Exhibit 99.2
AGREEMENT AND PLAN OF REORGANIZATION
BY AND BETWEEN
PROVIDENT BANCORP, MHC,
PROVIDENT BANCORP, INC. (A FEDERAL CORPORATION),
PROVIDENT BANCORP, INC. (A DELAWARE CORPORATION),
PROVIDENT BANK
AND
E.N.B. HOLDING COMPANY, INC. AND
ELLENVILLE NATIONAL BANK
JULY 1, 2003
TABLE OF CONTENTS
ARTICLE I CERTAIN DEFINITIONS ............................................................... 1
1.1. Certain Definitions ....................................................... 1
ARTICLE II THE MERGER ....................................................................... 8
2.1. Merger .................................................................... 8
2.2. Effective Time ............................................................ 9
2.3. Certificate of Incorporation and Bylaws ................................... 9
2.4. Directors and Officers of Surviving Corporation ........................... 9
2.5. Additional Director of New Provident Bancorp and Provident Bank ........... 9
2.6. Effects of the Merger ..................................................... 10
2.7. Tax Consequences .......................................................... 10
2.8. Possible Alternative Structures ........................................... 10
2.9. The Conversion ............................................................ 10
ARTICLE III CONVERSION OF SHARES ............................................................ 11
3.1. Conversion of ENBHC Common Stock; Merger Consideration .................... 11
3.2. Election Procedures ....................................................... 13
3.3. Procedures for Exchange of ENBHC Common Stock ............................. 16
3.4. Reservation of Shares ..................................................... 18
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF ENBHC .......................................... 18
4.1. Organization .............................................................. 19
4.2. Capitalization ............................................................ 19
4.3. Authority; No Violation ................................................... 20
4.4. Consents .................................................................. 21
4.5. Financial Statements ...................................................... 21
4.6. Taxes ..................................................................... 22
4.7. No Material Adverse Effect ................................................ 22
4.8. Material Contracts; Leases; Defaults ...................................... 22
4.9. Ownership of Property; Insurance Coverage ................................. 24
4.10. Legal Proceedings ......................................................... 25
4.11. Compliance With Applicable Law ............................................ 25
4.12. Employee Benefit Plans .................................................... 26
4.13. Brokers, Finders and Financial Advisors ................................... 29
4.14. Environmental Matters ..................................................... 29
4.15. Loan Portfolio ............................................................ 30
4.16. Related Party Transactions ................................................ 32
4.17. Schedule of Termination Benefits .......................................... 32
4.18. Deposits .................................................................. 32
4.19. Antitakeover Provisions Inapplicable ...................................... 32
4.20. Registration Obligations .................................................. 33
4.21. Risk Management Instruments ............................................... 33
4.22. Fairness Opinion .......................................................... 33
4.23. Trust Accounts ............................................................ 33
ARTICLE V REPRESENTATIONS AND WARRANTIES OF PROVIDENT BANCORP GROUP ......................... 33
5.1. Organization .............................................................. 34
5.2. Capitalization ............................................................ 34
(i)
5.3. Authority; No Violation ................................................... 35
5.4. Consents .................................................................. 36
5.5. Financial Statements ...................................................... 36
5.6. Taxes ..................................................................... 37
5.7. No Material Adverse Effect ................................................ 38
5.8. Ownership of Property; Insurance Coverage ................................. 38
5.9. Legal Proceedings ......................................................... 38
5.10. Compliance With Applicable Law ............................................ 38
5.11. Employee Benefit Plans .................................................... 39
5.12. Environmental Matters ..................................................... 41
5.13. Loan Portfolio ............................................................ 42
5.14. Securities Documents ...................................................... 43
5.15. Deposits .................................................................. 43
5.16. Antitakeover Provisions Inapplicable ...................................... 43
5.17. Risk Management Instruments ............................................... 43
5.18. Brokers, Finders and Financial Advisors ................................... 44
ARTICLE VI COVENANTS OF ENBHC ............................................................... 44
6.1. Conduct of Business ....................................................... 44
6.2. Current Information ....................................................... 48
6.3. Access to Properties and Records .......................................... 49
6.4. Financial and Other Statements ............................................ 49
6.5. Maintenance of Insurance .................................................. 50
6.6. Disclosure Supplements .................................................... 50
6.7. Consents and Approvals of Third Parties ................................... 50
6.8. All Reasonable Efforts .................................................... 50
6.9. Failure to Fulfill Conditions ............................................. 51
6.10. No Solicitation ........................................................... 51
6.11. Reserves and Merger-Related Costs ......................................... 52
6.12. Board of Directors and Committee Meetings ................................. 52
ARTICLE VII COVENANTS OF PROVIDENT BANCORP .................................................. 53
7.1. Conduct of Business ....................................................... 53
7.2. Current Information ....................................................... 53
7.3. Financial and Other Statements ............................................ 53
7.4. Disclosure Supplements .................................................... 53
7.5. Consents and Approvals of Third Parties ................................... 54
7.6. All Reasonable Efforts .................................................... 54
7.7. Failure to Fulfill Conditions ............................................. 54
7.8. Employee Benefits ......................................................... 54
7.9. Directors and Officers Indemnification and Insurance ...................... 56
7.10. Stock Listing ............................................................. 57
ARTICLE VIII REGULATORY AND OTHER MATTERS ................................................... 58
8.1. ENBHC and Provident Bancorp Shareholder Meetings .......................... 58
8.2. Proxy Statement-Prospectus ................................................ 58
8.3. The Mutual Company Conversion from Mutual to Stock Form ................... 60
8.4. Regulatory Approvals ...................................................... 62
8.5. Affiliates ................................................................ 62
(ii)
ARTICLE IX CLOSING CONDITIONS ............................................................... 62
9.1. Conditions to Each Party's Obligations under this Agreement ............... 62
9.2. Conditions to the Obligations of Provident Bancorp under this Agreement ... 64
9.3. Conditions to the Obligations of ENBHC under this Agreement ............... 65
ARTICLE X THE CLOSING ....................................................................... 66
10.1. Time and Place ............................................................ 66
10.2. Deliveries at the Pre-Closing and the Closing ............................. 67
ARTICLE XI TERMINATION, AMENDMENT AND WAIVER ................................................ 67
11.1. Termination ............................................................... 67
11.2. Effect of Termination ..................................................... 69
11.3. Amendment, Extension and Waiver ........................................... 70
ARTICLE XII MISCELLANEOUS ................................................................... 70
12.1. Confidentiality ........................................................... 70
12.2. Public Announcements ...................................................... 71
12.3. Survival .................................................................. 71
12.4. Notices ................................................................... 71
12.5. Parties in Interest ....................................................... 72
12.6. Complete Agreement ........................................................ 72
12.7. Counterparts .............................................................. 73
12.8. Severability .............................................................. 73
12.9. Governing Law ............................................................. 73
12.10. Interpretation ............................................................ 73
12.11. Specific Performance ...................................................... 73
Exhibit A Form of Voting Agreement
Exhibit B Affiliates Agreement
Exhibit C Matters to be Covered in Opinion of Counsel to be Delivered to New
Provident Bancorp
Exhibit D Matters to be Covered in Opinion of Counsel to be Delivered to ENBHC
(iii)
AGREEMENT AND PLAN OF REORGANIZATION
This AGREEMENT AND PLAN OF REORGANIZATION (this "Agreement"), is dated as
of July 1, 2003, by and between PROVIDENT BANCORP, MHC, a mutual holding company
(the "Mutual Company"), its majority-owned subsidiary, PROVIDENT BANCORP, INC.,
a federal corporation ("Provident Bancorp"), PROVIDENT BANK, a stock savings
association ("Provident Bank"), PROVIDENT BANCORP, INC., a Delaware corporation
("New Provident Bancorp"), E.N.B. HOLDING COMPANY, INC., a New York corporation
("ENBHC"), and its wholly-owned subsidiary, ELLENVILLE NATIONAL BANK, a national
bank ("ENB").
WHEREAS, the Board of Directors of each of the parties (i) has determined
that this Agreement and the business combination and related transactions
contemplated hereby are in the best interests of the respective parties and (ii)
has determined that this Agreement and the transactions contemplated hereby are
consistent with and in furtherance of their respective business strategies, and
(iii) has approved this Agreement at meetings of each of such Board of
Directors;
WHEREAS, in connection with the transactions described in this Agreement,
it is intended that the Mutual Company will convert from the mutual form of
organization to the capital stock form of organization, and that in connection
with such Conversion New Provident Bancorp will conduct a subscription offering
of its common stock, and if necessary a community and/or syndicated community
offering, and an exchange offering to the existing public shareholders of
Provident Bancorp; and
WHEREAS, the parties desire to make certain representations, warranties
and agreements in connection with the business 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 of other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
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).
"Affiliate" means, with respect to any Person, any Person who directly, or
indirectly, through one or more intermediaries, controls, or is controlled by,
or is under common control with, such Person and, without limiting the
generality of the foregoing, includes any executive officer or director of such
Person and any Affiliate of such executive officer or director.
"Agreement" means this agreement, and any amendment or supplement hereto.
"Applications" means the applications for regulatory approval that are
required by the transactions contemplated hereby.
"BHCA" shall mean the Bank Holding Company Act of 1956, as amended.
"Bank Merger" shall mean the merger of ENB with and into Provident Bank,
with Provident Bank as the surviving institution, which merger shall occur
following the Merger.
"Bank Regulator" shall mean any Federal or state banking regulator,
including but not limited to the FDIC, the OTS, the OCC, and the FRB, which
regulates Provident Bank or ENB, or any of their respective holding companies or
subsidiaries, as the case may be.
"BIF" shall mean the Bank Insurance Fund as administered by the FDIC.
"Certificate" shall mean certificates evidencing shares of ENBHC Common
Stock.
"COBRA" shall mean the Consolidated Omnibus Budget Reconciliation Act of
1985, as amended.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Compensation and Benefit Plans" shall have the meaning set forth in
Section 4.12.1.
"Confidentiality Agreements" shall mean the confidentiality agreements
referred to in Section 12.1 of this Agreement.
"Conversion" shall mean the conversion from mutual to stock form of the
Mutual Company, pursuant to the Plan of Conversion adopted by the Mutual
Company.
"Conversion Offering" shall mean the offering, in connection with the
Conversion, of shares of New Provident Bancorp Common Stock in a subscription
offering and, if necessary, a community offering and/or a syndicated community
offering.
"Conversion Price Per Share" shall have the meaning set forth in Section
2.9.
"Conversion Prospectus" shall mean a prospectus issued by New Provident
Bancorp in connection with the Offering, that meets all of the requirements of
the Securities Act, applicable state securities laws and banking laws and
regulations. The Conversion Prospectus may be combined with (i) the Proxy
Statement-Prospectus delivered to shareholders of ENBHC in connection with the
solicitation of their approval of this Agreement and the transactions
contemplated hereby and the offering of the New Provident Bancorp Common Stock
to them as Merger Consideration, and (ii) the proxy statement delivered to
Provident Bancorp shareholders in connection with the solicitation of their
approval of the Conversion and the Plan of Conversion.
"Conversion Registration Statement" shall mean the registration statement,
together with all amendments, filed with the SEC under the Securities Act for
the purpose of registering shares of New Provident Bancorp Common Stock to be
offered and issued in connection with the
2
Offering. The Merger Registration Statement and the Conversion Registration
Statement may be separate registration statements or may be combined in one
registration statement that shall register shares of New Provident Bancorp
Common Stock to be offered and issued in connection with the Offering and to be
offered to holders of ENBHC Common Stock in connection with the Merger.
"DGCL" shall mean the Delaware General Corporation Law.
"Depositors" shall mean former or current depositors of Provident Bank
that under the Plan of Conversion are given, as indicated by the context, the
opportunity to purchase New Provident Bancorp Common Stock in the Conversion or
the opportunity to vote on the Plan of Conversion.
"Dissenting Shares" shall have the meaning set forth in Section 3.1.4.
"Dissenting Shareholder" shall have the meaning set forth in Section
3.1.4.
"Effective Time" shall mean the date and time specified pursuant to
Section 2.2 hereof as the effective time of the Merger.
"ENB" shall mean Ellenville National Bank, a national bank, with its
principal offices located at 70 Canal Street, P.O. Box 669, Ellenville, New
York, 12428, which is a wholly-owned subsidiary of ENBHC.
"ENBHC" shall mean E.N.B. Holding Company, Inc., a New York corporation,
with its principal offices located at 70 Canal Street, P.O. Box 699, Ellenville,
New York 12428.
"ENBHC Common Stock" shall mean the common stock, par value $20.00 per
share, of ENBHC.
"ENBHC DISCLOSURE SCHEDULE" shall mean a written disclosure schedule
delivered by ENBHC to Provident Bancorp specifically referring to the
appropriate section of this Agreement and describing in reasonable detail the
matters described therein.
"ENBHC 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, 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 ENBHC or any ENBHC Subsidiary, whether written or oral.
"ENBHC Financial Statements" shall mean (i) the audited consolidated
statements of financial condition (including related notes and schedules, if
any) of ENBHC as of December 31, 2002 and 2001 and the consolidated statements
of income, changes in stockholders' equity and cash flows (including related
notes and schedules, if any) of ENBHC for each of the three years ended December
31, 2002, 2001 and 2000, and (ii) the unaudited interim consolidated financial
statements of ENBHC as of the end of each calendar quarter following December
31, 2002 and for the periods then ended.
3
"ENBHC Regulatory Reports" means the Call Reports of ENB and accompanying
schedules, as filed with the OCC, for each calendar quarter beginning with the
quarter ended March 31, 2001, through the Closing Date, and all Reports filed
with the FRB by ENBHC from December 31, 2001 through the Closing Date.
"ENBHC Shareholders Meeting" means the meeting of shareholders of ENBHC to
be held for the purpose of considering and approving this Agreement and the
Merger.
"ENBHC Subsidiary" means any corporation, 50% or more of the capital stock
of which is owned, either directly or indirectly, by ENBHC or ENB, except any
corporation the stock of which is held in the ordinary course of the lending
activities of ENB.
"Environmental Laws" means any Federal, state or local law, statute,
ordinance, rule, regulation, code, license, permit, authorization, approval,
consent, order, 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.
ss.9601, et seq; the Resource Conservation and Recovery Act, as amended, 42
U.S.C. ss.6901, et seq; the Clean Air Act, as amended, 42 U.S.C. ss.7401, et
seq; the Federal Water Pollution Control Act, as amended, 33 U.S.C. ss.1251, et
seq; the Toxic Substances Control Act, as amended, 15 U.S.C. ss.9601, et seq;
the Emergency Planning and Community Right to Know Act, 42 U.S.C. ss.1101, et
seq; the Safe Drinking Water Act, 42 U.S.C. ss.300f, et seq; and all 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.
"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 a bank or trust company or other agent
designated by Provident Bancorp, and reasonably acceptable to ENBHC, which shall
act as agent for New Provident Bancorp in connection with the exchange
procedures for converting Certificates into the Merger Consideration.
"Exchange Fund" shall have the meaning set forth in Section 3.3.1.
"Exchange Offering" shall mean the offer and issuance of New Provident
Bancorp Common Stock, in connection with the Conversion, to the existing public
shareholders of Provident Bancorp.
"FDIA" shall mean the Federal Deposit Insurance Act, as amended.
4
"FDIC" shall mean the Federal Deposit Insurance Corporation or any
successor thereto.
"FHLB" shall mean the Federal Home Loan Bank of New York.
"FRB" shall mean the Board of Governors of the Federal Reserve System or
any successor thereto.
"GAAP" shall mean Generally Accepted Accounting Principles, consistently
applied and as in effect from time to time 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.
"HOLA" shall mean the Home Owners' Loan Act, as amended.
"Independent Valuation" shall mean the appraised pro forma market value of
the New Provident Bancorp Common Stock issued in the Conversion, and any
updates, as determined by an independent valuation.
"IRS" shall mean the United States Internal Revenue Service.
"Knowledge" as used with respect to a Person (including references to such
Person being aware of a particular matter) means those facts that are known, or
should have been known, by the executive officers and directors of such Person,
and includes any facts, matters or circumstances set forth in any written notice
from any Bank Regulator or any other material written notice received by that
Person.
"Material Adverse Effect" shall mean, with respect to Provident Bancorp or
ENBHC, respectively, any effect that (i) is material and adverse to the
financial condition, results of operations or business of Provident Bancorp and
its Subsidiaries taken as a whole, or ENBHC and its Subsidiaries taken as a
whole, respectively, or (ii) would materially impair the ability of either
ENBHC, on the one hand, or Provident Bancorp, on the other hand, to perform its
obligations under this Agreement or otherwise materially threaten or materially
impede the consummation of 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 or thrift
institutions generally, (b) changes in GAAP or regulatory accounting principles
generally applicable to financial institutions and their holding companies, (c)
actions and omissions of a party hereto (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 the expenses incurred by the parties hereto in consummating the
transactions contemplated by this Agreement and (e) any change in the value of
the securities portfolio of Provident Bancorp or ENBHC, whether held as
available for sale or held to maturity, resulting from a change in interest
rates generally.
"Materials of Environmental Concern" means pollutants, contaminants,
wastes, toxic substances, petroleum and petroleum products, and any other
materials regulated under Environmental Laws.
5
"Merger" shall mean the merger of ENBHC with and into New Provident
Bancorp (or a subsidiary thereof) pursuant to the terms hereof.
"Merger Consideration" shall mean the cash or New Provident Bancorp Common
Stock, or combination thereof, in an aggregate per share amount to be paid by
New Provident Bancorp for each share of ENBHC Common Stock equal to $4,830.00,
as set forth in Section 3.1.
"Merger Registration Statement" shall mean the registration statement,
together with all amendments, filed with the SEC under the Securities Act for
the purpose of registering shares of New Provident Bancorp Common Stock to be
offered to holders of ENBHC Common Stock in connection with the Merger. The
Merger Registration Statement and the Conversion Registration Statement may be
separate registration statements or may be combined in one registration
statement that shall register shares of New Provident Bancorp Common Stock to be
offered and sold in connection with the Offering and to be offered to holders of
ENBHC Common Stock in connection with the Merger.
"Mutual Company" shall mean Provident Bancorp, MHC, a federally chartered
mutual holding company that owns a majority of the Provident Bancorp Common
Stock.
"NASD" shall mean the National Association of Securities Dealers, Inc.
"New Provident Bancorp" shall mean Provident Bancorp, Inc., a Delaware
corporation with its principal executive offices located at 400 Rella Boulevard,
P.O. Box 600, Montebello, New York 10901, which was organized in connection with
the Conversion and which will be the successor to Provident Bancorp.
"New Provident Bancorp Common Stock" shall mean the common stock, par
value $.01 per share, of New Provident Bancorp that will be issued and sold in
the Offering and the Merger.
"NYBCL" means the New York Business Corporation Law.
"OCC" means the Office of Comptroller of the Currency or any successor
thereto.
"Offering" shall mean the Conversion Offering and the Exchange Offering.
"OTS" shall mean the Office of Thrift Supervision or any successor
thereto.
"PBGC" shall mean the Pension Benefit Guaranty Corporation, or any
successor thereto.
"Pension Plan" shall have the meaning set forth in Section 4.12.2.
"Person" shall mean any individual, corporation, partnership, joint
venture, association, trust or "group" (as that term is defined under the
Exchange Act).
"Plan of Conversion" shall mean the Plan of Conversion and Reorganization
pursuant to which the Mutual Company will convert from the mutual form of
organization to the capital stock form of organization.
6
"Pre-Closing" shall have the meaning set forth in Section 10.1 hereof.
"Pre-Closing Date" shall be the date on which the Pre-Closing occurs.
"Provident Bank" shall mean Provident Bank, a Federally chartered stock
savings association, with its principal offices located at 400 Rella Boulevard,
P.O. Box 600, Montebello, New York, which is a wholly owned subsidiary of
Provident Bancorp.
"Provident Bancorp" shall mean Provident Bancorp, Inc., a federal
corporation prior to consummation of the Conversion, with its principal
executive offices located at 400 Rella Boulevard, P.O. Box 600, Montebello, New
York.
"Provident Bancorp Common Stock" shall mean the common stock, par value
$.10 per share, of Provident Bancorp.
"PROVIDENT BANCORP DISCLOSURE SCHEDULE" shall mean a written disclosure
schedule delivered by Provident Bancorp to ENBHC specifically referring to the
appropriate section of this Agreement and describing in reasonable detail the
matters contained therein.
"Provident Bancorp Option Plans" shall mean the Provident Bancorp, Inc.
2000 Stock Option Plan and the Provident Bancorp, Inc. 2000 Recognition and
Retention Plan.
"Provident Bancorp Statements" shall mean the (i) unaudited balance sheet
of the Mutual Company as of September 30, 2002 and the unaudited income
statement of the Mutual Company for the year ended September 30, 2002, and (ii)
the audited consolidated statements of financial condition (including related
notes and schedules) of Provident Bancorp as of September 30, 2002 and 2001 and
the consolidated statements of income, changes in stockholders' equity and cash
flows (including related notes and schedules, if any) of Provident Bancorp for
each of the three years ended September 30, 2002, 2001 and 2000, as set forth in
Provident Bancorp's annual report for the year ended September 30, 2002, and the
unaudited interim consolidated financial statements of Provident Bancorp as of
the end of each quarter following September 30, 2002, and for the periods then
ended, as filed by Provident Bancorp in its Securities Documents.
"Provident Bancorp Subsidiary" means any corporation, 50% or more of the
capital stock of which is owned, either directly or indirectly, by Provident
Bancorp, Provident Bank or any Bank Affiliate, except any corporation the stock
of which is held in the ordinary course of the lending activities of Provident
Bank.
"Proxy Statement-Prospectus" shall mean the proxy statement/prospectus, as
amended or supplemented, to be delivered to shareholders of ENBHC in connection
with the solicitation of their approval of this Agreement and the transactions
contemplated hereby and the offering of the New Provident Bancorp Common Stock
to them as Merger Consideration. The Proxy Statement-Prospectus may be combined
with (i) the Conversion Prospectus delivered to offerees in the Conversion
Offering and Exchange Offering, and (ii) the proxy statement delivered to
Provident Bancorp shareholders in connection with the solicitation of their
approval of the Conversion and the Plan of Conversion.
7
"Regulatory Agreement" shall have the meaning set forth in Section 4.11.3.
"Rights" shall mean warrants, options, rights, convertible securities,
stock appreciation rights and other arrangements or commitments which obligate
an entity to issue or dispose of any of its capital stock or other ownership
interests or which provide for compensation based on the equity appreciation of
its capital stock.
"SAIF" shall mean the Savings Association Insurance Fund administered by
the FDIC.
"SEC" shall mean the Securities and Exchange Commission or any successor
thereto.
"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.
"Securities Laws" shall mean the Securities Act; the Exchange Act; the
Investment Company Act of 1940, as amended; the Investment Advisers Act of 1940,
as amended; the Trust Indenture Act of 1939, as amended, and the rules and
regulations of the SEC promulgated thereunder.
"Stock Exchange" shall mean the Nasdaq National Market.
"Subsidiary" shall have the meanings set forth in Rule 1-02 of Regulation
S-X of the SEC.
"Surviving Corporation" shall have the meaning set forth in Section 2.1
hereof.
"Termination Date" shall mean July 31, 2004.
Other terms used herein are defined in the preamble and elsewhere in this
Agreement.
ARTICLE II
THE MERGER
2.1. 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: (a) ENBHC shall
merge with and into New Provident Bancorp, or a to-be-formed subsidiary of New
Provident Bancorp, with New Provident Bancorp (or the subsidiary) as the
resulting or surviving corporation (the "Surviving Corporation"); and (b) the
separate existence of ENBHC shall cease and all of the rights, privileges,
powers, franchises, properties, assets, liabilities and obligations of ENBHC
shall be vested in and assumed by New Provident Bancorp. As part of the Merger,
each share of ENBHC Common
8
Stock will be converted into the right to receive the Merger Consideration
pursuant to the terms of Article III hereof. Immediately after the Merger, ENB
shall merge with and into Provident Bank, with Provident Bank as the resulting
institution.
2.2. Effective Time.
The Merger shall be effected by the filing of a certificate of merger with
the Delaware Office of the Secretary of State, in accordance with the DGCL, and
with the New York Department of State, in accordance with the NYBCL, on the day
of the closing ("Closing Date") provided for in Article X hereof (the
"Closing"). The "Effective Time" means the date and time upon which the
certificate of merger is filed with the Delaware Office of the Secretary of
State, and with the New York Department of State, or as otherwise stated in the
certificates of merger. The Closing of the Merger shall immediately follow the
closing of the Offering.
2.3. Certificate of Incorporation and Bylaws.
The Certificate of Incorporation and Bylaws of New Provident Bancorp shall
be the Certificate of Incorporation and Bylaws of the Surviving Corporation as
in effect immediately prior to the Effective Time, until thereafter amended as
provided therein and by applicable law.
