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Exhibit 2.1
EXECUTION COPY
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AGREEMENT AND PLAN OF MERGER
DATED AS OF OCTOBER 11, 2007
BY AND AMONG
INDEPENDENT BANK CORP.,
ROCKLAND TRUST COMPANY,
SLADE'S FERRY BANCORP.,
AND
SLADE'S FERRY TRUST COMPANY
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TABLE OF CONTENTS
ARTICLE I. THE
MERGER.........................................................1
Section 1.01 The
Merger...................................................1
Section 1.02 Articles of Incorporation and
Bylaws.........................2
Section 1.03 Directors and Officers of the Surviving
Entity...............2
Section 1.04 Effective Date and Effective Time;
Closing...................2
Section 1.05 Tax
Consequences.............................................2
ARTICLE II. MERGER CONSIDERATION; ELECTION AND EXCHANGE
PROCEDURES............2
Section 2.01 Merger
Consideration.........................................2
Section 2.02 Rights as Shareholders; Stock
Transfers......................3
Section 2.03 Fractional
Shares............................................3
Section 2.04 Election
Procedures..........................................3
Section 2.05 Exchange
Procedures..........................................6
Section 2.06 Anti-Dilution
Provisions.....................................8
Section 2.07
Options......................................................8
ARTICLE III. REPRESENTATIONS AND WARRANTIES OF
COMPANY........................8
Section 3.01 Making of Representations and
Warranties.....................8
Section 3.02 Organization, Standing and
Authority.........................9
Section 3.03 Capital
Stock................................................9
Section 3.04
Subsidiaries................................................10
Section 3.05 Corporate Power; Minute
Books...............................10
Section 3.06 Corporate
Authority.........................................11
Section 3.07 Regulatory Approvals; No
Defaults...........................11
Section 3.08 SEC Documents; Financial Reports; and
Regulatory
Reports.........................................12
Section 3.09 Absence of Certain Changes or
Events........................13
Section 3.10 Legal
Proceedings...........................................14
Section 3.11 Compliance With
Laws........................................14
Section 3.12 Material Contracts;
Defaults................................15
Section 3.13
Brokers.....................................................15
Section 3.14 Employee Benefit
Plans......................................16
Section 3.15 Labor
Matters...............................................18
Section 3.16 Environmental
Matters.......................................18
Section 3.17 Tax
Matters.................................................19
Section 3.18 Investment
Securities.......................................21
Section 3.19 Derivative
Transactions.....................................21
Section 3.20 Regulatory
Capitalization...................................22
Section 3.21 Loans; Nonperforming and Classified
Assets..................22
Section 3.22 Trust Business; Administration of Fiduciary
Accounts........23
Section 3.23 Investment Management and Related
Activities................23
Section 3.24 Repurchase
Agreements.......................................23
Section 3.25 Deposit
Insurance...........................................23
Section 3.26 CRA, Anti-money Laundering and Customer
Information
Security.......................................23
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Section 3.27 Transactions with
Affiliates................................24
Section 3.28 Tangible Properties and
Assets..............................24
Section 3.29 Intellectual
Property.......................................25
Section 3.30
Insurance...................................................25
Section 3.31 Antitakeover
Provisions.....................................26
Section 3.32 Fairness
Opinion............................................26
Section 3.33 Proxy
Statement-Prospectus..................................26
Section 3.34 Transaction
Costs...........................................26
Section 3.35
Disclosure..................................................26
ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF
BUYER..........................26
Section 4.01 Making of Representations and
Warranties....................26
Section 4.02 Organization, Standing and
Authority........................27
Section 4.03 Corporate Power; Minute
Books...............................27
Section 4.04 Corporate
Authority.........................................27
Section 4.05 SEC Documents; Financial Reports; and
Regulatory
Reports.........................................27
Section 4.06 Regulatory Approvals; No
Defaults...........................29
Section 4.07 Absence of Certain Changes or
Events........................29
Section 4.08 Compliance with
Laws........................................29
Section 4.09 Financial
Ability...........................................30
Section 4.10 Proxy Statement-Prospectus Information;
Registration
Statement.....................................30
Section 4.11 Legal
Proceedings...........................................30
Section 4.12
Brokers.....................................................31
Section 4.13 Employee Benefit
Plans......................................31
Section 4.14 Labor
Matters...............................................32
Section 4.15 Tax
Matters.................................................32
Section 4.16
Disclosure..................................................33
ARTICLE V.
