EXHIBIT 2.1
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
▇▇▇▇▇▇▇ FINANCIAL CORPORATION,
▇▇▇▇▇▇▇ BANK
AND
MARITIME BANK & TRUST COMPANY
DATED AS OF
NOVEMBER 3, 1998
TABLE OF CONTENTS
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ARTICLE I THE MERGER.............................................................1
1.1 The Merger.............................................................1
1.2 Effective Time.........................................................1
1.3 Effects of the Merger..................................................2
1.4 Conversion of Maritime Bank Common Stock...............................2
1.5 Conversion of ▇▇▇▇▇▇▇ Bank Common Stock................................3
1.6 Options................................................................3
1.7 Charter................................................................4
1.8 By-Laws................................................................4
1.9 Directors and Officers.................................................4
1.10 Tax Consequences......................................................4
ARTICLE II EXCHANGE OF SHARES....................................................5
2.1 Webster to Make Shares Available.......................................5
2.2 Exchange of Shares.....................................................5
ARTICLE III REPRESENTATIONS AND WARRANTIES OF MARITIME BANK......................6
3.1 Corporate Organization.................................................6
3.2 Capitalization.........................................................7
3.3 Authority; No Violation................................................7
3.4 Consents and Approvals.................................................8
3.5 Loan Portfolio; Reports................................................8
3.6 Financial Statements; Books and Records................................9
3.7 Broker's Fees.........................................................10
3.8 Absence of Certain Changes or Events..................................10
3.9 Legal Proceedings.....................................................10
3.10 Taxes and Tax Returns................................................10
3.11 Employee Benefit Plans...............................................11
3.12 Certain Contracts....................................................12
3.13 Agreements with Regulatory Agencies..................................12
3.14 State Takeover Laws; Certificate of Incorporation....................12
3.15 Environmental Matters................................................13
3.16 Reserves for Losses..................................................13
3.17 Properties and Assets................................................14
3.18 Insurance............................................................14
3.19 Compliance with Applicable Laws......................................15
3.20 Loans................................................................15
3.21 Affiliates...........................................................16
3.22 Ownership of Webster Common Stock....................................16
3.23 Fairness Opinion.....................................................16
3.24 Year 2000 Compliance.................................................16
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF WEBSTER............................17
4.1 Corporate Organization................................................17
4.2 Capitalization........................................................17
4.3 Authority; No Violation...............................................18
4.4 Consents, Approvals and Reports.......................................18
4.5 Financial Statements; Exchange Act Filings; Books and Records.........19
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4.6 Absence of Certain Changes or Events..................................20
4.7 Ownership of Maritime BankCommon Stock; Affiliates and Associates.....20
4.8 Employee Benefit Plans................................................20
4.9 Agreements with Regulatory Agencies...................................20
4.10 Year 2000 Compliance.................................................20
ARTICLE V COVENANTS RELATING TO CONDUCT OF BUSINESS.............................21
5.1 Covenants of Maritime Bank............................................21
5.2 Covenants of Webster..................................................24
5.3 Merger Covenants......................................................24
5.4 Compliance with Antitrust Laws........................................24
ARTICLE VI ADDITIONAL AGREEMENTS................................................25
6.1 Regulatory Matters....................................................25
6.2 Access to Information.................................................26
6.3 Shareholder Meeting...................................................27
6.4 Legal Conditions to Merger............................................27
6.5 Stock Exchange Listing................................................27
6.6 Employees; Employment and Other Agreements............................27
6.7 Indemnification.......................................................28
6.8 Subsequent Interim and Annual Financial Statements....................29
6.9 Additional Agreements.................................................29
6.10 Advice of Changes....................................................29
6.11 Current Information..................................................30
6.12 Execution and Authorization of Bank Merger Agreement.................30
6.13 Change in Structure..................................................30
6.14 Transaction Expenses of Maritime Bank................................30
ARTICLE VII CONDITIONS PRECEDENT................................................31
7.1 Conditions to Each Party's Obligation To Effect the Merger............31
7.2 Conditions to Obligations of Webster and ▇▇▇▇▇▇▇ Bank.................32
7.3 Conditions to Obligations of Maritime Bank............................33
ARTICLE VIII TERMINATION AND AMENDMENT..........................................34
8.1 Termination...........................................................34
8.2 Effect of Termination.................................................35
8.3 Amendment.............................................................35
8.4 Extension; Waiver.....................................................35
ARTICLE IX GENERAL PROVISIONS...................................................36
9.1 Closing...............................................................36
9.2 Nonsurvival of Representations, Warranties, Covenants and Agreements..36
9.3 Expenses; Breakup Fee.................................................36
9.4 Notices...............................................................37
9.5 Interpretation........................................................37
9.6 Counterparts..........................................................37
9.7 Entire Agreement......................................................38
9.8 Governing Law.........................................................38
9.9 Enforcement of Agreement..............................................38
9.10 Severability.........................................................38
9.11 Publicity............................................................38
9.12 Assignment; Limitation of Benefits...................................38
9.13 Additional Definitions...............................................39
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EXHIBITS
A Form of Articles of Combination and Bank Merger Agreement
B Form of Option Agreement
C Form of Maritime Bank & Trust Company Stockholder Agreement
D Form of Legal Opinion of counsel to Maritime Bank & Trust Company
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AGREEMENT AND PLAN OF MERGER
This AGREEMENT AND PLAN OF MERGER, dated as of November 3, 1998 (this
"Agreement"), is entered into by and among ▇▇▇▇▇▇▇ Financial Corporation, a
Delaware corporation ("Webster"), ▇▇▇▇▇▇▇ Bank, a federally chartered savings
bank and wholly owned subsidiary of Webster ("▇▇▇▇▇▇▇ Bank"), and Maritime Bank
& Trust Company, a Connecticut chartered bank ("Maritime Bank"). (▇▇▇▇▇▇▇ Bank
and Maritime Bank are sometimes collectively referred to herein as the
"Constituent Banks".)
WHEREAS, the Boards of Directors of Webster, Webster Bank and Maritime Bank
have determined that it is in the best interests of their respective companies
and shareholders to consummate the business combination transaction provided for
herein in which Maritime Bank will, subject to the terms and conditions set
forth herein, merge with and into ▇▇▇▇▇▇▇ Bank, with ▇▇▇▇▇▇▇ Bank being the
"Surviving Bank" and a wholly owned subsidiary of Webster (the "Merger");
WHEREAS, prior to the consummation of the Merger, ▇▇▇▇▇▇▇ Bank and Maritime
Bank will enter into articles of combination and bank merger agreement, in the
form attached hereto as Exhibit A (the "Bank Merger Agreement"), providing for
the Merger;
WHEREAS, as an inducement to Webster to enter into this Agreement, Maritime
Bank will enter into an option agreement, in the form attached hereto as Exhibit
B (the "Option Agreement"), with Webster immediately following the execution of
this Agreement pursuant to which Maritime Bank will ▇▇▇▇▇ ▇▇▇▇▇▇▇ an option to
purchase, under certain circumstances, an aggregate of 141,004 newly issued
shares of common stock, par value $.67 per share, of Maritime Bank ("Maritime
Bank Common Stock") upon the terms and conditions therein contained; and
WHEREAS, the parties desire to make certain representations, warranties and
agreements in connection with the Merger and also to prescribe certain
conditions to the Merger;
NOW, THEREFORE, in consideration of the mutual covenants, representations,
warranties and agreements contained herein, and intending to be legally bound
hereby, the parties agree as follows:
ARTICLE I
THE MERGER
1.1 THE MERGER.
Subject to the terms and conditions of this Agreement, in accordance with
the Banking Law of Connecticut (the "Connecticut Banking Law") and the rules and
regulations of the Office of Thrift Supervision (the "OTS"), at the Effective
Time (as defined in Section 1.2 hereof), Maritime Bank shall merge into ▇▇▇▇▇▇▇
Bank, with ▇▇▇▇▇▇▇ Bank being the Surviving Bank in the Merger. Upon
consummation of the Merger, the corporate existence of Maritime Bank shall cease
and the Surviving Bank shall continue to exist as a federally chartered savings
bank under the Home Owners' Loan Act (the "HOLA") and a wholly owned subsidiary
of Webster.
1.2 EFFECTIVE TIME.
The Merger shall become effective on the Closing Date (as defined in
Section 9.1 hereof), as set forth in the Bank Merger Agreement in the form
attached hereto as Exhibit A which shall be filed with the Secretary of State of
the State of Connecticut (the "Connecticut Secretary of State") and the
Corporate Secretary of the OTS on the Closing Date. The term "Effective Time"
shall be the date and
time when the Merger becomes effective on the Closing Date, as set forth in
the Bank Merger Agreement.
1.3 EFFECTS OF THE MERGER.
At and after the Effective Time, the Merger shall have the effects set
forth in 12 ▇.▇.▇.▇▇. 552.13(l) and Section 36a-126(b) of the Connecticut
Banking Law.
1.4 CONVERSION OF MARITIME BANK COMMON STOCK.
(a) At the Effective Time, subject to Sections 1.4(b), 2.2(e) and
8.1(h) hereof, each share of Maritime Bank Common Stock issued and outstanding
prior to the Effective Time (other than Dissenting Shares (as such term is
defined below in this Section 1.4(e))) shall, by virtue of this Agreement and
without any action on the part of the holder thereof, be converted into and
exchangeable for that number of shares of Webster common stock, par value $.01
per share ("▇▇▇▇▇▇▇ Common Stock"), determined by dividing $26.67 by the Base
Period Trading Price (as defined below), as may be adjusted as provided below,
computed to three decimal places (the "Exchange Ratio"); provided, however, that
if the Base Period Trading Price shall be greater than $24.45, the Exchange
Ratio shall be 1.091 and if the Base Period Trading Price shall be less than
$17.50, the Exchange Ratio shall be 1.524. The number of shares of Webster
Common Stock issuable with respect to each share of Maritime Bank Common Stock,
as determined as set forth herein, is called the "Merger Consideration." For
purposes of this Agreement, the term "Base Period Trading Price" shall mean the
average of the daily closing prices per share for Webster Common Stock for the
15 consecutive trading days during which shares of Webster Common Stock are
actually traded (as reported on The Nasdaq Stock Market, Inc. National Market
Tier ("Nasdaq")) ending on the day preceding the receipt of the last required
federal bank regulatory approval or waiver required to effect the Merger (such
period herein called the "Base Period"). For the purposes of this Agreement,
references to ▇▇▇▇▇▇▇ Common Stock shall be deemed to include, where
appropriate, references to the right to receive shares of ▇▇▇▇▇▇▇'▇ Series C
Participating Preferred Stock pursuant to the Rights Agreement, dated as of
February 5, 1996, as amended, between Webster and American Stock Transfer &
Trust Company (the "Rights Agreement").
(b) All of the shares of Maritime Bank Common Stock converted into
Webster Common Stock pursuant to this Article I shall no longer be outstanding
and shall automatically be canceled and shall cease to exist, and each
certificate (each a "Certificate") previously representing any such shares of
Maritime Bank Common Stock shall thereafter represent the right to receive (i)
the number of whole shares of Webster Common Stock and (ii) cash in lieu of
fractional shares into which the shares of Maritime Bank Common Stock
represented by such Certificate have been converted pursuant to this Section
1.4(a). Certificates previously representing shares of Maritime Bank Common
Stock shall be exchanged for certificates representing whole shares of Webster
Common Stock and cash in lieu of fractional shares issued in consideration
therefor upon the surrender of such Certificates in accordance with Section 2.2
hereof, without any interest thereon. If prior to the Effective Time Webster
should split or combine its common stock, or pay a dividend or other
distribution in such common stock, then the Exchange Ratio shall be
appropriately adjusted to reflect such split, combination, dividend or
distribution.
(c) At the Effective Time, all shares of Maritime Bank Common Stock
that are owned by Maritime Bank as treasury stock and all shares of Maritime
Bank Common Stock that are owned directly or indirectly by Webster or Maritime
Bank or any of ▇▇▇▇▇▇▇'▇ Subsidiaries (as defined in Section 9.13 hereof) (other
than shares of Maritime Bank Common Stock held directly or indirectly in trust
accounts, managed accounts and the like or otherwise held in a fiduciary
capacity that are beneficially owned by third parties (any such shares, whether
held directly or indirectly by Webster or Maritime Bank, as the case may be,
being referred to herein as "Trust Account Shares") and other than any shares of
Maritime Bank Common Stock held by Webster or Maritime Bank or any of ▇▇▇▇▇▇▇'▇
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Subsidiaries in respect of a debt previously contracted (any such shares,
whether held directly or indirectly by Webster or Maritime Bank, being referred
to herein as "DPC Shares")) shall be canceled and shall cease to exist and no
stock of Webster or other consideration shall be delivered in exchange therefor.
All shares of Webster Common Stock that are owned by Maritime Bank (other than
Trust Account Shares and DPC Shares) shall become treasury stock of Webster.
(d) Certificates for fractions of shares of Webster Common Stock will
not be issued. In lieu of a fraction of a share of Webster Common Stock, each
holder of Maritime Bank Common Stock otherwise entitled to a fraction of a share
of Webster Common Stock shall be entitled to receive an amount of cash equal to
(i) the fraction of a share of the ▇▇▇▇▇▇▇ Common Stock to which such holder
would otherwise be entitled, multiplied by (ii) the closing time average market
value of the ▇▇▇▇▇▇▇ Common Stock, which shall be deemed to be the average of
the daily closing prices per share for Webster Common Stock for the fifteen
consecutive trading days on which shares of Webster Common Stock are actually
traded (as reported on the Nasdaq) ending on the third trading day preceding the
Closing Date. Following consummation of the Merger, no holder of Maritime Bank
Common Stock shall be entitled to dividends or any other rights in respect of
any such fraction.
(e) Notwithstanding anything in this Agreement to the contrary and
unless otherwise provided by applicable law, shares of Maritime Bank Common
Stock that are issued and outstanding immediately prior to the Effective Time
and that are owned by shareholders who have properly dissented (the "Dissenting
Shares") within the meaning of Sections 33-855 through 33-872 of the Connecticut
Business Corporation Act, as amended (the "Connecticut Corporation Law"), shall
not be converted into the right to receive shares of Webster Common Stock,
unless and until such shareholders shall have failed to perfect or shall have
effectively withdrawn or lost their right of payment under applicable law. If
any such shareholder shall have failed to perfect or shall have effectively
withdrawn or lost such right of payment, each share of Maritime Bank Common
Stock held by such shareholder shall thereupon be deemed to have been converted
into the right to receive and become exchangeable for, at the Effective Time,
shares of Webster Common Stock pursuant to Section 1.4(a) hereof.
(f) Maritime Bank shall give Webster (i) prompt notice of any written
notice of intent to demand payment for shares filed pursuant to Section 33-861
of the Connecticut Corporation Law received by Maritime Bank, withdrawals of
such notices, and any other instruments served in connection with such notices
pursuant to the Connecticut Corporation Law and received by Maritime Bank and
(ii) the opportunity to direct all negotiations and proceedings with respect to
such notices under the Connecticut Corporation Law consistent with the
obligations of Maritime Bank thereunder. Maritime Bank shall not, except with
the prior written consent of Webster, (x) make any payment with respect to any
such notice, (y) offer to settle or settle any such notices or (z) waive any
failure to timely deliver a written notice in accordance with the Connecticut
Corporation Law.
1.5 CONVERSION OF ▇▇▇▇▇▇▇ BANK COMMON STOCK.
At the Effective Time, the shares of the common stock, par value $.01 per
share, of ▇▇▇▇▇▇▇ Bank issued and outstanding immediately prior to the Effective
Time shall constitute all of the issued and outstanding shares of the Surviving
Bank.
1.6 OPTIONS.
At the Effective Time, each option granted by Maritime Bank to purchase
shares of Maritime Bank Common Stock under the 1991 Stock Option Plan (the
"Maritime Bank Stock Plan") which is outstanding and unexercised immediately
prior thereto shall be converted automatically into an option to purchase shares
of Webster Common Stock in an amount and at an exercise price determined as
provided below (and otherwise subject to the terms of the Maritime Bank Stock
Plan);
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(1) The number of shares of Webster Common Stock to be subject to the
option immediately after the Effective Time shall be equal to the
product of the number of shares of Maritime Bank Common Stock subject
to the option immediately before the Effective Time, multiplied by the
Exchange Ratio, provided that any fractional shares of Webster Common
Stock resulting from such multiplication shall be rounded down to the
nearest share; and
(2) The exercise price per share of Webster Common Stock under the
option immediately after the Effective Time shall be equal to the
exercise price per share of Maritime Bank Common Stock under the
option immediately before the Effective Time divided by the Exchange
Ratio, provided that such exercise price shall be rounded to the
nearest cent.
The adjustment provided herein shall be and is intended to be effected in a
manner which is consistent with Section 424(a) of the Internal Revenue Code of
1986, as amended (the "Code"). The duration and other terms of the option
immediately after the Effective Time shall be the same as the corresponding
terms in effect immediately before the Effective Time, except that all
references to Maritime Bank in the Maritime Bank Stock Plan (and the
corresponding references in the option agreement documenting such option) shall
be deemed to be references to Webster or ▇▇▇▇▇▇▇ Bank, as appropriate.
1.7 CHARTER.
At the Effective Time, the Federal Stock Charter, as amended (the
"Charter"), of ▇▇▇▇▇▇▇ Bank as in effect immediately prior to the Effective
Time, shall be the federal stock charter of the Surviving Bank.
1.8 BY-LAWS.
At the Effective Time, the By-Laws, as amended (the "By-Laws"), of ▇▇▇▇▇▇▇
Bank, as in effect immediately prior to the Effective Time, shall be the by-laws
of the Surviving Bank.
