PURCHASE AND ASSUMPTION AGREEMENT
PURCHASE AND ASSUMPTION AGREEMENT (this "Agreement"),
dated as of June 4, 1999 by and between Susquehanna Bank, a
federally chartered, stock savings bank ("Seller"), and Xxxxx
Federal Savings Bank, a federally chartered, stock savings bank
("Purchaser").
Purchaser desires to purchase certain assets and
assume certain liabilities associated with Seller's two branch
banking offices described in Exhibit I attached hereto and made
a part hereof (herein, individually, a "Branch", and
collectively, the "Branches"), subject to the terms and
conditions and based upon Seller's representations, warranties
and agreements hereinafter expressed.
Seller desires to sell to Purchaser certain assets and
to have Purchaser assume certain liabilities associated with the
Branches, subject to the terms and conditions and based upon
Purchaser's representations, warranties and agreements
hereinafter expressed.
In consideration of the mutual covenants and
agreements herein contained and the mutual benefits to be
derived herefrom, the parties hereto do agree hereby as follows:
1. Effective Date and Closing. The effective date
of the transactions provided for in Section 3 hereof (the
"Effective Date") shall be on a Friday to be determined by
agreement among the parties and shall be no less than 30 nor
more than 60 days following the day on which Purchaser receives
the approval of all applicable regulatory agencies to consummate
the transactions provided for herein, or on such other date as
mutually agreed to by the parties. The closing of the trans-
actions provided for herein (the "Closing") shall be at a time
agreed upon by the parties on the Effective Date at the offices
of Seller, at which time title to and possession of the assets
to be sold hereunder will be transferred from Seller to
Purchaser in accordance with the procedures set forth in Section
7 hereof.
2. Events Preceding Effectiveness. On or before the
Effective Date, the following shall have occurred:
(a) the Board of Directors or Executive
Committee thereof of Purchaser and of Seller shall
have approved this Agreement and the transactions
provided for herein; and
(b) the Office of Thrift Supervision and any
other applicable regulatory agencies shall have
approved this Agreement and the transactions provided
for herein.
3. Assets to be Purchased and Liabilities to be
Assumed. The following assets and services shall be purchased
and liabilities shall be assumed hereunder:
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3.1 Assets to be Purchased. Seller shall sell
to Purchaser and Purchaser shall purchase from Seller each of
the following assets and services of Seller (the "Assets"):
(a) fee simple interests in the real estate,
together with the buildings and improvements consti-
tuting the Branch location known as the North Street
Branch, as more particularly described in Exhibit II
attached hereto and made a part hereof (herein, the
"Real Estate");
(b) all of Seller's rights and interest in the
lease to the Branch location known as the Big Elk Mall
Branch, as attached hereto as Exhibit III and made a
part hereof (herein, the "Lease"), shall be assumed by
Purchaser;
(c) subject to the provisions of Section 7.6,
all rights of Seller in maintenance, janitorial,
security alarm or other contracts relating to the
operation and maintenance of the Branches (herein,
collectively, the "Operating Contracts");
(d) all right, title and interest of Seller in
fixtures, furnishings, equipment, leasehold improve-
ments and furniture now owned or leased by Seller and
existing at the Branches, as more particularly
described in Exhibit IV attached hereto and made a
part hereof (the "Furnishings");
(e) cash in an amount equal to the face value,
plus accrued interest, (i) of all the deposit accounts
including without limitation (other than non-XXX
fiduciary accounts) in all retail and commercial
checking accounts, passbook savings accounts, money
market investment accounts (including, without limita-
tion, Access CD), NOW accounts, statement savings
accounts and individual retirement accounts listed on
the books of the Branches as of the close of business
on the Effective Date as to which permission to trans-
fer is not withheld under Section 11.8 (collectively,
the "Accounts"), (ii) all of the certificates of
deposit listed as originating at the Branches or owned
by customers whose accounts are maintained at the
Branches as of the close of business on the Effective
Date as to which permission to transfer is not with-
held under Section 11.8 (the "Certificates") (the
Accounts and the Certificates being referred to
collectively as the "Total Accounts"), the aggregate
balance of which as of May 26, 1999 is $23,253,406;
and (iii) cash "on hand" at the Big Elk Mall Branch as
of the close of business on the Effective Date;
(f) all consumer loans associated with or
collateralized by the Total Accounts referenced in (e)
above as of the close of business on the Effective
Date (the "Loans");
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(g) the covenant by Seller not to compete with
Purchaser described in Section 5 hereof (herein, the
"Covenant Not to Compete");
(h) assistance in the transfer of employees of
the Branches pursuant to Section 4.3; and
(i) assistance in notification of depositors and
other customers, transfer of Total Accounts, Loans and
clearance of items received after the Effective Date.
3.2 Liabilities Assumed. Purchaser shall assume
no tax or other liabilities of Seller in connection with the
purchase of the Assets or otherwise, except that Purchaser shall
assume each of the following liabilities of Seller and will
indemnify and hold Seller harmless from and against any
liability, cost or expense incurred by Seller as a result of
Purchaser's failure to perform its obligations with respect to
any of the following assumed liabilities (collectively, the
"Liabilities"):
(a) the liabilities for payment to or the order
of the depositors of the Total Accounts and written
contractual or statutory obligations associated with
the Total Accounts;
(b) the liabilities as lessee of the Lease; and
(c) the liabilities as a party to any Operating
Contracts not terminated prior to Closing.
3.3 Unitary Enterprise. It is recognized that
Purchaser in acquiring the Branches will be buying a unitary
economic enterprise. It is also recognized that Purchaser is
paying a premium in order to obtain the benefit of a substantial
core deposit base and that the asset allocation provided herein
is agreeable to both parties.
4. Employment Matters. With respect to the
Employees:
4.1 Solicitation for Employment. Purchaser
agrees to offer employment to all employees and officers of the
Branches listed on Exhibit V attached hereto and made a part
hereof (herein, collectively, the "Officers and Employees") who
are still so employed as of the Effective Date. The Seller will
not renegotiate the position, salary or wages of any Officer or
Employee of the Branches on or prior to the Effective Date,
other than ordinary salary increases. The Purchaser agrees to
keep employed for a period of at least six months any Officer or
Employee, unless such Officer or Employee is discharged for
cause (any officer of Seller shall not be required to be an
officer of Purchaser).