COVENANTS.........................................................33
Section 5.01 Covenants of
Company........................................33
Section 5.02 Covenants of
Buyer..........................................36
Section 5.03 Reasonable Best
Efforts.....................................37
Section 5.04 Shareholder
Approval........................................37
Section 5.05 Registration Statement; Proxy
Statement-Prospectus..........37
Section 5.06 Regulatory Filings;
Consents................................39
Section 5.07
Publicity...................................................40
Section 5.08 Access;
Information.........................................40
Section 5.09 No Solicitation by
Company..................................41
Section 5.10
Indemnification.............................................42
Section 5.11 Employees; Benefit
Plans....................................44
Section 5.12 Notification of Certain
Changes.............................46
Section 5.13 Current
Information.........................................46
Section 5.14 Board
Packages..............................................46
Section 5.15 Transition; Informational Systems
Conversion................46
Section 5.16 Access to Customers and
Suppliers...........................47
Section 5.17 Environmental
Assessments...................................47
Section 5.18 Certain
Litigation..........................................48
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Section 5.19 Dividend Reinvestment and Common Stock Purchase
Plan........48
Section 5.20 Stock Exchange
De-listing...................................48
Section 5.21 Director
Resignations.......................................48
Section 5.22 Coordination of
Dividends...................................48
Section 5.23 Representation on Buyer
Board...............................48
Section 5.24
Coordination................................................49
Section 5.25 Transactional
Expenses......................................50
Section 5.26 Charitable
Contribution.....................................50
ARTICLE VI. CONDITIONS TO CONSUMMATION OF THE
MERGER.........................50
Section 6.01 Conditions to Obligations of the Parties to
Effect the
Merger..........................................50
Section 6.02 Conditions to Obligations of
Company........................51
Section 6.03 Conditions to Obligations of
Buyer..........................51
Section 6.04 Frustration of Closing
Conditions...........................53
ARTICLE VII.
TERMINATION.....................................................53
Section 7.01
Termination.................................................53
Section 7.02 Termination Fee;
Reimbursement..............................55
Section 7.03 Effect of Termination and
Abandonment.......................57
ARTICLE VIII.
DEFINITIONS....................................................57
Section 8.01
Definitions.................................................57
ARTICLE IX.
MISCELLANEOUS....................................................66
Section 9.01
Survival....................................................66
Section 9.02 Waiver;
Amendment...........................................66
Section 9.03 Governing
Law...............................................66
Section 9.04
Expenses....................................................66
Section 9.05
Notices.....................................................67
Section 9.06 Entire Understanding; No Third Party
Beneficiaries..........67
Section 9.07
Severability................................................68
Section 9.08 Enforcement of the
Agreement................................68
Section 9.09
Interpretation..............................................68
Section 9.10
Assignment..................................................68
Section 9.11 Alternative
Structure.......................................68
Section 9.12
Counterparts................................................69
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EXHIBITS AND SCHEDULES
Exhibit A Form of Voting Agreement
Exhibit B Form of Plan of Bank Merger
Schedules
Schedule 5.11(a) Certain Company Employees
Schedule 5.13 Current Information
Schedule 5.18 Certain Dispute
Schedule 6.03(f)(1) Releases from Certain Employees of
Company
Schedule 6.03(f)(2) Non-Competition Agreements from Certain
Employees
of Company
Schedule 8.01(a) Certain Officers of Company and Company
Bank
Schedule 8.01(b) Certain Officers of Buyer and Buyer Bank
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This AGREEMENT AND PLAN OF MERGER (this "Agreement") is dated as
of
October 11, 2007, by and among Independent Bank Corp., a
Massachusetts
corporation ("Buyer"), Rockland Trust Company, a
Massachusetts-chartered trust
company and wholly-owned subsidiary of Buyer ("Buyer Bank"),
Slade's Ferry
Bancorp., a Massachusetts corporation ("Company"), and Slade's
Ferry Trust
Company, a Massachusetts-chartered trust company and
wholly-owned subsidiary of
Company. ("Company Bank").
W I T N E S S E T H
WHEREAS, the Board of Directors of Buyer and the Board of
Directors of
Company have each (i) 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)
determined that
this Agreement and the transactions contemplated hereby are
consistent with and
in furtherance of their respective business strategies; and
(iii) approved this
Agreement;
WHEREAS, in accordance with the terms of this Agreement, (i)
Company will
merge with and into Buyer, with Buyer the surviving entity (the
"Merger"); and
(ii) Company Bank will merge with and into Buyer Bank, with
Buyer Bank as the
surviving entity (the "Bank Merger");
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 "Voting
Agreement"), substantially in the form attached hereto as
Exhibit 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; and
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.
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:
ARTICLE I.
