STOCK PURCHASE AGREEMENT
This
STOCK PURCHASE AGREEMENT (this “Agreement”)
dated
as
of June 30, 2005 is made and entered into by and between XXXXX X. XXXXX &
ASSOCIATES, INC., a New Jersey corporation (“Purchaser”),
HARLEYSVILLE NATIONAL CORPORATION, a Pennsylvania corporation (“HNC”),
and
HARLEYSVILLE NATIONAL BANK AND TRUST COMPANY, a national bank (“Seller”).
Capitalized terms not otherwise defined herein have the meanings set forth
in
Section 11.01.
WHEREAS,
HNC is a registered bank holding company and Seller is a wholly-owned subsidiary
of HNC; and
WHEREAS,
Seller owns one thousand (1,000) shares of common stock, no par value, of
Cumberland Advisors, Inc., a New Jersey corporation (“Company”),
constituting all issued and outstanding shares of capital stock of Company
(such
shares being referred to herein as the “Shares”);
and
WHEREAS,
Seller desires to sell, and Purchaser desires to purchase, the Shares on the
terms and subject to the conditions set forth in this Agreement.
NOW,
THEREFORE, in consideration of the mutual covenants and agreements set forth
in
this Agreement, and for other good and valuable consideration, the receipt
and
sufficiency of which are hereby acknowledged, and intending to be legally bound
hereby, the parties hereto agree as follows:
ARTICLE
I
SALE
OF SHARES AND CLOSING
1.01 Purchase
and Sale. Seller
agrees to sell to Purchaser, and Purchaser agrees to purchase from Seller,
all
of the right, title and interest of Seller in and to the Shares free from any
and all Liens at the Closing on the terms and subject to the conditions set
forth in this Agreement.
1.02 Purchase
Price. The
aggregate purchase price for the Shares is $2,000,000.00 (the “Purchase
Price”),
payable in immediately available United States funds at the Closing in the
manner provided in Section 1.03.
1.03 Closing. The
Closing will take place at the offices of DeCotiis, FitzPatrick, Xxxx &
Xxxxxx, LLP, 000 Xxxxx X. Xxxx Xxxxxxxxx, Xxxxxxx, Xxx Xxxxxx 00000, or at
such
other place as Purchaser and Seller mutually agree, at 10:00 A.M. local time,
on
the Closing Date. At the Closing, Purchaser will pay the Purchase Price by
wire
transfer of immediately available funds to such account as Seller may reasonably
direct. Simultaneously, Seller will assign and transfer to Purchaser good and
valid title in and to the Shares, free and clear of all Liens, by delivering
to
Purchaser a certificate or certificates representing the Shares, in genuine
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and
unaltered form, duly endorsed in blank or accompanied by duly executed stock
powers endorsed in blank, with requisite stock transfer tax stamps, if any,
attached. At the Closing, there shall also be delivered to Seller and Purchaser
the certificates and other documents to be delivered under Articles V and
VI.
ARTICLE
II
REPRESENTATIONS
AND WARRANTIES OF HNC AND SELLER
HNC
and
Seller hereby represent and warrant to Purchaser as follows:
2.01 Corporate
Existence of Seller. Seller
is a national banking association, duly organized, validly existing and in
good
standing under the Laws of the United States. Seller has all necessary power
and
authority to execute and deliver this Agreement and to perform its obligations
hereunder and to consummate the transactions contemplated hereby, including
without limitation to own, hold, sell and transfer (pursuant to this Agreement)
the Shares.
2.02 Authority. The
execution and delivery by Seller of this Agreement and the performance by Seller
of its obligations hereunder have been duly and validly authorized by the Board
of Directors of Seller, no other corporate action on the part of Seller or
its
stock-holders being necessary. This Agreement has been duly and validly executed
and delivered by Seller and constitutes a legal, valid and binding obligation
of
Seller enforceable against Seller in accordance with its terms.
2.03 Corporate
Existence of Company.
Company is a corporation duly incorporated, validly existing and in good
standing under the Laws of the State of New Jersey, and has full corporate
power
and authority to conduct its business as and to the extent now conducted and
to
own, use and lease its Assets and Properties.
2.04 Capital
Stock. The
authorized capital stock of Company consists solely of two thousand five hundred
(2,500) shares of Common Stock, of which only the Shares have been issued.
The
Shares are duly authorized, validly issued, outstanding, fully paid and
nonassessable. Seller owns the Shares, beneficially and of record, free and
clear of all Liens. There
are
no shares of Common Stock issuable upon the exercise of outstanding Options
or
otherwise.
The
delivery of a certificate or certificates at the Closing representing the Shares
in the manner provided in Section 1.03 will transfer to Purchaser good and
valid
title to the Shares, free and clear of all Liens other than Liens created or
suffered to exist by Purchaser.
2.05 No
Conflicts. The
execution and delivery by Seller of this Agreement and the performance by Seller
of its obligations under this Agreement and the consummation of the transactions
contemplated hereby will not:
(a) conflict
with or result in a violation or breach of any of the terms, conditions or
provisions of the certificate or Certificate of Incorporation or By-laws of
Seller or Company; or
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(b)
conflict with or result in a violation or breach of any term or provision of
any
Law or Order applicable to Seller, or any of its Assets and
Properties.
2.06
Governmental
Approvals and Filings.
Other
than notification to the Comptroller of Currency, no consent, approval or action
of, filing with or notice to any Governmental or Regulatory Authority on the
part of Seller, is required in connection with the execution, delivery and
performance of this Agreement or the consummation of the transactions
contemplated hereby except (i) where the failure to obtain any such consent,
approval or action, to make any such filing or to give any such notice could
not
reasonably be expected to adversely affect the ability of Seller to consummate
the transactions contemplated by this Agreement or to perform its obligations
hereunder or to have a material adverse effect on the Business or Condition
of
Company, and (ii) those as would be required solely as a result of the identity
or the legal or regulatory status of Purchaser or any of its
Affiliates.
2.07 Taxes.
(a) Company
and the HNC Consolidated Group have filed all Tax Returns that were required
to
be filed.
(b) All
such
Tax Returns were correct and complete.
(c) All
Taxes
owed by Company and the HNC Consolidated Group (whether or not shown on any
Tax
Return) have been paid.
(d) Except
with respect to the taxable year ending December 31, 2004, Company and the
HNC
Consolidated Group are currently not the beneficiary of any extension of time
within which to file any Tax Return.
(e) No
written claim has been received from an authority in a jurisdiction where
Company or the HNC Consolidated Group does not file Tax Returns that it is
or
may be subject to taxation by that jurisdiction.
(f) There
are
no Liens on any of the assets of any of Company or the HNC Consolidated Group
that arose in connection with any failure (or alleged failure) to pay any
Tax.
(g) To
the
Knowledge of Seller, Company and its Affiliated Group have withheld and paid
all
Taxes required to have been withheld and paid in connection with amounts paid
or
owing to any employee, independent contractor, creditor, stockholder, or other
third party.
