MEMBERSHIP INTEREST PURCHASE AGREEMENT DATED AS OF JUNE 8, 2004 BY AND AMONG CARDINAL BANK, N.A. AND UNITED BANK

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CARDINAL FINANCIAL CORP | CARDINAL BANK, N.A. | UNITED BANK

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Title: MEMBERSHIP INTEREST PURCHASE AGREEMENT DATED AS OF JUNE 8, 2004 BY AND AMONG CARDINAL BANK, N.A. AND UNITED BANK
Governing Law: Virginia Date: 7/22/2004
Industry: BANKRG Law Firm: Williams Mullen Sector: FINANC

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Exhibit 2.1

MEMBERSHIP INTEREST PURCHASE AGREEMENT

DATED

AS OF JUNE 8, 2004

BY AND AMONG

CARDINAL BANK, N.A.

AND

UNITED BANK

TABLE OF CONTENTS

ARTICLE 1 PURCHASE AND SALE OF MEMBERSHIP INTERESTS

SECTION 1.1

AGREEMENT TO PURCHASE AND SELL

SECTION 1.2

PURCHASE PRICE

SECTION 1.3

PURCHASE PRICE PAYMENT

SECTION 1.4

CLOSING

SECTION 1.5.

ACCESS; INFORMATION

ARTICLE 2 REPRESENTATIONS AND WARRANTIES

SECTION 2.1

DISCLOSURE SCHEDULES

SECTION 2.2

STANDARD

SECTION 2.3

REPRESENTATIONS AND WARRANTIES OF THE SELLERS

(a)

Ownership of Shares

(b)

Organization and Qualification; Charter and Operating Agreement; Subsidiaries

(c)

Power and Authority; Effect of Agreement

(d)

Non-Contravention

(e)

Financial Statement; Tangible Net Worth s

(f)

No Undisclosed Liabilities

(g)

Tax Matters

(h)

Books and Records

(i)

Title to Properties; Absence of Liens and Encumbrances; Condition of Properties

(j)

Loans Receivable

(k)

Legal Proceedings

(l)

Insurance

(m)

Employment Matters

(n)

Commitments

(o)

Intellectual Property

(p)

Compliance with Law

(q)

Absence of Changes

(r)

Employee Benefit Plans

(s)

No Brokers

(t)

No Violation of Environmental Laws

(u)

Relationships with Related Persons

(v)

Leases

(w)

No Loan Servicing or Hedging Transactions

(x)

Disclosure

SECTION 2.4

REPRESENTATIONS AND WARRANTIES OF PURCHASER

(a)

Organization and Authority of the Purchaser

(b)

Power and Authority; Effect of Agreement

(c)

Litigation

(d)

Disclosure

ARTICLE 3 CONDITIONS PRECEDENT

SECTION 3.1

CONDITIONS PRECEDENT TO OBLIGATION OF PURCHASER

(a)

Accuracy of Representations and Warranties

(b)

Performance of Agreements

(c)

Seller's Certificate

(d)

Receipt of Licenses, Permits and Consents

(e)

Prohibited Actions

(f)

Opinion of Counsel for the Company and the Sellers

(g)

Adverse Proceedings

(h)

Update

(i)

Closing Deliveries

(j)

Changes

SECTION 3.2

CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE SELLERS

(a)

Accuracy of Representations and Warranties

(b)

Performance of Agreements

(c)

Officer’s Certificate

(d)

Payment of Purchase Price

(f)

Opinion of Purchaser's Counsel

(g)

Tangible Net Worth

(h)