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4.2 Employee Benefits. Officers and Employees
who are offered and accept employment with Purchaser shall
receive their current salaries and shall participate in the
pension plan and other employee benefit plans of Purchaser.
Credit under the pension plan for years of service with Seller
will be given to Officers and Employees who accept employment
with Purchaser, but only for purposes of determining eligibility
and vesting and not for the purpose of determining benefit
accrual.
4.3 Assistance with Employees. Seller will
assist Purchaser in any solicitation of the Officers and
Employees, will transfer (upon written consent of the Officers
and Employees) all employee records to the Purchaser, will
encourage the Officers and Employees of the Branches to accept
employment with the Purchaser, and will assist Purchaser with
the transfer of any Officers or Employees to the employment of
the Purchaser. This Section shall not be construed as a
guarantee that any or all of the Officers or Employees will be
offered or will accept employment with the Purchaser. No
provision of this Agreement shall be construed as a contract for
future employment except as employment at will.
5. Covenant Not to Compete/Non-Solicitation. The
Seller covenants:
5.1 Covenant. Except as set forth herein,
neither Seller nor any company affiliated with Seller shall (a)
maintain retail banking facilities, including offices from which
checking accounts, savings accounts, certificates of deposit or
loans are offered by Seller or any company affiliated with
Seller to the general public, or operate automated teller
machines wholly-owned by Seller within that area described in
Exhibit VI attached hereto and made a part hereof (herein, the
"Covenant Area") for a period of 2 years from the Effective
Date, or (b) directly compete for or knowingly solicit any
customers of the Branches as of the Effective Date located
within the Covenant Area for banking services described in
clause (a), other than through statewide or regional media
(including, but not limited to local broadcasts of advertise-
ments run on syndicated radio programs) or mail advertising, for
a period of 2 years from the Effective Date; provided, however,
that nothing herein shall be deemed to preclude Seller or an
affiliate of Seller from (i) operating an automated teller
machine within the Covenant Area in a name other than Seller's
or a company's affiliated with Seller, (ii) bidding for public
funds of governmental units located within the Covenant Area,
(iii) acquiring or being acquired by (through merger, xxxxxxx-
dation, asset purchase or otherwise) another financial insti-
tution which may have a branch within the Covenant Area; (iv)
providing commercial loan (business or real estate) or trust
services within the Covenant Area; or (v) operating a loan or a
loan production office within the Covenant Area.
5.2 Reasonableness of Restrictions. Seller
acknowledges that the restrictions in Section 5.1 above are fair
and reasonable and are reasonably required for the protection of
Purchaser. If any part of such section shall be held to be
unenforceable or invalid, the remaining parts thereof shall
nevertheless continue to be valid and enforceable as though the
invalid portions were not a part thereof. If any of the
provisions in Section 5.1 relating to the time period or
geographic area of restriction shall be deemed to exceed the
maximum period deemed
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enforceable, the time and area shall, for the purpose of that
subsection, be deemed to equal the maximum time period which a
court of competent jurisdiction would deem valid and enforceable
in Maryland. Seller agrees that any violation by it of the
covenants contained in Section 5.1 is likely to cause damage to
Purchaser which may not be adequately compensated by money
damages and may be restrained by process issued out of a court
of competent jurisdiction, in addition to any other remedies
provided by law.
6. Purchase Price, Adjustment and Payment. The
purchase price for the Assets shall be the sum of the separately
bargained for amounts shown in Section 6.1 plus or minus, as the
case may be, the adjustments described in Sections 6.2 and 6.3
(the "Purchase Price").
6.1 Purchase Price of Assets. The separately
bargained for amounts constituting the Purchase Price are as
follows:
(a) Real Estate. $141,340 (including leasehold
improvements of $11,684).
(b) Furnishings: $65,135.
(c) Premium for Total Accounts: $3,481,127
(equal to 15% of the Total Accounts as of May 26,
1999); provided, however, that (a) in the event the
aggregate balance of the Total Accounts of the Branches
to be assumed by the Purchaser is at the close of
business on the day prior to the Effective Date less
than ninety (90%) of the aggregate balance of the Total
Accounts set forth in Section 3.1(e) hereof, then in
that event the premium to be paid by Purchaser as
described herein shall be automatically adjusted down-
xxxx, to an amount calculated by multiplying (i) the
premium originally offered, by (ii) a fraction of which
the numerator shall be the aggregate of the Total
Accounts to be transferred at the close of business on
the day prior to the Effective Date and the denominator
shall be ninety percent (90%) of the aggregate amount
of Total Accounts expected to be transferred as
described in Section 3.1(e) hereof.
(d) Loans: The unpaid principal amount of the
Loans plus accrued interest at the close of business
on the Effective Date.
(e) Cash. An amount equal to the cash "on
hand" at the Big Elk Mall Branch as of the close of
business on the Effective Date.
6.2 Adjustments. The Purchase Price shall be
adjusted as follows:
(a) all taxes, utilities and other public or
governmental charges or assessments relating to the
Branches which are or may be payable on an annual basis
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(including assessments, liens or encumbrances for
sewer, water, drainage or other public improvements
completed or commenced on or prior to the date hereof,
or subsequent thereto) shall be prorated as of the
close of business on the Effective Date;
(b) any rent or additional amount prepaid under
the Lease or Operating Contracts shall be added to the
Purchase Price and, similarly, any rent or additional
amounts due and owing thereunder shall be debited from
the Purchase Price;
(c) costs of recordation tax and transfer tax
associated with the Real Estate shall be divided
equally between the Purchaser and Seller; and
(d) cost of sales tax or transfer tax associated
with the Furnishings shall be paid by Purchaser and
remitted by Seller.
6.3 Settlement. Purchaser and Seller shall
settle with each other at the Closing and subsequently there-
after with each other in consideration of the transactions
contemplated herein as follows:
(a) At the Closing, Purchaser shall pay to
Seller an initial payment for the Purchase Price, as
specified in this Section 6, through a deduction from
the amount of cash transferred as part of the Assets
(the "Initial Payment"). The Initial Payment shall be
based upon the amounts stated in Sections 6.1 and 6.2
of this Agreement as of the close of business on the
day prior to the Effective Date.
