STOCK PLEDGE AGREEMENT
THIS STOCK PLEDGE AGREEMENT ("Pledge Agreement") is entered into as
of July 24, 1996, by and between FIRST COASTAL CORPORATION, a Delaware
corporation (the "Pledgor"), and MACHIAS SAVINGS BANK for itself and as agent
(the "Agent") for the Lenders (hereinafter defined) who are parties to the
Loan Agreement described below.
BACKGROUND. The Pledgor, Androscoggin Savings Bank, Bangor Savings
Bank, Machias Savings Bank, and Norway Savings Bank (the "Lenders") have
executed and delivered a certain Loan Agreement dated this date (the "Loan
Agreement").
The Pledgor has executed and delivered the Notes (as hereinafter
defined) of even date herewith and in connection therewith is required to
execute and deliver this Pledge Agreement and to pledge hereunder the Pledged
Stock (as hereinafter defined) as security for the Notes.
It is a condition to the Lenders' obligation to purchase the
promissory notes issued by Pledgor as provided for in the Loan Agreement (the
"Notes"), that the Pledgor execute this Pledge Agreement and, pursuant
hereto, pledge the Pledged Stock, as defined in this Pledge Agreement, as
security for the prompt satisfaction of all obligations of the Pledgor
arising under the Loan Agreement and the Notes (the "Obligations").
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties hereto do hereby mutually agree, intending to be legally bound,
as follows:
1. The term "Pledged Stock" shall mean the 100,000 shares of
Coastal Savings Bank common stock, par value $1.00 per share, described in
Schedule I hereto, together with all proceeds thereof and all cash,
additional securities and other property at any time and from time to time
receivable or otherwise distributed in respect of or in exchange for any or
all of such Pledged Stock, but excluding any cash dividends which Pledgor is
authorized to receive and retain pursuant to Section 2(d) of this Pledge
Agreement.
2. (a) As security for the prompt satisfaction of the
Obligations, the Pledgor hereby pledges to the Agent the Pledged Stock and
grants the Agent a lien thereon and security interest therein. All
certificates and other instruments or documents evidencing rights or
ownership in the Pledged Stock are being delivered to the Agent at the time
of execution and delivery of this Pledge Agreement, accompanied by stock
powers executed in blank, and by such other documents or instruments as the
Agent may reasonably request, in accordance with Section 4.1(a)(ix) of the
Loan Agreement. The Agent shall take and maintain possession in its capacity
as Agent for itself as Lender and for the other Lenders.
(b) Until the termination of this Pledge Agreement, if the
Pledgor shall become entitled to receive or shall receive, in connection with
any of the Pledged Stock, any:
(i) Stock certificates, including, but without
limitation, any certificates representing a stock dividend or issued in
connection with any increase or reduction of capital, reclassification,
merger, consolidation, sale of assets, combination of shares, stock split,
spin-off, or split-off;
(ii) Options, warrants, or rights, whether as an
addition to, or in substitution or in exchange for, any of the Pledged Stock,
or otherwise;
(iii) Dividends or distributions payable in property,
including securities issued by other than the issuer on any of the Pledged
Stock; or
(iv) Dividends or distributions of any sort, other than
cash dividends which the Pledgor is entitled to receive and retain pursuant
to Section 2(d) of this Pledge Agreement;
then the Pledgor shall accept the same as the Agent's agent, in trust for the
Agent, and shall deliver them forthwith to the Agent in the exact form
received with, as applicable, the Pledgor's endorsement when necessary, or
appropriate stock powers duly executed in blank, to be held by the Agent,
subject to the terms hereof, as part of the Pledged Stock.
(c) If an Event of Default (as defined in the Loan Agreement)
shall have occurred and be continuing, the Agent, at its option, may have any
part or all of the Pledged Stock registered in its name or that of its
nominee, and the Pledgor hereby covenants that, upon the Agent's request, the
Pledgor will cause the issuer, transfer agent or registrar of the Pledged
Stock to effect such registration.
