STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT (this "Agreement"), dated as of January 25,
2007 between Central Co-operative Bank Employee Stock Ownership Trust (the
"ESOP") and Central Bancorp, Inc., a Massachusetts corporation ("Central
Bancorp" together with the ESOP, the "Central Parties"), on the one hand, and
Mendon Capital Advisors Corp. ("Mendon") on its own behalf and on behalf of
Moors & Mendon Master Fund, L/P. ("Moors"), Mendon ACAM Master Fund, Ltd.
("ACAM") and ▇▇▇▇▇▇▇ Financial Services Fund ("▇▇▇▇▇▇▇")(Moors, ACAM and ▇▇▇▇▇▇▇
each a "Seller" and collectively, the "Sellers", and the Sellers, together with
Mendon, the "Mendon Parties") on behalf of themselves and their respective
affiliates (the Central Parties and the Mendon Parties together, collectively,
the "Parties").
WHEREAS, each Mendon Party owns that number of the issued and
outstanding shares of common stock, par value $1.00 per share ("Common Stock"),
of Central Bancorp, set forth opposite his or its name on Schedule A hereto
(such Seller's "Contract Shares");
WHEREAS, the ESOP desires to purchase from the Sellers, and each Seller
desires to sell to the ESOP, all of such Seller's Contract Shares on the terms
and subject to the conditions set forth herein; and
WHEREAS, in order for the ESOP to finance its purchase of the Contract
Shares, it will be necessary for Central Bancorp to complete a sale of trust
preferred securities and use the proceeds thereof to refinance the ESOP's
outstanding debt and loan to the ESOP funds sufficient for the ESOP to purchase
the Contract Shares from the Sellers as contemplated by this Agreement.
NOW THEREFORE, the Central Parties and the Mendon Parties agree as
follows:
1. PURCHASE AND SALE OF THE CONTRACT SHARES
(a) Subject to the terms and conditions of this Agreement, including
the accuracy of the representations and warranties set forth herein, the ESOP
agrees to purchase from the Sellers, and the Sellers agree to sell to the ESOP,
an aggregate of 109,600 shares of Common Stock at the Closing (as defined
below).
(b) The purchase price for the Contract Shares is $33.00 per Contract
Share (the "Share Price").
(c) At the Closing, each Seller shall deliver to the ESOP, in a form
and in a manner reasonably acceptable to the Central Parties, all of such
Seller's Contract Shares being sold at such time, free and clear of all liens,
pledges, charges, equities, claims or other encumbrances, together with any
further documents or instruments, including, if appropriate, stock powers duly
endorsed in blank or stock transfer stamps affixed thereto, or certificates from
broker-dealers previously holding liens on such shares or holding such shares
for a Seller, reasonably requested by the ESOP.
(d) At the Closing, the ESOP shall pay each Seller by wire transfer
an amount equal to the Share Price multiplied by the number of Contract Shares
being sold to the ESOP by such Seller.
2. THE CLOSING
(a) The Closing shall occur as soon as practicable but not later than
five days after satisfaction or waiver of all of the conditions set forth in
Section 7 herein and shall be on such date and at such time and location as is
mutually agreed by Central Bancorp and Mendon.
(b) Upon payment by the ESOP to each Seller of the Share Price for
such Seller's Contract Shares and delivery by each Seller of his or its Contract
Shares to the ESOP the Closing shall have occurred and the purchase and sale of
the Sellers' Contract Shares shall be deemed to be complete.