1.9 DIRECTORS AND OFFICERS.
At the Effective Time, the directors and officers of ▇▇▇▇▇▇▇ Bank
immediately prior to the Effective Time shall be the directors and officers of
the Surviving Bank. The non-employee directors of Maritime Bank serving
immediately prior to the Effective Time will be invited to serve on an advisory
board to ▇▇▇▇▇▇▇ Bank after the Bank Merger for a period of up to 24 months.
Such advisory directors each will be paid for such service up to $15,000 based
on an annual retainer of $3,500 per year, payable in quarterly installments, and
quarterly meeting attendance fees of $1,000 for each meeting attended in person.
1.10 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" for the purposes of the Code.
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ARTICLE II
EXCHANGE OF SHARES
2.1 ▇▇▇▇▇▇▇ TO MAKE SHARES AVAILABLE.
At or prior to the Effective Time, ▇▇▇▇▇▇▇ shall deposit, or shall cause to
be deposited, with ▇▇▇▇▇▇▇'▇ transfer agent, American Stock Transfer & Trust
Company, or such other bank, trust company or transfer agent as ▇▇▇▇▇▇▇ may
select (the "Exchange Agent"), for the benefit of the holders of Certificates,
for exchange in accordance with this Article II, certificates representing the
shares of Webster Common Stock and the cash in lieu of fractional shares (such
cash and certificates for shares of Webster Common Stock, being hereinafter
referred to as the "Exchange Fund") to be issued pursuant to Section 1.4 and
paid pursuant to Section 2.2(a) hereof in exchange for outstanding shares of
Maritime Bank Common Stock.
2.2 EXCHANGE OF SHARES.
(a) As soon as practicable after the Effective Time, the Exchange
Agent shall mail to each holder of record of a Certificate or Certificates a
form letter of transmittal (which shall specify that delivery shall be effected,
and risk of loss and title to the Certificates shall pass, only upon delivery of
the Certificates to the Exchange Agent) and instructions for use in effecting
the surrender of the Certificates in exchange for certificates representing the
shares of Webster Common Stock and the cash in lieu of fractional shares into
which the shares of Maritime Bank Common Stock represented by such Certificate
or Certificates shall have been converted pursuant to this Agreement. Maritime
Bank shall have the right to review both the letter of transmittal and the
instructions prior to such documents being finalized. Upon surrender of a
Certificate for exchange and cancellation to the Exchange Agent, together with
such letter of transmittal, duly executed, the holder of such Certificate shall
be entitled to receive in exchange therefor (x) a certificate representing that
number of whole shares of Webster Common Stock to which such holder of Maritime
Bank Common Stock shall have become entitled pursuant to the provisions of
Article I hereof and (y) a check representing the amount of cash in lieu of
fractional shares, if any, which such holder has the right to receive in respect
of the Certificate surrendered pursuant to the provisions of this Article II,
and the Certificate so surrendered shall forthwith be canceled. No interest will
be paid or accrued on the cash in lieu of fractional shares and unpaid dividends
and distributions, if any, payable to holders of Certificates.
(b) No dividends or other distributions declared after the Effective
Time with respect to Webster Common Stock and payable to the holders of record
thereof shall be paid to the holder of any unsurrendered Certificate until the
holder thereof shall surrender such Certificate in accordance with this Article
II. After the surrender of a Certificate in accordance with this Article II, 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 Webster Common Stock represented by such
Certificate. No holder of an unsurrendered Certificate shall be entitled, until
the surrender of such Certificate, to vote the shares of Webster Common Stock
into which his Maritime Bank Common Stock shall have been converted.
(c) If any certificate representing shares of Webster Common Stock is
to be issued in a name other than that in which the Certificate surrendered in
exchange therefor is registered, it shall be a condition of the issuance thereof
that the Certificate so surrendered shall be properly endorsed (or accompanied
by an appropriate instrument of transfer) and otherwise in proper form for
transfer, and that the person requesting such exchange shall pay to the Exchange
Agent in advance any transfer or other taxes required by reason of the issuance
of a certificate representing shares of ▇▇▇▇▇▇▇ Common Stock in any name other
than that of the registered holder of the Certificate surrendered, or shall
establish to the satisfaction of the Exchange Agent that such tax has been paid
or is not payable.
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(d) After the close of business on the day immediately prior to the
Effective Time, there shall be no transfers on the stock transfer books of
Maritime Bank of the shares of Maritime Bank Common Stock which were issued and
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 canceled and exchanged for certificates
representing shares of Webster Common Stock as provided in this Article II.
(e) Any portion of the Exchange Fund that remains unclaimed by the
shareholders of Maritime Bank for six months after the Effective Time shall be
returned to Webster. Any shareholders of Maritime Bank who have not theretofore
complied with this Article II shall thereafter look only to Webster for payment
of their shares of Webster Common Stock, cash in lieu of fractional shares and
unpaid dividends and distributions on Webster Common Stock deliverable in
respect of each share of Maritime Bank Common Stock such shareholder holds as
determined pursuant to this Agreement, in each case, without any interest
thereon. Notwithstanding the foregoing, none of Webster, Maritime Bank, the
Exchange Agent or any other person shall be liable to any former holder of
shares of Maritime Bank Common Stock for any amount properly delivered to a
public official pursuant to applicable abandoned property, escheat or similar
laws.
(f) 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 Webster,
the posting by such person of a bond in such amount as ▇▇▇▇▇▇▇ 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 shares of Webster Common Stock and cash in
lieu of fractional shares deliverable in respect thereof pursuant to this
Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF MARITIME BANK
Maritime Bank hereby makes the following representations and warranties to
Webster and ▇▇▇▇▇▇▇ Bank as set forth in this Article III, each of which is
being relied upon by Webster and ▇▇▇▇▇▇▇ Bank as a material inducement to enter
into and perform this Agreement. All of the disclosure schedules of Maritime
Bank referenced below and thereby required of Maritime Bank pursuant to this
Agreement, which disclosure schedules shall be cross-referenced to the specific
sections and subsections of this Agreement and delivered herewith, are referred
to herein as the "Maritime Bank Disclosure Schedule."
3.1 CORPORATE ORGANIZATION.
Maritime Bank is a Connecticut chartered bank duly organized, validly
existing and in good standing under the laws of the State of Connecticut. The
deposit accounts of Maritime Bank are insured by the Federal Deposit Insurance
Corporation (the "FDIC") through the Bank Insurance Fund to the fullest extent
permitted by law, and all premiums and assessments required in connection
therewith have been paid by Maritime Bank. Maritime Bank has the corporate power
and corporate authority to own or lease all of its properties and assets and to
carry on its business as it is now being conducted and is duly licensed or
qualified to do business in each jurisdiction in which the nature of any
business conducted by it or the character or location of any properties or
assets owned or leased by it makes such licensing or qualification necessary.
The Certificate of Incorporation and Second Amended and Restated Bylaws (the
"Bylaws") of Maritime Bank, copies of which have previously been delivered to
▇▇▇▇▇▇▇, are true, correct and complete copies of such documents as in effect as
of the date of this Agreement.
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3.2 CAPITALIZATION.
(a) The authorized capital stock of Maritime Bank consists of
1,500,000 shares of Maritime Bank Common Stock. As of the date hereof, there are
(y) 705,023 shares of Maritime Bank Common Stock issued and outstanding and no
shares of Maritime Bank Common Stock held in Maritime Bank's treasury, and (z)
no shares of Maritime Bank Common Stock reserved for issuance upon exercise of
outstanding stock options or otherwise, except for (i) 112,500 shares of
Maritime Bank Common Stock reserved for issuance pursuant to the Maritime Bank
Stock Plan (of which options for 101,700 shares are currently outstanding) and
(ii) 141,004 shares of Maritime Bank Common Stock reserved for issuance upon
exercise of the option to be issued to ▇▇▇▇▇▇▇ pursuant to the Option Agreement.
All of the issued and outstanding shares of Maritime Bank Common Stock have been
duly authorized and validly issued and are fully paid, nonassessable and free of
preemptive rights, with no personal liability attaching to the ownership
thereof. Except for the Option Agreement and the aforementioned options to
purchase 101,700 shares of Maritime Bank Common Stock issued pursuant to the
Maritime Bank Stock Plan, Maritime Bank does not have and is not bound by any
outstanding subscriptions, options, warrants, calls, commitments or agreements
of any character calling for the purchase or issuance of any shares of Maritime
Bank Common Stock or any other equity security of Maritime Bank or any
securities representing the right to purchase or otherwise receive any shares of
Maritime Bank Common Stock or any other equity security of Maritime Bank. The
names of the optionees, the date of each option to purchase Maritime Bank Common
Stock granted, the number of shares subject to each such option, the expiration
date of each such option, and the price at which each such option may be
exercised under the Maritime Bank Stock Plan are set forth in Section 3.2(a) of
the Maritime Bank Disclosure Schedule. Since December 31, 1997, Maritime Bank
has not issued any shares of its capital stock or any securities convertible
into or exercisable for any shares of its capital stock, other than pursuant to
the exercise of director or employee stock options granted prior to December 31,
1997 under the Maritime Bank Stock Plan.
(b) Maritime Bank has no Subsidiaries and has not owned any
Subsidiaries.
3.3 AUTHORITY; NO VIOLATION.
(a) Maritime Bank has full corporate power and corporate authority to
execute and deliver this Agreement, the Bank Merger Agreement and the Option
Agreement and to consummate the transactions contemplated hereby and thereby.
The execution and delivery of this Agreement, the Bank Merger Agreement and the
Option Agreement and the consummation of the transactions contemplated hereby
and thereby have been duly and validly approved by the Board of Directors of
Maritime Bank. The Board of Directors of Maritime Bank has directed that this
Agreement, the Merger and the other transactions contemplated hereby be
submitted to Maritime Bank's shareholders for approval at a special meeting of
such shareholders (the "Special Meeting") and, except for the approval of this
Agreement, the Merger and the other transactions contemplated hereby by the
requisite vote of Maritime Bank's shareholders, no other corporate proceedings
on the part of Maritime Bank (except for matters related to setting the date,
time, place and record date for the Special Meeting) are necessary to approve
this Agreement, the Bank Merger Agreement or the Option Agreement or to
consummate the transactions contemplated hereby or thereby. This Agreement has
been, and the Bank Merger Agreement and the Option Agreement will be, duly and
validly executed and delivered by Maritime Bank and (assuming due authorization,
execution and delivery by ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ Bank of this Agreement, by ▇▇▇▇▇▇▇
Bank of the Bank Merger Agreement, and by ▇▇▇▇▇▇▇ of the Option Agreement) will
constitute valid and binding obligations of Maritime Bank, enforceable against
Maritime Bank in accordance with their terms, except as enforcement may be
limited by general principles of equity whether applied in a court of law or a
court of equity and by bankruptcy, insolvency and similar laws affecting
creditors' rights and remedies generally.
(b) Neither the execution and delivery of this Agreement, the Bank
Merger Agreement or the Option Agreement by Maritime Bank, nor the consummation
by Maritime Bank of
7
the transactions contemplated hereby or thereby, nor compliance by Maritime Bank
with any of the terms or provisions hereof or thereof, will (i) violate any
provision of the Certificate of Incorporation or Bylaws of Maritime Bank, or
(ii) assuming that the consents and approvals referred to in Section 3.4(a)
hereof are duly obtained, (x) violate any Laws (as defined in Section 9.13
hereof) applicable to Maritime Bank, or any of its properties or assets, or (y)
violate, conflict with, result in a breach of any provision of or the loss of
any benefit under, constitute a default (or an event which, with notice or lapse
of time, or both, would constitute a default) under, result in the termination
of or a right of termination or cancellation under, accelerate the performance
required by, or result in the creation of any lien, pledge, security interest,
charge or other encumbrance upon any of the properties or assets of Maritime
Bank under, any of the terms, conditions or provisions of any note, bond,
mortgage, indenture, deed of trust, license, lease, agreement or other
instrument or obligation to which Maritime Bank is a party, or by which it or
any of its properties or assets may be bound or affected.
3.4 CONSENTS AND APPROVALS.
(a) Except for (i) the filing of applications and notices, as
applicable, as to the Merger with the OTS under the HOLA and the Bank Merger Act
and approval of such applications and notices, (ii) the filing of applications
and notices with the Banking Commissioner of the State of Connecticut (the
"Connecticut Commissioner") and approval of such applications and notices as to
the Merger (the "State Banking Approvals"), (iii) the filing with the
Connecticut Commissioner of an acquisition statement pursuant to Section 36a-184
of the Connecticut Banking Law prior to the acquisition of more than 10% of the
Maritime Bank Common Stock pursuant to the Option Agreement, if not exempt, (iv)
the filing of the stockholder agreement to be entered into by ▇▇▇▇▇▇▇ and the
stockholders of Maritime Bank identified therein (the "Maritime Bank Stockholder
Agreement") with the Connecticut Commissioner and the approval of such
agreement, (v) the filing with the Securities and Exchange Commission (the
"SEC") of a registration statement on Form S-4, which will include the proxy
statement/prospectus to be used in soliciting the approval of Maritime Bank's
shareholders at the Special Meeting (the "Proxy Statement/Prospectus"), to
register the shares of ▇▇▇▇▇▇▇ Common Stock to be issued in connection with the
Merger (including the shares of ▇▇▇▇▇▇▇ Common Stock that may be issued upon the
exercise of the options referred to in Section 1.6 hereof) (the "Registration
Statement"), (vi) the approval of this Agreement by the requisite vote of the
shareholders of Maritime Bank, (vii) the filings with the OTS and the
Connecticut Secretary of State required in connection with the Bank Merger
Agreement, (viii) such filings, authorizations and approvals as are required to
be made or obtained under the securities or "Blue Sky" laws of various states or
with The Nasdaq Stock Market, Inc. (or such other exchange as may be applicable)
in connection with the issuance of the shares of ▇▇▇▇▇▇▇ Common Stock pursuant
to this Agreement, and (ix) such notices, filings, authorizations, approvals or
consents that are set forth in Section 3.4(a) of the Maritime Bank Disclosure
Schedule, no consents or approvals of or filings or registrations with any
court, administrative agency or commission or other governmental authority or
instrumentality (each a "Governmental Entity") or with any third party are
necessary in connection with (1) the execution and delivery by Maritime Bank of
this Agreement, the Bank Merger Agreement and the Option Agreement, and (2) the
consummation by Maritime Bank of the Merger, the Option Agreement and the other
transactions contemplated hereby and thereby, except, in each case, for such
consents, approvals or filings, the failure of which to obtain will not have a
Material Adverse Effect (as defined in Section 9.13 hereof) on the ability of
▇▇▇▇▇▇▇ to consummate the transactions contemplated hereby or thereby.
(b) Maritime Bank hereby represents to ▇▇▇▇▇▇▇ that it has no
knowledge of any reason why approval or effectiveness of any of the
applications, notices or filings referred to in Section 3.4(a) hereof cannot be
obtained or granted on a timely basis.
3.5 LOAN PORTFOLIO; REPORTS.
(a) Except as set forth at Section 3.5(a) of the Maritime Bank
Disclosure Schedule, as of December 31, 1997 and thereafter through and
including the date of this Agreement, Maritime
8
Bank was not a party to any written or oral loan agreement, note or borrowing
arrangement (including, without limitation, leases, credit enhancements,
commitments, guarantees and interest-bearing assets) (collectively, "Loans"),
with any director, officer or five percent or greater shareholder of Maritime
Bank or any Affiliated Person (as defined in Section 9.13 hereof) of the
foregoing.
(b) Maritime Bank has timely filed all reports, registrations and
statements, together with any amendments required to be made with respect
thereto, that it was required to file with (i) the FDIC, (ii) the Connecticut
Commissioner and any other state banking commissions or any other state
regulatory authority (each a "State Regulator"), (iii) the SEC and (iv) and any
self-regulatory organization ("SRO") (collectively "Regulatory Agencies").
Except for normal examinations conducted by a Regulatory Agency in the regular
course of the business of Maritime Bank, no Governmental Entity is conducting,
or has conducted, any proceeding or investigation into the business or
operations of Maritime Bank nor does Maritime Bank have knowledge of any pending
or threatened proceeding or investigation.
3.6 FINANCIAL STATEMENTS; BOOKS AND RECORDS.
(a) Maritime Bank has previously delivered to ▇▇▇▇▇▇▇ true, correct
and complete copies of (a) the balance sheets of Maritime Bank as of December 31
for the years 1995, 1996, and 1997 and the related statements of income, changes
in stockholders' equity and cash flows for the years 1994 through 1997,
inclusive, in each case accompanied by the audit report of ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ &
Company, P.C., independent public accountants with respect to Maritime Bank, and
(b) the unaudited statement of position of Maritime Bank as of September 30,
1998 and the related comparative unaudited statements of earnings, changes in
stockholders' equity and cash flows for the nine month periods ended September
30, 1997 and 1998. The financial statements referred to in this Section 3.6(a)
(including the related notes, where applicable) fairly present, and the
financial statements referred to in Section 6.8 hereof will fairly present
(subject, in the case of the unaudited statements, to recurring audit
adjustments normal in nature and amount), the results of the operations and
financial condition of Maritime Bank for the respective fiscal periods or as of
the respective dates therein set forth; each of such statements (including the
related notes, where applicable) comply, and the financial statements referred
to in Section 6.8 hereof will comply, with applicable accounting requirements
and with the published rules and regulations of the FDIC with respect thereto;
and each of such statements (including the related notes, where applicable) has
been, and the financial statements referred to in Section 6.8 hereof will be,
prepared in accordance with generally accepted accounting principles ("GAAP")
during the periods involved, except in each case as indicated in such statements
or in the notes thereto. The annual reports and quarterly reports that Maritime
Bank has sent to shareholders since December 31, 1994 do not contain any untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements made, in light of the circumstances under which they were
made, not misleading, and Maritime Bank has previously delivered or made
available to ▇▇▇▇▇▇▇ true, correct and complete copies of such reports. The
books and records of Maritime Bank have been, and are being, maintained in all
material respects in accordance with GAAP and any other applicable legal and
accounting requirements.
