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EXECUTION COPY
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DATED AS OF OCTOBER 11, 2007
BY AND AMONG
ROCKLAND TRUSTΒ COMPANY,
XXXXXβX FERRY BANCORP.,
AND
XXXXXβX FERRY TRUSTΒ COMPANY
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TABLE OF
CONTENTS
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ARTICLE I.Β THE MERGER
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A-1
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SectionΒ 1.01
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The Merger
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A-1
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SectionΒ 1.02
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Articles of Incorporation and Bylaws
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A-1
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SectionΒ 1.03
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Directors and Officers of the Surviving Entity
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A-1
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SectionΒ 1.04
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Effective Date and Effective Time; Closing
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A-2
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SectionΒ 1.05
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Tax Consequences
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A-2
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ARTICLE II.Β MERGER CONSIDERATION; ELECTION AND EXCHANGE
PROCEDURES
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A-2
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SectionΒ 2.01
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Merger Consideration
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A-2
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SectionΒ 2.02
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Rights as Shareholders; Stock Transfers
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A-2
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SectionΒ 2.03
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Fractional Shares
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A-3
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SectionΒ 2.04
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Election Procedures
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A-3
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SectionΒ 2.05
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Exchange Procedures
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A-4
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SectionΒ 2.06
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Anti-Dilution Provisions
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A-6
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SectionΒ 2.07
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Options
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A-6
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ARTICLE III.Β REPRESENTATIONS AND WARRANTIES OF COMPANY
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A-6
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SectionΒ 3.01
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Making of Representations and Warranties
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A-6
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SectionΒ 3.02
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Organization, Standing and Authority
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A-7
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SectionΒ 3.03
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Capital Stock
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A-7
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SectionΒ 3.04
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Subsidiaries
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A-7
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SectionΒ 3.05
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Corporate Power; Minute Books
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A-8
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SectionΒ 3.06
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Corporate Authority
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A-8
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SectionΒ 3.07
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Regulatory Approvals; No Defaults
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A-8
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SectionΒ 3.08
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SEC Documents; Financial Reports; and Regulatory Reports
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A-9
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SectionΒ 3.09
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Absence of Certain Changes or Events
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A-10
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SectionΒ 3.10
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Legal Proceedings
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A-10
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SectionΒ 3.11
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Compliance With Laws
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A-11
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SectionΒ 3.12
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Material Contracts; Defaults
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A-11
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SectionΒ 3.13
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Brokers
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A-12
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SectionΒ 3.14
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Employee Benefit Plans
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A-12
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SectionΒ 3.15
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Labor Matters
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A-13
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SectionΒ 3.16
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Environmental Matters
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A-14
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SectionΒ 3.17
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Tax Matters
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A-15
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SectionΒ 3.18
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Investment Securities
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A-16
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SectionΒ 3.19
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Derivative Transactions
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A-16
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SectionΒ 3.20
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Regulatory Capitalization
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A-16
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SectionΒ 3.21
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Loans; Nonperforming and Classified Assets
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A-16
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SectionΒ 3.22
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TrustΒ Business; Administration of Fiduciary Accounts
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A-17
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SectionΒ 3.23
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Investment Management and Related Activities
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A-17
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SectionΒ 3.24
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Repurchase Agreements
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A-17
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SectionΒ 3.25
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Deposit Insurance
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X-00
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XxxxxxxΒ 0.00
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XXX, Xxxx-xxxxx Laundering and Customer Information Security
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A-18
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SectionΒ 3.27
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Transactions with Affiliates
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A-18
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SectionΒ 3.28
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Tangible Properties and Assets
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A-18
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A-i
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SectionΒ 3.29
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Intellectual Property
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A-19
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SectionΒ 3.30
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Insurance
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A-19
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SectionΒ 3.31
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Antitakeover Provisions
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A-19
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SectionΒ 3.32
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Fairness Opinion
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A-19
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SectionΒ 3.33
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Proxy Statement-Prospectus
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A-19
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SectionΒ 3.34
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Transaction Costs
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A-19
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SectionΒ 3.35
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Disclosure
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A-20
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ARTICLE IV.Β REPRESENTATIONS AND WARRANTIES OF buyer
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A-20
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SectionΒ 4.01
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Making of Representations and Warranties
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A-20
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SectionΒ 4.02
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Organization, Standing and Authority
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A-20
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SectionΒ 4.03
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Corporate Power; Minute Books
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A-20
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SectionΒ 4.04
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Corporate Authority
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A-20
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SectionΒ 4.05
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SEC Documents; Financial Reports; and Regulatory Reports
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A-20
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SectionΒ 4.06
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Regulatory Approvals; No Defaults
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A-21
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SectionΒ 4.07
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Absence of Certain Changes or Events
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A-22
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SectionΒ 4.08
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Compliance with Laws
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A-22
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SectionΒ 4.09
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Financial Ability
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A-22
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SectionΒ 4.10
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Proxy Statement-Prospectus Information; Registration Statement
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A-22
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SectionΒ 4.11
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Legal Proceedings
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A-23
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SectionΒ 4.12
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Brokers
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A-23
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SectionΒ 4.13
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Employee Benefit Plans
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A-23
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SectionΒ 4.14
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Labor Matters
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A-24
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SectionΒ 4.15
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Tax Matters
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A-24
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SectionΒ 4.16
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Disclosure
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A-24
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ARTICLE V.Β COVENANTS
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A-25
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SectionΒ 5.01
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Covenants of Company
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A-25
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SectionΒ 5.02
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Covenants of Buyer
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A-27
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SectionΒ 5.03
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Reasonable Best Efforts
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A-27
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SectionΒ 5.04
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Shareholder Approval
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A-28
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SectionΒ 5.05
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Registration Statement; Proxy Statement-Prospectus
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A-28
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SectionΒ 5.06
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Regulatory Filings; Consents
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A-29
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SectionΒ 5.07
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Publicity
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A-30
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SectionΒ 5.08
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Access; Information
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A-30
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SectionΒ 5.09
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No Solicitation by Company
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A-30
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SectionΒ 5.10
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Indemnification
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A-32
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SectionΒ 5.11
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Employees; Benefit Plans
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A-33
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SectionΒ 5.12
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Notification of Certain Changes
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A-34
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SectionΒ 5.13
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Current Information
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A-34
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SectionΒ 5.14
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Board Packages
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A-35
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SectionΒ 5.15
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Transition; Informational Systems Conversion
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A-35
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SectionΒ 5.16
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Access to Customers and Suppliers
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A-35
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SectionΒ 5.17
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Environmental Assessments
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A-35
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SectionΒ 5.18
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Certain Litigation
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A-35
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SectionΒ 5.19
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Dividend Reinvestment and Common Stock Purchase Plan
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A-36
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A-ii
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SectionΒ 5.20
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Stock Exchange De-listing
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A-36
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SectionΒ 5.21
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Director Resignations
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A-36
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SectionΒ 5.22
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Coordination of Dividends
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A-36
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SectionΒ 5.23
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Representation on Buyer Board
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A-36
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SectionΒ 5.24
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Coordination
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A-36
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SectionΒ 5.25
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Transactional Expenses
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A-37
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SectionΒ 5.26
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Charitable Contribution
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A-37
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ARTICLE VI.Β CONDITIONS TO CONSUMMATION OF THE MERGER
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A-37
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SectionΒ 6.01
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Conditions to Obligations of the Parties to Effect the Merger
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A-37
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SectionΒ 6.02
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Conditions to Obligations of Company
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A-38
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SectionΒ 6.03
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Conditions to Obligations of Buyer
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A-38
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SectionΒ 6.04
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Frustration of Closing Conditions
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A-39
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ARTICLE VII.Β TERMINATION
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A-39
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SectionΒ 7.01
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Termination
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A-39
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SectionΒ 7.02
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Termination Fee; Reimbursement
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A-41
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SectionΒ 7.03
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Effect of Termination and Abandonment
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A-42
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ARTICLE VIII.Β DEFINITIONS
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A-42
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SectionΒ 8.01
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Definitions
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A-42
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ARTICLE IX.Β MISCELLANEOUS
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A-49
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SectionΒ 9.01
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Survival
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A-49
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SectionΒ 9.02
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Waiver; Amendment
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A-49
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SectionΒ 9.03
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Governing Law
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A-49
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SectionΒ 9.04
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Expenses
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A-50
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SectionΒ 9.05
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Notices
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A-50
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SectionΒ 9.06
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Entire Understanding; No Third Party Beneficiaries
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A-50
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SectionΒ 9.07
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Severability
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A-51
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SectionΒ 9.08
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Enforcement of the Agreement
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A-51
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SectionΒ 9.09
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Interpretation
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A-51
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SectionΒ 9.10
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Assignment
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A-51
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SectionΒ 9.11
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Alternative Structure
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A-51
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SectionΒ 9.12
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Counterparts
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A-51
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A-iii
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EXHIBITSΒ AND
SCHEDULES
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ExhibitΒ A
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Form of Voting Agreement
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ExhibitΒ B
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Form of Plan of Bank Merger
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Schedules
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ScheduleΒ 5.11(a)
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Certain Company Employees
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ScheduleΒ 5.13
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Current Information
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ScheduleΒ 5.18
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Certain Dispute
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ScheduleΒ 6.03(f)(1)
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Releases from Certain Employees of Company
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ScheduleΒ 6.03(f)(2)
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Non-Competition Agreements from Certain Employees of Company
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ScheduleΒ 8.01(a)
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Certain Officers of Company and Company Bank
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ScheduleΒ 8.01(b)
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Certain Officers of Buyer and Buyer Bank
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A-iv
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Β
WITNESSETH
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WHEREAS, the Board of Directors of Buyer and the Board of
Directors of Company have each (i)Β determined that this
Agreement and the business combination and related transactions
contemplated hereby are in the best interests of their
respective entities and shareholders; (ii)Β determined that
this Agreement and the transactions contemplated hereby are
consistent with and in furtherance of their respective business
strategies; and (iii)Β approved this Agreement;
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WHEREAS, in accordance with the terms of this Agreement,
(i)Β Company will merge with and into Buyer, with Buyer the
surviving entity (the βMergerβ); and (ii)Β Company
Bank will merge with and into Buyer Bank, with Buyer Bank as the
surviving entity (the βBank Mergerβ);
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WHEREAS, as a material inducement to Buyer to enter into
this Agreement, each of the directors and certain Executive
Officers of Company has entered into a voting agreement with
Buyer dated as of the date hereof (a βVoting
Agreementβ), substantially in the form attached hereto as
ExhibitΒ A pursuant to which each such director or
Executive Officer has agreed, among other things, to vote all
shares of Company Common Stock (as defined herein) owned by such
person in favor of the approval of this Agreement and the
transactions contemplated hereby, upon the terms and subject to
the conditions set forth in such agreement;Β and
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WHEREAS, the parties desire to make certain
representations, warranties and agreements in connection with
the transactions described in this Agreement and to prescribe
certain conditions thereto.
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NOW, THEREFORE, in consideration of the mutual promises
herein contained and for other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, the
parties hereto agree as follows:
Β
ARTICLEΒ I.
Β
THE MERGER
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SectionΒ 1.01Β Β
The
Merger.Β Β Subject to the terms and conditions
of this Agreement, at the Effective Time, Company shall merge
with and into Buyer in accordance with the
Massachusetts
Business Corporation Act and the requirements of the
Massachusetts Board of Bank Incorporation. Upon consummation of
the Merger, the separate corporate existence of Company shall
cease and Buyer shall survive and continue to exist as a
corporation incorporated under the General Laws of
Massachusetts
(Buyer, as the Surviving Entity in the Merger, sometimes being
referred to herein as the βSurviving Entityβ).
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SectionΒ 1.02Β Β Articles
of Incorporation and Bylaws.Β Β The Articles of
Incorporation and Bylaws of the Surviving Entity upon
consummation of the Merger shall be the Articles of
Incorporation and Bylaws of Buyer as in effect immediately prior
to consummation of the Merger.
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SectionΒ 1.03Β Β Directors
and Officers of the Surviving Entity.Β Β The
directors of the Surviving Entity immediately after the Merger
shall be the directors of Buyer in office immediately prior to
the Effective Time plus the director appointed to Buyerβs
Board of Directors pursuant to SectionΒ 5.23 hereof. The
executive officers of the Surviving Entity immediately after the
Merger shall be the executive officers of Buyer immediately
prior to the Merger. Each of the directors and executive
officers of the Surviving Entity immediately after the Merger
shall hold office until his or her successor is elected and
qualified or otherwise in accordance with the Articles of
Incorporation and Bylaws of the Surviving Entity.
A-1
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SectionΒ 1.04Β Β Effective
Date and Effective Time; Closing.
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(a)Β Subject to the terms and conditions of this Agreement,
Buyer and Company will make all such filings as may be required
to consummate the Merger by applicable laws and regulations. The
Merger provided for herein shall become effective upon the
acceptance for filing by the
Massachusetts Secretary of State of
the articles of merger related to the Merger (the βArticles
of Mergerβ). The date of such filing or such later
effective date is herein called the βEffective Date.β
The βEffective Timeβ of the Merger shall be as
specified in the Articles of Merger.
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(b)Β A closing (the βClosingβ) shall take place
immediately prior to the Effective Time at the principal offices
of Xxxxxx XxXxxxxxxΒ & Fish
llp in Boston,
Massachusetts, or such other place or on such other date as the
parties may mutually agree upon (such date, the βClosing
Dateβ). At the Closing, there shall be delivered to Buyer
and Company the certificates and other documents required to be
delivered under ArticleΒ VI hereof.
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SectionΒ 1.05Β Β Tax
Consequences.Β Β It is intended that the Merger
shall qualify as a βreorganizationβ under
SectionΒ 368(a) of the Code, and that the Agreement shall
constitute a βplan of reorganizationβ for purposes of
SectionsΒ 354 and 361 of the Code.
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ARTICLEΒ II.
Β
MERGER
CONSIDERATION; ELECTION AND EXCHANGE PROCEDURES
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SectionΒ 2.01Β Β Merger
Consideration.Β Β Subject to the provisions of
this Agreement, at the Effective Time, automatically by virtue
of the Merger and without any action on the part of Buyer,
Company or any shareholder of Company:
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(a)Β Each share of Buyer Common Stock that is issued and
outstanding immediately prior to the Effective Time shall remain
outstanding following the Effective Time and shall be unchanged
by the Merger.
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(b)Β Each share of Company Common Stock held as treasury
stock immediately prior to the Effective Time shall be cancelled
and retired at the Effective Time without any conversion
thereof, and no payment shall be made with respect thereto.
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(c)Β Each share of Company Common Stock issued and
outstanding immediately prior to the Effective Time (other than
treasury stock) shall become and be converted into, as provided
in and subject to the limitations set forth in this Agreement,
the right to receive at the election of the holder thereof
subject to the limitations set forth in SectionΒ 2.04
either: (i)Β $25.50 in cash (the βCash
Considerationβ); or (ii)Β 0.818Β shares (the
βExchange Ratioβ) of Buyer Common Stock (the
βStock Considerationβ). The Cash Consideration and the
Stock Consideration are sometimes referred to herein
collectively as the βMerger Consideration.β
Β
SectionΒ 2.02Β Β Rights
as Shareholders; Stock Transfers.Β Β All shares
of Company Common Stock, when converted as provided in
SectionΒ 2.01(c), shall no longer be outstanding and shall
automatically be cancelled and retired and shall cease to exist,
and each Certificate previously evidencing such shares shall
thereafter represent only the right to receive for each such
share of Company Common Stock, the Merger Consideration and any
cash in lieu of fractional shares of Buyer Common Stock in
accordance with SectionsΒ 2.01(c) and 2.03 and the right to
receive any unpaid dividend with respect to the Company Common
Stock with a record date occurring prior to the Effective Time.
At the Effective Time, holders of Company Common Stock shall
cease to be, and shall have no rights as, shareholders of
Company, other than the right to receive the Merger
Consideration and cash in lieu of fractional shares of Buyer
Common Stock as provided under this ArticleΒ II and the
right to receive any unpaid dividend with respect to the Company
Common Stock with a record date occurring prior to the Effective
Time. After the Effective Time, there shall be no transfers on
the stock transfer books of Company of shares of Company Common
Stock, other than transfers of Company Common Stock that have
occurred prior to the Effective Time.
A-2
Β
SectionΒ 2.03Β Β Fractional
Shares.Β Β Notwithstanding any other provision
hereof, no fractional shares of Buyer Common Stock and no
certificates or scrip therefor, or other evidence of ownership
thereof, will be issued in the Merger. In lieu thereof, Buyer
shall pay to each holder of a fractional share of Buyer Common
Stock an amount of cash (without interest) determined by
multiplying the fractional share interest to which such holder
would otherwise be entitled by the average of the last sale
prices of Buyer Common Stock, as reported on The Nasdaq Global
Select Market (βNasdaqβ) (as reported in The Wall
Street Journal or, if not reported therein, in another
authoritative source), for the five (5)Β Nasdaq trading days
immediately preceding the Closing Date, rounded to the nearest
whole cent.
Β
SectionΒ 2.04Β Β Election
Procedures.
Β
(a)Β An election form and other appropriate and customary
transmittal materials (which shall specify that delivery shall
be effected, and risk of loss and title to Certificates shall
pass, only upon proper delivery of such Certificates to a bank
or trust company designated by Buyer and reasonably satisfactory
to Company (the βExchange Agentβ)) in such form as
Company and Buyer shall mutually agree (the βElection
Formβ), shall be mailed no more than forty (40)Β and no
less than twenty (20)Β Business Days prior to the
anticipated Election Deadline (the βMailing Dateβ) to
each holder of record of Company Common Stock. Each Election
Form shall permit the holder of record of Company Common Stock
(or in the case of nominee record holders, the beneficial owner
through proper instructions and documentation) to (i)Β elect
to receive the Cash Consideration for all or a portion of such
holderβs shares (a βCash Electionβ),
(ii)Β elect to receive the Stock Consideration for all or a
portion of such holderβs shares (a βStock
Electionβ), or (iii)Β make no election with respect to
the receipt of the Cash Consideration or the Stock Consideration
(a βNon-Electionβ); except as provided in
SectionΒ 7.01(i), seventy-five percent (75%) of the total
number of shares of Company Common Stock issued and outstanding
immediately prior to the Effective Time, excluding any Treasury
Stock (the βStock Conversion Numberβ), shall be
converted into the Stock Consideration and twenty-five percent
(25%) of such shares of Company Common Stock shall be converted
into the Cash Consideration. A record holder acting in different
capacities or acting on behalf of other Persons in any way will
be entitled to submit an Election Form for each capacity in
which such record holder so acts with respect to each Person for
which it so acts. Shares of Company Common Stock as to which a
Cash Election has been made are referred to herein as βCash
Election Shares.β Shares of Company Common Stock as to
which a Stock Election has been made are referred to herein as
βStock Election Shares.β Shares of Company Common
Stock as to which no election has been made (or as to which an
Election Form is not properly completed and returned in a timely
fashion) are referred to herein as βNon-Election
Shares.β The aggregate number of shares of Company Common
Stock with respect to which a Stock Election has been made is
referred to herein as the βStock Election Number.β
Β
(b)Β To be effective, a properly completed Election Form
shall be submitted to the Exchange Agent on or before
5:00Β p.m., New York City time, on a date no later than the
5thΒ Business Day prior to the Closing Date to be mutually
agreed upon by the parties (which date shall be publicly
announced by Buyer as soon as practicable prior to such date)
(the βElection Deadlineβ), accompanied by the
Certificates as to which such Election Form is being made or by
an appropriate guarantee of delivery of such Certificates, as
set forth in the Election Form, from a member of any registered
national securities exchange or a commercial bank or trust
company in the United States (provided that such Certificates
are in fact delivered to the Exchange Agent by the time required
in such guarantee of delivery; failure to deliver shares of
Company Common Stock covered by such guarantee of delivery
within the time set forth on such guarantee shall be deemed to
invalidate any otherwise properly made election, unless
otherwise determined by Buyer, in its sole discretion). For
shares of Company Common Stock held in book entry form, Buyer
shall establish procedures for delivery of such shares, which
procedures shall be reasonably acceptable to Company. If a
holder of Company Common Stock either (i)Β does not submit a
properly completed Election Form in a timely fashion or
(ii)Β revokes the holderβs Election Form prior to the
Election Deadline (without later submitting a properly completed
Election Form prior to the Election Deadline), the shares of
Company Common Stock held by such holder shall be designated
Non-Election Shares. In addition, all Election Forms shall
automatically be revoked, and all Certificates returned, if the
Exchange Agent is notified in writing by Buyer and Company that
this Agreement has been terminated. Subject to the terms of this
Agreement and of the Election Form, the Exchange Agent shall
have reasonable discretion to determine whether any election,
revocation or change has been properly or timely
A-3
Β
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 Buyer nor
the Exchange Agent shall be under any obligation to notify any
Person of any defect in an Election Form.
Β
(c)Β The allocation among the holders of shares of Company
Common Stock of rights to receive the Cash Consideration and the
Stock Consideration will be made as follows:
Β
(i)Β If the Stock Election Number exceeds the Stock
Conversion Number, then all Cash Election Shares and all
Non-Election Shares shall be converted into the right to receive
the Cash Consideration, and, subject to SectionΒ 2.03
hereof, each holder of Stock Election Shares will be entitled to
receive the Stock Consideration in respect of that number of
Stock Election Shares held by such holder equal to the product
obtained by multiplying (x)Β the number of Stock Election
Shares held by such holder by (y)Β a fraction, the numerator
of which is the Stock Conversion Number and the denominator of
which is the Stock Election Number, with the remaining number of
such holderβs Stock Election Shares being converted into
the right to receive the Cash Consideration;
Β
(ii)Β If the Stock Election Number is less than the Stock
Conversion Number (the amount by which the Stock Conversion
Number exceeds the Stock Election Number being referred to
herein as the βShortfall Numberβ), then all Stock
Election Shares shall be converted into the right to receive the
Stock Consideration and the Non-Election Shares and the Cash
Election Shares shall be treated in the following manner:
Β
(A)Β if the Shortfall Number is less than or equal to the
number of Non-Election Shares, then all Cash Election Shares
shall be converted into the right to receive the Cash
Consideration and, subject to Section 2.03 hereof, each holder
of Non-Election Shares shall receive the Stock Consideration in
respect of that number of Non-Election Shares held by such
holder equal to the product obtained by multiplying (x)Β the
number of Non-Election Shares held by such holder by (y)Β a
fraction, the numerator of which is the Shortfall Number and the
denominator of which is the total number of Non-Election Shares,
with the remaining number of such holderβs Non-Election
Shares being converted into the right to receive the Cash
Consideration;Β or
Β
(B)Β if the Shortfall Number exceeds the number of
Non-Election Shares, then all Non-Election Shares shall be
converted into the right to receive the Stock Consideration,
and, subject to SectionΒ 2.03 hereof, each holder of Cash
Election Shares shall receive the Stock Consideration in respect
of that number of Cash Election Shares equal to the product
obtained by multiplying (x)Β the number of Cash Election
Shares held by such holder by (y)Β a fraction, the numerator
of which is the amount by which (1)Β the Shortfall Number
exceeds (2)Β the total number of Non-Election Shares and the
denominator of which is the total number of Cash Election
Shares, with the remaining number of such holderβs Cash
Election Shares being converted into the right to receive the
Cash Consideration.
Β
SectionΒ 2.05Β Β Exchange
Procedures.
Β
(a)Β On or before the Closing Date, for the benefit of the
holders of Certificates, (i)Β Buyer shall cause to be
delivered to the Exchange Agent, for exchange in accordance with
this ArticleΒ II, certificates representing the shares of
Buyer Common Stock issuable pursuant to this ArticleΒ II
(βNew Certificatesβ) and (ii)Β Buyer shall
deliver, or shall cause to be delivered, to the Exchange Agent
an aggregate amount of cash sufficient to pay the aggregate
amount of cash payable pursuant to this ArticleΒ II
(including the estimated amount of cash to be paid in lieu of
fractional shares of Buyer Common Stock) (such cash and New
Certificates, being hereinafter referred to as the
βExchange Fundβ).
Β
(b)Β As promptly as practicable, but in any event no later
than five (5)Β Business Days following the Effective Time,
and provided that 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 mail to each holder
of record of a Certificate or Certificates who has not
previously surrendered such Certificate or Certificates with an
Election Form, a form of letter of transmittal (which shall
specify that delivery shall be effected, and risk of loss and
title to the Certificates shall pass, only upon delivery of the
Certificates to the Exchange Agent) and instructions for use in
effecting the surrender of the
A-4
Β
Certificates in exchange for the Merger Consideration into which
the shares of Company Common Stock represented by such
Certificate or Certificates shall have been converted pursuant
to SectionsΒ 2.01, 2.03 and 2.04 of this Agreement. Upon
proper surrender of a Certificate for exchange and cancellation
to the Exchange Agent, together with a properly completed letter
of transmittal, duly executed, the holder of such Certificate
shall be entitled to receive in exchange therefor, as
applicable, (i)Β a New Certificate representing that number
of shares of Buyer Common Stock (if any) to which such former
holder of Company Common Stock shall have become entitled
pursuant to this Agreement, (ii)Β a check representing that
amount of cash (if any) to which such former holder of Company
Common Stock shall have become entitled pursuant to this
Agreement
and/or
(iii)Β a check representing the amount of cash (if any)
payable in lieu of a fractional share of Buyer Common Stock
which such former holder has the right to receive in respect of
the Certificate surrendered pursuant to this Agreement, and the
Certificate so surrendered shall forthwith be cancelled. Until
surrendered as contemplated by this SectionΒ 2.05(b), each
Certificate (other than Certificates representing Treasury
Stock) shall be deemed at any time after the Effective Time to
represent only the right to receive upon such surrender the
Merger Consideration provided in SectionsΒ 2.01, 2.03 and
2.04 and any unpaid dividends and distributions thereon as
provided in paragraph (c)Β of this SectionΒ 2.05. No
interest shall be paid or accrued on any cash constituting
Merger Consideration (including any cash in lieu of fractional
shares) and any unpaid dividends and distributions payable to
holders of Certificates.