THE MERGER
Section 1.01 The Merger. 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
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General Laws of Massachusetts (Buyer, as the Surviving Entity in
the Merger,
sometimes being referred to herein as the "Surviving
Entity").
Section 1.02 Articles of Incorporation and Bylaws. 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.
Section 1.03 Directors and Officers of the Surviving Entity.
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 Buyer's Board of Directors pursuant to
Section 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.
Section 1.04 Effective Date and Effective Time; Closing.
(a) 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
"Articles of
Merger"). The date of such filing or such later effective date
is herein called
the "Effective Date." The "Effective Time" of the Merger shall
be as specified
in the Articles of Merger.
(b) A closing (the "Closing") shall take place immediately prior
to
the Effective Time at the principal offices of Nutter McClennen
& Fish LLP in
Boston, Massachusetts, or such other place or on such other date
as the parties
may mutually agree upon (such date, the "Closing Date"). At the
Closing, there
shall be delivered to Buyer and Company the certificates and
other documents
required to be delivered under Article VI hereof.
Section 1.05 Tax Consequences. It is intended that the Merger
shall
qualify as a "reorganization" under Section 368(a) of the Code,
and that the
Agreement shall constitute a "plan of reorganization" for
purposes of Sections
354 and 361 of the Code.
ARTICLE II.
MERGER CONSIDERATION; ELECTION AND EXCHANGE PROCEDURES
Section 2.01 Merger Consideration. 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:
(a) 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) 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.
(c) 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 Section 2.04
either: (i) $25.50
in cash (the "Cash Consideration"); or (ii) 0.818 shares (the
"Exchange Ratio")
of Buyer Common Stock (the "Stock Consideration"). The Cash
Consideration and
the Stock Consideration are sometimes referred to herein
collectively as the
"Merger Consideration."
Section 2.02 Rights as Shareholders; Stock Transfers. All shares
of
Company Common Stock, when converted as provided in Section
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
Sections 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 Article 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.
Section 2.03 Fractional Shares. 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 ("Nasdaq") (as reported in The Wall
Street Journal
or, if not reported therein, in another authoritative source),
for the five (5)
Nasdaq trading days immediately preceding the Closing Date,
rounded to the
nearest whole cent.
Section 2.04 Election Procedures.
(a) 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 "Exchange Agent")) in such form as
Company and
Buyer shall mutually agree (the "Election Form"), shall be
mailed no more than
forty (40) and no less than twenty (20) Business Days prior to
the anticipated
Election Deadline (the "Mailing Date") to each holder of record
of Company
Common Stock. Each
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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) elect to receive the Cash
Consideration
for all or a portion of such holder's shares (a "Cash
Election"), (ii) elect to
receive the Stock Consideration for all or a portion of such
holder's shares (a
"Stock Election"), or (iii) make no election with respect to the
receipt of the
Cash Consideration or the Stock Consideration (a
"Non-Election"); except as
provided in Section 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 "Stock
Conversion Number"),
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 "Cash Election
Shares." Shares
of Company Common Stock as to which a Stock Election has been
made are referred
to herein as "Stock Election Shares." 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
"Non-Election Shares." 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 "Stock Election Number."
(b) To be effective, a properly completed Election Form shall
be
submitted to the Exchange Agent on or before 5:00 p.m., New York
City time, on
a date no later than the 5th 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 "Election
Deadline"),
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) does not
submit a
properly completed Election Form in a timely fashion or (ii)
revokes the
holder's 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 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.
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(c) 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:
(i) 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 Section 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) the number of Stock Election Shares held by such holder by
(y)
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 holder's Stock Election Shares
being
converted into the right to receive the Cash Consideration;
(ii) 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
"Shortfall Number"), 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:
(A) 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) the number of Non-Election Shares held by
such holder by (y) 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 holder's Non-Election Shares being converted into the
right to receive the Cash Consideration; or
(B) 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 Section 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) the number of Cash
Election Shares held by such holder by (y) a fraction, the
numerator of which is the amount by which (1) the Shortfall
Number exceeds (2) 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
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holder's Cash Election Shares being converted into the
right to receive the Cash Consideration.
Section 2.05 Exchange Procedures.
(a) On or before the Closing Date, for the benefit of the
holders
of Certificates, (i) Buyer shall cause to be delivered to the
Exchange Agent,
for exchange in accordance with this Article II, certificates
representing the
shares of Buyer Common Stock issuable pursuant to this Article
II ("New
Certificates") and (ii) 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 Article 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 "Exchange
Fund").
(b) As promptly as practicable, but in any event no later than
five
(5) 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
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 Sections 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) 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) 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) 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 Section 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 Sections 2.01,
2.03 and 2.04 and
any unpaid dividends and distributions thereon as provided in
paragraph (c) of
this Section 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.