(b) Except and to the extent (i) reflected, disclosed or provided for
in the financial statements as of December 31, 1997 referred to above, (ii) of
liabilities incurred since December 31, 1997 in the ordinary course of business
and consistent with past practice, and (iii) of liabilities related to the
Agreement, Maritime Bank has no liabilities, whether absolute, accrued,
contingent or otherwise.
(c) The minute books of Maritime Bank contain records of all meetings
and other corporate action held of its shareholders and Board of Directors
(including committees thereof) that are complete and accurate in all material
respects.
9
3.7 BROKER'S FEES.
Neither Maritime Bank nor any of its officers or directors has employed any
broker or finder or incurred any liability for any broker's fees, commissions or
finder's fees in connection with any of the transactions contemplated by this
Agreement, the Bank Merger Agreement or the Option Agreement, except that
Maritime Bank has engaged, and will pay a fee to ▇▇▇▇▇▇▇▇▇ & Company, Inc. ("O &
Co.") in accordance with the terms of a letter agreement between O & Co. and
Maritime Bank dated July 28, 1998, a true, complete and correct copy of which
has been previously delivered by Maritime Bank to ▇▇▇▇▇▇▇.
3.8 ABSENCE OF CERTAIN CHANGES OR EVENTS.
(a) Except as disclosed in Maritime Bank's balance sheet as of
December 31, 1997 referred to in Section 3.6(a) hereof or Maritime Bank's
balance sheet as of September 30, 1998 referred to in Section 3.6(a) hereof,
since December 31, 1997 (i) Maritime Bank has not incurred any material
liability, except as contemplated by this Agreement or in the ordinary course of
its business consistent with its past practices, and (ii) no event has occurred
which has had, or is likely to have, individually or in the aggregate, a
Material Adverse Effect on Maritime Bank.
(b) Since December 31, 1997, Maritime Bank has carried on its
businesses in the ordinary and usual course consistent with its past practices.
3.9 LEGAL PROCEEDINGS.
(a) Maritime Bank is not a party to any, and there are no pending or
threatened, legal, administrative, arbitration or other proceedings, claims,
actions or governmental or regulatory investigations of any nature against
Maritime Bank or which challenge the validity or propriety of the transactions
contemplated by this Agreement, the Bank Merger Agreement or the Option
Agreement.
(b) There is no injunction, order, judgment, decree, or regulatory
restriction imposed upon Maritime Bank or its assets.
3.10 TAXES AND TAX RETURNS.
Maritime Bank has duly filed all federal and state tax returns required to
be filed by it on or prior to the date hereof (all such returns being accurate
and complete in all material respects) and has duly paid or made provision for
the payment of all material taxes and other governmental charges which have been
incurred or are due or claimed to be due from it by federal and state taxing
authorities on or prior to the date hereof other than taxes or other charges (a)
which (x) are not yet delinquent or (y) are being contested in good faith and
set forth at Section 3.10 of the Maritime Bank Disclosure Schedule and (b) which
have not been finally determined. All liability with respect to the income tax
returns of Maritime Bank has been satisfied for all years to and including 1997.
The Internal Revenue Service (the "IRS") has not notified Maritime Bank of, or
otherwise asserted, that there are any material deficiencies with respect to any
income tax returns of Maritime Bank. There are no material disputes pending, or
claims asserted for, taxes or assessments upon Maritime Bank, nor has Maritime
Bank been requested to give any currently effective waivers extending the
statutory period of limitation applicable to any federal or state income tax
return for any period. In addition, federal and state returns which are accurate
and complete in all material respects have been filed by Maritime Bank for all
periods for which returns were due with respect to income tax withholding,
social security and unemployment taxes and the amounts shown on such federal and
state returns to be due and payable have been paid in full or adequate provision
therefor has been included by Maritime Bank in its financial statements as of
December 31, 1997 and September 30, 1998.
10
3.11 EMPLOYEE BENEFIT PLANS.
(a) Section 3.11(a) of the Maritime Bank Disclosure Schedule sets
forth a true and complete list of each employee benefit plan (within the meaning
of Section 3(3) of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA")), arrangement or agreement that is maintained or contributed
to as of the date of this Agreement, or that has within the last six years been
maintained or contributed to, by Maritime Bank or any other entity which
together with Maritime Bank would be deemed a "single employer" within the
meaning of Section 4001 of ERISA or Code Sections 414(b), (c) or (m) or under
which Maritime Bank has any liability (collectively, the "Plans").
(b) Maritime Bank has heretofore delivered to ▇▇▇▇▇▇▇ true, correct
and complete copies of each of the Plans and all related documents, including
but not limited to (i) the actuarial report for such Plan (if applicable) for
each of the last six years, (ii) the most recent determination letter from the
IRS (if applicable) for such Plan, (iii) the current summary plan description
and any summaries of material modifications, (iv) all annual reports (Form 5500
series) for each Plan filed for the preceding six plan years, (v) all agreements
with fiduciaries and service providers relating to the Plan, and (vi) all
substantive correspondence relating to any such Plan addressed to or received
from the IRS, the Department of Labor, the Pension Benefit Guaranty Corporation
or any other governmental agency.
(c) (i) Each of the Plans has been operated and administered in all
material respects in compliance with applicable Laws, including but not limited
to ERISA and the Code; (ii) each of the Plans intended to be "qualified" within
the meaning of Section 401(a) of the Code is so qualified; (iii) with respect to
each Plan which is subject to Title IV of ERISA, the present value of accrued
benefits under such Plan, based upon the actuarial assumptions used for funding
purposes in the most recent actuarial report prepared by such Plan's actuary
with respect to such Plan, did not, as of its latest valuation date, exceed the
then current value of the assets of such Plan allocable to such accrued
benefits; (iv) no Plan provides benefits, including, without limitation, death
or medical benefits (whether or not insured), with respect to current or former
employees of Maritime Bank beyond their retirement or other termination of
service, other than (w) coverage mandated by applicable Law, (x) death benefits
or retirement benefits under a Plan that is an "employee pension plan," as that
term is defined in Section 3(2) of ERISA, (y) deferred compensation benefits
under a Plan that are accrued as liabilities on the books of Maritime Bank, or
(z) benefits the full cost of which is borne by the current or former employee
(or his beneficiary); (v) no liability under Title IV of ERISA has been incurred
by Maritime Bank that has not been satisfied in full, and no condition exists
that presents a material risk to Maritime Bank incurring a material liability
thereunder; (vi) no Plan is a "multiemployer pension plan," as such term is
defined in Section 3(37) of ERISA; (vii) all contributions or other amounts
payable by Maritime Bank as of the Effective Time with respect to each Plan and
all other liabilities of each such entity with respect to each Plan, in respect
of current or prior plan years have been paid or accrued in accordance with
generally accepted accounting practices and Section 412 of the Code; (viii)
Maritime Bank has not engaged in a transaction in connection with which Maritime
Bank could be subject to either a civil penalty assessed pursuant to Section 409
or 502(i) of ERISA or a tax imposed pursuant to Section 4975 or 4976 of the
Code; (ix) to the knowledge of Maritime Bank, there are no pending, threatened
or anticipated claims (other than routine claims for benefits) by, on behalf of
or against any of the Plans or any trusts related thereto; (x) all Plans could
be terminated as of the Effective Time without any liability materially in
excess of the amounts accrued with respect to such Plans on the September 30,
1998 financial statements referenced in Section 3.6(a) hereof; (xi) no Plan,
program, agreement or other arrangement, either individually or collectively,
provides for any payment by Maritime Bank that would not be deductible under
Code Sections 162(a)(1), 162(m) or 404 or that would constitute a "parachute
payment" within the meaning of Code Section 280G; (xii) no "accumulated funding
deficiency" as defined in Section 302(a)(2) of ERISA or Section 412 of the Code,
whether or not waived, and no "unfunded current liability" as determined under
Section 412(l) of the Code exists with respect to any Plan; and (xiii) no Plan
has experienced a "reportable event" (as such
11
term is defined in Section 4043(b) of ERISA and the regulations thereunder) that
is not subject to an administrative or statutory waiver from the reporting
requirement.
3.12 CERTAIN CONTRACTS.
(a) Except as set forth at Section 3.12(a) of the Maritime Bank
Disclosure Schedule, Maritime Bank is not a party to or bound by any contract,
arrangement or commitment (i) with respect to the employment of any directors,
officers, employees or consultants, (ii) which, upon the consummation of the
transactions contemplated by this Agreement, the Bank Merger Agreement or the
Option Agreement will (either alone or upon the occurrence of any additional
acts or events) result in any payment (whether of severance pay or otherwise)
becoming due from ▇▇▇▇▇▇▇, Maritime Bank, ▇▇▇▇▇▇▇ Bank, the Surviving Bank or
any of ▇▇▇▇▇▇▇'▇ Subsidiaries to any director, officer or employee thereof,
(iii) which materially restricts the conduct of any line of business by Maritime
Bank, (iv) with or to a labor union or guild (including any collective
bargaining agreement) or (v) (including any stock option plan, stock
appreciation rights plan, restricted stock plan or stock purchase plan) any of
the benefits of which will be increased, or the vesting of the benefits of which
will be accelerated, by the occurrence of any of the transactions contemplated
by this Agreement, the Bank Merger Agreement or the Option Agreement, or the
value of any of the benefits of which will be calculated on the basis of any of
the transactions contemplated by this Agreement, the Bank Merger Agreement or
the Option Agreement. Maritime Bank has previously delivered to ▇▇▇▇▇▇▇ true,
correct and complete copies of all employment, consulting and deferred
compensation agreements to which Maritime Bank is a party. Section 3.12(a) of
the Maritime Bank Disclosure Schedule sets forth a list of all material
contracts (as defined in Item 601(b)(10) of Regulation S-K) of Maritime Bank.
Each contract, arrangement or commitment of the type described in this Section
3.12(a), whether or not set forth in Section 3.12(a) of the Maritime Bank
Disclosure Schedule, is referred to herein as a "Maritime Bank Contract," and
Maritime Bank has not received notice of, nor do any of its executive officers
know of, any violation of any Maritime Bank Contract.
(b) (i) Each Maritime Bank Contract is valid and binding and in full
force and effect, (ii) Maritime Bank has in all material respects performed all
obligations required to be performed by it to date under each Maritime Bank
Contract, and (iii) no event or condition exists which constitutes or, after
notice or lapse of time or both, would constitute, a material default on the
part of Maritime Bank under any such Maritime Bank Contract.
3.13 AGREEMENTS WITH REGULATORY AGENCIES.
Neither Maritime Bank nor any of its affiliates is subject to any
cease-and-desist or other order issued by, or is a party to any written
agreement, consent agreement or memorandum of understanding with, or has adopted
any board resolutions at the request of (each, whether or not set forth at
Section 3.13 of the Maritime Bank Disclosure Schedule, a "Regulatory Agreement")
any Governmental Entity that restricts the conduct of its business or that in
any manner relates to its capital adequacy, its credit policies, its management
or its business, nor has Maritime Bank been advised by any Governmental Entity
that it is considering issuing or requesting any Regulatory Agreement.
3.14 STATE TAKEOVER LAWS; CERTIFICATE OF INCORPORATION.
The Board of Directors of Maritime Bank has approved this Agreement, the
Bank Merger Agreement and the Option Agreement pursuant to Section 13.3 of
Maritime Bank's Certificate of Incorporation such that the voting and price
provisions of Sections 13.2 and 13.3(b) of the Certificate of Incorporation will
not apply to this Agreement, the Bank Merger Agreement or the Option Agreement,
or any of the transactions contemplated hereby or thereby, and such approval is
irrevocable within the meaning of Section 13.3(d) of Maritime Bank's Certificate
of Incorporation. The Board of Directors of Maritime Bank has approved Maritime
Bank entering into this Agreement, the Bank Merger Agreement and the Option
Agreement, and the transactions contemplated hereby and thereby, such
12
that under the Connecticut Banking Law, the Connecticut Corporation Law and
Maritime Bank's Certificate of Incorporation, the only vote of Maritime Bank
stockholders necessary to consummate the transactions contemplated hereby
(including the Merger and issuance under the Option Agreement) is the approval
of this Agreement, the Merger and the other transactions contemplated hereby by
the affirmative vote of at least two-thirds of the issued and outstanding shares
of Maritime Bank Common Stock.
3.15 ENVIRONMENTAL MATTERS.
(a) Maritime Bank is in compliance in all material respects with all
applicable federal and state laws and regulations relating to pollution or
protection of the environment (including without limitation, laws and
regulations relating to emissions, discharges, releases and threatened releases
of Hazardous Material (as hereinafter defined), or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of Hazardous Materials;
(b) There is no suit, claim, action, proceeding, investigation or
notice pending or to the knowledge of Maritime Bank's directors and executive
officers threatened (or past or present actions or events that could form the
basis of any such suit, claim, action, proceeding, investigation or notice), in
which Maritime Bank has been or, with respect to threatened suits, claims,
actions, proceedings, investigations or notices may be, named as a defendant (x)
for alleged noncompliance (including by any predecessor), with any environmental
law, rule or regulation or (y) relating to any material release or threatened
release into the environment of any Hazardous Material, whether or not occurring
at or on a site owned, leased or operated by Maritime Bank;
(c) To the knowledge of Maritime Bank's directors and executive
officers, during the period of Maritime Bank's ownership or operation of any of
its properties, there has not been any material release of Hazardous Material
in, on, under or affecting any such property.
(d) To the knowledge of Maritime Bank's executive officers, Maritime
Bank has not made or participated in any loan to any person who is subject to
any suit, claim, action, proceeding, investigation or notice, pending or
threatened, with respect to (i) any alleged noncompliance as to any property
securing such loan with any environmental law, rule or regulation, or (ii) the
release or the threatened release into the environment of any Hazardous Material
at a site owned, leased or operated by such person on any property securing such
loan.
(e) For purposes of this Section 3.15, the term "Hazardous Material"
means any hazardous waste, petroleum product, polychlorinated biphenyl,
chemical, pollutant, contaminant, pesticide, radioactive substance, or other
toxic material, or other material or substance (in each such case, other than
small quantities of such substances in retail containers) regulated under any
applicable environmental or public health statute, law, ordinance, rule or
regulation.
(f) No real property owned or leased by Maritime Bank as other real
estate owned ("OREO") or otherwise, or owned or controlled by Maritime Bank as a
trustee or fiduciary meets the statutory criteria of an "Establishment" as that
term is defined pursuant to Section 22a-134(3) of the General Statutes of
Connecticut.
3.16 RESERVES FOR LOSSES.
All reserves or other allowances for possible losses reflected in Maritime
Bank's most recent financial statements referred to in Section 3.6(a) hereof as
of December 31, 1997 and September 30, 1998 complied with all Laws and are
adequate under GAAP. Maritime Bank has not been notified by the FDIC, the
Connecticut Commissioner or Maritime Bank's independent auditor, in writing or
otherwise, that such reserves are inadequate or that the practices and policies
of Maritime Bank in
13
establishing such reserves and in accounting for delinquent and classified
assets generally fail to comply with applicable accounting or regulatory
requirements, or that the FDIC, the Connecticut Commissioner or Maritime Bank's
independent auditor believes such reserves to be inadequate or inconsistent with
the historical loss experience of Maritime Bank. Maritime Bank has previously
furnished ▇▇▇▇▇▇▇ with a complete list of all extensions of credit and OREO that
have been classified by any bank examiner (regulatory or internal) as other
loans specially mentioned, special mention, substandard, doubtful, loss,
classified or criticized, credit risk assets, concerned loans or words of
similar import. Maritime Bank agrees to update such list no less frequently than
monthly after the date of this Agreement until the earlier of the Closing Date
or the date that this Agreement is terminated in accordance with Section 8.1
hereof. All OREO held by Maritime Bank is being carried net of reserves at the
lower of cost or net realizable value.
3.17 PROPERTIES AND ASSETS.
Section 3.17 of the Maritime Bank Disclosure Schedule lists (i) all real
property owned by Maritime Bank; (ii) each real property lease, sublease or
installment purchase arrangement to which Maritime Bank is a party; (iii) a
description of each contract for the purchase, sale, or development of real
estate to which Maritime Bank is a party; and (iv) all items of Maritime Bank's
tangible personal property and equipment with a book value of $25,000 or more or
having an annual lease payment of $10,000 or more. Except for (a) items
reflected in Maritime Bank's financial statements as of December 31, 1997
referred to in Section 3.6(a) hereof, (b) exceptions to title that do not
interfere materially with Maritime Bank's use and enjoyment of owned or leased
real property (other than OREO), (c) liens for current real estate taxes not yet
delinquent, or being contested in good faith, properly reserved against (and
reflected on the financial statements referred to in Section 3.6(a) above), (d)
properties and assets sold or transferred in the ordinary course of business
consistent with past practices since December 31, 1997, and (e) items listed in
Section 3.17 of the Maritime Bank Disclosure Schedule, Maritime Bank has good
and, as to owned real property, marketable and insurable title to all its
properties and assets, reflected in the financial statements of Maritime Bank as
of December 31, 1997, free and clear of all liens, claims, charges and other
encumbrances. Maritime Bank, as lessee, has the right under valid and subsisting
leases to occupy, use and possess all property leased by it, and there has not
occurred under any such lease any material breach, violation or default by
Maritime Bank, and Maritime Bank has not experienced any material uninsured
damage or destruction with respect to such properties since December 31, 1997.