Β
(c)Β No dividends or other distributions with a record date
after the Effective Time with respect to Buyer Common Stock
shall be paid to the holder of any unsurrendered Certificate
until the holder thereof shall surrender such Certificate in
accordance with this SectionΒ 2.05. After the surrender of a
Certificate in accordance with this SectionΒ 2.05, the
record holder thereof shall be entitled to receive any such
dividends or other distributions, without any interest thereon,
which theretofore had become payable with respect to shares of
Buyer Common Stock represented by such Certificate. None of
Buyer, Company or the Exchange Agent shall be liable to any
Person in respect of any shares of Company Common Stock (or
dividends or distributions with respect thereto) or cash from
the Exchange Fund delivered to a public official pursuant to any
applicable abandoned property, escheat or similar law.
Β
(d)Β The Exchange Agent and Buyer, as the case may be, shall
not be obligated to deliver cash
and/or a New
Certificate or New Certificates representing shares of Buyer
Common Stock to which a holder of Company 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 SectionΒ 2.05, or, an appropriate affidavit of loss and
indemnity agreement
and/or a
bond in such amount as may be required in each case by Buyer. If
any New Certificates evidencing shares of Buyer 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 New Certificate for shares of Buyer 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.
Β
(e)Β Any portion of the Exchange Fund that remains unclaimed
by the shareholders of Company for six (6)Β months after the
Effective Time (as well as any interest or proceeds from any
investment thereof) shall be delivered by the Exchange Agent to
Buyer. Any shareholders of Company who have not theretofore
complied with SectionΒ 2.05(b) shall thereafter look only to
the Surviving Entity for the Merger Consideration deliverable in
respect of each share of Company Common Stock such shareholder
holds as determined pursuant to this Agreement, in each case
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 Buyer 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
Buyer (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.
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Β
Neither the Exchange Agent nor any party to this Agreement shall
be liable to any holder of shares of Company Common Stock
represented by any Certificate for any consideration paid to a
public official pursuant to applicable abandoned property,
escheat or similar laws. Buyer and the Exchange Agent shall be
entitled to rely upon the stock transfer books of Company to
establish the identity of those Persons entitled to receive the
Merger Consideration specified in this Agreement, which books
shall be conclusive with respect thereto. In the event of a
dispute with respect to ownership of any shares of Company
Common Stock represented by any Certificate, Buyer and the
Exchange Agent shall be entitled to deposit any Merger
Consideration represented thereby in escrow with an independent
third party and thereafter be relieved with respect to any
claims thereto.
Β
(f)Β Buyer (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 Buyer is required to deduct
and withhold under applicable law. Any amounts so deducted and
withheld shall be treated for all 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
Buyer.
Β
SectionΒ 2.06Β Β Anti-Dilution
Provisions.Β Β In the event Buyer changes (or
establishes a record date for changing) the number of, or
provides for the exchange of, shares of Buyer Common Stock
issued and outstanding prior to the Effective Time as a result
of a stock split, stock dividend, recapitalization,
reclassification, or similar transaction with respect to the
outstanding Buyer Common Stock and the record date therefor
shall be prior to the Effective Time, the Exchange Ratio and, if
applicable, the Cash Consideration shall be proportionately and
appropriately adjusted; provided that, for the avoidance of
doubt, no such adjustment shall be made with regard to the Buyer
Common Stock if (i)Β Buyer issues additional shares of Buyer
Common Stock and receives consideration for such shares in a
bona fide third party transaction or (ii)Β Buyer issues
employee or director stock grants or similar equity awards.
Β
SectionΒ 2.07Β Β Options.Β Β Each
option to purchase Company Common Stock (collectively, the
βOptionsβ) granted under Companyβs 1996 Stock
Option Plan or Companyβs 2004 Equity Incentive Plan
(collectively, the βCompany Option Planβ), whether
vested or unvested, which is outstanding immediately prior to
the Effective Time and which has not been exercised or canceled
prior thereto shall, at the Effective Time, be canceled and, on
the Closing Date, Company or Company Bank shall pay to the
holder thereof cash in an amount equal to the product of
(i)Β the number of shares of Company Common Stock provided
for in such Option and (ii)Β the excess, if any, of the Cash
Consideration over the exercise price per share of Company
Common Stock provided for in such Option, which cash payment
shall be made without interest and shall be net of all
applicable withholding taxes. Prior to the Closing Date, Company
shall use its reasonable best efforts to obtain the written
acknowledgment of each holder of a then-outstanding Option with
respect to the termination of the Option and the payment for
such Option in accordance with the terms of this
SectionΒ 2.07. At the Effective Time, Company Option Plan
shall terminate and the provisions in any other plan, program or
arrangement providing for the issuance or grant of any other
interest in respect of the capital stock of Company shall be of
no further force and effect and shall be deemed to be deleted.
Β
ARTICLEΒ III.
Β
REPRESENTATIONS
AND WARRANTIES OF COMPANY
Β
SectionΒ 3.01Β Β Making
of Representations and Warranties.Β Β Except as
set forth in the Company Disclosure Schedule, Company and
Company Bank hereby represent and warrant, jointly and
severally, to Buyer that the statements contained in this
ArticleΒ III are correct as of the date of this Agreement
and will be correct as of the Closing Date (as though made then
and as though the Closing Date were substituted for the date of
this Agreement throughout this ArticleΒ III), except as to
any representation or warranty which specifically relates to an
earlier date, which only need be correct as of such earlier
date. No representation or warranty of Company contained in this
ArticleΒ III shall be deemed untrue or incorrect, and
Company shall not be deemed to have breached a representation or
warranty, as a consequence of the existence of any fact,
circumstance or event unless such fact, circumstance or event,
individually or taken together with all other facts,
circumstances or events inconsistent with any section of this
Article III, has had or would reasonably be
A-6
Β
expected to have a Material Adverse Effect; provided, however,
that the foregoing standard shall not apply to the
representations and warranties contained in SectionsΒ 3.02,
3.03, 3.04(a), 3.05, 3.06, and 3.14(f), which shall be deemed
untrue, incorrect and breached if they are not true and correct
in all material respects.
Β
SectionΒ 3.02Β Β Organization,
Standing and Authority.
Β
(a)Β Company is a
Massachusetts corporation duly organized,
validly existing and in good standing under the laws of the
Commonwealth of Massachusetts, and is duly registered as a bank
holding company under the Bank Holding Company Act of 1956, as
amended. Company has full corporate power and authority to carry
on its business as now conducted. Company is duly licensed or
qualified to do business in the Commonwealth of Massachusetts
and foreign jurisdictions where its ownership or leasing of
property or the conduct of its business requires such
qualification.
Β
(b)Β Company Bank is a Massachusetts-chartered trust company
duly organized, validly existing and in good standing under the
laws of Massachusetts. Company Bankβs deposits are insured
by the FDIC in the manner and to the full extent provided by
applicable law, and all premiums and assessments required to be
paid in connection therewith have been paid by Company Bank when
due.
Β
SectionΒ 3.03Β Β Capital
Stock.Β Β The authorized capital stock of
Company consists solely of not less than 5,000,000Β shares
of Company Common Stock, of which (i)Β 4,062,353Β shares
are outstanding as of the date hereof,
(ii)Β 164,274Β shares are held in treasury,
(iii)Β no shares are held by Company Subsidiaries, and
(iv)Β 227,690Β shares are reserved for future issuance
pursuant to outstanding Options granted under the Company Option
Plan. The outstanding shares of Company Common Stock have been
duly authorized and validly issued and are fully paid and
non-assessable. Company Disclosure ScheduleΒ 3.03
sets forth a true and complete list of all outstanding Options
under the Company Option Plan, the name of each holder thereof,
the number of shares purchasable or acquirable thereunder or
upon conversion or exchange thereof and (if any) the per share
exercise or conversion price or exchange rate of each Option.
There are no options, warrants or other similar rights,
convertible or exchangeable securities, βphantom
stockβ rights, stock appreciation rights, stock based
performance units, agreements, arrangements, commitments or
understandings to which Company is a party, whether or not in
writing, of any character relating to the issued or unissued
capital stock or other securities of Company or any of
Companyβs Subsidiaries or obligating Company or any of
Companyβs Subsidiaries to issue (whether upon conversion,
exchange or otherwise) or sell any share of capital stock of, or
other equity interests in or other securities of, Company or any
of Companyβs Subsidiaries other than those listed in
Company Disclosure ScheduleΒ 3.03. All shares of
Company Common Stock subject to issuance as set forth in this
SectionΒ 3.03 or Company Disclosure
ScheduleΒ 3.03 shall, upon issuance on the terms and
conditions specified in the instruments pursuant to which they
are issuable, be duly authorized, validly issued, fully paid and
nonassessable. There are no obligations, contingent or
otherwise, of Company or any of Companyβs Subsidiaries to
repurchase, redeem or otherwise acquire any shares of Company
Common Stock or capital stock of any of Companyβs
Subsidiaries or any other securities of Company or any of
Companyβs Subsidiaries or to provide funds to or make any
investment (in the form of a loan, capital contribution or
otherwise) in any such Subsidiary or any other entity. All of
the outstanding shares of capital stock of each of
Companyβs Subsidiaries are duly authorized, validly issued,
fully paid and nonassessable and not subject to preemptive
rights, and all such shares are owned by Company or another
Subsidiary of Company free and clear of all security interests,
liens, claims, pledges, taking actions, agreements, limitations
in Companyβs voting rights, charges or other encumbrances
of any nature whatsoever, except as set forth in Company
Disclosure ScheduleΒ 3.03.
Β
SectionΒ 3.04Β Β Subsidiaries.
Β
(a)Β (i) Company Disclosure ScheduleΒ 3.04 sets
forth a complete and accurate list of all of Companyβs
Subsidiaries, including the jurisdiction of organization of each
such Subsidiary, (ii)Β except as set forth on Company
Disclosure ScheduleΒ 3.04, Company owns, directly or
indirectly, all of the issued and outstanding equity securities
of each Subsidiary, (iii)Β no equity securities of any of
Companyβs Subsidiaries are or may become required to be
issued (other than to Company) by reason of any contractual
right or otherwise, (iv)Β there are no contracts,
commitments, understandings or arrangements by which any of such
Subsidiaries is or may be bound to sell or otherwise transfer
any of its equity securities (other than to Company or a wholly-
A-7
Β
owned Subsidiary of Company), (v)Β there are no contracts,
commitments, understandings or arrangements relating to
Companyβs rights to vote or to dispose of such securities
and (vi)Β all of the equity securities of each such
Subsidiary held by Company, directly or indirectly, are validly
issued, fully paid and nonassessable, are not subject to
preemptive or similar rights and are owned by Company free and
clear of all Liens.
Β
(b)Β Except as set forth on Company Disclosure
ScheduleΒ 3.04 or Company Disclosure
ScheduleΒ 3.18, Company does not own (other than in a
bona fide fiduciary capacity or in satisfaction of a debt
previously contracted) 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.
Β
(c)Β Each of Companyβs Subsidiaries has been duly
organized and qualified and is in good standing under the laws
of the jurisdiction of its organization and is duly qualified to
do business and is 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. A complete and accurate
list of all such jurisdictions is set forth on Company
Disclosure ScheduleΒ 3.04.
Β
SectionΒ 3.05Β Β Corporate
Power; Minute Books.Β Β Company and each of 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 each of Company and Company Bank 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 Companyβs shareholders of this Agreement. The minute
books of Company and each of its Subsidiaries contain true,
complete and accurate records of all meetings and other
corporate actions held or taken by shareholders of Company and
each of its Subsidiaries and the Board of the Directors of
Company (including committees of Companyβs Board of
Directors) and each of its Subsidiaries.
Β
SectionΒ 3.06Β Β Corporate
Authority.Β Β Subject only to the approval of
this Agreement by the holders of at least two-thirds of the
outstanding shares of Company Common Stock (βRequisite
Company Shareholder Approvalβ), this Agreement and the
transactions contemplated hereby have been authorized by all
necessary corporate action of Company and Companyβs Board
of Directors on or prior to the date hereof. Companyβs
Board of Directors has directed that this Agreement be submitted
to Companyβs shareholders for approval at a meeting of such
shareholders and, except for the receipt of the Requisite
Company Shareholder Approval in accordance with the General Laws
of Massachusetts, Companyβs Articles of Incorporation and
Bylaws, no other vote of the shareholders of Company is required
by law, the Articles of Incorporation of Company, the Bylaws of
Company or otherwise to approve this Agreement and the
transactions contemplated hereby. Company and Company Bank each
has duly executed and delivered this Agreement and, assuming due
authorization, execution and delivery by Buyer, this Agreement
is a valid and legally binding obligation of Company and Company
Bank, 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
creditorsβ rights or by general equity principles).
Β
SectionΒ 3.07Β Β Regulatory
Approvals; No Defaults.
Β
(a)Β 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 Company or
any of its Subsidiaries in connection with the execution,
delivery or performance by Company of this Agreement or to
consummate the transactions contemplated hereby, except for
(i)Β filings of applications or notices with, and consents,
approvals or waivers by the FRB, the FDIC, the Massachusetts
Division of Banks and the Massachusetts Board of Bank
Incorporation, (ii)Β the filing and effectiveness of the
Registration Statement with the SEC, (iii)Β the approval of
this Agreement by the holders of two-thirds of the outstanding
shares of Company Common Stock; and (iv)Β the approval of
the Plan of Bank Merger by a majority of the outstanding shares
of Company Bankβs common stock. As of the date hereof,
Company is not aware of any reason why the approvals set forth
above and referred to in SectionΒ 6.01(b) will not be
received in a timely manner.
Β
(b)Β Subject to receipt, or the making, of the consents,
approvals, waivers and filings referred to in SectionΒ 3.06
and the immediately preceding paragraph, and the expiration of
related waiting periods, the
A-8
Β
execution, delivery and performance of this Agreement by Company
and Company Bank, as applicable, and the consummation of the
transactions contemplated hereby do not and will not
(i)Β constitute a breach or violation of, or a default
under, the Articles of Incorporation or Bylaws (or similar
governing documents) of Company or Company Bank,
(ii)Β violate any statute, code, ordinance, rule,
regulation, judgment, order, writ, decree or injunction
applicable to Company or Company Bank, or any of its properties
or assets, or (iii)Β violate, conflict with, result in a
breach of any provision of or the loss of any benefit under,
constitute a default (or an event which, with notice or lapse of
time, or both, would constitute a default) under, result in the
termination of or a right of termination or cancellation under,
accelerate the performance required by, or result in the
creation of any Lien upon any of the properties or assets of
Company or Company Bank under, any of the terms, conditions or
provisions of any note, bond, mortgage, indenture, deed of
trust, license, lease, contract, agreement or other instrument
or obligation to which Company or Company Bank is a party, or by
which it or any of its properties or assets may be bound or
affected.
Β
SectionΒ 3.08Β Β SEC
Documents; Financial Reports; and Regulatory Reports.
Β
(a)Β Companyβs Annual Report on
FormΒ 10-K,
as amended through the date hereof, for the fiscal year ended
DecemberΒ 31, 2006 (the βCompany 2006
FormΒ 10-Kβ),
and all other reports, registration statements, definitive proxy
statements or information statements required to be filed by
Company or any of its Subsidiaries subsequent to
DecemberΒ 31, 2001 under the Securities Act of 1933, as
amended (the βSecurities Actβ), or under
SectionsΒ 13(a), 13(c), 14 and 15(d) of the Securities
Exchange Act of 1934, as amended (the βExchange Actβ)
(collectively, the βCompany SEC Documentsβ), with the
SEC, and each of the Company SEC Documents filed with the SEC
after the date hereof, in the form filed or to be filed,
(i)Β complied or will comply in all respects as to form with
the applicable requirements under the Securities Act or the
Exchange Act, as the case may be, and (ii)Β as of the date
on which such Company SEC Document was filed or will be filed
with the SEC, 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 made
therein, in light of the circumstances under which they were
made, not misleading; and each of the balance sheets contained
in or incorporated by reference into any such Company SEC
Document (including the related notes and schedules thereto)
fairly presents and will fairly present the financial position
of the entity or entities to which such balance sheet relates as
of its date, and each of the statements of income and changes in
shareholdersβ equity and cash flows or equivalent
statements in such Company SEC Documents (including any related
notes and schedules thereto) fairly presents and will fairly
present the results of operations, changes in shareholdersβ
equity and changes in cash flows, as the case may be, of the
entity or entities to which such statement relates for the
periods to which it relates, in each case in accordance with
GAAP consistently applied during the periods involved, except in
each case as may be noted therein, subject to normal year-end
audit adjustments in the case of unaudited statements. Except
for those liabilities that are fully reflected or reserved
against in the most recent consolidated balance sheet of Company
and its Subsidiaries (the βCompany Balance Sheetβ)
contained in Companyβs
FormΒ 10-Q
for the quarterly period ended JuneΒ 30, 2007 and, except
for liabilities reflected in Company SEC Documents filed prior
to the date hereof or incurred in the ordinary course of
business consistent with past practices or in connection with
this Agreement, since JuneΒ 30, 2007 (the βCompany
Balance Sheet Dateβ), neither Company nor any of its
Subsidiaries has any liabilities or obligations of any nature
(whether accrued, absolute, contingent or otherwise) required by
GAAP to be set forth on its consolidated balance sheet or in the
notes thereto.
Β
(b)Β Except as set forth on Company Disclosure
ScheduleΒ 3.08(b), Company and each of its Subsidiaries,
officers and directors are in compliance with, and have
complied, with (1)Β the applicable provisions of the
Xxxxxxxx-Xxxxx Act of 2002 (βXxxxxxxx-Xxxxxβ) and the
related rules and regulations promulgated under such act and the
Exchange Act and (2)Β the applicable listing and corporate
governance rules and regulations of The NASDAQ Stock Market. The
Company (i)Β has established and maintained disclosure
controls and procedures and internal control over financial
reporting (as such terms are defined in paragraphs (3)Β and
(f), respectively, of
RuleΒ 13a-15
under the Exchange Act) as required by
RuleΒ 13a-15
under the Exchange Act, and (ii)Β has disclosed based on its
most recent evaluations, to its outside auditors and the audit
committee of Companyβs Board of Directors (A)Β all
significant deficiencies and material weaknesses in the design
or operation of internal control over financial reporting (as
defined in
RuleΒ 13a-15(f)
of the Exchange Act) which are
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Β
reasonably likely to adversely affect Companyβs ability to
record, process, summarize and report financial data and
(B)Β any fraud, whether or not material, that involves
management or other employees who have a significant role in
Companyβs internal control over financial reporting. Since
JanuaryΒ 1, 2004, Company has disclosed any material
weakness (as defined by applicable rules under the Exchange Act)
in its internal control over financial reporting and its
conclusions regarding the effectiveness of its disclosure
controls and procedures to the extent and in the manner required
to be disclosed in the reports that Company files or submits
under the Exchange Act.
Β
(c)Β Except as set forth in Company Disclosure
ScheduleΒ 3.08(c), since DecemberΒ 31, 2001, Company
and its Subsidiaries have duly filed with the FRB, the FDIC, the
Massachusetts Division of Banks and any other applicable
Governmental Authority, in correct form the reports required to
be filed under applicable laws and regulations and such reports
were in all respects complete and accurate and in compliance
with the requirements of applicable laws and regulations.
Β
SectionΒ 3.09Β Β Absence
of Certain Changes or Events.Β Β Except as
disclosed in the Company SEC Documents filed prior to the date
hereof or in Company Disclosure ScheduleΒ 3.09, or as
otherwise expressly permitted or expressly contemplated by this
Agreement, since Company Balance Sheet Date, there has not been
(i)Β any change or development in the business, operations,
assets, liabilities, condition (financial or otherwise), results
of operations, cash flows or properties of Company or any of its
Subsidiaries which has had, or would reasonably be expected to
have, individually or in the aggregate, a Material Adverse
Effect with respect to Company, and to the Knowledge of Company,
no fact or condition exists which is reasonably likely to cause
a Material Adverse Effect with respect to Company in the future,
(ii)Β any change by 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 Companyβs independent
accountants, (iii)Β any entry by Company or any of its
Subsidiaries into any contract or commitment of (A)Β more
than $100,000 or (B)Β $50,000 per annum with a term of more
than one year, other than loans and loan commitments in the
ordinary course of business, (iv)Β any declaration, setting
aside or payment of any dividend or distribution in respect of
any capital stock of Company or any of its Subsidiaries or any
redemption, purchase or other acquisition of any of its
securities, other than in the ordinary course of business
consistent with past practice, (v)Β 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 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 action not in the ordinary
course of business with respect to the compensation or
employment of directors, officers or employees of Company or any
of its Subsidiaries, (vi)Β any material election made by
Company or any of its Subsidiaries for federal or state income
tax purposes, (vii)Β any material change in the credit
policies or procedures of Company or any of its Subsidiaries,
the effect of which was or is to make any such policy or
procedure less restrictive in any respect, (viii)Β any
material acquisition or disposition of any assets or properties,
or any contract for any such acquisition or disposition entered
into other than loans and loan commitments, or (ix)Β any
material 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.
Β
SectionΒ 3.10Β Β Legal
Proceedings.
Β
(a)Β Other than as set forth in Company Disclosure
ScheduleΒ 3.10, there are no civil, criminal,
administrative or regulatory actions, suits, demand letters,
demands for indemnification, claims, hearings, notices of
violation, arbitrations, investigations, orders to show cause,
market conduct examinations, notices of non-compliance or other
proceedings of any nature pending or, to Companyβs
Knowledge, threatened against Company or any of its Subsidiaries.
Β
(b)Β Neither Company nor any of its Subsidiaries is a party
to any, nor are there any pending or, to Companyβs
Knowledge, threatened, civil, criminal, administrative or
regulatory actions, suits, demand letters,
A-10
Β
claims, hearings, notices of violation, arbitrations,
investigations, orders to show cause, market conduct
examinations, notices of non-compliance or other proceedings of
any nature against Company or any of its Subsidiaries in which,
to Companyβs Knowledge, there is a reasonable probability
of any material recovery against or other Material Adverse
Effect on Company or which challenges the validity or propriety
of the transactions contemplated by this Agreement.
Β
(c)Β There is no injunction, order, judgment or decree
imposed upon Company or any of its Subsidiaries, or the assets
of Company or any of its Subsidiaries, and neither Company nor
any of its Subsidiaries has been advised of, or is aware of, the
threat of any such action.
Β
SectionΒ 3.11Β Β Compliance
With Laws.
Β
(a)Β Other than as set forth in Company Disclosure
ScheduleΒ 3.11, Company and each of its Subsidiaries is
and since DecemberΒ 31, 2003 has been in 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, as amended, the Fair Housing Act, as amended,
the Community Reinvestment Act, the Home Mortgage Disclosure
Act, the Bank Secrecy Act of 1970, as amended, the USA Patriot
Act and all other applicable fair lending and fair housing laws
or other laws relating to discrimination;
Β
(b)Β Company and each of its Subsidiaries has all permits,
licenses, authorizations, orders and approvals of, and have made
all filings, applications and registrations with, all
Governmental Authorities that are required in order to permit it
to own or lease their properties and to conduct their business
as presently conducted; all such permits, licenses, certificates
of authority, orders and approvals are in full force and effect
and, to Companyβs Knowledge, no suspension or cancellation
of any of them is threatened;Β and
Β
(c)Β Other than as set forth in Company Disclosure
ScheduleΒ 3.11, neither Company nor any of its
Subsidiaries has received, since DecemberΒ 31, 2004,
notification or communication from any Governmental Authority
(i)Β asserting that it is not in compliance with any of the
statutes, regulations or ordinances which such Governmental
Authority enforces or (ii)Β threatening to revoke any
license, franchise, permit or governmental authorization (nor,
to Companyβs Knowledge, do any grounds for any of the
foregoing exist).
Β
SectionΒ 3.12Β Β Material
Contracts; Defaults.
Β
(a)Β Other than as set forth in Company Disclosure
ScheduleΒ 3.12, neither 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)Β with respect to the
employment of any directors, officers, employees or consultants,
(ii)Β which would entitle any present or former director,
officer, employee or agent of Company or any of its Subsidiaries
to indemnification from Company or any of its Subsidiaries,
(iii)Β the benefits of which will be increased, or the
vesting of benefits of which will be accelerated, by the
occurrence of any of the transactions contemplated by this
Agreement, or the value of any of the benefits of which will be
calculated on the basis of any of the transactions contemplated
by this Agreement, (iv)Β which grants any right of first
refusal, right of first offer or similar right with respect to
any material assets or properties of Company and or
Subsidiaries; (v)Β which provides for payments to be made by
Company or any of its Subsidiaries upon a change in control
thereof; (vi)Β which provides for the lease of personal
property having a value in excess of $25,000 individually or
$100,000 in the aggregate; (vii)Β which relates to capital
expenditures and involves future payments in excess of $10,000
individually or $50,000 in the aggregate; (viii)Β which
relates to the disposition or acquisition of assets or any
interest in any business enterprise outside the ordinary course
of Companyβs business; (ix)Β which is not terminable on
sixty (60)Β days or less notice and involving the payment of
more than $25,000 per annum; or (x)Β which materially
restricts the conduct of any business by Company of any of its
Subsidiaries (collectively, βMaterial Contractsβ).
