Item 1.01. Entry into a Material Definitive Agreement.
On May 23, 2022, Cambridge Bancorp, a Massachusetts corporation (the “Company”), entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Northmark Bank (“Northmark”) and Cambridge Trust Company (“Cambridge Trust”), the Company’s subsidiary bank, pursuant to which Northmark will merge with and into Cambridge Trust, with Cambridge Trust as the surviving bank (the “Merger”).
Pursuant to the terms of the Merger Agreement, which has been unanimously approved by the boards of directors of each party, upon the closing of the Merger, each outstanding share of Northmark common stock, other than shares held by Northmark as treasury stock (which will be cancelled) and shares with respect to which dissenters’ rights are properly exercised and not withdrawn under Massachusetts law, will be converted into the right to receive 0.9950 shares of the Company’s common stock.
Effective at the closing of the transaction, Jane C. Walsh, currently the President and Chief Executive Officer of Northmark, will be appointed to the board of directors of the Company and the board of directors of Cambridge Trust, to serve until the next annual meeting of the Company at which time Ms. Walsh will be nominated for re-election.
The consummation of the Merger is subject to customary closing conditions, including (i) the receipt of regulatory approvals, (ii) approval of the Merger Agreement by the shareholders of Northmark and (iii) that no injunction or legal restraint exists that have the effect of prohibiting the consummation of the Merger. Moreover, each party’s obligations to consummate the Merger are subject to certain other conditions including (a) the accuracy of the other party’s representations and warranties and (b) the other party’s compliance with its obligations. Subject to the satisfaction of the closing conditions, the parties anticipate that the Merger will be consummated in the fourth quarter of 2022.
The Merger Agreement contains certain covenants, including, among others, covenants providing (i) for each of the parties to use reasonable best efforts to cause the transaction to be consummated, (ii) for Northmark to carry on its business in the ordinary course consistent with past practice during the interim period between the execution of the Merger Agreement and completion of the Merger and (iii) for Northmark not to engage in certain kinds of transactions during this period.
The Merger Agreement contains certain termination rights for the Company and Northmark. Upon termination of the Merger Agreement under specified circumstances, Northmark will be required to pay the Company a termination fee of $2,200,000.
The foregoing description of the Merger Agreement does not purport to be a complete description and is qualified in its entirety by reference to the full text of the Merger Agreement. A copy of the Merger Agreement is attached hereto as Exhibit 2.1 and is incorporated herein by reference.
The Merger Agreement has been included to provide investors and security holders with information regarding its terms. It is not intended to provide any other factual information about the Company, Northmark or any of their respective subsidiaries or affiliates. The representations and warranties of the Company contained in the Merger Agreement have been made solely for the benefit of Northmark. In addition, such representations and warranties (i) have been made only for purposes of the Merger Agreement, (ii) may be subject to limits or exceptions agreed upon by the contracting parties, (iii) are subject to materiality qualifications contained in the Merger Agreement which may differ from what may be viewed as material by investors, (iv) were made only as of the date of the Merger Agreement or other specific dates and (v) have been included in the Merger Agreement for the purpose of allocating risk between the contracting parties rather than establishing matters as facts. Investors should not rely on the representations, warranties and covenants or any descriptions thereof as characterizations of the actual state of facts or condition of the Company or Northmark or any of their respective subsidiaries or affiliates. Additionally, the representations, warranties, covenants, conditions and other terms of the Merger Agreement may be subject to subsequent waiver or modification. Moreover, information concerning the subject matter of the representations, warranties and covenants may change after the date of the Merger Agreement, which subsequent information may or may not be fully reflected in the Company’s public disclosures.