All properties and assets used by Maritime Bank are in good operating condition
and repair suitable for the purposes for which they are currently utilized and
comply in all material respects with all Laws relating thereto now in effect or
scheduled to come into effect. Maritime Bank enjoys peaceful and undisturbed
possession under all leases for the use of all property under which it is the
lessee, and all leases to which Maritime Bank is a party are valid and binding
obligations in accordance with the terms thereof. Maritime Bank is not in
material default with respect to any such lease, and there has occurred no
default by Maritime Bank or event which with the lapse of time or the giving of
notice, or both, would constitute a material default under any such lease. There
are no Laws, conditions of record, or other impediments which interfere with the
intended use by Maritime Bank of any of the property owned, leased, or occupied
by it.
3.18 INSURANCE.
Section 3.18 of the Maritime Bank Disclosure Schedule contains a true,
correct and complete list of all insurance policies and bonds maintained by
Maritime Bank, including the name of the insurer, the policy number, the type of
policy and any applicable deductibles, and all such insurance policies and bonds
(or other insurance policies and bonds that have, from time to time, in respect
of the nature of the risks insured against and amount of coverage provided, been
substantially similar in kind and amount to that customarily carried by parties
similarly situated who own properties and engage in businesses substantially
similar to that of Maritime Bank) are in full force and effect and have been in
full force and effect as of the times they were supposed to cover. As of the
date hereof, Maritime Bank has not received any notice of cancellation or
amendment of any such policy or bond or is in default
14
under any such policy or bond, no coverage thereunder is being disputed and all
claims thereunder have been filed in a timely fashion. The existing insurance
carried by Maritime Bank is and will continue to be, in respect of the nature of
the risks insured against and the amount of coverage provided, substantially
similar in kind and amount to that customarily carried by parties similarly
situated who own properties and engage in businesses substantially similar to
that of Maritime Bank, and is sufficient for compliance by Maritime Bank with
all requirements of Law and agreements to which Maritime Bank is subject or is
party. True, correct and complete copies of all such policies and bonds
reflected at Section 3.18 of the Maritime Bank Disclosure Schedule, as in effect
on the date hereof, have been delivered to ▇▇▇▇▇▇▇.
3.19 COMPLIANCE WITH APPLICABLE LAWS.
Maritime Bank has complied in all material respects with all Laws
applicable to it or to the operation of its business. Maritime Bank has not
received any notice of any alleged or threatened claim, violation, or liability
under any such Laws that has not heretofore been cured and for which there is no
remaining liability.
3.20 LOANS.
As of the date hereof:
(a) All loans owned by Maritime Bank, or in which Maritime Bank has an
interest, comply in all material respects with all Laws, including, but not
limited to, applicable usury statutes, underwriting and recordkeeping
requirements and the Truth in Lending Act, the Equal Credit Opportunity Act, and
the Real Estate Settlement Procedures Act, and other applicable consumer
protection statutes and the regulations thereunder.
(b) All loans owned by Maritime Bank, or in which Maritime Bank has an
interest, have been made or acquired by Maritime Bank in accordance with board
of director-approved loan policies and all of such loans are collectible, except
to the extent reserves have been made against such loans in Maritime Bank's
financial statements at September 30, 1998 referred to in Section 3.6(a) hereof.
Maritime Bank holds mortgages contained in its loan portfolio for its own
benefit to the extent of its interest shown therein; such mortgages evidence
liens having the priority indicated by their terms, subject, as of the date of
recordation or filing of applicable security instruments, only to such
exceptions as are discussed in attorneys' opinions regarding title or in title
insurance policies in the mortgage files relating to the loans secured by real
property or are not material as to the collectability of such loans; and all
loans owned by Maritime Bank are with full recourse to the borrowers, and
Maritime Bank has taken no action which would result in a waiver or negation of
any rights or remedies available against the borrower or guarantor, if any, on
any loan. All applicable remedies against all borrowers and guarantors are
enforceable except as may be limited by bankruptcy, insolvency, moratorium or
other similar laws affecting creditors' rights and except as may be limited by
the exercise of judicial discretion in applying principles of equity. Except as
set forth at Section 3.20 of the Maritime Bank Disclosure Schedule, all loans
purchased or originated by Maritime Bank and subsequently sold by Maritime Bank
have been sold without recourse to Maritime Bank and without any liability under
any yield maintenance or similar obligation. True, correct and complete copies
of loan delinquency reports as of September 30, 1998 prepared by Maritime Bank,
which reports include all loans delinquent or otherwise in default, have been
furnished to ▇▇▇▇▇▇▇. True, correct and complete copies of the currently
effective lending policies and practices of Maritime Bank also have been
furnished to ▇▇▇▇▇▇▇.
(c) Except as set forth at Section 3.20(c) of the Maritime Bank
Disclosure Schedule, each outstanding loan participation sold by Maritime Bank
was sold with the risk of non-payment of all or any portion of that underlying
loan to be shared by each participant (including Maritime Bank) proportionately
to the share of such loan represented by such participation without recourse of
such
15
other lender or participant to Maritime Bank for payment or repurchase of the
amount of such loan represented by the participation or liability under any
yield maintenance or similar obligation. Maritime Bank has properly fulfilled
its contractual responsibilities and duties in any loan in which it acts as the
lead lender or servicer and has complied with its duties as required under
applicable regulatory requirements.
(d) Maritime Bank has properly perfected or caused to be properly
perfected all security interests, liens, or other interests in any collateral
securing any loans made by it.
3.21 AFFILIATES.
Each director, executive officer and other person who is an "affiliate"
(for purposes of Rule 145 under the Securities Act of 1933, as amended (the
"Securities Act")) of Maritime Bank is listed at Section 3.21 of the Maritime
Bank Disclosure Schedule. Each director (including the President and Chief
Executive Officer) and any other affiliate of Maritime Bank who is not an
executive officer has delivered to ▇▇▇▇▇▇▇, concurrently with the execution of
this Agreement, the Maritime Bank Stockholder Agreement in the form attached
hereto as Exhibit C. The Maritime Bank Stockholder Agreement has been duly and
validly executed and delivered by each person that is a party thereto (assuming
due authorization, execution and delivery by ▇▇▇▇▇▇▇) and upon approval by the
Connecticut Commissioner, will constitute the valid and binding obligation of
such person, enforceable against such person in accordance with its terms,
except as enforcement may be limited by general principles of equity whether
applied in a court of law or a court of equity and by bankruptcy, insolvency and
similar laws affecting creditors' rights and remedies generally.
3.22 OWNERSHIP OF ▇▇▇▇▇▇▇ COMMON STOCK.
Except as set forth at Section 3.22 of the Maritime Bank Disclosure
Schedule, neither Maritime Bank nor any of its affiliates or associates (as
defined in the Securities Exchange Act of 1934, as amended (the "Exchange Act"))
(i) beneficially own, directly or indirectly, or (ii) is a party to any
agreement, arrangement or understanding for the purpose of acquiring, holding,
voting or disposing of, in each case, any shares of outstanding capital stock of
▇▇▇▇▇▇▇ (other than those agreements, arrangements or understandings
specifically contemplated hereby).
3.23 FAIRNESS OPINION.
Maritime Bank has received an opinion from O & Co. to the effect that, in
its opinion, the consideration to be paid to stockholders of Maritime Bank
hereunder is fair to such stockholders from a financial point of view (the
"Fairness Opinion"), and O & Co. has consented to the inclusion of the Fairness
Opinion in the Registration Statement, it being understood that O & Co. shall
have the right to review and comment upon the Registration Statement.
3.24 YEAR 2000 COMPLIANCE.
Maritime Bank has taken all reasonable steps necessary to address the
software, accounting and record keeping issues raised in order to be
substantially Year 2000 compliant on or before the end of 1999 and Maritime Bank
does not expect the future cost of addressing such issues to be material.
Maritime Bank has not received a rating of less than satisfactory from any bank
regulatory agency with respect to Year 2000 compliance. Maritime Bank is in
compliance with all guidelines provided by the FDIC and the Federal Financial
Institution's Examination Council regarding Year 2000 issues.
16
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, on behalf of itself and its wholly owned subsidiary, ▇▇▇▇▇▇▇ Bank,
hereby makes the following representations and warranties to Maritime Bank as
set forth in this Article IV, each of which is being relied upon by Maritime
Bank as a material inducement to enter into and perform this Agreement.
4.1 CORPORATE ORGANIZATION.
(a) ▇▇▇▇▇▇▇ is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware. ▇▇▇▇▇▇▇ has the corporate
power and corporate authority to own or lease all of its properties and assets
and to carry on its business as it is now being conducted, and is duly licensed
or qualified to do business in each jurisdiction in which the nature of the
business conducted by it or the character or location of the properties or
assets owned or leased by it makes such licensing or qualification necessary.
▇▇▇▇▇▇▇ is duly registered as a savings and loan holding company with the OTS
under HOLA. The Restated Certificate of Incorporation, as amended ("Certificate
of Incorporation"), and Bylaws, as amended ("Bylaws"), of ▇▇▇▇▇▇▇, copies of
which have previously been made available to Maritime Bank, are true, correct
and complete copies of such documents as in effect as of the date of this
Agreement.
(b) ▇▇▇▇▇▇▇ Bank is a federal savings bank chartered by the OTS under
the laws of the United States with its main office in the State of Connecticut.
▇▇▇▇▇▇▇ Bank has the corporate power and corporate authority to own or lease all
of its properties and assets and to carry on its business as it is now being
conducted, and is duly licensed or qualified to do business in each jurisdiction
in which the nature of the business conducted by it or the character or location
of the properties or assets owned or leased by it makes such licensing or
qualification necessary. The Charter and By-Laws of ▇▇▇▇▇▇▇ Bank, copies of
which have previously been made available to Maritime Bank, are true, correct
and complete copies of such documents as in effect as of the date of this
Agreement.
4.2 CAPITALIZATION.
(a) The authorized capital stock of ▇▇▇▇▇▇▇ consists of 50,000,000
shares of ▇▇▇▇▇▇▇ Common Stock, of which 37,943,394 shares were outstanding (net
of 410,030 treasury shares) at September 30, 1998 and 3,000,000 shares of serial
preferred stock, par value $.01 per share ("▇▇▇▇▇▇▇ Preferred Stock"), none of
which were outstanding at September 30, 1998. At such date, there were options
outstanding to purchase 2,357,590 shares of ▇▇▇▇▇▇▇ Common Stock. All of the
issued and outstanding shares of ▇▇▇▇▇▇▇ Common Stock have been duly authorized
and validly issued and are fully paid, nonassessable and free of preemptive
rights, with no personal liability attaching to the ownership thereof. As of the
date of this Agreement, except as set forth above, ▇▇▇▇▇▇▇ does not have and is
not bound by any outstanding subscriptions, options, warrants, calls,
commitments or agreements of any character calling for the purchase or issuance
of any shares of ▇▇▇▇▇▇▇ Common Stock or ▇▇▇▇▇▇▇ Preferred Stock or any other
equity security of ▇▇▇▇▇▇▇ or any securities representing the right to purchase
or otherwise receive any shares of ▇▇▇▇▇▇▇ Common Stock or ▇▇▇▇▇▇▇ Preferred
Stock, other than pursuant to the Rights Agreement. The shares of ▇▇▇▇▇▇▇ Common
Stock to be issued pursuant to the Merger are authorized and, at the Effective
Time, all such shares will be validly issued, fully paid, nonassessable and free
of preemptive rights, with no personal liability attaching to the ownership
thereof.
(b) The authorized capital stock of ▇▇▇▇▇▇▇ Bank consists of 2,000
shares of common stock, par value $.01 per share, 1000 of which are issued and
outstanding, and 1,000 shares of serial preferred stock, par value $.01 per
share, none of which are issued and outstanding. The outstanding shares of
common stock of ▇▇▇▇▇▇▇ Bank are owned by ▇▇▇▇▇▇▇ free and clear of all liens,
charges, encumbrances and security interests whatsoever, and all of such shares
are duly authorized
17
and validly issued and fully paid, nonassessable and free of preemptive rights,
with no personal liability attaching to ownership thereof.
4.3 AUTHORITY; NO VIOLATION.
(a) ▇▇▇▇▇▇▇ has full corporate power and corporate authority to
execute and deliver this Agreement and the Option Agreement and to consummate
the transactions contemplated hereby and thereby. The execution and delivery of
this Agreement and the Option Agreement and the consummation of the transactions
contemplated hereby and thereby have been duly and validly approved by the Board
of Directors of ▇▇▇▇▇▇▇. No other corporate proceedings on the part of ▇▇▇▇▇▇▇
are necessary to approve this Agreement or the Option Agreement or to consummate
the transactions contemplated hereby or thereby. This Agreement has been, and
the Option Agreement will be, duly and validly executed and delivered by ▇▇▇▇▇▇▇
and (assuming due authorization, execution and delivery by Maritime Bank) will
constitute valid and binding obligations of ▇▇▇▇▇▇▇, enforceable against ▇▇▇▇▇▇▇
in accordance with their terms, except as enforcement may be limited by general
principles of equity whether applied in a court of law or a court of equity and
by bankruptcy, insolvency and similar laws affecting creditors' rights and
remedies generally.
(b) ▇▇▇▇▇▇▇ Bank has full corporate power and authority to execute and
deliver this Agreement and the Bank Merger Agreement and to consummate the
transactions contemplated hereby and thereby. The execution and delivery of this
Agreement and the Bank Merger Agreement and the consummation of the transactions
contemplated hereby and thereby have been duly and validly approved by the Board
of Directors of ▇▇▇▇▇▇▇ Bank and by ▇▇▇▇▇▇▇ as the sole shareholder of ▇▇▇▇▇▇▇
Bank. All corporate proceedings on the part of ▇▇▇▇▇▇▇ Bank necessary to
consummate the transactions contemplated hereby and thereby will have been taken
prior to the Effective Time. This Agreement has been, and the Bank Merger
Agreement will be, duly and validly executed and delivered by ▇▇▇▇▇▇▇ Bank and
(assuming due authorization, execution and delivery by Maritime Bank) will
constitute valid and binding obligations of ▇▇▇▇▇▇▇ Bank, enforceable against
▇▇▇▇▇▇▇ Bank in accordance with their terms, except as enforcement may be
limited by general principles of equity whether applied in a court of law or a
court of equity and by bankruptcy, insolvency and similar laws affecting
creditors' rights and remedies generally.
(c) Neither the execution and delivery of this Agreement by ▇▇▇▇▇▇▇
and ▇▇▇▇▇▇▇ Bank, the Bank Merger Agreement by ▇▇▇▇▇▇▇ Bank, or the Option
Agreement by ▇▇▇▇▇▇▇, nor the consummation by ▇▇▇▇▇▇▇ or ▇▇▇▇▇▇▇ Bank, as the
case may be, of the transactions contemplated hereby or thereby, nor compliance
by ▇▇▇▇▇▇▇ or ▇▇▇▇▇▇▇ Bank with any of the terms or provisions hereof or
thereof, will (i) violate any provision of the Certificate of Incorporation or
Bylaws of ▇▇▇▇▇▇▇ or the Charter or By-Laws of ▇▇▇▇▇▇▇ Bank, as the case may be,
or (ii) assuming that the consents and approvals referred to in Section 4.4
hereof are duly obtained, (x) violate any Laws applicable to Webster, Webster
Bank or any of their respective properties or assets, or (y) violate, conflict
with, result in a breach of any provision of or the loss of any benefit under,
constitute a default (or an event which, with notice or lapse of time, or both,
would constitute a default) under, result in the termination of or a right of
termination or cancellation under, accelerate the performance required by, or
result in the creation of any lien, pledge, security interest, charge or other
encumbrance upon any of the respective properties or assets of ▇▇▇▇▇▇▇ or
▇▇▇▇▇▇▇ Bank under, any of the terms, conditions or provisions of any note,
bond, mortgage, indenture, deed of trust, license, lease, agreement or other
instrument or obligation to which ▇▇▇▇▇▇▇ or ▇▇▇▇▇▇▇ Bank is a party, or by
which they or any of their respective properties or assets may be bound or
affected.
4.4 CONSENTS, APPROVALS AND REPORTS.
(a) Except for (i) the filing of applications and notices, as
applicable, as to the Merger with the OTS under the HOLA and the Bank Merger Act
and approval of such applications and notices, (ii) the filing and approval of
the State Banking Approvals, (iii) the filing with the Connecticut
18
Commissioner of an acquisition statement pursuant to Section 36a-184 of the
Connecticut Banking Law prior to the acquisition of more than 10% of the
Maritime Bank Common Stock pursuant to the Option Agreement, if not exempt, (iv)
the filing of the Maritime Bank Stockholder Agreement with the Connecticut
Commissioner and the approval of such agreement, (v) the filing with the SEC of
the Registration Statement, (vi) the approval of this Agreement by the requisite
vote of the shareholders of Maritime Bank, (vii) the filings with the OTS and
the Connecticut Secretary of State required in connection with the Bank Merger
Agreement, (viii) such filings, authorizations and approvals as are required to
be made or obtained under the securities or "Blue Sky" laws of various states or
with The Nasdaq Stock Market, Inc. (or such other exchange as may be applicable)
in connection with the issuance of the shares of ▇▇▇▇▇▇▇ Common Stock pursuant
to this Agreement, and (ix) any necessary notices, filings, authorizations,
approvals or consents of third parties, no consents or approvals of or filings
or registrations with any Governmental Entity or third party are necessary in
connection with (1) the execution and delivery by ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ Bank of
this Agreement, (2) the execution and delivery by ▇▇▇▇▇▇▇ Bank of the Bank
Merger Agreement, (3) the execution and delivery by ▇▇▇▇▇▇▇ of the Option
Agreement, (4) the consummation by ▇▇▇▇▇▇▇ of the transactions contemplated
hereby, and (5) the consummation by ▇▇▇▇▇▇▇ Bank of the Merger, except, in each
case, for such consents, approvals or filings, the failure of which to obtain
will not have a Material Adverse Effect on the ability of Maritime Bank to
consummate the transactions contemplated hereby or thereby.
