EXHIBIT 2.1
EXECUTION COPY
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AGREEMENT AND PLAN OF MERGER
DATED AS OF DECEMBER 19, 2002
BETWEEN
SEACOAST FINANCIAL SERVICES CORPORATION,
SEACOAST MERGER SUB, INC.
AND
BAY STATE BANCORP, INC.
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TABLE OF CONTENTS
RECITALS
ARTICLE I. DEFINITIONS; DISCLOSURE............................................1
1.01. CERTAIN DEFINITIONS..................................................1
1.02. OTHER DEFINITIONAL MATTERS...........................................8
1.03. DISCLOSURE SCHEDULES.................................................8
ARTICLE II. THE MERGER........................................................9
2.01. THE MERGER...........................................................9
2.02. EFFECTIVE DATE AND EFFECTIVE TIME; CLOSING..........................10
2.03. PARENT MERGER.......................................................10
ARTICLE III. CONSIDERATION; ELECTION AND EXCHANGE PROCEDURES.................11
3.01. CONVERSION OF SHARES................................................11
3.02. OPTIONAL TERMINATION................................................11
3.03. ELECTION PROCEDURES.................................................11
3.04. EXCHANGE PROCEDURES.................................................15
3.05. RIGHTS AS SHAREHOLDERS; STOCK TRANSFERS.............................16
3.06. NO FRACTIONAL SHARES................................................17
3.07. DISSENTING SHARES...................................................17
3.08. ANTI-DILUTION PROVISIONS............................................17
3.09. WITHHOLDING RIGHTS..................................................17
3.10. COMPANY OPTIONS.....................................................18
ARTICLE IV. ACTIONS PENDING ACQUISITION......................................18
4.01. AGREEMENTS OF THE COMPANY...........................................18
4.02. AGREEMENTS OF PARENT AND MERGER SUB.................................21
ARTICLE V. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.....................22
5.01. ORGANIZATION, STANDING AND AUTHORITY................................22
5.02. COMPANY CAPITAL STOCK...............................................22
5.03. SUBSIDIARIES........................................................22
5.04. CORPORATE POWER.....................................................23
5.05. CORPORATE AUTHORITY.................................................23
5.06. REGULATORY APPROVALS; NO DEFAULTS...................................23
5.07. SEC REPORTS.........................................................24
5.08. ABSENCE OF CERTAIN CHANGES OR EVENTS................................25
5.09. LITIGATION..........................................................25
5.10. REGULATORY MATTERS..................................................26
5.11. COMPLIANCE WITH LAWS................................................26
5.12. MATERIAL CONTRACTS; DEFAULTS........................................26
5.13. NO BROKERS..........................................................27
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5.14. EMPLOYEE BENEFIT PLANS..............................................27
5.15. LABOR MATTERS.......................................................29
5.16. ENVIRONMENTAL MATTERS...............................................29
5.17. TAX MATTERS.........................................................30
5.18. RISK MANAGEMENT INSTRUMENTS.........................................32
5.19. LOANS; NONPERFORMING AND CLASSIFIED ASSETS..........................32
5.20. BANK OWNED LIFE INSURANCE...........................................33
5.21. PROPERTIES..........................................................33
5.22. INTELLECTUAL PROPERTY...............................................33
5.23. FIDUCIARY ACCOUNTS..................................................34
5.24. BOOKS AND RECORDS...................................................34
5.25. INSURANCE...........................................................34
5.26. ALLOWANCE FOR LOAN LOSSES...........................................34
5.27. TRANSACTIONS WITH AFFILIATES........................................34
5.28. REQUIRED VOTE; ANTITAKEOVER PROVISIONS..............................34
5.29. FAIRNESS OPINION....................................................35
5.30. TRANSACTIONS IN SECURITIES..........................................35
5.31. DISCLOSURE..........................................................35
ARTICLE VI. REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB..........35
6.01. ORGANIZATION, STANDING AND AUTHORITY................................35
6.02. PARENT STOCK........................................................35
6.03. SUBSIDIARIES........................................................36
6.04. CORPORATE POWER.....................................................36
6.05. CORPORATE AUTHORITY.................................................36
6.06. REGULATORY APPROVALS; NO DEFAULTS...................................37
6.07. FINANCIAL REPORTS AND SEC DOCUMENTS; MATERIAL ADVERSE EFFECT........37
6.08. LITIGATION..........................................................38
6.09. NO BROKERS..........................................................38
6.10. TAX MATTERS.........................................................38
6.11. REGULATORY MATTERS..................................................38
6.12. OWNERSHIP OF COMPANY COMMON STOCK...................................38
6.13. FINANCIAL ABILITY...................................................39
6.14. COMPLIANCE WITH LAWS................................................39
6.15. BOOKS AND RECORDS...................................................39
6.16. ALLOWANCE FOR LOAN LOSSES...........................................39
6.17. ENVIRONMENTAL MATTERS...............................................39
6.18. DISCLOSURE..........................................................40
ARTICLE VII. COVENANTS.......................................................40
7.01. REASONABLE BEST EFFORTS.............................................40
7.02. SHAREHOLDER APPROVAL................................................41
7.03. REGISTRATION STATEMENT..............................................41
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7.04. REGULATORY FILINGS..................................................42
7.05. PRESS RELEASES......................................................43
7.06. ACCESS; INFORMATION.................................................43
7.07. AFFILIATES..........................................................44
7.08. ACQUISITION PROPOSALS...............................................44
7.09. CERTAIN POLICIES....................................................45
7.10. NASDAQ LISTING......................................................45
7.11. INDEMNIFICATION.....................................................45
7.12. BENEFIT PLANS.......................................................47
7.13. BANK MERGER.........................................................48
7.14. NOTIFICATION OF CERTAIN MATTERS.....................................48
7.15. PAYMENTS AND RELATED AGREEMENTS.....................................48
7.16. SECTION 16 MATTERS..................................................48
ARTICLE VIII. CONDITIONS TO CONSUMMATION OF THE MERGER.......................49
8.01. CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE MERGER..........49
8.02. CONDITIONS TO OBLIGATION OF THE COMPANY.............................49
8.03. CONDITIONS TO OBLIGATIONS OF PARENT.................................50
ARTICLE IX. TERMINATION......................................................51
9.01. TERMINATION.........................................................51
9.02. EFFECT OF TERMINATION; EXPENSES.....................................53
9.03. COMPANY SPECIAL PAYMENT.............................................54
9.04. PARENT SPECIAL PAYMENT..............................................55
ARTICLE X. MISCELLANEOUS.....................................................56
10.01. SURVIVAL...........................................................56
10.02. WAIVER; AMENDMENT..................................................56
10.03. COUNTERPARTS.......................................................56
10.04. GOVERNING LAW......................................................56
10.05. EXPENSES...........................................................57
10.06. NOTICES............................................................57
10.07. ENTIRE UNDERSTANDING; NO THIRD PARTY BENEFICIARIES.................58
10.08. SEVERABILITY.......................................................58
10.09. ENFORCEMENT OF THE AGREEMENT.......................................58
10.10. INTERPRETATION.....................................................58
10.11. ASSIGNMENT.........................................................58
10.12. ALTERNATIVE STRUCTURE..............................................58
ANNEX A Form of Voting Agreement
ANNEX B Index Group
ANNEX C List of Shareholders
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AGREEMENT AND PLAN OF MERGER, dated as of December 19, 2002 (this
"AGREEMENT"), between Seacoast Financial Services Corporation ("PARENT"),
Seacoast Merger Sub, Inc. ("MERGER SUB") and Bay State Bancorp, Inc. (the
"COMPANY").
RECITALS
WHEREAS, the Company is a Delaware corporation, having its principal place
of business in Brookline,
Massachusetts.
WHEREAS, Parent is a
Massachusetts corporation, having its principal place
of business in New Bedford,
Massachusetts.
WHEREAS, Merger Sub, a wholly-owned subsidiary of Parent, is a Delaware
corporation, having its principal place of business in New Bedford,
Massachusetts.
WHEREAS, the Boards of Directors of Parent and the Company have each
determined that it is advisable and in the best interests of their respective
companies and their stockholders for the Company to merge with and into Parent
(the "MERGER"), subject to the terms and conditions set forth herein.
WHEREAS, as a condition and inducement to Parent to enter into this
Agreement, each Shareholder (as defined herein) is entering into an agreement,
simultaneously with the execution of this Agreement, in the form of ANNEX A
hereto (collectively, the "VOTING AGREEMENTS") pursuant to which each
Shareholder has agreed, among other things, to vote the Shareholder's shares of
Company Common Stock in favor of this Agreement.
WHEREAS, the parties desire to make certain representations, warranties and
agreements in connection with the Merger and to prescribe certain conditions to
the Merger;
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants,
representations, warranties and agreements contained herein, and intending to be
legally bound hereby, the parties agree as follows:
ARTICLE I.
DEFINITIONS; DISCLOSURE
1.01. CERTAIN DEFINITIONS. The following terms are used in this Agreement
with the meanings set forth below:
"ACQUISITION PROPOSAL" shall mean (x) a bona fide proposal by any person
(other than Parent or any subsidiary of Parent) to the Company or its
stockholders to engage in a Change in Control Transaction, (y) a public
statement by any person (other than Parent or any subsidiary of Parent) to the
Company or its stockholders of such person's intention to make a proposal to
engage in a Change in Control Transaction if this Agreement terminates or (z)
the filing by any person (other than Parent or any subsidiary of Parent) of an
application or notice with any Governmental Entity to engage in a Change in
Control Transaction.
"AFFILIATE AGREEMENT" has the meaning set forth in Section 7.07.
"AGREEMENT" means this Agreement, as amended or modified from time to time
in accordance with Section 10.02.
"AGGREGATE CASH CONSIDERATION" shall be the product of the number of shares
of Company Common Stock outstanding immediately prior to the Effective Time
times 0.45 times the Per Share Cash Consideration.
"AVERAGE CLOSING PRICE" of the Parent Common Stock shall be determined by
averaging the closing prices per share of Parent Common Stock on Nasdaq (as
reported by the WALL STREET JOURNAL or, if not reported thereby, another
authoritative source), for the 14 consecutive Nasdaq trading days ending on and
including the Determination Date, discarding the two highest and the two lowest
closing prices, and averaging the remaining closing prices.
"BANK MERGER" has the meaning set forth in Section 7.13.
"BANK MERGER AGREEMENT" has the meaning set forth in Section 7.13.
"BENEFIT PLANS" has the meaning set forth in Section 4.01(b)(5).
"BUSINESS DAY" means Monday through Friday of each week, except a legal
holiday recognized as such by the U.S. Government or any day on which banking
institutions in the Commonwealth of
Massachusetts are authorized or obligated to
close.
"CASH ELECTION SHARES" has the meaning set forth in Section 3.03(b).
"CERTIFICATE" means any certificate which immediately prior to the
Effective Time represented shares of Company Common Stock.
"CERTIFICATE OF MERGER" has the meaning set forth in Section 2.02.
"CHANGE IN CONTROL TRANSACTION" shall mean (A) a merger, reorganization,
share exchange, consolidation or similar transaction involving the Company or
any Company Subsidiary, (B) the disposition, by sale, lease, exchange or
otherwise, of assets of the Company or any Company Subsidiary representing in
either case 15% or more of the consolidated assets of the Company and the
Company Subsidiaries, or (C) the issuance, sale or other disposition of
(including by way of merger, consolidation, share exchange or any similar
transaction) securities representing 15% or more of the voting power of the
Company or any Company Subsidiary.
"CLOSING" and "CLOSING DATE" have the meanings set forth in Section
2.02(b).
"CODE" means the Internal Revenue Code of 1986, as amended.
"COMMUNITY REINVESTMENT ACT" means the Community Reinvestment Act of 1977,
as amended.
"COMPANY" has the meaning set forth in the preamble to this Agreement.
"COMPANY AFFILIATES" has the meaning set forth in Section 7.07.
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"COMPANY BANK" means Bay State Federal Savings Bank, a federally chartered
stock savings bank, with its principal administrative office at 0000 Xxxxxx
Xxxxxx, Xxxxxxxxx, Xxxxxxxxxxxxx, and any successor thereto.
"COMPANY BOARD" means the Board of Directors of the Company.
"COMPANY BYLAWS" means the Bylaws of the Company.
"COMPANY CERTIFICATE" means the Certificate of Incorporation of the
Company.
"COMPANY COMMON STOCK" means the common stock, $.01 par value per share, of
the Company.
"COMPANY GROUP" means any "affiliated group" (as defined in Section 1504(a)
of the Code without regard to the limitations contained in Section 1504(b) of
the Code) that includes the Company and its Subsidiaries or any predecessor of
or any successor to the Company (or to another such predecessor or successor).
"COMPANY LOAN PROPERTY" has the meaning set forth in Section 5.16(b).
"COMPANY MEETING" has the meaning set forth in Section 7.02.
"COMPANY OPTIONS" means the options to acquire Company Common Stock issued
under the Company Stock Option Plans.
"COMPANY PREFERRED STOCK" means the preferred stock, par value $.01 per
share, of the Company.
"COMPANY REGULATORY AUTHORITIES" has the meaning set forth in Section
5.10(a).
"COMPANY SPECIAL PAYMENT" has the meaning set forth in Section 9.03.
"COMPANY STOCK" means, collectively, the Company Common Stock and the
Company Preferred Stock.
"COMPANY STOCK OPTION PLANS" means the Bay State Bancorp, Inc. 1998
Stock-Based Incentive Plan and the Bay State Bancorp, Inc. 1999 Stock Option
Plan.
"CONSULTING AGREEMENT" has the meaning set forth in Section 7.15.
"DERIVATIVES CONTRACT" has the meaning set forth in Section 5.18.
"DETERMINATION DATE" means the date on which the last required approval of
a Governmental Authority is obtained with respect to the Transactions, without
regard to any requisite waiting period.
"DGCL" means the Delaware General Corporation Law, as amended.
"DISCLOSURE SCHEDULE" has the meaning set forth in Section 1.03.
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"DISSENTING SHARES" has the meaning set forth in Section 3.07.
"EFFECTIVE DATE" has the meaning set forth in Section 2.02(a).
"EFFECTIVE TIME" has the meaning set forth in Section 2.02(a).
"ELECTION DEADLINE" has the meaning set forth in Section 3.03(e).
"ELECTION FORM" has the meaning set forth in Section 3.03(a).
"EMPLOYEES" has the meaning set forth in Section 5.14(a).
"ENVIRONMENTAL LAWS" has the meaning set forth in Section 5.16.
"EQUAL CREDIT OPPORTUNITY ACT" means the Equal Credit Opportunity Act, as
amended.
"EQUITY INTERESTS" means, with respect to any Person, warrants, options,
rights, convertible securities and other arrangements or commitments which
obligate the Person to issue or dispose of any of its capital stock or other
ownership interests.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"ERISA AFFILIATE" has the meaning set forth in Section 5.14(d).
The term "EXCESS PARACHUTE PAYMENT" has the meaning set forth in Section
8.03(g).
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations thereunder.
"EXCHANGE AGENT" has the meaning set forth in Section 3.03(a).
"EXPENSES" has the meaning set forth in Section 9.02(b)
"EXPIRATION DATE" has the meaning set forth in Section 9.01(b).
"FAIR HOUSING ACT" means the Fair Housing Act, as amended.
"FDIC" means the Federal Deposit Insurance Corporation.
"FEDERAL RESERVE ACT" means the Federal Reserve Act, as amended.
"FEDERAL RESERVE BOARD" means the Board of Governors of the Federal Reserve
System.
"FINAL INDEX PRICE" means the sum of the Final Prices for each company
comprising the Index Group multiplied by the appropriate weight.
"FINAL PRICE," with respect to any company belonging to the Index Group,
means the arithmetic mean of the daily closing sales prices of a share of common
stock of such company, as reported on the consolidated transaction reporting
system for the market or exchange on which such common stock is principally
traded, for the same ten trading days used in calculating the
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Average Closing Price.
"GAAP" means generally accepted accounting principles.
"GOVERNMENTAL AUTHORITY" means any federal, state or local court,
administrative agency or commission or other governmental authority or
instrumentality.
"HAZARDOUS SUBSTANCE" has the meaning set forth in Section 5.16.
"INDEMNIFIED PARTY" and "INDEMNIFYING PARTY" have the meanings set forth in
Section 7.11(a).
"INDEX GROUP" means the seventeen (17) financial institution holding
companies listed on Annex B attached hereto, the common stock of all of which
shall be publicly traded and as to which there shall not have been a publicly
announced proposal for the acquisition of any such company or as to which any
such company shall have made a proposal to acquire another company in which 20%
or more of its outstanding shares are issued, in each case at any time during
the period beginning on the date of this Agreement and ending on the
Determination Date. In the event that, at any time during the period beginning
on the date of this Agreement and ending on the Determination Date, the common
stock of any such company ceases to be publicly traded, a proposal to acquire
any such company is announced, or such company announces an acquisition proposal
in which 20% or more of such company's outstanding shares are to be issued, such
company will be removed from the Index Group, and the weights attributed to the
remaining companies will be adjusted proportionately for purposes of determining
the Final Index Price and the Initial Index Price. The seventeen (17) financial
institution holding companies and the weights attributed to them are listed on
Annex B.
"INITIAL INDEX PRICE" means the sum of each per share closing price of the
common stock of each company comprising the Index Group multiplied by the
applicable weighting, as such prices are reported on the consolidated
transactions reporting system for the market or exchange on which such common
stock is principally traded, on the trading day immediately preceding the public
announcement of the Agreement.
"INSURANCE AMOUNT" has the meaning set forth in Section 7.11(c).
"INSURANCE POLICIES" has the meaning set forth in Section 5.25.
"LIENS" means any charge, mortgage, pledge, security interest, restriction,
claim, lien or encumbrance.
"LOANS" has the meaning set forth in Section 5.19(a).
"
MASSACHUSETTS BANK COMMISSIONER" means the Commissioner of Banks of The
Commonwealth of
Massachusetts.
"
MASSACHUSETTS BOARD" means the
Massachusetts Board of Bank Incorporation.
"MATERIAL ADVERSE EFFECT" means, with respect to Parent, Merger Sub or the
Company any effect that (i) is material and adverse to the financial position,
results of operations or
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business of Parent and its Subsidiaries taken as a whole or the Company and its
Subsidiaries taken as a whole, as the case may be or (ii) would materially
impair the ability of any of Parent and its Subsidiaries or the Company and its
Subsidiaries to perform their respective obligations under this Agreement or the
Bank Merger Agreement or otherwise materially impede the consummation of the
Transactions; provided however, that Material Adverse Effect shall not be deemed
to include the impact of (a) changes in banking and similar laws, rules or
regulations of general applicability or interpretations thereof by Governmental
Authorities, (b) changes in GAAP or regulatory accounting requirements
applicable to financial institutions and their holding companies generally, (c)
changes in economic conditions affecting financial institutions generally,
including but not limited to, changes in general levels of market interest
rates, (d), with respect to the Company, direct effects of compliance with this
Agreement on the operating performance of the Company, including expenses
incurred by the Company in consummating the transactions contemplated by this
Agreement and (e) with respect to the Company, the effects of any action or
omission taken with the prior consent of Parent or as otherwise contemplated by
this Agreement, the Bank Merger Agreement, the Voting Agreements, the Payment
Agreements and the Consulting Agreements.
"MATERIAL CONTRACT" has the meaning set forth in Sections 5.12.
"MERGER" has the meaning set forth in Section 2.01(a).
"MERGER CONSIDERATION" means the number of whole shares of Parent Common
Stock, plus cash in lieu of any fractional share interest, and/or the amount of
cash into which shares of Company Common Stock shall be converted pursuant to
the provisions of Article III.
"MERGER SUB" has the meaning set forth in the preamble to this Agreement.
"MERGER SUB BYLAWS" means the Bylaws of Merger Sub.
"MERGER SUB CERTIFICATE" means the Certificate of Incorporation of Merger
Sub.
"MERGER SUB COMMON STOCK" has the meaning set forth in Section 3.01(c).
"MHPF" means the
Massachusetts Housing Partnership Fund.
"MIXED ELECTION" has the meaning set forth in Section 3.03(b).
"NASDAQ" means The Nasdaq Stock Market, Inc.'s National Market.
"NATIONAL LABOR RELATIONS ACT" means the National Labor Relations Act, as
amended.
"NO-ELECTION SHARES" has the meaning set forth in Section 3.03(b).
"OREO" means other real estate owned.
"OTS" means the Office of Thrift Supervision.
"PARENT" has the meaning set forth in the preamble to this Agreement.
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"PARENT ARTICLES" means the Articles of Organization of Parent, as amended.
"PARENT BANK" means Compass Bank for Savings, and any successor thereto.
"PARENT BENEFITS PLANS" has the meaning set forth in Section 7.12(a).
"PARENT BOARD" means the Board of Directors of Parent.
"PARENT BYLAWS" means the Bylaws of Parent.
"PARENT COMMON STOCK" means the common stock, $.01 par value per share, of
Parent.
"PARENT MERGER" has the meaning set forth in Section 2.03.
"PARENT MERGER AGREEMENT" has the meaning set forth in Section 2.03.
"PARENT PREFERRED STOCK" means the preferred stock, $.01 par value per
share, of Parent.
"PARENT REGULATORY AUTHORITIES" has the meaning set forth in Section
6.11(a).
"PAYMENTS AGREEMENTS" has the meaning set forth in Section 7.15.
"PARENT SPECIAL PAYMENT" has the meaning set forth in Section 9.04(a).
"PENSION PLAN" has the meaning set forth in Section 5.14(b).
"PER SHARE CASH CONSIDERATION" has the meaning set forth in Section
3.01(d)(1)(ii).
"PER SHARE STOCK CONSIDERATION" has the meaning set forth in Section
3.01(d)(1)(i), subject to adjustment pursuant to Section 9.01(h).
"PERSON" means any individual, bank, corporation, partnership, association,
joint-stock company, business trust, limited liability company or unincorporated
organization.
"PREVIOUSLY DISCLOSED" by a party shall mean information set forth in a
section of its Disclosure Schedule corresponding to the section of this
Agreement where such term is used (except as otherwise specifically provided in
this Agreement).
