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Search Agreement and Plan of Merger by:
Exhibit 99.2
AGREEMENT AND PLAN OF REORGANIZATION
BY AND BETWEEN
PROVIDENT BANCORP, MHC,
PROVIDENT BANCORP, INC. (A FEDERAL CORPORATION),
PROVIDENT BANCORP, INC. (A DELAWARE CORPORATION),
PROVIDENT BANK
AND
E.N.B. HOLDING COMPANY, INC. AND
ELLENVILLE NATIONAL BANK
JULY 1, 2003
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TABLE OF CONTENTS
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ARTICLE I CERTAIN DEFINITIONS ............................................................... 1
1.1. Certain Definitions ....................................................... 1
ARTICLE II THE MERGER ....................................................................... 8
2.1. Merger .................................................................... 8
2.2. Effective Time ............................................................ 9
2.3. Certificate of Incorporation and Bylaws ................................... 9
2.4. Directors and Officers of Surviving Corporation ........................... 9
2.5. Additional Director of New Provident Bancorp and Provident Bank ........... 9
2.6. Effects of the Merger ..................................................... 10
2.7. Tax Consequences .......................................................... 10
2.8. Possible Alternative Structures ........................................... 10
2.9. The Conversion ............................................................ 10
ARTICLE III CONVERSION OF SHARES ............................................................ 11
3.1. Conversion of ENBHC Common Stock; Merger Consideration .................... 11
3.2. Election Procedures ....................................................... 13
3.3. Procedures for Exchange of ENBHC Common Stock ............................. 16
3.4. Reservation of Shares ..................................................... 18
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF ENBHC .......................................... 18
4.1. Organization .............................................................. 19
4.2. Capitalization ............................................................ 19
4.3. Authority; No Violation ................................................... 20
4.4. Consents .................................................................. 21
4.5. Financial Statements ...................................................... 21
4.6. Taxes ..................................................................... 22
4.7. No Material Adverse Effect ................................................ 22
4.8. Material Contracts; Leases; Defaults ...................................... 22
4.9. Ownership of Property; Insurance Coverage ................................. 24
4.10. Legal Proceedings ......................................................... 25
4.11. Compliance With Applicable Law ............................................ 25
4.12. Employee Benefit Plans .................................................... 26
4.13. Brokers, Finders and Financial Advisors ................................... 29
4.14. Environmental Matters ..................................................... 29
4.15. Loan Portfolio ............................................................ 30
4.16. Related Party Transactions ................................................ 32
4.17. Schedule of Termination Benefits .......................................... 32
4.18. Deposits .................................................................. 32
4.19. Antitakeover Provisions Inapplicable ...................................... 32
4.20. Registration Obligations .................................................. 33
4.21. Risk Management Instruments ............................................... 33
4.22. Fairness Opinion .......................................................... 33
4.23. Trust Accounts ............................................................ 33
ARTICLE V REPRESENTATIONS AND WARRANTIES OF PROVIDENT BANCORP GROUP ......................... 33
5.1. Organization .............................................................. 34
5.2. Capitalization ............................................................ 34
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5.3. Authority; No Violation ................................................... 35
5.4. Consents .................................................................. 36
5.5. Financial Statements ...................................................... 36
5.6. Taxes ..................................................................... 37
5.7. No Material Adverse Effect ................................................ 38
5.8. Ownership of Property; Insurance Coverage ................................. 38
5.9. Legal Proceedings ......................................................... 38
5.10. Compliance With Applicable Law ............................................ 38
5.11. Employee Benefit Plans .................................................... 39
5.12. Environmental Matters ..................................................... 41
5.13. Loan Portfolio ............................................................ 42
5.14. Securities Documents ...................................................... 43
5.15. Deposits .................................................................. 43
5.16. Antitakeover Provisions Inapplicable ...................................... 43
5.17. Risk Management Instruments ............................................... 43
5.18. Brokers, Finders and Financial Advisors ................................... 44
ARTICLE VI COVENANTS OF ENBHC ............................................................... 44
6.1. Conduct of Business ....................................................... 44
6.2. Current Information ....................................................... 48
6.3. Access to Properties and Records .......................................... 49
6.4. Financial and Other Statements ............................................ 49
6.5. Maintenance of Insurance .................................................. 50
6.6. Disclosure Supplements .................................................... 50
6.7. Consents and Approvals of Third Parties ................................... 50
6.8. All Reasonable Efforts .................................................... 50
6.9. Failure to Fulfill Conditions ............................................. 51
6.10. No Solicitation ........................................................... 51
6.11. Reserves and Merger-Related Costs ......................................... 52
6.12. Board of Directors and Committee Meetings ................................. 52
ARTICLE VII COVENANTS OF PROVIDENT BANCORP .................................................. 53
7.1. Conduct of Business ....................................................... 53
7.2. Current Information ....................................................... 53
7.3. Financial and Other Statements ............................................ 53
7.4. Disclosure Supplements .................................................... 53
7.5. Consents and Approvals of Third Parties ................................... 54
7.6. All Reasonable Efforts .................................................... 54
7.7. Failure to Fulfill Conditions ............................................. 54
7.8. Employee Benefits ......................................................... 54
7.9. Directors and Officers Indemnification and Insurance ...................... 56
7.10. Stock Listing ............................................................. 57
ARTICLE VIII REGULATORY AND OTHER MATTERS ................................................... 58
8.1. ENBHC and Provident Bancorp Shareholder Meetings .......................... 58
8.2. Proxy Statement-Prospectus ................................................ 58
8.3. The Mutual Company Conversion from Mutual to Stock Form ................... 60
8.4. Regulatory Approvals ...................................................... 62
8.5. Affiliates ................................................................ 62
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ARTICLE IX CLOSING CONDITIONS ............................................................... 62
9.1. Conditions to Each Party's Obligations under this Agreement ............... 62
9.2. Conditions to the Obligations of Provident Bancorp under this Agreement ... 64
9.3. Conditions to the Obligations of ENBHC under this Agreement ............... 65
ARTICLE X THE CLOSING ....................................................................... 66
10.1. Time and Place ............................................................ 66
10.2. Deliveries at the Pre-Closing and the Closing ............................. 67
ARTICLE XI TERMINATION, AMENDMENT AND WAIVER ................................................ 67
11.1. Termination ............................................................... 67
11.2. Effect of Termination ..................................................... 69
11.3. Amendment, Extension and Waiver ........................................... 70
ARTICLE XII MISCELLANEOUS ................................................................... 70
12.1. Confidentiality ........................................................... 70
12.2. Public Announcements ...................................................... 71
12.3. Survival .................................................................. 71
12.4. Notices ................................................................... 71
12.5. Parties in Interest ....................................................... 72
12.6. Complete Agreement ........................................................ 72
12.7. Counterparts .............................................................. 73
12.8. Severability .............................................................. 73
12.9. Governing Law ............................................................. 73
12.10. Interpretation ............................................................ 73
12.11. Specific Performance ...................................................... 73
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Exhibit A Form of Voting Agreement
Exhibit B Affiliates Agreement
Exhibit C Matters to be Covered in Opinion of Counsel to be Delivered to New
Provident Bancorp
Exhibit D Matters to be Covered in Opinion of Counsel to be Delivered to ENBHC
(iii)
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AGREEMENT AND PLAN OF REORGANIZATION
This AGREEMENT AND PLAN OF REORGANIZATION (this "Agreement"), is dated as
of July 1, 2003, by and between PROVIDENT BANCORP, MHC, a mutual holding company
(the "Mutual Company"), its majority-owned subsidiary, PROVIDENT BANCORP, INC.,
a federal corporation ("Provident Bancorp"), PROVIDENT BANK, a stock savings
association ("Provident Bank"), PROVIDENT BANCORP, INC., a Delaware corporation
("New Provident Bancorp"), E.N.B. HOLDING COMPANY, INC., a New York corporation
("ENBHC"), and its wholly-owned subsidiary, ELLENVILLE NATIONAL BANK, a national
bank ("ENB").
WHEREAS, the Board of Directors of each of the parties (i) has determined
that this Agreement and the business combination and related transactions
contemplated hereby are in the best interests of the respective parties and (ii)
has determined that this Agreement and the transactions contemplated hereby are
consistent with and in furtherance of their respective business strategies, and
(iii) has approved this Agreement at meetings of each of such Board of
Directors;
WHEREAS, in connection with the transactions described in this Agreement,
it is intended that the Mutual Company will convert from the mutual form of
organization to the capital stock form of organization, and that in connection
with such Conversion New Provident Bancorp will conduct a subscription offering
of its common stock, and if necessary a community and/or syndicated community
offering, and an exchange offering to the existing public shareholders of
Provident Bancorp; and
WHEREAS, the parties desire to make certain representations, warranties
and agreements in connection with the business transactions described in this
Agreement and to prescribe certain conditions thereto.
NOW, THEREFORE, in consideration of the mutual covenants, representations,
warranties and agreements herein contained, and of other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
ARTICLE I
CERTAIN DEFINITIONS
1.1. Certain Definitions.
As used in this Agreement, the following terms have the following meanings
(unless the context otherwise requires, both here and throughout this Agreement,
references to Articles and Sections refer to Articles and Sections of this
Agreement).
"Affiliate" means, with respect to any Person, any Person who directly, or
indirectly, through one or more intermediaries, controls, or is controlled by,
or is under common control with, such Person and, without limiting the
generality of the foregoing, includes any executive officer or director of such
Person and any Affiliate of such executive officer or director.
"Agreement" means this agreement, and any amendment or supplement hereto.
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"Applications" means the applications for regulatory approval that are
required by the transactions contemplated hereby.
"BHCA" shall mean the Bank Holding Company Act of 1956, as amended.
"Bank Merger" shall mean the merger of ENB with and into Provident Bank,
with Provident Bank as the surviving institution, which merger shall occur
following the Merger.
"Bank Regulator" shall mean any Federal or state banking regulator,
including but not limited to the FDIC, the OTS, the OCC, and the FRB, which
regulates Provident Bank or ENB, or any of their respective holding companies or
subsidiaries, as the case may be.
"BIF" shall mean the Bank Insurance Fund as administered by the FDIC.