(h) Company
is a member of an Affiliated Group filing a consolidated federal income Tax
Return the common parent of which is HNC (the “HNC
Consolidated Group”).
HNC
has filed an extension to file a consolidated federal income Tax Return with
Company and other Affiliates for the 2004 taxable year.
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(i) There
is
no dispute or claim concerning any liability for any Tax of Company or the
HNC
Consolidated Group either: (A) claimed or raised by any authority in writing
or
(B) as to which HNC, Seller or Company and the officers (and employees
responsible for Tax matters) of HNC, Seller or Company have knowledge,
including, without limitation, all claims or disputes concerning any liability
for any Tax relating to the State of New York.
(j) Schedule
2.07
lists
all federal, state, local, and foreign income Tax Returns filed with respect
to
Company for all taxable periods that have not closed under the applicable
statute of limitations, indicates those Tax Returns that have been audited,
and
indicates those Tax Returns that currently are the subject of
audit.
(k) HNC
and
Seller have delivered to Purchaser correct and complete copies of all state
(including the applicable portion of the consolidated federal return which
is
included in such state filing), local or foreign income Tax Returns, examination
reports, and statements of deficiencies assessed against or agreed to by Company
relating to the periods ending December 31, 2002, 2003 and 2004. Within thirty
days after the filing of any and all 2005 all state (including the applicable
portion of the consolidated federal return which is included in such state
filing), local or foreign income Tax Returns prepared and filed for any interim
or short-year taxable periods ending on the Closing Date, HNC shall promptly
deliver such filed Tax Returns to Purchaser.
(l) Company
or the HNC Consolidated Group have not currently waived any statute of
limitations in respect of Taxes or agreed to any extension of time with respect
to a Tax assessment or deficiency.
(m) To
the
Knowledge of Seller, Company and the HNC Consolidated Group has disclosed on
its
federal income Tax Returns all positions taken therein that could give rise
to a
substantial understatement of Federal Income Tax within the meaning of Code
§6662.
(n)
Except
for that certain Tax Sharing Agreement between Harleysville National Corporation
and its Subsidiaries (a copy of which was delivered to Purchaser) which Company
is neither a party or otherwise bound by its terms, Company or the HNC
Consolidated Group are not parties to any Tax allocation or sharing agreement.
Company (A) has been a member of Affiliated Groups filing a consolidated federal
income Tax Return and (B) has no liability for the Taxes of any member of the
HNC Consolidated Group under Treas. Reg. §1.1502-6 (or any similar
provision of state, local, or foreign law), as a transferee or successor, by
contract, or otherwise.
2.08 Legal
Proceedings.
(a) To
the
Knowledge of Seller, there are no Actions or Proceedings pending or threatened
against, relating to or affecting Seller, Company or any of their respective
Assets and Properties which could reasonably be expected (i) to result in the
issuance of an Order restraining, enjoining or otherwise prohibiting or making
illegal the consummation of any of the transactions contemplated by this
Agreement, or (ii) individually or in the aggregate with
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other
such Actions or Proceedings, to have a material adverse effect on the Business
or Condition of Company.
(b) To
the Knowledge of Seller, there are no Orders outstanding against Company which,
individually or in the aggregate with other such Orders, materially adversely
affect the Business or Condition of Company.
2.09 Compliance
With Laws and Orders.
To the
Knowledge of Seller, Company is not in violation of or in default under any
Law
or Order applicable to Company or any of their respective Assets and Properties
the effect of which, individually or in the aggregate with other such violations
and defaults, could reasonably be expected to be materially adverse to the
Business or Condition of Company.
2.10 Intentionally
Omitted.
2.11 Intentionally
Omitted.
2.12 Insurance. Schedule
2.12
contains
a true and complete list of all material insurance policies held by Seller
for
the benefit of Company currently in effect that insure the business, operations
or employees of Company or affect or relate to the ownership, use or operation
of any of the Assets and Properties of Company and that (i) have been
issued to Company or (ii) have been issued to any Person (other than Company)
for the benefit of Company. The insurance coverages provided by the policies
described above will terminate with respect to Company as of the Closing
Date.
2.13 Indebtedness.
To the
Knowledge of Seller, neither Seller nor HNC has incurred any indebtedness under
which Company is currently an obligor.
2.14 Affiliate
Transactions.
Except
for Seller providing Company with insurance coverage, employee benefits, and
payroll administration, (i) there is no Indebtedness between Company, on the
one
hand, and Seller, any officer, director, Affiliate (other than Company) or
Associate of Seller or any Associate of any such officer, director or Affiliate,
on the other, (ii) neither Seller nor any such officer, director, Affiliate
or Associate provides or causes to be provided any assets, services or
facilities to Company which are individually or in the aggregate material to
the
Business or Condition of Company, (iii) Company does not provide or cause to
be
provided any assets, services or facilities to Seller or any such officer,
director, Affiliate or Associate which are individually or in the aggregate
material to the Business or Condition of Company and (iv) Company does not
beneficially own, directly or indirectly, any Investment Assets issued by Seller
or any such officer, director, Affiliate or Associate
2.15 Brokers. Other
than Xxxxxxx Financial Group, LLC serving as an advisor to Seller, all
negotiations relative to this Agreement and the transactions contemplated hereby
have been carried out by Seller directly with Purchaser without the
in-tervention of any Person on behalf of Seller in such manner as to give rise
to any valid claim by any Person against Purchaser or Company for a finder’s
fee, broker-age commission or similar payment.
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2.16 Exclusivity
of Representations. THE
REPRESENTATIONS AND WARRANTIES MADE BY SELLER IN THIS ARTICLE II ARE THE
EXCLUSIVE REPRESENTATIONS AND WARRANTIES MADE BY SELLER. SELLER HEREBY DISCLAIMS
ANY OTHER EXPRESS OR IMPLIED REPRESENTATIONS OR WARRANTIES WITH RESPECT TO
ITSELF, ITS AFFILIATES AND COMPANY. THE CONDITION OF COMPANY AND ITS ASSETS
AND
LIABILITIES SHALL BE “AS IS” AND “WHERE IS.”
ARTICLE
III
REPRESENTATIONS
AND WARRANTIES OF PURCHASER
Purchaser
hereby represents and warrants to Seller as follows:
3.01 Corporate
Existence. Purchaser
is a corporation duly incorporated, validly existing and in good standing under
the Laws of the State of New Jersey. Purchaser has full corporate power and
authority to execute and deliver this Agreement and to perform its obligations
hereunder and to consummate the transactions contemplated hereby.
3.02 Authority. The
execution and delivery by Purchaser of this Agreement and the per-formance
by
Purchaser of its obligations hereunder have been duly and validly authorized
by
the Board of Directors of Purchaser, no other corporate action on the part
of
Purchaser or its stockholders being necessary. This Agreement has been duly
and
validly executed and delivered by Purchaser and constitutes a legal, valid
and
binding obligation of Purchaser enforceable against Purchaser in accordance
with
its terms.