(d) For so long as no Event of Default exists under the Loan
Agreement, Pledgor shall have the right to receive cash dividends declared
and paid by Coastal Savings Bank with respect to the Pledged Stock. Any and
all stock or liquidating dividends, other distributions in property, returns
of capital or other distributions made on or in respect of the Pledged Stock,
whether resulting from a subdivision, combination or reclassification of the
outstanding capital stock of Coastal Savings Bank, received in exchange for
the Pledged
Stock or any part thereof or received as a result of any merger,
consolidation, acquisition or other exchange of assets to which Coastal
Savings Bank is a party or otherwise, shall be and become part of the Pledged
Stock pledged hereunder and, if received by Pledgor, shall forthwith be
delivered to the Agent, to be held subject to the terms of this Pledge
Agreement.
(e) For so long as no Event of Default exists under the Loan
Agreement, Pledgor shall have the right to exercise any and all voting and/or
consensual rights and powers relating or pertaining to the Pledged Stock or
any part thereof. Effective upon the occurrence of any Event of Default,
Pledgor hereby revokes any and all previous proxies relating to the Pledged
Stock and appoints the Agent or its nominee as its proxyholder to attend and
vote at any and all meetings of the stockholders of Coastal Savings Bank
(including any adjournments thereof) and to act on requests for written
consent of stockholders as if a duly appointed representative of Pledgor had
attended such meeting or otherwise voted on behalf of Pledgor or given
Pledgor's written consent. This appointment of the Agent as Pledgor's proxy
is coupled with an interest and shall be irrevocable until the payment in
full of the Obligations under this Pledge Agreement.
(f) The Agent shall execute and deliver (or cause to be
executed and delivered) to Pledgor all proxies, powers of attorney, dividend
orders and other instruments as Pledgor may request for the purpose of
enabling Pledgor to receive any cash dividends which Pledgor is authorized to
receive and retain pursuant to Section 2(d) hereof and to exercise the voting
and/or consensual rights and powers which Pledgor is entitled to exercise
pursuant to Section 2(e) hereof; and Pledgor shall execute and deliver to the
Agent such instruments as may be required or may be requested by the Agent to
enable the Agent to
receive and retain the distributions or other property it is authorized to
receive and retain on behalf of the Agent pursuant to Section 2(d) hereof.
Consistent with applicable law, Borrower shall bear all risks of diminution
or depreciation of the Pledged Stock, and the Agent shall have the right, in
its sole discretion, to refrain from selling or otherwise disposing of the
Pledged Stock.
(g) Upon the occurrence and during the continuance of an
Event of Default, the Agent may, without demand of performance or other
demand, advertisement, or notice of any kind (except the notice specified
below of the time and place of public or private sale) to or upon the Pledgor
or any other person (all of which are, to the extent permitted by law, hereby
expressly waived), forthwith realize upon the Pledged Stock or any part
thereof, and may forthwith sell or otherwise dispose of and deliver the
Pledged Stock or any part thereof or interest therein, or agree to do so, in
one or more units at public or private sale or sales, at any stock exchange,
broker's board or at any of the Agent's offices or elsewhere, at such prices
and on such terms (including, but without limitation, a requirement that any
purchaser of all or any part of the Pledged Stock purchase the shares
constituting the Pledged Stock for investment and without any intention to
make distribution thereof) as the Agent may deem commercially reasonable, for
cash or on credit, or for future delivery without assumption of any credit
risk, with the right to the Agent or any purchaser to purchase upon any such
sale the whole or any part of the Pledged Stock free of any right or equity
of redemption in the Pledgor, which right or equity is hereby expressly
waived and released.