"Certificate" shall mean certificates evidencing shares of ENBHC Common
Stock.
"COBRA" shall mean the Consolidated Omnibus Budget Reconciliation Act of
1985, as amended.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Compensation and Benefit Plans" shall have the meaning set forth in
Section 4.12.1.
"Confidentiality Agreements" shall mean the confidentiality agreements
referred to in Section 12.1 of this Agreement.
"Conversion" shall mean the conversion from mutual to stock form of the
Mutual Company, pursuant to the Plan of Conversion adopted by the Mutual
Company.
"Conversion Offering" shall mean the offering, in connection with the
Conversion, of shares of New Provident Bancorp Common Stock in a subscription
offering and, if necessary, a community offering and/or a syndicated community
offering.
"Conversion Price Per Share" shall have the meaning set forth in Section
2.9.
"Conversion Prospectus" shall mean a prospectus issued by New Provident
Bancorp in connection with the Offering, that meets all of the requirements of
the Securities Act, applicable state securities laws and banking laws and
regulations. The Conversion Prospectus may be combined with (i) the Proxy
Statement-Prospectus delivered to shareholders of ENBHC in connection with the
solicitation of their approval of this Agreement and the transactions
contemplated hereby and the offering of the New Provident Bancorp Common Stock
to them as Merger Consideration, and (ii) the proxy statement delivered to
Provident Bancorp shareholders in connection with the solicitation of their
approval of the Conversion and the Plan of Conversion.
"Conversion Registration Statement" shall mean the registration statement,
together with all amendments, filed with the SEC under the Securities Act for
the purpose of registering shares of New Provident Bancorp Common Stock to be
offered and issued in connection with the
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Offering. The Merger Registration Statement and the Conversion Registration
Statement may be separate registration statements or may be combined in one
registration statement that shall register shares of New Provident Bancorp
Common Stock to be offered and issued in connection with the Offering and to be
offered to holders of ENBHC Common Stock in connection with the Merger.
"DGCL" shall mean the Delaware General Corporation Law.
"Depositors" shall mean former or current depositors of Provident Bank
that under the Plan of Conversion are given, as indicated by the context, the
opportunity to purchase New Provident Bancorp Common Stock in the Conversion or
the opportunity to vote on the Plan of Conversion.
"Dissenting Shares" shall have the meaning set forth in Section 3.1.4.
"Dissenting Shareholder" shall have the meaning set forth in Section
3.1.4.
"Effective Time" shall mean the date and time specified pursuant to
Section 2.2 hereof as the effective time of the Merger.
"ENB" shall mean Ellenville National Bank, a national bank, with its
principal offices located at 70 Canal Street, P.O. Box 669, Ellenville, New
York, 12428, which is a wholly-owned subsidiary of ENBHC.
"ENBHC" shall mean E.N.B. Holding Company, Inc., a New York corporation,
with its principal offices located at 70 Canal Street, P.O. Box 699, Ellenville,
New York 12428.
"ENBHC Common Stock" shall mean the common stock, par value $20.00 per
share, of ENBHC.
"ENBHC DISCLOSURE SCHEDULE" shall mean a written disclosure schedule
delivered by ENBHC to Provident Bancorp specifically referring to the
appropriate section of this Agreement and describing in reasonable detail the
matters described therein.
"ENBHC Employee Plan(s)" shall mean all stock option, employee stock
purchase, stock bonus and any other stock-based plans, qualified pension or
profit-sharing plans, any deferred compensation, non-qualified plan or
arrangement, supplemental retirement, consultant, bonus or group insurance
contract or any other incentive, health and welfare or employee benefit plan or
agreement maintained for the benefit of any of the employees or former employees
or directors of ENBHC or any ENBHC Subsidiary, whether written or oral.
"ENBHC Financial Statements" shall mean (i) the audited consolidated
statements of financial condition (including related notes and schedules, if
any) of ENBHC as of December 31, 2002 and 2001 and the consolidated statements
of income, changes in stockholders' equity and cash flows (including related
notes and schedules, if any) of ENBHC for each of the three years ended December
31, 2002, 2001 and 2000, and (ii) the unaudited interim consolidated financial
statements of ENBHC as of the end of each calendar quarter following December
31, 2002 and for the periods then ended.
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"ENBHC Regulatory Reports" means the Call Reports of ENB and accompanying
schedules, as filed with the OCC, for each calendar quarter beginning with the
quarter ended March 31, 2001, through the Closing Date, and all Reports filed
with the FRB by ENBHC from December 31, 2001 through the Closing Date.
"ENBHC Shareholders Meeting" means the meeting of shareholders of ENBHC to
be held for the purpose of considering and approving this Agreement and the
Merger.
"ENBHC Subsidiary" means any corporation, 50% or more of the capital stock
of which is owned, either directly or indirectly, by ENBHC or ENB, except any
corporation the stock of which is held in the ordinary course of the lending
activities of ENB.
"Environmental Laws" means any Federal, state or local law, statute,
ordinance, rule, regulation, code, license, permit, authorization, approval,
consent, order, judgment, decree, injunction or agreement with any governmental
entity relating to (1) the protection, preservation or restoration of the
environment (including, without limitation, air, water vapor, surface water,
groundwater, drinking water supply, surface soil, subsurface soil, plant and
animal life or any other natural resource), and/or (2) the use, storage,
recycling, treatment, generation, transportation, processing, handling,
labeling, production, release or disposal of Materials of Environmental Concern.
The term Environmental Law includes without limitation (a) the Comprehensive
Environmental Response, Compensation and Liability Act, as amended, 42 U.S.C.
ss.9601, et seq; the Resource Conservation and Recovery Act, as amended, 42
U.S.C. ss.6901, et seq; the Clean Air Act, as amended, 42 U.S.C. ss.7401, et
seq; the Federal Water Pollution Control Act, as amended, 33 U.S.C. ss.1251, et
seq; the Toxic Substances Control Act, as amended, 15 U.S.C. ss.9601, et seq;
the Emergency Planning and Community Right to Know Act, 42 U.S.C. ss.1101, et
seq; the Safe Drinking Water Act, 42 U.S.C. ss.300f, et seq; and all comparable
state and local laws, and (b) any common law (including without limitation
common law that may impose strict liability) that may impose liability or
obligations for injuries or damages due to the presence of or exposure to any
Materials of Environmental Concern.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.
"Exchange Agent" shall mean a bank or trust company or other agent
designated by Provident Bancorp, and reasonably acceptable to ENBHC, which shall
act as agent for New Provident Bancorp in connection with the exchange
procedures for converting Certificates into the Merger Consideration.
"Exchange Fund" shall have the meaning set forth in Section 3.3.1.
"Exchange Offering" shall mean the offer and issuance of New Provident
Bancorp Common Stock, in connection with the Conversion, to the existing public
shareholders of Provident Bancorp.
"FDIA" shall mean the Federal Deposit Insurance Act, as amended.
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"FDIC" shall mean the Federal Deposit Insurance Corporation or any
successor thereto.
"FHLB" shall mean the Federal Home Loan Bank of New York.
"FRB" shall mean the Board of Governors of the Federal Reserve System or
any successor thereto.
"GAAP" shall mean Generally Accepted Accounting Principles, consistently
applied and as in effect from time to time in the United States of America.
"Governmental Entity" shall mean any Federal or state court,
administrative agency or commission or other governmental authority or
instrumentality.
"HOLA" shall mean the Home Owners' Loan Act, as amended.
"Independent Valuation" shall mean the appraised pro forma market value of
the New Provident Bancorp Common Stock issued in the Conversion, and any
updates, as determined by an independent valuation.
"IRS" shall mean the United States Internal Revenue Service.
"Knowledge" as used with respect to a Person (including references to such
Person being aware of a particular matter) means those facts that are known, or
should have been known, by the executive officers and directors of such Person,
and includes any facts, matters or circumstances set forth in any written notice
from any Bank Regulator or any other material written notice received by that
Person.
"Material Adverse Effect" shall mean, with respect to Provident Bancorp or
ENBHC, respectively, any effect that (i) is material and adverse to the
financial condition, results of operations or business of Provident Bancorp and
its Subsidiaries taken as a whole, or ENBHC and its Subsidiaries taken as a
whole, respectively, or (ii) would materially impair the ability of either
ENBHC, on the one hand, or Provident Bancorp, on the other hand, to perform its
obligations under this Agreement or otherwise materially threaten or materially
impede the consummation of the transactions contemplated by this Agreement;
provided that "Material Adverse Effect" shall not be deemed to include the
impact of (a) changes in laws and regulations affecting banks or thrift
institutions generally, (b) changes in GAAP or regulatory accounting principles
generally applicable to financial institutions and their holding companies, (c)
actions and omissions of a party hereto (or any of its Subsidiaries) taken with
the prior written consent of the other party, (d) the direct effects of
compliance with this Agreement on the operating performance of the parties
including the expenses incurred by the parties hereto in consummating the
transactions contemplated by this Agreement and (e) any change in the value of
the securities portfolio of Provident Bancorp or ENBHC, whether held as
available for sale or held to maturity, resulting from a change in interest
rates generally.
"Materials of Environmental Concern" means pollutants, contaminants,
wastes, toxic substances, petroleum and petroleum products, and any other
materials regulated under Environmental Laws.
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"Merger" shall mean the merger of ENBHC with and into New Provident
Bancorp (or a subsidiary thereof) pursuant to the terms hereof.
"Merger Consideration" shall mean the cash or New Provident Bancorp Common
Stock, or combination thereof, in an aggregate per share amount to be paid by
New Provident Bancorp for each share of ENBHC Common Stock equal to $4,830.00,
as set forth in Section 3.1.
"Merger Registration Statement" shall mean the registration statement,
together with all amendments, filed with the SEC under the Securities Act for
the purpose of registering shares of New Provident Bancorp Common Stock to be
offered to holders of ENBHC Common Stock in connection with the Merger. The
Merger Registration Statement and the Conversion Registration Statement may be
separate registration statements or may be combined in one registration
statement that shall register shares of New Provident Bancorp Common Stock to be
offered and sold in connection with the Offering and to be offered to holders of
ENBHC Common Stock in connection with the Merger.
