AGREEMENT AND PLAN OF MERGER BY AND AMONG NEWALLIANCE BANCSHARES, INC. AND NEWALLIANCE BANK AND WESTBANK CORPORATION AND WESTBANK DATED AS OF July 18, 2006
AGREEMENT
AND PLAN OF MERGER
BY
AND AMONG
NEWALLIANCE
BANCSHARES, INC.
AND
NEWALLIANCE
BANK
AND
WESTBANK
CORPORATION
AND
WESTBANK
DATED
AS OF
July
18, 2006
TABLE
OF
CONTENTS
|
AGREEMENT
AND PLAN OF MERGER
|
1
|
|
|
ARTICLE
I
|
2
|
|
|
CERTAIN
DEFINITIONS
|
2
|
|
|
1.1
|
Certain
Definitions
|
2
|
|
ARTICLE
II
|
9
|
|
|
THE
MERGER
|
9
|
|
|
2.1
|
The
Merger
|
9
|
|
2.2
|
The
Bank Merger
|
9
|
|
2.3
|
Effective
Time
|
9
|
|
2.4
|
Certificate
of Incorporation and Bylaws
|
9
|
|
2.5
|
Directors
and Officers of Surviving Corporation
|
10
|
|
2.6
|
Directors
and Officers of Surviving Bank
|
10
|
|
2.7
|
Additional
Actions
|
10
|
|
2.8
|
Effects
of the Merger
|
10
|
|
2.9
|
Possible
Alternative Structures
|
10
|
|
ARTICLE
III
|
11
|
|
|
CONVERSION
OF SHARES AND OPTIONS
|
11
|
|
|
3.1
|
Exchange
of Westbank Common Stock; Merger Consideration
|
11
|
|
3.2
|
Proration
and Election Procedures
|
13
|
|
3.3
|
Procedures
for Exchange of Westbank Common Stock
|
15
|
|
ARTICLE
IV
|
17
|
|
|
REPRESENTATIONS
AND WARRANTIES OF WESTBANK AND WB
|
17
|
|
|
4.1
|
Capital
Structure
|
17
|
|
4.2
|
Organization,
Standing and Authority of Westbank
|
18
|
|
4.3
|
Ownership
of Westbank Subsidiaries
|
18
|
|
4.4
|
Organization,
Standing and Authority of Westbank Subsidiaries
|
18
|
|
4.5
|
Authorized
and Effective Agreement
|
19
|
|
4.6
|
Securities
Documents and Regulatory Reports
|
20
|
|
4.7
|
Financial
Statements
|
20
|
|
4.8
|
Material
Adverse Change
|
21
|
|
4.9
|
Environmental
Matters
|
21
|
|
4.10
|
Tax
Matters
|
23
|
|
4.11
|
Legal
Proceedings
|
25
|
|
4.12
|
Compliance
with Laws
|
25
|
|
4.13
|
Certain
Information
|
25
|
|
4.14
|
Employee
Benefit Plans
|
26
|
|
4.15
|
Certain
Contracts.
|
28
|
|
4.16
|
Brokers
and Finders
|
30
|
|
4.17
|
Insurance
|
30
|
|
4.18
|
Properties
|
30
|
|
4.19
|
Labor
|
30
|
|
4.20
|
Certain
Transactions
|
31
|
|
4.21
|
Fairness
Opinion
|
31
|
|
4.22
|
Loan
Portfolio
|
31
|
|
4.23
|
Required
Vote; Inapplicability of Anti-takeover Statutes
|
32
|
1
|
4.24
|
Material
Interests of Certain Persons
|
32
|
|
4.25
|
Joint
Ventures
|
33
|
|
4.26
|
Intellectual
Property
|
33
|
|
4.27
|
Disclosures
|
33
|
|
ARTICLE
V
|
33
|
|
|
REPRESENTATIONS
AND WARRANTIES OF NEWALLIANCE AND NAB
|
33
|
|
|
5.1
|
Capital
Structure
|
34
|
|
5.2
|
Organization,
Standing and Authority of NewAlliance
|
34
|
|
5.3
|
Organization,
Standing and Authority of NewAlliance
Subsidiaries
|
34
|
|
5.4
|
Authorized
and Effective Agreement
|
34
|
|
5.5
|
Regulatory
Reports
|
36
|
|
5.6
|
Financial
Statements
|
36
|
|
5.7
|
Material
Adverse Change
|
37
|
|
5.8
|
Compliance
with Laws
|
37
|
|
5.9
|
Brokers
and Finders
|
38
|
|
5.10
|
Labor
|
38
|
|
5.11
|
Certain
Transactions
|
38
|
|
5.12
|
Disclosures
|
38
|
|
5.13
|
Tax
Matters
|
38
|
|
5.14
|
Legal
Proceedings
|
39
|
|
5.15
|
NewAlliance
Common Stock
|
40
|
|
5.16
|
Employee
Benefit Plans
|
40
|
|
ARTICLE
VI
|
41
|
|
|
COVENANTS
OF WESTBANK AND WB
|
41
|
|
|
6.1
|
Conduct
of Business
|
41
|
|
6.2
|
Current
Information
|
46
|
|
6.3
|
Access
to Properties and Records
|
46
|
|
6.4
|
Financial
and Other Statements
|
47
|
|
6.5
|
Maintenance
of Insurance
|
48
|
|
6.6
|
Disclosure
Supplements
|
48
|
|
6.7
|
Consents
and Approvals of Third Parties
|
48
|
|
6.8
|
Reasonable
Best Efforts
|
48
|
|
6.9
|
Failure
to Fulfill Conditions
|
48
|
|
6.10
|
Acquisition
Proposals
|
48
|
|
6.11
|
Board
of Directors and Committee Meetings
|
50
|
|
6.12
|
Reserves
and Merger-Related Costs
|
50
|
|
6.13
|
Transaction
Expenses of Westbank.
|
51
|
|
6.14
|
Certain
Policies of Westbank
|
51
|
|
6.15
|
Amendments
to Plans
|
51
|
|
6.16
|
Acceleration
of Restricted Stock Awards
|
52
|
|
6.17
|
▇▇
▇▇▇▇▇▇▇▇▇ Payments
|
52
|
|
ARTICLE
VII
|
52
|
|
|
COVENANTS
OF NEWALLIANCE AND NAB
|
52
|
|
|
7.1
|
Disclosure
Supplements
|
52
|
|
7.2
|
Consents
and Approvals of Third Parties
|
52
|
|
7.3
|
Reasonable
Best Efforts
|
52
|
|
7.4
|
Failure
to Fulfill Conditions
|
52
|
2
|
7.5
|
Employees
and Employee Benefits
|
52
|
|
7.6
|
Directors
and Officers Indemnification and Insurance
|
56
|
|
7.7
|
Conduct
of Business
|
57
|
|
7.8
|
Financial
and Other Statements
|
57
|
|
7.9
|
Current
Information
|
58
|
|
7.10
|
Negative
Covenants
|
58
|
|
7.11
|
Access
to Properties and Records
|
59
|
|
7.12
|
Stock
Listing
|
59
|
|
7.13
|
Stock
and Cash Reserve
|
59
|
|
ARTICLE
VIII
|
60
|
|
|
REGULATORY
AND OTHER MATTERS
|
60
|
|
|
8.1
|
Westbank
Special Meeting
|
60
|
|
8.2
|
Proxy
Statement - Prospectus
|
60
|
|
8.3
|
Regulatory
Approvals
|
61
|
|
8.4
|
Affiliates
|
62
|
|
8.5
|
Compliance
with Anti-Trust Laws
|
62
|
|
8.6
|
Execution
of Bank Merger Agreement
|
62
|
|
ARTICLE
IX
|
62
|
|
|
CLOSING
CONDITIONS
|
62
|
|
|
9.1
|
Conditions
to Each Party's Obligations under this Agreement
|
62
|
|
9.2
|
Conditions
to the Obligations of NewAlliance under this
Agreement
|
64
|
|
9.3
|
Conditions
to the Obligations of Westbank under this
Agreement
|
64
|
|
ARTICLE
X
|
65
|
|
|
THE
CLOSING
|
65
|
|
|
10.1
|
Time
and Place
|
65
|
|
10.2
|
Deliveries
at the Closing
|
65
|
|
ARTICLE
XI
|
66
|
|
|
TERMINATION,
AMENDMENT AND WAIVER
|
66
|
|
|
11.1
|
Termination
|
66
|
|
11.2
|
Effect
of Termination
|
68
|
|
11.3
|
Amendment,
Extension and Waiver
|
69
|
|
ARTICLE
XII
|
70
|
|
|
MISCELLANEOUS
|
70
|
|
|
12.1
|
Confidentiality
|
70
|
|
12.2
|
Public
Announcements
|
70
|
|
12.3
|
Survival
|
70
|
|
12.4
|
Notices
|
70
|
|
12.5
|
Parties
in Interest
|
71
|
|
12.6
|
Complete
Agreement
|
71
|
|
12.7
|
Counterparts
|
71
|
|
12.8
|
Severability
|
71
|
|
12.9
|
Governing
Law
|
72
|
|
12.10
|
Interpretation
|
72
|
|
12.11
|
Specific
Performance
|
72
|
|
EXHIBIT
A
|
||
|
FORM
OF BANK MERGER AGREEMENT
|
A-1
|
|
|
EXHIBIT
B
|
||
3
|
FORM
OF VOTING AGREEMENT
|
B-1
|
|
|
EXHIBIT
C
|
||
|
FORM
OF TERMINATION, RELEASE AND NONCOMPETITION
AGREEMENT
|
C-1
|
|
|
EXHIBIT
D
|
||
|
FORM
OF TERMINATION AND RELEASE AGREEMENT
|
D-1
|
|
|
EXHIBIT
E
|
||
|
FORM
OF AFFILIATES AGREEMENT
|
E-1
|
|
|
ANNEX
I
|
1
|
|
|
Shareholder
Agreement
|
1
|
|
4
AGREEMENT
AND PLAN OF MERGER
This
AGREEMENT
AND PLAN OF MERGER (the
"Agreement")
dated
as of July 18, 2006 is by and among NEWALLIANCE
BANCSHARES, INC.,
a
Delaware corporation ("NewAlliance"),
NEWALLIANCE
BANK, a
Connecticut-chartered savings bank and wholly owned subsidiary of NewAlliance
("NAB"),
WESTBANK CORPORATION, a
Massachusetts corporation ("Westbank"), and
WESTBANK,
a
Massachusetts-chartered bank and trust company and wholly-owned subsidiary
of
Westbank ("WB").
W I T N E S S E T H:
WHEREAS,
the
Boards of Directors of NewAlliance, NAB, Westbank and WB have determined that
it
is in the best interest of their respective companies and shareholders to
consummate the business combination transactions provided for herein whereby,
subject to the terms and conditions set forth herein:
Westbank
will merge with and into NewAlliance, with NewAlliance being the surviving
entity (the "Merger");
Prior
to
the consummation of the Merger, NAB and WB will enter into a merger agreement,
in the form attached hereto as Exhibit
A
(the
"Bank
Merger Agreement")
pursuant to which WB will merge with and into NAB, with NAB being the surviving
entity (the "Bank
Merger"),
which
Bank Merger shall be consummated immediately following the Merger;
WHEREAS,
all of
the directors and ▇▇▇▇ ▇. ▇▇▇▇▇▇, Executive Vice President, and ▇▇▇▇ ▇. ▇▇▇▇▇,
Treasurer and Chief Financial Officer of Westbank have agreed, in their
capacities as shareholders of Westbank, to vote their shares of Westbank Common
Stock in favor of this Agreement pursuant to separate voting agreements entered
into by and between each such director and NewAlliance prior to or on the date
hereof in the form attached hereto as Exhibit
B;
WHEREAS,
it is
the intention of the parties to this Agreement that the Merger be treated as
a
"reorganization" within the meaning of Section 368(a) of the Internal Revenue
Code of 1986, as amended (the "Code"), and this Agreement shall constitute
a
plan of reorganization within the meaning of Treasury Regulations Section
1.368-2(g); and
WHEREAS,
the
parties hereto desire to make certain representations, warranties and agreements
in connection with the business combination transactions described in this
Agreement and to prescribe certain conditions thereto.
NOW,
THEREFORE,
in
consideration of the mutual covenants, representations, warranties and
agreements herein contained, and for other good and valuable consideration,
the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows:
1
ARTICLE
I
CERTAIN
DEFINITIONS
1.1 Certain
Definitions.
As used
in this Agreement, the following terms have the following meanings, unless
the
context otherwise requires (both here and throughout this Agreement, references
to Articles and Sections refer to Articles and Sections of this
Agreement).
"Acquisition
Agreement"
shall
have the meaning set forth in Section 11.1.9 hereof.
"Acquisition
Proposal"
shall
mean any proposal or offer with respect to any of the following (other than
the
transactions contemplated hereunder) involving Westbank or WB: (i) any merger,
consolidation, share exchange, business combination or other similar
transaction; (ii) any sale, lease, exchange, mortgage, pledge, transfer or
other
disposition of 25% or more of its consolidated assets in a single transaction
or
series of transactions; (iii) any tender offer or exchange offer for 25% or
more
of the outstanding shares of its capital stock or the filing of a registration
statement under the Securities Act in connection therewith; or (iv) any public
announcement of a proposal, plan or intention to do any of the foregoing or
any
agreement to engage in any of the foregoing.
"Acquisition
Transaction"
shall
mean any of the following (other than the transactions contemplated hereunder)
involving Westbank or any Westbank Subsidiaries: (i) any merger, consolidation,
share exchange, business combination or other similar transaction; (ii) any
sale, lease, exchange, mortgage, pledge, transfer or other disposition of 25%
or
more of its consolidated assets in a single transaction or series of
transactions; or (iii) any tender offer or exchange offer for 25% or more of
the
outstanding shares of its capital stock or the filing of a registration
statement under the Securities Act in connection therewith.
"Affiliate"
shall
mean, with respect to a Person, any Person that directly, or indirectly through
one or more intermediaries, controls, or is controlled by, or is under common
control with, such Person.
"Bank
Merger"
shall
have the meaning set forth in the Recitals hereto.
"Bank
Merger Agreement"
shall
have the meaning set forth in the Recitals hereto.
"Bank
Regulator"
shall
mean any federal or state banking regulator that regulates NAB or WB, or any
of
their respective holding companies or subsidiaries, as the case may be,
including but not limited to the FDIC, the Department, the Division and the
FRB.
"BHCA"
shall
mean Bank Holding Company Act of 1956, as amended.
"Board
of Bank Incorporation"
shall
mean the Massachusetts Commissioner of Banks, the Massachusetts Commissioner
of
Revenue and the Treasurer of the Commonwealth of Massachusetts.
2
"Business
Day"
means
Monday through Friday of each week, except a legal holiday recognized as such
by
the U.S. Government or any day on which banking institutions in the State of
Connecticut or the Commonwealth of Massachusetts are authorized or obligated
to
close.
"Cash
Election Consideration"
shall
have the meaning set forth in Section 3.1.3 hereof.
"Cash
Election Price"
shall
have the meaning set forth in Section 3.1.3 hereof.
"Certificate"
shall
mean certificates evidencing shares of Westbank Common Stock.
"CGS"
shall
mean the Connecticut General Statutes, as amended.
"Closing"
shall
have the meaning set forth in Section 2.3 hereof
"Closing
Date"
shall
have the meaning set forth in Section 2.3 hereof.
"Code"
shall
have the meaning set forth in the Recitals hereto.
"Confidentiality
Agreement"
shall
mean the confidentiality agreement referred to in Section 12.1 of this
Agreement.
"Connecticut
Banking Law"
shall
mean the Banking Law of Connecticut, CGS §36a-1 et seq., as
amended.
"Continuing
Employee"
shall
have the meaning set forth in Section 7.5.2 hereof.
"DGCL"
shall
mean the Delaware General Corporation Law, as amended.
"Department"
shall
mean the Connecticut Department of Banking.
"Determination
Date"
shall
mean the date on which the last required approval of a Governmental Entity
is
obtained with respect to the Merger, without regard to any requisite waiting
period.
"DIF"
shall
mean Deposit Insurance Fund administered by the FDIC.
"Division"
shall
mean the Massachusetts Division of Banks.
"DOJ"
shall
mean the United States Department of Justice.
"Effective
Date"
shall
mean the date on which the Effective Time occurs.
"Effective
Time"
shall
mean the date and time specified pursuant to Section 2.3 hereof as the effective
time of the Merger.
"Environmental
Laws"
means
any applicable federal, state or local law, statute, ordinance, rule,
regulation, code, license, permit, authorization, approval, consent, order,
3
judgment,
decree, injunction or agreement with any Governmental Entity relating to (1)
the
protection, preservation or restoration of the environment (including, without
limitation, air, water vapor, surface water, groundwater, drinking water supply,
surface soil, subsurface soil, plant and animal life or any other natural
resource), and/or (2) the use, storage, recycling, treatment, generation,
transportation, processing, handling, labeling, production, release or disposal
of Materials of Environmental Concern. The term Environmental Law includes
without limitation (a) the Comprehensive Environmental Response, Compensation
and Liability Act, as amended, 42 U.S.C. §9601, et seq.; the Resource
Conservation and Recovery Act, as amended, 42 U.S.C. §6901, et seq.; the Clean
Air Act, as amended, 42 U.S.C. §7401, et seq.; the Federal Water Pollution
Control Act, as amended, 33 U.S.C. §1251, et seq.; the Toxic Substances Control
Act, as amended, 15 U.S.C. §9601, et seq.; the Emergency Planning and Community
Right to ▇▇▇▇ ▇▇▇, ▇▇ ▇.▇.▇. §▇▇▇▇, et seq.; the Safe Drinking ▇▇▇▇▇ ▇▇▇, ▇▇
▇.▇.▇. §▇▇▇▇, et seq., the Connecticut Transfer Act, C.G.S. §22a-134, et seq.;
Chapter 21E of the Massachusetts General Laws and all applicable comparable
state and local laws, and (b) any common law (including without limitation
common law that may impose strict liability) that may impose liability or
obligations for injuries or damages due to the presence of or exposure to any
Materials of Environmental Concern as in effect at or prior to the Effective
Time.
"ERISA"
shall
mean the Employee Retirement Income Security Act of 1974, as
amended.
"Exchange
Act"
shall
mean the Securities Exchange Act of 1934, as amended.
"Exchange
Agent"
shall
mean American Stock Transfer and Trust Company or another reputable exchange
agent designated by NewAlliance and reasonably acceptable to Westbank, which
shall act as agent for NewAlliance in connection with the exchange procedures
for converting Certificates and Options into the Merger
Consideration.
"Exchange
Fund"
shall
have the meaning set forth in Section 3.3.1 hereof.
"FDIA"
shall
mean the Federal Deposit Insurance Act, as amended.
"FDIC"
shall
mean the Federal Deposit Insurance Corporation or any successor
thereto.
"Fractional
Share Consideration"
shall
have the meaning set forth in Section 3.1.5 hereof.
"FRB"
shall
mean the Board of Governors of the Federal Reserve System or any successor
thereto.
"GAAP"
shall
mean accounting principles generally accepted in the United States of
America.
"Governmental
Entity"
shall
mean any federal or state court, administrative agency or commission or other
governmental authority or instrumentality.
4
"Intellectual
Property"
shall
have the meaning set forth in Section 4.26 hereof.
"Joint
Venture"
shall
mean any limited partnership, joint venture, corporation, or venture capital
investment.
"Knowledge"
as used
with respect to a Person (including references to such Person being aware of
a
particular matter) shall mean those facts that are known, or reasonably should
have been known, by the executive officers and directors of such Person (in
the
ordinary performance of their duties without additional inquiry specific to
this
Agreement), and includes any facts, matters or circumstances set forth in any
written notice from any bank regulatory agencies or any other material written
notice received by that Person.
"Loan
Property"
shall
have the meaning set forth in Section 4.9.2 hereof.
"Massachusetts
Banking Law"
shall
mean Massachusetts General Laws, Chapter 167, Chapters 167A through 167H, and
Chapter 172, as amended.
"Massachusetts
Division Advisory Board"
shall
have the meaning set forth in Section 2.6 hereof.
"Material
Adverse Effect"
shall
mean, with respect to Westbank or NewAlliance, respectively, any effect that
(i)
is material and adverse to the financial condition, results of operations or
business of Westbank and its Subsidiaries taken as a whole, or NewAlliance
and
its Subsidiaries taken as a whole, respectively, or (ii) materially impairs
the
ability of either Westbank, on the one hand, or NewAlliance, on the other hand,
to consummate the transactions contemplated by this Agreement; provided that
"Material Adverse Effect" shall not be deemed to include the impact of (a)
changes in laws and regulations affecting banks generally, (b) changes in GAAP
or regulatory accounting principles generally applicable to banks and their
holding companies, (c) actions and omissions of a party (or any of its
Subsidiaries) taken with the prior written consent of the other party, (d)
the
direct effects of compliance with this Agreement on the operating performance
of
the parties, including expenses incurred by the parties hereto in consummating
the transactions contemplated in this Agreement, (e) changes after the date
of
this Agreement in general economic or capital market conditions affecting banks
or their holding companies or their market prices generally, and (f) changes
or
events after the date of this Agreement affecting the financial services
industry generally and not specifically relating to Westbank or any of the
Westbank Subsidiaries.
"Materials
of Environmental Concern"
shall
mean petroleum and petroleum products, byproducts or breakdown products,
radioactive materials, asbestos-containing materials and polychlorinated
biphenyls and any other chemicals, materials or substances regulated at the
Effective Time as toxic or hazardous or as a pollutant, contaminant or waste
under any applicable Environmental Laws.
"Maximum
Premium Amount"
shall
have the meaning set forth in Section 7.6.1 hereof.
"Merger"
shall
have the meaning set forth in the Recitals hereto.
5
"Merger
Consideration"
shall
mean the consideration paid by NewAlliance to holders of Westbank Common Stock
under Section 3.1 hereof.
"Merger
Registration Statement"
shall
have the meaning set forth in Section 8.2 hereto.
"NAB"
shall
mean NewAlliance Bank, a Connecticut-chartered stock savings bank with its
principal offices located at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
and shall include the predecessor financial institution to NewAlliance Bank,
namely, New Haven Savings Bank, a Connecticut-chartered mutual savings bank,
which converted from mutual to stock form and changed its name to NewAlliance
Bank, effective April 1, 2004.
"NASDAQ"
shall
mean the National Association of Securities Dealers Automatic Quotation System,
f/k/a "National Market", and now known as "The NASDAQ Global
Market."
"NewAlliance"
shall
mean NewAlliance Bancshares, Inc., a Delaware corporation with its principal
office at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ which shall be the
surviving corporation in the Merger.
"NewAlliance
Amendment"
shall
have the meaning set forth in Section 6.10(b) hereof.
"NewAlliance
Base Period Trading Price"
of
NewAlliance Common Stock shall mean the arithmetic mean of the daily closing
sales prices per share of NewAlliance Common Stock reported on the NYSE
Composite Transaction Tape (as reported by the Wall
Street Journal or,
if
not reported thereby, another authoritative source) for the twenty (20)
consecutive NYSE trading days ending at the close of trading on the fifth
trading date prior to the Determination Date.
"NewAlliance
Common Stock"
shall
mean the common stock, par value $0.01 per share, of NewAlliance.
"NewAlliance
DISCLOSURE SCHEDULE"
shall
mean a written, signed disclosure schedule delivered by NewAlliance specifically
referring to the appropriate section of this Agreement and describing in
reasonable detail the matters contained therein.
"NewAlliance
Employee Plan(s)"
shall
mean all qualified pension or profit-sharing plans, any deferred compensation,
non-qualified plan or arrangement, supplemental retirement, consultant, bonus
or
group insurance contract or any other incentive, health and welfare or employee
benefit plan or agreement maintained for the benefit of any of the employees
or
former employees or directors of NewAlliance or any NewAlliance Subsidiary,
whether written or oral as in effect at the time of the execution of this
Agreement.
"NewAlliance
Financial Statements"
shall
mean the audited consolidated balance sheets (including related notes and
schedules, if any) of NewAlliance as of December 31, 2005 and 2004; the
consolidated statements of operations, changes in shareholders' equity and
cash
flows (including related notes and schedules, if any) of NewAlliance for each
of
the two (2) years ended 2005 and 2004 as filed by NewAlliance in its Securities
Documents; the audited consolidated balance sheets (including related notes
and
schedules, if any) of NAB, then known as New Haven Savings Bank, for the year
ended 2003 and the consolidated statements of
6
operations,
and changes in cash flows (including related notes and schedules, if any) of
NAB, then known as New Haven Savings Bank, for the year ended 2003.
"NewAlliance
Subsidiary"
shall
mean a Subsidiary controlled by NewAlliance.
"NYSE"
shall
mean the New York Stock Exchange, Inc.
"Option
Consideration"
shall
have the meaning set forth in Section 3.1.4 hereof.
"Options"
shall
mean options to purchase shares of Westbank Common Stock granted pursuant to
the
Westbank Option Plans as set forth in Section 4.1 of the Westbank DISCLOSURE
SCHEDULE.
"Participation
Facility"
shall
have the meaning set forth in Section 4.9.2 hereof.
"PBGC"
shall
mean the Pension Benefit Guaranty Corporation, or any successor
thereto.
"PCAOB"
shall
mean the Public Company Accounting Oversight Board.
"Person"
shall
mean any individual, corporation, partnership, joint venture, association,
trust
or "group" (as that term is defined under the Exchange Act).
"Proxy
Statement-Prospectus"
shall
have the meaning set forth in Section 8.2.1 hereof.
"Rights"
shall
mean warrants, options, rights, convertible securities, stock appreciation
rights and other arrangements or commitments that obligate an entity to issue
or
dispose of any of its capital stock or other ownership interests or that provide
for compensation based on the equity appreciation of its capital
stock.
"SEC"
shall
mean the Securities and Exchange Commission.
"Securities
Act"
shall
mean the Securities Act of 1933, as amended.
"Securities
Documents"
shall
mean all reports, offering circulars, proxy statements, registration statements
and all similar documents filed, or required to be filed, pursuant to the
Securities Laws, provided, however, that SEC Forms 3, 4, 5 and 144 and Schedules
13D and 13G shall not be deemed to be Securities Documents.
"Securities
Laws"
shall
mean the Securities Act, the Exchange Act and the rules and regulations of
the
SEC promulgated thereunder.
"Severance
Plan"
shall
have the meaning set forth in Section 7.5.4 hereof.
"Stock
Conversion Number"
shall
have the meaning set forth in Section 3.2 hereof.
"Stock
Election Price"
shall
have the meaning set forth in Section 3.1.2 hereof.
7
"Stock
Election Consideration"
shall
have the meaning set forth in Section 3.1.2 hereof.
"Stock
Merger Consideration"
shall
have the meaning set forth in Section 3.1.5 hereof.
"Subsidiary"
shall
have the meaning set forth in Rule 1-02 of Regulation S-X of the
SEC.
"Superior
Proposal"
shall
have the meaning set forth in Section 6.10 hereof.
"Surviving
Bank"
shall
mean NAB as the resulting institution of the Bank Merger.
"Surviving
Corporation"
shall
have the meaning set forth in Section 2.1 hereof.
"Tax"
shall
have the meaning set forth in Section 4.10.5 hereof.
"Tax
Return"
shall
have the meaning set forth in Section 4.10.5 hereof.
"Terminated
Employees"
shall
have the meaning set forth in Section 6.17 hereof.
"Termination
Date"
shall
mean May 1, 2007.
"WB"
shall
mean WB, a Massachusetts-chartered bank and trust company with its principal
offices located at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇-▇▇▇▇.
"Westbank"
shall
mean Westbank, a Massachusetts corporation with its principal office located
at
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇.
"Westbank
Common Stock"
shall
mean the common stock, par value $2.00 per share, of Westbank.
"Westbank
DISCLOSURE SCHEDULE"
shall
mean a written, signed disclosure schedule delivered by Westbank to NewAlliance
specifically referring to the appropriate section of this Agreement and
describing in reasonable detail the matters contained therein.
"Westbank
Employee Plan(s)"
shall
mean all stock option, employee stock purchase, stock bonus and any other
stock-based plans, qualified pension or profit-sharing plans, any deferred
compensation, non-qualified plan or arrangement, (including employment, change
of control or other severance agreements), supplemental retirement, consultant,
bonus, retiree, medical or group insurance contract or any other material
incentive, health and welfare or employee benefit plan or agreement maintained
for the benefit of any of the employees or former employees or directors of
Westbank or any Westbank Subsidiary, whether written or oral as in effect at
the
time of the execution of this Agreement.
"Westbank
Financial Statements"
shall
mean (i) the audited consolidated balance sheets (including related notes and
schedules, if any) of Westbank as of December 31, 2005, 2004 and 2003 and the
consolidated statements of operations, changes in shareholders' equity
8
and
cash
flows (including related notes and schedules, if any) of Westbank for each
of
the three (3) years ended 2005, 2004 and 2003 as filed by Westbank in its
Securities Documents.
"Westbank
Option Plans"
shall
mean the Westbank 1995 Directors Stock Incentive Plan, the Westbank 1996 Stock
Incentive Plan and the Westbank 2006 Equity Incentive Plan.
"Westbank
Shareholder Rights Agreement"
shall
mean the Westbank Amended and Restated Shareholder Rights Agreement dated as
of
November 19, 1997 by and between Westbank and State Street Bank and Trust
Company, as Rights Agent.
"Westbank
Stock Plan"
shall
mean the Westbank 2004 Recognition and Retention Plan and the Westbank 2006
Equity Incentive Plan.
"Westbank
Subsidiary"
shall
mean a Subsidiary controlled by Westbank.
Other
terms used herein are defined in the preamble and elsewhere in this
Agreement.
ARTICLE
II
THE
MERGER
2.1 The
Merger.
As
promptly as practicable following the satisfaction or waiver of the conditions
to each party's respective obligations hereunder, and subject to the terms
and
conditions of this Agreement, at the Effective Time the Merger will be
consummated by the merger of Westbank with and into NewAlliance, with
NewAlliance as the surviving corporation (the "Surviving Corporation") in
accordance with the provisions of the DGCL. At the Effective Time of the Merger,
each share of Westbank Common Stock and each Option will be converted into the
right to receive the Merger Consideration, as applicable, pursuant to the terms
of Article III hereof. The parties agree that the target date for the Effective
Time is January 2, 2007.
2.2 The
Bank Merger.
The
Bank Merger shall be consummated immediately following the Merger.
2.3 Effective
Time.
The
Merger shall be effected by the filing of a certificate of merger with the
Delaware Office of the Secretary of State on the day of the closing ("Closing
Date"), in accordance with the DGCL (the "Closing"). The "Effective Time" of
the
Merger shall be the close of business on the date that the certificate of merger
as to the Merger is filed with the Delaware Office of the Secretary of State,
or
as otherwise stated in such certificate of merger, provided that the Effective
Time shall not occur prior to January 1, 2007. NewAlliance and Westbank each
will use reasonable best efforts to cause the Effective Time to occur on January
2, 2007.
2.4 Certificate
of Incorporation and Bylaws.
The
Certificate of Incorporation and Bylaws of NewAlliance as in effect immediately
prior to the Effective Time shall be the Certificate of Incorporation and Bylaws
of the Surviving Corporation until thereafter amended as provided therein and
by
applicable law.
9
2.5 Directors
and Officers of Surviving Corporation.
The
directors of the Surviving Corporation immediately after the Effective Time
shall be the directors of NewAlliance immediately prior to the Effective Time.
The officers of NewAlliance immediately prior to the Effective Time shall be
the
officers of the Surviving Corporation immediately after the Effective
Time.
2.6 Directors
and Officers of Surviving Bank.
The
directors of NAB immediately after the Effective Time shall be the directors
of
NAB immediately prior to the Effective Time. The officers of NAB immediately
prior to the Effective Time, together with any additional officers of WB as
the
directors of NAB may appoint consistent with Massachusetts Banking Law, shall
be
the officers of NAB immediately after the Effective Time. NAB shall, effective
as of the Effective Time, establish a Massachusetts Division Advisory Board
(the
“Massachusetts Division Advisory Board”), which shall operate pursuant to a
written Charter consistent with this Section 2.6, and on or prior to the Closing
Date, all of the directors of Westbank as of the date immediately prior to
the
Closing Date and the Treasurer and Chief Financial Officer of Westbank, ▇▇▇▇
▇.
▇▇▇▇▇, shall be invited to serve as members of such Massachusetts Division
Advisory Board until at least the first anniversary of the Closing Date.
Massachusetts Division Advisory Board members will not perform policy making
functions but will meet periodically to make recommendations to NAB's management
concerning the operations of its Massachusetts operations. Each member of the
Massachusetts Division Advisory Board shall receive an annual retainer of
$12,000.
2.7 Additional
Actions.
If, at
any time after the Effective Time, the Surviving Corporation or the Surviving
Bank shall consider or be advised that any further assignments or assurances
in
law or any other acts are necessary or desirable (a) to vest, perfect or
confirm, of record or otherwise, in the Surviving Corporation or the Surviving
Bank, title to and possession of any property or right of Westbank (or WB)
acquired or to be acquired by reason of, or as a result of, the Merger or Bank
Merger, or (b) otherwise to carry out the purposes of this Agreement, Westbank,
WB and their officers and directors shall be deemed to have granted to the
Surviving Corporation and Surviving Bank an irrevocable power of attorney to
execute and deliver all such proper deeds, assignments and assurances in law
and
to do all acts necessary or proper to vest, perfect or confirm title to and
possession of such property or rights in the Surviving Corporation or the
Surviving Bank and otherwise to carry out the purposes of this Agreement; and
the officers and directors of the Surviving Corporation and the Surviving Bank
are fully authorized in the name of Westbank, WB or otherwise to take any and
all such action.
2.8 Effects
of the Merger.