(c) 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 Section 2.05.
After the
surrender of a Certificate in accordance with this Section 2.05,
the record
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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.
(d) 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 Section 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.
(e) Any portion of the Exchange Fund that remains unclaimed by
the
shareholders of Company for six (6) 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 Section 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. 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.
7
<PAGE>
(f) 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.
Section 2.06 Anti-Dilution Provisions. 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) Buyer issues additional shares of Buyer Common Stock and
receives
consideration for such shares in a bona fide third party
transaction or (ii)
Buyer issues employee or director stock grants or similar equity
awards.
Section 2.07 Options. Each option to purchase Company Common
Stock
(collectively, the "Options") granted under Company's 1996 Stock
Option Plan or
Company's 2004 Equity Incentive Plan (collectively, the "Company
Option Plan"),
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) the number of shares of Company Common Stock
provided for in
such Option and (ii) 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
Section 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.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF COMPANY
Section 3.01 Making of Representations and Warranties. 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 Article 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
Article 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
Article III shall be
deemed untrue or incorrect, and Company shall
8
<PAGE>
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 expected to have a Material Adverse
Effect;
provided, however, that the foregoing standard shall not apply
to the
representations and warranties contained in Sections 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.
Section 3.02 Organization, Standing and Authority.
(a) 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.
(b) Company Bank is a Massachusetts-chartered trust company
duly
organized, validly existing and in good standing under the laws
of
Massachusetts. Company Bank's 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.
Section 3.03 Capital Stock. The authorized capital stock of
Company
consists solely of not less than 5,000,000 shares of Company
Common Stock, of
which (i) 4,062,353 shares are outstanding as of the date
hereof, (ii) 164,274
shares are held in treasury, (iii) no shares are held by Company
Subsidiaries,
and (iv) 227,690 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 Schedule
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, "phantom stock" 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 Company's Subsidiaries or obligating Company or any of
Company's
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 Company's Subsidiaries other than those
listed in Company
Disclosure Schedule 3.03. All shares of Company Common Stock
subject to
issuance as set forth in this Section 3.03 or Company Disclosure
Schedule 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 Company's Subsidiaries to repurchase, redeem
or otherwise
acquire any shares of Company
9
<PAGE>
Common Stock or capital stock of any of Company's Subsidiaries
or any other
securities of Company or any of Company's 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 Company's 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 Company's voting
rights, charges or
other encumbrances of any nature whatsoever, except as set forth
in Company
Disclosure Schedule 3.03.
Section 3.04 Subsidiaries.
(a) (i) Company Disclosure Schedule 3.04 sets forth a complete
and
accurate list of all of Company's Subsidiaries, including the
jurisdiction of
organization of each such Subsidiary, (ii) except as set forth
on Company
Disclosure Schedule 3.04, Company owns, directly or indirectly,
all of the
issued and outstanding equity securities of each Subsidiary,
(iii) no equity
securities of any of Company's Subsidiaries are or may become
required to be
issued (other than to Company) by reason of any contractual
right or otherwise,
(iv) 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-owned
Subsidiary of Company), (v) there are no contracts, commitments,
understandings
or arrangements relating to Company's rights to vote or to
dispose of such
securities and (vi) 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.
(b) Except as set forth on Company Disclosure Schedule 3.04
or
Company Disclosure Schedule 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.
(c) Each of Company's 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
Schedule 3.04.
Section 3.05 Corporate Power; Minute Books. 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 Company's
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
10
<PAGE>
and each of its Subsidiaries and the Board of the Directors of
Company
(including committees of Company's Board of Directors) and each
of its
Subsidiaries.
Section 3.06 Corporate Authority. Subject only to the approval
of this
Agreement by the holders of at least two-thirds of the
outstanding shares of
Company Common Stock ("Requisite Company Shareholder Approval"),
this Agreement
and the transactions contemplated hereby have been authorized by
all necessary
corporate action of Company and Company's Board of Directors on
or prior to the
date hereof. Company's Board of Directors has directed that this
Agreement be
submitted to Company's 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,
Company's
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 creditors' rights or by
general equity
principles).
Section 3.07 Regulatory Approvals; No Defaults.
(a) No consents or approvals of, or waivers by, or filings
or
registrations with, any Governmental Authority or with any third
party are
required to be made or obtained by 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)
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) the filing and effectiveness
of the
Registration Statement with the SEC, (iii) the approval of this
Agreement by
the holders of two-thirds of the outstanding shares of Company
Common Stock;
and (iv) the approval of the Plan of Bank Merger by a majority
of the
outstanding shares of Company Bank's common stock. As of the
date hereof,
Company is not aware of any reason why the approvals set forth
above and
referred to in Section 6.01(b) will not be received in a timely
manner.