2.4. Directors and Officers of Surviving Corporation.
Except as provided in Section 2.5, the directors of New Provident Bancorp
immediately prior to the Effective Time shall be the initial directors of the
Surviving Corporation, each to hold office in accordance with the Certificate of
Incorporation and Bylaws of the Surviving Corporation. The officers of New
Provident Bancorp immediately prior to the Effective Time shall be the initial
officers of Surviving Corporation, in each case until their respective
successors are duly elected or appointed and qualified.
2.5. Additional Directors of New Provident Bancorp and Provident Bank.
Effective as of the Effective Time, the number of persons constituting the
Board of Directors of each of New Provident Bancorp and Provident Bank shall be
increased by two (2), and two (2) persons designated by Provident Bancorp, who
are directors of ENBHC or ENB, shall be appointed and elected to the Board of
Directors of both New Provident Bancorp and Provident Bank. The two persons
designated by Provident Bancorp shall be selected from a list of five (5)
directors serving on the board of directors of ENBHC or ENB, which list shall be
provided by ENBHC to Provident Bancorp. Any such individual proposed by ENBHC
must meet the eligibility criteria applicable to all directors of New Provident
Bancorp and Provident Bank. The foregoing obligation to appoint persons to the
Board of Directors of New Provident Bancorp and Provident Bank shall not apply
in the event that ENBHC elects to proceed with the Merger on the basis of the
All Cash Consideration in accordance with Section 2.9.2. In addition, at the
Effective Time, Provident Bank will appoint four members of ENB's board of
directors, as mutually agreed, for positions on Provident Bank's existing
regional advisory board of directors. Advisory board members shall receive a
quarterly payment of no less than $800. Pursuant to OTS regulations and policy,
any appointment to the regional advisory board will be for a one-year term,
subject to renewal of terms at Provident Bank's discretion.
9
2.6. Effects of the Merger.
At and after the Effective Time, the Merger shall have the effects as set
forth in the DGCL and the NYBCL.
2.7. Tax Consequences.
It is intended that the Merger shall constitute a reorganization within
the meaning of Section 368(a) of the Code, and that this Agreement shall
constitute a "plan of reorganization" as that term is used in Sections 354 and
361 of the Code. From and after the date of this Agreement and until the
Closing, each party hereto shall use its reasonable best efforts to cause the
Merger to qualify, and will not knowingly take any action, cause any action to
be taken, fail to take any action or cause any action to fail to be taken which
action or failure to act could prevent the Merger from qualifying as a
reorganization under Section 368(a) of the Code. Following the Closing, neither
New Provident Bancorp, Provident Bancorp, nor any of their affiliates shall
knowingly take any action, cause any action to be taken, fail to take any action
or cause any action to fail to be taken, which action or failure to act could
cause the Merger to fail to qualify as a reorganization under Section 368(a) of
the Code. New Provident Bancorp and ENBHC each hereby agrees to deliver
certificates substantially in compliance with IRS published advance ruling
guidelines, with customary exceptions and modifications thereto, to enable
counsel to deliver the legal opinion contemplated by Section 9.1.6, which
certificates shall be effective as of the date of such opinion. This Section 2.7
shall not apply in the event circumstances occur resulting in the Merger
Consideration becoming the "All Cash Consideration" as set forth in Section 2.9.
In such a case, it is intended that the Merger shall constitute a taxable sale
of the ENBHC Common Stock held by the holders of such stock to New Provident
Bancorp.
2.8. Possible Alternative Structures.
Notwithstanding anything to the contrary contained in this Agreement,
prior to the Effective Time, Provident Bancorp or New Provident Bancorp shall be
entitled to revise the structure of the Merger described in Section 2.1 hereof,
provided that (i) there are no adverse Federal or state income tax consequences
to ENBHC shareholders as a result of the modification; (ii) the consideration to
be paid to the holders of ENBHC Common Stock under this Agreement is not thereby
changed in kind or value or reduced in amount; and (iii) such modification will
not delay materially or jeopardize receipt of any required regulatory approvals
or other consents and approvals relating to the consummation of the Merger. The
Mutual Company, Provident Bancorp, New Provident Bancorp, Provident Bank, ENBHC
and ENB agree to appropriately amend this Agreement and any related documents in
order to reflect any such revised structure.
2.9. The Conversion
2.9.1. Contemporaneous with the adoption of this Agreement, the Board of
Directors of the Mutual Company is adopting a Plan of Conversion to convert into
the capital stock form of organization. New Provident Bancorp is being organized
to succeed to the rights and obligations of the Mutual Company and Provident
Bancorp and to offer for sale shares of common stock to depositors in the
Conversion, based on the Independent Valuation. The price per share of the
shares of New Provident Bancorp Common Stock to be issued in the Conversion is
referred to as
10
the "Conversion Price Per Share." The Conversion Price Per Share is expected to
be $10.00. The shares of New Provident Bancorp Common Stock to be issued in
connection with the Merger may be either shares unsubcribed for in the
Conversion subscription and/or community offering, or if such shares are
unavailable, authorized but unissued shares of New Provident Bancorp Common
Stock, which shares shall be issued immediately following completion of the
Conversion.
2.9.2. If the Conversion is terminated, or if the Conversion is postponed
such that for any reason whatsoever it is not consummated prior to March 31,
2004, then at ENBHC's election, either: (i) this Agreement shall be deemed to
provide, without further action of the parties hereto, that the Merger
Consideration shall be $4,500.00 in cash (the "All Cash Consideration"); in such
case, unless the payment of the All Cash Consideration has been approved by the
ENBHC shareholders, ENBHC shall as promptly as practicable hold another meeting
of its shareholders to approve the All Cash Consideration, and Provident Bancorp
may be required to re-new its request for regulatory approvals in light of the
All Cash Consideration; or (ii) ENBHC may terminate this Agreement and elect to
receive from Provident Bancorp a cash payment in the amount of $3,700,000
("Termination Fee"). ENBHC shall provide written notice to Provident Bancorp,
within fifteen (15) days after Provident Bancorp notifies ENBHC in writing of
the termination or postponement of the Conversion, or by April 15, 2004,
whichever is earlier, of ENBHC's election to either terminate this Agreement and
receive the Termination Fee or proceed with the Agreement on the basis of the
All Cash Consideration. If ENBHC elects to terminate the Agreement and receive
the Termination Fee, the Termination Fee shall be paid by Provident Bancorp
within two business days of receipt by Provident Bancorp of the written notice.
Upon payment of the Termination Fee, none of the parties (including the
directors and officers of each party and all Affiliates) shall have any further
liability to the other parties (including the directors and officers of each
party and all Affiliates) at law or in equity under this Agreement, it being
agreed that the payment of the Termination Fee shall constitute complete
performance of all obligations under this Agreement.
ARTICLE III
CONVERSION OF SHARES
3.1. Conversion of ENBHC Common Stock; Merger Consideration.
At the Effective Time, by virtue of the Merger and without any action on
the part of New Provident Bancorp, ENBHC or the holders of any of the shares of
ENBHC Common Stock, the Merger shall be effected in accordance with the
following terms:
3.1.1. All shares of ENBHC Common Stock held in the treasury of
ENBHC and each share of ENBHC Common Stock owned by Provident Bancorp or any
direct or indirect wholly owned subsidiary of Provident Bancorp or of ENBHC
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.
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3.1.2. Each outstanding share of ENBHC Common Stock that under the
terms of Section 3.2 is to be converted into the right to receive shares of New
Provident Bancorp Common Stock shall, subject to Section 3.3, be converted into
and become the right to receive that number of shares of New Provident Bancorp
Common Stock as shall equal $4,830.00 divided by the Conversion Price Per Share.
For example, if the Conversion Price Per Share is $10.00, then each outstanding
share of ENBHC Common Stock that under the terms of Section 3.2 is to be
converted into the right to receive shares of New Provident Bancorp Common Stock
shall, subject to Section 3.3, be converted into and become the right to receive
four hundred and eighty-three (483) shares of New Provident Bancorp Common
Stock.
In the event that the dollar value of the shares of New Provident Common
Stock sold in the Conversion by New Provident Bancorp (excluding shares issued
in the Exchange Offering, and excluding the shares of New Provident Bancorp
Common Stock issued by New Provident Bancorp to any charitable foundation formed
or caused to be formed by Provident Bank, Provident Bancorp, New Provident
Bancorp or the Mutual Company as part of the Conversion) exceeds $181,315,000,
then each outstanding share of ENBHC Common Stock that under the terms of
Section 3.2 is converted into the right to receive shares of New Provident
Bancorp Common Stock shall, subject to Section 3.3, be converted into and become
the right to receive that number of shares of New Provident Bancorp Common Stock
as shall equal (x) $4,830.00 divided by the Conversion Price Per Share (y)
multiplied by a fraction, the numerator of which equals the dollar value of the
shares of New Provident Common Stock sold in the Conversion by New Provident
Bancorp (excluding shares issued in the Exchange Offering, and excluding the
shares of New Provident Bancorp Common Stock issued by New Provident Bancorp to
any charitable foundation formed or caused to be formed by Provident Bank,
Provident Bancorp, New Provident Bancorp or the Mutual Company as part of the
Conversion) and the denominator of which equals $181,315,000. For example, if
the Conversion Price Per Share is $10.00, and the dollar value of the shares of
New Provident Common Stock sold in the Conversion by New Provident Bancorp
(excluding shares issued in the Exchange Offering, and excluding the shares of
New Provident Bancorp Common Stock issued by New Provident Bancorp to any
charitable foundation formed or caused to be formed by Provident Bank, Provident
Bancorp, New Provident Bancorp or the Mutual Company as part of the Conversion)
equals $190,000,000, then each outstanding share of ENBHC Common Stock that
under the terms of Section 3.2 is to be converted into the right to receive
shares of New Provident Bancorp Common Stock shall, subject to Section 3.3, be
converted into and become the right to receive five hundred and six (506) shares
of New Provident Bancorp Common Stock ($4,830 divided by $10.00, or 483 shares,
multiplied by 1.0479 ($190,000,000 divided by $181,315,000), with the fractional
share interest to be paid in cash by New Provident Bancorp pursuant to Section
3.2.3).
3.1.3. Each outstanding share of ENBHC Common Stock that under the
terms of Section 3.2 is to be converted into the right to receive cash shall be
converted into the right to receive a cash payment of $4,830.00 (the "Cash
Election Price").
3.1.4. Each outstanding share of ENBHC Common Stock the holder of
which has perfected his right to dissent under the NYBCL and has not effectively
withdrawn or lost such right as of the Effective Time (the "Dissenting Shares")
shall not be converted into or represent a right to receive shares of New
Provident Bancorp Common Stock or cash hereunder, and the holder thereof shall
be entitled only to such rights as are granted by the NYBCL.
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ENBHC shall give New Provident Bancorp prompt notice upon receipt by ENBHC of
any such demands for payment of the fair value of such shares of ENBHC Common
Stock and of withdrawals of such notice and any other instruments provided
pursuant to applicable law (any shareholder duly making such demand being
hereinafter called a "Dissenting Shareholder"), and New Provident Bancorp shall
have the right to participate in all negotiations and proceedings with respect
to any such demands. ENBHC shall not, except with the prior written consent of
New Provident Bancorp, voluntarily make any payment with respect to, or settle
or offer to settle, any such demand for payment, or waive any failure to timely
deliver a written demand for appraisal or the taking of any other action by such
Dissenting Shareholder as may be necessary to perfect appraisal rights under the
NYBCL. Any payments made in respect of Dissenting Shares shall be made by the
Surviving Company.
3.1.5. If any Dissenting Shareholder shall effectively withdraw or
lose (through failure to perfect or otherwise) his right to such payment at or
prior to the Effective Time, such holder's shares of ENBHC Common Stock shall be
converted into a right to receive cash or New Provident Bancorp Common Stock in
accordance with the applicable provisions of this Agreement. If such holder
shall effectively withdraw or lose (through failure to perfect or otherwise) his
right to such payment after the Effective Time, each share of ENBHC Common Stock
of such holder shall be converted on a share by share basis into either the
right to receive the Cash Election Price or New Provident Bancorp Common Stock
as New Provident Bancorp shall determine in its sole discretion.
3.1.6. After the Effective Time, shares of ENBHC 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 be the right to receive
the Merger Consideration.
3.2. Election Procedures.
Holders of ENBHC Common Stock may elect to receive shares of New Provident
Bancorp Common Stock, the Cash Election Price, or a combination thereof, in
exchange for their shares of ENBHC Common Stock in accordance with the following
procedures.
3.2.1. An election form as New Provident Bancorp and ENBHC shall
mutually agree ("Election Form") will be sent no more than 60 business days and
no less than 15 business days prior to the expected Effective Time (provided
that it need not be sent until the requisite approvals from the Bank Regulators
(as defined in Section 8.4) have been obtained) to each holder of record of
ENBHC Common Stock permitting such holder (or in the case of nominee record
holders, the beneficial owner through proper instructions and documentation) (i)
to elect to receive New Provident Bancorp Common Stock with respect to each
share of such holder's ENBHC Common Stock as provided herein (the "ENBHC Stock
Election Shares"), (ii) to elect to receive cash with respect to each share of
such holder's ENBHC Common Stock as provided herein (the "ENBHC Cash Election
Shares"), or (iii) to elect to receive New Provident Bancorp Common Stock for
part of such holder's ENBHC Common Stock as provided herein and cash for the
remaining part of such holders' ENBHC Common Stock as provided herein. Any
shares of ENBHC 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
converted on a share by share basis
13
into either the right to receive the Cash Election Price or New Provident
Bancorp Common Stock as New Provident Bancorp shall determine in its sole
discretion. Any Dissenting Shares shall be deemed to be ENBHC Cash Election
Shares, and with respect to such shares the holders thereof shall in no event
receive consideration comprised of New Provident Bancorp Common Stock.
3.2.2. The term "Election Deadline", as used below, shall mean 5:00
p.m., New York time, on the business day specified in the Election Form, which
Election Deadline shall be no less than two and no more than five business days
prior to the date of the Effective Time, or such other date as ENBHC and New
Provident Bancorp shall mutually agree upon. Any election to receive New
Provident Bancorp 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 by the Exchange
Agent at or prior to the Election Deadline. The Certificate or Certificates
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. Within five business days after the Election Deadline,
the Exchange Agent shall calculate the allocation among holders of ENBHC Common
Stock of rights to receive New Provident Bancorp Common Stock or the Cash
Election Price in the Merger in accordance with the Election Forms as follows:
(i) If the number of ENBHC Cash Election Shares is greater than
the quotient of (x) $36,773,205 divided by (y) the Cash
Election Price (the "Cash Conversion Shares"), then:
(1) all ENBHC Stock Election Shares will be converted into
the right to receive New Provident Bancorp Common Stock,
and
(2) each ENBHC Cash Election Share will be converted into
the right to receive New Provident Bancorp Common Stock
and cash in the following manner:
(A) a proration factor (the "Cash Proration Factor")
shall be determined by dividing (x) $36,773,205,
by (y) the product of the number of ENBHC Cash
Election Shares multiplied by the Cash Election
Price;
(B) the number of ENBHC Cash Election Shares held by
each holder of shares of ENBHC Common Stock that
will be converted into the right to receive cash
pursuant to the terms of Section 3.1.3 shall be
determined by multiplying the Cash Proration
Factor by the number of ENBHC Cash Election Shares
held by such holder; and
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(C) all ENBHC Cash Election Shares other than those
shares converted into the right to receive cash in
accordance with the preceding subparagraph (B)
shall be converted into the right to receive New
Provident Bancorp Common Stock in accordance with
the terms of Section 3.1.2; or
(ii) If the number of ENBHC Cash Election Shares is less than the
Cash Conversion Shares, then:
(1) all ENBHC Cash Election Shares (subject to the
provisions of Section 3.1.4 with respect to any
Dissenting Shares) will be converted into the right to
receive cash, and
(2) each ENBHC Stock Election Share will be converted into
the right to receive New Provident Bancorp Common Stock
and cash in the following manner:
(A) a proration factor (the "Stock Proration Factor")
shall be determined by dividing the Stock
Conversion Shares (as defined below) by the number
of ENBHC Stock Election Shares. The "Stock
Conversion Shares" shall mean the difference
between (x) the total number of shares of ENBHC
Common Stock outstanding immediately prior to the
Effective Time minus (y) the Cash Conversion
Shares;
(B) the number of ENBHC Stock Election Shares held by
each holder of shares of ENBHC Common Stock that
will be converted into the right to receive shares
of New Provident Bancorp Common Stock pursuant to
the terms of Section 3.1.2 shall be determined by
multiplying the Stock Proration Factor by the
number of ENBHC Stock Election Shares held by such
holder; and
(C) all ENBHC Stock Election Shares other than those
shares converted into the right to receive New
Provident Bancorp Common Stock in accordance with
the preceding subparagraph (B) shall be converted
into the right to receive cash in accordance with
the terms of Section 3.1.3; or
(iii) If the number of ENBHC Stock Election Shares is equal to the
number of Stock Conversion Shares and the number of ENBHC Cash
Election Shares is equal to the number of Cash Conversion
Shares, then subparagraphs (i) and (ii) above shall not apply
and all ENBHC Stock Election Shares will be converted into the
right to receive New Provident Bancorp Common Stock and all
ENBHC Cash Election Shares (subject to
15
the provisions of Section 3.1.4) will be converted into the
right to receive cash.
3.2.3. No Fractional Shares. Notwithstanding anything to the
contrary contained herein, no certificates or scrip representing fractional
shares of New Provident Bancorp Common Stock shall be issued upon the surrender
for exchange of Certificates, no dividend or distribution with respect to New
Provident Bancorp 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 shareholder of New
Provident Bancorp. In lieu of the issuance of any such fractional share, New
Provident Bancorp shall pay to each former holder of ENBHC Common Stock who
otherwise would be entitled to receive a fractional share of New Provident
Bancorp Common Stock, an amount in cash determined by multiplying the price for
which the New Provident Bancorp Common Stock is sold in the Offering by the
fraction of a share of New Provident Bancorp Common Stock which such holder
would otherwise be entitled to receive pursuant to Section 3.1.3 hereof. 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 ENBHC Common Stock owned by a ENBHC
shareholder shall be combined so as to calculate the maximum number of whole
shares of New Provident Bancorp Common Stock issuable to such ENBHC shareholder.
3.3. Procedures for Exchange of ENBHC Common Stock.
3.3.1. New Provident Bancorp to Make Merger Consideration Available.
At or prior to the Effective Time, New Provident Bancorp shall deposit, or shall
cause to be deposited, with the Exchange Agent for the benefit of the holders of
ENBHC Common Stock, for exchange in accordance with this Section 3.3,
certificates representing the shares of New Provident Bancorp Common Stock and
an estimated amount of cash sufficient to pay the aggregate Cash Election Price
payable hereunder and any cash that may be payable in lieu of any fractional
shares (such cash and certificates for shares of New Provident Bancorp 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. Within five (5) business days after
the Effective Time, New Provident Bancorp 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
certificates representing, as the case may be, the shares of New Provident
Bancorp Common Stock, cash in respect of the Cash Election Price, and cash in
lieu of fractional shares into which the ENBHC Common Stock represented by such
Certificates shall have been converted as a result of the Merger. The letter of
transmittal (which shall be subject to the reasonable approval of ENBHC) 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. Promptly 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 therefore, as applicable, (i) a certificate representing
that number of shares of New Provident Bancorp Common Stock (if any) to which
16
such former holder of ENBHC 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 ENBHC Common Stock shall have
become entitled in respect of the Cash Election Price pursuant to the provisions
of Section 3.2 hereof and (iii) a check representing the amount of cash (if any)
payable in lieu of fractional shares of New Provident Bancorp Common Stock,
which such former holder has the right to receive in respect of the Certificate
surrendered pursuant to the provisions of this Section 3, 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 ENBHC for purposes of Rule
145(c) under the Securities Act shall not be exchanged for certificates
representing shares of New Provident Bancorp Common Stock until New Provident
Bancorp or Provident Bancorp has received the written agreement of such person
contemplated by Section 8.5 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 ENBHC Common Stock shall have no rights, after the Effective Time,
with respect to such ENBHC 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 New Provident Bancorp Common Stock shall be paid to the holder of any
unsurrendered Certificate until the holder thereof shall surrender such
Certificate in accordance with this Section 3.3. After the surrender of a
Certificate in accordance with this 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
New Provident Bancorp Common Stock represented by such Certificate.
3.3.4. Surrender by Persons 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 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 ENBHC of the ENBHC
Common Stock that were 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 twelve
(12) month period after the Effective Time, New Provident Bancorp shall be
entitled to require the
17
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 New Provident Bancorp
(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 New Provident
Bancorp 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 New Provident Bancorp, the posting by
such person of a bond in such amount as New Provident Bancorp may reasonably
direct as indemnity against any claim that may be made against it with respect
to such Certificate, the Exchange Agent will issue in exchange for such lost,
stolen or destroyed Certificate the Merger Consideration deliverable in respect
thereof.
3.3.8. Withholding. New Provident Bancorp 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 ENBHC Common Stock such amounts as New Provident Bancorp (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 New Provident Bancorp 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 ENBHC Common Stock in respect of whom such
deduction and withholding were made by New Provident Bancorp or the Exchange
Agent.
3.4. Reservation of Shares.
New Provident Bancorp shall reserve for issuance a sufficient number of
shares of the New Provident Bancorp Common Stock for the purpose of issuing
shares of New Provident Bancorp Common Stock to the ENBHC shareholders in
accordance with this Article III.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF ENBHC
ENBHC and ENB represent and warrant to the Mutual Holding Company,
Provident Bancorp, New Provident Bancorp and Provident Bank 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 ENBHC
DISCLOSURE SCHEDULE delivered by ENBHC to Provident Bancorp on the date hereof,
and except as to any representation or warranty which specifically relates to an
earlier date. ENBHC and ENB have made a good faith effort to ensure that the
disclosure on each schedule of the ENBHC DISCLOSURE SCHEDULE corresponds to the
section referenced
18
herein. However, for purposes of the ENBHC DISCLOSURE SCHEDULE, any item
disclosed on any schedule therein is deemed to be fully disclosed with respect
to all schedules under which such item may be relevant as and to the extent that
it is reasonably clear on the face of such schedule that such item applies to
such other schedule. References to the Knowledge of ENBHC shall include the
Knowledge of ENB.
4.1. Organization.
4.1.1. ENBHC is a corporation duly organized, validly existing and
in good standing under the laws of the State of New York, and is duly registered
as a bank holding company under the BHCA. ENBHC has full corporate power and
authority to carry on its business as now conducted and is duly licensed or
qualified to do business in the states of the United States and foreign
jurisdictions where 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 ENBHC.
4.1.2. ENB is a national bank organized, validly existing and in
good standing under federal law. ENBHC DISCLOSURE SCHEDULE 4.1.2 identifies each
ENBHC Subsidiary and (other than as to ENB) describes the business conducted by
such entity. The deposits of ENB are insured by the FDIC through the BIF to the
fullest extent permitted by law, and all premiums and assessments required to be
paid in connection therewith have been paid by ENB when due. Each other ENBHC
Subsidiary is a corporation or limited liability company duly organized, validly
existing and in good standing under the laws of its jurisdiction of
incorporation or organization.
4.1.3. The respective minute books of ENBHC and each ENBHC
Subsidiary accurately records, in all material respects, all material corporate
actions of their respective shareholders and boards of directors (including
committees).
4.1.4. Prior to the date of this Agreement, ENBHC has made available
to Provident Bancorp true and correct copies of the certificate of incorporation
or articles of association and bylaws of ENBHC and ENB.
4.2. Capitalization.
4.2.1. The authorized capital stock of ENBHC consists of 250,000
shares of common stock, $20.00 par value per share, of which 15,227 shares are
outstanding, validly issued, fully paid and nonassessable and free of preemptive
rights, and no shares of preferred stock issued and outstanding. There are 4,773
shares of ENBHC Common Stock held by ENBHC as treasury stock. Neither ENBHC nor
any ENBHC Subsidiary has or is bound by any Rights of any character relating to
the purchase, sale or issuance or voting of, or right to receive dividends or
other distributions on any shares of ENBHC Common Stock, or any other security
of ENBHC or any securities representing the right to vote, purchase or otherwise
receive any shares of ENBHC Common Stock or any other security of ENBHC.
4.2.2. ENBHC owns all of the capital stock of ENB, free and clear of
any lien or encumbrance. Except for the ENBHC Subsidiaries, ENBHC does not
possess, directly or indirectly, any material equity interest in any corporate
entity, except for equity interests held in
19
the investment portfolios of ENBHC Subsidiaries, equity interests held by ENBHC
Subsidiaries in a fiduciary capacity, and equity interests held in connection
with the lending activities of ENBHC Subsidiaries, including stock in the FHLB.
