PURCHASE AND ASSUMPTION AGREEMENT

Exhibit 10.1

PURCHASE AND ASSUMPTION AGREEMENT

This Purchase and Assumption Agreement (this “Agreement”) dated as of January       , 2009 by and between Citizens National Bank, a national banking association, having its principal place of business at 211 Third Street, Elkins, West Virginia 26241 (“Seller”), and Pendleton Community Bank, Inc., a West Virginia corporation, having its principal place of business at 300 North Main Street, Franklin, West Virginia 26807 (“Buyer”).

W I T N E S S E T H:

WHEREAS, Seller desires to sell certain assets and transfer certain deposits and other liabilities of the branch offices listed on Schedule A hereto (collectively, the “Branches”); and

WHEREAS, Buyer desires to purchase such assets and assume such deposits and other liabilities, upon the terms and conditions provided in this Agreement.

NOW, THEREFORE, in consideration of the representations, warranties, mutual covenants and agreements contained in this Agreement, Buyer and Seller hereby agree as follows:

ARTICLE I
DEFINITIONS

1.1. Certain Defined Terms .

Some of the capitalized terms appearing in this Agreement are defined below. The definition of a term expressed in the singular also applies to that term as used in the plural in this Agreement and vice versa.

“ AAA ” has the meaning set forth in Section 12.5(a) of this Agreement.

“ Adjustment Payment ” has the meaning set forth in Section 3.3(a) of this Agreement.

“ Affiliate ” means a Person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, a specified Person, except in those cases where the controlling Person exercises control solely in a fiduciary capacity.

“ Assets ” has the meaning set forth in Section 2.1 of this Agreement.

“ Assignment and Assumption Agreement ” has the meaning set forth in Section 9.2(a)(ii) of this Agreement.

“ Banking Day ” means any day other than a Saturday, Sunday or other day on which Seller is closed.

“ Bill of Sale ” has the meaning set forth in Section 9.2(a)(1) of this Agreement.

“ Borrowers ” means those persons who are borrowers or obligors under the Loans.

“ Branch ” means the Marlinton Branch and the Petersburg Branch.

“ Cash on Hand ” means the amount of all actual currency and coinage on hand at the Branches as of the close of business on the Closing Date.

“ Closing ” means the transfer of the Assets to Buyer and the assumption of the Liabilities by Buyer on the Closing Date.

“ Closing Date ” has the meaning set forth in Section 9.1 of this Agreement.

“ Core Deposits ” means all deposits (as defined in Section 12 U.S.C. Section 1813(1)) of the applicable Branch shown on the books and records of such Branch including but not limited to all interest posted thereon, accrued but unpaid interest and both collected and uncollected funds (including overdrawn accounts), together with the Branch’s rights and responsibilities under any customer agreement evidencing or relating thereto, but excluding (i) deposit accounts associated with a public body, including but not limited to any municipal, county, state or federal government provided that such deposits accounts have been subject to a public bidding process, (ii) deposit accounts associated with Seller’s regional account relationships, if any, and (iii) Certificates of Deposits of $250,000 or more.

“ Customers ” means the Borrowers and the Depositors.

“ Damages ” has the meaning set forth in Section 10.1 of this Agreement.

“ DEP Letter ” has the meaning set forth in Section 4.15(a) of this Agreement.

“ Deposit Amount ” has the meaning set forth in Section 3.2 of this Agreement.

“ Depositors ” means account holders having Deposits.

“ Deposits ” means all deposits (as defined in 12 U.S.C. Section 1813(1)) of Seller shown on the books and records of the Branches, including but not limited to all interest posted thereon, accrued but unpaid interest and both collected and uncollected funds (including overdrawn accounts), together with Seller’s rights and responsibilities under any customer agreement evidencing or relating thereto, but excluding (i) deposits securing loans or other extensions of credit by Seller where such loans or other extensions of credit are not being transferred under this Agreement, (ii) deposits held in accounts for which Seller acts as fiduciary (other than deposits held by Retirement Plans), (iii) deposits subject to legal process, (iv) deposits which have been reported as abandoned property under the abandoned property laws of any jurisdiction, (v) deposits held in any Retirement Plan where the account holder has notified Seller or Buyer of his, her or its objection to Buyer acting as custodian or trustee of such Retirement Plan, (vi) deposits by Seller or its Affiliates; (vii) deposits constituting official checks, travelers checks, money orders, or certified checks of Seller and (viii) accounts designated as “closed” on the books and records of Seller.