(b) Subject to receipt, or the making, of the consents,
approvals,
waivers and filings referred to in Section 3.06 and the
immediately preceding
paragraph, and the expiration of related waiting periods, the
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) 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) 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) 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
11
<PAGE>
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.
Section 3.08 SEC Documents; Financial Reports; and Regulatory
Reports.
(a) Company's Annual Report on Form 10-K, as amended through
the
date hereof, for the fiscal year ended December 31, 2006 (the
"Company 2006
Form 10-K"), 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 December 31, 2001 under the
Securities Act of
1933, as amended (the "Securities Act"), or under Sections
13(a), 13(c), 14 and
15(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act")
(collectively, the "Company SEC Documents"), 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) 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) 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 shareholders' 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 shareholders' 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 "Company Balance Sheet") contained in
Company's Form
10-Q for the quarterly period ended June 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 June 30, 2007 (the
"Company Balance Sheet
Date"), 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.
(b) Except as set forth on Company Disclosure Schedule
3.08(b),
Company and each of its Subsidiaries, officers and directors are
in compliance
with, and have complied, with (1) the applicable provisions of
the
Sarbanes-Oxley Act of 2002 ("Sarbanes-Oxley") and the related
rules and
regulations promulgated under such act and the Exchange Act and
(2) the
applicable listing and corporate governance rules and
regulations of The NASDAQ
Stock Market. The Company (i) has established and maintained
disclosure
controls and procedures and internal control over financial
reporting (as such
terms are defined in paragraphs (3) and (f),
12
<PAGE>
respectively, of Rule 13a-15 under the Exchange Act) as required
by Rule 13a-15
under the Exchange Act, and (ii) has disclosed based on its most
recent
evaluations, to its outside auditors and the audit committee of
Company's Board
of Directors (A) all significant deficiencies and material
weaknesses in the
design or operation of internal control over financial reporting
(as defined in
Rule 13a-15(f) of the Exchange Act) which are reasonably likely
to adversely
affect Company's ability to record, process, summarize and
report financial
data and (B) any fraud, whether or not material, that involves
management or
other employees who have a significant role in Company's
internal control over
financial reporting. Since January 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.
(c) Except as set forth in Company Disclosure Schedule
3.08(c),
since December 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.
Section 3.09 Absence of Certain Changes or Events. Except as
disclosed in
the Company SEC Documents filed prior to the date hereof or in
Company
Disclosure Schedule 3.09, or as otherwise expressly permitted or
expressly
contemplated by this Agreement, since Company Balance Sheet
Date, there has not
been (i) 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) 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 Company's independent accountants,
(iii) any
entry by Company or any of its Subsidiaries into any contract or
commitment of
(A) more than $100,000 or (B) $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) 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) 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) any
material election
made by Company or any of its Subsidiaries for federal or
13
<PAGE>
state income tax purposes, (vii) 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)
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) 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.
Section 3.10 Legal Proceedings.
(a) Other than as set forth in Company Disclosure Schedule
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 Company's Knowledge, threatened against Company
or any of its
Subsidiaries.
(b) Neither Company nor any of its Subsidiaries is a party to
any,
nor are there any pending or, to Company's 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 Company or any of its
Subsidiaries in which,
to Company's 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.
(c) 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.
Section 3.11 Compliance With Laws.
(a) Other than as set forth in Company Disclosure Schedule
3.11,
Company and each of its Subsidiaries is and since December 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;
(b) 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,
14
<PAGE>
certificates of authority, orders and approvals are in full
force and effect
and, to Company's Knowledge, no suspension or cancellation of
any of them is
threatened; and
(c) Other than as set forth in Company Disclosure Schedule
3.11,
neither Company nor any of its Subsidiaries has received, since
December 31,
2004, notification or communication from any Governmental
Authority (i)
asserting that it is not in compliance with any of the statutes,
regulations or
ordinances which such Governmental Authority enforces or (ii)
threatening to
revoke any license, franchise, permit or governmental
authorization (nor, to
Company's Knowledge, do any grounds for any of the foregoing
exist).
Section 3.12 Material Contracts; Defaults.