"Mutual Company" shall mean Provident Bancorp, MHC, a federally chartered
mutual holding company that owns a majority of the Provident Bancorp Common
Stock.
"NASD" shall mean the National Association of Securities Dealers, Inc.
"New Provident Bancorp" shall mean Provident Bancorp, Inc., a Delaware
corporation with its principal executive offices located at 400 Rella Boulevard,
P.O. Box 600, Montebello, New York 10901, which was organized in connection with
the Conversion and which will be the successor to Provident Bancorp.
"New Provident Bancorp Common Stock" shall mean the common stock, par
value $.01 per share, of New Provident Bancorp that will be issued and sold in
the Offering and the Merger.
"NYBCL" means the New York Business Corporation Law.
"OCC" means the Office of Comptroller of the Currency or any successor
thereto.
"Offering" shall mean the Conversion Offering and the Exchange Offering.
"OTS" shall mean the Office of Thrift Supervision or any successor
thereto.
"PBGC" shall mean the Pension Benefit Guaranty Corporation, or any
successor thereto.
"Pension Plan" shall have the meaning set forth in Section 4.12.2.
"Person" shall mean any individual, corporation, partnership, joint
venture, association, trust or "group" (as that term is defined under the
Exchange Act).
"Plan of Conversion" shall mean the Plan of Conversion and Reorganization
pursuant to which the Mutual Company will convert from the mutual form of
organization to the capital stock form of organization.
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"Pre-Closing" shall have the meaning set forth in Section 10.1 hereof.
"Pre-Closing Date" shall be the date on which the Pre-Closing occurs.
"Provident Bank" shall mean Provident Bank, a Federally chartered stock
savings association, with its principal offices located at 400 Rella Boulevard,
P.O. Box 600, Montebello, New York, which is a wholly owned subsidiary of
Provident Bancorp.
"Provident Bancorp" shall mean Provident Bancorp, Inc., a federal
corporation prior to consummation of the Conversion, with its principal
executive offices located at 400 Rella Boulevard, P.O. Box 600, Montebello, New
York.
"Provident Bancorp Common Stock" shall mean the common stock, par value
$.10 per share, of Provident Bancorp.
"PROVIDENT BANCORP DISCLOSURE SCHEDULE" shall mean a written disclosure
schedule delivered by Provident Bancorp to ENBHC specifically referring to the
appropriate section of this Agreement and describing in reasonable detail the
matters contained therein.
"Provident Bancorp Option Plans" shall mean the Provident Bancorp, Inc.
2000 Stock Option Plan and the Provident Bancorp, Inc. 2000 Recognition and
Retention Plan.
"Provident Bancorp Statements" shall mean the (i) unaudited balance sheet
of the Mutual Company as of September 30, 2002 and the unaudited income
statement of the Mutual Company for the year ended September 30, 2002, and (ii)
the audited consolidated statements of financial condition (including related
notes and schedules) of Provident Bancorp as of September 30, 2002 and 2001 and
the consolidated statements of income, changes in stockholders' equity and cash
flows (including related notes and schedules, if any) of Provident Bancorp for
each of the three years ended September 30, 2002, 2001 and 2000, as set forth in
Provident Bancorp's annual report for the year ended September 30, 2002, and the
unaudited interim consolidated financial statements of Provident Bancorp as of
the end of each quarter following September 30, 2002, and for the periods then
ended, as filed by Provident Bancorp in its Securities Documents.
"Provident Bancorp Subsidiary" means any corporation, 50% or more of the
capital stock of which is owned, either directly or indirectly, by Provident
Bancorp, Provident Bank or any Bank Affiliate, except any corporation the stock
of which is held in the ordinary course of the lending activities of Provident
Bank.
"Proxy Statement-Prospectus" shall mean the proxy statement/prospectus, as
amended or supplemented, to be delivered to shareholders of ENBHC in connection
with the solicitation of their approval of this Agreement and the transactions
contemplated hereby and the offering of the New Provident Bancorp Common Stock
to them as Merger Consideration. The Proxy Statement-Prospectus may be combined
with (i) the Conversion Prospectus delivered to offerees in the Conversion
Offering and Exchange Offering, and (ii) the proxy statement delivered to
Provident Bancorp shareholders in connection with the solicitation of their
approval of the Conversion and the Plan of Conversion.
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"Regulatory Agreement" shall have the meaning set forth in Section 4.11.3.
"Rights" shall mean warrants, options, rights, convertible securities,
stock appreciation rights and other arrangements or commitments which obligate
an entity to issue or dispose of any of its capital stock or other ownership
interests or which provide for compensation based on the equity appreciation of
its capital stock.
"SAIF" shall mean the Savings Association Insurance Fund administered by
the FDIC.
"SEC" shall mean the Securities and Exchange Commission or any successor
thereto.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Securities Documents" shall mean all reports, offering circulars, proxy
statements, registration statements and all similar documents filed, or required
to be filed, pursuant to the Securities Laws.
"Securities Laws" shall mean the Securities Act; the Exchange Act; the
Investment Company Act of 1940, as amended; the Investment Advisers Act of 1940,
as amended; the Trust Indenture Act of 1939, as amended, and the rules and
regulations of the SEC promulgated thereunder.
"Stock Exchange" shall mean the Nasdaq National Market.
"Subsidiary" shall have the meanings set forth in Rule 1-02 of Regulation
S-X of the SEC.
"Surviving Corporation" shall have the meaning set forth in Section 2.1
hereof.
"Termination Date" shall mean July 31, 2004.
Other terms used herein are defined in the preamble and elsewhere in this
Agreement.
ARTICLE II
THE MERGER
2.1. Merger.
As promptly as practicable following the satisfaction or waiver of the
conditions to each party's respective obligations hereunder, and subject to the
terms and conditions of this Agreement, at the Effective Time: (a) ENBHC shall
merge with and into New Provident Bancorp, or a to-be-formed subsidiary of New
Provident Bancorp, with New Provident Bancorp (or the subsidiary) as the
resulting or surviving corporation (the "Surviving Corporation"); and (b) the
separate existence of ENBHC shall cease and all of the rights, privileges,
powers, franchises, properties, assets, liabilities and obligations of ENBHC
shall be vested in and assumed by New Provident Bancorp. As part of the Merger,
each share of ENBHC Common
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Stock will be converted into the right to receive the Merger Consideration
pursuant to the terms of Article III hereof. Immediately after the Merger, ENB
shall merge with and into Provident Bank, with Provident Bank as the resulting
institution.
2.2. Effective Time.
The Merger shall be effected by the filing of a certificate of merger with
the Delaware Office of the Secretary of State, in accordance with the DGCL, and
with the New York Department of State, in accordance with the NYBCL, on the day
of the closing ("Closing Date") provided for in Article X hereof (the
"Closing"). The "Effective Time" means the date and time upon which the
certificate of merger is filed with the Delaware Office of the Secretary of
State, and with the New York Department of State, or as otherwise stated in the
certificates of merger. The Closing of the Merger shall immediately follow the
closing of the Offering.
2.3. Certificate of Incorporation and Bylaws.
The Certificate of Incorporation and Bylaws of New Provident Bancorp shall
be the Certificate of Incorporation and Bylaws of the Surviving Corporation as
in effect immediately prior to the Effective Time, until thereafter amended as
provided therein and by applicable law.
2.4. Directors and Officers of Surviving Corporation.
Except as provided in Section 2.5, the directors of New Provident Bancorp
immediately prior to the Effective Time shall be the initial directors of the
Surviving Corporation, each to hold office in accordance with the Certificate of
Incorporation and Bylaws of the Surviving Corporation. The officers of New
Provident Bancorp immediately prior to the Effective Time shall be the initial
officers of Surviving Corporation, in each case until their respective
successors are duly elected or appointed and qualified.
2.5. Additional Directors of New Provident Bancorp and Provident Bank.
Effective as of the Effective Time, the number of persons constituting the
Board of Directors of each of New Provident Bancorp and Provident Bank shall be
increased by two (2), and two (2) persons designated by Provident Bancorp, who
are directors of ENBHC or ENB, shall be appointed and elected to the Board of
Directors of both New Provident Bancorp and Provident Bank. The two persons
designated by Provident Bancorp shall be selected from a list of five (5)
directors serving on the board of directors of ENBHC or ENB, which list shall be
provided by ENBHC to Provident Bancorp. Any such individual proposed by ENBHC
must meet the eligibility criteria applicable to all directors of New Provident
Bancorp and Provident Bank. The foregoing obligation to appoint persons to the
Board of Directors of New Provident Bancorp and Provident Bank shall not apply
in the event that ENBHC elects to proceed with the Merger on the basis of the
All Cash Consideration in accordance with Section 2.9.2. In addition, at the
Effective Time, Provident Bank will appoint four members of ENB's board of
directors, as mutually agreed, for positions on Provident Bank's existing
regional advisory board of directors. Advisory board members shall receive a
quarterly payment of no less than $800. Pursuant to OTS regulations and policy,
any appointment to the regional advisory board will be for a one-year term,
subject to renewal of terms at Provident Bank's discretion.
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2.6. Effects of the Merger.
At and after the Effective Time, the Merger shall have the effects as set
forth in the DGCL and the NYBCL.
2.7. Tax Consequences.
It is intended that the Merger shall constitute a reorganization within
the meaning of Section 368(a) of the Code, and that this Agreement shall
constitute a "plan of reorganization" as that term is used in Sections 354 and
361 of the Code. From and after the date of this Agreement and until the
Closing, each party hereto shall use its reasonable best efforts to cause the
Merger to qualify, and will not knowingly take any action, cause any action to
be taken, fail to take any action or cause any action to fail to be taken which
action or failure to act could prevent the Merger from qualifying as a
reorganization under Section 368(a) of the Code. Following the Closing, neither
New Provident Bancorp, Provident Bancorp, nor any of their affiliates shall
knowingly take any action, cause any action to be taken, fail to take any action
or cause any action to fail to be taken, which action or failure to act could
cause the Merger to fail to qualify as a reorganization under Section 368(a) of
the Code. New Provident Bancorp and ENBHC each hereby agrees to deliver
certificates substantially in compliance with IRS published advance ruling
guidelines, with customary exceptions and modifications thereto, to enable
counsel to deliver the legal opinion contemplated by Section 9.1.6, which
certificates shall be effective as of the date of such opinion. This Section 2.7
shall not apply in the event circumstances occur resulting in the Merger
Consideration becoming the "All Cash Consideration" as set forth in Section 2.9.
