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EXHIBIT 2.2
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AGREEMENT AND PLAN OF MERGER
DATED AS OF SEPTEMBER 1, 2004
AMONG
BENJAMIN FRANKLIN BANCORP, M.H.C.,
BENJAMIN FRANKLIN SAVINGS BANK
AND
CHART
BANK, A COOPERATIVE BANK
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TABLE OF CONTENTS
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ARTICLE I. DEFINITIONS;
DISCLOSURE...............................................................................
2
1.1. CERTAIN
DEFINITIONS......................................................................................
2
1.2. OTHER DEFINITIONAL
MATTERS...............................................................................
9
1.3. DISCLOSURE
SCHEDULES.....................................................................................
9
ARTICLE II. THE
MERGER...........................................................................................
9
2.1. THE
MERGER...............................................................................................
9
2.2. SURVIVING
BANK...........................................................................................
9
2.3.
BANCORP..................................................................................................
10
2.4. EFFECT OF THE
MERGER.....................................................................................
11
2.5. ADDITIONAL
ACTIONS.......................................................................................
11
2.6. EFFECTIVE DATE AND
EFFECTIVE TIME;
CLOSING...............................................................
11
ARTICLE III. CONSIDERATION; EXCHANGE
PROCEDURES..................................................................
12
3.1. CONVERSION OF
SHARES.....................................................................................
12
3.2. ELECTION
PROCEDURES......................................................................................
13
3.3. EXCHANGE
PROCEDURES......................................................................................
15
3.4. RIGHTS AS SHAREHOLDERS;
STOCK
TRANSFERS..................................................................
17
3.5. NO FRACTIONAL
SHARES.....................................................................................
17
3.6. DISSENTING
SHARES........................................................................................
18
3.7. ANTIDILUTION
PROVISIONS.................................................................................
18
3.8. WITHHOLDING
RIGHTS.......................................................................................
18
3.9. CHART
OPTIONS............................................................................................
18
ARTICLE IV. ACTIONS PENDING
MERGER...............................................................................
19
4.1. AGREEMENTS OF
CHART......................................................................................
19
4.2. PARACHUTE
PAYMENTS.......................................................................................
23
4.3. AGREEMENTS OF
BANCORP....................................................................................
23
ARTICLE V. REPRESENTATIONS AND WARRANTIES
OF
CHART...............................................................
24
5.1. ORGANIZATION, STANDING
AND
AUTHORITY.....................................................................
24
5.2. CHART CAPITAL
STOCK......................................................................................
24
5.3.
SUBSIDIARIES.............................................................................................
25
5.4. CORPORATE
POWER..........................................................................................
26
5.5. CORPORATE
AUTHORITY......................................................................................
26
5.6. REGULATORY APPROVALS;
NO
DEFAULTS........................................................................
26
5.7. CHART FINANCIAL
STATEMENTS...............................................................................
27
5.8. CHART
REPORTS............................................................................................
28
5.9. ABSENCE OF UNDISCLOSED
LIABILITIES.......................................................................
29
5.10. ABSENCE OF CERTAIN
CHANGES OR
EVENTS....................................................................
29
5.11.
LITIGATION..............................................................................................
30
5.12. REGULATORY
MATTERS......................................................................................
30
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5.13. COMPLIANCE WITH
LAWS....................................................................................
31
5.14. MATERIAL CONTRACTS;
DEFAULTS............................................................................
31
5.15. NO
BROKERS..............................................................................................
33
5.16. EMPLOYEE BENEFIT
PLANS..................................................................................
33
5.17. LABOR
MATTERS...........................................................................................
35
5.18. ENVIRONMENTAL
MATTERS...................................................................................
35
5.19. TAX
MATTERS.............................................................................................
36
5.20. RISK MANAGEMENT
INSTRUMENTS.............................................................................
37
5.21. INVESTMENT
SECURITIES...................................................................................
38
5.22. LOANS; NONPERFORMING
AND CLASSIFIED
ASSETS..............................................................
38
5.23. BANK OWNED LIFE
INSURANCE...............................................................................
39
5.24.
PROPERTIES..............................................................................................
39
5.25. INTELLECTUAL
PROPERTY...................................................................................
39
5.26. FIDUCIARY
ACCOUNTS......................................................................................
40
5.27.
CAPITALIZATION..........................................................................................
40
5.28. COMMUNITY REINVESTMENT
ACT, ANTI-MONEY LAUNDERING AND CUSTOMER INFORMATION
SECURITY.................... 40
5.29. BOOKS AND
RECORDS.......................................................................................
40
5.30.
INSURANCE...............................................................................................
40
5.31. ALLOWANCE FOR LOAN
LOSSES...............................................................................
41
5.32. CREDIT CARD
ACCOUNTS....................................................................................
41
5.33. MERCHANT
PROCESSING.....................................................................................
41
5.34. TRANSACTIONS WITH
AFFILIATES............................................................................
41
5.35. MATERIAL INTERESTS OF
CERTAIN
PERSONS...................................................................
41
5.36. REQUIRED VOTE;
ANTITAKEOVER
PROVISIONS..................................................................
41
5.37. FAIRNESS
OPINION........................................................................................
42
5.38.
DISCLOSURE..............................................................................................
42
ARTICLE VI. REPRESENTATIONS AND WARRANTIES
OF
BANCORP............................................................
42
6.1. ORGANIZATION, STANDING
AND
AUTHORITY.....................................................................
42
6.2. CAPITAL
STRUCTURE........................................................................................
42
6.3.
SUBSIDIARIES.............................................................................................
42
6.4. CORPORATE
POWER..........................................................................................
44
6.5. CORPORATE
AUTHORITY......................................................................................
44
6.6. REGULATORY APPROVALS;
NO
DEFAULTS........................................................................
44
6.7. BANCORP FINANCIAL
STATEMENTS.............................................................................
45
6.8. BANCORP
REPORTS..........................................................................................
46
6.9. ABSENCE OF UNDISCLOSED
LIABILITIES.......................................................................
46
6.10. NO MATERIAL ADVERSE
EFFECT..............................................................................
46
6.11.
LITIGATION..............................................................................................
47
6.12. REGULATORY
MATTERS......................................................................................
47
6.13. COMPLIANCE WITH
LAWS....................................................................................
47
6.14. MATERIAL CONTRACTS;
DEFAULTS............................................................................
48
6.15. NO
BROKERS..............................................................................................
48
6.16. EMPLOYEE BENEFIT
PLANS..................................................................................
48
6.17. LABOR
MATTERS...........................................................................................
50
6.18. ENVIRONMENTAL
MATTERS...................................................................................
50
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6.19. TAX
MATTERS.............................................................................................
51
6.20. RISK MANAGEMENT
INSTRUMENTS.............................................................................
53
6.21. INVESTMENT
SECURITIES...................................................................................
53
6.22. LOANS; NONPERFORMING
AND CLASSIFIED
ASSETS..............................................................
53
6.23. BANK OWNED LIFE
INSURANCE...............................................................................
54
6.24.
PROPERTIES..............................................................................................
54
6.25. INTELLECTUAL
PROPERTY...................................................................................
55
6.26. FIDUCIARY
ACCOUNTS......................................................................................
55
6.27.
CAPITALIZATION..........................................................................................
55
6.28. COMMUNITY REINVESTMENT
ACT, ANTI-MONEY LAUNDERING AND CUSTOMER INFORMATION
SECURITY..................... 55
6.29. BOOKS AND
RECORDS.......................................................................................
56
6.30.
INSURANCE...............................................................................................
56
6.31. ALLOWANCE FOR LOAN
LOSSES...............................................................................
56
6.32. CREDIT CARD
ACCOUNTS....................................................................................
56
6.33. MERCHANT
PROCESSING.....................................................................................
56
6.34. TRANSACTIONS WITH
AFFILIATES............................................................................
56
6.35. OWNERSHIP OF CHART
COMMON
STOCK.........................................................................
57
6.36.
DISCLOSURE..............................................................................................
57
ARTICLE VII.
COVENANTS...........................................................................................
57
7.1. REASONABLE BEST
EFFORTS..................................................................................
57
7.2. BANCORP CONVERSION FROM
MUTUAL TO STOCK
FORM.............................................................
57
7.3. REGISTRATION
STATEMENTS..................................................................................
58
7.4. SHAREHOLDER
APPROVAL.....................................................................................
59
7.5. REGULATORY
FILINGS.......................................................................................
59
7.6. PRESS
RELEASES...........................................................................................
60
7.7. ACCESS;
INFORMATION......................................................................................
60
7.8.
AFFILIATES...............................................................................................
61
7.9. ACQUISITION
PROPOSAL.....................................................................................
61
7.10. CERTAIN
POLICIES........................................................................................
62
7.11. NASDAQ
LISTING..........................................................................................
63
7.12.
INDEMNIFICATION.........................................................................................
63
7.13. EMPLOYMENT AND BENEFIT
MATTERS..........................................................................
64
7.14. PAYMENTS AND RELATED
AGREEMENTS.........................................................................
66
7.15. NOTIFICATION OF
CERTAIN
MATTERS.........................................................................
66
7.16. UPDATE OF DISCLOSURE
SCHEDULES..........................................................................
66
7.17. CURRENT
INFORMATION.....................................................................................
67
7.18. LOAN LOSS
RESERVES......................................................................................
67
7.19. CONTROL OF OTHER
PARTY'S
BUSINESS.......................................................................
67
7.20. BANCORP PRODUCTS AND
SERVICES...........................................................................
67
7.21. ALCO
MANAGEMENT.........................................................................................
67
7.22. TAX
MATTERS.............................................................................................
68
7.23. SECTION
16..............................................................................................
68
ARTICLE VIII. CONDITIONS TO CONSUMMATION OF
THE
MERGER...........................................................
68
8.1. CONDITIONS TO EACH
PARTY'S OBLIGATIONS TO EFFECT THE
MERGER.............................................. 68
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8.2. CONDITIONS TO
OBLIGATIONS OF
CHART.......................................................................
69
8.3. CONDITIONS TO
OBLIGATIONS OF
BANCORP.....................................................................
70
ARTICLE IX.
TERMINATION..........................................................................................
71
9.1.
TERMINATION..............................................................................................
71
9.2. EFFECT OF TERMINATION;
EXPENSES..........................................................................
73
9.3. BANCORP SPECIAL
PAYMENT..................................................................................
74
9.4. CHART SPECIAL
PAYMENT....................................................................................
75
ARTICLE X.
MISCELLANEOUS.........................................................................................
77
10.1.
SURVIVAL................................................................................................
77
10.2. WAIVER;
AMENDMENT.......................................................................................
77
10.3. COUNTERPARTS AND
FACSIMILE
SIGNATURES...................................................................
77
10.4. GOVERNING
LAW...........................................................................................
77
10.5.
EXPENSES................................................................................................
77
10.6.
NOTICES.................................................................................................
77
10.7. ENTIRE UNDERSTANDING;
NO THIRD PARTY
BENEFICIARIES......................................................
78
10.8.
SEVERABILITY............................................................................................
78
10.9. ENFORCEMENT OF THE
AGREEMENT............................................................................
79
10.10.
INTERPRETATION.........................................................................................
79
10.11.
ASSIGNMENT.............................................................................................
79
10.12. ALTERNATIVE
STRUCTURE..................................................................................
79
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<PAGE>
AGREEMENT AND PLAN OF MERGER
AGREEMENT
AND PLAN OF MERGER, dated as of September 1, 2004 (this
"AGREEMENT"), by and among Benjamin
Franklin Bancorp, M.H.C. ("BANCORP"),
Benjamin Franklin Savings Bank ("BANCORP
BANK") and Chart Bank, A Cooperative
Bank ("CHART"). Capitalized terms used but
not defined in the Recitals to this
Agreement shall have the meanings defined
in Section 1.1.