"PROXY STATEMENT" has the meaning set forth in Section 7.03(a).
"REALLOCATED CASH SHARES" has the meaning set forth in Section
3.03(g)(i)(3).
"REALLOCATED STOCK SHARES" has the meaning set forth in Section
3.03(g)(ii)(2).
"REGISTRATION STATEMENT" has the meaning set forth in Section 7.03(a).
"SAIF" means the Savings Association Insurance Fund maintained by the FDIC.
"SEC" means the Securities and Exchange Commission.
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"SEC DOCUMENTS" has the meaning set forth in Sections 5.07 and 6.07(a) in
the case of the Company and Parent, respectively.
"SECURITIES ACT" means the Securities Act of 1933, as amended, and the
rules and regulations thereunder.
"SHAREHOLDERS" means the Persons listed on ANNEX C to this Agreement.
"SIGNING DATE AVERAGE CLOSING PRICE" of Parent Common Stock shall be
determined by averaging the closing prices per share of Parent Common Stock on
Nasdaq (as reported by the Wall Street Journal or, if not reported thereby,
another authoritative source), for the 14 consecutive Nasdaq trading days ending
on the date before the date of this Agreement, discarding the two highest and
the two lowest closing prices, and averaging the remaining closing prices.
"STOCK ELECTION SHARES" has the meaning set forth in Section 3.03(b).
"SUBSIDIARY" has the meaning ascribed to that term in Rule 1-02 of
Regulation S-X of the SEC.
"SURVIVING CORPORATION" has the meaning set forth in Section 2.01(a).
"TAX" and "TAXES" mean all federal, state, local or foreign income, gross
income, gains, gross receipts, sales, use, ad valorem, goods and services,
capital, production, transfer, franchise, windfall profits, license,
withholding, payroll, employment, disability, employer health, excise,
estimated, severance, stamp, occupation, property, environmental, custom duties,
unemployment or other taxes of any kind whatsoever, together with any interest,
additions or penalties thereto and any interest in respect of such interest and
penalties.
"TAX RETURNS" means any return, declaration or other report (including
elections, declarations, schedules, estimates and information returns) with
respect to any Taxes.
"TENDER OFFER" means a tender offer or exchange offer to purchase any
shares of Company Common Stock such that, upon consummation of such offer, the
person making such tender offer or exchange offer would own or control 15% or
more of the then outstanding shares of Company Common Stock.
"TRANSACTIONS" means the Merger and the Bank Merger.
"VOTING AGREEMENTS" has the meaning set forth in the recitals to this
Agreement.
1.02. OTHER DEFINITIONAL MATTERS. Unless the context otherwise requires, a
term defined anywhere in this Agreement has the same meaning throughout; all
references to "the Agreement" or "this Agreement" are to this Agreement as
modified, supplemented or amended from time to time; and terms defined in the
singular shall have a comparable meaning when used in the plural, and VICE
VERSA.
1.03. DISCLOSURE SCHEDULES. On or prior to the date hereof, Parent has
delivered to the Company a schedule and the Company has delivered to Parent a
schedule (respectively, its
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"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 Article V or Article VI or to one or
more of its covenants contained in Article IV. The mere inclusion of a fact,
circumstance or event in a Disclosure Schedule shall not be deemed an admission
by a party that such item represents a material exception or that such item is
reasonably likely to result in a Material Adverse Effect. Any matter disclosed
pursuant to one section of a party's Disclosure Schedule shall be deemed
disclosed for all purposes of such party's Disclosure Schedule, but only to the
extent that it is reasonably apparent from a reading of the disclosure that it
also qualifies or applies to other sections of the Agreement and the
corresponding Schedule.
ARTICLE II.
THE MERGER
2.01. THE MERGER.
(a) THE MERGER. Subject to the terms and conditions of this
Agreement, at the Effective Time, the Merger Sub shall merge with and into the
Company in accordance with the applicable provisions of the DGCL (the "MERGER"),
the separate corporate existence of Merger Sub shall cease and the Company shall
survive and continue to exist as a corporation incorporated under the DGCL (the
Company, as the surviving corporation in the Merger, sometimes being referred to
herein as the "SURVIVING CORPORATION").
(b) NAME. The name of the Surviving Corporation shall be "Seacoast
Merger Sub, Inc."
(c) CERTIFICATE OF INCORPORATION AND BYLAWS. The certificate of
incorporation and bylaws of the Surviving Corporation immediately after the
Merger shall be the Merger Sub Certificate and the Merger Sub Bylaws as in
effect immediately prior to the Merger.
(d) DIRECTORS AND OFFICERS OF THE SURVIVING CORPORATION. The
directors and officers of the Surviving Corporation immediately after the Merger
shall be the directors and officers of the Merger Sub immediately prior to the
Merger, until such time as their successors shall be duly elected and qualified.
(e) DIRECTORS OF PARENT. Effective as of the Effective Time, Xxxx X.
Xxxxxx and Xxxxxx X. Xxxxxxxx shall be elected to the Parent Board.
(f) DIRECTORS OF THE PARENT BANK.
(1) Except as set forth in Section 2.01(f)(2), the directors and
officers of Parent Bank immediately after the Bank Merger shall be the
directors and officers of Parent Bank immediately prior to the Bank Merger,
until such time as their successors shall be duly elected and qualified.
(2) Effective as of the Effective Time, Xxxx X. Xxxxxx and Xxxxxx X.
Xxxxxxxx shall be elected to the Parent Bank Board of Directors.
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(g) AUTHORIZED CAPITAL STOCK. The authorized capital stock of the
Surviving Corporation upon consummation of the Merger shall be as set forth in
the Merger Sub Certificate immediately prior to the Merger.
(h) EFFECT OF THE MERGER. At the Effective Time, the effect of the
Merger shall be as provided in this Agreement and in the applicable provisions
of the DGCL. Without limiting the generality of the foregoing, and subject
thereto, at the Effective Time, all the property, rights, privileges, powers and
franchises of Merger Sub shall vest in the Surviving Corporation, and all debts,
liabilities, obligations, restrictions, disabilities and duties of Merger Sub
shall become the debts, liabilities, obligations, restrictions, disabilities and
duties of the Surviving Corporation.
(i) ADDITIONAL ACTIONS. If, at any time after the Effective Time,
the Surviving Corporation shall consider that any further assignments or
assurances in law or any other acts are necessary or desirable to (i) vest,
perfect or confirm, of record or otherwise, in the Surviving Corporation its
right, title or interest in, to or under any of the rights, properties or assets
of Merger Sub acquired or to be acquired by the Surviving Corporation as a
result of, or in connection with, the Merger, or (ii) otherwise carry out the
purposes of this Agreement, Merger Sub, and its proper officers and directors,
shall be deemed to have granted to the Surviving Corporation an irrevocable
power of attorney to execute and deliver all such proper deeds, assignments and
assurances in law and to do all acts necessary or proper to vest, perfect or
confirm title to and possession of such rights, properties or assets in the
Surviving Corporation and otherwise to carry out the purposes of this Agreement,
and the proper officers and directors of the Surviving Corporation are fully
authorized in the name of the Surviving Corporation or otherwise to take any and
all such action.
2.02. EFFECTIVE DATE AND EFFECTIVE TIME; CLOSING.
(a) Subject to the satisfaction or waiver of the conditions set
forth in Article VIII (other than those conditions that by their nature are to
be satisfied at the consummation of the Merger, but subject to the fulfillment
or waiver of those conditions), the parties shall cause a certificate of merger
relating to the Merger (the "CERTIFICATE OF MERGER") to be filed with the
Secretary of State of the State of Delaware pursuant to the DGCL on (i) a date
selected by Parent after such satisfaction or waiver which is no later than five
Business Days after such satisfaction or waiver, or (ii) such other date to
which the parties may agree in writing. The Merger provided for herein shall
become effective upon such filings or on such date as may be specified therein.
The date of such filings or such later effective date is herein called the
"EFFECTIVE DATE." The "EFFECTIVE TIME" of the Merger shall be the time of such
filings or as set forth in such filings.
(b) A closing (the "CLOSING") shall take place on the date on which
the Certificate of Merger is to be filed at 10:00 a.m., Eastern Time, at the
principal offices of Xxxxx Xxxx LLP, Boston, Massachusetts, or at such other
place, at such other time, or on such other date as the parties may mutually
agree upon (such date, the "CLOSING DATE"). At the Closing, there shall be
delivered to Parent and the Company the opinions, certificates and other
documents required to be delivered under Article VIII hereof.
2.03. PARENT MERGER. Parent and the Surviving Corporation shall take all
action necessary and appropriate, including entering into an appropriate merger
agreement (the "PARENT MERGER AGREEMENT"), to cause the Surviving Corporation to
merge with and into Parent (the
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"PARENT MERGER") in accordance with applicable laws and regulations and the
terms of the Parent Merger Agreement and as soon as practicable after
consummation of the Merger. After the Parent Merger the separate corporate
existence of the Surviving Corporation shall cease and Parent shall survive and
continue to exist as a corporation incorporated under the Massachusetts Business
Corporation Law.
ARTICLE III.
CONSIDERATION; ELECTION AND EXCHANGE PROCEDURES
3.01. CONVERSION OF SHARES. At the Effective Time, by virtue of the Merger
and without any action on the part of a holder of Equity Interests of Company or
Merger Sub:
(a) Each share of Parent Common Stock that is issued and outstanding
immediately prior to the Effective Time shall remain issued and outstanding and
shall be unchanged by the Merger.
(b) Each share of Company Common Stock (other than shares of Company
Common Stock held in a fiduciary (including custodial or agency) capacity or as
a result of debts previously contracted in good faith) held of record
immediately prior to the Effective Time by the Company, Merger Sub, Parent or
any Subsidiary of the Company or of Parent shall be canceled and retired at the
Effective Time and no consideration shall be issued in exchange therefor.
(c) Each share of common stock of Merger Sub (the "MERGER SUB COMMON
STOCK") issued and outstanding immediately prior to the Effective Time shall be
canceled and retired at the Effective Time and automatically converted into one
validly issued, fully paid and nonassessable share of common stock, $0.01 par
value, of the Surviving Corporation. Each certificate evidencing ownership of a
number of shares of Merger Sub Common Stock shall be deemed to evidence
ownership of the same number of shares of common stock, $0.01 par value, of the
Surviving Corporation.
(d) (1) Subject to Sections 3.03, 3.06, 3.07, and 3.08, each share
of Company Common Stock issued and outstanding immediately prior to the
Effective Time (other than shares to be canceled in accordance with Section
3.01(b)) shall be converted into, and shall be canceled in exchange for, the
right to receive, at the election of the holder thereof:
(i) 1.257 shares of Parent Common Stock (the "PER SHARE STOCK
CONSIDERATION"), or
(ii) a cash amount equal to $27.00 per share of Company Common
Stock (the "PER SHARE CASH CONSIDERATION").
3.02. OPTIONAL TERMINATION. Notwithstanding the provisions of Section
3.01(d)(1)(i), the Company shall have the right, waivable by it, to terminate
this Agreement pursuant to and under the circumstances set forth in Section
9.01(h) hereof, unless the Parent elects, at its option, to adjust the Per Share
Stock Consideration as described in such Section 9.01(h).
3.03. ELECTION PROCEDURES.
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(a) Parent shall designate an exchange agent to act as agent (the
"EXCHANGE AGENT") for purposes of conducting the election procedure and the
exchange procedure described in Sections 3.03 and 3.04. Provided that the
Company has delivered, or caused to be delivered, to the Exchange Agent all
information which is necessary for the Exchange Agent to perform its obligations
as specified herein, the Exchange Agent shall, no later than the twenty-fifth
(25th) Business Day prior to the anticipated Effective Date, mail or make
available to each holder of record of a Certificate or Certificates
(i) a notice and letter of transmittal (which shall specify
that delivery shall be effected, and risk of loss and title to the
Certificates theretofore representing shares of Company Common Stock
shall pass, only upon proper delivery of the Certificates to the
Exchange Agent) advising such holder of the effectiveness of the
Merger and the procedure for surrendering to the Exchange Agent such
Certificate or Certificates in exchange for the consideration set
forth in Section 3.01(d) hereof deliverable in respect thereof
pursuant to this Agreement and
(ii) an election form in such form as Parent and the Company
shall mutually agree (the "ELECTION FORM").
(b) Each Election Form shall permit the holder (or in the case of
nominee record holders, the beneficial owner through proper instructions and
documentation)
(i) to elect to receive Parent Common Stock with respect to all
of such holder's Company Common Stock as hereinabove provided (the
"STOCK ELECTION SHARES"),
(ii) to elect to receive cash with respect to all of such
holder's Company Common Stock as hereinabove provided (the "CASH
ELECTION SHARES"),
(iii) to elect to receive Parent Common Stock with respect to
part of such holder's Company Common Stock and to receive cash with
respect to the remaining part of such holder's Company Common Stock
as hereinabove provided (a "MIXED ELECTION"), or
(iv) to indicate that such holder makes no such election with
respect to such holder's shares of Company Common Stock (the
"NO-ELECTION SHARES").
(c) With respect to each holder of Company Common Stock who makes a
Mixed Election, the shares of Company Common Stock such holder elects to be
converted into the right to receive Parent Common Stock shall be treated as
Stock Election Shares and the shares such holder elects to be converted into the
right to receive cash shall be treated as Cash Election Shares for purposes of
the provisions contained in Sections 3.03(b), 3.03(g) and 3.03(h). Nominee
record holders who hold Company Common Stock on behalf of multiple beneficial
owners shall indicate how many of the shares held by them are Stock Election
Shares, Cash Election Shares and No-Election Shares.
(d) If a shareholder either (i) does not submit a properly completed
Election Form
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prior to the Election Deadline or (ii) revokes an Election Form prior to the
Election Deadline and does not resubmit a properly completed Election Form prior
to the Election Deadline, the shares of Company Common Stock held by such
shareholder shall be designated No-Election Shares. Any Dissenting Shares shall
be deemed to be Cash Election Shares, and with respect to such shares the
holders thereof shall in no event be classified as Reallocated Stock Shares.
(e) The term "ELECTION DEADLINE" shall mean 5:00 p.m., Eastern Time,
on the 20th Business Day following but not including the date of mailing of the
Election Form or such other date as Parent and the Company shall mutually agree
upon.
(f) Any election to receive Parent Common Stock or cash shall have
been properly made only if the Exchange Agent shall have actually received a
properly completed Election Form by the Election Deadline. An Election Form will
be properly completed only if accompanied by Certificates representing all
shares of Company Common Stock covered thereby, subject to the provisions of
Section 3.04(c). Any Election Form may be revoked or changed by the Person
submitting such Election Form to the Exchange Agent by written notice to the
Exchange Agent only if such written notice is actually received by the Exchange
Agent at or prior to the Election Deadline. The Certificate or Certificates
representing Company Common Stock relating to any revoked Election Form shall be
promptly returned without charge to the Person submitting the Election Form to
the Exchange Agent. The Exchange Agent shall have reasonable discretion to
determine when any election, modification or revocation is received, whether any
such election, modification or revocation has been properly made and to
disregard immaterial defects in any Election Form, and any good faith decisions
of the Exchange Agent regarding such matters shall be binding and conclusive.
Neither Parent nor the Exchange Agent shall be under any obligation to notify
any Person of any defect in an Election Form.
(g) Within seven (7) Business Days after the Election Deadline, the
Exchange Agent shall effect the allocation among holders of Company Common Stock
of rights to receive Parent Common Stock or cash in the Merger in accordance
with the Election Forms as follows:
(i) If the number of Cash Election Shares times the Per Share
Cash Consideration is less than the Aggregate Cash Consideration,
then:
(1) all Cash Election Shares (subject to Section 3.07
with respect to Dissenting Shares) shall be converted into the
right to receive cash,
(2) No-Election Shares shall then be deemed to be Cash
Election Shares to the extent necessary to have the total
number of Cash Election Shares times the Per Share Cash
Consideration equal the Aggregate Cash Consideration. If less
than all of the No-Election Shares need to be treated as Cash
Election Shares, then the Exchange Agent shall select which
No-Election Shares shall be treated as Cash Election Shares in
such manner as the Exchange Agent shall determine, and all
remaining No-Election Shares shall thereafter be treated as
Stock Election Shares,
(3) If all of the No-Election Shares are treated as Cash
Election Shares under the preceding subsection, and the total
number of Cash Election Shares (including such No-Election
Shares treated as such) times
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the Per Share Cash Consideration remains less than the
Aggregate Cash Consideration, then the Exchange Agent shall
convert on a pro rata basis as described below a sufficient
number of Stock Election Shares into Cash Election Shares
("REALLOCATED CASH SHARES") such that the sum of the number of
Cash Election Shares plus the number of Reallocated Cash Shares
times the Per Share Cash Consideration equals the Aggregate
Cash Consideration, and all Reallocated Cash Shares will be
converted into the right to receive cash, and
(4) the Stock Election Shares which are not Reallocated
Cash Shares shall be converted into the right to receive Parent
Common Stock.
(ii) If the number of Cash Election Shares times the Per Share
Cash Consideration is greater than the Aggregate Cash Consideration,
then:
(1) all Stock Election Shares and all No-Election Shares
shall be converted into the right to receive Parent Common
Stock,
(2) the Exchange Agent shall convert on a pro rata basis
as described below a sufficient number of Cash Election Shares
(excluding any Dissenting Shares) ("REALLOCATED STOCK SHARES")
such that the number of remaining Cash Election Shares
(including Dissenting Shares) times the Per Share Cash
Consideration equals the Aggregate Cash Consideration, and all
Reallocated Stock Shares shall be converted into the right to
receive Parent Common Stock, and
(3) the Cash Election Shares (subject to Section 3.07
with respect to Dissenting Shares) which are not Reallocated
Stock Shares shall be converted into the right to receive cash.
(iii) If the number of Cash Election Shares times the Per Share
Cash Consideration is equal to the Aggregate Cash Consideration,
then Sections 3.03(g)(i) and 3.03(g)(ii) above shall not apply and
all No-Election Shares and all Stock Election Shares will be
converted into the right to receive Parent Common Stock.
(h) For purposes of the calculations in Section 3.03(g), Company
Common Stock held by Parent or any of its Subsidiaries other than in a fiduciary
capacity shall be deemed Cash Election Shares without regard to whether an
Election Form has been submitted with respect to such shares, PROVIDED, HOWEVER,
that such shares shall in no event be classified as Reallocated Stock Shares. In
the event that the Exchange Agent is required pursuant to Section 3.03(g)(i)(3)
to convert some Stock Election Shares into Reallocated Cash Shares, each holder
of Stock Election Shares shall be allocated a pro rata portion of the total
Reallocated Cash Shares. In the event the Exchange Agent is required pursuant to
Section 3.03(g)(ii)(2) to convert some Cash Election Shares into Reallocated
Stock Shares, each holder of Cash Election Shares shall be allocated a pro rata
portion of the total Reallocated Stock Shares.
(i) If the tax opinion referred to in Section 8.01(e) cannot be
rendered (as
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reasonably determined by Xxxxx Xxxx LLP) as a result of the Merger potentially
failing to qualify as a reorganization under Section 368(a) of the Code, then
Parent shall reduce the number of shares of Company Common Stock entitled to
receive the Per Share Cash Consideration and correspondingly increase the number
of shares of Company Common Stock entitled to receive the Per Share Stock
Consideration by the minimum amount necessary to enable such tax opinion to be
rendered.
3.04. EXCHANGE PROCEDURES.
(a) Immediately prior to the Effective Time, for the benefit of the
holders of Certificates, Parent shall deliver to the Exchange Agent certificates
evidencing the number of shares of Parent Common Stock issuable and the
Aggregate Cash Consideration payable pursuant to this Article III in exchange
for Certificates representing outstanding shares of Company Common Stock. The
Exchange Agent shall not be entitled to vote or exercise any rights of ownership
with respect to the shares of Parent Common Stock held by it from time to time
hereunder, except that it shall receive and hold all dividends or other
distributions paid or distributed with respect to such shares for the account of
the Persons entitled thereto.
(b) After completion of the allocation referred to in Section
3.03(g), each holder of an outstanding Certificate or Certificates who has
surrendered such Certificate or Certificates to the Exchange Agent will, upon
acceptance thereof by the Exchange Agent, be entitled to a certificate or
certificates representing the number of whole shares of Parent Common Stock
and/or the amount of cash into which the aggregate number of shares of Company
Common Stock previously represented by such Certificate or Certificates
surrendered shall have been converted pursuant to this Agreement and, if such
holder's shares of Company Common Stock have been converted into Parent Common
Stock, any other distribution theretofore paid with respect to Parent Common
Stock issuable in the Merger, in each case without interest. The Exchange Agent
shall accept such Certificates upon compliance with such reasonable terms and
conditions as the Exchange Agent may impose to effect an orderly exchange
thereof in accordance with normal exchange practices. Each outstanding
Certificate which prior to the Effective Time represented Company Common Stock
and which is not surrendered to the Exchange Agent in accordance with the
procedures provided for herein shall, except as otherwise herein provided, until
duly surrendered to the Exchange Agent be deemed to evidence ownership of the
number of shares of Parent Common Stock or the right to receive the amount of
cash into which such Company Common Stock shall have been converted. After the
Effective Time, there shall be no further transfer on the records of the Company
of Certificates representing shares of Company Common Stock and if such
Certificates are presented to the Company for transfer, they shall be cancelled
against delivery of certificates for Parent Common Stock or cash as hereinabove
provided. No dividends which have been declared will be remitted to any Person
entitled to receive shares of Parent Common Stock under Section 3.03 until such
Person surrenders the Certificate or Certificates representing Company Common
Stock, at which time such dividends shall be remitted to such Person, without
interest.