At and
after the Effective Time, the Merger shall have the effects set forth in the
DGCL with respect to NewAlliance and Westbank, and the Bank Merger shall have
the effects set forth in Connecticut Banking Law with respect to NAB and
WB.
2.9 Possible
Alternative Structures.
Prior
to the Effective Time, NAB shall be entitled to revise the structure of the
Merger and/or the Bank Merger described in Section 2.1 hereof and the Recitals
hereto, provided that (i) there are no adverse federal or state income tax
consequences to Westbank and its shareholders as a result of the modification;
(ii) the consideration to be paid to the holders of Westbank Common Stock and
Options under this
10
Agreement
is not thereby changed in kind or reduced in amount; (iii) there are no adverse
changes to the benefits and other arrangements provided to or on behalf of
Westbank's directors, officers and other employees; and (iv) such modification
will not delay materially or jeopardize receipt of any required regulatory
approvals or non-objection of any Governmental Entity or otherwise cause any
condition to Closing set forth in Article IX not to be capable of being
fulfilled.
ARTICLE
III
CONVERSION
OF SHARES AND OPTIONS
3.1 Exchange
of Westbank Common Stock; Merger Consideration.
At the
Effective Time, by virtue of the Merger and without any action on the part
of
NewAlliance, NAB, Westbank, WB or the holders of any of the shares of Westbank
Common Stock, the Merger shall be effected in accordance with the following
terms:
3.1.1 All
shares of Westbank Common Stock held in the treasury of Westbank and each share
of Westbank Common Stock owned by NewAlliance or any direct or indirect wholly
owned subsidiary of NewAlliance or of Westbank immediately prior to the
Effective Time (other than shares held in a fiduciary capacity or in connection
with debts previously contracted) shall, at the Effective Time, cease to exist,
and the Certificates for such shares shall be canceled as promptly as
practicable thereafter, and no payment or distribution shall be made in
consideration therefor.
3.1.2 Each
outstanding share of Westbank Common Stock that under the terms of Section
3.2
is to be converted into the right to receive shares of NewAlliance Common Stock
(the "Stock Election Consideration") shall, subject to the provisions of Section
3.3 generally, be converted into and become the right to receive from
NewAlliance that number of shares of NewAlliance Common Stock (the "Stock
Election Price") determined
by dividing $23.00 by the NewAlliance Base Period Trading Price, as may be
adjusted as provided below, computed to four decimal places (the “Exchange
Ratio”); provided,
however,
if the
NewAlliance Base Period Trading Price shall be greater than $14.70, the Exchange
Ratio shall be fixed at 1.5646; provided,
further,
however,
that if
the NewAlliance Base Period Trading Price is less than $13.30, then the Exchange
Ratio shall be fixed at 1.7293.
3.1.3 Each
outstanding share of Westbank Common Stock that under the terms of Section
3.2
is to be converted into the right to receive cash (the "Cash Election
Consideration") shall, subject to the provisions of Section 3.1.7, be converted
into the right to receive a cash payment of twenty-three ($23.00) dollars (the
"Cash Election Price").
3.1.4. Each
Option which remains issued and outstanding as of the Business Day immediately
prior to the Effective Date shall, by virtue of the Merger and without regard
to
any future vesting date thereof, be cancelled and converted into the right
to
receive a cash payment from Westbank or WB on the Business Day immediately
prior
to the Effective Date in an amount determined by multiplying (i) the positive
difference, if any, between the Cash Election Price and the exercise price
of
such Option for each share of Westbank Common Stock subject to
11
such
Option (the "Option Price") by (ii) the number of shares of Westbank Common
Stock subject to such Option (this product shall be referred to as the "Option
Consideration").
The
payment of the Option Consideration, referred to in this Section 3.1.4, to
each
holder of an Option shall be made by Westbank or WB on the Business Day
immediately prior to the Effective Date, subject to a review of the calculation
by NewAlliance. Each of Westbank and WB shall use its reasonable best efforts
to
obtain the written acknowledgement of each holder of a then-outstanding Option
with regard to the cancellation of such Option and the payment therefor in
accordance with the terms of this Agreement. Westbank or WB shall make necessary
tax withholdings from the Option Consideration, as they deem
appropriate.
3.1.5 Notwithstanding
anything to the contrary contained herein, no certificates or scrip representing
fractional shares of NewAlliance Common Stock shall be issued upon the surrender
for exchange of Certificates, no dividend or distribution with respect to
NewAlliance Common Stock shall be payable on or with respect to any fractional
share interest, and such fractional share interests shall not entitle the owner
thereof to vote or to any other rights of a stockholder of NewAlliance. In
lieu
of the issuance of any such fractional share, NewAlliance shall pay to each
former holder of Westbank Common Stock who otherwise would be entitled to
receive a fractional share of NewAlliance Common Stock, an amount in cash
determined by multiplying the Cash Election Price by the fraction of a share
of
NewAlliance Common Stock which such holder would otherwise be entitled to
receive pursuant to Section 3.1.3 hereof (the "Fractional Share Consideration").
No interest will be paid on the cash that the holders of such fractional shares
shall be entitled to receive upon such delivery. For purposes of determining
any
fractional share interest, all shares of Westbank Common Stock owned by a
Westbank shareholder shall be combined so as to calculate the maximum number
of
whole shares of NewAlliance Common Stock issuable to such Westbank
shareholder.
The
Stock
Election Consideration, the Cash Election Consideration and the Fractional
Share
Consideration shall be referred to as the "Stock Merger Consideration," and
the
Stock Merger Consideration and the Option Consideration are sometimes referred
to collectively as the "Merger Consideration."
3.1.6 After
the
Effective Time, shares of Westbank Common Stock shall be no longer outstanding
and shall automatically be canceled and shall cease to exist, and shall
thereafter by operation of this Section 3.1.6 be a right to receive the Merger
Consideration.
3.1.7 Notwithstanding
any other provision of this Agreement to the contrary, if either of the tax
opinions referred to in Section 9.1.5 cannot be rendered because the counsel
charged with providing either of such opinions reasonably determines that the
Merger may not satisfy the continuity of interest requirements applicable to
reorganizations under Section 368(a) of the Code, then NewAlliance shall reduce
the aggregate number of Cash Election Shares, and thereby the aggregate Cash
Election Consideration, by the minimum extent necessary to enable each of such
tax opinions to be rendered, and correspondingly increase the aggregate number
of shares of Westbank Common Stock to be converted into the Stock Election
Price.
3.1.8 Each
unvested restricted share of Westbank Common Stock granted under the Westbank
Stock Plan which is outstanding immediately prior to the date the Westbank
12
shareholders
approve the transactions contemplated by this Agreement shall vest and
become
free of restrictions at the close of business on the day the Westbank
shareholders
approve the transactions contemplated by this Agreement or such earlier date
as
may be agreed to by NewAlliance or provided under the terms of the Westbank
Stock
Plan.
3.2 Proration
and Election Procedures.
The
Parties acknowledge that for United States federal income tax purposes it is
intended that the Merger shall qualify as a reorganization under the provisions
of Section 368(a) of the Code, and this Agreement is intended to be and is
adopted as a plan of reorganization within the meaning of Section 368 of the
Code. Consistent with that intent, notwithstanding any provision of this
Agreement to the contrary, the aggregate Merger Consideration payable to all
holders of Westbank Common Stock shall include such number of shares of
NewAlliance Common Stock as is necessary in order that the aggregate number
of
shares of Westbank Common Stock exchanged through the Merger for shares of
NewAlliance Common Stock is fifty percent (50%) of the total number of shares
of
Westbank Common Stock issued and outstanding immediately prior to the Effective
Time (the "Stock Conversion Number"). Subject to the Stock Conversion Number,
holders of Westbank Common Stock may elect to receive shares of NewAlliance
Common Stock or the Cash Election Price in exchange for their shares of Westbank
Common Stock in accordance with the following procedures.
3.2.1 An
election form ("Election Form") will be sent by NewAlliance no later than
fifteen (15) Business Days and no earlier than thirty (30) Business Days prior
to the expected Effective Time (provided that it need not be sent until the
approvals from the Bank Regulators as set forth in Section 8.3 have been
obtained) to each holder of record of Westbank Common Stock permitting such
holder (or in the case of nominee record holders, the beneficial owner through
proper instructions and documentation) to elect to receive, subject to the
pro-ration procedures described in Section 3.2.2, (i) all NewAlliance Common
Stock with respect to each share of such holder's Westbank Common Stock, as
provided herein (the "Stock Election Shares"); (ii) all cash with respect to
each share of such holder's Westbank Common Stock, as provided herein (the
"Cash
Election Shares") or (iii) a combination of Stock Merger Consideration
consisting of a mixture of Stock Election Consideration and Cash Election
Consideration with respect to each share of such holder's Westbank Common Stock,
as provided herein. Any shares of Westbank Common Stock with respect to which
the holder thereof shall not, as of the Election Deadline, have made such an
election by submission to the Exchange Agent on an effective, properly completed
Election Form shall be deemed Non-Election Shares ("Non-Election
Shares").
3.2.2 The
term
"Election Deadline", as used below, shall mean 5:00 p.m., Eastern time, on
a
date determined by NewAlliance, which date shall not be earlier than the
fifteenth (15th)
Business Day following but not including the date of mailing of the Election
Form or such other date as NewAlliance and Westbank shall mutually agree upon,
provided in any event, the Election Deadline shall be at or before the Effective
Time. Any election to receive NewAlliance Common Stock or cash shall have been
properly made only if the Exchange Agent shall have actually received a properly
completed Election Form by the Election Deadline. Any Election Form may be
revoked or changed by the Person submitting such Election Form to the Exchange
Agent by written notice to the Exchange Agent only if such notice is actually
received, including by facsimile, by the Exchange Agent at or prior to
the
13
Election
Deadline. The Certificate or Certificates representing Westbank Common Stock
relating to any revoked Election Form shall be promptly returned without charge
to the Person submitting the Election Form to the Exchange Agent. The Exchange
Agent shall have discretion to determine when any election, modification or
revocation is received and whether any such election, modification or revocation
has been properly made. The Exchange Agent shall promptly calculate the
allocation, if any, among holders of Westbank Common Stock of rights to receive
the Stock Election Price and the Cash Election Price as follows:
If
the
number of Stock Election Shares does not equal the Stock Conversion Number,
then
the Stock Election Shares and the Cash Election Shares will be converted into
the right to receive NewAlliance Common Stock and cash in the following
manner:
(a) If
the
aggregate number of Stock Election Shares (the "Stock Election Number") exceeds
the Stock Conversion Number, then all Westbank Cash Election Shares and all
Non-Election Shares of each holder thereof shall be converted into the right
to
receive the Cash Consideration, and Stock Election Shares of each holder thereof
will be converted into the right to receive the Stock Consideration in respect
of that number of Stock Election Shares equal to the product obtained by
multiplying (x) the number of Stock Election Shares held by such holder by
(y) a
fraction, the numerator of which is the Stock Conversion Number and the
denominator of which is the Stock Election Number, with the remaining number
of
such holder's Stock Election Shares being converted into the right to receive
the Cash Election Consideration; and
(b) If
the
Stock Election Number is less than the Stock Conversion Number (the amount
by
which the Stock Conversion Number exceeds the Stock Election Number being
referred to herein as the "Shortfall Number"), then all Stock Election Shares
shall be converted into the right to receive the Stock Consideration and the
Non-Election Shares and Cash Election Shares shall be treated in the following
manner:
(i) If
the
Shortfall Number is less than or equal to the number of Non-Election Shares,
then all Cash Election Shares shall be converted into the right to receive
the
Cash Election Consideration and the Non-Election Shares of each holder thereof
shall be converted into the right to receive the Stock Consideration in respect
of that number of Non-Election Shares equal to the product obtained by
multiplying (x) the number of Non-Election Shares held by such holder by (y)
a
fraction, the numerator of which is the Shortfall Number and the denominator
of
which is the total number of Non-Election Shares, with the remaining number
of
such holder's Non-Election Shares being converted into the right to receive
the
Cash Election Consideration; or
(ii) If
the
Shortfall Number exceeds the number of Non-Election Shares, then all
Non-Election Shares shall be converted into the right to receive the Stock
Election Consideration, and Cash Election Shares of each holder thereof shall
be
converted into the right to receive the Stock Election Consideration in respect
of that number of Cash Election Shares equal to the product obtained by
multiplying (x) the number of Cash Election Shares held by such holder by (y)
a
fraction, the numerator of which is the amount by which (1) the Shortfall Number
exceeds (2) the total number of Non-Election Shares and the denominator of
which
is the total number of Cash Election
14
Shares,
with the remaining number of such holder's Cash Election Shares being converted
into the right to receive the Cash Election Consideration.
3.3 Procedures
for Exchange of Westbank Common Stock.
3.3.1 NewAlliance
to Make Merger Consideration Available.
At or
before the Effective Time, NewAlliance shall deposit, or shall cause to be
deposited, with the Exchange Agent for the benefit of the holders of Westbank
Common Stock, for exchange in accordance with this Section 3.3, certificates
representing the shares of NewAlliance Common Stock sufficient to pay the Stock
Election Price and an estimated amount of cash sufficient to pay the aggregate
Cash Election Consideration and the aggregate Fractional Share Consideration
payable hereunder (such cash and certificates for shares of NewAlliance Common
Stock, together with any dividends or distributions with respect thereto, being
hereinafter referred to as the "Exchange Fund").
3.3.2 Exchange
of Certificates.
No
later than 3 Business Days after the Effective Time, NewAlliance shall take
all
steps necessary to cause the Exchange Agent to mail to each holder of a
Certificate or Certificates, a form letter of transmittal for return to the
Exchange Agent and instructions for use in effecting the surrender of the
Certificates for, as the case may be, certificates representing the shares
of
NewAlliance Common Stock, cash in respect of the Cash Election Price, and cash
in respect of the Fractional Share Price. The letter of transmittal (which
shall
be subject to the reasonable approval of Westbank) 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. Upon proper
surrender of a Certificate for exchange and cancellation to the Exchange Agent,
together with a properly completed letter of transmittal, duly executed, the
holder of such Certificate shall be entitled to receive in exchange therefor,
as
applicable, (i) a certificate representing that number of shares (if any) of
NewAlliance Common Stock to which such former holder of Westbank Common Stock
shall have become entitled pursuant to the provisions of Section 3.1.2 hereof,
(ii) a check representing that amount of cash (if any) to which such former
holder of Westbank Common Stock shall have become entitled in respect of the
Cash Election Price pursuant to the provisions of Section 3.1.3 hereof, and
(iii) a check representing the amount of cash (if any) payable in respect of
the
Fractional Share Price, which such former holder has the right to receive in
respect of the Certificate surrendered pursuant to the provisions of Section
3.1.5, and the Certificate so surrendered shall forthwith be cancelled. No
interest will be paid or accrued on the cash payable in lieu of fractional
shares. Certificates surrendered for exchange by any person who is an
"affiliate" of Westbank for purposes of Rule 145(c) under the Securities Act
shall not be exchanged for certificates representing shares of NewAlliance
Common Stock until NewAlliance has received the written agreement of such Person
contemplated by Section 8.4 hereof.
3.3.3 Rights
of Certificate Holders after the Effective Time.
The
holder of a Certificate that prior to the Merger represented issued and
outstanding Westbank Common Stock shall have no rights, after the Effective
Time, with respect to such Westbank Common Stock except to surrender the
Certificate in exchange for the Merger Consideration as provided in this
Agreement. No dividends or other distributions declared after the Effective
Time
with respect to NewAlliance Common Stock shall be paid to the holder of any
unsurrendered Certificate until the holder thereof shall surrender such
Certificate in accordance with Section 3.3. After the
15
surrender
of a Certificate in accordance with Section 3.3, the record holder thereof
shall
be entitled to receive any such dividends or other distributions, without any
interest thereon, which theretofore had become payable with respect to shares
of
NewAlliance Common Stock represented by such Certificate.
3.3.4 Surrender
by Person Other than Record Holders.
If the
Person surrendering a Certificate and signing the accompanying letter of
transmittal is not the record holder thereof, then it shall be a condition
of
the payment of the Stock Merger Consideration that: (i) such Certificate is
properly endorsed to such Person or is accompanied by appropriate stock powers,
in either case signed exactly as the name of the record holder appears on such
Certificate, and is otherwise in proper form for transfer, or is accompanied
by
appropriate evidence of the authority of the Person surrendering such
Certificate and signing the letter of transmittal to do so on behalf of the
record holder; and (ii) the Person requesting such exchange shall pay to the
Exchange Agent in advance any transfer or other taxes required by reason of
the
payment to a Person other than the registered holder of the Certificate
surrendered, or required for any other reason, or shall establish to the
satisfaction of the Exchange Agent that such tax has been paid or is not
payable.
3.3.5 Closing
of Transfer Books.
From
and after the Effective Time, there shall be no transfers on the stock transfer
books of Westbank of the Westbank Common Stock that was outstanding immediately
prior to the Effective Time. If, after the Effective Time, Certificates
representing such shares are presented for transfer to the Exchange Agent,
they
shall be exchanged for the Merger Consideration and canceled as provided in
this
Section 3.3.
3.3.6 Return
of Exchange Fund.
At any
time following the six (6) month period after the Effective Time, NewAlliance
shall be entitled to require the Exchange Agent to deliver to it any portions
of
the Exchange Fund which had been made available to the Exchange Agent and not
disbursed to holders of Certificates (including, without limitation, all
interest and other income received by the Exchange Agent in respect of all
funds
made available to it), and thereafter such holders shall be entitled to look
to
NewAlliance (subject to abandoned property, escheat and other similar laws)
with
respect to any Merger Consideration that may be payable upon due surrender
of
the Certificates held by them. Notwithstanding the foregoing, neither
NewAlliance nor the Exchange Agent shall be liable to any holder of a
Certificate for any Merger Consideration delivered in respect of such
Certificate to a public official pursuant to any abandoned property, escheat
or
other similar law.
3.3.7 Lost,
Stolen or Destroyed Certificates.
In the
event any Certificate shall have been lost, stolen or destroyed, upon the making
of an affidavit of that fact by the person claiming such Certificate to be
lost,
stolen or destroyed and, if required by NewAlliance, the posting by such person
of a bond in such amount as NewAlliance may reasonably direct as indemnity
against any claim that may be made against it with respect to such Certificate,
NewAlliance or the Exchange Agent will issue in exchange for such lost, stolen
or destroyed Certificate the Merger Consideration deliverable in respect
thereof.
3.3.8 Withholding.
NewAlliance or the Exchange Agent will be entitled to deduct and withhold from
the consideration otherwise payable pursuant to this Agreement or the
transactions contemplated hereby to any holder of Westbank Common Stock such
amounts as
16
NewAlliance
(or any Affiliate thereof) or the Exchange Agent are required to deduct and
withhold with respect to the making of such payment under the Code, or any
applicable provision of U.S. federal, state, local or non-U.S. tax law. To
the
extent that such amounts are properly withheld by NewAlliance or the Exchange
Agent, such withheld amounts will be treated for all purposes of this Agreement
as having been paid to the holder of the Westbank Common Stock in respect of
whom such deduction and withholding were made by NewAlliance or the Exchange
Agent.
3.3.9
Reservation
of Shares.
Effective upon the date of this Agreement, NewAlliance shall reserve for
issuance a sufficient number of shares of the NewAlliance Common Stock for
the
purpose of issuing shares of NewAlliance Common Stock to the Westbank
shareholders in accordance with this Article III.
3.3.10
Listing
of Additional Shares.
Prior
to the Effective Time, NewAlliance shall notify the NYSE of the additional
shares of NewAlliance Common Stock to be issued by NewAlliance in exchange
for
the shares of Westbank Common Stock.
ARTICLE
IV
REPRESENTATIONS
AND WARRANTIES OF
WESTBANK
AND WB
Westbank
and WB represent and warrant to NewAlliance and NAB that the statements
contained in this Article IV are correct and complete as of the date of this
Agreement and will be correct and complete as of the Closing Date (as though
made then and as though the Closing Date were substituted for the date of this
Agreement throughout this Article IV), except as set forth in the Westbank
DISCLOSURE SCHEDULE delivered by Westbank to NewAlliance on the date hereof,
and
except as to any representation or warranty which specifically relates to an
earlier date, provided, however, that WB's representations and warranties made
herein are limited to only representations and warranties with respect to
WB.
4.1 Capital
Structure.
The
authorized capital stock of Westbank consists of nine million shares of common
stock, par value $2.00 per share, and one hundred thousand shares of preferred
stock, par value $5.00 per share. As of the date of this Agreement, 4,817,714
shares of Westbank Common Stock are issued and outstanding and 32,298 shares
of
Westbank Common Stock are directly or indirectly held by Westbank as treasury
stock. As of the date of this Agreement there are no shares of Westbank
preferred stock issued or outstanding. All outstanding shares of Westbank Common
Stock have been duly authorized and validly issued and are fully paid and
non-assessable, and none of the outstanding shares of Westbank Common Stock
has
been issued in violation of the preemptive rights of any Person. Except for
(a)
the Westbank Option Plans pursuant to which there are outstanding options to
acquire 471,355 shares
of
Westbank Common Stock, (b) the Westbank Stock Plan pursuant to which 92,505
restricted shares of Westbank Common Stock have been granted, all of which
are
included in the 4,817,714 shares of Westbank Common Stock set forth above as
issued and outstanding and (c) the Westbank Shareholder Rights Agreement,
pursuant to which there are 4,817,714 Units (as defined in the Westbank
Shareholder Rights Agreement) outstanding, a schedule as to all of
17
which
is
set forth in Section 4.1 of the Westbank DISCLOSURE SCHEDULE, there are no
Rights authorized, issued or outstanding with respect to or relating to the
capital stock of Westbank.
4.2 Organization,
Standing and Authority of Westbank.
Westbank is a corporation duly organized, validly existing and in good standing
under the laws of the Commonwealth of Massachusetts with full corporate power
and authority to own or lease all of its properties and assets and to carry
on
its business as now conducted, and is duly licensed or qualified to do business
and is in good standing in each jurisdiction in which its ownership or leasing
of property or the conduct of its business requires such licensing or
qualification except where the failure to be so licensed or qualified would
not
have a Material Adverse Effect on Westbank. Westbank is duly registered as
a
bank holding company under the BHCA. Westbank has heretofore delivered to
NewAlliance and has included as Section 4.2 of the Westbank DISCLOSURE SCHEDULE
true, complete and correct copies of the Articles of Organization and Bylaws
of
Westbank as in effect as of the date hereof.
4.3 Ownership
of Westbank Subsidiaries.
Set
forth in Section 4.3 of the Westbank DISCLOSURE SCHEDULE is the name,
jurisdiction of incorporation and percentage ownership of each direct or
indirect Westbank Subsidiary. Except for (a) capital stock of the Westbank
Subsidiaries, (b) securities and other interests held in a fiduciary capacity
and beneficially owned by third parties or taken in consideration of debts
previously contracted, and (c) securities and other interests which are set
forth in Section 4.3 of the Westbank DISCLOSURE SCHEDULE, Westbank does not
own
or have the right or obligation to acquire, directly or indirectly, any
outstanding capital stock or other voting securities or ownership interests
of
any corporation, bank, savings association, partnership, joint venture or other
organization, other than investment securities representing not more than five
percent (5%) of the outstanding capital stock of any entity. The outstanding
shares of capital stock or other ownership interests of each Westbank Subsidiary
that are owned by Westbank or any Westbank Subsidiary have been duly authorized
and validly issued, are fully paid and non-assessable and are directly or
indirectly owned by Westbank free and clear of all liens, claims, encumbrances,
charges, pledges, restrictions or rights of third parties of any kind
whatsoever. No Rights are authorized, issued or outstanding with respect to
the
capital stock or other ownership interests of any Westbank Subsidiary and there
are no agreements, understandings or commitments relating to the right of
Westbank to vote or to dispose of such capital stock or other ownership
interests.
4.4 Organization,
Standing and Authority of Westbank Subsidiaries.
Each
Westbank Subsidiary is a banking organization, or corporation or partnership
duly organized, validly existing and in good standing or legal existence, as
appropriate, under the laws of the jurisdiction in which it is organized. Each
Westbank Subsidiary (i) has full power and authority to own or lease all of
its
properties and assets and to carry on its business as now conducted, and (ii)
is
duly licensed or qualified to do business and is in good standing or legal
existence, as appropriate, in each jurisdiction in which its ownership or
leasing of property or the conduct of its business requires such qualification
except where the failure to be so licensed or qualified would not have a
Material Adverse Effect on Westbank. Westbank is authorized to own each Westbank
Subsidiary under the BHCA. The deposit accounts of WB are insured by the FDIC
through the DIF to the maximum extent permitted by the FDIA. WB has paid all
premiums and assessments required by the FDIC. Westbank has heretofore delivered
or made available to
18
NewAlliance
and has included as Section 4.4 of the Westbank DISCLOSURE SCHEDULE true,
complete and correct copies of the Articles of Organization and Bylaws of WB
and
each other Westbank Subsidiary as in effect as of the date hereof.
4.5 Authorized
and Effective Agreement.
4.5.1 Each
of
Westbank and WB has all requisite corporate power and authority to enter into
this Agreement and the Bank Merger Agreement, as applicable, and (subject to
receipt of all necessary governmental approvals and the approval of Westbank's
shareholders of this Agreement) to perform all of its obligations under this
Agreement and the Bank Merger Agreement, as applicable. 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
authorized by all necessary corporate action in respect thereof on the part
of
Westbank and WB, except for the approval of this Agreement by Westbank's
shareholders. This Agreement has been duly and validly executed and delivered
by
Westbank and WB and, assuming due authorization and execution by NewAlliance
and
NAB, constitutes the legal, valid and binding obligations of Westbank and WB,
enforceable against Westbank and WB in accordance with its terms, subject,
as to
enforceability, to bankruptcy, insolvency and other laws of general
applicability relating to or affecting creditors' rights and to general equity
principles. The Bank Merger Agreement, upon execution and delivery by WB, will
have been duly and validly executed and delivered by WB and, assuming due
authorization and execution by NAB, will constitute the legal, valid and binding
obligation of WB, enforceable against WB in accordance with its terms, subject,
as to enforceability, to bankruptcy, insolvency, and other laws of general
applicability relating to or affecting creditors' rights and to general equity
principles.
4.5.2 Neither
the execution and delivery of this Agreement by Westbank or WB, the execution
and delivery of the Bank Merger Agreement by WB, nor consummation of the
transactions contemplated hereby or thereby, nor compliance by Westbank and
WB
with any of the provisions hereof or thereof (i) does or will conflict with
or
result in a breach of any provisions of the Articles of Organization or Bylaws
of Westbank or the equivalent documents of any Westbank Subsidiary, (ii) except
as set forth in Section 4.5.2(ii) of the Westbank DISCLOSURE SCHEDULE, violate,
conflict with or result in a breach of any term, condition or provision of,
or
constitute a default (or an event which, with notice or lapse of time, or both,
would constitute a default) under, or give rise to any right of termination,
cancellation or acceleration with respect to, or result in the creation of
any
lien, charge or encumbrance upon any property or asset of Westbank or any
Westbank Subsidiary pursuant to, any material note, bond, mortgage, indenture,
deed of trust, license, lease, agreement or other instrument or obligation
to
which Westbank or any Westbank Subsidiary is a party, or by which any of their
respective properties or assets may be bound or affected, or (iii) subject
to
receipt of all required governmental and shareholder approvals, violate any
order, writ, injunction, decree, statute, rule or regulation applicable to
Westbank or any Westbank Subsidiary.
4.5.3 Except
as
set forth in Section 4.5.3 of the Westbank DISCLOSURE SCHEDULE and except for
(i) filings of applications, notices or other forms with, and consents,
approvals or waivers by, the Federal Reserve Board, the Department, the FDIC,
the Division, the Board of Bank Incorporation, the Connecticut Secretary of
the
State, the Delaware Secretary of State and the Secretary of the Commonwealth
of
Massachusetts; (ii) the filing and effectiveness
19
of
the
Merger Registration Statement with the SEC; and (iii) the approval of this
Agreement by the requisite vote of the shareholders of Westbank, no
consents or approvals of, or filings or registrations with, any Governmental
Entity or with any third party are necessary on the part of Westbank or WB
in
connection with the execution and delivery by Westbank and WB of this Agreement,
the execution and delivery by WB of the Bank Merger Agreement, the consummation
of the Merger by Westbank, and the consummation of the Bank Merger by
WB.
4.5.4 As
of the
date hereof, neither Westbank nor WB has Knowledge of any reasons relating
to
Westbank or WB (including without limitation Community Reinvestment Act
compliance) why all material consents and approvals shall not be procured from
all regulatory agencies having jurisdiction over the Merger or the Bank Merger
as shall be necessary for (i) consummation of the Merger and the Bank Merger,
and (ii) the continuation by NewAlliance and
NAB
after the Effective Time of the business of Westbank and WB as such business
is
carried on immediately prior to the Effective Time, free of any conditions
or
requirements which, in the reasonable opinion of Westbank, could have a Material
Adverse Effect on the business of Westbank or WB or materially impair the value
of Westbank and WB to NewAlliance or NAB.
4.6 Securities
Documents and Regulatory Reports.
4.6.1 Except
as
set forth in Section 4.6.1 of the Westbank DISCLOSURE SCHEDULE, since December
31, 2002, Westbank has timely filed with the SEC and NASDAQ all Securities
Documents required by the Securities Laws, and such Securities Documents, as
the
same may have been amended, complied, at the time filed with the SEC, in all
material respects with the Securities Laws.
4.6.2 Since
December 31, 2002, each of Westbank and WB has duly filed with the Bank
Regulators in correct form the reports required to be filed under applicable
laws and regulations and such reports, as the same may have been amended, were
complete and accurate and in compliance with the requirements of applicable
laws
and regulations in all material respects. Except as set forth in Section 4.6.2
of the Westbank DISCLOSURE SCHEDULE, in connection with the most recent federal
and state Bank Regulator examinations of Westbank and WB, neither Westbank
nor
WB was required to correct or change any action, procedure or proceeding which
Westbank or WB believes has not been corrected or changed as required as of
the
date hereof.
4.7 Financial
Statements.
4.7.1 Westbank
has previously delivered or made available to NewAlliance complete and accurate
copies of the Westbank Financial Statements. The Westbank Financial Statements
have been prepared in accordance with GAAP (including related notes where
applicable) and fairly present in each case in all material respects, the
consolidated financial condition, results of operations, shareholders' equity
and cash flows of Westbank for the respective periods or as of the respective
dates set forth therein, except as indicated in the notes thereto or in the
case
of unaudited statements, as permitted by Form 10-Q.
4.7.2 Each
of
the Westbank Financial Statements referred to in Section 4.7.1 has been prepared
in accordance with GAAP and, if applicable, the accounting pronouncements of
20
the
PCAOB, during the periods involved (except for the absence of footnotes and
customary year-end adjustments in the case of unaudited interim Westbank
Financial Statements). To Westbank's Knowledge, the audits of Westbank and
Westbank Subsidiaries have been conducted in accordance with generally accepted
auditing standards. The books and records of Westbank and the Westbank
Subsidiaries are being maintained in compliance with applicable legal and
accounting requirements, and such books and records accurately reflect in all
material respects all dealings and transactions in respect of the business,
assets, liabilities and affairs of Westbank and its Subsidiaries. The minute
books of Westbank and each Westbank Subsidiary contain complete and accurate
records of all meetings and other corporate actions of their respective
shareholders and Boards of Directors (including all committees for which minutes
are customarily kept) authorized at such meetings held or taken since December
31, 2002 through the date of this Agreement.
4.7.3 Except
(i) as set forth in Section 4.7.3(i) of the Westbank DISCLOSURE SCHEDULE, (ii)
as reflected, disclosed or provided for in the Westbank Financial Statements
as
of December 31, 2005, 2004 and 2003 (including related notes), (iii) for
liabilities incurred since December 31, 2005 in the ordinary course of business
and (iv) for liabilities incurred in connection with this Agreement and the
transactions contemplated hereby, neither Westbank nor any Westbank Subsidiary
has any liabilities, whether absolute, accrued, contingent or otherwise,
material to the financial condition, results of operations or business of
Westbank on a consolidated basis that would be required in accordance with
GAAP
to be reflected on an audited consolidated balance sheet of Westbank or the
notes thereto.
4.8 Material
Adverse Change.
Since
December 31, 2005 to the date hereof (i) Westbank and each Westbank Subsidiary
has conducted its respective business in the ordinary and usual course
(excluding the incurrence of expenses in connection with this Agreement, and
excluding the transactions contemplated hereby), and (ii) no event has occurred
or circumstance arisen that, individually or in the aggregate, has had or is
reasonably likely to have a Material Adverse Effect on Westbank.
4.9 Environmental
Matters.