RECITALS
WHEREAS,
Chart is a Massachusetts chartered co-operative bank in stock
form, having its principal place of
business in Waltham, Massachusetts;
WHEREAS,
Bancorp is a Massachusetts chartered mutual holding company,
having its principal place of business in
Franklin, Massachusetts;
WHEREAS,
the Boards of Bancorp, Bancorp Bank and Chart have each
determined that it is advisable and in the
best interests of their respective
companies (and, with respect to Chart, its
stockholders) for Chart to merge with
and into Bancorp Bank, subject to the terms
and conditions set forth herein;
WHEREAS,
Bancorp will convert from mutual to stock form pursuant to a
plan
of conversion;
WHEREAS,
Bancorp Bank is a direct, wholly-owned subsidiary of Bancorp;
WHEREAS,
Chart will merge with Bancorp Bank, with Bancorp Bank as the
surviving bank;
WHEREAS,
as a condition and inducement to Bancorp to enter into this
Agreement, each person listed on Exhibit A
to this Agreement ("SHAREHOLDER") is
entering into an agreement, simultaneously
with the execution of this Agreement,
in the form of Exhibit B hereto
(collectively, the "VOTING AGREEMENTS") pursuant
to which each such Shareholder has agreed,
among other things, to vote the
Shareholder's shares of Chart Common Stock
in favor of this Agreement and the
transactions contemplated hereby;
WHEREAS,
as a condition and inducement to Bancorp to enter into this
Agreement, each director of Chart is
entering into an agreement, simultaneously
with the execution of this Agreement, in
the form of Exhibit C hereto
(collectively, the "RELEASE AGREEMENTS")
pursuant to which each such director
has agreed to release Chart and any
successors in interest from claims as
specified therein.
WHEREAS, the
parties desire to make certain representations, warranties
and agreements in connection with the
business combination transactions
described in this Agreement and to
prescribe certain conditions thereto;
NOW,
THEREFORE, in consideration of the foregoing and the mutual
covenants, representations, warranties and
agreements contained herein, and
intending to be legally bound
<PAGE>
hereby, the parties agree as follows:
ARTICLE I.
DEFINITIONS; DISCLOSURE
1.1.
CERTAIN DEFINITIONS. The following terms are used in this
Agreement
with the meanings set forth below:
"ACQUISITION PROPOSAL" shall mean (x) a bona fide proposal by any
person
(other than Bancorp or any subsidiary of
Bancorp) to Chart or its stockholders
to engage in a Change in Control
Transaction, (y) a public statement by any
person (other than Bancorp or any
subsidiary of Bancorp) to Chart or its
stockholders of such person's intention to
make a proposal to engage in a Change
in Control Transaction if this Agreement
terminates or (z) the filing by any
person (other than Bancorp or any
subsidiary of Bancorp) of an application or
notice with any Governmental Authority to
engage in a Change in Control
Transaction.
"AGGREGATE
CASH CONSIDERATION" shall be the product of the number of
shares of Chart Common Stock outstanding
immediately prior to the Effective Time
times 0.45 times the Per Share Cash
Consideration.
"AGREEMENT" shall mean this Agreement, as amended or modified from
time to
time in accordance with Section 10.2.
"ARTICLES
OF MERGER" shall have the meaning set forth in Section 2.6(a).
"AUTHORIZED REPRESENTATIVE" shall mean the Chief Executive Officer
(with
respect to Chart) or the Chief Executive or
Chief Financial Officer (with
respect to Bancorp).
"BANCORP"
shall have the meaning set forth in the preamble to this
Agreement.
"BANCORP
ARTICLES" shall mean the Articles of Organization of Bancorp,
as
amended.
"BANCORP
BANK" shall mean Benjamin Franklin Savings Bank, and any
successor thereto.
"BANCORP
BANK BYLAWS" shall mean the Bylaws of Bancorp Bank.
"BANCORP
BANK CHARTER" shall mean the Articles of Organization of
Bancorp
Bank
"BANCORP
BENEFIT PLANS" shall have the meaning set forth in Section
6.16(a).
"BANCORP
BOARD" shall mean the Board of Trustees of Bancorp (before the
Conversion) and the Board of Directors of
Bancorp (after the Conversion).
"BANCORP
BYLAWS" shall mean the Bylaws of Bancorp.
"BANCORP
COMMON STOCK" shall mean the common stock of Bancorp, which
stock
shall be authorized in the Conversion.
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"BANCORP
PREFERRED STOCK" shall mean the preferred stock of Bancorp,
which
stock shall be authorized in the
Conversion.
"BANCORP
REGULATORY AUTHORITY" shall have the meaning set forth in
Section
6.12(a).
"BANCORP
SPECIAL PAYMENT" shall have the meaning set forth in Section
9.3.
"BANK
REGULATOR" shall mean and include any pertinent federal or
state
Governmental Authority charged with the
supervision of banks or bank or
financial holding companies or engaged in
the insurance of bank deposits,
including without limitation, the Federal
Reserve Board, the FDIC, the
Depositors Insurance Fund of Massachusetts,
the Co-operative Central Bank and
the Massachusetts Bank Commissioner.
"BHCA"
shall mean the Bank Holding Company Act of 1956, as amended.
"BOLI"
shall have the meaning set forth in Section 5.23.
"BUSINESS
DAY" shall mean Monday through Friday of each week, except a
legal holiday recognized as such by the
U.S. Government or any day on which
banking institutions in the Commonwealth of
Massachusetts are authorized or
obligated to close.
"CASH
ELECTION SHARES" shall have the meaning set forth in Section
3.2(b)(ii).
"CERTIFICATE" shall mean any certificate that immediately prior to
the
Effective Time represented shares of Chart
Common Stock.
"CHANGE IN
CONTROL TRANSACTION" shall mean (A) a merger, reorganization,
tender or exchange offer, recapitalization,
reorganization, liquidation, share
exchange, consolidation or similar
transaction involving Chart or any Chart
Subsidiary, (B) the disposition, by sale,
lease, exchange or otherwise, of
assets of Chart or any Chart Subsidiary
representing in either case 25% or more
of the consolidated assets of Chart and
Chart Subsidiaries, or (C) the issuance,
sale or other disposition of (including by
way of merger, consolidation, share
exchange or any similar transaction)
securities representing 19.9% or more of
the voting power of Chart or any Chart
Subsidiary.
"CHART"
shall have the meaning set forth in the preamble to this
Agreement.
"CHART
AFFILIATES" shall have the meaning set forth in Section 7.8.
"CHART
BENEFIT PLANS" shall have the meaning set forth in Section
5.16(a).
"CHART
BOARD" shall mean the Board of Directors of Chart.
"CHART
BOARD RECOMMENDATION" shall have the meaning set forth in
Section
7.4.
"CHART
BYLAWS" shall mean the Bylaws of Chart.
"CHART
CHARTER" shall mean the Amended and Restated Charter of Chart.
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"CHART
COMMON STOCK" shall mean the Series A and Series B common
stock,
$1.00 par value per share, of Chart.
"CHART
FINANCIAL STATEMENTS" shall have the meaning set forth in
Section
5.7.
"CHART
LOAN PROPERTY" shall have the meaning set forth in Section
5.18(b).
"CHART
MEETING" shall have the meaning set forth in Section 7.4.
"CHART
OPTIONS" shall mean the options to acquire Chart Common Stock
issued under the Chart Stock Option
Plan.
"CHART
PREFERRED STOCK" shall mean the serial preferred stock, par
value
$1.00 per share, of Chart.
"CHART
REGULATORY AUTHORITIES" shall have the meaning set forth in
Section
5.12(a).
"CHART
REPORTS" shall have the meaning set forth in Section 5.8.
"CHART
SPECIAL PAYMENT" shall have the meaning set forth in Section
9.4.
"CHART
STOCK" shall mean, collectively, Chart Common Stock and Chart
Preferred Stock.
"CHART
STOCK OPTION PLAN" shall mean the Chart Bank 1996 Stock Option
Plan, as amended.
"CLOSING"
and "CLOSING DATE" shall have the meanings set forth in Section
2.6(b).
"CODE"
shall mean the Internal Revenue Code of 1986, as amended.
"COMMUNITY
REINVESTMENT ACT" shall mean the Community Reinvestment Act of
1977, as amended.
"CONSULTING AGREEMENT" has the meaning set forth in Section
7.14.
"CONVERSION" shall mean the conversion of Bancorp from mutual to
stock
form.
"CORPORATORS" shall mean the Corporators of Bancorp.
"DETERMINATION DATE" shall mean the date on which the last
required
approval of a Governmental Authority is
obtained with respect to the
Transactions, without regard to any
requisite waiting period.
"DERIVATIVES CONTRACT" shall have the meaning set forth in Section
5.19.
"DISCLOSURE SCHEDULE" shall have the meaning set forth in Section
1.3.
"DISSENTING SHARES" shall have the meaning set forth in Section
3.6.
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"DPC
SHARES" shall mean shares of Chart Common Stock held in respect
of
debt previously contracted.
"EFFECTIVE DATE" shall have the
meaning set forth in Section 2.6(a).
"EFFECTIVE
TIME" shall have the meaning set forth in Section 2.6(a).
"ELECTION
DEADLINE" shall have the meaning set forth in Section 3.2(e).
"ELECTION
FORM" shall have the meaning set forth in Section 3.2(a)(ii).
"ENVIRONMENTAL LAWS" shall mean any federal, state or local
law,
regulation, order, decree, permit,
authorization, opinion or agency requirement
relating to: (A) the protection or
restoration of the environment, health,
safety, or natural resources, (B) the
handling, use, presence, disposal, release
or threatened release of any Hazardous
Substance or (C) wetlands, pollution,
contamination or any injury or threat of
injury to Persons or property in
connection with any Hazardous
Substance.
"EQUAL
CREDIT OPPORTUNITY ACT" shall mean the Equal Credit Opportunity
Act, as amended.
"EQUITY
INTERESTS" shall mean, with respect to any Person, warrants,
options, rights, subscriptions, calls,
commitments, convertible securities and
other arrangements or commitments of any
character that call for the Person to
issue, deliver or dispose, or cause to be
issued, delivered or disposed, any of
its or its Subsidiaries' capital stock or
other ownership or equity interests of
such Person or its Subsidiaries.
"ERISA"
shall mean the Employee Retirement Income Security Act of 1974,
as
amended.
"ERISA
AFFILIATE" shall mean any entity that is considered one
employer
with Chart or Bancorp, as the case may be,
under Section 4001(b)or Section 414
of the Code.
"EXCHANGE
ACT" shall mean the Securities Exchange Act of 1934, as
amended,
and the rules and regulations
thereunder.
"EXCHANGE
AGENT" shall have the meaning set forth in Section 3.2(a).
"EXPENSES" shall
have the meaning set forth in Section 9.2(b).
"EXPIRATION DATE" shall have the meaning set forth in Section
9.1(b).
"FAIR
HOUSING ACT" shall mean the Fair Housing Act, as amended.
"FDIC"
shall mean the Federal Deposit Insurance Corporation.
"FEDERAL
RESERVE ACT" shall mean the Federal Reserve Act, as amended.
"FEDERAL
RESERVE BOARD" shall mean the Board of Governors of the Federal
Reserve System.
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"GAAP" shall mean United
States generally accepted accounting principles.
"GOVERNMENTAL AUTHORITY" shall mean any United States or foreign,
federal,
state or local governmental commission,
board, body, bureau, or other regulatory
authority, agency, including courts and
other judicial bodies, or any
self-regulatory body or authority,
including any instrumentality or entity
designated to act for or on behalf of the
foregoing.
"HAZARDOUS
SUBSTANCE" shall mean any substance that is: (A) listed,
classified or regulated pursuant to any
Environmental Law, (B) any petroleum
product or by-product, asbestos-containing
material, lead-containing paint or
plumbing, polychlorinated biphenyls,
radioactive materials or radon or (C) any
other substance that is the subject of
regulatory action by any Governmental
Authority in connection with any
Environmental Law.
"INDEMNIFIED PARTY," "INDEMNIFIED PARTIES" and "INDEMNIFYING PARTY"
shall
have the meanings set forth in Section
7.12(a).
"INSURANCE
AMOUNT" shall have the meaning set forth in Section 7.12(c).
"INSURANCE
POLICIES" shall have the meaning set forth in Section 5.30.
"JOINT
VENTURE" shall mean any corporation, limited liability company,
limited liability partnership, partnership,
joint venture, trust, association or
other entity that is not a Subsidiary of
Chart, as the case may be, and in which
(a) Chart, directly or indirectly, owns or
controls any shares of any class of
the outstanding voting securities or other
Equity Interests, including without
limitation, an equity investment, as such
term as of the date hereof is defined
in the FDIC's rules and regulations
regarding activities and investments of
insured state banks at 12 C.F.R. Section
362.2(g), or (b) Chart or any of its
Subsidiaries is a general partner.