“ Deposit Premium ” shall mean the sum of (i) the Marlinton Applicable Percentage multiplied by the Core Deposits of the Marlinton Branch as of the Closing Date; plus (ii) the Petersburg Applicable Percentage multiplied by the Core Deposits of the Petersburg Branch as of the Closing Date.

“ Environmental Law ” means, but is not limited to, all of the laws and implementing regulations of the United States Government, State of West Virginia, and its local governments or agencies whether currently in existence or hereinafter enacted that govern: (i) the existence, cleanup and/or remedy of hazardous substance contamination or property, (ii) the protection of the environment from released, spilled, deposited or otherwise emplaced hazardous substance contamination, (iii) the control of hazardous substances and hazardous waste, (iv) the reporting of releases, use, generation, transport, treatment and removal of hazardous substances, (v) the protection and preservation of sensitive lands, (e.g., wetlands), endangered species and historic sites, and (vi) the control and regulation of underground storage tanks.

“ ERISA Affiliate ” means any entity that is considered one employer with Seller under Section 4001 of ERISA or Section 414 of the Internal Revenue Code of 1986, as amended.

“ FDIC ” means the Federal Deposit Insurance Corporation.

“ Final Closing Statement ” has the meaning set forth in Section 3.3(b) of this Agreement.

“ Fixed Assets ” means those furnishings and equipment and other personal property owned or leased by Seller (other than proprietary signage and equipment), together with manufacturer’s warranties thereon which are assignable and in effect at Closing, which are used or located at the Petersburg Branch and are described in the attached Schedule B .

“ Form 8594 ” has the meaning set forth in Section 3.4 of this Agreement.

“ Hazardous Substance ” means, without limitation, any substance which at any time is toxic, ignitable, reactive or corrosive and is regulated by any Environmental Law or is detrimental to the environment or health of living organisms. “Hazardous Substance” includes any and all material or substance that is defined as “Hazardous Waste,” “Extremely Hazardous Waste” or a “Hazardous Substance” pursuant to any Environmental Law. “Hazardous Substance,” includes but is not restricted to asbestos, polychlorinated biphenyls (“PCBs”), radon, nuclear materials, petroleum and petroleum products and products processed with formaldehyde.

“ IRS ” means the Internal Revenue Service.

“ Liabilities ” has the meaning set forth in Section 2.5 of this Agreement.

“ Loans ” means all extensions of credit of, and agreements to extend credit by, Seller associated with the Branch, but excluding those loans identified in Schedule C hereto, including the accrued interest thereon, collateral security, guarantees, security interests and other property or contract rights securing repayment of the obligations, as well as all agreements, correspondence and other documentation relating to the loans transferred hereunder.

“ Loan Purchase Price ” means the aggregate book value of all Loans at the time of Closing and all accrued and unpaid interest and accrued but unpaid credit protection insurance premiums of all Loans at the time of the Closing (not including the unfunded portion of all outstanding lines of credit or loan commitments) less prepaid interest thereon at the time of the Closing.

“ Marlinton Applicable Percentage ” means 5.0%.

“ Marlinton Branch ” means the branch office of Seller located at 650 Seneca Trail North, Marlinton, West Virginia and more particularly described in Schedule A .

“ Marlinton Real Property Purchase Price ” shall mean Six Hundred Thousand Dollars ($600,000) for the land, building and fixtures of the Marlinton Branch.

“ Mediator ” means an independent other certified public accounting firm as shall be mutually agreeable to Seller and Buyer.

“ OCC ” means the Office of Comptroller of the Currency.

“ Operation and Maintenance Contracts ” means the contracts listed on Schedule D hereto which relate to the operation and maintenance of certain of the Fixed Assets and the Real Property.

“ Payment Amount ” has the meaning set forth in Section 3.2 of this Agreement.

“ Person ” means any association, corporation, individual, partnership, trust, limited liability company or any other entity or organization.

“ Petersburg Applicable Percentage ” means 5.1%.

“ Petersburg Branch ” means the branch office of Seller located at 102 Virginia Avenue, Petersburg, West Virginia and more particularly described on Schedule A, attached hereto.

“ Petersburg Fixed Assets and Real Property Purchase Price ” means the average of the fair market value of the land, building, furniture and fixtures of the Petersburg Branch as determined by the average of three appraisals to be obtained before closing. One appraiser will be selected by Seller, one appraiser will be selected by Buyer, and one appraiser will be selected jointly by Seller and Buyer.