In such a case, it is intended that the Merger shall constitute a taxable sale
of the ENBHC Common Stock held by the holders of such stock to New Provident
Bancorp.
2.8. Possible Alternative Structures.
Notwithstanding anything to the contrary contained in this Agreement,
prior to the Effective Time, Provident Bancorp or New Provident Bancorp shall be
entitled to revise the structure of the Merger described in Section 2.1 hereof,
provided that (i) there are no adverse Federal or state income tax consequences
to ENBHC shareholders as a result of the modification; (ii) the consideration to
be paid to the holders of ENBHC Common Stock under this Agreement is not thereby
changed in kind or value or reduced in amount; and (iii) such modification will
not delay materially or jeopardize receipt of any required regulatory approvals
or other consents and approvals relating to the consummation of the Merger. The
Mutual Company, Provident Bancorp, New Provident Bancorp, Provident Bank, ENBHC
and ENB agree to appropriately amend this Agreement and any related documents in
order to reflect any such revised structure.
2.9. The Conversion
2.9.1. Contemporaneous with the adoption of this Agreement, the Board of
Directors of the Mutual Company is adopting a Plan of Conversion to convert into
the capital stock form of organization. New Provident Bancorp is being organized
to succeed to the rights and obligations of the Mutual Company and Provident
Bancorp and to offer for sale shares of common stock to depositors in the
Conversion, based on the Independent Valuation. The price per share of the
shares of New Provident Bancorp Common Stock to be issued in the Conversion is
referred to as
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the "Conversion Price Per Share." The Conversion Price Per Share is expected to
be $10.00. The shares of New Provident Bancorp Common Stock to be issued in
connection with the Merger may be either shares unsubcribed for in the
Conversion subscription and/or community offering, or if such shares are
unavailable, authorized but unissued shares of New Provident Bancorp Common
Stock, which shares shall be issued immediately following completion of the
Conversion.
2.9.2. If the Conversion is terminated, or if the Conversion is postponed
such that for any reason whatsoever it is not consummated prior to March 31,
2004, then at ENBHC's election, either: (i) this Agreement shall be deemed to
provide, without further action of the parties hereto, that the Merger
Consideration shall be $4,500.00 in cash (the "All Cash Consideration"); in such
case, unless the payment of the All Cash Consideration has been approved by the
ENBHC shareholders, ENBHC shall as promptly as practicable hold another meeting
of its shareholders to approve the All Cash Consideration, and Provident Bancorp
may be required to re-new its request for regulatory approvals in light of the
All Cash Consideration; or (ii) ENBHC may terminate this Agreement and elect to
receive from Provident Bancorp a cash payment in the amount of $3,700,000
("Termination Fee"). ENBHC shall provide written notice to Provident Bancorp,
within fifteen (15) days after Provident Bancorp notifies ENBHC in writing of
the termination or postponement of the Conversion, or by April 15, 2004,
whichever is earlier, of ENBHC's election to either terminate this Agreement and
receive the Termination Fee or proceed with the Agreement on the basis of the
All Cash Consideration. If ENBHC elects to terminate the Agreement and receive
the Termination Fee, the Termination Fee shall be paid by Provident Bancorp
within two business days of receipt by Provident Bancorp of the written notice.
Upon payment of the Termination Fee, none of the parties (including the
directors and officers of each party and all Affiliates) shall have any further
liability to the other parties (including the directors and officers of each
party and all Affiliates) at law or in equity under this Agreement, it being
agreed that the payment of the Termination Fee shall constitute complete
performance of all obligations under this Agreement.
ARTICLE III
CONVERSION OF SHARES
3.1. Conversion of ENBHC Common Stock; Merger Consideration.
At the Effective Time, by virtue of the Merger and without any action on
the part of New Provident Bancorp, ENBHC or the holders of any of the shares of
ENBHC Common Stock, the Merger shall be effected in accordance with the
following terms:
3.1.1. All shares of ENBHC Common Stock held in the treasury of
ENBHC and each share of ENBHC Common Stock owned by Provident Bancorp or any
direct or indirect wholly owned subsidiary of Provident Bancorp or of ENBHC
immediately prior to the Effective Time (other than shares held in a fiduciary
capacity or in connection with debts previously contracted) shall, at the
Effective Time, cease to exist, and the certificates for such shares shall be
canceled as promptly as practicable thereafter, and no payment or distribution
shall be made in consideration therefor.
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3.1.2. Each outstanding share of ENBHC Common Stock that under the
terms of Section 3.2 is to be converted into the right to receive shares of New
Provident Bancorp Common Stock shall, subject to Section 3.3, be converted into
and become the right to receive that number of shares of New Provident Bancorp
Common Stock as shall equal $4,830.00 divided by the Conversion Price Per Share.
For example, if the Conversion Price Per Share is $10.00, then each outstanding
share of ENBHC Common Stock that under the terms of Section 3.2 is to be
converted into the right to receive shares of New Provident Bancorp Common Stock
shall, subject to Section 3.3, be converted into and become the right to receive
four hundred and eighty-three (483) shares of New Provident Bancorp Common
Stock.
In the event that the dollar value of the shares of New Provident Common
Stock sold in the Conversion by New Provident Bancorp (excluding shares issued
in the Exchange Offering, and excluding the shares of New Provident Bancorp
Common Stock issued by New Provident Bancorp to any charitable foundation formed
or caused to be formed by Provident Bank, Provident Bancorp, New Provident
Bancorp or the Mutual Company as part of the Conversion) exceeds $181,315,000,
then each outstanding share of ENBHC Common Stock that under the terms of
Section 3.2 is converted into the right to receive shares of New Provident
Bancorp Common Stock shall, subject to Section 3.3, be converted into and become
the right to receive that number of shares of New Provident Bancorp Common Stock
as shall equal (x) $4,830.00 divided by the Conversion Price Per Share (y)
multiplied by a fraction, the numerator of which equals the dollar value of the
shares of New Provident Common Stock sold in the Conversion by New Provident
Bancorp (excluding shares issued in the Exchange Offering, and excluding the
shares of New Provident Bancorp Common Stock issued by New Provident Bancorp to
any charitable foundation formed or caused to be formed by Provident Bank,
Provident Bancorp, New Provident Bancorp or the Mutual Company as part of the
Conversion) and the denominator of which equals $181,315,000. For example, if
the Conversion Price Per Share is $10.00, and the dollar value of the shares of
New Provident Common Stock sold in the Conversion by New Provident Bancorp
(excluding shares issued in the Exchange Offering, and excluding the shares of
New Provident Bancorp Common Stock issued by New Provident Bancorp to any
charitable foundation formed or caused to be formed by Provident Bank, Provident
Bancorp, New Provident Bancorp or the Mutual Company as part of the Conversion)
equals $190,000,000, then each outstanding share of ENBHC Common Stock that
under the terms of Section 3.2 is to be converted into the right to receive
shares of New Provident Bancorp Common Stock shall, subject to Section 3.3, be
converted into and become the right to receive five hundred and six (506) shares
of New Provident Bancorp Common Stock ($4,830 divided by $10.00, or 483 shares,
multiplied by 1.0479 ($190,000,000 divided by $181,315,000), with the fractional
share interest to be paid in cash by New Provident Bancorp pursuant to Section
3.2.3).
3.1.3. Each outstanding share of ENBHC Common Stock that under the
terms of Section 3.2 is to be converted into the right to receive cash shall be
converted into the right to receive a cash payment of $4,830.00 (the "Cash
Election Price").
3.1.4. Each outstanding share of ENBHC Common Stock the holder of
which has perfected his right to dissent under the NYBCL 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 New
Provident Bancorp Common Stock or cash hereunder, and the holder thereof shall
be entitled only to such rights as are granted by the NYBCL.
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ENBHC shall give New Provident Bancorp prompt notice upon receipt by ENBHC of
any such demands for payment of the fair value of such shares of ENBHC Common
Stock and of withdrawals of such notice and any other instruments provided
pursuant to applicable law (any shareholder duly making such demand being
hereinafter called a "Dissenting Shareholder"), and New Provident Bancorp shall
have the right to participate in all negotiations and proceedings with respect
to any such demands. ENBHC shall not, except with the prior written consent of
New Provident Bancorp, voluntarily make any payment with respect to, or settle
or offer to settle, any such demand for payment, or waive any failure to timely
deliver a written demand for appraisal or the taking of any other action by such
Dissenting Shareholder as may be necessary to perfect appraisal rights under the
NYBCL. Any payments made in respect of Dissenting Shares shall be made by the
Surviving Company.
3.1.5. If any Dissenting Shareholder shall effectively withdraw or
lose (through failure to perfect or otherwise) his right to such payment at or
prior to the Effective Time, such holder's shares of ENBHC Common Stock shall be
converted into a right to receive cash or New Provident Bancorp Common Stock in
accordance with the applicable provisions of this Agreement. If such holder
shall effectively withdraw or lose (through failure to perfect or otherwise) his
right to such payment after the Effective Time, each share of ENBHC Common Stock
of such holder shall be converted on a share by share basis into either the
right to receive the Cash Election Price or New Provident Bancorp Common Stock
as New Provident Bancorp shall determine in its sole discretion.
3.1.6. After the Effective Time, shares of ENBHC Common Stock shall
be no longer outstanding and shall automatically be canceled and shall cease to
exist, and shall thereafter by operation of this section be the right to receive
the Merger Consideration.
3.2. Election Procedures.
Holders of ENBHC Common Stock may elect to receive shares of New Provident
Bancorp Common Stock, the Cash Election Price, or a combination thereof, in
exchange for their shares of ENBHC Common Stock in accordance with the following
procedures.