"KNOWLEDGE" or any words or phrase of similar effect shall mean,
with
respect to any Person, the actual knowledge
of such Person, after reasonable due
inquiry.
"LIENS"
shall mean any charge, mortgage, pledge, security interest,
restriction, options, rights of first
refusal, claim, lien or encumbrance.
"LOANS"
shall have the meaning set forth in Section 5.22(a).
"LOAN LOSS
RESERVES" shall mean the reserves established by Chart in
accordance with its customary practices
with respect to Loans as of the Closing
Date.
"MASSACHUSETTS BANK COMMISSIONER" shall mean the Commissioner of
Banks of
The Commonwealth of Massachusetts.
"MATERIAL
ADVERSE EFFECT" shall mean, with respect to any Person, any
change or effect that (i) is or would be
reasonably likely to be material and
adverse to the financial position, results
of operations or business of such
Person and its Subsidiaries taken as a
whole or (ii) would materially impair the
ability of any Person to perform their
respective obligations
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under any Transaction Document or otherwise
materially impede the consummation
of the Transactions.
"MATERIAL
CONTRACT" shall have the meaning set forth in Sections 5.14.
"MGL"
shall mean the Massachusetts General Laws, as amended.
"MERGER"
shall have the meaning set forth in Section 2.1.
"MERGER
CONSIDERATION" shall mean the number of whole shares of Bancorp
Common Stock, plus cash in lieu of any
factional share interest, and/or the
amount of cash into which shares of Chart
Common Stock shall be converted
pursuant to the provisions of Article
III.
"MHPF"
shall mean the Massachusetts Housing Partnership Fund.
"MIXED
ELECTION" shall have the meaning set forth in Section
3.2(b)(iii).
"NASDAQ"
shall mean The Nasdaq Stock Market, Inc.'s National Market.
"NATIONAL
LABOR RELATIONS ACT" shall mean the National Labor Relations
Act, as amended.
"NO-ELECTION SHARES" shall have the meaning set forth in
Section
3.2(b)(iv).
"OREO"
shall mean other real estate owned.
"PAYMENT
EVENT" shall have the meaning set forth in Section 9.4(a).
"PAYMENTS
AGREEMENTS" shall have the meaning set forth in Section 7.14.
"PENSION
PLAN" shall have the meaning set forth in Section 5.16(b).
"PER SHARE
CASH CONSIDERATION" shall have the meaning set forth in Section
3.1(b)(ii).
"PER SHARE
MERGER CONSIDERATION" shall mean the Per Share Stock
Consideration plus cash in lieu of any
fractional share interest or the Per
Share Cash Consideration.
"PER SHARE
STOCK CONSIDERATION" shall have the meaning set forth in
Section 3.1(b)(i).
"PERSON"
shall mean any individual, bank, corporation, partnership,
association, joint-stock company, business
trust, limited liability company or
unincorporated organization.
"PREVIOUSLY DISCLOSED" by a party shall mean information set forth
in a
section of its Disclosure Schedule
corresponding to the section of this
Agreement where such term is used (except
as otherwise specifically provided in
Section 1.3 or otherwise in this
Agreement).
"PROCEEDING" shall have the meaning set forth in Section
7.12(a).
"PROXY
STATEMENT" shall have the meaning set forth in Section 7.3(a).
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<PAGE>
"REALLOCATED CASH SHARES" shall have the meaning set forth in
Section
3.2(g)(i)(C).
"REALLOCATED STOCK SHARES" shall have the meaning set forth in
Section
3.2(g)(ii)(B).
"REGISTRATION STATEMENT" shall mean each and both of the
registration
statements referred to in Section
7.3(a).
"REPRESENTATIVES" shall have the meaning set forth in Section
7.9.
"SAIF"
shall mean the Savings Association Insurance Fund maintained by
the
FDIC.
"SEC"
shall mean the Securities and Exchange Commission.
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended,
and
the rules and regulations thereunder.
"SHAREHOLDERS" shall have the meaning set forth in the recitals to
this
Agreement.
"SPECIAL
PAYMENT TERMINATION DATE" shall have the meaning set forth in
Section 9.4(c).
"STOCK
ELECTION SHARES" shall have the meaning set forth in Section
3.2(b)(i).
"STOCK
OPTION EXCHANGE RATIO" shall mean the Per Share Stock
Consideration.
"SUBSIDIARY" shall have the meaning ascribed to that term in Rule
1-02 of
Regulation S-X of the SEC.
"SURVIVING
BANK" shall have the meaning set forth in Section 2.1.
"TAX" and
"TAXES" mean all federal, state, local or foreign income, gross
income, gains, gross receipts, sales, use,
ad valorem, goods and services,
capital, production, transfer, franchise,
windfall profits, license,
withholding, payroll, employment,
disability, employer health, excise,
estimated, severance, stamp, occupation,
property, environmental, custom duties,
unemployment or other taxes of any kind
whatsoever, together with any interest,
additions or penalties thereto and any
interest in respect of such interest and
penalties.
"TAX
RETURNS" shall mean any return, declaration, report, claim for
refund, information return or other
document (including any schedules or
attachments thereto) filed or required to
be filed in connection with the
determination, assessment or collection of
any Tax or the administration of any
laws, regulations or administrative
requirements relating to any Tax.
"TENDER
OFFER" shall mean a tender offer or exchange offer to purchase
any
shares of Chart Common Stock such that,
upon consummation of such offer, the
person making such tender offer or exchange
offer would own or control 19.9% or
more of the then outstanding shares of
Chart Common Stock.
"TIME
EXTENSION EVENT" shall have the meaning set forth in Section
9.4(b).
"TRANSACTIONS" shall mean the Conversion and the Merger.
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"TRANSACTION DOCUMENT" shall mean any and all of this Agreement,
the
Disclosure Schedules of Chart and Bancorp,
the Voting Agreements, the Release
Agreements, the Payments Agreements and the
Consulting Agreements.
"UNPERFECTED DISSENTING SHARES" shall have the meaning set forth
in
Section 3.6.
"USA
PATRIOT ACT" shall have the meaning set forth in Section 5.28.
"VOTING
AGREEMENTS" shall have the meaning set forth in the recitals to
this Agreement.
"WELFARE
PLAN" shall mean an employee welfare benefit plan (within the
meaning of Section 3(1) of ERISA).
1.2. OTHER
DEFINITIONAL MATTERS. Unless the context otherwise requires, a
term defined anywhere in this Agreement has
the same meaning throughout; all
references to "the Agreement" or "this
Agreement" are to this Agreement as
modified, supplemented or amended from time
to time; and terms defined in the
singular shall have a comparable meaning
when used in the plural, and vice
versa.
1.3. DISCLOSURE
SCHEDULES. On or prior to the date hereof, Bancorp has
delivered to Chart a schedule and Chart has
delivered to Bancorp a schedule
(respectively, its "DISCLOSURE SCHEDULE")
setting forth, among other things,
items the disclosure of which is necessary
or appropriate either in response to
an express disclosure requirement contained
in a provision hereof or as an
exception to one or more representations or
warranties contained in Article V or
Article VI or to one or more of its
covenants contained in Article IV. The mere
inclusion of a fact, circumstance or event
in a Disclosure Schedule shall not be
deemed an admission by a party that such
item represents a material exception or
that such item is reasonably likely to
result in a Material Adverse Effect. Any
matter disclosed pursuant to one section of
a party's Disclosure Schedule shall
be deemed disclosed for all purposes of
such party's Disclosure Schedule, but
only to the extent that it is reasonably
apparent from a reading of the
disclosure that it also qualifies or
applies to other sections of the Agreement
and the corresponding Schedule.
ARTICLE II.
THE MERGER
2.1. THE MERGER.
Subject to the terms and conditions of this Agreement, at
the Effective Time, Chart shall be merged
with and into Bancorp Bank (the
"MERGER") and Bancorp Bank shall be the
surviving bank of the Merger. The
identity, rights, privileges, powers,
franchises, properties, assets,
liabilities and obligations of Bancorp Bank
shall continue unaffected and
unimpaired by the Merger. At the time of
the Merger, the separate existence of
Chart shall cease and all of the rights,
privileges, powers, franchises,
properties, assets, liabilities and
obligations of Chart shall be vested in and
assumed by Bancorp Bank, as the surviving
bank (the "SURVIVING BANK").
2.2. SURVIVING
BANK.
(a)
CHARTER AND BYLAWS. The Charter and Bylaws of Surviving Bank shall
be
the Charter and Bylaws of Bancorp Bank as
in effect immediately prior to the
Effective Time, until
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thereafter amended as provided therein and
by applicable law.
(b) NAME AND PURPOSES. The name of
Surviving Bank shall be Benjamin
Franklin Savings Bank, Benjamin Franklin
Bank or such other name as Bancorp may
designate, with the prior written consent
of Chart (which consent shall not be
unreasonably withheld), and the purposes of
Surviving Bank shall be the purposes
of Bancorp Bank as contained in its
Charter, until thereafter amended as
provided in the Charter of Surviving Bank
and by applicable law.
(c)
CAPITAL STOCK. The total number of shares and the par value of
each
class of stock that Surviving Bank is
authorized to issue and the description of
each class, with their respective
preferences, voting powers, qualifications,
special or relative rights or privileges,
shall be the same as that of Bancorp
Bank as contained in its Charter, until
thereafter amended as provided in said
Charter and by applicable law.
(d)
DIRECTORS AND OFFICERS OF SURVIVING BANK.
(i) Except as set forth in Section 2.2(d)(ii), the directors
and
officers of Surviving
Bank immediately after the Merger shall be the
directors and officers
of Bancorp Bank immediately prior to the Merger,
until such time as
their successors shall be duly elected and qualified.
(ii) Promptly following the Effective Time, six persons (one of
whom
shall be Chart's
President and Chief Executive Officer) who were serving as
directors of Chart as
of the date of this Agreement and who are mutually
agreed upon by Chart
and Bancorp shall be elected or appointed to the
Surviving Bank Board
of Directors. Such former directors of Chart shall be
classified evenly, to
the extent practicable, into each of the classes of
the Surviving Bank
Board of Directors and each of the committees of the
Surviving Bank Board
of Directors shall include a number of former Chart
directors such that,
to the extent practicable, former Chart directors serve
on each committee in
the same proportions as they serve on the Surviving
Bank Board of
Directors. If any person initially designated to be a Director
of Surviving Bank is
unable at the time of such election or appointment to
serve as a Director of
Surviving Bank for any reason, a replacement or
replacements
designated by the mutual agreement of (i) the Directors of
Surviving Bank who
were formerly directors of Chart (ii) and the Directors
of Surviving Bank who
were formerly directors of Bancorp Bank shall be so
elected or appointed
instead.
2.3.
BANCORP.
(a) CHARTER AND BYLAWS. The Charter and Bylaws of Bancorp as of
the
Effective Time shall be in the forms
reviewed and approved by the Massachusetts
Bank Commissioner as part of Bancorp's
Conversion approval process, until
thereafter amended as provided therein and
by applicable law. Bancorp shall give
Chart the opportunity to review and comment
on its Charter and Bylaws prior to
submitting them to the Massachusetts Bank
Commissioner for approval, and will
accept and honor the reasonable comments
and requests of Chart with respect to
the terms of the Bancorp Charter and Bylaws
to the extent such comments and
requests relate to implementation of
Section 2.3(b) in accordance with its
terms, and will otherwise give due
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<PAGE>
consideration to the reasonable comments of
Chart relating to the terms of the
Bancorp Charter and Bylaws.
(b) DIRECTORS OF BANCORP. Promptly following the Effective Time,
six
persons (one of whom shall be Chart's
President and Chief Executive Officer) who
were serving as directors of Chart as of
the date of this Agreement and who are
mutually agreed upon by Chart and Bancorp
shall be elected or appointed to the
Bancorp Board of Directors. Such former
directors of Chart shall be classified
evenly, to the extent practicable, into
each of the classes of the Bancorp Board
and each of the committees of the Bancorp
Board shall include a number of former
Chart directors, to the extent practicable,
such that former Chart directors
serve on each committee in the same
proportions as they serve on the Bancorp
Board. If any person initially designated
to be a Director of Bancorp is unable
at the time of such election or appointment
to serve as a Director of Bancorp
for any reason, a replacement or
replacements designated by the mutual agreement
of (i) the Directors of Bancorp who were
formerly directors of Chart and (ii)
the Directors of Bancorp who were formerly
trustees of Bancorp shall be so
elected or appointed instead.