“ Preliminary Closing Statement ” has the meaning set forth in Section 3.3(a) of this Agreement.

“ Preliminary Payment ” has the meaning set forth in Section 3.3(a) of this Agreement.

“ Real Property ” means real property more particularly described on Schedule E, together with the structures located thereon and the fixtures attached thereto.

“ Retirement Plans ” means those non-discretionary individual retirement accounts and qualified retirement plan accounts relating to the Deposits for which Seller acts as custodian or trustee but which are not administered by Seller’s trust department.

1.2. Accounting Terms .

To the extent that any accounting terms used in this Agreement are not defined in Section 1.1 or elsewhere herein, they shall be defined according to generally accepted accounting principles.

ARTICLE II
TRANSFER OF ASSETS AND ASSUMPTION OF LIABILITIES

2.1. Transfer of Assets .

At the Closing, subject to the satisfaction or waiver of the conditions set forth in Sections 9.3 and 9.4 hereof, Seller shall sell, convey, assign and transfer to Buyer, and Buyer shall purchase from Seller, without recourse against Seller except as provided in this Agreement, all of Seller’s right, title, and interest in and to the following assets (referred to herein collectively as the “Assets”):

(a) the Loans;

(b) the Fixed Assets;

(c) the Real Property;

(d) the Cash on Hand;

(e) Seller’s rights under the Operation and Maintenance Contracts; and

(f) the Records (as defined in Section 2.2 hereof).

THE ASSETS ARE TRANSFERRED WITHOUT ANY EXPRESS OR IMPLIED WARRANTIES (INCLUDING THE IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR USE) EXCEPT TO THE EXTENT OTHERWISE EXPRESSLY REPRESENTED BY SELLER IN THIS AGREEMENT. NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT, NO COMPUTER SOFTWARE OF ANY TYPE SHALL BE TRANSFERRED AS PART OF THE ASSETS.

2.2. Buyer’s “Due Diligence” With Respect to the Loans .

Although Seller is not specifically aware of any incomplete loan files, the Buyer acknowledges that some of the files maintained by Seller with respect to the Loans may be incomplete. Buyer will be given the opportunity for a period of sixty (60) days following the execution hereof to examine each of the files maintained by Seller in connection with the Loans to determine if such Loans shall be included in the transfer of Assets contemplated by this agreement based on the criteria set forth in the next succeeding paragraph (“Buyer Due Diligence”). Provided Buyer gives Seller written notice within seven business days after completion of the Buyer Due Diligence listing those Loans that Buyer has decided to reject, such rejected Loans shall not be a part of the Assets transferred hereunder. To the extent that the Buyer shall choose to accept transfer of the Loans, such transfer shall be “as is” with respect to the Loan documentation included in such files and Seller shall have no obligation to Buyer whether by indemnity or otherwise with respect to any documents which are missing from or not otherwise included in the Loan files.

In addition to the foregoing, Buyer shall have the opportunity to examine Loans on the Closing Date to determine if any Loan (a) is more than ninety (90) days past due as of the Closing Date; (b) has been more than ninety (90) days past due within the twelve (12) month period prior to the Closing Date; (c) has been determined to be substandard, doubtful or loss by Seller or the Seller’s governing regulatory body. If any Loan meets the criteria set forth in the immediately preceding sentence, Buyer may reject such Loans and such rejected Loans shall not be part of the Assets transferred hereunder.

2.3. Additional Due Diligence By Buyer .

In addition to the Buyer Due Diligence, the Buyer will be given the opportunity to conduct such reasonable investigations and inspections of the other Assets being transferred including the Real Property as Buyer may deem appropriate. Except for representations made by Seller under Article 4, all such Assets shall be transferred without representation or warranty by Seller, express or implied (including implied warranties of merchantability or fitness for any particular use).

2.4. Transfer of Records .

(a) Seller will deliver to Buyer at the Closing (i) all records and files that are in Seller’s possession (whether in electronic image or paper form) that can be transferred to Buyer without undue expense, relating to the Loans, the Deposits, and the other Assets to be assumed or purchased by Buyer, including but not limited to, signature cards and any pending stop payment order instructions in Seller’s possession; and (ii) all maintenance records in Seller’s possession of repairs of and warranties relating to the Fixed Assets and the Branch, (collectively referred to as the “Records”). Buyer acknowledges that any of the Records provided may not be originals but may be copies retrieved from Seller’s electronic records system, but Seller shall provide originals of the Notes relating to the Loans and any other document, paper or writing for which the original is necessary for enforcement of any rights relating thereto or to any Assets transferred hereunder.