Legal Lending Limit

ARTICLE 4 OTHER AGREEMENTS

SECTION 4.1

TAX MATTERS

SECTION 4.2

COOPERATION

SECTION 4.3

APPROVALS

SECTION 4.4

EMPLOYEE BENEFITS

SECTION 4.5

CONDUCT OF THE BUSINESS OF THE COMPANY

SECTION 4.6

PUBLICITY

SECTION 4.7

WAREHOUSE LINE OF CREDIT

SECTION 4.8

TAX LIABILITIES

ARTICLE 5 SURVIVAL OF REPRESENTATIONS AND WARRANTIES AND INDEMNIFICATION

SECTION 5.1

SURVIVAL OF REPRESENTATIONS AND WARRANTIES

SECTION 5.2

INDEMNIFICATION BY SELLERS

SECTION 5.3

INDEMNIFICATION BY PURCHASER

SECTION 5.4

ASSERTION OF INDEMNIFICATION CLAIM

SECTION 5.5

INDEMNIFICATION NET OF INSURANCE RECOVERY

SECTION 5.6

LIMITATION OF LIABILITY

ARTICLE 6 TERMINATION

SECTION 6.1

TERMINATION

SECTION 6.2

EFFECT OF TERMINATION

ARTICLE 7 MISCELLANEOUS

SECTION 7.1

FEES AND EXPENSES

SECTION 7.2

NOTICES

SECTION 7.3

ENTIRE AGREEMENT

SECTION 7.4

BINDING EFFECT; BENEFIT

SECTION 7.5

SECTION HEADINGS; CONSTRUCTION

SECTION 7.6

COUNTERPARTS

SECTION 7.7

APPLICABLE LAW

SECTION 7.8

TIME OF ESSENCE

SECTION 7.9

SEVERABILITY

Exhibits

Exhibit A

Definitions

Exhibit B

Opinion Letter

Exhibit C

Opinion Letter

Schedules

Schedule 2.3(b)

Subsidiaries, Affiliates and Equity Investments

Schedule 2.3(d)

Non-Contravention

Schedule 2.3(e)

Financial Statements

Schedule 2.3(f)

Undisclosed Liabilities

Schedule 2.3(g)

Tax Liabilities

Schedule 2.3(i)

Title to Property

Schedule 2.3(j)

Loans Receivable

Schedule 2.3(k)

Legal Proceedings

Schedule 2.3(l)

Insurance

Schedule 2.3(n)

Commitments

Schedule 2.3(o)

Intellectual Property

Schedule 2.3(p)

Compliance with Laws

Schedule 2.3(q)

Absence of Changes

Schedule 2.3(r)

Employee Benefit Plans

Schedule 2.3(t)

Environmental Violations

Schedule 2.3(u)

Relationships with Related Parties

Schedule 2.3(v)

Leases

iii

MEMBERSHIP INTEREST PURCHASE AGREEMENT

THIS MEMBERSHIP INTEREST PURCHASE AGREEMENT (this “Agreement”), dated as of June 8, 2004, is made and entered into by and among CARDINAL BANK, N.A. (“Purchaser”), and UNITED BANK ("Seller"). Seller and Purchaser are sometimes referred to collectively herein as the “Parties” and individually as a “Party.”

Terms capitalized but not otherwise defined herein have the meanings ascribed to them in Exhibit A hereto.

RECITALS

Seller owns all of the issued and outstanding membership interests ("Shares") of George Mason Mortgage, LLC (the "Company").

Seller desires to sell all of its Shares to Purchaser, and Purchaser desires to purchase such Shares, on the terms and conditions hereinafter set forth.

TERMS AND CONDITIONS OF AGREEMENT

NOW, THEREFORE, in consideration of the premises and the mutual covenants, promises and undertakings set forth in this Agreement, the Parties, intending to be legally bound, hereby agree as follows:

ARTICLE 1

PURCHASE AND SALE OF MEMBERSHIP INTERESTS

Section 1.1

Agreement to Purchase and Sell. Upon the terms and subject to the conditions set forth in this Agreement, on the Closing Date Seller shall sell, grant, convey, assign, transfer and deliver to Purchaser, and Purchaser shall purchase and acquire from Seller, all of its Shares (the “Purchased Shares”), free and clear of all liens, encumbrances, charges, assessments and adverse claims of any kind whatsoever.

