty, covenant or agreement is
caused by the willful conduct or gross negligence of Seller, Seller shall
promptly, but in no event later than four (4) Business Days after such
termination, pay Buyer a fee of $500,000.00, which amount shall be payable by
wire transfer of same day funds; provided, however, that if Seller shall, in
addition to having so breached its representation, warranty, covenant or
agreement within six (6) months of the later of July 31, 2001 or the date of
termination of this Agreement, enters into an agreement or other understanding
with a corporation, financial institution, entity or person (other than Buyer)
for such corporation, financial institution, entity or person to acquire, merge
or consolidate with Seller or to purchase or acquire all or substantially all of
Seller's assets, then Seller shall pay Buyer an additional fee of $1,500,000.00
payable to Buyer no later than four (4) Business Days after entering into such
agreement or understanding, which amount shall be payable by wire transfer of
same day funds. If Seller fails to promptly pay the amount due pursuant to this
Section 7.3, and, in order to obtain such payment, Buyer commences a suit which
results in a judgment against Seller for all or a substantial portion of the fee
set forth in this Section 7.3, Seller shall pay to Buyer all costs and expenses
(including reasonable attorneys' fees) incurred by Buyer in connection with such
suit.
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1. Indemnification.
(a) For a period of twelve (12) months following the Closing Date,
Seller shall indemnify, hold harmless and defend Buyer and its employees,
officers, directors, agents and affiliates at all times after the Closing Date
from and against any and all Damages arising out of any actions, suits or
proceedings commenced on or prior to the Closing Date (other than proceedings to
prevent or limit the consummation of this Agreement) relating to operations at
the Facilities; and Seller shall indemnify, hold harmless and defend Buyer from
and against all Damages arising out of any actions, suits or proceedings
commenced on or after the Closing Date but which relate to operations at the
Facilities on or prior to the Closing Date or resulting from real estate, sales
and use, social security and unemployment taxes, all accounts payable and
operating expenses including salaries, rents and utility charges, which the
Buyer may receive, suffer or incur in connection with operations and
transactions occurring prior to the Closing Date, and which involve the
Purchased Assets and the Assumed Liabilities. Seller agrees further to defend,
indemnify, and hold harmless Buyer against all Damages and obligations resulting
from any material breach of this Agreement, representation, or warranty, or
failure to perform any covenant made by Seller in this Agreement or in any
certificate delivered to Buyer hereunder, which inaccuracy, failure or breach is
asserted and a claim for indemnification with respect thereto is made within
twelve (12) months after the earlier of the Closing Date or termination of this
Agreement under Section 7.1 hereof. Seller shall indemnify Buyer against, and
protect, defend and hold harmless Buyer from all Damages arising out of or in
58
connection with any liability or obligation of Seller that is not assumed by
Buyer pursuant to this Agreement.
(b) For a period of twelve (12) months following the Closing Date,
Buyer shall indemnify, hold harmless and defend Seller at all times after the
Closing Date from and against any and all Damages arising out of any actions,
suits or proceedings commenced after the Closing Date (other than proceedings to
prevent or limit the consummation of this Agreement) relating to operations at
the Facilities; or resulting from real estate, sales and use, social security
and unemployment taxes, all accounts payable and operating expenses including
salaries, rents and utility charges, which Seller may receive, suffer or incur
in connection with operations and transactions occurring after the Closing Date,
and which involve the Purchased Assets or the Assumed Liabilities. Buyer agrees
further to defend, indemnify, and hold harmless Seller against all Damages and
obligations resulting from any breach of this Agreement, representation, or
warranty or failure to perform any covenant made by Buyer in this Agreement or
in any certificate delivered to Seller hereunder, which inaccuracy, failure or
breach is asserted and a claim for indemnification with respect thereto is made
within twelve (12) months after the earlier of the Closing Date or termination
of this Agreement under Section 7.1 hereof.