4.2.3. Except as disclosed in ENBHC DISCLOSURE SCHEDULE 4.2.3, to
ENBHC's Knowledge, no Person or "group" (as that term is used in Section
13(d)(3) of the Exchange Act), is the beneficial owner (as defined in Section
13(d) of the Exchange Act) of 5% or more of the outstanding shares of ENBHC
Common Stock.
4.2.4. There are no options to purchase ENBHC Common Stock issued
and outstanding.
4.3. Authority; No Violation.
4.3.1. ENBHC and ENB each has full corporate power and authority to
execute and deliver this Agreement and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement by ENBHC and
ENB, and of the engagement agreements referenced in Section 4.13, and the
completion by ENBHC and ENB of the transactions contemplated hereby, up to and
including the Merger, have been duly and validly approved by the Board of
Directors of ENBHC and ENB, respectively, and, except for approval of the
shareholders of ENBHC, no other corporate proceedings on the part of ENBHC or
ENB are necessary to complete the transactions contemplated hereby, up to and
including the Merger. This Agreement, and the engagement agreements referenced
in Section 4.13, have been duly and validly executed and delivered by ENBHC and
ENB, and the Bank Merger has been duly and validly approved by the Board of
Directors of ENB, and by ENBHC in its capacity as sole shareholder of ENB, and
subject to approval by the shareholders of ENBHC of the Agreement and receipt of
the required approvals of the Bank Regulators described in Section 8.4 hereof,
constitutes the valid and binding obligations of ENBHC and ENB, enforceable
against ENBHC and ENB in accordance with its terms, subject to applicable
bankruptcy, insolvency and similar laws affecting creditors' rights generally,
and as to ENB, the conservatorship or receivership provisions of the FDIA, and
subject, as to enforceability, to general principles of equity.
4.3.2. (A) The execution and delivery of this Agreement by ENBHC and
ENB, and of the engagement agreements referenced in Section 4.13, (B) subject to
receipt of approvals from the Bank Regulators referred to in Section 8.4 hereof,
and ENBHC's and Provident Bancorp's compliance with any conditions contained
therein, and subject to the receipt of the approval of ENBHC's and Provident
Bancorp's shareholders, the consummation of the transactions contemplated
hereby, and (C) compliance by ENBHC and ENB with any of the terms or provisions
hereof will not (i) conflict with or result in a breach of any provision of the
certificate of incorporation or bylaws of ENBHC or any ENBHC Subsidiary or the
articles of association and bylaws of ENB; (ii) violate any statute, code,
ordinance, rule, regulation, judgment, order, writ, decree or injunction
applicable to ENBHC or any ENBHC Subsidiary or any of their respective
properties or assets; or (iii) except as set forth in ENBHC DISCLOSURE SCHEDULE
4.3.2, violate, conflict with, result in a breach of any provisions of,
constitute a default (or an event which, with notice or lapse of time, or both,
would constitute a default), under, result in the termination of, accelerate the
performance required by, or result in a right of termination or acceleration or
the creation of any lien, security interest, charge or other
20
encumbrance upon any of the properties or assets of ENBHC or ENB under any of
the terms, conditions or provisions of any note, bond, mortgage, indenture, deed
of trust, license, lease, agreement or other investment or obligation to which
ENBHC or ENB is a party, or by which they or any of their respective properties
or assets may be bound or affected, except for such violations, conflicts,
breaches or defaults under clause (ii) or (iii) hereof which, either
individually or in the aggregate, will not have a Material Adverse Effect on
ENBHC and the ENBHC Subsidiaries taken as a whole.
4.4. Consents.
Except for the consents, waivers, approvals, filings and registrations
from or with the Bank Regulators referred to in Section 8.4 hereof and
compliance with any conditions contained therein, and the approval of this
Agreement by the requisite vote of the shareholders of ENBHC and Provident
Bancorp, no consents, waivers or approvals of, or filings or registrations with,
any Bank Regulator are necessary, and, to ENBHC's Knowledge and except as
disclosed in the ENBHC DISCLOSURE SCHEDULE 4.4, no consents, waivers or
approvals of, or filings or registrations with, any other third parties are
necessary, in connection with (a) the execution and delivery of this Agreement
by ENBHC and ENB, and (b) the completion by ENBHC and ENB of the Merger and the
Bank Merger. ENBHC and ENB have no reason to believe that (i) any required
approvals from a Bank Regulator or other required consents or approvals will not
be received, or that (ii) any public body or authority, the consent or approval
of which is not required or to which a filing is not required, will object to
the completion of the transactions contemplated by this Agreement.
4.5. Financial Statements.
4.5.1. ENBHC has previously made available to Provident Bancorp the
ENBHC Regulatory Reports. The ENBHC Regulatory Reports have been prepared in all
material respects in accordance with applicable regulatory accounting principles
and practices throughout the periods covered by such statements, and fairly
present in all material respects, the consolidated financial position, results
of operations and changes in shareholders' equity of ENBHC as of and for the
periods ended on the dates thereof, in accordance with applicable regulatory
accounting principles applied on a consistent basis.
4.5.2. ENBHC has previously made available to Provident Bancorp the
ENBHC Financial Statements. The ENBHC Financial Statements have been prepared in
accordance with GAAP, and (including the related notes where applicable) fairly
present in each case in all material respects (subject in the case of the
unaudited interim statements to normal year-end adjustments), the consolidated
financial position, results of operations and cash flows of ENBHC and the ENBHC
Subsidiaries on a consolidated basis as of and for the respective periods ending
on the dates thereof, in accordance with GAAP during the periods involved,
except as indicated in the notes thereto.
4.5.3. At the date of each balance sheet included in the ENBHC
Financial Statements or the ENBHC Regulatory Reports, ENBHC did not have any
liabilities, obligations or loss contingencies of any nature (whether absolute,
accrued, contingent or otherwise) of a type required to be reflected in such
ENBHC Financial Statements or ENBHC Regulatory Reports or
21
in the footnotes thereto which are not fully reflected or reserved against
therein or fully disclosed in a footnote thereto, except for liabilities,
obligations and loss contingencies which are not material individually or in the
aggregate or which are incurred in the ordinary course of business, consistent
with past practice, and except for liabilities, obligations and loss
contingencies which are within the subject matter of a specific representation
and warranty herein and subject, in the case of any unaudited statements, to
normal, recurring audit adjustments and the absence of footnotes.
4.6. Taxes.
ENBHC and the ENBHC Subsidiaries are members of the same affiliated group
within the meaning of Code Section 1504(a). ENBHC, or the appropriate ENBHC
Subsidiary, has duly filed all federal, state and material local tax returns
required to be filed by or with respect to ENBHC and every ENBHC Subsidiary on
or prior to the Closing Date (all such returns, to ENBHC's Knowledge, being
accurate and correct in all material respects) and has duly paid or made
provisions for the payment of all material federal, state and local taxes which
(i) have been incurred by ENBHC and any ENBHC Subsidiary; (ii) are due or
claimed to be due from ENBHC or any ENBHC Subsidiary by any taxing authority or
(ii) are due pursuant to any written tax sharing agreement, in each case on or
prior to the Closing Date, other than taxes or other charges which (x) are not
delinquent, (y) are being contested in good faith, or (z) have not yet been
fully determined. As of the date of this Agreement, ENBHC has received no
written notice of, and to ENBHC's Knowledge there is no audit examination,
deficiency assessment, tax investigation or refund litigation with respect to
any taxes of ENBHC or any of its Subsidiaries, and no claim has been made by any
authority in a jurisdiction where ENBHC or any of its Subsidiaries do not file
tax returns that ENBHC or any such Subsidiary is subject to taxation in that
jurisdiction. Except as set forth in ENBHC DISCLOSURE SCHEDULE 4.6, ENBHC and
its Subsidiaries have not executed an extension or waiver of any statute of
limitations on the assessment or collection of any material tax due that is
currently in effect. ENBHC and each of its Subsidiaries has withheld and paid
all material taxes required to have been withheld and paid in connection with
amounts paid or owing to any employee, independent contractor, creditor,
shareholder or other third party, and ENBHC and each of its Subsidiaries, to
ENBHC's Knowledge, has timely complied with all applicable information reporting
requirements under Part III, Subchapter A of Chapter 61 of the Code and similar
applicable state and local information reporting requirements.
4.7. No Material Adverse Effect.
ENBHC and the ENBHC Subsidiaries, taken as a whole, have not suffered any
Material Adverse Effect since December 31, 2002, and no event has occurred or
circumstance arisen since that date which, in the aggregate, has had or is
reasonably likely to have a Material Adverse Effect on ENBHC and the ENBHC
Subsidiaries, taken as a whole.
4.8. Material Contracts; Leases; Defaults.
4.8.1. Except as set forth in ENBHC DISCLOSURE SCHEDULE 4.8.1,
neither ENBHC nor any ENBHC Subsidiary is a party to or subject to: (i) any
employment, consulting or severance contract or material arrangement with any
past or present officer, director or employee of ENBHC or any ENBHC Subsidiary,
except for "at will" arrangements;
22
(ii) any plan, material arrangement or contract providing for bonuses, pensions,
options, deferred compensation, retirement payments, profit sharing or similar
material arrangements for or with any past or present officers, directors or
employees of ENBHC or any ENBHC Subsidiary; (iii) any collective bargaining
agreement with any labor union relating to employees of ENBHC or any ENBHC
Subsidiary; (iv) any agreement which by its terms limits the payment of
dividends by ENBHC or any ENBHC Subsidiary; (v) 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 ENBHC or any ENBHC
Subsidiary is an obligor to any person, which instrument evidences or relates to
indebtedness other than deposits, repurchase agreements, bankers' acceptances,
and "treasury tax and loan" accounts established in the ordinary course of
business and transactions in "federal funds" or which contains 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 New Provident Bancorp or any New Provident Bancorp Subsidiary;
(vi) any agreement, written or oral, that obligates ENBHC or any ENBHC
Subsidiary for the payment of more than $20,000 annually; or (vii) any
agreement, contract, arrangement, commitment or understanding (whether written
or oral) that restricts or limits in any material way the conduct of business by
ENBHC or any ENBHC Subsidiary (it being understood that any non-compete or
similar provision shall be deemed material).
4.8.2. Each real estate lease that may require the consent of the
lessor or its agent resulting from the Merger or the merger of ENB into
Provident Bank by virtue of a prohibition or restriction relating to assignment,
by operation of law or otherwise, or change in control, is listed in ENBHC
DISCLOSURE SCHEDULE 4.8.2 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 ENBHC nor any ENBHC 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.
4.8.3. True and correct copies of agreements, contracts,
arrangements and instruments referred to in Section 4.8.1 and 4.8.2 have been
made available to Provident Bancorp on or before the date hereof, are listed on
ENBHC DISCLOSURE SCHEDULE 4.8.1 and 4.8.2 and are in full force and effect on
the date hereof and neither ENBHC nor any ENBHC Subsidiary (nor, to the
Knowledge of ENBHC, 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 ENBHC DISCLOSURE SCHEDULE 4.8.3, no party to any material contract,
arrangement or instrument will have the right to terminate any or all of the
provisions of any such contract, arrangement or instrument as a result of the
execution of, and the consummation of the transactions contemplated by, this
Agreement. Except as set forth in ENBHC DISCLOSURE SCHEDULE 4.8.3, no plan,
contract, employment agreement, termination agreement, or similar agreement or
arrangement to which ENBHC or any ENBHC Subsidiary is a party or under which
ENBHC or any ENBHC Subsidiary may be liable contains provisions which permit an
employee or
23
independent contractor to terminate it without cause and continue to accrue
future benefits thereunder. Except as set forth in ENBHC DISCLOSURE SCHEDULE
4.8.3, no such agreement, plan, contract, or arrangement (x) provides for
acceleration in the vesting of benefits or payments due thereunder upon the
occurrence of a change in ownership or control of ENBHC or any ENBHC Subsidiary
or upon the occurrence of a subsequent event; or (y) requires ENBHC or any ENBHC
Subsidiary to provide a benefit in the form of ENBHC Common Stock or determined
by reference to the value of ENBHC Common Stock.
4.9. Ownership of Property; Insurance Coverage.
4.9.1. ENBHC and each ENBHC Subsidiary has good and, as to real
property, marketable title to all material assets and properties owned by ENBHC
or each ENBHC Subsidiary in the conduct of its businesses, whether such assets
and properties are real or personal, tangible or intangible, including assets
and property reflected in the balance sheets contained in the ENBHC Regulatory
Reports and in the ENBHC Financial Statements or acquired subsequent thereto
(except to the extent that such assets and properties have been disposed of in
the ordinary course of business, since the date of such balance sheets), subject
to no material encumbrances, liens, mortgages, security interests or pledges,
except as listed on ENBHC DISCLOSURE SCHEDULE 4.9 and except for (i) those items
which secure liabilities for public or statutory obligations or any discount
with, inter-bank credit facilities, or any transaction by an ENBHC Subsidiary
acting in a fiduciary capacity, and (ii) statutory liens for amounts not yet
delinquent or which are being contested in good faith. ENBHC and the ENBHC
Subsidiaries, as lessee, have the right under valid and existing leases of real
and personal properties used by ENBHC and its Subsidiaries in the conduct of
their businesses to occupy or use all such properties as presently occupied and
used by each of them. Such existing leases and commitments to lease constitute
or will constitute operating leases for both tax and financial accounting
purposes and the lease expense and minimum rental commitments with respect to
such leases and lease commitments are as disclosed in all material respects in
the notes to the ENBHC Financial Statements.
4.9.2. With respect to all material agreements pursuant to which
ENBHC or any ENBHC Subsidiary has purchased securities subject to an agreement
to resell, if any, ENBHC or such ENBHC Subsidiary, as the case may be, has a
lien or security interest (which to ENBHC's Knowledge is a valid, perfected
first lien) in the securities or other collateral securing the repurchase
agreement, and the value of such collateral equals or exceeds the amount of the
debt secured thereby.
4.9.3. ENBHC and each ENBHC Subsidiary currently maintain insurance
considered by each of them to be reasonable for their respective operations.
Neither ENBHC nor any ENBHC Subsidiary, except as disclosed in ENBHC DISCLOSURE
SCHEDULE 4.9.3, has received notice from any insurance carrier that (i) such
insurance will be canceled or that coverage thereunder will be reduced or
eliminated, or (ii) premium costs with respect to such policies of insurance
will be substantially increased. There are presently no material claims pending
under such policies of insurance and no notices have been given by ENBHC or any
ENBHC Subsidiary under such policies. All such insurance is valid and
enforceable and in full force and effect, and within the last three years ENBHC
and each ENBHC Subsidiary has received each type of insurance coverage for which
it has applied and during such periods has
24
not been denied indemnification for any material claims submitted under any of
its insurance policies. ENBHC DISCLOSURE SCHEDULE 4.9.3 identifies all policies
of insurance maintained by ENBHC and each ENBHC Subsidiary.
4.10. Legal Proceedings.
Except as set forth in ENBHC DISCLOSURE SCHEDULE 4.10, neither ENBHC nor
any ENBHC Subsidiary is a party to any, and there are no pending or, to ENBHC's
Knowledge, threatened legal, administrative, arbitration or other proceedings,
claims (whether asserted or unasserted), actions or governmental investigations
or inquiries of any nature (i) against ENBHC or any ENBHC Subsidiary (other than
routine bank regulatory examinations) or (ii) to which ENBHC or any ENBHC
Subsidiary's assets are or may be subject, except for any proceedings, claims,
actions, investigations or inquiries which, if adversely determined,
individually or in the aggregate, could not be reasonably expected to have a
Material Adverse Effect on ENBHC and the ENBHC Subsidiaries, taken as a whole.
There are no legal, administrative, arbitration or other proceedings, claims,
actions or governmental investigations challenging the validity or propriety of
any of the transactions and/or agreements contemplated by, referred to in or
related to this Agreement (including the schedules hereto).
4.11. Compliance With Applicable Law.
4.11.1. To ENBHC's Knowledge, each of ENBHC and each ENBHC
Subsidiary is in compliance in all material respects with all applicable
federal, state, local and foreign statutes, laws, regulations, ordinances,
rules, judgments, orders or decrees applicable to it, its properties, assets and
deposits, its business, and its conduct of business and its relationship with
its employees, including, without limitation, the Equal Credit Opportunity Act,
the Fair Housing Act, the Community Reinvestment Act of 1977, the Home Mortgage
Disclosure Act, and all other applicable fair lending laws and other laws
relating to discriminatory business practices and neither ENBHC nor any ENBHC
Subsidiary has received any written notice to the contrary.
4.11.2. Each of ENBHC and each ENBHC Subsidiary has all material
permits, licenses, authorizations, orders and approvals of, and has made all
filings, applications and registrations with, all Bank Regulators that are
required in order to permit it to own or lease its properties and to conduct its
business as presently conducted; all such permits, licenses, certificates of
authority, orders and approvals are in full force and effect and, to the
Knowledge of ENBHC, no suspension or cancellation of any such permit, license,
certificate, order or approval is threatened or will result from the
consummation of the transactions contemplated by this Agreement, subject to
obtaining the approvals set forth in Section 8.4.
4.11.3. For the period beginning January 1, 1998, neither ENBHC nor
any ENBHC Subsidiary has received any written notification or to ENBHC's
Knowledge any other communication from any Bank Regulator (i) asserting that
ENBHC or any ENBHC Subsidiary is not in material compliance with any of the
statutes, regulations or ordinances which such Bank Regulator enforces; (ii)
threatening to revoke any license, franchise, permit or governmental
authorization which is material to ENBHC or any ENBHC Subsidiary; (iii)
requiring or threatening to require ENBHC or any ENBHC Subsidiary, or indicating
that ENBHC or any
25
ENBHC Subsidiary may be required, to enter into a cease and desist order,
agreement or memorandum of understanding or any other agreement with any federal
or state governmental agency or authority which is charged with the supervision
or regulation of banks or engages in the insurance of bank deposits restricting
or limiting, or purporting to restrict or limit, in any material respect the
operations of ENBHC or any ENBHC Subsidiary, including without limitation any
restriction on the payment of dividends; or (iv) directing, restricting or
limiting, or purporting to direct, restrict or limit, in any manner the
operations of ENBHC or any ENBHC Subsidiary, including without limitation any
restriction on the payment of dividends (any such notice, communication,
memorandum, agreement or order described in this sentence is hereinafter
referred to as a "Regulatory Agreement"). Neither ENBHC nor any ENBHC Subsidiary
has consented to or entered into any currently effective Regulatory Agreement.
The most recent regulatory rating given to ENB as to compliance with the
Community Reinvestment Act ("CRA") is satisfactory or better.
4.12. Employee Benefit Plans.
4.12.1. ENBHC DISCLOSURE SCHEDULE 4.12.1 includes a list of all
existing bonus, incentive, deferred compensation, pension, retirement,
profit-sharing, thrift, savings, employee stock ownership, stock bonus, stock
purchase, restricted stock, stock option, stock appreciation, phantom stock,
severance, welfare and fringe benefit plans, employment, severance and change in
control agreements and all other material benefit practices, policies and
arrangements maintained by ENBHC or any ENBHC Subsidiary in which any employee
or former employee, consultant or former consultant or director or former
director of ENBHC or any ENBHC Subsidiary participates or to which any such
employee, consultant or director is a party or is otherwise entitled to receive
benefits (the "Compensation and Benefit Plans"). Neither ENBHC nor any of its
Subsidiaries has any commitment to create any additional Compensation and
Benefit Plan or to materially modify, change or renew any existing Compensation
and Benefit Plan (any modification or change that increases the cost of such
plans would be deemed material), except as required to maintain the qualified
status thereof, provided, however, that ENBHC and its Subsidiaries expressly
reserve the right to amend the ENB Profit Sharing Plan and the ENB Pension Plan
prior to the Closing Date to provide for the full vesting of all participants
under those plans. ENBHC has made available to Provident Bancorp true and
correct copies of the Compensation and Benefit Plans.
4.12.2. To the Knowledge of ENBHC and except as disclosed in ENBHC
DISCLOSURE SCHEDULE 4.12.2, each Compensation and Benefit Plan has been operated
and administered in all material respects in accordance with its terms and with
applicable law, including, but not limited to, ERISA, the Code, the Securities
Act, the Exchange Act, the Age Discrimination in Employment Act, COBRA, the
Health Insurance Portability and Accountability Act and any regulations or rules
promulgated thereunder, and all material filings, disclosures and notices
required by ERISA, the Code, the Securities Act, the Exchange Act, the Age
Discrimination in Employment Act and any other applicable law have been timely
made or any interest, fines, penalties or other impositions for late filings
have been paid in full. Each Compensation and Benefit Plan which is an "employee
pension benefit plan" within the meaning of Section 3(2) of ERISA (a "Pension
Plan") and which is intended to be qualified under Section 401(a) of the Code
has received a favorable determination letter from the IRS, and ENBHC is not
aware of any circumstances which are reasonably likely to result in revocation
of any such
26
favorable determination letter. There is no material pending or, to the
Knowledge of ENBHC, threatened action, suit or claim relating to any of the
Compensation and Benefit Plans (other than routine claims for benefits). Neither
ENBHC nor any ENBHC Subsidiary has engaged in a transaction, or omitted to take
any action, with respect to any Compensation and Benefit Plan that would
reasonably be expected to subject ENBHC or any ENBHC Subsidiary to an unpaid tax
or penalty imposed by either Section 4975 of the Code or Section 502 of ERISA.
4.12.3. No liability, other than (a) PBGC premiums arising in the
ordinary course of business, or (b) any employer contribution required under the
terms of any ENBHC Defined Benefit Plan (as defined herein) has been or is
expected by ENBHC or any of its Subsidiaries to be incurred with respect to any
ENBHC Compensation and Benefit Plan which is a defined benefit plan subject to
Title IV of ERISA ("ENBHC Defined Benefit Plan"), or with respect to any
"single-employer plan" (as defined in Section 4001(a) of ERISA) currently or
formerly maintained by ENBHC or any entity which is considered one employer with
ENBHC under Section 4001(b)(1) of ERISA or Section 414 of the Code (an "ERISA
Affiliate") (such plan hereinafter referred to as an "ERISA Affiliate Plan"). To
the Knowledge of ENBHC and any ENBHC Subsidiary, except as set forth in ENBHC
DISCLOSURE SCHEDULE 4.12.3, no ENBHC Defined Benefit 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. Except as set forth in ENBHC DISCLOSURE SCHEDULE 4.12.3, the fair
market value of the assets of each ENBHC Defined Benefit Plan exceeds the
present value of the "benefit liabilities" (as defined in Section 4001(a)(16) of
ERISA) under such ENBHC Defined Benefit Plan as of the end of the most recent
plan year with respect to the respective ENBHC 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 ENBHC Defined Benefit Plan as of
the date hereof; and no notice of a "reportable event" (as defined in Section
4043 of ERISA) for which the 30-day reporting requirement has not been waived
has been required to be filed for any ENBHC Defined Benefit Plan within the
12-month period ending on the date hereof. Neither ENBHC nor any of its
Subsidiaries has provided, or is required to provide, security to any ENBHC
Defined Benefit Plan or to any single-employer plan of an ERISA Affiliate
pursuant to Section 401(a)(29) of the Code or has taken any action, or omitted
to take any action, that has resulted, or would reasonably be expected to result
in the imposition of a lien under Section 412(n) of the Code or pursuant to
ERISA. Neither ENBHC, its Subsidiaries, nor any ERISA Affiliate has contributed
to any "multiemployer plan," as defined in Section 3(37) of ERISA, on or after
January 1, 1998. To the Knowledge of ENBHC, there is no pending investigation or
enforcement action by any Bank Regulator with respect to any Compensation and
Benefit Plan or any ERISA Affiliate Plan.
4.12.4. All material contributions required to be made under the
terms of any Compensation and Benefit Plan or ERISA Affiliate Plan to which
ENBHC or any ENBHC Subsidiary is a party or a sponsor have been timely made, and
all anticipated contributions and funding obligations are accrued on ENBHC's
consolidated financial statements to the extent required by GAAP. ENBHC and its
Subsidiaries have expensed and accrued as a liability the present value of
future benefits under each applicable Compensation and Benefit Plan for
financial reporting purposes to the extent required by GAAP.
27
4.12.5. Except as set forth in ENBHC DISCLOSURE SCHEDULE 4.12.5,
neither ENBHC nor any ENBHC Subsidiary has any obligations to provide retiree
health, life insurance, disability insurance, or other retiree death benefits
under any Compensation and Benefit Plan, other than benefits mandated by Section
4980B of the Code. Except as set forth in ENBHC DISCLOSURE SCHEDULE 4.12.5,
there has been no communication to employees by ENBHC or any ENBHC Subsidiary
that would reasonably be expected to promise or guarantee such employees retiree
health, life insurance, disability insurance, or other retiree death benefits.