Company has previously delivered to Buyer or Buyer Bank true,
complete and correct copies of each such document.
Β
(b)Β Neither Company nor any of its Subsidiaries is in
default under any contract, agreement, commitment, arrangement,
lease, insurance policy or other instrument to which it is a
party, by which its assets, business, or operations may be bound
or affected, or under which it or its 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
A-11
Β
constitute such a default. No power of attorney or similar
authorization given directly or indirectly by Company is
currently outstanding.
Β
SectionΒ 3.13Β Β Brokers.Β Β Neither
Company nor any of its officers or directors has employed any
broker or finder or incurred any liability for any brokerβs
fees, commissions or finderβs fees in connection with any
of the transactions contemplated by this Agreement, except that
Company has engaged, and will pay a fee or commission to, Xxxxx,
XxxxxxxxΒ & Xxxxx, Inc. in accordance with the terms of
a letter agreement between Xxxxx, XxxxxxxxΒ & Xxxxx,
Inc. and Company, a true, complete and correct copy of which has
been previously delivered by Company to Buyer or Buyer Bank.
Β
SectionΒ 3.14Β Β Employee
Benefit Plans.
Β
(a)Β All benefit and compensation plans, contracts, policies
or arrangements covering current or former employees of Company
or any of its Subsidiaries (the βCompany Employeesβ)
and current or former directors of Company or any of its
Subsidiaries including, but not limited to, βemployee
benefit plansβ within the meaning of SectionΒ 3(3) of
ERISA, and deferred compensation, stock option, stock purchase,
stock appreciation rights, stock based, incentive and bonus
plans (the βCompany Benefit Plansβ), are identified in
Company Disclosure ScheduleΒ 3.14. True and complete
copies of all Company Benefit Plans including, but not limited
to, any trust instruments and insurance contracts forming a part
of any Company Benefit Plans and all amendments thereto, have
been made available to Buyer or Buyer Bank.
Β
(b)Β All Company Benefit Plans other than
βmultiemployer plansβ within the meaning of
SectionΒ 3(37) of ERISA, covering Company Employees, to the
extent subject to ERISA, are in substantial compliance with
ERISA. Each Company Benefit Plan which is an βemployee
pension benefit planβ within the meaning of
SectionΒ 3(2) of ERISA (a βCompany Pension Planβ)
and which is intended to be qualified under SectionΒ 401(a)
of the Code, has received a favorable determination letter from
the IRS, and Company is not aware of any circumstance that could
reasonably be expected to result in revocation of any such
favorable determination letter or the loss of the qualification
of such Company Pension Plan under SectionΒ 401(a) of the
Code. There is no pending or, to Companyβs Knowledge,
threatened litigation relating to the Company Benefit Plans.
Other than as set forth in Company Disclosure
ScheduleΒ 3.14, neither Company nor any of its
Subsidiaries has engaged in a transaction with respect to any
Company Benefit Plan or Company Pension Plan that, assuming the
taxable period of such transaction expired as of the date
hereof, could subject Company or any of its Subsidiaries to a
tax or penalty imposed by either SectionΒ 4975 of the Code
or SectionΒ 502(i) of ERISA.
Β
(c)Β No liability under Subtitle C or D of TitleΒ IV of
ERISA has been or is expected to be incurred by Company or any
of its Subsidiaries with respect to any ongoing, frozen or
terminated βsingle employer plan,β within the meaning
of SectionΒ 4001(a)(15) of ERISA, currently or formerly
maintained by Company, any of its Subsidiaries or any entity
which is considered one employer with Company or any of its
Subsidiaries under SectionΒ 4001 of ERISA or
SectionΒ 414 of the Code (an βERISA Affiliateβ).
None of Company or any ERISA Affiliate has contributed to (or
been obligated to contribute to) a βmultiemployer
planβ within the meaning of SectionΒ 3(37) of ERISA at
any time during the six-year period ending on the Closing Date,
and neither Company nor any of its Subsidiaries has incurred,
and does not expect to incur, any withdrawal liability with
respect to a multiemployer plan under Subtitle E of
TitleΒ IV of ERISA (regardless of whether based on
contributions of an ERISA Affiliate). No notice of a
βreportable event,β within the meaning of
SectionΒ 4043 of ERISA for which the
30-day
reporting requirement has not been waived, has been required to
be filed for any Company Pension Plan or by any ERISA Affiliate
within the 12Β month period ending on the date hereof or
will be required to be filed in connection with the transactions
contemplated by this Agreement.
Β
(d)Β All contributions required to be made with respect to
all Company Benefit Plans have been timely made or have been
reflected on the financial statements of Company. No Company
Pension Plan or single-employer plan of an ERISA Affiliate has
an βaccumulated funding deficiencyβ (whether or not
waived) within the meaning of SectionΒ 412 of the Code or
SectionΒ 302 of ERISA and no ERISA Affiliate has an
outstanding funding waiver.
Β
(e)Β Other than as set forth in Company Disclosure
ScheduleΒ 3.14, neither Company nor any of its Subsidiaries
has any obligations for retiree health and life benefits under
any Company Benefit Plan, other
A-12
Β
than coverage as may be required under SectionΒ 4980B of the
Code or PartΒ 6 of TitleΒ I of ERISA, or under the
continuation of coverage provisions of the laws of any state or
locality. Company may amend or terminate any such Company
Benefit Plan at any time without incurring any liability
thereunder.
Β
(f)Β Other than as set forth in Company Disclosure
ScheduleΒ 3.14, the execution of this Agreement,
shareholder approval of this Agreement or consummation of any of
the transactions contemplated by this Agreement will not
(i)Β entitle any Company Employee to severance pay or any
increase in severance pay upon any termination of employment
after the date hereof, (ii)Β 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 Company Benefit Plans, (iii)Β result
in any breach or violation of, or a default under, any of the
Company Benefit Plans, (iv)Β result in any payment that
would be a βparachute paymentβ to a βdisqualified
individualβ as those terms are defined in SectionΒ 280G
of the Code, without regard to whether such payment is
reasonable compensation for personal services performed or to be
performed in the future, (v)Β limit or restrict the right of
Company or Company Bank or, after the consummation of the
transactions contemplated hereby, Buyer or any of its
Subsidiaries, to merge, amend or terminate any of the Company
Benefit Plans, or (vi)Β result in payments under any of the
Company Benefit Plans which would not be deductible under
SectionΒ 162(m) or SectionΒ 280G of the Code.
Β
(g)Β Company Disclosure ScheduleΒ 3.14 includes
the Severance Pay Plan of Xxxxxβx Ferry TrustΒ Company
in effect as of the date of this Agreement and provides a true
and correct schedule of the severance payments that would be due
to each employee who would be eligible to receive severance
benefits thereunder upon termination of employment after the
Effective Time, assuming for this purpose that the Effective
Time occurs after JanuaryΒ 31, 2008. Company Disclosure
ScheduleΒ 3.14 sets forth a true and correct copy of the
interpretation of the Severance Pay Plan that the Plan
Administrator of the Severance Pay Plan adopted on or before the
date of this Agreement.
Β
(h)Β Each Company Benefit Plan that is a deferred
compensation plan is in substantial compliance with
SectionΒ 409A of the Code, to the extent applicable. All
elections made with respect to compensation deferred under an
arrangement subject to SectionΒ 409A of the Code have been
made in accordance with the requirements of
SectionΒ 409(a)(4) of the Code, to the extent applicable.
Neither Company nor any of its Subsidiaries (i)Β has taken
any action, or has failed to take any action, that has resulted
or could reasonably be expected to result in the interest and
tax penalties specified in SectionΒ 409A(a)(1)(B) of the
Code being owed by any participant in a Company Benefit Plan or
(ii)Β has agreed to reimburse or indemnify any participant
in a Company Benefit Plan for any of the interest and the
penalties specified in SectionΒ 409A(a)(1)(B) of the Code
that may be currently due or triggered in the future.
Β
(i)Β Company Disclosure ScheduleΒ 3.14 contains a
schedule showing the present value of the monetary amounts
payable as of the date specified in such schedule, whether
individually or in the aggregate (including good faith estimates
of all amounts not subject to precise quantification as of the
date of this Agreement, such as tax indemnification payments in
respect of income or excise taxes), under any employment,
change-in-control,
severance or similar contract, plan or arrangement with or which
covers any present or former director, officer or employee of
Company or any of its Subsidiaries who may be entitled to any
such amount and identifying the types and estimated amounts of
the in-kind benefits due under any Company Benefit Plans (other
than a plan qualified under SectionΒ 401(a) of the Code) for
each such person, specifying the assumptions in such schedule.
Β
SectionΒ 3.15Β Β Labor
Matters.Β Β Neither Company nor any of its
Subsidiaries is a party to or bound by any collective bargaining
agreement, contract or other agreement or understanding with a
labor union or labor organization, nor is there any proceeding
pending or, to Companyβs Knowledge threatened, asserting
that Company or any of its Subsidiaries has committed an unfair
labor practice (within the meaning of the National Labor
Relations Act, as amended) or seeking to compel 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 pending or, to Companyβs
Knowledge, threatened, nor is Company aware of any activity
involving its employees seeking to certify a collective
bargaining unit or engaging in other organizational activity.
A-13
Β
SectionΒ 3.16Β Β Environmental
Matters.
Β
(a)Β Other than as set forth in Company Disclosure
ScheduleΒ 3.16, to Companyβs Knowledge, no real
property (including buildings or other structures) currently or
formerly owned or operated by Company or any of its
Subsidiaries, or any property in which Company or any of its
Subsidiaries has held a security interest, Lien or a fiduciary
or management role (βCompany Loan Propertyβ), has been
contaminated with, or has had any release of, any Hazardous
Substance in a manner that violates Environmental Law.
Company Disclosure ScheduleΒ 3.16 lists each ASTM
1527-05
Phase I environmental assessment (βPhase I
Assessmentβ) and PhaseΒ II environmental assessment
(βPhaseΒ II Assessmentβ and, together with the
Phase I Assessments, the βEnvironmental Assessmentsβ)
which, to Companyβs Knowledge, have been conducted on the
properties listed on Company Disclosure
ScheduleΒ 3.28, copies of which Environmental
Assessments have previously been delivered to Buyer.
Β
(b)Β Except as disclosed on Company Disclosure
ScheduleΒ 3.16, Company and each of its Subsidiaries is
in compliance with applicable Environmental Law.
Β
(c)Β Neither Company nor any of its Subsidiaries could be
deemed the owner or operator of, or to have participated in the
management of, any Company Loan Property which has been
contaminated with, or has had any release of, any Hazardous
Substance in a manner that violates Environmental Law.
Β
(d)Β Neither Company nor any of its Subsidiaries has any
liability for Hazardous Substance disposal or contamination on
any third party property which are in amounts or under
conditions that require remediation or removal under applicable
Environmental Law.
Β
(e)Β Neither Company nor any of its Subsidiaries has
received (i)Β any written notice, demand letter, or claim
alleging any violation of, or liability under, any Environmental
Law or (ii)Β to Companyβs Knowledge, any written
request for information reasonably indicating an investigation
or other inquiry by any Government Authority concerning a
possible violation of, or liability under, any Environmental Law.
Β
(f)Β Neither Company nor any of its Subsidiaries is, or has
been, subject to any order, decree or injunction relating to a
violation of any Environmental Law.
Β
(g)Β Except as disclosed on Company Disclosure
ScheduleΒ 3.16, to Companyβs 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 Company, any of
its Subsidiaries, any currently or formerly owned or operated
property, or any Company Loan Property, that could reasonably be
expected pursuant to applicable Environmental Law to
(i)Β result in any claim, liability or investigation against
Company or any of its Subsidiaries, (ii)Β result in any
restriction on the ownership, use, or transfer of any property,
or (iii)Β adversely affect the value of any Company Loan
Property.
Β
(h)Β Company has delivered to Buyer copies of all
environmental reports, studies, sampling data, correspondence,
filings and other information in its possession or reasonably
available to it relating to environmental conditions at or on
any real property (including buildings or other structures)
currently or formerly owned or operated by Company or any of its
Subsidiaries or any Company Loan Property.
Β
(i)Β There is no litigation pending or, to the Knowledge of
Company, threatened against Company or any of its Subsidiaries,
or affecting any property now or formerly owned or used by
Company or any of its Subsidiaries, or affecting any Company
Loan Property, before any court, or Governmental Authority
(i)Β for alleged noncompliance (including by any
predecessor) with any Environmental Law or (ii)Β relating to
the release into the environment of any Hazardous Substance,
whether or not occurring at, on or involving a Company Loan
Property.
Β
(j)Β Except as disclosed on Company Disclosure
ScheduleΒ 3.16, to Companyβs Knowledge, there are
no underground storage tanks on, in or under any property
currently owned or operated by Company or any of its
Subsidiaries, or any Company Loan Property and, to the Knowledge
of Company, no underground storage tank has been closed or
removed from any Company Loan Property except in compliance with
Environmental Law.
A-14
Β
SectionΒ 3.17Β Β Tax
Matters.
Β
(a)Β Company and each of its Subsidiaries has filed all Tax
Returns that it was required to file under applicable laws and
regulations, other than Tax Returns that are not yet due or for
which a request for extension was filed consistent with
requirements of applicable law or regulation. 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. Except as set forth in Company
Disclosure ScheduleΒ 3.17, Taxes due and owing by
Company or any of its Subsidiaries (whether or not shown on any
Tax Return) have been paid other than Taxes that have been
reserved or accrued on the balance sheet of Company and which
Company is contesting in good faith. Company is not the
beneficiary of any extension of time within which to file any
Tax Return, and neither Company nor any of its Subsidiaries
currently has any open tax years. No claim has ever been made by
an authority in a jurisdiction where Company 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 Company or any of
its Subsidiaries.
Β
(b)Β Company 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,
shareholder, or other third party.
Β
(c)Β No foreign, federal, state, or local tax audits or
administrative or judicial Tax proceedings are being conducted
or to the Knowledge of Company are pending with respect to
Company. Company has not received from any foreign, federal,
state, or local taxing authority (including jurisdictions where
Company has not filed Tax Returns) any (i)Β notice
indicating an intent to open an audit or other review,
(ii)Β request for information related to Tax matters, or
(iii)Β notice of deficiency or proposed adjustment for any
amount of Tax proposed, asserted, or assessed by any taxing
authority against Company.
Β
(d)Β Company has provided Buyer or Buyer Bank with true and
complete copies of the United States federal, state, local, and
foreign income Tax Returns filed with respect to Company for
taxable periods ended DecemberΒ 31, 2006, 2005 and 2004.
Company has delivered to Buyer or Buyer Bank correct and
complete copies of all examination reports, and statements of
deficiencies assessed against or agreed to by any of Company
filed for the years ended DecemberΒ 31, 2006, 2005 and 2004.
Company has timely and properly taken such actions in response
to and in compliance with notices Company has received from the
IRS in respect of information reporting and backup and
nonresident withholding as are required by law.
Β
(e)Β Company has not waived any statute of limitations in
respect of Taxes or agreed to any extension of time with respect
to a Tax assessment or deficiency.
Β
(f)Β Company has not been a United States real property
holding corporation within the meaning of Code
SectionΒ 897(c)(2) during the applicable period specified in
Code SectionΒ 897(c)(1)(A)(ii). Company 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 SectionΒ 6662. Company
is not a party to or bound by any Tax allocation or sharing
agreement. Company (i)Β has not been a member of an
affiliated group filing a consolidated federal income Tax Return
(other than a group the common parent of which was Company), and
(ii)Β has no liability for the Taxes of any individual,
bank, corporation, partnership, association, joint stock
company, business trust, limited liability company, or
unincorporated organization (other than Company) under Reg.
SectionΒ 1.1502-6
(or any similar provision of state, local, or foreign law), as a
transferee or successor, by contract, or otherwise.
Β
(g)Β The unpaid Taxes of Company (i)Β did not, as of the
end of the most recent period covered by Companyβs call
reports 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 Companyβs call reports filed on or prior to the
date hereof (rather than in any notes thereto), and (ii)Β 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 Company in filing its Tax Returns. Since the end of
the most recent period covered by Companyβs call reports
filed prior to the date hereof, Company has not incurred any
liability for Taxes arising from extraordinary gains or losses,
as that term is used in GAAP, outside the ordinary course of
business consistent with past custom and practice.
A-15
Β
(h)Β Company shall not 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: (i)Β change in method of
accounting for a taxable period ending on or prior to the
Closing Date; (ii)Β βclosing agreementβ as
described in Code SectionΒ 7121 (or any corresponding or
similar provision of state, local or foreign income Tax law)
executed on or prior to the Closing Date;
(iii)Β intercompany transactions or any excess loss account
described in Treasury Regulations under Code SectionΒ 1502
(or any corresponding or similar provision of state, local or
foreign income Tax law); (iv)Β installment sale or open
transaction disposition made on or prior to the Closing Date; or
(v)Β prepaid amount received on or prior to the Closing Date.
Β
(i)Β Company has not distributed stock of another Person or
had its stock distributed by another Person in a transaction
that was purported or intended to be governed in whole or in
part by SectionΒ 355 or SectionΒ 361 of the Code.
Β
SectionΒ 3.18Β Β Investment
Securities.Β Β Company Disclosure
ScheduleΒ 3.18 sets forth as of SeptemberΒ 30, 2007
the investment securities, mortgage backed securities and
securities held for sale of Company, as well as, with respect to
such securities, descriptions thereof, CUSIP numbers, book
values, fair values and coupon rates.
Β
SectionΒ 3.19Β Β Derivative
Transactions.
Β
(a)Β All Derivative Transactions entered into by Company or
any of its Subsidiaries or for the account of any of its
customers were entered into in accordance with applicable laws,
rules, regulations and regulatory policies of any Governmental
Authority, and in accordance with the investment, securities,
commodities, risk management and other policies, practices and
procedures employed by Company or any of its Subsidiaries, and
were entered into with counterparties believed at the time to be
financially responsible and able to understand (either alone or
in consultation with its advisers) and to bear the risks of such
Derivative Transactions. Company and each of its Subsidiaries
have duly performed all of their obligations under the
Derivative Transactions to the extent that such obligations to
perform have accrued, and, to the Knowledge of Company, there
are no breaches, violations or defaults or allegations or
assertions of such by any party thereunder.
Β
(b)Β Except as set forth in Company Disclosure
ScheduleΒ 3.19, no Derivative Transaction, were it to be
a Loan held by Company, would be classified as βSpecial
Mention,β βSubstandard,β βDoubtful,β
βLoss,β βClassified,β
βCriticized,β βCredit Risk Assets,β
βConcerned Loans,β βWatch Listβ or words of
similar import. Each such Derivative Transaction is listed on
Company Disclosure ScheduleΒ 3.19, and the financial
position of Company under or with respect to each has been
reflected in the books and records of Company in accordance with
GAAP consistently applied and no open exposure of Company with
respect to any such instrument (or with respect to multiple
instruments with respect to any single counterparty) exceeds
$25,000.
Β
SectionΒ 3.20Β Β Regulatory
Capitalization.Β Β Company Bank is, and
immediately after the Effective Time will be, βwell
capitalized,β as such term is defined in the rules and
regulations promulgated by the FDIC. Company is, and immediately
prior to the Effective Time will be, βwell
capitalizedβ as such term is defined in the rules and
regulations promulgated by the FRB.
Β
SectionΒ 3.21Β Β Loans;
Nonperforming and Classified Assets.
Β
(a)Β Except as set forth in Company Disclosure
ScheduleΒ 3.21, as of the date hereof, neither Company
nor any of its Subsidiaries is a party to any written or oral
(i)Β loan, loan agreement, note or borrowing arrangement
(including, without limitation, leases, credit enhancements,
commitments, guarantees and interest-bearing assets)
(collectively, βLoansβ), under the terms of which the
obligor was, as of JuneΒ 30, 2007, over sixty (60)Β days
delinquent in payment of principal or interest or in default of
any other material provision, or (ii)Β Loan with any
director, Executive Officer or five percent or greater
shareholder of Company or any of its Subsidiaries, or to the
Knowledge of Company, any person, corporation or enterprise
controlling, controlled by or under common control with any of
the foregoing. Company Disclosure ScheduleΒ 3.21
identifies (x)Β each Loan that as of SeptemberΒ 30, 2007
was classified as βSpecial Mention,β
βSubstandard,β βDoubtful,β βLoss,β
βClassified,β βCriticized,β βCredit
Risk Assets,β βConcerned Loans,β βWatch
Listβ or words of similar import
A-16
Β
by Company, Company Bank or any bank examiner, together with the
principal amount of and accrued and unpaid interest on each such
Loan and the identity of the borrower thereunder, and
(y)Β each asset of Company that as of SeptemberΒ 30,
2007 was classified as other real estate owned
(βOREOβ) and the book value thereof as of the date of
this Agreement.
Β
(b)Β Each Loan (i)Β is evidenced by notes, agreements or
other evidences of indebtedness that are true, genuine and what
they purport to be, (ii)Β to the extent secured, has been
secured by valid Liens which have been perfected and
(iii)Β to the Knowledge of Company, is a legal, valid and
binding obligation of the obligor named therein, enforceable in
accordance with its terms, subject to bankruptcy, insolvency,
fraudulent conveyance and other laws of general applicability
relating to or affecting creditorsβ rights and to general
equity principles.
Β
(c)Β All currently outstanding Loans were solicited,
originated and, currently exist in material compliance with all
applicable requirements of Law and Company Bankβs lending
policies at the time of origination of such Loans, and the loan
documents with respect to each such Loan are complete and
correct. There are no oral modifications or amendments or
additional agreements related to the Loans that are not
reflected in the written records of Company Bank. Other than
loans pledged to the Federal Home Loan Bank of Boston, all such
Loans are owned by Company Bank free and clear of any Liens. No
claims of defense as to the enforcement of any Loan have been
asserted in writing against Company Bank for which there is a
reasonable possibility of an adverse determination, and each of
Company and Company Bank is aware of no acts or omissions which
would give rise to any claim or right of rescission, set-off,
counterclaim or defense for which there is a reasonable
possibility of an adverse determination to Company Bank. None of
the Loans are presently serviced by third parties, and there is
no obligation which could result in any Loan becoming subject to
any third party servicing.
Β
(d)Β Neither Company nor Company Bank is a party to any
agreement or arrangement with (or otherwise obligated to) any
Person which obligates Company to repurchase from any such
Person any Loan or other asset of Company or Company Bank.
Β
SectionΒ 3.22Β Β TrustΒ Business;
Administration of Fiduciary Accounts.Β Β Company
and Company Bank do not engage in any trust business, nor does
either administer or maintain accounts for which either acts as
fiduciary (other than individual retirement accounts and Xxxxx
accounts), including, but not limited to, accounts for which
either serves as a trustee, agent, custodian, personal
representative, guardian, conservator or investment advisor.
Β
SectionΒ 3.23Β Β Investment
Management and Related Activities.Β Β Except as
set forth on Company Disclosure ScheduleΒ 3.23, none
of Company, any of its Subsidiaries or Companyβs or its
Subsidiariesβ directors, officers or employees is required
to be registered, licensed or authorized under the laws or
regulations issued by any Governmental Authority as an
investment adviser, a broker or dealer, an insurance agency or
company, a commodity trading adviser, a commodity pool operator,
a futures commission merchant, an introducing broker, a
registered representative or associated person, investment
adviser, representative or solicitor, a counseling officer, an
insurance agent, a sales person or in any similar capacity with
a Governmental Authority.
Β
SectionΒ 3.24Β Β Repurchase
Agreements.Β Β With respect to all agreements
pursuant to which Company or any of its Subsidiaries has
purchased securities subject to an agreement to resell, if any,
Company or any of its Subsidiaries, as the case may be, has a
valid, perfected first lien or security interest in the
government securities or other collateral securing the
repurchase agreement, and, as of the date hereof, the value of
such collateral equals or exceeds the amount of the debt secured
thereby.
Β
SectionΒ 3.25Β Β Deposit
Insurance.Β Β The deposits of Company Bank are
insured by the FDIC in accordance with the Federal Deposit
Insurance Act (βFDIAβ) to the full extent permitted by
law, and each Subsidiary has paid all premiums and assessments
and filed all reports required by the FDIA. No proceedings for
the revocation or termination of such deposit insurance are
pending or, to the Knowledge of Company, threatened.