(c) No Damages incurred by either party will be payable under this
Section 8.1 by the indemnifying party unless such Damages in the case of claims
made under the first sentence of Section 8.1(a), relate to claims for
indemnification that aggregate more than $50,000, in which case indemnification
will be made for the aggregate Damages.
SECTION 8.2 Indemnification Procedures.
(a) The indemnified party will give the indemnifying party written
notice of a threatened or pending claim within fifteen (15) calendar days
(except in the case where the indemnified party's first notice is its receipt of
a complaint, in which such time for giving notice shall be five (5) 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
indemnifying party will then have fifteen (15) 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 indemnifying party will be
given the indemnified party's full cooperation and assistance in maintaining
such defense. The indemnifying party shall not be liable for any amounts in
settlement of a claim or action as described above if such settlement is
effected without the indemnifying party's written consent, which consent shall
not be unreasonably withheld. It is understood that the obligations of the
indemnifying party under this paragraph shall survive the Closing Date, except
that, in the event that Bank and Crusader are liquidated and/or dissolved within
four (4) years after the earlier of the Closing Date or the termination of this
Agreement under Section 7.1 hereof, the obligation of Buyer pursuant to this
Section 8.2 shall cease.
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(b) In any case where one party will seek indemnification under this
Agreement for a third party claim, suit or proceeding ("Third Party Claim"),
such indemnification will be conditioned on such indemnified party's compliance
with the following procedures:
(i) the indemnifying party is defending against the Third Party
Claim, the indemnified party may, but will not be obligated
to, participate in the defense of any such third party claim,
suit or proceeding, at its own expense and using counsel of
its own choosing, but the indemnifying party will be entitled
to control the defense thereof unless the indemnified party
has relieved the indemnifying party from liability with
respect to the particular matter. The indemnified party will
cooperate and provide such assistance as the indemnifying
party reasonably may request in connection with the
indemnifying party's defense and will be entitled to recover
from the indemnifying party the reasonable costs of providing
such assistance. The indemnifying party will inform the
indemnified party on a regular basis of the status of such
claim, suit or proceeding and the indemnifying party's defense
thereof.
(ii) In any Third Party Claim the defense of which is controlled by
the indemnifying party, the indemnifying party will not,
without the indemnified party's prior written consent,
compromise or settle such claim, suit or proceeding if: (a)
such compromise or settlement would impose an injunction or
other equitable relief upon the indemnified party; or (b) such
compromise or settlement does not include the third party's
release of the indemnified party from all liability relating
to such claim, suit or proceeding for which the indemnified
party is entitled to be indemnified.
(c) If the indemnifying party fails to timely defend, contest or
otherwise protect against any such claim, suit or proceeding, and fails to
contest in writing the indemnified party's right to indemnification, the
indemnified party may, but will not be obligated to, defend, contest or
otherwise protect against the same, and make any compromise or settlement
thereof and recover the entire costs thereof from the indemnifying party,
including reasonable fees and disbursements of counsel and all amounts paid as a
result of such claim, suit or proceeding and the compromise or settlement
thereof.
(d) The obligation to indemnify an indemnified party's officers,
directors, employees and agents in accordance with this Section 8.2 may be
enforced exclusively by such indemnified party and nothing herein will be
construed to grant such officers, directors, employees and agents any individual
rights, remedies, obligations or liabilities with respect to the parties to this
Agreement. The parties to this Agreement may amend or modify this Agreement in
any respect without the consent of such officers, directors, employees and
agents.
SECTION 8.3 Limitations on Liability.
No party shall be entitled to indemnification pursuant to Section 8.1
or 8.2 for any Damages in excess of five hundred thousand dollars ($500,000) in
the aggregate.
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ARTICLE IX
MISCELLANEOUS PROVISIONS
SECTION 9.1 Effect of Disclosure.
