Exhibit 99.1
AGREEMENT AND PLAN OF MERGER
by and between
FLEETBOSTON FINANCIAL CORPORATION
and
SUMMIT BANCORP.
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DATED AS OF OCTOBER 1, 2000
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TABLE OF CONTENTS
ARTICLE I
THE MERGER
1.1. The Merger...................................................2
1.2 Effective Time...............................................2
1.3 Effects of the Merger........................................2
1.4 Conversion of Summit Common Stock............................2
1.5 FleetBoston Capital Stock....................................3
1.6 Options......................................................3
1.7 Articles of Incorporation of FleetBoston.....................4
1.8 By-Laws of FleetBoston.......................................5
1.9 Tax and Accounting Consequences..............................5
ARTICLE II
EXCHANGE OF SHARES
2.1 FleetBoston to Make Shares Available.........................5
2.2 Exchange of Shares...........................................5
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SUMMIT
3.1 Corporate Organization.......................................7
3.2 Capitalization...............................................8
3.3 Authority; No Violation......................................9
3.4 Consents and Approvals......................................10
3.5 Reports.....................................................11
3.6 Financial Statements........................................11
3.7 Broker's Fees...............................................12
3.8 Absence of Certain Changes or Events........................12
3.9 Legal Proceedings...........................................13
3.10 Taxes and Tax Returns.......................................13
3.11 Employees...................................................14
3.12 SEC Reports.................................................15
3.13 Compliance with Applicable Law..............................16
3.14 Certain Contracts...........................................16
3.15 Agreements with Regulatory Agencies.........................17
3.16 Interest Rate Risk Management Instruments...................17
3.17 Undisclosed Liabilities.....................................17
3.18 Environmental Liability.....................................18
3.19 Intellectual Property.......................................18
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3.20 State Takeover Laws; Summit Rights Agreement................19
3.21 Reorganization; Pooling of Interests........................19
3.22 Opinions....................................................19
3.23 Summit Information..........................................19
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF FLEETBOSTON
4.1 Corporate Organization......................................20
4.2 Capitalization..............................................20
4.3 Authority, No Violation.....................................22
4.4 Consents and Approvals......................................22
4.5 Reports.....................................................23
4.6 Financial Statements........................................23
4.7 Broker's Fees...............................................24
4.8 Absence of Certain Changes or Events........................24
4.9 Legal Proceedings...........................................24
4.10 Taxes and Tax Returns.......................................25
4.11 SEC Reports.................................................25
4.12 Compliance with Applicable Law..............................26
4.13 Agreements with Regulatory Agencies.........................26
4.14 Interest Rate Risk Management Instruments...................26
4.15 Undisclosed Liabilities.....................................27
4.16 Environmental Liability.....................................27
4.16 Reorganization; Pooling of Interests........................27
4.17 FleetBoston Information.....................................27
ARTICLE V
COVENANTS RELATING TO CONDUCT OF BUSINESS
5.1 Conduct of Businesses Prior to the Effective Time...........28
5.2 Forbearances................................................28
5.3 FleetBoston Forbearances....................................31
ARTICLE VI
ADDITIONAL AGREEMENTS
6.1 Regulatory Matters..........................................32
6.2 Access to Information.......................................33
6.3 Summit Stockholder Approvals................................34
6.4 Legal Conditions to Merger..................................34
6.5 Affiliates; Publication of Combined Financial Results.......34
6.6 Stock Exchange Listing......................................35
6.7 Employee Benefit Plans......................................35
6.8 Indemnification; Directors' and Officers' Insurance.........36
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6.9 Additional Agreements.......................................37
6.10 Advice of Changes...........................................37
6.11 Dividends...................................................37
6.12 Exemption from Liability Under Section 16(b)................37
6.13 Directorships...............................................38
6.14 Aggregate Capitalization....................................38
6.15 Community Commitments.......................................38
ARTICLE VII
CONDITIONS PRECEDENT
7.1 Conditions to Each Party's Obligation To Effect the Merger..38
7.2 Conditions to Obligations of FleetBoston....................39
7.3 Conditions to Obligations of Summit.........................40
ARTICLE VIII
TERMINATION AND AMENDMENT
8.1 Termination.................................................40
8.2 Effect of Termination.......................................41
8.3 Amendment...................................................41
8.4 Extension; Waiver...........................................42
ARTICLE IX
GENERAL PROVISIONS
9.1 Closing.....................................................42
9.2 Nonsurvival of Representations, Warranties and Agreements...42
9.3 Expenses....................................................42
9.4 Notices.....................................................42
9.5 Interpretation..............................................43
9.6 Counterparts................................................44
9.7 Entire Agreement............................................44
9.8 Governing Law...............................................44
9.9 Publicity...................................................44
9.10 Assignment; Third Party Beneficiaries.......................44
Exhibit A - Summit Option Agreement
Exhibit 6.5(a)(1) - Form of Affiliate Letter Addressed to Summit
Exhibit 6.5(a)(2) - Form of Affiliate Letter Addressed to FleetBoston
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INDEX OF DEFINED TERMS
Page No.
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Agreement........................................................ 1
Articles of Merger............................................... 2
Bank Merger...................................................... 1
BHC Act.......................................................... 8
Certificate...................................................... 3
Certificate of Merger............................................ 2
Closing.......................................................... 42
Closing Date..................................................... 42
Code............................................................. 1
Covered Employees................................................ 32
Distribution Date................................................ 19
DPC Shares....................................................... 3
Effective Time................................................... 2
ERISA............................................................ 14
Exchange Act..................................................... 11
Exchange Agent................................................... 5
Exchange Fund.................................................... 5
Exchange Ratio................................................... 3
Federal Reserve Board............................................ 10
FleetBoston...................................................... 1
FleetBoston Articles............................................. 19
FleetBoston Capital Stock........................................ 3
FleetBoston Common Stock......................................... 3
FleetBoston Disclosure Schedule.................................. 20
FleetBoston Preferred Stock...................................... 3
FleetBoston Regulatory Agreement................................. 26
FleetBoston Reports.............................................. 25
FleetBoston Rights Agreement..................................... 3
FleetBoston Stock Plans.......................................... 21
FleetBoston Stockholder Rights................................... 3
FleetBoston Subsidiary........................................... 8
FleetBoston 1999 Financial Information........................... 23
FleetBoston Warrants............................................. 21
GAAP............................................................. 5
Governmental Entity.............................................. 11
HSR Act.......................................................... 10
Information...................................................... 33
Insurance Amount................................................. 37
Intellectual Property............................................ 18
IRS.............................................................. 13
Liens............................................................ 9
Material Adverse Effect.......................................... 7
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Merger........................................................... 1
Merger Consideration............................................. 2
NJBCA............................................................ 2
NYSE............................................................. 6
Proxy Statement.................................................. 10
Receiving Party.................................................. 33
Regulatory Agencies.............................................. 11
RIBCA............................................................ 2
SBA.............................................................. 10
SEC.............................................................. 10
Section 16 Information........................................... 37
Securities Act................................................... 15
SRO.............................................................. 10
State Approvals.................................................. 10
Stock Acquisition Date........................................... 19
Subsidiary....................................................... 8
Summit........................................................... 1
Summit Bank Subsidiary........................................... 1
Summit Benefit Plans............................................. 14
Summit By-Laws................................................... 8
Summit Capital Stock............................................. 8
Summit Certificate............................................... 8
Summit Common Stock.............................................. 2
Summit Contract.................................................. 17
Summit Disclosure Schedule....................................... 7
Summit ERISA Affiliate........................................... 14
Summit Insiders.................................................. 37
Summit Option Agreement.......................................... 1
Summit Regulatory Agreement...................................... 17
Summit Reports................................................... 15
Summit Rights.................................................... 8
Summit Rights Agreement.......................................... 2
Summit Stock Plans............................................... 4
Summit Stockholder Rights........................................ 2
Summit Subsidiary................................................ 8
Summit 1999 10-K................................................. 11
Surviving Corporation............................................ 1
S-4.............................................................. 10
Tax(es).......................................................... 13
Trust Account Shares............................................. 3
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of October 1, 2000 (this
"Agreement"), by and between Summit Bancorp., a New Jersey corporation
("Summit"), and FleetBoston Financial Corporation, a Rhode Island corporation
("FleetBoston").
W I T N E S S E T H:
WHEREAS, the Boards of Directors of Summit and FleetBoston have
determined that it is in the best interests of their respective companies and
their stockholders to consummate the strategic business combination transaction
provided for herein in which Summit will, subject to the terms and conditions
set forth herein, merge with and into FleetBoston (the "Merger"), so that
FleetBoston is the surviving corporation in the Merger (sometimes referred to in
such capacity as the "Surviving Corporation"); and
WHEREAS, as a condition to the execution of this Agreement, and
simultaneously with the execution hereof, Summit and FleetBoston are entering
into a stock option agreement (the "Summit Option Agreement") in the form
attached hereto as Exhibit A; and
WHEREAS, for Federal Income Tax purposes, it is intended that the
Merger shall qualify as a reorganization under the provisions of Section 368 of
the Internal Revenue Code of 1986, as amended (the "Code"), and this Agreement
is intended to be and is adopted as a plan of reorganization for purposes of
Sections 354, 361 and 368 of the Code; and
WHEREAS, the parties intend to effect the merger of Summit's bank
subsidiaries (the "Summit Bank Subsidiaries") with and into Fleet National Bank,
promptly following the Merger (the "Bank Merger"); and
WHEREAS, the parties desire to make certain representations,
warranties and agreements in connection with the Merger and also to prescribe
certain conditions to the Merger.
NOW, THEREFORE, in consideration of the mutual covenants,
representations, warranties and agreements contained herein, and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, and intending to be legally bound hereby, the parties agree as
follows:
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ARTICLE I
THE MERGER
1.1 The Merger. (a) Subject to the terms and conditions of this
Agreement, in accordance with the New Jersey Business Corporation Act (the
"NJBCA") and the Rhode Island Business Corporation Act (the "RIBCA"), at the
Effective Time, Summit shall merge with and into FleetBoston. FleetBoston shall
be the Surviving Corporation in the Merger, and shall continue its corporate
existence under the laws of the State of Rhode Island.
(b) FleetBoston may at any time change the method of effecting the
combination with Summit (including by providing for the merger of a wholly owned
subsidiary of FleetBoston with and into Summit) if and to the extent FleetBoston
deems such change to be desirable; PROVIDED, HOWEVER, that no such change shall
(i) alter or change the amount or kind of consideration to be issued to holders
of the capital stock of Summit as provided for in this Agreement (the "Merger
Consideration"), (ii) adversely affect the Tax treatment of Summit's
stockholders as a result of receiving the Merger Consideration or (iii)
materially impede or delay consummation of the transactions contemplated by this
Agreement.
1.2 Effective Time. The Merger shall become effective as set forth
in the articles of merger (the "Articles of Merger") that shall be filed with
the Secretary of State of the State of Rhode Island and the certificate of
merger (together with the Articles of Merger, the "Certificate of Merger") that
shall be filed with the Secretary of State of the State of New Jersey on the
Closing Date. The term "Effective Time" shall be the date and time when the
Merger becomes effective as set forth in the Certificate of Merger which shall
not be later than the Closing Date.
1.3 Effects of the Merger. At and after the Effective Time, the
Merger shall have the effects set forth in Section 7-1.1-69 of the RIBCA and
Section 14A:10-6 of the NJBCA.
1.4 Conversion of Summit Common Stock. At the Effective Time, by
virtue of the Merger and without any action on the part of FleetBoston, Summit
or the holder of any of the following securities:
(a) Subject to Section 2.2(e), each share of the common stock, par
value $0.80 per share, of Summit issued and outstanding immediately prior to the
Effective Time (together with the preferred stock purchase rights ("Summit
Stockholder Rights") attached thereto issued pursuant to that certain Rights
Agreement, between Summit and First Chicago Trust Company of New York, dated as
of June 16, 1999 (the "Summit Rights Agreement"), the "Summit Common Stock"),
except for shares of Summit Common Stock owned by Summit as treasury stock or
owned, directly or indirectly, by Summit or (other than shares of Summit Common
Stock held, directly or indirectly, in trust accounts, managed accounts and the
like, or otherwise held in a fiduciary capacity, that are beneficially owned by
third parties (any such shares of Summit Common Stock
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or FleetBoston Common Stock which are similarly held, whether held directly or
indirectly by Summit or FleetBoston, as the case may be, being referred to
herein as "Trust Account Shares") and other than any shares of Summit Common
Stock held by Summit or FleetBoston in respect of a debt previously contracted
(any such shares of Summit Common Stock, and shares of FleetBoston Common Stock
which are similarly held, whether held directly or indirectly by Summit or
FleetBoston, being referred to herein as "DPC Shares")), shall be converted into
the right to receive 1.02 shares (the "Exchange Ratio") of the common stock, par
value $0.01 per share, of FleetBoston (together with the preferred stock
purchase rights (the "FleetBoston Stockholder Rights") attached thereto pursuant
to that certain Rights Agreement, dated as of August 16, 2000, between
FleetBoston and Equiserve, LP, as Rights Agent (the "FleetBoston Rights
Agreement"), the "FleetBoston Common Stock").
(b) All of the shares of Summit Common Stock converted into the
right to receive FleetBoston Common Stock pursuant to this Article I shall no
longer be outstanding and shall automatically be cancelled and shall cease to
exist as of the Effective Time, and each certificate previously representing any
such shares of Summit Common Stock (each a "Certificate") shall thereafter
represent only the right to receive (i) a certificate representing the number of
whole shares of FleetBoston Common Stock and (ii) cash in lieu of fractional
shares into which the shares of Summit Common Stock represented by such
Certificate have been converted pursuant to this Section 1.4 and Section 2.2(e).
Certificates previously representing shares of Summit Common Stock shall be
exchanged for certificates representing whole shares of FleetBoston Common Stock
and cash in lieu of fractional shares issued in consideration therefor upon the
surrender of such Certificates in accordance with Section 2.2, without any
interest thereon. If, prior to the Effective Time, the outstanding shares of
FleetBoston Common Stock or Summit Common Stock shall have been increased,
decreased, changed into or exchanged for a different number or kind of shares or
securities as a result of a reorganization, recapitalization, reclassification,
stock dividend, stock split, reverse stock split, or other similar change in
capitalization, an appropriate and proportionate adjustment shall be made to the
Exchange Ratio.
(c) Notwithstanding anything in the Agreement to the contrary, at
the Effective Time, all shares of Summit Common Stock that are owned, directly
or indirectly, by Summit or FleetBoston (other than Trust Account Shares and DPC
Shares) shall be cancelled and shall cease to exist and no stock of FleetBoston
or other consideration shall be delivered in exchange therefor.
1.5 FleetBoston Capital Stock. At and after the Effective Time,
each share of FleetBoston Common Stock and each share of preferred stock, par
value $1.00 per share, of FleetBoston ("FleetBoston Preferred Stock," and
together with the FleetBoston Common Stock, the "FleetBoston Capital Stock")
issued and outstanding immediately prior to the Effective Time shall remain
issued and outstanding and shall not be affected by the Merger.
1.6 Options. (a) At the Effective Time, each option granted by
Summit to purchase shares of Summit Common Stock which is outstanding and
unexercised immediately prior thereto shall cease to represent a right to
acquire shares of Summit
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Common Stock and shall be converted automatically into an option to purchase
shares of FleetBoston Common Stock in an amount and at an exercise price
determined as provided below (and otherwise subject to the terms of, as the case
may be, the Converted Summit Bancorporation Stock Option Plan, Summit Bancorp.
1993 Incentive Stock and Option Plan, as amended, the UJB Financial Corp. 1990
Stock Option Plan, as amended, Management Incentive Plan, United Jersey Banks
1982 Stock Option Plan, as amended, Summit Bancorp, 1999 Non-Executive Option
Plan, as amended, United Jersey Banks 1987 Stock Option Plan, as amended,
Converted Collective Bancorp, Inc. Stock Option Plan of Summit Bancorp.,
Converted Bancorp NJ Stock Option Plan, Converted BMJ Financial Corp. Stock
Option Plan, Converted NMBT Stock Option Plan, Converted NSS Bancorp Stock
Option Plan, Converted New Canaan Bank & Trust Stock Option Plan, Converted
Price Bancorp Stock Option Plan (collectively, the "Summit Stock Plans"), and
the agreements evidencing grants thereunder):
(i) The number of shares of FleetBoston Common Stock to be
subject to the new option shall be equal to the product of the
number of shares of Summit Common Stock subject to the original
option and the Exchange Ratio, provided that any fractional shares
of FleetBoston Common Stock resulting from such multiplication shall
be rounded to the nearest whole share; and
(ii) The exercise price per share of FleetBoston Common Stock
under the new option shall be equal to the exercise price per share
of Summit Common Stock under the original option divided by the
Exchange Ratio, provided that such exercise price shall be rounded
to the nearest whole cent.