(a) Other than as set forth in Company Disclosure Schedule
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) with respect to the employment of any
directors, officers,
employees or consultants, (ii) 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)
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) 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) which provides for payments to be made by Company or any of
its
Subsidiaries upon a change in control thereof; (vi) which
provides for the
lease of personal property having a value in excess of $25,000
individually or
$100,000 in the aggregate; (vii) which relates to capital
expenditures and
involves future payments in excess of $10,000 individually or
$50,000 in the
aggregate; (viii) which relates to the disposition or
acquisition of assets or
any interest in any business enterprise outside the ordinary
course of
Company's business; (ix) which is not terminable on sixty (60)
days or less
notice and involving the payment of more than $25,000 per annum;
or (x) which
materially restricts the conduct of any business by Company of
any of its
Subsidiaries (collectively, "Material Contracts"). Company has
previously
delivered to Buyer or Buyer Bank true, complete and correct
copies of each such
document.
(b) 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
constitute such a
default. No power of attorney or similar authorization given
directly or
indirectly by Company is currently outstanding.
Section 3.13 Brokers. Neither Company nor any of its officers
or
directors has employed any broker or finder or incurred any
liability for any
broker's fees, commissions or finder's 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, Keefe, Bruyette &
Woods, Inc. in
accordance with the terms of a letter agreement between Keefe,
Bruyette &
Woods, Inc. and
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<PAGE>
Company, a true, complete and correct copy of which has been
previously
delivered by Company to Buyer or Buyer Bank.
Section 3.14 Employee Benefit Plans.
(a) All benefit and compensation plans, contracts, policies
or
arrangements covering current or former employees of Company or
any of its
Subsidiaries (the "Company Employees") and current or former
directors of
Company or any of its Subsidiaries including, but not limited
to, "employee
benefit plans" within the meaning of Section 3(3) of ERISA, and
deferred
compensation, stock option, stock purchase, stock appreciation
rights, stock
based, incentive and bonus plans (the "Company Benefit Plans"),
are identified
in Company Disclosure Schedule 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.
(b) All Company Benefit Plans other than "multiemployer
plans"
within the meaning of Section 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 "employee pension benefit plan"
within the
meaning of Section 3(2) of ERISA (a "Company Pension Plan") and
which is
intended to be qualified under Section 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 Section 401(a) of the Code. There is
no pending or,
to Company's Knowledge, threatened litigation relating to the
Company Benefit
Plans. Other than as set forth in Company Disclosure Schedule
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
Section 4975
of the Code or Section 502(i) of ERISA.
(c) No liability under Subtitle C or D of Title 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 "single employer
plan," within the
meaning of Section 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 Section 4001 of
ERISA or Section
414 of the Code (an "ERISA Affiliate"). None of Company or any
ERISA Affiliate
has contributed to (or been obligated to contribute to) a
"multiemployer plan"
within the meaning of Section 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 Title IV of
ERISA (regardless of whether based on contributions of an ERISA
Affiliate). No
notice of a "reportable event," within the meaning of Section
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
12 month period ending on the date hereof or will be required to
be filed in
connection with the transactions contemplated by this
Agreement.
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<PAGE>
(d) 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 "accumulated funding
deficiency" (whether or
not waived) within the meaning of Section 412 of the Code or
Section 302 of
ERISA and no ERISA Affiliate has an outstanding funding
waiver.
(e) Other than as set forth in Company Disclosure Schedule
3.14,
neither Company nor any of its Subsidiaries has any obligations
for retiree
health and life benefits under any Company Benefit Plan, other
than coverage as
may be required under Section 4980B of the Code or Part 6 of
Title I of ERISA,
or under the continuation of coverage provisions of the laws of
any state or
locality. Company may amend or terminate any such Company
Benefit Plan at any
time without incurring any liability thereunder.
(f) Other than as set forth in Company Disclosure Schedule
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) entitle any Company Employee to severance pay or any
increase in severance
pay upon any termination of employment after the date hereof,
(ii) 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) result in any breach or violation
of, or a default
under, any of the Company Benefit Plans, (iv) result in any
payment that would
be a "parachute payment" to a "disqualified individual" as those
terms are
defined in Section 280G of the Code, without regard to whether
such payment is
reasonable compensation for personal services performed or to be
performed in
the future, (v) 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) result in payments under any of the Company
Benefit Plans which
would not be deductible under Section 162(m) or Section 280G of
the Code.
(g) Company Disclosure Schedule 3.14 includes the Severance
Pay
Plan of Slade's Ferry Trust 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 January
31, 2008. Company
Disclosure Schedule 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.
(h) Each Company Benefit Plan that is a deferred compensation
plan
is in substantial compliance with Section 409A of the Code, to
the extent
applicable. All elections made with respect to compensation
deferred under an
arrangement subject to Section 409A of the Code have been made
in accordance
with the requirements of Section 409(a)(4) of the Code, to the
extent
applicable. Neither Company nor any of its Subsidiaries (i) 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 Section
409A(a)(1)(B) of the Code being owed by any participant in a
Company Benefit
Plan or (ii) has agreed to reimburse or indemnify any
17
<PAGE>
participant in a Company Benefit Plan for any of the interest
and the penalties
specified in Section 409A(a)(1)(B) of the Code that may be
currently due or
triggered in the future.
