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Agreement for the
Acquisition of Accounts and Certain Assets
Relating to the Trust Business
of
THE FIRST NATIONAL BANK OF IPSWICH
by
EASTERN BANK
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AGREEMENT FOR THE ACQUISITION OF ACCOUNTS AND CERTAIN ASSETS
RELATING TO THE TRUST BUSINESS OF
THE FIRST NATIONAL BANK OF IPSWICH
This Agreement for the Acquisition of Accounts and Certain Assets relating
to the Trust Business of THE FIRST NATIONAL BANK OF IPSWICH, a national bank
("Seller"), by EASTERN BANK, a Massachusetts trust company ("Buyer"), (the
"Agreement") is made and entered into as of this 24th day of August, 2006, by
and between Seller and Buyer.
In consideration of the mutual covenants, representations, warranties and
agreements contained herein, the parties agree as follows:
ARTICLE I
PURCHASE AND SALE
1.01 Purchase and Sale.
(a) Seller agrees to sell to Buyer, and Buyer agrees to purchase from
Seller, the accounts of Seller's trust department listed in Exhibit A and
incorporated herein by reference (individually and collectively, a "Trust
Department Account" and the "Trust Department Accounts") and certain assets of
Seller listed in Exhibit B related to the Trust Department Accounts of Seller
(the "Account Related Assets"), including but not limited to all rights and
obligations of Seller under the contracts establishing the Trust Department
Accounts listed on Exhibit G (the "Trust Department Agreements"), pursuant and
subject to the terms of this Agreement. The Trust Department Accounts and the
Assets shall be collectively referred to herein as the "Trust Department
Accounts and Related Assets". Notwithstanding the foregoing, the parties
understand and agree that Buyer is purchasing the Trust Department Accounts and
Related Assets only and is not assuming any direct or indirect liabilities of
Seller except as otherwise expressly provided herein. The "Trust Department
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Accounts and Related Assets" expressly shall not include any obligations of
Seller, other than contract obligations arising under the Trust Department
Agreements only after the date on which such Trust Department Accounts and
Related Assets are effectively assigned to Buyer on the dates as set forth in
Section 1.02 (c) below (each of which shall be a "Transfer Date"). Without
limiting the foregoing, in no event shall such contract obligations include any
contract or other agreements with any third party that is not a party to a Trust
Department Agreement assigned to Buyer pursuant to this Agreement (such as with
Seller's data processors or investment advisors), whether or not such contract
or agreement was entered into by Seller for the benefit of the Trust Department
Accounts and Related Assets if Buyer would be personally or individually liable
under such contract or agreement (except when such liability arises as a result
of its breach of fiduciary duty with respect to a Trust Department Account).
Buyer shall assume all debts, liabilities, or obligations of Seller under the
Trust Agreements, in each case arising on and after the Transfer Date. Seller
will update Exhibits A and B to reflect any changes in the Trust Department
Accounts occurring prior to the Transfer Date as a result of acquisitions and
dispositions in the ordinary course of Seller's trust department business and as
permitted by the terms of this Agreement.
(b) Exhibit C sets forth all required consents to the assignment to Buyer
of irrevocable trusts which are Trust Department Agreements and all required
appointments of Buyer as the successor to Seller (the "Appointments"). All other
Trust Department Agreements require the consents of the Seller's customer in
order for Seller to assign such Trust Department Agreements to Buyer. The
consents required in order for Seller to assign all Trust Department Agreements
to Buyer are herein referred to as the "Consents". Seller will employ its best
efforts in securing the Consents and the Appointments. Buyer will purchase from
Seller in accordance with the terms set forth herein only those Trust Department
Accounts as to which all such required assignments or appointments have been
obtained.
(c) On each Transfer Date, Seller will transfer to Buyer records relating
to the Trust Department Accounts and Related Assets assigned to Buyer on that
date. Buyer shall not be obligated to acquire any Trust Department Accounts
unless complete and accurate copies of the records are available and are
transferred to the Buyer hereunder on such Transfer Date.
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1.02 Purchase Price
(a) Buyer agrees that it shall pay Seller as total consideration for the
Trust Department Accounts and Related Assets, the sum of $650,000 (the "Initial
Price"), less any adjustment required by Section 1.02(b) (the Initial Price
after such adjustment, the "Prorated Purchase Price"). The Initial Price is
based upon Seller's representation that the cash revenues for calendar year 2005
of the Trust Department of Seller (the 2005 cash revenues of the Trust
Department of Seller are hereafter referred to as the "2005 Revenues") are as
shown in Exhibit D. Exhibit D also includes Seller's estimate of the current
annual revenues, which was computed in most cases by adding the actual fees
received by Seller for the first two fiscal quarters (ending June 30, 2006) and
multiplying that figure by two.
(b) The Initial Price shall be adjusted in the event Seller fails to
effectively assign all of the Trust Department Accounts as follows:
(i) If the Trust Department Accounts effectively assigned by Seller
to Buyer represent $423,000 or greater in 2005 Revenues, there shall be no
reduction in the Purchase Price;
(ii) If the Trust Department Accounts effectively assigned by Seller
to Buyer represent between $329,000 and $422,999 in 2005 Revenues, the Initial
Price shall be reduced by $5,000 for each full increment of $4,700 by which the
2005 Revenues of such effectively assigned Trust Department Accounts are less
than $423,000.