3. STANDSTILL
The Mendon Parties each agree that, for that period of time commencing
at the Closing and continuing for five years following the Closing (the
"Standstill Period"), they and their affiliates and associates (as defined in
Rule 12b-2 promulgated pursuant to the Securities Exchange Act of 1934, as
amended (the "Exchange Act")) will not (and they will not assist or encourage
others to), directly or indirectly, in any manner, without prior written
approval of the Board of Directors of Central Bancorp, knowingly:
(a) acquire, offer to acquire, solicit an offer to sell or agree to
acquire directly or indirectly, alone or in concert with others, by purchase,
gift or otherwise, any direct or indirect beneficial ownership (within the
meaning of Rule 13d-3 under the Exchange Act) or any direct or indirect interest
in any securities or direct or indirect rights, warrants or options to acquire,
or securities convertible into or exchangeable for (collectively, an
"Acquisition"), any securities of Central Bancorp ("Bancorp Securities");
(b) make, or in any way participate in, directly or indirectly, alone
or in concert with others, any "solicitation" of "proxies" to vote (as such
terms are used in the proxy rules of the Securities and Exchange Commission
promulgated pursuant to Section 14 of the Exchange Act) or seek to advise or
influence in any manner whatsoever any person with respect to the voting of any
voting Bancorp Securities;
(c) form, join or in any way participate in a "group" within the
meaning of Section 13(d)(3) of the Exchange Act with respect to any voting
Bancorp Securities;
(d) acquire, offer to acquire or agree to acquire, directly or
indirectly, alone or in concert with others, by purchase, exchange or otherwise,
(i) any of the assets, tangible and intangible, of Central Bancorp or (ii)
direct or indirect rights, warrants or options to acquire any assets of Central
Bancorp;
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(e) arrange, or in any way participate, directly or indirectly, in
any financing for the purchase of any Bancorp Securities or securities
convertible or exchangeable into or exercisable for any Bancorp Securities or
assets of Central Bancorp;
(f) otherwise act, alone or in concert with others to seek to offer
to Central Bancorp or any of its stockholders any business combination,
restructuring, recapitalization or similar transaction to or with Central
Bancorp or otherwise seek, alone or in concert with others to control or change
the management, board of directors or policies of Central Bancorp or nominate
any person as a director of Central Bancorp who is not nominated by the then
incumbent directors, or propose any matter to be voted upon by the stockholders
of Central Bancorp; or
(g) announce an intention to do, or enter into any arrangement or
understanding with others to do, any of the actions restricted or prohibited
under clauses (a) through (f) of this Paragraph 3, or publicly announce or
disclose any request to be excused from any of the foregoing obligations of this
Paragraph 3.
4. DISCLOSURE OF THIS AGREEMENT
The parties contemplate that Mendon will file a Schedule 13G amendment,
that Central Bancorp will file a Form 8-K attaching this Agreement and that
there will be no other public comments (except as required by applicable SEC
regulations) by the Parties regarding this Agreement other than a press release
by Central Bancorp factually summarizing this Agreement and referring to the
Form 8-K filing.
5. REPRESENTATIONS AND WARRANTIES OF THE MENDON PARTIES
The Mendon Parties hereby represent and warrant, severally and not
jointly, to the ESOP and Central Bancorp as of the date of this Agreement and
the Closing:
(a) Each Mendon Party has the requisite capacity, power and authority
to enter into this Agreement and to consummate the transactions contemplated
hereby.
(b) The execution, delivery and performance of this Agreement by each
of the Mendon Parties and the sale and delivery of the Contract Shares hereunder
have been duly authorized by all necessary actions on the part of each Mendon
Party and any necessary third party (including any consultation, approval or
other action by or with any other person or governmental entity), and will not
conflict with or result in a breach or violation of any of the terms or
provisions of its certificate of incorporation or bylaws (if it is a
corporation) or equivalent constituent documents or result in the material
breach or violation of any of the terms or provisions of, or constitute a
default under, any indenture, mortgage, deed of trust, loan agreement or any
other agreement or instrument to which it is a party or by which it is bound or
to which any of its properties or assets is subject, nor will any such action
result in any violation of the provisions of any statute or any order, rule or
regulation of any court or governmental agency or body having jurisdiction over
it or its property.
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(c) This Agreement has been duly executed and delivered by each
Mendon Party and constitutes a valid and binding obligation of each of the
Mendon Parties, enforceable against the Seller in accordance with its terms,
subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles (regardless of whether
enforcement is sought in a proceeding in equity or at law).
(d) Each Seller has record and beneficial ownership of and good and
valid title to such Seller's Contract Shares, and such ownership and title are
free and clear of all liens, pledges, charges, equities, claims or other
encumbrances.
(e) Upon each delivery of the Contract Shares hereunder and payment
therefor pursuant hereto, good and valid title to such Contract Shares, free and
clear of all liens, pledges, charges, equities, claims and encumbrances, will
pass to the ESOP.
(f) Each Seller beneficially owns only those shares of Common Stock
identified as Contract Shares with respect to such Seller on Schedule A hereto,
and such Seller does not hold or beneficially own any other securities of
Central Bancorp other than such Contract Shares, except that one of more of the
Sellers owns 13,400 shares of Common Stock, which shares are subject to a Stock
Purchase Agreement dated January 25, 2007 by and between the Mendon Parties and
▇▇▇▇ ▇. ▇▇▇▇▇▇▇.
(g) Each of the Mendon Parties is not participating with any other
person, other than the other Sellers, in any "group", as such term is used in
Rule 13D under the Exchange Act, with respect to any Bancorp Security.