Section 1.2

Purchase Price. The purchase price for the Purchased Shares shall be Seventeen Million and No/100 Dollars ($17,000,000) (the “Purchase Price”).

Section 1.3.

Purchase Price Payment. On the Closing Date the Purchaser shall pay Seventeen Million and No/100 Dollars ($17,000,000) to Seller by wire transfer of immediately available funds to an account designated by Seller.

Section 1.4.

Closing. The closing of the transactions contemplated hereunder (the “Closing”) shall take place at Purchaser’s offices located at 8270 Greensboro Drive, McLean, VA 22102 beginning at 10:00 a.m., local time, on June 30, 2004 (the “Closing Date”) or such

other date to which the Parties agree. However, the Closing will be postponed, if necessary, until the Company has obtained warehouse lines of credit sufficient to allow it to reduce its current warehouse lines of credit with the Seller and its bank Affiliate to the lesser of $60,000,000 or the aggregate legal lending limit of Seller and its bank Affiliate.

Section 1.5.

Access; Information. (a) Seller agrees that upon reasonable notice and subject to applicable laws relating to the exchange of information, it shall afford Purchaser and Purchaser’s officers, employees, counsel, accountants and other authorized representatives, such access during normal business hours throughout the period prior to the Closing Date to the books, records (including, without limitation, tax returns and work papers of independent auditors), properties, personnel and to such other information of the Company as Purchaser may reasonably request and, during such period, it shall furnish promptly to Purchaser such other information concerning the business, properties and personnel of the Company as Purchaser may reasonably request.

(b) Each Party agrees that it will not, and will cause its representatives not to, use any information obtained pursuant to this Section 1.5 (as well as any other information obtained prior to the date hereof in connection with the entering into of this Agreement) for any purpose unrelated to the consummation of the transactions contemplated by this Agreement. Subject to the requirements of law, each party will keep confidential, and will cause its representatives to keep confidential, all information and documents obtained pursuant to this Section 1.5 (as well as any other information obtained prior to the date hereof in connection with the entering into of this Agreement) unless such information (i) was already known to such party, (ii) becomes available to such party from other sources not known by such party to be bound by a confidentiality obligation, (iii) is disclosed with the prior written approval of the party to which such information pertains or (iv) is or becomes readily ascertainable from published information or trade sources. In the event that this Agreement is terminated or the transactions contemplated by this Agreement shall otherwise fail to be consummated, each party shall promptly cause all copies of documents or extracts thereof containing information and data as to another party hereto to be returned to the party which furnished the same. No investigation by either party of the business and affairs of the other shall affect or be deemed to modify or waive any representation, warranty, covenant or agreement in this Agreement, or the conditions to either party’s obligation to consummate the transactions contemplated by this Agreement.

ARTICLE 2

REPRESENTATIONS AND WARRANTIES

Section 2.1

Disclosure Schedules. On or before June 15, 2004, Seller shall deliver to Purchaser a schedule (“Disclosure Schedule”) setting forth, among other things, items the disclosure of which is necessary or appropriate either in response to an express disclosure requirement contained in a provision hereof or as an exception to one or more representations or warranties contained in Section 2.3 or to one or more of its covenants contained in Article 3; provided, that (a) no such item is required to be set forth in a Disclosure Schedule as an exception to a representation or warranty if its absence would not be reasonably likely to result in the related representation or warranty being deemed untrue or incorrect under the standard established by Section 2.2, and (b) the mere inclusion of an item in a Disclosure Schedule as an exception to a representation or warranty shall not be deemed an admission by a party that such

item represents a material exception or fact, event or circumstance or that such item is reasonably likely to result in a Material Adverse Effect on the Company or the Seller. On or before June 22, 2004, Purchaser shall notify Seller in writing of any concerns Purchaser has arising out of the information contained in the Disclosure Schedule or the information that comes to Purchaser’s attention in the course of the investigation permitted by Section 1.5. Purchaser shall be deemed to have accepted all matters set forth in the Disclosure Schedule unless it expresses written concerns in accordance with the preceding sentence. Purchaser may request amendments to this Agreement on the basis of written concerns that it provides to the Sellers in accordance with this Section 2.1. If such requests are not resolved satisfactorily to both parties, neither party shall have any obligation to consummate the transactions contemplated by this Agreement. Purchaser shall be deemed to have waived all written concerns that are not specifically addressed in an amendment to this Agreement. Between June 22, 2004 and the Closing Date, the Seller shall supplement the Disclosure Schedule as necessary to make the representations and warranties set forth in Section 2.3 complete and correct as of the Closing Date. Purchaser shall have the right to notify Seller of concerns and request amendments arising out of such supplements in the manner set forth above; provided that, if any matter disclosed in such a supplement occurs after June 15, 2004, Purchaser shall be entitled to seek such an amendment as to such matter only if such matter is likely to result in a Material Adverse Effect on the Company or the Seller. Purchaser shall be deemed to have accepted all matters set forth in such supplements unless it expresses written concerns on or prior to the Closing Date and to have waived all written concerns that are not specifically addressed in an amendment to this Agreement.

Section 2.2

Standard. No representation or warranty of Seller or Purchaser contained in Section 2.3 or 2.4 shall be deemed untrue or incorrect, and no party hereto shall be deemed to have breached a representation or warranty, as a consequence of the existence of any fact, event or circumstance unless such fact, circumstance or event, individually or taken together with all other facts, events or circumstances inconsistent with any representation or warranty contained in Section 2.3 or 2.4 has had or is reasonably likely to have a Material Adverse Effect.

Section 2.3

Representations and Warranties of Seller. Seller represents and warrants to Purchaser as of the date hereof and the Closing Date (except to the extent that a representation and warranty expressly speaks to a specified earlier date) as follows:

(a)

Ownership of Shares. All of the Shares of the Company are owned by Seller, free and clear of all liens, encumbrances, charges, assessments and adverse claims of any kind whatsoever. Seller has not pledged, hypothecated or otherwise granted or assigned any interest in, or otherwise restricted the transfer of, any of the Shares. The issued and outstanding Shares have been validly issued and are free of any preemptive rights. There are no outstanding or authorized subscriptions, options, warrants, calls, rights, commitments or any other agreements or arrangements of any character obligating the Company to issue any additional Shares or any other securities convertible into or evidencing the right to subscribe for any Shares. There are no limits or restrictions of any kind on the voting of any of the Shares. All of the Shares were issued in compliance with all applicable state and federal securities laws.

(b)

Organization and Qualification; Charter and Operating Agreement; Subsidiaries. The Company is a limited liability company duly organized, validly existing and

in good standing under the laws of Virginia, and has all requisite power and authority to own, lease and operate its properties (real, personal and mixed, and whether tangible or intangible), and to carry on its business as now being conducted. The Company is duly qualified to do business and is in good standing as a foreign limited liability company in all jurisdictions where the nature of the property owned or leased by it, or the nature of the business conducted by it, makes such qualification necessary. True and complete copies of the Articles of Organization and Operating Agreement of the Company and all amendments thereto have previously been delivered to Purchaser. Except as disclosed in Schedule 2.3(b), the Company has no subsidiaries or affiliates, and has no equity investments.

(c)

Power and Authority; Effect of Agreement. Seller has the requisite power and authority to execute, deliver and perform this Agreement and to consummate the transactions contemplated hereby. This Agreement has been duly and validly executed and delivered by Seller and constitutes the valid and binding obligation of Seller, enforceable against Seller in accordance with its terms, except to the extent that such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to creditors’ rights generally.

(d)

Non-Contravention. Except as se