2.4.
EFFECT OF THE MERGER. At the Effective Time, the effect of the
Merger
shall be as provided in this Agreement and
in the applicable provisions of
Chapters 168, 170 and 172 of the MGL.
Without limiting the generality of the
foregoing, and subject thereto, at the
Effective Time, all the property, rights,
privileges, powers and franchises of Chart
shall vest in Surviving Bank, and all
debts, liabilities, obligations,
restrictions, disabilities and duties of Chart
shall become the debts, liabilities,
obligations, restrictions, disabilities and
duties of Surviving Bank.
2.5.
ADDITIONAL ACTIONS. If, at any time after the Effective Time,
Surviving Bank shall consider that any
further assignments or assurances in law
or any other acts are necessary or
desirable to (i) vest, perfect or confirm, of
record or otherwise, in Surviving Bank its
right, title or interest in, to or
under any of the rights, properties or
assets of Chart acquired or to be
acquired by Surviving Bank as a result of,
or in connection with, the Merger, or
(ii) otherwise carry out the purposes of
this Agreement, Chart and its proper
officers and directors shall be deemed to
have granted to Surviving Bank an
irrevocable power of attorney to execute
and deliver all such proper deeds,
assignments and assurances in law and to do
all acts necessary or proper to
vest, perfect or confirm title to and
possession of such rights, properties or
assets in Surviving Bank and otherwise to
carry out the purposes of this
Agreement, and the proper officers and
directors of Surviving Bank are fully
authorized in the name of Surviving Bank or
otherwise to take any and all such
action.
2.6.
EFFECTIVE DATE AND EFFECTIVE TIME; CLOSING.
(a) Subject to the satisfaction or waiver of the conditions set
forth
in Article VIII and those conditions that
by their nature are to be satisfied at
the consummation of the Merger, but subject
to the fulfillment or waiver of
those conditions), the parties shall cause
articles of merger relating to the
Merger (the "ARTICLES OF MERGER") to be
filed with the Secretary of State of The
Commonwealth of Massachusetts pursuant to
the MGL on (i) a date selected by
Bancorp after such satisfaction or waiver
which is no later than five Business
Days after such satisfaction or waiver, or
(ii) such other date to which the
parties may agree in writing; provided,
however, that the closing of the
Conversion, including all of the necessary
filings in connection therewith,
shall
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<PAGE>
occur and become effective prior to and on
the same day as the effective date of
the Articles of Merger. The Merger shall
become effective on the date the
Articles of Merger, accompanied by payment
of the filing fee (as provided in
Chapter 156B, Section 6 and Section 114 of
the MGL), have been examined by and
received the endorsed approval of the
Secretary of State of the Commonwealth of
Massachusetts or on such later date as may
be specified therein (the "EFFECTIVE
DATE"). The "EFFECTIVE TIME" of the Merger
shall be the time at which the
Articles of Merger with respect to the
Merger, accompanied by payment of the
filing fee (as provided in Chapter 156B,
Section 6 and Section 114 of the MGL),
have been examined by an received the
endorsed approval of the Secretary of
State of the Commonwealth of Massachusetts
or as set forth in such filing (the
"EFFECTIVE TIME"). The filing of the
Articles of Merger and all filings
necessary to complete the Conversion shall
be made on the Closing Date.
(b) A closing (the "CLOSING") shall take place on the date on which
the
Articles of Merger are filed at 10:00 a.m.,
Eastern Time, at the principal
offices of Foley Hoag LLP, Boston,
Massachusetts, or at such other place, at
such other time, or on such other date as
the parties may mutually agree upon
(such date, the "CLOSING DATE"). At the
Closing, there shall be delivered to
Bancorp and Chart the opinions,
certificates and other documents required to be
delivered under Article VIII hereof.
ARTICLE III.
CONSIDERATION; EXCHANGE PROCEDURES
3.1.
CONVERSION OF SHARES. At the Effective Time, by virtue of the
Merger
and without any action on the part of a
holder of stock or any other Equity
Interests of Chart:
(a) Each share of Chart Common Stock held of record immediately
prior
to the Effective Time by Chart, Bancorp or
any Subsidiary of Chart or of Bancorp
(other than DPC Shares) shall be canceled
and retired at the Effective Time and
no consideration shall be issued in
exchange therefor.
(b) Subject to Sections 3.2, 3.5, 3.6 and 3.7, each share of
Chart
Common Stock issued and outstanding
immediately prior to the Effective Time
(other than shares to be canceled in
accordance with Section 3.1(a)) shall be
converted into, and shall be canceled in
exchange for, the right to receive:
(i) 3.075 shares of Bancorp Common Stock (the "PER SHARE STOCK
CONSIDERATION"),
or
(ii) a cash amount equal to $30.75 per share of Chart Common
Stock
(the "PER SHARE CASH
CONSIDERATION").
The definition of the Per Share Stock
Consideration set forth in Section
3.1(b)(i) assumes that the initial public
offering price of the Bancorp Common
Stock in the Conversion will be $10.00 per
share, which price shall be the price
at which shares of Bancorp Common Stock are
initially sold in the Conversion,
based upon the appraised pro forma market
value of Bancorp Common Stock
determined by a qualified independent
appraiser selected by Bancorp and approved
by the Massachusetts Bank Commissioner (the
"IPO PRICE"). If the IPO Price is an
amount other than $10.00, the Per Share
Stock Consideration shall be
proportionately adjusted so that (i)
the
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number of shares of Bancorp Common Stock
received for each share of Chart Bank
Common Stock times (ii) the IPO Price,
equals $30.75.
3.2.
ELECTION PROCEDURES.
(a) Bancorp shall designate an exchange agent to act as agent
(the
"EXCHANGE AGENT") for purposes of
conducting the election procedure and the
exchange procedure described in Sections
3.2 and 3.3. Provided that Chart has
delivered, or caused to be delivered, to
the Exchange Agent all information that
is necessary for the Exchange Agent to
perform its obligations as specified
herein, the Exchange Agent shall, no later
than the twenty-fifth (25th) Business
Day prior to the anticipated Effective
Date, mail or make available to each
holder of record of a Certificate or
Certificates:
(i) a notice and letter of transmittal (which shall specify
that
delivery shall be
effected, and risk of loss and title to the Certificates
theretofore
representing shares of Chart Common Stock shall pass, only upon
proper delivery of the
Certificates to the Exchange Agent) advising such
holder of the
anticipated effectiveness of the Merger and the procedure for
surrendering to the
Exchange Agent such Certificate or Certificates in
exchange for the
consideration set forth in Section 3.1(b) hereof
deliverable in respect
thereof pursuant to this Agreement and
(ii) an election form in such form as Bancorp and Chart shall
mutually agree (the
"ELECTION FORM").
(b) Each Election Form shall permit the holder (or in the case
of
nominee record holders, the beneficial
owner through proper instructions and
documentation)
(i) to elect to receive Bancorp Common Stock with respect to all
of
such holder's Chart
Common Stock as hereinabove provided (the "STOCK
ELECTION SHARES"),
(ii) to elect to receive cash with respect to all of such
holder's
Chart Common Stock as
hereinabove provided (the "CASH ELECTION SHARES"),
(iii) to elect to receive Bancorp Common Stock with respect to
part
of such holder's Chart
Common Stock and to receive cash with respect to the
remaining part of such
holder's Chart Common Stock as hereinabove provided
(a "MIXED ELECTION"),
or
(iv) to indicate that such holder makes no such election with
respect to such
holder's shares of Chart Common Stock (the "NO-ELECTION
SHARES").
(c) With respect to each holder of Chart Common Stock who makes a
Mixed
Election, the shares of Chart Common Stock
such holder elects to be converted
into the right to receive Bancorp Common
Stock shall be treated as Stock
Election Shares and the shares such holder
elects to be converted into the right
to receive cash shall be treated as Cash
Election Shares for purposes of the
provisions contained in Sections 3.2(b),
3.2(g) and 3.2(h). Nominee record
holders who hold Chart Common Stock on
behalf of multiple beneficial owners
shall indicate how many of the shares held
by them are Stock Election Shares,
Cash Election Shares and No-Election
Shares.
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<PAGE>
(d) If a shareholder either (i) does not submit a properly
completed
Election Form prior to the Election
Deadline or (ii) revokes an Election Form
prior to the Election Deadline and does not
resubmit a properly completed
Election Form prior to the Election
Deadline, the shares of Chart Common Stock
held by such shareholder shall be treated
as No-Election Shares. Any Dissenting
Shares shall be deemed to be Cash Election
Shares, and with respect to such
shares the holders thereof shall in no
event receive consideration consisting of
Bancorp Common Stock.
(e) The term "ELECTION DEADLINE" shall mean 5:00 p.m., Eastern
Time, on
the 20th Business Day following but not
including the date of mailing of the
Election Form or such other date as Bancorp
and Chart shall mutually agree upon.
(f) Any election to receive Bancorp Common Stock or cash shall
have
been properly made only if the Exchange
Agent shall have actually received a
properly completed Election Form by the
Election Deadline. An Election Form will
be properly completed only if accompanied
by Certificates representing all
shares of Chart Common Stock covered
thereby, subject to the provisions of
Section 3.3(c). Any Election Form may be
revoked or changed by the Person
submitting such Election Form to the
Exchange Agent by written notice to the
Exchange Agent only if such written notice
is actually received by the Exchange
Agent at or prior to the Election Deadline.
The Certificate or Certificates
representing Chart Common Stock relating to
any revoked Election Form shall be
promptly returned without charge to the
Person submitting the Election Form to
the Exchange Agent. The Exchange Agent
shall have reasonable discretion to
determine when any election, modification
or revocation is received, whether any
such election, modification or revocation
has been properly made and to
disregard immaterial defects in any
Election Form, and any good faith decisions
of the Exchange Agent regarding such
matters shall be binding and conclusive.
Neither Bancorp nor the Exchange Agent
shall be under any obligation to notify
any Person of any defect in an Election
Form.
(g) Within five (5) Business Days after the Election Deadline,
the
Exchange Agent shall calculate the
allocation among holders of Chart Common
Stock of rights to receive Bancorp Common
Stock or cash in the Merger in
accordance with the Election Forms as
follows:
(i) If the number of Cash Election Shares times the Per Share
Cash
Consideration is less
than the Aggregate Cash Consideration, then:
(A) all Cash Election Shares (subject to Section 3.6 with
respect
to Dissenting Shares)
shall be converted into the right to receive cash,
(B) No-Election Shares shall then be deemed to be Cash Election
Shares to the extent
necessary to have the total number of Cash Election
Shares times the Per
Share Cash Consideration equal the Aggregate Cash
Consideration. If less
than all of the No-Election Shares need to be treated
as Cash Election
Shares, then the Exchange Agent shall select which
No-Election Shares
shall be treated as Cash Election Shares in such manner
as the Exchange Agent
shall determine in accordance with Section 3.2(h), and
all remaining
No-Election Shares shall thereafter be treated as Stock
Election Shares,
(C) If all of the No-Election Shares are treated as Cash
Election
Shares under the
preceding subsection, and the total number of Cash Election
Shares (including such No-Election
Shares treated as such) times the Per
Share Cash
Consideration remains less
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<PAGE>
than the Aggregate
Cash Consideration, then the Exchange Agent shall convert
on a pro rata basis as
described below a sufficient number of Stock Election
Shares into Cash
Election Shares ("REALLOCATED CASH SHARES") such that the
sum of the number of
Cash Election Shares plus the number of Reallocated
Cash Shares times the
Per Share Cash Consideration equals the Aggregate Cash
Consideration, and all
Reallocated Cash Shares will be converted into the
right to receive the
Per Share Cash Consideration, and
(D) the Stock Election Shares that are not Reallocated Cash
Shares shall be
converted into the right to receive the Per Share Stock
Consideration.