(b) The adjustment provided herein with respect to any options
which are "incentive stock options" (as defined in Section 422 of the Code)
shall be and is intended to be effected in a manner which is consistent with
Section 424(a) of the Code. The duration and other terms of the new option shall
be the same as the original option except that all references to Summit shall be
deemed to be references to FleetBoston.
(c) FleetBoston shall take all corporate action necessary to
reserve for issuance a sufficient number of shares of FleetBoston Common Stock
for delivery upon exercise of Summit Stock Options, as adjusted in accordance
with this Section 1.6. As soon as practicable after the Effective Time,
FleetBoston shall file a registration statement on Form S-8 (or any successor or
other appropriate forms), with respect to the shares of FleetBoston Common Stock
subject to such options and shall use its reasonable best efforts to maintain
the effectiveness of such registration statement or registration statements (and
maintain the current status of the prospectus or prospectuses contained therein)
for so long as such options remain outstanding.
1.7 Articles of Incorporation of FleetBoston. At the Effective
Time, the FleetBoston Articles shall be the articles of incorporation of the
Surviving Corporation until thereafter amended in accordance with applicable
law.
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1.8 By-Laws of FleetBoston. At the Effective Time, the FleetBoston
By-Laws shall be the By-Laws of the Surviving Corporation until thereafter
amended in accordance with applicable law.
1.9 Tax and Accounting Consequences. It is intended that the Merger
shall constitute a "reorganization" within the meaning of Section 368(a) of the
Code, that this Agreement shall constitute a "plan of reorganization" for the
purposes of Sections 354, 361 and 368 of the Code and that the Merger shall be
accounted for as a "pooling of interests" under generally accepted accounting
principles ("GAAP").
ARTICLE II
EXCHANGE OF SHARES
2.1 FleetBoston to Make Shares Available. At or prior to the
Effective Time, FleetBoston shall deposit, or shall cause to be deposited, with
a bank or trust company Subsidiary of FleetBoston, or another bank or trust
company reasonably acceptable to each of Summit and FleetBoston (the "Exchange
Agent"), for the benefit of the holders of Certificates, for exchange in
accordance with this Article II, certificates representing the shares of
FleetBoston Common Stock, and cash in lieu of any fractional shares (such cash
and certificates for shares of FleetBoston Common Stock, together with any
dividends or distributions with respect thereto, being hereinafter referred to
as the "Exchange Fund"), to be issued pursuant to Section 1.4 and paid pursuant
to Section 2.2(a) in exchange for outstanding shares of Summit Common Stock.
2.2 Exchange of Shares. (a) As soon as practicable after the
Effective Time, but in no event more than 10 days after the later of the Closing
Date or the date the Exchange Agent shall have received from Summit a
substantially complete list of the final shareholders of Summit as of the
Effective Time, the Exchange Agent shall mail to each holder of record of one or
more Certificates a letter of transmittal in customary form as reasonably agreed
to by the parties (which shall specify, among other things, 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) and instructions for
use in effecting the surrender of the Certificates in exchange for certificates
representing the shares of FleetBoston Common Stock and any cash in lieu of
fractional shares into which the shares of Summit Common Stock represented by
such Certificate or Certificates shall have been converted pursuant to this
Agreement. Upon proper surrender of a Certificate or Certificates for exchange
and cancellation to the Exchange Agent, together with such properly completed
letter of transmittal, duly executed, the holder of such Certificate or
Certificates shall be entitled to receive in exchange therefor, as applicable,
(i) a certificate representing that number of whole shares of FleetBoston Common
Stock to which such holder of Summit Common Stock shall have become entitled
pursuant to the provisions of Article I, (ii) a check representing the amount of
any cash in lieu of fractional shares which such holder has the right to receive
in respect of the Certificate or Certificates surrendered pursuant to the
provisions of this Article II, and (iii) a check representing the amount of any
dividends or distributions then payable pursuant to Section 2.2(b)(i) and the
Certificate or Certificates so surrendered shall
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forthwith be cancelled. No interest will be paid or accrued on any cash in lieu
of fractional shares or on any unpaid dividends and distributions payable to
holders of Certificates.
(b) No dividends or other distributions declared with respect to
FleetBoston Common Stock shall be paid to the holder of any unsurrendered
Certificate until the holder thereof shall surrender such Certificate in
accordance with this Article II. After the surrender of a Certificate in
accordance with this Article II, the record holder thereof shall be entitled to
receive (i) the amount of dividends or other distributions with a record date
after the Effective Time theretofore paid, without any interest thereon, which
theretofore had become payable and (ii), at the appropriate payment date, the
amount of dividends or other distributions with a record date after the
Effective Time but prior to surrender and a payment date subsequent to
surrender, with respect to shares of FleetBoston Common Stock represented by
such Certificate.
(c) If any certificate representing shares of FleetBoston Common
Stock is to be issued in a name other than that in which the Certificate or
Certificates surrendered in exchange therefor is or are registered, it shall be
a condition of the issuance thereof that the Certificate or Certificates so
surrendered shall be properly endorsed (or accompanied by an appropriate
instrument of transfer) and otherwise in proper form for transfer, and that the
person requesting such exchange shall pay to the Exchange Agent in advance any
transfer or other Taxes required by reason of the issuance of a certificate
representing shares of FleetBoston Common Stock in any name other than that of
the registered holder of the Certificate or Certificates 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.
(d) After the Effective Time, there shall be no transfers on the
stock transfer books of Summit of the shares of Summit Capital Stock that were
issued and outstanding immediately prior to the Effective Time other than to
settle transfers of Summit Common Stock that occurred prior to the Effective
Time and otherwise as necessary to prepare a list of the final shareholders of
Summit. If, after the Effective Time, Certificates representing such shares are
presented for transfer to the Exchange Agent, they shall be cancelled and
exchanged for certificates representing shares of FleetBoston Common Stock as
provided in this Article II.
(e) Notwithstanding anything to the contrary contained herein, no
certificates or scrip representing fractional shares of FleetBoston Common Stock
shall be issued upon the surrender for exchange of Certificates, no dividend or
distribution with respect to FleetBoston Common Stock shall be payable on or
with respect to any fractional share, and such fractional share interests shall
not entitle the owner thereof to vote or to any other rights of a stockholder of
FleetBoston. In lieu of the issuance of any such fractional share, FleetBoston
shall pay to each former stockholder of Summit who otherwise would be entitled
to receive such fractional share an amount in cash determined by multiplying (i)
the average of the closing-sale prices of FleetBoston Common Stock on the New
York Stock Exchange, Inc. (the "NYSE") as reported by The Wall Street Journal
for the five trading days immediately preceding the date of the Effective Time
by (ii) the fraction of a share (rounded to the nearest thousandth when
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expressed in decimal form) of FleetBoston Common Stock to which such holder
would otherwise be entitled to receive pursuant to Section 1.4.
(f) Any portion of the Exchange Fund that remains unclaimed by the
stockholders of Summit for 12 months after the Effective Time shall be paid to
FleetBoston. Any former stockholders of Summit who have not theretofore complied
with this Article II shall thereafter look only to FleetBoston for payment of
the shares of FleetBoston Common Stock, cash in lieu of any fractional shares
and any unpaid dividends and distributions on the FleetBoston Common Stock
deliverable in respect of each share of Summit Common Stock, as the case may be,
such stockholder holds as determined pursuant to this Agreement, in each case,
without any interest thereon. Notwithstanding the foregoing, none of
FleetBoston, Summit, the Exchange Agent or any other person shall be liable to
any former holder of shares of Summit Common Stock for any amount delivered in
good faith to a public official pursuant to applicable abandoned property,
escheat or similar laws.
(g) 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 reasonably required by
FleetBoston, the posting by such person of a bond in such amount as FleetBoston
may determine is reasonably necessary 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 shares of
FleetBoston Common Stock and any cash in lieu of fractional shares deliverable
in respect thereof pursuant to this Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SUMMIT
Except as disclosed in Summit disclosure schedule delivered to
FleetBoston prior to the execution of this Agreement (the "Summit Disclosure
Schedule"), Summit hereby represents and warrants to FleetBoston as follows:
3.1 Corporate Organization. (a) Summit is a corporation duly
organized, validly existing and in good standing under the laws of the State of
New Jersey. Summit 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, and is duly licensed or qualified to do business in each jurisdiction
in which the nature of the business conducted by it or the character or location
of the properties and assets owned or leased by it makes such licensing or
qualification necessary, except where the failure to be so licensed or qualified
would not, either individually or in the aggregate, have a Material Adverse
Effect on Summit. As used in this Agreement, the term "Material Adverse Effect"
means, with respect to FleetBoston, Summit or the Surviving Corporation, as the
case may be, a material adverse effect on (i) the business, results of
operations or financial condition of such party and its Subsidiaries taken as a
whole or (ii) the ability of such party to timely consummate the transactions
contemplated hereby; provided, however, that Material Adverse Effect shall not
be deemed to include
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effects to the extent resulting from (a) changes in generally accepted
accounting principles or regulatory accounting requirements applicable to banks
or savings associations and their holding companies generally, (b) actions or
omissions of FleetBoston or Summit taken with the prior written consent of the
other in contemplation of the transactions contemplated hereby and (c) changes
in general economic conditions affecting banks or their holding companies
generally.
3.2 As used in this Agreement, the word "Subsidiary" when used with
respect to any party, means any bank, corporation, partnership, limited
liability company, or other organization, whether incorporated or
unincorporated, which is consolidated with such party for financial reporting
purposes, and the words "Summit Subsidiary" and "FleetBoston Subsidiary" shall
mean any direct or indirect Subsidiary of Summit or FleetBoston, respectively.
Summit is duly registered as a bank holding company under the Bank Holding
Company Act of 1956, as amended (the "BHC Act"). True and complete copies of the
Restated Certificate of Incorporation of Summit (the "Summit Certificate") and
the By-Laws of Summit (the "Summit By-Laws") have previously been made available
by Summit to FleetBoston.
(b) Each of Summit's Subsidiaries (i) is duly organized and validly
existing under the laws of its jurisdiction of organization, (ii) is duly
qualified to do business and in good standing in all jurisdictions (whether
federal, state, local or foreign) where its ownership or leasing of property or
the conduct of its business requires it to be so qualified and in which the
failure to be so qualified would have a Material Adverse Effect on Summit and
(iii) has all requisite corporate power and authority to own or lease its
properties and assets and to carry on its business as now conducted.
3.3 Capitalization. (a) The authorized capital stock of Summit
consists of (i) 390,000,000 shares of Summit Common Stock, of which, as of
September 28, 2000, 173,591,527 shares were issued and outstanding and 3,671,290
shares were held in treasury, and (ii) 6,000,000 shares of preferred stock,
without par value and together with Summit Common Stock, "Summit Capital
Stock"), of which no shares are issued or outstanding. All of the issued and
outstanding shares of Summit Common Stock have been duly authorized and validly
issued and are fully paid, nonassessable and free of preemptive rights, with no
personal liability attaching to the ownership thereof. As of the date of this
Agreement, except as described in this Section 3.2(a) and except pursuant to the
terms of (i) Summit Option Agreement, (ii) options issued pursuant to Summit
Stock Plans and (iii) Summit Rights Agreement, Summit does not have and is not
bound by any outstanding subscriptions, options, warrants, calls, commitments or
agreements of any character calling for the purchase or issuance of any shares
of Summit Capital Stock or any other equity securities of Summit or any
securities representing the right to purchase or otherwise receive any shares of
Summit Capital Stock (collectively, including the items contemplated by clauses
(i) through (iii) of this sentence, the "Summit Rights"). As of September 30,
2000, no shares of Summit Capital Stock were reserved for issuance, except for
68,846 shares of Summit Common Stock reserved for issuance in connection with
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Summit Automatic Dividend Reinvestment and Common Stock Purchase Plan (the
"Summit DRIP"), 19,173,336 shares of Summit Common Stock reserved for issuance
upon the exercise of stock options pursuant to Summit Stock Plans and in respect
of the employee and director savings, compensation and deferred compensation
plans described in Section 3.11(a) of Summit Disclosure Schedule and 1,772,629
Series S Preferred Shares of Summit, reserved for issuance in connection with
Summit Rights Agreement. Since September 28, 2000, Summit has not issued any
shares of its capital stock or any securities convertible into or exercisable
for any shares of its capital stock, other than as permitted by Section 5.2(b).
Summit has previously provided FleetBoston with a list of the aggregate number
of options outstanding under Summit Stock Plans as of September 28, 2000 and the
weighted average exercise price for such options.
(b) Summit owns, directly or indirectly, all of the issued and
outstanding shares of capital stock or other equity ownership interests of each
of Summit's Subsidiaries, free and clear of any material liens, pledges, charges
and security interests and similar encumbrances ("Liens"), and all of such
shares or equity ownership interests are duly authorized and validly issued and
are fully paid, nonassessable and free of preemptive rights, with no personal
liability attaching to the ownership thereof. No Summit Subsidiary has or is
bound by any outstanding subscriptions, options, warrants, calls, commitments or
agreements of any character calling for the purchase or issuance of any shares
of capital stock or any other equity security of such Subsidiary or any
securities representing the right to purchase or otherwise receive any shares of
capital stock or any other equity security of such Subsidiary. Section 3.2(b) of
Summit Disclosure Schedule sets forth a list of the material investments of
Summit in corporations, joint ventures, partnerships, limited liability
companies and other entities other than its Subsidiaries.
3.4 Authority; No Violation. (a) Summit has full corporate power
and authority to execute and deliver this Agreement and Summit Option Agreement
and to consummate the transactions contemplated hereby and thereby. The
execution and delivery of this Agreement and Summit Option Agreement and the
consummation of the transactions contemplated hereby and thereby have been duly
and validly approved by the Board of Directors of Summit. The Board of Directors
of Summit has determined that this Agreement and the transactions contemplated
hereby are in the best interests of Summit and its stockholders and has directed
that this Agreement and the transactions contemplated hereby be submitted to
Summit's stockholders for adoption at a duly held meeting of such stockholders
and, except for the approval of this Agreement and the transactions contemplated
hereby by the affirmative vote of the holders of a majority of the outstanding
shares of Summit Common Stock voted at such meeting, no other corporate
proceedings on the part of Summit are necessary to approve this Agreement or
Summit Option Agreement or to consummate the transactions contemplated hereby or
thereby. This Agreement and Summit Option Agreement have been duly and validly
executed and delivered by Summit and (assuming due authorization, execution and
delivery by FleetBoston) constitute valid and binding obligations of Summit,
enforceable against Summit in accordance with its terms (except as may be
limited by bankruptcy, insolvency, moratorium, reorganization or similar
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laws affecting the rights of creditors generally and the availability of
equitable remedies).
(b) Neither the execution and delivery of this Agreement or Summit
Option Agreement by Summit nor the consummation by Summit of the transactions
contemplated hereby or thereby, nor compliance by Summit with any of the terms
or provisions hereof or thereof, will (i) violate any provision of Summit
Certificate or Summit By-Laws or (ii) assuming that the consents and approvals
referred to in Section 3.4 are duly obtained, (x) violate any statute, code,
ordinance, rule, regulation, judgment, order, writ, decree or injunction
applicable to Summit, any of its Subsidiaries or any of their respective
properties or assets or (y) violate, conflict with, result in a breach of any
provision of or the loss of any benefit under, 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 or a right of termination or cancellation under,
accelerate the performance required by, or result in the creation of any Lien
upon any of the respective properties or assets of Summit, any of its
Subsidiaries under, any of the terms, conditions or provisions of any note,
bond, mortgage, indenture, deed of trust, license, lease, agreement or other
instrument or obligation to which Summit or any of its Subsidiaries is a party,
or by which they or any of their respective properties or assets may be bound or
affected, except (in the case of clause (y) above) for such violations,
conflicts, breaches or defaults which, either individually or in the aggregate,
will not have a Material Adverse Effect on Summit.
3.5 Consents and Approvals. Except for (i) the filing of
applications and notices, as applicable, with the Board of Governors of the
Federal Reserve System (the "Federal Reserve Board") under the BHC Act and the
Federal Reserve Act, as amended, and approval of such applications and notices,
(ii) the filing of any required applications or notices with any state agencies
and approval of such applications and notices (the "State Approvals"), (iii) the
filing with the Securities and Exchange Commission (the "SEC") of a proxy
statement in definitive form relating to the meetings of Summit's stockholders
to be held in connection with this Agreement and the transactions contemplated
hereby (the "Proxy Statement"), and of the registration statement on Form S-4
(the "S-4") in which the Proxy Statement will be included as a prospectus, (iv)
the filing of the Articles of Merger with the Rhode Island Secretary pursuant to
the RIBCA and the issuance by the Rhode Island Secretary of a Certificate of
Merger and the filing of the Articles of Merger with the Secretary of State of
the State of New Jersey pursuant to the NJBCA, (v) any notices to or filings
with the Small Business Administration (the "SBA"), (vi) any notices or filings
under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the
"HSR Act"), (vii) any consents, authorizations, approvals, filings or exemptions
in connection with compliance with the applicable provisions of federal and
state securities laws relating to the regulation of broker-dealers, investment
advisers or transfer agents, and federal commodities laws relating to the
regulation of futures commission merchants and the rules and regulations
thereunder and of any applicable industry self-regulatory organization ("SRO"),
and the rules of the NYSE, or which are required under consumer finance,
mortgage banking and other similar laws, (viii) such filings and approvals as
are required to be made or obtained under the securities or "Blue Sky" laws of
various states
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in connection with the issuance of the shares of FleetBoston Common Stock
pursuant to this Agreement, and (ix) the approval of this Agreement by the
requisite vote of stockholders of Summit, no consents or approvals of or filings
or registrations with any court, administrative agency or commission or other
governmental authority or instrumentality (each a "Governmental Entity") are
necessary in connection with (A) the execution and delivery by Summit of this
Agreement and Summit Option Agreement and (B) the consummation by Summit of the
Merger and the other transactions contemplated hereby and by Summit Option
Agreement.