(b) Any books and records relating to the Assets or the Liabilities (including historical information on the Loans and the Deposits) held by either Seller or Buyer after the Closing shall be maintained in accordance with and for the period provided in that party’s standard record keeping policies and procedures and shall be available for inspection and copying by the other party at the other party’s expense during regular business hours upon reasonable notice; provided, however, that, notwithstanding the foregoing, in the case of disputes between the parties relating to this Agreement the parties agree to follow and be bound by the procedures set forth in Section 12.5.

2.5. Assumption of Liabilities .

(a) At the Closing, subject to the satisfaction or waiver of the conditions set forth in Sections 9.3 and 9.4, Buyer shall assume, without recourse against Seller except as provided in this Agreement, the following, and only the following, liabilities of Seller (referred to herein collectively as the “Liabilities”) as at the close of business on the Closing Date:

(i) the Deposits (including overdrawn accounts);

(ii) Seller’s duties, obligations and responsibilities under the Operation and Maintenance Contracts;

(iii) Seller’s duties, obligations and responsibilities with respect to the Retirement Plans, except for those Retirement Plans not included in the Deposits.

(b) Except for those liabilities expressly assumed by Buyer pursuant to this Section 2.5, Buyer is not assuming any other liabilities or obligations.

2.6. Sales, Use and Transfer Taxes .

Buyer shall pay any sales, use and recordation taxes which are payable or arise as a result of the consummation of the transactions contemplated by this Agreement, regardless of whether those taxes are imposed upon Buyer or Seller. Seller shall pay real property transfer taxes. The parties shall cooperate in preparing and filing any real property transfer tax forms which may be required to be filed.

2.7. Proration of Certain Expenses .

All wages and salaries of employees, if any, offered employment pursuant to Section 8.1(a) hereof, all rents, real estate taxes, personal property taxes, utility payments, the most recent semi-annual assessment payable to the FDIC relating to the Deposits, any social security and unemployment taxes and any workers’ compensation payments relating to the any employees offered employment pursuant to Section 8.1(a) hereof shall be prorated between the parties as of the Closing Date. To the extent that any such item has been prepaid by Seller for a period extending beyond the Closing Date, Buyer shall pay Seller a proportionate amount of such item for such period; and to the extent that any such item has been deferred by Seller to a time extending beyond the Closing Date, Seller shall pay Buyer a proportionate amount of such item allocated for the period prior to the Closing Date. Within thirty (30) calendar days after the Closing Date, Seller shall provide Buyer with a statement, together with supporting documentation and certified by an authorized officer of Seller, calculating the amounts due Seller or Buyer, as the case may be, under this Section 2.7. The parties shall use their reasonable best efforts to agree upon the amounts in such statement promptly. Prior to 2:00 p.m. (Eastern Time) on the third Banking Day following the date that Buyer notifies Seller that it agrees with the amounts set forth in such statement, Buyer shall pay to Seller, or Seller shall pay to Buyer, as appropriate, in immediately available funds to an account designated in writing by such party at least two Banking Days prior to the date of such payment, the amount calculated under this Section as being due to such party.

2.8. Notice to Customers .

Prior to the Closing, Seller may, at its sole cost and expense, notify the Customers that, subject to the conditions to Closing, Buyer will be purchasing the Loans and assuming the Deposits. Within thirty (30) calendar days prior to the Closing Date, Buyer shall, at its sole cost and expense, notify the Customers that, subject to the conditions to Closing, Buyer will be purchasing the Loans and assuming the Deposits. Buyer’s notification letter shall also set forth the details of Buyer’s administration of the Loans to be purchased and the Deposits to be assumed. Seller shall provide Buyer with a list of Customers to whom such notice shall be sent. Each party shall consult with the other as to the substance of its notification letter and shall furnish a copy of such letter to the other prior to sending it. Persons who become Customers subsequent to such notifications and prior to the Closing shall be given a copy of Buyer’s notification letter and Buyer’s notification brochure at the time they become Customers. Seller shall post a notice approved by Buyer at the Branches at least thirty (30) calendar days prior to the Closing to the effect that any Deposits or Loans not assumed by Buyer shall be transferred to another of Seller’s branches. In the event that Buyer determines that it will consolidate one or both of the Branches into existing branches of Buyer, then Seller shall take all reasonable steps to assist Buyer and use reasonable efforts to provide necessary notices to Customers of that Branch, at Buyer’s expense for reasonable costs, to effect such consolidation.