4.9.1 Except
as
set forth in Section 4.9.1 of the Westbank DISCLOSURE SCHEDULE, with respect
to
Westbank and each Westbank Subsidiary:
(a) To
Westbank's Knowledge, each of Westbank and the Westbank Subsidiaries, the
Participation Facilities and the Loan Properties are, and for the past five
(5)
years have been, in full compliance with, and are not in violation of or liable
under, any Environmental Laws;
(b) Westbank
has received no written notice that there is any suit, claim, action, demand,
executive or administrative order, directive, investigation or proceeding
pending and, to Westbank's Knowledge, there is no such action threatened, and
there is no basis to expect any action before any court, governmental agency
or
other forum against it or any of the Westbank Subsidiaries or any Participation
Facility (x) for alleged noncompliance (including by any predecessor) with,
and
liability under, any Environmental Law or (y) relating to the presence of or
release (as defined herein) into the environment of any Materials of
21
Environmental
Concern (as defined herein), whether or not occurring at or on a site currently
or formerly owned, leased or operated by it or any of the Westbank Subsidiaries
or any Participation Facility or (z) with respect to any property at or to
which
Materials of Environmental Concern were generated, manufactured, refined,
transported, transferred, imported, used, disposed, treated, or processed by
Westbank or any Westbank Subsidiary or any Participation Facility or from which
Materials of Environmental Concern have been transported, treated, stored,
handled, transferred, disposed, recycled, or received;
(c) Westbank
has received no written notice that there is any suit, claim, action, demand,
executive or administrative order, directive, investigation or proceeding
pending and, to Westbank's Knowledge, no such action is threatened, and to
Westbank's Knowledge there is no basis to expect any action before any court,
governmental agency or other forum relating to or against any Loan Property
(or
Westbank or any of the Westbank Subsidiaries in respect of such Loan Property)
(x) relating to alleged noncompliance (including by any predecessor) with,
and
liability under, any Environmental Law or (y) relating to the presence of or
release into the environment of any Materials of Environmental
Concern;
(d) To
Westbank's Knowledge, the real properties, leasehold or other interest in real
property currently or formerly owned or operated by Westbank or any Westbank
Subsidiary (including, without limitation, soil, groundwater or surface water
on, or under the properties, and buildings thereon) are not contaminated with
and do not otherwise contain any Materials of Environmental Concern other than
in amounts permitted under applicable Environmental Law;
(e) Neither
Westbank nor any Westbank Subsidiary has received (and to Westbank's knowledge
there is no reasonable basis to expect) any written notice, demand, letter,
executive or administrative order, directive or request for information from
any
federal, state, local or foreign governmental entity or any third party
indicating that it may be in violation of, or liable under, any Environmental
Law;
(f) To
Westbank's Knowledge, there are no underground storage tanks on, in or under
any
properties currently or formerly owned or operated by Westbank or any of the
Westbank Subsidiaries or any Participation Facility, and no underground storage
tanks have been closed or removed from any properties currently owned or
operated by Westbank or any of the Westbank Subsidiaries or any Participation
Facility, and all underground storage tanks previously existing on any such
properties located in Massachusetts have been removed in accordance with the
Massachusetts Contingency Plan; and
(g) To
Westbank's Knowledge during the period of (s) Westbank's or any of the Westbank
Subsidiaries' ownership or operation of any of their respective currently owned
or operated properties or (t) Westbank's or any of the Westbank Subsidiaries'
participation in the management of any Participation Facility, there has been
no
contamination by or release of Materials of Environmental Concern in, on, under
or affecting such properties, other than in amounts permitted under
Environmental Law. To Westbank's Knowledge, prior to the period of (x)
Westbank's or any of the Westbank Subsidiaries' ownership or operation of any
of
their respective currently owned or operated properties or (y) Westbank's or
any
of Westbank Subsidiaries' participation in the management of any Participation
Facility, there was no
22
contamination
by or release of Materials of Environmental Concern in, on, under or affecting
such properties, other than in amounts permitted under Environmental
Law.
4.9.2 "Loan
Property" means any property in which the applicable party (or a Subsidiary
of
it) currently holds a direct security interest or has held a direct security
interest within the past five (5) years. "Participation Facility" means any
facility in which the applicable party (or a Subsidiary of it) currently
participates or formerly participated in the management (including all property
held as trustee or in any other fiduciary capacity) and, where required by
the
context, includes the owner or operator of such property, but only with respect
to such property.
4.9.3 Except
as
set forth in Section 4.9.3 of the Westbank DISCLOSURE SCHEDULE, Westbank does
not possess and has not conducted or arranged for the conduct of any
environmental studies, reports, analyses, tests or monitoring during the past
five (5) years (other than so-called "Phase I Environmental Site Assessments"
and/or "Phase II Environmental Site Assessments" which did not indicate any
contamination of the environment by Materials of Environmental Concern above
reportable levels) with respect to any properties currently or formerly owned
or
leased by Westbank or any Westbank Subsidiary or any Participation Facility.
Westbank has delivered to NAB true and complete copies and results of any and
all such schedules, reports, analyses, tests or monitoring in its
possession.
4.9.4 Except
as
set forth in Section 4.9.4 of the Westbank DISCLOSURE SCHEDULE, no real property
located in Connecticut and currently or formerly owned or leased by Westbank
or
any Westbank Subsidiary, and, to Westbank's Knowledge, no Loan Property located
in Connecticut and no Participation Facility located in Connecticut meets the
statutory criteria of an "Establishment" as such term is defined pursuant to
the
Connecticut Transfer Act, CGS Section 22a-134 et seq. No condition exists at
any
real property located in Connecticut and currently or formerly owned or leased
by Westbank or any Westbank Subsidiary, or, to Westbank's Knowledge any Loan
Property located in Connecticut or any Participation Facility located in
Connecticut that would require investigation, remediation, or post-remediation
or natural attenuation monitoring under the Connecticut Department of
Environmental Protection's Remediation Standard Regulations, Regulations of
Connecticut State Agencies Sections 22a-133k-1 et seq.
4.10 Tax
Matters.
4.10.1 Westbank
and each Westbank Subsidiary has duly filed all Tax Returns required by
applicable law to be filed by them in respect of all applicable Taxes required
to be paid through the date hereof and will timely file any such Tax Returns
required to be filed prior to the Effective Time with respect to Taxes required
to be paid through the Effective Time. Westbank and each Westbank Subsidiary
have paid, or where payment is not required to have been made, have set up
an
adequate reserve or accrual for the payment of, all Taxes required to be paid
in
respect of the periods covered by such Tax Returns and, as of the Effective
Time, will have paid, or where payment is not required to have been made, will
have set up an adequate reserve or accrual for the payment of, all Taxes for
any
subsequent periods ending on or prior to the Effective Time. Neither Westbank
nor any Westbank Subsidiary will have any liability for any such Taxes in excess
of the amounts so paid or reserves or accruals so established other than
23
Taxes
being contested in good faith as described in Section 4.10.1 of the Westbank
DISCLOSURE SCHEDULE. Except as further set forth in Section 4.10.1 of the
Westbank DISCLOSURE SCHEDULE, as of the date hereof, no audit, examination
or
deficiency or refund litigation with respect to any Tax Returns filed by
Westbank or any Westbank Subsidiary is pending or, to Westbank's Knowledge,
threatened and to Westbank's Knowledge, there is no basis for any Tax authority
to assess any additional Taxes for any period for which Tax Returns have been
filed.
4.10.2 Westbank
and each Westbank Subsidiary has withheld and paid all Taxes required to be
paid
in connection with amounts paid to any employee, independent contractor,
creditor, stockholder or other third party.
4.10.3 Except
as
set forth in Section 4.10.3 of the Westbank DISCLOSURE SCHEDULE, all Tax Returns
filed by Westbank and its Subsidiaries are complete and accurate. Neither
Westbank nor any Westbank Subsidiary is delinquent in the payment of any Tax,
assessment or governmental charge, or has requested any extension of time within
which to file any Tax Returns in respect of any fiscal year or portion thereof
which have not since been filed. Except as set forth in Section 4.10.3 of the
Westbank DISCLOSURE SCHEDULE, there is no pending Tax audit examination, Tax
deficiency assessment or Tax or governmental charges investigation with respect
to Westbank or any Westbank Subsidiary, and there are no deficiencies for any
Tax, assessment or governmental charge that, to Westbank's Knowledge, have
been
proposed, asserted or assessed (tentatively or otherwise) against Westbank
or
any Westbank Subsidiary as a result of any Tax audit examination, Tax deficiency
assessment, or Tax or governmental charges investigation which have not been
settled and paid. There are currently no agreements in effect with respect
to
Westbank or any Westbank Subsidiary to extend the period of limitations for
the
assessment or collection of any Tax and no power of attorney has been granted
by
Westbank and its Subsidiaries with respect to any Tax matter currently in
force.
4.10.4 Except
as
set forth in Section 4.10.4 of the Westbank DISCLOSURE SCHEDULE, neither
Westbank nor any Westbank Subsidiary (i) is a party to any agreement providing
for the allocation or sharing of Taxes (other than a Tax allocation agreement
between Westbank and WB), or (ii) is required to include in income any
adjustment pursuant to Section 481(a) of the Code by reason of a voluntary
change in accounting method initiated by Westbank or any Westbank Subsidiary
(nor does Westbank have any Knowledge that the Internal Revenue Service has
proposed any such adjustment or change of accounting method).
4.10.5 As
used
in this Agreement, "Tax" means any federal, state, local or foreign income,
gross receipts, license, payroll, employment, excise, severance, stamp,
occupation, premium, windfall profits, environmental, customs duties, capital
stock, franchise, profits, withholding, social security (or similar),
unemployment, disability, real property, personal property, sales, use,
transfer, registration, value added, highway, estimated or other tax of any
kind
whatsoever, including any interest, penalties or addition thereto, whether
disputed or not, imposed by any government or quasi-government authority; and
"Tax Return" means any return, declaration, report, claim for refund, or
information return or statement relating to Taxes, including any schedule or
attachment thereto, and including any amendment thereof.
24
4.11 Legal
Proceedings.
Except
as set forth in Section 4.11 of the Westbank DISCLOSURE SCHEDULE, there are
no
actions, suits, claims, governmental investigations or proceedings instituted,
pending or, to the Knowledge of Westbank or any Westbank Subsidiary, threatened
against Westbank or any Westbank Subsidiary or against any asset, interest
or
right of Westbank or any Westbank Subsidiary, or against any officer, director
or employee of any of them, and neither Westbank nor any Westbank Subsidiary
is
a party to any unsatisfied order, judgment or decree.
4.12 Compliance
with Laws.
4.12.1 Each
of
Westbank and the Westbank Subsidiaries has all permits, licenses, certificates
of authority, orders and approvals of, and has made all filings, applications
and registrations with, federal, state, local and foreign governmental or
regulatory bodies that are required in order to permit it to carry on its
business in all material respects as it is currently being conducted; all such
permits, licenses, certificates of authority, orders and approvals are in full
force and effect; and to the Knowledge of Westbank, no suspension or
cancellation of any of the same is threatened.
4.12.2 Except
as
set forth in Section 4.12.2, or 4.9 as to Environmental Laws, of the Westbank
DISCLOSURE SCHEDULE, neither Westbank nor any Westbank Subsidiary is in
violation of its respective Articles of Organization, Charter or other
chartering instrument or Bylaws, has received written notice of any material
uncured violation of any applicable federal, state or local law or ordinance
or
any order, rule or regulation of any federal, state, local or other governmental
agency or body (including, without limitation, all banking (including without
limitation all regulatory capital requirements), municipal securities,
insurance, safety, health, Environmental Law, zoning, anti-discrimination,
antitrust, and wage and hour laws, ordinances, orders, rules and regulations),
or is in default with respect to any order, writ, injunction or decree of any
court, or is in default under any order, license, regulation or demand of any
governmental agency and,
to
the
Knowledge of Westbank, Westbank along with its executive officers and directors
is not in violation of any Securities Laws; and neither Westbank nor any
Westbank Subsidiary has received any written notice or communication from any
federal, state or local governmental authority asserting that Westbank or any
Westbank Subsidiary is in violation of any of the foregoing, which violation
has
not been corrected on a prospective basis in all respects. Neither Westbank
nor
any Westbank Subsidiary is subject to any regulatory or supervisory cease and
desist order, agreement, written directive, memorandum of understanding or
written commitment (other than those of general applicability to all banks
or
holding companies), and none of them has received any written communication
requesting that it enter into any of the foregoing, except as set forth in
Section 4.12.2 of the Westbank DISCLOSURE SCHEDULE. Since December 31, 2002,
no
regulatory agency has initiated or continued any proceeding or, to the Knowledge
of Westbank, investigation into the business or operations of Westbank, or
any
Westbank Subsidiary. Westbank has not received any objection from any regulatory
agency to Westbank's response to any violation, criticism or exception with
respect to any report or statement relating to any examination of Westbank
or
any of the Westbank Subsidiaries.
4.13 Certain
Information.
None of
the information supplied by Westbank, any Westbank Subsidiary or their agents
or
representatives relating to Westbank and its Subsidiaries
25
for
the
purpose of being included or incorporated by reference in the Proxy
Statement-Prospectus, as of the date(s) such Proxy Statement-Prospectus is
mailed to shareholders of Westbank, and up to and including the date of the
meeting of shareholders to which such Proxy Statement-Prospectus relates, will
contain any untrue statement of material fact or omit to state a material fact
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading, provided that information as of a later
date shall be deemed to modify the information as of the earlier
date.
4.14 Employee
Benefit Plans.
4.14.1 Westbank
has set forth in Section 4.14.1 of the Westbank DISCLOSURE SCHEDULE all Westbank
Employee Plans, and Westbank has previously furnished or made available to
NewAlliance accurate and complete copies of the same together with (i) the
actuarial and audited financial reports prepared with respect to any qualified
plans for the last three (3) plan years, (ii) the annual reports filed with
any
governmental agency for any qualified plans for the last three (3) plan years,
(iii) the Summary Annual Report provided to Participants for the last three
(3)
plan years; and (iv) all rulings and determination letters and any open requests
for rulings or letters that pertain to any qualified plan.
4.14.2 None
of
Westbank, any Westbank Subsidiary, any employee pension benefit plan (as defined
in Section 3(2) of ERISA) maintained by any of them and intended to be qualified
under Section 401 of the Code or, to Westbank's Knowledge, any fiduciary of
such
plan has incurred any liability to the PBCG (except for premiums payable in
the
ordinary course) or the Internal Revenue Service with respect to any employee
pension plan of Westbank or any Westbank Subsidiary. In the last five (5) years,
no reportable event under Section 4043(b) of ERISA has occurred with respect
to
any such employee pension benefit plan, other than the transactions contemplated
by this Agreement or events notice of which has been waived by regulations
under
Section 4043 of ERISA.
4.14.3 Except
as
set forth in Section 4.14.3 of the Westbank DISCLOSURE SCHEDULE: (a) neither
Westbank nor any Westbank Subsidiary participates in or has incurred any
liability under Section 4201 of ERISA for a complete or partial withdrawal
from
a multi-employer plan (as such term is defined in ERISA); (b) no liability
under
Title IV of ERISA has been incurred by Westbank or any Westbank Subsidiary
with
respect to any Westbank Employee Plan which is subject to Title IV of ERISA,
or
with respect to any "single-employer plan" (as defined in Section 4001(a) of
ERISA and which is subject to Title IV of ERISA) ("Westbank Defined Benefit
Plan") currently or formerly maintained by Westbank or any entity which is
considered an affiliated employer with Westbank under Section 4001(b) (1) of
ERISA or Section 414 of the Code (an "ERISA Affiliate") since the effective
date
of ERISA that has not been satisfied in full to the extent required by ERISA
from time to time; (c) no Westbank Pension Plan had an "accumulated funding
deficiency" (as defined in Section 302 of ERISA), whether or not waived, as
of
the last day of the end of the most recent plan year ending prior to the date
hereof; (d) the fair market value of the assets of each Westbank Defined Benefit
Plan exceeds the present value of the "benefit liabilities" (as defined in
Section 4001(a) (16) of ERISA) under such Westbank Defined Benefit Plan as
of
the end of the most recent plan year with respect to the respective Westbank
Defined Benefit Plan ending prior to the date hereof, calculated on the basis
of
the actuarial assumptions used in the most recent actuarial valuation for such
Westbank
26
Defined
Benefit Plan as of the date hereof; (e) neither Westbank nor any ERISA Affiliate
has provided, or is required to provide, security to any Westbank Defined
Benefit Plan or to any single-employer plan of an ERISA Affiliate pursuant
to
Section 401(a) (29) of the Code; (f) neither Westbank nor any ERISA Affiliate
has contributed to any "multi-employer plan," as defined in Section 3(37) of
ERISA, on or after September 26, 1980; (g) neither Westbank, nor any ERISA
Affiliate, nor any Westbank Employee Plan, including any Westbank Defined
Benefit Plan, nor any trust created thereunder has engaged in a transaction
in
connection with which Westbank, any ERISA Affiliate, and any Westbank Employee
Plan, including any Westbank Defined Benefit Plan, any such trust or any trustee
or administrator thereof, is subject to either a material civil liability or
penalty pursuant to Section 409, 502(i) or 502(1) of ERISA or a material tax
imposed pursuant to Chapter 43 of the Code.
4.14.4 A
favorable determination letter has been issued by the Internal Revenue Service,
with respect to each Westbank Employee Plan which is an "employee pension
benefit plan" (as defined in Section 3(2) of ERISA) which is intended to qualify
under Section 401 of the Code (a "Westbank Pension Plan"), to the effect that
such plan is qualified under Section 401 of the Code and the trust associated
with such employee pension plan is tax exempt under Section 501 of the Code.
No
such letter has been revoked or, to the best of Westbank's Knowledge, is
threatened to be revoked, and Westbank does not know of any ground on which
such
revocation may be based. Except as set forth in Section 4.14.4 of the Westbank
DISCLOSURE SCHEDULE, neither Westbank nor any Westbank Subsidiary has any
current liability under any such plan that was required to be reflected as
a
liability on the Financial Statements as of December 31, 2005 under GAAP, which
was not reflected on the consolidated statement of financial condition of
Westbank at December 31, 2005 included in the Westbank Financial Statements.
All
contributions required to be made under the terms of any such plan have been
made on a timely basis in all material respects.
4.14.5 Except
as
specifically identified in Section 4.14.5 of the Westbank DISCLOSURE SCHEDULE,
neither Westbank nor any Westbank Subsidiary has any obligations for
post-retirement or post-employment benefits (including but not limited to
health, life or disability insurance for retirees) under any Westbank Employee
Plan, except for coverage required by Part 6 of Title I of ERISA or Section
4980B of the Code, or similar state law, the cost of which is borne by the
insured individual. Full payment has been made (or proper accruals have been
established) of all contributions which are required for periods prior to the
date hereof, and full payment will be so made (or proper accruals will be so
established) of all contributions which are required for periods after the
date
hereof and prior to the Effective Time, under the terms of each Westbank
Employee Plan or ERISA except where the failure to make such payment or accrual
would not result in a Material Adverse Effect to Westbank.
4.14.6 The
Westbank Employee Plans have been operated in compliance in all material
respects with the applicable provisions of ERISA, the Code (including without
limitation, Section 409A thereof to the extent applicable), all regulations,
rulings and announcements promulgated or issued thereunder and all other
applicable governmental laws and regulations.
27
4.14.7 There
are
no pending or, to the Knowledge of Westbank, threatened claims (other than
routine claims for benefits) by, on behalf of or against any of the Westbank
Employee Plans or any trust related thereto or any fiduciary
thereof.
4.14.8 Section
4.14.8 of the Westbank DISCLOSURE SCHEDULE sets forth (i) the maximum amount
that could be paid to each executive officer and director of Westbank or any
Westbank Subsidiary as a result of the transactions contemplated by this
Agreement under all non-tax-qualified Westbank Employee Plans currently in
effect, other than those agreements superceded by the Termination and Release
Agreements being entered into pursuant to Section 7.5.7 hereof; and (ii) the
"base amount" (as such term is defined in Section 280G(b)(3) of the Code) for
each individual covered by an employment or change of control agreement or
who
may otherwise have excess parachute payments under Section 280G of the Code,
calculated as of December 31, 2006 based on compensation through December 31,
2005 and estimated compensation for 2006 for each such individual who it is
estimated at the time of Closing will be a "disqualified individual" within
the
meaning of Final Treasury Regulation Section 1.280G-1, Q&A 15 to
21.
4.14.9 Except
as
set forth in Section 4.14.9 of the Westbank DISCLOSURE SCHEDULE, with respect
to
any Westbank Employee Plan which is an employee welfare benefit plan (within
the
meaning of ERISA Section 3(1) (a "Westbank Welfare Plan"): (i) each such
Westbank Welfare Plan which is intended to meet the requirements for tax-favored
treatment under Subchapter B of Chapter 1 of the Code meets such requirements;
(ii) there is no disqualified benefit (as such term is defined in Code Section
4976(b)) which would subject Westbank to a material tax under Code Section
4976(a); (iii) each Westbank Welfare Plan which is a group health plan (as
such
term is defined in Code Sections 5000(b)(1)) is in material compliance with
the
applicable requirements of Code Section 4980B; and (iv) each such Westbank
Welfare Plan (including any such plan covering former employees of Westbank
or
any Westbank Subsidiary) may be amended or terminated by Westbank or NAB or
NewAlliance on or at any time after the Effective Date without incurring
liability to participants in such Plan thereunder except as required to satisfy
the terms of the Plan.
4.14.10 All
of
the life insurance policies owned by Westbank or WB on the lives of the
directors and employees of Westbank or WB, including those policies held by
rabbi trusts, may be surrendered or otherwise terminated by NewAlliance
following the Effective Time, except as disclosed on Section 4.14.10 of the
Westbank DISCLOSURE SCHEDULE.
4.14.11 With
respect to those directors with a supplemental retirement plan agreement who
have reached normal retirement age and who continue to serve as of the date
of
this Agreement, such directors shall be deemed to have a "Termination of
Service" as defined in their agreement upon completion of the Merger and shall
be entitled to receive the retirement benefits specified in paragraph III(A)
of
such agreements.
4.15 Certain
Contracts.
4.15.1 Except
for this Agreement, and those agreements and other documents which have been
filed as exhibits to Westbank's Securities Documents or set forth in Section
4.15.1 of the Westbank DISCLOSURE SCHEDULE, neither Westbank nor any Westbank
28
Subsidiary
is a party to, bound by or subject to (i) any agreement, contract, arrangement,
commitment or understanding (whether written or oral) that is a "material
contract" within the meaning of Item 601(b)(10) of the SEC's Regulation S-K;
(ii) any collective bargaining agreement with any labor union relating to
employees of Westbank or any Westbank Subsidiary; (iii) any agreement which
by
its terms limits the payment of dividends by Westbank or WB; (iv) any instrument
evidencing or related to material indebtedness for borrowed money whether
directly or indirectly, by way of purchase money obligation, conditional sale,
lease, purchase, guaranty or otherwise, in respect of which Westbank or any
Westbank Subsidiary is an obligor to any Person, which instrument evidences
or
relates to indebtedness other than deposits, repurchase agreements, Federal
Home
Loan Bank of Boston advances, bankers' acceptances, and "treasury tax and loan"
accounts established in the ordinary course of business and transactions in
"federal funds" or which contain financial covenants or other restrictions
(other than those relating to the payment of principal and interest when due)
which would be applicable on or after the Closing Date to Westbank or any
Westbank Subsidiary; (v) any contract (other than this Agreement) limiting
the
freedom, in any material respect, of Westbank or WB to engage in any type of
banking or bank-related business which Westbank or WB is permitted to engage
in
under applicable law as of the date of this Agreement or (vi) any agreement,
contract, arrangement, commitment or understanding (whether written or oral)
that restricts or limits in any material way the conduct of business by Westbank
or any Westbank Subsidiary (it being understood that any non-compete or similar
provision shall be deemed material).
4.15.2 Each
real
estate lease that may require the consent of the lessor or its agent resulting
from the Merger or any prior merger of WB by virtue of a legal conclusion,
prohibition or restriction relating to assignment, by operation of law or
otherwise, or change in control, is listed in Westbank DISCLOSURE SCHEDULE
4.15.2 identifying the section of the lease that contains such prohibition
or
restriction. Subject to any consents that may be required as a result of the
transactions contemplated by this Agreement, to its Knowledge, neither Westbank
nor any Westbank Subsidiary is in default in any material respect under any
material contract, agreement, commitment, arrangement, lease, insurance policy
or other instrument to which it is a party, by which its assets, business,
or
operations may be bound or affected, or under which it or its assets, business,
or operations receive benefits, and there has not occurred any event that,
with
the lapse of time or the giving of notice or both, would constitute such a
default.
4.15.3 The
agreements, contracts, arrangements and instruments referred to in Section
4.15.1 and 4.15.2 are in full force and effect on the date hereof, and neither
Westbank nor any Westbank Subsidiary (nor, to the Knowledge of Westbank, any
other party to any such contract, arrangement or instrument) has materially
breached any provision of, or is in default in any respect under any term of,
any such contract, arrangement or instrument. Except as listed on Section 4.15.3
of the Westbank DISCLOSURE SCHEDULE, no party to the agreements, contracts,
arrangements or instruments referred to in Sections 4.15.1 and 4.15.2 will
have
the right to terminate any or all of the provisions of any such contract, plan,
arrangement or instrument as a result of the execution of, and the transactions
contemplated by, this Agreement. No contract, or similar agreement or
arrangement referred to in Sections 4.15.1 and 4.15.2 to which Westbank or
any
Westbank Subsidiary is a party or under which Westbank or any Westbank
Subsidiary may be liable contains provisions which permit an independent
contractor to terminate it without cause and continue to accrue future benefits
thereunder.
29
4.15.4 Except
as
set forth in Section 4.15.4 of the Westbank DISCLOSURE SCHEDULE, neither
Westbank nor any Westbank Subsidiary has made any payments, is obligated to
make
any payments, or is party to any agreement that could obligate them to make
any
payments in connection with any officer or director in the event of a change
of
control.
4.16 Brokers
and Finders.
Except
as set forth in Section 4.16 of the Westbank DISCLOSURE SCHEDULE, neither
Westbank nor any Westbank Subsidiary nor any of their respective directors,
officers or employees, has employed any broker or finder or incurred any
liability for any broker or finder fees or commissions in connection with the
transactions contemplated hereby.
4.17 Insurance.
Section
4.17 of the Westbank DISCLOSURE SCHEDULE sets forth all policies of insurance
maintained by Westbank or any Westbank Subsidiary as of the date hereof and
any
claims thereunder in excess of $50,000 since December 31, 2002. Except as set
forth in Section 4.17 of the Westbank DISCLOSURE SCHEDULE, since December 31,
2002, neither Westbank nor any Westbank Subsidiary has received any notice
of
termination of any such insurance coverage or increase in the premiums therefor
because of an event at Westbank or at a Westbank Subsidiary, or has any
Knowledge of, or received any written notice that, any such insurance coverage
will be terminated or the premiums therefor increased because of such an event
at Westbank or at a Westbank Subsidiary.
4.18 Properties.
Section
4.18 of the Westbank DISCLOSURE SCHEDULE sets forth the street address of all
real property in which Westbank or any Westbank Subsidiary has an ownership
or
leasehold interest, (specifying, as to each, whether owned or leased and the
date such lease expires), and identifies all properties on which any Westbank
Subsidiary operates a bank branch. All real property and all personal property
integral to the conduct of a banking business owned by Westbank or any Westbank
Subsidiary or presently used by any of them in its respective business is in
good condition (ordinary wear and tear excepted) and is sufficient to carry
on
Westbank's and its Subsidiaries' business in the ordinary course of business
consistent with their past practices. Each of Westbank and each Westbank
Subsidiary has good and marketable title free and clear of all liens,
encumbrances, charges, defaults or equities (other than equities of redemption
under applicable foreclosure laws) to all of such properties and assets, real
and personal, reflected on the consolidated statement of financial condition
of
Westbank contained in the Westbank Financial Statements dated December 31,
2005
or acquired, through merger of otherwise, after such date (other than those
disposed of for fair value after such date), except (i) liens for current taxes
not yet due or payable, (ii) pledges to secure deposits and other liens incurred
in the ordinary course of its banking business, (iii) such imperfections of
title, easements and encumbrances, if any, as are not material in character,
amount or extent, and (iv) as reflected on the consolidated statement of
financial condition of Westbank contained in the Westbank Financial Statements
as of December 31, 2005. All real and personal property leased or licensed
by
Westbank or any Westbank Subsidiary are held pursuant to leases or licenses
that
are valid and enforceable in accordance with their respective terms and, except
as set forth in Section 4.18 of the Westbank DISCLOSURE SCHEDULE, no such real
property lease will terminate or lapse prior to the Effective Time or as a
result of the Merger.
4.19 Labor.
No work
stoppage involving Westbank or any Westbank Subsidiary is pending or, to the
Knowledge of Westbank, threatened. Except as set forth in Section 4.19 of
the
30
Westbank
DISCLOSURE SCHEDULE, neither Westbank nor any Westbank Subsidiary is involved
in, or to the Knowledge of Westbank, threatened with or affected by, any labor
dispute, arbitration, lawsuit or administrative proceeding involving its
employees. Employees of Westbank and the Westbank Subsidiaries are not
represented by any labor union nor are any collective bargaining agreements
otherwise in effect with respect to such employees, and to the Knowledge of
Westbank, there have been no efforts to unionize or organize any employees
of
Westbank or any Westbank Subsidiary.
4.20 Certain
Transactions.
Since
December 31, 2005, neither Westbank nor any Westbank Subsidiary has been a
party
to any off-balance-sheet transactions involving interest rate and currency
swaps, options and futures contracts, or any other similar derivative
transactions, except as set forth in Section 4.20 of the Westbank DISCLOSURE
SCHEDULE.
4.21 Fairness
Opinion.
Westbank has received an oral opinion from ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, Inc.
confirmed in writing to the effect that, subject to the terms, conditions and
qualifications set forth therein, as of the date thereof, the Merger
Consideration to be received by the shareholders of Westbank pursuant to this
Agreement is fair to such shareholders from a financial point of view and ▇▇▇▇▇,
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, Inc. has consented to the inclusion of its written opinion
in the Proxy Statement-Prospectus. Such opinion has not been amended or
rescinded as of the date of this Agreement.
4.22 Loan
Portfolio.
4.22.1 The
allowance for possible losses reflected in Westbank's audited consolidated
statement of financial condition contained in the Westbank Financial Statements
dated December 31, 2005 was, and the allowance for possible losses shown on
the
balance sheets in Westbank's Securities Documents for periods ending after
December 31, 2005 were and will be, as of the dates thereof, in accordance
with
GAAP and consistent with Westbank's past practices.
4.22.2 Section
4.22.2 of the Westbank DISCLOSURE SCHEDULE sets forth a listing, as of June
30,
2006, by account, of: (A) all loans, (1) that are contractually past due ninety
(90) days or more in the payment of principal and/or interest, (2) that are
on
non-accrual status, (3) that as of the date of this Agreement are classified
as
"Impaired" (as contemplated under FAS 114), "Other Loans Specially Mentioned",
"Special Mention", "Substandard", "Doubtful", "Loss", "Classified",
"Criticized", "Watch list", or words of similar import, together with the
principal amount of and accrued and unpaid interest on each such loan and the
identity of the obligor thereunder, (4) where a reasonable doubt exists as
to
the timely future collectibility of principal and/or interest, whether or not
interest is still accruing or the loans are less than ninety (90) days past
due,
(5) where the interest rate terms have been reduced and/or the maturity dates
have been extended subsequent to the agreement under which the loan was
originally created due to concerns regarding the borrower's ability to pay
in
accordance with such initial terms, or (6) where a specific reserve allocation
exists in connection therewith, and (B) all assets classified by Westbank or
any
Westbank Subsidiary as real estate acquired through foreclosure or in lieu
of
foreclosure, and all other assets currently held that were acquired through
foreclosure or in lieu of foreclosure. Section 4.22.2 of the Westbank
DISCLOSURE
31
SCHEDULE
may exclude the listing of any individual loan with an outstanding principal
balance of less than $25,000.
4.22.3 All
loans
receivable (including discounts) and accrued interest entered on the books
of
Westbank and the Westbank Subsidiaries arose out of bona fide
arm's-length transactions, were made for good and valuable consideration in
the
ordinary course of Westbank's or the appropriate Westbank Subsidiary's
respective business, and the notes or other evidences of indebtedness with
respect to such loans (including discounts) are true and genuine and are what
they purport to be, except as set forth in Section 4.22.3 of the Westbank
DISCLOSURE SCHEDULE. Except as set forth in Section 4.22.3 of the Westbank
DISCLOSURE SCHEDULE, the loans, discounts and the accrued interest reflected
on
the books of Westbank and the Westbank Subsidiaries are subject to no defenses,
set-offs or counterclaims (including, without limitation, those afforded by
usury or truth-in-lending laws), except as may be provided by bankruptcy,
insolvency or similar laws affecting creditors' rights generally or by general
principles of equity. Except as set forth in Section 4.22.3 of the Westbank
DISCLOSURE SCHEDULE, and other than loans pledged to the FHLB of Boston, all
such loans are owned by Westbank or the appropriate Westbank Subsidiary free
and
clear of any liens.
4.22.4 All
pledges, mortgages, deeds of trust and other collateral documents or security
instruments relating to the notes or other forms of indebtedness contemplated
in
Section 4.22.3 hereof are, in all respects, valid, true and genuine, and what
they purport to be.
4.23 Required
Vote; Inapplicability of Anti-takeover Statutes.
4.23.1 The
Boards of Directors of Westbank and WB, as applicable, have approved the
acceptance by Westbank and WB of the offer of NewAlliance to enter into this
Agreement and the Bank Merger Agreement and have approved Westbank and WB
entering into this Agreement and WB entering into the Bank Merger Agreement,
and
the transactions contemplated hereby and thereby. The affirmative vote of the
holders of two-thirds (2/3) of the shares of Westbank Common Stock entitled
to
vote is necessary to approve this Agreement and the transactions contemplated
hereby (including the Bank Merger) on behalf of Westbank.
4.23.2 No
"fair
price," "moratorium," "control share acquisition" or other form of anti-takeover
statute or regulation or provision of Westbank's Articles of Organization or
By-Laws is applicable to this Agreement and the transactions contemplated
hereby.
4.23.3 Westbank
has taken all action necessary or appropriate so that (a) the entering into
of
this Agreement and the consummation of the transactions contemplated hereby
do
not and will not, or (b) any act by a third party does not and will not (y)
result in the ability of any person to exercise any Rights (as defined in the
Westbank Shareholder Rights Agreement) under the Westbank Shareholder Rights
Agreement or (z) enable or require any Rights to separate from the shares of
Westbank Common Stock to which they are attached or to be triggered or become
exercisable. No "Distribution Date" or "Stock Acquisition Date" (as such terms
are defined in the Westbank Shareholder Rights Agreement) has occurred or can
occur.