3.6 Reports. Summit and each of its Subsidiaries have timely filed
all reports, registrations and statements, together with any amendments required
to be made with respect thereto, that they were required to file since January
1, 1997 with (i) the Federal Reserve Board, (ii) the Federal Deposit Insurance
Corporation, (iii) any state regulatory authority, (iv) the SEC, (v) any foreign
regulatory authority and (vi) any SRO (collectively, "Regulatory Agencies"), and
all other reports and statements required to be filed by them since January 1,
1997, including, without limitation, any report or statement required to be
filed pursuant to the laws, rules or regulations of the United States, any
state, any foreign entity, or any Regulatory Agency, and have paid all fees and
assessments due and payable in connection therewith, except where the failure to
file such report, registration or statement or to pay such fees and assessments,
either individually or in the aggregate, will not have a Material Adverse Effect
on Summit. Except for normal examinations conducted by a Regulatory Agency in
the ordinary course of the business of Summit and its Subsidiaries, no
Regulatory Agency has initiated or has pending any proceeding or, to the best
knowledge of Summit, investigation into the business or operations of Summit or
any of its Subsidiaries since January 1, 1997, except where such proceedings or
investigation will not, either individually or in the aggregate, have a Material
Adverse Effect on Summit. There (i) is no unresolved violation, criticism, or
exception by any Regulatory Agency with respect to any report or statement
relating to any examinations or inspections of Summit or any of its Subsidiaries
and (ii) has been no formal or informal inquiries by, or disagreements or
disputes with, any Regulatory Agency with respect to the business, operations
policies or procedures of Summit since January 1, 1997, which, in the reasonable
judgment of Summit, will, either individually or in the aggregate, have a
Material Adverse Effect on Summit.
3.7 Financial Statements. Summit has previously made available to
FleetBoston copies of (i) the consolidated balance sheet of Summit and its
Subsidiaries as of December 31, for the fiscal years 1998 and 1999, and the
related consolidated statements of income, changes in shareholders' equity and
cash flows for the fiscal years 1997 through 1999, inclusive, as reported in
Summit's Annual Report on Form 10-K for the fiscal year ended December 31, 1999
(the "Summit 1999 10-K") filed with the SEC under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), accompanied by the audit report of KPMG
LLP, independent public accountants with respect to Summit and (ii) the
unaudited consolidated balance sheet of Summit and its Subsidiaries as of June
30, 1999 and 2000, and the related consolidated statements of income, changes in
shareholders' equity and cash flows of the six month periods then ended, as
reported in Summit's Quarterly Report on Form 10-Q for the fiscal period
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ended June 30, 2000. The December 31, 1999 consolidated balance sheet of Summit
(including the related notes, where applicable) fairly presents in all material
respects the consolidated financial position of Summit and its Subsidiaries as
of the date thereof, and the other financial statements referred to in this
Section 3.6 (including the related notes, where applicable) fairly present in
all material respects the results of the consolidated operations and changes in
stockholders' equity and consolidated financial position of Summit and its
Subsidiaries for the respective fiscal periods or as of the respective dates
therein set forth, subject to normal year-end audit adjustments in amounts
consistent with past experience in the case of unaudited statements; each of
such statements (including the related notes, where applicable) complies in all
material respects with applicable accounting requirements and with the published
rules and regulations of the SEC with respect thereto; and each of such
statements (including the related notes, where applicable) has been prepared in
all material respects in accordance with GAAP consistently applied during the
periods involved, except, in each case, as indicated in such statements or in
the notes thereto. The books and records of Summit and its Subsidiaries have
been, and are being, maintained in all material respects in accordance with GAAP
and any other applicable legal and accounting requirements and reflect only
actual transactions.
3.8 Broker's Fees. Neither Summit nor any Summit Subsidiary nor any
of their respective officers or directors has employed any broker or finder or
incurred any liability for any broker's fees, commissions or finder's fees in
connection with the Merger or related transactions contemplated by this
Agreement.
3.9 Absence of Certain Changes or Events. (a) Except as publicly
disclosed in Summit Reports filed prior to the date hereof, since December 31,
1999, no event or events have occurred that have had, either individually or in
the aggregate, a Material Adverse Effect on Summit.
(b) Except as publicly disclosed in Summit Reports filed prior to
the date hereof, since December 31, 1999 through and including the date hereof,
Summit and its Subsidiaries have carried on their respective businesses in all
material respects in the ordinary course.
(c) Since December 31, 1999, neither Summit nor any of its
Subsidiaries has (i) except for normal increases for employees (other than
officers subject to the reporting requirements of Section 16(a) of the Exchange
Act) made in the ordinary course of business consistent with past practice or as
required by applicable law, increased the wages, salaries, compensation,
pension, or other fringe benefits or perquisites payable to any executive
officer, employee, or director from the amount thereof in effect as of December
31, 1999, granted any severance or termination pay, entered into any contract to
make or grant any severance or termination pay, or paid any bonus other than the
customary year-end bonuses for fiscal 2000 and 1999 in amounts consistent with
past practice, (ii) granted any stock appreciation rights or granted any rights
to acquire any shares of its capital stock to any executive officer, director or
employee other than grants to employees (other than officers subject to the
reporting requirements of Section 16(a) of the Exchange Act) made in the
ordinary course of business consistent with past practice under Summit Stock
Plans and except as
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permitted by Section 5.2(b)(iii), or (iii) suffered any strike, work stoppage,
slow-down, or other labor disturbance.
3.10 Legal Proceedings. (a) Neither Summit nor any of its
Subsidiaries is a party to any, and there are no pending or, to the best of
Summit's knowledge, threatened, legal, administrative, arbitral or other
proceedings, claims, actions or governmental or regulatory investigations of any
nature against Summit or any of its Subsidiaries or challenging the validity or
propriety of the transactions contemplated by this Agreement or Summit Option
Agreement as to which, in any such case, there is a reasonable probability of an
adverse determination and which, if adversely determined, will, either
individually or in the aggregate, have a Material Adverse Effect on Summit.
(b) There is no injunction, judgment, or regulatory (other than
those of general application that apply to similarly situated bank holding
companies or their Subsidiaries) imposed upon Summit, any of its Subsidiaries or
the assets of Summit or any of its Subsidiaries that has had, or will have,
either individually or in the aggregate, a Material Adverse Effect on Summit or
the Surviving Corporation.
3.11 Taxes and Tax Returns. (a) Each of Summit and its Subsidiaries
has duly filed all federal, state, foreign and local information returns and Tax
returns required to be filed by it on or prior to the date hereof (all such
returns being accurate and complete in all material respects) and has duly paid
or made provision for the payment of all Taxes and other governmental charges
which have been incurred or are due or claimed to be due from it by federal,
state, foreign or local taxing authorities (including, without limitation, if
and to the extent applicable, those due in respect of its properties, income,
business, capital stock, deposits, franchises, licenses, sales and payrolls)
other than (i) Taxes or other government charges which are not yet delinquent or
are being contested in good faith, have not been finally determined and have
been adequately reserved against or (ii) information returns, Tax returns, Taxes
or other governmental charges as to which the failure to file, pay or make
provision for will not have, either individually or in the aggregate, a Material
Adverse Effect on Summit. The federal income Tax returns of Summit and its
Subsidiaries have been examined by the Internal Revenue Service (the "IRS") for
all years to and including 1997 and any liability with respect thereto has been
satisfied or any liability with respect to deficiencies asserted as a result of
such examination is covered by adequate reserves. There are no material disputes
pending, or claims asserted, for Taxes or assessments upon Summit or any of its
Subsidiaries for which Summit does not have adequate reserves. Neither Summit
nor any of its Subsidiaries is a party to or is bound by any Tax sharing,
allocation or indemnification agreement or arrangement (other than such an
agreement or arrangement exclusively between or among Summit and its
Subsidiaries). Within the past five years, neither Summit nor any of its
Subsidiaries has been a "distributing corporation" or a "controlled corporation"
in a distribution intended to qualify under Section 355(a) of the Code.
(b) As used in this Agreement, the term "Tax" or "Taxes" means (i)
all federal, state, local, and foreign income, excise, gross receipts, gross
income, ad valorem, profits, gains, property, capital, sales, transfer, use,
payroll, employment, severance, withholding, duties, intangibles, franchise,
backup withholding, and other
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taxes, charges, levies or like assessments together with all penalties and
additions to tax and interest thereon and (ii) any liability for Taxes described
in clause (i) under Treasury Regulation Section 1.1502-6 (or any similar
provision of state, local or foreign law).
(c) No disallowance of a deduction under Section 162(m) of the Code
for employee remuneration of any amount paid or payable by Summit or any of its
Subsidiaries under any contract, plan, program, arrangement or understanding
would be reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on Summit.
3.12 Employees. (a) The Summit Disclosure Schedule sets forth a true
and complete list of each material employee or director benefit or compensation
plan, arrangement or agreement, and any material bonus, incentive, deferred
compensation, vacation, stock purchase, stock option, severance, employment,
change of control or fringe benefit plan, program or agreement that is
maintained, or contributed to, as of the date of this Agreement (the "Summit
Benefit Plans") by Summit, any of its Subsidiaries or by any trade or business,
whether or not incorporated (a "Summit ERISA Affiliate"), all of which together
with Summit would be deemed a "single employer" within the meaning of Section
4001 of the Employee Retirement Income Security Act of 1974, as amended
("ERISA").
(b) Summit has heretofore made available to FleetBoston true and
complete copies of each of Summit Benefit Plans and certain related documents,
including, but not limited to, (i) the actuarial report for such Summit Benefit
Plan (if applicable) for each of the last two years and (ii) the most recent
determination letter from the IRS (if applicable) for such Summit Benefit Plan.
(c) Except for such noncompliance as would not have, and would not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect on Summit, (i) each of Summit Benefit Plans has been operated and
administered in all material respects in compliance with applicable laws,
including, but not limited to, ERISA and the Code, (ii) each of Summit Benefit
Plans intended to be "qualified" within the meaning of Section 401 (a) of the
Code is so qualified, and there are no existing circumstances or any events that
have occurred that will adversely affect the qualified status of any such Summit
Benefit Plan, (iii) with respect to each Summit Benefit Plan that is subject to
Title IV of ERISA, the present value (as defined under Section 3(26) of ERISA)
of accumulated benefit obligations under such Summit Benefit Plan, based upon
the actuarial assumptions used for funding purposes in the most recent actuarial
report prepared by such Summit Benefit Plan's actuary with respect to such
Summit Benefit Plan, did not, as of its latest valuation date, exceed the then
current value (as defined under Section 3(26) of ERISA) of the assets of such
Summit Benefit Plan allocable to such accrued benefits, (iv) no Summit Benefit
Plan provides benefits coverage, including, without limitation, death or medical
benefits coverage (whether or not insured), with respect to current or former
employees or directors of Summit or its Subsidiaries beyond their retirement or
other termination of service, other than (A) coverage mandated by applicable
law, (B) death benefits or retirement benefits under any "employee pension plan"
(as such term is defined in Section 3(2) of ERISA), (C)
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deferred compensation benefits accrued as liabilities on the books of Summit or
its Subsidiaries, (D) benefits the full cost of which is borne by the current or
former employee or director (or his beneficiary), (E) coverage through the last
day of the calendar month in which retirement or other termination of service
occurs, or (F) medical expense reimbursement accounts, (v) no liability under
Title IV of ERISA has been incurred by Summit, its Subsidiaries or any Summit
ERISA Affiliate that has not been satisfied in full, and no condition exists
that presents a material risk to Summit, its Subsidiaries or any Summit ERISA
Affiliate of incurring a liability thereunder, (vi) no Summit Benefit Plan is a
"multiemployer pension plan" (as such term is defined in Section 3(37) of
ERISA), (vii) none of Summit, its Subsidiaries or any other person, including
any fiduciary, has engaged in a transaction in connection with which Summit, its
Subsidiaries or any Summit Benefit Plan will be subject to either a material
civil penalty assessed pursuant to Section 409 or 502(i) of ERISA or a material
Tax imposed pursuant to Section 4975 or 4976 of the Code, and (viii) to the best
knowledge of Summit there are no pending, threatened or anticipated claims
(other than routine claims for benefits) by, on behalf of or against any of
Summit Benefit Plans or any trusts related thereto that will have, either
individually or in the aggregate, a Material Adverse Effect on Summit.
(d) Neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated hereby will (either alone or in
conjunction with any other event) (i) result in any payment (including, without
limitation, severance, unemployment compensation, "excess parachute payment"
(within the meaning of Section 280G of the Code), forgiveness of indebtedness or
otherwise) becoming due to any director or any employee of Summit or any of its
affiliates from Summit or any of its affiliates under any Summit Benefit Plan or
otherwise, (ii) increase any benefits otherwise payable under any Summit Benefit
Plan or (iii) result in any acceleration of the time of payment or vesting of
any such benefits.
3.13 SEC Reports. Summit has previously made available to
FleetBoston an accurate and complete copy of each (a) final registration
statement, prospectus, report, schedule and definitive proxy statement filed
since January 1, 1997 by Summit with the SEC pursuant to the Securities Act of
1933, as amended (the "Securities Act"), or the Exchange Act (the "Summit
Reports") and prior to the date hereof and (b) communication mailed by Summit to
its stockholders since January 1, 1997 and prior to the date hereof, and no such
Summit Report or communication, as of the date thereof, contained any untrue
statement of a material fact or omitted to state any material fact required to
be stated therein or necessary in order to make the statements therein, in light
of the circumstances in which they were made, not misleading, except that
information as of a later date (but before the date hereof) shall be deemed to
modify information as of an earlier date. Since January 1, 1997, as of their
respective dates, all Summit Reports filed under the Securities Act and the
Exchange Act complied in all material respects with the published rules and
regulations of the SEC with respect thereto.
3.14 Compliance with Applicable Law. (a) Summit and each of its
Subsidiaries hold all material licenses, franchises, permits and authorizations
necessary
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for the lawful conduct of their respective businesses under and pursuant to
each, and have complied in all material respects with and are not in default in
any material respect under any, applicable law, statute, order, rule,
regulation, policy and/or guideline of any Governmental Entity relating to
Summit or any of its Subsidiaries, except where the failure to hold such
license, franchise, permit or authorization or such noncompliance or default
will not, either individually or in the aggregate, have a Material Adverse
Effect on Summit.
(b) Except as will not have, either individually or in the
aggregate, a Material Adverse Effect on Summit, Summit and each Summit
Subsidiary have properly administered all accounts for which it acts as a
fiduciary, including accounts for which it serves as a trustee, agent,
custodian, personal representative, guardian, conservator or investment advisor,
in accordance with the terms of the governing documents, applicable state and
federal law and regulation and common law. None of Summit, any Summit
Subsidiary, or any director, officer or employee of Summit or of any Summit
Subsidiary, has committed any breach of trust with respect to any such fiduciary
account that will have a Material Adverse Effect on Summit, and the accountings
for each such fiduciary account are true and correct in all material respects
and accurately reflect the assets of such fiduciary account.