(c) Appropriate transmittal materials in a form satisfactory to
Parent and Company shall be mailed as soon as practicable after the Effective
Time to each holder of record of Company Common Stock as of the Effective Time
who did not previously submit a properly completed Election Form. Parent shall
not be obligated to deliver cash and/or a certificate or certificates
representing shares of Parent Common Stock to which a holder of Company
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Common Stock would otherwise be entitled as a result of the Merger until such
holder surrenders the Certificate or Certificates representing the shares of
Company Common Stock for exchange as provided in this Section 3.04, or, in
default thereof, an appropriate affidavit of loss and indemnity agreement and/or
a bond as may be required by Parent. If any certificates evidencing shares of
Parent Common Stock are to be issued in a name other than that in which the
Certificate evidencing Company Common Stock surrendered in exchange therefor is
registered, it shall be a condition of the issuance thereof that the Certificate
so surrendered shall be properly endorsed or accompanied by an executed form of
assignment separate from the Certificate and otherwise in proper form for
transfer and that the Person requesting such exchange pay to the Exchange Agent
any transfer or other tax required by reason of the issuance of a certificate
for shares of Parent Common Stock in any name other than that of the registered
holder of the Certificate surrendered or otherwise establish to the satisfaction
of the Exchange Agent that such tax has been paid or is not payable.
(d) Any portion of the shares of Parent Common Stock and cash
delivered to the Exchange Agent by Parent pursuant to Section 3.04(a) that
remains unclaimed by the stockholders of the Company for one year after the
Effective Time (as well as any proceeds from any investment thereof) shall be
delivered by the Exchange Agent to Parent. Any stockholders of Company who have
not theretofore complied with Section 3.04(c) shall thereafter look only to
Parent for the consideration deliverable in respect of each share of Company
Common Stock such shareholder holds as determined pursuant to this Agreement
without any interest thereon. If outstanding Certificates for shares of Company
Common Stock are not surrendered or the payment for them is not claimed prior to
the date on which such shares of Parent Common Stock or cash would otherwise
escheat to or become the property of any governmental unit or agency, the
unclaimed items shall, to the extent permitted by abandoned property and any
other applicable law, become the property of Parent (and to the extent not in
its possession shall be delivered to it), free and clear of all claims or
interest of any Person previously entitled to such property. Neither the
Exchange Agent nor any party to this Agreement shall be liable to any holder of
stock represented by any Certificate for any consideration paid to a public
official pursuant to applicable abandoned property, escheat or similar laws.
Parent and the Exchange Agent shall be entitled to rely upon the stock transfer
books of the Company to establish the identity of those Persons entitled to
receive the consideration specified in this Agreement, which books shall be
conclusive with respect thereto. In the event of a dispute with respect to
ownership of stock represented by any Certificate, Parent and the Exchange Agent
shall be entitled to deposit any consideration represented thereby in escrow
with an independent third party and thereafter be relieved with respect to any
claims thereto.
(e) Notwithstanding anything in this Agreement to the contrary,
Certificates surrendered for exchange by any Company Affiliate shall not be
exchanged for certificates representing shares of Parent Common Stock to which
such Company Affiliate may be entitled pursuant to the terms of this Agreement
until Parent has received a written agreement from such Person as specified in
Section 7.07.
3.05. RIGHTS AS SHAREHOLDERS; STOCK TRANSFERS. At the Effective Time,
holders of Company Stock shall cease to be, and shall have no rights as,
stockholders of the Company other than to receive the consideration provided
under this Article III. After the Effective Time, there shall be no transfers on
the stock transfer books of the Company or the Surviving Corporation of
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shares of Company Stock.
3.06. NO FRACTIONAL SHARES. Notwithstanding any other provision of this
Agreement, neither certificates nor scrip for fractional shares of Parent Common
Stock shall be issued in the Merger. Each holder of Company Common Stock who
otherwise would have been entitled to a fraction of a share of Parent Common
Stock shall receive in lieu thereof cash (without interest) in an amount
determined by multiplying the fractional share interest to which such holder
would otherwise be entitled by the Average Closing Price. No such holder shall
be entitled to dividends, voting rights or any other rights in respect of any
fractional share.
3.07. DISSENTING SHARES. Each outstanding share of Company Common Stock the
holder of which has perfected his right to dissent under the DGCL and has not
effectively withdrawn or lost such right as of the Effective Time (the
"DISSENTING SHARES") shall not be converted into or represent a right to receive
shares of Parent Common Stock or cash hereunder, and the holder thereof shall be
entitled only to such rights as are granted by the DGCL. The Company shall give
Parent prompt notice upon receipt by the Company of any such written demands for
payment of the fair value of such shares of Company Common Stock and of
withdrawals of such demands and any other instruments provided pursuant to the
DGCL. If any holder of dissenting shares shall fail to perfect or shall have
effectively withdrawn or lost the right to dissent (which shares are referred to
as "UNPERFECTED DISSENTING SHARES") at or prior to the Effective Time and shall
have delivered a properly completed Election Form to the Exchange Agent by the
Election Deadline, the Unperfected Dissenting Shares held by such holder shall
be converted into a right to receive Company Common Stock and/or cash in
accordance with the applicable provisions of this Agreement; and if any such
holder of Unperfected Dissenting Shares shall not have delivered a properly
completed Election Form to the Exchange Agent by the Election Deadline, the
Unperfected Dissenting Shares held by such holder shall be designated
No-Election Shares. If any holder of dissenting shares shall have effectively
withdrawn or lost the right to dissent (through failure to perfect or otherwise)
after the Effective Time, the Unperfected Dissenting Shares held by such holder
shall be converted on a share by share basis into either the right to receive
Parent Common Stock and/or cash in accordance with the applicable provisions of
this Agreement as Parent or the Exchange Agent shall determine. Any payments
made in respect of Dissenting Shares shall be made by the Surviving Corporation.
3.08. ANTI-DILUTION PROVISIONS. If, between the date hereof and the
Effective Time, the shares of Parent Common Stock shall be changed into a
different number or class of shares by reason of any reclassification,
recapitalization, split-up, combination, exchange of shares or readjustment, or
a stock dividend thereon shall be declared with a record date within said
period, the Per Share Stock Consideration shall be adjusted accordingly. The
provisions of this Agreement assume that there will be no more than 5,365,122
shares of Company Common Stock outstanding or issuable upon the exercise of
options or warrants or otherwise, at the Effective Time. If there is any change
in this number as of the Effective Time, the Merger Consideration will be
appropriately adjusted.
3.09. WITHHOLDING RIGHTS. Parent (through the Exchange Agent, if
applicable) shall be entitled to deduct and withhold from any amounts otherwise
payable pursuant to this Agreement to any holder of shares of Company Common
Stock such amounts as Parent is required under the Code or any state, local or
foreign tax law or regulation thereunder to deduct and withhold with respect to
the making of such payment. Any amounts so withheld shall be treated for all
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purposes of this Agreement as having been paid to the holder of Company Common
Stock in respect of which such deduction and withholding was made by Parent.
3.10. COMPANY OPTIONS. At the Effective Time, each Company Option which is
outstanding and unexercised immediately prior to the Effective Time, whether or
not then vested and exercisable, shall be terminated and each grantee thereof
shall be entitled to receive, in lieu of each share of Company Common Stock that
would otherwise have been issuable upon the exercise thereof, an amount of cash
computed by multiplying (i) the difference between (x) the Per Share Cash
Consideration and (y) the per share exercise price applicable to such Company
Option by (ii) the number of such shares of Company Common Stock subject to such
Company Option. The Company agrees to take or cause to be taken all action
necessary to provide for termination of the Company Options and the payment of
the amounts required in connection therewith effective at or before the
Effective Time.
ARTICLE IV.
ACTIONS PENDING ACQUISITION
4.01. AGREEMENTS OF THE COMPANY.
(a) The Company covenants and agrees that, except as contemplated by
this Agreement, between the date of this Agreement and the Effective Time,
unless Parent shall otherwise agree in writing, the business of the Company, the
Company Bank and the Company's Subsidiaries shall be conducted only in, and the
Company, the Company Bank and the Company's Subsidiaries shall not take any
action except in, the usual, regular and ordinary course of business and in a
manner consistent with prudent banking practice and generally to conduct their
business in substantially the same way as heretofore conducted, and without
limiting the foregoing, to continue to operate in the same geographic markets
serving the same market segments. The Company shall use its reasonable best
efforts to preserve substantially intact the business organization of the
Company, the Company Bank and the Company's Subsidiaries, to keep available the
present services of the officers, employees and consultants of the Company, the
Company Bank and the Company's Subsidiaries and to preserve the current
relationships and goodwill of the Company, the Company Bank and the Company's
Subsidiaries with customers, suppliers and other Persons with which the Company,
the Company Bank or any of the Company's Subsidiaries have business
relationships.
(b) By way of amplification and not limitation of Section 4.01(a)
above, except as contemplated by this Agreement, the Company shall not, nor
shall the Company permit the Company Bank or any of the Company's Subsidiaries,
between the date of this Agreement and the Effective Time, directly or
indirectly to do, or publicly announce an intention to do, any of the following
without the prior written consent of Parent through its representative, its
Chief Executive Officer (which consent shall not be unreasonably withheld):
(1) CAPITAL STOCK. Other than pursuant to the Equity Interests set
forth on Schedule 4.01(b)(1) of the Company's Disclosure Schedule and
outstanding on the date hereof, (i) issue, sell or otherwise permit to
become outstanding, or authorize the creation of, any additional shares of
stock or any Equity Interests or (ii) permit any additional shares of stock
to become subject to grants of employee or director stock options or other
Equity Interests.
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(2) DIVIDENDS; ETC. (i) Make, declare, pay or set aside for payment
any dividend on or in respect of, or declare or make any distribution on
any shares of Company Stock, other than a quarterly cash dividend not in
excess of $0.10 per share, declared and paid in accordance with past
practice (including with respect to the timing of such declaration and
payment), or (ii) directly or indirectly adjust, split, combine, redeem,
reclassify, purchase or otherwise acquire, any shares of its capital stock.
(3) CONTRACTS. Except in the ordinary course of business consistent
with past practice, as required by law, as contemplated by this Agreement
or as otherwise permitted under this Section 4.01, enter into or terminate
any Material Contract (as defined in Section 5.12) or amend or modify in
any material respect any of its existing Material Contracts.
(4) HIRING. Hire any Person as an employee of the Company or any of
its Subsidiaries or promote any employee, except (i) to satisfy contractual
obligations existing as of the date hereof and set forth on Schedule
4.01(b)(4) of the Company's Disclosure Schedule, and (ii) Persons hired to
fill any vacancies arising after the date hereof and whose employment is
terminable at the will of the Company or a Subsidiary of the Company, as
applicable, other than any Person to be hired who would have a base salary,
including any guaranteed bonus or any similar bonus, considered on an
annual basis of more than $50,000.
(5) BENEFIT PLANS. Enter into, establish, adopt or amend (except (i)
as may be required by applicable law, (ii) to satisfy contractual
obligations existing as of the date hereof and set forth on Schedule
4.01(b)(5) of the Company's Disclosure Schedule or (iii) as otherwise
contemplated by this Agreement) any pension, retirement, stock option,
stock purchase, savings, profit sharing, deferred compensation, consulting,
bonus, group insurance or other employee benefit, incentive or welfare
contract, plan or arrangement, or any trust agreement (or similar
arrangement) related thereto, in respect of any director, officer or
employee of the Company or its Subsidiaries ("BENEFIT PLANS") or take any
action to accelerate the vesting or exercisability of stock options,
restricted stock or other compensation or benefits payable thereunder
except pursuant to this Agreement.
(6) DISPOSITIONS. Sell, transfer, mortgage, encumber or otherwise
dispose of or discontinue any of its assets, deposits, business or
properties except in the ordinary course of business consistent with past
practice.
(7) COMPENSATION; EMPLOYMENT AGREEMENTS; Etc. Except as contemplated
by this Agreement or as necessary to respond to any regulatory requirement,
enter into or amend or renew any employment, consulting, severance or
similar agreements or arrangements with any director, officer or employee
of the Company or its Subsidiaries or grant any salary or wage increase or
increase any employee benefit (including incentive or bonus payments),
except (i) for normal individual increases in compensation to employees in
the ordinary course of business consistent with past practice, provided
that such increases shall not result in an annual adjustment in total
compensation of more than 4% for any individual or 3% in the aggregate for
all employees of the Company, (ii) for other changes that are required by
applicable law, (iii) for bonus payments in the ordinary course of business
consistent with past practices, PROVIDED THAT such payments
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shall not exceed an aggregate of $420,000 under the Company's management
bonus plan and $200,400 under the Company's employee bonus plan, or (iv)
for grants of awards to newly-hired employees consistent with past
practice.
(8) ENVIRONMENTAL. Foreclose upon or take a deed or title to any
commercial real estate without first conducting a Phase I environmental
assessment of the property or foreclose upon any commercial real estate if
such environmental assessment indicates the presence of Hazardous Substance
in amounts which, if such foreclosure were to occur, would be material.
(9) PARACHUTE PAYMENTS.
(i) The provisions of this Section 4.01(b)(9)(i) shall apply to
payments to or for the benefit of Persons OTHER THAN Xxxx X. Xxxxxx,
Xxxxxx X. Xxxxxxxx and Xxxxxxx X. Xxxxxx. Notwithstanding anything
to the contrary contained in this Agreement, in no event shall the
Company or any of its Subsidiaries take any action or make any
payments that could result, in the reasonable opinion of Parent or
its professional advisors, either individually or in the aggregate,
in the payment of an "excess parachute payment" within the meaning
of Section 280G of the Code or that could result, in the reasonable
opinion of Parent or its professional advisors, either individually
or in the aggregate, in payments that would be nondeductible
pursuant to Section 162(m) of the Code.
(ii) The provisions of this Section 4.01(b)(9)(ii) shall only
apply to payments to or for the benefit of Xxxx X. Xxxxxx, Xxxxxx X.
Xxxxxxxx and Xxxxxxx X. Xxxxxx. In no event shall the Company or any
of its Subsidiaries pay (or agree to pay) to or for the benefit of
any of Xx. Xxxxxx, Xx. Xxxxxxxx or Xx. Xxxxxx any amount that could
be deemed to be in the nature of compensation other than (i) regular
incremental payments of his or her salary, management bonus and
fringe benefits of general applicability at the rates and under the
programs now in effect, (ii) reimbursement in the ordinary course of
his or her business expenses, and (iii) payments required to be made
to such individual under the applicable Payments Agreement.
(10) ACQUISITIONS. Acquire (other than by way of foreclosures or
acquisitions of control in a bona fide fiduciary capacity or in
satisfaction of debts previously contracted in good faith) all or any
portion of the assets, business, deposits or properties of any other entity
other than in the ordinary course of business consistent with past
practice.
(11) CAPITAL EXPENDITURES. Make any capital expenditures other than
capital expenditures in the ordinary course of business consistent with
past practice in amounts not exceeding $25,000 individually or $150,000 in
the aggregate.
(12) GOVERNING DOCUMENTS. Amend the Company Certificate or Company
Bylaws or the articles of organization or bylaws (or equivalent documents)
of any Subsidiary of the Company.
(13) ACCOUNTING METHODS. Implement or adopt any change in its
accounting
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principles, practices or methods, other than as may be required by changes
in laws or regulations or GAAP.
(14) CLAIMS. Enter into any settlement or similar agreement with
respect to any action, suit, proceeding, order or investigation to which
the Company or any of its Subsidiaries is or becomes a party after the date
of this Agreement, which settlement, agreement or action involves payment
by the Company and its Subsidiaries of an amount which exceeds $25,000
and/or would impose any material restriction on the business of the
Company.
(15) DERIVATIVES CONTRACTS. Enter into any Derivatives Contract,
except in the ordinary course of business consistent with past practice.
(16) INDEBTEDNESS. Incur any indebtedness for borrowed money (other
than deposits, federal funds purchased, cash management accounts,
borrowings from the Federal Home Loan Bank of Boston and securities sold
under agreements to repurchase), in each case in the ordinary course of
business consistent with past practice or assume, guarantee, endorse or
otherwise as an accommodation become responsible for the obligations of any
other Person, other than in the ordinary course of business consistent with
past practice.
(17) LENDING. Other than in the ordinary course of business and
consistent with existing lending policies and practices, make any
commercial, commercial real estate, or commercial and industrial loan.
(18) CHARITABLE FOUNDATION. Make any cash contributions to The Bay
State Federal Savings Charitable Foundation.
(19) ADVERSE ACTIONS. (A) Take any action that would, or is
reasonably likely to, prevent or impede the Merger from qualifying as a
reorganization within the meaning of Section 368(a) of the Code, or (B)
take any action that is intended or is reasonably likely to result in (x)
any of its representations and warranties set forth in this Agreement being
or becoming untrue in any material respect at any time at or prior to the
Effective Time, (y) any of the conditions to the Merger set forth in
Article VIII not being satisfied or (z) a material violation of any
provision of this Agreement or the Bank Merger Agreement, except, in each
case, as may be required by applicable law or regulation.
(20) COMMITMENTS. Enter into any contract with respect to, or
otherwise agree or commit to do, any of the foregoing.
4.02. AGREEMENTS OF PARENT AND MERGER SUB. From the date hereof until the
Effective Time, each of Parent and Merger Sub will operate in the ordinary
course of business consistent with past practice. In addition, except as
expressly contemplated or permitted by this Agreement, without the prior written
consent of the Company, Parent will not, and will cause each of its Subsidiaries
not to (1) take any action that would, or is reasonably likely to, prevent or
impede the Merger from qualifying as a reorganization within the meaning of
Section 368(a) of the Code, (2) take any action that is intended or is
reasonably likely to result in (x) any of its representations and warranties set
forth in this Agreement being or becoming untrue in any
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material respect at any time at or prior to the Effective Time, (y) any of the
conditions to the Merger set forth in Article VIII not being satisfied or (z) a
material violation of any provision of this Agreement or the Bank Merger
Agreement except, in each case, as may be required by applicable law or
regulation, (3) amend the Parent Articles or Parent Bylaws in a manner that
would materially and adversely effect the benefits of the Merger to the
stockholders of the Company, or (4) enter into any contract with respect to, or
otherwise agree or commit to do, any of the foregoing.
ARTICLE V.
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as Previously Disclosed, the Company hereby represents and warrants
to Parent and Merger Sub:
5.01. ORGANIZATION, STANDING AND AUTHORITY. The Company is duly organized,
validly existing and in good standing under the laws of the State of Delaware.
The Company is duly qualified to do business and is in good standing in each
jurisdiction where its ownership or leasing of property or assets or the conduct
of its business requires it to be so qualified. The Company has in effect all
federal, state, local and foreign governmental authorizations necessary for it
to own or lease its properties and assets and to carry on its business as now
conducted.
5.02. COMPANY CAPITAL STOCK. The authorized capital stock of the Company
consists solely of 11,000,000 shares of Company Common Stock, of which 4,711,178
shares are outstanding as of the date hereof, and 1,000,000 shares of Company
Preferred Stock, of which no shares are outstanding. As of the date hereof,
2,894,518 shares of Company Common Stock were held in treasury by the Company or
otherwise directly or indirectly owned by the Company. The outstanding shares of
Company Common Stock have been duly authorized and validly issued and are fully
paid and non-assessable, and none of the outstanding shares of Company Common
Stock have been issued in violation of the preemptive rights of any Person.
Section 5.02 of the Company's Disclosure Schedule sets forth for each Company
Option, the name of the grantee, the date of the grant, the type of grant, the
status of the option grant as qualified or non-qualified under Section 422 of
the Code, the number of shares of Company Common Stock subject to each option,
the number of shares of Company Common Stock subject to options that are
currently exercisable and the exercise price per share. Except as set forth in
the preceding sentence, there are no shares of Company Stock reserved for
issuance, the Company does not have any Equity Interests issued or outstanding
with respect to Company Stock, and the Company does not have any commitment to
authorize, issue or sell any Company Stock or Equity Interests. The Bay State
Bancorp, Inc. 1999 Stock Option Plan has been amended by the Board prior to the
date of this Agreement to delete the provision providing for the automatic grant
of options upon a change of control. No Equity Interests are outstanding under
such Plan and the Company will not hereafter grant any Equity Interests
thereunder.
5.03. SUBSIDIARIES.
(a) (1) The Company has Previously Disclosed a list of all of its
Subsidiaries together with the jurisdiction of organization of each such
Subsidiary, (2) the Company owns, directly or indirectly, all the issued and
outstanding equity securities of each of its Subsidiaries, (3) no equity
securities of any of its Subsidiaries are or may become required to be issued
(other
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than to the Company) by reason of any Equity Interest or otherwise, (4) there
are no contracts, commitments, understandings or arrangements by which any of
its Subsidiaries is or may be bound to sell or otherwise transfer any of its
equity securities (other than to the Company or any of its wholly-owned
Subsidiaries), (5) there are no contracts, commitments, understandings, or
arrangements relating to the Company's rights to vote or to dispose of such
securities, and (6) all the equity securities of the Company's Subsidiaries held
by the Company or its Subsidiaries are fully paid and nonassessable and are
owned by the Company or its Subsidiaries free and clear of any Liens.
(b) Except for securities and other interests held in a fiduciary
capacity and beneficially owned by third parties or taken in consideration of
debts previously contracted, the Company does not own beneficially, directly or
indirectly, any equity securities or similar interests of any Person or any
interest in a partnership or joint venture of any kind other than its
Subsidiaries and stock in the Federal Home Loan Bank of Boston.
(c) Each of the Company's Subsidiaries has been duly organized and
is validly existing in good standing under the laws of the jurisdiction of its
organization and is duly qualified to do business and in good standing in the
jurisdictions where its ownership or leasing of property or the conduct of its
business requires it to be so qualified.
(d) The deposit accounts of the Company Bank are insured by the SAIF
in the manner and to the maximum extent provided by applicable law, and the
Company Bank has paid all deposit insurance premiums and assessments required by
applicable laws and regulations.
5.04. CORPORATE POWER. Each of the Company and its Subsidiaries has the
corporate power and authority to carry on its business as it is now being
conducted and to own all its properties and assets; and the Company has the
corporate power and authority to execute, deliver and perform its obligations
under this Agreement and to consummate the transactions contemplated hereby,
subject to receipt of all necessary approvals of Governmental Authorities and
the approval of this Agreement by the holders of a majority of the outstanding
shares of Company Common Stock.