(b) At the end of ten business days from the
Effective Date, Purchaser or Purchaser's independent
accountants shall report to Seller in writing of, (A)
the actual aggregate principal amount of and accrued
interest on the Deposits transferred hereunder as of
the close of business on the Effective Date (the
"Actual Deposits"), which amounts shall be reduced by
any items in transit after the Effective Date, (B)
the outstanding principal balance and accrued interest
on the Loans acquired by Purchaser as of the close of
business on the Effective Date (the "Loans"), and (C)
the amount of cash "on hand" at the Big Elk Mall Branch
as of the close of business on the Effective Date. The
payment amount finally due and owing (the "Final
Payment Amount") shall be based upon the aggregate
amount of the Actual Deposits, Premium (as applicable,
pursuant to Section l6.1(c)), Loans and the cash "on
hand." The work papers, schedules and other data of
Purchaser or Purchaser's accountants supporting its
determination shall be made available to Purchaser and
Seller as may be reasonably requested.
(c) At the end of the three business days from
receipt by Seller of the written report from Purchaser
or Purchaser's independent accounting firm (the "Final
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Settlement Date"), if there is no dispute between
Seller and Purchaser as to the Final Settlement Amount:
(i) in the event that the amount of the
Final Payment Amount is less than the Initial Payment,
Purchaser shall refund to Seller, in immediately
available funds, an amount equal to the difference
obtained by subtracting the amount of the Final Payment
Amount from the Initial Payment Amount, or
(ii) in the event that the amount of the
Final Payment Amount is more than the Initial Payment
Amount, Seller shall pay to Purchaser, in immediately
available funds, an amount equal to the difference
obtained by subtracting the Initial Payment Amount from
the Final Payment Amount.
(d) In the event Seller does not agree with
Purchaser's or Purchaser's accountants's determination
of the Final Payment Amount as set out in the work
papers and written report at the end of the three day
period referred to in (c) above, Seller and Purchaser
shall retain as arbitrator KPMG Peat Marwick LLP or,
failing their agreement to act as arbitrator, such
other independent accounting firm as may be mutually
agreed upon by the parties to review such matters and
request such arbitrator to act as promptly as practic-
able in accordance with its own rules to resolve the
dispute within 30 days after being retained by the
parties. Upon resolution by such arbitrator of the
dispute, such arbitrator shall cause to be prepared and
shall deliver to the parties a certificate setting
forth the Final Payment Amount. The decision of the
arbitrator shall be final, non-appealable and binding
on Seller and Purchaser, and the fees and expenses, if
any, of such arbitrator shall be paid one-half by
Purchaser and one-half by Seller.
7. Closing Events. At the Closing:
7.1 Deeds. Seller shall deliver to Purchaser
any deeds to the Real Estate, containing covenants of special
warranty and further assurances.
7.2 Branch Lease. Seller and Purchaser shall
execute at or prior to Closing an assignment of Lease in
substantially the form of Exhibit VII attached hereto and made a
part hereof. Seller will deliver to Purchaser, prior to the
Closing, consent to the Lease assignment from the landlord in a
form satisfactory to Purchaser. In obtaining such consent,
Purchaser shall cooperate with Seller as required by Section
12.5 hereof.
7.3 Furnishings. Seller shall deliver to
Purchaser a Xxxx of Sale for the Furnishings; such Xxxx of Sale
shall grant and convey unto Purchaser all of Seller's right,
title and interest in the Furnishings, free and clear of all
liens and encumbrances and in "AS IS" condition.
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7.4 Total Accounts. Seller shall deliver to
Purchaser a complete and accurate list of the Total Accounts as
of the close of business on the day prior to the Effective Date
and the parties shall execute an Agreement of Assignment and
Assumption of Total Accounts in the form of Exhibit VIII
attached hereto and made a part hereof.
7.5 Loans. Seller shall deliver to Purchaser a
complete and accurate list of all the Loans as of the close of
business on the day prior to the Effective Date and shall
execute an Agreement of Assignment of Loans in the form of
Exhibit IX attached hereto and made a part hereof. Seller also
shall deliver to Purchaser all documentation related to the
Loans and shall execute all documents as Purchaser may
reasonably require to evidence the transfer or assignment of the
Loans and all related security interests to Purchaser.
Purchaser shall pay the cost of recording all documents
evidencing the transfer or assignment of the Loans and all
related security interests to Purchaser.
7.6 Operating Contracts. Seller and Purchaser
shall execute an assignment of Seller's rights in those
Operating Contracts which Purchaser requests to assume. Unless
otherwise requested by Purchaser, Seller shall terminate each of
the Operating Contracts as of the Effective Date. Prior to the
Effective Date, Purchaser shall have the right to review all
Operating Contracts of the Branches with an annual expenditure
in excess of $10,000.
7.7 Transfer of Funds. Purchaser and Seller
shall execute a memorandum of settlement detailing the transfer
of funds which occur in connection with the transactions
contemplated by this Agreement, identifying specifically the
Certificates, the Accounts and the Loans being transferred. In
the event the memorandum of settlement proves to be inaccurate,
and the Purchaser has provided notification of such inaccuracy
to the Seller within 30 days after Closing, the parties will
promptly make appropriate adjustments and accounting, including,
but not limited to, any adjustments in order to reflect the
amount of accrued interest on the Total Accounts and the Loans
on the Effective Date.
7.8 Transfer Amount to Purchaser. The net cash
transfer of amount due to Purchaser from Seller shall be made in
immediately available funds to the account of Purchaser in
accordance with instruction provided by Purchaser.
8. Collections on the Loans and Accounts. After the
Effective Date:
8.1 Right to Collect. Purchaser shall have the
sole right to make collections with respect to all Loans.
8.2 Notice to Borrowers. Seller will execute
notices to each person who is obligated on each Loan that the
Loans have been sold, transferred and assigned to Purchaser.