3.03 No
Conflicts. The
execution and delivery by Purchaser of this Agreement do not, the performance
by
Purchaser of its obligations under this Agreement and the consummation of the
transactions contemplated hereby will not:
(a) conflict
with or result in a violation or breach of any of the terms, conditions or
provi-sions of the Certificate of Incorporation or By-laws of
Purchaser;
(b)
conflict with or result in a violation or breach of any term or provision of
any
Law or Order applicable to Purchaser; or
(c)
reasonably be expected to adversely affect the ability of Seller to consummate
the transactions contemplated hereby or to perform its obligations hereunder,
(i) conflict with or result in a violation or breach of, (ii) constitute (with
or without notice or lapse of time or both) a default under, (iii) require
Purchaser to obtain any consent, approval or action of, make any filing with
or
give any notice to any Person as a result or under the terms of, or (iv) result
in the creation or imposition of any Lien upon Purchaser or any of its Assets
or
Properties under, any Contract or License to which Purchaser is a party or
by
which any of its Assets and Properties is bound.
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3.04 Governmental
Approvals and Filings. Except
as disclosed in Schedule 3.04
hereto,
no consent, approval or action of, filing with or notice to any Governmental
or
Regulatory Authority on the part of Purchaser is required in connection with
the
execution, delivery and performance of this Agreement or the consummation of
the
transactions contemplated hereby, except where the failure to obtain any such
consent, approval or action, to make any such filing or to give any such notice
could not reasonably be expected to adversely affect the ability of Seller
to
consummate the transactions contemplated by this Agreement or to perform its
obligations hereunder.
3.05 Legal
Proceedings. There
are no Actions or Proceedings pending or, to the knowledge of Purchaser,
threatened against, relating to or affecting Purchaser or any of its Assets
and
Properties which could reasonably be expected to result in the issuance of
an
Order restraining, enjoining or otherwise prohibiting or making illegal the
consummation of any of the transactions contemplated by this
Agreement.
3.06 Brokers.
All
negotiations relative to this Agree-ment and the transactions contemplated
hereby have been carried out by Purchaser directly with Seller without the
inter-vention of any Person on behalf of Purchaser in such manner as to give
rise to any valid claim by any Person against Seller or Company for a finder’s
fee, brokerage commission or similar payment.
3.07 Financial
Information.
All
internally prepared listings of fixed assets and summaries of accounts
receivable, accounts payable and any other financial statements provided or
previously provided by Xxxxx X. Xxxxx to Seller and/or HNC are accurate,
complete and in accordance with the books and records of Company and present
fairly the information disclosed thereon as of their respective dates and
results of operations of Company for the periods then ended.
ARTICLE
IV
COVENANTS
4.01 Regulatory
and Other Approvals. Purchaser
will, and will cause Company to, (a) take all commercially reasonable
steps
necessary or xxxxx-able, and proceed diligently and in good faith and use all
commercially reasonable efforts, as promptly as practicable to obtain all
consents, approvals or actions of, to make all filings with and to give all
notices to Governmental or Regulatory Authorities or any other Person required
of Company to consummate the transactions contemplated hereby and
(b) provide such other information and communications to such Governmental
or Regulatory Authorities or other Persons as such Governmental or Regulatory
Authorities or other Persons may reasonably request in connection therewith.
4.02 Life
and Disability Insurance Policy.
To the
extent assignable, Seller agrees to promptly assign the current life insurance
policy in the amount of $2,000,000 and the
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current
disability policy for Xxxxx X. Xxxxx to Purchaser. Purchaser shall reimburse
Seller at the Closing for any prepaid premiums covering periods after the
Closing.
4.03 Kotok
Employment Agreement.
Seller
and HNC hereby assign all the rights, title and interest under the Employment
Agreement by and among Xxxxx X. Xxxxx, Millennium Bank and Company, dated May
30, 2003, and any subsequent amendments thereto, including the Amendment to
Employment Agreement by and among Xxxxx X. Xxxxx, Millennium Bank, Company,
HNC
and Seller dated October 15, 2003, to Purchaser, as of the Closing, and
Purchaser hereby assumes all obligations of Seller and HNC under such Employment
Agreement, as amended.
4.04
Pension
Plan and 401k Participation by Company's Employees.
Seller shall comply with the requirements of ERISA (and any similar state or
local law or regulation) in connection any employees of Company who immediately
prior to the Closing were participating in Seller's pension and 401k plans,
including using commercially reasonable efforts to effect each such employee's
preference for disposition of the funds upon submission of the necessary
paperwork
by the
former plan participant.
4.05 Continuation
of Personnel.
As of
the Closing, Purchaser shall hire the individuals listed on Schedule
4.05
and
shall be assume all payroll and other responsibilities for such individuals
effective immediately after the Closing. On or before the Closing, Company
shall
reimburse Seller for the payroll being paid on June 30, 2005 on behalf of
Company.
4.06 Tangible
Personal Property.
Seller
and HNC have no rights, title or interest in and shall make no claim to the
assets located as of the Closing Date at 000 Xxxxxx Xxxxxx, Xxxxxxxx, Xxx Xxxxxx
00000 or those listed on Schedule
4.06
attached
hereto.
4.07 Intellectual
Property Rights.
(a) Seller
and HNC have no rights, title or interest in and shall make no claim to the
following items existing as of the Closing Date (to the extent that they are
owned or prepared by Company): Securities and Exchange Commission registrations,
accounts and notes receivable of Company, investment advisory contracts,
broker/dealer lists, research and development reports regarding investment
advisory services, analyst reports and other reports prepared by Company and
its
personnel, operating guides and manuals, creative, advertising and promotional
materials for Company, studies, records and data regarding Company operations
(including customer and client records), telephone and fax numbers, prepaid
expenses and refunds unless specifically excluded elsewhere in this Agreement,
licenses/permits of Company that are assignable or transferable, all
claims/causes of action specifically relating to Company or its business,
computer software owned or licensed, Company’s websites, web-designs, domain
names, e-mail addresses, trademarks, copyrights, service marks, and leasehold
interests, and Company name and logo.
(b) The
parties agree that the following items existing as of the Closing Date are
dually owned by Seller and Company: financial and accounting records of
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Company
provided to Seller for use in preparing tax returns, general business records
of
Company (including federal/state/local filings), personnel records for Company
personnel (including payroll records), and tax returns relating to Company;
provided,
however,
that
with regard to the tax returns and payroll records, Company is just entitled
to
copies of such items.
(c) Neither
Company nor Purchaser shall use the "Harleysville" name and logo following
the
Closing. Neither Seller nor HNC shall use the name “Cumberland” and logo
following the Closing.