(h) There is not pending or, to the knowledge of the Mendon Parties,
threatened against any Mendon Party any action, suit or proceeding at law or in
equity before any court, tribunal, governmental body, agency or official or any
arbitrator that might affect the legality, validity or enforceability against
any Mendon Party of this Agreement or such Mendon Party's ability to perform
such Mendon Party's obligations hereunder.
(i) No person or entity acting on behalf or under the authority of
Seller is or will be entitled to any broker's, finder's, or similar fee or
commission in connection with the transactions contemplated by this Agreement.
(j) None of the Mendon Parties is an "Interested Stockholder" (as
defined in Massachusetts General Law, Chapter 110F, Section 3(g)) under
Massachusetts General Law, Chapter 110F Section 1 et seq., Business Combinations
with Interested Shareholders) with respect to Central Bancorp, Inc. because the
Mendon Parties own, in the aggregate, and each of the Mendon Parties
individually owns, less than 15% of the outstanding voting stock thereof.
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6. REPRESENTATIONS AND WARRANTIES OF THE CENTRAL PARTIES
Each of the Central Parties represents and warrants, solely for itself
and not on behalf of or with respect to the other Central Party, to each of the
Sellers as of the date of this Agreement and the Closing as follows:
(a) Central Bancorp is duly organized and is validly existing under
the laws of Massachusetts. The trust included in the ESOP is duly formed under
the laws of the Commonwealth of Massachusetts and under the Employee Retirement
Income Security Act of 1974, as amended.
(b) ESOP has the requisite power and authority to enter into this
Agreement and to consummate the transactions contemplated hereby.
(c) Except for the regulatory review and the refinancing of the ESOP
loans contemplated by Paragraphs 7(a)(2) and (3) of this Agreement,
respectively, the execution, delivery and performance of this Agreement by each
of the Central Parties has been duly authorized by all necessary actions on the
part of such Central Party and any necessary third party (including any
consultation, approval or other action by or with any other person or
governmental entity). The execution, delivery and performance of this Agreement
by each of the Central Parties will not conflict with or result in a breach or
violation of any of the terms or provisions of its articles of organization or
bylaws, in the case of Central Bancorp, or plan or trust documents, in the case
of the ESOP, or result in the material breach or violation of any of the terms
or provisions of, or constitute a default under, any indenture, mortgage, deed
of trust, loan agreement or any other agreement or instrument to which it is a
party or by which it is bound or to which any of its properties or assets is
subject, nor will any such action result in any violation of the provisions of
any statute or any order, rule or regulation of any court or governmental or
regulatory agency or body having jurisdiction over it or its property.
(d) This Agreement has been duly executed and delivered by each
Central Party and constitutes a valid and binding obligation of the Central
Parties, enforceable against each of the Central Parties in accordance with its
terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles (regardless of whether
enforcement is sought in a proceeding in equity or at law).
(e) There is not pending or, to each of the Central Parties'
knowledge, threatened against such Central Party any action, suit or proceeding
at law or in equity before any court, tribunal, governmental body, agency or
official or any arbitrator that might affect the legality, validity or
enforceability against it of this Agreement or its ability to perform its
obligations hereunder.
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(f) No person or entity acting on behalf or under the authority of
each ESOP is or will be entitled to any broker's, finder's, or similar fee or
commission in connection with the transactions contemplated by this Agreement.
7. CONDITIONS TO THE OBLIGATIONS OF THE PARTIES
(a) CONDITIONS TO THE OBLIGATIONS OF THE CENTRAL PARTIES. The
obligations of the Central Parties to consummate the transactions contemplated
by this Agreement are subject to the satisfaction at or prior to the Closing of
the following conditions, unless waived by the Central Parties:
(1) Trust Preferred Offering. Central Bancorp shall have
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completed the offering and sale of at least $5.9 million in trust preferred
securities.
(2) Regulatory Review. Any review of the transactions
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contemplated by this Agreement required under law, regulations or policies by
regulatory authorities with jurisdiction over Central Bancorp, Central
Cooperative Bank (the "Bank"), the ESOP and their affiliates shall have been
completed, and no such regulatory authority shall have advised Central Bancorp,
the Bank or the ESOP that it may not proceed to consummate the transactions
contemplated by this Agreement.
(3) Refinancing and Termination of Existing ESOP Loan. The
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ESOP shall have refinanced (with a new loan from Central Bancorp) and terminated
the loan from an unaffiliated lender (the "Lender") pursuant to the agreement,
dated October 16, 2003, as amended, among ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇ ▇. ▇▇▇▇▇▇
as trustees of the ESOP trust, Central Bancorp and the Lender.
