EXHIBIT 10.2
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ACKNOWLEDGMENT AND AGREEMENT
This Agreement ("Agreement") is entered into as of this 4th day of August, 1999,
by and among (i) First Coastal Corporation, a Delaware corporation ("Borrower"),
(ii) Androscoggin Savings Bank, a Maine savings bank in stock form, Machias
Savings Bank, a Maine savings bank in mutual form, and Norway Savings Bank, a
Maine savings bank in mutual form (collectively these three banks are sometimes
referred to as "Lenders") and (iii) Machias Savings Bank, in its capacity as
Agent for the Lenders (the "Agent").
WHEREAS, Borrower borrowed $1,000,000.00 from each of the Lenders and from
Bangor Savings Bank for an aggregate of $4,000,000.00 on July 24, 1996 pursuant
to the terms of a Loan Agreement among Borrower, the Lenders and Bangor Savings
Bank; and
WHEREAS, Borrower's $4,000,000.00 obligation is evidenced in part by four
promissory notes dated July 24, 1996, each in the original principal amount of
$1,000,000.00 (hereinafter collectively referred to as the "Notes" and
individually as a "Note"); and
WHEREAS, each of the Lenders have held and continue to hold one of the
Notes, and Bangor Savings Bank has as of the date hereof assigned its Note to
Machias Savings Bank, resulting in Machias Savings Bank holding two of the
Notes; and
WHEREAS, the Notes are secured by terms of a Stock Pledge Agreement
pursuant to which Borrower has granted to the Agent a security interest in all
of Borrower's right, title and interest in and to all of the issued and
outstanding shares of the common stock of Coastal Bank (formerly Coastal Savings
Bank); and
WHEREAS, the parties have agreed to amend certain terms and conditions of
the Loan Agreement dated July 24, 1996 and to amend the Notes; and
WHEREAS, Lenders have issued a Commitment Letter dated May 20, 1999 which
has been accepted by Borrower. Borrower has accordingly executed, of even date
herewith, a First Amendment to Loan Agreement, Note Modification Agreements and
other related documents in accordance with the terms of the Commitment Letter;
and
WHEREAS, the aforesaid Stock Pledge Agreement grants to Agent, as agent to
the Lenders, a first priority security interest in all of the issued and
outstanding shares of the common stock of Coastal Bank (formerly Coastal Savings
Bank) to secure all obligations of Borrower to Lenders including that evidenced
by the Notes. Lenders have requested that Borrower execute this Acknowledgment
Agreement to induce Lenders to issue the aforesaid Commitment Letter and to
enter into the modifications and to extend the credit facilities to Borrower as
evidenced by the First Amendment to Loan Agreement and the Note Modification
Agreements.
NOW THEREFORE, for valid consideration, the receipt whereof is hereby
acknowledged, and to induce Lenders to extend the foregoing credit facilities to
Borrower, the parties hereto agree as follows:
1. Borrower hereby acknowledges, ratifies and confirms that it has
executed and delivered to Agent the Stock Pledge Agreement securing all
indebtedness of Borrower to Lenders. Borrower covenants, warrants and represents
that the Stock Pledge Agreement remains the duly authorized, valid, and binding
agreement of Borrower, and that it remains enforceable in accordance with its
terms. Without in any way limiting the foregoing, Borrower specifically
covenants and agrees that among the indebtedness secured thereby, is that
evidenced by the Notes as modified by the Note Modification Agreements of even
date in the sum of up to Four Million Dollars and No Cents ($4,000,000.00).
2. The terms, conditions, and obligations of the Stock Pledge Agreement:
(a) remain unchanged;
(b) are hereby ratified and affirmed in their entirety;
(c) continue in full force and effect and constitute a first
priority security interest and lien upon the Pledged Shares
as described in the Stock Pledge Agreement; and
(d) are legally valid, binding, and enforceable in accordance
with its terms.
3. Borrower hereby acknowledges and affirms that Borrower has, and knows
of, no defenses, set offs, or other claims against Lenders arising under or out
of the Loan Agreement dated July 24, 1996, as amended by the First Amendment to
Loan Agreement and the Note Modification Agreements or under the terms of the
Stock Pledge Agreement.
4. Borrower hereby warrants and represents to Lenders that the
representations and warranties made by Borrower in Article III of the Loan
Agreement are true and accurate as of the date hereof, except as otherwise
disclosed in writing to Agent.
5. This Agreement shall be binding upon the parties hereto as well as
their successors and assigns.
6. It is understood by and is the intention of the parties hereto that
any legal or equitable priorities of the Lenders over any party which were in
existence before the date of the execution of this Agreement shall remain in
effect after the date of the execution of this Agreement.
7. Borrower hereby agrees to execute and deliver any and all instruments,
documents and agreements reasonably required at any time by Lenders or Agent to
assure that Agent's security interest in the Pledged Shares remains a perfected
first priority security interest.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
signed in their respective corporate names by their respective corporate
officers hereunto duly authorized as and of the day and year first above
written.
WITNESS: FIRST COASTAL CORPORATION
/s/ William E. Saufley By: /s/ Gregory T. Caswell
its President and CEO
MACHIAS SAVINGS BANK
/s/ Heather L. Vose By: /s/ Edward L. Hennessey, Jr.
its President
ANDROSCOGGIN SAVINGS BANK
/s/ Diane M. Flagg By: /s/ Steven A. Closson
its President
NORWAY SAVINGS BANK
/s/ Sandy Smith By: /s/ David L. Wyman
its EVP and Treasurer