All such notices shall be mailed or delivered by Purchaser and
shall be in a form prepared by Purchaser and approved by Seller.
Seller will thereafter promptly turn over to Purchaser, in the
form received
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and properly endorsed, all checks, drafts, money orders or other
instruments of payment that may come into the possession of
Seller as payment of the Loans sold hereunder and will execute
in the name of Seller releases, discharges, satisfactions and
any and all other documents required to be executed in
connection with such Loans.
8.3 Power of Attorney. Seller hereby names,
constitutes and appoints Purchaser and any of its officers,
agents, employees or representatives its duly authorized
attorney and agent with full power and authority to endorse
notes, and/or security instruments, or any other such documen-
tation relating to the Loans in Seller's name, to receive and
collect any and all monies due under such Loans and to enforce
performance of all Loans and instruments covered thereby.
8.4 Modification of Loans. Purchaser shall have
the right to release any and all instruments of record or any
debtors or guarantors of such instruments of record and to
supplement or replace such instruments, debtors or guarantors
with any like or similar instruments, debtors or guarantors, to
extend or modify periods of time of payment or any other terms
or provisions of such instruments and, generally, to do and
perform any and all things necessary and incident to collection
of the Loans with equal rights, privileges and powers which
Seller has or was entitled to exercise.
8.5 Subsequent Purchaser Payments. Following
the Effective Date, Purchaser agrees to pay in accordance with
law and customary banking practices all properly drawn and
presented checks, drafts and withdrawal orders presented to
Purchaser by mail, over the counter or through the check
clearing system of the banking industry, by depositors of the
assumed accounts, whether drawn on the checks, withdrawal or
draft forms provided by the Seller or by the Purchaser, and in
all other respects to discharge, in the usual course of the
banking business, the duties and obligations of the Seller with
respect to the balances due and owing to the depositors whose
accounts are assumed by Purchaser. Purchaser's obligation under
this subsection to honor checks, drafts and withdrawal orders on
forms provided by Seller and carrying its imprint (including
name and transit routing number) shall not apply to any such
check, draft or withdrawal order presented to Purchaser more
than sixty (60) days following the Effective Date. Seller and
Purchaser will make appropriate arrangements (including
establishment by Purchaser of a settlement account with Seller)
to provide for settlement by Purchaser of checks, returns and
other items which are presented to Seller within sixty (60) days
after the Effective Date and which are drawn on or chargeable to
accounts which have been assumed.
8.6 Subsequent Seller Transfers. Seller agrees
that it will transfer to Purchaser any deposits given to it
after the Effective Date for credit to the assumed accounts, but
it shall be under no obligation to accept such deposits.
8.7 Payment of Items by Seller After the
Effective Date. If any of such depositors, instead of accepting
the obligation of Purchaser to pay the deposit liabilities
assumed, shall demand payment from Seller for all or any part of
any such assumed deposit liabilities, Seller
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shall not be liable or responsible for making such payment. If
any of such depositors draw a check, draft or withdrawal order
against the deposit liabilities, including accrued interest,
assumed from Seller which is presented or charged to Seller
within sixty (60) days after the Effective Date, Seller may
accept same and present to Purchaser for payment. Purchaser
must return to Seller any item, which is not properly payable
and which was presented by Seller to Purchaser, at such time and
in such a manner as to enable Seller to comply with all
applicable laws and regulations.
8.8 Purchaser Responsible for Returned Items.
Purchaser agrees, no later than the start of the second business
day after demand by Seller, to pay to Seller an amount equiva-
lent to the amount of any uncollected item included in a
depositor's balance on the Effective Date which is returned
within sixty (60) days after the Effective Date as not
collected. Purchaser shall be required to make such payment for
an item only up to the balance of any funds on deposit with the
Purchaser and any balance available on a line of credit the
customer has with the Purchaser at the time the Seller makes the
demand as aforesaid; provided, however, if prior to the
Effective Date the Seller had placed a "hold" or other similar
protective measure on the depositor's account with respect to
such item and subsequent to the Effective Date the Purchaser
removes such hold or protective measure, then the Purchaser will
be obligated to pay the Seller in full on account of such
uncollected item. So long as any hold or other protective
measure placed on the depositor's account with respect to such
item complies with applicable law, the placing of any such hold
or other protective measure shall not be deemed a breach of this
Agreement.
9. Representations and Warranties of Seller. Seller
hereby represents and warrants to Purchaser as follows:
9.1 Organization and Standing of Seller. Seller
is a duly organized and validly existing federally chartered,
stock savings bank, in good standing under the laws of the
United States of America, has the corporate power and authority
to carry on its business as it is now being conducted, and holds
a valid certificate of authority to do business as a federally
chartered, stock savings bank.
9.2 Full Information. No representation or
warranty made in this Agreement or information furnished
pursuant hereto to Purchaser contains or will contain any untrue
statement of a material fact or omits or will omit to state any
material fact necessary in order to make statements contained
herein, in light of the circumstances under which they are made,
not misleading.
9.3 No Conflict with Other Documents. Neither
the execution and delivery of this Agreement nor the carrying
out of the transactions contemplated hereunder will result in
any violation, termination, or modification of, or be in con-
flict with, any terms of any contract or other instrument to
which Seller is a party, or of any judgment, decree, or order
applicable to Seller, or result in the creation of any lien,
charge or encumbrance upon any of the properties or assets of
Seller.
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9.4 Title to Total Accounts. Seller is the true
owner of and has good title to the Total Accounts free and clear
of all pledges, liens, encumbrances and adverse claims of any
kind or character; Seller is duly authorized to transfer and
assign the Total Accounts to Purchaser, subject to receipt of
regulatory approval.
9.5 Compliance with Laws. None of the Total
Accounts is in violation of any federal laws, regulations and
rulings applicable thereto, specifically including the Federal
Deposit Insurance Act and any regulations and rulings issued
pursuant thereto.
9.6 Litigation, etc. There is no litigation,
proceeding, or investigation pending or, to the knowledge of
Seller, threatened against it with respect to the operation of
the Branches which might (a) result in any material adverse
change in the business or condition (financial or otherwise) of
any of the Branches or (b) materially effect the validity of
this Agreement or of any action taken or to be taken pursuant
hereto or in connection herewith on the part of the Seller.