ARTICLE
V
CLOSING
DELIVERIES OF SELLER
Seller
shall deliver the following certificates and documents to Purchaser at the
Closing:
5.01 Share
Certificate.
A share
certificate representing the Shares in the manner provided in Sections 1.01
and
1.03.
5.02 Officers’
Certificate. A
certificate, dated the Closing Date and executed by the President or the
Executive Vice President of Seller, substantially in the form and to the effect
of Exhibit A
hereto
5.03
Secretary's
Certificate.
A
certificate, dated the Closing Date and executed by the Secretary or any
Assistant Secretary of Seller, substantially in the form and to the effect
of
Exhibit B
hereto.
5.04
Resignations.
The
resignation of each of Company’s Board of Directors appointed by Seller,
including those of Xxxx Xxxxxx, Xxxxxxx Takes and Xxxxxxx High, effective as
of
the Closing Date.
5.05
IRS
Forms 8023.
The
Form 8023 (and any comparable state, local or foreign forms) referred to in
Section 8.01(b) with all the information relevant to the Seller and/or HNC,
as
the case may be, filled in and executed by Seller and HNC.
ARTICLE
VI
CLOSING
DELIVERIES OF PURCHASER
Purchaser
shall deliver the following additional documents to Seller at the
Closing:
6.01 Officers’
Certificate. A
certificate, dated the Closing Date and executed by the Chairman of the Board,
the President or any Vice Presi-dent of Purchaser, substantially in the form
and
to the effect of Exhibit C
hereto.
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6.02.
Secretary's
Certificate.
A
certificate, dated the Closing Date and executed by the Secretary or any
Assistant Secretary of Purchaser, substantially in the form and to the effect
of
Exhibit D
hereto.
6.03
Release
from Kotok.
A
release, dated the Closing Date, from Xxxxx X. Xxxxx, substantially in the
form
and to the effect of Exhibit
E
attached
hereto.
6..04 IRS
Form 8023.
A copy
of the fully executed and completed Form 8023 (and any comparable state, local
in foreign forms) in accordance with Section 8.01(b).
6.05 Purchase
Price.
The
Purchase Price in immediately available funds per Section 1.20.
ARTICLE
VII
SURVIVAL
7.01 Survival
of Representations and Warranties. The
representa-tions and warranties, covenants and agreements of Seller and
Purchaser contained in this Agreement will survive the Closing for a period
of
twelve (12) months; provided that: (i) the Tax indemnification provisions of
Section 9.01 shall survive the Closing for a period of three (3) years and
(ii)
the representations and warranties set forth in Section 2.08 shall survive
the
Closing until the expiration of all applicable statutes of limitation (including
all periods of extension).
ARTICLE
VIII
CERTAIN
POST-CLOSING MATTERS
8.01 Tax
Returns; Section 338(h)(10) Election.
(a) The
following provisions shall govern the allocation of responsibility as between
Company and Purchaser, on the one hand, and Seller and HNC, on the other, for
certain tax matters following the Closing Date:
(i) HNC
and
Purchaser acknowledge that the taxable year of Company for federal and New
Jersey state income tax purposes will end at the close of business on the
Closing Date (the “Short
Taxable Period”).
HNC
shall include the taxable income, gain, loss, deduction and credits of Company
(including any deferred items triggered into income by Treas. Reg. 1.1502-13
and
any excess loss account taken into income under Treas. Reg. 1.1502-19) for
the
Short Taxable Period on HNC’s consolidated federal income Tax Returns. HNC shall
prepare or cause to be prepared and file or cause to be filed, within the time
and in the manner provided by law, all Tax Returns of Company for all periods
ending on or before the Closing Date that are due after the Closing Date. HNC
or
Seller shall pay the amount of all Taxes shown
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as
due on
such Tax Returns, including on the Company’s New Jersey state income Tax Return
for the taxable year ended on December 31, 2004 and the Short Taxable Period.
Purchaser agrees that at the reasonable request of Seller, an officer of
the
Company shall sign any Tax Return filed pursuant to this paragraph.
Notwithstanding the foregoing, if an officer of the Company is requested
to sign
any Tax Return prepared by Seller or HNC, such Tax Return shall be subject
to
the approval and review by Purchaser (which approval shall not be unreasonably
withheld or delayed) prior to filing.
(ii) Company
shall prepare or cause to be prepared and file or cause to be filed any Tax
Returns for Tax periods after the Closing Date. To the extent the Purchaser
claims that Seller is responsible for any Taxes with respect to such Tax
periods, the Tax Returns for such Tax periods shall be subject to the review
and
approval of Seller (which approval shall not be unreasonably withheld or
delayed). Seller shall pay to Company within fifteen (15) days after the date
on
which Taxes are paid with respect to such periods an amount equal to the portion
of such Taxes which relates to the portion of such taxable period ending on
the
Closing Date to the extent such Taxes are not reflected in the current liability
accruals for Taxes (excluding reserves for deferred Taxes) shown on Company’s
books and records as of the Closing Date. For purposes of this Section
8.01(a)(ii), the portion of such Taxes which relate to the portion of such
Taxable period ending on the Closing Date shall be deemed equal to the amount
which would be payable if the relevant Taxable period ended on the Closing
Date
and the books and records of the Company were closed on such date. All
determinations necessary to give effect to the foregoing shall be made in a
manner consistent with prior tax accounting practices of Company.
(iii) Purchaser
and Company on one hand and Seller and HNC on the other hand shall (A) cooperate
fully, as reasonably requested, in connection with the preparation and filing
of
Tax Returns pursuant to this Section 8.01 and any audit, litigation or other
proceeding with respect to Taxes; (B) make available to the other, as reasonably
requested, all information, records or documents with respect to Taxes, Tax
Returns and Tax matters pertinent to Company for all periods ending prior to
or
including the Closing Date; and (C) preserve information, records or documents
relating to Taxes, Tax Returns and Tax matters pertinent to Company that are
in
their possession or under their control until the expiration of any applicable
statute of limitations or extensions thereof.
(iv) Seller
shall timely pay all transfer, documentary, sales, use, stamp, registration
and
other Taxes and fees arising from or relating to the transactions contemplated
by this Agreement except those imposed upon the Purchaser by applicable law,
and
Seller shall, at their own expense, file all necessary Tax Returns and other
documentation with respect to all such transfer, documentary, sales, use, stamp,
registration, and other Taxes and fees. If required by applicable law, Purchaser
and Company will join in the execution of any such Tax Returns and other
documentation.
(b) The
parties agree to join in making a timely election under Section 338(h)(10)
of
the Code (and any comparable state or local provisions) with respect to
the
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purchase
of the Shares pursuant to this Agreement (any such election a “Section 338
Election”) and in furtherance thereof agree as follows:
(i) Seller
will include any income, gain, loss, deduction, or other tax item resulting
from
the Section 338 Election on their Tax Returns to the extent permitted
by
applicable law. Purchaser and Seller shall cooperate fully with each other
in
the making of such election. In particular, Purchaser shall be responsible
for
the preparation and filing of all Tax Returns and forms (the “Section 338
Forms”)
required under applicable tax law to be filed in connection with making the
Section 338 Election.