3.15 Certain Contracts. (a) Neither Summit nor any of its
Subsidiaries is a party to or bound by any contract, arrangement, commitment or
understanding (whether written or oral) (i) with respect to the employment of
any directors, officers or employees, other than in the ordinary course of
business consistent with past practice, (ii) which, upon the consummation or
stockholder approval of the transactions contemplated by this Agreement will
(either alone or upon the occurrence of any additional acts or events) result in
any payment (whether of severance pay or otherwise) becoming due from
FleetBoston, Summit, the Surviving Corporation, or any of their respective
Subsidiaries to any officer or employee thereof, (iii) which is a "material
contract" (as such term is defined in Item 601(b)(10) of Regulation S-K of the
SEC) to be performed after the date of this Agreement that has not been filed or
incorporated by reference in Summit Reports, (iv) which materially restricts the
conduct of any line of business by Summit or upon consummation of the Merger
will materially restrict the ability of the Surviving Corporation to engage in
any line of business in which a bank holding company may lawfully engage, (v)
with or to a labor union or guild (including any collective bargaining
agreement) or (vi) (including any stock option plan, stock appreciation rights
plan, restricted stock plan or stock purchase plan) any of the benefits of which
will be increased, or the vesting of the benefits of which will be accelerated,
by the occurrence of any stockholder approval or the consummation of any of the
transactions contemplated by this Agreement, or the value of any of the benefits
of which will be calculated on the basis of any of the transactions contemplated
by this Agreement. Summit has previously made available to FleetBoston true and
correct copies of all employment and deferred compensation agreements which are
in writing and to which Summit or any of its Subsidiaries is a party. Each
contract, arrangement, commitment or understanding of the type described in this
Section 3.14(a), whether or not set forth in Summit Disclosure Schedule, is
referred to herein as a "Summit Contract," and neither Summit nor any of its
Subsidiaries knows of, or has received
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notice of, any violation of the above by any of the other parties thereto which,
either individually or in the aggregate, will have a Material Adverse Effect on
Summit.
(b) With such exceptions that, either individually or in the
aggregate, will not have a Material Adverse Effect on Summit, (i) each Summit
Contract is valid and binding on Summit or any of its Subsidiaries, as
applicable, and is in full force and effect, (ii) Summit and each of its
Subsidiaries has in all material respects performed all obligations required to
be performed by it to date under each Summit Contract, and (iii) no event or
condition exists which constitutes or, after notice or lapse of time or both,
will constitute, a material default on the part of Summit or any of its
Subsidiaries under any such Summit Contract.
3.16 Agreements with Regulatory Agencies. Neither Summit nor any of
its Subsidiaries is subject to any cease-and-desist or other order or
enforcement action issued by, or is a party to any written agreement, consent
agreement or memorandum of understanding with, or is a party to any commitment
letter or similar undertaking to, or is subject to any order or directive by, or
has been ordered to pay any civil money penalty by, or has been since January 1,
1997, a recipient of any supervisory letter from, or since January 1, 1997, has
adopted any policies, procedures or board resolutions at the request or
suggestion of any Regulatory Agency or other Governmental Entity that currently
restricts in any material respect the conduct of its business or that in any
material manner relates to its capital adequacy, its ability to pay dividends,
its credit or risk management policies, its management or its business (each
item in this sentence, whether or not set forth in Summit Disclosure Schedule, a
"Summit Regulatory Agreement"), nor has Summit or any of its Subsidiaries been
advised since January 1, 1997, by any Regulatory Agency or other Governmental
Entity that it is considering issuing, initiating, ordering, or requesting any
such Summit Regulatory Agreement.
3.17 Interest Rate Risk Management Instruments. All interest rate
swaps, caps, floors and option agreements and other interest rate risk
management arrangements, whether entered into for the account of Summit or for
the account of a customer of Summit or any of its Subsidiaries, were entered
into in the ordinary course of business consistent with past practice and, to
Summit's knowledge, in accordance with prudent banking practice and applicable
rules, regulations and policies of any Regulatory Authority and with
counterparties believed to be financially responsible at the time and are legal,
valid and binding obligations of Summit or one of its Subsidiaries enforceable
in accordance with their terms (except as may be limited by bankruptcy,
insolvency, moratorium, reorganization or similar laws affecting the rights of
creditors generally and the availability of equitable remedies), and are in full
force and effect. Summit and each of its Subsidiaries have duly performed in all
material respects all of their material obligations thereunder to the extent
that such obligations to perform have accrued; and, to Summit's knowledge, there
are no material breaches, violations or defaults or allegations or assertions of
such by any party thereunder.
3.18 Undisclosed Liabilities. Except for those liabilities that are
fully reflected or reserved against on the consolidated balance sheet of Summit
included in Summit 1999 10-K and for liabilities incurred in the ordinary course
of business consistent with past practice since December 31, 1999, since such
date, neither Summit
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nor any of its Subsidiaries has incurred any liability of any nature whatsoever
(whether absolute, accrued, contingent or otherwise and whether due or to become
due) that, either individually or in the aggregate (including if considered
together with liabilities incurred in the ordinary course of business consistent
with past practice since December 31, 1999), has had or will have a Material
Adverse Effect on Summit.
3.19 Environmental Liability. There are no legal, administrative,
arbitral or other proceedings, claims, actions, causes of action, private
environmental investigations or remediation activities or governmental
investigations of any nature seeking to impose, or that could reasonably result
in the imposition, on Summit of any liability or obligation arising under common
law or under any local, state or federal environmental statute, regulation or
ordinance including, without limitation, the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended, pending or
threatened against Summit, which liability or obligation will, either
individually or in the aggregate, have a Material Adverse Effect on Summit. To
the knowledge of Summit, there is no reasonable basis for any such proceeding,
claim, action or governmental investigation that would impose any liability or
obligation that will, individually or in the aggregate, have a Material Adverse
Effect on Summit. Summit is not subject to any agreement, order, judgment,
decree, letter or memorandum by or with any Governmental Authority or third
party imposing any liability or obligation with respect to the foregoing that
will have, either individually or in the aggregate, a Material Adverse Effect on
Summit.
3.20 Intellectual Property. Except as would not reasonably be
expected to have a Material Adverse Effect on Summit, to the knowledge of
Summit: (a) Summit and each of its Subsidiaries owns, or is licensed to use (in
each case, free and clear of any liens), all Intellectual Property (as defined
below) used in or necessary for the conduct of its business as currently
conducted; (b) the use of any Intellectual Property by Summit and its
Subsidiaries does not infringe on or otherwise violate the rights of any person
and is in accordance with any applicable license pursuant to which Summit or any
Subsidiary acquired the right to use any Intellectual Property; (c) no Person is
challenging, infringing on or otherwise violating any right of Summit or any of
its Subsidiaries with respect to any Intellectual Property owned by and/or
licensed to Summit or its Subsidiaries; and (d) neither Summit nor any of its
Subsidiaries has received any written notice of any pending claim with respect
to any Intellectual Property used by Summit and its Subsidiaries and no
Intellectual Property owned and/or licensed by Summit or its Subsidiaries is
being used or enforced in a manner that would result in the abandonment,
cancellation or unenforceability of such Intellectual Property. For purposes of
this Agreement, "Intellectual Property" shall mean trademarks, service marks,
brand names, certification marks, trade dress and other indications of origin,
the goodwill associated with the foregoing and registrations in any jurisdiction
of, and applications in any jurisdiction to register, the foregoing, including
any extension, modification or renewal of any such registration or application;
inventions, discoveries and ideas, whether patentable or not, in any
jurisdiction; patents, applications for patents (including, without limitation,
divisions, continuations, continuations in part and renewal applications), and
any renewals, extensions or reissues thereof, in any jurisdiction; nonpublic
information, trade secrets and
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confidential information and rights in any jurisdiction to limit the use or
disclosure thereof by any person; writings and other works, whether
copyrightable or not, in any jurisdiction; and registrations or applications for
registration of copyrights in any jurisdiction, and any renewals or extensions
thereof; any similar intellectual property or proprietary rights.
3.21 State Takeover Laws; Summit Rights Agreement. (a) The Board of
Directors of Summit has approved this Agreement and Summit Option Agreement and
the transactions contemplated hereby and thereby for purposes of rendering
inapplicable to such agreements and transactions the New Jersey Shareholder
Protection Act, Summit Rights Agreement and, to the best knowledge of Summit,
any similar "takeover" or "interested stockholder" law (all such laws, including
the New Jersey Shareholder Protection Act, "Takeover Statutes").
(b) Summit has taken all action, if any, necessary or appropriate
so that the entering into of this Agreement and Summit Option Agreement, and the
consummation of the transactions contemplated hereby and thereby do not and will
not result in the ability of any person to exercise any Summit Stockholder
Rights under Summit Rights Agreement or enable or require Summit Stockholder
Rights to separate from the shares of Summit Common Stock to which they are
attached or to be triggered or become exercisable. No "Distribution Date" or
"Stock Acquisition Date" (as such terms are defined in Summit Rights Agreement)
has occurred.
3.22 Reorganization; Pooling of Interests. As of the date of this
Agreement, Summit has no reason to believe that the Merger will not qualify as a
"reorganization" within the meaning of Section 368(a) of the Code and as a
"pooling of interests" for accounting purposes.
3.23 Opinions. Prior to the execution of this Agreement, Summit has
received an opinion from Merrill Lynch, Pierce, Fenner & Smith to the effect
that as of the date thereof and based upon and subject to the matters set forth
therein, the Exchange Ratio is fair to the stockholders of Summit from a
financial point of view. Such opinion has not been amended or rescinded as of
the date of this Agreement.
3.24 Summit Information. The information relating to Summit and its
Subsidiaries which is provided by Summit or its representatives for inclusion in
the Proxy Statement and the S-4, or in any other document filed with any other
Regulatory Agency in connection herewith, will not contain any untrue statement
of a material fact or omit to state a material fact necessary to make the
statements therein, in light of the circumstances in which they are made, not
misleading. The Proxy Statement (except for such portions thereof that relate
only to FleetBoston or any of its Subsidiaries) will comply with the provisions
of the Exchange Act and the rules and regulations thereunder.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF FLEETBOSTON
Except as disclosed in the FleetBoston disclosure schedule delivered
to Summit prior to the execution of this Agreement (the "FleetBoston Disclosure
Schedule") FleetBoston represents and warrants to Summit as follows:
4.1 Corporate Organization. (a) FleetBoston is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Rhode Island. FleetBoston 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, and is duly licensed or qualified to do business in each jurisdiction
in which the nature of the business conducted by it or the character or location
of the properties and assets owned or leased by it makes such licensing or
qualification necessary, except where the failure to be so licensed or qualified
would not, either individually or in the aggregate, have a Material Adverse
Effect on FleetBoston. FleetBoston is duly registered as a financial holding
Summit under the BHC Act. True and complete copies of the Restated Articles of
Incorporation (the "FleetBoston Articles") and By-Laws of FleetBoston, as in
effect as of the date of this Agreement, have previously been made available by
FleetBoston to Summit.
(b) Each FleetBoston Subsidiary (i) is duly organized and validly
existing under the laws of its jurisdiction of organization, (ii) is duly
qualified to do business and in good standing in all jurisdictions (whether
Federal, state, local or foreign) where its ownership or leasing of property or
the conduct of its business requires it to be so qualified and in which the
failure to be so qualified would have a Material Adverse Effect on FleetBoston,
and (iii) has all requisite corporate power and authority to own or lease its
properties and assets and to carry on its business as now conducted.
4.2 Capitalization. (a) The authorized capital stock of FleetBoston
consists of 2,000,000,000 shares of FleetBoston Common Stock, of which, as of
September 28, 2000, no more than 902,450,000 shares were issued and outstanding,
and 16,000,000 shares of preferred stock, $1.00 par value, of which (i) 500,000
shares were designated, issued and outstanding as FleetBoston 9.35% Cumulative
Preferred, (ii) 765,010 shares were designated, issued and outstanding as
FleetBoston Series V 7.25% Perpetual Preferred, (iii) 600,000 shares were
designated, issued and outstanding as FleetBoston Series VI 6.75% Perpetual
Preferred, (iv) 700,000 shares were designated, issued and outstanding as
FleetBoston Series VII Fixed/Adjustable Rate Cumulative Preferred, (v) 200,000
shares were designated, issued and outstanding as FleetBoston Series VIII
Fixed/Adjustable Rate Noncumulative Preferred, (vi) 1,100,000 shares were
designated and no shares were issued or outstanding as Series III 10.12%
Perpetual Preferred Stock, (vii) 1,000,000 shares were designated and no shares
were issued or outstanding as Series IV 9.375% Perpetual Preferred Stock, (viii)
1,415,000 shares were designated and no shares were issued or outstanding as
Dual Convertible Preferred Stock, (ix) 3,000,000 shares were designated and no
shares were issued or outstanding as Cumulative Participating Junior Preferred
Stock, (x) 688,700
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shares were designated and no shares were issued or outstanding as Preferred
Stock with Cumulative and Adjustable Dividends, (xi) 575,000 shares were
designated and no shares were issued or outstanding as 9.30% Cumulative
Preferred Stock, (xii) 500,000 shares were designated and no shares were issued
or outstanding as 9.35% Cumulative Preferred Stock, (xiii) 1,265,000 shares were
designated and no shares were issued or outstanding as Series V 7.25% Perpetual
Preferred Stock, (xiv) 690,000 shares were designated and no shares were issued
or outstanding as Series VI 6.75% Perpetual Preferred Stock, (xv) 805,000 shares
were designated and no shares were issued or outstanding as Series VII
Fixed/Adjustable Rate Cumulative Preferred Stock and (xvi) 200,000 shares were
designated and no shares were issued or outstanding as Series VIII
Fixed/Adjustable Rate Noncumulative Preferred Stock. As of September 28, 2000,
no more than 13,600,000] shares of FleetBoston Common Stock were held in
FleetBoston's treasury. As of the date hereof, no shares of FleetBoston Common
Stock or FleetBoston Preferred Stock were reserved for issuance, except as
described in this Section 4.2(a) and except for 89.2 million shares reserved for
issuance upon exercise of options issued pursuant to employee and director stock
plans of FleetBoston in effect as of the date hereof (the "FleetBoston Stock
Plans"), (ii) 13.2 million shares reserved for issuance pursuant to outstanding
warrants to purchase FleetBoston Common Stock (the "FleetBoston Warrants"), (iv)
3,000,000 shares of Cumulative Participating Junior Preferred Stock, $1.00 par
value, reserved for issuance pursuant to the FleetBoston Rights Agreement. All
of the issued and outstanding shares of FleetBoston Capital Stock have been duly
authorized and validly issued and are fully paid, nonassessable and free of
preemptive rights, with no personal liability attaching to the ownership
thereof. As of the date of this Agreement, except for this Agreement, the
FleetBoston Stock Plans, the FleetBoston Warrants, the FleetBoston Purchase
Rights and the FleetBoston Rights Agreement, FleetBoston does not have and is
not bound by any outstanding subscriptions, options, warrants, calls,
commitments or agreements of any character calling for the purchase or issuance
of any shares of FleetBoston Capital Stock or any other equity securities of
FleetBoston or any securities representing the right to purchase or otherwise
receive any shares of FleetBoston Capital Stock. The shares of FleetBoston
Common Stock to be issued pursuant to the Merger will be duly authorized and
validly issued and, at the Effective Time, all such shares will be fully paid,
nonassessable and free of preemptive rights, with no personal liability
attaching to the ownership thereof.
(b) FleetBoston owns, directly or indirectly, all of the issued and
outstanding shares of capital stock or other equity ownership interests of each
of the FleetBoston Subsidiaries, free and clear of any Liens, and all of such
shares or equity ownership interests are duly authorized and validly issued and
are fully paid, nonassessable (subject to 12 U.S.C. ss.ss. 55) and free of
preemptive rights, with no personal liability attaching to the ownership
thereof. No FleetBoston Subsidiary has or is bound by any outstanding
subscriptions, options, warrants, calls, commitments or agreements of any
character calling for the purchase or issuance of any shares of capital stock or
any other equity security of such Subsidiary or any securities representing the
right to purchase or otherwise receive any shares of capital stock or any other
equity security of such Subsidiary.
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4.3 Authority, No Violation. (a) FleetBoston 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
and the consummation of the transactions contemplated hereby have been duly and
validly approved by the Board of Directors of FleetBoston and no other corporate
proceedings on the part of FleetBoston are necessary to approve this Agreement
or to consummate the transactions contemplated hereby. This Agreement has been
duly and validly executed and delivered by FleetBoston and (assuming due
authorization, execution and delivery by Summit) constitutes valid and binding
obligations of each of FleetBoston, enforceable against each of FleetBoston in
accordance with its terms (except as may be limited by bankruptcy, insolvency,
moratorium, reorganization or similar laws affecting the rights of creditors
generally and the availability of equitable remedies).
(b) Neither the execution and delivery of this Agreement by
FleetBoston, nor the consummation by FleetBoston of the transactions
contemplated hereby, nor compliance by FleetBoston with any of the terms or
provisions hereof, will (i) violate any provision of the FleetBoston Articles or
By-Laws, or (ii) assuming that the consents and approvals referred to in Section
4.4 are duly obtained, (x) violate any statute, code, ordinance, rule,
regulation, judgment, writ, or Injunction applicable to FleetBoston, any of its
Subsidiaries or any of their respective properties or assets or (y) violate,
conflict with, result in a breach of any provision of or the loss of any benefit
under, 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 or a right
of termination or cancellation under, accelerate the performance required by, or
result in the creation of any Lien upon any of the respective properties or
assets of FleetBoston, any of its Subsidiaries under, any of the terms,
conditions or provisions of any note, bond, mortgage, indenture, deed of trust,
license, lease, agreement or other instrument or obligation to which
FleetBoston, any of its Subsidiaries is a party, or by which they or any of
their respective properties or assets may be bound or affected, except (in the
case of clause (y) above) for such violations, conflicts, breaches or defaults
which either individually or in the aggregate will not have a Material Adverse
Effect on FleetBoston.