(ii) If the number of Cash Election Shares times the Per Share
Cash
Consideration is
greater than the Aggregate Cash Consideration, then:
(A) all Stock Election Shares and all No-Election Shares shall
be
converted into the
right to receive Bancorp Common Stock,
(B) the Exchange Agent shall convert on a pro rata basis as
described below a
sufficient number of Cash Election Shares (excluding any
Dissenting Shares)
("REALLOCATED STOCK SHARES") such that the number of
remaining Cash
Election Shares (including Dissenting Shares) times the Per
Share Cash
Consideration equals the Aggregate Cash Consideration, and all
Reallocated Stock
Shares shall be converted into the right to receive the
Per Share Stock
Consideration, and
(C) the Cash Election Shares (subject to Section 3.6 with
respect
to Dissenting Shares)
that are not Reallocated Stock Shares shall be
converted into the
right to receive the Per Share Cash Consideration.
(iii) If the number of Cash Election Shares times the Per Share
Cash
Consideration is equal
to the Aggregate Cash Consideration, then Sections
3.2(g)(i) and
3.2(g)(ii) above shall not apply and all No-Election Shares
and all Stock Election
Shares will be converted into the right to receive
the Per Share Stock
Consideration.
(h) In the
event that the Exchange Agent is required pursuant to Section
3.2(g)(i)(C) to convert some Stock Election
Shares into Reallocated Cash Shares,
each holder of Stock Election Shares shall
be allocated a pro rata portion of
the total Reallocated Cash Shares. In the
event the Exchange Agent is required,
pursuant to Section 3.2(g)(ii)(B), to
convert some Cash Election Shares into
Reallocated Stock Shares, each holder of
Cash Election Shares shall be allocated
a pro rata portion of the total Reallocated
Stock Shares. In the event the
Exchange Agent is required pursuant to
Section 3.2(g)(i)(B) to convert some
No-Election Shares into Cash Election
Shares, such conversion shall be allocated
on a pro rata basis among No-Election
Shares.
(i) Bancorp will include in its plan of conversion relating to
the
Conversion a provision to the effect that,
if any shares of Bancorp Common Stock
that are offered for sale in the community
offering that is conducted as part of
the Conversion remain unsold, such shares
may, in the sole discretion of
Bancorp, be issued to holders of Chart
Common Stock as part of the Merger
Consideration.
3.3.
EXCHANGE PROCEDURES.
(a) At or prior to the Effective Time, for the benefit of the
holders
of Certificates,
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<PAGE>
Bancorp shall deliver to the Exchange Agent
certificates evidencing the number
of shares of Bancorp Common Stock issuable
and the Aggregate Cash Consideration
payable pursuant to this Article III in
exchange for Certificates representing
outstanding shares of Chart Common Stock.
The Exchange Agent shall not be
entitled to vote or exercise any rights of
ownership with respect to the shares
of Bancorp Common Stock held by it from
time to time hereunder, except that it
shall receive and hold all dividends or
other distributions paid or distributed
with respect to such shares for the account
of the Persons entitled thereto.
(b) After completion of the allocation referred to in Section
3.2(g),
each holder of an outstanding Certificate
or Certificates who has surrendered
such Certificate or Certificates to the
Exchange Agent will, upon acceptance
thereof by the Exchange Agent, be entitled
to a certificate or certificates
representing the number of whole shares of
Bancorp Common Stock and the amount
of cash into which the aggregate number of
shares of Chart Common Stock
previously represented by such Certificate
or Certificates surrendered shall
have been converted pursuant to this
Agreement and any other distribution
theretofore paid with respect to Bancorp
Common Stock issuable in the Merger, if
such holder's shares of Chart Common Stock
have been converted into Bancorp
Common Stock, in each case without
interest. The Exchange Agent shall accept
such Certificates upon compliance with such
reasonable terms and conditions as
the Exchange Agent may impose to effect an
orderly exchange thereof in
accordance with normal exchange practices.
Each outstanding Certificate which
prior to the Effective Time represented
Chart Common Stock and that is not
surrendered to the Exchange Agent in
accordance with the procedures provided for
herein shall, except as otherwise herein
provided, until duly surrendered to the
Exchange Agent be deemed to evidence
ownership of the number of shares of
Bancorp Common Stock or the right to
receive the amount of cash into which such
Chart Common Stock shall have been
converted. After the Effective Time, there
shall be no further transfer on the records
of Chart of Certificates
representing shares of Chart Common Stock
and if such Certificates are presented
to Chart for transfer, they shall be
cancelled against delivery of certificates
for Bancorp Common Stock or cash as
hereinabove provided. No dividends that have
been declared will be remitted to any
Person entitled to receive shares of
Bancorp Common Stock under this Agreement
until such Person surrenders the
Certificate or Certificates representing
Chart Common Stock, at which time such
dividends shall be remitted to such Person,
without interest.
(c) Appropriate transmittal materials in a form satisfactory to
Bancorp
(including a letter of transmittal
specifying that delivery shall be effected
and risk of loss and title to such
certificate shall pass, only upon delivery of
such certificate to the Exchange Agent)
shall be mailed as soon as practicable
after the Effective Time to each holder of
record of Chart Common Stock as of
the Effective Time who did not previously
submit a properly completed Election
Form. Bancorp shall not be obligated to
deliver cash and/or a certificate or
certificates representing shares of Bancorp
Common Stock to which a holder of
Chart Common Stock would otherwise be
entitled as a result of the Merger until
such holder surrenders the Certificate or
Certificates representing the shares
of Chart Common Stock for exchange as
provided in this Section 3.3, or, in
default thereof, an appropriate affidavit
of loss and indemnity agreement and/or
a bond as may be required by Bancorp or the
Exchange Agent. If any certificates
evidencing shares of Bancorp Common Stock
are to be issued in a name other than
that in which the Certificate evidencing
Chart 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
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endorsed or accompanied by an executed form
of assignment separate from the
Certificate and otherwise in proper form
for transfer and that the Person
requesting such exchange pay to the
Exchange Agent any transfer or other tax
required by reason of the issuance of a
certificate for shares of Bancorp Common
Stock in any name other than that of the
registered holder of the Certificate
surrendered or otherwise establish to the
satisfaction of the Exchange Agent
that such tax has been paid or is not
payable.
(d) Any portion of the shares of Bancorp Common Stock and cash
delivered to the Exchange Agent by Bancorp
pursuant to Section 3.3(a) that
remains unclaimed by the stockholders of
Chart for one year after the Effective
Time (as well as any proceeds from any
investment thereof) shall be delivered by
the Exchange Agent to Bancorp. Any
stockholders of Chart who have not
theretofore complied with Section 3.3(c)
shall thereafter look only to Bancorp
for the consideration deliverable in
respect of each share of Chart Common Stock
such shareholder holds as determined
pursuant to this Agreement without any
interest thereon. If outstanding
Certificates for shares of Chart Common Stock
are not surrendered or the payment for them
is not claimed prior to the date on
which such shares of Bancorp 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 Bancorp (and to
the extent not in its possession
shall be delivered to it), free and clear
of all claims or interest of any
Person previously entitled to such
property. Neither the Exchange Agent nor any
party to this Agreement shall be liable to
any holder of stock represented by
any Certificate for any consideration paid
to a public official pursuant to
applicable abandoned property, escheat or
similar laws. Bancorp and the Exchange
Agent shall be entitled to rely upon the
stock transfer books of Chart to
establish the identity of those Persons
entitled to receive the consideration
specified in this Agreement, which books
shall be conclusive with respect
thereto. In the event of a dispute with
respect to ownership of stock
represented by any Certificate, Bancorp and
the Exchange Agent shall be entitled
to deposit any consideration represented
thereby in escrow with an independent
third party and thereafter be relieved with
respect to any claims thereto.
(e) Notwithstanding anything in this Agreement to the contrary,
Certificates surrendered for exchange by
any Chart Affiliate shall not be
exchanged for certificates representing
shares of Bancorp Common Stock to which
such Chart Affiliate may be entitled
pursuant to the terms of this Agreement
until Bancorp has received a written
agreement from such Person as specified in
Section 7.8.
3.4.
RIGHTS AS SHAREHOLDERS; STOCK TRANSFERS. At the Effective Time,
holders of Chart Stock shall cease to be,
and shall have no rights as,
stockholders of Chart other than to receive
the consideration provided under
this Article III. After the Effective Time,
there shall be no transfers on the
stock transfer books of Chart of shares of
Chart Stock.
3.5. NO
FRACTIONAL SHARES. Notwithstanding any other provision of this
Agreement, neither certificates nor scrip
for fractional shares of Bancorp
Common Stock shall be issued in the Merger.
Each holder of Chart Common Stock
who otherwise would have been entitled to a
fraction of a share of Bancorp
Common Stock (after taking into account all
Certificates delivered by such
holder) shall receive in lieu thereof cash
(without interest) in an amount
determined by multiplying the fractional
share interest to which such holder
would otherwise be entitled by the
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<PAGE>
Per Share Cash Consideration. No such
holder shall be entitled to dividends,
voting rights or any other rights in
respect of any fractional share.
3.6.
DISSENTING SHARES. Each outstanding share of Chart Common Stock
the
holder of which has perfected his right to
dissent under applicable law and has
not effectively withdrawn or lost such
right as of the Effective Time (the
"DISSENTING SHARES") shall not be converted
into or represent a right to receive
shares of Bancorp Common Stock and cash
hereunder. Rather, the holder thereof
shall be entitled only to payment of the
appraised value of such Dissenting
Shares in accordance with the provisions of
Section 26D of Chapter 170 of the
MGL. Chart shall give Bancorp (i) prompt
notice of any demands filed pursuant to
such Section 26D received by Chart,
withdrawals of such demands, and any other
instruments served in connection with such
demands pursuant to applicable law
and received by Chart, and (ii) the
opportunity to participate in all
negotiations and proceedings with respect
to demands under applicable law
consistent with the obligations of Chart
thereunder. Chart shall not, except
with the prior written consent of Bancorp's
Authorized Representative, (x) make
any payment with respect to, or to any
person making, any such demand, (y) offer
to settle or settle any such demand or (z)
waive any failure to timely deliver a
written demand in accordance with
applicable law. If any holder of Dissenting
Shares shall fail to perfect or shall have
effectively withdrawn or lost the
right to dissent (which shares are referred
to as "UNPERFECTED DISSENTING
SHARES") at any time, the Unperfected
Dissenting Shares held by such holder
shall be converted on a share by share
basis into the right to receive the Per
Share Stock Consideration and/or the Per
Share Cash Consideration in accordance
with the applicable provisions of this
Agreement, as Bancorp or the Exchange
Agent shall determine, without any interest
thereon. Any payments made in
respect of Dissenting Shares shall be made
by Surviving Bank.
3.7.
ANTI-DILUTION PROVISIONS. If, between the date hereof and the
Effective Time, the shares of Chart Common
Stock shall be changed or adjusted
into a different number or class of shares
by reason of any reclassification,
recapitalization, split-up, combination,
subdivision, exchange of shares or
readjustment, or a dividend thereon,
payable in stock or other security
convertible or exchangeable into stock,
shall be declared with a record date
within said period, the Per Share Stock
Consideration shall be adjusted
accordingly. The provisions of this
Agreement assume that, at the Effective
Time, there will be no more than an
aggregate of 1,557,000 shares of Chart
Common Stock outstanding or issuable upon
the exercise of options or warrants or
otherwise. If there is any change in this
number as of the Effective Time, the
Merger Consideration will be appropriately
adjusted.
3.8.
WITHHOLDING RIGHTS. Bancorp (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 Chart Common Stock
such amounts as Bancorp is required under
the Code or any state, local or
foreign tax law or regulation thereunder to
deduct and withhold with respect to
the making of such payment. Any amounts so
withheld shall be treated for all
purposes of this Agreement as having been
paid to the holder of Chart Common
Stock in respect of which such deduction
and withholding was made by Bancorp.
3.9. CHART
OPTIONS. At the Effective Time, each Chart Option that is
outstanding and unexercised immediately
prior to the Effective Time, whether or
not then vested and exercisable, shall be
terminated and each grantee thereof
shall be entitled to receive, in lieu of
each share of
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<PAGE>
Chart Common Stock that would otherwise
have been issuable upon the exercise of
such options, whether or not then vested or
exercisable, an amount of cash
computed by multiplying (i) the difference
between (x) the Per Share Cash
Consideration and (y) the per share
exercise price applicable to such Chart
Option by (ii) the number of such shares of
Chart Common Stock subject to such
Chart Option. Chart agrees to take or to
cause to be taken all action necessary
to provide for such termination and payment
effective at or before the Effective
Time.
ARTICLE IV.
ACTIONS PENDING MERGER
4.1.