4.24 Material
Interests of Certain Persons.
Except
as set forth in Section 4.24 of the Westbank DISCLOSURE SCHEDULE, no officer
or
director of Westbank or a Westbank
32
Subsidiary,
or any "associate" (as such term is defined in Rule 14a-l under the Exchange
Act) of any such officer or director, (i) has any material interest in any
contract or property (real or personal), tangible or intangible, used in or
pertaining to the business of Westbank or any of the Westbank Subsidiaries,
or
(ii) is indebted to, or has the right under a line of credit to borrow from,
Westbank or any Westbank Subsidiary.
4.25 Joint
Ventures.
Section
4.25 of the Westbank DISCLOSURE SCHEDULE sets forth (i) the identities of all
Joint Ventures in which Westbank or any Westbank Subsidiary is participating,
(ii) the agreements relating to such Joint Ventures, (iii) the identities of
the
other participants in the Joint Venture, (iv) the percentage of the Joint
Venture owned by each participant, (v) copies of the most recent available
financial statements (on an audited basis if available) of such Joint Ventures,
and (vi) the amount of the investment or contractually binding commitment of
Westbank or any Westbank Subsidiary to invest in such Joint
Venture.
4.26 Intellectual
Property.
Except
as set forth in Section 4.26 of the Westbank DISCLOSURE SCHEDULE, Westbank
and
each Westbank Subsidiary own or possess valid and binding licenses and other
rights to use without payment of any material amount, all material patents,
trademarks, trade names, service marks, copyrights and any applications
therefor, schematics, technology, know-how, trade secrets, inventory, ideas,
algorithms, processes, computer programs and applications (in both source code
and object code form) and tangible and intangible proprietary information or
material that are used in their businesses ("Intellectual Property"), and all
such Intellectual Property is described in Section 4.26 of the Westbank
DISCLOSURE SCHEDULE. Neither Westbank nor any Westbank Subsidiary has any
material undisclosed liability with respect to (i) the Intellectual Property
or
(ii) licenses, sublicenses and other agreements as to which Westbank or any
Westbank Subsidiary is a party and pursuant to which Westbank or any Westbank
Subsidiary is authorized to use any third party patents, trademarks or
copyrights, including software which are incorporated in, or form a part of
any
Westbank or any Westbank Subsidiary product.
4.27 Disclosures.
None of
the representations and warranties of Westbank and WB or any of the written
information or documents furnished or to be furnished by Westbank or WB to
NewAlliance in connection with or pursuant to this Agreement or the consummation
of the transactions contemplated hereby (including the Bank Merger), when
considered as a whole, contains or will contain any untrue statement of a
material fact, or omits or will omit to state any material fact required to
be
stated or necessary to make any such information or document, in light of the
circumstances, not misleading.
ARTICLE
V
REPRESENTATIONS
AND WARRANTIES OF NEWALLIANCE AND NAB
NewAlliance
represents and warrants to Westbank that the statements contained in this
Article V are correct and complete as of the date of this Agreement and will
be
correct and complete as of the Closing Date (as though made then and as though
the Closing Date were substituted for the date of this Agreement throughout
this
Article V), except as set forth in the NEWALLIANCE DISCLOSURE SCHEDULE delivered
by NewAlliance to Westbank on the
33
date
hereof and except as to any representation or warranty which specifically
relates to an earlier date. Unless otherwise specified, any reference to
NewAlliance in this Article V shall include NewAlliance and any direct or
indirect Subsidiary of NewAlliance.
5.1 Capital
Structure.
The
authorized capital stock of NewAlliance consists of 190 million shares of common
stock, par value $0.01 per share and 38 million shares of preferred stock,
par
value $0.01 per share. As of the date of this Agreement, 109,777,926 shares
of
NewAlliance Common Stock are issued and outstanding and no shares of preferred
stock are issued or outstanding. All outstanding shares of NewAlliance Common
Stock have been duly authorized and validly issued and are fully paid and
non-assessable, and none of the outstanding shares of NewAlliance Common Stock
has been issued in violation of the preemptive rights of any person, firm or
entity. There are no Rights authorized, issued or outstanding with respect
to or
relating to the capital stock of NewAlliance.
5.2 Organization,
Standing and Authority of NewAlliance.
NewAlliance is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware with full corporate power
and
authority to own or lease all of its properties and assets and to carry on
its
business as now conducted, and is duly licensed or qualified to do business
and
is in good standing or legal existence, as appropriate, in each jurisdiction
in
which its ownership or leasing of property or the conduct of its business
requires such licensing or qualification, except where the failure to be so
licensed or qualified would not have a Material Adverse Effect on NewAlliance.
NewAlliance is duly registered as a bank holding company under the BHCA. True,
complete and correct copies of the Certificate of Incorporation and Bylaws
of
NewAlliance as in effect as of the date hereof are included in its Securities
Documents, more specifically, filed as Exhibits 3.1 and 3.2 respectively to
its
Quarterly Report to the SEC on Form 10-Q filed August 13, 2004.
5.3 Organization,
Standing and Authority of NewAlliance Subsidiaries.
Each
NewAlliance Subsidiary is a savings bank, or corporation or partnership duly
organized, validly existing and in good standing or legal existence, as
appropriate, under the laws of the jurisdiction in which it is organized. Each
NewAlliance Subsidiary (i) has full power and authority to own or lease all
of
its properties and assets and to carry on its business as now conducted, and
(ii) is duly licensed or qualified to do business and is in good standing or
legal existence, as appropriate, in each jurisdiction in which its ownership
or
leasing of property or the conduct of its business requires such qualification
except where the failure to be so licensed or qualified would not have a
Material Adverse Effect on NewAlliance. NewAlliance is authorized to own each
NewAlliance Subsidiary under the BHCA. The deposit accounts of NAB are insured
by the FDIC through the DIF to the maximum extent permitted by the FDIA. NAB
has
paid all premiums and assessments required by the FDIC.
5.4 Authorized
and Effective Agreement.
5.4.1 Each
of
NewAlliance and NAB has all requisite corporate power and authority to enter
into this Agreement and the Bank Merger Agreement, as applicable, and (subject
to receipt of all necessary governmental approvals) to perform all of its
obligations under this Agreement and the Bank Merger Agreement, as applicable.
The execution and delivery of this Agreement and the Bank Merger Agreement
and
the consummation of the
34
transactions
contemplated hereby and thereby have been duly and validly authorized by all
necessary corporate action in respect thereof on the part of NewAlliance and
NAB. This Agreement has been duly and validly executed and delivered by
NewAlliance and NAB and, assuming due authorization, execution and delivery
by
Westbank and WB, constitutes the legal, valid and binding obligation of
NewAlliance and NAB, enforceable against NewAlliance and NAB in accordance
with
its terms, subject, as to enforceability, to bankruptcy, insolvency and other
laws of general applicability relating to or affecting creditors' rights and
to
general equity principles. The Bank Merger Agreement, upon execution and
delivery by NAB, will have been duly and validly executed and delivered by
NAB
and, assuming due authorization and execution by WB, will constitute the legal,
valid and binding obligation of NAB, enforceable against NAB in accordance
with
its terms, subject, as to enforceability, to bankruptcy, insolvency, and other
laws of general applicability relating to or affecting creditors' rights and
to
general equity principles.
5.4.2 Neither
the execution and delivery of this Agreement by NewAlliance or NAB, the
execution and delivery of the Bank Merger Agreement by NAB, nor consummation
of
the transactions contemplated hereby or thereby, nor compliance by NewAlliance
and NAB with any of the provisions hereof or thereof (i) does or will conflict
with or result in a breach of any provisions of the Certificate of Incorporation
or Bylaws of NewAlliance or the equivalent documents of any NewAlliance
Subsidiary, (ii) except as set forth in Section 5.4.2(ii) of the NEWALLIANCE
DISCLOSURE SCHEDULE, violate, conflict with or result in a breach of any term,
condition or provision of, or constitute a default (or an event which, with
notice or lapse of time, or both, would constitute a default) under, or give
rise to any right of termination, cancellation or acceleration with respect
to,
or result in the creation of any lien, charge or encumbrance upon any property
or asset of NewAlliance or any NewAlliance Subsidiary pursuant to, any material
note, bond, mortgage, indenture, deed of trust, license, lease, agreement or
other instrument or obligation to which NewAlliance or any NewAlliance
Subsidiary is a party, or by which any of their respective properties or assets
may be bound or affected, or (iii) subject to receipt of all required
governmental approvals, violate any order, writ, injunction, decree, statute,
rule or regulation applicable to NewAlliance or any NewAlliance
Subsidiary.
5.4.3 Except
as
set forth in Section 5.4.3 of the NEWALLIANCE DISCLOSURE SCHEDULE and except
for
(i) filings of applications, notices or other forms with, and consents,
approvals or waivers by the Federal Reserve Board, the Department, the FDIC,
the
Division, the Board of Bank Incorporation, the Connecticut Secretary of the
State, the Delaware Secretary of State, and the Secretary of the Commonwealth
of
Massachusetts, (ii) the filing and effectiveness of the Merger Registration
Statement with the SEC, and (iii) the approval of this Agreement by the
requisite vote of the shareholders of Westbank, no consents or approvals of
or
filings or registrations with any Governmental Entity or with any third party
are necessary on the part of NewAlliance or NAB in connection with the execution
and delivery by NewAlliance and NAB of this Agreement, the execution and
delivery by NAB of the Bank Merger Agreement, the consummation of the Merger
by
NewAlliance, and the consummation of the Bank Merger by NAB.
5.4.4 As
of the
date hereof, NewAlliance has no Knowledge of any reasons relating to NewAlliance
or NAB (including without limitation Community Reinvestment Act compliance)
why
all material consents and approvals shall not be procured from all regulatory
35
agencies
having jurisdiction over the transactions contemplated by this Agreement and
the
Bank Merger Agreement as shall be necessary for (i) consummation of the
transactions contemplated by this Agreement and the Bank Merger Agreement,
and
(ii) the continuation by NewAlliance and NAB after the Effective Time of the
business of NewAlliance and NAB carried on immediately prior to the Effective
Time, free of any conditions or requirements which, in the reasonable opinion
of
NewAlliance and NAB, could have a Material Adverse Effect on the business of
NewAlliance or NAB.
5.5 Regulatory
Reports.
5.5.1 NewAlliance
has timely filed with the SEC and NASDAQ or NYSE (as appropriate) all Securities
Documents required by the Securities Laws, and such Securities Documents, as
the
same may have been amended, complied, at the time filed with the SEC, in all
material respects with the Securities Laws.
5.5.2 Since
December 31, 2002 and, since April 1, 2004, respectively, NAB and NewAlliance
have duly filed with the Bank Regulators, in correct form, the reports required
to be filed under applicable laws and regulations and such reports were complete
and accurate and in compliance with the requirements of applicable laws and
regulations in all material respects. Except as set forth in Section 5.5.2
of
the NEWALLIANCE DISCLOSURE SCHEDULE, in connection with the most recent federal
and state Bank Regulator examinations of NewAlliance and NAB, neither
NewAlliance nor NAB was required to correct or change any action, procedure
or
proceeding which NewAlliance or NAB believes has not been corrected or changed
as required as of the date hereof.
5.6 Financial
Statements.
5.6.1 NewAlliance
has previously delivered or made available to Westbank complete and accurate
copies of the NewAlliance Financial Statements. The NewAlliance Financial
Statements have been prepared in accordance with GAAP (including related notes
where applicable) and fairly present in each case in all material respects,
the
consolidated financial condition, results of operations, shareholders' equity
and cash flows of NewAlliance and NAB, as applicable, for the respective periods
or as of the respective dates set forth therein, except as indicated in the
notes thereto or in the case of unaudited NewAlliance statements, as permitted
by Form 10-Q.
5.6.2 Each
of
the NewAlliance Financial Statements referred to in Section 5.6.1 have been
or
will be, as the case may be, prepared in accordance with GAAP, and/or as
applicable, the accounting pronouncements of PCAOB, during the periods involved
(except for the absence of footnotes and customary year-end adjustments in
the
case of unaudited interim NewAlliance Financial Statements). The audits of
NewAlliance and NewAlliance Subsidiaries have been conducted in accordance
with
generally accepted auditing standards. The books and records of NewAlliance
and
the NewAlliance Subsidiaries are being maintained in compliance with applicable
legal and accounting requirements, and such books and records accurately reflect
in all material respects all dealings and transactions in respect of the
business, assets, liabilities and affairs of NewAlliance and its Subsidiaries.
The minute books of NewAlliance and each NewAlliance Subsidiary contain complete
and accurate records of all meetings and other
36
corporate
actions of their respective shareholders and Boards of Directors (including
all
committees for which minutes are customarily kept) authorized at such meetings
held or taken since December 31, 2001 through the date of this
Agreement.
5.6.3 Except
(i) as set forth in Section 5.6.3 of the NEWALLIANCE DISCLOSURE SCHEDULE, (ii)
as reflected, disclosed or provided for in the NewAlliance Financial Statements
as of December 31, 2005 (including related notes), (iii) for liabilities
incurred since December 31, 2005 in the ordinary course of business and (iv)
for
liabilities incurred in connection with this Agreement and the transactions
contemplated hereby, neither NewAlliance nor any NewAlliance Subsidiary has
any
liabilities, whether absolute, accrued, contingent or otherwise, material to
the
financial condition, results of operations or business of NewAlliance on a
consolidated basis that would be required in accordance with GAAP to be
reflected on an audited consolidated balance sheet of NewAlliance or the notes
thereto.
5.7 Material
Adverse Change.
Since
December 31, 2005 to the date hereof (i) NewAlliance and each NewAlliance
Subsidiary has conducted its respective business in the ordinary and usual
course (excluding the incurrence of expenses in connection with this Agreement,
and excluding the transactions contemplated hereby) and (ii) no event has
occurred or circumstance arisen that, individually or in the aggregate, has
had
or is reasonably likely to have a Material Adverse Effect on
NewAlliance.
5.8 Compliance
with Laws.
5.8.1 Each
of
NewAlliance and the NewAlliance Subsidiaries has all permits, licenses,
certificates of authority, orders and approvals of, and has made all filings,
applications and registrations with, federal, state, local and foreign
governmental or regulatory bodies that are required in order to permit it to
carry on its business in all material respects as it is currently being
conducted; all such permits, licenses, certificates of authority, orders and
approvals are in full force and effect; and to the Knowledge of NewAlliance,
no
suspension or cancellation of any of the same is threatened.
5.8.2 Except
as
set forth in Section 5.8.2 of the NEWALLIANCE DISCLOSURE SCHEDULE, neither
NewAlliance nor any NewAlliance Subsidiary is in violation of its respective
Certificate of Incorporation, Charter or other chartering instrument or Bylaws,
or has received written notice of any uncured violation of any applicable
federal, state or local law or ordinance or any order, rule or regulation of
any
federal, state, local or other governmental agency or body (including, without
limitation, all banking (including without limitation all regulatory capital
requirements), municipal securities, insurance, safety, health, Environmental
Law, zoning, anti-discrimination, antitrust, and wage and hour laws, ordinances,
orders, rules and regulations), or is in default with respect to any order,
writ, injunction or decree of any court, or is in default under any order,
license, regulation or demand of any governmental agency and,
to
the
Knowledge of NewAlliance, NewAlliance along with its executive officers and
directors is not in violation of any Securities Laws; and neither NewAlliance
nor any NewAlliance Subsidiary has received any written notice or communication
from any federal, state or local governmental authority asserting that
NewAlliance or any NewAlliance Subsidiary is in violation of any of the
foregoing, which violation has not been corrected on a prospective basis in
all
respects. Neither NewAlliance nor any NewAlliance Subsidiary is subject to
any
37
regulatory
or supervisory cease and desist order, agreement, written directive, memorandum
of understanding or written commitment (other than those of general
applicability to all savings banks or holding companies), and none of them
has
received any written communication requesting that it enter into any of the
foregoing. Since December 31, 2002, no regulatory agency has initiated or
continued any proceeding or, to the Knowledge of NewAlliance, investigation
into
the business or operations of NewAlliance, or any NewAlliance Subsidiary.
NewAlliance has not received any objection from any regulatory agency to
NewAlliance's response to any violation, criticism or exception with respect
to
any report or statement relating to any examination of NewAlliance or any of
the
NewAlliance Subsidiaries.
5.9 Brokers
and Finders.
Except
as set forth in Section 5.9 of the NEWALLIANCE DISCLOSURE SCHEDULE, neither
NewAlliance nor any NewAlliance Subsidiary nor any of their respective
directors, officers or employees, has employed any broker or finder or incurred
any liability for any broker or finder fees or commissions in connection with
the transactions contemplated hereby.
5.10 Labor.
No work
stoppage involving NewAlliance or any NewAlliance Subsidiary is pending or,
to
the Knowledge of NewAlliance, threatened. Except as set forth in Section 5.10
of
the NEWALLIANCE DISCLOSURE SCHEDULE, neither NewAlliance nor any NewAlliance
Subsidiary is involved in, or to the Knowledge of NewAlliance, threatened with
or affected by, any labor dispute, arbitration, lawsuit or administrative
proceeding involving its employees. Employees of NewAlliance and the NewAlliance
Subsidiaries are not represented by any labor union nor are any collective
bargaining agreements otherwise in effect with respect to such employees, and,
to the Knowledge of NewAlliance, there have been no efforts to unionize or
organize any employees of NewAlliance or any NewAlliance
Subsidiary.
5.11 Certain
Transactions.
Since
December 31, 2005, neither NewAlliance nor any NewAlliance Subsidiary has been
a
party to any off-balance-sheet transactions involving interest rate and currency
swaps, options and futures contracts, or any other similar derivative
transactions, except as set forth in Section 5.11 of the NEWALLIANCE DISCLOSURE
SCHEDULE.
5.12 Disclosures.
None of
the representations and warranties of NewAlliance or NAB or any of the written
information or documents furnished or to be furnished by NewAlliance to Westbank
in connection with or pursuant to this Agreement or the consummation of the
transactions contemplated hereby (including the Bank Merger), when considered
as
a whole, contains or will contain any untrue statement of a material fact,
or
omits or will omit to state any material fact required to be stated or necessary
to make any such information or document, in light of the circumstances, not
misleading.
5.13 Tax
Matters.
5.13.1 NewAlliance
and each NewAlliance Subsidiary has duly filed all Tax Returns required by
applicable law to be filed by them in respect of all applicable Taxes required
to be paid through the date hereof and will timely file any such Tax Returns
required to be filed prior to the Effective Time with respect to Taxes required
to be paid through the Effective Time. NewAlliance and each NewAlliance
Subsidiary have paid, or where payment is not required to
38
have
been
made, have set up an adequate reserve or accrual for the payment of all Taxes
required to be paid in respect to the periods covered by such Tax Returns and,
as of the Effective Time, will have paid, or where payment is not required
to
have been made, will have set up an adequate reserve or accrual for the payment
of, all Taxes for any subsequent periods ending on or prior to the Effective
Time, other than Taxes being contested in good faith. Except as set forth in
Section 5.13.1 of the NEWALLIANCE DISCLOSURE SCHEDULE, as of the date hereof,
no
audit examination or deficiency or refund litigation with respect to any Tax
Returns filed by NewAlliance or any NewAlliance Subsidiary is pending or, to
NewAlliance's Knowledge, threatened and to NewAlliance's Knowledge, there is
no
basis for any Tax authority to assess any additional Taxes for any period for
which Tax Returns have been filed.
5.13.2 NewAlliance
and each NewAlliance Subsidiary has withheld and paid all Taxes required to
be
paid in connection with amounts paid to any employee, independent contractor,
creditor, shareholder or other third party.
5.13.3 Except
as
set forth in Section 5.13.3 of the NEWALLIANCE DISCLOSURE SCHEDULE, all Tax
Returns filed by NewAlliance and its Subsidiaries are complete and accurate.
Neither NewAlliance nor any NewAlliance Subsidiary is delinquent in the payment
of any Tax, assessment, or governmental charge, or has requested any extension
of time within which to file any Tax Returns in respect of any fiscal year
or
portion thereof which have not since been filed. There is no pending Tax audit
examination, Tax deficiency assessment or Tax or governmental charges
investigation with respect to NewAlliance or any NewAlliance Subsidiary, and
there are no deficiencies for any Tax, assessment or governmental charge that,
to NewAlliance's Knowledge, have been proposed, asserted or assessed
(tentatively or otherwise) against NewAlliance or any NewAlliance Subsidiary
as
a result of any Tax audit examination, Tax deficiency assessment, or Tax or
governmental charges investigation which have not been settled and paid. There
are currently no agreements in effect with respect to NewAlliance or any
NewAlliance Subsidiary to extend the period of limitations for the assessment
or
collection of any Tax and no power of attorney has been granted by NewAlliance
and its Subsidiaries with respect to any Tax matter currently in
force.
5.13.4 Except
as
set forth in Section 5.13.4 of the NEWALLIANCE DISCLOSURE SCHEDULE, neither
NewAlliance nor any NewAlliance Subsidiary (i) is a party to any agreement
providing for the allocation or sharing of taxes (other than a tax allocation
agreement between NewAlliance and NAB) or (ii) is required to include in income
any adjustment pursuant to Section 481(a) of the Code by reason of a voluntary
change in accounting method initiated by NewAlliance or any NewAlliance
Subsidiary (nor does NewAlliance have any Knowledge that the Internal Revenue
Service has proposed any such adjustment or change of accounting
method).
5.14 Legal
Proceedings.
Except
as disclosed in its Securities Documents, there are no actions, suits, claims,
governmental investigations or proceedings instituted, pending or, to the
Knowledge of NewAlliance or any NewAlliance Subsidiary, threatened against
NewAlliance or any NewAlliance Subsidiary or against any asset, interest, or
right of NewAlliance or any NewAlliance Subsidiary, or against any officer,
director or employee of any of them, other than routine litigation incurred
in
the ordinary course of business and immaterial in amount to the
39
financial
condition of NewAlliance, and neither NewAlliance nor any NewAlliance Subsidiary
is a party to any unsatisfied order, judgment or decree.
5.15 NewAlliance
Common Stock.
The
shares of NewAlliance Common Stock to be issued pursuant to this Agreement,
when
issued in accordance with the terms of this Agreement, will be duly authorized,
validly issued, fully paid and non-assessable and subject to no preemptive
rights.
5.16 Employee
Benefit Plans.
5.16.1 NewAlliance
has set forth in Section 5.16.1 of the NEWALLIANCE DISCLOSURE SCHEDULE the
primary NewAlliance Employee Plans, and NewAlliance has previously furnished
or
made available to Westbank accurate and complete copies of the same together
with (i) the annual reports filed with any governmental agency for any qualified
plans for the last plan year, (ii) the Summary Annual Report provided to
Participants for the last plan year; and (iii) all rulings and determination
letters and any open requests for rulings or letters that pertain to any
qualified plan.
5.16.2 None
of
NewAlliance, any NewAlliance Subsidiary, any employee pension benefit plan
(as
defined in Section 3(2) of ERISA) maintained by any of them and intended to
be
qualified under Section 401 of the Code or, to NewAlliance’s Knowledge, any
fiduciary of such plan has incurred any liability to the PBGC (except for
premiums payable in the ordinary course) or the Internal Revenue Service with
respect to any employee pension plan of NewAlliance or any NewAlliance
Subsidiary. In the last five (5) years, no reportable event under Section
4043(b) of ERISA has occurred with respect to any such employee pension benefit
plan, other than the transactions contemplated by this Agreement or events
notice of which has been waived by regulations under Section 4043 of
ERISA.
5.16.3 A
favorable determination letter has been issued by the Internal Revenue Service,
with respect to each NewAlliance Employee Plan which is an “employee pension
benefit plan” (as defined in Section 3(2) of ERISA) which is intended to qualify
under Section 401 of the Code (a “ NewAlliance Pension Plan”), to the effect
that such plan is qualified under Section 401 of the Code and the trust
associated with such employee pension plan is tax exempt under Section 501
of
the Code. No such letter has been revoked or, to the best of NewAlliance’s
Knowledge, is threatened to be revoked, and NewAlliance does not know of any
ground on which such revocation may be based. Except as set forth in Section
5.16.3 of the NEWALLIANCE DISCLOSURE SCHEDULE, neither NewAlliance nor any
NewAlliance Subsidiary has any current liability under any such plan that was
required to be reflected as a liability on the Financial Statements as of
December 31, 2005 under GAAP, which was not reflected on the consolidated
statement of financial condition of NewAlliance at December 31, 2005 included
in
the NewAlliance Financial Statements. All contributions required to be made
under the terms of any such plan have been made on a timely basis in all
material respects.
5.16.4 The
NewAlliance Employee Plans have been operated in compliance in all material
respects with the applicable provisions of ERISA, the Code, all regulations,
rulings and announcements promulgated or issued thereunder and all other
applicable governmental laws and regulations.
40
5.16.5 There
are
no pending or, to the Knowledge of NewAlliance, threatened claims (other than
routine claims for benefits) by, on behalf of or against any of the NewAlliance
Employee Plans or any trust related thereto or any fiduciary
thereof.
ARTICLE
VI
COVENANTS
OF WESTBANK AND WB
6.1 Conduct
of Business
6.1.1 Affirmative
Covenants.
Except
with the written consent of NewAlliance, during the period from the date of
this
Agreement to the earlier of the Effective Time or the termination of this
Agreement, Westbank will operate its business, and it will cause each of the
Westbank Subsidiaries to operate its business, only in the usual, regular and
ordinary course of business; use its reasonable best efforts in good faith
to
preserve intact its business organization and assets, keep available the present
services of the employees, maintain its rights and franchises, and preserve
the
goodwill of its customers and others with whom business relationships exist;
and
voluntarily take no action which would or be reasonably likely to (i) materially
and adversely affect the ability of Westbank or WB to obtain any necessary
approvals of Governmental Entities required for the transactions contemplated
hereby or under the Bank Merger Agreement or increase the period of time
necessary to obtain such approvals, or (ii) materially and adversely affect
its
ability to perform its covenants and agreements under this Agreement or the
Bank
Merger Agreement.
6.1.2 Negative
Covenants.
Westbank agrees that from the date of this Agreement to the earlier of the
Effective Time or the termination of this Agreement, except as otherwise
specifically permitted or required by this Agreement, or consented to by
NewAlliance in writing, Westbank will not, and will cause each of the Westbank
Subsidiaries not to:
(a) change
or
waive any provision of its Articles of Organization, Charter or Bylaws, except
as required by law;
(b) change
the number of shares of its authorized capital stock;
(c) issue
any
capital stock or issue or grant any option, restricted stock award, warrant,
call, commitment, subscription, right to purchase or agreement of any character
relating to the authorized or issued capital stock of Westbank or any of the
Westbank Subsidiaries, or any securities convertible into shares of such stock;
except that Westbank may issue shares of Westbank Common Stock or permit
treasury shares to become outstanding to satisfy currently outstanding Options
exercised prior to the Effective Date under and in accordance with the terms
of
the Westbank Option Plans, and nothing contained in this Agreement shall be
construed as limiting or restricting the exercise by their holders of any such
currently outstanding Options under and in accordance with the terms of such
Westbank Option Plans prior to the Effective Date;
41
(d) effect
any recapitalization, reclassification, stock dividend, stock split or like
change in capitalization, or redeem, repurchase or otherwise acquire any shares
of its capital stock;
(e) declare
or pay any dividends or other distributions with respect to its capital stock
except that (i) Westbank may continue to pay its regular quarterly cash dividend
of $0.14 per share with payment and record dates consistent with past practice
(provided the declaration of the last quarterly dividend by Westbank prior
to
the Effective Time and the payment thereof shall be coordinated with NewAlliance
so that holders of Westbank Common Stock do not receive dividends on both
Westbank Common Stock and NewAlliance Common Stock received in the Merger in
respect of such quarter or fail to receive a dividend on at least one of the
Westbank Common Stock or NewAlliance Common Stock received in the Merger in
respect of such quarter), and (ii) any Westbank Subsidiary may pay dividends
to
Westbank (as permitted under applicable law or regulations).
(f) enter
into or terminate any contract or agreement (including without limitation any
settlement agreement with respect to litigation) except in the ordinary course
of business;
(g) except
in
the ordinary course of business consistent with past practice, including
non-callable borrowings from the Federal Home Loan Bank of Boston ("FHLBB"),
incur any liabilities or obligations, whether directly or by way of guaranty,
including any obligation for borrowed money whether or not evidenced by a note,
bond, debenture or similar instrument (other than borrowings not exceeding
the
amount reflected on the balance sheet contained in the Westbank Financial
Statements as of December 31, 2005), or acquire any equity, debt, or except
in
the ordinary course of business consistent with past practice, other investment
securities. In addition, any FHLBB borrowings or reverse repurchase agreements
with a maturity of more than one year must be pre-approved by NewAlliance's
Chief Investment Officer;
(h) make
any
capital expenditures in excess of $25,000 individually or $150,000 in the
aggregate, except for expenditures reasonable and necessary to replace existing
assets or to maintain assets in good repair;
(i) except
for commitments issued prior to the date of this Agreement which have not yet
expired and which have been disclosed in Section 6.1.2(i) of the Westbank
DISCLOSURE SCHEDULE, and the renewal of existing lines of credit to
non-criticized borrowers/relationships, make any new loan or other credit
facility commitment (including without limitation, lines of credit and letters
of credit) to any borrower or borrowing relationship in excess of $1.0 million.
In addition, the following require the prior consent of NewAlliance: a
residential loan of $750,000 or greater; a consumer loan of $100,000 or greater;
any new monies extended to currently or previously criticized borrowers or
borrowing relationships (unless the criticism has been corrected); any loan
the
approval for which requires an exception to WB's loan policy as it exists at
the
date of this Agreement; any subprime loans or leveraged buy-out loans; any
commercial or business loan to or for restaurants, airplanes, gas stations
or
marinas; any commercial real estate loan for a special use property for
development or construction of hotels/motels, golf courses, or assisted living
units. Such consent shall not be unreasonably
42
withheld,
conditioned or delayed, and NewAlliance shall be deemed to have provided such
consent unless NewAlliance provides a written refusal to consent within five
Business Days of receipt of any such consent request. Notwithstanding the $1.0
million limitation above, the limitation on total credit to borrowing
relationships of existing borrowers may be up to $2.5 million
in the aggregate if approved by (i) either Westbank's loan committee or
Westbank's Board of Directors and (ii) NewAlliance (through written or oral
consent provided by NewAlliance). During the period from the date of this
Agreement to the Effective Time, within two (2) business days after WB delivers
to the members of any of its credit committees applicable information and
reports for the next upcoming meeting of such committee, Westbank shall provide
to a representative designated by NewAlliance access to the same information
and
reports as are provided to WB's credit committee members with respect to new
loans or renewals thereof and extensions of credit proposed to be made by
WB;
(j) (i) grant
any
increase in rates of compensation to its non-officer employees other than in
the
ordinary course of business consistent with past practice provided that such
increases shall in any event not result in an annual average adjustment of
more
than 4.0%; grant any bonuses to its non-officer employees other than in the
ordinary course of business consistent with past practice and in consultation
with the Chief Operating Officer or NewAlliance; enter into any employment,
severance or similar agreements or arrangements with any director or employee;
except for non-discretionary payments required by agreements existing as of
the
date hereof set forth on Schedule 6.1.2(j)(i) of the Westbank DISCLOSURE
SCHEDULE, grant any increase in rates of compensation to, or, except as
described in Section 6.1.2(j)(i) of the Westbank DISCLOSURE SCHEDULE or as
contemplated by this Agreement, pay or agree to pay any bonus or severance
to,
or provide any other new employee benefit or incentive to its directors or
to
its officers (provided that no bonuses shall be paid to any of the officers
of
Westbank or WB with an employment or change of control agreement); adopt or
amend or terminate any employee benefit plan, pension plan or incentive plan
except as required by law or the terms of such plan or as provided in Section
6.1.2 (j)(i) of the Westbank DISCLOSURE SCHEDULE (provided that any amendment
required by law or the terms of such plan shall be submitted to NewAlliance
and
its counsel for their review prior to such adoption), or permit the vesting
of
any material amount of benefits under any such plan other than pursuant to
the
provisions thereof as in effect on the date of this Agreement; or make any
contributions to any Westbank Employee Plan not in the ordinary course of
business consistent with past practice. Nothing herein shall prevent WB from
paying cash awards pursuant to the "anniversary award program" disclosed in
Section 4.14.1 of the Westbank DISCLOSURE SCHEDULE; or
(ii) increase
the number of (A) non-officer personnel employed by Westbank or any Westbank
Subsidiary over the staffing level previously authorized as set forth in Section
6.1.2(j)(ii) of the Westbank DISCLOSURE SCHEDULE, or (B) officers employed
by
Westbank or any Westbank Subsidiary over the number of such officers currently
so employed, without the prior consent of NewAlliance's Chief Operating Officer,
which consent will not be unreasonably withheld, conditioned or
delayed.