(ii) Purchaser
shall prepare the allocation of the Purchase Price and the liabilities of
Company to the assets of Company for all purposes, materially consistent with
the allocation set forth on Schedule
8.01(b)
or in a
manner as required by Sections 338 and 1060 of the Code and the Treasury
Regulations promulgated thereunder (the “Allocation”).
Purchaser and Seller agree that such Allocation shall be binding on each of
them
and shall be used for purposes of determining the modified aggregate deemed
sales price under Treasury Regulations and in reporting the deemed sale of
assets of Company in connection with the Section 338 Election. Each
of
Purchaser and HNC shall prepare and file Forms 8883 (an any applicable forms
required under state or local law) in respect to each Section 338 Election
in a
timely manner fully consistent with the Allocation and shall not take any
position on any financial or regulatory statement or Tax Return or in any Tax
audit or proceeding that is inconsistent with the Allocation. The parties shall
each provide evidence to the other party that such forms were timely filed.
(iii) Prior
to
Closing, Purchaser shall prepare a completed set of IRS Forms 8023 (and any
comparable forms required to be filed under state, local or foreign tax law)
and
any additional data or materials required to be attached to Forms 8023
pursuant to the Treasury Regulations promulgated under Section 338 of
the
Code. Purchaser shall deliver said forms to Seller three days prior to the
Closing Date for review and execution. Seller and Purchaser shall execute and
deliver Forms 8023 at Closing. Seller shall promptly file Form 8023 with the
appropriate Internal Revenue Service office and shall promptly furnish Purchaser
with written proof of such filing.
(iv) No
new
elections with respect to Taxes, or any changes in current elections with
respect to Taxes, affecting Company after the Section 338 Election shall be
made
after the date of this Agreement without the prior written consent of the
Purchaser and Seller.
(c) Purchaser
and Seller agree as follows with respect to the allocation of income Tax
liabilities:
(i) Seller
shall be liable for all federal income Taxes attributable to Company and the
HNC
Consolidated Group for the period prior to the Closing Date (including all
Taxes
resulting from the Section 338 Election). Seller shall also be entitled
to
receive all federal Tax refunds and credits received for such period. Purchaser
shall be liable for all federal income Taxes of Company for the period after
the
Closing Date, including Taxes resulting from
-17-
a
change
in the accounting method of Company after the Closing Date. Company shall
also
be entitled to receive all federal Tax refunds and credits received for such
period.
(ii) Seller
shall be liable for any state, local, or foreign Tax attributable to an election
under state, local, or foreign law similar to the election available under
Section 338(h)(10) of the Code. Further, if a state, local or foreign
jurisdiction does not have provisions similar to the election available under
Section 338(h)(10) of the Code, Seller will be liable for any Tax imposed
on Company and the HNC Consolidated Group by such state, local and/or foreign
jurisdiction resulting from the transactions contemplated by this Agreement.
Finally, Seller will be liable for nonfederal income Taxes of Company and HNC
Consolidated Group ending on or before the Closing Date. Seller shall also
be
entitled to receive all nonfederal Tax refunds and credits received for such
period. Purchaser and Company will be liable for nonfederal income Taxes of
Company for the period ending after the Closing Date, including Taxes resulting
from a change in the accounting method of Company after the Closing Date.
Company and Purchaser shall also be entitled to receive all nonfederal Tax
refunds and credits received for such period.
(iii) Seller
and HNC agree to indemnify Purchaser against any and all Losses sustained by
Purchaser or the Company from an invalid Section 338 Election, but only to
the
extent such invalidity is caused by an act of Seller or HNC or the failure
of
Seller or HNC to take action with respect to the Section 338 Election as
contemplated by this Agreement or as reasonably requested by Purchaser.
Purchaser agrees to indemnify Seller or HNC against any and all Losses sustained
by Seller or HNC from an invalid Section 338 Election, but only to the extent
such invalidity is caused by an act of Purchaser or the failure of Purchaser
to
take action with respect to the Section 338 Election contemplated by this
Agreement or reasonably requested by Seller or HNC.
(d) As
of the
Closing Date, Purchaser acknowledges and covenants that there is no
plan,
intention, arrangement or understanding to, and that it will not for
the
six (6) month period commencing on July 1, 2005 and ending on December 31,
2005
(the "QSP Period"), take any action of any nature, including by way of merger
or
liquidation, that would prevent the purchase of the Shares hereunder from
constituting a "qualified stock purchase" under U.S. Treasury Regulation
1.338-3, it being expressly recognized that during the QSP Period, the
liquidation of the Company (including the upstream merger of the Company with
and into Purchaser), or the making of a "qualified subchapter Subsidiary"
election within the meaning of Section 1361 of the Code with respect to the
Company, will not be inconsistent with the terms of this Section
8.01(d).
8.02 Future
Sales of Company. In
the
event that Purchaser consummates the sale of Company (by asset sale, stock
sale
or merger) to a subsequent buyer within twelve (12) months following June 30,
2005 for an amount greater than $2,200,000.00, Purchaser agrees to share the
amount in excess of $2,200,000.00 from such future sale equally with Seller.
For
purposes of this Section 8.02, "future sales" shall not include any partial
sale, conveyances, conversions, mergers, consolidations, actual or deemed
liquidations (including, without limitation, a qualified subchapter Subsidiary
election), acquisitions or any other transaction with Affiliates or
-18-
Affiliated
Groups of Purchaser or any sale or transfer of stock or any other security
to an
employee of Company pursuant to any Benefit Plans.
ARTICLE
IX
INDEMNIFICATION
AND RELEASES
9.01 Tax
Indemnification. HNC
and
Seller shall jointly and severally indemnify Company and the Purchaser and
hold
them each harmless from and against, any and all Losses attributable to: (i)
all
Taxes (or the nonpayment thereof) of Company or the HNC Consolidated Group
for
all taxable periods ending on or before the Closing Date and the portion through
the end of the Closing Date for any taxable period that includes (but does
not
end on) the Closing Date, (ii) all Taxes of any member of an affiliated,
consolidated, combined or unitary group of which Company (or any predecessor)
is
or was a member on or prior to the Closing Date, including pursuant to Treas.
Reg. 1.1502-6 or any analogous or similar state, local or foreign law or
regulation, and (iii) any and all Taxes of any person (other than Company)
imposed on Company as a transferee or successor, by contract or pursuant to
any
law, rule or regulation, which Taxes relate to an event or transaction occurring
before the Closing; provided,
however,
that
HNC and Seller shall not be responsible to indemnify Company and the Purchaser
from any Losses which result from Purchaser's breach of or misrepresentation
under Section 3.07 hereof. Company and Purchaser shall indemnify Seller and
HNC
(and any affiliate or either of them) and hold them harmless from and against
any and all Losses attributable to all Taxes of the Company for all taxable
periods beginning after the Closing Date and the portion after the Closing
Date
of any taxable period that begins before and includes (but does not end on)
the
Closing Date.
