November 13, 1996
Vermont Financial Services Corporation
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Ladies and Gentlemen:
Each of the undersigned (each a "Stockholder") beneficially owns and
has sole or shared voting power with respect to the number of shares of the
common stock, par value $0.01 per share (the "Shares"), of Eastern Bancorp,
Inc., a Delaware corporation (the "Seller"), indicated opposite such
Stockholder's name on Schedule 1 attached hereto.
Simultaneously with the execution of this letter agreement, Vermont
Financial Services Corporation (the "Buyer"), the Seller and Seller's wholly
owned banking subsidiary, Vermont Federal Bank, FSB, are entering into an
Agreement and Plan of Reorganization (the "Acquisition Agreement") providing,
among other things, for the acquisition of Seller by Buyer by means of a merger
of Seller with and into Buyer (the "Acquisition"). Each of the undersigned
understands that the Buyer has undertaken and will continue to undertake
substantial expenses in connection with the negotiation and execution of the
Acquisition Agreement and the subsequent actions necessary to consummate the
transactions contemplated by the Acquisition Agreement.
In consideration of, and as a condition to, the Buyer's entering into
the Acquisition Agreement, and in consideration of the expenses incurred and to
be incurred by the Buyer in connection therewith, each Stockholder and the Buyer
agree as follows:
1. Each Stockholder, while this letter agreement is in effect, shall
vote or cause to be voted all of the Shares that such Stockholder shall be
entitled to so vote, whether such Shares are beneficially owned by such
Stockholder on the date of this letter agreement or are subsequently acquired,
whether pursuant to the exercise of stock options or otherwise, at any meeting
of the Seller's stockholders that may be called and held following the date
hereof, for the approval of the Acquisition, as contemplated under the
Acquisition Agreement, and shall vote or cause to be voted all such Shares, at
any such meeting or any other meeting of the Seller's stockholders following the
date hereof, against the approval of any other agreement providing for a merger,
acquisition, consolidation, sale of a material amount of assets or other
business combination of the Seller or any of its subsidiaries with any person or
entity other than the Buyer or any subsidiary of the Buyer. Each Stockholder,
while this letter agreement is in effect, shall support at all times, and
recommend for approval by the Seller's
Vermont Financial Services Corporation
November 13, 1996
Page 2
stockholders, the Acquisition, subject only to the Stockholder's fiduciary
obligations as a director of the Seller, to the extent applicable, and each
Stockholder shall conduct himself or herself, both publicly and privately, in a
manner consistent with such support and recommendation of the Acquisition,
subject to the Stockholder's fiduciary obligations as a director of the Seller
as applicable.
2. Each Stockholder will not sell, assign, transfer or otherwise
dispose of (including, without limitation, by the creation of a Lien (as defined
in paragraph 4 below)), or permit to be sold, assigned, transferred or otherwise
disposed of, any Shares owned by such Stockholder, whether such Shares are held
by the Stockholder on the date of this letter agreement or are subsequently
acquired, whether pursuant to the exercise of stock options or otherwise, except
(a) transfers by will or by operation of law (in which case this letter
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 letter agreement), (c) transfers, in connection with estate planning
purposes, to members of the Stockholder's immediate family, trusts or charitable
organizations, subject to the transferee agreeing in writing to be bound by the
terms of this letter agreement, and (d) such other transfers (subject to the
transferee agreeing in writing to be bound by the terms of this letter
agreement) as may be consented to by the Buyer, which consent shall not be
unreasonably withheld. The Buyer shall have the option to elect to have any
existing certificates representing Shares subject to this letter 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 VERMONT FINANCIAL
SERVICES CORPORATION AND THE BENEFICIAL OWNER OF THESE SHARES
AND MAY BE TRANSFERRED ONLY IN COMPLIANCE THEREWITH. COPIES OF
THE ABOVE-REFERENCED AGREEMENT ARE ON FILE AT THE OFFICES OF
VERMONT FINANCIAL SERVICES CORPORATION
3. The agreements contained herein are intended to relate to
restrictions on transferability and to continue only for such time as may
reasonably be necessary to obtain all necessary approvals, including all
necessary shareholder and governmental approvals, of the Acquisition and all
other transactions contemplated by the Acquisition Agreement.
4. Each Stockholder represents that such Stockholder has the complete
and unrestricted power and the unqualified right to enter into and perform the
terms of this letter agreement. Each Stockholder further represents that this
letter agreement (assuming this letter agreement constitutes a valid and binding
agreement of the Buyer) constitutes a valid and binding agreement with respect
to the Stockholder, enforceable against the Stockholder in accordance with its
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.
Except as may be set forth in Schedule 1, each Stockholder represents that such
Stockholder beneficially owns the number of Shares indicated opposite such
Stockholder's name on said Schedule 1, free and clear of any liens, claims,
charges or other encumbrances or restrictions of any kind
Vermont Financial Services Corporation
November 13, 1996
Page 3
whatsoever ("Liens"), and has sole or shared, and otherwise unrestricted, voting
power with respect to such Shares.
5. Notwithstanding anything herein to the contrary, the agreements
contained herein shall remain in full force and effect until the earlier of (a)
the consummation of the Acquisition or (b) the termination of the Acquisition
Agreement in accordance with Article VIII thereof.
6. Each Stockholder has signed this letter agreement intending to be
bound hereby. Each Stockholder expressly agrees that this letter agreement shall
be specifically enforceable in any court of competent jurisdiction in accordance
with its terms against such Stockholder. All of the covenants and agreements
contained in this letter 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. This letter 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.
8. No waivers of any breach of this letter agreement extended by the
Buyer to any Stockholder shall be construed as a waiver of any rights or
remedies of the Buyer with respect to any other Stockholder with respect to
Shares held by such other Stockholder or with respect to any subsequent breach
of the Stockholder or any other Stockholder hereunder.
9. This letter agreement is deemed to be signed as a sealed instrument
and is to be governed by the laws of the State 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.
If the foregoing accurately reflects your understanding of the subject
matter intended to be contained herein, please confirm our agreement by signing
this letter where indicated below.
Very truly yours,
/s/▇▇▇▇ ▇. ▇▇▇▇ /s/E. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
/s/▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ /s/▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Vermont Financial Services Corporation
November 13, 1996
Page 4
AGREED TO AND ACCEPTED BY AS
OF THE DATE FIRST ABOVE WRITTEN
VERMONT FINANCIAL SERVICES CORPORATION
By: /s/▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
President and Chief Executive Officer
Vermont Financial Services Corporation
November 13, 1996
Page 5
SCHEDULE I
Number of Shares
Name of Stockholder Beneficially Owned* Shares Subject to Pledge
------------------- ------------------ ------------------------
▇▇▇▇ ▇. ▇▇▇▇ 195,888.64 -0-
▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 94,441.15 -0-
▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 57,801 -0-
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 363,357 -0-
* Includes the following numbers of shares subject to stock options: ▇▇.
▇▇▇▇: 157,500; ▇▇. ▇▇▇▇▇▇▇▇: 75,000; ▇▇. ▇▇▇▇▇▇▇▇: 8,250 and ▇▇.
▇▇▇▇▇▇: 5,250.