(i) Company Disclosure Schedule 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 Section 401(a) of the Code) for each such
person, specifying
the assumptions in such schedule.
Section 3.15 Labor Matters. 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 Company's 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
Company's 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.
Section 3.16 Environmental Matters.
(a) Other than as set forth in Company Disclosure Schedule 3.16,
to
Company's 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 ("Company Loan
Property"), has
been contaminated with, or has had any release of, any Hazardous
Substance in a
manner that violates Environmental Law. Company Disclosure
Schedule 3.16 lists
each ASTM 1527-05 Phase I environmental assessment ("Phase I
Assessment") and
Phase II environmental assessment ("Phase II Assessment" and,
together with the
Phase I Assessments, the "Environmental Assessments") which, to
Company's
Knowledge, have been conducted on the properties listed on
Company Disclosure
Schedule 3.28, copies of which Environmental Assessments have
previously been
delivered to Buyer.
(b) Except as disclosed on Company Disclosure Schedule 3.16,
Company and each of its Subsidiaries is in compliance with
applicable
Environmental Law.
(c) 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.
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<PAGE>
(d) 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.
(e) Neither Company nor any of its Subsidiaries has received
(i)
any written notice, demand letter, or claim alleging any
violation of, or
liability under, any Environmental Law or (ii) to Company's
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.
(f) 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.
(g) Except as disclosed on Company Disclosure Schedule 3.16,
to
Company's Knowledge, there are no circumstances or conditions
(including the
presence of asbestos, underground storage tanks, lead products,
polychlorinated
biphenyls, prior manufacturing operations, dry-cleaning, or
automotive
services) involving 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)
result in any
claim, liability or investigation against Company or any of its
Subsidiaries,
(ii) result in any restriction on the ownership, use, or
transfer of any
property, or (iii) adversely affect the value of any Company
Loan Property.
(h) 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.
(i) 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) for alleged noncompliance (including by any
predecessor) with any
Environmental Law or (ii) relating to the release into the
environment of any
Hazardous Substance, whether or not occurring at, on or
involving a Company
Loan Property.
(j) Except as disclosed on Company Disclosure Schedule 3.16,
to
Company's 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.
Section 3.17 Tax Matters.
(a) 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
19
<PAGE>
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
Schedule 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.
(b) 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.
(c) 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)
notice
indicating an intent to open an audit or other review, (ii)
request for
information related to Tax matters, or (iii) notice of
deficiency or proposed
adjustment for any amount of Tax proposed, asserted, or assessed
by any taxing
authority against Company.
(d) 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
December 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
December 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.
(e) 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.
(f) Company has not been a United States real property
holding
corporation within the meaning of Code Section 897(c)(2) during
the applicable
period specified in Code Section 897(c)(1)(A)(ii). 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
Section 6662. Company is not a party to or bound by any Tax
allocation or
sharing agreement. Company (i) 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) has no liability for the
Taxes of any
individual, bank, corporation, partnership, association, joint
stock company,
business trust, limited liability company, or
20
<PAGE>
unincorporated organization (other than Company) under Reg.
Section 1.1502-6
(or any similar provision of state, local, or foreign law), as a
transferee or
successor, by contract, or otherwise.
(g) The unpaid Taxes of Company (i) did not, as of the end of
the
most recent period covered by Company's 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 Company's
call reports filed on or prior to the date hereof (rather than
in any notes
thereto), and (ii) 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 Company's 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.
(h) 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)
change in method of accounting for a taxable period ending on or
prior to the
Closing Date; (ii) "closing agreement" as described in Code
Section 7121 (or
any corresponding or similar provision of state, local or
foreign income Tax
law) executed on or prior to the Closing Date; (iii)
intercompany transactions
or any excess loss account described in Treasury Regulations
under Code Section
1502 (or any corresponding or similar provision of state, local
or foreign
income Tax law); (iv) installment sale or open transaction
disposition made on
or prior to the Closing Date; or (v) prepaid amount received on
or prior to the
Closing Date.
(i) 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 Section 355 or
Section 361 of
the Code.
Section 3.18 Investment Securities. Company Disclosure Schedule
3.18 sets
forth as of September 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.
Section 3.19 Derivative Transactions.