5.05. CORPORATE AUTHORITY. Subject to the approval of this Agreement by the
holders of a majority of the outstanding shares of Company Common Stock, this
Agreement and the transactions contemplated hereby have been authorized by all
necessary corporate action of the Company and the Company Board on or prior to
the date hereof. The Company has duly executed and delivered this Agreement and,
assuming due authorization, execution and delivery by Parent and Merger Sub,
this Agreement is a valid and legally binding obligation of the Company,
enforceable in accordance with its terms (except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium,
fraudulent transfer and similar laws of general applicability relating to or
affecting creditors' rights or by general equity principles).
5.06. REGULATORY APPROVALS; NO DEFAULTS.
(a) No consents or approvals of, or waivers by, or filings or
registrations with, any Governmental Authority or with any third party are
required to be made or obtained by the Company or any of its Subsidiaries in
connection with the execution, delivery or performance by
- 23 -
the Company or the Company Bank of this Agreement and the Bank Merger Agreement,
as applicable, or to consummate the Transactions and the other transactions
contemplated hereby and thereby, except for (A) filings of applications or
notices with, and approvals or waivers by, the Federal Reserve Board, the OTS,
the FDIC, the Massachusetts Bank Commissioner, the Depositors Insurance Fund,
the Massachusetts Board and the MHPF, as required, (B) filings with the SEC and
state securities authorities in connection with the issuance of Parent Common
Stock in the Merger, (C) the filing of a Certificate of Merger with the
Secretary of State of the State of Delaware pursuant to the DGCL, (D) the
approval of this Agreement by the holders of a majority of the outstanding
shares of Company Common Stock and (E) such corporate approvals and such
consents or approvals of, or waivers by, or filings or registrations with,
certain of the foregoing federal and state banking agencies in connection with
the Bank Merger. As of the date hereof, the Company is not aware of any reason
why the approvals set forth above and referred to in Section 8.01(b) will not be
received in a timely manner and without the imposition of a condition,
restriction or requirement of the type described in Section 8.01(b) or that the
requisite approval of the Company's stockholders will not be obtained.
(b) Subject to receipt of the approvals referred to in Section
5.06(a), and the expiration of related waiting periods, the execution, delivery
and performance of this Agreement and the Bank Merger Agreement by the Company
and the Company Bank, as applicable, and the consummation of the Transactions
and the other transactions contemplated hereby and thereby do not and will not
(A) constitute a breach or violation of, or a default under, or give rise to any
Lien, any acceleration of remedies or any right of termination under, any law,
rule or regulation or any judgment, decree, order, governmental permit or
license, or agreement, indenture or instrument of the Company or any of its
Subsidiaries or to which the Company or any of its Subsidiaries or any of their
respective properties is subject or bound, (B) constitute a breach or violation
of, or a default under, the certificate of incorporation or bylaws (or similar
governing documents) of the Company or any of its Subsidiaries or (C) require
any consent or approval under any such law, rule, regulation, judgment, decree,
order, governmental permit or license, agreement, indenture or instrument.
5.07. SEC REPORTS. The Company's Annual Reports on Form 10-K for the fiscal
years ended March 31, 2002, March 31, 2001 and March 31, 2000 and all other
reports, registration statements, definitive proxy statements or information
statements filed or to be filed by it subsequent to March 31, 1999 with the SEC
(collectively, the Company's "SEC DOCUMENTS"), as of the date filed or to be
filed and as amended prior to the date hereof, (A) complied or will comply in
all material respects as to form with the applicable requirements under the
Securities Act or the Exchange Act, as the case may be, and (B) did not and will
not contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading,
except that information as of a later date shall be deemed to modify information
as of an earlier date; and (C) each of the balance sheets contained in or
incorporated by reference into any such SEC Document (including the related
notes and schedules thereto) fairly presents, or will fairly present, the
consolidated financial position of the Company and its Subsidiaries as of its
date, and (D) each of the consolidated statements of income and changes in
shareholders' equity and cash flows or equivalent statements in such SEC
Documents (including any related notes and schedules thereto) fairly presents,
or will fairly present, the consolidated results of operations, changes in
shareholders' equity and changes in cash flows, as the case may
- 24 -
be, of the Company and its Subsidiaries for the periods to which they relate, in
each case in accordance with GAAP consistently applied during the periods
involved.
5.08. ABSENCE OF CERTAIN CHANGES OR EVENTS. Since March 31, 2002, except as
set forth in Section 5.08 of the Company's Disclosure Schedule, there has not
been (a) either individually or in the aggregate, any Material Adverse Effect,
(b) any material damage, destruction or loss with respect to any property or
asset of the Company or any of its Subsidiaries, (c) any change by the Company
or any of its Subsidiaries in its accounting methods, principles or practices,
other than changes required by applicable law or GAAP or regulatory accounting
as concurred in by the Company's independent accountants, (d) any revaluation by
the Company or any of its Subsidiaries of any asset, including, without
limitation, writing off of notes or accounts receivable, other than in the
ordinary course of business consistent with past practice, (e) any entry by the
Company or any of its Subsidiaries into any contract or commitment (other than
with respect to Loans, as hereinafter defined) of more than $30,000, (f) any
declaration, setting aside or payment of any dividend or distribution in respect
of any capital stock of the Company or any of its Subsidiaries except in the
ordinary course of business in an amount consistent with past practice or any
redemption, purchase or other acquisition of any of its securities, (g) except
as would have been permitted by Section 4.01(b)(5) or Section 4.01(b)(7) hereof,
any increase in or establishment of any bonus, insurance, severance, deferred
compensation, pension, retirement, profit sharing, stock option (including,
without limitation, the granting of stock options, stock appreciation rights,
performance awards, or restricted stock awards), stock purchase or other
employee benefit plan, or any other increase in the compensation payable or to
become payable to any directors, officers or employees of the Company or any of
its Subsidiaries, or any grant of severance or termination pay, or any contract
or arrangement entered into to make or grant any severance or termination pay,
any payment of any bonus, or the taking of any other material action not in the
ordinary course of business with respect to the compensation or employment of
directors, officers or employees of the Company or any of its Subsidiaries, (h)
any strike, work stoppage, slowdown or other labor disturbance, (i) any material
election made by the Company or any of its Subsidiaries for federal or state
income tax purposes, (j) any change in the credit policies or procedures of the
Company or any of its Subsidiaries, the effect of which was or is to make any
such policy or procedure materially less restrictive in any material respect,
(k) any material liability or obligation of any nature (whether accrued,
absolute, contingent or otherwise and whether due or to become due), including
without limiting the generality of the foregoing, liabilities as guarantor under
any guarantees or liabilities for taxes, other than in the ordinary course of
business consistent with past practice, (l) any forgiveness or cancellation of
any indebtedness or contractual obligation other than in the ordinary course of
business consistent with past practice, (m) except with respect to funds
borrowed by the Company or any of its Subsidiaries from the Federal Home Loan
Bank, any mortgage, pledge, lien or lease of any assets, tangible or intangible,
of the Company or any of its Subsidiaries with a value in excess of $25,000 in
the aggregate (n) any acquisition or disposition of any assets or properties
having a value in excess of $50,000, or any contract for any such acquisition or
disposition entered into, (o) any lease of real or personal property entered
into, other than in connection with foreclosed property or in the ordinary
course of business consistent with past practice.
5.09. LITIGATION. No litigation, claim or other proceeding before any court
or governmental agency is pending against the Company or any of its Subsidiaries
and, to the Company's knowledge, no such litigation, claim or other proceeding
has been threatened and
- 25 -
there are no facts which could reasonably give rise to such litigation, claim or
other proceeding.
5.10. REGULATORY MATTERS.
(a) Neither the Company nor any of its Subsidiaries nor any of any
of their respective properties is a party to or is subject to any order, decree,
agreement, memorandum of understanding or similar arrangement with, or a
commitment letter or similar submission to, or extraordinary supervisory letter
from, any federal or state governmental agency or authority charged with the
supervision or regulation of financial institutions or issuers of securities or
engaged in the insurance of deposits or the supervision or regulation of it
(collectively, the "COMPANY REGULATORY AUTHORITIES"). The Company and its
Subsidiaries have paid all assessments made or imposed by any Company Regulatory
Authority.
(b) Neither the Company nor any its Subsidiaries has been advised
by, or has any knowledge of facts which could give rise to an advisory notice
by, any Company Regulatory Authority that such Company Regulatory Authority is
contemplating issuing or requesting (or is considering the appropriateness of
issuing or requesting) any such order, decree, agreement, memorandum of
understanding, commitment letter, supervisory letter or similar submission.
5.11. COMPLIANCE WITH LAWS. Each of the Company and its Subsidiaries:
(a) is in material compliance with all applicable federal, state,
local and foreign statutes, laws, regulations, ordinances, rules, judgments,
orders or decrees applicable thereto or to the employees conducting such
businesses, including, without limitation, the Equal Credit Opportunity Act, the
Fair Housing Act, the Community Reinvestment Act, the Home Mortgage Disclosure
Act and all other applicable fair lending laws and other laws relating to
discriminatory business practices;
(b) has all permits, licenses, authorizations, orders and approvals
of, and has made all filings, applications and registrations with, all
Governmental Authorities that are required in order to permit them to own or
lease their properties and to conduct their businesses as presently conducted;
all such permits, licenses, certificates of authority, orders and approvals are
in full force and effect and, to the Company's knowledge, no suspension or
cancellation of any of them is threatened; and
(c) has received, since March 31, 2000, no notification or
communication from any Governmental Authority (A) asserting that the Company or
any of its Subsidiaries is not in material compliance with any of the statutes,
regulations or ordinances which such Governmental Authority enforces or (B)
threatening to revoke any license, franchise, permit or governmental
authorization (nor, to the Company's knowledge, do any grounds for any of the
foregoing exist).
5.12. MATERIAL CONTRACTS; DEFAULTS. Except for documents listed as exhibits
to the Company's Annual Report on Form 10-K for the year ended March 31, 2002,
neither the Company nor any of its Subsidiaries is a party to, bound by or
subject to any agreement, contract, arrangement, commitment or understanding
(whether written or oral) (i) that is a "MATERIAL CONTRACT" within the meaning
of Item 601(b)(10) of the SEC's Regulation S-K, (ii) that materially restricts
the conduct of business by the Company or by any of its Subsidiaries,
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or (iii) that cannot be terminated without penalty on notice of 30 days or less.
Neither the Company nor any of its Subsidiaries is in material default under any
contract, agreement, commitment, arrangement, lease, insurance policy or other
instrument to which it is a party, by which its respective assets, business, or
operations may be bound or affected, or under which it or its respective assets,
business, or operations receives benefits, and there has not occurred any event
that, with the lapse of time or the giving of notice or both, would constitute
such a default. No power of attorney or similar authorization given directly or
indirectly by the Company or any of its Subsidiaries is currently outstanding.
5.13. NO BROKERS. No action has been taken by the Company or any of its
Subsidiaries that would give rise to any valid claim against the Company or its
Subsidiaries for a brokerage commission, finder's fee or other like payment with
respect to the transactions contemplated by this Agreement, excluding a
Previously Disclosed fee to be paid to Sandler X'Xxxxx & Partners, L.P.
5.14. EMPLOYEE BENEFIT PLANS.
(a) All benefit and compensation plans, contracts, policies or
arrangements covering current or former employees of the Company and its
Subsidiaries (the "EMPLOYEES") and current or former directors of the Company
including, but not limited to, "employee benefit plans" within the meaning of
Section 3(3) of ERISA, and deferred compensation, stock option, stock purchase,
stock appreciation rights, stock based, incentive and bonus plans (the "BENEFITS
PLANS"), are Previously Disclosed in the Disclosure Schedule. True and complete
copies of all Benefit Plans including, but not limited to, any trust instruments
and insurance contracts forming a part of any Benefit Plans and all amendments
thereto have been provided or made available to Parent.
(b) All Benefits Plans are in substantial compliance with ERISA.
Each Benefit Plan which is an "employee pension benefit plan" within the meaning
of Section 3(2) of ERISA ("PENSION PLAN") and which is intended to be qualified
under Section 401(a) of the Code, has received a favorable determination letter
from the Internal Revenue Service, and the Company is not aware of any
circumstances likely to result in revocation of any such favorable determination
letter or the loss of the qualification of such Pension Plan under Section
401(a) of the Code. There is no material pending or, to the Company's knowledge,
threatened litigation relating to the Benefits Plans. Neither the Company nor
any of its Subsidiaries has engaged in a transaction with respect to any Benefit
Plan or Pension Plan that, assuming the taxable period of such transaction
expired as of the date hereof, could subject the Company or any of its
Subsidiaries to a tax or penalty imposed by either Section 4975 of the Code or
Section 502(i) of ERISA in an amount which would be material.
(c) All contributions required to be made under the terms of any
Benefit Plan have been timely made or have been reflected on the financial
statements of the Company included in the Company's SEC Documents.
(d) Neither the Company, nor any of its Subsidiaries, or any entity
which is considered one employer with the Company under Section 4001(a)(15) or
Section 414 of the Code (an "ERISA AFFILIATE") has incurred any liability under
Title IV of ERISA which will not have been paid in full prior to the Closing.
There has been no "accumulated funding deficiency"
- 27 -
(whether or not waived) with respect to any Pension Plan subject to Code Section
412 or ERISA Section 302. With respect to any Pension Plan subject to Title IV
of ERISA, there has been no (nor will be any as a result of the transaction
contemplated by this Agreement) (i) "reportable event," within the meaning of
ERISA Section 4043, or the regulations thereunder (for which notice the notice
requirement is not waived under 29 C.F.R. Part 2615) with respect to the
Company, and (ii) no event or condition which presents a material risk of plan
termination or any other event that may cause the Company, the Company Bank or
any ERISA Affiliate to incur liability or have a lien imposed on its assets
under Title IV of ERISA. No Pension Plan maintained by the Company, any
Subsidiary or any ERISA Affiliate and subject to Title IV of ERISA has any
"unfunded benefit liabilities" for which the Company would be liable, within the
meaning of ERISA Section 4001(a)(18), as of the Closing Date, for which the
Company would be liable, and, without any additional contributions being made to
such Plan, the assets of such Plan are sufficient to satisfy all obligations of
the Plan if the Plan were to be terminated as of the Effective Time for which
the Company would be liable. Neither the Company, nor any of its Subsidiaries,
or any ERISA Affiliate has ever maintained a Multiemployer Plan.
(e) There are no pending or, to the knowledge of the Company,
threatened claims by or on behalf of any Benefit Plans, or by or on behalf of
any individual participants or beneficiaries of any Benefit Plans, alleging any
breach of fiduciary duty on the part of the Company or any of its officers,
directors or employees under ERISA or any other applicable regulations, or
claiming benefit payments for which the Company may be liable (other than those
made in the ordinary operation of such plans), nor is there, to the knowledge of
the Company, any basis for such claim. The Benefit Plans are not the subject of
any pending (or to the knowledge of the Company, any threatened) investigation
or audit by the Internal Revenue Service, the Department of Labor or the Pension
Benefit Guaranty Corporation.
(f) With respect to any Benefit Plan that is an employee welfare
benefit plan (within the meaning of Section 3(1) of ERISA) (a "Welfare Plan")
and except as Previously Disclosed, (i) each Welfare Plan for which
contributions are claimed by the Company as deductions under any provision of
the Code is in material compliance with all applicable requirements pertaining
to such deduction, (ii) with respect to any welfare benefit fund (within the
meaning of Section 419 of the Code) related to a Welfare Plan, there is no
disqualified benefit (within the meaning of Section 4976(b) of the Code) that
would result in the imposition of a tax under Section 4976(a) of the Code, (iii)
any Benefit Plan that is a group health plan (within the meaning of Section
4980B(g)(2) of the Code) complies, and in each and every case has complied, with
all of the applicable material requirements of Section 4980B of the Code, ERISA,
Title XXII of the Public Health Service Act and the Social Security Act, and
(iv) all Welfare Plans may be amended or terminated at any time on or after the
Closing Date.
(g) Neither the Company nor any of its Subsidiaries has any
obligations for retiree health and life benefits under any Benefit Plan, other
than coverage as may be required under Section 4980B of the Code or Part 6 of
Title I of ERISA, or under the continuation of coverage provisions of the laws
of any state or locality. The Company or any of its Subsidiaries may amend or
terminate any such Benefit Plan at any time without incurring any liability
thereunder.
(h) None of the execution of this Agreement, shareholder approval of
this Agreement or consummation of the transactions contemplated by this
Agreement will (A) entitle any employees of the Company or any of its
Subsidiaries to severance pay or any increase in
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severance pay upon any termination of employment after the date hereof, (B)
accelerate the time of payment or vesting or trigger any payment or funding
(through a grantor trust or otherwise) of compensation or benefits under,
increase the amount payable or trigger any other material obligation pursuant
to, any of the Benefit Plans, (C) result in any breach or violation of, or a
default under, any of the Benefit Plans or (D) result in any payment that would
be a "parachute payment" to a "disqualified individual" as those terms are
defined in Section 280G of the Code, without regard to whether such payment is
reasonable compensation for personal services performed or to be performed in
the future.
5.15. LABOR MATTERS. Neither the Company nor any of its Subsidiaries is a
party to or is bound by any collective bargaining agreement, contract or other
agreement or understanding with a labor union or labor organization, nor is the
Company or any of its Subsidiaries the subject of a proceeding asserting that it
has committed an unfair labor practice (within the meaning of the National Labor
Relations Act) or seeking to compel the Company or any of its Subsidiaries to
bargain with any labor organization as to wages or conditions of employment, nor
is there any strike or other labor dispute involving it or any of its
Subsidiaries pending or, to the Company's knowledge, threatened, nor is the
Company or any of its Subsidiaries aware of any activity involving its employees
seeking to certify a collective bargaining unit or engaging in other
organizational activity.
5.16. ENVIRONMENTAL MATTERS.
(a) The Company and its Subsidiaries are in compliance with
applicable Environmental Laws;
(b) to the Company's knowledge, no real property (including
buildings or other structures) currently or formerly owned or operated by the
Company or any of its Subsidiaries, or any property in which the Company or any
of its Subsidiaries has held a security interest, Lien or a fiduciary or
management role ("COMPANY LOAN PROPERTY"), has been contaminated with, or has
had any release of, any Hazardous Substance except in compliance with
Environmental Laws;
(c) neither the Company nor any of its Subsidiaries has participated
in the management regarding Hazardous Substances of, any Company Loan Property
which has been contaminated with, or has had any release of, any Hazardous
Substance except in compliance with Environmental Laws;
(d) neither the Company nor any of its Subsidiaries has any
liability for any Hazardous Substance disposal or contamination on any third
party property;
(e) neither the Company nor any of its Subsidiaries has received any
notice, demand letter, claim or request for information alleging any violation
of, or liability under, any Environmental Law;
(f) neither the Company nor any of its Subsidiaries is subject to
any order, decree, injunction or other agreement with any Governmental Authority
or any third party relating to any Environmental Law;
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(g) to the Company's knowledge, there are no circumstances or
conditions (including the presence of asbestos, underground storage tanks, lead
products, polychlorinated biphenyls, prior manufacturing operations,
dry-cleaning, or automotive services) involving the Company or any of its
Subsidiaries, any currently or formerly owned or operated property, or any
Company Loan Property, that could reasonably be expected to result in any
claims, liability or investigations against the Company or any of its
Subsidiaries, result in any restrictions on the ownership, use, or transfer of
any property pursuant to any Environmental Law, or adversely affect the value of
any Company Loan Property; and
(h) the Company has delivered or made available to Parent copies of
all environmental reports, studies, sampling data, correspondence, filings and
other environmental information in its possession or reasonably available to it
relating to the Company, its Subsidiaries and any currently or formerly owned or
operated property or any Company Loan Property.
As used herein, the term "ENVIRONMENTAL LAWS" means any federal, state or
local law, regulation, order, decree, permit, authorization, opinion or agency
requirement relating to: (A) the protection or restoration of the environment,
health, safety, or natural resources, (B) the handling, use, presence, disposal,
release or threatened release of any Hazardous Substance or (C) wetlands, indoor
air, pollution, contamination or any injury or threat of injury to Persons or
property in connection with any Hazardous Substance; and the term "HAZARDOUS
SUBSTANCE" means any substance that is: (A) listed, classified or regulated
pursuant to any Environmental Law, (B) any petroleum product or by-product,
asbestos-containing material, lead-containing paint or plumbing, polychlorinated
biphenyls, radioactive materials or radon or (C) any other substance which is
the subject of regulatory action by any Governmental Authority in connection
with any Environmental Law.
5.17. TAX MATTERS.
(a) For the taxable periods ended March 31, 2002, 2001 and 2000,
each of the Company and its Subsidiaries has filed all Tax Returns that it was
required to file under applicable laws and regulations. All such Tax Returns
were correct and complete in all material respects and have been prepared in
substantial compliance with all applicable laws and regulations. All Taxes due
and owing by any of the Company and its Subsidiaries (whether or not shown on
any Tax Return) have been paid. Neither the Company nor any of its Subsidiaries
currently is the beneficiary of any extension of time within which to file any
Tax Return. No claim has ever been made by an authority in a jurisdiction where
any of the Company and its Subsidiaries does not file Tax Returns that it is or
may be subject to taxation by that jurisdiction. There are no Liens for Taxes
(other than Taxes not yet due and payable) upon any of the assets of the Company
or any of its Subsidiaries.
(b) Each of the Company and its Subsidiaries has withheld and paid
all Taxes required to have been withheld and paid in connection with any amounts
paid or owing to any employee, independent contractor, creditor, stockholder, or
other third party.
(c) No foreign, federal, state, or local tax audits or
administrative or judicial Tax proceedings are pending or being conducted with
respect to the Company or any of its Subsidiaries. Neither the Company nor any
of its Subsidiaries has received from any foreign,
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federal, state, or local taxing authority (including jurisdictions where the
Company or its Subsidiaries have not filed Tax Returns) any (i) notice
indicating an intent to open an audit or other review, (ii) request for
information related to Tax matters, or (iii) notice of deficiency or proposed
adjustment for any amount of Tax proposed, asserted, or assessed by any taxing
authority against the Company or any of its Subsidiaries.