X-00
Β
XxxxxxxΒ 0.00Β Β XXX,
Xxxx-xxxxx Laundering and Customer Information
Security.Β Β Neither Company nor any of its
Subsidiaries is a party to any agreement with any individual or
group regarding Community Reinvestment Act matters and Company
is not aware of, and none of Company and its Subsidiaries has
been advised of, or has any reason to believe (because the
Company Bankβs Home Mortgage Disclosure Act data for the
year ended DecemberΒ 31, 2006, filed with the FDIC, or
otherwise) that any facts or circumstances exist, which would
cause Company Bank: (i)Β to be deemed not to be in
satisfactory compliance with the Community Reinvestment Act, and
the regulations promulgated thereunder, or to be assigned a
rating for Community Reinvestment Act purposes by federal or
state bank regulators of lower than βsatisfactoryβ; or
(ii)Β to be deemed to be operating in violation of the
federal Bank Secrecy Act, as amended, and its implementing
regulations (31Β C.F.R. PartΒ 103), the USA Patriot Act,
any order issued with respect to anti-money laundering by the
U.S.Β Department of the Treasuryβs Office of Foreign
Assets Control, or any other applicable anti-money laundering
statute, rule or regulation; or (iii)Β to be deemed not to
be in satisfactory compliance with the applicable privacy of
customer information requirements contained in any federal and
state privacy laws and regulations, including, without
limitation, in TitleΒ V of the Xxxxx-Xxxxx-Xxxxxx Act of
1999 and regulations promulgated thereunder, as well as the
provisions of the information security program adopted by
Company Bank pursuant to 12Β C.F.R. PartΒ 364.
Furthermore, the Board of Directors of Company Bank has adopted
and Company Bank has implemented an anti-money laundering
program that contains adequate and appropriate customer
identification verification procedures that has not been deemed
ineffective by any Governmental Authority and that meets the
requirements of SectionsΒ 352 and 326 of the USA Patriot Act.
Β
SectionΒ 3.27Β Β Transactions
with Affiliates.Β Β Except as set forth in
Company Disclosure ScheduleΒ 3.27, there are no
outstanding amounts payable to or receivable from, or advances
by Company or any of its Subsidiaries to, and neither Company
nor any of its Subsidiaries is otherwise a creditor or debtor
to, any director, Executive Officer or other Affiliate of
Company or any of its Subsidiaries, other than as part of the
normal and customary terms of such personsβ employment or
service as a director with Company or any of its Subsidiaries.
Except as set forth in Company Disclosure
ScheduleΒ 3.27, neither Company nor any of its
Subsidiaries is a party to any transaction or agreement with any
of its respective directors, Executive Officers or other
Affiliates. All agreements between Company and any of its
Affiliates comply, to the extent applicable, with
RegulationΒ W of the FRB.
Β
SectionΒ 3.28Β Β Tangible
Properties and Assets.
Β
(a)Β Company Disclosure ScheduleΒ 3.28 sets forth
a true, correct and complete list of all real property owned by
Company and each of its Subsidiaries. Except as set forth in
Company Disclosure ScheduleΒ 3.28, and except for
properties and assets disposed of in the ordinary course of
business or as permitted by this Agreement, Company or its
Subsidiary has good title to, valid leasehold interests in or
otherwise legally enforceable rights to use all of the real
property, personal property and other assets (tangible or
intangible), used, occupied and operated or held for use by it
in connection with its business as presently conducted in each
case, free and clear of any Lien, except for (i)Β statutory
Liens for amounts not yet delinquent and (ii)Β Liens
incurred in the ordinary course of business or imperfections of
title, easements and encumbrances, if any, that, individually
and in the aggregate, are not material in character, amount or
extent, and do not materially detract from the value and do not
materially interfere with the present use, occupancy or
operation of any material asset.
Β
(b)Β Company Disclosure ScheduleΒ 3.28 sets forth
a true, correct and complete schedule of all leases, subleases,
licenses and other agreements under which Company uses or
occupies or has the right to use or occupy, now or in the
future, real property (the βLeasesβ). Each of the
Leases is valid, binding and in full force and effect and, as of
the date hereof, neither Company nor any of its Subsidiaries has
received a written notice of, and otherwise has no Knowledge of
any, default or termination with respect to any Lease. There has
not occurred any event and no condition exists that would
constitute a termination event or a material breach by Company
or any of its Subsidiaries of, or material default by Company or
any of its Subsidiaries in, the performance of any covenant,
agreement or condition contained in any Lease, and to
Companyβs Knowledge, no lessor under a Lease is in material
breach or default in the performance of any material covenant,
agreement or condition contained in such Lease. Except as set
forth on Company Disclosure ScheduleΒ 3.28,
A-18
Β
there is no pending or, to Companyβs Knowledge, threatened
legal, administrative, arbitral or other proceeding, claim,
action or governmental or regulatory investigation of any nature
with respect to the real property that Company or any of its
Subsidiaries uses or occupies or has the right to use or occupy,
now or in the future, including without limitation a pending or
threatened taking of any of such real property by eminent
domain. Company and each of its Subsidiaries has paid all rents
and other charges to the extent due under the Leases.
Β
SectionΒ 3.29Β Β Intellectual
Property.Β Β Company Disclosure
ScheduleΒ 3.29 sets forth a true, complete and correct
list of all Company Intellectual Property. Company or its
Subsidiaries owns or has a valid license to use all Company
Intellectual Property, free and clear of all Liens, royalty or
other payment obligations (except for royalties or payments with
respect to off-the-shelf Software at standard commercial rates).
The Company Intellectual Property constitutes all of the
Intellectual Property necessary to carry on the business of
Company as currently conducted. The Company Intellectual
Property owned by Company, and to the Knowledge of Company, all
other Company Intellectual Property, is valid and enforceable
and has not been cancelled, forfeited, expired or abandoned, and
neither Company nor any of its Subsidiaries has received notice
challenging the validity or enforceability of Company
Intellectual Property. To the Knowledge of Company, the conduct
of the business of Company or any of its Subsidiaries does not
violate, misappropriate or infringe upon the intellectual
property rights of any third party. The consummation of the
transactions contemplated hereby will not result in the loss or
impairment of the right of Company or any of its Subsidiaries to
own or use any of Company Intellectual Property.
Β
SectionΒ 3.30Β Β Insurance.
Β
(a)Β Company Disclosure ScheduleΒ 3.30 identifies
all of the material insurance policies, binders, or bonds
currently maintained by Company and its Subsidiaries, other than
credit-life policies (the βInsurance Policiesβ),
including the insurer, policy numbers, amount of coverage,
effective and termination dates and any pending claims
thereunder involving more than $25,000. Company and each of its
Subsidiaries is insured with reputable insurers against such
risks and in such amounts as the management of Company
reasonably has determined to be prudent in accordance with
industry practices. All the Insurance Policies are in full force
and effect, and neither Company nor any of its Subsidiaries is
in material default thereunder and all claims thereunder have
been filed in due and timely fashion.
Β
(b)Β Company Disclosure ScheduleΒ 3.30 sets forth
a true, correct and complete description of all bank owned life
insurance (βBOLIβ) owned by Company or its
Subsidiaries, including the value of BOLI as of the end of the
month prior to the date hereof. The value of such BOLI is and
has been fairly and accurately reflected in the Company
Financial Statements in accordance with GAAP.
Β
SectionΒ 3.31Β Β Antitakeover
Provisions.Β Β No βcontrol share
acquisition,β βbusiness combination moratorium,β
βfair priceβ or other form of antitakeover statute or
regulation is applicable to this Agreement and the transactions
contemplated hereby.
Β
SectionΒ 3.32Β Β Fairness
Opinion.Β Β The Board of Directors of Company
has received the written opinion of Xxxxx, XxxxxxxxΒ &
Xxxxx, Inc. 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.
Β
SectionΒ 3.33Β Β Proxy
Statement-Prospectus.Β Β As of the date of the
Proxy Statement-Prospectus and the date of the meeting of the
shareholders of Company to which such Proxy Statement-Prospectus
relates, the Proxy Statement-Prospectus will not contain any
untrue statement of a material fact or omit to state a material
fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading;
provided, however, that information as of a later date shall be
deemed to modify information as of an earlier date; provided,
further, that no representation and warranty is made with
respect to information relating to Buyer or Buyer Bank included
in the Proxy Statement-Prospectus pursuant to SectionΒ 4.10
hereof.
Β
SectionΒ 3.34Β Β Transaction
Costs.Β Β Company Disclosure
ScheduleΒ 3.34 sets forth attorneysβ fees,
investment banking fees, accounting fees, and other costs or
fees that Company and its Subsidiaries have accrued through
SeptemberΒ 30, 2007, and to Companyβs Knowledge as of
this date, a reasonable good faith estimate of such costs and
fees that Company and its Subsidiaries expect to pay to retained
representatives in connection with the transactions contemplated
by this Agreement.
A-19
Β
SectionΒ 3.35Β Β Disclosure.Β Β The
representations and warranties contained in this
ArticleΒ III, 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 ArticleΒ III not misleading.
Β
ARTICLEΒ IV.
Β
REPRESENTATIONS
AND WARRANTIES OF BUYER
Β
SectionΒ 4.01Β Β Making
of Representations and Warranties.Β Β Except as
set forth in the Buyer Disclosure Schedule, Buyer and Buyer Bank
hereby represent and warrant, jointly and severally, to Company
that the statements contained in this ArticleΒ IV are
correct as of the date of this Agreement and will be correct as
of the Closing Date (as though made then and as though the
Closing Date were substituted for the date of this Agreement
throughout this ArticleΒ IV), except as to any
representation or warranty which specifically relates to an
earlier date, which only need be correct as of such earlier
date. No representation or warranty of Buyer contained in this
ArticleΒ IV shall be deemed untrue or incorrect, and Buyer
shall not be deemed to have breached a representation or
warranty, as a consequence of the existence of any fact,
circumstance or event unless such fact, circumstance or event,
individually or taken together with all other facts,
circumstances or events inconsistent with any section of this
ArticleΒ IV, has had or would reasonably be expected to have
a Material Adverse Effect; provided, however, that the foregoing
standard shall not apply to the representations and warranties
contained in SectionsΒ 4.02, 4.03 and 4.04, which shall be
deemed untrue, incorrect and breached if they are not true and
correct in all material respects.
Β
SectionΒ 4.02Β Β Organization,
Standing and Authority.Β Β Buyer is a
Massachusetts corporation duly organized, validly existing and
in good standing under the laws of the Commonwealth of
Massachusetts, and is duly registered as a bank holding company
under the Bank Holding Company Act of 1956, as amended. Buyer
has full corporate power and authority to carry on its business
as now conducted. Buyer is duly licensed or qualified to do
business in the Commonwealth of Massachusetts and foreign
jurisdictions where its ownership or leasing of property or the
conduct of its business requires such qualification. Buyer Bank
is a Massachusetts-chartered bank and trust company duly
organized, validly existing and in good standing under the laws
of the Commonwealth of Massachusetts. Buyer Bankβs deposits
are insured by the FDIC in the manner and to the full extent
provided by applicable law, and all premiums and assessments
required to be paid in connection therewith have been paid by
Buyer Bank when due. Buyer Bank is a member in good standing of
the FHLB.
Β
SectionΒ 4.03Β Β Corporate
Power; Minute Books.Β Β Buyer and Buyer Bank
have the corporate power and authority to carry on their
business as it is now being conducted and to own all their
properties and assets; and Buyer 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. The minute books of Buyer and Buyer
Bank contain true, complete and accurate records of all meetings
and other corporate actions held or taken by the shareholders of
Buyer and the Board of Directors of Buyer (including committees
of the Buyerβs Board of Directors).
Β
SectionΒ 4.04Β Β Corporate
Authority.Β Β This Agreement and the
transactions contemplated hereby have been authorized by all
necessary corporate action of Buyer on or prior to the date
hereof. Buyer has duly executed and delivered this Agreement
and, assuming due authorization, execution and delivery by
Company, this Agreement is a valid and legally binding
obligation of Buyer, 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 creditorsβ rights or by general equity
principles).
Β
SectionΒ 4.05Β Β SEC
Documents; Financial Reports; and Regulatory Reports.
Β
(a)Β Buyerβs Annual Report on
FormΒ 10-K,
as amended through the date hereof, for the fiscal year ended
DecemberΒ 31, 2006 (the βBuyer 2006
FormΒ 10-Kβ),
and all other reports, registration statements, definitive proxy
statements or information statements required to be filed by
Buyer or any of its Subsidiaries subsequent to DecemberΒ 31,
2001 under the Securities Act, or under SectionsΒ 13(a),
13(c), 14 and 15(d) of the Exchange
A-20
Β
Act (collectively, the βBuyer SEC Documentsβ), with
the SEC, and each of the Buyer SEC Documents filed with the SEC
after the date hereof, in the form filed or to be filed,
(i)Β complied or will comply in all respects as to form with
the applicable requirements under the Securities Act or the
Exchange Act, as the case may be, and (ii)Β as of the date
on which such Buyer SEC Document was filed or will be filed with
the SEC, 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 made therein,
in light of the circumstances under which they were made, not
misleading; and each of the balance sheets contained in or
incorporated by reference into any such Buyer SEC Document
(including the related notes and schedules thereto) fairly
presents and will fairly present the financial position of the
entity or entities to which such balance sheet relates as of its
date, and each of the statements of income and changes in
shareholdersβ equity and cash flows or equivalent
statements in such Buyer SEC Documents (including any related
notes and schedules thereto) fairly presents and will fairly
present the results of operations, changes in shareholdersβ
equity and changes in cash flows, as the case may be, of the
entity or entities to which such statement relates for the
periods to which it relates, in each case in accordance with
GAAP consistently applied during the periods involved, except in
each case as may be noted therein, subject to normal year-end
audit adjustments in the case of unaudited statements. Except
for those liabilities that are fully reflected or reserved
against in the most recent consolidated balance sheet of Buyer
and its Subsidiaries contained in Buyerβs
FormΒ 10-Q
for the quarterly period ended JuneΒ 30, 2007 and, except
for liabilities reflected in Buyer SEC Documents filed prior to
the date hereof or incurred in the ordinary course of business
consistent with past practices or in connection with this
Agreement, since JuneΒ 30, 2007, neither Buyer nor any of
its Subsidiaries has any liabilities or obligations of any
nature (whether accrued, absolute, contingent or otherwise)
required by GAAP to be set forth on its consolidated balance
sheet or in the notes thereto.
Β
(b)Β Buyer and each of its Subsidiaries, officers and
directors are in compliance with, and have complied, with
(1)Β the applicable provisions of Xxxxxxxx-Xxxxx and the
related rules and regulations promulgated under such act and the
Exchange Act and (2)Β the applicable listing and corporate
governance rules and regulations of Nasdaq. Buyer (i)Β has
established and maintained disclosure controls and procedures
and internal control over financial reporting (as such terms are
defined in paragraphs (3)Β and (f), respectively, of
RuleΒ 13a-15
under the Exchange Act) as required by
RuleΒ 13a-15
under the Exchange Act, and (ii)Β has disclosed based on its
most recent evaluations, to its outside auditors and the audit
committee of the Buyer Board (A)Β all significant
deficiencies and material weaknesses in the design or operation
of internal control over financial reporting (as defined in
RuleΒ 13a-15(f)
of the Exchange Act) which are reasonably likely to adversely
affect Buyerβs ability to record, process, summarize and
report financial data and (B)Β any fraud, whether or not
material, that involves management or other employees who have a
significant role in Buyerβs internal control over financial
reporting. Since JanuaryΒ 1, 2004, Buyer has disclosed any
material weakness (as defined by applicable rules under the
Exchange Act) in its internal controls over financial reporting
and its conclusions regarding the effectiveness of its
disclosure controls and procedures to the extent and in the
manner required to be disclosed in the reports that Buyer files
or submits under the Exchange Act.
Β
(c)Β Since DecemberΒ 31, 2001, Buyer and its
Subsidiaries have duly filed with the FRB, the FDIC, the
Massachusetts Division of Banks and any other applicable
Governmental Authority, in correct form the reports required to
be filed under applicable laws and regulations and such reports
were in all respects complete and accurate in compliance with
the requirements of applicable laws and regulations.
Β
SectionΒ 4.06Β Β Regulatory
Approvals; No Defaults.
Β
(a)Β 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 Buyer or any
of its Subsidiaries or affiliates in connection with the
execution, delivery or performance by Buyer of this Agreement,
or to consummate the transactions contemplated hereby, except
for (i)Β filings of applications or notices with, and
consents, approvals or waivers by, the FDIC, the FRB the
Massachusetts Division of Banks and the Massachusetts Board of
Bank Incorporation, and (ii)Β the filing and effectiveness
of the Registration Statement with the SEC. As of the date
hereof, Buyer is not aware of any reason why the approvals set
forth above will not be received in a timely manner.
A-21
Β
(b)Β Subject to receipt, or the making, of the consents,
approvals, waivers and filings referred to in the immediately
preceding paragraph and expiration of the related waiting
periods, the execution, delivery and performance of this
Agreement by Buyer, and the consummation of the transactions
contemplated hereby do not and will not (i)Β constitute a
breach or violation of, or a default under, the charter or
bylaws (or similar governing documents) of Buyer or any of its
Subsidiaries or affiliates, (ii)Β violate any statute, code,
ordinance, rule, regulation, judgment, order, writ, decree or
injunction applicable to Buyer or any of its Subsidiaries, or
any of their respective properties or assets or
(iii)Β violate, conflict with, result in a breach of any
provision of or the loss of any benefit under, constitute a
default (or an event which, with notice or lapse of time, or
both, would constitute a default) under, result in the
termination of or a right of termination or cancellation under,
accelerate the performance required by, or result in the
creation of any Lien upon any of the respective properties or
assets of Buyer or any of its Subsidiaries or affiliates under,
any of the terms, conditions or provisions of any note, bond,
mortgage, indenture, deed of trust, license, lease, contract,
agreement or other instrument or obligation to which Buyer or
any of its Subsidiaries or affiliates is a party, or by which
they or any of their respective properties or assets may be
bound or affected.
Β
SectionΒ 4.07Β Β Absence
of Certain Changes or Events.Β Β Except as
reflected in Buyerβs unaudited balance sheet as of
JuneΒ 30, 2007 or in the Buyer SEC Documents, since
JuneΒ 30, 2007, there has been no change or development or
combination of changes or developments which, individually or in
the aggregate, has had or is reasonably likely to have a
Material Adverse Effect on Buyer or its Subsidiaries.
Β
SectionΒ 4.08Β Β Compliance
with Laws.
Β
(a)Β Buyer and each of its Subsidiaries is and since
DecemberΒ 31, 2003 has been in 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, as amended, the Fair Housing Act, as amended,
the Community Reinvestment Act, the Home Mortgage Disclosure
Act, the Bank Secrecy Act of 1970, as amended, the USA Patriot
Act and all other applicable fair lending and fair housing laws
or other laws relating to discrimination;
Β
(b)Β Buyer and each of its Subsidiaries has all permits,
licenses, authorizations, orders and approvals of, and have made
all filings, applications and registrations with, all
Governmental Authorities that are required in order to permit it
to own or lease their properties and to conduct their business
as presently conducted; all such permits, licenses, certificates
of authority, orders and approvals are in full force and effect
and, to Buyerβs Knowledge, no suspension or cancellation of
any of them is threatened;Β and
Β
(c)Β Other than as set forth in Buyer Disclosure
ScheduleΒ 4.08, neither Buyer nor any of its
Subsidiaries has received, since DecemberΒ 31, 2001,
notification or communication from any Governmental Authority
(i)Β asserting that it is not in compliance with any of the
statutes, regulations or ordinances which such Governmental
Authority enforces or (ii)Β threatening to revoke any
license, franchise, permit or governmental authorization (nor,
to Buyerβs Knowledge, do any grounds for any of the
foregoing exist).
Β
SectionΒ 4.09Β Β Financial
Ability.Β Β On the Effective Date, Buyer will
have all funds necessary to consummate the Merger and pay the
aggregate Cash Consideration pursuant to SectionΒ 2.01
hereof.
Β
SectionΒ 4.10Β Β Proxy
Statement-Prospectus Information; Registration
Statement.Β Β As of the date of the Proxy
Statement-Prospectus and the date of the meeting of the
shareholders of Company to which such Proxy Statement-Prospectus
relates, the Proxy Statement-Prospectus and the registration
statement on
FormΒ S-4
(the βRegistration Statementβ) prepared pursuant to
SectionΒ 5.05 will not contain any untrue statement of a
material fact or omit to state a material fact necessary to make
the statements therein, in light of the circumstances under
which they were made, not misleading; provided, however, that
that information as of a later date shall be deemed to modify
information as of an earlier date; provided, further, that no
representation and warranty is made with respect to information
relating to Company or Company Bank included in the Proxy
Statement-Prospectus pursuant to SectionΒ 3.33 hereof.
A-22
Β
SectionΒ 4.11Β Β Legal
Proceedings.
Β
(a)Β Other than as set forth in Buyer Disclosure
ScheduleΒ 4.11, there are no civil, criminal,
administrative or regulatory actions, suits, demand letters,
demands for indemnification, claims, hearings, notices of
violation, arbitrations, investigations, orders to show cause,
market conduct examinations, notices of non-compliance or other
proceedings of any nature pending or, to Buyerβs Knowledge,
threatened against Buyer or any of its Subsidiaries.
Β
(b)Β Neither Buyer nor any of its Subsidiaries is a party to
any, nor are there any pending or, to Buyerβs Knowledge,
threatened, civil, criminal, administrative or regulatory
actions, suits, demand letters, claims, hearings, notices of
violation, arbitrations, investigations, orders to show cause,
market conduct examinations, notices of non-compliance or other
proceedings of any nature against Buyer or any of its
Subsidiaries in which, to Buyerβs Knowledge, there is a
reasonable probability of any material recovery against or other
Material Adverse Effect on Buyer or which challenges the
validity or propriety of the transactions contemplated by this
Agreement.
Β
(c)Β There is no injunction, order, judgment or decree
imposed upon Buyer or any of its Subsidiaries, or the assets of
Buyer or any of its Subsidiaries, and neither Buyer nor any of
its Subsidiaries has been advised of, or is aware of, the threat
of any such action.
Β
SectionΒ 4.12Β Β Brokers.Β Β None
of Buyer, Buyer Bank or any of their officers or trustees has
employed any broker or finder or incurred any liability for any
brokerβs fees, commissions or finderβs fees in
connection with any of the transactions contemplated by this
Agreement, except that Buyer has engaged, and will pay a fee or
commission to, Xxxxxx X. XxxxxΒ & Co. in accordance
with the terms of a letter agreement between Xxxxxx X.
XxxxxΒ & Co. and Buyer.
Β
SectionΒ 4.13Β Β Employee
Benefit Plans.
Β
(a)Β All benefit and compensation plans, contracts, policies
or arrangements covering current or former employees of Buyer or
any of its Subsidiaries and current or former directors of Buyer
or any of its Subsidiaries including, but not limited to,
βemployee benefit plansβ within the meaning of
SectionΒ 3(3) of ERISA, and deferred compensation, stock
option, stock purchase, stock appreciation rights, stock based,
incentive and bonus plans (the βBuyer Benefit Plansβ),
including, but not limited to, any trust instruments and
insurance contracts forming a part of any Buyer Benefit Plans
and all amendments thereto, have been made available to Company.
Β
(b)Β All Buyer Benefit Plans, to the extent subject to
ERISA, are in substantial compliance with ERISA. Each Buyer
Benefit Plan which is an βemployee pension benefit
planβ within the meaning of SectionΒ 3(2) of ERISA (a
βBuyer Pension Planβ) and which is intended to be
qualified under SectionΒ 401(a) of the Code, has received a
favorable determination letter from the IRS, and Buyer is not
aware of any circumstance that could reasonably be expected to
result in revocation of any such favorable determination letter
or the loss of the qualification of such Buyer Pension Plan
under SectionΒ 401(a) of the Code. There is no pending or,
to Buyerβs Knowledge, threatened litigation relating to the
Buyer Benefit Plans. Neither Buyer nor any of its Subsidiaries
has engaged in a transaction with respect to any Buyer Benefit
Plan or Buyer Pension Plan that, assuming the taxable period of
such transaction expired as of the date hereof, could subject
Buyer or any of its Subsidiaries to a tax or penalty imposed by
either SectionΒ 4975 of the Code or SectionΒ 502(i) of
ERISA.
Β
(c)Β No liability under Subtitle C or D of TitleΒ IV of
ERISA has been or is expected to be incurred by Buyer or any of
its Subsidiaries with respect to any ongoing, frozen or
terminated βsingle employer plan,β within the meaning
of SectionΒ 4001(a)(15) of ERISA, currently or formerly
maintained by Buyer, any of its Subsidiaries or any ERISA
Affiliate. Neither Buyer nor any of its Subsidiaries has
incurred, and does not expect to incur, any withdrawal liability
with respect to a multiemployer plan under Subtitle E of
TitleΒ IV of ERISA (regardless of whether based on
contributions of an ERISA Affiliate). No notice of a
βreportable event,β within the meaning of
SectionΒ 4043 of ERISA for which the
30-day
reporting requirement has not been waived, has been required to
be filed for any Buyer Pension Plan or by any ERISA Affiliate
within the 12Β month period ending on the date hereof or
will be required to be filed in connection with the transactions
contemplated by this Agreement.
A-23
Β
(d)Β All contributions required to be made with respect to
all Buyer Benefit Plans have been timely made or have been
reflected on the financial statements of Buyer. No Buyer Pension
Plan or single-employer plan of an ERISA Affiliate has an
βaccumulated funding deficiencyβ (whether or not
waived) within the meaning of SectionΒ 412 of the Code or
SectionΒ 302 of ERISA and no ERISA Affiliate has an
outstanding funding waiver.