9.02 Other
Indemnification.
(a)
Seller shall indemnify Pur-chaser in respect of, and hold it harmless from
and
against, any and all Losses suffered, incurred or sustained by it or to which
it
becomes subject, resulting from, arising out of or re-lating to any
misrepresentation, breach of warranty or nonfulfillment of or failure to perform
any covenant or agreement on the part of Seller contained in this
Agreement.
(b) The
Purchaser shall indemnify Seller in respect of, and hold it harmless from and
against, any and all Losses suffered, incurred or sustained by it or to which
it
becomes subject, resulting from, arising out of or re-lating to any
misrepresentation, breach of warranty or nonfulfillment of or failure to perform
any covenant or agreement on the part of Purchaser contained in this
Agreement.
(c)
Seller and HNC jointly and severally agree to indemnify, defend and hold
harmless Xxxxx X. Xxxxx, an individual, the Company and Purchaser from and
against any and all losses, liabilities, fines, penalties or other punitive
or
remedial actions based upon, arising out of or otherwise resulting from any
civil or criminal investigation, proceeding, litigation, audit
-19-
or
inquiry by the United States Securities and Exchange Commission ("SEC"), United
States Department of Justice or any other federal, state or local governmental
authority resulting from HNC or Seller's violation or failure to comply with
the
rules and regulations of the SEC or any other statues and laws: (i) resulting
from the unauthorized activities of one of its officers as set forth in Item
4,
Controls and Procedures of HNC's 10-Q for quarter ended June 30, 2004, or (ii)
resulting from the conduct of its officers who are designees to the Board of
Company, which officers’ resignations are set forth within Section 5.04
herein.
9.03
Releases.
As
of the
Closing:
(a) Seller
and HNC do hereby remise, release and forever discharge Company, Purchaser
and
Xxxxx X. Xxxxx and their respective representatives, affiliates, predecessors,
transferees, successors and assigns ("Purchaser
Parties"),
from
any and all claims, debts, obligations, reckonings, liabilities, promises,
covenants, agreements, contracts, endorsements, bonds, specialties,
controversies, suits, actions, causes of action, trespasses, variances,
judgments, extents, executions, damages, claims or demands, whatsoever, in
law,
in admiralty or in equity, past and future, which they have or may have against
Company and Purchaser upon or by reason of any matter, cause or thing
whatsoever; provided,
however,
that
this release shall not release the Purchaser Parties from any obligations
arising under this Agreement.
(b) Purchaser
does hereby remise, release and forever discharge HNC and Seller and their
respective representatives, affiliates, predecessors, transferees, successors
and assigns ("Seller
Parties"),
from
any and all claims, debts, obligations, reckonings, liabilities, promises,
covenants, agreements, contracts, endorsements, bonds, specialties,
controversies, suits, actions, causes of action, trespasses, variances,
judgments, extents, executions, damages, claims or demands, whatsoever, in
law,
in admiralty or in equity, past and future, which they have or may have against
HNC and Seller upon or by reason of any matter, cause or thing whatsoever;
provided,
however,
that
this release shall not release the Seller Parties from any obligations arising
under this Agreement.
ARTICLE
X
ANTI-DISPARAGEMENT
10.01
Anti-Disparagement.
The
parties agree that neither party nor their Affiliates shall make any disparaging
statements regarding the other.
-20-
ARTICLE
XI
DEFINITIONS
11.01 Definitions.
(a) Defined
Terms.
As used
in this Agreement, the following defined terms have the meanings indicated
below:
“Actions
or Proceedings”
means
any action, suit, proceeding, arbitration or Governmental or Regulatory
Authority investigation.
“Affiliate”
means
any Person that directly, or indirectly through one of more intermediaries,
controls or is controlled by or is under common control with the Person
speci-fied. For purposes of this definition, control of a Person means the
power, direct or indirect, to direct or cause the direction of the management
and policies of such Person whether by Contract or otherwise and, in any event
and without limitation of the previous sentence, any Person owning ten percent
(10%) or more of the voting securities of another Person shall be deemed to
control that Person.
“Affiliated
Group”
means
any affiliated group within the meaning of Code Section 1504(a) or any similar
group defined under a similar provision of state, local or foreign
law.
“Agreement”
means
this Stock Purchase Agree-ment and the Exhibits and the Schedules
hereto.
“Allocation”
has the
meaning provided in Section 8.02(b)(ii).
“Assets
and Properties”
of any
Person means all assets and properties of every kind, nature, character and
description (whether real, personal or mixed, whether tangible or intan-gible,
and wherever situated), including the goodwill related thereto, operated, owned
or leased by such Person.
“Associate”
means,
with respect to any Person, any corporation or other business organization
of
which such Person is an officer or partner or is the beneficial owner, directly
or indirectly, of ten percent (10%) or more of any class of equity securities,
any trust or estate in which such Person has a substantial beneficial interest
or as to which such Person serves as a trustee or in a similar capacity and
any
relative or spouse of such Person, or any relative of such spouse, who has
the
same home as such Person.
“Benefit
Plan”
means
any Plan established by Company or any predecessor or Affiliate of Company,
existing at the Closing Date or at any time within the five (5) year period
prior thereto, to which Company contributes or has contributed, or under which
any employee, former employee or director of Company or any beneficiary thereof
is covered, is eligible for coverage or has benefit rights.
-21-
“Books
and Records”
means
all files, documents, instruments, papers, books and records relating to the
Business or Condition of Company, including without limitation financial
statements, Tax Returns and related work papers and letters from accountants,
budgets, pricing guidelines, ledgers, journals, deeds, title policies, minute
books, stock certificates and books, stock transfer ledgers, Contracts,
Licenses, customer lists, computer files and programs, retrieval programs,
operating data and plans and environmental studies and plans.
“Business
Day”
means a
day other than Saturday, Sunday or any day on which banks located in the
Commonwealth of Pennsylvania and the State of New Jersey are authorized or
obligated to close.
“Business
or Condition of Company”
means
the business, financial condition or results of operations of
Company.
“Closing”
means
the closing of the transactions contemplated by Section 1.03.
“Closing
Date”
means
Thursday, June 30, 2005 or on such other date as mutually agreed to in writing
by HNC, Seller and Purchaser.
“Code”
means
the Internal Revenue Code of 1986, as amended, and the rules and regulations
promulgated thereunder.
“Common
Stock”
means
the common stock, no par value per share, of Company.
“Company”
has the
meaning ascribed to it in the forepart of this Agreement.
“Contract”
means
any agreement, lease, license, evidence of Indebtedness, mortgage, indenture,
security agreement or other contract.