(b) ▇▇▇▇▇▇▇ hereby represents to Maritime Bank that it has no
knowledge of any reason why approval or effectiveness of any of the
applications, notices or filings referred to in Section 4.4(a) hereof cannot be
obtained or granted on a timely basis.
(c) ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ Bank have filed all reports, registrations and
statements, together with any amendments required to be made with respect
thereto, that they were required to file since December 31, 1994, with (i) the
OTS, (ii) the State Regulators, (iii) the SEC and (iv) the Regulatory Agencies.
Except for normal examinations conducted by a Regulatory Agency in the regular
course of the business of ▇▇▇▇▇▇▇ and its Subsidiaries, no Governmental Entity
is conducting, or has conducted, any proceeding or investigation into the
business or operations of ▇▇▇▇▇▇▇ since December 31, 1994.
4.5 FINANCIAL STATEMENTS; EXCHANGE ACT FILINGS; BOOKS AND RECORDS.
▇▇▇▇▇▇▇ has previously delivered to Maritime Bank true, correct and
complete copies of (a) the consolidated statements of condition of ▇▇▇▇▇▇▇ and
its Subsidiaries as of December 31 for the fiscal years 1996 and 1997 and the
related consolidated statements of income, comprehensive income, shareholders'
equity and cash flows for the fiscal years ended 1995 through 1997, inclusive,
as reported in ▇▇▇▇▇▇▇'▇ Current Report on Form 8-K filed with the SEC on July
23, 1998 under the Exchange Act, in each case accompanied by the audit report of
KPMG LLP, independent public accountants with respect to ▇▇▇▇▇▇▇, and (b) the
unaudited consolidated statement of condition of ▇▇▇▇▇▇▇ and its Subsidiaries as
of September 30, 1998 and the related comparative unaudited statements of
operations and cash flows for the nine month periods ended September 30, 1997
and 1998. The financial statements referred to in this Section 4.5 (including
the related notes, where applicable) fairly present, and the financial
statements referred to in Section 6.8 hereof will fairly present (subject, in
the case of the unaudited statements, to recurring audit adjustments normal in
nature and amount), the results of the consolidated operations and consolidated
financial condition of ▇▇▇▇▇▇▇ and its Subsidiaries for the respective fiscal
periods or as of the respective dates therein set forth; each of such statements
(including the related notes, where applicable) comply, and the financial
statements referred to in Section 6.8 hereof will comply, with applicable
accounting requirements and with the published rules and regulations of the SEC
with respect thereto; and each of such statements (including the related notes,
where applicable) has been, and the financial statements referred to in Section
6.8 hereof will be, prepared in accordance with GAAP during the periods
involved, except as indicated in such statements or in the notes thereto or, in
the case of unaudited statements, as permitted by Form 10-▇. ▇▇▇▇▇▇▇'▇ Annual
Report on Form 10-K for the fiscal year ended December 31, 1997 and all
subsequently filed
19
reports under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act comply in
all material respects with the appropriate requirements for such reports under
the Exchange Act, and ▇▇▇▇▇▇▇ has previously delivered or made available to
Maritime Bank true, correct and complete copies of such reports. The books and
records of ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ Bank have been, and are being, maintained in all
material respects in accordance with GAAP and any other applicable legal and
accounting requirements.
4.6 ABSENCE OF CERTAIN CHANGES OR EVENTS.
Except as disclosed in ▇▇▇▇▇▇▇'▇ filings with the SEC on any of Forms 10-K,
10-Q or 8-K during 1998, true, correct and complete copies of which have
previously been delivered to Maritime Bank, since December 31, 1997, no event
has occurred which has had, individually or in the aggregate, a Material Adverse
Effect on ▇▇▇▇▇▇▇.
4.7 OWNERSHIP OF MARITIME BANK COMMON STOCK; AFFILIATES AND ASSOCIATES.
Except as contemplated by this Agreement, neither ▇▇▇▇▇▇▇ nor any of its
affiliates or associates (as defined in the Exchange Act) (i) beneficially own,
directly or indirectly, or (ii) is a party to any agreement, arrangement or
understanding for the purpose of acquiring, holding, voting or disposing of, in
each case, more than five percent of the outstanding capital stock of Maritime
Bank, excluding the shares of Maritime Bank Common Stock issuable pursuant to
the Option Agreement to be executed subsequent to the execution of the
Agreement.
4.8 EMPLOYEE BENEFIT PLANS.
▇▇▇▇▇▇▇ has heretofore made available for inspection, or delivered (if
requested) to Maritime Bank true, correct and complete copies of each employee
benefit plan arrangement or agreement that is maintained as of the date of this
Agreement (the "▇▇▇▇▇▇▇ Plans") by ▇▇▇▇▇▇▇ or any of its Subsidiaries. No
"accumulated funding deficiency" as defined in Section 302(a)(2) of ERISA or
Section 412 of the Code, whether or not waived, and no "unfunded current
liability" as determined under Section 412(l) of the Code exists with respect to
any ▇▇▇▇▇▇▇ Plan. The ▇▇▇▇▇▇▇ Plans are in compliance in all material respects
with the applicable requirements of ERISA and the Code.
4.9 AGREEMENTS WITH REGULATORY AGENCIES.
Neither ▇▇▇▇▇▇▇ nor any of its affiliates is subject to any
cease-and-desist or other order issued by, or is a party to any written
agreement, consent agreement or memorandum of understanding with, or has adopted
any board resolutions at the request of any Governmental Entity that restricts
the conduct of its business or that in any manner relates to its capital
adequacy, its credit policies, its management or its business, nor has ▇▇▇▇▇▇▇,
nor ▇▇▇▇▇▇▇ Bank been advised by any Governmental Entity that it is considering
issuing or requesting any Regulatory Agreement.
4.10 YEAR 2000 COMPLIANCE.
▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ Bank have taken all reasonable steps necessary to
address the software, accounting and record keeping issues raised in order to be
substantially Year 2000 compliant on or before the end of 1999 and ▇▇▇▇▇▇▇ does
not expect the future cost of addressing such issues to be material except as
described in ▇▇▇▇▇▇▇'▇ Annual Report on Form 10-K for the fiscal year ended
December 31, 1997. Neither ▇▇▇▇▇▇▇ nor ▇▇▇▇▇▇▇ Bank has received a rating of
less than satisfactory from any bank regulatory agency with respect to Year 2000
compliance. ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ Bank are in compliance with all guidelines
provided by the OTS and the Federal Financial Institution's Examination Council
regarding Year 2000 issues.
20
ARTICLE V
COVENANTS RELATING TO CONDUCT OF BUSINESS
5.1 COVENANTS OF MARITIME BANK.
During the period from the date of this Agreement and continuing until the
Effective Time, except as expressly contemplated or permitted by this Agreement,
the Bank Merger Agreement or the Option Agreement or with the prior written
consent of ▇▇▇▇▇▇▇, Maritime Bank shall carry on its businesses in the ordinary
course consistent with past practices and consistent with prudent banking
practices. Maritime Bank will use its reasonable efforts to (x) preserve its
business organization intact, (y) keep available to itself and ▇▇▇▇▇▇▇ the
present services of the employees of Maritime Bank and (z) preserve for itself
and ▇▇▇▇▇▇▇ the goodwill of the customers of Maritime Bank and others with whom
business relationships exist. Without limiting the generality of the foregoing,
and except as set forth in the Maritime Bank Disclosure Schedule or as otherwise
contemplated by this Agreement or consented to by ▇▇▇▇▇▇▇ in writing, Maritime
Bank shall not:
(a) declare or pay any dividends on, or make other distributions in
respect of, any of its capital stock (except for the payment of regular
quarterly cash dividends by Maritime Bank on the Maritime Bank Common Stock in
accordance with Section 5.1(a) of the Maritime Bank Disclosure Schedule with
declaration, record and payment dates corresponding to the quarterly dividends
paid by Maritime Bank during its fiscal year ended December 31, 1997); provided,
however, that under no circumstances shall Maritime Bank declare, set aside or
pay any dividends if it would result in the holders of Maritime Bank Common
Stock receiving more than four dividend payments in either of 1998 or 1999, when
considered with anticipated ▇▇▇▇▇▇▇ dividends based on past practice, nor shall
Maritime Bank be prohibited from declaring, setting aside or paying dividends
consistent herewith if the Closing Date is such that holders of Maritime Bank
Common Stock would receive fewer than four dividends in fiscal 1998, when
considered with anticipated ▇▇▇▇▇▇▇ dividends based on past practice, and it
being further understood that the parties hereto intend for Maritime Bank to pay
its regular quarterly cash dividends to stockholders as to any completed fiscal
quarter prior to the Effective Time;
(b) (i) split, combine or reclassify any shares of its capital stock
or issue, authorize or propose the issuance of any other securities in respect
of, in lieu of or in substitution for shares of its capital stock except upon
the exercise or fulfillment of rights or options issued or existing pursuant to
the Maritime Bank Stock Plan in accordance with their present terms, all to the
extent outstanding and in existence on the date of this Agreement, and except
pursuant to the Option Agreement, or (ii) repurchase, redeem or otherwise
acquire (except for the acquisition of Trust Account Shares and DPC Shares, as
such terms are defined in Section 1.4(c) hereof), any shares of the capital
stock of Maritime Bank, or any securities convertible into or exercisable for
any shares of the capital stock of Maritime Bank;
(c) issue, deliver or sell, or authorize or propose the issuance,
delivery or sale of, any shares of its capital stock or any securities
convertible into or exercisable for, or any rights, warrants or options to
acquire, any such shares, or enter into any agreement with respect to any of the
foregoing, other than (i) the issuance of Maritime Bank Common Stock pursuant to
stock options or similar rights to acquire Maritime Bank Common Stock granted
pursuant to the Maritime Bank Stock Plan and outstanding prior to the date of
this Agreement, in each case in accordance with their present terms and (ii)
pursuant to the Option Agreement;
(d) amend its Certificate of Incorporation, Bylaws or other similar
governing documents;
(e) authorize or permit any of its officers, directors, employees or
agents to, directly or indirectly, solicit, initiate or encourage any inquiries
relating to, or the making of any proposal from, hold substantive discussions or
negotiations with or provide any information to, any person, entity or
21
group (other than ▇▇▇▇▇▇▇) concerning any Acquisition Transaction (as defined
below). Notwithstanding the foregoing, Maritime Bank may provide information in
connection with a possible Acquisition Transaction if the Board of Directors of
Maritime Bank following receipt of written advice of counsel, reasonably
determines in the exercise of its fiduciary duty that such information must be
furnished. Maritime Bank shall promptly communicate to ▇▇▇▇▇▇▇ the material
terms of any proposal, whether written or oral, which it may receive in respect
of any Acquisition Transaction and whether it is providing information in
connection with, or which may lead to, an Acquisition Transaction with a third
party. Maritime Bank will promptly cease and cause to be terminated any existing
activities, discussions or negotiations previously conducted with any parties
other than ▇▇▇▇▇▇▇ with respect to any of the foregoing. As used in this
Agreement, "Acquisition Transaction" shall mean any offer, proposal or
expression of interest relating to (i) any tender or exchange offer, (ii)
merger, consolidation or other business combination involving Maritime Bank, or
(iii) the acquisition in any manner of a substantial equity interest in, or a
substantial portion of the assets and/or liabilities, out of the ordinary course
of business, of, Maritime Bank other than the transactions contemplated or
permitted by this Agreement, the Bank Merger Agreement and the Option Agreement;
(f) make capital expenditures aggregating in excess of $25,000;
(g) enter into any new line of business;
(h) acquire or agree to acquire, by merging or consolidating with, or
by purchasing an equity interest in or the assets of, or by any other manner,
any business or any corporation, partnership, association or other business
organization or division thereof or otherwise acquire any assets, other than in
connection with foreclosures, settlements in lieu of foreclosure or troubled
loan or debt restructurings, or in the ordinary course of business consistent
with prudent banking practices;
(i) take any action that is intended or may reasonably be expected to
result in any of its representations and warranties set forth in this Agreement
being or becoming untrue or in any of the conditions to the Merger set forth in
Article VII not being satisfied, or in a violation of any provision of this
Agreement, the Bank Merger Agreement or the Option Agreement, except, in every
case, as may be required by applicable law;
(j) change its methods of accounting in effect at December 31, 1997
except as required by changes in GAAP or regulatory accounting principles as
concurred to by ▇▇▇▇▇▇▇'▇ independent auditors;
(k) (i) except as required by applicable law or to maintain
qualification pursuant to the Code, adopt, amend, renew or terminate any Plan or
any other agreement, arrangement, plan or policy relating to one or more of its
current or former directors, officers, employees or independent contractors,
(ii) increase in any manner the compensation of any employee or director or pay
any benefit not required by any plan or agreement as in effect as of the date
hereof (including, without limitation, the granting of stock options, stock
appreciation rights, restricted stock, stock units or performance units or
shares), (iii) enter into, modify or renew any contract, agreement, commitment
or arrangement providing for the payment to any director, officer or employee of
compensation or benefits, (iv) hire any new employee at an annual compensation
in excess of $20,000, (v) pay expenses of any employees or directors for
attending conventions or similar meetings which conventions or meetings are held
after the date hereof, (vi) promote to a rank of vice president or more senior
any employee, (vii) pay any retention or other bonuses, or any severance, to any
employee, (viii) make any contribution to any Plan that is subject to Title IV
of ERISA in excess of the amount required to satisfy applicable minimum funding
requirements under ERISA and the Code, or (ix) make any nondeductible
contribution to any Plan;
22
(l) incur any indebtedness for borrowed money, assume, guarantee,
endorse or otherwise as an accommodation become responsible for the obligations
of any other individual, corporation or other entity;
(m) sell, purchase, enter into a lease, relocate, open or close any
banking or other office, or file an application pertaining to such action with
any Governmental Entity;
(n) make any equity investment or commitment to make such an
investment in real estate or in any real estate development project, other than
in connection with foreclosure, settlements in lieu of foreclosure, or troubled
loan or debt restructuring, in the ordinary course of business consistent with
past banking practices;
(o) make any new loans to, modify the terms of any existing loan to,
or engage in any other transactions (other than routine banking transactions)
with, any Affiliated Person of Maritime Bank;
(p) make any investment, or incur deposit liabilities, other than in
the ordinary course of business consistent with past practices, including
deposit pricing, and which would not change the risk profile of Maritime Bank
based on its existing deposit and lending policies or make any equity
investments;
(q) purchase any loans or sell, purchase or lease any real property,
except for the sale of real estate that is the subject of a casualty loss or
condemnation or the sale of OREO on a basis consistent with past practices;
(r) originate (i) any loans except in accordance with existing
Maritime Bank lending policies, (ii) commercial business loans in excess of
$250,000, (iii) unsecured consumer loans in excess of $10,000, (iv) commercial
real estate first mortgage loans in excess of $250,000 as to any loan or
$500,000 in the aggregate as to related loans, or loans to related persons, or
(v) land acquisition loans to borrowers who intend to construct a residence on
such land in excess of the lesser of 75% of the appraised value of such land or
$100,000, except in each case for loans for which written applications have been
received by Maritime Bank as of the date hereof and as set forth in Section
5.1(r) of the Maritime Bank Disclosure Schedule; provided, however, that (x)
Maritime Bank may renew existing lines of credit upon substantially the same
terms and conditions in accordance with existing Maritime Bank lending policies
without prior consultation with ▇▇▇▇▇▇▇, and (y) if Maritime Bank submits to
▇▇▇▇▇▇▇ a written proposal for an exception to the lending limitations set forth
in this Section 5.1(r), unless ▇▇▇▇▇▇▇ notifies Maritime Bank within five
business days after receipt of the written proposal, ▇▇▇▇▇▇▇ shall be deemed to
have consented to the proposal (for purposes of this provision, notice shall be
given in accordance with Section 5.1(r) of the Maritime Bank Disclosure
Schedule;
(s) make any investments in any equity or derivative securities or
engage in any forward commitment, futures transaction, financial options
transaction, hedging or arbitrage transaction or covered asset trading
activities or make any investments in any investment security with a maturity of
greater than one year;
(t) sell or purchase any mortgage loan servicing rights; or
(u) agree or commit to do any of the actions set forth in (a) - (t)
above.
The consent of ▇▇▇▇▇▇▇ to any action by Maritime Bank that is not permitted by
any of the preceding paragraphs shall be evidenced by a writing signed by the
Chairman, Chief Executive Officer and President or any Executive Vice President
of ▇▇▇▇▇▇▇.