(a) 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,
21
<PAGE>
and, to the Knowledge of Company, there are no breaches,
violations or defaults
or allegations or assertions of such by any party
thereunder.
(b) Except as set forth in Company Disclosure Schedule 3.19,
no
Derivative Transaction, were it to be a Loan held by Company,
would be
classified as "Special Mention," "Substandard," "Doubtful,"
"Loss,"
"Classified," "Criticized," "Credit Risk Assets," "Concerned
Loans," "Watch
List" or words of similar import. Each such Derivative
Transaction is listed on
Company Disclosure Schedule 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.
Section 3.20 Regulatory Capitalization. Company Bank is, and
immediately
after the Effective Time will be, "well capitalized," 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, "well
capitalized" as such
term is defined in the rules and regulations promulgated by the
FRB.
Section 3.21 Loans; Nonperforming and Classified Assets.
(a) Except as set forth in Company Disclosure Schedule 3.21, as
of
the date hereof, neither Company nor any of its Subsidiaries is
a party to any
written or oral (i) loan, loan agreement, note or borrowing
arrangement
(including, without limitation, leases, credit enhancements,
commitments,
guarantees and interest-bearing assets) (collectively, "Loans"),
under the
terms of which the obligor was, as of June 30, 2007, over sixty
(60) days
delinquent in payment of principal or interest or in default of
any other
material provision, or (ii) 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 Schedule 3.21 identifies (x) each Loan that as of
September 30, 2007
was classified as "Special Mention," "Substandard," "Doubtful,"
"Loss,"
"Classified," "Criticized," "Credit Risk Assets," "Concerned
Loans," "Watch
List" or words of similar import 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)
each asset of
Company that as of September 30, 2007 was classified as other
real estate owned
("OREO") and the book value thereof as of the date of this
Agreement.
(b) Each Loan (i) is evidenced by notes, agreements or other
evidences of indebtedness that are true, genuine and what they
purport to be,
(ii) to the extent secured, has been secured by valid Liens
which have been
perfected and (iii) 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 creditors'
rights and to
general equity principles.
(c) All currently outstanding Loans were solicited, originated
and,
currently exist in material compliance with all applicable
requirements of Law
and Company Bank's 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
22
<PAGE>
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.
(d) 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.
Section 3.22 Trust Business; Administration of Fiduciary
Accounts.
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 Keogh accounts), including,
but not limited
to, accounts for which either serves as a trustee, agent,
custodian, personal
representative, guardian, conservator or investment advisor.
Section 3.23 Investment Management and Related Activities.
Except as set
forth on Company Disclosure Schedule 3.23, none of Company, any
of its
Subsidiaries or Company's or its Subsidiaries' 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.
Section 3.24 Repurchase Agreements. 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.
Section 3.25 Deposit Insurance. The deposits of Company Bank are
insured
by the FDIC in accordance with the Federal Deposit Insurance Act
("FDIA") 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.
Section 3.26 CRA, Anti-money Laundering and Customer
Information
Security. 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
23
<PAGE>
Company Bank's Home Mortgage Disclosure Act data for the year
ended December
31, 2006, filed with the FDIC, or otherwise) that any facts or
circumstances
exist, which would cause Company Bank: (i) 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
"satisfactory"; or (ii) to be deemed to be operating in
violation of the
federal Bank Secrecy Act, as amended, and its implementing
regulations (31
C.F.R. Part 103), the USA Patriot Act, any order issued with
respect to
anti-money laundering by the U.S. Department of the Treasury's
Office of
Foreign Assets Control, or any other applicable anti-money
laundering statute,
rule or regulation; or (iii) 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 Title V of the Gramm-Leach-Bliley Act of 1999 and
regulations
promulgated thereunder, as well as the provisions of the
information security
program adopted by Company Bank pursuant to 12 C.F.R. Part 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 Sections 352 and 326 of the USA Patriot Act.
Section 3.27 Transactions with Affiliates. Except as set forth
in Company
Disclosure Schedule 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
persons' employment or service as a director with Company or any
of its
Subsidiaries. Except as set forth in Company Disclosure Schedule
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 Regulation W of the FRB.
Section 3.28 Tangible Properties and Assets.
(a) Company Disclosure Schedule 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 Schedule
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) statutory Liens for amounts not yet
delinquent and (ii)
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.
(b) Company Disclosure Schedule 3.28 sets forth a true, correct
and
complete schedule of all leases, subleases, licenses and other
agreements under
which Company uses or
24
<PAGE>
occupies or has the right to use or occupy, now or in the
future, real property
(the "Leases"). 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 Company's
Knowledge, no
lessor under a Lease is in material breach or default in the
performance of any
material covenant, agr
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