9.7 Authority. The execution, delivery and
performance of this Agreement by Seller have been duly and
validly authorized by its Board of Directors or the Executive
Committee thereof, subject only to the requisite approval by
appropriate governmental regulatory authorities.
9.8 List of Total Accounts. The list of the
Total Accounts contained in Exhibit VIII hereto to be delivered
at Closing shall be a complete and accurate list as of the day
prior to the Effective Date.
9.9 Loan Documentation and Related Matters. (a)
The list of the Loans contained in Exhibit IX hereto to be
delivered at Closing shall be a complete and accurate list as of
the day prior to the Effective Date; (b) the documentation
relating to the Loans accurately reflects the payment history,
the outstanding balance of the Loans, and all receipts per-
taining to the Loans from the obligor(s) thereof and all credits
to which such obligor(s) are entitled; (c) Seller is the true
owner of the Loans and the documents evidencing the Loans; (d)
the Loans, and said documents are not subject to any pledge,
lien, encumbrance or participation of any kind or character,
legal or equitable; (e) each obligor had, at the time of
execution thereof, full capacity to contract; (f) each of the
documents is genuine, is a good and valid instrument, and in all
respects is what it purports to be; (g) no obligor of any of the
Loans has any defense, set-off, or counter-claim to the payment
of the amount of the unpaid obligation; (h) no taxes or other
liability of Seller shall accrue against or be collected from
Purchaser out of any of the Loans by reason of the purchase
thereof by Purchaser; (i) Seller has paid or caused to be paid
any and all license, franchise, intangible, stamp, or other tax
or fee due and owing to any state where the Loans originated, or
any political subdivision thereof, arising from or growing out
of the acquisition, collection, or holding of any of the Loans;
(j) neither Seller nor any of its agents, officers, employees,
or representatives in any manner has been guilty
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of any civil or criminal fraud with respect to the creation of
any of the Loans or with respect to this transfer, assignment,
and sale to Purchaser; and (k) none of the Loans is in violation
of any federal laws, regulations and rulings applicable thereto,
specifically including the Federal Consumer Protection Act or
the Federal Equal Credit Opportunities Act and regulations and
rulings issued pursuant thereto, and all state consumer protec-
tion, contract, or usury laws.
9.10 Brokers. Except for Xxxxxx Xxxxxxxxxx
Xxxxx, Inc., neither Seller nor anyone on behalf of Seller has
used, employed or incurred any liability to any broker or finder
in connection with this Agreement or the transactions contem-
plated by this Agreement.
10. Representations and Warranties of Purchaser.
Purchaser hereby represents and warrants to Seller as follows:
10.1 Organization and Standing of Purchaser.
Purchaser is a duly organized and validly existing federally
chartered, stock savings bank, in good standing under the laws
of the United States of America, has the corporate power and
authority to carry on its business as it is now being conducted,
and holds a valid certificate of authority to do business as a
federally chartered, stock savings bank.
10.2 No Conflict with Other Documents. Neither
the execution and delivery of this Agreement nor the carrying
out of the transactions contemplated hereunder will result in
any violation, termination, or modification of, or be in
conflict with, any terms of any contract or other instrument to
which Purchaser is a party, or of any judgment, decree or order
applicable to Purchaser.
10.3 Authority. The execution, delivery and
performance of this Agreement by Purchaser have been duly and
validly authorized by its Board of Directors or the Executive
Committee thereof, subject only to approval by appropriate
governmental regulatory authorities.
10.4 Litigation, etc. There is no litigation,
proceeding or investigation pending or, to the knowledge of
Purchaser, threatened against it which might (a) result in any
material adverse change in the business or condition (financial
or otherwise) of Purchaser or (b) materially effect the validity
of this Agreement or of any action taken or to be taken pursuant
hereto or in connection herewith on the part of the Purchaser.
10.5 Full Information. No representation or
warranty made in this Agreement or information furnished
pursuant hereto to Seller contains or will contain any untrue
statement of a material fact or omits or will omit to state any
material fact necessary in order to make statements contained
herein not misleading in light of the circumstances under which
they are made.
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10.6 Brokers. Neither Purchaser nor anyone on
behalf of Purchaser has used, employed or incurred any liability
to any broker or finder in connection with this Agreement or the
transactions contemplated by this Agreement.
11. Covenants of Seller. Except as otherwise
consented to in writing by Purchaser after the date of this
Agreement, Seller covenants to and agrees with Purchaser as
follows:
11.1 Information. Seller will give to Purchaser
and to its officers, accountants, counsel and other representa-
tives full access during Seller's normal business hours through-
out the period prior to the Effective Date to all of Seller's
properties, books, contracts, customer records (consistent with
applicable law), commitments, reports of examination (consistent
with applicable law) and records which relate to operation of
the Branches. Seller will furnish Purchaser during such period
with all such information concerning the Branches as Purchaser
may reasonably request, including information for use in
necessary filings to be made with appropriate governmental
regulatory authorities.
11.2 Conduct of Seller's Business. Pending the
Closing, (a) Seller will operate the Branches only in the
ordinary course including interest rates consistent with the
Seller's present rate structure; (b) no increase shall be made
in any salary or wages (excluding regularly-scheduled salary
increases) and no establishment or increase shall be made in any
bonus, pension, option, incentive or deferred compensation,
retirement, death, profit-sharing, or similar benefits of any of
the Officers and Employees (excluding bank-wide changes); and
(c) Seller shall not place upon or permit any lien or encum-
brance upon any of the Assets. Pending the Closing, Seller
shall (i) use its best efforts to preserve the Assets and to
keep available the services of the Officers and Employees; (ii)
continue in effect the present method of conducting business at
the Branches (excluding bank-wide changes) except as otherwise
consented to by Purchaser; and (iii) not enter into any lease,
occupancy agreement, or use agreement regarding the Branches, or
any part thereof, without the prior written consent of the
Purchaser, or make any material modification, renewal or other
undertaking with respect to any existing agreement affecting the
Branches, which will or may survive the Closing, without the
prior written consent of the Purchaser. Notwithstanding
anything herein to the contrary, nothing herein shall be deemed
to prohibit Seller from terminating, without the consent of
Purchaser, any existing agreement or lease that it may have with
respect to the Branches regarding the provision of trust
services or the sale of annuities, securities, insurance or
other similar products or services at the Branches.