(k) except
as
set forth on Section 6.1.2(k) of the Westbank DISCLOSURE SCHEDULE make an
application for the opening or closing of any, or open or close any, branch
or
automated banking facility;
43
(l) 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 foreclosures,
settlements in lieu of foreclosure or troubled loan or debt restructurings
in
the ordinary course of business consistent with customary banking
practices;
(m) subject
to Section 6.10 hereof, merge into, consolidate with, affiliate with, or be
purchased or acquired by, any other Person, or permit any other Person to be
merged, consolidated or affiliated with it or be purchased or acquired by it,
or, except to realize upon collateral in the ordinary course of its business,
acquire a significant portion of the assets of any other Person, or sell a
significant portion of its assets;
(n) make
any
change in its accounting methods or practices, except changes as may be required
by GAAP, PCAOB accounting pronouncements or by law or regulatory
requirements;
(o) enter
into any off-balance sheet transaction involving interest rate and currency
swaps, options and futures contracts, or any other similar derivative
transactions other than to hedge forward loan sale commitments in the ordinary
course of business consistent with past practice;
(p) invest
in
or commit to invest in, or otherwise increase, decrease or alter its investment
in, any existing or new Joint Venture;
(q) except
as
may be required by changes in applicable law or regulations or in GAAP or PCAOB
accounting pronouncements, make any change in policies in existence as of the
date of this Agreement with regard to the extension of credit, the establishment
of reserves with respect to the possible loss thereon or the charge off of
losses incurred thereon, investment, asset/liability management or other
material banking policies without the prior consent of NewAlliance;
(r) waive,
release, grant or transfer any rights of value or modify or change any existing
agreement or indebtedness to which Westbank or any Westbank Subsidiary is a
party, other than in the ordinary course of business, consistent with past
practice;
(s) other
than required purchases of FHLB stock, purchase any equity securities; or
purchase any other security for its investment portfolio which is either below
Grade A or inconsistent with Westbank's current investment policy, or otherwise
materially alter the mix, maturity, credit or interest rate risk profile of
its
portfolio of investment securities or its portfolio of mortgage-backed
securities (changes in mix, maturity or interest rate risk profile arising
from
(a) sale of all or part of the equity securities portfolio, (b) changes in
open-market interest rates, or (c) changes in prepayment speeds in
collateralized mortgage obligations or mortgage-backed securities are not
subject to the limitations of this Section 6.1.2(t)). In addition, purchases
of
any debt securities with a final maturity of more than five (5) years or for
which a premium of more than 2% is paid, and any purchase of a structured note
or callable security must be pre-approved by NewAlliance's Chief Investment
Officer;
44
(t) other
than in the ordinary course of business and consistent with past practice in
connection with a passive investment corporation subsidiary, enter into, renew,
extend or modify any other transaction with any Affiliate;
(u) except
for the execution of this Agreement, and actions taken or which will be taken
in
accordance with the provisions of this Agreement and performance thereunder,
take any action that would give rise to a right of a severance payment to any
individual under any employment or severance agreement or similar agreement,
provided that if Westbank or any Westbank Subsidiary in good faith terminates
any employee believing it is a for cause termination, and the employee
ultimately is determined to be entitled to severance or other compensation,
the
termination shall not be deemed to be a violation of this
Agreement;
(v) except
for the execution of this Agreement, and actions taken or which will be taken
in
accordance with the provisions of this Agreement, take any action that would
give rise to an acceleration of the right to payment to any individual under
any
Westbank Employee Plan, provided that if Westbank or any Westbank Subsidiary
in
good faith terminates any employee believing it is a for cause termination,
and
the employee ultimately is determined to be entitled to acceleration of any
payment, the termination shall not be deemed to be a violation of this
Agreement;
(w) accelerate
the vesting of unvested restricted stock awards granted pursuant to the Westbank
Stock Plan to a date earlier than the date the Westbank shareholders approve
the
transactions contemplated by this Agreement;
(x) without
the prior consultation and consent, not to be unreasonably withheld, of
NewAlliance's Executive Vice President - Business and Retail Banking Services,
acquire a participation of $1.0 million or more in any loan that would properly
be included in the Westbank Commercial and Industrial Loan
Portfolio;
(y) enter
into any new or depart from any existing line of business without the prior
consent of NewAlliance's Chief Operating Officer, which consent shall not be
unreasonably withheld, conditioned or delayed;
(z) materially
increase or decrease the rate of interest paid on time deposits or certificates
of deposit, except in response to market conditions and in a manner and pursuant
to policies consistent with past practices;
(aa) purchase
or sell any residential or consumer loan pool which, individually or when
aggregated with other sales or purchases prior to the Effective Time, would
exceed $1.0 million without
prior approval of NewAlliance's Chief Investment Officer;
(bb) elect
or
appoint a new director;
(cc) take
any
action that would prevent or impede the Merger or the Bank Merger from
qualifying as a tax-free reorganization within the meaning of Section 368(a)
of
the Code;
45
(dd) take
any
action that is intended or is reasonably likely to result in (x) any of its
representations and warranties set forth in this Agreement being or becoming
untrue in any material respect at any time at or prior to the Effective Time,
(y) any of the conditions to the Merger set forth in Article IX not being
satisfied or (z) a material violation of any provision of this Agreement or
the
Bank Merger Agreement, except, in each case, as may be required by applicable
law or regulation; or
(ee) agree
to
do any of the foregoing.
6.2 Current
Information.
During
the period from the date of this Agreement to the Effective Time, Westbank
will
cause one or more of its representatives to confer with representatives of
NewAlliance and report on the general status of its ongoing operations at such
times as NewAlliance may reasonably request, which reports shall include, but
not be limited to, discussion of the possible termination by Westbank or WB
of
third-party service provider arrangements effective at the Effective Time or
at
a date thereafter, non-renewal of personal property leases and software licenses
used by Westbank or any of its Subsidiaries in connection with its systems
operations, retention of outside consultants and additional employees to assist
with the conversion, and outsourcing, as appropriate, of proprietary or
self-provided system services, it being understood that Westbank shall not
be
obligated to take any such action prior to the Effective Time and, unless
Westbank otherwise agrees, no conversion shall take place prior to the Effective
Time. Westbank will promptly notify NewAlliance of any material change from
the
normal course of the business of Westbank or any Westbank Subsidiary or in
the
operation of the properties of Westbank or any Westbank Subsidiary and, to
the
extent permitted by applicable law, 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 Westbank
or any Westbank Subsidiary. Westbank will also provide NewAlliance such
information with respect to such events as NewAlliance may reasonably request
from time to time. Within twenty-five (25) days after the end of each month,
Westbank will deliver to NewAlliance a consolidated balance sheet and a
consolidated statement of operations, without related notes, for such month
prepared in accordance with its current financial reporting
practices.
6.3 Access
to Properties and Records.
In
order to facilitate the consummation of the Merger and the Bank Merger and
the
integration of the business and operations of the parties, subject to Section
12.1 hereof and subject to applicable laws relating to exchange of information,
Westbank will permit NewAlliance and its officers, employees, counsel,
accountants and other authorized representatives, access, upon reasonable
notice, to its personnel and properties and those of the Westbank Subsidiaries,
and shall disclose and make available to NewAlliance during normal business
hours throughout the period prior to the Effective Time all of the books, papers
and records of Westbank or any Westbank Subsidiary relating to the assets,
properties, operations, obligations and liabilities, including, but not limited
to, all books of account (including the general ledger), tax records, minute
books of directors' (other than minutes that discuss any of the transactions
contemplated by this Agreement or other strategic alternatives) and
shareholders' meetings, organizational documents, Bylaws, material contracts
and
agreements, filings with any regulatory authority, litigation files, plans
affecting employees, and any other business activities or prospects in which
NewAlliance may have a reasonable interest; provided, however, that Westbank
shall not be required to take any action that would provide
46
access
to
or to disclose information where such access or disclosure would violate or
prejudice the rights or business interests or confidences of any customer or
other Person or would result in the waiver by it of the privilege protecting
communications between it and any of its counsel. In addition, Westbank and
the
Westbank Subsidiaries shall not be required to disclose any analysis, minutes,
or other materials pertaining to the financial or other evaluation or discussion
of (i) this Agreement or the transactions contemplated herein, or (ii) any
third
party proposal to acquire a controlling interest in Westbank. Westbank shall
provide and shall request its auditors to provide NewAlliance with such
historical financial information regarding Westbank and any Westbank Subsidiary
(and related audit reports and consents) as NewAlliance may reasonably request
for securities disclosure purposes. NewAlliance shall use reasonable efforts
to
minimize any interference with Westbank's and any Westbank Subsidiary's regular
business operations during any such access to Westbank's or any Westbank
Subsidiary's personnel, property, books or records. Westbank and its
Subsidiaries shall permit NewAlliance, at NewAlliance's expense, to cause
so-called "Phase I Environmental Site Assessments" and/or "Phase II
Environmental Site Assessments" to be performed at any physical location owned
or operated by Westbank or any Westbank Subsidiary and, to the extent Westbank
or the applicable Westbank Subsidiary has the contractual right to do so, at
any
Loan Property or Participation Facility. NewAlliance agrees to indemnify and
hold harmless, Westbank, each Westbank Subsidiary, and any landlord or other
Persons with an interest in the real property, from and against any damages,
claims, losses or expenses of any kind, including reasonable attorneys fees,
pertaining to or arising from any entry onto, or any assessments or other
studies undertaken by NewAlliance with respect to, any such real property under
this Section.
6.4 Financial
and Other Statements.
6.4.1 Promptly
upon receipt thereof, Westbank will furnish to NewAlliance copies of each
annual, interim or special audit of the books of Westbank and the Westbank
Subsidiaries made by its independent accountants and/or its internal auditors
and copies of all internal control reports submitted to Westbank by such
accountants and/or internal auditors in connection with each annual, interim
or
special audit of the financial statements of Westbank and the Westbank
Subsidiaries made by such accountants and/or internal auditors.
6.4.2 As
soon
as reasonably available, but in no event later than the date such documents
are
filed with the SEC, Westbank will deliver to NewAlliance any and all Securities
Documents filed by it with the SEC under the Securities Laws. As soon as
practicable, Westbank will furnish to NewAlliance copies of all such financial
statements and reports as it or any Westbank Subsidiary shall send to its
shareholders, the FDIC, the FRB, the Division or any other regulatory authority,
except as legally prohibited thereby.
6.4.3 Westbank
will advise NewAlliance promptly of the receipt of any examination report of
any
Bank Regulator with respect to the condition or activities of Westbank or any
of
the Westbank Subsidiaries.
6.4.4 Westbank
will promptly furnish to NewAlliance such additional financial data as
NewAlliance may reasonably request, including without limitation, detailed
monthly loan reports, deposit reports, asset liability reports, pricing
committee reports, liquidity reports and investment reports.
47
6.5 Maintenance
of Insurance.
Westbank shall continue to maintain, and shall cause its Subsidiaries to
continue to maintain, such insurance in such amounts as are reasonable to cover
such risks as are consistent with its past practices.
6.6 Disclosure
Supplements.
From
time to time prior to the Effective Time, Westbank and WB will promptly
supplement or amend the Westbank DISCLOSURE SCHEDULE delivered in connection
herewith with respect to any matter hereafter arising which, if existing,
occurring or known at the date of this Agreement, would have been required
to be
set forth or described in such Westbank DISCLOSURE SCHEDULE or which is
necessary to correct any information in such Westbank DISCLOSURE SCHEDULE which
has been rendered materially inaccurate thereby. No supplement or amendment
to
such Westbank DISCLOSURE SCHEDULE shall be deemed to have modified the
representation, warranties and covenants for the purpose of determining
satisfaction of the conditions set forth in Article IX. Notwithstanding anything
to the contrary contained herein, no failure to provide any such supplement
or
amendment to the Westbank DISCLOSURE SCHEDULE shall constitute the failure
of
any condition set forth in Article IX to be satisfied unless the underlying
breach or inaccuracy would individually or in the aggregate result in the
failure of a condition set forth in Article IX to be satisfied.
6.7 Consents
and Approvals of Third Parties.
Westbank shall use all reasonable best efforts in good faith to obtain as soon
as practicable all consents and approvals of any other persons necessary or
desirable for the consummation of the transactions contemplated by this
Agreement and the Bank Merger Agreement. Without limiting the generality of
the
foregoing, Westbank shall utilize the services of a professional
proxy-soliciting firm to help obtain the shareholder vote required to be
obtained by it hereunder.
6.8 Reasonable
Best Efforts.
Subject
to the terms and conditions herein provided, Westbank shall use its reasonable
best efforts in good faith to take, or cause to be taken, all action and to
do,
or cause to be done, all things necessary, proper or advisable under applicable
laws and regulations to consummate and make effective the transactions
contemplated by this Agreement and the Bank Merger Agreement.
6.9 Failure
to Fulfill Conditions.
In the
event that Westbank determines that a condition to its obligation to complete
the Merger or the Bank Merger cannot be fulfilled and that it will not waive
that condition, it will promptly so notify NewAlliance.
6.10 Acquisition
Proposals.
(a)
Westbank agrees that neither it nor any of Westbank's Subsidiaries shall, and
that it shall direct and use its reasonable best efforts in good faith to cause
its and each such Subsidiary's directors, officers, employees, agents and
representatives not to, directly or indirectly, initiate, solicit, knowingly
encourage or otherwise facilitate any inquiries or the making of any proposal
or
offer with respect to an Acquisition Proposal. Westbank further agrees that
neither it nor any of its Subsidiaries shall, and that it shall direct and
use
its reasonable best efforts in good faith to cause its and each such
Subsidiary's directors, officers, employees, agents and representatives not
to,
directly or indirectly, engage in any negotiations concerning, or provide any
confidential information or data to, or have any discussions with, any Person
relating to an Acquisition Proposal, or otherwise knowingly facilitate any
effort or
48
attempt
to make or implement an Acquisition Proposal; provided, however, that nothing
contained in this Agreement shall prevent Westbank or its Board of Directors
from (A) complying with its disclosure obligations under federal or state law;
(B) providing information in response to a request therefor by a Person who
has
made an unsolicited bona fide written Acquisition Proposal if the Westbank
Board
of Directors receives from the Person so requesting such information an executed
confidentiality agreement substantially similar to that entered into with
NewAlliance; (C) engaging in any negotiations or discussions with any Person
who
has made an unsolicited bona fide written Acquisition Proposal or (D)
recommending such an Acquisition Proposal to the shareholders of Westbank,
if
and only to the extent that, in each such case referred to in clause (B), (C)
or
(D) above, (i) the Westbank Board of Directors determines in good faith (after
consultation with outside legal counsel) that such action would be required
in
order for its directors to comply with their respective fiduciary duties under
applicable law, (ii) the Westbank Board of Directors determines in good faith
(after consultation with its financial advisor) that such Acquisition Proposal,
if accepted, is reasonably likely to be consummated, taking into account all
legal, financial and regulatory aspects of the proposal and the Person making
the proposal, and would, if consummated, result in a transaction more favorable
to Westbank's shareholders from a financial point of view than the Merger,
and
(iii) the shareholders of Westbank have not yet approved this Agreement at
the
Westbank Shareholders Meeting. An Acquisition Proposal which is received and
considered by Westbank in compliance with this Section 6.10 and which meets
the
requirements set forth in clause (D) of the preceding sentence is herein
referred to as a "Superior Proposal." Westbank agrees that it will immediately
cease and cause to be terminated any existing activities, discussions or
negotiations with any parties conducted heretofore with respect to any
Acquisition Proposals. Westbank agrees that it will notify NewAlliance orally
within one (1) Business Day, with written notice to follow within three (3)
Business Days thereafter, if any such inquiries, proposals or offers are
received by, any such information is requested from, or any such discussions
or
negotiations are sought to be initiated or continued with Westbank or any of
its
representatives after the date hereof, and the identity of the person making
such inquiry, proposal or offer and the substance thereof and will keep
NewAlliance informed of any material developments with respect thereto
immediately upon the occurrence thereof.
(b) In
the
event that the Board of Directors of Westbank determines in good faith, after
consultation with its financial advisor and upon advice from outside counsel,
that it desires to accept a Superior Proposal, it shall notify NewAlliance
in
writing of its intent to terminate this Agreement in order to enter into an
acquisition agreement or similar agreement (each an "Acquisition Agreement")
with respect to, or recommend acceptance of, the Superior Proposal. Such notice
shall specify all of the terms and conditions of such Superior Proposal and
identify the Person making such Superior Proposal. NewAlliance shall have five
Business Days to evaluate and respond to Westbank's notice. If NewAlliance
delivers to Westbank in writing prior to the expiration of the five Business
Day
period provided above (x) an amendment to Sections 3.1.2, 3.1.3 and 3.1.4 of
this Agreement increasing the Merger Consideration to an amount, and (y)
adjusting other material terms and conditions such that they are at least equal
to that of such Superior Proposal (the "NewAlliance Amendment"), as determined
by Westbank's Board of Directors in the good faith exercise of its fiduciary
duties after consultation with its financial advisors and counsel, then Westbank
shall accept the NewAlliance Amendment and reject the Superior Proposal.
Westbank shall have five Business Days to evaluate the NewAlliance
Amendment.
49
(c) In
the
event that the Board of Directors of Westbank determines under Section 6.10(b)
that the NewAlliance Amendment is not at least equal to the Superior Proposal,
Westbank can terminate this Agreement in order to execute an Acquisition
Agreement with respect to, or to allow its Board to adopt a resolution
recommending acceptance to Westbank's shareholders of, the Superior Proposal
as
provided in Section 11.1.9.
6.11 Board
of Directors and Committee Meetings.
Westbank shall provide to NewAlliance (a) notice of any and all meetings of
its
Board of Directors, Executive Committee, and Loan Committee, which notice shall
be no less timely than the notice required to be provided to Westbank's or
WB's
directors, and (b) copies of all written materials (i) accompanying any such
notices, (ii) presented to the participants of any and all such meetings, and
(iii) copies of drafts of meeting minutes and credit memoranda produced with
respect to such meeting at such time as customarily provided to Westbank's
or
WB's directors, excluding, however, any materials pertaining to NewAlliance,
the
transactions contemplated by this Agreement, or any third party proposal to
acquire a controlling interest in Westbank or WB.
6.12 Reserves
and Merger-Related Costs.
Not
earlier than sixty (60) days before the anticipated Effective Time, to the
extent consistent with GAAP, the rules and regulations of the SEC and applicable
banking laws and regulations, Westbank shall establish such additional accruals
and reserves as may be necessary to conform the accounting reserve practices
and
methods (including credit loss practices and methods) of Westbank and WB to
those of NewAlliance (as such practices and methods are to be applied to
Westbank and WB from and after the Closing Date) and NewAlliance's plans with
respect to the conduct of the business of Westbank and WB following the Merger
and otherwise to reflect Merger-related expenses and costs incurred by Westbank,
provided, however, that Westbank shall not be required to take such action
unless NewAlliance agrees in writing that (i) all conditions to Closing set
forth in Sections 9.1 and 9.3 have been satisfied or waived (except for the
expiration of any applicable waiting periods relating to any governmental
approvals) and (ii) all opinions, certificates, letters and other documents
to
be received by NewAlliance, Westbank or WB on the Closing Date have been
delivered into escrow fully signed, and subject only to the expiration of any
governmental waiting period. Prior to the delivery by NewAlliance of the writing
referred to in the preceding sentence, Westbank shall provide NewAlliance a
written statement, certified without personal liability by the chief executive
officer of Westbank and dated that date of such writing, that the representation
made in Section 4.22.1 hereof with respect to Westbank's allowance for possible
loan losses is true as of such date in all material respects or, alternatively,
setting forth in detail the circumstances that prevent such representation
from
being true as of such date; and no accrual or reserve made by Westbank or any
Westbank Subsidiary pursuant to this subsection, or any litigation or regulatory
proceeding arising out of any such accrual or reserve, shall constitute a breach
of this Agreement within the meaning of Section 11.1.2 hereof. No action shall
be required to be taken by Westbank pursuant to this Section 6.12 if, in the
opinion of Westbank's independent auditors, such action would contravene GAAP.
The recording of any such adjustments shall not be deemed to imply any
misstatement of previously furnished financial statements or information and
shall not be construed as concurrence of Westbank or its management with any
such adjustments.
50
6.13 Transaction
Expenses of Westbank.
6.13.1 For
planning purposes, Westbank shall, within ten (10) days from the date hereof,
provide NewAlliance with Westbank's estimated budget of transaction-related
expenses reasonably anticipated to be payable by Westbank in connection with
this transaction, including the fees and expenses of counsel, accountants,
investment bankers and other professionals. Westbank shall promptly notify
NewAlliance if or when it determines that it expects to exceed its
budget.
6.14 Certain
Policies of Westbank.
Upon
the request of NewAlliance and NAB, Westbank and WB shall, consistent with
GAAP
and regulatory accounting principles, use their reasonable best efforts to
record certain accounting adjustments to the policies of Westbank and WB so
as
to reflect the policies of NewAlliance and NAB and to implement internal control
procedures which are consistent with NewAlliance's and NAB's current internal
control procedures to allow NewAlliance to fulfill its reporting requirement
under Section 404 of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002; provided, however, that
Westbank and WB shall not be obligated to record any such accounting adjustments
or implement any internal control procedures pursuant to this Section 6.14
unless and until Westbank and WB shall be satisfied that the conditions to
the
obligation of the parties to consummate the Merger will be satisfied or waived
on or before the Effective Time and in no event until the day prior to the
Effective Date. Westbank's and WB's representations, warranties and covenants
contained in this Agreement shall not be deemed to be untrue or breached in
any
respect for any purpose as a consequence of any modifications or changes
undertaken solely on account of this Section 6.14.
6.15 Amendments
to Plans.
6.15.1 With
respect to each Westbank Employee Plan subject to Section 409A of the Code,
Westbank agrees to amend each such plan or cause each such plan to be amended
to
the extent necessary to comply with Section 409A of the Code (or to cause such
plan, in whole or in part, to avoid the application of Section 409A of the
Code
by preserving the terms of such plan, and the law in effect, for benefits earned
and vested as of December 31, 2004) prior to the earlier of the Effective Time
or the deadline imposed by the IRS. Such amendments shall be provided to
NewAlliance and its counsel at least ten days prior to their proposed adoption
by Westbank or WB and shall be subject to the prior approval of NewAlliance,
which shall not be unreasonably withheld.
6.15.2 Prior
to
December 31, 2006, Westbank shall amend its Money Purchase Pension plan and
its
401(k) Retirement Plan (to the extent practicable under applicable law) in
order
to exclude from the compensation covered by such plans the following items:
(a)
any compensation recognized with respect to stock options or restricted stock
awards subsequent to June 30, 2006, (b) any severance payments, including any
severance to be prepaid in 2006, and (c) the payment of benefits pursuant to
any
Westbank Employee Plan, including the supplemental retirement plan agreements.
Such amendments shall be provided to NewAlliance and its counsel at least ten
days prior to their proposed adoption by Westbank or WB and shall be subject
to
the prior approval of NewAlliance, which shall not be unreasonably
withheld.
51
6.16 Acceleration
of Restricted Stock Awards.
Westbank
shall take, or shall cause the committee administering the Westbank Stock Plan
to take, all action necessary to cause each unvested restricted share of
Westbank Common Stock to become vested and free of restrictions as of the date
specified in Section 3.1.8 hereof.
6.17 ▇▇
▇▇▇▇▇▇▇▇▇ Payments.
WB shall
pay those of its employees who are not Continuing Employees, as defined in
Section 7.5.2 hereof, whose employment is terminated as of the Effective Time
other than for cause, disability or retirement ("Terminated Employees") in
accordance with a severance plan to be adopted by WB with terms no more generous
than the Severance Plan, as defined in Section 7.5.4 below.
ARTICLE
VII
COVENANTS
OF NEWALLIANCE AND NAB
7.1 Disclosure
Supplements.
From
time to time prior to the Effective Time, NewAlliance will promptly supplement
or amend the NEWALLIANCE DISCLOSURE SCHEDULE delivered in connection herewith
with respect to any material matter hereafter arising which, if existing,
occurring or known at the date of this Agreement, would have been required
to be
set forth or described in such NEWALLIANCE DISCLOSURE SCHEDULE or which is
necessary to correct any information in such NEWALLIANCE DISCLOSURE SCHEDULE
which has been rendered materially inaccurate thereby. No supplement or
amendment to such NEWALLIANCE DISCLOSURE SCHEDULE shall have any effect for
the
purpose of determining satisfaction of the conditions set forth in Article
IX.
7.2 Consents
and Approvals of Third Parties.
NewAlliance shall use all reasonable best efforts in good faith to obtain as
soon as practicable all consents and approvals of any other Persons necessary
or
desirable for the consummation of the transactions contemplated by this
Agreement and the Bank Merger Agreement.
7.3 Reasonable
Best Efforts.
Subject
to the terms and conditions herein provided, NewAlliance shall use all
reasonable best efforts in good faith to take, or cause to be taken, all action
and to do, or cause to be done, all things necessary, proper or advisable under
applicable laws and regulations to consummate and make effective the
transactions contemplated by this Agreement and the Bank Merger
Agreement.
7.4 Failure
to Fulfill Conditions.
In the
event that NewAlliance determines that a condition to its obligation to complete
the Merger or the Bank Merger Agreement cannot be fulfilled and that it will
not
waive that condition, it will promptly so notify Westbank.
7.5 Employees
and Employee Benefits.
7.5.1 NAB
anticipates employing branch office customer service employees of WB and such
other employees of WB as NAB shall reasonably require for the conduct of NAB's
business following the Effective Time. In addition, NAL and WB may wish to
provide retention bonuses to employees of WB who remain employed at WB through
the Effective Time, or at NAB for an interim period following the Effective
Time
as disclosed in Section 7.5.1 of the
52
NewAlliance
DISCLOSURE SCHEDULE, and pursuant to a retention agreement substantially similar
to agreements used by NewAlliance in previous acquisitions.
7.5.2 Except
as
set forth below, each employee of WB who remains employed by NAB following
the
Effective Time (each, a "Continuing Employee") shall be entitled to participate
in (i) such of the employee benefit plans, deferred compensation arrangements,
bonus or incentive plans and/or other compensation and benefit plans of WB
that
NAB may continue for the benefit of Continuing Employees following the Effective
Time and (ii) whatever employee benefit plans and other compensation and benefit
plans that NAB may maintain for the benefit of its similarly situated employees,
if such Continuing Employee is not otherwise then participating in a similar
plan of WB then provided by NAB, in each case other than as set forth in the
Termination, Release and Noncompetition Agreements or the Termination and
Release Agreements referred to in Section 7.5.7 hereof. The parties hereto
acknowledge that Continuing Employees shall not be entitled to receive any
specific level of grants under any stock option plan or restricted stock plan
of
NewAlliance. Any grants that may be made to the Continuing Employees under
any
of such plans will be subject to the sole discretion of the Board of Directors
of NewAlliance or the committee administering such plans. Continuing Employees
shall be eligible to participate in all NewAlliance employee benefit plans
in
accordance with plan documents, including, but not limited to, NewAlliance's
401(k) plan, employee stock ownership plan and defined benefit plan. Continuing
Employees shall not receive credit for service with Westbank and the Westbank
Subsidiaries under any existing NewAlliance employee plan or any NewAlliance
benefit plan in which such employees would be eligible to enroll for any
purposes under any NewAlliance benefit plan, except as set forth below. With
respect to the NewAlliance defined benefit pension plan, each Continuing
Employee shall be credited with service as a WB employee for purposes of
determining eligibility to participate and vesting under such plan (but not
for
purposes of benefit accrual); with respect to the NewAlliance employee stock
ownership plan, each Continuing Employee shall be credited with service as
a WB
employee for purposes of determining eligibility to participate under such
plan
and for purposes of vesting under Section 7.4(b)(1) of the employee stock
ownership plan only with respect to employer matching contributions related
to
the NewAlliance 401(k) plan (but not in any event for purposes of benefit
accrual or for vesting of any other amounts under the employee stock ownership
plan, including but not limited to employer contributions made pursuant to
Section 4.1(b) of the employee stock ownership plan); and with respect to the
NewAlliance 401(k) plan, each Continuing Employee shall be credited with service
as a WB employee for purposes of determining eligibility and vesting.
NewAlliance and NAB shall credit the accrued but unused vacation and sick time
of the Continuing Employees at the Effective Time under the applicable policies
of Westbank, as set forth on Section 7.5.2 of the Westbank DISCLOSURE SCHEDULE.
Nothing herein shall limit the ability of NewAlliance to amend or terminate
any
of the Westbank Employee Plans in accordance with their terms at any time after
the Effective Time. At the Effective Time, NewAlliance shall become the plan
sponsor of each Westbank Employee Plan. Westbank agrees to take or cause to
be
taken such actions as NewAlliance may reasonably request to give effect to
such
assumption. NewAlliance shall have the right and power at any time following
the
Effective Time to amend or terminate or cease benefit accruals under any
Westbank Employee Plan or cause it to be merged with or its assets and
liabilities to be transferred to a similar plan maintained by
NewAlliance.
53
7.5.3 If
Continuing Employees become eligible to participate in a medical, dental, health
or disability plan which is a NewAlliance Employee Plan, NewAlliance shall
cause
each such plan to (i) waive any preexisting condition limitations to the extent
such conditions are covered under the applicable medical, health, dental or
disability plans that are NewAlliance Employee Plans and are covered under
the
applicable medical, health, dental or disability plans that are Westbank
Employee Plans, (ii) credit under such plans any deductible, co-payment and
out-of-pocket expenses incurred by the employees and their covered dependents
during the portion of the plan year prior to such participation and (iii) waive
any waiting period limitation or evidence of insurability requirement which
would otherwise be applicable to such employee on or after the Effective Time,
unless such employee had not yet satisfied any similar limitation or requirement
under an analogous Westbank Employee Plan prior to the Effective
Time.
7.5.4 NAB
and
NewAlliance shall pay and provide severance benefits to Continuing Employees
as
provided under the NAB and NewAlliance severance plan (a copy of which has
been
provided to Westbank and is referred to as the "Severance Plan") treating
service with Westbank, WB and any Westbank Subsidiary as service with NAB and
NewAlliance for all purposes (providing benefits as if the Severance Plan had
been adopted by Westbank, WB, and all Westbank Subsidiaries prior to the
Effective Time) in accordance with its terms as in effect on the date of this
Agreement for a period of twelve months following the Effective Time.
7.5.5 For
a
period of six months following the Effective Time, NewAlliance shall make
available (through written or intra-net notice) to Continuing Employees of
Westbank, WB or a Westbank Subsidiary notification regarding opportunities
for
positions with NewAlliance or NAB, and shall respond to inquiries concerning
open positions at NewAlliance from any former employees of Westbank, WB or
a
Westbank subsidiary, whose employment was terminated at or following the
Effective Time other than for cause, disability or retirement ("Terminated
Employees") and shall consider any application submitted by such persons,
provided, however, that any decision to offer employment to any such person
shall be made in the sole discretion of NewAlliance.
7.5.6 Section
7.5.6 of the Westbank DISCLOSURE SCHEDULE contains all employment and change
of
control, severance, deferred compensation, retirement, salary continuation
and
similar agreements, arrangements, policies or programs with any employee or
director of Westbank or any Westbank Subsidiary and all Westbank Employee Plans
("Benefit Agreements"). At and following the Effective Time, NewAlliance shall
honor, and the Surviving Corporation shall continue to be obligated to perform,
in accordance with their terms, all benefit obligations of Westbank existing
as
of the Effective Time under the Benefit Agreements other than those employment
agreements and change in control agreements covered by the Termination, Release
and Noncompetition Agreements or the Termination and Release Agreements
referenced in Section 7.5.7 hereof. NewAlliance acknowledges that the
consummation of the Merger will constitute a "change-in-control" of Westbank
for
purposes of any of the Benefit Agreements of Westbank (except where otherwise
set forth in Section 7.5.6 of the Westbank DISCLOSURE SCHEDULE). Any employee
or
director of Westbank or any of its Subsidiaries who is a party to an agreement
which has been set forth in Section 7.5.6 of the Westbank DISCLOSURE SCHEDULE
excluding the employment agreements and change in control agreements covered
by
the Termination, Release and Noncompetition Agreements or the Termination and
Release Agreements referenced in Section 7.5.7 hereof (with the agreements
54
not
excluded referred to herein as the "Executive Agreements") who becomes entitled
to benefits thereunder shall be entitled to receive the cash benefits payable
under such agreement at the time and in the amounts provided for by the
agreement; provided, however, that the employee or director executes and
delivers to NewAlliance an instrument in form and substance satisfactory to
NewAlliance acknowledging that the employee or director has received the payment
in full satisfaction of his or her rights under such agreement. To the extent
that an employee of Westbank or any of its Subsidiaries is entitled to the
continued receipt of health insurance, life insurance, disability insurance,
or
other similar fringe benefits pursuant to an Executive Agreement, and such
employee becomes an officer, employee or consultant of NewAlliance or any of
its
Subsidiaries following the Effective Time and as a result becomes entitled
to
receive the same fringe benefits in his or her capacity as an officer, employee
or consultant of NewAlliance or any of its Subsidiaries, then the fringe
benefits provided to such person shall be deemed to be provided in connection
with such person's service as an officer, employee or consultant of NewAlliance
or any of its Subsidiaries for so long as such person serves in such capacity
and shall be in lieu of, and not in addition to (and for the sole purpose to
avoid duplication of benefits), the same fringe benefits that would have
otherwise been provided pursuant to the Executive Agreement.
7.5.7 Concurrently
with the execution of this Agreement by the parties hereto, (i) each of ▇▇▇▇▇▇
▇. ▇▇▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇ ▇. ▇▇▇▇▇ shall enter into a Termination,
Release and Noncompetition Agreement with Westbank, WB, and NewAlliance
substantially in the form of Exhibit
C
hereto,
and (ii) each of ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ shall enter into
a
Termination and Release Agreement with Westbank, WB and NewAlliance
substantially in the form of Exhibit
D
hereto.
The
dollar amounts to be paid to each of the officers named in this Section 7.5.7
are set forth on Section 7.5.7 of the NEWALLIANCE DISCLOSURE SCHEDULE. In
consideration of the amounts to be paid to the officers named in this Section
7.5.7 pursuant to their respective Termination, Release and Noncompetition
Agreements or Termination and Release Agreements, Westbank and WB agree that
they will make no severance or other change in control payments or benefits
to
such officers pursuant to the existing employment or change of control
agreements with such officers.