AGREEMENTS OF CHART.
(a) Chart covenants and agrees that, except as expressly
contemplated
by this Agreement, between the date of this
Agreement and the Effective Time,
unless Bancorp shall otherwise agree in
writing, (i) the business of Chart and
Chart's Subsidiaries shall be conducted
only in, and Chart and Chart's
Subsidiaries shall not take any action
except in, the usual, regular and
ordinary course of business and generally
to conduct their business in
substantially the same way as heretofore
conducted, and without limiting the
foregoing, to continue to operate in the
same geographic markets serving the
same market segments and maintain its
current loan, deposit, banking products
and service programs on substantially the
same terms and conditions; (ii) Chart
shall use commercially-reasonable efforts
to preserve the business organization
of Chart and Chart's Subsidiaries, to keep
available the present services of the
officers, employees and consultants of
Chart and Chart's Subsidiaries and to
preserve the current relationships and
goodwill of Chart and Chart's
Subsidiaries with customers, suppliers and
other Persons with which Chart or any
of Chart's Subsidiaries have business
relationships; and (iii) Chart shall take
no action that would materially adversely
affect or materially delay the ability
of Chart to obtain any necessary approvals
of any Governmental Authority
required for the transactions contemplated
hereby or to perform its covenants
and agreements under any Transaction
Document.
(b) Without limiting the generality of Section 4.1(a) above, except
as
expressly contemplated by this Agreement,
Chart shall not, nor shall Chart
permit any of Chart's Subsidiaries, between
the date of this Agreement and the
Effective Time, directly or indirectly do,
or publicly announce an intention to
do, any of the following without the prior
written consent of Bancorp's
Authorized Representative (which agreement
shall not be unreasonably withheld or
delayed):
(i) CAPITAL STOCK. Other than pursuant to the Equity Interests
set
forth on Section
4.1(b)(i) of Chart's Disclosure Schedule and outstanding on
the date hereof, (i)
issue, sell or otherwise permit to become outstanding,
or authorize the
creation of, any additional shares of stock or any Equity
Interests or (ii)
permit any additional shares of stock to become subject to
grants of employee or
director stock options or other Equity Interests.
(ii) DIVIDENDS; ETC. (i) Make, declare, pay or set aside for
payment
any dividend on or in
respect of, or declare or make any distribution on any
shares of Chart Stock,
other than a regular, quarterly cash dividend at a
rate not in excess of
$0.16 per share on Chart Common Stock, declared on the
first day of each
calendar quarter and paid within
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<PAGE>
ten (10) days
thereafter; provided, however, that any quarterly cash
dividend declared on
April 1, 2005 (and any subsequent quarterly dividend
declaration date while
this Agreement is in effect) may be at a rate not in
excess of $0.18 per
share on Chart Common Stock, or (ii) directly or
indirectly adjust, split, combine,
redeem, reclassify, purchase or otherwise
acquire, or issue any
other securities in respect of, in lieu of, or in
substitution for, any
shares of its capital stock or any securities or
obligations
convertible into or exchangeable for any shares of its capital
stock (other than
pursuant to the Equity Interests set forth on Schedule 5.2
of Chart's Disclosure
Schedule and outstanding on the date hereof).
(iii) CONTRACTS. Except as set forth in Section 4.1(b)(iii) of
Chart's Disclosure
Schedule, as otherwise permitted under this Section 4.1
or as required by law,
enter into or terminate any Material Contract (as
defined in Section
5.13) or amend or modify any of its existing Material
Contracts.
(iv) HIRING. Hire any Person as an employee of Chart or any of
its
Subsidiaries or
promote any employee, except (i) to satisfy contractual
obligations existing
as of the date hereof and set forth on Schedule
4.1(b)(iv) of Chart's
Disclosure Schedule, and (ii) Persons hired to fill
any vacancies arising
after the date hereof and whose employment is
terminable at the will
of Chart or a Subsidiary of Chart, as applicable,
provided, however,
that Chart shall not hire any Person who would have a
base salary, including
any guaranteed bonus or any similar bonus, considered
on an annual basis of
more than $50,000.
(v) BENEFIT PLANS. Enter into, establish, adopt, renew or amend
(except (i) as may be
required by applicable law, (ii) to satisfy
contractual
obligations existing as of the date hereof and set forth on
Schedule 4.1(b)(v) of
Chart's Disclosure Schedule or (iii) as otherwise
contemplated by this
Agreement) any pension, retirement, stock option, stock
purchase, savings,
profit sharing, deferred compensation, consulting, bonus,
group insurance or
other employee benefit, incentive or welfare contract,
plan or arrangement,
or any trust agreement (or similar arrangement) related
thereto, in respect of
any director, officer or employee of Chart or its
Subsidiaries or take
any action to accelerate the vesting or exercisability
of stock options,
restricted stock or other compensation or benefits payable
thereunder except pursuant
to this Agreement.
(vi) DISPOSITIONS. Sell, transfer, mortgage, encumber or
otherwise
dispose of or
discontinue any of its assets, deposits, business or
properties, or cancel
or release any indebtedness of a Person or any claims
held by any Person,
except in the ordinary course of business consistent
with past
practice.
(vii) COMPENSATION; EMPLOYMENT AGREEMENTS. Except as contemplated
by
this Agreement, enter
into or amend or renew any employment, consulting,
severance or similar
agreements or arrangements with any director, officer
or employee of Chart
or its Subsidiaries or grant any salary or wage
increase or increase
any employee benefit (including incentive or bonus
payments), except (i) for
normal individual increases in compensation to
employees (other than
employees who are subject to Payments Agreements) in
the ordinary course of
business consistent with past practice in
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<PAGE>
connection with annual
reviews, provided that such increases shall not
result in an annual
adjustment in base compensation of more than 4% in the
aggregate for all
employees of Chart for the 2004 calendar year, and (ii)
for bonus payments in the ordinary
course of business consistent with past
practices, provided
that such payments shall not exceed in the aggregate the
amount set forth on
Section 4.1(b)(vii) of Chart's Disclosure Schedule, and
(iii) for other
changes that are required by applicable law.
(viii) ENVIRONMENTAL. Foreclose upon or take a deed or title to
any
commercial real estate
without first conducting a Phase I environmental
assessment of the
property or foreclose upon any commercial real estate if
such environmental
assessment indicates the presence of Hazardous Substance
in amounts that, if
such foreclosure were to occur, would be material.
(ix) INSURANCE. Renew, amend or permit to expire, lapse or
terminate
or knowingly take any
action reasonably likely to result in the creation,
renewal, amendment,
expiration, lapse or termination of any insurance
policies referred to
in Section 5.30 hereof, provided, however, that the
restrictions contained
in this Section 4.1(b)(ix) concerning renewal shall
apply only to those
insurance policies with a term greater than one (1) year
or for which a fully
earned premium has been or will be or is required to be
paid at the
commencement of the coverage period (or such renewal coverage
period).
(x) ACQUISITIONS. Acquire (other than by way of foreclosures or
acquisitions of
control in a bona fide fiduciary capacity or in satisfaction
of debts previously
contracted in good faith) all or any portion of the
assets, business,
deposits or properties of any other entity, including by
merging or
consolidating with, or by purchasing an equity interest in or a
portion of the assets
of, or by any other manner, any business or any
corporation,
partnership, Joint Venture, other business organization or any
division thereof or
any material amount of assets, other than in the
ordinary course of
business consistent with past practice.
(xi) INVESTMENTS. Make any investment either by purchase of stock
or
securities,
contributions to capital, property transfers, or purchase of
any
property or assets of
any other Person other than a wholly owned Subsidiary
of Chart, or
commitment to make such an investment, unless otherwise
permitted under
Section 4.1(b)(xix).
(xii) CAPITAL EXPENDITURES. Make any capital expenditures other
than
(i) capital
expenditures in the ordinary course of business consistent with
past practice in
amounts not exceeding $10,000 individually or $50,000 in
the aggregate and (ii)
the capital expenditures set forth in Section
4.1(b)(xii) of Chart's
Disclosure Schedule.
(xiii) GOVERNING DOCUMENTS. Amend the Chart Charter or the
Chart
Bylaws or the articles of
organization or bylaws (or equivalent documents)
of any Subsidiary of
Chart.
(xiv) ACCOUNTING METHODS. Implement or adopt any change in its
accounting principles,
practices or methods, other than as may be required
by changes in laws or
regulations or GAAP.
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<PAGE>
(xv) CLAIMS. Enter into any settlement or similar agreement
with
respect to any action,
suit, proceeding, order or investigation to which
Chart or any of its
Subsidiaries is or becomes a party after the date of
this Agreement, which
settlement, agreement or action involves payment by
Chart and its
Subsidiaries of an amount that exceeds $5,000 individually or
$25,000 in the
aggregate and/or would impose any material restriction on the
business of Chart.
(xvi) DERIVATIVES CONTRACTS. Enter into any Derivatives
Contract,
except in the ordinary
course of business consistent with past practice.
(xvii)
INDEBTEDNESS. Become responsible for the obligations of any
other Person
(excluding endorsements of checks in the ordinary course of
business) or incur any
indebtedness for borrowed money, other than deposits,
federal funds
purchased, cash management accounts, borrowings from the
Federal Home Loan Bank
of Boston, secured letters of credit, signature
medallion guarantee
activities (within insurance limits) and securities sold
under agreements to
repurchase, in each case in the ordinary course of
business consistent
with past practice.
(xviii) LENDING. Other than in the ordinary course of business
and
consistent with
existing lending policies and practices, make any
commercial, commercial
real estate, or commercial and industrial loan.
(xix) INVESTMENT SECURITIES PORTFOLIO. Other than in the
ordinary
course of business,
restructure or materially change its investment
securities portfolio
or its gap position, through purchases, sales or
otherwise, or the
manner in which the portfolio is classified or reported.
(xx) REAL ESTATE. Make any new or additional equity investment
in
real estate or
commitment to make any such an investment or in any real
estate development
project, other than (i) in connection with foreclosures,
settlements in lieu of
foreclosure or troubled loan or debt restructurings
in the ordinary course
of business consistent with past practice, or (ii) as
required by agreements
or instruments in effect as of the date hereof.
(xxi) LOAN AND INVESTMENT POLICIES. Change in any material
respect
its loan or investment
policies and procedures, except as required by
regulatory
authorities.
(xxii) LEASES. Enter into or renew, amend or terminate, or give
notice of a proposed
renewal, amendment or termination of or make any
commitment with
respect to (i) any lease, license, contract, agreement or
commitment for office
space, operations space or branch space, regardless of
where located or to be
located, to which Chart or any of its Subsidiaries
is, or may be, a party
or by which Chart or any of its Subsidiaries or their
respective properties
is bound, other than in the ordinary course and
consistent with past practices, or
(ii) regardless of whether in the
ordinary course or
consistent with past practices, any such lease, license,
contract, agreement or
commitment involving an aggregate payment by or to
Chart or any of its
Subsidiaries of more than $10,000 or having a term of
one year or more from
the date of execution, other than as set forth in
Section 4.1(b)(xxii)
of Chart's Disclosure Schedule.
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<PAGE>
(xxiii) DEFAULTS. Commit any act or omission that constitutes a
material breach or default by Chart or any of its Subsidiaries
under any
agreement with any Governmental Authority or under any material
contract
or material license to which any of them is a party or by which any
of
them or their respective properties is bound.
(xxiv) ADVERSE ACTIONS. (1) Take any action that would, or is
reasonably likely to, prevent or impede the Merger from qualifying
as a
reorganization
within the meaning of Section 368(a) of the Code, or (2)
take any action that is intended or is reasonably likely to result
in
(x) any of its representations and warranties set forth in this
Agreement being or becoming untrue in any material respect at any
time
at or prior to the Effective Time, (y) any of the conditions to
the
Merger set forth in Article VIII not being satisfied or (z) a
material
violation of any provision of any Transaction Document, except, in
each
case, as may be required by applicable law or regulation.
(xxv) COMMITMENTS. Enter into any contract with respect to, or
otherwise agree or commit to do, any of the foregoing.
4.2.
PARACHUTE PAYMENTS. Notwithstanding anything to the contrary
contained in this Agreement, in no event
shall Chart or any of its Subsidiaries
take any action or make any payments that
could result, in the reasonable
opinion of Bancorp or its professional
advisors, either individually or in the
aggregate, in the payment of an "excess
parachute payment" within the meaning of
Section 280G of the Code or that could
result, in the reasonable opinion of
Bancorp or its professional advisors,
either individually or in the aggregate,
in payments that would be nondeductible
pursuant to Section 162(m) of the Code.