(d) The Company has Previously Disclosed the United States federal,
state, local, and foreign income Tax Returns filed with respect to any of the
Company and its Subsidiaries for taxable periods ended March 31, 2002 and 2001.
The Company has Previously Disclosed those Tax Returns that have been audited,
and those Tax Returns that currently are the subject of an audit. The Company
has delivered to Parent correct and complete copies of all United States federal
income Tax Returns, examination reports, and statements of deficiencies assessed
against or agreed to by any of the Company and its Subsidiaries filed for the
years ended March 31, 2002 and 2001.
(e) Neither the Company nor any of its Subsidiaries has waived any
statute of limitations in respect of Taxes or agreed to any extension of time
with respect to a Tax assessment or deficiency.
(f) Neither the Company nor any of its Subsidiaries has filed a
consent under Code Section 341(f) concerning collapsible corporations. Neither
the Company nor any of its Subsidiaries is a party to any agreement, contract,
arrangement or plan that has resulted or would result, separately or in the
aggregate, in the payment of (i) any "excess parachute payment" within the
meaning of Code Section 280G (or any corresponding provision of state, local or
foreign Tax law) or (ii) any amount that will not be fully deductible as a
result of Code Section 162(m) (or any corresponding provision of state, local or
foreign Tax law). Neither the Company nor any of its Subsidiaries has been a
United States real property holding corporation within the meaning of Code
Section 897(c)(2) during the applicable period specified in Code Section
897(c)(1)(A)(ii). Each of the Company and its Subsidiaries has disclosed on its
federal income Tax Returns all positions taken therein that could give rise to a
substantial understatement of federal income Tax within the meaning of Code
Section 6662. Neither the Company nor any of its Subsidiaries is a party to or
bound by any Tax allocation or sharing agreement. Neither the Company nor any of
its Subsidiaries (A) has been a member of an Affiliated Group filing a
consolidated federal income Tax Return (other than a group the common parent of
which was the Company) or (B) has any Liability for the Taxes of any Person
(other than any of the Company and its Subsidiaries) under Reg. Section 1.1502-6
(or any similar provision of state, local, or foreign law), as a transferee or
successor, by contract, or otherwise.
(g) The unpaid Taxes of the Company and its Subsidiaries (A) did
not, as of the end of the most recent period covered by the Company's SEC
Documents filed on or prior to the date hereof, exceed the reserve for Tax
Liability (rather than any reserve for deferred Taxes established to reflect
timing differences between book and Tax income) set forth on the face of the
financial statements included in the Company's SEC Documents filed on or prior
to the date hereof (rather than in any notes thereto) and (B) do not exceed that
reserve as adjusted for the passage of time through the Closing Date in
accordance with the past custom and practice of the Company and its Subsidiaries
in filing their Tax Returns. Since the end of the most recent period covered by
the Company's SEC Documents filed prior to the date hereof, neither the Company
nor any of its Subsidiaries has incurred any liability for Taxes arising from
extraordinary gains or
- 31 -
losses, as that term is used in GAAP, outside the ordinary course of business
consistent with past custom and practice.
(h) None of the Company and its Subsidiaries will be required to
include any item of income in, or exclude any item of deduction from, taxable
income for any taxable period (or portion thereof) ending after the Closing Date
as a result of any: (A) change in method of accounting for a taxable period
ending on or prior to the Closing Date; (B) "closing agreement" as described in
Code Section 7121 (or any corresponding or similar provision of state, local or
foreign income Tax law) executed on or prior to the Closing Date; (C)
intercompany transactions or any excess loss account described in Treasury
Regulations under Code Section 1502 (or any corresponding or similar provision
of state, local or foreign income Tax law); (D) installment sale or open
transaction disposition made on or prior to the Closing Date; or (E) prepaid
amount received on or prior to the Closing Date.
5.18. RISK MANAGEMENT INSTRUMENTS. Neither the Company nor any of its
Subsidiaries is a party or has agreed to enter into an exchange traded or
over-the-counter equity, interest rate, foreign exchange or other swap, forward,
future, option, cap, floor or collar or any other contract that is not included
on the balance sheet and is a derivatives contract (including various
combinations thereof) (each, a "DERIVATIVES CONTRACT") or owns securities that
(i) are referred to generically as "structured notes," "high risk mortgage
derivatives," "capped floating rate notes" or "capped floating rate mortgage
derivatives" or (ii) are likely to have changes in value as a result of interest
or exchange rate changes that significantly exceed normal changes in value
attributable to interest or exchange rate changes, except for those Derivatives
Contracts and other instruments legally purchased or entered into in the
ordinary course of business, consistent with safe and sound banking practices
and regulatory guidance. All of such Derivatives Contracts or other instruments,
are legal, valid and binding obligations of the Company or any of its
Subsidiaries enforceable in accordance with their terms (except as enforcement
may be limited by general principles of equity whether applied in a court of law
or a court of equity and by bankruptcy, insolvency and similar laws affecting
creditors' rights and remedies generally), and are in full force and effect. The
Company and its Subsidiaries have duly performed in all material respects all of
their material obligations thereunder to the extent that such obligations to
perform have accrued; and, to the Company's knowledge, there are no breaches,
violations or defaults or allegations or assertions of such by any party
thereunder which would have or would reasonably be expected to have a Material
Adverse Effect on the Company.
5.19. LOANS; NONPERFORMING AND CLASSIFIED ASSETS.
(a) Each loan agreement, note or borrowing arrangement, including
without limitation portions of outstanding lines of credit and loan commitments
(collectively, "LOANS"), on the books and records of the Company and its
Subsidiaries, was made and has been serviced in all material respects in
accordance with customary lending standards in the ordinary course of business,
is evidenced in all material respects by appropriate and sufficient
documentation and, to the knowledge of the Company, constitutes the legal, valid
and binding obligation of the obligor named therein, subject to bankruptcy,
insolvency, reorganization, moratorium, fraudulent transfer and similar laws of
general applicability relating to or affecting creditor's rights or by general
equity principles.
(b) The Company has Previously Disclosed as to the Company and each
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Company Subsidiary as of the latest practicable date: (i) any written or, to the
Company's knowledge, oral Loan under the terms of which the obligor is 60 or
more days delinquent in payment of principal or interest, or to the Company's
knowledge, in default of any other material provision thereof; (ii) each Loan
which has been classified as "substandard," "doubtful," "loss" or "special
mention" (or words of similar import) by the Company, a Company Subsidiary or an
applicable regulatory authority (it being understood that no representation is
being made that OTS would agree with the loan classifications established by the
Company); (iii) a listing of the OREO acquired by foreclosure or by deed-in-lieu
thereof, including the book value thereof; and (iv) each Loan with any director,
executive officer or five percent or greater shareholder of the Company or a
Company Subsidiary, or to the best knowledge of the Company, any Person
controlling, controlled by or under common control with any of the foregoing.
(c) No agreement pursuant to which any loans or other assets have
been or shall be sold by the Company or its Subsidiaries entitled the buyer of
such loans or other assets, unless there is material breach of a representation
or covenant by the Company or its Subsidiaries, to cause the Company or its
Subsidiaries to repurchase such loan or other asset or the buyer to pursue any
other form of recourse against the Company or its Subsidiaries.
5.20. BANK OWNED LIFE INSURANCE. The Company has Previously Disclosed a
true, correct and complete description of all Bank Owned Life Insurance ("BOLI")
owned by the Company or its Subsidiaries. The value of such BOLI as of the date
hereof is fairly and accurately reflected on the Company's balance sheet
contained in the Company's Quarterly Report on Form 10-Q for the quarter ended
September 30, 2002 in accordance with GAAP.
5.21. PROPERTIES. All real and material personal property owned by the
Company or a Subsidiary of the Company or presently used by any of them in its
respective business is in an adequate condition (ordinary wear and tear
excepted) and is sufficient to carry on its business in the ordinary course of
business consistent with its past practices. The Company has good and marketable
title free and clear of all Liens to all of the material properties and assets,
real and personal, reflected on the consolidated statement of financial
condition of the Company as of March 31, 2002 included in the Company's SEC
Documents or acquired after such date, other than properties sold by the Company
in the ordinary course of business, except (i) Liens for current taxes and
assessments not yet due or payable (ii) pledges to secure deposits and other
Liens incurred in the ordinary course of its banking business, (iii) such
imperfections of title, easements and encumbrances, if any, as are not material
in character, amount or extent and (iv) as reflected on the consolidated
statement of financial condition of the Company as of March 31, 2002 included in
the Company's SEC Documents. All real and personal property which is material to
the Company's business on a consolidated basis and leased or licensed by the
Company or a Subsidiary of the Company is held pursuant to leases or licenses
which are valid and enforceable in accordance with their respective terms and
such leases will not terminate or lapse prior to the Effective Time.
5.22. INTELLECTUAL PROPERTY. The Company and each Subsidiary of the Company
owns or possesses valid and binding licenses and other rights to use without
payment of any material amount all material patents, copyrights, trade secrets,
trade names, service marks and trademarks used in its businesses, all of which
have been Previously Disclosed by the Company, and none of the Company or any of
its Subsidiaries has received any notice of conflict with respect thereto that
asserts the right of others. The Company and each Subsidiary has performed in
all material
- 33 -
respects all the obligations required to be performed by it and is not in
default under any contract, agreement, arrangement or commitment relating to any
of the foregoing.
5.23. FIDUCIARY ACCOUNTS. The Company and each of its Subsidiaries has
properly administered all accounts for which it acts as a fiduciary, including
but not limited to accounts for which it serves as a trustee, agent, custodian,
personal representative, guardian, conservator or investment advisor, in
accordance with the terms of the governing documents and applicable laws and
regulations. Neither the Company nor any of its Subsidiaries, nor any of their
respective directors, officers or employees, has committed any breach of trust
with respect to any fiduciary account and the records for each such fiduciary
account are true and correct and accurately reflect the assets of such fiduciary
account.
5.24. BOOKS AND RECORDS. The books and records of the Company and its
Subsidiaries are being maintained in material compliance with applicable legal
and accounting requirements, and such books and records accurately reflect in
all material respects all dealings and transactions in respect of the business,
assets, liabilities and affairs of the Company and its Subsidiaries.
5.25. INSURANCE. The Company has Previously Disclosed all of the material
insurance policies, binders, or bonds currently maintained by the Company or any
of its Subsidiaries ("INSURANCE POLICIES"). The Company and its Subsidiaries are
insured with reputable insurers against such risks and in such amounts as the
management of the Company reasonably has determined to be prudent in accordance
with industry practices. All the Insurance Policies are in full force and
effect; the Company and its Subsidiaries are not in material default thereunder;
and all claims thereunder have been filed in due and timely fashion.
5.26. ALLOWANCE FOR LOAN LOSSES. The Company's allowance for loan losses is
in compliance with the Company's existing methodology for determining the
adequacy of its allowance for loan losses and, to the knowledge of the Company,
the standards established by applicable Governmental Authorities and the
Financial Accounting Standards Board and is adequate under all such standards.
5.27. TRANSACTIONS WITH AFFILIATES. All "covered transactions" between the
Company Bank and an "affiliate" within the meaning of Sections 23A and 23B of
the Federal Reserve Act have been in compliance with such provisions.
5.28. REQUIRED VOTE; ANTITAKEOVER PROVISIONS.
(a) The affirmative vote of the holders of a majority of the
outstanding shares of Company Common Stock is necessary to approve this
Agreement and the Transactions on behalf of the Company.
(b) Based on the representation and warranty of Parent and Merger
Sub contained in Section 6.12, no "control share acquisition," "business
combination moratorium," "fair price" or other form of antitakeover statute or
regulation is applicable to this Agreement and the transactions contemplated
hereby. Without limiting the foregoing, the Board of Directors of the Company
has approved the transactions contemplated by this Agreement and taken all other
requisite action such that the provisions of Section 203 of the DGCL and the
provisions of the
- 34 -
Company Articles relating to special voting requirements for certain business
combinations will not apply to this Agreement or any of the transactions
contemplated hereby.
5.29. FAIRNESS OPINION. The Company Board has received the opinion of
Sandler X'Xxxxx & Partners, L.P., which opinion will be promptly confirmed in
writing, to the effect that as of the date hereof the Merger Consideration is
fair to the holders of Company Common Stock from a financial point of view.
5.30. TRANSACTIONS IN SECURITIES. The Company has questioned its directors
and executive officers concerning known stock transfers since December 31, 1999
and based upon that investigation the Company has not, and to the Company's
knowledge (a) no director or officer of the Company or the Company's
Subsidiaries, (b) no Person related to any such director or officer by blood,
marriage or adoption and residing in the same household and (c) no Person who
has been knowingly provided material nonpublic information by any one or more of
these Persons, has purchased or sold, or caused to be purchased or sold, any
shares of Company Common Stock or other securities issued by the Company (i)
during any period when the Company was in possession of material nonpublic
information or (ii) in violation of any applicable provision of the Exchange
Act.
5.31. DISCLOSURE. The representations and warranties contained in this
Article V, when considered as a whole, do not contain any untrue statement of a
material fact or omit to state any material fact necessary in order to make the
statements and information contained in this Article V not misleading.
ARTICLE VI.
REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB
Except as Previously Disclosed, Parent and Merger Sub hereby represents and
warrants to the Company as follows:
6.01. ORGANIZATION, STANDING AND AUTHORITY. Parent is duly organized,
validly existing and in good standing under the laws of The Commonwealth of
Massachusetts. Merger Sub is duly organized, validly existing and in good
standing under the laws of the State of Delaware. Each of Parent and Merger Sub
is duly qualified to do business and is in good standing in each jurisdiction
where its ownership or leasing of property or assets or the conduct of its
business requires it to be so qualified. Each of Parent and Merger Sub has in
effect all federal, state, local and foreign governmental authorizations
necessary for it to own or lease its properties and assets and to carry on its
business as it is now conducted.
6.02. PARENT STOCK.
(a) The authorized capital stock of Parent consists solely of
100,000,000 shares of Parent Common Stock, of which 23,372,574 shares were
outstanding as of the date hereof, and 10,000,000 shares of Parent Preferred
Stock, of which no shares were outstanding as of the date hereof. The authorized
capital stock of Merger Sub consists of 1,000 shares of Common Stock, $0.01 par
value, 100 of which, as of the date hereof, are issued and outstanding and are
held by Parent. Merger Sub was formed for the purpose of consummating the Merger
and has no material assets or liabilities except as necessary for such purpose.
The outstanding shares of Parent
- 35 -
Common Stock have been duly authorized and validly issued and are fully paid and
non-assessable, and none of the shares of Parent Common Stock have been issued
in violation of the preemptive rights of any Person. As of the date hereof,
there are no Equity Interests authorized, issued or outstanding with respect to
the capital stock of Parent, except for (i) shares of Parent Common Stock
issuable pursuant to the Parent Benefits Plans and any other plan or arrangement
pursuant to which shares of Parent Common Stock may be issued and (ii) by virtue
of this Agreement.
(b) The shares of Parent Common Stock to be issued in exchange for
shares of Company Common Stock in the Merger, when issued in accordance with the
terms of this Agreement, will be duly authorized, validly issued, fully paid and
nonassessable and the issuance thereof is not subject to any preemptive right.
6.03. SUBSIDIARIES.
(a) Each of the Parent Bank and Nantucket Bank has been duly
organized and is validly existing under the laws of The Commonwealth of
Massachusetts and is duly qualified to do business and in good standing in the
jurisdictions where its ownership or leasing of property or the conduct of its
business requires it to be so qualified. Each of the Parent Bank and Nantucket
Bank is duly licensed by the Massachusetts Bank Commissioner and its deposits
are insured by the FDIC and the Deposit Insurance Fund in the manner and to the
maximum extent provided by law.
(b) As of the date hereof, (A) Parent owns, directly or indirectly,
all the issued and outstanding equity securities of the Parent Bank and
Nantucket Bank, (B) no equity securities of the Parent Bank or Nantucket Bank
are or may become required to be issued (other than to Parent) by reason of any
Equity Interest or otherwise, (C) there are no contracts, commitments,
understandings or arrangements by which the Parent Bank or Nantucket Bank is or
may be bound to sell or otherwise transfer any of its equity securities (other
than to Parent or any of its wholly-owned Subsidiaries) and (D) there are no
contracts, commitments, understandings, or arrangements relating to Parent's
rights to vote or to dispose of such securities.
6.04. CORPORATE POWER. Each of Parent, Merger Sub, Parent Bank and
Nantucket Bank has the corporate power and authority to carry on its business as
it is now being conducted and to own all its properties and assets. Each of
Parent and Merger Sub has the corporate power and authority to execute, deliver
and perform its obligations under this Agreement and to consummate the
transactions contemplated hereby, subject to the receipt of all necessary
approvals of Governmental Authorities.
6.05. CORPORATE AUTHORITY. This Agreement and the transactions contemplated
hereby have been authorized by all necessary corporate action of Parent, Merger
Sub and the Parent Board. This Agreement has been duly executed and delivered by
Parent and Merger Sub and, assuming due authorization, execution and delivery by
the Company, this Agreement is a valid and legally binding agreement of Parent
and Merger Sub enforceable in accordance with its terms (except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer and similar laws of general
applicability relating to or affecting creditors' rights or by general equity
principles).
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6.06. REGULATORY APPROVALS; NO DEFAULTS.
(a) No consents or approvals of, or waivers by, or filings or
registrations with, any Governmental Authority or with any third party are
required to be made or obtained by Parent, Merger Sub or any of Parent's
Subsidiaries in connection with the execution, delivery or performance by
Parent, Merger Sub and the Parent Bank of this Agreement and the Bank Merger
Agreement, as applicable, or to consummate the Transactions and the other
transactions contemplated hereby and thereby, except for (A) filings of
applications or notices with and approvals or waivers by the Federal Reserve
Board, the OTS, the FDIC, the Massachusetts Bank Commissioner, the Depositors
Insurance Fund, the Massachusetts Board and the MHPF, as required, (B) filings
with the SEC and state securities authorities in connection with the issuance of
Parent Common Stock in the Merger, (C) the approval of the listing on Nasdaq of
the Parent Common Stock to be issued in the Merger, (D) the filing of a
Certificate of Merger with the Secretary of State of the State of Delaware
pursuant to the DGCL, and (E) such corporate approvals and such consents or
approvals of, or waivers by, or filings or registrations with, certain of the
foregoing federal and state banking agencies in connection with the Bank Merger.
As of the date hereof, neither Parent nor Merger Sub is aware of any reason why
the approvals set forth above and referred to in Section 8.01(b) will not be
received in a timely manner and without the imposition of a condition,
restriction or requirement of the type described in Section 8.01(b).
(b) Subject to receipt, or the making, of the consents, approvals
and filings referred to in Section 6.06(a) and expiration of the related waiting
periods, the execution, delivery and performance of this Agreement and the Bank
Merger Agreement by Parent, Merger Sub and the Parent Bank, as applicable, and
the consummation of the Transactions and the other transactions contemplated
hereby and thereby do not and will not (A) constitute a breach or violation of,
or a default under, or give rise to any Lien, any acceleration of remedies or
any right of termination under, any law, rule or regulation or any judgment,
decree, order, governmental permit or license, or agreement, indenture or
instrument of Parent, Merger Sub or of any of Parent's Subsidiaries or to which
Parent, Merger Sub or any of such Subsidiaries or properties is subject or
bound, (B) constitute a breach or violation of, or a default under, the articles
of incorporation or bylaws (or similar governing documents) of Parent, Merger
Sub or any of Parent's Subsidiaries or (C) require any consent or approval under
any such law, rule, regulation, judgment, decree, order, governmental permit or
license, agreement, indenture or instrument.
6.07. FINANCIAL REPORTS AND SEC DOCUMENTS; MATERIAL ADVERSE EFFECT.
(a) Parent's Annual Reports on Form 10-K for the fiscal years ended
December 31, 2001, December 31, 2000 and December 31, 1999 and all other
reports, registration statements, definitive proxy statements or information
statements filed or to be filed by it subsequent to December 31, 1998 with the
SEC (collectively, Parent's "SEC DOCUMENTS"), as of the date filed or to be
filed and as amended prior to the date hereof, (A) complied or will comply in
all material respects as to form with the applicable requirements under the
Securities Act or the Exchange Act, as the case may be, and (B) did not and will
not contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading,
except that information as of a later date shall be deemed to modify information
as of an earlier date; and (C) each of the balance sheets contained in or
incorporated
- 37 -
by reference into any such SEC Document (including the related notes and
schedules thereto) fairly presents, or will fairly present, the consolidated
financial position of Parent and its Subsidiaries as of its date, and (D) each
of the consolidated statements of income and changes in shareholders' equity and
cash flows or equivalent statements in such SEC Documents (including any related
notes and schedules thereto) fairly presents, or will fairly present, the
consolidated results of operations, changes in shareholders' equity and changes
in cash flows, as the case may be, of Parent and its Subsidiaries for the
periods to which they relate, in each case in accordance with GAAP consistently
applied during the periods involved.
(b) Since December 31, 2001, no event has occurred or circumstance
arisen that, individually or taken together with all other facts, circumstances
and events (described in any paragraph of this Article VI or otherwise), is
reasonably likely to have a Material Adverse Effect with respect to Parent.
6.08. LITIGATION. No litigation, claim or other proceeding before any court
or governmental agency is pending against Parent or its Subsidiaries and, to
Parent's knowledge, no such litigation, claim or other proceeding has been
threatened and there are no facts which could reasonably give rise to such
litigation, claim or other proceeding.
6.09. NO BROKERS. No action has been taken by Parent or its Subsidiaries
that would give rise to any valid claim against any party hereto for a brokerage
commission, finder's fee or other like payment with respect to the transactions
contemplated by this Agreement, excluding a fee to be paid to Xxxx, Xxxx & Co.
LLC.
6.10. TAX MATTERS. As of the date hereof, neither Parent nor Merger Sub has
any reason to believe that any conditions exist that might prevent or impede the
Merger from qualifying as a reorganization within the meaning of Section 368(a)
of the Code.