4.4 Consents and Approvals. Except for (i) the filing of
applications and notices, as applicable, with the Federal Reserve Board under
the BHC Act and the Federal Reserve Act, as amended, and approval of such
applications and notices, (ii) the State Approvals, (iii) the filing with the
SEC of the Proxy Statement and the filing and declaration of effectiveness of
the S-4, (iv) the filing of the Articles of Merger with the Rhode Island
Secretary pursuant to the RIBCA and the issuance by the Rhode Island Secretary
of a Certificate of Merger and the filing of the Articles of Merger with the
Secretary of State of the State of New Jersey pursuant to the NJBCA, (v) any
notices to or filings with the SBA, (vi) any notices or filings under the HSR
Act, (vii) any consents, authorizations, approvals, filings or exemptions in
connection with compliance with the applicable provisions of federal and state
securities laws relating to the regulation of broker-dealers, investment
advisers or transfer agents, and federal commodities laws relating to the
regulation of futures commission merchants and the rules and regulations
thereunder and of any applicable SRO, and the rules of the NYSE, or which are
required under consumer finance, mortgage banking and other similar laws and
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(viii) such filings and approvals as are required to be made or obtained under
the securities or "Blue Sky" laws of various states in connection with the
issuance of the shares of FleetBoston Capital Stock pursuant to this Agreement,
no consents or approvals of or filings or registrations with any Governmental
Entity are necessary in connection with (A) the execution and delivery by
FleetBoston of this Agreement and (B) the consummation by FleetBoston of the
Merger and the other transactions contemplated hereby.
4.5 Reports. FleetBoston and each of its Subsidiaries have timely
filed all reports, registrations and statements, together with any amendments
required to be made with respect thereto, that they were required to file since
January 1, 1997 with the Regulatory Agencies, and all other reports and
statements required to be filed by them since January 1, 1997, including,
without limitation, any report or statement required to be filed pursuant to the
laws, rules or regulations of the United States, any state, any foreign entity
or any Regulatory Agency, and have paid all fees and assessments due and payable
in connection therewith, except where the failure to file such report,
registration or statement or to pay such fees and assessments, either
individually or in the aggregate, will not have a Material Adverse Effect on
FleetBoston. Except for normal examinations conducted by a Regulatory Agency in
the ordinary course of the business of FleetBoston and its Subsidiaries, no
Regulatory Agency has initiated or has pending any proceeding or, to the best
knowledge of FleetBoston, investigation into the business or operations of
FleetBoston or any of its Subsidiaries since January 1, 1997, except where such
proceedings or investigation will not have, either individually or in the
aggregate, a Material Adverse Effect on FleetBoston. There (i) is no unresolved
violation, criticism, or exception by any Regulatory Agency with respect to any
report or statement relating to any examinations or inspections of FleetBoston
or any of its Subsidiaries, and (ii) has been no formal or informal inquiries
by, or disagreements or disputes with, any Regulatory Agency with respect to the
business, operations, policies or procedures of FleetBoston since January 1,
1997, which, in the reasonable judgment of FleetBoston, will have, either
individually or in the aggregate, a Material Adverse Effect on FleetBoston.
4.6 Financial Statements. FleetBoston has previously provided to
Summit copies of (i) the audited consolidated balance sheets of FleetBoston and
its Subsidiaries as of December 31, for the fiscal years 1998 and 1999, and the
related audited consolidated statements of income, changes in stockholders'
equity and cash flows for the fiscal years 1997 through 1999, inclusive (the
"FleetBoston 1999 Financial Information"), as reported in FleetBoston's Annual
Report on Form 10-K for the fiscal year ended December 31, 1999 (the
"FleetBoston 1999 10-K") filed with the SEC under the Exchange Act, accompanied
by the audit report of PricewaterhouseCoopers LLP, independent public
accountants with respect to FleetBoston and (ii) the unaudited consolidated
balance sheet of Summit and its Subsidiaries as of June 30, 1999 and 2000, and
the related consolidated statements of income, changes in shareholders' equity
and cash flows of the six month periods then ended, as reported in Summit
Quarterly Report on Form 10-Q for the fiscal period ended June 30, 2000. The
December 31, 1999 consolidated balance sheet of FleetBoston (including the
related notes, where applicable) fairly presents in all material respects the
consolidated
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financial position of FleetBoston and its Subsidiaries as of the date thereof,
and the other financial statements referred to in this Section 4.6 (including
the related notes, where applicable) fairly present in all material respects the
results of the consolidated operations and changes in stockholders' equity and
consolidated financial position of FleetBoston and its Subsidiaries for the
respective fiscal periods or as of the respective dates therein set forth,
subject to normal year-end audit adjustments in amounts consistent with past
experience in the case of unaudited statements; each of such statements
(including the related notes, where applicable) complies in all material
respects with applicable accounting requirements and with the published rules
and regulations of the SEC with respect thereto; and each of such statements
(including the related notes, where applicable) has been prepared in all
material respects in accordance with GAAP consistently applied during the
periods involved, except in each case as indicated in such statements or in the
notes thereto. The books and records of FleetBoston and its Subsidiaries have
been, and are being, maintained in all material respects in accordance with GAAP
and any other applicable legal and accounting requirements and reflect only
actual transactions.
4.7 Broker's Fees. Neither FleetBoston nor any FleetBoston
Subsidiary nor any of their respective officers or directors has employed any
broker or finder or incurred any liability for any brokers fees, commissions or
finder's fees in connection with the Merger or related transactions contemplated
by this Agreement.
4.8 Absence of Certain Changes or Events. (a) Except as publicly
disclosed in FleetBoston Reports filed prior to the date hereof, since December
31, 1999, no event or events have occurred which has had, individually or in the
aggregate, a Material Adverse Effect on FleetBoston.
(b) Except as publicly disclosed in FleetBoston Reports filed prior
to the date hereof, from December 31, 1999 through and including the date
hereof, FleetBoston and the FleetBoston Subsidiaries have carried on their
respective businesses in all material respect in the ordinary course.
4.9 Legal Proceedings. (a) Neither FleetBoston nor any of its
Subsidiaries is a party to any, and there are no pending or, to the best of
FleetBoston's knowledge, threatened, legal, administrative, arbitral or other
proceedings, claims, actions or governmental or regulatory investigations of any
nature against FleetBoston or any of its Subsidiaries or challenging the
validity or propriety of the transactions contemplated by this Agreement as to
which, in any such case, there is a reasonable probability of an adverse
determination and which, if adversely determined, will have, either individually
or in the aggregate, a Material Adverse Effect on FleetBoston.
(b) There is no Injunction, judgment, or regulatory restriction
(other than those of general application that apply to similarly situated bank
holding companies or their Subsidiaries) imposed upon FleetBoston, any of its
Subsidiaries or the assets of FleetBoston or any of its Subsidiaries that has
had or will have, either individually or in the aggregate, a Material Adverse
Effect on FleetBoston or the Surviving Corporation.
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4.10 Taxes and Tax Returns. Each of FleetBoston and its Subsidiaries
has duly filed all federal, state, foreign and local information returns and Tax
returns required to be filed by it on or prior to the date hereof (all such
returns being accurate and complete in all material respects) and has duly paid
or made provision for the payment of all Taxes and other governmental charges
which have been incurred or are due or claimed to be due from it by federal,
state, foreign or local taxing authorities (including, without limitation, if
and to the extent applicable, those due in respect of its properties, income,
business, capital stock, deposits, franchises, licenses, sales and payrolls)
other than (i) Taxes or other governmental charges which are not yet delinquent
or are being contested in good faith and have not been finally determined, or
(ii) information returns, tax returns, Taxes or other governmental charges as to
which the failure to file, pay or make provision for will not have, either
individually or in the aggregate, a Material Adverse Effect on FleetBoston. The
federal income Tax returns of FleetBoston and its Subsidiaries have been
examined by the IRS through 1990 and any liability with respect thereto has been
satisfied or any liability with respect to deficiencies asserted as a result of
such examination is covered by adequate reserves. There are no material disputes
pending, or claims asserted for, Taxes or assessments upon FleetBoston or any of
its Subsidiaries for which FleetBoston does not have adequate reserves. Neither
FleetBoston nor any of its Subsidiaries is a party to or is bound by any Tax
sharing, allocation or indemnification agreement or arrangement (other than such
an agreement or arrangement exclusively between or among FleetBoston and its
Subsidiaries). Within the past five years, neither FleetBoston nor any of its
Subsidiaries has been a "distributing corporation" or a "controlled corporation"
in a distribution intended to qualify under Section 355(a) of the Code.
(b) No disallowance of a deduction under Section 162(m) of the Code
for employee remuneration of any amount paid or payable by FleetBoston or any of
its Subsidiaries under any contract, plan, program, arrangement or understanding
would be reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on FleetBoston.
4.11 SEC Reports. FleetBoston has previously made available to
Summit an accurate and complete copy of each (a) final registration statement,
prospectus, report, schedule and definitive proxy statement filed since January
1, 1997 by FleetBoston with the SEC pursuant to the Securities Act or the
Exchange Act (the "FleetBoston Reports") and prior to the date hereof and (b)
communication mailed by FleetBoston to its stockholders since January 1, 1997
and prior to the date hereof, and no such FleetBoston Report or communication,
as of the date thereof, contained any untrue statement of a material fact or
omitted to state any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances in which
they were made, not misleading, except that information as of a later date (but
before the date hereof) shall be deemed to modify information as of an earlier
date. Since January 1, 1997, as of their respective dates, all FleetBoston
Reports filed under the Securities Act and the Exchange Act complied in all
material respects with the published rules and regulations of the SEC with
respect thereto.
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4.12 Compliance with Applicable Law. (a) FleetBoston and each of its
Subsidiaries hold all material licenses, franchises, permits and authorizations
necessary for the lawful conduct of their respective businesses under and
pursuant to each, and have complied in all material respects with and are not in
default in any material respect under any, applicable law, statute, order, rule,
regulation, policy and/or guideline of any Governmental Entity relating to
FleetBoston or any of its Subsidiaries, except where the failure to hold such
license, franchise, permit or authorization or such noncompliance or default
will not, either individually or in the aggregate, have a Material Adverse
Effect on FleetBoston.
(b) Except as will not have, either individually or in the
aggregate, a Material Adverse Effect on FleetBoston, FleetBoston and each
FleetBoston Subsidiary have properly administered all accounts for which it acts
as a fiduciary, including accounts for which it serves as a trustee, agent,
custodian, personal representative, guardian, conservator or investment advisor,
in accordance with the terms of the governing documents, applicable state and
federal law and regulation and common law. None of FleetBoston, any FleetBoston
Subsidiary, or any director, officer or employee of FleetBoston or of any
FleetBoston Subsidiary, has committed any breach of trust with respect to any
such fiduciary account that will have a Material Adverse Effect on FleetBoston,
and the accountings for each such fiduciary account are true and correct in all
material respects and accurately reflect the assets of such fiduciary account.
4.13 Agreements with Regulatory Agencies. Neither FleetBoston nor
any of its Subsidiaries is subject to any cease-and-desist or other order or
enforcement action issued by, or is a party to any written agreement, consent
agreement or memorandum of understanding with, or is a party to any commitment
letter or similar undertaking to, or is subject to any order or directive by, or
has been since January 1, 1997, a recipient of any supervisory letter from, or
has been ordered to pay any civil money penalty by, or since January 1, 1997,
has adopted any policies, procedures or board resolutions at the request of any
Regulatory Agency or other Governmental Entity that currently restricts in any
material respect the conduct of its business or that in any material manner
relates to its capital adequacy, its ability to pay dividends, its credit or
risk management policies, its management or its business (each, whether or not
set forth in the FleetBoston Disclosure Schedule, a "FleetBoston Regulatory
Agreement"), nor has FleetBoston or any of its Subsidiaries been advised since
January 1, 1997, by any Regulatory Agency or other Governmental Entity that it
is considering issuing, initiating, ordering or requesting any such FleetBoston
Regulatory Agreement.
4.14 Interest Rate Risk Management Instruments. All interest rate
swaps, caps, floors and option agreements and other interest rate risk
management arrangements, whether entered into for the account of FleetBoston or
for the account of a customer of FleetBoston or one of its Subsidiaries, were
entered into in the ordinary course of business consistent with past practice
and, to FleetBoston's knowledge, in accordance with prudent banking practice and
applicable rules, regulations and policies of any Regulatory Authority and with
counterparties believed to be financially responsible at the time and are legal,
valid and binding obligations of FleetBoston or one of its Subsidiaries
enforceable in accordance with their terms (except as may be limited
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by bankruptcy, insolvency, moratorium, reorganization or similar laws affecting
the rights of creditors generally and the availability of equitable remedies),
and are in full force and effect. FleetBoston and each of its Subsidiaries have
duly performed in all material respects all of their material obligations
thereunder to the extent that such obligations to perform have accrued; and to
FleetBoston's knowledge, there are no material breaches, violations or defaults
or allegations or assertions of such by any party thereunder.
4.15 Undisclosed Liabilities. Except for those liabilities that are
fully reflected or reserved against on the consolidated balance sheet of
FleetBoston included in the FleetBoston 1999 Financial Information and for
liabilities incurred in the ordinary course of business consistent with past
practice since December 31, 1999, since such date, neither FleetBoston nor any
of its Subsidiaries has incurred any liability of any nature whatsoever (whether
absolute, accrued, contingent or otherwise and whether due or to become due)
that, either individually or in the aggregate (including if considered together
with liabilities incurred in the ordinary course of business consistent with
past practice since December 31, 1999), has had or will have, a Material Adverse
Effect on FleetBoston.
4.16 Environmental Liability. There are no legal, administrative,
arbitral or other proceedings, claims, actions, causes of action, private
environmental investigations or remediation activities or governmental
investigations of any nature seeking to impose, or that could reasonably result
in the imposition, on FleetBoston of any liability or obligation arising under
common law or under any local, state or federal environmental statute,
regulation or ordinance including, without limitation, the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended,
pending or threatened against FleetBoston, which liability or obligation will,
either individually or in the aggregate, have a Material Adverse Effect on
Summit. To the knowledge of FleetBoston, there is no reasonable basis for any
such proceeding, claim, action or governmental investigation that would impose
any liability or obligation that will, individually or in the aggregate, have a
Material Adverse Effect on FleetBoston. FleetBoston is not subject to any
agreement, order, judgment, decree, letter or memorandum by or with any
Governmental Authority or third party imposing any liability or obligation with
respect to the foregoing that will have, either individually or in the
aggregate, a Material Adverse Effect on FleetBoston.
4.17 Reorganization; Pooling of Interests. As of the date of this
Agreement, FleetBoston has no reason to believe that the Merger will not qualify
as a "reorganization" within the meaning of Section 368(a) of the Code and as a
"pooling of interests" for accounting purposes.
4.18 FleetBoston Information. The information relating to
FleetBoston and its Subsidiaries to be contained in the Proxy Statement and the
S-4, or the information relating to FleetBoston and its Subsidiaries that is
provided by FleetBoston or its representatives for inclusion in any other
document filed with any other Regulatory Agency in connection herewith, will not
contain any untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in light of the circumstances in which
they are made, not misleading. The Proxy Statement
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(except for such portions thereof that relate only to Summit or any of its
Subsidiaries) will comply with the provisions of the Exchange Act and the rules
and regulations thereunder. The S-4 will comply with the provisions of the
Securities Act and the rules and regulations thereunder.
ARTICLE V
COVENANTS RELATING TO CONDUCT OF BUSINESS
5.1 Conduct of Businesses Prior to the Effective Time. During the
period from the date of this Agreement to the Effective Time, except as
expressly contemplated or permitted by this Agreement (including Summit
Disclosure Schedule) or Summit Option Agreement, Summit shall, and shall cause
each of its Subsidiaries to, (a) conduct its business in the ordinary course,
(b) use reasonable best efforts to maintain and preserve intact its business
organization, employees and advantageous business relationships and retain the
services of its key officers and key employees and (c) take no action which
would adversely affect or delay the ability of the parties to obtain any
necessary approvals of any Regulatory Agency or other Governmental Entity
required for the transactions contemplated hereby or to perform its covenants
and agreements under this Agreement or Summit Option Agreement or to consummate
the transactions contemplated hereby or thereby.