11.3 Destruction by Fire or Other Casualty. In
the event that any of the Branches or any portion thereof is
damaged or destroyed by fire or other casualty or condemned
prior to the Effective Date, Purchaser, at its option, may
either succeed to Seller's interest in any insurance proceeds or
condemnation award received, as applicable and proceed to
Closing, or, if in Purchaser's reasonable determination, the
damage, destruction or condemnation would have a material
adverse effect on Purchaser's ability to operate the Branch,
terminate this Agreement with respect to such Branch and proceed
to Closing on the remaining Branches (with appropriate
13
adjustment being made to the Purchase Price to reflect the
elimination of such Branch and its related deposits and loans
from the Branches being sold pursuant to the terms of this
Agreement), or, at Purchaser's option, terminate this Agreement
in its entirety with no further obligation.
11.4 Installation of Equipment. Subject to
obtaining any required consents and the receipt of all required
regulatory approvals, Seller shall permit Purchaser to install
(consistent with minimizing disruption of business activities)
data processing systems, branch automation systems and other
equipment at the Branches prior to the Effective Date so that
the same shall be operational immediately after the Closing,
provided that in the event this Agreement is terminated and the
transactions contemplated by this Agreement are not consummated,
Purchaser promptly shall at its expense remove all such systems
and equipment and restore the Branches to the same condition as
they were prior to installation.
11.5 Right of Entry. Seller shall give to
Purchaser and its agents, engineers and other representatives,
full access to inspect the Branches during normal business
hours, upon reasonable notice, during the period after the date
of this Agreement and prior to the Closing (hereinafter the
"Study Period") for the purpose of conducting studies, tests,
inspections and audits of the Real Estate (herein, "studies").
During the Study Period Seller shall furnish to Purchaser all
information concerning the Real Estate which Purchaser may
reasonably request. Purchaser may, at its sole expense, make
such studies of the Real Estate during the Study Period as it
may deem necessary. Purchaser shall be liable for the costs of
such studies and shall be responsible for any damage caused by
Purchaser or its agents, contractors or employees in making
studies on its behalf.
11.6 Customer Information. Seller shall, upon
the execution of this Agreement, make available to Purchaser all
material information regarding the Total Accounts (consistent
with applicable law), including customer lists, account numbers
and amounts, maturity schedules and other data necessary to
effect an orderly transfer of the Total Accounts at Closing.
11.7 Execution of Additional Documents. Seller
will execute all documents that Purchaser may reasonably require
to (a) give notice of the transfer or assignment of the security
interests in the Loans to Purchaser, and (b) evidence
Purchaser's ownership of the Assets and its interest in the
underlying security in the Loans.
11.8 Permission of Depositors. Prior to the
Closing, Seller shall advise all persons having interests in the
Total Accounts at the Branches that their deposit will be
transferred and assumed by Purchaser hereunder to the extent
Purchaser can do so unless other arrangements are made by the
depositor; the form of notice provided to the depositors shall
be satisfactory to Purchaser and shall authorize Purchaser to
receive information on each of the Total Accounts prior to the
Effective Date unless the appropriate customer objects; and
Seller will use its best efforts to secure the transfer of the
maximum amount of Total Accounts to Purchaser.
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11.9 Seller Indemnification. Seller shall
indemnify, hold harmless and defend Purchaser from and against
all claims, demands, obligations, losses and liabilities,
including reasonable attorneys' fees and expenses, arising out
of any actions, suits or proceedings commenced prior to the
Effective Date (other than proceedings to prevent or limit the
consummation of this transaction) relating to operations at the
Branches; and the Seller shall further indemnify, hold harmless
and defend Purchaser from and against all claims, demands,
obligations, losses and liabilities, including reasonable
attorneys' fees and expenses, arising out of any actions, suits
or proceedings commenced on or after the Effective Date but
which relate to operations at the Branches prior to the
Effective Date. It is understood that the obligations of the
Seller under this Section shall survive the Effective Date.
This indemnification does not extend to claims, demands,
obligations, losses or liabilities arising out of the presence
of Hazardous Materials or violations of Environmental Require-
ments (as those terms are defined in Section 15 hereof) on or in
the Real Estate.
12. Covenants of Purchaser. Except as otherwise
consented to in writing by Seller after the date of this
Agreement, Purchaser covenants to and agrees with Seller as
follows:
12.1 Performance. Subject to Seller's
representations and warranties contained in this Agreement,
Purchaser will accept the Assets and assume and perform its
obligations under this Agreement and the accompanying Exhibits.
12.2 Protection of Information. Purchaser will
hold all customer lists and account and loan information
provided by Seller in confidence except to the extent that it is
required to disclose such information to stockholders, to the
public, or in filings with governmental regulatory authorities.
In the event the sale and purchase of the Assets and assumption
of the Liabilities as provided in this Agreement are not
consummated, Purchaser agrees that it will promptly return all
customer lists and account and loan information provided by
Seller and all copies or abstracts thereof made by Purchaser and
shall not in any manner retain, use or disclose the customer
lists and account and loan information provided by Seller.
12.3 Application to Regulatory Agencies.
Purchaser will prepare and file, within 30 days of the date of
this Agreement, with all applicable regulatory agencies
applications to obtain the approval referred to in Section 2(b)
and will use its best efforts to secure favorable action on such
applications.
12.4 Purchaser Indemnification. Purchaser shall
indemnify, hold harmless and defend the Seller from and against
all claims, losses, liabilities, demands and obligations,
including reasonable attorneys' fees and expenses, sales and use
taxes, social security and unemployment taxes, all accounts
payable and operating expenses (including salaries, rents and
utility charges), which the Seller may receive, suffer or incur
in connection with operations and transactions occurring on or
after the Effective Date and which involve the Branches, the
assets transferred, the liabilities assumed or the personnel
hired pursuant to this Agreement. To the extent any such item
has been prepaid by the Seller for a period extending beyond the
Effective Date, there
15
shall be a proportionate monetary adjustment in favor of Seller.