3.2.1. An election form as New Provident Bancorp and ENBHC shall
mutually agree ("Election Form") will be sent no more than 60 business days and
no less than 15 business days prior to the expected Effective Time (provided
that it need not be sent until the requisite approvals from the Bank Regulators
(as defined in Section 8.4) have been obtained) to each holder of record of
ENBHC Common Stock permitting such holder (or in the case of nominee record
holders, the beneficial owner through proper instructions and documentation) (i)
to elect to receive New Provident Bancorp Common Stock with respect to each
share of such holder's ENBHC Common Stock as provided herein (the "ENBHC Stock
Election Shares"), (ii) to elect to receive cash with respect to each share of
such holder's ENBHC Common Stock as provided herein (the "ENBHC Cash Election
Shares"), or (iii) to elect to receive New Provident Bancorp Common Stock for
part of such holder's ENBHC Common Stock as provided herein and cash for the
remaining part of such holders' ENBHC Common Stock as provided herein. Any
shares of ENBHC Common Stock with respect to which the holder thereof shall not,
as of the Election Deadline, have made such an election by submission to the
Exchange Agent on an effective, properly completed Election Form shall be deemed
converted on a share by share basis
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into either the right to receive the Cash Election Price or New Provident
Bancorp Common Stock as New Provident Bancorp shall determine in its sole
discretion. Any Dissenting Shares shall be deemed to be ENBHC Cash Election
Shares, and with respect to such shares the holders thereof shall in no event
receive consideration comprised of New Provident Bancorp Common Stock.
3.2.2. The term "Election Deadline", as used below, shall mean 5:00
p.m., New York time, on the business day specified in the Election Form, which
Election Deadline shall be no less than two and no more than five business days
prior to the date of the Effective Time, or such other date as ENBHC and New
Provident Bancorp shall mutually agree upon. Any election to receive New
Provident 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. 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 notice is actually received by the Exchange
Agent at or prior to the Election Deadline. The Certificate or Certificates
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 discretion to determine when any election, modification or
revocation is received and whether any such election, modification or revocation
has been properly made. Within five business days after the Election Deadline,
the Exchange Agent shall calculate the allocation among holders of ENBHC Common
Stock of rights to receive New Provident Bancorp Common Stock or the Cash
Election Price in the Merger in accordance with the Election Forms as follows:
(i) If the number of ENBHC Cash Election Shares is greater than
the quotient of (x) $36,773,205 divided by (y) the Cash
Election Price (the "Cash Conversion Shares"), then:
(1) all ENBHC Stock Election Shares will be converted into
the right to receive New Provident Bancorp Common Stock,
and
(2) each ENBHC Cash Election Share will be converted into
the right to receive New Provident Bancorp Common Stock
and cash in the following manner:
(A) a proration factor (the "Cash Proration Factor")
shall be determined by dividing (x) $36,773,205,
by (y) the product of the number of ENBHC Cash
Election Shares multiplied by the Cash Election
Price;
(B) the number of ENBHC Cash Election Shares held by
each holder of shares of ENBHC Common Stock that
will be converted into the right to receive cash
pursuant to the terms of Section 3.1.3 shall be
determined by multiplying the Cash Proration
Factor by the number of ENBHC Cash Election Shares
held by such holder; and
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(C) all ENBHC Cash Election Shares other than those
shares converted into the right to receive cash in
accordance with the preceding subparagraph (B)
shall be converted into the right to receive New
Provident Bancorp Common Stock in accordance with
the terms of Section 3.1.2; or
(ii) If the number of ENBHC Cash Election Shares is less than the
Cash Conversion Shares, then:
(1) all ENBHC Cash Election Shares (subject to the
provisions of Section 3.1.4 with respect to any
Dissenting Shares) will be converted into the right to
receive cash, and
(2) each ENBHC Stock Election Share will be converted into
the right to receive New Provident Bancorp Common Stock
and cash in the following manner:
(A) a proration factor (the "Stock Proration Factor")
shall be determined by dividing the Stock
Conversion Shares (as defined below) by the number
of ENBHC Stock Election Shares. The "Stock
Conversion Shares" shall mean the difference
between (x) the total number of shares of ENBHC
Common Stock outstanding immediately prior to the
Effective Time minus (y) the Cash Conversion
Shares;
(B) the number of ENBHC Stock Election Shares held by
each holder of shares of ENBHC Common Stock that
will be converted into the right to receive shares
of New Provident Bancorp Common Stock pursuant to
the terms of Section 3.1.2 shall be determined by
multiplying the Stock Proration Factor by the
number of ENBHC Stock Election Shares held by such
holder; and
(C) all ENBHC Stock Election Shares other than those
shares converted into the right to receive New
Provident Bancorp Common Stock in accordance with
the preceding subparagraph (B) shall be converted
into the right to receive cash in accordance with
the terms of Section 3.1.3; or
(iii) If the number of ENBHC Stock Election Shares is equal to the
number of Stock Conversion Shares and the number of ENBHC Cash
Election Shares is equal to the number of Cash Conversion
Shares, then subparagraphs (i) and (ii) above shall not apply
and all ENBHC Stock Election Shares will be converted into the
right to receive New Provident Bancorp Common Stock and all
ENBHC Cash Election Shares (subject to
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the provisions of Section 3.1.4) will be converted into the
right to receive cash.
3.2.3. No Fractional Shares. Notwithstanding anything to the
contrary contained herein, no certificates or scrip representing fractional
shares of New Provident Bancorp Common Stock shall be issued upon the surrender
for exchange of Certificates, no dividend or distribution with respect to New
Provident Bancorp Common Stock shall be payable on or with respect to any
fractional share interest, and such fractional share interests shall not entitle
the owner thereof to vote or to any other rights of a shareholder of New
Provident Bancorp. In lieu of the issuance of any such fractional share, New
Provident Bancorp shall pay to each former holder of ENBHC Common Stock who
otherwise would be entitled to receive a fractional share of New Provident
Bancorp Common Stock, an amount in cash determined by multiplying the price for
which the New Provident Bancorp Common Stock is sold in the Offering by the
fraction of a share of New Provident Bancorp Common Stock which such holder
would otherwise be entitled to receive pursuant to Section 3.1.3 hereof. No
interest will be paid on the cash that the holders of such fractional shares
shall be entitled to receive upon such delivery. For purposes of determining any
fractional share interest, all shares of ENBHC Common Stock owned by a ENBHC
shareholder shall be combined so as to calculate the maximum number of whole
shares of New Provident Bancorp Common Stock issuable to such ENBHC shareholder.
3.3. Procedures for Exchange of ENBHC Common Stock.
3.3.1. New Provident Bancorp to Make Merger Consideration Available.
At or prior to the Effective Time, New Provident Bancorp shall deposit, or shall
cause to be deposited, with the Exchange Agent for the benefit of the holders of
ENBHC Common Stock, for exchange in accordance with this Section 3.3,
certificates representing the shares of New Provident Bancorp Common Stock and
an estimated amount of cash sufficient to pay the aggregate Cash Election Price
payable hereunder and any cash that may be payable in lieu of any fractional
shares (such cash and certificates for shares of New Provident Bancorp Common
Stock, together with any dividends or distributions with respect thereto, being
hereinafter referred to as the "Exchange Fund").
3.3.2. Exchange of Certificates. Within five (5) business days after
the Effective Time, New Provident Bancorp shall take all steps necessary to
cause the Exchange Agent to mail to each holder of a Certificate or
Certificates, a form letter of transmittal for return to the Exchange Agent and
instructions for use in effecting the surrender of the Certificates for
certificates representing, as the case may be, the shares of New Provident
Bancorp Common Stock, cash in respect of the Cash Election Price, and cash in
lieu of fractional shares into which the ENBHC Common Stock represented by such
Certificates shall have been converted as a result of the Merger. The letter of
transmittal (which shall be subject to the reasonable approval of ENBHC) shall
specify that delivery shall be effected, and risk of loss and title to the
Certificates shall pass, only upon delivery of the Certificates to the Exchange
Agent. Promptly upon proper surrender of a Certificate for exchange and
cancellation to the Exchange Agent, together with a properly completed letter of
transmittal, duly executed, the holder of such Certificate shall be entitled to
receive in exchange therefore, as applicable, (i) a certificate representing
that number of shares of New Provident Bancorp Common Stock (if any) to which
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such former holder of ENBHC Common Stock shall have become entitled pursuant to
the provisions of Section 3.1.2 hereof, (ii) a check representing that amount of
cash (if any) to which such former holder of ENBHC Common Stock shall have
become entitled in respect of the Cash Election Price pursuant to the provisions
of Section 3.2 hereof and (iii) a check representing the amount of cash (if any)
payable in lieu of fractional shares of New Provident Bancorp Common Stock,
which such former holder has the right to receive in respect of the Certificate
surrendered pursuant to the provisions of this Section 3, and the Certificate so
surrendered shall forthwith be cancelled. No interest will be paid or accrued on
the cash payable in lieu of fractional shares. Certificates surrendered for
exchange by any person who is an "affiliate" of ENBHC for purposes of Rule
145(c) under the Securities Act shall not be exchanged for certificates
representing shares of New Provident Bancorp Common Stock until New Provident
Bancorp or Provident Bancorp has received the written agreement of such person
contemplated by Section 8.5 hereof.
3.3.3. Rights of Certificate Holders after the Effective Time. The
holder of a Certificate that prior to the Merger represented issued and
outstanding ENBHC Common Stock shall have no rights, after the Effective Time,
with respect to such ENBHC Common Stock except to surrender the Certificate in
exchange for the Merger Consideration as provided in this Agreement. No
dividends or other distributions declared after the Effective Time with respect
to New Provident Bancorp Common Stock shall be paid to the holder of any
unsurrendered Certificate until the holder thereof shall surrender such
Certificate in accordance with this Section 3.3. After the surrender of a
Certificate in accordance with this Section 3.3, the record holder thereof shall
be entitled to receive any such dividends or other distributions, without any
interest thereon, which theretofore had become payable with respect to shares of
New Provident Bancorp Common Stock represented by such Certificate.