23
5.2 COVENANTS OF ▇▇▇▇▇▇▇.
During the period from the date of this Agreement and continuing until the
Effective Time, except as expressly contemplated or permitted by this Agreement
or the Option Agreement or with Maritime Bank's prior written consent, ▇▇▇▇▇▇▇
shall not, and shall not permit ▇▇▇▇▇▇▇ Bank to:
(a) take any action that will result in (i) any of ▇▇▇▇▇▇▇'▇
representations and warranties set forth in this Agreement being or becoming
untrue, unless the failure of such representations or warranties to be true
would not, individually or in the aggregate, have a Material Adverse Effect on
▇▇▇▇▇▇▇, or (ii) any of the conditions to the Merger set forth in Article VII
not being satisfied or in a violation of any provision of this Agreement, the
Bank Merger Agreement or the Option Agreement, except, in every case, as may be
required by applicable law; or
(b) take any other action that would materially adversely affect the
ability of ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ Bank to consummate the transactions contemplated
by this Agreement.
5.3 MERGER COVENANTS.
(a) Notwithstanding that Maritime Bank believes that it has
established all reserves and taken all provisions for possible loan losses
required by GAAP and applicable laws, rules and regulations, Maritime Bank
recognizes that ▇▇▇▇▇▇▇ may have adopted different loan, accrual and reserve
policies (including loan classifications and levels of reserves for possible
loan losses). In that regard, and in general, from and after the date of this
Agreement to the Effective Time, Maritime Bank and ▇▇▇▇▇▇▇ shall consult and
cooperate with each other in order to formulate the plan of integration for the
Merger, including, among other things, with respect to conforming, based upon
such consultation, Maritime Bank's loan, accrual and reserve policies to those
policies of ▇▇▇▇▇▇▇ to the extent appropriate, provided, that any change in
Maritime Bank's policies in connection with such matters need not be effected
until the parties receive all necessary governmental and stockholder approvals
and consents to consummate the transactions contemplated hereby.
(b) If it becomes necessary under Nasdaq rules or applicable laws to
obtain ▇▇▇▇▇▇▇ shareholder approval of this Agreement, the Merger or the other
transactions contemplated hereby, ▇▇▇▇▇▇▇ shall take all steps necessary to
obtain the approval of its shareholders as promptly as possible. In connection
therewith, ▇▇▇▇▇▇▇ shall take all steps necessary to duly call, give notice and
convene a meeting of its shareholders for such purpose.
5.4 COMPLIANCE WITH ANTITRUST LAWS.
Each of ▇▇▇▇▇▇▇ and Maritime Bank shall use its reasonable best efforts to
resolve objections, if any, which may be asserted with respect to the Merger
under antitrust laws, including, without limitation, the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act.
In the event a suit is threatened or instituted challenging the Merger as
violative of antitrust laws, each of ▇▇▇▇▇▇▇ and Maritime Bank shall use its
reasonable best efforts to avoid the filing of, or resist or resolve such suit.
▇▇▇▇▇▇▇ and Maritime Bank shall use their reasonable best efforts to take such
action as may be required: (a) by the Antitrust Division of the Department of
Justice or the Federal Trade Commission in order to resolve such objections as
either of them may have to the Merger under antitrust laws, or (b) by any
federal or state court of the United States, in any suit brought by a private
party or governmental entity challenging the Merger as violative of antitrust
laws, in order to avoid the entry of, or to effect the dissolution of, any
injunction, temporary restraining order, or other order which has the effect of
preventing the consummation of the Merger. Reasonable best efforts shall not
include, among other things and to the extent ▇▇▇▇▇▇▇ so desires, the
willingness of ▇▇▇▇▇▇▇ to accept an order agreeing to the divestiture, or the
holding separate, of any assets of ▇▇▇▇▇▇▇ or Maritime Bank.
24
ARTICLE VI
ADDITIONAL AGREEMENTS
6.1 REGULATORY MATTERS.
(a) Upon the execution and delivery of this Agreement, ▇▇▇▇▇▇▇ and
Maritime Bank (as to information to be included therein pertaining to Maritime
Bank) shall promptly cause to be prepared and filed with the SEC the
Registration Statement for the purpose of registering the ▇▇▇▇▇▇▇ Common Stock
to be issued in the Merger. ▇▇▇▇▇▇▇ and Maritime Bank shall use their reasonable
best efforts to have the Registration Statement declared effective by the SEC as
soon as possible after the filing. The parties shall cooperate in responding to
and considering any questions or comments from the SEC staff regarding the
information contained in the Registration Statement. If at any time after the
Registration Statement is filed with the SEC, and prior to the Closing Date, any
event relating to Maritime Bank is discovered which should be set forth in an
amendment of, or a supplement to, the Registration Statement (including, without
limitation, any change in the Fairness Opinion), Maritime Bank shall promptly
inform ▇▇▇▇▇▇▇ and shall furnish ▇▇▇▇▇▇▇ with all necessary information relating
to such event whereupon ▇▇▇▇▇▇▇ shall promptly cause an appropriate amendment to
the Registration Statement to be filed with the SEC. Upon the effectiveness of
such amendment, Maritime Bank (if prior to the meeting of shareholders pursuant
to Section 6.3 hereof) will take all necessary action as promptly as practicable
to permit an appropriate amendment or supplement to be transmitted to its
shareholders entitled to vote at such meeting. ▇▇▇▇▇▇▇ shall also use reasonable
efforts to obtain all necessary state securities law or "Blue Sky" permits and
approvals required to carry out the transactions contemplated by this Agreement
and the Bank Merger Agreement and Maritime Bank shall furnish all information
concerning Maritime Bank and the holders of Maritime Bank Common Stock as may be
reasonably requested in connection with any such action.
(b) The parties hereto shall cooperate with each other and use their
reasonable best efforts to promptly prepare and file all necessary
documentation, to effect all applications, notices, petitions and filings, and
to obtain as promptly as practicable all permits, consents, approvals and
authorizations of all third parties and Governmental Entities which are
necessary or advisable to consummate the transactions contemplated by this
Agreement (including without limitation the Merger). Maritime Bank and ▇▇▇▇▇▇▇
shall have the right to review in advance, and to the extent practicable each
will consult the other on, in each case subject to applicable laws relating to
the exchange of information, all the information relating to Maritime Bank or
▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ Bank, as the case may be, which appears in any filing made
with, or written materials submitted to, any third party or any Governmental
Entity in connection with the transactions contemplated by this Agreement;
provided, however, that nothing contained herein shall be deemed to provide
either party with a right to review any information provided to any Governmental
Entity on a confidential basis in connection with the transactions contemplated
hereby. In exercising the foregoing right, each of the parties hereto shall act
reasonably and as promptly as practicable. The parties hereto agree that they
will consult with each other with respect to the obtaining of all permits,
consents, approvals and authorizations of all third parties and Governmental
Entities necessary or advisable to consummate the transactions contemplated by
this Agreement and each party will keep the other apprised of the status of
matters relating to contemplation of the transactions contemplated herein.
(c) Maritime Bank shall, upon request, furnish ▇▇▇▇▇▇▇ with all
information concerning Maritime Bank and its directors, officers and
shareholders and such other matters as may be reasonably necessary or advisable
in connection with the Registration Statement, the Proxy Statement/Prospectus or
any other statement, filing, notice or application made by or on behalf of
▇▇▇▇▇▇▇ or ▇▇▇▇▇▇▇ Bank to any Governmental Entity in connection with the Merger
or the other transactions contemplated by this Agreement.
(d) ▇▇▇▇▇▇▇ and Maritime Bank shall promptly advise each other upon
receiving any communication from any Governmental Entity whose consent or
approval is required for
25
consummation of the transactions contemplated by this Agreement which causes
such party to believe that there is a reasonable likelihood that any Requisite
Regulatory Approval (as defined in Section 7.1(c) hereof) will not be obtained
or that the receipt of any such approval will be materially delayed.
6.2 ACCESS TO INFORMATION.
(a) Upon reasonable notice and subject to applicable Laws relating to
the exchange of information, Maritime Bank shall accord to the officers,
employees, accountants, counsel and other representatives of ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇
Bank access, during normal business hours during the period prior to the
Effective Time, to all its properties, books, contracts, commitments and records
and, during such period, Maritime Bank shall make available to ▇▇▇▇▇▇▇ (i) a
copy of each report, schedule, registration statement and other document filed
or received by it during such period pursuant to the requirements of federal
securities laws or federal or state banking laws and (ii) all other information
concerning its business, properties and personnel as ▇▇▇▇▇▇▇ may reasonably
request. ▇▇▇▇▇▇▇ shall receive notice of all meetings of the Maritime Bank's
Board of Directors and any committees thereof, and of any management committees
(in all cases, at least as timely as all Maritime Bank representatives to such
meetings are required to be provided notice). Up to two representatives of
▇▇▇▇▇▇▇ shall be permitted to attend all meetings of the Board of Directors
(except for the portion of such meetings which relate to the Merger or an
Acquisition Transaction or such other matters deemed confidential ("Confidential
Matters") of Maritime Bank) and such meetings of committees of the Board of
Directors and management of Maritime Bank which ▇▇▇▇▇▇▇ desires. ▇▇▇▇▇▇▇ will
hold all such information in confidence to the extent required by, and in
accordance with, the provisions of the confidentiality agreement which ▇▇▇▇▇▇▇
entered into with Maritime Bank and O& Co. dated August 18, 1998 (the
"Confidentiality Agreement").
(b) Upon reasonable notice and subject to applicable Laws relating to
the exchange of information, ▇▇▇▇▇▇▇ shall, and shall cause ▇▇▇▇▇▇▇ Bank to,
afford to the officers, employees, accountants, counsel and other
representatives of Maritime Bank, access, during normal business hours during
the period prior to the Effective Time, to such information regarding ▇▇▇▇▇▇▇ as
shall be reasonably necessary for Maritime Bank to fulfill its obligations
pursuant to this Agreement or which may be reasonably necessary for Maritime
Bank to confirm that the representations and warranties of ▇▇▇▇▇▇▇ contained
herein are true and correct and that the covenants of ▇▇▇▇▇▇▇ contained herein
have been performed in all material respects. Maritime Bank will hold all such
information in confidence to the extent required by, and in accordance with, the
provisions of the Confidentiality Agreement.
(c) No investigation by either of the parties or their respective
representatives shall affect the representations and warranties of the other set
forth herein.
(d) Maritime Bank shall provide ▇▇▇▇▇▇▇ with true, correct and
complete copies of all financial and other information provided to directors of
Maritime Bank in connection with meetings of their Boards of Directors or
committees thereof, which information shall be provided to ▇▇▇▇▇▇▇ concurrently
with its provision to the directors of Maritime Bank.
(e) Maritime Bank acknowledges that ▇▇▇▇▇▇▇ is in or may be in the
process of acquiring other businesses, banks and financial institutions and that
in connection with such acquisitions, information concerning Maritime Bank may
be required to be included in the registration statements, if any, for the sale
of securities of ▇▇▇▇▇▇▇ or in SEC reports in connection with such acquisitions.
Maritime Bank agrees to provide ▇▇▇▇▇▇▇ with any information, certificates,
documents or other materials about Maritime Bank as are reasonably necessary to
be included in such other SEC reports or registration statements, including
registration statements which may be filed by ▇▇▇▇▇▇▇ prior to the Effective
Time. Maritime Bank shall use its reasonable best efforts to cause its attorneys
and accountants to provide ▇▇▇▇▇▇▇ and any underwriters for ▇▇▇▇▇▇▇ with any
consents, comfort letters, opinion letters, reports or information which are
necessary to complete the
26
registration statements and applications for any such acquisition or issuance of
securities. ▇▇▇▇▇▇▇ shall reimburse Maritime Bank for reasonable expenses thus
incurred by Maritime Bank should the transactions contemplated by this Agreement
be terminated for any reason.
6.3 SHAREHOLDER MEETING.
Maritime Bank shall take all steps necessary to duly call, give notice of,
convene and hold the Special Meeting of its shareholders within 42 days after
the Registration Statement becomes effective for the purpose of voting upon the
approval of this Agreement, the Merger and the other transactions contemplated
hereby. Management and the Board of Directors of Maritime Bank shall recommend
to Maritime Bank's shareholders approval of this Agreement, the Merger, and the
other transactions contemplated hereby, together with any matters incident
thereto, and shall oppose any third party proposal or other action that is
inconsistent with this Agreement or the consummation of the transactions
contemplated hereby, unless the Board of Directors of Maritime Bank reasonably
determines, based upon the written advice of Maritime Bank's legal counsel, that
such recommendation or opposition, as the case may be, would constitute a breach
of the exercise of its fiduciary duty. Maritime Bank and ▇▇▇▇▇▇▇ shall
coordinate and cooperate with respect to the foregoing matters.
6.4 LEGAL CONDITIONS TO MERGER.
Each of ▇▇▇▇▇▇▇ and Maritime Bank shall use their reasonable best efforts
(a) to take, or cause to be taken, all actions necessary, proper or advisable to
comply promptly with all legal requirements which may be imposed on such party
with respect to the Merger and, subject to the conditions set forth in Article
VII hereof, to consummate the transactions contemplated by this Agreement and
(b) to obtain (and to cooperate with the other party to obtain) any consent,
authorization, order or approval of, or any exemption by, any Governmental
Entity and any other third party which is required to be obtained by Maritime
Bank or ▇▇▇▇▇▇▇ in connection with the Merger and the other transactions
contemplated by this Agreement.
6.5 STOCK EXCHANGE LISTING.
▇▇▇▇▇▇▇ shall cause the shares of ▇▇▇▇▇▇▇ Common Stock to be issued in the
Merger and pursuant to options referred to herein to be approved for quotation
on Nasdaq (or such other exchange on which the ▇▇▇▇▇▇▇ Common Stock has become
listed, or approved for listing) prior to or at the Effective Time.
6.6 EMPLOYEES; EMPLOYMENT AND OTHER AGREEMENTS.
(a) To the extent permissible under the applicable provisions of the
Code and ERISA, for purposes of crediting periods of service for eligibility to
participate and vesting, but not for benefit accrual purposes, under the ▇▇▇▇▇▇▇
Bank 401(k) Plan and the ▇▇▇▇▇▇▇ Bank Employee Stock Ownership Plan (but not
under the ▇▇▇▇▇▇▇ Bank Defined Benefit Pension Plan), in the case of individuals
who are employees of Maritime Bank at the Effective Time and who become
employees of ▇▇▇▇▇▇▇ Bank, periods of service with Maritime Bank before the
Effective Time shall be treated as if such service had been with ▇▇▇▇▇▇▇ Bank.
Individuals who are employees of Maritime Bank at the Effective Time and who
become employees of ▇▇▇▇▇▇▇ Bank shall be eligible to participate in the ▇▇▇▇▇▇▇
Bank Defined Benefit Pension Plan and in any other employee benefit plan (within
the meaning of ERISA Section 3(3)) maintained by ▇▇▇▇▇▇▇ Bank on the same terms
and conditions as apply generally to other employees of ▇▇▇▇▇▇▇ Bank.
(b) ▇▇▇▇▇▇▇ Bank will pay severance in accordance with Maritime Bank's
written severance policies, true, correct and complete copies of which are set
forth at Section 6.6(b) of the Maritime Bank Disclosure Schedule.
27
(c) ▇▇▇▇▇▇▇ will cause ▇▇▇▇▇▇▇ Bank to offer a position of at-will
employment to each of Maritime Bank's non-officer or non-managerial branch
office personnel in good standing as of the Effective Time at their existing
branch location or within 20 miles of the employee's place of employment as of
the Effective Time. In addition, ▇▇▇▇▇▇▇ will use its reasonable best efforts in
connection with reviewing applicants for employment positions to give Maritime
Bank employees who are not offered positions at the Effective Time the same
consideration as is afforded ▇▇▇▇▇▇▇ or ▇▇▇▇▇▇▇ Bank employees for such position
in accordance with existing formal or informal policies. ▇▇▇▇▇▇▇ will provide
outplacement assistance to Maritime Bank employees who are not offered positions
at the Effective Time.
(d) Following the Merger, ▇▇▇▇▇▇▇ agrees that it shall honor the
existing written deferred compensation, employment, change of control and
severance contracts with directors and employees of Maritime Bank that are
specifically listed at Section 3.12(a) of the Maritime Bank Disclosure Schedule;
provided, however, that in making the foregoing agreement, except as otherwise
required by law, ▇▇▇▇▇▇▇ will honor such contracts only to the extent that, as
represented at Section 3.11 hereof, none of such deferred compensation,
employment, change of control and severance contracts, nor any other Plan,
program, agreement or other arrangement, either individually or collectively,
provides for any payment by Maritime Bank that would not be deductible under
Code Sections 162(a)(1), 162(m) or 404 or that would constitute a "parachute
payment" within the meaning of Code Section 280G.
6.7 INDEMNIFICATION.
(a) In the event of any threatened or actual claim, action, suit,
proceeding or investigation, whether civil, criminal or administrative, in which
any person who is now, or has been at any time prior to the date of this
Agreement, or who becomes prior to the Effective Time, a director or officer or
employee of Maritime Bank (the "Indemnified Parties") is, or is threatened to
be, made a party based in whole or in part on, or arising in whole or in part
out of, or pertaining to (i) the fact that he is or was a director, officer or
employee of Maritime Bank or any of their respective predecessors or (ii) this
Agreement or any of the transactions contemplated hereby, whether in any case
asserted or arising before or after the Effective Time, the parties hereto agree
to cooperate and defend against and respond thereto to the extent permitted by
applicable law and the Certificate of Incorporation and Bylaws of Maritime Bank.