Β
SectionΒ 4.14Β Β Labor
Matters.Β Β Neither Buyer nor any of its
Subsidiaries is a party to or bound by any collective bargaining
agreement, contract or other agreement or understanding with a
labor union or labor organization, nor is there any proceeding
pending or, to Buyerβs Knowledge threatened, asserting that
Buyer or any of its Subsidiaries has committed an unfair labor
practice (within the meaning of the National Labor Relations
Act, as amended) or seeking to compel Buyer 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 pending or, to Buyerβs
Knowledge, threatened, nor is Buyer aware of any activity
involving its employees seeking to certify a collective
bargaining unit or engaging in other organizational activity.
Β
SectionΒ 4.15Β Β Tax
Matters.
Β
(a)Β Buyer and each of its Subsidiaries has filed all Tax
Returns that it was required to file under applicable laws and
regulations, other than Tax Returns that are not yet due or for
which a request for extension was filed consistent with
requirements of applicable law or regulation. 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 Buyer or any of
its Subsidiaries (whether or not shown on any Tax Return) have
been paid other than Taxes that have been reserved or accrued on
the balance sheet of Buyer and which Buyer is contesting in good
faith. Buyer is not the beneficiary of any extension of time
within which to file any Tax Return, and neither Buyer nor any
of its Subsidiaries currently has any open tax years. No claim
has ever been made by an authority in a jurisdiction where Buyer
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 Buyer or any of its Subsidiaries.
Β
(b)Β Buyer 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,
shareholder, or other third party.
Β
(c)Β No foreign, federal, state, or local tax audits or
administrative or judicial Tax proceedings are being conducted
or to the Knowledge of Buyer are pending with respect to Buyer.
Buyer has not received from any foreign, federal, state, or
local taxing authority (including jurisdictions where Buyer has
not filed Tax Returns) any (i)Β notice indicating an intent
to open an audit or other review, (ii)Β request for
information related to Tax matters, or (iii)Β notice of
deficiency or proposed adjustment for any amount of Tax
proposed, asserted, or assessed by any taxing authority against
Buyer.
Β
(d)Β Buyer has not waived any statute of limitations in
respect of Taxes or agreed to any extension of time with respect
to a Tax assessment or deficiency.
Β
(e)Β The unpaid Taxes of Buyer (i)Β did not, as of the
end of the most recent period covered by Buyerβs call
reports 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 Buyerβs call reports filed on or prior to the
date hereof (rather than in any notes thereto), and (ii)Β 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 Buyer in filing its Tax Returns. Since the end of
the most recent period covered by Buyerβs call reports
filed prior to the date hereof, Buyer has not incurred any
liability for Taxes arising from extraordinary gains or losses,
as that term is used in GAAP, outside the ordinary course of
business consistent with past custom and practice.
Β
SectionΒ 4.16Β Β Disclosure.Β Β The
representations and warranties contained in this
ArticleΒ IV, 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 ArticleΒ IV not misleading.
A-24
Β
ARTICLEΒ V.
Β
COVENANTS
Β
SectionΒ 5.01Β Β Covenants
of Company.Β Β During the period from the date
of this Agreement and continuing until the Effective Time,
except as expressly contemplated or permitted by this Agreement
or with the prior written consent of Buyer, Company shall carry
on its business in the ordinary course consistent with past
practice and consistent with prudent banking practice and in
compliance in all material respects with all applicable laws and
regulations. Company will use its reasonable best efforts to
(i)Β preserve its business organization intact,
(ii)Β keep available to itself and Buyer the present
services of the current officers and employees of Company and
its Subsidiaries and (iii)Β preserve for itself and Buyer
the goodwill of the customers of Company and others with whom
business relationships exist. Without limiting the generality of
the foregoing, and except as set forth in the Company Disclosure
Schedule or as otherwise expressly contemplated or permitted by
this Agreement or consented to in writing by Buyer, neither
Company nor any of its Subsidiaries shall:
Β
(a)Β Stock.Β Β Other than pursuant to
stock options or stock-based awards outstanding as of the date
hereof and listed on the Company Disclosure Schedule,
(i)Β issue, sell or otherwise permit to become outstanding,
or authorize the creation of, any additional shares of its
stock, any Rights, or any securities (including units of
beneficial ownership interest in any partnership or limited
liability company), (ii)Β enter into any agreement with
respect to the foregoing, (iii)Β accelerate the vesting of
any existing Rights, or (iv)Β change (or establish a record
date for changing) the number of, or provide for the exchange
of, shares of its stock, any securities (including units of
beneficial ownership interest in any partnership or limited
liability company) convertible into or exchangeable for any
additional shares of stock, any Rights issued and outstanding
prior to the Effective Time as a result of a stock split, stock
dividend, recapitalization, reclassification, or similar
transaction with respect to its outstanding stock or any other
such securities.
Β
(b)Β Dividends;
Etc.Β Β (i)Β Declare, set aside or pay any
dividends on or make other distributions (whether in cash or
otherwise) in respect of any of its capital stock, except
(x)Β dividends by Subsidiaries of Company to such
Subsidiaryβs parent or another Subsidiary of Company and
(y)Β the regular quarterly dividends on Company Common Stock
in the amount of no more than $0.09 per share of Company Common
Stock.
Β
(c)Β Compensation; Employment Agreements,
Etc.Β Β Enter into or amend or renew any
employment, consulting, severance or similar agreements or
arrangements with any director, officer or employee of Company
or any of its Subsidiaries, or grant any salary or wage increase
or increase any employee benefit or pay any incentive or bonus
payments, except (i)Β normal increases in compensation to
non-Executive Officers in the ordinary course of business
consistent with past practice, provided that no such increase
shall exceed four percent (4%) of an individualβs current
annual compensation, (ii)Β as may be required by law,
(iii)Β to satisfy contractual obligations existing as of the
date hereof and disclosed on Company Disclosure
ScheduleΒ 5.01(c), if any, or (iv)Β payment of
bonuses to such individuals with respect to service in 2007 in
such amounts as are listed on Company Disclosure
ScheduleΒ 5.01(c) by Company or Company Bank under
Company Benefit Plans at the earlier of the Closing Date or the
time that payments would be made in the ordinary course in
accordance with past practices under each such Company Benefit
Plan.
Β
(d)Β Hiring;
Promotions.Β Β (i)Β Hire any person as an
employee of Company or any of its Subsidiaries, except for
at-will employees at an annual rate of salary not to exceed
$75,000 to fill vacancies that may arise from time to time in
the ordinary course of business, or (ii)Β promote any
employee, except to satisfy contractual obligations existing as
of the date hereof and set forth on Company Disclosure
ScheduleΒ 5.01(d), if any.
Β
(e)Β Benefit Plans.Β Β Enter into,
establish, adopt, amend, modify or terminate (except (i)Β as
may be required by or to make consistent with applicable law,
subject to the provision of prior written notice to and
consultation with respect thereto with Buyer, or (ii)Β to
satisfy contractual obligations existing as of the date hereof
and set forth on Company Disclosure
ScheduleΒ 5.01(e)), any Company Benefit Plan or
A-25
Β
other 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
current or former director, officer or employee of Company or
any of its Subsidiaries.
Β
(f)Β Transactions with
Affiliates.Β Β Except pursuant to agreements or
arrangements in effect on the date hereof and set on Company
Disclosure ScheduleΒ 5.01(f), pay, loan or advance any
amount to, or sell, transfer or lease any properties or assets
(real, personal or mixed, tangible or intangible) to, or enter
into any agreement or arrangement with, any of its officers or
directors or any of their immediate family members or any
affiliates or associates (as such terms are defined under the
Exchange Act) of any of its officers or directors other than
compensation in the ordinary course of business consistent with
past practice.
Β
(g)Β Dispositions.Β Β Sell, transfer,
mortgage, pledge, encumber or otherwise dispose of or
discontinue any of its assets, deposits, business or properties.
Β
(h)Β Acquisitions.Β Β 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, in each case in the ordinary and usual
course of business consistent with past practice) all or any
portion of the assets, business, deposits or properties of any
other entity.
Β
(i)Β Capital Expenditures.Β Β Except
as set forth on Company Disclosure ScheduleΒ 5.01(i),
make any capital expenditures other than capital expenditures in
the ordinary course of business consistent with past practice in
amounts not exceeding $50,000 individually or $100,000 in the
aggregate.
Β
(j)Β Governing Documents.Β Β Amend
Companyβs Articles of Incorporation or Bylaws or any
equivalent documents of Companyβs Subsidiaries.
Β
(k)Β Accounting Methods.Β Β Implement
or adopt any change in its accounting principles, practices or
methods, other than as may be required by applicable laws or
regulations or GAAP.
Β
(l)Β Contracts.Β Β Except as set forth
on Company Disclosure ScheduleΒ 5.01(l), enter into,
amend, modify or terminate any Material Contract, Lease or
Insurance Policy.
Β
(m)Β Claims.Β Β Enter into any
settlement or similar agreement with respect to any action,
suit, proceeding, order or investigation to which Company or any
of its Subsidiaries is or becomes a party after the date of this
Agreement, which settlement or agreement involves payment by
Company or any of its Subsidiaries of an amount which exceeds
$25,000 individually or $50,000 in the aggregate
and/or would
impose any material restriction on the business of Company or
any of its Subsidiaries.
Β
(n)Β Banking Operations.Β Β Enter into
any new material line of business; change in any material
respect its lending, investment, underwriting, risk and asset
liability management and other banking and operating policies,
except as required by applicable law, regulation or policies
imposed by any Governmental Authority; or file any application
or make any contract with respect to branching or site location
or branching or site relocation.
Β
(o)Β Derivatives
Transactions.Β Β Enter into any Derivatives
Transactions.
Β
(p)Β Indebtedness.Β Β Incur any
indebtedness for borrowed money (other than deposits or federal
funds purchased, in each case in the ordinary course of business
consistent with recent past practice) or assume, guarantee,
endorse or otherwise as an accommodation become responsible for
the obligations of any other Person.
Β
(q)Β Investment Securities.Β Β Acquire
(other than (i)Β by way of foreclosures or acquisitions in a
bona fide fiduciary capacity, (ii)Β in satisfaction of debts
previously contracted in good faith, or (iii)Β investments
having maturities of one year or less and rated
A-1 or
P-1 or
better by StandardΒ & Poorβs Corporation or
Xxxxxβx Investors Service, Inc., respectively, in each case
in the ordinary course of business consistent with recent past
practice), sell or otherwise dispose of any debt security or
equity investment.
A-26
Β
(r)Β Loans.Β Β Make or renew any loan,
loan commitment, letter of credit or other extension of credit
other than in the ordinary course of business consistent with
recent past practice.
Β
(s)Β Investments in Real
Estate.Β Β Make any investment or commitment to
invest in real estate or in any real estate development project
other than by way of foreclosure.
Β
(t)Β Taxes.Β Β Make or change any
material Tax election, file any material amended Tax Return,
enter into any material closing agreement, settle or compromise
any material liability with respect to Taxes, agree to any
material adjustment of any Tax attribute, file any claim for a
material refund of Taxes, or consent to any extension or waiver
of the limitation period applicable to any material Tax claim or
assessment, provided, that, for purposes of this subsection (t),
βmaterialβ shall mean affecting or relating to $50,000
or more of taxable income.
Β
(u)Β Compliance with
Agreements.Β Β Commit any act or omission which
constitutes a material breach or default by Company under any
agreement with any Governmental Authority or under any Material
Contract, Lease or other material agreement or material license
to which it is a party or by which it or its properties is bound
or under which it or its assets, business, or operations
receives benefits.
Β
(v)Β Environmental
Assessments.Β Β Foreclose on or take a deed or
title to any commercial real estate without first conducting a
Phase I environmental assessment of the property or foreclose on
any commercial real estate if such environmental assessment
indicates the presence of a Hazardous Substance in amounts
which, if such foreclosure were to occur, would be material.
Β
(w)Β Adverse Actions.Β Β Take any
action or fail to take any action that is intended or is
reasonably likely to result in (i)Β 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, (ii)Β any of the conditions to
the Merger set forth in ArticleΒ V not being satisfied or
(iii)Β a material violation of any provision of this
Agreement, except, in each case, as may be required by
applicable law or regulation.
Β
(x)Β Dividend Reinvestment and Common Stock Purchase
Plan.Β Β Directly or indirectly repurchase,
redeem or otherwise acquire any shares of its capital stock or
any securities convertible into or exercisable for any shares of
its capital stock, except that Company may cause the plan
administrator of Companyβs Dividend Reinvestment and Common
Stock Purchase Plan (the βDRSPPβ) to purchase shares
of Company Common Stock in the open market or in one or more
privately negotiated transactions with any person who is not an
affiliate of Company.
Β
(y)Β Commitments.Β Β Enter into any
contract with respect to, or otherwise agree or commit to do,
any of the foregoing.
Β
SectionΒ 5.02Β Β Covenants
of Buyer.Β Β From the date hereof until the
Effective Time, except as expressly contemplated or permitted by
this Agreement, without the prior written consent of Company,
Buyer will not, and will cause each of its Subsidiaries not to:
Β
(a)Β Adverse Actions.Β Β Take any
action or fail to take any action that is intended or is
reasonably likely to result in (i)Β a delay in the
consummation of the Merger or the transactions contemplated by
this Agreement, (ii)Β any impediment to Buyerβs ability
to consummate the Merger or the transactions contemplated by
this Agreement, (iii)Β 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, (iv)Β any of the conditions to the Merger set forth in
ArticleΒ VI not being satisfied, or (v)Β a material
violation of any provision of this Agreement except, in each
case, as may be required by applicable law or regulation.
Β
(b)Β Commitments.Β Β Enter into any
contract with respect to, or otherwise agree or commit to do,
any of the foregoing.
Β
SectionΒ 5.03Β Β Reasonable
Best Efforts.Β Β Subject to the terms and
conditions of this Agreement, each of the parties to the
Agreement 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 advisable
under applicable laws, so as to permit consummation of the
transactions contemplated hereby as promptly as practicable, and
A-27
Β
otherwise to enable consummation of the transactions, including
the satisfaction of the conditions set forth in ArticleΒ VI
hereof, and shall cooperate fully with the other parties hereto
to that end.
Β
SectionΒ 5.04Β Β Shareholder
Approval.Β Β Company agrees to take, in
accordance with applicable law, the rules of the National
Association of Securities Dealers, Inc., the Articles of
Incorporation of Company and the Bylaws of Company, all action
necessary to convene a special meeting of its shareholders to
consider and vote upon the approval of this Agreement and any
other matters required to be approved by Companyβs
shareholders in order to permit consummation of the transactions
contemplated hereby (including any adjournment or postponement,
the βCompany Meetingβ) and, subject to
SectionΒ 5.09(a), shall take all lawful action to solicit
such approval by such shareholders. Company agrees to use its
best efforts to convene the Company Meeting within forty-five
(45)Β days following the time when the Registration
Statement becomes effective. Except with the prior approval of
Buyer, no other matters shall be submitted for the approval of
Company shareholders at the Company Meeting. The Board of
Directors of Company shall at all times prior to and during the
Company Meeting recommend adoption of this Agreement by the
shareholders of Company and shall not withhold, withdraw, amend
or modify such recommendation in any manner adverse to Buyer or
take any other action or make any other public statement
inconsistent with such recommendation, except as and to the
extent expressly permitted by SectionΒ 5.09(a) (a
βChange in Recommendationβ). Notwithstanding any
Change in Recommendation, this Agreement shall be submitted to
the shareholders of Company for their approval at Company
Meeting and nothing contained herein shall be deemed to relieve
Company of such obligation. In the event that there is present
at such meeting, in person or by proxy, sufficient favorable
voting power to secure the Requisite Company Shareholder Vote,
Company will not adjourn or postpone the Company Meeting unless
Company is advised by counsel that failure to do so would result
in a breach of the U.S.Β federal securities laws or
fiduciary duties of Companyβs Board of Directors. Company
shall keep Buyer updated with respect to the proxy solicitation
results in connection with the Company Meeting as reasonably
required by Buyer.
Β
SectionΒ 5.05Β Β Registration
Statement; Proxy Statement-Prospectus.
Β
(a)Β Buyer and Company agree to cooperate in the preparation
of the Registration Statement to be filed by Buyer with the SEC
in connection with the issuance of the Buyer Common Stock in the
Merger (including the proxy statement and prospectus and other
proxy solicitation materials of Company constituting a part
thereof (the βProxy Statement-Prospectusβ) and all
related documents). Each of Buyer and Company agree to use its
reasonable best efforts to cause the Registration Statement to
be declared effective by the SEC as promptly as reasonably
practicable after the filing thereof. Buyer also agrees to use
reasonable best efforts to obtain any necessary state securities
law or βblue skyβ permits and approvals required to
carry out the transactions contemplated by this Agreement. The
Company agrees to cooperate with Buyer and Buyerβs counsel
and accountants in requesting and obtaining appropriate
opinions, consents and letters from the Financial Advisor and
Companyβs independent auditors in connection with the
Registration Statement and the Proxy Statement-Prospectus. After
the Registration Statement is declared effective under the
Securities Act, Company, at its expense, shall promptly mail the
Proxy Statement-Prospectus to its shareholders.
Β
(b)Β Buyer will advise Company, promptly after Buyer
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 Buyer Common Stock for
offering or sale in any jurisdiction, of the initiation or
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.
Β
(c)Β The Proxy Statement-Prospectus and the Registration
Statement shall comply as to form in all material respects with
the applicable provisions of the Exchange Act and the rules and
regulations thereunder. Each party will notify the other party
promptly upon the receipt of any comments (whether written or
oral) from the SEC or its staff and of any request by the SEC or
its staff or any government officials for amendments or
supplements to the Registration Statement, the Proxy
Statement-Prospectus, or for any other filing or for additional
information and will supply the other party with copies of all
correspondence between such party or any of its representatives,
on the one hand, and the SEC, or its staff or any other
government officials, on the other hand, with respect to the
Registration Statement, the Proxy Statement-Prospectus, the
A-28
Β
Merger or any other filing. If at any time prior to the Company
Meeting there shall occur any event that should be disclosed in
an amendment or supplement to the Proxy Statement-Prospectus or
the Registration Statement, Company and Buyer shall use their
reasonable best efforts to promptly prepare, file with the SEC
(if required under applicable Law) and mail to Companyβs
shareholders such amendment or supplement. Buyer shall not be
required to maintain the effectiveness of the Registration
Statement for the purpose of resale by Companyβs
shareholders who may be Affiliates of Company or Buyer pursuant
to RuleΒ 145 under the Securities Act.
Β
(d)Β Buyer will provide Company and its counsel with a
reasonable opportunity to review and comment on the Registration
Statement and all responses to requests for additional
information by and replies to comments of the SEC prior to
filing such with, or sending such to, the SEC, and will provide
Company and its counsel with a copy of all such filings made
with the SEC. Until such time as the Board of Directors of
Company takes any of the actions with respect to an Acquisition
Proposal permitted pursuant to SectionΒ 5.09 of this
Agreement, Company will provide Buyer and its counsel with a
reasonable opportunity to review and comment on the Proxy
Statement-Prospectus and all responses to requests for
additional information by and replies to comments of the SEC
prior to filing such with, or sending such to, the SEC, and will
provide Buyer and its counsel with a copy of all such filings
made with the SEC.
Β
SectionΒ 5.06Β Β Regulatory
Filings; Consents.
Β
(a)Β Each of Buyer and Company and their respective
Subsidiaries shall cooperate and use their respective reasonable
best efforts (i)Β to prepare all documentation (including
the Proxy Statement-Prospectus), to effect all filings, to
obtain all permits, consents, approvals and authorizations of
all third parties and Governmental Authorities necessary to
consummate the transactions contemplated by this Agreement,
including, without limitation, the Regulatory Approvals,
(ii)Β to comply with the terms and conditions of such
permits, consents, approvals and authorizations and
(iii)Β to cause the Merger to be consummated as
expeditiously as practicable (including by avoiding or setting
aside any preliminary or permanent injunction or other order of
any United States federal or state court of competent
jurisdiction or any other Governmental Authority); provided,
however, that in no event shall Buyer be required to agree to
any prohibition, limitation, or other requirement which would
prohibit or materially limit the ownership or operation by
Company or any of its Subsidiaries, or by Buyer or any of its
Subsidiaries, of all or any material portion of the business or
assets of Company or any of its Subsidiaries or Buyer or its
Subsidiaries, or compel Buyer or any of its Subsidiaries to
dispose of or hold separate all or any material portion of the
business or assets of Company or any of its Subsidiaries or
Buyer or any of its Subsidiaries (together, the βBurdensome
Conditionsβ). Buyer and Company will furnish each other and
each otherβs counsel with all information concerning
themselves, their Subsidiaries, directors, trustees, officers
and shareholders and such other matters as may be necessary or
advisable in connection with the Proxy Statement-Prospectus and
any application, petition or any other statement or application
made by or on behalf of Buyer or Company to any Governmental
Authority in connection with the transactions contemplated by
this Agreement. Each party hereto shall have the right to review
and approve in advance all characterizations of the information
relating to such party and any of its Subsidiaries that appear
in any filing made in connection with the transactions
contemplated by this Agreement with any Governmental Authority.
In addition, Buyer and Company shall each furnish to the other
for review a copy of each such filing made in connection with
the transactions contemplated by this Agreement with any
Governmental Authority prior to its filing.
Β
(b)Β Company will notify Buyer promptly and shall promptly
furnish Buyer with copies of notices or other communications
received by Company or any of its Subsidiaries of (i)Β any
communication from any Person alleging that the consent of such
Person (or another Person) is or may be required in connection
with the transactions contemplated by this Agreement (and the
response thereto from Company, its Subsidiaries or its
representatives), (ii)Β subject to applicable Laws and the
instructions of any Governmental Authority, any communication
from any Governmental Authority in connection with the
transactions contemplated by this Agreement (and the response
thereto from Company, its Subsidiaries or its representatives)
and (iii)Β any legal actions threatened or commenced against
or otherwise affecting Company or any of its Subsidiaries that
are related to the transactions contemplated by this Agreement
(and the response thereto from Company, its Subsidiaries or its
representatives). With respect to any of the foregoing, Company
will consult with Buyer
A-29
Β
and its representatives so as to permit Company and Buyer and
their respective representatives to cooperate to take
appropriate measures to avoid or mitigate any adverse
consequences that may result from any of the foregoing.
Β
(c)Β Buyer will notify Company promptly and shall promptly
furnish Company with copies of notices or other communications
received by Buyer or any of its Subsidiaries of (i)Β any
communication from any Person alleging that the consent of such
Person (or other Person) is or may be required in connection
with the transactions contemplated by this Agreement (and the
response thereto from Buyer or its Representatives),
(ii)Β subject to applicable Laws and the instructions of any
Governmental Authority, any communication from any Governmental
Authority in connection with the transactions contemplated by
this Agreement (and the response thereto from Buyer or its
Representatives), and (iii)Β any legal actions threatened or
commenced against or otherwise affecting Company or any of its
Subsidiaries that are related to the transactions contemplated
by this Agreement (and the response thereto from Company, its
Subsidiaries or its representatives).
Β
SectionΒ 5.07Β Β Publicity.Β Β Buyer
and Company shall consult with each other before issuing any
press release with respect to this Agreement or the transactions
contemplated hereby and shall not issue any such press release
or make any such public statement 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. Without limiting the reach of the
preceding sentence, Buyer and Company shall (i)Β cooperate
to develop all public announcement materials; and (ii)Β make
appropriate management available at presentations related to the
transactions contemplated by this Agreement as reasonably
requested by the other. In addition, Company and its
Subsidiaries shall coordinate with Buyer regarding all
communications with customers, suppliers, employees,
shareholders, and the community in general related to the
transactions contemplated hereby.
Β
SectionΒ 5.08Β Β Access;
Information.
Β
(a)Β Company and Buyer agree that upon reasonable notice and
subject to applicable laws relating to the exchange of
information, each shall afford the other party and its officers,
employees, counsel, accountants and other authorized
representatives such access during normal business hours
throughout the period prior to the Effective Time to its books,
records (including, without limitation, Tax Returns and work
papers of independent auditors), properties and personnel and to
such other information relating to it as the other party may
reasonably request and, during such period, shall furnish
promptly to the other party all information concerning its
business, properties and personnel as the other party may
reasonably request.
Β
(b)Β No investigation by a party hereto or its
representatives shall be deemed to modify or waive any
representation, warranty, covenant or agreement of the other
party set forth in this Agreement, or the conditions to the
respective obligations of Buyer and Company to consummate the
transactions contemplated hereby.
Β
SectionΒ 5.09Β Β No
Solicitation by Company.
Β
(a)Β The Company and its Subsidiaries shall immediately
cease, and Company and its Subsidiaries shall use their
reasonable best efforts to cause each of their respective
representatives to, immediately cease any discussions or
negotiations with any parties conducted prior to the date hereof
with respect to an Acquisition Proposal. Except as permitted by
this SectionΒ 5.09, after the execution and delivery of this
Agreement, Company and its directors, officers and Subsidiaries
shall not, and shall use its reasonable best efforts to cause
each of its and its Subsidiariesβ representatives not to,
directly or indirectly, (i)Β solicit, initiate or knowingly
encourage any inquiry with respect to, or the making of, any
proposal that constitutes or could reasonably be expected to
lead to an Acquisition Proposal, (ii)Β participate in any
negotiations regarding an Acquisition Proposal with, or furnish
any nonpublic information relating to a Acquisition Proposal to,
any Person that has made or, to the Knowledge of Company, is
considering making an Acquisition Proposal, or (iii)Β engage
in discussions regarding an Acquisition Proposal with any Person
that has made, or, to Companyβs Knowledge, is
A-30
Β
considering making, an Acquisition Proposal, except to notify
such Person of the existence of the provisions of this
SectionΒ 5.09.