6.11. REGULATORY MATTERS.
(a) Neither Parent, Merger Sub nor any of Parent's Subsidiaries nor
any of any of their respective properties is a party to or is subject to any
order, decree, agreement, memorandum of understanding or similar arrangement
with, or a commitment letter or similar submission to, or extraordinary
supervisory letter from, any federal or state governmental agency or authority
charged with the supervision or regulation of financial institutions or issuers
of securities or engaged in the insurance of deposits or the supervision or
regulation of it (collectively, the "PARENT REGULATORY AUTHORITIES"). Parent,
Merger Sub and Parent's Subsidiaries have paid all assessments made or imposed
by any Parent Regulatory Authority.
(b) Neither Parent, Merger Sub nor any of Parent's Subsidiaries has
been advised by, and does not have any knowledge of facts which could give rise
to an advisory notice by, any Parent Regulatory Authority that such Parent
Regulatory Authority is contemplating issuing or requesting (or is considering
the appropriateness of issuing or requesting) any such order, decree, agreement,
memorandum of understanding, commitment letter, supervisory letter or similar
submission.
6.12. OWNERSHIP OF COMPANY COMMON STOCK. None of Parent, Merger Sub or any
of Parent's Subsidiaries, or to Parent's knowledge, any of its other affiliates
or associates (as such
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terms are defined under the Exchange Act), owns beneficially or of record,
directly or indirectly, or is a party to any agreement, arrangement or
understanding for the purpose of acquiring, holding, voting or disposing of,
shares of Company Common Stock (other than shares held in a fiduciary capacity
that are beneficially owned by third parties or as a result of debts previously
contracted) which in the aggregate represent 5% or more of the outstanding
Company Common Stock.
6.13. FINANCIAL ABILITY. Parent or Parent Bank will have available to it
sources of capital and financing sufficient to fulfill its cash obligations
hereunder to pay the Aggregate Cash Consideration to holders of Company Common
Stock pursuant to Section 3.01(d) hereof. Each of Parent and Parent Bank is, and
immediately following completion of the Transactions will be, in compliance with
all capital requirements applicable to it.
6.14. COMPLIANCE WITH LAWS. Each of Parent and its Subsidiaries:
(a) is in material compliance with all applicable federal, state,
local and foreign statutes, laws, regulations, ordinances, rules, judgments,
orders or decrees applicable thereto or to the employees conducting such
businesses, including, without limitation, the Equal Credit Opportunity Act, the
Fair Housing Act, the Community Reinvestment Act, the Home Mortgage Disclosure
Act and all other applicable fair lending laws and other laws relating to
discriminatory business practices;
(b) has all permits, licenses, authorizations, orders and approvals
of, and has made all filings, applications and registrations with, all
Governmental Authorities that are required in order to permit them to own or
lease their properties and to conduct their businesses as presently conducted;
all such permits, licenses, certificates of authority, orders and approvals are
in full force and effect and, to Parent's knowledge, no suspension or
cancellation of any of them is threatened; and
(c) has received, since December 31, 1999, no notification or
communication from any Governmental Authority (A) asserting that Parent or any
of its Subsidiaries is not in material compliance with any of the statutes,
regulations or ordinances which such Governmental Authority enforces or (B)
threatening to revoke any license, franchise, permit or governmental
authorization (nor, to Parent's knowledge, do any grounds for any of the
foregoing exist).
6.15. BOOKS AND RECORDS. The books and records of the Company and its
Subsidiaries are being maintained in material compliance with applicable legal
and accounting requirements, and such books and records accurately reflect in
all material respects all dealings and transactions in respect of the business,
assets, liabilities and affairs of the Company and its Subsidiaries.
6.16. ALLOWANCE FOR LOAN LOSSES. The Company's allowance for loan losses is
in compliance with the Company's existing methodology for determining the
adequacy of its allowance for loan losses and, to the knowledge of the Company,
the standards established by applicable Governmental Authorities and the
Financial Accounting Standards Board and is adequate under all such standards.
6.17. ENVIRONMENTAL MATTERS.
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(a) Parent and its Subsidiaries are in compliance with applicable
Environmental Laws;
(b) to Parent's knowledge, no real property (including buildings or
other structures) currently or formerly owned or operated by Parent or any of
its Subsidiaries, or any property in which Parent or any of its Subsidiaries has
held a security interest, Lien or a fiduciary or management role ("Parent Loan
Property"), has been contaminated with, or has had any release of, any Hazardous
Substance except in compliance with Environmental Laws;
(c) neither Parent nor any of its Subsidiaries has participated in
the management regarding Hazardous Substances of, any Parent Loan Property which
has been contaminated with, or has had any release of, any Hazardous Substance
except in compliance with Environmental Laws;
(d) neither Parent nor any of its Subsidiaries has any liability for
any Hazardous Substance disposal or contamination on any third party property;
(e) neither Parent nor any of its Subsidiaries has received any
notice, demand letter, claim or request for information alleging any violation
of, or liability under, any Environmental Law;
(f) neither Parent nor any of its Subsidiaries is subject to any
order, decree, injunction or other agreement with any Governmental Authority or
any third party relating to any Environmental Law;
(g) to Parent's knowledge, there are no circumstances or conditions
(including the presence of asbestos, underground storage tanks, lead products,
polychlorinated biphenyls, prior manufacturing operations, dry-cleaning, or
automotive services) involving Parent or any of its Subsidiaries, any currently
or formerly owned or operated property, or any Parent Loan Property, that could
reasonably be expected to result in any claims, liability or investigations
against Parent or any of its Subsidiaries, result in any restrictions on the
ownership, use, or transfer of any property pursuant to any Environmental Law,
or adversely affect the value of any Parent Loan Property; and
(h) Parent has delivered or made available to Parent copies of all
environmental reports, studies, sampling data, correspondence, filings and other
environmental information in its possession or reasonably available to it
relating to Parent, its Subsidiaries and any currently or formerly owned or
operated property or any Parent Loan Property.
6.18. DISCLOSURE. The representations and warranties contained in this
Article VI, when considered as a whole, do not contain any untrue statement of a
material fact or omit to state any material fact necessary in order to make the
statements and information contained in this Article VI not misleading.
ARTICLE VII.
COVENANTS
7.01. REASONABLE BEST EFFORTS. Subject to the terms and conditions of this
Agreement,
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each of the Company, Merger Sub and Parent agrees to use its reasonable best
efforts in good faith to take, or cause to be taken, all actions, and to do, or
cause to be done, all things necessary, proper or desirable, or advisable under
applicable laws, so as to permit consummation of the Transactions as promptly as
practicable and otherwise to enable consummation of the Transactions, including
the satisfaction of the conditions set forth in Article VIII hereof, and shall
cooperate fully with the other party hereto to that end.
7.02. SHAREHOLDER APPROVAL. The Company agrees to take, in accordance with
applicable law and the Company Certificate and Company Bylaws, all action
necessary to call, give notice of, convene, and hold as soon as reasonably
practicable a meeting of its stockholders to consider and vote upon the approval
of this Agreement and any other matters required to be approved by the Company's
stockholders for consummation of the Transactions (including any adjournment or
postponement, the "COMPANY MEETING"). Except with the prior approval of Parent,
no other matters shall be submitted for the approval of the Company stockholders
at the Company Meeting. The Company Board shall at all times prior to and during
such meeting recommend such approval and shall take all reasonable lawful action
to solicit such approval by its stockholders; provided that nothing in this
Agreement shall prevent the Company Board from withholding, withdrawing,
amending or modifying its recommendation if the Company Board determines, after
consultation with its outside counsel, that such action is legally required in
order for the directors to comply with their fiduciary duties to the Company
stockholders under applicable law; provided, further, that Section 7.08 shall
govern the withholding, withdrawing, amending or modifying of such
recommendation in the circumstances described therein. Nothing contained in
Section 7.08 shall affect or otherwise limit the obligation of the Company to
call, give notice of, convene, and hold the Company Meeting. Parent, as the sole
stockholder of Merger Sub, has approved this Agreement and any other matters
required to be approved by Merger Sub's stockholders for consummation of the
Transactions.
7.03. REGISTRATION STATEMENT.
(a) Parent agrees to prepare a registration statement on Form S-4 or
other applicable form (the "REGISTRATION STATEMENT") to be filed by Parent with
the SEC in connection with the issuance of Parent Common Stock in the Merger
(including the proxy statement and prospectus and other proxy solicitation
materials of the Company constituting a part thereof (the "PROXY STATEMENT") and
all related documents). The Company shall prepare and furnish such information
relating to it and its directors, officers and stockholders as may be reasonably
required in connection with the above referenced documents based on its
knowledge of and access to the information required for said documents, and the
Company, and its legal, financial and accounting advisors, shall have the right
to review in advance such Registration Statement prior to its filing. The
Company agrees to cooperate with Parent and Parent's counsel and accountants in
requesting and obtaining appropriate opinions, consents and letters from its
financial advisor and independent auditor in connection with the Registration
Statement and the Proxy Statement. Provided that the Company has cooperated as
described above, Parent agrees to file, or cause to be filed, the Registration
Statement and the Proxy Statement with the SEC as promptly as reasonably
practicable. Each of the Company and Parent agrees to use its reasonable best
efforts to cause the Registration Statement to be declared effective under the
Securities Act as promptly as reasonably practicable after the filing thereof.
Parent also agrees to use its reasonable best efforts to obtain all necessary
state securities law or "Blue Sky" permits
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and approvals required to carry out the transactions contemplated by this
Agreement. After the Registration Statement is declared effective under the
Securities Act, the Company shall promptly mail at its expense the Proxy
Statement to its stockholders.
(b) Each of the Company and Parent agrees that none of the
information supplied or to be supplied by it for inclusion or incorporation by
reference in (i) the Registration Statement shall, at the time the Registration
Statement and each amendment or supplement thereto, if any, becomes effective
under the Securities Act, contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary to
make the statements therein not misleading and (ii) the Proxy Statement and any
amendment or supplement thereto shall, at the date(s) of mailing to stockholders
and at the time of the Company Meeting, contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein not misleading. Each of the Company
and Parent further agrees that if such party shall become aware prior to the
Effective Date of any information furnished by such party that would cause any
of the statements in the Registration Statement or the Proxy Statement to be
false or misleading with respect to any material fact, or to omit to state any
material fact necessary to make the statements therein not false or misleading,
to promptly inform the other parties thereof and to take the necessary steps to
correct the Registration Statement or the Proxy Statement.
(c) Parent agrees to advise the Company, promptly after Parent
receives notice thereof, of the time when the Registration Statement has become
effective or any supplement or amendment has been filed, of the issuance of any
stop order or the suspension of the qualification of Parent Common Stock for
offering or sale in any jurisdiction, of the initiation or, to the extent Parent
is aware thereof, threat of any proceeding for any such purpose, or of any
request by the SEC for the amendment or supplement of the Registration Statement
or for additional information.
7.04. REGULATORY FILINGS.
(a) Each of Parent and the Company and their respective Subsidiaries
shall cooperate and use their respective reasonable best efforts to prepare all
documentation, to effect all filings and to obtain all permits, consents,
approvals and authorizations of all third parties and Governmental Authorities
necessary to consummate the Transactions and any other transactions contemplated
by this Agreement and the Bank Merger Agreement; and any initial filings with
Governmental Authorities (other than the Proxy Statement) shall be made by
Parent as soon as reasonably practicable after the execution hereof. Each of
Parent and the Company shall have a reasonable time to review such filings in
advance, and to the extent practicable each shall consult with the other, in
each case subject to applicable laws relating to the exchange of information,
with respect to all written information submitted to any third party or any
Governmental Authority in connection with the transactions contemplated by this
Agreement. In exercising the foregoing right, each of such parties agrees to act
reasonably and as promptly as practicable. Each party hereto agrees that it
shall consult with the other parties hereto with respect to the obtaining of all
permits, consents, approvals and authorizations of all third parties and
Governmental Authorities necessary or advisable to consummate the transactions
contemplated by this Agreement and the Bank Merger Agreement, and each party
shall keep the other parties apprised of the status of material matters relating
to completion of the transactions contemplated hereby.
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(b) Each party agrees, upon request, to furnish the other parties
with all information concerning itself, its Subsidiaries, directors, officers
and stockholders and such other matters as may be reasonably necessary or
advisable in connection with any filing, notice or application made by or on
behalf of such other parties or any of their respective Subsidiaries to any
third party or Governmental Authority.
7.05. PRESS RELEASES. The Company and Parent shall consult with each other
before issuing any press release with respect to the Transactions or this
Agreement and shall not issue any such press release or make any such public
statements without the prior consent of the other party, which shall not be
unreasonably withheld; provided, however, that a party may, without the prior
consent of the other party (but after such consultation, to the extent
practicable in the circumstances), issue such press release or make such public
statements as may upon the advice of outside counsel be required by law or the
rules or regulations of Nasdaq or other regulatory authority. The Company and
Parent shall cooperate to develop all public announcement materials and make
appropriate management available at presentations related to the Transactions as
reasonably requested by the other party.
7.06. ACCESS; INFORMATION.
(a) The Company agrees that upon reasonable notice and subject to
applicable laws relating to the exchange of information, it shall afford Parent
and Parent's officers, employees, counsel, accountants and other authorized
representatives such access during normal business hours throughout the period
prior to the Effective Time to the books, records (including, without
limitation, Tax Returns and work papers of independent auditors), properties and
personnel and to such other information as Parent may reasonably request and,
during such period, it shall furnish promptly to Parent all information
concerning its business, properties and personnel as Parent may reasonably
request. Representatives of the Company's senior management will meet
periodically with representatives of Parent to coordinate post-closing
integration planning, including working toward conforming the Company's and
Parent's asset/liability management policies and practices.
(b) Parent agrees that upon reasonable notice and subject to
applicable laws relating to the exchange of information, it shall afford the
Company and its authorized representatives such access to Parent's personnel as
the Company may reasonably request and to such information relating to Parent as
the Company may reasonably request.
(c) Each party agrees that it will not, and will cause its
representatives not to, use any information obtained pursuant to this Section
7.06 (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 shall keep confidential, and shall cause
its representatives to keep confidential, all information and documents obtained
pursuant to this Section 7.06 (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 publicly available sources. In the event that this
Agreement is terminated or the transactions contemplated by this
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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 any party of the business and affairs of any other
party shall affect or be deemed to modify or waive any representation, warranty,
covenant or agreement in this Agreement, or the conditions to any party's
obligation to consummate the transactions contemplated by this Agreement.
7.07. AFFILIATES. The Company shall use its reasonable best efforts to
identify those Persons who may be deemed to be "affiliates" of the Company
within the meaning of Rule 145 promulgated by the SEC under the Securities Act
(the "COMPANY AFFILIATES") and to cause each Person so identified to deliver to
Parent as soon as practicable, and in any event prior to the date of the Company
Meeting, a written agreement ("AFFILIATE AGREEMENT") to comply with the
requirements of Rule 145 under the Securities Act in connection with the sale or
other transfer of Parent Common Stock received in the Merger, which agreement
shall be in a form reasonably satisfactory to the Company.
7.08. ACQUISITION PROPOSALS. The Company agrees that neither it nor any of
its Subsidiaries nor any of their respective officers shall, and that it shall
direct and use its reasonable best efforts to cause its and each such
Subsidiary's directors, employees, agents and representatives not to, directly
or indirectly, initiate, solicit, encourage or otherwise facilitate any
inquiries or the making of any Acquisition Proposal. The Company further agrees
that neither the Company nor any of its Subsidiaries nor any of their respective
officers shall, and that it shall direct and use its reasonable best efforts to
cause its and each such Subsidiary's directors employees, agents and
representatives not to, directly or indirectly, engage in any negotiations
concerning, or provide any confidential information or data to, or have any
discussions with, any Person relating to an Acquisition Proposal; provided,
however, that nothing contained in this Agreement shall prevent the Company or
the Company Board from (A) complying with its disclosure obligations under
federal or state law; (B) providing information in response to a request
therefor by a Person who has made an unsolicited bona fide written Acquisition
Proposal if the Company Board receives from the Person so requesting such
information an executed confidentiality agreement no less favorable to it than
the Confidentiality Agreement entered into on November 26, 2002 by Parent and
the Company; (C) engaging in any negotiations or discussions with any Person who
has made an unsolicited bona fide written Acquisition Proposal or (D)
recommending such an Acquisition Proposal to the stockholders of the Company, if
and only to the extent that, (i) in each such case referred to in clause (B),
(C) or (D) above, the Company Board determines in good faith (after consultation
with outside legal counsel) that such action is reasonably likely to be required
in order for its directors to comply with their respective fiduciary duties
under applicable law and (ii) in the case referred to in clause (D) above, the
Company Board determines in good faith (after consultation with its financial
advisor) that such Acquisition Proposal, if accepted, is reasonably likely to be
consummated, taking into account all legal, financial and regulatory aspects of
the proposal and the Person making the proposal and, if consummated, is
reasonably likely to result in a transaction more favorable to the Company's
stockholders from a financial point of view than the Merger. The Company agrees
that it will immediately cease and cause to be terminated any existing
activities, discussions or negotiations with any parties conducted heretofore
with respect to any Acquisition Proposals. The Company agrees that it will
notify Parent immediately if any such inquiries, proposals or offers are
received by, any such information is requested from, or any such discussions or
negotiations are
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sought to be initiated or continued with, any of its representatives. The
Company will promptly (within one business day) advise Parent following receipt
of any Acquisition Proposal and the substance thereof (including the identity of
the Person making such Acquisition Proposal), and will keep Parent apprised of
any related developments, discussions and negotiations (including the terms and
conditions of the Acquisition Proposal) on a current basis. The Company will use
its reasonable best efforts to enforce (and will not waive any provisions of)
any confidentiality or similar agreement entered into by it or on its behalf by
Sandler X'Xxxxx & Partners, L.P. or otherwise relating to a potential
Acquisition Proposal. Notwithstanding the requirements of the previous sentence,
the Company may waive standstill provisions of such an agreement with respect to
a particular Acquisition Proposal if (i) the Company Board determines in good
faith (after consultation with outside legal counsel) that such action would be
required in order for its directors to comply with their respective fiduciary
duties under applicable law and (ii) the Company Board also determines in good
faith (after consultation with its financial advisor) that such Acquisition
Proposal, if accepted, is reasonably likely to be consummated, taking into
account all legal, financial and regulatory aspects of the proposal and the
Person making the proposal and would, if consummated, result in a transaction
more favorable to the Company's stockholders from a financial point of view than
the Merger.
7.09. CERTAIN POLICIES. Prior to the Effective Date, each of the Company
and its Subsidiaries shall, consistent with GAAP, the rules and regulations of
the SEC and applicable banking laws and regulations, modify or change its loan,
OREO, accrual, reserve, tax, litigation and real estate valuation policies and
practices (including loan classifications and levels of reserves) so as to be
applied on a basis that is consistent with that of Parent; provided, however,
that no such modifications or changes need be made prior to the satisfaction of
all of the conditions set forth in Article VIII; and further provided that in
any event, no accrual or reserve made by the Company or any of its Subsidiaries
pursuant to this Section 7.09 shall constitute or be deemed to be a breach,
violation of or failure to satisfy any representation, warranty, covenant,
agreement, condition or other provision of this Agreement or otherwise be
considered in determining whether any such breach, violation or failure to
satisfy shall have occurred. The recording of any such adjustments shall not be
deemed to imply any misstatement of previously furnished financial statements or
information and shall not be construed as concurrence of the Company or its
management with any such adjustments.
7.10. NASDAQ LISTING. Parent agrees to use its reasonable best efforts to
list, prior to the Effective Date, on the Nasdaq the shares of Parent Common
Stock to be issued in connection with the Merger.
7.11. INDEMNIFICATION.
(a) From and after the Effective Time, Parent (the "INDEMNIFYING
PARTY") shall indemnify and hold harmless each present and former director,
officer and employee of the Company or a Company Subsidiary, as applicable,
determined as of the Effective Time (the "INDEMNIFIED PARTIES") against any
costs or expenses (including reasonable attorneys' fees), judgments, fines,
losses, claims, damages or liabilities incurred in connection with any claim,
action, suit, proceeding or investigation, whether civil, criminal,
administrative or investigative, arising out of matters existing or occurring at
or prior to the Effective Time, whether asserted or claimed prior to, at or
after the Effective Time, arising in whole or in part out of, or pertaining to
the fact that he or she was a director, officer, employee, fiduciary or agent of
the Company or
- 45 -
any Company Subsidiary or is or was serving at the request of the Company or any
of the Company Subsidiaries as a director, officer, employee, fiduciary or agent
of another corporation, partnership, joint venture, trust or other enterprise,
including without limitation matters related to the negotiation, execution and
performance of this Agreement or any of the transactions contemplated hereby, to
the fullest extent which such Indemnified Parties would be entitled under the
Company Certificate and Company Bylaws.
(b) Any Indemnified Party wishing to claim indemnification under
this Section 7.11, upon learning of any such claim, action, suit, proceeding or
investigation, shall promptly notify the Indemnifying Party, but the failure to
so notify shall not relieve the Indemnifying Party of any liability it may have
to such Indemnified Party if such failure does not actually prejudice the
Indemnifying Party. In the event of any such claim, action, suit, proceeding or
investigation (whether arising before or after the Effective Time), (i) the
Indemnifying Party shall have the right to assume the defense thereof and the
Indemnifying Party shall not be liable to such Indemnified Parties for any legal
expenses of other counsel or any other expenses subsequently incurred by such
Indemnified Parties in connection with the defense thereof, except that if the
Indemnifying Party elects not to assume such defense or counsel for the
Indemnified Parties advises that there are issues which raise conflicts of
interest between the Indemnifying Party and the Indemnified Parties, the
Indemnified Parties may retain counsel which is reasonably satisfactory to the
Indemnifying Party, and the Indemnifying Party shall pay, promptly as statements
therefor are received, the reasonable fees and expenses of such counsel for the
Indemnified Parties (which may not exceed one firm in any jurisdiction), (ii)
the Indemnified Parties will cooperate in the defense of any such matter, (iii)
the Indemnifying Party shall not be liable for any settlement effected without
its prior written consent and (iv) the Indemnifying Party shall have no
obligation hereunder in the event that a federal or state banking agency or a
court of competent jurisdiction shall determine that indemnification of an
Indemnified Party by the Indemnifying Party in the manner contemplated hereby is
prohibited by applicable laws and regulations; provided, however, that in the
event of such determination, the Indemnified Party may seek indemnification from
Parent Bank, which shall assume the Indemnifying Party's obligation under this
Section 7.11 to the extent that any payment by Parent Bank is not prohibited by
applicable laws or regulations.