2.9. Conversion .

Seller and Buyer shall cooperate with each other and shall use their reasonable best efforts (as consistent with their internal day-to-day operations) in order to cause the timely transfer of information concerning the Deposits and the Loans which is maintained on Seller’s data processing systems (the “Conversion”). Within fifteen (15) Banking Days after the date of this Agreement, Seller and Buyer shall each designate an appropriate officer or officers to be responsible for the necessary cooperation of the parties and to act as an initial contact for responding to questions and requests for information. The parties acknowledge that the goal of such cooperation is to enable Buyer to obtain and confirm data prior to the Closing Date so that such back office conversion is completed and Buyer is processing all data relating to the operations of the Branches on the Banking Day after the Closing Date.

2.10. Demand Deposit Account Owners and Borrowers .

Not less than five (5) nor more than thirty (30) Banking Days prior to Closing, Buyer shall notify all Depositors and all Borrowers with the ability to access their Deposits or Loans that, after the Closing Date, access to such Deposits or Loans through the Seller will not be honored after a certain date to be agreed upon by Seller and Buyer, but no later than sixty (60) days from closing or conversion. Such notice may be included in the notification letter sent by Buyer to the Depositors pursuant to Section 2.8.

2.11. Seller Collecting Duties .

For a period not to exceed 90 calendar days after the Closing Date, Seller agrees to act as Buyer’s collecting bank for the receipt of drafts, checks, negotiable orders of withdrawal and electronic fund transfers drawn before or after the Closing on forms provided by Seller on any accounts of Deposits assumed, home equity lines of credit or any other loan account accessible by check or draft purchased by, Buyer hereunder. Seller agrees in this regard that it shall:

(a) maintain a mechanism to receive such items on a daily basis;

(b) provide a daily listing of all such items received by it by 12:00 noon on the following Banking Day to Buyer, in such form as shall be agreed to by Buyer and Seller; and

(c) make available for pickup by Buyer no earlier than 3:00 p.m. (Eastern Time) at a location to be designated by Seller, all physical items received by Seller the following Banking Day by such means as agreed to by the parties.

Buyer and Seller agree that any reasonable courier or telephone costs associated with paragraphs (b) and (c) shall be borne by Buyer. Seller further agrees that it shall notify Buyer of any information received regarding the settlement and clearance of any domestic or foreign checks, savings bonds or coupons deposited with it prior to the Closing Date. In executing its duties under this Section 2.11, Seller is acting only as agent for the collection of items drawn on Buyer. Seller shall not supply any missing endorsements, or act as collecting bank for returned deposits, or, except as provided in Section 2.13 hereof, act as returning bank for any items not paid by Buyer. Unless caused by the gross negligence or willful or intentional misconduct of Seller, any risks of loss associated with the interim servicing, including any risk of loss associated with insufficient funds, shall be the responsibility of Buyer.

2.12. Buyer Processing Obligations .

During the period set out in Section 2.11, Buyer agrees to honor and pay all properly payable drafts, checks, negotiable orders of withdrawal or electronic fund transfers delivered to it by Seller pursuant to Section 2.11, provided the same are not stale, are not the subject of stop payment orders, or are not drawn on insufficient funds.

2.13. Return of Items During Processing Period .

(a) Buyer further agrees to be solely responsible for the return of any drafts, checks, negotiable orders of withdrawal or electronic fund transfers delivered by Seller to Buyer pursuant to Section 2.11 and return of any federal recurring payments or ACH transactions processed pursuant to Section 2.11.

(b) Seller agrees to notify Buyer of the return to it of any items deposited in, or cashed at, the Branches prior to the Closing Date and shall expeditiously forward any such items to Buyer. If Buyer cannot recover on the items referred to in this subsection (b) after making a good faith effort to do so, Seller shall reimburse Buyer for such return items upon assignment of such items by Buyer to Seller.