Β
(b)Β Notwithstanding SectionΒ 5.09(a), prior to the
time, but not after, the Requisite Company Shareholder Approval
is obtained, if Company receives a written and unsolicited
Acquisition Proposal that the Board of Directors of Company
reasonably believes to be credible, which the Board of Directors
of Company determines in good faith (after consultation with its
financial advisors and outside counsel) is or could reasonably
be expected to result in a Superior Proposal, Company may take
the following actions: (1)Β furnish nonpublic information to
the Person making such Acquisition Proposal, but only if
(A)Β prior to so furnishing such information, Company has
entered into a customary confidentiality agreement with such
Person, and (B)Β all such information has previously been
provided to Buyer or is provided to Buyer prior to or
contemporaneously with the time it is provided to the Person
making such Acquisition Proposal or such Personβs
representatives, and (2)Β engage or participate in any
discussions or negotiations with such Person with respect to the
Acquisition Proposal. Company promptly (and in any event within
48Β hours) shall advise Buyer orally and in writing of the
receipt of (i)Β any proposal that constitutes or could
reasonably be expected to lead to an Acquisition Proposal and
the material terms of such proposal (including the identity of
the party making such proposal and, if applicable, copies of any
documents or correspondence evidencing such proposal), and
(ii)Β any request for non-public information relating to
Company or any of its Subsidiaries other than requests for
information not reasonably expected to be related to an
Acquisition Proposal. Company shall, thereafter, keep Buyer
reasonably informed on a reasonably current basis of the status
of any such Acquisition Proposal (including any material change
to the terms thereof).
Β
(c)Β Except as provided in SectionΒ 5.09(d), Board of
Directors of Company shall not (i)Β withhold, withdraw or
modify (or publicly propose to withhold, withdraw or modify), in
a manner adverse to Buyer, its recommendation referred to in
SectionΒ 5.04, or (ii)Β approve or recommend (or
publicly propose to approve or recommend ) any Acquisition
Proposal (it being understood that Companyβs Board of
Directors may take no position with respect to an Acquisition
Proposal that takes the form of a tender offer until the close
of business as of the tenth Business Day after the commencement
of such tender offer pursuant to
RuleΒ 14d-2
under the Exchange Act without such action being considered an
adverse modification). Company shall not, and its Board of
Directors shall not allow Company to, and Company shall not
allow any of Companyβs Subsidiaries to enter into any
letter of intent, memorandum of understanding, agreement in
principle, acquisition agreement, merger agreement or other
agreement (except for customary confidentiality agreements
permitted under SectionΒ 5.09(b)) relating to any
Acquisition Proposal.
Β
(d)Β Notwithstanding anything to the contrary set forth in
this Agreement, the Board of Directors of Company may, prior to
but not after the time the Requisite Company Shareholder
Approval is obtained, (i)Β make a Change in its
recommendation referred to in SectionΒ 5.04
and/or
(ii)Β terminate this Agreement pursuant to
SectionΒ 7.01, in each case of clausesΒ (i) or (ii), if
the Board of Directors of Company has determined in good faith,
after consulting with its outside counsel, that the failure to
take such action would be inconsistent with the directorsβ
fiduciary duties under applicable Law; provided that the Board
of Directors may not take any such action in connection with an
Acquisition Proposal unless (1)Β such Acquisition Proposal
constitutes a Superior Proposal, (2)Β prior to terminating
this Agreement pursuant to SectionΒ 7.01(g)(iii), Company
provides prior written notice to Buyer at least three Business
Days in advance (the βNotice Periodβ) of its intention
to take such action, which notice shall specify all material
terms and conditions of such Superior Proposal (including the
identity of the party making such Superior Proposal and copies
of any documents or correspondence evidencing such Superior
Proposal), and any material modifications to any of the
foregoing, (3)Β during the Notice Period Company shall, and
shall cause its financial advisors and outside counsel to,
negotiate with Buyer in good faith should Buyer propose to make
such adjustments in the terms and conditions of this Agreement
so that such Acquisition Proposal ceases to constitute (in the
good faith judgment of Companyβs Board of Directors) a
Superior Proposal and (4)Β such Acquisition Proposal
continues to constitute (in the good faith judgment of
Companyβs Board of Directors) a Superior Proposal after
taking into account any such amendments that Buyer shall have
agreed to make prior to the end of the Notice Period.
Β
(e)Β Nothing contained in this SectionΒ 5.09 shall
prohibit Company from (i)Β complying with its disclosure
obligations under U.S.Β federal or state law with regard to
an Acquisition Proposal, including
RuleΒ 14a-9,
14d-9
A-31
Β
or 14e-2
promulgated under the Exchange Act, (ii)Β making any
disclosure to Companyβs shareholders if, after consultation
with its outside legal counsel, Company determines that such
disclosure would be required under applicable Law or
(iii)Β informing any Person of the existence of the
provisions contained in this SectionΒ 5.09.
Β
SectionΒ 5.10Β Β Indemnification.
Β
(a)Β From and after the Effective Time, Buyer (the
βIndemnifying Partyβ) shall indemnify and hold
harmless each present and former director and officer of
Company, as applicable, determined as of the Effective Time (the
βIndemnified Partiesβ) against any costs or expenses
(including reasonable attorneysβ fees), judgments, fines,
losses, claims, damages or liabilities incurred after the
Effective Time 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 or officer of Company or is or was serving at the
request of Company as a director, officer, employee or other
agent of any other organization or in any capacity with respect
to any employee benefit plan of Company, including without
limitation matters related to the negotiation, execution and
performance of this Agreement or any of the transactions
contemplated hereby, to the full extent to which such
Indemnified Parties would be entitled under the Bylaws of
Company as in effect on the date of this Agreement as though
such Bylaws continue to remain in effect after the Effective
Time (subject to applicable Law). Buyerβs obligations under
this SectionΒ 5.10(a) shall continue in full force and
effect for a period of six years from the Effective Time;
provided, however, that all rights to indemnification in respect
of any claim asserted or made within such period shall continue
until the final disposition of such claim.
Β
(b)Β Any Indemnified Party wishing to claim indemnification
under this SectionΒ 5.10, 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)Β 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)Β the Indemnified Parties will cooperate in the defense
of any such matter, (iii)Β the Indemnifying Party shall not
be liable for any settlement effected without its prior written
consent and (iv)Β the Indemnifying Party shall have no
obligation hereunder in the event that indemnification of an
Indemnified Party in the manner contemplated hereby is
prohibited by applicable laws and regulations or by an
applicable federal or state banking agency or a court of
competent jurisdiction.
Β
(c)Β Prior to the Effective Time, Company shall and if
Company is unable to, Buyer shall cause the Surviving Entity as
of the Effective Time to obtain and fully pay the premium for
the extension of (i)Β the Side A coverage part
(directorsβ and officersβ liability) of Companyβs
existing directorsβ and officersβ insurance policies,
and (ii)Β Companyβs existing fiduciary liability
insurance policies, in each case for a claims reporting or
discovery period of at least six (6)Β years from and after
the Effective Time from an insurance carrier with the same or
better credit rating as Companyβs current insurance carrier
with respect to directorsβ and officersβ liability
insurance and fiduciary liability insurance (collectively,
βD&O Insuranceβ) with terms, conditions,
retentions and limits of liability that are at least as
favorable as Companyβs existing policies with respect to
any actual or alleged error, misstatement, misleading statement,
act, omission, neglect, breach of duty or any matter claimed
against a director or officer of Company or any of its
Subsidiaries by reason of him or her serving in such capacity
that existed or occurred at or prior to the Effective Time
(including in connection with this Agreement or the transactions
or actions contemplated hereby) ; provided that in no
event shall Company expend, or Buyer or the Surviving Entity be
required to expend, for such βtailβ policy a premium
A-32
Β
amount in excess of an amount (the βMaximum D&O Tail
Premiumβ) equal to (x)Β 225% of the annual premiums
paid by Company for DΒ & O Insurance in effect as of
the date of this Agreement less (y)Β the premium
credit, if any, to which Company is entitled on account of the
Merger under the D&O Insurance in effect immediately prior
to the Effective Time; provided further, that if the cost
of such a tail policy exceeds the Maximum D&O Tail Premium,
Company, Buyer or the Surviving Entity shall obtain a tail
policy with the greatest coverage available for a cost not
exceeding Maximum D&O Tail Premium.
Β
(d)Β If Buyer 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 Buyer shall
assume the obligations set forth in this SectionΒ 5.10.
Β
SectionΒ 5.11Β Β Employees;
Benefit Plans.
Β
(a)Β Buyer shall retain all Company Employees who accept
employment with Buyer Bank under the terms and conditions
specified by Buyer; provided, that continued retention by Buyer
Bank of such employees subsequent to the Merger shall be subject
to Buyer Bankβs normal and customary employment procedures
and practices, including customary background screening and
evaluation procedures, and satisfactory employment performance.
In addition, Company and Company Bank agree that Buyer may enter
into discussions with the Company Employees listed on
ScheduleΒ 5.11(a) hereto regarding employment,
consulting or other arrangements to be effective following the
Merger.
Β
(b)Β Following the Closing Date, Buyer may choose to
maintain any or all of Company Benefit Plans in its sole
discretion. However, for any Company Benefit Plan terminated for
which there is a comparable Buyer Benefit Plan of general
applicability, Company Employees shall be entitled to
participate in such Buyer Benefit Plan to the same extent as
similarly-situated employees of Buyer or Buyer Bank (it being
understood that inclusion of Company Employees in the Buyer
Benefit Plans may occur, if at all, at different times with
respect to different plans). Nothing herein shall limit the
ability of Buyer or Buyer Bank to amend or terminate any of the
Company Benefit Plans or Buyer Benefit Plans in accordance with
their terms at any time.
Β
(c)Β If employees of Company or any of its Subsidiaries
become eligible to participate in a medical, dental or health
plan of Buyer or Buyer Bank upon termination of such plan of
Company or any of its Subsidiaries, Buyer shall make all
commercially reasonable efforts to cause each such plan to
(i)Β waive any preexisting condition limitations to the
extent such conditions are covered under the applicable medical,
health or dental plans of Buyer or Buyer Bank, (ii)Β honor
under such plans, other than plans funded with insurance, any
deductible, co-payment and out-of-pocket expenses incurred by
the employees and their beneficiaries during the portion of the
calendar year prior to such participation and (iii)Β waive
any waiting period limitation or evidence of insurability
requirement which would otherwise be applicable to such employee
on or after the Effective Time, in each case to the extent such
employee had satisfied any similar limitation or requirement
under an analogous Plan prior to the Effective Time for the plan
year in which the Effective Time occurs.
Β
(d)Β With respect to each Company Benefit Plan subject to
SectionΒ 409A of the Code, Company agrees to amend each such
plan or cause each such plan to be amended to the extent, in
Buyerβs reasonable judgment, such an amendment is necessary
to comply with SectionΒ 409A of the Code (or to cause such
plan, in whole or in part, to avoid the application of
SectionΒ 409A of the Code by preserving the terms of such
plan, and the law in effect, for benefits earned and vested as
of DecemberΒ 31, 2004)Β prior to the earlier of the
Effective Time or the deadline imposed by the IRS. Such
amendments shall be provided to Buyer and its counsel at least
ten days prior to their proposed adoption by Company or Company
Bank and shall be subject to the prior approval of Buyer, which
shall not be unreasonably withheld.
Β
(e)Β During the one-year period commencing as of the date on
which the Effective Time occurs, Buyer shall honor with respect
to Company employees who commence employment as of the Effective
Time with Buyer as contemplated by this Agreement the Severance
Pay Plan of Xxxxxβx Ferry Bank (the βCompany Severance
Pay Planβ) in connection with the termination of employment
of any Company Employee (excluding any employee who is party to
an employment agreement,
change-in-control
agreement or any other agreement which provides for severance
payments), in such amounts, at such times and upon such
conditions
A-33
Β
as set forth in the Company Severance Pay Plan with respect to
involuntary employment terminations for reasons other than cause
that occur.
Β
(f)Β Nothing in this SectionΒ 5.11, expressed or
implied, is intended to confer upon any other Person any rights
or remedies of any nature whatsoever under or by reason of this
SectionΒ 5.11. Without limiting the foregoing, no provision
of this SectionΒ 5.11 will create any third party
beneficiary rights in any current or former employee, director
or consultant of Company or its Subsidiaries in respect of
continued employment (or resumed employment) or any other
matter. Nothing in this SectionΒ 5.11 is intended
(i)Β to amend any Benefit Plan, (ii)Β interfere with
Buyerβs or the Surviving Entityβs right from and after
the Closing Date to amend or terminate any Benefit Plan or
(iii)Β interfere with Buyerβs or the Surviving
Entityβs right from and after the Effective Time to
terminate the employment or provision of services by any
director, employee, independent contractor or consultant.
Β
(g)Β Upon Buyerβs reasonable request, Company shall
cooperate with Buyer to facilitate the termination, on or after
the Closing Date, of each Company Benefit Plan that is an
βemployee pension benefit planβ within the meaning of
SectionΒ 3(2) of ERISA that is subject to TitleΒ IV of
ERISA, provided that such termination is effected in a manner
that does not adversely affect such planβs qualification
under SectionsΒ 401(a) and 501(a) of the Code. Buyer and
Company shall use reasonable best efforts to effect such a
termination and the associated distribution of all assets of
each such terminated Company Benefit Plan. In no event shall the
assets of any Company Benefit Plan terminated pursuant to this
SectionΒ 5.16(g) be distributed in any form or at any time
not approved in writing in advance by Buyer.
Β
(h)Β Company shall use reasonable best efforts to cause the
βemployee welfare benefit plan,β within the meaning of
SectionΒ 3(1) of ERISA, known as the Severance Pay Plan of
Xxxxxβx Ferry Bank to be administered at all times in
accordance with the requirements for exemption from
SectionΒ 409A of the Code available under Treasury
Regulation
sectionΒ 1.409A-1(b)(9)(iii).
Β
(i)Β Buyer and Company shall jointly develop and implement
within thirty (30)Β days from the date of this Agreement
retention arrangements for such Company Bank employees as Buyer
and Company may mutually agree.
Β
SectionΒ 5.12Β Β Notification
of Certain Changes.Β Β Buyer and Company shall
promptly advise the other party of any change or event having,
or which could reasonably be expected to have, a Material
Adverse Effect on it or which it believes would, or which could
reasonably be expected to, cause or constitute a material breach
of any of its representations, warranties or covenants contained
herein. From time to time prior to the Effective Time (and on
the date prior to the Closing Date), Company will supplement or
amend the Company Disclosure Schedules delivered in connection
with the execution of this Agreement to reflect any matter
which, if existing, occurring or known at the date of this
Agreement, would have been required to be set forth or described
in such Disclosure Schedules or which is necessary to correct
any information in the Company Disclosure Schedules which has
been rendered inaccurate thereby. No supplement or amendment to
the Company Disclosure Schedules shall have any effect for the
purpose of determining the accuracy of the representations and
warranties of the parties contained in ArticleΒ III and
ArticleΒ IV in order to determine the fulfillment of the
conditions set forth in SectionsΒ 6.02(a) or 6.03(a) hereof,
as the case may be, or the compliance by Company or Buyer, as
the case may be, with the respective covenants and agreements of
such parties contained herein.
Β
SectionΒ 5.13Β Β Current
Information.Β Β During the period from the date
of this Agreement to the Effective Time, Company will cause one
or more of its designated representatives to confer on a regular
and frequent basis (not less than weekly) with representatives
of Buyer and to report the general status of the ongoing
operations of Company and each of its Subsidiaries. Without
limiting the foregoing, Company agrees to provide Buyer
(i)Β a copy of each report filed by Company or any of its
Subsidiaries with a Governmental Authority within one
(1)Β Business Day following the filing thereof, (ii)Β a
consolidated balance sheet and a consolidated statement of
operations, without related notes, within twenty-five
(25)Β days after the end of each month, prepared in
accordance with Companyβs current financial reporting
practices, and (iii)Β regular updates of the information set
forth in ScheduleΒ 5.13.
A-34
Β
SectionΒ 5.14Β Β Board
Packages.Β Β Company shall distribute a copy of
any Company or Company Bank Board package, including the agenda
and any draft minutes, to Buyer at the same time and in the same
manner in which it distributes a copy of such package to the
Board of Directors of Company or Company Bank, as the case may
be; provided, however, that Company shall not be required to
copy Buyer on any documents that disclose confidential
discussions of this Agreement or the transactions contemplated
hereby or any third party proposal to acquire control of Company
or any other matter that Companyβs Board of Directors has
been advised of by counsel that such distribution to Buyer may
violate a confidentiality obligation or fiduciary duty or any
law or regulation.
Β
SectionΒ 5.15Β Β Transition;
Informational Systems Conversion.Β Β From and
after the date hereof, Buyer and Company shall use their
reasonable best efforts to facilitate the integration of Company
with the business of Buyer following consummation of the
transactions contemplated hereby, and shall meet on a regular
basis to discuss and plan for the conversion of the data
processing and related electronic informational systems of
Company and each of its Subsidiaries (the βInformational
Systems Conversionβ) to those used by Buyer, which planning
shall include, but not be limited to, (a)Β discussion of
third-party service provider arrangements of Company and each of
its Subsidiaries; (b)Β non-renewal, after the Effective
Time, of personal property leases and software licenses used by
of Company and each of its Subsidiaries in connection with the
systems operations; (c)Β retention of outside consultants
and additional employees to assist with the conversion;
(d)Β outsourcing, as appropriate after the Effective Time,
of proprietary or self-provided system services; and
(e)Β any other actions necessary and appropriate to
facilitate the conversion, as soon as practicable following the
Effective Time. Buyer shall indemnify Company for any reasonable
out-of-pocket fees, expenses or charges that Company may incur
as a result of taking, at the request of Buyer, any action to
facilitate the Informational Systems Conversion.
Β
SectionΒ 5.16Β Β Access
to Customers and Suppliers.Β Β From and after
the date hereof, Company shall, upon Buyerβs reasonable
request, introduce Buyer and its representatives to customers
and suppliers of Company and its Subsidiaries for the purpose of
facilitating the integration of Company and its business into
that of the Buyer. Any interaction between Buyer and
Companyβs customers and suppliers shall be coordinated by
Company. Company shall have the right to participate in any
discussions between Buyer and Companyβs customers and
suppliers.
Β
SectionΒ 5.17Β Β Environmental
Assessments.
Β
(a)Β Company shall cooperate with and grant access to an
environmental consulting firm selected by Buyer and reasonably
acceptable to Company, during normal business hours (and at such
other times as may be agreed), to any property set forth on
Company Disclosure ScheduleΒ 3.28 for the purpose of
conducting (i)Β Phase I Assessments (which also may include
an evaluation of asbestos containing materials, lead based
paint, lead in drinking water, mold and radon) and
(ii)Β PhaseΒ II Assessments.
Β
(b)Β Each Environmental Assessment shall include an estimate
by the environmental consulting firm preparing such
Environmental Assessment of the costs of investigation,
monitoring, personal injury, property damage, clean up,
remediation, penalties, fines or other liabilities, as the case
may be, relating to the βpotential environmental
condition(s)β or βrecognized environmental
condition(s)β or other conditions which are the subject of
the Environmental Assessment.
Β
(c)Β Buyer shall bear and pay the environmental consulting
firmβs fees and expenses. Within ten (10)Β days after
the date hereof, Buyer shall engage an environmental consultant
reasonably acceptable to Company to perform the Phase I
Assessments. Buyer shall use commercially reasonable efforts to
cause its environmental consultant to complete and provide Buyer
with its written Phase I Assessment(s) within thirty
(30)Β days after such consultant is retained. Promptly
following the receipt of all Phase I Assessments (but not later
than ten (10) days thereafter), Buyer shall order all applicable
PhaseΒ II Assessments. Buyer shall use commercially
reasonable efforts to have all Environmental Assessments
completed within sixty (60)Β days of the date of this
Agreement.
Β
SectionΒ 5.18Β Β Certain
Litigation.Β Β Company will use its reasonable
best efforts to resolve, within sixty (60)Β days from the
date of this Agreement and in a manner reasonably satisfactory
to Buyer, the dispute
A-35
Β
described on ScheduleΒ 5.18 hereto, which resolution
shall not be contingent upon the occurrence of the Merger. In
the event that any shareholder litigation related to this
Agreement or the Merger and the other transactions contemplated
by this Agreement is brought, or, to Companyβs Knowledge,
threatened, against Company
and/or the
members of the board of directors of Company prior to the
Effective Time, Company shall give Buyer the opportunity to
participate in the defense or settlement of such litigation, and
no such settlement shall be agreed to without Buyerβs prior
written consent (not to be unreasonably withheld). Company shall
promptly notify Buyer of any such stockholder litigation
brought, or threatened, against Company
and/or
members of the board of directors of Company and keep Buyer
reasonably informed with respect to the status thereof.
Β
SectionΒ 5.19Β Β Dividend
Reinvestment and Common Stock Purchase
Plan.Β Β Company shall use all commercially
reasonable efforts to terminate the DRSPP as soon as practicable
after the date of this Agreement.
Β
SectionΒ 5.20Β Β Stock
Exchange De-listing.Β Β Prior to the Closing
Date, Company shall cooperate with Buyer and use reasonable best
efforts to take, or cause to be taken, all actions, and do or
cause to be done all things, reasonably necessary, proper or
advisable on its part under applicable Laws and rules and
policies of Nasdaq and the other exchanges on which the common
stock of Company is listed to enable the de-listing by the
Surviving Entity of the Company Common Stock from Nasdaq and the
other exchanges on which the Company Common Stock is listed and
the deregistration of the Company Common Stock under the
Exchange Act as promptly as practicable after the Effective
Time, and in any event no more than ten (10)Β days after the
Closing Date.
Β
SectionΒ 5.21Β Β Director
Resignations.Β Β Company shall use its best
efforts to cause to be delivered to Buyer resignations of all
the directors of Company and its Subsidiaries to be effective as
of the Effective Time.
Β
SectionΒ 5.22Β Β Coordination
of Dividends.Β Β After the date of this
Agreement, each of Buyer and Company shall coordinate with the
other the payment of dividends with respect to the Buyer Common
Stock and Company Common Stock and the record dates and payment
dates relating thereto, it being the intention of the parties
that holders of Company Common Stock shall not receive two
dividends, or fail to receive one dividend, for any single
calendar quarter with respect to their shares of Company Common
Stock or any share of Buyer Common Stock that any such holder
receives in exchange for such shares of Company Common Stock in
the Merger.
Β
SectionΒ 5.23Β Β Representation
on Buyer Board.Β Β Prior to the Closing, the
Board of Directors of Buyer and the Board of Directors of Buyer
Bank each shall increase by one (1)Β the number of directors
constituting the entire Boards of Directors of Buyer and Buyer
Bank, respectively, effective as of and contingent upon the
occurrence of the Effective Time, and by a vote of a majority of
the directors then in office of each of Buyer and Buyer Bank,
Buyer and Buyer Bank shall duly elect, from among those serving
on Companyβs Board of Directors as of the date of this
Agreement, an individual (the βDirector Designeeβ) to
fill such vacancies and thereby become a director of Buyer and
Buyer Bank, effective as of and contingent upon the occurrence
of the Effective Time. Buyer shall select the Director Designee
in its sole discretion. The Director Designee shall become a
member of the class of Buyerβs and Buyer Bankβs Boards
of Directors that has the longest time remaining until its
directorsβ terms expire.
Β
SectionΒ 5.24Β Β Coordination.
Β
(a)Β Company shall take any actions Buyer may reasonably
request prior to the Effective Time to facilitate the
consolidation of the operations of Company Bank with Buyer Bank.
Without limiting the foregoing, senior officers of Company and
Buyer shall meet from time to time as Company may reasonably
request, and in any event not less frequently than monthly, to
review the financial and operational affairs of Company and
Company Bank, and Company shall give due consideration to
Buyerβs input on such matters, with the understanding that,
notwithstanding any other provision contained in this Agreement,
neither Buyer nor Buyer Bank shall under any circumstance be
permitted to exercise control of Company or any of its
Subsidiaries prior to the Effective Time.
A-36
Β
(b)Β Upon Buyerβs reasonable request, prior to the
Effective Time and consistent with GAAP, the rules and
regulations of the SEC and applicable banking laws and
regulations, (i)Β each of Company and its Subsidiaries shall
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 Buyer,
(ii)Β Company shall use its reasonable best efforts to cause
Company Bank to divest itself of such investment securities and
loans as are identified by Buyer in writing from time to time
prior to the Closing Date, provided, however, that no such
modifications, changes or divestitures need be made prior to the
satisfaction of the conditions set forth in
SectionsΒ 6.01(a) and 6.01(b), and (iii)Β Company shall
make such accruals under the Company Benefit Plans as Buyer may
reasonably request to reflect the benefits payable under such
Company Benefit Plans upon the completion of the Merger.