(h) The proceeds of any such disposition or other action by
the Agent shall be applied as follows:
(i) First, to the costs and expenses incurred in
connection therewith or incidental thereto or to the care or safekeeping of
any of the Pledged Stock or in any way relating to the rights of the Agent
hereunder, including reasonable attorneys' fees and legal expenses;
(ii) Second, to the satisfaction of the Obligations;
(iii) Third, to the payment of any other amounts
required by applicable law (including, without limitation, Section
9-504(1)(c) of the Uniform Commercial Code); and
(iv) Fourth, to the Pledgor to the extent of any
surplus proceeds. Provided that if the proceeds are insufficient to pay all
such expenses, Obligations and other amounts, the Pledgor shall remain liable
for any deficiency.
(i) Except as may otherwise be expressly required by
applicable law, the Agent need not give more than seven (7) days' notice of
the time and place of any public sale or of the time after which a private
sale may take place, which notice the Pledgor hereby deems reasonable.
3. The Pledgor represents and warrants that:
(a) It has all requisite corporate power and corporate
authority to enter into this Pledge Agreement, to pledge the Pledged Stock
for the purposes described in Section 2(a), and to carry out the transactions
contemplated by this Pledge Agreement;
(b) It is the legal and beneficial owner of all of the
Pledged Stock;
(c) The shares of the Pledged Stock constitute all of the
issued and outstanding shares of capital stock of the issuer thereof;
(d) All of the shares of the Pledged Stock have been duly and
validly issued, are fully paid and nonassessable, subject to the provisions
of 9-B, Maine Revised Statutes Section 315, as amended, and are owned by the
Pledgor free of any pledge, mortgage, hypothecation, lien, charge,
encumbrance, or security interest in such shares or the proceeds thereof
except such as are granted hereunder.
(e) The execution, delivery and performance of this Pledge
Agreement will not result in any violation of any provision of the Pledgor's
charter or by-laws, or violate or constitute a default under the terms of any
agreement, indenture or other instrument, license, judgment, decree, order,
law, statute, ordinance, or other governmental rule or regulation applicable
to the Pledgor or any of its property; and
(f) Upon delivery of all stock certificates representing the
Pledged Stock to the Agent or its agent, duly endorsed in blank or
accompanied by one or more stock powers duly endorsed in blank, such delivery
and this Pledge Agreement shall create a valid first lien upon, and perfected
security interest in, the Pledged Stock, subject to no prior security
interest, lien, charge, encumbrance, or agreement purporting to grant to any
third party a security interest in the Pledged Stock.
4. (a) The Pledgor hereby covenants that, until all of the
Obligations have been satisfied in full, it will not:
(i) Sell, convey, or otherwise dispose of any of the
Pledged Stock or any interest therein or create, incur, or permit to exist
any pledge, mortgage, lien, charge, encumbrance, or any security interest
whatsoever in, or with respect to, any of the Pledged Stock, other than that
created hereby; or
(ii) Consent to, or approve of, the issuance of any
additional shares of any class of capital stock by the issuer of the Pledged
Stock, or any securities convertible voluntarily by the holder thereof or
automatically upon the occurrence or nonoccurrence of any event or condition
into, or exchangeable for, any such shares, or any warrants, options, rights,
or other commitments entitling any person to purchase or otherwise acquire
any such shares.
(b) The Pledgor warrants and will, at its own expense, defend
the Agent's security interest in and to the Pledged Stock against the claims
of any person, firm, corporation, or other entity, other than those arising
by, through or under Agent or any other Lender.