7.5.8 With
respect to each director or executive officer who has a supplemental retirement
plan ("SERP") agreement with Westbank or WB and who has not yet reached his
normal retirement age under such agreement, Westbank or WB shall pay a lump
sum
cash amount to such participant immediately prior to the Effective Time in
an
amount equal to such participant's accrued liability retirement account under
such agreement (which accrued amount for each participant as of December 31,
2006 is set forth in Section 4.14.8 of the Westbank DISCLOSURE SCHEDULE), with
the SERP agreement to be terminated as of the Effective Date. In addition,
Westbank and WB shall notify the trustee and the benefits determiner under
each
of the rabbi trusts for such SERP agreements of the payments to be made pursuant
to this section.
55
7.6 Directors
and Officers Indemnification and Insurance.
7.6.1 NewAlliance
shall maintain in effect for six (6) years following the Effective Time the
current directors' and officers' liability insurance policies maintained by
Westbank and the Westbank Subsidiaries (provided, that NewAlliance may
substitute therefor policies of at least the same coverage containing terms
and
conditions which are not materially less favorable) with respect to matters
occurring prior to the Effective Time;
provided,
however, that in no event shall NewAlliance be required to expend in the
aggregate pursuant to this Section 7.6.1 more than 200% of the annual cost
currently expended by Westbank with respect to such insurance (the "Maximum
Premium Amount"). In connection with the foregoing, Westbank agrees to provide
such insurer or substitute insurer with such representations as such insurer
may
request with respect to the reporting of any prior claims. Notwithstanding
the
above, Westbank may, in consultation with NewAlliance, purchase "tail coverage"
for a period of six (6) years following the Effective Time for its officers
and
directors provided the cost for such coverage in the aggregate does not exceed
the Maximum Premium Amount. If such coverage is purchased, NewAlliance shall
not
be required to provide the insurance set forth in this Section
7.6.1.
7.6.2 NewAlliance
shall, and/or shall cause the appropriate NewAlliance Subsidiary
to, indemnify, defend and hold harmless each person who is now, or who has
been
at any time before the date hereof or who becomes before the Effective Time,
an
officer or director of Westbank or WB (the "Indemnified Parties") against all
losses, claims, damages, costs, expenses (including reasonable attorney's fees),
liabilities or judgments or amounts that are paid in settlement (which
settlement shall require the prior written consent of NewAlliance, which consent
shall not be unreasonably withheld) of or in connection with any claim, action,
suit, proceeding or investigation, whether civil, criminal, or administrative
(each a "Claim"), in which an Indemnified Party is, or is threatened to be
made,
a party or witness in whole or in part or arising in whole or in part out of
the
fact that such person is or was a director, officer or employee of Westbank
or a
Westbank Subsidiary if such Claim pertains to any matter of fact arising,
existing or occurring before the Effective Time (including, without limitation,
the Merger and the other transactions contemplated hereby), regardless of
whether such Claim is asserted or claimed before, or after, the Effective Time
(the "Indemnified Liabilities"), to the fullest extent permitted under
applicable state or federal law and under Westbank's Articles of Organization
and Bylaws. NewAlliance shall pay expenses, including reasonable attorney's
fees, in advance of the final disposition of any such action or proceeding
to
each Indemnified Party to the full extent permitted by applicable state or
federal law upon receipt of an undertaking to repay such advance payments if
he
or she shall be adjudicated or determined not to be entitled to indemnification
in the manner set forth below. Any Indemnified
Party wishing to claim indemnification under this Section 7.6.2 upon learning
of
any Claim, shall notify NewAlliance (but the failure so to notify NewAlliance
shall not relieve it from any liability which it may have under this Section
7.6.2, except to the extent such failure prejudices NewAlliance) and shall
deliver to NewAlliance the undertaking referred to in the previous sentence.
In
the event of any such Claim (whether arising before or after the Effective
Time)
(1) NewAlliance shall have the right to assume the defense thereof (in which
event the Indemnified Parties will cooperate in the defense of any such matter)
and upon such assumption NewAlliance shall not be liable to any Indemnified
Party for any legal expenses of other counsel or any other expenses subsequently
56
incurred
by any Indemnified Party in connection with the defense thereof, except that if
NewAlliance elects not to assume such defense, or counsel for the Indemnified
Parties reasonably advises the Indemnified Parties that there are or may be
(whether or not any have yet actually arisen) issues which raise conflicts
of
interest between NewAlliance and the Indemnified Parties, the Indemnified
Parties may retain counsel reasonably satisfactory to them, and NewAlliance
shall pay the reasonable fees and expenses of such counsel for the Indemnified
Parties, (2) NewAlliance shall be obligated pursuant to this paragraph to pay
for only one (1) firm of counsel for all Indemnified Parties whose reasonable
fees and expenses shall be paid promptly as statements are received unless
there
is a conflict of interest that necessitates more than one (1) law firm, (3)
NewAlliance shall not be liable for any settlement effected without its prior
written consent (which consent shall not be unreasonably withheld), and (4)
no
Indemnified Party shall be entitled to indemnification hereunder with respect
to
a matter as to which (x) he shall have been adjudicated in any proceeding not
to
have acted in good faith and in a manner he reasonably believed to be in, or
not
opposed to, the best interests of Westbank or any Westbank Subsidiary, or (y)
in
the event that a proceeding is compromised or settled so as to impose any
liability or obligation upon an Indemnified Party, if there is a determination
that with respect to said matter said Indemnified Party did not act in good
faith and in a manner he reasonably believed to be in, or not opposed to, the
best interests of Westbank or any Westbank Subsidiary. The determination shall
be made by a majority vote of a quorum consisting of the Directors of
NewAlliance who are not involved in such proceeding.
7.7 Conduct
of Business.
Except
with the written consent of Westbank, during the period from the date of this
Agreement to the earlier of the Effective Time or the termination of this
Agreement, NewAlliance will operate its business, and it will cause each of
the
NewAlliance Subsidiaries to operate its business, only in the usual, regular
and
ordinary course of business; use its reasonable best efforts in good faith
to
preserve intact its business organization and assets, keep available the present
services of the employees, maintain its rights and franchises, and preserve
the
goodwill of its customers and others with whom business relationships exist;
and
voluntarily take no action which would or be reasonably likely to (i) adversely
affect the ability of NewAlliance or NAB to obtain any necessary approvals
of
Governmental Entities required for the transactions contemplated hereby or
under
the Bank Merger Agreement or increase the period of time necessary to obtain
such approvals, or (ii) adversely affect its ability to perform its covenants
and agreements under this Agreement or the Bank Merger Agreement. Subject
to the forgoing qualifications (i) and (ii), nothing herein shall be interpreted
as precluding NewAlliance or NAB from entering into agreements with respect
to
or consummating mergers with or acquisitions of other companies at any
time.
7.8 Financial
and Other Statements.
7.8.1 Promptly
upon receipt thereof, NewAlliance will furnish to Westbank copies of each
annual, interim or special audit of the books of NewAlliance and the NewAlliance
Subsidiaries made by its independent accountants and/or its internal auditors
and copies of all internal control reports submitted to NewAlliance by such
accountants and/or internal auditors in connection with each annual, interim
or
special audit of the financial statements of NewAlliance and the NewAlliance
Subsidiaries made by such accountants and/or internal auditors.
57
7.8.2 As
soon
as reasonably available, but in no event later than the date such documents
are
filed with the SEC, NewAlliance will deliver to Westbank any and all Securities
Documents filed by it with the SEC under the Securities Laws. As soon as
practicable, NewAlliance will furnish to Westbank copies of all such financial
statements and reports as it or any NewAlliance Subsidiary shall send to its
shareholders, the FDIC, the FRB, the Department or any other regulatory
authority, except as legally prohibited thereby.
7.8.3 NewAlliance
will advise Westbank promptly of the receipt of any examination report of any
Bank Regulator with respect to the condition or activities of NewAlliance or
any
of the NewAlliance Subsidiaries.
7.8.4 NewAlliance
will promptly furnish to Westbank such additional financial data as Westbank
may
reasonably request, including without limitation, detailed monthly loan
reports.
7.9 Current
Information. During
the period from the date of this Agreement to the earlier of the Effective
Time
or the termination of this Agreement, NewAlliance will cause one or more of
its
representatives to confer with representatives of Westbank and report on the
general status of its ongoing operations at such times as Westbank may
reasonably request. NewAlliance will promptly notify Westbank of any material
change from the normal course of business of NewAlliance or NAB or in the
operation of the properties of NewAlliance or NAB and, to the extent permitted
by applicable law, of any governmental complaints, investigations or hearings
(or communications indicating that the same may be contemplated), or the
institution or the threat of material litigation involving NewAlliance or NAB.
7.10 Negative
Covenants. NewAlliance
agrees that from the date of this Agreement to the earlier of the Effective
Time
or the termination of this Agreement, except as otherwise specifically permitted
or required by this Agreement, or consented to by Westbank in writing which
consent shall not unreasonably be withheld, conditioned or delayed, NewAlliance
will not, and will cause each of the NewAlliance Subsidiaries not
to;
(a) make
any
change in its accounting methods or practices, except changes as may be required
by GAAP, PCAOB accounting pronouncements or by law or regulatory
requirements;
(b) take
any
action that would result in the representations and warranties of NewAlliance
and any NewAlliance Subsidiary contained in this Agreement not being true and
correct in all material respects on the date of this Agreement or at the Closing
Date;
(c) take
any
action that is intended or is reasonably likely to result in (x) any of its
representations and warranties set forth in this Agreement being or becoming
untrue in any material respect at the Effective Time, (y) any of the conditions
to the Merger set forth in Article IX not being satisfied or (z) a material
violation of any provision of this Agreement or the Bank Merger Agreement,
except, in each case, as may be required by applicable law or regulation;
or
58
(d) take
any
action that would prevent or impede the Merger or the Bank Merger from
qualifying as a tax-free reorganization within the meaning of Section 368(a)
of
the Code; or
(e) agree
to
do any of the foregoing.
7.11 Access
to Properties and Records. In
order
to facilitate the consummation of the Merger and the Bank Merger and the
integration of the business and operations of the parties, subject to Section
12.1 hereof and subject to applicable laws relating to exchange of information,
NewAlliance shall permit Westbank and its officers, employees, counsel,
accountants and other authorized representatives, access, upon reasonable
notice, to its personnel and properties and those of the NewAlliance
Subsidiaries, and shall disclose and make available to Westbank during normal
business hours throughout the period prior to the Effective Time all of the
books, papers and records of NewAlliance or any NewAlliance Subsidiary relating
to the assets, properties, operations, obligations and liabilities, including,
but not limited to, all books of account (including the general ledger), tax
records, minute books of directors' (other than minutes that discuss any of
the
transactions contemplated by this Agreement or other strategic alternatives)
and
shareholders' meetings, organizational documents, Bylaws, material contracts
and
agreements, filings with any regulatory authority, litigation files, plans
affecting employees, and any other business activities or prospects in which
Westbank may have a reasonable interest; provided, however, that NewAlliance
shall not be required to take any action that would provide access to or to
disclose information where such access or disclosure would violate or prejudice
the rights or business interests or confidences of any customer or other person
or would result in the waiver by it of the privilege protecting communications
between it and any of its counsel. In addition, NewAlliance and the NewAlliance
subsidiaries shall not be required to disclose any analysis, minutes, or other
materials pertaining to the financial or other evaluation or discussion of
(i)
this Agreement, or the transactions contemplated hereunder, or (ii) any third
party proposal to acquire a controlling interest in NewAlliance. NewAlliance
shall provide and shall request its auditors to provide Westbank with such
historical financial information regarding NewAlliance and any NewAlliance
Subsidiary (and related audit reports and consents) as Westbank may reasonably
request for securities disclosure purposes. Westbank shall use reasonable
efforts to minimize any interference with NewAlliance's and any NewAlliance
Subsidiary's regular business operations during any such access to NewAlliance's
or any NewAlliance Subsidiary's personnel, property, books or
records.
7.12 Stock
Listing.
NewAlliance agrees to list on the NYSE (or such other national securities
exchange on which the shares of the NewAlliance Common Stock shall be listed
as
of the Closing Date), subject to official notice of issuance, the shares of
NewAlliance Common Stock to be issued in the Merger.
7.13 Stock
and Cash Reserve.
NewAlliance agrees at all times from the date of this Agreement until the Merger
Consideration has been paid in full to reserve a sufficient number of shares
of
NewAlliance Common Stock and to maintain sufficient liquid accounts or borrowing
capacity to fulfill its obligations under this Agreement.
59
ARTICLE
VIII
REGULATORY
AND OTHER MATTERS
8.1 Westbank
Special Meeting.
Westbank
will, in accordance with applicable law and Westbank's Articles of Organization
and Bylaws, (i) as promptly as reasonably practicable take all steps necessary
to duly call, give notice of, convene and hold a meeting of its shareholders
(the "Westbank Shareholders Meeting") for the purpose of approving the
transactions contemplated by this Agreement, and for such other purposes as
may
be, in Westbank's and NewAlliance's reasonable judgment, necessary or desirable,
(ii) subject to the fiduciary responsibility of the Board of Directors of
Westbank as advised by counsel, recommend to its shareholders the approval
of
the aforementioned matters to be submitted by it to its shareholders and oppose
any third party proposal or other action that is inconsistent with this
Agreement or the consummation of the transactions contemplated herein (including
the Bank Merger), and (iii) cooperate and consult with NewAlliance with respect
to each of the foregoing matters. Except with the prior approval of NewAlliance,
no other matters shall be submitted for approval of the Westbank shareholders
at
the Westbank Shareholders Meeting.
8.2 Proxy
Statement - Prospectus.
8.2.1 For
the
purposes of (x) registering NewAlliance Common Stock to be offered to holders
of
Westbank Common Stock in connection with the Merger with the SEC under the
Securities Act and applicable state securities laws and (y) holding the Westbank
Shareholders Meeting, NewAlliance, at its expense, shall draft and prepare,
and
Westbank shall cooperate in the preparation of, an S-4 registration statement
for the registration of the shares to be issued by NewAlliance in the Merger
(the "Merger Registration Statement"), including a proxy statement and
prospectus satisfying all applicable requirements of applicable state securities
and banking laws, and of the Securities Act and the Exchange Act, and the rules
and regulations thereunder (such proxy statement/prospectus in the form mailed
by Westbank to the Westbank shareholders, together with any and all amendments
or supplements thereto, being herein referred to as the "Proxy
Statement-Prospectus"). NewAlliance shall provide Westbank and its counsel
with
appropriate opportunity to review and comment on the Merger Registration
Statement and Proxy Statement-Prospectus prior to the time they are initially
filed with the SEC or any amendments are filed with the SEC. NewAlliance shall
file the Merger Registration Statement with the SEC. Each of NewAlliance and
Westbank shall use its best efforts to have the Merger Registration Statement
declared effective under the Securities Act as promptly as practicable after
such filing, and Westbank shall thereafter promptly mail the Proxy
Statement-Prospectus to its shareholders. NewAlliance shall also use its best
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 Westbank shall furnish to NewAlliance all information concerning Westbank
and the holders of Westbank Common Stock as may be reasonably requested in
connection with such action.
8.2.2 Westbank
shall provide NewAlliance with any information concerning Westbank and its
Subsidiaries that NewAlliance may reasonably request in connection with the
60
drafting
and preparation of the Merger Registration Statement and Proxy
Statement-Prospectus, and each party shall notify the other promptly of the
receipt of any comments of the SEC with respect to the Merger Registration
Statement or Proxy Statement-Prospectus and of any requests by the SEC for
any
amendment or supplement thereto or for additional information and shall provide
to Westbank promptly copies of all correspondence between it or any of its
representatives and the SEC. NewAlliance shall provide Westbank and its counsel
with appropriate opportunity to review and comment on all amendments and
supplements to the Merger Registration Statement and Proxy Statement-Prospectus
and all responses to requests for additional information and replies to comments
prior to their being filed with, or sent to, the SEC. Each of NewAlliance and
Westbank agrees to use all reasonable efforts, after consultation with the
other
party hereto, to respond promptly to all such comments of and requests by the
SEC and to cause the Proxy Statement-Prospectus and all required amendments
and
supplements thereto to be mailed to the holders of Westbank Common Stock
entitled to vote at the Westbank Shareholders Meeting referred to in Section
8.1
hereof at the earliest practicable time.
8.2.3 Westbank
and NewAlliance shall promptly notify the other party if at any time it becomes
aware that the Proxy Statement-Prospectus or the Merger Registration Statement
contain any untrue statement of a material fact or omit to state a material
fact
required to be stated therein or necessary to make the statements contained
therein, in light of the circumstances under which they were made, not
misleading. In such event, Westbank shall cooperate with NewAlliance in the
preparation of a supplement or amendment to such Proxy Statement-Prospectus
which corrects such misstatement or omission, and NewAlliance shall file an
amended Merger Registration Statement with the SEC, and Westbank shall mail
an
amended Proxy Statement-Prospectus to Westbank's shareholders. Westbank, on
the
one hand, and NewAlliance on the other shall each provide to the other a
"comfort" letter from its independent registered public accountant, dated as
of
the date of the Proxy Statement-Prospectus and updated as of the Effective
Date
of the Merger, with respect to certain financial information regarding Westbank
and NewAlliance in the Proxy Statement-Prospectus, respectively, each in form
and substance which is customary in transactions such as the Merger, unless
waived by the Parties.
8.3 Regulatory
Approvals.
Each of
Westbank, WB and NewAlliance will cooperate with the other and use all
reasonable efforts to promptly prepare all necessary documentation, to effect
all necessary filings and to obtain all necessary permits, consents, approvals
and authorizations of all third parties and governmental bodies necessary to
consummate the transactions contemplated by this Agreement, including without
limitation the Merger and the Bank Merger. Westbank and NewAlliance will furnish
each other and each other's counsel with all information concerning themselves,
their subsidiaries, directors, officers and shareholders and such other matters
as may be necessary or advisable in connection with the Proxy
Statement-Prospectus and any application, petition or any other statement or
application made by or on behalf of NewAlliance, NAB, Westbank or WB to any
governmental body in connection with the Merger, the Bank Merger, and the other
transactions contemplated by this Agreement. Each party hereto shall have the
right to review and approve in advance all characterizations of the information
relating to such party and any of its Subsidiaries that appear in any filing
made in connection with the transactions contemplated by this Agreement with
any
governmental body. In addition, NewAlliance, NAB, Westbank and WB shall each
furnish to the other for review a copy of each such filing made in connection
with the transactions contemplated by this Agreement with any governmental
body
prior to its filing.
61
8.4 Affiliates.
Westbank shall use all reasonable efforts to cause each director, executive
officer and other Person who is an "affiliate" (for purposes of Rule 145
under the Securities Act) of Westbank to deliver to NewAlliance, as soon as
practicable after the date of this Agreement and in no event later than thirty
(30) days after the date this Agreement, a written agreement, in the form of
Exhibit
E
hereto,
providing that such Person will not sell, pledge, transfer or otherwise dispose
of any shares of NewAlliance Common Stock to be received by such "affiliate,"
as
a result of the Merger except in compliance with the applicable provisions
of
the Securities Act and the rules and regulations thereunder.
8.5 Compliance
with Anti-Trust Laws.
Each of
NewAlliance and Westbank shall use reasonable best efforts in good faith to
resolve objections, if any, which may be asserted with respect to the Merger
under anti-trust laws. In the event a suit is threatened or instituted
challenging the Merger as violative of anti-trust laws, each of NewAlliance
and
Westbank shall use reasonable best efforts in good faith to avoid the filing
of,
or resist or resolve such suit. NewAlliance and Westbank shall use reasonable
best efforts in good faith to take such action as may be required: (a) by the
FRB, the Department, the Division, the Board of Bank Incorporation and the
Antitrust Division of the DOJ or the United States Federal Trade Commission
in
order to resolve such objections as any 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 in good faith shall not include, among other things
and
only to the extent NewAlliance so desires, the willingness of NewAlliance to
accept an order agreeing to the divestiture, or the holding separate, of any
assets of NewAlliance or Westbank.
8.6 Execution
of Bank Merger Agreement.
Contemporaneously with the execution of this Agreement, WB and NAB each shall
execute and deliver the Bank Merger Agreement, substantially in the form
attached hereto as Exhibit
A.
ARTICLE
IX
CLOSING
CONDITIONS
9.1 Conditions
to Each Party's Obligations under this Agreement.
The
respective obligations of each party under this Agreement to proceed to Closing
shall be subject to the fulfillment at or prior to the Closing Date of the
following conditions:
9.1.1 Shareholder
Approval.
This
Agreement shall have been approved by the requisite vote of the shareholders
of
Westbank.
9.1.2 Injunctions.
None of
the parties hereto shall be subject to any order, decree or injunction of a
court or agency of competent jurisdiction which enjoins or prohibits the
consummation of the transactions contemplated by this
Agreement.
62
9.1.3 Regulatory
Approvals.
All
necessary approvals, authorizations and consents of all Governmental Entities
required to consummate the transactions contemplated by this Agreement,
including the Merger and the Bank Merger, shall have been obtained and shall
remain in full force and effect and all waiting periods relating to such
approvals, authorizations or consents shall have expired; and no such approval,
authorization or consent shall include any condition or requirement, excluding
standard conditions that are normally imposed by the regulatory authorities
in
bank merger transactions that would, in the good faith reasonable judgment
of
the Board of Directors of NewAlliance, materially and adversely affect the
business, operations, financial condition, property or assets of the combined
enterprise of Westbank, WB and NewAlliance or otherwise materially impair the
value of Westbank or WB to NewAlliance.
9.1.4 Effectiveness
of Merger Registration Statement.
The
Merger Registration Statement shall have become effective under the Securities
Act and no stop order suspending the effectiveness of the Merger Registration
Statement shall have been issued, and no proceedings for that purpose shall
have
been initiated or threatened by the SEC and, if the offer and sale of
NewAlliance Common Stock in the Merger is subject to the blue sky laws of any
state, shall not be subject to a stop order of any state securities
commissioner.
9.1.5 Tax
Opinions.
On the
basis of facts, representations and assumptions which shall be consistent with
the state of facts existing immediately prior to the Closing Date: (a)
NewAlliance and NAB shall have received an opinion of NewAlliance and NAB's
counsel, or such other qualified professional firm on which the parties shall
agree, and (b) Westbank and WB shall have received an opinion of Westbank and
WB's counsel, or such other qualified professional firm on which the parties
shall agree, in each case reasonably acceptable in form and substance to
NewAlliance, Westbank and WB dated as of the Closing Date, substantially to
the
effect that, for Federal income tax purposes:
(i) The
Merger, when consummated in accordance with the terms hereof, either will
constitute a reorganization within the meaning of Section 368(a) of the Code
or
will be treated as part of a reorganization within the meaning of Section 368(a)
of the Code;
(ii) Neither
the Merger nor the Bank Merger will adversely affect the Merger qualifying
as a
Reorganization within the meaning of Section 368(a) of the Code;
(iii) No
gain
or loss will be recognized by NewAlliance, NAB, Westbank or WB by reason of
the
Merger;
(iv) The
exchange of Westbank Common Stock to the extent exchanged for NewAlliance Common
Stock will not give rise to recognition of gain or loss for Federal income
tax
purposes to the shareholders of Westbank;
(v) Subject
to any adjustments to basis as a result of any cash received in exchange for
Westbank Common Stock, the basis of the NewAlliance Common Stock to be received
(including any fractional shares deemed received for tax purposes) by a Westbank
shareholder will be the same as the basis, as so adjusted, of the Westbank
Common Stock surrendered pursuant to the Merger in exchange therefor;
and
63
(vi) The
holding period of the shares of NewAlliance Common Stock to be received by
a
shareholder of Westbank will include the period during which the shareholder
held the shares of Westbank Common Stock surrendered in exchange therefor,
provided the Westbank Common Stock surrendered is held as a capital asset at
the
Effective Time.
Each
of
NewAlliance, Westbank, NAB and WB shall provide a letter setting forth the
facts, assumptions and representations on which such counsel may rely in
rendering its opinion.
9.2 Conditions
to the Obligations of NewAlliance under this Agreement.
The
obligations of NewAlliance under this Agreement shall be further subject to
the
satisfaction of the conditions set forth in Sections 9.2.1 through 9.2.5 at
or
prior to the Closing:
9.2.1 Representations
and Warranties.
Except
as otherwise contemplated by this Agreement or consented to in writing by
NewAlliance, the representations and warranties of Westbank and WB set forth
in
this Agreement shall be true and correct in all material respects as of the
date
of this Agreement and as of the Effective Time as though made on and as of
the
Effective Time; and Westbank shall have delivered to NewAlliance a certificate
of Westbank to such effect signed by the Chief Executive Officer and the Chief
Financial Officer of Westbank as of the Effective Time.
9.2.2 Agreements
and Covenants.
As of
the Closing Date, Westbank and each Westbank Subsidiary shall have performed
in
all material respects all obligations and complied in all material respects
with
all agreements or covenants to be performed or complied with by each of them
at
or prior to the Effective Date under this Agreement, and NewAlliance shall
have
received a certificate signed on behalf of Westbank by the Chief Executive
Officer and Chief Financial Officer of Westbank to such effect dated as of
the
Effective Time.
9.2.3 Permits,
Authorizations, Etc.
Westbank and the Westbank Subsidiaries shall have obtained any and all permits,
authorizations, consents, waivers, clearances or approvals required for the
lawful consummation of the Merger by Westbank and the Bank Merger by WB, the
failure to obtain which would have a Material Adverse Effect on Westbank and
its
Subsidiaries, taken as a whole.
9.2.4 No
Material Adverse Effect.
Since
December 31, 2005, no event has occurred or circumstance arisen that,
individually or in the aggregate, has had or is reasonably likely to have a
Material Adverse Effect on Westbank or WB, or both.
9.3 Conditions
to the Obligations of Westbank under this Agreement.
The
obligations of Westbank under this Agreement shall be further subject to the
satisfaction of the conditions set forth in Sections 9.3.1 through 9.3.5 at
or
prior to the Closing:
9.3.1 Representations
and Warranties.
Except
as otherwise contemplated by this Agreement or consented to in writing by
Westbank, the representations and warranties of NewAlliance and NAB set forth
in
this Agreement shall
be
true and correct in all material respects as of the date of this Agreement
and
as of the Effective Time as though made on and as of the Effective Time (or
on
the date when made in the case of any representation and warranty
64
which
specifically relates to an earlier date); and NewAlliance shall have delivered
to Westbank a certificate of NewAlliance to such effect signed by the Chief
Executive Officer and the Chief Financial Officer of NewAlliance as of the
Effective Time.
9.3.2 Agreements
and Covenants.
As of
the Closing Date, NewAlliance and each NewAlliance Subsidiary shall have
performed in all material respects all obligations and complied in all material
respects with all agreements or covenants to be performed or complied with
by
each of them at or prior to the Effective Date under this Agreement, and
Westbank shall have received a certificate signed on behalf of NewAlliance
by
the Chief Executive Officer and Chief Financial Officer of NewAlliance to such
effect dated as of the Effective Time.
9.3.3 Permits,
Authorizations, Etc.
NewAlliance and the NewAlliance Subsidiaries shall have obtained any and all
permits, authorizations, consents, waivers, clearances or approvals required
for
the lawful consummation of the Merger by NewAlliance and the Bank Merger by
NAB,
the failure to obtain which would have a Material Adverse Effect on NewAlliance
and its Subsidiaries, taken as a whole.
9.3.4 Payment
of Merger Consideration.
NewAlliance shall have delivered the Exchange Fund to the Exchange Agent on
or
before the Closing Date and the Exchange Agent shall provide Westbank with
a
certificate evidencing such delivery.
9.3.5 No
Material Adverse Effect.
Since
December 31, 2005, no event has occurred or circumstance arisen that,
individually or in the aggregate, has had or is reasonably likely to have a
Material Adverse Effect on NewAlliance or NAB, or both.
ARTICLE
X
THE
CLOSING
10.1 Time
and Place.
Subject
to the provisions of Articles IX and XI hereof, the Closing of the transactions
contemplated hereby shall take place at the offices of ▇▇▇▇▇ ▇▇▇▇▇▇ &
▇▇▇▇▇▇, LLP, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ at 10:00 a.m.
on January
2, 2007, or such other date as the parties may mutually agree, but in no event
prior to January 1, 2007 and in no event prior to the date on which the last
condition precedent pursuant to this Agreement has been fulfilled or waived,
including the expiration of any applicable waiting period.
10.2 Deliveries
at the Closing.
At the
Closing there shall be delivered (i) to NewAlliance and Westbank the
certificates and other documents and instruments required to be delivered at
the
Closing under Article IX hereof and (ii) to the Exchange Agent on behalf of
Westbank the Merger Consideration required to be delivered at the Closing under
Section 9.3.4 hereof.
65
ARTICLE
XI
TERMINATION,
AMENDMENT AND WAIVER
11.1 Termination.
This
Agreement may be terminated at any time prior to the Closing Date, whether
before or after approval of the Merger by the shareholders of
WestBank:
11.1.1 By
the
mutual written agreement of NewAlliance and Westbank;
11.1.2 By
either
NewAlliance or Westbank, provided that the terminating party is not then in
material breach of any representation, warranty, covenant or other agreement
contained herein, if there shall have been a material breach of any of the
representations or warranties set forth in this Agreement on the part of the
other party, which breach (i) by its nature cannot be cured, or (ii) shall
not
have been cured within thirty (30) days after written notice by the
non-breaching party to the breaching party, provided that, in the event the
breach cannot reasonably be cured within the specified thirty (30) day period,
the time to cure shall be extended to such time as reasonably may be necessary
to effect the cure, not to exceed an additional thirty (30) days (sixty (60)
days in the aggregate), conditioned upon the breaching party commencing to
cure
the breach within fifteen (15) days after notice of the breach, providing
written notice to the non-breaching party within such fifteen (15) day period
of
the breaching party's inability to complete the cure within the specified thirty
(30) day period and thereafter diligently and continuously prosecuting the
cure
to completion. For purposes of this Section 11.1.2, a material breach shall
be
deemed to be a breach which has, either individually or in the aggregate, a
Material Adverse Effect on (x) the party making such representations or
warranties or (y) the consummation of the Merger, the Bank Merger, and the
other
transactions contemplated hereby, provided, that if the applicable
representation or warranty by its terms already is limited to a Material Adverse
Effect, this provision shall not be deemed to further limit or qualify the
representation or warranty;
11.1.3 By
either
NewAlliance or Westbank, provided that the terminating party is not then in
material breach of any representation, warranty, covenant or other agreement
contained herein, if there shall have been a material failure to perform or
comply with any of the covenants or agreements set forth in this Agreement
on
the part of the other party, including also any failure to satisfy a condition
to Closing, which failure (i) by its nature cannot be cured, or (ii) shall
not
have been cured within thirty (30) days after written notice by the
non-breaching party to the breaching party, provided that, in the event the
breach cannot reasonably be cured within the specified thirty (30) day period,
the time to cure shall be extended to such time as reasonably may be necessary
to effect the cure, not to exceed an additional thirty (30) days (sixty (60)
days in the aggregate), conditioned upon the breaching party commencing to
cure
the breach within fifteen (15) days after notice of the breach, providing
written notice to the non-breaching party within such fifteen (15) day period
of
the breaching party's inability to complete the cure within the specified thirty
(30) day period and thereafter diligently and continuously prosecuting the
cure
to completion. For purposes of this Section 11.1.3, a material failure to
perform or comply shall be deemed to be a failure which has, either individually
or in the aggregate, a Material Adverse Effect on (x) the party so failing
or
(y) the consummation of the Merger, the Bank Merger, and the other transactions
contemplated hereby, provided, that if the applicable
66
performance
obligation by its terms already is limited to a Material Adverse Effect, this
provision shall not be deemed to further limit or qualify the performance
obligation;
11.1.4 By
(a)
Westbank, if the Merger Registration Statement shall not have been declared
effective, within the meaning of the Securities Laws, by the SEC by December
31,
2006, or (b) either NewAlliance or Westbank, if the Closing shall not have
occurred by the Termination Date, or such later date as shall have been agreed
to in writing by NewAlliance and Westbank; provided, that no party may terminate
this Agreement pursuant to this Section 11.1.4 if the failure to achieve
effectiveness of the Merger Registration Statement or of the Closing to have
occurred on or before said date was due to such party's breach of any of its
obligations under this Agreement;
11.1.5 By
either
NewAlliance or Westbank if the shareholders of Westbank shall have voted at
the
Westbank shareholders meeting on this Agreement and such vote shall not have
been sufficient to approve the Agreement;
11.1.6 By
either
NewAlliance or Westbank if (i) final action has been taken by a Governmental
Entity whose approval is required in connection with this Agreement or the
Bank
Merger Agreement and the transactions contemplated hereby or thereby, which
final action (x) has become non-appealable and (y) does not approve this
Agreement or the Bank Merger Agreement or the transactions contemplated hereby
or thereby, (ii) any regulatory authority whose approval or non-objection is
required in connection with this Agreement or the Bank Merger Agreement and
the
transactions contemplated hereby or thereby, has stated in writing that it
will
not issue the required approval or non-objection, or (iii) any court of
competent jurisdiction or other governmental authority shall have issued an
order, decree, ruling or taken any other action restraining, enjoining or
otherwise prohibiting the Merger or the Bank Merger and such order, decree,
ruling or other action shall have become final and non-appealable, any of the
foregoing being termed an "Adverse Action", provided that each party shall
use
their respective reasonable best efforts to obtain all necessary approvals
from
any applicable Governmental Entity and to timely and fully address any
objections raised or questions posed by such Governmental Entity;
11.1.7 By
NewAlliance if at any time prior to the Westbank Shareholder meeting, (a)
Westbank shall have materially breached Section 6.10 of this Agreement, (b)
the
Westbank Board of Directors shall have failed for any reason to make its
recommendation referred to in Section 8.1, withdrawn such recommendation or
modified or changed such recommendation in a manner adverse in any respect
to
the interests of NewAlliance or (c) Westbank shall have materially breached
its
obligations under Section 8.1 by failing to call, give notice of, convene and
hold the Westbank Shareholders Meeting in accordance with Section
8.1.