Β
(c)Β Company and Company Bank shall, consistent with GAAP
and regulatory accounting principles, use their reasonable best
efforts to implement at Buyerβs request internal control
procedures which are consistent with Buyerβs and Buyer
Bankβs current internal control procedures to allow Buyer
to fulfill its reporting requirement under SectionΒ 404 of
the Xxxxxxxx-Xxxxx Act of 2002, provided, however, that no such
modifications, changes or divestitures need be made prior to the
satisfaction of the conditions set forth in
SectionsΒ 6.01(a) and 6.01(b).
Β
(d)Β No accrual or reserve or change in policy or procedure
made by Company or any of its Subsidiaries pursuant to this
SectionΒ 5.24 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 adjustment shall not be
deemed to imply any misstatement of previously furnished
financial statements or information and shall not be construed
as concurrence of Company or its management with any such
adjustments.
Β
SectionΒ 5.25Β Β Transactional
Expenses.Β Β The Company has provided at
Company Disclosure ScheduleΒ 3.34 a reasonable good
faith estimate of costs and fees that Company and its
Subsidiaries expect to pay to retained representatives in
connection with the transactions contemplated by this Agreement
(collectively, βCompany Expensesβ). Company shall use
its reasonable best efforts to cause the aggregate amount of all
Company Expense to not to exceed the total expenses disclosed in
Company Disclosure ScheduleΒ 3.34.Β Β Company
shall promptly notify Buyer if or when it determines that it
expects to exceed its budget. Company shall not incur investment
banking fees in connection with the Merger other than those
expressly provided for in the Engagement Letter.
Β
SectionΒ 5.26Β Β Charitable
Contribution.Β Β Promptly after the Effective
Time, Buyer shall make a contribution in the amount of $100,000
to an organization that (i)Β is designated in writing by
Company prior to the Closing, with the approval of the Board of
Directors of Company and (ii)Β qualifies as a tax-exempt
organization under tax-exempt under SectionΒ 501(c)(3) of
Code (the βCharitable Contributionβ).
Β
ARTICLEΒ VI.
Β
CONDITIONS
TO CONSUMMATION OF THE MERGER
Β
SectionΒ 6.01Β Β Conditions
to Obligations of the Parties to Effect the
Merger.Β Β The respective obligations of Buyer
and Company to consummate the Merger are subject to the
fulfillment or, to the extent permitted by applicable law,
written waiver by the parties hereto prior to the Closing Date
of each of the following conditions:
Β
(a)Β Shareholder Vote.Β Β This
Agreement and the transactions contemplated hereby shall have
been received the Requisite Company Shareholder Approval at the
Company Meeting.
Β
(b)Β Regulatory Approvals; No Burdensome
Condition.Β Β All consents and approvals of a
Governmental Authority required to consummate the transactions
contemplated hereby shall have been obtained and shall remain in
full force and effect and all statutory waiting periods in
respect thereof shall have expired
A-37
Β
or been terminated. None of such regulatory approvals shall
impose any term, condition or restriction upon Buyer or any of
its Subsidiaries that Buyer reasonably determines is a
Burdensome Condition.
Β
(c)Β No Injunctions or Restraints;
Illegality.Β Β No judgment, order, injunction or
decree issued by any court or agency of competent jurisdiction
or other legal restraint or prohibition preventing the
consummation of any of the transactions contemplated hereby
shall be in effect. No statute, rule, regulation, order,
injunction or decree shall have been enacted, entered,
promulgated or enforced by any Governmental Authority that
prohibits or makes illegal the consummation of any of the
transactions contemplated hereby.
Β
(d)Β Effective Registration
Statement.Β Β The Registration Statement shall
have become effective 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 or threatened by the SEC or any other Governmental
Authority.
Β
(e)Β Nasdaq Listing.Β Β The shares of
Buyer Common Stock issuable pursuant to this Agreement shall
have been approved for listing on Nasdaq, subject to official
notice of issuance.
Β
(f)Β Tax Opinions Relating to the
Merger.Β Β Company and Buyer, respectively,
shall have received opinions from Xxxxxxx XxxxxxxxΒ &
Wood llp and
Xxxxxx XxXxxxxxxΒ & Fish
llp, respectively,
each dated as of the Closing Date, in substance and form
reasonably satisfactory to Buyer and Company to the effect that,
on the basis of the facts, representations and assumptions set
forth in such opinion, the Merger will be treated for federal
income tax purposes as a βreorganizationβ within the
meaning of SectionΒ 368(a) of the Code. In rendering their
opinions, Xxxxxxx XxxxxxxxΒ & Wood
llp and Xxxxxx
XxXxxxxxxΒ & Fish
llp may require
and rely upon representations contained in certificates of
officers of each of Buyer and Company.
Β
SectionΒ 6.02Β Β Conditions
to Obligations of Company.Β Β The obligations of
Company to consummate the Merger also are subject to the
fulfillment or written waiver by Company prior to the Closing
Date of each of the following conditions:
Β
(a)Β Representations and
Warranties.Β Β The representations and
warranties of Buyer set forth in this Agreement shall be true
and correct in all material respects 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, in any case
subject to the standard set forth in SectionΒ 4.01. Company
shall have received a certificate, dated the Closing Date,
signed on behalf of Buyer by the Chief Executive Officer and the
Chief Financial Officer of Buyer to such effect.
Β
(b)Β Performance of Obligations of
Buyer.Β Β Buyer shall have performed and
complied with all of its obligations under this Agreement in all
material respects at or prior to the Closing Date, and Company
shall have received a certificate, dated the Closing Date,
signed on behalf of Buyer by the Chief Executive Officer and the
Chief Financial Officer of Buyer to such effect.
Β
(c)Β Approval of Charitable
Contribution.Β Β The Board of Directors of Buyer
shall have duly approved prior to the Closing the payment,
promptly after the Effective Time, of the Charitable
Contribution.
Β
(d)Β Other Actions.Β Β Buyer shall
have furnished Company with such certificates of its respective
officers or others and such other documents to evidence
fulfillment of the conditions set forth in SectionsΒ 6.01
and 6.02 as Company may reasonably request.
Β
SectionΒ 6.03Β Β Conditions
to Obligations of Buyer.Β Β The obligations of
Buyer to consummate the Merger also are subject to the
fulfillment or written waiver by Buyer prior to the Closing Date
of each of the following conditions:
Β
(a)Β Company Common
Stock.Β Β Notwithstanding the standard set forth
in SectionΒ 3.01, the number of shares of Company Common
Stock outstanding as of the Closing Date of this Agreement shall
not exceed 4,062,353, except to the extent increased as a result
of the exercise, after the date of this Agreement, of
A-38
Β
one or more stock option listed on the Company Disclosure
Schedule, provided such exercised in accordance with the terms
existing as of the date of this Agreement and disclosed on the
Company Disclosure Schedule.
Β
(b)Β Representations and
Warranties.Β Β The representations and
warranties of Company set forth in this Agreement shall be true
and correct in all material respects 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, in any case
subject to the standard set forth in SectionΒ 3.01. Buyer
shall have received a certificate, dated the Closing Date,
signed on behalf of Company by the Chief Executive Officer of
Company to such effect.
Β
(c)Β Performance of Obligations of
Company.Β Β Company shall have performed and
complied with all of its obligations under this Agreement in all
material respects at or prior to the Closing Date, and Buyer
shall have received a certificate, dated the Closing Date,
signed on behalf of Company by the Chief Financial Officer and
Chief Operating Officer of Company to such effect.
Β
(d)Β Voting Agreements.Β Β The Voting
Agreements shall have been executed and delivered by each
director and Executive Officer of Company concurrently with
Companyβs execution and delivery of this Agreement.
Β
(e)Β Plan of Bank Merger.Β Β The Plan
of Bank Merger substantially in the form of
ExhibitΒ B hereto shall have been executed and
delivered concurrently with Companyβs execution and
delivery of this Agreement.
Β
(f)Β Releases; Non-Competition
Agreements.Β Β Company shall have delivered to
Buyer releases, in the respective forms set forth on
ScheduleΒ 6.03(f)(1) and effective upon the
occurrence of the Effective Time, from the employees of Company
listed on ScheduleΒ 6.03(f)(1) hereto regarding
termination of employment as of the Effective Time and
satisfaction of all payments due to such employees including
payments due as a result of the Merger, the total amount of
which payments is shown on ScheduleΒ 6.03(f)(1) for
each such employee. Each of the Company employees listed on
ScheduleΒ 6.03(f)(2) shall have executed and
delivered to Buyer the Non-Competition Agreements in the forms
set forth on ScheduleΒ 6.03(f)(2).
Β
(g)Β Environmental Assessments.Β Β The
Environmental Assessments contemplated by SectionΒ 5.17
shall have been completed and such Environmental Assessments
shall not indicate the existence of any condition or matter with
respect to which it is reasonably likely that the cost set forth
in such Environmental Assessment of investigation, monitoring,
personal injury, property damage, clean up, remediation,
penalties, fines or other liabilities will exceed $50,000
individually or $100,000 in the aggregate.
Β
(h)Β Other Actions.Β Β Company shall
have furnished Buyer with such certificates of its officers or
others and such other documents to evidence fulfillment of the
conditions set forth in SectionsΒ 6.01 and 6.03 as Buyer may
reasonably request.
Β
SectionΒ 6.04Β Β Frustration
of Closing Conditions.Β Β Neither Buyer nor
Company may rely on the failure of any condition set forth in
SectionΒ 6.01, 6.02 or 6.03, as the case may be, to be
satisfied if such failure was caused by such partyβs
failure to use reasonable best efforts to consummate any of the
transactions contemplated hereby, as required by and subject to
SectionΒ 5.03.
Β
ARTICLEΒ VII.
Β
TERMINATION
Β
SectionΒ 7.01Β Β Termination.Β Β This
Agreement may be terminated, and the transactions contemplated
hereby may be abandoned:
Β
(a)Β Mutual Consent.Β Β At any time
prior to the Effective Time, by the mutual consent of Buyer and
Company if the Board of Directors of Buyer and the Board of
Directors of Company each so determines by vote of a majority of
the members of its entire Board.
A-39
Β
(b)Β No Regulatory Approval.Β Β By
Buyer or Company, if its Board of Directors or Board of
Directors, as applicable, 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
transactions contemplated hereby shall have been denied by
final, nonappealable action by such Governmental Authority or an
application therefor shall have been permanently withdrawn at
the request of a Governmental Authority.
Β
(c)Β No Shareholder Approval.Β Β By
either Buyer or Company (provided in the case of Company that it
shall not be in material breach of any of its obligations under
SectionΒ 5.04), if the Requisite Company Shareholder
Approval shall not have been obtained by reason of the failure
to obtain the required vote at a duly held meeting of such
shareholders or at any adjournment or postponement thereof.
Β
(d)Β Breach of Representations and
Warranties.Β Β By either Buyer or Company
(provided that the terminating party is not then in material
breach of any representation, warranty, covenant or other
agreement contained herein) if there shall have been a material
breach of any of the representations or warranties set forth in
this Agreement by the other party, which breach is not cured
prior to the earlier of (i)Β thirty (30)Β days following
written notice to the party committing such breach from the
other party hereto or (ii)Β two (2)Β Business Days prior
to the Termination Date, or which breach, by its nature, cannot
be cured prior to the Closing; provided, however, that neither
party shall have the right to terminate this Agreement pursuant
to this SectionΒ 7.01(d) unless the breach of representation
or warranty, together with all other such breaches, would
entitle the party receiving such representation or warranty not
to consummate the transactions contemplated hereby under
SectionΒ 6.02(a) or SectionΒ 6.02(b) (in the case of a
breach of a representation or warranty by Company) or
SectionΒ 6.03(a) (in the case of a breach of a
representation or warranty by Buyer).
Β
(e)Β Breach of Covenants.Β Β By either
Buyer or Company (provided that the terminating party is not
then in material breach of any representation, warranty,
covenant or other agreement contained herein) if there shall
have been a material breach of any of the covenants or
agreements set forth in this Agreement on the part of the other
party, which breach shall not have been cured prior to the
earlier of (i)Β thirty (30)Β days following written
notice to the party committing such breach from the other party
hereto or (ii)Β two (2)Β Business Days prior to the
Termination Date, or which breach, by its nature, cannot be
cured prior to the Closing, provided, however, that neither
party shall have the right to terminate this Agreement pursuant
to this SectionΒ 7.01(e) unless the breach of covenant or
agreement, together with all other such breaches, would entitle
the party receiving the benefit of such covenant or agreement
not to consummate the Merger under SectionΒ 6.02(b) (in the
case of a breach of a covenant or agreement by Company) or
SectionΒ 6.03(b) in the case of a breach of a representation
or warranty by Buyer).
Β
(f)Β Delay.Β Β By either Buyer or
Company if the Merger shall not have been consummated on or
before AprilΒ 30, 2008 (the βTermination Dateβ),
unless the failure of the Closing to occur by such date shall be
due to a material breach of this Agreement by the party seeking
to terminate this Agreement.
Β
(g)Β Superior Proposal.Β Β By Company
if at any time after the date of this Agreement and prior to
obtaining the Requisite Company Shareholder Approval, Company
receives an Acquisition Proposal; provided, however, that
Company shall not terminate this Agreement pursuant to the
foregoing clause unless:
Β
(i)Β Company shall have complied in all material respects
with SectionΒ 5.09 of this Agreement, including the
conclusion by the Board of Directors of Company in good faith
that such Acquisition Proposal is a Superior Proposal;
Β
(ii)Β Company concurrently pays the Termination Fee payable
pursuant to SectionΒ 7.02;Β and
Β
(iii)Β the Board of Directors of Company concurrently
approves, and Company concurrently enters into, a definitive
agreement with respect to such Superior Proposal.
Β
(h)Β Failure to Recommend; Third-Party Acquisition
Transaction; Etc.Β Β At any time prior to the
Company Meeting, by Buyer if (i)Β Company shall have
materially breached its obligations under
A-40
Β
SectionΒ 5.09, (ii)Β the Board of Directors of Company
shall have failed to make its recommendation referred to in
SectionΒ 5.04 or withdrawn such recommendation or modified
or changed such recommendation in a manner adverse in any
respect to the interests of Buyer, whether or not permitted by
SectionΒ 5.09, (iii)Β the Board of Directors of Company
shall have recommended, proposed, or publicly announced its
intention to recommend or propose, to engage in an Acquisition
Transaction with any Person other than Buyer or a Subsidiary or
Affiliate of Buyer, whether or not permitted by
SectionΒ 5.09, or (iv)Β Company shall have materially
breached its obligations under SectionΒ 5.04 by failing to
call, give notice of, convene and hold the Company Meeting in
accordance with SectionΒ 5.04.
Β
(i)Β Possible Adjustment.Β Β By
Company by giving written notice to Buyer not later than the end
of the second Business Day after the tenth Nasdaq trading day
immediately following the Determination Date, in the event that
both of the following conditions are satisfied:
Β
(i)Β the Average Closing Price shall be less than 80% of the
Reference Price;Β and
Β
(ii)Β the number obtained by dividing the Average Closing
Price by the Reference Price (the βBuyer Ratioβ) is
less than the number obtained by dividing the Final Index Price
by the Initial Index Price and then multiplying the quotient in
this clause by .80 (the βIndex Ratioβ).
Β
If Company elects to exercise its termination right pursuant to
this SectionΒ 7.01(i), it shall give written notice to
Buyer. During the five-Business-Day period commencing with its
receipt of such notice, Buyer may, at its sole option (the
βFill Optionβ), offer to either (x)Β adjust the
Exchange Ratio to a level equal to a quotient (rounded to the
nearest one thousandth), the numerator of which is the product
of the Reference Price multiplied by the lesser of the Index
Ratio or .80 multiplied by the Exchange Ratio (as then in
effect) and the denominator of which is the Average Closing
Price, or (y)Β augment the Stock Consideration with a cash
payment per share of Company Common Stock in the amount equal to
(1)Β if the Index Ratio is greater than or equal to 0.8, the
sum obtained by subtracting the Average Closing Price from 80%
of the Reference Price multiplied by the Exchange Ratio, or
(2)Β the sum obtained by subtracting (a)Β the product of
the Average Closing Price multiplied by the Exchange Ratio from
(b)Β the product of the Reference Price multiplied by the
Index Ratio multiplied by the Exchange Ratio. Buyer may not
exercise its Fill Option under clauseΒ (y) of the
immediately preceding sentence if it would preclude satisfaction
of the condition in SectionΒ 6.01(f). If Buyer makes either
of the elections contemplated by this SectionΒ 7.01(i), it
shall give prompt written notice to Company of such adjusted
Stock Consideration, and any references in this Agreement to
βStock Considerationβ shall thereafter be deemed to
refer to the Stock Consideration as adjusted pursuant to this
Section 7.01(i).
Β
If Buyer 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.
Β
SectionΒ 7.02Β Β Termination
Fee; Reimbursement.
Β
(a)Β In recognition of the efforts, expenses and other
opportunities foregone by Buyer while structuring and pursuing
the Merger, Company shall pay to Buyer by wire transfer of
immediately available funds a termination fee equal to
$3,500,000 (the βTermination Feeβ)
Β
(i)Β in the event Company terminates this Agreement pursuant
to SectionΒ 7.01(g), in which case Company shall pay the
Termination Fee at or prior to the time of such
termination,Β and
Β
(ii)Β in the event Buyer terminates this Agreement pursuant
to SectionΒ 7.01(h), in which case Company shall pay the
Termination Fee as promptly as practicable (but in any event
within three (3)Β Business Days).
Β
(b)Β In the event that (A) (I)Β an Acquisition Proposal,
whether or not conditional, shall have been publicly announced
or otherwise communicated or made known to Companyβs senior
management or the Board of Directors of Company (or any Person
shall have publicly announced, communicated or made known an
intention, whether or not conditional, to make an Acquisition
Proposal) or (II)Β the Board of Directors of
A-41
Β
Company shall have withheld, withdrawn or modified (or publicly
proposed to withhold, withdraw or modify), in a manner adverse
to Buyer, its recommendation referred to in SectionΒ 5.04 to
the extent permitted under SectionΒ 5.09(c) prior to or on
the date of the Company Meeting or at any adjournment or
postponement thereof at which the vote on the Merger is held,
(B)Β this Agreement is terminated by either Buyer or Company
pursuant to SectionΒ 7.01(c) or SectionΒ 7.01(f) or by
Buyer pursuant to SectionΒ 7.01(d) or SectionΒ 7.01(e),
and (C)Β within 12Β months following the date of such
termination, Company enters into a definitive agreement with
respect to any Acquisition Transaction, or Company consummates
any Acquisition Transaction (whether or not such Acquisition
Transaction resulted from or was related to the Acquisition
Proposal referred to in the foregoing clause (A)(I), if
applicable), then Company shall pay Buyer the Termination Fee,
less the Buyer Reimbursement Amount, which amount shall be
payable by wire transfer of immediately available funds on or
prior to the earlier of Company entering into a definitive
agreement for or consummating such Acquisition Transaction.
Β
(c)Β In the event that this Agreement is terminated by Buyer
under the provisions referred to in clauseΒ (B) of
SectionΒ 7.02(b) (or could have been terminated under such
section) and the circumstances referred to in clause (A)(I) or
(A)(II) of SectionΒ 7.02(b) shall have occurred prior to
such termination but the Termination Fee has not been paid and
is not payable because the circumstances referred to in
clauseΒ (C) of SectionΒ 7.02(b) shall not have occurred,
then Company shall pay at Buyerβs direction as promptly as
possible (but in any event within three (3)Β Business Days)
following receipt of an invoice therefor up to $750,000 of
Buyerβs and its Subsidiaries reasonably documented
out-of-pocket fees and expenses (including legal fees and
expenses) actually incurred by Buyer and its Subsidiaries prior
to the termination of this Agreement proximately in connection
with the negotiation, execution, delivery and performance of
this Agreement by Buyer and Buyer Bank (the βBuyer
Reimbursement Amountβ).
Β
(d)Β Company and Buyer each agree that the agreements
contained in this SectionΒ 7.02 are an integral part of the
transactions contemplated by this Agreement, and that, without
these agreements, Buyer would not enter into this Agreement;
accordingly, if Company fails promptly to pay any amounts due
under this SectionΒ 7.02 and, in order to obtain such
payment, Buyer commences a suit that results in a judgment
against Company for such amounts, Company shall pay interest on
such amounts from the date payment of such amounts were due to
the date of actual payment at the rate of interest equal to the
sum of (x)Β the rate of interest published from time to time
in The Wall Street Journal, Eastern Edition (or any successor
publication thereto), designated therein as the prime rate on
the date such payment was due, plus (y)Β 200Β basis
points, together with the costs and expenses of Buyer (including
reasonable legal fees and expenses) in connection with such suit.
Β
SectionΒ 7.03Β Β Effect
of Termination and Abandonment.Β Β In the event
of termination of this Agreement and the abandonment of the
Merger pursuant to this ArticleΒ VII, no party to this
Agreement shall have any liability or further obligation to any
other party hereunder except (i)Β as set forth in
SectionΒ 7.02 and SectionΒ 9.01 and (ii)Β that
termination will not relieve a breaching party from liability
for any willful breach of any covenant, agreement,
representation or warranty of this Agreement giving rise to such
termination.
Β
ARTICLEΒ VIII.
Β
DEFINITIONS
Β
SectionΒ 8.01Β Β Definitions.Β Β The
following terms are used in this Agreement with the meanings set
forth below:
Β
βAcquisition Proposalβ means any proposal or
offer with respect to any of the following (other than the
Transactions contemplated hereby) involving Company:
(a)Β any merger, consolidation, share exchange, business
combination or other similar transaction; (b)Β any sale,
lease, exchange, mortgage, pledge, transfer or other disposition
of assets
and/or
liabilities that constitute a substantial portion of the net
revenues, net income or assets of Company in a single
transaction or series of transactions; (c)Β any tender offer
or exchange offer for 25% or more of the outstanding shares of
its capital stock or the filing of a registration statement
under the Securities Act of 1933, as amended, in connection
therewith; or (d)Β any public
A-42
Β
announcement by any Person (which shall include any regulatory
application or notice, whether in draft or final form) of a
proposal, plan or intention to do any of the foregoing or any
agreement to engage in any of the foregoing.
Β
βAcquisition Transactionβ means any of the
following (other than the transactions contemplated hereby)
involving Company: (a)Β any merger, consolidation, share
exchange, business combination or other similar transaction;
(b)Β any sale, lease, exchange, mortgage, pledge, transfer
or other disposition of assets
and/or
liabilities that constitute a substantial portion of the net
revenues, net income or assets of Company in a single
transaction or series of transactions; or (c)Β any tender
offer or exchange offer for 25% or more of the outstanding
shares of its capital stock or the filing of a registration
statement under the Securities Act if 1933, as amended, in
connection therewith.
Β
βAffiliateβ means, with respect to any Person,
any other Person controlling, controlled by or under common
control with such Person. As used in this definition,
βcontrolβ (including, with its correlative meanings,
βcontrolled byβ and βunder common control
withβ) means the possession, directly or indirectly, of
power to direct or cause the direction of the management and
policies of a Person whether through the ownership of voting
securities, by contract or otherwise.
Β
βAgreementβ means this Agreement, as amended or
modified from time to time in accordance with SectionΒ 9.02.
Β
βArticles of Mergerβ has the meaning set forth
in SectionΒ 1.04(a).
Β
βAverage Closing Priceβ of the Buyer Common
Stock shall be determined by obtaining the closing prices per
share of Buyer Common Stock on Nasdaq (as reported by the Wall
Street Journal or, if not reported thereby, another
authoritative source), for the 10 consecutive Nasdaq trading
days next following the Determination Date, discarding the one
highest and the one lowest closing prices, and averaging the
remaining closing prices.
Β
βBank Mergerβ has the meaning set forth in the
recitals.
Β
βBOLIβ has the meaning set forth in
SectionΒ 3.30(b).
Β
βBusiness Dayβ means Monday through Friday of
each week, except a legal holiday recognized as such by the
U.S.Β Government or any day on which banking institutions in
the Commonwealth of Massachusetts are authorized or obligated to
close.
Β
βBurdensome Conditionsβ has the meaning set
forth in SectionΒ 5.06(a).
Β
βBuyerβ has the meaning set forth in the
preamble to this Agreement.
Β
βBuyer 2006
FormΒ 10-Kβ
has the meaning set forth in SectionΒ 4.05(a).
Β
βBuyer Bankβ has the meaning set forth in the
preamble to this Agreement.
Β
βBuyer Benefit Plansβ has the meaning set forth
in SectionΒ 4.13(a).
Β
βBuyer Common Stockβ means the common stock,
$0.01Β par value per share, of Company.
Β
βBuyer Pension Planβ has the meaning set forth
in SectionΒ 4.13(b).
Β
βBuyer Ratioβ has the meaning set forth in
SectionΒ 7.01(i).
Β
βBuyer Reimbursement Amountβ has the meaning
set forth in SectionΒ 7.02(c).
Β
βBuyer SEC Documentsβ has the meaning set forth
in SectionΒ 4.05(a).
Β
βCash Considerationβ has the meaning set forth
in SectionΒ 2.01(c).
Β
βCash Electionβ has the meaning set forth in
SectionΒ 2.04(a).
Β
βCash Election Sharesβ has the meaning set
forth in SectionΒ 2.04(a).
A-43
Β
βCertificateβ means any certificate which
immediately prior to the Effective Time represents shares of
Company Common Stock.
Β
βChange in Recommendationβ has the meaning set
forth in SectionΒ 5.04.