It is understood that the obligations of Purchaser under this
Section shall survive the Effective Date. This indemnification
does not extend to claims, demands, obligations, losses or
liabilities arising out of the presence of Hazardous Materials
or violations of Environmental Requirements (as those terms are
defined in Section 15 hereof) on or in the Real Estate.
12.5 Cooperation. Purchaser shall cooperate
with and assist Seller in obtaining any consents required in
connection with any Lease assignments required hereunder. Such
cooperation and assistance shall include, without limitation,
the provision of any financial or other information required by
any lessor under any applicable Lease.
13. Conditions Precedent to Purchaser's Obligations
Hereunder. Unless waived in writing by Purchaser in its sole
discretion, all obligations of Purchaser hereunder shall be
subject to the fulfillment prior to or at the Closing of the
following conditions:
13.1 Representations, Warranties, and Covenants.
The representations and warranties of Seller herein contained
shall be true as of the Effective Date, shall be deemed made
again at and as of the Effective Date, and shall be true as so
made again; Seller shall have performed all obligations and
complied with all covenants required by this Agreement to be
performed or complied with by it on or prior to the Effective
Date; and Purchaser shall have received from Seller an officers'
certificate in such detail as Purchaser may reasonably request,
dated as of the Effective Date and signed by its President or an
Executive Vice President and Secretary or Assistant Secretary,
to the foregoing effect.
13.2 Events Preceding the Effective Date. Each
of the events set forth in Section 2 shall have occurred.
13.3 No Adverse Proceedings or Events. No
action or proceeding against Purchaser or the consummation of
the transactions contemplated by this Agreement shall have been
instituted or threatened or any investigations undertaken that
might result in any such action or proceeding, no order of any
court entered, and no other event shall have occurred or not
occurred, on or before the Effective Date, which, in the view of
Purchaser's counsel, renders it impossible for legal reasons for
Purchaser to consummate the transactions contemplated by this
Agreement.
13.4 Consents, Etc. All requisite consents,
undertakings, agreements, exercises and terminations of any
third parties shall have been obtained, either to the
satisfaction of Purchaser or waived by Purchaser, provided
Purchaser has cooperated with Seller as required by Section 12.5
of this Agreement.
13.5 Environmental Hazards. Any remediation
resulting from the investigation of the Branches conducted by
Purchaser or its representatives pursuant to Section 15 of this
Agreement shall be resolved to Purchaser's complete satisfaction
prior to the Effective Date.
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14. Conditions Precedent to Seller's Obligations
Hereunder. Unless waived in writing by Seller in its sole
discretion, all obligations of Seller hereunder shall be subject
to the fulfillment prior to or at the Closing of the following
conditions:
14.1 Representations, Warranties, and Covenants.
The representations and warranties of Purchaser herein contained
shall be true as of the Effective Date, shall be deemed made
again at and as of the Effective Date, and shall be true as so
made again; Purchaser shall have performed all obligations and
complied with all covenants required by this Agreement to be
performed or complied with by it on or prior to the Effective
Date; and Seller shall have received from Purchaser an officers'
certificate in such detail as Seller may reasonably request,
dated as of the Effective Date and signed by its President and
Cashier or Secretary, to the foregoing effect.
14.2 Events Preceding the Effective Date. Each
of the events set forth in Section 2 shall have occurred.
14.3 No Adverse Proceedings or Events. No action
or proceeding against Seller or the consummation of the
transactions contemplated by this Agreement shall have been
instituted or threatened or any investigations undertaken that
might result in any such action or proceeding, no order of any
court entered, and no other event shall have occurred or not
occurred, on or before the Effective Date, which, in the view of
Seller's counsel, renders it impossible or inadvisable for legal
reasons for Seller to consummate the transactions contemplated
by this Agreement.
15. Independent Investigation. Purchaser agrees
that, except as expressly contained in this Agreement, no
representations by or on behalf of Seller have been made to
Purchaser as to the condition of the Real Estate, the
applicability of any governmental requirements, including, but
not limited to "Environmental Requirements" pertaining to the
Real Estate, or the suitability of the Real Estate for any
purpose whatsoever. Purchaser represents to Seller that
Purchaser will obtain an Environmental Survey investigation of
the Real Estate in accordance with the guidelines set forth in
the American Society for Testing and Material, Designation: E
1527-93, Standard Practice for Environmental Site Assessments:
Phase I Environmental Site Assessment Process and will rely
solely on such Environmental Survey. Seller shall reimburse
Purchaser up to $1,500 for the cost of such Environmental
Survey; the remainder of the cost of such survey shall be borne
by Purchaser. In the event a Phase II Environmental Study is
required, the cost of such study will be borne one-half by
Purchaser and one-half by Seller. Purchaser shall, within
fifteen (15) days of the completion of the Environmental Survey
provide Seller with a written request for remediation including
the scope of the work which Purchaser desires to be undertaken.
Within fifteen (15) days of the receipt of the remediation
request, Seller shall elect to either remediate as requested by
Purchaser at Seller's expense or Purchaser may choose to elimi-
nate the fee simple interests in the real estate together with
the building and improvements of that branch location from the
Real Estate or Lease, as an Asset to be purchased along with any
associated Operating Contracts or Furnishings.
17
In the event such fee simple interest in real estate were
eliminated, Purchaser shall have the option of accepting the
deposit accounts and employees of that branch, and the Purchase
Price shall be reduced by the Purchase Price of the asset as
stated in Section 6.1 (together with the Purchase Price of any
related assets similarly situated).
15.1 No Release. Purchaser acknowledges that
Seller has no expertise concerning "Environmental Requirements"
and "Hazardous Material" and that Purchaser is not relying upon
any representation, or the lack of the same, with respect
thereto as applied to the conditions of the Real Estate.
"Hazardous Material" means any hazardous or toxic substance,
material or waste that are or may become regulated under any
applicable federal, state or local law, rule, statute, ordinance
or regulation. "Environmental Requirements" mean any federal,
state or local law, rule, statute, ordinance or regulation, or
court or administrative order or decree, or private agreement
for which materials require special handling in collection,
storage, treatment or disposal.