“ERISA”
means
the Employee Retirement Income Security Act of 1974, as amended, and the rules
and regulations promulgated thereunder.
“Governmental
or Regulatory Authority”
means
any court, tribunal, arbitrator, authority, agency, commission, official or
other instrumentality of the United States or any domestic county, city or
other
political subdivision.
“HNC
Consolidated Group”
has the
meaning provided in Section 2.07(h)
“Indebtedness”
of any
Person means all obligations of such Person (i) for borrowed money, (ii)
evidenced by notes, bonds, debentures or similar instruments, (iii) for the
deferred purchase price of goods or services (other than trade payables or
accruals incurred in the ordinary course of business), (iv) under capital leases
and (v) in the nature of guarantees of the obligations described in clauses
(i)
through (iv) above of any other Person.
-22-
“Investment
Assets”
means
all debentures, notes and other evidences of Indebtedness, stocks, securities
(including rights to purchase and securities convertible into or exchangeable
for other securities), interests in joint ventures and general and limited
partnerships, mortgage loans and other investment or portfolio assets owned
of
record or beneficially by Company and issued by any Person other than Company
(other than trade receivables generated in the ordinary course of business
of
Company).
“IRS”
means
the United States Internal Revenue Service.
“Knowledge
of Seller”
means
the actual knowledge of the President and Executive Vice President of
Seller.
“Laws”
means
all laws, statutes, rules, regulations, ordinances and other pronouncements
having the effect of law of the United States or any state, county, city or
other political subdivision or of any Governmental or Regulatory
Authority.
“Liabilities”
means
all Indebtedness, obligations and other liabilities of a Person (whether
absolute, accrued, contingent, fixed or otherwise, or whether due or to become
due).
“Liens”
means
any mortgage, pledge, assess-ment, security interest, lease, lien, adverse
claim, levy, charge or other encumbrance of any kind, or any condi-tional sale
Contract, title retention Contract or other Con-tract to give any of the
foregoing.
“Loss”
means
any and all damages, fines, penalties, deficiencies, losses and expenses
(including without limitation interest, court costs, reasonable fees of
attorneys, accountants and other experts or other reasonable expenses of
litigation or other proceedings or of any claim, default or assessment).
“Option”
with
respect to any Person means any security, right, subscription, warrant, option,
“phantom” stock right or other Contract that gives the right to (i) purchase or
otherwise receive or be issued any shares of capital stock of such Person or
any
security of any kind convertible into or exchangeable or exercisable for any
shares of capital stock of such Person or (ii) receive or exercise any benefits
or rights similar to any rights enjoyed by or accruing to the holder of shares
of capital stock of such Person, including any rights to participate in the
equity or income of such Person or to participate in or direct the election
of
any directors or officers of such Person or the manner in which any shares
of
capital stock of such Person are voted.
“Order”
means
any writ, judgment, decree, injunction or similar order of any Governmental
or
Regulatory Authority (in each such case whether preliminary or final).
“Plan”
means
any bonus, incentive compensation, deferred compensation, pension, profit
sharing, retirement, stock purchase, stock option, stock ownership, stock
appreciation rights, phantom stock, leave of absence, layoff, vacation, day
or
dependent care, legal services, cafeteria, life, health, medical, accident,
disability, workmen’s compensation or
-23-
other
insurance, severance, separation or other employee benefit plan, and/or
supplemental benefits, practice, policy or arrangement of any kind, whether
written or oral, including, but not limited to, any “employee benefit plan”
within the meaning of Section 3(3) of ERISA.
“Person”
means
any natural person, corpora-tion, general partnership, limited partnership,
proprietorship, other business organization, trust, union, association or
Governmental or Regulatory Authority.
“Purchase
Price”
has the
meaning ascribed to it in Section
1.02.
“Purchaser”
has the
meaning ascribed to it in the forepart of this Agreement.
“Section
338 Election”
has the
meaning provided in Section 8.01(b).
“Seller”
has the
meaning ascribed to it in the forepart of this Agreement.
“Shares”
has the
meaning ascribed to it in the forepart of this Agreement.
“Tax
Returns”
means
any return (including any interim, short-year or pro-forma returns),
declaration, report, claim for refund, or information return or statement
relating to Taxes, including any schedule or attachment thereto, and including
any amendment thereof.
“Tax”
or
“Taxes”
means
any federal, state, local, or foreign income, gross receipts, license, payroll,
employment, excise, severance, stamp, occupation, premium, windfall profits,
environmental (including taxes under Section 59A of the Code), customs duties,
capital stock, franchise, profits, withholding, social security (or similar),
unemployment, disability, real property, personal property, sales, use,
transfer, registration, value added, alternative or add-on minimum, estimated,
or other tax of any kind whatsoever, including any interest, penalty, or
addition thereto, whether disputed or not.
(b) Construction
of Certain Terms and Phrases. Unless
the context of this Agreement otherwise requires, (i) words of any gender
include each other gender; (ii) words using the singular or plural number also
include the plural or singular number, respec-tively; (iii) the terms
“hereof,”“herein,”“hereby” and deriva-tive or similar words refer to this entire
Agreement; (iv) the terms “Article” or “Section” refer to the specified
Article or Section of this Agreement; and (v) the phrase “ordinary course of
business” refers to the business of Company. Whenever this Agreement refers to a
number of days, such number shall refer to calendar days unless Business Days
are specified. Any representation or warranty contained herein as to the
enforceability of a Contract shall be subject to the effect of any bankruptcy,
insolvency, reorganization, moratorium or other similar law affecting the
enforcement of creditors’ rights generally and to general equitable principles
(regardless of whether such enforceability is considered in a proceeding in
equity or at Law).
-24-
ARTICLE
XII
MISCELLANEOUS
12.01 Notices. All
notices, requests and other communications hereunder must be in writing and
will
be deemed to have been duly given (i) five (5) Business Days following deposit
in the mails if sent by registered or certified mail, postage prepaid, (ii)
when
sent, if sent by facsimile transmission, if receipt thereof is confirmed by
telephone, (iii) when delivered, if delivered personally to the intended
recipient and (iv) one (1) Business Day following deposit with a nationally
recognized overnight courier service, in each case addressed as follows
:
If
to
Purchaser, to:
Xxxxx
X.
Xxxxx & Associates, Inc.
ATTN:
Xxxxx X. Xxxxx
000
Xxxxxx Xxxxxx, 0xx
Xxxxx
Xxxxxxxx,
Xxx Xxxxxx 00000
Tel.
(000) 000-0000
Fax.
(000) 000-0000
with
a
copy to:
DeCotiis,
FitzPatrick, Xxxx & Xxxxxx, LLP
ATTN:
Xxxxxxx X. Xxxx, Esq.
Glenpointe
Centre West
000
Xxxxx
X. Xxxx Xxxxxxxxx
Xxxxxxx,
XX 00000
Tel.
(000) 000-0000
Fax.