Β
βCharitable Contributionβ has the meaning set
forth in SectionΒ 5.26.
Β
βClosingβ and βClosing Dateβ have the
meanings set forth in SectionΒ 1.04(b).
Β
βCodeβ means the Internal Revenue Code of 1986,
as amended.
Β
βCommunity Reinvestment Actβ means the
Community Reinvestment Act of 1977, as amended.
Β
βCompanyβ has the meaning set forth in the
preamble to this Agreement.
Β
βCompany 2006
FormΒ 10-Kβ
has the meaning set forth in SectionΒ 3.08(a).
Β
βCompany Balance Sheetβ has the meaning set
forth in SectionΒ 3.08(a).
Β
βCompany Balance Sheet Dateβ has the meaning
set forth in SectionΒ 3.08(a).
Β
βCompany Bankβ has the meaning set forth in the
preamble to this Agreement.
Β
βCompany Benefit Plansβ has the meaning set
forth in SectionΒ 3.14(a).
Β
βCompany Common Stockβ means the common stock,
$0.01Β par value per share, of Company.
Β
βCompany Disclosure Scheduleβ means the
disclosure schedule delivered by Company to Buyer on or prior to
the date hereof setting forth, among other things, items the
disclosure of which is necessary or appropriate either in
response to an express provision of this Agreement or as an
exception to one or more of its representations and warranties
in ArticleΒ III or its covenants in ArticleΒ V.
Β
βCompany Employeesβ has the meaning set forth
in SectionΒ 3.14(a).
Β
βCompany Expensesβ has the meaning set forth in
SectionΒ 5.25.
Β
βCompany Intellectual Propertyβ means the
Intellectual Property used in or held for use in the conduct of
the business of Company and its Subsidiaries.
Β
βCompany Loan Propertyβ has the meaning set
forth in SectionΒ 3.16(a).
Β
βCompany Meetingβ has the meaning set forth in
SectionΒ 5.04.
Β
βCompany Option Planβ has the meaning set forth
in SectionΒ 2.07.
Β
βCompany Pension Planβ has the meaning set
forth in SectionΒ 3.14(b).
Β
βCompany SEC Documentsβ has the meaning set
forth in SectionΒ 3.08(a).
Β
βCompany Severance Pay Planβ has the meaning
set forth in SectionΒ 5.11(e).
Β
βD&O Insuranceβ has the meaning set forth
in SectionΒ 5.10(c).
Β
βDerivative Transactionβ means any swap
transactions, option, warrant, forward purchase or sale
transactions, futures transactions, cap transactions, floor
transactions or collar transactions relating to one or more
currencies, commodities, bonds, equity securities, loans,
interest rates, catastrophe events, weather-related events,
credit-related events or conditions or any indexes, or any other
similar transactions (including any option with respect to any
of these transactions) or combination of any of these
transactions, including collateralized mortgage obligations or
other similar instruments or any debt or equity instruments
evidencing or embedding any such types of transactions, and any
related credit support, collateral or other similar arrangements
related to such transactions.
Β
βDetermination Dateβ 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.
Β
βDRSPPβ has the meaning set forth in
SectionΒ 5.01(y).
A-44
Β
βEffective Dateβ has the meaning set forth in
SectionΒ 1.04(a).
Β
βEffective Timeβ has the meaning set forth in
SectionΒ 1.04(a).
Β
βElection Deadlineβ has the meaning set forth
in SectionΒ 2.04(a).
Β
βElection Formβ has the meaning set forth in
SectionΒ 2.04(a).
Β
βEngagement Letterβ means that certain letter
agreement dated JulyΒ 25, 2007 between Xxxxx,
XxxxxxxxΒ & Xxxxx, Inc. and Company.
Β
βEnvironmental Assessmentβ has the meaning set
forth in SectionΒ 3.16(a).
Β
βEnvironmental Lawβ means any federal, state or
local law, regulation, order, decree, permit, authorization,
opinion or agency requirement relating to: (a)Β the
protection or restoration of the environment, human health and
safety, or natural resources, (b)Β the handling, use,
presence, disposal, release or threatened release of any
Hazardous Substance or (c)Β wetlands, indoor air, pollution,
contamination or any injury or threat of injury to persons or
property in connection with any Hazardous Substance. The term
Environmental Law includes, but is not limited to, the following
statutes, as amended, any successor thereto, and any regulations
promulgated pursuant thereto, and any state or local statutes,
ordinances, rules, regulations and the like addressing similar
issues: (a)Β the Comprehensive Environmental Response,
Compensation and Liability Act, as amended, 42Β U.S.C.
§ 9601 et seq.; the Resource Conservation and Recovery
Act, as amended, 42 U.S.C. § 6901, et seq.; the
Clean Air Act, as amended, 42 U.S.C. § 7401, et
seq.; the Federal Water Pollution Control Act, as amended,
33 U.S.C. § 1251, et seq.; the Toxic Substances
Control Act, as amended, 15 U.S.C. § 2601, et
seq.; the Emergency Planning and Community Right to Know Act,
42 U.S.C. § 1101, et seq.; the Safe Drinking
Water Act; 42 U.S.C. § 300f, et seq.; the
Occupational Safety and Health Act, 29Β U.S.C.
§ 651, et seq.; (b) common law that may impose
liability (including without limitation strict liability) or
obligations for injuries or damages due to the presence of or
exposure to any Hazardous Substance.
Β
βEqual Credit Opportunity Actβ means the Equal
Credit Opportunity Act, as amended.
Β
βERISAβ means the Employee Retirement Income
Security Act of 1974, as amended.
Β
βERISA Affiliateβ has the meaning set forth in
SectionΒ 3.14(c).
Β
βExchange Actβ has the meaning set forth in
SectionΒ 3.08(a). βExchange Agentβ means such
exchange agent as may be designated by Buyer and reasonably
acceptable to Company to act as agent for purposes of conducting
the exchange procedures described in SectionΒ 2.04.
Β
βExchange Fundβ has the meaning set forth in
SectionΒ 2.05(a).
Β
βExchange Ratioβ has the meaning set forth in
SectionΒ 2.01(c).
Β
βExecutive Officerβ means each officer of
Company who files reports with the SEC pursuant to
SectionΒ 16(a) of the Exchange Act.
Β
βFDIAβ has the meaning set forth in
SectionΒ 3.25.
Β
βFair Housing Actβ means the Fair Housing Act,
as amended.
Β
βFDICβ means the Federal Deposit Insurance
Corporation.
Β
βFHLBβ means the Federal Home Loan Bank of
Boston.
Β
βFill Optionβ has the meaning set forth in
SectionΒ 7.01(i).
Β
βFinal Index Priceβ means the closing index
value of the NASDAQ Bank Index compiled and reported by The
Nasdaq Stock Market, Inc. on the trading day immediately
preceding the Determination Date.
Β
βFRBβ means the Federal Reserve Bank of Boston.
A-45
Β
βGAAPβ means accounting principles generally
accepted in the United States of America.
Β
βGovernmental Authorityβ means any federal,
state or local court, administrative agency or commission or
other governmental authority or instrumentality.
Β
βHazardous Substanceβ means any and all
substances (whether solid, liquid or gas) defined, listed, or
otherwise classified as pollutants, hazardous wastes, hazardous
substances, hazardous materials, extremely hazardous wastes,
flammable or explosive materials, radioactive materials or words
of similar meaning or regulatory effect under any present or
future Environmental Law or that may have a negative impact on
human health or the environment, including but not limited to
petroleum and petroleum products, asbestos and
asbestos-containing materials, polychlorinated biphenyls, lead,
radon, radioactive materials, flammables and explosives, mold,
mycotoxins, microbial matter and airborne pathogens (naturally
occurring or otherwise). Hazardous Substance does not include
substances of kinds and in amounts ordinarily and customarily
used or stored for the purposes of cleaning or other maintenance
or operations.
Β
βIndemnified Partiesβ and βIndemnifying
Partyβ have the meanings set forth in SectionΒ 5.10(a).
Β
βIndex Groupβ means the companies classified
according to the Industry Classification Benchmark (published
jointly by Dow Xxxxx Company, Inc. and FTSE International, Inc.)
as βBanksβ and included in the Nasdaq Bank Index.
Β
βIndex Ratioβ has the meaning set forth in
SectionΒ 7.01(i).
Β
βInitial Index Priceβ means the closing index
value of the NASDAQ Bank Index compiled and reported by The
Nasdaq Stock Market, Inc. on the trading day immediately
preceding the public announcement of the Agreement.
Β
βInformational Systems Conversionβ has the
meaning set forth in SectionΒ 5.15.
Β
βInsurance Policiesβ has the meaning set forth
in SectionΒ 3.30(a).
Β
βIntellectual Propertyβ means
(a)Β trademarks, service marks, trade names, Internet domain
names, designs, logos, slogans, and general intangibles of like
nature, together with all goodwill, registrations and
applications related to the foregoing; (b)Β patents and
industrial designs (including any continuations, divisionals,
continuations-in-part,
renewals, reissues, and applications for any of the foregoing);
(c)Β copyrights (including any registrations and
applications for any of the foregoing); (d)Β Software; and
(e)Β technology, trade secrets and other confidential
information, know-how, proprietary processes, formulae,
algorithms, models, and methodologies.
Β
βIRSβ means the Internal Revenue Service.
Β
βKnowledgeβ of any Person (including references
to such Person being aware of a particular matter) as used with
respect to Company and its Subsidiaries means those facts that
are actually known, after reasonably inquiry, by the officers of
Company and Company Bank listed on ScheduleΒ 8.01(a)
hereto and the directors of Company and Company Bank, and as
used with respect to Buyer and its Subsidiaries means those
facts that are actually known, after reasonably inquiry, by the
officers of Buyer listed on ScheduleΒ 8.01(b) hereto.
Without limiting the scope of the immediately preceding
sentence, (i)Β the term βKnowledgeβ includes any
fact, matter or circumstance set forth in any written notice
from any Governmental Authority, and (ii)Β each officer
listed on ScheduleΒ 8.01(a) or
ScheduleΒ 8.01(b) shall have made reasonable inquiry
of the employees responsible for such matter in question (it
being understood and agreed that prior to the execution and
delivery of this Agreement, no inquiry need be made if it could
reasonably be expected to compromise the confidentiality of the
negotiations between Company and Buyer), and if any such officer
does not make such reasonable inquiry, then such officer shall
be deemed to have actual knowledge of those facts or matters
that such officer would have had, had he or she made such
inquiry.
Β
βLawβ means any statute, law, ordinance, rule
or regulation of any Governmental Authority that is applicable
to the referenced Person.
A-46
Β
βLeasesβ has the meaning set forth in
SectionΒ 3.28(b).
Β
βLiensβ means any charge, mortgage, pledge,
security interest, restriction, claim, lien or encumbrance,
conditional and installment sale agreement, charge or other
claim of third parties of any kind.
Β
βLoansβ has the meaning set forth in
SectionΒ 3.21(a).
Β
βMailing Dateβ has the meaning set forth in
SectionΒ 2.04(a).
Β
βMaterial Adverse Effectβ means (a)Β with
respect to any Person, any effect that is material and adverse
to the financial position, results of operations or business of
such Person and its Subsidiaries, taken as a whole, or which
would materially impair the ability of such Person to perform
its obligations under this Agreement or otherwise materially
impairs the ability of such Person to consummate the
transactions contemplated hereby; provided, however, that
Material Adverse Effect shall not be deemed to include the
impact of (i)Β changes in banking and similar laws of
general applicability or interpretations thereof by Governmental
Authorities, (ii)Β changes in GAAP or regulatory accounting
requirements applicable to banks or bank holding companies
generally, (iii)Β any modifications or changes to Company
valuation policies and practices in connection with the
transactions contemplated hereby or restructuring charges taken
in connection with the transactions contemplated hereby, in each
case in accordance with GAAP and with Buyerβs prior written
consent, (iv)Β changes after the date of this Agreement in
general economic or capital market conditions affecting
financial institutions or their market prices generally and not
disproportionately affecting Company or Buyer, including, but
not limited to, changes in levels of interest rates generally,
(v)Β the effects of compliance with this Agreement on the
operating performance of Company or Buyer, including the
expenses incurred by Company or Buyer in consummation of the
transactions contemplated by this agreement, (vi)Β the
effects of any action or omission taken by Company with the
prior consent of Buyer, and vice versa, or as otherwise
expressly permitted or contemplated by this Agreement.
Β
βMaterial Contractsβ has the meaning set forth
in SectionΒ 3.12(a).
Β
βMaximum Annual D&O Premiumβ has the
meaning set forth in SectionΒ 5.10(c).
Β
βMergerβ has the meaning set forth in the
recitals.
Β
βMerger Considerationβ has the meaning set
forth in SectionΒ 2.01(c).
Β
βNasdaqβ has the meaning set forth in
SectionΒ 2.03.
Β
βNew Certificatesβ has the meaning set forth in
SectionΒ 2.05(a).
Β
βNon-Electionβ has the meaning set forth in
SectionΒ 2.04(a).
Β
βNon-Election Sharesβ has the meaning set forth
in SectionΒ 2.04(a).
Β
βNotice Periodβ has the meaning set forth in
SectionΒ 5.09(d).
Β
βOptionsβ has the meaning set forth in
SectionΒ 2.07.
Β
βOREOβ has the meaning set forth in
SectionΒ 3.21(a).
Β
βPersonβ means any individual, bank,
corporation, partnership, association, joint-stock company,
business trust, limited liability company, unincorporated
organization or other organization or firm of any kind or nature.
Β
βPhase I Assessmentβ has the meaning set forth
in SectionΒ 3.16(a).
Β
βPhaseΒ II Assessmentβ has the meaning set
forth in SectionΒ 3.16(a).
Β
βPlan of Bank Mergerβ means the
agreement and
plan of merger, substantially in the form of
ExhibitΒ B hereto, to be entered into between Buyer
Bank and Company Bank providing for the Bank Merger, it being
intended that the Bank Merger be consummated immediately
following consummation of the Merger.
A-47
Β
βProxy Statement-Prospectusβ means the Proxy
Statement-Prospectus, together with any amendments and
supplements thereto, to be delivered to holders of Company
Common Stock in connection with the solicitation of their
approval of this Agreement.
Β
βReference Priceβ shall be determined by
obtaining the closing prices per share of Buyer Common Stock on
Nasdaq (as reported by the Wall Street Journal or, if not
reported thereby, another authoritative source), for the 10
consecutive Nasdaq trading days ending on and including the last
trading day immediately prior to the date on which the execution
of this Agreement is publicly announced, discarding the one
highest and the one lowest closing prices, and averaging the
remaining closing prices.
Β
βRegistration Statementβ has the meaning set
forth in SectionΒ 4.10.
Β
βRequisite Company Shareholder Approvalβ has
the meaning set forth in SectionΒ 3.06.
Β
βRightsβ 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.
Β
βXxxxxxxx-Xxxxxβ has the meaning set forth in
SectionΒ 3.08(b).
Β
βSECβ means the Securities and Exchange
Commission.
Β
βSecurities Actβ has the meaning set forth in
SectionΒ 3.08(a).
Β
βShortfall Numberβ has the meaning set forth in
SectionΒ 2.04(c).
Β
βSoftwareβ means computer programs, whether in
source code or object code form (including any and all software
implementation of algorithms, models and methodologies),
databases and compilations (including any and all data and
collections of data), and all documentation (including user
manuals and training materials) related to the foregoing.
Β
βStock Considerationβ has the meaning set forth
in SectionΒ 2.01(c).
Β
βStock Conversion Numberβ has the meaning set
forth in SectionΒ 2.04(a).
Β
βStock Electionβ has the meaning set forth in
SectionΒ 2.04(a).
Β
βStock Election Numberβ has the meaning set
forth in SectionΒ 2.04(a).
Β
βStock Election Sharesβ has the meaning set
forth in SectionΒ 2.04(a).
Β
βSubsidiaryβ means, with respect to any party,
any corporation or other entity of which a majority of the
capital stock or other ownership interest having ordinary voting
power to elect a majority of the board of directors or other
persons performing similar functions are at the time directly or
indirectly owned by such party. Any reference in this Agreement
to a Company subsidiary means, unless the context otherwise
requires, any current or former Subsidiary of Company.
Β
βSuperior Proposalβ means any bona fide written
proposal made by a third party to acquire, directly or
indirectly, including pursuant to a tender offer, exchange
offer, merger, consolidation, business combination,
recapitalization, liquidation, dissolution or similar
transaction, for consideration consisting of cash
and/or
securities, more than 50% of the combined voting power of the
shares of Company Common Stock then outstanding or all or
substantially all of the assets of Company and otherwise
(a)Β on terms which the Board of Directors of Company
determines in good faith, after consultation with its financial
advisor, to be more favorable from a financial point of view to
Companyβs shareholders than the transactions contemplated
hereby, (b)Β that constitutes a transaction that, in the
good faith judgment of the Board of Directors of Company, is
reasonably likely to be consummated on the terms set forth,
taking into account all legal, financial, regulatory and other
aspects of such proposal, and (c)Β for which financing, to
the extent required, is then committed.
Β
βSurviving Entityβ has the meaning set forth in
SectionΒ 1.01.
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Β
βTaxβ and βTaxesβ 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.
Β
βTax Returnsβ means any return, declaration or
other report (including elections, declarations, schedules,
estimates and information returns) with respect to any Taxes.
Β
βTermination Dateβ has the meaning set forth in
SectionΒ 7.01(f).
Β
βTermination Feeβ has the meaning set forth in
SectionΒ 7.02(a).
Β
βUSA Patriot Actβ means the USA Patriot Act of
2001, Public Law
107-56, and
the regulations promulgated thereunder.
Β
βVoting Agreementβ has the meaning set forth in
the recitals.
Β
ARTICLEΒ IX.
Β
MISCELLANEOUS
Β
SectionΒ 9.01Β Β Survival.Β Β 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) or the
termination of this Agreement if this Agreement is terminated
prior to the Effective Time (other than SectionsΒ 4.08(b),
6.02 and, excepting SectionΒ 9.12 hereof, this
ArticleΒ IX, which shall survive any such termination).
Notwithstanding anything in the foregoing to the contrary, no
representations, warranties, agreements and covenants contained
in this Agreement shall be deemed to be terminated or
extinguished so as to deprive a party hereto or any of its
affiliates of any defense at law or in equity which otherwise
would be available against the claims of any Person, including
without limitation any shareholder or former shareholder.
Β
SectionΒ 9.02Β Β Waiver;
Amendment.Β Β Prior to the Effective Time, any
provision of this Agreement may be (a)Β waived by the party
benefited by the provision or (b)Β 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
Company Meeting no amendment shall be made which by law requires
further approval by the shareholders of Company without
obtaining such approval.
Β
SectionΒ 9.03Β Β Governing
Law.
Β
(a)Β This Agreement shall be governed by, and interpreted in
accordance with, the laws of the Commonwealth of Massachusetts,
without regard for conflict of law provisions.
Β
(b)Β EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY
WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE
COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY
HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH
PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION
DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS
AGREEMENT, OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT.
EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (i)Β NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING
WAIVER, (ii)Β EACH PARTY UNDERSTANDS AND HAS CONSIDERED THE
IMPLICATIONS OF THIS WAIVER, (iii)Β EACH PARTY MAKES THIS
WAIVER VOLUNTARILY, AND (iv)Β EACH PARTY HAS BEEN INDUCED TO
ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL
WAIVERS AND CERTIFICATIONS IN THIS SECTIONΒ 9.03.
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Β
SectionΒ 9.04Β Β Expenses.Β Β Except
as otherwise provided in SectionΒ 7.02, 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, provided that nothing contained herein shall limit
either partyβs rights to recover any liabilities or damages
arising out of the other partyβs willful breach of any
provision of this Agreement.
Β
SectionΒ 9.05Β Β Notices.Β Β All
notices, requests and other communications hereunder to a party
shall be in writing and shall be deemed given if personally
delivered, mailed by registered or certified mail (return
receipt requested) or sent by reputable courier service to such
party at its address set forth below or such other address as
such party may specify by notice to the parties hereto.
Β
If to Buyer:
Β
000 Xxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxx, General Counsel
Fax:
(000)Β 000-0000
Β
With a copy (which shall not constitute notice) to:
Β
Xxxxxx XxXxxxxxxΒ & Fish
llp
World Trade Center West
000 Xxxxxxx Xxxxxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxx,Β Esq.
Fax:
(000)Β 000-0000
Β
If to Company:
Β
Xxxxxβx Ferry Bancorp.
100 Xxxxxβx Ferry Avenue
Somerset, Massachusetts 02726
Attention: Xxxx Xxxx X. Xxxx, President and Chief Executive
Officer
Fax:
(000)Β 000-0000
Β
With a copy (which shall not constitute notice) to:
Β
Xxxxxxx XxxxxxxxΒ &
Wood llp
0000 Xxxxxxxxxxxx Xxxxxx, XX
XxxxxΒ 000
Xxxxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxxx,Β Esq.
Fax:
(000)Β 000-0000
Β
SectionΒ 9.06Β Β Entire
Understanding; No Third Party
Beneficiaries.Β Β This Agreement, the Plan of
Bank Merger, and the Voting Agreement represent the entire
understanding of the parties hereto and thereto with reference
to the transactions contemplated hereby, and this Agreement, the
Plan of Bank Merger, and the Voting Agreement supersede any and
all other oral or written agreements heretofore made. Except as
provided in SectionΒ 5.10 (Indemnification) only, Buyer and
Company hereby agree that their respective representations,
warranties and covenants set forth herein are solely for the
benefit of the other party hereto, in accordance with and
subject to the terms of this Agreement, and this Agreement is
not intended to, and does not, confer upon any Person (including
any person or Employees who might be affected by
SectionΒ 5.11), other than the parties hereto, any rights or
remedies hereunder, including, the right to rely upon the
representations and warranties set forth herein. The
representations and warranties in this Agreement are the product
of negotiations among the parties hereto and are for the sole
benefit of the parties hereto. Any inaccuracies in such
representations and warranties are subject to waiver by the
parties hereto in accordance with SectionΒ 9.02 without
notice or liability to any other Person. In some instances, the
representations and warranties in this
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Β
Agreement may represent an allocation among the parties hereto
of risks associated with particular matters regardless of the
knowledge of any of the parties hereto. Consequently, Persons
other than the parties hereto may not rely upon the
representations and warranties in this Agreement as
characterizations of actual facts or circumstances as of the
date of this Agreement or as of any other date.
Β
SectionΒ 9.07Β Β Severability.Β Β In
the event that any one or more provisions of this Agreement
shall for any reason be held invalid, illegal or unenforceable
in any respect, by any court of competent jurisdiction, such
invalidity, illegality or unenforceability shall not affect any
other provisions of this Agreement and the parties shall use
their reasonable efforts to substitute a valid, legal and
enforceable provision which, insofar as practical, implements
the purposes and intents of this Agreement.
Β
SectionΒ 9.08Β Β Enforcement
of the Agreement.Β Β 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.
Β
SectionΒ 9.09Β Β Interpretation.Β Β 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 βinclude,β βincludesβ or
βincludingβ are used in this Agreement, they shall be
deemed to be followed by the words βwithout
limitation.β
Β
SectionΒ 9.10Β Β Assignment.Β Β 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.
Β
SectionΒ 9.11Β Β Alternative
Structure.Β Β Notwithstanding any provision of
this Agreement to the contrary, Buyer may at any time modify the
structure of the acquisition of Company set forth herein,
subject to the prior written consent of Company, which consent
shall not be unreasonably withheld or delayed, provided that
(a)Β 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 (except as expressly
permitted if Buyer exercises the Fill Option) and (b)Β such
modification will not materially delay or jeopardize receipt of
any required approvals of Governmental Authorities or otherwise
materially delay consummation of the transactions contemplated
hereby.
Β
SectionΒ 9.12Β Β Counterparts.Β Β This
Agreement may be executed by facsimile and in one or more
counterparts, all of which shall be considered one and the same
agreement and shall become effective when one or more
counterparts have been signed by each of the parties and
delivered to the other party, it being understood that all
parties need not sign the same counterpart. Signatures delivered
by facsimile or by electronic data file shall have the same
effect as originals.
Β
(remainder
of page intentionally left blank)
A-51
Β
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.
Β
Β
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By:Β
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/s/Β Β Xxxxxxxxxxx
Xxxxxxxxxx
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Name:Β Β Β Β Β Xxxxxxxxxxx Xxxxxxxxxx
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Title:Β
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President and Chief Executive Officer
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Β
ROCKLAND TRUSTΒ COMPANY
Β
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By:Β
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/s/Β Β Xxxxxxxxxxx
Xxxxxxxxxx
|
Name:Β Β Β Β Β Xxxxxxxxxxx Xxxxxxxxxx
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Β |
Title:Β
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President and Chief Executive Officer
|
Β
XXXXXβX FERRY BANCORP.
Β
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Β |
By:Β
|
/s/Β Β Xxxx
Xxxx X. Xxxx
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Name:Β Β Β Β Β Xxxx Xxxx X. Xxxx
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Β |
Title:Β
|
President and Chief Executive Officer
|
Β
XXXXXβX FERRY TRUSTΒ COMPANY
Β
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Β |
By:Β
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/s/Β Β Xxxx
Xxxx X. Xxxx
|
Name:Β Β Β Β Β Xxxx Xxxx X. Xxxx
|
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Β |
Title:Β
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President and Chief Executive Officer
|
Β
A-52