16. Amendment of the Agreement. This Agreement may
be amended at any time, provided that any such amendment is in
writing and is approved by both of the parties hereto.
17. Termination of Agreement. This agreement may be
terminated at any time, but not later than the Effective Date:
(a) by mutual agreement of Purchaser and
Seller; or
(b) by Purchaser if any of the conditions pro-
vided for in Section 13 of this Agreement shall not have been
met or waived in writing by Purchaser or if both of the Branches
are not to be conveyed, sold to or assumed by Purchaser as
called for by this Agreement; or
(c) by Seller if any of the conditions provided
for in Section 14 of this Agreement shall not have been met or
waived in writing by Seller; or
(d) by either party if the Effective Date has
not occurred on or before October 31, 1999, unless the failure
of such Effective Date to occur on or before October 31, 1999 is
due to the requirement by the Office of Thrift Supervision of
additional time in order to grant its approval, in which case
such date shall automatically be extended for a like amount of
time.
17.1 In the event of termination pursuant to
Section 17 hereof, written notice thereof forthwith shall be
given to the other party, and this Agreement shall terminate
immediately upon receipt of such notice, unless an extension is
consented to by the party or parties having the right to
terminate. If this Agreement is terminated as provided herein:
(a) Each party will redeliver all documents,
work papers and other materials of the party relating to this
transaction, whether so obtained before or after the execution
hereof, to the party furnishing the same; and
18
(b) All information received by either party
hereto with respect to the business of the other party (other
than information which is a matter of public knowledge or which
has heretofore been or is hereafter published in any publication
for public distribution or filed as public information with any
governmental authority) shall not at any time be used for
business advantage by such party or disclosed by such party to
third persons to the detriment of the party furnishing such
information or if otherwise prohibited by state or federal law;
and
(c) Nothing contained in this Section 17 shall
be deemed to excuse either party for a breach of any of its
obligations or agreements undertaken or made in this Agreement.
17.2 If this Agreement is terminated by
Purchaser for any reason other than any of the conditions
provided for in Section 13 of this Agreement not having been met
or waived in writing by Purchaser, then in addition to such
other rights Seller may have, Purchaser shall be obligated to
pay all of Seller's expenses, including but not limited to,
legal, investment banking and appraisal fees, plus accrued
interest therein.
18. Expenses. Except as provided in Section 17.2
hereof, each party to this Agreement shall pay its own expenses
relating hereto, including fees and disbursements of its coun-
sel, accountants and brokers, and Purchaser shall bear the
expense of documentary stamps, sales taxes, excise taxes and
title examination fees. Transfer taxes on the Real Estate shall
be paid as provided in Section 6.2(d) hereof.
19. Notices. All notices, requests, demands, and
other communications under or connected with this Agreement
shall be in writing, and, (a) if to the Purchaser, shall be
addressed to: Xxxxx Federal Savings Bank, 000 Xxxxx Xxxxxx,
X.X. Xxx 000, Xxxxxx, XX 00000-0000, Attention: Xxxx Xxxxx
Xxxxxx, President and CEO; and (b) if to the Seller, shall be
addressed to: Susquehanna Bank, 000 Xxxx Xxxx, Xxxxxx, XX
00000-0000, Attention: Xxxxxx X. Xxxxx, Executive Vice
President. Any such notices, requests, demands, and other
communications shall be mailed, postage prepaid, first class
mail, or delivered personally and shall be sufficient and
effective when delivered to or received at the address as
specified. Each of the parties may change the address at which
it is to receive communications by like written notice to the
other.
20. Press Releases. Purchaser and Seller will
cooperate and coordinate in the joint release of any press
release regarding the Branch transaction contemplated hereunder.
21. Entire Agreement; Effect. This Agreement
(including the Exhibits, lists, schedules and documents
delivered pursuant hereto, which are made a part hereof) is
intended by the parties to and does constitute the entire
agreement of the parties with respect to the transaction
contemplated hereunder. This Agreement supersedes any and all
prior understandings, and it may not be changed, waived,
discharged, or terminated orally, but only in writing by a party
against which enforcement of the change, waiver, discharge or
termination is sought.
19
22. General. The Section headings contained in this
Agreement are for reference purposes only and shall not affect
in any way the meaning or interpretations of this Agreement.
This Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument.
This Agreement shall inure to the benefit of and be binding upon
the parties hereto and their respective successors, but shall
not be assigned, and shall not create any rights in third
parties, including stockholders or employees of either party
hereto.
23. Payment of Entrance and Exit Fees. In the event
that the Savings Association Insurance Fund imposes an Exit Fee
as a term or condition of regulatory approval of the transaction
contemplated by this Agreement, the Purchaser shall pay such
fee. Likewise, if as a term or condition of the regulatory
approval to acquire the Branches, the insurance fund insuring
the Purchaser's deposits imposes an entrance fee on the deposits
purchased, the Purchaser shall pay such fee.
[THIS SPACE INTENTIONALLY LEFT BLANK]
20
IN WITNESS WHEREOF, Purchaser and Seller have caused
this Agreement to be duly executed by their respective
representatives, thereunto duly authorized, as of the date first
above written.
ATTEST: SUSQUEHANNA BANK
/s/ Xxxxxx Xxxxxxx By: /s/ Xxxxxx X. Xxxxx
-------------------------- ------------------------
Secretary Name: Xxxxxx X. Xxxxx
Title: EVP
ATTEST: XXXXX FEDERAL SAVINGS BANK
-------------------------- By: -----------------------
Secretary Name:
21
IN WITNESS WHEREOF, Purchaser and Seller have caused
this Agreement to be duly executed by their respective
representatives, thereunto duly authorized, as of the date first
above written.
ATTEST: SUSQUEHANNA BANK
By:
-------------------------- ------------------------
Name:
Title:
ATTEST: XXXXX FEDERAL SAVINGS BANK
/s/ Xxxxx X. Xxxx By: /s/ Xxxx Xxxxx Xxxxxx
-------------------------- ------------------------
Sr. Vice President Name: Xxxx Xxxxx Xxxxxx
Title: President
21