It is understood and agreed that after the Effective Time, ▇▇▇▇▇▇▇ shall
indemnify and hold harmless, as and to the fullest extent permitted by
applicable law and the Certificate of Incorporation and Bylaws of ▇▇▇▇▇▇▇ or the
Charter and By-Laws of ▇▇▇▇▇▇▇ Bank, as the case may be, each such Indemnified
Party against any losses, claims, damages, liabilities, costs, expenses
(including reasonable attorney's fees and expenses) judgments, fines and amounts
paid in settlement in connection with any such threatened or actual claim,
action, suit, proceeding or investigation, and in the event of any such
threatened or actual claim, action, suit, proceeding or investigation (whether
asserted or arising before or after the Effective Time), the Indemnified Parties
may retain counsel reasonably satisfactory to ▇▇▇▇▇▇▇; provided, however, that
(1) ▇▇▇▇▇▇▇ shall have the right to assume the defense thereof and upon such
assumption ▇▇▇▇▇▇▇ shall not be liable to any Indemnified Party for any legal
expenses of other counsel or any other expenses subsequently incurred by any
Indemnified Party in connection with the defense thereof, except that if ▇▇▇▇▇▇▇
elects not to assume such defense or counsel for the Indemnified Parties
reasonably advises the Indemnified Parties that there are issues which raise
conflicts of interest between ▇▇▇▇▇▇▇ and the Indemnified Parties, the
Indemnified Parties may retain counsel reasonably satisfactory to ▇▇▇▇▇▇▇, and
▇▇▇▇▇▇▇ shall pay the reasonable fees and expenses of such counsel for the
Indemnified Parties, (2) ▇▇▇▇▇▇▇ shall be obligated pursuant to this paragraph
to pay for only one firm of counsel for each Indemnified Party, and (3) ▇▇▇▇▇▇▇
shall not be liable for any settlement effected without its prior written
consent (which consent shall not be unreasonably withheld or delayed). ▇▇▇▇▇▇▇
shall have no obligation to advance expenses incurred in connection with a
threatened or pending action, suit or preceding in advance of final disposition
of such action, suit or proceeding, unless (i) ▇▇▇▇▇▇▇ would be permitted to
advance such expenses pursuant to the General Corporation Law of the State of
Delaware (the "Delaware
28
Corporation Law") and ▇▇▇▇▇▇▇'▇ Certificate of Incorporation or Bylaws, and (ii)
▇▇▇▇▇▇▇ receives an undertaking by the Indemnified Party to repay such amount if
it is determined that such party is not entitled to be indemnified by ▇▇▇▇▇▇▇
pursuant to the Delaware Corporation Law and ▇▇▇▇▇▇▇'▇ Certificate of
Incorporation or Bylaws. Any Indemnified Party wishing to claim indemnification
under this Section 6.7, upon learning of any such claim, action, suit,
proceeding or investigation, shall notify ▇▇▇▇▇▇▇ thereof; provided, however,
that the failure to so notify shall not affect the obligations of ▇▇▇▇▇▇▇ under
this Section 6.7 except to the extent such failure to notify materially
prejudices ▇▇▇▇▇▇▇. ▇▇▇▇▇▇▇'▇ obligations under this Section 6.7 continue in
full force and effect for a period of two years from the Effective Time;
provided, however, that all rights to indemnification in respect of any claim
asserted or made within such period shall continue until the final disposition
of such claim.
(b) ▇▇▇▇▇▇▇ shall use commercially reasonable efforts to cause the
persons serving as officers and directors of Maritime Bank immediately prior to
the Effective Time to be covered by a directors' and officers' liability
insurance policy ("Tail Insurance") of substantially the same coverage and
amounts containing terms and conditions which are generally not less
advantageous than Maritime Bank's current policy with respect to acts or
omissions occurring prior to the Effective Time which were committed by such
officers and directors in their capacity as such for an aggregate premium cost
for the Tail Insurance of not more than $100,000 and for a period not less than
two years.
6.8 SUBSEQUENT INTERIM AND ANNUAL FINANCIAL STATEMENTS.
As soon as reasonably available, but in no event more than 45 days after
the end of each fiscal quarter (other than the fourth fiscal quarter), ▇▇▇▇▇▇▇
will deliver to Maritime Bank its Quarterly Reports on Form 10-Q as filed with
the SEC under the Exchange Act, and Maritime Bank will deliver promptly to
▇▇▇▇▇▇▇ its unaudited financial statements for each fiscal quarter (other than
the fourth fiscal quarter). ▇▇▇▇▇▇▇ shall deliver to Maritime Bank its Current
Reports on Form 8-K and Annual Reports on Form 10-K promptly after filing such
reports with the SEC. Maritime Bank will deliver promptly to ▇▇▇▇▇▇▇ any
shareholder communications.
6.9 ADDITIONAL AGREEMENTS.
In case at any time after the Effective Time any further action is
necessary or desirable to carry out the purposes of this Agreement or the Bank
Merger Agreement, or to vest the Surviving Bank with full title to all
properties, assets, rights, approvals, immunities and franchises of any of the
parties to the Merger, the proper officers and directors of each party to this
Agreement and ▇▇▇▇▇▇▇'▇ Subsidiaries shall take all such necessary action as may
be reasonably requested by ▇▇▇▇▇▇▇.
6.10 ADVICE OF CHANGES.
▇▇▇▇▇▇▇ and Maritime Bank shall promptly advise the other party of any
change or event that, individually or in the aggregate, has or would be
reasonably likely to have a Material Adverse Effect on it or to cause or
constitute a material breach of any of its representations, warranties or
covenants contained herein. From time to time prior to the Effective Time,
Maritime Bank will promptly supplement or amend its disclosure schedule
delivered in connection with the execution of this Agreement to reflect any
matter which, if existing, occurring or known at the date of this Agreement,
would have been required to be set forth or described in such disclosure
schedule or which is necessary to correct any information in such disclosure
schedule which has been rendered inaccurate thereby. No supplement or amendment
to such disclosure schedule shall have any effect for the purpose of determining
satisfaction of the conditions set forth in Sections 7.2(a) hereof, as the case
may be, or the compliance by Maritime Bank with the covenants set forth in
Section 5.1 hereof.
29
6.11 CURRENT INFORMATION.
During the period from the date of this Agreement to the Effective Time,
Maritime Bank will cause one or more of its designated representatives to confer
on a regular and frequent basis (not less than monthly) with representatives of
▇▇▇▇▇▇▇ and to report the general status of the ongoing operations of Maritime
Bank. Maritime Bank will promptly notify ▇▇▇▇▇▇▇ of any material change in the
normal course of business or in the operation of the properties of Maritime Bank
and of any governmental complaints, investigations or hearings (or
communications indicating that the same may be contemplated), or the institution
or the threat of litigation involving Maritime Bank, and will keep ▇▇▇▇▇▇▇ fully
informed of such events.
6.12 EXECUTION AND AUTHORIZATION OF BANK MERGER AGREEMENT.
Prior to the Effective Time, (a) ▇▇▇▇▇▇▇ shall approve the Bank Merger
Agreement as the sole shareholder of ▇▇▇▇▇▇▇ Bank, and (b) ▇▇▇▇▇▇▇ Bank and
Maritime Bank shall execute and deliver the Bank Merger Agreement.
6.13 CHANGE IN STRUCTURE.
▇▇▇▇▇▇▇ may elect to modify the structure of the transactions contemplated
by this Agreement as noted herein so long as (i) there are no material adverse
federal income tax consequences to the Maritime Bank shareholders as a result of
such modification, (ii) the consideration to be paid to the Maritime Bank
shareholders under this Agreement is not thereby changed or reduced in amount,
and (iii) such modification will not be reasonably likely to delay materially or
jeopardize receipt of any Requisite Regulatory Approvals. In the event that
▇▇▇▇▇▇▇ elects to change the structure of the Merger, the parties agree to
modify this Agreement and the various exhibits hereto to reflect such revised
structure. In such event, ▇▇▇▇▇▇▇ shall prepare appropriate amendments to this
Agreement and the exhibits hereto for execution by the parties hereto. ▇▇▇▇▇▇▇
and Maritime Bank agree to cooperate fully with each other to effect such
amendments.
6.14 TRANSACTION EXPENSES OF MARITIME BANK.
(a) For planning purposes, Maritime Bank shall, within 15 days from
the date hereof, provide ▇▇▇▇▇▇▇ with its estimated budget of
transaction-related expenses reasonably anticipated to be payable by Maritime
Bank in connection with this transaction, including the fees and expenses of
counsel, accountants, investment bankers and other professionals. Maritime Bank
shall promptly notify ▇▇▇▇▇▇▇ if or when it determines that it will expect to
exceed its budget.
(b) Promptly after the execution of this Agreement, Maritime Bank
shall ask all of its attorneys and other professionals to render current and
correct invoices for all unbilled time and disbursements. Maritime Bank shall
accrue and/or pay all of such amounts as soon as possible.
(c) Maritime Bank shall advise ▇▇▇▇▇▇▇ monthly of all out-of-pocket
expenses which Maritime Bank has incurred in connection with this transaction.
(d) ▇▇▇▇▇▇▇, in reasonable consultation with Maritime Bank, shall make
all arrangements with respect to the printing and mailing of the Proxy
Statement/Prospectus. ▇▇▇▇▇▇▇, if it deems necessary, also shall engage (at
▇▇▇▇▇▇▇'▇ expense) a proxy solicitation firm to assist in the solicitation of
proxies for the Special Meeting of Maritime Bank's shareholders. Maritime Bank
agrees to cooperate as to such matters.
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ARTICLE VII
CONDITIONS PRECEDENT
7.1 CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE MERGER.
The respective obligation of each party to effect the Merger shall be
subject to the satisfaction at or prior to the Effective Time of the following
conditions:
(A) SHAREHOLDER APPROVAL.
This Agreement, the Merger and the other transactions contemplated
hereby shall have been approved and adopted by the affirmative vote of the
holders of at least two-thirds of the issued and outstanding shares of Maritime
Bank Common Stock entitled to vote thereon.
(B) STOCK EXCHANGE LISTING.
The shares of ▇▇▇▇▇▇▇ Common Stock which shall be issued in the Merger
(including the ▇▇▇▇▇▇▇ Common Stock that may be issued upon exercise of the
options referred to in Section 1.6 hereof) upon consummation of the Merger shall
have been authorized for quotation on the Nasdaq (or such other exchange on
which the ▇▇▇▇▇▇▇ Common Stock may become listed).
(C) OTHER APPROVALS.
All regulatory approvals required to consummate the transactions
contemplated hereby shall have been obtained and shall remain in full force and
effect and all statutory waiting periods in respect thereof shall have expired
(all such approvals and the expiration of all such waiting periods being
referred to herein as the "Requisite Regulatory Approvals"). No Requisite
Regulatory Approval shall contain a non-customary condition that ▇▇▇▇▇▇▇
reasonably determines to be burdensome or otherwise alter the benefits for which
it bargained in this Agreement.
(D) REGISTRATION STATEMENT.
The Registration Statement shall have become effective under the
Securities Act, and no stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for that
purpose shall have been initiated or threatened by the SEC.
(E) NO INJUNCTIONS OR RESTRAINTS; ILLEGALITY.
No order, injunction or decree issued by any court or agency of
competent jurisdiction or other legal restraint or prohibition (an "Injunction")
preventing the consummation of the Merger or any of the other transactions
contemplated by this Agreement, the Bank Merger Agreement or the Option
Agreement shall be in effect. No statute, rule, regulation, order, injunction or
decree shall have been enacted, entered, promulgated or enforced by any
Governmental Entity which prohibits, restricts or makes illegal consummation of
the Merger.
(F) FEDERAL TAX OPINION.
▇▇▇▇▇▇▇ shall have received from ▇▇▇▇▇ & ▇▇▇▇▇▇▇ L.L.P., ▇▇▇▇▇▇▇'▇
special counsel, an opinion to ▇▇▇▇▇▇▇ and Maritime Bank, in form and substance
reasonably satisfactory to ▇▇▇▇▇▇▇ and Maritime Bank, substantially to the
effect that on the basis of facts, representations, and assumptions set forth in
such opinion which are consistent with the state of facts existing at the time
of such opinion, the Merger will be treated for federal income tax purposes as a
reorganization within the meaning of Section 368(a) of the Code. In rendering
such opinion, such counsel may require and, to the
31
extent such counsel deems necessary or appropriate, may rely upon
representations made in certificates of officers of Maritime Bank, Webster,
Webster Bank, their respective affiliates and others.
7.2 CONDITIONS TO OBLIGATIONS OF ▇▇▇▇▇▇▇ AND ▇▇▇▇▇▇▇ BANK.
The obligation of ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ Bank to effect the Merger is also
subject to the satisfaction or waiver by ▇▇▇▇▇▇▇ at or prior to the Effective
Time of the following conditions:
(A) REPRESENTATIONS AND WARRANTIES.
The representations and warranties of Maritime Bank set forth in this
Agreement shall be true and correct as of the date of this Agreement and (except
to the extent such representations and warranties speak as of an earlier date)
as of the Closing Date as though made on and as of the Closing Date; provided,
however, that for purposes of this paragraph, such representations and
warranties shall be deemed to be true and correct, unless the failure or
failures of such representations and warranties to be so true and correct,
individually or in the aggregate, would have a Material Adverse Effect on
Maritime Bank. Such determination of aggregate Material Adverse Effect shall be
made as if there were no materiality qualifications in such representations and
warranties. ▇▇▇▇▇▇▇ shall have received a certificate signed on behalf of
Maritime Bank by the Chief Executive Officer and President of Maritime Bank to
the foregoing effect.
(B) PERFORMANCE OF COVENANTS AND AGREEMENTS.
Maritime Bank shall have performed in all material respects all
covenants and agreements required to be performed by it under this Agreement at
or prior to the Closing Date. ▇▇▇▇▇▇▇ shall have received a certificate signed
on behalf of Maritime Bank by the Chief Executive Officer and President of
Maritime Bank to such effect.
(C) CONSENTS UNDER AGREEMENTS.
The consent, approval or waiver of each person (other than the
Requisite Regulatory Approvals) whose consent or approval shall be required in
connection with the transactions contemplated hereby or in order to permit the
succession by the Surviving Bank pursuant to the Merger to any obligation, right
or interest of Maritime Bank under any loan or credit agreement, note, mortgage,
indenture, lease, license or other agreement or instrument shall have been
obtained except for those, the failure of which to obtain, will not result in a
Material Adverse Effect on the Surviving Bank.
(D) NO PENDING GOVERNMENTAL ACTIONS.
No proceeding initiated by any Governmental Entity seeking an
Injunction shall be pending.
(E) LEGAL OPINION.
▇▇▇▇▇▇▇ shall have received the opinion of Tyler, ▇▇▇▇▇▇ & ▇▇▇▇▇▇,
LLP, counsel to Maritime Bank, dated the Closing Date, in the form attached
hereto as Exhibit D. As to any matter in such opinion which involves matters of
fact, such counsel may rely upon the certificates of officers and directors of
Maritime Bank and of public officials, reasonably acceptable to ▇▇▇▇▇▇▇.
(F) ACCOUNTANT'S COMFORT LETTER.
Maritime Bank shall have caused to be delivered on the respective
dates thereof to ▇▇▇▇▇▇▇ "comfort letters" from ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & Company,
P.C., Maritime Bank's independent
32
public accountants, dated the date on which the Registration Statement or last
amendment thereto shall become effective, and dated the date of the Closing
(defined in Section 9.1 hereof), and addressed to ▇▇▇▇▇▇▇ and Maritime Bank,
with respect to Maritime Bank's financial data presented in the Proxy
Statement/Prospectus, which letters shall be based upon Statements on Auditing
Standards Nos. 72 and 76.
(G) ▇▇▇▇▇▇▇ SHAREHOLDER APPROVAL.
If approval of the Agreement, the Merger or the other transactions
contemplated hereby by the holders of ▇▇▇▇▇▇▇ Common Stock becomes necessary as
referenced in Section 5.3(b) hereof, the required approval of ▇▇▇▇▇▇▇'▇
shareholders shall be obtained.
7.3 CONDITIONS TO OBLIGATIONS OF MARITIME BANK.
The obligation of Maritime Bank to effect the Merger is also subject to the
satisfaction or waiver by Maritime Bank at or prior to the Effective Time of the
following conditions:
(A) REPRESENTATIONS AND WARRANTIES.
The representations and warranties of ▇▇▇▇▇▇▇ set forth in this
Agreement shall be true and correct as of the date of this Agreement and (except
to the extent such representations and warranties speak as of an earlier date)
as of the Closing Date as though made on and as of the Closing Date; provided,
however, that for purposes of this paragraph, such representations and
warranties shall be deemed to be true and correct, unless the failure or
failures of such representations and warranties to be so true and correct,
individually or in the aggregate, would have a Material Adverse Effect on
▇▇▇▇▇▇▇. Such determination of aggregate Material Adverse Effect shall be made
as if there were no materiality qualifications in such representations and
warranties. Maritime Bank shall have received a certificate signed on behalf of
▇▇▇▇▇▇▇ by each of the Chairman, Chief Executive Officer and President and the
Chief Financial Officer, Executive Vice President and Treasurer of ▇▇▇▇▇▇▇ to
the foregoing effect.
(B) PERFORMANCE OF COVENANTS AND AGREEMENTS.
▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ Bank shall have each performed in all material
respects all covenants and agreements required to be performed by it under this
Agreement at or prior to the Closing Date. Maritime Bank shall have received a
certificate signed on behalf of ▇▇▇▇▇▇▇ by each of the Chairman, Chief Executive
Officer and President and the Chief Financial Officer, Executive Vice President
and Treasurer of ▇▇▇▇▇▇▇ to the foregoing effect.
(C) CONSENTS UNDER AGREEMENTS.
The consent or approval or waiver of each person (other than the
Requisite Regulatory Approvals) whose consent or approval shall be required in
connection with the transactions contemplated hereby under any loan or credit
agreement, note, mortgage, indenture, lease, license or other agreement or
instrument to which ▇▇▇▇▇▇▇ or ▇▇▇▇▇▇▇ Bank is a party or is otherwise bound
shall have been obtained, except for those, the failure of which to obtain, will
not result in a Material Adverse Effect on ▇▇▇▇▇▇▇.