5.2 Forbearances. During the period from the date of this Agreement
to the Effective Time, except as set forth in Summit Disclosure Schedule and
except as expressly contemplated or permitted by this Agreement, Summit shall
not, and shall not permit any of its Subsidiaries to, without the prior written
consent of FleetBoston (which consent shall not be unreasonably withheld):
(a) other than in the ordinary course of business consistent with
past practice, incur any indebtedness for borrowed money (other than short-term
indebtedness incurred to refinance short-term indebtedness and indebtedness of
Summit or any of its wholly owned Subsidiaries to Summit or any of its
Subsidiaries), assume, guarantee, endorse or otherwise as an accommodation
become responsible for the obligations of any other individual, corporation or
other entity, or make any loan or advance (it being understood and agreed that
incurrence of indebtedness in the ordinary course of business consistent with
past practice shall include, without limitation, the creation of deposit
liabilities, purchases of Federal funds, sales of certificates of deposit and
entering into repurchase agreements);
(b) (i) adjust, split, combine or reclassify any capital stock;
(ii) make, declare or pay any dividend, or make any other
distribution on, or directly or indirectly redeem, purchase or
otherwise acquire, any shares of its capital stock or any securities
or obligations convertible (whether currently convertible or
convertible only after the passage of time or the occurrence of
certain events) into or exchangeable for any shares of its capital
stock (except (A) for regular quarterly cash
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dividends at a rate not in excess of $0.35 per share of Summit
Common Stock, (B) dividends paid by any of the Subsidiaries of
Summit to Summit or to any of its wholly owned Subsidiaries and (C)
the acceptance of shares of Summit Common Stock as payment of the
exercise price of stock options or for withholding taxes incurred in
connection with the exercise of stock options or the vesting of
restricted stock, in each case in accordance with past practice and
the terms of the applicable award agreements);
(iii) grant any stock appreciation rights or grant any
individual, corporation or other entity any right to acquire any
shares of its capital stock, other than (A) pursuant to Summit
Rights Agreement or any renewal or replacement thereof and (B)
grants to newly hired employees of Summit (other than officers that
will be subject to the reporting requirements of Section 16(a) of
the Exchange Act) made in the ordinary course of business consistent
with past practice under Summit Stock Plans and consistent with the
additional terms set forth in Section 5.2 of Summit Disclosure
Schedule; or
(iv) issue any additional shares of capital stock except (A)
pursuant to the exercise of stock options outstanding as of the date
hereof or issued in compliance with Section 5.2(b)(iii), (B)
pursuant to Summit Option Agreement or (C) pursuant to Summit Rights
Agreement or any renewal or replacement thereof;
(c) (i) except for normal increases for employees (other than
officers subject to the reporting requirements of Section 16(a) of the Exchange
Act) made in the ordinary course of business consistent with past practice, or
as required by applicable law or agreements disclosed in Section 5.2 of Summit
Disclosure Schedule, increase the wages, salaries, compensation, pension, or
other fringe benefits or perquisites payable to any officer, employee, or
director, or (ii) pay any pension or retirement allowance not required by any
existing plan or agreement or by applicable law, or (iii) pay any bonus other
than customary year-end bonuses for fiscal 2000 determined in accordance with
Section 5.2 of Summit Disclosure Schedule, or (iv) become a party to, amend or
commit itself to, any pension, retirement, profit-sharing or welfare benefit
plan or agreement or employment agreement with or for the benefit of any
employee other than in the ordinary course of business consistent with past
practice or as required by applicable law, or (v) except as required under any
existing plan, grant, or agreement disclosed in Section 5.2 of Summit Disclosure
Schedule, accelerate the vesting of, or the lapsing of restrictions with respect
to, any stock options or other equity-based compensation;
(d) sell, transfer, mortgage, encumber or otherwise dispose of any
of its material properties or assets to any individual, corporation or other
entity or cancel, release or assign any indebtedness to any such person or any
claims held by any such person, in each case other than in the ordinary course
of business consistent with past practice or as required by applicable law or as
set forth in Summit Disclosure Schedule;
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(e) except for transactions in the ordinary course of business
consistent with past practice (other than as set forth in Section 5.2 of Summit
Disclosure Schedule), make any material investment either by purchase of stock
or securities, contributions to capital, property transfers, or purchase of any
property or assets of any other individual, corporation or other entity;
(f) except for transactions in the ordinary course of business
consistent with past practice, terminate, or waive any material provision of any
Summit Contract or make any change in any instrument or agreement governing the
terms of any of its securities, or material lease or contract, other than normal
renewals of contracts and leases without material adverse changes of terms;
(g) solicit or encourage from any third party or enter into any
negotiations, discussions or agreement in respect of, or authorize any
individual, corporation or other entity to solicit or encourage from any third
party or enter into any negotiations, discussions or agreements in respect of,
or provide or cause to be provided any confidential information in connection
with, any inquiries or proposals relating to the disposition of all or
significant portion of its business or assets, the acquisition of 15% or more of
its voting securities, or the merger, consolidation or similar business
combination transaction involving it or any of its Subsidiaries with any
corporation or other entity, other than as provided by this Agreement (and each
party shall promptly notify the other of all of the relevant details relating to
all inquiries and proposals which it may receive relating to any of such
matters), provided that Summit may, and may permit its employees, agents and
representatives to furnish or cause to be furnished confidential information,
and may participate in negotiations or discussions, to the extent that the Board
of Directors of Summit determines, in good faith after consultation with outside
legal counsel, that the failure to take such action would be inconsistent with
its fiduciary duties under applicable law, provided further that prior to
providing any non-public information permitted to be provided pursuant to the
foregoing proviso, Summit shall have entered into a confidentiality agreement
with such third party on customary terms as advised by outside legal counsel;
(h) settle any claim, action or proceeding requiring Summit or any
of its Subsidiaries to pay (whether or not such payments would be covered in
whole or in part by insurance) any monetary damages in excess of $500,000 or
subjecting Summit or any of its Subsidiaries to any restrictions (other than DE
MINIMIS restrictions) on its current or future business or operations (including
the future business and operations of the Surviving Corporation);
(i) knowingly take any action, or knowingly fail to take any
action, that is reasonably likely to (A) jeopardize the treatment of the Merger
as a "pooling of interests" for accounting purposes (including by terminating
and electing to pay cash for any option to purchase Summit Common Stock as may
be permitted under Summit Stock Plans or otherwise) or (B) prevent or impede the
Merger from qualifying as a reorganization within the meaning of Section 368 of
the Code;
(j) amend its articles of incorporation, its bylaws or comparable
governing documents, or amend, or redeem the rights issued under, Summit Rights
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Agreement (except as required hereunder), or otherwise take any action to exempt
any person or entity (other than FleetBoston or its Subsidiaries) or any action
taken by such person or entity from Summit Rights Agreement or any Takeover
Statute or similarly restrictive provisions of such party's organizational
documents or terminate, amend or waive any provisions of any confidentiality or
standstill agreements in place with any third parties;
(k) other than in prior consultation with the other party to this
Agreement, restructure or materially change its investment securities portfolio
or its gap position, through purchases, sales or otherwise, or the manner in
which the portfolio is classified or reported;
(l) take any action that is intended or is reasonably likely to
result in any of its representations or warranties set forth in this Agreement
being or becoming untrue in any material respect at any time prior to the
Effective Time, or in any of the conditions to the Merger set forth in Article
VII not being satisfied or in a violation of any provision of this Agreement,
except, in every case, as may be required by applicable law;
(m) implement or adopt any change in its accounting principles,
practices or methods, other than as may be required by GAAP or regulatory
guidelines;
(n) file or amend any Tax return other than in the ordinary course
of business, make or change any material Tax election, settle or compromise any
material Tax liability or, except as required by applicable law, change any
method of accounting for Tax purposes;
(o) take any action that would materially impede or delay the
ability of the parties to obtain any necessary approvals of any Regulatory
Agency or Governmental Entity required for the transaction, contemplated hereby
or by Summit Option Agreement; or
(p) agree to take, make any commitment to take, or adopt any
resolutions of its board of directors in support of, any of the actions
prohibited by this Section 5.2.
5.3 FleetBoston Forbearances. During the period from the date of
this Agreement to the Effective Time, except as expressly contemplated or
permitted by this Agreement, FleetBoston shall not, and shall not permit any of
its Subsidiaries to, without the prior written consent of Summit (which consent
shall not be unreasonably withheld), (i) amend the FleetBoston Articles or
FleetBoston By-Laws in a manner that would adversely affect the economic
benefits of the Merger to Summit stockholders, (ii) knowingly take any action,
or knowingly fail to take any action, that is reasonably likely to (A)
jeopardize the treatment of the Merger as a "pooling of interests" for
accounting purposes or (B) prevent or impede the Merger from qualifying as a
reorganization within the meaning of Section 368 of the Code (provided that
nothing contained herein shall limit the ability of FleetBoston to exercise its
rights under Summit Option Agreement), (iii) take any action which would
materially impede or delay the ability of
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the parties to obtain any necessary approvals of any Regulatory Agency or other
Governmental Entity required for the transactions contemplated hereby, (iv) take
any action that is intended or is reasonably likely to result in any of its
representations or warranties set forth in this Agreement being or becoming
untrue in any material respect at any time prior to the Effective Time, or in
any of the conditions to the Merger set forth in Article VII not being satisfied
or in a violation of any provision of this Agreement, except, in every case, as
may be required by applicable law or (v) agree to take, make any commitment to
take, or adopt any resolutions of its board of directors in support of, any of
the actions prohibited by this Section 5.3.
ARTICLE VI
ADDITIONAL AGREEMENTS
6.1 Regulatory Matters. (a) FleetBoston and Summit shall promptly
prepare and file with the SEC the Proxy Statement and FleetBoston shall promptly
prepare and file with the SEC the S-4, in which the Proxy Statement will be
included as a prospectus. Each of FleetBoston and Summit shall use their
reasonable best efforts to have the S-4 declared effective under the Securities
Act as promptly as practicable after such filing, and Summit shall thereafter
mail or deliver the Proxy Statement to its stockholders. FleetBoston shall also
use its reasonable 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 Summit shall furnish all information
concerning Summit and the holders of Summit Capital Stock as may be reasonably
requested in connection with any such action.
(b) The parties hereto shall cooperate with each other and use
their reasonable best efforts to promptly prepare and file all necessary
documentation, to effect all applications, notices, petitions and filings, to
obtain as promptly as practicable all permits, consents, approvals and
authorizations of all third parties and Governmental Entities which are
necessary or advisable to consummate the transactions contemplated by this
Agreement (including, without limitation, the Merger and the Bank Merger), and
to comply with the terms and conditions of all such permits, consents, approvals
and authorizations of all such Governmental Entities. FleetBoston and Summit
shall have the right to review in advance, and, to the extent practicable, each
will consult the other on, in each case subject to applicable laws relating to
the exchange of information, all the information relating to Summit or
FleetBoston, as the case may be, and any of their respective Subsidiaries, which
appear in any filing made with, or written materials submitted to, any third
party or any Governmental Entity in connection with the transactions
contemplated by this Agreement. In exercising the foregoing right, each of the
parties hereto shall act reasonably and as promptly as practicable. The parties
hereto agree that they will consult with each other with respect to the
obtaining of all permits, consents, approvals and authorizations of all third
parties and Governmental Entities necessary or advisable to consummate the
transactions contemplated by this Agreement and each party will keep the other
apprised of the status of matters relating to completion of the transactions
contemplated herein.
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(c) FleetBoston and Summit shall, upon request, furnish each other
with all information concerning themselves, their Subsidiaries, directors,
officers and stockholders and such other matters as may be reasonably necessary
or advisable in connection with the Proxy Statement, the S-4 or any other
statement, filing, notice or application made by or on behalf of FleetBoston,
Summit or any of their respective Subsidiaries to any Governmental Entity in
connection with the Merger and the other transactions contemplated by this
Agreement.
(d) FleetBoston and Summit shall promptly advise each other upon
receiving any communication from any Governmental Entity whose consent or
approval is required for consummation of the transactions contemplated by this
Agreement that causes such party to believe that there is a reasonable
likelihood that any Requisite Regulatory Approval will not be obtained or that
the receipt of any such approval will be materially delayed.
6.2 Access to Information. (a) Upon reasonable notice and subject
to applicable laws relating to the exchange of information, the parties shall,
and shall cause each of its Subsidiaries to, afford to the officers, employees,
accountants, counsel and other representatives of the other party, access,
during normal business hours during the period prior to the Effective Time, to
all its properties, books, contracts, commitments and records, and, during such
period, the parties shall, and shall cause its Subsidiaries to, make available
to the other party (i) a copy of each report, schedule, registration statement
and other document filed or received by it during such period pursuant to the
requirements of federal securities laws or federal or state banking laws (other
than reports or documents which such party is not permitted to disclose under
applicable law) and (ii) all other information concerning its business,
properties and personnel as the other party may reasonably request. None of the
parties nor any of their Subsidiaries shall be required to provide access to or
to disclose information where such access or disclosure would jeopardize the
attorney-client privilege of such party or its Subsidiaries or contravene any
law, rule, regulation, order, judgment, decree, fiduciary duty or binding
agreement entered into prior to the date of this Agreement. The parties hereto
will make appropriate substitute disclosure arrangements under circumstances in
which the restrictions of the preceding sentence apply.
(b) Except as provided in Section 9.9, each party to this Agreement
shall hold, and shall cause its respective Subsidiaries and its and its
Subsidiaries' directors, officers, employees, agents, consultants and advisors
to hold, in strict confidence, unless disclosure is compelled by judicial or
administrative process or, based on the advice of its counsel, by other
requirement of law or any relevant stock exchange, all non-public records,
books, contracts, instruments, computer data and other data and information
(collectively, and including any copies thereof and any reports, analyses,
compilations, forecasts, studies or other documents prepared by the Receiving
Party, "Information") concerning the other party furnished to it (the "Receiving
Party") by the other party or its representatives in connection with entering
into this Agreement or in fulfilling its obligations hereunder, and no Receiving
Party shall release or disclose such Information to any other person, except its
auditors, attorneys, financial advisors, bankers, other consultants and advisors
and, to the extent permitted above, to any Governmental
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Entity or use such information other than in connection with this Agreement (in
all cases except to the extent the Receiving Party can demonstrate that such
Information or applicable portion thereof (i) is or has become generally
available to the public other than as a result of a disclosure directly or
indirectly by the Receiving Party or its representatives, (ii) was already known
to such party prior to receipt from the other party or its representatives and
were not made known to the Receiving Party by a source that was then prohibited
from disclosing such information, or (iii) becomes available on a
non-confidential basis from a source other than the Receiving Party or its
representatives provided that such source was not then known by the Receiving
Party to be prohibited from disclosing such information). In the event of a
termination of this Agreement, the parties to this Agreement shall upon request
by the party providing the Information destroy or return to the party providing
the Information all Information, as well as all copies and translations thereof,
provided by the other party or any of its representatives; provided, however,
that upon such request, the Receiving Party may at its option chose not to
return, and shall instead destroy (and certify such destruction by an authorized
officer of the Receiving Party), any reports, analyses, compilations, forecasts,
studies or other documents prepared by the Receiving Party constituting
"Information."
(c) No investigation by either of the parties or their respective
representatives shall affect the representations and warranties of the other set
forth herein.
6.3 Summit Stockholder Approval. Summit shall call a meeting of its
stockholders to be held as soon as reasonably practicable for the purpose of
voting upon the requisite stockholder approvals required in connection with this
Agreement and the Merger. The Board of Directors of Summit shall use its
reasonable best efforts to obtain from the stockholders of Summit the vote in
favor of the adoption of this Agreement required by the NJBCA and Summit
Certificate and By-Laws to consummate the transactions contemplated hereby;
provided that the Board of Directors of Summit may withdraw its recommendation
of the Agreement and the Merger if the Board of Directors of Summit determines,
in good faith after consultation with outside legal counsel, that the failure to
take such action would be inconsistent with its fiduciary duties under
applicable law.
6.4 Legal Conditions to Merger. Each of FleetBoston and Summit
shall, and shall cause its Subsidiaries to, use their reasonable best efforts
(a) to take, or cause to be taken, all actions necessary, proper or advisable to
comply promptly with all legal requirements that may be imposed on such party or
its Subsidiaries with respect to the Merger and, subject to the conditions set
forth in Article VII hereof, to consummate the transactions contemplated by this
Agreement, and (b) to obtain (and to cooperate with the other party to obtain)
any material consent, authorization, order or approval of, or any exemption by,
any Governmental Entity and any other third party that is required to be
obtained by Summit or FleetBoston or any of their respective Subsidiaries in
connection with the Merger and the other transactions contemplated by this
Agreement.
6.5 Affiliates; Publication of Combined Financial Results. (a) Each
of FleetBoston and Summit shall use its reasonable best efforts to cause each
director,
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executive officer and other person who is an "affiliate" (for purposes of Rule
145 under the Securities Act and for purposes of qualifying the Merger for
"pooling of interests" accounting treatment) of such party to deliver to the
other party hereto, as soon as practicable after the date of this Agreement, and
prior to the date of the stockholders' meeting called by Summit to approve this
Agreement, a written agreement, in the form of Exhibit 6.5(a)(1) or (2), as
applicable, hereto.