(iii) If the Trust Department Accounts effectively assigned by
Seller to Buyer represent less than $329,000 in 2005 Revenues, the Initial Price
shall be reduced by $10,000 for each full increment of $4,700 by which the 2005
Revenues of such effectively assigned Trust Department Accounts are less than
$329,000, after first giving effect to the reduction in subsection (b) (ii)
above at the time the Prorated Purchase Price is determined; provided, however,
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that, notwithstanding the adjustments set forth in this subsection (b), the
Prorated Purchase Price shall never be less than the 2005 Revenues generated by
the Trust Department Accounts effectively assigned by Seller to Buyer after
giving effect to the adjustments set forth in subparagraph (iv) below.
(iv) For purposes of this Section 1.02b, if the account balance of a
Trust Department Account on the Transfer Date of that account is materially less
than (or greater than) its December 31, 2005 Account Balance, the 2005 Revenues
for such account shall be adjusted by multiplying it by a fraction, the
numerator of which is its balance at the Transfer Date and the denominator of
which is its balance on December 31, 2005. For purposes of this subsection, an
account balance shall be materially less than (or greater than) its December 31,
2005 Account Balance if the decrease (or increase) between its Transfer Date and
December 31, 2005 is equal to or greater than 25%. For example, if the account
balance for a Trust Department Account is $600,000 on the Transfer Date and was
$800,000 on December 31, 2005 and its 2005 Revenues was $8,000, its adjusted
2005 Revenues is equal to $600,000/800,000 x $8,000, or $6,000.
Similarly, if the account balance for a Trust Department Account is
$1,000,000 on the Transfer Date and was $800,000 on December 31, 2005 and the
2005 Revenues was $8,000, its adjusted 2005 Revenues is equal to
$1,000,000/$800,000 x $8,000 or $10,000. In both examples, if the decrease (or
increase) in the account balance was less than $200,000, the 2005 Revenues would
not be adjusted, and would continue to be $8,000. No adjustment hereunder shall
increase the Initial Purchase Price above $650,000. Seller shall prepare revised
Exhibits A on each Transfer Date, which shall include the account balance on its
Transfer Date of each Trust Department Account effectively assigned where its
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account balance on the Transfer Date is materially less than (or greater than)
its December 31, 2005 Account Balance and the revised 2005 Revenues for such
accounts.
(v) Notwithstanding subparagraph (iv) above, no payment shall be made for
any Trust Department Account for which an event of termination or a notice of
termination of such account has occurred on or prior to the applicable Transfer
Date
(c) The payment of the Initial Price or the applicable Prorated Purchase
Price as described in subsection (b) above will be made in accordance with the
following schedule:
(i) On October 31, 2006, or such other date as the parties may
mutually agree upon, Buyer will pay to Seller the Initial Price or the
applicable Prorated Purchase Price for the Trust Department Accounts effectively
assigned on that date (hereinafter, the "Initial Transfer Date").
(ii) On or immediately after ninety (90) days from the Initial
Transfer Date, Buyer will pay to Seller the Initial Price or the applicable
Prorated Purchase Price for the Trust Department Accounts effectively assigned
on or prior to that date, less amounts paid to Seller under subsections (c) (i)
above.
(iii) On or immediately after one hundred eighty (180) days from the
Initial Transfer Date, Buyer will pay to Seller the Initial Price or the
applicable Prorated Purchase Price for the Trust Department Accounts effectively
assigned on or prior to that date, less amounts paid to Seller under subsections
(c)(i) and (ii) hereof.
(iv) On or immediately after one year after the Initial Transfer
Date, Buyer will pay to Seller the Initial Price or the applicable Prorated
Purchase Price for the Trust Department Accounts effectively assigned on or
prior to that date, less amounts paid to Seller under subsections (c)(i), (ii)
and (iii) hereof.
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(v) For purposes of this Agreement, the term "effectively assigned"
Trust Department Accounts means those Trust Department Accounts for which Buyer
has a valid and binding Consent, Appointment, or other binding contractual
agreement. Any date on which any Trust Department Account is effectively
assigned after the Initial Transfer Date shall be referred to as a "Subsequent
Transfer Date".
(d) Notwithstanding the foregoing, on and after the Initial Transfer Date,
Buyer agrees to act as agent for Seller with respect to any Trust Department
Accounts for which no valid and binding Consent, Appointment, or other binding
contractual agreement has been received by Buyer (hereinafter, "Non-Assigned
Trust Department Accounts"). Buyer's agreement to act as agent for Seller is an
accommodation to Seller. After said one year, Buyer shall assist Seller in the
transfer or assignment of such Non-Assigned Trust Department Accounts from
Seller, such transfer, assignment or reassignment shall be at no cost or expense
to Seller. Subsequent to the Initial Transfer Date and prior to the effective
assignment of the Non-Assigned Trust Department Accounts, fees accrued shall be
for Buyer's account and Buyer shall use its best efforts to administer the
Non-Assigned Trust Department Accounts in a reasonable manner and subject to the
full indemnification by Seller under Article VI. If, at any time after the
Initial Transfer Date any of the Non-Assigned Trust Department Accounts are
effectively assigned to Buyer, Buyer shall pay the Initial Purchase Price or the
applicable Prorated Purchase Price in accordance with subsections (b) and (c)
above.
1.03 Time and Terms of Payment. Buyer shall pay to Seller the Initial
Purchase Price or the Prorated Purchase Price, as computed to that date (which
computation shall be prepared by Seller and agreed to by Buyer), by wire
transfer of immediately available funds at the times specified in Section 1.02
(c) above.
1.04 Transfer Documentation
(a) Seller shall transfer the Trust Department Accounts to the Buyer
pursuant to bills of sale in substantially the form of Exhibits E, assignment
and assumption agreements in substantially the form of Exhibits F, and such
other documents, assignments and instruments as the Buyer or its counsel may
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reasonably request. At any time and from time to time after the Transfer Date,
at the request of the Buyer and without further consideration, Seller will
execute and deliver such other instruments of sale and confirmation as may be
reasonably requested in order to more effectively transfer to the Buyer and to
confirm the Buyer's title to the Trust Department Accounts.
1.05 Initial Transfer Date. Subject to the provisions of Article V of this
Agreement, the closing of the transactions contemplated by this Agreement shall
take place at such location as Seller and Buyer shall determine on the Initial
Transfer Date which shall be on the third business day after the date on which
all of the conditions contained in Article V are satisfied or waived, or such
other location, date and time as may be agreed upon by the parties.
1.06 Proration. Seller shall deliver to Buyer as part of each transfer of
Trust Department Accounts and Related Assets a schedule which shall accurately
reflects all fees and reimbursements relating to Trust Department Accounts
transferred on each Transfer Date for expenses which relate to services to be
rendered by Buyer following the Initial Transfer Date for which payment was
received by Seller prior to the Transfer Date and all fees and reimbursements
relating to Trust Department Accounts transferred on each Transfer Date for
expenses which related to services rendered by Seller prior to the Initial
Transfer Date for which payment is to be received by Buyer following the
Transfer Date. All such fees and reimbursements shall be prorated as of the
Initial Transfer Date to allocate the same to the periods of service to which
they relate. Buyer and Seller shall make appropriate arrangements to pay to each
other such amounts as appropriate at or as soon as reasonably possible after
each Transfer Date. After the Initial Transfer Date, such schedules shall be
prepared by Buyer, subject to Seller's approval.
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ARTICLE II
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer hereby represents and warrants to Seller as follows:
2.01 Corporate Organization. Buyer is a trust company duly organized,
validly existing and in good standing under the laws of the Commonwealth of
Massachusetts. Buyer has all requisite corporate power and authority to execute,
deliver, and perform this Agreement.
2.02 Authority; No Violation.
(a) The execution, delivery, and performance of this Agreement by Buyer
has been duly authorized by all requisite action on its part. The Agreement has
been duly executed and delivered by Buyer and constitutes a legal, valid, and
binding obligation of Buyer.
(b) The execution, delivery, and performance of this Agreement by Buyer
will not contravene, violate, result in a breach of or constitute a default
under any provision of law or of the charter or by-laws of Buyer, any order of
any court or other government agency having application to Buyer, or any
agreement, indenture, or other instrument to which Buyer is a party or is
otherwise bound.
2.03 Consents and Approvals. No consents, waivers or approvals of, notices
to or filings with any public body or authority are necessary, and no consents
or approvals of any third parties (which term does not include the Board of
Directors of Buyer) are necessary, in connection with (i) the execution and
delivery by Buyer of this Agreement and the other documents referred to herein,
or (ii) the consummation by Buyer of the transactions contemplated by such
agreements.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller hereby represents and warrants to Buyer as follows:
3.01 Corporate Organization. Seller is a national bank duly organized,
validly existing and in good standing under the laws of the United States.
3.02 Authority; No Violation.
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(a) The execution, delivery, and performance of this Agreement by Seller
has been duly authorized by all requisite action on its part. The Agreement has
been duly executed and delivered by Seller and constitutes a legal, valid, and
binding obligation of Seller.
(b) The execution, delivery, and performance of this Agreement by Seller
will not contravene, violate, result in a breach of or constitute a default
under any provision of law or of the charter or by-laws of Seller, any order of
any court or other government agency having application to Seller, or any
agreement, indenture, or other instrument to which Seller is a party or is
otherwise bound.
3.03 Consents and Approvals. Except for the Consents and the Appointments,
no consents, waivers or approvals of, notices to or filings with any public body
or authority are necessary, and no consents or approvals of any third parties
are necessary, in connection with (i) the execution and delivery by Seller of
this Agreement and the other documents referred to herein, or (ii) the
consummation by Seller of the transactions contemplated by such agreements.
3.04 Trust Agreements.
(a) Exhibit G attached hereto sets forth as of the date hereof, and shall
be amended as necessary as of the Initial Transfer Date, (i) a complete and
correct list of all the Trust Department Agreements and (ii) information as to
the capacities of Seller under such Trust Department Agreements. To the Seller's
knowledge, the Seller is acting as the validly-appointed fiduciary or agent
under each Trust Department Agreement and the Seller believes that each Trust
Department Agreement is in full force and effect on the date hereof. There are
no material oral modifications in effect with respect to any of the Trust
Department Agreements.
(b) Seller is not in material breach or non-compliance, nor is Seller
considered to be in breach or non-compliance by the other party thereto, of any
term of any Trust Department Agreement. Seller has made available to Buyer its
default list set forth in Schedule 3 hereto which lists, to the knowledge of
Seller, any material breach or non-compliance by the other party or parties to
the Trust Department Agreements, and except as set forth on such default list,
no event has occurred or failed to occur which event or failure would, with the
passage of time or the giving of notice or both, be a material breach, of any
term of any of the Trust Department Agreements.
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(c) Without limiting the foregoing, to the Seller's knowledge, the Seller
has in all material respects, except as provided in Schedule 3, (i) complied
with all applicable laws and regulations related to the Trust Department
Accounts and Related Assets, including, without limitation, all laws concerning
tax withholding, and filed all necessary returns, reports or schedules in
connection with any such withholding as required under the Trust Department
Agreements; (ii) prepared and filed all income tax returns required to be
prepared or filed by it as grantor, trustee or otherwise; (iii) kept all
necessary records as required by the terms of the Trust Department Agreements;
(iv) fulfilled all of its payment and escheat obligations; (v) paid all
liabilities required to be paid by it under the Trust Department Agreements;
(vi) not made any overpayments or over-advances under the Trust Agreements;
(vii) not waived, amended or modified any provision of any Trust Department
Agreement except in accordance with the provisions of such Trust Department
Agreement and as shown in the records maintained by the Seller and delivered to
the Buyer as Trust Department Accounts and Related Assets; (viii) no current
disputes with co-agents or others as to amounts payable by or to any such
person; and (ix) to the extent required by law or by the applicable Trust
Department Agreements, taken all action to maintain for the benefit of the
holders or other beneficiaries or obligees under the Trust Department Agreements
all interests in collateral granted or pledged to secure obligations thereunder,
including, without limitation, the making of governmental or other filings to
effect, perfect or continue such interests in such collateral.
3.05 Unclaimed Property Reports. Except as provided in Schedule 3, Seller
has filed in accordance with statutory requirements any reports of unclaimed
property required to be filed by it pursuant to Massachusetts law and other
applicable abandoned property law in connection with the Trust Department
Accounts and Related Assets.
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3.06 Compliance with Applicable Laws. Except as provided in Schedule 3,
Seller has complied in all material respects with all applicable laws and
regulations related to the Trust Department Accounts and Related Assets,
including, but not limited to, tax laws and regulations issued by applicable
Federal and state tax authorities. Seller has not received any notice of
violation of, or commencement of any proceeding in connection with any such
violation, and does not know of any violation of, any such laws or regulations
which would have such a result.
3.07 Financial Information. The total cash revenue generated by the Trust
Department of Seller in 2003, 2004 and 2005 was $361,509, $423,479, and
$471,652, respectively.
3.08 Insurance. Seller maintains insurance with respect to the Trust
Department Accounts and Related Assets of the kinds, with respect to the risks,
and in such amounts as are consistent with prudent business practices.
3.09 Surety. Except as provided in Schedule 3 hereto, Seller has not been
required to obtain a surety bond in connection with any of the Trust Department
Accounts and Related Assets.
3.10 Legal Proceedings. Except as provided in Schedule 3 hereto, no civil,
criminal or administrative action, hearing, proceeding, suit, or investigation
is as of the date of this Agreement pending or, to the knowledge of the Seller,
threatened, against the Seller or any of its directors or officers which
questions the validity of this Agreement or challenges any of the transactions
contemplated hereby or otherwise relates to the Trust Department Accounts and
Related Assets.
3.11 Records. Except as provided in Schedule 3 hereto, the records
relating to the Trust Department Accounts and Related Assets being transferred
by Seller to Buyer on each Transfer Date are complete and accurate in all
material respects.
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ARTICLE IV
COVENANTS OF THE PARTIES
4.01 Actions Prior to the Transfer Date. Seller:
(a) shall conduct its trust business only in the ordinary course
consistent with past practices (except as contemplated by this Agreement) prior
to the earlier of the termination of this Agreement or the Initial Transfer
Date;
(b) shall maintain the insurance on the Trust Department Accounts and
Related Assets then owned by Seller in place on the date hereof prior to the
earlier of the termination of this Agreement or the Initial Transfer Date;
(c) shall not increase any salaries or wages of any officer or employee
described in Section 4.07(a) and shall not establish or increase any bonus,
pension, option, incentive or deferred compensation, retirement, death, profit
sharing, or similar benefits of such officers or employees, except in all
instances in the ordinary course and in accordance with past practices
(including annual salary increases in the ordinary course) prior to the earlier
of the termination of this Agreement or the Initial Transfer Date except for
payments to such employees upon separation of service from Seller;
(d) shall not place any encumbrance upon any of the Trust Department
Accounts and Related Assets then owned by Seller prior to the earlier of the
termination of this Agreement or the Initial Transfer Date;
(e) shall not terminate (other than by expiration in accordance with its
terms or by action of the customer) or materially amend or modify any Trust
Department Agreement then owned by Seller, unless the Buyer shall have been
notified of and shall have consented to same during the period from the date of
this Agreement to the earlier of the Initial Transfer Date or the termination of
this Agreement;
(f) shall not do any act or omit to do any act which will cause a material
breach of any contract or commitment that is materially related to the Trust
Department Accounts and Related Assets then owned by Seller during the period
from the date of this Agreement to the earlier of the Initial Transfer Date or
the termination of this Agreement;
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(g) shall not sell or transfer any material Trust Department Accounts and
Related Assets except in the ordinary course during the period from the date of
this Agreement to the earlier the Initial Transfer Date or the termination of
this Agreement;
(h) shall not release any material claims of Seller relating to the Trust
Department Accounts and Related Assets then owned by Seller or waive any
material rights of Seller except in the ordinary course or, with respect to any
Trust Agreement then owned by Seller, unless the Buyer shall have been notified
of the same during the period from the date of this Agreement to the earlier of
the Initial Transfer Date or the termination of this Agreement;
(i) shall use all reasonable efforts to preserve the Trust Department
Accounts and Related Assets then owned by Seller and to keep available the
services of its full-time officers and employees involved with its trust
business prior to the earlier of the termination of this Agreement or the
Initial Transfer Date;
(j) shall comply in all material respects with all applicable laws,
ordinances, rules and regulations relating to the Trust Department Accounts and
Related Assets then owned by Seller prior to the earlier of the termination of
this Agreement or the Initial Transfer Date; and
(k) maintain the books of account and records of the Trust Department
Accounts and Related Assets then owned by Seller in the ordinary course and in
accordance with past practices prior to the earlier of the termination of this
Agreement or the Initial Transfer Date.
4.02 Reasonable Efforts. Buyer and Seller will each use all reasonable
efforts to cause the transaction contemplated by this Agreement to be
consummated in accordance with the terms and conditions herein as promptly as
practicable, provided that the responsibility for effecting the Appointments and
obtaining the Consents shall be borne by Seller. After the Closing, Seller shall
notify all inactive trusts of which it is aware of this Agreement, such notice
to be in the form of Exhibit H attached hereto
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4.03 Meeting of Representatives of the Parties. Seller, in consultation
with Buyer, agrees to arrange mutually convenient personal meetings for its own
and Buyer's representatives for the specific purpose of introducing Buyer
account officers and Buyer affiliate officers engaged in servicing Buyer
accounts and recommending Buyer appointments. All such meetings shall be
scheduled as soon as is practicable following the execution of this Agreement at
such time as Seller shall reasonably determine.
4.04 Costs. Seller covenants and agrees to pay all costs associated with
and resulting from the transfer from Seller to Buyer on each Transfer Date of
all records in the possession of Seller and located at its places of business
relating to Trust Department Accounts and Related Assets. Seller shall retain
original records for Non-Assigned Trust Department Accounts to the extent
required by law or regulation.
4.05 Noncompete. (a) Seller covenants and agrees that it shall not,
directly or indirectly, engage in any Competitive Activity in eastern
Massachusetts for three (3) years from the Initial Transfer Date, or until
Seller is acquired (if that event should occur before the end of such three year
period). "Competitive Activity" shall mean any line of business in which Seller
(or any entity in which it has or acquires a majority interest) acts in a
fiduciary capacity such that it is a trustee holding title to assets for the
benefit of a third party for remuneration; provided, however, "Competitive
Activity" shall not include:
(i) any line of business in which Seller acts as a custodian or
would be deemed a fiduciary by operation of law as a result of functions
traditionally related to banking or financial services, including, but not
limited to, any line of business in which Seller acts as custodian for
Individual Retirement Accounts, 401k Plans or other employer-sponsored benefit
or welfare plans or acts pursuant to Non-Assigned Trust Department Accounts and
Related Assets; or
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(ii) any line of business in which Ipswich Capital Investment
Corporation (an affiliate of Seller) or Infinex Financial Group (in association
with Seller) presently or in the future (either through its present operations
or as a result of a future acquisition) provides wealth and asset management
activities, broker-dealer activities on behalf of customers or (through
individual employees of a subsidiary of Ipswich Capital Investment Corporation)
acts as a trustee or any other fiduciary for its current or future customers but
solely in connection with such wealth and asset management activities or broker
dealer activities.
(b) In the event Seller is acquired, Seller covenants and agrees that it
shall not thereafter (i) solicit to act as, or act as, a trustee or fiduciary
for any of the Trust Department Accounts or Related Assets sold to Buyer for the
balance of the period ending three (3) years from the Initial Transfer Date, or
(ii) solicit to employ, or offer employment to, any of the Trust Department
employees for the balance of the period ending three (3) years from the Initial
Transfer Date.
(c) Seller shall be deemed to be "acquired" if (at any time) either (i)
First Ipswich Bancorp ("Bancorp") shall cease to own (directly or indirectly)
more than 50% of the outstanding common stock of Seller, (ii) the shareholders
of Bancorp immediately preceding a merger, consolidation or reorganization of
Bancorp or Seller shall cease to own more than 50% of the outstanding common
stock of Bancorp (or any successor) after giving effect to such merger,
consolidation or reorganization, or (iii) the "Raymond Family" shall cease to
own more shares of the outstanding common stock of Bancorp than any other
shareholder (or shareholders acting in concert) or shall cease to own at least
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25% of the outstanding common stock of Bancorp. The "Raymond Family" shall mean
Neil St. John Raymond, his spouse, issue and their spouses, and trusts of which
any of the described persons is a beneficiary, which shall include trusts or
custodianship arrangements under retirement plans, and custodian, nominee,
agency or similar arrangements created by (or which benefit) any of the
described persons.
(d) Notwithstanding the foregoing, in the event Seller is acquired,
neither Seller nor its successor shall engage in any Competitive Activity under
the name "The First National Bank of Ipswich", "Ipswich Bank", "Bank of Ipswich"
or any similar variation thereof for the three (3) year period referred to in
Section 4.05(a) above.
4.06 Access to Records. At all times prior to and following the transfer
of Trust Department Accounts, both parties agree that they will (upon reasonable
notice) permit the other party and its affiliates and its and their employees
and agents to review all files and records related to such Trust Department
Accounts and Related Assets, including those records relating to customer
complaints and comments pertaining to Trust Department Accounts, any litigation
relating thereto, and any reports filed with any regulatory or governmental
agencies or associations relating thereto.
4.07 Employees.
(a) Prior to the date hereof, Buyer has offered full-time, at-will
employment on the Initial Transfer Date to Priscilla Cubelli, Christine Drew,
and Thomas Jasalavich (the "Trust Department Employees") in writing. Such
offered employment shall be conditioned upon the Closing and the execution by
the Trust Department Employees of the Buyer's standard non-piracy agreement.
Such offered employment, with respect to each Trust Department Employee, shall
(i) be at the current salaries and (ii) include such benefits as are provided
uniformly to full-time employees of Buyer.
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(b) Buyer shall be responsible for advising the Trust Department Employees
of the details of such employment and answering any questions relating thereto,
but Seller shall provide such assistance and cooperation in this regard as Buyer
may reasonably request.
(c) On the Initial Transfer Date, all of the Trust Department Employees
who shall have accepted Buyer's offer of employment will become employees of
Buyer. Nothing herein shall be deemed to create an obligation on the part of
Buyer to employ any Trust Department Employee for any specific term after the
Initial Transfer Date. All terms of the employment of the Trust Department
Employees shall be subject to change based upon the business needs of Buyer.
ARTICLE V
CLOSING CONDITIONS
5.01 Conditions to the Obligations of Buyer. The obligations of Buyer
under this Agreement shall be subject to the satisfaction or waiver by Buyer, at
or prior to the Initial Transfer Date or the Subsequent Transfer Date as
applicable, of the following conditions:
(a) Performance of Obligations; Representations and Warranties. The
obligations of Seller required to be performed by it at or prior to the Initial
Transfer Date or the Subsequent Transfer Date as applicable pursuant to the
terms of this Agreement shall have been duly performed and complied with in all
material respects and the representations and warranties of Seller contained in
this Agreement shall be true and correct in all material respects as of the date
of this Agreement and as of the Initial Transfer Date or the Subsequent Transfer
Date as applicable as though made at and as of the Initial Transfer Date or the
Subsequent Transfer Date as applicable (except as to any representation or
warranty which specifically relates to an earlier date).
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5.02 Conditions to the Obligations of Seller. The obligations of Seller
under this Agreement shall be subject to the satisfaction or waiver by Seller,
at or prior to the Initial Transfer Date or the Subsequent Transfer Date as
applicable, of the following conditions:
(a) Performance of Obligations; Representations and Warranties. The
obligations of Buyer required to be performed by it at or prior to the Initial
Transfer Date or the Subsequent Transfer Date as applicable pursuant to the
terms of this Agreement shall have been duly performed and complied with in all
material respects and the representations and warranties of Buyer contained in
this Agreement shall be true and correct in all material respects as of the date
of this Agreement and as of the Initial Transfer Date or the Subsequent Transfer
Date as applicable as though made at and as of the Initial Transfer Date or the
Subsequent Transfer Date as applicable (except as to any representation or
warranty which specifically relates to an earlier date).
ARTICLE VI
INDEMNIFICATION
6.01 Trust Indemnification
(a) Seller hereby agrees to indemnify and hold harmless the Buyer from and
against any and all losses, claims, liabilities and damages, including, without
limitation, any and all investigation, legal or other expenses reasonably
incurred by the Buyer in connection with, and any amount paid by the Buyer in
settlement of, any action, suit or proceeding brought against the Seller or the
Buyer, or any claim asserted against the Seller or the Buyer, related to the
Trust Department Accounts and Related Assets transferred to Buyer and arising
out of events that occurred prior to the Transfer Date of the related Trust
Department Account.
(b) Buyer hereby agrees to indemnify and hold harmless the Seller from and
against any and all losses, claims, damages and liabilities, including, without
limitation, any and all investigation, legal and other expenses reasonably
incurred by the Seller in connection with, and any amount paid by the Seller in
settlement of, any action, suit or proceeding brought against the Seller or the
Buyer, related to the Trust Department Accounts and Related Assets transferred
to Buyer and arising out of events that occur on or after the Transfer Date of
the related Trust Department Account.
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(c) Seller hereby agrees to indemnify and hold harmless the Buyer from and
against any and all losses, claims, liabilities and damages, including, without
limitation, any and all investigation, legal or other expenses reasonably
incurred by the Buyer in connection with, and any amount paid by the Buyer in
settlement of, any action, suit or proceeding brought against the Seller or the
Buyer, or any claim asserted against the Seller or the Buyer, related to any
liability not assumed under Section 1.01(a).
(d) Except for actions, suits or proceedings arising primarily from
Buyer's gross negligence or willful misconduct, Seller hereby agrees to
indemnify and hold harmless the Buyer from and against any and all losses,
claims, liabilities and damages, including, without limitation, any and all
investigation, legal or other expenses reasonably incurred by the Buyer in
connection with, and any amount paid by the Buyer in settlement of, any action,
suit or proceeding brought against the Seller or the Buyer, or any claim
asserted against the Seller or the Buyer, related to Buyer's actions as agent
for Seller in connection with the Non-Assigned Trust Department Accounts and
Related Assets. For actions, suits or proceedings arising primarily from Buyer's
gross negligence or willful misconduct, Buyer hereby agrees to indemnify and
hold harmless the Seller from and against any and all losses, claims,
liabilities and damages, including, without limitation, any and all
investigation, legal or other expenses reasonably incurred by the Seller in
connection with, and any amount paid by the Seller in settlement of, any action,
suit or proceeding brought against the Seller or the Buyer, or any claim
asserted against the Seller or the Buyer, related to Buyer's actions as agent
for Seller in connection with the Non-Assigned Trust Department Accounts and
Related Assets.