(D) NO PENDING GOVERNMENTAL ACTIONS.
No proceeding initiated by any Governmental Entity seeking an
Injunction shall be pending.
33
ARTICLE VIII
TERMINATION AND AMENDMENT
8.1 TERMINATION.
This Agreement may be terminated at any time prior to the Effective Time,
whether before or after approval of the matters presented in connection with the
Merger by the shareholders of Maritime Bank:
(a) by mutual consent of ▇▇▇▇▇▇▇ and Maritime Bank in a written
instrument, if the Board of Directors of each so determines by a vote of a
majority of the members of its entire Board;
(b) by either ▇▇▇▇▇▇▇ or Maritime Bank upon written notice to the
other party (i) 30 days after the date on which any request or application for a
Requisite Regulatory Approval shall have been denied or withdrawn at the request
or recommendation of the Governmental Entity which must grant such Requisite
Regulatory Approval, unless within the 30-day period following such denial or
withdrawal the parties agree to file, and have filed with the applicable
Governmental Entity, a petition for rehearing or an amended application,
provided, however, that no party shall have the right to terminate this
Agreement pursuant to this Section 8.1(b), if such denial or request or
recommendation for withdrawal shall be due to the failure of the party seeking
to terminate this Agreement to perform or observe the covenants and agreements
of such party set forth herein;
(c) by either ▇▇▇▇▇▇▇ or Maritime Bank if the Merger shall not have
been consummated on or before September 30, 1999, unless the failure of the
Closing to occur by such date shall be due to the failure of the party seeking
to terminate this Agreement to perform or observe the covenants and agreements
of such party set forth herein;
(d) by ▇▇▇▇▇▇▇ or by Maritime Bank (provided that Maritime Bank is not
in breach of its obligations under Section 6.3 hereof) if the approval of the
shareholders of Maritime Bank required for the consummation of the Merger shall
not have been obtained by reason of the failure to obtain the required vote at a
duly held meeting of shareholders or at any adjournment or postponement thereof;
(e) by either ▇▇▇▇▇▇▇ or Maritime Bank (provided that the terminating
party is not then in breach of any representation, warranty, covenant or other
agreement contained herein that, individually or in the aggregate, would give
the other party the right to terminate this Agreement) if there shall have been
a breach of any of the representations or warranties set forth in this Agreement
on the part of the other party, if such breach, individually or in the
aggregate, has had or is likely to have a Material Adverse Effect on the
breaching party, and such breach shall not have been cured within 30 days
following receipt by the breaching party of written notice of such breach from
the other party hereto or such breach, by its nature, cannot be cured prior to
the Closing;
(f) by either ▇▇▇▇▇▇▇ or Maritime Bank (provided that the terminating
party is not then in breach of any representation, warranty, covenant or other
agreement contained herein that, individually or in the aggregate, would give
the other party the right to terminate this Agreement) if there shall have been
a material breach of any of the covenants or agreements set forth in this
Agreement on the part of the other party, and such breach shall not have been
cured within 30 days following receipt by the breaching party of written notice
of such breach from the other party hereto or such breach, by its nature, cannot
be cured prior to the Closing; and
(g) by ▇▇▇▇▇▇▇, if the management of Maritime Bank or its Board of
Directors, for any reason, (i) fails to call and hold within 42 days of the
effectiveness of the Registration Statement the Special Meeting of Maritime
Bank's shareholders to consider and approve this Agreement, the Merger and the
other transactions contemplated hereby, (ii) fails to recommend to shareholders
the approval of
34
this Agreement, the Merger and the transactions contemplated hereby, (iii) fails
to oppose any third party proposal that is inconsistent with the transactions
contemplated by this Agreement or (iv) violates Section 5.1(e) of this Agreement
or would have violated Section 5.1(e) but for the fiduciary duty exception.
(h) by Maritime Bank, upon written notice delivered to ▇▇▇▇▇▇▇, as
provided below in this subsection (h), if the Base Period Trading Price shall be
less than $17.50, unless ▇▇▇▇▇▇▇ elects, as provided below in this subsection
(h), that the Exchange Ratio shall be adjusted to equal that number obtained by
dividing $26.67 by the Base Period Trading Price, rounded to three decimal
places (the "Adjusted Exchange Ratio"). If Maritime Bank elects to exercise its
termination right pursuant to this subsection (h), it shall give written notice
to ▇▇▇▇▇▇▇ within three business days following the end of the Base Period.
During the three business-day period commencing with its receipt of such notice,
▇▇▇▇▇▇▇ shall have the option of agreeing to change the Exchange Ratio to the
Adjusted Exchange Ratio. If ▇▇▇▇▇▇▇ makes the election contemplated by the
preceding sentence, then within such three business-day period ▇▇▇▇▇▇▇ shall
give written notice to Maritime Bank of such election and the Adjusted Exchange
Ratio, whereupon no termination shall have occurred pursuant to this subsection
(h) and this Agreement shall remain in effect in accordance with its terms
(except as the Exchange Ratio shall have been so modified), and any references
in this Agreement to "Exchange Ratio" shall thereafter be deemed to refer to the
Adjusted Exchange Ratio pursuant to this subsection (h).
8.2 EFFECT OF TERMINATION.
In the event of termination of this Agreement by either ▇▇▇▇▇▇▇ or Maritime
Bank. as provided in Section 8.1 hereof, this Agreement shall forthwith become
void and have no effect except (i) the last sentences of Sections 6.2(a) and
6.2(b) and Sections 8.2, 9.2 and 9.3 hereof shall survive any termination of
this Agreement, and (ii) notwithstanding anything to the contrary contained in
this Agreement, no party shall be relieved or released from any liabilities or
damages arising out of its willful or intentional breach of any provision of
this Agreement.
8.3 AMENDMENT.
Subject to compliance with applicable law, this Agreement may be amended by
the parties hereto, by action taken or authorized by their respective Board of
Directors, at any time before or after approval of the matters presented in
connection with the Merger by the shareholders of Maritime Bank; provided,
however, that after any approval of the transactions contemplated by this
Agreement by Maritime Bank's shareholders, there may not be, without further
approval of such shareholders, any amendment of this Agreement which reduces the
amount or changes the form of the consideration to be delivered to Maritime Bank
shareholders hereunder other than as contemplated by this Agreement. This
Agreement may not be amended except by an instrument in writing signed on behalf
of each of the parties hereto.
8.4 EXTENSION; WAIVER.
At any time prior to the Effective Time, the parties hereto, by action
taken or authorized by their respective Boards of Directors, may, to the extent
legally allowed, (a) extend the time for the performance of any of the
obligations or other acts of the other parties hereto, (b) waive any
inaccuracies in the representations and warranties contained herein or in any
document delivered pursuant hereto, and (c) waive compliance with any of the
agreements or conditions contained herein. Any agreement on the part of a party
hereto to any such extension or waiver shall be valid only if set forth in a
written instrument signed on behalf of such party, but such extension or waiver
or failure to insist on strict compliance with an obligation, covenant,
agreement or condition shall not operate as a waiver of, or estoppel with
respect to, any subsequent or other failure.
35
ARTICLE IX
GENERAL PROVISIONS
9.1 CLOSING.
Subject to the terms and conditions of this Agreement, the closing of the
Merger (the "Closing") will take place at 10:00 a.m. at the main offices of
▇▇▇▇▇▇▇ on (i) the fifth day after the later to occur of (x) the date the last
Requisite Regulatory Approval is received and all applicable waiting periods
have expired and (y) the date the approval of Maritime Bank's shareholders is
received, (ii) if elected by ▇▇▇▇▇▇▇, the last business day of the month in
which the date specified in the immediately preceding clause occurs, or (iii)
such other date, place and time as the parties may agree (the "Closing Date").
9.2 NONSURVIVAL OF REPRESENTATIONS, WARRANTIES, COVENANTS AND AGREEMENTS.
None of the representations, warranties, covenants and agreements in this
Agreement or in any instrument delivered pursuant to this Agreement (other than
pursuant to the Option Agreement, which shall terminate in accordance with its
terms) shall survive the Effective Time, except for those covenants and
agreements contained herein and therein which by their terms apply in whole or
in part after the Effective Time.
9.3 EXPENSES; BREAKUP FEE.
All costs and expenses incurred in connection with this Agreement and the
transactions contemplated hereby shall be paid by the party incurring such
expense. All filing and other fees paid to the SEC in connection with this
Agreement shall be borne by ▇▇▇▇▇▇▇. In the event that this Agreement is
terminated by either ▇▇▇▇▇▇▇ or Maritime Bank by reason of a material breach
pursuant to Sections 8.1(e) or (f) hereof or by ▇▇▇▇▇▇▇ pursuant to Section
8.1(g) hereof, the other party shall pay all documented, reasonable costs and
expenses up to $100,000 incurred by the terminating party in connection with
this Agreement and the transactions contemplated hereby, plus a breakup fee of
$350,000. Except as set forth in the next sentence, in the event that this
Agreement is terminated by ▇▇▇▇▇▇▇ under Section 8.1(d) hereof by reason of
Maritime Bank shareholders not having given any required approval, Maritime Bank
shall pay all documented, reasonable costs and expenses up to $100,000 incurred
by ▇▇▇▇▇▇▇ in connection with this Agreement and the transactions contemplated
hereby. In the event that this Agreement is terminated by ▇▇▇▇▇▇▇ under Section
8.1(d) by reason of Maritime Bank shareholders not having given any required
approval, and there shall have been prior to the Special Meeting a "Third Party
Public Event" (as defined below), Maritime Bank shall pay all documented,
reasonable costs and expenses up to $100,000 incurred by ▇▇▇▇▇▇▇ in connection
with this Agreement and the transactions contemplated hereby, plus a breakup fee
of $350,000. For purposes of this Section 9.3, a "Third Party Public Event"
shall refer to any of the following events: (i) any person (as defined at
Sections 3(a)(9) and 13(d)(3) of the Exchange Act and the rules and regulations
thereunder), other than Webster or any Webster Subsidiary, shall have made a
bona fide proposal to Maritime Bank or, by a public announcement or written
communication that is or becomes the subject of public disclosure, to Maritime
Bank's shareholders to engage in an Acquisition Transaction (including, without
limitation, any situation in which any person other than Webster or any Webster
Subsidiary shall have commenced (as such term is defined in Rule 14d-2 under the
Exchange Act), or shall have filed a registration statement under the Securities
Act, with respect to a tender offer or exchange offer to purchase any shares of
Maritime Bank Common Stock such that, upon consummation of such offer, such
person would have beneficial ownership of 10.0% or more of the then outstanding
shares of Maritime Bank Common Stock); or (ii) any director, officer, 5% or
greater shareholder or affiliate of Maritime Bank shall have, by any means which
becomes the subject of public disclosure, communicated opposition to this
Agreement, the Merger or other transactions contemplated hereby, or otherwise
takes action to influence the vote of Maritime Bank shareholders against this
Agreement, the Merger and the transactions contemplated hereby.
36
9.4 NOTICES.
All notices and other communications hereunder shall be in writing and
shall be deemed given if delivered personally, mailed by registered or certified
mail (return receipt requested) or delivered by an express courier (with
confirmation) to the parties at the following addresses (or at such other
address for a party as shall be specified by like notice):
(a) if to Webster or ▇▇▇▇▇▇▇ Bank, to:
▇▇▇▇▇▇▇ Financial Corporation
Webster Plaza
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn.: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Chairman and Chief Executive Officer
with a copy (which shall not constitute notice) to:
▇▇▇▇▇ & ▇▇▇▇▇▇▇ L.L.P.
Columbia Square
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn.: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
and
(b) if to Maritime Bank & Trust Company, to:
Maritime Bank & Trust Company
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn.: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Chief Executive Officer and President
with a copy (which shall not constitute notice) to:
Tyler, ▇▇▇▇▇▇ & ▇▇▇▇▇▇, LLP
▇▇▇▇▇▇▇▇▇/▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn.: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
9.5 INTERPRETATION.
When a reference is made in this Agreement to Sections, Exhibits or
Schedules, such reference shall be to a Section of or an Exhibit or Schedule to
this Agreement unless otherwise indicated. The table of contents and headings
contained in this Agreement are for reference purposes only and shall not affect
in any way the meaning or interpretation of this Agreement. Whenever the words
"include", "includes" or "including" are used in this Agreement, they shall be
deemed to be followed by the words "without limitation".
9.6 COUNTERPARTS.
This Agreement may be executed in counterparts, all of which shall be
considered one and the same agreement and shall become effective when
counterparts have been signed by each of the parties and delivered to the other
parties, it being understood that all parties need not sign the same
counterpart.
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9.7 ENTIRE AGREEMENT.
This Agreement (including the disclosure schedules, documents and the
instruments referred to herein) constitutes the entire agreement and supersedes
all prior agreements and understandings, both written and oral, among the
parties with respect to the subject matter hereof, other than the
Confidentiality Agreement, the Bank Merger Agreement, the Option Agreement and
the Maritime Bank Stockholder Agreement.
9.8 GOVERNING LAW.
This Agreement shall be governed and construed in accordance with the laws
of the State of Delaware, without regard to any applicable conflicts of law
rules.
9.9 ENFORCEMENT OF AGREEMENT.
The parties hereto agree that irreparable damage would occur in the event
that the provisions of this Agreement were not performed in accordance with its
specific terms or were otherwise breached. It is accordingly agreed that the
parties shall be entitled to an injunction or injunctions to prevent breaches of
this Agreement and to enforce specifically the terms and provisions thereof in
any court of the United States or any state having jurisdiction, this being in
addition to any other remedy to which they are entitled at law or in equity.
9.10 SEVERABILITY.
Any term or provision of this Agreement which is invalid or unenforceable
in any jurisdiction shall, as to that jurisdiction, be ineffective to the extent
of such invalidity or unenforceability without rendering invalid or
unenforceable the remaining terms and provisions of this Agreement or affecting
the validity or enforceability of any of the terms or provisions of this
Agreement in any other jurisdiction. If any provision of this Agreement is so
broad as to be unenforceable, the provision shall be interpreted to be only so
broad as is enforceable.
9.11 PUBLICITY.
Except as otherwise required by law or the rules of Nasdaq (or such other
exchange on which the Webster Common Stock may become listed), so long as this
Agreement is in effect, neither Webster nor Maritime Bank shall, or shall permit
any of ▇▇▇▇▇▇▇'▇ Subsidiaries to, issue or cause the publication of any press
release or other public announcement with respect to, or otherwise make any
public statement concerning, the transactions contemplated by this Agreement,
the Bank Merger Agreement, the Option Agreement or the Maritime Bank Stockholder
Agreement without the consent of the other party, which consent shall not be
unreasonably withheld.
9.12 ASSIGNMENT; LIMITATION OF BENEFITS.
Neither this Agreement nor any of the rights, interests or obligations
hereunder shall be assigned by any of the parties hereto (whether by operation
of law or otherwise) without the prior written consent of the other parties.
Subject to the preceding sentence, this Agreement will be binding upon, inure to
the benefit of and be enforceable by the parties and their respective successors
and assigns. Except as otherwise specifically provided in Section 6.7 hereof,
this Agreement (including the documents and instruments referred to herein) is
not intended to confer upon any person other than the parties hereto any rights
or remedies hereunder, and the covenants, undertakings and agreements set out
herein shall be solely for the benefit of, and shall be enforceable only by, the
parties hereto and their permitted assigns.
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9.13 ADDITIONAL DEFINITIONS.
In addition to any other definitions contained in this Agreement, the
following words, terms and phrases shall have the following meanings when used
in this Agreement.
"Affiliated Person": any director, officer or 5% or greater shareholder,
spouse or other person living in the same household of such director, officer or
shareholder, or any company, partnership or trust in which any of the foregoing
persons is an officer, 5% or greater shareholder, general partner or 5% or
greater trust beneficiary.
"Laws": any and all statutes, laws, ordinances, rules, regulations, orders,
permits, judgments, injunctions, decrees, case law and other rules of law
enacted, promulgated or issued by any Governmental Entity.
"Material Adverse Effect": with respect to Webster or Maritime Bank, as the
case may be, means a condition, event, change or occurrence that is reasonably
likely to have a material adverse effect upon (A) the financial condition,
results of operations, business or properties of Webster or Maritime Bank (other
than as a result of changes in laws or regulations or accounting rules of
general applicability or interpretations thereof), or (B) the ability of Webster
or Maritime Bank to perform its obligations under, and to consummate the
transactions contemplated by, this Agreement, the Bank Merger Agreement and, in
the case of Maritime Bank, the Option Agreement.
"Subsidiary": with respect to any party means any corporation, partnership
or other organization, whether incorporated or unincorporated, which is
consolidated with such party for financial reporting purposes.
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IN WITNESS WHEREOF, Webster, Webster Bank and Maritime Bank have caused
this Agreement to be executed and delivered by their respective officers
thereunto duly authorized as of the date first above written.
ATTEST: ▇▇▇▇▇▇▇ FINANCIAL CORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------- -------------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇. ▇▇▇▇▇
Senior Vice President, Counsel Chairman and Chief Executive Officer
and Secretary
▇▇▇▇▇▇▇ BANK
ATTEST:
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------- -------------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇. ▇▇▇▇▇
Senior Vice President, Counsel Chairman and Chief Executive Officer
and Secretary
MARITIME BANK & TRUST COMPANY
ATTEST:
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇. By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------------- -------------------------------------------
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Secretary Chief Executive Officer and President