(b) The Surviving Corporation shall use its best efforts to publish
as promptly as reasonably practical, but in no event later than 90 days after
the end of the first month after the Effective Time in which there are at least
30 days of post-Merger combined operations (which month may be the month in
which the Effective Time occurs), combined sales and net income figures as
contemplated by and in accordance with the terms of SEC Accounting Series
Release No. 135.
6.6 Stock Exchange Listing. FleetBoston shall cause the shares of
FleetBoston Common Stock, to be issued in the Merger to be approved for listing
on the NYSE, subject to official notice of issuance, prior to the Effective
Time.
6.7 Employee Benefit Plans. (a) Until December 31, 2001, the
benefits to be provided to employees of Summit and its Subsidiaries as of the
Effective Time ("Covered Employees") shall be substantially the same benefit
plans and programs provided by Summit or its Subsidiaries, as the case may be,
to such employees as of the date hereof. From and after December 31, 2001, the
benefits to be provided to the Covered Employees shall be the benefit plans and
programs provided to similarly situated employees of FleetBoston. FleetBoston
shall, from and after the Effective Time, (i) comply with Summit Plans and other
contractual commitments of Summit to its current and former employees in
accordance with their terms and honor all employee benefit obligations to
current and former employees of Summit and its Subsidiaries under Summit Plans
or the applicable contractual commitment, (ii) provide Covered Employees credit
for the most recent period of uninterrupted service (including any bridging or
prior service credit, without regard to whether there has been an interruption
in service, solely to the extent provided by Summit and its Subsidiaries as of
the date hereof) with Summit or any of its Subsidiaries (and their predecessors)
prior to the Effective Time under employee benefit plans of FleetBoston or its
Subsidiaries (other than FleetBoston's noncontributory cash balance defined
benefit pension plan), (iii) cause any and all pre-existing condition
limitations (to the extent such limitations did not apply to a pre-existing
condition under comparable Summit Plans) and eligibility waiting periods under
group health plans of FleetBoston to be waived with respect to Covered Employees
(and their eligible dependents) who become participants in such group health
plans and (iv) assume, or cause its applicable Subsidiary to assume, all
contracts and agreements with employees of Summit, which agreements were entered
into prior to the date hereof and which are listed on Section 5.2 of Summit
Disclosure Schedule, and all obligations thereunder. From and after the
Effective Time, FleetBoston shall honor all vacation and paid time off of the
Covered Employees accrued as of the Effective Time, in accordance with Summit
policy as in effect on the date hereof. From and after the Effective Time, a
Covered Employee who is terminated (as defined in the applicable Summit
severance plan or policy as in effect on the date
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hereof) during the period commencing at the Effective Time and ending on the
12-month anniversary thereof shall be entitled to receive the greater of (i) the
severance payments and benefits under the applicable Summit severance plan or
policy as in effect on the date hereof (without amendment on or after the
Effective Time) and (ii) the severance payments and benefits under FleetBoston's
severance plan or policy as in effect on the date of termination of such Covered
Employee. In addition, FleetBoston will comply with Section 6.7 of Summit
Disclosure Schedule.
(b) Nothing in this Section 6.7 shall be interpreted as preventing
the Surviving Corporation or FleetBoston from amending, modifying or terminating
any FleetBoston Benefit Plans or other contracts, arrangements, commitments or
understandings, in accordance with their terms and applicable law.
6.8 Indemnification; Directors' and Officers' Insurance. (a) In the
event of any threatened or actual claim, action, suit, proceeding or
investigation, whether civil, criminal or administrative, including, without
limitation, any such claim, action, suit, proceeding or investigation in which
any individual who is now, or has been at any time prior to the date of this
Agreement, or who becomes prior to the Effective Time, a director or officer or
employee of Summit or any of its Subsidiaries (the "Indemnified Parties"), is,
or is threatened to be, made a party based in whole or in part on, or arising in
whole or in part out of, or pertaining to (i) the fact that he is or was a
director, officer or employee of Summit or any of its Subsidiaries or (ii) this
Agreement, Summit Option Agreement or any of the transactions contemplated
hereby or thereby, whether in any case asserted or arising before or after the
Effective Time, the parties hereto agree to cooperate and use their best efforts
to defend against and respond thereto. It is understood and agreed that after
the Effective Time, FleetBoston shall indemnify and hold harmless, as and to the
fullest extent provided by applicable law, Summit Certificate, Summit By-Laws
and any agreement set forth in Section 6.8 of Summit Disclosure Schedule, each
such Indemnified Party against any losses, claims, damages, liabilities, costs,
expenses (including reimbursement for reasonable fees and expenses incurred in
advance of the final disposition of any claim, suit, proceeding or investigation
to each Indemnified Party as provided by Summit Certificate, Summit By-Laws and
any agreement set forth in Section 6.8 of Summit Disclosure Schedule),
judgments, fines and amounts paid in settlement in connection with any such
threatened or actual claim, action, suit, proceeding or investigation.
(b) FleetBoston shall use its reasonable best efforts to cause the
individuals serving as officers and directors of Summit or any of its
Subsidiaries immediately prior to the Effective Time to be covered for a period
of six (6) years from the Effective Time by the directors' and officers'
liability insurance policy maintained by Summit (provided that FleetBoston may
substitute therefor policies of at least the same coverage and amounts
containing terms and conditions which are not less advantageous than such
policy) with respect to acts or omissions occurring prior to the Effective Time
which were committed by such officers and directors in their capacity as such;
provided that in no event shall FleetBoston be required to expend in any one
year an amount in excess of 200% of the annual premiums currently paid by Summit
(which current amount is set forth in Section 6.8 of Summit Disclosure Schedule)
for such insurance
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(the "Insurance Amount), and provided further that if FleetBoston is unable to
maintain such policy (or such substitute policy) as a result of the preceding
proviso, FleetBoston shall use its reasonable best efforts to obtain as much
comparable insurance as is available for the Insurance Amount.
(c) The provisions of this Section 6.8 shall survive the Effective
Time and are intended to be for the benefit of, and shall be enforceable by,
each Indemnified Party and his or her heirs and representatives.
6.9 Additional Agreements. In case at any time after the Effective
Time any further action is necessary or desirable to carry out the purposes of
this Agreement (including, without limitation, any merger between a Subsidiary
of FleetBoston, on the one hand, and a Subsidiary of Summit, on the other) or to
vest the Surviving Corporation with full title to all properties, assets,
rights, approvals, immunities and franchises of any of the parties to the
Merger, the proper officers and directors of each party to this Agreement and
their respective Subsidiaries shall take all such necessary action as may be
reasonably requested by, and at the sole expense of, FleetBoston.
6.10 Advice of Changes. FleetBoston and Summit shall each promptly
advise the other party of any change or event (i) having a Material Adverse
Effect on it or (ii) which it believes would or would be reasonably likely to
cause or constitute a material breach of any of its representations, warranties
or covenants contained herein.
6.11 Dividends. After the date of this Agreement, each of
FleetBoston and Summit shall coordinate with the other the declaration of any
dividends in respect of FleetBoston Common Stock and Summit Common Stock and the
record dates and payment dates relating thereto, it being the intention of the
parties hereto that holders of Summit Common Stock shall not receive two
dividends, or fail to receive one dividend, for any quarter with respect to
their shares of Summit Common Stock and any shares of FleetBoston Common Stock
any such holder receives in exchange therefor in the Merger.
6.12 Exemption from Liability Under Section 16(b). Assuming that
Summit delivers to FleetBoston the Section 16 Information (as defined below) in
a timely fashion, the Board of Directors of FleetBoston, or a committee of
Non-Employee Directors thereof (as such term is defined for purposes of Rule
16b-3(d) under the Exchange Act), shall adopt a resolution providing that the
receipt by Summit Insiders of FleetBoston Common Stock in exchange for shares of
Summit Common Stock, and of options on FleetBoston Common Stock upon conversion
of options on Summit Common Stock, in each case pursuant to the transactions
contemplated hereby and to the extent such securities are listed in the Section
16 Information, are intended to be exempt from liability pursuant to Section
16(b) under the Exchange Act. "Section 16 Information" shall mean information
accurate in all respects regarding Summit Insiders, the number of shares of
Summit Common Stock held by each such Summit Insider and expected to be
exchanged for FleetBoston Common Stock in the Merger, and the number and
description of the options on Summit Common Stock held by each such Summit
Insider and expected to be converted into options on FleetBoston Common Stock in
connection with the Merger. The "Summit Insiders" shall mean those officers and
directors of
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Summit who are subject to the reporting requirements of Section 16(a) of the
Exchange Act and who are listed in the Section 16 Information.
6.13 Directorships. FleetBoston shall take such actions as may be
reasonably required (including as set forth in Section 6.13 of the FleetBoston
Disclosure Schedule) to cause its Board of Directors to be expanded by two
members and to appoint Mr. T. Joseph Semrod and one of the current outside
directors of Summit Board of Directors (to be mutually agreed upon by
FleetBoston and Summit) to the class of FleetBoston directors with terms
expiring at the 2004 Annual Meeting of FleetBoston Stockholders.
6.14 Aggregate Capitalization. Summit will not take any action, or
fail to take any action, that results in the aggregate number of shares of
Summit Common Stock outstanding immediately prior to the Effective Time
(including all shares of Summit Common Stock subject to Summit Rights other than
Summit Option Agreement, but not including shares of Summit Common Stock held in
treasury) exceeding 186,365,926.
6.15 Community Commitments. From and after the Effective Time,
FleetBoston shall use its reasonable efforts to continue the community
commitments undertaken by Summit Bank Subsidiaries prior to the date hereof in
the communities currently served by such banks.
ARTICLE VII
CONDITIONS PRECEDENT
7.1 Conditions to Each Party's Obligation To Effect the Merger. The
respective obligations of the parties to effect the Merger shall be subject to
the satisfaction at or prior to the Effective Time of the following conditions:
(a) Stockholder Approval. This Agreement shall have been adopted
by the requisite affirmative vote of the holders of Summit Common Stock entitled
to vote thereon.
(b) NYSE Listing. The shares of FleetBoston Common Stock which
shall be issued to the stockholders of Summit upon consummation of the Merger
shall have been authorized for listing on the NYSE, subject to official notice
of issuance.
(c) Regulatory Approvals. All regulatory approvals set forth under
Sections 3.4 and 4.4 required to consummate the transactions contemplated
hereby, including the Merger, shall have been obtained and shall remain in full
force and effect and all statutory waiting periods in respect thereof shall have
expired (all such approvals and the expiration of all such waiting periods being
referred to herein as the "Requisite Regulatory Approvals").
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(d) S-4. The S-4 shall have become effective under the Securities
Act and no stop order suspending the effectiveness of the S-4 shall have been
issued and no proceedings for that purpose shall have been initiated or
threatened by the SEC.
(e) No Injunctions or Restraints; Illegality. No order, injunction
or decree issued by any court or agency of competent jurisdiction or other legal
restraint or prohibition (an "Injunction") preventing the consummation of the
Merger or any of the other transactions contemplated by this Agreement shall be
in effect. No statute, rule, regulation, order, Injunction or decree shall have
been enacted, entered, promulgated or enforced by any Governmental Entity which
prohibits, materially restricts or makes illegal consummation of the Merger or
the Bank Merger.
(f) Federal Tax Opinion. The parties hereto shall have received the
opinions of their respective counsel, Wachtell, Lipton, Rosen & Katz, and Weil,
Gotshal & Manges LLP, in form and substance reasonably satisfactory to
FleetBoston and Summit, as the case may be, dated as of the Closing Date,
substantially to the effect that, on the basis of facts, representations and
assumptions set forth in each such opinion which are consistent with the state
of facts existing at the Effective Time, the Merger will be treated as a
reorganization within the meaning of Section 368(a) of the Code. In rendering
such opinions, counsel may require and rely upon representations contained in
certificates of officers of FleetBoston, Summit and others, reasonably
satisfactory in form and substance to such counsel.
(g) Pooling of Interests. FleetBoston and Summit shall each have
received a letter from their respective independent accountants addressed to
Summit or FleetBoston, as the case may be, to the effect that the Merger will
qualify for "pooling of interests" accounting treatment.
7.2 Conditions to Obligations of FleetBoston. The obligation of
FleetBoston to effect the Merger is also subject to the satisfaction, or waiver
by FleetBoston, at or prior to the Effective Time, of the following conditions:
(a) Representations and Warranties. The representations and
warranties of Summit set forth in this Agreement shall be true and correct in
all material respects 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
Closing Date as though made on and as of the Closing Date; provided, however,
that for purposes of this paragraph, such representations and warranties shall
be deemed to be true and correct unless the failure or failures of such
representations and warranties to be so true and correct, either individually or
in the aggregate, and without giving effect to any qualification as to
materiality or Material Adverse Effect set forth in such representations or
warranties, will have or are reasonably likely to have a Material Adverse Effect
on Summit or the Surviving Corporation. FleetBoston shall have received a
certificate signed on behalf of Summit by the Chief Executive Officer and the
Chief Financial Officer of Summit to the foregoing effect.
(b) Performance of Obligations of Summit. Summit shall have
performed in all material respects all obligations required to be performed by
it under
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this Agreement at or prior to the Closing Date, and FleetBoston shall have
received a certificate signed on behalf of Summit by the Chief Executive Officer
and the Chief Financial Officer of Summit to such effect.
7.3 Conditions to Obligations of Summit. The obligation of Summit
to effect the Merger is also subject to the satisfaction or waiver by Summit at
or prior to the Effective Time of the following conditions:
(a) Representations and Warranties. The representations and
warranties of FleetBoston set forth in this Agreement shall be true and correct
in all material respects 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 Closing Date as though made on and as of the Closing Date, provided,
however, that for purposes of this paragraph, such representations and
warranties shall be deemed to be true and correct unless the failure or failures
of such representations and warranties to be so true and correct, either
individually or in the aggregate, and without giving effect to any qualification
as to materiality or Material Adverse Effect set forth in such representations
or warranties, will have or are reasonably likely to have a Material Adverse
Effect on FleetBoston. Summit shall have received a certificate signed on behalf
of FleetBoston by the Chief Executive Officer and the Chief Financial Officer of
FleetBoston to the foregoing effect.
(b) Performance of Obligations of FleetBoston. FleetBoston shall
have performed in all material respects all obligations required to be performed
by it under this Agreement at or prior to the Closing Date, and Summit shall
have received a certificate signed on behalf of FleetBoston by the Chief
Executive Officer and the Chief Financial Officer of FleetBoston to such effect.
ARTICLE VIII
TERMINATION AND AMENDMENT
8.1 Termination. This Agreement may be terminated at any time prior
to the Effective Time, whether before or after approval of the matters presented
in connection with the Merger by the stockholders of Summit:
(a) by mutual consent of FleetBoston and Summit in a written
instrument, if the Board of Directors of each so determines by a vote of a
majority of the members of its entire Board;
(b) by either the Board of Directors of FleetBoston or the Board of
Directors of Summit if any Governmental Entity that must grant a Requisite
Regulatory Approval has denied approval of the Merger or the Bank Merger and
such denial has become final and nonappealable or any Governmental Entity of
competent jurisdiction shall have issued a final nonappealable order permanently
enjoining or otherwise prohibiting the consummation of the transactions
contemplated by this Agreement;
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<PAGE>
(c) by either FleetBoston or Summit if the approval of Summit's
stockholders required for the consummation of the Merger shall not have been
obtained by reason of the failure to obtain the required vote at the meeting of
Summit stockholders contemplated by Section 6.3, or at any adjournment or
postponement thereof;
(d) by either the Board of Directors of FleetBoston or the Board of
Directors of Summit if the Merger shall not have been consummated on or before
the first anniversary of the date hereof unless the failure of the Closing to
occur by such date shall be due to the failure of the party seeking to terminate
this Agreement to perform or observe the covenants and agreements of such party
set forth herein; or
(e) by either the Board of Directors of FleetBoston or the Board of
Directors of Summit (provided that the terminating party is not then in breach
of any representation, warranty, covenant or other agreement contained herein)
if there shall have been a breach of any of the covenants or agreements or any
of the representations or warranties set forth in this Agreement on the part of
Summit, in the case of a termination by FleetBoston, or FleetBoston, in the case
of a termination by Summit, which breach, either individually or in the
aggregate, would constitute, if occurring or continuing on the Closing Date, the
failure of the conditions set forth in Section 7.2 or 7.3, as the case may be,
and which is not cured within 45 days following written notice to the party
committing such breach or by its nature or timing cannot be cured prior to the
Closing Date.
8.2 Effect of Termination. In the event of termination of this
Agreement by either FleetBoston or Summit as provided in Section 8.1, this
Agreement shall forthwith become void and have no effect, and none of
FleetBoston, Summit, any of their respective Subsidiaries or any of the officers
or directors of any of them shall have any liability of any nature whatsoever
hereunder, or in connection with the transactions contemplated hereby, except
that (i) Sections 6.2(b), 8.2, 9.2 and 9.3 shall survive any termination of this
Agreement, and (ii) notwithstanding anything to the contrary contained in this
Agreement, neither FleetBoston nor Summit shall be relieved or released from any
liabilities or damages arising out of its willful breach of any provision of
this Agreement.