11.1.8 By
NewAlliance if a tender offer or exchange offer for 25% or more of the
outstanding shares of Westbank Common Stock is commenced (other than by
NewAlliance), and the Westbank Board of Directors recommends that the
shareholders of Westbank tender their shares in such tender or exchange offer
or
otherwise fails to recommend that such shareholders reject such tender offer
or
exchange offer within the ten-Business Day period specified in Rule 14e-2(a)
under the Exchange Act.
67
11.1.9 At
any
time prior to the Westbank Shareholders Meeting, by Westbank in order to
concurrently enter into an acquisition agreement or similar agreement (each,
an
"Acquisition Agreement") with respect to a Superior Proposal which has been
received and considered by Westbank and the Westbank Board of Directors in
compliance with Section 6.10 hereof, provided, however, that this Agreement
may
be terminated by Westbank pursuant to this Section 11.1.9 only after the fifth
(5th)
Business Day following NewAlliance's receipt of written notice from Westbank
advising NewAlliance that Westbank is prepared to enter into an Acquisition
Agreement with respect to a Superior Proposal, and only if, during such five
(5)-Business Day period, NewAlliance does not, in its sole discretion, make
an
offer to Westbank that Westbank's Board of Directors determines in good faith,
after consultation with its financial and legal advisors, is at least as
favorable as the Superior Proposal.
11.2 Effect
of Termination.
11.2.1 In
the
event of termination of this Agreement pursuant to any provision of Section
11.1, this Agreement shall forthwith become void and have no further force,
except that the provisions of Sections 11.1, 11.3, 12.1, 12.2, 12.6, 12.9,
12.10, this Section 11.2, and any other Section which, by its terms, relates
to
post-termination rights or obligations, shall survive such termination of this
Agreement and remain in full force and effect.
11.2.2 In
the
event of termination of this Agreement pursuant to Section 11.1, except as
provided in Section 11.2.3, whether or not the Merger is consummated, all costs
and expenses incurred in connection with this Agreement and the transactions
contemplated by this Agreement shall be paid by the party incurring such
expenses. In the event of a termination of this Agreement because of a willful
breach of any representation, warranty, covenant or agreement contained in
this
Agreement, the breaching party shall remain liable for any and all damages,
costs and expenses, including all reasonable attorneys' fees, sustained or
incurred by the non-breaching party as a result thereof or in connection
therewith or with respect to the enforcement of its rights
hereunder.
11.2.3 In
recognition of the efforts, expenses and other opportunities foregone by
NewAlliance while structuring and pursuing the Merger, the parties hereto agree
that Westbank shall pay to NewAlliance a termination fee of $4,500,000 (the
"Westbank Termination Fee") in the manner and subject to the conditions set
forth below if:
(i) this
Agreement is terminated by NewAlliance pursuant to Sections 11.1.7 or
11.1.8;
(ii) this
Agreement is terminated by Westbank pursuant to Section 11.1.9; or
(iii) this
Agreement is terminated by (A) NewAlliance pursuant to Section 11.1.2 or 11.1.3
or (B) by either NewAlliance or Westbank pursuant to Section 11.1.5, and in
the
case of any termination pursuant to Section 11.1.2, 11.1.3 or 11.1.5 an
Acquisition Proposal shall have been publicly announced or otherwise
communicated or made known to the senior management of Westbank or the Westbank
Board (or any Person shall have publicly announced, communicated or made known
an intention,
68
whether
or not conditional, to make an Acquisition Proposal) at any time after the
date
of this Agreement and prior to the date of termination of this Agreement
in the
case of clause (A), or the date of the vote of the shareholders of Westbank
in
the case of clause (B), and in any such event, Westbank or WB enters into
any
agreement with respect to, or consummates, an Acquisition Transaction within
twelve (12) months after such termination of this Agreement.
In
the
event the Westbank Termination Fee shall become payable pursuant to Section
11.2.3 (i) or (ii), Westbank shall pay to NewAlliance the Westbank Termination
Fee on or before the third Business Day following the date of termination of
this Agreement. In the event the Westbank Termination Fee shall become payable
pursuant to Section 11.2.3 (iii), Westbank shall pay to NewAlliance the Westbank
Termination Fee on the date of execution of such agreement or consummation
of
the Acquisition Transaction. Any amount that becomes payable pursuant to this
Section 11.2.3 shall be paid by wire transfer of immediately available funds
to
an account designated by NewAlliance.
11.2.4 If
payment of the Westbank Termination Fee is timely made, then NewAlliance will
not have any other rights or claims against Westbank, any Westbank Subsidiaries,
or their respective officers and directors, under this Agreement, it being
agreed that the acceptance of the Westbank Termination Fee under Section 11.2.3
will constitute the sole and exclusive remedy of NewAlliance against Westbank,
any Westbank Subsidiaries, or their respective officers and directors. If
Westbank fails to pay the amounts due under Section 11.2.3 above within the
time
period specified therein, Westbank shall pay the costs and expenses (including
reasonable legal fees and expenses) incurred by NewAlliance in connection with
any action in which it prevails, including the filing of any lawsuit taken
to
collect payment of such amount, together with interest on the amount of any
such
unpaid amounts at the prime lending rate prevailing during such period as
published in The
Wall Street Journal,
calculated on a daily basis from the date such amounts were required to be
paid
until the date of actual payment.
11.3 Amendment,
Extension and Waiver.
Subject
to applicable law, at any time prior to the Effective Time (whether before
or
after approval thereof by the shareholders of Westbank), the parties hereto
by
action of their respective Boards of Directors, may (a) amend this Agreement,
(b) extend the time for the performance of any of the obligations or other
acts
of any other party hereto, (c) waive any inaccuracies in the representations
and
warranties contained herein or in any document delivered pursuant hereto, or
(d)
waive compliance with any of the agreements or conditions contained herein;
provided, however, that after any approval of this Agreement and the
transactions contemplated hereby by the shareholders of Westbank, there may
not
be, without further approval of such shareholders, any amendment of this
Agreement which reduces the amount, value or changes the form of consideration
to be delivered to Westbank's shareholders or Option holders pursuant to this
Agreement. This Agreement may not be amended except by an instrument in writing
signed on behalf of each of the parties hereto. Any agreement on the part of
a
party hereto to any extension or waiver shall be valid only if set forth in
an
instrument in writing signed on behalf of such party, but such waiver or failure
to insist on strict compliance with such obligation, covenant, agreement or
condition shall not operate as a waiver of, or estoppel with respect to, any
subsequent or other failure.
69
ARTICLE
XII
MISCELLANEOUS
12.1 Confidentiality.
Except
as specifically set forth herein, NewAlliance and Westbank mutually agree to
be
bound by the terms of the confidentiality agreement dated as of June 7, 2006
(the "Confidentiality Agreement") previously executed by the parties hereto,
which Confidentiality Agreement is hereby incorporated herein by reference.
The
parties hereto agree that such Confidentiality Agreement shall continue in
accordance with its respective terms, notwithstanding the termination of this
Agreement.
12.2 Public
Announcements.
Westbank and NewAlliance shall cooperate with each other in the development
and
distribution of all news releases and other public information disclosures
with
respect to this Agreement, except as may be otherwise required by law, and
neither Westbank nor NewAlliance shall issue any joint news releases with
respect to this Agreement unless such news releases have been mutually agreed
upon in writing by the parties hereto, except as required by law.
12.3 Survival.
All
representations, warranties and covenants in this Agreement or in any instrument
delivered pursuant hereto or thereto shall expire on and be terminated and
extinguished at the Effective Date, other than those covenants set forth in
Sections 2.5, 2.6, 7.6, and 7.7, which shall survive or be performed after
the
Effective Date.
12.4 Notices.
All
notices or other communications hereunder shall be in writing and shall be
deemed given if delivered by receipted hand delivery or mailed by prepaid
registered or certified mail (return receipt requested) or by cable, telegram,
telex or fax addressed as follows:
|
If
to Westbank or WB, to:
|
|
|
Westbank
|
|
|
▇▇▇
▇▇▇▇ ▇▇▇▇▇▇
|
|
|
▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
|
|
|
Attention:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
|
|
|
Fax:
(▇▇▇) ▇▇▇-▇▇▇▇
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With
required copies to:
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▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ & Wood LLP
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▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
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▇▇▇▇▇
▇▇▇
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▇▇▇▇▇▇▇▇▇▇,
▇.▇. ▇▇▇▇▇
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Attention:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
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Fax:
(▇▇▇) ▇▇▇-▇▇▇▇
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70
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If
to NewAlliance or NAB, to:
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NewAlliance
Bank
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▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇
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▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
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Attention:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, Executive Vice President and CFO
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Fax:
▇▇▇-▇▇▇-▇▇▇▇
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With
required copies to:
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▇▇▇▇▇
▇▇▇▇▇▇ & ▇▇▇▇▇▇, LLP
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▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ - ▇▇▇▇
▇▇▇▇▇
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▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
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Attention:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ III, Esq.
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Fax:
(▇▇▇) ▇▇▇-▇▇▇▇
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or
such
other address as shall be furnished in writing by any party, and any such notice
or communication shall be deemed to have been given as of the date so
mailed.
12.5 Parties
in Interest.
This
Agreement shall be binding upon and shall inure to the benefit of the parties
hereto and their respective successors and assigns; provided, however, that
neither this Agreement nor any of the rights, interests or obligations hereunder
shall be assigned by any party hereto without the prior written consent of
the
other party, and that (except as otherwise expressly provided in this Agreement)
nothing in this Agreement is intended to confer upon any other Person any rights
or remedies under or by reason of this Agreement other than the severance
benefits described in Section 7.5.4 and the insurance provided under Section
7.6.
12.6 Complete
Agreement.
This
Agreement, including the Exhibits and Disclosure Schedules hereto and the
documents and other writings referred to herein or therein or delivered pursuant
hereto or thereto, together with the Confidentiality Agreement referred to
in
Section 12.1, contains the entire agreement and understanding of the parties
with respect to its subject matter. There are no restrictions, agreements,
promises, warranties, covenants or undertakings between the parties other than
those expressly set forth herein or therein. This Agreement supersedes all
prior
agreements and understandings (other than the Confidentiality Agreement referred
to in Section 12.1 hereof) between the parties, both written and oral, with
respect to its subject matter.
12.7 Counterparts.
This
Agreement may be executed in one or more counterparts all of which shall be
considered one and the same agreement and each of which shall be deemed an
original.
12.8 Severability.
In the
event that any one or more provisions of this Agreement shall for any reason
be
held invalid, illegal or unenforceable in any respect, by any court of competent
jurisdiction, such invalidity, illegality or unenforceability shall not affect
any other provisions of this Agreement and the parties shall use their
reasonable efforts to substitute a valid, legal and
71
enforceable
provision which, insofar as practical, implements the purposes and intents
of
this Agreement.
12.9 Governing
Law.
This
Agreement shall be governed by the laws of the State of Connecticut, without
giving effect to conflicts of laws principles that would require the application
of any other law.
12.10 Interpretation.
When a
reference is made in this Agreement to Sections or Exhibits, such reference
shall be to a Section of or Exhibit to this Agreement unless otherwise
indicated. The recitals hereto constitute an integral part of this Agreement.
References to Sections include subsections, which are part of the related
Section (e.g., a section numbered "Section 5.5.1" would be part of "Section
5.5"
and references to "Section 5.5" would also refer to material contained in the
subsection described as "Section 5.5.1"). The table of contents, index 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". The phrases
"the date of this Agreement", "the date hereof" and terms of similar import,
unless the context otherwise requires, shall be deemed to refer to the date
set
forth in the Recitals to this Agreement.
12.11 Specific
Performance.
The
parties hereto agree that irreparable damage would occur in the event that
the
provisions contained in this Agreement were not performed in accordance with
its
specific terms or was 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.
[SIGNATURES
APPEAR ON THE FOLLOWING PAGE]
72
IN
WITNESS WHEREOF,
NewAlliance, NAB, Westbank and WB have caused this Agreement to be executed
under seal by their duly authorized officers as of the date first set forth
above.
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NEWALLIANCE
BANCSHARES, INC.
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By:
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
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Name:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
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Title:
Executive Vice President and Chief Financial Officer
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NEWALLIANCE
BANK
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By:
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
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Name:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
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Title:
Executive Vice President and Chief Financial Officer
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WESTBANK
CORPORATION
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By:
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Name:
▇▇▇▇▇▇
▇. ▇▇▇▇▇
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Title:
President and Chief Executive Officer
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WESTBANK
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By:
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Name:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Title:
President and Chief Executive
Officer
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73
EXHIBIT
A
FORM
OF BANK MERGER AGREEMENT
ARTICLES
OF COMBINATION
and
BANK
MERGER AGREEMENT
These
Articles of Combination and Bank Merger Agreement (the "Bank Merger Agreement")
are made and entered into this 18th
day of
July, 2006 between NewAlliance
Bank,
a Connecticut chartered savings bank ("NAB"),
and
WESTBANK,
a
Massachusetts chartered bank and trust company ("WB").
WITNESSETH
WHEREAS,
NewAlliance Bancshares, Inc., a Delaware corporation, ("NewAlliance") Westbank,
a Massachusetts corporation ("Westbank") have entered into an Agreement and
Plan
of Merger dated as of July 18, 2006 (the "Agreement");
WHEREAS,
NAB is
a wholly owned subsidiary of NewAlliance, and WB is a wholly owned subsidiary
of
Westbank;
WHEREAS,
pursuant to the Agreement, NewAlliance has acquired Westbank through a merger
of
Westbank with and into NewAlliance with NewAlliance being the surviving entity,
and NAB will acquire WB through a merger of WB with and into NAB, with NAB
being
the surviving bank;
WHEREAS,
NAB has
issued and outstanding 1,000 shares of common stock, par value $.01 per share
("NAB Common Stock"), and WB has issued and outstanding 335,337 shares of common
stock, par value $5.00 per share ("WB Stock"); and
WHEREAS,
all of
the issued and outstanding shares of NAB Common Stock and all of the issued
and
outstanding shares of WB Stock have been voted in favor of the merger of WB
with
and into NAB;
NOW,
THEREFORE,
in
consideration of the premises and the mutual covenants and agreements contained
herein and in the Agreement, the parties hereto do mutually agree, intending
to
be legally bound, as follows:
ARTICLE
1
DEFINITIONS
Except
as
otherwise provided herein, the capitalized terms set forth below shall have
the
following meanings:
A-1
1.1 "Bank
Merger"
shall
refer to the merger of WB with and into NAB as provided in Section 2.1 of this
Bank Merger Agreement.
1.2 "Connecticut
Banking Commissioner"
shall
mean the Banking Commissioner of the State of Connecticut.
1.3 "Effective
Time"
shall
mean the date and time at which the Bank Merger contemplated by this Bank Merger
Agreement becomes effective as provided in Section 2.2 hereof.
1.4 "Massachusetts
Commissioner of Banks"
shall
mean the Commissioner of Banking of the Commonwealth of
Massachusetts.
1.5 "Massachusetts
Division of Banks"
shall
mean the Division of Banks of the Commonwealth of Massachusetts.
1.6 "Merging
Banks"
shall
collectively refer to WB and NAB.
1.7 "SOS"
means
the Office of the Connecticut Secretary of the State.
1.8 "Surviving
Bank"
shall
refer to NAB as the surviving bank in the Bank Merger. The location of the
main
office will be in the City of New Haven, Connecticut.
ARTICLE
2
TERMS
OF
THE BANK MERGER
2.1 The
Bank Merger
(a) Subject
to the terms and conditions set forth in the Agreement at the Effective Time,
WB
shall be merged with and into NAB pursuant to Sections 36a-410a and 36a-412
of
the Connecticut Banking Law and Massachusetts General Laws Chapter 172, Section
36. NAB shall be the Surviving Bank in the Bank Merger. shall continue to be
regulated by the Connecticut Banking Commissioner and, to the extent of the
Surviving Bank's operations located in Massachusetts, the Massachusetts
Commissioner of Banks.
(b) As
a
result of the Bank Merger,
|
(i)
|
each
share of WB Stock issued and outstanding prior to the Effective Time
shall
automatically be canceled and shall cease to exist as shares of capital
stock of WB or the Surviving Bank;
and
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|
(ii)
|
the
1,000 shares of NAB Common Stock issued and outstanding immediately
prior
to the Effective Time shall constitute all of the issued and outstanding
shares of the Surviving Bank.
|
A-2
(c) The
Bank
Merger shall have the effects set forth at Sections 36a-410a and 36a-412 of
the
Connecticut Banking Law.
2.2 Effective
Time
The
Bank
Merger shall become effective as of the close of business on the date that
this
Bank Merger Agreement and Articles of Combination are filed with the SOS and
the
Secretary of the Commonwealth of Massachusetts, or such other time as stated
in
such documents. The Bank Merger shall not be effective unless and until approved
by the Banking Commissioner and all other "Governmental Entities" as
contemplated by the Agreement.
2.3 Name
of the Surviving Bank
The
name of the Surviving Bank
shall be "NewAlliance Bank."
2.4 Charter
On
and
after the Effective Time, the Articles of Organization, as amended, of WB in
effect immediately prior to the Effective Time shall be the Certificate of
Incorporation of the Surviving Bank, until further amended in accordance with
applicable law.
2.5 Bylaws
On
and
after the Effective Time, the Bylaws, as amended, of NAB in effect immediately
prior to the Effective Time shall be the Bylaws of the Surviving Bank, until
further amended in accordance with applicable law.
2.6 Directors
and Officers
The
directors of Surviving Bank immediately after the Effective Time shall be the
directors of NAB immediately prior to the Effective Time. The officers of NAB
immediately prior to the Effective Time, together with any additional officers
of WB as the Directors of NAB may appoint, shall be the officers of the
Surviving Bank immediately after the Effective Time.
2.7 Effects
of the Merger.
(a) Upon
consummation of the Bank Merger, and in addition to the effects under applicable
law, including without limitation Sections 36a-410a and 36a-412 of the
Connecticut Banking Law,
(i) all
rights, franchises and interests of WB in and to every type of property (real,
personal and mixed), tangible and intangible, and chooses in action shall be
transferred to and vested in the Surviving Bank by virtue of the Bank Merger
without any deed or other transfer, and the Surviving Bank, without any order
or
other action on the part of any court or otherwise, shall hold and enjoy all
rights of property, franchises and interests, including appointments,
designations and nominations, and all other rights and interests as trustee,
executor, administrator, registrar of stocks and bonds, guardian of estates,
assignee, receiver and
A-3
committee
of estates of the mentally impaired, and in every other fiduciary capacity,
in
the same manner and to the same extent as such rights, franchises and interests
were held or enjoyed by WB immediately prior to the Effective Time;
and
(ii) the
Surviving Bank shall be liable for all liabilities of WB, fixed or contingent,
including all deposits, accounts, debts, obligations and contracts thereof,
matured or unmatured, whether accrued, absolute, contingent or otherwise, and
whether or not reflected or reserved against on balance sheets, books of account
or records thereof, and all rights of creditors or obligees and all liens on
property of WB shall be preserved unimpaired.
ARTICLE
3
MISCELLANEOUS
3.1 Amendments
To
the
extent permitted by law, this Bank Merger Agreement may be amended by a
subsequent writing signed by the parties hereto upon the approval of the board
of directors of each of the parties hereto.
3.2 Additional
Actions.
If, at
any time after the Effective Time, the Surviving Bank shall consider that any
further assignments or assurances in law or any other acts are necessary or
desirable to (i) vest, perfect or confirm, of record or otherwise, in the
Surviving Bank its rights, title or interest in, to or under any of the rights,
properties or assets of WB acquired or to be acquired by the Surviving Bank
as a
result of, or in connection with, the Bank Merger, or (ii) otherwise carry
out
the purposes of this Bank Merger Agreement, WB and its proper officers and
directors shall be deemed to have granted to the Surviving Bank an irrevocable
power of attorney to execute and deliver all such proper deeds, assignments
and
assurances in law and to do all acts necessary or proper to vest, perfect or
confirm title to and possession of such rights, properties or assets in the
Surviving Bank and otherwise to carry out the purposes of this Bank Merger
Agreement; and the proper officers and directors of the Surviving Bank are
fully
authorized in the name of WB or otherwise to take any and all such
action.
3.3 Successors
This
Bank
Merger Agreement shall be binding on the successors of NAB and WB.
3.4 Counterparts
This
Bank
Merger Agreement may be executed in counterparts, each of which shall be
considered one and the same agreement and each of which shall be deemed to
be an
original, and shall become effective when counterparts have been signed by
each
of the parties and delivered to the other party, it being understood that all
parties need not sign the same counterpart.
A-4
In
accordance with the procedures set forth in the Banking Law of the State of
Connecticut and other applicable law, NAB and WB have caused this Bank Merger
Agreement to be executed by their duly authorized representatives on the date
indicated.
| NEWALLIANCE BANK | |
|
By:
______________________________
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|
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Name:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
|
|
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Title:
Executive Vice President and Chief Financial Officer
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ATTEST:
|
|
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By:
__________________________
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|
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Name:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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Title:
Executive Vice President and Corporate Secretary
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The
Board of Directors of NewAlliance Bank
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______________________
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_____________________
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▇▇▇▇▇▇▇
▇. ▇▇▇▇▇
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▇▇▇▇
▇. ▇▇▇▇▇▇▇
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______________________
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_____________________
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▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇
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______________________
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_____________________
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▇▇▇▇▇▇
▇. ▇▇▇▇▇ ▇▇.
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▇▇▇▇
▇. ▇▇▇▇▇▇▇▇
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______________________
|
_____________________
|
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▇▇▇▇▇
▇. ▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇▇▇
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______________________
|
_____________________
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▇▇▇▇▇▇
▇. ▇▇▇▇▇
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▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇▇▇
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_____________________
|
_____________________
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▇▇▇▇▇▇▇
▇▇▇▇▇
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▇▇▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇
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_____________________
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▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇▇▇▇
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A-5
| WESTBANK | |
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By:
____________________________
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Name:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
|
|
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Title:
President and Chief Executive Officer
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ATTEST:
|
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By:
____________________________
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Name:
__________________________
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|
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Title:
___________________________
|
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The
Board of Directors of Westbank
|
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______________________
|
_____________________
|
|
▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇▇, ▇▇.,
|
G.
▇▇▇▇▇ ▇▇▇▇▇▇
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______________________
|
_____________________
|
|
▇▇▇▇
▇. ▇▇▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇
▇. ▇▇▇▇▇▇
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______________________
|
_____________________
|
|
▇▇▇▇▇
▇. ▇▇▇▇▇▇▇▇▇▇▇
|
▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇▇
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______________________
|
_____________________
|
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▇▇▇▇▇▇
▇. ▇▇▇▇▇
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▇▇▇▇▇
▇. ▇▇▇▇▇▇▇
|
A-6
EXHIBIT
B
FORM
OF VOTING AGREEMENT
July
18,
2006
NewAlliance
Bancshares, Inc.
▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Ladies
and Gentlemen:
The
undersigned is a director or executive officer of Westbank Corporation
("Westbank")
and is
the beneficial holder of shares of common stock of Westbank ("Westbank
Common Stock").
Westbank
and NewAlliance Bancshares, Inc. ("NewAlliance")
are
considering the execution of an Agreement and Plan of Merger ("Agreement")
contemplating the merger of Westbank with and into NewAlliance, with NewAlliance
as the surviving corporation of the merger (the "Merger"),
and
the merger of Westbank ("WB")
with and
into NewAlliance Bank ("NAB"), with NAB as the surviving corporation (the
"Bank
Merger"),
such
execution being a condition in the case of NewAlliance to the execution and
delivery of this letter agreement ("Letter
Agreement").
In
consideration of the substantial expenses that NewAlliance will incur in
connection with the transactions contemplated by the Agreement and in order
to
induce NewAlliance to execute the Agreement and to proceed to incur such
expenses, the undersigned agrees and undertakes, in his or her capacity as
a
shareholder of Westbank and not in his or her capacity as a director or
executive officer of Westbank, as follows:
1. The
undersigned, while this Letter Agreement is in effect, shall vote or cause
to be
voted in
favor of
the
Agreement and the Merger all of the shares of Westbank Common Stock that the
undersigned shall be entitled to so vote, whether such shares are beneficially
owned by the undersigned on the date of this Letter Agreement or are
subsequently acquired, whether pursuant to the exercise of stock options or
otherwise (the "Subject
Shares"),
at
the special meeting of Westbank's shareholders to be called and held following
the date hereof, to consider the Agreement, the Merger and the Bank Merger
(the
"Special
Meeting").
The
undersigned shall not sell, pledge, transfer or otherwise dispose of any Subject
Shares, provided, however, the undersigned may pledge Subject Shares acquired
hereafter in order to secure indebtedness to a financial institution incurred
by
the undersigned to finance the exercise price of Options to acquire such Subject
Shares; and provided further, however, that the undersigned may transfer his
or
her Subject Shares to charities, charitable trusts, or other charitable
organizations under Section 501(c)(3) of the Code, lineal descendents or a
spouse of the undersigned, or to a trust or other entity for the benefit of
one
or more of the foregoing persons, provided that the transferee agrees in writing
to be bound by the terms of this Letter Agreement. The Subject Shares owned
by
the undersigned as of the date of this Letter Agreement are identified on
Annex
I.
2. At
any
meeting of shareholders of Westbank, however called, or at any adjournment
thereof, or in any other circumstances in which the undersigned is entitled
to
vote, consent or
B-1
give
any
other approval, except as otherwise agreed to in writing in advance by
NewAlliance, the undersigned shall vote or cause to be voted the Subject Shares
against
the
following actions:
(i) any
action or agreement that would result in a breach in any material respect of
any
covenant, representation or warranty or any other obligation or agreement of
Westbank or WB under the Agreement or of the undersigned hereunder; or
(ii) any
action or agreement that could reasonably be expected to impede, interfere
with,
delay, postpone or attempt to discourage the Merger or the Bank Merger,
including, but not limited to:
(A)
the
adoption by Westbank of any proposal or offer with respect to any of the
following (other than the transactions contemplated by the Agreement) involving
Westbank or any Westbank Subsidiaries: (i) any merger, consolidation, share
exchange, business combination or other similar transaction; (ii) any sale,
lease, exchange, mortgage, pledge, transfer or other disposition of 25% or
more
of its consolidated assets in a single transaction or series of transactions;
or
(iii) any tender offer or exchange offer for 25% or more of the outstanding
shares of its capital stock or the filing of a registration statement under
the
Securities Act in connection therewith; or
(B)
after
the Agreement and Merger have been approved by the shareholders of Westbank,
any
action to abandon the Agreement and Merger. The undersigned further agrees
not
to commit or agree to take any action inconsistent with the foregoing
agreements.
3. The
undersigned acknowledges and agrees that any remedy at law for breach of the
foregoing provisions shall be inadequate and that, in addition to any other
relief which may be available, NewAlliance shall be entitled to temporary and
permanent injunctive relief without the necessity of proving actual
damages.
4. The
foregoing restrictions shall not apply to shares with respect to which the
undersigned may have voting power as a fiduciary for others. In addition, this
Letter Agreement shall only apply to actions taken by the undersigned in his
or
her capacity as a shareholder of Westbank and shall not in any way limit or
affect actions the undersigned may take in his or her capacity as a director
or
executive officer of Westbank.
5. This
Letter Agreement shall automatically terminate if the Agreement is not entered
into by the parties thereto or upon termination of the Agreement in accordance
with its terms.
7. This
Letter Agreement may be executed in one or more counterparts, each of which
shall be deemed to be an original but all of which together shall constitute
one
and the same document.
B-2
IN
WITNESS WHEREOF,
the
undersigned has executed this Letter Agreement as of the date first above
written.
|
Very
truly yours,
|
|
|
________________________________________
|
|
|
Name:
__________________________________
|
Accepted
and agreed to as of the date first above written:
NEWALLIANCE
BANCSHARES, INC.
By:
_____________________________
Name:
___________________________
Title:
____________________________
B-3
EXHIBIT
C
FORM
OF TERMINATION,
RELEASE AND NONCOMPETITION AGREEMENT
This
Termination, Release and Noncompetition Agreement (the “Agreement”) is entered
into as of July 18, 2006 by and among _________________ (the “Executive”),
Westbank Corporation (“WBC”), a Massachusetts corporation, Westbank, a
Massachusetts chartered bank and trust company and a wholly-owned subsidiary
of
WBC, and NewAlliance Bancshares, Inc. (“NewAlliance”), a Delaware
corporation.
RECITALS:
WHEREAS,
NewAlliance, NewAlliance Bank, WBC and Westbank are entering into an Agreement
and Plan of Merger, dated as of July 18, 2006 (the “Merger Agreement”);
and
WHEREAS,
Section 7.5.7 of the Merger Agreement provides that NewAlliance, WBC, Westbank
and the Executive shall enter into this Agreement, which shall terminate the
employment agreement between WBC and the Executive dated December 17, 2003
(the
“Employment Agreement”) as of the Effective Time of the Merger, and in lieu of
any rights and payments under the Employment Agreement, the Executive shall
be
entitled to the rights and payments set forth herein;
NOW
THEREFORE, in consideration of the foregoing and other good and valuable
consideration the receipt and sufficiency of which is hereby acknowledged,
the
Executive, WBC, Westbank and NewAlliance agree as follows:
1. Actions
to be Taken in 2006.
(a) The
Executive hereby agrees to take the following actions between the date hereof
and December 29, 2006, it being the intention of the parties hereto that all
of
such actions shall be fully effective and consummated no later than December
29,
2006 (or such other date as may be specified below):
(i) consent,
to the extent any such consent is required by the Executive, to the accelerated
vesting as of the date the shareholders of WBC approve the Merger Agreement
of
all unvested restricted stock awards granted to the Executive with respect
to
the common stock of WBC, provided that any unvested restricted stock awards
scheduled to vest prior to such date shall vest on their originally scheduled
vesting date;
(ii) exercise
on or before December 22, 2006 all non-qualified stock options held by the
Executive to purchase the common stock of WBC;
(iii) accept
a
lump sum cash payment from WBC or Westbank on December 22, 2006 in the amount
of
$_______ (with applicable withholding taxes to be subtracted from such amount),
representing a partial prepayment of the cash severance the Executive is
entitled to under Section 9(b)(iv) of the Employment Agreement;
(iv) accept
a
lump sum cash payment from WBC or Westbank on December 22, 2006 in the amount
of
$_________ (with applicable withholding taxes to be subtracted from
C-1
such
amount), in full satisfaction of both WBC’s obligations under Section 9(b)(vii)
of the Employment Agreement and NewAlliance’s agreement to extend such benefits
to cover the years 2010 and 2011;
(v) accept
on
or before December 29, 2006 such prepayment, if any, of the dollar amount
specified in Section 2(a) below that may be mutually agreed to by WBC and
NewAlliance in order to avoid the potential reduction in payments under Section
2(c) below; and
(vi) cooperate
with NewAlliance and WBC and take such other steps as may in good faith be
requested of the Executive by NewAlliance in order to avoid the potential
reduction in payments under Section 2(c) below.
(b) WBC
shall
take all steps necessary to accelerate as of the date the shareholders of WBC
approve the Merger Agreement the vesting of all of the unvested restricted
stock
awards granted to the Executive, and WBC or Westbank shall pay to the Executive
on December 22, 2006 the amounts specified in Sections 1(a)(iii) and (iv)
above.
(c) In
the
event the above actions are taken but are insufficient to avoid the potential
reduction in payments under Section 2(c) below, then WBC or Westbank shall
prepay to the Executive on or before December 29, 2006 such portion of the
dollar amount specified in Section 2(a) below as shall be mutually agreed to
by
WBC and NewAlliance (which agreement shall not be unreasonably withheld or
delayed).
2. Payments
to Be Made as of the Effective Time of the Merger.
(a) As
of the
Effective Time of the Merger, provided the Executive is still employed by WBC
immediately prior to such date and provided that the Executive and WBC have
taken all of the actions required to be taken pursuant to Section 1 hereof,
and
in consideration of the obligations and commitments of the Executive under
this
Agreement, WBC or Westbank shall pay to the Executive a lump sum cash amount
equal to $_________, subject to adjustment as set forth in Section 2(c) below
(the “Maximum Amount”), less applicable tax withholdings and less any portion
thereof that is prepaid in December 2006 pursuant to Sections 1(a)(v) and 1(c)
above. In consideration of such payment and the other provisions of this
Agreement, the Executive, WBC, Westbank and NewAlliance hereby agree that the
Employment Agreement and the Executive’s employment with WBC shall be terminated
without any further action of any of the parties hereto, effective immediately
prior to the Effective Time of the Merger, except as set forth in Section 4
hereof. The Executive agrees that the above payment shall be in complete
satisfaction of all of his rights to payments or benefits under the Employment
Agreement, except as set forth in Section 4 hereof.
(b) WBC
and
the Executive represent and warrant that the information with respect to the
Executive contained in Section 4.14.8 of the WBC Disclosure Schedule to the
Merger Agreement accurately reflects the Executive’s taxable Form W-2 income for
each of the four years ended December 31, 2005 and contains a complete listing
of all payments or benefits to the Executive that could be deemed to be a
parachute payment under Section 280G of the Internal Revenue Code of 1986,
as
amended (the “Code”), based on the assumptions set forth in such
schedule.
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(c) Each
of
the parties hereto agrees that if the actions specified in Section 1 above
are
taken as required, then based on Section 2(b) above the payments and benefits
to
be provided to the Executive should not trigger any tax reimbursement payments
pursuant to Section 12 of the Employment Agreement. In the event any of the
actions specified in Section 1 above is not taken as required, or if any of
the
representations in Section 2(b) is not correct, and if such failure results
in
the Maximum Amount, either alone or together with other payments and benefits
which the Executive has the right to receive from NewAlliance, WBC or Westbank,
whether pursuant to this Agreement or otherwise, being a “parachute payment”
under Section 280G of the Code, then the Maximum Amount payable by WBC or
Westbank pursuant to Section 2(a) hereof shall be reduced by the amount which
is
the minimum necessary to result in no portion of the payment payable by WBC
or
Westbank under Section 2(a) being non-deductible to WBC, Westbank or NewAlliance
(or any successors thereto) pursuant to Section 280G of the Code and subject
to
the excise tax imposed under Section 4999 of the Code. If any of the payments
or
benefits to be provided by WBC, Westbank or NewAlliance are subject to the
excise tax imposed by Section 4999 of the Code but are not required to be
reduced by this Section 2(c), then the indemnity under Section 12 of the
Employment Agreement (which section remains in full force and effect pursuant
to
Section 4 of this Agreement) shall be provided to the Executive by NewAlliance;
provided, however, that if the amount of the indemnity is known as of the
Effective Time of the Merger, then such indemnity shall be provided by either
WBC or Westbank at the request of NewAlliance.
(d) As
of the
Business Day immediately prior to the Effective Date of the Merger, provided
the
Executive is still employed by WBC immediately prior to such date, WBC or
Westbank shall pay to the Executive an additional lump sum cash amount equal
to
$_________, less applicable tax withholdings, in complete satisfaction of all
of
the Executive’s rights to payments or benefits under the Executive Supplemental
Retirement Plan Agreement between the Executive and Westbank (formerly Park
West
Bank and Trust Company) dated July 2, 2001 (the “SERP Agreement”). In
consideration of such payment, the parties hereto agree that the SERP Agreement
shall be terminated without any further action of any of the parties hereto
on
or before the date of such payment in accordance with the terms of the Merger
Agreement.
(e) As
of the
Effective Time of the Merger, the Executive shall be given the opportunity
to
purchase the automobile currently provided to him by Westbank at the purchase
price specified in the motor vehicle lease agreement covering such automobile
if
he wishes to do so, provided that in no event shall such fair market value
be
less than the greater of (i) the ▇▇▇▇▇▇ blue book value of such automobile
as of
the Effective Time, or (ii) WBC’s book value or residual leasehold interest in
such automobile as of the Effective Time.
(f) The
parties hereto agree that the payments pursuant to Sections 1(a)(iii), (iv)
and
(v) above should not trigger any of the excise taxes or interest penalties
under
Section 409A of the Code based on the current provisions of such section and
the
proposed regulations issued under Section 409A of the Code. However, in the
event the final regulations issued under Section 409A are construed so as to
impose the excise tax and interest penalties specified under Section 409A of
the
Code on any of the payments under Sections 1(a)(iii), (iv) or (v) of this
Agreement, then NewAlliance shall provide a tax indemnification to the Executive
so that the Executive is in the same after-tax position he would have been
in if
the excise tax and interest penalties under Section 409A of the Code had not
been imposed on such payments; provided, however, that if the amount of the
indemnity is known as of the Effective Time of the Merger,
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then
such
indemnity shall be provided by either WBC or Westbank at the request of
NewAlliance.
3. Payment
of Fringe Benefits.
(a) NewAlliance
agrees to provide the Executive with continued health, dental, life and
disability coverage, pursuant to either the policies currently offered by WBC
and Westbank or the policies to be offered by NewAlliance to the Continuing
Employees of WBC, until the earlier of thirty-six (36) calendar months following
the Effective Time of the Merger or the Executive’s commencement of full-time
employment with a new employer, subject to the terms and conditions of such
policies, with the Executive responsible for paying the same share of any
premiums, copayments or deductibles as if he was an employee and with the
disability and life insurance coverage subject to the maximum coverage limits
in
the current policies of WBC or Westbank, except as set forth below in this
Section 3(a). The health and dental coverage shall include any dependents of
the
Executive who are covered by WBC or Westbank as of the date of this Agreement
and who remain covered by WBC or Westbank as of the Effective Time of the
Merger. In the event the Executive’s participation in any such plan is barred,
NewAlliance shall arrange to provide the Executive with benefits substantially
similar to those which the Executive would otherwise have received under such
plans from which his continued participation is barred or pay to the Executive
a
cash amount equal to the amount NewAlliance would have paid for such coverage
if
the Executive was still an employee. In addition, notwithstanding the foregoing,
if the provision of any of the benefits covered by this Section 3(a) would
trigger the 20% tax and interest penalties under Section 409A of the Code either
due to the nature of such benefit or the length of time it is being provided,
then the benefit(s) that would trigger such tax and interest penalties due
to
the nature of the benefit shall not be provided at all and the benefit(s) that
would trigger the tax and interest penalties if provided beyond the “limited
period of time” set forth in the regulations under Section 409A shall not be
provided beyond such limited period of time (collectively, the “Excluded
Benefits”), and in lieu of the Excluded Benefits NewAlliance shall pay to the
Executive, in a lump sum within 30 days following termination of employment
or
within 30 days after such determination should it occur after termination of
employment, a cash amount equal to the amount NewAlliance would have paid for
such Excluded Benefits in the absence of Section 409A of the Code.
(b) In
calculating the value of the benefits to be provided pursuant to Section 3(a)
above, the parties agree to assume that the premiums in effect as of August
31,
2006 will increase by 15% per year to cover anticipated premium increases over
the 36 month period specified in Section 3(a) above.
4. Releases.
Upon
payment of the amounts set forth in Section 2(a) hereof (as such amount may
be
adjusted pursuant to Section 2(c) hereof) and in Section 2(d) hereof, the
Executive, for himself and for his heirs, successors and assigns, does hereby
release completely and forever discharge WBC and its successors from any
obligation under the Employment Agreement, except for the provisions of Sections
12, 13(b) and 13(c) of the Employment Agreement which shall remain in full
force
and effect, and under the SERP Agreement. The obligations of NewAlliance to
provide benefits pursuant to Section 3 above shall continue for the period
specified therein. This Agreement shall not release WBC or NewAlliance from
any
of the following: (a) obligations to pay to the Executive wages earned up to
the
Effective Time of the Merger; (b) the payment of any of the Executive’s vested
benefits, or honoring any of the Executive’s rights, under the WBC Employee
Plans, excluding any bonus plans, employment
C-4
agreement
or other severance agreement or plan, (c) the payment of the Merger
Consideration with respect to the Executive’s common stock of WBC or stock
options or restricted stock awards with respect to the common stock of WBC,
or
(d) the obligations of NewAlliance under Section 7.6 of the Merger
Agreement.
5. Non-Competition
Provisions.
The
Executive agrees that during the 12-month period immediately following the
Effective Date of the Merger (the “Non-Competition Period”), the Executive will
not (i) engage in, become interested in, directly or indirectly, as a sole
proprietor, as a partner in a partnership, or as a shareholder in a corporation,
or become associated with, in the capacity of employee, director, officer,
principal, agent, trustee or in any other capacity whatsoever, any enterprise
or
entity located in either Hampden County in the Commonwealth of Massachusetts
or
▇▇▇▇▇▇▇ County in the State of Connecticut (collectively, the “Counties” and
individually a “County”), which proprietorship, partnership, corporation,
enterprise or other entity is engaged in any line of business conducted by
NewAlliance, NewAlliance Bank or any of their subsidiaries immediately following
the Effective Time of the Merger, including but not limited to entities which
lend money and take deposits (in each case, a “Competing Business”), provided,
however, that this provision shall not prohibit the Executive from owning bonds,
non-voting preferred stock or up to five percent (5%) of the outstanding common
stock of any Competing Business if such common stock is publicly traded, (ii)
solicit or induce, or cause others to solicit or induce, any employee of
NewAlliance or any of its subsidiaries to leave the employment of such entities,
or (iii) solicit (whether by mail, telephone, personal meeting or any other
means, excluding general solicitations of the public that are not based in
whole
or in part on any list of customers of NewAlliance or any of its subsidiaries)
any customer of NewAlliance or any of its subsidiaries to transact business
with
any Competing Business, or to reduce or refrain from doing any business with
NewAlliance or its subsidiaries, or interfere with or damage (or attempt to
interfere with or damage) any relationship between NewAlliance or its
subsidiaries and any such customers.
6. Enforcement.
(a) This
Agreement shall be construed, enforced and interpreted in accordance with and
governed by the laws of the State of Connecticut, without reference to its
principles of conflict of laws, except to the extent that federal law shall
be
deemed to preempt such state laws.
(b) It
is the
intention of the parties hereto that the provisions of this Agreement shall
be
enforced to the fullest extent permissible under all applicable laws and public
policies, but that the unenforceability or the modification to conform with
such
laws or public policies of any provision hereof shall not render unenforceable
or impair the remainder of the Agreement. The covenants in Section 5 of this
Agreement with respect to the Counties shall be deemed to be separate covenants
with respect to each County, and should any court of competent jurisdiction
conclude or find that this Agreement or any portion is not enforceable with
respect to a County, such conclusion or finding shall in no way render invalid
or unenforceable the covenants herein with respect to the other County.
Accordingly, if any provision shall be determined to be invalid or unenforceable
either in whole or in part, this Agreement shall be deemed amended to delete
or
modify as necessary the invalid or unenforceable provisions to alter the balance
of this Agreement in order to render the same valid and
enforceable.
(c) The
Executive acknowledges that NewAlliance and NewAlliance Bank would not have
entered into the Merger Agreement or intend to consummate the Merger unless
the
C-5
Executive
had, among other things, entered into this Agreement. Any breach of Section
5 of
this Agreement will result in irreparable damage to NewAlliance and NewAlliance
Bank for which NewAlliance and NewAlliance Bank will not have an adequate remedy
at law. In addition to any other remedies and damages available to NewAlliance
and NewAlliance Bank, the Executive further acknowledges that NewAlliance and
NewAlliance Bank shall be entitled to seek injunctive relief hereunder to enjoin
any breach of Section 5 of this Agreement, and the parties hereby consent to
any
injunction issued in favor of NewAlliance and NewAlliance Bank by any court
of
competent jurisdiction, without prejudice to any other right or remedy to which
NewAlliance and NewAlliance Bank may be entitled. The Executive represents
and
acknowledges that, in light of his experience and capabilities, the Executive
can obtain employment with other than a Competing Business or in a business
engaged in other lines and/or of a different nature than those engaged in by
NewAlliance or its subsidiaries or affiliates, and that the enforcement of
a
remedy by way of injunction will not prevent the Consultant from earning a
livelihood. Each of the remedies available to NewAlliance and NewAlliance Bank
in the event of a breach by the Consultant shall be cumulative and not mutually
exclusive.
7. General.
(a) Heirs,
Successors and Assigns.
The
terms
of this Agreement shall be binding upon the parties hereto and their respective
heirs, successors and assigns.
(b) Final
Agreement. This
Agreement represents the entire understanding of the parties with respect to
the
subject matter hereof and supersedes all prior understandings, written or oral.
The terms of this Agreement may be changed, modified or discharged only by
an
instrument in writing signed by each of the parties hereto. In the event the
Internal Revenue Service issues final regulations under Section 409A of the
Code
prior to the Effective Time of the Merger and such regulations are deemed to
result in the imposition of the excise taxes and/or interest penalties under
Section 409A of the Code on any of the payments or benefits to be provided
under
this Agreement, then the parties hereto agree to negotiate in good faith an
amendment to this Agreement to avoid such excise taxes and/or interest penalties
to the extent possible, provided that the amounts payable to the Executive
under
Sections 1, 2(a) and 2(d) of this Agreement shall not be delayed beyond the
Effective Time of the Merger or reduced in the aggregate.
(c) Withholdings.
WBC,
Westbank and NewAlliance may withhold from any amounts payable under this
Agreement such federal, state, local or foreign taxes as may be required to
be
withheld pursuant to applicable law or regulation.
(d) Defined
Terms. Any
capitalized terms not defined in this Agreement shall have as their meaning
the
definitions contained in the Merger Agreement.
(e) Voluntary
Action and Waiver. The
Executive acknowledges that by his free and voluntary act of signing below,
the
Executive agrees to all of the terms of this Agreement and intends to be legally
bound thereby. The Executive acknowledges that he has been advised to consult
with an attorney prior to executing this Agreement.
(f) Counterparts.
This
Agreement may be executed in one or more counterparts, each of which shall
be
deemed to be an original but all of which together shall constitute one and
the
same instrument.
C-6
8. Effectiveness.
Notwithstanding anything to the contrary contained herein, this Agreement shall
be subject to consummation of the Merger in accordance with the terms of the
Merger Agreement, as the same may be amended by the parties thereto in
accordance with its terms. In the event the Merger Agreement is terminated
for
any reason, this Agreement shall be deemed null and void with respect to all
actions not yet taken pursuant to this Agreement.
[Signature
page follows]
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IN
WITNESS WHEREOF, NewAlliance, WBC and Westbank have each caused this Agreement
to be executed by their duly authorized officers, and the Executive has signed
this Agreement, effective as of the date first above written.
|
WITNESS:
|
EXECUTIVE:
|
|
________________________________
|
____________________________ |
|
Name:
__________________________
|
Name:
__________________________
|
|
ATTEST:
|
WESTBANK
CORPORATION
|
|
________________________________
|
By:________________________________
|
|
Name:
__________________________
|
Name:
_____________________________
|
|
Title:
______________________________
|
|
|
ATTEST:
|
WESTBANK
|
|
________________________________
|
By:________________________________
|
|
Name:
__________________________
|
Name:
_____________________________
|
|
Title:
______________________________
|
|
|
ATTEST:
|
NEWALLIANCE
BANCSHARES, INC.
|
|
_______________________________
|
By:_______________________________
|
|
Name:
_________________________
|
Name:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
|
|
Title:
Executive Vice President and Chief
|
|
|
Financial
Officer
|
C-8
EXHIBIT
D
FORM
OF TERMINATION
AND RELEASE AGREEMENT
This
Termination and Release Agreement (the “Agreement”) is entered into as of
July 18, 2006 by and among _________________ (the “Executive”), Westbank
Corporation (“WBC”), a Massachusetts corporation, Westbank, a Massachusetts
chartered bank and trust company and a wholly-owned subsidiary of WBC, and
NewAlliance Bancshares, Inc. (“NewAlliance”), a Delaware
corporation.
RECITALS:
WHEREAS,
NewAlliance, NewAlliance Bank, WBC and Westbank are entering into an Agreement
and Plan of Merger, dated as of July 18, 2006 (the “Merger Agreement”);
and
WHEREAS,
Section 7.5.7 of the Merger Agreement provides that NewAlliance, WBC, Westbank
and the Executive shall enter into this Agreement, which shall terminate the
change of control agreement between WBC, Westbank and the Executive dated
December 17, 2003 (the “Change of Control Agreement”) as of the Effective Time
of the Merger, and in lieu of any rights and payments under the Change of
Control Agreement, the Executive shall be entitled to the rights and payments
set forth herein;
NOW
THEREFORE, in consideration of the foregoing and other good and valuable
consideration the receipt and sufficiency of which is hereby acknowledged,
the
Executive, WBC, Westbank and NewAlliance agree as follows:
1. Actions
to be Taken in 2006.
(a) The
Executive hereby agrees to take the following actions between the date hereof
and December 29, 2006, it being the intention of the parties hereto that all
of
such actions shall be fully effective and consummated no later than December
29,
2006 (or such other date as may be specified below):
(i) consent,
to the extent any such consent is required by the Executive, to the accelerated
vesting as of the date the shareholders of WBC approve the Merger Agreement
of
all unvested restricted stock awards granted to the Executive with respect
to
the common stock of WBC, provided that any unvested restricted stock awards
scheduled to vest prior to such date shall vest on their originally scheduled
vesting date;
(ii) accept
a
lump sum cash payment from WBC or Westbank on December 22, 2006 in the amount
of
$_______ (with applicable withholding taxes to be subtracted from such amount),
representing a partial prepayment of the cash severance the Executive is
entitled to under Section 6(b) of the Change of Control
Agreement;
D-1
(iii) accept
on
or before December 29, 2006 such prepayment, if any, of the dollar amount
specified in Section 2(a) below that may be mutually agreed to by WBC and
NewAlliance in order to avoid the potential reduction in payments under Section
2(c) below; and
(iv) cooperate
with NewAlliance and WBC and take such other steps as may in good faith be
requested of the Executive by NewAlliance in order to avoid the potential
reduction in payments under Section 2(c) below.
(b) WBC
shall
take all steps necessary to accelerate as of the date the shareholders of WBC
approve the Merger Agreement the vesting of all of the unvested restricted
stock
awards granted to the Executive, and WBC or Westbank shall pay to the Executive
on December 22, 2006 the amount specified in Section 1(a)(ii)
above.
(c) In
the
event the above actions are taken but are insufficient to avoid the potential
reduction in payments under Section 2(c) below, then WBC or Westbank shall
prepay to the Executive on or before December 29, 2006 such portion of the
dollar amount specified in Section 2(a) below as shall be mutually agreed to
by
WBC and NewAlliance (which agreement shall not be unreasonably withheld or
delayed).
2. Payments
to Be Made as of the Effective Time of the Merger.
(a) As
of the
Effective Time of the Merger, provided the Executive is still employed by WBC
immediately prior to such date and provided that the Executive and WBC have
taken all of the actions required to be taken pursuant to Section 1 hereof,
WBC
or Westbank shall pay to the Executive a lump sum cash amount equal to
$_________, subject to adjustment as set forth in Section 2(c) below (the
“Maximum Amount”), less applicable tax withholdings and less any portion thereof
that is prepaid in December 2006 pursuant to Sections 1(a)(iii) and 1(c) above.
In consideration of such payment and the other provisions of this Agreement,
the
Executive, WBC, Westbank and NewAlliance hereby agree that the Change of Control
Agreement and the Executive’s employment with WBC shall be terminated without
any further action of any of the parties hereto, effective immediately prior
to
the Effective Time of the Merger, except as set forth in Section 4 hereof.
The
Executive agrees that the above payment shall be in complete satisfaction of
all
of his rights to payments or benefits under the Change of Control Agreement,
except as set forth in Section 4 hereof.
(b) WBC
and
the Executive represent and warrant that the information with respect to the
Executive contained in Section 4.14.8 of the WBC Disclosure Schedule to the
Merger Agreement accurately reflects the Executive’s taxable Form W-2 income for
each of the four years ended December 31, 2005 and contains a complete listing
of all payments or benefits to the Executive that could be deemed to be a
parachute payment under Section 280G of the Internal Revenue Code of 1986,
as
amended (the “Code”), based on the assumptions set forth in such
schedule.
D-2
(c) Each
of
the parties hereto agrees that if the actions specified in Section 1 above
are
taken as required, then based on Section 2(b) above the payments and benefits
to
be provided to the Executive should not trigger any tax reimbursement payments
pursuant to Section 13 of the Change of Control Agreement. In the event any
of
the actions specified in Section 1 above is not taken as required, or if any
of
the representations in Section 2(b) is not correct, and if such failure results
in the Maximum Amount, either alone or together with other payments and benefits
which the Executive has the right to receive from NewAlliance, WBC or Westbank,
whether pursuant to this Agreement or otherwise, being a “parachute payment”
under Section 280G of the Code, then the Maximum Amount payable by WBC or
Westbank pursuant to Section 2(a) hereof shall be reduced by the amount which
is
the minimum necessary to result in no portion of the payment payable by WBC
or
Westbank under Section 2(a) being non-deductible to WBC, Westbank or NewAlliance
(or any successors thereto) pursuant to Section 280G of the Code and subject
to
the excise tax imposed under Section 4999 of the Code. If any of the payments
or
benefits to be provided by WBC, Westbank or NewAlliance are subject to the
excise tax imposed by Section 4999 of the Code but are not required to be
reduced by this Section 2(c), then the indemnity under Section 13 of the Change
of Control Agreement (which section remains in full force and effect pursuant
to
Section 4 of this Agreement) shall be provided to the Executive by NewAlliance;
provided, however, that if the amount of the indemnity is known as of the
Effective Time of the Merger, then such indemnity shall be provided by either
WBC or Westbank at the request of NewAlliance.
(d) As
of the
Business Day immediately prior to the Effective Date of the Merger, provided
the
Executive is still employed by WBC immediately prior to such date, WBC or
Westbank shall pay to the Executive an additional lump sum cash amount equal
to
$_________, less applicable tax withholdings, in complete satisfaction of all
of
the Executive’s rights to payments or benefits under the Executive Supplemental
Retirement Plan Agreement between the Executive and Westbank (formerly Park
West
Bank and Trust Company) dated July 2, 2001 (the “SERP Agreement”). In
consideration of such payment, the parties hereto agree that the SERP Agreement
shall be terminated without any further action of any of the parties hereto
on
or before the date of such payment in accordance with the terms of the Merger
Agreement.
(e) The
parties hereto agree that the payments pursuant to Sections 1(a)(ii) and (iii)
above should not trigger any of the excise taxes or interest penalties under
Section 409A of the Code based on the current provisions of such section and
the
proposed regulations issued under Section 409A of the Code. However, in the
event the final regulations issued under Section 409A are construed so as to
impose the excise tax and interest penalties specified under Section 409A of
the
Code on any of the payments under Sections 1(a)(ii) or (iii) of this Agreement,
then NewAlliance shall provide a tax indemnification to the Executive so that
the Executive is in the same after-tax position he would have been in if the
excise tax and interest penalties under Section 409A of the Code had not been
imposed on such payments; provided, however, that if the amount of the indemnity
is known as of the Effective Time of the Merger, then such indemnity shall be
provided by either WBC or Westbank at the request of
NewAlliance.
D-3
3. Payment
of Fringe Benefits.
(a) NewAlliance
agrees to provide the Executive with continued health, dental, life and
disability coverage, pursuant to either the policies currently offered by WBC
and Westbank or the policies to be offered by NewAlliance to the Continuing
Employees of WBC, until the earlier of thirty (30) calendar months following
the
Effective Time of the Merger or the Executive’s commencement of full-time
employment with a new employer, subject to the terms and conditions of such
policies, with the Executive responsible for paying the same share of any
premiums, copayments or deductibles as if he was an employee and with the
disability and life insurance coverage subject to the maximum coverage limits
in
the current policies of WBC or Westbank, except as set forth below in this
Section 3(a). The health and dental coverage shall include any dependents of
the
Executive who are covered by WBC or Westbank as of the date of this Agreement
and who remain covered by WBC or Westbank as of the Effective Time of the
Merger. In the event the Executive’s participation in any such plan is barred,
NewAlliance shall arrange to provide the Executive with benefits substantially
similar to those which the Executive would otherwise have received under such
plans from which his continued participation is barred or pay to the Executive
a
cash amount equal to the amount NewAlliance would have paid for such coverage
if
the Executive was still an employee. In addition, notwithstanding the foregoing,
if the provision of any of the benefits covered by this Section 3(a) would
trigger the 20% tax and interest penalties under Section 409A of the Code either
due to the nature of such benefit or the length of time it is being provided,
then the benefit(s) that would trigger such tax and interest penalties due
to
the nature of the benefit shall not be provided at all and the benefit(s) that
would trigger the tax and interest penalties if provided beyond the “limited
period of time” set forth in the regulations under Section 409A shall not be
provided beyond such limited period of time (collectively, the “Excluded
Benefits”), and in lieu of the Excluded Benefits NewAlliance shall pay to the
Executive, in a lump sum within 30 days following termination of employment
or
within 30 days after such determination should it occur after termination of
employment, a cash amount equal to the amount NewAlliance would have paid for
such Excluded Benefits in the absence of Section 409A of the Code.
(b) In
calculating the value of the benefits to be provided pursuant to Section 3(a)
above, the parties agree to assume that the premiums in effect as of August
31,
2006 will increase by 15% per year to cover anticipated premium increases over
the 30 month period specified in Section 3(a) above.
4. Releases.
Upon
payment of the amounts set forth in Section 2(a) hereof (as such amount may
be
adjusted pursuant to Section 2(c) hereof) and in Section 2(d) hereof, the
Executive, for himself and for his heirs, successors and assigns, does hereby
release completely and forever discharge WBC, Westbank and their successors
from
any obligation under the Change of Control Agreement, except for the provisions
of Section 13 of the Change of Control Agreement which shall remain in full
force and effect, and under the SERP Agreement. The obligations of NewAlliance
to provide benefits pursuant to Section 3 above shall continue for the period
specified therein. This Agreement shall not release WBC, Westbank or NewAlliance
from
D-4
any
of
the following: (a) obligations to pay to the Executive wages earned up to the
Effective Time of the Merger; (b) the payment of any of the Executive’s vested
benefits, or honoring any of the Executive’s rights, under the WBC Employee
Plans, excluding any bonus plans, employment agreement, change of control
agreement or other severance agreement or plan, (c) the payment of the Merger
Consideration with respect to the Executive’s common stock of WBC or stock
options or restricted stock awards with respect to the common stock of WBC,
or
(d) the obligations of NewAlliance under Section 7.6 of the Merger
Agreement.
5. General.
(a) Heirs,
Successors and Assigns.
The
terms
of this Agreement shall be binding upon the parties hereto and their respective
heirs, successors and assigns.
(b) Final
Agreement. This
Agreement represents the entire understanding of the parties with respect to
the
subject matter hereof and supersedes all prior understandings, written or oral.
The terms of this Agreement may be changed, modified or discharged only by
an
instrument in writing signed by each of the parties hereto. In the event the
Internal Revenue Service issues final regulations under Section 409A of the
Code
prior to the Effective Time of the Merger and such regulations are deemed to
result in the imposition of the excise taxes and/or interest penalties under
Section 409A of the Code on any of the payments or benefits to be provided
under
this Agreement, then the parties hereto agree to negotiate in good faith an
amendment to this Agreement to avoid such excise taxes and/or interest penalties
to the extent possible, provided that the amounts payable to the Executive
under
Sections 1, 2(a) and 2(d) of this Agreement shall not be delayed beyond the
Effective Time of the Merger or reduced in the aggregate.
(c) Withholdings.
WBC,
Westbank and NewAlliance may withhold from any amounts payable under this
Agreement such federal, state, local or foreign taxes as may be required to
be
withheld pursuant to applicable law or regulation.
(d) Governing
Law. This
Agreement shall be construed, enforced and interpreted in accordance with and
governed by the laws of the State of Connecticut, without reference to its
principles of conflicts of law, except to the extent that federal law shall
be
deemed to preempt such state laws.
(e) Defined
Terms. Any
capitalized terms not defined in this Agreement shall have as their meaning
the
definitions contained in the Merger Agreement.
(f) Voluntary
Action and Waiver. The
Executive acknowledges that by his free and voluntary act of signing below,
the
Executive agrees to all of the terms of this Agreement and intends to be legally
bound thereby. The Executive acknowledges that he has been advised to consult
with an attorney prior to executing this Agreement.
D-5
(g) Counterparts.
This
Agreement may be executed in one or more counterparts, each of which shall
be
deemed to be an original but all of which together shall constitute one and
the
same instrument.
6. Effectiveness.
Notwithstanding anything to the contrary contained herein, this Agreement shall
be subject to consummation of the Merger in accordance with the terms of the
Merger Agreement, as the same may be amended by the parties thereto in
accordance with its terms. In the event the Merger Agreement is terminated
for
any reason, this Agreement shall be deemed null and void with respect to all
actions not yet taken pursuant to this Agreement.
[Signature
page follows]
D-6
IN
WITNESS WHEREOF, NewAlliance, WBC and Westbank have each caused this Agreement
to be executed by their duly authorized officers, and the Executive has signed
this Agreement, effective as of the date first above written.
|
WITNESS:
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EXECUTIVE:
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________________________________
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____________________________ |
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Name:
__________________________
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Name:
__________________________
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ATTEST:
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WESTBANK
CORPORATION
|
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________________________________
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By:________________________________
|
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Name:
__________________________
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Name:
_____________________________
|
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Title:
______________________________
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|
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ATTEST:
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WESTBANK
|
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________________________________
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By:________________________________
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Name:
__________________________
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Name:
_____________________________
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Title:
______________________________
|
|
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ATTEST:
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NEWALLIANCE
BANCSHARES, INC.
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_______________________________
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By:_______________________________
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Name:
_________________________
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Name:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
|
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Title:
Executive Vice President and Chief
|
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Financial
Officer
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D-7
EXHIBIT
E
FORM
OF AFFILIATES AGREEMENT
[DATE]
NewAlliance
Bancshares, Inc.
▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Gentlemen:
I
have
been advised that I might be considered to be an "affiliate" of Westbank, a
Massachusetts corporation ("Westbank"), for purposes of paragraphs (c) and
(d)
of Rule 145 of the Securities and Exchange Commission (the "SEC") under the
Securities Act of 1933, as amended (the "Securities Act").
NewAlliance
Bancshares, Inc. ("NewAlliance") and Westbank have entered into an Agreement
and
Plan of Merger, dated as of July 18, 2006 (the "Agreement"). Upon consummation
of the merger contemplated by the Agreement (the "Merger"), I may receive shares
of common stock of NewAlliance ("NewAlliance Common Stock") in exchange for
my
shares of common stock, par value $2.00 per share, of Westbank ("Westbank Common
Stock"). This agreement is hereinafter referred to as the "Letter
Agreement."
I
represent and warrant to, and agree with, NewAlliance as follows:
1. I
have
read this Letter Agreement and the Agreement and have discussed their
requirements and other applicable limitations upon my ability to sell, pledge,
transfer or otherwise dispose of shares of the NewAlliance Common Stock, to
the
extent I felt necessary, with my counsel or counsel for Westbank.
2. I
have
been advised that any issuance of shares of the NewAlliance Common Stock to
me
pursuant to the Merger will be registered with the SEC. I have also been
advised, however, that, because I may be an "affiliate" of Westbank at the
time
the Merger will be submitted for a vote of the shareholders of Westbank and
my
disposition of such shares has not been registered under the Securities Act
of
1933 (the "Securities Act"), I must hold such shares indefinitely unless (i)
such disposition of such shares is subject to an effective registration
statement and to the availability of a prospectus under the Securities Act,
(ii)
a sale of such shares is made in conformity with the provisions of Rule 145(d)
under the Securities Act, (iii) a sale of such shares is made following
expiration of the restrictive period set forth in Rule 145(d)(2) or (3) or
(iv)
in an opinion of counsel, in form and substance reasonably satisfactory to
NewAlliance, I am advised that some other exemption from registration is
available with respect to any such proposed disposition of such
shares.
3. I
understand and agree that stop transfer instructions will be given to the
transfer agent of NewAlliance with respect to the shares of NewAlliance Common
Stock I receive pursuant to the
E-1
Merger
and that there will be placed on the certificate representing such shares,
or
any certificates delivered in substitution therefor, a legend stating in
substance:
The
shares represented by this certificate were issued in a transaction to which
Rule 145 under the Securities Act applies. The shares represented by this
certificate may be transferred only in accordance with the terms of an agreement
between the registered holder hereof and NewAlliance, a copy of which agreement
is on file at the principal offices of NewAlliance. A copy of such agreement
shall be provided to the holder hereof without charge upon receipt by
NewAlliance of a written request.
4. Unless
a
transfer of my shares of the NewAlliance Common Stock is a sale made in
conformity with the provisions of Rule 145(d), made following expiration of
the
restrictive period set forth in Rule 145(d) or made pursuant to any effective
registration statement under the Securities Act, NewAlliance reserves the right
to put an appropriate legend on the certificate issued to my
transferee.
It
is
understood and agreed that this Letter Agreement shall terminate and be of
no
further force and effect if the Agreement is terminated in accordance with
its
terms. It is also understood and agreed that this Letter Agreement shall
terminate and be of no further force and effect and the stop transfer
instructions set forth above shall be lifted forthwith upon the delivery by
the
undersigned to NewAlliance of a copy of a letter from the staff of the SEC,
an
opinion of counsel in form and substance reasonably satisfactory to NewAlliance,
or other evidence reasonably satisfactory to NewAlliance, to the effect that
a
transfer of my shares of the NewAlliance Common Stock will not violate the
Securities Act or any of the rules and regulations of the SEC thereunder. In
addition, it is understood and agreed that at my request the legend set forth
in
Paragraph 3 above shall be removed forthwith from the certificate or
certificates representing my shares of the NewAlliance Common Stock upon
expiration of the restrictive period set forth in Rule 145(d)(2), so long as
NewAlliance is then in compliance with SEC Rule 144(c), or if NewAlliance shall
have received a copy of a letter from the staff of the SEC, an opinion of
counsel in form and substance reasonably satisfactory to NewAlliance, or other
evidence satisfactory to NewAlliance that a transfer of my shares of the
NewAlliance Common Stock represented by such certificate or certificates will
be
a sale made in conformity with the provisions of Rule 145(d), or made pursuant
to an effective registration statement under the Securities Act.
5. I
recognize and agree that the foregoing provisions also apply to (i) my spouse,
(ii) any relative of mine or my spouse's occupying my home, (iii) any trust
or
estate in which I, my spouse or any such relative owns at least 10% beneficial
interest or of which any of us serves as trustee, executor or in any similar
capacity and (iv) any corporation or other organization in which I, my spouse
or
any such relative owns at least 10% of any class of equity securities or of
the
equity interest.
6. Execution
of this Letter Agreement should not be construed as an admission on my part
that
I am an "affiliate" of Westbank as described in the first paragraph of this
Letter Agreement or as a waiver of any rights I may have to object to any claim
that I am such an affiliate on or after the date of this Letter
Agreement.
E-2
*
* * *
*
This
Letter Agreement shall be binding on my heirs, legal representatives and
successors and shall inure to the benefit of NewAlliance's successors and
assigns.
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Very
truly yours,
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|
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[Signature]
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E-3
ANNEX
I
Shareholder
Agreement
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___________________________________
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|
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[Name]
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Name
of Shareholder
|
Shares
of Westbank
Common
Stock
Beneficially
Owned
(exclusive
of
unexercised
stock options)
|
Options
on Westbank
Common
Stock
|