3.3.4. Surrender by Persons Other than Record Holders. If the Person
surrendering a Certificate and signing the accompanying letter of transmittal is
not the record holder thereof, then it shall be a condition of the payment of
the Merger Consideration that: (i) such Certificate is properly endorsed to such
Person or is accompanied by appropriate stock powers, in either case signed
exactly as the name of the record holder appears on such Certificate, and is
otherwise in proper form for transfer, or is accompanied by appropriate evidence
of the authority of the Person surrendering such Certificate and signing the
letter of transmittal to do so on behalf of the record holder; and (ii) the
person requesting such exchange shall pay to the Exchange Agent in advance any
transfer or other taxes required by reason of the payment to a person other than
the registered holder of the Certificate surrendered, or required for any other
reason, or shall establish to the satisfaction of the Exchange Agent that such
tax has been paid or is not payable.
3.3.5. Closing of Transfer Books. From and after the Effective Time,
there shall be no transfers on the stock transfer books of ENBHC of the ENBHC
Common Stock that were outstanding immediately prior to the Effective Time. If,
after the Effective Time, Certificates representing such shares are presented
for transfer to the Exchange Agent, they shall be exchanged for the Merger
Consideration and canceled as provided in this Section 3.3.
3.3.6. Return of Exchange Fund. At any time following the twelve
(12) month period after the Effective Time, New Provident Bancorp shall be
entitled to require the
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Exchange Agent to deliver to it any portions of the Exchange Fund which had been
made available to the Exchange Agent and not disbursed to holders of
Certificates (including, without limitation, all interest and other income
received by the Exchange Agent in respect of all funds made available to it),
and thereafter such holders shall be entitled to look to New Provident Bancorp
(subject to abandoned property, escheat and other similar laws) with respect to
any Merger Consideration that may be payable upon due surrender of the
Certificates held by them. Notwithstanding the foregoing, neither New Provident
Bancorp nor the Exchange Agent shall be liable to any holder of a Certificate
for any Merger Consideration delivered in respect of such Certificate to a
public official pursuant to any abandoned property, escheat or other similar
law.
3.3.7. Lost, Stolen or Destroyed Certificates. In the event any
Certificate shall have been lost, stolen or destroyed, upon the making of an
affidavit of that fact by the person claiming such Certificate to be lost,
stolen or destroyed and, if required by New Provident Bancorp, the posting by
such person of a bond in such amount as New Provident Bancorp may reasonably
direct as indemnity against any claim that may be made against it with respect
to such Certificate, the Exchange Agent will issue in exchange for such lost,
stolen or destroyed Certificate the Merger Consideration deliverable in respect
thereof.
3.3.8. Withholding. New Provident Bancorp or the Exchange Agent will
be entitled to deduct and withhold from the consideration otherwise payable
pursuant to this Agreement or the transactions contemplated hereby to any holder
of ENBHC Common Stock such amounts as New Provident Bancorp (or any Affiliate
thereof) or the Exchange Agent are required to deduct and withhold with respect
to the making of such payment under the Code, or any applicable provision of
U.S. federal, state, local or non-U.S. tax law. To the extent that such amounts
are properly withheld by New Provident Bancorp or the Exchange Agent, such
withheld amounts will be treated for all purposes of this Agreement as having
been paid to the holder of the ENBHC Common Stock in respect of whom such
deduction and withholding were made by New Provident Bancorp or the Exchange
Agent.
3.4. Reservation of Shares.
New Provident Bancorp shall reserve for issuance a sufficient number of
shares of the New Provident Bancorp Common Stock for the purpose of issuing
shares of New Provident Bancorp Common Stock to the ENBHC shareholders in
accordance with this Article III.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF ENBHC
ENBHC and ENB represent and warrant to the Mutual Holding Company,
Provident Bancorp, New Provident Bancorp and Provident Bank that the statements
contained in this Article IV are correct and complete as of the date of this
Agreement and will be correct and complete as of the Closing Date (as though
made then and as though the Closing Date were substituted for the date of this
Agreement throughout this Article IV), except as set forth in the ENBHC
DISCLOSURE SCHEDULE delivered by ENBHC to Provident Bancorp on the date hereof,
and except as to any representation or warranty which specifically relates to an
earlier date. ENBHC and ENB have made a good faith effort to ensure that the
disclosure on each schedule of the ENBHC DISCLOSURE SCHEDULE corresponds to the
section referenced
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herein. However, for purposes of the ENBHC DISCLOSURE SCHEDULE, any item
disclosed on any schedule therein is deemed to be fully disclosed with respect
to all schedules under which such item may be relevant as and to the extent that
it is reasonably clear on the face of such schedule that such item applies to
such other schedule. References to the Knowledge of ENBHC shall include the
Knowledge of ENB.
4.1. Organization.
4.1.1. ENBHC is a corporation duly organized, validly existing and
in good standing under the laws of the State of New York, and is duly registered
as a bank holding company under the BHCA. ENBHC has full corporate power and
authority to carry on its business as now conducted and is duly licensed or
qualified to do business in the states of the United States and foreign
jurisdictions where its ownership or leasing of property or the conduct of its
business requires such qualification, except where the failure to be so licensed
or qualified would not have a Material Adverse Effect on ENBHC.
4.1.2. ENB is a national bank organized, validly existing and in
good standing under federal law. ENBHC DISCLOSURE SCHEDULE 4.1.2 identifies each
ENBHC Subsidiary and (other than as to ENB) describes the business conducted by
such entity. The deposits of ENB are insured by the FDIC through the BIF to the
fullest extent permitted by law, and all premiums and assessments required to be
paid in connection therewith have been paid by ENB when due. Each other ENBHC
Subsidiary is a corporation or limited liability company duly organized, validly
existing and in good standing under the laws of its jurisdiction of
incorporation or organization.
4.1.3. The respective minute books of ENBHC and each ENBHC
Subsidiary accurately records, in all material respects, all material corporate
actions of their respective shareholders and boards of directors (including
committees).
4.1.4. Prior to the date of this Agreement, ENBHC has made available
to Provident Bancorp true and correct copies of the certificate of incorporation
or articles of association and bylaws of ENBHC and ENB.
4.2. Capitalization.
4.2.1. The authorized capital stock of ENBHC consists of 250,000
shares of common stock, $20.00 par value per share, of which 15,227 shares are
outstanding, validly issued, fully paid and nonassessable and free of preemptive
rights, and no shares of preferred stock issued and outstanding. There are 4,773
shares of ENBHC Common Stock held by ENBHC as treasury stock. Neither ENBHC nor
any ENBHC Subsidiary has or is bound by any Rights of any character relating to
the purchase, sale or issuance or voting of, or right to receive dividends or
other distributions on any shares of ENBHC Common Stock, or any other security
of ENBHC or any securities representing the right to vote, purchase or otherwise
receive any shares of ENBHC Common Stock or any other security of ENBHC.
4.2.2. ENBHC owns all of the capital stock of ENB, free and clear of
any lien or encumbrance. Except for the ENBHC Subsidiaries, ENBHC does not
possess, directly or indirectly, any material equity interest in any corporate
entity, except for equity interests held in
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the investment portfolios of ENBHC Subsidiaries, equity interests held by ENBHC
Subsidiaries in a fiduciary capacity, and equity interests held in connection
with the lending activities of ENBHC Subsidiaries, including stock in the FHLB.
4.2.3. Except as disclosed in ENBHC DISCLOSURE SCHEDULE 4.2.3, to
ENBHC's Knowledge, no Person or "group" (as that term is used in Section
13(d)(3) of the Exchange Act), is the beneficial owner (as defined in Section
13(d) of the Exchange Act) of 5% or more of the outstanding shares of ENBHC
Common Stock.
4.2.4. There are no options to purchase ENBHC Common Stock issued
and outstanding.
4.3. Authority; No Violation.
4.3.1. ENBHC and ENB each has full corporate power and authority to
execute and deliver this Agreement and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement by ENBHC and
ENB, and of the engagement agreements referenced in Section 4.13, and the
completion by ENBHC and ENB of the transactions contemplated hereby, up to and
including the Merger, have been duly and validly approved by the Board of
Directors of ENBHC and ENB, respectively, and, except for approval of the
shareholders of ENBHC, no other corporate proceedings on the part of ENBHC or
ENB are necessary to complete the transactions contemplated hereby, up to and
including the Merger. This Agreement, and the engagement agreements referenced
in Section 4.13, have been duly and validly executed and delivered by ENBHC and
ENB, and the Bank Merger has been duly and validly approved by the Board of
Directors of ENB, and by ENBHC in its capacity as sole shareholder of ENB, and
subject to approval by the shareholders of ENBHC of the Agreement and receipt of
the required approvals of the Bank Regulators described in Section 8.4 hereof,
constitutes the valid and binding obligations of ENBHC and ENB, enforceable
against ENBHC and ENB in accordance with its terms, subject to applicable
bankruptcy, insolvency and similar laws affecting creditors' rights generally,
and as to ENB, the conservatorship or receivership provisions of the FDIA, and
subject, as to enforceability, to general principles of equity.
4.3.2. (A) The execution and delivery of this Agreement by ENBHC and
ENB, and of the engagement agreements referenced in Section 4.13, (B) subject to
receipt of approvals from the Bank Regulators referred to in Section 8.4 hereof,
and ENBHC's and Provident Bancorp's compliance with any conditions contained
therein, and subject to the receipt of the approval of ENBHC's and Provident
Bancorp's shareholders, the consummation of the transactions contemplated
hereby, and (C) compliance by ENBHC and ENB with any of the terms or provisions
hereof will not (i) conflict with or result in a breach of any provision of the
certificate of incorporation or bylaws of ENBHC or any ENBHC Subsidiary or the
articles of association and bylaws of ENB; (ii) violate any statute, code,
ordinance, rule, regulation, judgment, order, writ, decree or injunction
applicable to ENBHC or any ENBHC Subsidiary or any of their respective
properties or assets; or (iii) except as set forth in ENBHC DISCLOSURE SCHEDULE
4.3.2, violate, conflict with, result in a breach of any provisions of,
constitute a default (or an event which, with notice or lapse of time, or both,
would constitute a default), under, result in the termination of, accelerate the
performance required by, or result in a right of termination or acceleration or
the creation of any lien, security interest, charge or other
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encumbrance upon any of the properties or assets of ENBHC or ENB under any of
the terms, conditions or provisions of any note, bond, mortgage, indenture, deed
of trust, license, lease, agreement or other investment or obligation to which
ENBHC or ENB is a party, or by which they or any of their respective properties
or assets may be bound or affected, except for such violations, conflicts,
breaches or defaults under clause (ii) or (iii) hereof which, either
individually or in the aggregate, will not have a Material Adverse Effect on
ENBHC and the ENBHC Subsidiaries taken as a whole.
4.4. Consents.
Except for the consents, waivers, approvals, filings and registrations
from or with the Bank Regulators referred to in Section 8.4 hereof and
compliance with any conditions contained therein, and the approval of this
Agreement by the requisite vote of the shareholders of ENBHC and Provident
Bancorp, no consents, waivers or approvals of, or filings or registrations with,
any Bank Regulator are necessary, and, to ENBHC's Knowledge and except as
disclosed in the ENBHC DISCLOSURE SCHEDULE 4.4, no consents, waivers or
approvals of, or filings or registrations with, any other third parties are
necessary, in connection with (a) the execution and delivery of this Agreement
by ENBHC and ENB, and (b) the completion by ENBHC and ENB of the Merger and the
Bank Merger. ENBHC and ENB have no reason to believe that (i) any required
approvals from a Bank Regulator or other required consents or approvals will not
be received, or that (ii) any public body or authority, the consent or approval
of which is not required or to which a filing is not required, will object to
the completion of the transactions contemplated by this Agreement.
4.5. Financial Statements.
4.5.1. ENBHC has previously made available to Provident Bancorp the
ENBHC Regulatory Reports. The ENBHC Regulatory Reports have been prepared in all
material respects in accordance with applicable regulatory accounting principles
and practices throughout the periods covered by such statements, and fairly
present in all material respects, the consolidated financial position, results
of operations and changes in shareholders' equity of ENBHC as of and for the
periods ended on the dates thereof, in accordance with applicable regulatory
accounting principles applied on a consistent basis.
4.5.2. ENBHC has previously made available to Provident Bancorp the
ENBHC Financial Statements. The ENBHC Financial Statements have been prepared in
accordance with GAAP, and (including the related notes where applicable) fairly
present in each case in all material respects (subject in the case of the
unaudited interim statements to normal year-end adjustments), the consolidated
financial position, results of operations and cash flows of ENBHC and the ENBHC
Subsidiaries on a consolidated basis as of and for the respective periods ending
on the dates thereof, in accordance with GAAP during the periods involved,
except as indicated in the notes thereto.
4.5.3. At the date of each balance sheet included in the ENBHC
Financial Statements or the ENBHC Regulatory Reports, ENBHC did not have any
liabilities, obligations or loss contingencies of any nature (whether absolute,
accrued, contingent or otherwise) of a type required to be reflected in such
ENBHC Financial Statements or ENBHC Regulatory Reports or
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in the footnotes thereto which are not fully reflected or reserved against
therein or fully disclosed in a footnote thereto, except for liabilities,
obligations and loss contingencies which are not material individually or in the
aggregate or which are incurred in the ordinary course of business, consistent
with past practice, and except for liabilities, obligations and loss
contingencies which are within the subject matter of a specific representation
and warranty herein and subject, in the case of any unaudited statements, to
normal, recurring audit adjustments and the absence of footnotes.
4.6. Taxes.
ENBHC and the ENBHC Subsidiaries are members of the same affiliated group
within the meaning of Code Section 1504(a). ENBHC, or the appropriate ENBHC
Subsidiary, has duly filed all federal, state and material local tax returns
required to be filed by or with respect to ENBHC and every ENBHC Subsidiary on
or prior to the Closing Date (all such returns, to ENBHC's Knowledge, being
accurate and correct in all material respects) and has duly paid or made
provisions for the payment of all material federal, state and local taxes which
(i) have been incurred by ENBHC and any ENBHC Subsidiary; (ii) are due or
claimed to be due from ENBHC or any ENBHC Subsidiary by any taxing authority or
(ii) are due pursuant to any written tax sharing agreement, in each case on or
prior to the Closing Date, other than taxes or other charges which (x) are not
delinquent, (y) are being contested in good faith, or (z) have not yet been
fully determined. As of the date of this Agreement, ENBHC has received no
written notice of, and to ENBHC's Knowledge there is no audit examination,
deficiency assessment, tax investigation or refund litigation with respect to
any taxes of ENBHC or any of its Subsidiaries, and no claim has been made by any
authority in a jurisdiction where ENBHC or any of its Subsidiaries do not file
tax returns that ENBHC or any such Subsidiary is subject to taxation in that
jurisdiction. Except as set forth in ENBHC DISCLOSURE SCHEDULE 4.6, ENBHC and
its Subsidiaries have not executed an extension or waiver of any statute of
limitations on the assessment or collection of any material tax due that is
currently in effect. ENBHC and each of its Subsidiaries has withheld and paid
all material taxes required to have been withheld and paid in connection with
amounts paid or owing to any employee, independent contractor, creditor,
shareholder or other third party, and ENBHC and each of its Subsidiaries, to
ENBHC's Knowledge, has timely complied with all applicable information reporting
requirements under Part III, Subchapter A of Chapter 61 of the Code and similar
applicable state and local information reporting requirements.
4.7. No Material Adverse Effect.
ENBHC and the ENBHC Subsidiaries, taken as a whole, have not suffered any
Material Adverse Effect since December 31, 2002, and no event has occurred or
circumstance arisen since that date which, in the aggregate, has had or is
reasonably likely to have a Material Adverse Effect on ENBHC and the ENBHC
Subsidiaries, taken as a whole.
4.8. Material Contracts; Leases; Defaults.
4.8.1. Except as set forth in ENBHC DISCLOSURE SCHEDULE 4.8.1,
neither ENBHC nor any ENBHC Subsidiary is a party to or subject to: (i) any
employment, consulting or severance contract or material arrangement with any
past or present officer, director or employee of ENBHC or any ENBHC Subsidiary,
except for "at will" arrangements;
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(ii) any plan, material arrangement or contract providing for bonuses, pensions,
options, deferred compensation, retirement payments, profit sharing or similar
material arrangements for or with any past or present officers, directors or
employees of ENBHC or any ENBHC Subsidiary; (iii) any collective bargaining
agreement with any labor union relating to employees of ENBHC or any ENBHC
Subsidiary; (iv) any agreement which by its terms limits the payment of
dividends by ENBHC or any ENBHC Subsidiary; (v) any instrument evidencing or
related to material indebtedness for borrowed money whether directly or
indirectly, by way of purchase money obligation, conditional sale, lease
purchase, guaranty or otherwise, in respect of which ENBHC or any ENBHC
Subsidiary is an obligor to any person, which instrument evidences or relates to
indebtedness other than deposits, repurchase agreements, bankers' acceptances,
and "treasury tax and loan" accounts established in the ordinary course of
business and transactions in "federal funds" or which contains financial
covenants or other restrictions (other than those relating to the payment of
principal and interest when due) which would be applicable on or after the
Closing Date to New Provident Bancorp or any New Provident Bancorp Subsidiary;
(vi) any agreement, written or oral, that obligates ENBHC or any ENBHC
Subsidiary for the payment of more than $20,000 annually; or (vii) any
agreement, contract, arrangement, commitment or understanding (whether written
or oral) that restricts or limits in any material way the conduct of business by
ENBHC or any ENBHC Subsidiary (it being understood that any non-compete or
similar provision shall be deemed material).
4.8.2. Each real estate lease that may require the consent of the
lessor or its agent resulting from the Merger or the merger of ENB into
Provident Bank by virtue of a prohibition or restriction relating to assignment,
by operation of law or otherwise, or change in control, is listed in ENBHC
DISCLOSURE SCHEDULE 4.8.2 identifying the section of the lease that contains
such prohibition or restriction. Subject to any consents that may be required as
a result of the transactions contemplated by this Agreement, to its Knowledge,
neither ENBHC nor any ENBHC Subsidiary is in default in any material respect
under any material contract, agreement, commitment, arrangement, lease,
insurance policy or other instrument to which it is a party, by which its
assets, business, or operations may be bound or affected, or under which it or
its assets, business, or operations receive benefits, and there has not occurred
any event that, with the lapse of time or the giving of notice or both, would
constitute such a default.
4.8.3. True and correct copies of agreements, contracts,
arrangements and instruments referred to in Section 4.8.1 and 4.8.2 have been
made available to Provident Bancorp on or before the date hereof, are listed on
ENBHC DISCLOSURE SCHEDULE 4.8.1 and 4.8.2 and are in full force and effect on
the date hereof and neither ENBHC nor any ENBHC Subsidiary (nor, to the
Knowledge of ENBHC, any other party to any such contract, arrangement or
instrument) has materially breached any provision of, or is in default in any
respect under any term of, any such contract, arrangement or instrument. Except
as listed on ENBHC DISCLOSURE SCHEDULE 4.8.3, no party to any material contract,
arrangement or instrument will have the right to terminate any or all of the
provisions of any such contract, arrangement or instrument as a result of the
execution of, and the consummation of the transactions contemplated by, this
Agreement. Except as set forth in ENBHC DISCLOSURE SCHEDULE 4.8.3, no plan,
contract, employment agreement, termination agreement, or similar agreement or
arrangement to which ENBHC or any ENBHC Subsidiary is a party or under which
ENBHC or any ENBHC Subsidiary may be liable contains provisions which permit an
employee or
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independent contractor to terminate it without cause and continue to accrue
future benefits thereunder. Except as set forth in ENBHC DISCLOSURE SCHEDULE
4.8.3, no such agreement, plan, contract, or arrangement (x) provides for
acceleration in the vesting of benefits or payments due thereunder upon the
occurrence of a change in ownership or control of ENBHC or any ENBHC Subsidiary
or upon the occurrence of a subsequent event; or (y) requires ENBHC or any ENBHC
Subsidiary to provide a benefit in the form of ENBHC Common Stock or determined
by reference to the value of ENBHC Common Stock.