5. (a) If the Agent shall elect to exercise its right to sell or
otherwise dispose of all or any part of the Pledged Stock, and if, in the
opinion of counsel for the Agent, it is necessary to have the Pledged Stock
or that portion thereof to be sold registered under the provisions of the
Securities Act of 1933, as amended (the "Securities Act"), the Pledgor will
use its best efforts to cause
(i) the issuer of the Pledged Stock, its directors,
and officers, to take all action necessary to register
the Pledged Stock or that portion thereof to be disposed
of under the provisions of the Securities Act, at the
Pledgor's expense; PROVIDED THAT only one registration
per any six month period shall be required;
(ii) the registration statement relating thereto to
become effective and to remain so for not less than one
year from the date of the first public
offering of the Pledged Stock or that portion thereof so
to be disposed of, and to make all amendments thereto and
to the related prospectus which, in the opinion of the
Agent or its counsel, are necessary or advisable, all in
conformity with the requirements of the Securities Act
and the rules and Regulations of the Securities and
Exchange Commission applicable thereto;
(iii) the issuer of the Pledged Stock to comply with the
provisions of the "Blue Sky" laws of any jurisdiction
which the Agent shall reasonably designate; and
(iv) the issuer of the Pledged Stock to make available
to its security holders, as soon as practicable ( but in
no event later than sixteen (16) months after the
effective date of such registration statement), an
earnings statement (which need not be audited) covering a
period of at least twelve (12) months beginning with the
first month after the effective date of any such
registration statement, which earnings statement will
satisfy the provisions of Section 11(a) of the Securities
Act.
(v) if registration under the Securities Act is not
required, but, in the opinion of counsel to the Agent,
information substantially similar to that which would be
provided in connection with a registration under the
Securities Act is appropriate or required in connection
with a sale or disposition of the Collateral, the Pledgor
shall provide such information
and shall cooperate with the Secured parties in providing
such information as requested by Agent, at the expense of
the Pledgor, and shall otherwise comply with the
provisions of this Section 5(a) as if registration under
the Securities Act was required.
(b) The Pledgor acknowledges that a breach of any of the
covenants contained in paragraph 5(a) above may cause irreparable injury to
the Agent; that the Agent will have no adequate remedy at law with respect to
such breach; and, as a consequence, that the Pledgor's covenants in paragraph
5(a) shall be specifically enforceable against the Pledgor; and the Pledgor
hereby waives, to the extent such waiver is enforceable under law, and shall
not assert any defenses against an action for specific performance of such
covenants except for a defense that no Event of Default has occurred.
(c) Notwithstanding the foregoing, the Pledgor recognizes
that the Agent may be unable to effect a public sale of all or a part of the
Pledged Stock and may be compelled or deem it best to resort to one or more
private sales to a restricted group of purchasers who will be obligated to
agree, among other things, to acquire the Pledged Stock for their own
account, for investment and not with a view to the distribution or resale
thereof. The Pledgor acknowledges that any such private sales may be at
prices and on terms less favorable to the Agent than those of public sales,
and agrees that such private sales shall, not by reason thereof, be deemed to
have been made in a commercially reasonable manner, and that the Agent has no
obligation to delay sale of any Pledged Stock to permit the issuer thereof to
register it for public sale under the Securities Act.
(d) Pledgor shall use its best efforts to cause any issuer,
transfer agent, or registrar of the Pledged Stock to take all such actions
and execute all such documents as may be necessary or appropriate, upon the
request of Agent, to (i) remove any restrictive legends placed on the Pledged
Stock that are not legally required for such Pledged Stock held by Agent;
(ii) after an Event of Default, effect any sale or sales of Pledged Stock in
accordance with Rule 144 under the Securities Act, if applicable; and (iii)
after an Event of Default, effect any sale or other disposition of the
Pledged Stock in any lawful public or private sale or other disposition.
6. The Pledgor will promptly deliver to the Agent all written
notices and will promptly give the Agent written notice of any other notices
received by it with respect to Pledged Stock, and the Agent will promptly
give like notice to the Pledgor of any such notices received by it or its
nominee.
7. The Pledgor shall at any time, and from time to time, upon the
written request of the Agent and at the expense of the Pledgor, execute and
deliver such further documents and do such further acts and things as the
Agent may reasonably request to effect the purposes of this Pledge Agreement,
including, without limitation, delivering to the Agent upon the occurrence of
an Event of Default irrevocable proxies with respect to the Pledged Stock in
form satisfactory to the Agent.
8. Upon the satisfaction in full of all Obligations and the
satisfaction of all additional costs and expenses of the Agent as provided
herein, this Pledge Agreement shall terminate, and the Agent shall deliver to
the Pledgor without recourse or representation, at the
Pledgor's expense, such of the Pledged Stock as shall not have been sold or
otherwise disposed of pursuant to this Pledge Agreement.