6.02 General Indemnification. Each party hereto hereby agrees to
indemnify, defend, save and hold harmless the other party hereto from and
against any and all damage, liability, loss, expense, assessment, judgment or
deficiency of any nature whatsoever (including, without limitation, reasonable
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attorneys' fees and other costs and expenses incident to any suit, action or
proceeding) incurred or sustained by the other party which shall arise out of,
result from or constitute any breach by such party of any representation,
warranty or covenant under this Agreement or non-fulfillment by it of any
obligation under this Agreement.
6.03 Broker's Fee Indemnification. Each party hereto hereby agrees to
indemnify, defend, save and hold harmless the other party from any and all
claims of any broker, finder, consultant or other intermediary arising from the
transactions contemplated by this Agreement and attributable to such other
party.
6.04 Claims.
(a) In case any claim shall be made or action brought with respect to a
matter referred to in Sections 6.01, 6.02, or 6.03 hereof, the party entitled to
indemnification (the "Indemnified Party") shall promptly notify the party liable
hereunder (the "Indemnifying Party") in writing, setting forth the particulars
of such claim or action, and the Indemnifying Party shall assume the defense
thereof, including, without limitation, the employment of counsel mutually
satisfactory to it and the Indemnified Party. No such claim shall be settled by
the Indemnified Party without the prior written consent of the Indemnifying
Party. No such claim or action shall be settled by the Indemnifying Party
without the Indemnified Party's prior written consent; provided, however, that
the Indemnified Party shall not unreasonably withhold its consent to any
proposed settlement if (i) such proposed settlement involves only the payment of
money and (ii) the Indemnifying Party demonstrates to the reasonable
satisfaction of the Indemnified Party that the Indemnifying Party is able to pay
the amount of such settlement and all related expenses. If the Indemnifying
Party shall not have employed counsel within a reasonable time after receiving
notice of commencement of any such action, or if the Indemnified Party shall
have concluded that there may be defenses available to it which are different
from or additional to those available to the Indemnifying Party, then the
Indemnified Party may take actions separately in its own defense and employ
separate counsel and all legal and other expenses, including, without
limitation, the reasonable fees and expenses of such counsel, incurred by the
Indemnified Party shall be borne by the Indemnified Party.
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(b) If an Indemnified Party receives any payment from any third party
(including any insurer) as compensation for any claim by the Indemnified Party
after the Indemnifying Party has made any payment under Section 6.01, 6.02 or
6.03 hereof to the Indemnified Party on account of such claim by the Indemnified
Party, then the Indemnified Party shall promptly pay the dollar amount of all
such prior indemnification payments to the Indemnifying Party, without demand or
notice of any kind made by the Indemnifying Party, to the extent of all such
third party payments received by the Indemnified Party.
6.05 Damage Limitations. In no event shall any party hereto be entitled to
recover from the other party hereto for incidental or consequential or exemplary
or punitive damages. Notwithstanding anything to the contrary contained in this
Agreement:
(a) in no event shall Seller have any liability pursuant to the
indemnification provisions of Article VI of this Agreement until the total
cumulative damages shall exceed $10,000, at which time Seller shall be fully
liable for all damages, including with first $10,000.
(b) in no event shall Buyer have any liability pursuant to the
indemnification provisions of Article VI of this Agreement until the total
cumulative damages shall exceed $10,000, at which time Buyer shall be fully
liable for all damages, including the first $10,000.
ARTICLE VII
MISCELLANEOUS
7.01 Arbitration. Any dispute or controversy arising under or in
connection with this Agreement shall be settled exclusively by arbitration in
any forum or form agreed upon by the Buyer and Seller or, in the absence of such
an agreement, by an arbitrator sitting in Boston, Massachusetts, in accordance
with the Commercial Arbitration Rules of the American Arbitration Association
then in effect. Judgment may be entered on the arbitrator's award in any court
having jurisdiction. Each party shall pay its own fees and expenses associated
with the arbitration process.
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7.02 Expenses. Each party hereto shall, except as expressly provided
elsewhere herein, pay its own expenses in connection with this Agreement and the
transaction contemplated hereby, provided Seller shall pay all sales and
transfer taxes in connection with the sale and transfer of the Trust Department
Accounts and Related Assets.
7.03 Confidentiality
Without the prior written consent of the other party hereto, neither
Seller nor Buyer, nor its or their respective affiliates, employees, officers,
or directors shall disclose any term or condition of this Agreement to any other
person or entity except that such disclosure may be made to the extent that (a)
the party making the disclosure believes in good faith and with the advice of
counsel that such disclosure is required by law or (b) the disclosure is
necessary in order to satisfy any of the conditions to consummation of this
Agreement. Any public announcement by Buyer or Seller of the pendency or
consummation of the transactions encompassed by this Agreement shall be made
only pursuant to prior written approval of both parties, except that either
party may make such public disclosure which it believes in good faith to be
required by law.