Notwithstanding anything in this Agreement to the contrary, no party
hereto shall have any liability for any misrepresentation or breach of warranty
or covenant under this Agreement to the extent that the inaccuracy of the
representation or the breach of warranty or covenant upon which such liability
will be based is disclosed in a Schedule, Annex or Exhibit to this Agreement or
in any document delivered pursuant to this Agreement (whether or not such
Schedule, Annex, Exhibit or document is referred to in the representation,
warranty or covenant which is alleged to have been breached).
SECTION 9.2 Entire Agreement.
This Agreement together with the schedules, annexes and exhibits
attached hereto constitute the entire agreement between the parties hereto
pertaining to the subject matters hereof and supersedes all negotiations,
preliminary agreements and all prior or contemporaneous discussions and
understandings of the parties hereto in connection with the subject matter
hereof.
SECTION 9.3 Amendments.
No amendment, change or modification of any of the terms, provisions or
conditions of this Agreement will be effective unless made in writing and signed
or initialed on behalf of the parties hereto by their duly authorized
representatives.
SECTION 9.4 Waiver or Extension.
Except with respect to required approvals of applicable governmental or
regulatory authorities, either party, by written instrument signed by one of its
executive officers, 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 in any document delivered pursuant hereto
or (b) compliance with any of the undertakings, obligations, covenants or other
acts contained herein.
SECTION 9.5 Survival.
The representations, warranties and agreements of the parties set forth
in this Agreement shall survive for a period of twelve months following the
later of the Closing Date or the termination of this Agreement, except for the
covenant contained in Sections 5.19 and 5.21 which shall survive until date of
the dissolution of Seller.
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SECTION 9.6 Assignment.
This Agreement and all of the provisions hereof will be binding upon,
and will 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 may be assigned by either of the
parties hereto without the prior written consent of the other.
SECTION 9.7 Public Announcements; Nondisclosure.
Seller and Buyer will consult with each other before issuing any press
release or otherwise making any public statements or customer notification with
respect to this Agreement and the transactions contemplated hereby. Neither
Seller nor Buyer will issue any such press release or make any such public
statement before such consultation, except as may be required by law or by any
listing agreement with any national securities exchange.
SECTION 9.8 Brokers.
Buyer and Seller each represent and warrant to one another that neither
has contracted for or otherwise utilized the services of a broker in connection
with this Agreement and the transactions contemplated hereby, except that Seller
has retained Sandler X'Xxxxx & Partners, L.P. and Xxxxxx, Xxxxxx & Co., LLC as
its financial advisors. Each party will indemnify the other party against and in
respect of any claim against the other for brokers' fees or other commissions
relative to this Agreement and the transactions contemplated hereby incurred by
the indemnifying party's employees, agents or consultants.
SECTION 9.9 Payment of Expenses.
Except as otherwise expressly provided herein and in any Schedules,
Annexes, or Exhibits hereto, each party will bear and pay all costs and expenses
incurred by it or on its behalf in connection with the transactions contemplated
hereunder, including without limitation any expenses, fees, and costs necessary
for any approvals of the appropriate Federal and/or State regulatory
authorities, which will be paid by the party seeking such approval; provided,
however that Buyer shall be responsible for all cost and expenses related to the
assignment of the mortgages and the Loan documents, including, without
limitation, filing and recordation fees, and for all costs and expenses related
to any notice to Depositors of the assumption of deposit liabilities provided
for in this Agreement.
SECTION 9.10 No Third Party Beneficiaries.
Nothing in this Agreement, express or implied, is intended to confer
upon any person other than the parties hereto or their respective successors and
assigns any rights, remedies, obligations or liabilities under or by reason of
this Agreement.
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SECTION 9.11 Bulk Transfer Laws.
Seller will comply with all bulk transfer laws applicable in the
Commonwealth of Pennsylvania and the State of Delaware and will timely file any
and all tax clearance certificates or similar documents as may be required.
SECTION 9.12 Addresses for Notice, etc.
All notices, requests, demands, consents and other communications
provided for hereunder and under the related documents will be in writing and
mailed (by registered or certified mail) or delivered via facsimile transmission
to the applicable party at the addresses indicated below:
If to Seller: Crusader Savings Bank, F.S.B.
0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Attention: Xxxxx X. Xxxx
Phone Number: (000) 000-0000
Facsimile Number: (000) 000-0000
Crusader Holding Corporation
0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Attention: Xxxxx X. Xxxx, President
Phone Number: (000) 000-0000
Facsimile Number: (000) 000-0000
With a copy to:
Xxxxxx Xxxxx, Esquire
Ballard, Spahr, Xxxxxxx & Ingersoll, LLP
0000 Xxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxxxxx, XX 00000-0000
Phone Number: (000) 000-0000
Facsimile Number: (000) 000-0000
If to Buyer: Royal Bank of Pennsylvania
Attention: Xxxxx X. XxXxxxxxx, CIO/CFO
000 Xxxxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Phone Number: (000) 000-0000
Facsimile Number: (000) 000-0000
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With a copy to:
Xxxxxxxx Xxxxx, Xx., Esquire
Xxxxxxxx Xxxxxxxx, P.C.
X.X. Xxx 00
Xxxxxxxxxx, XX 00000-0000
Phone Number: (000) 000-0000
Facsimile Number: (000) 000-0000
or, as to each party, at such other address as will be designated by such party
in a written notice to the other party complying as to delivery with the terms
of this Section.
SECTION 9.13 Counterparts.
This Agreement may be executed simultaneously in two or more
counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same instrument.
SECTION 9.14 Headings.
The headings of the Sections and Articles of this Agreement are
inserted for convenience only and will not constitute a part hereof.
SECTION 9.15 Governing Law.
This Agreement will be governed by, construed and enforce in accordance
with, the laws of the Commonwealth of Pennsylvania, without regard to its
conflicts of laws principles.
SECTION 9.16 Severability.
If any provision of this Agreement or any application thereof will be
invalid or unenforceable, the remainder of this Agreement and any other
application of such provision will not be affected thereby.
SECTION 9.17 Waiver, Delay, etc.
No failure or delay by any party in exercising any rights, powers or
privileges under this Agreement will operate as a waiver thereof; nor will any
single or partial exercise of any right, power or privilege hereunder preclude
any other or further exercise thereof or the exercise of any other right, power
or privilege.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed by their duly authorized officers and their corporate seals to be
affixed as of the date first written above.
ATTEST: ROYAL BANK OF PENNSYLVANIA
______________________________ By:____________________________________
, President
ATTEST: CRUSADER SAVINGS BANK, F.S.B.
_______________________________ By:____________________________________
,
President
ATTEST: CRUSADER HOLDING CORPORATION
_______________________________ By:____________________________________
,
President
ATTEST: ASSET INVESTMENT CORPORATION
_______________________________ By:____________________________________
,
President
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SCHEDULE A
EXCLUDED ASSETS
All goodwill associated with the Purchased Assets on Seller's Preliminary and
Final Closing Trial Balances (i.e., the goodwill on Seller's consolidated
financial statements as of December 31, 2000, was $1,007,249)
Capital Stock of the Excluded Subsidiaries
Bank's partnership interest in Washington Square Partners, L.P.
Pre-paid Current Income Taxes
All Mortgages, Loans or evidences of indebtedness underwritten or originated by
National Chinese Mortgage Corporation.(1)
Seller's minute books, corporate seals, and stock records
--------
(1) Mortgages, Loans or other evidences of indebtedness underwritten or
originated by National Chinese Mortgage Corporation may be eliminated from this
Schedule A if a third-party consultant mutually agreed upon by Buyer and Seller
determines that such loan, mortgage or evidence of indebtedness is in compliance
with all laws, regulations and rules applicable to such loan, mortgage or
evidence of indebtedness, or has cured any prior non-compliance.