9. (a) Beyond the exercise of reasonable care to assure the safe
custody of the Pledged Stock while held hereunder (which duty shall not
include any steps to preserve rights against prior parties or to send
notices, perform services, or take any action in connection with the
management of the Pledged Stock), the Agent shall have no duty or liability
to preserve rights pertaining thereto and shall be relieved of all
responsibility for the Pledged Stock upon surrendering it or tendering
surrender of it to the Pledgor.
(b) No course of dealing between the Pledgor and the Agent,
nor any failure to exercise, nor any delay in exercising, any right, power or
privilege of the Agent hereunder or under the Pledge Agreement shall operate
as a waiver thereof; nor shall any single or partial exercise of any right,
power or privilege hereunder or thereunder preclude any other or further
exercise thereof or the exercise of any other right, power or privilege.
(c) The rights and remedies provided herein and in the Loan
Agreement and in all other agreements, instruments, and documents delivered
pursuant to or in connection with the Loan Agreement are cumulative and are
in addition to, and not exclusive of, any rights or remedies provided by law,
including, but without limitation, the rights and remedies of a secured party
under the Uniform Commercial Code.
(d) The provisions of this Pledge Agreement are severable,
and if any clause or provision shall be held invalid or unenforceable in
whole or in part in any jurisdiction, then such invalidity or
unenforceability shall affect only such clause or provision or part thereof
in such jurisdiction and shall not in any manner affect such clause or
provision
in any other jurisdiction or any other clause or provision in this Pledge
Agreement in any jurisdiction.
10. Any notice required or permitted by this Pledge Agreement
shall be effective if given in accordance with the provisions of the Loan
Agreement.
11. This Pledge Agreement shall inure to the benefit of, and shall
be binding upon, the successors and assigns of the parties hereto.
12. Section headings used herein are for convenience only and
shall not affect the construction or interpretation of this Pledge Agreement.
Use of the singular shall include the plural, and vice versa, where
necessary in the construction or interpretation of this Pledge Agreement.
Specification of any section or subsection herein shall be deemed to include
specification of any schedule referred to therein.
13. This Pledge Agreement may be executed by the parties hereto
individually or in any combination of the parties hereto in several separate
counterparts, each of which shall be an original and all of which taken
together shall constitute one and the same Pledge Agreement.
14. This Pledge Agreement shall bind and inure to the benefit of
the parties, their legal representatives, successors and assigns, provided,
however, that the Agent may not transfer or assign any interest herein (other
than in connection with a successor Agent) without the prior written consent
of the Pledgor.
15. This Pledge Agreement shall be construed in accordance with
the substantive laws of the State of Maine, without regard to principles of
conflicts of law.
16. No amendment or waiver of any provision of this Stock Pledge
Agreement nor consent to any departure by Pledgor therefrom shall in any
event be effective unless the same shall be in writing and signed by the
Agent, and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Pledge Agreement to be executed on its behalf as of the date and year first
above written.
Attest: [CORPORATE SEAL] FIRST COASTAL CORPORATION
By: /s/ Patricia J. Briand By: /s/ Gregory T. Caswell
------------------------------ ------------------------------
Secretary President
Attest: [CORPORATE SEAL] MACHIAS SAVINGS BANK,
as Agent
By: /s/ Bonnie L. LaBelle By: /s/ Edward L. Hennessey Jr.
------------------------------ ------------------------------
Secretary President
SCHEDULE I
SCHEDULE 1 TO
STOCK PLEDGE AGREEMENT
BETWEEN
FIRST COASTAL CORPORATION, AS PLEDGOR,
AND
MACHIAS SAVINGS BANK, AS AGENT
PLEDGED STOCK
Number of Shares Certificate Number
- ---------------- ------------------
100,000 shares of Common Stock R-2
par value $1.00 per share, of
Coastal Savings Bank