2.14. Payment .

In settlement of the transactions described in Section 2.11 and Section 2.12, Buyer and Seller agree that Seller shall provide Buyer with a daily net settlement figure for all such transactions from the immediately preceding Calendar Day by 12:00 noon Eastern Time on each banking Day and that the party obligated to remit any funds thereunder shall do so in immediately available funds by wire transfer by 2:00 p.m. Eastern Time on such day; any such settlement shall be provisional pending receipt by Buyer of the physical items relating to such settlement; Buyer shall adjust the next daily settlement to reflect any adjustments resulting from its receipt and examination of the physical items. Adjustments by Buyer pursuant to the immediately preceding sentence shall be limited to adjustments to correct errors made by Seller in the calculation of the amounts represented by the transactions received by it on Buyer’s behalf, and no adjustments shall be made for the effect of any improper or missing signatures or endorsements, alterations, stale dates or other irregularities with regard to a transaction or as a consequence of fraud, insufficient funds, closed account or any other reason, except as provided in Section 2.11 hereof.

2.15. Post-Closing Deposits .

Seller agrees that it will transfer, convey, and assign to Buyer without recourse all deposits received by Seller after the Closing for credit to any of the Deposits, and all payments received by Seller after the Closing for application to or on account of any of the Assets, but Seller shall be under no duty to accept any such deposit or payment.

2.16. Deposit Histories .

In case of any dispute with or inquiry by an account holder whose Deposit is subject to this Agreement, which dispute or inquiry relates to the servicing of such Deposit prior to the date for which a Deposit history has been provided to Buyer, Seller will make a good faith effort to provide Buyer with the appropriate information regarding the Deposit and copies of pertinent documents or instruments with respect to such dispute or inquiry so as to permit Buyer to respond to the account holder within a period of time and in a manner which would comply with standard banking practices and customs. Seller shall provide such information to Buyer at no charge for the first 90 calendar days after Closing, and thereafter may charge Buyer standard industry rates for such information.

2.17. Interest Reporting .

With respect to the reporting requirements of federal and state tax laws, Seller shall report through the Closing Date, and Buyer shall report from the day after the Closing Date through the end of the calendar year, all interest credited to, interest withheld from and early withdrawal penalties charged to Deposits assumed by Buyer pursuant to this Agreement and all interest paid on Loans purchased by Buyer pursuant to this Agreement. Such reports shall be made to the Customers to whose accounts such reports relate and to the applicable federal and state tax and/or regulatory authorities.

2.18. Stop Payment Items .

Buyer shall honor all stop payment orders relating to the Deposits or the Loans initiated prior to the Closing and reflected in stop payment documents delivered to Buyer on the Closing Date or immediately thereafter. If following receipt of appropriate stop order documentation, Buyer makes any payment in violation of any such order, Buyer shall be solely liable for any such payment and shall indemnify, hold harmless and defend Seller from and against all claims, losses and liabilities, including reasonable attorneys’ fees and expenses, arising out of any such payment. In the event that Buyer shall make any payment in violation of a stop payment order initiated prior to the Closing but not reflected in stop payment documents delivered to Buyer prior to such payment, Seller shall indemnify, hold harmless and defend Buyer from and against all claims, losses and liabilities, including reasonable attorneys’ fees and expenses, arising out of any such payment. Buyer’s and Seller’s indemnification obligations under this Section 2.18 shall not be subject to the limitations set forth in Section 10.4 hereof.

2.19. Payments on Loans .

During the period set out in Section 2.11, Seller shall remit promptly to Buyer all payments on Loans which may be received by Seller after the Closing. If the balance due on any Loan has been reduced by Seller as a result of a payment by check or other instrument received prior to the Closing, and if such instrument is returned to Seller after the Closing as uncollectible, an amount in cash equal to such reduction shall be paid by Buyer to Seller promptly upon demand, and Seller shall assign promptly all rights, title and interest in such uncollectible item to Buyer.

2.20. Possession and Risk of Loss .

From and after the Closing, Buyer shall be entitled to possession of the Assets and the Liabilities, and all risk of loss with respect thereto shall pass to Buyer as of the Closing.

ARTICLE III
PURCHASE PRICE

3.1. Amount of Purchase Price .

(a) In consideration of the transfer of the Assets and the Liabilities provided for in Sections 2.1 and 2.5 hereof, respectively, Buyer shall pay to Seller the sum of the following:

The items set forth in (i) through (vi) are hereinafter sometimes collectively referred to as the “Purchase Price”.

(b) Buyer shall pay Seller the Purchase Price by deducting the Purchase Price from the Deposit Amount payable by Seller to Buyer, as provided for in Section 3.2.