4.3.
AGREEMENTS OF BANCORP. From the date hereof until the Effective
Time,
Bancorp will operate in the ordinary course
of business consistent with past
practice. In addition, except as expressly
contemplated or permitted by this
Agreement, without the prior written
consent of Chart's Authorized
Representative, Bancorp will not, and will
cause each of its Subsidiaries not to
(1) take any action that would, or is
reasonably likely to, prevent or impede
the Conversion from qualifying as a
reorganization within the meaning of Section
368(a) of the Code that is wholly tax-free
for Bancorp and its subsidiaries and
affiliates, and the Merger from qualifying
as a reorganization within the
meaning of Section 368(a) of the Code, that
is wholly tax-free for Bancorp and
Chart and their respective subsidiaries,
affiliates and shareholders (except for
tax imposed on Chart's shareholders with
respect to the cash consideration
received by them); (2) take any action that
is intended or is reasonably likely
to result in (w) any materially adverse
impact on Bancorp's ability to perform
its covenants and agreements under this
Agreement, (x) any of its
representations and warranties set forth in
this Agreement being or becoming
untrue in any material respect at any time
at or prior to the Effective Time,
(y) any of the conditions to the Merger set
forth in Article VIII not being
satisfied or (z) a material violation of
any provision of any Transaction
Document except, in each case, as may be
required by applicable law or
regulation, (3) take any action that would
materially adversely affect or
materially delay the ability of Bancorp or
any of its Subsidiaries to obtain any
necessary approvals of any Governmental
Authority required for the transactions
contemplated hereby or to perform its
covenants and agreements under any
Transaction Document; (4) acquire or agree
to acquire any business or any Person
(by merger or consolidation, asset
purchase, purchase of equity securities or by
any other manner), or otherwise acquire or
agree to acquire any assets,
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<PAGE>
except (I) in the ordinary course of
business consistent with past practice and
(II) for such acquisition that would not
reasonably be expected to prevent,
impede or materially delay the consummation
of the transactions contemplated by
the Transaction Documents; (5) change in
any material respect its accounting
methods (or underlying assumptions),
principles or practices affecting its
assets, liabilities or business, including
any reserving, renewal or residual
method, practice or policy, in each case,
in effect on the date hereof, except
as required by changes in GAAP or
regulatory accounting principles; (6) agree or
consent to any agreement or modifications
of existing agreements with any
Governmental Authority in respect of the
operations of its business, except (A)
as required by law, (B) to effect the
consummation of the transactions
contemplated by the Transaction Documents,
or (C) as would not reasonably be
expected to have a Material Adverse Effect;
or (7) enter into any contract with
respect to, or otherwise agree or commit to
do, any of the foregoing; provided
that nothing herein shall preclude Bancorp
from amending its Charter and Bylaws
or adopting various compensation and
benefit plans, contracts and policies in
connection with the Conversion and further
provided that the Conversion shall be
considered to be in the ordinary course of
business of Bancorp.
ARTICLE V.
REPRESENTATIONS AND WARRANTIES OF CHART
Except as Previously Disclosed, Chart hereby represents and
warrants to
Bancorp:
5.1.
ORGANIZATION, STANDING AND AUTHORITY. Chart is a co-operative bank
in
stock form duly organized and validly
existing under the laws of The
Commonwealth of Massachusetts. Chart is
duly qualified to do business and is in
corporate good standing in each
jurisdiction where its ownership or leasing of
property or assets or the conduct of its
business requires it to be so
qualified, except when the failure to be so
licensed or in good standing would
not result in a Material Adverse Effect.
Chart has in effect all federal, state,
local and foreign governmental
authorizations necessary for it to own, operate
or lease its properties and assets and to
carry on its business as now
conducted. The deposit accounts of Chart
are insured by the Bank Insurance Fund
of the FDIC and the Share Insurance Fund of
the Co-operative Central Bank of
Massachusetts in the manner and to the
maximum extent provided by applicable law
and except as set forth in Section 5.1 of
Chart's Disclosure Schedule, and Chart
has paid all deposit insurance premiums and
assessments required by applicable
laws and regulations. Chart is not
obligated to make any payments for premiums
and assessments, and it has filed all
reports required by the FDIC. Chart does
not have any deposits insured by the SAIF.
As of the date hereof, no proceedings
for the revocation or termination of
Chart's deposit insurance are pending or,
to the best knowledge of Chart, threatened.
The Chart Charter and the Chart
Bylaws, copies of which have previously
been made available to Bancorp, are
true, complete and correct copies of such
documents in effect as of the date of
this Agreement. Chart is not in violation
of any provision of the Chart Charter
or Chart Bylaws. The minute books of Chart
contain in all material respects true
and accurate records of all meetings held
and corporate actions taken since
January 1, 2001 of Chart's stockholders and
Board (including committees of
Chart's Board) other than minutes that have
not been prepared as of the date
hereof.
5.2. CHART
CAPITAL STOCK. The authorized capital stock of Chart consists
solely of 3,000,000 shares of Series A
Chart Common Stock, of which 1,420,000
shares are outstanding as of the date
hereof, 3,000,000 shares of Series B Chart
Common Stock, of which no shares are
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outstanding and 3,000,000 shares of Chart
Preferred Stock, of which no shares
are outstanding. As of the date hereof, no
shares of Chart Common Stock were
held in treasury by Chart. Except for DPC
Shares, no shares of Chart Common
Stock are held by Chart's Subsidiaries. The
outstanding shares of Chart Common
Stock have been duly authorized and validly
issued and are fully paid and
non-assessable, and except as set forth in
Section 5.2 of Chart's Disclosure
Schedule, free of preemptive rights, with
no personal liability attaching to the
ownership thereof, and none of the
outstanding shares of Chart Common Stock have
been issued in violation of the preemptive
rights of any Person. Section 5.2 of
Chart's Disclosure Schedule sets forth for
each Chart Option, the name of the
grantee, the date of the grant, the status
of the option grant as qualified or
non-qualified under Section 422 of the
Code, the number of shares of Chart
Common Stock subject to each option, the
number of shares of Chart Common Stock
subject to options that are currently
exercisable and the exercise price per
share. Except as set forth in the preceding
sentence, there are no shares of
Chart Stock reserved for issuance, Chart
does not have any Equity Interests
issued or outstanding with respect to Chart
Stock, and Chart does not have any
commitment to authorize, issue or sell any
Chart Stock or Equity Interests.
There are no outstanding contractual
obligations of Chart to repurchase, redeem
or otherwise acquire any shares of capital
stock of, or other Equity Interests
in, Chart or to provide funds to, or make
any investment (in the form of a loan,
capital contribution or otherwise) in, any
Subsidiary of Chart. Except as set
forth in Section 5.2 of Chart's Disclosure
Schedule, there are no shares of
Chart Common Stock outstanding that are
subject to vesting over time or upon the
satisfaction of any condition precedent, or
that are otherwise subject to any
right or obligation of repurchase or
redemption on the part of Chart.
5.3.
SUBSIDIARIES.
(a) (1) Chart has Previously Disclosed a list of all of its
Subsidiaries together with the jurisdiction
of organization of each such
Subsidiary and the percentage and type of
equity security owned or controlled by
Chart, (2) Chart owns, directly or
indirectly, all the issued and outstanding
equity securities of each of its
Subsidiaries, all of which are duly authorized,
validly issued, fully paid, nonassessable
and free of preemptive rights, with no
personal liability attaching to the
ownership thereof, (3) no equity securities
of any of its Subsidiaries are or may
become required to be issued (other than
to Chart) by reason of any Equity Interest
or otherwise, (4) there are no
contracts, commitments, understandings or
arrangements by which any of its
Subsidiaries is or may be bound to sell or
otherwise transfer any of its equity
securities (other than to Chart or any of
its wholly-owned Subsidiaries), (5)
there are no contracts, commitments,
understandings, or arrangements relating to
Chart's rights to vote or to dispose of
such securities, (6) all the equity
securities of Chart's Subsidiaries held by
Chart or its Subsidiaries are fully
paid and nonassessable and are owned by
Chart or its Subsidiaries free and clear
of any Liens and (7) there are no
outstanding contractual obligations of any
Subsidiary of Chart to repurchase, redeem
or otherwise acquire any shares of
capital stock of, or other equity interests
in, Chart or any such Subsidiary or
to provide funds to, or make any investment
(in the form of a loan, capital
contribution or otherwise) in, any such
Subsidiary of Chart.
(b) Except for securities and other interests held in a
fiduciary
capacity and beneficially owned by third
parties or taken in consideration of
debts previously contracted and except as
set forth in Section 5.3(b) of Chart's
Disclosure Schedule, Chart does not own
beneficially, directly or indirectly,
any equity securities or similar interests
of any Person or any interest in a
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partnership or Joint Venture of any kind
other than its Subsidiaries and stock
in the Federal Home Loan Bank of
Boston.
(c) Each of Chart's Subsidiaries has been duly organized and is
validly
existing in good standing under the laws of
the jurisdiction of its organization
and is duly qualified to do business and in
good standing in the jurisdictions
where its ownership or leasing of property
or the conduct of its business
requires it to be so qualified, except when
the failure to be so licensed or in
good standing would not result in a
Material Adverse Effect.
(d) The Articles of Organization and Bylaws or equivalent
organizational documents of each of Chart's
Subsidiaries, copies of which have
previously been made available to Bancorp,
are true, correct and complete copies
of such documents in effect as of the date
of this Agreement. Neither Chart nor
any of its Subsidiaries is in violation of
any provision of its Articles of
Organization, Bylaws or equivalent
organizational documents. The minute books of
each of Chart's Subsidiaries contain in all
material respects true and accurate
records of all meetings held and corporate
actions taken since January 1, 2001
of its stockholders and board of directors
(including committees of its board of
directors) other than minutes that have not
been prepared as of the date hereof.
5.4.
CORPORATE POWER. Each of Chart and its Subsidiaries has the
requisite
corporate power and authority to carry on
its business as it is now being
conducted and to own, lease or operate all
its properties and assets; and Chart
has the requisite corporate power and
authority to execute, deliver and perform
its obligations under the Transaction
Documents to which it is or will be a
party and to consummate the transactions
contemplated hereby and thereby,
subject to receipt of all necessary
approvals of Governmental Authorities and
the approval of this Agreement by the
holders of not less than two-thirds of the
outstanding shares of Chart Common
Stock.
5.5.
CORPORATE AUTHORITY. Subject to the approval of this Agreement by
the
holders of not less than two-thirds of the
outstanding shares of Chart Common
Stock, this Agreement and the transactions
contemplated hereby have been
authorized by all necessary corporate
action of Chart and Chart Board on or
prior to the date hereof. The execution and
delivery of this Agreement and the
other Transaction Documents, and the
consummation of the transactions
contemplated hereby and thereby have been
declared advisable by, and have been
duly and validly approved by the vote of,
the Chart Board. The Chart Board (i)
has directed that this Agreement and the
transactions contemplated hereby,
including the Merger, be submitted to the
stockholders of Chart for approval at
a meeting of such stockholders and (ii) has
recommended that the stockholders of
Chart approve this Agreement and the
transactions contemplated hereby. Chart has
duly executed and delivered this Agreement
and, assuming due authorization,
execution and delivery by Bancorp and
Bancorp Bank, each of this Agreement and
the other Transaction Documents to which
Chart is (or will be) a party is (or
will be) a valid and legally binding
obligation of Chart, enforceable in
accordance with its terms (except as
enforceability may be limited by applicable
bankruptcy, insolvency, reorganization,
moratorium, fraudulent transfer and
similar laws of general applicability
relating to or affecting creditors' rights
or by general equity principles).
5.6. REGULATORY APPROVALS;
NO DEFAULTS.