(4) Representations and Warranties. The representations and
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warranties of the Mendon Parties contained in Paragraph 5 of this Agreement
shall be true and correct, in all material respects, on and as of the Closing
with the same effect as though made on and as of the Closing.
(b) CONDITIONS TO THE OBLIGATIONS OF SELLERS. The obligations of the
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respective Sellers to consummate the transactions contemplated by this Agreement
are subject to the satisfaction at or prior to the Closing of the following
condition, unless waived by Mendon:
(1) Representations and Warranties. The representations and
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warranties of the Central Parties parties contained in Paragraph 6 of this
Agreement shall be true and correct, in all material respects, on and as of the
Closing with the same effect as though made on and as of the Closing.
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8. TERMINATION
This Agreement may be terminated at any time prior to the Closing (i)
by mutual consent in writing of the Parties, (ii) by either the Central Parties,
on the one hand, or the Sellers, on the other hand, in the event the Closing
shall not have occurred within 30 days following the date of this Agreement,
(iii) by the Central Parties in the event any of the conditions set forth in
Paragraph 7(a) herein is not satisfied as of the Closing, or (iv) by the Sellers
in the event the condition set forth in Paragraph 7(b) herein is not satisfied
as of the Closing.
9. NON-DISPARAGEMENT
During the Standstill Period, (i) the Mendon Parties agree not to
disparage either of the Central Parties or any officers, directors (including
director nominees) or employees of Central Bancorp or the Bank in any public
forum, and (ii) the Central Parties agree not to disparage any of the Mendon
Parties or any officers or employees of Mendon in any public forum.
10. MISCELLANEOUS
(a) ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
and understanding among each of the Central Parties and each of the Mendon
Parties with respect to the subject matter hereof and supersedes all other prior
agreements, understandings and arrangements, whether oral or written, among the
parties hereto.
(b) EXPENSES. Each party hereto shall be responsible for and shall
pay its own costs and expenses, including attorneys' fees and accountants' fees
and expenses, incurred in connection with the negotiation, execution and
delivery of this Agreement. Each Seller shall pay any transfer taxes imposed on
transferors payable in connection with the sale of his or its Contract Shares to
be sold by him or it hereunder.
(c) GOVERNING LAW. This Agreement shall be governed by, and construed
in accordance with, the laws of the Commonwealth of Massachusetts applicable to
contracts made and to be performed in such Commonwealth without regard to the
conflict of law principles thereof.
(d) SUCCESSORS AND ASSIGNS. This Agreement shall benefit and bind the
successors and permitted assigns of the parties hereto. Any assignment of this
Agreement by any party without the prior written consent of each of the other
parties shall be void ab initio.
(e) AMENDMENTS. This Agreement may only be amended or modified by a
written instrument signed by all of the Parties hereto.
(f) WAIVERS. No waiver of any provision of this Agreement by any
party shall be deemed to be a continuing waiver of any provision of this
Agreement by such party.
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(g) EQUITABLE RELIEF. The parties hereby expressly recognize and
acknowledge that immediate, extensive and irreparable damage would result in the
event the covenants and agreements in this Agreement are not specifically
enforced. Therefore, in addition to, and not in limitation of, any other remedy
available to the Central Parties and the Sellers, the respective rights of the
Central Parties and Sellers and obligations of the Sellers and Central Parties,
respectively, shall be enforceable in a court of equity by decree of specific
performance and appropriate injunctive relief may be applied for and granted in
connection therewith.
(h) COUNTERPARTS; DELIVERY. This Agreement may be executed in any
number of separate counterparts, each such counterpart being deemed to be an
original instrument, and all such counterparts shall together constitute the
same agreement. Delivery may be effected via facsimile.
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IN WITNESS WHEREOF, the Central Parties and each of the Mendon Parties
have executed this Agreement on the date set forth below.
Dated: January 25, 2007
For: Mendon Capital Advisors Corp.: For Central Bancorp, Inc.:
On behalf of the Mendon Parties
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇ /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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By: ▇▇▇▇▇▇ ▇▇▇▇▇▇ By: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Managing Director President
For the Central Co-operative Bank
Employee Stock Ownership Trust:
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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By: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Trustee
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
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By: ▇▇▇▇ ▇. ▇▇▇▇▇▇, Trustee
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
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By: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Trustee
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SCHEDULE A
Name of Seller No. of Contract Shares Owned
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Moors & Mendon Master Fund, L.P. 5,139
Mendon ACAM Master Fund, Ltd. 4,411
▇▇▇▇▇▇▇ Financial Services Fund 100,050
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