3.2. Payment by Seller .

In consideration of Buyer’s assumption of the Liabilities, Seller shall pay to Buyer an amount equal to the principal amount of the Deposits, plus accrued interest, as at the close of business on the Closing Date (the “Deposit Amount”), less the Purchase Price (such calculated amount, the “Payment Amount”).

3.3. Settlement .

(a) Not less than three (3) Banking Days prior to the Closing Date, Seller shall deliver to Buyer a proposed Preliminary Closing Statement (the “Preliminary Closing Statement”), which shall set forth the basis for calculating a preliminary Payment Amount completed as of the close of business five (5) Banking Days prior to the Closing Date, together with supporting documentation reasonably satisfactory to Buyer, and which shall be certified by an authorized officer of Seller. Such Preliminary Closing Statement shall be the basis of a preliminary payment to be made to Buyer’s account on the Closing Date (the “Preliminary Payment”).

(b) Within fifteen (15) calendar days after the Closing Date (or on a different date agreed upon by the parties), Seller shall provide Buyer with a proposed Final Closing Statement, which shall set forth the basis for calculating the final Payment Amount completed as of the close of business on the Closing Date, together with supporting documentation reasonably satisfactory to Buyer, certified by an authorized officer of Seller. The parties shall use their best efforts to agree upon the Final Closing Statement (the “Final Closing Statement”) promptly. Prior to 2:00 p.m. (Eastern Time) on the third Banking Day following the date that Buyer agrees to the Final Closing Statement or the date that Seller is notified of any determination of the Final Closing Statement under Subsection (d), Seller shall pay to Buyer (or Buyer shall pay to Seller, as the case may be) an amount equal to the amount due stated on the Final Closing Statement (the “Adjustment Payment”), plus interest from the day after the Closing Date until the calendar day before the Adjustment Payment is made at a rate per annum (calculated daily base on a 360-day year) equal to the Federal Home Loan Bank of Pittsburgh’s overnight RepoPlus Advance rate, as announced on the Closing Date.

(c) Both the Preliminary Payment and the Adjustment Payment shall be made by wire transfer of immediately available funds to the account of the party receiving the payment, which account shall be designated in writing by such party at least two Banking Days prior to the date of such payment.

(d) If the parties are unable to agree on a Final Closing Statement within thirty (30) calendar days after the Closing, or within ten (10) Banking Days after Buyer’s receipt of the proposed Final Closing Statement, whichever is later, then either party may submit the matter to the Mediator, who shall finally determine all disputed portions of the Final Closing Statement in accordance with the terms and conditions of this Agreement within thirty (30) calendar days after the submission. Each party agrees to accept the decision of the Mediator as final and shall pay one-half of the fees and expenses of the Mediator. The Final Closing Statement, as agreed upon by the parties and/or determined under this subsection (d), shall be final and binding upon the parties.

3.4. Allocation of Consideration .

Buyer and Seller agree to use their reasonable best efforts to agree on an appropriate allocation of the Purchase Price before the Closing Date. Seller and Buyer shall each report the transfer of the Assets and the assumption of the Liabilities for tax purposes in accordance with such allocation. Seller and Buyer each agree to complete Federal Form 8594, “Acquisition Statement Under Section 1060” (“Form 8594”), consistent with this allocation of consideration. Notwithstanding the foregoing, either party may change any such report in the event of a dispute with any taxing authority or take any other step to settle or resolve such a dispute.

ARTICLE IV
SELLER’S REPRESENTATIONS AND WARRANTIES

Seller makes the following representations and warranties to Buyer as of the date of this Agreement and as of the Closing.

4.1. Power and Authority .

(a) Seller is a national banking association duly organized, validly existing and in good standing under the laws of the United States of America and has the full power and authority to enter into and perform this Agreement.

(b) Upon the approval of this Agreement by Seller’s Board of Directors or an authorized committee thereof, the execution and delivery of this Agreement by Seller will have been duly authorized by all necessary corporate action by Seller and this Agreement will be the legal, valid and binding obligation of Seller, enforceable in accordance with its terms, except as such enforcement may be limited by bankruptcy, insolvency, reorganization, conservatorship, receivership, moratorium or other laws affecting creditors’ rights generally and a court’s right under general principles of equity to refuse to direct specific performance.

(c) Neither the execution of this Agreement nor the consummation of the transactions contemplated hereby will result in (i) a violation of Seller’s charter or b