4.9. Ownership of Property; Insurance Coverage.
4.9.1. ENBHC and each ENBHC Subsidiary has good and, as to real
property, marketable title to all material assets and properties owned by ENBHC
or each ENBHC Subsidiary in the conduct of its businesses, whether such assets
and properties are real or personal, tangible or intangible, including assets
and property reflected in the balance sheets contained in the ENBHC Regulatory
Reports and in the ENBHC Financial Statements or acquired subsequent thereto
(except to the extent that such assets and properties have been disposed of in
the ordinary course of business, since the date of such balance sheets), subject
to no material encumbrances, liens, mortgages, security interests or pledges,
except as listed on ENBHC DISCLOSURE SCHEDULE 4.9 and except for (i) those items
which secure liabilities for public or statutory obligations or any discount
with, inter-bank credit facilities, or any transaction by an ENBHC Subsidiary
acting in a fiduciary capacity, and (ii) statutory liens for amounts not yet
delinquent or which are being contested in good faith. ENBHC and the ENBHC
Subsidiaries, as lessee, have the right under valid and existing leases of real
and personal properties used by ENBHC and its Subsidiaries in the conduct of
their businesses to occupy or use all such properties as presently occupied and
used by each of them. Such existing leases and commitments to lease constitute
or will constitute operating leases for both tax and financial accounting
purposes and the lease expense and minimum rental commitments with respect to
such leases and lease commitments are as disclosed in all material respects in
the notes to the ENBHC Financial Statements.
4.9.2. With respect to all material agreements pursuant to which
ENBHC or any ENBHC Subsidiary has purchased securities subject to an agreement
to resell, if any, ENBHC or such ENBHC Subsidiary, as the case may be, has a
lien or security interest (which to ENBHC's Knowledge is a valid, perfected
first lien) in the securities or other collateral securing the repurchase
agreement, and the value of such collateral equals or exceeds the amount of the
debt secured thereby.
4.9.3. ENBHC and each ENBHC Subsidiary currently maintain insurance
considered by each of them to be reasonable for their respective operations.
Neither ENBHC nor any ENBHC Subsidiary, except as disclosed in ENBHC DISCLOSURE
SCHEDULE 4.9.3, has received notice from any insurance carrier that (i) such
insurance will be canceled or that coverage thereunder will be reduced or
eliminated, or (ii) premium costs with respect to such policies of insurance
will be substantially increased. There are presently no material claims pending
under such policies of insurance and no notices have been given by ENBHC or any
ENBHC Subsidiary under such policies. All such insurance is valid and
enforceable and in full force and effect, and within the last three years ENBHC
and each ENBHC Subsidiary has received each type of insurance coverage for which
it has applied and during such periods has
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not been denied indemnification for any material claims submitted under any of
its insurance policies. ENBHC DISCLOSURE SCHEDULE 4.9.3 identifies all policies
of insurance maintained by ENBHC and each ENBHC Subsidiary.
4.10. Legal Proceedings.
Except as set forth in ENBHC DISCLOSURE SCHEDULE 4.10, neither ENBHC nor
any ENBHC Subsidiary is a party to any, and there are no pending or, to ENBHC's
Knowledge, threatened legal, administrative, arbitration or other proceedings,
claims (whether asserted or unasserted), actions or governmental investigations
or inquiries of any nature (i) against ENBHC or any ENBHC Subsidiary (other than
routine bank regulatory examinations) or (ii) to which ENBHC or any ENBHC
Subsidiary's assets are or may be subject, except for any proceedings, claims,
actions, investigations or inquiries which, if adversely determined,
individually or in the aggregate, could not be reasonably expected to have a
Material Adverse Effect on ENBHC and the ENBHC Subsidiaries, taken as a whole.
There are no legal, administrative, arbitration or other proceedings, claims,
actions or governmental investigations challenging the validity or propriety of
any of the transactions and/or agreements contemplated by, referred to in or
related to this Agreement (including the schedules hereto).
4.11. Compliance With Applicable Law.
4.11.1. To ENBHC's Knowledge, each of ENBHC and each ENBHC
Subsidiary is in compliance in all material respects with all applicable
federal, state, local and foreign statutes, laws, regulations, ordinances,
rules, judgments, orders or decrees applicable to it, its properties, assets and
deposits, its business, and its conduct of business and its relationship with
its employees, including, without limitation, the Equal Credit Opportunity Act,
the Fair Housing Act, the Community Reinvestment Act of 1977, the Home Mortgage
Disclosure Act, and all other applicable fair lending laws and other laws
relating to discriminatory business practices and neither ENBHC nor any ENBHC
Subsidiary has received any written notice to the contrary.
4.11.2. Each of ENBHC and each ENBHC Subsidiary has all material
permits, licenses, authorizations, orders and approvals of, and has made all
filings, applications and registrations with, all Bank Regulators that are
required in order to permit it to own or lease its properties and to conduct its
business as presently conducted; all such permits, licenses, certificates of
authority, orders and approvals are in full force and effect and, to the
Knowledge of ENBHC, no suspension or cancellation of any such permit, license,
certificate, order or approval is threatened or will result from the
consummation of the transactions contemplated by this Agreement, subject to
obtaining the approvals set forth in Section 8.4.
4.11.3. For the period beginning January 1, 1998, neither ENBHC nor
any ENBHC Subsidiary has received any written notification or to ENBHC's
Knowledge any other communication from any Bank Regulator (i) asserting that
ENBHC or any ENBHC Subsidiary is not in material compliance with any of the
statutes, regulations or ordinances which such Bank Regulator enforces; (ii)
threatening to revoke any license, franchise, permit or governmental
authorization which is material to ENBHC or any ENBHC Subsidiary; (iii)
requiring or threatening to require ENBHC or any ENBHC Subsidiary, or indicating
that ENBHC or any
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ENBHC Subsidiary may be required, to enter into a cease and desist order,
agreement or memorandum of understanding or any other agreement with any federal
or state governmental agency or authority which is charged with the supervision
or regulation of banks or engages in the insurance of bank deposits restricting
or limiting, or purporting to restrict or limit, in any material respect the
operations of ENBHC or any ENBHC Subsidiary, including without limitation any
restriction on the payment of dividends; or (iv) directing, restricting or
limiting, or purporting to direct, restrict or limit, in any manner the
operations of ENBHC or any ENBHC Subsidiary, including without limitation any
restriction on the payment of dividends (any such notice, communication,
memorandum, agreement or order described in this sentence is hereinafter
referred to as a "Regulatory Agreement"). Neither ENBHC nor any ENBHC Subsidiary
has consented to or entered into any currently effective Regulatory Agreement.
The most recent regulatory rating given to ENB as to compliance with the
Community Reinvestment Act ("CRA") is satisfactory or better.
4.12. Employee Benefit Plans.
4.12.1. ENBHC DISCLOSURE SCHEDULE 4.12.1 includes a list of all
existing bonus, incentive, deferred compensation, pension, retirement,
profit-sharing, thrift, savings, employee stock ownership, stock bonus, stock
purchase, restricted stock, stock option, stock appreciation, phantom stock,
severance, welfare and fringe benefit plans, employment, severance and change in
control agreements and all other material benefit practices, policies and
arrangements maintained by ENBHC or any ENBHC Subsidiary in which any employee
or former employee, consultant or former consultant or director or former
director of ENBHC or any ENBHC Subsidiary participates or to which any such
employee, consultant or director is a party or is otherwise entitled to receive
benefits (the "Compensation and Benefit Plans"). Neither ENBHC nor any of its
Subsidiaries has any commitment to create any additional Compensation and
Benefit Plan or to materially modify, change or renew any existing Compensation
and Benefit Plan (any modification or change that increases the cost of such
plans would be deemed material), except as required to maintain the qualified
status thereof, provided, however, that ENBHC and its Subsidiaries expressly
reserve the right to amend the ENB Profit Sharing Plan and the ENB Pension Plan
prior to the Closing Date to provide for the full vesting of all participants
under those plans. ENBHC has made available to Provident Bancorp true and
correct copies of the Compensation and Benefit Plans.
4.12.2. To the Knowledge of ENBHC and except as disclosed in ENBHC
DISCLOSURE SCHEDULE 4.12.2, each Compensation and Benefit Plan has been operated
and administered in all material respects in accordance with its terms and with
applicable law, including, but not limited to, ERISA, the Code, the Securities
Act, the Exchange Act, the Age Discrimination in Employment Act, COBRA, the
Health Insurance Portability and Accountability Act and any regulations or rules
promulgated thereunder, and all material filings, disclosures and notices
required by ERISA, the Code, the Securities Act, the Exchange Act, the Age
Discrimination in Employment Act and any other applicable law have been timely
made or any interest, fines, penalties or other impositions for late filings
have been paid in full. Each Compensation and Benefit Plan which is an "employee
pension benefit plan" within the meaning of Section 3(2) of ERISA (a "Pension
Plan") and which is intended to be qualified under Section 401(a) of the Code
has received a favorable determination letter from the IRS, and ENBHC is not
aware of any circumstances which are reasonably likely to result in revocation
of any such
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favorable determination letter. There is no material pending or, to the
Knowledge of ENBHC, threatened action, suit or claim relating to any of the
Compensation and Benefit Plans (other than routine claims for benefits). Neither
ENBHC nor any ENBHC Subsidiary has engaged in a transaction, or omitted to take
any action, with respect to any Compensation and Benefit Plan that would
reasonably be expected to subject ENBHC or any ENBHC Subsidiary to an unpaid tax
or penalty imposed by either Section 4975 of the Code or Section 502 of ERISA.
4.12.3. No liability, other than (a) PBGC premiums arising in the
ordinary course of business, or (b) any employer contribution required under the
terms of any ENBHC Defined Benefit Plan (as defined herein) has been or is
expected by ENBHC or any of its Subsidiaries to be incurred with respect to any
ENBHC Compensation and Benefit Plan which is a defined benefit plan subject to
Title IV of ERISA ("ENBHC Defined Benefit Plan"), or with respect to any
"single-employer plan" (as defined in Section 4001(a) of ERISA) currently or
formerly maintained by ENBHC or any entity which is considered one employer w