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<PAGE>
(a) Except as set forth in Section 5.6 of Chart's Disclosure
Schedule,
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 Chart or any of its
Subsidiaries in connection with the execution,
delivery or performance by Chart of this
Agreement and the other Transaction
Documents to which Chart or such Chart
Subsidiary is (or will be) a party, as
applicable, or to consummate the
Transactions and the other transactions
contemplated hereby and thereby, except for
(A) filings of applications or
notices with, and approvals or waivers by,
the Federal Reserve Board, FDIC, the
Massachusetts Bank Commissioner, the
Co-operative Central Bank and the MHPF, as
required, (B) filings with the SEC and
state securities authorities in
connection with the issuance of Bancorp
Common Stock in the Merger and the
solicitation of proxies from Chart's
shareholders for approval of the Merger,
(C) the filing of Articles of Merger with
the Secretary of State of the
Commonwealth of Massachusetts, (D) the
approval of this Agreement by the holders
of not less than two-thirds of the
outstanding shares of Chart Common Stock and
(E) such corporate approvals and such
consents or approvals of, or waivers by,
or filings or registrations with, certain
of the foregoing federal and state
banking agencies in connection with the
Merger. As of the date hereof, Chart is
not aware of any reason why the approvals
set forth above or referred to in
Section 8.1(c) will not be received in a
timely manner and without the
imposition of a condition, restriction or
requirement of the type described in
Section 8.1(c) or that the requisite
approval of Chart's stockholders will not
be obtained.
(b) Subject to receipt of the approvals referred to in Section
5.6(a),
and the expiration of related waiting
periods, the execution, delivery and
performance of this Agreement and the other
Transaction Documents to which Chart
is (or will be) a party by Chart, and the
consummation of the Transactions and
the other transactions contemplated hereby
and thereby do not and will not (A)
constitute a breach or violation of, or a
default under (or, with notice or
lapse of time, or both, would constitute a
default under), or give rise to any
Lien, any acceleration of remedies or
performance or any right of termination
under, any law, rule or regulation or any
judgment, decree, order, governmental
permit or license, or agreement, indenture,
note, bond, mortgage, deed of trust,
lease or instrument of Chart or any of its
Subsidiaries or to which Chart or any
of its Subsidiaries or any of their
respective properties or assets is subject,
affected or bound (whether as issuer,
guarantor, obligor or otherwise), (B)
constitute a breach or violation of, or a
default under, the articles of
organization or bylaws (or similar
governing documents) of Chart or any of its
Subsidiaries or (C) require any consent or
approval under any such law, rule,
regulation, judgment, decree, order,
governmental permit or license, agreement,
indenture, note, bond, mortgage, deed of
trust, lease or instrument.
5.7. CHART
FINANCIAL STATEMENTS.
(a) Chart has previously furnished to Bancorp true, correct and
complete copies of Chart's audited
consolidated balance sheets as of December
31, 2001, 2002, and 2003, and the related
consolidated statements of income,
changes in stockholders equity and
statements of cash flows for the years then
ended, together with related notes of such
financial statements (all the
foregoing financial statements are referred
to collectively as the "CHART
AUDITED FINANCIAL STATEMENTS"). The Chart
Audited Financial Statements are
prepared in accordance with GAAP applied on
a consistent basis throughout the
periods indicated and present fairly the
financial condition and results of
operations of Chart as of their respective
dates and for the periods indicated
thereon.
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<PAGE>
(b) Chart has provided to Bancorp true and correct copies of
Chart's
unaudited consolidated balance sheets as of
June 30, 2004 and the related
unaudited consolidated statement of income
for the six months ended June 30,
2003 and 2004 (the foregoing financial
statements are referred to collectively
as the "CHART INTERIM FINANCIAL
STATEMENTS"). The Chart Interim Financial
Statements present fairly the financial
condition and results of operations of
Chart for the periods indicated thereon and
are prepared in accordance with GAAP
(except for the omission of notes to the
Chart Interim Financial Statements and
year-end adjustments to interim results,
which adjustments will not be material)
applied on a consistent basis with all
prior periods and throughout the periods
indicated.
(c) Chart has provided to Bancorp true and complete copies of
all
quarterly Consolidated Reports of Condition
and Income ("CALL REPORTS") as filed
with the FDIC since December 31, 2003
through and including June 30, 2004. Such
Call Reports were prepared in accordance
with the FDIC's instructions and fairly
present the information purported to be
shown therein.
(d) The Chart Audited Financial Statements and the Chart
Interim
Financial Statements are herein referred to
together as the "CHART FINANCIAL
STATEMENTS."
(e) Each of the balance sheets included in any Chart Financial
Statement sent to Chart shareholders or
filed with the FDIC with respect to any
period subsequent to the year ended
December 31, 2003 (including any related
notes and schedules), does or will fairly
present the consolidated financial
position of Chart as of its date, and the
other financial statements included
therein (including any related notes and
schedules) do or will fairly present
the consolidated results of operations or
other information included therein of
Chart for the periods or as of the dates
therein set forth, subject to the notes
thereto, in each case in accordance with
generally accepted accounting
principles and auditing standards, and do
or will reflect all of its assets,
liabilities and accruals and all of its
items of income and expense in
accordance with such principles
consistently applied during the periods
involved.
5.8. CHART
REPORTS. Since January 1, 2001, Chart and its Subsidiaries have
timely filed, and subsequent to the date
hereof will timely file, all reports,
registrations and statements, together with
any amendments required to be made
with respect thereto, that were and are
required to be filed with (i) the FDIC
and (ii) any applicable state securities or
banking authorities (except, in the
case of state securities authorities, no
such representation is made as to
filings that are not material) (all such
reports, registrations and statements,
together with any amendments thereto and
the Chart Financial Statements, are
collectively referred to herein as the
"CHART REPORTS") and have paid all fees
and assessments due and payable in
connection with any of the foregoing. As of
the date filed or to be filed and as
amended prior to the date hereof, Chart
Reports complied and, with respect to
filings made after the date of this
Agreement, will at the date of filing
comply, in all material respects with all
of the statutes, rules and regulations
enforced or promulgated by the regulatory
authority with which they were filed.
Except for normal periodic examinations
conducted by a Bank Regulator in the
regular course of the business of Chart and
its Subsidiaries, since January 1, 2001, no
Bank Regulator has initiated any
proceeding or, to the best knowledge of
Chart, investigation into the business
or operations of Chart or any of its
Subsidiaries. Except as set forth on
Section 5.8 of Chart's Disclosure Schedule,
Chart and its Subsidiaries have
resolved all material violations,
criticisms or
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<PAGE>
exceptions by any Bank Regulator with
respect to any such normal periodic
examination.
5.9.
ABSENCE OF UNDISCLOSED LIABILITIES. Except for those liabilities
that
are appropriately reflected or reserved
against in the balance sheets of the
Chart Reports and for liabilities incurred
in the ordinary course of business
consistent with past practice or in
connection with this Agreement or the
transactions contemplated hereby, since
January 1, 2004, neither Chart nor any
of its Subsidiaries has incurred any
obligation or liability (contingent or
otherwise) that, either alone or when
combined with all similar liabilities, has
had, or could reasonably be expected to
have, a Material Adverse Effect on
Chart.
5.10.
ABSENCE OF CERTAIN CHANGES OR EVENTS. Since December 31, 2003,
except as set forth in Section 5.10 of
Chart's Disclosure Schedule or reflected
in the Chart Reports, there has not been
(a) either individually or in the
aggregate, any Material Adverse Effect and,
to the best knowledge of Chart, no
fact or condition exists that is reasonably
likely to cause such a Material
Adverse Effect in the future (assuming, for
purposes of this Section 5.10 that
"MATERIAL ADVERSE EFFECT" is subject to the
same exclusions contained in Section
8.3(g)((1)-(5)), (b) any material damage,
destruction or loss with respect to
any property or asset of Chart or any of
its Subsidiaries, (c) any change by
Chart 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 Chart's
independent accountants, (d) any
revaluation by Chart or any of its
Subsidiaries of any asset, including, without
limitation, writing off of notes or
accounts receivable, other than in the
ordinary course of business consistent with
past practice, (e) any entry by
Chart or any of its Subsidiaries into any
contract or commitment (other than
with respect to Loans, as hereinafter
defined) of more than $15,000 or with a
term of more than one (1) year that is not
terminable without penalty, other
than in the ordinary course of business
consistent with past practice, (f) any
declaration, setting aside or payment of
any dividend or distribution in respect
of any capital stock of Chart or any of its
Subsidiaries or any redemption,
purchase or other acquisition of any of
such securities, (g) 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 or consultants to
Chart or any of its Subsidiaries, or any
grant of severance or termination pay,
or any contract or arrangement entered into
to make or grant any severance or
termination pay, any payment of any bonus,
or the taking of any other material
action not in the ordinary course of
business with respect to the compensation
or employment of directors, officers or
employees of or consultants to Chart or
any of its Subsidiaries, (h) any strike,
work stoppage, slowdown or other labor
disturbance, (i) any material election made
by Chart or any of its Subsidiaries
for federal or state income tax purposes,
(j) any change in the credit policies
or procedures of Chart or any of its
Subsidiaries, the effect of which was or is
to make any such policy or procedure
materially less restrictive in any material
respect, (k) any material liability or
obligation of any nature (whether
accrued, absolute, contingent or otherwise
and whether due or to become due),
including without limiting the generality
of the foregoing, liabilities as
guarantor under any guarantees or
liabilities for taxes, other than in the
ordinary course of business consistent with
past practice, (l) any forgiveness
or cancellation of any indebtedness or
contractual obligation other than in the
ordinary course of business consistent with
past practice, (m) any mortgage,
pledge, lien or lease of any assets,
tangible or intangible, of
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<PAGE>
Chart or any of its Subsidiaries with a
value in excess of $25,000 in the
aggregate, except with respect to (i) funds
borrowed by Chart or any of its
Subsidiaries from the Federal Home Loan
Bank, (ii) as required in connection
with banking services for governmental
agencies (including without limitation
municipal deposits) or (iii) as required in
connection with borrowing or other
activities involving the Federal Reserve
Bank of Boston, in each case in the
ordinary course of business and in amounts
and with terms consistent with past
practice, (n) any acquisition or
disposition of any assets or properties having
a value in excess of $50,000, or any
contract for any such acquisition or
disposition entered into other than loans
and investment securities, (o) any
lease of real or personal property entered
into, other than in connection with
foreclosed property or in the ordinary
course of business consistent with past
practice.
5.11.
LITIGATION. There is no claim, suit, action, proceeding or
investigation of any nature pending or, to
the best knowledge of Chart,
threatened, against Chart or any Subsidiary
of Chart or challenging the validity
or propriety of the transactions
contemplated by this Agreement, nor is there
any judgment, decree, injunction, rule,
award or order of any legal or
administrative body or arbitrator
outstanding against Chart or any Subsidiary of
Chart having, or that insofar as reasonably
can be foreseen, in the future could
have, any such effect or restricting, or
that could restrict, its ability to
conduct business in any material respect in
any area. Chart is not aware of any
facts that could reasonably give rise to
any such claim, suit, action,
investigation or other proceeding.
5.12.
REGULATORY MATTERS.
(a) Neither Chart nor any of its Subsidiaries nor any of any of
their
respective properties is a party to or is
subject to any order, decree,
agreement, memorandum of understanding or
similar arrangement with, or a
commitment letter or similar submission to,
order to cease and desist with, or
extraordinary supervisory letter from, any
federal or state governmental agency
or authority charged with the supervision
or regulation of financial
institutions or issuers of securities or
engaged in the insurance of deposits or
the supervision or regulation of it
(collectively, the "CHART REGULATORY
AUTHORITIES"), or is subject to any order
or directive specifically naming or
referring to Chart or any of its
Subsidiaries by, has been required to adopt any
board resolution by, any Chart Regulatory
Authority that is currently in effect,
and neither Chart nor any of its
Subsidiaries has received written notification
from any such Chart Regulatory Authority
that any such Person may be requested
to enter into, or otherwise be subject to,
any such commitment letter, written
agreement, memorandum of understanding,
cease and desist order or any other
similar order or directive. Except as set
forth in Section 5.12(a) of Chart's
Disclosure Schedule, neither Chart nor any
of its Subsidiaries is a party to any
agreement or arrangement entered into in
connection with the consummation of a
federally assisted acquisition of a
depository institution pursuant to which
Chart or any of its Subsidiaries is
entitled to receive financial assistance or
indemnification from any Governmental
Authority. Chart and its Subsidiaries have
paid all assessments made or imposed by any
Chart Regulatory Authority.
(b) Neither Chart nor any its Subsidiaries has been advised by, or
has
any knowledge of facts that would reas