4.12.6. ENBHC and its Subsidiaries do not maintain any Compensation
and Benefit Plans covering employees who are not United States residents.
4.12.7. With respect to each Compensation and Benefit Plan, if
applicable, ENBHC has provided or made available to Provident Bancorp copies of
the: (A) trust instruments and insurance contracts; (B) two most recent Forms
5500 filed with the IRS; (C) most recent actuarial report and financial
statement; (D) most recent summary plan description; (E) most recent
determination letter issued by the IRS; (F) any Form 5310 or Form 5330 filed
with the IRS within the last two years; and (G) most recent nondiscrimination
tests performed under ERISA and the Code (including 401(k) and 401(m) tests).
4.12.8. Except as disclosed in ENBHC DISCLOSURE SCHEDULE 4.12.8, the
consummation of the Merger will not, directly or indirectly (including, without
limitation, as a result of any termination of employment or service at any time
prior to or following the Effective Time) (A) entitle any employee, consultant
or director to any payment or benefit (including severance pay, change in
control benefit, or similar compensation) or any increase in compensation, (B)
result in the vesting or acceleration of any benefits under any Compensation and
Benefit Plan or (C) result in any material increase in benefits payable under
any Compensation and Benefit Plan.
4.12.9. Except as disclosed in ENBHC DISCLOSURE SCHEDULE 4.12.9,
neither ENBHC nor any ENBHC Subsidiary maintains any compensation plans,
programs or arrangements under which any payment is reasonably likely to become
non-deductible, in whole or in part, for tax reporting purposes as a result of
the limitations under Section 162(m) of the Code and the regulations issued
thereunder.
4.12.10. To the Knowledge of ENBHC, the consummation of the Mergers
will not, directly or indirectly (including without limitation, as a result of
any termination of employment or service at any time prior to or following the
Effective Time), entitle any current or former employee, director or independent
contractor of ENBHC or any ENBHC Subsidiary to any actual or deemed payment (or
benefit) which could constitute a "parachute payment" (as such term is defined
in Section 280G of the Code), except as set forth in ENBHC DISCLOSURE SCHEDULE
4.12.10.
4.12.11. There are no stock appreciation or similar rights, earned
dividends or dividend equivalents, or shares of restricted stock, outstanding
under any of the Compensation and Benefit Plans or otherwise as of the date
hereof and none will be granted, awarded, or credited after the date hereof.
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4.12.12. ENBHC DISCLOSURE SCHEDULE 4.12.12 sets forth, as of the
payroll date immediately preceding the date of this Agreement, a list of the
full names of all employees of ENB or ENBHC, their title and rate of salary,
their date of hire and any changes in their rate of salary or title effected
since December 31, 2002. ENBHC DISCLOSURE SCHEDULE 4.12.12 also sets forth any
changes to any Compensation and Benefit Plan since December 31, 2002.
4.13. Brokers, Finders and Financial Advisors.
Except as set forth in ENBHC DISCLOSURE SCHEDULE 4.13, neither ENBHC nor
any ENBHC Subsidiary, nor any of their respective officers, directors, employees
or agents, has employed any broker, finder or financial advisor in connection
with the transactions contemplated by this Agreement, or, except for its
commitments including to those it has professionally engaged and disclosed in
ENBHC DISCLOSURE SCHEDULE 4.13, incurred any liability or commitment for any
fees or commissions to any such person in connection with the transactions
contemplated by this Agreement.
4.14. Environmental Matters.
4.14.1. Except as may be set forth in ENBHC DISCLOSURE SCHEDULE
4.14, with respect to ENBHC and each ENBHC Subsidiary:
(A) Each of ENBHC and the ENBHC Subsidiaries, the
Participation Facilities, and, to ENBHC's Knowledge, the Loan Properties are,
and have been, in substantial compliance with, and are not liable under, any
Environmental Laws;
(B) There is no suit, claim, action, demand, executive or
administrative order, directive, investigation or proceeding pending and, to
ENBHC's Knowledge, no such action is threatened, before any court, governmental
agency or other forum against it or any of the ENBHC Subsidiaries or any
Participation Facility (x) for alleged noncompliance (including by any
predecessor) with, or liability under, any Environmental Law or (y) relating to
the presence of or release (as defined herein) into the environment of any
Materials of Environmental Concern (as defined herein), whether or not occurring
at or on a site owned, leased or operated by it or any of the ENBHC Subsidiaries
or any Participation Facility;
(C) There is no suit, claim, action, demand, executive or
administrative order, directive, investigation or proceeding pending and, to
ENBHC's Knowledge no such action is threatened, before any court, governmental
agency or other forum relating to or against any Loan Property (or ENBHC or any
of the ENBHC Subsidiaries in respect of such Loan Property) (x) relating to
alleged noncompliance (including by any predecessor) with, or liability under,
any Environmental Law or (y) relating to the presence of or release into the
environment of any Materials of Environmental Concern, whether or not occurring
at or on a site owned, leased or operated by a Loan Property;
(D) To ENBHC's Knowledge, the properties currently owned or
operated by ENBHC or any ENBHC Subsidiary (including, without limitation, soil,
groundwater or surface water on, under or adjacent to the properties, and
buildings thereon) are not
29
contaminated with and do not otherwise contain any Materials of Environmental
Concern other than as permitted under applicable Environmental Law;
(E) Neither ENBHC nor any ENBHC Subsidiary has received 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 ENBHC's Knowledge, there are no underground storage
tanks on, in or under any properties owned or operated by ENBHC or any of the
ENBHC Subsidiaries or any Participation Facility, and no underground storage
tanks have been closed or removed from any properties owned or operated by ENBHC
or any of the ENBHC Subsidiaries or any Participation Facility; and
(G) To ENBHC's Knowledge, during the period of (s) ENBHC's or
any of the ENBHC Subsidiaries' ownership or operation of any of their respective
current properties or (t) ENBHC's or any of the ENBHC Subsidiaries'
participation in the management of any Participation Facility, there has been no
contamination by or release of Materials of Environmental Concerns in, on, under
or affecting such properties. To ENBHC's Knowledge, prior to the period of (x)
ENBHC's or any of the ENBHC Subsidiaries' ownership or operation of any of their
respective current properties or (y) ENBHC's or any of the ENBHC Subsidiaries'
participation in the management of any Participation Facility, there was no
contamination by or release of Materials of Environmental Concern in, on, under
or affecting such properties.
(H) Neither ENB nor any other ENBHC Subsidiary has conducted
any environmental studies during the past ten years with respect to any
properties owned or leased by it or any of its Subsidiaries, or with respect to
any Loan Property or any Participation Facility.
4.14.2. "Loan Property" means any property in which the applicable
party (or a Subsidiary of it) holds a security interest, and, where required by
the context, includes the owner or operator of such property, but only with
respect to such property. "Participation Facility" means any facility in which
the applicable party (or a Subsidiary of it) participates 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.
4.15. Loan Portfolio.
4.15.1. The allowance for loan losses reflected in ENBHC's audited
consolidated statement of financial condition at December 31, 2002 was, and the
allowance for loan losses shown on the balance sheets in ENBHC's Financial
Statements for periods ending after December 31, 2002 will be, adequate, as of
the dates thereof, under GAAP.
4.15.2. ENBHC DISCLOSURE SCHEDULE 4.15.2 sets forth a listing, as of
June 30, 2003, by account, of: (A) all loans (including loan participations) of
ENB or any other ENBHC Subsidiary that have been accelerated during the past
twelve months; (B) all loan commitments or lines of credit of ENB or any other
ENBHC Subsidiary which have been terminated by ENB or any other ENBHC Subsidiary
during the past twelve months by reason of
30
a default or adverse developments in the condition of the borrower or other
events or circumstances affecting the credit of the borrower; (C) all loans,
lines of credit and loan commitments as to which ENB or any other ENBHC
Subsidiary has given written notice of its intent to terminate during the past
twelve months; (D) with respect to all commercial loans (including commercial
real estate loans), all notification letters and other written communications
from ENB or any other ENBHC Subsidiary to any of their respective borrowers,
customers or other parties during the past twelve months wherein ENB or any
other ENBHC Subsidiary has requested or demanded that actions be taken to
correct existing defaults or facts or circumstances which may become defaults;
(E) each borrower, customer or other party which has notified ENB or any other
ENBHC Subsidiary during the past twelve months of, or has asserted against ENB
or any other ENBHC Subsidiary, in each case in writing, any "lender liability"
or similar claim, and, to the knowledge of ENB, each borrower, customer or other
party which has given ENB or any other ENBHC Subsidiary any oral notification
of, or orally asserted to or against ENB or any other ENBHC Subsidiary, any such
claim; (F) all loans, (1) that are contractually past due 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 "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 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 (G) all assets classified by ENB or any ENB Subsidiary
as real estate acquired through foreclosure or in lieu of foreclosure, including
in-substance foreclosures, and all other assets currently held that were
acquired through foreclosure or in lieu of foreclosure. DISCLOSURE SCHEDULE
4.15.2 may exclude any individual loan with a principal outstanding balance of
less than $20,000, provided that DISCLOSURE SCHEDULE 4.15.2 includes, for each
category described, the aggregate amount of individual loans with a principal
outstanding balance of less than $20,000 that have been excluded.
4.15.3. All loans receivable (including discounts) and accrued
interest entered on the books of ENBHC and the ENBHC Subsidiaries arose out of
bona fide arm's-length transactions, were made for good and valuable
consideration in the ordinary course of ENBHC's or the appropriate ENBHC
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 ENBHC DISCLOSURE
SCHEDULE 4.15.3. To the Knowledge of ENBHC, the loans, discounts and the accrued
interest reflected on the books of ENBHC and the ENBHC 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 ENBHC DISCLOSURE
SCHEDULE 4.15.3, all such loans are owned by ENBHC or the appropriate ENBHC
Subsidiary free and clear of any liens.
31
The notes and other evidences of indebtedness evidencing the loans
described above, and all pledges, mortgages, deeds of trust and other collateral
documents or security instruments relating thereto are, in all material
respects, valid, true and genuine, and what they purport to be.
4.16. Related Party Transactions.
Except as set forth in ENBHC DISCLOSURE SCHEDULE 4.16, neither ENBHC nor
any ENBHC Subsidiary is a party to any transaction (including any loan or other
credit accommodation) with any Affiliate of ENBHC or any ENBHC Affiliate. All
such transactions (a) were made in the ordinary course of business, (b) were
made on substantially the same terms, including interest rates and collateral,
as those prevailing at the time for comparable transactions with other Persons,
and (c) did not involve more than the normal risk of collectability or present
other unfavorable features. No loan or credit accommodation to any Affiliate of
ENBHC or any ENBHC Subsidiary is presently in default or, during the three year
period prior to the date of this Agreement, has been in default or has been
restructured, modified or extended. Neither ENBHC nor any ENBHC Subsidiary has
been notified that principal and interest with respect to any such loan or other
credit accommodation will not be paid when due or that the loan grade
classification accorded such loan or credit accommodation by ENBHC is
inappropriate.
4.17. Schedule of Termination Benefits.
ENBHC DISCLOSURE SCHEDULE 4.17 includes a schedule of all termination
benefits and related payments that would be payable to the individuals
identified thereon, under any and all employment agreements, special termination
agreements, change in control agreements, supplemental executive retirement
plans, deferred bonus plans, deferred compensation plans, salary continuation
plans, or any compensation arrangement, or other pension benefit or welfare
benefit plan maintained by ENBHC or any ENBHC Subsidiary for the benefit of
officers or directors of ENBHC or any ENBHC Subsidiary (the "Benefits
Schedule"), assuming their employment or service is terminated as of December
31, 2003 and the Closing Date occurs on such date and based on the other
assumptions specified in such schedule. No other individuals are entitled to
benefits under any such plans.
4.18. Deposits.
Except as set forth in ENBHC DISCLOSURE SCHEDULE 4.18, none of the
deposits of ENBHC or any ENBHC Subsidiary is a "brokered deposit" as defined in
12 CFR Section 337.6(a)(2).
4.19. Antitakeover Provisions Inapplicable.
The transactions contemplated by this Agreement are not subject to the
requirements of any "moratorium," "control share," "fair price," "affiliate
transactions," "business combination" or other antitakeover laws and regulations
of any state, including the provisions of the NYBCL ("Takeover Laws") applicable
to ENBHC or any ENBHC Subsidiary. The affirmative vote of the holders of
two-thirds of the issued and outstanding shares of ENBHC Common Stock is
required to approve this Agreement under ENBHC's certificate of incorporation
and the NYBCL.
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4.20. Registration Obligations.
Neither ENBHC nor any ENBHC Subsidiary is under any obligation, contingent
or otherwise, which will survive the Effective Time by reason of any agreement
to register any transaction involving any of its securities under the Securities
Act.
4.21. Risk Management Instruments.
All material interest rate swaps, caps, floors, option agreements, futures
and forward contracts and other similar risk management arrangements, whether
entered into for ENBHC's own account, or for the account of one or more of
ENBHC's Subsidiaries or their customers (all of which are set forth in ENBHC
DISCLOSURE SCHEDULE 4.21), were entered into in accordance with commercially
reasonable business practices and in all material respects in compliance with
all applicable laws, rules, regulations and regulatory policies, and to the
Knowledge of ENBHC and each ENBHC Subsidiary, with counterparties believed to be
financially responsible at the time; and to ENBHC's and ENBHC Subsidiary's
Knowledge each of them constitutes the valid and legally binding obligation of
ENBHC or one of its Subsidiaries, enforceable in accordance with its terms
(except as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer and similar laws of general
applicability relating to or affecting creditors' rights or by general equity
principles), and is in full force and effect. Neither ENBHC nor any ENBHC
Subsidiary, nor to the Knowledge of ENBHC any other party thereto, is in breach
of any of its obligations under any such agreement or arrangement in any
material respect.
4.22. Fairness Opinion.
The Board of Directors of ENBHC has received an opinion from Endicott
Financial Advisors, LLC 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 ENBHC pursuant to this
Agreement is fair to such shareholders from a financial point of view. Such
opinion has not been amended or rescinded as of the date of this Agreement.
4.23. Trust Accounts.
Neither ENBHC, ENB nor any ENBHC Subsidiary conducts any trust business.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF PROVIDENT BANCORP
Provident Bancorp, New Provident Bancorp, the Mutual Company and Provident
Bank represent and warrant to ENBHC and ENB 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 PROVIDENT BANCORP
DISCLOSURE SCHEDULE delivered by Provident Bancorp to ENBHC on the date hereof.
Provident Bancorp has made a good faith effort to ensure that the disclosure on
each schedule of the PROVIDENT BANCORP DISCLOSURE SCHEDULE corresponds to the
section referenced herein. However, for purposes of the PROVIDENT BANCORP
33
DISCLOSURE SCHEDULE, any item disclosed on any schedule therein is deemed to be
fully disclosed with respect to all schedules under which such item may be
relevant as and to the extent that is reasonably clear on the face of such
schedule that such item applies to such other schedule. References to the
Knowledge of Provident Bancorp shall include the Knowledge of the Mutual
Company, New Provident Bancorp and Provident Bank.
5.1. Organization.
5.1.1. Provident Bancorp is a corporation duly organized, validly
existing and in good standing under federal law, and is duly registered as a
savings and loan holding company under the HOLA. New Provident Bancorp is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware, and upon completion of the Conversion, New Provident
Bancorp will be duly registered as a savings and loan holding company under the
HOLA. Each of Mutual Company and Provident Bancorp has full corporate power and
authority to carry on its business as now conducted and is duly licensed or
qualified to do business in the states of the United States and foreign
jurisdictions where 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 the Mutual Company or
Provident Bancorp.
5.1.2. Provident Bank is a savings association organized, validly
existing and in good standing under federal law. The deposits of Provident Bank
are insured by the FDIC to the fullest extent permitted by law, and all premiums
and assessments required to be paid in connection therewith have been paid when
due.
5.1.3. Provident Bank is a member in good standing of the FHLB and
owns the requisite amount of stock therein.
5.1.4. Provident Municipal Bank is a commercial bank organized,
validly existing and in good standing under the laws of the State of New York.
The deposits of Provident Municipal Bank are insured by the FDIC to the fullest
extent permitted by law, and all premiums and assessments required to be paid in
connection therewith have been paid when due.
5.1.5. The respective minute books of Mutual Company, Provident
Bancorp and each Provident Bancorp Subsidiary accurately records, in all
material respects, all material corporate actions of their respective
shareholders and boards of directors (including committees).
5.1.6. Prior to the date of this Agreement, Provident Bancorp has
made available to ENBHC true and correct copies of the articles or certificate
of incorporation and bylaws of New Provident Bancorp, Provident Bancorp and
Provident Bank.
5.2. Capitalization.
5.2.1. The authorized capital stock of Provident Bancorp consists of
20,000,000 shares of common stock, $0.10 par value, of which 7,959,260 shares
are outstanding, validly issued, fully paid and nonassessable and free of
preemptive rights, and 10,000,000 shares of preferred stock, $0.10 par value
("Provident Bancorp Preferred Stock"), none of which are outstanding. There are
320,740 shares of Provident Bancorp Common Stock held by Provident
34
Bancorp as treasury stock. Neither Provident Bancorp, New Provident Bancorp nor
any Provident Bancorp Subsidiary has or is bound by any Rights of any character
relating to the purchase, sale or issuance or voting of, or right to receive
dividends or other distributions on any shares of New Provident Bancorp and
Provident Bancorp Common Stock, or any other security of New Provident Bancorp
and Provident Bancorp or any securities representing the right to vote, purchase
or otherwise receive any shares of New Provident Bancorp or Provident Bancorp
Common Stock or any other security of New Provident Bancorp or Provident
Bancorp, other than shares issuable under the Provident Bancorp Option Plans,
and as to New Provident Bancorp other than subscription rights issuable in
connection with the Conversion.
5.2.2. Provident Bancorp owns all of the capital stock of Provident
Bank free and clear of any lien or encumbrance. Following completion of the
Conversion, New Provident Bancorp will own all of the capital stock of Provident
Bank free and clear of any lien or encumbrance. Provident Bank owns all of the
capital stock of Provident Municipal Bank free and clear of any lien or
encumbrance
5.2.3. To the Knowledge of Provident Bancorp, no Person or "group"
(as that term is used in Section 13(d)(3) of the Exchange Act), other than the
Mutual Company or as set forth in Provident Bancorp's proxy statement for the
annual meeting of shareholders following the year ended September 30, 2002, is
the beneficial owner (as defined in Section 13(d) of the Exchange Act) of 5% or
more of the outstanding shares of Provident Bancorp Common Stock.
5.3. Authority; No Violation.
5.3.1. New Provident Bancorp, the Mutual Company, Provident Bancorp
and Provident Bank each has full corporate power and authority to execute and
deliver this Agreement and to consummate the transactions contemplated hereby.
The execution and delivery of this Agreement by New Provident Bancorp, Mutual
Company, Provident Bancorp and Provident Bank and the completion by New
Provident Bancorp, Mutual Company, Provident Bancorp and Provident Bank of the
transactions contemplated hereby, up to and including the Merger, have been duly
and validly approved by the Board of Directors of New Provident Bancorp, the
Mutual Company, Provident Bancorp and Provident Bank, respectively, and, except
for approval of the shareholders of Provident Bancorp and the Depositors of
Provident Bank, no other corporate proceedings on the part of New Provident
Bancorp, Mutual Company, Provident Bancorp or Provident Bank are necessary to
complete the transactions contemplated hereby, up to and including the Merger.
This Agreement has been duly and validly executed and delivered by New Provident
Bancorp, the Mutual Company, Provident Bancorp and Provident Bank, and the Bank
Merger has been duly and validly approved by the Board of Directors of Provident
Bank, and by New Provident Bancorp and Provident Bancorp in their capacity as
sole shareholder of Provident Bank, and subject to approval by the shareholders
of Provident Bancorp and the Depositors and receipt of the required approvals of
Bank Regulators described in Section 8.4 hereof, constitutes the valid and
binding obligations of New Provident Bancorp, the Mutual Company, Provident
Bancorp and Provident Bank, enforceable against New Provident Bancorp, the
Mutual Company, Provident Bancorp and Provident Bank in accordance with its
terms, subject to applicable bankruptcy, insolvency and similar laws affecting
creditors' rights generally, and as to Provident Bank, the conservatorship or
receivership provisions of the FDIA, and subject, as to enforceability, to
general principles of equity.
35
5.3.2. (A) The execution and delivery of this Agreement by New
Provident Bancorp, Mutual Company, Provident Bancorp and Provident Bank, (B)
subject to receipt of approvals from the Bank Regulators referred to in Section
8.4 hereof, and compliance by New Provident Bancorp, Mutual Company, Provident
Bancorp and Provident Bank with any conditions contained therein, and subject to
the receipt of the approval of the Depositors and the shareholders of Provident
Bancorp, the consummation of the transactions contemplated hereby, and (C)
compliance by New Provident Bancorp, Mutual Company, Provident Bancorp and
Provident Bank with any of the terms or provisions hereof will not (i) conflict
with or result in a breach of any provision of the certificate of incorporation
or bylaws of New Provident Bancorp, Mutual Company, Provident Bancorp or any
Provident Bancorp Subsidiary or the charter and bylaws of Provident Bank; (ii)
violate any statute, code, ordinance, rule, regulation, judgment, order, writ,
decree or injunction applicable to Provident Bancorp, Mutual Company or any
Provident Bancorp Subsidiary or any of their respective properties or assets; or
(iii) violate, conflict with, result in a breach of any provisions of,
constitute a default (or an event which, with notice or lapse of time, or both,
would constitute a default), under, result in the termination of, accelerate the
performance required by, or result in a right of termination or acceleration or
the creation of any lien, security interest, charge or other encumbrance upon
any of the properties or assets of Provident Bancorp, Mutual Company, Provident
Bank or any Provident Bancorp Subsidiary under any of the terms, conditions or
provisions of any note, bond, mortgage, indenture, deed of trust, license,
lease, agreement or other investment or obligation to which any of them is a
party, or by which they or any of their respective properties or assets may be
bound or affected, except for such violations, conflicts, breaches or defaults
under clause (ii) or (iii) hereof which, either individually or in the
aggregate, will not have a Material Adverse Effect on Provident Bancorp taken as
a whole.
5.4. Consents.
Except for the consents, waivers, approvals, filings and registrations
from or with the Bank Regulators referred to in Section 8.4 hereof and
compliance with any conditions contained therein, and the requisite vote of the
shareholders of Provident Bancorp and the Depositors, no consents, waivers or
approvals of, or filings or registrations with, any Bank Regulator are
necessary, and, to the Knowledge of Provident Bancorp, no consents, waivers or
approvals of, or filings or registrations with, any other third parties are
necessary, in connection with (a) the execution and delivery of this Agreement
by New Provident Bancorp, the Mutual Company, Provident Bancorp and Provident
Bank, and (b) the completion by New Provident Bancorp, the Mutual Company,
Provident Bancorp and Provident Bank of the Merger and the Bank Merger.
Provident Bancorp has no reason to believe that (i) any required approvals from
a Bank Regulator or other required consents or approvals will not be received,
or that (ii) any public body or authority, the consent or approval of which is
not required or to which a filing is not required, will object to the completion
of the transactions contemplated by this Agreement.
5.5. Financial Statements.
5.5.1. Provident Bancorp has previously made available to ENBHC the
Provident Bancorp Statements. The Provident Bancorp Statements have been
prepared in accordance with GAAP, and (including the related notes where
applicable) fairly present in each case in all material respects (subject in the
case of the unaudited interim statements to normal
36
year-end adjustments) the consolidated financial position, results of operations
and cash flows of Provident Bancorp and the Provident Bancorp Subsidiaries on a
consolidated basis as of and for the respective periods ending on the dates
thereof, in accordance with GAAP during the periods involved, except as
indicated in the notes thereto, or in the case of unaudited statements, as
permitted by Form 10-Q.
5.5.2. At the date of each balance sheet included in the Provident
Bancorp Statements, Provident Bancorp did not have any liabilities, obligations
or loss contingencies of any nature (whether absolute, accrued, contingent or
otherwise) of a type required to be reflected in such Provident Bancorp
Statements or in the footnotes thereto which are not fully reflected or reserved
against therein or fully disclosed in a footnote thereto, except for
liabilities, obligations and loss contingencies which are not material
individually or in the aggregate or which are incurred in the ordinary course of
business, consistent with past practice, and except for liabilities, obligations
and loss contingencies which are within the subject matter of a specific
representation and warranty herein and subject, in the case of any unaudited
statements, to normal, recurring audit adjustments and the absence of footnotes.