8.3 Amendment. Subject to compliance with applicable law and
Section 1.1(b), this Agreement may be amended by the parties hereto, by action
taken or authorized by their respective Boards of Directors, at any time before
or after approval of the matters presented in connection with Merger by the
stockholders of FleetBoston and Summit; provided, however, that after any
approval of the transactions contemplated by this Agreement by the respective
stockholders of FleetBoston or Summit, there may not be, without further
approval of such stockholders, any amendment of this Agreement that changes the
amount or the form of the consideration to be delivered hereunder to the holders
of Summit Common Stock, other than as contemplated by this Agreement. This
Agreement may not be amended except by an instrument in writing signed on behalf
of each of the parties hereto.
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<PAGE>
8.4 Extension; Waiver. At any time prior to the Effective Time, the
parties hereto, by action taken or authorized by their respective Board of
Directors, may, to the extent legally allowed, (a) extend the time for the
performance of any of the obligations or other acts of the other parties hereto,
(b) waive any inaccuracies in the representations and warranties contained
herein or in any document delivered pursuant hereto and (c) waive compliance
with any of the agreements or conditions contained herein; provided, however,
that after any approval of the transactions contemplated by this Agreement by
the respective stockholders of FleetBoston or Summit, there may not be, without
further approval of such stockholders, any extension or waiver of this Agreement
or any portion thereof which reduces the amount or changes the form of the
consideration to be delivered to the holders of FleetBoston Common Stock
hereunder, other than as contemplated by this Agreement. Any agreement on the
part of a party hereto to any such extension or waiver shall be valid only if
set forth in a written instrument signed on behalf of such party, but such
extension or waiver or failure to insist on strict compliance with an
obligation, covenant, agreement or condition shall not operate as a waiver of,
or estoppel with respect to, any subsequent or other failure.
ARTICLE IX
GENERAL PROVISIONS
9.1 Closing. Subject to the terms and conditions of this Agreement,
the closing of the Merger (the "Closing") will take place at 10:00 a.m. on a
date and at a place to be specified by the parties, which shall be no later than
five business days after the satisfaction or waiver (subject to applicable law)
of the latest to occur of the conditions set forth in Article VII hereof (other
than those conditions that by their nature are required to be satisfied or
waived at the Closing), unless extended by mutual agreement of the parties (the
"Closing Date").
9.2 Nonsurvival of Representations, Warranties and Agreements. None
of the representations, warranties, covenants and agreements in this Agreement
or in any instrument delivered pursuant to this Agreement (other than Summit
Option Agreement, which shall terminate in accordance with its terms) shall
survive the Effective Time, except for Section 6.8 and for those other covenants
and agreements contained herein and therein which by their terms apply or are to
be performed in whole or in part after the Effective Time.
9.3 Expenses. All costs and expenses incurred in connection with
this Agreement and the transactions contemplated hereby shall be paid by the
party incurring such expense, provided, however, that the costs and expenses of
printing and mailing the Proxy Statement, and all filing and other fees paid to
the SEC in connection with the Merger, shall be borne equally by FleetBoston and
Summit.
9.4 Notices. All notices and other communications hereunder shall
be in writing and shall be deemed given if delivered personally, telecopied
(with confirmation), mailed by registered or certified mail (return receipt
requested) or
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<PAGE>
delivered by an express courier (with confirmation) to the parties at the
following addresses (or at such other address for a party as shall be specified
by like notice):
(a) if to FleetBoston, to:
FleetBoston Financial Corporation
One Federal Street
Boston, Massachusetts 02110
Attention: General Counsel
Telecopier: (617) 434-2186
with a copy to:
Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, New York 10019
Attention: Craig M. Wasserman, Esq.
Telecopier: (212) 403-2000
and
(b) if to Summit, to:
Summit Bancorp.
301 Carnegie Center
Princeton, New Jersey 08543
Attention: General Counsel
Telecopier: (609) 987-3435
with a copy to:
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, New York 10153
Ronald F. Daitz, Esq.
Stephen E. Jacobs, Esq.
Telecopier: (212) 310-8007
9.5 Interpretation. When a reference is made in this Agreement to
Sections, Exhibits or Schedules, such reference shall be to a Section of or
Exhibit or Schedule to this Agreement unless otherwise indicated. The table of
contents 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." Nothing contained herein shall require any party hereto or the
Board of Directors of such party to take or refrain from taking any action in
violation of applicable law. The Summit Disclosure Schedule and the FleetBoston
Disclosure Schedule, as well as all other schedules and all exhibits hereto,
shall be deemed part of this Agreement and included in any reference to this
Agreement.
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<PAGE>
9.6 Counterparts. This Agreement may be executed in counterparts,
all of which shall be considered one and the same agreement and shall become
effective when counterparts have been signed by each of the parties and
delivered to the other parties, it being understood that all parties need not
sign the same counterpart.
9.7 Entire Agreement. This Agreement (including the documents and
the instruments referred to herein) together with the Option Agreement
constitutes the entire agreement and supersedes all prior agreements and
understandings, both written and oral, among the parties with respect to the
subject matter hereof.
9.8 Governing Law. This Agreement shall be governed and construed
in accordance with the laws of the State of New York, without regard to any
applicable conflicts of law principles.
9.9 Publicity. Neither FleetBoston nor Summit shall, and neither
FleetBoston nor Summit shall permit any of its Subsidiaries to, issue or cause
the publication of any press release or other public announcement with respect
to, or otherwise make any public statement concerning, the transactions
contemplated by this Agreement without the consent of Summit (which consent
shall not be unreasonably withheld), in the case of a proposed announcement or
statement by FleetBoston, or FleetBoston, in the case of a proposed announcement
or statement by Summit (which consent shall not be unreasonably withheld);
provided, however, that a party may, without the prior consent of the other
party (but after prior consultation with the other party to the extent
practicable under the circumstances) issue or cause the publication of any press
release or other public announcement to the extent required by law or by the
rules and regulations of the NYSE.
9.10 Assignment; Third Party Beneficiaries. Neither this Agreement
nor any of the rights, interests or obligations shall be assigned by any of the
parties hereto (whether by operation of law or otherwise) without the prior
written consent of the other parties. Subject to the preceding sentence, this
Agreement will be binding upon, inure to the benefit of and be enforceable by
the parties and their respective successors and assigns. Except as otherwise
specifically provided in Section 6.8, this Agreement (including the documents
and instruments referred to herein) is not intended to confer upon any person
other than the parties hereto any rights or remedies hereunder.
REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
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<PAGE>
IN WITNESS WHEREOF, FleetBoston Financial Corporation and Summit
Bancorp. have caused this Agreement to be executed by their respective officers
thereunto duly authorized as of the date first above written.
SUMMIT BANCORP.
By: /s/ T. Joseph Semrod
-----------------------------------
Name: T. Joseph Semrod
Title: Chairman of the Board, President
and Chief Executive Officer
By: /s/ John G. Collins
-----------------------------------
Name: John G. Collins
Title: Vice Chairman
FLEETBOSTON FINANCIAL CORPORATION
By: /s/ Brian T. Moynihan
-----------------------------------
Name: Brian T. Moynihan
Title: Executive Vice President
By: /s/ H. Jay Sarles
-----------------------------------
Name: H. Jay Sarles
Title: Vice Chairman, National Financial
Services, and Chief Administrative Officer
SIGNATURE PAGE TO AGREEMENT AND PLAN OF MERGER
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<PAGE>
Schedule 6.5(a)(1)
Form of Affiliate Letter Addressed to Summit Bancorp.
Summit Bancorp.
301 Carnegie Center
Princeton, New Jersey 08543
Ladies and Gentlemen:
I have been advised that as of the date hereof I may be deemed to be
an "affiliate" of FleetBoston Financial Corporation, a Rhode Island corporation
("FleetBoston"), as the term "affiliate" is used in and for purposes of
Accounting Series Releases Nos. 130 and 135, as amended, of the Securities and
Exchange Commission ("Commission"). I have been further advised that pursuant to
the terms of the Agreement and Plan of Merger dated as of October 1, 2000 (the
"Merger Agreement"), by and betweeen FleetBoston and Summit Bancorp., a New
Jersey corporation ("Summit"), Summit shall be merged with and into FleetBoston
(the "Merger") and each share of the common stock, par value $0.80 per share, of
Summit ("Summit Common Stock") shall be converted into the right to receive 1.02
shares of common stock, par value $0.01 per share, of FleetBoston ("FleetBoston
Common Stock"). All terms used in this letter but not defined herein shall have
the meanings ascribed thereto in the Merger Agreement.
I represent to and covenant with Summit that, from the date that is
30 days prior to the Effective Time, I will not sell, transfer or otherwise
dispose of shares of Summit Common Stock held by me and that I will not sell,
transfer or otherwise dispose of any shares of FleetBoston Common Stock, until
after such time as results covering at least 30 days of combined operations of
FleetBoston and Summit after the Merger have been published by FleetBoston in
the form of a quarterly earnings report, an effective registration statement
filed with the Commission, a report to the Commission on Form 10-K, 10-Q, or
8-K, or any other public filing or announcement which includes the results of at
least 30 days of combined operations as contemplated by and in accordance with
the terms of SEC Accounting Series Release No. 35; provided, however, that this
paragraph shall not prevent me from selling, transferring or disposing of such
number of shares of FleetBoston Common Stock or Summit Common Stock as will not,
in the reasonable judgment of accountants to FleetBoston, interfere with or
prevent the Merger being accounted for as a "pooling of interests," taking into
account the nature, extent and timing of such sale, transfer or disposition and
of similar sales, transfers or dispositions by all affiliates of Summit and all
other affiliates of FleetBoston.
It is understood and agreed that this Letter Agreement shall
terminate and be of no further force and effect if the Merger 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 at
such time as financial results covering at least thirty days of combined
operations following the effective date of the Merger have been published as
contemplated by and in accordance with the terms of SEC Accounting Series
Release No. 35.
<PAGE>
Execution of this letter should not be construed as an admission on
my part that I am an "affiliate" of FleetBoston as described in the first
paragraph of this letter 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.
Very truly yours,
By:
-----------------------------
Name:
Accepted this [___] day of
[__________], 2000 by
Summit Bancorp.
By:
---------------------------------
Name:
Title:
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<PAGE>
Schedule 6.5(a)(2)
Form of Affiliate Letter Addressed to FleetBoston
FleetBoston Financial Corporation
One Federal Street
Boston, Massachusetts 02110
Ladies and Gentlemen:
I have been advised that as of the date hereof I may be deemed to be
an "affiliate" of Summit, a New Jersey corporation ("Summit"), as the term
"affiliate" is (i) defined for purposes of paragraphs (c) and (d) of Rule 145 of
the Rules and Regulations (the "Rules and Regulations") of the Securities and
Exchange Commission (the "Commission") under the Securities Act of 1933, as
amended (the "Act"), and/or (ii) used in and for purposes of Accounting Series
Releases Nos. 130 and 135, as amended, of the Commission. I have been further
advised that pursuant to the terms of the Agreement and Plan of Merger dated as
of October 1, 2000 (the "Merger Agreement"), by and between FleetBoston and
Summit, Summit shall be merged with and into FleetBoston (the "Merger") and each
share of the common stock, par value $0.80 per share, of Summit ("Summit Common
Stock") shall be converted into the right to receive 1.02 shares of common
stock, par value $0.01 per share, of FleetBoston ("FleetBoston Common Stock").
All terms used in this letter but not defined herein shall have the meanings
ascribed thereto in the Merger Agreement.
I represent, warrant and covenant to FleetBoston that in the event I
receive any FleetBoston Common Stock as a result of the Merger:
(a) I shall not make any sale, transfer or other disposition of
FleetBoston Common Stock in violation of the Act or the Rules and Regulations.
(b) I have carefully read this letter and the Merger Agreement and
discussed its requirements and other applicable limitations upon my ability to
sell, transfer or otherwise dispose of FleetBoston Common Stock to the extent I
believed necessary with my counsel or counsel for Summit.
(c) I have been advised that the issuance of FleetBoston Common Stock
to me pursuant to the Merger will be registered with the Commission under the
Act on a Registration Statement on Form S-4. However, I have also been advised
that, since at the time the Merger will be submitted for a vote of the
stockholders of Summit I may be deemed to have been an affiliate of Summit and
the distribution by me of FleetBoston Common Stock has not been registered under
the Act, I may not sell, transfer or otherwise dispose of FleetBoston Common
Stock issued to me in the Merger unless (i) such sale, transfer or other
disposition has been registered under the Act, (ii) such sale, transfer or other
disposition is made in conformity with the volume and other limitations of Rule
145 promulgated by the Commission under the Act, or (iii) in the opinion of
counsel reasonably acceptable to FleetBoston, such sale, transfer or other
disposition is otherwise exempt from registration under the Act.
<PAGE>
(d) I understand that FleetBoston is under no obligation to register
the sale, transfer or other disposition of FleetBoston Common Stock by me or on
my behalf under the Act or to take any other action necessary in order to make
compliance with an exemption from such registration available.
(e) I also understand that stop transfer instructions will be given
to FleetBoston's transfer agents with respect to FleetBoston Common Stock and
that there will be placed on the certificates for FleetBoston Common Stock
issued to me, or any substitutions therefor, a legend stating in substance:
"The securities represented by this certificate have been issued in
a transaction to which Rule 145 promulgated under the Securities Act
of 1933 applies and may only be sold or otherwise transferred in
compliance with the requirements of Rule 145 or pursuant to a
registration statement under said act or an exemption from such
registration."
(f) I also understand that unless the transfer by me of my
FleetBoston Common Stock has been registered under the Act or is a sale made in
conformity with the provisions of Rule 145, FleetBoston reserves the right to
put the following legend on the certificates issued to my transferee:
"The shares represented by this certificate have not been registered
under the Securities Act of 1933 and were acquired from a person who
received such shares in a transaction to which Rule 145 promulgated
under the Securities Act of 1933 applies. The shares have been
acquired by the holder not with a view to, or for resale in
connection with, any distribution thereof within the meaning of the
Securities Act of 1933 and may not be sold, pledged or otherwise
transferred except in accordance with an exemption from the
registration requirements of the Securities Act of 1933."
It is understood and agreed that the legends set forth in paragraphs
(e) and (f) above shall be removed by delivery of substitute certificates
without such legend if the undersigned shall have delivered to FleetBoston a
copy of a letter from the staff of the Commission, an opinion of counsel in form
and substance reasonably satisfactory to FleetBoston, or other evidence
reasonably satisfactory to FleetBoston, to the effect that such legend is not
required for purposes of the Act.
I further represent to and covenant with FleetBoston that, from the
date that is 30 days prior to the Effective Time, I will not sell, transfer or
otherwise dispose of shares of Summit Common Stock held by me and that I will
not sell, transfer or otherwise dispose of any shares of FleetBoston Common
Stock received by me in the Merger, until after such time as results covering at
least 30 days of combined operations of FleetBoston and Summitafter the Merger
have been published by FleetBoston, in the form of a quarterly earnings report,
an effective registration statement filed with the Commission, a report to the
Commission on Form 10-K, 10-Q or 8-K, or any other public filing or announcement
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<PAGE>
which includes the results of at least 30 days of combined operations; provided,
however, that this paragraph shall not prevent me from selling, transferring or
disposing of such number of shares of Summit Common Stock or FleetBoston Common
Stock as will not, in the reasonable judgment of accountants to FleetBoston,
interfere with or prevent the Merger being accounted for as a "pooling of
interests," taking into account the nature, extent and timing of such sale,
transfer or disposition and of similar sales, transfers or dispositions by all
other affiliates of Summit and all affiliates of FleetBoston.
I recognize and agree that the foregoing provisions also apply to
(i) my spouse, (ii) any relative of mine or my spouse 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 corporate 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.
It is understood and agreed that this Letter Agreement shall
terminate and be of no further force and effect if the Merger 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 upon
the later of (i) such time as financial results covering at least thirty days of
combined operations following the effective date of the Merger have been
published as contemplated by and in accordance with the terms of SEC Accounting
Series Release No. 35 and (ii) delivery by the undersigned to FleetBoston of a
copy of a letter from the staff of the SEC, an opinion of counsel in form and
substance reasonably satisfactory to FleetBoston, or other evidence reasonably
satisfactory to FleetBoston, to the effect that a transfer of the undersigned's
shares of FleetBoston Common Stock will not violate the Act or any of the rules
and regulations of the SEC thereunder.
Execution of this letter should not be construed as an admission on
my part that I am an "affiliate" of Summit as described in the first paragraph
of this letter 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.
Very truly yours,
By:
-------------------------------
Name:
Accepted this [___] day of
[__________], 2000 by
FleetBoston Financial Corporation
By:
---------------------------------
Name:
Title:
