DNB 8k 11-22-05
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934
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Date
of Report (Date of Earliest Event Reported):
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November
18, 2005
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__________________________________________
(Exact
name of registrant as specified in its charter)
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Pennsylvania
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0-16667
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23-2222567
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_____________________
(State
or other jurisdiction
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_____________
(Commission
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(I.R.S.
Employer
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of
incorporation)
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File
Number)
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Identification
No.)
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4
Brandywine Avenue, Downingtown, Pennsylvania
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19335
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_________________________________
(Address
of principal executive offices)
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___________
(Zip
Code)
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Registrant’s
telephone number, including area code:
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(610)
269-1040
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Not
Applicable
______________________________________________
Former
name or former address, if changed since last report
Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
[ ] Written
communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ ] Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[ ] Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
[ ] Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
On
November 18, 2005, DNB First, National Association (the “Bank”), the wholly
owned subsidiary of the Registrant, sold its operations center and an adjunct
administrative office, consisting of approximately 0.9 acres of ground next
to
the Bank’s main office property in Brandywine Avenue, in Downingtown,
Pennsylvania (the “Property”), to Papermill Brandywine Company, LLC, a
Pennsylvania limited liability company (“Papermill”) for a cash price of
$1,700,000. Papermill is affiliated with Carroll Contractors, Inc. and
Carrollton Development Group, Inc. and is not affiliated with the Registrant,
the Bank or any of their directors or officers. The Bank provided $1,373,125
in
financing to Papermill in connection with the acquisition and development of
the
Property as part of an overall $3,900,000 in mortgage loan financing (the
“Loan”) for a development project comprised of the Property and an adjoining
property already owned by Papermill and formerly occupied by a paper mill (the
“Papermill Property”). The Loan is secured by a mortgage on the entire project
comprising the Papermill Property and the Property.
On
November 18, 2005, the Bank leased the Property from Papermill for an initial
term ending December 1, 2010, on a “triple net” basis for an initial annual
basic lease rental of $175,842 ($14,653.50 per month) (the “Lease”). The Lease
gives the Bank successive options to renew its term for three additional terms
of five years each at a basic rent to be established at a fair market rental
taking into account all of the terms and conditions of this Lease, and an option
to terminate the Lease at any time on 120 days’ prior notice. The Bank is
obligated under the Lease to pay real estate taxes, insurance and utilities
and
must provide its own janitorial and maintenance services. The Bank may make
improvements with the consent of the lessor. The Bank is generally obligated
to
maintain and repair the roof and utility systems, but the lessor is obligated
to
make structural repairs and replacements and any roof replacements. The Lease
covers additional contingencies such as property casualty and condemnation
and
gives the Bank and the lessor certain rights of termination upon certain
casualties or condemnation events. The Bank has limited rights of assignment
and
subletting. Upon a default by the Bank under the Lease, the lessor has, among
other remedies, a right to terminate the Lease, a right to re-enter, and a
right
to accelerate and sue for liquidated damages related to the value of the Lease’s
basic rent for a limited period.
Pursuant
to the lease agreement, the Bank and Papermill, as owner of both the Property
and the Papermill Property, entered into a Parking and Utilities Easement
Agreement (the “Easement Agreement”) that provides for an integrated development
of the Property, the Papermill Property and the Bank’s main office property,
allocates parking among the owners and tenants of the three properties and
provides for other easements relating to the development, and provides for
locating certain utilities serving the Papermill Property. The Easement
Agreement has a term of 99 years and provides for shared parking on the
Property, the Bank’s main office property and the Papermill Property
(collectively, the “Parking Areas”). The Bank has exclusive rights to use spaces
on its main office property, as well as a limited number of additional spaces
on
the Papermill Property during designated hours. During the Lease term the Bank
also will have exclusive rights to use spaces on the Property, as well as a
limited number of additional spaces on the Papermill Property, during designated
hours. The owner of the Papermill Property will have rights to use parking
spaces on the Property and the Bank’s main office property at other times. The
Easement Agreement also provides for access rights for the Bank through the
Property and Papermill Property and establishes the Bank’s rights to continue
using emergency generators that presently serve the Bank. Papermill will be
responsible for maintaining, repairing, replacing, lighting and removing snow
and ice from the Parking Areas in a commercially reasonable manner.
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant
has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
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DNB
Financial Corporation
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November
22, 2005
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By:
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/s/
Bruce E. Moroney
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Name:
Bruce E. Moroney
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Title:
Chief Financial Officer and Executive Vice President
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