5.6. Taxes.
Provident Bancorp and the Provident Bancorp Subsidiaries are members of
the same affiliated group within the meaning of Code Section 1505(a). Provident
Bancorp or the appropriate Provident Bancorp Subsidiary has duly filed all
federal, state and material local tax returns required to be filed by or with
respect to Provident Bancorp and each Provident Bancorp Subsidiary on or prior
to the Closing Date (all such returns, to the Knowledge of Provident Bancorp,
being accurate and correct in all material respects) and has duly paid or made
provisions for the payment of all material federal, state and local taxes which
(i) have been incurred by Provident Bancorp or the appropriate Provident Bancorp
Subsidiary, (ii) are due or claimed to be due from Provident Bancorp and any
Provident Bancorp Subsidiary by any taxing authority, or (iii) are due pursuant
to any written tax sharing agreement, in each case on or prior to the Closing
Date, other than taxes or other charges which (x) are not delinquent, (y) are
being contested in good faith, or (z) have not yet been fully determined. As of
the date of this Agreement, Provident Bancorp has received no notice of, and to
the Knowledge of Provident Bancorp, there is no audit examination, deficiency
assessment, tax investigation or refund litigation with respect to any taxes of
Provident Bancorp or any of its Subsidiaries, and no claim has been made by any
authority in a jurisdiction where Provident Bancorp or any of its Subsidiaries
do not file tax returns that Provident Bancorp or any such Subsidiary is subject
to taxation in that jurisdiction. Except as set forth in PROVIDENT BANCORP
DISCLOSURE SCHEDULE 5.6, Provident Bancorp and its Subsidiaries have not
executed an extension or waiver of any statute of limitations on the assessment
or collection of any material tax due that is currently in effect. Provident
Bancorp and each of its Subsidiaries has withheld and paid all material taxes
required to have been withheld and paid in connection with amounts paid or owing
to any employee, independent contractor, creditor, shareholder or other third
party, and New Provident Bancorp and Provident Bancorp and each of its
Subsidiaries, to the Knowledge of Provident Bancorp, has timely complied with
all applicable information reporting requirements under Part III, Subchapter A
of Chapter 61 of the Code and similar applicable state and local information
reporting requirements.
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5.7. No Material Adverse Effect.
Provident Bancorp, taken as a whole, has not suffered any Material Adverse
Effect since September 30, 2002, and no event has occurred or circumstance
arisen since that date which, in the aggregate, has had or is reasonably likely
to have a Material Adverse Effect on Provident Bancorp and the Provident Bancorp
Subsidiaries, taken as a whole.
5.8. Ownership of Property; Insurance Coverage.
5.8.1. Provident Bancorp and each Provident Bancorp Subsidiary has
good and, as to real property, marketable title to all material assets and
properties owned by Provident Bancorp or each Provident Bancorp Subsidiary in
the conduct of their businesses, whether such assets and properties are real or
personal, tangible or intangible, including assets and property reflected in the
balance sheets contained in the Provident Bancorp Statements or acquired
subsequent thereto (except to the extent that such assets and properties have
been disposed of in the ordinary course of business, since the date of such
balance sheets), subject to no material encumbrances, liens, mortgages, security
interests or pledges, except (i) those items which secure liabilities for public
or statutory obligations or any discount with, borrowing from or other
obligations to FHLB, inter-bank credit facilities, or any transaction by a
Provident Bancorp Subsidiary acting in a fiduciary capacity, and (ii) statutory
liens for amounts not yet delinquent or which are being contested in good faith.
Provident Bancorp and the Provident Bancorp Subsidiaries, as lessee, have the
right under valid and subsisting leases of real and personal properties used by
Provident Bancorp and its Subsidiaries in the conduct of their businesses to
occupy or use all such properties as presently occupied and used by each of
them.
5.8.2. Provident Bancorp and each Provident Bancorp Subsidiary
currently maintain insurance considered by Provident Bancorp to be reasonable
for their respective operations.
5.9. Legal Proceedings.
Except as disclosed in PROVIDENT BANCORP DISCLOSURE SCHEDULE 5.9, as of
the date of this Agreement, neither Provident Bancorp nor any Provident Bancorp
Subsidiary is a party to any, and there are no pending or, to the Knowledge of
Provident Bancorp, threatened legal, administrative, arbitration or other
proceedings, claims (whether asserted or unasserted), actions or governmental
investigations or inquiries of any nature (i) against New Provident Bancorp and
Provident Bancorp or any Provident Bancorp Subsidiary, or (ii) to which New
Provident Bancorp and Provident Bancorp or any Provident Bancorp Subsidiary's
assets are or may be subject, except for any proceedings, claims, actions,
investigations or inquiries which, if adversely determined, individually or in
the aggregate, could not be reasonably expected to have a Material Adverse
Effect on Provident Bancorp, taken as a whole.
5.10. Compliance With Applicable Law.
5.10.1. To the Knowledge of Provident Bancorp, each of Provident
Bancorp and each Provident Bancorp Subsidiary is in compliance in all material
respects with all applicable federal, state, local and foreign statutes, laws,
regulations, ordinances, rules, judgments, orders or decrees applicable to it,
its properties, assets and deposits, its business, and
38
its conduct of business and its relationship with its employees, including,
without limitation, the Equal Credit Opportunity Act, the Fair Housing Act, the
Community Reinvestment Act of 1977, the Home Mortgage Disclosure Act, and all
other applicable fair lending laws and other laws relating to discriminatory
business practices, and neither Provident Bancorp nor any Provident Bancorp
Subsidiary has received any written notice to the contrary.
5.10.2. Each of New Provident Bancorp and Provident Bancorp and each
Provident Bancorp Subsidiary has all material permits, licenses, authorizations,
orders and approvals of, and has made all filings, applications and
registrations with, all Bank Regulators that are required in order to permit it
to own or lease its properties and to conduct its business as presently
conducted; all such permits, licenses, certificates of authority, orders and
approvals are in full force and effect and, to the Knowledge of Provident
Bancorp, no suspension or cancellation of any such permit, license, certificate,
order or approval is threatened or will result from the consummation of the
transactions contemplated by this Agreement, subject to obtaining the approvals
set forth in Section 8.4.
5.10.3. For the period beginning October 1, 1998, neither New
Provident Bancorp, Provident Bancorp nor any Provident Bancorp Subsidiary has
received any written notification or, to the Knowledge of Provident Bancorp, any
other communication from any Bank Regulator (i) asserting that New Provident
Bancorp, Provident Bancorp or any Provident Bancorp Subsidiary is not in
material compliance with any of the statutes, regulations or ordinances which
such Bank Regulator enforces; (ii) threatening to revoke any license, franchise,
permit or governmental authorization which is material to Provident Bancorp;
(iii) requiring or threatening to require New Provident Bancorp, Provident
Bancorp or any Provident Bancorp Subsidiary, or indicating that New Provident
Bancorp, Provident Bancorp or any Provident Bancorp Subsidiary may be required,
to enter into a cease and desist order, agreement or memorandum of understanding
or any other agreement with any federal or state governmental agency or
authority which is charged with the supervision or regulation of banks or
engages in the insurance of bank deposits restricting or limiting, or purporting
to restrict or limit, in any material respect the operations of New Provident
Bancorp, Provident Bancorp or any Provident Bancorp Subsidiary, including
without limitation any restriction on the payment of dividends; or (iv)
directing, restricting or limiting, or purporting to direct, restrict or limit,
in any manner the operations of New Provident Bancorp, Provident Bancorp or any
Provident Bancorp Subsidiary, including without limitation any restriction on
the payment of dividends (any such notice, communication, memorandum, agreement
or order described in this sentence is hereinafter referred to as a "Regulatory
Agreement"). Neither New Provident Bancorp, Provident Bancorp nor any Provident
Bancorp Subsidiary has consented to or entered into any currently effective
Regulatory Agreement. The most recent regulatory rating given to Provident Bank
and each Bank Affiliate as to compliance with the Community Reinvestment Act CRA
is satisfactory or better.
5.11. Employee Benefit Plans.
5.11.1. PROVIDENT BANCORP DISCLOSURE SCHEDULE 5.11.1 includes a list
of all existing bonus, incentive, deferred compensation, pension, retirement,
profit-sharing, thrift, savings, employee stock ownership, stock bonus, stock
purchase, restricted stock, stock option, stock appreciation, phantom stock,
severance, welfare and fringe benefit plans,
39
employment, severance and change in control agreements and all other material
benefit practices, policies and arrangements maintained by Provident Bancorp or
any Provident Bancorp Subsidiary in which any employee or former employee,
consultant or former consultant or director or former director of Provident
Bancorp or any Provident Bancorp Subsidiary participates or to which any such
employee, consultant or director is a party or is otherwise entitled to receive
benefits (the "Provident Compensation and Benefit Plans"). Provident Bancorp has
made available to ENBHC true and correct copies of the Provident Compensation
and Benefit Plans.
5.11.2. To the Knowledge of Provident Bancorp and except as
disclosed in PROVIDENT BANCORP DISCLOSURE SCHEDULE 5.11.2, each Provident
Compensation and Benefit Plan has been operated and administered in all material
respects in accordance with its terms and with applicable law, including, but
not limited to, ERISA, the Code, the Securities Act, the Exchange Act, the Age
Discrimination in Employment Act, COBRA, the Health Insurance Portability and
Accountability Act and any regulations or rules promulgated thereunder, and all
material filings, disclosures and notices required by ERISA, the Code, the
Securities Act, the Exchange Act, the Age Discrimination in Employment Act and
any other applicable law have been timely made or any interest, fines, penalties
or other impositions for late filings have been paid in full. Each Provident
Compensation and Benefit Plan which is an "employee pension benefit plan" within
the meaning of Section 3(2) of ERISA (a "Pension Plan") and which is intended to
be qualified under Section 401(a) of the Code has received a favorable
determination letter from the IRS, and Provident Bancorp is not aware of any
circumstances which are reasonably likely to result in revocation of any such
favorable determination letter. There is no material pending or, to the
Knowledge of Provident Bancorp, threatened action, suit or claim relating to any
of the Provident Compensation and Benefit Plans (other than routine claims for
benefits). Neither Provident Bancorp nor any Provident Bancorp Subsidiary has
engaged in a transaction, or omitted to take any action, with respect to any
Provident Compensation and Benefit Plan that would reasonably be expected to
subject Provident Bancorp or any Provident Bancorp Subsidiary to an unpaid tax
or penalty imposed by either Section 4975 of the Code or Section 502 of ERISA.
5.11.3. No liability, other than (a) PBGC premiums arising in the
ordinary course of business, and (b) employer contributions required under the
terms of any Provident Compensation and Benefit Plan has been or is expected by
Provident Bancorp or any of its Subsidiaries to be incurred with respect to any
Provident Compensation and Benefit Plan which is a defined benefit plan subject
to Title IV of ERISA ("Provident Bancorp Defined Benefit Plan"), or with respect
to any "single-employer plan" (as defined in Section 4001(a) of ERISA) currently
or formerly maintained by Provident Bancorp or any entity which is considered
one employer with Provident Bancorp under Section 4001(b)(1) of ERISA or Section
414 of the Code (an "ERISA Affiliate") (such plan hereinafter referred to as an
"ERISA Affiliate Plan"). To the Knowledge of Provident Bancorp and any Provident
Bancorp Subsidiary, except as set forth in PROVIDENT BANCORP DISCLOSURE SCHEDULE
5.11.3, no Provident Bancorp Defined Benefit 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. Except as set forth in PROVIDENT BANCORP DISCLOSURE SCHEDULE 5.11.3, the
fair market value of the assets of each Provident Bancorp Defined Benefit Plan
exceeds the present value of the "benefit liabilities" (as defined in Section
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4001(a)(16) of ERISA) under such Provident Bancorp Defined Benefit Plan as of
the end of the most recent plan year with respect to the respective Provident
Bancorp 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 Provident Bancorp Defined Benefit Plan as of the date hereof; and no
notice of a "reportable event" (as defined in Section 4043 of ERISA) for which
the 30-day reporting requirement has not been waived has been required to be
filed for any Provident Bancorp Defined Benefit Plan within the 12-month period
ending on the date hereof. Neither Provident Bancorp nor any of its Subsidiaries
has provided, or is required to provide, security to any Provident Bancorp
Defined Benefit Plan or to any single-employer plan of an ERISA Affiliate
pursuant to Section 401(a)(29) of the Code or has taken any action, or omitted
to take any action, that has resulted, or would reasonably be expected to result
in the imposition of a lien under Section 412(n) of the Code or pursuant to
ERISA. Neither Provident Bancorp, its Subsidiaries, nor any ERISA Affiliate has
contributed to any "multiemployer plan," as defined in Section 3(37) of ERISA,
on or after January 1, 1998. To the Knowledge of Provident Bancorp, there is no
pending investigation or enforcement action by any Bank Regulator with respect
to any Provident Compensation and Benefit Plan or any ERISA Affiliate Plan.
5.11.4. All material contributions required to be made under the
terms of any Provident Compensation and Benefit Plan or ERISA Affiliate Plan
have been timely made, and all anticipated contributions and funding obligations
are accrued on Provident Bancorp's consolidated financial statements to the
extent required by GAAP. Provident Bancorp and its Subsidiaries have expensed
and accrued as a liability the present value of future benefits under each
applicable Provident Compensation and Benefit Plan for financial reporting
purposes to the extent required by GAAP.
5.11.5. With respect to each Provident Compensation and Benefit
Plan, if applicable, Provident Bancorp has provided or made available to ENBHC
copies of the: (A) trust instruments and insurance contracts; (B) two most
recent Forms 5500 filed with the IRS; (C) most recent actuarial report and
financial statement; (D) most recent summary plan description; (E) most recent
determination letter issued by the IRS; (F) any Form 5310 or Form 5330 filed
with the IRS within the last two years; and (G) most recent nondiscrimination
tests performed under ERISA and the Code (including 401(k) and 401(m) tests).
5.12. Environmental Matters.
5.12.1. To the Knowledge of Provident Bancorp, neither the conduct
nor operation of their business nor any condition of any property currently or
previously owned or operated by any of them (including, without limitation, in a
fiduciary or agency capacity), or on which any of them holds a lien, results or
resulted in a violation of any Environmental Laws that is reasonably likely to
impose a material liability (including a material remediation obligation) upon
Provident Bancorp or any of Provident Bancorp Subsidiary. To the Knowledge of
Provident Bancorp, no condition has existed or event has occurred with respect
to any of them or any such property that, with notice or the passage of time, or
both, is reasonably likely to result in any material liability to Provident
Bancorp or any Provident Bancorp Subsidiary by reason of any Environmental Laws.
Neither Provident Bancorp nor any Provident Bancorp Subsidiary has received any
written notice from any Person that Provident Bancorp or any Provident Bancorp
Subsidiary or the operation or condition of any property ever owned, operated,
or held as
41
collateral or in a fiduciary capacity by any of them are currently in violation
of or otherwise are alleged to have financial exposure under any Environmental
Laws or relating to Materials of Environmental Concern (including, but not
limited to, responsibility (or potential responsibility) for the cleanup or
other remediation of any Materials of Environmental Concern at, on, beneath, or
originating from any such property) for which a material liability is reasonably
likely to be imposed upon Provident Bancorp or any Provident Bancorp Subsidiary.
5.12.2. There is no suit, claim, action, demand, executive or
administrative order, directive, investigation or proceeding pending or, to the
Provident Bancorp's Knowledge, threatened, before any court, governmental agency
or other forum against Provident Bancorp or any New Provident Bancorp Subsidiary
(x) for alleged noncompliance (including by any predecessor) with, or liability
under, any Environmental Law or (y) relating to the presence of or release
(defined herein) into the environment of any Materials of Environmental Concern
(as defined herein), whether or not occurring at or on a site owned, leased or
operated by any of the Provident Bancorp.
5.13. Loan Portfolio.
5.13.1. The allowance for possible losses reflected in Provident
Bancorp's audited statement of condition at September 30, 2002 was, and the
allowance for possible losses shown on the balance sheets in Provident Bancorp's
Securities Documents for periods ending after September 30, 2002 will be,
adequate, as of the dates thereof, under GAAP.
5.13.2. PROVIDENT BANCORP DISCLOSURE SCHEDULE 5.13 sets forth a
listing, as of May 31, 2003, all loans of Provident Bancorp and any Provident
Bancorp Subsidiary, (1) that are contractually past due 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 "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 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 all assets classified by of Provident Bancorp and any
Provident Bancorp Subsidiary as real estate acquired through foreclosure or in
lieu of foreclosure, including in-substance foreclosures, and all other assets
currently held that were acquired through foreclosure or in lieu of foreclosure.
DISCLOSURE SCHEDULE 5.13 may exclude any individual loan with a principal
outstanding balance of less than $50,000.
5.13.3. All loans receivable (including discounts) and accrued
interest entered on the books of Provident Bancorp and the each Provident
Bancorp Subsidiary arose out of bona fide arm's-length transactions, were made
for good and valuable consideration in the ordinary course of 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.
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5.13.4. The notes and other evidences of indebtedness evidencing the
loans described above, and all pledges, mortgages, deeds of trust and other
collateral documents or security instruments relating thereto are, in all
material respects, valid, true and genuine, and what they purport to be.
5.14. Securities Documents.
Provident Bancorp has made available to ENBHC copies of its (i) annual
reports on Form 10-K for the years ended September 30, 2002 and 2001, (ii)
quarterly report on Form 10-Q for the quarters ended December 31, 2002 and March
31, 2003 and (iii) proxy materials used or for use in connection with its
meetings of shareholders held in 2003 and 2002. Such reports and such proxy
materials complied, at the time filed with the SEC, in all material respects,
with the Securities Laws.
5.15. Deposits.
None of the deposits of any Provident Bancorp Subsidiary is a "brokered
deposit" as defined in 12 CFR Section 337.6(a)(2).
5.16. Antitakeover Provisions Inapplicable.
The transactions contemplated by this Agreement are not subject to the
requirements of any "moratorium," "control share," "fair price," "affiliate
transactions," "business combination" or other antitakeover laws and regulations
of any state, including the provisions of Section 203 of the DGCL applicable to
New Provident Bancorp or any New Provident Bancorp and Provident Bancorp
Subsidiary. The affirmative vote of a majority of the issued and outstanding
shares of Provident Bancorp Common Stock is required to approve the Merger (it
being understood that the affirmative vote of at least two-thirds of the issued
and outstanding shares of Provident Bancorp Common Stock is required to approve
the Conversion and the transactions incident thereto).
5.17. Risk Management Instruments.
All material interest rate swaps, caps, floors, option agreements, futures
and forward contracts and other similar risk management arrangements, whether
entered into for Provident Bancorp's own account, or for the account of one or
more of Provident Bancorp's Subsidiaries or their customers, were entered into
in accordance with prudent business practices and in all material respects in
compliance with all applicable laws, rules, regulations and regulatory policies,
and to the Knowledge of Provident Bancorp, with counterparties believed to be
financially responsible at the time; and each of them constitutes the valid and
legally binding obligation of Provident Bancorp or one of its Subsidiaries,
enforceable in accordance with its terms (except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium,
fraudulent transfer and similar laws of general applicability relating to or
affecting creditors' rights or by general equity principles), and is in full
force and effect. Neither Provident Bancorp nor any of its Subsidiaries, nor to
the Knowledge of Provident Bancorp any other party thereto, is in breach of any
of its obligations under any such agreement or arrangement in any material
respect.
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5.18. Brokers, Finders and Financial Advisors.
Neither Provident Bancorp nor any Provident Bancorp Subsidiary, nor any of
their respective officers, directors, employees or agents, has employed any
broker, finder or financial advisor in connection with the transactions
contemplated by this Agreement, or incurred any liability or commitment for any
fees or commissions to any such person in connection with the transactions
contemplated by this Agreement, except as set forth in PROVIDENT BANCORP
DISCLOSURE SCHEDULE Section 5.18.
ARTICLE VI
COVENANTS OF ENBHC
6.1. Conduct of Business.
6.1.1. Affirmative Covenants. During the period from the date of
this Agreement to the Effective Time, except with the written consent of
Provident Bancorp (which consent will not be unreasonably withheld, conditioned
or delayed, provided that Provident Bancorp shall be deemed to have consented to
any written request as to which it has not responded within ten (10) business
days of receiving the written request), ENBHC will: operate its business, and it
will cause each of the ENBHC Subsidiaries to operate its business, only in the
usual, regular and ordinary course of business; use reasonable efforts to
preserve intact its business organization and assets and maintain its rights and
franchises; and voluntarily take no action which would (i) adversely affect the
ability of ENBHC, or to ENBHC's knowledge, Provident Bancorp to obtain any
necessary approvals of governmental authorities required for the transactions
contemplated hereby or materially 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.
6.1.2. Negative Covenants. ENBHC agrees that from the date of this
Agreement to the Effective Time, except as otherwise specifically permitted or
required by this Agreement, or consented to by Provident Bancorp in writing
(which consent shall not be unreasonably withheld, conditioned or delayed,
provided that Provident Bancorp shall be deemed to have consented to any written
request as to which it has not responded within ten business days of receiving
the written request), ENBHC and ENB will not, and will cause each of the ENBHC
Subsidiaries not to:
(A) change or waive any provision of its Certificate of
Incorporation, Charter or Bylaws, except as required by law;
(B) change the number of authorized or issued shares of its
capital stock, issue any shares that are held as "treasury shares" as of the
date of this Agreement, or issue or grant any Right or agreement of any
character relating to its authorized or issued capital stock or any securities
convertible into shares of such stock, or split, combine or reclassify any
shares of capital stock, or declare, set aside or pay any dividend or other
distribution in respect of capital stock, or redeem or otherwise acquire any
shares of capital stock, except that (A) ENBHC may continue to pay its regular
quarterly cash dividend per share and may pay an annual special dividend, in
each case consistent, as to amount (no greater) and timing, with dividends paid
in
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calendar 2002, and with payment and record dates consistent with past practice
(provided the declaration of the last quarterly dividend by ENBHC prior to the
Effective Time and the payment thereof shall be coordinated with Provident
Bancorp so that holders of ENBHC Common Stock do not receive dividends on both
ENBHC Common Stock and New Provident Bancorp Common Stock received in the Merger
in respect of such quarter or fail to receive a dividend on at least one of the
ENBHC Common Stock or New Provident Bancorp Common Stock received in the Merger
in respect of such quarter); and (B) ENB may pay dividends to ENBHC in amounts
sufficient to enable ENBHC to pay dividends on its common stock as permitted by
this Agreement;
(C) enter into, amend in any material respect or terminate any
contract or agreement (including without limitation any settlement agreement
with respect to litigation) except in the ordinary course of business;
(D) make application for the opening or closing of any, or
open or close any, branch or automated banking facility;
(E) grant or agree to pay any bonus, severance or termination
to, or enter into, renew or amend any employment agreement, severance agreement
and/or supplemental executive agreement with, or increase in any manner the
compensation or fringe benefits of, any of its directors, officers or employees,
except (i) as may be required pursuant to commitments existing on the date
hereof and set forth on ENBHC DISCLOSURE SCHEDULE 4.8.1 and 4.12.1 or (ii) as to
non-executive employees, merit pay increases or bonuses consistent with past
practice; and (iii) the payment of bonuses with respect to the calendar year
ending December 31, 2003 (and if the Effective Time is after March 31, 2004,
pro-rata bonuses for the portion of the calendar year 2004 that precedes the
Effective Time) consistent with past practice as to amounts and positions
covered, the expenses of which have been and will continue to be accrued in
accordance with GAAP, provided that certain individuals will be paid their
bonuses for the year ending December 31, 2003 in December 2003 if requested by
Provident Bancorp, (iv) ENB may hire at-will employees to fill vacancies that
may from time to time arise in the ordinary course of business. In addition,
ENBHC may agree to pay employees of ENBHC or ENB, who are identified by ENBHC
and agreed to by Provident Bancorp, a retention bonus in an individual amount to
be agreed to by ENBHC and Provident Bancorp and in an aggregate amount as to all
retention bonuses not in excess of $100,000. A retention bonus would be paid in
the event that the agreed upon employee remains in the employ of ENBHC or ENB
through the Effective Time and as an employee of Provident Bank for a period not
to exceed 90 days thereafter (or is terminated without cause prior to such date
but after the Effective Time);
(F) enter into or, except as may be required by law,
materially modify any pension, retirement, stock option, stock purchase, stock
appreciation right, stock grant, savings, profit sharing, deferred compensation,
supplemental retirement, consulting, bonus, group insurance or other employee
benefit, incentive or welfare contract, plan or arrangement, or any trust
agreement related thereto, in respect of any of its directors, officers or
employees; or make any contributions to any defined contribution or defined
benefit plan not in the ordinary course of business consistent with past
practice;
45
(G) merge or consolidate ENBHC or any ENBHC Subsidiary with
any other corporation; sell or lease all or any substantial portion of the
assets or business of ENBHC or any ENBHC Subsidiary; make any acquisition of all
or any substantial portion of the business or assets of any other person, firm,
association, corporation or business organization other than in connection with
foreclosures, settlements in lieu of foreclosure, troubled loan or debt
restructuring, or the collection of any loan or credit arrangement between
ENBHC, or any ENBHC Subsidiary, and any other person; enter into a purchase and
assumption transaction with respect to deposits and liabilities; permit the
revocation or surrender by any ENBHC Subsidiary of its certificate of authority
to maintain, or file an application for the relocation of, any existing branch
office;
(H) sell or otherwise dispose of the capital stock of ENBHC or
sell or otherwise dispose of any asset of ENBHC or of any ENBHC Subsidiary other
than in the ordinary course of business consistent with past practice; subject
any asset of ENBHC or of any ENBHC Subsidiary to a lien, pledge, security
interest or other encumbrance (other than in connection with deposits,
repurchase agreements, bankers acceptances, "treasury tax and loan" accounts
established in the ordinary course of business and transactions in "federal
funds" and the satisfaction of legal requirements in the exercise of trust
powers) other than in the ordinary course of business consistent with past
practice; incur any indebtedness for borrowed money (or guarantee any
indebtedness for borrowed money), except in the ordinary course of business
consistent with past practice;
(I) take any action which would result in any of the
representations and warranties of ENBHC set forth in this Agreement becoming
untrue as of any date after the date hereof or in any of the conditions set
forth in Article IX hereof not being satisfied, except in each case as may be
required by applicable law or regulation or by any Bank Regulators;
(J) change any method, practice or principle of accounting,
except as may be required from time to time by GAAP (without regard to any
optional early adoption date) or any Bank Regulator responsible for regulating
ENBHC or ENB;
(K) waive, release, grant or transfer any material rights of
value or modify or change in any material respect any existing material
agreement or indebtedness to which ENBHC or any ENBHC Subsidiary is a party,
other than in the ordinary course of business, consistent with past practice;
(L) purchase any equity securities, or purchase any security
for its investment portfolio inconsistent with ENBHC's or any ENBHC Subsidiary's
current investment policy, or otherwise alter, in any material respect, the mix,
maturity, credit or interest rate risk profile of its portfolio of investment
securities or its portfolio of mortgage-backed securities;
(M) purchase any security for its investment portfolio other
than (i) a security issued by the United States Government, any agency of the
United States, or any United States Government-sponsored agency ("Government
Securities"), with a purchase price equal to or less than 101% of its face
value, and provided further: with respect to fixed rate Government Securities,
those with a remaining non-amortizing term to maturity of not more than five (5)
years, or a remaining self-amortizing term to maturity of not more than ten (10)
years; and with
46
respect to adjustable rate Government Securities, those with a remaining
non-amortizing term to maturity of not more than five (5) years, or a remaining
self-amortizing term to maturity of not more than thirty (30) years, and which
permit annual rate adjustments of at least 2% and lifetime rate adjustments of
at least 10% or (ii) any security up to $1,000,000 issued by a New York State
municipality, school district or fire district and representing its general
obligation. Within fifteen days of the end of each month, ENB will provide a
written report to Provident Bank detailing all purchases of securities during
the prior month;
(N) except for commitments issued prior to the date of this
Agreement which have not yet expired and which have been disclosed on the ENBHC
DISCLOSURE SCHEDULE 6.1.2(N), and the renewal of existing lines of credit, make
any new loan or other credit facility commitment (including without limitation,
loan participations, lines of credit and letters of credit) to any borrower or
group of affiliated borrowers in excess of $500,000 in the aggregate for
unsecured loans and $1,500,000 in the aggregate for secured loans. In addition,
the following require the prior consent of Provident Bancorp: a residential loan
of $250,000 or greater; an unsecured loan of $250,000 or greater; a secured
commercial business loan of $350,000 or greater; and a commercial real estate
loan of $1,000,000 or greater;
(O) except as set forth on the ENBHC DISCLOSURE SCHEDULE
6.1.2(O), enter into, renew, extend or modify any other transaction with any
Affiliate, other than deposit transactions and, with respect to renewals,
extensions or modifications, loan transactions in the ordinary course of
business (which shall not include entering into a new loan transaction with an
Affiliate);
(P) enter into any futures contract, option, interest rate
caps, interest rate floors, interest rate exchange agreement or other agreement
or take any other action for purposes of hedging the exposure of its
interest-earning assets and interest-bearing liabilities to changes in market
rates of interest;
(Q) except for the execution of this Agreement, and actions
taken or which will be taken in accordance with this Agreement and performance
thereunder, take any action that would give rise to a right of payment to any
individual under any employment agreement;
(R) make any change in policies in existence on the date of
this Agreement with regard to: the extension of credit, or the establishment of
reserves with respect to the possible loss thereon or the charge off of losses
incurred thereon; investments; asset/liability management; or other material
banking policies in any material respect except as may be required by changes in
applicable law or regulations or by a Bank Regulator;
(S) except for the execution of this Agreement, and the
transactions contemplated therein, take any action that would give rise to an
acceleration of the right to payment to any individual under any ENBHC Employee
Plan;
(T) except as set forth in ENBHC DISCLOSURE SCHEDULE 6.1.2(T),
make any capital expenditures in excess of $25,000 individually or $50,000 in
the
47
aggregate, other than pursuant to binding commitments existing on the date
hereof and other than expenditures necessary to maintain existing assets in good
repair;
(U) except as set forth in ENBHC DISCLOSURE SCHEDULE 6.1.2(U),
purchase or otherwise acquire, or sell or otherwise dispose of, any assets or
incur any liabilities other than in the ordinary course of business consistent
with past practices and policies;
(V) undertake or enter into any lease, contract or other
commitment for its account, other than in the normal course of providing credit
to customers as part of its banking business, involving a payment by ENBHC or
ENB of more than $15,000 annually, or containing any financial commitment
extending beyond 12 months from the date hereof; or
(W) agree to do any of the foregoing.
6.2. Current Information.
6.2.1 During the period from the date of this Agreement to the Effective
Time, ENBHC and ENB will cause one or more of its representatives to confer with
representatives of Provident Bancorp and report the general status of its
ongoing operations at such times as Provident Bancorp may reasonably request,
which shall include, but not be limited to, discussion of the possible
termination by ENBHC and ENB 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 ENBHC 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 ENBHC shall not be obligated to take any such action prior to
the Effective Time and, unless ENBHC otherwise agrees, no conversion shall take
place prior to the Effective Time. ENBHC will promptly notify Provident Bancorp
of any material change in the normal course of its business or in the operation
of its properties 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 ENBHC or any ENBHC Subsidiary.
6.2.2. ENB and Provident Bank shall meet on a regular basis to discuss and
plan for the conversion of ENB's data processing and related electronic
informational systems to those used by Provident Bank, which planning shall
include, but not be limited to, discussion of the possible termination by ENB 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 ENB 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 ENB shall not be obligated to take any such action prior
to the Effective Time and, unless ENB otherwise agrees, no conversion shall take
place prior to the Effective Time. In the event that ENB takes, at the request
of Provident Bank, any action relative to third parties to facilitate the
conversion that results in the imposition of any termination fees or charges,
Provident Bank shall indemnify ENB for any such fees and charges, and the costs
of reversing the conversion process, if for any reason the Merger is not
48
consummated for any reason other than a breach of this Agreement by ENBHC, or a
termination of this Agreement under Section 11.1.9 or 11.1.10.
6.2.3. ENB shall provide Provident Bank, within ten (10) business days of
the end of each calendar month, a written list of nonperforming assets (the term
"nonperforming assets," for purposes of this subsection, means (i) loans that
are "troubled debt restructuring" as defined in Statement of Financial
Accounting Standards No.15, "Accounting by Debtors and Creditors for Troubled
Debt Restructuring," (ii) loans on nonaccrual, (iii) real estate owned, (iv) all
loans ninety (90) days or more past due) as of the end of such month and (iv)
and impaired loans. On a bi-weekly basis, ENBHC shall provide Provident Bank
with a schedule of all loan approvals, which schedule shall indicate the loan
amount, loan type and other material features of the loan.
6.3. Access to Properties and Records.
Subject to Section 12.1 hereof, ENBHC and ENB shall permit Provident
Bancorp reasonable access upon reasonable notice to its properties and those of
the ENBHC Subsidiaries, and shall disclose and make available to Provident
Bancorp during normal business hours all of its books, papers and records
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 Provident Bancorp may have a reasonable
interest; provided, however, that ENBHC 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.
ENBHC shall provide and shall request its auditors to provide Provident Bancorp
with such historical financial information regarding it (and related audit
reports and consents) as Provident Bancorp may reasonably request for securities
disclosure purposes. Provident Bancorp shall use commercially reasonable efforts
to minimize any interference with ENBHC's regular business operations during any
such access to ENBHC's property, books and records. ENBHC and each ENBHC
Subsidiary shall permit Provident Bancorp, at its expense, to cause a "Phase I
environmental audit" and a "Phase II environmental audit" to be performed at any
physical location owned or occupied by ENBHC or any ENBHC Subsidiary.
6.4. Financial and Other Statements.
6.4.1. Promptly upon receipt thereof, ENBHC will furnish to
Provident Bancorp copies of each annual, interim or special audit of the books
of ENBHC and the ENBHC Subsidiaries made by its independent accountants and
copies of all internal control reports submitted to ENBHC by such accountants in
connection with each annual, interim or special audit of the books of ENBHC and
the ENBHC Subsidiaries made by such accountants.
6.4.2. As soon as reasonably available, but in no event later than
the date such documents are filed with the appropriate Bank Regulator, ENBHC
will deliver to Provident
49
Bancorp the ENBHC Regulatory Reports filed by it with the Bank Regulators. ENBHC
will furnish to Provident Bancorp copies of all documents, statements and
reports as it or any ENBHC Subsidiary shall send to its shareholders, the Bank
Regulators or any other regulatory authority, except as legally prohibited
thereby. Within 25 days after the end of each month, ENBHC will deliver to
Provident Bancorp a consolidated balance sheet and a consolidated statement of
operations, without related notes, for such month prepared in accordance with
current financial reporting practices.
6.4.3. ENBHC will advise Provident Bancorp promptly of the receipt
of any examination report of any Bank Regulator with respect to the condition or
activities of ENBHC or any of the ENBHC Subsidiaries.
6.4.4. With reasonable promptness, ENBHC will furnish to Provident
Bancorp such additional financial data as Provident Bancorp may reasonably
request, including without limitation, detailed monthly financial statements and
loan reports.
6.5. Maintenance of Insurance.
ENBHC and ENB shall maintain, and cause their respective Subsidiaries to
maintain, insurance in such amounts as are reasonable to cover such risks as are
customary in relation to the character and location of its properties and the
nature of its business, with such coverage and in such amounts not less than
that currently maintained by ENBHC and ENB and set forth in ENBHC DISCLOSURE
SCHEDULE 4.9.3.
6.6. Disclosure Supplements.
From time to time prior to the Effective Time, ENBHC and ENB will promptly
supplement or amend the ENBHC 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 ENBHC DISCLOSURE SCHEDULE or which is necessary
to correct any information in such ENBHC DISCLOSURE SCHEDULE which has been
rendered materially inaccurate thereby. No supplement or amendment to such ENBHC
DISCLOSURE SCHEDULE shall have any effect for the purpose of determining
satisfaction of the conditions set forth in Article IX.
6.7. Consents and Approvals of Third Parties.
ENBHC and ENB shall use all commercially reasonable efforts 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.
6.8. All Reasonable Efforts.
Subject to the terms and conditions herein provided, ENBHC and ENB agree
to use all commercially reasonable efforts 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. A voting agreement in the form
attached as Exhibit A to this Agreement shall be executed by each director
50
and executive officer of ENBHC and ENB as of the date of this Agreement, or no
later than 30 days following the execution of this Agreement.
6.9. Failure to Fulfill Conditions.
In the event that ENBHC determines that a condition to its obligation to
complete the Merger cannot be fulfilled and that it will not waive that
condition, it will promptly notify Provident Bancorp.
6.10. No Solicitation.
From and after the date hereof until the termination of this Agreement,
neither ENBHC, nor any ENBHC Subsidiary, nor any of their respective officers,
directors, employees, representatives, agents or affiliates (including, without
limitation, any investment banker, attorney or accountant retained by ENBHC or
any of its Subsidiaries), will, directly or indirectly, initiate, solicit or
knowingly encourage (including by way of furnishing non-public information or
assistance) any inquiries or the making of any proposal that constitutes, or may
reasonably be expected to lead to, any Acquisition Proposal (as defined below),
or enter into or maintain or continue discussions or negotiate with any person
or entity in furtherance of such inquiries or to obtain an Acquisition Proposal
or agree to or endorse any Acquisition Proposal, or authorize or permit any of
its officers, directors, or employees or any of its subsidiaries or any
investment banker, financial advisor, attorney, accountant or other
representative retained by any of its subsidiaries to take any such action, and
ENBHC shall notify Provident Bancorp orally (within one business day) and in
writing (as promptly as practicable) of all of the relevant details relating to
all inquiries and proposals which it or any of its Subsidiaries or any such
officer, director, employee, investment banker, financial advisor, attorney,
accountant or other representative may receive relating to any of such matters,
provided, however, that nothing contained in this Section 6.10 shall prohibit
the Board of Directors of ENBHC from furnishing information to, or entering into
discussions or negotiations with any person or entity that makes an unsolicited
written proposal to acquire ENBHC pursuant to a merger, consolidation, share
exchange, business combination, tender or exchange offer or other similar
transaction, if, and only to the extent that, (A) the Board of Directors of
ENBHC receives an opinion from its independent financial advisor (which may be
the financial advisor in this transaction) that such proposal may be or could be
superior to the Merger from a financial point-of-view to ENBHC's shareholders,
(B) the Board of Directors of ENBHC, after consultation with and after
considering the advice of independent legal counsel, determines in good faith
that the failure to furnish information to or enter into discussions with such
person may cause the Board of Directors of ENBHC to breach its fiduciary duties
to shareholders under applicable law (such proposal that satisfies (A) and (B)
being referred to herein as a "Superior Proposal"); (C) ENBHC promptly notifies
Provident Bancorp of such inquiries, proposals or offers received by, any such
information requested from, or any such discussions or negotiations sought to be
initiated or continued with ENBHC or any of its representatives indicating, in
connection with such notice, the name of such person and the material terms and
conditions of any inquiries, proposals or offers, and (D) the ENBHC Shareholders
Meeting has not occurred. For purposes of this Agreement, "Acquisition Proposal"
shall mean any proposal or offer as to any of the following (other than the
transactions contemplated hereunder) involving ENBHC or any of its subsidiaries:
(i) any merger, consolidation, share exchange, business combination, or other
similar transactions; (ii) any sale,
51
lease, exchange, mortgage, pledge, transfer or other disposition of 25% or more
of the assets of ENBHC, taken as a whole, in a single transaction or series of
transactions; (iii) any tender offer or exchange offer for 25% or more of the
outstanding shares of capital stock of ENBHC 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.
6.11. Reserves and Merger-Related Costs.
Subject to compliance with GAAP, on or before the Effective Time, ENBHC
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 ENBHC to those of Provident Bancorp (as such practices
and methods are to be applied to ENBHC from and after the Closing Date) and
Provident Bancorp's plans with respect to the conduct of the business of ENBHC
following the Merger and otherwise to reflect Merger-related expenses and costs
incurred by ENBHC, provided, however, that ENBHC shall not be required to take
such action unless Provident Bancorp agrees in writing that all conditions to
closing set forth in Article IX have been satisfied or waived (except for the
expiration of any applicable waiting periods) and that it is not aware of any
fact or circumstance that would prevent completion of the Merger; and provided
further that ENBHC shall not be required to take such action more than 30 days
prior to the Effective Time. Prior to the delivery by Provident Bancorp of the
writing referred to in the preceding sentence, ENBHC shall provide Provident
Bancorp a written statement, certified without personal liability by the chief
executive officer of ENBHC and dated the date of such writing, that the
representation made in Section 4.15.1 hereof is true as of such date 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 ENBHC or any ENBHC Subsidiary pursuant to this subsection, or any litigation
or regulatory proceeding arising out of any such accrual or reserve, shall
constitute or be deemed to be a breach or violation of any representation,
warranty, covenant, condition or other provision of this Agreement or to
constitute a termination event within the meaning of Section 11.1.2 hereof.
6.12. Board of Directors and Committee Meetings.
ENBHC and ENB shall permit a representative of Provident Bancorp to attend
any meeting of the Board of Directors of ENBHC and/or ENB or the Executive
Committees thereof as an observer (the "Observer"),provided that neither ENBHC
nor ENB shall be required to permit the Observer to remain present during any
confidential discussion of this Agreement and the transactions contemplated
hereby or any third party proposal to acquire control of ENBHC or ENB or during
any other matter that the respective Board of Directors has been advised of by
counsel that such attendance by the Observer may violate a confidentiality
obligation or fiduciary duty.
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ARTICLE VII
COVENANTS OF PROVIDENT BANCORP
7.1. Conduct of Business.
During the period from the date of this Agreement to the Effective Time,
except with the written consent of ENBHC, which consent will not be unreasonably
withheld, conditioned or delayed, each of the Mutual Company, New Provident
Bancorp, Provident Bancorp or Provident Bank will conduct its business in the
ordinary course consistent with past practices and will not take any action that
would: (i) adversely affect the ability of any party to obtain the approvals
from any Governmental Entity or the Bank Regulators required for the
transactions contemplated hereby or materially increase the period of time
necessary to obtain such approvals; (ii) adversely affect its ability to perform
its covenants and agreements under this Agreement; or (iii) result in the
representations and warranties contained in Article V of this Agreement not
being true and correct on the date of this Agreement or at any future date on or
prior to the Effective Time.
7.2. Current Information.
During the period from the date of this Agreement to the Effective Time,
Provident Bancorp will cause one or more of its representatives to confer with
representatives of ENBHC and report the general status of its ongoing
operations, including the progress of the Merger and Conversion and furnish
copies of such documents to ENBHC in connection therewith, at such times as
ENBHC may reasonably request. Provident Bancorp will promptly notify ENBHC, 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
Provident Bancorp and any Provident Bancorp Subsidiary.
7.3. Financial and Other Statements.
As soon as reasonably available, but in no event later than the date such
documents are filed with the SEC, Provident Bancorp will deliver to ENBHC the
Securities Documents filed by it with the SEC under the Securities Laws.
Provident Bancorp will furnish to ENBHC copies of all documents, statements and
reports as it or New Provident Bancorp file with the OTS or any other regulatory
authority with respect to the Merger and the Conversion.
7.4. Disclosure Supplements.
From time to time prior to the Effective Time, the Mutual Company, New
Provident Bancorp, Provident Bancorp and Provident Bank will promptly supplement
or amend the PROVIDENT BANCORP 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 PROVIDENT BANCORP DISCLOSURE
SCHEDULE or which is necessary to correct any information in such PROVIDENT
BANCORP DISCLOSURE SCHEDULE which has been rendered inaccurate thereby. No
supplement or amendment to such PROVIDENT BANCORP DISCLOSURE SCHEDULE shall have
any effect for the purpose of determining satisfaction of the conditions set
forth in Article IX.
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7.5. Consents and Approvals of Third Parties.
The Mutual Company, New Provident Bancorp, Provident Bancorp and Provident
Bank shall use all commercially reasonable efforts to obtain as soon as
practicable all consents and approvals of any other Persons, including the
Depositors and shareholders of Provident Bancorp necessary or desirable for the
consummation of the transactions contemplated by this Agreement, including the
Conversion.
7.6. All Reasonable Efforts.
Subject to the terms and conditions herein provided, the Mutual Company,
New Provident Bancorp, Provident Bancorp and Provident Bank agree to use all
commercially reasonable efforts 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, including the Conversion.
7.7. Failure to Fulfill Conditions.
In the event that the Mutual Company, New Provident Bancorp, Provident
Bancorp or Provident Bank determine that a condition to its obligation to
complete the Merger or Conversion cannot be fulfilled and that it will not waive
that condition, it will promptly notify ENBHC.
7.8. Employee Benefits.
7.8.1. Provident Bancorp will review all ENBHC Compensation and
Benefit Plans to determine whether to maintain, terminate or continue such
plans. All ENBHC Employees who become participants in a Provident Bancorp
Compensation and Benefit Plan shall, for purposes of determining eligibility for
and for any applicable vesting periods of such employee benefits only (and not
for pension benefit accrual purposes) be given credit for meeting eligibility
and vesting requirements in such plans for service as an employee of ENBHC or an
ENBHC Subsidiary or any predecessor thereto prior to the Effective Time, except
with respect to the Provident Bank ESOP.
7.8.2. New Provident Bancorp and/or Provident Bancorp shall assume
and honor in accordance with their terms and PROVIDENT BANCORP DISCLOSURE
SCHEDULE 7.8.2 all employment, severance (including the ENB Severance Plan) and
other compensation agreements, plans and arrangements existing prior to the
execution of this Agreement which are between ENBHC or any of its Subsidiaries
and any director, officer or employee thereof and which have been disclosed in
ENBHC DISCLOSURE SCHEDULE 5.11.1. ENBHC shall obtain from each of the
individuals named in ENBHC DISCLOSURE SCHEDULE 7.8.2 an agreement (a "Settlement
Agreement"), in a form acceptable to Provident Bancorp, to accept in full
settlement of his or her rights under employment and change in control
agreements or under the specified Compensation and Benefits Plans the amounts
and benefits determined under his or her Settlement Agreement. As to, and only
as to, each individual who enters into a Settlement Agreement, New Provident
Bancorp and/or Provident Bancorp acknowledges and agrees that (i) the Merger
constitutes a "Change of Control" or "Change in Control" for all purposes
pursuant to such agreements, plans and arrangements and (ii) in light of
54
New Provident Bancorp's and/or Provident Bancorp's plans relating to management
assignments and responsibilities with respect to the business of New Provident
Bancorp and/or Provident Bancorp from and after the Effective Time, each
director or officer or employee who is a party to, or is otherwise subject to,
any such individual agreement or individual arrangement will, upon consummation
of the Merger, be entitled to terminate employment thereunder and receive the
severance or other similar benefits that are provided thereunder in the event of
a termination of employment for "Good Reason", "involuntary termination",
constructive discharge, (including, but not limited to, demotion or reduction in
compensation) or other similar events. Any director or officer or employee of
ENBHC who is a party to a Settlement Agreement and who intends to terminate
employment as of the Effective Time, or who otherwise becomes entitled to
benefits thereunder, shall be entitled to receive the cash benefits payable
under such Settlement Agreement as a result of such deemed termination on the
date of the Closing, and New Provident Bancorp and/or Provident Bancorp agrees
to pay, if not already paid by ENBHC, to such person the amount provided for in
such Settlement Agreement, by wire transfer of immediately available funds to an
account designated by such employee in writing and delivered to Purchaser not
less than five (5) business days prior to the date of the Closing; provided,
however, that prior to payment, the employee executes and delivers to ENBHC an
instrument in form and substance reasonably satisfactory to New Provident
Bancorp and/or Provident Bancorp and ENBHC releasing New Provident Bancorp
and/or Provident Bancorp and its affiliates from any further liability for
monetary payments under such agreement. Except as expressly provided otherwise
in this Agreement or in PROVIDENT BANCORP DISCLOSURE SCHEDULE 7.8.2, ENBHC shall
not accelerate the payment of any amounts or benefits that are or may become
payable under this Agreement.
7.8.3. In the event of any termination or consolidation of any ENB
health, disability or life insurance plan with any Provident Bank health,
disability or life insurance plan, Provident Bank shall make available to
employees of ENB who continue employment with Provident Bank ("Continuing
Employees") and their dependents employer-provided health, disability or life
insurance coverage on the same basis as it provides such coverage to Provident
Bank employees. Unless a Continuing Employee affirmatively terminates coverage
under a ENB health, disability or life insurance plan prior to the time that
such Continuing Employee becomes eligible to participate in the Provident Bank
health, disability or life insurance plan, no coverage of any of the Continuing
Employees or their dependents shall terminate under any of the ENB health,
disability or life insurance plans prior to the time such Continuing Employees
and their dependents become eligible to participate in the health, disability or
life insurance plans, programs and benefits common to all employees of Provident
Bank and their dependents. A Continuing Employee's prior service with ENB or any
ENBHC Subsidiary shall also apply for purposes of satisfying any waiting
periods, actively-at-work requirements, and evidence of insurability
requirements. Continuing Employees who become covered under a Provident Bank
health plan shall be required to satisfy the deductible limitations of the
Provident Bank health plan for the plan year in which coverage commences,
without offset for deductibles satisfied under the ENB health plan, except to
the extent, ENB and/or the Continuing Employee shall provide substantiation in a
form satisfactory to Provident Bank, of the dollar amount of such deductibles
that have been satisfied for such Continuing Employees. In the event of any
termination of any ENB health plan, or consolidation of any ENB health plan with
any health plan of Provident Bank and/or any New Provident Bancorp Subsidiary,
the Health Insurance
55
Portability Accountability Act of 1996 ("HIPAA") will govern any coverage
limitations due to pre-existing conditions.
7.9. Directors and Officers Indemnification and Insurance.
7.9.1. New Provident Bancorp shall maintain, or shall cause
Provident Bank to maintain, in effect for three years following the Effective
Time, the current directors' and officers' liability insurance policies
maintained by ENBHC and the ENBHC Subsidiaries (provided, that New Provident
Bancorp may substitute therefore 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 New Provident Bancorp be required to expend pursuant to
this Section 7.9.1 more than 150% of the annual cost currently expended by ENBHC
with respect to such insurance. In connection with the foregoing, ENBHC agrees
in order for New Provident Bancorp to fulfill its agreement to provide directors
and officers liability insurance policies for three years to provide such
insurer or substitute insurer with such representations as such insurer may
request.
7.9.2. In addition to 7.9.1, for a period of six years after the
Effective Time, New Provident Bancorp and Provident Bancorp shall 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 ENBHC or a ENBHC Subsidiary (the "Indemnified Parties") against all
losses, claims, damages, costs, expenses (including attorney's fees),
liabilities or judgments or amounts that are paid in settlement (which
settlement shall require the prior written consent of New Provident Bancorp,
which consent shall not be unreasonably withheld, conditioned or delayed) 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 on
or arising in whole or in part out of the fact that such person is or was a
director, officer or employee of ENBHC or a ENBHC 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, New
Provident Bancorp's Certificate of Incorporation and Bylaws, and under ENBHC's
Certificate of Incorporation and Bylaws. New Provident Bancorp shall pay
expenses 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
such Indemnified Party shall be adjudicated or determined to be not entitled to
indemnification in the manner set forth below. Any Indemnified Party wishing to
claim indemnification under this Section 7.9.2 upon learning of any Claim, shall
notify New Provident Bancorp (but the failure so to notify New Provident Bancorp
shall not relieve it from any liability which it may have under this Section
7.9.2, except to the extent such failure materially prejudices New Provident
Bancorp) and shall deliver to New Provident Bancorp the undertaking referred to
in the previous sentence. In the event of any such Claim (whether arising before
or after the Effective Time) (1) New Provident Bancorp 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 New
Provident Bancorp shall not be liable to any Indemnified Party for any legal
expenses of
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other counsel or any other expenses subsequently incurred by any Indemnified
Party in connection with the defense thereof, except that if New Provident
Bancorp 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 New Provident Bancorp and the Indemnified Parties, the
Indemnified Parties may retain counsel reasonably satisfactory to them, and New
Provident Bancorp shall pay the reasonable fees and expenses of such counsel for
the Indemnified Parties, (2) except to the extent otherwise required due to
conflicts of interest, New Provident Bancorp shall be obligated pursuant to this
paragraph to pay for only one 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 law firm,
(3) New Provident Bancorp shall not be liable for any settlement effected
without its prior written consent (which consent shall not be unreasonably
withheld, conditioned or delayed), and (4) no Indemnified Party shall be
entitled to indemnification hereunder with respect to a matter as to which (x)
such Indemnified Party shall have been adjudicated in any proceeding not to have
acted in good faith and in a manner such Indemnified Party reasonably believed
to be in, or not opposed to, the best interests of ENBHC or any ENBHC
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 such Indemnified Party reasonably believed to
be in, or not opposed to, the best interests of ENBHC or any ENBHC Subsidiary.
The determination shall be made by a majority vote of a quorum consisting of the
Directors of New Provident Bancorp who are not involved in such proceeding.
7.9.3. In the event that either New Provident Bancorp or any of its
successors or assigns (i) consolidates with or merges into any other person and
shall not be the continuing or surviving bank or entity of such consolidation or
merger or (ii) transfers all or substantially all of its properties and assets
to any person, then, and in each such case, proper provision shall be made so
that the successors and assigns of New Provident Bancorp shall assume the
obligations set forth in this Section 7.9.
7.9.4. The obligations of New Provident Bancorp provided under this
Section 7.9 are intended to be enforceable against New Provident Bancorp
directly by the Indemnified Parties and shall be binding on all respective
successors and permitted assigns of New Provident Bancorp.
7.10. Stock Listing.
New Provident Bancorp agrees to list on the Stock Exchange (or such other
national securities exchange on which the shares of the New Provident Bancorp
Common Stock shall be listed as of the date of consummation of the Merger),
subject to official notice of issuance, the shares of New Provident Bancorp
Common Stock to be issued in the Merger.
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ARTICLE VIII
REGULATORY AND OTHER MATTERS
8.1. ENBHC and Provident Bancorp Shareholder Meetings.
8.1.1. ENBHC will (i) as promptly as practicable after the Merger
Registration Statement is declared effective by the SEC, take all steps
necessary to duly call, give notice of, convene and hold a meeting of its
shareholders (the "ENBHC Shareholders Meeting"), for the purpose of considering
this Agreement and the Merger, and for such other purposes as may be, in ENBHC's
reasonable judgment, necessary or desirable, (ii) subject to the next sentence,
have its Board of Directors recommend approval of this Agreement to the ENBHC
shareholders. The Board of Directors of ENBHC may fail to make such a
recommendation, or withdraw, modify or change any such recommendation only in
connection with a Superior Proposal, as set forth in Section 6.10 of this
Agreement, and only if such Board of Directors, after having consulted with and
considered the advice of outside counsel to such Board, has determined that the
making of such recommendation, or the failure so to withdraw, modify or change
its recommendation, may constitute a breach of the fiduciary duties of such
directors under applicable law; and (iii) cooperate and consult with Provident
Bancorp and New Provident Bancorp with respect to each of the foregoing matters.
The ENBHC Shareholders Meeting shall not be held until the Conversion
Registration Statement has been declared effective by the SEC.
8.1.2. Provident Bancorp will (i) as promptly as practicable after
the Merger Registration Statement is declared effective by the SEC, take all
steps necessary to duly call, give notice of, convene and hold a meeting of its
shareholders (the "Provident Bancorp Shareholders Meeting"), which shall not be
held until the requisite approvals from the Bank Regulators have been obtained
and the Conversion Registration Statement has been declared effective by the
SEC, for the purpose of approving the transactions contemplated by this
Agreement, and for such other purposes as may be, in Provident Bancorp's
reasonable judgment, necessary or desirable, (ii) subject to the fiduciary
responsibility of the Board of Directors of Provident Bancorp as advised by
counsel, recommend to its shareholders the approval of the aforementioned
matters to be submitted by it to its shareholders, and (iii) cooperate and
consult with ENBHC with respect to each of the foregoing matters.
8.2. Proxy Statement-Prospectus.
8.2.1. For the purposes (x) of registering New Provident Bancorp
Common Stock to be offered to holders of ENBHC Common Stock in connection with
the Merger with the SEC under the Securities Act and applicable state securities
laws and (y) of holding the ENBHC Shareholders Meeting and Provident Bancorp
Shareholders Meeting, New Provident Bancorp shall draft and prepare, and ENBHC
shall cooperate in the preparation of, the Merger Registration Statement,
including a combined proxy statement and prospectus or statements 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 ENBHC to the
ENBHC shareholders and by Provident Bancorp to the Provident Bancorp
shareholders, together with any and all amendments or supplements thereto, being
herein referred to as the "Proxy Statement-Prospectus"). New
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Provident Bancorp shall file the Merger Registration Statement, including the
Proxy Statement-Prospectus, with the SEC. Each of New Provident Bancorp and
ENBHC shall use their best efforts to have the Merger Registration Statement
declared effective under the Securities Act as promptly as practicable after
such filing, and each of ENBHC and New Provident Bancorp shall thereafter
promptly mail the Proxy Statement-Prospectus to its shareholders. New Provident
Bancorp 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 ENBHC shall furnish all information
concerning ENBHC and the holders of ENBHC Common Stock as may be reasonably
requested in connection with any such action.
8.2.2. ENBHC shall provide New Provident Bancorp with any
information concerning itself that Provident Bancorp may reasonably request in
connection with the drafting and preparation of the Proxy Statement-Prospectus,
and Provident Bancorp shall notify ENBHC promptly of the receipt of any comments
of the SEC with respect to the Proxy Statement-Prospectus and of any requests by
the SEC for any amendment or supplement thereto or for additional information
and shall provide to ENBHC promptly copies of all correspondence between New
Provident Bancorp, Provident Bancorp or any of their representatives and the
SEC. The information to be provided by ENBHC for inclusion in the Proxy
Statement-Prospectus will not, at the time the Proxy Statement-Prospectus is
mailed, contain any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein not misleading.
The information supplied, or to be supplied, by ENBHC for inclusion in the
Applications will, at the time such documents are filed with any Regulatory
Authority, be accurate in all material aspects. New Provident Bancorp and
Provident Bancorp shall give ENBHC and its counsel the opportunity to review and
comment on the Proxy Statement-Prospectus prior to its being filed with the SEC
and shall give ENBHC and its counsel the opportunity to review and comment on
all amendments and supplements to the 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 Provident Bancorp, New
Provident Bancorp and ENBHC 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 ENBHC Common Stock and Provident Bancorp Common Stock entitled to vote at the
ENBHC Shareholders Meeting and Provident Bancorp Shareholders Meeting,
respectively, referred to in Section 8.1 hereof at the earliest practicable
time.
8.2.3. ENBHC and Provident Bancorp shall promptly notify the other
party if at any time it becomes aware that the Proxy Statement-Prospectus or the
Merger Registration Statement contains any untrue statement of a material fact
or omits 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, ENBHC shall cooperate with
Provident Bancorp and New Provident Bancorp in the preparation of a supplement
or amendment to such Proxy Statement-Prospectus which corrects such misstatement
or omission, and New Provident Bancorp shall file an amended Merger Registration
Statement with the SEC, and each of ENBHC, Provident Bancorp and New Provident
Bancorp shall mail an amended Proxy Statement-Prospectus to ENBHC's and
Provident Bancorp's shareholders, respectively. ENBHC, on the one hand, and
Provident Bancorp and New Provident Bancorp on the other shall each provide to
the other a "comfort" letter from its independent certified public
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accountant, dated as of the date of the Proxy Statement-Prospectus and updated
as of the date of consummation of the Merger, with respect to certain financial
information regarding ENBHC and Provident Bancorp and New Provident Bancorp,
respectively, each in form and substance which is customary in transactions such
as the Merger.
8.3. The Mutual Company Conversion from Mutual to Stock Form.
Commencing promptly after the date of this Agreement, the Mutual Company,
Provident Bancorp, New Provident Bancorp and Provident Bank will take all
reasonable steps necessary to effect the Conversion. In addition, without
limiting the generality of the foregoing, the Mutual Company shall cause the
following to be done:
8.3.1. The Provident Bancorp Shareholders Meeting. Provident Bancorp
will (i) as promptly as practicable after the Conversion Registration Statement
is declared effective by the SEC, and the requisite approvals from the Bank
Regulators have been obtained, take all steps necessary to duly call, give
notice of, convene and hold the Provident Bancorp Shareholders Meeting for the
purpose of approving the Conversion and/or the Plan of Conversion, and for such
other purposes as may be, in the reasonable judgment of Provident Bancorp,
necessary or desirable, and (ii) subject to the fiduciary responsibility of the
Board of Directors of Provident Bancorp as advised by counsel, recommend to its
shareholders the approval of the aforementioned matters to be submitted by it to
its shareholders.
8.3.2. The Mutual Company Special Meeting. The Mutual Company will
(i) as promptly as practicable after the Conversion Registration Statement is
declared effective by the SEC, and the requisite approvals from the Bank
Regulators have been obtained, take all steps necessary to duly call, give
notice of, convene and hold a meeting of Depositors (the "Depositors Meeting")
for the purpose of approving the Plan of Conversion, and for such other purposes
as may be, in the reasonable judgment of the Mutual Company, necessary or
desirable, (ii) subject to the fiduciary responsibility of the Board of
Directors of the Mutual Company as advised by counsel, recommend to Depositors
the approval of the aforementioned matters to be submitted by it to Depositors,
and (iii) cooperate and consult with ENBHC with respect to each of the foregoing
matters.
8.3.3. The Mutual Company will use all reasonable efforts to prepare
and file all required regulatory applications required in connection with the
Conversion.
8.3.4. Provident Bancorp and New Provident Bancorp shall prepare as
promptly as practicable, and ENBHC shall cooperate in the preparation of, the
Conversion Prospectus. Such Conversion Prospectus shall be incorporated into the
Conversion Registration Statement. New Provident Bancorp shall file the
Conversion Registration Statement with the SEC. New Provident Bancorp shall use
its reasonable best efforts to have the Conversion Registration Statement
declared effective under the Securities Act as promptly as practicable after
such filing.
8.3.5. ENBHC shall provide Provident Bancorp and New Provident
Bancorp with any information concerning it that Provident Bancorp or New
Provident Bancorp may reasonably request in connection with the Conversion
Prospectus, and Provident Bancorp shall
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notify ENBHC promptly of the receipt of any comments of the SEC, the OTS and any
other Bank Regulator with respect to the Conversion Prospectus and of any
requests by the SEC, the OTS or any other Bank Regulator for any amendment or
supplement thereto or for additional information, and shall provide to ENBHC
promptly copies of all correspondence between New Provident Bancorp or any
representative of New Provident Bancorp and the SEC, the OTS or any other Bank
Regulator. New Provident Bancorp shall give ENBHC and its counsel the
opportunity to review and comment on the Conversion Prospectus prior to its
being filed with the SEC, the OTS and any Bank Regulator and shall give ENBHC
and its counsel the opportunity to review and comment on all amendments and
supplements to the Conversion Prospectus and all responses to requests for
additional information and replies to comments prior to their being filed with,
or sent to, the SEC, the OTS and any Bank Regulator. Each of Provident Bancorp,
New Provident Bancorp and ENBHC 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, the OTS and any Bank Regulator and to cause
the Conversion Prospectus and all required amendments and supplements thereto to
be mailed to Depositors at the earliest practicable time.
8.3.6. ENBHC shall promptly notify Provident Bancorp if at any time
it becomes aware that the Conversion Prospectus or the Conversion Registration
Statement contains any untrue statement of a material fact or omits 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, ENBHC shall cooperate with Provident Bancorp and New
Provident Bancorp in the preparation of a supplement or amendment to such
Conversion Prospectus, which corrects such misstatement or omission, and New
Provident Bancorp shall file an amended Conversion Registration Statement with
the SEC. ENBHC shall provide to New Provident Bancorp, Provident Bancorp and the
placement agent for the sale of New Provident Bancorp Common Stock in the
Conversion Offering a "comfort" letter from the independent certified public
accountants for ENBHC, dated as of the date of the Conversion Prospectus and
updated as of the date of consummation of the Conversion, with respect to
certain financial information regarding ENBHC, each in form and substance which
is customary in transactions such as the Conversion, and shall cause its counsel
to deliver to the placement agent for the Conversion such opinions as Provident
Bancorp and New Provident Bancorp may reasonably request.
8.3.7. The aggregate price for which the shares of New Provident
Bancorp Common Stock are sold to purchasers in the Conversion Offering shall be
based on the Independent Valuation. The Independent Valuation shall be expressed
as a range (the "Valuation Range"), the maximum and minimum of which shall vary
15% above and below the midpoint of such range, and the maximum of such range
may be increased by an additional 15%.
8.3.8. If any shares of New Provident Bancorp Common Stock that are
offered for sale in the subscription offering that is conducted as part of the
Conversion Offering remain unsold then, at Provident Bancorp's discretion, such
shares may be issued to ENBHC shareholders as part of the Merger Consideration
if necessary to complete the Conversion.
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8.4. Regulatory Approvals.
Each of ENBHC, ENB, New Provident Bancorp and Provident Bancorp 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 the SEC, the OTS,
and any other Bank Regulator and third parties and governmental bodies necessary
to consummate the transactions contemplated by this Agreement, including without
limitation the Merger and the Conversion. ENBHC and Provident Bancorp 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 Conversion
Prospectus, the Proxy Statement-Prospectus and any application, petition or any
other statement or application made by or on behalf of ENBHC, New Provident
Bancorp or Provident Bancorp to any governmental body in connection with the
Conversion, the Merger, and the other transactions contemplated by this
Agreement. ENBHC shall have the right to review and approve in advance all
characterizations of the information relating to ENBHC and any of its
Subsidiaries, which appear in any filing made in connection with the
transactions contemplated by this Agreement with any governmental body. In
addition, ENBHC, Provident Bancorp and New Provident Bancorp 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.
8.5. Affiliates.
8.5.1. ENBHC 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 ENBHC to deliver to Provident Bancorp,
as soon as practicable after the date of this Agreement, and at least thirty
(30) days prior to the date of the shareholders meeting called by ENBHC to
approve this Agreement, a written agreement, in the form of Exhibit B hereto,
providing that such person will not sell, pledge, transfer or otherwise dispose
of any shares of New Provident Bancorp Common Stock to be received by such
"affiliate," as a result of the Merger otherwise than in compliance with the
applicable provisions of the Securities Act and the rules and regulations
thereunder.
ARTICLE IX
CLOSING CONDITIONS
9.1. Conditions to Each Party's Obligations under this Agreement.
The respective obligations of each party under this Agreement shall be
subject to the fulfillment at or prior to the Pre-Closing Date of the following
conditions, none of which may be waived:
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9.1.1. Shareholder and Depositor Approval.
(A) This Agreement and the transactions contemplated hereby
shall have been approved by the requisite vote of the shareholders of ENBHC and
by the shareholders of Provident Bancorp.
(B) Solely with respect to determining whether the Merger
Consideration shall include the New Provident Bancorp Common Stock, the
Conversion and the Plan of Conversion shall have been approved by the requisite
vote of Depositors and shareholders of Provident Bancorp.
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
that enjoins or prohibits the consummation of the transactions contemplated by
this Agreement.
9.1.3. Regulatory Approvals. All necessary approvals, authorizations
and consents of all Bank Regulators and Governmental Entities required to
consummate the transactions contemplated by this Agreement 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 or in mutual-to-stock
conversions, that would, in the good faith reasonable judgment of the Board of
Directors of Provident Bancorp, materially and adversely affect the business,
operations, financial condition, property or assets of the combined enterprise
or otherwise materially impair the value of ENBHC or ENB to Provident Bancorp.
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 New Provident
Bancorp 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. Stock Exchange Listing. The shares of New Provident Bancorp
Common Stock to be issued in the Merger shall have been authorized for listing
on the Stock Exchange, subject to official notice of issuance.
9.1.6. Tax Opinion. On the basis of facts, representations and
assumptions which shall be consistent with the state of facts existing at the
Pre-Closing date, Provident Bancorp, New Provident Bancorp and ENBHC shall have
received an opinion of Luse Gorman Pomerenk & Schick, P.C. reasonably acceptable
in form and substance to Provident Bancorp, New Provident Bancorp and ENBHC
dated as of the Pre-Closing Date, substantially to the effect that, for Federal
income tax purposes:
(A) 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;
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(B) None of the Conversion, the Exchange Offer, or the merger
of ENB into Provident Bank will adversely affect the Merger qualifying as a
Reorganization within the meaning of Section 368(a) of the Code.
(C) No gain or loss will be recognized by Provident Bancorp,
New Provident Bancorp, Provident Bank, ENBHC or ENB by reason of the Merger;
(D) The exchange of ENBHC Common Stock to the extent exchanged
for New Provident Bancorp Common Stock will not give rise to recognition of gain
or loss for Federal income tax purposes to the shareholders of ENBHC;
(E) The basis of the New Provident Bancorp Common Stock to be
received (including any fractional shares deemed received for tax purposes) by
an ENBHC shareholder will be the same as the basis of the ENBHC Common Stock
surrendered pursuant to the Merger in exchange therefore; and
(F) The holding period of the shares of New Provident Bancorp
Common Stock to be received by a shareholder of ENBHC will include the period
during which the shareholder held the shares of ENBHC Common Stock surrendered
in exchange therefore, provided the ENBHC Common Stock surrendered is held as a
capital asset at the Effective Time.
Each of Provident Bancorp, New Provident Bancorp and ENBHC shall provide a
letter setting forth the facts, assumptions and representations on which such
counsel may rely in rendering its opinion.
9.1.7. Conversion. Solely with respect to determining whether the
consideration for this transaction shall include New Provident Bancorp Common
Stock, New Provident Bancorp shall have received and accepted orders to
purchase, including any shares to be issued as Merger Consideration, for at
least the minimum number of shares of New Provident Bancorp Common Stock offered
for sale in the Conversion Offering.
9.2. Conditions to the Obligations of Provident Bancorp under this
Agreement.
The obligations of Provident Bancorp and New Provident Bancorp under this
Agreement shall be further subject to the satisfaction of the conditions set
forth in Sections 9.2.1 through 9.2.7 at or prior to the Closing, any of which
may be waived by Provident Bancorp:
9.2.1. Representations and Warranties. Except as otherwise
contemplated by this Agreement or consented to in writing by Provident Bancorp,
each of the representations and warranties of ENBHC and ENB set forth in this
Agreement which is qualified as to materiality shall be true and correct, and
each such representation or warranty that is not so qualified shall be true and
correct in all material respects, in each case as of the date of this Agreement,
and (except to the extent such representations and warranties speak as of an
earlier date) as of the Effective Time; and ENBHC shall have delivered to
Provident Bancorp a certificate of ENBHC to such effect signed by the Chief
Executive Officer and the Chief Financial Officer of ENBHC as of the Effective
Time.
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9.2.2. Agreements and Covenants. ENBHC, ENB and each ENBHC
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 Time,
and Provident Bancorp shall have received a certificate signed on behalf of
ENBHC by the Chief Executive Officer and Chief Financial Officer of ENBHC to
such effect dated as of the Effective Time.
9.2.3. Permits, Authorizations, Etc. ENBHC and the ENBHC
Subsidiaries shall have obtained any and all material permits, authorizations,
consents, waivers, clearances or approvals required for the lawful consummation
of the Merger by ENBHC, the failure to obtain which would have a Material
Adverse Effect on Provident Bancorp and its subsidiaries, taken as a whole.
9.2.4. Accountants' Letter. Provident Bancorp shall have received a
"comfort" letter from the independent certified public accountants for ENBHC,
dated (i) the effective date of the Merger Registration Statement and (ii) the
Pre-Closing Date, with respect to certain financial information regarding ENBHC,
each in form and substance which is customary in transactions of the nature
contemplated by this Agreement.
9.2.5. No Material Adverse Effect. Since December 31, 2002, 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 ENBHC.
9.2.6. Dissenting Shares. As of immediately prior to the Effective
Time, not more than 10% of the issued and outstanding shares of ENBHC Common
Stock shall have dissented to the Merger under the NYBCL, and preserved, as of
immediately prior to the Effective Time, the right to pursue their right of
appraisal for the fair value of their shares of ENBHC Common Stock under the
NYBCL, it being understood that such limit on the number of shares that have
dissented to the Merger pursuant to this Section 9.2.6. shall not be applicable
in the event that ENBHC elects the All Cash Consideration in accordance with
Section 2.9.2.
9.2.7. Opinion of ENBHC's Counsel. New Provident Bancorp shall have
received an opinion of Thacher Proffitt & Wood, counsel to ENBHC, dated the
Closing Date, in form and substance reasonably satisfactory to New Provident
Bancorp and its counsel to the effect set forth on Exhibit C attached hereto.
ENBHC will furnish Provident Bancorp with such certificates of its
officers or others and such other documents to evidence fulfillment of the
conditions set forth in this Section 9.2 as Provident Bancorp may reasonably
request.
9.3. Conditions to the Obligations of ENBHC under this Agreement.
The obligations of ENBHC under this Agreement shall be further subject to
the satisfaction of the conditions set forth in Sections 9.3.1 through 9.3.6 at
or prior to the Closing, any of which may be waived by ENBHC:
9.3.1. Representations and Warranties. Except as otherwise
contemplated by this Agreement or consented to in writing by ENBHC, each of the
representations and
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warranties of Provident Bancorp, New Provident Bancorp, Provident Bank and
Mutual Company set forth in this Agreement which is qualified as to materiality
shall be true and correct, and each such representation or warranty that is not
so qualified shall be true and correct in all material respects, in each case as
of the date of this Agreement, and (except to the extent such representations
and warranties speak as of an earlier date) as of the Effective Time; and
Provident Bancorp shall have delivered to ENBHC a certificate of Provident
Bancorp to such effect signed by the Chief Executive Officer and the Chief
Financial as of the Effective Time.
9.3.2. Agreements and Covenants. As of the Pre-Closing Date,
Provident Bancorp, New Provident Bancorp, the Mutual Company and Provident Bank
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 Time, and ENBHC shall
have received a certificate signed on behalf of Provident Bancorp by the Chief
Executive Officer and Chief Financial Officer to such effect dated as of the
Effective Time.
9.3.3. Permits, Authorizations, Etc. The Mutual Company, New
Provident Bancorp, Provident Bancorp and its Subsidiaries shall have obtained
any and all material permits, authorizations, consents, waivers, clearances or
approvals required for the lawful consummation of the Merger by Provident
Bancorp and New Provident Bancorp, the failure to obtain which would have a
Material Adverse Effect on Provident Bancorp and its Subsidiaries, taken as a
whole.
9.3.4. Payment of Merger Consideration. New Provident Bancorp shall
have delivered the Exchange Fund to the Exchange Agent on or before the Closing
Date and the Exchange Agent shall provide ENBHC with a certificate evidencing
such delivery.
9.3.5. No Material Adverse Effect. Since September 30, 2002, 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
Provident Bancorp.
9.3.6. Opinion of New Provident Bancorp's Counsel. ENBHC shall have
received an opinion of Luse Gorman Pomerenk & Schick, P.C., counsel to New
Provident Bancorp, dated the Closing Date, in form and substance reasonably
satisfactory to ENBHC and its counsel to the effect set forth on Exhibit D
attached hereto.
Provident Bancorp and New Provident Bancorp will furnish ENBHC with such
certificates of their officers or others and such other documents to evidence
fulfillment of the conditions set forth in this Section 9.3 as ENBHC may
reasonably request.
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 Luse Gorman
Pomerenk & Schick, 5335 Wisconsin Avenue, Suite 400, Washington, D.C. at 10:00
a.m. on the date determined by
66
Provident Bancorp, in its sole discretion, upon five (5) days prior written
notice to ENBHC, but in no event later than thirty days (30) after the last
condition precedent pursuant to this agreement has been fulfilled or waived
(including the expiration of any applicable waiting period), or at such other
place, date or time upon which Provident Bancorp and ENBHC mutually agree. A
pre-closing of the transactions contemplated hereby (the "Pre-Closing") shall
take place at the offices of Luse Gorman Pomerenk & Schick, 5335 Wisconsin
Avenue, Suite 400, Washington, D.C. at 10:00 a.m. on the day prior to the
Closing Date (the "Pre-Closing Date").
10.2. Deliveries at the Pre-Closing and the Closing.
At the Pre-Closing there shall be delivered to Provident Bancorp, New
Provident Bancorp and ENBHC the opinions, certificates, and other documents and
instruments required to be delivered at the Pre-Closing under Article IX hereof.
At or prior to the Closing, Provident Bancorp or New Provident Bancorp shall
deliver the Merger Consideration as set forth under Section 9.3.5 hereof.
ARTICLE XI
TERMINATION, AMENDMENT AND WAIVER
11.1. Termination.
This Agreement may be terminated at any time prior to the Pre-Closing
Date, whether before or after approval of the Merger by the shareholders of
ENBHC:
11.1.1. At any time by the mutual written agreement of Provident
Bancorp and ENBHC;
11.1.2. By either ENBHC or Provident Bancorp (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 by its nature cannot be
cured prior to the Pre-Closing Date or, provided that the breach is curable in
nature, shall not have been cured within the first to occur of the Pre-Closing,
or 30 days after written notice by Provident Bancorp to ENBHC (or by ENBHC to
Provident Bancorp) of such breach;
11.1.3. By either ENBHC or Provident Bancorp (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, which failure by its
nature cannot be cured prior to the Pre-Closing Date or, provided that the
failure is curable in nature, shall not have been cured within the first to
occur of the Pre-Closing, or 30 days after written notice by Provident Bancorp
to ENBHC (or by ENBHC to Provident Bancorp) of such failure;
11.1.4. At the election of either Provident Bancorp or ENBHC, if the
Closing shall not have occurred by the Termination Date, or such later date as
shall have been agreed to
67
in writing by Provident Bancorp and ENBHC; provided, that no party may terminate
this Agreement pursuant to this Section 11.1.4 if the failure 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 ENBHC or Provident Bancorp if the shareholders of
ENBHC shall have voted at the ENBHC shareholders meeting on the transactions
contemplated by this Agreement and such vote shall not have been sufficient to
approve such transactions;
11.1.6. By either ENBHC or Provident Bancorp if (i) final action has
been taken by a Bank Regulator whose approval is required in connection with
this Agreement and the transactions contemplated hereby, which final action (x)
has become unappealable and (y) does not approve this Agreement or the
transactions contemplated hereby, (ii) any Bank Regulator whose approval or
nonobjection is required in connection with this Agreement and the transactions
contemplated hereby has stated in writing that it will not issue the required
approval or nonobjection, 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
Conversion and such order, decree, ruling or other action shall have become
final and nonappealable;
11.1.7. By the Board of Directors of either party (provided, that
the terminating party is not then in material breach of any representation,
warranty, covenant or other agreement contained herein) in the event that any of
the conditions precedent to the obligations of such party to consummate the
Merger cannot be satisfied or fulfilled by the date specified in Section 11.1.4
of this Agreement.
11.1.8. By the Board of Directors of Provident Bancorp or ENBHC,
provided that the terminating party is not then in material breach of any
representation, warranty, covenant or other agreement contained herein, if by
July 31, 2004, the Closing shall not have occurred, provided that no party may
terminate this Agreement pursuant to this Section 11.1.8 if the failure 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.
11.1.9. By the Board of Directors of Provident Bancorp if ENBHC has
received a Superior Proposal, and in accordance with Section 6.10 of this
Agreement, the Board of Directors of ENBHC has entered into an acquisition
agreement with respect to the Superior Proposal, terminated this Agreement, or
withdraws its recommendation of this Agreement, fails to make such
recommendation or modifies or qualifies its recommendation in a manner adverse
to Provident Bancorp.
11.1.10. By the Board of Directors of ENBHC if ENBHC has received a
Superior Proposal, and in accordance with Section 6.10 of this Agreement, the
Board of Directors of ENBHC has made a determination to accept such Superior
Proposal; provided that ENBHC shall not terminate this Agreement pursuant to
this Section 11.1.10 and enter in a definitive agreement with respect to the
Superior Proposal until the expiration of five (5) business days following
Provident Bancorp's receipt of written notice advising Provident Bancorp that
ENBHC has received a Superior Proposal, specifying the material terms and
conditions of such Superior Proposal (and including a copy thereof with all
accompanying
68
documentation, if in writing) identifying the person making the Superior
Proposal and stating whether ENBHC intends to enter into a definitive agreement
with respect to the Superior Proposal. After providing such notice, ENBHC shall
provide a reasonable opportunity to Provident Bancorp during the five-day period
to make such adjustments in the terms and conditions of this Agreement as would
enable ENBHC to proceed with the Merger on such adjusted terms.
11.1.11. By ENBHC in accordance with the provisions of Section 2.9.2
of this Agreement.
It is the intention of the parties that following completion of the
Pre-Closing, which completion will be acknowledged in writing by the parties at
such time, neither party shall have the right to terminate this Agreement at any
time thereafter. If, after the Pre-Closing Date, any party hereto shall attempt
to terminate this Agreement or shall fail to take any action necessary to effect
the consummation of the Merger (including, without limitation, Provident
Bancorp's obligation to satisfy the condition set forth in Section 9.3.6), the
other party shall be entitled to injunctive relief to enforce this Agreement,
and the first party hereby agrees not to contest any judicial proceeding seeking
the granting of such an injunction.
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 11.2, 12.1, 12.2,
12.6, 12.9, 12.10, 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. If this Agreement is terminated, expenses and damages of the
parties hereto shall be determined as follows:
(A) Except as provided below, 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.
(B) 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.
(C) As a condition of Provident Bancorp's willingness, and in
order to induce Provident Bancorp to enter into this Agreement, and to reimburse
Provident Bancorp for incurring the costs and expenses related to entering into
this Agreement and consummating the transactions contemplated by this Agreement,
ENBHC and ENB hereby agrees to pay Provident Bancorp or New Provident Bancorp,
and Provident Bancorp or New Provident Bancorp shall be entitled to payment of a
fee of $3,700,000 (the "Fee"), within three business days after written demand
for payment is made by Provident Bancorp or New Provident Bancorp, following the
occurrence of any of the events set forth below:
69
(i) ENBHC terminates this Agreement pursuant to Section 11.1.10 or
Provident Bancorp or Provident Bancorp or New Provident Bancorp terminates
this Agreement pursuant to Section 11.1.9; or
(ii) The entering into a definitive agreement by ENBHC relating to
an Acquisition Proposal or the consummation of an Acquisition Proposal
involving ENBHC within twelve months after the occurrence of any of the
following: (i) the termination of the Agreement by Provident Bancorp
pursuant to Section 11.1.2 or 11.1.3 because of a willful breach by ENBHC
or any ENBHC Subsidiary; or (ii) the failure of the shareholders of ENBHC
to approve this Agreement after the occurrence of an Acquisition Proposal.
(D) If demand for payment of the Fee is made pursuant to
Section 11.2.2(C) and payment is timely made, then neither Provident Bancorp nor
New Provident Bancorp will have any other rights or claims against ENBHC or ENB,
their Subsidiaries, and their respective officers and directors, under this
Agreement, it being agreed that the acceptance of the Fee under Section
11.2.2(C) will constitute the sole and exclusive remedy of Provident Bancorp and
New Provident Bancorp against ENBHC and ENB, their Subsidiaries and their
respective officers and directors.
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 ENBHC), 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 ENBHC,
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 ENBHC's shareholders 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.
ARTICLE XII
MISCELLANEOUS
12.1. Confidentiality.
Except as specifically set forth herein, Provident Bancorp and ENBHC
mutually agree to be bound by the terms of the confidentiality agreements dated
May 14, 2003 and June 16, 2003, previously executed by the parties hereto (the
"Confidentiality Agreements") that relate to the
70
confidentiality of information. The parties hereto agree that such
Confidentiality Agreements shall continue in accordance with their respective
terms, notwithstanding the termination of this Agreement. Notwithstanding the
foregoing, the parties (and each employee, representative, or other agent of the
parties) may disclose to any and all persons, without limitation of any kind,
the tax treatment and any facts that may be relevant to the tax structure of the
transaction beginning on the earliest of (i) the date of public announcement of
discussions relating to the transaction, (ii) the date of public announcement of
the transaction or (iii) the date of the execution of an agreement (with or
without conditions) to enter into the transaction; provided, however, that
neither party (nor any employee, representative or other agent thereof) may
disclose any other information that is not relevant to understanding the tax
treatment and tax structure of the transaction (including the identity of any
party and any information that could lead another to determine the identity of
any party), or any other information to the extent that such disclosure could
result in a violation of any federal or state securities law.
12.2. Public Announcements.
ENBHC and Provident Bancorp shall cooperate with each other in the
development and distribution of all news releases and other public information
disclosures with respect to this Agreement, and except as may be otherwise
required by law, neither ENBHC nor Provident Bancorp shall issue any news
release, or other public announcement or communication with respect to this
Agreement unless such news release, public announcement or communication has
been mutually agreed upon by the parties hereto.
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 Time, other than those covenants
set forth in Sections 2.5, 7.8.2, and 7.9, which shall survive or be performed
after the Effective Time.
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 recognized
overnight courier addressed as follows:
If to ENBHC or ENB, to: Glenn Sutherland
Vice President
ENB Holding Company, Inc.
70 Canal Street, P.O. Box 669
Ellenville, New York 12428
Fax: (845) 647-4002
71
With copies to: Thacher Proffitt & Wood
11 W. 42nd Street
New York, New York 10036
Fax: (212) 789-3500
Attention: Omer S. J. Williams
Mark I. Sokolow
If to Provident Bancorp, George Strayton
New Provident Bancorp or President and Chief Executive Officer
Provident Bank, to: Provident Bancorp, Inc.
400 Rella Boulevard
Montebello, New York 10901
Fax: (845) 369-9170
With copies to: John J. Gorman
Eric Luse
Luse Gorman Pomerenk & Schick, P.C.
5335 Wisconsin Avenue, N.W., Suite 400
Washington, D.C. 20015
Fax: (202) 362-2902
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: (a) as of the
date delivered by hand; (b) three (3) business days after being delivered to the
U.S. mail, postage prepaid; or (c) one (1) business day after being delivered to
the overnight courier.
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 provided in Section 7.9 of 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.
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, and 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 Agreements referred to in Section
12.1 hereof) between the parties, both written and oral, with respect to its
subject matter.
72
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 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 Delaware, without giving
effect to its principles of conflicts of laws.
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.
73
IN WITNESS WHEREOF, the Mutual Company, Provident Bancorp, New Provident
Bancorp, Provident Bank, ENBHC and ENB have caused this Agreement to be executed
under seal by their duly authorized officers as of the date first set forth
above.
Provident Bancorp, MHC
Dated: July 1, 2003 By:/s/George Strayton
____________________________________
Name: George Strayton
Title: President and Chief Executive
Officer
Provident Bancorp, Inc. (a federal
corporation)
Dated: July 1, 2003 By:/s/George Strayton
_____________________________________
Name: George Strayton
Title: President and Chief Executive
Officer
Provident Bancorp, Inc. (a Delaware
corporation)
Dated: July 1, 2003 By:/s/George Strayton
_____________________________________
Name: George Strayton
Title: President and Chief Executive
Officer
Provident Bank
Dated: July 1, 2003 By:/s/George Strayton
_____________________________________
Name: George Strayton
Title: President and Chief Executive
Officer
E.N.B. Holding Company, Inc.
Dated: July 1, 2003 By:/s/Glenn B. Sutherland
_____________________________________
Name: Glenn B. Sutherland
Title: President and CEO
Ellenville National Bank
Dated: July 1, 2003 By:/s/Glenn B. Sutherland
_____________________________________
Name: Glenn B. Sutherland
Title: President and CEO
74
EXHIBIT A
FORM OF VOTING AGREEMENT
- ---------------------
Provident Bancorp, Inc.
400 Rella Boulevard
Montebello, New York 10901
Ladies and Gentlemen
The undersigned is a director of E.N.B. Holding Company, Inc. ("ENBHC")
and is the beneficial holder of shares of common stock of ENBHC ("ENBHC Common
Stock").
ENBHC and Provident Bancorp, Inc. ("Provident Bancorp") are considering
the execution of an Agreement And Plan of Reorganization ("Agreement")
contemplating the merger of ENBHC with and into Provident Bancorp or a successor
thereto (collectively referred to as Provident Bancorp), with Provident Bancorp
as the surviving corporation of the merger (the "Merger"), such execution being
subject in the case of Provident Bancorp to the execution and delivery of this
letter agreement ("letter agreement"). In consideration of the substantial
expenses that Provident Bancorp will incur in connection with the transactions
contemplated by the Agreement and in order to induce Provident Bancorp to
execute the Agreement and to proceed to incur such expenses, the undersigned
agrees and undertakes, in his capacity as a shareholder of ENBHC and not in his
capacity as a director of ENBHC, as follows:
1. The undersigned, while this letter agreement is in effect, shall vote
in favor of the Agreement or cause to be voted in favor of the Agreement all of
the shares of ENBHC 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, at the meeting of ENBHC's
shareholders to be called and held following the date hereof, to consider the
Agreement and the Merger.
2. The undersigned, while this letter agreement is in effect, agrees not
to sell, transfer or otherwise dispose of any shares of common stock of ENBHC on
or prior to the date of the meeting of ENBHC shareholders to vote on the Merger
Agreement, unless the purchaser or transferee agrees to be bound by the terms of
this letter agreement.
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, Provident Bancorp 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 capacity as a shareholder of ENBHC
and shall not in any way limit or affect actions the undersigned may take in his
capacity as a director of ENBHC.
5. This letter agreement shall automatically terminate upon termination of
the Agreement in accordance with its terms.
IN WITNESS WHEREOF, the undersigned has executed this Agreement as of the
date first above written.
Very truly yours,
Signature
________________________________________
Name (please print)
Accepted and agreed to as of
the date first above written:
PROVIDENT BANCORP, INC.
By:_______________________________
Title:____________________________
A-2
EXHIBIT B
AFFILIATES AGREEMENT
- --------------
Provident Bancorp, Inc.
400 Rella Boulevard
Montebello, New York 10901
Gentlemen:
I have been advised that I might be considered to be an "affiliate" of
E.N.B. Holding Company, Inc. ("ENBHC"), a New York corporation ("ENBHC"), 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").
Provident Bancorp, Inc. ("Provident Bancorp") and ENBHC have entered into
an Agreement and Plan of Reorganization, dated as of July __, 2003 (the
"Agreement"). Upon consummation of the merger contemplated by the Agreement (the
"Merger"), I may receive shares of common stock of Provident Bancorp or any
successor thereto ("Provident Bancorp Common Stock") in exchange for my shares
of common stock, par value $20.00 per share, of ENBHC ("ENBHC Common Stock").
This agreement is hereinafter referred to as the "Letter Agreement."
I represent and warrant to, and agree with, Provident Bancorp 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 Provident Bancorp Common
Stock, to the extent I felt necessary, with my counsel or counsel for ENBHC.
2. I have been advised that any issuance of shares of the Provident
Bancorp 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
ENBHC at the time the Merger will be submitted for a vote of the shareholders of
ENBHC and my disposition of such shares has not been registered under 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 (iv) in an opinion of counsel,
in form and substance reasonably satisfactory to Provident Bancorp, 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 Provident Bancorp with respect to the shares of Provident
Bancorp Common Stock I receive pursuant to the Merger and that there will be
placed on the certificate representing such shares, or any certificates
delivered in substitution therefore, 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 only be transferred in accordance with the
terms of an agreement between the registered holder hereof and Provident
Bancorp, a copy of which agreement is on file at the principal offices of
Provident Bancorp. A copy of such agreement shall be provided to the holder
hereof without charge upon receipt by Provident Bancorp of a written request.
4. Unless a transfer of my shares of the Provident Bancorp 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, Provident
Bancorp 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 Provident Bancorp of a copy of a letter from the
staff of the SEC, an opinion of counsel in form and substance reasonably
satisfactory to Provident Bancorp, or other evidence reasonably satisfactory to
Provident Bancorp, to the effect that a transfer of my shares of the Provident
Bancorp 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
the legend set forth in Paragraph 2 above shall be removed forthwith from the
certificate or certificates representing my shares of the Provident Bancorp
Common Stock upon expiration of the restrictive period set forth in Rule
145(d)(2), so long as Provident Bancorp is then in compliance with SEC Rule
144(c), or if Provident Bancorp 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 Provident Bancorp, or other evidence satisfactory to Provident
Bancorp that a transfer of my shares of the Provident Bancorp 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. I further recognize that in the event I become a director or officer of
Provident Bancorp upon consummation of the Merger, any sale of Provident Bancorp
stock by me may be
B-2
subject to further restrictions on transferability and additional liability
pursuant to Section 16(b) of the Securities Exchange Act of 1934, as amended.
7. Execution of this Letter Agreement should not be construed as an
admission on my part that I am an "affiliate" of ENBHC 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.
* * * * *
This Letter Agreement shall be binding on my heirs, legal representative
and successors.
Very truly yours,
Signature
________________________________________
Name (Please Print)
Accepted as of the date first above written
PROVIDENT BANCORP, INC.
By:__________________________________
Name:
Title:
B-3
EXHIBIT C
MATTERS TO BE COVERED IN OPINION OF COUNSEL TO BE DELIVERED TO
NEW PROVIDENT BANCORP PURSUANT TO SECTION 9.2.7 OF THE
AGREEMENT
(a) Each of ENBHC, ENB and each ENBHC Subsidiary is incorporated, validly
existing and in good standing under the laws of its jurisdiction of
incorporation. Each such entity has the corporate power and authority to own or
lease all of its properties and assets and to carry on its business as it is now
being conducted. ENBHC is duly registered as a bank holding company under the
BHCA and the regulations of the FRB thereunder.
(b) ENBHC and ENB each has full corporate power and authority to execute
and deliver this Agreement and to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement by ENBHC and ENB, and of
the engagement agreements referenced in Section 4.13, and the completion by
ENBHC and ENB of the transactions contemplated hereby, up to and including the
Merger, have been duly and validly approved by the Board of Directors of ENBHC
and ENB, respectively, and no other corporate proceedings on the part of ENBHC
or ENB are necessary to complete the transactions contemplated hereby. This
Agreement, and the engagement agreements referenced in Section 4.13, have been
duly and validly executed and delivered by ENBHC and ENB, and the Bank Merger
has been duly and validly approved by the Board of Directors of ENB, and by
ENBHC in its capacity as sole shareholder of ENB, and constitutes the valid and
binding obligations of ENBHC and ENB, enforceable against ENBHC and ENB in
accordance with its terms, subject to applicable bankruptcy, insolvency and
similar laws affecting creditors' rights generally, and as to ENB, the
conservatorship or receivership provisions of the FDIA, and subject, as to
enforceability, to general principles of equity.
(c) The execution and delivery of this Agreement by ENBHC and ENB, and of
the engagement agreements referenced in Section 4.13, and the consummation of
the transactions contemplated thereby, will not conflict with or result in a
breach of any provision of the certificate of incorporation or bylaws of ENBHC
or any ENBHC Subsidiary or the articles of association and bylaws of ENB.
(d) The Agreement, including consummation of the transactions contemplated
thereby, has been approved by the requisite vote of stockholders of ENBHC.
The opinion of such counsel may include such qualifications and
explanations of the basis thereof as may be reasonably acceptable to New
Provident Bancorp.
EXHIBIT D
MATTERS TO BE COVERED IN OPINION OF COUNSEL TO BE DELIVERED
TO ENBHC PURSUANT TO SECTION 9.3.6 OF THE AGREEMENT
(a) Provident Bancorp is a corporation duly organized, validly existing
and in good standing under federal law, and is duly registered as a savings and
loan holding company under the HOLA. New Provident Bancorp is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware.
(b) Each of Mutual Company and Provident Bancorp has full corporate power
and authority to carry on its business as now conducted and is duly licensed or
qualified to do business in the states of the United States and foreign
jurisdictions where 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 the Mutual Company or
Provident Bancorp.
(c) Provident Bank is a savings association organized, validly existing
and in good standing under federal law. The deposits of Provident Bank are
insured by the FDIC to the fullest extent permitted by law, and all premiums and
assessments required to be paid in connection therewith have been paid when due.
(d) New Provident Bancorp, the Mutual Company, Provident Bancorp and
Provident Bank each has full corporate power and authority to execute and
deliver this Agreement and to consummate the transactions contemplated hereby.
The execution and delivery of this Agreement by New Provident Bancorp, Mutual
Company, Provident Bancorp and Provident Bank and the completion by New
Provident Bancorp, Mutual Company, Provident Bancorp and Provident Bank of the
transactions contemplated hereby, up to and including the Merger, have been duly
and validly approved by the Board of Directors of New Provident Bancorp, the
Mutual Company, Provident Bancorp and Provident Bank, respectively, and, no
other corporate proceedings on the part of New Provident Bancorp, Mutual
Company, Provident Bancorp or Provident Bank are necessary to complete the
transactions contemplated hereby, up to and including the Merger. This Agreement
has been duly and validly executed and delivered by New Provident Bancorp, the
Mutual Company, Provident Bancorp and Provident Bank, and the Bank Merger has
been duly and validly approved by the Board of Directors of Provident Bank, and
by New Provident Bancorp and Provident Bancorp in their capacity as sole
shareholder of Provident Bank, and constitutes the valid and binding obligations
of New Provident Bancorp, the Mutual Company, Provident Bancorp and Provident
Bank, enforceable against New Provident Bancorp, the Mutual Company, Provident
Bancorp and Provident Bank in accordance with its terms, subject to applicable
bankruptcy, insolvency and similar laws affecting creditors' rights generally,
and as to Provident Bank, the conservatorship or receivership provisions of the
FDIA, and subject, as to enforceability, to general principles of equity.
(e) The execution and delivery of this Agreement by New Provident Bancorp,
Mutual Company, Provident Bancorp and Provident Bank will not conflict with or
result in a breach of any provision of the certificate of incorporation or
bylaws of New Provident Bancorp, Mutual Company, Provident Bancorp or any
Provident Bancorp Subsidiary or the charter and bylaws of Provident Bank.
(f) The shares of Provident Bancorp Common Stock to be issued to former
shareholders of ENBHC have been duly and validly authorized for issuance, and
when issued and delivered by New Provident Bancorp will be fully paid and
nonassessable.
The opinion of such counsel may include such qualifications and
explanations of the basis thereof as may be reasonably acceptable to ENBHC.
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