7.04 Entire Agreement. This Agreement and the exhibits attached hereto
constitute the entire agreement of the parties hereto with respect to the
purchase of the Trust Department Accounts and Related Assets and the other
transactions contemplated herein, and shall supersede any and all prior
understandings and agreements of the parties with respect to the subject matter
hereof, whether written or oral. Any reference herein to this Agreement shall be
deemed to include the exhibits attached hereto and incorporated herein by
reference.
7.05 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Massachusetts applicable to
contracts made and to be performed therein.
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7.06 Headings. The descriptive headings in this Agreement are inserted for
convenience only and do not constitute a part of this Agreement.
7.07 Modification; Termination.
(a) The parties hereto may, by written agreement, modify or amend any of
the covenants or agreements, attend the time for the performance of any
obligation, or waive any inaccuracies in the representations or warranties of
any party hereto contained herein. This Agreement may be amended only by a
written instrument signed by each of the parties.
(b) This Agreement may be terminated at any time prior to the Initial
Transfer Date in accordance with the following provisions:
(i) by mutual written consent of Seller and Buyer;
(ii) by Seller or Buyer if the Initial Transfer Date shall not have
occurred on or prior to November 30, 2006 provided the party seeking to
terminate has not caused material delay in closing;
(iii) by Buyer or Seller if any governmental or regulatory authority
or agency, or court of competent jurisdiction, shall have issued a final
permanent order or injunction enjoining, denying approval of, or otherwise
prohibiting the consummation of the transactions contemplated by this Agreement
and the time for appeal or petition for reconsideration of such order or
injunction shall have expired without such appeal or petition being granted;
(iv) by the Buyer or the Seller (provided that the terminating party
is not then in material breach of any representation, warranty, covenant or
other agreement contained herein), in the event of a material breach by the
other party of any representation, warranty, covenant or other agreement
contained herein which breach is not cured after thirty (30) days written notice
thereof is given to the party committing such breach; or
(v) by Buyer or Seller (provided that the terminating party is not
then in breach of any representation or warranty, covenant or other agreement
contained in this Agreement) in the event that any of the conditions precedent
to the obligations of such party to consummate the transactions contemplated by
this Agreement cannot be by mutual agreement of the parties, satisfied or
fulfilled by the date specified in Section 7.07(b)(ii).
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7.08 Notices
Any notice, request or other document to be given hereunder to any party
hereto shall be in writing and shall be delivered personally or mailed by
prepaid registered or certified mail (return receipt requested) or by telecopy,
cable, telegram, or telex at the following addresses:
If to Buyer:
Eastern Bank
605 Broadway
Saugus, MA 01906
Attention: Sumner W. Jones, Executive Vice President and
Terence A. McGinnis, General Counsel
with a copy to:
Bingham McCutchen LLP
150 Federal Street
Boston, MA 02110
Attention: Neal J. Curtin, Esq. and
Alison L. Booth, Esq.
If to Seller:
The First National Bank of Ipswich
31 Market Street
Ipswich, MA 01938
Attention: Russell G. Cole, President
with a copy to:
Craig and Macauley Professional Corporation
Federal Reserve Plaza
600 Atlantic Avenue
Boston, MA 02210
Attention: David F. Hannon, Esq.
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7.09 Assignment and Third Party Rights. Neither this Agreement nor the
rights and obligations of the parties hereunder may be sold, transferred, or
assigned except with the written consent of each of the parties hereto. However,
Seller or Buyer may transfer its rights and obligations under this Agreement to
an affiliate or successor by merger thereof; provided, however, that in the
event Seller is acquired, a successor by merger shall only assume obligations
under Section 4.05 hereof to the extent provided in Section 4.05(b) and (d)
hereof. This Agreement shall be binding upon, and shall inure solely to the
benefit of, the parties hereto and their respective successors and permitted
assigns. Nothing contained in this Agreement shall be construed as constituting
any rights upon any person or entity other than the parties hereto and their
respective successors and permitted assigns. Nothing contained in this Agreement
shall be construed as constituting a joint venture, partnership, or other
association between the parties except as otherwise expressly provided herein.
7.10 Counterparts. This Agreement may be executed in counterparts, each of
which shall constitute an original, but all of which when taken together shall
constitute but one Agreement.
7.11 Survival of Representations, Warranties, and Covenants. Each of the
representations, warranties, and covenants of the parties hereto shall survive
execution and delivery of this Agreement, any examination by or on behalf of the
parties hereto, and completion of the transactions contemplated hereby.
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IN WITNESS WHEREOF, the parties have set their hands by their duly
authorized officers as of the day and year first above written.
EASTERN BANK
By: /s/ Sumner W. Jones
-----------------------------
Name: Sumner W. Jones
Title: Executive Vice President and
Trust Officer
THE FIRST NATIONAL BANK OF IPSWICH
By: /s/ Russell Cole
-----------------------------
Name: Russell Cole
Title: President and
Chief Executive Officer
INDEX OF EXHIBITS
1. Exhibit A - Trust Department Accounts
2. Exhibit B - Assets
3. Exhibit C - Required Consents and Required Approvals
4. Exhibit D - 2005 Revenues and Current Annual Revenues
5. Exhibit E - Bill of Sale
6. Exhibit F - Assignment and Assumption Agreement
7. Exhibit G - Trust Department Agreements
8. Exhibit H - Notice to Dry Trusts
9. Schedule 3 - Exceptions to Seller's Representations and Warranties