(c) Prior the Effective Time, Parent shall use its reasonable best
efforts to purchase an extended reporting period endorsement under the Company's
existing directors' and officers' liability insurance coverage for the Company's
directors and officers in a form reasonably acceptable to the Company which
shall provide such directors and officers with coverage for five years following
the Effective Time of not less than the existing coverage under, and have other
terms no materially less favorable on the whole to the insured Persons than the
directors' and officers' liability insurance coverage presently maintained by
the Company, provided that in no event shall Parent be required to expend in any
one year an amount in excess of 150% of the annual premiums currently paid by
the Company for such insurance (the "INSURANCE AMOUNT"), and further provided
that if Parent is unable to maintain or obtain the insurance called for by this
Section 7.11(c) as a result of the preceding provision, Parent shall use its
reasonable best efforts to obtain as much comparable insurance as is available
for the Insurance Amount with respect to acts or omissions occurring prior to
the Effective Time by such directors and officers in their capacities as such.
- 46 -
(d) If Parent or any of its successors or assigns shall consolidate
with or merge into any other entity and shall not be the continuing or surviving
entity of such consolidation or merger or shall transfer all or substantially
all of its assets to any other entity, then and in each case, proper provision
shall be made so that the successors and assigns of Parent shall assume the
obligations set forth in this Section 7.11.
7.12. BENEFIT PLANS.
(a) As soon as administratively practicable after the Effective
Time, Parent shall take all reasonable action so that employees of the Company
and its Subsidiaries shall be entitled to participate in each employee benefit
plan, program or arrangement of Parent of general applicability (the "PARENT
BENEFITS PLANS") to the same extent as similarly-situated employees of Parent
and its Subsidiaries (it being understood that inclusion of the employees of the
Company and its Subsidiaries in the Parent Benefits Plans may occur at different
times with respect to different plans.) Parent shall cause each Parent Benefits
Plan (other than Parent's employee stock ownership plan) in which employees of
the Company and its Subsidiaries are eligible to participate to recognize, for
purposes of determining eligibility to participate in, the vesting of benefits
and for all other purposes (but not for accrual of benefits) under the Parent
Benefit Plans, the service of such employees with the Company and its
Subsidiaries to the same extent as such service was credited for such purpose by
the Company. Employees of the Company and its Subsidiaries will be given credit
for past service with the Company for purposes of Parent's vacation policy.
Employees of the Company and its Subsidiaries will be treated as newly hired
employees for purposes of Parent's employee stock ownership plan.
(b) Notwithstanding anything to the contrary contained herein,
Parent shall have sole discretion with respect to the determination as to
whether or when to terminate, merge or continue any employee benefit plans and
programs of the Company or any of its Subsidiaries, provided, however, that
Company shall terminate the Company's Employee Stock Ownership Plan as of the
Effective Time, in accordance with the terms of the Plan. To the extent amounts
are distributable under Benefit Plans and constitute "eligible rollover
distributions" (as defined in Section 402(f)(2)(A) of the Code) said amounts may
be rolled over to any tax-qualified Parent Benefit Plan that accepts rollover
distributions or to any eligible individual retirement account.
(c) Except as otherwise expressly provided in this Agreement or in
the Payments Agreements, Parent shall honor, and the Surviving Corporation shall
continue to be obligated to perform, in accordance with their terms, all benefit
obligations to, and contractual rights of, current and former employees of the
Company existing as of the Effective Date, as well as all employment, severance,
deferred compensation or "change-in-control" agreements, plans or policies of
the Company, but only to the extent that such obligations are Previously
Disclosed in Sections 4.01(b)(5) and 5.14(a) of the Company Disclosure Schedule.
Parent acknowledges that the consummation of the Merger will constitute a
"change-in-control" of the Company for purposes of any employee benefit plans,
agreements and arrangements of the Company.
(d) If employees of the Company or any of its Subsidiaries become
eligible to participate in a medical, dental or health plan of Parent, Parent
shall cause each such plan to (i) waive any preexisting condition limitations to
the extent such conditions are covered under the applicable medical, health or
dental plans of Parent and (ii) waive any waiting period limitation or evidence
of insurability requirement which would otherwise be applicable to such
- 47 -
employee on or after the Effective Time to the extent such employee had
satisfied any similar limitation or requirement under an analogous Plan prior to
the Effective Time, and (iii) provide full credit under such plans for any
deductibles, co-payments and out-of-pocket expenses incurred by the employees
and their beneficiaries during the portion of the calendar year prior to such
participation.
(e) Parent will endeavor to retain as many of Company's officers and
employees as reasonably practicable. Notwithstanding the foregoing, Parent or a
Parent Subsidiary shall have no obligation to continue the employment of any
employee of the Company or a Company Subsidiary and nothing contained herein
shall give any such Person the right to continued employment with Parent or a
Parent Subsidiary after the Effective Time. An employee of the Company or a
Company Subsidiary (other than an employee who is party to an employment
agreement, a severance agreement or a special termination agreement) whose
employment is involuntarily terminated other than for cause following the
Effective Time shall be entitled to receive severance payments in accordance
with, and to the extent provided in, the Company's Employee Severance
Compensation Plan Previously Disclosed to Parent.
7.13. BANK MERGER. Parent and the Company agree to take all action
necessary and appropriate, including causing the entering into of an appropriate
merger agreement (the "BANK MERGER AGREEMENT"), to cause the Company Bank to
merge, either directly or indirectly, by use of one or more interim
corporations, with and into the Parent Bank (the "BANK MERGER") in accordance
with applicable laws and regulations and the terms of the Bank Merger Agreement
and as soon as practicable after consummation of the Merger.
7.14. NOTIFICATION OF CERTAIN MATTERS. Each of the Company, Parent and
Merger Sub shall give prompt notice to the other of any fact, event or
circumstance known to it that (i) if it had been known as of the date of this
Agreement, would have been required to have been included in the Company
Disclosure Schedule, (ii) is reasonably likely, individually or taken together
with all other facts, events and circumstances known to it, to result in any
Material Adverse Effect with respect to it, or (iii) would cause or constitute a
material breach of any of its representations, warranties, covenants or
agreements contained herein.
7.15. PAYMENTS AND RELATED AGREEMENTS. Concurrently with the execution of
this Agreement by the Company, Merger Sub and Parent, (i) Parent, the Company
and the Company Bank have entered into a Payments Agreement with each of Xxxx X.
Xxxxxx, Xxxxxx X. Xxxxxxxx and Xxxxxxx X. Xxxxxx in a form that has been
Previously Disclosed (the "PAYMENTS AGREEMENTS"), and (ii) a Consulting and
Non-Competition Agreement with each of Xx. Xxxxxx and Xx. Xxxxxxxx in a form
that has been Previously Disclosed (the "CONSULTING AGREEMENTS").
7.16. SECTION 16 MATTERS. Prior to the Effective Time, the Company and
Parent shall take all such steps as may be required to cause any dispositions of
Company Common Stock (including derivative securities with respect to Company
Common Stock) or acquisitions of Parent Common Stock resulting from the
transactions contemplated by this Agreement by each individual who is subject to
the reporting requirements of Section 16(a) of the Exchange Act with respect to
Company to be exempt under Rule 16b-3 promulgated under the Exchange Act.
Company agrees to promptly furnish Parent with all requisite information
necessary for Parent to take the actions contemplated by this Section 7.16.
- 48 -
ARTICLE VIII.
CONDITIONS TO CONSUMMATION OF THE MERGER
8.01. CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE MERGER. The
respective obligation of each of the parties hereto to consummate the Merger is
subject to the fulfillment, where permitted by law, or written waiver by the
parties hereto prior to the Closing Date of each of the following conditions:
(a) SHAREHOLDER APPROVAL. This Agreement shall have been duly
approved by holders of not less than a majority of the outstanding Company
Common Stock.
(b) REGULATORY APPROVALS. All regulatory approvals required to
consummate the Transactions shall have been obtained and shall remain in full
force and effect and all statutory waiting periods in respect thereof shall have
expired and no such approval shall contain any conditions, restrictions or
requirements which the Parent Board reasonably determines in good faith would,
individually or in the aggregate, materially reduce the benefits of the
Transactions to such a degree that Parent would not have entered into this
Agreement had such conditions, restrictions or requirements been known at the
date hereof.
(c) NO INJUNCTION. No Governmental Authority of competent
jurisdiction shall have enacted, issued, promulgated, enforced or entered any
statute, rule, regulation, judgment, decree, injunction or other order (whether
temporary, preliminary or permanent) which is in effect and prohibits
consummation of the Transactions.
(d) REGISTRATION STATEMENT. The Registration Statement shall have
been declared effective under the Securities Act and no stop order suspending
the effectiveness of the Registration Statement shall have been issued and no
proceedings for that purpose shall have been initiated by the SEC and not
withdrawn and Parent shall have received all required approvals by state
securities or "blue sky" authorities.
(e) TAX OPINION. Parent and Merger Sub shall have received a letter
setting forth the written opinion of Xxxxx Xxxx LLP, in form and substance
reasonably satisfactory to Parent and Merger Sub, dated as of the Effective
Date, and Company shall have received a letter setting forth the written opinion
of Xxxxxxx Xxxxxx & Xxxxxxxx LLP, in form and substance reasonably satisfactory
to Company, dated as of the Effective Date, in each case substantially to the
effect that, on the basis of the facts, representations and assumptions set
forth in such letter, each of the Merger and the Bank Merger will constitute a
tax-free reorganization described in section 368(a) of the Internal Revenue
Code.
8.02. CONDITIONS TO OBLIGATION OF THE COMPANY. The obligation of the
Company to consummate the Merger is also subject to the fulfillment or written
waiver by the Company prior to the Closing Date of each of the following
conditions:
(a) REPRESENTATIONS AND WARRANTIES. Each of the representations and
warranties of Parent and Merger Sub in this Agreement which is qualified as to
materiality shall be true and correct and each such representation or warranty
that is not so qualified shall be true and correct in all material respects, in
each case as of the date of this Agreement, as applicable, and (except to the
extent such representations and warranties speak as of an earlier date) as of
the Closing
- 49 -
Date as though made on and as of the Closing Date; provided, however, that for
purposes of this Section 8.02(a), such representations and warranties shall be
deemed to be true and correct unless the failure or failures of such
representations and warranties to be so true and correct, individually or in the
aggregate, and without giving effect to any qualification as to materiality set
forth in such representations or warranties, would have a Material Adverse
Effect on Parent, and the Company shall have received a certificate, dated the
Effective Date, signed by the Chief Executive Officer and the Chief Financial
Officer of Parent and Merger Sub to such effect.
(b) PERFORMANCE OF OBLIGATIONS OF PARENT AND MERGER SUB. Each of
Parent and Merger Sub shall have performed all obligations required to be
performed by it under this Agreement at or prior to the Effective Time, and the
Company shall have received a certificate, dated the Effective Date, to such
effect signed by the Chief Executive Officer and Chief Financial Officer of
Parent and Merger Sub.
(c) OTHER ACTIONS. Parent and Merger Sub shall have furnished the
Company with such certificates of its respective officers or others and such
other documents to evidence fulfillment of the conditions set forth in Sections
8.01 and 8.02 as the Company may reasonably request.
(d) EXCHANGE AGENT CERTIFICATE. The Exchange Agent shall have
delivered to the Company a certificate dated as of the Effective Time to the
effect that it has received from Parent due authorization to issue the required
number of shares of Parent Common Stock to be issued in the Merger and the full
amount of cash to pay for the aggregate cash portion of the Merger Consideration
and cash in lieu of fractional shares.
8.03. CONDITIONS TO OBLIGATIONS OF PARENT. The obligations of Parent and
Merger Sub to consummate the Merger are also subject to the fulfillment or
written waiver by Parent and Merger Sub prior to the Closing Date of each of the
following conditions:
(a) REPRESENTATIONS AND WARRANTIES. Each of the representations and
warranties of the Company in this Agreement which is qualified as to materiality
shall be true and correct and each such representation or warranty that is not
so qualified shall be true and correct in all material respects, in each case as
of the date of this Agreement, and (except to the extent such representations
and warranties speak as of an earlier date) as of the Closing Date as though
made on and as of the Closing Date; provided, however, that for purposes of this
Section 8.03(a), such representations and warranties shall be deemed to be true
and correct unless the failure or failures of such representations and
warranties to be so true and correct, individually or in the aggregate, and
without giving effect to any qualification as to materiality set forth in such
representations or warranties, would have a Material Adverse Effect on the
Company, and Parent and Merger Sub shall have received a certificate, dated the
Effective Date, signed by the Chief Executive Officer and the Chief Financial
Officer of the Company to such effect.
(b) PERFORMANCE OF OBLIGATIONS OF COMPANY. The Company shall have
performed all obligations required to be performed by it under this Agreement at
or prior to the Effective Time, and Parent and Merger Sub shall have received a
certificate, dated the Effective Date, to such effect signed by the Chief
Executive Officer and Chief Financial Officer of the Company.
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(c) DISSENTING SHARES. Dissenting Shares shall not represent 15% or
more of the outstanding Company Common Stock.
(d) PAYMENTS AGREEMENTS. The Payments Agreements referred to in
Section 7.15 shall have been duly executed and delivered by the respective
parties thereto and shall be in full force and effect, and each party thereto
other than Parent shall have performed in all material respects all obligations
required to be performed by it thereunder at or prior to the Effective Time.
(e) CONSENTS UNDER AGREEMENTS. The consent, approval or waiver of
each Person (other than regulatory approvals contemplated in Section 8.01(b))
whose consent or approval shall be required in order to permit the succession by
the Surviving Corporation pursuant to the Merger to any obligation, right or
interest of the Company or any of the Company's Subsidiaries under any loan or
credit agreement, note, mortgage, indenture, lease, license or other agreement
or instrument shall have been obtained, except for such consents the failure of
which to be obtained would not, individually or in the aggregate, have a
Material Adverse Effect on Parent after giving effect to the consummation of the
Transactions, and none of such permits, consents, waivers, clearances, approvals
and authorizations shall contain any term or condition which would materially
impair the value of the Company to Parent.
(f) TERMINATION OF CERTAIN EXISTING EMPLOYMENT ARRANGEMENTS. All
contracts, plans, and arrangements, whether written or oral, pursuant to which
payments and other benefits would otherwise be due to Xxxx X. Xxxxxx, Xxxxxx X.
Xxxxxxxx and Xxxxxxx X. Xxxxxx shall each have been terminated without cost to
Company, Company Bank or any party to this Agreement, except for such payments
as are provided for under and as otherwise set forth in the Payments Agreements.
(g) NO PARACHUTE PAYMENTS. Neither Company or any of the Company's
Subsidiaries shall have taken any action or made any payments that would result,
either individually or in the aggregate, in any violation of the requirements
set forth in Section 4.01(b)(9).
(h) OTHER ACTIONS. The Company shall have furnished Parent and
Merger Sub with such certificates of its officers or others and such other
documents to evidence fulfillment of the conditions set forth in Sections 8.01
and 8.03 as Parent or Merger Sub may reasonably request.
ARTICLE IX.
TERMINATION
9.01. TERMINATION. This Agreement may be terminated and the Merger and the
other transactions contemplated by this Agreement may be abandoned at any time
prior to the Effective Time, notwithstanding any requisite approval and adoption
of this Agreement and the transactions contemplated in this Agreement by the
stockholders of the Company:
(a) MUTUAL CONSENT. By mutual consent of Parent and the Company, if
the Board of Directors of each so determines by vote of a majority of the
members of its entire Board.
- 51 -
(b) DELAY. By either Parent or the Company (if its Board of
Directors so determines by vote of a majority of the members of its entire
Board) if (i) the Effective Time shall not have occurred on or before December
31, 2003 or such later date as the parties may have agreed upon in writing (the
"EXPIRATION DATE"), except to the extent that the failure of the Merger then to
be consummated arises out of or results from the knowing action or inaction of
(i) the party seeking to terminate pursuant to this Section 9.01(b) or (ii) any
of the Shareholders (if the Company is the party seeking to terminate), which
action or inaction is in violation of its obligations under this Agreement or,
in the case of the Shareholders, his, her or its obligations under the relevant
Voting Agreement.
(c) NO APPROVAL. By the Company or Parent, if its Board of Directors
so determines by a vote of a majority of the members of its entire Board, in the
event the approval of any Governmental Authority required for consummation of
the Merger and the other transactions contemplated by this Agreement shall have
been denied by final nonappealable action of such Governmental Authority or an
application therefor shall have been permanently withdrawn at the request of a
Governmental Authority.
(d) BREACH. At any time prior to the Effective Time, by Parent or
the Company (provided that the terminating party is not then in material breach
of any representation, warranty, covenant or other agreement contained herein)
if its Board of Directors so determines by vote of a majority of the members of
its entire Board, in the event of: (i) a material breach by Parent or the
Company, as the case may be, of any representation or warranty contained herein,
which breach would constitute, if occurring or continuing on the Closing Date,
the failure of the conditions set forth in Section 8.02(a) or 8.03(a), as the
case may be, and which cannot be or has not been cured within 30 days after the
giving of written notice to the breaching party or parties of such breach; or
(ii) a material breach by Parent or the Company, as the case may be, of any of
the covenants or agreements contained herein, which breach cannot be or has not
been cured within 30 days after the giving of written notice to the breaching
party or parties of such breach.
(e) NO SHAREHOLDER APPROVAL. By either Parent or the Company
(provided, that the terminating party shall not be in material breach of any of
its obligations under Section 7.02) if any approval of the stockholders of the
Company required for the consummation of the Merger shall not have been obtained
by reason of the failure to obtain the required vote at a duly held meeting of
the Company's stockholders or at any adjournment or postponement thereof, or, if
such meeting of stockholders shall not have been held or shall have been
canceled prior to the Expiration Date.
(f) FAILURE TO RECOMMEND. By Parent if, at any time prior to the
Company Meeting, (i) the Company shall have materially breached Section 7.08 or
(ii) the Company Board shall have failed to make its recommendation referred to
in Section 7.02, withdrawn such recommendation or modified or changed such
recommendation in a manner adverse in any respect to the interests of Parent, or
(iii) the Company shall have materially breached its obligations to call, give
notice of, convene and hold the Company Meeting in accordance with Section 7.02.
(g) CERTAIN TENDER OFFERS. By Parent, if a Tender Offer is commenced
(as such term is defined in Rule 14d-2 under the Exchange Act), other than by
Parent or a Subsidiary thereof, and the Company Board recommends that the
stockholders of the Company tender their
- 52 -
shares in such Tender Offer or otherwise fails to recommend that such
stockholders reject such Tender Offer within the 10 business day period
specified in Rule 14e-2(a) under the Exchange Act.
(h) POSSIBLE ADJUSTMENT. By the Company, if the Company Board so
determines by the vote of a majority of all of its members, by giving written
notice to Parent not later than the end of the second Business Day next
following the Determination Date, in the event that both of the following
conditions are satisfied:
(i) the Average Closing Price shall be less than 90% of the
Signing Date Average Closing Price; and
(ii) (A) the number obtained by dividing the Average Closing
Price by the Signing Date Average Closing Price is less than (B) the
number obtained by dividing the Final Index Price by the Initial
Index Price and then multiplying the quotient in this clause (ii)(B)
by 0.80.
If the Company elects to exercise its termination right pursuant to this
Section 9.01(h), it shall give written notice to Parent. During the
five-business-day period commencing with its receipt of such notice, Parent may,
at its option (the "Fill Option"), offer to adjust the Per Share Stock
Consideration to a level determined by multiplying the original Per Share Stock
Consideration by a quotient determined by dividing $19.33 by the Average Closing
Price. If Parent makes an election contemplated by the preceding sentence within
such five-day period, it shall give prompt written notice to the Company of such
election and the revised Per Share Stock Consideration, whereupon no termination
shall have occurred pursuant to this Section 9.01(h) and this Agreement shall
remain in effect in accordance with its terms (except as the Per Share Stock
Consideration shall have been so modified), and any references in this Agreement
to "PER SHARE STOCK CONSIDERATION" shall thereafter be deemed to refer to the
Per Share Stock Consideration as adjusted pursuant to this Section 9.01(h).
If Parent or any company belonging to the Index Group declares or effects a
stock dividend, reclassification, recapitalization, split-up, combination,
exchange of shares or similar transaction between the date of the Agreement and
the valuation date, the prices for the common stock of such company will be
appropriately adjusted.
9.02. EFFECT OF TERMINATION; EXPENSES.
(a) In the event of the termination of this Agreement pursuant to
Section 9.01, this Agreement shall forthwith become void (except as set forth in
Section 10.01), and there shall be no liability on the part of any party hereto,
except (i) each party shall remain liable in any action at law or otherwise for
any liabilities or damages arising out of its gross negligence or willful breach
of any provision of this Agreement, and (ii) as otherwise provided in this
Section 9.02.
(b) If this Agreement is terminated as a result of any breach of a
representation, warranty, covenant or other agreement which is caused by the
gross negligence or willful or intentional breach of a party hereto, such party
shall be liable to the other party for all out-of-pocket costs and expenses,
including, without limitation, the reasonable fees and expenses of lawyers,
accountants and investment bankers, incurred by such other party in connection
with the
- 53 -
entering into of this Agreement and the carrying out of any and all acts
contemplated hereunder ("EXPENSES"). The payment of Expenses is not an exclusive
remedy, but is in addition to any other rights or remedies available to the
parties hereto (whether at law or in equity) arising out of the gross negligence
of a party or willful breach of any provision of this Agreement or under this
Agreement.