(000) 000-0000
If
to
Seller, to:
Harleysville
National Bank and Trust Company
000
Xxxx
Xxxxxx
Xxxxxxxxxxxx,
XX 00000
Tel.
(000) 000-0000
Fax.
(000) 000-0000
ATTN:
Corporate Secretary
Harleysville
National Bank and Trust Company
000
Xxxx
Xxxxxx
Xxxxxxxxxxxx,
XX 00000
Tel.
(000) 000-0000
Fax.
(000) 000-0000
ATTN:
Xxxxx X. Xxxxxx, President
-25-
with
a
copy to:
Wolf,
Block, Xxxxxx and Xxxxx-Xxxxx, LLP
ATTN:
Xxxxx X. Xxxxxx, Esq.
0000
Xxxx
Xxxxxx, 00xx
Xxxxx
Xxxxxxxxxxxx,
XX 00000
Tel.
(000) 000-0000
Fax.
(000) 000-0000
If
to
HNC, to:
Harleysville
National Corporation
000
Xxxx
Xxxxxx
Xxxxxxxxxxxx,
XX 00000
Tel.
(000) 000-0000
Fax.
(000) 000-0000
ATTN:
Corporate Secretary
Harleysville
National Corporation
000
Xxxx
Xxxxxx
Xxxxxxxxxxxx,
XX 00000
Tel.
(000) 000-0000
Fax.
(000) 000-0000
ATTN:
Xxxxx X. Xxxxxx, President
with
a
copy to:
Wolf,
Block, Xxxxxx and Xxxxx-Xxxxx, LLP
ATTN:
Xxxxx X. Xxxxxx, Esq.
0000
Xxxx
Xxxxxx, 00xx
Xxxxx
Xxxxxxxxxxxx,
XX 00000
Tel.
(000) 000-0000
Fax.
(000) 000-0000
Any
party
from time to time may change its address, facsimile number or other information
for the purpose of notices to that party by giving notice specifying such change
to the other party hereto.
12.02 Entire
Agreement. This
Agreement super-sedes all prior discussions and agreements between the parties
with respect to the subject matter hereof and contains the sole and entire
agreement between the parties hereto with respect to the subject matter
hereof.
12.03 Expenses. Except
as otherwise expressly pro-vided in this Agreement whether or not the
transactions contemplated hereby are consummated, each party will pay its
-26-
own
costs
and expenses. The parties agree that Company has not incurred any expenses
in
connection with the negotiation, execution and closing of this
Agreement.
12.04 Further
Assurances; Post-Closing Cooperation.
(a)
Subject to the terms and conditions of this Agreement, at any time or from
time
to time after the Closing, each of the parties hereto shall execute and deliver
such other documents and instruments, provide such materials and information
and
take such other actions as may reasonably be necessary, proper or advisable,
to
the extent permitted by Law, to fulfill its obligations under this
Agreement.
(b) If,
in order properly to prepare its Tax Returns, other documents or reports
required to be filed with Governmental or Regulatory Authorities or its
financial statements or to fulfill its obligations hereunder, it is necessary
that a party be furnished with additional information, documents or records
relating to the Business or Condition of Company and such information, documents
or records are in the possession or control of the other party, such other
party
agrees to use its best efforts to furnish or make available such information,
documents or records (or copies thereof) at the recipient’s request, cost and
expense. Any information obtained in accordance with this paragraph shall be
held confidential.
(c) Notwithstanding
anything to the contrary contained in this Section, if the parties are in an
adversarial relationship in litigation or arbitration, the furnishing of
information, documents or records in accordance with any provision of this
Section shall be subject to applicable rules relating to discovery.
12.05 Waiver. Any
term or condition of this Agree-ment may be waived at any time by the party
that
is entitled to the benefit thereof, but no such waiver shall be effective unless
set forth in a written instrument duly executed by or on behalf of the party
waiving such term or condition. No waiver by any party of any term or condition
of this Agreement, in any one or more instances, shall be deemed to be or
construed as a waiver of the same or any other term or condition of this
Agreement on any future occasion. All remedies, either under this Agreement
or
by Law or otherwise afforded, will be cumu-lative and not
alternative.
12.06 Amendment. This
Agreement may be amended, supplemented or modified only by a written instrument
duly executed by or on behalf of each party hereto.
12.07 No
Third Party Beneficiary. The
terms and pro-visions of this Agreement are intended solely for the benefit
of
each party hereto and their respective successors or permitted assigns, and
it
is not the intention of the parties to confer third-party beneficiary rights
upon any other Person other than Persons entitled to indemnity under
Article X.
12.08 No
Assignment; Binding Effect. Neither
this Agreement nor any right, interest or obligation hereunder may be assigned
by any party hereto without the prior written consent of the other party hereto
and any attempt to do so will be void. Subject to the preceding
12.09 Headings. The
headings used in this Agreement have been inserted for convenience of reference
only and do not define or limit the provisions hereof.
12.10 Invalid
Provisions. If
any provision of this Agreement is held to be illegal, invalid or unenforceable
under any present or future Law, and if the rights or obligations of any party
hereto under this Agreement will not be materially and adversely affected
thereby, (a) such provision will be fully severable, (b) this Agreement will
be
construed and enforced as if such illegal, invalid or unenforceable provision
had never comprised a part hereof, (c) the remaining provisions of this
Agreement will remain in full force and effect and will not be affected by
the
illegal, invalid or unenforceable provision or by its severance herefrom and
(d)
in lieu of such illegal, invalid or unenforceable provision, there will be
added
automatically as a part of this Agreement a legal, valid and enforceable
provi-sion as similar in terms to such illegal, invalid or unenforce-able
provision as may be possible.
12.11 Governing
Law. This
Agreement shall be governed by and construed in accordance with the Laws of
the
State of New Jersey ap-plicable to a Contract executed and performed in such
State, without giving effect to the conflicts of laws principles
thereof.
12.12 Counterparts. This
Agreement may be executed in any number of counterparts, each of which will
be
deemed an original, but all of which together will constitute one and the same
instrument.
[SIGNATURE
PAGE TO FOLLOW]
-27-
IN
WITNESS WHEREOF, this Agreement has been duly exe-cuted and delivered by the
duly authorized officer of each party hereto as of the date first above
written.
XXXXX
X.
XXXXX & ASSOCIATES, INC.
By: /s/
Xxxxx X. Xxxxx
Xxxxx
X.
Xxxxx, President
HARLEYSVILLE
NATIONAL
CORPORATION
By: /s/ Xxxxx X. Xxxxxx
Xxxxx
X. Xxxxxx, President and CEO
HARLEYSVILLE
NATIONAL BANK
AND
TRUST
COMPANY
By: /s/
Xxxxxxx X. High
Xxxxxxx X. High, Executive Vice
President
and COO
CUMBERLAND
ADVISORS, INC.
By: /s/
Xxxxx X. Xxxxx
Xxxxx X. Xxxxx, President
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