9.03. COMPANY SPECIAL PAYMENT. As a condition of Parent's willingness, and
in order to induce Parent, to enter into this Agreement and to reimburse Parent
for incurring the damages, costs and expenses related to entering into this
Agreement and consummating the transactions contemplated by this Agreement, the
Company will pay to Parent the sum of $6,000,000 (as such amount may be adjusted
pursuant to Section 9.03(d), the "COMPANY SPECIAL PAYMENT"), if and only if a
Payment Event (as hereinafter defined) shall have occurred before the Special
Payment Termination Date (as hereinafter defined) determined in accordance with
Section 9.03(c).
(a) "PAYMENT EVENT" shall mean any of the following events:
(i) Without Parent's prior written consent, the Company shall
have entered into an agreement to effect, or shall have consummated,
a Change in Control Transaction; or
(ii) This Agreement shall have been terminated by either Parent
or the Company as a result of the Company's willful or intentional
breach of any representation, warranty, covenant or obligation
contained in this Agreement.
(b) A "TIME EXTENSION EVENT" means any of the following events:
(i) any person (other than Parent or any Parent Subsidiary)
shall have commenced (as such term is defined in Rule 14d-2 under
the Exchange Act), or shall have filed a registration statement
under the Securities Act with respect to, a Tender Offer; or
(ii) Any person (other than Parent or any Parent Subsidiary)
shall have acquired beneficial ownership (as such term is defined in
Rule 13d-3 promulgated under the Exchange Act) of or has the
contractual right to acquire beneficial ownership of, or any "group"
(as such term is defined in Section 13(d)(3) of the Exchange Act)
shall have been formed which beneficially owns or has the
contractual right to acquire beneficial ownership of, 25% or more of
the then outstanding shares of Company Common Stock; or
(iii) following the public announcement of an Acquisition
Proposal, the holders of Company Common Stock shall not have
approved this Agreement at the meeting of such stockholders held for
the purpose of voting on this Agreement; or
(iv) following the occurrence of an Acquisition Proposal:
(A) the meeting of Company stockholders held for the
purpose of voting on this Agreement shall not have been held or
shall have been
- 54 -
canceled prior to termination of this Agreement,
(B) the Company's Board of Directors shall have withdrawn
or modified in a manner adverse to Parent the recommendation of
the Company's Board of Directors with respect to this Agreement
and the Merger, or
(C) The Company shall have willfully or intentionally
breached any representation, warranty, covenant or obligation
contained in this Agreement and such breach would entitle
Parent to terminate this Agreement under Section 9.01(d) hereof
(without regard to the cure period provided for therein unless
such cure is promptly effected without jeopardizing
consummation of the Merger pursuant to the terms of this
Agreement).
(c) DURATION OF PARENT'S RIGHTS WITH RESPECT TO COMPANY SPECIAL
PAYMENT. Notwithstanding any other provision of this Agreement, the provisions
of this Section 9.03 shall remain in effect and shall be enforceable by Parent
or any successor in interest until the "SPECIAL PAYMENT TERMINATION DATE", which
shall be the earliest to occur of:
(i) The Effective Time of the Merger,
(ii) The date that is 12 months after termination or expiration
of this Agreement following the occurrence of a Time Extension
Event;
(iii) The date on which the Agreement is terminated in
accordance with its terms, BUT ONLY IF such termination takes place
PRIOR to the occurrence of a Payment Event or a Time Extension
Event.
(d) EXCLUSIVITY OF REMEDY. Notwithstanding anything to the contrary
set forth in this Agreement, if the Company pays or causes to be paid to Parent
or to Parent Bank the Company Special Payment, neither the Company nor Company
Bank will have any further obligations or liabilities to Parent or Parent Bank
with respect to this Agreement or the transactions contemplated by this
Agreement.
(e) ADJUSTMENT TO AMOUNT OF COMPANY SPECIAL PAYMENT. The amount of
the Company Special Payment shall be reduced by the amount of any Expenses paid
by the Company to Parent pursuant to Section 9.02(b).
(f) EFFECT ON STANDSTILL ARRANGEMENTS. In the event the Company pays
to Parent the Company Special Payment, any standstill provisions contained in
the Confidentiality Agreements referred to in Section 7.08 shall terminate.
(g) PAYMENT REQUIRED. Any payment required under this Section 9.03
will be (i) payable by the Company to Parent (by wire transfer of immediately
available funds to an account designated by Parent) within five business days
after demand by Parent.
9.04. PARENT SPECIAL PAYMENT.
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(a) PAYMENT AMOUNT. As a condition of the Company's willingness to,
and in order to induce the Company to, enter into this Agreement, and to
reimburse the Company for incurring the damages, costs and expenses related to
entering into this Agreement and consummating the transactions contemplated by
this Agreement, Parent hereby agrees to pay to the Company a cash payment in the
amount of $6,000,000 (the "PARENT SPECIAL PAYMENT") if and only if the Company
has terminated this Agreement in accordance with Section 9.01(d) and the breach
of the representation, warranty, covenant or agreement under Section 9.01(d) was
caused by the willful conduct or gross negligence of Parent. Under such
circumstances Parent will also pay to the Company Expenses as provided in
Section 9.02(b).
(b) PAYMENTS REQUIRED. Any payment required to be made under this
Section 9.04 shall be paid by Parent to the Company by wire transfer of
immediately available funds to an account designated by the Company within five
business days after demand by the Company.
(c) ADJUSTMENT TO AMOUNT OF PARENT SPECIAL PAYMENT. The amount of
the Parent Special Payment shall be reduced by the amount of any Expenses paid
by Parent to the Company pursuant to Section 9.02(b).
(d) EXCLUSIVITY OF PARENT SPECIAL PAYMENT AS REMEDY. Notwithstanding
anything to the contrary set forth in this Agreement, if the Parent pays or
causes to be paid to Parent the Parent Special Payment, neither the Parent nor
any affiliate will have any further obligations or liabilities to Company or any
other Person with respect to this Agreement or the transactions contemplated by
this Agreement.
ARTICLE X.
MISCELLANEOUS
10.01. SURVIVAL. No representations, warranties, agreements and covenants
contained in this Agreement shall survive the Effective Time (other than
agreements or covenants contained herein that by their express terms are to be
performed after the Effective Time, and the Voting Agreements and the Payments
Agreements, which shall terminate in accordance with the terms thereof) or the
termination of this Agreement if this Agreement is terminated prior to the
Effective Time (other than Sections 7.06(c), 9.03, 9.04, and, excepting Section
10.12 hereof, this Article X, which shall survive any such termination).
10.02. WAIVER; AMENDMENT. Prior to the Effective Time, any provision of
this Agreement may be (i) waived by the party benefited by the provision or (ii)
amended or modified at any time, by an agreement in writing among the parties
hereto executed in the same manner as this Agreement, except that after the
Company Meeting no amendment shall be made which changes in kind or reduces in
amount the Merger Consideration without the further approval of the Company's
stockholders.
10.03. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to constitute an original.
10.04. GOVERNING LAW. This Agreement shall be governed by, and interpreted
in accordance with, the laws of The Commonwealth of Massachusetts applicable to
contracts made
- 56 -
and to be performed entirely within such state.
10.05. EXPENSES. Except as otherwise provided in Section 9.02, each party
hereto will bear all expenses incurred by it in connection with this Agreement
and the transactions contemplated hereby, including fees and expenses of its own
financial consultants, accountants and counsel and, in the case of Parent, the
registration fee to be paid to the SEC in connection with the Registration
Statement, except that expenses of printing the Proxy Statement shall be shared
equally between the Company and Parent.
10.06. NOTICES. All notices, requests and other communications hereunder to
a party shall be in writing and shall be deemed given if personally delivered,
telecopied (with confirmation) or mailed by registered or certified mail (return
receipt requested) to such party at its address set forth below or such other
address as such party may specify by notice to the parties hereto.
If to the Company to:
Bay State Bancorp, Inc.
0000 Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxxxxx 00000
Attention: President & Chief Executive Officer
Fax: (000) 000-0000
With a copy to:
Xxxxxxx Xxxxxx & Xxxxxxxx LLP
0000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Attention: Xxxxxxxx X.X. Spaccasi, Esq.
Fax: (000) 000-0000
If to Parent to:
Seacoast Financial Services Corporation
Xxx Xxxxxxx Xxxxx
Xxx Xxxxxxx, XX 00000
Attention: President & Chief Executive Officer
Fax: (000) 000-0000
With a copy to:
Xxxxx Xxxx LLP
000 Xxxxxxx Xxxxxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxx and Xxxxx Xxxxxxxxx Xxxxx
Fax: (000) 000-0000
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10.07. ENTIRE UNDERSTANDING; NO THIRD PARTY BENEFICIARIES. This Agreement,
the Bank Merger Agreement, the Voting Agreements, the Payments Agreements, and
the Consulting Agreements represent the entire understanding of the parties
hereto and thereto with reference to the transactions contemplated hereby and
thereby and this Agreement, the Bank Merger Agreement, the Voting Agreements,
the Payments Agreements, the Consulting Agreements supersede any and all other
oral or written agreements heretofore made. Except for the Indemnified Parties'
right to enforce Parent's obligation under Section 7.11, which are expressly
intended to be for the irrevocable benefit of, and shall be enforceable by, each
Indemnified Party and his or her heirs and representatives, nothing in this
Agreement, expressed or implied, is intended to confer upon any Person, other
than the parties hereto or their respective successors, any rights, remedies,
obligations or liabilities under or by reason of this Agreement.
10.08. SEVERABILITY. Except to the extent that application of this Section
10.08 would have a Material Adverse Effect on the Company or Parent, any term or
provision of this Agreement which is invalid or unenforceable in any
jurisdiction shall, as to that jurisdiction, be ineffective to the extent of
such invalidity or unenforceability without rendering invalid or unenforceable
the remaining terms and provisions of this Agreement or affecting the validity
or enforceability of any of the terms or provisions of this Agreement in any
other jurisdiction. If any provision of this Agreement is so broad as to be
unenforceable, the provision shall be interpreted to be only so broad as is
enforceable. In all such cases, the parties shall use their reasonable best
efforts to substitute a valid, legal and enforceable provision which, insofar as
practicable, implements the original purposes and intents of this Agreement.
10.09. ENFORCEMENT OF THE AGREEMENT. The parties hereto agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with their specific terms or were
otherwise breached. It is accordingly agreed that the parties shall be entitled
to an injunction or injunctions to prevent breaches of this Agreement and to
enforce specifically the terms and provisions hereof in any court of the United
States or any state having jurisdiction, this being in addition to any other
remedy to which they are entitled at law or in equity.
10.10. INTERPRETATION. When a reference is made in this Agreement to
Sections, Exhibits or Schedules, such reference shall be to a Section of, or
Exhibit or Schedule to, this Agreement unless otherwise indicated. The table of
contents and headings contained in this Agreement are for reference purposes
only and are not part of this Agreement. Whenever the words "include,"
"includes" or "including" are used in this Agreement, they shall be deemed to be
followed by the words "without limitation." References to sections include
subsections which are part of the related sections (e.g. a section numbered
"Section 5.5(a)" would be part of "Section 5.5" and references to "Section 5.5"
would also refer to material contained in the subsection described as "Section
5.5(a)").
10.11. ASSIGNMENT. No party may assign either this Agreement or any of its
rights, interests or obligations hereunder without the prior written approval of
the other party. Subject to the preceding sentence, this Agreement shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective successors and permitted assigns.
10.12. ALTERNATIVE STRUCTURE. Notwithstanding any provision of this
Agreement to the contrary, Parent may at any time modify the structure of the
acquisition of the Company set forth
- 58 -
herein, subject to the prior written consent of the Company, which consent shall
not be unreasonably withheld or delayed, provided that (i) the Merger
Consideration to be paid to the holders of Company Common Stock is not thereby
changed in kind or reduced in amount as a result of such modification, (ii) such
modification will not adversely affect the tax treatment of the Company's
stockholders as a result of receiving the Merger Consideration and (iii) such
modification will not materially delay or jeopardize receipt of any required
approvals of Governmental Authorities.
- 59 -
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in counterparts by their duly authorized officers, all as of the day
and year first above written.
SEACOAST FINANCIAL SERVICES CORPORATION
By: /s/ Xxxxx X. Xxxxxxxxx
-----------------------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: President and Chief Executive Officer
By: /s/ Xxxxxxx X. Xxxxxxxxxx, Xx.
-----------------------------------------------
Name: Xxxxxxx X. Xxxxxxxxxx, Xx.
Title: Treasurer and Chief Financial Officer
SEACOAST MERGER SUB, INC.
By: /s/ Xxxxx X. Xxxxxxxxx
-----------------------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: President
BAY STATE BANCORP, INC.
By: /s/ Xxxx X. Xxxxxx
-----------------------------------------------
Name: Xxxx X. Xxxxxx
Title: President and Chief Executive Officer
- 60 -
ANNEX A
FORM OF VOTING AGREEMENT
VOTING AGREEMENT dated as of December 19, 2002 (the "AGREEMENT") by and
between the undersigned holder of capital stock (the "STOCKHOLDER") of Bay State
Bancorp, Inc., a Delaware corporation (the "COMPANY"), and Seacoast Financial
Services Corporation, a Massachusetts corporation ("BUYER"). Capitalized terms
used herein and not defined herein have the respective meanings set forth in the
Merger Agreement (as defined below).
WHEREAS, Buyer and the Company have entered into an
Agreement and Plan of
Merger, dated as of December 19, 2002 (as such agreement may be subsequently
amended or modified, the "MERGER AGREEMENT"), providing for the merger of the
Company with and into a wholly owned subsidiary of the Buyer (the "MERGER");
WHEREAS, as of the date hereof, the Stockholder beneficially owns (as
defined in Rule 13d-3 under the Securities Exchange Act of 1934, as amended) and
has voting power with respect to the number of shares of common stock, par value
$.01 per share (the "COMMON STOCK"), of the Company set forth opposite the
Stockholder's name on Appendix I attached hereto (such shares, together with any
other shares of Common Stock which the Stockholder acquires beneficial ownership
in any capacity after the date hereof and prior to the termination of this
Agreement, the "SHARES"); and
WHEREAS, as a condition to the willingness of Buyer to enter into the
Merger Agreement, Parent has required that each Stockholder enter into this
Agreement with respect to such Shares; and
WHEREAS, the Stockholder intends this Agreement to be a voting agreement
authorized under Section 218(c) of the Delaware General Corporation Law.
NOW, THEREFORE, in consideration of, and as a condition to, Buyer's
entering into the Merger Agreement, and in consideration of the expenses
incurred and to be incurred by Buyer in connection therewith, the parties hereto
agree as follows:
1. AGREEMENT TO VOTE. While this Agreement is in effect, Stockholder agrees
to vote or cause to be voted all Shares that Stockholder shall be entitled to so
vote, whether such Shares are held of record or beneficially owned by
Stockholder, at the special meeting of the Company's shareholders to be called
and held following the date hereof (including any adjournment or postponement
thereof, the "COMPANY MEETING") or at any other meeting of the Company's
shareholders, and in connection with every action or approval by written consent
of the Company, (a) in favor of the approval of the Merger Agreement, the Merger
and the other transactions contemplated by the Merger Agreement and (b) against
any Acquisition Proposal.
2. AGREEMENT TO RETAIN SHARES. While this Agreement is in effect, other
than as provided herein, Stockholder agrees that he or she will not sell,
assign, transfer or otherwise dispose of (including, without limitation, by the
creation of a lien, claim, charge or other
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encumbrance, or permit to be sold, assigned, transferred or otherwise disposed
of, any Shares beneficially owned by Stockholder, except (a) transfers by will
or by operation of law, in which case this Agreement shall bind the transferee,
(b) transfers pursuant to any pledge agreement, subject to the pledgee agreeing
in writing to be bound by the terms of this Agreement, (c) transfers in
connection with estate and tax planning purposes, including transfers to
relatives, trusts and charitable organizations, subject to the transferee
agreeing in writing to be bound by the terms of this Agreement, (d) transfers to
any other stockholder of the Company who has executed a copy of this Agreement
on the date hereof with respect the Shares held by such stockholder, (e) shares
withheld by the Company in connection with the vesting of restricted stock or
the exercise of stock options to satisfy tax withholding obligations, (f)
transfers in connection with the exercise of stock options for the purpose of
payment of the exercise price, including cashless exercises, using shares
currently held to pay the exercise price, disposing of shares acquired upon the
exercise of stock options and margining stock currently held, and (g) as Buyer
may otherwise agree in its sole discretion. The provisions of Paragraph 2(f)
shall apply only to Xxxx X. Xxxxxx, Xxxxxx X. Xxxxxxxx and Xxxxxxx X. Xxxxxx.
3. LEGEND. The Company shall cause its transfer agent to note on its
records for the Company (in whatever form maintained) that such Shares are
subject to the restrictions on voting and transfer set forth herein, and at
Buyer's request shall have any existing certificates representing Shares subject
to this Agreement canceled and reissued bearing the following legend:
"THIS CERTIFICATE AND THE SHARES REPRESENTED HEREBY ARE SUBJECT TO CERTAIN
VOTING AND TRANSFER RESTRICTIONS CONTAINED IN A VOTING AGREEMENT BY AND BETWEEN
SEACOAST FINANCIAL SERVICES CORPORATION AND CERTAIN BENEFICIAL OWNERS OF BAY
STATE BANCORP, INC. AND THESE SHARES MAY BE SOLD, ASSIGNED, TRANSFERRED, OR
OTHERWISE DISPOSED OF ONLY IN COMPLIANCE THEREWITH. COPIES OF THE
ABOVE-REFERENCED AGREEMENT ARE ON FILE AT THE OFFICES OF BAY STATE BANCORP,
INC."
4. REPRESENTATIONS AND WARRANTIES OF STOCKHOLDER. Stockholder hereby
represents and warrants to Buyer as follows:
(a) Stockholder has the complete and unrestricted power and the
unqualified right to enter into and perform the terms of this Agreement.
This Agreement has been duly and validly executed and delivered by
Stockholder and constitutes a legal, valid and binding agreement with
respect to Stockholder, enforceable against Stockholder in accordance with
its terms, except to the extent enforcement may be limited by general
principles of equity whether applied in a court of law or a court of equity
and by bankruptcy, insolvency, moratorium and other similar laws affecting
creditors' rights and remedies generally.
(b) Stockholder (i) beneficially owns the number of Shares indicated
opposite Stockholder's name on Appendix I, hereto, free and clear of any
liens, claims, charges or other encumbrances of any kind whatsoever, except
as disclosed on Appendix I, and has unrestricted voting power with respect
to such Shares with no limitations, qualifications or restrictions on such
rights and (ii) does not beneficially own any shares of capital stock
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of the Company other than such Shares as to which Stockholder does not have
voting power except as disclosed on Appendix I.
(c) There are no proxies, voting trusts or understandings to or by
which Stockholder is a party or bound or that expressly requires that any
of the Shares be voted in a specific manner other than as provided in this
Agreement or that provides for any right on the part of any other person
other than Stockholder to vote such Shares.
5. TERM OF AGREEMENT. The Agreement shall remain in full force and effect
until the earlier of (a) the consummation of the Merger or (b) the termination
of the Merger Agreement in accordance with its terms.
6. SPECIFIC PERFORMANCE; INJUNCTIVE RELIEF. Stockholder has signed this
Agreement intending to be bound thereby. Stockholder expressly agrees that this
Agreement shall be specifically enforceable in any court of competent
jurisdiction in accordance with its terms against Stockholder. All of the
covenants and agreements contained in this Agreement shall be binding upon, and
inure to the benefit of, the respective parties and their permitted successors,
assigns, heirs, executors, administrators and other legal representatives, as
the case may be.
7. WAIVERS. No waivers of any breach of this Agreement extended by Buyer to
any Stockholder shall be construed as a waiver of any rights or remedies of
Buyer with respect to any other Stockholder of the Company who has executed a
copy of this Agreement with respect to Shares held by Stockholder or with
respect to any subsequent breach of the Stockholder or any other Stockholder of
the Company.
8. AMENDMENTS AND MODIFICATIONS. This Agreement may not be modified,
amended, altered or supplemented except upon the execution and delivery of a
written agreement executed by the parties hereto.
9. GOVERNING LAW. This Agreement is deemed to be signed as a sealed
instrument and is to be governed by the laws of Delaware, without giving effect
to the principles of conflicts of laws thereof. If any provision hereof is
deemed unenforceable, the enforceability of the other provisions hereof shall
not be affected.
10. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which will be deemed an original but all of which together
shall constitute one and the same instrument.
* * * * * *
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EXECUTED as of the date first above written.
STOCKHOLDER SEACOAST FINANCIAL SERVICES
CORPORATION
By:
-------------------------- ------------------------------------------
Signature Xxxxx X. Xxxxxxxxx
President and Chief Executive Officer
--------------------------
Print Name
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APPENDIX I
Print Name Number of Shares
---------- ----------------
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ANNEX B
INDEX GROUP
Company Market Weight
------- -------------
MAF Bancorp, Inc...................................... 14.19
Waypoint Financial Corp............................... 11.57
Dime Community Bancshares, Inc........................ 9.05
Connecticut Bancshares, Inc........................... 7.53
First Sentinel Bancorp, Inc........................... 7.48
Xxxxxx River Bancorp, Inc............................. 6.78
OceanFirst Financial Corp............................. 5.50
United Community Financial Corp....................... 5.49
WSFS Financial Corporation............................ 5.32
First Essex Bancorp, Inc.............................. 4.56
First Place Financial Corp............................ 4.07
Flushing Financial Corporation........................ 3.69
FIRSTFED AMERICA BANCORP, INC......................... 3.67
PennFed Financial Services, Inc....................... 3.37
CFS Bancorp, Inc...................................... 3.27
Parkvale Financial Corporation........................ 2.28
BostonFed Bancorp, Inc................................ 2.18
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ANNEX C
SHAREHOLDERS
Xxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxx
Xxx X. Xxxxx
Xxxxxxx X. Xxxxxx
Xxxxxxx X. XxXxxxx
Xxxx X. Xxxxxx
Xxxxxx X. Xxxxxxxx
Xxxx X. Xxxxxxxx
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